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NSW Renewable Energy
Investment Briefing
Ian Kay – CFO ARENA
25 May 2016
2
The large scale solar market has
come a long way in 5 years
0
100
200
300
400
500
600
700
800
0
50
100
150
200
250
300
2012 2013 2014 2015 2016 2017* 2018
Large Scale Solar Developments in Australia (MW)
Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS)
2012 – Greenough River Solar
Farm built. Financed by
Synergy, GE and the WA
government
* Projects to be announced
3
With the state governments
leading the initial charge
0
100
200
300
400
500
600
700
800
0
50
100
150
200
250
300
2012 2013 2014 2015 2016 2017* 2018
Large Scale Solar Developments in Australia (MW)
Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS)
2014 – Royalla Solar Farm
built by FRV as part of ACT
Government Solar Auction
* Projects to be announced
4
AGL stepping in for Australia’s
first major deployment
0
100
200
300
400
500
600
700
800
0
50
100
150
200
250
300
2012 2013 2014 2015 2016 2017* 2018
Large Scale Solar Developments in Australia (MW)
Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS)
2015 – AGL’s Nyngan Solar
Farm comes online with NSW
Government support
* Projects to be announced
5
2014 and 2015 were lean years
for the industry
0
100
200
300
400
500
600
700
800
0
50
100
150
200
250
300
2012 2013 2014 2015 2016 2017* 2018
Large Scale Solar Developments in Australia (MW)
Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS)
2016 – Broken Hill, Moree Solar
Farm, Mugga Lane, Normanton
and Sunshine Coast
* Projects to be announced
6
But the path to parity has been
forged in perseverance
0
100
200
300
400
500
600
700
800
0
50
100
150
200
250
300
2012 2013 2014 2015 2016 2017* 2018
Large Scale Solar Developments in Australia (MW)
Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS)
Clare Solar Farm
2017 – Barcaldine and Clare
Solar Farms announced
* Projects to be announced
7
The market is clearly exceeding
all expectations
0
100
200
300
400
500
600
700
800
0
50
100
150
200
250
300
2012 2013 2014 2015 2016 2017* 2018
Large Scale Solar Developments in Australia (MW)
Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS)
ARENA LSS Round2018 – ARENA’s large scale
solar competitive round
expected to exceed by 25%
* Projects to be announced
8
Measuring the ripple effect is
difficult, only hindsight is a
useful yardstick
$80 – $100
BREE 2012
$210 – $300
LCOE$/MWh
2010 2015 2020
ACT FIT *
$110 - $130
Australian LCOE trajectory
* Normalised for capital structure advantages associated with 20 year FIT
ARENA
current
portfolio
Short term target
wind parity
$140 - $170
Were we too conservative?
9
The large scale solar round was
launched in a difficult
environment
Consultations
began in mid
2015 before the
round was
launched in
September 2015.
200+
registrations, 80+
applicants, 22
shortlisted parties
and ?? winners
10
Shared knowledge is an
invaluable commodity
1.5
1.7
1.9
2.1
2.3
2.5
2.7
$/W
Average Total Capital Costs per Watt of Installed Capacity (DC and AC)
Capital Costs (DC) per Watt Capital Costs (AC) per Watt
Average AC Average Australia Wind
Source: ARENA
Solar capital costs
now below wind
11
Solar now looking to take its fair
share of the market to 2021
Source: Bloomberg New Energy Finance, 2016
7,205 7,205 7,205
4,067
7,990 8,081642
643 644
243
2,882 2,699
12,360
19,131 19,040
0
5,000
10,000
15,000
20,000
25,000
2015 Aggressive build
scenario
Gradual build
scenario
Landfill gas
Indstrial PV
STEG
Large-scale PV
Biomass
Wind
Hydro
12
Thank you
Questions?
13
Find out more at arena.gov.au
ARENA at LinkedIn
@ARENA_aus on Twitter
Subscribe to updates: arena.gov.au/subscribe

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ARENA update on large scale solar

  • 1. 1 NSW Renewable Energy Investment Briefing Ian Kay – CFO ARENA 25 May 2016
  • 2. 2 The large scale solar market has come a long way in 5 years 0 100 200 300 400 500 600 700 800 0 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017* 2018 Large Scale Solar Developments in Australia (MW) Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS) 2012 – Greenough River Solar Farm built. Financed by Synergy, GE and the WA government * Projects to be announced
  • 3. 3 With the state governments leading the initial charge 0 100 200 300 400 500 600 700 800 0 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017* 2018 Large Scale Solar Developments in Australia (MW) Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS) 2014 – Royalla Solar Farm built by FRV as part of ACT Government Solar Auction * Projects to be announced
  • 4. 4 AGL stepping in for Australia’s first major deployment 0 100 200 300 400 500 600 700 800 0 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017* 2018 Large Scale Solar Developments in Australia (MW) Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS) 2015 – AGL’s Nyngan Solar Farm comes online with NSW Government support * Projects to be announced
  • 5. 5 2014 and 2015 were lean years for the industry 0 100 200 300 400 500 600 700 800 0 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017* 2018 Large Scale Solar Developments in Australia (MW) Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS) 2016 – Broken Hill, Moree Solar Farm, Mugga Lane, Normanton and Sunshine Coast * Projects to be announced
  • 6. 6 But the path to parity has been forged in perseverance 0 100 200 300 400 500 600 700 800 0 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017* 2018 Large Scale Solar Developments in Australia (MW) Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS) Clare Solar Farm 2017 – Barcaldine and Clare Solar Farms announced * Projects to be announced
  • 7. 7 The market is clearly exceeding all expectations 0 100 200 300 400 500 600 700 800 0 50 100 150 200 250 300 2012 2013 2014 2015 2016 2017* 2018 Large Scale Solar Developments in Australia (MW) Non-ARENA Funded (LHS) ARENA Funded (LHS) Cumulative (RHS) ARENA LSS Round2018 – ARENA’s large scale solar competitive round expected to exceed by 25% * Projects to be announced
  • 8. 8 Measuring the ripple effect is difficult, only hindsight is a useful yardstick $80 – $100 BREE 2012 $210 – $300 LCOE$/MWh 2010 2015 2020 ACT FIT * $110 - $130 Australian LCOE trajectory * Normalised for capital structure advantages associated with 20 year FIT ARENA current portfolio Short term target wind parity $140 - $170 Were we too conservative?
  • 9. 9 The large scale solar round was launched in a difficult environment Consultations began in mid 2015 before the round was launched in September 2015. 200+ registrations, 80+ applicants, 22 shortlisted parties and ?? winners
  • 10. 10 Shared knowledge is an invaluable commodity 1.5 1.7 1.9 2.1 2.3 2.5 2.7 $/W Average Total Capital Costs per Watt of Installed Capacity (DC and AC) Capital Costs (DC) per Watt Capital Costs (AC) per Watt Average AC Average Australia Wind Source: ARENA Solar capital costs now below wind
  • 11. 11 Solar now looking to take its fair share of the market to 2021 Source: Bloomberg New Energy Finance, 2016 7,205 7,205 7,205 4,067 7,990 8,081642 643 644 243 2,882 2,699 12,360 19,131 19,040 0 5,000 10,000 15,000 20,000 25,000 2015 Aggressive build scenario Gradual build scenario Landfill gas Indstrial PV STEG Large-scale PV Biomass Wind Hydro
  • 13. 13 Find out more at arena.gov.au ARENA at LinkedIn @ARENA_aus on Twitter Subscribe to updates: arena.gov.au/subscribe