Upload
ning-wu
View
222
Download
0
Embed Size (px)
Citation preview
8/7/2019 Accenture_Barclays_Carbon_Capital
1/87
8/7/2019 Accenture_Barclays_Carbon_Capital
2/87
8/7/2019 Accenture_Barclays_Carbon_Capital
3/87
04 Carbon Capital
Financing the low carbon economy
ForewordClimate change is a critical global social and economic challenge. It is set to affect us all forgenerations to come. The transition to a low carbon economy which is essential if we aresuccessfully to meet this challenge will require signicant investment from both the publicand private sector. This report was commissioned by Barclays in order to help answer some of thequestions as to how this transition will be made.
Barclays is already an active participant in the low carbon economy. We are providing awide range of nancial and risk management solutions across our core business lines. We helprenewable energy rms access nancing from the capital markets and offer strategic advisoryservices across the sector. Barclays was also the rst major bank to establish a carbon trading desk.We are now leading intermediaries in the EU Emissions Trading Scheme and are transferringexpertise to newer emissions markets. Our Equity Research teams provide coverage of the Global
Clean Technology and Renewables sector to inform investor decision-making.We engaged Accenture to develop a comprehensive bottom-up model to estimate the growth of
low carbon technologies in Europe over the next decade. The research estimates a capital demandof 2.9trillion to nance the development and roll-out of new technology in ve key sectors.
Barclays, and the wider banking sector, will play a key role in mobilising this capital but thereare limits to what banks alone can accomplish. Uncertain policy frameworks and technologyrisk are increasing the difculty of investing in low carbon technology. We need clear andconsistent policy frameworks to help unlock the required ow of private capital.
This research also explores some new funding models that can be used to accelerate capitalows to the sector, particularly access to deep and liquid bond markets. These will requireeffective partnerships between banks, investors, project sponsors, rating agencies and publicsector actors to increase bond market nancing. There may also be a need to create instruments to
share risk so that initial transactions can help build a track record and build investor condence.We at Barclays remain committed to playing a leading role in tackling climate change andenabling the transition to a lower carbon economy. I hope you nd this research a helpfulcontribution to the debate on how we can address the climate change challenge in both Europeand globally.
MARCUS AGIUSBarclays Group Chairman
We need clear and consistent policyframeworks to help unlock therequired ow of private capital
8/7/2019 Accenture_Barclays_Carbon_Capital
4/87
Carbon Capital 05
The shift to a low carbon economy is leading to a remarkable development of sustainablelow carbon technologies which are transforming and reshaping core industry sectors andinfrastructures across our society.
We, Accenture, play an active role in developing and integrating low carbon technologiesin tomorrows society by working with industries, governments and non-governmentalorganizations to reduce the global energy footprint, and ultimately achieve energy security andclimate change mitigation. Our work on intelligent cities, smart buildings and smart grids areexamples of transformational initiatives we aim to implement on a global scale.
However, we recognize that the shift to a low carbon economy requires an unprecedented levelof capital investment. Through a distinctive modelling approach, this report provides uniqueinsights on the sources and volume of capital required to fund a range of commercially viable low
carbon technologies and quanties the impact these will have on energy cost and carbon savings.With an estimated 2.9trillion of capital required in Europe up to 2020 to fund low carbon
technologies, this report conrms that the private sector will play a crucial role in the provisionof capital. High level of sovereign debt and maturing technology now imply that private sectorcapital, primarily intermediated by banks, must be provided to accelerate the investments we needto meet our 2020 goals.
The nancial services industry and more particularly banks, are still facing multiple challengesin recovering from the nancial crisis. Financing low carbon technology represents a uniqueopportunity for banks to benet from the signicant growth of the low carbon technologysector whilst demonstrating a positive contribution in tackling climate change.
But this will require adaptation and innovation of core banking products and servicesto address the specic capital requirements, risk level and regulatory environment of low
carbon technologies.Having worked with banks for over two decades, I am condent that they have the capabilityto innovate and effectively intermediate the level of capital highlighted in this report; and youcan be condent that we will be working with industry leaders like Barclays to achieve this goal. Ihope that you enjoy reading this report and nd the analysis insightful.
PIERRE NANTERMEAccenture Chief Executive Ofcer
Financing low carbon technologyrepresents a unique opportunity forbanks to benet from the signicantgrowth of the low carbon technologysector whilst demonstrating a
positive contribution in tacklingclimate change
8/7/2019 Accenture_Barclays_Carbon_Capital
5/87
06 Carbon Capital
Financing the low carbon economy
AdvisersACCENTURE INTERNAL ADVISERS
Lloyd Altman Capital Markets Trading and Risk ManagementDorothy Armstrong Financial Services, StrategyMauricio Bermudez Neubauer Sustainability Services, Carbon MarketsEric Clement Capital Markets, Structured FinancePiercarlo Gera Financial Services, StrategySimon Giles Resources, Smart TechnologyRichard Hanks Resources, Smart MeteringJenny Hawes Resources, Smart GridSeb Hoyle Transport and Travel Services, Supply Chain
Frederick Jones Financial ServicesRichard Kho Resources, Clean EnergyJohn Rhoads Sustainability Services, Smart BuildingsMelissa Stark Resources, Clean TechnologiesRobert Stubbs Banking, ResearchAndy Tinlin Financial Services, StrategyJames Woodhouse Financial ServicesBarbara Wynne European Policy and Government RelationsSerge Younes Sustainability Services, Clean Energy
BARCLAYS INTERNAL ADVISERS
Lorraine Connell Director, Investment Banking Public Sector TeamAdam Darling Vice President, Barclays Natural Resource InvestmentsJames McKellar Managing Director, Power, Utilities and Infrastructure,
Head of Renewables, Barclays CapitalGareth Miller Director, Head of Renewables Project Finance,
Barclays CorporateTheodore Roosevelt IV Managing Director & Chairman of Barclays Capital
Cleantech InitiativeNick Salisbury Director, Barclays Corporate Real EstateAlastair Tyler Head of Strategic Asset Finance, Barclays Corporate
Disclaimer
This report has been prepared by Accenture (UK) Limited (Accenture) solely for the benet of Barclays Bank PLC (Barclays) for
the purposes stated in the report and shall not be used for any other purpose. This report was prepared by Accenture on instruction
from Barclays and on the basis of information provided by, or on behalf of, Barclays. Accenture has assumed all such information to be
complete and accurate and has not independently veried such information. Each recipient of this report is entirely responsible for the
consequences of any use of the report, including any actions taken or not taken by it, based on any part of the report.
If this report or any of its contents is disclosed to or received by any other person, whether with or without our consent, that other
person must appreciate that this report was prepared on the basis of instructions and information given to us, and cannot be relied
on by any third party, whose circumstances or requirements may be different. Accordingly, Accenture and Barclays accepts no liability
of any kind, whatsoever or howsoever caused, to any third party arising from reliance in any way on any part of this report.Barclays Bank PLC is authorised and regulated by the Financial Services Authority and is a member of the London Stock Exchange.
Barclays Bank PLC is registered in England No. 1026167, registered ofce: 1 Churchill Place, London E14 5HP.
8/7/2019 Accenture_Barclays_Carbon_Capital
6/87
Carbon Capital 07
Foreword 04
Executive summary 08
Introduction 11
The drivers of the low carbon economy
The growing capital requirement
I Sources of capital 17
II Approach 23
LCT applications and geographical scope
An advanced modelling approach based on an s-curve adoption method
III Capital requirements and carbon impact 30
Overall impact for Europe
Detailed LCT applications analysis
Delivering a Smart Grid in an Intelligent City SmartGridCity in Boulder, Colorado
IV Financing LCT development and procurement 48
Barriers to capital provision
Development capital
Procurement capital
The role of corporate and investment banking products and services
V Emerging nancing schemes to increase capital ows 58
Overall applications of nancing schemes to external capital needs
VI Recommendations 69
Policymakers
Corporate and investment banks
Conclusions
Appendix I Full list of initially considered LCT 72
Appendix II Capital, emissions and cost savings sizing model 73
Appendix III Financing streams for procurement capital model 74
Appendix IV Financing streams for development capital model 75
Appendix V Individual LCT models details and assumptions 76
Appendix VI Power mix forecasts methodology 85Appendix VII Bibliography 86
Glossary of terms 88
ContentsAccentuReAccenture is A global maagm olg, holog
v ad oog ompa, wh appoxmal211,000 popl vg l mo ha 120 o.combg paallld xp, omphvapabl ao all d ad b fo,ad xv ah o h wold mo flompa, A ollaboa wh l o hlp hmbom hgh-pfoma b ad govm.th ompa gad v of us$21.6bllo foh al a dd Ag 31, 2010. i hom pag www.a.om
ud Kgdom rgd of:1 Plaao Pla30 Fhh sLodoec3M 3BDegladtl: +44 (0) 20 7844 4000Fax: +44 (0) 20 7844 4444Fo mo fomao v: www.a.om/aabl
BARclAySBArcLAys is A majo global aal v povdgagd al bakg, d ad, opoa advm bakg ad walh maagm wh axv aoal p eop, h Ama,Afa ad Aa. Wh ov 300 a of ho ad xp bakg, Bala opa ov 50 o admplo al 147,000 popl. Bala mov, ld,v ad po mo fo 48 mllo om adl woldwd.
Fo fh fomao abo Bala, pla v owb www.bala.om
Sia Iig SrisBala ollaboag wh dpd xp obld ad dma kowldg o k global oal advomal . s: www.bala.om/aablW wlom o fdbak. emal: [email protected] o w o h add blow.
Bala PLc
1 chhll PlaLodoe14 5HP
th po wa pblhd Fba 2011.
8/7/2019 Accenture_Barclays_Carbon_Capital
7/87
08 Carbon Capital
Financing the low carbon economy
I his rr w sk :
Qaf h amo of apal dd o fd al
Lct h bldg, g ad apo o eop
o 2020 ad ld o globall p o 2020 fo
h g o ol.
Ma h o ad mo avg ha wll om
fom vg Lct.
idf vao ag am whh old poall
povd f apal o m dmad fo h holog.
Ol ppog ag hm ad m
ha mla mo apal povo.
Mak ommdao o bak ad polmak o how
h ala h povo of apal o h Lct o.
Fidigs
Ff ommall vabl Lct applao eop
w odd h po. th q 591bllo
dvlopm apal ad 2.3llo pom apal.
th wold lad o avg of 261b ad 2.2 G cO2.
rollg o h holog wold bg h eu mo
dow o 83 p of 1990 lvl b 2020. tak ogh
wh h abo avg xpd fom oh o,
h a mafag o hmal, h wold mak
h eu fa mo lkl o m ag of a 20 p
do mo.
scientists BrOADLy AGree ha f h wold o pv
vbl lma hag, lvl of gho ga mo
m b ablzd b 2015 ad dd h a ha
follow1. Movg o a low abo oom wll b al o
ahvg h do ad wll q pdd
lvl of vm low abo holog (Lct): a mh
a wo p of GDP2 aodg o om ma.
A p h o f vm o fd h
ao o a low abo oom, wh h gap bw
h apal dd ad ha avalabl wdg. if h abo
Executive summaryapal ham o addd, h eu wll b al dag of
mg mo ag. Wh h wold bal ovd
fom a v oom dow, pbl a ghg
ad ll al o o mo ag, mo of h
fdg fo h low abo oom xpd o om fom
h pva o.
How mh apal wll b qd o fd h dvlopm
ad pom of low abo holog? i addo,
how a bak dvlop ag hm o ppo h
povo of apal?
Phoovola ola pow h mo apal v wh
h Lct dd. th holog abo v m mo
xpv ha oho wd, fo xampl, ad podo
f ma blow 20 p o avag. i wll o
abo 365b o po boh lag-al fa
ad mo allao.
2.4llo wll b qd o a wabl g
(wd, ola, gohmal ad boma) eop (eu25),
cha, ida, usA, Japa, caada ad Aala o 2020. th
vm wll lad o a 6.6G cO2 do.
