Renewable Energy Industry Overview

RENEWABLE ENERGY INDUSTRY OVERVIEW

Aaron Bonanno and Chris Martell

Established in 1998, GSES® leads Australia in renewable energy engineering, training and consultancy.

- Official Australian - System testing and - Grid Connected PV, - Grid Connected PV Registered Training commissioning Stand-Alone PV and Systems Design and Organisation (RTO) hybrid system design Installation - Tender specification and - Face to face practical evaluation - Feasibility studies - Stand Alone Power and online training Systems Design and - System compliance - DNSP liaison for Grid Installation - Grid Connect PV (GCPV), inspections for the Clean Connected systems Stand-Alone, GC with Energy Regulator and - News releases, Technical Batteries, Solar private business Articles and much more. Fundamentals, etc.

• Status of the Renewable Energy Sector • Australia • Global • Current Industry Direction • Policy • Economic Drivers • Disruptive Technology • What is the Future of the Industry • New Technology • New Energy Markets

United Nations World Human Population Estimated Global Energy Consumption Per Capita

Current Consumption In Relatable Terms: 80Gj/person/year ~= 60kWh/person/day ~= 390TWh Globally/day (2010 figures) which is roughly the same amount of energy needed to fly from Sydney to LA 100,000 times (…on an A380)

Large Scale Generating Power Stations As of 2013 there were 394 registered large scale generation systems in Australia: • 101 Hydro • 78 Wind • 68 Solar • 62 Landfill Gas • 85 Other

*Clean Energy Regulator

Large Scale Energy Generation As of 2013, large scale renewables have accounted for approximately 17 TWh of energy production. This equates to about 8% of all electricity produced in Australia according to the Australian Energy Regulator

*Clean Energy Regulator

Small Scale Installations

As of 2013 there were 2M registered small scale installations in Australia

*Clean Energy Regulator Estimated Generation and As of 2013, energy efficient hot water displaced about Displacement 2.5 TWh of energy and small scale renewables generated about 4TWh of energy. In total, small scale generation/displacement equates to about 3% of all electricity produced in Australia according to the Australian Energy Regulator

*Clean Energy Regulator

Wind Power

Government Policy – The Renewable Energy Target and emissions reduction target are expected to drive the development of wind power in Australia

Resource – Australia has some of the best wind resource in the world, however much of it is localised in the western, south western, southern and south eastern coastal areas

Grid Constraints – lack of capacity or availability may limit further growth of wind in some areas with good wind resource

Variability – intermittency imposes an inherent upper limit on wind energy, but this is not *Sustainable Energy Development Authority of NSW expected to be reached until the projected 2030 penetration level

Wind Power

- 2009 Wind Penetration level was 4TWh representing 1.5% of total electricity generation

- Australian Bureau of Agriculture and Resource Economics has projected a total penetration of 44TWh by 2030 which would represent 12.1% of total forecast electricity generation

*Capital Wind Farm (Lake George, NSW)

Hydro Power

- Currently the main source of renewable energy generation in Australia

- 2008 Hydro Penetration level was 12TWh representing 4.5% of total electricity generation

- Australian Bureau of Agriculture and Resource Economics has projected that hydro will only increase by 0.2%/pa over the next 20 years to 13TWh

*ABARE

Hydro Power

- According to Geoscience Australia the majority of Australia's economically feasible hydro energy resource has already been harnessed.

- Through the use of micro-hydro and pumping stations, capacity can be increased, however as Australia is the driest inhabited continent on Earth other RE technology must be used.

- Wind it set to take over hydro as the main renewable energy generator in the next 20 years

*Snowy Hydro

Solar PV Power - Enough solar irradiation falls on Australia each year to satisfy 10,000 times its annual energy demand

- ABARE predicted in 2008 that annual generation would reach 4TWh by 2030, however 4TWh were generated from PV this year

- Cost competitiveness and industry maturity combined with policy incentives, falling demand and increased utility tariff rates have rocketed the industry forward.

- As an indicator of price reduction, global average module price has fallen by 80% since 2009 ($3.25/watt in 2009 to $0.65/watt in 2013)

*Australian Bureau of Meteorology

Solar PV Power - As Australia has removed its renewable energy incentives (State Feed in Tariffs (FIT) and Renewable Energy Credit (REC now called STC/LGC) multiplier the market has shifted towards commercial and utility

- Fiscal year 2013 saw the flattening of the residential sector. Commercial/Utility accounted for about 5% of the market prior to 2012 compared to about 20% this year.

