Global Wind Energy Market & Financing Wind Investments

Transcription

1 Global Wind Energy Market & Financing Wind Investments Yeşim AKCOLLU OĞUZ Turkey Energy Sector Representative Wind Energy Congress, Ankara, 5-6.November

2 CONTENT Global Trends in Wind Energy Role of the World Bank in Turkey Energy/Wind Markets Concluding Remarks 2

3 CONTENT Global Trends in Wind Energy Role of the World Bank in Turkey Energy/Wind Markets Concluding Remarks 3

4 Global Trends in Wind Energy Global Wind Atlas Global wind energy capacity reached 540 GW by end Source: Source: GWEC 4

5 Global Trends in Wind Energy Growth in the wind market has been led by Asian countries, followed by Europe and North America. 5

6 Global Trends in Wind Energy The Asian market will continue to dominate in the foreseeable future. 6

7 Global Trends in Wind Energy Off-Shore Wind Large (> 5 MW) turbines on fixed foundations or floating platforms 19 GW installed today Industry is largely concentrated in Europe (UK, DE, DK) Annual spending = $30 billion (~10% total clean energy) energy spending) 7

8 Global Trends in Wind Energy Off-Shore Wind is Growing. Reason #1: Prices are going down. Reason #2: Turbines are getting bigger and more efficient. Reason #3: Bigger players are getting involved. Major oil & gas firms: Shell, Statoil, Eni, Total, Orsted Major utilities: Vattenfall, E.On, Innogy, China Three Gorges 8

9 Global Trends in Wind Energy Key off-shore wind trends to 2030/2050: Learning curve will drive costs down even further Land constraints will increasingly drive renewables offshore Growth will pick up in India, Southeast Asia, Latin America and Africa Floating wind likely to gain importance Latin America Sub Saharan Africa Middle East & North Africa China India Southeast Asia Source: DNV-GL 2050 Energy Transition Outlook 9

10 Challenges to off-shore wind: Global Trends in Wind Energy Infrastructure: Need large ports and staging areas for installation Need fleet of installation and service vessels readily available Extreme conditions: Need typhoon-class turbines for high-risk areas Need specially-designed seismic foundations Cooperation: Need scale to drive down costs but individual markets are relatively small Requires cooperation 10

11 Role of the WB in the Global Wind Market The policy work of the WB with the Governments to create an enabling environment for the scale-up in wind has led to private sector investments in a number of countries, including Turkey. Recent examples of the Bank's support to wind development include China RE Scale Up Program (CRESP) Phase II: Some of the CRESP supported policy recommendations such as RE pricing and subsidies and RE auctions have been adopted into policies and pilots. With the project's support to ensure high penetration of wind power without disruption of the system operation, Inner Mongolia has become the best example of large-scale wind integration in Northern China. The project also supported successful technical standards for off-shore wind and micro-grids, and efficiency improvement measures to increase power outputs for on-shore wind. 11

12 Role of the WB in the Global Wind Market Recent examples of the Bank's support to wind development include Argentina Renewable Fund (FODER) Guarantee: The WB provided guarantee to backstop Government s failure to fund FODER. The WB guarantee indirectly mitigates country risks (including lack of payments, change in policy, convertibility, and transferability risks), and thus reduces financing costs for IPPs and risks associated with signing PPAs. IFC s strong engagement with the private sector has enabled financing a large portfolio in wind. 12

13 CONTENT Global Trends in Wind Energy Role of the World Bank in Turkey Energy/Wind Markets Concluding Remarks 13

14 Role of WB in Turkey Energy Markets Overarching goal is to support energy security in Turkey through: 1. Support the development of domestic sources of energy and transition to cleaner energy mix, particularly renewable energy and energy efficiency. 2. Enhancing energy security infrastructure through investments in gas storage expansion and diversified gas supply. 3. Upgrade electricity supply infrastructure, particularly in the transmission sector to support cross-border interconnections, improve reliability and efficiency, integrate renewable energy to grid and adopt smart grid systems. 4. Continued energy sector reforms including support for electricity and gas market exchange. 14

