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Kingsmill Bond - Myths of The Energy Transition, COP24 Poland

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Presentation delivered by Carbon Tracker's Kingsmill Bond and Rachel Carr at COP24 Katowice, 06 Dec 2018

Link to Carbon Tracker Myths of the Energy Transition series by Kingsmill Bond: https://www.carbontracker.org/myths-of-the-transition-renewables-are-too-small/

Link to event livestream: https://unfccc-cop24.streamworld.de/webcast/action-hub-morning-session-5th-december (from 59mins)

Published in: Economy & Finance
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Kingsmill Bond - Myths of The Energy Transition, COP24 Poland

  1. 1. Kingsmill Bond, CFA Carbon Tracker Initiative December, 2018 kbond@carbontracker.org Myths of the energy transition. Don’t lie in ignorance Presentation at COP 24, Katowice
  2. 2. 2 Index • A. What is going on: technology disruption • B. The myths. • C. The counter • 1. Too small to matter • Too slow to matter • 2. Incumbent forecasts. • 3. Too expensive. • 4. Intermittent. • Hard-to-solve • 4. Help the poor. • Emerging market demand growth • D. Reality: stranded assets; stranded lives; stranded thinking.
  3. 3. 3 What is the energy transition
  4. 4. 4 The key driver - technology-driven disruption
  5. 5. 5 S curves of growth
  6. 6. 6 This is how S curves work
  7. 7. 7 Peaking demand for fossil fuels in the 2020s
  8. 8. 8 Dramatic financial market impact GE share price
  9. 9. 9 The myths…
  10. 10. 10
  11. 11. 11 The Myths: Too small to matter - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 2000 2002 2004 2006 2008 2010 2012 2014 Thermal Nuclear, hydro, biomass Solar and wind European electricity supply TWh Source: BP
  12. 12. 12 European electricity sector write-downs
  13. 13. 13 Too slow to matter Global coal demand mtoe Source: BP
  14. 14. 14 Peabody share price Peabody share price $ Source: Bloomberg
  15. 15. 15 The peak comes before the fall 0 1 2 3 4 5 6 1890 1900 1910 1920 Horse Car Horses and cars in US transport (m) Source: Geels
  16. 16. 16 Infrastructure is not sufficient protection
  17. 17. 17
  18. 18. 18 Myth 2: Incumbents are right
  19. 19. 19 The latest forecast Source: IEA, BP Annual solar additions (GW)
  20. 20. 20 Costs - hope and reality US LCOE $/ MWh Source: IEA WEO 2018, BNEF 2018
  21. 21. 21 This is no rounding error Change in electricity supply (TWh) Source: BP
  22. 22. 22 Renewables are too expensive!!
  23. 23. 23
  24. 24. 24 Myth 3: Too expensive US LCOE 2018 $/ MWh Source: Lazard
  25. 25. 25 The second inflection point Source: Carbon Tracker Share of global coal fleet where new renewables are cheaper than coal operating costs China Europe
  26. 26. 26 Costs over time Source: Our World in data, BNEF, Carbon Tracker Electricity costs $/ MWh Lots of subsidy Renewables start to compete Game over
  27. 27. 27 India LCOE India LCOE 2018 Source: BNEF
  28. 28. 28
  29. 29. 29 Myth 4: Intermittency Source: IEA, Carbon Tracker annotation The phases of Transition
  30. 30. 30 What has been done 0% 10% 20% 30% 40% 50% 60% Denmark Portugal Ireland Spain Germany Lithuania Greece UK Italy Romania Solar Wind Share of electricity from solar and wind 2017 Source: BP
  31. 31. 31 The rest of the world has a long way to catch up Share of electricity from solar and wind 2017 Source: BP
  32. 32. 32 Hard-to-solve sectors: not that big Share of total primary energy demand 2017 Source: IEA
  33. 33. 33 Fitting into the endgame The last 20%
  34. 34. 34 There are prospective solutions Mission Possible 2050 energy mix in hard-to-solve sectors Source: Energy Transitions Commission
  35. 35. 35 The world is electrifying Share of primary energy used by electricity sector Source: BP
  36. 36. 36
  37. 37. 37 Myth 5: Help the poor Source: Carbon Tracker Share of global coal fleet where new renewables are cheaper than new coal Vietnam Philippines Ukraine
  38. 38. 38 Pollution Source: World Health Organisation Global air quality
  39. 39. 39 The emerging market energy leapfrog Solar capacity GW EV sales 000 Source: BP Source: BP
  40. 40. 40 Emerging market demand Share of capacity additions in emerging markets Source: BNEF
  41. 41. The real driver of resistance: Stranded assets 41
  42. 42. 42 The merchants of doubt
  43. 43. 43 Carbon Tracker The myth series • Too small to matter. October 2018 • Intermittency. November 2018 • Hard-to-solve. December 2018 • High costs. January 2019
  44. 44. 44 Now over to you • Which of these have you encountered most frequently? • Are there any other myths you’ve encountered? • Do you still see any of these as a genuine obstacle? • Are you a merchant of doubt?!
  45. 45. 45 Appendix: There are not enough minerals Source: Amory Lovins
  46. 46. 46 Fossil fuel jobs Source: Engie Location of energy sources
  47. 47. 47 Peak fossil fuel demand in the 2020s
  48. 48. 48 Electricity is small Global incremental energy demand EJ Source: BP, Carbon Tracker estimates
  49. 49. 49 No transition in electricity Share of global electricity supply from coal
  50. 50. 50 Energy is fungible
  51. 51. 51 Where does the money go
  52. 52. 52 Market risk
  53. 53. 53 Global coal profitability
  54. 54. For more information please visit: www.carbontracker.org @CarbonBubble If you are interested in knowing more, please get in touch: kbond@carbontracker.org

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