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Aurora Spring Forum 2018 Highlights #AuroraForum Aurora Spring Forum Highlights 2018
Dear Friends and Colleagues, It was my very great pleasure to welcome you to Oxford this year for our fourth Spring Forum. The event has grown more than tenfold since its beginnings in 2013, and I am delighted that our Forum is regarded so highly as the place where serious big energy issues are discussed. Your contributions to this year’s Forum focused on Navigating the Global Energy Transition were, as always, hugely appreciated.
We were honoured that the Rt.Hon Claire Perry, MP, greater ambition for the Forum this year. Our 2018 Title Minister of State for Energy and Clean Growth, was able Partnership with Barclays builds on many years of fruitful to take time out of her ministerial calendar to present the cooperation. Thank you also to Partners of the Spring keynote address about the Government’s Industrial Forum - Addleshaw, ING, Augusta, Matheson and PJT Strategy and forthcoming policy focus areas. Everyone at Partners. the Forum has a stake in this and the shape of future policy will of course affect all market participants. Finally, thank you to my own team at Aurora Energy Research for their diligence, commitment and adaptability We were also delighted to hear from Magnus Hall, CEO in staging the 2018 Forum. of Vattenfall, Alistair Philips-Davies of SSE and Rachel Reeves MP. Vattenfall’s news announced the day before We look forward to welcoming you again next year, when the Forum, about its first subsidy-free project was a real we will have new challenging topics to discuss as part of focus of interest for the room and struck a chord with the ongoing global transition. Aurora’s big focus this year on subsidy-free renewables. The subsidy-free revolution was the topic of Aurora’s keynote, a full copy of which is included in our Forum John Feddersen Highlights. Co-Founder and CEO The programme this year reflected the big seismic Aurora Energy Research changes we are experiencing globally in energy markets as part of the long-term transition to clean and smart energy generation. In addition to leading one of the panels, I was also privileged to listen to The programme this year many of the challenging and interesting debates. reflected the big As always, the level of debate was second to seismic changes we none. I would like to thank again are experiencing the many people who contributed to the success globally in energy of Aurora’s Spring Forum this year. Our speakers are markets as part of central to the day and we are hugely grateful for the long-term their friendship and support. Thank you for transition to your generosity of time, spirit and expertise! clean and smart Our generous sponsors are energy generation. due special appreciation, having supported us in our
#AuroraForum The year in review A look-back on noteworthy energy industry headlines in 2017
Global PV capacity additions, GW
Solar: +39% ¡¡ Capital cost declines continue to exceed expectations 99 ¡¡ Oct 2017: Record of $17.8/MWh set in Saudi Arabia 71 ¡¡ Sub $30/MWh now possible in many countries, undercutting thermal 48 ¡¡ Sep 2017: UK’s first subsidy-free solar farm opens ¡¡ Feb 2018: German PV auction clears at €43.3/MWh, 34% y-o-y decline 2015 2016 2017 Wind:
¡¡ Apr 2017: ‘zero-subsidy bids’ in German CfD auction ¡¡ Sep 2017: UK auction sees bids as low as £57/MWh, subsidy-free investment nearing ¡¡ Dec 2017: Netherlands hold first tender for zero-subsidy offshore wind ¡¡ Jan 2018: German Onshore auction clears at €47.3/ MWh
Power sector coal demand, 2010 Coal: Million tce 2020 2030 ¡¡ Jan 2017: China limiting build-out of coal plant fleet, cancelling 120 GW 1,444 1,473 ¡ ¡ 21 April 2017: first ever coal-free day in UK since 1880s 1,100 ¡¡ Nov 2017: 19 countries pledge to phase out coal power generation at Bonn climate talks ¡¡ Feb 2018: German government coalition includes coal exit in coalition treaty 37 4 0 81 79 37 UK Germany China
#AuroraForum Peak demand does not change if EV integration EVs: is smart: GB peak demand 2035, GW ¡¡ New models unveiled in 2017 include Tesla’s Model 3, Proterra’s electric bus, Daimler’s heavy-duty electric 47 truck
