vilnius 6 june 2016 - eurelectric · vilnius 6 june 2016 michael liebreich eurelectricannual...

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EURELECTRIC ANNUALCONFERENCE

Michael LiebreichChairman of the AdvisoryBoardTwitter: @mliebreich

Vilnius6 June 2016

1Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016

$62bn$88bn

$128bn

$175bn$206bn $207bn

$274bn

$318bn$297bn

$272bn

$316bn$329bn

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$146/bbl

Note: Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energystorage projects (not reported in quarterly statistics). Excludes large hydro.

Source: Bloomberg Intelligence, Bloomberg New EnergyFinance

CLEAN ENERGY INVESTMENT ROSE WHILE OILPLUMMETEDGLOBAL CLEAN ENERGY INVESTMENT VS WTI CRUDE SPOT 2004-15

$48/bbl

Recordinvestment

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2Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016Source: UNEP, Bloomberg New Energy Finance

INVESTMENT IN POWER CAPACITY, 2008–15($BN)

Renewablesex largehydro

Fossil fuel

Nuclear

Large hydro

0

50

100

150

200

250

300

2008 2009 2010 2011 2012 2013 2014 2015

3Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016Note: New investment volume adjusts for re-invested equity. Total values include estimates for undisclosed deals. Source: Bloomberg New Energy FInance

RENEWABLE ENERGY INVESTMENT, 2004–15 BYREGION ($BN NOMINAL)

5.611.9

29.133.2

35.5

23.9

34.7

49.140.6

35.337.0

44.1

'04'05'06'07'08'09'10'11'12'13'14'15

United States

0.83.15.211.411.8

7.97.210.27.74.48.07.1

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Brazil1.73.33.75.06.15.5

12.09.310.112.0

13.312.8

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

AMER (excl. US &Brazil)

24.833.3

46.9

66.881.882.7

113.4122.9

89.0

60.062.0

48.8

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Europe

7.39.010.012.413.613.919.3

23.830.2

44.448.8

47.6

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

ASOC (excl. China& India)

3.08.311.2

16.725.6

38.839.6

47.461.7

62.087.8

102.9

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

China

2.73.04.96.75.64.38.8

12.87.86.68.3

10.2

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

India

0.60.81.11.82.31.64.13.010.29.37.9

12.5

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Middle East & Africa

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4Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016Source: Bloomberg New Energy Finance

NEW INVESTMENT – SELECTED EUROPEANCOUNTRIESQ1 2004-Q4 2015 ($BN)

Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D, and spending for digitalenergy and energy storage projects (reported in annual statistics only). Excludes investment in nuclear.

2004 2015

ItalyITALY

$0bn

$20bn

$40bn

2004 2015

SpainSPAIN

2004 2015

GermanyGERMANY

2004 2015

FranceFRANCE

2004 2015

UKUK


2016 UNSUBSIDISED CLEAN ENERGYWORLD RECORDS

Source: Bloomberg New Energy Finance; ImagesSiemens; Wikimedia Commons

ONSHORE WIND SOLAR PV

Location:Bidder:Signed:Construction:Price:

MoroccoEnel Green PowerJanuary 20162018US$ 3.0 c/kWh


PeruEnel Green PowerFebruary 20162017US$ 4.8 c/kWh

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Coahuila, MexicoEnel Green PowerMarch 20162018US$ 3.6 c/kWh








DubaiMasdar ConsortiumMay 20162019US$ 2.99 c/kWh

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0.1

1

10

100

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

2003

1976

1985

2008

Cumulative capacity (MW)

Current2015price

WIND AND SOLAR EXPERIENCE CURVES

Note: Pricing data has been inflation corrected to 2014. We assume the debt ratioof 70%, cost of debt (bps to LIBOR) of 175, cost of equity of 8%

Source: Bloomberg New Energy Finance

Note: Prices are in real (2015) USD. ‘Current price’ is $0.61/W

Source: Bloomberg New Energy Finance, Maycock

ONSHORE WIND LEVELISED COST ($/MWh) SOLAR PV MODULE COST ($/W)

Learning rate24.3%

MODULE COSTSHAVE FALLEN

99% SINCE 197680% SINCE 2008

y = 3,582.42x-0.30

R² = 0.91

16

32

64

128

256

512

1,024

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

1985

20252014

Learning rate =19%R² = 0.91

Thailand

Brazil

Germany

US

H1 2015

19992009

1,024

512

256

128

64

32

100 1,000 10,000

16

100,000 1,000,000

Learning rate 19%

1985

1999

2009

20142025

H2 2015

Learning rate19%

WIND COSTSHAVE FALLEN

50% SINCE 2009


0.1%

0.2%

0.4%

0.8%

1.6%

3.1%

6.3%

12.5%

25.0%

2000 2002 2004 2006 2008 2010 2012 2014

RENEWABLES SHARE OF GENERATION, 2000–15(% OF SYSTEM TOTAL)

Note: Y-axes are logarithmic with base 2 Source: Bloomberg New Energy Finance, BP, UNEP

