25 June 2014 RENEWABLE ENERGY FINANCE FORUM WALL STREET Michael Liebreich, Chairman of the Advisory Board Twitter: @mliebreich
ABOUT BLOOMBERG NEW ENERGY FINANCE 200 people providing information on renewable energy, energy efficiency, gas, nuclear, advanced transportation, power and carbon markets San Francisco New York Washington DC London Zurich Beijing Tokyo New Delhi Hong Kong Singapore Sao Paulo Cape Town Sydney Michael Liebreich WTO, 88 July 2014 @MLiebreich 1
NEW INVESTMENT IN CLEAN ENERGY 2004-13 ($BN) 21% $318bn -10% $286bn -11% 17% 34% 0.6% $195bn $196bn $262bn $254bn 44% $167bn 46% $55bn 45% $80bn $116bn 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note: Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energy storage projects (not reported in quarterly statistics). 2
RENEWABLE ENERGY NEW BUILD INSTALLATIONS 2001-13 (GW) 120 100 80 60 54.0 63.8 80.8 88.1 82.2 40 20 10.8 12.0 13.5 16.0 18.1 24.9 31.2 41.5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note: Excludes large-scale hydro 3
NEX CLEAN ENERGY INDEX 2011 14 YTD 200 180 160 140 120 100 80 60 40 20 0 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 NEX NASDAQ S&P 500 Note: Values as of 23 June 2014; NASDAQ and S&P 500 rebased to 100 on 01 Jan 2011 4
2010 13: CONSOLIDATION 5
NEW INVESTMENT IN CLEAN ENERGY IN EUROPE Q1 2004 Q1 2014 ($BN) 32.2 4.1 4.8 5.1 5.6 3.9 9.8 8.4 6.8 7.7 7.1 7.2 14.0 9.2 13.3 13.9 24.3 12.9 19.2 19.7 19.4 11.1 24.8 20.4 17.1 21.721.9 27.9 28.6 26.2 27.5 25.7 21.4 23.1 17.8 21.2 15.8 9.5 10.7 11.1 9.9 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 '14 Four quarter running average Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D, and spending for digital energy and energy storage projects (reported in annual statistics only). 6
EUROPEAN POLICY SUPPORT SCHEMES UNDER REVIEW, 2013 Comprehensive review under way Retroactive changes implemented (2010-13) Suspended 7
NEX CLEAN ENERGY INDEX 2013 14 YTD 200 180 160 140 120 NEX NASDAQ S&P 500 100 80 60 40 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Note: Values as of 23 June 2014; NASDAQ and S&P 500 rebased to 100 on 01 Jan 2013 8
PUBLIC MARKETS OPEN FOR BUSINESS Source: Nest 9
RENEWABLE ENERGY NEW BUILD INSTALLATIONS 2001-13 (GW) 120 100 80 60 54.0 63.8 80.8 88.1 82.2 40 20 10.8 12.0 13.5 16.0 18.1 24.9 31.2 41.5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note: Excludes large-scale hydro 10
CLEAN ENERGY NEW BUILD INSTALLATIONS 2001-13 (GW) 120 100 80 60 2013-15 Installations forecast to grow 37% 54.0 63.8 80.8 88.1 82.2 112.4 102.9 40 20 10.8 12.0 13.5 16.0 18.1 24.9 31.2 41.5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 11
PV EXPERIENCE CURVE 1976-2013 (2013 $/W) 100 Cost per W (2013 $) 10 1976 1985 SOLAR PV MODULE COSTS HAVE FALLEN 99% SINCE 1976 2003 2006 1 2012 2013 Q3 2013 2012 0.1 1 10 100 1,000 10,000 100,000 1,000,000 experience curve Chinese c-si module prices (BNEF) First Solar thin-film module cost historic prices (Maycock) Thin-film experience curve Cumulative capacity (MW) Note: Prices inflation indexed to US PPI. Source: Paul Maycock, First Solar, Bloomberg New Energy Finance 12
