Circulation distribution Partners of Energy Academy Europe Partners of Energy Valley Partners of the International NRG Battle Partners of Kivi Niria University of Groningen Hanze University of Applied Sciences TU Delft TU Eindhoven TU Twente Companies in the Energy Sector Municipalities in the Netherlands Province of Groningen Energy Events http://www.nrgmagazine.nl/agenda NRG Magazine is a quarterly publication. Kraneweg 13-7 9718 JC Groningen Tel.: +31 50 317 14 75 Fax.: +31 50 317 14 72 email@example.com www.nrgmagazine.nl www.twitter.com/thenrgbattle www.facebook.com/nrgbattle Editor-in-Chief Cristina Huré Managing Editor Mariia Stolyga Designer Ashley de Jong-Doucette Sales Rob Hogenelst, Director Sales Tel: +31 50 317 14 70 firstname.lastname@example.org Printer Veldhuis Media
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Magazine Circulation 9.500 per edition
nergy is, without a doubt, an integral part of our existence. As we aim to energize our planet and offer clean energy for all, the future of natural gas remains bright. This edition of NRG Magazine is dedicated to exactly that – the future of gas from different perspectives and the IGRC2014. This year, the IGRC is dedicated to innovations and technology changing the face of the gas market. Throughout this edition, we’ve dug deeper into the kinds of innovations and new developments that are securing the future of gas. We’ve even found startups redefining the natural gas sector by introducing more efficient compression technology (page 8), best uses for LNG and shale’s potential across the world, to name a few. What is most important, however, are cross-sector cooperations. Renewables have developed significantly but they cannot stand alone. As we head into the future, and as our energy demands continue to grow, cooperation within different energy sectors will pave the way to a sustainable and more secure energy future. Thriving on innovation and cross-sector cooperations, the future of gas and the future of our global energy system promises long lasting success. New business models for gas are also on the rise, while technology is advancing rapidly. The coming decade looks very exciting for players in the natural gas industry. With Russia and China striking a monumental deal (page 24), they certainly won’t be the only ones teaming up in the near future. Open innovation is another aspect lying at the core of natural gas’ bright future. Corporate giants like Shell, for instance, have accepted this notion and welcome innovation for all sectors, even beyond the field of energy (page 30). The purpose is to defy the traditional means of extracting, transporting and storing gas, and to find out of the box solutions for common challenges that the natural gas industry faces today. This year’s IGRC, held in Copenhagen will facilitate discussions on R&D, innovation, how to make gas cleaner and new market opportunities. We’ve also included Denmark’s story in this edition to exemplify how the renewables revolution is underway globally. Denmark shows us that eventually, we will be able to reach 100% renewable energy in our lifetime, but until we exhaust our resources, natural gas will remain a critical component of our energy mix. Last but not least, we didn’t forget about Energie 2014, covering topics related to technology leading us to sustainable and energy efficient solutions. On behalf of the editorial team, we hope to see you in Copenhagen!
Cover illustration Ashley de Jong-Doucette Contact For subscriptions to NRG Magazine or ideas for future editions of the magazine, please contact: email@example.com No part of this publication may be copied or reproduced without written permission of the publisher. The publisher and authors do not accept liability for damages of any nature whatsoever, resulting from actions and decisions based on the information in this magazine. This issue is produced with the utmost care.
Cristina Huré Editor in Chief
Editor's Choice Pedro Santos at OsComp Systems, pages 8-9.
THE FUTURE OF GAS
The IGRC2014 Copenhagen Edition
Start-Updates OsComp Systems, Tvilight, M2Power B.V. and E-Stone Batteries
Russia and China sign off on a landmark deal
Dr.Finance advises young entrepreneurs
Experts from around the world discuss the future of gas in preparation for IGRC2014
The Power of Siberia
Q&A with Dr.Finance
The Future of Gas
Shell Innovation Open House Shell opens its doors to innovators from all sectors in their Innovation Open House
Danish Trailblazers Denmark sets the stage for the sustainable energy transition
36 The Power of Wind 46 One Man's Trash The Danish Wind Industry Association strengthens the European Power Grid
Working Against the Clock Ecofys and Top Sector Energy take on the challenge to change the future of energy
The InnoFase industrial terrain is undertaking a cooperative energy revolution.
Reinventing Gas Catrinus Jepma heads research into new directions for the gas industry
Energie2014 A preview of the Energie2014 conference in Den Bosch
NRG Magazine 5
M I S S! O T T AN NOT W O D N YOU O I T I T PE A COM
THE BATTLE The spirit of competition is alive and well in the fast-paced world of energy! At the NRG Battle - World Edition, star teams of young talents from around the globe are brought together to face some of the most pressing challenges in the world of energy. This year, we feature challenges from GDF Suez, DNV GL, and Gasunie! Teams will present their ideas in front of a jury of experts. Participants in the 2014 NRG Battle - World Edition will be spending the week in Copenhagen, working on their challenges and rubbing elbows with top players in the energy sector. The winning team will receive the grand prize - a ticket for a trip around the world! Watch the Battle at IGRC2014 - the 3 finalists will present their solutions in a grand finale at the Tivoli Congress Center, in the Congress Hall on Friday, September 19th right before the IGRC2014 closing plenary.
WATECH TH BAT TLE
lts: a r y Re su Prelimin r 18th eptembe S , y a d Thurs :30 12:30-13 r 19th eptembe S , y a d ri Finals: F :00 10:30-11
Jèrôme Ferrier Jury President President International Gas Union (IGU)
Marc Florette Director Digital Division GDF Suez
David Carroll President and CEO GTI, Vice President IGU
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Foreword The Future of Gas I is
t is very clear that there is a bright future for natural gas, both conventional and unconventional. When we talk about conventional gas reserves, there is still enough gas for an entire century, if not more. This guarantees and promotes a bright future for gas. Particularly true in Asia and the Pacific, natural gas is at the top of the agenda. In Australia, there are seven LNG projects - three of those are based on conventional gas and four on unconventional gas. After these projects are commissioned, Australia will become the first LNG exporter in the world. It’s very exciting to see how such a coal-oriented country has redefined their energy policies towards natural gas. We also see China making commitments with Russia and Australia. China will probably become the first gas importing country in the next few years. North and South America are in a good position as well, with the US soon to become an exporter of shale gas and with Latin America having significant gas reserves (Mexico, Argentina and Brazil). Countries like Saudi Arabia, Iraq and Egypt are equally important for the global market as they have key trade projects in place.
The only region where the current gas situation is distressed is Europe. Various factors play a role here – the economic crisis and its impact on energy production, combined with the lack of an integrated European energy policy, have posed a real issue. As coal plants are still being developed across Europe, we must convince the European decision-makers that natural gas is the only acceptable fossil fuel and demonstrate this as well. Otherwise, we will not meet our clean energy goals. Natural gas is the best complimentary gas and the only one that we must make efforts to develop alongside renewables. We still need fossil fuel energy for the next 10-15 years, and the cleanest one is natural gas. We must also send the right signals to countries like Turkmenistan, Azerbaijan, Iran, Russia and Qatar. They have the largest reserves for conventional gas, and we must give clear signals to encourage exports to Europe instead of to countries in Asia like China and India. For European gas to survive, we must diversify our importers and capacity to receive gas. It is important to develop the appropriate policy tools now, to be able to receive gas from different parts of the world.
Jérôme Ferrier Jérôme Ferrier (TOTAL, France), has more than 30 years of experience in natural gas activities ranging from production to marketing in Africa and Europe. He started as a graduate of petroleum engineering and since 1995 he has been a Managing Director of GSO, Director of Total Gas and Power for the Americas, President of Total Gas and Power for the Southern Cone in South America, Group Representative in Argentina, Special Adviser to the President of Total Gas and Power, and since 2008 - Senior Vice-President. He has been IGU President since 2012 and remains in power until 2015.1
I am very optimistic and excited that natural gas is considered the only acceptable energy fossil fuel with compatibility and consistency for its development alongside renewables. Even the Renewable Energy Association acknowledges that to reach 100% renewable energy in our lifetime, we still need natural gas as a partner. Natural gas will survive for a long time coming, and it will certainly help us clean our environment. I have no doubt about this.
NRG Magazine 7
Start Up-dates | OsComp Systems
Start Up-dates OsComp Systems
The New School
of Gas Compression
Within the oil & gas industry, great value is attached to new high-impact solutions meant to make it cleaner and more efficient. It is astonishing that compressors, a staple of the sector, have remained almost non-modified for a century. The innovation is finally coming.
YOUR NEXT GAS COMPRESSOR
orn and raised in the Dominican Republic, Pedro started working with compressors at the age of six. He would get old engines from his dad, take them apart, and put them back together to his heart content. “I worked summers, and after high-school graduation, I paid my way through college,” shares Pedro. What started as a kid’s hobby turned into a lifetime occupation.
The core idea lies with a new rotary high-pressure compressor that replaces its old-school counterpart, a type that uses pistons. OsComp’s compressor can handle “wet gas”, a type of gas containing liquids or condensable vapors. Working on gas and liquids together, which is often the reality for offshore gas sites, becomes easier.
Pedro Santos, aged 27, is the founder and CEO of OsComp Systems, a startup dedicated to bringing compressing technologies up to par with modern industry requirements.
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“I had an idea to improve the efficiency of compressors in natural gas. I teamed up with two MIT engineers and we started the company on Thanksgiving Day, 2009,” tells Pedro. To create what would become OsComp Systems, Pedro invested the first three hundred thousand dollars himself. Then came a long round of beating down investors’ doors, looking for support. Only two out of forty investors approached agreed. Those two, however,(Energy Ventures and Chevron Technology Ventures) turned out to be among the most successful investors in the sector. Pedro comments, “All other investors just saw a very young and inexperienced team. Chevron saw someone with a solution to a problem that they are facing constantly.”
“Typical compression requires handling gas and liquids separately, resulting in fugitive emissions and methane discharges. Our technology keeps the compression near-isothermal and in a combined stream, the same way it comes out of the well,” explains Pedro. Modern production of oil & gas dictates new requirements to gas compression, and one thing the industry has to deal with these days are liquid-rich reservoirs containing gas and oil. OsComp’s compressing technology enables handling both gas and liquids within the same production pipeline, thus writing off the need to have two separate pipes. Taken together, all of this diminishes the ecological footprint of gas production, and capital expenditure.
All other investors just saw a very young and inexperienced team. Chevron saw someone with a solution to a problem that they are facing constantly. READY TO CONQUER THE WORLD “There are a lot of challenges for a small company in a very competitive world, but compression is used in practically every industry. Our technology is our main advantage, although development of mechanical technologies is a long and expensive road to take.” explains Pedro. Though the basic mechanism of the new compressor was worked out in the course of one year in 2010, putting it to practice took longer – OsComp is finally going to production fields this Fall, four years after the main idea was developed. “We are getting ready to demonstrate our capabilities in real life applications, outside of the lab. That’s the most exciting thing ahead of us,” shares Pedro. According to him, their special start-up culture and a flat organizational structure attracted many to work for the fledgling company. OsComp now boasts 23 team members, who altogether represent more than 100 years of cross-sector experience. “Because this is a new technology, we have a mixture of engineers specializing in different fields. Some of them have worked with compression technologies a lot, others are recent graduates. And I wouldn’t say the first group has an advantage over the latter.” Such a broad combination of skill sets is one of the team’s assets. Given the fact that gas sales are surging at the moment, particularly in the United States, and that gas production is international, it is only logical to expect that OsComp will soon be expanding globally. “Gas is growing dramatically in the US and all over the globe, we surely benefit from this in my company,” says Pedro. Among his expansion plans is to enter the Middle East by the end of next year. Other future plans include going beyond natural gas, bringing the patented compressing technology to other industries.
NRG Magazine 9
ince November 2013, citizens and visitors of the Dutch city Nijmegen have been enjoying access to a new city ring road, the S 100, as well as the new bridge, Oversteek. Both of these new infrastructure developments are operated through Dynamic Traffic Management (DTM) - a technology that can adjust traffic lights, information panels, traffic mergers and other facilities based on the information collected about real-time road conditions, like traffic intensity and travel destinations. This data is collected through sensors.
DTM alone is a strong nod towards the reduction of noise and energy use on the roads - drivers accelerate less and do not have to brake so often as the traffic flow is optimized, which results in lower CO2 emissions. However, in 2014, Tvilight, a Dutch developer of intelligent street lighting solutions, gave the S 100 an even better technology overhaul. For the first time in the Netherlands, a city ring road will operate on a combination of DTM and sensor lighting. The core of Tvilight’s technology is a patented presence detecting solution that automatically adjusts the lights according to what happens around them. Now on the S 100, the street lamps light up when sensors detect an approaching object – this means that before a car even reaches the road, everything is illuminated.
Municipality of Nijmegen to monitor and understand the traffic better due to the fact that the system delivers an accurate and up-to-date information of the actual traffic conditions. However, movement detection is far from the system’s only advantage, as it offers an almost infinite pool of possibilities for integrating third-party applications. “Our system has an open platform,” comments Chintan, “At this point we are looking for partners in testing traffic rerouting applications.” Most probably, in the future the lighting system on the S 100 will be able to automatically assess road conditions and send necessary signals to traffic lights and information panels. “We could program the system to react in a certain way that once there is an accident, it can already see if the accident involved a car, a bicycle or a car. The rerouting applications will enable the system to shut down particular routes and notify the drivers, to name but a few of the possibilities,” Chintan explains.
“Why keep the lights burning when it’s not necessary?”
“Our system has been integrated into lights on over half of the total S 100 route,” says Chintan Shah, Tvilight’s founder and CEO. According to the developers, the drivers would not notice the difference – the lights are fully activated before the car enters their zone. The gradual illuminating effect can only be noticed when you look at the road from a bird’s eye view. When the road is empty of cars, bicycles or pedestrians, the lights on the S 100 fade to a dimly lit state.
“The road is never fully dark,” explains Chintan. “The minimum level of light is set at 20% of the full capacity. The maximum level was lowered to 70% after several drivers complained to the Municipality that at 100% of their capacity the road lamps appear too bright.” This is an example of how Tvilight’s management & control software allows city planners to cater to the wishes and needs of the road users. Tvilight enables the 10 NRG Magazine
Traffic management is a critical task for city municipalities, who struggle to lower the levels of road pollution while ensuring an adequate level of safety and comfort for the drivers. In this regard, integrating intelligent street lights becomes a favorable and necessary solution, allowing the energy bill to be slashed by up to 80% without compromising the safety of the city dwellers. Chintan concludes, “I believe this solution can be applied in all modern cities, big or small. It can deliver so much to the community and the environment. Why keep the lights burning when it’s not necessary?”
BATTERIES FROM SPACE
Space gets down to business
Business Incubator Centers (BIC)of the European Space Agency (ESA) facilitate the development of innovative young businesses in Europe. At the heart of the concept is the aim to transfer space technologies to other spheres of the economy. Two protégés of the ESA BIC in Noordwijk focus on creating cutting-edge batteries, borrowing some technology tricks from the space experts.
DIRK VAN GOGSWAARDT
THOMAS VAN DIJK
SOLID AS A ROCK
Co-Founder of M2 Power B.V.
While working in the electric transportation industry, Dirk saw that designing lithium battery applications was costly and there was no standardized implementation process. There was a clear need for a more affordable product, equally applicable in different industries. In 2009, he founded M2 Power in order to bring the standardized lithium iron phosphate battery to the market. He sought to supply both end-users and industries with a product both cost-effective and easy to use. In 2011 the last round of product development was successfully completed.
