AUSTRALIA AND GLOBAL OUTLOOK FOR ENERGY STORAGE … · Source: Bloomberg New Energy Finance AUSTRALIA AND GLOBAL OUTLOOK FOR ENERGY STORAGE DEPLOYMENT | Sydney | 3 June 2015 11.3GW

AUSTRALIA AND GLOBAL OUTLOOK FOR ENERGY STORAGE DEPLOYMENT

Australian Energy Storage

Conference & Exhibition

Hugh Bromley

3 June 2015

1

Europe, Middle East

& Africa

Asia Pacific Americas

PRODUCTS TO HELP YOU UNDERSTAND THE FUTURE OF ENERGY

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Transport

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Technologies Gas

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RECs Markets

AUSTRALIA AND GLOBAL OUTLOOK FOR ENERGY STORAGE DEPLOYMENT | Sydney | 3 June 2015

2

2,500 CLIENTS IN OVER 50 COUNTRIES

The logos listed do not represent a full client list. They are illustrative of the organizations we have worked with in the past.

Public Sector & NGOs

Finance & Investment

Supply Chain &Technology

Utilities & Energy

https://www.clpgroup.com/Pages/home.aspx

http://www.hudsoncep.com/index.php

http://www.vpcp.com/

3

Note: Q2 2015 numbers are provisional. Source: Bloomberg New Energy Finance

ANNOUNCED ENERGY STORAGE PROJECTS WORLDWIDE (MW AND NUMBER OF PROJECTS)


Reserved for BNEF clients

4

Note: Does not include underground compressed air energy storage, pumped hydro, or flooded lead-acid batteries;

minimum threshold for projects is either 100kW or 100kWh. Note that Alevo’s 200MW project with Customized

Energy Solutions is not included because its exact location is not yet announced. Source: Bloomberg New Energy Finance

US ANNOUNCED AND COMMISSIONED ENERGY STORAGE CAPACITY, AS OF 30 APRIL 2014 (MW)



https://www.bnef.com/EstProjects/4752




5

US CUMULATIVE INSTALLED ENERGY STORAGE CAPACITY, BY STATE, 2013-20 (GW)

Source: Bloomberg New Energy Finance


● The US will have installed 3GW

of energy storage by 2020, a

six-fold increase on 2013

● California has mandated that

the three investor-owned

utilities in the state procure

1.3GW of storage by 2020

● The California mandates are

starting to have a strong impact

on project deployment this year

● California, Texas and New York

will account for 72% of the total

capacity installed in the US in

2020

California will dominate the energy storage market in the US, accounting for nearly 60%

of the total amount installed by 2020

0.280.49

0.71

1.02

1.39

1.90

0.05

0.06

0.07

0.10

0.15

0.27

0.07

0.10

0.13

0.13

0.32 0.32

0.33

0.34

0.37

0.43

0.58

0.92

0.4 0.4

0.7

0.9

1.2

1.6

2.2

3.2

2013 2014 2015 2016 2017 2018 2019 2020

Others

New York

Texas

California

6

GLOBAL CUMULATIVE INSTALLED ENERGY STORAGE CAPACITY, BY COUNTRY, 2013-20 (GW)



● 11.3GW of energy storage will

be deployed by 2020, a nine-

fold increase on 2013

● 77% of capacity will be

deployed in just four countries:

1. US

2. Korea

3. Germany

4. Japan

● Australia is only a minor player,

with a projected 104MW of

storage capacity installed by

2020

By 2020, roughly 11.3GW of energy storage will be installed globally, equivalent to less than

1% of the total installed capacity of intermittent renewables (wind and PV)

