STATE OF THE INDUSTRY KEYNOTE BNEF SUMMIT 2016

BLOOMBERG NEW ENERGY
FINANCE SUMMIT
In search of the miraculous
Michael Liebreich
5 April 2016

1Michael Liebreich BNEF Summit, New York, 5 April 2016 @MLiebreich
$62bn
$88bn
$128bn
$175bn
$206bn $207bn
$274bn
$318bn
$297bn
$272bn
$316bn
$329bn
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
20
40
60
80
100
120
140
160
CLEAN ENERGY INVESTMENT ROSE WHILE OIL PLUMMETED
GLOBAL CLEAN ENERGY INVESTMENT VS WTI CRUDE SPOT 2004-15
$146/bbl
Record
investment
Note: Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for digital energy and energy
storage projects (not reported in quarterly statistics). Excludes large hydro. Source: Bloomberg Intelligence, Bloomberg New Energy Finance
$37/bbl

$62bn
$88bn
$128bn
$175bn
$206bn $207bn
$274bn
$318bn
$297bn
$272bn
$316bn
$329bn
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CLEAN ENERGY INVESTMENT ROSE WHILE OIL & GAS CAPEX FELL
GLOBAL CLEAN ENERGY INVESTMENT VS OIL & GAS CAPITAL EXPENDITURE
$500bn
Note: Oil and gas CAPEX data refers to total capital spending by integrated global oil firms and US independent E&Ps. Excludes NOCs. Source: Bloomberg Intelligence, Bloomberg New Energy Finance
$321bn
0
20
40
60
80
100
120
140
160$146/bbl
$37/bbl
Oil and gas
CAPEX down
by 36% in 2015

Source: UNEP, Bloomberg New Energy Finance
INVESTMENT IN POWER CAPACITY, 2008–15
($BN)
Renewables ex
large hydro
Fossil fuel
Nuclear
Large hydro
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 2013 2014 2015

Source: Bloomberg New Energy Finance; ImagesSiemens; Wikimedia Commons
WORLD RECORD: 3-CENT WIND, SUB-4-CENT SOLAR (UNSUBSIDISED)
Location:
Bidder:
Signed:
Price:
Morocco
Enel Green Power
January 2016
US$ 3.0 c/kWh
ONSHORE WIND
Location:
Bidder:
Signed:
Price:
Coahuila, Mexico
Enel Green Power
March 2016
US$ 3.6 c/kWh
SOLAR PV

0.1
1
10
100
1 10 100 1,000 10,000 100,000 1,000,000
2003
1976
1985
2008
Cumulative capacity (MW)
Current
2015
price
Note: Prices are in real (2015) USD. ‘Current price’ is $0.61/W Source: Bloomberg New Energy Finance, Maycock
WIND AND SOLAR EXPERIENCE CURVES
ONSHORE WIND LEVELISED COST ($/MWh) SOLAR PV MODULE COST ($/W)
Learning
rate 24.3%
MODULE COSTS
HAVE FALLEN
99% SINCE 1976
80% SINCE 2008
y = 3,582.42x-0.30
R² = 0.91
16
32
64
128
256
512
1,024
100 1,000 10,000 100,000 1,000,000
1985
2025
2014
Learning rate =19%
R² = 0.91
Thailand
Brazil
Germany
US
H1 2015
1999
2009
1,024
512
256
128
64
32
100 1,000 10,000
16
100,000 1,000,000
Learning rate 19%
1985
1999
2009
2014
2025
H2 2015
Learning rate
19%
WIND COSTS
HAVE FALLEN
50% SINCE 2009
Note: Pricing data has been inflation corrected to 2014. We assume the debt ratio of 70%, cost of debt
(bps to LIBOR) of 175, cost of equity of 8% Source: Bloomberg New Energy Finance

RENEWABLE ENERGY - THE MARCH OF THE PRICE SIGNAL
Market-based mechanisms – eg renewable energy auctions, certificate schemes, renewable portfolio
standards
Feed-in tariff/premiums
Mixed
Countries with auction or tender programmes
2000

