London summit 2017

Breaking Clean

Michael Liebreich

September 19, 2017 Global new clean energy investment and capacity

160.00 installations500.00 140.00

400.00 120.00

$349bn $300 billion100.00 300.00 $317bn $315bn $291bn $276bn $287bn 80.00 $269bn $258bn (estimate) 200.00 $205bn $207bn 60.00 $175bn 40.00 100.00 $128bn $88bn 20.00 $62bn 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.

1 September 19, 2017 Global new clean energy investment and capacity 160GW 160.00 installations500.00 140.00

400.00 120.00

$349bn 88GW $300 billion100.00 300.00 $317bn $315bn $291bn $276bn $287bn 80.00 $269bn $258bn (estimate) 200.00 $205bn $207bn 60.00 $175bn 40.00 100.00 20GW $128bn $88bn 20.00 $62bn 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.

2 September 19, 2017 Plenty of good news – 1

Source: ABC Australia, Independent, Bloomberg, Oilprice.com

3 September 19, 2017 Plenty of good news – 2

Source: Businessgreen, FT, Bloomberg, BBC

4 September 19, 2017 Plenty of good news – 3

Source: The Telegraph, Bloomberg, The Economist

5 September 19, 2017 President Trump

Source: White House

6 September 19, 2017 Trump on climate December 2009

If we fail to act now, it is scientifically irrefutable that there will be catastrophic and irreversible consequences for humanity and our planet.

Donald J. Trump Donald J. Trump Jr Eric F. Trump Image: New York Times Ivanka M. Trump

7 September 19, 2017 Trump on climate 6 November 2012

The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non- competitive.

Donald Trump US Presidential Candidate Image: IBTimesUK

8 September 19, 2017 Trump on climate February/March 2017

Source: White House, EPA

9 September 19, 2017 Trump on climate 1 June 2017

The United States will withdraw from the Paris Climate Accord.

Donald Trump US President Image: Bloomberg

10 September 19, 2017 Trump on climate 16 September 2017

The U.S. has stated that they will not renegotiate the Paris accord, but they will try to review the terms on which they could be engaged under this agreement.

Miguel Arias Cañete European Commissioner for Climate Action and Energy Wall Street Journal Image: European Union

11 September 19, 2017 Trump on climate 17 September 2017

The President said he's open to finding those conditions where we can remain engaged with others on what we all agree is still a challenging issue.

Rex Tillerson US Secretary of State Image: US Department of Energy

12 September 19, 2017 Trump on climate 16 September 2017

There has been no change in the United States' position on the Paris agreement.

Sarah Huckabee Sanders White House Press Secretary Image: Washington Examiner

13 September 19, 2017 The world’s response to Trump on climate ¯\_(ツ)_/¯

Source: Emojipedia

14 September 19, 2017 The world in 2004…

Source: NASA

15 September 19, 2017 EIA global energy mix and fuel consumption forecast Global energy consumption mix IEO 2004 world coal and gas consumption

Quadrillion Btu 100% 180 90% 160 80% Natural Gas 140 70% Renewables 120 60% Nuclear Coal 100 50% Coal 80 40% Natural Gas 30% Oil 60 20% 40 10% 20 0% 0 2004 2010 2015 2020 2025 2000 2005 2010 2015 2020 2025 Source: EIA Source: EIA

16 September 19, 2017 Oil price history and 2004 forecast Axis$/bbl title real (units) 2000 120

100

80

60

40 EIA 2004 oil price forecast 20 IEA WEO 2004 oil price forecast 0 1990 1995 2000 2005 2010 2015

Source: Bloomberg New Energy Finance, IEA

17 September 19, 2017 Gas prices and U.S. imports

Global gas price benchmarks, 1990-2004 Net U.S. LNG imports

$/MMBtu Trillion cubic feet

14 6

12 5 cif 10 4 2004 EIA forecast 8 average border price 3 6 NBP 2 4 Henry Hub 2 1

0 0 1990 1995 2000 1995 2000 2005 2010 2015 2020 2025 Source: Bloomberg New Energy Finance Source: Bloomberg New Energy Finance, EIA

