AREVA Renewable Energies and India
Philippe Poux Vice president, Business Development & M&A [email protected]
Stricly Confidential Agenda
1. AREVA Group context
2. Renewable Energies Market and environment
3. AREVA activities in Renewables
2 Stricly Confidential AREVA: a strategy based on three pillars
Nuclear
X CO2 free electricity X Interconnections & HVDC generation X Commercial synergies – X Complementarities contact with utilities, (base & intermittent) international footprint X Technical, financial, and X Portfolio synergies commercial synergies X R&D leverage
T&D Renewable
X Integration of renewable in the grid & Smart Grids X Energy storage
“One-stop shop for CO2 free energy generation”
3 Stricly Confidential Key Financials 2008
Sales: 13,160M€ Operating income: 417M€ Consolidated net income: 589M€ Employees: 75,414
Standard & Poor’s recent Rating Short-term: 'A-1’ Long-term: ‘A’ on balance sheet strengthening Outlook: Stable
4 Stricly Confidential Agenda
1. AREVA Group context
2. Renewable Energies market and environment
3. AREVA activities in Renewables
5 Stricly Confidential Renewable energy, like nuclear, is an answer to 3 major concerns and a factor of local industrial development Energy dependence Fossil energy price volatility Import part of country energy consumption 100% $/t, $/bl $/MBtu (Gaz) 250 Pétrole 14 80% Charbon Gaz 12 200 60% 10 150 8
40% 6 100
4 20% 50 2
0% 0 0 Japan EU India USA China 02/01/07 02/07/07 02/01/08 02/07/08 02/01/09
Source : BP Statistical Review 2008, AREVA Source : Bloomberg, AREVA
CO2 world emissions Local industrial development (example of on-shore and off-shore wind in EU)
400 370 5% CAGR 330 350 (2007-2025) 300 Electricité 250 210 41% 200 155 150 100 50 0 H2 production 2007201520202025 7% * Direct and indirect employment in Europe for on-shore and off-shore wind sector. Includes direct and indirect employment in component manufacturing, utilities, developers, O&M, engineering and consultancy, R&D, financial, etc. Source : AIE 2008, AREVA (source: European Wind Energy Association, Jan. 2009)
6 Stricly Confidential Renewable energy, like nuclear, is little dependent on raw material prices Combined gas cycle MWh Nuclear MWh cost cost breakdown breakdown Fixed operational cost Combustible Fixed and other operational variable cost Carbon Capital cost 2% cost 12% 10% 15% 20%
70% 70%
Combustible and other variable cost Capital cost Coal MWh cost Renewable MWh cost breakdown: breakdown example of biomass (Brazil)
Fixed operational Fixed cost Combustible and other operational Carbon variable cost cost 6% Capital cost 11% 25% 22% 33%
67% 35% Capital cost
Combustible and Note: fuel can be “free of charge” (wind, sun), other variable cost sometimes even cost negative (waste) Source : Based on d’E-On estimations for Europe (Janvuary 2009), using carbon cost of 20 €/t ; AREVA’s estimation for biomass 7 Stricly Confidential Fast growth and consolidation on the on-shore wind segment have favored early movers
On-shore wind market performance to date Market share (2008)
Other 23%
CAGR ‘01- ’08 Siemens 60% 7% Suzlon 9% 89% Enercon 10%
Gamesa 12%
52% GE 19%
* Ves tas 20% * 23.5 GW of new Installed capacity build in 2008 = equivalent to 14 EPR 2008
X Acquisition of Enron Wind in 2002 (transaction size: 325 M$) Development X Acquisition of NEG Micon in strategies 2004 (transaction size: 330 M€) X Acquisition of Bonus Energy in 2004 (transaction size: 325 M€)
Sources: New Energy Finance, BTM Consult APS
