BLOOMBERG NEW ENERGY FINANCE - Department Of Energy

MICHAEL LIEBREICH KEYNOTE, 20 MARCH 2012 TWITTER: @MLiebreich 1 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

BLOOMBERG NEW

ENERGY FINANCE

MOVING TOWARDS A LOW CARBON ECONOMY

20 MARCH 2012

TARYN WILKINS

MICHAEL LIEBREICH KEYNOTE, 20 MARCH 2012 TWITTER: @MLiebreich 2 / / / /

TOTAL INVESTMENT IN CLEAN ENERGY

Source: Bloomberg New Energy Finance

A billion dollars isn’t cool.

You know what’s cool?

A trillion dollars.


GLOBAL TOTAL NEW INVESTMENT IN CLEAN ENERGY,

2004–11 ($BN)


Note: Includes corporate and government R&D, and small distributed capacity. Adjusted

for re-invested equity. Does not include proceeds from acquisition transactions

$54bn

$75bn

$113bn

$153bn

$187bn $189bn

$247bn

39%

51%

35%

22%

1%

31%

2004 2005 2006 2007 2008 2009 2010

$0bn$0bn

$0bn

$0bn

$0bn $0bn

$260bn

5%

2004 2005 2006 2007 2008 2009 2010 2011

$0bn$0bn

$0bn

$0bn

$0bn $0bn

$260bn

5%

2004 2005 2006 2007 2008 2009 2010 2011

5%



TOTAL NEW CLEAN ENERGY FINANCIAL INVESTMENT,

2010–11 ($BN)

Note: Includes small distributed capacity and adjustments for re-invested equity. Does

not include corporate and government R&D or proceeds from acquisition transactions

2010 2011

5.3

6.6

6.9

6.9

7.0

7.0

20.2

32.1

33.7

45.0

Canada

India

Spain

Brazil

UK

Japan

Italy

Germany

US

China

5.5

8.0

8.6

8.6

9.4

10.2

28.0

30.6

45.5

48.1

Canada

Brazil

Spain

Japan

UK

India

Italy

Germany

China

US


EU NET CAPACITY ADDITIONS (GW)

Source: EWEA, Bloomberg New Energy Finance,

0

10,000

20,000

30,000

40,000

50,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Other

Gas

PV

Wind


PROPORTION OF WIND IN ELECTRICITY MIX, 2011

Source: Bloomberg New Energy Finance, grid operators

Texas 8%

Ireland 10%

Spain 15%

Portugal 21%

Denmark 22%


0 50 100 150 200 250 300 350 400 450 500 550

Coal Fired

Natural Gas CCGT - US

Natural Gas CCGT - Europe

Natural Gas CCGT - Japan

Landfill Gas

Geothermal - Flash Plant

Wind - Onshore

Geothermal - Binary Plant

Municipal Solid Waste

Biomass - Incineration

Biomass - Anaerobic Digestion

Biomass - Gasification

PV - c-Si Tracking

PV - Thin Film

PV - c-Si

STEG - Tower & Heliostat w/storage

Wind - Offshore

STEG - Tower & Heliostat

STEG - Parabolic Trough + Storage

STEG - LFR

STEG - Parabolic Trough

Marine - Tidal

Marine - Wave

LCOE BNEF 2011 EU-ETS EUA Forecast

-

LEVELISED COST OF ENERGY Q4 2011 ($/MWH)

Carbon from the BNEF European Carbon Model with an average price of $36/tCO2 to 2020, driven by the rising cost of abatement (largely due to less cheap fuel-switching

potential) in Phase IV. Coal and natural gas capex from the US Department of Energy EIA Annual Energy Outlook 2011. US gas: Henry Hub, Japanese: imported LNG, EU:

German/UK gas. Health costs from the New York Academy of Sciences 1219: 73-98 “Full cost accounting for the life cycle of coal”

Fossil fuelled Fossil fuelled w/CO2 Competitive clean energy Health costs BNEF 2011 EUA forecast


THE PV MODULE EXPERIENCE CURVE, 1976–2012 ($/W)

