Bloomberg New Energy Finance Summit · 4/25/2017 · 1 Michael Liebreich Bloomberg New Energy...

Bloomberg New Energy Finance SummitNew York

Michael Liebreich

Chairman of the Advisory Board

Twitter: @mliebreich

25 April 2017

1 Michael Liebreich Bloomberg New Energy Finance Summit, 25 April 2017 @mliebreich

$62bn

$88bn

$128bn

$175bn

$205bn $207bn

$276bn

$317bn

$291bn

$269bn

$315bn

$349bn

$287bn

0

100

200

300

400

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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

Global new clean energy investment

Forecast

Record

investment

Source: Bloomberg New Energy Finance


Source: Bloomberg New Energy Finance; ImagesSiemens; Wikimedia Commons

Unsubsidised clean energy world records, April 2016

Country:

Bidder:

Signed:

Construction:

Price:

Morocco

Enel Green Power

January 2016

2018

US$ 3.0 c/kWh

Country:

Bidder:

Signed:

Construction:

Price:

Coahuila Mexico

Enel Green Power

March 2016

2019

US$ 3.60 c/kWh

Solar PV Onshore wind Offshore wind

Country:

Bidder:

Signed:

Construction:

Price:

Denmark

Vattenfall

Dec 2015

2019

US$ 5.3 c/kWh


Global carbon emissions from fossil fuels

0

5

10

15

20

25

30

35

40

187

0

187

5

188

0

188

5

189

0

189

5

190

0

190

5

191

0

191

5

192

0

192

5

193

0

193

5

194

0

194

5

195

0

195

5

196

0

196

5

197

0

197

5

198

0

198

5

199

0

199

5

200

0

200

5

201

0

201

5

Note: Includes NGL and processing gain, but excludes biofuels Source: IEA; CDIAC; BP; Bloomberg New Energy Finance

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%

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

5.5% 5.7% 3.1% 0% 5.4% 4.2% 3.4% 3.4% 3.4% 3.5%

Global GDP growth (real)

GtCO2e


Image: Skinbase; M Liebreich

The 2016 election


$62bn

$88bn

$128bn

$175bn

$205bn $207bn

$276bn

$317bn

$291bn

$269bn

$315bn

$349bn

$287bn

0

100

200

300

400

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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 New Energy Finance

0

20

40

60

80

100

120

140

160

180

0

100

200

300

400

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

20GW

88GW

160GW

Forecast

2016

Investment

down 17%

2016

Installations

up 9%

Global new clean energy investment and capacity installation



Unsubsidised clean energy world records April 2016

Country:

Bidder:

Signed:

Construction:

Price:

Morocco

Enel Green Power

January 2016

2018

US$ 3.0 c/kWh

Country:

Bidder:

Signed:

Construction:

Price:

Coahuila Mexico

Enel Green Power

March 2016

2019

US$ 3.60 c/kWh


Country:

Bidder:

Signed:

Construction:

Price:

Denmark

Vattenfall

Dec 2015

2019

US$ 5.3 c/kWh



Unsubsidised clean energy world records since April 2016

Country:

Bidder:

Signed:

Construction:

Price:

Morocco

Enel Green Power

January 2016

2018

US$ 3.0 c/kWh


Country:

Bidder:

Signed:

Construction:

Price:

United Arab Emirates

Masdar/DEWA

May 2016

2018

US$ 2.99 c/kWh

Country:

Bidder:

Signed:

Construction:

Price:

Denmark

Vattenfall

Dec 2015

2019

US$ 5.3 c/kWh




Country:

Bidder:

Signed:

Construction:

Price:

Morocco

Enel Green Power

January 2016

2018

US$ 3.0 c/kWh

Country:

Bidder:

Signed:

Construction:

Price:

Chile

Solarpack Corporation

August 2016

2019

US$ 2.91 c/kWh


Country:

Bidder:

Signed:

Construction:

Price:

Denmark

Vattenfall

Dec 2015

2019

US$ 5.3 c/kWh




Country:

Bidder:

Signed:

Construction:

Price:

