Presentation on theme: "1 COPENHAGEN – KEY TO CLIMATE INVESTING Corporates: Challenges and Opportunities Ramón de Miguel Advisor for International Affairs Chairman Iberdrola Engineering."— Presentation transcript:
1 COPENHAGEN – KEY TO CLIMATE INVESTING Corporates: Challenges and Opportunities Ramón de Miguel Advisor for International Affairs Chairman Iberdrola Engineering & Construction 04 December 2009
Index The challenge: Sustainability and Energy Confronting the challenge: Iberdrolas Strategy Conclusions 2
3 Diagnosis: Todays Energy Model We all probably agree that the current energy model is unsustainable Energy demand outperforming global GDP growth Energy demand outperforming global GDP growth Economic development Energy sector, a main contributor Climate change Limited fossil fuel reserves Traditional energy resources High and rising dependence on politically unstable regions Security of supply
4 Trends Even before the recent financial and economic turmoil, the growing tensions suffered by this model … World population expected to rise from 6.6 to 8.2 billion inhabitants by 2030, mainly concentrated in the poorest regions Developing country growth, improving life styles and convergence with the developed world's consumption levels Infrastructure congestion Exponential demand growth Competition for resources Carbon emissions
5 Consequences … were leading to a collapse of the energy system CO 2 Emissions Billion tons Will climate change reach a turning point? Global Energy Demand Million toe Can supply catch up with demand … at the right price? Source: World Energy Outlook 2009
6 New Energy Model: Challenges Three key drivers of change for the energy model 2 Decarbonization 1 Energy efficiency Do the same using less energy Reach a CO 2 -free energy mix 3 Security of supply Satisfy energy demand driven by economies
Need for coordinated action to restrict the global temperature rise to 2°C (450 ppm of CO concentration) … 7 New Energy Model: Challenges 3.8 Gt 13.8 Gt Source: World Energy Outlook 2009 … 13.8 Gt of total abatement, to reach the 450ppm CO 2 scenario....
8 New Energy Model: Challenges … with a critical role for the electricity sector in shaping that new model Gt Source: World Energy Outlook 2009 …Power sector accounts for about 70% of world CO 2 savings.
Role of electricity in driving the model change A higher penetration of electricity in the energy mix will strongly support these drivers of model change … Electricity generation is already the most efficient means to transform primary energy Electricity generation presents significant advantages in terms of primary energy diversification A wide range of reliable and proven technologies are available to generate CO 2 -free electricity (wind, solar, hydro, nuclear)
10 … with a key contribution to decarbonising the energy supply… Role of electricity in driving the model change Source: World Energy Outlook 2009 Investments needed to achieve 450 ppm CO scenario in the power sector at … 60% will be from renewables, 16% from nuclear and 7% from carbon capture and storage (CCS).
11 Need for favourable environment to commit to investments in renewables … Context Regulatory framework Natural and Technical Conditions Social Consensus Political support Legal/regulatory framework Macro-Economic Situation Profitability: defining a sufficiency scenario. Stability: The legal framework must be based on criteria of non retroactivity. Predictability: remuneration defined for the entire live of the assets. Resources: sufficient, intermittent, predictability,. Grid Access : adequate planning and implementation for the new generation access. INVESTMENT Investment drivers
Index The challenge: Sustainability and Energy Confronting the challenge: Iberdrolas Strategy Conclusions 12
GW of generation capacity owned Worlds largest wind-power company >10 GW operational and >57 GW pipeline of projects Market capitalisation ~ 33billion ** Among the top-five world energy utilities Iberdrola Today* 27 MM electricity and gas customers 33,000 employees in 30 countries A world energy leader… *Data as of Q3 09 closing >50% emission-free generation portfolio with a CCS technology plant installed in Longannet, UK
14 North America: No. 2 wind power operator Relevant electricity and gas distributor in the Northeast Latin America: No. 1 private generator in Mexico No. 1 distributor in Brazil United Kingdom: No. 1 wind power operator Top-3 electricity distributor Top- 5 retailer Iberia Leading integrated electricity operator Iberdrolas regional footprint … with a distinctive positioning in key Atlantic Basin economies
15 CO 2 emissions reduction 2020 Today, Iberdrola is one of the cleanest companies in Europe, with emissions clearly lower than Electricity sector´s average… gr CO2/kWh … and has an objective to maintain emissions intensity at least 20% below the European electricity sector level in 2020 IberdrolaEuropean Power
Index The challenge: Sustainability and Energy Confronting the challenge: Iberdrolas Strategy Conclusions 16
17 Conclusions The energy sector must evolve toward one sustainable model… … in which renewable energy will play a fundamental role A stable regulatory framework is needed to consolidate this change, with important benefits to the economy Iberdrolas investment strategy is in line with recommendations of most independent international agencies, offering a strong commitment to emission-free technologies