0.4 0.4 0.7 0.9 1.2 1.62.2

3.20.3

0.60.8

1.2

2.0

0.3 0.30.3

0.4

0.5

0.7

1.1

1.9

0.3 0.30.4

0.5

0.6

0.8

1.1

1.6

0.2

0.4

0.3

0.4

0.5

0.9

0.20.8

1.21.5

2.0

2.6

3.6

4.8

7.1

11.3

2013 2014 2015 2016 2017 2018 2019 2020

RoW

Canada

Italy

China

UK

Japan

Germany

Korea

US

7

GLOBAL CUMULATIVE INSTALLED ENERGY STORAGE CAPACITY, BY COUNTRY, 2013-20 (GWh)



● Germany will install almost as

much energy-orientated storage

as the US:

1. US (-)

2. Germany (1)

3. Japan (1)

4. Korea (2)

● In Germany, this is largely

because of a growth in end-

user applications

● In 2020, around half of

Australia’s 256MWh of energy

storage will be supporting the

transmission and distribution

networks

By 2020, the total installed amount of energy storage will be nearly 30GWh, over 20% of the

cumulative production of electric vehicle batteries

0.9 0.9 1.6 2.2 2.9 3.95.2

6.9

1.2 1.31.3

1.51.9

2.6

4.0

6.9

1.2 1.21.5

1.82.2

2.8

3.9

5.5

0.6

1.2

1.7

2.7

5.0

0.5

1.0

0.7

0.9

1.4

2.8

0.3

1.3

2.5

3.94.6

5.8

7.4

9.9

13.4

19.7

31.9

2013 2014 2015 2016 2017 2018 2019 2020

RoW

Canada

Italy

China

UK

Korea

Japan

Germany

US

8


TECHNOLOGY MIX OF ANNOUNCED ENERGY STORAGE PROJECTS (% BY MW)



9

Note: Prices are in real (2014) USD Source: Bloomberg New Energy Finance, Maycock, Battery University, MIIT

LITHIUM-ION EV BATTERY EXPERIENCE CURVE

2010

H1 2014

m=21.6% 0.1

1

10

100

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

His

torica

l p

rice

(U

SD

/Wh)

Cumulative production (MWh)

Li-ion EV battery

pack


10

Note: Prices are in real (2014) USD Source: Bloomberg New Energy Finance, Maycock, Battery University, MIIT

LITHIUM-ION EV BATTERY EXPERIENCE CURVE COMPARED WITH SOLAR PV EXPERIENCE CURVE

1988

1976

1998

2004

2014

2008

2010

H1 2014

m=21.6%

m=24.3%

0.1

1

10

100

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

His

torica

l p

rice

(U

SD

/W, U

SD

/Wh)

Cumulative production (MW, MWh)

Crystalline Si PV

module

Li-ion EV battery

pack


11

EVOLUTION OF THE LITHIUM-ION INDUSTRY

Note: Automotive Energy Supply Corporation (AESC) is a joint venture between NEC Corp (50%) and Nissan Motor

Co Ltd (50%). Lithium Energy Japan (LEJ) a joint venture of GS Yuasa (51%), Mitsubishi Corporation (34%), and

Mitsubishi Motors (15%). Blue Energy is a joint venture between Honda Motor Co Ltd (49%) and GS Yuasa Corp

(51%). Deutsche Accumotive is owned by Daimler (90%) and Evonik (10%). Source: Bloomberg New Energy Finance

MARKET SHARE OF LI-ION EV BATTERY

PACK PRODUCTION

END-USE APPLICATION OF LITHIUM-ION

BATTERIES


42%

22%

13%

6%

6%

5%

4%

1%

1%

0%

Panasonic

AESC

LG Chem

LEJ

BYD

Samsung SDI

Blue Energy

Deutsche Accumotive

Bollore

A123 Systems

2% 5% 9% 13% 15%

98% 95% 91% 87% 85%

2010 2011 2012 2013 2014

Consumer electronics

EVs and stationary energy

12


APPLICATION MIX OF ANNOUNCED ENERGY STORAGE PROJECTS (% BY MW)



13

CUMULATIVE INSTALLED ENERGY STORAGE CAPACITY, BY APPLICATION, 2013-20 (GW)



● Generation, transmission and

distribution-level applications

will dominate to 2018

● From 2018 onwards the end-

user segments start to grow in

size at a significant rate as

payback periods for end-user

systems start to make

economic sense

● Power-intensive systems

account for 40% of the total in

2020, and energy-intensive

systems 60%

Growing from virtually zero, end-user applications will account for 42% of the total

installed capacity by 2020, the larger than generation and T&D applications

Note: E is short for Energy and P is short for Power.

