Presentation backing contributions to 2 panel discussions on solar at two international conferences this week.

1. Financing solar for a zero carbon world
Contributions to panel discussions on solar
at two international conferences:
Solar finance and investment
London, 5th February 2020
Making solar bankable
Amsterdam 7th February 2020

2. What follows are the points
I would most like to make
Time will not allow me to make them all, or in
much detail ….hence this presentation.

3. 1.
Global heating and its terrible impacts are
running ahead of climate scientists’
expectations and modelling. Accordingly,
going solar is increasingly about
creating hope in hell.*
* Hope In Hell: The title of Jonathon Porritt’s forthcoming book

4. 7th Jan
2016
1st Jan
2020
“I have no close friends or family in NSW or Victoria
who aren’t currently within 60km of a fire”
E-mail from an Australian friend. Thousands are forced to seek safety
on beaches, many needing rescue by the military.

5. 7th Jan
2016
3rd Feb
2020
“Climate Models Are Running Red Hot, and
Scientists Don’t Know Why”
“The simulators used to forecast warming have suddenly
started giving us less time.”

6. 2.
Solar is set to dominate the global acceleration
of electrification that will be needed if society is
to build the zero-carbon economy required to
stay below the 1.5˚C global-heating ceiling
in the Paris Agreement.

7. 7th Jan
2016
12th Apr
2019
First global energy system model using 100%
renewables …based on real weather data
A 4.5 year study by a team of 18,
funded by the German Federal
Environment Foundation +
Global energy demand and supply
for 145 regions modelled on an
hourly basis at 5 year intervals,
2015 – 2050
Model computes the cost-optimal
mix of technologies, based on
existing locally available
renewables (i.e. no further
innovation assumed).

8. Source: LUT University / Energy Watch
7th Jan
2016
12th Apr
2019
1.5˚C zero-GHG energy from power, heat, transport
and desalination sectors is possible before 2050
This 100% RE system - modelled hourly, globally, for the first time – is
lower cost than current global supply. It allots solar 69% of the mix.
€54 MWh
(excl. externalities)
€53 MWh
7.2 billion people
9.7 bn people
63,400
GW PV
19%
78,000 GW total renewables capacity

9. Source: LUT University / Energy Watch
7th Jan
2016
12th Apr
2019
Global electricity installed capacity grows from
6,300 GW in 2015 to 78,000 GW in 2050
By 2030 32% is solar, and by 2050 72%. In 2017 27% of global electricity
capacity was renewable (2,195 GW).
Average 700 GW
p.a. solar PV

10. Electricity, increasingly used for transport and heat,
becomes >90% of primary energy demand by 2050
This transition eliminates international energy dependencies, helps to
solve energy-related conflicts, fuelling peace and prosperity.
Source: LUT University / Energy Watch
89%
4%
7%
90%
6%
4%

11. By 2050 solar PV and wind generate 95% of global
electricity and are 88% of total energy supply
Even by 2030, solar PV supplies 32% of global energy. This transition
eliminates energy dependencies, helping solve energy-related conflicts.
Source: LUT University / Energy Watch
Solar
Wind
Coal
Oil
Fossil
gas
2050
RE 100%
2015
RE 10%
Shares of global primary energy supply
Includes all industry except non-energy-
related industrial feedstock demand

12. The levelised cost of energy becomes increasingly
dominated by capital costs, as fuel costs lose significance
The LCOE for a fully sustainable global energy system remains stable in
the range of 50-57 €/MWh throughout the 2015-2050 transition.
Source: LUT University / Energy Watch

13. 7th Jan
2016
31st May
2019
Up to 70 TW of solar PV feasibly envisioned by 2050
(10 by 2030), providing most global energy
So an international team of 45 solar experts argues in a peer-reviewed
paper in Science. Up from 0.5 TW today and 1 TW by 2022-2023.
Total final consumption and world electricity,
according to the 2018 World Energy Outlook
(WEO) New Policies Scenario
3 scenarios for for growth of PV cumulative
capacity assuming global average energy
yield of 1,370 kWh/kWp

14. Investment requirements, spread across multiple energy
sectors, reach > €14 trillion in 2045-2050, i.e. €2.8 tn p.a.
Investment in PV grows to > €5 tn 2045 - 2050, i.e. €1 tn p.a. Total in PV
is c. €3 tn 2025-2030, i.e. c. €600 bn p.a. >€30tn cumulative 2015-2050.
Source: LUT University / Energy Watch
Cumulative investment
across the transition:
€67 trillion
…average €1.9 tn p.a.