RENEWABLE ENERGY - THE MARCH OF THE PRICE SIGNAL
Market-based mechanisms – eg, renewable energy auctions, certificate schemes, renewable
portfolio standards
Feed-in tariff/premiums
Mixed
Countries with auction or tender programmes
2016

AN AGE OF PLENTY…
… AN AGE OF
COMPETITION

GLOBAL NATURAL GAS PRICES
($/MMBTU REAL 2016$)
Source: Bloomberg New Energy Finance
0
2
4
6
8
10
12
14
16
18
20
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
North East Asia
LNG
BAFA (Germany
border price for
Russian gas)
NBP (UK)
Henry Hub (US)
> $8 spread
to Henry hub
~ $5 spread to
Henry Hub
~ $5 spread to
Henry Hub?

-60
-40
-20
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
Prudentlimit
Insolvency zone
Source: Bloomberg Intelligence; Bloomberg New Energy Finance
US INDEPENDENT OIL & GAS PRODUCER SOLVENCY RATIOS
Interest cover (EBITDA/Interest expense)
Leverage (total debt to capital %)
Note: size of bubbles represents net debt position for each company
2008

-60
-40
-20
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
Prudentlimit
Insolvency zone
2009

-60
-40
-20
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
Prudentlimit
Insolvency zone
2010

-60
-40
-20
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
Prudentlimit
Insolvency zone
2011

-60
-40
-20
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
Prudentlimit
Insolvency zone
2012

-60
-40
-20
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
Prudentlimit
Insolvency zone
2013

-60
-40
-20
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
Prudentlimit
Insolvency zone
2014

-60
-40
-20
0
20
40
60
80
100
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
Prudentlimit
Insolvency zone
2015
$234 bn of US energy junk debt outstanding
52 companies filing Chapter 11 since start 2015
69 companies under credit ratings review

0
200
400
600
800
1000
1200
1400
1600
1800
0
5
10
15
20
25
30
35
40
45
50
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Marcellus
Haynesville
Eagle Ford
Fayetteville
Barnett
Woodford
Bakken
Antrim
Utica
Other Shale
Gas rigs online0
200
400
600
800
1000
1200
1400
1600
1800
0
5
10
15
20
25
30
35
40
45
50
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Marcellus
Haynesville
Eagle Ford
Fayetteville
Barnett
Woodford
Bakken
Antrim
Utica
Other Shale
Gas rigs online
US DRY SHALE GAS PRODUCTION BY PLAY VS RIG COUNT
Source: EIA, Bloomberg New Energy Finance
Billion cubic feet per day Number of rigs online
0
200
400
600
800
1000
1200
1400
1600
1800
0
5
10
15
20
25
30
35
40
45
50
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Marcellus
Haynesville
Eagle Ford
Fayetteville
Barnett
Woodford
Bakken
Antrim
Utica
Other Shale
Gas rigs online
Rig count
down 8-fold
2007-16
Output per rig
up 11-fold
2007-16

LNG EXPORT CAPACITY BY COUNTRY/REGION
(MMTPA)
0
100
200
300
400
500
600
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Other
North America
Russia
East Africa
West Africa
Australia
North America
Australia
Other
Russia
West Africa
North Africa
Indonesia
Malaysia
Qatar
Demand
Pre-FID
Operational,under
constructionorpost-FID
Note: Pre final investment decision (Pre-FID) projects with <50% chance of success are excluded.

