2013 – 2015: the turnaround years
Three meta-narratives:
1. Global society awakening to a threat to civilisation
1. An insurgency disrupting an incumbency fast
1. An incumbency facing multiple threats
Free e-book download: www.jeremyleggett.net Book orders: on amazon etc – all £ to SolarAid Personal perspective
Global perspective Personal perspective
Global perspective My background
Baluchistan, 1984 Oil research & exploration, 1980s Environmental campaigning, 1990s Social entrepreneurship, 2000s-2010s …and writing along the way A sense of the excitement on the frontlines
Middleweight (c $250m turnover) downstream player with a difference In 9 countries in Europe, Africa, S. America, C. America
Solarcentury roof on a Sainsbury’s store 1975 to 40 years in solar PV: 7 doublings since 2000 2015
Solarcentury 100 >7x doubling 60 90 to >700 MW 50 80 installed 70
40 GW 60
50 30 $USD / W 40 30 20 20 10 10 1975 1985 1995 2005 2015 2000 117th JanMay Solarcentury releases new BIPV roofing product 2016 cost competitive with bolt-on PV modules 137th JuneJan Onshore wind and PV to “win the cost race”: 2016 cheapest two options in many nations by 2020
Bloomberg NEF New Energy Outlook 2016 5% of profits Average savings: $70 per year
1 tonne of carbon dioxide 22006nd-thMar--- to SolarAid’s history:Solarcentury findingx and growth hitting an updraft to 201520162016 become Africa’s largest solar lighting retailer
1.8 million sold $5 Uganda ….198.2 million to go Malawi Zambia
The first two African Kenya solar lighting markets catalysed 1st light sold $25 Tanzania
"Few, if any, other businesses have launched a sustainable brand and enabled thousands of people to live more sustainably in such a short space of time” 1000 African mobile cellular
100 subscriptions Millions
10 SolarAid’s 1 SunnyMoney solar light sales 0.1
Solar Light Sales Light Solar 0.01
0.001 1980 1985 1990 1995 2000 2005 2010
The prize remains, and is potentially huge Personal perspective
Global perspective The state of the great global energy transition Accelerating renewableor alternatively… energy dissemination and capital mobilisationgiven our human love of stories, in the post Paris worldand the stakes or alternatively, given the Acceleratinghuman renewable love of narrative… energyAn epic dissemination drama… and(choose capital ownmobilisation title) in the post Paris world spanning three meta-narratives The top dozen stories META-NARRATIVE 1
Global society awakening to a threat to civilisation ….and responding in critical mass Story 1 Governments getting serious about climate change and air pollution 8th Jun Obama, Merkel & Hollande push for total 2015 energy decarbonisation in the Paris Agreement
….and up to 70% cuts by 2050, 34 years from now 30th Nov 3 possible outcomes entering the 2015 Paris Climate Summit (COP21)
• No signal • Contested signal • Clear signal 12th Dec A clear signal in the Paris Agreement: 2015 decarbonisation, as soon as humanly possible Adopted by every independent nation on the planet: all 195 37rdth SepJan At G20 Summit US and China announce they have 2016 ratified the Paris Agreement 97ththNovJan Trump wins the US presidency with smallest vote 2016 for any candidate in the last 3 US elections 177thth JanNov 195 nations issue Marrakech Action Proclamation 2016 deeming Paris commitments an “urgent duty”
“Momentum is irreversible – it is being driven not only by governments, but by science, business and global action of all types at all levels” 167thth JanNov More than 360 US businesses urge Trump not to back 2016 out of Paris Agreement
DuPont, Hewlett “failure to build a low-carbon Packard, Kellogg, economy puts American Mars, Nike, Starbucks + prosperity at risk” And this story isn’t “just” about climate change… 127ththJanMay Air pollution up 8% in last 5 years, WHO reports: 20162016 now single biggest killer in world, 3m deaths a year 67ththNovJan Indian government declares Delhi air pollution 2016 an emergency 317thst JanAug Chinese public overwhelmingly backs renewables 2016 push: 92% willing to pay more for green power 67thth SepJan Renault sees diesel cars being "forced out the 2016 market" in view of post-VW emissions-control costs Story 2
Civil society increasingly campaigning in multiple sectors 20097th Jan to The UN builds a “Groundswell” of climate action by 20162015 states, cities, companies, churches, communities 87thth SepJan California's Gov. Brown signs toughest US climate 2016 law: 40% GHG cuts (from 1990 levels) by 2030 7thDecJan 1,000 cities commit to 100% renewable power 20162015 at the Paris climate summit 157thth JanAug 16 US cities now target 100% renewable power 2016 and 4 have achieved it
