Preparing for the Future of Energy BloombergNEF's New Energy Outlook

Transcription

1 Preparing for the Future of Energy BloombergNEF's New Energy Outlook Michael Steele October 11, 218

2 Introduction: Bloomberg NEF Who we are 1 October 11, 218

3 Introduction: Bloomberg NEF 5 Bloomberg research professionals in 19 locations* 21 San Francisco North America Houston London Zurich New York Washington DC 16 Europe Munich Milan Dubai Beijing New Delhi Mumbai 95 Hong Kong Asia Pacific Seoul Tokyo Shanghai 3 Africa Singapore 6 South America Sao Paulo Cape Town Sydney * Part of the Bloomberg LP network of 19, employees in 176 locations. 2 October 11, 218

4 Introduction: Bloomberg NEF The comprehensive Bloomberg research solution Primary research In-depth analysis on clean energy, advanced transport, commodities, and emerging technologies BNEF 2 research professionals in 16 locations Generating over 7 insight reports annually Proprietary data, forecasts, and analysis Investment research Analysis on 1,8 companies across 1 sectors Bloomberg Intelligence 3 research professionals in 12 locations Generating over 1 research notes a day Analyst-curated third-party and companyreported data News, data & analytics Leading global financial information provider Companies Commodities Bloomberg Economics 19, employees in 176 locations 5, Bloomberg News stories a day Third-party and public data Terminal & Excel tools and analytics 3 October 11, 218

5 Introduction: Bloomberg NEF Bloomberg NEF primary research Clean Energy Advanced Transport Solar Wind Storage Decentralized Frontier Impact on Energy Power Power & Utilities Electrified Transport Autonomous Driving Shared Mobility Impact on Transport Impact on Oil & Power Commodities Digital Industry LNG & Gas Oil & Products Power Carbon Internet of Things Automation & Advanced Analytics Advanced Materials Impact on Industrials and Energy 4 October 11, 218

6 The Road So Far Recent evolution of energy in the U.S. 5 October 11, 218

7 The world in 24 Source: NASA 6 October 11, 218

8 U.S. faced gas scarcity Global gas price benchmarks, $/MMBtu 14 Net U.S. LNG imports Trillion cubic feet Japan cif Germany average border price NBP Henry Hub EIA forecast Source: Bloomberg New Energy Finance 7 October 11, 218 Source: Bloomberg New Energy Finance, EIA

9 Impending nuclear renaissance Reactors in operation in 21 Reactors expected to be in operation by 225 New nuclear powers Source: International Atomic Energy Agency; Bloomberg New Energy Finance 8 October 11, 218

10 Wind expected to increase Wind turbine capacity Global cumulative wind installation WEO 24 forecast Sources: Various; Bloomberg New Energy Finance 9 October 11, 218 Source: Bloomberg New Energy Finance, IEA

11 Solar expected to increase Solar costs $/W c-si module price $4.1/W Global cumulative solar installation WEO 24 forecast Cumulative capacity (MW) Source: Bloomberg New Energy Finance Source: Bloomberg New Energy Finance, IEA 1 October 11, 218

12 The world today Source: NASA 11 October 11, 218

13 Shale changed the story on gas Photos: Wikimedia Commons; DigitalGlobe; Pete Marovich/Bloomberg; KAL/Economist 12 October 11, 218

14 Shale production has boomed U.S. natural gas production Natural gas production (Bcfd) Bcfd Bcfd, 5% 15x increase Other lower 48 Shale 38Bcfd, 49% Source: Bloomberg New Energy Finance, EIA 13 October 11, 218

15 And gas prices have fallen Global natural gas prices $/MMBtu Japan cif Germany average border price NBP Henry Hub Source: Bloomberg New Energy Finance, BP Statistical Review 14 October 11, 218

16 Turning the U.S. into a gas exporter U.S. trade balance of natural gas Volume (Bcfd) Exports to Canada Exports to Mexico LNG exports Imports from Canada LNG imports Net exports* Exports Imports Source: Bloomberg Terminal, EIA Note: *Net export line shows the six-month rolling average. 15 October 11, 218