15. 3.
Despite recent indications that investment
may be stalling, wider context in the
financial markets suggest that the
floodgates to the trillions needed
are poised to unblock.

16. 7th Jan
2016
6th May
2019
Renewable capacity growth worldwide stalled in
2018 after two decades of strong expansion: IEA
“The world cannot afford to press ‘pause’ on the expansion of
renewables and governments need to act quickly”: ED Fatih Birol

17. 7th Jan
2016
18th Jun
2019
Global investment in renewable power and fuels
continues to be essentially flat since 2011: REN21
Source: BNEF in REN 21
$US billion …excluding hydropower >50MW

18. Worldwide investments in renewable energy
hits a six-year low in H1 2019
7th Jan
2016
10th Jul
2019
Source: Bloomberg NEF
Essentially flat since H2 2011

19. 7th Jan
2016
14th May
2019
“Falling renewables investment stalls Paris
climate goals”
IEA warns that renewables investment was down for the second year running in 2018,
to $304bn, and fossil fuel investment up, to $1.22 trillion. Fatih Birol: “the appetite to
push low carbon investments and policies is slowly fading.”

20. A “trillion dollar energy windfall” is available today
because solar & wind are cheaper than gas & coal
7th Jan
2016
9th Sep
2019
Carbon Tracker describes what it calls a “gigafall” in its latest report.
“The challenge for policymakers is to reap this harvest.”
“as costs fall, so new tipping points will be reached”
including in dispatchable renewables

21. Infrastructure the world needs by 2030 will require
c. $90 trillion of investment, built clean or fossil
7th Jan
2016
5th Sep
2018
Building it clean – low & zero carbon, as per governments’ 2015 Paris
agreement commitments – yields $26 trillion in direct economic gain.
The main conclusion
of a Global
Commission on the
Economy and
Climate report

22. 7th Jan
2016
4th Jun
2019
Worlds biggest companies see a trillion dollars of
climate risk, but around double that in benefits
$2.1 trillion in benefits estimated from annual disclosures to CDP.
$970 billion at risk - more than half of it anticipated within 5 years.

23. “Sharp rise in number of investors dumping fossil
fuel stocks”
7th Jan
2016
6th Sep
2019
1,100 institutions managing $11 trillion in assets have now committed
at some level. In 2014 it was 180 institutions managing $52 billion.
S&P 500 sector returns last 10 years %
“Paris climate accord
has been a massive
boon to the global
divestment campaign”
….but performance
has been a factor too

24. An equity research house removes all “buy” ratings
from the biggest integrated oil companies
7th Jan
2016
6th Sep
2019
“Sector underestimates regulations aimed at curbing climate change.”
Oil demand peak within 5 years means sector faces “an existential risk.”
Redburn hits ExxonMobil hit with a rare “double downgrade”, bumping
the world’s biggest oil company from “buy” to “sell” in one move

25. Top Wall Street analyst says oil and gas are
“in the death knell phase”
7th Jan
2016
31st Jan
2020
“The world has changed
….new kinds of managers who
want to appease young people
…..its going to be a parade”
….They are tobacco”
“Exxon could produce an upside
surprise and I don’t think it would
matter … Chevron just bought
back $5bn of stock, and no-one
cares”
”This is the reverse side of Tesla”

