As a reminder, we're talking about electrification. We talked about two metrics of electrification, first being renewable share and electricity generation. Of the electricity being used, how much of it comes from renewables? The need to make that grow considerably from roughly 26 percent now to 86 percent by 2050, in a separate metric, how much of energy used is electricity? Twenty percent now need to be to 49 percent by 2050. Let's break down and think through the energy inputs to production. This is a confusing chart, but let me break it down because it's actually quite revealing and quite important. We'll look at a US version of this chart first and then the next chart we'll look at a global one. But US one's a little easier to understand initially because the energy situation in the US is not quite as complex as the energy situation worldwide. What we have on the left here are the inputs, the types of energy: solar, nuclear, hydro, natural gas, petroleum, oil. Here, you can see how they flow to where they're used. If we look at oil, petroleum used in the US, most of it goes for transportation, but a fair bit goes for industry as well. If we look at other technologies, energy sources, solar, nuclear, and coal, almost all of those goes into electricity generation. There's an intermediate step. Most coal is not used directly in buildings or for transportation, but almost all coal goes to this intermediate step conversion into electricity. Then that electricity flows into residential, which means buildings, commercial, which includes essentially commercial buildings from schools, hospitals, offices, and so on or industry. Natural gas, more complicated. Some of it goes to make electricity, other bits of it go directly into what are called end-use sectors, buildings or industry. Electrification is essentially making this orange piece a bigger piece of the total and backing off on the direct fuel inputs. Again, why is that desirable? Well, if the end-using sectors here, residential, commercial, industrial, and transport, move to electricity, and that electricity made from renewables, then in effect, you're running the whole system on renewables. That's a new way to think about electrification. It's increasing the electricity inputs and decreasing the non-electricity inputs at the end uses. That's a US chart. Same concept of a global flow chart. This is for all energy use worldwide. You can see a different way of portraying it, but the same concept. This one nicely breaks down these end-use sectors, industry, transport and other, which is essentially buildings, into what is actually done within those sectors. You can see most of the transport energy uses carbon is road, which are cars, trucks, SUVs and so on, that go on the road, but there's also aviation, both domestic and international, rail and other smaller ones such as pipeline transport. Industry can be broken down to iron and steel, chemical, and so on. But the concept that we talked about in the prior slide is how much of this input is electricity, which is blue here, and how much of that are the other sources? You can see, for example, the transport sector, electricity plays a relatively small role. There are a handful electric vehicles, there are light rail systems in urban settings use electricity, but it's a small piece of the pie, and the transport sector runs largely on oil. Again, electrification is moving these sectors, transport, industry, buildings, moving them from oil, natural gas, coal to electricity, and then concurrently, making that electricity from renewables. How could we do that? What are the options to do so? Well, we'll break it down by sectors. On transport, here's a summary of the electrification possibilities. Cars, SUVs, light trucks, which account for the majority of transport energy consumption. Well, we've talked about electric vehicles. The transition to electric vehicles is feasible, those technologies exist, it's underway. We've talked in detail about that. Right now, EV sales for cars and light trucks are relatively low, less than five percent, but forecast show that increasing. That seems to be an option. For the other important pieces of the transport introduced pie, a little more complicated. Not clear if electrification is going to work out. Not clear if electric only will be an option. There's essentially several challenges, but the largest challenge for electrifying big trucks, big ships, planes are the batteries themselves. They're basically too big and heavy, it's one way to think about it. Let's look at a graph that breaks that down a little bit and then we'll come back here. Let's get into some essential engineering. It's worth at least recognizing the principle here. On one axis, we have energy per unit mass. I've got a kilogram of fuel. How much electricity can that contain? Similarly, energy per unit volume, I've got a leader, a box of fuel. How much energy is in there? As you can see, liquid fuels from oil, heavy fuel oil, diesel, kerosene, petrol, gasoline are really high on both axes. If I've got, you can think of it as kilogram or a box of a leader, there's a lot of energy there. But as I move to something like batteries, it doesn't do nearly as well on either metric. Why does this matter? Well, think about an airplane as most extreme example. You're weight limited. Look at it this way, if a large airplane can only hold so much weight, and if most of that weight has to go to carry the batteries round, there's not much left for people or for cargo. Similarly for volume, if you take an airplane and fill it all up with batteries, there's no room left for the people or the cargo. That's one way to think about the technological challenge that batteries face in airplanes and the same logic applies to heavy trucks. That you've got a big truck, what is the reason that truck is there? To carry large volumes of heavy material. If a lot of the weight carrying capacity or volume is filled with a battery, there's not as much left for the stuff. You decrease the value of the truck in essence. Now, it's pretty clear that as batteries improve, they're going to move up these axes, in both axes and have higher energy. We'll call it energy mass density and energy volume density. But they're not there yet. That's a technological constraint to shifting trucks and aircraft and large ships to some degree to batteries. I'm not saying it won't be solved, but it's just not clear if batteries are ever going to be farther enough, are they going to move farther enough up this direction to compete with these fossil fuels. Now, fortunately, there are other options for big trucks, for big ships, for aircraft. Hydrogen, we talked about, biofuels are an option. It's not the case that we can't decarbonize these sectors, but it's not at all clear that we can electrify medium and large trucks, ships, and aircraft. We'll take a quick break there and talk about the other sectors.
