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Resetting Destination for Energy Decarbonization | Accenture

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The transition to a decarbonized energy system is a transition like no other. Oil and gas companies are poised to lead the charge. Along the way, however, they must change what they do and how they do it. Here’s why https://accntu.re/34sLSGW

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Resetting Destination for Energy Decarbonization | Accenture

  1. 1. Decarbonizing Energy: From A to Zero A practical guide to navigating the decarbonization process.Make the move towards a more affordable,sustainable and available future. Wecallitpositiveenergy. Section 1 Resetting the destination
  2. 2. Resetting the destination Decarbonizing Energy | From A to Zero 2 This transition is different Source: Accenture Analysis
  3. 3. Resetting the destination Decarbonizing Energy | From A to Zero 3 The energy transition is about delivering on a balanced purpose
  4. 4. Resetting the destination Decarbonizing Energy | From A to Zero 26GTvolume of energy- related emissions attributable to the oil and gas industry 40GTvolume of global energy-related emissions released each year 4 In the oil and gas industry: 20 percent of CO2 emissions come through extraction, processing, transportation and refining activities. 80 percent of CO2 emissions are released at the point of consumption, when hydrocarbons are converted for other uses. The imperative for oil and gas companies is to limit not only the 20 percent of emissions that occur in their operations, but also the 80 percent that occur beyond their reach. To achieve this transition, the oil and gas industry will play a critical role
  5. 5. Resetting the destination Decarbonizing Energy | From A to Zero 5 Four variables will determine the success of the Decarbonization Transition: New infrastructures to accommodate new energy supplies New technologies and ecosystems that transform how the energy system operates New markets and regulations promoting the development of low-carbon solutions New behaviors among individual and business energy consumers (including investors) that will change the nature of energy demand Catalysts for change
  6. 6. Resetting the destination Decarbonizing Energy | From A to Zero 6 The Accenture “stretch” case: Achieving 80 percent of the oil and gas industry’s net-zero emissions target by 2050 is possible. Pipe dreams? Accenture believes that the oil and gas industry will not be able to achieve its net-zero emissions targets by 2050. We do believe, however, that pragmatic actions will get the industry to 80 percent of that goal. That conclusion is based on detailed analyses of core energy sectors and sub-sectors, which allowed us to formulate a “stretch” case scenario that is realistic and within reach.
  7. 7. Resetting the destination Decarbonizing Energy | From A to Zero 7 The stretch goal The Accenture “stretch” case: Achieving 80 percent of the oil and gas industry’s net- zero emissions target by 2050 is possible. Accenture believes a pathway exists for oil and gas companies to achieve 80 percent of their net-zero ambitions. Negative emissions can potentially close a portion of the gap that remains. And the momentum from concerted and pragmatic actions will likely bring about additional gains post-2050. To illustrate what is possible, Accenture has envisioned two “states of the world” through to 2050. One is the by-product of business-as-usual (BAU) practices and mindsets. The other depicts the “stretch case.” It represents what we believe is possible, realistic and within reach. It will require activating decarbonization levers across multiple industry sectors.
  8. 8. The decarbonization potential across multiple sectors is enormous. Resetting the destination Decarbonizing Energy | From A to Zero 8
  9. 9. Resetting the destination Decarbonizing Energy | From A to Zero 9 Shifts to reduce emissions from 2050 business- as-usual to 2050 stretch Source: Accenture Analysis
  10. 10. Resetting the destination Decarbonizing Energy | From A to Zero 10 Decarbonization will be driven by shifts affecting both supply and demand Impact on final energy demand Energy efficiency (-7 GT CO2) Process and material efficiency (-7 GT CO2) Final demand management (-5.4 GT CO2) Carbon capture, utilization and storage (CCUS) (-2.8 GT CO2) Circularity solutions (-2.4 GT CO2) Impact on final energy supply Coal to solar and wind (-11 GT CO2) Fossil fuel to electricity consumption (-5.2 GT CO2) Coal to gas (-2.1 GT CO2) Hydrogen (-1 GT CO2) Biofuels (-0.9 GT CO2)
  11. 11. These shifts have the potential to eliminate 42 GT CO2 by 2050.* Resetting the destination Decarbonizing Energy | From A to Zero 11
  12. 12. Resetting the destination Decarbonizing Energy | From A to Zero 12Source: Accenture Analysis Global energy emissions shifts
  13. 13. Achieving the stretch goal requires oil and gas companies to take three sets of actions today. Resetting the destination Decarbonizing Energy | From A to Zero 13
  14. 14. Resetting the destination Decarbonizing Energy | From A to Zero 14 Success requires all three sets of actions to be activated. Source: Accenture Analysis
