Lane Crockett - slides - clean energy forum June 2011


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Lane Crockett - slides - clean energy forum June 2011

  1. 1. Investing in Renewable Energy
  2. 2. What promotes investment in renewable energy? <ul><li>Reasonable return on equity </li></ul><ul><li>Reliable and reasonably predictable revenue stream </li></ul><ul><li>Confidence in plant output and operating costs </li></ul><ul><li>Investor certainty (i.e. manageable risks) </li></ul><ul><li>Social and environmental outcomes </li></ul><ul><li>The same as any other infrastructure investment! </li></ul>
  3. 3. The benefits of renewable energy <ul><li>Sound financial investment </li></ul><ul><li>Zero greenhouse gas emissions </li></ul><ul><li>Lower OHS risks than alternative fossil fuel generation </li></ul><ul><li>Positive social and environmental outcomes </li></ul><ul><li>Broader health benefits to community </li></ul>
  4. 4. Are others investing?
  5. 5. Investor sentiment today <ul><li>Looking brighter after much turbulence </li></ul><ul><li>New investment is underwritten by the 20% renewable energy target by 2020 </li></ul><ul><li>Carbon price will improve investment certainty </li></ul><ul><li>Banks are keen and super funds ($1T) getting interested </li></ul>
  6. 6. REC Prices Lane Crockett Pacific Hydro “ Enhanced ” RET announced COAG review of RET announced NSW G-FIT announced Rudd Govt elected with 20% by 2020 target Expanded RET legislated Howard Govt refuses to increase MRET Vic Govt wins election with VRET and NSW RET announced Underlying graph from Green Energy Markets Renewables Report SA, Qld & WA support for state RET schemes Market forecasts oversupply in ERET design
  7. 7. Estimate of technology breakdown for 20% RET Bloomberg New Energy Finance
  8. 8. Bloomberg New Energy Finance Levelised Cost of electricity ($/MWh)
  9. 9. ATSE 2009
  10. 10. AGL, IES & Pacific Hydro
  11. 11. What do Victorians want? Survey question: If you had to pick one of these as your preferred option which would it be? QDOS Survey June 2010
  12. 12. Renewable energy: <ul><li>Popular </li></ul><ul><li>Good investment </li></ul><ul><li>Creates jobs </li></ul><ul><li>Clean and healthy </li></ul><ul><li>No emissions! </li></ul>
  13. 13. My ten minutes is up.....
  14. 14. Cost make-up of residential electricity tariff (IPART) Name of Speaker Document Title RET (thin wafer) Retailer cost Generation cost Transmission cost
  15. 15. The National Electricity Market <ul><li>The NEM is a dynamic network which has to balance generation to variable demand in 5 minute periods. </li></ul>
  16. 16. Name of Speaker Document Title AEMO 2010 NEM already manages a high levels of intermittent generation
  17. 17. Name of Speaker Document Title
  18. 18. Renewable resources in Australia <ul><li>Wind </li></ul><ul><li>Lowest cost, lowest environmental footprint </li></ul><ul><li>Around 7000MW of planning approved wind farm capacity in Australia </li></ul><ul><li>May be limited by social factors </li></ul>
  19. 19. Renewable resources in Australia <ul><li>Solar </li></ul><ul><li>Current costs are high but falling rapidly </li></ul><ul><li>Resource is highly confluent with load demand </li></ul><ul><li>PV costs falling rapidly due to efficiency gains and volume capacity growth </li></ul><ul><li>Solar thermal (with storage) - power can be dispatched into the grid </li></ul>
  20. 20. Opportunities for main technologies <ul><li>Geothermal </li></ul><ul><li>Vast resource </li></ul><ul><li>Industry moving to conventional technology </li></ul><ul><li>Power can be dispatched into the grid </li></ul><ul><li>Wave </li></ul><ul><li>Large coastal resource </li></ul>