strong growth brings opportunities, challenges -the global ... · 1 september 26, 2017 solar and...

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


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



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


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



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


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?


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


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


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


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


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


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.


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


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


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)



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



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Jenny Chase

strong growth brings opportunities, challenges -the global ... · 1 september 26, 2017 solar and...

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