large-scale solar in australia: past, present and futurepast, present and future matt walden –...
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![Page 1: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/1.jpg)
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Large-scaleSolarinAustralia:Past,PresentandFutureMatt Walden – ARENA Investment Director
19July 2016
![Page 2: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/2.jpg)
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Innovatorsandimitators,thematuringlarge-scalesolarmarketinAustralia
1. Whereislarge-scalesolartodayinitspathtowardsparity?
2. Whathasbeendonetobringdownthecost?3. Challengesandopportunitiesforlarge-scalesolarin
Australia4. Howhasthelandscapechanged?
Whataresomeofthethingsyouseeinamaturingmarket?Arewenowseeingtheminthelarge-scalesolarmarketinAustralia?
![Page 3: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/3.jpg)
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SolarPVisbridgingthecommercialitygapandCSTisonitsway
Demonstration Deployment
PilotScale LargeScale Pre-commercial CommercialTechnology Grant/W
Installed
OnshoreWind $0
SolarPV $0.2- $0.4
Bioenergy $0- $1.1
CST $0.9- $2.0 FutureCurrent
SolarPV,BioenergyandLargeCSTprojectsstillrequiregrantfundingtocoverthegapbetweenthecostoftheprojectandtheamountofcommercialdebtandequitytheprojectrevenuewillsupport(e.g.CSTprojectshaveacapitalcostof$5/Wbutwillonlysupport$4/Wofcommercialdebtandequityfunding;thebalanceneedstobesupportedthroughgrants)
Source:ARENAanalysis
![Page 4: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/4.jpg)
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0%
5%
10%
15%
20%
25%
0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
EOI Short List Full Application
$m
Project Total ARENA Funding % (RHS)
A33%dropintheARENAgrantaskbetweenEOIandFullApplication
80Projects
22Projects 20Projects
Althoughthereisabroadrange,projectsarebiddingforgrantfundsatlevelswellexceedingourexpectations
*Expected tobepresented forfinalboardapprovalinSeptember2016
![Page 5: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/5.jpg)
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Howdowemeasurethedistanceonparityofsolarwithwind?
0102030405060708090
100
Solar PV Wind
$/M
Wh
-13.
5 ye
ars
PPA Grant
$16/MWh
Isthevalueofwindandsolarequal?
Source:ARENAanalysis
![Page 6: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/6.jpg)
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12.0%
16.0%
0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%18.0%
11.11.21.31.41.51.61.71.81.9
2
Tracking Fixed
Fund
ing
% o
f cap
ital c
osts
EPC
Cost
s -$
/WDC
$/W (DC) - Range % Funding
Trackingstartingtoover-takefixedinvalueformoneyasEPCpricingfirms
EPCpricingishittinglowmarksastrackingstartstoshowvalueoverfixed– insomeareas
Source:ARENAanalysis
![Page 7: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/7.jpg)
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Whatisdrivingdownthecost?–DebtMarketAlargedriverhasbeenthedebtmarketdrivingdowncostofcapital
1. WearenowseeingPPADSCRs*aslowas1.25x2. Merchantdebtnowbeingofferedbythelargebanks3. Significantinterestfromoverseaslenders4. Longertenorandamortisationperiodsdecreasingrefinancingrisk
*Basecasedebtsizing
![Page 8: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/8.jpg)
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Whatisdrivingdownthecost?– PPAmarketIttookawhileforthefirstmajorsolarPPAtobesigned,butsincethen,solar’s valueisbeingrecognised.
1. AveragepricingintheQLDandNSWmarketisaroundthelow80s2. WAandSAwhilepricingishigher,haveotherchallengesto
overcome3. Statebasedprocurementsandprocessesarehelping
![Page 9: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/9.jpg)
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Whatisdrivingdownthecost?–SystemOptimisationCaretakentorecognisetheprosandconsofalocation
1. AC:DCsizing2. Fixedvs trackinginrelationtotimeofdaypricing3. MLF,DLFandgridconnection4. Modulequalityandlocationspecificmodulelossfactors
![Page 10: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/10.jpg)
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Continuedleadershiprequiredtobuildonthemomentumgained
Commercialise Solar PV
Unlocks5GWofSolarPV
ParitywithWind
TechdiversityinRET
Require$10bninvestmentand
1000jobs
AGL AND MOREE SOLAR FARMS
BroadennewgroundsinLSS
Operational,contributingtoNEM
Demonstratingsuccesstoother
businesses
Knowledgesharing
ARENAgrantaskfellby1/3
AREN
ALARG
ESCALESO
LARCO
MPETITIVE
FUNDINGROUND
CONTINUED
MOMEN
TUM
FullApplication phase
![Page 11: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/11.jpg)
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OpportunitiesandchallengesforlargescalesolarinAustraliaStorage
1. Batteries,Hydro,HydrogenandSolarthermal
WindandSolarco-location1. AECOMStudy
ARENA’sLSSRound1. KnowledgeSharing2. NSPexposuretosolarprojects3. Increasedexposureacrosstheindustry
![Page 12: Large-scale Solar in Australia: Past, Present and FuturePast, Present and Future Matt Walden – ARENA Investment Director 19 July 2016 22 Innovators and imitators, the maturing large-scale](https://reader034.vdocuments.us/reader034/viewer/2022051823/5fee39075cc7450d25425b12/html5/thumbnails/12.jpg)
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Areweseeingthesignsofamaturingmarket?
Thedevelopmentofthespecialists1. Constructioncompaniesnowseemtobethewinningbiddersin
theEPCmarket2. Increasedcompetitionofdebtmarketbothlocalandinternational3. Supplychainfamiliaritywithprojectsandprocess4. Increasedexposure,experienceandknowledgeacrosstheindustry
(advisors,regulators,communitiesandDNSPs)5. CompetitionandappetiteforRECsimproving
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