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Offsite Renewable PurchasingAIE YEP

8th November 2016

Jonathan Prendergast0403 602 426

UTS TO SINGLETON SOLAR PPA

THIS PRESENTATION

• Why?

• The UTS-Singleton Project

• Some Details of Offsite Solar

• Conclusions

SOLAR POTENTIAL IN AUSTRALIA

Source: Andrew Blakers via ABC online

CURRENT INVESTMENT STALLING

CURRENT INVESTMENT STALLING

PROJECTDEVELOPMENTCHECKLIST

OptionforLand

Concept Design&CostEstimation

Feasibility &Optimisation

LocalSupport &PlanningApproval

ConstructionTender&Contracts

Debt&EquityArrangement

HighRECSprices

Electricitysalesoff-takeagreement X

MARKET FORCES

Source: Origin Investor update - June 2016

WHO CAN MAKE IT HAPPEN – INVESTORS?

WHO CAN MAKE IT HAPPEN?

Investors? • Moresolar=lowerprices=> reducedreturns

• NeedcontractedrevenuesX?

Utilities? • Ownexistinggenerationassets• Lowprices =>lowerrevenues• Increaseddeployment=>lowercostsolar• Uncertainfuture- disruption

X?

CorporatesCustomers

• Don’towngenerationassets• Consumingelectricityfornext20-50years

=certainty• Lowerenergyprices=good!

OFFSITE RENEWABLE IN THE US

Publicly announced contracted capacity of corporate Power Purchase Agreements, Green Power Purchases, Green Tariffs, and Outright Project Ownership in the United States and Mexico, 2012 – 2016. Excludes on-site generation such as rooftop solar PV. Last updated: May 10, 2016.

Corporate Renewable Deals2012 – 2016

Copyright 2016 by Rocky Mountain InstituteFor more information, please visit http://www.businessrenewables.org/ or contact BRC@RMI.org

GoogleApple

Apple

GoogleMicrosoft

BD

Facebook

IKEA

Google

Mars

MicrosoftWalmart

Yahoo IKEA

Apple

Google

Procter & Gamble

General Motors

Kaiser Permanente

Kaiser Permanente

Dow Chemical

Walmart

AmazonAmazon

Cisco

FacebookAmazonSwitch

HPEEquinix

Procter & GambleEquinixEquinix

Owens CorningOwens Corning

Amazon GoogleAppleSwitch

BloombergGoogle

Google

Google General Motors

CorningPhilipsSalesforce

Salesforce

Lockheed Martin

Steelcase

3M

Iron Mountain

Google0.05

0.56

1.18

3.21

0.43

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2.2

2.4

2.6

2.8

3

3.2

3.4

2012 2013 2014 2015 2016

Capacity (GW)

RENEWABLE PURCHASING OPTIONS

üGreenpower

üRooftop Solar

üDirect Offsite Solar

üLREC Purchase under contract

üVirtual PPAs

üRetailer Aligned

CURRENT SOLUTIONS - GREENPOWER

Electricity

Retailer $$9 c/kWh

4 c/kWh$

5 c/kWh

Electricity

Customer

NEW SOLUTIONS – RETAILER ALIGNED

$$6 c/kWh

8 c/kWh

$

5 c/kWh

Electricity

Retailer

Electricity

Customer

UTS-SINGLETON SOLAR PROJECT

‘Think Big, Start Small’

UTS SINGLETON SOLAR PROJECT

Electricity Retailer

$

$

5-8 c/kWh

$

5-8 c/kWh

15% Supply

85% Supply

5-8 c/kWh

Electricity Only

SOLAR FARM REVENUES

Electricity Sales Revenue – c/kWh

RECS Sales Revenue – $/MWh

SOLAR FARM ASSET

ADVANTAGES

• Don’t need suitable roof

• Can be sized to suit demand

• Great for tenants

• Can move with the customer

• More secure property arrangements for investment by 3rd

parties

• Just contracts

THE NUMBERS – ILLUSTRATIVE COSTS

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

-60% -40% -20% 0% 20% 40% 60% 80% 100%

OffsiteSolarCostDifference

IncreaseinOverallElectricityBill

CONCLUSIONS

• Attractive to corporate customers

• Direct Offsite potentially most cost effective

• Other models emerging for beyond 30%

• Potential opportunity for 100kW to ~2,000kW projects

WHAT DOES A RENEWABLE PROJECT NEED?

Investor/Owner

Builder/DeveloperLand/Site

Customer

QUESTIONS?

Jonathan Prendergast – 0403 602 426 – jonathan@prendergastprojects.com.au