Accenture_Barclays_Carbon_Capital

8/7/2019 Accenture_Barclays_Carbon_Capital

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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


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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


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06 Carbon Capital


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.


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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.


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08 Carbon Capital


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


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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.


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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


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12 Carbon Capital


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.


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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


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14 Carbon Capital


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



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


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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


16/87

DEvELOPmEnT CAPITAL TRAnSACTIOnS7

18 Carbon Capital


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


Trasactios ale size i scope for corporate ad iestet baks prodcts ad serices

Increasing eternal nance

25 Blooberg newEergy Fiace


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


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


18/87

OvERvIEW OF ThE LCT vALuE ChAIn9

20 Carbon Capital


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


19/87


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


21/87

24 Carbon Capital


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


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


23/87

26 Carbon Capital


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).


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


25/87

cost-intensity of AlternAtiVe power production14

28 Carbon Capital


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


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.


27/87

30 Carbon Capital


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.


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.


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


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


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


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


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


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


33/87

36 Carbon Capital


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


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)


35/87


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 procurement capital 2011-2020,europe (Bn)

total emissions savinGs 2011-2020,europe (mt co

2)


37/87

40 Carbon Capital



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


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 CosT saVIngs 2011-2020, EuroPE: n/a





2)


39/87

42 Carbon Capital


transport vehicles


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


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




2)





41/87

44 Carbon Capital


transport inFrastructure


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


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 emissions savinGs (mt co2)



2)


43/87


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.


45/87


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.


47/87

50 Carbon Capital


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.


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.


49/87

buildings


electricityproduction

transportvehicles

transportinfrastructure

52 Carbon Capital


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


50/87

transportinfrastructure

transportvehicles

electricityproduction


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


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


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.


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


53/87

56 Carbon Capital


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


54/87

58 Carbon Capital


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

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Accenture_Barclays_Carbon_Capital