About CELA CELA – Clean Energy Latin America is a Brazil-based financial advisory and consulting firm supporting renewable energy companies interested in investing in Latin America with: - - - - - -
Equity fundraising, Project finance structuring, Mergers & Acquisitions, Advisory for participating in energy auctions, Investment and strategy consulting, and Financial due diligence of projects.
We are specialists in solar PV, wind, bioenergy and small hydro
CELA Clients
Recent Track Record in PV (selected)
M&A Financial Advisor Current mandate
M&A Financial Advisor Current mandate
DG Solar PV Business Plan Consultant
DG Solar PV Business Plan Consultant
2016
2016
2016
2015/16
DG Solar PV Business Plan Consultant
M&A Financial Advisor 170 MW PV
BRL 1,777,192,717 PV Auction Financial Advisor
Clean Energy Solutions Center Finance Expert
2015
2015
2015
2015
Latin America DG Solar PV Strategy Consultant
BRL 869,743,453 Wind Auction Financial Advisor
Brazil Solar PV Market Study Consultant
Latin America PV Solar Business Plan Consultant
2015
2014
2014
2013
UTILITY Confidential
Agenda •
The Brazilian Renewable Energy Market
•
Utility-Scale PV
•
Distributed Generation (DG)
4
Brazil power market at a glance: large market, even larger growth potential North Population
8.5%
Consumption
6.8%
Average tariff (BRL 2 015)
482.00
Average tariff (USD 2 015)
137.71
North (N) Center West (CO) North E ast (NE) South E ast (SE) South (S) North East
Center West Population
7.6%
Consumption
7.2%
Average tariff (BRL 2 015)
545.13
Average tariff (USD 2 015)
155.75
27.9%
Consumption
17.0%
Average tariff (BRL 2 015)
466.59
Average tariff (USD 2 015)
133.31
South East
South
Population
42.2%
Consumption
51.1%
US$ 1.77 trillion
Average tariff (BRL 2 015)
547.83
Population (2012)
202,401,584
Average tariff (USD 2 015)
156.52
Installed capacity (2015)
140,272 MW
PV installed capacity
25 MW
Consumption (2015)
522,832 GWh
Residential tariff (2015)¹
R$579.78/MWh (US$ 166/MWh)²
Commercial tariff (2015)¹
R$567.80/MWh (US$162/MWh)²
Population
14.4%
Consumption
17.8%
Indicator
Average tariff (BRL 2 015)
541.65
GDP (2015)
Average tariff (USD 2 015)
154.76
5
Population
Source: ANEEL, 2015. ¹ Prices include taxes, distributuion / transmission fees ² Considered BRL3.50/USD
Brazilian power matrix shift: from hydro to PV
Capacity mix, 2015 3 2 0 2% 1%0%
8.9, 6%
Capacity mix, 2040
0.021 0%
5.9 4.4%
4 1% Hydro
1 0%
20 5% 125 32%
Biomass
15 11%
Oil
140 GW 12.6, 9 %
Wind 90.8, 6 5%
Nuclear
Flexible Capacity
Source: BNEF, 2016.
44 11%
400 GW
Coal
Solar
6
36 9%
Gas
4 1%
48 12% 117 29%
The Brazilian solar resource is exceptional;; its lowest irradiation is better than most of Europe’s highest •
The annual mean of daily horizontal global solar irradiation in any region of Brazil higher than 1,500 kWh/m2, much greater than those for the majority of the European countries
•
The maximum solar irradiation value is 2,372 kWh/m2;; it occurs in the northern part of Bahia state
•
The lowest global solar irradiation – 1,550 kWh/m2 – occurs on the North shore of Santa Catarina
7
Source: ABINEE.