26. New Mercer analysis shows where investor
returns are to be found in a 2˚C world
7th Jan
2016
22nd Apr
2019
“Investors need to consider both climate-related mitigation and
adaptation in an active way to develop climate resilience in portfolios.”
Percentage point changes in annual returns in a 2C scenario by 2030
Source: FT
Absolute loss of value by 2041
Cumulative 95% loss of value
by 2050
Coal
Oil and gas
Electric utilities
Infrastructure
Sustainable equities
Renewables 6.3%

27. 7th Jan
2016
5th Apr
2019
“Even a fund built on oil is seeing that the future is green”:
Jan Erik Saugestad, CEO of Storebrand Asset Management.
Norway unlocks investments by state pension fund
in unlisted renewables
Siv Jensen
Finance Minister

28. Having invested €2.4bn in oil, gas and coal 2018, the European
Investment Bank now says it will align its strategy with climate targets.
EIB vows to cut all funding for fossil fuel projects
by end 2020
7th Jan
2016
26th Jul
2019

29. Laurence Fink, CEO managing c. $7 trillion funds: we are “on the edge of
a fundamental reshaping of finance” because of a warming planet.
“World's Largest Asset Manager BlackRock Shifts
Focus to Climate Change”
7th Jan
2016
14th Jan
2020

30. 4.
The flip side of the investability coin is the
increasingly parlous financial state of the
fossil-fuel incumbency. The oil and gas
industry needs to be very careful how it
positions going forward. It faces dire
financial risk, but also legal risk, including
potentially via retrospective liability.

31. Firms ignoring climate crisis will go bankrupt,
says BoE Governor
7th Jan
2016
13th Oct
2019
Also: he believes it possible that the global transition could result in an
abrupt financial collapse, and the longer action to reverse emissions is
delayed, the more the risk of collapse will grow.

32. First mention of oil-and-gas shorting opportunities
that that I have seen in the FT
7th Jan
2016
3rd Jul
2019

33. 7th Jan
2016
20th Jan
2020
The IEA exposes the full extent of oil industry foot-
dragging on the energy transition at Davos
“For the moment, there are few signs of a major change in company
investment spending … …doing nothing is not an option”
2.5%
2.0%
1.0%
1.5%
0.5%
0%
0.7%
The year of the
Paris Agreement
2.5
2.0
$ billion
capital
expenditure
1.5
1.0
0.5
0
% of
total capital
expenditure
Solar PV
Onshore wind
CCUS
Biofuels
Offshore wind
2015

34. Oil and gas majors have bet $50bn since 2017
assuming governments fail on Paris climate goals
7th Jan
2016
6th Sep
2019
Carbon Tracker analyses recently approved projects and finds them
“deep out of the money in a low-carbon world”. Plus many to come.

35. Governments and firms in 28 countries sued over
climate crisis in 1,300 legal actions since 1990
7th Jan
2016
4th Jul
2019
In the USA, no action by Trump to undo environmental regulations in his
2.5 years has yet survived a legal challenge, in 154 cases.
Source: Grantham Institute, LSE

36. 5.
On evidence since 2016, we may not be able
to rely on governments to deliver much hope
in hell. Given the importance of COP26 in
November, let us take the UK as an example.
But civil society and the business world have
not given up, and can yet turn the tide.

37. 7th Jan
2016
Xth Feb
2020
Johnson “doesn’t get it” on climate, says sacked
COP26 chair Clare Perry O’Neill
“We are miles off track globally where we are meant to be” in preparing
for COP 26 ….a “huge lack of leadership and engagement.”

38. So a new report by Prospect finds. Akin to the devastation caused to
coalmining communities in the 1980s, the union says.
UK renewables jobs plunge by a third 2014-17
and investment in renewables halves 2015-17
7th Jan
2016
30th Apr
2019

39. UK must act on emissions if it is not to be
embarrassed - legally - before COP26 in 18 months
7th Jan
2016
10th Jul
2019
So concludes the Climate Change Committee. Just 7 of 24 on-the-ground
indicators are on track. Almost all progress is in the electricity sector.
4th and 5th
budget
periods
Lord Deben, Chair:
“I feel I might be
first witness for the
prosecution”
Government projections show
UK currently on course to miss
4th and 5th carbon budgets

