London summit 2017 - Bloomberg Professional Services | Bloomberg Finance LP · 2017-09-20 · $/bbl...

London summit 2017Breaking Clean

Michael Liebreich

September 19, 2017

1 September 19, 2017

$62bn$88bn

$128bn

$175bn

$205bn $207bn

$276bn

$317bn$291bn

$269bn

$315bn

$349bn

$287bn

$258bn(estimate)

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

0.00

100.00

200.00

300.00

400.00

500.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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). Excludes large hydro.

Global new clean energy investment and capacity installations

$300 billion


$62bn$88bn

$128bn

$175bn

$205bn $207bn

$276bn

$317bn$291bn

$269bn

$315bn

$349bn

$287bn

$258bn(estimate)

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

0.00

100.00

200.00

300.00

400.00

500.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

0.00

100.00

200.00

300.00

400.00

500.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

20GW

88GW

160GW

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). Excludes large hydro.

Global new clean energy investment and capacity installations

$300 billion


Source: ABC Australia, Independent, Bloomberg, Oilprice.com

Plenty of good news – 1


Source: Businessgreen, FT, Bloomberg, BBC



Source: The Telegraph, Bloomberg, The Economist



President Trump

Source: White House


Trump on climate December 2009

If we fail to act now, it is scientifically

irrefutable that there will be catastrophic

and irreversible consequences for

humanity and our planet.

Donald J. Trump

Donald J. Trump Jr

Eric F. Trump

Ivanka M. Trump

Image: New York Times


Trump on climate 6 November 2012

The concept of global warming was

created by and for the Chinese in order to

make U.S. manufacturing non-

competitive.

Donald Trump

US Presidential CandidateImage: IBTimesUK


Trump on climate February/March 2017

Source: White House, EPA


The United States will withdraw from the

Paris Climate Accord.

Trump on climate 1 June 2017

Donald Trump

US PresidentImage: Bloomberg


Trump on climate 16 September 2017

The U.S. has stated that they will not

renegotiate the Paris accord, but they will

try to review the terms on which they

could be engaged under this agreement.

Miguel Arias Cañete

European Commissioner for Climate Action and Energy

Wall Street Journal Image: European Union



The President said he's open to finding

those conditions where we can remain

engaged with others on what we all agree

is still a challenging issue.

Rex Tillerson

US Secretary of StateImage: US Department of Energy


There has been no change in the United

States' position on the Paris agreement.


Sarah Huckabee Sanders

White House Press SecretaryImage: Washington Examiner


Source: Emojipedia

The world’s response to Trump on climate

¯\_(ツ)_/¯


Source: NASA

The world in 2004…


Source: EIASource: EIA

IEO 2004 world coal and gas consumption

EIA global energy mix and fuel consumption forecastGlobal energy consumption mix

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2010 2015 2020 2025

Renewables

Nuclear

Coal

Natural Gas

Oil

0

20

40

60

80

100

120

140

160

180

2000 2005 2010 2015 2020 2025

Quadrillion Btu

Coal

Natural Gas


0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015

$/bbl real 2000

Source: Bloomberg New Energy Finance, IEA

Oil price history and 2004 forecast

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015

Axis title (units)

IEA WEO 2004 oil price forecast

EIA 2004 oil price forecast


Source: Bloomberg New Energy Finance, EIASource: Bloomberg New Energy Finance

Global gas price benchmarks, 1990-2004 Net U.S. LNG imports

Gas prices and U.S. imports

0

2

4

6

8

10

12

14

1990 1995 2000

$/MMBtu

Japan cif

Germany averageborder price

NBP

Henry Hub

0

1

2

3

4

5

6

1995 2000 2005 2010 2015 2020 2025

Trillion cubic feet

2004 EIA forecast


Source: International Atomic Energy Agency; Bloomberg New Energy Finance

Nuclear was about to undergo a renaissance

Reactors in

operation in 2010

Reactors

expected to be in

operation by 2025

New nuclear powers


0

50

100

150

200

250

300

350

1990 1995 2000 2005 2010 2015 2020 2025 2030

GW installed

WEO 2004 forecast

0

50

100

150

200

250

300

350

1990 1995 2000 2005 2010 2015 2020 2025 2030

GW installed

WEO 2004 forecast


Wind

IEA Outlook for renewables in 2004 – cumulative capacity


Solar


0

2

4

6

8

10

12

14

1990 1995 2000 2005 2010 2015 2020 2025 2030

Capacity additions per year (GW)