0.4 0.4 0.4 0.5 0.6 0.7 0.8 1.00.5 0.60.8 1.0

1.41.8

0.3 0.40.5

0.7

0.8

1.1

0.5

0.7

1.0

0.4

0.5

0.5

0.6

0.7

0.3

0.5

0.4

0.8

1.7

0.6

1.1

2.2

0.2

0.5

1.1

0.1

1.21.5

2.0

2.6

3.6

4.8

7.1

11.3

2013 2014 2015 2016 2017 2018 2019 2020

Island microgrid

End-user - P

Residential enduser - E

Commercial enduser - E

Distribution - P

Distribution - E

Transmission - P

Transmission - E

Generation - P

Generation - E

14

CUMULATIVE INSTALLED ENERGY STORAGE CAPACITY, BY APPLICATION, 2013-20 (GWh)



● Energy-intensive applications

account for around 86% of total

capacity in 2020

● Residential end-user

applications will become the

largest sector by 2018

● 52% of storage capacity will sit

behind-the-meter in 2020

In MWh-terms, the end-user applications take an even larger share at 52%

Note: E is short for Energy and P is short for Power.

1.7 1.7 1.8 2.0 2.5 2.7 3.1 4.00.5 0.60.8 1.0

1.41.8

1.3 1.62.0

2.63.4

4.4

0.5

0.7

1.0

1.41.6

1.82.1

2.4

3.0

0.2

0.3

0.5

1.6

3.1

6.7

2.4

4.5

8.7

1.1

3.94.6

5.8

7.4

9.9

13.4

19.7

31.8

2013 2014 2015 2016 2017 2018 2019 2020

Island microgrid

End-user - P

Residential enduser - E

Commercial enduser - E

Distribution - P

Distribution - E

Transmission - P

Transmission - E

Generation - P

Generation - E

15

DRIVERS AND BARRIERS IN AUSTRALIA


TRANSMISSION

● Network augmentation

deferral

● Regulatory complexities

DISTRIBUTION

● Network augmentation deferral

● Heavily scrutinised investments

● Increasing small-scale PV

penetration

RESIDENTIAL END-USER

● Highly affordable rooftop PV

● Highly competitive retail market

● Improving economics & consumer demand

RE INTEGRATION

● Accurate short-term forecasting

● Shallow ancillary services markets

● Low large-scale RE penetration

● Projects not exposed to market

prices and conditions

GENERATION

● Oversupplied wholesale market

● Short dispatch intervals

● Shallow ancillary services market

ISLAND & MICRO-GRID

● Strong economics

● Risk mitigation

● Niche market

COMMERCIAL END-USER

● Affordable rooftop PV

● Reduced energy & power charges

16

Note: Total values include estimates for undisclosed deals. Source: Bloomberg New Energy Finance

NEW INVESTMENT IN CLEAN ENERGY IN AUSTRALIA, 2004-14 (AUD BN)

0.7

1.5 1.8

1.4 1.1

1.3

2.7

0.8 1.1

2.0

0.3

0.1

0.1

0.1

0.2 0.3

0.8

2.4

4.7

3.3 2.1

2.3

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Large-scale Small-scale


17

FORECAST PV SYSTEM CONNECTIONS IN AUSTRALIA, 2014-30


CAPACITY ADDITIONS BY SECTOR

ANNUAL (MW) CUMULATIVE (GW)

CONNECTIONS BY SECTOR

ANNUAL (THOUSAND) CUMULATIVE (MILLION)

0

1

2

3

4

5

6

0

50

100

150

200

250

300

2014 2018 2022 2026 2030

Commercial annualResidential annualResidential cumulativeCommercial cumulative

0

4

8

12

16

20

0

300

600

900

1,200

1,500

2014 2018 2022 2026 2030

Commercial annual

Residential annual

Residential cumulative

Commercial cumulative


18

ARRIVAL OF THE HEAVY-WEIGHTS

Note: data displayed for NEM-connected generators and electricity customers only (not natural gas).

