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Strong growth brings opportunities, challenges - the global outlook for renewables and storage
Jenny Chase
September 26, 2017
1 September 26, 2017
●Solar and wind are being adopted faster, and getting cheaper, even than previously expected.
●Governments have moved towards auctions as a way to control rapid adoption, and this and technology gains have driven down prices.
●Electric vehicle sales are increasing, although electricity storage is still mainly for non-energy applications.
●A few countries are beginning to see adverse effects of high renewables penetration, but this represents investment opportunities as well as problems.
Key points
2 September 26, 2017
Forecasting PV installations –growth is hard to predict!
-
20
40
60
80
100
120
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
4Q 2008 forecast
2Q 2010 forecast
2Q 2013 forecast
2Q 2012 forecast
2Q 2015forecast
4Q 2016forecast
3Q 2017 -correct historicals, andforecast
GW
Source: Bloomberg New Energy Finance
3 September 26, 2017
Source: Bloomberg New Energy Finance
PV module efficiencies – historical and forecast
15.8%16.3%
16.7%17.1%
17.6%18.3%
20.40%
15.4% 15.7%16.0%16.1%
16.5%16.7%
20.40%
0%
5%
10%
15%
20%
2012
2013
2014
2015
2016
2017E
2018E
2019E
2020E
2021E
2022E
2023E
2024E
2025E
Mono Multi
Expected 2025 average module efficiency
4 September 26, 2017
Evolution of wind turbine heights and output
202520152000 2005 20101995199019th C
300m
200m
100m
1-12kW0.5 MW
1.2 MW2 MW
4 MW
7 MW 9 MW
13-15 MW
Sources: Various; Bloomberg New Energy Finance
5 September 26, 2017
Source: Bloomberg New Energy Finance
PV auction bids by commissioning date (2016 $/MWh) for Europe, Middle East and Africa
BNEF EMEA LCOE forecast range
France IaFrance IbGermany I Germany IVGermany II
Germany III Germany VJordan II
Jordan I
Saudi ArabiaSouth Africa III South Africa IV
UAE 2015
UK CfD
Zambia I
Zambia II
020406080
100120140160
2016 2017 2018 2019 2020
UAE 2016 phase I-III
6 September 26, 2017
Source: Hindu Business Line, Bloomberg New Energy Finance
● Indian developers expected 25-27 cents per W for modules delivered in 4Q 2017, and bid accordingly in tenders
● A very minor uptick in prices is being heralded as a major problem
● Generally, auctions encourage developers to make very ambitious bids. Historically these have been a good bet as technology costs have dropped faster than expected. Will this continue?
● Brazil has also held an auction to cancel planned projects, in which projects bid in 2015 and 2016 competed to pay the lowest possible penalties.
Are all auction prices realistic?
7 September 26, 2017
Note: Excludes large hydro Source: Bloomberg New Energy Finance
Renewable energy proportion of power generation, 2006-16
Lowest
Mid
Highest
No data
13%
30%Spain
3%12%
Australia
6%18%
Brazil
5% 6%
Canada
6% 10%
China
9%
29%Germany2%
25%UK
4% 6%
India12%
25%
Italy7%
12%
Japan
3% 9%
US
1% 3%
South Africa
8 September 26, 2017
Source: Bloomberg New Energy Finance, various
High renewable penetrations
9 July 2015Denmark
140% wind
May 2016Germany
67% wind & solar
25 December 2016
Scotland153% wind
23 March 2017CAISO
46% wind & solar
9 April 2017UK 56%
wind & solar
13 February 2017SPP
52% wind
26 December 2014
South Australia61% wind & solarNovember
2015Spain
70% windNovember 2017ERCOT
45% wind
9 September 26, 2017
Source: Bloomberg New Energy Finance, Bloomberg Terminal functions ISO<GO>, WATT<GO>.
Notes: The relative value of solar and gas stems from ‘realized power price’ analysis, calculated by pairing hour-by-hour production profiles (reported by the California ISO) with hourly, Real-Time prices in Southern California, at SP15 Hub.
Relative value of PV versus gas-fired generation, California spot market
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
2011 2012 2013 2014 2015 2016
Gas
Solar
Around-the-clock (ATC) average
Solar production (midday power prices) used to be more valuable than around-the-clock averages;
By 2016, the value of solar had fallen well below around-the-clock averages, and well below gas.
$34/MWh
$24/MWh
10 September 26, 2017
Bloomberg New Energy Finance Note: includes highway-capable passenger vehicles only. Excludes low speed EVs, buses or other commercial vehicles.
