FUTURE OF ENERGY SUMMIT...Michael Liebreich Shanghai Summit, 4 November 2015 @MLiebreich 28...

FUTURE OF ENERGY SUMMIT

Michael Liebreich

Chairman of the Advisory

Board

Twitter: @mliebreich

Shanghai

4 November 2015

1 Michael Liebreich Shanghai Summit, 4 November 2015 @MLiebreich

Note: Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for

digital energy and energy storage projects (not reported in quarterly statistics), as well as a BNEF estimate for large hydro

investment. Source: Bloomberg New Energy Finance

NEW INVESTMENT IN CLEAN ENERGY 2004–14 ($BN)

0

50

100

150

200

250

300

350

400

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

30%

50%

27%

12% -9%

35%

7% -7%

-8%12%

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20142015 Q1

Expected

Large hydro

Other

Solar

Wind

+3.5x in 10

years


Include large hydro Source: Bloomberg New Energy Finance

NEW INSTALLATIONS IN CLEAN ENERGY 2004–14 (GW)

73%

-3%

57%

22%16%

-8%

36%

-18%

44%

12%

-

20

40

60

80

100

120

140

160

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

+7x in 10

years


Source: IEA; Ecofys

IEA FORECASTS, CUMULATIVE INSTALLED CAPACITY (GW)

WIND SOLAR


CLEAN ENERGY INVESTMENT BY REGION 2004 – 2014 ($BN)

Europe United States

China Asia ex-China

$28$38

$52

$72$87 $89

$119$129

$98

$66 $66

04 05 06 07 08 09 10 11 12 13 14

$10 $17$35 $41 $44

$35$48

$65$52 $48 $52

04 05 06 07 08 09 10 11 12 13 14

$3 $9 $11 $17$26

$40 $43$53

$67 $68

$89

04 05 06 07 08 09 10 11 12 13 14

$15 $17 $20 $24 $26 $25$36

$46 $46$59 $65

04 05 06 07 08 09 10 11 12 13 14

Source: Bloomberg New Energy Finance


Source: Bloomberg New Energy Finance. Note: Nameplate capacity represents the companies' announced production capacity. Discounted capacity represents our best

estimation of actual available capacity. For details see our Wind Turbine Manufacturing Supply Model

ESTIMATED GLOBAL WIND TURBINE SUPPLY 2011-14 (%, GW)

43.1% 44.3% 44.1% 45.6%

9% 9% 12% 13%3% 3%3%

3%15% 14% 13%13%

9% 9% 10%8%

21% 20% 19% 17%

2011 2012 2013 2014

Rest of world

Germany

US

Other Asia

India

China

63.6 62.8 61.3 74.1

Asia = 62%

Asia = 55%

https://www.bnef.com/Insight/12563


Source: Company reports, statements and

Bloomberg New Energy Finance estimates

PV MODULE PRODUCTION BY COUNTRY 2011-2014 (%,GW)

64.3%71.0% 69.5%

78.0%

9%7%

18%10%

5%4%

3% 3%11%

11%

7% 6%9% 7% 3% 2%

2011 2012 2013 2014

Germany

USA

Other Asia

Japan

China

29.7 30.1 38.7 45.0

Asia = 91%

Asia = 79%



NEW CLEAN ENERGY INVESTMENT IN OECD VS NON-OECD 2004-Q3 2015 ($BN)

0

10

20

30

40

50

60Q

1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Non OECD OECD

$37.6bn

$32.4bn

Q3 2015



RENEWABLE ENERGY (INCL. LARGE HYDRO) AND FOSSIL FUEL INVESTMENT VOLUMES 2008-14 $BN

0

50

100

150

200

250

300

350

2008 2009 2010 2011 2012 2013 2014

Renewable energy

Fossil fuel

$295bn

$289bn

2014


There is an urgent

need to develop

sources of renewable

energy

LAUDATO SI

Pope Francis

Picture: Wikimedia


0 100 200 300 400 500

NuclearCHP

Coal firedNatural gas CCGT

Geothermal - flash plantLandfill gas

Large hydroSmall hydro

Wind - onshoreGeothermal - binary plant

Municipal solid wasteBiomass - incinerationBiomass - gasification

Biomass - anaerobic digestionPV - c-Si tracking

PV - c-SiPV - thin film

Wind - offshoreSTEG - tower & heliostatSTEG - parabolic trough

STEG - LFRMarine - tidal

Marine - wave

Q2 2013 central H1 2014 central

8441037

US China Europe AustraliaFossil technologies:

LEVELISED COST OF ELECTRICITY 2014 ($/MWH)

Source: Bloomberg New Energy Finance Note: LCOEs for coal and CCGTs in Europe and Australia assume a carbon price of $20/t. No carbon prices are assumed for

China and the US.