¡¡ China sets aggressive sales targets of 7m EVs by 2025 44 44 ¡¡ UK to ban internal combustion engine car sales by 2040 ¡¡ UK progress on charging infrastructure
No EV Dumb EV Smart EV
Source: Aurora Energy Research Battery storage:
¡¡ In the UK, 1 GW of batteries have been contracted via capacity market ¡¡ In Germany, 50 % of Frequency Containment Reserve will be covered by batteries by 2018 ¡¡ Tesla’s 100 MW battery in South Australia has been build in 100 days ¡¡ In the US, 0.4 GW have been deployed over the last two years
Flexible technologies:
#AuroraForum #AuroraForum Speaker and delegate feedback:
Tom Glover, Chief Commercial Officer, Tania Songini, NED Thrive Renewables plc, RWE Founder/Board Member Hawthorn Group‘ “Congratulations to Aurora for an ’An event that covered the key questions the excellent conference. I must say, it energy sector is facing in this transition phase. really is an excellent event for both I particularly appreciated Mateusz contribution sharing knowledge but also networking on subsidy free Renewables... really useful – thanks!” insight and food for thought’’
Dr Mark Jonathan Davies, Intertek Matthew Knight, Head of Business “I just wanted to thank you very much for Development, Siemens plc yesterday’s Aurora Spring Forum. I greatly “Nothing can match the drawing power of enjoyed the conference which I thought was @AuroraER, @DieterHelm and the beautiful excellent in all dimensions (speakers, venue, city of Oxford. Aurora’s spring conference content, discussion, organisation and sense of is becoming the Davos of the energy fun).” industry.” (Matthew Knight, Head of Business Development Siemens plc)
Twitter:
Andreas Loeschel @andreasloeschel Felix Chow-Kambitsch Emily Gosden @FelixChowK @emilygosden Happy to participate today in an outstanding @ AuroraER_Oxford Spring Forum on “Navigating the Mateusz Wronski from @AuroraER_Oxford: Over By 2025, both solar and onshore wind will be viable Global Energy Transition” #AuroraForum 60GW of subsidy-free renewables are expected in without any government subsidy, predicts
NW Europe by 2030 #AuroraForum @AuroraER_Oxford
Hanns Koenig @HannsKoenig
@VattenfallGroup CEO Magnus Hall at #AuroraForum: Matthew Knight Electrification is key, renewables becoming cheaper, but @SoutherlyBreeze appropriate risk sharing between govt and private James Murray @James_BG The return of the state? Implications of UK industrial sector need to be developed strategy #AuroraForum First offshore wind project to secure ‘subsidy free’ status is confirmed, as major @AuroraER_Oxford study details the huge changes subsidy free renewables
#AuroraForum Media takeaways:
The Guardian (20 March 2018) Subsidy-free renewable energy projects set to soar in The Times (21 March 2018) UK, analysts say Wind farms ‘on course to be free of subsidy’ “The UK is well on the way to a new era of subsidy-free “The plunging costs of the technologies [onshore wind and solar renewable energy projects that will largely kill off farms], which were reliant on very high subsidies just a few years ago, prospects for new gas power stations, according to could enable investors to build them without any government industry analysts. Mateusz Wronski, an analyst at Aurora, intervention by the early 2020s, said Aurora Energy Research. said: “The subsidy-free revolution is here and it’s big.”
BusinessGreen (20 March 2018) ‘The tip of a very large iceberg’: ‘Subsidy- free’ offshore wind contract awarded, as low cost renewables trend gathers pace Energyst (20 March 2018) “Aurora co-founder and CEO John Feddersen told the audience at its Scottish Power chief: You’re bonkers if you think we will annual forum this morning that “in terms of subsidy-free renewables, build offshore wind ‘subsidy-free’ we are at the tip of a very large iceberg”. The latest evidence from the Scottish Power chief executive Keith Anderson has Netherlands, not to mention the bold ambitions of the UK’s offshore questioned the apparent obsession with achieving wind industry and the changing strategies adopted by the world’s ‘subsidy-free’ renewables, warning it will not happen any largest energy firms, suggests he is almost certainly right.” time soon in the UK for technologies such as offshore wind. Anderson took part in a panel debate around ‘post- subsidy’ renewables at Aurora’s Spring Conference.