Morocco

Enel Green Power

January 2016

2018

US$ 3.0 c/kWh

Country:

Bidder:

Signed:

Construction:

Price:

Mexico

X-Elio

September 2016

2019

US$ 2.74 c/kWh


Country:

Bidder:

Signed:

Construction:

Price:

Denmark

Vattenfall

Dec 2015

2019

US$ 5.3 c/kWh




Country:

Bidder:

Signed:

Construction:

Price:

Morocco

Enel Green Power

January 2016

2018

US$ 3.0 c/kWh


Country:

Bidder:

Signed:

Construction:

Price:

Mexico

FRV

September 2016

2019

US$ 2.69 c/kWh

Country:

Bidder:

Signed:

Construction:

Price:

Denmark

Vattenfall

Dec 2015

2019

US$ 5.3 c/kWh




Country:

Bidder:

Signed:

Construction:

Price:

Morocco

Enel Green Power

January 2016

2018

US$ 3.0 c/kWh

Country:

Bidder:

Signed:

Construction:

Price:

Mexico

FRV

September 2016

2019

US$ 2.69 c/kWh


Country:

Bidder:

Signed:

Construction:

Merchant Price:

Germany

DONG/EnBW

April 2017

2024

US$ 4.9 c/kWh

Note: The offshore wind merchant price is estimated based on project LCOE in real 2016 terms


0

50

100

150

200

250

300

2008 2009 2010 2011 2012 2013 2014 2015 2016

Renewables excluding large hydro

Fossil fuels

Large hydro

Nuclear

Source: Bloomberg New Energy Finance, UNEP

Investment in power capacity, by technology

$ billion/year


1.5 0.5 0.97.7

3.4 5.1

15.4

37.8

49.6

95.7

0

25

50

75

100

125

150

2007 09 11 13 15 17E

Issuance by category ($ billion)

ABS/MBS

Project

Corporations

Financials

Municipal

Governmentagencies

Sovereigns

Supranationals

123.0

Note: 1Q 2017 issuance was $30 billion. 2017 estimate is based on growth on previous years Source: Bloomberg New Energy Finance, Bloomberg Terminal

Green bond issuance

1.5 0.5 0.97.7

3.4 5.1

15.4

37.8

49.6

95.7

0

25

50

75

100

125

150

2007 09 11 13 15 17E

Issuance by geography ($ billion)

Supranational

APAC

AMER

EMEA

123.0


Source: IEA; CDIAC; BP; Bloomberg New Energy Finance

Global carbon emissions from fossil fuels

0

5

10

15

20

25

30

35

40

1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

30

32

34

36

5.5 5.7 3.1 5.4 4.2 3.4 3.4 3.4 3.5

5.5%5.6%3.0%

-0.1%

5.4%4.2%3.5%3.4%3.5%3.4%3.1%

-2%

0%

2%

4%

6%

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

0%

Global GDP growth (real)

GtCO2e


China new investment in clean energy($ billion)


Source: Bloomberg New Energy Finance,

China Electricity Council, National Energy Administration

China yoy% growth in power demand Thermal capacity factor and RE curtailment

China snapshotQ

1

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

2010 2011 2012 2013 2014 2015 2016

0%

5%

10%

15%

20%

25%

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

2010 2011 2012 2013 2014 2015 2016

0%

10%

20%

30%

40%

50%

60%

70%

Average thermal capacity factor

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

2010 2011 2012 2013 2014 2015 2016

0%

10%

20%

30%

40%

50%

60%

70%

Average thermal capacity factor

Wind curtailment

Solar curtailment

Note: Thermal capacity factor includes all fossil fuel-fired thermal capacity. Wind and solar

curtailment figures are not national averages, but refer to select provinces which exhibited the

worst cases of curtailment nationally over the period


Image: Twitter

Price of renewable energy in India

The cost of solar power is

now cheaper than coal in

this country.

