The global energy transition

The issues, impacts and Worley’s response

worley.com
What is the
energy transition? Click items to find out more

Decarbonization
The global community has entered a major new
energy transition and this will have a profound
influence on how humanity develops, uses and
benefits from energy. As a global player in the Climate change
energy, chemicals and resources sectors, the Worley
Group has an important role in this transition and

Developing more
this document provides our summary view on this Renewable energy
and responses to the key issues.

The world has been through fundamental energy

zero-emission energy
Electrification
transitions before, including the industrial revolution
involving the use of coal and another through the
options, including
transport revolution involving the use of oil and gas. their enablers such as
These were equally profound and disruptive, but as Digitization
a result a large fraction of the world’s population energy storage and
market reform
were pulled out of abject poverty and now enjoy a
high standard of living.
Developing world
But global responses to environmental imperatives
are now needed, while hundreds of millions of
people still live without modern energy resources.
Fortunately, both technological and commercial De-linking GDP
evolution are combining at the right time to provide
a pathway to a more sustainable energy future for
everyone. This is the energy transition and its core
elements are shown opposite. Circular economy

The global energy transition | The issues, impacts and Worley’s response 1
 This energy transition
is like nothing before
This energy transition is like nothing before, and will ultimately influence
everyone and every industry, from the simplest of cooking and heating
applications, to how we transport ourselves, to the way we design and operate
the most complex of heavy industries. It will also have significant challenges,
including not only treating the risk of climate change but responding to its
impacts, and require enormous capital investments and unprecedented global
cooperation to realize.

While political consensus remains elusive, already many businesses and some of
the largest energy companies are changing to align with this new transition, and
the energy landscape is shifting as a result. Over the next decades we will see this
transition play out at different paces in different regions. Ultimately, we believe it
is unstoppable, changing that energy landscape fundamentally.

The global energy transition | The issues, impacts and Worley’s response 2
What might the future look like?
No one can predict exactly how the energy transition will play out and there are significant differences
in opinion on the future. But earlier transitions happened fast and were disruptive and impacts of this
current transition are already obvious.

There are major changes occurring in electricity grids
globally as decentralized generation technologies
grow in numbers and are matched with energy
storage. A strong electrification drive is occurring
across various industries including transport. Green
hydrogen is emerging as a potential alternative to
gas in heating and many industrial markets, while
both carbon capture and storage technologies and
nuclear energy are seeing renewed interest. And data
analytics and digitization are weaving through this,
bringing new optimization opportunities and value to
energy end-users.
There is also significant evidence of climate change
impacts increasing globally, and a component of this
energy transition is adaption. This is responding to the
risk of direct asset impacts from increasing natural
disasters, but also secondary impacts including price
volatility, fuel scarcity and policy reaction.
Already, many energy users are considering How this mix will evolve is uncertain, but it is
alternatives to their traditional sources to useful to have goals to aim for and a view on
build resiliency, including fuel switching and how to achieve this. For this reason, the Worley
diversification to such things as gas or bio-fuels, Group made the decision some years ago to
hybrid plant operation and self-generation. In more align with the objectives of the United Nation’s
and more cases, this strategy also results in better Sustainable Development Goals, and uses the
overall economics. derivative International Energy Agency’s Sustainable
Development Scenario (IEA SDS) as a guide. The
We believe there is not one single technological
SDS is IEA’s path to align with these UN Goals, and
solution that will dominate the energy transition,
is a dramatic path difference to “current” (now) and
with the tasks so huge that a broad, diverse solution
“new” (announced but not implemented) policies as
mix is needed. Not all solutions will be popular, with
shown in the figure on page 6, through to 2040.
commercial, social and non-technical risk likely to
be significant hurdles. This energy transition will
also have to deal with complex problems, including
how to decarbonize heavy chemical and industrial
facilities, and heavy transport, and these will take
significant time, so doing better with the fossil fuel
resources we currently use is one important element
of the transition.

The global energy transition | The issues, impacts and Worley’s response 3
 WORLEY CLIMATE CHANGE POSITION STATEMENT

We recognize that climate change will have

significant implications for the industries we serve.
Together with our customers and industry partners,
we use the principles of EcoNomicsTM and the
UN Sustainable Development Goals to help drive
solutions for a lower carbon world. We are committed
to being part of the solution, to reducing our own
emissions intensity and protecting our people and
assets from the physical impact of climate change.