40. UK energy-saving efforts collapse by almost 85%
after government cuts to programmes
7th Jan
2016
18th Jul
2019
Monthly energy efficiency upgrades fall to 10,000 on average for the six
months to the end of May, vs 65,000 a month in 2014.
Data from a National
Energy Action report

41. 7th Jan
2016
24th Jun
2019
2018 was ‘toughest year yet’ for UK community
solar as installations plummet 78% to just 7.9 MW
Ore Community College: 250 kW, 100 investors, 50 local …including me.
Generating 76% of its own electricity demand on 27th July.

42. 7th Jan
2016
12th Apr
2019
Thousands of school students take to the streets
protesting climate inaction in 50 UK cities & towns
Protestors in London demand a Green New Deal. This, the third protest
wave in as many months, is mirrored from Helsinki to Dehli.

43. 7th Jan
2016
8th Apr
2019
“I just got fed up with the environmental movement selling so much
false hope when we’re still trashing the planet”: Farhana Yamin.
Extinction Rebellion has enjoyed viral success since
its launch in October last year

44. 7th Jan
2016
19th Jun
2019
Two thirds of British want faster climate action
than zero net emissions by 2050: new poll
Increasingly it looks as though Extinction Rebellion and the
schoolchildrens’ strikes are achieving a step change in public opinion.

45. Climate crisis seen as “most important issue”
by public, poll shows
7th Jan
2016
19th Sep
2019
Climate breakdown viewed as most important, ahead of migration,
terrorism and the global economy, in 7 out of 8 countries surveyed.

46. “Donations pour in as Extinction Rebellion
goes global”
7th Jan
2016
11th Oct
2019

47. 7th Jan
2016
2nd Dec
2019
RE100 now numbers 200+ companies targeting
100% renewable electricity, by 2028 on average
30 RE100 member companies have already reached 100% renewable
electricity and one in three members are now at over 75%.

48. 6.
Zero carbon and 100% renewables are
eminently feasible. Nobody should doubt
this any more.

49. 7th Jan
2016
1st Apr
2019
By then the innovative systems, products and services will by in place
“to ensure that the network is ready to handle 100% zero carbon”.
National Grid set for zero carbon power system
operation by 2025

50. 7th Jan
2016
1st Apr
2019
• Leveraging diverse
generation sources across
interconnected regional and
national grids
• improving renewables’
forecasting and predictability
• integrating dispatchable
renewables
• adding distributed storage,
and
• leveraging demand response
Amory Lovins, RMI
High percentages of renewables on grids prove
easily viable, if operators combine 5 techniques

51. 7th Jan
2016
29th Nov
2019
Zero Carbon Britain study by the Centre for
Alternative Technology updated
ZCB in summary
• 91% emissions reductions,
almost half a billion tonnes of
CO2 equivalent.
• 62% increase in annual
emissions capture in land
use: 47.8 MtCO2 per year, up
from 29.4 MtCO2 captured in
2017
Note that this capture is in fast
declining sinks and still only
brings the UK up to 24% of
land cover forested, compared
to the current EU average of
37%.

52. 7th Jan
2016
29th Nov
2019
Zero Carbon Britain study by the Centre for
Alternative Technology updated

53. In a historic report, BNP Paribas introduces the new
concept of Energy Return on Capital Invested
7th Jan
2016
4th Aug
2019
“We think the economics of renewables
are impossible for oil to compete with
when looked at over the cycle. We
calculate that to get the same amount
of mobility from gasoline as from
new renewables in tandem with EVs
over the next 25 years would cost 6.2 to
7 times more.”
“The economics of oil for gasoline and
diesel vehicles versus wind- and solar-
powered EVs are now in relentless and
irreversible decline, with far-reaching
implications for both policymakers and
the oil majors.”