Piyush Goyal

Minister of State for Power, Coal, New &

Renewable Energy and Mines, India


0

5

10

15

20

25

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

GW

Annual capacity additions

Rate needed to achieve Modi plan


Annual capacity additions vs Modi plan India clean energy investment

India snapshot

Note: Modi plan annual additions rate assumes linear trajectory to 175GW 2022 target. Figures exclude large hydro

2.8 3.2

5.4

6.8

5.8

4.3

9.0

13.7

8.1

6.6

8.5

9.69.2

0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$bn


Europe new investment in clean energy($ billion)


Emissions from coal-fired power, 2008-16

Source: Bloomberg New Energy Finance, Eurostat

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2008 2013

tCO2e/yr

Germany Poland UK Greece Czech Rep Bulgaria Spain Italy Romania Netherlands

tCO2e/yr


US new investment in clean energy($ billion)


Note: Cumulative over 2000–16 Source: Bloomberg New Energy Finance

Annual Cumulative

0

2

4

6

8

10

12

14

16

2000 2002 2004 2006 2008 2010 2012 2014 2016

GW

0

10

20

30

40

50

60

70

80

90

2000 2002 2004 2006 2008 2010 2012 2014 2016

GW

US wind installations

2008-16

Up 262%


0

2

4

6

8

10

12

14

16

2000 2002 2004 2006 2008 2010 2012 2014 2016

GW

0

5

10

15

20

25

30

35

40

45

2000 2002 2004 2006 2008 2010 2012 2014 2016

GW

Note: Cumulative over 2000–16 Source: Bloomberg New Energy Finance

Annual Cumulative

US solar installations

2008-16

Up 4,645%


Source: Bloomberg New Energy FinanceNote: 2016 US residential and C&I PV build figures are estimated

US small-scale solar build by type

0.8 0.9 1.0 0.81.1

0.50.8

1.2

2.0

2.3

1.4

1.7

2.2

2.9

3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2012 2013 2014 2015 2016e

Commercial and industrial Residential

GW

Up 143%


01234567891011

0.00.51.01.52.02.53.03.54.04.55.05.5

2008 2009 2010 2011 2012 2013 2014 2015 2016

Solar Wind Biomass & Waste Fuel Cells Cumulative

Note: Incremental build left axis, columns; cumulative build right axis, red line


US corporate procurement of clean energy

Incremental build

(GW)

Cumulative build

(GW)

Up 5,150%

cumulatively


Source: EPA, Bloomberg New Energy FinanceSource: ACEEE, NAESCO, LBNL, CEE, IAEE, Bloomberg New Energy Finance

US estimated investment in energy

efficiencyEnergy Star-certified floor space in US

non-residential buildings

US energy efficiency investment

0

2

4

6

8

10

12

14

'90 '95 '00 '05 '10 '15

Other

Publicbuildings

Commercial& Industrial

Residential

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1999 2001 2003 2005 2007 2009 2011 2013 2015

Other

Mixed UseProperty

Warehouse andStorage

Lodging

Healthcare

Mercantile

Education

Offices

$ billion (nominal) Billions of square feet2008-15

Up 100%

2008-15

Up 220%


Source: Bloomberg New Energy Finance, EIA

Notes: Includes data for smart electricity meters, excludes automated meters. Smart

meters are defined as those capable of two-way communication over a fixed network.

US smart meter deployments (million units)

US electric smart meter deployment

3.65.9

12.2 12.6

10.0

5.24.1

6.7 5.9

0

10

20

30

40

50

60

70

80

0

2

4

6

8

10

12

14

2008 2009 2010 2011 2012 2013 2014 2015 2016

CumulativeAnnual Up 4,300%

cumulative


0

500

1,000

1,500

2,000

2,500

3,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: EIA

US monthly natural gas production (bcf)

US gas production and rig efficiency

New-well production per rig (‘000 cf/day)

2007–17

Up 388%

2007–17

Up 35%


0

50

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

100

200

300

400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: EIA

US monthly oil production (mbbl)

US oil production and rig efficiency

New-well production per rig (bbl/day)

2007–17

Up 1,300%

2007–17

Up 83%


Note: The fuel economy targets have been normalised to the CAFE testing procedure. US targets are for passenger cars only. Source: EPA, NHTSA, EU, ICCT

