Keynote presentation at FundForum International, Berlin, 13 June 2018

1. The huge opportunities
and dire risks inherent in
clean-energy revolution
and fossil-fuel stranding
Jeremy Leggett
FundForum International
Berlin
13 June 2018

2. ….and up to 70% cuts by 2050, 34 years from now
When the G7 agreed to push for decarbonisation in
the Paris Agreement, few believed it would happen
8th Jun
2015

3. Unexpected result: a clear signal in the Paris
Agreement - decarbonisation, as soon as possible
12th Dec
2015

4. 7th Jan
2016
4th Nov
2016
The Paris Agreement comes into force

5. But the pace slowed in 2017, the LSE report warns. The few hundred
court cases underway could potentially have a “significant impact.”
All 197 signatories of Paris Agreement are now
taking action, with >1,500 climate laws & policies
7th Jan
2016
30th Apr
2018

6. 7th Jan
2016
28th Jun
2017
The Paris emissions-trajectory challenge
Decarbonisation
by 2040
As set out by Christiana Figueres + long list of climate experts.
“Three years to safeguard our climate.”

7. What does total
decarbonization look like?
And is it
feasible?

8. 7th Jan
2016
13th Jan
2018
Renewable electricity will be consistently in lower
range of undercutting fossil fuels by 2020: IRENA
Fossil fuel cost range

9. Solar was the biggest single sector for new global
power capacity additions for the 2nd year in 2017
7th Jan
2016
5th Apr
2018
Source: UNEP / BNEF
Solar
98
38%
Wind
52
Coal
35
Gas
38
Large hydro
19
Nuclear
11
GW
Net new
power after
retirements
$160 bn of
investment:
biggest sector
in £280 bn total
renewables
investment

10. For the first time, global solar capacity grew faster
in 2017 than all fossil fuels and nuclear combined
7th Jan
2016
5th Apr
2018
The record 98 GW of new solar built in 2017 increased the world’s
cumulative capacity by a third, to 399GW.
Fossil fuels
Solar
Wind
Hydro
Other renewables Nuclear
Global growth in net electricity generating capacity
(i.e. including retirements of plants)125
100
75
50
25
0
GW
2010 2011 2012 2013 2014 2015 2016 2017

11. 7th Jan
2016
7th Sep
2016
All China’s new power demand in 2015
met with wind and solar

12. 7th Jan
2016
9th Feb
2017
Almost 90% of new power in Europe
came from renewables in 2016
Lisbon: 4 straight days of renewable-only power in 2016

13. Portugal's electricity consumption was
met 104% by renewables in March
7th Jan
2016
4th Apr
2018
Another first. Highest demand for 40 years met 97% wind & hydro, the
rest solar etc. Average wholesale price €4 less than 2016 (39.75 €MWh).

14. 7th Jan
2016
3rd Jan
2018
Wind supplies record 43.6% of Denmark’s
electricity, with no grid problems
Target by 2020 is 50% wind, with a further 30% from
solar, biomass and other renewables ….80% in all

15. World’s most powerful wind turbine installed
off Scotland: 191 metres, 8.8 MW
7th Jan
2016
13th Apr
2018
Vestas for Vattenfall. Just one rotation of the blades can
power the average UK home for a day.

16. 7th Jan
2016
27th Feb
2018 43 cities are now 100% renewable powered
The 43 are mostly in Latin America. Of 570 cities reporting to CDP, 101
are 70% or more renewable powered, compared to 42 in 2015.

17. Google owner Alphabet, biggest corporate
renewables buyer, reaches 100% renewable power
7th Jan
2016
4th Apr
2018
$3 bn investment in wind and solar powers all data centres, where
electricity use grows in double digits % each year.

18. Apple reaches 100% renewable power for all its
operations in 43 countries
7th Jan
2016
10th Apr
2018
Tim Cook, Apple CEO: “We’re going to keep pushing the boundaries of
what is possible ….because we know the future depends on it.”
Solar roof on Apple HQ

19. 7th Jan
2016
23rd Jan
2018
If the 122 RE100 companies were a country, it
would be the world’s 24th biggest user of electricity
Their use of renewable electricity in 2017 was up 49% on 2016.
PPAs quadrupled. 25 companies had achieved 100% by end 2016.
Source: RE100 Progress and Insights report

20. 7th Jan
2016
1st Dec
2017
US coal-fired power plant to be shut down
and replaced by solar
Wisconsin utility WEC Energy’s 1,190MW Pleasant Prairie
plant to be replaced by a 350 MW solar farm