Arah
W ak a q appoah o qafg h apal
dd fo h low abo oom. Pa modl hav
b ppl dv, mag Lct apal qm
op dow bad o mo ag. B oa, o
modl alla h apal dd o a h
dvlopm ad ommalzao of Lct (dvlopm
apal) ad h amo dd o a h pom
of Lct a (pom apal). th dvd fom
a dmad-dv modl bad o al adopo a fo a
ag of Lct.
2.2trillion is estimated to be nancedby sources external to the entity
procuring or developing the LCT.
1 IPCC, Working GroupII Report Impacts,Adaptation andVulnerability, 2007
2 Accenture Analysis,based on capitalrequirementspresented in GIBCand new estimates
from Lord Sternre-evaluatingestimates presentedin Stern Review onthe Economics ofClimate Change,2006
8/7/2019 Accenture_Barclays_Carbon_Capital
8/87
Carbon Capital 09
nw srs f a
O of all h apal qd o fd Lct p o 2020,
2.2llo mad o b ad b o xal
o h pog o dvlopg h Lct. copoa ad
vm bak a mda hav a ga ol
moblzg h ag. Howv, holog k ad pol
a gal a vm k, makg
a ga fdg hallg. Bak wll d o wok wh
vo ad poj poo o df ovav olo
whh m vo d ad abl hm o dplo apal
o h pa. som mgg ag hm ld:
ulokg a o Lct a hogh apal mak
ad g bod.
Fag g-f ad mo-gao a
hogh la.
cag w vm vhl fo Lct a maagm.
ivg q Lct a ad dvlop.
Dvlopg advo v o mpov Lct o k
ad oppo am.
pimakrs shd:
Povd a log-m ad abl ommm o v
ha ppo h ommalzao of Lct.
Lvag pbl fdg o mla pva
o vm.
Dvlop adad fo a-bakd fdg
Lct a ad g bod.
Rmmdais
i h po w mak a mb of ommdao fo bak ad polmak o pd p h odo of ag fo h
low abo oom.
crra ad ivsm baks shd:
Dvlop h apabl o povd Lct
a-bakd .
s p ddad vm fd o gv vo
ag xpo o h Lct o.
ia pma q ad db obo
Lct a ad dvlop.
Povd db ag fo g-f ad
mo-gao a la.
Dvlop hal, glao, aal ad
ommal xp o ppo h k
am of Lct a ad dvlop.
8/7/2019 Accenture_Barclays_Carbon_Capital
9/87
8/7/2019 Accenture_Barclays_Carbon_Capital
10/87
Carbon Capital 11
IntroductionThis section examines:
Te die te l b em.
Te gig itl euiemet.
The drivers of the low carbon economy
Buildig (e.g. mt buildig).Eletiit ditibuti (e.g. mt gid).
Eletiit duti (e.g. eeble eeg).
Many facTors havE emeged i te t dede tt igligt te uget eed t deel l b d eeble
telg. L b telgie (LcT) e euimet d itutue tt eble eeg eie ltetie eeg
duti d ue, ledig t eduti b emii, dietl idietl. Te ull ge telg ideed i
ti tud i i aedix I d i tegized ll:
A number of factors bolster the demand for LCT:
cume d buiee e egizig te e ti.
Eeg euit i im e gemet.
LcT eeet tuit gt d jb eti.
cb emii mitigti i utig te emegee b eduti tget d b mket.
cb mket e ieig t eue b iteie idutie.
Telgil de d iti e led t igit t eieie.
DEManD for fossIL uel ed i deeled d
deelig utie i te t dede. cume, buiee
d idut e demdig me eeg, ete t e
e eletil lie mig t te mket tutmte buie ee. Te tk iee i demd
eletiit (10 e et e it ege betee 1999 d
20093 i EU15) mbied it iig eeg ie (te ie
eletiit ieed b 47 e et dmeti d 34 e et
idut betee 1999 d 2009 i EU154
) e elledeeg t eie u idiidul d te ged.
Consumers and businesses are recognizing the case for action
Tt eile (e.g. bi-uel eile).Tt itutue (e.g. e-eile gig tem).
Key players Drivers Impact Response
Eeg ul euit d emi gt
Eimetl tget d egulti
smt buildigoetil d eeg t eiecume d buiee
altetie ttti
reeble eeg
smt gid
Eeg eie euimetne telg demet d litiTelgdeele d ide
D
emadforLcTs
Gemet d limke
ThE DEManD for Low carBon TEchnoLoGIEs1
3 aetue ali,deied mEutt gue eeg umtii Eue
4 Eutt ege EU25 utie
8/7/2019 Accenture_Barclays_Carbon_Capital
11/87
12 Carbon Capital
Financing the low carbon economy
ELEcTrIcITy rETaIL prIcE In EUropE (EU15) BETwEEn 1999 anD 2009 (100% In 1999)2
1999 2001 20032000 2002 2004 2005 2006 2007 2008 2009
100%
80%
140%
147%
134%
120%
160%
2
Source:Eurostat
Dmeti ie
(mid-bd)
Idutil ie
(mid-bd)
5 IEa, deied mut eegble
6 Te reebleEeg L tepele reubli ci, febu2005
7 petu
Ld, Te Lcb citl, E&y,2009
8 seti 22, cuil EueUi peideclui, 12Deembe 2008
9 aul EueUi geeueg iet1990-2008 diet et2010, EueEimetlge, Jue 2010
10 cb edutitget t u e-egtiti: Idi,Deembe 2009
11 ci b
iteit tgetexlied, fiilTime, nembe2009
Carbon emissions mitigation is supporting theemergence of carbon reduction targets and of carbon markets
DEspITE ThE aBsEncE glbl geemet b
eduti, m gemet e mmitted t ggeie
tget i lie it te Kt ptl d cege
geemet. Te EU et tget tkig emii d
t 20 e et 1990 leel8, it me membe utie
tiig me mbitiu tget: te UK t 34 e
et eduti, Gem 40 e et d fe 30 e et
med it 1990 leel9
. Glbll, umbe utiee l mmitted t edue te b iteit tei
em b 2020 it Idi ledgig 20-25 e et 10 d
ci ledgig 40-45 e et11 eduti i b emii
co2e/GDp med it 2005 leel.
T iee tee tget, gemet e begu t
tx b iteie idutie d tiitie dietl (e.g.
UK cb reduti cmmitmet, sede cb Tx,
fe ETx). Emii tdig eme bugt i
b gemet eek t ut ie b. Te mt
miet eme i te Eue Ui Emii Tdigseme (EU ETs). Lued i 2005, te EU ETs te
ld t etil b emii mket.
Energy security is a primary concern for governments
In 2007, chIna imted 47 e et it ude il, te Us
imted 35 e et d te EU 94 e et5. T edue
deede eig imt, gemet e deeled
ge ietie d egulti t timulte demd
eeble d LcT. ne liie emize iee i te ue
eeble eeg t edue elie eeg imt.
oe li exmle i tt feed-i-Ti (fIT) i
till gutee lg-tem emium ie t le eletiit
ed. fIT e bee itdued i mt mj Eue
emie, iludig Gem, fe, UK, Itl d si. ci,
i etblied fIT i it reeble Eeg L i 2005, i
e eel te utie imlemetig te ti glbll6.
ote eme e utilitie t deie dditil eletiit m
eeble ue, iludig reeble Eeg cetite
(rEc) i te Us reeble obligti cetite
(roc) i te UK.
LCT represents an opportunity for growth and job creation
In aDDITIon To deeig elie eig eeg ue,
gemet e uig te titi t gee em
tuit emi gt, e.g. Ld ed b
mitigti tiitie e etimted t delie 14,000 g jb e
um d 600m e um g lue-dded tuitie7.
adigl, me gemet e ided il ietie (Gee
fud tx-bed ietie eme i te neteld, L cb
netk fud i te UK) t die ietmet i te LcT et.
8/7/2019 Accenture_Barclays_Carbon_Capital
12/87
Carbon Capital 13
carBon rEGULaTIons sUch te EU ETs e ed
mie t be te t tei b emii. wile
me lll tded et u utilitie ill be ble t
te ext t mlig it egulti t ume
tug eletiit bill exmle, eeg iteie et
duig glbll tded gd u metl, emet d
emil, ill ee te eet tiget b egulti
tei ble eet d ime ttemet.
Emissions levels will be a liability and any emissions
allowances an asset, and the difference between the two will
determine the net impact on company accounts12.
cmie eed b egulti ill me tei itel
btemet t t te mket ie emii emit
te b mket (ximtel 15 duig augut
201013 te EU ETs). Te d te mut edit
llted ee ill delie i time, exdig te t libilit
d eduig tbilit, diig demd le b
eti d teee LcT.
Carbon regulations are generating growing cost pressures
12 seizig teotuitie ite L-cbEm, aetue,2010
13 EcX EUa futuectt: hitiDt 2010, Eueclimte Exge,2010
14 TEchpoLdtbe, Euecmmii wldEeg Telgoutlk, 2050
15 DoE slid-stteligtig cLIpErpgm summ
reult, DoE,febu 2009
16 Eedt eduti dtbe
ThE rEvEnUE IncrEasE rEqUIrED for UTILITIEs To MaInTaIn aconsTanT rETUrn on capITaL facTorInG In ThE cosT of carBon EMIssIons
Cost of direct carbon emissions assumed(US$/tonne)
Rev
enueincreaseneededto
mainta
inindustryreturnoncapital
Technological advances and innovation have led to significant uptake
rEcEnT aDvancEMEnTs anD deelmet i
lete e eulted i edued uemet d
etig t. sl pv t e Mw-it
deeed b me t 30 e et betee 2000
d 201014 d imill, te t Ligt Emittig
Dide (LED) i exeted t d igitl due
t demet i mteil iee15. Te t
mi-chp, bidieel eile, d te LcT l
ded ubttill. Ti t-eduti ted i
exeted t tiue telg mtue, mkig
LcT me dble d eible t idutie
d ed utme.
Te gig elee LcT led t gt
i ut eie u egieeig, etig d
mitee. Ti i tu led t d teeeed te
iti leig ue d led utie t dt te
telg t te te. Gem e id e
ti eletiit duti 6.3 e et
i 2009, ile i Demk it 18.6 e et16. Ti
me it mu le leel i 2000.
0 10 30 5020 40 600%
5%
10%
15%
20%
25%
3
Source:GS SUSTAIN, GlobalInvestment Research,Goldman Sachs
8/7/2019 Accenture_Barclays_Carbon_Capital
13/87
14 Carbon Capital
Financing the low carbon economy
LcT InfrasTrUcTUrE anD euimet ted t be
itl iteie, euiig igit itl exeditue
ut. Te ege t buildig id m i
Eue 140m21, 1.7m e Mw-it22 betee
2004-2009. Imlemetig mt gid (ugdig te
eletiit ditibuti etk tug dmi mitig
d tl) i it e milli ueld i etimted
t t but 2.6b23 (iludig ubtti utmti
d ditibuted tge). fudig ti itutue ill
euie igit ietmet m utilitie, ll utitie
te et.
f idiidul, itig t LcT i l e tl.
T mut 2kw l el uld t
ximtel 11,35124, igit utl
mt ueld.
neetele, it me ele dtig LcT deite te
ig t, te mut itl ieted ed t ed
ig $42b i Eue i 2008 (figue 5). Deite te glbl
eei, te mut itl gig it LcT uemet
itl ell b l e e et i 2009 med t 2008,
uggetig tt te etite LcT euimet d
itutue i t dimiied b emi le.
procUrEMEnT of LcT euimet d itutue euie ieig lume itl.