Fuel economy regulations for China, US and Europe, 2000-25 (litres/100km)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

2000 2005 2010 2015 2020 2025

L/100 km

US

EU

China

Achieved fuel consumption Future standard

EU: 4.1US: 4.2

China: 4.9

2000–14

Up 21%


0

2

4

6

8

10

12

14

16

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Henry Hub gas prices

Note: Real 2017 $US Source: Bloomberg

$/MMBTU


0

20

40

60

80

100

120

140

160

180

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

US coal prices

Note: Central Appalachian benchmark price, real 2017 $US Source: Bloomberg

$/short ton


0

20

40

60

80

100

120

140

160

180

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Oil prices

Note: Front-month Brent crude contract, real 2017 $US Source: Bloomberg

$/bbl


Wind

Utility-scale PV

0

50

100

150

200

250

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$/MWh

Note: Levelized, time-of-day adjusted contract price shown in real 2015 USD. 2016 PV PPA price based on preliminary data and subject to review.

Source: U.S. Department of Energy (LBNL), Bloomberg New Energy Finance

Average US renewable energyPPA prices

2008–16

PV down

83%

2008–16

Wind down

71%


Source: US Energy Information Administration (EIA), Bureau of Economic Analysis,

Bloomberg Terminal

Note: Indexed to 1990 levels. Values for 2016 energy consumption are projected,

accounting for seasonality, based on latest monthly values from EIA (data available

through October 2016). GDP is real and chained (2009 dollars); annual growth rate for

GDP for 2016 is based on consensus of economic forecasts gathered on the Bloomberg

Terminal as of January 2017.

US GDP and primary energy

consumption

US energy productivity

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

199

0

1992

199

4

199

6

199

8

200

0

200

2

200

4

200

6

200

8

201

0

201

2

201

4

201

6

GDP (indexed)

Primary energy consumption (indexed)

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

0.20

199

0

199

2

199

4

199

6

199

8

200

0

200

2

200

4

200

6

200

8

201

0

201

2

201

4

201

6

Energy productivity

US energy productivity

$ trillion of GDP/quadrillion BTU2008-16

Up 13%


Source: Bloomberg New Energy Finance, EIA, EPA

US power sector emissions US total emissions

0

500

1,000

1,500

2,000

2,500

3,000

1990 1995 2000 2005 2010 2015 2020 2025

Power sector emissions

Greenhouse gas emissions and progress towards targets

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1990 1995 2000 2005 2010 2015 2020 2025

Total emissions including LULUCF

Obama 2020 target

2025 Paris goal

2008-16

Down 23%

~50%

towards

Paris goal

MtCO2e MtCO2e


0%

2%

4%

6%

8%

1960 65 70 75 80 85 90 95 2000 05 10 150%

2%

4%

6%

8%

1960 65 70 75 80 85 90 95 2000 05 10 15

2008-16

Down 20%

Source: US Bureau of Economic Analysis, Bloomberg New Energy Finance

Electricity & gas Gasoline

Share of US personal expenditure on energy

2008-16

Down 43%


Source: EIA

Generation by source Change in generation 2007-16

0

500

1,000

1,500

2,000

2,500

1990 1995 2000 2005 2010 2015

-800

-600

-400

-200

0

200

400

600

800

Displaced coal Energy efficiency Gas Renewables

Coal-776TWh/yr

Power demand-78TWh/yr

Gas+483TWh/yr

Renewables+256TWh/yr

US power sector fuel mix

TWh/yr TWh/yr

Coal

Natural gas

Nuclear

Renewables

Oil


Source: Bloomberg New Energy Finance, US Department of Labour

Jobs Productivity

US coal jobs and productivity

0

100

200

300

400

500

600

700

1931 40 50 60 70 80 90 2000 10 15

Thousand jobs

0

2,000

4,000

6,000

8,000

10,000

12,000

1931 40 50 60 70 80 90 2000 10 15

Tonnes per employee per year


Image: Komatsu

New generation of mining trucks


When we ramp up the [Carmichael]

mine, everything will be autonomous

from mine to port. In our eyes, this is

the mine of the future.”