The global energy transition | The issues, impacts and Worley’s response 4
World primary energy demand and energy-related C02 emissions by scenario Achieving the Sustainable Development Scenario
will require being more energy efficient including
Bubble size represents size of global economy
evolving further the circular economies, with the
22,500 SDS seeing little growth in primary energy mix
through to 2040 despite the global economy
20,000 growing. Investment in traditional energy
2040 resources will still be needed, particularly to
17,500
2040 alleviate energy poverty, but cleaner sources
and the enablers for their use will dominate the
Energy demand (Mtoe)

15,000
investment outlook.
2040 2017
12,500

10,000

1990
7,500

17.5 20 22.5 25 27.5 30 32.5 35 37.5 40 42.5

Energy-related C02 emissions (Gt C02)

Source: IEA, WEO2018. All rights reserved. Sustainable development New policies Current policies

The global energy transition | The issues, impacts and Worley’s response 5
World primary energy demand by fuel and scenario Global investment in power by technology For energy producers and users the next few
decades may be a confusing time with the
Coal Gas Oil Nuclear Solar/wind Hydro Grids and
Coal Oil Gas Nuclear Renewables
and other battery uncertainty in outlook making commitment to
Mtoes
renewables storage
investment more challenging than ever. However,
20,000 1,400 while there is significant risk in that uncertainty,
this new energy transition is likely to represent
New policies
1,200 one of the greatest economic opportunities the
world has ever seen and a chance to put energy
Sustainable
15,000
development 1,000 and much of the world’s economy on a more
ecologically sustainable path.

USD billion (2018)

800

10,000

600

400
5,000

200

0 0
2017 2025 2040 2025 2040 2018 Annual average Annual average
2025 - 30 (NPS) 2025 - 30 (SPS)

Source: IEA, World Energy Investment 2019. All rights reserved.

The global energy transition | The issues, impacts and Worley’s response 6
Implications for energy,
chemicals and resources
The energy transtion is both a threat and an opportunity to businesses operating in the
Energy, Chemicals and Resources sectors. Energy production and use is fundamental to all of
these, and yet the energy transition may drive fundamental changes in the social, political and
economic value proposition that these businesses represent.

The global energy transition | The issues, impacts and Worley’s response 7
Energy transition examples across Worley’s sector designations

Upstream and Downstream Mining, Minerals Power and

Midstream and Chemicals and Metals New Energy
Buildings
Electrification
Energy efficiency
6%
Gas as a transition fuel Transportation
Hydrogen economy
14% Other energy
Fugitive emissions Biofuels Renewable energy

Distributed energy systems

10%
Carbon capture, use and storage Nuclear power Agriculture, forestry
and other land use
Waste-to-energy

24% Industry

Across these sectors Worley have observed responses utilising a range of 21%
technologies – some examples are given in the figure above using our sector
designations – but a focus point and a large energy transition driver is greenhouse
gas emissions. There are several contributing gases involved, the principal one
CO2, but in general these continue to grow globally and misalign with the UN’s Electricity and Approximate global
Sustainable Development Goals. As shown in the figure to the right, these heat production greenhouse gas emissions

25%
emissions come from a variety of sources but those in the energy, chemicals and by economic sector
resources sectors represent more than half of the issue.
Source: IPCC

