Innovation for Cool Earth Forum Driving innovation for Net-Zero Emissions Michael Liebreich October 4, 2017
Global new clean energy investment and capacity installations 500.00 160.00 140.00 400.00 300.00 200.00 100.00 $62bn $88bn $128bn $175bn $205bn $207bn $276bn $317bn $291bn $269bn $315bn 1 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich $349bn $287bn $258bn (estimate) 0.00 0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energy storage projects (not reported in quarterly statistics). Excludes large hydro. 120.00 $300 billion 100.00 80.00 60.00 40.00 20.00
Global new clean energy investment and capacity installations 500.00 160GW 160.00 140.00 400.00 300.00 200.00 100.00 0.00 20GW $62bn $88bn $128bn $175bn $205bn $207bn 88GW $276bn $317bn $291bn $269bn $315bn 2 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich $349bn $287bn $258bn (estimate) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energy storage projects (not reported in quarterly statistics). Excludes large hydro. 120.00 $300 billion 100.00 80.00 60.00 40.00 20.00 0.00
Global new clean energy investment and capacity installations 500.00 Spend the same, get double 160GW 160.00 140.00 400.00 300.00 200.00 100.00 0.00 20GW $62bn Spend more, get more $88bn $128bn $175bn $205bn $207bn 88GW $276bn $317bn $291bn $269bn $315bn 3 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich $349bn $287bn $258bn (estimate) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energy storage projects (not reported in quarterly statistics). Excludes large hydro. 120.00 100.00 80.00 60.00 40.00 20.00 0.00
Unsubsidised clean energy world records 2017 Solar PV Onshore wind Offshore wind Country: Bidder: Signed: Construction: Price: United Arab Emirates Marubeni and Jinko Solar 2017 2019 US$ 2.42 c/kwh Country: Bidder: Signed: Construction: Price: Morocco Enel Green Power 2016 2018 US$ 3.0 c/kwh Country: Bidder: Signed: Construction: Merchant Price: Germany DONG/EnBW 2016 2024 US$ 4.9 c/kwh Source: Bloomberg New Energy Finance; Images Siemens; Wikimedia Commons; Masdar 4 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Wind and solar experience curves Wind Solar eur/mwh $/W 1,024 512 256 128 1985 1999 2009 100 10 1976 1985 2003 2008 64 32 Source: Bloomberg New Energy Finance 2014 2025 1 Learning Learning rate =19% = 19% Learning rate = 24-28% R² = 0.91 16 100 1,000 10,000 100,000 1,000,000 Cumulative capacity (MW) Source: Bloomberg New Energy Finance 5 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich 0.1 2015 2017 (estimate) 1 100 10000 1000000 Cumulative capacity (MW)
Evolution of wind turbine heights and output 300m 13-15 MW 200m 7 MW 9 MW 4 MW 100m 1.2 MW 2 MW 1-12kW 0.5 MW 19 th C 1990 1995 2000 2005 2010 2015 2025 Sources: Various; Bloomberg New Energy Finance 6 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Price impact of switch from FiT to auctions, selected countries Solar PV (unit price normalised to 100 at date of first auction) 160 140 120 100 80 60 40 20 0-3 - 2 Source: Bloomberg New Energy Finance - 1 0 + 1 + 2 7 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich + 3 : tariffs : non-tariff price signals : auctions EMEA KEY Other LatAm Brazil India South Africa Onshore Wind (unit price normalised to 100 at date of first auction) 160 140 120 100 80 60 40 20 0-3 - 2-1 0 + 1 + 2 + 3
Price of renewable energy in India The cost of solar power is now cheaper than coal in this country. Piyush Goyal Minister of State for Power, Coal, New & Renewable Energy and Mines, India Image: Twitter 8 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Renewable energy excl. large hydro, proportion of power generation, 2006-16 Canada UK 25% 5% 6% 2% Germany 29% China 3% US 9% Lowest 13% Spain 30% 12% Italy 9% 25% India 6% 10% 7% Japan 12% Mid Highest Brazil 4% 6% Australia No data Notes: Excludes large hydro; calculated as annual renewable generation over annual total generation 6% 18% South Africa 1% 3% 3% 12% Source: Bloomberg New Energy Finance 9 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Coal capacity factors, selected countries US India South Africa Australia China Indonesia Note: Based on end-of-year capacity figures; 2017 is estimated Source: Bloomberg New Energy Finance, IEA, EIA, India CEA, NERSA, Australia DOWS 10 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Coal has peaked Coal production Mt/yr 6,000 5,000 4,000 3,000 2,000 1,000 Coal consumption Mt/yr 6,000 5,000 4,000 3,000 2,000 1,000 0 0 1990 1995 2000 2005 2010 2015 1990 1995 2000 2005 2010 2015 Asia Pacific Africa Middle East Europe & Eurasia S & Cent. America North America Note: Adjusted to standard coal equivalent Source: Bloomberg New Energy Finance, BP Statistical Review 11 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Make America Great Again? Image: White House; EPA 12 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Solar and wind dominate the future of electricity Global cumulative installed capacity: 2016 Small-scale Utility-scale PV PV 2% 3% Onshore wind 7% Hydro 17% Nuclear 5% Oil 6% 6,719GW Gas 24% Coal 30% Source: Bloomberg New Energy Finance, NEO 2017 By 2040, 66% of generating capacity will be renewable Small-scale PV 10% Utility-scale PV 22% 13 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich Global cumulative installed capacity: 2040 Flexible capacity Onshore wind 14% Coal 13% 13,919GW Gas 14% Nuclear 3% Hydro 12%
