Solar  PV’s    pivotal  role  in    

the  great  global      energy  transi5on  

         

         Dr  Jeremy  Legge*  

Drama,c  changes  are  beginning                                  to  sweep  global  energy  markets  

Insurgency  cost  down  

Incumbency  cost  up  

Three  emerging  megatrends    are  par5cularly  important  

Carbon    ac,on  

         the energy of nationsRISK BLINDNESS AND THE ROAD TO RENAISSANCE

JEREMY LEGGETT

Jan 2004 – May 2013 May 2013 – Dec 2015

….as  I  see  it  in  my  front-­‐line  eyewitness  chronicles  

0%  

25%  

50%  

75%  

100%  

1850   1870   1890   1910   1930   1950   1970   1990   2010  Percen

tage

 of  U

.S.  E

nergy  Co

nsum

ption  

50  years  

Wood   Coal  

Hydro  

Oil  

Natural  Gas  

Renewables  

75%  

50  years  

1920  

75%  

2020  

Nuclear  

50  years  

X%?  

                     Source:  S  Dolezalek  

System  change  in  energy  is  nothing  new  

1913  1900  

Spot  the  car          Spot  the  horse  

….and  disrup5on  can  happen  very  fast  

….not  to  men,on  up  to  70%  cuts  by  2050,  35  years  from  now  

White  House  June  2015  

 The  industrialised  na5ons  have  declared  the  endgame  on  

Insurgency  cost  down  

Incumbency  cost  up  

Three  emerging  megatrends  

Carbon    ac,on  

                                                                                             Source:  Alliance  Bernstein,  April  2014  

Solar  PV  average  in  2006  

Fossil  fuel  versus  solar:  price  

35  years  

                     The  “Terrordome”  

                                                                                   Alliance  Bernstein,  14  April  2014  

   2006  

Fossil  fuel  versus  solar:  price  

Apple  global  ad  campaign  April  2014  

Big  players  are  smelling  the  coffee  

Why  would  Apple  want  “every  company  to  copy”    boring  and  design-­‐lite  solar  farms?  

Apple  Wants  to  Start  Producing  Cars  as  Soon  as  2020          18  Feb  2015  

Slough, UKUBS  Urges  Investors  to  Join  Solar  Revolu,on  Guardian,    27  August  2014  

The  power  of  solar  and  storage  

SSE  project  with  Solarcentury  rooTiles  2010  

Source:ce:  

The  power  of  solar  and  storage  €  kWh  

     EU  EV  sales  

EU  fleet  

Lithium  baWery  costs    

Solar  PV  roof  +  baWery  +  EV  price  

Payback,  years  ROI  

ROI    27  August  2014  

“This  will  change  the    face  of  energy  markets”  

                                                             9  April  2014  Unlikely  players    

are  paying  very  close  a*en,on  

20  August  2014  ….er,  run    that  past    me  again?  

The  first  U-­‐turn  has  happened  in  the  u5lity  sector.    How  long  before  the  first  oil  &  gas  company?  

Source:  Bloomberg  NEF  

The  rise  and  rise  of  renewables  GW    per  year  electricity  genera5on    addi5ons    

May  1  2015  Launch  of  Tesla  Energy  

Week  1:  $800  million  of  indica,ve  orders  

   And  as  for  energy  efficiency….  

The  best  way  to  shrink  the  mountain  of  transi,on….        ….and  the  best  way  to  create  energy  jobs  

Insurgency  cost  down  

Incumbency  cost  up  

Three  emerging  megatrends  

Carbon    ac,on  

Source:  Douglas  Westwood,  from  Bloomberg  

Selected  listed  interna5onal  oil  companies’  upstream  capex  and  crude-­‐oil  produc5on    

BG,  BP,  COP,  CVX,  ENI,  OXY,  PBR,  RDS,  STO,  TOT,  XOM    

Capex  versus  oil  produc5on  

Capex  trials  &  tribula5ons  

Kashagan  $50  bn  &  coun,ng   Shell  in  the  Arc,c:  

$5  bn  &  floundering  

Petrobras  &  the  sub-­‐salt:  $221  bn  over  5  years  pleeeeease  

Canada  &  the  tar  sands:  50  year  financing?  Really?  

Break-­‐even  oil  price:  assessing  danger  of  stranding  

May  2014  

$1.1  trillion  capex  at  risk  by  2025  >$95  

2  degree  budget  

“A  trillion  dollars  of  zombie  investments”  in  planned  future  oil  projects  above  $70  

December  2014  

 Shale  Drillers  Feast  on  Junk  Debt  to  Stay  on  Treadmill      Apr  30  2014  

Is  the  U.S.  Shale  Boom  Going  Bust?  Apr  22  2014  

1  December  2014  

It  gets  worse….  

…..an  enquiry  now  being  emulated  by  the  G-­‐20,  as  of  April  2015    

Coal  entering  structural  decline?  