17 Nuclear growth never showed up Photos: Wikimedia Commons; DigitalGlobe; Pete Marovich/Bloomberg; KAL/Economist 16 October 11, 218

18 Japan s nuclear power shut down Japanese active nuclear capacity and power generation GW 6 TWh 3 5 Generation (right) Capacity (left) Source: Bloomberg New Energy Finance. Note: For generation output calculation, we assume 1% utilization ratio and an operation cycle of 13 consecutive months followed by a three-month shutdown for regular inspection. 17 October 11, 218

19 U.S. nuclear and coal economics U.S. coal and nuclear operating margins Capacity (MW) Coal Nuclear 18 October 11, 218 Source: BNEF. Coal covers historical performance. Nuclear estimates based on Bloomberg Fair Value curves.

20 Renewable growth accelerates Photos: Wikimedia Commons; DigitalGlobe; Pete Marovich/Bloomberg; KAL/Economist 19 October 11, 218

21 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 2 October 11, 218

22 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 21 October 11, 218

23 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 22 October 11, 218

24 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 23 October 11, 218

25 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 24 October 11, 218

26 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 25 October 11, 218

27 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 26 October 11, 218

28 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 27 October 11, 218

29 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 28 October 11, 218

30 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 29 October 11, 218

31 IEA wind capacity forecast evolution Global cumulative wind installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual wind additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 3 October 11, 218

32 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 31 October 11, 218

33 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 32 October 11, 218

34 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 33 October 11, 218

35 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 34 October 11, 218

36 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 35 October 11, 218

37 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 36 October 11, 218

38 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 37 October 11, 218

39 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 38 October 11, 218

40 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 39 October 11, 218

41 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 4 October 11, 218

42 IEA solar capacity forecast evolution Global cumulative solar installations 1, 1,2 1,4 1, ,6 1,4 1,2 1, Annual solar additions GW per year Historical Note: Reference, New Policies Scenario Source: IEA World Energy Outlook 41 October 11, 218

43 Curve Ball: Batteries Photos: Wikimedia Commons; DigitalGlobe; Pete Marovich/Bloomberg; KAL/Economist 42 October 11, 218

44 BNEF EV lithium-ion battery pack price survey results Battery pack price ($/kwh) 1, 2% 2% % 599 1% 54 35% 35 22% % Source: Bloomberg New Energy Finance 43 October 11, 218

45 Electric vehicle sales are accelerating Time to sell one million electric vehicles First million 2 years Second million 18 months Third million 8 months Source: Bloomberg New Energy Finance 44 October 11, 218

46 Electric vehicle sales are accelerating Time to sell one million electric vehicles First million 2 years Second million 18 months Third million 8 months Source: Bloomberg New Energy Finance 45 October 11, 218

47 Electric vehicle sales are accelerating Time to sell one million electric vehicles First million 2 years Second million 18 months Third million 8 months Source: Bloomberg New Energy Finance 46 October 11, 218

48 The world tomorrow? Source: NASA 47 October 11, 218

49 Renewable Energy Higher cost efficiency for wind and solar 48 October 11, 218

50 Accelerating renewable growth Historical world power generation mix NEO218 power generation mix 1% Other 9% 8% 7% Hydro Nuclear Wind Solar 48% solar & wind 6% Oil 5% Gas 64% renewables 4% 3% 2% 1% Coal 29% fossil fuels by 25 % October 11, 218

51 Falling solar prices drive adoption Module price ($/W, 218 real) PV installed capacity (GW) 8, , 6, , Small-scale PV 4, , 2, 218e 1, Utility-scale PV , 1, 1, 1,, Cumulative capacity Historic prices (Maycock) Experience curve at 28.5% Chinese c-si module price (BNEF) 5 October 11, 218