18 September 19, 2017 Nuclear was about to undergo a renaissance

Reactors in operation in 2010

Reactors expected to be in operation by 2025

New nuclear powers Source: International Atomic Energy Agency; Bloomberg New Energy Finance

19 September 19, 2017 IEA Outlook for renewables in 2004 – cumulative capacity Wind Solar

GW installed GW installed

350 350

300 300

250 250 WEO 2004 forecast 200 200

150 150

100 100 WEO 2004 forecast 50 50

0 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: Bloomberg New Energy Finance, IEA Source: Bloomberg New Energy Finance, IEA

20 September 19, 2017 IEA outlook for renewables in 2004 – annual additions Wind Solar

Capacity additions per year (GW) Capacity additions per year (GW)

14 14 2021-30 12 2011-20 12 10 10 2004-10 8 8

6 6 2021-30 4 4 2011-20 2 2 2004-10 0 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: Bloomberg New Energy Finance, IEA Source: Bloomberg New Energy Finance, IEA

21 September 19, 2017 Wind and solar costs

2004 c-Si Wind 2004 wind Solar LCOE module price eur/MWh €150/MWh $/W $4.1/W 1,024 100 1976 1985 512 1985 256 10 1994 2004 2003 128 1999

64 1

32

16 0.1 100 1,000 10,000 100,000 1 10 100 1000 10000 Cumulative capacity (MW) Cumulative capacity (MW) Source: Bloomberg New Energy Finance Source: Bloomberg New Energy Finance

22 September 19, 2017 H2FC vehicle targets for 2020 in 2004

(m vehicles) Fuel cell vehicles will probably overtake gasoline- “powered cars in the next 20 to 30 years

5m Takeo Fukui, Managing Director, Research and Development, Honda Motor Co., Bloomberg 2.5m 5m News, June 5, 1999

Fuel cells will power cars with little or no waste at all. “We happen to believe that fuel cell cars are the wave of the future; that fuel cells offer incredible opportunity.

US President George W. Bush, February 25, 2002

Source: DOE, European Hydrogen & Fuel Cell Technology Platform, Juhani Laurikko (Premia-EU)

23 September 19, 2017 Renewable electricity generation by region, 1990-2004

TWh per year

140

120

100 Europe North America 80 Asia-Pacific 60 Latam Africa 40 Middle East

20

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Source: Bloomberg New Energy Finance, BP Statistical Review of World Energy

24 September 19, 2017 EU leadership from 2004

Source: BBC

25 September 19, 2017 Not everyone agreed with the orthodoxy…

26 September 19, 2017 The world in 2004

Problems Opportunities

• Climate Change • Breakthroughs in material sciences • Second Gulf War • Experience curves • Aging power infrastructure (developed world) • Low-cost communications • Brownouts • Energy deregulation (industrialising countries) • Innovation/entrepreneurship • Energy poverty • Availability of capital (poorest countries) • Rise of

Source: New Energy Finance

© New Energy Finance Evolution of wind turbine heights and output

300m

200m

2 MW 100m 1.2 MW 0.5 MW 1-12kW

19th C 1990 1995 2000 Sources: Various; Bloomberg New Energy Finance

28 September 19, 2017 Evolution of wind turbine heights and output

300m

200m

4 MW 2 MW 100m 1.2 MW 0.5 MW 1-12kW

19th C 1990 1995 2000 2005 Sources: Various; Bloomberg New Energy Finance

29 September 19, 2017 Evolution of wind turbine heights and output

300m

200m 7 MW

4 MW 2 MW 100m 1.2 MW 0.5 MW 1-12kW

19th C 1990 1995 2000 2005 2010 Sources: Various; Bloomberg New Energy Finance

30 September 19, 2017 Evolution of wind turbine heights and output

300m

200m 7 MW 9 MW

4 MW 2 MW 100m 1.2 MW 0.5 MW 1-12kW

19th C 1990 1995 2000 2005 2010 2015 Sources: Various; Bloomberg New Energy Finance

