THE ABOUT ERA OF MAINSTREAM ENERGY

Transcription

1 THE ABOUT ERA OF MAINSTREAM CLEAN : SOLAR RISING Arno Harris Company CEO, Recurrent Introduction Energy Board Chair, Solar Energy Industries Association Board Director, Advanced Energy Economy January 2013

2 WE ARE ENTERING THE ERA OF MAINSTREAM CLEAN

3 SOMETHING INTERESTING HAPPENED IN SEPTEMBER U.S. New Generation Placed in Service Sep 12 wind and solar made up all new build capacity for September 2012 totaling 433MW of power Source: FERC, Office of Energy Projects, Energy Infrastructure Update, Sep 2012

4 SOLAR + WIND A CENTERPIECE OF UTILITY PLANS U.S. Utility Planned Capacity Additions % Growth over installed base +1% +2% +14% +229% Source: EIA Planned Capacity Additions 2011, SEIA Major Solar Project List Oct 2012

5 ENORMOUS UTILITY SCALE SOLAR PIPELINE Source: SEIA Major Solar Projects List October 1, 2012

6 NOT JUST OTHER ANYMORE Total U.S. Utility Generating Capacity Sep 12 1,152 GW 5% from wind and solar Source: FERC, Office of Energy Projects, Energy Infrastructure Update, Sep 2012

7 PUBLIC PERCEPTION HASN T CAUGHT UP MOST AMERICANS AREN T AWARE OF THE MAINSTREAM CLEAN TREND BECAUSE IT S OBSCURED BY SOME NOISIER EVENTS

8 SOLAR & RENEWABLES UNDER ATTACK 81% of 2012 political attack ads focused on solar and renewable energy Kantar Media study, July 2012

9 CHALLENGING TIMES FOR SOLAR MANUFACTURERS Solar has evolved into a $100B+ annual industry with 20% growth, yet one would not derive this conclusion lookingatthesharepricesof public companies. Solar industry at 2x overcapacity Source: Lazard Capital Partners, GTM Research

10 PTC EXPIRATION DOMINATES NEWS ABOUT WIND DesMoines Register TPI President Predicts Job Losses If Wind Tax Credit Lapses Investors Ask Congress to Extend Wind Production Tax Credit In Iowa, Obama Calls Out Romney On Wind Energy Jobs

11 HASN T GAS ALREADY WON?

12 WHY NOW? BECAUSE RENEWABLES HAVE DEMONSTRATED THE SCALE, COST, RELIABILITY AND BANKABILITY NECESSARY TO PLAY A LARGE ROLE IN MAINSTREAM MARKETS

13 RENEWABLES CAN DELIVER LARGE CAPACITIES Source: UNEP, Renewables 2012: Global Status Report

14 SOLAR INDUSTRY DELIVERS DRAMATIC PRICE CUTS Si Costs Module Costs 65% cost reduction in the last 2 years Source: Goldman Sachs, PV Insights

15 BREAKING THE $2 PER WATT BARRIER Utility Scale Solar Breaks the $2/Wp Barrier BOS costs become the focus as module costs flatten out Source: GTM Research, Recurrent Energy analysis

16 UTILITY SOLAR VS. $3 $5 GAS FIRED POWER Utility Scale Solar LCOEs vs Natural Gas Cost of gas fired power at cost of $3 $5/MMBtu Source: Goldman Sachs

17 AN ATTRACTIVE PRICE PROPOSITION FOR SOLAR 25 Year Regional Electricity Price Forecasts 2014 vintage 20 year solar ~$70/MWh Source: Ventyx , Recurrent Energy Analysis

18 STABILITY WITH HIGH RENEWABLE PENETRATION Germany Actual Power Generation 2012 Jan 2012: Wind 24.1GW power 2.6TWh energy May 2012: Solar 22.4GW power 1.1TWh energy Source: Fraunhofer ISE, Data: EEX

19 RENEWABLES ARE A PROVEN ASSET CLASS Global Investment in Renewable Operating Assets 147 Solar Source: UNEP, Renewables 2012: Global Status Report

20 OUR FUTURE

21 A GAS + SOLAR + WIND FUTURE U.S. Utility Planned Capacity Additions Source: EIA Planned Capacity Additions 2011

22 TWO PATHS TO GAS + SOLAR + WIND Gas Centric Clean Centric vs. Allow gas to dominate with a little wind and solar around the edges to provide some green wash Results: Initial lower costs, marginally better emissions, exposure to gas price volatility Make renewables a priority with gas as a buffer to balance price and provide reliability Results: Cost at current forecast, lower emissions footprint, higher price stability

23 SHIFTING THE POLICY VISION Provide policy support for renewables as they transition to competitive markets while reducing dependence on subsidies Level Playing Fields ITC + PTC or Price on Carbon Remove Barriers Permitting Procurement Interconnection Maintain Access to Capital PTPs Stable Policy

24 AMERICAN ATTITUDES ABOUT CLIMATE CHANGE Businessweek +13% percentage point increase in Americans who believe climate change is real compared to % of registered voters support some action to reduce global warming, even if it has economic costs Nov 5, 2012 Source: Yale & George Mason University public opinion poll, March 2012

25 AMERICAN VOTERS: GAS + SOLAR + WIND = FUTURE OF U.S. How Significant Should Each Energy Source Be for our Country? Source: Metz & Weigel (2011)

26 SHIFTING THE PERCEPTION OF CLEAN The notion that clean energy is expensive and unreliable is deeply ingrained in public perception. Renewable energy is more expensive a Prius costs $50,000. Swing voter in a Midwestern state focus group Everyone knows these sources of energy are inherently intermittent and therefore unreliable. Army's Logic for Developing Wind and Solar Energy Makes No Sense, US News Shifting public (and regulators) perception on affordability and reliability of renewables would remove the only major objections to a clean centric energy future.

27 THANK YOU