20 November 2018

Electrical Propulsion Onwards and Upwards

Robert Thomson

Partner

Roland Berger

Telephone: +44 (0) 203 075 1100

e-mail: robert.thomson@rolandberger.com

2

Agenda

2

Developments in aircraft electrification

A. Environmental pressures

B. Implications for the aerospace industry

C.

A. Developments in aircraft electrification

4

Aircraft electrification has two elements: the More Electric Aircraft (MEA) trend, and the Electrical Propulsion (EP) revolution

It is not a question of if, but when

Next gen aircraft

1967

Boeing 737

2007

Airbus A380

2011

Boeing 787

2025+

> Fuel pump > Landing gear actuation > Wing anti-icing > Flight controls > Environmental Control

System (ECS) > Engine start & controls > Brakes actuation > Thrust reverser

> Cabin equipment > IFE > Lighting > Avionics

> Fuel pump > Landing gear actuation > Environmental Control

System (ECS) > Wing anti-icing > Flight controls > Engine start & controls > Brakes actuation > Thrust reverser

> Cabin equipment > IFE > Lighting > Avionics

Pneumatic Hydraulic Mechanical

Electrical

> HP fuel pump > Landing gear actuation > Environmental Control

System (ECS) > Wing anti-icing > Flight controls > Engine start & controls > Brakes actuation > Thrust reverser

> Cabin equipment > IFE > Lighting > Avionics

All- electric Motor Battery Fan

Turbo- electric Turboshaft Motor

Motor

Fan

Fan

Generator

Hybrid-electric

Battery

Turboshaft

Turbofan

Motor

Motor

Fan

Fan

Fan

Motor

Generator

Battery

Series hybrid

Electrified components

Parallel hybrid

More Electric Aircraft (MEA) Electrical Propulsion (EP)

5

The pace of introduction of new, electrical propulsion developments has risen very sharply in the past few years

2%

26 22

2011 2009

16

39

2015

33

2014

20

2010 2012 2016

7

Pre-2009

48

2013

5

2018 YTD

43%

~130

10%

2017

45%

92

1) Only including developments with first flights after 2010, excluding UAVs and purely recreational developments

Source: Secondary research, Roland Berger

Large commercial Regional

Urban air taxi

General aviation

c. +40

c. +80

Known electrically-propelled aircraft developments by announcement date, 2009-Oct 20181) [cumulative #]

Electrical Propulsion (EP)

6

The Urban Air Taxi and General Aviation segments comprise c. 90% of aircraft development programmes, with two thirds all electric

Distribution of ~130 publicly known electrically propelled aircraft programmes, Oct-181)

1) Only including developments with first flights after 2010; 2) Mainly turbo-electric

Hybrid propulsion2)

30%

All electric propulsion

70%

General aviation (GA)

43%

9%

34%

Urban air taxi (UAT)/eVTOL

45%

13%

32%

Regional aviation

10%

6%

4%

Large commercial aircraft

2%

2%

Electrical Propulsion (EP)

7

The traditional aerospace centres of Europe and North America are home to the majority of electrically propelled aircraft developments

Distribution of ~130 publicly known electrically propelled aircraft programmes, Oct-181)

Wright Electric Los Angeles, CA, US Type: Commercial Propulsion: Hybrid Passengers: 120-180 First flight: 2030

Zunum Aero Seattle, WA, US Type: Regional Propulsion: Hybrid Passengers: 6-12 Thrust: 2 ducted fans First flight: 2019

Ehang 184 Guangzhou, China Type: Urban air taxi Propulsion: Battery Passengers: 1 Thrust: 8 propellers First flight: 2016

Airbus/Siemens/Rolls-Royce E-Fan X Munich, Germany Type: Regional Propulsion: Hybrid Passengers: 50-100 Thrust: 3 turbofans + 1 hybrid First flight: 2020

Vickers WAVE eVTOL Hamilton, New Zealand Type: Urban air taxi Propulsion: Hybrid Passengers: 4 Thrust: 8 propellers