The global energy transition | The issues, impacts and Worley’s response 8
Emissions risk is real and manifests as social license
pressure from the general public and action groups,
but also moves by shareholders, insurers, financiers
and policy makers to protect real or perceived
returns. While each stakeholder segment may have
different motives, such pressure is already driving
responses across these sectors. In some instances,
these responses have been completely business
changing with some charting a completely new
course for their future.
Cutting emissions in the electricity sector has
received close attention primarily as the responses
are simpler, with the obvious answer a move to
lower emissions generation. This is having an
impact through a switch to greater gas generation,
increased interest in nuclear power, but particularly
renewable energy which is now dominating new
capital expenditure. Some renewables are variable
in output, which brings its own issues as supply/
demand imbalances, but fortunately energy storage,
digital analytics, the rise of decentralized energy
systems and new flexible retail models are combining
to resolve this.
The global energy transition | The issues, impacts and Worley’s response
In chemicals and heavy industries the issues are more
complex as the nature of the processes involved are
far less flexible and more integrated, meaning change
is difficult. For this reason, industries such as cement
manufacturing, steel and other metals smelting, and
chemical based processes such as the petrochemicals,
ammonia and ethylene industries have received little
attention. At roughly 20 per cent of combined global
emissions, this attention will come.
Renewable energy offers solutions where the
electrification of previously fossil fuel supplied
processes is possible. Other solutions include
fuel switching to biomass and biofuels, and the
introduction of hydrogen as a displacer of gas and
fossil reducing fuels in smelting.
Hydrogen can be produced with lower emissions
from gas using carbon capture and storage (blue
hydrogen), or emissions free using renewable
powered electrolysis (green hydrogen), with many
trials underway including as a clean energy vector for
transport and heating.
In the mining industry, the energy transition has
been slower to impact primarily as the investment
horizons are short and change to the traditional
has been slow. However, we see movement
particularly on larger mines and processing facilities
driven in part by a demand for lower emissions by
shareholders, and a focus on Scope 3 emissions
being the emissions risk which transfers to those
customers using those mining products.
9
 Estimated source
of total final energy
consumption, 2017

The scale of the energy transition is truly huge, but

many solutions are already commercially attractive. But
79.7%
Fossil
it is still sobering to consider that the transition involves fuels
the movement away from fossil fuel dependency to
cleaner options, and despite strong growth in the latter
Nuclear
around 80 per cent of our energy remains to transition.
energy 2.2%
Most of this is in the energy, chemicals and resources
sectors, so there is a lot to do.

7.5%
Traditional
biomass

Modern renewables

4.2% Biomass, solar,

geothermal heat

1.0% Biofuels for transport

3.6% Hydropower

Wind, solar, biomass,

2.0% geothermal, ocean power

Source: REN21 Renewables 2019 Global Status Report, data reported as sourced from OECD/IEA

The global energy transition | The issues, impacts and Worley’s response 10
Our role in responding
Example recent energy transition projects from around the world undertaken by Worley
Click to explore our energy transition roles

Large scale electrolysis Power to gas

Solar microgrid Blending hydrogen into gas
Converting industry to 100% hydrogen
Grid resiliency Offshore topside substations Solar thermal in China
Once through cooling Emerging wave power technology

Industrial scale solar hybrid

Operating clean generation plant

Large wind farms

Hydro plant upgrades Green hydrogen to ammonia

Carbon capture and storage LNG facility solar/battery hybrid
Electrowinning using renewables
Renewable output forecasting

Biomass to replace coal

 Smart & Distributed Biomass and
Solar Wind Geothermal Hydrogen Hydropower
Energy waste to energy

166+ 437+ 75+ 134+ 31+ 20+ 200+

Solar PV projects Onshore wind projects Energy storage Biomass or Waste to Geothermal projects Green or blue Hydropower projects
projects Energy projects globally hydrogen roles
485 MW 310 MW undertaken globally, 10 GW+
Largest PV project Largest onshore wind 16 200 MW 1,520 MW including pilot plants Construction within
farm – 365 turbines in Battery (BESS) Fuel conversion from Ongoing asset the last 15 years
126+ 362 days projects coal to biomass services support for 30 GW
Solar CSP & hybrid over a decade at the Largest green 20,342 MW
projects 105+ 80 kW 20+ years largest geothermal hydrogen electrolyzer Largest hydropower
Smallest BESS Project Designed and field in the world, studied, combined project
Offshore wind The Geysers Power with offshore wind
projects operating a co-gen
Generation Complex
30 MW facility fueled partly
20+ 210 GW+
using landfill gas
2,600 MW Largest BESS Project
Hydrogen pathways
Total generating
Largest offshore wind capacity
farm 67+ 15 Million considered in
Gallons/year of commercial detail
Distributed energy
systems projects renewable jet fuels,
design, fabrication and
construction support
Over 17 years
Specialized demand
response and energy
efficiency global
experience