The document discusses the energy transition in Europe and climate change. It covers: 1. The World Business Council for Sustainable Development's vision of sustainable development by 2050, including opportunities for business. 2. The need for urgent action to transition energy systems to limit global warming to 2°C, including increasing renewable energy and implementing carbon capture and storage. 3. Business solutions being developed through the Action2020 initiative to address climate change, such as scaling up renewable electricity, electrifying cities with zero emissions, and increasing resilience to climate impacts.

1. LA TRANSICIÓN ENERGÉTICA
EN EUROPA Y EL CAMBIO
CLIMÁTICO
Acción 2020: una respuesta
empresarial a la transición
energética
María Mendiluce
Madrid, 30 Jun2 2014

2. Index
• WBCSD
• Vision 2050
• Energy transitions
• Action2020
• Concluding remarks

3. The World Business Council
for Sustainable Development

5. The World Business Council for Sustainable
Development (WBCSD) is a CEO-led
organization of forward-thinking
companies that galvanizes the global
business community to create a sustainable
future for business, society and the
environment. Through its members, the
Council applies its respected thought
leadership and effective advocacy to
generate constructive solutions and take
shared action.

6. Key facts about the WBCSD
• Nearly 200 global member
companies
• $7tn: aggregate capitalisation of
members
• 15m employees in WBCSD member
companies
• Regional partners in 67 countries
with thousands of companies

7. Vision 2050

8. Vision 2050
9 billion people, living well, within the limits of the planet
• Business vision of a world well
on the way to sustainability
by 2050
• Recognition of the need for
radical change to make this a
reality
• Significant business
opportunities identified
Vision 2050
online

9. Growth and degradation
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Populationinmillions
Urban - Less developed
Rural - Less developed
Urban - More developed
Rural - More developed
0
C
hina
U
nited
States
India
Brazil
M
exico
R
ussia
Indonesia
Japan
U
nited
Kingdom
G
erm
any
10,000
20,000
30,000
GDP2006US$bn
40,000
50,000
60,000
70,000
80,000
0
2005 2030
2
4
6
8
10
12
14
16
400 million
1.2 billion
Percentofglobalpopulation
Sub-SaharanAfrica
SouthAsia
Middle Eastand North Africa
Latin Americaand the Caribbean
Europeand Central Asia
EastAsiaand the
Global economic power is shifting
Top 10 economies by GDP in 2050
The world population is increasingly urban
Global population by t ype of area and by region – 1950-2050
The global middle class is rapidly expanding
Population in low- and middle-income countries earning US$ 4,000-17,000 per capita
(purchasing power parit y)
1970
0
10
20
30
40
50
60
70
80
1980 1990 2000 2010 2020 2030 2040 2050
GtCO2
eq
Restof the world
BRIC(Brazil,
Russia,India, China)
OECD
0
2030
2005
2030
2005
2030
2005
500 1,000 1,500 2,000
Millions of people
2,500 3,000 3,500 4,000
Severe
Medium
Low
No
0%
2000
Forecastpost-peakdeclinerate
2005
C a mp be ll
L BST
Pea kOil C on s ulting
U p ps a la
To ta l
BGR
She ll
Miller
Me lin g
OPEC
IEA
U SEIA
2010 2015 2020 2025
Forecastdate of peak
2030 2035 2040 2045 2050
1%
2%
3%
4%
5%
6%
7%
8%
Greenhouse gas emissions keep rising
GHG emissions by regions
Environmental degradation jeopardizes
people’s quality of life
People living in areas of water stress by level of stress
The world could be running out of some resources
Global supply forecast s according to the im plied ultimate recoverable
resources of convent ional oil, date of peak produ ction and the post-peak
aggregate decline rate
Urbanization
Shifting power
Wealth
GHG rise
Worse Q life
Resource less

