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BNEF coverageStrategies for a cleaner, more competitive future

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PART 1Economic Transition

Scenario

PART 2 NEO Climate Scenario

PART 3Implications for policy

New Energy Outlook 2020

3

0

5

10

15

20

25

30

35

2012 2019 2030 2040 2050

GtCO2

Power Industry Transport Buildings

Energy emissions in the NEO Economic Transition Scenario

Source: BloombergNEF

4

Fuel combustion emissions


0

2

4

6

8

10

12

14

16

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

GtCO2

Coal

Oil

Gas

5

Coal demand peaked in 2018


2019

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2000 2010 2020 2030 2040 2050

PJ Power

Non-energy use

Other

Commercial

Residential

Other industry

Petrochemicals

Cement

Aluminum

Steel

Coal demand, by end-use sector

6

Wind and PV grow to 56% of electricity generation worldwide in 2050


Coal

GasOil

Nuclear

Hydro

Wind

Solar

Other2019

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1970 1980 1990 2000 2010 2020 2030 2040 2050

Historical global power generation mix NEO 2020 global power generation mix

56% solar & wind

24% fossil fuels by 2050

69%renewables

7

Source: BloombergNEFSource: BloombergNEF

Total installed capacity, 2019 Total installed capacity, 2050

Power capacity almost triples to 2050

7%

15%

1%2%

7%

20%

38%

2%8%

20,391GW

Coal

Gas

Oil

Nuclear

Hydro

Wind

Solar

Other

Storage

28%

23%

4%5%

16%

9%

9%

4% 2%

7,367GW

Coal

Gas

Oil

Nuclear

Hydro

Wind

Solar

Other

Storage

8

PV module price and cumulative installed capacity

Onshore wind turbine price and cumulative installed capacity

Li-ion battery pack price and demand

Innovation and scale have driven down the costs of renewable technology…

Source: BloombergNEF Source: BloombergNEF Source: BloombergNEF

0.21

0

200

400

600

800

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2010 '12 '14 '16 '18 '20e

GW$/W (2019 real)

89% reduction since 2010

0.70

0

150

300

450

600

750

0.0

0.4

0.8

1.2

1.6

2.0

2010 '12 '14 '16 '18 '20e

GW$m/MW (2019 real)


132

0

100

200

300

400

500

600

700

0

200

400

600

800

1,000

1,200

1,400

2010 '12 '14 '16 '18 '20e

GWh$/kWh (2019 real)


9

PV module efficiency Onshore wind capacity factors Battery cell energy density

…and at the same time the technology keeps getting better

Source: BloombergNEF Source: BloombergNEFSource: BloombergNEF, public announcements, company interviews

2010 2015 2020

0

100

200

300

400

500

600

2010 '12 '14 '16 '18 '20e

Wh/kg

BNEF

Company disclosed

35%

31%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2000 '05 '10 '15 '20e

Decile rangeQuartile rangeAverageMedian

17.5%

21.1%

16.2%

19.1%

14%

16%

18%

20%

22%

2010 '12 '14 '16 '18

Mono

Multi

10

Renewables are now the cheapest new electricity in countries making up just under ¾ of world GDP

Onshore wind

Offshore windUtility PV – fixed axisUtility PV – trackingNatural Gas – CCGTCoalNot covered

China$38

Japan$71

India$33

Australia$39

Brazil$30

U.S.$37

U.K.$45

Germany$50

South Africa$50Source: BloombergNEF

11

0

10

20

30

40

50

60

70

2020 2025 2030 2035 2040 2045 2050

$/MWh (real 2019)


China: new wind & PV vs. existing coal & gas United States: new wind and PV vs. existing coal & gas

In the next 5 years, wind & PV are on track to be cheaper than running existing coal and gas

0

10

20

30

40

50

60

70

2020 2025 2030 2035 2040 2045 2050

$/MWh (real 2019)

CCGT

Coal

Onshore wind

PV (no tracking)

CCGT

Coal

Onshore wind

PV (no tracking)

12

But limit appears to be 70-80% wind & PV


Penetration of wind and PV in electricity generation, by country

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2020 2025 2030 2035 2040 2045 2050

Average

IberiaGermanyU.K.AustraliaIndiaMexicoU.S.ChinaJapanBrazil

13

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2012 2020 2025 2030 2035 2040 2045 2050

