Global RE100 Status and Corporate PPA TrendsGlobal Offshore Wind Summit Taiwan Virtual 2020

Helen Dewhurst

13 October 2020

1

● Regulation & standards

● Market innovation and growth

● Transition debt, sustainability-linkage

● Social & pandemic finance

● Data tool: sustainable debt

● Data tool: sustainability-linked debt

● 3D printing

● Circular economy

● Industry digitalization

● Industrial heat decarbonization

● CCUS & hydrogen

● Data tool: digital industry projects

● Global procurement options

● Procurement innovation

● Utility & oil company strategies

● Data tool: PPA activity

● Price survey: Europe PPA market

● Model: corporate power emissions

● TCFD & EU Taxonomy

● Green policy

● Data tool: science-based targets

● Database: Circular economy policy

● Data tool: RE100 targets

● Commercial vehicle economics

● Electrification

● Alternative fuels

● Digital optimization

● Automaker sustainability

● Data tool: automaker strategies

● Supply chain sustainability strategies

● Advanced materials

● Metals & mining

● Data tool: suppliers under sustainability

pressure

Power: clean energy buying Make: cleaner manufacturing Sustainable finance

Supply: greening the supply chainMove: sustainable logistics Policy, reporting & targets

BNEF Sustainability ResearchTransition opportunities Drivers & enablers

● TCFD

● Carbon offsetting

● Clean energy procurement

● Disclosures & targets alphabet soup

● Accessing sustainable finance

● Corporate Energy Market Outlook – biannual

● Sustainable Finance Market Outlook – biannual

● Europe PPA Price Survey – biannual

● PPA Deal Tracker – monthly

● Covid-19 Sustainability Indicators – monthly

Primers & guides Recurring publications

2

Source: BloombergNEF. Link (web | terminal)

Sustainability data hub – bnef.com

Available data tools

• Sustainable finance

• Sustainable debt

• Sustainability-linked debt

• Power purchasing

• Corporate PPAs

• U.S. Utility PPAs

• PPA fair value calculator

• Supply chain

• Supplier revenue

• Customer spend

• Automakers

• Automaker targets

• Automaker analysis tool

• Automaker EV exposure scores

• Targets, circular economy & more

• Science-based targets

• RE100

• Circular economy policy database

• Corporate power emissions model

• Digital industry projects & partnerships

• Renewable owners & financial participants

• Renewable project carbon impact

3

Source: Bloomberg NEF Note: Only offsite PPAs included in volume charts. APAC PPA volumes include estimates; regional volumes chart (top left) includes

estimated APAC deals, but technology and offtaker charts include only reported APAC PPAs. Data is through September 2020.

Global corporate clean power purchasing continues to riseGlobal Corporate PPA Volumes, by region

3.4 2.5 3.9

9.1

15.8

8.10.8

2.3

2.6

4.8

1.3

2.12.0

0.1 0.3 0.3 1.02.3

4.7 4.36.2

13.6

19.6

14.9

0

15

30

45

60

75

0

5

10

15

20

2010 2011 12 13 14 15 16 17 18 19 20

YTD

Annual volume (GW)

AMER EMEA APAC Cumulative

Cumulative volume (GW)

4

Source: Bloomberg NEF Note: Only offsite PPAs included in the charts. Data is through September 2020.

Although the U.S. is having a slightly less successful year so farU.S. corporate PPAs, by technology

1.4 2.4 1.7 2.64.2

5.61.0

4.3

8.0

5.7

0.1 0.2 0.1 0.41.5

3.42.4 3.3

8.5

13.6

6.6

0

9

18

27

36

45

0

3

6

9

12

15

2010 11 12 13 14 15 16 17 18 19 20

YTD

Annual (GW)

Wind Solar Other Cumulative

Cumulative (GW)

5

Source: BloombergNEF

APAC corporate procurement options are improving, but slowly

Market Renewable share

(ex. hydro)

Retail choice? RECs available? Net metering? Onsite PPA? Offsite PPA?