Aspen, Colorado Burlington, Vermont Columbia, Maryland Greensburg, Kansas 7thNovJan 50 major corporations commit to 100% renewable 20162015 power ahead of the Paris climate summit 197ththJanSep 600 multinational companies factor Paris 2016 Agreement into business plans
• Over the next 15 years, $90 trillion will be invested globally in infrastructure where emissions are currently concentrated
• The national climate plans under the Paris Agreement represent at least a $13.5 trillion market for the energy sector alone
Source: CDP 7thDecJan Investors worth £350 billion pledge to pressure 20162015 FTSE companies to go 100% renewable 187ththJanJun In his Papal Encyclical Pope Francis urges rich world 20162015 to “replace fossil fuels without delay”
He also exhorts rich nations to “pay back their debts” to poor nations…. 67thth SepJan “Massive support for community 20162015 renewable energy”
• ICM UK poll: 67% support, 8% oppose • 65% Conservatives support Story 3
Regulators beginning to regulate climate risk 11th Jul The “carbon bubble” of “unburnable carbon” 2011 can lead to “stranded assets”
Proven fossil fuel reserves: 2,795 GtCO2 $28 trillion 30th Sep 13th Sep Bank of England speaks out on climate risk 2015 2015 to capital markets and stranded assets
“Climate Stranded assets: change is the “..investors must biggest issue be given the data for the future” to “invest accordingly”
Mark Carney Governor 30th Sep 4th Dec Launch of G20 Financial Stability Board’s 2015 2015 Taskforce on Climate-Related Financial Disclosures
Michael Bloomberg Chairman
…to report Dec 2016 287th JuneJan Moody's to use Paris Agreement in future credit 2016 assessments, and calls for rapid approval of deal 77thth SepJan Suncor Energy seeks permission to abandon some 2016 oil-sands assets The story continues… 4
Story 4 Capital beginning to switch from fossil fuel to clean fuel 2ndJulyMar The origin of the divestment movement: the 20162012 “terrifying math” in Carbon Tracker’s first report 24ndth MarDec >500 institutions, worth $3.4 trillion, 20162015 have divested, or pledged to
• foundations …including Rockefeller Brothers Fund • faith-based groups …including World Council of Churches • pension funds …including Norway’s State Pension Fund • educational institutions …including many top universities • professional institutions …including BMA • and many cities …including Newcastle 187thth JanJuly Swedish pension fund AP4 makes biggest 2016 divestment move of any institution to date
The $35bn pension scheme will: • decarbonise its $14.7bn global equity portfolio by 2020 • invest $3.2bn in investment tracking low carbon benchmarks META-NARRATIVE 2 of 3
An insurgency disrupting an incumbency ….faster than most appreciate Story 5 Renewables going exponential 1975 to 40 years in solar PV 2015
Price of a solar PV per W Global solar PV installed per year $101 >64GW 100 60 90 50 80 70 40 60 (GW)
50 30 ($USD) 40 2 MW $0.61 30 20 20 10 10 1975 1985 1995 2005 2015 4 4 7 th 2016 2014 2014 th th April Apr Jan
Price in $/m (mbtu) 100 150 200 250 50 0
1949 1952 1955 1958
1961 welcometo the The lasteightyears in solar: 1964 1967 1970 1973 1976 1979
1982 Fossil fuel indices 1985 Lastyears 40 1988 Terrordome
1991 PVSolar 1994 1997 2000 2003 2006 2009 2012
Source: Alliance Bernstein th 17-stthJunJan--- More jobs in US solar now than in either coal 201620162016 or oil and gas extraction 57thth JulyJan Dong Energy wins offshore wind auction 2016 with lowest ever price: €72.70 ($80.60) MWh 257ththJanOct Renewables overtake coal as world’s largest source 2016 of power capacity: 500,000 solar panels a day now 167ththJanMay Portugal’s electricity 100% from renewables 20162016 for four straight days 77thth SepJan All China’s new power demand in 2015 2016 met with wind and solar 107th JuneJan Apple Energy set up, and applies to FERC to supply 2016 excess solar electricity from its installations
New Apple “Campus 2” HQ, Cupertino Story 6 Batteries and electric vehicles going exponential 24
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Global inequality 1988 - 2013Daimler CEO Dieter Zetsche unveils the Mercedes-Benz EQ 77ththNovJan Mercedes-Benz to introduce residential energy 2016 storage product in US in 2017
• Energy content 2.5 kWh combinable up to 20 kWh • Stand alone or with solar • Mercedes Benz Energy Americas, a new company to be set up for the launch th 24 Feb “Another oil crash is coming 2016 $31 and there may be no recovery”
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o 0 S 2010 2015 2020 2025 2030 2035 2040 167ththJanJan “In 50 years, when we ship off the last barrel 2016 of petrol, we will not be sad”
“I promise you, my brothers and sisters, we will be celebrating.” Crown Prince Shaikh Mohammad Bin Zayed Al Nahyan Abu Dhabi “I hope 10 years from now the smell of exhaust from cars will be a thing of the past….
