decarbonising europe: the future of energy & water

360 Degree Perspective of the Global Energy & Environment Industry

Decarbonising Europe: The Future of Energy & Water

London

May 2011

2

Growth Opportunities in a Complex Business Universe

3

Agenda

1. Energy & Water Management are True Megatrends of the 21st Century

2. Top 10 Markets to Watch

3. The Technology Perspective …. Smart Technology Re-Defining

Competition

4. The Global Perspective …. ‘Water’ is Emerging as a Major Energy

Efficiency Segment

5. The Customer Perspective …. Energy Efficiency at Point of Use

6. Opportunity Discussion

4

Energy & Water Management are True Megatrends of the 21st Century

5

The ‘Simple’ Challenge .... Balancing 3 Issues

GlobalEnergy

DemandEnvironment

Fuel Supply and Costs

6

The ‘Simple’ Challenge .... Balancing 3 Issues

GlobalEnergy

DemandEnvironment

Fuel Supply and Costs

Technology Innovation

Connectivity& Integration

Efficiency of Usage

7

1970 19901980

Fuel Supply/Cost

Trends

Major Issue

Global EnergyDemand

Evolution of Market Issues

EU Directive for air-quality standards and smoke

2000 2010

Heightened public objection to emissions

Greenhouse gas emissions allowance

trading scheme

Major strikes in UK as coal production

is cut

Chernobyl disaster challenges nuclear

safety

Emergence of major capacity gaps

across Europe & NA

First wave of Nuclear

Production outages in North Sea

Fears over security of gas supplies from

e.g Russia

EnvironmentIssues

Extremely cold weather in Europe increases demand

and oil prices

Libya nationalises British Petroleum concession & Iraq

follows soon

Acceleration of oil prices

Windfall profits tax enacted and later reduced

‘Dash for Gas’

German government announces plans to phase

out nuclear power

Adoption of EU Large Combustion Plant Directive (LCPD)

Global water Stress

Prices rise as oil embargo begins

Oil embargo ends

20: 20: 20 EU vision for

renewables

US boom followed by

crash

China boom

2011:• Security of Energy Supply• Portfolio Diversification• Energy Efficiency• Capacity Optimisation• Integration of Renewables• Sustainable Water

2011:• Security of Energy Supply• Portfolio Diversification• Energy Efficiency• Capacity Optimisation• Integration of Renewables• Sustainable Water

8

2010 20202015

Fuel SupplyAnd Costs

Major Issue

Global EnergyDemand

Timeline for Major Market Issues (and one big conclusion)

China overtakes the US as the world’s biggest emitter

of CO2

2025 2030

Global Energy Demandalmost double 2000 levels

Growth dominatedBy India & China

GlobalCO2 Emissions

reach 40 Gt

20% RenewableEnergy in Europe

Demand for liquid fuel falling after 2015

Stationary fuel cellscontribute to

distributed generation

Accelerated investmentin carbon capture

and storage

Electricity generation passes 30,000 billion kWh

Continued accelerationof coal-fired power

Acceleration ofNatural gas

Coal reachesAlmost 40% of energy

Consumption, following growth in India and China

Global Electricity

Generation(billion kWhr)

Source: Frost & Sullivan and EIA.

10,000

EnvironmentIssues

20,000

30,000

0

ResurgenceOf Nuclear

Oil passes$100 per

barrel

Growth of natural gaskept in check by high

gas prices

Deceleration andmaturation of EU

Long-runningboom in Russia

2010 20202015 2025

Growth Resumedin all regions

Developing economiespass 40% of electricity

demand

Oil dropsTo $35 per

barrel

Global RenewablesGrowth

Potable waterconsumption up

50% on 1995

Boom in RODesalination

Energy from Waste in Emerging

Markets

9

Source : International Energy Agency, Frost & Sullivan

Growth in Electricity Generation by Fuel

Global Electricity Generation Forecast in TWh (World), 2010-2030)

0

5000

10000

15000

20000

25000

30000

35000

2010 2015 2020 2025 2030

Coal Oil Gas Nuclear Hydro Wind Other renewables

Electricity Generation Average Annual Growth Rates by Technology (World), 2010-2030

