USA RENEWABLE ENERGY REPORT

About Petron Group LLP

▪ Petron Group LLP is an emerging and rapidly evolving Private Equity Firm who invests in socially and environmentally responsible

Projects.

▪ The company has launched the Alternative Power Generation Fund to deal with this growing concern of climate change while simultaneously generating profit in the process, as Industry leaders it is our responsibility to upkeep our environment.

▪ This report focuses on alternate energy technologies as a remarkable solution to cope up with climatic change issue and fulfil global energy requirements.

At a Glance

Total generation of electricity for all sectors

67%

33%

7%

6%

19%

27%

39%

Other

renewable…

Hydro

Nuclear

Natural gas

Coal

In 2014, the United States generated around 4093 billion Kilowatt hours of electricity

Principal sources

of United States

Electricity generated measured in Billion kwh , Over the decade from 2004 to 2014

2014

According to the US Bureau of labor

statistics show that average electricity

prices across the United States have

risen for nine of the last 10 years

Natural gas

(+412bKwh)

Wind

(+168)bKwh

Solar

(+18)

Coal

(-393bKh)Petroleum

(-90) Bkwh

2004

Around 67% of

the electricity

generated was

from fossil fuels

such as coal,

natural gas and

petroleum

USA Electricity Allocation

4

Last Year, the United States generated around 4093

billion Kilowatt hours of electricity. From wholesome

amount

Around 67% of the electricity

generated is from fossil fuels such

as coal, natural gas

and petroleum. Coal (39%),

natural gas (27%)

Hydro (6%) and other

renewable energy sources

(7%) last year wind and

solar combined increased

186 billion kWh

The largest increase

in electrical generation came

from natural gas (in 2014

electricity generated was 412

billion kWh greater than 2004)

The largest decrease in the

electricity generation from the

coal by 393 billion kWh and

from petroleum decreased by

90 billion kWh.

4093billion kwh

Fossil fuels

Electricity Price Trends

0

20

40

60

80

100

2013 2023 2033

These statistics seem to verify warnings that US electricity costs will increase

+51%

+21%

If this trend continues, the

average kilowatt hour of

electricity could cost

$162.86¢

The average price of electricity is skyrocketing these days in United States

8.64

36.9

Last decade Current

• Recent history seems to justify these projections, as electricity

rates have increased by 42 percent in the last decade.

• In fact electricity costs are rising at twice the rate of inflation,

according to The Washington post.

Average residential rates by state

Electricity Price Trends

These statistics seem to verify warnings that US electricity costs will increase

If this trend continues, the average kilowatt hour of electricity could cost

$1

62.86¢

The average price of electricity is skyrocketing these days in United States

8.64

36.9

Last decade Current

• Recent history seems to justify these projections, as electricity rates have increased by 42 percent in the last decade.

• In fact electricity costs are rising at twice the rate of inflation, according to The Washington post.

Average residential rates by state

+21%

+51%

0 50 100 150 200 250

2013

2023

2033

7

8.37 8.53 8.67 9.06 9.3

37.34

17.88 17.62 17.34 17.01

446%

209% 203%191% 182%

0%

100%

200%

300%

400%

500%

0

5

10

15

20

25

30

35

40

USA Electricity Market

Price Gap Assumption Per Kwh

Matching Trade data is only a small part of what we do best

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There is no one cause for the continuing rise in electricity rates.

Instead, several factors combine to keep the amount climbing. These factors include

"Everywhere you Look New regulations Driving Electricity prices higher" Coal Plants are Shutting down, Power

Outages Left and right, Renewable Energy is no longer

only used against Global Warming, It has became a national Security issue, It is EEFC Responsibility to Protect

America and our environment

- Richard H Stone, CEO of EEFC Energy a leader in

Renewable Power Generation

All fossil Fuel Power Plants will have to be upgraded to comply with the new regulations. That can cost hundreds of Hundreds of millions of dollars. One Company, EEFC Energy, has already have taken the Initiative to comply with these new regulations.

Large companies like Apple, Walmart, Google, Verizon, and Kroger are increasingly generating their own electricity. When big business disconnects from the grid – thus taking revenue away from electric companies — the cost of maintaining it and generating electricity gets passed onto homeowners and small business.

Stringent new air pollution regulations implemented by the Obama administration could force more than 200 coal burning power plants to close. Utilities will have to spend big money to build new plants to replace those facilities or buy electricity elsewhere. That cost will be passed onto consumers.

