Hugh Bromley, Bloomberg New Energy Finance
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Transcript of Hugh Bromley, Bloomberg New Energy Finance
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE?
Disruption & the Energy Industry
Hugh Bromley
9 September 2015
1
Europe, Middle East
& Africa
Asia PacificAmericas
PRODUCTS TO HELP YOU UNDERSTAND THE FUTURE OF ENERGY
Solar WindOther
Renewables
Advanced
Transport
Energy Smart
TechnologiesGas
Carbon &
RECs Markets
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
2
200 EXPERTS ACROSS SIX CONTINENTS
San
Francisco
Washington DC
Sao Paulo
Cape Town Sydney
Singapore
Zurich
Munich
London
New DelhiHong
Kong
Tokyo
Beijing
Seoul
New York
North America
40
SouthAmerica
5
Europe90
Africa30
AsiaPacific
35
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
4SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
EVOLUTION OF THE WEB
Web 2.0 (1999)
● The ‘interactive’ web
● Social media and ‘folksonomies’ emerges
● Near universal adoption
Web 3.0(2006)
● The ‘intelligent’ web
● Machine learning and artificial intelligence
● Ubiquitous connectivity
Web 1.0(1990)
● The ‘read only’ web
● Standardisation, commoditisation and commercialisation
● Mass market availability and appeal
PC Era(1980’s)
● Little to no connectivity
● Bespoke configurations
● Enthusiasts and niche applications
5
Source: Bloomberg New Energy Finance, Clean Energy Regulator
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
EVOLUTION OF THE SOLAR ‘WEB’
Solar 2.0 (2012/13)
● Value sales proposition
● Increasing use of data analytics
● Financial engineering
Solar 3.0(?)
● Automated control & analytics
● Fully integrated into power system
● Ubiquitous coverage
Solar 1.0(2007)
● Fragmented cottage industry
● Commoditisation of products
● Network effect drive uptake
Grid
● Solar is high cost, low efficiency
● Enthusiasts and offgrid customers
● Bespoke configurations
5 6 7 8 10 10 12 2087
390
854
1,028
768819
200
1
20
02
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
Utility-scale PV Industrial PV
Commercial PV Residential PV
6
Source: Bloomberg, Bloomberg New Energy Finance
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September
2015
DISRUPTIVE FORCE OF THE WEB
7
Source: Bloomberg New Energy Finance - Fight, flight or adapt: Australian utility strategy
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
AUSTRALIAN ELECTRICITY SUPPLY BY SOURCE, FY2007-14
TWh Percent of total supply from fossil-fuel
19 18 19 22 27 26 28 30
199 203 202 201 193 191 185 182
1 13 4 6
91% 92% 91% 90%87% 87% 85% 84%
0%
20%
40%
60%
80%
100%
0
60
120
180
240
300
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014
Small-scale PV
Fossil fuel
Large-scale RE
Percent of supplyfrom fossil fuels
9.5% decline over four years
8
Note: Dotted column and label indicate the combined revenue of fossil-fuel generators in
the NEM. Market value is calculated as product of volume weighted spot price and
regional energy demand. ‘Carbon’ column displays estimated pass-through of AUD
23.0/t carbon price in FY2013 and AUD 24.2/t carbon price in FY2014.
Source: Australian Energy Regulator, Australian Energy Market Operator, Bloomberg
New Energy Finance - Fight, flight or adapt: Australian utility strategy.