Onshore wind

as low as

$40/MWh

PV projects as

low as

$58/MWh


0

2

4

6

8

10

12

14

16

18

20

2007 2008 2009 2010 2011 2012 2013 2014 2015

North East AsiaLNG

BAFA (Germanyborder price forRussian gas)

NBP (UK)

Henry Hub (US)

Note: Japan-Korea Marker is based on broker assessments of the spot price of un-contracted LNG cargoes delivered into

the Northeast Asia market.

Source: Bloomberg New Energy Finance,

ICAP, Platts

OIL AND GAS PRICES: HENRY HUB, NBP, BAFA, AND NE LNG, 2004–15 (US$/MMBTU)

0

2

4

6

8

10

12

14

16

18

20

NBP (UK)

Henry Hub (US)

BAFA (Germanyborder price forRussian gas)

North East Asia LNG


Source: Bloomberg New Energy Finance, EIA

US SHALE GAS PRODUCTION BY FIELD 2000–2015 (BCFD)

0

5

10

15

20

25

30

35

40

45

2000 2005 2010 2015

Marcellus

Haynesville

Eagle Ford

Fayetteville

Barnett

Woodford

Bakken

Antrim

Utica

Other Shale


US NATURAL GAS PRODUCTION, 2007 - 2015

0

200

400

600

800

1000

1200

1400

1600

1800

2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Range Resources, 28 July 2015 , Bloomberg New Energy Finance Source: EIA, Bloomberg New Energy Finance

Natural Gas Rotary Rigs in Operation

(Number)

Rig count

down 6-fold

2007-2015

Gas output per operating rig (MMcf/day/rig)

0

50

100

150

200

250

300

350

400

2007 2008 2009 2010 2011 2012 2013 2014 2015

Output per

rig

Up 8-fold

2007-2015


MAJOR GLOBAL SHALE FIELDS

Source: EIA Assessment of World Shale Gas Resources, April

2011 Note: Technically recoverable shale gas resources shown

Canada

Brazil

Poland Norway

China

Australia

South Africa 200 trillion

cubic feet

USA

Mexico

Libya

Algeria

Argentina

UK


Note: For the underlying data to this chart, go to BI LNGGG<GO> Source: Bloomberg New Energy Finance

LNG EXPORT CAPACITY BY COUNTRY/REGION (MMTPA)

0

100

200

300

400

500

600

700

800

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

Other

North America

Russia

East Africa

West Africa

Australia

Other

North America

Russia

West Africa

North Africa

Indonesia

Malaysia

Australia

Qatar

Demand

Pre

-FID

O

pe

rati

on

al,

un

de

r c

on

str

uc

tio

no

r p

os

t-F

ID


AN AGE OF ENERGY

PLENTY…

… AGE OF

COMPETITION


0

50

100

150

200

250

300

2007 2008 2009 2010 2011 2012 2013 2014 2015

Note: Prices have been adjusted for inflation according to YoY CPI Index from UK Office of National Statistics Source: Bloomberg New Energy Finance, ONS

ARA AND NEWCASTLE COAL PRICE 2007–2015 (2014 US$/TONNE)

0

50

100

150

200

250

300

2007 2008 2009 2010 2011 2012 2013 2014

ARA

Newcastle


Note: Values as of 26 October 2015; Stowe and S&P 500 rebased to 100 on 01 Jan 2013 Source: Bloomberg New Energy Finance

NEX CLEAN ENERGY INDEX 2013 – 2015 YTD

0

50

100

150

200

Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15

S&P 500 Oil & Gas

NEX

Stowe Global Coal


COAL BANKRUPTCIES

Image: various company sources

Investment Pte


Source: Bloomberg New Energy Finance NEO

2015

US NET COAL CAPACITY ADDITIONS 2013-40 (GW)

-25

-20

-15

-10

-5

0

2013 2018 2023 2028 2033 2038

Forecast



2015

GERMANY NET COAL CAPACITY ADDITIONS 2013-40 (GW)

-5

-4

-3

-2

-1

0

1

2

3

2013 2018 2023 2028 2033 2038

Forecast



CHINA NET COAL CAPACITY ADDITIONS 2013-40 (GW)

-40

-30

-20

-10

0

10

20

30

40

50

60

70

2013 2018 2023 2028 2033 2038

Forecast



2015

INDIA NET COAL CAPACITY ADDITIONS 2013-40 (GW)

0

5

10

15

20

25

2013 2018 2023 2028 2033 2038

Forecast


POWER SECTOR CO2 EMISSION TRAJECTORY 2012-40 (MtCO2) 电力行业碳排放轨迹，2012-40 （百万吨二氧化碳）


GLOBAL EMISSIONS EU, US, CHINA AND INDIA

(INDEX, 2012 = 100)

