LATEST TRENDS IN RENEWABLE ENERGY FINANCE

Transcription

1 LATEST TRENDS IN RENEWABLE ENERGY FINANCE SCOTTISH RENEWABLES CONFERENCE, EDINBURGH ANGUS MCCRONE 19 MARCH 2014 TRENDS IN RENEWABLE ENERGY INVESTMENT 1

2 CONTENTS 1. World clean energy investment trends 2. UK clean energy investment trends 3. Financing issues and the gap TRENDS IN RENEWABLE ENERGY INVESTMENT 2

3 GRADUALLY TURNING GREEN? Source: Wikimedia Commons TRENDS IN RENEWABLE ENERGY INVESTMENT 3

4 NEW INVESTMENT IN CLEAN ENERGY ($BN) 21% $318bn -10% $286bn -11% 17% 34% 0.6% $195bn $196bn $262bn $254bn 44% $167bn 46% $55bn 45% $80bn $116bn 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). Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 4

5 CLEAN ENERGY INVESTMENT TYPES & FLOWS 2013 ($BN) Asset and company mergers, acquisitions, refinancing, buy-outs etc Projects Equipment manufacturing/ scale-up Technology development VC Corp Corp RD&D Gov Gov R&D PE Public Public markets Total Total company Re-invested RD&D R&D markets new equity investment company equity new equity investment Renewable Digital Digital energy & energy AF storage energy AF& AF storage AF SDC Total Total new investment M&A/buy-outs Buy-outs etc. etc. Total transactions Note: Total values include estimates for undisclosed deals. AF = asset finance, SDC = small distributed capacity. Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 5

6 NEW INVESTMENT IN CLEAN ENERGY BY REGION ($BN) 21% $103bn -10% -11% 44% 17% $39bn 34% 0.6% $49bn $62bn $78bn $68bn $88bn $109bn $71bn $121bn 45% $29bn $58bn $63bn $50bn $66bn 46% $18bn $13bn $24bn $22bn $23bn $35bn $42bn $45bn $70bn $82bn $84bn $115bn $127bn $106bn $68bn EMEA AMER ASOC 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). Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 6

7 NEW INVESTMENT IN CLEAN ENERGY BY SECTOR Q Q ($BN) 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 Q Wind Solar Biofuels Other 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). Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 7

8 Q LEVELISED COST OF ELECTRICITY $/MWH Marine - wave Marine - tidal STEG - LFR STEG - tower & heliostat STEG - parabolic trough + storage Fuel cells Wind - offshore STEG - parabolic trough STEG - tower & heliostat w/storage PV - thin film PV - c-si tracking Biomass - gasification PV - c-si Geothermal - binary plant Wind - onshore Municipal solid waste Biomass - incineration Geothermal - flash plant Landfill gas Biomass - anaerobic digestion Large hydro Small hydro Nuclear Natural gas CCGT Coal fired Global LCOE range Regional scenarios Q central Q central Note: CHP = combined heat and power; c-si = crystalline silicon; STEG = solar thermal electricity generation or concentrated solar power; CCGT = combined cycle gas turbine. Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 8

9 NEX CLEAN ENERGY INDEX YTD Note: Values as of 06 January 2014; NASDAQ and S&P 500 rebased to 100 on 01 Jan 2003 Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 9

10 BIGGEST MOVERS IN NEX INDEX IN LAST 12 MONTHS % CHANGE Source: Bloomberg TRENDS IN RENEWABLE ENERGY INVESTMENT 10

11 CONTENTS 1. World clean energy investment trends 2. UK clean energy investment trends 3. Financing issues and the gap TRENDS IN RENEWABLE ENERGY INVESTMENT 11

12 UK CLEAN ENERGY INVESTMENT, BY TYPE ($BN) GovR&D CorpR&D Small-scale Public markets VCPE Asset finance Note: Total values include estimates for undisclosed deals Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 12

