Does renewable energy need support mechanisms? Gianni Operto, Investment Director

Transcription

1 Does renewable energy need support mechanisms? Gianni Operto, Investment Director Zürich, November 11, 2009

2 Good Energies Mission Mission Energy transition & poverty alleviation Investment strategy Renewable energies & energy efficiency Diversification in Technology Stages Geography Investment style Highly pro-active approach Long term investments Ability to invest across the value chain Dummuies Windfarm Huntly Ltd. (UK) Western Bio-Energy Ltd (UK) Endurance Energies (FR) POWER FOR A BETTER WORLD 2

3 Why Support Mechanisms? Need to transition to renewable energy driven by Climate Change Insufficient alternatives POWER FOR A BETTER WORLD 3

4 The fundamental transition to RE Fossil fuels alone can not meet future energy demand % EJ/a 2100 Exajoule per year Other Renewables Solar Thermal (heat) Solar Power (PV & solar thermal) Wind 2007 Biomass 01% 0.1% Hydro Nuclear Gas Coal Oil Global primary energy scenario: Renewables 80% of primary energy by 2100 Source: German Advisory Council on Global Change WBGU Berlin POWER FOR A BETTER WORLD 4

5 Why Support Mechanisms? Need to transition to renewable energy driven by Climate Change Insufficient alternatives Lower cost POWER FOR A BETTER WORLD 5

6 The race to grid parity Utility prices and solar power generation cost (EUR/kWh) in Germany (sun energy 900KWh/year) 0.8 Residential systems Commercial systems Commercial competitive Residential competitive Peak utility price (Germany) 0.2 Average residential & commercial power price (Germany) Grid parity in certain markets Industrial Solar production cost Commercial Solar production cost Residential Solar production cost Assumptions 5% solar cost decline p.a. 2.5% price increase p.a. of electricity tariff Source: Solarbuzz 2006, Citigroup 06/2005 Average residential power price Average commercial power price Average industrial power price Utility bulk power price POWER FOR A BETTER WORLD 6

7 Technical Progress and Scale drive down cost Source: Adapted from National Renewable Energy Laboratory POWER FOR A BETTER WORLD 7

8 The global solar market in 2020 GW Cumulative installed capacity, Cumulative installed Annual PV capacity PV capacity additions Concentrated solar thermal power Photovoltaic (PV) Annual economic demand Annual policy-driven demand Cumulative installed capacity Estimate uses base-case scenario. Aggressive scenario predicts 400 GW in 2020 Source: The McKinsey Quarterly, June 2008 POWER FOR A BETTER WORLD 8

9 Investments in Clean Energy /Q3 140,000 USDm M&A 120,000 Project finance Capital markets* 100,000 VC/PE 124' '930 80, CAGR : 53.9% 73'337 60,000 57'632 45'351 40,000 20, '071 3'832 4'434 7'731 10' ** Note: * IPO, capital increases and convertible bonds ** until September 2009 (CAGR: Compounded Annual Growth Rate) Source: POWER FOR A BETTER WORLD 9

10 Impact of financial crisis Panel prices (wholesale) /Wp Source: pvxchange POWER FOR A BETTER WORLD 10

11 PV the sun behind the clouds GW Bryan, Garnier & Co 25.7 New Energy Finance (optimistic) New Energy Finance (conservative) AVERAGE CAGR: approx. 48% EPIA (policy driven) EPIA (moderate) Navigant (accelerated) Navigant (conservative) Navigant (recession) Dresdner Kleinwort / Commerzbank Credit Suisse E 2010E 2011E 2012E 2013E Average values: POWER FOR A BETTER WORLD 11

12 A perfect storm? Relative over-capacity from Gold rush Insufficient focus on driving down cost Sudden death of Spanish bonanza Project financing i dried out Bankability over new products highly challenging POWER FOR A BETTER WORLD 12

13 Investor s fundamentals Large and fast growing markets Secured healthy yprofit margin Controlled risk Secured revenue streams are imperative to attract required capital for industry build up! POWER FOR A BETTER WORLD 13

14 Summary YES, new technologies require support mechanisms but Stability more important t than absolute level l 2. Transparency of permitting (bureaucracy) 3. Technology specific 4. Adequate level POWER FOR A BETTER WORLD 14

15 Questions POWER FOR A BETTER WORLD 15

16 Contact GOOD ENERGIES STANDBROOK HOUSE 2-5 OLD BOND STREET LONDON W1S 4PD UK 277 PARK AVENUE 29TH FLOOR NEW YORK USA 586 ARGUS ROAD SUITE 200 OAKVILLE L6J 3J3 CANADA TH ST., NW, SUITE 250 WASHINGTON, DC 20037, USA GRAFENAUWEG ZUG SWITZERLAND T: T: T: T: T: F: F: F: F: F: POWER FOR A BETTER WORLD 16