Transcript Technology Outlook 2015

DNV – Managing Risk
DNV corporate presentation
[Rene Arikas]
[25.11.2008]
DNV – an independent foundation
Our Purpose
To safeguard life, property
and the environment
Our Vision
Global impact for a safe
and sustainable future
© Det Norske Veritas AS. All rights reserved
16 July 2015
Slide 2
More than 140 years of managing risk

Det Norske Veritas (DNV) was established in 1864 in Norway

The main scope of work was to identify, assess and manage risk
– initially for maritime insurance companies
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16 July 2015
Slide 3
New risk reality

Companies today are operating in an increasingly more global, complex
and demanding risk environment with “zero tolerance” for failure

Climate change

Increased demands for transparency and business sustainability

Stricter regulatory requirements

Increasing IT vulnerability
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16 July 2015
Slide 4
Core competence
Maritime
Energy
Food and beverage
Automotive
Managing risk
Transportation
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Health care
16 July 2015
IT/Telecom
Slide 5
300 offices in 100 countries
Head office
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Local offices
Slide 6
Our people – a vital resource

People are the core of DNV
© Det Norske Veritas AS. All rights reserved

8600 employees
16 July 2015

98 nationalities
Slide 7
Technology Outlook 2015
DNV Research and Innovation’s assessment of developing trends
[Rene Arikas]
[25.11.2008]
Global Trends
ENERGY – OPPORTUNITY AND THREATS
The world is facing energy-related threats:
1.
Not having adequate, secure supplies of energy at an affordable price
2.
The environmental damage caused by consuming too much of it
The need to curb the growth in fossil-energy demand, to increase
geographic and fuel supply diversity, and mitigate climate-destablising
emissions is more urgent than ever.
In next 8 years China will install 800 GW of power plants, 90% of
them will be coal fired!
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16 July 2015
Slide 9
Global Trends
ENERGY – OPPORTUNITY AND THREATS
World energy consumption shows a
surge, especially in developing
countries.
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16 July 2015
Projected energy demand
with respect to energy
source
Slide 10
Renewables
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Slide 11
Renewables
In 2015, the demand for electric energy will increase by 20% OECD countries,
and by 88% in developed countries.
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16 July 2015
Slide 12
Technology Outlook 2015
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16 July 2015
Slide 13
Wind power – Blowing in the wind
Trends towards 2015:
 Wind power established in many countries. The focus of wind industry
installations will shift to North America and Asia.
 China and India will become the most attractive countries in the world for
renewable energy investment and projects by 2012, with an expected
installed capacity of 5GW in 2009.
 By 2015 the wind power capacity is expected to be more than
double. Under “business as usual” conditions, the wind energy capacity will
grow from 75GW installed in 2006 to around 160GW by 2012.
 The number of multi MW turbines will increase. Average wind turbine
rotar diameter has grown from 15 m (50 kW/1980) up to 124m (5 MW).
Older and smaller turbines are being upgraded by multi-megawatt turbines.
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16 July 2015
Slide 14
Wind power – Blowing in the wind
Trends towards 2015:
 Huge wind turbines being installed offshore. Offshore installations,
outside visual range from shore, will reduce wind farm location conflicts.
The majority of offshore instllations will be in shallow water, but some
floating, deepwater protoypes (5+MW) will be installed and tested.
 A market for small wind turbines. Small wind turbines (0,1 kW up to 100
kW) are especially suitable for decentralised solutions.
 Renewables combined with energy storage. Combining energy storage
with renewable electricity production alleviates the intermittent nature of
renewable energy sources.
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16 July 2015
Slide 15
Wind power – Blowing in the wind
OFFSHORE – OUT OF SIGHT, BUT IN THE WIND
Locating wind farms in the ocean has the dual advantages of offering higher
and more predictable wind speeds, while avoiding potential conflicts with
other land users. Current designs of offshore wind turbines are based on
bottom-fixed towers in water depths up to 30 meters. Based on experience
from the offshore, deepsea oil and gas industry, floating tower support
structures are under development in USA and Europe.
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16 July 2015
Slide 16
Wind power – Blowing in the wind
STORAGE OF WIND ENERGY
Electricity has to be used at time of production, and the time-dependent
imbalance, between demand and supply of electric power is solved by
storing energy. Bulk storage includes hydro-electric storage, hydrogen/fuel
cell systems, and compressed air energy storage (CAES).
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16 July 2015
Slide 17
Wind power – Blowing in the wind
Annually installed wind power capacity be region
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Slide 18
Wind power – Blowing in the wind
Technology towards 2015:
 New blade designs are being developed, e.g. lighter and stiffer blades,
and active designs that can reduce loads.
 Novel drive trains with direct generators (no gear box), use of rare earth
permanent magnets allowing smaller generators, and distributed drive
trains will come commonplace. Hydraulic energy transmission will allow
generators to be positioned at the base of floating systems.
 Off-grid solutions, with horizontal as verical axis turbine models, will
appear in the small turbine wind market.
 Power electronics e.g. converters, controls, and power components, will
be more reliable, reducing failures that need non-planned intervention.
 Remote control and surveillance technology will be applied, as more
wind turbines are installed and are placed more remotely
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16 July 2015
Slide 19
Wind power – Blowing in the wind
Technology towards 2015:
 Innovative tower that are self-erecting, or tower climbing cranes and
tracks, will eliminate the need for expensive cranes. Towers will be built of
concrete and steel.
 Adaptations of the marine environment:
• New, inexpensive floater designs, with affordable and reliable
anchoring systems.
• Onshore limitations (e.g. aero-acoustics) may cease to be major
design drivers, allowing higher tip speeds, lower chords, and reductions
in loads.
•Three-bladed, up-wind turbines may eventually be replaced by twobladed, downwind, more flexible machines.
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16 July 2015
Slide 20
Wind power – Blowing in the wind
Possible challenges
Risk aversion: investors and lenders are concrened with a wide array of
risks, such as the quality of the wind, changing regulatory and political
environments, relevant transmission issues, and reliability of technology.
Supply chain bottlenecks: global demand for wind turbines is currently
exceeding the capacity of the industry, and important components are in
short supply. The wind turbine industry is faced with a considerable
challenge in managing the total supply chain.
Transmission limitations: The best locations for renewable production are
often located away from the market, and transmission cost reduce their
competitveness.
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16 July 2015
Slide 21
Climate Change
Outlook for Climate Change Services
[Rene Arikas]
[25.11.2008]
The Challenge – Decarbonise the Economy