Recharge (21 March 2018) ‘No-subsidy renewables could be 60GW ‘game changer’: Aurora’ Subsidy-free renewables could balloon to a 60GW, €64bn ($78.6bn) investment opportunity across northwest Europe by 2030, according to latest analysis from Aurora Energy Research. The UK-based research group said the prospect of large-scale subsidy-free development had emerged rapidly, with implications beyond wind and solar as a “true game-changer” for the energy industry. Aurora released its analysis at its annual Spring Forum in Oxford, a day after Vattenfall secured up to 750MW of capacity following the world’s first zero-subsidy auction in the Netherlands. Platts (20 March 2018) Subsidy-free renewables ‘set to revolutionize NEW market’: Aurora “Subsidy-free renewables are already investible in many parts of Europe, and on the verge of breakthrough in Great Britain, Aurora Energy Research’s Mateusz Wronski said at Utility Week (22 March 2018) the annual forum in Oxford.” Britain on course for £20bn subsidy-free renewables ‘revolution’ Subsidy-free Contracts for Difference would be a “game- changer”, according to Mateus Wronski, Head of Product Development at Aurora, “providing a bridge before a deeper [power purchase agreement] market emerges.” He said they would be essential for offshore wind to achieve Aurora’s projections.
#AuroraForum #AuroraForum Aurora Keynote Presentation Renewables 2.0: The subsidy-free revolution
MATEUSZ WRONSKI Head of Product Development at Aurora Energy Research presented Aurora’s keynote speech on Renewables 2.0: The subsidy-free revolution.
The growth of subsidy-free renewables has profound As Mateusz explains, implications for the growth of the market and future policy development. Mateusz highlighted an investment opportunity in the region of €180 billion across North West Europe (GB, the nature of this investment is Germany, France, Ireland, the Netherlands and Belgium). fundamentally different too. It is “Back in 2010 at the start of the Electricity Market Reform merchant risk and hence investors process in GB, few would have imagined that by 2018 we have to understand their exposure would be talking about a subsidy-free future for renewables. “ Yet, this is where we have arrived, and our research highlights to power price, and to the complex clearly the enormous prize and potential in the market, not only in GB but across Europe. This will be a true game changer set of market drivers that shape the for the energy industry and policy makers, with a knock-on power price, including commodity effect on baseload technologies as well as flexible generation.” prices, but also deployment of RES The rise of subsidy-free renewables is a BIG deal for renewables investors with up to 18GW potentially by 2030 in and the amount of flexibility on the GB alone, and over 60GW across North-West Europe. system.”