India

China

Europe US

0

50

100

150

200

250

300

350

400

2012 2020 2030 2040

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2012 2020 2030 2040


Note: Capacity factors – onshore wind: 25-35%; solar PV: 10-15% Source: Bloomberg New Energy Finance:

INDIA LCOE ($/MWH NOMINAL)

0

50

100

150

2015 2020 2025 2030 2035 2040

Onshore wind

Utility-scale PV

Natural gas

Coal


TOTAL INVESTMENTS PER TECHNOLOGY, 2015-40 (US$ REAL)


RENEWABLES TAKE

65% OF THE $12.2

TRILLION POWER

INVESTMENT TO 2040


RENEWABLE ENERGY PROPORTION OF POWER GENERATION- INCLUDING HYDRO, 2014 (%)

No data

<5%

5-10%

11-20%

21-40%

>50%

Brazil

71.7%

India

24.8%

China

20.5%

Australia

16.2%


Germany

26.7%

Japan

13.6%

UK

19.5%

France

16.3%

US

13.3%

Mexico

16.7%

ME + Africa

12%

China

20.5%


RENEWABLE ENERGY PROPORTION OF POWER GENERATION- INTERMITTENT ENERGY (WIND & SOLAR), 2014 (%)


Brazil

3%

India

3%

China

5%

Australia

8%

France

3%

US

4%

Mexico

3%

UK

9%

Japan

5%

Germany

16%

0

1-5%

6-10%

11-25%

26-50%

50+%

Note: This only shows the combination of wind and solar energy generation. All numbers come from

BNEF’s New Energy Outlook 2015

ME + Africa

0%


RENEWABLE ENERGY PROPORTION OF POWER GENERATION- INTERMITTENT ENERGY (WIND & SOLAR) , 2040 (%)


Brazil

34%

India

32%

China

37%

France

30%

Australia

52% ME + Africa

26%

US

24%

Mexico

32%

Note: This only shows the combination of wind and solar energy generation. All numbers come from

BNEF’s New Energy Outlook 2015

UK

63%

Japan

20%

Germany

77%

0

1-5%

6-10%

11-25%

26-50%

50+%


There is still a need to

develop adequate storage

technologies.

LAUDATO SI – INTEGRATION

Pope Francis Picture: Wikimedia


Efficiency

Forecasting

Demand management

Interconnection

Storage

Backup

MANAGING INTERMITTENCY


Efficiency

Forecasting

Demand management

Markets and Interconnection

Storage

Backup


Save money, reduce the

scale of the problem


Efficiency

Forecasting

Demand management


Storage

Backup


“Bits are always

cheaper than kit”


Efficiency

Forecasting

Demand management


Storage

Backup


Eliminate

curtailment


Efficiency

Forecasting

Demand management

Markets and interconnection

Storage

Backup

INTERMITTENCY MANAGEMENT MERIT ORDER

“Only needed at 70%

renewable

penetration”

(CEO, 50 Hertz Germany)


Efficiency

Forecasting

Demand management

Markets and interconnection

Storage

Backup


Last resort


THE ROAD TO PARIS

Image: UNFCCC


CUMULATIVE GLOBAL GREENHOUSE GAS EMISSIONS (GTCO2)

Source: Climate Action Tracker Notes: includes INDCs submitted to 1st October 2015

30

35

40

45

50

55

60

65

1990 1995 2000 2005 2010 2015 2020 2025 2030

Historical 2 C

INDC trajectory

Pre-COP21 pledges


FORECAST PRIMARY ENERGY DEMAND 2015-30 (MTOE)

Source: Bloomberg New Energy Finance, Shell, BP, IEA,

Exxon

12,000

13,000

14,000

15,000

16,000

17,000

18,000

19,000

2015 2020 2025 2030

Shell Oceans

ShellMountains

BP

IEA NPS

Exxon

INDCscenario


RENEWABLES GENERATION CUMULATIVE CAPACITY 2020 – 2040

0GW

1,000GW

2,000GW

3,000GW

4,000GW

5,000GW

6,000GW

7,000GW

8,000GW

2020 2030 2040

IEA 450

IEA Current Policies

IEA New Policies

World EnergyCouncil Symphony

World EnergyCouncil Jazz

BNEF

Source: Bloomberg New Energy Finance, World Energy Council, IEA

+50%


COAL DEMAND UNDER DIFFERENT SCENARIOS 2015-30 (MTOE)

Source: Bloomberg New Energy Finance, IEA

2,500

3,000

3,500

4,000

4,500

2015 2020 2025 2030

IEA coal demandexcl INDCs

IEA coal demandinc INDCs

IEA coal demandinc INDCs andBNEF NEOestimates

+14%

0%

-20%

+14%

-20%


Images: BMW, Detroit Electric, 2015, courtesy of EVASD

Prices on electric cars will continue to drop until

they're within reach of the average family.

