Christophe Brognaux
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Christophe Brognaux
JULY 2020
Naturgy Foundation – IESE Seminar
Energy Prospectives
JULY 2020
Naturgy Foundation – IESE Seminar
Energy Prospectives
Already >1°C of warming, and rapidly approaching 1.5-2°C range
300
800 0 600 200 400 1000 1200 1400 1600 2200 1800 0
250
400
450
2000
Source: NASA’s Goddard Institute for Space Studies
2.0°C range: ~450 ppm
1.5°C range: ~430 ppm
Yesterday: 416 ppm
2018: 408 ppm
2017: 405 ppm
2000: 370 ppm
CO2 concentration in the atmosphere (ppm)
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Already >1°C of warming, and rapidly approaching 1.5-2°C range
300
800 0 600 200 400 1000 1200 1400 1600 2200 1800 0
250
400
450
2000
Source: NASA’s Goddard Institute for Space Studies
2.0°C range: ~450 ppm
1.5°C range: ~430 ppm
Yesterday: 416 ppm
2018: 408 ppm
2017: 405 ppm
2000: 370 ppm
CO2 concentration in the atmosphere (ppm)
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The largest emission drop since WWII
1950 1930 1940
GreatDepression
–13%
World War II–7%
Firstoil crisis
0%
Financialcrisis–1%
COVID-19–5 to 10%
Secondoil crisis
–4%
USSRcollapse
–2%
Oilcrisis–1%
Asiancrisis / .com
bubble1%
Global annual CO2 emissions (billion tons CO2e)
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1950 1930 1940
Businessas usual
GreatDepression
–13%
World War II–7%
Firstoil crisis
0%
USSRcollapse
–2%
Financialcrisis–1%
COVID-19–5 to 10%
Secondoil crisis
–4%
Oilcrisis–1%
Asiancrisis / .com
bubble1%
Parispledges
1.5°Cpath
2.0°path
Global annual CO2 emissions (billion tons CO2e)
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Past crises have merely slowed down GHGprogression by up to 5 years - So what next?
1950 1930 1940
Businessas usual
GreatDepression
–13%
World War II–7%
Firstoil crisis
0%
USSRcollapse
–2%
Financialcrisis–1%
COVID-19–5 to 10%
Secondoil crisis
–4%
Oilcrisis–1%
Asiancrisis / .com
bubble1%
Parispledges
1.5°Cpath
2.0°path
Global annual CO2 emissions (billion tons CO2e)
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Past crises have merely slowed down GHGprogression by up to 5 years - So what next? No silver bullet !
2°C path
Currenttrajectory
2040
Gap
2015
Globalemissions
Power
Buildings
Industry
Transport
Note: excluding agriculture and LULUCF Co
pyri
ght
© 2
020
by T
he B
osto
n Co
nsul
ting
Gro
up,
Inc.
All
righ
ts r
eser
ved.
No silver bullet !
2°C path
Currenttrajectory
2015 2040
Gap
Globalemissions
Note: excluding agriculture and LULUCF Co
pyri
ght
© 2
020
by T
he B
osto
n Co
nsul
ting
Gro
up,
Inc.
All
righ
ts r
eser
ved.
No silver bullet !
2°C path
Currenttrajectory
2015 2040
Gap
Globalemissions
Note: excluding agriculture and LULUCF Co
pyri
ght
© 2
020
by T
he B
osto
n Co
nsul
ting
Gro
up,
Inc.
All
righ
ts r
eser
ved.
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erve
d.
Reasons forhope
Technology
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d.
- Bill Gates -
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten
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- Bill Gates -
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten
Cost reductions over the last decade
-40% -75% -80% -70% -95%
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Solutions exist for a large part of the problem
Power Industry AgricultureLanduse
Lighttransport
Heavytransport Buildings
Wind BiomassSolar Electric
Storage
Energyefficiency
Energyefficiency
Efficientfertilization /
land use
Engine efficiencyHeat pumps
District heating
Fuelsubstitution
Hydrogen/ synthetic
fuel CCSCCU Bio-algae
Hydrogen/ synthetic fuelMethane
pills
H2 H2
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ghts
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erve
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Solutions exist for a large part of the problem
Power Industry AgricultureLanduse
Lighttransport
Heavytransport Buildings
Wind BiomassSolar Electric
Storage
Energyefficiency
Energyefficiency
Efficientfertilization /
land use
Engine efficiencyHeat pumps
District heating
Fuelsubstitution
Hydrogen/ synthetic
fuel CCSCCU Bio-algae
Hydrogen/ synthetic fuelMethane
pills
H2 H2
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d.
