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Energy Transition: How Fast? Philippe Roos AOGC 2019 | 25 June 2019 - - PowerPoint PPT Presentation
Energy Transition: How Fast? Philippe Roos AOGC 2019 | 25 June 2019 - - PowerPoint PPT Presentation
Energy Transition: How Fast? Philippe Roos AOGC 2019 | 25 June 2019 2 The Energy Transition Fact 0: Climate change is real and manmade Fact 1: The energy transition is happening Fact 2: It is only starting Prediction: 100%
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The Energy Transition
- Fact 0: Climate change is real and manmade
- Fact 1: The energy transition is happening
- Fact 2: It is only starting
- Prediction: 100% renewable energy by 2100 (mostly solar)
- Question: How do we get there?
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▪Oil companies (and the IEA) don't expect
- il demand to peak
anytime soon
4 20 40 60 80 100 120 140 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
(mb/d)
IEA BAU Equinor Rivalry Exxon Base Shell Oceans IEA Base Equinor Reform BP ET
Oil Demand Scenarios
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▪Oil companies (and the IEA) might be wrong
5 (mb/d 2015-40, IEA, base case)
Incremental Oil Demand
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More Oil Demand Scenarios
6 20 40 60 80 100 120 140 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
Shell Sky BP RT Exxon 2°C Equinor Renewal IEA 2°C IPCC 1.5°C DNV GL IEA <2°C Irena Greenpeace LUT
20 40 60 80 100 120 140 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
(mb/d)
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▪Oil companies call gas a "bridge" or "destination" fuel ▪Does gas really have a future?
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Renewable Parity Timeline
20 40 60 80 100 120 140 2015 2020 2025 2030 2035 2040 2045 2050 ($/MWh) CCGT Offshore Wind Onshore Wind Solar PV
Timeline for wind/PV to displace CCGT. European gas prices, no CO2 pricing. Source: Energy Intelligence
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The Financial Transition
▪Financial markets start to reprice assets when the peak happens ▪Examples: European utilities post 2008, US coal post 2012 ▪The shift in investors' perception can occur before the actual transition does ▪Is it happening to the oil industry? Is current negative investor sentiment secular rather than cyclical?
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Message 1: Physical Transitions Can Be Fast
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NYC, Fifth Av., 1900: one car NYC, Fifth Av., 1913: all cars
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Message 2: Financial Transitions Can Be Faster
10 20 40 60 80 100 120 140 160
S&P 500 GE
(share price/index value, 100 = June 2014)
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Contact Details Philippe Roos (Strasbourg) T: +33 (0)6 22 86 37 76 E: proos@energyintel.com The Americas
270 Madison Avenue, Suite 302 New York, NY 10016 Tel: +1 212 532 1112 1401 K Street, NW, Suite 1000 Washington, D.C. 20005 T: +1 202 662 0700 808 Travis Street, Suite 1014 Houston, TX 77002 T: +1 713 222 9700
Europe
7 Down Street, 3rd Floor London W1J 7AJ, UK T: +44 (0)20 7518 2200 Daev pereulok 20, Office 509 107045 Moscow, Russia T: +7 495 604 8279/78/77
Middle East & Asia-Pacific
15A Temple Street, #02-01 Singapore 058562 T: +65 6538 0363 Aurora Tower, 1907 Dubai Media City P.O. Box 502803 Dubai, UAE T: +971 4 364 2607/2608 1st Floor, Freij Bldg, Sodeco President Elias Sarkis Street Beirut, Lebanon T: +961 1 614282 & 3