Image: Adani Mining

Adani Mining Carmichael coal mineQueensland Australia

Jeyakumar “JJ” Janakaraju

Adani Mining CEO


Image: White House; EPA

Making America Great Again?


2015 BNEF SUMMIT KEYNOTE

AN AGE OF PLENTY…

… ON STEROIDS


US administration views on climate change

“The concept of global warming was created

by and for the Chinese in order to make US

manufacturing non-competitive”

Donald Trump, US Presidential Candidate 2016

(now President)

“I would not agree that [human activity] is a

primary contributor to the global warming

that we see”Scott Pruitt

EPA Director

“[Climate change] is all one contrived phony

mess that is falling apart under its own

weight. Al Gore is a false prophet of a secular

carbon cult”

Rick Perry, US Presidential Candidate 2012

(now Secretary of Energy)

“Climate change could be happening and it

could be a part of human action, but its costs

in the near term certainly are not great”

Jeff Sessions, 2015

(now US Attorney General)


Investing in

fossil-fuel energy

and transport

assets…

Source: Various; BNEF

I’m not a climate scientist but…

means we

emit more

greenhouse

gases…(NASA et al.)

which

accumulate in

the

atmosphere…(NOAA et al.)

driving human

climate

forcing…(EPA et al.)

thereby

pushing up

temperatures...(Berkeley et al.)

and causing

climate

impacts(IPCC et al.)


201620302045

Source: Coastal Risk Consulting © Mapbox, © OpenStreetMap Graphic: Jan Diehm/The Guardian

Climate-related flood riskMar a Lago Club, Miami, Florida

Note: Blue areas indicate risk of flooding.


Source: Gallup

US public view of climate change

61% 61%59%

61%

54%52%

57%55%

68%

33% 33%35% 35%

42% 43%39%

41%

29%

2001 03 05 07 09 11 13 15 17

Human activity

Natural causes

Do you believe increases in the Earth’s temperature are due

more to the effects of pollution from human activities or natural

changes in the environment that are not due to human activities?


Image: EKB TV

Kentucky Coal Museum’s solar roofHarlan County


Images: various companies

Keeping America Great!


0

5

10

15

20

25

2016 2018 2020 2022 2024 2026 2028 2030

Millions

Rest of the world

Japan

China

USA

Europe

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).

Source: Bloomberg New Energy Finance.

BNEF global EV sales forecast by region EV penetration

by 2040

35-47% of new

cars


Source: Bloomberg New Energy Finance, Ofv.no

The Norwegian experience

75.5%64.3%

52.8% 48.7%40.9%

31.5%

20.1%

28.4%

35.2%

30.7%

29.7%

28.3%

2.8%4.5% 6.4%

6.9%

7.1%

11.2%

1.2%

5.2%13.3%

1.4%2.9% 5.5%

12.5% 17.1% 15.7%

2011 2012 2013 2014 2015 2016

Battery

Plug-in hybrid

Hybrid

Gasoline

Diesel

Split of annual car sales by type Vehicle choices

$75,117

Audi A7 Q

Price

(without tax):

Price

(with tax):

$75,117$82,363

29% of new

cars in Norway

have plugs

Tesla S 60D

$44,392


$1,000/kWh

$800/kWh

$642/kWh$599/kWh

$540/kWh

$350/kWh

$273/kWh

2010 11 12 13 14 15 16Source: Bloomberg New Energy Finance

Lithium-ion battery pack prices are down 73% since 2010

BNEF 2016 battery pack price survey results



Lithium-ion battery pack prices will drop another 75% by 2030Lithium-ion battery price forecast


0 50 100 150 200 250 300 350

Small vans

Runabouts

Hatchbacks

Sedans

Sports cars

SUVs/Trucks

Source: Bloomberg New Energy

Finance, Images various.

Notes: Not exhaustive.

