10th european ifrs power and utilities roundtable · 2017-03-07 · 10theuropean ifrs power and...

10TH European IFRS power and utilities roundtable

29 November 2016

10TH European IFRS power and utilities roundtableChristoph Frei, Secretary General, WEC29 November 2016

© World Energy Council 2016 | www.worldenergy.org | @WECouncil

New energy realitiesNavigating the triple transition

Christoph Frei | Secretary General | World Energy Council November 2016 @chwfrei

https://twitter.com/chwfrei



World population1970-2060

0

2

4

6

8

10

12

-

2

4

6

8

10

12

1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91

2.0 x

1.4x

Forecast(2015-2060)

Bill

ions

of P

eopl

e Billions of People

Source: UN Population Forecasts to 2100

Actuals(1970-2015)

UN Population Growth (Billions of People)

1.2x

1.6x


0.6%

-0.4

%

2.7%

-0.7

%

0.4%

2.2%

2.9%

1.0%

0.2%

1.4% 1.

9%

0.2%

2.5% 2.1% 3.

3%

1.0%

0.5%

0.2%

2.4%

-0.4

%

1.0%

2.2%

3.0%

1.0%

6%

1 2 3 4 5 6 7 8 9

Series1 Series2 Series3

Growth in the past 45 years (1970-2015)Climate Change Challenge

Carbon Intensity % reduction p.a. 1970-2015(GtCO2/GDP USD)

Note: Positive % changes denote a reduction in CO2 per USD of GDP Source: Total Economy Database, BP (2015) Statistical Review, IPCC (2015) “AR5, Synthesis Report”;

2015-2060(GtCO2/GDP USD)

Note: Assumes global GDP growth of 2.6%

De-carbonization for 1000 GtCO2


New business models:All sectors


Financing Resilient Energy InfrastructureExtreme Weather Events

Number of natural catastrophes, 1970-2014: factor 4

Insured catastrophe losses, 1970-2014

Source: WEC Financing Resilience Report, 2015 (October 1); also Swiss Re, 2015: Sigma report No 2/2015

0

20

40

60

80

100

120

140

160

180

200

1970 1975 1980 1985 1990 1995 2000 2005 2010

Natural catastrophes

Source: Swiss Re Sigma 02/2015

• Comparing the last 5 years to the last 20 years: The occurrence of extreme events has roughly quadrupled; according to IPCC this is largely related to the 40% increase of carbon dioxide in the atmosphere.

• From impact-resistant “hard”/‘safe-fail’ components to “soft”/‘fail-safe’ systems. • The solution appears to be ‘smarter not stronger’.

© World Energy Council 2016 | www.worldenergy.org | @WECouncil© World Energy Council 2015© World Energy Council 2015© World Energy Council 2015

. . . .. . . . . . . . .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

climate framework

large scale accidents

economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access

energy affordability

extreme weather risks

cyber threats

corruption

terrorism

China

IndiaRussia

EU CohesionMiddle East dynamics

US policytrade barriers

regional integration

market design

energy subsidies

decentralised systems

sustainable cities

energy efficiencycoal

ccs

renewable energiesbiofuels

digitalisationinnovative transport

electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

weak signals need for action:

what keeps energyleaders busy at work

critical uncertainties: what keeps energyleaders awake at night

World Energy Issues Monitor 2016

Global map


. . . .. . . . . . . . .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

climate frameworklarge scale accidents

economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

IndiaRussia



regional integrationmarket design

energy subsidies


sustainable cities


ccs



electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

► Key insomnia issues are of macro nature: new growth normal, commodity price volatility, climate framework uncertainty and regional integration / cohesion.


Global map


. . . .. . . . . . . . .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

IndiaRussia




energy subsidiesdecentralised systems

sustainable cities


ccs



electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

► Key action priorities remain constant: renewables, energy efficiency, followed by subsidies and electricity prices.


Global map


. . . .. . . . . . . . .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land useenergy access



cyber threats

corruption

terrorism

China

IndiaRussia




energy subsidies

sustainable cities


ccs


innovative transport

nuclear

hydro

unconventionals

LNG

hydrogen economy


electric storage

digitalisationmarket design

► The innovation cluster continues to move up: e-storage, digitalisation, decentralised systems.

talent


Global map: key upward trends


. . . .. . . . . . . . .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus




cyber threats

corruption

terrorism

China

IndiaRussia





sustainable cities


ccs



electric storage

hydro

unconventionals

LNG

hydrogen economy

nuclear

► CCS, unconventionals and nuclear and coal are issues which have seen the biggest cooling down over past years.

talent


Global map: key downward trends


. . . .. . . . . . . . .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.


economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus




corruption

terrorism

China

IndiaRussia





sustainable cities


ccs



electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economy

cyber threats

talent

ResilienceWorld Energy Issues Monitor 2016

© World Energy Council 2016 | www.worldenergy.org | @WECouncil© World Energy Council 2015© World Energy Council 2015

. . . .. . . . . . . . .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

climate framework

large scale accidents

economic growth

capital markets

commodity prices

electricity prices

exchange rates

energy water nexus

land use

talent

energy access



cyber threats

corruption

terrorism

China

IndiaRussia




market design

energy subsidies


sustainable cities


ccs



electric storage

nuclear

hydro

unconventionals

LNG

hydrogen economyVenezuela United States

United Kingdom

United Arab Emirates

Tunisia

Trinidad & Tobago

Switzerland

Swaziland

Spain South KoreaSouth Africa

Singapore

Serbia

Senegal

Saudi Arabia

Russian Federation

Portugal

Peru

Norway

Nigeria

Niger

Netherlands

Mongolia

Monaco

Mexico

Malaysia

Lithuania

Lebanon

Latvia

Kenya

Jordan

Japan

Italy

Ireland

Iraq

Iran

Indonesia

India

Iceland

Hungary

Hong Kong

Ghana

Germany

Gabon

France

Finland

Ethiopia

Estonia

Ecuador

Dominican Republic

Czech Republic

Cyprus

Cote d'Ivoire

Congo (Democratic Republic of)

