NEW YEAR S EVENT SWISS FEDERAL OFFICE OF ENERGY, BERNE, JANUAR Y 5 TH 2017 Don t Panic - The ABB Galaxy Bazmi Husain, Chief Technology Officer, ABB Group
Important notices This presentation includes several time warps and thus contains forward- and backward-looking information and statements including statements concerning your businesses in the future and in the past. These statements are based on current expectations, estimates and projections about the factors that may affect your future performance, including global economic conditions, and the economic conditions of the regions and industries that are major markets for you. There are numerous risks and uncertainties, many of which are beyond your and my control, that could cause your actual results to differ materially from the information and statements made in this presentation and which could affect your and my ability to achieve any or all of your stated targets. The important factors that could cause such differences include, among others: Your readiness to embark with me on this time journey Slide 2
Time Warp We are in 1877 Slide 3
Present Past Alexander Graham Bell will not recognize his baby Here s how the phone system has developed since Device Network Operation Slide 4
Present Past Thomas Edison will feel at home with modern grids Here s how the power system has developed since Generation Power grids Consumption Slide 5
.. predictions have proven to be difficult. I believe in the horse. The automobile is only a temporary appearance. 1904 Emperor Wilhelm ll (The last German Emperor) There is not the slightest indication that nuclear energy will ever be available. 1932 Albert Einstein (Physicist, Nobel laureate) Television has no future. It's just a strawfire. 1941 Mary Sommerville (Head of BBC-Radio education program) but sometimes exceptional individuals get it right Why, sir, there is every probability that you will soon be able to tax it 1850 Michael Faraday's purported reply to William Gladstone, (minister of finance), when asked of the practical value of electricity. Slide 6
Time Warp Welcome to 2042 New Year s Event BFE Slide 7
A revolution in many markets Disrupt or be disrupted World s largest taxi company owns no taxis Largest accommodation provider owns no real estate World s largest movie house owns no cinemas But new ones emerged Largest grocery stores owns no supermarkets Grocery2U Largest healthcare company owns no hospitals Slide 8
The energy <r>evolution Elements of the evolved grid Grid interconnection Power quality & demand mgmt. Digitalization Residential roof top solar plus Micro- and Nano-grids Energy storage New business models Slide 9
Commodity (kwh) Benefit achievement Services New business models emerged Societal drivers and technological enablers Driver technology Energy Service Provider Integrator New utility DSO Utilities IPP TSO ISO Vertical integrated utility Asset-based Platform-based Mainly in developing and in few industrialized regions Unbundled G, T, D: adopted in industrialized & in few developing regions Unbundled D: emerging in industrialized regions Slide 10
1970 1980 1990 2000 2010 2020 2030 2040 $/watt The energy <r>evolution Disruptive developments drove key changes in our grids Price history of silicon PV cells Cost for lithium-ion battery packs Yearly demand for EV batt. power 90 80 70 60 50 40 30 20 10 0 1,000 800 600 400 200 0 2010 2015 2020 2025 2040 800 gigawatt hours 700 600 500 400 300 200 100 0 2010 2015 2020 2025 2040 Batteries, photovoltaic, new business models and nobody believed it Dramatic cost reduction Scalability of technologies Consumer investment Marginal costs of electricity became zero Slide 11
Max. hourly variable renewable generation as a percentage of total demand The energy revolution An evolution in process but a revolution in impact Technical challenges countries encountered Short circuit power & significant variable RES curtailment Germany System inertia & grid voltage Grid capacity & reserve Conventional operation 2012 2016 2040 Grid investments and technologies Take away were message required to address challenges Slide 12
Grid defectors and a global energy internet.. The evolved system accommodated them all! Elon Musk State Grid China Demand management Grid defectors Global energy internet Bulk battery storage Slide 13
hold on back to 2017 Slide 14
The energy <r>evolution.. The next 25 years. Most of the technology is already here Adoption by all market participants will be required Very important role of the regulator Slide 15 1 NCIT Non Conventional Instrument Transformers
Don t Panic! Lets write the future, together. Slide 16