2004-10

2011-20

2021-30

0

2

4

6

8

10

12

14

1990 1995 2000 2005 2010 2015 2020 2025 2030

Capacity additions per year (GW)

2004-10

2011-20

2021-30


Solar

IEA outlook for renewables in 2004 – annual additions


Wind


Source: Bloomberg New Energy FinanceSource: Bloomberg New Energy Finance

Wind Solar

Wind and solar costs

16

32

64

128

256

512

1,024

100 1,000 10,000 100,000

1985

1994

1999

2004

eur/MWh

Cumulative capacity (MW)

2004 wind

LCOE

€150/MWh

0.1

1

10

100

1 10 100 1000 10000

2003

1976

1985


$/W

2004 c-Si

module price

$4.1/W


Source: DOE, European Hydrogen & Fuel Cell Technology Platform, Juhani Laurikko (Premia-EU)

H2FC vehicle targets for 2020 in 2004

“Fuel cell vehicles will probably overtake gasoline-

powered cars in the next 20 to 30 years

Takeo Fukui, Managing Director,

Research and Development, Honda Motor Co., Bloomberg

News, June 5, 1999

“Fuel cells will power cars with little or no waste at all.

We happen to believe that fuel cell cars are the wave

of the future; that fuel cells offer incredible opportunity.

US President George W. Bush, February 25, 2002

5m2.5m

5m

(m vehicles)


0

20

40

60

80

100

120

140

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

TWh per year

Europe

North America

Asia-Pacific

Latam

Africa

Middle East

Source: Bloomberg New Energy Finance, BP Statistical Review of World Energy

Renewable electricity generation by region, 1990-2004


Source: BBC

EU leadership from 2004


Not everyone agreed with the orthodoxy…

© New Energy Finance

The world in 2004

Source: New Energy Finance

Problems Opportunities

• Breakthroughs in material sciences

• Experience curves

• Low-cost communications

• Energy deregulation

• Innovation/entrepreneurship

• Availability of capital

• Climate Change

• Second Gulf War

• Aging power infrastructure(developed world)

• Brownouts(industrialising countries)

• Energy poverty(poorest countries)

• Rise of China


Evolution of wind turbine heights and output

20001995199019th C

300m

200m

100m

1-12kW0.5 MW

1.2 MW2 MW

Sources: Various; Bloomberg New Energy Finance



2000 20051995199019th C

300m

200m

100m

1-12kW0.5 MW

1.2 MW2 MW

4 MW




2000 2005 20101995199019th C

300m

200m

100m

1-12kW0.5 MW

1.2 MW2 MW

4 MW

7 MW




20152000 2005 20101995199019th C

300m

200m

100m

1-12kW0.5 MW

1.2 MW2 MW

4 MW

7 MW 9 MW




202520152000 2005 20101995199019th C

300m

200m

100m

1-12kW0.5 MW

1.2 MW2 MW

4 MW

7 MW 9 MW

13-15 MW



Source: A. J. Nozik, NREL

Solar cost information2004-style

© New Energy Finance

New Energy Finance: the Thesis

Fundamental re-engineering of the world’s energy

industry around low carbon solutions and architecture

Will require trillions

of dollars

Will take decades

Will be funded

mainly by world’s

capital markets

Source: New Energy Finance 2008


Image: NASA

The world today…


0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015

$/bbl real 2000

Source: Bloomberg New Energy Finance, EIA

Oil price

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015

Axis title (units)

