Energy & Mobility TransitionsREVision2019

Miho Kurosaki

March 6, 2019

1 March 6, 2019

New York

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Sharing global and local knowledge

2 March 6, 2019

Sustainable materials

& circular economy

Solar Wind Storage Decentralized

energy

Frontier power Heat Impact on

power & utilities

IoT technologies

& platformsAdvanced analytics

& automation

Digital business

model evolutionDigitialization of

energy, industry

& supply chains

Electrified

transportMobility

services

Connected &

autonomous

vehicles

Impact on

transport

Impact on

oil & power

Carbon Power markets Oil & products

Gas & LNG Chemicals Metals

3D printing &

green manufacturing

Composites, bioplastics

& new materials

Impact on industrials,

utilities & manufacturing

Policy

Economics

& forecasts

Sustainability

Innovation

& tech

Finance

Strategies for a cleaner future

3 March 6, 2019

Contents

Twin transitions 4

Sector coupling 15

Distracted boyfriend 19

4 March 6, 2019

Twin transitions

Edison Ford

5 March 6, 2019

Source: BloombergNEF, EV includes BEVs and PHEVs. Some December 2018 data is estimated. Europe figure covers 16 main European vehicle

markets

Global EV sales EV sales penetration by country

EV adoption is ramping fast

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016 2017 2018

China Europe North America Japan Korea

EV share of new car sales

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016 2017 2018

China Europe North America Japan Korea

EV share of new car sales

447,000

716,000

1,086,000

1,979,000

2015 2016 2017 2018

Twin transitions

6 March 6, 2019

-

200

400

600

800

1,000

1,200

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Cumulative GW

Small-scale PV

Utility-scale PV

Offshorewind

Onshorewind

Source: Bloomberg NEF.

Wind and solar are at terawatt scale, storage is acceleratingGlobal wind and solar installations Global energy storage installations

0

1

2

3

4

5

6

7

8

9

10

2010 2011 2012 2013 2014 2015 2016 2017 2018

Cumulative GW

EMEA

AMER

APAC

Twin transitions

7 March 6, 2019

Source: BloombergNEF. Note: decentralization ratio is small-scale PV, storage, and demand response capacity divided by total system capacity

Decentralization ratio Annualized planned utility digitalization

capex

Power is decentralizing and digitalizing

0%

2%

4%

6%

8%

10%

12%

14%

16%

2012 2013 2014 2015 2016 2017 2018

Germany

Italy

Australia

OtherEuropeUnitedKingdomFrance

Japan

UnitedStatesSouthKorea

2.12

1.15

0.40

0.21

0.16

0.09

Enel

Iberdrola

Engie

Duke

Ameren

Exelon

Billion dollars

Europe

U.S.

Twin transitions

8 March 6, 2019

Source: BloombergNEF, EIA, EPA

U.S. power generation mix U.S. greenhouse gas emissions by sector

Progress on decarbonization

0

500

1,000

1,500

2,000

2,500

1990 '95 2000 '05 '10 '15 '18

MtCO2e

0%

20%

40%

60%

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

Natural gas

Coal

NuclearRenewables

Oil

Transport

Power

Industry

Buildings

Other (incl.

agriculture)

Twin transitions

9 March 6, 2019

Note: Italicized figures are our estimates and interpretations of EU regulations and UK carbon budget. *EU legislation calls for 32% renewable energy

by 2030, of which power sector is expected to make a bigger contribution of around 55%.

Selected government targets: Electric vehicles Renewable power

California 5m (~33%) on the road by 2030 60% by 2030

100% clean power by 2045

Europe 30-50% of sales by 2030 55% by 2030*

Sweden Ban ICE sales by 2030 100% by 2040

UK Ban ICE sales by 2040 ~50% by 2030

Spain (proposed) Ban ICE sales by 2040 70% by 2030, 100% by 2050

China 7m (~20%) sales by 2025 35% by 2030

Twin transitions supported by policy and regulation

Twin transitions

10 March 6, 2019

0

200

400

600

800

1,000

1,200

2010

2011

2012

2013

2014

2015

2016

2017

2018

$/kWh

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

euro / W

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

$/W

Solar PV module prices Onshore wind turbine prices Lithium-ion battery prices

Transitions driven by technology

-94% since

2008

-37% since

2008

Source: BloombergNEF.