31 September 19, 2017 Evolution of wind turbine heights and output

300m 13-15 MW

200m 7 MW 9 MW

4 MW 2 MW 100m 1.2 MW 0.5 MW 1-12kW

19th C 1990 1995 2000 2005 2010 2015 2025 Sources: Various; Bloomberg New Energy Finance

32 September 19, 2017 Solar cost information 2004-style

Source: A. J. Nozik, NREL

33 September 19, 2017 New Energy Finance: the Thesis

Fundamental re- Will require trillions engineering of the of dollars world’s energy Will take decades industry around low Will be funded carbon solutions and mainly by world’s architecture capital markets

Source: New Energy Finance 2008

© New Energy Finance The world today…

Image: NASA

35 September 19, 2017 Oil price

Axis$/bbl title real (units) 2000 120

100

80

60

40 EIA 2004 oil price forecast 20 IEA WEO 2004 oil price forecast 0 1990 1995 2000 2005 2010 2015

Source: Bloomberg New Energy Finance, EIA

36 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

37 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

38 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

39 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

40 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

41 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

42 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

43 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

44 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

45 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

46 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

47 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 1997-2030 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

48 September 19, 2017 Trillion cubic feet 8 2004 2005 6 2006 2007 4 2008 2009 2 2010 2012 0 2013 -2 2014 US Projected net imports of 2015 -4 2016 LNG 2017 -6Trillion cubic feet Actual 81995 2000 2005 2010 2015 2020 2025 2030 2004 2005 6 2006 2007 4 2008 2009 2

Importer 2010 2012 0 2013 -2-2 2014 2015 -4-4 2016

2017 Exporter -6-6 Actual 1995 2000 2005 2010 2015 2020 2025 2030

Source: EIA Annual Energy Outlook; Bloomberg New Energy Finance

49 September 19, 2017 Gas prices

$/MMBtu 18 16 14 Japan cif 12 Germany average 10 border price

8 NBP 6

4 Henry Hub 2 0 1990 1995 2000 2005 2010 2015

Source: Bloomberg New Energy Finance, BP Statistical Review

50 September 19, 2017 Coal has peaked

Coal production Coal consumption Mt/yr Mt/yr

6,000 6,000

5,000 5,000

4,000 4,000

3,000 3,000

2,000 2,000

1,000 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

51 September 19, 2017

6,0007,000 3,0004,0005,000 1,0002,0000 1993 1999 2005 2011 Wind and solar experience curves Wind Solar eur/MWh $/W 1,024 100 1976 1985 512 1985 256 10 2009 2003 128 1999 2008

2014 2025 1 64 2015 LearningLearning raterate =19%= 19% Learning rate = 24-28% R² = 0.91 32 2017 (estimate) 16 0.1 100 1,000 10,000 100,000 1,000,000 1 100 10000 1000000 Cumulative capacity (MW) Cumulative capacity (MW) Source: Bloomberg New Energy Finance Source: Bloomberg New Energy Finance

52 September 19, 2017 Unsubsidised clean energy world records 2017

Solar PV Onshore wind Offshore wind

Country: United Arab Emirates Country: Morocco Country: Germany Bidder: Marubeni and Jinko Solar Bidder: Enel Green Power Bidder: DONG/EnBW Signed: 2017 Signed: 2016 Signed: 2016 Construction: 2019 Construction: 2018 Construction: 2024 Price: US$ 2.42 c/kWh Price: US$ 3.0 c/kWh Merchant Price: US$ 4.9 c/kWh

Source: Bloomberg New Energy Finance; Images Siemens; Wikimedia Commons; Masdar

53 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

54 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

55 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

56 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

57 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

58 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

59 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

60 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

61 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

62 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

63 September 19, 2017 IEA wind capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative wind installations Annual wind additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

64 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

65 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

66 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

67 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

68 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

69 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

70 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

71 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

72 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

73 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

74 September 19, 2017 IEA solar capacity forecast evolution GW installed 1,600 1,2001,400Global cumulative solar installations Annual solar additions 1,000800 400600 GW2000 installed GW per year 1,600 80 1,400 70 1,200 60 1,000 50 800 40 600 30 400 20 200 10 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2000 2005 2010 2015 2020 2025 2030 2035 2040

Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: 2004-2009 Reference, 2010-2016 New Policies Scenario Source: IEA World Energy Outlook

75 September 19, 2017 Renewable energy proportion of power generation, 2006-16 Canada UK 25% China 5% 6% 2% Germany 29% 10% 6% 9% Japan US 12% Spain 7% 3% 9% 30% Italy

13% 25% 12% Lowest India Mid Australia Highest Brazil 4% 6% 12% No data South 3% 18% Africa 6%

1% 3% Note: Excludes large hydro Source: Bloomberg New Energy Finance

76 September 19, 2017 FCV vs. BEV sales

Electric vehicles (thousand units) Fuel cell vehicles (thousand units)

250 250

200 200

150 150

100 100

50 50

0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 2014 2015 2016 2017

Source: Bloomberg New Energy Finance

77 September 19, 2017 Black Swans

Fracking Fukushima Elon Musk

Photos: Wikimedia Commons; DigitalGlobe; Pete Marovich/Bloomberg; KAL/Economist

78 September 19, 2017 The price of failure

PV grade silicon price index, 2000-2017 $/kg 400 350 300 250 $1.5 billion 200 150 100 50 0 2000 2004 2008 2012 2016

Source: Various, Bloomberg New Energy Finance Solar Spot Survey

79 September 19, 2017 The price of failure

$48 billion

80 September 19, 2017 Coal bankruptcies, 2011-2017

STOWE Global Coal Index, 2011-17

8,000 Investment Pte 7,000 -75% in six 6,000 years 5,000

4,000

3,000

2,000

1,000

0 2011 2012 2013 2014 2015 2016 2017

81 September 19, 2017 Image: various company sources US oil and gas company bankruptcy filings, 2015-present $79bn of debt Cumulative outstanding debt of U.S. E&P companies under Chapter 11 protection ($ million) in Chapter 11 90,000 80,000 70,000 60,000 Unsecured 50,000 debt 40,000 Secured 30,000 debt 20,000 10,000 0 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17

Source: Bloomberg New Energy Finance, Haynes and Boone LLP

82 September 19, 2017 German utility balance sheet write-downs $66bn of Cumulative (€ billions) write-downs 70

60

EnBW 50

40 Vattenfall

30 RWE/Innogy

20

10 E.ON/Uniper

0 2010 2011 2012 2013 2014 2015 2016 Source: Bloomberg New Energy Finance

83 September 19, 2017 Saudi Arabia’s forex reserves Oil Minister Al Naimi $240bn declares market share decline in fx Saudi Arabia reserve foreign exchange holdings ($bn) war on US shale oil reserves 800

700

600

500

400

300

200

100

0 2000 2005 2010 2015 Source: Bloomberg New Energy Finance, The Economist

84 September 19, 2017 Some people are still calling it wrong

The social cost of renewable energy should include the cost of stranding thermal power and coal assets.

Arvind Subramanian Chief Economic Advisor Indian Government Image: Financial Express

85 September 19, 2017 Some people are not wrong but misleading

Solar and wind is taking over the world. We hear it all the time. Only it is wrong - now 0.6%, 2040 2.9%.

Bjørn Lomborg visiting professor at the Copenhagen Business School President of the Copenhagen Consensus Center Image: Lomborg.com

86 September 19, 2017 Sankey for the U.S. in 2016 68% of primary energy is wasted…

…almost all of it from coal, oil, gas and nuclear

Source: Lawrence Livermore National Lab

87 September 19, 2017 Contribution of wind and solar 0.6% 2.9% 6.0% 4% 16% 34% 100% Wind Solar Solar 90% Other RE Other RE Other RE Wind Nuclear Other RE 80% Nuclear Wind Nuclear Nuclear Nuclear Other RE 70% O Oil Oil 60% il Oil Oil Nuclear Other RE 50% Gas Oil Nuclear 40% Gas Gas Gas Gas 30% Gas 20%Coal Coal Coal 10% Coal Coal Coal Coal 0% IEA NPS 2014 IEA NPS 2040 IEA NPS 2040 Final IEA NPS 2014 IEA NPS 2040 BNEF NEO 2040 Primary Energy Primary Energy Energy Electricity Electricity Electricity

