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FLAME CONFERENCE 2016
DIETER HELM
11th MAY 2016
Professor of Energy Policy, University of Oxford
POST-COP21:
THE NEW ENERGY WORLD
AGENDA
• The European legacy
• The end of the commodity super cycle
• The carbon constraint
• New technologies
• The implications for the key countries
• What next for the companies?
THE EUROPEAN LEGACY
• The assumptions of the great post war experience
• Nuclear
• Coal
• Gas after 1990
• First generation renewables
• 2020-20-20 & the Internal Energy Market
3 PREDICTABLE SURPRISES
• The end of the commodity super cycle
• The carbon constraints
• New technologies
END OF THE COMMODITY SUPER CYCLE
BP OUTLOOK
OIL PRICE (BRENT CRUDE, 2014$/BBL)
Source: BP and Thomson Reuters
0
10
20
30
40
50
60
70
80
90
100
110
120
130
1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
2014$/bbl
$50
RECENT OIL PRICES
Source: Thomson Reuters
0
20
40
60
80
100
120
140
160
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Oil Brent…
• Kyoto and its failures
• Durban & Paris – the end of the road for
binding legal caps
• China, Us & India –very different energy
futures
THE CARBON CONSTRAINT
CARBON EMISSIONS
Source: US Department of Commerce, National Oceanic & Atmospheric Administration (NOAA), "Globally Averaged Marine Surface Annual
Mean Data", Trends in Atmospheric Carbon Dioxide, http://www.esrl.noaa.gov/gmd/ccgg/trends/global.html (accessed 5 May 2016).
350
355
360
365
370
375
380
385
390
395
400
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Atmospheric CO2 global mean (ppm)
NEW DIGITAL TECHNOLOGIES
• The future is digital – robots, AI, 3D printing
• Digital is electric
Therefore:
• Energy futures are increasingly electric
• Higher standards of security of supply
NEW ELECTRICITY TECHNOLOGIES
• Next gen solar
• Smart meters
• Smart grids
• Electric cars
• Storage and batteries
Next
Generation
Solar
Graphene
3D Printing
Robotics
Batteries
Electric
Cars
Large
Scale
Storage
Smart grids
Smart
Meters
Surprises
SUPPLY AND THE BROADBAND HUBS
The HUB
Deliveries
TV
Energy
Electric
Cars
Water
IMPLICATIONS FOR KEY COUNTRIES
US Middle East Russia
China Europe
I: IMPLICATIONS FOR THE COMPANIES
• Falling prices, marginal reserves and depletion policies
• The gradual strangulation from carbon constraints
• Transactional role for gas
• Coping with the new technologies – “beyond petroleum”
Oil and Gas companies
II: IMPLICATIONS FOR THE ELECTRIC
UTILITIES
The Old
Generation
Wholesale Markets
Supply
The New
Generation
Capacity Contracts
Multiple Supplier
Zero marginal cost
Peaks and flexible
generation
Car companies
Amazon, Google, Apple
Multiple Suppliers
Securitisation and
financial institutions
BOOKS
www.dieterhelm.co.uk
FOR INFORMATION
• Reforming the FiTs and capacity mechanisms, Paper 14, Sep 15
• The first 100 days of Conservative energy policy, Paper 13, Aug 15
• Penalty tariffs, open ended regulation and embedding overcharging. Paper 12, Jul 15
• British energy policy- what happens next? Paper 11, Jun 15
• Energy Policy and the Coalition, Paper 10 March 15
• What should oil companies do about climate change? Paper 9, Feb 15
• Competition in the British electricity sector: a set or practical measures, Paper 8, Feb 15
Energy Futures Network
Paper 18.
After Hinkley – how to
contract for the rest of the
nuclear programme
Dieter Helm
April 16
Energy Futures Network
Paper 15.
Stranded Assets – a
deceptively simple and
flawed idea,
Dieter Helm
Oct 15
Energy Futures Network
Paper 16.
The new normal – oil
prices after the crash
Dieter Helm
Feb 16
Energy Futures Network
Paper 17.
The CMA Energy Market
investigation: Companies
5-0 CMA?
