Corporate Renewables Market: a Perspec4ve

Transcription

1 Corporate Renewables Market: a Perspec4ve BUSINESS RENEWABLES CENTER NAEM s EHS and Sustainability Forum October 26, 2016 Denver, CO BUSINESS RENEWABLES CENTER

2 Agenda State of the market Enabling Factors Obstacles to Growth 2

3 Corporate Renewable Deals Capacity (GW) US Delphi Automotive Google 0.05 BD Apple Apple 0.77 Facebook Microsoft Google Volkswagen Yahoo Dow Chemical Kaiser Permanente General Motors 1.18 IKEA Walmart Microsoft Mars Google IKEA Salesforce Bloomberg Amazon Amazon Owens Corning Owens Corning Equinix Equinix Procter & Gamble Equinix HPE Switch Amazon Facebook Amazon Walmart Publicly announced contracted capacity of corporate Power Purchase Agreements, Green Power Purchases, Green Tariffs, and Outright Project Ownership in the US and Mexico, Excludes on-site generation (e.g., rooftop solar PV) and deals with operating plants. Last updated: October 20, Google Google Google Switch Apple Copyright 2016 by Rocky Mountain Institute For more information, please visit or contact BRC@RMI.org Philips Corning General Motors Apple Google Cisco Kaiser Permanente Iron Mountain Procter & Gamble Google Iron Mountain 1.00 Johnson & Johnson Digital Realty Amazon Walmart Google M Steelcase Lockheed Martin Salesforce 3

4 Wind is the Primary Fuel Solar gained substan4al market share in Contracted Capacity (MW) by Technology YTD Wind 2,346 Wind 3,246 Solar 40 Solar 887 4

5 Corporate Market Share is Growing Corporates signed ~19% of wind PPAs in 2014, and ~55% in 2015 Contracted Wind Capacity (MW) by Type Non-Corporate PPAs 2,236 1,989 Corporate PPAs 514 2,409 Source: AWEA, RMI Analysis 5

6 32 Corporates Have Signed Deals Buyer Capacity (MW) Buyer Capacity (MW) Google F Amazon F Walmart F Equinix 330 Microsoe F IKEA 263 Owens Corning F Facebook F Apple F Mars 200 Dow Chemical F Switch 179 Kaiser Permanente 153 Procter & Gamble F Volkswagen 130 3M F 500 HPE F Johnson & Johnson F Digital Realty 88 US Delphi Automo4ve 80 Philips 70 General Motors F Salesforce F Iron Mountain 52 Corning F BD F Lockheed Mar4n F Steelcase 25 Yahoo 23 Bloomberg 20 Cisco F SC Johnson 11 6

7 32 Developers Have Signed Deals Sorted by Capacity (MW) Developer / Supplier Capacity (MW) # of Deals # of Customers Developer / Supplier Capacity (MW) # of Deals # of Customers NextEra EDF Renewable Energy Invenergy MidAmerican Energy Apex Clean Energy First Solar RES Americas Lincoln Clean Energy Chermac Energy EDP Renewables SunEdison Iberdrola Renewables BNB Renewable Energy Bordas Wind Energy Tradewind Energy E.ON Duke Energy PaFern Energy Group Mexico Power Group Pioneer Green Energy Enel Green Power Alterra Power SunPower Community Energy Origis Energy Cypress Creek Renewables Constella4on Akuo Energy Enbridge New Jersey Resources NRG Spartan Renewable Energy

8 ERCOT Leads the ISOs/U4li4es ERCOT, SPP, PJM, and CAISO markets grew significantly in Contracted Capacity (MW) by ISO/U4lity ERCOT SPP MISO PJM CAISO CFE NV Energy Duke Energy

9 Texas is the Leading State Texas, Oklahoma and California markets grew significantly in Contracted Capacity (MW) by State Top 10 States Texas Oklahoma Iowa California North Carolina Illinois Nevada Kansas Indiana Ohio

10 Mexico: the next fron4er TransacPon Details Context General Motors (GM) signed a 15-year PPA with Enel Green Power in February MW project with General Motors (GM) receiving 34 MW Equals ~3.5% of GM s North America Electricity use Project located in Palo Alto, Jalisco Region GM s first wind PPA The electricity will be used at four of GM s Mexican produc4on facili4es GM has a long history of purchasing power from solar, landfill gas and waste Mexico s electricity regula4on allows PPAs Source: BRC case study 10

11 Agenda State of the market Enabling Factors Obstacles to Growth 11

12 Factor #1 Corporate Demand The good news is: corporate demand crosses borders Today Long-Term 12

13 Factor #2 High Quality Resources Strong differences between sites For more informa4on, please visit hfp:// or contact 13

14 Factor #3 Abundant Supply Steady growth: +1.9 GW in 2015 for a 67.8 GW total Source: AWEA

15 Factor #4 Favorable Market Structure Deregulated wholesale markets cover 2/3 of the US GDP Source: FERC, Energy Primer, November Map created with ABB s Velocity Suite. 15

