 Good afternoon everybody. My name is Alex White. I have had the privilege of chairing sessions here in the past in the energy and climate space category and I've always enjoyed it but I stand before you today at a different category because I'm honored to have been recently appointed as Director General here at the Institute and this is actually my first event so it's as I said a great honor and privilege for me to have been appointed to this post and very much looking forward to working with you all and hearing your insights and seeing you at our events and having your input and responses to the excellent research that we produce here at the Institute and generally collaborating with you in the important work of facilitating debate, informed debate and discussion on critical questions affecting Ireland in the world. So our agenda today is obviously energy and but we have a whole range of areas that we take a close interest in as you will know probably better than I and I'm kind of in a bit of a learning curve myself in my first couple of weeks so as I've been saying to people you have to just be a bit kind to me and realize that you probably know an awful lot more about what happens here than I do but I expect in the coming weeks that that will change so great to be here and great to have this challenge. So my second task then is to principle task is to welcome you to this IEA webinar seminar our first of 2023 it's a fully in-person event which we're pleased to be able to facilitate and we're delighted to be joined this afternoon by Harry Vamendaven who's the senior vice president and regional director for UK and Ireland of energy systems at DNV the gentleman right here beside me because we have two guests as you can see and his colleague Frank Kettelars who's operations manager UK and Ireland energies for in the energy systems section of DNV and they have both been very generous to come and visit us here at the IEA this afternoon speak to us and engage with us and you're both very welcome I look forward to hearing from you. Just a quick word about DNV an independent expert as you know in assurance and risk management been in operation since 1864 and are the world's leading classification society as well as being a recognized advisor to the maritime industry. DNV deliver world-round testing certification and technical advisory services to the energy value chain including in the area of renewables oil and gas and energy management so Harry and Frank are going to speak to us for about 20 or 20 minutes or so each and then we will go to the Q&A with our audience and I'm going to now just say a few words about each of our speakers I'll go to introduce them both together because they're going to take over and hand over to each other so that I won't be intervening again once Harry has finished. Harry Vamadevan has 30 years experience in leadership positions he currently heads a 700 strong team assisting customers to make the transition to a decarbonized energy future. He's currently head of the energy systems operation as I mentioned in the UK and Ireland and is also a chairperson of all of DNV's UK entities. He's an authority on the complex facets of the whole systems approach to the energy transition since joining DNV has held senior management roles in the maritime oil and gas and more recently the combined oil and gas and alternative energy businesses. Frank Kettler-Arts is currently the operations manager for the DNV energy systems operations in the UK and Ireland he oversees operations across the whole energy space covering renewables offshore and onshore oil and gas production and gas transmission and distribution systems. In his previous role he was director for oil and gas operations for DNV in Region Americas based in DNV's Houston office with the responsibility for O&G operations in the US, Canada, Mexico, Brazil and Trinidad and Tobago. These operations covered verification and advisory work for offshore and onshore operations with a focus on safety and regulatory compliance. So as you can see as you can hear we have two highly experienced and distinguished speakers with us this afternoon they're going to do a double act so I think what I'm going to do I'm going to start by again welcoming both speakers Harry and Frank and hand over in the first instance I think to you Harry please welcome the two our two guests. Thank you very much Alex and I have to start by actually congratulating you as I suspect you've been congratulated quite a lot for the next few days and weeks. I have to say also I think DNV has a really good comms department because they wrote very nice bios and shared them with you for Frank and myself. This is our second collaboration with the IAEA. I spoke at the Guildhall last year at a fabulous event which I have to say and as you can imagine Frank and I speak at various different events but I've got to say the event that was organized by ESB and IAEA was fantastic which is why I was really pleased to continue that relationship. For those who've saw me there I very rarely stand behind a podium because I like to kind of move around a little bit and engage which can be a bit of a pain for the cameraman but here I will because there's no cameraman I will try to stay in the same place for the recording. Energy transition. DNV's background is in energy and it was in shipping and oil and gas and the traditional forms and then for the last 20 years it's been in renewables and power grids and trying to balance it and in today's world and I'll just click this oh sorry you can see you know it's easy to be pretty pessimistic yeah between war in Europe for the first time in how long the resulting energy crisis cost of living crisis inflation uh before you even start about all the geopolitics that are no doubt in this room there are many many people who can understand whether it's China in the US and then in amongst all of this you've got blocks of countries like the European Union like the US with its strength starting to exert its influence in how it wants its energy policy to evolve and then on top of all of that you can come to the UK and pretty much be sure there'll be a strike going on right now. So you put all of that picture together and it's a pretty depressing place. On the other hand all of that matters very little compared to the number one challenge climate change and energy transition and it's really important not to lose sight of that and actually like all good crises within all of these crises actually there are real opportunities and that's really DNV's a 150 year old we're owned by a foundation in Norway and we're incredibly