21. IRENA reports 500,000 new jobs in 2017, up 5.3%, with the potential for
28 million by 2050 if the global energy system is decarbonised.
More than 10 million people now work in
renewables for the first time, 3.4 million in solar
7th Jan
2016
8th May
2018

22. US workers in solar and wind in 2016: 475,000
….more than coal and gas
7th Jan
2016
23rd Apr
2017
Coal
Gas
WindSolar
100,000 200,000 300,000 400,000 500,0000
Source: US Department of Energy

23. Good news stories from Kentucky show that “mine work today requires
mechanical and technical skills that are transferable to new industries.”
Wind, solar, & storage companies are “recruiting
coal miners for their work ethics & high-tech skills”
7th Jan
2016
9th May
2018

24. 7th Jan
2016
13th Nov
2017
82% in 13 countries believe it is important to create
a world fully powered by renewable energy
Largest ever such study: 26,000 people
surveyed by Edelman for Orsted

25. Google futurist Ray Kurzweil argues that analysts
tend to struggle with exponential effects
7th Jan
2016
30 Mar
2016
Solar doubles every c.2 years
30
10
20
50
40
(GW)
60
…to 2% of global energy supply
8 doublings 2000 – 2016…
6 more doublings to 2028…
…to >100% of 2016 global energy
c. 13,600 mtoe and >150,000 TWh
Ray Kurzweil
Co-founder, Singularity University

26. 7th Jan
2016
5th Dec
2017
Lithium-ion battery prices down 80% since 2010
….to an average $209 / kWh
$100 is widely viewed as the tipping point for EVs
…and on current trends is reached by 2025
1,000
$ kWh
600
800
200
400
2010 2011 2012 2013 2014 2015 2016 2017

27. At least 7 new gigawatt-size battery factories will
come onstream in Europe by 2020
7th Jan
2016
28th Mar
2018
LG, Samsung, Tesla/Panasonic, Daimler, Northvolt, TerraE will be
producing 80GWh a year within a decade: > 3x 2017 global production.

28. 7th Jan
2016
12th Feb
2018
“A Powerful Mix of Solar and Batteries
Is Beating Natural Gas”
e.g. California PURC requires PG&E to use batteries over gas
Arizona PSC opts for a First Solar solar-battery project cheaper than gas
The Way Humans Get Electricity Is About To Change Forever

29. Case for coal and gas plants is “crumbling” as wind,
solar and battery costs plunge
7th Jan
2016
28th Mar
2018
Bloomberg New Energy Finance says its latest conclusions
have “chilling” implications for fossil generators.
• Global LCOE falls 18% YOY for
both onshore wind and PV in
first six months of 2018
…to $55/MWh and $70MWh
respectively
• Offshore wind down 5% to
$118/MWh
• 79% fall in lithium-ion battery
costs since 2010

30. 7th Jan
2016
1st Dec
2017
Tesla switches on world’s biggest
lithium-ion battery
c.129 MW power at the 350 MW Hornsdale wind farm
in South Australia

31. 7th Jan
2016
6th Feb
2018
“How Tesla's big battery is bringing Australia’s
gas cartel to heel”
RenewEconomy: gas companies manufacture shortages to hike prices
for frequency control …and the big battery kicks in much cheaper

32. 7th Jan
2016
2nd Oct
2016
Carmakers embrace an electric future
at Paris motor show
Daimler Chairman Dieter Zetsche
unveils the Mercedes-Benz EQ

33. RR aims for its first EV within 10 years, but will phase out its existing
engines over several decades. Prediction: not fast enough.
Rolls-Royce to go ‘fully electric’ by 2040, calculating
UK and France will not be alone in banning ICE sales
7th Jan
2016
14th May
2018
Masayoshi Son, Softbank founder and CEO

34. China's Chongqing Changan to sell only EVs
from 2025
7th Jan
2016
19th Oct
2017

35. BYD’s first electric bus, just seven years ago, was seen as a joke. Now
China’s e-buses are displacing 233,000 barrels of oil a day.
Every five weeks, Chinese cities are adding 9,500
electric buses – the size of the London bus fleet
7th Jan
2016
23rd Apr
2018
Honda’s Asimo

36. Digitalisation “will increase the profitability of solar
power across every part of the value chain”
7th Jan
2016
13th Sep
2017
$800bn of additional value for renewables by 2030,
according to Solar Power Europe

37. Solarcentury is the behind-brand delivery partner. Meanwhile, EVs are
reaching a tipping point in the UK. Large-scale V2G not far off?
“Nissan's Following Tesla Into Solar Power and
Home Batteries”
7th Jan
2016
16th May
2018

38. Including 3 billion people breathing deadly fumes from domestic
cooking stoves and fires, causing an estimated 3.8 million deaths.
Air pollution kills 7 million people a year, WHO
reports, and 90% globally breathe polluted air
7th Jan
2016
1st May
2018

39. China announces it has already met its
2020 Paris climate goal
7th Jan
2016
27th Mar
2018
Target: CO2 emissions as a unit of GDP down 40-45 % wrt 2005 by 2020.
Achievement: down 46% by end 2017, 5.1% down year-on-year.