2000 2005 2010 2015 2000 2005 2010 2015 2000 2005 2010 2015
COAL CONSUMPTION BY REGION (MTOE)
OECD - DECLINING CHINA - FLATTENING NON-OECD EX CHINA - SLOWING
Year on year % change Year on year % change Year on year % change
-1%
1%
3%
1% 1% 1%
2%
-2%
-11%
6%
-2%
-4%
1%
-2%-1%
2000 2005 2010 2015
-1%
1%
3%
1% 1% 1%
2%
-2%
-11%
6%
-2%
-4%
1%
-2%-1%
2000 2005 2010 2015
-1%
1%
3%
1% 1% 1%
2%
-2%
-11%
6%
-2%
-4%
1%
-2%-1%
2000 2005 2010 2015
-1%
1% 3%
1% 1% 1% 2%
-2%
-11%
6%
-2%
-4%
1%
-2%-1%
2000 2005 2010 2015
5%
10%
19%
17%17%
10%9%
2%
5% 4%
9%
1% 2%
0%
-4%
2000 2005 2010 2015
1%
5% 3%
10%
7% 6%
8%
10%9%
4% 4%
12%
7%
11%10%
2000 2005 2010 2015
Coal consumption (Mt/yr) Coal consumption (Mt/yr) Coal consumption (Mt/yr)
1,216Mt
1,042Mt
1,900Mt1,896Mt
876Mt
533Mt

0
50
100
150
200
250
1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Note: Pre-1913, data is available only for 10-year average annual consumption Source: UK DECC, Bloomberg New Energy Finance
UK COAL DEMAND, 1860–2015
(MT/YR)

BENCHMARK THERMAL COAL PRICES
($/T REAL 2016$)
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 2013 2014 2015 2016
ARA
Newcastle

Image: various company sources
Investment Pte
COAL IN DISTRESS

0
5
10
15
20
25
30
35
40
1870
1875
1880
1885
1890
1895
1900
1905
1910
1915
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Note: Includes NGL and processing gain, but excludes biofuels Source: IEA; CDIAC; BP; Bloomberg New Energy Finance
GLOBAL CARBON EMISSIONS FROM FOSSIL FUELS
(GIGATONNES CO2/YEAR)
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
30
32
34
36
5.5% 5.7% 3.1% 5.4% 4.2% 3.4% 3.4% 3.4% 3.5%
0%
2%
4%
6%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
5.5% 5.7% 3.1% 0% 5.4% 4.2% 3.4% 3.4% 3.4% 3.5%
Global GDP
growth (real)

Picture: Thehigherlearning.com
CLEAN POWER PLAN
The Clean Power Plan is the
single most important step
America has ever taken in
the fight against global
climate change
President Obama
Speech 3 August 2015

Note: PTC extension case assumes 5-year phase-out. 2015 onwards is forecast. PTC is production tax credit. ITC is investment tax credit Source: Bloomberg New Energy Finance
IMPACT OF PTC & ITC EXTENSION
2.2
3.3
4.9
6.4 7.3
9.1
3.4
5.5 6.1 6.7 7.4
2011
2012
2013
2014
2015e
2016e
2017e
2018e
2019e
2020e
2021e
No extension
2.2
3.3
4.9
6.4 7.3
9.1
3.4
5.5 6.1 6.7 7.4
6.2
3.5
4.0
4.0 3.5
-2.8
2011
2012
2013
2014
2015e
2016e
2017e
2018e
2019e
2020e
2021e
No extension Extension
6.7
13.9
0.6
5.1
8.7 9.4
2.1 1.4
2.9
4.2 3.3
5.6
10.2
3.4 1.4
2011
2012
2013
2014
2015e
2016e
2017e
2018e
2019e
2020e
2021e
No extension
6.7
13.9
0.6
5.1
8.7 9.4
2.1 1.4
2.9
4.2 3.3
5.6
10.2
3.4 1.4
-2.8
-0.6
2011
2012
2013
2014
2015e
2016e
2017e
2018e
2019e
2020e
2021e
No extension Extension
WIND INSTALLATIONS (GW) SOLAR INSTALLATIONS (GW)Additional 19GW
of wind
2016-2021
Additional 18GW
of solar
2016-2021

