douglas westwood presentation

1

John WestwoodThom Payne London Business School Energy Club 8 Feb 2010

Established 1990About us

Established 1990Aberdeen, Canterbury & New York

Activities & service lines• Market research & analysis• Commercial due-diligence• Business strategy & advisory• Business strategy & advisory • Published market studies

Industry sector coverage

offshore power

Industry sector coverage• Oil & Gas • Power• Renewable Energy

400 clients in 60 countries • >600 projects completed for:

LNGonshore LNG

• >600 projects completed for: • government agencies• energy majors and their suppliers

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• investment banks & PE firms• the leading independent provider of

commercial DD to OFS investorsdownstream renewables

Published reports include………

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Brazil – ‘huge blackout. Half the country left without electricity’ g y y

South Africa – ‘fear of return of power cuts’

UK ‘ k d d ld d it b 2017’UK – ‘peak demand could exceed capacity by 2017’

Australia – ‘Victoria electricity demand neared a record peak’

China – ‘cold weather electricity rationing continues’

UK ‘gas supplies for businesses turned off’UK – gas supplies for businesses turned off

Venezuela – ‘key industries halted by hydroelectric crisis’

Press reports since November 2009

44

Energy Market DriversEnergy Market Drivers

Sustainable EnergySustainable Energy

UK Power GenerationUK Power Generation

5The FutureThe Future

Energy sources & issues

Hydro 2%E i t l

CRW 10%Combustible renewables & waste

Important in some countries Environmental concerns over large dams

pGrowth potential

Coal 27%Abundant supplies

Highly pollutingCCS i

Nuclear 6%NIMBY concerns

Long plant build time

Oil 34%

CCS very expensive5x gas powergen Capex

Oil 34%Preferred transportation fuel

Supply concernsEmissions concerns

Gas 21%Abundant – but local shortages

Expensive to transport Emissions concerns‘Off-the-shelf’ powergen plant

Emits half CO2 of coal

6

World Energy ConsumptionSource: Douglas-Westwood /IEA 2009

Energy – two linked concerns; one driver

Population growth

7Energy supplies Global warming

Energy demand outpaces population growth193%

sources: DWL,UN, BP

55%

95%

oil demand growth

population growth

energy demand growth

Global Growth 1965-2008

Consider oil, the fuel of transportation:

• 1 billion cars worldwide. Production capacity 86 million p.a. (2008)• Electric cars will help efficiency (eventually)• But how long to change the world car fleet (>20 years?)• Meantime China and India’s growing populations will ‘motorise’

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• And cause a huge growth in oil demand and prices• Can the global economy handle this?

Energy demand and climate change

197.6

3 0US• Security of energy supplies is a

i di t bl th11.1

10

4.9

3.0

1.4Russia

more immediate problem than global warming (and some governments are now realising this!)

10

9.5

3.8

4.0

0.8

1 3

Germany

Japan

• The big political driver is climate change

8.93.5

1.3

0.6

p

UK

CO2 (t.p.a.)

energy (toe p.a.)• US consumes 5x more energy

per capita than China and 6

4.3

4.0

1 5

0.6France

China

population (hundred million)

p pproduces 4.4x CO2 per capita

• But China has 5x the population

1.1

1.5

0.4

13.3

11.5

China

India

But China has 5x the population

• What might happen as such developing economies grow?

9

developing economies grow? Douglas-Westwood analysis using multiple data sources

China’s oil demand could double in a decade

China doubles

‘Were China to follow Korea’s path of development as it

China doubles US in 2025

development - as it largely has to date – its oil demand would more than double in the next

China reaches US in 2018

decade. By 2030, Chinese consumption could exceed 50 mbpd’

source: Douglas-Westwood analysis using EIA, IMF, and US Census Bureau data

• China is the key driver of global oil demand growth

• China oil consumption up 4.9% year on year, 7.3% in December

10

p p y y ,

• Vehicles sold: China 13.6 m vs. US 10 m in 2009

China leads a return to growth

• Exports +17.7% YOY, (4.0% forecast)• Imports +55.9% (31% expected) p ( p )• Industrial output +25% YOY (Dec)• GDP growth in Q4 exceeded 11%• The world's biggest car market in 2009. 13.6 million

sold compared with 10 million in the US• Car sales forecast to rise 15% in 2010 • Imports from Asia soar. S Korea +94%, Taiwan +91%,