WIND

Fourdoublings

SOLAR

0.0%

0.0%

0.0%

0.0%

0.1%

0.2%

0.4%

0.8%

1.6%

3.1%

6.3%

12.5%

25.0%

2000 2002 2004 2006 2008 2010 2012 2014

Sevendoublings

0.05%

0.03%

0.01% 15 years 15 years

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PRICE IMPACT OF SWITCH FROM FIT TO AUCTIONS,SELECTED COUNTRIES (NORMALISED)

0

20

40

60

80

100

120

140

160

+3+2+10-1-2-30

20

40

60

80

100

120

140

160

+3+2+10-1-2-3

Solar PV(unit price normalised to 100 at date of first auction)

Onshore Wind(unit price normalised to 100 at date of first auction)

: non-tariff price signals

: tariffs

: auctions

KEY

EMEA

Other LatAmBrazil

India

South Africa

- 30% - 50% - 35% - 60%


Source: UK DECC, Bloomberg New EnergyFinance

BENCHMARK THERMAL COAL PRICES($/T REAL 2016$)

0

50

100

150

200

250

300

2008 2009 2010 2011 2012 2013 2014 2015 2016

ARANewcastle

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GLOBAL NATURAL GAS PRICES($/MMBTU REAL 2016$)

0

2

4

6

8

10

12

14

16

18

20

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

North East AsiaLNG

BAFA (Germanyborder price forRussian gas)

NBP (UK)

Henry Hub (US)


RESIDENTIAL ELECTRICITY PRICES BY COSTSEGMENT (€/MWH)

UK DENMARK GERMANY

SPAIN US (AVERAGE)

Note: Retail price refers to average residential power price in each region, Australian data excludesthe carbon price repealed in 2014

Source: Eurostat, EIA, AEMC, Bloomberg New Energy Finance

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 20150

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 20150

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 2015

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 20150

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 2015

AUSTRALIA

0

50

100

150

200

250

300

350

2009 2010 2011 2012 2013 2014 2015

050100150200250

Other

Network costs

Wholesale power

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POWER SYSTEM VALUE CHAIN

Extraction Generation Transmission Distribution Demand




Old world

$$$

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Old world

$$$

Age of plenty





Old world

$$$

$$$

Age of plenty

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Old world

$$$Age of plenty


ENERGY RETAIL BATTLEFIELD

HIVE homeheatingcontrols

Smartthermostats toreduce churn

Virtual mobileoperator – 80k

customers

Smart homepartnerships/investment

IHD and smartthermostatprogram

BEMS for DRand energyefficiency

Smart thermostatsand load

disaggregation

Integrated smart homes

Smart lighting/ home

automation

Smartthermostats and‘behavioural’ DR

Residentialenergystorage

HEM toolsand DR

Home energymanagement

Behaviouralengagement

Smart thermostats,home automation

Load disaggregation

Solar PV and energymonitoring

HEM tools

Smartthermostats

Smartthermostats

Connected home/ IoT

Loaddisaggregation

Heating controls

Homeautomation

HomeKit

1m connectedhome customers

Digital Lifeconnected

home service

Smart homeplatform (AT&T)

Nestacquisition

Smart homehubs

HEMSplatform

DR and retailservices

Energy supply andservices

Registered energysupplier

Homeautomation

Home automation

???

Bundled electricitytelecoms services

Bundled electricity,entertainment andhome automation

Bundled telecoms andenergy

Bundled telecoms,energy. Residential

energy storage.Bundled telecoms,electricity supply

beginning in 2016

Bundled insurance,telecoms and energy

Bundled telecoms,electricity and gas

New services New startups

New majorsNew elec-telcobundles

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20Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016Source: TEPCO

TEPCO RETAIL Suggested slide


276,000 orders276,000 orders$11.6 billion

iPhone 610 million phones

$3.5 billion

Star Wars Force Awakens1st Weekend box-office

$0.5 billion

– FIRST THREE DAYS

TESLA MODEL 3

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Tesla Model 3

BMW i3

VW e-Golf

Chevy Bolt

Nissan LeafImages: Tesla, BMW, VW, GM, Nissan

EV MASS MARKET$30,000 + 200 MILES RANGE


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

20

40

60

80

100

120

140

2015 2020 2025 2030 2035 2040

m vehicles sold per year % of new car sales

Note: forecast uses Gasoline and electricity prices from EIA’s 2015 Annual Energy Outlook ‘Low Oil Price’scenario (ranging from $50 to $65 per barrel between 2015 and 2025). High scenario assumes greater vehicleutilisation. Low scenario assumes $20 per barrel oil price Source: Bloomberg New Energy Finance

GLOBAL LIGHT DUTY VEHICLE AND EV ANNUAL SALES,2015–40 (M VEHICLES SOLD PER YEAR, %)