2.3%

-3.5%

2.8%

2.9%

2.6%

12.8%

8.2%

2.7%

0.6%

-2.8%

1.9%

2.2%

1.8%

6.1%

8.3%

1.8%

-5% 0% 5% 10% 15%

Coal

Oil

Gas

Nuclear

Hydro

Wind

Other renewables

Total

2010-20 2020-30

10

Share of Fossil–Based Electricity Generation by Region (World), 2010

Share of Fossil–Based Electricity Generation by Region (World), 2020

Source : International Energy Agency, Frost & Sullivan

*Carbon-Free includes nuclear and all renewable energy sources

46%61%

91%

70%60%

27%

62% 67%77%

58% 58%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Carbon-Free Fossil

52%67%

97%81%

65%

32%

80% 82% 84%66% 67%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Carbon-Free Fossil

Fossil Fuel Dominance to 2020 and Beyond

11

De-Carbonising .... Challenges & Opportunities

Issues & Challenges:

• Green investment is too often not price competitive

• Too many markets remain beholden to incentives & grants

• Regulations cover the ‘What’ and not so much the ‘How’

Opportunities:

• When the issues go beyond green

• Where the added value becomes truly tangible

• When secure financing is available

• When there is a real RoI

• .... When the risk for the customer is low.

12

Outlook for the Environment & Energy Industry Top 10 Technologies and Markets to Watch For in 2020

Energy Recovery from Waste

Energy Recovery from Waste

Energy Efficiency in Buildings

Energy Efficiency in Buildings

SMART BuildingsSMART

Buildings

LED Lighting Revolution

LED Lighting Revolution

Water Re-Use & Desalination

Water Re-Use & Desalination

Top 10 Markets of the Future

Top 10 Markets of the Future

Key technology platforms that are poised to have a profound impact on a number of sectors across the globe. These areas present a potential high ROI.

Key technology platforms that are poised to have a profound impact on a number of sectors across the globe. These areas present a potential high ROI.

Source: Frost & Sullivan

SMART Grid/ SMART EnergySMART Grid/

SMART Energy

Advanced Batteries and Energy StorageAdvanced Batteries and Energy Storage

Fuel CellsFuel Cells

Solar PVSolar PV

Carbon Capture and Storage

Carbon Capture and Storage

13

The Technology Perspective …. Smart Technology Re-Defining Competition

14

Smart Concepts and the Key Enablers for Growth

Building

UtilitySystem

OtherBuildings• Fully automated

‘digital’ buildings• Continuous 2-way communication• Micro-generation• Demand response• Smart materials• Fully integrated building controls

Key Features

• Open architecture• Advanced building design• Software tools• Analysis & reporting• Connectivity of devices• Networks of ubiquitous sensors

Growth Enablers

Smart Building

Smart Grid

SmartCity

• Inter-connectivity between buildings and communities• Virtual consumers• Shared efficiency gains• Smart service delivery (safety, health, education etc.)

Key Features

• IP networks and affordable broadband• Real-time network visualisation• Inter-connected advanced metering infrastructure• Buy-in from city leaders

Growth Enablers

• Optimised use of capacity• Advanced metering infrastructure• Integrating renewables• Digital intelligence• Remote control• Micro grids• Virtual power plants

Key Features

• Smart metering• Drive from utilities• Regulation• Energy price signals• Energy storage• Integrated communications• Sensing & measurement

Growth Enablers

1

2

3

Source: Frost & Sullivan.Source: Frost & Sullivan.

15

ChinaNorth

AmericaEurope

Key Market Drivers and Impact by Region

Source: Frost & Sullivan.

Growth in Electric Vehicles

Low High1 52 3 4

Low High

1 52 3 4

Low High

Power Demand

Exceeding Supply Low High

1 52 3 4

Low High

1 52 3 4

Low High

Grid Infrastructure NeedsLow High

1 52 3 4

Low High

1 52 3 4

Low High

Downstream Energy Efficiency

Low High

1 52 3 4

Low High

1 52 3 4

Low High

Integration of Renewable Energy Sources

Low High

1 52 3 4

Low High

1 52 3 4

Low High

Demand Response Low High

1 52 3 4

Low High

1 52 3 4

Low High

1 52 3 4

1 52 3 4

1 52 3 4

1 52 3 4

1 52 3 4

1 52 3 4

Smart Grid Drivers

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Convergence of Technology Leads to Convergence of Competition

IT Players Automation/Building Control Players

Energy/InfrastructurePlayers


• IP Networks• Digital Technology• Analysis Software• Wireless Communication• Technology Integration• Network Security• Etc.

