The story of renewable energy

Transcription

1 The story of renewable energy International clean energy projects 27 June 2011

2 Our renewable energy team of 15 years Dedicated renewable energy team based in Toronto, servicing Canada and the North American market, backed by a global centre Dedicated team in Canada Global reach & knowledge base Global Centre of Knowledge based in the UK, with a over 100 renewable energy specialists across the globe Ernst & Young renewable energy team Experience based on all renewable energy technologies, across all major markets globally, with dedicated technology teams Industry wide experience Advised across the industry and beyond Worked with stakeholders across the renewable energy industry and beyond Page 2

3 Renewable energy developed from security of supply concerns and industrial diversification desires Oil crisis triggers security of supply fears in Denmark Ground breaking legislation is developed Technologies starting to mature Worldwide renewable energy industry develops as new drivers come forward Japan seeks to add diversity to industrial base Germany launches comprehensive support system and helps stimulate a global industry Page 3

4 Macroeconomic drivers have underpinned development of renewable energy Regulatory drivers Climate change concerns Security of domestic energy supply Ageing existing generation assets Employment and export creation opportunities Financial markets Strong investor appetite for asset backed investments with long term, stable and inflation shielded cash flows Limited opportunities in other infrastructure sectors CSR/environment-led investment Energy prices Rising oil and gas prices Future energy growth Increasing urban demand profile Increasing realisation of carbon impact Page 4

5 At an EU level, targets have been established for 20% renewable energy across Europe by 2020 EU 2020 energy targets and 2005 actual performance (%) Source: EU Page 5

6 Published renewable energy action plans of the European member states show renewable electricity will be required to make up for short-falls in renewable transport fuels and renewable heat Reference scenario (%) growth to reach 2020 targets Source: Energy research Centre of the Netherlands Page 6

7 Contrary to 2009, 2010 saw more conventional power being installed than renewables in Europe 2010 installed and decommissioned capacity (total 54,124 MW) Source: EWEA, EPIA Page 7

8 Individual European countries have developed a plethora of different support mechanisms, with renewable energy now being the mainstream technology in Europe Green certificate mechanism Feed-in tariff Hybrid (feed-in tariff or market tariff) Green bonus/top up Tax/grants Outside EU-27 Page 8

9 The US support system combines federal tax credits (grants in the short-term) and state level obligations Federal support for renewable energy Generation based Capacity based Production Tax Credit Investment Tax Credit 2008/09 economic recession removes tax appetite from traditional buyers Dept. of Treasury grant system introduced WA OR NV CA ID AZ UT MT WY CO NM ND SD NE KS TX OK MN IA MO AR LA WI IL TN MI PA OH IN WV VA KY SC MS AL GA NC VT NH NY ME DE MD DC MA RI CT NJ Strong state examples California (33% by 2020) New Jersey 22.5% by 2020) Hawaii (40% by 2030) FL Without RPS AK Voluntary RPS Alaska With RPS Hawaii HI Page 9

10 Despite world-class resource, Canada has historically lacked the legislative drivers to push installation rates As with the US, when considering the Canadian market investors must be aware of both federal and provincial factors, such as legislation, grants or incentives Federal: EcoENERGY Provincial support mechanisms BC: RFP Alberta: Carbon tax Saskatchewan: Small scale Ontario: Feed-in tariff Quebec: RFP Maritimes: RFP/small scale feed-in tariff Page 10

11 Financing a sustainable future Mark Porter Senior Associate Direct: Cell: mark.porter@ca.ey.com Ernst & Young Orenda Inc. 222 Bay Street, PO Box 251 Toronto, Ontario, M5k 1J7 Page 11

12 Appendix 1: Incentive mechanism systems and selected market progress

13 Selected market progress Germany Installed capacity (end 2010) Onshore wind: 27,046MW Offshore wind: 168MW Solar PV: 17,193MW Biomass 1 : 11,217 Mtoe Support mechanism Feed-in tariff mechanism First mechanism introduced in 2000 Spain Installed capacity (end 2010) Onshore wind: 20,676MW Offshore wind: 0MW Solar PV: 3,784MW Biomass 1 : 4,315 Mtoe Support mechanism Feed-in tariff mechanism; market tariff First mechanism introduced in 1998 (RD2818/1998) Italy Installed capacity (end 2010) Onshore wind: 5,797MW Offshore wind: 0MW Solar PV: 3,494MW Biomass 1 : 2,760 Mtoe Support mechanism Green certificate and feed-in tariff mechanism First mechanism introduced in 1999 Source: EWEA, BTM, EPIA, Eurobserv'ER. 1 Primary energy production of solid biomass in 2009 (Mtoe) Page 13

14 Selected market progress France Installed capacity (end 2010) Onshore wind: 5,660MW Offshore wind: 0MW Solar PV: 1,025MW Biomass 1 : 9,795 Mtoe Support mechanism Feed-in tariff mechanism First mechanism introduced in 2000 UK Installed capacity (end 2010) Onshore wind: 3,385MW Offshore wind: 1,819MW Solar PV: 66MW Biomass 1 : 1,307 Mtoe Support mechanism Green certificate mechanism First mechanism introduced in 2002 Source: EWEA, BTM, EPIA, Eurobserv'ER. 1 Primary energy production of solid biomass in 2009 (Mtoe) Page 14

15 With energy being a state control policy, each state has developed individual renewable portfolio standards State Amount Year Arizona 15% 2025 California 33% 2020 Colorado (IOUs) 30% 2020 Connecticut 20% 2020 Delaware 20% 2019 District of Columbia 20% 2022 Florida* 1 7.5% 2015 Hawaii 40% 2030 Illinois 25% 2025 Iowa* 105 MW Maine 40% 2017 Maryland 20% 2022 Massachusetts 15% 2020 Minnesota Minnesota (Xcel 30% 2022 Energy)** Missouri* 15% 2021 Montana 15% 2015 Nevada 25% 2025 New Hampshire 25% 2025 New Jersey 22.5% 2021 New Mexico (IOUs) 20% 2020 New York 25% 2013 North Carolina 12.5% 2021 State Amount Year North Dakota* 10% 2015 Ohio 12.5% 2025 Oregon 25% 2025 Pennsylvania 8% 2021 Rhode Island 16% 2019 South Dakota* 10% 2015 Texas 5, MW Utah* 20% 2025 Vermont* 25% 2025 Virginia* 12% 2022 Washington 15% 2020 Wisconsin based on previous year s average renewable energy percentages Source: Ernst & Young *States with voluntary RPS systems *1 Not a state wide policy, only effective in certain counties ** Xcel Energy produces almost half of Minnesota s energy and will be required to ensure 30% of its electricity generation is from renewable sources by Page 15

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