Bcm

Gas use in power peaks in 2019 falls 0.7% year on year from 2030


Combined-cycle gas

Peaker gas

Gas use in the power sector

14

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2012 2020 2025 2030 2035 2040 2045 2050

GW

Gas capacity grows year on year, peakers outpace CCGT from 2029

Source: BloombergNEF Source: BloombergNEF

Cumulative installed power capacity CCGT capacity factors, by country

Combined-cycle gas 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Europe MENA U.S.China India Average

Peaker gas

15

0

20

40

60

80

100

120

14075

6175

6575

6975

7375

7775

8175

8575

8975

9375

9776

0176

0576

0976

1376

1776

2176

2576

2976

3376

3776

4176

4576

4976

5376

5776

6176

6576

6976

7376

7776

8176

8576

8976

9376

9777

0177

0577

0977

1377

1777

2177

25

GW

NFIS LIGN CC SC CCGT1 CCGT4 OCGT O OTHER BMBF EFW GEOHYDRR HYDR WOFFS WIND STH SPVTR SPV SPVRT FLEX BATT1 Curt.


Weekly electricity generation, Germany

Gas

Onshore wind

Offshore wind

PV

Curtailment

Batteries

2040

16

Gas demand grows 0.5% year on year to 2050


Primary gas demand, by end-use sector

2019

0

50,000

100,000

150,000

200,000

2000 2010 2020 2030 2040 2050

PJ Power

Non-energy use

Other

Shipping

Road

Commercial

Residential

Other industry

Petrochemicals

Cement

Aluminum

Steel

17

Oil demand peaks in 2035


Primary oil demand, by end-use sector

2019

0

50,000

100,000

150,000

200,000

250,000

2000 2010 2020 2030 2040 2050

PJPower

Non-energy use

Other

Aviation

Shipping

Road

Commercial

Residential

Other industry

Petrochemicals

Cement

18


Global passenger vehicle sales, by drivetrain Global passenger vehicle fleet, by drivetrain

Oil demand is shaped by the transition to electric drivetrains in road transport

0

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040 2045 2050

Million

BEV PHEV FCV ICE

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2015 2020 2025 2030 2035 2040 2045 2050

Billion

ICE FCV PHEV BEV

19

0

5

10

15

20

25

30

35

2012 2019 2030 2040 2050

GtCO2

Power Industry Transport Buildings

2°C

1.75°C

1.5°C

Energy emissions in the NEO Economic Transition Scenario, and climate pathways


20


2019 2050

Total final energy

11%

15%

41%

10%

20%

3%

419 EJ

Coal Gas Oil Bioenergy Electricity Other

10%

19%

32%

11%

24%

4%

516 EJ

Coal Gas Oil Bioenergy Electricity Other

21

0

5

10

15

20

25

30

35

2020 2025 2030 2035 2040 2045 2050

Thou

sand

s

GtCO2

ETS

Emissions from end-use sectors Emissions from power sector Net impact of electrification

Electrification of transport, buildings and industry saves emissions…

Source: BloombergNEF Source: BloombergNEF Source: BloombergNEF

-34%

0

5

10

15

20

25

30

35

2020 2025 2030 2035 2040 2045 2050

Thou

sand

s

GtCO2

ETS

0

5

10

15

20

25

30

35

2020 2025 2030 2035 2040 2045 2050

Thou

sand

s

GtCO2

Electrification

22

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2015 2020 2025 2030 2035 2040 2045 2050

GW Small-scale batteries

Utility-scale batteries

Small-scale PV

Utility-scale PV

Offshore wind

Onshore wind

Biomass

Hydro

Nuclear

Peaker gas

Combined-cycle gas

Coal

Source: BloombergNEF Note: NCS-CEHP is NEO Climate Scenario: Clean Electricity and Green Hydrogen PathwaySource: BloombergNEF Note: ETS is Economic Transition Scenario

Cumulative installed capacity, ETS Cumulative installed capacity, NCS-CEHP

…and doubles the size of the power system

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2015 2020 2025 2030 2035 2040 2045 2050

GW

ETS

H2

23

Hydrogen demand, by sector, NCS-CEHP

Source: BloombergNEF Note: NCS-CEHP is NEW Climate Scenario: Clean Electricity and Green Hydrogen Pathway