IEA WEO 2004 oil price forecast

EIA 2004 oil price forecast

0

20

40

60

80

100

120

1990 1995 2000 2005 2010 2015

$/bbl real 2000


Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

US Projected net imports of LNG 1997-2030

-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

2004

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015

2016

2017

Actual

-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

2004

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015

2016

2017

Actual

Import

er

Export

er




-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

2004

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015

2016

2017

Actual

-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

2004

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015

2016

2017

Actual

Import

er

Export

er



US Projected net imports of LNG

-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

2004

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015

2016

2017

Actual

-6

-4

-2

0

2

4

6

8

1995 2000 2005 2010 2015 2020 2025 2030

Trillion cubic feet

2004

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015

2016

2017

Actual

Import

er

Export

er


Source: Bloomberg New Energy Finance, BP Statistical Review

Gas prices

0

2

4

6

8

10

12

14

16

18

1990 1995 2000 2005 2010 2015

$/MMBtu

Japan cif


NBP

Henry Hub

0

2

4

6

8

10

12

14

16

18

1990 1995 2000 2005 2010 2015

$/MMBtu

Japan cif


NBP

Henry Hub


01,0002,0003,0004,0005,0006,0007,000

1993 1999 2005 2011

Asia Pacific Africa Middle East Europe & Eurasia S & Cent. America North America

Source: Bloomberg New Energy Finance, BP Statistical ReviewNote: Adjusted to standard coal equivalent

Coal production Coal consumption

Coal has peaked

0

1,000

2,000

3,000

4,000

5,000

6,000

1990 1995 2000 2005 2010 2015

Mt/yr

0

1,000

2,000

3,000

4,000

5,000

6,000

1990 1995 2000 2005 2010 2015

Mt/yr



Wind Solar

0.1

1

10

100

1 100 10000 1000000

2003

1976

1985

2008


2015

2017(estimate)

$/W

Wind and solar experience curves

16

32

64

128

256

512

1,024

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

1985

20252014Learning rate =19%R² = 0.91

1999

2009

eur/MWh


Learning rate = 19% Learning rate = 24-28%


Source: Bloomberg New Energy Finance; Images Siemens; Wikimedia Commons; Masdar

Unsubsidised clean energy world records 2017

Country:

Bidder:

Signed:

Construction:

Price:

Morocco

Enel Green Power

2016

2018

US$ 3.0 c/kWh

Solar PV Onshore wind Offshore wind

Country:

Bidder:

Signed:

Construction:

Price:

United Arab Emirates

Marubeni and Jinko Solar

2017

2019

US$ 2.42 c/kWh

Country:

Bidder:

Signed:

Construction:

Merchant Price:

Germany

DONG/EnBW

2016

2024

US$ 4.9 c/kWh


Source: IEA World Energy Outlook

Global cumulative wind installations Annual wind additions

IEA wind capacity forecast evolution

Note: 2004-2009 Reference, 2010-2016 New Policies Scenario

02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016

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






02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016

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






02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016

0

10

20

30

40

50

60

70

80

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW per year

0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW installed






02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016

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


Source: IEA World Energy OutlookNote: 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




02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



0

10

20

30

40

50

60

70

80

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW per year

0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW installed




02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



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




02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



0

10

20

30

40

50

60

70

80

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW per year

0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW installed




02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



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




02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



0

10

20

30

40

50

60

70

80

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW per year

0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW installed




02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



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


0

10

20

30

40

50

60

70

80

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW per year



02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW installed




02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



0

10

20

30

40

50

60

70

80

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW per year

0

200

400

600

800

1,000

1,200

1,400

1,600

2000 2005 2010 2015 2020 2025 2030 2035 2040

GW installed




02004006008001,0001,2001,4001,600GW installed

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016



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


Note: Excludes large hydro Source: Bloomberg New Energy Finance

Renewable energy proportion of power generation, 2006-16

Lowest

Mid

Highest

No data

13%

30%

Spain

3%12%

Australia

6%

18%

Brazil

5% 6%

Canada

6%10%

China

9%

29%

Germany2%

25%

UK

4% 6%

India12%

25%

Italy

7%12%

Japan

3%9%

US

1% 3%

South Africa


Source: Bloomberg New Energy Finance

Fuel cell vehicles (thousand units)Electric vehicles (thousand units)

