Origin Energy Limited · ASX:ORG
Origin Energy — AmCham Address, Sydney 2014
19 slides from Origin Energy's conference presentation, Dec 5, 2014
Slide 1: Laggards or Leaders: Global Energy Security, Affordability and Sustainability
Laggards or Leaders Global Energy Security, Affordability and Sustainability Grant King, Managing Director, Origin Energy AmCham Address, Sydney, 5 December 2014
Slide 2: As the world grows, so does demand for energy and global emissions
As the world grows.... so does demand for energy and global emissions Cumulative Energy CO2 Emissions The IEA states that energy use accounts for 83% of Source: IEA WEO 2014 New Policies Scenario, November 2014 carbon emissions that result from human activity. Over the period 2012 to 2040 IEA models
Slide 3: Kyoto Protocol established the architecture for carbon reduction targets to 2020
The Kyoto Protocol signed in 1997 established the architecture we have today that has resulted in progressive carbon emissions reduction targets out to 2020 Source: WEO 2014 and Origin analysis Country Estimated 2020 Base Year Binding or pledged Targets 1990 2000 2005 /Region Targets MtCO2e Target A
Slide 4: Carbon price and RET were interdependent policy instruments for Australia's 2020 target
The carbon price and the RET were interdependent policy instruments established to help Australia achieve its 2020 target Carbon Pricing Mechanism • The carbon pricing mechanism obligated electricity generators and other large emitters to pay a certain price for every tonne of carbon dioxide equival
Slide 5: Initial carbon price insufficient to cause material fuel switching
The initial carbon price implemented by the last government was insufficient to cause any material fuel switching Source: Origin analysis Source: NEMSight, Origin analysis SRMC - Average Fuel Costs Generation Energy Supply (July 2011 to June 2014) LRMC 200 6.0 6.7 13.4 17.6 8.6 Other $/MWh 23.3 17.8
Slide 6: Constant fiddling with the RET is failing its objectives
Because of constant fiddling with the scheme since 2009 the RET is failing to meet its objectives of supporting new renewable technology and driving down the cost of carbon abatement Source: CER, ACIL, AEMO, Origin analysis RET target, supplies and estimated REC bank depletion 45,000 40,000 35,000 E
Slide 7: 2020 target significantly lower than previously anticipated
With changes in forecast demand for energy the 2020 target is significantly lower than previously anticipated Source: Energetics, October 2013 • There are a range Direct Action approaches to reducing emissions in other countries including • China closing smaller, older coal plant primarily to improv
Slide 8: Per capita measures make Australia look like a laggard
We have allowed our progress to be measured against emissions per capita, which makes us look like a laggard, but this fails to understand the true nature of the Australian economy Australia is 0.3% of the world’s population, 1.5% of global carbon emissions and 2% of global GDP: • 10th largest count
Slide 9: A better measure of progress is carbon emissions to GDP
A better measure of progress is carbon emissions to GDP When measured on consumption not production the UK’s emissions are 46% higher, Italy 25% higher, France 43% higher, Germany 28% higher and Australia 2% lower Source: Research referenced in the Deloitte Report Source: IEA data, Deloitte analysis
Slide 10: Deloitte updated analysis of energy related carbon emissions with WEO 2014
Deloitte has updated its analysis for energy related carbon emissions with data from WEO 2014 Source: IEA data, Deloitte analysis, December 2014 It shows that the line is moving in the right direction with the average falling by 1% from 0.57 ktCO2e per GDP (millions) to 0.56 ktCO2e per GDP (millions
Slide 11: Challenge is to grow GDP, improve carbon efficiency and reduce emissions across G20
The challenge is to grow GDP, improve carbon efficiency and over time reduce absolute carbon emissions across the G20 as a whole Source: IEA data, Deloitte analysis, December 2014 Source: IEA data, Deloitte analysis, December 2014 In the G20 from 2011 to 2012 only Australia, the US and Canada Austra
Slide 12: The real challenge now is framing targets beyond 2020
The real challenge now is to look to how to frame targets beyond 2020 Source: World Resource Institute, EPA, European Environment Agency, DECC, METI, WEO 2014 and Origin analysis Total Emissions Including LULUCF Historical Total Emissions and Targeted 2020/2025 Emissions by Country (Mt CO2 -e) 20,00
Slide 13: US most significant emissions decrease, driven by shale gas
The United States has had the most significant decrease in carbon emissions in recent years – driven by shale gas • The New Policies scenario assumes that announced policies are implemented including the US EPA’s Clean Power Plan which aims to cut power sector emissions in 2030 by 30% from 2005 leve
Slide 14: China's priorities of jobs and air quality also reduce carbon emissions
China’s economic and environmental priorities to date have been creating jobs and improving air quality. The main ways to do this also reduce carbon emissions • The New Policies scenario assumes that announced policies are implemented including China’s targets to control coal consumption and reduce
Slide 15: Australia is a major resource and energy exporting economy
Australia is a major resource and energy exporting economy, exporting (net) 68% of the energy it produces including coal, uranium and gas • BREE models current policy not proposed action as in the IEA scenarios. BREE’s generation numbers are gross and include off grid generation. • Hence BREE has Au
Slide 16: Russia has the best indigenous sources of base load low carbon fuels
Russia has the best indigenous sources of base load low and zero carbon emissions fuels in the world • Russia has abundant low carbon options with gas, nuclear and hydro but is inefficient in converting energy into GDP • Russia’s fuel mix is not projected to change much even out to 2040 with low gro
Slide 17: ETS and wind and solar incentives helping EU meet 2020 targets
An Emissions Trading Scheme and strong incentives for wind and solar are helping the EU to meet its 2020 emissions reduction targets • The New Policies scenario assumes that announced policies are implemented including the EU climate and energy policy framework to reduce emissions and increase renew
Slide 18: Origin supports measures to progressively reduce carbon emissions
Origin recognises that climate change is a global challenge and we unequivocally support measures to progressively reduce carbon emissions • We need bipartisan support for a more balanced and achievable RET • Technology diversity and neutrality are fundamental and we need all options on the table •
Slide 19: Thank You
O origin THANK YOU