The Washington

Post

ELECTRIC VEHICLES – THE PROMISE

, 1915


ELECTRIC VEHICLE – THE UPTAKE SO FAR

Source: Bloomberg New Energy Finance, International Organization of Motor Vehicle Manufacturers

CARS AND TRUCKS IN USE

WORLDWIDE, 2013

1.2 billion

ELECTRIC VEHICLES IN

USE WORLDWIDE, 2014

0.75 million (to scale)


Note: Values from 2010-2014 are based on BNEF’s annual battery price index, *2015 based on H1 data. For more see here:

https://www.bnef.com/Insight/10299. Cumulative production is based on total EVs sold and their respective battery pack size. Bloomberg New Energy Finance

EV LITHIUM-ION BATTERY PACKS & CRYSTYALLINE SI PV MODULES: HISTORICAL COST REDUCTIONS

1 10 100 1,000 10,000 100,000

0

1

10

100

0

1

10

100

1 10 100 1,000 10,000 100,000 1,000,000

Cumulative lithium-ion EV battery pack production (MWh)

Cumulative crystalline PV module production (MW)

Cry

sta

llin

e S

i P

V M

od

ule

pri

ce

(US

D/W

)

Lith

ium

-ion

ba

ttery

pa

ck p

rice

(US

D/W

h)

m=15.5%

m=26.3%

EV LI-ION BATTERYPACK

PRICES HAVE FALLEN

60% SINCE 2010




Photo: Michael Liebreich

SHANGHAI, CHINA


Photo: Reuters/NASA

BEIJING, CHINA


Photo: Greenpacks

HONG KONG


Picture: Wikimedia Commons

AIR QUALITY - DELHI


Photo: JE Poirrier, Creative Commons

DELHI, INDIA


Photo: Bloomberg

SINGAPORE


Photo: Matt Champlin / Flickr

CAIRO, EGYPT


Photo: Shinil GCP

MEXICO CITY, MEXICO


Photo: Thomas Hobbs

SAO PAULO, BRAZIL


Photo: EarthInTransition

MOSCOW, RUSSIA


Photo: UCLA

LOS ANGELES, USA


Photo: HHRCA

LONDON, UK


Photo: D€NNI$/Creative Commons

PARIS, FRANCE


URBAN TRANSPORT REVOLUTION

Images: Transport for London, Zipcar, Uber, Proterra


Note: Includes NGL and processing gain, but excludes biofuels Source: IEA; Bloomberg New Energy Finance

IEA OIL SUPPLY FORECAST 1990-2040 MILLION BARRELS PER DAY

60

70

80

90

100

110

120

130

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

WEO1994

WEO1996

WEO1996

WEO1998

WEO2002

WEO2003

WEO2006

WEO2007

WEO2009

WEO2010

WEO2011

WEO2012

WEO2014

Actual60

70

80

90

100

110

120

130

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

WEO1994

WEO1996

WEO1996

WEO1998

WEO2002

WEO2003

WEO2006

WEO2007

WEO2009

WEO2010

WEO2011

WEO2012

WEO2014

Actual60

70

80

90

100

110

120

130

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

WEO1994

WEO1996

WEO1996

WEO1998

WEO2002

WEO2003

WEO2006

WEO2007

WEO2009

WEO2010

WEO2011

WEO2012

WEO2014

Actual60

70

80

90

100

110

120

130

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

WEO1994

WEO1996

WEO1996

WEO1998

WEO2002

WEO2003

WEO2006

WEO2007

WEO2009

WEO2010

WEO2011

WEO2012

WEO2014

Actual60

70

80

90

100

110

120

130

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

WEO1994

WEO1996

WEO1996

WEO1998

WEO2002

WEO2003

WEO2006

WEO2007

WEO2009

WEO2010

WEO2011

WEO2012

WEO2014

Actual

Transport

transformation

scenario?

Pre-2000 2000-2008

2010-2013 Current


Emissions must be cut 40-70% by mid-century

and phased out entirely by 2100

G7 JUNE 2015 – SCHLOSS ELMAU

Picture: Wikimedia


Picture: Michael Liebreich

APEC BLUE

Asia Blue

Unique analysis, tools and data for decision-makers

driving change in the energy system

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Michael Liebreich

Twitter: @mliebreich

Thanks!

FUTURE OF ENERGY SUMMIT...Michael Liebreich Shanghai Summit, 4 November 2015 @MLiebreich 28...

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