Source: Bloomberg New Energy Finance, IEA

88 September 19, 2017 The world in 2040

Image: NASA

89 September 19, 2017 Solar and wind dominate the future of electricity Global cumulative installed capacity: Global cumulative installed capacity: 2016 Small-scale 2040 Utility-scale PV Flexible capacity PV 2% 3%

Onshore Small-scale Coal PV 13% wind Coal 7% 10% 30% Gas 14% Hydro 6,719GW Utility-scale 13,919GW 17% PV Nuclear 22% 3% Nuclear Hydro 5% Oil Gas Onshore 12% 6% 24% wind 14%

Source: Bloomberg New Energy Finance, NEO 2017

90 September 19, 2017 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)

Wind $3.3 Fossil fuels 14% Solar $2.8

$10.2 trillion Nuclear $1.4

Hydro $1.1

Zero- carbon Gas $0.8 86%

Source: Bloomberg New Energy Finance Coal $0.7 Source:Source: Bloomberg Bloomberg New New Energy Energy Finance Finance, NEO 2017 Source: Bloomberg New Energy Finance

91 September 19, 2017 Tipping point 1: new vs new

China U.S.

$/MWh (real 2016) $/MWh (real 2016) CCGT 180 120 160 100 140 Utility-scale 120 Utility-scale 80 PV CCGT PV 100 Coal 60 80 Coal 60 40 40 20 Onshore 20 Onshore wind wind 0 0 2017 2020 2025 2030 2035 2040 2017 2020 2025 2030 2035 2040

Source:Source: Bloomberg Bloomberg New New Energy Energy Finance Finance, NEO 2017 Source: Bloomberg New Energy Finance

92 September 19, 2017 Tipping point 1: new vs new

Japan India

$/MWh (real 2016)

250

200

150 Onshore wind CCGT 100 Coal

50 Utility-scale PV 0 2017 2020 2025 2030 2035 2040

Source:Source: Bloomberg Bloomberg New New Energy Energy Finance Finance, NEO 2017 Source: Bloomberg New Energy Finance

93 September 19, 2017 Tipping point 2: new vs existing

Germany China

$/MWh (real 2016) $/MWh (real 2016)

100 Utility-scale 120 Utility-scale 90 PV PV 100 80 Onshore wind Onshore 70 80 wind 60 CCGT 50 CCGT 60 40 Coal 40 30 Coal 20 20 10 0 0 2017 2020 2025 2030 2035 2040 2017 2020 2025 2030 2035 2040

Source:Source: Bloomberg Bloomberg New New Energy Energy Finance Finance, NEO 2017 Source: Bloomberg New Energy Finance

94 September 19, 2017 Poor outlook for coal in U.S., Europe and China Coal generation Coal generation TWh TWh 6,000 6,000

5,000 5,000 China 4,000 4,000

3,000 3,000

2,000 2,000 +132% U.S. India 1,000 1,000 SE Asia +50% Europe 0 0 2012 2016 2020 2025 2030 2035 2040 2012 2016 2020 2025 2030 2035 2040

Source: Bloomberg New Energy Finance Source: Bloomberg New Energy Finance

95 September 19, 2017 Gas plays an important role, but its not bulk energy Incremental change in gas consumption Incremental change in generation Bcm/yr Δ generation (TWh) 120 1,200

80 800

40 400

0 0

-40 -400

-80 -800

-120 -1,200 2017-20 2021-25 2026-30 2031-35 2036-40 2021-2025 2026-2030 2031-2035 2036-2040 China India Rest of APAC Americas Europe ME & Africa ROW Coal Gas Source: Bloomberg New Energy Finance Source: Bloomberg New Energy Finance

96 September 19, 2017 Demand response and batteries meet peak and balance the grid

GW 1,200 Other flexible capacity 1,000 Top 5 markets in 2040 China 343GW 800 Demand response U.S. 200GW 600 India 127GW Utility-scale 400 batteries Japan 62GW Germany 30GW 200 Small-scale batteries 0 2012 2016 2020 2025 2030 2035 2040

