a) Effective emission reduction policies must be immediately agreed upon and implemented at global level;

b) A number of emerging low-carbon technologies must be deployed worldwide over the next 20 years.

Although rather expensive, some emerging technologies (e.g., wind and solar energy, biomass for combined heat and power, 3^rd generation nuclear power plants, efficient end-use devices) are already being commercialised and entering the market to a significant extent. Others, such as carbon capture and storage (CCS), 2^nd generation biofuels, low-carbon vehicles, are still under development. We do need all these technologies as each of them can make a significant contribution to reducing emissions, but no one is decisive to achieve the mitigation objectives.

The two conditions above are challenging: A global climate policy agreement is the ambitious objective of the 15^th Conference of the Parties of the United Nations (December 2009, Copenhagen); A timely, widespread deployment of emerging low-carbon technologies will depend on policy measures and financial incentives, and on the ability of industry to overcome technical hurdles and reduce technology costs. Missing one of the two conditions could either jeopardise the mitigation process or result in unsustainable mitigation costs.

In this context, to secure our energy and climate future we need to search for cost-effective breakthrough technologies[4] that hold the potential to revolutionise the energy sector. Most such technologies are in early stage of development and require advances in basic science to emerge from labs. They are not included in current energy projections, but already attract industrial interest because of their potential to drive - in a few decades - radical changes in the way we generate and use energy.

In a time of urgent action, economic crisis and budget constraints, we need to focus our effort on most promising options. High-level, authoritative scientific frameworks can play a key role in selecting realistic targets from technology dreams or options that may only have an impact well beyond the timescale available for climate change mitigation.

1. The IEA ETP Study

If the conclusions of the Intergovernmental Panel on Climate Change (IPCC, 2007) are correct, to avoid major climate changes and significant increases of the global atmospheric temperature we need to reduce global emissions of greenhouse gases (GHG) by more than 50% by 2050.

A number of authoritative studies are available on how to reduce GHG emissions from the energy sector, the most important source of CO2 emissions. One of the most detailed analyses focusing on energy technologies is Energy Technology Perspectives 2008 by the International Energy Agency (IEA ETP 2008, lead author Dolf Gielen).

Based on a partial-equilibrium model (Markal) of the world energy system - including energy trading between geo-political regions - and on a detailed energy technology database, the ETP study analyses the competition between current and future energy technologies in the global market and determines – over time and on a regional basis - the energy and technology mix that satisfy the energy demand at the minimum cost.

The ETP study includes two basic scenarios with 2050 time horizon:

· ACT - Global energy-related emissions are returned back to the current (i.e., 2005) level by 2050 and the CO2 concentration in the atmosphere is stabilized at the level of some 520 ppm, (corresponding to a global temperature increase higher than 2.4°C, IPCC 2007);

· BLUE – Global energy-related emissions are reduced by 50% over the current level by 2050 and the CO2 concentration in the atmosphere is stabilized at the level of some 450 ppm (corresponding to a global temperature increase between 2.0°C and 2.4°C, IPCC 2007).

In addition to the basic scenarios, the study includes a number of variants to explore uncertainties on the development of emerging technologies as well as regional diversification of mitigation strategies, e.g., accelerated penetration of nuclear power, delayed or reduced penetration of either energy efficiency or renewable and carbon capture & storage technologies, as well as accelerated deployment of efficiency in transport, electric and fuel cell vehicles. The study determines the level of emissions associate to each scenario.

Conceived in 2007-2008, an important characteristic of the ETP study is that its basic assumptions on energy prices (e.g., basic long-term oil price of $60-65/bbl) were not influenced by the 2008 energy price peak, nor by the current economic crisis. However, ETP does include the significant cost increase of energy technologies (roughly, a factor of two) that occurred during the current decade - in particular between 2004 and 2008 - as a consequence of higher material prices and sharply increasing demand for energy technologies in emerging economies. Whether and to what extent such an increase was partially driven by speculation and/or by unprecedented demand for energy technologies (same as the oil price peak in mid 2008) and whether it could be mitigated or offset by the economic crisis is currently matter of analysis.

In very summary (Table 1), the conclusion of the ETP study is that the mitigation of the energy related emissions is technically and economically achievable assuming an immediate global commitment at governmental level and the urgent deployment of a number of emerging low-carbon technologies, including early-stage technologies with significant R&D and cost uncertainties.