optimistic always when we look at technology and the ability for governments and businesses to work together to really make those change and we genuinely believe the transformation can happen but more importantly it is happening um I'm just gonna ask Frank to say a word because in addition to all the things you heard about Frank he's actually been the project manager for our energy transition outlook report he's one of the main authors and he understands a lot about the detail because there's one really important aspect to what we do this is not a scenario this is our view most likely view of how the world Europe and the UK will develop based on things like levelized cost of energy policy statements all of these things interacting Frank a few more words or have I described it already then the stuff I was going to say but but just yeah to say no so even we've been actually working the last year very much to try and make a more granular focus look at the UK specific but really building on the work we've been doing with a global outlook so this DNV has been doing this global ETR outlook for the last six years we first time did it in 2017 and very much as Harry said looking at how the energy system will develop over the next 25 to 30 years and very much also so we're looking at the long term but as Harry mentioned just want to say a bit more about that it's we're looking at sort of a single scenario which in our view based on assumptions we're making and I'll say a bit more about when we do a deep dive later on the UK the assumptions we're making what does that mean in terms of what's the most likely way to set an energy system will work rather than saying we're taking a worst-case scenario a best-case scenario and something in the middle also rather than saying we will have a desirable net zero future and how do we get there so we're very much so taking the other approach saying based on the technology we have based on the assumptions we we are aware of today how will the system develop and I say and it would say also DNV technology company that's really I think where we have a lot of knowledge we have we base this in general on what is going to happen to technology costs over time so in a way our model the way our model works is it takes decision on applying or investing in new technologies based on technology costs and also in there of course we very much want to reflect that as call as you install more of a certain technology costs will come down so some pretty good correlations around that which are reflected in the model so at heart we're trying to say based on cost well how will the system develop on the other hand we also want to reflect some of the key ambitions targets and expectations in the short term the commitments people are making on under the Paris agreement how would that reflect our model and and also ways also some of the things we know in the near future in terms of behavioral change that we've seen for example after COVID changes in travel behavior changes in working environment where do people work so all these things we're trying to add to the main thing still looking at the cost picture and I say a bit more later how we approach this when we actually look at the deep dive but Harry will also take you a sort of a high level view what's happened based on this approach what do we see for the world and what do we see for Europe and then I will do at the end more of a deep dive on the UK and at that stage as well because I'm showing quite a few charts and it would be quite nice if you have questions just interrupt we have time for that and I always found I've been presenting this quite a few times now and I was an Aberdeen last week I think just getting some questions and maybe discussion going is very good so I'll finish off the after Harry's global view to say a bit more what we think will happen in the UK thank you and my apologies to AV support I didn't tell you we're going to do that little double act so you all know about the Trilemma clean affordable reliable energy but in today's world with energy independence energy security you can barely get a headline in which a country is trying to figure out energy strategy versus a global view and a national view but the difficulty and this is this is a chart that every single one of you will know in fact almost every forecast says that we will miss the targets for limiting it to 1.5 degrees and we will miss it by a very very long way and in fact we'll be close to two degrees by 2050 and we'll be way past two degrees by the end end of the century so the background picture can be again another fairly bleak view as to the current state of the world but there is a transition happening and this is I think one of the really important things where granularity matters and that there is an energy transition taking place and it is a very significant transition it's not enough as we can show you by the impact on on on the degrees warming of the world but there is one happening and it's very significant and there's today's energy system is 80-20 and I'm sure you you'll hear that from many many speakers so 80 fossil fuels 20 percent non-fossil fuels and in our most likely scenario today we see for the first time actually was last year but also getting a little bit further this year is that non-fossil fuels is 51 percent that's a significant change that's one percent a year changing the ratio from 80-20 to get you to 50-50 and I'll come back to the net zero scenario and what's needed but and it's very very simple math so it's important to recognize and I don't think it's talked enough that there is an energy transition happening and it is very significant in relative terms it's just not enough for net zero that's the challenge so the bulk of that change from 80-20 to 50-50 is a story of electrification and the greening of electrification electrification and 70 percent of that change comes from this incredible statistics you'll see on this chart and that's around solar solar plus solar pv plus solar and storage onshore wind and offshore wind and what you're currently seeing and we believe this is the most likely scenario is an 18 fold increase in solar and storage from and because it's starting from a slightly higher base a six-fold increase which is actually a lot it's just not a lot when you compare it to the increase in solar that you see and then offshore wind from a very very low base today a 40 fold increase and that's over the next 30 years and that's a phenomenal expansion of renewables and that is driving that greening of electrification across the world but that gives you a specific set