Global View on Clean Energy - CEBC … · global average temperature increase of between 1°C and 2.3°C by 2100. It represents one potential pathway and is not an official IHS forecast

Confidential. © 2019 IHS Markit®. All rights reserved.

Global View on Clean Energy

CLEAN ENERGY BUSINESS COUNCIL

20 November 2019

Presented by Gauri Jauhar, Executive Director Energy Wide Perspectives, [email protected]

Presentation

mailto:[email protected]

Confidential. © 2019 IHS Markit®. All rights reserved. 22

IHS Markit / November 2019

Confidential. © 2019 IHS Markit®. All rights reserved. 33



State of Climate mitigation and efforts to combat global warming

4


What is Energy Transition?

• "Energy Transition" refers to the broad move towards a lower carbon global

economy. It describes the broad spectrum of responses by the energy industry to

Climate Change. This transition is being shaped by government policies, societal

pressures, technological changes and geopolitics.

➢ Energy Transition will change investment flows and business models in

fundamental ways

5


Planning (Rivalry) Scenario: Gas grows more than any other individual

energy source; renewables quadruple but from low starting point

6

0

1,000

2,000

3,000

4,000

5,000

6,000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Oil Natural gas Coal Hydro Nuclear Renewables* Other*** Modern biomass**

Rivalry: Primary energy demand by fuel, 1990–2050

MM

toe

© 2019 IHS Markit

Share in 2018Share in 2050

32%

26%

23%

5%

2%

26.6%

3%

5%

7%

9%

18%

27.3%

Source: IHS Markit

*Includes solar, wind, geothermal, and ocean energy.

**Includes biofuels and biomass (industry, electricity, district heat, and refining).

***Includes solid waste, traditional biomass, ambient heat, net trade of electricity, or heat.


Faster Transition (Autonomy) Scenario: Oil demand plateaus in 2026; gas

demand stable; renewables surpass coal in mid-2040s

7

0

1,000

2,000

3,000

4,000

5,000

6,000

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Oil Natural gas Coal Hydro Nuclear Renewables* Other*** Modern biomass**

Autonomy: Primary energy demand by fuel, 1990–2050

MM

toe

© 2019 IHS Markit

Share in 2018 Share in 2050

32%

26%

23%

5%

2%

Source: IHS Markit

22%

3%

7–8%

10%

18%

24%

*Includes solar, wind, geothermal, and ocean energy.

**Includes biofuels and biomass (industry, electricity, district heat, and refining).

***Includes solid waste, traditional biomass, ambient heat, net trade of electricity, or heat.


Divergence with a 2 degree scenario is likely without more radical change

0

10

20

30

40

50

60

1990 2000 2010 2020 2030 2040 2050

History Rivalry Autonomy 2°C*

Total global CO2 emissions history and outlooks

Billio

n m

etr

ic t

on

s o

f C

O₂

© 2018 IHS Markit

*This outlook is based on a model output produced by the IHSMarkit Climate and Carbon research practice to be consistent with a

global average temperature increase of between 1°C and 2.3°C by 2100. It represents one potential pathway and is not an official IHS

forecast.

Note: Represents global non-energy-related CO2, methane and nitrogen oxide (NOx) emissions combined with energy related CO2

emissions (energy emissions exclude non-CO2 emissions (e.g., methane)). For consistency, the non-energy emissions have been

converted to CO2 equivalent amounts to provide a total figure.

Please see the Energy datasets for a complete description of these emissions paths..

Source: IHS Markit

0

5

10

15

20

25

30

35

40

45

1990 2000 2010 2020 2030 2040 2050

History Rivalry Autonomy 2°C*

Energy related CO2 emissions history and outlooks

Billio

n m

etr

ic t

on

s o

f C

O₂

© 2018 IHS Markit

*This outlook is based on a model output produced by the IHSMarkit Climate and Carbon research practice to be consistent with a

global average temperature increase of between 1°C and 2.3°C by 2100. It represents one potential pathway and is not an official IHS

forecast.

Note: Represents global energy related CO2 emissions (excludes non-CO2 emissions (e.g., methane).

Please see the Energy datasets for a complete description of these emissions paths..

Source: IHS Markit

8



BP Chevron Eni Equinor ExxonMobil Repsol Shell Total S.A.

Reduce direct operational emissions

Promote natural gas and LNG

Solar

Wind

Biofuels

Geothermal

Hydropower

Power transmission/distribution

EVs/charging infrastructure

Batteries/storage

Fuel cells

Carbon capture, utilization, and storage

Nature-based solutions (carbon sinks)

Current development focus and/or stated part of current strategy

Existing area of research and/or discussed as potential investment area

Global Integrateds: Current activities in the low-carbon segment

© 2019 IHS MarkitSource: IHS Markit Note: Includes only direct investments and R&D; excludes venture capital investments.

Alternative energy/low-carbon strategies among Global IOCs vary considerably

“There is no single solution to tackling climate change. A transformation of the global energy system is needed, from

electricity generation to industry and transport", said Ben van Beurden, Shell's CEO.