NEW INVESTMENT IN THE US
Q1 2004-Q4 2015 ($BN)
1.21.7
0.9
1.72.0
3.6
2.1
4.3
6.36.56.4
10.3
7.37.4
9.4
11.4
9.6
11.1
8.3
7.3
3.1
8.7
6.5
5.6
6.7
9.4
7.2
12.6
5.9
16.4
18.5
9.69.2
14.8
8.0
9.3
3.9
9.6
6.4
16.1
8.9
12.0
10.5
9.18.9
13.3
12.1
10.4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Four quarter running average
1.21.7
0.9
1.72.0
3.6
2.1
4.3
6.36.56.4
10.3
7.37.4
9.4
11.4
9.6
11.1
8.3
7.3
3.1
8.7
6.5
5.6
6.7
9.4
7.2
12.6
5.9
16.4
18.5
9.69.2
14.8
8.0
9.3
3.9
9.6
6.4
16.1
8.9
12.0
10.5
9.18.9
13.3
12.1
10.4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
6
?
Note: Total values include estimates for undisclosed deals. Excludes corporate and government R&D, and spending for digital energy and energy
storage projects (reported in annual statistics only).
1.9
4.0
1.62.12.5
4.0
2.73.12.5
5.2
2.8
4.13.0
5.5
4.13.73.3
5.8
4.64.74.4
7.4
5.5
7.46.8
9.0
11.5
9.1
7.77.6
10.7
6.76.35.85.55.34.9
2.6
1.9
4.94.9
4.2
1.4
4.3
2.2
4.3
0.60.8
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Wind farms are a disaster
for the environment. They
kill the birds. They are very
expensive in terms of
energy. They're made in
China.
Donald Trump
Presidential Candidate
Picture: Michael Nagle/Bloomberg
TRUMP ON WIND

I am very proud that the
State of Vermont has
banned fracking. I hope
that communities all over
America do the same.
Bernie Sanders
Presidential Candidate
BERNIE ON GAS
Picture: CNN

storage projects (reported in annual statistics only). Source: Bloomberg New Energy Finance
NEW INVESTMENT IN CHINA
Q1 2004-Q4 2015 ($BN)
0.60.30.60.81.4
2.21.5
2.42.12.1
3.13.13.1
3.9
5.2
3.63.8
7.8
6.66.3
7.27.3
10.3
12.7
7.5
10.2
10.9
10.8
10.5
15.0
10.7
9.710.1
19.8
16.3
13.9
7.9
18.7
17.4
15.7
14.1
24.5
26.0
20.7
18.9
32.9
25.7
23.7
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CHINA’S ECONOMY – OFFICIAL STATISTICS
GDP (2013 USD)
0%
2%
4%
6%
8%
10%
12%
14%
0
2
4
6
8
10
12
14
2000 2005 2010 2015
Source: Bloomberg New Energy Finance, National Bureau of Statistics of China
%yoy change
0%
5%
10%
15%
20%
0
1
2
3
4
2000 2005 2010 2015
ENERGY (BN TOE)
Previous forecasts for coal consumption
subsequently revised up
0
1
2
3
4
2000 2005 2010 2015
COAL (MTCE) EMISSIONS (GTCO2E)
-5%
0%
5%
10%
15%
20%
25%
-3
0
3
6
9
12
15
2000 2005 2010 2015

0%
5%
10%
15%
20%
0
50
100
150
200
2000 2005 2010 2015
Gas Coal
Nuclear Hydro
Non-hydro
renewables
CHINA POWER SECTOR INVESTMENT AND CAPACITY FACTORS
Note, Historical investment data for fossil capacity is based on real data for capacity additions and estimates of costs per unit of capacity. A
lead time of three years is assumed for fossil capacity from investment to commissioning, four years for hydro and five years for nuclear plants.
Source: Bloomberg New Energy Finance,
China National Bureau of Statistics
POWER CONSUMPTION
(TWH)
INVESTMENT IN GENERATION CAPACITY
($BN/YEAR, REAL 2015$)
0%
4%
8%
12%
16%
20%
24%
0
1,000
2,000
3,000
4,000
5,000
6,000
2000 2005 2010 2015
%yoy change
Average thermal
plant capacity
factor
2011 61%
2015 49%