Founder at E-Stone Batteries
The idea of E-Stone batteries came to Thomas while working on his master thesis at TU Delft. “Energy storage from renewable sources is still the weakest link in the energy transition, and this is what inspired me to work on E-Stone Batteries,“ he recalls. How do we unlock the potential of wind and solar power, if there is no reliable storage?
“Our lithium batteries are lightweight and efficient. They also have a long life cycle and charge fast,” Dirk proudly shares. “We design them in a way that allows easy implementation for any customer.” ESA BIC Noordwijk supported the development, through sharing technology certified for space. According to Dirk, this is the secret to the efficiency and ease of use of M2 Power batteries.
The new ‘solid as a rock’ batteries might be the answer. They promise up to 10.000 charge cycles while being low-cost and non-toxic. E-stone batteries are based on an aqueous electrolyte and components that are low-cost and widely abundant. “Nickel and iron are the main ingredients and they are widely present in the adult infrastructure of the cities. That is why we are different from other producers, whose batteries are toxic and dependent on the mineral supply.” E-stones, on the other hand, can be buried in landfills, since they contain no hazardous materials. This makes a difference for ordinary people in the developing world who struggle with the hazards of lead-acid batteries.
Today, the company offers both standardized and custom-designed batteries, while also engaging in consulting activities and actual integration of its battery systems. The options for M2 Power batteries are broad, from off-grid and micro-grid applications to golf trolleys. According to Dirk, “Some usage examples are solar power for off-grid and micro-grid applications. We also service marine industry, the electric and hybrid boats of all size and a wide range of electric transportation means.”
In 2013, the University spin-off was accepted into the ESA BIC in Noordwijk, where it was provided with technical and management guidance, as well as financial support to get the business off the ground. Thomas concludes, “Battery developers normally need up to seven years to get their products to the market, it is a very time and capital intensive trajectory. Getting accepted helped extremely. We got the business perspective and the necessary network at the same time.” NRG Magazine 11
Q & A With Dr.Finance
“What is a healthy leverage for a company building energy infrastructure and how is this impacted by the project life-payback ratio?” Pedro Santos - Oscomp
sComp has a business proposition that looks very attractive and right on the spot: they promise to enable their US customers to use the abundant and therefore cheap shale gas straight away by means of a ‘virtual pipeline’, simply by trucking it to the customer. A real pipeline is no longer needed, because OsComp has developed a new technique to compress the natural gas and transport it safely via road. The attractiveness of the proposition depends on the price difference with other energy sources. OsComp states that the actual difference means that clients shall have earned back their investment ‘within months’. Even better - the clients keep their flexibility and can switch back relatively easy to their original energy source (when price difference changes the other way). From an investors point of view, this is not the typical infrastructure investment. These are characterized by long term investments, long term contracts, steady cash flows, high entry costs for new competitors and, if possible, - inflation linked. By contrast, virtual pipeline contracts are relatively short, and the market is easy to enter (there are already several regional competitors, but also big names like GE), and very much depending on the price difference that partly is a political issue.1 Leverage is about the financing structure of the company - how much is financed with equity and how much with debt? The higher the debt, the higher the leverage. Leverage is nice to have if the total return of the business is higher than what should be paid for debt. That makes the return on equity go up. However, if business goes down and the total return is lower than what should be paid for debt, high leverage could knock you down. So what is a ‘healthy’ leverage for the virtual pipeline business? One that, even with a downside scenario,
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takes into account new competitors, non-paying customers and declining price differences and keeps you out of trouble with banks and other financers.
Our financing expert, Gerard van Baar, answers your questions about the money side of business. If you have any questions for the next edition of the magazine, shoot us an e-mail at firstname.lastname@example.org.
In line with this it follows that the more stable your income and the shorter your payback time, the more leverage you can afford. Stable income, for example, could mean that your tariff is based on capacity and not usage. Meaning your clients effectively rent the truck based on planned needs and not actual usage (this is also how pipelines are priced - capacity payments with expensive charges if you use more than planned, but no kick-backs if you use less). The shorter the payback time, the better. Although you should think that if this is very short, it means that it won’t take long before even more new competitors step in. This reasoning of investors can drive business people mad. The solution is to prove your point - bring in a big creditworthy client with a long term contract who chooses you above all other competitors! Investors would call this a track record, they would love to see and analyze this. It all makes sense because at this point virtual becomes reality. 1. If the government allows more export of shale gas, the price will go up and the difference will go down.
Gerard van Baar Gerard van Baar is an independent financial consultant. His expertise is drawn from many previous positions, including his role as Managing Director Finance & Sustainability at the Holland Financial Center. In this position, he was involved in the plans for and discussions on the Green Investment Corporation. Mr. Van Baar also raised Deloitte’s European Energy & Commodity Risk Management practice.
The Future of Gas | David Carroll
A GLOBAL PERSPECTIVE ON THE FUTURE OF GAS What does the future of gas look like from a global perspective? Natural gas is an industry and a fuel with a proud history and a really exciting future. Frankly, for those of us who will be heading up the IGU next year, it’s just an honor and a privilege to serve this industry at this very exciting time. The future of natural gas is very bright. It is clean, affordable and abundant around the world, so it’s really well positioned to meet the growing demands of a rising global economy.
of unconventional and conventional gas reserves. It’s early in that process, but if you look a couple of decades down the road, what China is able to do with its natural gas reserves will have a big impact on its economy and on the global trade of natural gas. I wouldn’t sell Europe short, either. There is a nice diversity of supply of energy with renewables, nuclear, coal and natural gas – some of it produced within the EU and some imported. There is a great network of facilities, in terms of pipeline infrastructure and import/export terminals for LNG, which allows for a lot of options in Europe. I think it’s a matter of enhancing infrastructure and policies that promote the development of all the energy sources to meet citizen’s needs.
“We expect that natural gas will be playing a key role in enhancing the emissions reduction from our power plants.”
The other interesting thing about the gas industry from a global perspective is that it’s growing. There are new sources of gas and new players getting involved in natural gas. It's not just shale gas resources from North America, it’s new discoveries of conventional gas in the Eastern Mediterranean and new sources of gas in Eastern Africa. You’re seeing more countries getting involved both as producers and as consumers.
Gas is widely available around the world and I’d be hesitant to pick one particular area. Certainly in North America, we’ve had the great fortune of having an abundance of natural gas. Over the last decade, with the dramatic increase in shale gas resources, we have been able to reduce the cost of gas for our industries and our consumers, all the while reducing our greenhouse gas emissions by reducing coal dependency. Asia, China especially, has a huge thirst for energy. China has the potential to exploit natural gas with a vast amount
our US Environmental Protection Agency (the EPA) proposed a clean power plan that’s going to be placing limits on the amount of carbon that can be emitted by power plants. This plan proposes to cut our carbon pollution down 30% from 2005 levels. The plan is in the process of review and how it will be implemented will be determined on a state-by-state basis. Given that we’re going to have flexibility in meeting these targets, we expect that natural gas will be playing a key role in enhancing the emissions reduction of our power plants.
Do you believe natural gas will play a transitory role or will it be a foundation fuel? Maybe it’s both – depending on your time horizons. In the US, natural gas has served well as a bridge fuel to a cleaner energy future. As we integrate more and more renewables into our mix, natural gas is a great compliment to wind and solar. It can provide reliable and affordable electricity when the wind isn’t blowing or the sun isn’t shining. There has been a dramatic expansion of proven reserves and anticipated supply of natural gas around the world in recent years. Because of this, there is a greater confidence among many that gas can be a foundation fuel. In other words, gas could be a long-term part of the energy mix for a long time in the future. For example, in the US, just this past June,
David Carroll has served as president and CEO of Gas Technology Institute (GTI) since 2001. From 2015-2018 he will serve as the president of the International Gas Union (IGU) with hopes to advance the technical, economic and political progress of the global natural gas industry.
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In what part of the world does the future of gas seem the brightest?
We sat down with David Carroll, CEO of the Gas Technology Institute, to hear his insights on how the gas industry will change and develop in the coming years.
The Future of Gas | David Carroll
We all need to work together in ways that improve access to energy sources and reduce barriers to commercial trade. What role will R&D play in securing the future of gas? Technology has played an important role in helping the industry grow throughout its history and innovation will certainly remain critical to our progress. When you look at some of the challenges that the industry faces, some things I’d like to hear about at the International Gas Union Research Conference (IGRC) are answers to questions like how the environmental footprint of natural gas production, distribution, and use can be reduced. Another key technical challenge is how best to integrate gas and renewable energy technologies to the electricity grid, in a way that’s reliable and affordable. This is critical if you’re looking at quality-of-life matters for citizens around the world. We also need to be looking at what exciting new uses can increase demand, while at the same time saving the users (industry or consumers) money and reducing emissions. What technologies are being developed that might impact the future of gas? I think some ways to secure the future of gas focus on reducing the environmental footprint of natural gas production and use. It will be important to advance new tools and technologies such as microseismic data and analysis in a way that enhances the effectiveness and efficiency of natural gas production. So much of natural gas production, specifically in shale development, is still more of an art than a science. We’re still learning more about the reserves, how the geology is formed and how best to free up the maximum amount of gas with the minimum amount of environmental impact. By doing so, we can make natural gas more affordable to a broader range of people while being respectful of the environment. It’s about
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integrating gas and renewables to support a more reliable and affordable energy grid. Another area of great interest is how we use natural gas. Certainly here in the United States and in other areas as well, there’s a strong push to incorporate natural gas more into the transportation sector, whether that’s through trucks and busses or all the way to marine-type transportation using LNG. I think there’s a host of new technologies out there that will help promote greater adoption and penetration across all natural gas vehicle (NGV) markets, from engine development with Cummins Westport Inc., to new fueling systems, to onboard storage options using advanced matrix materials technology. It’s a very exciting area with a lot of activity. Do global cooperations have the potential to redefine our global energy system? Yes. I would hope that we continue to see great examples of cooperation like the Russia-China deal—where China signed an agreement to buy Russian natural gas sent through a pipeline in Siberia—and we’ve already seen a lot of these. If you look at it globally, technology has no borders and neither does pollution. We all need to work together in ways that improve access to energy sources and reduce barriers to commercial trade. I see opportunities for global cooperation in technology and knowledge sharing. IGRC is a primary example of industry technologists and innovators getting together and sharing best practices relating to technology. Standards are another great area for cooperation. We have unique energy, efficiency and safety standards around
the world that are different. Some are harmonized, but many are not and these can be barriers to commercial acceptance of natural gas. There’s a need to collaborate to ensure that we’re setting standards and policies that reflect a proper balance between economic realities, safety concerns, and environmental stewardship as well. I think there’s tremendous opportunity for cooperation with infrastructure development. The Russia-China deal—with Russia developing natural gas supplies in eastern Siberia while China develops transport and storage facilities within their borders to supply some 38 billion cubic meters of gas a year for the next 30 years—is a great example. We’re seeing this very much in the natural gas space in the LNG sector. There are many new LNG export facilities on the drawing board here in the US and the vast majority are owned or will be owned by partnerships of companies from around the world.
“If you look at it globally, technology has no borders and neither does pollution.”
The Future of Gas | Ulco Vermeulen
As the world searches for ways to cut down emissions and curb the detrimental effects of our past carelessness, gas may provide the perfect basis for an energy transition.
How were you introduced to the energy industry?
Managing Director Participations & Business Development and member of the Management Board of gas infrastructure company Gasunie. He plays a key role in the social debate on energy in The Netherlands. Ulco is the chairman of Green Gas Netherlands and he is nationally and internationally active in the debate on sustainability.
My first contact with the world of energy was through the Ministry of Economic Affairs, where I worked for the Energy Directorate. I then switched to the business sector and came to work for Gasunie, which is now a gas infrastructure company. Business on the one hand and social relevance on the other: those are our two main themes. Ultimately itâ€™s always about business-driven solutions with a long-term social relevance. What does the future of gas from a global perspective look like to you? Eventually, everything revolves around a growing world population that is entitled to have access to sufficient reliable and affordable energy economy and prosperity that can be sustained by our planet. Our societies demand new, clean forms of energy and show an interest in decentralized modes of power generation, changing the role of traditional sources. Gas and gas infrastructure can play a special role in this scenario. This requires both technical and social innovation. As the cleanest fossil fuel, natural gas currently has enormous potential for achieving CO2 objectives, though we must
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look at the bigger picture and also direct our attention towards renewable variants such as green gas and hydrogen gas. The emergence of LNG has enhanced the globalisation of the gas market. LNG is now finding its way to markets that are able and willing to pay the highest prices, such as Asia. But having the infrastructure in place, LNG is always available as an alternative to pipeline gas, also for Europe. This availability puts a limit to the price level of pipeline gas. The presence of both supply modalities has a stabilizing effect. If you look at the developments in liquefaction planned for the near future, it is reasonable to assume that supply/demand relationships will look quite different in a few years time. Global natural gas reserves are very large, both conventional and shale gas. We see now that shale gas developments in the US affect geopolitical relations, but also the situation on the European gas market. The coal that is being pushed out of the American market is now seeking an outlet in European power plants, thereby displacing much cleaner natural gas. We would expect this to be a temporary distortion, because at some point people will acknowledge the huge potential of gas for cutting back CO2 emissions. Recent studies have shown clearly that, by using
The Future of Gas | Ulco Vermeulen
Itâ€™s always about business-driven solutions with a long-term social relevance. gas as the basis for the energy transition, EU emission targets for 2030 can be achieved at a much lower cost than we are currently experiencing. What ambitions does Gasunie have to secure the future of gas?
This year we have set up a new business unit, Gasunie New Energy, which enters into partnerships to look into the feasibility of sustainable technologies for largescale application. You have to combine different energy forms with each other to arrive at sustainable energy concepts that are reliable and financially viable for consumers and society. This requires new business models. For example, in the Northern Netherlands we are working with others to set up a major power-to-
What initiatives is Gasunie undertaking to contribute towards Europe's carbon emission reduction targets and a cleaner world? Gas can make an huge contribution by replacing coal, gasoil and fuel oil. Together with our Gate partner Vopak, we are currently investing in "break bulk" infrastructure at Rotterdam. This makes the distribution of LNG (as an alternative transport fuel with lower emissions) possible for ships and trucks . By using LNG as a fuel, inland vessels, coasters, ferries and also HGVs can reduce their CO2 emissions by 20%, and their NOX emissions by a maximum of 85%. Emissions of sulphur and particulates are reduced practically to zero. Hence this development has the full backing of the Dutch government and the European Union.
Which new technologies will receive the greatest investment, do you think? Huge developments are still ongoing on the production side. Investment in new technologies is certain to be made to develop gas reserves on difficult areas in an efficient and responsible manner. And now that it is becoming increasingly obvious that gas infrastructure, also in a sustainable context, has great potential as a storage and transport medium, investments into the conversion of renewables such as sun and wind into gas form will gain importance. What are you hoping to gain/learn from the IGRC? That we recognize that we must, all together, as representatives of the entire energy system, make a collective leap. That we are able to put our different activities in a context of connectivity. Climate-neutral energy production targets are often linked to the year 2050. Is that far away? Yes and no, for as soon as society recognises that there is a problem, it immediately demands solutions. So, our society will determine how quickly '2050' will become a reality. The â€˜business sideâ€™ must remain vigilant in order to be able to respond when the moment is there. NRG Magazine 19
Gas infrastructure companies like Gasunie hold a special position. They facilitate business operations on a daily basis, but they are also looking far ahead through their long-term investment horizon. Energy transition is almost by nature a major theme in the vision of energy infrastructure companies. In the context of the free market infrastructure, companies can provide a balance between the short-term horizons of businesses on the one hand and society seeking to tackle long term issues on the other hand.
gas installation, converting sustainable energy into gas to store it for later use. Smart conversion solutions make gas infrastructure, processing gas of both fossil or green nature, a tremendous asset in the energy transition.
