Best Opportunity Analysis- Renewable Energy Sustainable Energy Conference, 1 st  December 2009
Global Energy Situation HSBC: $470bn set aside for green-stimulus plans Banking giant HSBC says that 15% of global stimulu...
Projected Energy & Electricity Demand to 2030 Global Energy Situation, a look at the key figures….. +76% +126% <ul><li>Ene...
Why Renewable Energy? <ul><li>Politics (usually no1 reason..) </li></ul><ul><li>Energy Security (diversify from M.E.) </li...
Clean Energy - Historical Growth, 2004 to 2006 Global Renewables Market : Historical Growth USD $ bn +81% +43% $27.5 $49.6...
Market Lifecycle by Region – Renewables. Is Asia at a tipping point? Wind and solar already big of course….. Western Europ...
Global Energy Consumption Mtoe, 1973, 2005, 2030f Asian energy situation :  becoming more and more important as a region, ...
Million tonnes of Co2, 2005 and 2030 by Key Country Green House Gases in Asia set to increase significantly <ul><li>Green ...
Market Opportunity by Area : Timing  Cellulosic Biofuels Geothermal Long Term Immediate Mid Term Energy  Efficiency Small ...
Summary of best opportunities by selected countries India <ul><li>Wind </li></ul><ul><li>Solar </li></ul><ul><li>Biomass/ ...
Summary of barriers by renewable energy type Solar <ul><li>Which Technology? </li></ul><ul><li>Subsidies/ legislation </li...
Opportunities By Area - Solar <ul><li>Pro’s </li></ul><ul><li>Abundant Energy Source </li></ul><ul><li>Con’s </li></ul><ul...
Opportunities By Area - Wind <ul><li>Pro’s </li></ul><ul><li>Clean Energy Source </li></ul><ul><li>Con’s </li></ul><ul><li...
Opportunities By Area – Small Hydro <ul><li>Pro’s </li></ul><ul><li>Clean Source of Energy </li></ul><ul><li>Small Hydro I...
Opportunities By Area - Biomass <ul><li>Pro’s </li></ul><ul><li>Much Biomass Available </li></ul><ul><li>IRR’s Attractive ...
Opportunities By Area - Biogas <ul><li>Pro’s </li></ul><ul><li>A Lot Available  </li></ul><ul><li>(Agri, Ind. Municipal) <...
Opportunities By Area - Geothermal <ul><li>Pro’s </li></ul><ul><li>Can be Major  </li></ul><ul><li>  Source of Energy </li...
Cost per MW in s.e Asia by Source, 2007 Cost per MW of project compared to other power projects still remains high though…...
…… .. and IRR’s typically around the 20% level for project developers. Is risk in Asia rewarded? Wind Power Geothermal IRR...
Conclusion <ul><li>Renewable Energy will the best investment opportunity in the 21 st  century…. </li></ul><ul><li>But </l...
[email_address] Global VP, Consulting +65 9615 8293
Appendix
Upcoming SlideShare
Loading in …5
×

Best Opportunity Analysis-Renewable Energy

2,144 views

Published on

Frost & Sullivan analysis of the Renewable Energy Market.

Published in: Business, Technology
2 Comments
11 Likes
Statistics
Notes
No Downloads
Views
Total views
2,144
On SlideShare
0
From Embeds
0
Number of Embeds
33
Actions
Shares
0
Downloads
75
Comments
2
Likes
11
Embeds 0
No embeds