RENEWABLE ENERGY PROPORTION OF POWER GENERATION,
10 YEARS TO 2014 (%)
Canada
76%
US
13%
Brazil
71%
China
22%
Japan
11%
Australia
16%
India
6%
S. Africa
2%
9% 13%
US
61% 65%
Canada
9% 13%
Japan
16%
23%
China
8%
13%
Australia
16% 16%
India
1% 1%
South
Africa
88%
75%
Brazil0% Lowest
50% Mid
100% Highest Note: Includes hydro Source: BP Statistical Review of Energy, Bloomberg New Energy Finance
15%
40%
Spain
4%
19%
UK
16%
44%
Italy
27%
57%Denmark
10%
26%
Germany

storage projects (reported in annual statistics only). Excludes large hydro, nuclear and natural gas. Source: Bloomberg New Energy Finance
NEW INVESTMENT IN CLEAN ENERGY IN EUROPE
Q1 2004-Q4 2015 ($BN)
4.2
8.9
4.3
5.46.3
10.9
7.0
8.17.8
13.9
7.9
16.1
9.7
16.8
14.3
24.8
14.0
23.5 22.1
20.0
13.5
27.6
22.3
17.1
22.4
25.1
29.6
33.6
27.6
34.5
30.7
26.7
21.3
23.6
19.3
21.7
15.6
12.9
13.0
14.7
13.6
16.4
11.3
18.2
10.0
16.1
6.3
13.9
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

NEW INVESTMENT – SELECTED EUROPEAN COUNTRIES
Q1 2004-Q4 2015 ($BN)
storage projects (reported in annual statistics only). Excludes investment in nuclear.
2004 2015
ItalyITALY
$0bn
$20bn
$40bn
2004 2015
SpainSPAIN
2004 2015
GermanyGERMANY
2004 2015
FranceFRANCE
2004 2015
UKUK

PARIS AGREEMENT
Picture: UNFCC

The world must achieve
greenhouse gas neutrality
some time in the second half
of the century
PARIS – LONG TERM VISION
Paris Agreement
December 2015
Picture: Wikimedia

GLOBAL GREENHOUSE GAS EMISSIONS
(GTCO2)
Source: UNFCCC, UNEP, Climate Action Tracker, Bloomberg New Energy Finance
30
35
40
45
50
55
60
65
1990 1995 2000 2005 2010 2015 2020 2025 2030
Historical emissions
INDC trajectory
Pre-COP21 pledges
30
35
40
45
50
55
60
65
1990 1995 2000 2005 2010 2015 2020 2025 2030
Historical emissions 2 C trajectory
INDC trajectory
Pre-COP21 pledges

Note: The area shows energy consumption, proximity to the axes shows distribution of consumption. The cross shows centre of the area. The line is the
historical trend. Axis based on square scale. Source: Bloomberg New Energy Finance, IEA
PRIMARY ENERGY SUPPLY CHARTS (MTOE)
4,000
2,000
1,000
250
2040
Renewable energy
Natural gas
OilCoal
Nuclear

Note: BNEF adjusted IEA NPS forecast using its own electricity generation and EV demand forecast. Renewables total excludes bioenergy. Source: Bloomberg New Energy Finance, IEA
GLOBAL PRIMARY ENERGY SUPPLY, 1975 (MTOE)
4,000
2,000
1,000
250
1975
Renewable energy
Natural gas
OilCoal
Nuclear

4,000
2,000
1,000
250
1980
Renewable energy
Natural gas
OilCoal
Nuclear

4,000
2,000
1,000
250
1985
Renewable energy
Natural gas
OilCoal
Nuclear

4,000
2,000
1,000
250
1990
Renewable energy
Natural gas
OilCoal
Nuclear

4,000
2,000
1,000
250
1995
Renewable energy
Natural gas
OilCoal
Nuclear

4,000
2,000
1,000
250
2000
Renewable energy
Natural gas
OilCoal
Nuclear

4,000
2,000
1,000
250
2005
Renewable energy
Natural gas
OilCoal
Nuclear

4,000
2,000
1,000
250
2010
Renewable energy
Natural gas
OilCoal
Nuclear

4,000
2,000
1,000
250
2015
Renewable energy
Natural gas
OilCoal
Nuclear

GLOBAL PRIMARY ENERGY SUPPLY (MTOE)
4,000
2,000
1,000
250
2015
Renewable energy
Natural gas
OilCoal
Nuclear
IEA 450ppm
2040 scenario