Source: Bloomberg New Energy Finance

97 September 19, 2017 We need to talk about Europe

Image: NASA

98 September 19, 2017 BNEF predicts BNEF New Energy Outlook: 50% renewables Europe penetration in Europe by 2040 CumulativeCumulative installed installed capacity capacity (GW) (GW) Penetration of variable renewables 1,600 100% 1,600 100% Other flexible capacity 90% Demand response 1,4001,400 90% Utility-scale batteries 80%80% Small-scale batteries 1,2001,200 Other 70%70% Solar thermal 1,0001,000 60% Small-scale PV 60% Utility-scale PV 800 50% Offshore wind 800 50% Onshore wind 40%40% Biomass 600600 Geothermal 30%30% Hydro 400400 Nuclear 20%20% Oil 200200 10% Gas 10% Coal Variable renewables share 00 0%0% 20152015 20202020 20252025 20302030 20352035 20402040 Source: Bloomberg New Energy Finance

99 September 19, 2017 European policy environment

“Stability of incentive programmes, planning processes & regulations is a big barrier to investment”

8 December 2005

Source: New Energy Finance

100 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2004

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

101 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2004

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

102 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2004

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

103 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2005

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

104 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2005

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

105 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2005

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

106 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2005

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

107 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2006

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

108 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2006

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

109 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2006

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

110 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2006

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

111 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2007

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

112 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2007

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

113 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2007

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

114 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2007

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

115 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2008

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

116 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2008

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

117 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2008

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

118 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2008

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

119 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2009

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

120 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2009

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

121 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2009

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

122 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2009

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

123 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2010

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

124 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2010

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

125 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2010

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

126 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2010

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

127 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2011

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

128 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2011

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

129 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2011

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

130 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2011

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

131 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2012

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

132 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2012

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

133 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2012

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

134 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2012

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

135 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2013

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

136 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2013

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

137 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2013

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

138 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2013

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

139 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2014

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

140 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2014

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

141 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2014

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

142 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2014

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

143 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2015

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

144 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2015

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

145 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2015

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

146 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2015

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

147 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2016

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

148 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2016

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

149 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q3 2016

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

150 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q4 2016

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

151 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q1 2017

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

152 September 19, 2017 New investment in clean energy ($bn) Europe, Middle East & Africa

$50bn

Q2 2017

Asia-Pacific Americas

Note: Bubble size represents total global investment per quarter Source: Bloomberg New Energy Finance

153 September 19, 2017 EU member state coal consumption 2000-16 Mt coal per year

140 140 140 140 140 140 140 140 140 140

120 120 120 120 120 120 120 120 120 120

100 100 100 100 100 100 100 100 100 100

80 80 80 80 80 80 80 80 80 80

60 60 60 60 60 60 60 60 60 60

40 40 40 40 40 40 40 40 40 40

20 20 20 20 20 20 20 20 20 20

0 0 0 0 0 0 0 0 0 0

Germany Poland UK Czech Rep Spain Italy Romania Netherlands Greece Bulgaria

2008 2011 2014 2005 2008 2011 2014 2005 2008 2011 2014 2005 2008 2011 2014 2005 2011 2014 2005 2008 2014 2005 2008 2011 2005 2008 2011 2014 2005 2008 2011 2014 2005 2008 2011 2014 2008 2011 2014 Source: Bloomberg New Energy Finance, BP Statistical Review 2005

154 September 19, 2017 Germany CO2 emissions German emissions MtCO2e have been flat 1400 since 2010 1200

1000 Total emissions

800

600

400 Power sector

200

0 1990 1995 2000 2005 2010 2015 Other Waste Agriculture Households Industry Fugitive Transport Manufacturing and construction Heat and power Source: UBA; BNEF

155 September 19, 2017 Europe generation mix and

emissions 100% carbon Coal (TWh) Gas (TWh)

Germany 1GtCO2e Italy Poland 2030 range UK UK Spain Italy Netherlands Spain Germany Czech Rep Greece Belgium Netherlands Ireland Bulgaria Greece Romania Romania Portugal Portugal 0 100 200 300 2015 0 50 100 150 100% coal 100% gas

Source: Bloomberg New Energy Finance. Note: Axes show percentage of generation mix, bubble shows total carbon emissions; Coal and gas generation data is for 2015.

