Canadii Canada 2030 Canada in a Changing Global Energy Landscape DRAFT - fer discussion March 8, 2018 Lisle Polley Hortons Canada (Horizons a strategc foresight organization within the Pble Service Horizons, the Govenment of Canada or participating departments and agence,enema Table of Contents ecutive Summary. Ih non : eee The primary energy supply ofthe globe i shifting to elect... 7 Renewable-based electri is becoming cheaper than generation by oss fel... Etermality costing will acelrate the shift to renewables Renewables cn reduce distribution infrastructure costs. ‘Storage solutions are emerging and evolving faster than antiipated na... Electr’ lesb allows It to cross energy sos and substitute for fossil ues... ‘ata management become a key element of theelectial energy stem... Heat from renewables could reduce demand for fos fel. Renewables enhance national energy security, produetvty and economl stably ‘Transportation may electty more rapidly than expected ncn challenges and Oppertaies. ‘Anew global energy ecosystem emerges rapidly oo Competition for emerging enerey markets based on technology rather than resources. Minerals become strategie 558s -.ounnn Oil demand for trarsportation decines more rapidly than expected Fos ht cold et commoiy status acing open o eof market ‘Senso a a Implatins for Canad 3 Consion nn re Amex: Assumptions aiaiaaas A vont References oo 7 - aExecutive Summery ‘The world's energy landscape is transforming rapidly asthe cot of renewable-based elect, particularly from wind and solar declines to become competitive witha lower than the price of electricity generated by fossil fuel and nuclear powerplants Power utlites end companies fare increasingly choosing to Increase thee generating eapact using renewable sources rather ‘than fossil power asthe perceved problems of intermittent suppy from solar and wind are addressed with better supp and demand management using a combination of integrated smart gids and batery storage. The price of batteries falling precipitously leading to their Application at local and grid-level sales inthe power supply system as wel as faclitating lnican elecrtcaton of transportation, The sift oan electorate yobelenesey ‘mix wll be accelerated as decreasing costs combine with increasing government an private {sector concerns over cate change, energy security and air pollution, particularly in developing countries where the need for addtional energy eapact is greatest. n combination, ‘these divers could lead to renewable-rourced electricity replacing fssl fuels asthe dominant {orm of primary energy used inthe global economy for most industrial, commercial and personal att Whot is driving chenge? + Cost Reducton: many components of a renewable-based electricity system ae declining in ‘cost much fester than predicted due to advances in technology, economies of scale and accelerating learning curves as experience with these systems grows + Digtal Economy: digal ystems run on eletilty asthe global economy shits to become increasingly digital, the relative proportion of elctrity in global energy use wl Increase. ‘+ Climate change and Ale Pollution: developng countries are embracing renewable energy to meet their economic and development goals without trading off environmental quality and human health Policy Challenges: As the insights interac, what chellenges could lie head? + Anew electrcy-bated industrial ecosystem could emerge at amuch faster rate than ‘expected, significantly disrupting fossil uel markets. + Competition for energy markets ofthe future could be won by those with the best technologies fr renewable energy prodvcton, storage and management, rather than by those with deposits of oss energy. ‘+ Minerals and metals suchas ithlum and rare earths could ceplce ol gus and coal strategie rezources based on thelr use inthe batteles,electronkes and photovotac cells of the emerging eneray ecosystem. + Global el demand could peak ealer and decline further and faster than expected with ‘sgnifcant impacts on high-cost producersSee *+ Oil producton could sigifieantyautpace demand with resulting downward pressure on prices as producer countees compete to maintain thie share of shrinking markets while ol stilha value + Oilcouldose ts commodity status as purchasers begin to discriminate between ol supple on nonintrnse qualities such as embodied greenhouse gas emislons and/or ‘other environmental, poltical or social rtria Insights Insights describe developments tang pace now that could create further, highly dsuptve change Inthe fture should tey strengthen sighs are selected for thei daruptve potential an policy implications The primary energy supply ofthe globe is shifting to electricity Electret s expected tobe the work's fastesgromag form of final Pare Shar cryin Eee rey Cans ‘energy and to provide an increasing omen ‘share of the energy consumed across cena en neatee economic sectors. Vile energy emt fy tomam demand tom alroucesisenpeted ——sowwnewrn dn Wf horse 4285 eo the same period, word electricy Tes » Tesi Energy, bto//uou.testmotorscom/orsait, Daimler, “Sales Launch of private energy storage plants, lune 9th 2035, bto:/medi. dail com/semeda/0-225-657S89-1-1820346- 40.9:0.04.0-00:-091431770180-000 mi7TS=1433667785494 charge, san, Gi and Toyota repupose we EV batts fr satay storage” ne 22015,