16 PTC/ITC Extension Details Factor #5 Favorable Subsidies Tax credits lower the price of electricity from wind and solar Solar ITC 30% 30% 30% 30% 26% 22% 10% Wind ITC* 30% 24% 18% 12% 0% 0% 0% Wind PTC* (per MWh) $23 $18 $14 $9 $0 $0 $0 The urgency to transact compared to before Dec 18 might be lower However PTC is declining rela4vely quickly The wind industry will feel solar compe44ve pressure in the next 2-3 years The importance to work on cost compe44veness remains high *Wind projects can choose between the ITC and PTC For more informa4on, please visit hfp:// or contact 16

17 Factor #6 - Specialized intermediaries Four brokers are behind 80% of the corporate transac4ons Brokers Market makers 17

18 Agenda State of the market Enabling Factors Obstacles to Growth 18

19 2016 Has Been Behind 2015 So Far MW Q Q Q Q ,

20 Obstacle #1? Corporate Intent Fortune 500 Companies with Sustainability Targets (GHG, RE or EE) Fortune % Fortune % 223 (45%) of Fortune 500 with sustainability goals Fortune % Source: Power Forward 2.0 WWF, Ceres, Calvert, DGA; RMI Analysis 20

21 Obstacle #1? vs. Corporate Ac4on % of companies having signed PPAs Fortune % Fortune % Mostly F100 have taken ac4on Fortune % Signed Deals Haven't Signed Deals Source: Power Forward 2.0 WWF, Ceres, Calvert, DGA; RMI Analysis For more informa4on, please visit hfp:// or contact BRC@RMI.org 21

22 Obstacle #1? Ac4on Is Coming BRC member survey July 2016 total of 32 companies Defining the approach 44% Currently AcPve In the process of execu4ng a deal 22% Not Currently AcPve Plan to do transac4ons in the future Do not plan to do transac4ons in the future 3% 31% Note: Percentages based upon 32 company respondents to BRC poll.

23 Obstacle #2? Low Gas Prices Is not it now the best 4me to sign a long term contract? Henry Hub Natural Gas Prices Historical and Futures 15 Price ($/mmbtu) Jan '00 Jan '05 Jan '10 Jan '15 Jan '20 Jan '25 Avg Henry Hub Spot Henry Hub Futures Source: EIA, SNL Financial For more informa4on, please visit hfp:// or contact BRC@RMI.org 23

24 Obstacle #3? Ver4cal Integra4on (1/3) 2014 US GDP vs Electricity Produc4on vs Deals GDP 100% = $17.2 Trillion Electricity ProducPon 100% = 4,093 TWh Deals Signed 100% = 4.17 GW Ver4cally Integrated U4lity 32% 41% 10% Out of the 0.4 GW signed in regulated states, 72% was for new loads Open Wholesale Market 68% 59% 90% Source: EIA 2014, Bureau of Economic Analysis 2014, RMI Analysis 24

25 Obstacle #3? Ver4cal Integra4on (2/3) NV Energy signed green tariff deals with Apple & Switch Apple TransacPon Switch TransacPon Deal Structure 50 MW Boulder Solar II Project in Nevada s Eldorado Valley, developed by SunPower The deal will offset Apple s power supply as it expands in Northern Nevada 79 MW addi4on to approved 100 MW sta4on north of Las Vegas, developed by First Solar The deal goes towards Switch s goal to go 100% renewable for its Nevada technology ecosystems In both cases, the buyer pays a green tariff to NV Energy The tariff structure is intended to avoid nega4vely impac4ng the rates offered to other customers who use the same grid 25

26 Obstacle #3? Ver4cal Integra4on (3/3) MGM represen4ng 4.9% of NV Energy consumer load op4ng out The Story Context MGM Resorts intends to leave NV Energy MGM will play an exit fee of $ 86.9 million to protect other NV Energy ratepayers from assuming the costs of large customers exi4ng the u4lity according to Nevada s Public U4li4es Commission MGM will s4ll use NV Energy grid but will procure energy from a third party power supplier expected by October 2016 Nevada is a regulated state with no electricity wholesale market Nevada law passed in 2001 ( NRS 704b ) allows large consumers to leave if they bring new genera4on to the grid, receive PUC approval and pay an exit fee 26

27 Implica4ons for Sustainability Managers? 1 Off-site renewables cannot be ignored 2 The market is maturing but is not mature yet 3 Intermediaries are key for first transac4ons 27

28 Connec4ng Buyers and Sellers BRC membership 152 members Market Place 18.5 GW Demand pos4ng CO2 calcula4on Other services Fair value tool Contract standards China *The data shown above are illustra4ve and do not represent real projects. 28

29 Hervé TouaP hfp:// Thank You! BUSINESS RENEWABLES CENTER BUSINESS RENEWABLES CENTER