Shell scenarios, modelling and decision making Royal Dutch Shell plc September 6, 2017 makethefuture Royal Dutch Shell September 6, 2017
Guy Outen EVP Strategy & Portfolio Royal Dutch Shell Royal Dutch Shell September 6, 2017
Exploring Energy system was The Present The Path The Future alternative complicated futures Energy transition and digital: major disruptors FORECAST Past does not predict the future Forecasts are inappropriate Radically uncertain…
Scenarios are Scenarios are not forecasts; neither are they our business plan neither Shell considers multiple, bespoke scenarios relevant to decisions Scenarios usage ranges from evaluation of individual opportunities, to portfolio…
Shells strategy makethefuture Aspired Future World-class investment case World-class investment Leader: value + case Leader: value + influence influence Reducing our carbon intensity Shared value with society Reducing our…
Using scenarios Future worlds Value chain assessment* Recognising a range of 1 uncertain outcomes 2 Pace of new technology 3 Future World 4 5 Pace of demand growth Value Chains Consider a range of plausible futures…
Framework for decision making Clarity of objectives in uncertainty Strategy and aspired future External environment and Decisions based on hard and Analytic tools disruptors soft inputs Consider multiple futures Apply lenses…
Wim Thomas Chief Energy Adviser Royal Dutch Shell Royal Dutch Shell September 6, 2017
Introduction Scenarios explore how the Mountains/Oceans How scenarios inform world will work in the future, and is an essential front-end modelling input in modelling Different parts of the world will develop in their own…
Shell models Models underpin scenarios and strategic analysis Royal Dutch Shell September 6, 2017 11
World Energy Estimates energy demand holistically Model (WEM): Underpinned by demand, choice and supply modules Estimates global Uses resource constraints, build rates and prices to balance supply and demand energy demand Covers other…
WEM: Key drivers for demand Population Economic growth Environmental pressures 75 specific scenario-based inputs, considered by: Sector Carrier Energy source Geography Technology Resource availability Peoples choices…
WEM: Different development curves The Energy Ladder 1960 2016* by country, by sector Energy Ladders The relationship between income and energy use Estimate energy Developing nations tend to Primary energy/ (GJ/capita/year) use less…
1414 Sectors 10 Carriers WEM: Acknowledges different user Sectors 10 Carriers 18 Energy Sources Choice module preferences for technologies Ship Electricity Oil (Centralised / Determining the Natural Gas Passenger transport Rail…
WEM: World: Total Final Consumption by sector: Mountains World: Total Primary Energy: Oceans Example outputs EJ/year (energy carrier) EJ/year (energy source) A myriad of different slices through the output data set possible World:…
WEM: World: Total Final Consumption by carrier Example outputs EJ/year (energy carrier) Comparing two scenarios for consumer choices of what type of energy they want to use Decarbonisation and efficiency go hand-in-hand with…
WEM: World: Total Primary Energy Example outputs EJ/year (energy carrier) Comparing two scenarios for primary energy mix as a result of different policy, GDP, resources and innovation assumptions Of the New Lens Scenarios,…
Assessment as at 2015 Insights: Global Energy Oil, gas and coal expected remaining Sufficient renewable resources, but unequal Resources resources distribution database Renewables annual production potential Sufficient fossil…
Global Supply Estimates production at resource category and country level until 2100 Model (GSM) Each resource category develops through its own resource maturation chain Cost of supply curves control how much resource is economic to…
GSM: World: Total Oil Production (inc LPG/Condensate) World: Total Gas Production by gas type Example outputs Bln boe per year TCF per year Projecting oil and gas supply by type, region and resource category North America: Total…
Example outputs: Key assumptions: Modelling Battery costs continue to decline Regulation strengthens (e.g. ban internal combustion engine (ICE) vehicles in cities) disruption OEM vehicle manufacturers assumed to continue to develop ICE…
Example outputs: Passenger road transport makes up around a third Oil demand has fallen in OECD since 2005 Oil demand of global oil use Non-OECD oil demand growth 2.5 times the impact of OECD demand decline context An aggressive EV…
Guy Outen EVP Strategy & Portfolio Royal Dutch Shell Royal Dutch Shell September 6, 2017
Summary Complicated to complex context Understand multiple futures to frame decision-making Scenario thinking and holistic modelling is key Use multiple lenses, including minimise maximum regret Agile decision-making needed through…
Materials available online www.shell.com/ scenariosenergymodels Royal Dutch Shell September 6, 2017 26
Questions and Answers Guy Outen Wim Thomas EVP Strategy & Portfolio Chief Energy Adviser Royal Dutch Shell September 6, 2017
Biographies Royal Dutch Shell September 6, 2017
Guy Outen Executive Vice President Strategy & Portfolio Guy Outen was appointed Executive Vice President, Strategy & Portfolio for Royal Dutch Shell plc in 2014. Guy has worked in various commercial, new business and finance roles…
Wim Thomas Chief Energy Adviser Wim Thomas is Chief Energy Adviser and leads the Energy Analysis practice in Shell. His team is also responsible for Shells long-term global energy scenarios, informing Group Strategy. He has been…
Additional information Royal Dutch Shell September 6, 2017
Board and future Beliefs Uncertainties business environment Mega Trends Macroeconomics Example: Example: Sustained era of transition & volatility Political tensions & regional instability Emerging markets drive Global GDP increases…
Shell scenarios Identifying emerging challenges to guide us Globalisation, liberalisation, Social fragmentation & Era of volatile Changing sources of through change technology diffusion; environmental cohesion dilemmas; re- energy…
WEM: Countries modelled North America South America Europe/Russia Africa Middle East Asia/Pacific Darker-coloured countries are modelled individually. Lighter-coloured countries are modelled collectively as Rest of regions, such…
GSM: Countries modelled North America South America Europe/Russia Africa Middle East Asia/Pacific Rest of the world Royal Dutch Shell September 6, 2017
Loading...
