State of the Market Lily Donge, BRC/RMI Letha Tawney, WRI 18 September, 2017 Santa Clara Convention Center, Santa Clara, CA

Transcription

1 State of the Market Lily Donge, BRC/RMI Letha Tawney, WRI 18 September, 2017 Santa Clara Convention Center, Santa Clara, CA

2 Agenda State of the Market Market Trends Regulated Markets

3 Transaction barriers: all attendees

4 Transaction barriers: buyers

5 Transaction barriers: developers

6 New Deals: corporate demand in GW 2017 has already surpassed 2016 total

7 47 corporations have signed deals to date Buyer Capacity (MW) Google F Amazon F Apple F Microsoft F Walmart F Anheuser-Busch InBev F Equinix 330 Facebook F IKEA 263 Owens Corning F Kimberly Clark F Mars 200 Dow Chemical F Switch 179 T-Mobile 160 Kaiser Permanente 153 Procter & Gamble F Volkswagen 130 3M F General Motors F HPE F DeAcero 110 General Mills F Johnson & Johnson F Buyer Capacity (MW) Target F Digital Realty 88 US Delphi Automotive 80 Cummins F Solvay 71 Philips F Goldman Sachs F Salesforce F JPMorgan F Iron Mountain 52 Corning F Becton Dickinson F Lockheed Martin F Steelcase 25 Yahoo 23 Partners HealthCare 22 Avery Dennison 20 Bloomberg 20 Cisco F PayPal F Aerojet Rocketdyne 12 SC Johnson 11 Akamai Technologies 7

8 13 of 15 new buyers in 2017 Buyer Capacity (MW) Apple* F Anheuser-Busch InBev* F Kimberly Clark* F T-Mobile 216 DeAcero 110 Target F General Mills F Cummins F Solvay 71 Goldman Sachs F JPMorgan F Facebook F Partners HealthCare 22 Paypal F Akamai Technologies 7 First time transactor * Signed multiple deals in 2017

9 44 developers have participated to date Developer # of Deals Capacity (MW) NextEra EDF Renewable Energy Invenergy MidAmerican Energy RES Americas Iberdrola Renewables Enel Green Power Apex Clean Energy First Solar EDP Renewables Avangrid Renewables Lincoln Clean Energy Chermac Energy SunEdison BNB Renewable Energy Bordas Wind Energy Tradewind Energy Techren Solar LLC EverPower E.ON Community Energy Capital Power Buyer # of Deals Capacity (MW) SunPower Duke Energy Pattern Energy Group Mexico Power Group Pioneer Green Energy Sempra Infinity Renewables Alterra Power Virginia Solar LLC 1 80 NRG 2 75 Origis Energy 1 72 Dominion 1 71 Cypress Creek Renewables 1 61 Constellation 1 42 Akuo Energy 1 40 Enbridge 1 40 Affordable Solar 1 30 New Jersey Resources 1 27 Walden Green Energy 1 22 APS 1 15 Silicon Ranch Corporation 1 12 Spartan Renewable Energy 1 11

10 10 of 19 new developers in 2017 Developer # of Deals Capacity (MW) Enel Green Power Avangrid Renewables Iberdrola Renewables Techren Solar LLC Invenergy EDF Renewable Energy Sempra Infinity Renewables RES Americas EDP Renewables 1 75 Dominion NextEra 1 68 NRG 1 55 Affordable Solar 1 30 Walden Green Energy APS 1 15 First time transactor

11 Agenda State of the Market Market Trends Regulated Markets

12 Prices remain unpredictable SPP Day-Ahead Prices, PTC/ITC ($/MWh) $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 SPP South SPP North? 3/1/ /1/2016 9/1/2016 6/1/2016 3/1/ /1/2015 9/1/2015 6/1/2015 3/1/ /1/2014 9/1/2014 6/1/2014 3/1/2014 Average SPP prices have fallen ~50% since 2014 Source: SNL

13 Smaller deals support 25% of the market 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Transactions under 40MW Average annual MW contribution

14 Solutions for smaller appetites Benefits vary by specific aggregation solution, but among them are: Benefits for buyers Access to economies of scale, even if deal size is smaller Risk mitigation More flexibility on tenor Transaction simplification Benefits for sellers Access to more buyers Investment-grade counterparty

15 Aggregated deal activity in next 12 months? 70% 60% Allocation of votes 50% 40% 30% 20% 10% 0% Minimal Moderate Extensive Buyer Developer Service provider Utility NGO/Other

16 The trend is moving up the supply chain Project Gigaton - Walmart Goal < 1 Gigaton from the supply chain by 2030 Energy key area suppliers can make commitments Suppliers set their own goals and report annually Source: Walmart

17 35% 30% What have buyers done regarding Scope 3? 1 = no work 5 = executed transactions Allocation of votes 25% 20% 15% 10% 5% 0% Buyer Service provider NGO/Other

18 We Are Still In Sectors States Cities and Counties Higher Education Businesses and Investors (35 Fortune 500 entities) Total Signatories 2,300 Total Metrics 9 Total GDP: $6.2 Trillion 238 Population: 130 million 325 Enrollment FTE: 4.2 million Endowment: $122 Billion 1,728 Total Annual Revenue: $2.3 Trillion Total Assets Under Management: $2.5 Trillion Total US Employees: 4.8 Million

19 High profile RExits MGM : Nevada Power May 2016, Nevada Seeking energy independence and more renewables 1 MGM goal is 46% renewables Nevada s Renewable Energy Standard requires 23% $87 million RExit fee MGM working with Tenaska to procure 171 MW to operate Microsoft : Puget Sound Energy April 2017, Washington state Seeking renewable energy to meet sustainability goals RExit ~80% WA headquarters energy use $24 million RExit fee Contributed to the creation of a green tariff, and already attracted Starbucks and REI 1

20 Agenda State of the Market Market Trends Regulated Markets

21 More utilities are engaging

22 More deals are happening for new load

23 There is no growth in demand overall US GDP & Primary Energy Consumption (indexed) Change from 1990 Economic growth no longer drives energy demand Source: 2016, US Energy Information Administration (EIA), Bureau of Economic Analysis, Bloomberg Terminal

24 EIA forecasts 20% production increase Growth in gas and RE outstrips the fall in coal exports? Source: EIA Annual Energy Outlook 2017

25 So low prices! (and underused assets) Source: BNEF Sustainable Energy in America FACTBOOK 2017 &