FCV vs. BEV sales

0

50

100

150

200

250

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2014 2015 2016 2017

0

50

100

150

200

250

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2014 2015 2016 2017


Photos: Wikimedia Commons; DigitalGlobe; Pete Marovich/Bloomberg; KAL/Economist

Black Swans

Fracking Fukushima Elon Musk


$1.5 billion

The price of failure

Source: Various, Bloomberg New Energy Finance Solar Spot Survey

PV grade silicon price index, 2000-2017

0

50

100

150

200

250

300

350

400

2000 2004 2008 2012 2016

$/kg


$48 billion

The price of failure

81 September 19, 2017 Image: various company sources

Investment Pte

Coal bankruptcies, 2011-2017

STOWE Global Coal Index, 2011-17

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2011 2012 2013 2014 2015 2016 2017

-75% in six

years


Source: Bloomberg New Energy Finance, Haynes and Boone LLP

US oil and gas company bankruptcy filings, 2015-present

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Jan 15 Jul 15 Jan 16 Jul 16 Jan 17

Cumulative outstanding debt of U.S. E&P companies under Chapter 11 protection ($ million)

Unsecureddebt

Secureddebt

$79bn of debt

in Chapter 11



German utility balance sheet write-downs

E.ON/Uniper

RWE/Innogy

Vattenfall

EnBW

0

10

20

30

40

50

60

70

2010 2011 2012 2013 2014 2015 2016

Cumulative (€ billions)

$66bn of

write-downs


0

100

200

300

400

500

600

700

800

2000 2005 2010 2015

Saudi Arabia reserve foreign exchange holdings ($bn)

Saudi Arabia’s forex reserves

Source: Bloomberg New Energy Finance, The Economist

Oil Minister Al Naimi

declares market share

war on US shale oil

$240bn

decline in fx

reserves


Some people are still calling it wrong

The social cost of renewable energy

should include the cost of stranding

thermal power and coal assets.

Arvind Subramanian

Chief Economic Advisor

Indian Government Image: Financial Express


Some people are not wrong but misleading

Solar and wind is taking over the world.

We hear it all the time. Only it is wrong -

now 0.6%, 2040 2.9%.

Bjørn Lomborg

visiting professor at the Copenhagen Business School

President of the Copenhagen Consensus Center Image: Lomborg.com


Source: Lawrence Livermore National Lab

Sankey for the U.S. in 2016 68% of primary

energy is

wasted…

…almost all

of it from

coal, oil, gas

and nuclear



Coal

Gas

Oil

Nuclear

Other RE

IEA NPS 2014Primary Energy

Coal

Oil

Nuclear

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Coal

Gas

Oil

Nuclear

Other RE

IEA NPS 2040Primary Energy

Coal

Gas

Oil

NuclearOther RE

IEA NPS 2040 FinalEnergy

Coal

Gas

Oil

Nuclear

Other RE

Wind

Solar

IEA NPS 2040Electricity

Coal

Gas

Nuclear

Other RE

Wind

Solar

BNEF NEO 2040Electricity

Coal

Gas

Oil

Nuclear

Other RE

Wind

IEA NPS 2014Electricity

Contribution of wind and solar2.9% 34%6.0%0.6% 16%4%


Image: NASA

The world in 2040


Solar and wind dominate the future of electricity

Coal30%

Gas24%

Oil6%

Nuclear5%

Hydro17%

Onshore wind7%

Utility-scale PV3%

Small-scale PV2%

6,719GW

Coal13%

Gas14%

Nuclear3%

Hydro12%Onshore

wind14%

Utility-scale PV

22%

Small-scale PV

10%

13,919GW

Flexible capacity

Global cumulative installed capacity:

2016

Global cumulative installed capacity:

2040

Source: Bloomberg New Energy Finance, NEO 2017

https://www.bnef.com/core/new-energy-outlook





Solar and wind attract 60% of new investment in power generating capacity

Fossil fuels14%

Zero-carbon86%

$10.2 trillion

$3.3

$2.8

$1.4

$1.1

$0.8

$0.7

Wind

Solar

Nuclear

Hydro

Gas

Coal

($ trillion - 2016 real)

Investment, by technology, 2017-2040 Investment, by technology, 2017-2040





China U.S.

