Encouraging new business models for renewable energy

Transcription

1 Encouraging new business models for renewable energy Ruggero Schleicher-Tappeser consultant & writer, Berlin Decarbonising Strategies for the Global Energy System 15 th meeting of the REFORM group Schloss Leopoldskron, Salzburg, September 2010

2 Characteristics of Renewable Energy Investments High upfront capital costs / negligible or low running costs financing is important Time horizon > 20 years risk assessment is important Rather new and unknown technologies difficult risk assessment for banks and investors experience and high market penetration important Standardisation still low high planning costs, specific risk assessment, second hand market difficult, long project duration Electricity: small projects, new actors new financing models necessary, new opportunities Increasing competitiveness new markets and opportunities ruggero@schleicher-tappeser.eu 2

3 The impact of interest rates ,2 Levelised Cost of Electricity (LCoE, c/kwh) depending on the Weighted Average Cost of Capital (WACC, %) 19,9 21,6 23,3 25,3 6,0% 6,5% 7,0% 7,5% 8,0% 8,5% 9,0% 9,5% 10,0% 27,1 29,1 31,2 33,4 Example for a PV plant costing 3,43 USD/Wp ruggero@schleicher-tappeser.eu Komoto et al

4 Electricity: neglected markets We have a restricted view of electricity markets and competitiveness of renewable energies: A large share of the world population is not connected to electricity grids In many parts of the world electricity grids are not reliable backup systems lead to much higher costs for electricity than official tariffs In many countries non-renewable electricity is strongly subsidised applying world market prices, renewables often would be competitive New business models can create large new markets ruggero@schleicher-tappeser.eu 4

5 New Technologies New Actors Conventional power plants (fossil, nuclear): 150 MW 1200 MW large utilities, often monopolies Wind turbines 50 kw 5 MW, park 100MW, offshore 500MW IPPs, industries (captive power generation), utilities CSP concentrating solar thermal power >50 MW, storage option IPPs, large industries (captive), utilities Photovoltaics 1W 1 MW, park 20MW Individuals, commerce, industries, IPPs, utilities ruggero@schleicher-tappeser.eu 5

6 Strategies for opening new markets Reducing risks lower capital costs Improving knowledge and transparency lower prices, lower capital costs Developing business models for new actors new groups of customers 6

7 WIND ENERGY: COMPETITIVE IN MANY MARKETS 7

8 Wind energy: Newly installed capacity Growth rates 2009: China >100% EU 23% World 31% India: 5 th market worldwide ruggero@schleicher-tappeser.eu GWEC 8

9 Wind energy: not only for the public grid Competitive in many markets Growing size of turbines and wind parks Europe: grid: IPPs, offshore: large utilities USA: India: grid: IPPs, utilities mainly: Industry, captive power gen. increasingly also grid: utilities, IPPs Chile, Mexico: industries (captive) important Egypt, others: new public regimes 9

10 PHOTOVOLTAICS: HUGE POTENTIAL BEFORE GRID PARITY 10

11 Sudden rapid price decline has changed world PV markets Sudden rapid price decline: Sufficient Si supply after completion of new facilities Breakdown of the Spanish market, credit crunch Massive capacity build-up, key-turn factories Determined Chinese strategy to conquer markets Prices do not correspond to lowest available production costs. Lowest module production costs: today: around 1 /Wp end 2010: <0,60 /Wp CN Nov 08 Mar 10 3,00 1,50 DE Nov 08 Mar 10 3,20 2,00 Crystalline modules ruggero@schleicher-tappeser.eu PVXchange 11

12 The PV learning curve EPIA 12

13 PV grid parity approaching: the situation early Schott Solar AG, EPIA 13

14 PV grid parity approaching: the situation mid 2010 Tunisia residential Schott Solar AG, EPIA 14

15 PV: New markets growing fast EPIA 15

16 ct per kwh Decrease of feed-in-tariffs for PV in Germany ,8 Price development of small PV systems < 10 kwp [ /kwp] (without VAT) ,74 40,6 20ct/kWh 49,21 46,75 46,3 43,99 37,96 35,49 43,01 39,58 31,94 39,57 35,62 36,01 32,41 32,77 29,49 28,75 26,16 23,81 29,82 26,84 27,14 24,7 24,42 22,22 21,67 19,72 17,95 22,48 20,46 20,22 18,4 16,33 14, facades < 30 kwp > 30 kwp > 100 kwp >1000 kwp Ground mounted electricity price (+3%/a) ruggero@schleicher-tappeser.eu 16