- Continuing trends and the emergence of energy storage should keep the PV market healthy into the next decade *Greenough River Solar Farm

Solar Thermal • Kogan – 44MW compact linear Fresnel reflector (CLFR) due to be complete end of 2014 Market Share: • NSW – 30% • Mildura 1.5MW-stage 2, plans for • WA – 26% 100MW stage three • QLD – 19%

• 50% residential solar hot water - 50% space heating, swimming pools, commercial

(Source: Australian Energy Resource Assessment 2013)

Geothermal Power Landfill Gas Power - Birdville 80kW Geothermal Power Station owned by Ergon

- New project in Cooper Basin, SA by Geodynamics Ltd.

- Good potential in select areas *Australian Geothermal Energy Association

Wave/Tidal Power *Ecogeneration – Ti Tree LGP - Tamala Park and Red Hill, WA - Perth Wave Energy by Carnegie amongst the few active power will be the worlds fist grid generating landfills (combined connected commercial scale 9MW) wave power system - Other projects in the pipeline - Applications for desalinated but limited by location and water and power for remote resource communities - Very low Levelised Cost Of - Pilot project for other types of *Australian Renewable Energy Agency Electricity (LCOE) generation wave power

*Australian Bureau of Resources and Energy Economics

*REN21 (Renewables 2014 Global Status Report)

- Solar PV is the most ubiquitous and active sector and still only represents 0.7% of energy consumption

Wind Power

*Global Wind Energy Council - Wind power has been increasing at a relatively steady rate over the past two decades

- It is interesting to note that 2013 was the first year that there was not an increase in the capacity of wind generation installed above the year before it

- The decline however is mostly due to US policy which encouraged a record number of installations in 2012. Despite the decline in growth, industry experts are still bullish on wind.

Hydro Power

*Hydro and Dams World Atlas 2012

- Unlike Australia, the rest of the world is only using approximately 30% of its total Hydro Power potential

- China and the rest of Asia account for nearly 60% of all hydro potential

Solar PV Power

*IEA-PVPS T1-22:2013 - The global Solar PV market has doubled six times since 2004

- Australia has largely followed the trend but is still outpaced by many other markets

Solar Thermal

(Source: REN21 2013) Looking at a solar start up? India and Greece are developing markets

*Energex *Stanford University - The energetic implications of curtailing versus storing solar- and wind-generated electricity

- The “Duck Curve” has been experienced by utilities around the globe. The new demand curve can cause issues with grid protection equipment and grid quality. Energex (and others) are now limiting solar installations by demanding non-export systems and even denying grid connection in some areas

- Solar as well as other types of renewables are intermittent generators and can greatly disrupt the existing electrical infrastructure….This creates an amazing opportunity

*California ISO

- The economics that have driven the surge of renewables will now continue to drive the creation of a truly smart grid

- Grid communications, distributed and diverse generation/storage and dynamic demand control will lead to a cheap and reliable future grid system

LRET: 20% by 2020 – 41850GWh SRES: Uncapped FiT – All states reduced to 8- 20c/kWh depending on state and retailer.

(Source: Emissions Reduction Fund White Paper)

Emissions Reduction Fund - $1.55 to $2.55 Billion – Review in 2015 Emissions Reduction Target – Real 5% to 20% by 2020

China

(Source: Netherlands Environmental Assessment Agency)

• 6.15TWh of energy generation and shift to gas and RE

India

Goals of Ministry of New and Renewable Energy: • 10GW by 2017 • 22GW by 2022 • One solar light in every home by 2019

(Source: Central Energy Authority India)

European Union

The EU Energy Policy Target for 2020 is: • 20% Renewable Energy • 20% GHG Reduction • 20% in Energy Efficiency

(Source: Eurostat)

United States of America

• EPA – Labelled CO2 as an air pollutant this has given President: • 30% reduction in GHG emissions by 2030 • DoE target to reduce cost of solar to $0.06/kWh by 2020

Hawaii – 2009 : RE target of 40% by 2030 and 30% in EE: • Large Penetrations of RE in Grid. • The Public Utility Commission is regulating the local utility to adopt distributed generation philosophies (Source: DBEDT Hawaii State Energy Office)

(Source: REN21 2014)

(Source: REN21 2013)

10 Category Typical Applications Current price 8 $/W Off-Grid > 1kW Telecommunications, mining, 5 – 15 6 remote homes

4 Residential Grid-Connected system up to Residential 2.5 – 3.5 10kW 2 Grid-connected Rooftop from 10 to 250 Commercial Rooftops 2 – 4 kW (commercial) 0 Grid-connected Rooftop above 250kW Large Rooftops 2 – 4 1990 1995 2000 2005 2010 2015 (industrial) Typical PV module price Lowest module price Grid-connected Ground mounted above 1 Solar Farms 1.5 – 2.5 16 MW 14 12 10 Australia: 8 0.8GW installed in 2013 6 4 Over One million solar homes in 2014 2 0 International: 1995 2000 2005 2010 2015 Typical Price Balance of System price 43GW manufactured in 2013 (Source: APVI 2013) Cheapest module is $0.5/W

