PHASE CHANGE AND THE GLOBAL ENERGY SYSTEM SMITH SCHOOL, UNIVERSITY OF OXFORD. Oxford, 28 November 2014

Oxford, 28 November 2014 PHASE CHANGE AND THE GLOBAL ENERGY SYSTEM SMITH SCHOOL, UNIVERSITY OF OXFORD Michael Liebreich, Chairman of the Advisory Board Twitter: @mliebreich

PHASE CHANGE Phase Change (n): A change in a feature of a physical system that results in a discrete transition of that system to another state. Source: Wikipedia Commons; The Free Dictionary 2

NEW INVESTMENT IN CLEAN ENERGY 2004-13 ($BN) 21% $318bn -10% $286bn -11% 17% 34% 0.6% $195bn $196bn $262bn $254bn 44% $167bn 46% $55bn 45% $80bn $116bn 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note: Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energy storage projects (not reported in quarterly statistics). Source: Bloomberg New Energy Finance 3

RENEWABLE ENERGY NEW BUILD INSTALLATIONS 2001-13 (GW) 120 100 80 60 54.0 63.8 80.8 88.1 82.2 40 20 10.8 12.0 13.5 16.0 18.1 24.9 31.2 41.5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note: Excludes large-scale hydro Source: Bloomberg New Energy Finance 4

NEW INVESTMENT IN CLEAN ENERGY BY REGION 2004-13 ($BN) North America & Caribbean 19.4 12.1 36.4 46.0 47.8 39.0 54.8 75.6 58.9 56.0 Europe 44.1 34.0 23.8 79.3 82.8 68.0 123.2 110.8 97.8 57.8 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 Asia & Oceania 120.6 103.1 108.9 Central & South America Middle East & Africa 17.6 22.228.9 61.9 49.3 39.0 78.1 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 12.3 15.6 10.5 13.4 12.612.3 9.6 3.8 5.8 0.9 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 0.5 0.6 1.0 1.7 2.6 1.5 4.5 3.5 11.0 10.0 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 Source: Bloomberg New Energy Finance 5

NEW INVESTMENT IN CLEAN ENERGY IN EUROPE Q1 2004-Q3 2014 ($BN) 33.5 4.4 7.9 4.1 5.36.1 10.9 7.4 8.2 7.8 13.8 7.8 15.9 9.5 16.7 14.2 24.6 22.9 22.2 13.9 19.9 12.3 27.4 22.2 17.5 22.9 25.3 31.0 29.5 26.9 29.2 26.3 20.8 23.2 18.3 21.6 14.9 11.8 12.1 12.7 13.0 11.0 8.8 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Four quarter running average Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D, and spending for digital energy and energy storage projects (reported in annual statistics only). Source: Bloomberg New Energy Finance Michael 23 December Liebreich 2014 Oxford, 28 November 2014 @MLiebreich 6

EUROPEAN POLICY SUPPORT SCHEMES UNDER REVIEW, 2013 Comprehensive review under way Retroactive changes implemented (2010-13) Suspended Source: Bloomberg New Energy Finance 7

2010 13: CONSOLIDATION Source: Bloomberg New Energy Finance 8

NEX CLEAN ENERGY INDEX 2011 2014 YTD 200 180 160 140 120 100 80 NEX NASDAQ S&P 500 60 40 20 0 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Note: Values as of 08 October 2014; NASDAQ and S&P 500 rebased to 100 on 01 Jan 2011 Source: Bloomberg New Energy Finance 23/12/2014 9

5 JANUARY 2014 CBS/CNBC CLEANTECH CRASH Credit: CNBC / CBS Michael Liebreich Oxford, 28 November 2014 @MLiebreich 10

NEX CLEAN ENERGY INDEX 2014 YTD 200 180 160 140 120 100 NEX NASDAQ S&P 500 80 60 40 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Note: Values as of 19 November 2014; NASDAQ and S&P 500 rebased to 100 on 01 Jan 2013 Source: Bloomberg New Energy Finance 23/12/2014 11