52 Wind follows similar trend Wind turbine price (meur/mw, 217 real) 3. Wind installed capacity (GW) 3, , 2. 2,5 Offshore wind 1.5 2, 1. 1,5.5 1, 5 Onshore wind Denmark (ExTool) Germany (ExTool) US (LBL) Vestas global China (BNEF) Global (ex.asia) (BNEF) October 11, 218

53 Efficiency in wind Evolution of wind turbine heights and output 1,ft 75ft 5ft 4 MW 25ft 1-12kW.5 MW 1.2 MW 2 MW 19 th C Sources: Various; Bloomberg New Energy Finance 52 October 11, 218

54 Efficiency in wind Evolution of wind turbine heights and output 75% increase 1,ft 75ft 7 MW 5ft 4 MW 25ft 1-12kW.5 MW 1.2 MW 2 MW 19 th C Sources: Various; Bloomberg New Energy Finance 53 October 11, 218

55 Efficiency in wind Evolution of wind turbine heights and output 29% increase 1,ft 75ft 7 MW 9 MW 5ft 4 MW 25ft 1-12kW.5 MW 1.2 MW 2 MW 19 th C Sources: Various; Bloomberg New Energy Finance 54 October 11, 218

56 Efficiency in wind Evolution of wind turbine heights and output 1,ft 56% increase MW 75ft 7 MW 9 MW 5ft 4 MW 25ft 1-12kW.5 MW 1.2 MW 2 MW 19 th C Sources: Various; Bloomberg New Energy Finance 55 October 11, 218

57 Solar and wind attract 6% of new investment in power generating capacity Investment, by technology, Investment, by technology, ($ trillion real) Fossil fuels 14% Wind Solar $2.8 $3.3 $1.2 trillion Nuclear $1.4 Hydro $1.1 Zero-carbon 86% Gas $.8 Coal $.7 Source: Bloomberg New Energy Finance New Energy Outlook 217 Source: Bloomberg New Energy Finance New Energy Outlook October 11, 218

58 1: 2: 3: 4: 5: 6: 7: 8: 9: 1: 11: 12: 13: 14: 15: 16: 17: 18: 19: 2: 21: 22: 23: : How does this change power? Intraday power generation by source: Germany 22 Generation (GW) Curtailment Charging Discharging Peaker Solar Wind Baseload Nuclear Demand 57 October 11, 218

59 1: 2: 3: 4: 5: 6: 7: 8: 9: 1: 11: 12: 13: 14: 15: 16: 17: 18: 19: 2: 21: 22: 23: : How does this change power? Intraday power generation by source: Germany 24 Generation (GW) Curtailment Charging Discharging Peaker Solar Wind Baseload Nuclear Demand 58 October 11, 218

60 What about for a week? Germany low renewable generation week, 24 Generation (GW) Curtailment Charging Discharging Solar Wind Dispatchable Nuclear Demand 59 October 11, 218

61 What about for a week? Germany high renewable generation week, 24 Generation (GW) Curtailment Charging Discharging Solar Wind Dispatchable Nuclear Demand 6 October 11, 218

62 How about for the US? Daily dispatch, PJM 24 GW Flexible capacity Solar thermal Small-scale PV Utility-scale PV Offshore wind Onshore wind Biomass Geothermal Hydro Nuclear Oil Peaker Gas : 6: 12: 18: Gas Coal 61 October 11, 218

63 Energy Storage Taking advantage of fluctuating generation 62 October 11, 218

64 1: 2: 3: 4: 5: 6: 7: 8: 9: 1: 11: 12: 13: 14: 15: 16: 17: 18: 19: 2: 21: 22: 23: : How does this change power? Intraday power generation by source: Germany 24 Generation (GW) Curtailment Charging Discharging Peaker Solar Wind Baseload Nuclear Demand 63 October 11, 218

