Financing Universal Access to Energy

Financing Universal Access to EnergyWhere we are, and where we need to go

Itamar Orlandi, CFA

October 31, 2018

1 October 31, 2018

The Bloomberg NEF ("BNEF"), service/information is derived from selected public sources. Bloomberg Finance L.P. and its affil iates, in providing the

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2 October 31, 2018

Clean Energy Advanced Transport

Commodities Emerging Technologies

Solar Wind Storage Impact on

Power &

Utilities

Frontier

Power

Electrified

Transport

Autonomous

Driving

Shared

Mobility

Impact on

Transport

Impact on oil

demand

LNG &

Gas

Oil &

Products

Power

Decentralized

Energy

Internet of

Things

Machine

Learning &

Analytics

Impact on

Industrials

and Energy

Carbon Advanced

Materials

About Bloomberg New Energy Finance

3 October 31, 2018

Source: Bloomberg New Energy Finance

Global population by electricity access status

5,225 5,4806,350

519609

608750

819

462

2005 2010 2016

Million people

Off-grid in Asia and rest of theworld

Off-grid Africa

Connected

4 October 31, 2018

Source: Bloomberg New Energy Finance, World Bank

Economic development on its own will not solve this

96%

85%

85%

68%

66%

60%

26%

53%

49%

27%

23%

19%

Vietnam (2011)

Bangladesh (2015)

Pakistan (20008)

India (2006)

Lao PDR (2006)

Cambodia (2016)

Myanmar (2005)

Senegal (2003)

Ghana (2004)

Kenya (2012)

Mauritania (2002)

Zambia (2010)

Electrification rate (%)

Asia Africa

Electrification rates when reaching $1,000 GDP per capita

5 October 31, 2018

Source: Bloomberg NEF, India’s Ministry of Power

India's quarterly rural household electrification

0.2 0.9 1.3 0.8

3.23.9

9.2

1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 Target

Million households

6 October 31, 2018

Source: Bloomberg NEF, India’s Ministry of Power

India's quarterly rural household electrification

0.2 0.9 1.3 0.8

3.23.9

9.2

1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 Target

Million households

7 October 31, 2018

Cost of delivered energy for rural customers

Cost of delivered energy

0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)

Retail tariffs + grid extension Retail tariffsMicrogrid Microgrid with daytime load

8 October 31, 2018



0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)


• Grid extensions more than double

the cost of electricity

9 October 31, 2018



0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)




• Microgrids are competitive with the

grid

10 October 31, 2018



0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)





grid

• Productive loads reduce the cost of

microgrid electricity

11 October 31, 2018



0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)





grid



0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)

SHS SHS - Efficiency Adjusted Stand alone diesel

12 October 31, 2018



0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)





grid



• Solar home systems need super-

efficient appliances0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)


13 October 31, 2018

Source: Bloomberg NEF

Distribution makes up the majority of costs

174

150

118

9583

0

20

40

60

80

100

120

140

160

180

200

2014 2016 2020 2025 2030

Evolution of the typical cost per system ($)

Distribution

Hardware

14 October 31, 2018



0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)





grid



• Solar home systems need super-

efficient appliances0.0

0.5

1.0

1.5

2.0

2017 2020 2030

$/kWh (real 2017)


15 October 31, 2018

Source: Bloomberg New Energy Finance. Note: East Africa refers to the six countries of the East African Community. Numbers may not add up due to

rounding.

Africa will spend the most on off-grid solutions

$ billion

11

10

1233

12

12

4

28

28

4

6

39

25

1 1

27

1

0.41.4 3

2.4

0.20.3

3

2

10

1

14

Americas

West Africa

Rest of Africa

East Africa

South Asia

Southeast Asia

Rest of the world

Middle East & North Africa

2

0.10.2

3

Projected household electrification capital spend, base case scenario 2018-

30

16 October 31, 2018


The gap to universal access remains overarching

8238

26 16 162

191 353

Gridextensions

Microgrid Solar homesystems

On-gridpower

generation

Base casescenario

Gap Universalaccess toelectricity

$ billion

17 October 31, 2018

Source: Bloomberg NEF. Microgrid financing refers to rural microgrids for energy access only. *YTD as of October 2018

Venture financing rose steadily

19

60

180

280

381

308

2013 2014 2015 2016 2017 2018 YTD

$ million

Microgrids

Solar kits(SHS andlanterns)

18 October 31, 2018

Source: Bloomberg NEF. Microgrid financing refers to rural microgrids for energy access only. *YTD as of October 2018

Venture financing rose steadily, but is that sustainable?

