www.pwc.com Decarbonising the Energy System Power Summit 2017 17 February 2017
What I will cover 1. Scale of the challenge 2. Heat & Transport 3. Technologies 4. Roadmap 5. What Policy is needed? 2
Scale of the Challenge
Scale of the challenge Low Carbon Index 2016 4
Scale of the challenge Per capita carbon emissions Source Wikipedia data, 1990 5
Change in carbon intensity 2014 to 2015 6
Heat & Transport
Transport Forecast cost of lithium ion batteries, 2010-2030 Achieving 2050 targets built largely on: 1. Electric Vehicles for domestic and public transport 2. Biogas/H2 for fleet 1,000 900 800 700 600 500 400 300 200 100 0 /kwh Lithium ion batteries make up ~30% of the cost of an EV & these costs have been falling and are expected to continue to fall over the next 10 years 2010 2015 2020 2025 2030 Battery Costs Source: Bloomberg New Energy Finance 2016 8
Heat Insulation of residential properties in Ireland 2016-2050 (Cumulative) 000 homes 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1,918 1,793 1,718 200 39 75 129 196 279 209 232 1,483 1,380 1,207 2,043 325 430 254 1,034 2,168 450 580 276 862 2,293 575 730 298 690 2,418 700 881 321 516 2,542 825 1,031 343 343 New Energy Efficient Homes Extensive Retrofits Minor Retrofits No Retrofits 2016 2020 2025 2030 2035 2040 2045 2050 Source: ERSI, SEAI, CSO, Department of Housing 9
Technologies
Principles 1. Our context 2. Societal acceptance 3. Proven technologies 4. Making best use of what we have 11
Roadmap
Power system in 2050 Installed capacity 2016 Installed capacity 2030 Installed capacity 2050 1.9 1.0 0.5 1.7 1.4 2.5 3.4 [VALUE]GW 1.1 2.0 1.0 2.0 22.6GW 9.6 Wind Wind onshore Gas CCGT 13.9 GW 3.2 5.3 1.4 Coal Peat 0.5 3.0 First GAS +CCS Plant comes online before 2030 Peat is removed from the energy mix by 2025, replaced by biomass Coal is replaced with biomass from 2025 An additional 2GW of CCS comes online by 2035 Remaining gas peak plant by 2050 is OCGT 1.1 1.8 3.2 3.0 Solar Biomass Other Interconnection Other Interconnection 2.4 1.0 3.9 Gas +CCS Wind Onshore Gas CCS Interconnection Biomass Peat Coal Gas CCGT Wind Onshore Solar Gas CCS Interconnection Gas OCGT 13
Policy
Policy 1. Long term planning is required - need to know the desired end point 2. Can we be technology agnostic? 3. Central management - all plans and policy must be brought together 15
The policy system Ireland s policy system should implement two fundamental macro level changes to enable the successful transition to a low carbon economy. 1. The Government should introduce a system declining carbon budgets for specified periods of time (e.g. 5 years). Each Budget would be allocated amongst Ireland s non-ets sectors with the requirement that excess emissions in one sector must be offset by reduced emissions in other sectors. 2. The policy system should manage the low carbon transition with the holistic management of a cross-sectoral policy approach. Policymakers should continually identify and evaluate the range of measures that deliver the most cost-effective abatement return for consumers. This would enable policymakers to choose from a cost-effective dynamic suite of cross-sectoral measures. 16
Sectoral Policy 1. A wide range of policy options exist a mix of carrot and stick 2. Specific policies to be mapped against sectoral plans 3. Continued measurement of effectiveness of policy Case Study EVs in Norway o o o o The Norwegian population is car dependent Norway has the world's largest plug-in electric segment market share of total new car sales, growing from 5.6% in 2013, to 13.8% in 2014, 22.4% in 2015, and reaching 29.1% in 2016 Suite of supporting policies include: (i) no toll charges & free parking for EVs, (ii) no purchase or import taxes on EVs, (iii) 50% reduction in EV company car tax, (iv) EVs have access to bus lanes & (v) upfront subsidies of ~30% of the cost of an EV Proposed ban on sale of ICEs from 2025 onwards 17
Thank You Kim McClenaghan Director, Consulting Energy and Utilities lead in Ireland E: kim.a.mcclenaghan@ie.pwc.com