Enel Green Power Latin America

Transcription

1 Enel Green Power Latin America II Congreso del Futuro Ciencia, tecnología Humanidades y ciudadanía Santiago 17 th January 2013

2 Uso: Aziendale The Energy Mix Strategy to address Country and business risk Risk Financial Energy Security Regulatory Competitive Energy Mix Fossil fuel- based energy prices increasing as global demographics and economic growth boost demand The Fukushima disaster and political turmoil in the Middle East highlight energyavailability risk Regulation tightens as stakeholders demand that companies do more to mitigate the environmental impact Operational efficiency becomes a key differentiator in the economic downturn A diversified energy matrix as an instrument to mitigate business & country risk

3 The Renewable Energies Market Renewables Response to the Energy Trilemma Uso: Aziendale Renewable Energies Renewable energy is a key element of a balanced primary energy mix at affordable costs and improving energy security and independence Increasing Global Energy Demand Short time to market and modular characteristic allows wind and solar to adapt very well to changing energy demand scenarios Supply Independency More renewables in the mix help mitigate the risk profile of the Energy system

4 Renewable energy investments: a growing industry Expected worldwide growth Uso: Aziendale By technology By geography echnology Installed base Installed base Delta capacity Expected Growth CAGR Investment s Area Installed base Installed base 2020 Min 2020 Max Expected Growth CAGR (GW) 2011 (GW) (GW) % Min Max 2011 ( bn) 2010 (GW) 2011 (GW) (GW) (GW) Min Max Hydro ~1,005 ~1, % 2% 2% ~58 North America % % 9% Wind ~197 ~ % 10% 15% ~65 Europe % 655 1,030 5% 9% Biomass ~60 ~ % 5% 24% ~13 Latin America % % 7% Solar ~40 ~ % 13% 24% ~113 Africa % % 16% eothermal ~11 ~ % 7% 11% ~2 Asia % 921 1,000 7% 8% TOTAL ~1,313 ~1, % 5.0% 8.7% ~ 250bn TOTAL ~1,313 ~1,425 ~2,206 3, % 8.7% rce: EPIA, GWEC, EER (2011); WEO 2011 New Policies scenario (2020 min); industry reports/mckinsey (2020 max); BNEF, EGP estimates e: Investments estimated based on BNEF figures and assuming an fx of 1.3 /$. Large Hydro investments estimated assuming 29GW of new tallations and 2.0M /MW capex.

5 Uso: Aziendale Renewable Market Forecast EGP view Installed Capacity by Area GW 2,687 CAGR: +5,0% YoY: +6,8% YoY: +8,5% CAGR: +7,3% 84 Africa 1,070 Asia 1, , , Latin America North Americ Europe Renewable Energy growth involves all continents onti: Enerdata, WEO 2011 (World Energy Outlook pubblicato annualmente dall International Energy Agency), EER (Emerging Energy Research), GWEC Global Wind Energy Council), EWEA (European Wind Energy Association), EPIA (European Photovoltaic Industry Association), NREAPs (National enewable Energy Action Plans), REN 21, target nazionali, stime EGP

6 Uso: Aziendale Renewable Market Forecast- EGP view Installed Capacity by Technology GW CAGR: +5,0% YoY: +6,8% YoY: +8,5% CAGR: +7,3% 2, Others 428 Solar 1,230 1,313 1, Wind ,005 1,034 1,339 Hydro Wind and Solar PV the technologies that will contribute most significantly to the projected growth ource: Enerdata, WEO 2011, EER, GWEC, EWEA, EPIA, NREAPs, REN 21, National targets, EGP estimate

7 The renewable energy market Strengths and opportunities Uso: Aziendale Competitive Renewable energy proved to be competitive in terms of pricing Capex reductions do to competition, economy of scale and efficiency Progressive integration of intermittent production in competitive markets Predictable EU experience shows RES integration closer to real time markets Spain: unbalances management Italy: RES participation in the unbalancing market from 2013 Reliable Progressive integration of regional markets Grid support and progressive integration of distributed generation

8 Uso: Aziendale Paradigm shift in the energy supply of the future Past Supply Follows Demand Future Supply interdependent Demand Smart Homes, Smart grids and storage are some examples of elements that are and will guide the transition

9 Uso: Aziendale Chile: Trends and market scenarios CAGR Capacity :6,3% CAGR Production :4,6% A single technology can not cover the increasing demand. A more balanced energy mix is needed Nuclear issues: acceptance (Fukushima); significant costs; time to market Hydro: high reliance on Hydropower expose systems to the risk of droughts (Brazil) Thermal- based power: essential but affects the carbon footprint of the economy Capacity (GW) Production (TWh) Renewables play an important role in the matrix differentiation

10 Uso: Aziendale Chile: main issues at stake Transmission Bottlenecks force to use inefficient local generation and cause risky operations. Black Out risks ENRC debate Current ERNC quota set at 10% 2024 does not provide correct market signals Permitting Transparent rules to favor interested players to boost investments in the Country Energy Supply Long term energy selling mechanism and increasing recourse to tenders Upcoming challenges in the renewable energy market will shape the context in which investors are called to participate

