approaches for using scenarios in strategic …...the future of energy solar wind power and...
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APPROACHES FOR USING SCENARIOS IN STRATEGIC DECISION MAKING
TCFD
Seb Henbest
@SebHenbest
November 1, 2017
1 November 1, 2017
Analysis to help you understand the future of energy
Solar Wind Power and
Utilities
Electric
Vehicles
Energy Smart
Technologies
Gas Carbon
Markets &
Climate
Frontier
Power
Mobility and
Autonomous
Driving
Emerging
Technologies
Storage
Europe, Middle East
& Africa
Asia Pacific Americas
2 November 1, 2017
New Energy Outlook
3 November 1, 2017
● Use a range of scenarios from multiple sources
● Ask – what do I have to believe?
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
4 November 1, 2017
● Use a range of scenarios from multiple sources
● Ask – what do I have to believe?
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
5 November 1, 2017
Many routes to meet two degree carbon budget…
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2012 2017 2020 2025 2030 2035 2040
Carbon emissions (MtCO2)
Source: Bloomberg New Energy Finance Note: data is for power sector only.
6 November 1, 2017
Source: Bloomberg New Energy Finance, IEA, EIA; Note: solar includes PV & solar thermal; wind includes onshore and offshore wind.
Installed capacity by technology, 2040 Change in gas demand, 2015-2040
…and many tech pathways
0%
20%
40%
60%
80%
100%
120%
140%
160%
2015 2020 2025 2030 2035 2040
%
NEO 2017
IEA Current Policies
IEA New Policies
IEA 4500%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
NEO 2017 IEACurrentPolicies
IEA NewPolicies
IEA 450 EIAReference
%
Other
Other renewables
Solar
Wind
Hydro
Nuclear
Oil
Gas
Coal
7 November 1, 2017
● Use a range of scenarios from multiple sources
● Ask – what do I have to believe?
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
8 November 1, 2017
● Use a range of scenarios from multiple sources
● Ask – what do I have to believe?
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
9 November 1, 2017
CCS is still used everywhere
Company Role of CCS in forecast
Bloomberg New Energy Finance CCS not part of analysis
IEA
450 scenario: “(…) Carbon capture and storage (CCS) picking up in
the 2030s (…); 70% of coal plants equipped with CCS
New Policies scenario: <1,000 Mtce of coal demand for CCS/IGCC
BP
Base case: not clear
Even Faster transition: “more than a third of the carbon emissions from
the remaining coal and gas power generation are capture and stored”
ExxonMobil “[Technological] Advances will promote (…) emerging opportunities for
technologies like carbon capture and storage (CCS).”
Shell
Mountains scenario: “(…) success of carbon capture and storage
technologies.”
Oceans scenario: “(…) carbon capture and storage is delayed”
Statoil Reform scenario: “Many successful [CCS] projects (…)”
Renewal scenario: “Significant growth [of CCS] (…)”
10 November 1, 2017
● Use a range of scenarios from multiple sources
● Ask – what do I have to believe?
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
11 November 1, 2017
PV got cheap, and will get cheaper
$0/W
$1/W
$10/W
$100/W
1 10 100 1,000 10,000 100,000 1,000,000
1976
Cumulative capacity (MW)
2017e
2003
2008
2015
1985
[VALUE]/W
$23.7
$7.6 $5.0
$1.8 $0.3
1975 80 90 2000 10 17
Source: Bloomberg New Energy Finance
Crystalline silicon solar PV experience curve
12 November 1, 2017
Offshore wind turbine capacity by commissioning date
0
2
4
6
8
10
12
1990 1995 2000 2005 2010 2015 2020 2025
Turbine capacity (MW)
Forecast
All projects
Annual average
2021, 9.0MW
2022, 9.9MW
2023, 10.9MW
Note: X-axis denotes commissioning date. A
project-weighted average was used for
projects with multiple turbine models.
Source: Bloomberg New Energy Finance
13 November 1, 2017
Source: Bloomberg New Energy Finance EVO 2017; Note: Prices are an average of BEV and PHEV batteries and include both cell and pack costs.
Cell costs alone will be lower. Historical prices are nominal, future ones are in real 2016 U.S. dollars.
Lithium-ion battery prices, historical and forecast
0
100
200
300
400
500
600
700
800
900
1,000
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
$/kWh
BNEF observedvalues
19% learningrate
BNEF observed values: annual lithium-ion battery price index2010-16.
2030 average lithium-ion battery price:$73/kWh
2025 average lithium-ionbattery price: $109/kWh
14 November 1, 2017
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
15 November 1, 2017
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
1,000
2,000
3,000
4,000
5,000
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
50
100
150
200
250
300
350
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
BNEF NEO 2017
BNEF NEO 2017
16 November 1, 2017
Source: Bloomberg New Energy Finance, BP, OPEC, Exxon, IEA
EV forecasts – look familiar?
-
100
200
300
400
500
600
2020 25 30 35 40
EV fleet size - millions
BNEF – 2016
BNEF – 2017
BP – 2016
BP – 2017
Exxon – 2016
Exxon – 2017
OPEC – 2015
OPEC – 2016
IEA – 2016
IEA – 2017
17 November 1, 2017
● Use a range of scenarios from multiple sources
● Ask – what do I have to believe?
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
18 November 1, 2017
Source: Bloomberg New Energy Finance Note:*energy -related emissions only.† U.S. 2030 target is extrapolated based on target trend to 2025
Which NDCs pose the greatest risk for business?
19 November 1, 2017
● Use a range of scenarios from multiple sources
● Ask – what do I have to believe?
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
20 November 1, 2017
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Coverage.
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Seb Henbest