2004 20042006 20062008 20082005 20052007 20072009 2009
$5$10
$10
$20
$15
$30
$40
$20 $50
$ $
In$Bn
DEvELopMEnT capITaL ($Bn) In EUropE BETwEEn 2004 anD2009, By fInancInG sTrEaM EUropE (EU25) onLy
4
In$Bn
capITaL raIsED To fUnD assETs ($Bn) In EUropE BETwEEn2004 anD 2009 By fInancInG sTrEaM EUropE (EU25) onLy
5
Source:
Bloomberg NewEnergy Finance
Bond and other
Project debt
Balance sheet
Convertible and other
Secondary & PIPE
IPO
PE expansion capital
VC late stage
VC early stage
4
5
ThE aMoUnT of itl ilble deelig LcT
ie l, et emi uleble t te glbl
emi le. a te LcT et g, demd el
tge itl t ud LcT deele i ig. I 2009, $5.64b17
ieted glbll i lete etue itl it te
mjit te telg lied ltetie eeg
eeg eie18.
a igit it i etue itl ietmet td
lete i ude.
I te Us i 2002, lete eeeted le t e
e et etue itl ietmet med it
etimted 25 e et te d 15 e et bite17. I 2009, lete etue itl ietmet
eed te me leel bite t 20 e et, ed
as DEManD for LcT ie, te eed itl t deel d del te telg.
te t but 17 e et17. Ti ted i eetil
t tiitig te exeted utue demd i lte-tge
deelmet itl te lete et.
hee, ti ig tem i igl ltile d ie
elti t iet dee d te glbl emi
utlk. I 2009, LcT ietmet i deelmet itl
ded b 49 e et19 te glbl eei tk ld,
ile uemet itl emied t imil leel t 2008.
wit me LcT mie eig te lte deelmet
tge, demd lte- d gt-tge ite d ubli
euit ie l. LcT iitil ubli eig (Ipo)
ttlled etimted $6.5b it 24 tkig le ud teld betee Jul 2009 d Jue 201020, u 360 e et
te me eid i 2008/09 (figue 4).
17 slig clete:cti,Iti dImetie te2010, cleteGu, ail 2010
18 se deied mte miti te cTIUs Idex
19 Blmbeg neEeg fie
20 Blmbeg neEeg fie,deied mttidtbe
21 Blmbeg neEeg fie,deied mttidtbe
22 Blmbeg neEeg fie,deied mttidtbe
23 aetue smtGid seie, deiedm mt gid
met ieetimte24 Glbl reeble
Demd fet2010-2014E, Blcitl Euitree, augut2010, deied m/w t ided
The growing capital requirement
8/7/2019 Accenture_Barclays_Carbon_Capital
14/87
8/7/2019 Accenture_Barclays_Carbon_Capital
15/87
Exteralprocreet
capital
Tis sectio exaies te scope for capital reired for bot te deelopet of te LCT idstry ad procreet
of LCT eipet.
Key messages:
Capital associated wit acig te operatios (R&D,
prodctio ad coercializatio) of copaies
deelopig LCT is deed as deelopet capital.
Capital associated wit acig LCT asset procreet
as bee deed as procreet capital.
Tis distictio is essetial, as bot streas will eed
to be stilated differetly to create arket spply ad
dead for LCT eipet ad ifrastrctre.
Aerage trasactio sizes ioled i deelopet capital
icldig IPOs, bridge acig, ezzaie acig,
jior debt ad seior debt are lower ta tose i oter
sectors, creatig dead for bespoke acial prodcts
ad serices.
Carbon Capital 17
Idiidal ad istittioal iestors
Exteraldeelopet
capital
Iteral deelopet capital Iteral procreet capital
Proiders ad deelopers ByersLCT eipet
LCT ifrastrctre
Stilate ad spportLCT arket dead
Stilate ad spportLCT arket spply
PrimaryInvestments
SecondaryInvestments
PrimaryInvestments
SecondaryInvestments
PrimaryInvestments
PrimaryInvestments
Corporate ad iestet baks
Exaples iclde: idiidal iestors,
pesio fds, israce fds
DEvELOPmEnT CAPITAL IS ecessary to drie ioatio,
prodct eaceet ad operatioal efciecy i LCT.
I geeral, deelopet capital oly attracts iterest
fro corporate ad iestet baks we copaiesreac growt stage, i.e. coercializig prodcts for
te aistrea arket. Earlier acig streas rely o
etre capital ad priate eity iestet priarily
fro dedicated copaies (exaples iclde Carbo Trst
vetres, Eerald Tecologies, SET vetres, ad oters).
We reiew te ai sorces of exteral deelopet capitalalog wit key acial caracteristics of LCT trasactios
i Figre 7.
Development capital
ISources of capital
I tis report, LCT acig is segeted betwee
Deelopet capital ad Procreet capital. Deelopet
capital icldes baks proidig eity ad debt, for
exaple to a copay wose prodcts or serices are
core to te LCT ale cai. Procreet capital refers
to acig te prcase ad istallatio of LCT assets.
Bot streas address differet etities ad are cosidered
distict for te prpose of tis stdy (Figre 6).
Bot streas will eed to be stilated ad spported
differetly to create spply ad dead for LCT.
SOuRCES OF DEvELOPmEnT AnD PROCuREmEnT CAPITAL6
8/7/2019 Accenture_Barclays_Carbon_Capital
16/87
DEvELOPmEnT CAPITAL TRAnSACTIOnS7
18 Carbon Capital
Financing the low carbon economy
Eamples o transactions include25:
(Frace, vetre Capital): margeriaz Eergie, Frace-based
operator of biogas power plats as raised 1.5 i a
Series A fdig rod.
(neterlads, IPO): Sesata Tecologies, aker of sesor
ad cotrols for alteratie fel eicles ad solar paels,
raised $569 fro its nYSE IPO.
(uited Kigdo, Secodary offerig): Reewable
Eergy Geeratio Ltd raised 43 trog te placeet
of ew sares.
(Spai, Corporate debt): Spais Pv afactrer Silike
as siged a loa wort 31 wit a sydicate of 10 baks.
Ranges and averages of transactions segments were adjusted and derived from frequency and value of transactions, provided on BloombergNew Energy Finance. Ranges and averages values were adjusted based on interviews with subject matter experts at Barclays and Accenture.
DEVELOPMENTSTAGE
COMPANYCONCEPTION
PRODUCTPROTOTYPE
PRODUCTDEMONSTRATION
PRODUCTCOMMERCIALIZATION
OPERATIONSGROWTH
mezzaie debt
n/A
Corporate Bridge Fiace
$1-10Ag. 2004-2010 $7
Discoeryad R&D grats
$1-50
Ag. 2004-2010 $33
Garateed loas,atc fdig
$45-115 (g. loa)
Ag. 2004-2010 $74
Tax credits,Deostratig projects grats
n/A
Early Stage vetre Capital
$0.6-20Ag. 2004-2010 $9
Seed Capital/Agel
$0-2.3Ag. 2004-2010 $2
$1-65Ag. 2004-2010 $22
Late Stagevetre Capital
$1-125(IPO) Ag. 2004 -2010
$84
IPO,byot
fINANCINGSTREAMS(ExTERNALONLY)
Trasactios ale size i scope for corporate
ad iestet baks prodcts ad serices
Increasing eternal nance
DEVELOPMENTSTAGE
OPERATIONSGROWTH
ORGANIC ANDExTERNAL GROWTH
LONG-TERM INVESTMENT IN OPERATIONS,R&D, INfRASTRUCTURE & ACQUISITIONS
Additioal Secodary
n/A
Corporate/Seior Debt
$1-250Ag. 2004-2010 $210
Secodaries & PIPE
$1-100Ag. 2004-2010 $39
Coertible /Jior Debt
$1-150Ag. 2004-2010 $111
fINANCINGSTREAMS(ExTERNALONLY)
Trasactios ale size i scope for corporate ad iestet baks prodcts ad serices
Increasing eternal nance
25 Blooberg newEergy Fiace
8/7/2019 Accenture_Barclays_Carbon_Capital
17/87
Carbon Capital 19
Procurement capital
ThE vALuE OF trasactios i LCT procreet rage
fro sall idiidal iestets to large project ace.
Idiidal applicatios sc as alteratie eicles, oseold
Pv paels ad sart eters reire sall aots of
procreet capital copared wit large reewables
ifrastrctre projects. howeer, sall-scale LCT ca be rolled
ot i large oles, eiter by serice proiders or eipet
afactrers. Exaples iclde Britis Gas itrodcig two
illio sart eters betwee 2010 ad 2012 i te uK26,
ad TnT plaig te roll-ot of 200 electric freigt
eicles27. ultiately, te aailable fds of te byer relatie
to te size of te iestet eeded will drie te dead
for exteral capital.
Te ai sorces of exteral procreet capital
are reiewed alog wit key acial caracteristics of
trasactios as tey relate to te LCT sector i Figre 828.
Asset lease Sort-ter asset ledig (bridge)
Rage: $1-115Ag. 2004-2010 $101
Rage: $10-120Ag. 2004-2010 $66
Project ace
Rage: $70-400+Ag. 2004-2010 $175
Bods
Rage: $80-400+Ag. 2004-2010 $169
Asset ace ter loa
Rage: $1-200Ag. 2004-2010 $85
fINANCINGSTREAMS(ExTERNALONLY)
ASSETPROCuREmEnTCATEGORIES
LOW vOLumE OFInDIvIDuAL LCT EquIPmEnT
PROCuREmEnT
LARGE vOLumE OFInDIvIDuAL LCT EquIPmEnT
PROCuREmEnT
SmALL-SCALE LCTInFRASTRuCTuRE
LARGE-SCALE LCTInFRASTRuCTuRE
Eamples o transactions include29:
(Portgal, Asset Fiace): noeergia II ad
Fotopares Gest secred 32.55 i asset acig
for te 5.3mW Pv plat located i Fete Alao.
(uited Kigdo, Project Fiace): Dog Eergyas secred 250 i project ace to reace
te 630mW Pase I Lodo Array Offsore
Wid Far.
(Greece, Bods): Accioa as secred 43 i bod
acig fro Alpa Bak for te deelopet of te48.45mW Paacaiko Wid Far.
Ranges and averages of transactions segments were adjusted and derived from frequency and value of transactions, provided on BloombergNew Energy Finance. Ranges and averages values were adjusted based on interviews with subject matter experts at Barclays and Accenture.
Increasing average capital required or LCT procurement
Trasactios ale size i scope for corporate
ad iestet baks prodcts ad serices
26 Britis Gas plastwo illio sarteters i Britisoes by 2012,Cetrica, marc 2010
27 Te Big OragesGree Reoltio,TnT, Deceber 2006
28 Trasactios alesad exaplesretrieed fro
Blooberg newEergy Fiace
29 Blooberg newEergy Fiace
The value chain capital requirements
IT IS ImPORTAnT to recogize tat deelopet capital willeed to be spplied, ot oly to te priary LCT eipet
proiders bt also to sppliers, serice proiders, afactrers
ad deelopers wic play a essetial role across te LCT alecai. Procreet capital is cocetrated o te prcaser of
te LCT eipet or ifrastrctre.
