BLOOMBERG NEW ENERGY FINANCE SUMMIT

Transcription

1 BLOOMBERG NEW ENERGY FINANCE SUMMIT NEW YORK 23 APRIL 2013 Michael Liebreich, Chief Executive Bloomberg New Energy Finance // / / / 1

2 AGENDA 1. Clean energy investment update 2. Four energy realities 3. New Energy ROI 2

3 GLOBAL TOTAL NEW INVESTMENT IN CLEAN ENERGY, ($BN) +20% -11% +34% +16% -2% $54bn +48% $80bn +42% +45% $114bn $165bn $191bn $187bn $251bn $302bn $269bn Note: Includes corporate and government R&D, and small distributed capacity. Adjusted for reinvested equity. Does not include proceeds from acquisition transactions Source: Bloomberg New Energy Finance 3

4 GLOBAL RENEWABLE CAPACITY ADDITIONS (GW) Other renewables Biomass & Waste Wind 20 Solar Note: Other renewables includes marine and geothermal power only. Source: Bloomberg New Energy Finance 4

5 CLEAN VS FOSSIL-BASED GENERATING CAPACITY INVESTMENT, ($BN) Fossil fuel Clean energy Note: Clean energy total excludes large hydro. Fossil fuel is investment on coal and gas capacity. We assume capacity retirement of 3.3%/yr for coal and 4%/yr for gas. Source: Bloomberg New Energy Finance 5

6 EQUIPMENT SUPPLY AND DEMAND, (GW) Manufacturing capacity SOLAR Demand Optimistic Conservative Manufacturing capacity Demand WIND Note: Supply scenarios based on continued 2012 utilisation rates. Source: Bloomberg New Energy Finance 6

7 NEX CLEAN ENERGY INDEX YTD NEX NASDAQ S&P Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-1 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Note: Values as of 10 April 2013; NASDAQ and S&P 500 rebased to 100 on 01 Jan 2003 Source: Bloomberg New Energy Finance 7

8 NEW INVESTMENT IN CLEAN ENERGY BY REGION, ($BN) North America & Caribbean Europe Asia & Oceania Central & South America Middle East & Africa Note: Excludes corporate and government R&D Source: Bloomberg New Energy Finance 8

9 US 2012 THE CLEAN ENERGY ELECTION Solyndra! Solyndra! Solyndra! I m going to renew the wind Production Tax Credit! Pictures: Bloomberg 9

10 US ANNUAL CLEAN ENERGY INVESTMENT AND CAPACITY ADDITIONS, TOTAL INVESTMENT, $BN CAPACITY, GW % % Other renewables Biomass & waste Solar Wind Source: Bloomberg New Energy Finance 10

11 HENRY HUB GAS PRICE ($/MMBTU) Summit 2012 $2.21/MMBtu Summit 2013 $4.26/MMBtu (+130%) 5 Henry Hub 0 Oct-2005 Oct-2006 Oct-2007 Oct-2008 Oct-2009 Oct-2010 Oct-2011 Oct-2012 Source: Bloomberg Terminal 11

12 EUROPEAN CREDIT DEFAULT SWAP SPREADS, Dec 09 Dec 10 Dec 11 Dec 12 Portugal Italy Spain France Netherlands Germany UK Sweden Finland Norway Source: Bloomberg Terminal 12

13 EUROPE - POLICY UNCERTAINTY Retroactive changes Unplanned reduction Source: Bloomberg New Energy Finance 13

14 TOP 15 COUNTRIES FOR NEW INVESTMENT IN CLEAN ENERGY IN 2012 AND % CHANGE ON 2011 ($BN) China % United States % Germany % Japan % Italy % United Kingdom % India % Australia % South Africa % Brazil % Canada % France % Belgium % Greece % Spain % Note: Excludes corporate and government R&D Source: Bloomberg New Energy Finance 14

15 SUPPLY CHAIN CONSOLIDATION 15

16 NEW ENERGY REALITIES 1. Unconventional oil and gas 2. Improving energy intensity 3. Cheap clean energy 4. Unpredictability 16

17 US SHALE GAS PRODUCTION (BCF PER DAY) Qatar China UK Rest of US Eagle Ford Marcellus Haynesville Woodford Fayetteville Barnett 0 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Source: Bloomberg New Energy Finance, US EIA, UK DECC, China Customs, BP Statistical Review 17

18 US PROJECTED NET IMPORTS OF NATURAL GAS, TRILLION CUBIC FEET Historical Note: 2013 figures show Early Release Source: US EIA Annual Energy Outlook, ; Bloomberg New Energy Finance

19 US PROJECTED NET IMPORTS OF NATURAL GAS, TRILLION CUBIC FEET Historical Note: 2013 figures show Early Release Source: US EIA Annual Energy Outlook, ; Bloomberg New Energy Finance