40. Up from 80%, with a new interim target for 2020 of a 56% compared
with the existing goal of 42%. NGOs wanted net zero by 2050.
Scotland sets one of the toughest greenhouse-gas
targets in the world: a binding cut of 90% by 2050
7th Jan
2016
24th May
2018
Future Today

41. Crown Prince Shaikh Mohammad Bin Zayed Al Nahyan, Abu Dhabi:
“I promise you, my brothers and sisters, we will be celebrating.”
7th Jan
2016
16th Jan
2016
“In 50 years, when we ship off the last barrel
of petrol, we will not be sad”

42. 7th Jan
2016
1st June
2017
Trump announces US will quit Paris agreement
“I was elected
to represent
the citizens of
Pittsburgh,
not Paris.”

43. 7th Jan
2016
1st June
2017
Pittsburgh condemns Trump and commits to
100% renewable energy by 2035
Mayor Bill Peduto:
“His misguided decision to withdraw from Paris
does not reflect the values of our city"

44. 7th Jan
2016
2nd June
2017
Michael Bloomberg: US cities, states and businesses
will still meet Paris targets
“The American
government may
have pulled out of
the agreement,
but the American
people remain
committed to it –
and we will meet
our targets.”

45. 7th Jan
2016
5th June
2017
Michael Bloomberg: US cities, states and businesses
will still meet Paris targets
1,000+ cities, states & businesses, representing a
third of US GDP, have joined “We Are Still In”

46. 7th Jan
2016
5th Dec
2017
All major EU power utilities commit to carbon-
neutral power ‘well before’ 2050
Eurelectric secretary-general Kristian Ruby

47. Jerome Pecresse, GE Renewables: “We are inventing things that we did
not even imagine three years ago …renewable baseload is coming fast.”
“Utilities dispel all doubts about renewables' ability
to power planet”: Recharge on Eurelectric summit
7th Jan
2016
6th Jun
2018
Francesco Starace,
Enel CEO:
electrifying the
transport sector “is
not only a winning
strategy, it’s a
must.”

48. “If $100 was too high for the world, $50 is too low for the
industry. It will have to be somewhere in between.”
John Hess
CEO, Hess Corporation
Despite huge cuts, most oil majors couldn’t even
cover their costs at $50 oil in 2016
7th Jan
2016
2nd April
2017

49. The shale business hasn’t funded itself
at any oil price
7th Jan
2016
27th Dec
2017
Even at $100 oil prices in 2012 and 2013, the 33 companies spent more
money producing shale energy than they made from operations
33 shale-weighted E&P companies in the 4 main shale oil plays:
Free cash flow
Source: Bloomberg

50. “The US shale industry has been a money pit”: FT. Chart shows free cash
flow per barrel produced for a sample of leading companies.
As the oil price rises, some US shale drillers finally
just about recoup the cost of their drilling
7th Jan
2016
22nd Apr
2018
$2
0
-2
-4
-6
2010 2011 2012 2013 2014 2015 2016 2017 Source: FT

51. Statoil plans to change its name to Equinor,
reflecting shift in strategy toward renewable energy
7th Jan
2016
14th Mar
2018
CEO Eldar Sætre: “For us, this is a historic day”. ….But the company still
only expects to be investing 15-20% of capex in renewables by 2030.

52. French oil and gas giant Total takes another
step into renewables
7th Jan
2016
17th Apr
2018
It buys 74% of Direct Energie and its 550 MW of operating renewables,
plus 2 GW pipeline, for $1.7bn.

53. The Spanish oil company “is the first among its peers” to do this,
Bloomberg reports. Production will be limited to current levels.
Repsol will end pursuit of oil and gas growth and
chase energy transition instead
7th Jan
2016
15th May
2018
Masayoshi Son, Softbank founder and CEO

54. One (former) oil and gas company has already
shown that total transition is possible….

55. 7th Jan
2016
7th Nov
2016
Dong Energy profit soars on offshore wind and sale
of gas grid, with all oil and gas to be divested next

56. DONG changes its name to reflect
near-100% transition to renewables
7th Jan
2016
2nd Oct
2017
Named after the Danish electricity pioneer, to reflect its
“profound strategic transformation from black to green energy.”
on track for
a 95%
renewable
footprint
by 2023

57. “Because so much energy comes from coal, slight fluctuations from year
to year can wipe out massive gains in renewables.”
The Paris challenge: renewables growth and retreat
from coal too slow …& oil & gas continue to grow
7th Jan
2016
1st May
2018

58. The effect of current policies has the world heading for around 3
degrees of global warming by 2100.
The Paris challenge: current policies come nowhere
close to the target, and pledges fall well short
7th Jan
2016
1st May
2018

59. They are solar, lighting, data centres and networks, and EVs. Particularly
problematic is that energy efficiency improvements have slowed.
IEA publishes a new monitoring tool showing only 4
of 38 energy sectors are on track with Paris targets
7th Jan
2016
29th May
2018
Future Today
On track: 4
Much more effort needed: 23
Significantly off track: 11

60. 51 GW of the 98 were added in China, where solar PV was the single
biggest new source of electricity capacity addition for the first time.
The 98 GW of new solar PV added in 2017 increased
global capacity by almost one third
7th Jan
2016
4th Jun
2018
Future Today
Global solar PV capacity and annual additions 2007 - 2017
Source: REN21 Renewables 2018 Global Status Report
= >40,000 solar panels
per hour all year

61. Rana Adib, exec secretary of REN21, warns of “complacency” …“we are
coasting along as if we had all the time in the world. Sadly, we don’t.”
REN21: Renewables growth in heating, cooling, and
transport well behind electricity generation sector
7th Jan
2016
4th Jun
2018
Future Today
Renewable energy in total final energy consumption, by sector, 2015
Source: REN21
Renewables 2018
Global Status Report

62. This is 3x the investment in fossil fuel generating capacity and more than
2x fossil-fuel and nuclear power capacity combined. ….But not enough.
Investment in renewables in 2017 was less than it
was in 2011 …it has essentially been flat since then
7th Jan
2016
4th Jun
2018
Global investment in renewable power and fuels
Source: REN21 Renewables 2018 Global Status Report
excluding hydro >50MW
…at least $310 bn if included

63. An update report by CERES sees realistic opportunities in the tens of
trillions across an array of asset classes in multiple sectors.
The “clean trillion” - the extra c. $1 tn p.a. needed
through 2050 for Paris 2˚C - is “eminently feasible”
7th Jan
2016
10th May
2018
Summary of conclusion in the original 2014 CERES report
on closing the clean energy investment gap

64. Regulators
beginning to
see risk, and
so to regulate

65. So estimates a Stanford University economic study published in Nature.
“The benefits of meeting the targets vastly outweigh the costs.”
Hitting 1.5˚C Paris target vs 2˚ will save the world c.
$30 trillion in climate-related damages this century
7th Jan
2016
23rd May
2018
Future Today

66. 7th Jan
2016
18th Jan
2017
Chinese government directive cancels 120 GW of
coal: 103 plants including dozens under construction

67. Wind and solar tariffs have fallen to around Rs 2.4 per unit. Coal
averages Rs 3.7. Of India’s 197 GW of coal plants, c. 40 GW are stranded.
“Cheap renewable energy is killing India’s coal-
based power plants” – 20% of plants are stranded
7th Jan
2016
9th May
2018

68. 30th Sep
2015
4th Dec
2015
Launch of G20 Financial Stability Board’s
Taskforce on Climate-Related Financial Disclosures
Mark Carney, FSB Chairman Michael Bloomberg, TCFD Chairman

69. 7th Jan
2016
14th Dec
2016
G20 FSB taskforce reports: urges climate-change
effect disclosure, pay tied to anti-climate action, +
The TCFD comprises companies with market capitalisation of $1.5tn and
financial institutions responsible for assets of $20tn

70. 7th Jan
2016
12th Dec
2017
237 companies with market cap >$6.3 trillion now
support the TCFD, incl. 150 FIs managing $81.7 tn
…includes 20 of 30 systemically important banks,
8 of 10 largest asset managers

71. 7th Jan
2016
12th Dec
2017
Funds managing $26 tn pledge to pressure worst
100 companies on emissions, = 2/3rds global total
225 institutions incl. HSBC Global Asset Management,
Calpers, Axa ++,

72. 6000
5000
4000
3000
2000
1000
Fossil fuel groups risk wasting minimum $1.6 trillion
capex 2018 – 2025 if Paris Agreement implemented
7th Jan
2016
7th Mar
2018
Source: IEA, Rystad Energy, Wood Mackenzie, Carbon Tracker analysis
Scenarios: 1.75˚C 2˚C 2.7˚C
(50% probability) (IEA B2DS) (IEA SDS) (IEA NPS)
2018–2025capex$bn
Capex: $3.3 tn $4.8 tn
Thermal coal: $60 bn at risk
Gas: $230 bn at risk
Oil: $1,300 bn at risk

73. CTI’s latest concludes: ”A 2°C pathway means that some companies will
lose, but current scenario analyses see everyone winning.”
Carbon Tracker on oil companies’ climate business-
risk assessments: “a large gap remains”
7th Jan
2016
21st May
2018

74. “Stop reasoning with the oil majors and sell their
shares instead”: Tom Sanzillo writing in the FT
7th Jan
2016
8th Mar
2018
“The shareholder engagement process increasingly
looks like a cynical exercise” where they just talk to buy time.
Tom Sanzillo, former first deputy
comptroller of New York State

75. 7th Jan
2016
12th Dec
2016
Fossil fuel divestment doubles to $5tn in a year, and
80% of total funds are now commercial / pension

76. 7th Jan
2016
10th Jan
2018
NYC becomes largest US city planning to divest its
pension funds from fossil fuels: $5 bn out of $189 bn
Financial future of police officers, teachers and firefighters is “linked to
the sustainability of the planet,” Comptroller Scott Stringer says

77. Catholic church makes record faith-based
divestment from fossil fuels
7th Jan
2016
3rd Oct
2017
40 institutions, 4 times bigger than previous record
…on anniversary of death of St Francis of Assissi

78. BNP Paribas drops all business with a wide range
of oil and gas companies and projects
7th Jan
2016
11th Oct
2017
All companies with focus on shale oil & gas, plus tar sands
- including LNG terminals and pipelines - and Arctic projects

79. 7th Jan
2016
16th Nov
2017
Norwegian Central Bank, manager of the oil fund,
tells government it should divest from oil and gas
Biggest holding end 2016:
$5.3 bn in Shell

80. 7th Jan
2016
12th Dec
2017
Insurance giant Axa takes divestment to new level:
dumps tar sands companies and pipeline insurance
Also quadruples its divestment from coal businesses and increases its
green investments fivefold, to €12 bn, by 2020
Thomas Buberi, CEO

81. 7th Jan
2016
12th Dec
2017
World Bank announces it will end financial support
for oil and gas exploration from 2019

82. “Civilisation requires energy, but energy use must not destroy
civilisation,” the Pope tells heads of BP, ExxonMobil and others.
Pope Francis invites oil bosses to the Vatican and
tells them that they must switch to clean energy
7th Jan
2016
9th Jun
2018
Valdis Dombrovskis, EC VP:
“time is running out”

83. Frederic Samama, co-head of institutional clients: “Until recently, that
question was not on their radar screen. It’s changing, and super fast.”
Europe’s largest asset manager Amundi sees a
“tipping point” in climate-risk aware investing
7th Jan
2016
31st May
2018
Future Today

84. c. €180bn p.a. new investment needed until 2030 to hit EU share of
Paris targets. Changes include green labels. Axa is a driving force.
Brussels changes rules to boost Paris-congruent
financial products & disclose climate risk of others
7th Jan
2016
9th Jun
2018
Valdis Dombrovskis, EC VP:
“time is running out”

85. Then there is the
legal system

86. “Big Oil must pay for climate change. Now we can
calculate how much”: leading climate scientists.
7th Jan
2016
7th Sep
2017
“Nearly 30% of the rise in global sea level between 1880 and 2010
resulted from emissions traced to the 90 largest carbon producers.”
Myles Allen, Oxford University, et al

87. San Francisco and Oakland sue five oil companies
for damages from rising seas
7th Jan
2016
21st Sep
2017
Public nuisance cases requiring payment for sea walls etc
Against BP, Shell, Chevron, ConocoPhillips, and ExxonMobil

88. …a saga spanning 2013-2017
…with multiple storylines
continuing on
www.jeremyleggett.net
Including
tech and the future of civilisation
All royalties to
Solar
Aid

89. A new website covering key developments daily:
www.jeremyleggett.net
7th Jan
2016
1st Apr
2018