What's the recipe for tomorrow's energy mix? We explored three scenarios around the present and future of the energy landscape as introduced at EY’s Energy Reimagined Summit.

1. Energy Reimagined
Influencing outcomes: the future
of energy mix
February 2018

2. Page 2
Section 1: recap of EY Energy Reimagined Summit
The energy landscape of the future is unknown and likely to be very different from the current energy
mix, so what do energy companies need to do to be ready for the future.

3. Page 3
EY Energy Reimagined Summit was our first forum to debate the path of energy and help bring fresh insights and
leading practices. We brought together industry leaders in an energizing and dynamic environment to explore
innovation, collaboration and growth for the future of energy.
How will the shifting energy mix
change your business model?
Will technology represent a
force for effective change or for
displacement?
1
2
3
4
What will be the role of public
and private players in
energizing nations?
How can the energy industry
collaborate beyond traditional
boundaries?

4. Page 4
EY introduced three scenarios that served as the basis of debate for the Energy
Reimagined Summit

5. Page 5
We also introduced the “countdown clock” concept that highlights the improving
economics of non-utility solar plus battery technology
1
3
Source: Utility impact model central scenario EUROPE - EY analysis
Fully delivered
cost of electricity
Cost of transmission
and distribution
Non utility solar +
battery LCOE
Grid cost parity of
non-utility solar plus
storage systems
T&D parity with
non-utility solar
+ battery LCOE
EV & ICE parity
(cost + performance)
Illustrators*
Tipping point 3 is
24 years away
in Europe
Tipping point 1 is
5 years away in
Europe
Tipping point 2 is
8 years away in
Europe
* Analysis is based on average profiles. In
each geography, there will be segments of
the customer base for whom the
economics improve much sooner.
Birth of the new energy
system
Electricity and mobility industry
convergence
The digital energy
market place
0
100
200
300
400
500
600
700
2015 2020 2025 2030 2035 2040 2045 2050
US$/MWh
2
For illustration only

6. Page 6
Section 2: Exploring the three scenarios
Where are we today and what is likely to happen – present and future of the energy landscape

7. Page 7
The energy landscape has evolved over the last few years, with the rapid rise of
renewables
4,418.2
3,732.0
3,204.1
910.3
592.1
127.1 217.1 75.4
Oil Coal Natural Gas Hydro Electric Nuclear Energy Geothermal,
Biomass and
Other
Wind Solar
Consumption (2016) and consumption growth (2006-2016) by energy source (Mtoe)
1.04% 2.2%1.3% (0.7)%2.9% 50%21.9%7.5%2006-2016 CAGR
0.7% 0.9%(0.2)% (0.14)%1.6% 17.8%8.2%3.5%2011-2016 CAGR
2016 consumption
Mtoe
Oil, gas and coal
collective account for
~85% of the energy
consumed in 2016
Energy consumption
growth witnessed
significant drop in
2011-2016
Solar energy
consumption increased
57 times during 2006-
2016; installed capacity
increased by 52 times
Will wind and solar outpace hydrocarbons in consumption volume growth?
If yes, what timelines can be associated with dominance of solar and wind over hydrocarbons?

8. Page 8
Global energy demand is set to grow by ~30% over the next 25 years and will further
influence the energy mix going forward
Notes (*): Energy demand range (2040) reflects projections from IEA, EIA and Exxon. Energy demand
under central scenarios is considered from sources where more than one scenario was available.
0 100 200 300
Power
Buildings
Industry
Transport
Primary energy demand projections (2015 – 2040)*
Energy demand (Quadrillion BTU)
Energy demand (2015) Energy demand range (2040)
Drivers of energy demand
Source: IEA’s WEO 2016 New Policies Scenario
Rising population
Economic growth
Urbanization
Electrification
Energy efficiency
Mean energy demand (2040)
Power sector’s share of total
growth in primary energy; driven
by electrification in developing
countries and structural shift
away from industry and towards
services sector
Transport: easing growth due to
improving fuel economy,
however, potential for mobility
revolution heralded by electric
vehicles
Industry: growth weighed down
by efficiency gains and shift away
from energy intensive sectors;
varying projections around the
extent of structural economic
shift in China
Buildings: slow growth due to
improved efficiency measures
~50%