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d.
Technology
Policies
Reasons forhope
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d.
?
Significant barriers to action
High investments, long pay-backs
Regulatory uncertainty; limited
visibility on MT emission constraints
Jobs at stake
"Difficult to save the planet
when you cannot make ends meet" International
competition, no level playing field
COVID already putting huge
pressure on national budgets
Significant barriers to action
High investments, long pay-backs
Regulatory uncertainty; limited
visibility on MT emission constraints
Jobs at stake
"Difficult to save the planet
when you cannot make ends meet" International
competition, no level playing field
COVID already putting huge
pressure on national budgets
Significant barriers to action
High investments, long pay-backs
Regulatory uncertainty; limited
visibility on MT emission constraints
Jobs at stake
"Difficult to save the planet
when you cannot make ends meet" International
competition, no level playing field
COVID already putting huge
pressure on national budgets
13 Copy
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t ©
201
7 by
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ll ri
ghts
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erve
d.
Technology
Policies
Societal engagement
Reasons forhope
?
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d.
13 Copy
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ghts
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erve
d.
Technology
Policies
Societal engagement
Reasons forhope
?
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d.
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d.
cost of carbon-neutral steel, assuming
CCS or H2 direct reduction
cost of carbon-neutral cement, assuming
Oxyfuel CCS
cost of green ethylene, assuming non-fossil inputs and renewable production
+50% +100% +50%
Chemicals Cement Steel
Economics are unfavorable
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cost of carbon-neutral steel, assuming
CCS or H2 direct reduction
cost of carbon-neutral cement, assuming
Oxyfuel CCS
cost of green ethylene, assuming non-fossil inputs and renewable production
+50% +100% +50%
Chemicals Cement Steel
Economics are unfavorable
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ghts
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erve
d.
+2% cost of a car made
with green steel
+3% cost of a house built with green cement
+1% cost of a soda bottle produced with green
ethylene
? Chemicals Cement Steel
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d.
Economics are unfavorable
Policies will come
Subsidies
Co-investment
Compulsoryrecycling
Carbon price & border tax
Product standards
Buildingstandards
Mandatorydisclosures
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ghts
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erve
d.
Policies will come
Subsidies
Co-investment
Compulsoryrecycling
Carbon price & border tax
Product standards
Buildingstandards
Mandatorydisclosures
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t ©
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ll ri
ghts
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d.
18 Copy
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erve
d.
Technology
Policies
Societal engagement
Companies/investors
Reasons forhope
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ll ri
ghts
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d.
19 Copy
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ll ri
ghts
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erve
d.
Technology
Policies
Societal engagement
Companies/investors
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ll ri
ghts
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d.
19 Copy
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ghts
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erve
d.
Technology
Policies
Societal engagement
Companies/investors
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erve
d.
Daunting 2°C challenge: Double down on the efforts to avoid an out of control spiral on climate
Technology-induced pace of change systematically under-estimated by stakeholders• Our main reason for hope, and a source of further business model disruptions
For most countries, ~3/4th of decarbonation goals can be reached at positive GDP impact• To go beyond, we need a global alignment... and a clean synthetic fuel
Hyper complex to get regulation right. But we know the general long term direction!
The sunset of fossil fuels?
Increasingly electrified world, yet limited upside in mature markets, stranded asset risks anywhere
A development challenge, and opportunity
A global energy landscape changing faster than ever
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A call for action for
allcompanies
Planning for uncertainty
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d.
New businesses opportunities?
A hard look at own portfolio
Sustainability agenda
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ll ri
ghts
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erve
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A call for action for
allcompanies
Planning for uncertainty
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ll ri
ghts
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erve
d.
New businesses opportunities?
A hard look at own portfolio
Sustainability agenda The ostriches will
get eaten(or drown)
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ll ri
ghts
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erve
d.
Planning for uncertainty
New businesses opportunities?
A hard look at own portfolio
Sustainability agenda Those who anticipate will
thrive
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ll ri
ghts
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erve
d.
Planning for uncertainty
New businesses opportunities?
A hard look at own portfolio
Sustainability agenda Those who anticipate will
thrive
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ll ri
ghts
res
erve
d.
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