Factors (Cont.)

New emissions rules on mercury, acid gases and other toxics by the Environmental Protection Agency are expected to result in significant losses of the nation's coal-generated power,

historically the largest and cheapest source of electricity. Already, two dozen coal generating units across the country are scheduled for decommissioning. When the regulations go into effect next year, 60 gigawatts of capacity —equivalent to the output of 60 nuclear reactors — will be taken out of the system, according to Energy Department estimates

One recent study predicts the cost of electricity in California alone could jump 47% over the next 16 years, in part because of the state's shift toward more expensive renewable energy

Factors (Cont.)

In fact, the price of electricity has already been rising over the last decade, jumping by double digits in many states, even after accounting for inflation. In California, residential electricity prices shot up 30% between 2006 and 2012, adjusted for inflation, according to Energy Department figures. Experts in the state's energy markets project the price could jump an additional 47% over the next 15 years.

"We are now in an era of rising electricity prices “ also "the steady reduction in generating

capacity across the nation means that prices

are headed up"

"If you take enough supply out of the system, the price is going to increase"

- Philip Moeller, a member of the Federal Energy Regulatory Commission

Factors

The problems confronting the electricity system are the result of a wide range of forces: new federal regulations on toxic emissions, rules on greenhouse gases, state mandates for

renewable power, technical problems at nuclear power plants and unpredictable price trends for natural gas. Even cheap hydro power is declining in some areas, particularly California, owing to the long-lasting drought.

Emergency Power Outages (1/4)

A fifth of all power-generating capacity in a grid serving 60 million people went suddenly offline, as coal piles froze, sensitive electrical equipment went haywire and utility operators had trouble finding enough natural gas to keep power plants running. The wholesale price of electricity skyrocketed to nearly $2 per kilowatt hour, more than 40 times the normal rate. The electrical system's duress was a direct result of the polar vortex, the cold air mass that settled over the nation. But it exposed a more fundamental problem. There is a growing fragility in the U.S. electricity system, experts warn, the result of the shutdown of coal-fired plants, reductions in nuclear power, a shift to more expensive renewable energy and natural gas pipeline constraints. The result is likely to be future price shocks. And they may not be temporary.

Emergency Power Outages (2/4)

Moeller, the federal energy commissioner, warns

that these rapid changes are eroding the system's

ability to handle unexpected upsets, such as the

polar vortex, and could result in brownouts or even

blackouts in some regions as early as next year. He

doesn't argue against the changes, but believes

they are being phased in too quickly.

The federal government appears to have

underestimated the impact as well. An

Environmental Protection Agency analysis in 2011

had asserted that new regulations would cause

few coal plant retirements. The forecast on coal

plants turned out wrong almost immediately, as

utilities decided it wasn't economical to upgrade

their plants and scheduled them for

decommissioning

Emergency Power Outages (3/4)

The lost coal-generating capacity is being

replaced largely with cleaner natural gas, but the

result is that electricity prices are linked to a fuel

that has been far more volatile in price than coal.

The price of natural gas now stands at about $4.50

per million BTUs, more expensive than coal. Plans

to export massive amounts of liquefied natural

gas, the rapid construction of gas-fired power

plants and the growing trend to convert the U.S.

heavy truck fleet to natural gas could exert even

more upward pressure on prices. Malcolm

Johnson, a former Shell Oil gas executive who now

teaches the Oxford Princeton Program, a private

energy training company, said prices could move

toward European price levels of $10.

Emergency Power Outages (4/4)

"When those natural gas prices start going up

again, we will feel it in the way of higher electricity

prices," warns James Sweeney, a Stanford

University energy expert.

The loss of coal is being exacerbated by problems

at the nation's nuclear plants. Five reactors have

been taken out of operation in the last few years,

mainly due to technical problems. Additional

shutdowns are under consideration.

Renewable Energy Mandate (1/2)

At the same time, 30 states have mandates for

renewable energy that will require the use of more

expensive wind and solar energy. Since those

sources depend on the weather, they require

backup generation — a hidden factor that can

add significantly to the overall cost to consumers.

Nowhere are the forces more in play than in

California, which has the nation's most aggressive

mandate for renewable power. Major utilities must

obtain 33% of their power from renewable sources

by 2020, not counting low-cost hydropower from

giant dams in the Sierra Nevada Mountains.