0

100

200

300

400

500

600

700

800

2015 2020 2025 2030 2035 2040 2045 2050

Mt

Industry Power Transport Buildings

SteelCement

Other Industry

Petrochemicals

PowerHeavy trucks

CarsLight trucks and buses

ShippingRail

ResidentialCommercial

24

Source: BloombergNEF Note: ETS is Economic Transition Scenario

A 100,000TWh clean electricity & green hydrogen energy economy in 2050

0

20,000

40,000

60,000

80,000

100,000

2015 2020 2025 2030 2035 2040 2045 2050

TWh

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2021 2025 2030 2035 2040 2045 2050

Million square kilometers

25

0

5

10

15

20

25

30

35

2020 2030 2040 2050

GtCO2e

Coal Gas Oil

0

20

40

60

80

100

120

140

160

2015 2020 2025 2030 2035 2040 2045 2050

EJ


Oil and gas demand, ETS vs NCS-CEHP Energy emissions in the NCS-CEHP and a range of carbon budgets

Oil demand peaks in 2028, gas in 2023 and emissions on track for 1.75 degrees

2°C

1.75°C

1.5°C

Oil (ETS)

Oil (NCS-CEHP)

Gas (NCS-CEHP)

Gas (ETS)

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Copyright© Bloomberg Finance L.P. 2020. This publication is the copyright of Bloomberg Finance L.P. in connection with BloombergNEF. 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 BloombergNEF.DisclaimerThe BloombergNEF ("BNEF"), service/information is derived from selected public sources. Bloomberg Finance L.P. and its affiliates, in providing the service/information, believe that the information it uses comes from reliable sources, but do not guarantee the accuracy or completeness of this information, which is subject to change without notice, and nothing in this document shall be construed as such a guarantee. The statements in this service/document reflect the current judgment of the authors of the relevant articles or features, and do not necessarily reflect the opinion of Bloomberg Finance L.P., Bloomberg L.P. or any of their affiliates (“Bloomberg”). Bloomberg disclaims any liability arising from use of this document, its contents and/or this service. Nothing herein shall constitute or be construed as an offering of financial instruments or as investment advice or recommendations by Bloomberg of an investment or other strategy (e.g., whether or not to “buy”, “sell”, or “hold” an investment). The information available through this service is not based on consideration of a subscriber’s individual circumstances and should not be considered as information sufficient upon which to base an investment decision. You should determine on your own whether you agree with the content. This service should not be construed as tax or accounting advice or as a service designed to facilitate any subscriber’s compliance with its tax, accounting or other legal obligations. Employees involved in this service may hold positions in the companies mentioned in the services/information.The data included in these materials are for illustrative purposes only. The BLOOMBERG TERMINAL service and Bloomberg data products (the “Services”) are owned and distributed by Bloomberg Finance L.P. (“BFLP”) except (i) in Argentina, Australia and certain jurisdictions in the Pacific islands, Bermuda, China, India, Japan, Korea and New Zealand, where Bloomberg L.P. and its subsidiaries (“BLP”) distribute these products, and (ii) in Singapore and the jurisdictions serviced by Bloomberg’s Singapore office, where a subsidiary of BFLP distributes these products. BLP provides BFLP and its subsidiaries with global marketing and operational support and service. Certain features, functions, products and services are available only to sophisticated investors and only where permitted. BFLP, BLP and their affiliates do not guarantee the accuracy of prices or other information in the Services. Nothing in the Services shall constitute or be construed as an offering of financial instruments by BFLP, BLP or their affiliates, or as investment advice or recommendations by BFLP, BLP or their affiliates of an investment strategy or whether or not to “buy”, “sell” or “hold” an investment. Information available via the Services should not be considered as information sufficient upon which to base an investment decision. The following are trademarks and service marks of BFLP, a Delaware limited partnership, or its subsidiaries: BLOOMBERG, BLOOMBERG ANYWHERE, BLOOMBERG MARKETS, BLOOMBERG NEWS, BLOOMBERG PROFESSIONAL, BLOOMBERG TERMINAL and BLOOMBERG.COM. Absence of any trademark or service mark from this list does not waive Bloomberg’s intellectual property rights in that name, mark or logo. All rights reserved. © 2020 Bloomberg.

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