54. Delivered energy at the wheels of an ICE vehicle is a
tiny fraction of gross energy in crude oil purchased
7th Jan
2016
5th Aug
2019
So BNP Paribas Head of Sustainability Research Mark Lewis calculates,
using conservative assumptions for this & comparison with renewables.
TWh
Derivation of net EROCI for every $100 bn spent on gasoline at $60 barrel
(average oil price in 2018 was $68)
(1 mboe =
1.7 TWh)
20% average efficiency
of ICE assumed:
generous

55. Much less energy is lost well-to-wheels using
electricity from solar and wind, meaning that….
7th Jan
2016
….at $60 per barrel oil price, solar delivers 6.2 times more energy than
oil, wind 6.2-7 times. They deliver 3 to 4 times more energy than diesel.
Derivation of net EROCI for every $100 bn spent on new solar projects
This is without factoring in
the very positive economics
of renewables’ ecological,
social, and security
advantages over oil

56. How cheap would oil have to be to achieve the
same energy return on capital as solar and wind?
7th Jan
2016
As the report puts it, “the numbers are stark.” And the solar net EROCI
assumes a solar new-build cost of $65 MWh: beyond conservative.
Net EROCI from new renewables in tandem with EVs versus oil used for gasoline
in light delivery vehicles for a $100 bn outlay
…The answer is less
than $10 a barrel

57. “Both the majors and the national oil companies
are effectively in a race against time”
7th Jan
2016
“The simple truth is that the oil
industry has never before faced
the kind of threat that renewable
electricity and EVs pose to its
business model. For the first time
there is a competing energy
source with a short-run marginal
cost of zero, that is much cleaner
environmentally and will be able
to replace up to 40 per cent of
global oil demand once it has the
necessary scale.”
Mark Lewis

58. A personal view from within the solar industry
”That our technologies provide such irresistible routes
to capital efficiency should now galvanize governments,
corporations, and investors to accelerate the solar
industry from today’s 100 GW a year to the terawatt a
year we will quickly need to get to if we are to play the
role we need to in civilisation’s fight for survival. We
know we can do this. We are not scared of scale.”

59. 7.
There is still woefully little solar in Africa,
and we are falling far behind the pace on
SDG7. But the marriage of solar and
storage, here as elsewhere, is enormous.

60. 7th Jan
2016
22nd May
2019
The world is far short of the SDG7 target trajectory,
IEA / IRENA / UN / World Bank / WHO report
Annual investment 2018 to 2030 will need to double, reaching $55bn for
energy access, $700 bn for renewables, $600 bn for energy efficiency.

61. “Tesla Batteries Are Keeping Zimbabwe’s
Economy Running”
7th Jan
2016
1st Sep
2019
Amid power outages of as long as 18 hours a day, Econet Wireless Ltd.,
Zimbabwe’s biggest mobile-phone operator, is turning to batteries.

62. Two Solarcentury mini-grid projects bring
solar electricity to 40,000 in Eritrea
7th Jan
2016
26th Mar
2019
1.25 MWp system in Areza and 1 MWp in Maidma, EU & UNDP funded,
Solarcentury managing construction and training locals for operation.

63. 8.
Solarcentury aspires to use its integrated
model to make a major impact in
multiple markets, and hence globally
…and to go add value beyond the solar.

64. Solarcentury posts c.£14.4m EBITDA FY 2018-19,
expects more than double that this year
7th Jan
2016
9th Jul
2019
CEO Frans: “There’s a culture ....we have a purpose that’s ingrained in
the DNA ...It’s a great asset to have. It keeps people together.”

65. 7th Jan
2016
14th Jan
2020
Work begins on Talayuela, an investment of
€225 million creating 400 new jobs

66. 7th Jan
2016
14th Jun
2019
Nearly 100 members of the public invest €250,000
in Solarcentury’s Budel solar farm
A showcase in “how developers, provinces, financial institutions and
citizens can work together to make a meaningful difference towards the
country’s transition to a low carbon economy.”

67. Solarcentury in school-strike support role …meeting
requests for the painting of ER symbols on faces
7th Jan
2016
20th Sep
2019

68. Thank you
www.jeremyleggett.com
www.solarcentury.com