Copyright © 2009 Accenture. All Rights Reserved. Accenture, its logo, and High Perf ormance Delivered are trademarks of Accenture. Betting on Science Disruptive Technologies in Transport Fuels Marzo, 2011
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Betting on ScienceDisruptive Technologies in Transport Fuels
Marzo, 2011
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Report objectives and scope
Evolution
•Next generation internalcombustion engine
•Next generation agriculture
•Waste to fuel
•Marine scrubbers
Revolution
•Sugar to diesel
•Butanol
•Biocrude
•Algae
•Aviation biofuels
Game Changer
•PHEV engines and batteries
•Charging
•Vehicle to Grid
12 Technologies 25 Companies 10 Markets
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The Study – Assessment methodology
• For a technology to be considered “disruptive”, it needed to meet the following criteria:
– Scaleable: Greater than 20 percent potential impact on hydrocarbon fuel demand by 2030.
– GHG impact: Savings greater than 30 percent relative to the hydrocarbon it is replacing.
– Cost: Competitive at an oil price of $45 to $90 per barrel, at commercial date.
– Time to market: Commercialization date in less than five years.
• Technologies were divided into 3 groups
– Evolutionary: Technologies that stretch today’s assets and resources.
– Revolutionary: Technologies that support the creation of fungible fuels, enabling the use of the existingdistribution infrastructure.
– The game changer: Electrification and the technologies that are needed for the scale-up of PHEVs and to enablethe opportunities that PHEVs could bring in optimizing generation and transportation resources.
2
“80% of the most important data/content is in the minds of the
scientists in the companies and research centres (not in papers)”
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9 Key Messages
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Key Message #1: The improvement potential of manyexisting technologies is underestimated
• Increasing yields withoutsignificantly increasing land use
• Rewarding improvements in waterand energy use
• Supporting the use of waste tocreate energy or fuel
• Continuing roll-out of higher-efficiency standards
Corn Yield Trends
(Bushel Per Acre)
1990 2000 2005 CAGR
World Average 59 70 75 13%
USA 113 137 149 15%
Argentina 60 93 109 35%
China 74 78 80 4%
Brazil 33 47 54 28%
India 23 29 31 16%
Sub-Saharan Africa 22 24 25 7%
Source: Ceres, Monsanto/Doane Forecast
“Already, farmers in Iowa are producing as many as 200 bushels an acre. Mr Grant (Monsanto’s
COO) believes that 300 bushels are achievable by 2030” Source: “The parable of the sower”, Nov 19th 2009 ST LOUIS, From The Economist print edition
“I do think 300 is attainable as a national average. Using corn, cobs and a portion of the stover
we should be able to yield over 1000 gallons of ethanol per acre - as opposed to 450 today”
Source: Accenture interview with farmer/ethanol producer
Copyright © 2009 Accenture All Rights Reserved.
Key points:
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Both sugarcane and corn will continue to improve significantly,in yield, water and energy use
Copyright © 2009 Accenture All Rights Reserved. 5
POET: 80% reduction in water use in the last 20 years and 33% reduction in energy in the last 12
Brazil cane yields have increased 1.3% CAGR since 1992
Water use vs. Ethanol production (POET plants)
Natural gas use in ethanol production
Brazil sugarcane yields (MT/Ha)
30
40
50
60
70
80
90
100
2008200620052004200320022001200019991998 2007 200919941993 19961995 19971992
Weighted avg. Yields (1.3% CAGR)
S-C (1.3% CAGR)
N-E (1.0% CAGR)
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Key Message #2: Biotechnology is transforming biofuel production
Wider Applications Of Genetic Engineering
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Examples (non-exhaustive):
• Genetically engineered feedstocks thatincrease the yield density and reduce theintensity of pre-treatment and required enzyme
• A “diesel” solution through synthetic biologythat allows sugar cane to be converted into a
clean diesel
• Bacteria and yeast are being selected andengineered to produce more selective, higheryields of butanol, and to have higher toleranceto inhibitors and the end-product
• Genetically modified algae that have higher
yields and are lower cost to cultivate, harvestand extract
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Key message #3: Algae could exponentially increaseavailable feedstock
Table 1. Comparison of algae and soybean resource requirements
*Based on algae grown in open ponds with daily productivity of 10 grams/m2 with
15 percent triacyglycerol (TAG).
