Global perspective on Wind Energy: How can Michigan be in ... · Object of Presentation •...
Transcript of Global perspective on Wind Energy: How can Michigan be in ... · Object of Presentation •...
Global perspective on Wind Energy: How can Michigan be in The Game?Stefan SchmitzLansing, MI, December 14, 2007
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Object of Presentation
• Understand the basics of the global wind energy market
• Understand implications for MichiganMichigan
• Identify opportunities and strategy for for Michigan
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Stefan Schmitz background
• Qualified in Germany and England & WalesWales
• Specializes in energy and project finance• In renewable energy since 2000• Advises project developers, banks, investors,
investors, utilities, turbine manufacturers• Experience in wind, solar, geothermal projects
projects• Current work includes: wind projects in US,
France, Czech Republic; solar projects in France, Italy, Spain
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Introduction
• Energy is indispensable in a modern society
• Energy consumption is increasingincreasing
• Emerging markets demand their their share of economic growth/energy
• More energy is needed !
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Introduction
• Traditional sources of energy are finite (Oil has already peaked)
• Other sources become more expensiveexpensive
• Renewables can soon be generated at at competitive costs
• Fossil fuels increase global warming• Fossil fuels depend on imports from
unstable areas of the world
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Opportunities
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Introduction
• Total investment in renewable energy is expected to grow to $100bn within a decade, a sustained compounded annual growth rate of 15-20%.
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Growth of Wind Energy
Installed Wind Power in the World- Annual and Cumulative -
0
2,000
4,000
6,000
8,000
10,000
12,000
1983 1990 1995 2000 2005
Year
MW
per
yea
r
0
10,000
20,000
30,000
40,000
50,000
60,000
Cum
ulat
ive
MW
Source: BTM Consult ApS - March 2006
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Growth in the US
2001 2002 2003 2004 2005 20060
2000
4000
6000
8000
10000
12000
1 2 3 4 5 6 7
Installed MW
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Expected Growth US until 2020
2010 20200
20000
40000
60000
80000
100000
120000
1 2 3
Installed MW
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The Global Wind Market
• US first mover in the 1980s• Europe took over 15 years ago• Most know-how today in Europe• Manufacturing dominated by European based
based companies• Developers on both sides of Atlantic, larger ones
ones in US, small and very small in Europe• Financing (debt and equity) largely from Europe
Europe
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Money
• Market is afloat with money for equity equity investment
• Supply of equity far exceeds projectsprojects
• Debt might be more difficult because because of the current credit crunchcrunch
• Banks will apply rigorous conditions conditions on loans
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Equipment
• Greatest obstacle for growth• Wind turbines in very short supply• US requires different technology• Very few large companies, limited output• Even less for off-shore projects• Waiting periods of up to two years• Costs have almost doubled in the last 5 years
years
→ growth potential is limited !
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Know - How
• Few people with know-how worldwideworldwide
• All sectors:– Development– Engineering– Construction– Financing– Legal– Insurance
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Global Competition
• Competition for know-how, turbines, debt, and jobs
• Key competition: projects, manufacturersmanufacturers
• Competition globally: Market players will will go where they can make most profitsprofits at least risk
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Decisive Factors for Success
• Political Stability• Good wind speeds• High, long term and secure tariff• Good planning laws and regulations
regulations• Government support• Trained work force • Accessibility
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Additional Factors for Manufacturers
• Will they be able to sell theirequipment (are potential customerscustomers nearby, will projects beprojects be built in the vicinity) ?
• Access to the sea, harbour, roadsroads
• State incentives
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Michigan
SO• Is wind energy a good opportunity
for Michigan ?• How can Michigan benefit ?• What does Michigan have to do ?
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Michigan
• Tariff: without RPS the chances forMichigan are low
• Tough competition from other states in US
• Even with RPS success not guaranteed• Feed-in-Tariff ?• Additional aspects needed
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Planning, zoning
• Opportunities can be increasedincreased by creating a favourable set of rules forplanning and zoning
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Off-Shore
• Michigan has very good potential potential for off-shore wind projectsprojects
• No projects yet in the Great Lakes Lakes or sweet water
• Market only gearing up• No turbines available at the
moment
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Roadmap(s) for Success in Michigan
I THINK...
• Government• Projects• Manufacturing
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Roadmap(s) for Success in Michigan
I THINK...
• Regulatory framework (RPS, feed in tariff; planning and zoning)
• Attract project developers who will buildbuild projects in Michigan
• Manufacturers will follow if they seeenough customers (plus incentives)
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Roadmap(s) for Success in Michigan
• Cold calling manufacturers to invest in invest in Michigan is a difficultenterprise
• Many other states are doing this, lots lots of competition
• Setting up a framework which takestakes account of the business‘ interests and needs can be moresucessful
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Roadmap(s) for Success in Michigan
SO...This is an international market..
Understand it and the players..
Talk to the European developers..
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Questions ?
Dr Stefan SchmitzPartnerSquire Sanders & DempseyTower 42, Level 2525 Old Broad StreetLondon EC2N 1HQUKTel: 011 44 20 7189 8089E-mail: [email protected]