#AuroraForum ” Aurora presentation: Renewables 2.0: The subsidy-free revolution
Subsidy-free RES – last 12 months
Capacity delivered Octopus Investments Offshore wind auctions Offshore wind auctions 64MW Vattenfall Orsted & EnBW 173MW 1380 MW 700MW
Hive Energy Renewables auctions Markbygden 46MW 3000 MW 650MW
April 2017 March 2018
Hive Energy Total/Reactive Technologies 350 MW 310MW
RES Anesco Whirlwind Power 140MW 10MW 10MW
Source: Aurora Energy Research
GB solar PV economics: 2010 – 2018
Present value of revenues and costs, Revenues Costs NPV 2010-2018 £/kW 356
25 -512 2,742
1,850 78%
-2,386 Revenues, Costs, NPV, Cost Revenue increase NPV, 2010 entry 2010 entry 2010 entry decrease 2018 entry
Source: Aurora Energy Research
#AuroraForum Aurora presentation: Renewables 2.0: The subsidy-free revolution
GB solar PV economics: 2018 – 2025
Present value of revenues and costs, De-risking Revenues Costs NPV 2018-2025 £/kW 7 140 35 344
-512 NPV Cost Revenue Cost of capital NPV, 2018 decrease increase (13%=>8%) 2025
Key drivers: • Global • Gas + CO2 • Understan- learning cost rise ding of risks curve • Higher LF • LT PPAs • Economies • Cannibalisa • Debt of scale -tion financing
Source: Aurora Energy Research
Subsidy-free viability, by technology
2020 2025 2030 2035 2040
Source: Aurora Energy Research
#AuroraForum Aurora presentation: Renewables 2.0: The subsidy-free revolution
Revenue stacking
Revenues of an offshore wind farm in 2035 for revenue-stacking model, GB £ per kW, 2016 real
Ancillary services Balancing Mechanism Capacity market Wholesale market Total
235 2
16 +9.3%
215 4 211 6
Wholesale-only Reduction to access Revenue stacking Additional Total revenue revenues in 2035 other markets wholesale revenues revenue streams2 stacking in 2035
Source: Aurora Energy Research
Size of the opportunity in North-West Europe
Additional renewables capacity since 2017, GW
Subsidy-free offshore Subsidy-free onshore Subsidy-free solar Subsidised renewables 166 13 22 37% 97 27 4 11 12 31 0 104 70 26 3 2 2020 2025 2030 Total capex spending on renewables since 2017 155 £bn 2016, cumulative 94 36% 56 Subsidy-free 35 21 99 Subsidised 4 73 31 2020 2025 2030
Source: Aurora Energy Research
#AuroraForum Aurora presentation: Renewables 2.0: The subsidy-free revolution
Impact on CCGTs
GB new-build CCGT, 2017-2030 GW -21 22
12
7
4 1
DECC 2012 projection Current pipeline BEIS 2017 Aurora no Aurora subsidy- of projects projection (gas) subsidy-free RES free RES
Source: Aurora Energy Research
Impact on flexible capacities
GB flexible capacity, Additional deployment from subsidy-free RES No subsidy-free RES GW
24 3
16 1
9 21 0 15
9
2020 2025 2030
Source: Aurora Energy Research
#AuroraForum Aurora presentation: Renewables 2.0: The subsidy-free revolution
Impact of type of renewables on type of flexible capacities
GB peaking and battery capacity in 2030, GW
Battery 6.4 5.3 7.9
12.5 Peaking 11.7 11.0
Base Cheaper wind Cheaper solar More expensive solar More expensive wind
Source: Aurora Energy Research
Impact on carbon intensity
GB system carbon intensity, Subsidy-free RES No subsidy-free RES gCO2e/kWh
160
140
120
100 -20 80 CCC’s recommended 2030 target 60
40
20
0 2018 2020 2022 2024 2026 2028 2030
Source: Aurora Energy Research
#AuroraForum Aurora presentation: Renewables 2.0: The subsidy-free revolution
Power price risks
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0 stor ca data 00 3 0 300 2 0 200 0 00 0 0 200 20 0 20 2020 202 2030 203 20 0
o rce rora nerg esearc
Capture price drivers
s categor escr t on m act on ons ore nd ca t re r ce 2030 ase
“Traditional” merchant o e and car on r ces 2
0 Cann a sat on g d o t
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#AuroraForum Aurora presentation: Renewables 2.0: The subsidy-free revolution
Role for policy
ir t de lo ment o id ree o hore ind nder alternati e olic cenario
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ll acce to a acit alancin and ncillar Markets (‘revenue stacking’)
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Key take-aways
u si ree rene a es are uick ec ing investi e creating a n invest ent rtunit in rt est ur e a ne
e a iti na rene a e ca acit e e it ut su si ies is aces ase a t er a generati n an sts rtunities r e i e assets
nvest ent in unsu isi ise re uires un erstan ing increasig c e erc ant risks establishing a credible „Worst Case” is vital in risk management
ng ter ic c arit ensuring eve a ing ie acr ss a arkets an su si ree s c u e ic ga e c angers r su si ree e ent
#AuroraForum #AuroraForum Aurora Conferences
Renewables Conference – London (June 2018) In 2018 Aurora Energy Research launched its new subscription service focused on renewables. This conference will bring together leading industry participants to look at the issues and opportunities for investors in the renewables sector.