LCT PROCuREmEnT CAPITAL TRAnSACTIOnS8
8/7/2019 Accenture_Barclays_Carbon_Capital
18/87
OvERvIEW OF ThE LCT vALuE ChAIn9
20 Carbon Capital
Financing the low carbon economy
vEnTuRECAPITAL
(A,B,C,D+ROunDS)
TAx
CREDITS,
DEmOnST
RATIOnGRAnTS
LCTPRODuCTDE
SIGnAnDCOnCEPTIOnDEvELOPER
LCTPRODuCTACquIRE
R
SECOnDARYSuB-
COmPOnEnTPROvIDER
PRImARYSuB-
COmPOnEnTPROvIDER
PRODuCT
mAn
uFACTuRInG
(AnD
COnCEPTIOnIF
APPLICABLE)PROvIDER
PRODuCT
COmmERCIALIzATIOn,
InSTALLATIOnAnD
ROLL-OuTOPERATOR
PRODuCTuTILIzATIOn
mAInTE
nAnCE
OPERAT
IOn
PRODuCTEnD-OF-LIFE
&DISPOSALPROvIDER
RAWmA
TERIAL
PROvIDER
RAWmA
TERIAL
PROvIDER
RAWm
ATERIALPROvIDER
PRODuCTDEvELOPERCAnBEnOnvERTICALLYInTEGRATED
AnDBASEDOnALICEnCEmODELOnLY(E.G.RETAInIPRIGhTS)
IPO,BuYO
uT
DEVELOPMENTCAPITAL
APPLICAbILIT
YRANGE
APPLICAbILITYRANGE
mEzzAnInEDEBT
SECOnDARYOFFERInGS
GuARAnTEEDLOAnS,
CAShLOAnS
JunIOR(CORPORATE)
DEB
T,COnvERTIBLES
SEnIOR(CORPORATE)DEBT
SEEDCAPITAL,
AnGEL
PROCUREMENTCAPITAL
REQUIREMENTfOR
DEVELOPMENTCAPITAL
HIGH
LOW
MEDIUM
NONE
ASSETFInAnCE
TERmLOAn
ASSETLEASE
BOnDS
PROJECTFInAnCE
8/7/2019 Accenture_Barclays_Carbon_Capital
19/87
8/7/2019 Accenture_Barclays_Carbon_Capital
20/87
Adoption outlookfor low cArbon
technologies
Carbon Capital 23
estimAteddemAndfor lct
technology
demand-driven approach
policies andregulation
consumersbusinesses
macro trends
requiredsupplyof lct
carbon target
supply-driven approach
renewablestarget
carbonpricing
energysecurity
study approach
A a, aav, - aa a
v a v a
aa a a a a
lct a, a aa
a a av.
o a a a-v aa a
a lct a av 2020. t
a aav aa a
aa av a a
a a30. t -v aa
va aa a a aa
a a a.
IIApproach
w a a a v
aa a lct 2020, a
a a a av a a
-v a .
t a a-v a a a
a a a a lct a ,
this section detAils aa a a aa a a lct e 2011
a 2020 a aa a a av.
K :
a a 2020. t a
x a a x aa.
t aa x -v
aa a a aa a
a a a a
a a a.
30 raa 2050,A aa a ,-a e,ta Aa,ea cafa
h :
overview of the studys modelling approach10
8/7/2019 Accenture_Barclays_Carbon_Capital
21/87
24 Carbon Capital
Financing the low carbon economy
Aa aa a
a a a a a
a a a a
v a a.
na 40 lct a
a vaa (Ax i) a
a a a 2020, aa
a ava lct a
(.. a a lct).f , 15 a va a aa v
a xa aa,
a vaa. f
aa, a , a a a a
aa Ax i x.
t a f 11.
All the lct a a av va a a a eu25 .
i a, a-a a a (, a, a a a ) a va
a a a :
Geographical scope
us.
caaa.
eu25.
ia.
ca.
Jaa.
Aaa.
low cArbon technologies a aa a, aa, ,
a a . w a va lct :
Applications and geographical scope
Selected commercially viable applications
b.
e .
e .
ta v.
ta a.
An advanced modelling approachbased on an s-curve adoption method
1. i a a va a
aa v lct a a (
Ax i).
2. i a aa a
va - (.. a v. a a
v. va).
3. caa 2011-2020 a a lct
aa a a a a x
a a.
4. d lct.
5. d v aa aa a
a aa.
the study methodology (aa a v Ax ii):
6. i
.
7. d a a
a aa.
8. d a a a
.
9. caa :
a. p aa.
. dv aa.
. ca av31.
. e av31
.
10. l a v aa
a a.
31 ca a av a aa alct aa: ..-v a
a a av a av
8/7/2019 Accenture_Barclays_Carbon_Capital
22/87
Carbon Capital 25
buildings
electricitydistribution
electr
icityproduction
trAnsportinfrAstructure
trAnsportVehicles
buildingequipment
retrofit
sa lct a
1.1
12.1
2.1
m- a a (-chp)
p- v
nx a led
e v
h hVAc & a
b-a v
e v
e v
sa ( )
pV a a a
m & aa a
o
-v -va a a(x a a a )
d a a a a
i a a a
o
ga
wa
ca a a (csp)
pva a (pV)
da & aa a a a aa a
Ava a a
Amm sa m - v ava a
ia aa (bms) ,a, & aa
b- v
b-a v
b-a v
cng v
b- v
b- v
n a - a a v
1.2
12.2
3.1
4.1
6.1
10.1
10.2
11.1
6.2
7.1
8.1
9.1
9.2
4.2
5.1
5.2
1.3
12.3
13.1
14.1
1.4
12.4
13.2
14.2
12.5
13.3
14.3
15.1
sa ia a
pV a a a a
sa a Ava a aa
-v aa
Ava a a (Ami Amm )
i a a
Aav a v
Aav a v
Aav v
n a - a a v
la-a a
la-aa
la-a a a
la-a a a
electricitytrAnsmission &distribution
buildingconstructionAnd design
electricityconsumption
lArge-scAlepowerinfrAstructure
lArge-scAletrAnsportinfrAstructure
commerciAlVehicles
public trAnsitVehicles
commerciAlfreight Vehicles
seA Vessels
decentrAlizedpower units
lct equipment and infrastructure selected for the study11
8/7/2019 Accenture_Barclays_Carbon_Capital
23/87
26 Carbon Capital
Financing the low carbon economy
Quantifying the size of the applicable market for LCT
All ApplicAble mArkets (..
a v a aav
v) a v a a. t
a a va a
a a. A xa
aa .. fa a
a 35 a uk 200932.
ea a v a a a a a
a va (.
a, a a va a).
t a a (a ) a
aa a a a a cAgr.
this methodology is a a , a
aa a a -, a a
a a a a
a aa .
A xa a
ga Ax ii.
t a a a
aa a aa , a
aa a a av
2011 a 2020. t -v aa
a a a a
a lct.
qa aa a lct.
d a a -v
aa.
ia a v.
Aa v
.
ia - a.
fa a a .
t :
32 dv -a a ,ea
33 poles m, Aw e m,eaa
34 t a aa a a a a aa a a a a ra (s3)a rv (s1)a, a aa v , a aa aa a
35 ga w a
sa aa 2010-2014e, 2009, baa
Defining the adoption outlook through an s-curve calibration
the rAte At
a v aa
a a. t x v
a a aa a a a
a v x a a va a,
, a- a v.
t a a lct a
2020 a a ea v a a a
.
A aa - -v (f 12)
a aa a a lct a
v aa a.
f a, x a a a a
-a a eaa poles33,34
aa 2020 a v. baa
2010 v a (aa A).
2020 v a (aa b).
ya 50 2010-2020 a av (aa c).
ra a a c a (aa d).
a - a - a a
a 35 a aa -v (..
a 2014).
8/7/2019 Accenture_Barclays_Carbon_Capital
24/87
A
B
C
D
Carbon Capital 27
2010 2012 2014 2016 2018 2020
10%
20%
30%
0%
%a
t aa a a a a
a lct a x a
a v (xa a a a
a f 13).
4%
0%
2009 20152011 20172013 2019
8%
12%
16%
%
a
Adoption 1
Adoption 2
Adoption 3
13
illustrAtiVe Adoption rAte configurAtions13
four point s-curVe Adoption rAte cAlibrAtion methodology12
8/7/2019 Accenture_Barclays_Carbon_Capital
25/87
cost-intensity of AlternAtiVe power production14
28 Carbon Capital
Financing the low carbon economy
2000
2,000
0
4,000
6,000
8,000
10,000
12,000
2010 2020 2030 2040 2050
Integrating the technology cost learning curve
As preViously discussed, a
v v . A
aa a , lct a
v a
a. A a lct av a a,
a v a a a v
x 10 a. A xa
a 36 . t
, v, v a aa
lct aa a aa,
.. a , a
a va.
t v lct a a a
a a v aa
aa . A lct a
a a a
v ( a Ax V).
$/kw-aa
A number of a a
a (.. aa
a a, a a). t
a ava a
aa . f
xa, uk a
to AccurAtely price lct, x
av a a lct aa a a aa aa
, a a a .
x a 12 2010
a 201537.
t v
a a a
aa av
av v .
A sa g s (Asgs), A sa
b s (Asbs), A m sv(Ams), A i c n (Aicn) a
v - a x
Anticipating the evolution of electricity grid emissions intensity
Incorporating in-depth technology understanding
Biomass (gasication)
Solar Power Plant
Hydrogen Fuel Cells
Wind Offshore
Decentralized PV
Wind Onshore
14
36 p / 2030 (weto 2030)
37 A Aa,
v eaa x a a
8/7/2019 Accenture_Barclays_Carbon_Capital
26/87
Carbon Capital 29
for All the lct aa, a
a a a a va aa. f a (-)
xa, aa a a
ava .
t aa lct a
a a - a aa, ava
, x aa .
Factoring the total cost of asset procurement
e a .
pa/a a .
pa/a a a .
sa va .
pa/a a a .
der-a a a aa .
f x, :
As many LCT products have not yetreached maturity, their cost learning
curves are likely to decrease rapidly overthe next 10 years.
38 h X e
Av hpa a rvaa saasa g s,A, 2008
aa a a a
x j a .
p a , a, a
a v j (..
sagc, X & A b, ca)38.
8/7/2019 Accenture_Barclays_Carbon_Capital
27/87
30 Carbon Capital
Financing the low carbon economy
cumulative procurement capital: 2011-2020 (Bn) europe (eu25)15
this section presents q f lct d d e bw 2011 d
2020, g w g g d b g. i dd, d f g
wb gb .*
IIICapital requirements andcarbon impact
TptItcte
- gg
f
ig b f
f f
ElecticityDitibti
s gd f
add
d g f
gd
ad g
f f
(ami w
amm )
ElecticityPdcti
s g
w g
csp
pv
B d
G
g-
w g
Wd g
w g
o
off
Bildi
s bdg
lct q
f bdg
m-chp
leD gg
hvac g d
g
Bdg g
s bdg
igd f w
bdg
pv
f dd
w g
f d
TptVeicle
a f fg
B
ev
Bd
a f b
B
ev
Bd
nw dg d f f
fg
a f g
B
ev d phev
Bd
cnG
600582
35
529508
184
44
280
325
215
3424
19 102
344
154
352
177
1
2.3trillion
* Numbers on graphs may havediscrepancies due to rounding fornumbers presentation only.
8/7/2019 Accenture_Barclays_Carbon_Capital
28/87
Carbon Capital 31
LCT EquIPmEnT anD InfrasTruCTurE LEgEnD(for suBsEquEnT fIgurEs)
15
Key ee:
i e (eu25), bw 2011 d 2020, 15
b lct wd q
f 2.3 (Fg 15) d
0.6 d . t w b b
g q 2.2 G co2 d g
q 261b.
s pv w g dd,
qg 365b fdg f g- f d
-g . t d g f
g (bg g f
wd mW- b), w d ,
f -g d g d k-.
t f dg wb (wd, , g
d b) e, c, id, usa, J,
cd d a w q f 2.4
, g g f 6.6 G co2.
i e (eu25), bw 2011 d 2020, 15
b lct wd q
f 2.3 (Fg 16) d
591b (Fg 17) d b d wd . t wd 2.2 G co
2 (Fg 18) f
b d g g f 261b (Fg 20).
t g g b dd f g
wb d
b f d f d.