-85% since

2010

Twin transitions

11 March 6, 2019

Solar costs vs. coal & gas Wind costs vs. coal & gas EV purchase price vs. ICE

Transitions characterized by tipping points

Utility PV0

25

50

75

100

125

150

2018 2030 2040 2050

$/MWh (2017 real)

Coal

CCGTOffshore wind

Onshore wind0

25

50

75

100

125

150

2018 2030 2040 2050

$/MWh (2017 real)

CCGT

Coal

Note: Levelized cost of electricity (solar, wind, gas, coal) calculations are for utility-scale assets in the U.S. and exclude incentives such as the ITC

and the PTC. Utility PV assumes tracking. EV price is for a medium segment vehicle in the U.S

0

10

20

30

40

2018 2022 2026 2030

Vehicle PowertrainBattery ICE

EV and ICE price in $ thousand

Twin transitions

12 March 6, 2019

Source: Michael Felton, NY tImes, https://www.census.gov/history/pdf/sipp-data-appliances.pdf

Past transitions

Selected technologies’ penetration of U.S. households

Twin transitions

13 March 6, 2019

Note: BloombergNEF

But twins can develop at different paces…

Renewable

power (18%)

Electric vehicles

(0.5%)

Rooftop

solar (~2%)

Ride-hailing apps

(30-40%)

Highly

autonomous

vehicles (~0%)

Natural gas

power (35%)

Connected

cars (~15%)

Current penetration of selected technologies, U.S.

Mobility transition

Energy transition

Twin transitions

14 March 6, 2019

Source: BNEF. Note: figures are for capacity, not production. Latest data 2019 for batteries, 2017 for wind.

…and industrial strategy may not play out the same

Geographical distribution of manufacturing capacity

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

c-Si PV modules Wind turbine nacelles Battery cells

Rest of World

North America

Europe

Other Asia

China

Twin transitions

15 March 6, 2019

Sector coupling

Image from theloop.ca

16 March 6, 2019

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2020 2025 2030 2035 2040

World United States Europe China

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2020 2025 2030 2035 2040

World United States Europe China

Source: BloombergNEF 2018 New Energy Outlook Source: BloombergNEF 2018 EV Outlook

Electric vehicle outlook New energy outlook

BNEF’s outlook: half and half by 2040

EV share of passenger vehicle sales Renewable share of total generation

Sector coupling

17 March 6, 2019

Source: BloombergNEF

EV operating emissions

0

50

100

150

200

250

300

2015 2020 2025 2030 2035 2040

gCO2/mile

U.K.

Germany

France

U.S.

China

Japan

Average ICE

EV emissions by

country:

Sector coupling

18 March 6, 2019

Source: BloombergNEFSource: BloombergNEF

Chargepoints deployed, 2012-18 Largest type of chargepoint operators by

region, 2018

Public charging infrastructure

76.9100.9

135.7

193.3

371.3

534.8

616.9

2012 2013 2014 2015 2016 2017 2018

Thousands

62% 79% 53%

38%

21%

47%

U.S. Europe China

Pure-play operators

Others

Oil & Gas / Utilities

Equipment Manufacturers

300,000 61,000 168,000

Others

Others

Sector coupling

19 March 6, 2019

Distracted boyfriend

Automotive

industry

Power sector

Oil & gas

20 March 6, 2019

Source: BloombergNEF, company reports and presentations.

Electricity activities of selected oil majors Europe U.S.

Gen

era

tio

n a

nd

trad

ing

Gas power plants

Power trading(Danske

Commodities)

Renewable energy (Multiple)(Lightsource,

others)

(Silicon Ranch

Corp)(Apodi project)

Reducing

emphasis

Grid-connected

storage(Saft)

Tesla

partnership(Planned)

Resid

en

tial

an

d n

du

str

ial

reta

il

Electricity sales(Lampiris,

Direct Energie)(Planned) (First Utility)

On-site generation

(e.g., rooftop PV) (Lightsource)

Other services (eg,

demand response)

(GreenFlex,

Direct Energie)(Ubiworx)

VC,

partnerships

Ele

ctr

ic

veh

icle

s Public charging

infrastructure

(G2mobility,

PitPoint)

(Charge-

master)(NewMotion)

VC

(Chargepoint)

Partnership

(Ionity)

VC

(Chargepoint)

AVs or car sharingVC

(Drover)

VC

(FarePilot)

Distracted boyfriend

21 March 6, 2019

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