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Energy Partnerships
Market Drivers&
Future Opportunities
Energy HuntsvilleThe Energy Summit 2016
PRESENTED BY:BOB COCHRAN
CTG, LLC
Events Defining The Energy Sector
ØTrump FactorØClimate Change & Greenhouse
GasesØFukushima
ØFinds & FrackingØCyber
Today’s Defining Events Trump Factor • Not Business as Usual
• Shift to Private Sector Initiatives/Development• Challenge to Clean Power Plan & Paris Climate Agreement
Climate Change •Will Continue to Define Energy Generation• Opportunity to Innovate – Onsite vs. Central Generation• Driving:
•Carbon Free & Renewable Generation Technology•Enhanced Energy Conservation Programs & Systems
Fukushima • Redefine the Nuclear Renaissance – Accelerated Reactor Shutdown• Enhanced the already Impeccable Safety Envelope• Stalled Deployment of Improved Reactor Technology & Efficient Fuels Manufacturing Technology (SWU Glut)
Finds & Fracking • Pivot to combined cycle generation (GAS – Frack Baby Frack))• Economics Headwinds for:
• Economic Challenge for Carbon Free & Renewable Generation Technology• Coal Non-‐Competitive
Cyber • Cyber-‐Blitz• Generation & Grid Attack•Micro-‐grids
Catalyst Factors & Reactions(Environmental/Production Disruptions/Political)
Ø Demand responseØ Energy efficienciesØ Reduce consumption
Ø Supply responseØ New sourcesØ Alternatives (renewables, natural gas, nuclear)
Ø Technology responseØ Electric vehiclesØ Hybrid technologies/Generation & Transportation
Ø Political responseØ CAFÉ Ø Clean Power Plan/Clean Air ActØ Paris Agreement
The More Things Change the More They Stay the Same
Trump Factor ?
Primary Power Generation SourcesTrajectory Through 2030
Ø Coal continues to Decline – No CPP ?
Ø Gas will Dominate No Matter What
Ø Oil will Maintain in Transportation
Ø Renewables will Escalate as a % -‐CPP/Paris?
Ø N.A. Nuclear Slight Decline – Rest of the World Strong Growth
Oil Stays Lower For The Long RunDrill Baby Drill
Ø Oil Markets Experienced Similar Drop in 1986:Ø OPEC vs. North SeaØ 1986 Drop (63% in 8
Months) & Today's Drop Similar
Ø Adjusted for Inflation Prices Did not Return to Peak for appox. 20 Yrs.
Ø Expect Low Prices to Extend for Several Years
Source M Mohataren , chief economist GM
Natural Gas & LNG Market Conditions
Ø Supply Exceeds Demand (min. next 5-‐7 Years)
Ø Growth in Demand Unyielding (combined cycle & Japan Post Fukushima)
Ø Over abundance of Projects in N.A. – Some Will Fail
Ø Creditable Construction & Financing Terms Will Determine Outcomes:Ø Concession AgreementsØ Execute On-‐Time & CostØ Innovative Technology
Notable Forecasts of Renewable Energy Percent of US Power Generation
ØMust Find Economic Sweet Spot
ØNeed to Improve Reliability or Hybrid Solution
ØScale/Scale/ScaleØRegulatory & Federal Financial Support
Electricity DemandEfficiencies, GDP & Renewables
ØStrong Potential for On-‐site GenerationØCombined CycleØHybrid Systems (renewables/gas/SMR’s)
ØMicro-‐GridsØReliable Central Power Systems (Nuclear/Combined Cycle/Clean Coal?)
Where Are The Business Opportunities?
Ø Service SectorØ Outage Support – All SystemsØ New Siting & PermittingØ Financial & Regulatory EngineeringØ Carbon Trading (CPP)Ø Micro-‐Grid: Management, Servicing & SecurityØ System Optimization
Ø Development, Engineering & ConstructionØ New Systems – Partner with OEM’s & Financial InstitutionsØ Generation UpgradesØ TransmissionØ Deactivate & DecommissionØ Environmental Remediation
Ø New Technology & OEM (Bring Your Purse) Ø SMR’sØ Renewable TechnologyØ TransmissionØ Cyber
Leveraging Capital MarketsØ Development Phase:
Ø Governments (Trump Factor), venture capital, private equity and other investments fund early project development, prototyping and initial production
Ø Create appropriate concession and engineering, construction and commissioning termsØ OEM investments risky for the investors, but capital at this phase is crucial for getting
successful ideas off the groundØ Exit strategy – monetize the investment
Ø Access to Capital Markets for Technology/Projects: Ø Early work is successful and the technology/project is proven and commercializedØ Create customer terms and development agreements – bankable long-‐term concessions,
government agreements are subject to budget & authorization constraints Ø Successful Technology/OEM’s: launch initial public offering (IPO) or issue bonds Ø Capital markets facilitate: scale up operations, expand its production facilities, or more project
development
Ø Trump Factor?Ø More Public/Private Project PartnershipsØ Innovative Financial Models
Thank You&
Questions
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