Table 1 - Summary of the ETP 2008 Basic Scenarios

The mitigation is technically achievable because low-carbon technologies to reduce CO2 emission are presently available, although at average cost higher than the cost of current energy technologies. It is also economically feasible because in the most ambitious scenario (i.e., BLUE), the global, cumulative investment to mitigate emissions amounts to some US $45 trillion over the period 2010-2050, equivalent to 1.1 % of the global GDP. This is an additional investment with respect to the baseline scenario. Some 80% of this effort would be invested in end-use energy technologies and it could be substantially compensate for by savings in fossil fuels use, depending on discount rate assumptions. The mitigation effort would require a global governmental commitment as more than 65% of the cumulative energy-related emissions (Table 1, BLUE) is expected in non-OECD countries.

2. The Technology Challenge

The mitigation process does also require the urgent deployment of a number of emerging low-carbon technologies because many technologies can make a significant contribution, but no single one alone is decisive for achieving the mitigation objectives. In both the ACT and BLUE scenarios (see Figure 1), important emission reductions are obtained from the deployment of highly-efficient technologies in all the energy sectors, including power generation, transport, buildings and industry; from carbon capture and storage (CCS) technologies; from generation III and IV nuclear reactors; and from renewable technologies either commercially competitive (e.g., wind power) and in early deployment (e.g., solar photovoltaic and concentrating solar power) or under demonstration (e.g., 2^nd generation biofuels from ligno-cellulosic feedstock). In the most ambitious BLUE scenario, significant contributions are also provided by electrical vehicles and by hydrogen-powered fuel cells vehicles.

Figure 1 – Technology Contribution to CO2 Abatement in the ETP Scenarios

Considering that CCS technologies are currently under demonstration, with commercial deployment expected beyond 2020, that the availability of fuel cell vehicles cannot realistically expected before 2020, that Gen-IV nuclear reactors will be available on the market beyond 2030, and that other technologies such as wind, solar power and biofuels must be deployed at unprecedented rates to achieve the mitigation objectives (Figure 2), it is clear that reducing the CO2 emissions in the energy sector (in particular in the BLUE scenario) is technically feasible, but implies very significant - if not unprecedented - technology challenges. A number of emerging low-carbon technologies should be urgently developed and commercialized in order to peak the emission growth and start the reduction process as soon as possible (after 2012, in the BLUE scenario).

Figure 2 – Ambitious Technology Deployment Rates and Targets (GW) in the BLUE Scenario

3. The Economic and Cost Challenges

Not least is the economic challenge. Many low-carbon technologies offer negative CO2 abatement costs (actually, business opportunities) as the fossil fuel savings exceed the incremental cost of the new technologies over the conventional ones. This is the case for many efficient technologies in the end-use sectors (see Figure 3). However, most low-carbon technologies imply positive CO2 abatement costs and a net additional cost for the energy system as the fuel saving does not compensate for the incremental cost of the new technologies. This applies, for example, to CCS in power generation, to most renewable technologies, and - to a large extent - to CCS in industrial processes and to fuel cell vehicles.

In the ACT scenario, the marginal CO2 abatement cost does not exceed $50/tCO2. In the BLUE scenario the marginal cost is $200/tCO2 under optimistic assumptions on technology development and cost reduction over time, and rises up to $500/tCO2 if these assumptions are less optimistic. For comparison, the current CO2 price in the European Emission Trade System is some €14/tCO2.

Figure 3 – Marginal CO2 Abatement Costs in the ETP Scenarios

An important consideration in the evaluation of the ETP results is that an oil price increase of $10 per barrel translates into an economic incentive to the CO2 abatement of some $25 per tCO2. As a consequence, under the ETP oil price assumption ($60-65/bbl), the CO2 abatements at $200/tCO2 in the BLUE scenario come out for free when the oil price reaches the level of $140-$145/bbl (June 2008).

As mentioned above, in both the ACT and BLUE scenarios the global incremental investment in low-carbon technologies may be substantially offset by the fuel saving depending on the assumptions on the discount rate. However, the financial needs to implement the mitigation strategies (i.e., $ 0.1-0.3 trillion per year for R&D and technology learning in the short- to mid-term, and $ 0.5-2.0 trillion per year for deployment and commercialization over the long-term) and the burden sharing between geopolitical areas remain as critical negotiation issues (upcoming United Nation Conference of the Parties, 15^th CoP - Copenhagen, Dec. 2009).