By 2040Up to 50%

of new carswill be EVs

Shared vehiclescenario

$20 oilscenario

0%10%20%30%40%50%60%70%80%90%100%

020406080100120140

2015 2020 2025 2030 2035 2040

ICE + HEV BEV PHEV EV % of new sales

m vehicles sold per year % of new car sales

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Other include: Belgium, Denmark, Italy, Sweden. Public and semi-public chargers only. China values assume 2 outlets forevery 1 charging pole reported by the China National Energy Administration. China 2015 number is an estimate as the officialnumbers have not yet been reported. Bloomberg New Energy Finance

SELECT COUNTRIES PUBLIC EV CHARGINGSTATIONS UPDATE, 2011-2015 (UNITS)

0

50,000

100,000

150,000

200,000

250,000

2011 2012 2013 2014 2015

Germany

France

Norway

UK

Other

Netherlands

Japan

US

China

29,170

102,685

142,341157,900

233,979


8,40010,000

38,000

2014 2015 2016 2017

Planned EVSE build out projects inFrance suggest that the number ofcharging stations will triple in justtwo years. More than EUR260mwill be required.

CHARGING STATION INVESTMENTS SET TOACCELERATE

5,451 5,410 5,410102 161

15,161

2014 2015 2016 2017 2018

RapidNormalEUR300m will be invested to

build 15,000 rapid EVchargers across Germany injust three years

FRANCE – EXPECTED ADDITIONS, 2017 GERMANY – EXPECTED ADDITIONS, 2018

5,553 5,571

20,571

Source: Bloomberg New Energy Finance, Avere

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Note: Includes hydro Source: BP Statistical Review of Energy,Bloomberg New Energy Finance

RENEWABLE ENERGY PROPORTION OF POWERGENERATION, 10 YEARS TO 2015 (%)

Canada76%

Canada76%

US13%US

13%

Brazil71%

Brazil71%

China22%

China22%

Japan11%

Japan11%

Australia16%

Australia16%

India6%

India6%

S. Africa2%

S. Africa2%

0% Lowest

50% Mid

100% Highest

9% 14%

US

61%67%

Canada

89%79%

Brazil

1% 3%

SouthAfrica

17% 18%

India

10%17%

Australia

10% 15%

Japan

16%25%

China

5%

26%UK

12%

36%

Germany16%

69%Denmark

21%

37%Spain

20%

40%Italy

12% 17%

France

Suggested slide (newdata from BP Stat

Review available 8 June)


MANAGING INTERMITTENCYTHE BIG CHALLENGE – THE BIG OPPORTUNITY

II. CONTINUOUSBALANCING

III. CONTROLLINGFREQUENCY

I. PLANNING FOREXTREMES

Demand

Variable supply

Years to Months Days to minutes Seconds to minutes


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BALANCING THE GRID

Coal-fired generation

Incu

mbe

ntte

chno

logi

es

Gas-fired generation

Nuclear

Reservoir hydro

Pumped hydro

Interconnectors

Renewable generation

Demand response

New

tech

nolo

gies Electrochemical storage

Thermal storage

Mechanical storage

Chemical

Months to yearsahead

Minutes to daysahead

2016 Seconds tominutes after



Coal-fired generation

Incu

mbe

ntte

chno

logi

es

Gas-fired generation

Nuclear

Reservoir hydro

Pumped hydro

Interconnection

Renewable generation

Software solutions

New

tech

nolo

gies Electrochemical storage

Thermal storage

Mechanical storage

Chemical storage

Seconds tominutes after

BALANCING THE GRID

Months to yearsahead

Minutes to daysahead

2016Future


Power to gas

Interconnectors

Newheating/cooling

solutionsH2

HVDCsupergrid

Amonia

Flywheels

CompressedairBiomass

/biogas

ElectricvehiclesElectricvehicles

DemandresponseDemandresponse

“Gridchain”

GravitysystemsBiofuel

BatteriesBatteriesFlowbatteries

Flowbatteries

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POTENTIAL GRIDCHAIN APPLICATIONS

TRANSMISSION

MINIGRID

SMART DISTRIBUTION& COMMUNITY STORAGE

SMART HOMESANDBUILDINGS

SMART DISTRIBUTION

NETWORK EDGE

Carbon market with fraud-proofdistributed registry

Community minigrid buys & sellspower, settles all payments, no

central controller

EV chargingpaymentssettlement

Home energymanagement with

no centralcontroller

Transmission networksettles all payments

peer-to-peer

Carbon taxcollected directlyfrom appliances

Distribution grid balancessupply and demand with no

central controller


I'm not sure whetherthe optimists or thepessimists are right,but I do know this: it isthe optimists who willget something done.

CRAIG VENTER

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Unique analysis, tools and data for decision-makersdriving change in the energy system

[email protected]

MARKETSRenewable EnergyEnergy Smart TechnologiesAdvanced TransportGasCarbon and RECs

SERVICESAmericas ServiceAsia Pacific ServiceEMEA ServiceApplied ResearchEvents and Workshops

Michael LiebreichTwitter: @MLiebreich

Thanks!

vilnius 6 june 2016 - eurelectric · vilnius 6 june 2016 michael liebreich eurelectricannual...

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