RENEWABLE ENERGY FINANCE FORUM WALL STREET

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1 25 June 2014 RENEWABLE ENERGY FINANCE FORUM WALL STREET Michael Liebreich, Chairman of the Advisory Board

2 ABOUT BLOOMBERG NEW ENERGY FINANCE 200 people providing information on renewable energy, energy efficiency, gas, nuclear, advanced transportation, power and carbon markets San Francisco New York Washington DC London Zurich Beijing Tokyo New Delhi Hong Kong Singapore Sao Paulo Cape Town Sydney Michael Liebreich WTO, 88 July 1

3 NEW INVESTMENT IN CLEAN ENERGY ($BN) 21% $318bn -10% $286bn -11% 17% 34% 0.6% $195bn $196bn $262bn $254bn 44% $167bn 46% $55bn 45% $80bn $116bn Note: Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energy storage projects (not reported in quarterly statistics). 2

4 RENEWABLE ENERGY NEW BUILD INSTALLATIONS (GW) Note: Excludes large-scale hydro 3

5 NEX CLEAN ENERGY INDEX YTD Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 NEX NASDAQ S&P 500 Note: Values as of 23 June 2014; NASDAQ and S&P 500 rebased to 100 on 01 Jan

6 : CONSOLIDATION 5

7 NEW INVESTMENT IN CLEAN ENERGY IN EUROPE Q Q ($BN) Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q '14 Four quarter running average Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D, and spending for digital energy and energy storage projects (reported in annual statistics only). 6

8 EUROPEAN POLICY SUPPORT SCHEMES UNDER REVIEW, 2013 Comprehensive review under way Retroactive changes implemented ( ) Suspended 7

9 NEX CLEAN ENERGY INDEX YTD NEX NASDAQ S&P Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Note: Values as of 23 June 2014; NASDAQ and S&P 500 rebased to 100 on 01 Jan

10 PUBLIC MARKETS OPEN FOR BUSINESS Source: Nest 9

11 RENEWABLE ENERGY NEW BUILD INSTALLATIONS (GW) Note: Excludes large-scale hydro 10

12 CLEAN ENERGY NEW BUILD INSTALLATIONS (GW) Installations forecast to grow 37%

13 PV EXPERIENCE CURVE (2013 $/W) 100 Cost per W (2013 $) SOLAR PV MODULE COSTS HAVE FALLEN 99% SINCE Q ,000 10, ,000 1,000,000 experience curve Chinese c-si module prices (BNEF) First Solar thin-film module cost historic prices (Maycock) Thin-film experience curve Cumulative capacity (MW) Note: Prices inflation indexed to US PPI. Source: Paul Maycock, First Solar, Bloomberg New Energy Finance 12

14 LEVELISED COST OF ELECTRICITY H ($/MWH) Marine - wave Marine - tidal STEG - LFR STEG - parabolic trough STEG - tower & heliostat Wind - offshore PV - thin film PV - c-si PV - c-si tracking Biomass - anaerobic digestion Biomass - gasification Biomass - incineration Municipal solid waste Geothermal - binary plant Wind - onshore Small hydro Large hydro Landfill gas Geothermal - flash plant Natural gas CCGT Coal fired CHP Nuclear PV projects as low as $80/MWh Onshore wind as low as $37/MWh Q central H central Fossil technologies: US China Europe Australia Note: LCOEs for coal and CCGTs in Europe and Australia assume a carbon price of $20/t. No carbon prices are assumed for China and the US. 13

15 ENERGIEWENDE (TWH) Nuclear Renewables Fossil , Destatis 14

16 CHINA DECLARES WAR ON POLLUTION We will resolutely declare war against pollution as we declared war against poverty Li Keqiang Premier of the People's Republic of China March 2014 Credit: Bloomberg 15

17 CHINA POWER GENERATION CAPACITY ADD BY TECHNOLOGY, , 2020 & 2030 GW Renewable energy 68% of new capacity Historic Forecast Biomass & waste Solar Wind Hydro Nuclear Oil Gas Coal Note: 2020 & 2030 forecasts from BNEF Global Renewable Energy Outlook 2014., China Electricity Council 16

18 CHINA POWER GENERATION CAPACITY ADD BY TECHNOLOGY, , 2020 & 2030 GW Renewable energy 68% of new capacity Historic Forecast Biomass & waste Solar Wind Hydro Nuclear Oil Gas Coal Note: 2020 & 2030 forecasts from BNEF Global Renewable Energy Outlook 2014., China Electricity Council 17

19 THE ORACLE OF CLEAN ENERGY We ve poured billions and billions and billions of dollars [into renewables]. And we re going to keep doing that as far as the eye can see. Warren Buffett CEO Berkshire Hathaway Picture: Bloomberg 18

20 GREEN BOND ISSUANCE 2007-Q ($BN) YTD Government Corporate selflabelled Project bonds ABS Supranational 19

21 GLOBAL POWER GENERATION CAPACITY ADDITIONS (GW) FOSSIL FUEL AND NUCLEAR RENEWABLES Forecast Nuclear Forecast 264 Marine Oil Gas Coal Solar Wind Biomass & waste Geotherm

22 SMALL-SCALE SYSTEM CAPEX AROUND THE WORLD $ PER WATT Average sub-10kw German system cost ($/W) 6 5 Average California residential system cost ($/W) 4 3 Japan residential, $/W Q Q Q Q Q Q Q Q Q Q Q Q Q Chinese multicrystalline silicon module price ($/W) Sources: JPEC, California Solar Initiative, BSW-Solar, Bloomberg New Energy Finance 21

23 DRIVERS OF LOW-COST CLEAN ENERGY Research & development Cost of finance Scale and logistics 22

24 MARKETS Renewable Energy Energy Smart Technologies Advanced Transport Gas Carbon and RECs SERVICES Americas Service Asia Pacific Service EMEA Service Applied Research Events and Workshops Unique analysis, tools and data for decision-makers driving change in the energy system Michael Liebreich