Australia 17% State-dependent Yes No Yes Yes

China 9% Province-

dependent

Yes Yes Yes Province-

dependent

India 9% State-dependent Yes State-dependent Yes Yes

Indonesia 9% No No Yes Yes No

Japan 10% Yes Yes No Yes Yes

Malaysia 4% No No Yes Yes No

Philippines 14% Yes In progress Yes Yes No

Singapore 3% Yes Yes Yes Yes Yes

South Korea No data In progress In progress Yes In progress In progress

Thailand 12% No No No Yes No

Vietnam 1% No No Yes Yes In progress

6

Source: BloombergNEF

South Korea is paving the way for RE100 with its pilot programme for REGOs

Green tariff

• Consumers pay a premium when purchasing electricity from Korea Electric Power (Kepco). The premium paid by consumers is 100% reinvested in renewable energy by Kepco.

Investment

• Consumers can invest in domestic renewable energy projects and obtain REGOs for the portion of generation that has not received a renewable energy certificate under RPS.

Onsite generation

• Consumers set up renewable generation capacity for self-consumption

PPA

• Consumers can sign direct power purchase agreements with a third party that owns renewable generation capacity.

7

Source: BloombergNEF

This could unlock a lot of potential demand from RE100 members

Over 50

RE100

members

8

Source: Bloomberg NEF Note: Only offsite PPAs included in the charts. Data is through September 2020.

Europe is already having a record year, despite Covid-19EMEA corporate PPAs, by technology

0.8

3.8

0.6 1.0 1.02.0

1.8

0.8

0.20.5 0.8 1.1 1.1

2.32.6

4.8

0

2

4

6

8

10

12

14

0

1

2

3

4

5

6

2010 11 12 13 14 15 16 17 18 19 20

YTD

Annual (GW)

Solar Wind Other Cumulative

Cumulative (GW)

9

Source: BloombergNEF, The Climate Group, company sustainability reports Note: Certificate purchases are assumed to step down 10% each year. Onsite

generation and contracted wind and solar purchases remain flat through 2030. Regional breakdown of shortfall estimated based on each company’s share of revenue

by region. Electricity demand and renewable electricity demand don’t intersect in 2030, as some companies have targets extending out past 2030

These volumes are being boosted by a strong RE100 presenceEurope projected renewable shortfall for RE100 members

2.413.0

22.8

30.4

38.0

45.5

52.6

59.7

65.0

70.2

75.3

80.3

85.3

0.0

20.0

40.0

60.0

80.0

100.0

120.0

201

8

202

1

202

4

202

7

203

0

Legend

Renewable electricityshortfall

Onsite generation(contracted)

Certificate purchases(estimated)

Offsite solar(contracted)

Offsite wind(contracted)

Electricity demand

Renewable electricitydemand

2.4 13.0 22.8 30.4 38.0 45.5 52.6 59.7 65.0 70.2 75.3 80.3 85.3

0

20

40

60

80

100

120

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Projected renewable shortfall for selected RE100 members (TWh)

Source: BloombergNEF, Bloomberg Terminal, The Climate Group, company sustainability reports

10

Source: BloombergNEF, Zeigo, survey participants. Note: No solar PPAs have been signed in Finland or Norway to date.

Market success in Spain and the Nordics stems from competitive pricingOnshore wind PPA pricing for the base case compared, Europe 1H 2020

Solar PV PPA pricing for the base case compared, Europe 1H 2020

30.5 31.0 31.5 31.837.5

42.7 44.246.5

49.7

20

30

40

50

60

Sweden Norway Finland Denmark Spain Netherlands Germany Poland U.K.

EUR/MWh (nominal)

Average price (EUR/MWh), nominal

35.339.3 39.3

42.0 42.546.5 48.3 49.3

52.3

30

40

50

60

Spain Sweden Denmark Norway Finland Germany Poland Netherlands U.K.

EUR/MWh (nominal)

Average price (EUR/MWh), nominal

11

To secure further demand, innovation is needed

12

Source: BloombergNEF Note: Green indicates neutral or positive impacts; yellow indicates some negative impacts; red indicates mostly negative impacts.

