michael wilshire - accelerating the growth of clean energy

8/6/2019 Michael Wilshire - Accelerating the Growth of Clean Energy

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The 6 th Asia Clean Energy Forum, 23 June 2011 1/ / / /

/ / / / / / / / / / / / / / / / / / / / / / / / / / / /

ACCELERATING THE

GROWTH OF CLEANENERGYASIA CLEAN ENERGY FORUM 2011

23 JUNE 2011

MICHAEL WILSHIRE


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CONTENTS

1. About Bloomberg New Energy Finance

2. Clean Energy Investment Overview

3. Assessing the Effectiveness of Clean Energy Policy


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BLOOMBERG NEW ENERGY FINANCE (BNEF):COMPANY OVERVIEW

North AmericaNew YorkWashingtonSan Francisco

South AmericaSao Paolo

UK/EuropeLondonZurichParis

AfricaCape Town

Asia PacificBeijingHong KongNew DelhiSingapore

SydneyTokyo

BNEF Offices

Dedicated Accessto Global

Research Teams

Independent &Transparent

Analysis

Unrivaled In-depthIndustry

Interactions

Robust andProprietaryData Sets


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Policy Makers, Governments &Development Banks

BLOOMBERG NEW ENERGY FINANCE:A SMALL SELECTION OF WHO WE SERVE

Investors Investors across the financing continuum VC/PE, Project Investors (Debt/Equity) Public Market Investors - Specialist/Diversified Funds

Pension Funds, Hedge Funds

Corporations and Utilities


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CONTENTS





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$52bn

$76bn

$113bn

$151bn

$180bn $186bn

$243bn

48%

48%

34%

19%4%

30%

2004 2005 2006 2007 2008 2009 2010

GLOBAL TOTAL NEW INVESTMENT IN CLEAN ENERGY,$BN

Source: Bloomberg New Energy FinanceNote: Includes corporate and government R&D, and small distributed capacity. Adjustedfor re-invested equity. Does not include proceeds from acquisition transactions


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TOTAL NEW INVESTMENT IN CLEAN ENERGY BY REGION,2007 10 ($BN)

Source: Bloomberg New Energy FinanceNote: Includes corporate and government R&D, and small distributed capacity. Adjustedfor re-invested equity. Does not include proceeds from acquisition transactions

61.947.7

41.2

70.2

59.450.5

75.5

48.6

62.4

94.4

65.8

82.8

EMEA AMER ASOC

2007

2008

2009

2010



DEVELOPMENT BANK FINANCING OF CLEAN ENERGYPROJECTS $BN

Source: Bloomberg New Energy Finance, development banks

1.21

0.97

1.53

0.70

0.61

0.21

0.12

0.50

0.42

0.12

2.04

1.68

1.82

0.91

1.13

1.55

2010

13.54

5.41

0.820.60

3.15

2009

8.92

2.68

2.24

2008

10.98

1.36

6.21

2007

4.53

KfWAsian Development BankChina Development BankOther

EIBBNDES



0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

800 1,000 1,200 1,400 1,600kWh/kW/year

2015LCOE

Average residential power price

Japan

Spain

Germany

Denmark

France

Greece

Netherlands PortugalUKSlovakia

South KoreaUS

excl. CA

China

South Africa

10GW

50GW

Residentialpower market

Hawaii

ItalyTurkey

$/kWh

RESIDENTIAL PV PRICE PARITY

Source: Bloomberg New Energy FinanceNote: LCOE based on 6% weighted average cost of capital, 0.7%/year module degradation, 1%capex as O&M annually. CA is California.

2010LCOE

Average residential power price

More sun

CACA



CONTENTS





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CUMULATIVE GRID CONNECTED WIND CAPACITY INCHINA (GW)

Source: China Electricity Council, Bloomberg New Energy Finance

1.9

11.4

10.59.87.0

9.4

3.8

11.1

1.70.7

75.3

69.169.074.2

69.171.272.273.2

63.3

42.5

Mar-11

33.9

Dec-10

31.1

45.0

2.64.2

2006

33.9

Sep-10Jun-10

20.1 23.4

2009

25.5

16.1

31.6

21.8

Mar-10

27.1

2007 2008

12.2

8.45.9

Grid connected (GW)

% connectedUnconnected (GW)


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GLOBAL WIND AND SOLAR INSTALLATIONS BY POLICYMECHANISM, 2010

Source: Bloomberg New Energy FinanceNote: All US and India installed capacity treated as 'tax incentive' scheme, China between 'feed-in tariffs' and 'tenders'.