TransPorT InfrasTruCTurEe-veicle ci itcte
Itelliet tpt yte
TransPorT VEhICLEsaltetive el lit cecil veicle(PhEV, EV, bietl, bidieel, Cng)
altetive eit veicle(EV, bietl, bidieel)
altetive pblic tit veicle(EV, bietl, bidieel)
new dei d el ecietctie eit e veel
ELECTrICITY DIsTrIBuTIonst id itcte dvced eet te electicity id
advced itcte electic t ete
(amI wit amm ete)
BuILDIngsst bildi LCT eipet ett cecil bildi
st bildi iteti LCT i ewcecil bildi
PV l pel decetlizedpwe eeti eld
ELECTrICITY gEnEraTIonLe-cle wid pwe eeti(e d e)
Le-cle etel pwe eeti
Le-cle bi pwe eeti
Le-cle l pwe eeti(CsP & PV)
Overall impact for Europe
The 15
technologiesanalysed require591bn indevelopment and2.3trillion inprocurementcapital between2011-2020, leadingto carbon savingsof 2.2Gt CO
2e
and
energy cost savings
of 261bn.
8/7/2019 Accenture_Barclays_Carbon_Capital
29/87
build
ings
elec
tricity
distrib
ution
elec
tricity
prod
uctio
n
trans
port
vehicles
trans
port
infra
stru
cture to
tal
build
ings
elec
tricity
distrib
ution
elec
tricity
prod
uctio
n
trans
port
vehicles
trans
port
infra
stru
cture to
tal
32 Carbon Capital
Financing the low carbon economy
Procurement capital
Development capital
the larGest share f w b g bdg
f g lct q, g bdg
d dg g d. t d g
f g bdg d f bdg
d (d bw
f ). i dd, f
gg w f dd pv d
g, g f g f-d pv
g- j (d 25 39 f
-f-d pv) d g mW f dg
g f .
s pv - g w
g f lct wd, d w q 365b
d . t d f g
f g (
wd), w f d d g
d f ( b f
G, f , d b 140
bw 2008 d 201040).
s gd, f gg w
d dd g d, w q 352b
. t f gd f d
bk- g , gdg
b, g f g
d dd wk .
W k f - gg b
d d b d 34b
w d b d fd f.
39 rd 2050,a gd ,w-b e,t a,e cFd
40 Dd fd (e) d wddd (Gb rwbDd F2010-2014e, Bc eqr)
41 e d d g ipo,
r, 2010
BaseD on an f lct
bw 2004 d 2009 (dd dg ad
iv), g f wd d w q
wg 66 f d
qd b .
lg ipo f wd, d dd
wb w d b-.
t ipo f e wb w d, e
G pw sa d 2.4b d w g
e ipo 200841.
i b-, d
w gg g
g. i k b
dd b , q d b
ffg ( d iv).
cumulative procurement capital2011-2020 (Bn) europe (eu25)
16 cumulative Development capital2011-2020 (Bn) europe (eu25)
17
inBn
inBn
500
1000
1500
2000
2500
600
529
508
582 35 2,254
100
200
300
400
500
600
8823
382
6335 591
8/7/2019 Accenture_Barclays_Carbon_Capital
30/87
build
ings
elec
tricity
distrib
ution
elec
tricity
prod
uctio
n
trans
port
vehicles
trans
port
infra
structure to
tal
83
91
Carbon Capital 33
Emissions savings
Cost savings
savinG 2.2 G co2 f b wd d eu 2020
83 f 1990 , f bd f
e Bau j f (Fg 19). if
dd b d b d
(.g. fg, d f ,
), dd g wd eu k
20 b d g.
s 49 f g w dd
k g f bg wb f
w. t d 1.1 G co2 f
b .
t d db
b b g d
wk . hw, f g - gg d gg w .
When analysinG lct q d f,
g g f d- w
gd . F g- w g
f wb, g g w d
f wb f g d
g f d-.
Bdg w f 42 f g
g, b dg g
a w q 26 f
d d f
g, w b f 414 m co2.
Bdg d g f
g, ffg b f bg 403 m co2.
t w b d g g bdg w
g-f q d dg
w d f g d
f gd.
W , f g fg
b w g-f wd g
g, d 182 m co2 bw
2011 d 2020. t g gd f
, kg b-f f .
bg w , g .
rg bdg w lct q d
85b w g
bk f g q. t
g b f bdg .
s ff g f
g b g w f
d g g
inmtco2e
cumulative emissions savinGs2011-2020 (mt co
2) europe (eu25)
18 europe (eu25) emissions proFile19
Historical
BAU Project ion
Projection with roll out of LCT
500
1000
1500
2000
2500
403
288
1,089
414 24 2,219
60
70
80
90
100
1990 20001995 2005 2010 2015 2020
id 100 = 1990
8/7/2019 Accenture_Barclays_Carbon_Capital
31/87
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
100
200
300
400
500
0
10
20
30
40
50
build
ings
elec
tricity
distrib
ution
elec
tricity
prod
uctio
n
trans
port
vehicles
trans
port
infra
structure to
tal
34 Carbon Capital
Financing the low carbon economy
cumulative annual emissions savinGs (mt co2)
in europe (eu25)
21 cumulative annual cost savinGs (Bn) in europe (eu25)
22
b. W d
64b bw 2011 d 2020 e, 25 f
g dd.
W , f
d f g. hw,
d b bd w k f
(.g. b- F).
r f bd d b f
g. F , f
g g b w g
dff bw (.g. g f
F w 0.1052 /kW
f 2010, d 0.2446 /kW G f
d).
l, w g g b f
f wd 13b. t gd f dg g d f
d w .
2011-2020 evolution of carbon and cost savings
the aDoption proFile f lct bw 2011 d 2020
w d w kd f q d
f bg d b d g.
c lct g w bg d dff
g .
e d f w b
d d d f f
dd k gwg d. B , d
f f dd k g
f g d f d
d b wdd.
inBn
50
100
150
200
250
300
109
87
5213 261
cumulative cost savinGs on enerGy2011-2020 (Bn) in europe (eu25)
20
Transport
Infrastructure
Transport
Vehicles
Electricity
Production
Electricity
Distribution &other equipment
Buildings
21 22
8/7/2019 Accenture_Barclays_Carbon_Capital
32/87
2.4
6.6 G c02
1.7
508
762
828
11281 28
1.1
1.8
0.04
2.8
0.40.2 0.1
382
552
29
567
8260 21
Carbon Capital 35
Financing renewables: the global perspective
the expecteD aDoption f d wb (wd,
, g d b) f eu25 ,
c, id, usa, J, cd d a wd q
2.4 dg d 2011-
2020, d wd d b b f 6.6 G co2.
t g g. i
d 2011-2020 b g wd
10-15 f wd
b 42.
c d ud s d
e 10 . c k d
g w 43 , wg
g k d g gd (0.76
kg co2/kW 2010). W id gd , k q f c,
gw d b 50 70
f c d d k- f wb
w. t d w b
: id d 0.4 G co2 d
w 2.8 G co2 f c.
F, d, fg d f
wb g w q d 1.7
d . t k g
ddd (Gva) w g g d
f lct q. a c d 30
f wd d43, j c
pv f k b g f gb
dd f , g w g
d d g. o,
d f d f
pv k b f gb b.
cd, J d a w f g
g wb e, c
us, g f f
qd.
Europe 25
United States
Canada
China
India
Australia
Japan
China and theUnited Statesare expected toinvest more thanEurope over the
next 10 years.
41
42 Dd fs cDb,a d Wde F,
J 200943 rg dd
c pv mk,rwb egWd, nb2009
23 24 25cumulative procurement capital 2011-2020 (Bn)23
cumulative emissions savinGs 2011-2020 (Gt co2)24
cumulative Development capital 2011-2020 (Bn)25
8/7/2019 Accenture_Barclays_Carbon_Capital
33/87
36 Carbon Capital
Financing the low carbon economy
44 Bg f fleD gg, cnetnw, m 2010
45 s 2020: tc G, 2008
46 e u,a p f egef, 2007
low carbon technology overview applicationadoption indicator*
2011 2020
s bdg
lct q f
bdg
s bdg igd f
w bdg
pv Dd w
g f d
ig bdg g d g dg:
m bd d w (-chp).
n g leD gg.
hg f hvac g d g .
igd bdg g (Bms) f gg, g,
g d .
c f bdg (w-bd) w g Bms,
g f hvac, w , leD gg, dg f
d , g f (w ) d
bddd lct.
ig g bdg g
, f w d b bdg d d gd.
0-5%
5-10%
0-5%
20-25%
50-55%
5-10%
Bdg w q g f : 600b b 2020 (27 f ).
t b d b g bdg w f qd, g 13 f
g 293 m co2.
of g f q b d bdg, leD gg d dg d d w d 46 f
bdg b d 202044. t g d g- d d d q.
W bdg g (Bms) w b d d g f
w g , w 25 b 202045.
s dg f w bdg d g -f , d hvac , d g f lct
q (leD, -g, Bms). W g w f f w-bd
2020, w g fd eu 46. 344b d
f s bdg, j g .
Fit d d f g ( kW b) w d wdd d f pv . G
f f- 11,351 f 2 kW d , pv f bdg 154b k b
d g- w w g-.
sg g g f b 85b w b gd f g f lct bdg. t w b d g
dg g f f q d b bg g w -g. c g w,
w, b wd dd g d b f bdg g .
cb g d dff g b . F , w b gd f F (0.04kg co2/kW)
d w b d f g m. t G w 83 m f g d f
b gd w g (0.42kg co2/kW).
t b d g, ld D a d Bdg eg ef pg (Beep) f
gg lct, g-f dg b, w , g gg d g g b
bdg ld (.g. , , ).
Key FindingS:
Selected example building retroFitS
BuilDinGs
Buildings
8/7/2019 Accenture_Barclays_Carbon_Capital
34/87
France
Germany
Italy
Spain
UnitedKingdom
France
Germany
Italy
Spain
UnitedKingdom
83 8
77 49
103 83
68 35
77 49
600 bn 403 mt c02
600
102344
154
293
44
403
66
Carbon Capital 37
total procurement capital (Bn) total emissions savinGs (mt co2)
ToTaL DEVELoPmEnT CaPITaL 2011-2020, EuroPE: 88Bn
ToTaL CosT saVIngs 2011-2020, EuroPE: 109Bn
* PEnETraTIon of LCT as a PErCEnTagE of ThE aPPLICaBLE marKET morE DETaILs In aPPEnDIx V
total procurement capital, BuilDinGs, 2011-2020,europe (Bn)
total emissions savinGs, BuilDinGs, 2011-2020,europe (mt co
2)
8/7/2019 Accenture_Barclays_Carbon_Capital
35/87
8/7/2019 Accenture_Barclays_Carbon_Capital
36/87
France
Germany
Italy
Spain
UnitedKingdom
France
Germany
Italy
Spain
UnitedKingdom
84 8
60 11
95 64
61 25
69 43
529BN 288MTC02
529
177
352
288
77
211
Carbon Capital 39
ToTaL DEVELoPmEnT CaPITaL 2011-2020, EuroPE: 23Bn
ToTaL CosT saVIngs 2011-2020, EuroPE: 87Bn
* PEnETraTIon of LCT as a PErCEnTagE of ThE aPPLICaBLE marKET morE DETaILs In aPPEnDIx V
total procurement capital (Bn) total emissions savinGs (mt co2)
total procurement capital 2011-2020,europe (Bn)
total emissions savinGs 2011-2020,europe (mt co
2)
8/7/2019 Accenture_Barclays_Carbon_Capital
37/87
40 Carbon Capital
Financing the low carbon economy
low carbon technology overview applicationadoption indicator*
2011 2020
lg- wd w g
lg- g w g
lg- b w g
lg- w g
o d ff wd w w d f g
1 mW.
pd f g w w g 1 mW.
G w f g f d
g.
pd f b w w g 1 mW.
B w f b f wd
fd, w q b dg f, d d.
pd f b d w d w pv w
g 1 mW.