The Futurenaam of Gas || Naam Etienne bedrijf Romsom Rubriek
Getting MORE outout ooff GAS
Sustainability remains Sustainability remains one of the hottest topics one of the hottest topics within the gas industry. within theRomsom, gas industry. Etienne Chief Etienne Romsom, Chief Business Development Business Development Officer at DNV GL Oil & Officer at DNV GL Oil &his Gas division, shares Gas division, his thoughts onshares ways to thoughts ongas ways to make make the sector both the gassustainable sector both more more and sustainable efficient. and efficient. “To “Tothink thinkofofgas gas and and sustainability, sustainability, wewemust mustthink thinkofofall allthe thethings things that that need needtotobe bechanged changedtotoimprove improve the theoverall overallperformance performanceof ofthe the industry,” DNV industry,”starts startsEtienne. Etienne. “At DNV GL GLwe weadvocate advocatefor forthe therole roleof of gas gas asasa atransition transitionfuel fueltotoaalow-carbon low-carbon economy, economy,but butthis thiswon’t won’thappen happen in in one onestep.” step.” The Thelatest latestreport reportfrom fromDNV DNVGL, GL, A ASafe Safeand andSustainable Sustainable Future, highlights highlightsthe theoil oiland andgas gasindustry industry asasa amajor majordilemma dilemmaofofthe the21st 21st century, century,given giventhat thatthe theworld’s world’s growing growingpopulation populationwill willneed need 50% 50% more moreenergy energytotomeet meetthe thedemand demand byby2050 2050while whilerestraining restrainingcarbon carbon emissions. emissions.InInthis thisregard, regard,gas gas is is the the“best “bestbridging bridgingfuel fueltowards towards aa low-carbon However,the the low-carbonworld.” world.”11 However, efficiency of the efficiency of thegas gasmarket marketneeds needs totoincrease increasesignificantly, significantly,and and there there are areplenty plentyofofopportunities opportunitiesto to do do so. so.
Romsom Etienne Romsom Chief Business Development Chief Business Development Officer atatDNV GL Officer DNV-GL 20 28 NRG Magazine
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“IGRC2014 is an ideal platformisfor “IGRC2014 ana reallyplatform good technical ideal for a debate. Through really good technical engagement, we can debate. Through make sure that the engagement, we can industry is aware of make sure that the current opportunities industry is awareitof and challenges is and how currentfacing, opportunities DNV GL is and challenges it is contributing to facing, and how DNV meeting those.” GL is contributing in
emissions could be curbed by up to 7 million tons per year.1 Even tomore 7 million tons perby year. 1 Even can be done optimizing more can be done like by optimizing gas infrastructure pipelines gas like pipelines andinfrastructure terminals. and terminals.
“Another element that we need to “Another elementinthat need isto further increase the we industry further increase in the industry transparency and collaboration,”is transparency and states Etienne. “Tocollaboration,” address states Etienne. “Toaccidents, address to the risk of major the risk oftomajor accidents, to respond increasing demands respond to increasing demands from regulators and to counter from regulators to counter increasing cost and pressures, the increasing cost pressures, industry realizes that thingsthe need industry realizes that things need to be done differently, particularly toinbe done differently, particularly terms of collaborating with ineach terms of collaborating with other. ” Companies across each other.”are Companies across the sector investing heavily the sector are investing heavily in technology development and inbetter technology development and solutions, but their efforts better solutions, but their efforts remain mostly independent from remain mostly independent from each other, although developing each other, although developing jointly would have brought different jointly would have brought different results. results. In addition to collaboration, greater Invalue addition to attached collaboration, is now to the skills greater value is nowofattached and competencies the workers. to“The the skills and oil and gascompetencies sector needs oftothe workers. “The oil and gas attract the best global human sector needs to attract the best talent to work for and with them, global talent to work for as the human sector gets more complex and with them, as the sector and needs smarter people togets more complex and needs smarter develop the solutions, ” argues people to develop the solutions,” Etienne. In the long run, access to argues the long run, a skillful Etienne. people isInlikely to become access to skillful people is likely stronger competitive differentiator tothan become a stronger competitive possession and protection of differentiator than possession and intellectual property. Demonstration protection of intellectual property. of performance and transparency Demonstration of performance and in doing so, again through transparency again collaboration,inisdoing going so, to be even through collaboration, going more critical to gainingisthe trust of tothe bepublic, even more critical to gainand regulators, partners the trust of the public, regulators, employees. partners and employees.
The Future naam of Gas ||Etienne Rubriek Naam Romsom bedrijf
Maturity of shale developments according to multiple criteria
Overall Evaluation P
South Africa P
Technology and Infrastructure
Immature Some gap - under development Advanced - in place
Policy Regulations / Public Opinion
According to Etienne, in the medium to long term, shale developments could be expected in countries other than the United States.
Saudi Arabia T
Where toto Invest Where Invest
more efficient ways to drill the wells." According to Etienne, many wonder whether thetoAmerican path could According Etienne, many wonder get replicated elsewhere. In could any get whether the American path case, attempts to do so call for more replicated elsewhere. In any case, attempts sustainable practices in the sector, to do so call for more sustainable practices where there iswhere muchthere debate with debate in the sector, is much regard to environmental effects of of with regard to environmental effects shale extraction. “There is a lot of shale extraction. “There is a lot of concern concern about hydraulic fracturing, about hydraulic fracturing, ” explains” explains “due Etienne, “due tolike aspects like Etienne, to aspects contamination contamination by fractures, fugitive by fracturing, fugitive emissions, usage emissions, usage of chemicals andthe water of chemicals and water waste, but waste, but the industry is continuously industry is continuously improving itself improving itself andbecome the processes and the processes more efficient.” become more efficient.”
Risk Management of Shale Gas Developments and Operations, a document  recently issued Risk Management of Shale Gasby DNV GL, is a quick-time response Developments and Operations, a to one of the 2 major trends of the document recently issued by DNV industry. “We are arguing the to fact GL, is a quick-time response one of that with enough knowledge and the major trends of the industry. “We safeguards, extraction ofenough shale is are arguing safe the fact that with possible, ” states Etienne. knowledge and safeguards, safe extraction of shale is possible,” states Criteria Etienne. identified by the company run a broad gamut, from managing health and safety issues Criteria identified by therelated company run to shale gas fields, to managing stakeholder a broad gamut, from health communication and public and safety issues related to shale gas engagement. It is an analysis of key fields, to stakeholder communication indices for shale gas projects to analysis and public engagement. It is an be developed across the globe. It to of key indices for shale gas projects can be seen as a map by looking be developed across the globe. It can at countries canlooking see how bewhich seen as a map by at far which they standcan in meeting criteria: countries see howthose far they stand in “the discussion about shale meeting those criteria. “Theshould discussion be based on rational arguments about shale should be based on and rational with local context taken into play,” taken arguments and with local context concludes the expert.the expert. into play,” concludes 1. www.dnvgl.com/oilandgasfuture 1. www.dnvgl.com/oilandgasfuture 2. http://www.dnv.com/industry/oil_gas/services_ 2. http://www.dnv.com/industry/oil_gas/services_and_ and_solutions/technical_advisory/process_integrity/ solutions/technical_advisory/process_integrity/gas_ gas_consulting/shale_gas/ consulting/shale_gas/
In 2013, majority of 116,000 miles In 2013, thethe majority of 116,000 miles of pipelines under construction were of pipelines under construction were located in North America (36%) located in North America (36%) andand Pacific (29%); Eastern Europe AsiaAsia Pacific (29%); Eastern Europe and andaccount Russia account 9%, while Russia for 9%, for while Western Western Europe 2%. contributes 2%. Of Europe contributes Of the US$38 the global US$38 expenditure, billion globalUS$25 expenditure, billion bln waspipelines. spent on gas pipelines. wasUS$25 spent bln on gas In Europe, Europe, the desire to create greater theIn desire to create greater energy energy security through supply security through supply diversification andnetwork greater integration regional anddiversification greater regional network integration is set drive is set to drive investment in ato number investment a number of regional of regional andintrans-regional projects.and trans-regional projects. New regulatory New regulatory norms on pipelines norms pipelines safetyhuge and safety andon security mandate security mandate huge management investments investments for integrated for integratedand management of maintenance inspection of existing maintenance inspection of existing pipeline systems.and In Europe, related pipeline systems.toInincrease Europe,to related costs are estimated 20% of are estimated to increase 20% totalcosts pipeline investments over the to next of total pipeline investments over the decade. next decade. Investments in increased efficiency will Investments in increased efficiency reduce waste and make the gas sector will reduce waste and make the gas sector more competitive against competing more competitive against competing fuels, in particular coal. Investment fuels, inflexibility particular coal. in market and theInvestment ability to in market andresilience the ability to optimize gas flexibility flows create optimize gas flows createand resilience against technical, economic political against technical, economic and upsets. political upsets. NRG Magazine 21 29
GLOBAL GAS GLOBAL GAS
On top of it all, advanced technologies continue to be significant to the sector, safer and smarter On top unlocking of it all, advanced technologies solutions for gas extractions andsector, continue to be significant to the transportation. drillingsolutions and unlocking safer“Better and smarter hydraulic fracturing technologies have for gas extractions and transportation. brought a new economic resource “Better drilling and hydraulic fracturing base within the gasbrought field,” comments technologies have a new Etienne. “Aresource combination technology economic baseof within the gas and new ways of working field, ” comments Etienne. always "A combination create breakthroughs. example, of technology and newFor ways of working the American shale gas sector was always creates breakthroughs. For revolutionized by both technology and example, the American shale gas sector more efficient ways to drill the wells. ’’ and was revolutionized by both technology
The Future of Gas | USA
Natural Gas THE AMERICAN STORY Mark Brownstein, Associate Vice President & Chief Counsel at the US Climate and Energy Program, offers his expert knowledge on the future of gas from an American perspective.
he United States (US) is known as the land of opportunity. “There’s a huge entrepreneurial spirit in the US and very low barriers to enter our oil and gas industry. There’s no question that the combination between the entrepreneurial tradition in the US and the legal structure of private property rights have combined to create an engine of innovation that doesn’t exist in a lot of other parts of the world,” shares Mark.
would seem that we have an abundance of supply and the ability to access it,” says Mark. However, the issue remains that the general public questions whether or not natural gas should continue to be exploited. “I think the burden of proof is on the industry to demonstrate that gas can be produced with minimal risk to public health and the environment and that the issue of methane emissions is going to be dealt with,” Mark suggests.
The potential of technology within the natural gas industry is no longer a secret in the US, and what’s needed is to apply the entrepreneurial spirit in other facets of the business. “The fact that a relatively small producer can go out, acquire the capital to experiment and then try, fail, try, fail and then ultimately succeed, is a uniquely American story. That same entrepreneurial spirit and desire for innovation now needs to be applied to strategies to minimize the very real risk to public health and the environment that producing gas presents,” comments Mark.
DESTINATION OR TRANSITORY FUEL?
At this stage, Mark believes that the future of natural gas is uncertain due to public concern over how gas is being produced and the impact of increased gas use on the climate. However, there’s no question that the revolution in production techniques has made it possible to access resources in the US that were previously inaccessible. “It 22 NRG Magazine
As Mark explains, natural gas will play a supporting role on the road to a lower carbon future. This road, as he describes, ultimately deals with moving away from a dependence on fossil fuels to generate electricity, heat our homes and power our vehicles. “It’s an open question as to how that transition will take place and there’s a lively debate in the US on how that will happen – but there’s no question that we will be moving away from fossil fuels over time,” says Mark. Natural gas will still be prevalently used in the short term, and there are important benefits that it can offer as natural gas is certainly cleaner than coal and will help integrate renewables throughout the transition.
A SUSTAINABLE FUTURE Shale gas has seen exceptional growth in the US and the industry, thanks to the country’s entrepreneurial spirit. Through research and development, shale resources can now be easily accessed and entrepreneurialism has been used as a tool to achieve market success. However, there are still a few challenges to tackle in order to ensure that shale can continue being explored without causing serious harm to the environment and natural gas in general. “We need to get a handle on methane emissions, not only because it’s a fundamental waste of a product, but because it’s a powerful greenhouse pollutant that’s accelerating the rate of warming in the short term,” says Mark. Waste water management is another big priority, given the effects that this process can have on public health and the environment if handled improperly. It is typical in the US to dispose of waste water through federally-regulated deep injection wells, but the industry is starting to move away from this option for a variety of reasons, including a lack of suitable sites in some parts of the country and costs. As a result, companies are beginning to look at waste water treatment and discharge to surface water, but the environmental consequences of this option are not well understood and the risks to water quality and public health could be significant.
The Future of Gas | USA
Last is the challenge surrounding the issue of how natural gas fits into the overarching strategy of a move towards a decarbonized energy system. This includes ensuring that gas-fired power plants work well in tandem with renewables to continue to research carbon capture and storage. “We need more nations to follow the example of the European Union, and actually put a price on carbon,” says Mark.
Mark identifies entrepreneurialism, dynamism and the capacity to innovate as America’s key strengths. “Our weakness is that we are allowing production to get ahead of sensible safe guards to public health and the environment,” he comments. Moving forward, the US should learn about how to think more systematically about energy. Something that should be emulated is the price on carbon and pursuing energy and energy efficiency policies more aggressively. According to Mark, the future belongs to energy efficiency and renewables and it is crucial that these strategies are kept within country portfolios. “Investments should be made in those technologies that are capable of doing a better job of monitoring methane and other pollutants, technologies that are capable of reducing and eliminating those emissions, technologies that can accurately characterize the content of waste water and technologies that can fully and cost effectively treat waste water are going to be very important to the industry going forward,” concludes Mark.
As a prediction, and a natural next step, the US should begin collaborating with Canada and Mexico. The three countries already have an integrated energy market and share many of the same physical characteristics, in terms of geology. “The three countries have a lot to gain from working together, not only to address the risk to public health and the environment from unconventional resources that exist in all three countries, but as well, the possibility that those three countries working together can significantly reduce methane emissions,” comments Mark. As it stands, Russia is currently the largest emitter of methane from oil and gas in the world, but the US, Canada and Mexico combined produce emissions that exceed Russia’s.
NRG Magazine 23
The Future of Gas | Canada
THE LAND OF PLENTY Canada's Energy Wealth
Mel Ydreos, Executive Director of Energy Vantage shares his opinion on Canada’s potential and role in the global energy marketplace. There’s much more to the country than maple syrup and ice hockey. Have a look!
Executive Director of Energy Vantage
24 NRG Magazine
he future of gas in Canada holds a combination of prime opportunities and key challenges. From an export perspective, Canada has always had one captive customer – the USA. However, due to the shale gas revolution and the tremendous growth in the production of gas (and particularly shale gas) within the US, there is less dependency on Canadian exports. “The US has literally become selfsufficient,” says Mel. In response, Canada’s market has been making a push towards
The Future of Gas | Canada
LNG and exporting it to other markets, predominantly Asia-Pacific. This is where the greatest opportunity lies but there is also much potential in the creation of higher demand for natural gas. This potential exists domestically, for power generation in transportation, serving rural and remote communities and end user applications - particularly small scale heat and power applications. “Even if we’re successful in creating more domestic demand, we still need export markets. As such, the focus is on LNG exports,” continues Mel.
Greenfield3 – from the development of natural gas resources, to the building of pipelines to get the gas to the terminals, to the actual building of terminals and the transportation of fuel to the market,” explains Mel. Due to the fact that all major projects in Canada are Greenfield, the costs will be such that they will need to be supported by international pricing and it seems as though the Asian market does just that. Nonetheless, Canadian suppliers must act quickly.
Some of us may have forgotten how significant natural gas is to a variety of different industries. “Natural gas is very important for the production of fertilizers, which help feed the world. It’s also very important in the production of liquids – many of which are used in hospitals. Because the focus has been around generating electricity, one of the risks we’re running is that we forget how flexible natural gas is and the value it brings to the world through its ability to act as a feedstock fuel and not just as a power generating fuel,” exemplifies Mel.
Did you know that the province of Ontario has completely phased out coal plants? It is the most significant carbon reduction initiative in North America, according to Mel. Coal plants have mostly been replaced by natural gas combined cycle plants4 as well as several refurbished nuclear units. The initiative also paves the way for more renewable energy. The current long-term energy plan calls for the deployment of some 10 000 MW of electricity generation through renewables in Ontario – wind and solar, combined. “It’s a fairly large commitment but the issue that Ontario faces as resources come online is a price implication,” states Mel.
Why Asia is a key market for Canada and perhaps not as critical to the US lies in matching price points. The difference between Canadian LNG and US LNG is that US LNG is the only in the world that will be based on domestic pricing (the Henry Hub1 price). The reason being is that US LNG already has the infrastructure but there are existing plants that must be reconfigured to become export terminals as opposed to import plants. “They are Brownfield2 sites that will be converted. In Canada, the new large plants are
Deploying renewables at high speeds results in the cost curve moving up fairly quickly as well. “The issue of affordability, subsidies and industrial competitiveness then becomes quite an important issue. There is a need to balance the pace of transition such that affordability and industrial competitiveness can be better managed,” says Mel. This is happening in the province of British Columbia as they are adopting the renewable market and Alberta is moving towards the adoption of renewables as well. “In the long run, we need to embrace and support renewables in the energy mix. Natural gas enables the development of renewables by supporting their intermittent nature in power generation,” shares Mel.
1. www.investopedia.com/terms/h/henry_hub.asp 2. www.merriam-webster.com/dictionary/brownfield 3. www.merriam-webster.com/dictionary/greenfield 4. www.netl.doe.gov/KMD/cds/disk50/NGCC%20 Plant%20Case_FClass_051607.pdf
Henry Hub Pipeline
The Henry Hub pipeline is the pricing point for natural gas futures on the New York Mercantile Exchange. The NYMEX contract for deliveries at Henry Hub began trading in 1990 and are deliverable 18 months in the future. The settlement prices at the Henry Hub are used as benchmarks for the entire North American natural gas market.1
A Brownfield site is a tract of land that has been developed for industrial purposes, polluted, and then abandoned.2
A Greenfield site is land (as a potential industrial site) not previously developed or polluted. 3
Where to Invest
Recently, the Canadian Gas Association has announced a partnership with the National Research Council on R&D to increase the efficiency of fuel and reduce emissions, increase its ability to interact with Microsystems and to further develop smart energy systems. Mel suggests that there is a lot of innovations and applications on the end user side that can be developed to ensure that gas remains a very important part of the fuel mix. In order to mitigate the environmental footprint, R&D should be focused on the upstream side and the extraction processes, transmission and transportation of fuel.
NRG Magazine 25
The Russia-China deal also carries some implications for the Canadian LNG market. The Asian market, which will receive natural gas from Russia in 2018, will have less need for Canadian LNG. This has increased competition for Canada in terms of pricing and suppliers. “The biggest signal the deal should send to policy makers in Canada is that decisions around these investments need to be made and approval processes need to be streamlined, such that if we want to enter these markets, we need to do so quickly. The longer we wait, the longer the approvals and the greater risk exists that some of these markets will be satisfied either by other LNG providers or by pipeline gas,” says Mel.
RENEWABLES IN CANADA
The Future of Gas | Russia - China Gas Deal
THE POWER of Siberia Discussion about potential gas exports from Russia to China first started back in 1990s, however it is only in 2014 that the $400 billion deal was finalized between Gazprom and CNPC. What will It bring to the rest of the world?
ussia’s strategic expansion eastward was first officially declared in the Energy Strategy of the Russian Federation by 2030, adopted in 2009. The document clearly articulated the country’s aspiration to increase its presence in the Asian oil & gas market. In line with this, the China deal is a pivotal development with several important implications for other regional and global players. To the West, it signaled the fact that Russia is really diversifying its markets. “Although we are dependent on Western exports, we found an alternative destination which gives us an opportunity to lessen our dependence,” explains Tatiana, ”These priorities were established before the Ukrainian crisis and are a logical development given the resources locked in the Eastern parts of Russia.” But this diversification does not mean any refuse from the European gas export destination. Given the current Europeanoriented gas infrastructure and the fact that Russia is not interested in losing its well-established European market, there is no reason to worry about the decrease of Russian gas supplies to the West. “The only threat I can foresee is geopolitics - European desire to lessen dependence on the Russian supplies and problems associated with transiting the gas through Ukraine. It becomes more challenging, and I am afraid that the crisis in Ukraine is not a short-term issue,” remarks Tatiana. The deal implicates a lot to the competing gas suppliers. The approximate price of $10 per million British thermal units (mmBtu) at which the gas will be piped to China will become an important 26 NRG Magazine
component in gas price formation in Asia, where the current average price is $14-16 per mmBtu. Any further talks would have to take a new price into account, and Russia is clearly showing that it is by far not the most expensive supplier, being able to make a competitive offer. “The Chinese will certainly refer to this price when negotiating for any other foreign gas, be it Australian LNG, US and Canadian LNG or fuel from East Africa,” comments Tatiana.
Although we are dependent on Western exports, we found an alternative destination which gives us an opportunity to lessen our dependence. This is also a message to China itself. By strongly promoting the deal, Russia has demonstrated a readiness to line up with China both economically and politically. ‘’There was a considerable gap between the price expectations of Russia and China, and it took 10 years of negotiations to narrow it to the mutually acceptable level. The real change in the mindset happened in 2013-2014, when it became absolutely clear to the Russian leadership, that the European hydrocarbon demand is not going to recover, and that for geopolitical reasons Europe is targeting to decrease dependence on Russian energy supplies,” explains Tatiana. Furthermore, Russia would have to develop new energy projects in the situation of sanctions, with
Head of Oil and Gas Department at Energy Research Institute of the Russian Academy of Science
very limited access to the international finances and technologies. In these circumstances, countries of the North-East Asia , especially China, became much more important and desirable partners. The Russia-China gas deal marks a new stage of Russian energy cooperation with the Asian consumers. Moreover, after several problems with payments through the US banks, Russia is now promoting switching to rubles and RMB payments, which could mark a new stage in the whole Asian energy trade development. “Simple calculations give us a price of $370-90 per thousand cubic meters, which is nearly the same price that we get for European gas export,” says Tatiana, “With this final price, the project would not bring us loss, but it is not a revenuemaking machine either, and nor are the highly marginal supplies to the European market. Nevertheless, strategic importance of the deal in the longer term should compensate for lower IRR of the project – in fact, first Soviet pipelines to Europe were not profitable at all, but after 30-40 years they became real “cash cows” for the Russian economy.” With the deal finalized, Russia can focus on the rest of the Asian states, particularly on the premium markets of Japan and South Korea. A number of its current projects, e.g. the operational Sakhalin-2, Yamal LNG, Vladivostok LNG and Sakhalin-1, are already targeting these countries. Tatiana concludes, “There is discussion about extending the Chinese pipeline gas supplies towards South Korea through Bohai bay. Japan demonstrates great interest in the pipeline supplies from the Russian Far East.”
The Future of Gas | Russia - China Gas Deal
THE POWER OF SIBERIA With the first delivery scheduled for 2020, Russia’s challenge is to finish the pipeline in a course of five years. However, given that recent huge Russian pipeline projects (e.g. the North Stream or Sakhalin-Khabarovsk– Vladivostok) were finished on schedule, the Power of Siberia is also expected to start operating on time. A powerful infrastructure would be created from scratch, in Eastern Siberia, an environment nearly untouched by man. From there, the new pipeline will cross the Chinese border. Extensive supporting infrastructure (e.g. living facilities, roads, railroads) need to be brought to the middle of the continent. New sophisticated gas fields will need to be developed and new gas processing capacities will need to be introduced. Unlike in Western Siberia, where extracted gas is pure methane, the gas from Eastern parts of the region has much more complex content. Plus, the region is seismic, calling for additional measures on making the gas pipes resilient to the effects of earthquake shocks. The projected costs of the pipeline is estimated at $40 billion, out of which $25 billion will be provided as a down payment from the Chinese side. The project also envisages construction of the gas processing complex in Amur region, which will process the multi-component gas with a considerable amount of helium fed from the Chayandinskoye field. Its CAPEX is estimated at $17 bln.
Executive Vice Chairman of the China Institute for Innovation and Development Strategy, member of the Foreign Policy Advisory Committee of the Chinese Foreign Ministry.
“China needs resources. We need gas to improve our Economy. Right now the part of gas is too small in the Chinese energy mix, but we are trying to raise that percentage. It would help us improve the environment and fight smog,” comments Ambassador Wu. The plans to increase the natural gas consumption account for the continuous efforts to secure the national gas imports
through cooperating with the outside world. According to Ambassador Wu, energy sources that can be offered by Russia are a particularly good match to the Chinese needs. “We have plenty of possible suppliers except from Russia, like Australia, Malaysia and other Asian countries, because the region is very rich with gas,” explains Ambassador Wu, “However, there is inner complementarity between the economies of Russia and China.’’ Not being able to tame the energy need with its domestic suppliers, it is only natural that China turns to its nextdoor neighbors, because geographic proximity makes the actual gas transportation less complicated. China started importing gas for the first time in 2007. Since then, gas imports
It, however, does provide a ground for discussion with regard to the future cooperation between Russia and China, and the possible forms it might take. In fact, the next step of the Russia-China energy cooperation might be signing similar agreements on oil supplies. “The oil we are currently importing comes from Middle East, which is politically very instable. We want to diversify the oil imports, and Russia might be part of this diversification strategy,” he concludes. NRG Magazine 27
RUSSIA & CHINA
espite the fact that coal preserves a major share in the total energy consumption of China (accounting for the 70% of the total energy mix), the country is actively seeking to diversify its energy supplies, and gas plays an important role in these diversification plans. The latter include increasing the consumption of gas from current 5% to 8% by 2025.
have only been on the increase, with predicted levels of import to hit the mark of 7.8 trillion cubic feet (approximately 2.3 billion cubic meters) in 2020. 1 According to Ambassador Wu, the biggest gas importers to China in 2012 were Turkmenistan, Qatar, Australia, Indonesia and Malaysia, altogether accounting for the 93.5% of the overall imported gas to the country. Signing the deal with Russia will not shake the dominance of the Asian gas on the Chinese market. He comments, “The gas we will be importing from Russia represents less than 20% of our demand. The deal does not affect our relations with any of the other supplying countries.”
The Future of Gas | IGRC2014
IGRC2014 What to expect at
COPENHAGEN At IGRC2014, technology and business leaders from across all areas are coming together to discuss the future of gas. As the official media partner of the conference, NRG Magazine gives you the inside scoop on what to expect.
Etienne Rom Ulco Vermeulen
Peter I. Hinstrup
IGRC2014 Conference Director
Senior V.P. of E.ON, Germany
OPENING PLENARY WEDNESDAY, SEPTEMBER 17, 9:00-10:30
PLENARY T THURSDAY, SEPTEMBER 18, 9:00-10:30
How innovations change the gas market.
What is the business case for R&D?
Technology will play a crucial role in the future gas industry to maintain and strengthen the role of gas. As a result of several drivers influencing the market (market integrations, growth of the share of renewables, climate change concerns, security of supply issues and rapidly changing policy and regulations), gas markets are becoming more dynamic, complex and competitive. Globally, the energy sector is going through a fundamental regime change. Development of new gas-related technologies to improve the operational excellence, safety and reliability can optimize the business model for gas. At the IGRC2014, we will discuss the challenges that the gas industry is facing and the impact of research, development and technology to provide solutions suitable for its current and upcoming challenges. During the panel sessions you will learn how to optimize your technology strategy to ensure your gas infrastructure (business model) is ready in time for the low carbon future.
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Research and development built the foundation of a steady growth of the rate of utilization of natural gas. Many examples can be found along the entire value chain. But will this trend go on? Will the latest concepts in gas production (shale gas as well as biogas and power-to-gas) lead to sustainable solutions? Will smart gas grids, fuel cells and mobility be based on NG, CNG or LNG? In which areas can customersâ€™ acceptance and market growth be expected and is industry willing to finance the development phase? What is the role of R&D organizations in this context? Is it better to achieve a high level of specialization or gain systemic competencies? Is the natural gas industry still an attractive playing field for researchers or do other spheres of activity provide more auspicious prospects? This plenary offers a platform for this discussion and provides answers from the perspectives of the industry and the academic world.
The Future of Gas | IGRC2014
Peder Ø. Andreasen
Rasmus Helveg Petersen Brad Douville
Gerald Linke Nobuo Tanaka Mark S. Brownstein
Michael Weinhold Alexander Johannes Huurdeman
Vice President of Chesapeake Utilities Corporation, USA
CEO, of GDF Suez Research and Innovation, France
CLOSING PLENARY FRIDAY, SEPTEMBER 19, 12:30-13:30
What could be the important technology game-changers?
Important messages from the world of gas technology
Game-changing technology developments, such as the LNG supply chain in the 1960’s, and more recently unconventional gas production, drove dramatic advances in the gas industry. Technology game-changers may answer three challenges France identified for the IGU triennium: gas industry sustainability, integration of gas with renewables, and energy for all. This session will provide insights from inside and outside our industry. Sustainability requires balancing environmental and economic constraints in order to ensure a social license to operate while maintaining financial performance.
Natural gas is destined to play an increasing role in the future global energy mix. Existing gas use will be made more efficient and gas will spread to new application areas and new regions of the world. Natural gas will help eradicating the energy powerty. And gas systems will worldwide curb the emission of greenhouse gases.
The Environmental Defense Fund has been challenging and collaborating with industry to promote new solutions. Integration of gas and renewables is critical to both energy options. Japan’s progress in development of a “Smart Energy Society” highlights energy systems with broad benefits. Energy for all is a key issue for the developing world. New gas production in regions with no gas infrastructure presents an opportunity to expand access to gas. The World Bank is supporting natural gas projects as part of its mission to end poverty and promote shared prosperity.
In this closing session we will review the most important results and make visions for the future of gas technology. And very importantly: we will get to know who will be the winners of the IGRC2014 awards. Finally we will be invited to IGRC2017 in Brazil.
Technology will be essential in achieving these goals and technology will be the key to the future business model for gas growth. At IGRC2014 we have endeavoured to map out the technology future together.
Following introductory remarks, we will challenge the speakers and the conference delegates to explore innovative approaches that “break the rules” in order to resolve these complex problems. NRG Magazine 29
IGRC PLENARY SESSIONS
PLENARY F FRIDAY, SEPTEMBER 19, 9:00-10:30
Innovation Open House | Shell
SHELL INNOVATION OPEN HOUSE Open Innovation and
Unexpected Partnerships at Shell Technology Centre Amsterdam
his year, Shell celebrates a century of research and development. To mark the occasion, Shell Technology Centre Amsterdam welcomed speakers and exhibitors from a range of different industries to the Innovation Open House. Open innovation, cross-sector cooperation, and the art of partnership became the leitmotif of the day. Academia, topnotch corporate representatives and entrepreneurs shared their views on the role of innovation in modern business, and the benefits of harnessing its full potential. Gerald Schotman, Chief Technology Officer of Shell, noted during his opening speech that “collaboration is a powerful proposition,” and in The Netherlands, a lot of its potential remains untapped. The Dutch are talented integrators, however, so the country might soon become an open innovation champion. Jan van der Tempel (Ampelmann) and Chris Mooiweer (YES!Delft) shared the success story of Ampelmann, a company specializing in offshore access systems. Ampelmann themselves used open innovation when they applied technology from flight simulators to the problem of offshore access. The introductory presentation on How Big Companies
Shell's History of Innovation1
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Handle Open Innovation, delivered by Oliver Gassmann, Professor of Technology and Innovation Management at University of St. Gallen, laid a theoretical foundation for the day’s discussion. According to the Professor, 90% of all business models currently adopted by companies across the globe are simply recombinations of 55 basic existing business-models. Companies “engineer” their own models using these basic elements, in order to best suit their purposes. “Mindset is the biggest obstacle to open innovation,” he remarked. Mark van Spall (ASML) elaborated on practical aspects of introducing open innovation into business, and reaching out to more knowledgeable parties: “Many people say that you need to have a core competency inside the house. But it’s smarter to address someone already ahead of you. If you are not going fast enough, customers will find other ways to solve their problems. The ecosystem will evolve, with or without you.” After all, the sheer pace at which innovation is happening today leaves companies no other choice but to cooperate on finding joint solutions. Harry Dolman (Holland Private Equity) presented his view on the importance
It all began in the kitchen. Shell started tinkering in the kitchens of their head office in The Hague.
Shell Technology Centre Amsterdam opens. Amsterdam became home to Shell's new laboratory, with just nine staff members.
Shell publishes the Standard Analytical Methods Book, Standardizing research methods and leading to better science and more reliable studies in the R&D world.
Shell is the source of a wave of innovations, from the jet engine to the catalytic cracker. They also join forces with Ferrari in Formula One racing.
Shell goes international and revolutionizes international business by installing leaders from local communities, giving local branches independence.
Innovation Open House | Shell
Shell Technology Centre Amsterdam is the ultimate Open Innovation facility. More than 1000 experts from different disciplines come together daily to innovate. Shell annually spends around one billion euro worldwide on research and development.
of recognizing partnerships at the “inflection point”, when support from large companies is critical for both the company and the startup. “The larger you become, the more dependent you are on outside ideas. I am sure that it’s what happening at Shell as well.” The story of Airborne, a company specializing in the production of composite pipes, was highlighted as one example of how timely support could positively alter the course of a start-up’s development. Airborne’s founder Arno van Mourik and CEO Erik van der Meer joined with their view on the importance of partnering with companies like Shell, with regard to getting access to testing facilities. “If we could have tested the technology in a controlled environment back then, that would have been a huge success.” Jan van den Biesen, an expert from Philips, talked about the company’s “journey to innovation,” starting with a research unit in 1994. The company is successfully utilizing the so-called “outside-in” innovation strategy, which is based on leveraging the knowledge and skills of the outside world. By doing so, “meaningful innovation” is achieved.
not only used some of the knowledge from a different sector (the idea for the ocean bottom sensors was borrowed from the mechanism of the atomic clock), but also took a massive financial risk, gambling everything on buying a new testing field. Discussions were then rounded up by Frank Salzgeber of the European Space Agency, reflecting on how solutions from the space sector can be applied in the oil & gas industry and on a critical new mindset for the new generation of entrepreneurs. In a world where the number of startups is steadily growing, “no fear and little respect” to existing barriers is what should be practiced by their top management. Finally, host Rens de Jong (BNR News Radio) moderated a panel discussion on the practical realities of speeding up open innovation. Alongside the conference, the Innovation Open House -Technology Fair hosted 18 companies in Clean Tech, energy and oil & gas, including Magseis, Acoustic Eye, and more. Both start-ups and established innovators put their ideas on display.
Ivar Gimse and Jan B. Gateman (Magseis) were yet another innovation highlight of the day, with a success story of how they
Read on to see what the visitors and speakers had to say about the day!
Shell adopts a policy of diversification. Branching out into different forms of energy production and chemical development, Shell begins to prepare for a future where oil reserves are scarce.
Shell looks to the environmental future, developing Gas-to-Liquid plants and new environmentallyconscious plans that will pave the way for new policies of open innovation.
Shell looks to the environmental future, developing Gas-to-Liquid plants and new environmentallyconscious plans that will pave the way for new policies of open innovation.
Shell TechWorks opens its first office. Offices will be set up in areas with thriving high-tech businesses, connected to research institutes, start-ups, and venturecapitalist firms.
Shell ranks in the top 10 most admired companies for innovation in the world, according to Fortune Magazine2, as it celebrates 100 years of innovation at STCA.
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Innovation Open House | Shell
Geert van de Wouw
Managing Director Shell Technology Ventures
Chief Technology Officer, Royal Dutch Shell
Open innovation is about partnerships, about recognizing that some of the challenges in innovation are so big and so complex that you better tap into the different views and different capabilities of many people, rather than do it all yourself. It’s really the philosophy that together you can be more than the sum of the components. Open innovation is not a formula for everything in life, but failing to grasp an opportunity, whenever there is one, becomes a setback for companies. Those will be at a disadvantage compared to the companies who recognize such opportunity and make the most of it. We come from a history when we did everything ourselves. Not because we believed in ourselves so much, but sometimes also because the possibilities for partnerships were not there. Now that society has moved on, there is significantly more knowledge, innovation and
creativity, more potential to combine one sector with another. I think Shell is not late in this game. We are definitely on a journey where we have to get better and better by using open innovation. I am not going to claim that we are the best in it, but I am happy to claim that we are fully aware of the potential Shell has in certain areas. We have commitment and resolve to make the most of it. Historically, the industry has been very sector-oriented – high-tech companies would only look at other high-tech companies, as did medical, chemical and energy companies alike. Shell was not the exception. However, having a dialogue helps identify the opportunities and links outside the sector, links that have not been there before. Nice thing about open innovation is that it is a win-win-win, where benefits of everyone involved are enhanced.
n July 2nd, during the Shell Innovation Open House, Shell Technology Ventures (STV) announced their investment in a new technology developed by sensor development company Veros Systems, located in Austin, Texas. We spoke to Geert van der Wouw about these developments. According to Geert, Vero ForeSight monitoring technology is being developed to measure, real-time, subtle power fluctuations of rotating equipment (from pumps to compressors). Shell will be able to detect damage to the machines earlier, which means they will be able to get a head-start on equipment maintenance. Shell’s policy of open innovation, and its programs like GameChangers, Shell Technology Ventures and Shell TechWorks, continuously enriches its innovation process. The contributions of innovators from a number of different disciplines and fields help Shell benefit from external sources of knowledge. From undersea sensors to solar plants that generate steam for oil fields, Shell’s reputation for innovation emerges from their policy of cooperation.
INNOVATION OPEN HOUSE (IOH)- TECHNOLOGY FAIR
At the fair, bright minds from 18 companies in CleanTech, energy, oil and gas presented their businesses. Spirit IT, Magseis, C-Cube International, Acoustic Eye, Delft Inversion, Husiman and ISIS were just some of the companies on display. Our company was started several years ago by students and prof. Gries Gisolf. We are able to provide high-quality models of the subsurface, and this imaging technology is important for the oil & gas sector as it allows them to see clearly what they otherwise would not see under the Earth surface. It all started at the research consortium called Delfi, and Shell is
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one of the companies sponsoring it. We have a very tight connection with Shell, and have been working together for several years. We came to this Fair to give an overview of what we can do. Today’s discussion was interesting, though I come from Academia, which is by nature skeptical, also about open innovation.
Research Geophysicist, Delft Inversion
Innovation Open House | Shell
Open innovation is a process when innovators, entrepreneurs and larger corporate customers are willing to work, take risks and share the results together. Shell is very involved in it by investing into companies at the growth point, which is important because this way it is easier to scale up the production, marketing and internationalization for an idea which has already been validated by the market.
Meetings like this one are very important, because you can spread your ideas and exchange opinions. The IOH was very well organized and had a diverse audience.
Managing Partner & Chief Operating Officer, HPE Growth Capital
The dialogue which took place today is very important. Even though we know Shell very well, because they are an important customer, it is always good to make new connections. Open innovation is a good thing about the oil & gas sector, where companies have recognized the need to develop together. Joint programs become characteristic for this industry, as companies like Shell, BP and Petrobras sponsor joint technology development. It exists in other sectors too, but on a much smaller scale. Conferences like IOH contribute to the process. You can talk directly to the researchers, decision-makers and, what is even more important – find new contacts.
Chief Technology Officer, Airborne Oil & Gas
At YES!Delft, an incubator, we support startups in developing their product and business model, creating a network of coaches, investors and launching customers. I think we are part of open innovation, because open innovation happens when companies, startups and academia work together to create new research, new ideas and new businesses. A lot of our startups now begin to work with Shell. At the IOH Technology Fair, there are 18 startups and four of them originate from YES!Delft.
Managing Director (a.i.), YES! Delft
It has been nice to see the perspectives of different industries today, because in open innovation, there is no blueprint and everyone is doing it differently. Today we could learn from each other.
The discussion we had here happened between different players and such diversity is important. Engineers normally tend to have a slightly tunneled view – if their colleagues do not know the issue, they think the issue is non-existent. What I saw today, though, was open innovation advocated by the Chief Technology Officer, by top management. When the message comes from above, others realize that it is not forbidden to come up with crazy ideas. Shell is being very smart by doing this and others in the industry will copy. To the oil & gas sector, space has a negative stereotype. People think it’s too expensive, too high-tech and too far away. But trust me, if it works in space, it would also work sub-sea. Sometimes you do not even need to buy the component, you just need the knowledge and the know-how. These sectors can benefit from each other through open innovation and that is the mentality that we need to teach.
Head of Technology Transfer Programme, European Space Agency
1. http://www.shell.com/global/future-energy/innovation.html 2. http://fortune.com/2014/02/27/worlds-most-admired-companies-top-companies-in-innovation-responsibility-and-more 3. http://www.shell.com/global/future-energy/scenarios/40-years.html
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Danish Trailblazers | Rasmus Helveg Petersen
Danish Trailblazers Setting the Stage for the Future of Clean Energy Denmark has met energy goals that no other nation has been able to meet. They have set the stage for renewables and clean energy while playing a supportive role in the energy transition of countries around the world. Rasmus Helveg Petersen, Danish Minister for Climate, Energy and Building, reveals the secret of Denmark's success. Morten Kabell, mayor of Copenhagen, discusses the city's climate action plan.
What is Denmark’s key strength? We’ve taken a very ambitious approach where we want to do something for the world. We know that Danish emission reductions alone are not going to change matters much, so we’ve tried to take the lead and develop new technologies for others. We are also part of the EU’s and UN’s ambitious climate target plans. We make one integrated effort and everything we do supports the other party’s efforts as well. Being a front-runner on the technology side of the field serves a political purpose because we need a global agreement on energy and Denmark facilitates the processes to reaching these agreements – this is Denmark’s strength. What do you hope to teach other countries? We’ve passed a lot of milestones that a lot of people thought couldn’t be passed. For instance, this past December (2013) we had more than 50% wind power in 34 NRG Magazine
Rasmus Helveg Petersen Danish Minister of Climate, Energy, and Building
our electricity system. It has caused no blackouts and no disturbances of any kind. We demonstrated that this can be done without any implications on lifestyle. So we don’t just teach about technology but also the application of these technologies on the largest possible scale that other countries can learn from.
incredible improvement since the early wind turbines of 20 years ago. We have consistently supported the development of ever-larger and more sophisticated turbines. This is a service to the world – our policies support sustainable development, and these new technologies help change the world.
What is Denmark’s recipe for success? We only have the technology because we have policies supporting wind power, renewables and the development of new technologies. Our policies have led to innovation. Our final aim in 2050 is to be completely without fossil fuels and this still demands a couple of technological breakthroughs. We support technological developments towards these breakthroughs. The technology we have today is a product of our policies – when you look at the wind turbines, the 6MW wind turbines being put up now are on a very large industrial scale and are an
Why is the Danish strategy the first of its kind? We’ve aimed to reach these ambitious goals earlier and we’ve followed these policies consistently for a very long time. We feel confident that we can go there, we know the prices and it has solid political backing. It’s not just a dream, it’s a plan and we will get there in time. It’s the action plan1 that’s so unique, not the end goal.
1 http://www.kebmin.dk/sites/kebmin.dk/files/news/from-coaloil-and-gas-to-green-energy/Energy%20Strategy%202050%20 web.pdf
Danish Trailblazers | Morten Kabell
Morten Kabell has been politically involved in Copenhagen since his youth. As of 2006, he was the RedGreen Alliance spokesman in Copenhagen on traffic, climate and urban planning and just this year, Kabell was elected into office as Copenhagen’s Technical and Environmental Mayor.
enmark, as a front runner on clean energy also holds the world’s greenest capital city, as voted by the European Commission for the European Green Capital Award.1 Particularly remarkable is Copenhagen’s strategic climate action plan (CPH 2025) which focuses on four areas – energy consumption, energy production, green mobility and city administration. The ultimate objective is to become the world’s first carbon neutral capital and next year marks the year when midterm goals will be evaluated for this municipal strategic climate action plan. The Mayor comments: “The first target was to reduce carbon emissions by 20% in 2015 compared to in 2005. We reached this already in 2011, while also having our population grow by 12%.” Demonstrating that it is possible to combine growth, development and increased quality of life while reducing carbon emissions, the CPH 2025 Climate Action Plan instills pride in the Mayor. “The plan is both, beneficial for the environment and for the daily life of the Copenhageners – so that Copenhagen continues to be one of the world’s best cities to live in. I’m particularly proud of our cycling achievement where 41% of all trips to work or to school are made by bike. It means fewer cars, less pollution and cleaner air. I’m also proud of our wind turbines - we inaugurated three new turbines in Copenhagen this year,” says Kabell.