Source: Paul Maycock, Bloomberg New

Energy Finance, FSLR filings Notes: Inflation adjustment using US PPI, R2 of c-Si regression = 0.94, R2 of FSLR regression = 0.98

MW (log)

0.1

1

10

100

1 10 100 1,000 10,000 100,000 1,000,000

historic prices experience curve

Chinese c-Si module prices Thin-film experience curve

First Solar thin-film module cost

1976

1985

2003

2006

2012

2012

PRICES HAVE FALLEN

75% SINCE 2008

45% OVER PAST YEAR


Source: Eurostat, grid operators, Bloomberg New Energy

Finance

Note: LCOE based on 6% weighted average cost of capital, 0.7%/year module degradation, 1%

capex as O&M annually.

RESIDENTIAL PV PRICE PARITY

2010 LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

EMEA ASOC AMER50GW

kWh/kW/year

More sun

Residentialpower marketResidential

Power market



Finance




2010

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

Spain

EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market



Finance




2011

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

SpainItaly

EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market



Finance




2012

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

Brazil

Australia

Spain

Germany

Italy

Denmark

Portugal

EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market



Finance




2013

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

Brazil

Australia

Spain

Germany

Italy

Denmark

Portugal

EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market



Finance




2014

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

Brazil

Australia

Spain

Germany

Italy

Denmark

France

Portugal

GreeceTurkey

EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market


LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

BrazilJapan

Australia

Spain

Germany

Italy

Denmark

France

Portugal

GreeceTurkey

EMEA ASOC AMER50GW

kWh/kW/year

More sun

Residentialpower market


Finance




2015

Residential

Power market



Finance




2016

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

BrazilJapan

Australia

Spain

Germany

Italy

Denmark

France

Israel

Portugal

GreeceTurkey

EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market



Finance




2017

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

BrazilJapan

Australia

Spain

Germany

Italy

Denmark

France

Netherlands

Israel

Portugal

GreeceCzech RepTurkey

EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market



Finance




2018

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

BrazilJapan

Australia

Spain

Germany

Italy

Denmark

France

Netherlands

Israel

Portugal


EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market



Finance




2019

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

United States

Mexico

BrazilJapan

Australia

Spain

Germany

Italy

Denmark

France

Netherlands

Israel

Portugal


EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market



Finance




2020

LCOE

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

800 1,100 1,400 1,700 2,000 2,300

$/kWh

United States

Mexico

BrazilJapan

South Korea

Australia

Spain

Germany

Italy

Denmark

France

Netherlands

Israel

Portugal


EMEA ASOC AMER50GW

kWh/kW/year

More sun


Power market


AVERAGE LCOE OF ONSHORE WIND, 1984-2011 (€/MWH)

Source: Bloomberg New Energy Finance, ExTool Note: Learning curve (blue line) is least square regression: R2 = 0.88 and 14% learning rate.

14%

1984 1990 2000 2004 201110

50

100

500

100 1,000 10,000 100,000 1,000,000

MW


197

51

-79

-39

-10-18

0

50

100

150

200

LCOE 1984 Turbine price

reduction

Opex

declines

Hub height Efficiency LCOE 2012

LCOE REDUCTIONS, ONSHORE WIND, 1984-2012 (EUR/MWH)


7% turbine cost

experience curve

7% efficiency

experience curve


180

190

200

210

220

230

240

250

260

2004 2006 2008 2010 2012 2014 2016 2018 2020

Actual annual

energy demand

AUSTRALIA ACTUAL VS FORECASTED ELECTRICITY

DEMAND, 2005–2020 (TWH)

Source: Australian Energy Market Operator, Bloomberg

New Energy Finance

Forecast as of

August 2011

5% shortfall due to

“energy efficiency

and solar”


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

JAPAN’S NUCLEAR FLEET (% OF REACTORS ONLINE)

Source: ANEA, Bloomberg New Energy Finance

Q1

2010

Q2

2010 Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2012

Q2

2012

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

11 MARCH 2011

EARTHQUAKE &

TSUNAMI


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