(*) Range is estimate

BEV model availability, 2008-20

Venturi Fetish Tesla Roadster

20082009

Mitsubishi i-MiEV

BMW mini e

Smith Edison

2010Ford Transit

M-B E-CellHyundai

BlueOn

Nissan Leaf

Kia Ray

2011

Ford Focus

Renault KangooM-B Vito

BYD e6

Renault Fluence

2012Renault Twizy

Smart

ForTwo

Fiat 500e

Renault Zoe ZE

Tesla Model S

Toyota

RAV4

Honda Fit

CODA EV

2013Peugeot Partner

Exagon Furtive

M-B SLS eDrive

BMW i3

Chevy Spark

Mahindra e2o

VW

e-Up

2014

VW e-Golf

Nissan NV200

M-B B-Class

JAC iEV4

2015Kandi Panda Bollore

Bluesummer

Mullen 700e

ChangAn

Eado

2016

Chevy Bolt

Audi R8 E-tron

BYD T3

Mahindra eVerito

2017

Qianto Q50

Aston Martin

RapidE

Tesla Model 3

Hyundai Ioniq

2018

Land Rover

Defender

Honda Clarity

2019

Porsche E-sport

M-B EQ

Jaguar

I-Pace

Mitsubishi eX

2020

Tesla Roadster

GLM G4

VW e-Bulli

BAIC EU260

Geely Emgrand

Audi E-tron

Sportback

VW I.D.

VW I.D. CROZZ

NIO ES8*

Tesla Roadster*

ChangAn EM80

VW I.D. BUZZ

Renault DeZir

Trumpchi

GS4

SAIC E-Lavida

Tata

IRIS

VW I.D.*

Audi E-tron

Quattro

Tesla

Model Y*

BYD e5

Volvo 40.2*

Tesla

pickup*

Nissan Leaf 2*

Lucid Air

+ miles range per charge

Faraday

FF91

NIO EVELeEco LeSEE

Chehejia

SUV*

BMW i5

Seat Mii*

Tesla

Model XVW

Budd-e

NIO EP9


Source: Tesla; Bloomberg https://www.bloomberg.com/news/articles/2017-03-27/tesla-model-3-ramp-up-aims-to-crush-bmw-and-mercedes; Bloomberg New Energy Finance, Library of

Congress WWII Companion

Tesla’s gamble

WWII plane production

https://www.bloomberg.com/news/articles/2017-03-27/tesla-model-3-ramp-up-aims-to-crush-bmw-and-mercedes


Source: Bloomberg, Bloomberg New Energy Finance

Car company market capitalisation

$ billion

0

10

20

30

40

50

60

70

80

2011 2012 2013 2014 2015 2016 2017

Ford

GM

FCM

0

10

20

30

40

50

60

70

80

2011 2012 2013 2014 2015 2016 2017

Tesla


Source: Bloomberg New

Energy Finance

Disclosed timelines for autonomous vehicles from select companies, 2016 – 40

20

19

: In

tel +

De

lph

i +

M

ob

ileye

Le

ve

l 4

Au

di's

Le

ve

l 2

'Tra

ffic

Ja

m A

ssis

t'

2016 2017 2018 2020

Au

di's

Le

ve

l 3

'Tra

ffic

Ja

m P

ilot'

on

A8

2020+

Au

di's

Le

ve

l 3

+

BM

W's

Le

ve

l 2

on

'T

raff

ic J

am

Assis

tan

t'

2021: BMW's Level 4 in 'iNext'

Ford

'sL

eve

l 2

'Tra

ffic

Ja

m

Assis

t' a

nd

'F

ully

A

uto

ma

ted

Pa

rkin

g'

2021: Ford's Level 4

Ho

nd

a's

Le

ve

l 2

'S

en

sin

g'

Ho

nd

a's

Le

ve

l 3

'on

-ra

mp to

off

-ram

p'

2040: Honda's Level 4 by 2040 in all models

Kia

's L

eve

l 3

'Drive

W

ise

'

2030: Kia's Level 4 'Urban Autonomous Driving'

20

13

: M

erc

ed

es's

Le

ve

l2

'Dysto

nic

Plu

s'