GLOBAL PRIMARY ENERGY SUPPLY (MTOE)
4,000
2,000
1,000
250
2015
Renewable energy
Natural gas
OilCoal
Nuclear
Paris 2100
illustrative
scenario
IEA 450ppm
2040 scenario

We need an
energy miracle
Picture: Bloomberg
ENERGY MIRACLE
Bill Gates
February 2016

Picture: Bloomberg
ENERGY MIRACLE
Within the next 15 years I
expect the world will discover
a clean energy breakthrough
that will save our planet and
power our world.
Bill Gates
February 2016

Baseload
power price
Cost of
nuclear
0
20
40
60
80
100
120
2001 2003 2005 2007 2009 2011 2013 2015
HINKLEY C PROJECTED POWER COST
(GBP/MWH)
Image: EDF; Source: ECIU, Parsons Brinckerhoff, Mott MacDonald, E.On, EDF, Centrica, Bloomberg New Energy Finance
Baseload
power price
Cost of
nuclear
0
20
40
60
80
100
120
2001 2003 2005 2007 2009 2011 2013 2015
+126%
Hinkley
Point C
CfD

NEXT GENERATION NUCLEAR FISSION
TerraPower
TWR
Babcock & Wilcox
mPower
Terrestrial
Energy IMSR80
General Atomics
EM2
Note: Not an exhaustive list – excludes Gen IV startups such as Transatomic, Flibe and Upower, and all non-US efforts
Westinghouse
SMR
Nuscale
SMR
Pictures: company websites
Holtec
SMR-160

Image: Joint European Torus
NUCLEAR FUSION

Source: General Fusion
ITER CADARACHE
Images: ITER collaborative; Source: various
Cost:
First Plasma:
2006
$6 bn
2019
2009
$12 bn
2019
2014
$21 bn
2020
2016
$25 bn?
2026

Image: General Fusion
ENERGY MIRACLE – GENERAL FUSION?

Image: Max Planck Institut für Plasmaphysik
ENERGY MIRACLE – WENDELSTEIN STELLERATOR?

Image: Lockheed Martin
RENEWABLE ENERGY

ENERGY MIRACLE? SOLAR
Source: Maycock, Bloomberg New Energy Finance
1
10
100
1,000
10,000
100,000
1
5
50
1975 1980 1985 1990 1995 2000 2005 2010 2015
Crystalline silicon PV module price (2015 $/W(DC)) - LH scale
1
10
100
1,000
10,000
100,000
1
5
50
1975 1980 1985 1990 1995 2000 2005 2010 2015
Volume installed (MW) - RH scale Crystalline silicon PV module price (2015 $/W(DC)) - LH scale
$/W (DC) MW Installed
Costs down
150 x
Cumulative
installations
up 115,000x

0.1%
0.2%
0.4%
0.8%
1.6%
3.1%
6.3%
12.5%
25.0%
2000 2002 2004 2006 2008 2010 2012 2014
RENEWABLES SHARE OF GENERATION, 2000–15
(% OF SYSTEM TOTAL)
Note: Y-axes are logarithmic with base 2 Source: Bloomberg New Energy Finance, BP, UNEP
WIND
Four
doublings
SOLAR
0.0%
0.0%
0.0%
0.0%
0.1%
0.2%
0.4%
0.8%
1.6%
3.1%
6.3%
12.5%
25.0%
2000 2002 2004 2006 2008 2010 2012 2014
Seven
doublings
0.05%
0.03%
0.01%
15 years 15 years

Images: Gatesnotes.com, D-Light; Source Bloomberg New Energy Finance
ENERGY MIRACLE – SOLAR?
$2!

