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Ernst & Young’s global cleantech center
July 2012
Stakeholders
Leverage cleantech as part of the national strategy
Create jobs
Drive innovation
Develop local industries
Ensure energy security
Optimize energy mix
Improve the environment
External Agenda
Grow revenues
Meet consumer demand for greener products
Enter new markets
Enhance innovation
Internal Agenda
Improve operational efficiency to reduce cost
Optimize energy mix
Achieve internal sustainability objectives
Government
Corporate
Investors Reduce risk Increase value
Consumers Greener products Cost Performance
Employees Growth Stability Community Environmental
Cha
nge
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O
ppor
tuni
ties
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R
isks
► ► ► Capital ► Innovation ► Transparent Information ► ► ►
Finance • >$260b in global investments in 2011– record year! • Growing number of IPOs – mainly China wind and solar (e.g.,
Sinovel - $1.4B, Huaneng - $850M); also US biofuels (e.g., Solazyme - $227M, Gevo - $123M)
• Continuous progress on cost reduction
Corporate activity • Increased M&A activity
• >227 M&A deals in 2011 • Increased acquisitions by Japanese and Korean
corporations • R&D / Business development by Chinese companies in
developed and developing markets • New partnerships models
• EY’s Corporate Cleantech study • Cleantech investments in 2011:
• 34%: 2%-3% of annual revenue • 21%: 3%-5% of annual revenue
• 74% will increase cleantech investments in the next 5 years
• Corporations anticipate to do more “leading edge” cleantech acquisitions
Government involvement • Next wave of increased cleantech allocations in selected
government stimulus plans and 5-year plans • Global cleantech “arms race” to capture innovation, ensure
energy security and create competitive advantage • Austerity-based policies in certain countries have resulted
in withdrawal of government commitments
Outcomes
Megatrends • Evolving energy mix • Clean energy as a national competitive advantage • Corporate growth strategies based on cleantech • Corporate energy mix strategy development • Cleantech growth in emerging markets • Global electric vehicle (EV) adoption • Energy-water-food nexus Market indicators • $1T invested in cleantech since 2004 (BNEF) • 435 pure-play public cleantech companies (BNEF) • US market for prof. services in wind and solar is $91m-
$156m / year through 2016 (BNEF) • Robust IPO pipeline -25% of US IPO pipeline • $1.7T - $2.3T investment in clean power assets by 2020
(Pew) • Accelerated corporate activity (drivers: innovation, new
markets, consolidation) • New multi-billion market cap industry leaders • Capital: new players (e.g. SWFs), new business models,
new roles (e.g. Chief Capital Officer) Current dynamics • Falling solar prices are accelerating competitiveness and
deployment—record $137b invested in solar in 2011 (BNEF)
• With austerity in the US and Europe, emerging markets are the growth opportunity; companies must grow beyond.
• China’s 12th 5-Year Plan: 5 of 7 strategic industries are cleantech related
• Strong growth in smart energy—$298b global revenues projected for 2012 (Pike Research)
• Ramp-up in EV production; enabling business models • Cleantech stakeholder strategy formulation in water
Powerful drivers have caused a transformational change
The transformation has generated reactions, activity and initiatives by corporations, governments and corporate stakeholders that are significantly linked and have critical dependencies
This has created change and generated opportunities but also raised new risks and challenges
The outcome is significant and those that will not take action, can find themselves at disadvantage
Cleantech has become a growing strategic imperative.
A global transformation in the way natural resources, including energy and water, are produced, distributed, stored, managed and consumed
Resource-efficient and low carbon economy
Growing world population
Increase awareness for sustainability strategy
Increasing middle class consuming power in BRICs
Acceleration of urbanization
Natural resource scarcity
Energy security concerns
Rising energy and commodity prices
Business response to climate change
The resource and low-carbon transformation
Cleantech: new energy and resource efficiency
► Energy
► Bioenergy
► Geothermal
► Hydro energy
► Marine energy
► Solar energy
► Wind energy
► Water
► Waste to energy
► Other supply
Supply (resources) Demand
► Energy efficiency
► Industrial applications
► Residential applications
► LED
► Energy storage
► Electric vehicles
► Smart grid / smart meters
► Water
► Monitoring and management systems
► Prevention and detection
► Advanced materials
► Other demand technologies
Definition: A diverse range of innovative products and services that optimize the use of natural resources or reduce the negative environmental impact of their use while creating value by lowering costs, improving efficiency, or providing superior performance.
Cleantech represents the technology and business model innovation that enables the transformation to a more resource efficient and low carbon economy.
