CALIFORNIA ISO ANNUAL STAKEHOLDER SYMPOSIUM

Transcription

1 CALIFORNIA ISO ANNUAL STAKEHOLDER SYMPOSIUM Sacramento, California 22 October 2015 Michael Liebreich Chairman of the Advisory Board

2 NEW INVESTMENT IN CLEAN ENERGY ($BN) % 7% -7% -8% 12% % -9% % 50% 27% Large hydro Other Solar Wind 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), as well as a BNEF estimate for large hydro investment. Source: Bloomberg New Energy Finance 1

3 NEW INVESTMENT IN CLEAN ENERGY Q Q ($BN) 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). Source: Bloomberg New Energy Finance 2

4 AMER NEW INVESTMENT IN CLEAN ENERGY BY SECTOR Q Q ($BN) 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). Source: Bloomberg New Energy Finance 3

5 APAC NEW INVESTMENT IN CLEAN ENERGY BY SECTOR Q Q ($BN) 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). Source: Bloomberg New Energy Finance Michael 3 November Liebreich 2015 California, October 4

6 EMEA NEW INVESTMENT IN CLEAN ENERGY BY SECTOR Q Q ($BN) 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). Source: Bloomberg New Energy Finance 5

7 SUPPORT SCHEMES FOR LARGE-SCALE RENEWABLE ENERGY PROJECTS IN THE EU PAYMENT MECHANISM Feed-in tariff (FiT) Premium Green certificates ALLOCATION. Competitive auctions Auctions legislated but yet to be held or pilot auctions only Source: Bloomberg New Energy Finance. 6

8 SUPPORT SCHEMES FOR LARGE-SCALE RENEWABLE ENERGY PROJECTS IN THE EU PAYMENT MECHANISM Feed-in tariff (FiT) Premium Green certificates ALLOCATION Competitive auctions. Auctions legislated but yet to be held or pilot auctions only SUBSIDY BUDGET T Capped Frozen / no new support T T T T T Source: Bloomberg New Energy Finance. 7

9 LAUDATO SI DEMAND SIDE There is an urgent need to develop sources of renewable energy. Pope Francis Picture: Wikimedia 8

10 LEVELISED COST OF ELECTRICITY 2014 ($/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 $58/ 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. Source: Bloomberg New Energy Finance 9

11 AN AGE OF ENERGY PLENTY AGE OF COMPETITION 10

12 THE ECONOMIST COVER, SHEIKHS VERSUS SHALE DECEMBER 2014 Source: The Economist 11

13 OIL AND GAS PRICES: HENRY HUB, NBP, BAFA, AND NE LNG, (US$/MMBTU) NBP (UK) Henry Hub (US) BAFA (Germany border price for Russian gas) North East Asia LNG Note: Japan-Korea Marker is based on broker assessments of the spot price of un-contracted LNG cargoes delivered into the Northeast Asia market. Source: Bloomberg New Energy Finance, ICAP, Platts 12

14 US NATURAL GAS PRODUCTION, Natural Gas Rotary Rigs in Operation (Number) Gas output per operating rig (MMcf/day/rig) Rig count down 6-fold Output per rig Up 8-fold Source: EIA, Bloomberg New Energy Finance Source: Range Resources, 28 July 2015, Bloomberg New Energy Finance 13

15 ARA AND NEWCASTLE COAL PRICE (2014 US$/TONNE) ARA Newcastle Note: Prices have been adjusted for inflation according to YoY CPI Index from UK Office of National Statistics Source: Bloomberg New Energy Finance, ONS 14

16 COAL BANKRUPTCIES Investment Pte Image: various company sources 15

17 NEX CLEAN ENERGY INDEX YTD S&P 500 Oil & Gas NEX 100 Stowe Global Coal 50 0 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Divestment by value destruction Note: Values as of 08 September 2015; Stowe and S&P 500 rebased to 100 on 01 Jan 2013 Source: Bloomberg New Energy Finance 16

18 TOTAL INVESTMENTS PER TECHNOLOGY, (US$ REAL) RENEWABLES TAKE 65% OF THE $12.2 TRILLION POWER INVESTMENT TO 2040 Source: Bloomberg New Energy Finance 17

19 RENEWABLES TO DOMINATE POWER SUPPLY GROWTH Renewables are poised to seize the crucial top spot in global power supply growth Affordable renewables are set to dominate the emerging power systems of the world Fatih Birol Chief Economist, IEA Picture: Mikhail Evstafiev, Wikimedia 18

20 G7 JUNE 2015 SCHLOSS ELMAU Emissions must be cut 40-70% by mid-century and phased out entirely by 2100 Picture: Wikimedia 19

21 RENEWABLE ENERGY PROPORTION OF POWER GENERATION- INTERMITTENT ENERGY (WIND & SOLAR), 2014 (%) US 4% France 3% UK 9% Germany 16% Japan 5% Mexico 3% China 5% 0 1-5% 6-10% 11-25% 26-50% 50+% Brazil 3% ME + Africa 0% India 3% Australia 8% Note: This only shows the combination of wind and solar energy generation. All numbers come from BNEF s New Energy Outlook 2015 Source: Bloomberg New Energy Finance 20