Human societies are dependent
on and maintained by a
continuous flow of energy.
IEA Energy Technology Perspectives
Emission reduction by sectors
MAP Scenario:
32 Gt CO2 reduction in 2050
Industry 10%

Moving developing economies
further and growth in the world
population result in increasing
energy demands.
Energy & feedstock effic. 6%
Materials & products effic. 1%
Pocess innovation 1%
Cogen. & steam 2%
Buildings 18%
Space heating 3%
Air conditioning 3%
Lighting, misc. 3.5%
Water heat., cooking 1%
Coal to gas 5%
End-use
efficiency
45%
Appliances 7.5%
Nuclear 6%
Fossil fuel gen. eff 1%
Power Gen
34%
Hydro 2%
Biomass 2%
Transport 17%

Currently the dominant
economically available energy
resources are fossil based with
varying carbon content (coal, oil,
and natural gas).
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CCS 12%
Other renew. 6%
Fuel economy
in transport 17%
Biofuels in transport 6%
CCS in fuel transformation 3%
CCS in industry 5%
Fuel mix in building 5% and industry 2%
CO2 Capture & Storage (CCS) contributes 20% of total
INTERNATIONAL ENERGY AGENCY
16 July 2015
© OECD/IEA 2007
AGENCE INTERNATIONALE DE L’ENERGIE
Slide 23
The Challenge – Decarbonise the Economy

The increased concentration of GHG in
the earth atmosphere leads to increase
global temperatures.

