CLEAN ENERGY MARKET IN JAPAN AND US US-JAPAN RENEWABLE ENERGY POLICY BUSINESS ROUNDTABLE, TOKYO
YUGO NAKAMURA 3 DECEMBER 2012
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CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
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INVESTMENT BY COUNTRY AND SECTOR, 2011 ($BN) United States China Germany Italy Rest of EU-27 India United Kingdom Japan Spain Brazil Canada France Australia Indonesia South Korea Turkey Argentina Mexico South Africa 0
10 Wind
Solar
Other renewables
20
30 Biofuels
40
50
Efficiency & low carbon tech/services
Note: A full description of the methodology and parameters employed for the analysis can be found in the Pew Charitable Trusts report, ‘Who’s Winning the Clean Energy Race? 2011 edition’.
/ / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
Source: Bloomberg New Energy Finance
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INVESTMENT BY COUNTRY AND FINANCING TYPE, 2011 ($BN) United States China Germany Italy Rest of EU-27 India United Kingdom Japan Spain Brazil Canada France Australia Indonesia South Korea Turkey Argentina Mexico South Africa 0
10 Asset finance
Small distributed
20
30 Public market
40
50
Venture capital/Private equity
Note: A full description of the methodology and parameters employed for the analysis can be found in the Pew Charitable Trusts report, ‘Who’s Winning the Clean Energy Race? 2011 edition’.
/ / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
Source: Bloomberg New Energy Finance
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CONTENTS
1. Japan 2. US
/ / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
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JAPAN
• An ambitious goal to increase renewables: 25-35% of power supply by 2030 • Challenge for energy system transformations
• Feed-in tariff: generous rates opened new window of opportunity • Solar by far leads the market, wind to follow
• The government is hashing out measures to stimulate investments • Regulatory easing • Access to resources • Streamlining application processes • Re-examining safety rules • Tax incentives (eg, accelerated depreciation)
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JAPAN NUCLEAR POWER CAPACITY, 1966-2040 (GW)
Note: The scenario assumes no capacity will be built, and existing reactors will be closed after 40 years of operational life (except the ones with extension permissions).
Source: METI, Bloomberg New Energy Finance
/ / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
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GOJ’S POWER SUPPLY SCENARIO BY TYPE, 2010&2030 (TWH)
Note: A scenario that assumes nuclear supplies 15% of power of demand in 2030. Hydro includes ‘pumped hydro’.
Source: The Energy and Environment Council
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GOJ’S SCENARIO ON CUMULATIVE CAPACITY BY TYPE (GW)
Note: A scenario that assumes renewables supply 30% of power by 2030. B&W=biomass and waste. B&W capacity in 2010 is adjusted based on Bloomberg New Energy Finance data. Hydro excludes ‘pumped hydro’.
Source: The Energy and Environment Council
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JAPAN RENEWABLE PROJECTS, JAN 2011-NOV 2012 (MW, NUMBER OF PROJECTS)
Note: Data as of 27 November 2012. B&W=biomass and waste. Projects less than 1MW are not included. Projects without specific site information are not included.
/ / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
Source: Bloomberg New Energy Finance
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EQUITY IRR ESTIMATES UNDER THE CURRENT FIT RATES SOLAR PV: JPY 40/KWH FOR 20 YEARS 80%
ONSHORE WIND: JPY 22/KWH FOR 20 YEARS
70%
70%
60.3%
60%
60%
50%
50%
40%
40%
30%
30%
20%
73.4%
80%
19.0%
20%
8.6%
10%
10%
0%
0% GoJ model
Equity IRR (%) LCOE (JPY/kWh) LCOE ($/MWh) CAPEX (JPYm/MW) OPEX (JPYm/MW/yr) Capacity factor (%)
BNEF Japan
GOJ model 8.6 40.8 531 340 9.2 12
BNEF global
BNEF Japan 19.0 30.8 400 273 5.3 12
BNEF global 60.3 16.0 208 180 6.2 17
25.9% 10.3%
GoJ model
Equity IRR (%) LCOE (JPY/kWh) LCOE ($/MWh) CAPEX (JPYm/MW) OPEX (JPYm/MW/yr) Capacity factor (%)
BNEF Japan
GoJ model 10.3 21.8 283 300 6.0 20
Note: Other assumptions - JPY 76.91/$, straight line depreciation method, 0.2%/yr inflation rate, 35.64% of corporate tax rate, construction debt ratio/lender margin – 80%/225bp for solar, 70%/275bp for wind, long term debt ratio/tenor/lender margin – 80%/16yrs/225bp for solar, 70%/17yr/275bp
/ / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
BNEF global
BNEF Japan 25.9 13.2 172 200 4.6 22
BNEF global 73.4 6.2 81 129 2.2 30
Source: Bloomberg New Energy Finance
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CONTENTS
1. Japan 2. US
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US
• Federal programmes stimulated investment in renewables during the last four years
• Cash grants, tax credits, loan guarantee etc.
