GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 1 / / / / / / / / / / / / / / / / GLOBAL STEG MARKET OUTLOOK ESKOM CSP AND SOLAR AUGMENTATION CONFERENCE, JOHANNESBURG

GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 1/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

GLOBAL STEG MARKET OUTLOOK

ESKOM CSP AND SOLAR AUGMENTATION CONFERENCE, JOHANNESBURG

26 AUGUST 2013

DEREK CAMPBELL

GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 2/ / / /

THE DEFINITIVE SOURCE OF INSIGHT, DATA AND NEWS ON THE TRANSFORMATION OF THE ENERGY SECTOR

San Francisco

Sao Paulo

WashingtonNew York

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Sydney

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Beijing

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Zurich


COVERAGE: UNIQUE BREADTH....

Wind

Solar

Geothermal

Biofuels, Biomass & Waste to Energy

RENEWABLE ENERGY

Smart Grid & Demand Response, Power Storage, Advanced Transportation,Energy Efficiency

ENERGY-SMART TECHNOLOGIES

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SECTORS MARKETS

GAS


CONTENTS

1. CURRENT STATE OF THE MARKET

2. POTENTIAL TO REDUCE LCOE

4. 2014 AND BEYOND

3. IMPLICATIONS OF NATURAL GAS ON STEG


NEW BUILD ASSET FINANCE OF STEG PROJECTS BY REGION, 2005-2012 ($BN)

Source: Bloomberg New Energy Finance

0.041.2 1.9

4.55.6

2.4

19.3

5.3

0

5,000

10,000

15,000

20,000

25,000

2005 2006 2007 2008 2009 2010 2011 2012

ASOC

AMER

EMEA


GLOBAL SOLAR THERMAL CAPACITY, 1995-2013 (MW)



ABANDONED STEG PROJECTS (MW)


50 255

729934

1,654

2,135

1,633

0

500

1,000

1,500

2,000

2,500

2007 2008 2009 2010 2011 2012 2013


WHY THE SLOWDOWN?

Initial capital expenditure is high and there have been bankruptcies as companies struggle with liquidity

Partly in consequence of runaway PV build (and also the Spanish debt crisis), government support has been removed or switched to PV. PV wins solar tenders.

Rapid decline of PV costs makes STEG a less attractive option for generating clean energy from large sunny areas

PV

POLICY SUPPORT

FINANCE

Increasing concern over availability of water resources for cooling and washing

WATER


CONTENTS



4. 2014 AND BEYOND



SOLAR THERMAL LCOE’S ($/MWH)



TECHNOLOGY INNOVATION

• Cost of components (eg mirrors, steam turbines) is extremely high

• Each plant is designed differently, so skilled engineers are required and customisation difficult

• Reducing component costs through optimising design to use less material, or lower cost material, or to improve efficiency

• Achieve economies of scale through increasing the plant size

• Add storage, or hybridise STEG with fossil fuel, to increase utilisation of the turbine. This can also help STEG power output match power demand – something PV or wind cannot do


CURRENT COST REDUCING COSTS


CONTENTS



4. 2014 AND BEYOND



GAS EFFECTS ON STEG

• Gas reserves risen by 34% between 2000-2012

• Large pipeline of LNG terminals and exploration

• Cheaper gas means cheaper electricity

• Gas sets the price of electricity and reduces peak hour prices for STEG

Source: B.P, Bloomberg New Energy Finance

TCM BCM

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

4,000

0

20

40

60

80

100

120

140

160

180

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Consumption Production Reserves


LCOE IN 2013 ($/MWH)


0 50 100 150 200 250 300 350 400 450 500

Coal firedNatural gas CCGT

CHPNuclear

Small hydroLarge hydro

Biomass - anaerobic digestionLandfill gas

Geothermal - flash plantBiomass - incinerationMunicipal solid waste

Wind - onshoreGeothermal - binary plant

PV - c-SiBiomass - gasification

PV - c-Si trackingPV - thin film

STEG - tower & heliostat …STEG - parabolic trough

Wind - offshoreFuel cells

STEG - parabolic trough + storageSTEG - tower & heliostat

STEG - LFRMarine - tidal

Marine - wave

Global LCOE range Regional scenarios Q1 2013 central Q2 2013 central

1059861

531


CONTENTS



4. 2014 AND BEYOND



2014 AND BEYOND

• There will be some markets where the advantages of STEG over PV are valued – for example, weak power grids, or countries with a strong evening electricity demand peak

• Several countries (Australia, Morocco, India) are also offering tenders for one or two large STEG projects

• Saudi Arabian market 2.1GW in 2 rounds of bidding, by 2032 25GW (although BNEF believes the long term target may be shifted towards PV)

• Cost reductions and technology improvements continue to be made by companies like BrightSource and Abengoa, which are building plants and gaining the experience to make the technology better


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PRESENTATION TITLE

DEREK CAMPBELL, [email protected]

Documents

GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 1 / / / / / / / / / / / / / / / / GLOBAL STEG MARKET OUTLOOK ESKOM CSP AND SOLAR AUGMENTATION CONFERENCE, JOHANNESBURG