The atmospheric CO2 concentration as
an average over 2007 was 383 parts
per million1

Unless the strong connection between
economic growth and GHG emissions
are broken, the world is now on a path
that is clearly not sustainable

Preventing catastrophic and irreversible
damage of the global climate requires a
major decarbonisation of the world
energy resources. We could be heading
for a global temperature increase of up
to 6oC
1) ref Carbon Dioxide Research Group Scripps Institution of Oceanography (SIO) University of
California.
© Det Norske Veritas AS. All rights reserved
16 July 2015
From IPCC
Slide 24
The Carbon Market
2006
Volume
(MtCO2 e)
2007
Value
(MUS$)
Volume
(MtCO2 e)
Value
(MUS$)
Allowances
EU ETS
1104
24 436
2061
50 097
Project-based transactions
CDM
562
6249
791
12877
JI
16
141
41
499
Ref: The World Bank, May 2008
CDM market: China dominates, Africa emerges
 China was the biggest seller (73% of CDM transactions). Countries in Africa and eastern
Europe and Central Asia (1%) has emerged in the carbon market.
CDM delivers on clean energy
 Two-third of the transaction volume in the project based market are related to energy
efficiency and renewable energy.
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16 July 2015
Slide 25
CDM Market Faces Challenges

Procedural inefficiencies and regulatory bottlenecks have strained the capacity of
the CDM infrastructure
- Out of 3188 projects in the pipeline (May 2008), 2022 are at validation stage
- Market participants report that it is currently taking them up to six months to engage a
Designated Operational Entity (DOE), causing large backlogs of projects even before
they reach the CDM pipeline
- Projects face an average of 80 days to go from registration request to actual
registration. The Executive Board (UN) has requested a review of several projects
received for registration, has rejected some of them, and has asked developers to resubmit their projects using newly revised methodologies.
- Project are currently taking an average of one to two years to reach issuance from the
time they enter into the pipeline.

Complex rules and capacity constraints

Delays can and do impact carbon payments.

Private companies and commercial risk.
- Companies involved have not treated the risks involved in utilising these financial
instruments.
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16 July 2015
Slide 26
Carbon Market Outlook

Carbon Market momentum is strong for now
- Created by regulation, it’s biggest risk is caused by the absence of market continuity
beyond 2012 and this can only be provided by policymakers and regulators.

The CDM is at a crossroads
- The EC post 2012 EU ETS proposal may have a negative effect on the project-based
market. By linking additional EU ETS demand for CDM and JI credits to the success of
post 2012 global climate change negotiations, there is a risk of slowing down the
momentum.

Time to re-think the CDM
- The CDM’s biggest strength is the ability to bring developing and developed countries
together to reduce emissions cost-effectively. As these efforts are being scaled up, the
future success of the CDM market is dependent on solving the current challenges.

The forest for the trees
- Next version of CDM needs to move away from methodologies that tries to account for
the last ton reduced from the atmosphere, and focus on catalysing step changes in
emissions trends and on creating incentives for large-scale, transformative investments
programs.
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16 July 2015
Slide 27
Climate
Change
Adaptation
Climate Change represents an opportunity
Impacts human
& natural
systems
The climate change encompasses
a wide area of sciences,
technologies and challenges that
are interlinked.
 Solutions to mitigate emissions
 Solutions to adapt to changes
Emissions
concentration
Mitigation
Adaptation
The Climate Change Services
IBU will focus on
Socio-economic
Development Path
 Continued growth in validation and
verification of CO2 quotas
 Develop competence and DNV
business in dedicated industrial
sectors
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16 July 2015
Slide 28
IBU Services


Profit and loss accountability
-
-
CDM validation and verification
JI determination and verification
Energy Efficiency services
Validation and verification of emission
of voluntary schemes offset projects
(VCS, Gold standards etc)
ISO 14064 (GHG accounting and
verification)
Carbon footprint
Carbon Neutrality
CCS Academy and Network
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Governance (in addition to P&L
services)
- EU ETS verification
Slide 29
DNV Organization

Hub and spokes structure, resource center and accredited unit

About 90 fulltime employees globally

Global capacity is our limitation – lack of qualified people

Cultural differences and local Kips is a challenge to the global service
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16 July 2015
Slide 30
Complaints: Often also other causes than “time”

Clients not providing sufficient evidences to DNV requests for corrective
action and clarifications (Cars, CLs)

Disagreement with client on the answers to Cars and CLs (DNV
disapproves the answers given, typically Norway taking the last “fight” on
technical details/ interpretations)

DNV waiting for more information from local project developer, while
global client is not informed of the local communication

Changes in EB requirements or EB interpretations during the validation/
verification process

Delay due to lack of capacity – globally and in Oslo (especially for difficult
methodologies or “borderline” projects with no easy yes/no solutions)
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16 July 2015
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Slide 32