New energy realities · 2016-11-22 · New energy realities Navigating the triple transition ... Extreme Weather Events Number of natural catastrophes, 1970-2014: ... Brazil Botswana

© World Energy Council 2016 | www.worldenergy.org | @WECouncil

New energy realitiesNavigating the triple transition

Christoph Frei | Secretary General | World Energy Council

November 2016 @chwfrei

https://twitter.com/chwfrei


World population

1970-2060

0

2

4

6

8

10

12

-

2

4

6

8

10

12

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

2.0 x

1.4x

Forecast

(2015-2060)

Billi

on

s o

f P

eo

ple

Billio

ns

of P

eo

ple

Source: UN Population Forecasts to 2100

Actuals

(1970-2015)

UN Population Growth (Billions of People)

1.2x

1.6x


0,6

%

-0,4

%

2,7

%

-0,7

%

0,4

%

2,2

% 2,9

%

1,0

%

0,2

%

1,4

% 1,9

%

0,2

%

2,5

%

2,1

% 3,3

%

1,0

%

0,5

%

0,2

%

2,4

%

-0,4

%

1,0

% 2,2

%

3,0

%

1,0

%

6%

China India Germany Saudi Arabia Spain United StatesUnited

KingdomWorld

Average1000 GtCO2

by 2100

1970-2000 2000-2014 1970-2014

Growth in the past 45 years (1970-2015)

Climate Change Challenge

Carbon Intensity % reduction p.a. 1970-2015

(GtCO2/GDP USD)

Note: Positive % changes denote a reduction in CO2 per USD of GDP

Source: Total Economy Database, BP (2015) Statistical Review, IPCC (2015) “AR5, Synthesis Report”;

2015-2060

(GtCO2/GDP USD)

Note: Assumes global

GDP growth of 2.6%

De-carbonization for

1000 GtCO2


“It is not difficult to come up with plausible scenarios that fundamentally

change & challenge the conditions under which energy companies have to

operate in the next decade.”

FROM TO

big plants & upstream big data & technology

high entry barriers low entry barriers

centralised & monoculture decentralised & local empowerment

long term fixed returns rapid & flexible pay-back

operational & system excellence service brilliance

burning molecules leasing capital

traditional market design capacity & storage incentives

incorporation corporate IP venturing

global brand local trust

10 business shifts


Financing Resilient Energy Infrastructure

Extreme Weather Events

Number of natural catastrophes,

1970-2014: factor 4

Insured catastrophe losses,

1970-2014

Source: WEC Financing Resilience Report, 2015 (October

1); also Swiss Re, 2015: Sigma report No 2/2015

0

20

40

60

80

100

120

140

160

180

200

1970 1975 1980 1985 1990 1995 2000 2005 2010

Natural catastrophes

Source: Swiss Re Sigma 02/2015

• Comparing the last 5 years to the last 20 years: The occurrence of extreme

events has roughly quadrupled; according to IPCC this is largely related to the

40% increase of carbon dioxide in the atmosphere.

• From impact-resistant “hard”/‘safe-fail’ components to “soft”/‘fail-safe’ systems.

• The solution appears to be ‘smarter not stronger’.


From hard resilience to soft resilience

2015


Cyber & monoculture risks

2016

Cyber – a monoculture risk?

80’000 blacked out

hardware destroyed‘massive damage’ to

industrial equipment

critical power plant

design data stolen

Financing Resilient Energy Infrastructure

Managing Cyber Risks

© World Energy Council 2016 | www.worldenergy.org | @WECouncil© World Energy Council 2015© World Energy Council 2015© World Energy Council 2015

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climate framework

large scale accidents

economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access

energy affordability

extreme weather risks

cyber threats

corruption

terrorism

China

IndiaRussia

EU Cohesion

Middle East dynamicsUS policy

trade barriers

regional integration

market design

energy subsidies

decentralised systems

sustainable cities

energy efficiencycoal

ccs

renewable energiesbiofuels

digitalisation

innovative transport

electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

weak

signals need for action:

what keeps energy

leaders busy at work

critical uncertainties:

what keeps energy

leaders awake at night

World Energy Issues Monitor 2016

Global map


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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers

regional integrationmarket design

energy subsidies


sustainable cities


ccs


digitalisation


electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

► Key insomnia issues are of macro nature: new

growth normal, commodity price volatility, climate

framework uncertainty and regional integration /

cohesion.


Global map


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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers


energy subsidiesdecentralised systems

sustainable cities


ccs


digitalisation


electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

► Key action priorities remain constant: renewables,

energy efficiency, followed by subsidies and

electricity prices.


