analysing the growth of solar in the world - · pdf fileanalysing the growth of solar in the...

Alternative energy

Specialist investment. Alternative energy investment

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Analysing the Growth of Solar in the world

Presentation to Clean Power Asia 2013 Strictly Private and Confidential

Alternative energy investment

Absolute returns

Glennmont Partners

About Glennmont Partners

Solar Attracting Investment

Conclusions

Clean Energy – Where are we

Page 02

Dedicated Renewable Focused Asset Manager

Alternative energy


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ABOUT US Within this section

1. Overview Glennmont


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Experienced Team of Clean Energy Specialist

Full dedicated investment

professionals Full dedicated asset

management professional

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60+ years of combined experience In-the-field qualifications Local and same languages as sellers Agility to sort and execute opportunities

Jordi

Francesch

Joost Bergsma

Managing Partner /

CEO

Francesco

Cacciabue

Partner

Wind / Biomass

Scott Lawrence

Partner

Solar

Peter Dickson

Partner

Wind / Biomass /

Asset Management Team

Significant team size

Adam

Oubuih

Claudio

Vescovo

Henrik

Urbansky

George

Thomson

Joshua

Matthews

Romain

Keyen

Tony

Bolden

Geoff

Hoffheinz

Investment Team


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Germany

Delivering a Sizeable European portfolio Large Portfolio with value in Excess of Euro 1.0 bn

Wind markets / Wind Asset

Solar PV markets / Solar Assets

Biomass markets / Biomass Assets

France Italy

Greece

Portugal

Spain

UK

Benelux

Nordics

2

14

4

12

1

3

8

6

9

10

5

13

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7 11


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Recent Investments - Diversification

1. First sizeable Biomass Power Generation Plant in the UK

2. Largest Solar Roof Top Plant in France

3. Sizeable Portfolio of Wind Assets in France

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> 60yrs > 30 # Development Construction Management

Exits

Clean Energy Depth of Experience Clean Power Investments


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Renewable Energy: Looking Back to Look Forward

Within this section

1. Perspective on Renewable Energy

Page 07


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Very Much a Key Political Priority

Page 08


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Energy Security is #1 Driver Particularly in Europe

Energy Growth

Energy demand continues to

grow particularly in emerging

markets as population grows

and nations become wealthier

Environmental Concerns

Global Warming needs to be

decreased to avoid serious

geo political problems and

significant abatement cost

Energy Security

Classic fossil fuels are

running out

Remaining fossil fuel is

concentrated in small number

of politically sensitive regions

Political Support

Climate change and Energy

Security have been at the top

of the agenda politically for a

number of years

1 2

4 3

CO2 Reduction

Political Support

Energy

Growth

Energy

Security

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Clean Energy

CAGR since 2004 of 29% and during the last four years of financial crisis of 13%

More new investment in Clean Energy than in conventional electricity

Growing, Mature and Secure Significant Growth

2004 $33 bn 2008 $159 bn 2011 $260 bn 2010 $247 bn

Source: UNEP Global Trends in Renewable Energy Investments in 2011 and Bloomberg Jan press release

Asia

South America

Mid East Africa

Europe

North America

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11

Europe – Italy achieved targets and Germany

Asia – across Asia in China, India, Thailand etc

Solar – Europe decreasing in Importance

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2005 2006 2007 2008 2009 2010 2011

80 GW

10 GW

40 GW

Source UBS market outlook 2013


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Solar PV Module Pricing Declined – More to Come?

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13

Clean Energy Is Growing ….. Up Rapidly

13

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Solar PV Continued Sustainable Growth

Market Environment

2012 has continued to see pressure on module manufacturers and component suppliers

Delivery terms of modules are buyer friendly as are enhanced warranties

Solvency of manufacturers is stable, but needs to be watched. Commoditisation of PV modules can mitigates solvency concerns

Grid Parity is no longer a dream. Projects in regions with high power prices and high levels of irradiation can be competitive with traditional sources of power. PPA’s should be a reality by 2014 with first European markets likely to be Italy and Spain

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Absolute returns Alternative energy


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Solar Financing – Debt and Equity

Within this section

1. Attracting Debt Finance

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16

Clean Energy Partners

What will the future bring ? – Opportunities and Financing

New Markets

Debt Capital

Equity Capital

1

2

3

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Solar is an Attractive Infra Investment

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1 Asset Provide Essential Service to

Community

Electricity has no

substitute

2 Assets Monopolistic Characteristics Not Free Market

3 Assets Regulated/ Long term/ Contracted

4

Assets Low Correlation to the economic

Cycle Electricity/ Utility

5

Assets have an extensive technical and

economical life 25 years +

6 Revenues are often inflation linked Energy

7 Infrastructure have a high Debt Capacity Yes

8 Assets are Capital Intensive

Clean Energy still infrastructure as we move towards Grid Parity


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Investors are driven by Returns and Risk

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RISK

RETURN


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Detailed Risk Mapping at Individual Project Level

Debt

Financing

Leverage

Interest

Rate

Counter-

party

Resource

risk

Wind hrs

Solar hrs

Rainfall Feedstock

In biomass

Currency

Taxation

Changes

Feed in

Tariff

Regulatory

Risk

Equipment

Suppliers

Markets Domestic

Political

Technology Legal

Risk

Renewables

Projects

Land Lease

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20

| 03/05/2013 | Clean Energy Partners

Solar Regulatory Risk - At the Forefront of Capital’s Mind

There are known

knowns. These are

things we know that

we know. There are

known unknowns.