Solar and wind attract 60% of new investment in power generating capacity Investment, by technology, 2017-2040 Investment, by technology, 2017-2040 ($ trillion - 2016 real) Fossil fuels 14% Wind Solar $2.8 $3.3 $10.2 trillion Zerocarbon 86% Nuclear Hydro Gas $0.8 $1.1 $1.4 Source: Bloomberg New Energy Finance Source: Source: Bloomberg New New Energy Energy Finance Finance, NEO 2017 Coal $0.7 Source: Bloomberg New Energy Finance 14 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Annual green bond issuance by issuer type Source: Bloomberg New Energy Finance 15 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Balancing the grid Interconnectors Heating/cooling solutions Electric vehicles Demand response Batteries Weeks to months Hours to days Seconds to minutes I. PLANNING FOR EXTREMES Demand Smart Grid and Gridchain III. CONTROLLING FREQUENCY H2 II. CONTINUOUS BALANCING Flow batteries Variable supply Power to gas Flywheels Ammonium Biomass/bio gas Biofuel Solar CSP Gravity systems Compressed air 16 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
BEV model availability, 2008-20 SUVs/Trucks Sports cars Sedans Hatchbacks Runabouts Small vans Land Rover Defender Mahindra everito SAIC E-Lavida CODA EV Toyota RAV4 Honda Clarity BAIC EU260 JAC iev4 Renault Fluence BYD e5 Kia Ray Hyundai BMW i3 BlueOn M-B E-Cell VW e-golf Chevy Spark Honda Fit Ford Focus Nissan Leaf Renault Zoe ZE BMW mini e Fiat 500e Mitsubishi i-miev Kandi Panda Smart Renault Twizy ForTwo Ford Transit Nissan NV200 Peugeot Partner M-B B-Class Hyundai Ioniq Tata IRIS BYD e6 Renault DeZir ChangAn Eado Smith Edison M-B Vito Trumpchi GS4 Qianto Q50 Renault Kangoo Venturi Fetish Tesla Roadster Tesla Model S M-B SLS edrive Aston Martin GLM G4 NIO EP9 RapidE Exagon Furtive Geely Emgrand VW e-up Seat Mii* Mahindra e2o Bollore Bluesummer BYD T3 VW Budd-e ChangAn EM80 Jaguar I-Pace Mitsubishi ex Tesla Model Y* Mullen 700e NIO ES8* Tesla Model 3 VW e-bulli Chevy Bolt Audi E-tron Sportback Nissan Leaf 2* Tesla VW I.D.* pickup* BMW i5 Tesla Model X Chehejia SUV* VW I.D. LeEco LeSEE Audi R8 E-tron 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 VW I.D. BUZZ VW I.D. CROZZ Volvo 40.2* M-B EQ Audi E-tron Quattro Porsche E-sport Tesla Roadster* NIO EVE Lucid Air Faraday FF91 Source: Bloomberg New Energy Finance, Images various. Notes: Not exhaustive. (*) Range is estimate 0 50 100 150 200 250 300 350+ miles range per charge 17 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Lithium-ion battery prices, historical and forecast $/kwh 1,000 900 800 700 600 BNEF observed values: annual lithium-ion battery price index 2010-16. BNEF observed values 500 400 300 200 2025 average lithiumion battery price: $109/kWh 2030 average lithium-ion battery price: $73/kWh 19% learning rate 100 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Bloomberg New Energy Finance Note: Prices are an average of BEV and PHEV batteries and include both cell and pack costs. Cell costs alone will be lower. Historical prices are nominal, future ones are in real 2016 U.S. dollars. 18 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
London, UK Photo: HHRCA 19 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Global light duty vehicles million cars per year 140 120 100 54% 80 43% 60 40 24% 20 8% 1% 3% 0 2015 2020 2025 2030 2035 2040 Source: Bloomberg New Energy Finance million cars on the road 1,800 1,600 1,400 ICE 1,200 sales 1,000 EV sales 800 33% 600 19% 400 0% 1% 2% 7% 200 0 2015 2020 2025 2030 2035 2040 ICE fleet EV fleet 20 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Current orthodoxy 1 Big changes by 2040 1/3 of electricity will be wind and solar 1/3 of cars and light trucks will be electric The global economy will be 1/3 more energy efficient Must go further Source: Bloomberg New Energy Finance, Tesla, Wallpaper Mania, Cleantechnica 21 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
Current orthodoxy 2 These will look much the same in 2040 Shipping/air/freight Industry Petrochemicals Land-use/forests Energy access Heat Huge challenge or huge opportunity? Source: Bloomberg New Energy Finance, Tesla, Wallpaper Mania, Cleantechnica 22 October 4, 2017 Innovation for Cool Earth Forum, Tokyo @mliebreich
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