COPENHAGEN’S STRENGTH The Mayor believes that Copenhagen’s climate-friendly and efficient district heating system which covers 98% of heating in the city is Copenhagen’s key strength. Another aspect that stands out in Copenhagen deals with its clean environment –“the water in the harbor is so clean that you can swim in it, which many Copenhageners’ enjoy during the summer,” shares the Mayor. “Again we combine environmental gains with the quality of life of Copenhageners. I think the reasons to the success are that we have had the political courage to set ambitious goals - and sticking to them for many years - as well as our focus on substantial cooperation with citizens and stakeholders in Copenhagen,” he continues. On a global scale, due to Copenhagen’s political commitment to making the city the first carbon neutral capital, Kabell believes that this is the reason Copenhagen holds its front runner status in the clean energy domain. “Cities are responsible for the majority of carbon emissions in the world and I hope that we can show other cities that it is important they take responsibility for their emissions. We have agreed on goals that reach far into the future and this is essential for the decisions and investments we make,” says the Mayor. The carbon reduction responsibilities that Copenhagen takes and the work they do on sustainable energy and environmental improvements have been the main reasons for the IGRC to be hosted in the city. Also, Copenhagen is a European Green Capital this year and exists under the slogan
“Sharing Copenhagen” as they believe in sharing ideas, such that subsist at the IGRC. “There are some technical reasons to choose Copenhagen and Denmark for the IGRC,” says Kabell. “Several things happen in Denmark in the gas sector – we have a large natural gas grid, we are investing in biogas production and we are looking into using gas for transportation. In addition, we are used to hosting large conferences in Copenhagen and the conference facilities are good,” he concludes. 1 http://ec.europa.eu/environment/europeangreencapital/ winning-cities/2014-copenhagen/
We hope to be able to use gas for transportation in Copenhagen in the future and especially for heavy vehicles because there are only few alternative renewable fuels for these vehicles. - Mayor Morten Kabell on the future of gas in Copenhagen
NRG Magazine 35
Danish Trailblazers | The Danish Wind Industry Association
The Power of Denmark is Harvesting Wind Power and Strengthening the European Grid
enmark has been the first country to fully embrace wind energy. Its wind revolution began in the 1970s. "Today, Denmark is still home to some of the most prominent players in the various disciplines, such as production of turbines, finance, installation, and project development," says Jan Hylleberg, CEO of the Danish Wind Industry Association. Denmark's leading position in the industry is also due to the fact that they've had large amounts of wind energy feeding their electricity grid. According to Hylleberg, last year more than 33% of the electricity came from wind energy This number is expected to increase to 50% in 2020. Denmark has also been the first country to use wind turbines offshore. The first offshore turbines were deployed in 1991 and are still running. Hylleberg explains, "Today, it is a totally different ball game. - industrialization and professionalism have increased a lot. In Denmark, we hold second place for installed wind energy capacity offshore and we are currently planning for 1400 MW offshore to be installed by 2020. The largest current projects are the two offshore parks Kriegers Flak in the Baltic Sea (600 MW) and Horns Rev 3 in the North Sea (400 MW)." Offshore wind has large potential and Europe's capacity to generate it will increase 7-8 times before 2025. Leading companies based in Denmark such as Siemens Wind Power, MHIVestas Offshore Wind and DONG Energy hold a prime position in the growing market. Today, approximately 9 out of l 0 offshore turbines are made by Danes. For other countries, Denmark presents a real-world example of how wind energy can be used in large scale and across borders. "Some days, wind turbines produce what corresponds to more than l 00% of the electricity consumption. Danish energy companies and the TS01 are controlling the production and export of wind. This is quite unique and an
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example of how a region such as Europe can function in the future," says Hylleberg. Many companies in Denmark are already international players, carrying Danish knowledge beyond borders. Also, foreign companies are settling in Denmark to open R&D and production facilities, as the quality of wind research and innovation in Denmark is high and the country is wellpositioned strategically in the wind energy market. When it comes to exporting their energy; Denmark is part of the Nord Pool Spot electricity market. By letting the markets regulate the demand, it becomes possible to adjust the use of fossil energy as the use of coal and gas can be kept to a minimum on windy days and turned up on windless days.
KEY CHALLENGES Although the wind industry is developing rapidly, only onshore wind is cheaper than gas and other energy sources. Today offshore wind remains more expensive. The industry aims at lowering these prices. "Among other things, this means that the energy playing field must be leveled. By this, I mean to remove subsidies for all energy technologies including wind energy," states Mr. Hylleberg. Renewable energy currently receives significantly fewer subsidies than fossil fuels and nuclear energy in the EU. "By removing this barrier and strengthening the grid across Europe, we can overcome some of the barriers that arise when the turbines in one region are producing a lot or a power plant shuts down unintentionally. In Denmark, we have developed an effective grid and regional market, but this needs to be broadened to the rest of EU," concludes Hylleberg. 1. http://www.energinet.dk/EN/El/Engrosmarked/Energinet.dksrolle-paa-engrosmarkedet/Sider/Balancering-af-systemet.aspx
Danish Trailblazers | The Danish Wind Industry Association
Jan Hylleberg Jan Hylleberg is currently the Chief Executive Officer of the Danish Wind Industry Association. He is also a board member of the Global Wind Energy Council (GWEC), the European Wind Energy Association (EWCA), and the State of Green.
NRG Magazine 37
Talents in the Spotlight | TTA World
Talents in the Spotlight
“I want to implement and launch innovative sustainable solutions that can make an impact and improve the energy sector.”
Edoardo received his bachelor degree in Energy Engineering from the Politecnico di Milano, after successfully finishing a program focusing on large-scale energy production methods and plants. He then took a 9-months study break which he spent in London, networking and improving his English skills. Edoardo admits that the cosmopolitan flare of London contributed to his vision of future education and work: “I had a few working experiences and I met a lot of people who influenced my way of thinking. I realized how important it was to address problems related to the energy market globally and not locally, in order to find innovative solutions.” He then moved to The Netherlands, where he is currently pursuing a Master in Energy and Environmental Sciences from the University of Groningen. “Currently, I am writing my master thesis on the effects of different natural gas compositions on engines. Moreover, I am following a successful project with other three students from different universities on an innovative energy storage system. This last experience, it’s a project that all started after the participation in the NRG Battle organized by TTA World.” Edoardo signed up for NRG Battle because it allowed him a possibility to meet and collaborate with other bright
students, expand his contact network and get new insights regarding the energy sector from the cases provided by the companies. Together with other students, he was working on a case from Fujifilm Europe, aiming to find new applications for ionexchange membranes. As an outcome, the team came up with a break-through energy storage system, which they called Blue Battery. During this process, the Talent managed to act both as a creative thinker and a critical analyzer, driving the team to success. He says: “It has been an awesome experience and allowed me to grow professionally. It is very well organized, and the companies providing the cases were committed to collaborating with the students.” Edoardo shares, “After my graduation, I plan to continue working on our innovative sustainable energy system. Together with my three colleagues we aim to organize our work in a legal entity, which could allow us to achieve our goals.” At this point, Edoardo is working as a researcher at DNV GL in Groningen.
Edoardo's talent is that of a Regulator. Regulators generally strive towards control and regulation in their daily practices, as well as in their work. They are attracted by well-organized structures and choose well-proven, efficient methods of reaching their goals. Talents like Edoardo are an asset to every company as they are highly reliable and dedicated to their work.
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Talents in the Spotlight | TTA World
TTA World identifies high-potential individuals by testing their talents and finding their key assets. NRG Magazine has selected a couple of these talents and highlighted the unique traits that make them ideal NRG Battle team candidates.
Caroline is currently enrolled as a Master’s student in Mathematical Modeling and Computing at the Technical University of Denmark, specializing in data analysis, machine learning and big data issues. “The beautiful thing about my studies is that mathematical methodologies are so universal, that there are no limits of their fields of application,” she says, and admits that nothing makes more sense to her than applying technical knowledge to providing solutions with potential positive environmental and social impact. “Mathematical modeling deals with the optimization of operational performance, the economy, and social welfare, which are crucial if we want to take the problems in the energy sector seriously and come up with realistic and implementable solutions,” argues Caroline. Alongside her studies, she works at a Danish consulting company performing research in the field on energy and climate change, both on the national and international level. She describes her current job: “I help with implementing, modeling and analyzing mathematical models. We work in teams where we approach energy systems from a technical, economic and environmental
point of view, as well as the analysis of energy and climate policy measures.” “I have always had an interest in problems concerning energy and climate and my current student job has given me an important insight into how I can contribute to solving challenges in the energy sector,” says Caroline. Caroline is preparing to start yet another Master’s program, with a focus on forecasting power generation of renewable energy sources. One thing she is sure about is that she doesn’t want to get bored, but instead do awesome things that contribute to a more sustainable society. With an interest in travelling and cultures, she might well end up working for an international company. Caroline argues the necessity of bigger investments into green technology, but also being more courageous when implementing the already available green energy solutions. “It’s not technology, it’s politics that is our biggest challenge. I hope that we reach a mutual understanding as to how to solve future problems. Sometimes I feel like we are all in the same boat, rowing in different directions.”
“Less talk, more action!”
Caroline has the rare talent of a Leader, a combination of the Socializer and Go-Getter. Talents like Caroline are meant to be at the forefront, leading the rest of the team. Leaders are by nature very supportive to their social environment, and at the same time focus on short-term goals and results.
LEADER Caroline and Edoardo are an excellent example of the high level talents who present themselves in the TTA database. The database of TTA World contains thousands of similar talents from all over the world. These talents have been tested online and ranked by our system to determine their unique assets and talents. If you want to know more about our database and how to get access to it please contact our CEO Geertje Dam. You can reach her by mail : email@example.com or by phone : +31 (0)50 – 317 14 70 NRG Magazine 39
Convention Energie2014 | Topsector Energy
the Clock Ecofys and Top Sector Energy are Rising to the Challenge to Change the Future of Energy
Manon Janssen is the CEO of Ecofys and leader of Top Sector Energy. To Manon, these roles are symbiotic, allowing her to help steer society onto a more sustainable path.
cofys works hard at transitioning our energy system to a sustainable one, making every possible effort to outsmart the flow of time. We all know that steps need to be taken to adequately meet environmental challenges, but we don’t realize the sheer urgency of the task. According to Manon, things need to change, and they need to change now. “Our biggest challenge is time,” says Manon. “How much is there left for us? At Ecofys, we are very concerned about the time frame, because, just as other humans, we want to leave a livable planet to our children.” The Energy Report (2011), a research developed for the World Wildlife Fund, explores whether it is possible to switch fully to sustainable energy by 2050. One might be surprised at the verdict– such a shift is absolutely possible. So what, then, impedes us from getting there?
Etrium, the first passive house office of its kind in Germany, is home to the Ecofys subsidiary in Cologne.
year, we measure the impact of our work on clients according to three elements – energy efficiency, renewables and climate change. For instance, how many hours of energy were created from renewable sources? How much CO2 emissions were prevented?”
ROME WAS NOT BUILT IN A DAY Despite the seemingly steady development of wind and solar power in the Netherlands, these sources have not yet gained a formidable share in the country’s energy mix. Currently, renewables account for only 4.5% of the final energy consumption. It is the task of Top Sector Energy to accelerate the technological and societal developments necessary to increase the share. The percentage needs to reach 14% in 2020, and 16% in 2023. Given that innovation and technical development, as well as shifting the social and cultural acceptance of change, do not happen overnight, one cannot argue the overarching imperativeness of the task. “Unfortunately, we are not good at sticking to environmental commitments, just like we are not good at sticking to diets, for instance. Why don’t we think of energy in the way we think of food? When people live in wartime, they should plan their eating habits differently.”
Our biggest challenge is time.
“We don’t give our utmost attention to the energy transition,” Manon explains. “There are some countries or regions that go sustainable, some businesses. But as soon as other issues take precedence, the energy transition is moved to the back burner. That is what makes it hard, because as long as we do it separately, it simply takes too much time and effort.”
Prinses Amalia Offshore Windfarm is the second offshore wind farm in the Dutch part of the North Sea.
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To contribute to the sustainable energy economy, Ecofys is dedicated to boosting energy efficiency through reducing energy consumption and meeting energy needs with the power from renewable sources. Meticulous measurement is key, according to Manon. “At the end of the
Convention Energie2014 | Topsector Energy
Top Sector Energy Top Sector Energy is one of the nine so-called “top sectors” that have been singled out by the Dutch government as the most crucial branches of the national economy. It is organized as seven knowledge units, each delivering innovation on a respective element of the energy transition: solar, offshore wind, energy saving in the industry, energy saving in built environment, smart grids, bio-based economy and gas. These elements are deemed important in building The Netherlands’ new energy economy and reaching the country’s energy goals.
According to Manon, one of the most significant barriers to embracing renewable energy are the actual endusers, both individuals and companies. Yet, we need to build up a critical mass of first users. “It is a lot harder going from 4% to 14% than from 14% to 30%,” comments Manon. First steps are the hardest, before the trend becomes visible enough to seem normal. Just as separating the recyclables from our trash once became a part of everyday life, so must energy efficiency and the use of renewables become the norm. “The thing is, energy will not become cheaper, whether we switch to renewables or not. People will have to face higher energy costs anyway. We might as well choose to stop extracting fossil fuels and destroying nature.”
THE POWER OF PEOPLE “Our job at Top Sector Energy is to drive technological and social innovation and to drive it with funds and people,” continues Manon. Today more than ever, the energy sector needs the injection of a fresh workforce. In this respect, Top Sector Energy is akin to an R&D company, preoccupied with social innovation and ensuring the presence of a necessary and diversified workforce. Top Sector Energy supports the creation of 15,000 jobs in the energy field by 2020.
Luckily for The Netherlands, the country possesses a well-developed and decentralized system of technical Universities and schools. Once students recognize the growing demand for technical skills, more and more of them hopefully will enroll into relevant education programs. The pragmatic mentality of the Dutch also contributes positively to our hopes for the future. “We are practical people and these kinds of jobs perfectly fit our nature. We are among the best bridge builders in the world. Why can’t we also become the best grid designers?” muses Manon.
Ecofys is an international knowledge consultancy focusing on complex energy solutions, working both with governmental and corporate actors across the globe. Its expertise spans the full spectrum of energy and climate issues. Ecofys regularly publishes reports, strategic studies and market assessments. Eleven of the lead authors writing the reports for the UN International Panel on Climate Change work at Ecofys. They share the honor of the Nobel Peace Prize awarded to Al Gore and IPCC in 2007.
WHERE ARE WE GOING? “Whenever I sit at the table with people from the oil & gas sector, I raise the question – what are we going to do in the future? We cannot ignore the fact that gas in The Netherlands is running out. No one knows how gas will look several years from now, but we better get on with some scenario planning. Gas is indeed our transition fuel, but I am not sure whether we are brave enough to admit it to ourselves,” Manon concludes.
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Convention Energie2014 | Attractions
At Energie 2014, the latest solutions in sustainable energy can be seen up close. Conferences, interactive lectures, and live demonstrations will take place alongside the NRG Battle Europe Edition and a fair of innovative exhibitors.
aving energy: everyone knows it's important. In practice, however, companies are more interested in saving money. Energie 2014, the biggest live energy platform in the Netherlands, will be bringing together innovators and experts and showing that saving energy and saving money can go hand in hand. The many exhibitors at the fair are bringing a variety of solutions to the table, from heat pumps and meters to (building) integrated storage, PV and LED systems.
Besides concrete projects, Energie 2014 will be featuring an extensive knowledge program. This includes the Nationaal Energielabel Congres (National Energy Label Conference), the Wind Congres (Wind Conference, in cooperation with Bosch & Van Rijn, the Windunie and Raedthuys), the Industrial Morning (in cooperation with FME), the Groot Energiedebat (The Big Energy Debate, in cooperation with FedEC, TEG and VVM) and conferences on e.g. gas developments and measurement data. And there’s much more.