• T&D Technology• Power Electronics• Renewable Energy• Integrated Distribution Management• Substation Automation• AMI-Enabled Metering• Etc.

• Building Automation• Demand-Side Management• Connectivity of devices• Monitoring and Sensing• Smart Grid Integration• Etc.

17

Emergence of Tier 1 Integrated Solution Providers

IT Players Automation/Building Control Players

Energy/InfrastructurePlayers

Tier 1 Integrated Solution Providers.


18

Tier 1 Players are Evolving ... Partnerships are Changing

Hardware

Process

Technology


Arrow indicates current strategic direction.

19

The Global Perspective …. ‘Water’ is Emerging as a Major Energy Efficiency Segment

20

Rapid Population Growth & Urbanisation

Water StressStorm/Flood

water Management

Material Resource & Energy Recovery

Carbon Footprint

Water Quality & Public Health

Water reuse and Recycling

Social

Ecological

Economical

Water Supply & Sanitation Needs of Remote Communities

Aquatic biodiversity & Habitats

International AgenciesRegional/National Environment

Protection Agencies

Political &

Financial Business & Financial Agencies

Sustainable Water Management SolutionsDrivers of De-Carbonisation

Water TariffsNon Revenue Water

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Sustainable Water Treatment Solutions

Technology Roadmap

1980 20001990

Evolution of Water Management Technologies and Solutions

2010 2020

MembraneTechnology

ServiceOutsourcing

Thermal Desalination

Water & WastewaterTreatment

WaterManagement

Re-Use & Recycling

AdvancedWW Treatment

(ex. Nutrient removal)

Inte

grat

ed W

ater

Man

agem

ent &

S

ervi

ces

TurnkeySolutions

Material, Resource & Energy Recovery

Bio SolidsManagement

WorldwideSanitation

Treatment Systems for Small Communities

Retrofit, Replacement & Upgrading

Developing Countries

Ballast Water Treatment

Low-Carbon Solutions & Services

Chemical free treatment

RO Desalination

Storm water Management

Water Re-Use& Recycling

Smart Water Solutions

22

Water Usage Inherently Linked to Power Generation

COAL NATURAL GAS NUCLEAR

Source: Frost & Sullivan / International Energy Agency

23

Example – Water Demand Forecasts in Coal Powered Plants by Regions

North America European Union Eastern Europe & CIS Rest of Asia

Latin America Middle East & Africa India China

2007 2020

Coal Fired Generation(TWh)

WaterDemandBillionGallons

33 108

2007 2020 2007 2020

304 358

20202007

537 1,023

20202007

2,685 4,524

16 54152 179 268 511 1342 2262

WaterDemand(BillionGallons)

Coal Fired Generation(TWh)

2,266 2,253

1133 1126

1,024 870

512 435

400 472

200 236

835

568417

1,136

2007 2007 2007 20072020 2020 2020 2020

Source : Frost & Sullivan / International Energy Agency

24

Illustration Source: BioMinE- Biotechnologies for Metal bearings materials in Europe, 2008, IC© Reactor Paques and Metcalf & Eddy, Wastewater Engineering: Treatment Disposal and Reuse, 1991

A B CD E F

1.UASB-based technologies

A. Upflow Anaerobic Sludge Blanket

(UASB) B. Expanded Granular Sludge

Bed (EGSB) C. Internal Circulation

reactor (IC©)GasGas

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

Gas

2. Continually Stirred Tank

Reactor (CSTR)/ Completely

Mixed Anaerobic Digestion

3. Other technologies (including new developments):

D. Anaerobic Filters (AF) or Packed Bed Reactors

(PBR) E. Anaerobic Hybrid Reactor (AHR)

F. Anaerobic Baffled Reactor (ABR)

Anaerobic Digester Technologies:

Energy Generation from Industrial Wastewater Treatment: Technology Segmentation (World), 2010

