Executive summary for "Look Back in Anger" report

R E T H I N K
T E C H N O L O G Y
R E S E A R C H
https://rethinkresearch.biz
Companies mentioned in this report: Android, Amazon, Apple, Bloomberg,
BP, BYD, Canadian Natural Resources, Cemex, Chevron, China National
Offshore Oil Corp, China Petrochemical Corp, China Petroleum & Chemical
Corp, ConocoPhillips, DHL, DPD, Duke, Ericsson, ExxonMobil, FedEx,
Ford, General Motors, Google, GWEC, IEA, Imperial Oil, Jaguar Land-
Rover, Mercedes, NIO, Netflix, PSEG, Qualcomm, R&D, Rivian, Rolls
Royce, Royal Dutch Shell, Scania, SEIA, Shell Energy North America,
Sony, S&P Global, Spotify, Suncor, Tesla, Total, Uber, UPS, Volkswagen,
Wood Mackenzie, Xcel Energy
Lead analyst: Peter White
Look Back in Anger
IT’S 2050 AND THE WORLD IS CLOSE TO ZERO EMISSIONS
HOW DID WE DO IT?
“ R e t h i n k h a s a c o m m i t m e n t t o
f o r e c a s t i n g m a r k e t s t h a t o t h e r s s h y
a w a y f r o m – t h o s e o n t h e v e r g e o f
r a d i c a l t r a n s f o r m a t i o n ”

Copyright © 2021 Rethink Research, All rights reserved.
2
CONTENTS
Page
Contents 2
Graphs and Tables 4
Look Back in Anger 5
How to Look Back in Anger 6
Stock Markets 7
Energy Trade 8
Bankruptcies 8
Transition in a Nutshell 9
Electric Vehicle revolution 10
How do solar and wind progress to 2015 11
How do you wind down the oil industry? 13
Any old cars 14
Will electricity be any cheaper? 15
The Distributed Energy Revolution 17
The world “Sans gas” 19
But still they were angry 20
Fake News 21
How Change Works 23
What about 100 year-olds? 23
The forecasts so far are rubbish 25
To forecast change you practice on industries that actually change 29
The great PC crash of 2000 30
Investor pressure 32
The Myth of Primary Energy 34
Electricity Growth 36
A bursting grid 37
The Global view 38
Emissions from electricity 38
Natural Gas For Electricity generation 39
Steel Making 40
Cement Making 41
Coal Usage 42
Land Transport 43
I want one, I can afford one and I know someone who has one 45

3
Keeping ICE all together 46
The top end goes hydrogen first 47
Hydro Generation 48
Nuclear Power 49
Total Global Generation 50
Leading country energy profiles 51
China 51
Home Heat 51
EV uptake 52
Steel and Cement 52
USA 54
Home Heat 54
EV uptake 55
Steel and Cement 55
India 56
Home Heat 56
EV uptake 57
Steel and Cement 58
Germany 58
Home Heat 59
EV uptake 59
Steel and Cement 60
Japan 60
Home Heat 61
EV uptake 61
Steel and Cement 62
South Korea 62
Home Heat 63
EV uptake 63
Steel and Cement 64
Significant Others 64
Conclusion 65
Methodology 69
Contacts 71
About Rethink Technology Research 72

4
GRAPHS AND TABLES
Page
Growing profit margins of Utilities 16
PC forecast vs actual sales from 1998 to 2002 30
Land Transport in Transition to 2050 by number of vehicles 33
China total electricity output by fuels 2020 34
China total electricity output by fuels and extras 2050 35
China total electricity output by fuels and extras 2050 35
Non-CO2 electricity generation growth by major countries to 2050 39
Global Natural Gas Electricity Generation 39
Amount of electricity needed for steelmaking, growth to 2050 40
Amount of electricity needed for cement making, growth to 2050 42
Global Coal electricity generation to 2050 42
Land Transport in Transition to 2050 by CO2 emissions 43
EV sales by units by country to 2050 44
Land Transport - EV annual shipments and cumulative totals to 2050 45
Global Hydro Electric power planned to 2050 48
Global electricity generation from nuclear power to 2050 49
Global Total Electricity Demand 2050 - absorbing transport, steel, cement and home heat 50
Chinese electricity usage by source to 2050 in GWh 51
EV growth in China to 2050 52
Electricity expected to be used in steelmaking in China in GWh 53
USA electricity usage by source to 2050 in GWh 54
EV growth in USA to 2050 55
Indian electricity usage by source to 2050 in GWh 56
Germany electricity usage by source to 2050 in GWh 58
Japanese electricity usage by source to 2050 in GWh 60
South Korea electricity usage by source to 2050 in GWh 63
Other majors - Extra electricity to decarbonize in percentage terms 64