Request your free entrance tickets via www.energievakbeurs.nl/tickets
YOUNG ENERGY TALENT In the spirit of progress, and looking towards the future, Energie2014 will be putting the spotlight on young energy professionals. This year, the trade show will be the scene of the largest interactive energy competition in Europe, the NRG Battle. In this competition, young talents will try and tackle current energy dilemmas in a live setting. In Hall 1, the D-Exto Pavilion by TU Delft will bring a party atmosphere to the trade show. With creative experiments and interactive games, the scientists from Delft will show what ‘sustainability’ means for them.
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COMFORTABLE AND ENERGY-NEUTRAL LIVING With your entrance ticket to Energie 2014, you can also visit the PassiefBouwen Event in Hall 1 for free. PassiefBouwen bridges the two concepts of energy-neutral living and comfortable living, by smartly anticipating the forces of nature. By taking nature into account in their designs, a passive building will stay warm in winter and cool in summer, almost completely by itself (passive). The Stichting PassiefBouwen will showcase the latest developments and trends and organizes a continuous program with around 50 workshops.
THE SOLAR EVENT In co-location with the Solar Event At the same time as Energie 2014, the Solar Event will be held (hall 3). Your entrance ticket to Energie 2014 also gives you free entry to this event. The Solar Event showcases the latest developments in the field of solar energy, from generation and storage to innovative applications such as plastic photovoltaic cells, Building Integrated PV and CIGS. Some of the presentations at the Solar Event will be in English.
Convention Energie2014 | Attractions
(s om e o f)
THE ATTRACTIONS D-EXTO PAVILION The TU Delft D-Exto (Delft Experience Tomorrow) Pavilion, which toured various festivals last Summer, will also be at Energie 2014. Via interactive games and creative presentations, Delft scientists are making the abstract concept of ‘sustainability’ more concrete. It will be a great experience!
GAS DEVELOPMENTS IN THE NETHERLANDS AND THE EU
Speaker: Veronique Gevaerts, program staff member of Solliance When and where: Wednesday October 8, 3-4 PM
NRG BATTLE – EUROPE EDITION
INNOVATION START-UP: POWERWINDOW
Innovation and talent are vital. In construction, industry and also in the energy sector. To emphasize how important they are, Energie 2014 welcomes the biggest interactive energy competition in Europe: the NRG Battle. During the exciting finals on the second day of the trade show, multidisciplinary teams of heavily selected global top talents work on disruptive and innovative solutions for the companies challenges. Follow the events live to find out what concrete solutions they find.
When and where: Tuesday October 7, 3 PM, Energie Theater
When and where: Wednesday October 8, Energietheater
HOW TO GRAB THE BEST JOB MARKET OPPORTUNITIES
SOLLIANCE & SOLARROK
When and where: Tuesday October 7, 11.15 AM until 1.15 PM, D-Exto pavilion
Organic photovoltaic cells (OPV), or plastic solar cells, offer many new possibilities. They can be rolled per (kilo)meter and are available in every possible colour and transparency level.
When and where: Continuous presentation in Hall 1
There is a lot going on in the energy and gas sectors. A few years ago, regular gas was seen as the fuel for the future. Because of upcoming sustainability projects, transport risks (Ukraine and Iraq) and international competition (LNG and shale gas), this is changing. What is the influence of EU, the gas hub, what are the latest developments and, most of all, how will it influence prices? Speakers from e.g. Gazprom Benelux and ECN will discuss these issues during this conference.
This workshop is an unmissable event for those who have (almost) finished their university degree, internship or graduation assignment. The VVM Jong team and ECOjob will be presenting the current (environmental) job market, various employers will explain what is important to them, attendants will get tips about writing a successful CV and a job coach will talk about ‘Mental resilience during job interviews’.
PLASTIC PHOTOVOLTAIC CELLS
Solarrok is an EU project, aiming at collaboration between and unifying strengths of the main PV clusters in Europe. The Netherlands are represented by Solliance, the partnership between TNO, TU/e, Holst Centre, ECN and IMEC, for research and development in the field of thin-film photovoltaic cells in the region of Eindhoven-LeuvenAachen. Speaker: Hein Willems, director of Solliance
Solar panels are relatively expensive to buy, have certain restrictions as they are tricky to integrate in buildings and not transparent, which means they cannot be used as windows. Ferdinand Grapperhaus, MSc student of Applied Physics at the TU Delft, will be presenting an innovative solution. The PowerWindow converts sunlight into sustainable energy suing a technique called BI-CPV. Discover the possibilities of this award-winning start-up. Speaker: Ferdinand Grapperhaus, MSc student Applied Physics, TU Delft When and where: Wednesday October 8, 10.30 AM, Energietheater
Free Entry Entry to Energie 2014 is free when you register online via www.energievakbeurs. nl/toegang. Your ticket also gives you free entry to the PassiefBouwen Event and the Solar Event. More Information Energy 2014 takes place from Tuesday October 7 until Thursday October 9, in the Brabanthallen in Den Bosch (The Netherlands). For more information, go to www.energievakbeurs.nl
When and where: Wednesday October 8, 10.30-11.30 AM
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EUROPE EDITION 7-9 OCTOBER 2014, BRABANTHALLEN DEN BOSCH
MEET, COMPETE, AND INNOVATE WITH THE BEST AND THE BRIGHTEST! THE BATTLE The NRG Battle - Europe Editio is one of the most talent-rich and vibrant energy competitions in Europe. During this contest, multidisciplinary teams of carefully selected global talents come together to work on innovative solutions for challenges presented to them by major companies in the field. An expert jury will judge the team's solutions based on three criteria: novelty, utility and non-obvious of character.
ENERGIE2014 The NRG Battle - Europe Edition will be taking place alongside the Energie2014 in Den Bosch, this October 7th to 9th. With an international field of participants and a yearly growing number of exhibitors and visitors, Energie2014 is the place to be! In 2013 more than 13.000 visitors and 350 exhibitors attended the conference, and this year promises to be just as exciting.
Manon Janssen Jury President CEO and Managing Director of Ecofys
Maarten Dullaert Staff Director at Fujifilm Manufacturing Europe
Bernard Fortuyn Director of the Energy Sector at Siemens Nederland NV.
SIGN UP NOW! Are you a talent or young professional interested in a career in the Energy sector? You can become a team member and put your talents to the test! This is your chance. Register now by visiting our website at:
www.nrgbattle.com Participation is free of charge for talents, food and drinks are included.
Bio-Based Economy | InnoFasEnergy
TRASH is another man's treasure
In the municipality of Duiven, something amazing is underway. Program manager Jeroen Smits is cooperating with companies at the InnoFase industrial terrain to reinvent the face of business. The InnoFasEnergy project has begun.
n the outskirts of Duiven, along the IJssel river, the 60 hectare InnoFase terrain is home to more than 10 businesses that are beginning to open their doors and tear down their metaphorical walls. With the cooperation of the municipality of Duiven, InnoFase is undergoing a sustainability revolution. What’s happening at InnoFase is something that has been happening in nature for millions of years – organisms develop symbiotic relationships that help them evolve together to survive their changing world. At InnoFase, organizations like Water Board Rijn and IJssel, CarbonOrO, and AVR are creating their own symbiotic ecosystem – a closed cycle in which the waste and byproducts of one company’s processes become the raw materials that fuel the next company’s processes. And then the cycle begins anew. The InnoFase program aims not only to stimulate a bio-based economy, but also to improve the competitive edge of the 46 NRG Magazine
companies on the terrain. With the cost of waste eliminated and in fact transformed into profit, these companies will have an edge on others in the business. Working together on the InnoFase terrain also means that transportation costs are reduced, energy questions can be solved together, and the supply chain can be more easily managed. The municipality facilitates projects that contribute to InnoFase's sustainable goals by making staffing capacity and cofinancing budgets available. At InnoFase, a consortium of 9 parties1 is working on a project called InnoFasEnergy2. They are seeking out ways to harness waste water as a resource, looking at producing hydrogen from excess electricity, working on a method to produce methane through a process that combines hydrogen and CO2, and producing raw materials for the local economy using recovered CO2. Eventually, the InnoFase terrain will also be a major force behind a new Smart Grid. This is all being accomplished
Project and Program Manager for the Municipality of Duiven. He is in charge of the InnoFase program, now entering the InnoFasEnergy phase of its development.
with a mindset of open innovation and collaboration. There is a clear business case in development, a research agenda, and a team working on securing a “Green Deal” with legislation that allows for the circular economy to function. InnoFase is on its way to becoming the most sustainable industrial terrain in the Netherlands, by making it economically attractive for businesses to eliminate waste. There are still 14 acres of land for sale or leasehold available for companies looking to join the cycle. The idea is to create a win-win situation for everyone involved, because one man’s trash is another man’s treasure. 1. AVR, Water Board Rijn and IJssel, CarbonOrO, Siemens, Stedin, Liander, DNV GL, Alterra and the municipality of Duiven. 2. The project is made possible by a financial contribution from the province of Gelderland.
Bio-Based Economy | InnoFasEnergy
WATER BOARD RIJN & IJSSEL
ive or six years ago, Erik Zweers and Jeroen Smits were working together in the region of Arnhem and Nijmegen, where they came up with the InnoFase concept. “The original idea was a cascading economy, connecting companies to one another by their inputs and outputs,” Erik explains. Now, Erik is working for Water Board Rijn and Ijssel (WRIJ) and collaborating with Jeroen Smits from a different angle. The Netherlands is a country renowned for its waterworks and is constantly coming up with new ways to manage its waste water. Water Board Rijn and IJssel is part of a nation-wide cooperation of water boards. Together, they have two virtual factories (research and innovation networks) dedicated to getting more raw materials and energy out of wastewater. The wastewater plant Nieuwgraaf of WRIJ, situated on InnoFase, is one of the innovation hubs in the Netherlands, where innovative research and experimentation meet corporate practicality. At Nieuwgraaf, the idea is to come up with new business using wastewater as source for energy and raw materials.
REJUVENATING LOCAL ECONOMIES The focus of WRIJ’s dedication to innovation is not just environmental – it also makes good long-term social and economic sense. One of the WRIJ’s goals is to contribute in rejuvenating the local economy. Major part of the WRIJ’s territory is confronted by a shrinking population. That puts the regional economy and household incomes under pressure. WRIJ’s innovation hub might contribute in generating start-ups and spin-offs and in the process, create new jobs. WRIJ’s innovative practices might also reduce the
cost of water treatment. “Treating water is expensive, and the taxpayers have to pay for it… we try to reduce the cost so they can spend less of their income on the treatment of their water,” Erik explains.
THE HUB Nieuwgraaf is an integral part of InnoFase’s ecosystem. In the process of dealing with wastewater, a number of by-products are produced, including biomethane. WRIJ currently transforms its biomethane into electricity. “About 60% of our electricity need we can produce from biomethane. But this is not its most effective and efficient use. Transforming biomethane directly into heat or using it as an alternative for diesel is better, so we benefit from selling biomethane to other companies at InnoFase who can use it better. The lack of energy that then occurs could be supplemented by the energy our neighbour AVR produces. This give-andtake results in a more effective use of energy. We may also be able to use the excess heat from AVR’s process to heat our digesters and heat or cool our buildings. Using energy from AVR might also open the possibility of enhancing the production of biomethane and reducing sewer sludge. In turn, AVR is using our effluent as a coolant. We are also researching methods to clean our effluent further so this water might be used by other companies in their processes.”
THE GOLDEN TRIANGLE InnoFase and WRIJ are in a Golden Triangle of research. “It’s a combination of government (the municipality of Duiven, Water Board Rijn and IJssel), universities (the University of Wageningen), and companies with innovative ideas that they want to translate into a real-time experiment.” Crucial to this golden triangle, according to Erik, is that
Project Leader at Water Board Rijn and IJssel
Nieuwgraaf becomes a breeding ground for start-ups on their way to becoming fullfledged companies. WRIJ is trying to close the loop of a circular economy. The city produces wastewater, which WRIJ transforms into sustainable energy and raw materials, which can in turn be used by other companies and to power the city itself.
Nature’s Water Cleaners In order to maximize the cleaning of waste water, WRIJ found answers by looking at the natural world. Certain species of plants and animals are adept at cleaning water sources, and WRIJ has been harnessing their abilities in cleaning their effluent further. Yellow Iris and willow trees filter out nutrients , and mussels feed on waste particulates. Nieuwgraaf has become home to an entire ecosystem. Amazingly, this vegetation and animal matter becomes its own sustainable resource. “That’s where the fun starts,” Erik explains. “By cleaning, we can create biomass from mussels and vegetation. For instance, the chalk of the shells of the mussels could be used for cement needed for the restauration of medieval buildings.” Again, they’ve come up with a way to simultaneously solve an environmental problem and an economic problem.
One Man's Trash... One major unsung byproduct of the wastewater business are the fibers of toilet paper. This admittedly disgusting waste product is made of very high-quality fibers, similar to the sort used in paper manufacturing. Technically there is no problem using these fibers. “But the problem is that there is no paper mill that wants the fibers because they don’t like the idea,” Erik laments. But the fibers might also be used as insulation in building projects, effectively bypassing the stigma.
NRG Magazine 47
Bio-Based Economy | InnoFasEnergy
CREATING A CIRCULAR ECOSYSTEM AVR, CarbonOrO, Siemens and Stedin and Liander discuss their roles in the InnoFasEnergy Project
Director of Energy and Residues at AVR
Where Water Board Rijn and IJssel contributes wastewater, AVR contributes waste. As an Energy from Waste company, they have trade-lines in Duiven that supply them with household waste, which they incinerate and turn into electricity and district heating. In addition to this, AVR processes residues from paper mills, byproducts from the recycling process. They not only recover energy from the fibers, but also transform the minerals into a new product (TopCrete) that acts as a cement alternative. It’s no wonder that AVR’s long-term goal is to optimize their energy efficiency and become a zero-waste company. With their involvement in InnoFase, they are well on their way. “People normally look within their own systems, within their own borders. What we are doing at InnoFase is looking at the total area. Can we cooperate? Do we have by-products that another party can use as a new resource?” Michiel Timmerije explained how AVR gets cooling water from WRIJ and in turn looks for ways to deliver them process heat and electricity. One of the benefits of thinking outside the walls of your own company, he says, is gaining access to lower cost utilities that can be shared among companies. AVR’s main by-product of the Energy from Waste process is CO2. With CarbonOrO they are investigating ways to capture CO2 in a more cost-effective way. This greenhouse gas could then be reused in greenhouses or sold as a resource. In their Power-to-Gas project group, they are collaborating with Siemens and grid companies that feel responsible for long term net stability. According to Michiel, collaboration and sharing is key to innovation. “If you want to innovate, you need other companies. Of course it is easy to cooperate with companies in your own sector, but if you can cooperate with companies from other sectors, you learn more and can apply the expertise of other fields to your own.” That’s innovation.
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Pieter Verberne Co-Founder of CarbonOrO
CarbonOrO has developed a cost-efficient way to capture carbon dioxide from gasses. Effectively, with their specialized amine solution process, they require much less heat than is normally necessary to extract CO2. Instead of generating their own heat, which would cost both money and energy, CarbonOrO will be able to use waste heat from AVR. According to Pieter Verberne, CarbonOrO is working with AVR to capture carbon from their flow gas and investigating how to use that extracted CO2 in local greenhouses to promote the growth of vegetables. They are currently testing the CO2 for particulates, to see if it is suitable for greenhouse use. “We are also thinking about transforming it with a hydrolysis process back into methane. With hydrogen and carbon dioxide, you can produce water and methane, so the process starts again.” They are also working with Waterschap Rijn en IJssel to turn biological sludge from the treatment plant into green gas.
