Lessons from Historical Energy Transitions
for Addressing Climate Change andSustainable Development
arnulf.grubler@yale.edu
RITE International Symposium 2012, Tokyo, February 7, 2012

Energy Transitions: PastSource: adapted from V. Smil, 1994

Energy Transitions: Present (unfinished business)

Source: Global Energy Assessment (GEA) KM1, 2012 (in press)

UK Energy History
A positive feedback loop driven by energy service demand & innovation
Innovation and LbD:
UK efficiencyof energy service
efficiencyof enduseprovision

Population and IncomeUk Population and GDP
10000

50000

10030000
1002500020000
15000

GJ PE per GJ or per service level

35000

US$2005 GDP per capita

40000
1000

heating-domestic GJ PE/GJ

10

power-average GJ PR/GJ

Population Million
GDP Billion US$2005
GDP/capita US$2005/cap

transport-passenger
GJ/10e3pass-km
lighting GJ/10e6 lumen-hrs

1

10
10000
5000
1
1800

0
1825

1850

1875

1900

1925

1950

1975

0.1
1800

2000

UK energy service (final energy) demand

8

4

20
1 9 17 25 33 411850
49 57 65 73 81 89 1900
97 105 113 121 129 137 145
153 161 169 177 185 193
201 209
2000
1800
1950

1850

1875

1900

1925

1950

1975

2000

100,000

US$2005/GJ or per units service level6lightfreight-transportpassenger-transport(mechanical) powerheat-industry
heat-domestic

1825+Market growth and LbD:
service prices (per current GJ FE)
cost Uk
ofenergy
energyservices

Energy service demands

EJ

Million population, Billion US$2005 GDP

45000

10,000heating-domestic $/GJ
1,000

100

power-industry $/GJ
transport-passenger $/500
pass-kmtransport-freight $/250 ton-km
lighting $/5000 lumen-hrs

1011800 1825 1850 1875 1900 1925 1950 1975 2000

Source: Global Energy Assessment (GEA) KM1, 2012 (in press)

UK – Transitions in Energy Services for Light
1.0

Δt= +76 yrs
Δt= -76 yrs

Δt= -25 yrs

Δt= -126 yrs

Source: Grubler (in press) based on Fouquet, 2008.

Δt= +25 yrs

Energy Transitions - Climate Protection & Sustainability• End-use (efficiency) and consumer benefits are key• Innovation is key but needs to be leveraged
systemically and stably• Deep uncertainty requires risk hedging (adaptation)and innovation portfolio approach• Powerful patterns: scaling, experimentation,
learning

Importance of Energy End-use• Least efficient part of energy system• Vast improvement potentials• Dominant in terms of installed capacity• Dominant form of energy investment(and GDP & employment multipliers!)Capacity of US Energy Conversion
Technologies
GW (rounde d)

1850

1900

1950

2000

sta tiona ry the rm a l (furna ce s/boile rs)
e nd-usem e cha nica l (prim e move rs)
e le ctrica l (drive s, a pplia nce s)

300
10

900
1020

1900
70
200

2700
300
2200

50300120
3300

260
25000

000

10
38260
70
520

2600
800
1280

306

981

6440

35140

mobilee nd-usea nim a ls/ships/tra ins/a ircra fta utom obile s

sta tiona ry the rm a l (pow e r pla nt boile rs)
suppplym e cha nica l (prim e move rs)
che mica l (re fine rie s)
TOTAL

Energy end-use = 30 TW or 87% of all energy conversion technologies= 5 TW or 50% when excluding automobiles
Source: GEA KM24, 2012

World Energy Technology Innovation
Investments (Billion $)innovation(RD&D)

marketformationdiffusion

End-use & efficiency
Fossil fuel supply
NuclearRenewables
Electricity (Gen+T&D)
Other*
Total>>8>12>10>12>>1>>4>50

5300-3500>>2200-550
03-8~20>20~100450-520<15n.a.
<150 1000 - <5000

non-OECD~20~30~400 - ~1500

non-OECD share>40%<20%40% - 30%* hydrogen, fuel cells, other power & storage technologies, basic energy research