The key element is the high cost of most emerging low-carbon technologies if compared with the current technologies. The ETP study builds on the expectation that the investment costs of these technologies will decline over time as a result of technology learning, industrial production and economy of scale. The emerging technologies will therefore be competing with cheaper fossil fuel technologies in the global energy market. The capital cost of key renewable technologies (see Figure 4) is currently well above some $3000/kW, but it is projected to decline to below this threshold. Significant cost reductions are also projected for CCS, for Gen-IV nuclear power plants and for efficient end-use technologies. The faster the cost reduction for emerging technologies the lower the cost that Governments and tax payers must bear in form of carbon taxes, cap & trade and incentives, to support the deployment of such technologies.

The process of cost reduction by technology learning (R&D and industrial learning) usually characterizes the new technologies when they move from labs to market. The process slows down or disappears when the technologies reach a certain level of deployment and maturity. As matter of fact, on-shore wind power offers limited cost reduction opportunities while PV power still offers significant further potential. In addition, the more the technical complexity of a technology (e.g., number of components and sub-systems), the less the potential for cost reduction. Therefore, as the CCS technology does increase the complexity of mature technologies such as coal- and gas-fired power plants, we cannot expect dramatic cost reduction in that area. Similar considerations apply to nuclear.

Figure 4 – Current and Projected Investment Costs of Energy Technologies

4. Beyond Emerging Low-Carbon Technologies ?

Important cost reductions may be driven by major technology or material breakthroughs, e.g., moving from silicon PV to thin-film PV. Actually, basic and material sciences are currently exploring a number of breakthrough technologies that hold the potential to change the way we generate and use energy while promising short-term advances (2015-2020) and low-cost prospects. For example (see Figure 4), new generation photovoltaic cells (including organic PV) promise manufacturing cost below $1000/kWp within a time span of 10 years. Similarly, fuel cells producers are confident to be able to produce in ten years from now fuel cells for automotive applications at cost of some $100/kW that will compete with conventional internal combustion engines.

Apart from these two examples – not necessarily the most promising ones – other breakthrough technologies with different level of development include e.g., membranes for CO2 capture; microalgae for biofuels production; photo-electrolysis; artificial photo-synthesis; marine energy technologies; high-temperature solar dishes; advanced fast-breeder reactor concepts; energy-storage technologies; devices for portable power; power electronics; organic leds. Some such technologies are in early stage of development and require advances in basic sciences to emerge from labs. While most of them are not included in the current energy projections because of their early stage, some already attract private and public investment because of their potential to drive - in a few decades – a technology revolution in the energy sector.

Recently, in sectors other than energy, we have seen new technologies to replace in a few years mature technologies and infrastructure, and radically change our habit (e.g., mobile phones, 1990-2005). These revolutions were not anticipated by technology projections and required neither governmental incentives nor implementation policies to conquer the market. They have simply offered new services to consumers and required Governments to implement regulation policies.

The basic question is whether we can image and design an energy and a climate future other than the challenging way depicted in the current energy scenarios and whether focused scientific communities can help select the most promising technology options and lead the development process as it did happen in the discovery of the nuclear energy.

References

- International Energy Agency - Energy Technology Perspectives 2008 (IEA-OECD 2008)

- International Energy Agency - World Energy Outlook 2008 (IEA- OECD 2008)

- European Union Strategic Energy Technology Plan (EU SET Plan, 2008)

[1] ENEA: Italian National Agency for New Technologies, Energy and Environment

[2] IEA: International Energy Agency (IEA OECD, Paris)

[3] IPCC: United Nations Intergovernmental Panel on Climate Change

[4] e.g.: Highly-efficient, low-cost PV; Membranes for CO2 capture; Microalgae for biofuels; Photo-electrolysis; Artificial photo-synthesis; Low-cost fuel cells; Marine energy; High-temperature solar dishes; Gen IV fast breeders; Adv. energy storage; Portable power; Piezoelectric devices, Power electronics; Oled lighting; etc.