PV EXPERIENCE CURVE 1976-2013 (2013 $/W) 100 Cost per W (2013 $) 10 1976 1985 SOLAR PV MODULE COSTS HAVE FALLEN 99% SINCE 1976 2003 2006 1 2012 2013 Q3 2013 2012 0.1 1 10 100 1,000 10,000 100,000 1,000,000 experience curve Chinese c-si module prices (BNEF) First Solar thin-film module cost historic prices (Maycock) Thin-film experience curve Cumulative capacity (MW) Note: Prices inflation indexed to US PPI. Source: Paul Maycock, First Solar, Bloomberg New Energy Finance 12

AVERAGE LEVELISED COST OF ONSHORE WIND 1984-2013 (EUR/MWH) 500 WIND POWER COSTS HAVE FALLEN 26% SINCE 2009 1984 100 50 1990 2000 2004 2013 10 100 1,000 10,000 100,000 1,000,000 Note: Learning curve (blue) is least square regression: R 2 =0.88 and 14% learning rate. CAPEX, OPEX and capacity factor evolution is included in this LCOE analysis; financing assumptions kept constant. MW Source: Bloomberg New Energy Finance, ExTool 13

DRIVERS OF REDUCED ASSET INVESTMENT 2011-13 $251.5 bn -20% -4.7% $ 191.7bn Investment 2011 Price impact Volume impact Investment 2013 Note: Based on a high level calculation of global figures for all renewable energy sectors. Impacts of regional and sector shifts are internalised here. Source: Bloomberg New Energy Finance 14

LEVELISED COST OF ELECTRICITY H1 2014 ($/MWH) Marine - wave Marine - tidal STEG - LFR STEG - parabolic trough STEG - tower & heliostat Wind - offshore PV - thin film PV - c-si PV - c-si tracking Biomass - anaerobic digestion Biomass - gasification Biomass - incineration Municipal solid waste Geothermal - binary plant Wind - onshore Small hydro Large hydro Landfill gas Geothermal - flash plant Natural gas CCGT Coal fired CHP Nuclear PV projects as low as $80/MWh Onshore wind as low as $37/ MWh 0 100 200 300 400 500 1037 844 Q2 2013 central H1 2014 central Fossil technologies: US China Europe Australia Note: LCOEs for coal and CCGTs in Europe and Australia assume a carbon price of $20/t. No carbon prices are assumed for China and the US. Source: Bloomberg New Energy Finance 15

NEX CLEAN ENERGY INDEX 2013 2014 YTD 200 150 100 NEX S&P 500 Oil & Gas S&P 500 Utilities Stowe Global Coal 50 0 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Note: Values as of 21 November 2014; Stowe and S&P 500 rebased to 100 on 01 Jan 2013 Source: Bloomberg New Energy Finance 23/12/2014 16

US WIND PPA PRICES BY SIGNING DATE H1 2008 H2 2013 ($/MWH) 100 80 60 40 20 0 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 PJM MISO Mountain West NEPOOL NYISO SPP 250 MW Note: Does not include PPAs under 5MW. PPA price is calculated as the average offtake price over the period of project operation. For projects reporting to FERC, the PPA price is calculated as the average selling price over the operating history of the project. For projects not reporting to FERC, the PPA price represents the year1 selling price. Source: Bloomberg New Energy Finance, FERC 17

US SOLAR PPA PRICES BY SIGNING DATE H1 2008 H2 2013 ($/MWH) 250 200 150 100 50 0 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 AZ CA CO NM NV NY TX 250 MW Note: Does not include PPAs under 5MW. PPA price is calculated as the average offtake price over the period of project operation. For projects reporting to FERC, the PPA price is calculated as the average selling price over the operating history of the project. For projects not reporting to FERC, the PPA price represents the year1 selling price. Source: Bloomberg New Energy Finance, FERC 18

CUMULATIVE FUNDS CLOSED BY SELECTED THIRD-PARTY FINANCIERS, JAN 2009-MAR 2014 ($M) 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Solar City Sunrun SunPower Clean Power Finance SunEdison Vivint Sungevity Note: This represents fund size; actual capital invested is lower and non-public. This figure may not include all non-public deals. Does not include all third-party financiers. Each fund contains an unknown combination of equity, tax equity or debt (or an absence of tax equity or debt). *The $300m Clean Power Finance fund raised on 3 May 2012 does not contain tax equity Source: Bloomberg New Energy Finance 19

