The Energy Innovation Network:Fueling an Integrated Energy Future

Abstract The convergence of increasing concern about energy supply and increasing public commitment to environmental protection provides an opportunity to mobilize public and private investment in energy innovation. To tap the vast Canadian resource potential, innovative new technologies are required - to unlock the large remaining conventional oil and gas reserves, take advantage of the hundreds of years of production remaining from bitumen, coal, and coal bed methane and ensure increasing supply from renewable energy options. As Alberta's energy innovation strategy was developed, recognition grew that solutions to the pressing challenges described above emerge when we understand the energy industry as one interconnected system, integrated horizontally along the various energy sources and vertically along the value chain. This led to the creation of the Energy Innovation Network (EnergyINet) as the vehicle to facilitate strategiccollaboration and innovation among industry, governments (federal and provincial), and the research community to address the challenges of ensuring an abundant supply ofenvironmentally responsible energy. This paper describes, as an example, the approach taken in development of oil sands technologies, where a governmentindustry partnership developed to share resources, buildexpertise and lower technology risks. This provided the key tools that have lead to the oil sands becoming a significant resource relative to global energy demand. The paper argues that no one single source of energy will be sufficient to meet world or Canadian demand and consequently for the need for a collaborative initiative to facilitate a long-term (20- to 25-year) effort to implement anintegrated energy innovation strategy. This integrated approach is built on the premise that strategic investment in a balanced portfolio of energy innovation - with a focus on common technology platforms and points of leverage across the portfolio- has the greatest potential for returns in economic, environmental, and social terms. Introduction The International Energy Agency (IEA) projects that global primary energy demand to increase by 1.7% pa from 2000 to 2030, reaching an annual level of 15.3 billion tonnes of oil equivalent. The increase will be equal to two thirds of current demand1. The world will remain heavily reliant on traditional forms of energy. Though renewables are expected to grow from a low base, they cannot displace fossil fuels as the over-riding source of energy in this time scale. Fossil fuels are expected to supply over 90% of global incremental energy demand through 2030. Gas consumption is estimated to double between 2000 and 2030 in view of its cost competitiveness, ample availability and environmental advantages. Oil will remain the largest fuel source with demand increasing by 1.6% pa. Canada is the 5th largest energy producer in the world and is a net exporter of energy; these exports account for from 7 to 10 % of the GDP. Canada is a world leader in hydroelectric power development (24% of domestic consumption), but thereis limited potential for development of new hydroelectric sites. Nuclear energy (5% of domestic consumption) is declining, and there have been no investments in new nuclear facilities for nearly 20 years.