9


Global state of Renewable Clean Energy Deployment and

Decarbonization efforts across the industries

10



National renewable policy targets in emerging markets

11

0%

10%

20%

30%

40%

50%

60%

% o

f re

ne

wa

ble

po

we

r g

en

era

tio

n

RES 2017 Target adjustment Existing target

12-pt - IHS stacked column

© 2018 IHS Markit

Status of long-term renewable targets (as of 1 January 2018)

2030

2017

2021

2030

2020

2037

2030

2025

2022

2025

2030

2030 2025

2025

2018

2020

2024

2025

2030

2035

Note: UAE = United Arab Emirates.

*Saudi Arabia has a 9.5 GW RET by 2023 under Vision 2030. Egypt has a hydro target of 5% of capacity by 2020. Uruguay has a 38% wind power target under the country’s 2017 90% non–fossil fuel target.

Source: IHS Markit

2030

2030

2020

2022

2050

2020 2020

2020

2020

2020

2020

Existing generation by technology (2017) and long-term renewable targets

Asia Pacific Africa and Middle East* CIS and Russia Latin America



This year saw new record low renewable tender announcements, as prices

for procured renewable energy continue to fall

12

$41

$21

$18$27

$40

$21

$19 $40

$39$39

$24

$48–66

$59–70$22

$38$46–64

$47–73

Portugal: In

August 1.4GW of

PV were awarded,

with prices as low

as EUR

14.6/MWh

China: completed its first

round of competitive tenders

France/ UK/ Netherlands:

“Subsidy free” becomes

new norm for offshore wind

tenders in Europe

United States:

GW solar +

battery project

pipeline driven

by cost-

competitive

procurement

Brazil: 211MW of

solar awarded at

17.5$. The offtake

agreement covers

30% of the physical

guarantee.

India: Recent

tariffs have

slightly shifted

upward, in light

of non-

realization risks

$48

$67

$29

$51 $38

$22

$36

$40

$25$42

$28$21

$42

$40

$98

$47

$27-37

$24

$21

$39$35

$18

$190



Renewables will account for 73% of new power generation capacity added

globally, becoming the dominant source of new generation except in India

0

400

800

1,200

1,600

2,000

Coal Gas Other conventional Renewables

Operating capacity, by source, 2017

Source: IHS Markit

Note: Rivalry scenario. Other conventional includes large hydro, nuclear, and oil. China

excluding Hong Kong, Macao, and Taiwan.

© 2019 IHS Markit

GW

-500

0

500

1,000

1,500

2,000

2,500

3,000

Coal Gas Other conventional Renewables

Net capacity additions, 2018–50

Source: IHS Markit

Note: Rivalry scenario. Other conventional includes large hydro, nuclear, and oil. China

excluding Hong Kong, Macao, and Taiwan.

© 2019 IHS Markit

GW

13


On average renewables will reach 34% of the global electricity mix by 2050,

but with large regional variations

14


Evolutionary rather than revolutionary progress expected in wind and solar

15

Timeline of solar and wind technology evolution according to asset owner interviews

© 2017 IHSSource: IHS and market interviews

Short-term (through 2025) Long-term (through 2035)

Taller towers

Longer blades

Wind + storage

Distributed wind

Airborne wind

Renewable energy for non-power generation use (Power 2 X)

Floating offshore wind

Modules & Inverters - incremental improvements in cost, efficiency, and durability (22-26% learning rate)

BoP & Installation - standardization and automation, singe-axis tracking; O&M improvements - drones,…

“System friendly” PV deployment

PV + storage (DG and utility-scale)

New cell concepts - Tandem, multi-junction & Perovskite

Quantum dots

Thermophotovoltaics

Printable PV

Hybrid resource plants: Wind + PV + storage

Win

dS

ola

r

BAU

Game changers


Role of Clean Mobility in the Global energy transition

16



Fuel economy standards—not EV penetration—have the biggest impact on

oil demand

-

10,000

20,000

30,000

40,000

50,000

60,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

LDV Global Gasoline/Diesel Demand:Rivalry LDV Gas/Diesel Demand: Constant assumptions from 2020-2050

LDV Global Gasoline/Diesel Demand:Rivalry (w/o EVs)

Global LDV gasoline and diesel demand: Rivalry

Source: IHS Markit © 2019 IHS Markit

Th

ou

sa

nd

b/d

19.8 Mb/d decrease

because of higher

fuel economy

Oil demand assuming constant fuel

economy and no EVs

8.4 Mb/d decrease

because of EVs

17



IHS view on energy transition in terms of incumbent energy

sources

18



Electrification is a key driver of the energy transition but the pace of change

in key indicators is slow

0

5

10

15

20

25

1990 2000 2010 2018

Renewables in electricity generation

Electricity share of total transportation energy demand

Electricity in final energy

Global energy transition indicators


Pe

rce

nt

19

0.00

0.10

0.20

0.30

0.40

0.50

0.60

1990 1995 2000 2005 2010 2015

Emissions intensity of power production

World power generation emissions intensity


Mil

lio

n m

etr

ic t

on

s o

f

CO

2/T

Wh



Batteries exhibit many—but not all—of the reliability attributes needed to

fully backup renewables

20

PJM’s Generator Reliability Attribute Matrix

●= Exhibits Attribute

◑= Partially Exhibits

○= Does Not Exhibit

Essential Reliability Services Fuel

Assurance

Flexibility Other

Fre

qu

en

cy

Resp

on

se

Vo

ltag

e C

on

tro

l

Fre

qu

en

cy

Reg

ula

tio

n

Co

nti

ng

en

cy

Reserv

e

Lo

ad

Fo

llo

win

g

No

t F

uel L

imit

ed

(72+

ho

urs

at

max

ou

tpu

t)