of challenges and as much as you know we're optimistic about this change there are a number of challenges coming through okay and if we're really going to ramp up a 40 fold increase in offshore wind government and I think the IIEA will know that the policy and the role of government has a massive a massive role if you look today at scott wind Celtic seas you've got a total of 29 wind projects not a single one has got FID all sitting at the permitting stage permitting around the world is incredibly challenging globally we think it's something like five to seven years to bring a wind farm online yeah if you think about the 2030 targets and even if you approve it today you're looking at another seven years so there's a huge amount of inertia in that whole planning and permitting stage and right now if you talk to today's projects all of today's projects are struggling on supply chain and then you start to do the maths of the expansion then you start to overlay regional and country specific strategies yeah so you've got a massive increase in offshore wind east asia yeah japan career vietnam all a lot of offshore wind then you start to look at the european policies and then you look at the inflation reduction act you can imagine how individual countries are really going to struggle to prioritize their projects and even if they prioritize these projects to secure supply chain there simply will not be a strong enough supply chain to match that expansion and the other complication in today you go and talk to most of the supply chain behind offshore wind they're not making any money you look at the three biggest wind turbine manufacturers yeah and they're struggling to make money so if you look at that picture it's a picture in which massive growth is going to be incredibly limited coming from a background in business i've always thought if business understands the opportunity and has a good regulatory framework it will make investment decisions it will make investment decisions dnv's invested heavily in hydrogen research from six years ago because we saw the pattern but somewhere along the line we're not generating enough investment into the supply chain and certain countries of the world are going to lose out when the regions the big regions start to exert their buying power the grid i'm going to come back specifically to talk about the grid because i would say from a uk perspective one of the biggest challenges we see is not developing the wind farms even though i've told you it's a very very big challenge it's hooking them up to the grid is the even bigger challenge in terms of that because of the number of interfaces and i'll come back to that and then finally what's really interesting is we have a history from energy predominantly from the oil and gas side of massive ramp up offshore yeah so the knowledge is there and we believe actually there's a lot more work can be done on both the turbine or infrastructure to go offshore and also de-risking offshore projects because that's what many many companies including dnv as you probably work out from our assurance background de-risking projects is what we do for a living there's no doubt that we can match that expansion and support big rollout of offshore wind simply because of the knowledge that exists and the north sees a great example of where you've got a lot of that knowledge solar a very similar set of challenges if slightly different actually at the event i attended back in october there was a fantastic talk around the materials and components that are behind the supply chain and one of the biggest challenges for solar is the transparency of that supply chain most of the components and materials are actually coming from conflict zones yeah and therefore if you imagine in today's funding exercises the role of esg and transparency and then you come across a supply chain that is creaking you're screaming for materials for solar panels and all the connectivity and then what do you do with the transparency of the supply chain when you don't have many options in that supply chain as to where you're going to buy from so really significant issues on transparency of supply chain on the on the solar projects and especially on the really really big projects almost all of the projects that we see today are late again predominantly because of logistics simply not being able to get all the components and move them to site fast enough grid again becomes the achilles heel of very much the renewables rollout is the hookup and the movement of those electrons to where the demand exists and then finally and this is an interesting feedback from dealing with a lot of the developers really complaining about the market and the setup for how they bid for projects and essentially it's almost like a reverse auction and a race to the bottom which then means they don't necessarily have the money to invest in the growth of those supply chains so you've got some really competing agendas that is leading to really a lot of challenges in the ability not just to permit and approve those projects but then to actually buy the equipment and get the construction phase and then the hookup to the grid done so huge amounts of ambition for the growth of renewables but really really challenged in terms of delivery and then I always say if the front if there's a front door to the energy transition the grid is the key apps without question yeah and there are again I'd like to highlight four key areas and my background is engineering chemical engineering supply and demand yeah and generally the energy sectors have been based on reasonably plentiful supply managing variable demand and that's what most of today's electricity systems have been based on the future electricity grid as you get increased renewables penetration and you'll understand that in Ireland much more variability of supply and variability of demand if you're going to solve a problem to do both at the same time is incredibly hard and you're going to have to have a huge investment in grids that can really manage both variability at both ends and then we're talking in a sector that over the last 30 years has not had massive investments in capacity in fact completely the alternative years of under investment yeah because these are generally heavily regulated a lot of price control mechanisms so the actual infrastructure a in just capacity and b with new technologies just hasn't been done so trying to accelerate that is a big big challenge and then in terms of permitting yeah I mean you try to get a pylon approved in the southeast of England I'm sure you have the same challenges here in