Transcript Slide 1

Renewable Energy Technologies
Markets and Uncertainties
Japan Day
17 November 2009
Susan Leiby
Senior Consultant
[email protected]
www.strategicbusinessinsights.com
© 2009 by Strategic Business Insights. All rights reserved.
Overview
• Growth of Renewable Energy Technologies
• Market Environment
— Solar PV
— Wind Turbines
— Biofuels
— Geothermal
— Ocean Wave and Tidal
• Commercial Opportunities
2
Current and Emerging Renewable
Technologies
Wind
Solar
•
•
•
•
•
•
PV and Solar Thermal
Wind
Biomass
Geothermal
Small Hydropower
Ocean Tidal and Wave
(emerging)
Biomass
Geothermal
Small Hydro
Ocean
3
A Difficult Year for Energy Technologies
in 2009
But a confluence of critical drivers is still
in place to provide support for
renewable energy technologies:
World Energy Consumption, 1980-2030
• Rising world energy demand,
especially in China and India
• Environmental concerns, especially a
strong consensus on need to address
global warming (CO2 emissions)
• Geopolitical concerns regarding energy
Source: EIA, International Energy Outlook 2009
supply security
• High crude oil prices (~$80 today)
• Technology advances continue to
improve performance and lower costs
• National desires to support local
economies, improve living standards, and
achieve clean technology leadership
Concern
about
global
warming
is a major
driver for
change
4
Modern Renewable Technologies Are Still
Small Contributors to Energy Markets…
World Renewable Power Capacity (GW), 2008
Renewable
power
capacity
reached just
6% of world
electricity
production in
2008*
300
250
large
Solar thermal
Geothermal
200
Solar PV-grid
Biomass
150
Small hydro
100
* Excluding
Ocean
Wind
50
hydro
0
Source: Renewable Energy Policy Network
for the 21st Century (REN21), SBI.
5
…But Are the Fastest Growing Energy
Technologies Worldwide
Growth Rates of Renewable Energy Capacity, 2008
80
ue
l
io
f
w
er
po
w
er
er
po
w
m
as
s
Bi
o
G
eo
t
he
rm
al
ro
po
w
er
po
So
20
Sm
al
lh
yd
Bi
l
se
e
i
od
th
er
m
al
W
s
an
ol
b
40
d
in
ne
bi
r
tu
la
r
%/yr
60
Et
h
Average
Capacity
Growth
Solar PV,
grid-connected
0
Source: Renewable Energy Policy Network for the 21st Century (REN21), SBI.
Traditional
renewables
6
Renewable Energy Has Become Big
Business
2008 Total Sales: $116 Billion
Large industrial companies
and investors continue to
develop new market
opportunities...
Projected 2018 Total Sales: $325 Billion
Source: Clean Edge.
7
But a Large-Scale Move to Renewables
Is Not Certain
• Energy investments have plunged since mid-2008
— Renewable energy growth is likely to grow but at a slower pace
— Long-term and consistent government support is still necessary
for investor confidence
• Renewables are still not generally cost-competitive with conventional
energy sources
— Crude oil above ~$75/b improves competitiveness
• Environmental and social issues remain
— Resource limitations
— Life-cycle debates (greenhouse gases)
— Land use impacts
— Need for new energy infrastructure, such as new electricity
transmission capacity and more flexible grids
8
Status of Some High-Growth Renewable
Technologies
Technology
PV Power
Grid-Connected
Off-Grid
Concentrating Solar
Thermal Power
Wind Power
On-Shore Turbines
Off-Shore Turbines
Small Turbines
Biofuels
Ethanol (sugarcane)
Ethanol (corn)
Biodiesel
Typical Cost*
$0.20 - 0.50 / kWh
$0.25 - 1.00 / kWh
Current Issues
•
•
•
•
Intermittent, diffuse energy source
Efficiency improvement
Cost reduction
Commercialization of thin-film and 3rd
generation technologies
•
•
•
•
Intermittent, diffuse energy source
Materials and system improvement
Efficiency and availability improvement
Noise and visual impacts, bat and bird
hazard
•
•
•
•
•
Feedstock availability
Cost reduction
Sustainability and “food versus fuel”
New cellulosic and algae-based biofuels
Land use impacts
$0.12 - 0.18 / kWh
$0.05 - 0.08 / kWh
$0.08 - 0.12 / kWh
$0.15 - 0.25 / kWh
$0.25 - 0.30 / liter
$0.40 - 0.50 / liter
$0.40 - 0.80 / liter
Typical fossil fuel power generation cost: $0.03 to 0.05/kWh (baseload; higher for peak power).
Transmission and distribution adds further cost.
Source: SBI.