156 September 19, 2017 EU ETS price projection

EUR per metric ton, nominal 35 Historical Forecast 30

25 No EU ETS Brexit

20 EU ETS Brexit 15

10 H1 2017

5

0

2022 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2023 2024 2025 2026 2027 2028 2029 2030

Source: Bloomberg New Energy Finance

157 September 19, 2017 Electric vehicle outlook to 2040

Annual global light duty vehicle sales Global light duty vehicle fleet million vehicles million cars on road 140 1,800 120 1,600 1,400 100 54% 1,200 80 43% 1,000 60 800 33% 24% 600 19% 40 400 8% 7% 20 2% 3% 200 1% 0 0 2015 2020 2025 2030 2035 2040 2015 2020 2025 2030 2035 2040 ICE sales EV sales ICE fleet EV fleet Source: Bloomberg New Energy Finance EVO 2017

158 September 19, 2017 Lithium-ion battery prices, historical and forecast $/kWh 1,000 900 BNEF observed values: annual lithium-ion 800 battery price index 2010-16. 700 BNEF observed 600 values 500 2025 average lithium-ion 19% learning 400 battery price: $109/kWh 2030 average lithium- ion battery price: rate 300 $73/kWh 200 100 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Source: Bloomberg New Energy Finance EVO 2017; 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.

159 September 19, 2017 BEV model availability, 2008-20 Jaguar Tesla VW I.D.* Land Rover Toyota Trumpchi VW I.D. CROZZ Defender RAV4 GS4 I-Pace pickup* BMW i5 SUVs/Trucks Mitsubishi eX Volvo 40.2* Tesla Tesla M-B EQ VW Model Y* Model X Chehejia Audi E-tron Budd-e M-B B-Class BYD e6 NIO ES8* SUV* Quattro Porsche E-sport Renault DeZir Qianto Q50 Venturi Fetish Tesla Roadster Tesla Model S Sports cars Tesla Roadster* M-B SLS eDrive Hyundai Ioniq Aston Martin GLM G4 NIO EP9 Audi R8 E-tron Exagon Furtive Mahindra eVerito RapidE Geely Emgrand NIO EVE ChangAn SAIC E-Lavida Tesla Model 3 LeEco LeSEE Eado Mullen 700e Lucid Air Sedans CODA EV Audi E-tron Faraday Honda Clarity BAIC EU260 Sportback JAC iEV4 Renault Fluence BYD e5 FF91 Kia Ray Hyundai BMW i3 M-B E-Cell BlueOn VW e-Golf Chevy Bolt VW I.D. Hatchbacks Chevy Spark Honda Fit Renault Zoe ZE Ford Focus Nissan Leaf Nissan Leaf 2* BMW mini e

Fiat 500e VW Mitsubishi i-MiEV Runabouts e-Up Seat Mii* Mahindra e2o Kandi Panda Smart Bollore Source: Bloomberg New Energy Renault Twizy ForTwo Bluesummer Ford Transit VW e-Bulli 2008200920102012201320142015201620172018201920202011 Finance, Images various. BYD T3 Nissan NV200 Tata Smith Edison Notes: Not exhaustive. Small vans IRIS (*) Range is estimate Peugeot Partner ChangAn EM80 M-B Vito Renault Kangoo VW I.D. BUZZ

0 50 100 150 200 250 300 350+ miles range per charge 160 September 19, 2017 Battery availability and prices

Global EV Li-ion manufacturing capacity Global EV charging points installed

GWh Thousand units installed 271 +248% +40% +10% +49% +61% Other 363 Germany 131 France Announced Norway 225 Under UK 103 36 construction 137 151 Netherlands Commissioned 98 Japan 103 103 US 28 China

2017 2021 expected 2011 2012 2013 2014 2015 2016 Source: Bloomberg New Energy Finance EVO 2017