Ireland trying to then move that electricity around everyone would like a buried cable but we understand the cost of a buried cable versus surface transmission so you've got huge challenges in terms of planning and policy to allow these grids to potentially double and triple and in the in our global analysis we're talking about a tripling of the grid and that is just a huge huge undertaking in areas that have traditionally been very under invested and also a big connectivity to and this is something you know I was discussing with Barry beforehand is the interaction with society yeah and understanding that there is a there is decisions to be made with the locations of renewables projects I mean I've had a background in renewables shipping and in oil and gas and I'm always astonished that we can allow shale gas onshore in the UK but we wouldn't like some more onshore wind or solar panels that just seems completely contradictory whether you agree with shale or whether you don't agree with shale to push that forward without necessarily an onshore agenda for wind and solar just seems completely contradictory so policy is real challenge behind the scenes as well and then finally the complexity of the number of stakeholders when you come onshore with the grid so again traditional energy projects are relatively easily developed when they're bilateral you develop some energy and then you sell it to someone who needs it and then you have some investors today you've got a much more circular group of stakeholders much more connected also to the public and just managing those all those stakeholders and all those interfaces is actually incredibly challenging but the end result and this is our overall global forecast is you know the end result is not enough and there is actually a very very significant gap the net zero pathway is not just about being zero for 2050 it's actually about negative emissions to be able to offset because there are always going to be significant sectors that will not be able to abate the CO2 and if you look at our most likely forecast where we see 2.2 degrees by the end of the century and I've seen other other scenarios where that's considered optimistic 2.2 degrees you'll see 2.3 2.5 degrees and our view of just under 2 degrees at 2050 again you'll see scenarios for 2050 presented by others crossing the 2 degrees so what needs to be done is actually in mass really really simple and that's why I emphasize the 80-20 to 50-50 is a one percent change a year if you want to flip it to 80-20 so 80 percent non-fossil fuels 20 percent fossil fuel that takes you to net zero so double what we think can could happen yeah double it so you get a 2 percent change per year for 30 years and then you get net zero but as you've probably worked out from what I've said so far just delivering on the most likely scenario we think is going to be hard doubling it does at the moment feel like a stretch too far a word about hydrogen which features in almost every net zero discussion now and actually has an incredibly high profile and the message from us is that you electrify everything you can electrify if you can yeah yes there are some issues to do with resilience and we'll come on to that but as a general rule why because hydrogen is expensive it's inefficient and it's not easy to move around okay and that's why we haven't done it so far so it's an incredibly challenging but it is essential because we will not be able to electrify everything that's clear plus an energy system based exclusively on the electron without a molecule you'll struggle to see resilience yeah and that's the other challenge and that's one of the hidden benefits of a gas is actually things like storage and line pack where you slightly over pressure you run at a higher pressure because then you can build it up and I worked in the 90s where we could supply a third of the supply for the UK just from sorry a third of the southern UK's gas needs just from line pack from the North Sea we could run for half a day just from line pack gas gives you incredible resilience in an energy system as we have increased renewables penetration so we will lose that resilience so how do we see hydrogen coming um yeah there's no there's no net zero there's no meeting the palace agreement without it um but actually a relatively small amount of uptake in that scenario that we showed you that gets to 50-50 to get to net zero it's triple this number triple this amount of hydrogen um and you'll use it predominantly the manufacturing sector because that's the hardest to abate yeah um there's a lot of discussion on where you can use hydrogen for other places but really the one area is incredibly hard to abate is manufacturing and that's really where you should start in terms of transportation especially uh we do see other derivatives and obviously ammonia and I know methanol's talked about at all well the methanol still produces CO2 when you burn it ammonia's better but better in inverted commas it's also another very challenging commodity to move around um how do you build a hydrogen economy well again you're trying to create supply and demand at the same time those are you know it's an incredibly challenging process in the energy sector to create supply and a demand at the same time yeah um so yes green hydrogen is ideal but right now you're trying to electrify everything you can electrify so there's a there's um so there's a huge demand for electricity that is hard to then um basically divert to green hydrogen so hence we see a role for blue hydrogen over the next few decades in helping establish a hydrogen market plus has the other upside of decarbonizing oil and gas which i think is also an important element but by 2050 we uh we see green hydrogen dominating and then finally you'll see hydrogen very local because it's expensive to transport uh within a country or between countries but once you start to look at intercontinental it has to be a derivative and certainly ammonia is looking like a better bet than methanol but a lot of work has to be done to make that a reality so um just quickly to maybe talk a little bit about Europe and if we're going to get to net zero different regions will have to take greater responsibility and Europe will have to go to net zero before 2050 if the world is going to get to net zero by 2050 and in fact 2045 is really when Europe will have to hit net zero to support those other regions that are inevitably going to be a little bit further behind so what's happening in Europe well quite a lot has been happening in Europe and i'm sure everyone in this room pays a lot of attention to that