13 UK CLEAN ENERGY INVESTMENT, BY SECTOR ($BN) Small hydro Marine Low carbon services Biofuels Energy smart technologies Solar Biomass & Waste Wind Note: Total values include estimates for undisclosed deals Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 13

14 UK ASSET FINANCE DEALS SINCE JANUARY 2013 Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 14

15 PROJECTS IN SCOTLAND Source: Bloomberg TRENDS IN RENEWABLE ENERGY INVESTMENT 15

16 OFFSHORE WIND HAPPENING DESPITE SETBACKS Source: Bloomberg TRENDS IN RENEWABLE ENERGY INVESTMENT 16

17 CONTENTS 1. World clean energy investment trends 2. UK clean energy investment trends 3. Financing issues and the gap TRENDS IN RENEWABLE ENERGY INVESTMENT 17

18 DECC WHITE PAPER, JULY 2011 Investment of GBP 75bn in electricity generation capacity likely to be needed this decade, plus a further GBP 36bn on transmission and distribution. Source: DECC TRENDS IN RENEWABLE ENERGY INVESTMENT 18

19 INVESTMENTS REQUIRED TO REALISE NREAP ROADMAPS (GENERATION ONLY), BY COUNTRY, (EURM) Source: BNEF estimates, based on published NREAPs TRENDS IN RENEWABLE ENERGY INVESTMENT 19

20 UK RENEWABLES CAPACITY INVESTMENT, BY SOURCE ($BN) Small-scale Other Project finance On balance sheet Note: Total values include estimates for undisclosed deals Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 20

21 AVERAGE INITIAL COST OF DEBT FOR ONSHORE WIND PROJECT IN THE UK 8% 7% 6% 5% 4% 3% 2% Project spread Swap fees Term swap 6M Libor Bank of England rate 1% 0% Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Note: Excludes arrangement fees and step-ups during life of loan. Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 21

22 SELECTED UTILITIES, CAPEX ON RENEWABLES, $BN 4,500 4,000 3,500 3,000 2,500 2,000 1, (estimate) 1, SSE Iberdrola Enel E.ON RWE EDP Note: Figures are either for calendar years or for year to March, in which case the starting year is the one counted. Utilities have different definitions of capex. Figures are worldwide, not just Europe. Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 22

23 ROLE OF INSTITUTIONAL INVESTORS Institutions nibble at project yields who, why, how? Source: Bloomberg New Energy Finance, Wikimedia Commons TRENDS IN RENEWABLE ENERGY INVESTMENT 23

24 INSTITUTIONAL INVESTOR COMMITMENT TO EUROPEAN RENEWABLE ENERGY PROJECTS ($M) 3,500 3,000 2,500 2,000 1,500 PE/infrastructure fund Quoted fund Bond Direct 1, Note: Excludes private investor conduits such as VCTs, EISs and retail bonds. Measures institutional commitment at the point the institution parted with the money, not necessarily at the point when the money was committed to a particular project. Source: Bloomberg New Energy Finance TRENDS IN RENEWABLE ENERGY INVESTMENT 24

25 COPYRIGHT AND DISCLAIMER This publication is the copyright of Bloomberg New Energy Finance. No portion of this document may be photocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any way without prior consent of Bloomberg New Energy Finance. The information contained in this publication is derived from carefully selected sources we believe are reasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment of the author of the relevant article or features, and does not necessarily reflect the opinion of Bloomberg New Energy Finance, Bloomberg Finance L.P., Bloomberg L.P. or any of their affiliates ("Bloomberg"). The opinions presented are subject to change without notice. Bloomberg accepts no responsibility for any liability arising from use of this document or its contents. Nothing herein shall constitute or be construed as an offering of financial instruments, or as investment advice or recommendations by Bloomberg of an investment strategy or whether or not to "buy," "sell" or "hold" an investment. TRENDS IN RENEWABLE ENERGY INVESTMENT 25

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