8 Stricly Confidential Strong growth continues to be expected in short- to mid-term
Renewable energies installed base projection*
X Increasing share of “new” renewables into the electricity generation Installed capacity (GW) CAGR 1200 ‘08-’30 assets worldwide lead to a significant investment 960 GW 1000 level to be captured in the 42% renewable industry 800 38% 24% X A market of 65-90 580 GW 600 bn$/year average of new 10% capacity asset finance 401 GW 400 between 2008 and 2030 207 GW 13% 200 X Strong growth expected in off-shore wind (42% 0 CAGR, 2008-2030) and 2008 2015 2020 2030 Solar CSP (38% CAGR, % world 2008-2030) electricity 4.7% 7% 9.3% 12.8% generation capacity X On-shore wind remains New capacity the most important market 66 bn$/yr 85 bn$/yr 89 bn$/yr renewable energy (48% (asset finance (2008-2015) (2015-2020) (2020-2030) yr av.) of total ENR in 2030)
* Excluding hydro-electricity Source : WEO 2008 – reference scenario 9 Stricly Confidential Agenda
1. AREVA Group context
2. Renewable Energies Market and environment
3. AREVA activities in Renewables
10 Stricly Confidential Comprehensive portfolio of CO² free power generation technologies and services
Wind power Bioenergies Solar Energy Carrier & Storage Become a major player Design & deliver Design & deliver CSP Provide marketable in wind energy biomass fired power plants solutions to foster plants world wide renewable penetration
X Off-shore leader globally X Specialized EPC X Specialized EPC X R&D center for X Strong on-shore company for CO² free 50- company for CO² free Renewable Energies position in target 100 MW power plants – 50-100 MW solar power X Development of next geographies biomass fired plants generation storage X Ownership of range of X Ownership of critical solutions and Hydrogen critical technologies solar thermal production (combustion, technologies and gasification, pirolisis, possibly others (CPV) etc.)
11 Stricly Confidential Wind power product line
12 Stricly Confidential Unique product offering for wind off-shore
Eolienne Multibrid M5000 Eolienne Multibrid M5000 X Biggest wind turbine for off-shore market (5 MW) Positioned vs. Multi MW turbines
3.6 MW 5 MW
X Successful installation Alpha Ventus (1st off-shore wind park in German North sea)
X Design certified by GL Off-shore
X Broad range of services for the off-shore industry Design and manufacturing Maintenance
Source: New Energy Finance 11/04/2008, Companies
13 Stricly Confidential Manufacturing and sourcing
14 Stricly Confidential Installation and erection
15 Stricly Confidential Alpha Ventus project – 1st off-shore project in German North Sea
16 Stricly Confidential Off-shore for India – Key success factors
1. Wind speed? 2. Shallow waters? 3. Tariff and regulatory environment? 4. Existence of local players able to: 9 Manufacture some of the equipment 9 Install and erect the turbines 9 Develop projects 9 Finance projects
17 Stricly Confidential Bioenergies product line
18 Stricly Confidential Biomass – Rice Husk
BK URUGUAIANA Place: Uruguaiana – RS (Brazil) Customer: BK Energia Ltda.
Boiler: 40t/h – 43bar – 420ºC Rice husk
Steam turbine and generator: 8MW – 13,8kV – 60Hz (condensing)
Connecting substation: 7,5MVA – 13,8kV – 60Hz
Scope of Supply: Design and Management Electric and mechanic assembly Electric panels (power and control) Automation and control system Commissioning, start up and assisted operation
URBANO Place: São Miguel – RS (Brazil) Costumer: Urbano Agroindustrial Ltda.