On

-sit

e F

uel

Inv

en

tory

Cycle

Sh

ort

Min

imu

m

Ru

n T

ime

(<2 h

ou

rs)

Sh

ort

Sta

rt u

p

Bla

ck S

tart

Cap

ab

le

No

En

vir

on

men

tal

Restr

icti

on

s

Av

ailab

ilit

y

(lo

w o

uta

ge r

ate

)

Resource Type

Gas Combustion Turbine ● ● ◑ ● ◑ ● ○ ● ● ● ● ◑ ◑Solar ◑ ◑ ○ ○ ◑ ○ ○ ● ● ● ○ ● ●Wind ◑ ◑ ○ ○ ◑ ○ ○ ● ● ● ○ ◑ ●Battery / Storage ◑ ◑ ● ● ○ ○ ○ ● ● ● ◑ ● ●Notes:

Source: IHS Markit, PJM

© 2019 IHS Markit

The intermittency of wind and solar requires resources capable of generating for multiple days to achieve complete reliability



Carbon capture project activity has returned to growth but remains well

behind the levels associated with low emissions cases

0

15

30

45

60

75

Mid-2013 2013-2014 Mid-2014 2014-2015 Mid-2015 2015-2016 Mid-2016 2016-2017 Mid-2017 2017-2018 Mid-2018 2018-2019 Mid-2019

Operational Construction Development Planned Proposed Removed**

Count of all large integrated CCS and CCUS projects in various stages of development, July 2019

Nu

mb

er

of

pro

jec

ts

Source: IHS Markit, The Global CCS Institute NETL CCUS Database, MIT Carbon Capture and Storage Project Database

Note: *Includes all projects in various stages of development, from early to advanced, regardless of likelihood. **Canceled, on hold, or otherwise removed for lack of credible information. Large projects capture and/or store more than 500,000 metric tons of CO2 per year.

© 2019 IHS Markit

21

Outlook to 2025: 35 projects with

maximum cumulative capacity of

~60 MMtCO2



Hydrogen is the main alternative to an ‘all electric’ scenario in Europe

The hydrogen playing field: hydrogen production and end use


Hydrogen

production

End use

Electrolysis Methane reforming with carbon

capture and storageCurtailed

electricityDedicated

Decentralized Centralized

Space

heatingTransport

Industry

High Low

Power

22



Nature based solutions hold considerable potential for emissions reductions

- but are closely linked to very high carbon price levels

23

10,137

1,462

265147

813753 130

Reforestation Natural Forest Management Improved Rice Cultivation GrazingIntensity

Peatland Restoration Avoided PeatlandImpacts

Avoided Coastal Impacts -Mangroves

Estimate of global potential nature based solution GHG reductions in 2030 under US$100 carbon price (MMtCO2e)

Source: IHS Markit, Bronson et.al.2017 © 2019 IHS Markit



Overview of the state of clean energy and renewables in MENA

24



Renewables installed capacity by market (2018 vs 2030): Middle East gains

relative share by 2030

25

7.5 GW


Morocco25%

Egypt16%

Jordan11%

UAE8%

Algeria6%

Tunisia4%

Kuwait2%

Saudi Arabia1%

Others27%

Renewables installed capacity by country (YE2018)


Egypt23%

Saudi Arabia20%

UAE15%

Morocco8%

Algeria5%

Oman4%

Jordan3%

Tunisia2%

Others20%

Renewables installed capacity by country (2030)


82.6 GW


Renewables installed capacity by technology (2018 vs 2030): Solar PV gains

share by 2030

26

7.5 GW


Solar PV48%

Wind41%

CSP11%

Renewables installed capacity by technology (YE2018)


Solar PV69%

Wind26%

CSP5%

Renewables installed capacity by technology (2030)



Large utility tenders, solar distributed generation drive growth after a slow

take-off

27

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Algeria Egypt Libya

Morocco Tunisia Saudi Arabia

UAE Kuwait Oman

Rest of Middle East

Renewables gross additions by country


MW

No national targets. Initial interest in

renewables with feasibility studies and

resource assessment

Increasing clarity on renewable

energy strategies with

government commitments to

targets and first large-scale

tenders

Implementation of large-scale projects and

growing penetration of solar-based distributed

generation


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Global View on Clean Energy - CEBC … · global average temperature increase of between 1°C and 2.3°C by 2100. It represents one potential pathway and is not an official IHS forecast