Brazil average annual irradiation (kWh/m2/day)
How will PV get from a few MW to 14GW in 2026 and 125GW in 2040? Rising Power Tariffs
Falling PV Costs Projection
200
140 120 100
18,000,000
9,000
16,000,000
8,000 2.00
Power Cost (R$/kWh)
Cents USD/W
160
Number of consumers per state/region, 2014
2.50
Fall$in$module$ prices$4% CAGR$from$ 2015$to$2040$
180
Large Market / Growth
Grid Parity Analysis - Residential Segment (Total Power Cost¹ vs. Solar DG Production Cost)
80 60 40
7,000 6,000
1.50
5,000 4,000
1.00
3,000 2,000
0.50
20
PV System Capex (R$/kWp)
Historical
1,000
-
0.00
0 2015
2020
2025
2030
2035
14,000,000 12,000,000 10,000,000 8,000,000
Commercial Industrial
6,000,000
Residential
4,000,000 2,000,000 -
2040
PV System Capex (R$/kWp)
Power Cost - Bandeirante (R$/kWh)
Solar DG Production Cost (R$/kWh)
Power Cost - CEMIG (R$/kWh)
North
LER.2014
1º.LER.2015
2º LER.2015
Dez/2013
Out/2014
Ago/2015
Nov/2016
Registered
37;proj /;1,0GW 400;proj/10,7GW
382;proj /12,5GW 649;proj/ 21GW
Sold
5;proj /;92 MW
30;proj/;834 MW
31;proj /;890 MW
33;proj/ 929.MW
R$250,00/MWh R$262,00/MWh
R$359,00/MWh
R$381,00/MWh
Avera.;Price
R$242,66/MWh R$215,12/MWh
R$301,79/MWh
R$297,37/MWh
COD
Jan/17
Out/17
Ago/17
Nov/18
Investment
R$0,6 billion
R$4,5.billion
R$4,5.billion
R$4,4.billion Virtual(net( metering
Ceiling Price
Business+ Model
Self/ consumption
Pernambuco Date
New Business models for DG
Condominium
Regular / Annual PV Auctions
Consumer+/+ Client+(UC)
Location+of+energy+ generation
Location+of+net+ metering+energy+ use
PV+System
Product
Client+(residence+ /commerce/industr y is+the+owner+of+ the+project+UC+ (power+bill)
House+/+land+must+ be+owned+or+ leased+by+the+client
House+/+land+must+ be+owned+or+ leased+by+the+client Other+locations+ owned+by+the+client+ but+within+same+ concession+area
Equipment+may+be+ owned+by+NewCo
Contract+between+ NewCo and+client: 3 Rental 3 Leasing+/+BOT 3 Financed+sale,+ etc.
Condominium+area Apartments+/+ houses+/+offices+ owned+by+ condominium+ members+as+per+ quotas
Equipment+may+be+ owned+by+NewCo
Contract+between+ NewCo and+client: 3 Rental 3 Leasing+/+BOT 3 Financed+sale,+ etc.
Apartments+/+ houses+/+offices+ owned+by+ condominium+ members+but+ within+same+ concession+area
Equipment+may+be+ owned+by+NewCo
Contract+between+ NewCo and+client: 3 Rental 3 Leasing+/+BOT 3 Financed+sale,+ etc.
The+condominium is+the+UC+and+ client
Generation+at+ location+of+ consumption Condominium+area
Need+to+prove+ condominium+and++ allotment Consortium/Coope rative+is+the+UC+ and+client Clients+must+own+ quota+in+the+ consortium
Remote+area+ allowed Owner+of+UC+must+ own+or+lease+land+ where+generation+ is+located
14
8
North East
South East South Center West
New Products for DG Rent /&Leasing&of PV&system
Financed Sale of PV&system
Installation,. maintenance.and. monitoring CLIENT
Installation,. maintenance.and. monitoring Solar.Company
CLIENT
Operation. Agreement.vs.. Net.Metering
UTILITY
Solar.Company Purchase.in. installments
Monthly.payment
Operation. Agreement.vs.. Net.Metering
UTILITY
Advancement of PV Sector in Brazil: net metering, tax incentives and PV auctions
2011-2012 - ANEEL’s 1st PV R&D - RN 482: net metering 9
2013 - Pernambuco 1st PV auction in Brazil, 92MW in PPAs - Solar stadiums
2014 - BNDES 1st PV financing line - 1st federal PV auction contracts ~1GWp in PPAs - Cumulative installed PV capacity: 15MW
2015 - RN 687: virtual net metering - 2,000 DG installations - 2 PV auctions contract ~2GWp - Convênio ICMS 16/2015 : tax breaks - Other tax incentives such as PIS/Cofins Law 13.169/15 - Cumulative installed PV capacity: 40MW
2016 - 2 PV auctions: July 2016 and October 2016 - Canadian Solar PV module factory - 17 PV component manufacturers present in Brazil - Cumulative installed PV capacity: 150MW 3GWp under construction
Agenda •
The Brazilian Renewable Energy Market
•
Utility-Scale PV
•
Distributed Generation (DG)
10
~3GW have PPAs from the Brazil PV auctions Pernambuco
LER 2014
1º LER 2015
2º LER 2015
Date
Dez/2013
Out/2014
Ago/2015
Nov/2016
Registered
37 proj / 1,0GW 400 proj/10,7GW
382 proj /12,5GW
649 proj/ 21GW
Sold
5 proj / 92 MW
30 proj/ 834 MW
33 proj/ 929 MW
Aver. Price
R$242,66/MWh R$215,12/MWh
R$301,79/MWh
R$297,37/MWh
Aver. Price
USD69/MWh
USD61/MWh
USD86/MWh
USD85/MWh
COD
Jan/17
Out/17
Ago/17
Nov/18
Investment
R$0,6 billion
R$4,5 billion
R$4,5 billion
R$4,4 billion
31 proj / 890 MW
Investment ~R$14 billion • •
2 PV auctions announced in 2016: July (~12 GW registered) and October A further 1 to 2GW of PPAs are expected to be contracted via auction every year
11
Source: CCEE, 2016.
The main winners of the PV auctions in Brazil: global PV players Enel#Green#Power Outros#(