0-5%
0-5%
0-5%
0-5%
10-15%
0-5%
5-10%
0-5%
e d f wb d q 508b bw 2011 d 2020 w gg g
f dd b g w 1,089 m co2 (49 f lct b g dd).
t g f pv d csp w g wd w mW- b w q g
: d 280b 55 f wb . t dff d mW-
f pv w f f 5-15 d w wd 15-25 .
hw, pv w f d d f w b
w d w . t w b g, 11 f dd g f
wb. ag g d g , pv w q b w
f d f gg .
o d ff wd w w bgg b d, g d k f d b f
e . pjd g 718 m co2, 32 f lct b g, g d.
B w g g d d d gw d 10 , g w
g d w wd w. s, g w d qg b 1b g
f g bd 2020.
W d d g d g dd f wb g, f 382b w d b r&D, d
g, 65 f d qd.
t qd f wb w d g e gg, dg uK g f 70b-110b
. i , uK d dk d - f wb f w d ( f
wd, f f ff wd d 0.5 f f f d 2020).
i f b , G k b f b f d g w d w
wb. t d d g b g: 289 m co2 bw 2011 d 2020, 12
f lct b g dd.
m e g f gg wb g f 2020, d d g (.g. Fit,
roc). Bw f g b d eu : Dk: 30 , F: 23 , G: 18 , i: 17
, nd: 14 , uK: 15 (ukg d B w b f, GiBc).
Key FindingS:
Selected example renewableS adoption targetS
electricity proDuction (eu only)
Electricity Production
8/7/2019 Accenture_Barclays_Carbon_Capital
38/87
France
Germany
Italy
Spain
UnitedKingdom
France
Germany
Italy
Spain
UnitedKingdom
72 18
88 146
109 289
93 110
40 99
1,089 mt c02508 bn
280
431 184
5081,089
120
23219
718
Carbon Capital 41
ToTaL DEVELoPmEnT CaPITaL 2011-2020, EuroPE: 382Bn
ToTaL CosT saVIngs 2011-2020, EuroPE: n/a
* PEnETraTIon of LCT as a PErCEnTagE of ThE aPPLICaBLE marKET morE DETaILs In aPPEnDIx V
total procurement capital (Bn) total emissions savinGs (mt co2)
total procurement capital 2011-2020,europe (Bn)
total emissions savinGs 2011-2020,europe (mt co
2)
8/7/2019 Accenture_Barclays_Carbon_Capital
39/87
42 Carbon Capital
Financing the low carbon economy
transport vehicles
low carbon technology overview applicationadoption indicator*
2011 2020
a g
a fg
a b
nw dg d f f
fg
sbg b g g
(d d ) w cnG, g- bd, b, bd d
. t d g w f f
1.5 .
sbg b g fg (d
d ) w b, bd d . t d
fg w f g 1.5 .
sbg b b w b, bd d b.
sbg g d r50 w g f 15+
w w g f f f .
0-5%
0-5%
0-5%
10-15%
20-30%
10-20%
15-20%
40-50%
a f ( d b) d q 582b , w d b
d f 414 m co2 bw 2011 d 2020 e.
a g w q g f f lct (56 ) k g
f . ad f d g (cnG), d b d w w k- f bd d
g- bd d gw -ggb 10 , g 25 d 10 f g
e 2020.
u f b d fg d w. ag b f j b d,
w f b g wd d f g, g d df g f
g (.g. b f g fg , dw q).
rg gg fg d bk w w g f d dg dd (
, bd d w , g g ) w q 24b
d w 182 m co2, 7.5 m co
2 f b d. ag f w dg d f-f
e d ( d bd f d), g fg w wd g
k g. t f g g w k- f g-f g b .
F d G, w g d g f fg d g , k f
d bd k d b w 104b bw 2011 d 2020.
pb f w b w g f 52b. rg (.g. -b bf cnG) w
b w g d, w , b .
ups, a fg d g d 25 bd d . ups w d f
f dg dd 300 cnG f D Fg c c c (Fccc)51, b kg ups
f wd g f .
Key FindingS:
Selected example alternative road tranSport vehicleS cng
50 r: r , ff
51 www.b..
Transport vehicles
8/7/2019 Accenture_Barclays_Carbon_Capital
40/87
France
Germany
Italy
Spain
UnitedKingdom
65
39
39
52
38
France
Germany
Italy
Spain
UnitedKingdom
66
21
75
24
20
582 bn
582
215 19
325
24
414 mt c02
414
1828
107116
Carbon Capital 43
total procurement capital (Bn) total emissions savinGs (mt co2)
total procurement capital 2011-2020,europe (Bn)
total emissions savinGs 2011-2020,europe (mt co
2)
ToTaL DEVELoPmEnT CaPITaL 2011-2020, EuroPE: 63Bn
ToTaL CosT saVIngs 2011-2020, EuroPE: 52Bn
* PEnETraTIon of LCT as a PErCEnTagE of ThE aPPLICaBLE marKET morE DETaILs In aPPEnDIx V
8/7/2019 Accenture_Barclays_Carbon_Capital
41/87
44 Carbon Capital
Financing the low carbon economy
transport inFrastructure
low carbon technology overview applicationadoption indicator*
2011 2020
e- gg f
ig f
hg g gg w - b gd b
. t d gg , b d
g g k dd.
D f f g (g f g, bd),
f d d g. t d g f
g q d g b d, w d
f g f.
0-5%
0-5%
35-40%
25-30%
t - f - gg f d g d q 35b bw 2011
d 2020 f eu25.
W its (g f ) bg g g d d , f wd
d d g f 24 m co2 b , w f b bg (.g. j g). a
d w k , g f its g. t d b -d f dd
bk d f g- f its b b, w g d .
i f d g f f its dd f d d
w f fd bd ff.
e- gg f d q f 34b 35-40 f b . t w b g-g
w d g f.
W - gg bg dd g e (s 75 , B 191 d mdd 28052) , dd f
- gg k d dd. t w w g- bd d g b dd wd.
F d g g - gg, g b d g g d
(alb). Fdg f - gg d 10b.
e g d b its kd b f g-k d b . t d g f g d
b g f j e gg: bw w d f m co2.
D gd d -ld - - gg nd w f g
10,000 gg 53.
t fd w w wk f d fwg b:
e .
mgg gg .
o&m g.
t f g 10,000 gg d b bw 10 d 30.
Key FindingS:
Selected example e-vehicle charging large-Scale roll-out
52 s: Bbgnw eg F
53 if ,r&D pj,Fd e-ld.
Transport infrastructure
8/7/2019 Accenture_Barclays_Carbon_Capital
42/87
France
Germany
Italy
Spain
UnitedKingdom
10
1
3
1
5
France
Germany
Italy
Spain
UnitedKingdom
3
3
4
2
3
24 mt c02
24
24
35 bn
35
34
1 0
Carbon Capital 45
total procurement capital (Bn)
ToTaL DEVELoPmEnT CaPITaL 2011-2020, EuroPE: 35Bn
ToTaL CosT saVIngs 2011-2020, EuroPE: 13Bn
* PEnETraTIon of LCT as a PErCEnTagE of ThE aPPLICaBLE marKET morE DETaILs In aPPEnDIx V
total emissions savinGs (mt co2)
total procurement capital 2011-2020,europe (Bn)
total emissions savinGs 2011-2020,europe (mt co
2)
8/7/2019 Accenture_Barclays_Carbon_Capital
43/87
8/7/2019 Accenture_Barclays_Carbon_Capital
44/87
sm amr
A Smart grid allows for more efficient use of energy, enablesmicro-generation and much more
Carbon Capital 47
t gd w f 2009 d
d 47,000 g .
x d w a g g
f d g f gd d g
g f.
a g d
d f gd w b
x d d- b f f
g f gd g -
.
Pwe geeti Pwe Tii Pwe Ditibti Pwe Cpti
a ddd g
a df b
ff
a & g
f
D w d
a & g
f
s
asm amm
Gd d
electricity
suBstation suBstation suBstation
BuilDinGarea netWorK
(home anDBusinesses)
heatinG
Green electricityproDuction
DecentralizeDproDuction
BacKhaul GriD inFrastructure automation
transFormersDistriButers
DistriButeDstoraGe
capacitorsBatteries
r f d
G g g s m f
i w g
m-gf wb
Delivering a smart grid in an Intelligent City
SmartGridCity in Boulder, Colorado
pd f -, w-w f
d d d bw
d- d d.
eb g g d f
d db wk.
D - f , ff
d .
in march 2008, x eg, us-bd , d us sGdc
Bd, cd, g g f gd g d. x eg fd
w d, g d bg g b b d d f
wd dd gd54.
eb f d wk d d
f .
pd d f
.
ig dff f g (wd,
, g- bd ).
Te bjective te t id e t:
54 x eg
sGdctm, xeg, a
overvieW oF smart GriD26
t gd g b dd bd , g
, q d d d g d b f gd. m
, d g fd f gd g b dd d wd.
8/7/2019 Accenture_Barclays_Carbon_Capital
45/87
8/7/2019 Accenture_Barclays_Carbon_Capital
46/87
Carbon Capital 49
The PUBLic secToR td ly LcT t bt ll
d tl ll. i t $537b eurp tmulu pk
t ut 2009, $54b, r 10 pr t, w lltd t r
tt d frtrutur59.
grmt rud t wrld r r tr budt
fr rmtl d lmt mtt mur. i
t Us, $12.3b f t amr Rry & Rtmt at
b lltd t ry fy tt t, d
upprt t tly60. i id, w l ly m t
r $535m yr t fud ntl cl ery Fud61.
c t d mpr 34 pr t r
f t $649b tmulu pk t r tmt,
dmtrt r mmtmt t rmtl
mur62. T itrtl Mtry Fud td t rt
$100b r fud by 2020 t mt t l d
dtd t t coP15 fr cp63.
Ll rmt l pud fr ftr prurmt
f LcT by rll ut m. exmpl lud T
amtrdm smrt cty tt t ntrld r t Re:FiT
prrm dlpd by Ld64.
hwr, tblty d l-trm publ mmtmt f
LcT t (FiT, urtd l, tx-rdt) d rb
pl (rb tx, d m rdut mmtmt),
wlt rtl, r yt t b d.
ntl rmt r udr prur t rdu r
dbt, w ld t drt utbk publ pd,
mpt LcT tmt.
Fllw ry rpd rwt lr tmt, t sp
rmt rdud ubd by 20 pr t 2008 lr
pwr, d trdud p t mxmum ttl pty
t b tlld pr yr. T rult wr rp drp lr
Pv tmt sp 2009 mprd t 200865. T
llutrt w ply d t frmwrk mut b rfully
dd t m dmd fr rwbl pwr wtut
rt mrkt tblty.
Fd wt r budt trt, sp d
drd furtr rdut ubd fr futur tmt,
d uttld t mrkt by du rtrt t
xt ubd, w wr ftrd t fr lr
pl pru yr. hwr, t rmt ddd t
t mplmt rtrt rdut t pru xd Fd--
Trff. i 2011, t trff rm wll b djutd urtrly bd
dmd t pru urtr. Wt tmt pybk
lultd prd f 15 t 20 yr, rtrt
f ubd r ply tblty mr rlly prt
t rk fr rwbl tmt, d r t
prpt f ply rk mt tr.
i t rt-trm, t r tl t ur
tmt LcT bl, ltu t tr wll bm l
dpdt t t mdum- t l-trm. FiT
Fr b t up t prd t pr t iRR r
15 t 20 yr fr tmt lr-Pv66. Wtut t FiT,
t t f t Pv lr pl wuld t mk t
mmrlly bl.
Furtrmr, t rt m dwtur rdud t
dmd fr rb prmt r wt m trd
m (eTs). Rt drp t rb llw (eUa)
pr t 13 Mr 201067 t eU eTs prdd pr
t fr lr dutr d t pwr tr t fud
ltrt ry frtrutur r upmt. a tmt
ft l-trm py-bk prd, t b f w
t l-trm rb pr furtr lmt LcT tmt.
