Energy efficiency in our operations
We aim to be net zero on emissions generated by all our operations by 2050 or sooner, as well as on emissions associated with the energy we need to power them. To help us achieve this, our production sites are increasingly using lower-carbon energy sources. Shell’s Renewables and Energy Solutions business (formerly New Energies) is playing a key role in developing these.
Greenhouse gas emissions (GHG) from making our products that cannot be avoided – through energy efficiency or using lower-carbon fuel – will be balanced using technology or carbon offsets that avoid emissions or remove them from the atmosphere.
Boosting efficiency and cutting emissions
Our chemical plants continue to work on improving energy efficiency and reducing GHG emissions. In 2020, we announced that we will install eight new cracker furnaces at our Moerdijk petrochemicals complex, replacing 16 older units. This is expected to reduce the site’s energy consumption, and lower GHG emissions by around 10% compared with 2019.
We are building a power plant at our Rheinland refinery in Germany that is expected to lead to a reduction of around 100,000 tonnes of GHG emissions a year.
In the USA, we are building a 250 MW co-generation power plant at our Pennsylvania chemicals facility that will also supply electricity to local homes. The chemicals plant has been designed with an energy-efficient gas cracker that will use hydrogen as a fuel source.
At our Rheinland refinery in Germany, we are building a power plant that is expected to lead to a reduction of around 100,000 tonnes of GHG emissions a year. We are also working with ITM Power to build an electrolyser at the site that produces hydrogen using renewable energy. The new hydrogen electrolysis plant is expected to be completed in 2021. It is designed to have a capacity of 10 MW and produce 1,300 tonnes of hydrogen a year. The hydrogen produced will initially be used by the refinery.
Reducing our shipping emissions
Shipping is critical to the global economy and accounts for around 2.7% of global GHG emissions. It is also a sector that is hard to decarbonise quickly, partly because currently it cannot be easily electrified.
We are investing in our fleet and researching and implementing efficiency technologies in order to lower emissions. In 2020, we signed a further 10 long-term charter contracts for carriers that can use either liquefied natural gas or conventional liquid marine fuel. This is expected to deliver a 60% reduction in carbon emissions compared with 2004 models of steam turbine LNG carriers.
To reduce energy consumption in our LNG ships, we are deploying air lubrication technology. The first vessel equipped with this technology set sail in October 2020. Air lubrication uses air bubbles to reduce resistance between a ship’s hull and the seawater, in the same way a penguin’s feathers do. Less resistance results in less fuel consumption. The technology can reduce fuel consumption by 5–8% and will be included on all eight of Shell’s LNG vessels currently under construction.
Energy intensity performance
The main metric we use to measure our performance is energy intensity: the amount of energy consumed for every unit of output.
Energy intensity – refining
Refinery Energy Index [A]
[A] Data are indexed to 2002, based on Solomon Associates Energy Intensity Index methodology.
The refinery energy intensity index increased from 94.4 in 2019 to 96.1 in 2020, mainly because many sites were running below capacity.
Energy intensity – chemical plants
Chemicals Energy Intensity – GJ/tonne production
Chemical steam cracker energy intensity in 2020 was 18.7 gigajoules per tonne (GJ/tonne) of high-value chemical (HVC) production, down from 19.7 GJ/tonne HVC in 2019, mainly as a result of facilities running at higher capacity after turnaround at three of our sites in 2019.
Energy intensity – upstream
(excl. LNG and GTL) GJ/tonne production [A]
[A] Methodology was updated in 2012. Data for 2011 are not directly comparable.
In 2020, the overall energy intensity for the production of oil and gas in our Upstream and Integrated Gas businesses (excluding liquefied natural gas and gas-to-liquids) increased to 1.14 compared with 1.07 in 2019. This was partly because of reduced production from the Groningen gas field (lower energy intensity asset) operated by the NAM joint venture (Shell interest 50%) in the Netherlands and inclusion of energy consumption from contractor transport in our data.
We expect it will be difficult to maintain the energy intensity levels of recent years, as existing fields age and new production comes from more energy-intensive sources. This may increase our upstream energy intensity over time.
