trends in renewable energy and...

Trends in renewable energy and storageEnergy and Mines World Congress, 2017

Rachel Jiang

November 27, 2017

1 November 27, 2017

Key trends

Solar, wind may make up one-third of global electricity generation by 2040 –and a growing share of generation capacity will be customer-sited

Cost of wind, solar, and batteries are expected to fall further

New renewables are becoming competitive against even existing fossil units in some countries

2 November 27, 2017

Key trends




3 November 27, 2017

Source: Bloomberg New Energy Finance Note: “Renewable share” includes biomass, geothermal, and hydropower, in addition to solar and wind.

0%

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2012 2016 2020 2025 2030 2035 2040

TWhOtherSolar thermalSmall-scale PVUtility-scale PVOffshore windOnshore windBiomassGeothermalHydroNuclearOilGasCoalRenewables share

Solar and wind may provide 34% of global electricity generation by 2040

4 November 27, 2017

Source: Bloomberg New Energy Finance

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2012 2016 2020 2025 2030 2035 2040

GWOther flexible capacityDemand responseUtility-scale batteriesSmall-scale batteriesOtherSolar thermalSmall-scale PVUtility-scale PVOffshore windOnshore windBiomassGeothermalHydroNuclearOilGasCoal

Solar and wind may provide half of installed capacity by 2040

5 November 27, 2017

Source: Bloomberg New Energy Finance

Wind, solar growth trend expected to hold across many large countries

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Wind, solar share of generation (%)

Canada

Chile

USA

Brazil

Australia

China

India

Germany

6 November 27, 2017

Source: Bloomberg New Energy Finance. Note: Decentralization ratio is the sum of behind-the-meter solar, behind-the-meter batteries, and demand response capacity, divided by total installed capacity.

The future of electricity is decentralized, especially in AustraliaDecentralization ratio = distributed resources / total capacity installed

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Decentralization ratio (%)

Canada

Chile

USA

Brazil

Australia

China

India

Germany

7 November 27, 2017

Key trends




8 November 27, 2017

Source: Maycock, Bloomberg New Energy Finance Note: Dollars are U.S. dollars.

Solar technology is getting cheaper, faster

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100

1 10 100 1,000 10,000 100,000 1,000,000

historic prices (Maycock) Chinese c-Si module prices (BNEF)

1976

2003

1985

2008

Cumulative capacity

2015

2017(est)

2016 ($/W)

NEO 2016 26.5% learning

rateNEO 2017

28% learning rate

Solar PV module prices

9 November 27, 2017

Source: Bloomberg New Energy Finance. Note: Dollars are U.S. dollars.

Onshore wind is getting cheaper

Wind turbine prices

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0.75

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1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$million/MW (nominal)

Global

10 November 27, 2017

Solar PV Onshore wind Offshore wind

World record unsubsidized clean energy prices, 2017

Country: United Arab EmiratesBidder: Marubeni and JinkoSolarSigned: 2017Construction: 2019Price: US$ 2.42 cents/KWh

Country: MoroccoBidder: Enel Green PowerSigned: 2016Construction: 2018Price: US$ 3.0 cents/KWh

Country: GermanyBidder: DONG/EnBWSigned: 2016Construction: 2024Price: US$ 4.9 cents/KWh

Source: Bloomberg New Energy Finance; Images Siemens, Wikimedia Commons, Masdar.


Source: Bloomberg New Energy Finance, survey participants. Note: This represents pack prices (ie, cells plus packs).

Lithium-ion battery pack prices forecasted to shrink to to $73/kWh by 2030

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BNEFobservedvalues

19% learningrate

BNEF observed values: annual lithium-ion battery price index2010-16.

2030 average lithium-ion battery price: $73/kWh

2025 average lithium-ionbattery price: $109/kWh

Dollars per kilowatt-hour

Lithium-ion battery pack price forecast(real 2017$)


Cheaper batteries will drive greater deployment – and metals demand

Source: Bloomberg New Energy Finance, press releases, Avicenne, USGS, IDTechEX, Wealthdaily Note: CE refers to consumer electronics, E-bus refers to electric buses

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Cobalt market (metric ton/year)

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Demand Storage

Demand CE

Demand E-Bus

Demand EV

Historic supply

Future supply


Key trends





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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

For grid-connected mines, a fall in fuel prices boosts opportunity cost of using on- and off-grid renewables

Source: Bloomberg New Energy Finance Note: SRMC stands for “short-run marginal cost.”

Power price; marginal cost, US$/MWh

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PJM West Hub On-peak Power price

SRMC assumingTetco M3 Gas price

SRMC assuming BigSandy (Central App)Coal price


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$100$110$120$130$140$150$160$170$180$190$200

- 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200

Sources: Bloomberg New Energy Finance, EIA Notes: Gas CC is combined cycle; gas OC is open cycle

Wholesale markets: The merit order effect

Marginal cost, US$/MWh

Capacity, GW

CoalGas CC

CoalOilGas OCGas CCBiogasBiomassLarge hydroSmall hydroNuclearSolar PV utilitySolar PV rooftopWind onshore

Gas OC$70/MWh

PJM, April 2016: Hypothetical merit order at US$6/MMBtu Henry Hub


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$100$110$120$130$140$150$160$170$180$190$200

- 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200

Sources: Bloomberg New Energy Finance, EIA Notes: Gas CC is combined cycle; gas OC is open cycle

Marginal cost, US$/MWh

Capacity, GW

CoalGas CC

CoalOilGas OCGas CCBiogasBiomassLarge hydroSmall hydroNuclearSolar PV utilitySolar PV rooftopWind onshore

Gas OC$30/MWh

Wholesale markets: The merit order effect

PJM, April 2016: Hypothetical merit order at US$1.9/MMBtu Henry Hub


Source: Bloomberg New Energy Finance. Note: Dollars are U.S. dollars. Equipment size assumptions - diesel generator of 8kW, lithium-ion battery of 16.32kWh, PV of 5kW (DC). CAPEX assumptions - diesel generator of $500/kW, PV of $872/kW (India) and $932/kW (Nigeria and Kenya), lithium-ion battery of $313/kWh (India) and $413/kWh (Nigeria and Kenya), hybrid system $6,000. Battery hybrid is diesel generator with lithium-ion battery. Solar hybrid is PV, diesel generator, and lithium-ion battery.

Analogy: Off-grid telecom towers

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Cost of electricity ($/kWh)

Diesel Generator

Battery+dieselhybridSolar+battery+dieselhybrid


Gas and coal price expectations

Coal price outlook

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$/MMBtu (2016 real)Europe China India Australia USA Canada

Gas price outlook


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USA

Cost of new renewable build v. cost of operating existing fossil plants

New wind, solar undercut existing coal, gas, by 2030

Utility-scale PV

Onshore wind

Gas CCGT

Coal

Utility-scale PV

Gas CCGT

CoalOnshore wind

New solar undercuts existing gas in 2027


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Cost of new renewable build v. cost of operating existing fossil plants

Solar LCOE falls 71% but only undercuts existing coal by 2040

Utility-scale PV

Onshore wind

Gas CCGT

Coal

Utility-scale PV

Gas CCGT

Coal

Onshore wind

Solar, wind LCOEs do not undercut operating costs for existing coal by 2040



Source: BNEF

Corporate clean energy procurement has taken off

Wind Geothermal Small hydro

Solar Biomass & waste Fuel cells

Global corporate PPA capacity (MW)by estimated signing year


Key trends




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