……much like the smell of cigarettes in restaurants” Richard Branson It has happened before
1900 1913
Spot the car Spot the horse Story Data revolution 7 in the wings And then there is the information revolution, largely yet to manifest in energy. A flavour:
Use of real People-power time data financing
Peer to peer Others’ assets bypassing & workforce
Megadata Shared assets processing
Hyper- Outsource data personalisation processing
Leveraging 21st century others’ assets marketing 117ththJanOct An energy first as UK successfully transmits 2016 data via national electricity grid META-NARRATIVE 3 An incumbency facing multiple threats …increasingly existential Story 11 Utilities racing to escape a death spiral Until 1st Dec First major utility business model U turn 2014 15th Jan 2015 Second utility U-turn: GdF Suez
Coal and Gas Power Dying Out in Europe says Energy Chief 23rd Sep “Coal is in terminal decline” 2015 Goldman Sachs 297thth JanAug Utilities doing the obvious in M&A: 2016 RWE's Innogy acquires Belectric Solar & Battery 247thth JanAug Nearly all £200bn+ UK energy investment needed by 2016 2030 should go to disruptive tech, Barclays now says
45GW increase in overall capacity required, the majority of it coming from renewables such as wind and solar Story The oil and gas industry 12 entering its twilight years 277thth MayJan “The long twilight of the big oil companies” 20162016 247thth JanAug “Big oil companies binge on debt” 2016
Combined debt $184 bn, double their 2014 level >100% of profits spent of dividends in 2015 21st Mar 2016 “Oil and gas: debt fears flare up” $39
Total debt in 2006: $1.1 trillion In 2014: $3 trillion 29th July 257thth JanJuly 2016 “Oil giants find there’s nowhere to hide from 2016 $41 doomsday market”
“The industry cannot survive on current oil prices.” Fadel Gheit, analyst Oppenheimer & Co 87thth JulyJan “Oil industry faces huge 2016 worker shortage”
c. 350,000 workers laid off industry-wide c. 60% of fracking workforce laid off c. 70% fracking equipment idled
The average age of the oil industry worker is 49 25th July 257thth JanJuly “Dismal delivery puts big oil and gas energy 2016 2016 projects at risk” $43
Gorgon: just back online after 2 major gas leaks since 2014 start
E&Y study of 365 oil and gas megaprojects: 64 % cost overrun, 73% behind schedule 207ththJanSep Fossil fuels investment takes nosedive: 2016 IEA on 2015
Volvo XC90s “Anyone who does not understand what is going on - governments, companies, markets – is not in the right place” Fatih Birol, ED, IEA Oil companies vary in their responses to the risks 11th May 2015 Statoil sets up a renewable energy division $62 167thth MayJan Statoil to build the world's largest 20162016 floating windfarm off Scottish coast 15th May 2015 Shell heads for $64 the Arctic 28th Sep 2015 Shell abandons Arctic drilling, writing off $7 bn $46
Ben van Beurden, CEO
"Shell continues to see important exploration potential in the basin" Story 13
The shale boom in danger of going bust 11th Apr 2011 $126 22nd Apr 2014 “Is the U.S. Shale Boom Going Bust?” $108
1 mile
“Shale Drillers Feast on Junk Debt to Stay on Treadmill” 30th Apr 2014
© Hughes GSR Inc, 2014 (data from Drillinginfo, February, 2014) 17th Jun “The coming shale bust? 2015 IOU now well over $200 bn” $60
The Shale Industry Could Be Swallowed By Its Own Debt 167ththJanSep North American oil & gas bankruptcies climb 2016 beyond 100, on of debts $67bn
Filings 2015 & 2016 through August
Some are emerging with new capital structures within months ….reportedly on conservative assumptions about future production th 10 Feb It will take more than an oil rally 2016 $30 to restart the US shale boom
"It’s not really like just turning on the light switch." Bill Thomas, chief executive EOG Resources 217thst JanApr “As Oil Jobs Dry Up, Workers Turn to Solar Sector” 2016
Alamo 6 solar farm 247th JuneJan 2016 Germany bans fracking after years of dispute The story continues… We are in a race against time Conclusions These three emerging megatrends will mutually reinforce Solar will be in the heart of the action Prospering will need to involve mastery of the digital frontiers There will be wondrous opportunities in riding the wave…. …also enormous threats Those with vision who can move fast are best placed to profit / prosper / protect civilisation Thank you
www.jeremyleggett.net