15 15 WB s Energy Sector Portfolio in Turkey Completed in the Last 5 Years

16 16 WB s Energy Sector Portfolio in Turkey On-Going Engagement

17 Wind Energy as a Strategic Priority for Turkey Fast growing energy demand From 2001 to 2017, electricity demand has grown at 5.6% (CAGR). High dependence on energy imports By end-2017, 37% of the electricity generation came from natural gas for which Turkey is 99% dependent on imports. Energy imports amounted to US$ 32 billion by end September 2018, accounting for 18% of total imports (US$ billion). Energy sector constitutes 82% of the current account deficit (CAD, 12-months rolling). High share of energy sector in GHG emissions 70% of the GHG emissions caused by the energy sector (2012). Turkey is highly vulnerable to climate change. Untapped wind energy potential Potential onshore wind capacity is 48 GW of which only 15% (7 GW) has been realized. Security of supply from indigenous renewable sources => New WPPs (off-shore and onshore) are very crucial. 17

18 Turkey Wind Power Density Map Turkey wind potential is much bigger than what has been utilized. 18

19 Role of WB in Turkey Wind Energy Market Credit Lines: Renewable Energy Loan I (REL, US$ 201 million, completed) and Private Sector RE/EE (US$ 1 billion from WB and US$ 100 million from Clean Technology Fund -CTF-; completed) Partners: TKB and TSKB Financed 11 WPPs of 233 MW installed capacity Investment Lending: Renewable Energy Integration Project (REIP, US$ 300 million + UD$ 50 million from CTF, on-going) Objective: To assist Turkey in meeting its increased power demand by strengthening the transmission system and facilitating large-scale renewable energy generation Partner: TEIAS Financed wind desk under SCADA/EMS upgrade, construction of wind power grid connection substations (Izmir, Vize and Can), and smart grid applications In addition, IFC financed 1 WPP of 135 MW installed capacity, and has equity investments in two Turkish firms, active in RE including wind investments. 19

20 Role of WB in Turkey Wind Energy Development Policy Loans: Support to the Government for the Turkey energy reform agenda including Establishment and operationalization of EPIAS. Enactment of an Amendment of the Renewable Energy Law No Advisory and Analytical Support 20 Renewable Energy Integration Technical Assistance Project (US$1 million CTF grant to TEIAŞ) for capacity enhancement for transmission planning under a range of indicative generation capacity expansion scenarios; 2) capacity enhancement for SCADA based smart grid system Capacity Strengthening for TEIAS in the areas of smart grid initiatives and generation planning (funded by ESMAP). Capacity Strengthening for TEIAS and MENR in the areas of review of current RE situation, barriers and road map; RE integration to distribution and transmission systems; energy storage; and energy efficiency in transmission (funded by EU-IPA). Capacity Strengthening for EPIAS in the areas of market monitoring, transparency platform, balancing operations, market coupling and green certificates (funded by EU- IPA).

21 Role of WB in Turkey Wind Energy The WB can further support the Turkey wind energy sector with advisory and analytical work e.g. wind maps and resource assessments, transaction support and guarantees for wind tenders, pilots in new areas and technologies and financing wind energy integration to the transmission grid, as well as smart grid applications. 21

22 CONTENT Global Trends in Wind Energy Role of the World Bank in Turkey Energy/Wind Markets Concluding Remarks 22

23 Concluding Remarks Combining investments and institutional development & capacity building would help achieve better results. For example, improving operational and financial strength of TEIAS to absorb renewable/wind energy quickly and effectively is crucial, in addition to the strategic investments to integrate the wind energy to the transmission grid. Adequate time and resources for preparation and consultations should be planned and allowed. Setting the necessary rules and enacting enabling regulation ex-ante would streamline the implementation. For example, if the rules for the wind applications exceeding capacity had been determined ex-ante, that much of time wouldn t have been lost after the applications had been made. 23

24 24 Thank You!