10. Meeting human demands within the ecological limits of
the planet
0.2 0.4 0.6 0.8 1.0
World averagebiocapacity per personin 2006
World averagebiocapacity per personin 1961
UNDPthresholdforhighhumandevelopment
High human development
w ithin the Earth’s limits
2
4
6
8
10
12
EcologicalFootprint(globalhectaresperperson)
United Nations Human Development Index
Asiancountries
Europeancountries
Latin Americanand
Caribbean countries
North Americancountries
OceaniancountriesMeeting the dual goals of
sustainability
High human development and low ecological impact
Source: © Global Footprint Network (2009).
Data from Global Footprint Network National
Footprint Accounts, 2009 Edition; UNDP
Human Development Report, 2009
06
61
UNDPthresholdforhighhumandevelopment
2
4
6
8
10
12
EcologicalFootprint(globalhectaresperperson)
African countries
Asiancountries
Europeancountries
Latin Americanand
Caribbean countries
North Americancountries
Oceaniancountries

11. The Perfect storm: Water, Energy and Food Nexus
Source: Hoff, H, 2011

12. TODAY
The pathway to Vision 2050
To a sustainable world in 2050
From business-as-usual

13. Energy transitions

14. 147/8/2014
The global energy system today
Global energy flows in 2011 Source: IEA

15. Potential exponential energy demand growth…
 1.2 Bn people without
access to electricity
 1.1 Bn people without
access to water
 Around 1 Bn people
undernourished
 1 Bn Slum dwellers
2010 Population Energy pc
Poorest
(GDP<2000$)
645 Mn 514 koe
Developing
(GDP<6500$)
2775 Mn 534 koe
Emerging
(GDP<12000$)
2335 Mn 1829 koe
Developed
(GDP<12000$)
1145 Mn 4718 koe
Total 6900 Mn 1664 koe
…. and associated water requirements
12.5
16
23
2010 2050 (IEA) 2050
(Wealthy)*
+ =>
…. affluent middle class
is expanding
Filling development
gaps…
…. demand could double
in the next 40 years

16. 167/8/2014
To achieve the 2DS, energy-related CO2 emissions must be halved until 2050.
A choice of 3 Futures
6DS/Current Policies
where the world is heading
under current policy with
potentially devastating
results
The 6°C Scenario
4DS/New Policies
reflecting pledges by
countries to cut
emissions and boost
energy efficiency
The 4°C Scenario
2DS/450
a vision of a sustainable
energy system of reduced
Greenhouse Gas (GHG) and
CO2 emissions
The 2°C Scenario
Source: IEA

17. 177/8/2014
Carbon Stranded Assets ?
1000
2860
760
1500
0
500
1000
1500
2000
2500
3000
3500
Carbon Budget
According to IPCC < 2⁰C
Existing Reserves of
Fossil Fuels if Burnt
Fossil Fuel Reserves of
Listed Companies
Listed Reserves +
Potential Additional
Reserves
Carbon

18. 187/8/2014
BP Energy Outlook 2035…BAU

19. 197/8/2014
Slow energy transition
1.E+03
1.E+04
1.E+05
1.E+06
1.E+07
1.E+08
1.E+09
1960 1970 1980 1990 2000 2010
Terrajoulesperannum
Total
Oil
Nuclear
Biofuels - 1st Gen
Solar Photovoltaic
Wind
LNG
"Laws"
Materiality
30 years to influence the
energy mix
Source: Nature

20. 207/8/2014
100% renewables is it possible?

21. Energy efficiency & renewables

23. © OECD/IEA 2014
Technology portfolio to reach the 2DS
0
10
20
30
40
50
60
2011 2020 2030 2040 2050
GtCO2
Sectors
Power generation 41% Industry 19%
Transport 19% Buildings 13%
Other transformation 8%
0
10
20
30
40
50
60
2011 2020 2030 2040 2050
Technologies
End-use fuel and electricity efficiency 38% CCS 14%
End-use fuel switching 9% Renewables30%
Power generation efficiency and fuel switching 2% Nuclear 7%
Decarbonising power is a pre-condition – key role for renewables

24. 1. A sustainable energy future is still feasible and
technologies exist to take us there
2. Despite potential of technologies, progress is
too slow at the moment
3. A clean energy future requires systemic
thinking and deployment of a variety of
technologies
4. It even makes financial sense to do it.
5. Government policy is decisive in unlocking the
potential
Source: IEA WEO, ETP
Intergubernamental perspective

25. 1. There is a significant risk of lock-in of the GHG
emissions trajectory
2. An energy policy framework is required to secure a
pathway to vision 2050 outcome:
 transition period aligned with the long-term framework
 financial incentives and regulatory support
 Early goal of commercial-scale demonstration
 Allow all technology options
 Balance supply security, affordability and environmental protection;
 Build public support for new energy infrastructure
3. Carbon pricing has a critical role to play
Business perspective
Clear, unambiguous & well structured energy policy framework