Tipping point 1: new vs new

Utility-scale PV

Coal

Onshore wind

CCGT

0

20

40

60

80

100

120

140

160

180

2017 2020 2025 2030 2035 2040

$/MWh (real 2016)

Utility-scale PV

Coal

Onshore wind

CCGT

0

20

40

60

80

100

120

2017 2020 2025 2030 2035 2040

$/MWh (real 2016)





Japan India

Tipping point 1: new vs new

Utility-scale PV

Coal

Onshore wind

CCGT

0

50

100

150

200

250

2017 2020 2025 2030 2035 2040

$/MWh (real 2016)





Germany China

Tipping point 2: new vs existing

Utility-scale PV

Coal

Onshore wind

CCGT

0

20

40

60

80

100

120

2017 2020 2025 2030 2035 2040

$/MWh (real 2016)

Utility-scale PV

Coal

Onshore wind

CCGT

0

10

20

30

40

50

60

70

80

90

100

2017 2020 2025 2030 2035 2040

$/MWh (real 2016)




0

1,000

2,000

3,000

4,000

5,000

6,000

2012 2016 2020 2025 2030 2035 2040

TWh


Coal generation Coal generation

Poor outlook for coal in U.S., Europe and China

0

1,000

2,000

3,000

4,000

5,000

6,000

2012 2016 2020 2025 2030 2035 2040

TWh

U.S.

Europe

China

India

SE Asia +50%

+132%



Incremental change in gas consumption Incremental change in generation

Gas plays an important role, but its not bulk energy

-120

-80

-40

0

40

80

120

2017-20 2021-25 2026-30 2031-35 2036-40

China India Rest of APAC AmericasEurope ME & Africa ROW

Bcm/yr

-1,200

-800

-400

0

400

800

1,200

2021-2025 2026-2030 2031-2035 2036-2040

Δ generation (TWh)

Coal Gas



Top 5 markets in 2040

China 343GW

U.S. 200GW

India 127GW

Japan 62GW

Germany 30GW

Demand response and batteries meet peak and balance the grid

0

200

400

600

800

1,000

1,200

2012 2016 2020 2025 2030 2035 2040

GW

Other flexiblecapacity

Demandresponse

Utility-scalebatteries

Small-scalebatteries



Image: NASA

We need to talk about Europe



BNEF New Energy Outlook: Europe

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

200

400

600

800

1,000

1,200

1,400

1,600

2015 2020 2025 2030 2035 2040

Cumulative installed capacity (GW)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

200

400

600

800

1,000

1,200

1,400

1,600

2015 2020 2025 2030 2035 2040

Cumulative installed capacity (GW)

Other flexible capacityDemand responseUtility-scale batteriesSmall-scale batteriesOtherSolar thermalSmall-scale PVUtility-scale PVOffshore windOnshore windBiomassGeothermalHydroNuclearOilGasCoalVariable renewables share

Penetration of variable renewables

BNEF predicts

50% renewables

penetration in

Europe by 2040


Source: New Energy Finance

European policy environment

“Stability of incentive programmes,

planning processes & regulations is a

big barrier to investment”

8 December 2005


Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

New investment in clean energy ($bn)

