Challenges and Opportunities in the Asian Wind Sector

Transcription

1 Challenges and Opportunities in the Asian Wind Sector A Presentation on Effectively Harnessing Wind Potential 29 April 2013 Bangkok, Thailand Naveen Raghavan Balachandran, Senior Director for Public Affairs & Business Development Asia-Pacific & China Vestas

2 Agenda 1 Global Wind Power Trends 2 Why Wind Power in Asia? 3 Challenges to Wind Power Development 4 Effectively Harnessing Wind Potential 5 About Vestas How We Assist Wind Farm Development 2

3 Agenda 1 Global Wind Power Trends 2 Why Wind Power in Asia? 3 Challenges to Wind Power Development 4 Effectively Harnessing Wind Potential 5 About Vestas How We Assist Wind Farm Development 3

4 Global Wind Power Trends Security of Supply and Protection Against Volatility Security of Supply Wind power: protection against supply chain disruptions WEO Oil Price Forecasts, (US$/barrel) Fossil fuel prices are volatile and unpredictable Source: IMF WEO various years, after Ossowski et al. (2008) 4 April 2012 Bangkok Clean Power Asia 2013

5 Global Wind Power Trends Wind Power Consistently Growing, Asia leading the way. Global Annual Installed Wind Capacity CAGR +23% 38,708 38,850 40,629 44,711 26,721 19,865 3,760 6,500 7,270 8,133 8,207 11,531 15, Annual added power capacity (GW) 18,625 20,345 21,215 81% 21,775 81% CAGR +4% 22,400 23,035 80% 79% 23,705 79% 24,445 78% 25,060 78% 25,853 77% China India Australia Japan New Zealand South Korea 80% 14% 3% 83% 12% 2% 12% 3% 12% 3% 13% 3% 13% 3% 13% 4% 13% 4% 13% 4% 13% 5% Taiwan Philippines Pakistan Other Asian Sources: GWEC Global Wind Statistics 2012 and EER April 2012 Bangkok Clean Power Asia

6 Global Wind Power Trends However, Local Content Requirements Lead to Increased COE for Renewables April 2012 Bangkok Clean Power Asia 2013

7 Global Wind Power Trends However, Local Content Requirements Lead to Increased COE for Renewables April 2012 Bangkok Clean Power Asia 2013

8 Global Wind Power Trends However, Local Content Requirements Lead to Increased COE for Renewables Local content requirements are increasingly prevalent and risk undermining CoE trends April 2012 Bangkok Clean Power Asia 2013

9 Agenda 1 Global Wind Power Trends 2 Why Wind Power for Asia? 3 Challenges to Wind Power Development 4 Effectively Harnessing Wind Potential 5 About Vestas How We Assist Wind Farm Development 9

10 Why Wind Power for Asia? Investing in Wind Today Will Enable Meeting Energy Demands Tomorrow 1 Competitive low cost of energy 3 Fast short ramp-up time Cost of Energy, USD/mwh Ramp-up-time, years Coal and gas Wind Biomass Solar Wind Solar Hydro Biomass 2 Predictable business case certainty 4 Clean few emissions, no water usage and 85 % recyclability GHG-emission, gco2/kwh Water cons., liters / 5 mwh - Predictable revenue - Stable costs - Proven technologies Wind Nuclear Wind Solar % Business Case Certainty Biomass Coal Coal Nuclear 5 Cost Effective & Efficient wind is very competitive 6 Independent stable electricity supply - No borders - No wind scarcity - No geopolitical disputes Power Independence 10 Note: Sources: * Minor water usage for cleaning purposes in wind and solar energy New Energy Finance (2009), Singapore IEW conference (2009), WEF (2009), EWEA (2009), Vestas Global Marketing & Customer Insight department.