That is to say, there

are things that we

know we don't know.

But there are also

unknown unknowns.

There are things we

don't know we don't

know

Regulator Do’s and Don’ts

• Do believe clean energy

is here to stay

• Don’t be surprised that

subsidies decrease

• Do reject any form

retroactivity

Do Don’ts

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Solar Funding - Attractive

Signpost Implication

Liquidity

Funding Costs

Risk

Good Appetite for Yield

amongst institutional investors

Long term to match asset

profile

Regulatory Certainty is a must

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Solar Energy Car Park Investment – Easy to Integrate

Transaction description Key Features

Five building integrated

Solar power plans on car

Manufacturer’s site

55 MWp

Debt financed by bank

And institutional investor

Supported by 20 Year

Feed in Tariff


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Solar Power – Looking Forward

Signpost Implication

Credit Default Risk

Grid Parity

Risk

Emergence of insurance

wrappers

Opportunity not a threat

Regulatory Certainty is a must

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4. Conclusions

24 Page 024


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25


Solar Power Energy 3.0 …. A bright future

Political support to continue

Capital available but selective

Costs to reduce

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26


Every morning in Africa a

gazelle wakes up. It knows it

must run faster than the

fastest lion or it will be

killed.

Every morning a lion wakes

up. It knows it must outrun

the slowest gazelle or it will

starve to death.

It doesn't matter whether

you are a lion or a gazelle --

when the sun comes up,

you had better be

running."

Keep Moving

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27


Q & A

Joost Bergsma

CEO / Managing Partner

Glennmont Partners

+44 203 675 7519

Email: [email protected]

Web: www.glennmont.com

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mailto:[email protected]


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Glennmont Partners Contact Details

Joost Bergsma

Managing Partner/ CEO

Glennmont Partners

+44 203 675 0181

+44 7738 189 389


Peter Dickson

Partner / Technical Director

Glennmont Partners

+44 203 675 0184

+44 7738 190 391


Scott Lawrence

Partner

Glennmont Partners

+44 203 675 0187

+44 7841 695 082


Francesco Cacciabue

Partner / CFO

Glennmont Partners

+44 203 675 0183

+44 7795 258 984


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Disclaimer

This material is provided by Clean Energy Partners LLP on a confidential basis for the sole purpose of providing information about Clean Energy Europe Fund II (the “Fund”) to identified persons at their request to whom this material may lawfully be provided in any particular jurisdiction, and therefore it should not be disclosed or distributed to any other person, nor copied or reproduced in whole or in part. No offer to sell or solicitation of an offer to buy interests in any fund, or any other securities, to or from any person in any jurisdiction is being made by the communication of this material and under no circumstances should this material be used for or in connection with any such offer or solicitation to or from any person in any jurisdiction in which such offer or solicitation would be unauthorised and/or unlawful. By accepting and not immediately returning this material, recipients warrant that they qualify under applicable laws or restrictions as a person to whom this material can be provided. Recipients are required by Clean Energy Partners LLP to inform themselves about, and to observe, any such applicable laws or restrictions.

None of Clean Energy Partners LLP, its associates or their respective directors, officers, employees, partners, members, agents, advisers, representative or consultants: (i) makes any representation, warranty or guarantee, express or implied, as to the fairness, accuracy, completeness, reliability, reasonableness or currency of the information or statements contained in this material; or (ii) undertakes to provide any additional information or correct or update any information or statements (including, but not limited to, forward looking statements) contained in this material which it becomes aware are or have become incorrect or incomplete due to any subsequent developments, new information or otherwise, and without prejudice to any liability for fraudulent misrepresentation they will not be responsible or liable whatsoever with respect to any use or reliance by any person upon any of the information or statements contained in this material. Any past performance information contained in this material is not an indication of future performance. Any forward looking statements, results, opinions, valuations or projections are based upon current assumptions and Clean Energy Partners LLP own assessment and interpretation of information available to it as at the date of this material, may be simplified and may depend upon other events, risks or uncertainties, not taken into account by Clean Energy Partners LLP or outside of its control, and therefore actual results may be materially different from any such statement, result, opinion, valuation or projection.

Nothing in this material should be construed as investment or any other advice or as expressing any views as to the suitability of investment to the individual circumstances of any recipient. The value of investments can go down as well as up and investors in the Fund may not get back all or any of the amount invested. Recipients should conduct such investigations as they deem necessary and seek their own legal, investment, accounting and tax advice to make an independent determination of the suitability and consequences of any investment.

Clean Energy Partners LLP is authorised and regulated by the United Kingdom Financial Services Authority.

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analysing the growth of solar in the world - · pdf fileanalysing the growth of solar in the...

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