Source: GEA KM24, 2011

Innovation Systems• Change requires systemic approach invoking
all innovation phases and processes:- R&D, niche markets, diffusion, obsolescence- learning, actors/institutions, resources,technology (hardware+software)• Important biases at all stages:
R&D: supply side bias (nuclear, fossil)
niche markets: supply side bias (solar/wind)diffusion: huge distortions via fossil fuel subsidies
obsolescence: “grandfathering” of old/”dirty”• Few systemic approaches & successes

The Space of ETIS
Energy system component(technologies)

Innovation life cycle stage
R&D

Niche
Diffusion
Markets

Phase-out

End use(energy services)
Conversion (tofuels/electricity)
Supply(Resourceextraction)

Levels of investment & capital depreciation

Current Public ETIS Policy Focus(policy-induced resource mobilization, billion US$2005)

Source: Wilson et al., (in press)

US Solar Thermal Virtuous Development Cycle 1982-1992

Source: GEA KM24, 2012 based on G. Nemet, 2011

Japan: Efficiency Improvements
Top-Runner Standard vs Actual Achieved“Top-Runner”: Joint industry-government dynamic standard setting that incentivizes innovation
Source: GEA KM24, 2012

Patterns of Technological Change• Learning (unlearning): improvements contingent onmarket deployment (with uncertain outcomes)
Importance of granularity and continuity (knowledge
depreciation)• Scaling (5 phases in all successful technologies)
Importance of prolonged early experimentation atsmall unit scales• Catch up (late-starters with faster diffusion)
Importance of learning and international technology
collaboration

Post Fossil Energy Supply Technologies Cost Trends

Source: GEA KM24, 2012

Explaining the Doubling Price (750 to 1500 $/kW)
of US Wind Turbines (US$/kW)
2002-20082009-2010

Endogenous+376-37Labor costs*+91+12Warranty/Profits**+101-98

Scaling-up+184+57

Exogenous+219-53

Material/energy costs

+83

-38

Currency fluctuations

+136

-15

Residual+155-105

Total price change+750-195

Source: Bolinger&Wiser, 2012. * denotes potential underestimates (accounting for residual)

Learning rates and cumulative experience(# of units produced/sold) for energy technologies
category technology

data for: cumulative production (units) learning# exp
period rateenergyend-useWorldWorldWorldWorldWorldWorldWorldWorldWorldUSUS
USUSUSTransitors
DRAMs
Automobiles
Washing machines
Refrigerators
Dishwashers
Freezers (upright)
Freezers (chest)
DryersHand-held calculators
CF light bulbs
A/C & heat pumps
Air furnaces
Solar hot water heaters>1>1>2>2>2>6>6>5>3>4>4>1>1>1

average for end-use technologies
energysupply

PV modules
Wind turbines
Heat pumps
Gas turbines
Pulverized coal boilers
Hypropower plants
Nuclear reactors
Ethanol
Coal power plants
Coal power plants
Gas pipelines
Gas combined cycles
Hydrogen production (SRM)
LNG production

WorldWorldS, CHWorld
WorldOECDUS, FranceBrazil
OECD
USUSOECDWorldWorldaverage for suppy technologies
average for supply, excluding nuclear

10^1810^1110^910^910^910^810^810^810^810^810^810^810^810^610^9>1>1<1>4>6~5<1<1<1<1<1<1>1>110^1010^510^510^410^310^310^310^310^310^310^310^310^210^210^4

1960-2010
1975-2005
1900-2005
1965-2008
1964-2008
1968-2007
1970-2003
1970-1998
1969-2003
early 1970s
1992-1998
1972-2009
1953-2009
1974-2003

40
16 - 24
9 - 14
33 ±9
9 ±4
27 ±7
10 ±5
8 ±2
28 ±7
30
16
18 ±1
31 ±3
-3

20
1975-2009
18-24
1975-200910-17
1982-2008
2 - 21
1958-1980
10-13
1940-2000
61975-1993
1
1971-2000 -20 - -47
1975-200921
1975-1993
8
1950-1982
1-6
1984-19974
1981-1997
101980-2005
27
1980-2005
14812