9
Government Policies Are Still Critical for
Market Success
Nearly 75 countries now have some type of renewable energy promotion
policy
• Many countries have a mix of regulations to improve competitiveness
and speed deployment:
— Policy targets
— Feed-in tariffs
— Renewable Portfolio Standards (RPS)
— Tax incentives and credits
— Direct subsidies/grants and rebates
— Loan guarantees
— Net metering
U.S. state renewable portfolio standard
— Public investment
U.S. state renewable portfolio goal
— R&D funding
— Streamlined permitting
• Economic stimulus packages will provide
new investments in the near-term (U.S., Japan, China, etc.)
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Renewable Energy Technologies
Key Areas to Monitor
Wild Card
Government
Regulations
and Policies
World
Energy
Demand
High
Large-Scale
Sustainability
Impact
Utility
Deregulation and
Restructuring
R&D
R&D
Funding
Funding
Materials
Availability
Cost
Competitiveness
Systems and
Technology
Advances
Distribution &
Infrastructure
Energy Storage,
Smart Grids
Global
Warming
Policies
Consumer
Demand
Conventional
Energy Prices
And Supply
Rural Area
Financing and Adoption
Low
Low
Source: SBI.
High
Uncertainty
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Global Warming Policies—
Huge Potential Impact, Outcomes Uncertain
• Renewables could be most effective way to cut CO2 emissions quickly
— New plan by Stanford researchers:
Power planet with 100% renewables by 2030
–
–
Existing technologies, no major resource limitations
Higher efficiency would reduce world energy needs by 1/3
• Major talks in Copenhagen (December 2009) unlikely to meet goals
— New international climate change treaty very unlikely
— Political accord at best
• Regional cap-and-trade schemes to reduce CO2 emissions are growing
— World carbon market $126 billion in 2008 (double that of 2007)
— U.S. seeing significant activity but continuing deep divisions
–
Many U.S. states have regional carbon trading initiatives
— Japan began trial carbon trading scheme in October 2008;
possible full scheme in 2011
— Australia delaying its carbon program until mid-2011
12
PV Market Environment
and Uncertainties
13
PV—The Current Situation
• Market is subsidy/policy driven, not resource driven!
—
—
—
—
Strong policy-driven demand in Germany and Spain (2008)
U.S. market is growing, especially in California
Japan’s demand down after solar subsidy program ended
China’s demand could rise rapidly with a new feed-in tariff
• Production capacity in China has increased quickly
— Surge in China and Taiwan (39% of global production in 2008
from 7% in 2004)
— Japan’s share dropped to 18%
• Downward pressure on prices in 2009 makes systems more affordable
• New 2nd and 3rd technologies in the marketplace
14
Global Grid-Connected Solar PV Capacity
in 2008
Grid-connected
PV is the
fastest-growing
power
technology
worldwide
New capacity
5
Existing capacity
4
Gigawatts
But most new
capacity is
installed in a
few countries
with generous
incentives
6
5.4 GW of capacity added in 2008
(70% increase from 2007)
3
2
1
0
Germany
Spain
Japan
United
States
Other EU
South
Korea
Other
World
Source: Renewable Energy Policy Network for the 21st Century (REN21), SBI.
15
Top Ten PV Producers in 2008
TOTAL WORLD PV PRODUCTION: 6940 MW (2008)
600
500
2007
2008
400
300
MW-dc
200
100
0
Q Cells
(Germany)
Source: PV News; SBI.
First Solar
(U.S.)
Suntech
(China)
Sharp
(Japan)
Motech
(Taiwan)
Kyocera
(Japan)
Baoding
Tianwei
Yingli
(China)
JA Solar
(China)
Sunpower SolarWorld
(U.S.)
(Germany)
16
Wind Turbines Market Environment
and Uncertainties
17
Wind Energy—
The Current Situation
• Large-scale wind power is close to being competitive
— At or near grid parity in windy areas
— Higher natural gas prices
• Government policies are still a major driver
— U.S. state Renewable Portfolio Standards
— Spain’s Electricity Act
— China’s Renewable Energy law
• The financial/economic environment has
hurt manufacturers all along the supply chain
— Economic stimulus packages will help
U.S. state renewable portfolio standard
U.S. state renewable portfolio goal
• Offshore wind development—mainly in the EU so far
— High potential but higher cost and more difficult permitting
• New transmission lines from remote areas needed
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Top Ten Wind Power Countries in 2008
30
More than half
of wind power
additions
were
in the U.S.
and China
New capacity
25
Existing capacity
Gigawatts
20
15
Total global wind energy capacity = 121 GW
(29% increase from 2007)
10
5
0
Source: Global Wind Energy Council, SBI
19
Biofuels Market Environment
20
Biomass to Biofuels—
Current and Emerging Pathways
Biological Processes
Feedstock
Sugars, Starches,
Cellulosic Biomass
(crops and agricultural wastes)
Conversion
Fermentation of Sugars
Products
•
•
•
•
Ethanol
Butanol
Renewable Hydrocarbons
Chemicals, Bioplastics
Chemical
Processes
Thermochemical
Processes
Plant Oils &
Waste
Oils/Fats
Cellulosic
Biomass
TransEsterification
Gasification/
Syngas
Processing
Biodiesel
•
•
•
•
Current Commercial
Pathways
• Rapidly growing
capacity
• Concerns about
land requirements and
ecological
sustainability
• Food vs. fuel issues
Emerging
Pathways
• Higher yields
Biodiesel (advanced)
(algae and cellulosic
Ethanol
biomass)
Dimethyl ether
Other
• Lower CO2 emissions
• Non-food crops
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Biofuels Capacity in Top 12 Countries
and EU in 2008
Ethanol is the
largest volume
biofuel, led by
U.S. and Brazil.