Policy uncertainty
56 Rur: Tpwr bll rr, FT,Fbrury 2010
57 Rwbl eryRdmp, eUcmm,Jury 2007
58 st 22, culf eurpU Prdyclu, 12Dmbr 2008
59 Frm r tmulut r utrty?,hsBc glblRr, aprl 2010
60 T stmulu Pl:hw t spd $787Bll, T nw YrkTm, Fbrury 2010
61 id t R$535 Mll Frmcrb Tx cl, BlmbrBuwk,auut, 2010
62 Frm r tmulut r utrty?,hsBc glblRr, aprl 2010
63 F tRp t clmtc, iMF, Mr2010
64 Re:FiT, LdDlpmt ay
65 sp kp ubdfr xt lrpwr plt,Blmbr nw,nmbr 2010
66 it clmtc 2009,Dut Bk,otbr 2008
67 ecX eUa Futurctrt: htrDt 2010, eurp
clmt ex,2010
T Financial Times rtly tmtd tt but
1trll wuld b rurd frm utlt t mt eU trt
fr rwbl ly, up t 202056 (t eU 20 pr
t trt fr rwbl rll-ut w lud bm,
ydr, wd d lr57). T wuld d t b ddd t
tmt trprt, y dutr d buld t
t drd eU 20 pr t rb rdut trt
202058.
T tmt rurd t fft ry drt
twrd lwr rb ry mx d r ry
fy rmu du t t ptl tty f
my lw rb tl.
currtly, my f t ry ltrt r t
mptt t b wt fl ful. a rult,
rmt pl wll d t tu t prd t
frmwrk utl tly t drp d bm tmptt. i eurp, fd--trff b ud
ufully t rw dmt l ry mrkt
utr lk grmy, but w du ltr, sp rt
t t t rm prd lr rmdr f
t mprt f ply tblty dr tmt.
vtur cptl td m pttlly
trfrmt tl w t btd t
lr ll f fud ry t dlp mmrl
l. T fud p mtm rfrrd t t t
lly f dt, d l d t b ddrd rdr t
br t mr tl t mrkt.
Tr r t brrr tt r prt ptl
pr t t ll rurd r t wl ptrum
f ur, frm rly-t mpy dlp
t tly, tru t lr frtrutur t
wt mtur tl u r wd. Tr f t
mt t brrr r rwd r:
Ply urtty.Rtrt ptl ld.
Tly urtty.
8/7/2019 Accenture_Barclays_Carbon_Capital
47/87
50 Carbon Capital
Financing the low carbon economy
68 Ddd-Frk Wllstrt Rfrm dcumr Prttat, T Lbrry fcr, Fbrury2009
69 a prtd Fur 5: cptlrd t fud LcTt ($b) eurp btw
2004 d 2009 by trm
70 Ft dwrdBrz Fsa nt; outlknt, Dw J,aprl 2010
71 cpty ftrdd : MWprdud/MW-pty x umbr fdy pr yr x 24
72 eurtt, drdfrm tlldpty dprdut utput
73 grplifrmt sytm(gis) ftwr,Pvgis, JRc, eurpcmm
74 itrtlPrfrmMurmt &vrt Prtl,iPMvP.r, Mr2002
75 TechPoLdtb, eurpcmm Wrldery Tlyoutlk 2050
Restrictions on capital lending
goveRnMenTs have Been ur r ld
trt fr bk t upprt m rwt, .. sMe
ld trt. hwr, t t m tm, bk r l
udr t prur t rdu rk d buld tr dpt
b rdr t ur tr u ptl t tfy w
r tptd rult.
T rurmt fr bk t mpr Tr 1 ptl, w
wll r udr Bl iii, lkly t lmt bl t
ld furtr (.. prmry jur r r dbt, l).
nw rult my l prt bk frm t
drtly prt uty d umru tr typ f prtly
ffrd fud. T lkly t rtrt bk blty t fud t
dlpmt f rly t LcT mp. i t Us, t
Ddd-Frk Wll strt Rfrm d cumr Prttat wll rtrt tmt prt uty d tur
ptl fud68.
i ddt, t b f dry mrkt fr LcT
prjt dbt rtrtd t ptl pr frm
prt tr d ttut (xlud drt ldr
u rprt d tmt bk). Fr xmpl, t-
bkd urt r bd, w llw tr t
dry mrkt, mk up l t tr pr t f LcT
t 69.
T rll-ut f LcT ft frmtd d utruturd,
wt my mll-l prjt rur fud,
rtr t mll umbr f lr-l prjt. T m
tt t ft t bl fr lr rprt d tmt
bk t prd . hwr, trt ld
bt lr d mll prjt rur mlr rur
t dut rultry, tl, mmrl d l
du dl. T ltrd ut umbr f prpl.
F t rtrtt f ry-ft d mr-
rt upmt buld, fr xmpl, ftly frmtd wt t ddtl dfulty f t t
b ft ttd t t prprt w ty r
tlld. srl eurp t r trul t
uft rtl m tr rtrt prrmm t ttrt
prt tr .
Technology uncertainty
The coMPLeXiTY anD rlt mmturty f LcT r
t rk ttd t t t. itr rur
t l rtur tmt (frm, fr xmpl,
Pwr Pur armt (PPa), rdut ry
umpt) t b urtd r t ft l
tmfrm rurd t mt tptd py-bk prd.
T ru trm td wt LcT r mr
mplx t tmt t t f trdtl tl.
T r urtty f t t prfrm d
t t rk td wt l-trm w.
grl trmttt pwr utput frm rwbl mk
ru trm mr urt, w tur r
t tmt rk. or d ffr wd pwr, fr
xmpl, ly fftd by wtr dt. Ft
rtly dwrdd t Brz F bd w
umbr f wd frm grmy. T w
t rult f tul prfrm b lwr t rl
frt: ry prdut dur 2009 w 12 pr t
d 19 pr t lwr t t P90 d P50 frt tlly
md70. smlrly, t pwr rtd by lr Pv fll
blw tmt: t r pty ftr71 f tlld
lr Pv itly w 5.1 pr t 200872, l t trd f
t 14 pr t trtlly bl fr t utry udr
rml dt73.
T prjtd ry frm tll LeD lt r
buld mmt ytm r l dfult t urt
(.. ty b fftd by t bur f t buld
upt d ld t rbud fft t r
rdud). Urtty ry- murmt
b ddrd tru prtl u t itrtl
Prfrm Murmt & vrt Prtl (iPMvP)74.
Urtty rud ru rt d t rdut
f LcT wll r t rk t.
LcT lrly mtur tr. ardly, t dfult
t tmt t futur t lu lly bd t t
lfp d t prfrm. T rpd f LcT
prurmt d mplmtt t r tm
mprd t t uful utput (.. /kW fr rwbl,
/km fr l, /ur--prt fr buld rtrt
pplt) drtlly rdu r tm. T wll dd
furtr urtty t t futur lu, furtr mplt
t-bd d. T xtrm xmpl
ful-ll-bld pwr (/kW) w xptd t drp by
mr t 55 pr t btw 2010 d 202075.
The complexity and relative
immaturity of LCT increase the riskattached to investing in it.
8/7/2019 Accenture_Barclays_Carbon_Capital
48/87
Carbon Capital 51
Lmtd tmt
LcT mp
d frtrutur
Lmtd
f prt tr
t LcT ptl
tmt
ird rk
td wt
LcT t mpt
RWa
Lmtd bk
ld t LcT
mp d t
Lmtd ft t lw
rb tt
LCT acig equiemet Baie Impact
ird t f
rb-t tt
erly-t R&D publ
t
Lr-l publ
frtrutur
Publ t fr ltd
LcT tmt
ird rtur LcT
tmt tru publ
t lr
Prt tr t
ciB prmry tmt
Lw rtrt ciB ld
fr lr-l t
Lw rtrt
rly d rwt t
mp
Trt rtl m
Lw rk td wt
l-trm LcT t
exptd t futur lu
exptd futur ry
t bl
exptd futur ru
rt bl
ab f l-trm w d
tblty f rb pr eTs
Dfulty t dtfy publ t
w mxmz ll r-lu-
ddd rt
ir prur rmt publ
fud d r dbt
ab f l-trm tblty f
publ t
ab f dry mrkt t trfr
ciB dbt lblty t prt tr
ir prur t mpr Tr 1
rt lmt ciB ld
Rultry lmtt tur ptl
d prt uty ciB tmt
Rur-tty f mll-z trt
Urtty futur lu f LcT t
( pr ut b: .. /kWp, /l)
Dfulty utfy ry-fy
t urtty bmrk
Urtty futur ru f
rwbl du t mpt f wtr d
publ tTchlgyucrtty
Rtrctcptlldg
Plcyucrtty
tbl
The BaRRieRs oF LcT Financing27
LCT is a largely maturing sector.Accordingly, it is difcult to estimatethe future asset value solely based on theassets lifespan and its performance; akey requirement to secure nancing.
8/7/2019 Accenture_Barclays_Carbon_Capital
49/87
buildings
electricitydistribution
electricityproduction
transportvehicles
transportinfrastructure
52 Carbon Capital
Financing the low carbon economy
88Bn
23Bn
382Bn
63Bn
35Bn
cUMULaTive DeveLoPMenT caPiTaL PeR LcT segMenT 2011-2020 (in Bn) (eU25)28
InitialPublic
Offering(IPO)and
secondaries
Seedand
early-stage
venturecapital
Lateandgrowth-
stageventure
capital
Privateequity
(expansioncapital)
Juniorandsenior
corporatedebt
Mezzaninedebt
Corporatecredit
facility
Privateplacement
andPIPE
28
0% 25% 50% 75% 100%
The sTUDY qUanTiFies t dlpmt ptl rd
by mp tt prdu d dlp t 15 lw
rb tl lyd t rprt (dtl
t mtdly appdx iv)76. it t dt d
ut t trm rlt t dlpmt
ptl, bd t dmd fr LcT eurp btw
2011 d 2020.
Prmry uty pr frm rly d rwt t
tur ptl t PiPe, iPo d prt uty b
xptd t r 348b, t lrt r f dlpmt
ptl rurd d 59 pr t f t ttl. a t
mjrty f LcT mp r tll t rwt t, mt
tmt wll b t frm f uty, t dbt.
Dbt rprt 243b (41 pr t fttl dlpmt ptl) d mpd f jur
(ubrdtd) dbt, r dbt, mzz dbt
d rprt rdt flt. crprt dbt mk
up t lrt r f dbt , rprt 182b
(76 pr t f ttl) w wll mly b ud t fud
ptl pd lt, muftur d l fr
LcT dlpr.
Development capitala t tr rw, mr mp wll lk t publ
mrkt t r uty frm tr. Btw 2008
d 2010, mr t 40 LcT mp td t
tkmrkt. Mt f tm wr mll, wt r
trt z f $84m77, d mt ltd dry
mrkt u t Ld aiM tk x (mt
iPo lud udr $100m r td dry tk
x). a t publ mrkt rm tl fr
rw LcT prdr t r t publ uty t, wt
97b (16 pr t f ttl) fud prdtd t m
frm iPo t mrkt.
a ltrt t urd rprt dbt (w ft
rult ptl t) r prmry u f publ
uty (w rult mprtt dlut f urrtuty ldr f publ uty trdd t lw pr),
mp l b rly rtbl bd t
ur dlpmt ptl. q-ceLLs, t grm lr
ll mufturr, ud urtd rtbl bd
t xpd t prdut pty t r bu78.
T bd wll mtur ftr yr d b rtd
t uty up mturty.