• President Obama continues to support renewables yet… • Many programmes are expiring • Budget will be scaled down compared to his first term • Wind peaks out as PTC expires in December 2012 (President is for extension)
• Solar continues to grow as falling system prices improve the economics • States lacking solar mandates are emerging as potential markets
• Competitive market; renewbles need less support to commercialise / / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
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US ENERGY-RELATED TAX PREFERENCES AND CRUDE OIL PRICES, 1977-2011 ($BN, $/BBL)
Note: Dollar value in 2011 dollars. Crude oil = annual average imported price.
Source: Congressional Budget Office, EIA/DOE, Bloomberg New Energy Finance
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US NET ELECTRIC POWER GENERATION MIX 2006
Note: Solar does not include generation from distributed PV.
2011
Source: Electric Power Monthly, EIA/DOE
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PV MODULE SUPPLIERS IN THE CALIFORNIA SOLAR INITIATIVE, BY PERCENTAGE OF TOTAL MW, COUNTRY, AND QUARTER, Q3 2009 – Q3 2012 100% 90% 80% 70% 60% 50% 40% 30% 20% 10%
6% 7% 9% 10% 10% 13% 13% 13% 8% 12% 16% 14% 18% 9% 7% 5% 10% 13% 8% 11% 5% 4% 11% 15% 7% 7% 21% 15% 29% 25% 29% 11% 15% 20% 18% 19% 30% 14% 39% 30% 18% 15% 17% 26% 39% 26% 26% 14% 37% 48% 21% 20% 53% 45% 44% 42% 38% 34% 31% 30% 27% 24% 20% 18% 13%
Rest of world Germany Japan US China
0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 10 10 10 10 11 11 11 11 12 12 12 Note: ‘Country’ is of corporate headquarters, not country of manufacture. Market share based on installations for Q3 2009 – Q4 2011, and applications for Q1 – Q3 2012.
Source: Bloomberg New Energy Finance, California Solar Initiative.
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INSTALLATIONS PER QUARTER BY OWNERSHIP, Q1 2008 – Q3 2012 (% SHARE) RESIDENTIAL MARKET
COMMERCIAL-SCALE MARKET
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008
2009 2010 2011 Third-party financed Host-owned
2012
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008
Note: ‘Residential’ is defined as systems 10kW or less and where ‘host-owner sector’ is labelled ‘residential’ in the CSI dataset. ‘Commercial-scale’ is based on the ‘host-customer’ label in the CSI dataset. “Commercial-scale’ covers only systems between 10kW and 1,000kW DC.
2009 2010 2011 Third-party financed Host-owned
2012
Source: Bloomberg New Energy Finance, California Solar Initiative.
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LEVELISED COST OF ENERGY Q4 2012 ($/MWH) JPY8/kWh Marine - wave Marine - tidal STEG - LFR STEG - tower & heliostat STEG - parabolic trough + storage Wind - offshore STEG - parabolic trough STEG - tower & heliostat w/storage PV - c-Si Biomass - anaerobic digestion PV - c-Si tracking Biomass - gasification PV - thin film Geothermal - binary plant Biomass - incineration Wind - onshore Landfill gas Municipal solid waste Geothermal - flash plant Large hydro Small hydro Nuclear Natural gas CCGT Coal fired
JPY32/kWh
JPY40/kWh 789 1,049 -
-2% -2% +2% +1% -3% -2%
0 LCOE
JPY24/kWh
JPY16/kWh
100 BNEF EU Carbon Forecast
200 Q4 2012 Central Scenario
300
400
500
Q3 2012 Central Scenario
Note: Carbon forecasts from the Bloomberg New Energy Finance European Carbon Model with an average price to 2030 of $38/mt. Coal and natural gas prices from the US EIA and BNEF. Percentage change represents change from Q3 2012
/ / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
Source: Bloomberg New Energy Finance
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JAPAN AND US LEADERSHIP, 2001-YTD2012
Source: Bloomberg New Energy Finance
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COPYRIGHT AND DISCLAIMER
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/ / / / CLEAN ENERGY MARKET IN JAPAN AND US, 3 DECEMBER 2012
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