Embraer X eVTOL/Uber Elevate São José dos Campos, Brazil Type: Urban air taxi Propulsion: Battery Thrust: 1 ducted fan and 8 propellers

Aston Martin Volante Cranfield, UK Type: Urban Air Taxi Propulsion: Hybrid Passengers: 3 Thrust: 3 propellers First flight: 2020

Eviation Alice Kadima, Israel Type: Regional Propulsion: Battery Passengers: 11 Thrust: 3 propellers First flight: 2019

Europe

58

North America

55

South America

3

Israel

3

Russia

5

China

2

South Korea

1 Japan

2

Australia

3

New Zealand

1

1) Only including developments with first flights after 2010

Electrical Propulsion (EP)

8

A&D professionals broadly agree that a hybrid-electric aircraft could enter commercial service by the early 2030s, while all-electric is less clear

1

9

7

14

3 2

2017

-202

0

2036

-204

0

2041

-204

5

2021

-202

5

2026

-203

0

2031

-203

5

2046

-205

0

2051

-205

5

2056

-206

0

2061

-206

5

2066

-207

0

2071

-207

5

1

7

5

7

4 5

3 2

1 1

2017

-202

0

2021

-202

5

2026

-203

0

2046

-205

0

2061

-206

5

2031

-203

5

2051

-205

5

2036

-204

0

2041

-204

5

2056

-206

0

2066

-207

0

2071

-207

5

Hybrid-electric aircraft All-electric aircraft

Mean

2032 Minimum

2018 Maximum

2050 Standard deviation

7.3 Mean

2043 Minimum

2025 Maximum

2075 Standard deviation

12.9

Median

1) Results based on a 2017-2018 survey of ~40 Aerospace & Defense professionals

Results from Roland Berger survey of Aerospace & Defense professionals, 2017-75 [#]1)

Electrical Propulsion (EP)

B. Environmental pressures

10

A transition to electrical propulsion is required if aviation is to remain close to today's contribution to global CO2 emissions

A Baseline: continued industry evolution at current pace > Fleet growth of 4.0% p.a. to 2050, aircraft retirement age of 25 years > Fuel burn reduction of 1% p.a. on new aircraft through technology improvement with

cap at 15% relative to today as technology matures > No production of electric or hybrid regional or large commercial aircraft

B Accelerated evolution of today's technology > Fuel burn reduction of 2.5% p.a. on new aircraft through technology improvement

with cap at 42% relative to today2)

> All other assumptions as Scenario A

C Adoption of electric propulsion due to "normal market forces" > Production of hybrid-electric aircraft starts in 2035 > Production of all electric aircraft starts in 2040 > All other assumptions as Scenario B

D Regulatory-driven transition to electrical propulsion > Forced retirement of all existing aircraft at 10 years with replacement by electric from

2030 onwards > All other assumptions as Scenario C

Source: Roland Berger emissions model, IPCC, AG analysis, EU Clean Sky

1) For each scenario, the range is obtained by considering different global emissions Representative Concentration Pathways. Namely, RCP 2.6 for the maximum value and RCP 8.5 for the minimum value. RCP 4.5 is used to obtain the average; 2) Based on Clean Sky assumptions for airframe, system and network improvements

A B C D Today ~3%

~5%

~24%

~8%

~4%

~19%

~6%

~11%

~4% ~5%

~6%

~3%

~3%

Estimate for aviation's share of global anthropogenic CO2 emissions1) in 2050 [%]

11

Scenario D would require a rapid transition to hybrid and electrically propelled aircraft, adding up to c. 70% of the global fleet by 2050

Source: Flight Global, Boeing, Airbus, External research, Roland Berger

0

100

30

10

70

40

20

80

50

60

90

2047

Hybrid-electric

2040

2049

2050

2041

Conventional

2039

All-electric

2045

2026

2035

2024

2044

2027

2030

2037

2029

2031

2036

2028

2025

2034

2032

2038

2021

2023

2022

2020

2048

2043

2033

2042

2046

2017

2016

2019

2018

Global aircraft fleet1) breakdown by propulsion type – Scenario D, 2016-50 ['000 aircraft units]