US AGE OF GAS UPDATE 1: VOLUME SHALE GAS PRODUCTION BY FIELD, (BCFD) 40 35 30 25 20 15 10 5 0 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Marcellus Eagle Ford Rest of US 'shale' Haynesville Fayetteville Barnett Woodford Bakken Antrim Source: EIA, Bloomberg New Energy Finance 20

US AGE OF GAS UPDATE 1: VOLUME SHALE GAS PRODUCTION BY FIELD, (BCFD) 40 35 30 25 20 15 10 5 0 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12 Jan 14 Rest of US 'shale' Haynesville Fayetteville Barnett Woodford Bakken Antrim Source: EIA, Bloomberg New Energy Finance 21

US CRUDE OIL (M BARRELS / DAY) IMPORTS PRODUCTION 16 14 12 10 8 6 4 2 0-56% since 2004 2004 2006 2008 2010 2012 2014 16 14 12 10 8 6 4 2 0 + 44% since 2004 2004 2006 2008 2010 2012 2014 Source: EIA; Bloomberg New Energy Finance 22

US CAR USE AND FUEL EFFICIENCY FUEL EFFICIENCY (MILES/GALLON) ANNUAL VEHICLE-DISTANCE TRAVELLED (1,000 MILES PER PERSON) 22.0 21.5 21.0 20.5 20.0 19.5 19.0 +9.7% since 2004 18.5 2004 2006 2008 2010 2012 9.4 9.2 9.0 8.8 8.6 8.4 8.2-8.9% since 2004 8.0 2004 2006 2008 2010 2012 Note: Mpg figures are sales weighted average. Total vehicle miles grew at 2.7% CAGR between 1971 and 2007 Source: US DOT, University of Michigan Transportation Research Institute, Bloomberg New Energy Finance 23

CHINA S AIR QUALITY PROBLEM (PM2.5 µg per cubic meter) 993 Beijing 12 Jan 2013 World Health Organisation Guideline Picture credit: Feng Li/Getty Images 25 24

CHINESE PREMIER DECLARES WAR ON POLLUTION We will resolutely declare war against pollution as we declared war against poverty Li Keqiang Premier of the People's Republic of China March 2014 Credit: Bloomberg 25

CHINA POWER GENERATION CAPACITY ADD BY TECHNOLOGY, 2004-13, 2020 & 2030 GW 120 100 80 60 40 20 0-20 -40 2013 Renewable energy 68% of new capacity Historic Forecast 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2020 2030 Biomass & waste Solar Wind Hydro Nuclear Oil Gas Coal Note: 2020 & 2030 forecasts from BNEF Global Renewable Energy Outlook 2014. Source: Bloomberg New Energy Finance, China Electricity Council 26

CHINA POWER GENERATION CAPACITY ADD BY TECHNOLOGY, 2004-13, 2020 & 2030 GW 120 100 80 60 40 20 0-20 -40 2013 Renewable energy 68% of new capacity Historic Forecast 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2020 2030 Biomass & waste Solar Wind Hydro Nuclear Oil Gas Coal Note: 2020 & 2030 forecasts from BNEF Global Renewable Energy Outlook 2014. Source: Bloomberg New Energy Finance, China Electricity Council 27

ENERGIEWENDE 2: INVESTMENT IN RENEWABLE POWER GENERATING CAPACITY, ($ BN) Cumulative capex spent 2004 14 $166 billion 33.2 29.4 21.1 22.4 Other 7 8.7 8.8 12.2 13.5 9.8 Wind Solar 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note: Investment figures includes asset finance and small distributed capacity investment. Biofuels and other non-power generation sectors excluded. Source: Bloomberg New Energy Finance. 28

ENERGIEWENDE 1: CHANGES IN GENERATING MIX (TWH) 700 600 500 400 300 Q1 2014: Renewable energy provided 28% of German electricity Thermal Other renewables Biomass- & liquids PV 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Wind Hydro Source: Bloomberg New Energy Finance, BMWI 29