whether it's the fit for 55 which is 55 reduction by 2030 whether it's the EU green deal um and whether it's the latest one which has just gone off the top of my head uh repow repow Europe um that's the problem without having notes um every now and then i do get a blank so those three um and Europe has actually done a huge amount um around trying to get this whole scaling up renewables whilst you look at the taxonomy still trying to recognize some of the existing um gas as a transition but one of the things i think is worth highlighting that i certainly don't think about is talked enough about in the UK and many regions of the world is the best way to have less energy is to be more efficient yeah and then you have less demand and a 32.5 improvement by 20 by 2030 is a great target that Europe has selected that very few countries and regions now that has to be translated to national targets but i think the emphasis on energy efficiency is a fantastic one and not really replicated in many many nations or regions um and then a couple of other declarations that came out last year um closely aligned to shipping Esberg and Marrenberg very much about scale and collaboration scale for the offshore wind linked with hydrogen lot of energy islands and you can go you can go to complete you know long presentations about the creation of energy islands Denmark my boss is Danish very big and energy islands and trying to become the sort of nexus for where you get offshore wind and you get green hydrogen but at scale at gigawatts significant investment um but also a huge amount of collaboration on the shipping side if you're going to produce the port infrastructure for decarbonization both in terms of the ports itself and i know there's a few representative imports but also how you get hydrogen or ammonia to those ports is going to require a lot of infrastructure so you're seeing a lot around collaboration and around scale and really it's going to need that kind of effort if we're really going to make a difference and then finally the backdrop remains high prices if there's one frustration is that today's price is not based on the cost of energy and it's one of the real problems we have today if renewables is the lowest cost of energy but it doesn't feel like that to the general public so if we keep saying it and they don't keep seeing it well then they start to wonder if we really know what we're talking about yeah and this difference between price and cost is a real problem today yeah um and then also other parts of the world i was in Singapore at a conference beforehand yes they understand the war but really they're busy saying you guys really messed up the lng prices for us we were transitioning to gas now that's going to that's going to go further behind because you're hoovering up all the lng and we had a nice regasification facility we were thinking of for this region but actually someone in europe came and doubled it doubled the price and took it away so the rest of the world is struggling from this whole europe has the buying power to really go and get its energy needs where many other parts of the world don't so they will remain on coal as a result of that okay so this short-term impact may be manageable in the europe but there'll be many other places in the world feeling those consequences and then ultimately europe will fall short yes again a significant energy transition and by 2030 it won't quite be fit for 55 we think it will be close 50 percent reduction by 2030 and about an 80 percent reduction by 2050 so europe is doing many of the right things and i think the focus of energy efficiency the collaboration the scale the amount of incentives coming through from repower and from those other other policies is good they need translation they need translation to country targets and that i think is a challenge and that's perhaps where the inflation reduction act is advantageous because it's already plugged into the us and we already see it from the customers that are looking at they're turning their attention much more to the us mobilizing their resources and it's going to be a real challenge for individual countries in this fight for the supply chains and knowledge behind renewables okay you've heard enough from me and let frank talk a little bit about more granularity about the energy system in the uk okay that's what i think i wanted to get try and get across bit now in this bit on the uk is to explain a bit more actually how we're approaching this sort of how we sort of do the forecast and how we actually use those to actually make a bit more granular more specific to a country which is that we spend a year on that because it's one thing to say something about europe or the world it's actually a lot more difficult once you start putting it down to exactly what people trying to do in the country so let me just try and do that i'll say very happy to take questions as we go along because it gets a bit more now about our assumptions and how we actually how we develop things so if you any questions on whether you if you don't agree or if you would like to now i'm just trying to just get that one there yes okay just quickly back to this slide i just wanted to say something here specifically about the uk so the one thing the assessment we're doing here for the uk is a standalone assessment look at uk but that's if i get the uk is part of the global model of course the uk has a link to the global energy system through things like technology costs the energy resources that are available and all the economic parameters of course costs like carbon prices the various of technology costs so very much important that we don't lose track of that and don't look the uk as a sort of as a standalone thing in in the world but on the other hand we have for the uk and of course quite more granularity on certain things that we do know are going to happen for example in the policy trends to phase out internal combustion engines in the uk for example some clear commitment to a number of industrial clusters to start producing hydrogen and carbon capture type facilities to sort to build that sort of i would say experience and market as well and also things one thing i think it's also slightly outside the cost picture so the the whole thing around nuclear nuclear is always very much more of a policy decision so for those areas we do say well what what does the uk government expect so we look at the things we know about so additional capacities for example in hinkley in sizable in the uk and maybe some assumptions about what will happen around things like small modular reactors so