9. Page 9
EIA (2040)
Divergent views exist on the continued dominance of hydrocarbons going forward
Conventional energy sources (coal, gas and oil)
Cleanenergysources(renewablesandnuclear)
Energy mix forecasts spectrum
BP – Base Scenario (2035)
50% 100%
0%
50%
40%
30%
20%
10%
60% 70% 80% 90%
BP – Faster
Transition (2035)
BP – Even Faster
Transition (2035)
Exxon (2040)
Statoil – Reform
(2050)
Statoil – Renewal
(2050)
Statoil – Rivalry (2050)
IEA – Current Policies (2040)
IEA – New Policies
(2040)
IEA – 450
Scenario (2040)
Key
Oil
Gas
Coal
Nuclear
Hydro
Non-hydro renewables
Wood Mackenzie (2035)
Actual (2015)
Note: Biomass/Bioenergy/Biofuels are considered part of non-hydro renewablesSource: IEA, Exxon, BP, EIA, Wood Mackenzie and Statoil
All projections agree on the direction
towards which global energy mix is
transitioning – with share of clean
energy sources expected to increase at
the expense of conventional energy
sources – however, there is little
consensus on:
► What will the energy mix look like in
the next 20 years?
► How quickly will we get to a more
balanced energy mix?
► How disruptive will a renewable
transformation be?
► How can energy companies prepare
themselves?Scenario I:
Hydrocarbon
heavy
Scenario II:
Electric
Evolution
Scenario III:
Renewable
revolution

10. Page 10
The vast range of projections fall into three distinct, broad scenarios, one of which will
define the future energy ecosystem
Source: EY Analysis based on the following sources: International Energy Agency EA-World Energy Outlook 2016, Exxon-Outlook for Energy 2017, BP Energy Outlook 2017, US Energy Information Administration-Annual Energy Outlook 2017, Wood Mackenzie-Global Energy Forecast to 2030 and Statoil-
Energy Perspectives 2017
Energy mix forecasts scenario spectrum
Share of energy
supply
Non-fossil
fuels
Fossil
fuels
70% 10% 20%
56%
15%
29%
78%
6%
16%
Fossil fuel ~5x of renewables
Fossils
Nuclear
Renewables
Fossil fuel ~2x of renewables
Fossil fuel ~3.5x of renewables
Fossils
Nuclear
Renewables
Fossils Nuclear Renewables

11. Page 11
Scenario 1 Hydrocarbon heavy: the energy world of tomorrow doesn’t look a whole lot
different from the world of today
Hydrocarbon
heavy
Sustainability preferences
► Consumers don’t push for sustainable
energy; instead prefer cheapest source
Overall
► 2oC climate change target unlikely to be met
► Political and economic uncertainty stalls investment and
impact energy availability
► Increased hydrocarbon consumption amidst political tensions
affects energy affordability
Utilities
► Constantly evolving incentives for renewables hinder
ability to make efficient investment choices
Oil & Gas
► Strong and continued upstream capex, especially
unconventional assets
► Oil and gas prices expected to be volatile driven by
demand and more unconventional supply
Government
Consumers
Technology
Renewable costs competitiveness
► Rate of renewable cost reduction slows down
EV uptake
► EVs penetrate small to mid-size segment globally
► 56m EVs worldwide by 2030
Energy efficiency
► $15tr investments in efficiency improvements
► Efficiency reduces liquid fuel demand by 17 Mb/d
Decarbonization policies
► Climate change ambitions practically ignored
► Limited phase out of fossil fuel subsidies
Carbon trading
► EU ETS lingers on but is ineffective
► Other existing regional trading systems stall
Regulations around unconventional gas
► More governments outside North America permit
unconventional oil and gas

12. Page 12
Scenario 2 Electric evolution: advances in technology and consumer attitudes enable a
faster progression toward low-carbon energy
Electric
evolution
Sustainability preferences
► Negative attitude towards fossil fuels
► Acceptance of conservation investments
and transportation alternatives
Overall
► Sustainability progress despite missing climate targets
► Enhanced efficiency and lower dependency on fossil fuels
improves energy security
► Regulators struggle to establish the right market structures
that are increasingly supplied by renewables
► Approaching peak oil
Utilities
► Conventional generation assets become
uneconomical and struggle to provide returns on
committed investments
► More energy choices lead to greater consumer
intervention
► Maintaining power grids becomes challenging due to
high renewable generation
Oil & Gas
► Influence on policy making and diversified portfolios
(through capex allocations to renewables) become critical
for survival
► Increased risk of stranded or devalued fossil fuel assets
► Intense shareholder activism against hydrocarbons
► Increased regulatory pressure to reduce energy intensity
Government
Consumers
Technology
Renewable costs competitiveness
► Wind energy costs fall 8%-24%; solar 46%-66%
► ~60% renewable generation does not require subsidy
EV uptake
► Lower battery costs spur transport electrification
► 160m EVs worldwide by 2030
Energy efficiency
► $23tr investments in efficiency improvements
► 20%-30% energy efficiency savings by 2040
Decarbonization policies
► Governments honor Paris agreement
► Oil importers end fossil fuel subsidies in 10 years
Carbon trading
► Governments introduce new carbon pricing
instruments
Regulations around unconventional gas
► New restrictions on fracking and other
unconventional drilling techniques