CleantechReal
estate Automotive
Industrials
Power and utilities
Oil & gas
Technology
Government
Consumer Products
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Ernst & Young has been serving cleantech companies and the sector for over 20 years. With the recent increased focus on the technologies and business models and rapidly expanding global investments, the firm chose to make a differential investment in the sector with the launch of the Global Cleantech Center in 2010 and the strategic global coordination of our sector focused services and people.
Emerging innovators through global corporates choose Ernst & Young because they value our sector-based approach to addressing their assurance, tax, transaction and advisory needs.
What gives us a unique perspective and point-of-view in this expanding global market is our commitment and investment to this sector - demonstrated by our Cleantech Center and global network with the experience and skills to serve our clients today.
Ernst & Young’s global cleantech center Launched in 2010
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John de Yonge Director, Account Enablement New York Telephone: +1 201 872 1632 Email: [email protected]
Scott Sarazen Global Cleantech Markets Leader Boston Telephone: +1 617 585 3524 Email: [email protected]
Gil Forer Global Cleantech Leader New York Telephone: +1 212 773 0335 Email: [email protected]
Robert Seiter Cleantech Leader – EMEIA Berlin Telephone: +49 30 25471 21415 Email: [email protected]
Paul Go Cleantech Leader – Asia Pacific Beijing Telephone: +86 10 58153688 Email: [email protected]
Jay Spencer Cleantech Leader – Americas Boston Telephone: +1 617 585 1882 Email: [email protected]
Paul Naumoff Global Cleantech and CCaSS Tax Leader Columbus, OH, USA Telephone: +1 614 232 7142 Email: [email protected]
Ben Warren Global Cleantech TAS Leader London Telephone: +44 20 7951 6024 Email: [email protected]
Global center team Area leaders Service line leaders
Heather Sibley Global Cleantech Assurance Leader San Francisco Telephone: +1 415 894 8032 Email: [email protected]
Ernst & Young’s global cleantech team Center, Area and Service Line leadership
Cleantech market segments Client attributes
Segment Attributes
Innovators
Developers
Investors
• New energy and resource efficiency • Technologies, products & business models • R&D focus • VC/PE backed • Private & public
• Renewable energy projects • Operate as utility – power contracts • Specialized financing • Developers & long term operators
• VC / PE • Project finance • Banks • Corporates & Governments
Governments Advisory role only • Global governmental bodies • Global governmental agencies • Public/private partnerships
Corporates Three major strategic approaches 1. Leverage core competencies 2. Transformation 3. New products/markets/models
The four major sector mega-trends driving behavior include: • Corporate focus on cleantech revenue opportunities • Corporate energy mix strategy development • Cleantech market growth driven by emerging markets • Capital agenda - falling renewable equipment prices and falling energy costs alter
economics and drive competition and consolidation
These mega-trends are resulting in the following issues in the sector segments:
Capital raising Capital efficiency Alliances & JVs
Accessing incentives Going public Globalization
Global competition
Innovators
Capital raising Capital efficiency Competition for
PPAs Accessing incentives
Operating efficiencies
Developers
Exits New capital sources Accessing incentives Portfolio efficiencies
Investors Corporates
Public-private partnerships
Governments
Resource efficiencies Sustainability
Optimization of energy mix Strategic
investments
Cleantech market segments Business issues driven by global mega-trends
In partnership with other global industry centers and service lines, we are identifying key emerging and expanding business issues that will drive the global cleantech economy and create market opportunities for Ernst & Young and our clients.
Electric Vehicles Battery-powered electric vehicles (EV) are poised to change the social, political and economic landscape – while also transforming existing vehicle manufacturers and creating new businesses and business models. In partnership with the EY’s Global Automotive and Global Power & Utilities Centers, the Global Cleantech Center is exploring this new emerging ecosystem.
Smart Grid Together with Ernst & Young’s Power and Utilities network, we are helping our clients understand the implications of the power transmission efficiency and Smart Grid, and plot their strategies accordingly.
Chief Capital Officer Just as the world thirsts for clean energy, companies are striving to provide for their thirst for capital. In conjunction with the Global TAS Capital Agenda initiative, the GCC is examining the need for early stage companies to focus on these specialized skills.
Growing beyond: accessing global markets While emerging companies need EY’s perspective and knowledge to help them globalize we also have identified the need of key global organizations to transform their operations in a manner that allows them to enter emerging markets to both capitalize on market opportunities while also access key domestically developed technologies.