Our sustainability indicators have stayed strong through the pandemic

Covid-19 indicators: sustainability

Metric Frequency Snapshot: August

Decarbonization activities

Corporate PPA volumes Monthly Companies announced 2.2GW of deals in August, the second-highest month to date.

European PPA fair value prices Monthly Prices across all markets were higher than pre-pandemic levels, with the exception of Italy.

Voluntary carbon offsets Monthly Offset retirements drop again in August, but still up 40% from 2019 year-to-date.

ESG fund performance, ETF flows Monthly Europe ESG Leaders Index outperforming peers by over 10%. Net inflows into ESG funds just

miss $4 billion mark – higher than any month in 2019.

Green bonds, green loans Monthly Green bonds and loans both trail 2019 issuance year-to-date.

Sustainability bonds, sustainability-linked loans Monthly Sustainability bond issuance jumps, off the back of major Alphabet announcement.

Sustainability-linked loan issuance remains inconsistent, but paces ahead of 2019.

Social & sustainable pandemic bonds Monthly Social and pandemic-themed bond issuance dropped significantly in August.

Corporate commitments

Science-based targets commitments Monthly New commitments drop slightly, to 33 firms, though annual volumes pace far ahead of 2019.

RE100 commitments Monthly Activity rebounds with five new RE100 goals set, though annual commitments still trail 2019.

Task Force on Climate-related Financial

Disclosures (TCFD) supporters

Monthly Monthly support dropped to 38 new companies in August, but activity continues to outpace

previous years, both on a monthly and annual basis.

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Source: BloombergNEF, Smart Energy Decisions Note: Green indicates a net-positive response from survey participants, red indicates a net-negative response.

Post-lockdown, corporate sustainability engagement also looks positive

22%

-8%

-12%

-13%

-16%

-30%

-52%

Investor perception

Sustainable financing

Decarbonization activities

Supply chain engagement

Ambition of sustainability strategy

Executive access

Budget

Net impact (%) Lockdown

33%

7%

16%

26%

31%

32%

-11%

1

2

3

4

5

6

7

Post-lockdown

Survey: how is sustainability practice in your business affected by the pandemic in these areas?

14

Source: BloombergNEF, The Climate Group, company sustainability reports Note: Certificate purchases are assumed to step down 10% each year. Onsite

generation and contracted wind and solar purchases remain flat through 2030. Regional breakdown of shortfall estimated based on each company’s share of revenue

by region. Electricity demand and renewable electricity demand don’t intersect in 2030, as some companies have targets extending out past 2030.

Generally, global corporate demand for clean energy looks very strong

485 19 27 35 54 73 92 112 132 154 176 199 224

0

50

100

150

200

250

300

350

400

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

TWh

Wind (contracted) Solar (contracted) Certificate purchases

Onsite generation Renewable shortfall Electricity demand

Renewable electricity demand

Global projected renewable shortfall for RE100 members

15

Source: BloombergNEF, SBTi Note: SBT membership is for all companies that have set or committed to setting a target.

Science Based Targets membership is also growing twice as fast as last year

Projected emission reductions from science-based target members

-20-39

-59-78

-97-116

-133-150

-167-184

-201

2020 21 22 23 24 25 26 27 28 29 30

Annual scope 1 and 2 emissions reductions (MtCO2e) Other

Consumer

DiscretionaryCommunications

Industrials

Consumer Staples

Materials

Utilities

16

Source: BloombergNEF, Bloomberg Terminal Note: Chart is based on Bloomberg’s SPLC function, and includes tier 1 suppliers only.

Supply chains will unlock the next source of clean energy demand

Global Supplier exposure, by revenue dependency (y-axis), number of customer relationships (x-

axis) and absolute revenues (bubble size)

0%

20%

40%

60%

80%

100%

0 10 20 30 40 50

Revenue dependency (%)

AMER EMEA APAC Customer relationships

$30B

$15B

$5B

Suppliers to strengthen sustainability practice

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