ENERGIEWENDE 2000 30 (TWH) 700 600 500 400 300 200 100 Nuclear Renewables Fossil 0 2000 2005 2010 2015 2020 2025 2030 Source: Bloomberg New Energy Finance, Destatis 30

ENERGIEWENDE 4: IMPACT ON RETAIL PRICES US FIXED LINE VS. MOBILE PRICES ($/MIN) GERMAN FIT VS. RESIDENTIAL POWER PRICES (EUR/MWH) 0.6 0.6 0.5 0.4 Mobile 0.5 0.4 Feed-in tariff <10kW 0.3 0.3 0.2 0.1 Land line 0.2 0.1 Res. power price 0.0 1993 2000 2007 0 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Source: Bloomberg New Energy Finance, Bloomberg L.P., BSW Solar, Eurostat, Federal Communications Commission 31

ENERGIEWENDE 4: IMPACT ON RETAIL PRICES US FIXED LINE VS. MOBILE PRICES ($/MIN) GERMAN FIT VS. RESIDENTIAL POWER PRICES (EUR/MWH) 0.6 0.6 0.5 0.4 Mobile 0.5 0.4 Feed-in tariff <10kW 0.3 0.3 0.2 0.1 Land line 0.2 0.1 Res. power price 0.0 1993 2000 2007 0 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Source: Bloomberg New Energy Finance, Bloomberg L.P., BSW Solar, Eurostat, Federal Communications Commission 32

ENERGY EFFICIENCY LED LIGHT BULBS Picture Credit: Philips 33

AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, 2005 22 TWh 300 AUD trillion 1.5 270 1.4 240 GDP 1.2 210 180 Historical 1.1 0.9 150 0.8 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 34

AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, 2005 22 TWh 300 AUD trillion 1.5 270 240 GDP 2010 1.4 1.2 210 180 Historical 1.1 0.9 150 0.8 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 35

AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, 2005 22 TWh 300 AUD trillion 1.5 270 240 GDP 2010 1.4 1.2 210 180 Historical 1.1 0.9 150 0.8 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 36

AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, 2005 22 TWh 300 AUD trillion 1.5 270 1.4 240 GDP 2010 2011 1.2 210 180 Historical 1.1 0.9 150 0.8 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 37

AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, 2005 22 TWh 300 AUD trillion 1.5 270 1.4 240 GDP 2010 2011 1.2 210 180 Historical 1.1 0.9 150 0.8 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 38

AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, 2005 22 TWh 300 AUD trillion 1.5 270 1.4 2010 2011 240 GDP 2012 1.2 210 Historical 1.1 180 0.9 150 0.8 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 39

AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, 2005 22 TWh 300 AUD trillion 1.5 270 1.4 2010 2011 240 GDP 2012 1.2 210 Historical 1.1 180 0.9 150 0.8 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 40

AUSTRALIA NATIONAL ELECTRICITY MARKET ACTUAL VS FORECAST ELECTRICITY DEMAND, 2005 22 TWh 300 AUD trillion 1.5 270 240 210 180 GDP Historical 1.4 2010 2011 1.2 2012 2013 1.1 0.9 150 0.8 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Australian Energy Market Operator, Reserve Bank of Australia, Bloomberg New Energy Finance 41

PUBLIC MARKETS OPEN FOR BUSINESS Source: Tesla 42

GLOBAL ANNUAL EV SALES 2011 & 2013 78,000,000 85,000,000 (4% CAGR) EVs 715,000 1,650,000 Hybrids (52% CAGR) 52,000 206,000 (99% CAGR) Total 2011 2013 Note: Numbers are rounded. Source: Bloomberg New Energy Finance 43

LITHIUM-ION BATTERY EXPERIENCE CURVE ($/KWH) 10,000 EV LI-ION BATTERYPACK PRICES HAVE FALLEN 43% SINCE 2010 1,000 1995 2010 H1 2013 H1 2014 2020 100 2000 2005 2030 10 100 1,000 10,000 100,000 1,000,000 10,000,000 Consumer LiB experience curve Historic consumer LiB prices BNEF EV LiB cost forecast Historic EV battery pack prices Cumulative prod. capacity (MWh) Note: Battery pack prices in 2010 dollars. Source: Battery University, MIIT, IIT, Bloomberg New Energy Finance 44