No notes for slide

Best Opportunity Analysis-Renewable Energy

  1. 1. Best Opportunity Analysis- Renewable Energy Sustainable Energy Conference, 1 st December 2009
  2. 2. Global Energy Situation HSBC: $470bn set aside for green-stimulus plans Banking giant HSBC says that 15% of global stimulus packages are being spent on environmental measures — which means about $470bn of government spending and $3.1trn of tax cuts — are being dedicated to ‘green’ areas.
  3. 3. Projected Energy & Electricity Demand to 2030 Global Energy Situation, a look at the key figures….. +76% +126% <ul><li>Energy and electricity consumption significantly higher in the backdrop of: </li></ul><ul><ul><li>Higher price of crude oil, gas, and coal </li></ul></ul><ul><ul><li>Lower reserves </li></ul></ul><ul><ul><li>Higher Co2 Emissions </li></ul></ul>
  4. 4. Why Renewable Energy? <ul><li>Politics (usually no1 reason..) </li></ul><ul><li>Energy Security (diversify from M.E.) </li></ul><ul><li>Energy Diversity (gaps in demand, legislation, ie. California 2010) </li></ul><ul><li>Displace Imports (esp. fuels) </li></ul><ul><li>Environment (air quality, GHG, carbon markets…) </li></ul><ul><li>Job Creation (strong potential) </li></ul>
  5. 5. Clean Energy - Historical Growth, 2004 to 2006 Global Renewables Market : Historical Growth USD $ bn +81% +43% $27.5 $49.6 $70.9 Source : SEFI, Frost & Sullivan analysis +67% $117 <ul><li>These figures exclude M&A activity in existing businesses </li></ul><ul><li>In terms of Venture Capital money the Renewable Energy sector is number 3 in the US behind Technology and Healthcare </li></ul><ul><li>Sub-prime market does not seem to be holding back investments into the “Clean Tech” Sector, though share prices have taken a knock, especially solar which had very high PE Ratios. </li></ul>
  6. 6. Market Lifecycle by Region – Renewables. Is Asia at a tipping point? Wind and solar already big of course….. Western Europe North America Central & Eastern Europe Middle East Maturity Development Growth Africa Latin America Asia <ul><li>Historical Investments in EU and US </li></ul><ul><li>Asia is where the growth will be – energy demand driven, with constraints and potential gaps, and driven by high oil prices </li></ul><ul><li>Will also be the highest GHG emitter (x3 by 2030) </li></ul>Current Money Flow Future Money Flow
  7. 7. Global Energy Consumption Mtoe, 1973, 2005, 2030f Asian energy situation : becoming more and more important as a region, supply demand imbalance? 34% 26% 13% Mtoe <ul><li>China (20%) and Rest of Asia (14%), combine to account for 34% of the world’s energy requirements in 2030, up from 26% in 2005. </li></ul><ul><li>Possible that there may be a gap in energy production that renewables could fill. </li></ul>OECD FSU China Asia Lat Am Source : IEA World Energy Outlook 2006 M.E.
  8. 8. Million tonnes of Co2, 2005 and 2030 by Key Country Green House Gases in Asia set to increase significantly <ul><li>Green House Gases are set to triple in the next 20-25 years at the currnent pace of development. </li></ul><ul><li>China, India, and Indonesia are the three main culprits. </li></ul><ul><li>Most of this will be from industry, but land use in Asia also accounts for a high portion of Co2 emissions. </li></ul>Mt Co2 x3 x6 x2
  9. 9. Market Opportunity by Area : Timing Cellulosic Biofuels Geothermal Long Term Immediate Mid Term Energy Efficiency Small Hydro Carbon Market Wind Biomass Biogas Tidal Hydrogen Clean Coal Solar ???????
  10. 10. Summary of best opportunities by selected countries India <ul><li>Wind </li></ul><ul><li>Solar </li></ul><ul><li>Biomass/ Biogas </li></ul><ul><li>Small Hydro </li></ul>China <ul><li>Wind </li></ul><ul><li>Solar </li></ul><ul><li>Biomass/ Biogas </li></ul><ul><li>Small Hydro </li></ul>Australia <ul><li>Wind </li></ul><ul><li>Solar </li></ul>Indonesia <ul><li>Geothermal </li></ul><ul><li>Biomass/Biogas </li></ul><ul><li>Biofuels </li></ul>Korea <ul><li>Solar </li></ul><ul><li>Biomass/ Biogas </li></ul><ul><li>Wind </li></ul><ul><li>Tidal </li></ul>Thailand <ul><li>Biomass/ Biogas </li></ul><ul><li>Biofuels </li></ul>
  11. 11. Summary of barriers by renewable energy type Solar <ul><li>Which Technology? </li></ul><ul><li>Subsidies/ legislation </li></ul><ul><li>Silicon supply </li></ul><ul><li>Cost? </li></ul>Biomass <ul><li>Feedstock control/ cost </li></ul><ul><li>Size of project </li></ul><ul><li>Legislation </li></ul>Geothermal <ul><li>Cost </li></ul><ul><li>Well risk </li></ul><ul><li>Transmission </li></ul><ul><li>Politics </li></ul>Biogas <ul><li>Feedstock control/ cost </li></ul><ul><li>Size of project </li></ul><ul><li>Transmission </li></ul>Wind <ul><li>IRR </li></ul><ul><li>Value Capture </li></ul><ul><li>Cash Flow </li></ul><ul><li>Cost </li></ul>Hydro <ul><li>Political </li></ul><ul><li>IRR’s </li></ul><ul><li>Size of projects </li></ul>