Malaysia +53% (Nov) • China to move from 5th to 2nd largest economy

overtaking JapanOil i t 14% i D b 4 9% YOY• Oil imports +14% in December, up 4.9% YOY

• DWL expect oil consumption to run1-2% ahead of GDP

• ‘Other Asia’ oil consumption +12% Dec• Other Asia oil consumption +12% Dec. • And ‘Other Asia’ has more consumption than China

11

China invests in future energy supplies

Russia: $300 bn. 300kbd UK: windpower bid

Canada: $1.7bnOil sands

USA: $2.2 bnWindpower

Venezuela: $8 bn Nigeria: 1/6th O&G reserves

Brazil: $10 bn. 160kbd

Australia: $5 2 bn CoalAustralia: 20 year LNG

Australia: $5.2 bn Coal

January 2010:S Korea to buy

12Data: Major investments in 2009. Douglas-Westwood

10 oil companies ‘energy security a priority’

They got it wrong before – will they again?

13March 1999 April 2009

Europe – oil production in decline, gas to follow

6.06.57.0 Offshore Oil

Southern EuropeOther NW Europe 275

300Offshore gas

Southern EuropeOther NW Europe

Source: Energyfiles

3 54.04.55.05.5

s oi

l per

day

Other NW EuropeNorwayUnited Kingdom

175200225250

ar

Other NW EuropeNorwayUnited Kingdom

1 52.02.53.03.5

lions

of b

bls

75100125150

Bcm

per

yea

0.00.51.01.5

1985 1990 1995 2000 2005 2010 2015 2020 2025

Mil

0255075

1985 1990 1995 2000 2005 2010 2015 2020 2025

UK UK

1985 1990 1995 2000 2005 2010 2015 2020 2025 1985 1990 1995 2000 2005 2010 2015 2020 2025

• Offshore Europe has lost 50% of its oil production in a decade• Massive dependency on Norwegian gas

14

Global oil supplies cannot continue to grow

120<200252

countries past

by 200866

countries past

Source: Energyfiles

80

100er

day

BIOFUELS

CTL

GTL

peak peak

60

on b

arre

ls p

e

OIL SHALES

OIL SANDS

20

40milli

o

REFINERY GAIN

OFFSHORE DEEP

OFFSHORE SHALLOW

01995 1999 2003 2007 2011 2015 2019 2023

OFFSHORE SHALLOW

ONSHORE

• Global fields reserves declining at 6.7% p.a. (2007 estimate was 3.7%!) IEA

• Global peak revised down by 4 Mbpd to 89 Mbpd Total CEO 16 Feb ‘09

15

Global peak revised down by 4 Mbpd to 89 Mbpd Total CEO,16 Feb 09

• Need to find and get into production one NEW Saudi Arabia every THREE years!

The Movement Offshore – OilGrowing Importance of Offshore Production

100

120

y

Of fshore DeepOffshoreOnshore (inc. Unconventional Reserves)

60

80f o

il pe

r day

20

40

on b

arre

ls o

f

01950 1965 1980 1995 2010 2025

mill

io

Global Oil Production 1950-2025

• Offshore oil currently accounts for 33% of global output:• 35% by 202035% by 2020.• Deepwater share of offshore production to grow rapidly over the next decade.• Deepwater – 3% of production in 2002, 6% in 2007, 10% by 2012.

16

• After 2012, deepwater is the only sector to continue to grow.

Cyclical & cynical: a brief history of the offshore market

$12025

$60

$80

$100

15

20

l ($2

008)

ber o

f Rig

s

$0

$20

$40

0

5

10

$/bb

Num

b

• The offshore market has seen a number of activity cycles since 1969

$001969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011

Semi-Submersible Drilling Rig DeliveriesSource: Riglogix

• The offshore market has seen a number of activity cycles since 1969.• Oil price volatility has been a major driver for this behaviour.

• The 2005-2008 cycle was also particularly driven by the move to deepwater (W Af i B il & G M)(W.Africa, Brazil & GoM)

• The 2009 recession will not be the end of the offshore oil & gas market. But reserves are getting harder to find and more challenging to produce.

17

• What will be the key themes for the Offshore market?

NOCs rule – OK?