some things we actually are moving away a little bit and from just purely looking at the cost point of view but for the majority we actually are just trying to see what will happen with the uk type system in terms of how we'll actually develop in the uk itself so but also just to expand explain a bit more about our approach how we do this so how do we do our forecasts we actually start very much at the demand side so we're basically looking at things like GDP growth population growth but also how would the actually use of energy changes over time in all the various sectors that all combined give you an idea of what will the demand look like then we look at what does it need on the primary side what energy do you need to actually on the primary side to supply to meet the demand so then again it's based on things what technologies are available what is already there in terms of infrastructure and what resources are available for example in the UK what sort of can you be produced domestically what needs to be imported once you know the demand supply picture you start then looking at how what infrastructure will i need in order to deliver it how do i generate the energy and how do i deliver it to the customer so what do you need in between to make it work again based on what you already know what infrastructure is there what you need to sort of supply and in that way work out what your overall infrastructure should look like and then we simply look at what does it mean in terms of investment very much focused on capex we straight away a bit away from op-ex more difficult to define and in general trying to get more idea of the capex investment required and also we have made a stab at trying to understand what will it mean actually for the consumer in the end what actually does this mean for the average household in the UK in terms of energy costs as a result of this transition and once of course we have that forecast and we can simply looking at what does that mean in terms of transitions doing with the targets yes or no and what can we do about it so that's sort of our approach to this forecasting for our global model but also for the UK back there again so start on on the demand side so what we're actually seeing so in the UK specifically that so despite growth in both GDP about 1.3 percent a year between now in 2050 and population so still the UK will grow by 40 by 4 percent not 40 by 4 percent by 2050 we actually see in the UK an energy demand reduction of nearly 25 percent so a quarter reduction of demand even though we're still seeing significant growth so that's that so that's and that's mainly is driven through the large-scale electrification in general electrification makes things more efficient and we see actually reduction in demand because of that improvement and we see it across all sectors it's not just just looking at buildings or a transport across all sectors in the UK the other thing we're seeing here's this whole shift in terms of how because this is actually demand in the way it's delivered to the customer so what carriers are actually taking the demand to the customers so you can see here that we actually see quite a big shift today so three-quarters of all energy is supplied to customers in the form of fossil fuels oil and gas so gas mainly really for heating homes and in industrial use oils liquids very much for the transport system so you can see that even though we're talking a lot about a lot of renewables in electricity the electricity is only providing in total about 18 percent of the total electricity to the customer so yes it's important to get started on that but let's not forget there's still 80 percent of our also 75 percent of our energy is still delivered directly in terms of fossil fuels and that's all of course unabated burnt in-houses burnt in your cars so quite a big sort of thing to do change but we're looking forward though as a result of the electrification we see that very much then changing that by by 2050 nearly half of all the demand is actually suddenly delivered in terms of electricity so that's mainly electrification of homes using heat pumps we're in our forecast about half of all the homes in the UK will be using heat pumps by 2050 and the other bit is of course electrification of transport especially on the passenger side seeing nearly a full domination of EVs by 2050 so that is very much the growth of the electricity looking forward you can still see there's still a third of all energy is still fossil fuels by 2050 so we're still a third of all homes in the UK so we'll be burning natural gas in 2050 even with all the change we're trying to make and still we see a lot of burning of fossil fuels around heavy transport and aviation the more difficult to abate things and later on when we talk about emissions we'll talk a bit more how that can be addressed and then we still see and the other thing to mention here in the UK actually only a limit based on costs without any additional subsidies only about 10 percent of energy is delivered in the form of hydrogen in the UK by 2050 and the majority that is not in houses actually use the industry as Harry mentioned mainly difficult to abate sectors to support industry manufacturing and a little bit in terms of low carbon fuels as well so quite a sort of a big shift but still a lot of fossil fuels in the end makes them so then let's start looking at the actual supply side of things in terms in order to deliver this demand what sort of primary fuels do you need to make this happen and here again of course you see a similar trend in general of course supply means demand but be aware as well of course quite a bit of losses in the system the transformation of of fossil fuels to electricity there's losses in there so you see there is a certain amount of loss in the system when you compare the supply against demand but you can see here this this big shift again in terms of that today 80 percent fossil fuels as primary supply to the UK and 20 percent low carbon fuels when we look at 2050 that will actually go to a 70-20 shift so we see a very big reduction there in terms of where our primary supplies are coming from interesting to see though when you look at the fossil fuel side of things which is 80 percent there is also the change is actually relatively slow still we still think by our forecast shows that early 2030s still nearly over 70 percent of all primary primary fuels in the UK are still fossil fuels so it takes a long time and the majority of those fuels are actually still produced in the UK so from the UK's point of view security supply domestic oil and gas