A Flexible Energy Grid for Multiple Energy Carriers The InnoFasEnergy project aims at developing a symbiotic energy system based on the circular economy. This system requires a flexible and interconnected energy grid, able to transport and transform multiple energy carriers. This project provides a unique opportunity for the Distribution Grid Operators (DSO) Stedin and Liander because it combines several energy carriers (electricity, biomethane, hydrogen and heat) as well as the energy related byproducts carbon dioxide and oxygen. For that reason, Stedin and Liander have joined forces to further develop the InnoFasEnergy project. Stedin is convinced that flexible and interconnected energy grids will become common practice in the near future. The InnoFasEnergy project offers an attractive opportunity to start building the energy grid of the future.
Bio-Based Economy | InnoFasEnergy
Business Developer at Siemens
Jaap Bolhuis from Siemens gave us the inside scoop on their involvement with InnoFasEnergy: â€œAs a result of waste incineration, AVR produces a fair amount of electricity as a by-product. The goal of the InnoFasEnergy project is to use the electrical power more efficiently by producing hydrogen via a Siemens electrolysis system. The hydrogen can be used to supply a local hydrogen refueling station to refill FCEVs (P2F) or to produce methane gas by combining hydrogen with captured CO2 from the AVR incineration process. The methane gas will be fed directly into the local gas grid (P2G). The Power-to-Fuel, hydrogen for mobility applications, and the P2G options are two of the four possible applications AVR is investigating together with other companies. The oxygen produced from the electrolysis process can also be used for water treatment, another project of InnoFasEnergy. Siemens is interested in this project because it will contribute to a further introduction of hydrogen in mobility applications (fuel cell technology) and at the same time offers a better economical application of the surplus of electrical power. An interesting aspect of the InnoFasEnergy project is the strong interconnection between parties who use their synergies to make the value chain profitable. And of course, Siemens is interested to do business in this new application area of electrolysis. Somewhere in the development curve of a hydrogen economy you have to step in. Siemens is proud to be one of the first pioneers to develop these large-scale industrial systems, which could be a key element in our energy systems over 20 or 30 years.â€? For more information, visit www.innofase.nl
An interesting aspect of the InnoFasEnergy project is the strong interconnection between parties who use their synergies to make the value chain profitable.
NRG Magazine 49
Green ICT | An Innovative Truth
An Innovative Truth VI
Sustainability is the Key to Success On the 10th of June 2013, the sixth edition of An Innovative Truth took place at Castle de Haar in Haarzuilens, The Netherlands. An Innovative Truth is a series of energizing and involvement-stimulating conferences covering the topics of Sustainable ICT and Energy. This year's theme: Sustainability, Key to Success! This new edition of An Innovative Truth - Conference on Sustainable ICT and Energy, was organized by the IIP Sustainable ICT Foundation - Platform for Sustainable ICT, together with CGI Netherlands and the GreenICT Foundation, following five successful previous editions of this event. This year, the An Innovative Truth Conference was attended by invitation only. The program featured keynotes presentations given by exclusively leading speakers and contained a plenary debate among representatives of science, government and business.
SUSTAINABILITY IS BECOMING MORE MAINSTREAM
ive years ago sustainability within and through information and communication technology (ICT) was considered an additional benefit. Nowadays, itâ€™s increasingly becoming mainstream thinking. A lot of organizations have incorporated sustainability goals in their business operations. Modern data centers are more or less energy efficient and therefore sustainable. Network infrastructure designs are, by definition, smart and ICT is used in many environments to save energy and costs. The trend is that sustainable technological developments and innovations are becoming increasingly a part of general policy in organizations: they are more common and they take an increasingly important part in the policy.
Conference chairman Roderik van Grieken and Roel Croes - Initiator and Secretary IIP Sustainable ICT Foundation
Photos by Roel Croes - GreenICT Foundation 50 NRG Magazine
Organizations make conscious, realistic trade-offs between immediate benefits and future possibilities, which are both in the field of sustainability and the commercial area. For a consistent course, it is important for any organization that the short-term and long-term sustainability goals are harmonically coordinated. We have to bear in mind that weâ€™re dealing with technology-driven environments, as it is possible that the negative impacts are being contributed mainly by technology itself. The risk is that the remedy is worse than the disease. For example, a situation in which an ICT solution uses more energy than the problem it solves, needs to be avoided.
GreenICT | An Innovative Truth
OBSERVABLE POSITIVE TREND The above mentioned positive trend is observable in science, government and business. Scientific research programs are geared to sustainability needs and sustainability criteria are fulfilling an increasing role in the evaluation of scientific research projects. The government also uses sustainability criteria more often in the policy towards citizens and its own organization. Business also capitalizes on the opportunities that the sustainability of society entails. The keynotes of the conference were good examples of the trend described. Besides technical topics, a set of non-technical (research) questions were addressed, such as regulatory issues, privacy, user psychology and pricing systems. The keynote speakers highlighted, each from his own perspective, current trends and future possibilities. Traditionally, the four involved stakeholder groups - science, government, ICT-supplying businesses and ICTapplying businesses (the energy sector) - were represented amongst speakers. Led by conference chairman Roderik van Grieken, Director of the Netherlands Debate Institute, the following speakers contributed to this successful event: Prof. Johann Hurink Professor University of Twente Robbert-Jan Stegeman CIO Alliander Joris Laponder Director Corporate Accounts Eneco Roel Croes Secretary IIP Sustainable ICT Foundation Leo Dijkstra Account Director Utilities Sector CGI Prof. Nico Baken Senior Strategist KPN and Professor Delft University of Technology Sake Algra CEO CGI Netherlands
Energy equals information. SOCIALLY SUPPORTED VISIONS During his keynote address, Professor Johann Hurink emphasized the importance of proper energy grid control with the help of scientific ICT and mathematics. As an example, he mentioned TRIANA, a three step smart grid control methodology tested live by RWE, that deals effectively with network balancing and privacy challenges. Robbert-Jan Stegeman endorsed the growing importance of information and communication technology in the energy world. During his intriguing speech, A Connected Utility - Thriving & Surviving in a Fast Changing World, he stated as CIO of Alliander: “Energy equals information”. The importance of effective data handling and the sharing of knowledge was also endorsed by Joris Laponder. Being Director Corporate Accounts at Eneco, he referred to the recently signed contract between ENECO and the NS, on behalf of the rail carriers grouped within the VIVENS cooperative. Within a few years, all electric trains in The Netherlands will be running on new green power. Interviewed by Roderik van Grieken, Nico Baken emphasized that sustainability challenges related to energy and materials are a part of a bigger picture. Pragmatic cross-sectoral thinking, as described in his manifesto, can provide durable solutions. Roel Croes was interviewed by Roderik van Grieken on the recent, actual and coming activities of IIP Sustainable ICT Foundation. One of the topics he mentioned was the theme “biobased ICT”. As sustainable ICT is mainly focused on “energy” instead of “materials”, it wasn’t very hard to draw the attention of the attendees. Biobased ICT can offer global game changing possibilities for organizations based in the Netherlands. The ICT sector offers, partly based on (future) scarcity and strategic reasons, significant opportunities for innovative use of materials. Therefore, it might be a very interesting market for the high-quality Dutch (biobased) chemical sector.
Another topic he mentioned was the portal website on Sustainable ICT & Energy, ICTgaatvoorgroen.nl - which was launched festively in the presence of high level representatives at the 2013 edition of An Innovative Truth in the Beatrix Theatre Utrecht. Right now, this portal website is fully functional and is attracting a sizeable amount of visitors each day. This portal website is handled by the IIP Sustainable ICT Foundation, as requested by, and on behalf of, the Ministry of Economic Affairs and the Netherlands Enterprise Agency.
An Innovative Truth An Innovative Truth is a noncommercial conferences formula. The purpose of this conference is to stimulate mutual cross-fertilization of science, government and business (suppliers and users) in the area of sustainable ICT & Energy and thus to promote scientifically challenging and commercially interesting innovation and research. An Innovative Truth VI Sustainable ICT & Energy Conference was initiated by GreenICT Foundation and was made possible by financial contributions of CGI Netherlands, GreenICT Foundation and IIP Sustainable ICT Foundation. For more information, visit the conference website: www.aninnovativetruth.nl
Text provided by Roel Croes Photos © 2014 GreenICT Foundation
NRG Magazine 51
Reinventing Gas | Energy Academy Europe
Reinventing GAS W
ith gas being so vital to the Dutch economy, it’s no wonder that Dutch research into the future of gas is very advanced and nowhere more so than in EDGaR, the Energy Delta Gas Research program. It’s a public-private collaboration involving universities, distribution network companies, Gasterra, Gasunie and institutes such as ECN, Kiwa and TNO. EDGar is led by its scientific director, professor Catrinus Jepma.
Catrinus Jepma is professor of energy and sustainability at the University of Groningen and professor of economics at the Open University, Heerlen. Since January 2010, he has been the scientific director of the national research program Energy Delta Gas Research. He is also scientific director of the EDIaal program of the Energy Delta Institute. Jepma has vast experience in energy policy and markets, environmental impact and policy issues, energy efficiency measures and energy technologies.
Photo by Gasunie
52 NRG Magazine
According to Jepma gas needs to re-invent itself: ‘’Gas can no longer be perceived as an independent, stand-alone fuel, but should instead increasingly be seen as an enabler in an energy system in which renewables will be dominant and which is also likely to be more decentralised. Such a system can only be reliable and affordable if you’re able to manage the balancing and back-up problems and I see no way of doing that other than with gas.’’ The thirty research projects in EDGaR focus on three themes. The first theme – From Monogas to Multigas – deals with the varying quality of gas in the future gas system. Jepma: ‘’We’ve so far been very fortunate in the Netherlands with a highly predictable gas quality from the Groningen field, but that is changing. There are now multiple gas streams entering the grid: green gas and syngases from various sources, which are controlled to have similar quality and to get rid of unwanted elements. There will also be relatively more Norwegian and Russian gas, LNG from various suppliers and in the future possibly hydrogen. This may
affect the integrity of pipes, welded joints, couplers, compressors, but also of enduser equipment, and therefore requires careful testing and research. This research serves, for instance, as input for adaptation of technical specifications and regulations both nationally and at a European level.’’ The second research theme is Future Energy Systems. Only five years ago, Jepma says, gas and electricity were two separate worlds and cultures, but slowly a shift is taking place. ‘’These two systems will become more and more integrated for the simple reason that electricity is difficult to store at large scale, and investment in transport capacity is relatively costly and sometimes cumbersome. The drawbacks of electricity are increasingly felt as the share of intermittent sources, such as wind and solar, is rapidly growing. Gas doesn’t have these problems. So the question arises - "How do we optimally combine power and gas, so that the overall energy system works best and at its most efficient?" North-western Europe is facing this integration challenge very strongly because of the rapid increase of intermittent renewable energy sources in our region. In that sense EDGaR is in the right spot.’’
Converting power into gas may help not only in dealing with the storage challenge, but also to improve transport conditions.
One element of this integration relates to the grid, Jepma explains. ‘’If we start converting power into gas and vice versa, then we may face the issue whether we invest in power cables or gas pipes. Germany is already facing this question as it has an increasing supply of intermittent wind and solar energy mostly located in the North, while industry demand is
Reinventing Gas | Energy Academy Europe
How do we optimally combine power and gas, so that the overall energy system works best and at its most efficient? concentrated in the middle and South. This energy has to be transported over fairly long distances. Converting power into gas may help not only in dealing with the storage challenge, but also to improve transport conditions.’’ The impetus for the third theme Changing Gas Markets – came from the 2006 and 2009 Ukraine gas crises. Jepma: ‘’We started realising that analytically we knew relatively little about how the European gas markets and its players exactly work, certainly after the EU liberalisation. And even less about how markets may develop in the future as markets further integrate, or in fact sometimes decentralise. The less real insight one has in market processes, the more difficult it is to, for instance, plan infrastructure investment, to regulate and control, or to try to guarantee security of supply as much as possible, especially under unforeseen circumstances. Also, the role of the current players will definitely change as the energy markets become more integrated across Europe, as they do. Add to that that other gases will enter the system and that demand patterns will change as well, and one immediately realises that all parties involved will have to redefine their positions in the future. We tried to study that to shed more light on how to timely take the necessary adjustment steps.’’ The five-year EDGaR programme ends this year and its results are being fed into national and European policy debates. But it will not be the end of gas research in the Netherlands: many interesting initiatives are underway, building on EDGaR’s work. Gas and gas research as a key element of energy research remain a focal point in Dutch and European innovation policies and there will be plenty of opportunities for Energy Academy students to get involved. NRG Magazine 53
Power to Gas | Energy Academy Europe
POWER TO GAS
Exploring the Possibilities An exciting gas project is soon getting underway in the Netherlands: the Power to Gas (P2G) facility in Delfzijl. It is a multi-partner project under the umbrella of Energy Valley. According to Machiel van Steenis, senior project manager of bio-energy at Energy Valley, it will create a link between the energy and chemistry industries.
2G is a technology that offers the prospect of integrating the electricity and gas systems. Electricity preferably from renewable sources - is used to split water into hydrogen and oxygen using electrolysis. The hydrogen that is produced is used as an input in the chemical industry, but it can also be used directly as a fuel or can be converted into methane (natural gas), opening up the possibility of storing surplus electricity in the form of gas. The unique feature of the Delfzijl project is that the oxygen will be put to good use too, van Steenis explains. “Other P2Gprojects release the oxygen into the air, but at Delfzijl it will be sold to a gasification
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installation of Torrgas. This strengthens the business case of the electrolysis, which is an expensive technology. The oxygen will be fed into an installation for gasification of bio-coal. Bio-coal is biomass that has undergone torrefaction and is much better to gasify than ordinary biomass because of its constant quality and higher energy density. Adding oxygen instead of air makes the process cleaner and more efficient, as there will be no nitrogen compounds in the flue gases.”
for the future that’s certainly a possibility. This would facilitate the development of wind energy and PV systems. It would also give renewable electricity access to different markets, because you convert power via hydrogen into chemical products. At this stage, the focus of this project is not so much on energy storage but on integrating the energy and chemical industries. It is significant for the Dutch energy landscape because when you supply sustainably produced syngas to the chemical industry, you do avoid the use of natural gas.’’
Gasification produces syngas, which is used as an input in the chemical industry. It can also be upgraded to green gas or turned into bio-LNG. Syngas contains CO2, which can be combined with hydrogen to make methane. In other words, the project results in multiple gas streams with various potential uses. “This P2G project will be the largest of its kind in the world but it’s still a demo to see whether these processes work at this scale. The use of surplus (offshore) wind power for the electrolysis is still under investigation, but
The partners in the project – Torrgas, Siemens, Stedin, Gasunie, Hanze University/EnTranCe, A. Hak and Energy Valley – signed a declaration of intent in April. If everything goes according to plan, construction of the gasification and other facilities will start next year. Van Steenis says this will take about three to six months, but to get the whole process properly up and running could take another six months.
“This P2G project will be the largest of its kind in the world.”
The 15th edition of the NRG Magazine.