Colombia

China

Chad

Canada

Burkina Faso

Bulgaria

Brazil

Botswana

Bolivia

BelgiumAustria

Australia

Argentina

Algeria

© World Energy Council 2015

► Countries with highest concerns for cyber threats are in East Asia and Europe.

cyber threats

ResilienceWorld Energy Issues Monitor 2016


► Fast economic growth► Strong technological development► Transition to a highly productive

world► Handles well the economic and

geopolitical shift to Asia► Broadly addresses sustainability► Developments on the energy

supply-side and in the mid-stream reduce energy costs

► Greater access to energy for all

Free market driven approach to achieving individual access and affordability of energy through

economic growth

MODERN JAZZ

► Moderate economic growth (slower, more sustainable, more evenly distributed)

► Delivery of high levels of infrastructure

► Extensive network of fiscal incentives such as green subsidies and carbon pricing

► Global standardization across sectors

► Strong tech. innovation in large-scale, integrated solutions that drive efficiencies & reduce carbon emissions

Government-driven approach to achieving sustainability through

internationally coordinated politics and practices

UNFINISHED SYMPHONY

► Stagnated economic growth► Ineffective policies and failed

market structures► Poverty and inequity drag down

social and economic mobility► Weakening resilience of energy

systems► Large scale (national) energy

solutions driven by security concerns: hydro, nuclear, fossil fuels

Fragmented approach driven by desire for energy security in a

world with low global cooperation

HARD ROCK

21

Three Scenarios Stories


Energy Demand

22

Energy Demand

(‘000 MTOE)

0

2

4

6

8

10

12

14

16

18

20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Series1 Series2

Series3 Series4

Energy Demand per capita

(TOE)

1.0

1.2

1.4

1.6

1.8

2.0

2.2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Series1 Series2

Series3 Series4

peaking at equivalent of 2500 W


Carbon Emissions and Carbon Budget

23

0

5

10

15

20

25

30

35

40

1 2 3 4 5 6 7 8 9 10 11 12 13

Series1

Series2

Series3

Series4

Series5

Cumulative Carbon Emissions from 2015

(Gt CO2)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1 6 11 16 21 26 31 36 41 46

Series1 Series2

Series3

Annual Carbon Emissions

(Gt CO2)

CarbonBudget

year of reaching & exceeding carbon budget


Energy intensity & Fossil fuel share

24

Energy Intensity

(MJ / US$ 2010 MEX)

0

1

2

3

4

5

6

7

8

9

10

11

12

13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Series1 Series2

Series3 Series4

Fossil Fuel Share

(%)

40

45

50

55

60

65

70

75

80

85

90

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Series1 Series2

Series3 Series4


Natural Gas & Nuclear Demand

25

Natural Gas Demand

(‘000 MTOE)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Series1 Series2

Series3 Series4

Nuclear Electricity Generation

(‘000 TWh)

0

1

2

3

4

5

6

7

8

9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Series1 Series2

Series3 Series4


Wind & Solar Electricity

26

Wind Electricity Generation

(‘000 TWh)

0

1

2

3

4

5

6

7

8

9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Series1 Series2

Series3 Series4

Solar Electricity Generation

(‘000 TWh)

0

1

2

3

4

5

6

7

8

9

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Series1 Series2

Series3 Series4


Electricity Generation Mix


Transport

29

2014 96%

63%58%

76%

© World Energy Council 2016 | www.worldenergy.org | @WECouncil30

Abraham Maslow, 1943“theory on motivational

structure of a healthy person”

ENVIRONMENT

ENERGY SECURITY

AFFORDABILE ENERGY

PYRAMID OF ENERGY POLICY NEEDS:LEGITIMATE

BALANCING THEENERGY TRILEMMA:STRATEGIC


Energy SecurityThe effective management of primary energy supplyfrom domestic and external sources, the reliabilityof energy infrastructure, and the ability of energyproviders to meet current and future demand.

Environmental SustainabilityEncompasses the achievement of supplyand demand side energy efficiencies and thedevelopment of energy supply from renewableand other low-carbon sources.

Energy EquityAccessibility and affordability of energy supplyacross the population.

Balancing the‘Energy Trilemma’

ENERGYEQUITY

ENVIRONMENTALSUSTAINABILITY

World Energy Trilemma

© World Energy Council 2015


World Energy Scenarios 2060 UK

World


World Energy Trilemma 2016 UK

Germany


Priority actions

To meet climate targets, development goals and balance the trilemma a focus on a few key mechanisms is needed

• At the international level:

Trade and transfer Carbon pricing Financing of technology and subsidies mechanisms

• At the national level:

Demand management Prioritisation ofand energy efficiency innovation and RD&D

Financingmechanisms

Demand managementand energy efficiency

Prioritise innovationand RD&D

Trade and transferof technology

Carbonpricing

Financingmechanisms




Carbonpricing

Financingmechanisms




Carbonpricing

Financingmechanisms




Carbonpricing

@chwfrei




Defining measures to accelerate the energy transition

35

10TH European IFRS power and utilities roundtable

29 November 2016

10th european ifrs power and utilities roundtable · 2017-03-07 · 10theuropean ifrs power and...

Documents