Global map


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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

energy access



cyber threats

corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers


energy subsidies

sustainable cities


ccs



nuclear

hydro

unconventionals

LNG

hydrogen economy


electric storage

digitalisationmarket design

► The innovation cluster continues to move up: e-

storage, digitalisation, decentralised systems.

talent


Global map: key upward trends


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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

energy access



cyber threats

corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers



sustainable cities


ccs


digitalisation


electric storage

hydro

unconventionals

LNG

hydrogen economy

nuclear

► CCS, unconventionals and nuclear and coal are

issues which have seen the biggest cooling down

over past years.

talent


Global map: key downward trends


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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

energy access



corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers



sustainable cities


ccs


digitalisation


electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

cyber threats

talent

Resilience



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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

energy access



corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers



sustainable cities


ccs


digitalisation


electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

cyber threats

talent

Resilience


© World Energy Council 2016 | www.worldenergy.org | @WECouncil© World Energy Council 2015© World Energy Council 2015

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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers


market design

energy subsidies


sustainable cities


ccs


digitalisation


electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

Venezuela United States

United Kingdom

United Arab Emirates

Tunisia

Trinidad & Tobago

Switzerland

Swaziland

SpainSouth Korea

South Africa

Singapore

Serbia

Senegal

Saudi Arabia

Russian Federation

Portugal

Peru

Norway

Nigeria

Niger

Netherlands

Mongolia

Monaco

Mexico

Malaysia

Lithuania

Lebanon

Latvia

Kenya

Jordan

Japan

Italy

Ireland

Iraq

Iran

Indonesia

India

Iceland

Hungary

Hong Kong

Ghana

Germany

Gabon

France

Finland

Ethiopia

Estonia

Ecuador

Dominican Republic

Czech Republic

Cyprus

Cote d'Ivoire

Congo (Democratic Republic of)

Colombia

China

Chad

Canada

Burkina Faso

Bulgaria

Brazil

Botswana

Bolivia

BelgiumAustria

Australia

Argentina

Algeria

© World Energy Council 2015

► Countries with highest concerns for cyber threats

are in East Asia and Europe.

cyber threats

Resilience



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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers


market design

energy subsidies


sustainable cities


ccs


digitalisation


electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

Market design


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climate framework


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

IndiaRussia

EU Cohesion


trade barriers


market design

energy subsidies


sustainable cities


ccs


digitalisation


electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

Venezuela

United States

United Kingdom

United Arab Emirates

Tunisia

Trinidad & Tobago

Switzerland

Swaziland

Spain

South Korea

South Africa

SingaporeSerbia

Senegal

Saudi Arabia

Russian Federation

Portugal

Peru

NorwayNigeria

Niger

Netherlands

Mongolia

MonacoMexico

Malaysia

Lithuania

Lebanon

Latvia

Kenya

Jordan

Japan

Italy

Ireland

Iraq

Iran

Indonesia

India

Iceland Hungary

Hong Kong

Ghana

Germany

Gabon

France

Finland

Ethiopia

EstoniaEcuador

Dominican Republic

Czech Republic

Cyprus

Cote d'Ivoire

Congo (Democratic Republic of)

Colombia

China

Chad

Canada

Burkina Faso Bulgaria

Brazil

Botswana

Bolivia

Belgium

Austria

Australia

Argentina

Algeria

► Countries with highest concerns for cyber threats

are in East Asia, North America and Europe.

Market design


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climate frameworklarge scale accidents economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

India

Russia

EU Cohesion

Middle East dynamics

US policy

trade barriersregional integration

market design

energy subsidies

decentralised systemssustainable cities

energy efficiency

coal

ccs

renewable energies

biofuels

digitalisation


electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

Estonia


► Top insomnia issues in Estonia are Russia, market

design, economic growth & climate framework.

► Key action priorities are energy subsidies, electricity

& commodity prices as well as renewables.

► Other top impact issues include EU cohesion &

regional integration as well as energy efficiency.


