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APPROACHES FOR USING SCENARIOS IN STRATEGIC DECISION- MAKING TCFD U.S. Scenario Analysis Conference Nathaniel Bullard May 1, 2018
APPROACHES FOR USING SCENARIOS IN STRATEGIC DECISION- MAKING
TCFD U.S. Scenario Analysis Conference
Nathaniel Bullard
May 1, 2018
1 May 1, 2018
Analysis to help you understand the future of energy
Advanced Transport
Electrified
Transport
Impact on
Transport
Impact on
oil demand
Autonomous
Driving
Shared
Mobility
Emerging Technologies
Internet of
Things
Machine
Learning &
Analytics
Impact on
Industrials
and Energy
Advanced
Materials
Carbon
Oil &
Products
Commodities
LNG &.
Gas
EU Power,
US Power
Clean Energy
Solar Wind Storage Frontier
Power
Decentralized
Energy
Impact
on Power
& Utilities
2 May 1, 2018
New Energy Outlook
3 May 1, 2018
● Use a range of scenarios from multiple sources
● Ask “what do I need to believe?” for this to come true
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Principles for using climate scenarios
4 May 1, 2018
● Use a range of scenarios from multiple sources
● Ask “what do I need to believe?” for this to come true
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Principles for using climate scenarios
5 May 1, 2018
Many routes to meet two degree carbon budget…
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2012 2017 2020 2025 2030 2035 2040
Carbon emissions (MtCO2)
Source: Bloomberg New Energy Finance Note: data is for power sector only.
6 May 1, 2018
Source: Bloomberg New Energy Finance, IEA, EIA; Note: solar includes PV & solar thermal; wind includes onshore and offshore wind.
Installed capacity by technology, 2040 Change in gas demand, 2015-2040
…and many tech pathways
0%
20%
40%
60%
80%
100%
120%
140%
160%
2015 2020 2025 2030 2035 2040
%
NEO 2017
IEA Current Policies
IEA New Policies
IEA 4500%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
NEO 2017 IEACurrentPolicies
IEA NewPolicies
IEA 450 EIAReference
%
Other
Other renewables
Solar
Wind
Hydro
Nuclear
Oil
Gas
Coal
7 May 1, 2018
● Use a range of scenarios from multiple sources
● Ask “what do I need to believe?” for this to come true
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Principles for using climate scenarios
8 May 1, 2018
● Use a range of scenarios from multiple sources
● Ask “what do I need to believe?” for this to come true
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
9 May 1, 2018
CCS is still found everywhere
Company Role of CCS in forecast
Bloomberg New Energy Finance CCS not part of analysis
IEA
• 450 scenario: “(…) Carbon capture and storage (CCS) picking up in the
2030s (…); 70% of coal plants equipped with CCS
• New Policies scenario: <1,000 Mtce of coal demand for CCS/IGCC
BP
• Base case: not clear
• Even Faster transition: “more than a third of the carbon emissions from
the remaining coal and gas power generation are capture and stored”
ExxonMobil • “[Technological] Advances will promote (…) emerging opportunities for
technologies like carbon capture and storage (CCS).”
Shell
• Mountains scenario: “(…) success of carbon capture and storage
technologies.”
• Oceans scenario: “(…) carbon capture and storage is delayed”
Statoil • Reform scenario: “Many successful [CCS] projects (…)”
• Renewal scenario: “Significant growth [of CCS] (…)”
10 May 1, 2018
● Use a range of scenarios from multiple sources
● Ask “what do I need to believe?” for this to come true
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
11 May 1, 2018
Solar PV got cheap, and it will get cheaper
$0/W
$1/W
$10/W
$100/W
1 10 100 1,000 10,000 100,000 1,000,000
1976
Cumulative capacity (MW)
2017e
2003
2008
2015
1985
$23.7
$7.6 $5.0
$1.8 $0.3
1975 80 90 2000 10 17
Source: Bloomberg New Energy Finance
Crystalline silicon solar PV experience curve $94.4/Watt
12 May 1, 2018
Offshore wind turbine capacity by commissioning date
0
2
4
6
8
10
12
1990 1995 2000 2005 2010 2015 2020 2025
Turbine capacity (MW)
Forecast
All projects
Annual average
2021, 9.0MW
2022, 9.9MW
2023, 10.9MW
Note: X-axis denotes commissioning date. A
project-weighted average was used for
projects with multiple turbine models.
Source: Bloomberg New Energy Finance
13 May 1, 2018
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.
Lithium-ion battery prices, historical and forecast
0
100
200
300
400
500
600
700
800
900
1,000
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
$/kWh
BNEF observedvalues
19% learningrate
BNEF observed values: annual lithium-ion battery price index2010-16.
2030 average lithium-ion battery price:$73/kWh
2025 average lithium-ionbattery price: $109/kWh
14 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
15 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
16 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
17 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
18 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
19 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
20 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
21 May 1, 2018
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
22 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
23 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
24 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
10
20
30
40
50
60
70
80
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
25 May 1, 2018
Source: IEA World Energy Outlook Note: 2004-2009 Reference, 2010-2016 New Policies Scenario
Global cumulative solar installations
02004006008001,0001,2001,4001,600GW installed
Historical 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual solar additions
IEA solar capacity forecast evolution
0
1,000
2,000
3,000
4,000
5,000
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW installed
0
50
100
150
200
250
300
350
2000 2005 2010 2015 2020 2025 2030 2035 2040
GW per year
BNEF NEO 2017
BNEF NEO 2017
26 May 1, 2018
Source: Bloomberg New Energy Finance, BP, OPEC, Exxon, IEA
Electric vehicle projections
-
100
200
300
400
500
600
2020 25 30 35 40
EV fleet size - millions
OPEC – 2015
27 May 1, 2018
Source: Bloomberg New Energy Finance, BP, OPEC, Exxon, IEA
Electric vehicle projections
-
100
200
300
400
500
600
2020 25 30 35 40
EV fleet size - millions
BNEF – 2016
OPEC – 2015
28 May 1, 2018
Source: Bloomberg New Energy Finance, BP, OPEC, Exxon, IEA
Electric vehicle projections
-
100
200
300
400
500
600
2020 25 30 35 40
EV fleet size - millions
BNEF – 2016
OPEC – 2015
OPEC – 2016
29 May 1, 2018
Source: Bloomberg New Energy Finance, BP, OPEC, Exxon, IEA
Electric vehicle projections
-
100
200
300
400
500
600
2020 25 30 35 40
EV fleet size - millions
BNEF – 2016
BNEF – 2017
OPEC – 2015
OPEC – 2016
30 May 1, 2018
Source: Bloomberg New Energy Finance, BP, OPEC, Exxon, IEA
Electric vehicle projections
-
100
200
300
400
500
600
2020 25 30 35 40
EV fleet size - millions
BNEF – 2016
BNEF – 2017
BP – 2016
BP – 2017
Exxon – 2016
Exxon – 2017
OPEC – 2015
OPEC – 2016
IEA – 2016
IEA – 2017
31 May 1, 2018
● Use a range of scenarios from multiple sources
● Ask “what do I need to believe?” for this to come true
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
32 May 1, 2018
Source: Bloomberg New Energy Finance Note:*energy -related emissions only.† U.S. 2030 target is extrapolated based on target trend to 2025
Which Paris targets pose the greatest risk for business?
33 May 1, 2018
● Use a range of scenarios from multiple sources
● Ask “what do I need to believe?” for this to come true
● Be sceptical of futures that look just like the past
● Get the most up to date data and review often
● Identify climate risk primarily at a country level
Key points
34 May 1, 2018
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Nat Bullard
