ENERGY IN TRANSITION Gyrgy Kbor MVM Group W E PERCEIVE AT LEAST 6 - - PowerPoint PPT Presentation

György Kóbor MVM Group

ENERGY LEADERS PANEL – ENERGY IN TRANSITION

Budapest Energy Summit, 3 December 2018

WE PERCEIVE AT LEAST 6 MEGATRENDS OF THE ONGOING ENERGY TRANSITION

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GAME CHANGER TRENDS OF THE ENERGY SECTOR

Decentralization Sector coupling Decarbonization Digitalization Democratization Electrification

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Clean Energy Package Clean Planet for All

3 December 2018 György Kóbor, CEO & Chairman of the BoD, MVM Hungarian Electricity Ltd. 2

THE INCUBATION OF NEW TECHNOLOGIES, THE BOOM OF RENEWABLES WILL TRANSFORM THE TRADITIONALLY

ESTABLISHED SYSTEMS STRUCTURE The primary perspective of the energy systems change: in the past upstream was in focus, whereas in the future downstream components will be game changers

Decentralization

Source: EDSO for smart grids

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Upstream driven centralized system Downstream driven decentralized system

BASE LOAD GENERATION FLEXIBILITY RESERVES

POD MVL & LVL DISTRIBUTION

METERING UTILITY SERVICES TRANSMISSION GRID DEVELOPMENT

DSPP HEMS EV UTILITY SIZE RES STORAGE ACTIVE GRID MGMT DRM AGGREGATION RES INTEGRATION

BASE LOAD GENERATION FLEXIBILITY RESERVES TRANSMISSION GRID DEVOP

György Kóbor, CEO & Chairman of the BoD, MVM Hungarian Electricity Ltd.

DECENTRALIZED SYSTEMS AND THE WIDESPREAD USE OF RENEWABLES WILL DRIVE THE COUPLING OF THE

ELECTRICITY SECTOR WITH HEATING/COOLING AND TRANSPORTATION, FURTHER BOOSTING ELECTRIFICATION An extensive coupling of neighbouring sectors will be necessary to meet the new challenges

• f the electricity systems

Estimated energy consumption (EU-28 countries, by energy types)

Source: European Committee, reference scenario 2050 (2016), Eurelectric

Fossil fuels Biomass Syntethic fuels

Transportation Electricity supply system

Thermal PP Wind PP Co-generation plants Solar PP Hydro PP

Heating/cooling generation

Geothermal Heat boilers Solar heat Heat pumps/ AC Electric boilers P2x Electricity storage Transmission and distribution grid Thermal storage Individual or collective heating/cooling distribution system

Electrification & sector coupling

50 100 150 200 2015 2020 2025 2030 2035 2040 2045 2050 % (2015=100%) TOTAL: +67% CAGR = 1.5% Power (scenario 1) Coal / Firewood Gas Oil Heat Power (scenario 2) Power (scenario 3) 3 December 2018 György Kóbor, CEO & Chairman of the BoD, MVM Hungarian Electricity Ltd. 4

DUE TO DIGITALIZATION THE OFFTAKERS WILL BEHAVE MORE LIKE REAL CUSTOMERS FACILITATING MARKET ENTRY

FROM OTHER INDUSTRIES

Use of electric vehicles Self supply of energy with rooftop solar panels Smart home equipment Self stroing energy in wall box accumulators provides energy independence for customers Digital utilities, digital customer journeys Energy efficiency solutions to help decreasing energy bills Price and service comparison platforms

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The key success driver will be the control over the direct customer relationship The future arena of competition: customer homes and enterprise processes

György Kóbor, CEO & Chairman of the BoD, MVM Hungarian Electricity Ltd.

AS NEW SERVICES EMERGRE, VALUE CREATION SHIFTS DOWNSTREAM CLOSE TO THE CUSTOMER

* AMI = Advanced Metering Infrastructure Source: Boston Consulting Group (2014, USA)

Generation & wholesale Transmission Distribution Metering Services „behind the meter” Retail Distributed generation New services Traditional utility services 30-40% Revenues for traditional utility 15-20% 40-50% 0-10% 0-5% 0-2% 0-2% Lower plant utilization Drivers of value shift Investment in grid, lower regulated remuneration Smart meter AMI* services IT systems, self service applications Smart equipment, IT Distributed generation equipment installation and leasing Direction of shift 20-30% Future revenues with distributed energy 10-15% 20-30% 5-15% 5-10% 0-10% 15-20%

Customer oriented value creation will be necessary to maintain competitiveness

3 December 2018 György Kóbor, CEO & Chairman of the BoD, MVM Hungarian Electricity Ltd. 6

3 December 2018 György Kóbor, CEO & Chairman of the BoD, MVM Hungarian Electricity Ltd. 7

Thank you for your attention!