3rd Battery Storage & Flexibility Conference – London (October 2018) Building on the success of previous Aurora battery conferences, we will host our third event in Autumn 2018. The event combines original analysis and forecasting with provocative insight and discussion from leading industry figures i n a fo c u s e d co nfe re n ce i n Lo n d o n .
5th Aurora Spring Forum – Oxford (March 2019) The Aurora Spring Forum is the leading private gathering of the global energy industry. It brings together industry leaders in an exclusive setting at the University of Oxford to engage on key issues impacting GB, European and global energy markets.
#AuroraForum Aurora Group Meetings 2018
GB Power Market Service
¡¡ 16 January ¡¡ 26 June
¡¡ 06 March ¡¡ 09 October
¡¡ 17 May ¡¡ 04 December
GB Distributed and Flexible Energy Service
¡¡ 17 April
¡¡ 11 September
GB Renewables Service
¡¡ 09 May
¡¡ 10 July
¡¡ October (TBC)
German Power Market Service
¡¡ 28 February ¡¡ 18 September
¡¡ 07 June ¡¡ 29 November
#AuroraForum Power Market Intelligence Services Market analysis and forecasts for all power market participants
Market Forecast Reports and Data ¡¡ Power market development until 2040 including prices, price shape, spreads, capacity and generation mix development, capacity market results, capture prices for all technologies ¡¡ Detailed review of policy and regulatory framework, including discussion of key policy uncertainties ¡¡ Forecasts are provided under three scenarios (central, low, high) plus sensitivities of key power price drivers and selected scenarios on key policy uncertainties ¡¡ Highly granular description of underlying assumptions and unrivalled level of transparency ¡¡ Additionally, provision of all underlying data in Excel
Group Meetings and Strategic Insight Reports ¡¡ Regular in-depth analysis to provide unrivalled insight on critical topics for the power industry Planned Strategic Insight topics for 2018 include: »» The E-mobility revolution: impact of electric vehicles on the GB/German power system, and emerging utility business models »» Lessons learned from the fourth capacity market auction »» Connecting the dots: power market outlook for Benelux and France and implications for interconnection »» Gas & storage: what’s the value of long-term flexibility? »» Alternative designs for markets with high renewables penetration: thinking beyond the merit order »» Renewable and flexible heat: power market impact and new investments opportunities ¡¡ We present and discuss these topics in our regular Group Meetings and publish our insights in Strategic Insight Reports
Extensive interaction with the Aurora team
¡¡ Bilateral workshops with senior members and subject experts of Aurora’s team to discuss Aurora’s analyses and views on the market ¡¡ Our analysts will provide support at short-notice on questions arising from our research
#AuroraForum Power Market Intelligence Services Market analysis and forecasts for all power market participants
Aurora offers power market forecasts and market intelligence spanning Europea’s key markets
Comprehensive Power Power Market Forecast Bespoke forecasts Market Services Reports
¡¡ Power market forecast reports ¡¡ Power market forecast reports ¡¡ Aurora can provide power market forecasts upon request ¡¡ Forecast data in Excel ¡¡ Forecast data in Excel ¡¡ Global energy market forecast ¡¡ Global energy market forecast reports reports ¡¡ Strategic insight reports ¡¡ Analyst support ¡¡ Group meetings ¡¡ Bilateral workshops ¡¡ Analyst support
#AuroraForum Distributed and Flexible Energy Service Market forecasts for batteries, peakers and DSR in the GB market
Flexible technologies will be a key part of the future power
To t al change Aurora can provide answers to your most pressing questions GB Capacity, GW 2015- ¡ 2040 ¡ What investment returns are available for batteries, demand side 140 126 131 117 response (DSR) and peakers? 120 112 -51% 94 98 ¡¡ What value should I anticipate from the underlying revenue 100 streams (energy, balancing, capacity, embedded benefits, ancillary 80 60 +122% services) over the long term? 40 20 ¡¡ What risks are there, and to what extent might they affect my +382% investment case? (e.g. technological breakthrough, nuclear 0 2015 2020 2025 2030 2035 2040 cancellation)
¡¡ Is my investment financeable? How would an equity or debt Baseload Renewables Fle x ible ca pa city investor value my project? Embedded CHP Other renewables Pumped Storage Co al S o lar OCG T ¡¡ How big is the market opportunity, and where are investment CCG T Wind onshore Recip. engines funds going to flow? N u cle ar Wind offshore Battery storage DSR Interconnectors
What does our subscription service include?