Nis

sa

n's

Le

ve

l 4

'P

roP

ILO

T 3

.0'

Nis

sa

n's

Le

ve

l 2

'P

roP

ILO

T'

Nis

sa

n's

,L

eve

l 3

'P

roP

ILO

T 2

.0'

Me

rce

de

s's

Le

ve

l2

'D

ysto

nic

Pilo

t' o

n E

-C

lass

20

15

: T

esla

's L

eve

l 2

'A

uto

pilo

t'

Te

sla

's L

eve

l 4

'A

uto

pilo

t'

Vo

lvo

's L

eve

l 2

'Pilo

t A

ssis

t' o

n S

90

Vo

lvo

's L

eve

l 4

Drive

-M

e p

rogra

m

GM

's L

eve

l 2

'Su

pe

r C

ruis

e'

Go

ogle

's L

eve

l 4

2030: Uber's Level 4fleet in 2030

2025: VW's Level 4 'ID Pilot' i

2016-

Level 2 Level 3 Level 4/5

Legend

2022: Lyft Level 4 ride hailing cars


Source: California DMV; Recode; NHTSA; FHWA; BNEF

5000 x improvement in safety performance required

5,128

638

197

146

105

57

54

17

3

2

1

Google Waymo

BMW

Ford

Nissan

Uber (2017)

VW (2015)

GM Cruise

Delphi

Tesla

Mercedes

Bosch

AVs: distance between

human interventions (miles)

Distance between

fatalities (million miles)

15,342

9,178

6,667

137

4.7

Commercialaviation

Buses

Mainline trains

Cars & light trucks

Motorcycles

Humans: distance between

crashes (miles)

525,000US Average

x ~ 100*

x ~ 50

* Assumes one in 10 human interventions might otherwise have resulted in an accident


Image: Limousine Service Zurich

Rich people having empty cars drive round the block instead of parking


Image: Google Maps

When 20,789 people all want to get toMadison Square Gardens at the same time


Image: Obianuju Okafor

Algorithms which are individually smart and collectively dumb


Image: Bloomberg

Secretary Perry’s 60-day review

To what extent are regulatory

burdens, subsidies and tax policies

responsible for forcing the premature

retirement of baseload power plants

Rick Perry

Secretary of Energy


Note: Excludes large hydro Source: Bloomberg New Energy Finance

Renewable energy excl. large hydro, 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%

Italy

7%12%

Japan

3%9%

US

1% 3%

South Africa


Source: Bloomberg New Energy Finance, EIA

Renewable energy excl. large hydro, proportion of power generation, 2006-16

38%54%

Maine17%

100%Vermont

14%30%

California

5%

39%

Iowa

20%

47%

Idaho

2%

30%

South Dakota

2%

30%

Kansas

3%

26%

Oklahoma

7%23%

Minnesota

6% 8%

New York

2%13%

Texas0%

20%

50%+

Key: RE penetration


Source: Bloomberg New Energy Finance, various

Variable renewables high penetration

9 July 2015

Denmark

140% wind

May 2016

Germany

67% wind & solar

25 December 2016

Scotland

153% wind

23 March 2017

CAISO

46% wind & solar

9 April 2017

UK 56%

wind & solar

13 February 2017

SPP

52% wind

26 December 2014

South Australia

61% wind & solarNovember 2015

Spain

70% windNovember 2017

ERCOT

45% wind


34%

36%

38%

40%

42%

2010 2011 2012 2013 2014 2015 2016 2017

34%

36%

38%

40%

42%

2010 2011 2012 2013 2014 2015 2016 2017

36%

38%

40%

42%

44%

46%

2010 2011 2012 2013 2014 2015 2016 201715%

20%

25%

30%

35%

2010 2011 2012 2013 2014 2015 2016 2017

US average Texas Florida

Pennsylvania California Ohio

US thermal capacity factors

30%

35%

40%

45%

50%

2010 2011 2012 2013 2014 2015 2016 2017

30%

35%

40%

45%

50%

55%

2010 2011 2012 2013 2014 2015 2016 2017

Source: Bloomberg New Energy Finance, EIANote: Includes coal and gas capacity. 2017 is based on YTD generation and operational capacities reported in January.