Co-Sponsors

There are three key programs through which the Recovery Act is driving manufacturing and deployment of renewable energy technologies:

Over $3 billion so far in payments-in-lieu-of-tax -credits to over 500 projects in 44 states to support renewable energy generation projects

Supports more than 10,000 construction jobs and over 2,000 ongoing operating and maintenance jobs

Brings more than 4 GW of new renewable energy online

Leverages $2 of private capital for every $1 of tax credits

Payment-in-Lieu-Of-Tax-Credits

(1603)

Manufacturing

Tax Credits (48C)

Loan

Guarantees

$2 billion in conditional or closed loan guarantees for renewables deployment and manufacturing projects

Projects will create or save more than 5,000 construction and permanent jobs, lead to more than 3 GW of clean power generating capacity, and avoid more than 30 million tons of CO2 per year, according to company estimates.

Leverages more than $4 of debt and equity for every $1 of loan guarantee subsidy

Over $2 billion in tax credits to 183 projects in 43 states for clean energy manufacturing projects

30 percent tax credit for qualifying advanced energy projects in new, expanded, or re-equipped domestic manufacturing facilities

Competition was more than 3x oversubscribed

Leverages $2 of private capital for every $1 of tax credits

Investment Strategy

We typically Invest into Power Generation

companies that operate eco friendly and has a

unique competive advantage to disrupt the

market globally.

While our investment decisions are based primarily

on company-specific factors, we also consider

external factors (e.g., industry trends, regulations,

geopolitical risk). Companies in the energy

business are strongly influenced by broader

industry themes that will have a role in shaping our

prospects over the long term. As a component of

our Investment Strategy, we evaluate the price

differentiation. We evaluate key energy trends.

and highlight emerging market growth,

Regulations, and countries commitment towards

climate change policy.

Shifting Focus

Alternative Energy is a large, diverse, and dynamic industry. It’s not just about oil – consumption around the world is quite varied by source. Over our three- to five-year investment horizon, we believe that the traditional sources of energy (e.g., oil, gas, coal) will continue to be the Obsolete energy inputs for the global economy. Oil and gas comprise roughly 50% of the world’s consumption, and, if you include coal, the amount is closer to 90%. Although its market share is currently small, alternative energy has increased its share of the mix. Alternative energy sources (e.g., solar, wind, bio-fuels, nuclear) are likely to continue to grow faster than traditional energy sources. Yet, it’s important to remember that energy changes generally happen gradually because of long investment cycles, the scale and complexity of the industry itself, and changing consumer preferences and behaviors. the Petron Group LLP Funds seek to participate in the rapid shifts to alternative energy.

Isaac S Udotong Managing Partner said “ Petron predicts that

Energy prices will continue to rise with or without Competition, Energy Inflation is 2x the rate of inflation, that’s trillions of Dollars of new Cash Flow being Injected annually in the Electricity market.!!

Barrier of Entry (1/2)

These Structural barriers include high economies of scale, large capital requirements, high upfront sunk costs, long lead times and others. Regulatory barriers may also limit the entry decision as they entail non-trivial supplementary costs and delays to the entrant. Projects with very long time horizons like power plants are subject to significant uncertainties about future prices, market conditions, future cost, and the regulatory and policy frameworks. Strategic behavior aimed at deterring new competition can also arise from excess capacity, vertical integration and locational advantages.

The pattern of entry in the generation segment of the electricity supply industry of The Organization for Economic Co-operation and Development) OECD countries, and seeks to provide an understanding of its key determinants. The purpose is two-fold: to evaluate the important factors influencing the entry of new generators at the domestic level, from new firms and incumbent firms, and to assess the determinants of entry into the different available generation technologies, in particular those based on renewable energy sources, so as to derive implications for the design of policies aimed at spurring competition in the electricity supply industry which are increasingly subject to significant renewable energy objectives.

4 types of Barriers for new Firms to enter the Electricity market:

Yet, outside the major pension funds and insurance companies institutional investor allocations to clean energy projects remain limited, particularly when it comes to the types of direct investment which can help close the financing gap. Reasons for institutional investor hesitancy include a lack of information and expertise when it comes to the type of direct infrastructure investment required to finance clean energy projects. And a potentially unsupportive regulatory backdrop. These problems are compounded by a lack of suitable investment vehicles providing the risk/return profile that institutional investors need to manage the risks specific to clean energy projects. There are many species of risk including regulatory risk stemming from a lack of clarity in the terms of environmental and climate policy, and retroactive changes to support mechanisms. Progress is being made with investor groups coming together to use their scale and build their expertise in clean energy investment. From the public sector, actions are underway to scale up green bond offerings, create risk-mitigating public finance mechanism and co-investment funding structures. These initiatives need to be encouraged, carefully monitored and expanded where successful.