40
Biodiesel
35
Fuel Ethanol
Biodiesel is
dominant in
Europe.
Billions of Liters
30
25
Total fuel ethanol capacity = 67 billion liters
20
Total biodiesel capacity = 12 billion liters
15
10
5
0
Source: Renewable Energy Policy Network for the 21st Century (REN21), SBI.
22
Strong Push to Commercialize
Next-Generation Biofuels
• Government targets provide growth opportunities
— U.S. Renewable Fuels Standard (21 billion gallons by 2022)
— California Low Carbon Fuel Standard (10% lower carbon intensity in 2020)
— EU requires 10% renewable transport fuels by 2020
• Significant commercialization activity
— Major oil- and chemical-company involvement
— Commercial demonstration projects being built worldwide
— U.S. DOE targeting commercial biorefinery technology by 2012
23
Geothermal Power
Market Environment
24
Top Ten Geothermal Power Countries in
2008
3
Global capacity:
10 GW
New development
could add 3 GW
outside the U.S.
Gigawatts
The U.S. has ~120
projects (5.5 GW)
in various stages
of development
2.5
2
1.5
1
0.5
0
Source: SBI
25
Enhanced Geothermal Energy Systems
Are in Development
• Large potential for EGS
—
Deep hot rock is everywhere—not just volcanic regions
— Requires engineering reservoirs using high-pressure water
• Still early stage – drilling and stability challenges
—
EGS work ongoing in France, Australia, Germany, and the
United States
—
U.S. EGS potential of 100 GW of electricity by 2050 (DOE/MIT)
26
Ocean Tidal and Wave Energy
Market Environment
27
Ocean Tidal and Wave Energy
• Many companies pursuing commercial development
— 35 companies received >$500 million investment since 2001
— 1 GW of projects proposed in UK, U.S., Canada, Australia,
Ireland, Norway, Denmark, Portugal and elsewhere
— Initial commercialization in Europe in 2008
• Key challenges:
— Significant reliability and cost hurdles
— Environmental and permitting procedures
— Difficult financial and market conditions
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Commercial Opportunities
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Solar, Wind, and Biofuel Applications
Timeline
Current
2015
2010
Grid-Integrated Power
Solar
Wind
Rooftop and BuildingIntegrated PV Systems
On-Shore
Wind Parks
Large Solar
Parks
Off-Shore
Wind Parks
Inexpensive Solar
Power Systems
Small Wind
Power Systems
Low Wind
Speed Systems
Transportation Biofuels
Gasoline
Blendstocks
Ethanol/Gasoline
Blends
Biodiesel
Biodiesel
Blends
Biofuels from
Algae
E-85 Retail
Infrastructure
Cellulosic Ethanol and
Renewable Hydrocarbons Scale-up
Biomass to Liquids
(Gasification)
Niche High-Value
Products
Cost-Competitive
Biodiesel
Transportation Fuels
Scale-up
Source: SBI
30
Renewables Business Opportunities
• Renewable energy technologies will continue to become
increasingly competitive in many markets and applications
—
—
—
Proven technologies and profitable business models
Benefits from large government subsidies
Large and growing industries
• Investment in new technology production will continue
• New technologies will gain ground in coming years
Threats: Policy and feedstock risks
Rise in interest rates
Disruptive technologies could emerge in 10-15
years
31
SRIC-BI’s Explorer Program—
Opportunities in Technology Commercialization
Artificial Intelligence
Membrane Separation
Photovoltaics
Biocatalysis
MEMS/Micromachining
Polymer-Matrix Composites
Biomaterials
Mobile Communications
Portable Electronic Devices
Biopolymers
Nanobiotechnology
Portable Power
Biosensors
Nanoelectronics
Renewable Energy Technologies
Connected Cars
Nanomaterials
RFID Technologies
Connected Homes
Novel Ceramic/Metallic
Materials
Robotics
Engineering Polymers
Flat-Panel Displays
Fuel Cells
KnowledgeManagement Tools
Optoelectronics/Photonics
Organic Electronics
Pervasive Computing
Smart Materials
Solid-State Microsensors
User Interfaces
Virtual Environments
Titles in red are energy technologies
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