EnergyAustralia data displayed for calendar year ending in noted financial year (due to reporting

inconsistencies). Source: Bloomberg New Energy Finance, Company filings.

NEM RETAIL MARKET SHARE, FY2014 CUMULATIVE MARKET SHARE OF

INSTALLED SMALL-SCALE PV


0.8% 0.3%

5.9%

93%

Origin Energy Other

1.3 million

24%

19%

30%

26%

AGL Energy EnergyAustralia

9.5 million

19

AGL Energy EnergyAustralia Origin Energy

Watch this space

Manufacturer AU Optronics Enphase Energy

Series PowerLegato AC Battery

Technology Lithium-ion LiFePO4

Energy capacity 7.2kWh 1.2kWh

Power capacity 3kW 275W/550W

Product launch mid-2015 early-2016 late-2015

Source: Manufacturers websites


STORAGE PRODUCT PARTNERSHIPS OF AUSTRALIAN UTILITIES

20

Source: Manufacturers websites


AUSTRALIA IS SEEN AS A KEY MARKET

21

Note: Current price is derived from market surveys in Australia, Europe and USA. System prices are exclusive of

local taxes. Local prices assume Australian energy storage is not subject to a regional premium/discount. Source: Bloomberg New Energy Finance

PROJECTED RESIDENTIAL ENERGY STORAGE COST (NOMINAL)

International benchmark

price (USD/Wh)


2.29

1.62

1.18

0.95

1.82

1.20

0.84 0.67

2015 2020 2025 2030

Local price (AUD/Wh)

22

Note: Current price is derived from market surveys in Australia, Europe and USA . System prices are exclusive of

local taxes . Local prices assume Australian energy storage is not subject to a regional premium/discount. Source: Bloomberg New Energy Finance



price (USD/Wh)


0.54

2.29

1.62

1.18

0.95

1.82

1.20

0.84

0.67

0.43

Tesla BNEF 2020 2025 2030

2015


-76%

23





price (USD/Wh)


0.43

0.12

0.32

1.10

2.29

1.62

1.18

0.95

1.82

1.20

0.84

0.67

0.88

Tesla BNEF 2020 2025 2030

2015

Installation

Inverter

System price


-52%

24




0.62 0.41

0.28 0.23

0.12

0.10 0.09

0.09

1.08

0.69

0.46 0.36

0.43

0.12

0.32

1.10

2.29

1.62

1.18

0.95

1.82

1.20

0.84

0.67

0.88

Tesla BNEF 2020 2025 2030

2015

Balance of system &installationInverter

Li-ion battery pack


price (USD/Wh)



-52%

25

PAYBACK PERIOD OF 4KW PV + VARIOUS EUS CONFIGURATIONS IN QUEENSLAND (YEARS)

Note: Chart shows national average pay-back period. Source: Bloomberg New Energy Finance

6 Historical PV

9 No storage 9 9 9

10 1kWh 9

15

3kWh

18 5kWh

24

10kWh

18

13

11

0

5

10

15

20

25

30

2010 2015 2020 2025 2030


26

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AUSTRALIA AND GLOBAL OUTLOOK FOR ENERGY STORAGE … · Source: Bloomberg New Energy Finance AUSTRALIA AND GLOBAL OUTLOOK FOR ENERGY STORAGE DEPLOYMENT | Sydney | 3 June 2015 11.3GW