► Fast economic growth

► Strong technological development

► Transition to a highly productive

world

► Handles well the economic and

geopolitical shift to Asia

► Broadly addresses sustainability

► Developments on the energy

supply-side and in the mid-stream

reduce energy costs

► Greater access to energy for all

Free market driven approach to

achieving individual access and

affordability of energy through

economic growth

MODERN JAZZ

► Moderate economic growth (slower,

more sustainable, more evenly

distributed)

► Delivery of high levels of

infrastructure

► Extensive network of fiscal

incentives such as green subsidies

and carbon pricing

► Global standardization across

sectors

► Strong tech. innovation in large-

scale, integrated solutions that

drive efficiencies & reduce carbon

emissions

Government-driven approach to

achieving sustainability through

internationally coordinated politics

and practices

UNFINISHED SYMPHONY

► Stagnated economic growth

► Ineffective policies and failed

market structures

► Poverty and inequity drag down

social and economic mobility

► Weakening resilience of energy

systems

► Large scale (national) energy

solutions driven by security

concerns: hydro, nuclear, fossil

fuels

Fragmented approach driven by

desire for energy security in a

world with low global cooperation

HARD ROCK

36

Three Scenarios Stories


Energy Demand

37

Energy Demand

(‘000 MTOE)

0

2

4

6

8

10

12

14

16

18

20

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock

Energy Demand per capita

(TOE)

1,0

1,2

1,4

1,6

1,8

2,0

2,2

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock

peaking at equivalent of 2500 W


Carbon Emissions and Carbon Budget

38

0

5

10

15

20

25

30

35

40

2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock

IPCC 2°C Target

Cumulative Carbon Emissions from 2015

(Gt CO2)

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

Modern Jazz

Unfinished Symphony

Hard Rock

Annual Carbon Emissions

(Gt CO2)

Carbon

Budget

year of reaching

& exceeding

carbon budget


Energy intensity & Fossil fuel share

40

Energy Intensity

(MJ / US$ 2010 MEX)

0

1

2

3

4

5

6

7

8

9

10

11

12

13

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock

Fossil Fuel Share

(%)

40

45

50

55

60

65

70

75

80

85

90

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock


Coal and Oil Demand

41

Coal Demand

(‘000 MTOE)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock

Oil Demand

(‘000 MTOE)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock


Natural Gas & Nuclear Demand

42

Natural Gas Demand

(‘000 MTOE)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock

Nuclear Electricity Generation

(‘000 TWh)

0

1

2

3

4

5

6

7

8

9

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock


Wind & Solar Electricity

44

Wind Electricity Generation

(‘000 TWh)

0

1

2

3

4

5

6

7

8

9

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock

Solar Electricity Generation

(‘000 TWh)

0

1

2

3

4

5

6

7

8

9

1970 2000 2014 2030 2060

History

Modern Jazz

Unfinished Symphony

Hard Rock

© World Energy Council 2016 | www.worldenergy.org | @WECouncil46

Abraham Maslow, 1943

“theory on motivational

structure of a healthy

person”

ENVIRONMENT

ENERGY SECURITY

AFFORDABILE ENERGY

PYRAMID OF ENERGY

POLICY NEEDS:

LEGITIMATE

BALANCING THE

ENERGY TRILEMMA:

STRATEGIC


Energy Security

The effective management of primary energy supply

from domestic and external sources, the reliability

of energy infrastructure, and the ability of energy

providers to meet current and future demand.

Environmental Sustainability

Encompasses the achievement of supply

and demand side energy efficiencies and the

development of energy supply from renewable

and other low-carbon sources.

Energy Equity

Accessibility and affordability of energy supply

across the population.

Balancing the

‘Energy Trilemma’

ENERGYEQUITY

ENVIRONMENTALSUSTAINABILITY

World Energy Trilemma

© World Energy Council 2015


World Energy Trilemma 2016 UK

Estonia


Priority actions

To meet climate targets, development goals and balance the trilemma a focus

on a few key mechanisms is needed

• At the international level:

Trade and transfer Carbon pricing Financing

of technology and subsidies mechanisms

• At the national level:

Demand management Prioritisation of

and energy efficiency innovation and RD&D

Financing

mechanisms

Demand management

and energy efficiency

Prioritise innovation

and RD&D

Trade and transfer

of technology

Carbon

pricing

Financing

mechanisms

Demand management



and RD&D

Trade and transfer

of technology

Carbon

pricing

Financing

mechanisms

Demand management



and RD&D

Trade and transfer

of technology

Carbon

pricing

Financing

mechanisms

Demand management



and RD&D

Trade and transfer

of technology

Carbon

pricing

@chwfrei

https://twitter.com/chwfrei


Defining measures to accelerate the

energy transition

50

Documents

New energy realities · 2016-11-22 · New energy realities Navigating the triple transition ... Extreme Weather Events Number of natural catastrophes, 1970-2014: ... Brazil Botswana