  12. 12. Opportunities By Area - Solar <ul><li>Pro’s </li></ul><ul><li>Abundant Energy Source </li></ul><ul><li>Con’s </li></ul><ul><li>Needs Feed In Tariffs </li></ul><ul><li>Silicon Constraints 2008 </li></ul><ul><li>Cloud Cover in Certain Areas </li></ul><ul><li>Cost & Efficiency </li></ul>World Asia Market Size, 2007 $8.0 Billion $2.3 Billion 127 MW Installed 15 MW in 2007 360 MW in 2007 2027 MW Installed 72.5 MW Installed 8 MW in 2007 90 MW Installed 20 MW in 2007 1.8 GW potential
  13. 13. Opportunities By Area - Wind <ul><li>Pro’s </li></ul><ul><li>Clean Energy Source </li></ul><ul><li>Con’s </li></ul><ul><li>Unsightly </li></ul><ul><li>Value in the Equipment </li></ul><ul><li>IRR low-ish </li></ul><ul><li>Big Boys Play Here </li></ul>World Asia Market Size, 2007 8000 MW Installed 6050 MW Installed 1730 MW in 2007 65 GW potential 3449 MW in 2007 Potential: 253 GW Onshore 750 GW Offshore 139 MW in 2007 1538 MW Installed $17.2 Billion $4.8 Billion
  14. 14. Opportunities By Area – Small Hydro <ul><li>Pro’s </li></ul><ul><li>Clean Source of Energy </li></ul><ul><li>Small Hydro Interesting </li></ul><ul><li>Con’s </li></ul><ul><li>Need Portfolio of Projects </li></ul><ul><li>Environmental Consideration </li></ul><ul><li>Political </li></ul>World Asia Market Size, 2007 2045 MW Installed 149 MW in 2007 15 GW potential 49 GW Installed 125 GW potential 1500 MW in 2007 416 MW Installed 65 MW in 2007 $4.4 Billion $3.7 Billion
  15. 15. Opportunities By Area - Biomass <ul><li>Pro’s </li></ul><ul><li>Much Biomass Available </li></ul><ul><li>IRR’s Attractive </li></ul><ul><li>Con’s </li></ul><ul><li>Cost of Collection </li></ul><ul><li>Size of Projects </li></ul><ul><li>Competition </li></ul>World Asia Market Size, 2007 1580 MW Installed 228 MW in 2007 16 GW potential 3000 MW Installed 400 MW in 2007 $3.7 Billion $1.5 Billion 30 GW potential 2400 MW Installed 400 MW in 2007
  16. 16. Opportunities By Area - Biogas <ul><li>Pro’s </li></ul><ul><li>A Lot Available </li></ul><ul><li>(Agri, Ind. Municipal) </li></ul><ul><li>Good for Carbon Credits </li></ul><ul><li>Con’s </li></ul><ul><li>Underused Area </li></ul><ul><li>Can be Political </li></ul>World Asia Market Size, 2007 62 MW Installed 4.2 MW in 2007 > 700 MW potential 3.9 million digesters installed 24 million digesters installed 96000 digesters In 2007 4 million digesters in 2007 $3.2 Billion $0.6 Billion
  17. 17. Opportunities By Area - Geothermal <ul><li>Pro’s </li></ul><ul><li>Can be Major </li></ul><ul><li> Source of Energy </li></ul><ul><li>Con’s </li></ul><ul><li>Expensive </li></ul><ul><li>Transmission Issues </li></ul><ul><li>Low Awareness </li></ul><ul><li>Political </li></ul>World Asia Market Size, 2007 4000 MW potential 40 MW in 2007 1978 MW Installed 992 MW Installed 185 MW in 2007 40 MW In 2007 472 MW Installed 1000 MW potential 20 MW In 2007 535 MW Installed $1.0 Billion $3.0 Billion
  18. 18. Cost per MW in s.e Asia by Source, 2007 Cost per MW of project compared to other power projects still remains high though….. USD $mn/ MW <ul><li>As attractive as renewable energy is their overall costs per MW still remain higher than conventional sources of energy. </li></ul><ul><li>This problem is further compounded by the fact that projects are typically of a smaller overall investment than conventional power plants. </li></ul><ul><li>Prices per MW are however continuing to come down as the cost of equipment comes down. </li></ul>Source : Frost & Sullivan analysis
  19. 19. …… .. and IRR’s typically around the 20% level for project developers. Is risk in Asia rewarded? Wind Power Geothermal IRR Comments Biogas Small Hydro Solar Biomass Area Biofuels Overall ~15% Depends on size of project location, and carbon credits. Needs CC’s to be viable. + or - 75% Heavily dependent on feedstock prices. Similar to a refining business. ~20% Will depend on size and location. Can be more or less than this depending on a variety of factors. ~20% ~20% Depends on size, project location and characteristics of geothermal reservoir. ~20% ~15% Depends on project size and availability of carbon credits. Highly dependent on project location. ~20% Depends on feedstock, technology, costs involved on land and labor. Will depend on feedstock prices. Needs attractive feed-in-tariff and tax rebates.
  20. 20. Conclusion <ul><li>Renewable Energy will the best investment opportunity in the 21 st century…. </li></ul><ul><li>But </li></ul><ul><li>…… will require time and time and massive Capex </li></ul>
  21. 21. [email_address] Global VP, Consulting +65 9615 8293
  22. 22. Appendix

×