competitiveness and sustainability: a vision from the...
TRANSCRIPT
1
Competitiveness and sustainability: a vision from the
market
ESADE
November 2014
Rafael MateoCEO ACCIONA Energía
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Three Imperatives for a New Energy Model
According to the World Economic Forum, the new energy scheme must follow three imperatives: economic growth and development, environmental sustainability, and access to and security of supply.
Source: World Economic Forum 2014
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Renewables Are Unique in Lots of Ways
Ways that make them a key tool for a new, more sustainable energy model.
Clean
Decentralized and Local
Increasingly Competitive
Unlimited
Manageable
Highly Predictable
renewables
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Source: Ecofys, “Subsidies and costs of EU energy”. Octobre 2014. DG Energy. EU
Starting point: Renewable Energies Under Support Schemes
Source:. IEA WEO2013.
(1) Externalities include natural resources deployment, climate change, health, toxicity,..
Worldwide total subsidies$billion /year
EU costs$billion /year
Fossil fuels Renewables
544
x 5
101
123
x 3
40
Fossil fuels externalities (1) Renewables subsidies
REs development has been supported by subsidies, as other technologies have…. Those subsidies compared to the externalities avoided are low
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Renewables are not responsible for industrial electricity prices differences
Just 9% of Europe-US prices diferences due to renewable energy.
Power prices can not be compared since they do not include the same concepts acrosscountries
Industrial electricity prices by region and cost component
Notes: Network, retail and other costs are regulated and, in the case of China, reflect a cross-subsidy to households that raises the cost to industrial customers. While the US and China have renewable subsidy schemes, they are partly or fully borne by tax payers rather than reflected in the electricity tariffs.
Source: IEA analysis and data. New policies scenario.
Cost differences
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And electricity prices are not the critical issue for competitivenes
Actually, industrial processes costs represent almost 80% of total costs, so it´s impact in
competitiveness is extremely higher than the electricity one, that accounts for less than
1,5%
Electricity1,44%
Natural gas
1,52%
Labor 18%
Industrial Processes
79%
Average production costs
-26,7%-20%
+9,7%
-13,1%
Ref100% +4,1%
-4,3%
+7,3%+11,3
+2,8%
Industrial processes NG Electricity Labor
Fuente: BCG The Shifting Economics of Global Manufacturing 2014
Competitive index
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In fact, RES Generate more Local Economic Value and Jobs than CCGT
Wind power contributes more to GDP and creates 1,6 more jobs than CCGT
Source: E&Y. Analysis of the value creation potential of wind energy policies
Fiscal Returns/€1 Invested in Wind Power and CCGT in Various Countries
France Spain Germany Poland Portugal
Wind
CCGT
51
16
33
11
52
19
29
9
27
12
60
50
40
50
20
10
0
Cts
€ta
x re
turn
/ €
inve
sted
(Le
veliz
ed)
EU-27: Jobs Created/€M Invested
Wind
21
3
7
5
x 1.6
CCGT
13
3
5
5
25
20
15
10
5
0Jo
b.y
ear
/ M
inve
sted
(Le
veliz
ed)
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Looking forward: RES Costs Are Falling and Expected to Remain So
Temporary blips notwithstanding, the trend in fossil fuel costs is upwards.
Source: Bloomberg New Energy Finance.
350
300
250
200
150
100
50
0
2010 2011 2012 2013 2014
Wind onshore: -15%
CC Gas : +68%
Coal: +63%
PV: -53%
$/MWh LCOE Evolution
-35 %
-40%
Next 15 years
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Today, Wind Is Cheaper Than Coal or Nuclear, and Than Gas in Several Regions
Source: Bloomberg New Energy Finance.
Electricity Generation Costs by Technology, H1-H2 2014 (Levelized cost of electricity ($/MWh))
0%
Nuclear
140
FV
143
Coal-fired
91
CCGT
82
Onshore wind
82
+71% +74% +0%+11%Difference with onshore wind (%)
The cost of new wind projects is already lower than the cost of a new gas-fired plant, in some geographies like Europe, Australia, Brazil, India,…
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As a Consequence, Renewables Are Going to Play an Essential Role in Our Energy Future
The IEA forecasts a 33% rise in the demand for primary energy by 2035 and a 159% rise in renewable power generation, specially in emerging countries.
Primary Energy Electricity Demand
Renewable Electricity
159%
68%
33%
Source: WEO 2013. New Policies Scenario
Energy Growth, 2011-2035
7%
INDIA
OCDE
38%
24%
12%
18%
CHINA
LATAM
OTHERS
NON OECD
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The World in Transition to a New Energy Era
Wood, coal, oil and gas have succeeded one another as the dominant source of energysince the industrial revolution. Renewable energies will herald a new, more sustainable eraof energy use.
Energy Eras: History Suggests a Source Replacement Process
Source: World Wind Energy Association
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Competitiveness and sustainability: a vision from the
market
ESADE
November 2014
Rafael MateoCEO ACCIONA Energía