76 Blmbr nwery F r1,200 trtrtrd t upprtt dlpmtptl mdl(appdx v)
77 Drd frm
Blmbr nwery F
78 q-cll wll uurtdrtbl bddu 2012 tttutl tr;t bk buldfr t ffr wllmm tdy(7 Fbrury 2007),q-ceLLs, Fbrury2007
8/7/2019 Accenture_Barclays_Carbon_Capital
50/87
transportinfrastructure
transportvehicles
electricityproduction
electricitydistribution
buildings
cUMULaTive PRocUReMenT caPiTaL PeR LcT segMenT 2011-2020 (in Bn) (eU25)30
600Bn
529Bn
508Bn
582Bn
35Bn
0% 25% 50% 75% 100%
Bondsprimary
issuance
Project
nance-debt
Assetnance-term
loan
Assetlease
Projectnance
equityInternalnancing
(procuringentity)
Short-term
assetlending(bridge)
30
Primary
capital
provision-
privatedebt
Primary capital p
rovision
-pr
ivat
eequity
Primary
cap
italpro
visio
n-
pub
lic
equ
i
ty
243
18 2
47
14
97
74
25
51
100
177
171
-
Carbon Capital 53
Equity investorswill provide themajority ofdevelopmentcapital,particularly for
smallercompanies.
cUMULaTive DeveLoPMenT caPiTaL PeR Financing sTReaM 2011-2020 (in Bn) (eU25)
29
InitialPublic
Offering(IPO)and
secondaries
Seed-and
early-stage
venturecapital
Late-and
growth-stage
venturecapital
Privateequity
(expansioncapital)
Juniorandsenior
corporatedebt
Mezzaninedebt
Corporatecredit
facility
Privateplacement
andPIPE
29
0.6trll
Procurement capitaloF The 2.3TRiLLion rurd fr pur LcT t
eU25 t 2020, 1.65trll (73 pr t) wll b dd
xtrl fud (dtl t mtdly appdx
iii). T bd ly f mr t 650 LcT t
trt r t pt tw yr, mbd wt
t r t f prur t d t rrpd
t ur. T rm 27 pr t xptd t m
drtly frm t bl t f tly buyr.
sm typ f LcT upmt b purd fr l
t 100m (fr xmpl, rtd buld rtrt
d mllr l lr Pv plt). T m tt
tru urd trm l f l t 100m lkly
t bm t m ur f dbt, mk up 25 pr
t f xtrl fud fr prurmt. std-l
upmt u l, r frtrutur, u
wd frm wd by l tty, r dl lltrl fr
t-bkd l. By trt, t mr dfult t ur
t ddul t r upmt trtd
8/7/2019 Accenture_Barclays_Carbon_Capital
51/87
1436
Primarycapitalp
rovis
ion-p
rivate
assetde
bt
Internalfinanc
ing
604
147
68
147
338
564
482
604
68
51
54 Carbon Capital
Financing the low carbon economy
coRPoRaTe anD invesTMenT bk wll t trmdr, llw t trm tru tr
prdut d r. T wll prd LcT tr wt t bt prmry d dry mrkt.
T rl f rprt d tmt bk b brk dw t fur r:
Prmry ptl pr.
cptl mrkt.
adry r.
at mmt.
79 Brly spltitrw
80 appld t btddul drtd LcTupmt pur
81 Drd frm mdlrult ly:o pr yr bt t rryrt f LcT rtrtupmt tmtd t 14 prt w uttt ly btw
d t yrwuld b rurdt py bk tupmt pur
Based on ananalysis of650 existing
transactions, weestimate thattechnology buyerswill need to raise1.65trillion fromexternal sources.
2.3trll
Pima capital pvii public aet ebt
Pima capital pvii pivate aet equit
Mr trtly, l m wr t rtd t
pply t t l pymt r pbl, py
bk prd f 10 yr r l r xptd81. T pybk
prd lud t pur pr f t t tlf, l
wt trt d dmtrt f. or 10-yr prd
t uld m rpymt f fully dprtd l wt
mpt t pur tty w.
Prjt , w t mt utbl lut fr
lr-l rwbl, trprt d rd frtrutur
rt tt -w d t mr t
100m, tmtd t trbut 405b mbd dbt
d uty, 18 pr t f prurmt ptl.
Bd r rly bm bl ltrt
t prjt bk bl t pty
my b rtrtd du t rultry rurmt. T
mdl tmt tt 147b wrt f bd wll b ud
t upprt LcT prurmt btw 2011 d 2020.
T rl f bk u bd lmtd t udrwrt
d plmt d d t rur drt fud,
ul t bk td wt t r f
l t bd trut l, fr xmpl. Pl
bd wt tr wll trfr mml mpt
bk bl t d wll t fft tr Tr 1
ptl rt.
The role of corporate andinvestment banking products and services
Bondsprimary
issuance
Project
nance-debt
Assetnance-term
loan
Assetlease
Projectnance
equity
Internalnancing
(procuringentity)
Shorttermasset
lending(bridge)
31
cUMULaTive PRocUReMenT caPiTaL PeR Financing sTReaM 2011-2020 (in Bn) (eU25)
31
prprt, u buld rtrt r lr-l
frtrutur, u mrt rd.
at l wll frm t d lrt ur f
xtrl ptl d xptd t trbut 482b
fud. at l prd t b utbl fr
pur LcT mll-l upmt, lud l
d lr Pv. Mt t t btw 10m d 50m79
t prur, wt t r f tl l80.
8/7/2019 Accenture_Barclays_Carbon_Capital
52/87
Carbon Capital 55
Pima capitalpvii r ll drt , wtr
drtd t prurmt r dlpmt, d dlr ptl
frm t bk drtly t t dlpr r buyr.
Capital maket prdut, bt uty d dbt, prd
lud mrktpl wr l trumt ud wt
t prmry ptl b xd btw tr.
Ultmtly, t xt f dry mrkt upprt t
u f prmry ptl. T tw r r ptl fr
llw LcT dlpr t fud.
Avievice r tl t prd xprt
rud tly, rultry, l d mmrl du
dl u fr LcT trt. T r b
ppld r umbr f r lud t ,
prjt d uty tmt. ardly, dry
r r rtl fr bt bk d tr t udrtd
t mtur d mplx tr. Udrtd prdut
mplxt, mturty d rltd rult rtl
rdr t dtfy tmt rk, trd d trt.
crprt d tmt bk typlly trd
prty xprt ultt t prd tl upprt fr
du dl, d trfr brdr rup f u r
prdr wll b rtl lp t xpd t ptl
mrkt fr LcT .
Aetmaagemet lp t d t mt fft
tmt trt wl tx t dr dmd fr
plzd LcT tmt l.
LCT capitalimpact
Example f LCT ectpecic puct a evice
Geeal cpate a ivetmet bak puct a evice*
coRPoRaTe anD invesTMenT BanK PRoDUcTs anD seRvices (1/2)32
asseTFinancing
PRiMaRY caPiTaL
PRovision
coRPoRaTe DeBTFinancing
eqUiTY Financing(invesTMenT
BanKing)
eqUiTY secURiTiesUnDeRWRiTing anD
PLaceMenTs
DeBT secURiTies
UnDeRWRiTing anDPLaceMenTs
Prjt (dbtd uty/blt d ydt)
Prt dbtd uty frprurmt ptl1,503b
Prtrp frrwbl Jt turbtw crb Trutd hsBc fr rwblprjt
Rb vtur, turptl fud f Rbbkw t rly- d
rwt-t ltmp
Brly nturlRur itmt(BnRi) fud t prtuty rwbl dmrt rd dlpr
Brly cptlaltrt ery grup,fud prd lut tlt dlpr
Prt dbt frdlpmt ptl243b
Prt uty frdlpmt ptl
177b
Publ uty frdlpmt ptl171b
Publ dbt fr
prurmt ptl147b
at-urd dbtd l (blt d ydt)
itl Publ offr(iPo) d dr
nt prmryu
Prt Plmtd PiPe
Bd prmryu
at-urd l
Jur d rdbt (bl td ydt)
Mzz dbt
cmpyrdt flty
sd d rly-ttur ptl
Lt- d rwt-
t tur ptl
Prt uty
srt-trm tld (brd)
* n-xut lt f ciBprdut d r
Ld,tmt,udrwrt
8/7/2019 Accenture_Barclays_Carbon_Capital
53/87
56 Carbon Capital
Financing the low carbon economy
caPiTaLMaRKeTs
sdry mrkturt frdlpmt ptl
sdry mrkturt frprurmt ptl
sr s&P glbl clery eTF w trk tprfrm f uty ld rwbl prdr
Brly cptl ermtlMrkt tm prd rbtrd r fr rprt,rmt d tr
Brly cptlurtzt f rwblt u p-trutrut rtt (alt Wd)
coMMoDiTies
cmmdt futur
crb mrktllw futur
eqUiTY
ex trddfud (eTF)
cmm, prfrrdd rtbltk
FiXeD incoMe
at-bk urt
Fxd d dxdbd r t,rtbl
expur, r,d fprurmt ddlpmt ptl
gldm s wtrdrt urt dtrd ud fr d tfutur m f rwbl
DeRivaTives anDsTRUcTUReDPRoDUcTs
opt, Wrrt
cutm dlut
swp
Trd,urtzt,trutur
aDvisoRYseRvices
cldtd ut fdlpmt ptl
aly ftly, rultry,mmrl, ltrd mptdlpmt dprurmt ptl
id ud t trkt prfrm futy dlpmtptl
Rk mt f
dlpmt dprurmt ptl
Brly cptl altrtery grup, fud prd lutt lt dlpr
Brly cptl eutyRr rwblprd mrkt lyfr t lr d wddutry tr
crdt su glblWrm TR idx
Brly cptl eurpRwbl idx Fmlyprd xpur t trwbl dutry
gldm s gssut w ly t
utblty f rprtprfrm
invesTMenTBanKing seRvices
Mrr dut dryr
strt lld Jv
caRBonManageMenT
aDvisoRY seRvices
crb r
ReseaRchitmt dprtfl trtyrr
idutry trrr rdffrt urt
BenchMaRKinDeX
RisKManageMenT
crb d rymmdtbmrk dx
Dbt d eutybmrk dx
Rultry,
tly,mmrl dl rk ly
Rk d pprtutmt d tl
asseTManageMenT
itmttrt dlpmt dprurmt ptl
Dut Bk DWsit clmt c Lcfud t mpt tr lrb- r ry-fttl, r rwblr ltrt ry
invesTMenTvehicLes
WeaLThManageMenT
Mutul fud t d p
h-t-wrtddultmt dry
Fud f fud
Fud trutur dtmt trty
itmtlut
LCT capitalimpact
Example f LCT ectpecic puct a evice
Geeal cpate a ivetmet bak puct a evice*
coRPoRaTe anD invesTMenT BanK PRoDUcTs anD seRvices (2/2)33
* n-xut lt f ciB
prdut d r
8/7/2019 Accenture_Barclays_Carbon_Capital
54/87
58 Carbon Capital
Financing the low carbon economy
This secTion oUTLines mr m xptd t prd fud fr t LcT tr u t
trm utld Prt iv. i t w tt t fut, bt d brrr f m d ffr xmpl f
mplmtt.
Ke meage:
a tmtd 1.4trll f prurmt ptl uld b
urtzd r bd ( t f t-bkdurt) r eurp btw 2011 d 2020, mk
t t lrt l trumt by lu fr t
pur f lw rb tly (xptd t b 84 pr
t f ttl xtrl prurmt ptl).
Bk uld prd prmry dbt, urtz t t r
bd d pl t urt t mtrm publ
mrkt wt mml mpt tr bl t. T
wuld l d rm tr Tr 1 ptl rt d rk
wtd t (RWa).
ery-ft upmt l wll fud tmtd
140b f tmt, t pr t f ttl xtrl
prurmt ptl. T typ f m ry ttrt
t rur mml t ptl xpdtur frm t
purr f t tly d ly utbl fr
buld rtrt d dtrlzd pwr prdut
upmt. ery-ft upmt l l t pttl t rt lr lum f ddul
l tru prtrp btw bk d utlty r
upmt prdr.
Tx uty/dbt m, plt tmt l
d lw rb tly eTF wll bt tmt
t tr. T m rur bk t t
trmdr d uld bt frm tx t tt
lr prt tmt.
Bk rur tr-p xprt tly,
rult d mmrl dym