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● 10/06/2016
● 1
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
$40bn
2004 2015
SpainSPAIN
2004 2015
GermanyGERMANY
2004 2015
FranceFRANCE
2004 2015
UKUK
5Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
2016 UNSUBSIDISED CLEAN ENERGYWORLD RECORDS
Source: Bloomberg New Energy Finance; ImagesSiemens; Wikimedia Commons
ONSHORE WIND SOLAR PV
Location:Bidder:Signed:Construction:Price:
MoroccoEnel Green PowerJanuary 20162018US$ 3.0 c/kWh
Location:Bidder:Signed:Construction:Price:
PeruEnel Green PowerFebruary 20162017US$ 4.8 c/kWh
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6Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
Location:Bidder:Signed:Construction:Price:
Coahuila, MexicoEnel Green PowerMarch 20162018US$ 3.6 c/kWh
7Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
Location:Bidder:Signed:Construction:Price:
DubaiMasdar ConsortiumMay 20162019US$ 2.99 c/kWh
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8Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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 ($/W)
Learning rate24.3%
MODULE COSTSHAVE FALLEN
99% SINCE 197680% SINCE 2008
y = 3,582.42x-0.30
R² = 0.91
16
32
64
128
256
512
1,024
100 1,000 10,000 100,000 1,000,000
1985
20252014
Learning rate =19%R² = 0.91
Thailand
Brazil
Germany
US
H1 2015
19992009
1,024
512
256
128
64
32
100 1,000 10,000
16
100,000 1,000,000
Learning rate 19%
1985
1999
2009
20142025
H2 2015
Learning rate19%
WIND COSTSHAVE FALLEN
50% SINCE 2009
9Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
0.1%
0.2%
0.4%
0.8%
1.6%
3.1%
6.3%
12.5%
25.0%
2000 2002 2004 2006 2008 2010 2012 2014
RENEWABLES SHARE OF GENERATION, 2000–15(% OF SYSTEM TOTAL)
Note: Y-axes are logarithmic with base 2 Source: Bloomberg New Energy Finance, BP, UNEP
WIND
Fourdoublings
SOLAR
0.0%
0.0%
0.0%
0.0%
0.1%
0.2%
0.4%
0.8%
1.6%
3.1%
6.3%
12.5%
25.0%
2000 2002 2004 2006 2008 2010 2012 2014
Sevendoublings
0.05%
0.03%
0.01% 15 years 15 years
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10Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016Source: Bloomberg New Energy Finance
PRICE IMPACT OF SWITCH FROM FIT TO AUCTIONS,SELECTED COUNTRIES (NORMALISED)
0
20
40
60
80
100
120
140
160
+3+2+10-1-2-30
20
40
60
80
100
120
140
160
+3+2+10-1-2-3
Solar PV(unit price normalised to 100 at date of first auction)
Onshore Wind(unit price normalised to 100 at date of first auction)
: non-tariff price signals
: tariffs
: auctions
KEY
EMEA
Other LatAmBrazil
India
South Africa
- 30% - 50% - 35% - 60%
11Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
Source: UK DECC, Bloomberg New EnergyFinance
BENCHMARK THERMAL COAL PRICES($/T REAL 2016$)
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 2013 2014 2015 2016
ARANewcastle
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12Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016Source: Bloomberg New Energy Finance
GLOBAL NATURAL GAS PRICES($/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)
13Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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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14Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
POWER SYSTEM VALUE CHAIN
Extraction Generation Transmission Distribution Demand
15Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
POWER SYSTEM VALUE CHAIN
Extraction Generation Transmission Distribution Demand
Old world
$$$
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16Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
POWER SYSTEM VALUE CHAIN
Extraction Generation Transmission Distribution Demand
Extraction Generation Transmission Distribution Demand
Old world
$$$
Age of plenty
17Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
POWER SYSTEM VALUE CHAIN
Extraction Generation Transmission Distribution Demand
Extraction Generation Transmission Distribution Demand
Old world
$$$
$$$
Age of plenty
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18Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
POWER SYSTEM VALUE CHAIN
Extraction Generation Transmission Distribution Demand
Extraction Generation Transmission Distribution Demand
Old world
$$$Age of plenty
19Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
21Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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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22Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
23Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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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24Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
25Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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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26Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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)
27Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
Source: Bloomberg New Energy Finance
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28Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
Source: Bloomberg New Energy Finance
29Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
Source: Bloomberg New Energy Finance
Power to gas
Interconnectors
Newheating/cooling
solutionsH2
HVDCsupergrid
Amonia
Flywheels
CompressedairBiomass
/biogas
ElectricvehiclesElectricvehicles
DemandresponseDemandresponse
“Gridchain”
GravitysystemsBiofuel
BatteriesBatteriesFlowbatteries
Flowbatteries
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30Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
31Michael Liebreich @MLiebreichEurelectric Annual Conference, 6 June 2016
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
sales.bnef@bloomberg.net
MARKETSRenewable EnergyEnergy Smart TechnologiesAdvanced TransportGasCarbon and RECs
SERVICESAmericas ServiceAsia Pacific ServiceEMEA ServiceApplied ResearchEvents and Workshops
Michael LiebreichTwitter: @MLiebreich
Thanks!
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