9
15
21
30
40
51
62
74
2
4
4
6
8
12
17
25
1 2 5
11
19
25
36
48
62
79
99
2010 2012 2014 2016f 2018f 2020f
Note: Large solar home systems are defined as larger than 10W solar panels. Historical data is based on Lighting Global and GOGLA data and
Bloomberg New Energy Finance estimates.
Source: Bloomberg New Energy Finance, Lighting Global,
GOGLA
OFF-GRID SOLAR USERS
(MILLION HOUSEHOLDS)
Large solar home systems
Portable solar lanterns
and small home systems
or

IEA GLOBAL WIND AND SOLAR CAPACITY FORECASTS VS BNEF
GW INSTALLED
WIND SOLAR
Source: IEA, Bloomberg New Energy Finance,
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2000
2005
2010
2015
2020
2025
2030
2035
2040
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2000
2005
2010
2015
2020
2025
2030
2035
2040
00000000000
2…2…2…2…2…2…2…2…2…
WEO 2002
WEO 2004
WEO 2006
WEO 2008
WEO 2009
WEO 2010
WEO 2011
WEO 2012
WEO 2013
WEO 2014
WEO 2015
Actual
BNEF forecast
Revised up
5-fold since
2000
Revised
up 14-fold
since
2000

Picture: Viking/Penguin
BILL GATES ON THE INTERNET – 1994
The Internet has enormous
potential, but it’s important that
expectations aren’t cranked too
high. The total number of users
is still a very small portion of
the population.
Bill Gates
The Road Ahead
(written 1994)

Image: Microsoft
BILL GATES INTERNET TIDAL WAVE MEMO – 1995
Now I assign the Internet
the highest level of importance.
In this memo I want to make
clear that our focus on the
Internet is crucial to every part
of our business.
Bill Gates
Memo to Microsoft Staff, 1995

276,000 orders276,000 orders
$11.6 billion
TESLA MODEL 3
iPhone 6
10 million phones
$3.5 billion
Star Wars Force Awakens
1st Weekend box-office
$0.5 billion
– FIRST THREE DAYS

Images: Tesla GM; VW; Nissan; Wikimedia Commons
EV MASS MARKET: $30,000 + 200 MILES RANGE
Tesla Model 3
BMW i3
VW e-Golf
Chevy Bolt
Nissan Leaf

0
100
200
300
400
500
600
700
800
900
1,000
1,100
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Observed values:
BNEF annual EV
lithium-ion battery
price index
EV LITHIUM-ION BATTERY PACK PRICE
($/KWh)
Note: Forecast range based on a learning rate of 14-20%. EV cost parity is calculated on an unsubsidised total cost of ownership (TCO) basis.
Date range reflects cross over with different vehicle classes in the US. Source: Bloomberg New Energy Finance. EV lithium-ion battery price index
Observed values,
BNEF EV Lithium-Ion
battery price index
Reported future value,
major manufacturers
EV lithium-Ion battery
pack prices will have
fallen 77% between
2010 and 2018

EV LITHIUM-ION BATTERY PACK PRICE
($/KWh)
0
100
200
300
400
500
600
700
800
900
1,000
1,100
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Observed values:
BNEF annual EV
lithium-ion battery
price index
EV cost parity
cross-over
Observed values,
BNEF EV Lithium-Ion
battery price index
Reported future value,
major manufacturers
Projected price, based on
14-19% experience curve
EV cost parity
crossover with IC
cars on capital cost
alone
Note: Forecast range based on a learning rate of 14-20%. EV cost parity is calculated on an unsubsidised total cost of ownership (TCO) basis.
Date range reflects cross over with different vehicle classes in the US. Source: Bloomberg New Energy Finance. EV lithium-ion battery price index
EV lithium-Ion battery
pack prices will have
fallen 77% between
2010 and 2018