Europe, Middle East & Africa

AmericasAsia-Pacific

$50bn

Q1 2004






$50bn

Q2 2004






$50bn

Q4 2004






$50bn

Q1 2005






$50bn

Q2 2005






$50bn

Q3 2005






$50bn

Q4 2005






$50bn

Q1 2006






$50bn

Q2 2006






$50bn

Q3 2006






$50bn

Q4 2006






$50bn

Q1 2007






$50bn

Q2 2007






$50bn

Q3 2007






$50bn

Q4 2007






$50bn

Q1 2008






$50bn

Q2 2008






$50bn

Q3 2008






$50bn

Q4 2008






$50bn

Q1 2009






$50bn

Q2 2009






$50bn

Q3 2009






$50bn

Q4 2009






$50bn

Q1 2010






$50bn

Q2 2010






$50bn

Q3 2010






$50bn

Q4 2010






$50bn

Q1 2011






$50bn

Q2 2011






$50bn

Q3 2011






$50bn

Q4 2011






$50bn

Q1 2012






$50bn

Q2 2012






$50bn

Q3 2012






$50bn

Q4 2012






$50bn

Q1 2013






$50bn

Q2 2013






$50bn

Q3 2013






$50bn

Q4 2013






$50bn

Q1 2014






$50bn

Q2 2014






$50bn

Q3 2014






$50bn

Q4 2014






$50bn

Q1 2015






$50bn

Q2 2015






$50bn

Q3 2015






$50bn

Q4 2015






$50bn

Q1 2016






$50bn

Q2 2016






$50bn

Q3 2016






$50bn

Q4 2016






$50bn

Q1 2017






$50bn

Q2 2017


0

20

40

60

80

100

120

140

2005

2008

2011

2014

0

20

40

60

80

100

120

140

2005

2008

2011

2014

0

20

40

60

80

100

120

140

2005

2008

2011

2014

0

20

40

60

80

100

120

140

2005

2008

2011

2014

0

20

40

60

80

100

120

140

2005

2008

2011

20

14

0

20

40

60

80

100

120

140

2005

2008

20

11

2014

0

20

40

60

80

100

120

140

2005

20

08

2011

2014

0

20

40

60

80

100

120

140

2005

2008

2011

2014

0

20

40

60

80

100

120

1402005

2008

2011

2014

0

20

40

60

80

100

120

140

2005

2008

2011

2014

Mt coal per year

EU member state coal consumption 2000-16

Source: Bloomberg New Energy Finance, BP Statistical Review

Germany Poland UK GreeceCzech Rep BulgariaSpain Italy Romania Netherlands


Source: UBA; BNEF

Germany CO2 emissions

0

200

400

600

800

1000

1200

1400

1990 1995 2000 2005 2010 2015

MtCO2e

Other Waste AgricultureHouseholds Industry FugitiveTransport Manufacturing and construction Heat and power

Total emissions

Power sector

German

emissions

have been flat

since 2010


Source: Bloomberg New Energy Finance. Note: Axes show percentage of generation mix, bubble shows total carbon emissions; Coal and gas

generation data is for 2015.

Europe generation mix and emissions

2030 range

0 100 200 300

Portugal

Romania

Bulgaria

Netherlands

Greece

Czech Rep

Spain

Italy

UK

Poland

Germany

0 50 100 150

Portugal

Romania

Greece

Ireland

Belgium

France

Germany

Netherlands

Spain

UK

Italy

Coal (TWh) Gas (TWh)

100% zero carbon

100% gas100% coal

1GtCO2e

2015



EU ETS price projection

0

5

10

15

20

25

30

35

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

202

1

20

22

202

3

202

4

202

5

202

6

202

7

202

8

202

9

203

0

EUR per metric ton, nominal

No EU ETS Brexit

EU ETS Brexit

H1 2017

Historical Forecast


Source: Bloomberg New Energy Finance EVO 2017

Annual global light duty vehicle sales Global light duty vehicle fleet

Electric vehicle outlook to 2040

3%8%

24%

43%

54%

0

20

40

60

80

100

120

140

2015 2020 2025 2030 2035 2040

million vehicles

ICE sales EV sales

1%2%

7%

19%

33%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2015 2020 2025 2030 2035 2040

million cars on road

ICE fleet EV fleet

https://www.bnef.com/core/insights/16639


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



0 50 100 150 200 250 300 350

Small vans

Runabouts

Hatchbacks

Sedans

Sports cars

SUVs/Trucks

Source: Bloomberg New Energy

Finance, Images various.

Notes: Not exhaustive.