25

Energy Generation from Industrial Wastewater Treatment: Revenue Growth by Region (World), 2010 and 2016

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan

26

The Customer Perspective …. Energy Efficiency at Point of Use

27

Energy Efficiency and Buildings:Technology and Growth Roadmap

1980 20001990

Evolution of Building Technology Markets

2010 2020

SystemsIntegration

BuildingManagement& Control

BuildingAutomation

GreenBuildings

ITConvergenceFunctional

Controllers

HomeAutomation

Building Control

Building Automation

Smart Buildings

EnergyControl

Construction& OperationalEfficiency

Building Performance

IntegratedNetworking

EnergyManagement

EnhancedManagement

IntelligentBuildingsHVAC Control

IntelligentGreenBuildings

2011

SecurityConvergence

SmartTowns

Low EnergyLighting

Micro-Renewables

Micro-Generation

SmartGrids

How the movers & shakers are positioning themselves …


LED Lighting

28

Emergence of Micro-Renewables

1980 20001990


2010 2020

Building Control

Building Automation

Smart Buildings


1980 20001990 2010 2020

Emergence of Micro-

Renewables BIPV

Micro-Wind

Solar PV

SolarThermal

Biomass

Small-ScaleHydro


Fuel Cells

HeatPumps

MicroCHP

SystemsIntegration


BuildingAutomation

GreenBuildings


Controllers

HomeAutomation



EnergyManagement

EnhancedManagement



SecurityConvergence

SmartTowns

Low EnergyLighting

Micro-Renewables

Micro-Generation

SmartGrids

LED Lighting

29

CAGR(2008-2015)

Heat Pumps

Level of Direct Competition with Traditional HVAC

Technologies

0%

5%

10%

15%

20%

Note: Size of bubble indicates Market Size in 2008.

Solar Thermal

Biomass Boilers


BIPV

Micro-Generation v Renewable HeatingComparison of Growth Prospects

Micro-Renewables Market: Comparison of Major Market Segments (Europe), 2009

Renewable HeatingTechnologies

Micro-GenerationTechnologies

Micro-CHP

Micro-Wind

Small Hydro

30

Heat Pumps BiomassBIPVSolar Thermal Micro-CHP

Leading Players in Key Current Opportunity Areas

31

LED Lighting .... Transforming an Industry within 10 years

1980 20001990


2010 2020

Building Control

Building Automation

Smart Buildings


1980 20001990 2010 2020

3% Penetration of Global Lighting

Growth in Non-Lighting

Applications

Specialist Lighting

Applications

Mass Market Low Quality Applications


Automotive Lighting

SystemsIntegration


BuildingAutomation

GreenBuildings


Controllers

HomeAutomation



EnergyManagement

EnhancedManagement



SecurityConvergence

SmartTowns

Low EnergyLighting

Micro-Renewables

Micro-Generation

SmartGrids

LED Lighting

60% Penetration

of Global Lighting

32

LED set for explosive growth

0.0200.0400.0600.0800.0

1,000.01,200.01,400.01,600.01,800.02,000.0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Rev

enue

s ($

Mill

ion)

10.012.014.016.018.020.022.024.026.028.030.0

Rev

enue

Gro

wth

Rat

e(%

)

Revenues ($ Million) Revenue Growth Rate(%)

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan.

33

LED Market Drivers ......Perfect example of efficiency, performance & legislation

Energy Efficiency

Technical Development

CostCompeting

EELEconomic Growth

Residential

Commercial & Industrial

Retail & Hospitality

Street Lighting

Public Lighting

Architectural Lighting


34

Conclusions and Opportunity Discussion

35

Conclusions

1. Issues of water and energy are converging ….. Efficiency is emerging as

the most important value proposition

2. Smart technology is re-defining the market and becoming integral to

energy and water efficiency … ‘Smart’ Solutions have leapfrogged

‘Green’ Solutions?

3. Technology convergence leads to convergence of competition and re-

defined value chains .... Tomorrow’s competitors & partners will not be

the same as today’s

4. Most promising markets are those that can truly balance complex drivers

and provide real value and real RoI

36

Contact

Chiara CarellaCorporate Communications0044 (0) 207 3438314

[email protected]