Copyright © 2010 Accenture All Rights Reserved. 7
• The addition of algae used as feedstock, with its incredibly high yields,changes the game on potential biofuel feedstock availability
• Algae is a diverse and complicated landscape and still 10+ years away
Soybean Algae*
Gallons oil/year 3 billion 3 billion
Gallons oil/acre 48 1,200
Total acres 62.5 million 2.5 million4%
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Key message #4: There will be increased activity in theairline and marine industries on options to reduce GHG
• Global industries with strong industry bodiesand are difficult to regulate at a market level
• Aviation is moving much faster than expected-streamlining of ASTM approval process,commitment of airbus, boeing and enginemanufacturers, airlines
• Aviation biofuels and marine scrubbers are notcommercially competitive to traditional fuelstoday, and will be additive to what is beingdone today
• For aviation, there is a question of whetherthere will be enough biofuel feedstock to
meet both the road and air biofuel demand
• For marine, a further constraint is when improvements can be made to existing fleetsand how often ships are replaced
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Examples that could accelerate the development of aviationbiofuels
Source: Accenture research
Comments from Airline Interviews
• Volume “ … we are hoping that some 5-10% of our aviation fuel portfolio will be biofuels. By 2020 we expect this percentage to haverisen to substantial levels.”
• Blend. “...focusing their efforts on Biofuels that can be blended into existing oil-derived aviation fuel or that are organic replications...”
• Industry. “This must be an industry change – even big airlines at any one location form a small part of airport operations and cannotafford to have their own infrastructure of fuels delivery, storage, etc.”
• Hubs. “There is potential for some hubs to grow disproportionately, linked to their favourable access to Biofuels. It would make sense incertain countries for state-owned carriers, airports and national oil companies to link up to enable this to happen.”
• Portfolio. “Airlines will manage a portfolio of routes … some flights may never use Biofuels, others that start or end at a Biofuels hub willuse a large proportion of fuel derived from Biofuels…”
Neste Oil has started up the world's largest renewable diesel plant in SingaporeNovember, 2010. Production of NExBTL renewable diesel will be ramped up on a phased basis. The 800,000 t/a plant was completed on-schedule and on-budget and marks a major step forward in Neste Oil's clean traffic fuel strategy
SkyEnergy
• Manufactured almost 6,500 gallons)• Started production of approximately 190,000 gallons for the US
Navy and approximately 400,000 gallons for the US Air Force /USDefense Energy Support Center (DESC
“Camelina-Based Biofuel Breaks Sound Barrier on
U.S. Air Force F-22 Raptor Test Flight “
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Key message #5: PHEVs - Batteries are the “feedstock” ofelectrification and constrain its potential
Battery/ Energy storage Vehicle Examples of Players
Lead acid EV JCI (Johnson Controls)
Nickel metal hydride HEV Panasonic (Prius)SanyoCobasys
Nickel zinc HEV PowerGenix
Lithium-ion (hard
carbon - HC)
EV, small
HVPHEV
EnerDel
Lithium-ion (lithiumtitanium oxide – LTO)
HEV EnerDel
Lithium-ion (NCA -nickel-cobalt-aluminum)
EV, HEV,PHEV
Saft (joint venture withJohnson Controls)
Toyota
Lithium-ion (Mn Spinel,natural graphite)
EV, HEVPHEV
LG ChemAESC
Lithium iron phosphate(LiFePO4)
EV, HEVPHEV
BYD
Lithium nanophosphate(Li4Ti5O12)
EV, HEVPHEV
A123
Ultrabattery (R&D) CSIRO, Australia
Ultracapacitors (small) EV EEStor (Zenn MotoCompany)
Many PerformanceFactors
• Energy density
• Power density
• Cost/kWh
• Life cycle
• Recharge time
• Safety
Many (Lithium)Challenges
• Expensive
• Scarce (Bolivia,Chile, China)
• Productionconcentrated in3 countries (Japan,South Korea, China)
• Combustible
Many Batteries, but pipeline beyond lithium for PHEV/EV is small
10Copyright © 2009 Accenture All Rights Reserved.