Knowledge Depreciation Rates

Degree of knowledge stock turnover(policy & human capital volatility)

Degree of technological obsolescence (rate of innovation)

Knowledge Depreciation Rates (% per year)
empirical studies reviewed GEA KM24 (2012) andmodeled R&D deprecation in US manufacturing (Hall, 2007)
Degree of technological obsolescence (rate of innovation)

Low

HighEngineering
designs US:<5%

Degree of knowledge stock turnover(policy & human capital volatility)

PV Japan:
OECDWind US: nuclear R&D: 30%
10%
10 – 40%
Computers:
Chemicals,
32%
Drugs:
Electrical,
15-20%
Aircraft,Miscell. Machinery:
Liberty ships
32-36%>20%manufct. US:
France40%
breeder reactors:
50-60%
Serviceindustries:95%
High

IEA Energy R&D Trends: Boom-and-Bust Cycles(Million $PPP2010)
BRIMCS: ~18,000

10000

Energy R&D 2010 US$ (PPP)

9000
8000
7000
6000

USA

5000

EU-6
Japan

4000

rest-IEA

3000
2000
1000
0
1970

1980

1990

2000

2010

Robust Patterns in Technology Growth• Distinct phases:
Long experimentation (3 decades) atsmall unit scale before successful scale-up• Market size and growth periods related:
big hits require time (many decades)• Advantages of late-adopters:
learning and acceleration, but needintegration into knowledge networks

5 Phases in Scaling-up of a Technology:
Example Coal Power Plants (Source: C. Wilson, 2009)

3: build many (large) units
World Coal Fired Power Plants

1500

World coal power plants

200
avg size

1250
cum capcity GWcap. additions GW

180

max size160

scale frontier

40

1000
30

numbers built

100
80500

numberMW

120

750
20500

GW capacity added1000

cum GW installed

140

60
1040250

2001900

1925

1950

1975

02000

1: build many (small) units
2: scale-up units:
2.1. at frontier
2.2. average01900

1925

1950197502000

4: scale-up industry
5: grow outside core markets(globalize)

Market Size (normalized index) vsDiffusion Speed (Δt) of Energy Technologies

Source: C. Wilson, 2009, e-bikes courtesy of Nuno Bento, IIASA, 2011

Scaling patterns Past and Scenarios (GGI)(8 Scenarios: A2r/B1/B2 * base/670/480)
Cumulative Total Capacity (OECD): normalised K vs Δt
ALL TECHS: HISTORICAL & SCENARIOS - semi-log
1.E+07SCENARIOS (All Techs)• Scenarios are
more conservativeHistorical (Core)as durations (andHistorical (Core) extents) increase
POWER only - no WIND

Normalised K (index)

1.E+06

1.E+05

1.E+04
Expon. (SCENARIOS (AllTechs))
1.E+03

Expon. (Historical(Core))
1.E+02

Expon. (Historical(Core) - POWER only no WIND)
1.E+01

1.E+00

025

50

75

Δt (yrs) of cumulative total capacity

100125• Again: closer
relationship justfor power techs
historically dotted blackline

Mixed Impact of Policies• Significant “de-acceleration” since 1970s(inconsistent policy “push and pull”)• Success stories when policies are:aligned, patient, systemic, and dynamic
e.g. Japan, Brazil vs. US• Systemic underinvestment in end-use andefficiency: ALL actors• ETIS increasingly global, but too few internationaltech cooperation

World – Historic Primary Energy Transitions(changeover time Δt: 80-130 years)
World Primary Energy Substitution

Begin of energy policy focus:
Δt’s >2000 yrs

100

modern fuels:
oil, gas,electricity

Percent in Primary Energy

traditional biomass
Δt -130 yrs

75

Δt -80 yrs

50

coal
25

Δt +130 yrs
Δt +90 yrs
01850

1875

1900

1925

1950

1975

2000

2025

Source: GEA KM24, 2011