Energy  Partnerships

Market  Drivers&  

Future  Opportunities

Energy  HuntsvilleThe  Energy  Summit  2016

PRESENTED BY:BOB COCHRAN

CTG, LLC

Events  Defining  The  Energy  Sector

ØTrump  FactorØClimate  Change  &  Greenhouse  

GasesØFukushima

ØFinds  &  FrackingØCyber

Today’s  Defining  Events  Trump  Factor • Not  Business  as  Usual

• Shift  to  Private  Sector  Initiatives/Development• Challenge  to  Clean  Power  Plan  &  Paris  Climate  Agreement

Climate  Change •Will  Continue  to  Define  Energy Generation• Opportunity  to  Innovate  – Onsite  vs.  Central  Generation• Driving:  

•Carbon  Free  &  Renewable  Generation  Technology•Enhanced  Energy  Conservation  Programs  &  Systems

Fukushima • Redefine  the  Nuclear  Renaissance  – Accelerated  Reactor                Shutdown• Enhanced  the  already  Impeccable  Safety  Envelope• Stalled  Deployment  of  Improved  Reactor  Technology  &  Efficient  Fuels  Manufacturing  Technology  (SWU  Glut)

Finds  &  Fracking • Pivot  to  combined  cycle  generation  (GAS  – Frack  Baby  Frack))• Economics  Headwinds  for:

• Economic  Challenge  for  Carbon  Free  & Renewable  Generation  Technology• Coal  Non-­‐Competitive

Cyber • Cyber-­‐Blitz• Generation  &  Grid  Attack•Micro-­‐grids

Catalyst  Factors  &  Reactions(Environmental/Production  Disruptions/Political)

Ø Demand  responseØ Energy  efficienciesØ Reduce  consumption

Ø Supply  responseØ New  sourcesØ Alternatives  (renewables,  natural  gas,  nuclear)

Ø Technology  responseØ Electric  vehiclesØ Hybrid  technologies/Generation  &  Transportation

Ø Political  responseØ CAFÉ  Ø Clean  Power  Plan/Clean  Air  ActØ Paris  Agreement

The  More  Things  Change  the  More  They  Stay  the  Same

Trump  Factor  ?

Primary  Power  Generation  SourcesTrajectory  Through  2030

Ø Coal  continues  to  Decline  – No  CPP  ?

Ø Gas  will  Dominate  No  Matter  What  

Ø Oil  will  Maintain  in  Transportation

Ø Renewables  will  Escalate  as  a  %  -­‐CPP/Paris?

Ø N.A.  Nuclear  Slight  Decline  – Rest  of  the  World  Strong  Growth  

Oil  Stays  Lower  For  The  Long  RunDrill  Baby  Drill

Ø Oil  Markets  Experienced  Similar  Drop  in  1986:Ø OPEC  vs.  North  SeaØ 1986  Drop  (63%  in  8  

Months)  &  Today's  Drop  Similar

Ø Adjusted  for  Inflation  Prices  Did  not  Return  to  Peak  for  appox.  20  Yrs.    

Ø Expect  Low  Prices  to  Extend  for  Several  Years                        

Source  M  Mohataren ,  chief  economist  GM

Natural  Gas  &  LNG  Market  Conditions

Ø Supply  Exceeds  Demand  (min.  next  5-­‐7  Years)

Ø Growth  in  Demand  Unyielding  (combined  cycle  &  Japan  Post  Fukushima)

Ø Over  abundance  of  Projects  in  N.A.  – Some  Will  Fail

Ø Creditable  Construction  &  Financing  Terms  Will  Determine  Outcomes:Ø Concession  AgreementsØ Execute  On-­‐Time  &  CostØ Innovative  Technology

Notable  Forecasts  of  Renewable  Energy  Percent  of  US  Power  Generation

ØMust  Find  Economic  Sweet  Spot

ØNeed  to  Improve  Reliability  or  Hybrid  Solution

ØScale/Scale/ScaleØRegulatory  &  Federal  Financial  Support

Electricity  DemandEfficiencies,  GDP  &    Renewables

ØStrong  Potential  for  On-­‐site  GenerationØCombined  CycleØHybrid  Systems  (renewables/gas/SMR’s)

ØMicro-­‐GridsØReliable  Central  Power  Systems  (Nuclear/Combined  Cycle/Clean  Coal?)  

Where  Are  The  Business  Opportunities?

Ø Service  SectorØ Outage  Support  – All  SystemsØ New  Siting  &  PermittingØ Financial  &  Regulatory  EngineeringØ Carbon  Trading  (CPP)Ø Micro-­‐Grid:  Management,  Servicing  &  SecurityØ System  Optimization

Ø Development,  Engineering  &  ConstructionØ New  Systems  – Partner  with  OEM’s  &  Financial  InstitutionsØ Generation  UpgradesØ TransmissionØ Deactivate  &  DecommissionØ Environmental  Remediation

Ø New  Technology  &  OEM  (Bring  Your  Purse)  Ø SMR’sØ Renewable  TechnologyØ TransmissionØ Cyber  

Leveraging  Capital  MarketsØ Development  Phase:  

Ø Governments  (Trump  Factor),  venture  capital,  private  equity  and  other  investments  fund  early  project  development,  prototyping  and  initial  production  

Ø Create  appropriate  concession  and  engineering,  construction  and  commissioning  termsØ OEM  investments  risky  for  the  investors,  but  capital  at  this  phase  is  crucial  for  getting  

successful  ideas  off  the  groundØ Exit  strategy  – monetize  the  investment  

Ø Access  to  Capital  Markets  for  Technology/Projects:  Ø Early  work  is  successful  and  the  technology/project  is  proven  and  commercializedØ Create  customer  terms  and  development  agreements  – bankable  long-­‐term  concessions,  

government  agreements  are  subject  to  budget  &  authorization  constraints  Ø Successful  Technology/OEM’s:  launch  initial  public  offering  (IPO)  or  issue  bonds  Ø Capital  markets  facilitate:  scale  up  operations,  expand  its  production  facilities,  or  more  project  

development

Ø Trump  Factor?Ø More  Public/Private  Project  PartnershipsØ Innovative  Financial  Models

Thank  You&  

Questions