161 September 19, 2017 The big challenge

Image: NASA

162 September 19, 2017 High renewable penetrations

25 December 2016 9 July 2015 13 February 2017 Scotland Denmark SPP 153% wind 140% wind 52% wind

9 April 2017 May 2016 UK 56% Germany wind & solar 67% wind & solar 26 December 2014 23 March 2017 South Australia CAISO 61% wind & solar 46% wind & solar November 2015 Spain November 2017 70% wind ERCOT 45% wind Source: Bloomberg New Energy Finance, various

163 September 19, 2017 Future power supply

Total generation Low carbon generation Flexible generation Winter

80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 -20 = + -20 -20 -40 -40 -40 Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Summer 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 -20 = -20 + -20 -40 -40 -40 Monday Tuesday WednesdayGW Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Peaking fossil Baseload fossil Nuclear CHP Hydro Baseload RE Solar Wind Pumped hydro generation/Storage Imports Exports/curtailment/DR

Source: Bloomberg New Energy Finance

164 September90.0 19, 2017 70.0 50.0 30.0 10.0 -10.0 -30.0

Monday Tuesday Wednesday Thursday Friday Saturday Sunday Future power supply

Total generation Low carbon generation Flexible generation Winter

80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 -20 = + -20 -20 -40 -40 -40 Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Summer 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 -20 = -20 + -20 -40 -40 -40 Monday Tuesday WednesdayGW Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Peaking fossil Baseload fossil Nuclear CHP Hydro Baseload RE Solar Wind Pumped hydro generation/Storage Imports Exports/curtailment/DR

Source: Bloomberg New Energy Finance

165 September90.0 19, 2017 70.0 50.0 30.0 10.0 -10.0 -30.0

Monday Tuesday Wednesday Thursday Friday Saturday Sunday Two visions of the future Option A: Capacity markets Option B: Demand-Led “Central planning lite” “Telecoms deregulation lite”

30 Storage/DR Peaking fossil Exports/Curtailment 20 Capacity market 10

0

Interconnections -10 30 -50-40-30-20-1010200 -20 Monday Tuesday Wednesday Thursday Friday Saturday Sunday Curtailment -30

-40

-50

Monday Tuesday WednesdayThursday Friday Saturday Sunday

Source: Bloomberg New Energy Finance

166 September 19, 2017 New orthodoxy By 2040… …too hard Shipping/air/freight Industry 1/3 of electricity will be wind and solar Land-use/deforestation Energy access 1/3 of cars and light trucks will be electric

The global Petrochemicals Heat economy will be 1/3 more energy efficient

Source: Bloomberg New Energy Finance, Tesla, Wallpaper Mania, Cleantechnica

167 September 19, 2017 New orthodoxy

Rebased to 100 in 2014 IEA NPS total 120 BNEF NEO emissions emissions Prove 100 IEA NPS power 80 sector emissions

60 it

40 20 wrong! 0 2014 2020 2025 2030 2035 2040

Source: Bloomberg New Energy Finance, IEA

168 September 19, 2017 Copyright and disclaimer

This publication is the copyright of Bloomberg New Energy Finance. No portion of this document may be photocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any way without prior consent of Bloomberg New Energy Finance. The information contained in this publication is derived from carefully selected sources we believe are reasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment of the author of the relevant article or features, and does not necessarily reflect the opinion of Bloomberg New Energy Finance, Bloomberg Finance L.P., Bloomberg L.P. or any of their affiliates ("Bloomberg"). The opinions presented are subject to change without notice. Bloomberg accepts no responsibility for any liability arising from use of this document or its contents. Nothing herein shall constitute or be construed as an offering of financial instruments, or as investment advice or recommendations by Bloomberg of an investment strategy or whether or not to "buy," "sell" or "hold" an investment.

169 September 19, 2017 Coverage. Renewable Energy Power & Utilities Gas Carbon Markets & Climate Negotiations Energy Smart Technologies Storage Electric Vehicles Mobility and Autonomous Driving Frontier Power Emerging Technologies [email protected] Bloomberg New Energy Finance is a research firm that helps energy about.bnef.com professionals generate opportunities. With a team of experts spread @BloombergNEF across six continents, BNEF provides independent analysis and insight, enabling decision-makers 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. Michael Liebreich [email protected]