13. Page 13
Scenario 3 Renewable revolution: all variables move in the same direction to enable a very
balanced energy mix, with almost a 50:50 split between fossil fuels and renewables
Renewable
revolution
Sustainability preferences
► Consumers demand green power from
suppliers and prefer eco-friendly
transportation
Overall
► On track to meet the 2oC climate change target
► Peak oil realized
► Decentralized power networks become costly to operate
which may impact both energy affordability and security of
supply
Utilities
► Shift towards self-generation and peer-to-peer
power trading erodes traditional utility asset base
► New competition from customer-centric
organizations like Amazon, Google
Oil & Gas
► Significant amount of stranded assets due to low
hydrocarbon demand
► Stringent regulations to limit release and flaring of
harmful gases force change in strategy; steep learning
curve for O&G companies
► Substantial capex devoted to renewable energy
Government
Consumers
Technology
Renewable costs competitiveness
► Wind energy costs fall 10%-26%; solar 48%-70%
► High CO2 prices raise LCOEs of conventional energy
EV uptake
► Stringent fuel-economy and emissions regulations
► 200m EVs worldwide by 2030
Energy efficiency
► $35tr investments in efficiency improvements
► ~40% more efficient electric motor-driven systems
Decarbonization policies
► New stringent climate change policies
► Fossil fuel subsidy ends globally except Middle East
► $100b/yr decarbonisation aid for emerging markets
Carbon trading
► All industrialized countries adopt carbon trading
► Carbon markets mature with interlinked prices
Regulations around unconventional gas
► Fracking banned internationally

14. Page 14
Energy companies should watch for signposts in the next five years as indicators of which
of the three scenarios is becoming dominant
Energy mix forecasts scenario spectrum
► Carbon prices remain low around $20/t -
$30/t
► Oil prices remain volatile
► Other governments follow the US in
abandoning Paris agreement
► New centers of demand for hydrocarbons
emerge
► Carbon prices rise to $30/t – $40/t by 2020
► S&P Global Clean Energy Index outperforms S&P
Global 1200 Energy index
► Impairments of fossil-fuel based generation assets
rise
► Breakthrough in EV and battery technology
► Battery pack prices fall below $100/KWh
► Carbon prices incentivize development of
CCS
► Governments ban some least-efficient
energy appliances
► Feed-in-tariffs for renewables fall rapidly
► Growing instances of timelines being set by
countries for bans on internal combustion
vehicles

15. Page 15
Section 3: Considerations for the future energy landscape

16. Page 16
Energy companies will determine the energy mix of the future by making strategic
decisions that address questions around policy enforcement, technological advancements
and consumer preferences
► Will renewable technologies maintain their steep
learning curve?
► Will battery efficiency improve enough to make
EVs competitive?
► When will we be able to install solar panels in a
ubiquitous way?
► Will new technologies be able to make fracking
clean and safe?
► Will other governments follow the US and
pull out of the Paris agreement?
► For how long will the governments provide
subsidies for renewables?
► Will governments make timely and sufficient
grid investments to support renewables?
► How will O&G exporters react to the clear
energy evolution?
► Will consumers accept a premium tariff
for clean energy?
► Will consumers make low carbon
investments even if the ROI is not
clear?
► Will drivers get used to taking half an
hour instead of five minutes to “fill”
their car?
► Will consumers start rejecting products
as they become environmentally
aware?
Technology
Government
Consumer

17. Page 17
Energy companies should assess their readiness for each of the future scenarios by
asking the right questions to help drive their preferred outcome
► Decrease carbon footprint while
growing
► Invest in technologies to enable
cleaner power from fossil-fuels
► Modify hydrocarbon portfolio in
favor of gas/LNG
► Identify suitable opportunities in
renewables
► Modify portfolio to accommodate
renewable energy
► Develop and/or acquire new
capabilities
► Revamp portfolio by exiting
hydrocarbon business
► Implement organizational change
► Explore new retail models to
supply electricity in a
decentralized world
► Develop and/or acquire new
capabilities
Hydrocarbon Heavy
Electric Evolution
Renewable Revolution
How ready are you
for the new energy
future?
Business Process
and Technology
► Adapt existing
processes or
revamp company?
► Are you properly
organized for new
business models?
People and Culture
► Are you recruiting
talent with the
right mindset?
► Are you properly
incentivized?
Branding and
Reputation
► How to create
sustainable
competitive
advantage?
Capital Allocation
► Where are the best
returns likely to be
on the energy
value chain?
Assess operations and
business model
Understand the changes
required
Define long-term targets
Develop long-term plans
Ask the right questions

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