65 Energy storage tech breakdown Storage % by power output (MW) 5% 5% 3% 6% 6% 2% 19% 7% Other Flywheels Flow Batteries Storage % by energy capacity (MW) 3% 4% 3% Other 21% 23% Flywheels 3% 51% Flow Batteries 63% 87% 91% Sodium sulphur Lead-based 8% 7% 73% Sodium sulphur Lead-based Lithium-ion 27% Lithium-ion Note: excludes pumped storage 64 October 11, 218

66 Battery price declines Li-ion battery price ($/kwh) 1, implied price: $96/kWh 23 implied price: $7/kWh Observed price 18% learning rate 65 October 11, 218

67 Flexibility in electricity grids Hornsdale power reserve output on December 14, 217 Hornsdale Power Reserve responds in milliseconds (7.3MW) Gladstone coal unit spins up ~8 seconds later Source: Australian Energy Market Operator, Bloomberg New Energy Finance 66 October 11, 218

68 Decentralized Energy Stepping away from the grid 67 October 11, 218

69 Residential socket parity, 218 Value from solar energy ($/kwh, 217 real).2.15 Ge.1.5 Ch: NC SA In UAE. Sp Au Jo It Eg Al Ch: E Fr UK US:CA Ja Tu Ca Me Hu US:HI Chil Ne US:NY LCOE ($/kwh, 217 real) 68 October 11, 218

70 Residential socket parity, 235 Value from solar energy ($/kwh, 217 real) US:HI US:NY SA US:Ca U.A.E. Au Ja Eg JoIt Sp Fr Ch: E Ch: NC Al In Chil Me UK Ge Hu Ne Tu Ca LCOE ($/kwh, 217 real) 69 October 11, 218

71 Commercial socket parity, 218 Value from solar energy ($/kwh) In.5 Ge US: HI It Jo UK Sp Ne Fr Me US:CA Au Hu Ch: NC Ch: E Ca Chil SA Ja Eg Tu Al US:NY LCOE ($/kwh) 7 October 11, 218

72 Commercial socket parity, 235 Value from solar energy ($/kwh).2 In UK US:CA US:NY Me It.15 Ge Au Ne Ja Hu Fr Ch: E Chil.1 Ch: NC Tu Ca Sp LCOE ($/kwh) 71 October 11, 218

73 Decentralized energy investment Breakout by technology and region 72 October 11, 218

74 Decentralization ratio Fraction of capacity behind the meter 6% 5% 4% 3% 2% Australia Japan Thailand Brazil Mexico Germany Italy U.S. 1% China % October 11, 218

75 Global flexible capacity 74 October 11, 218

76 Electric Vehicles How far will they take us? 75 October 11, 218

77 Lithium ion battery price declines Li-ion battery pack price ($/kwh, nominal) 2% 2% 1, 7% 1% 35% % 24% October 11, 218

78 Battery price declines Li-ion battery price ($/kwh) 1, implied price: $96/kWh 23 implied price: $7/kWh Observed price 18% learning rate 77 October 11, 218

79 Global electric vehicle sales 12 million vehicles % 6 43% 28% 4 11% 2 3% PHEV sales BEV ICE sales All EVs % of sales 78 October 11, 218

80 EV electricity demand by region TWh 4, 3,5 3, 2,5 2, 1,5 1, China United States Europe India Japan South Korea Australia Rest of the World 79 October 11, 218

81 Annual U.S. EV sales forecast thousand EVs per year % % % 6% 5% PHEV % 3% 2% 1% BEV EV% of new car sales % 8 October 11, 218

82 Natural Gas & LNG Improving flexibility, connecting markets 81 October 11, 218

83 Increasing production with fewer rigs U.S. natural gas production and rig count Natural gas production (Bcfd) Other lower 48 Shale Rigs Rig count 1,8 1,6 1,4 1,2 1, October 11, 218

84 Efficiency in oil and gas Average lateral length in the Woolfcamp shale play 9, 8, 8,555ft 7, 6, 5, 4, 3, 2, 1, 4,917ft 74% increase Source: DrillingInfo, Bloomberg estimates 83 October 11, 218