Source: Barclays: Outlook 1 Feb 2010Source: Barclays: Outlook 1 Feb 2010

• NOCs to control 55% of 2010 non-US spend• And 80% of the world’s remaining reserves• And 80% of the world s remaining reserves• Note PetroChina market cap now larger than Exxon!• Gazprom boe reserves equals the rest of the top-10 players by mar cap

18

p q p p y y p• So what is the long-term role of the major international oil companies?

Have 8 out of 10 oil majors have passed peak production?

2002 2003 2004 2005 2006 2007 2008ExxonMobil 2496 2516 2571 2523 2681 2616 2404BP 2018 2121 2531 2562 2475 2414 2410PetroChina 2109 2119 2233 2270 2276 2312 2379Shell 2359 2379 2253 2093 2030 1899 1771Petrobras 1533 1701 1661 1847 1908 1920 1996Petrobras 1533 1701 1661 1847 1908 1920 1996Chevron 1897 1823 1737 1701 1759 1783 1676Total 1589 1661 1695 1621 1506 1509 1456ConocoPhillips 891 1237 1242 1447 1698 1644 1367

Data: Petroleum Review May 2009 Peak Year

ENI 921 981 1034 1111 1079 1020 1026StatoilHydro 1112 1132 1135 1102 1058 1054 1056

Data: Petroleum Review, May 2009

• Peak oil is a reality, not just for the majority of the producing countries b t h f th j it f th t d

Peak Year

but perhaps for the majority of the top producers. • Offshore is one of the few remaining places where the oil majors can

increase production

19

Global offshore oil & gas production & spend to grow

350

400 AfricaAsiaAustralasiaE t E & FSU

Source: EnergyFiles

200

250

300

x ($

billi

ons)

Eastern Europe & FSULatin AmericaMiddle EastNorth AmericaWestern Europe

100

150

200

Cap

ex &

Ope

x0

50

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

C

• Global Capex falls in 09/10 but Opex sees long term growth

• Most regions to see overall growthMost regions to see overall growth

• But W Europe to decline

• Particularly UK needs incentives

20

• Particularly UK – needs incentives

• Norway has longer term prospects

But what about all the big new deepwater discoveries?

21• It can take 5-10 years to get a major deepwater field to full production

Deepwater Capex to reach new highs

$30

$35

)

AfricaAsiaAustralasia

$15

$20

$25

ure

($bi

llion

s) Latin AmericaOthersNorth AmericaWestern Europe

$5

$10

$15

Exp

endi

t

$02004 2005 2006 2007 2008 2009 2010 2011 2012 2013

• Deepwater production: to grow 99% (shallow water 20%)

• Future deepwater investment:$137 billi th t fi

22

$137 billion over the next five yearsSource: “The World Deepwater Market Report

2008-2013” Douglas-Westwood

‘Big oil’ to get best IRR in deepwater?

23

Floating production market has turned the corner

10

12

14 Africa AsiaAustralasia E. Europe & FSULatin America Middle EastNorth America Western EuropeOrder Year

6

8

10

$ bi

llion

0

2

4

2004 2005 2006 2007 2008 2009 2010 2011 2012 20132004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Global Floating Production Expenditure 2004-2013Source: Douglas-Westwood

• Material decrease in orders in 2009; but market has bottomed• Impact of project delays – $14 billion of projects slipped• Gl b l FPS k t t b th $50 billi 2009 2013 i d• Global FPS market to be worth $50 billion over 2009-2013 period• Increasing share of market to leased FPSOs. Consolidation likely• Market still well below pre recession levels

24

• Market still well below pre-recession levels• Long term >200 prospects exist and growth will recover

Subsea recovers from a tough 2009

3,000

3,500Aker SolutionsCameronDril-Quip

2,000

2,500

lue

$ m

illio

ns

Dril-Quip FMCGE Oil & Gas

500

1,000

1,500

Ord

er V

al

Subsea Production and Processing OrdersSo rce “S bsea Market Share Assessment December 2009” Do glas West ood

0

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09

• Subsea processing orders were hard hit in with the recessionPl bl t bl d t b kl

Source: “Subsea Market Share Assessment, December 2009” – Douglas-Westwood

• Players revenues reasonably stable due to backlog• Orders bottomed in Q4 2008• Trend suggests 2010 will recover to ‘normal’ levels

25

• Trend suggests 2010 will recover to normal levels• FMC is subsea market leader 2009 Q1-3 by order value

Offshore ops & maint spend to see good growth

$70

$80 AfricaAsia-PacificEastern Europe & FSULatin AmericaMiddle East

$40

$50

$60

$bill

ions

Middle EastNorth AmericaNorwayUKRest of Europe

$20

$30

$40

$0

$10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: “The World Offshore Operations & Maintenance Market Report 2010-14”Douglas-Westwood

7 000 fi d & 200 fl ti l tf• >7,000 fixed & >200 floating platforms • Spend to exceed $330 billion over the next five years

Plus demand for major modifications

26

• Plus demand for major modifications • Subsea IRM 10% CAGR as subsea installations increase

Natural gas production to soar

80

90

100

per d

ay Africa

AsiaAustralasiaEastern Europe & FSU

60

70

80

il equ

ival

ent p Eastern Europe & FSU

Latin AmericaMiddle EastNorth AmericaWestern Europe

30

40

50

n ba

rrel

s of

o

Middle East

0

10

20

mill

ion Middle East

• Natural gas production currently dominated by E Europe & Russia

Source: Energyfiles

1930 1937 1944 1951 1958 1965 1972 1979 1986 1993 2000 2007 2014 2021

Natural gas production currently dominated by E Europe & Russia• Middle East, Latin America, Africa & Asia to see significant growth• But local supply issues e.g. in Europe

27

• Deepwater gas and LNG to be of growing importance • And ‘unconventional gas’ – US shale gas, coal bed methane, etc

Continuing growth in global LNG capacity

300

350

400

pa)

AfricaAsia-PacificFSUMiddle EastSouth America

200

250

300

n C

apac

ity (m

mtp South America

North AmericaWestern Europe

50

100

150

Liqu

efac

tio

0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

• Large expansions to Qatargas and Rasgas plants to come onstream in 2009/2010 Will add 46 8 million tpa of new capacity to the market2009/2010. Will add 46.8 million tpa of new capacity to the market

• 33 additional installations forecast, incuding19 new facilities

• 53 new LNG import terminals and a number of expansions to expected

28

p p pto be completed in the next five years

Escalating costs are a major concern for future developments

$120

190

200

Oil Price Actuals (Brent)

Offshore Cost Inflation Index(CERA)

$80

$100

160

170

180

blCos

t Ind

ex

Brent Oil Price

$

$40

$60

120

130

140

150

$/bb

Off

hsor

e C

Brent Oil Price (Actuals)

Brent Oil Price (Forecast)

$0

$20

100

110

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

• Cost Inflation has tracked oil prices closely over the past 10 years.• Costs cooled somewhat in 2009 but remain high.

BUT Oil i th i• BUT… Oil prices are on the move again.• Another flurry of offshore activity may well trigger a similar cost inflation

scenario.

29

• Major challenge for the industry to manage costs in the supply chain over the next five years.

Oil & Gas –The Post-Recession World

• Technology-driven− IOC’s will be under increasing pressure for new discoveries and

expanded production mostly from deepwaterexpanded production – mostly from deepwater

• But recession has ended ‘price is no object’ environment− OECD countries are unlikely to sustain oil prices much above $80− Threat of recurring recession, sluggish growth, possibly stagflation− China and other emerging economies will tend to absorb incremental

oil productionp

• Cost will be an important driver− If we find the oil, can we afford to lift it?

• Oil supply will be insufficient to meet future needs− Natural gas has to take up some of the load

• Both innovation and cost will be critical drivers in the years aheadBoth innovation and cost will be critical drivers in the years ahead• Challenging times ahead, but the global economy will absorb all oil

volumes that can be produced at affordable prices

30

Alternative energy – challenges & opportunities

onshore wind offshore wind biomass solar hydro wave tidal

• There is no ‘magic bullet’. None are ideal: many are very high cost &/or technically immature /&/or technically immature / impractical / location specific / unproven /conflicting interests, etc

nuclear CCS carbon cap & trade conservation

32

But…….they are a major part of the way ahead

Alternatives – the problem is cost

Other Conventional Oil

Middle East Oil

nven

tiona

l O

il

Tidal energy costs £0.15 kWh, wave energy £0.25,coal-fired electricity costs £0 05

Candadian Oil Sands (new dev.)

Venezuela's Orinoco Belt

Deepwateron

al O

ilC

on £0.05. The Carbon Trust Feb 2010

Oil Shale

Coal to Liquid

Candadian Oil Sands (new dev.)

Unc

onve

ntio

Brazilian Sugar Cane Ethanol

US Corn Ethanol

European Biodiesel

Bio

fuel

s

Traditional Coal

Coal with CCS

Brazilian Sugar Cane Ethanol

Coa

l

Onshore Wind

Offshore Wind

Nuclear

Ren

ew-

able

s

33Source: FT 12/08

0 20 40 60 80 100 120 140 160

Onshore WindR

$/bbl equivalent

Windpower: a $36 bn world market

US22%

UK3%

Denmark2%

Portugal2% ROW

14%22%

GermanyIndia7%

Italy3%

France3%

3% 2%

158GW16%

Spain12%

China16%

7%

Source: GWEC

Installed Global Windpower Capacity (end 2009)

• 2009: world installed capacity grows by 31%• China +100% to 25GW; US by 39% to 35GW• Europe +54% of which UK added1MW +36%

• Wind is a green solution and an important part of the energy mix

Europe +54% of which UK added1MW +36%

34

• But best locations are remote & major NIMBY issues in some countries• Offshore has major attractions: out of sight & a better wind regime

Offshore wind: 5.3 GW to come online 2009-13

Forecasts 2009-13• UK 2.3 GW• Germany 1.4 GW

1200

1400

MW

BelgiumChinaDenmarkGermany

• Denmark 0.9 GW• Belgium 0.4 GW• Others 0.3 GW

600

800

1000

talle

d C

apac

ity M Germany

NetherlandsSwedenUKOthers

200

400

Annu

al In

s

0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Douglas-Westwood

• UK is the world’s leading market• Germany to follow

35

Germany to follow• China emerging (and exporting monopiles)

Tackling the installation problem

Source: Keppel FELSSource: Keppel FELS

• By applying offshore oil & gas techniques

36Source: RESTATS, July 2009

Offshore renewable energy – global Capex in context

1 2

200

180200

152

120140160

billio

n)Source: Douglas-Westwood

476080

100

Cape

x ($

2009

2012

0.2 20.6 5.20

2040

Marine Offshore All Wind Offshore

• Offshore renewables small but with strong growth

Marine Renewables

Offshore Wind

All Wind Offshore O&G

g g

• Wind power is EU supply chain dominated

• Marine renewables is new with great future potential

37

Marine renewables is new with great future potential

• But will UK invest or will see a repeat of the windpower situation

Coal Coal –– huge growth in world demand. Can CCS be financed?huge growth in world demand. Can CCS be financed?

3.0

Rest of ld

2.5

s)

world

China consumes

1.5

2.0

(billi

on t

onne

s China consumes 45% of world coal

1.0

Coa

l

0.5

Dirty coal UK 1952

0.0

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

3838

Dirty coal – UK 1952 Dirty coal – China 2009

• Carbon capture & storage has not yet been achieved on a large scale

Is nuclear the answer?

• >426 new reactors ‘planned or proposed’• >426 new reactors planned or proposed worldwide (125 in China) Source: World Nuclear Assn.

• 28 under construction in China• Nuclear suited to ‘centralised’ grids• ‘The cheapest large scale, low carbon

electricity source’ EDF

• Newbuild takes 8-10 years & 5 bn euros f• French EPR design – safety issues raised

• Finland – reactor 3 years late and several billion euros over budgetbillion euros over budget

• ‘New [UK] sites at risk from lack of subsidies’ (CEO EDF)

39

• ‘Level playing field with wind needed’

The ‘Negawatt’

• The need to invest in less

Picture: www.eagleshieldinc.com/

• The need to invest in less• Average UK home emits 5.5 t CO2 p.a. – twice as much as a car• Reducing thermostat by 1 degree saves 10% of heating costs• I t i l B iti h h 1/3 f th h t i l t th h f & ll

40

• In a typical British home 1/3 of the heat is lost through roof & walls

4 February 2010

B iti h h h ldBritish households risk unaffordable energy bills Ofgemenergy bills, Ofgem warnsHouseholds and businesses face the risk of unaffordableface the risk of unaffordable energy bills unless radical action is taken to safeguard Britain's supply the regulatorBritain s supply, the regulator Ofgem warned today.

42

Demand could exceed capacity by 2017

• If existing station closure programme is implemented

• How will new capacity impact ?