11 Uso: Aziendale Strategy and opportunities for public acceptance of low carbon investments Corporate Social responsibility Enel s mission is to generate and distribute value in the international energy market, to the benefit of our competitiveness and the requirements of our customers, the investments of our shareholders and the expectations of everyone who works with us. Enel acts in the service of communities, respecting the environment with the intention of ensuring a better world to coming generation Enel Green Power is strongly committed at making renewable sources not only sustainable, but also increasingly competitive with traditional generation technologies, increasing their efficiency and reliability Enel Green Power enacts its CSR activities based on the following four principles: Responsible growth Climate change combat Transparent and continuous mutual communication with local communities Promotion of human rights Social responsibility as an opportunity to competitive success - Porter 11

12 New Challenges in the Renewable Energies Market The Industry s Circle of Technology, Regulation, Competition and Market 1 2 Innovation, scale and competition driving down technology costs, especially in wind and solar Cost of Technology Regulatory Framework More efficient regulation in mature markets Increasing recourse to tenders Market design to increase flexibility 4 Significant growth of all main technologies in all geographical areas Several new markets 1 opening quickly Market Scenario Competitive Scenario Large variety of new industrial and financial players entering at regional and global level 3 12

13 Uso: Riservato Aziendale Thank you for your attention Maurizio Bezzeccheri Enel Green Power Head of Iberia and Latin America 13

14 Uso: Riservato Aziendale BACK UP 14

15 Uso: Aziendale CSR- a concrete example The partnership with EGP The approach Barefoot college Established in 1972, the Barefoot College is a non-government organization that has been providing basic services and solutions to problems in rural communities, with the objective of making them self-sufficient and sustainable. Enel Green Power SpA and the Barefoot College have initiated a partnership to establish Community Empowerment Centres (CECs) in five countries in Latin America. The Centres will also serve as Rural Electronic Workshops to support the solar electrification of remote, rural villages in Guatemala, Chile, Brazil, Peru and Colombia. The Barefoot Approach: women from these rural communities will be trained as Barefoot Solar Engineers. After 6 months of training at the Barefoot College in India, they will return to their countries to solar electrify their own communities. These women will then become trainers themselves and train other women at the CECs in each country Society and corporate performance: an integrated, essential approach 15

16 Uso: Aziendale EGP Number and figures FY2011 Geographical diversification and multi-technological approach EGP presence North America Operating 1,010 MW Production 2.92 TWh Enel Green Power Operating 7,079 MW Production TWh Italy and Europe Operating 3,583 MW Production 12,58 TWh Installed capacity by technology FY 2011 Iberia e Latin America Operating 2,486 MW Production by technology FY % 3% Production 6,97 TWh 25% 3% 50% 36% Total = 7.1 GW 27% 45% Total = TWh 16 Countries across all main renewable technologies 16

17 Agenda EGP Business Plan: flexibility in capital allocation Uso: Riservato Aziendale 1. EGP Latin America EGP presence at a glace 2. Chile The Institutional environment General framework and market design Selling mechanism and nodal prices RES: renewable incentive mechanism 3. Mexico The Institutional environment Market functioning Regulatory developments 4. Brazil The Institutional environment The Brazilian power system Auction based scheme: the Brazilian experience 5. Panama, Costa, Rica Guatemala, El Salvador and Cross Issues Regulatory Affairs - LATAM 17 17

18 Uso: Riservato Aziendale Technology cost reduction - Wind Supply chain cost improvements Economies of scale ompetition WTG capital cost reduction Innovation (materials, control systems) Cost estimation Wind plant ( /W) Base Case Low Case e: wind plant cost estimation is based on a standard onshore 50 MW plant, equipped with 2 MW wind turbines (HH=80m, D=90m) rce: McKinsey, May 2012; BNEF, Wind turbine price index, July 2012.

19 Uso: Riservato Aziendale Technology cost reduction - PV Innovation (materials, efficiency) Throughput efficiency PV modules spot market price ($/W) Competition PV modules cost reduction Economies of scale Jan 2012 Cost estimation - PV plant ( /W) Base Case Low Case e: cost estimates refer to c-si PV modules rce: McKinsey, May 2012; Photon Consulting, The true cost of solar power, July 2012; PV Insight, Sept 2012

20 Wind energy cost Recent data Expected CFE tariff (USD/MWh) 140 Mexico 2012 Oaxaca wind tender (Sureste I Phase II) CFE Bid offer (USD/MWh) BRL/MWh Brazil 2011 A-3 tender Brazil 2011 A-5 tender (*) 100 BRL/MWh 80 BRL/MWh 60 BRL/MWh 40 BRL/MWh Natural Gas Hydro Wind 20 BRL/MWh (*) mainly large hydro projects expansion 0 BRL/MWh 2011 A A-5