Boiler: 15t/h – 22bar – 445ºC Rice husk
Steam turbine and generator: 2,2MW – 380V – 60Hz (condensing)
Connecting substation: 2,0MVA – 380/23kV – 60Hz
Scope of Supply: Design and Management Electric and mechanic assembly Electric panels (power and control) Commissioning, start up and assisted operation
19 Stricly Confidential Main references around the world
2 biogas + 5 mine gas power plants for 57 MWe GERMANY 2 Biomass power plants for 20 MWe 83 biomass power plants for THAILAND 2,296 MWe INDIA 3 biomass BRAZIL + 2 waste heat power plants for 47 MWe
CHILE
1 biomass power plants for 10 MWe 98 Power plants 2,430 MWe under operation or construction total installed capacity
20 Stricly Confidential Key technologies
X Existing technologies for biomass conversion
Combustion (complete oxidation) Heat AREVA
Solid Biomass Pyrolysis Charcoal and (wood, straw) (thermal decomposition) pyrolisys gas (CxHy + tar + CH4) Gasification Synthesis (incomplete oxidation) Gas (CO, Physico–chemical H2) conversion Oil crops Pressing, Bio-diesel (rapeseed, sunflower) esterification Biological Conversion Ethanol Alcoholic ferment. Sugar and starch Thermo chemical Plants + distillation Stillage conversion (sugar beet, cereals) Anaerobic CO2 + CH4 AREVA Wet Biomass Digestion Leachate (organic waste, manure) Aerobic CO 2 Digestion Compost X Bioenergies focus : Biomass power plant (combustion): bagasse, rice husk, wood, etc… Biogas process (Anaerobic digestion): z Ending market in Europe z Potential market in Brazil, with a economical study underway X Bioenergies R&D subjects : Gasification (with possible applications in 5/10 years) Pirolysis (or production of bio-oil)
21 Stricly Confidential An innovative business model: ADAGE with local adaptation in India with Astonfield
X Launched in Sept 2008 at the Clinton Global Initiative
X Plan to develop twelve 50 MW biopower energy plants in the continental U.S. for green electricity customers
X First biopower partnership in the United States between major energy companies, AREVA and Duke.
X Will develop biopower plants that use wood waste to produce electricity.
X Similar agreement with Astonfield, an Indian renewable project developer, signed in July 2009
Fleet of 10 x 10 MW bioenergy plants AREVA will design and build biomass power plants Astonfield will manage operations Co-ownership of plants: 60% Astonfield, 40% AREVA
22 Stricly Confidential Hydrogen power product line
23 Stricly Confidential Innovative technologies… For hydrogen power
Strategic deliverables X Stationary and embedded power generation based on fuel cells
Current deliverables
Standalone 16 – 80 kW Didactic fuel cell systems fuel cell back-up power for higher education systems
X An industrial didactic bench based on a 1 kWe and 1 kWth fuel cell
Télécoms Data Centers Industry Hospitals
24 Getty Images: DigitalStricly vision Confidential – John Foxx – Kim Steele - Stockbyte Innovative technologies… For hydrogen production
Strategic deliverables X Breakthrough industrial solution for Carbon-free Hydrogen production by water electrolysis Current development
High pressure PEM High temperature electrolyser electrolyser
PEM Electrolyser System up to 50 barg Endurance tests > 5000 h
25 Stricly Confidential Innovative technologies… For energy storage
Strategic deliverables X Safe and scaleable Storage solution for Renewable Energy generation Current development
X Hydrogen storage: Electrolysis and Fuel Cells
X Electrochemical storage & Thermal storage
Production from renewable sources Stable and continuous Wind Turbines electrification requirements
Electrolyser PV Panels
Technical remote sites
Gas storage Local grid
µ-grids - Housing
Fuel Cell
Energy management Insular grids and storage Batteries Control
26 Stricly Confidential Hydrogen for India: “Green Onshore Island”?
X A decentralized energy solution for: Remote areas where installing a transmission network would be too expensive a back-up power clean alternative solution to UPS and diesel in particular sensitive areas where existing electricity infrastructure is weak X A green friendly environmental solution: Primary energy is renewable No liquid pollution No noise, no vibration No CO2 Only limited water required : 45 l/h/MW X A solution adapted to India: Where the market is much bigger than Europe or USA: many sites with no energy, low reliability networks Industrialization in India is possible to reach competitive CAPEX prices Easily maintained in India to reach competitive OPEX prices