20 US PROJECTED NET IMPORTS OF NATURAL GAS, TRILLION CUBIC FEET Historical Note: 2013 figures show Early Release Source: US EIA Annual Energy Outlook, ; Bloomberg New Energy Finance

21 US PROJECTED NET IMPORTS OF NATURAL GAS, TRILLION CUBIC FEET Historical Note: 2013 figures show Early Release Source: US EIA Annual Energy Outlook, ; Bloomberg New Energy Finance

22 MAJOR GLOBAL SHALE FIELDS Canada Norway Poland Mexico USA Algeria Libya China Brazil Australia 200 trillion cubic feet Note: Technically recoverable shale gas resources shown Argentina South Africa Source: EIA Assessment of World Shale Gas Resources, April

23 UK SHALE GAS The extraordinary windfall, which is completely God-given, that this country has got is shale gas. Owen Paterson UK Environment Secretary Picture: Getty Images 23

24 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 280 AUD trillion GDP Historical Oct Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 24

25 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 280 AUD trillion GDP Historical Oct Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 25

26 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 280 AUD trillion GDP Historical Oct Sept Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 26

27 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 280 AUD trillion GDP Historical Oct Sept Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 27

28 AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 280 AUD trillion GDP Historical Oct Sept Jun Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 28

29 US NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 5,000 Feb 2005 USD trn 2.0 4,500 4,000 3,500 Historical ,000 GDP 1.2 2, Source: EIA, Bloomberg New Energy Finance

30 US NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 5,000 Feb 2005 Feb 2007 USD trn 2.0 4,500 4,000 3,500 Historical ,000 GDP 1.2 2, Source: EIA, Bloomberg New Energy Finance

31 US NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 5,000 Feb 2005 Feb 2007 USD trn 2.0 4,500 4,000 3,500 Historical ,000 GDP 1.2 2, Source: EIA, Bloomberg New Energy Finance

32 US NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 5,000 Feb 2005 Feb 2007 USD trn 2.0 Dec ,500 4,000 3,500 Historical ,000 GDP 1.2 2, Source: EIA, Bloomberg New Energy Finance

33 US NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 5,000 4,500 Feb 2005 Feb 2007 USD trn Dec 2009 Apr ,000 3,500 Historical ,000 GDP 1.2 2, Source: EIA, Bloomberg New Energy Finance

34 US NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, TWh 5,000 4,500 Feb 2005 Feb 2007 USD trn Dec 2009 Apr 2011 Dec ,000 3,500 Historical ,000 GDP 1.2 2, Source: EIA, Bloomberg New Energy Finance

35 US CAR USE AND FUEL EFFICIENCY 3.5 Total vehicle miles travelled (tm/year) 25 Fuel efficiency of new cars (mpg, sales weighted average) % 0.5 CAGR since Note: Total vehicle miles grew at 2.7% CAGR between 1971 and % CAGR since Source: US Department of Transportation Federal Highway Administration; University of Michigan Transportation Research Institute; Bloomberg New Energy Finance 35

36 NET OIL AND GAS IMPORT DEPENDENCY, (% of consumption) Gas 100% 80% 60% 40% European Union Japan 20% China India United 0% States -20% 20% 40% 60% 80% 100% Oil Source: IEA 36

37 PV EXPERIENCE CURVE, ($/W) Crystalline silicon 2000 PV MODULE PRICES HAVE FALLEN 80% SINCE % IN Thin-film ,000 10, ,000 1,000,000 Cumulative capacity, MW Source: Paul Maycock, Bloomberg New Energy Finance Note: Prices inflation indexed to US PPI. 37

38 AVERAGE LEVELISED COST OF ONSHORE WIND, ( /MWH) Denmark and Germany WIND TURBINE PRICES HAVE FALLEN 29% SINCE 2008 Global 50 14% ,000 10, ,000 1,000,000 Cumulative capacity, MW Note: Learning curve (blue line) is least square regression: R 2 = 0.88 and 14% learning rate. Source: Bloomberg New Energy Finance, ExTool 38

39 LITHIUM-ION BATTERY EXPERIENCE CURVE Battery cost ($/kwh) 10,000 EV BATTERY PRICES HAVE FALLEN 37% SINCE H EV Li-ion battery cost forecast (BNEF) 1, Cost-competitiveness (on total ownership basis) H $689/kWh H $638/kWh Consumer Li-ion battery experience curve EV Li-ion battery prices, historical Consumer Li-ion battery prices, historical ,000 10, ,000 1,000,000 10,000,000 Cumulative production capacity (MWh) Source: Battery University, MIIT, IIT, Bloomberg New Energy Finance 39