43

p y p

Source: The UK Power Generation Expenditure Report 2010‐2030. Douglas‐Westwood

Coal, Nuclear & Gas (CCGT) dominate UK powergen

Wind 2%

Hydro and pumped storage, 5%

Others, 0% Interconnector, 3%

Coal & Coal Others, 35%

Gas turbines and oil engines, 6%

Wind, 2%

Oil 5%

CCGT & CHP, 31%

Oil, 5%

Nuclear, 12%

44Source: The UK Power Generation Expenditure Report 2010‐2030. Douglas‐Westwood

79 GW of additions needed by 2030*8

6

7

8

WSolar PV

Biomass

Hydro

*Base case. Online dates

4

5

6

ditio

ns G

W

Wave & Tidal

Onshore Wind

Offshore Wind

2

3

4

Cap

acity

Ad

Nuclear

Coal

Gas

1

2C

0

• Total annual new plant additions of 1-7 GW per annum

• 2010-17 additions: >50% gas, 44% wind (mainly offshore)

45

• A new UK ‘dash for gas’ with security of supply implicationsSource: The UK Power Generation Expenditure Report 2010‐2030. Douglas‐Westwood

£149 billion spend forecast*

8

9

10Solar PV

Biomass

*Scenarios range £119-162 bn

6

7

8

lion)

Hydro

Wave & Tidal

Onshore WindOFFSHORE WIND

4

5

Cap

ex (£

bil

Offshore Wind

Nuclear

CoalNUCLEAR

1

2

3 GasNUCLEAR

COAL +CCS

0

• Total period gas spend 8% (CCCT is the cheapest option)• Clean coal spend begins 2021? (online 2024 earliest)• Nuclear spend begins 2012 (online 2018 earliest) total >£42 billion

46

• Nuclear spend begins 2012 (online 2018 earliest) total >£42 billion• Annual Capex rises from £1.7bn in 2008 to >£9 billion in 2020

Source: The UK Power Generation Expenditure Report 2010‐2030. Douglas‐Westwood

Energy supply security

• Europe lacks a free k t i l t i itmarket in electricity

• Massive investment in a European super-grid is essential

• UK needs more links to Norway and Europe

• And a national ‘smart grid’ – and smart appliancesappliances

47

The smart grid

• The smart grid can also enable smart appliances to be used

Figure 27: An Interconnected Electricity SystemSource: Parliamentary Office of Science and Technology

• The smart grid can also enable smart appliances to be used• Appliances can switch on at cheapest power times• 200,000 x 40 kW cars can quickly provide 8 GW of power to the grid• S th K l $24b t id ith l 30 000 l t i hi l

48

• South Korea plan $24bn smart grid with nearly 30,000 electric vehicle charging stations by 2030

UK powergen – final thoughts

• Taking into account the potential for increasing demand, and

intermittency of renewable sources , powergen capacity will may need to

grow to 112 GW by 2030 (base case)

• The equivalent of 95% of existing UK capacity will need to be built over

the next 20 years

• Required capital investment £149 billion (range £124bn to £167 bn)

• Plus major grid investment!Plus major grid investment!

• Could total £264 bn in the next decade! Lord Davies, Trade & Investment Minister FT 26Jan ‘10

49

The €1,000 billion EU power bill

33% 34%35%2007

19%

25% 26%

19%

24%

20%

25%

30%2007

2030

4% 3%7%

1%

5%5%

10%

15%

0%

oil

gas

nucl

ear

hydr

o

new

able

s

coal

Biggest five European countries need to spend:

ren

Biggest five European countries need to spend: • €300bn to meet environmental targets• €470bn on replacement & renewal

51

A massive growth in renewable energy is requiredSource: DWL & FT 3 Feb 2010

Towards changeSource: ‘The End of Energy Obesity’ Peter Tertzakian

• We must decouple GDP growthWe must decouple GDP growth from energy demand growth

• Some successes:

• Japan – ‘Top Runner Programme’

• Denmark carrots & sticks (taxes• Denmark – carrots & sticks (taxes, wind power, cogeneration, etc.)

• Switzerland ‘Swiss Energy• Switzerland – Swiss Energy Programme’

• But we must not ‘export’ our• But we must not ‘export’ our energy demand

52

Thank Thank youyou

53

This presentation can be downloaded from www.douglasThis presentation can be downloaded from www.douglas--westwood.comwestwood.com

douglas westwood presentation

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