5
Look Back in Anger is about imagining that it’s 2050, and that we have,
more or less, achieved net zero emissions.
So, what would it look like?
To find out you need a confident forecast of just what steps it took to
achieve it, and from there it seems to us it is possible to put some detail
on the bare bones of what it must have taken to get there.
The title of this paper belongs to a famous play written in 1956, reflect-
ing the anger of a working class intellectual in a class war he felt he
could not win. It is where the expression “Angry young men” came
from. Today it is perhaps schoolchildren like Greta Thunberg and
young eco-warriors, who are angry with the climate war. Perhaps the
men and woman who have taken it upon themselves to make this revo-
lution happen – mostly engineers working at utilities, renewable devel-
opers and vendors - and perhaps when they look back, they too may
end up feeling a little angry, that this transition was made so hard for
them, when it could have been so easy, so predictable.
By the time we reach 2050, will anger remain the abiding memory of
the energy transition? Climate change deniers today tend to be over 60
– in 2050 those same people will be over 90, as will most investors who
remember investing in coal, and the young who are today calling for a
climate emergency will be close to 50, perhaps ready to recount their
life stories – “What did you do in the climate war Daddy?”
Even reactionary politicians today, who simply could not imagine aid-
ing the death of the internal combustion engine or ridding the world of
coal jobs or supporting energy subsidies for solar, will have grown
used to the new energy economy. And as renewables prices continue to
fall – possibly by 80% in solar and wind once again, as they have in the
past 10 years – then surely all resistance to renewables must evaporate
by 2030. By 2050 they are facts of life.
People will be very used to the idea of decarbonizing. It has almost be-
come second nature to some already. It will be taught in schools all
Look Back in Anger

6
over the world, climate change denying will be impossible to maintain,
and those who remember it will be far older, and eventually forgotten.
But there will remain a seething resentment that all this was really easy
to get done – decarbonizing, once we started to get on and do it. It was
much simpler in the final days, than it has been in than the early days,
when everything was against an energy transition ever happening and
no-one knew why or quite who the enemy was.
As we look back at decarbonization in 2050 we find that Elon Musk is
79 years old, someone who refused to sit on the sidelines, and who
turned the idea of the energy transition into a fortune. By now there are
over 100 Elon Musk style billionaires, neatly arranged on every conti-
nent and in every sector of the energy space. They all got it right.
By using Rethink Energy’s 30 year model, we can see that looking back
it was all pretty obvious, all we needed to do was to give some talented
engineers the cash to go and solve problems, but we also had to be sure
they solved the right problems. Not geo-engineering or CCUS, or Di-
rect Air Capture, which are battling to provide life-support against the
terminal decay of fossil fuels.
To have an inkling how it happened, you must first have a good stab at
just how these things could have come about, and that’s what this pa-
per is all about. Perspective is a wonderful thing, and if you have to ask
yourself how China will manage to multiply its nuclear capacity six-
fold within this forecast - the answer will be that centralized govern-
ance can control spending, safety and prices; today China has already
has 32 nuclear power stations in planning. But ask the same question
about how it can possibly reach over 16 times the renewables that it has
installed today by 2050, and the truth is that at the rate at which wind
and solar declined in price over the past decade, it meant that there
was barely an increase total annual in spend from 2020.
In the next 20 years, solar will fall to around 20% of its price today;
wind perhaps to 40% of its current price. So a 16-fold growth in renew-
How to Look Back in Anger

7
ables will require just 3.75 times the spend on renewables that was spent
in 2020. For wind the sum is a little more, but then again its output is also
much more predictable.
To pay for this, China will be able to harness substantially larger revenues
each year, from selling so much more electricity, and at much the same
price as it always has. In the attached graphic “Transition in a nutshell”
we can see that today the largest energy utility is worth $86 billion – but at
the current rate of growth and the same multiple, by 2050 some of these
companies will be delivering so much more energy, and at such a high
margin, they will be worth $3.2 trillion. At least one of these will be in Chi-
na.
We must always remember that someone ended up owning all this gener-
ational capacity. And because the price of electricity will not have fallen so
very much for the consumer, many utility companies around the world
will have increased in size by at least 10-fold, some 20-fold. Their value
will have increased by closer to 40 times, depending on market controls
and how much the central government regulates electricity pricing. But
once prices start to fall, regulation may no longer be appropriate to protect
consumers. Falling electricity prices have not been seen for 100 years.
For this report we simply looked up the amount of energy each country
used, and looked at its current rate of change and intelligently projected it
to 2050, taking into account where it was visible, any long term saturation
to the density of electricity used per person. We considered if further in-
dustrialization was likely and set a growth rate for general purpose elec-
tricity usage via the grid.
We forecast each country based on what governments have promised the
IPCC in terms of renewables and emissions, except where we felt those
numbers are not geopolitically possible, and decided what would be the
remaining energy sources on a least cost basis, and based upon existing
governmental and industrial preferences. This way we could track the de-
clines of gas and coal, and the relative frozen level of nuclear and hydro in
the mix, leaving much of the responsibility for growth on renewables.
Methodology