  15. 15. Resetting the destination Decarbonizing Energy | From A to Zero 15 Clean the Core actions can lead to a 20+ GT CO2 emissions improvement by 2050. Clean the Core Clean the Core activities minimize emissions and maximize efficiency from current operations, infrastructure and value chains. Our stretch case analyses show that certain actions—such as maximizing efficiency, managing demand and enhancing operating practices—can help leaders achieve as much as a 21 GT improvement in CO2 emissions by 2050. The sectors that will see the greatest benefit from Clean the Core actions are asset-intensive industries: hydrocarbon extraction and processing, heavy transportation and aviation.
  16. 16. Resetting the destination Decarbonizing Energy | From A to Zero 16 Accelerate the Transition actions canlead toa20GTCO2 emissions improvement by 2050. Accelerate the Transition Accelerate the Transition actions replace existing sources of energy and demand with available and competitive cleaner and zero-emission alternatives. In our stretch case scenario, these actions represent over 45 percent (or approximately 20 GT) of the potential improvement in emissions through 2050. Of that, approximately 10 GT reduction will come from the power sector.
  17. 17. Resetting the destination Decarbonizing Energy | From A to Zero 17 Extend the Frontier actions can lower emissions by 2 or 3 GT by 2050. Extend the Frontier Extend the Frontier actions are focused on adopting and scaling new energy sources, processes and technologies beyond what is commercially and technically possible today. These solutions can be used to decarbonize parts of the energy system that otherwise can’t get close to net-zero emissions due to their reliance on hydrocarbons. Our stretch case analyses found that up to 20 percent of global emissions not decarbonized by Clean the Core or Accelerate the Transition actions can be addressed by Extend the Frontier solutions.
  18. 18. Resetting the destination Decarbonizing Energy | From A to Zero 18 The time is now The path to achieving their future ambitions is open. It’s time for the industry leaders to make their moves.
  19. 19. Navigating the new route Decarbonizing Energy | From A to Zero 19 Muqsit Ashraf Senior Managing Director Global Energy Industry Sector Lead Muqsit is a Senior Managing Director and Global Industry Lead for Energy. He advises Energy executives and senior stakeholders on strategy, transformation, and technology/innovation. Muqsit also serves on Accenture's Global Leadership Council. Muqsit has nearly 20 years of experience working in the energy industry across the value chain—upstream, oilfield services, downstream and petrochemicals. Muqsit specializes in corporate strategy, operating model design and large scale business (and digital) transformation programs. Muqsit sponsors Accenture's partnership with the World Energy Council, manages the relationship with the World Economic Forum's Energy team, and is part of Accenture's Global Energy Board. He features regularly on major industry conferences and forums, and publishes internally and externally. Before joining Accenture in 2015, Muqsit managed the North America business for SBC (Schlumberger Business Consulting). Tom Beswetherick Senior Manager – Energy, Strategy & Consulting Authors David Rabley Managing Director – Energy, Strategy & Consulting Tom is a Senior Manager within Accenture Strategy & Consulting’s Energy practice. He has extensive experience working with oil and gas companies and governments in the areas of portfolio strategy, M&A and capability development across North America, Asia Pacific and Europe. Having started his career in clean technology- related research and publication, Tom recently returned to this area and is a member of Accenture’s growing Energy Transition practice. He now focuses on conducting research, advising clients and publishing articles. David is a Managing Director based in Houston and leads the Accenture Energy Transition practice for oil and gas globally and in North America. With over two decades of experience in the energy industry, David collaborates with majors, national oil companies, US-based independents and oilfield services companies to develop and execute strategies and programs to understand and lead the energy transition, transform and protect value for their stakeholders, society and for the environment. David works closely with international organizations including the World Economic Forum and the World Energy Council with a focus on future energy scenarios and priorities for the successful development of the energy system.
  20. 20. About Accenture Accenture is a leading global professional services company, providing a broad range of services in strategy and consulting, interactive, technology and operations, with digital capabilities across all of these services. We combine unmatched experience and specialized capabilities across more than 40 industries — powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. With 513,000 people serving clients in more than 120 countries, Accenture brings continuous innovation to help clients improve their performance and create lasting value across their enterprises. Visit us at www.accenture.com Copyright © 2020 Accenture. All rights reserved. Accenture and its logo are trademarks of Accenture. This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative. This document makes reference to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied. www.accenture.com/DecarbonizingEnergy

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