2010-11-08 - energy smart technologies.pdf

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Bloomberg New Energy Finance, 2004-2010

Food for Thought, Frankfurt

Energy Smart Technologies

2 November 2010

Albert Cheung


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2 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010

Copyright and disclaimer

This publication is the copyright of Bloomberg New Energy Finance. No portion of this document may bephotocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any waywithout prior consent of Bloomberg New Energy Finance.

The information contained in this publication is derived from carefully selected public sources we believe arereasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be construed tobe a representation of such a guarantee. Any opinions expressed reflect the current judgment of the author of therelevant article or features, and does not necessarily reflect the opinion of Bloomberg New Energy Finance. Theopinions presented are subject to change without notice. Bloomberg New Energy Finance accepts no responsibilityfor any liability arising from use of this document or its contents. Bloomberg New Energy Finance does not consideritself to undertake Regulated Activities as defined in Section 22 of the Financial Services and Markets Act 2000 andis not registered with the Financial Services Authority of the UK.


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Towards a smart energy system

Source: Bloomberg New Energy Finance

Bulk generation Grid-scale storage

Nuclear

Wind Coal

SolarNew energy mix

Gas

Other

renewables

Pumped

hydro

Flywheel Battery

Transmission grid

Local distribution grid Smart building and home

Interconnection

to super-grid

Micro-grid

Distributed

wind, solar,

CHP, other

Distributed

storage

+ -

Heat pumps &

district heating

Multi-way flows &

distributed resources

Plug-in

EV

Active demand

side

Smart

meter

Energy

management

system

Smart

HVAC

Smart

appliances

Smart EV

charging

On-site

storage

Micro-

generation

Compressedair

Smart grids

CCS

Transmission

substations

Transmission

substations

Distribution

substations

Smart transmissionSmart transmission

Smart

distribution


4/20


300+ smart grid projects worldwide

CANADA

Universal smart

metering in Ontario

USA

200 projects and pilots$4bn stimulus package

EUROPEAN UNION

80% smart metering

by 2020; Over 50projects and pilots

BRAZIL

Proposed universal

smart metering

mandate; large-scalepilots

CHINA

Strong Smart Grid with wide

area measurement systems

28m smart meters by 2010

SOUTH KOREA

Jeju Island pilot;

Nationwide smart grid

by 2030SINGAPORE

Smart metering

pilot 2011-12

AUSTRALIA

Smart metering in Victoria;

Newcastle Smart Grid,

Smart City project

UK

100% smart metering

by 2020; GBP 500m

for Low Carbon

Networks

JAPAN

Multiple pilots


5/205 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010

China, US and EU cumulative smart meter roll-outs(millions of smart meters)

Source: Bloomberg New Energy Finance Note: figures are the number of installed smart meters at the end of the year

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014 2015

US EU-15 China



US stimulus: Smart Grid Investment Grant spending to date($m)

Souece: DOE, Bloomberg New Energy Finance. Note: Data as at 15 October 2010.

-

20

40

60

80

100

120

140

160

180

200

0 10 20 30 40 50 60 70 80 90 100

Money outlaid as of 15 October Award values

Projects (by size of award)

Only12% of

total$3.4bn



EU-15 smart meter deployments and potential home energymanagement market, 2010-2016e

Source: Bloomberg New Energy Finance. Note: Based on national plans and announced smart meter deployments. Assumes an accelerated smart meter roll-out by 2016 in the UK.Low and high cases based on HEM penetration rates that lead to 24% and 45% penetration of HEM systems among AMI-enabled households by 2016 respectively.

Revenues are based on a basket of HEM items as in the US case, but with a greater emphasis on IHDs.

million meters EUR m

-

500

1,000

1,500

2,000

2,500

0

20

40

60

80

100

120

140

160

2010 2011 2012 2013 2014 2015 2016

Others

Finland

Denmark

Sweden

Portugal

Netherlands

Spain

United Kingdom

Italy

France

Germany

HEM market size - low case

HEM market size - high case



Home energy management: value chain and selected players

Communications

& componentsIn-home display

HEM software /

platform

Web or other

portals

Smart devices &

appliances



Illustrated partnerships between HEM vendors and AMI companies

Source: Bloomberg New Energy Finance. Note: Light blue companies are players in AMI, dark blue are HEM vendors. Gridpoint and Silver Spring are highlighted as they haverecently acquired energy management software companies. Partnerships are selected and non-exhaustive. Partnerships between AMI companies are not shown. Silver Spring

Networks is also partnered with Comverge, Cisco and Digi International. Microsoft Hohm is also partnered with Blue Line Innovations.

Itron

Energy-

Hub

Open-

PeakGE

Energy

Cisco

Comverge

Tendril

Landis+

Gyr

Elster

Current

Silver

Spring

Networks

GE

App liances

Digi

Inter-

national

Ember

Control4Gridpoint

Ecobee

EnerGate

Trilliant

Blue Line

Innovations

Onzo

Echelon

Honeywell

Google

Power-

Meter

AlertMeCurrent

Cost

TED

Microsoft

Hohm



Regulation changes everything

Verticallyintegrated

De-

regulated

De-regulated

De-regulated

Vertically integrated utilities

No competition Key hurdle is regulatory approval

Unbundled network and retail Network operator responsible for metering Retail open to competition

High levels of competition Retail suppliers responsible for smart meters Central communications provider

No clear policy 400 distribution networks Each responsible for its meters

Infrastructure focus

Regulator as proxy for consumer Cost recovery heavily regulated

Metering is regulated New services separated from meters Competition for cool technology

Competition drives metering costs down New services could come from utilities or from third parties

Uncertain outcome Roll-out could be chaotic

More

ope

n,lessregulated



US and UK smart metering business cases

US smart grid projects: benefits breakdowns Benefits of UK home smart metering, GBP bn

Source: DECC; Ofgem.Source: Sacramento Municipal Utility District; Pacific Gas and Electric Company;

Portland General Electric.