17 Solar radiation differences EUR / kwh 0,300 present FIT large systems 0,250 0,200 0,10 0,150 0,100 0,050 0,02 - Assumption 2050 ruggero@schleicher-tappeser.eu 17

18 Spread of household electricity prices in the EU es de it dk EUROSTAT 18

19 Subsidies keep electricitry tariffs low 0,45 Household electricity tariffs 2008 (USD/kWh) 0,40 0,35 0,30 0,25 0,20 0,15 0,10 0,05 0,00 Source: EIA 19

20 CAPTIVE POWER GENERATION 20

21 New actors in the game New technologies provide an alternative at the level of the wall outlet A new market at this level will affect traditional utilities and regulation Captive power production will increase, the amount of utility provided electricity will decrease Independent power providers National market: competition between traditional utilities Consumers (private + industry) become producers ruggero@schleicher-tappeser.eu 21

22 Growing opportunity: Captive Power Generation in India Wind power market mainly driven by captive power for manufacturing industries (70% of customers in 2008) 30% of industrial consumption: in-house power plants Example: factories in a central Indian city Highly dynamic economic development 12-14h power cuts per day unscheduled for longer periods Electricity tariff: 0,10 /kwh Cost of back-up diesel power 0,13-0,15 /kwh (10-12h/day in process industries) High indirect costs and efficiency losses due to power cuts Many factories working at night for avoiding power cuts High reliability of sunshine during most of the year opportunities for PV and CSP ahead ruggero@schleicher-tappeser.eu 22

23 Captive Power for Industries in weak grid areas: challenges Challenges for developing appropriate business models: Find: industries with relatively constant and partially not timesensitive (heating and cooling) electricity requirements during daytime Adapt industrial processes so as to allow for demand side management for optimal use of power generated Most interesting: industrial activity areas with a good mix of activities in order to distribute risks Requirement: appropriate surfaces for REN nearby. Integrate wind and biomass as available Minimise diesel backup requirements Find agreements with public utilities for optimal coordination ruggero@schleicher-tappeser.eu 23

24 STANDARDISATION 24

25 Standardisation of components and plants Standardised components: Reduce perceived component risks Facilitate reselling of used components (second hand market) Reduce risk of changes in plant utilisation / configuration Standardised plants: Reduce planning costs, planning risks Reduce permitting times Both: Reduce costs and risks Improve market transparency Improve risk transparency, facilitate risk assessment, improve bankability, reduce capital costs ruggero@schleicher-tappeser.eu 25

26 Integrated functional units with stardardised interfaces Integration of control and storage (electricity & heat) Adapting functions to fluctuating availability of power Optimal dimensioning of components Minimisation of installation and maintenance requirements and risks Facilitated relocation and reselling PV lamps Solar refrigeration units Solar street lights Solar charging stations Solar washing machines Standard food processing machines (drying, baking...) Standard chemical processing units Telecommunication equipment 26

27 Second-hand markets Lower risk of shorter system duration in first-hand markets High reselling price requires: sufficient standardisation of components possibility of disassembling the system sufficient volume of the market sufficient transportability of components continuity of warranty obligations Lower capital costs, growing first-hand markets since potential is far from being exhausted 27

28 COMBINING GAS AND ELECTRICITY MARKETS 28

29 Electricity tariffs Mediterranean 0,25 EUR 0,20 0,15 0,10 private low private high industry low industry high First Solar ,05 0,00 Italy Turkey Morocco Tunisia Algeria Egypt India Source: Exportinitiative EE 29

30 Exporting electricity by pipeline Opportunity for national utilities running on own natural gas: Produce additional electricity with wind and PV instead of additional gas turbines Buffer variable production with gas-turbines in national grid Sell saved natural gas on international markets (via existing pipelines) High international gas prices ensure competitiveness No immediate need for new grid infrastructure 30

31 THANK YOU 31