Global trends in clean energy investment

GLOBAL TRENDS IN CLEAN ENERGY INVESMENT CLEAN ENERGY MINISTERIAL DELHI, 17 APRIL 2013 Michael Liebreich, Chief Executive Bloomberg New Energy Finance Twitter: @MLiebreich

/ / / / / / // // /// / / / / / / / / / / / / / / / / / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

TWITTER: @MLiebreich

1

GLOBAL TOTAL NEW INVESTMENT IN CLEAN ENERGY 2004–12 ($BN) 20%

-11% $302bn

$269bn 34%

$251bn

-2% 16%

$191bn

$187bn

2008

2009

45% $164bn

43% 48%

$114bn

$80bn $54bn

2004

2005

2006

2007

Note: Includes corporate and government R&D, and small distributed capacity. Adjusted for re-invested equity. Does not include proceeds from acquisition transactions

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

2010

2011

2012

Source: Bloomberg New Energy Finance

TWITTER: @MLiebreich

2

NEW INVESTMENT IN CLEAN ENERGY BY REGION 2004–12 ($BN) Europe

North America & Caribbean

108.0 97.8

63.1

75.8

70.7 73.2 58.4 41.8

40.8 39.0 28.9

40.3 36.5

27.1

28.5

18.0

14.2 7.1 2004 2005 2006 2007 2008 2009 2010 2011 2012

2004 2005 2006 2007 2008 2009 2010 2011 2012

Asia & Oceania 100.7 87.1 66.8 47.3 39.9 30.6

22.4 9.5

Central & South America

14.5

11.1 0.8

3.5

10.3

2004 2005 2006 2007 2008 2009 2010 2011 2012

Middle East & Africa

12.9

11.8

9.9 10.0

5.4

0.3

2004 2005 2006 2007 2008 2009 2010 2011 2012

15.2

0.5

1.1

1.5

2.7

4.9

1.6

4.2

2004 2005 2006 2007 2008 2009 2010 2011 2012

Note: Excludes corporate and government R&D

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

Source: Bloomberg New Energy Finance

TWITTER: @MLiebreich

3

TOP 15 COUNTRIES FOR NEW INVESTMENT IN CLEAN ENERGY IN 2012 AND % CHANGE ON 2011 ($BN) China

65.13

United States

35.58

Germany

-27%

16.28

Italy

75%

14.71

United Kingdom

-51%

8.34

India Australia

-37%

22.80

Japan

20%

-17%

6.85

-45%

6.19

40%

South Africa

5.46

20563%

Brazil

5.34

-32%

Canada

4.41

-23%

France

4.31

-34%

Belgium

4.05

11%

Greece

3.42

179%

Spain

2.95

-68%

Note: Excludes corporate and government R&D

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

Source: Bloomberg New Energy Finance

TWITTER: @MLiebreich

4

NEW INVESTMENT IN CLEAN ENERGY Q1 2004–Q1 2013 ($BN) 77.5 73.5 65.5

65.7 55.8 57.0 53.5 50.3 47.3

43.1 41.8

34.6 32.8

52.0

48.0 46.2 45.4 42.1

40.6

35.2

29.7 27.2

25.9

21.2 19.3 21.0 19.0

8.8 8.7 8.1

65.4 62.4 58.7

17.3 13.7 12.0 10.1

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2004

2005

2006

2007

2008

2009

2010

2011

2012

'13

Four quarter running average Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D. Includes small distributed capacity & adjustment for re-invested equity.

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

Source: Bloomberg New Energy Finance

TWITTER: @MLiebreich

5

NEX CLEAN ENERGY INDEX 2003 – 2013 YTD

500

NEX NASDAQ S&P 500

400

300

200

100

0 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Note: Values as of 10 April 2013; NASDAQ and S&P 500 rebased to 100 on 01 Jan 2003

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

Source: Bloomberg New Energy Finance

TWITTER: @MLiebreich

6

CLEAN VS FOSSIL-BASED GENERATING CAPACITY INVESTMENT, 2006–12 ($BN) 350

300 250

Fossil fuel

200

150 100 50 0 2006

Clean energy 2007

2008

2009

Note: Clean energy total excludes large hydro. Fossil fuel is investment on coal and gas capacity. We assume capacity retirement of 3.3%/yr for coal and 4%/yr for gas.

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

2010

2011

2012

Source: Bloomberg New Energy Finance, EIA

TWITTER: @MLiebreich

7

PV EXPERIENCE CURVE, 1976-2012 2012 $/W 100

1976

PV MODULE PRICES HAVE FALLEN 80% SINCE 2008 20% IN 2012 ALONE 1985 10 2003

2006

1

2012

2012

0.1 1

10

100

1,000

historic prices (Maycock) Chinese c-Si module prices (BNEF) First Solar thin-film module cost Note: Prices inflation indexed to US PPI.