52% 46%60%

48%

40%

40%

14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

SMUD PG&E Portland GeneralElectric

Demand response Operational Meter reading0

2

4

6

8

10

12

14

16

Energy/carbon

savings

Loadshifting Meterreading Reducedinqu iries /

customeroverheads

Other Total



Baltimore Gas and Electric smart grid business case

Source: Baltimore Gas and Electric.

408

1801

204

661

61452

580

104

166641

194

0

500

1,000

1,500

2,000

2,500

3,000


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Demand response becoming entrenched in the US

DR growth in US organised markets (GW)DR penetration in PJM capacity market andclearing prices

Source: PJM Interconnection.Note: Numbers in brackets denote megawatts clearing the RPM base residual auction.

Clearing price for 2012/2013 would have been $178.78/MW-day without DR.Source: Bloomberg New Energy Finance analysis; ISO/RTO Council; respective

ISO/RTOs; FERC; other public sources.

(536MW)(893MW) (939MW)

(1,365MW)

(7,047MW)

(9,282MW)

0

20

40

60

80

100

120

140

160

180

200

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

DR penetration in RPM RPM clearing price

% DR penetration (bars) USD clearing price (line)

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2006 2007 2008 2009 2010e 2011e 2012e

Totalprojection -optimistic

Totalprojection -conservative

SPP

PJM

NYISO

MISO

ISO-NE

ERCOT

CAISO


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Emerging technologies for grid-scale energy storage (MW)

Source: Bloomberg New Energy Finance

116,918

400

3

61

365

4015 12

52,284

1,296

43

1,625

8230

1

10

100

1,000

10,000

100,000

1,000,000

Pumpedhydro

CAESFlywheels PbA NaS Ni-Cad Li-ion Flowbatteries

Planned / Inconstruction

Installed


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CAES32%

Battery:Li-ion

20%

Flowbatteries

17%

Flywheel15%

Battery:Unknown

12%

Battery:Sodium-ion

3%

Battery:Leadcarbon1%

Total = $185m

Industry has not yet picked a winning technology

US DOE Smart Grid Demonstration Grants

Power Storage

US DOE ARPA-E grants for storage(GRIDS programme)

Source: US Department of Energy, Bloomberg New Energy Finance Note: GRIDSstands for Grid-scale Rampable Intermittent Dispatchable StorageSource: US Department of Energy, Bloomberg New Energy Finance

Battery - flow31%

Flywheel16%

Battery - metalair

16%

SMES15%

Battery - zincmanganese

oxide11%

Fuel cell -regenerative

8%

CAES3%

Total = $27.7m


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Electric vehicles gathering momentum

Global announced EV productionUS forecast EV penetration(% of light vehicle sales)

Source: Bloomberg New Energy Finance.Source: Bloomberg New Energy Finance.

0%

5%

10%

15%

20%

25%

2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

BEV PHEV

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2010 2011 2012 2013

BEV PHEV

N fi i l i t t i EST i


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0.3

0.4

0.1

0.4

0.30.4

0.50.4

0.4

0.9

0.4

0.50.5

0.8

0.6

1.0

0.6

0.9

0.6

0.40.5

0.5

1.7

0.6

1.2

1.3

0.8

0.10.1

0.10.1

0.2

0.4

0.4

0.3

0.2

0.1

0.1

0.4

0.2

0.1

0.2

0.2

0.2

0.2

0.4

Q104

Q204

Q304

Q404

Q105

Q205

Q305

Q405

Q106

Q206

Q306

Q406

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Digital energy

Other energy smart technologies

Four-quarter running average

New financial investment in EST companiesQ1 2004 Q3 2010 ($bn)

Source: Bloomberg New Energy Finance. Note: Total values include estimates for undisclosed deals.Project investments are excluded here. Other energy smart technologies includes power storage, fuel cells, and energy efficiency in buildings, transportation and industry.


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M&A deals in digital energy H1 2003 to H2 2010 (to date)

Source: Bloomberg New Energy Finance. Note: H2 data as at 19 October 2010.

GE SNC-Lavalin ECSCisco Arch RockConstellation Energy - CPower

2010 H2M&Ahighlights:

Siemens Site ControlsPower-One Fat SpanielGE Opal Software

0

1

2

3

4

5

6

7

8

9

H12003

H22003

H12004

H22004

H12005

H22005

H12006

H22006

H12007

H22007

H12008

H22008

H12009

H22009

H12010

H22010

to dateM&A deals Yearly average

Q3

Q4

Bloomberg Leadership Forum Voting Result:


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Bloomberg Leadership Forum Voting Result:Which scenario is the most likely for the smart grid industry in 2020?

73%

16%

11%

0%

Today's incumbents dominate, afteracquisitions

Today's innovators leaders insegments

Today's innovators competitive inmultiple segments

Today's industry incumbentsdominate


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Energy Smart Technologies

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Albert [email protected]
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2010-11-08 - energy smart technologies.pdf

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