Australia: • Total wind capacity is 3.2GW as of 2013 • 14 New projects totalling 1.86GW in 2013-2014

(Source: Australian Energy Resource Assessment 2013)

International: • 35GW added in 2013 • Asia is the largest market • Europe offshore wind makes up 34% European sales

(Source: REN21 2013)

Australia: • Sugercane industry is self sufficient by using cogeneration of Bagasse • Ethanol production – 440ML • Biodiesel production – 305ML • Limited by low cost feed stocks • Electricity generation 0.9% total • Ingham 80-85MW plant 200000L ethanol

International: • 7% increase in transport • USA become largest producer corn ethanol • Research is ongoing into fuel from Algae

(Source: Australian Energy Resource Assessment 2013)

Global Solar Industry grew 20% in 2013 EU skills shortage in 78% companies (Source: REN21 2013)

(Source: WattClarity NEM Watch 2014)

Sorted demand and price, QLD 2010 10000 10000

9000

8000 1000

7000

6000 100

5000 Demand(MW) 4000 10 Price($/MWh)

3000

2000 1

1000

0 0.1

Demand 100 per. Mov. Avg. (Price)

(Source: NEM 2010)

• Combination of VRLA and Ultra-capacitor technology mitigates degradation from sulfation

• Just announced they are moving into the domestic space

(Source: Ultrabattery)

• Complete grid support system

• Control

• Substation

• Diesel Gen Set

• Lithium Batteries (Source: ABB Ltd.)

• 105kW

• 99.2kWh

• Lithium Ion battery

• Outdoor enclosure

• Direct PV connection

• Has the ability to communicate with utilities, and participate in demand response and aggregated dispatch

(Source: Green Charge Networks)

• Lithium iron phosphate

• DC bus system 5kW input 4.4-13.2kWh storage

• Claim 15 yrs (~5500 cycles) at 70%DOD

(Source: Bosch GmbH)

Levelised Cost of Electricity $0.50

$0.45

$0.40

$0.35

$0.30

$0.25

LCOE$/kwh $0.20

$0.15

$0.10

$0.05

$0.00 2012 2014 2016 2018 2020 2022 2024 2026 Year

Solar Solar with Lead Acid Utility Solar with Lithium Battery (Source: Rocky Mountain Institute)

CSE – 2.1c/kWh (Source: Berkeley Labs LBNL 2014)

(Source: Pitt&Sherry 2013)

China

IPCC India Germany: • Aldel – Al manufacture filed for bankruptcy Germany • Bloomberg – Whole sale price dropped 1.5c/kWh since 2009 Asia Apple 6% reduction Pacific Inc. Bank • BASF – Chemical company RWE invests $10B

(Source: Bloomberg and HSBC 2014)

Solar Reactor uses energy from the sun, water and carbon dioxide scrubbed from the air to generate Syngas.

Syngas is used in the Fischer-Tropsch process to make liquid fuels. The Swiss University ETH Zurich have improved the processes and are reporting efficiencies of 1.73%. Commercial cost competiveness is

(Source: ETH Solar Reactor) 15%, which if reached could see as much as 20 litres a day from a 1m2 reactor.

CSIRO sets world record for super critical steam created using solar concentrating power.

Abengoa expects concentrating solar power to be cost competitive with GCC.

(Source: CSIRO and Abengoa)

(Source: NREL 2014)

Wave Power

- Perth Wave Energy by Carnegie will be the worlds fist grid connected commercial scale wave power system

- Applications for desalinated water and power for remote communities

- Pilot project for other types of wave power

(Source: Carnegie)

(Source: CSIRO 2014)

Case Study – Feldheim: • Individual installs 1st wind turbine in 1995 to cover agricultural market drops. • 74.1MW Wind Farm established. • 2700MWh/year Solar Farm constructed • 400kW Biomass furnace • Biogas Reactor In 2010 the town purchased their own smart electricity mini-grid as the network operator was not willing to sell and became their own utility. As a result the town now pays 31% less for electricity and 10% less for heat and the remaining energy is sold to surrounding towns.

(Source: Reneweconomy)

(Source: Powershop)

(Source: NEST and Savant)

• In a similar way to how the market currently operates, retailers can now install intermittent (PV) and generation and dispatchable generation where it will be consumed. • Some load will be serviced by the grid, some by the PV, and the remainder by the battery storage. Batteries can also be charged during off peak times when the price of energy is low. • Consumers still pay a connection fee and fixed tariff for their energy