27 Stricly Confidential What is Green Onshore Island?
X A RES: Renewable Energy Solution A primary renewable energy source (solar, wind, marine, biomass…) Hybridized with a green and efficient energy storage solution: hydrogen X Hydrogen storage: Water Electrolyser (transform electricity in pure hydrogen and oxygen) H2 and O2 gas storage (long term energy storage – size depending on MWh to be stored: primary RES profil vs user electricity consumption profile) Electricity and heat supplied with FC (reinject hydrogen energy stored in good quality and reliable electricity and heated 70°C water) X To cope with RES variation with time: Supply solar energy at night Supply a guaranteed amount of energy with wind turbines Store electricity at night to use it during the day when biomass is used X In some case: Supply clean and reliable back-up power solution without fuel supply chain
28 Stricly Confidential HYBRID CONVENTIONAL SOLUTION
LOAD
CONTROL WT
BATTERY
29 Stricly Confidential HYBRID HYDROGEN SOLUTION
CONTROL
FUEL CELL ELECTROLYSER
GAS STORAGE
30 Stricly Confidential Solar CSP product line
31 Stricly Confidential The solar CSP technology uses solar energy to produce electricity through steam generation
Heat Sunlight Heat transfer fluid Steam Power (oil, molten salts) Input for Lenses CCPP* Receiver / Steam and/or Collector Generator Reflectors Steam turbine
Heat storage, e.g. : • Pressurized steam
Solel’s UVAC 2008 receiver • Molten salts • Concrete (R&D)
Parabolic trough
Central tower
Siemens’s steam turbine for Ivanpah
Dish engine * CCPP : Combined Cycle Power Plant Andasol’s molten salts storage tanks
32 Stricly Confidential 2 A promising solar CSP market in both developed and developing countries
Most appropriate areas for Solar CSP X An emerging market with a > 50% annual growth rate: 400 MW sales for Solar CSP equipment in 2007 Over 1000 MW in construction in 2009 9000 MW sales expected by 2012
X Current market in developed and sunny countries encouraged by public aid California Spain
z E.g.: Tariffs of €270/MWh in Spain for 25 years Middle East
z E.g.: Masdar project in Abu Dhabi
X Further potential in.. Appropriate for solar Excellent(>2300 kWh/m²/year ) thermal power plants: .. Mediterranean countries through Very good(between 1900 and 2300 kWh/m²/year ) Mediterranean Solar Plan Good(between 1500 à 1900 kWh/m²/year ) .. Australia, Africa, India and China thanks Not appropriate(<1500 kWh/m²/year ) to significant cost decrease
33 Stricly Confidential 2 In the short-term, Spain and the USA are the 2 largest solar CSP markets
Global CSP project pipeline by country
% of global projected Growth, 2008-2012 installed capacity in 2012 (MW, CAGR)
US 40% +3200 MW (+70% CAGR)
Spain 42% +3800 MW (+200% CAGR)
34 Stricly Confidential 2 Strong business case for solar CSP as an opportunity to enhance AREVA RE technology portfolio
1. Solar CSP is close to AREVA’s know-how (thermal transfers, heat storage and steam management, etc.) 2. In the short-term, Solar CSP market is embryonic, but with development potential of over 9GW by 2012 within selected geographies (USA, South of Europe, Africa, India) 3. In the long-term, Solar CSP is a complementary baseload technology to nuclear 4. Existing proven technology with possible kWh cost reduction levers, most of which are accessible to AREVA 5. Developers/utilities are seeking solid EPC and equipment manufacturer partners 6. A market where AREVA can create value: commercial synergies and leverage of the Group expertise (R&D, technical, industrial, EPC, etc) 7. AREVA’s could be positioned as an EPC and manufacturer of key differentiating components
35 Stricly Confidential CSP India market - KSF
X Tariff and regulatory environment
Still being defined – important for regulators to understand specifics of CSP vs. PV
At 13-14 INRs/KWh, challenge to bring down costs
X Market opportunities (assuming appropriate tariff and regulatory environment)
30-50 MW “booster” plants (steam enhancement) – using existing coal facilities and infrastructure?
Utility rate power plant: 100- 250 MW in Rajasthan and Gujarat?
X Ability to source manufacture locally will be critical to reach target capex and opex
Equipment
EPC
O&M
36 Stricly Confidential