11 Why Wind Power for Asia? Promising Policy & Regulatory Developments Pakistan RE policy framework FIT/PPA South Korea Green Growth strategy RPS / REC Japan RE policy framework Good onshore FIT Taiwan RE policy framework FIT- onshore and offshore India 5 Year Plan ( ) FITs/RPO/REC Philippines RE policy framework FIT/Installation targets implemented 11 Sri Lanka RE plan being finalised FITs/RPS for small projects only Thailand RE policy framework Fixed adder tariff for 10 years Movement to FIT April 2012 Bangkok Clean Power Asia 2013 Indonesia FIT in development Q Australia LRET scheme (potential adjustment) Grid & transmission restrictions Vietnam Onshore FIT Wind Build-out legislation New Zealand Market fundamentals good, no FIT needed ETS

12 Why Wind Power for Asia? Skills-transfer takes place throughout the value chain R&D and manufacture Assembly & testing Sales & planning Transport Installation Maintenance Naturally local 1 GW of wind power produces *Permanent highly skilled service jobs (after production and construction)* + = 122 Long-term Jobs* 1500 Short-term Jobs (Construction) 1622 Jobs!!! *Average number based on historical experience. Actual jobs provided may vary significantly depending on among other turbine choice and location 12 April 2012 Bangkok Clean Power Asia 2013

13 Agenda 1 Global Wind Power Trends 2 Why Wind Power in Asia? 3 Challenges to Wind Power Development 4 Effectively Harnessing Wind Potential 5 About Vestas How We Assist Wind Farm Development 13

14 Challenges to Wind Power Development Political Risks & Policy/Regulatory Hurdles Remain against a 20-year PPA backdrop Civil unrest/ disturbance Other Key Issues across Asia: Ongoing delays for implementation of announced incentives schemes Currency transfer restrictions POLITICAL RISKS associated with investments in emerging Asian markets Expropriation Opaque Government-driven processes and limited industry consultation Land and Environmental legislation prevent utilization and development of optimal sites Permitting and licensing issues increase lead time and costs Grid and transmission constraints a barrier in most APAC markets Breach of contract/ Lax enforcement Financing projects remains a problem as long as barriers are not overcome 14 April 2012 Bangkok Clean Power Asia 2013

15 Challenges to Wind Power Development Continued Reliance on Conventional Power Consumption of Fossil Fuel Subsidy (% of GDP, 2010) Projected Asian Oil Import Requirements Source: ADB Outlook 2012b Source: Issac, Park and Lee/ ADB Outlook 2013 In 2010, Asia consumed 34% of the global energy supply. That same year, global fossil-fuel consumption subsidies reached $409 billion. Yet the renewable energy sector only received $66 billion in subsidies. Unless Governments step in to change their mindset, wind power, like other renewable energy sources, will never become fully harnessed. 15 April 2012 Bangkok Clean Power Asia 2013

16 Challenges to Wind Power Development Access to Competitive Financing Given Sovereign, Market & Political Uncertainties Limited Capitalization of Local Banks Low Sovereign Credit Rating Limited Risk Appetite/ High Interest Rates No/Limited Guarantee on PPA payment No Lenders/Creditors of Last Resort Political Climate in Constant Flux Lax Regulatory Enforcement Security/Terrorism/ Unrest Issues 16 April 2012 Bangkok Clean Power Asia 2013

17 Challenges to Wind Power Development Harnessing Wind Effectively - Variability and Predictability Wind power is predictable 24-hours-ahead forecast compared with actual output (MW) Output from dispersed wind power plants Low correlation of production from different sites Source: Institute for Public Policy Research, 2012 Source: IEA Wind Task 25, 2009 Forecasting wind farm output, which is based on meteorological modelling and refined over time, is an increasingly accurate tool used by electricity system operators, power asset owners and electricity traders worldwide. Dispersing wind power plants minimises correlation of variability in production. With the right partner & expertise, many issues surrounding wind can be minimized or eradicated 17 April 2012 Bangkok Clean Power Asia 2013

18 Agenda 1 Global Wind Power Trends 2 Why Wind Power in Asia? 3 Challenges to Wind Power Development 4 Effectively Harnessing Wind Potential 5 About Vestas How We Assist Wind Farm Development 18