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

10,000

100,000

experience curve Thin-film experience curve

1,000,000

MW

Source: Paul Maycock, Bloomberg New Energy Finance

TWITTER: @MLiebreich

8

DEMAND VERSUS HISTORICAL AND PROJECTED MODULE PRODUCTION (GW) 60

Current cell manufacturing capacity Historical

Future

50 40 30 20 10 2006 2007 2008 2009 Supply - crystalline silicon Supply - thin film non-silicon Demand - optimistic

2010

2011 2012 2013 2014 Supply - thin-film silicon Demand - conservative

Note: Supply scenarios based on continued 2012 utilisation rates.

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

2015

Source: Bloomberg New Energy Finance

TWITTER: @MLiebreich

9

AVERAGE LEVELISED COST OF ONSHORE WIND, 19842012 (€/MWH) WIND TURBINE PRICES HAVE FALLEN 29% SINCE 2008

500

1984 100

1990

2000 50

14%

2004

2012

10 100

1,000

10,000

Note: Learning curve (blue line) is least square regression: R2 = 0.88 and 14% learning rate.

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

100,000

1,000,000 MW

Source: Bloomberg New Energy Finance, ExTool

TWITTER: @MLiebreich

10

GRID-COMPETITIVE CLEAN ENERGY

Best Wind

New coal

Natural Gas at $6/MMBtu

=

= Source: Bloomberg New Energy Finance

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

TWITTER: @MLiebreich

11

$4.16 NATURAL GAS, USA, 16 APRIL 2013

Picture credits: Tod Baker via Creative Commons; NASA, NOAA, CERES

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

TWITTER: @MLiebreich

12

GLOBAL GAS PRICES ($/MMBTU) 20 18

Japan LNG (average)

16

14

German average import price

12 10 8

NBP spot (UK)

6

4 2

Henry Hub (US)

Mar 13

Dec 12

Sep 12

Jun 12

Mar 12

Dec 11

Sep 11

Jun 11

Mar 11

Dec 10

Sep 10

Jun 10

Mar 10

Dec 09

Sep 09

Jun 09

Mar 09

Dec 08

Sep 08

Jun 08

Mar 08

Dec 07

Sep 07

0

Source: Bloomberg New Energy Finance, Japan LNG Corp, German Federal Office of Economics and Export Control

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

TWITTER: @MLiebreich

13

SHALE GAS ‘FRACKING’ BREAKEVEN PRICE ($/MMBTU)

Wet US plays

Dry US plays

UK UK 4,250mcfd 2,100mcfd

16 April 2013 Henry Hub $4.16/MMBTU $11m D&C

UK likely shale gas price range 12.20

$8m D&C

10.72

$11m D&C

9.05

$8m D&C

7.10

Haynesville

4.83

Barnett

4.71

NE Marcellus

4.54

SW Marcellus

3.30

Eagle Ford

2.00 0

2

4

6

8

Note: Assumes 15% equity IRR. UK assumes $8m Drilling & Completion cost; 2000-4250 mcfd dry production (per Marcellus and Eagle Ford); 20% royalty rate; usual tax treatment

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

10

12

14

Source: Bloomberg New Energy Finance; Various

TWITTER: @MLiebreich

14

LITHIUM-ION BATTERY EXPERIENCE CURVE EV BATTERY PRICES HAVE FALLEN 40% SINCE 2010

Cost-competitiveness (on total ownership basis)

Source: Battery University, MIIT, IIT, Bloomberg New Energy Finance

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

TWITTER: @MLiebreich

15

NUMBERS OF SMART METERS WORLDWIDE (MILLIONS) 699

Historic Forecast 630

Rest of world

563 Japan

472 374

China

283 EU 27 201 North America

107

2010

2011

2012e 2013e 2014e 2015e 2016e 2017e Source: Bloomberg New Energy Finance

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

TWITTER: @MLiebreich

16

CAPITAL REQUIREMENT TO 2030 ($BN) 800 700 600 500 400

2 to 3x Growth in Clean Energy Investment for Peak CO2 Emissions by 2020

300 200 100 0

2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Note: Global Futures figures from 2008 restated to reflect current investment calculation methodology

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

Source: New Energy Finance Global Futures 2008, Bloomberg New Energy Finance

TWITTER: @MLiebreich

17

CROSS-BORDER INVESTMENT VOLUMES BY REGIONAL FLOW, 2004 – H1 2012 ($BN) 10x Growth to meet $100bn Copenhagen Commitment

50 45 40 35 30

North/South South/South South/North North/North

25 20 15 10 5 0 2004 2005 2006 2007 2008 2009 2010 2011

H1 2012

Note: new build asset finance for renewable energy projects only. Investment volumes show cross-border (or foreign) investments only. Domestic investments are excluded here.

/ / / / MICHAEL LIEBREICH, Delhi, 17 April 2013

Source: Bloomberg New Energy Finance

TWITTER: @MLiebreich

18

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