LITHIUM-ION BATTERY EXPERIENCE CURVE ($/KWH) 10,000 EV LI-ION BATTERYPACK PRICES HAVE FALLEN 43% SINCE 2010 1,000 1995 2010 H1 2013 H1 2014 2020 100 Cost-competitiveness (by total cost of ownership) 2000 2005 Tesla's Gigafactory 2030 10 100 1,000 10,000 100,000 1,000,000 10,000,000 Consumer LiB experience curve Historic consumer LiB prices BNEF EV LiB cost forecast Historic EV battery pack prices Cumulative prod. capacity (MWh) Note: Battery pack prices in 2010 dollars. Source: Battery University, MIIT, IIT, Bloomberg New Energy Finance 45

NEW INVESTMENT IN CLEAN ENERGY Q1 2004-Q3 2014 ($BN) 13.3 12.2 9.3 9.0 10.6 20.6 27.2 23.4 20.721.7 15.5 37.2 28.2 35.2 37.8 52.0 36.0 51.9 46.0 44.4 30.4 50.4 50.4 47.5 45.2 56.2 58.7 69.2 57.1 77.9 73.8 64.9 52.7 69.2 58.0 61.9 42.1 59.4 55.4 54.9 48.9 65.2 55.0 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Four quarter running average Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D, and spending for digital energy and energy storage projects (reported in annual statistics only). Source: Bloomberg New Energy Finance 46

RENEWABLE ENERGY NEW BUILD INSTALLATIONS 2001-13 (GW) 120 100 80 60 Reasons for drop 2012 2013: 80% - price reductions 20% - volume reductions 54.0 63.8 80.8 88.1 82.2 40 20 10.8 12.0 13.5 16.0 18.1 24.9 31.2 41.5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note: Excludes large-scale hydro Source: Bloomberg New Energy Finance 47

CLEAN ENERGY NEW BUILD INSTALLATIONS 2001-13 (GW) 120 100 80 60 2013-2015 Installations forecast to grow 37% 54.0 63.8 80.8 88.1 82.2 112.4 102.9 40 20 10.8 12.0 13.5 16.0 18.1 24.9 31.2 41.5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Bloomberg New Energy Finance 48

GLOBAL POWER GENERATION CAPACITY ADDITIONS 2010 30 (GW) FOSSIL FUEL AND NUCLEAR RENEWABLES Forecast Nuclear Forecast 264 Marine 106 87 78 64 52 39 Oil Gas Coal 60 83 107 155 196 Solar Wind Biomass & waste Geotherm. 2010 2013 2015 2020 2025 2030 2010 2013 2015 2020 2025 2030 Source: Bloomberg New Energy Finance 49

DIVESTMENT MOVEMENT Source: GoFossilFree.org 50

DIVESTMENT MOVEMENT IN PERSPECTIVE Total size of divested portfolios (to September 2014) - $50 billion Total free float of 106 NEX constituents (September 2014) - $350 billion Global market cap of quoted oil and gas companies - $5 trillion Oil & Gas Coal Source: Bloomberg New Energy Finance; Arabella Advisors; GoFossilFree.org 51

FINANCIAL INNOVATION New owners Yield Cos Peer-to- Peer Solar bonds Forex hedging ESCO finance Prepaid solar Blended finance Green Bonds Source: Bloomberg New Energy Finance 52

THE ORACLE OF CLEAN ENERGY We ve poured billions and billions and billions of dollars [into renewables]. And we re going to keep doing that as far as the eye can see. Warren Buffett CEO Berkshire Hathaway Picture: Bloomberg 53

GREEN BONDS WILL RAISE AS MUCH MONEY IN 2014 AS FROM 1995 2013 Green bonds raised, 2004 2014 ($bn) $39.4 $17.5 (est) $14.3 $0.2 $1.4 $1.8 $0.5 $0.9 $6.8 $3.7 $5.9 $21.9 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Note: full-year estimate as of 22 July Source: Bloomberg New Energy Finance 54

CLIMATESCOPE COUNTRY COVERAGE 2012-13 AND 2014-15 10 Asian countries, including 25 states/ provinces in India & China 26 Latin American & Caribbean nations 19 sub- Saharan Africa nations Nations studied for 2012-13 Climatescope Nations added for 2014-15 55

