How government subsidies influence the onshore wind energy market Max ten Cate 27 September 2017
Our international energy practice supports our clients throughout the initiation and execution of large scale energy & utilities projects More than 17,000 experts globally We work in 154 countries We have worked on more than 100 large scale projects in the energy & utilities sector last year With multidisciplinary teams in the fields of: Assurance, Tax, Legal and Advisory Overview of focus industries Offshore Wind Onshore Wind How government subsidies influences the onshore wind energy market Hydro Energy Power Generation Onshore energy infrastructure Solar energy 27 September 2017 2
Today s objectives Short market overview Interactive discussion on: 01 Subsidies 02 Cost of wind energy 03 Electricity prices Cost Subsidies Onshore Wind Energy Energy prices How government subsidies influences the onshore wind energy market 27 September 2017 3
Solar and Wind have driven the growth in renewable capacity over the past 6 years in Western Europe Total Capacity RES in Western Europe 1, 2010-2016 (GW) 338 304 9% 9% 15% 9% 27% 27% 369 9% 18% 27% 7% 391 9% 19% 28% 410 8% 20% 30% 433 8% 21% 31% 455 8% 21% 32% CAGR 10-16: Other 2 6% Solar PV 23% Wind 10% Total Capacity Wind, 2010-2016 (GW) 81 4% 10% 101 5% 122 7% 144 8% Offshore CAGR 10-16: 26% 55% 50% 46% 44% 42% 40% 39% Hydro 0% 96% 95% 93% 92% Onshore 9% 2010 2011 2012 2013 2014 2015 2016 2010 2012 2014 2016 Share RES of total installed capacity (% total) 37% 40% 43% 45% 46% 48% 50% 1) Countries included: AT, BE, CH, DE, DK, ES, FI, FR, GB, GR, IR, IT, NL, NO, PT, SV 2) Other includes Bio-Power and Geothermal Source: GlobalData; Strategy& analysis How government subsidies influences the onshore wind energy market 27 September 2017 4
The pipeline of growth is concentrated around wind energy, with a significant share of the forecasted capacity for 2030 already being realized Projected and Forecasted Additional RES Capacity in Western Europe 1 by 2030 (GW) 143.2 271.4 271.4 Solar Wind 71.8 82.3 82.3 Solar 71.4 95.9 9.4 2.6 2.5 0.0 13.6 13.3 0.4 189.0 129.0 Onshore 86.5 16.0 0.7 15.4 60.0 Offshore Announced Permitting Financed Under Construction Forecasted Total Total 1) Countries included: AT, BE, CH, DE, DK, ES, FI, FR, GB, GR, IR, IT, NL, NO, PT, SV Mature projects in different stages of development Note: excluding hydro and other (geothermal and bio-power) Source: GlobalData; Strategy& analysis How government subsidies influences the onshore wind energy market 27 September 2017 5
Significant capacity of wind and solar energy will be added in Germany, France, UK and the Netherlands Forecasted RES Capacity per Country by 2030 (GW) % RES of Total Installed Capacity in 2030 1 Germany 199 69% 2 Italy 67 53% 3 Spain 63 56% 4 France 98 55% 5 UK 86 59% 6 Norway 45 98% 7 Sweden 40 80% 8 Austria 31 88% 9 Switzerland 24 91% 10 11 12 13 14 15 16 Portugal 20 Greece 14 Belgium 17 Denmark Netherlands 17 26 Finland 12 Ireland 11 75% 50% 70% 81% 52% 60% 69% 2016 Other Hydro Onshore Wind Offshore Wind Solar PV 1 x Position by Total Installed RES Capacity in 2016 How government subsidies influences the onshore wind energy market 27 September 2017 1) Other includes Biopower and Geothermal Source: GlobalData; Strategy& analysis 6
Can new Dutch onshore wind energy projects survive without subsidies in the future? YES, between now and five years YES, after five years from now NO NO OPINION How government subsidies influences 27the September onshore wind 2017energy marke 7
Onshore Wind Subsidy History & Extrapolation 120 100 Price in /MWh 80 60 40 20 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 MEP SDE SDE+ SDE+ [Extrapolatie -6%] Source: Rijksdienst voor Ondernemend Nederland How government subsidies influences 27the September onshore wind 2017energy marke 8
Will cost efficiency make up for the reduced availability of premium wind site locations in the Netherlands? YES NO NO OPINION How government subsidies influences 27the September onshore wind 2017energy marke 9
LCoE developments in Onshore Wind 120 Prices in /MW 100 80 60 40 2010 2012 2016 20 0 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% Quality of location Source 2013 / 2015 : Deutsche Windguard, Kostensituation Windenergie an Land in Deutchland (update) How government subsidies influences 27the September onshore wind 2017energy marke 10
What will be the APX baseload electricity price in five years time? LOWER than 20 / MWh BETWEEN 20 and 40 /MWh HIGHER than 40 / MWh NO OPINION How government subsidies influences 27the September onshore wind 2017energy marke 11
APX Market Prices Electricity 60 50 Prices in /MWh 40 30 20 10 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: APX Group How government subsidies influences 27the September onshore wind 2017energy marke 12
Forecast Market Prices Electricity (Germany) Source: Research How government subsidies influences 27the September onshore wind 2017energy marke 13
How government subsidies influence the onshore wind energy market Subsidies Onshore Wind Energy Cost Energy prices
Contact details Max ten Cate Senior Manager Energy & Utilities Energy & Utilities group, NL PricewaterhouseCoopers Advisory N.V. Thomas R. Malthusstraat 1006 BJ Amsterdam The Netherlands T: +31 (0)88 792 72 55 F: +31 (0)88 792 97 92 M: +31 (0)6 10 40 58 89 max.ten.cate@pwc.com Max ten Cate Advisory How government subsidies influences the onshore wind energy market 27 September 2017 15