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
20
40
60
80
100
120
140
2015 2020 2025 2030 2035 2040
m vehicles sold per year % of new car sales
GLOBAL LIGHT DUTY VEHICLE AND EV ANNUAL SALES, 2015–40
(M VEHICLES SOLD PER YEAR, %)
Note: forecast uses Gasoline and electricity prices from EIA’s 2015 Annual Energy Outlook ‘Low Oil Price’ scenario (ranging from $50 to $65 per barrel
between 2015 and 2025). High scenario assumes greater vehicle utilisation. Low scenario assumes $20 per barrel oil price Source: Bloomberg New Energy Finance
0%10%20%30%40%50%60%70%80%90%100%
020406080100120140
2015 2020 2025 2030 2035 2040
ICE + HEV BEV PHEV EV % of new sales
m vehicles sold per year % of new car sales
Shared vehicle
scenario
$20 oil
scenario
By 2040
Up to 50%
of new cars
will be EVs

0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2015 2020 2025 2030 2035 2040
ELECTRICITY DEMAND FROM EVS
(TWH/YR)
ELECTRIFICATION OF TRANSPORTATION - IMPACTS
EV SALES BY REGION IN 2040
(MILLION VEHICLES)
Europe
15%
USA
21%
China
35%
Japan
3%
Rest of the
world
26%
Total
41m
Total global electricity
demand excluding EVs
Electricity demand from EVs
Chinese
car industry
leadership
Around 10%
additional
power
demand
OIL DEMAND DISPLACED BY EVS
(MILLION BARRELS / DAY)
0
2
4
6
8
10
12
14
2015 2020 2025 2030 2035 2040
Rest of
the world
Japan
Europe
USA
China
Destruction of
13m bbl/day
oil demand

Picture: Viking/Penguin
ENERGY MIRACLE
If you don’t invest in oil
and gas, you will see [an
oil price of] more than
$200 [per barrel]
Abdalla El-Badri
Secretary General, OPEC

MATCHING SUPPLY AND DEMAND IS DONE DIFFERENTLY DEPENDING ON
THE TIMESCALE
II. CONTINUOUS
BALANCING
III. CONTROLLING
FREQUENCY
I. PLANNING FOR
EXTREMES
Demand
Variable supply
Years to Months Days to minutes Seconds to minutes

TRANSFORMING THE GRID
Coal-fired generation
Incumbent
technologies
Gas-fired generation
Nuclear
Reservoir hydro
Pumped hydro
Interconnectors
Intermittent renewables
Demand response
New
technologies
Battery storage
Thermal storage
Chemical storage
Power to gas
Months to years
ahead
Minutes to days
ahead
2016 Seconds to
minutes after

TRANSFORMING THE GRID
Coal-fired generation
Incumbent
technologies
Gas-fired generation
Nuclear
Reservoir hydro
Pumped hydro
Interconnectors
Intermittent renewables
Demand response
New
technologies
Battery storage
Thermal storage
Chemical storage
Power to gas
Months to years
ahead
Minutes to days
ahead
Seconds to
minutes after
2016
Future
Supergrids
Batteries
Bulk storage
CCS
New services
Gridchain

Unique analysis, tools and data for decision-makers driving
change in the energy system
sales.bnef@bloomberg.net
MARKETS
Renewable Energy
Energy Smart Technologies
Advanced Transport
Gas
Carbon and RECs
SERVICES
Americas Service
Asia Pacific Service
EMEA Service
Applied Research
Events and Workshops
Michael Liebreich
@MLiebreich
mliebreich@bloomberg.net
support.bnef@bloomberg.net
Thanks!

STATE OF THE INDUSTRY KEYNOTE BNEF SUMMIT 2016

Recommended

Recommended

More Related Content

What's hot

What's hot (6)

Viewers also liked

Viewers also liked (20)

Similar to STATE OF THE INDUSTRY KEYNOTE BNEF SUMMIT 2016

Similar to STATE OF THE INDUSTRY KEYNOTE BNEF SUMMIT 2016 (20)

More from Tuong Do

More from Tuong Do (20)

Recently uploaded

Recently uploaded (20)

STATE OF THE INDUSTRY KEYNOTE BNEF SUMMIT 2016