(*) Range is estimate

BEV model availability, 2008-20

Venturi Fetish Tesla Roadster

20082009

Mitsubishi i-MiEV

BMW mini e

Smith Edison

2010Ford Transit

M-B E-CellHyundai

BlueOn

Nissan Leaf

Kia Ray

2011

Ford Focus

Renault KangooM-B Vito

BYD e6

Renault Fluence

2012Renault Twizy

Smart

ForTwo

Fiat 500e

Renault Zoe ZE

Tesla Model S

Toyota

RAV4

Honda Fit

CODA EV

2013Peugeot Partner

Exagon Furtive

M-B SLS eDrive

BMW i3

Chevy Spark

Mahindra e2o

VW

e-Up

2014

VW e-Golf

Nissan NV200

M-B B-Class

JAC iEV4

2015Kandi Panda Bollore

Bluesummer

Mullen 700e

ChangAn

Eado

2016

Chevy Bolt

Audi R8 E-tron

BYD T3

Mahindra eVerito

2017

Qianto Q50

Aston Martin

RapidE

Tesla Model 3

Hyundai Ioniq

2018

Land Rover

Defender

Honda Clarity

2019

Porsche E-sport

M-B EQ

Jaguar

I-Pace

Mitsubishi eX

2020

Tesla Roadster

GLM G4

VW e-Bulli

BAIC EU260

Geely Emgrand

Audi E-tron

Sportback

VW I.D.

VW I.D. CROZZ

NIO ES8*

Tesla Roadster*

ChangAn EM80

VW I.D. BUZZ

Renault DeZir

Trumpchi

GS4

SAIC E-Lavida

Tata

IRIS

VW I.D.*

Audi E-tron

Quattro

Tesla

Model Y*

BYD e5

Volvo 40.2*

Tesla

pickup*

Nissan Leaf 2*

Lucid Air

+ miles range per charge

Faraday

FF91

NIO EVELeEco LeSEE

Chehejia

SUV*

BMW i5

Seat Mii*

Tesla

Model XVW

Budd-e

NIO EP9


Battery availability and prices

Global EV Li-ion manufacturing capacity

Source: Bloomberg New Energy Finance EVO 2017

103 103

36

131

2017 2021 expected

GWh

Announced

Underconstruction

Commissioned

103

271

Global EV charging points installed

28

98

137151

225

363

2011 2012 2013 2014 2015 2016

Thousand units installed

Other

Germany

France

Norway

UK

Netherlands

Japan

US

China

+248% +40% +61%+49%+10%



Image: NASA

The big challenge


Source: Bloomberg New Energy Finance, various

High renewable penetrations9 July 2015

Denmark

140% wind

May 2016

Germany

67% wind & solar

25 December 2016

Scotland

153% wind

23 March 2017

CAISO

46% wind & solar

9 April 2017

UK 56%

wind & solar

13 February 2017

SPP

52% wind

26 December 2014

South Australia

61% wind & solarNovember 2015

Spain

70% windNovember 2017

ERCOT

45% wind


Future power supply


-30.0

-10.0

10.0

30.0

50.0

70.0

90.0

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

GW

Peaking fossil Baseload fossil Nuclear CHP Hydro Baseload RE Solar Wind Pumped hydro generation/Storage Imports Exports/curtailment/DR

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


Winter

Summer

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


Low carbon generation

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


Flexible generation

=

=

+

+

Total generation


Future power supply


-30.0

-10.0

10.0

30.0

50.0

70.0

90.0


GW

Peaking fossil Baseload fossil Nuclear CHP Hydro Baseload RE Solar Wind Pumped hydro generation/Storage Imports Exports/curtailment/DR

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


Winter

Summer

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


Low carbon generation

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


Flexible generation

=

=

+

+

Total generation


-50

-40

-30

-20

-10

0

10

20

30

Monday Tuesday WednesdayThursday Friday Saturday Sunday

-50

-40

-30

-20

-10

0

10

20

30


-50

-40

-30

-20

-10

0

10

20

30


Capacity market

Interconnections

Curtailment

Two visions of the futureOption B: Demand-Led

-50-40-30-20-100102030


Storage/DR Peaking fossil Exports/Curtailment

Option A: Capacity markets

“Central planning lite” “Telecoms deregulation lite”



Source: Bloomberg New Energy Finance, Tesla, Wallpaper Mania, Cleantechnica

New orthodoxyBy 2040…

1/3 of electricity

will be wind and

solar

1/3 of cars and

light trucks will be

electric

The global

economy will be

1/3 more energy

efficient

Shipping/air/freight

Land-use/deforestation

Petrochemicals

Industry

Energy access

Heat

…too hard


0

20

40

60

80

100

120

2014 2020 2025 2030 2035 2040

Rebased to 100 in 2014

IEA NPS total emissions

IEA NPS power sector emissions

BNEF NEO emissions


New orthodoxy

Prove

it

wrong!


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