Global EV sales by country
36 114 283
56 96 116 115
158
16 42
84
177
213
122 206
288
448
695
0100200300400500600700800
2012 2013 2014 2015 2016
thousand
Rest of world
Europe
Japan
US
China
11 September 26, 2017
Bloomberg New Energy Finance Note: Prices are an average of BEV and PHEV batteries and include both cell and pack costs. Cell costs alone will be lower. Historical prices are nominal, future ones are in real 2016 U.S. dollars.
Lithium-ion battery prices, historical and forecast
0
100
200
300
400
500
600
700
800
900
1,000
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
BNEFobservedvalues
19%learning rate
BNEF observed values: annual lithium-ion battery price index2010-16.
2030 average lithium-ionbattery price:$73/kWh
2025 average lithium-ion battery price:$109/kWh
$/kWh
Introduction
12 September 26, 2017
0 50 100 150 200 250 300 350
Small vans
Runabouts
Hatchbacks
Sedans
Sports cars
SUVs/Trucks
Venturi Fetish Tesla Roadster
20082009Mitsubishi i-MiEV
BMW mini e
Smith Edison
2010Ford Transit
M-B E-CellHyundaiBlueOn
Nissan Leaf
Kia Ray
2011
Ford Focus
Renault KangooM-B Vito
BYD e6
Renault Fluence
2012Renault TwizySmart ForTwo
Fiat 500e
Renault Zoe ZE
Tesla Model S
ToyotaRAV4
Honda Fit
CODA EV
2013Peugeot Partner
Exagon Furtive
M-B SLS eDrive
BMW i3
Chevy Spark
Mahindra e2o
VWe-Up
2014
VW e-Golf
Nissan NV200
M-B B-Class
JAC iEV4
2015Kandi Panda BolloreBluesummer
Mullen 700eChangAn
Eado
2016
Chevy Bolt
Audi R8 E-tron
BYD T3
Mahindra eVerito
2017
Qianto Q50
Aston MartinRapidE
Tesla Model 3
Hyundai Ioniq
2018
Land RoverDefender
Honda Clarity
2019
Porsche E-sport
M-B EQ
JaguarI-Pace
Mitsubishi eX
2020
Tesla Roadster
GLM G4
VW e-Bulli
BAIC EU260
Geely Emgrand
NIO ES9
Audi E-tronSportback
VW I.D.
VW I.D. CROZZ
NIO ES8*
Tesla Roadster*
ChangAn EM80VW I.D. BUZZ
Renault DeZir
TrumpchiGS4
SAIC E-Lavida
TataIRIS
VW I.D.*
Audi E-tronQuattro
TeslaModel Y*
BYD e5
Volvo 40.2*
Teslapickup*
Nissan Leaf 2*
Lucid Air
+
FaradayFF91
NIO EVELeEco LeSEE
ChehejiaSUV*
BMW i5
Seat Mii*
TeslaModel XVW
Budd-e
EV model availability 2008-20
Source: Bloomberg New Energy Finance, Images various. Notes: Not exhaustive. (*) Range is speculated.
13 September 26, 2017
How U.S. batteries are used% of capacity (MW) engaged in each activity, 2016 fleet
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
RenewableIntegration
AncillaryServices
EnergyArbitrage
Backup
ResourceAdequacy
Stabilises power prices
Stabilises power prices
14 September 26, 2017
China U.S.
Tipping point 1: new vs new
Utility-scale PV
Coal
Onshore wind
CCGT
0
20
40
60
80
100
120
140
160
180
2017 2020 2025 2030 2035 2040
$/MWh (real 2016)
Utility-scale PV
Coal
Onshore wind
CCGT
0
20
40
60
80
100
120
2017 2020 2025 2030 2035 2040
$/MWh (real 2016)
Source: Bloomberg New Energy Finance, NEO 2017
15 September 26, 2017
Germany China
Tipping point 2: new vs existing
Utility-scale PV
Coal
Onshore wind
CCGT
0
20
40
60
80
100
120
2017 2020 2025 2030 2035 2040
$/MWh (real 2016)
Utility-scale PV
Coal
Onshore wind
CCGT
0102030405060708090
100
2017 2020 2025 2030 2035 2040
$/MWh (real 2016)
Source: Bloomberg New Energy Finance, NEO 2017
16 September 26, 2017
Solar and wind dominate the future of electricity
Coal30%
Gas24%
Oil6%
Nuclear5%
Hydro17%
Onshore wind7%
Utility-scale PV3%
Small-scale PV2%
6,719GW
Coal13%
Gas14%
Nuclear3%
Hydro12%
Onshore wind14%
Utility-scale PV
22%
Small-scale PV
10%
13,919GW
Flexible capacity
Global cumulative installed capacity: 2016 Global cumulative installed capacity: 2040
Source: Bloomberg New Energy Finance, NEO 2017
17 September 26, 2017
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Jenny Chase