Bloomberg New Energy Finance, IEA
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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 Japan cif 10 4 2004 EIA forecast 8 Germany 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 China 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