¡¡ Revenue forecasts for the wholesale market, balancing mechanism, capacity market, ancillary services (EFR, FFR, STOR, Fast Reserve) and embedded benefits (GDUoS, BSUoS and Triads) until 2040 ¡¡ Revenue stacking and investment case analysis for batteries, peakers and DSR under various business models (e.g. batteries performing arbitrage) ¡¡ In-depth outlook of policy and regulatory frameworks ¡¡ Technology outlook including cost and performance projections ¡¡ Scenario analysis which is updated regularly to include significant market
uncertainties 1 FFR focused business model
AER Template 2016a Batteries are already making a mark in the FFR market, with over 150MW of battery/hybrid capacity secured
Dynamic FFR volume Unknown DSR Battery ¡¡ Highly granular forecasts and investment case data in Excel MW Pumped Storage CCGT Battery-diesel hybrid Historic 700 Forward procured volumes1 . FFR contracts 600 of up to 24 months have already been 500 awarded to ¡¡ Monthly summaries of the FFR auctions and balancing mechanism batteries 400 . Opportunities for new 300 contracts arise when large existing 200 contracts expire ¡ (e.g. CCGT and ¡ Frequent interactions with Aurora team via subscriber group meetings, pumped 100 storage) 0 Jun- Aug- Oct- Dec- Feb- Apr- Jun- Aug- Oct- Dec- Feb- Apr- Jun- Aug- Oct- Dec- bilateral workshops and ongoing analyst support 17 17 17 17 18 18 18 18 18 18 19 19 19 19 19 19 Delivery month
1. FFR contracts already accepted as of September 2017 Note: Updates of this chart are included in Aurora’s Distributed and Flexible Energy Service in the Monthly Market Summary reports
Sources: National Grid CONFIDENTIAL: NOT FOR FURTHER DISTRIBUTION 19
Forecasts are bankable and have been used in many transactions and for securing financing
#AuroraForum GB Renewables Service Market analysis and forecasts for offshore, onshore and solar
As subsidies are reduced, renewable investments are increasingly exposed to merchant risk GB renewable capacity Aurora answers your most pressing questions potential GW, estimated ¡¡ What prices will wind and solar assets capture? 69 ¡¡ What are the key technology, market and policy risks? 52 ¡¡ How do batteries, EVs, I/Cs and DSR alleviate cannibalisation? 37 ¡¡ What price curves should be used for debt financing, and how low can capture prices go if key risks materialise? ¡¡ What is the investment opportunity in subsidy-free RES? ¡¡ Which business models become investible first? When? ¡¡ How will subsidy-free affect margins of ROC assets? 2020 2025 2030 ¡¡ How much value can subsidy-free projects derive from ancillary, balancing and EFC capacity markets? Subsidy-free offshore ¡¡ How much debt can merchant projects sustain? Subsidy-free onshore Subsidy-free solar ¡¡ How will the corporate PPA and utility PPA markets be? Subsidised renewables ¡¡ What are the opportunities for pairing with batteries?
What does our subscription service include?