Water technologies In both emerging and western geographies, the demand for water is increasing at rates that cannot be satisfied with existing systems and sources – globally, the demand for potable water is expected to double in the next 20 years. From investors to global corporations, new technologies and businesses are being created to address this global opportunity.
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CleantechReal
estate
Power and utilities
Oil & gas
Technology
Government
Consumer Products
Emerging and expanding cleantech issues Identifying future growth opportunities
Seizing transformational opportunities: Global cleantech insights and trends report ► The annual cleantech report provides a global perspective of trends in the cleantech marketplace supported by
analysis from the firm's various SMEs in addition to noted industry experts.
Tracking global trends: How six key developments are shaping the business world ► This informative report, produced annually by Ernst & Young, highlights the complexity of the interlocking systems
that shape today's economic and social environments, focused on six major emerging sectors - notably, cleantech.
Do you need a chief capital officer? How to meet the financing challenges of capital-intensive cleantech companies ► Our recommendation for emerging cleantech companies to consider the creation of a new senior leadership role:
the Chief Capital Officer.
Cleantech Matters - The electrification of transportation: from vision to reality ► The report from our annual Cleantech Ignition Sessions which convene industry players from around the world to
discuss trends in electrification of vehicles.
Growing beyond: the cleantech growth journey from product development to market leadership ► The report summarizing the insights from our first annual cleantech CEO retreat.
Renewable Energy Country Attractiveness Indices ► . Our quarterly report ranking national renewable energy markets and their suitability for individual technologies.
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Global cleantech thought leadership - publications
These single frames demonstrate the growing role of cleantech in the national strategies of these countries and the growth potential of cleantech over the next decade in selected markets, including:
►Brazil ►China ►India ►Kingdom of Saudi Arabia ►United Arab Emirates ►S. Korea
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Global cleantech thought leadership – emerging market analysis
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These insightful tools are designed to foster rich discussions not only with innovators but also with corporations, investors and other stakeholders.
Solar value chain ► Provides perspective on the size of the solar industry, its complexity and its global
nature.
Smart grid value chain ► Identifies the industry participants that come together to provide clean energy
delivery.
Electric vehicles value chain ► A detailed Electric Vehicle value chain illustration highlighting selected global
companies involved at each stage of EV production
Global cleantech thought leadership – value chains
Events for 2012/13 include:
►ARPA-E Energy Innovation Summit Washington, DC
27 – 29 February 2012
►2012 Ernst & Young Global Cleantech Ignition Series – Expanding the EV experience Los Angeles, 7 May 2012 Brussels, 18 June 2012
►Aspen Institute Aspen, CO 12-15 July 2012
►Second Annual Ernst & Young Cleantech CEO Summit, Napa Valley, CA 10-11 September 2012
►Ernst & Young Strategic Growth Forum Palm Springs, CA 14-18 November 2012
►World Future Energy Summit Abu Dhabi 15 -17 January 2013
►Bloomberg New Energy Finance Summit New York 19 – 21 March 2013
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Global cleantech events
Ernst & Young Global Cleantech Center leadership network
John de Yonge Dir., Account Enablement New York +1 201 872 1632 [email protected]
Paul Go Greater China Leader Beijing +86 10 58153688 [email protected]
Ben Warren Global Cleantech TAS Leader London +44 20 7951 6024 [email protected]
Gil Forer Global Leader New York +1 212 773 0335 [email protected]
Jay Spencer Americas Leader Boston +1 617 585 1882 [email protected]
Robert Seiter EMEIA Leader Berlin +49 30 25471 21415 [email protected]
Ernst & Young
Assurance | Tax | Transactions | Advisory
About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com
How Ernst & Young's Global Cleantech Center can help your business From start-ups to large corporations and national governments, organizations worldwide are embracing cleantech as a means of growth, efficiency, sustainability and competitive advantage. As cleantech enables a variety of industries, old and new, to transform and participate in a more resource-efficient and low-carbon economy, we see innovation in technology, business models, financing mechanisms, cross-industry partnerships and corporate adoption. Ernst & Young’s Global Cleantech Center offers you a worldwide team of professionals in assurance, tax, transaction and advisory services who understand the business dynamics of cleantech. We have the experience to help you make the most of opportunities in this marketplace, and address any challenges. Whichever sector or market you’re in, we can provide the insights you need to realize the benefits of cleantech.
Scott Sarazen Global Markets Leader Boston +1 617 585 3524 [email protected]
Paul Naumoff Global Cleantech and CCaSS Tax Leader Columbus +1 614 232 7142 [email protected] Heather Sibley Global Cleantech Assurance Leader San Francisco +1 415 894 8032 [email protected]
