Wind Power in Germany - Market Drivers and Strategies of...
Transcript of Wind Power in Germany - Market Drivers and Strategies of...
Wind Power in Germany - Market Drivers and Strategies of
Individual Players
Adding value to energy ventures.
Agenda
I. The German Electricity Industry
II. The German Wind Market
III. Conclusions
110th Meeting of the Reform Group, Schloss Leopoldskron, Salzburg 2005
The German ElectricityIndustry
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Source: UCTE (Union for the Co-ordination of Transmission of Electricity)
Physical Electricity Exchanges 2003
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Sources: BBR, VDEW
Market Structure 2003
German Electricity Generation Mix as of 2003
30%
24%
28%
7%
8% 3%
Nuclear Power Hard Coal Lignite Natural Gas Renewables Oil / others
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Industry Consolidation in Gemany I – Market Shares in 2000
Market share in %
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Production Transmissiongrid
Distribution grid Industrialcustomers
Retailcustomers
sonstigeBewagHEWEnBWVeagVEWRWEViagVeba
Source: BKartA, EU-Commission, enervis
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Industry Consolidation in Gemany II – Market Shares in 2002
Market share in %
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Production Transmissiongrid
Distributiongrid
Industrialcustomers
Retailcustomers
sonstigeEnBWVattenfallRWEE.on
Source: BKartA, EU-Commission, enervis
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Cost of Traditional & Renewable EnergyTechnologies – Current and Expected Trends
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Source: Imperial College Centre for Energy Policy and Technology (ICCEPT) 2002, EEX
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External Costs for Electricity Production (EU)
Source: European Commission / Owen (2004) Units: euro¢/kWh
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Introducing Renewables as Competitors
New markets created by legislation (StrEG 1991; EEG 2000)
Political markets (fostering new technological development)
Diversification of generation mix
Increased security of supply
Will become competitive if continuously supported
“Competition of the subsidized systems”
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Market Structure Renewables
Renewables Electricity Mix
44%
41%
1%
3%
0%
2%
2% 3% 4%
Hydro Wind PVWood Liquid Biofuels BiogasSewage Gas Landfill Gas Waste-to-Energy (organic)
Source: BMU
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The German Wind Market
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Installed Wind Capacity in Germany
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
1
Source: German Wind Energy Institute (DEWI)
16.629 MWCumulated installed capacity (in MW)
New capacity added (in MW)
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Top 19 Wind Nations
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Source: World Wind Energy Association
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Wind Energy Value Chain (Macro Level)
Sub-Supply
upstream downstream
WTG Manufacturing
SiteDevelopment
& Construction
Wind Farm Ownership
O & M
• Gearboxes
• Generators
• Rotor Blades
• Towers
• Control Units
• OEM • Wind Survey
• Site Acquisition
• Building Permit Application
• Financing
• Turn-Key Installation
• Operation
• ConditionMonitoring
• Maintenance
• Private Owners via Closed-End Funds
• Owner Operators
• Institutional Investors ?
• Utilities ?
Estimated Value Added:
62 %24 %
14 %
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Estimated Added Value p.a. (Germany)
62 %24 %
14 %8-9 %Manufacturing Development /
Packaging O&MIRR
/ (year 2003)
1
Source: German Wind Energy Institute (DEWI)
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The Market for IPP (Wind-) Developers –Where does it come from?
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Small and medium-sized players
Fragmented market / many weak projects
Private equity financed (tax-driven closed end funds)
Tariff degression as main driver of efficiency gains
First wave of consolidation due to
Collapse of private equity market in 2002 / 2003
Changing perception of bankability
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Drivers of Consolidation…
Financial marketequitydebt
Tariff degression(2 % p.a.)
Time
Growth
MarginScarcity of sites
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Grid accessSource: ENERTRAG Structured Finance
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… and how to cope with it
Operational Constraints
Time
Growth
Margin
Financial expertiseProfessionalismLearning CurveStrategy
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Source: ENERTRAG Structured Finance
Financial Constraints
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Recent Market Developments
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Strong competition between developers
Market concentration increases
Wind farm developers integrate downstream
Some become operators / owners
Some diversify into other renewables markets (caveat: focus! Umweltkontor)
Dutch utilities buy wind farms / developers
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The Players & Degree of Vertical Integration
Source: ENERTRAG Structured Finance
Valu
e Added
Development (siting, permitting, land right procurement)
Construction
Financial Structuring, Packaging & Distribution
Ownership / Investment
O & M
Administrative Services
Ostwind, ABO, Boreas
Essent, Edis
Winkra (for Essent)
WPD, Sachsen-
fond
ENERTRAG, Energiekontor, WKN
Plambeck
EBV, P&TUMAG
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The Players & StrategiesFull-Line Financial Packagers
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Source: ENERTRAG Structured Finance
CoreCompetences
Economies of Scale
Economies of Scope
WKN
Integrated Full-Liners, Operators
Developers,Mono-Line Fin. Packagers
Energiekontor
ENERTRAG
WPD
Sachsenfond
BoreasEssentABO
Ostwind
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Conclusions
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Conclusions
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Continental European energy markets are fragmented and policy driven
Subsidies (open or hidden) have been a fact of life and will continue to be so
Renewable energy laws have created significant economic value for the German economy
The overall sector has reached critical mass …
… the individual economic actors have not, yet !
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ContactDetlev Hartmann
Chief Financial Officer
ENERTRAG AGBerliner Str. 25 AD - 13507 Berlin
Tel. +49 30 4360 [email protected]
2124
Alexander Boensch
Financial Engineering & Risk Management
ESF - ENERTRAG Structured FinanceBerliner Str. 25 AD - 13507 Berlin
Tel. +49 30 4360 [email protected]
Adding value... ...to energy ventures.
Merdelou / Fontanelles, France
€ 25,8 Mio. Project FinancingStructured by ESF in 2002