production is still a big part I guess of the old security supply picture we're looking at but over time we see it reducing and then really so towards the end starting very much 70 percent low carbon with a lot of that of course coming from variable renewables which is very much in solar and wind so let's then look a little bit more at sort of the electrification electrification side of things so as Harry mentioned I mean the UK in some ways some things are more extreme than looking at a global level and some things look quite similar electricity amount for the UK about two and a half times increase of electricity generation in the UK between now and 2050 so today UK generates about 300 terawatt hours a year of electricity we'll see they're going to close to 800 terawatt hours by by 2050 but as you can see as well it's greening in the UK so today so as I say there's a lot of it been achieved the electricity supply 58 percent of now from low carbon fuels today already that will go to nearly 96 percent so very a very big change in terms of how electricity is generated in the UK and the main reason for that of course the extraordinary growth of variable renewables which is solar and wind which is about sevenfold increase from today going to 2050 and you still see there's a bit of nuclear there and also bioenergy nuclear and bioenergy providing some baseload but in terms of if you look today so gas fired power generation is sort of nearly 42 percent of the overall supply mix coming down to only 4 percent and you and one of the things also we've looked at a bit is how green is this sorry how whether this electricity supply is decarbonized the UK tries to decarbonize the full electricity system by 2035 based on what we're seeing here that's going to be not really achieved we we see that sort of carbon capture facilities on power generation will start sort of in the late 20th in the early sorry towards 2030 and by 2035 only about a quarter of all gas turbines in the UK will have carbon capture facilities so it will take a lot longer till about 2045 to fully decarbonize it so it takes time to make these changes happening and of course there is a big other thing that Harry mentioned I want to say a bit more about that here specific for the UK it's just get a bit more of a granular picture of that the whole issue around the variability of supply so on this on this slide a lot of things in there but this mainly looks at what happens to the variability electricity supply over time and what you need to do on the others when you have variable supply how do you meet that in terms of flexibility in your system how do you manage the variability so what you see today in 2020 when you look at the average electricity demand in the UK on average the variability across the years were plus minus 12 percent this is sort of a very standard deviation 12 percent and that's mainly driven by demand variability so that's day night swings it's summer versus winter so at 12 percent and if you look at in real terms that's about a swing of plus minus five gigawatt of flexibility you have to build in and today in the UK that's nearly all provided by gas turbine driven compressors that you can start up quickly and ramp up and down as required so dispatchable power and that is very important to provide that flexibility going forward we start adding then the variability really very much around the supply side so you can see there the variability is plus minus 12 percent is actually nearly doubling to 25 percent and also in absolute terms because of course the overall average capacity goes by 90 gigawatt it's actually a plus minus 20 gigawatt swing so you have plus minus five today plus minus 20 gigawatt swing in 25th so a huge additional burden on on actually on the system to provide flexibility and as you can see there's sort of the gray bit there on thermal generation which is dispatchable power is still a key part for that so you will have to make sure that you have some form of dispatchable power available to actually make this happen and it's dispatchable fire of course it could be gas fire turbines but by that time it could be gas fired with carbon capture facilities it could be hydrogen fire it could be bioenergy fire so it could be low carbon but you need some sort of part of the system that you can swing turn up and switch off as when required but it's not enough you can only provide about that then you really other things so you see a more reliance on import export so connectors to europe that you actually are importing exporting when you have not enough you export when you have too much when too much wind and solar you export it and then the other keep the other two parts of the storage and storage we need a lot of utility scale battery storage we have say about 190 gigawatt hour of storage by 2050 and also have this whole power to hydrogen p2h systems so when you have too much wind produce hydrogen and use that and sort of have a way to to to to as backup during low supply points one thing to mention here and we haven't looked at it so much as discussions we're currently having with some of the great operators in the UK it's all issue on demand response using smart electricity systems to actually try and shift your demand to low demand periods for example tonight in the UK I think yesterday people were actually being paid I think if you could switch off your electricity between four and six that sort of thing but do it at a larger scale and I think there's a lot of so maybe some of this 25% could be simply managed by having a smart demand response system so we're actually having some discussions now how can we reflect that in our model to make sure that we actually have those sort of systems it will require investment but you have to have additional smart systems but to to make sure that this will happen so you can see it becomes a very complex system to actually manage in terms of flexibility going forward with many different parts of to the overall flexibility system so what does it look like in terms of actually numbers then so here we're trying to show for the UK specifically what you need in terms of generation capacity today in the UK total about 100 gigawatt of electricity generation capacity across all the very sources you can see the dark gray line there which is basically gas turbine it's the biggest one at the moment so providing about 40 gig of capacity there but what you see going forward it's a significant additional capacity so today 100 gigawatt we forecast another additional 180 gigawatt of capacities required by 2050 in order to provide all that or to generate