Excludes backup capacity.


March of capacity markets Weaknesses of capacity markets

Regions recently or currently implementing

capacity-based mechanisms include:

Capacity markets

Over-procurement

• Inaccurate predictions of

supply and demand

• Political risk aversion

Innovation suppressed by:

• Artificially-shaped demand

• Bias towards incumbents

• Picking of winners


Evolving structure of power supply

Past – summer

Past – winter


-40

-20

0

20

40

60

80

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

-40

-20

0

20

40

60

80


Current – summer

Current – winter

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


-30.0

-10.0

10.0

30.0

50.0

70.0

90.0


GW

Peaking fossil Baseload fossil Nuclear CHP Hydro Baseload RE Solar Wind Pumped hydro generation/Storage Imports Exports/curtailment/DR

Added storage, interconnections

Reduced demand (exc. EVs)

Lots more variable renewables

Future – summer

Future – winter

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80



Past – summer

Past – winter

Current – summer

Current – winter

1. Whatever we come up with must work

winter and summer (doh!)


Future – summer

Future – winter


-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


5. Need lots of interconnection capacity

(else duck curves, curtailment)

2. Practically impossible to get rid of all

fossil fuel use

3. Even huge storage gets overwhelmed

by wind variability

4. Massive volatility, enormous ramp

rates

6. And if you think that’s complicated, it

has to work at every node too!



-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


Flexible generation – summer

Flexible generation – winter

-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


Low carbon generation – summer

Low carbon generation – winter

Future – summer

Future – winter


-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80


-30.0

-10.0

10.0

30.0

50.0

70.0

90.0


GW

Peaking fossil Baseload fossil Nuclear CHP Hydro Baseload RE Solar Wind Pumped hydro generation/Storage Imports Exports/curtailment/DR





-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80





1. Very cheap wind & solar

(“base cost renewables”)

3. Zero mid-day power

price every day in sunny

countries and windy days

2. Plus must-run CHP and

nuclear (and CCS?)

4. Dependent on flexible

power to meet non-

sunny, non-windy times

Future – summer

Future – winter


-40

-20

0

20

40

60

80


-40

-20

0

20

40

60

80







Future – summer

Future – winter


1. Demand response is likely

to be the cheapest

3. Interconnections

2. Storage

4. Fossil peakers

5. In case that’s not enough,

there will be curtailment


Option A: “Central Planning”



-50

-40

-30

-20

-10

0

10

20

30

Monday Tuesday WednesdayThursday Friday Saturday Sunday

Centrally designed capacity

market, with regulated returns

Centrally provisioned

interconnections, with regulated

returns

Curtailment


-50

-40

-30

-20

-10

0

10

20

30


-50

-40

-30

-20

-10

0

10

20

30




Option B: “Demand-Led” 1. Competitive, technology-neutral, liquid

markets across location and time

4. Flexibility costs charged to those who

cause them

2. Reliability standards at the retail level

5. Certificates of origin for imported power

6. Cost of stability-related ancillary

services borne by TSOs and DSOs

-50-40-30-20-100102030


Storage/DR Peaking fossil Exports/Curtailment

3. Carbon regulation via carbon price,

carbon intensity or retirement schedule


TOWARDS

DEMAND-LED

FLEXIBILITY

MARKETS

Coverage.

Renewable Energy

Power & Utilities

Gas

Carbon Markets & Climate

Negotiations

Energy Smart Technologies

Storage

Electric Vehicles

Mobility and Autonomous Driving

Frontier Power

Emerging Technologies

Bloomberg New Energy Finance is a research firm that helps energy

professionals generate opportunities. With a team of experts spread

across six continents, BNEF provides independent analysis and insight,

enabling decision-makers to navigate change in an evolving energy

economy.

BNEF research and analysis is accessible via web and mobile platforms,

as well as on the Bloomberg Terminal.

[email protected]

about.bnef.com

@BloombergNEF

Michael Liebreich

@mliebreich

Thanks!

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