9%

Feed-in tariff

Tax incentive

Trade & quotaMarket based

Tendering

Solar

100% = 36 GW

85%

7%

8%

Wind

100% -= 194 GW

64%

23%

3% 1%


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The 6 th Asia Clean Energy Forum, 23 June 2011 13/ / / /Source: Bloomberg New Energy Finance

WIND PENETRATION AND TARIFFS UNDER DIFFERENTPOLICY REGIMES IN 2010 (%, EUR/MWH)

Note: Wind installations compared to total installed capacity in 2009. Tariffs levelised over 20 years ofplant operation. Bubbles represent total wind installed capacity in each market by 2010.

Germany

Spain

Italy

France

UK

Denmark

PortugalNetherlands

Ireland

Greece

Poland

IndiaUSA

China

25

50

75

100

125

150

0% 5% 10% 15% 20% 25% 30% 35%

Feed-in tariff

Tax incentive/mixed

Trade & quota

20GW

High deploymentrates at lower costs


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PVS SHARE OF ELECTRICITY PRODUCTION VERSUS PVS

COSTS AS % OF GDP

Note: Cost is net of wholesale electricity price. Size of bubble is cumulative installed PV at end of 2010,cost and PV electricity supply calculated on the basis of 2010. Source: Bloomberg New Energy Finance

France

Ontario

Spain

Germany

Italy - includingadditional 4GW

Italy - gridconnected only

Czech Republic

0.0%

0.1%

0.2%

0.3%

0.4%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%

5GW

Share of GDP

Share of Electricity Production


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ONSHORE WIND PPA PRICES UNDER TENDERINGSYSTEMS IN LATIN AMERICA AND CHINA ( /MWH)

Source: Bloomberg New Energy Finance

54.654.856.356.962.062.864.2

92.7

108.9

Peru Brazil2010 (A-3)

China(average)

Brazil(reserve)

UruguayBrazil2009 (A-3)

MexicoArgentinaBrazil(feed-in)

-50%


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IMPACT OF FINANCIAL POLICY ON LCOE (EUR/MWH)


69

55

67

BaseLCOE

Financialstructurepremium

FinalLCOE

12 14

Equitymargin

Tariff

6867

46

BaseLCOE

Financialstructurepremium

FinalLCOE

21

1

Equitymargin

Tariff

US TAX EQUITY MARKETGERMAN FEED-IN TARIFF MARKET


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POLICY MEASURES - CONCLUSIONS


Feed-in tariffs minimise risks for investors across the value chainas they provide long-term cash flow visibility, though it is essentialto manage the risk of capacity overruns and costs to governments.

Policy volatility and generation price uncertainty leads to higherfinancial costs and a combination of lower returns fordevelopers or higher prices for consumers.

Tenders result in the lowest prices but the risks that aggressivebidding poses to project financing and deployment need to bemanaged.

We expect to see a strong policy shift with a focus on loweringsystem costs: several trade & quota systems may beabandoned while competitive tenders will increase.


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COPYRIGHT AND DISCLAIMER

This publication is the copyright of Bloomberg New Energy Finance. No portion of this document may bephotocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any

way without prior consent of Bloomberg New Energy Finance.

The information contained in this publication is derived from carefully selected public sources we believe are

reasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be

construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment of

the author of the relevant article or features, and does not necessarily reflect the opinion of Bloomberg New

Energy Finance. The opinions presented are subject to change without notice. Bloomberg New Energy

Finance accepts no responsibility for any liability arising from use of this document or its contents. Bloomberg

New Energy Finance does not consider itself to undertake Regulated Activities as defined in Section 22 of the

Financial Services and Markets Act 2000 and is not registered with the Financial Services Authority of the UK.


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ASSESSING THE EFFECTIVENESSOF CLEAN ENERGY POLICYMICHAEL WILSHIRE, GLOBAL HEAD OF ANALYSIS,[email protected]
mailto:[email protected]:[email protected]

michael wilshire - accelerating the growth of clean energy

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