22 RENEWABLE ENERGY PROPORTION OF POWER GENERATION- INTERMITTENT ENERGY (WIND & SOLAR), 2040 (%) US 24% France 30% UK 63% Germany 77% Japan 20% Mexico 32% China 37% 0 1-5% 6-10% 11-25% 26-50% 50+% Brazil 34% ME + Africa 26% India 32% Australia 52% Note: This only shows the combination of wind and solar energy generation. All numbers come from BNEF s New Energy Outlook 2015 Source: Bloomberg New Energy Finance 21

23 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

24 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

25 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

26 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

27 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

28 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

29 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

30 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

31 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

32 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND FY2004 FY2025 TWh 260 AUD trillion GDP % Historical FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance

33 RENEWABLE ENERGY INTEGRATION CHALLENGES California solar generation and power prices California hourly price projection to $70 /MWh 7 GW $70 /MWh $60 /MWh 6 GW $60 /MWh -50% 2025 $50 /MWh 5 GW $50 /MWh 2020 $40 /MWh 4 GW $40 /MWh $30 /MWh 3 GW $30 /MWh $20 /MWh 2 GW $20 /MWh $10 /MWh 1 GW $10 /MWh $0 /MWh 0 GW $0 /MWh 12 AM 6 AM 12 PM 6 PM 12 AM 6 AM 12 PM 6 PM Source: Bloomberg New Energy Finance Note: April prices only not full year Source: Bloomberg New Energy Finance Note: Annual averages of hourly prices. Prices dependent on wind/solar build forecasts. 32

34 LAUDATO SI INTEGRATION There is still a need to develop adequate storage technologies. Pope Francis Picture: Wikimedia 33

35 GRID DEFECTION? Having a solar panel that isn t connected to the grid is like having a computer that s not connected to the Internet. Ellen Hayes, PG&E spokeswoman Picture: Ellen Hayes 34

36 THE FUTURE OF UTILITIES Customers have the right to reduce their onsite purchases of utility power in any way they choose. What happens behind the customer s meter is nobody s business but the customer s Mike Florio California Public Utility Commissioner Picture: U-T San Diego 35

37 THE FUTURE IS ELECTRIC Prices on electric cars will continue to drop until they're within reach of the average family. The Washington Post, 1915 Images: BMW, Detroit Electric, 2015, courtesy of EVASD 36

38 EV LITHIUM-ION BATTERY PACKS & CRYSTYALLINE SI PV MODULES: HISTORICAL COST REDUCTIONS Cumulative lithium-ion EV battery pack production (MWh) ,000 10, , Crystalline Si PV Module price (USD/W) 10 1 m=26.3% 10 1 Lithium-ion battery pack price (USD/Wh) EV LI-ION BATTERYPACK PRICES HAVE FALLEN 60% SINCE 2010 m=15.5% ,000 10, ,000 1,000,000 Cumulative crystalline PV module production (MW) Note: Values from are based on BNEF s annual battery price index, *2015 based on H1 data. For more see here: Cumulative production is based on total EVs sold and their respective battery pack size. Bloomberg New Energy Finance 37

39 LONDON, UK Photo: HHRCA 38

40 VW DIESELGATE Source: Flickriver 39

41 ENERGY RETAIL BATTLEFIELD NEW SERVICES Integrated smart homes HIVE home heating controls Residential energy storage HEM tools and DR Smart home partnerships/investment IHD and smart thermostat program Smart thermostats and behavioural DR Smart lighting / home automation Virtual mobile operator 80k customers BEMS for DR and energy efficiency Smart thermostats and load disaggregation Smart thermostats to reduce churn Home energy management 40

42 ENERGY RETAIL BATTLEFIELD NEW ENTRANTS - STARTUPS Solar PV and energy monitoring Load disaggregation Heating controls Smart thermostats Smart thermostats, home automation Behavioural engagement Load disaggregation HEM tools Connected home / IoT Smart thermostats 41

43 ENERGY RETAIL BATTLEFIELD NEW ENTRANTS - MAJORS Smart home hubs Nest acquisition Home automation Home automation Registered energy supplier Energy supply and services DR and retail services HomeKit Digital Life connected home service 1m connected home customers Home automation Smart home platform (AT&T) HEMS platform 42

44 SELECTED COMMERCIAL BUILDERS OR BUYERS OF RENEWABLE ENERGY Financial Services Media and Software Retailers and FMCG Manufacturers Primary Industry Images: Various; Bloomberg New Energy Finance 43

45 GLOBAL POWER GENERATION BY TECHNOLOGY, (TWH) 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 DESPITE GROWTH IN RENEWABLES, FOSSIL FUELS STILL MEET 44% OF GENERATION IN 2040 Solar thermal Small-scale PV Utility-scale PV Offshore wind Onshore wind Biomass/WtE Geothermal Hydro Nuclear Oil Gas Coal Source: Bloomberg New Energy Finance: 44

46 THE ROAD TO PARIS Image: UNFCCC 45

47 THINGS TO THINK ABOUT 1. Price signals are the worst method of allocating capital, other than every other method ever tried 2. Managing intermittency has a merit order: 1. Efficiency 2. Forecasting 3. Demand management 4. Interconnection 5. Storage 6. Backup 3. Storage is not just about batteries 4. Regulation must encourage new entrants 5. People s choices are not purely economic 46

48 Thanks! 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 Michael Liebreich Unique analysis, tools and data for decision-makers driving change in the energy system