Dieter Helm
Mar 16

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Flame 11.05.16

  • 1. FLAME CONFERENCE 2016 DIETER HELM 11th MAY 2016 Professor of Energy Policy, University of Oxford POST-COP21: THE NEW ENERGY WORLD
  • 2. AGENDA • The European legacy • The end of the commodity super cycle • The carbon constraint • New technologies • The implications for the key countries • What next for the companies?
  • 3. THE EUROPEAN LEGACY • The assumptions of the great post war experience • Nuclear • Coal • Gas after 1990 • First generation renewables • 2020-20-20 & the Internal Energy Market
  • 4. 3 PREDICTABLE SURPRISES • The end of the commodity super cycle • The carbon constraints • New technologies
  • 5. END OF THE COMMODITY SUPER CYCLE BP OUTLOOK OIL PRICE (BRENT CRUDE, 2014$/BBL) Source: BP and Thomson Reuters 0 10 20 30 40 50 60 70 80 90 100 110 120 130 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2014$/bbl $50
  • 6. RECENT OIL PRICES Source: Thomson Reuters 0 20 40 60 80 100 120 140 160 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Oil Brent…
  • 7. • Kyoto and its failures • Durban & Paris – the end of the road for binding legal caps • China, Us & India –very different energy futures THE CARBON CONSTRAINT
  • 8. CARBON EMISSIONS Source: US Department of Commerce, National Oceanic & Atmospheric Administration (NOAA), "Globally Averaged Marine Surface Annual Mean Data", Trends in Atmospheric Carbon Dioxide, http://www.esrl.noaa.gov/gmd/ccgg/trends/global.html (accessed 5 May 2016). 350 355 360 365 370 375 380 385 390 395 400 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Atmospheric CO2 global mean (ppm)
  • 9. NEW DIGITAL TECHNOLOGIES • The future is digital – robots, AI, 3D printing • Digital is electric Therefore: • Energy futures are increasingly electric • Higher standards of security of supply
  • 10. NEW ELECTRICITY TECHNOLOGIES • Next gen solar • Smart meters • Smart grids • Electric cars • Storage and batteries Next Generation Solar Graphene 3D Printing Robotics Batteries Electric Cars Large Scale Storage Smart grids Smart Meters Surprises
  • 11. SUPPLY AND THE BROADBAND HUBS The HUB Deliveries TV Energy Electric Cars Water
  • 12. IMPLICATIONS FOR KEY COUNTRIES US Middle East Russia China Europe
  • 13. I: IMPLICATIONS FOR THE COMPANIES • Falling prices, marginal reserves and depletion policies • The gradual strangulation from carbon constraints • Transactional role for gas • Coping with the new technologies – “beyond petroleum” Oil and Gas companies
  • 14. II: IMPLICATIONS FOR THE ELECTRIC UTILITIES The Old Generation Wholesale Markets Supply The New Generation Capacity Contracts Multiple Supplier Zero marginal cost Peaks and flexible generation Car companies Amazon, Google, Apple Multiple Suppliers Securitisation and financial institutions
  • 16. FOR INFORMATION • Reforming the FiTs and capacity mechanisms, Paper 14, Sep 15 • The first 100 days of Conservative energy policy, Paper 13, Aug 15 • Penalty tariffs, open ended regulation and embedding overcharging. Paper 12, Jul 15 • British energy policy- what happens next? Paper 11, Jun 15 • Energy Policy and the Coalition, Paper 10 March 15 • What should oil companies do about climate change? Paper 9, Feb 15 • Competition in the British electricity sector: a set or practical measures, Paper 8, Feb 15 Energy Futures Network Paper 18. After Hinkley – how to contract for the rest of the nuclear programme Dieter Helm April 16 Energy Futures Network Paper 15. Stranded Assets – a deceptively simple and flawed idea, Dieter Helm Oct 15 Energy Futures Network Paper 16. The new normal – oil prices after the crash Dieter Helm Feb 16 Energy Futures Network Paper 17. The CMA Energy Market investigation: Companies 5-0 CMA? Dieter Helm Mar 16