Transformation In Utilities and Energy Sector

1. This presentation is meant exclusively for clients of REV Partners & other authorized users. No part of it may be circulated, quoted or reproduced
for distribution, without prior written approval. The material was used during an oral presentation; it is not a complete record of the discussion.
Utilities Sector
Energy Transition & Transformation
(Part presentation)
Sep 2020

2. TABLE OF CONTENTS
The Traditional Electricity Value Chain Is Undergoing Transformation1
Utilities, Europe – Transformation Underway2

3. Utilities: Transformation Underway
Transformation along the Electricity Value Chain
Fuel Sourcing Generation Transmission & Distribution Supply
The Traditional Electricity Value Chain Is Undergoing Transformation
Illustrative

4. Utilities: Transformation Underway
Transformation along the Electricity Value Chain - Renewables
Site Scoping Generation
Transmission &
Distribution
Supply
The Transformation in the Electricity Value Chain Due To Renewables
Storage
Illustrative

5. Utilities: Transformation Underway
Key Drivers & Challenges (Partial List)
Source: *Biomass and Large Hydro would be exceptions – Biomass relies on combustion and Large Hydro projects have to be actively monitored owing to their size, complexity and topographical risks
Climate Change Mitigation
• The Paris Agreement
• Efforts focused on limiting temperature
increase to 1.5 degC, reducing GHG emissions
and preserving biodiversity
Energy Security
• Ensure energy security
• Renewable energy is relatively more secure
• Guard against key macro issues (e.g. energy
imports, volatility in energy markets, geo-
political challenges)
Increased Access To Energy
• Increase access to energy, especially for
disadvantaged areas
• Renewable Energy is not as dependent on
grid expansion (vs conventional generation)
Grid Integration
• Continuous challenges in grid balancing due
to high volumes of Variable Renewable
Energy
• Constant challenges of matching supply to
demand
• Storage technologies are a key
Cost Competitiveness
• Fossil fuel based technologies are mature and
currently more cost competitive; hence still an
attractive option for developing countries
• Renewable energy becoming more cost
competitive
Digital Transformation
• Utilize emergent technologies to
improve yields and distribution
effectiveness
Key Macro Drivers
Key Macro Challenges

6. Utilities: Transformation Underway
The Paris Agreement Is a Key Driver as well
Source: IRENA analysis (Note: All UNFCCC Parties )
The Paris Agreement Renewable Power Components In The First Round Of NDCs
• The Paris Agreement
- An agreement signed by members of the United
Nations Framework Convention on Climate Change
(UNFCCC)
• Aims
- The most significant of the three aims of Paris
Agreement is to “limit the rise in global temperatures to
well below 2 degC above pre-industrial levels and to
pursue efforts to limit temperature increase to 1.5
degC above preindustrial levels”
• Targets in NDCs: NDCs typically contain targets for:
1. Renewable Energy adoption
2. Increasing share of electricity in energy use
3. Energy efficiency gains
4. Afforestation, carbon sinks
5. Decarbonization of Industry, Transport and other
sectors

7. Utilities: Energy Transition Will lead to Significant Transformation
Targets for the Future: IRENA estimates on targets to be achieved to hold the “well below” 2 degC line
Source: Source: Global Energy Transformation: A roadmap to 2050, IRENA

8. Utilities: Energy Transition Will lead to Significant Transformation in Major Economies
NDCs and Renewable Energy Targets of Major Economies
Source: IRENA
Country NDC Target National Target
EU • Binding target of an at least 55% domestic reduction in
GHG emissions by 2030 compared to 1990
• NA
France • Same as EU • 32% gross final energy consumption from renewables
Germany • Same as EU • 65% Renewable Power by 2030
UK • Same as EU • 50% Renewables by 2030 (NIC has recommended setting this to 65%)
USA • Reduce emissions by 26-28% below 2005 levels by 2025 • Has various state level targets but no Federal Target
Brazil • Reduce emissions by 37-43% below 2005 levels by 2025 • Increase share of biofuels to 18% in energy mix by 2030
• Renewable energy (other than Hydro) in total energy mix to 28- 33% by
2030
• Renewable energy (other than Hydro) in power supply to 23% by 2030
• Achieving 10% efficiency gains in electricity sector by 2030
China • Peak CO2 emissions by 2030
• Lower emissions per unit of GDP by 60-65% from 2005
level
• Increase share of Renewables to 35% of electricity consumption
• Increase share of non fossil fuels in Primary Energy Consumption to 20%
• 200GW Wind and 100GW Solar by 2020
India • Reduce emissions by 33-35% by 2030 from 2005 level • 40% cumulative electric power installed capacity from non fossil fuel
based energy sources
• 175 GW Renewable Energy by 2022 (100 GW Solar, 60 GW Wind)
• 450 GW Renewable Energy by 2030
Australia • Reduce emissions by 26-28% below 2005 levels by 2030 • Renewable Energy Target Scheme: 23% electricity fm RE by 2020

9. TABLE OF CONTENTS
The Traditional Electricity Value Chain Is Undergoing Transformation1
Utilities, Europe – Transformation Underway2

10. Utilities: France
Industry under long-term transformation, leading to continued increase in share of renewables capacity
Source: IRENA 2020, REV Partners Analysis
Electricity Installed Capacity (MW)

11. Utilities: France
Among renewables, Solar & Wind increasing share and growing fastest
Source: IRENA 2020, REV Partners
Electricity Installed Capacity (MW)

12. Utilities: Germany
Significant transformation led to higher renewable capacity (vs non-renewable capacity)
Source: IRENA 2020, REV Partners
Electricity Installed Capacity (MW)

13. Utilities: Germany
Among renewables, Solar & Wind increasing share and growing fastest
Source: IRENA 2020, REV Partners
Electricity Installed Capacity (MW)

14. Utilities: Italy
Significant transformation of the installed electricity capacity; Renewable capacity ~2X in 2019 (vs 2010)
Source: IRENA 2020, REV Partners
Electricity Installed Capacity (MW)

15. Utilities: Italy
Solar & Wind increasing share and growing fastest
Electricity Installed Capacity (MW)

16. Utilities: Spain
~55k MW of Electricity Installed Capacity in 2019 (vs 42k MW in 2010)
Source: IRENA 2020, REV Partners
Electricity Installed Capacity (MW)

17. Utilities: Spain
Solar segment with highest capacity additions (>2.5x) in the last decade
Source: IRENA 2020, REV Partners
Electricity Installed Capacity (MW)

18. Utilities: UK
Significant transformation of Electricity Installed Capacity in the last decade; Over 5x growth in renewable capacity
Source: IRENA 2020, REV Partners
Electricity Installed Capacity (MW)

19. Utilities: UK
Solar (over 10x) and wind (over 4x) witnessed highest capacity additions in the last decade
Source: IRENA 2020, REV Partners
Electricity Installed Capacity (MW)

20. ACKNOWLEDGEMENT, THANKS, TERMS & CONDITIONS
We are indebted and grateful to various companies and sources that have been cited in the document for their data and insights. This report is not meant to be a substitute for
professional advice, and must not be relied upon as such without explicit, written consent. No representation or warranty (express or implied) is given as to the accuracy or completeness
of information contained in this publication. REV Partners, or its employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of anyone
acting in reliance on the information contained in this publication or for any decision based on it. If you would like to discuss the report, please contact the author.
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