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
ESTIMATED MARKET VALUE OF ELECTRICITY TRADED IN THE NEM, FY2007-14 (AUD BN)
5.8
7.3
5.1
6.4
8.37.9
9.5
11.9
0
2
4
6
8
10
12
FY2014FY2013FY2012FY2011FY2010FY2009FY2008FY2007
Renewables
Carbon
VIC
TAS
SA
QLD
NSW
9
AUSTRALIA CUMULATIVE INSTALLED CAPACITY BY TECHNOLOGY, 2012-40
Source: Bloomberg New Energy Finance – New Energy Outlook 2015
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
0 0 0 39
21
41
Flexible capacity
0 0 4 5 7 815
2015 2020 2025 2030 2035 2040
Utility-scale PV
0 0 0 0 1 49
Industrial PV
0 0 2 3 4 4 5Commercial PV
2 48
1317 20 23
Residential PV
0
20
40
60
80
100
120
140
2015 2020 2025 2030 2035 2040
Coal Gas Oil
Hydro Geothermal Biomass
Wind Solar Flexible capacity
10
BY 2040, OVER 50% OF CAPACITY WILL BE LOCATED BEHIND THE METER
PENETRATION ROOFTOP CAPACITY
ENERGY MARKETS UTILITY PORTFOLIOS
Source: Bloomberg Source: Bloomberg
Source: BloombergSource: Bloomberg
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
11
Source: Bloomberg New Energy Finance
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
ECONOMICS OF DISTRIBUTED VS CENTRALISEDGENERATION, 2015-40 (AUD/MWh nominal)
Reserved for BNEF clients
12
Note: Renewables costs include the renewable energy target, feed-in tariffs and state
energy efficiency schemes Source: Australian Energy Regulator, Bloomberg New Energy Finance
COMPOSITION OF RESIDENTIAL ELECTRICITY TARIFF IN NEW SOUTH WALES, FY2010-13 (AUD c/kWh)
9.3 10.7 12.314.0
18.3
21.0
23.6
27.5
2010 2011 2012 2013
Other + profit
Carbon
Renewables
Network
Wholesale
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
13
Source: Bloomberg New Energy Finance
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
ECONOMICS OF DISTRIBUTED VS CENTRALISEDGENERATION, 2015-40 (AUD/MWh nominal)
Reserved for BNEF clients
14
Source: Bloomberg New Energy Finance - Fight, flight or adapt: Australian utility strategy
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
UTILITY STRATEGY DECISION TREE
FIGHT FLIGHTADAPT
SEEK TO SLOW AND HALT RE
DEPLOYMENT
BUSINESS-AS-USUAL
POSITION COMPANY
TO BENEFIT FROM RE
INTRA-REGIONAL
DEVELOPMENT
(cannibalistic)
EXTRA-REGIONAL
DEVELOPMENT
(non-cannibalistic)
PASSIVE
INVESTMENT
(projects)
ACTIVE
INVESTMENT
(platforms)
ENABLING
TECHNOLOGY
SERVICE
PROVISION
LOBBY FOR WEAKER
RE SUPPORT
PUSH ANTI-RE
REGULATORY REFORMEXIT THE MARKET
TAKE NO ACTION TO ADDRESS
OR BENEFIT FROM RE
15
Brand PV sales Loan Lease PPA
ActewAGL Retail
AGL Energy
EnergyAustralia
ERM Power
GoEnergy
Momentum Energy
Origin Energy
Note: considers only utilities and customers within the National Electricity Market Source: Bloomberg New Energy Finance, Company websites
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
DISRUPTION OF THE SOLAR INDUSTRY
AGL2.3
EA1.8
Origin2.9
0.3
2.2
Retail customers (million)
Other retailer
offering PV
Other retailer
not offering PV
Four in five customers can source a PV system from their current energy retailer
16
Source: Bloomberg New Energy Finance
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
DISRUPTION OF THE SOLAR INDUSTRY
Reserved for BNEF clients
17
Source: Bloomberg New Energy Finance
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
ECONOMICS OF DISTRIBUTED VS CENTRALISEDGENERATION, 2015-40 (AUD/MWh nominal)
Reserved for BNEF clients
18SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
GRID REFORM?
19
Source: Michael Felton, The New York Times, Harvard Business Review,
Bloomberg New Energy Finance
UBIQUITOUS ADOPTION?
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
20
Note: Residential PV and storage show forecast Australian penetration
Source: Michael Felton, The New York Times, Harvard Business Review,
Bloomberg New Energy Finance
UBIQUITOUS ADOPTION?
2008
Residential PV
2040
2015
Residential storage
2040
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
21
This publication is the copyright of Bloomberg New Energy Finance. No portion of this document may be photocopied,
reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any way without prior consent of
Bloomberg New Energy Finance.
The information contained in this publication is derived from carefully selected sources we believe are reasonable. We do
not guarantee its accuracy or completeness and nothing in this document shall be construed to be a representation of such
a guarantee. Any opinions expressed reflect the current judgment of the author of the relevant article or features, and does
not necessarily reflect the opinion of Bloomberg New Energy Finance, Bloomberg Finance L.P., Bloomberg L.P. or any of
their affiliates ("Bloomberg"). The opinions presented are subject to change without notice. Bloomberg accepts no
responsibility for any liability arising from use of this document or its contents. Nothing herein shall constitute or be
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investment strategy or whether or not to "buy," "sell" or "hold" an investment.
COPYRIGHT AND DISCLAIMER
SOLAR 3.0: A DISTRIBUTED ENERGY FUTURE | Disruption & the Energy Industry | Sydney | 9 September 2015
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