“500/ kWh in 5 years” – Matt Rogers at theBaker Institute event on 26 January, 2010
Accenture estimated $500/kwh in 2025, nowrevised to 2020 but this is still 5 years behindthat number
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Key message #6: PHEVs - Electrification heralds two keyplayers in transport fuels—utilities and battery manufacturers
Many Diverse Players across the Electrification Value Chain
Generation Smart GridBattery
storage
Charging
Infrastructure
Comms
Infrastructure
Plug-in
Electric
Vehicles
Billing
System
Generation Distribution Retail
• A123 Systems
• LG Chem
• NEC
• Coulomb Technologies
• GridPoint
• Nu Element
• ECOtality
• Coulomb Technologies
• GridPoint
• Nu Element
• ECOtality
• Tesla Motors
• Th!nk
• G-Wiz
• Duracar
Utilities UtilitiesUtilities
Municipalities
More than 15 pilots in 14 countries testing• Capabilities• Roles of different players• Infrastructure requirements• Technology• Regulation and market models
Different combination of players in each pilot
Different elements of the electrification value chain
Different operating models
Copyright © 2009 Accenture All Rights Reserved.
Coming Jan 2011
The Electrification ofTransport Pilots
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Key message #7: At least in the next five years, possibly even 10,PHEV scale up is not dependent on comprehensive “smart” grids
PHEV PHEVs commerciallyavailable butconsumer up-takelimited given highbattery costsunderminingeconomics
PHEVs with V2G capabilityincreasingly piloted
PHEVs with V2G capabilityintegrated into the SmartGrid tested
Battery Build up of battery
manufacturing capability andramping down of costs
Impact of V2G on battery
tested
Charging Smart charging units forPHEVs being deployed,charging PHEVs at levels I andII (i.e. between 4-10 hoursdepending on battery SOC)
V2G Vehicle-to-Grid technologybeing researched atuniversities and tested on asmall scale
AutoPort releases initial(limited) production line
V2G integration to the Smart Gridincreasingly tested
Battery Cost(no subsidies)
<5 Years 5-10 Years 10-15 Years
Years to integrated value chain
15+ Years
$1300/kWh $500/kWh
Lowerbattery costs
meansPHEVsbecome
moreeconomically
attractive
Battery chemistry improvesenabling faster charging time
Smart charging stations beingpiloted and tested
Limitedsmart
chargingstationsdeployed
Chargingstationswith V2Gcapability
tested
Econo-mically
competitiveV2G-
capablePHEVs
integratedinto the
grid
Smart Grids beingdeployed
Combined steps Cumulative/ ongoing12Copyright © 2009 Accenture All Rights Reserved.
$500/kWh
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Key message #8: Technologies and assets will be combinedand will evolve because the lines between them are gray
• Custom application of novel technologies(e.g. synthetic biology) for multiple,differing processes
• Maximising the opportunity to leverageexisting assets (e.g. retrofit, co-production)
• Combining biochemical andthermochemical processes
• Recognising that technologies or practicescan be leveraged across multiple
pathways (e.g. pre-treatment)
1st and 2nd
POET’s Project Liberty – Emmetsburg, Iowa
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Key message # 9: The trajectory of supply, demand andGHG footprint of transport fuels is being reshaped now
<5 Years 5-10 Years 10-15 Years 15+ Years
Internal CombustionEngine
• OEM developments(e.g. VW Bluemotion
• New gasolinetechnologies entermarket
• 100mpg test car
• Very efficient gasolineengines
Biofuels • 1st AND 2nd
• Waste to fuel
• Butanol
• Sugar to diesel
• New energy crops
• Biocrude
• Biorefineries
• Advanced enzymesand deconstruction
• Algae
• Combined
pretreatrment,deconstruction andpossibly evenconversion steps
Electrification • PHEVs becomecommerciallyavailable
• Batteries improve
• Fast charging pilotedand tested
• Scale-up starts • V2G
Aviation • Trial flights anddebate continues
• Slow and limited roll-out of small blends
• Expansion ofproduction
• Roll-out at one ormore hubs
• Volumes increase
Marine • Scrubberscommerciallyavailable but limitedtake up as regulationnot enforced
• Lighter, more efficientscrubbers
• Start to integrate intoship design
• Economicallycompetitive scrubbers
• Wider deployment
• Volumes increase
Evolution is cumulative, new technologies are added but existing ones continue to beimproved
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Copyright © 2009 Accenture. All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Muchas Gracias!