LEVELISED COST OF ELECTRICITY H1 2014 ($/MWH) Marine - wave Marine - tidal STEG - LFR STEG - parabolic trough STEG - tower & heliostat Wind - offshore PV - thin film PV - c-si PV - c-si tracking Biomass - anaerobic digestion Biomass - gasification Biomass - incineration Municipal solid waste Geothermal - binary plant Wind - onshore Small hydro Large hydro Landfill gas Geothermal - flash plant Natural gas CCGT Coal fired CHP Nuclear PV projects as low as $80/MWh Onshore wind as low as $37/MWh 0 100 200 300 400 500 1037 844 Q2 2013 central H1 2014 central Fossil technologies: US China Europe Australia Note: LCOEs for coal and CCGTs in Europe and Australia assume a carbon price of $20/t. No carbon prices are assumed for China and the US. 13
ENERGIEWENDE 2000 30 (TWH) 700 600 500 400 300 200 100 Nuclear Renewables Fossil 0 2000 2005 2010 2015 2020 2025 2030, Destatis 14
CHINA DECLARES WAR ON POLLUTION We will resolutely declare war against pollution as we declared war against poverty Li Keqiang Premier of the People's Republic of China March 2014 Credit: Bloomberg 15
CHINA POWER GENERATION CAPACITY ADD BY TECHNOLOGY, 2004-13, 2020 & 2030 GW 120 100 80 60 40 20 0-20 -40 2013 Renewable energy 68% of new capacity Historic Forecast 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2020 2030 Biomass & waste Solar Wind Hydro Nuclear Oil Gas Coal Note: 2020 & 2030 forecasts from BNEF Global Renewable Energy Outlook 2014., China Electricity Council 16
CHINA POWER GENERATION CAPACITY ADD BY TECHNOLOGY, 2004-13, 2020 & 2030 GW 120 100 80 60 40 20 0-20 -40 2013 Renewable energy 68% of new capacity Historic Forecast 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2020 2030 Biomass & waste Solar Wind Hydro Nuclear Oil Gas Coal Note: 2020 & 2030 forecasts from BNEF Global Renewable Energy Outlook 2014., China Electricity Council 17
THE ORACLE OF CLEAN ENERGY We ve poured billions and billions and billions of dollars [into renewables]. And we re going to keep doing that as far as the eye can see. Warren Buffett CEO Berkshire Hathaway Picture: Bloomberg 18
GREEN BOND ISSUANCE 2007-Q1 2014 ($BN) 13.91 0.91 2.60 8.75 3.23 6.68 2.28 1.96 5.27 3.66 1.48 1.75 7.12 1.69 4.10 2.20 2.15 0.88 0.49 0.86 0.81 0.81 1.30 1.64 4.61 2007 2008 2009 2010 2011 2012 2013 2014 YTD Government Corporate selflabelled Project bonds ABS Supranational 19
GLOBAL POWER GENERATION CAPACITY ADDITIONS 2010 30 (GW) FOSSIL FUEL AND NUCLEAR RENEWABLES Forecast Nuclear Forecast 264 Marine 106 87 78 64 52 39 Oil Gas Coal 60 83 107 155 196 Solar Wind Biomass & waste Geotherm. 2010 2013 2015 2020 2025 2030 2010 2013 2015 2020 2025 2030 20
SMALL-SCALE SYSTEM CAPEX AROUND THE WORLD $ PER WATT 9 8 7 Average sub-10kw German system cost ($/W) 6 5 Average California residential system cost ($/W) 4 3 Japan residential, $/W 2 1 0 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Chinese multicrystalline silicon module price ($/W) Sources: JPEC, California Solar Initiative, BSW-Solar, Bloomberg New Energy Finance 21
DRIVERS OF LOW-COST CLEAN ENERGY Research & development Cost of finance Scale and logistics 22
MARKETS Renewable Energy Energy Smart Technologies Advanced Transport Gas Carbon and RECs SERVICES Americas Service Asia Pacific Service EMEA Service Applied Research Events and Workshops Unique analysis, tools and data for decision-makers driving change in the energy system Michael Liebreich Twitter: @mliebreich sales.bnef@bloomberg.net