Insurgency  cost  down  

Incumbency  cost  up  

Three  emerging  megatrends  

Carbon    ac,on  

Copenhagen,  Dec  2009  

Our  leaders  may  have  failed  in  2009,  but…..  

c.  100  na,ons  for  zero    net  carbon  by  2050  

66%  of  emissions  are    down  to  90  companies  

US  &  China  envoys  work  together  at  the  Lima  climate  summit,  December  2014  

…..circumstances  are  different  now  

And:  

….and  as  for  Saudi  Arabia,  oil  consump(on  is  a  vital  factor  

Economic vulnerabilitiesSaudi Arabia’s energy consumption pattern is unsustainable. The country currently consumes over one-quarter of its total oil production – some 2.8 million barrels a day.2 This means that on a ‘business as usual’ trajectory it would become a net oil importer in 2038 (see Figure 1). No one is suggesting this is the most likely outcome but the possibility does signal the urgency of the need for change. More oil reserves may be discovered and production raised, population growth may decline and new policies and technology may change consumption patterns, but in the absence of such events and with the country’s high dependence on oil revenues the economy would collapse before that point. The Ministry of Petroleum considers between $70/b and $80/b to be a fair international price for oil.3 With the price at $77/b Saudi Arabia could begin to fall into intractable deficit in its fiscal and current accounts from as early as 2022 (see Figure 2).

Figure 1: Saudi Arabia’s oil balance on a business-as-usual trajectory

Source: Chatham House research 2010. See Appendix 1 for assumptions and key sources.NGL = natural gas liquids

2 See Appendix 1 for our definition of ‘apparent consumption’. This is the figure given in BP (2011). It includes natural gas liquids (NGLs), international aviation fuel and marine bunker fuel. It differs from the figure given by Saudi Aramco, which would suggest around one-fifth of oil production is consumed domestically.

3 This is the range that Saudi government figures suggested for 2010–11 but what is considered a ‘fair price’ by Saudi Arabia tends to rise over time along with the budgetary needs. It was $35/b in 2004–05, for example. In February 2011, King Abdullah announced a $37bn handout including a 16% increase in all public-sector salaries. This $37bn is equivalent to an additional $14/b on the price of Saudi exports for 2010. A report from the Institute of International Finance estimated that the breakeven price for oil needed to balance the Saudi budget for 2011 would be $88/b, as opposed to $68/b in 2010 (IIF 2011).

2 Saudi Arabia’s Consumption Problem

-8

-6

-4

-2

0

2

4

6

8

10

12

14

16

18

20

20

05

20

10

20

15

20

20

20

25

20

30

20

35

20

45

mb/d

Oil consumption Saudi crude and NGL production Oil exports

20

40

Consump,on              Exports  

Saudi  crude  and  NGL  produc,on  

2025  

2030  

….and  the  proposed  solu,on?  

Saudi  Arabia:  not  a  drop  to  export  by  before  2030  on  current  trends  

   “We  need  to  help  Saudi  Arabia  become  the  Saudi  Arabia  of  solar.”  

A  US  intelligence  view    

Source:  Wikileaks  

Solarcentury experience helping to build “the Terrordome”

Early  demos:  UK’s  first  solar  electric  and  solar  hybrid  rooves  

UK’s  first  solar  electric                  tower  facade  

UK’s first solar street: S Yorkshire HA

Early  demos:  niche  applica,ons  working  with  architects  

Flat  roof  

•   5,220  modules  •   35  km  string  cable  •   2.6  t  central  inverter  •   EPC  contract  signed  13/10/09    •   connec,on  of  system  on  31/12/09  …..the  en5re  process  took  10  weeks  

Moving  towards  scale:    large  commercial  rooves    

Moving  towards  scale:  5MW  above  a  working  auto  factory  

Moving  towards  scale:  installing  above  working  railway  &  river  

       EnergyRoof  for  pitched  roofs  

Large  numbers:  barns  

Scale:  solar  farms  up  to  50  MW  

Innova,on:  while  manufacturers  innovate  at  the  cell  level…..  

….we  innovate  at  the  balance  of  systems  level,  in  mul,ple  ways  

Result:  a  genera,on  of    Solar  PV  ,les  and  slates  

UK’s first solar street: S Yorkshire HA

Result:  a  genera,on  of    solar  PV  ,les  and  slates  

Result:  a  new  BIPV  megaslate  cost-­‐compe,,ve  with  modules  

A  brand  family  with  a  purpose  Profits  for  a  purpose:  5%  dona,on  to  SolarAid  

10  million  people  reached  

900  local  jobs  created  

890,000  kg  CO2  averted*  

£230  million  in  savings*  

2  billion  homework  hours  created*  *over  three  years      

SolarAid’s  social  enterprise,    SunnyMoney  has  sold    �  1.6  million  solar  lights  

0  

200000  

400000  

600000  

800000  

1000000  

1200000  

1400000  

1600000  

1800000  

To  Apr  2015  

Uganda  

Malawi  

Zambia  

Kenya  

Tanzania    

Pla5num  GIIRS  Ra5ng    

0  

200000  

400000  

600000  

800000  

1000000  

1200000  

1400000  

1600000  

1800000  

2006   2008   2010   2011   2012   2013   2014   2015  

Cumula5

ve  light  sales  

Peaceful  solar  revolu,on  and  educa,on:  a  microcosm  of  the  solar-­‐led  renaissance  that  is  within  our  grasp.  

Thank  you      .jeremy.legge*@solarcentury.com      www.jeremylegge*.net