8
We then forecast the transition of each of home heat, electric vehicles, steel
making and cement making based on the size of these markets now and to
2050 in each country, and tried to work out the size of the additional elec-
tricity resources this would require. In many ways that is the point of this
report, to put some form of upper limit on the ambition of these transitions.
We began initially focusing on 44 of the major electricity using countries,
but in the end reduced this to the largest 21 and treated the remaining mar-
kets as additional, and included them only in summing up global numbers.
The 21 countries represent 85% of electricity usage in the world.
In some sense this is about creating a model that shows the level of ambition
for governments and the renewables industry, and its investors and sets an
anticipated “pace” that ambition can be measured against.
We have not tried to quantify air and ship travel, or CO2 reduction from
changed farming techniques or tree planting, and in particular we have not
assumed any freeing up on existing electricity supplies due to energy effi-
ciency, although these will certainly be considerable, where they occur.
We understand that what we have done is an over-simplification of a very
difficult task, building a global energy model, that almost anyone can afford
to buy, but more than anything it is a refutation of all “primary” energy cal-
culations used by fossil fuel companies, and it provides a way of putting
every problem into the universal language of electricity generation.
Throughout this report we have assumed that almost ALL industrial
“extra” were provided through hydrogen, certainly in cement manufacture,
but also in other metals and some in steel production. But we have only fo-
cused on the electricity to make the hydrogen, so have no forecast the num-
ber of electrolysis GW that are installed, which we shall leave to other re-
ports.
Also throughout this report we assumed that the renewables mix, which to-
day is roughly one third wind, one third solar and one third other, has come
to rely more on Wind and solar, with an aggressive growth curve for geo-
thermal, as a partner technology. Naturally this has necessitated an enor-
mous amount of stationary battery to support wind and solar.

9
Who should buy this report?
Everybody who has anything to do with the creations of electricity,
who’s fate is currently tied up with the future of the oil and gas indus-
tries, every investor in any kind of energy and every venture capitalist
that does not want to miss out on the coming energy transition, needs
to read this report.
We would encourage all utilities at C suite executive levels to read it
too, and their strategic planning team, energy regulators, renewables
vendors and government departments – to also read this report
It is why we have made it extra affordable:
For $2,300 (for 1 to 5 people), we will give you access to every report,
webinar and podcast we produce in the next 12 months, as well as
from the last 12. We will also throw in an annual subscription to our
Weekly Analysis. That same is true at $3,800 for a corporate license,
for any number of subscribers above 5.

10
Rethink Energy: Taking a different view of the
energy transition
Rethink Energy is our energy service, made up of our Weekly Analysis
($595 on its own) and a series of “breakthrough” forecasts which show
the true rate at which the Energy Transition is happening.
So far mostly US based research groups pick away at renewables, energy
storage and hydrogen as if they are “nice to have” which can co-exist
with oil, gas and coal – they cannot. These research firms are overly influ-
enced by fossil fuel thinking. Rethink Energy is the only forecaster that
can see quite clearly how the energy markets are like a circle of dominoes
– push one and they all fall over. It is very different forecasting a market
that is on the edge of a precipice, compared to one which is on a flat
hilltop.
This year we have issued reports on how gas assets will inevitably be-
come stranded; a forecast on how the US acceleration in energy storage
will trigger a global uptake of the technology; how multiple “Tesla” style
visionary businesses will dominate post transition stock markets; a fore-
cast for global offshore wind, and two tracking statements of where we
are in Wind and Solar global installations. In all of these cases, we see the
energy transition accelerating, not stalling. We see fossil fuels on death
row.
Our latest report is entitled, “Look Back in Anger”. Buy it here.
Previous forecasts include;
• Perovskites poised to disrupt solar supply chains everywhere
• Wind accelerates past nuclear, hydro in post Covid power markets
• What a difference a day makes; Biden win triggers solar acceleration
• Europe goes all in on hydrogen for the transport economy
• Energy through the looking glass | What stock markets look like on
the other side of the energy transition
• USA flying start triggers rush for Energy Storage leadership

11
RETHINK LEADERSHIP
RETHINK ENERGY’S MAIN CONTRIBUTORS
Peter White - Principal Analyst
peter@rethinkresearch.biz
+44 (0)7734 - 037414
Harry Morgan - Analyst
harry@rethinkresearch.biz
+44 (0)117 329 1480
Andries Wantanaar - Author
andries@rethinkresearch.biz
Peter White - CEO and Co-founder
peter@rethinkresearch.biz
+44 (0)117 925 7019
Caroline Gabriel - Research Director
caroline@rethinkresearch.biz
+44 (0)207 450 1230
www.rethinkresearch.biz

12
Rethink is a thought leader in quadruple play, renewable energy, and 5G
wireless. It offers consulting, advisory services, research papers, webi-
nars, plus three weekly research services; Wireless Watch, a major influ-
ence among wireless operators and equipment makers; Faultline, which
tracks disruption in the video ecosystem, and OTT video, Rethink Ener-
gy, which monitors investment opportunities in the changing energy
landscape.
About Rethink Technology Research
Need more information?
Natalia Szczepanek (Marketing and Client Relations Manager)
natalia@rethinkresearch.biz
+44 (0)117 925 7019

13
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United Kingdom
Tel. +44 (0) 1173 291480
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www.rethinkresearch.biz
Published March 2021

Executive summary for "Look Back in Anger" report

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