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How fossil fuel companies transform in the “peak demand” scenario

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The ‘new energy transition’ refers to the evolution of the power and energy industry from top-down, one way value chain from generators to consumers to a customer-centric value matrix. This evolution is being triggered by the development of new technologies, particularly digital ones, and the new demands on the power and energy industry brought on by a number of factors including: decarburization, decentralizations, democratization and digitalization. In this session the panelists discussed some of the key trends causing this disruption, and how this is leading to new customer-centric business models provided by a variety of new players.

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How fossil fuel companies transform in the “peak demand” scenario

  1. 1. 2018 Global Energy Conference Concurrent Session II-A: The Energy Transition - How fossil fuel companies transform in the “peak demand” scenario Brought to you by the KPMG Global Energy Institute www.kpmgglobalenergyconference.com
  2. 2. 2© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 2© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Moderator and Panelists Moderator Vicky Parker Partner, Strategy KPMG U.K. Panelist Elizabeth Killinger EVP and President NRG Retail Panelist Frank Demaille Chief Executive Officer ENGIE North America Panelist Anne McEntee Chief Executive Officer, Digital and Services GE Renewable Energy
  3. 3. The Energy Transition: Implications for Oil and Gas companies
  4. 4. 4© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 The Energy Transition: a structural change in the overall energy system, which will ultimately touch every aspect of the value chain: how energy is produced, managed, and consumed An Energy Transition is underway, which is already reshaping the landscape that oil and gas companies face ―A small part of the total mix today, but expected to grow ―Does not need to replace oil & gas to create disruption to pricing and returns ―Already causing many oil and gas companies to reassess their strategies Global growth in energy consumption p.a. Global renewable energy capacity (GW) Global energy intensity (TOE/US$m) Cost of utility-scale solar power (US$/MwH) Sources: BP Energy Outlook, 2017; Ren21: ‘Renewables Global Status Reports’, 2014 (2012 data) and 2017 (2016 data) Lazard: ‘Levelized Cost of Energy 2017’ 2.2% 1.3% 1995–2015 2016–2035 -41% 1,440 2,017 2012 2016 +40% 126 84 2015 2035 -33% 125 50 2012 2017 -60%
  5. 5. 5© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Four Key Factors Shaping the Energy Transition DecentralizationDecarbonization Democratization Digitalization The Energy Transition
  6. 6. 6© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 6© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Polling instructions For Polling, go on your app and select the “Polling/Eval” icon. Select the session that you are in and the polling questions will appear.
  7. 7. 7© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 7© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Polling question #1 How important is the energy transition to your business? a) Not important b) Relatively important c) Neutral d) High importance
  8. 8. 8© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Polling question #1 – Polling Results
  9. 9. 9© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 9© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Polling question #2 How quickly will this affect your business? a) Immediately b) Within 1–3 years c) Within 3–5 years d) More than 5 years e) I don’t care how quickly this will affect
  10. 10. 10© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Polling question #2 - Results
  11. 11. 11© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 11© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Polling question #3 To what extent should oil and gas companies be leading the energy transition? a) We should be leading the transition b) We should be fast followers c) We should be participating d) We should be waiting and watching e) We should stay out
  12. 12. 12© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Polling question #3 - Results
  13. 13. 13© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 13© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 Question and Answer Moderator Vicky Parker Partner, Strategy KPMG U.K. Panelist Elizabeth Killinger EVP and President NRG Retail Panelist Frank Demaille Chief Executive Officer ENGIE North America @ENGIENorthAm Panelist Anne McEntee Chief Executive Officer, Digital and Services GE Renewable Energy @GErenewables
  14. 14. 14© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 14© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 2018 Global Energy Conference #KPMGGECCPE code: 6f95 CPE Check In – Session PIN code: 6f95 For CPE credit, go on your app and select the “CPE Check In” icon. Type in the session PIN code above and submit.
  15. 15. 2019 Global Energy Conference Save the date: June 5-6, 2019
  16. 16. © 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 773491 The KPMG name and logo are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. kpmg.com/socialmedia Thank you

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