Given the scale of the USD 71 trillion in capital in the hands of institutional investors and evidence of an emerging interest on their part for clean energy investments, an important question for policy makers is which potential barriers may be preventing institutional investors from significantly scaling up their commitments.

Barrier of Entry (2/2)

Market Outlook

After two years of annual declines, investments in clean energy worldwide jumped 9% year over year in the first quarter of 2014, according to data released Wednesday by Bloomberg New Energy Finance (BNEF), a London-based energy analysis firm. Solar power led the way with a 23% increase, more than offsetting a 16% decline in wind power. All told, investors spent $47.7 billion on renewables and energy efficiency in the first three months of this year.

Global investment in renewable energy is up, technology costs continue to drop precipitously, and markets are expanding into emerging economies in Asia, the Middle East, and Africa. The industry still has a long way to go, and many say a shift to cleaner energy is happening too slowly to offset the downside of carbon-heavy fuels. Even so, the broad, global outlook for renewable is bright, and deployment of the technology verges on rapid acceleration.

Investment could still fall again in all of 2014. But the underlying principles point to a dramatic if eventual change in the way people power their homes and fuel their cars.

"The financial crisis, cheap natural gas, subsidy cuts by cash-strapped governments, and a flood of imports from Chinese solar-panel manufacturers have profoundly challenged the industry's short-term performance. But they haven't undermined its potential," McKinsey & Company's report reads. "The industry is poised to assume a bigger role in global energy markets; as it evolves, its impact on businesses are consumers will be significant and widespread"

2014 Clean energy is making a comeback

Decarbonizing the world’s energy system to avoid locking-in polluting technologies and unacceptably high emission levels will require doubling existing investment levels to around USD 2 trillion a year or 2% of GDP. Governments understand that large sums of capital will be required, and many are also realizing the need for further recourse to private capital as public finances have become strained in many developed countries. Simultaneously, banking sector provision of long-term finance has become tighter due deleveraging and new financial regulations. With their USD 71 trillion in assets, instructional investors potentially have an vital role to play. Given the current low interest rate environment and weak economic growth prospects in many OECD countries, institutional investors are increasingly looking for real asset classes which can deliver steady, preferably inflation-linked, income streams with low correlation to the returns of other investments. Clean energy projects may combine these sought after

characteristics.

Vision for the Future

Future Forecast for Renewable Energy

Wind solar and other forms of renewable energy will be a growing power sources over the next few decades.

The U.S. Energy Information Administration forecasts renewable energy will be the fastest-growing power source through 2040.

New investments in renewable energy rose from $9 billion in the first quarter of 2004 to $50 billion for 2015’s first quarter, according to Bloomberg New Energy Finance, and the volume of installed photovoltaic systems in the United States has grown every year since 2000.

The story that renewable energy advocates often share of how their favorite power sources have grown so rapidly over recent years believes the reality that those industries have expanded from small market shares to start.

Yet with increasing interest, investors are targeting renewables as strong assets,

Steven S Yagi, Operating Partner of Petron Group LLP, an USA Private Equity firm said.

“ We are taking renewable power to the next level, and eventually all the coal-burning power plants will be decommissioned and replace by our state of the art clean technology, everyone needs energy, but we do not need to pollute the People to meet these needs,

The above information is not a complete analysis of every material fact concerning any market, industry or investment. Data has been obtained from sources considered reliable, but Petron Group LLP makes no representations as to the completeness or accuracy of such information. Opinions expressed are subject to change without notice. The information provided is historical and does not predict future results or profitability. This is not a recommendation to buy, sell, or hold any security and is not indicative of Petron groups LLP current or future trading activity. The securities identified are subject to change without notice and may not represent an account’s entire holdings. Before investing in any Petron Group LLP, you should carefully consider the Fund’s investment objectives, risks, and management fees and other expenses. To obtain a Fund’s Memorandum and summary, which contain this and other important information, visit www.petron-group.comPlease read the Investment memorandum and summary carefully before investing.

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