19

60

180

280

381

308

2013 2014 2015 2016 2017 2018 YTD

$ million

Microgrids

Solar kits(SHS andlanterns)

19 October 31, 2018


European energy majors are investing in energy access

20 October 31, 2018

There is a lot of potential for cross-sector partnerships

+ + =Micro health

insurance

$2.4/month smartphone plans+ + =

WiFi – enabled kiosks with

cold drinks+ + =

++ + Pay-as-you-go trial=

Pay-as-you-go 24”

satellite TV+ =Source: Bloomberg New Energy Finance

21 October 31, 2018

Source: Bloomberg New Energy Finance, Facebook

Potential alternatives for last-mile connectivity

Cell Tower

Grid or solar hybrid

(1,500 – 3,000 Watts)

Small Cell Antenna

Solar

(50-100 Watts)

Wifi Hotspot

Solar

(50-100 Watts)

22 October 31, 2018

Microgrid dispatch profile with an

evening peak…

Developing countries are only starting to adopt mobile data

0

20

40

60

80

100

120

140

0 2 4 6 8 10 12 14 16 18 20 22 Hours of the day

Supply (kW)

Charge

Diesel

PV

Discharge

Demand

Source: Bloomberg New Energy Finance.

23 October 31, 2018

Microgrid dispatch profile with an

evening peak…

…and with added midday

demand

Developing countries are only starting to adopt mobile data

0

20

40

60

80

100

120

140

0 2 4 6 8 10 12 14 16 18 20 22 Hours of the day

Supply (kW)

Charge

Diesel

PV

Discharge

Demand

0

20

40

60

80

100

120

140

0 2 4 6 8 10 12 14 16 18 20 22 Hours of the day

Supply (kW)

Charge

Diesel

PV

Discharge

Demand

Source: Bloomberg New Energy Finance.

~ 27% LCOE reduction

due to increased share

of PV

24 October 31, 2018

The Bloomberg NEF ("BNEF"), service/information is derived from selected public sources. Bloomberg Finance L.P. and its affil iates, in providing the

service/information, believe that the information it uses comes from reliable sources, but do not guarantee the accuracy or completeness of this information, which is

subject to change without notice, and nothing in this document shall be construed as such a guarantee. The statements in this service/document reflect the current

judgment of the authors of the relevant articles or features, and do not necessarily reflect the opinion of Bloomberg Finance L.P., Bloomberg L.P. or any of their

affiliates (“Bloomberg”). Bloomberg disclaims any liability arising from use of this document, its contents and/or this service. Nothing herein shall constitute or be

construed as an offering of financial instruments or as investment advice or recommendations by Bloomberg of an investment or other strategy (e.g., whether or not

to “buy”, “sell”, or “hold” an investment). The information available through this service is not based on consideration of a subscriber’s individual circumstances and

should not be considered as information sufficient upon which to base an investment decision. You should determine on your own whether you agree with the

content. This service should not be construed as tax or accounting advice or as a service designed to facilitate any subscriber’s compliance with its tax, accounting or

other legal obligations. Employees involved in this service may hold positions in the companies mentioned in the services/information.

The data included in these materials are for illustrative purposes only. The BLOOMBERG TERMINAL service and Bloomberg data products (the “Services”) are

owned and distributed by Bloomberg Finance L.P. (“BFLP”) except that Bloomberg L.P. and its subsidiaries (“BLP”) distribute these products in Argentina, Australia

and certain jurisdictions in the Pacific islands, Bermuda, China, India, Japan, Korea and New Zealand. BLP provides BFLP with global marketing and operational

support. Certain features, functions, products and services are available only to sophisticated investors and only where permitted. BFLP, BLP and their affiliates do

not guarantee the accuracy of prices or other information in the Services. Nothing in the Services shall constitute or be construed as an offering of financial

instruments by BFLP, BLP or their affiliates, or as investment advice or recommendations by BFLP, BLP or their affiliates of an investment strategy or whether or not

to “buy”, “sell” or “hold” an investment. Information available via the Services should not be considered as information suff icient upon which to base an investment

decision. The following are trademarks and service marks of BFLP, a Delaware limited partnership, or its subsidiaries: BLOOMBERG, BLOOMBERG ANYWHERE,

BLOOMBERG MARKETS, BLOOMBERG NEWS, BLOOMBERG PROFESSIONAL, BLOOMBERG TERMINAL and BLOOMBERG.COM. Absence of any trademark

or service mark from this list does not waive Bloomberg's intellectual property rights in that that name, mark or logo. All rights reserved. © 2018 Bloomberg.

Copyright and disclaimer

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Financing Universal Access to Energy