POWER CAPACITY & GROWTH, CLIMATESCOPE VS OECD (CUM. CAPACITY, GW, ANNUAL % CHANGE) 3,500 12% 3,000 10% 2,500 2,000 1,500 1,000 8% 6% 4% 500 2% 0 2008 2009 2010 2011 2012 2013 Climatescope OECD Climatescope % OECD % 0% Source: Climatescope 56

CLIMATESCOPE VS. OECD CLEAN ENERGY INSTALLED CAPACITY (GW) AND GROWTH (%), 2008-13 500 25% 450 400 20% 350 300 15% 250 200 10% 150 100 5% 50 0 2008 2009 2010 2011 2012 2013 Climatescope OECD Climatescope % OECD % 0% Note: Large hydro not included in this definition of clean energy Source: Climatescope 2014 57

INDUSTRIAL POWER PRICES 2013, CLIMATESCOPE COUNTRIES ($/MWH) Source: Climatescope 2014 58

RETAIL POWER PRICES, AFRICA, SOLAR VS KEROSENE ($/WEEK) Kerosene $4 per week Solar PV $1 per week Note: Illustrative figures for cost of 2 lamps plus mobile phone charging, Kenya, 2012 Picture Credit: SolarSister 59

NEW CLEAN ENERGY POLICIES COMING INTO FORCE BY YEAR OF ESTABLISHMENT, CLIMATESCOPE NATIONS Source: Climatescope 2014 60

ENERGY SUBSIDIES COMPARED (2012) Fossil Fuels $544 bn (consumer subsidies only) + $88 bn producer subsidies (G20 only) + $83 bn defence (Gulf only) + Impact on health, economic volatility + Climate Clean energy ~$100 bn Source: Bloomberg New Energy Finance; IEA; ODI; Rand Corporation 61

PHASE CHANGE Phase Change (n): A change in a feature of a physical system that results in a discrete transition of that system to another state. Source: Wikipedia Commons; The Free Dictionary 62

GERMAN HOURLY GENERATION PROFILE (GW) JULY 2012 JULY 2033 100 80 60 40 20 0-20 -40 100 80 60 40 20 0-20 -40 Source: Bloomberg New Energy Finance 63

SMALL SOLAR SYSTEM PRICES IN GERMANY AND CALIFORNIA TOTAL SYSTEM COST ($/W) CALIFORNIA PREMIUM TO GERMANY 10 8 6 Average California residential 127% 111% 103% 78% 4 2 Average sub- 10kW German 0 Q1 2007 Q1 2009 Q1 2011 Q1 2013 22% 29% 51% 2007 2008 2009 2010 2011 2012 2013 Source: Bloomberg New Energy Finance, BSW Solar, California Solar Initiative 64

NEXT WAVE OF PHASE-CHANGING TECHNOLOGIES? FLEXIBLE GAS PEAKERS q Efficiency of CCGT q Rapid ramp up & load following q Within emission limits q Enables more intermittent generation ABB Hybrid HVDC Circuit Breaker q Mechanical/solid state hybrid q Interrupts 1GW high voltage in 5ms q 100-year-old problem q Enables Internet of HVDC USB 3.1 q 100W power via USB cable q No more power cables q Power TVs, lights, printers, from your PC q Enables low-v homes CFCL MICRO-CHP FUEL CELL q Heat and power from natural gas q Combined 85% efficiency q Silent, resilient q Enables urban DG Source: GE, ABB, USB 3.1 Group; BlueGen / Ceramic Fuel Cells Michael Liebreich Oxford, 28 November 2014 @MLiebreich 65

PHASE CHANGE NEWSPAPER REVENUE ($M) 1997 Invention of the smartphone 2006 Founding of Twitter Total US newspaper ad revenue ($m) 60,000 50,000 40,000 1982 Invention of the Internet 1992 Invention of the browser 30,000 20,000 10,000 24 years 0 1950 1957 1964 1971 1978 1985 1992 1999 2006 Source: Bloomberg L.P. Bloomberg New Energy Finance 66

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