85 Gas burn levels out Gas consumption (Bcm/yr) 1,6 NEO 217 forecast 1,4 1,2 Peak load fuel burn 1, RoW 8 6 Europe META CCGT fuel burn 4 Americas 2 Rest of APAC India China October 11, 218

86 Operational, under construction or post- FID Highly likely and 'likely' pre-fid Expansion of global LNG trade MMtpa West Africa Russia Australia East Africa Qatar North America Russia North America Australia Other West Africa Indonesia Indonesia Malaysia Qatar Demand - Base Demand - High Demand - Low 85 October 11, 218

87 In Summary Key takeaways from the outlook 86 October 11, 218

88 Copyright and disclaimer The Bloomberg NEF ("BNEF") service/information is derived from selected public sources. Bloomberg Finance L.P. and its affiliates, in providing the service/information, believe that the information it uses comes from reliable sources, but do not guarantee the accuracy or completeness of this information, which is subject to change without notice, and nothing in this document shall be construed as such a guarantee. The statements in this service/document reflect the current judgment of the authors of the relevant articles or features, and do not necessarily reflect the opinion of Bloomberg Finance L.P., Bloomberg L.P. or any of their affiliates ( Bloomberg ). Bloomberg disclaims any liability arising from use of this document, its contents and/or this service. Nothing herein shall constitute or be construed as an offering of financial instruments or as investment advice or recommendations by Bloomberg of an investment or other strategy (e.g., whether or not to buy, sell, or hold an investment). The information available through this service is not based on consideration of a subscriber s individual circumstances and should not be considered as information sufficient upon which to base an investment decision. You should determine on your own whether you agree with the content. This service should not be construed as tax or accounting advice or as a service designed to facilitate any subscriber s compliance with its tax, accounting or other legal obligations. Employees involved in this service may hold positions in the companies mentioned in the services/information. The data included in these materials are for illustrative purposes only. The BLOOMBERG TERMINAL service and Bloomberg data products (the Services ) are owned and distributed by Bloomberg Finance L.P. ( BFLP ) except that Bloomberg L.P. and its subsidiaries ( BLP ) distribute these products in Argentina, Australia and certain jurisdictions in the Pacific islands, Bermuda, China, India, Japan, Korea and New Zealand. BLP provides BFLP with global marketing and operational support. Certain features, functions, products and services are available only to sophisticated investors and only where permitted. BFLP, BLP and their affiliates do not guarantee the accuracy of prices or other information in the Services. Nothing in the Services shall constitute or be construed as an offering of financial instruments by BFLP, BLP or their affiliates, or as investment advice or recommendations by BFLP, BLP or their affiliates of an investment strategy or whether or not to buy, sell or hold an investment. Information available via the Services should not be considered as information sufficient upon which to base an investment decision. The following are trademarks and service marks of BFLP, a Delaware limited partnership, or its subsidiaries: BLOOMBERG, BLOOMBERG ANYWHERE, BLOOMBERG MARKETS, BLOOMBERG NEWS, BLOOMBERG PROFESSIONAL, BLOOMBERG TERMINAL and BLOOMBERG.COM. Absence of any trademark or service mark from this list does not waive Bloomberg's intellectual property rights in that that name, mark or logo. All rights reserved. 218 Bloomberg. 87 October 11, 218

89 Bloomberg NEF is a research firm that helps energy professionals generate opportunities. With a team of experts spread across six continents, BNEF provides independent analysis and insight, enabling decisionmakers to navigate change in an evolving energy economy. BNEF research and analysis is accessible via web and mobile platforms, as well as on the Bloomberg Terminal. Coverage. Renewable Energy Power & Utilities Gas Carbon Markets & Climate Negotiations Energy Smart Technologies Storage Electric Vehicles Mobility and Autonomous Driving Frontier Power Emerging Technologies Client enquiries: Bloomberg Terminal: press <Help> key twice support.bnef@bloomberg.net Learn more: