“An efficient transformation to a lower carbon economy “

Mulhouse, 06.12.2013

2

World GHG Emissions

Source: Analysis by Ecofys – flow chart 2010

*Fossil Fuel related emissions

*Direct emissions (i.e. livestock CH4 emissions, Co2 emissions from cutting down trees)

3

Changing dynamics in the energy sector are putting current energy architecture under pressure

Global Energy Demand, 1990-2035

TPED – Mtoe - new policies scenarios

Sources: IEA (WEO 2013), World Bank, IEA (WEO 2013)

World Bank Energy Price Index

2010=100, Real 2010 US$ terms*

Energy-related CO2 emissions by region

Mt CO2 – new policies scenarios

OECD

Non-OECDNon-OECD

OECD - EuropeOECD - Asia/Oceania

OECD - Americas

Recession

"Super-cycle"of developing world

growth

OECD

Non-OECD

4

Energy transitions are more complex than ever before

5

Energy Architecture Objectives

Through the New Energy Architecture the Forum seeks to measure the transitions across an “Energy Triangle”

“Social”

Industry

Govern-ment

Civil Society

“Physical”“Physical”

Carriers

Energy Sources

Markets & Demand Sectors

EnergyAccess & Security

Economic Growth & Development

Environmental Sustainability

“Energy Triangle”

“Boundary Constraints”

Water availability

Hydrocarbon

reserves

Geo

grap

hic

setti

ng

& c

limat

e

Land availability

Physical elements: Includes energy sources, their carriers and end markets.

Social elements: Includes political institutions, industry and civil society, which shape the physical elements.

The Energy Triangle: Ultimate objectives that the energy architecture is designed to support.

Boundary constraints: Factors limiting performance against the energy triangle, both physical and social.

Definitions

6

7

The analysis of the New Energy Architecture initiative highlights policy, market structures, technology and human capital as the key enabling factors for effective transitions

The four enabling pillars

HUMAN CAPITAL

TECHNOLOGYPOLICY MARKET STRUCTURES

8

A single factor does not drive a transition on its own: the ecosystem of enabling pillars must come together

Technical advances in Hydraulic fracturing

O&G workforce

Regulatory framework

Market with small independent producers

9

Interconnectedness of energy systems: individual transitions can have a wider reach and impact and cause negative transitions

$ $

10

Conclusions

There is a clear and significant transformation on-going in the global energy system

An integrated approach is critical

Trade-offs are often necessary

New Technologies are available

Sustainability needs more attention

Appendix

12

How does business interact with climate goal?

Lowering cost base

Energy literacyConsumer demandBrand image

Profitability

13

Fossil fuels are still dominating the energy landscape

Source: IHS Global Insight and International Energy Agency (history), Statoil (projections)

Global energy demandTPED, bn toe

1990.00

1991.00

1992.00

1993.00

1994.00

1995.00

1996.00

1997.00

1998.00

1999.00

2000.00

2001.00

2002.00

2003.00

2004.00

2005.00

2006.00

2007.00

2008.00

2009.00

2010.00

2011.00

2012.00

2013.00

2014.00

2015.00

2016.00

2017.00

2018.00

2019.00

2020.00

2021.00

2022.00

2023.00

2024.00

2025.00

2026.00

2027.00

2028.00

2029.00

2030.00

2031.00

2032.00

2033.00

2034.00

2035.00

2036.00

2037.00

2038.00

2039.00

2040.00

0

5

10

15

20International bunkers

Other non-OECD

Non-OECD Asia

OECD

14

Energy architecture performance index (EAPI) indicator conceptual framework

• Efficiency

• Affordability / Lack of price distortion

• Supports / detracts from growth

• Emissions impact

• Ratio of low carbon fuels in the energy mix

• Diversity of supply

• Level and quality of access

• Self-sufficiency / multi-lateral markets

ENERGY ARCHITECTURE PERFORMANCE INDEX

How successfully does [the] country’s energy system perform in terms of promoting economic growth and development , whilst being environmentally sustainable, secure and allowing universal access to consumers?

KEY QUESTION

ECONOMIC GROWTH & DEVELOPMENT

ENVIRONMENTAL SUSTAINABILITY

ENERGY ACCESS & SECURITY

QU

ANTI

TATI

VE MEASURES: MEASURES: MEASURES:

15

Energy architecture performance index (EAPI) indicators

ENERGY ARCHITECTURE PERFORMANCE INDEX

How successfully does [the] country’s energy system perform in terms of promoting economic growth and development , whilst being environmentally sustainable, secure

and allowing universal access to consumers?

ECONOMIC GROWTH & DEVELOPMENT ENVIRONMENTAL SUSTAINABILITY ENERGY ACCESS & SECURITY

OBJECTIVES KPIS

Emissions impact

• Efficiency of electricity production – CO2 from electricity and heat generation/kWh

• Nitrous oxide emissions in energy sector (thou. metric tons of CO2 equivalent)/Total Population

• Methane emissions in energy sector (thou. metric tons of CO2 equivalent)/Total Population

• Emissions intensity – PM10, country level (mg per m3)

• Average Fuel Economy for Passenger vehicle fleet (l/100km)

Ratio of low carbon fuels in the energy mix

• Alternative and Nuclear energy as share of total consumption (%)

OBJECTIVES KPIS

Diversity of supply

• Diversity of Total Primary Energy Supply (Herfindahl index)

• Diversification of net import counterparts by country (Herfindahl index)

Level and quality of access

• Electrification (% of population)• Quality of electricity supply

(Survey score between 1 – 7)• Percentage of population using

solid fuels for cooking (%)

Self-sufficiency

• Import Dependence (Energy Imports, net % energy use)

QU

ANTI

TATI

VE

OBJECTIVES KPIS

Efficiency • Energy Intensity (GDP per unit of energy use (PPP $ per kg of oil equivalent))

Affordability • Degree of artificial distortion to gasoline pricing (index)

• Degree of artificial distortion to diesel pricing (index)

• Electricity Prices for Industry (U.S. Dollars per Kilowatt hour)

Supportive / detracts from growth

• Cost of energy imports (% GDP)• Value of energy exports (% GDP)