1) Includes LCA, RCA and freighters

'000 aircraft units

C. Implications for the aerospace industry

13

Significant progress has been made against the barriers to electrical propulsion…but a number of questions are yet to be answered

Landscape of barriers for aircraft electrification

Passenger demand

> Consumer preference to fly "green"/low noise a/c

> Consumer acceptance of autonomous flight

> Willingness to pay for Urban Air Mobility

Airline demand

> Airline willingness to take new technology risk

> Airline ability to maintain/increase profits with electric propulsion

> Demonstrating similar/reduced cost per seat mile

Effective batteries

> Battery performance

> Battery safety/hazard containment

Efficient electric machines

> Light, high power density generators and motors

> Power electronics

> Safe and light high voltage distribution

Autonomous flight technology

> Essential for UAT business case

Technology Regulation driving change

> Emissions controls

> Noise targets

Regulation adapting to change

> Certification of novel technology

> Air traffic management of Urban Air Taxis

> Management of data & network security

Infrastructure requirements

> Implementation of charging points in airports

> Additional solutions for electricity generation

Policy Market demand

What product architecture(s) will emerge to overcome these barriers?

14

Will electrical propulsion power Airbus and Boeing's next aircraft which are to expected to enter service in the early 2030s?

1965

1974

A300

1988

A320 1993

A330

A340

2007

A380

2014

A350

2030

A30X

Expected development

and introduction of a commercial scale hybrid-

electric power system

1965

737

1969

747

1982

757

767

1995

777 2030

NSA

2011

787

12 years 16 years 8 years

Overview of all-new historical and future civil aircraft development programmes

15

Which type of player will emerge to control electrical propulsion systems' development & certification?

Source: Airbus, Rolls-Royce, Siemens, Roland Berger

Airframer

Electrical systems company

Engine company

16

What clean energy generation solutions will be required to power future airports?

Energy demanded by UK airports and potential solutions for London Heathrow (2050)

Source: UK DfT, National Grid, Innovata, Roland Berger

UK power demand for electric aircraft (MW)1)

c. 30x current LHR area2)

c. 2,000 90-m tall wind

turbines

c. 55x current LHR area3)

c. 0.5% of UK 2050 generation capacity4)

c. 1/3rd of nuclear power station Hinkley

Point C5)

Solar Onshore wind Grid Nuclear

Potential solutions for London Heathrow

MAN 300

BHX 200

LHR 1,300

LGW 400

Rest of UK 1,300

Σ 3,500 MW

1) Employing electrification scenario D, and assuming 24 hour constant charging for replacement batteries; 2) Land use 0.03km2/MW for concentrated solar power and 10% load factor; 3) Land use 0.15km2/MW and average turbine power 2.5MW, based on Whitelee Wind Farm, largest onshore wind farm in the UK, and 28% load factor; 4) Based on National Grid forecast without electric aircraft; 5) Station with 2 EPR reactors totalling 3,200 MW

17

Airframers

> What electrical propulsion segments should you play in?

> How to get involved? (venture capital model, direct R&D, development partnerships?)

Systems suppliers

> Where to focus R&D efforts? > Who to partner with and how

(e.g. start-ups)? > How to capitalise on

existing capability?

Sub-tier suppliers

> How to develop product portfolio to be ready for an electrically propelled future?

> How to partner with OEMs, suppliers and start-ups to keep pace with technological development?

Engine companies

> Focus on hybrid-electric or battery-electric technology?

> How to capitalise on existing capability?

> What electrical propulsion segments should you play in?

Aerospace incumbents must begin considering how to survive – and thrive – in an electrically propelled future

Key questions for aerospace players in electrical propulsion

Operators

> Who will emerge to operate the new aviation segments (sub-regional, Urban Air Taxis)?

> Will safety levels for these be the same as traditional aerospace?

Policy makers

> How can airworthiness authorities enable the trend but maintain safety standards?

> How will airspaces change? > How will public infrastructure

evolve to enable the shift?