electricity you need and that's very much then dominated by variable renewable by 90% of the additional capacity is all variable renewables as you can see there as well dominated very much by offshore wind the other thing I always want to get people out as well these are big capacities but what you also have to keep in mind is the actual a capacity factor of all of these these types of generation but you look at nuclear this it's pretty close to 85 90 percent online so you get when you install 100 gigawatt you get 90 gigawatt on average coming out offshore wind is all around it's currently about 40 percent might go to 50 percent solar 60 gigawatt only has about 13 percent capacity factor so you see 60 go over solar gives you not as much as you would expect when you look at these sort of charts so a lot of additional overcapacities to be installed to actually make sure you can meet the average demand of course that also has that an impact on that you sometimes far too much which you can hopefully export or use for other other purposes but you can sort of in addition then you also in order to actually transmit and distribute this electricity you need a lot of investment on on the grid side of things so we say a three-fold increase on the grid and it's not own so it's both transmission a lot of the new renewables that are being generated are in places like offshore Scotland need to be first transmitted back to the areas where you need it and then also you get a significant amount of additional distribution in all the big city centers so a lot of investment there in order to handle that throughput and as I mentioned before we actually will need also a significant amount additional battery storage so what does this mean then in terms of investment so we looked at all the investment around the energy system and we got many many different parts to that but looking at what happened in the past and what's looking looking forward so in the last 30 years on average the UK spent about 17 billion pounds a year on infrastructure spent for energy and 50 percent of that was developing offshore well mainly I would say offshore fossil fuel resources looking forward we see a number nearly doubling about 28 billion not exactly double but a significant increase and a shift away from fossil fuel 70 percent on renewables and grid systems less than 5 percent actually invested on the remaining fossil fuel resources in the UK so that's a big absolute increase but we also had to look across that whole period looking at what does this investment look like versus GDP and we actually see an average more or less stays relatively stable at 1 percent of GDP so that is in a way a slightly more positive picture so yes absolute terms a lot more but as part of as a percentage of GDP it's actually quite stable and that should and we see similar I mean it's a bigger number globally because more needs to be done in terms of the energy transition but we see a similar so stable thing at the global level as well so that's I think I would say a more positive view on the additional money we need that we actually can as a society should be able to afford it the other thing we looked at is the whole thing what does it mean then actually for spending for households household energy spending so we're looking at cost of electricity cost of things yeah what how do we what does it mean for the average household spend what we see here on average for the next two the idea is expectation next three to four years while we have the current crisis prices will stay high but very much once we get to sort of a more stable situation also with more renewables in the system we see a significant reduction in the average household spell actually more than half reduction of average energy spent in in each household in the UK a lot of that both link to transport your cars and also heating your homes so a lot of this sort of savings is around being having a more efficient system using less energy and overall the energy demand works 25% but also seeing continued reduction in electricity prices going forward after I would say the difficult crisis we're going through today we have time to let me just define looking back at what does this mean then in terms of our emissions so overall of course UK like the rest of the world I mean there's been a lot of progress has been made to actually reduce emissions by about 50 percent since 1990 but really based on this trajectory we would see that we would not meet the the targets under the Paris Agreement to try to get to 55 68 percent reduction and also by 2050 still having still emitting about 120 million tons a year of CO2 which is an 85 percent reduction but very much still seeing with emissions links to especially heating of homes and the transport aviation sector so we didn't say we're taking it back to the whole story around the energy dilemma security affordability and transition in some ways we're from a security point of view yes things are looking better we actually are seeing of course 95 percent of electricity is generated the mess from domestic low carbon resources and we're seeing a reducing reliance on sort of fossil fuel imports it's still some there but the trend reducing trend is there and should and should very much improve security supply affordability point of view yes less energy demand investments high investment but in line with GDP still relatively stable and also showing that household energy is household cost actually reducing but from a transition point of view it shows that purely looking at our cost I would say market lead transition we will not achieve yet zero and then it's clear so we need especially at the moment in the UK we need I think we probably some very clear early decisions especially I would say on things like how to heat your homes how are you going to how are you going to as a country try and resolve that and then have very clear business models roadmaps around that so so that we actually can incentivize this uptake of low carbon technologies so I'll leave it at that I saw I'm also running out of time I hear so so that's so that's I think take it from the globe pick it down to sort of the european level and very much our view is actually once you take a more granular it becomes more interesting because you can actually start looking at what is actually means in real investment decisions you have to take so currently we actually not talking to a lot of our stakeholders in the UK about this to get their sort of input on our assumptions see how we can sort of accommodate that and that's so thank you for your time so I'll hand it back to you