26. Action2020

27. 277/8/2014
Action 2020 Process

28. 287/8/2014
Climate Change Societal Must Have
With the goal of limiting global temperature rise
to 2°C above pre-industrial levels, the world must,
by 2020, have energy, industry, agriculture and
forestry systems that, simultaneously:
• Meet societal development needs
• Are undergoing the necessary structural
transformation to ensure that cumulative net
emissions* do not exceed one trillion tonnes of
carbon. Peaking global emissions by 2020 keeps
this goal in a feasible range
• Are becoming resilient to expected changes in
climate.
* Anthropogenic CO2 emissions from preindustrial levels as outlined in the IPCC Working
Group Fifth Assessment Report. One trillion tonnes carbon = 3.67 trillion tonnes CO2

29. 297/8/2014
˂2oC
Stay below trillion tonnes carbon and meet develpment needs
Avoid GHG emissions Sequester GHG emissions
Biosequestration Geological
sequestration
Replace fossil fuels Improve efficiency
Energy Efficiency in
Buildings (EEB)
Forests and forest
products as carbon
Sinks
Carbon Capture
and Sequestration
Carbon Capture
and Utilisation
(incl. EOR)
Increase share of
renewables on grid
Sustainable Mobility 2.0
Biofuels
Solar, Wind, Hydro
Natural Gas & H2
Low-carbon
electrification of
remote areas
Electrifying Cities towards Zero Emissions
Resilience of global
supply chains
Resilience in the
Power Sector
*Reduce
deforestation
Resilience
Managed by C&E
Climate
Change
Must-
Have
Business
Solutions
Resilience in the
Cement Sector
Policy Focus
*Sustainable forest
management
*Increase forest
product use/value
Energy Efficiency in
Industrial
Processes (CSI)x
Insulation
Engine efficiency
Urban planning
Examplesof
individual
technologies
Pre/Post-
combustion and
Oxyfiring CO2
capture
Saline aquifer and
depleted oil/gas
field storage
Policy Principles
for multilateral agreements on
climate Change
Policy
Requirements
Individual technologies
as part of biz solutions
National Policy
recommendations
Sectoral Policy
recommendations
Proactive
adaptation
Solution
spaces
X Not yet a business solution,
in progress
WBCSD Climate Change solutions
Utility of the Future
Biomass

30. 307/8/2014
Carbon Capture and Storage (CCS)
• By 2020 deliver improved
understanding of the role of Carbon
Capture and Storage (CCS);
• Real change in the recognition of CCS
in national and international policy; and
• Ideally, a Final Investment Decision
(FID) on at least one major for profit
project in a carbon intense (emerging)
economy.
Core Group

31. 31
Emissions vs. Storage measured in GtCO2
Trillion tonnes of
Carbon
Fossil Fuel
Reserves
Technical
Storage
Capacity
Already
Emitted
Commercial
CO2 market
3670 2863 20001890 0.12
Sources:
IPCC, Summary for Policy Makers, Climate Change 2013: The Physical Science Basis (2013)
IEA, World Energy Outlook (2012)
IPCC, Special Report on Carbon Dioxide Capture and Storage (2005)
Theoretically there is significant storage potential (relative to potential emissions from fossil fuels)
but at the moment in practical terms–it is scarce.
There remains significant geological work to fully appraise storage sites (identify, characterise,
model and potentially test injection).
Storage capacity uncertainty
UK example:
In oil and gas fields: 7.4 - 9.9
Saline aquifers: 6.3 - 62.7
billion tonnes of CO2

32. 327/8/2014
Scaling up renewables in the electricity mix
• By 2020 this business solution will demonstrate that
the electricity grid can integrate more than 20% of
renewable energy and by 2030 renewables can reach
30% of the electricity mix. By looking at:
• The essential driver for scale
• Company on site and off site integration of
renewables
Co-leads