19 Case Study: Emerging Market Australia Collgar Wind Farm Collgar Wind Farm is located 25km south east of Merredin in Western Australia The site was identified in 2006 through Investec s joint venture with Windlab Systems Investec commenced wind monitoring on site in 2007 and began development work in earnest in 2008 Development approval was granted in August 2008 Financial Close achieved on 31st March 2010 Collgar Wind Farm is a 206MW facility, the largest wind farm in WA and one of the largest in Australia The project has been commissioned in April x Vestas V90 1.8MW turbines have been installed across the 18,000ha site The project is connected to the South West Interconnected System (the SWIS ) via a 220kv transmission line running through the site 19 April 2012 Bangkok Clean Power Asia 2013

20 Case Study: Emerging Market Australia Collgar Wind Farm The key players and the project timeline A 15 year off-take contract with Synergy, the main energy retailer in Western Australia Connection to the SWIS (South West Interconnected System) via interconnection works and access agreements with Western Power Turbine supply and installation via an EPC contract with Vestas 20-year Operations and Maintenance contract with Vestas Equity from a consortium of the Retail Employees Superannuation Trust (REST) and the UBS Global Infrastructure Fund Project finance debt from a syndicate of ANZ, Westpac, CBA, NAB, West LB and the Danish export credit agency EKF WLS identifies Collgar site Investec acquire dev. rights under JV with WLS Monitoring commenced Site secured Dev. Approvals obtained Community engagement Synergy SPO8 Tender commences Engagement with equity and banks Engagement with contractors EPC contract with Vestas Financial close March 31 st Construction commences in May First turbine erected in November Substation works completed First turbine energized in June Collgar wind farm commissioned and connected to the grid 20 April 2012 Bangkok Clean Power Asia 2013

21 Agenda 1 Global Wind Power Trends 2 Why Wind Power in Asia? 3 Challenges to Wind Power Development 4 Effectively Harnessing Wind Potential 5 About Vestas How We Assist Wind Farm Development 21

22 About Vestas A Global Leader in Wind Energy 5.8 billion Euro revenues in ,000 turbines monitored Wind, Oil and Gas expresses the ambition of making wind an energy source on a par with fossil fuels. 18,000 Employees Activities in 73 countries > 55 GW installed capacity 100 billion kwh clean energy per year 25% Of global accumulated capacity Onshore 40% Of global accumulated capacity Offshore

23 Servicing throughout the wind project value chain The Vestas value Vestas is dedicated to working in partnership with customers to deliver the lowest cost of energy and maximum return on investment in wind energy. proposition Edit purple bar to cover full cycle Project planning Procurement and construction We are relentlessly committed to making wind work better for our customers by: Operation and optimisation Taking a lifetime partnership perspective Delivering Business Case Certainty Continually lowering the Cost of Energy Putting Safety & Citizenship first Financing. Siting. Grid requirements. Local policy and regulations. Customers need to consider a wide range of crucial factors when they invest in a wind power plant. And not just at the planning stage, but for the whole lifecycle of the project. When customers choose a wind power supplier, they need a business partner with a track record of innovation, commitment and success of delivering wind power plants. A partner like Vestas. Building a wind power plant is one thing. Operating it at optimum efficiency is another. Whether it is managing and maintaining the turbines, training customers to operate them.. 23 April 2012 Bangkok Clean Power Asia 2013

24 24 Vestas Offering across the entire value chain

25 Thank you for your attention. Copyright Notice The documents are created by Vestas Wind Systems A/S and contain copyrighted material, trademarks, and other proprietary information. All rights reserved. No part of the documents may be reproduced or copied in any form or by any means - such as graphic, electronic, or mechanical, including photocopying, taping, or information storage and retrieval systems without the prior written permission of Vestas Wind Systems A/S. The use of these documents by you, or anyone else authorized by you, is prohibited unless specifically permitted by Vestas Wind Systems A/S. You may not alter or remove any trademark, copyright or other notice from the documents. The documents are provided as is and Vestas Wind Systems A/S shall not have any responsibility or liability whatsoever for the results of use of the documents by you. 25