Orders of magnitude

1. What is the Energy of the Future?
Nicolas Meilhan
Principal Consultant, Frost & Sullivan
January 2017

2. 2
Evolution of world primary energy consumption
- Million tons of oil equivalent , 1860 to 2012 -
What is the energy of the past?
Oil remains by far the main source of world energy, but has lost market share to gas and coal
Sources: Shilling et al., 1977, et BP Statistical Review, 2013
30%
27%
22%
8%
6%
4%
2%
80%
Biomass
Nuclear
Natural gas
Coal Oil
Hydro
Wind, solar &
geothermal

3. 3
Isn’t coal the energy of the past?
Yes it is as it fuelled the industrial revolution during the 18th century. But it might as well be
the energy of the future as it could surpass oil as the most primary energy used by 2030
Electricity production from coal
- % of total electricity production, 2013 -
Source: World Bank
Coal currently provides 40% of the world's electricity needs, accounts for 40% of
CO2 emissions and as much as 60% of CO2 emissions increase since 2000
1 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
40 %
0 %
45 %
50 %
100 %

4. What do we use this energy for?
Transport is almost exclusively based on oil, while industry relies on massive coal and gas
usage
* Including non-energetic use
Sources: BP Energy Outlook 2035, IEA
World primary energy consumption mix
- % of million tons of oil equivalent, 2013 -
4
Hydroelectricity
+ Nuclear Energy
+ Renewables
Natural gas
Industry* Transport Agriculture, residential,
commercial & public service
Oil
Coal
46% 17% 36%
95%
12%
21%
39%
28%
13%
25%
28%
34% 19%
22%
31%
28%
34%
2%
3%

5. Why do we use that much coal to produce electricity?
Ask the top 15 exporting countries (who accounts for 80% of exports globally) – they probably
know the answer
* Energy exports excluded
Source: World Bank
5
Goods & Services Exports vs. Electricity production from coal
- Top 15 exporting countries*, 2013 -
India
Brazil
Mexico
Switzerland
Belgium
Spain
Italy South Korea
The Netherlands
UK
France Japan
Germany
China
USA
0
500
1,000
1,500
2,000
2,500
0% 10% 20% 30% 40% 50% 60% 70% 80%
Exportsofgood&services(bn$)
Electricity production from coal (% of total electricity production)

6. Why do we use oil for transport?
1kg of oil contains as much energy as in 100 kg of batteries
Source : Pierre-René Bauquis, Richard Heinberg
Energy density of energy vectors used in transport
Energy density
Specificenergy
6
“If the building of the Great Pyramid required 10,000 people working for 20 years, then the
petroleum based energy used in the US on an average day build 100 Great Pyramids”
Richard Heinberg

7. Are we really running out of fossil fuels?
Knowing whether we’ll still have fossil fuels in 2100 is not the issue – the critical issue is
for how long we will have affordable oil to fuel our economy (and our cars..)
Liquid fuels extraction simulation
- 1900 to 2100 -
7
“It's not the size of the tank which matters, but the size of the tap”
Jean-Marie Bourdaire
Extractioninbillionsofoil
barrelsperyear
Source : Jean-Marie Bourdaire, Patrick Brocorens

8. 8
Do we really need affordable oil to fuel our global economy?
Four of the last five global recessions were preceded by an oil shock
Economic Recession vs. Oil Price
Source: Steven Kopits, June 2009, Douglas Westwood, Oil: What price can America afford?, EIA, NBER
Oilprice(US$/bbl)

9. Houston, we have a problem
Higher cost new oil projects require $80/bbl+ oil price to be profitable while oil demand (hence
GDP per capita) contracts when oil price surpasses $100 in the US and $120 in China
9
Breakeven prices for non-producing oil fields
Breakevenprice(US$/bbl)
Source: Rystad Energy, Morgan Stanley, U.S. Global Investors
Cumulative peak production (millions barrels per day)

10. Is shale gas the energy of the future?
In the short term maybe in the US with as high as 40% of gas demand in 2013, in
the longer term probably not in Europe with only 10% of gas demand in 2030
10
Bird’s eye view of a Texas shale gas field
- Click on the image-
Source : Google maps

11. Is space that important when it comes to energy?
Energy surfacic density must be considered when looking at the energy of the future – The
less space we have, the less choice we have!
Source: David MacKay, a reality check on renewables
11
Energy surfacic density

12. What could be the energy of the future then?
Fossil fuels share in primary energy mix will decrease only modestly, from 85% in 2013 to
80% in 2035, the new renewables share increasing from 3% in 2013 to 8% in 2035
Source: BP Energy Outlook 2035
Mtoe
Evolution of world primary energy consumption
- Million tons of oil equivalent & % , 1965 to 2035 -
12

13. 88%
67%
50%
45%
40%
38%
33% 32%
29%
27%
25% 24%
17% 17%
15%
11% 10% 10% 8% 7%
1%
6 47 5 53 293 21 28 34 330 26 17 24 134 152 321 3014 191 239 448 2281 277
Solar
Wind
Geothermal & biomass
Biofuels
Hydro
Can’t we just use renewable energies like our ancestors did in Middle Ages?
Countries which inherited large significant forests, hydraulic or geothermal potential might get
close to it – for others, it will be much more difficult unless consumption significantly decreases
13
Iceland Costa
Rica
Brazil
Norway New
Zealand
Sweden FinlandAustria
Canada Denmark
ChinaPortugal Italy
Spain
France
JapanGermany
USA
Primary energy
consumption
(Mtoe)
Share of renewable energies in primary energy
consumption of selected countries
- 2015, in % -
EU average = 12%
WW average= 10%
Switzerland United
Kingdom
South
Korea
Mtoe figures for power generation are converted on the basis of thermal equivalence assuming 38% conversion efficiency in a modern thermal power station
Sources: BP Statistical Review of World Energy 2014, IEA

14. What will life after fossil fuels look like?
It will be pretty difficult without strong energy savings
14
Mtoe figures for power generation are converted on the basis of thermal equivalence assuming 38% conversion efficiency in a modern thermal power station
Potential renewable energy production
- Million tons of oil equivalent per year -
453
2 000
Additional
Hydro
140
Biofuels
2 850
Biomass Total
Renewable
7 Gtoe
2 263
Wind
power
10 000
226
Geothermal
power
1 000
?
Total
20 Gtoe
[TWh]
[Mtoe] 688
3 040
Current
Hydro
453
2 000
Solar
power
15
compared to
2013

20 billions
panels of
1m2
15
compared
to 2013

cover 0,5
million km2)
25% of
forests
exploited at
3 toe/ha

9.5 million
km²
dedicated
8 billion
people
at 2.5
toe/year?
10% of
current
arable land
at 1 toe/ha

1.4 million
km²
dedicated
Source: Philippe Bihouix, BP Statistical Review of World Energy 2014, Frost & Sullivan

15. 15
What is the real energy of the future then?
The one we will not use!

16. Nicolas Meilhan
Principal Consultant
Energy & Transportation Practices
(+33) 1 42 81 23 24
nicolas .meilhan@frost.com