33. 337/8/2014
Three pillars of system transformation at
high variable renewable energy shares
2.
Make better use
of what you have
Operations
1.
Let wind
and solar
play their
part
3.
Take a system wide-
strategic approach
to investments!
System
friendly
VRE
Technology
spread
Geographic
spread
Design
of power
plants
Investments
Grid
infrastructure
Flexible
generation
Storage Demand side
integration

34. 347/8/2014
Electrifying Cities towards Zero Emissions
• Fully electrify the consuming sectors in the
city and implement high efficiency measures
for mobility, buildings and industries;
• Optimize and harmonize energy supply and
demand through ICT solutions;
• Transform the supply of electricity to zero-
carbon and optimize efficiency for energy
transmission and distribution. Co-leads

35. 357/8/2014
Low Carbon Electrification of Remote Locations
• Accelerate remote electrification through the
formulation of ‘solution packages’ to meet needs
ranging from providing light or charging electronic
devices in single households (kW) to grid-equivalent
electricity supply for sizable communities or
production locations (MW);
• Provide recommendations on the policy and financing
environment;
• New business models and investment making
decision processes, to enable access to modern
services and make a significant contribution to the
goal of universal access to all.
Co-leads

36. 367/8/2014
Resilience to Climate Change in Globally
Interdependent Business
• Help companies understand climate risk
and build resilience
• Consider linkages and inter-dependencies
between companies, sectors and countries,
by focusing on illustrative supply chains:
• Corn
• Battery assembly
• Build foundation for a holistic and cross-
sectoral approach to building resilience in
the global business community.
Co-leads

37. 37
Business is building resilience to climate change…
• Droughts & Floods
• Storm surges
• Heat waves
• High winds
• Gradual changes in climate
– Raising sea levels
– Increasing average
temperatures
– Changing precipitation
Long-term
impacts
Extreme
events
… managing existing risks & preventing
accumulation of new risks
Improve
response to
extreme events
Understand
where are the
hotspots for l/t
planning
RAISING
INCERTITUDES

38. 38
Conclusions

39. What business needs to invest in the
energy transition?
• Long term signals and shorter term milestones subject
to periodic review with common MRV framework
• National policies & measures (incl. carbon pricing)
• International efforts & increasing cooperation
around innovation and RDD
• International cooperation on resilience

40. Scale of solutions is changing…
rooftopPV
onshorewind
Desertec
“nano”
“micro”
“macro”
PVplants
geothermal
K$
M$
G$
LH2 shipping
LNG GtL
refining
shalegas
retail
Clean Fossil
oil sands
Green
THEACTION
smart systems
H2Mobilty
typicalprojectscale
offshorewind
CCSdemos
 Individual consumers
 Communities
 Small companies
 Non-energy companies
 Cities
 Specialized energy companies
Investment decision makers
…regulatory frameworks will need to adapt

42. Global Megatrends
• The great leveller?
• Double-edged sword
•
• Ageing nations
•
• Lifestyle choices, lifestyle
diseases
• Interconnected and
infectious
• New world order
• The global marketplace
• Rise of the middle class
• Empowerment through
education
• More seats at the table
• The “perfect storm”
• It’s the green economy
Source: The Report of the
Oxford Martin Commission
for Future Generations
• Uneven and unequal
• Generational and
gender divides

44. Environmental Policies 44
Public policies should focus in reducing or managing
existing risks that discourage private investment
Main risks and policy solutions for low-carbon RD&D
investments:
 Commercial risks: ownership of assets and liabilities; risks
and revenue sharing; contractual and operational
responsibilities; IPR
 Regulatory risks: legal framework for emissions control and
for access to infrastructure
 Political risks: political stability and permanence of
government commitments
 Absence of general infrastructure: Government assurance
of investments in infrastructure where it is lacking
 Absence of RD&D infrastructure: human capital,
universities, national labs, regional partners

45. Environmental Policies 45
A combination of technology push and market pull
policies can address barriers to low carbon innovation
Policies to increase the
supply of new
knowledge:
“TECHNOLOGY PUSH”
Policies to increase the
demand of innovation:
“MARKET PULL”
Capacity building
Infrastructure development
Gov’t funding
demonstration projects
Public-private partnerships
to share R&D risk
Gov’t sponsored R&D
Tax credits to invest in R&D
Targets and product
standards
Cap and trade
Regulations requiring use of
BAT
Feed-in tariffs
Portfolio standards
Public procurement
IPRS protection