40 POWER GENERATION CAPACITY ASSET FINANCE (GREMO NEW NORMAL) $bn (nominal) Clean energy asset investment will be $630bn in % of total Note: 1. All $bn figures are nominal assuming a 2% annual rate of inflation 2. EfW is energy from waste Small-scale PV includes commercial and residential scale rooftop PV. Marine Solar thermal Small-scale PV Solar PV Offshore wind Wind EfW Biomass Geothermal Hydro Nuclear Oil Gas Coal Source: Bloomberg New Energy Finance 40

41 TOTAL PRIMARY ENERGY DEMAND TWh 200, , , ,000 Mtoe 16,000 14,000 12,000 Renewable Energy (excl. hydro) Hydro 120, ,000 80,000 60,000 40,000 20, ,000 8,000 6,000 4,000 2,000 0 Nuclear Traditional biomass Fossil IEA WEO 2012 Source: Bloomberg New Energy Finance 41

42 PREDICTION If we look at things like renewable wind, solar, biofuels, we have those sources over the next 30 years growing 700 to 800 percent. But in the year 2040, they ll supply just 1 percent. Rex Tillerson CEO, ExxonMobil March

43 UNCERTAINTY The world of energy is facing a period of unprecedented uncertainty Fatih Birol Chief Economist, IEA Picture: Mikhail Evstafiev, Wikimedia 43

44 NEW ENERGY ROI RESILIENCE OPTIONALITY INTELLIGENCE 44

45 NEW ENERGY ROI RESILIENCE Don t ask: What is the expected outcome? Ask: What is the worst that can happen? Source: Bloomberg New Energy Finance 45

46 TRADITIONAL THREATS ACCIDENTS NATURAL DISASTERS GEOPOLITICS SECURITY 46

47 NEW THREATS CYBERSECURITY 47

48 CHINA THERMAL POWER GENERATION VERSUS WATER SCARCITY BY PROVINCE, 2010 Freshwater scarcity rating: Water deficit Severe scarcity Moderate scarcity No scarcity 100TWh 48

49 CHINA THERMAL POWER GENERATION VERSUS WATER SCARCITY BY PROVINCE, 2030 Freshwater scarcity rating: Water deficit Severe scarcity Moderate scarcity No scarcity 100TWh 49

50 MAJOR GLOBAL SHALE FIELDS Canada Norway Poland Mexico USA Brazil Algeria Libya China Australia 200 trillion cubic feet Note: Technically recoverable shale gas resources shown Argentina South Africa Source: EIA Assessment of World Shale Gas Resources, April

51 MAJOR GLOBAL SHALE FIELDS WATER STRESS Canada Norway Poland Mexico USA Brazil Algeria Libya China Australia 200 trillion cubic feet Note: Technically recoverable shale gas resources shown Argentina South Africa Source: Shale gas resources: EIA Assessment of World Shale Gas Resources, April 2011; Water Stress: UNEP, Bloomberg New Energy Finance 51

52 SOCIAL ACCEPTABILITY FRACKING, TAR SANDS Source: Wikimedia commons 52

53 STUDENT FOSSIL FUEL DIVESTMENT MOVEMENT Picture: gofossilfree.org, US Navy 53

54 CLIMATE CHANGE Image: Bloomberg Businessweek 54

55 NEW ENERGY ROI OPTIONALITY In times of volatility options have extraordinary value Source: Bloomberg New Energy Finance 55

56 OPTIONALITY SO WHERE ARE THESE OPTIONS? TECHNOLOGY OPTIONS OPERATIONAL OPTIONS FINANCIAL OPTIONS Energy efficiency Power storage Demand management Interconnection Fuel flexibility Mini-grids CCS readiness Natural hedges Dual sourcing Market diversification Sector diversification Value chain diversification R&D Coalitions Capital light Low leverage Structured finance Conditional commitments Hedging Guarantees Option pricing Source: Bloomberg New Energy Finance 56

57 OPTIONALITY INVESTOR EXAMPLE $48 billion $1.5 billion 57

58 NEW ENERGY ROI - INTELLIGENCE A tsunami of information Are you surfing or drowning? Source: Bloomberg New Energy Finance 58

59 INTELLIGENCE MACHINE INTELLIGENCE Smart grid Internet of things Pervasive sensors Automated optimisation Big data HUMAN INTELLIGENCE Consumer behaviour Market intelligence Talent management 59

60 NEW ENERGY ROI DINOSAUR HEURISTICS Scale Centralisation Baseload-plus-peak Dispatch management Vertical integration Confidentiality Defence budget MAMMAL HEURISTICS Efficiency Network Responsiveness Demand management Coalitions Data sharing R&D budget Photos: Wikimedia Commons 60

61 THANK YOU! RESILIENCE OPTIONALITY INTELLIGENCE 61