¡¡ GB Renewable Forecast Reports – published and updated twice a year plus data in Excel »» Forecasts of capture prices until 2040, and other revenue streams (ROC, EFC capacity, balancing, ancillary services) and imbalance costs »» Regional capture prices, high and low scenarios (P90 and P10), ready to use in asset valuations and for financing cases »» Detailed investment case data for subsidy-free business models for offshore, onshore and solar, including pairing with batteries »» Supply curves and expected prices for future CfD rounds ¡¡ Strategic Insight Reports and Group Meetings to address the most pressing issues facing the renewables industry, e.g. »» How low can capture prices go? Understanding merchant risks in subsidy- M o tiv a tio nfo r th en e wse rv ice F o rw i n da , c c e s st oa lt e r n a t i v er e v e n u es t r e a mm s a y becomecritical in makingup for cannibalisation free world R e v e n u efo o r ffsh o rew in d2 0 1 7to 2 S 0 u 3 b 0 sid ie s A n cillary BM CM EM Illu stra tiv e
Motivation for the new service For wind, access to alternative revenue streams may »» EFC Capacity Markets – prospects for additional revenue for renewables become critical in making up for cannibalisation Revenue for offshore wind 2017 to 2030 Subsidies Ancillary BM CM EM Illustrative
Under2017 L o ss o f B ase ol ad L o ss d u e toW in d C ap ytaci W in d B anal nci g A n cillary O ffsh o re C fD su b sid ie s p rice w in d cap ut er M kar e t cu elaitr d Mechanism se rv ice s w in d rranrar g e m e n t can n bi oisatal n 1 p rice revenue2 tocap tu re revenue4 revenue4 revenue ¡ etal nr viat e 2030 ¡ Frequent interactions with Aurora team via bilateral workshops and ongoing revenue trerst am s 3
1A . ssu m e s1 6 G Wo o f ffsh o rean d1 3 G Wo o f n sh o-u re pb o y n20 cap 3 tusu 0. re pp p ricesu ort n , b o sidsub t ie m ase asacts e lo a sw adderated to in2 . p dA . isat s er viatl e yl -level h gi h to secure C ap ytaci M kar e cot n- actrt 3 0 e( % g. 3 ). ,. A . 2 ssu 0 m ew s in de ith eh r to as e ith eram r pd o w nmeeto u tp obligations uo t ru r nb at in e Balancing lo wfu cap ll Mechanism acityto and ancillary service m ark e ts (e .gS ., T O Ro fre r q u-le e v n e cy lere stim sp atio o n nse s 4 ) bH . ase ig d h o n in itialco m p ariso n to trial stu d ie s analyst support 12 S o u rceA : u roE ra n e rg yR e se archIE , E EE , C O F YSS tud(2 y 0 1 4)
Under 2017 Loss of Baseload Loss due to Wind Capacity Wind Balancing Ancillary Offshore CfD subsidies price wind capture Market curtailed Mechanism services wind arrangement cannibalisation1 price revenue2 to capture revenue4 revenue4 revenue alternative 2030 revenue streams3
1. Assumes 16GW of offshore and 13GW of onshore by 2030. support subsidies act as a top-up on capture price, not baseload. 2. Assumes wind is derated at relatively high-level to secure Capacity Market contract (e.g., 20-30%). 3. Assumes wind either has to either ramp down output or run at below full capacity to meet obligations in Balancing Mechanism and ancillary service markets (e.g., STOR or frequency response) 4. High-level estimations based on initial comparison to trial studies All intelligence to build a successful subsidy-free Source: Aurora Energy Research, IEEE, ECOFYS Study (2014) 12 renewable business based on bankable price forecasts
#AuroraForum Bespoke Project Work Aurora supports some of the biggest energy companies
Multi-client study for 15 major power market participants across utilities, developers, finance and government to evaluate the potential for investment in flexible electricity capacity and policy implications
Impact assessment of gas consumption in China on global gas markets and asset valuation for major global gas player
Analysis of intermittency and the cost of integrating solar in the GB power market – modelling the full system costs of increasing solar penetration
Assessment of the various scenarios of the German coal phase-out under the new Government as well as plant-by-plant evaluation of the implications of the BREF standards
Aurora’s modelling underpinned the BP Energy Outlook 2016, 2017 and 2018 scenarios, including understanding the increasing Electric Vehicle penetration on global energy balances
Analysis of full system costs under various renewables pathways for decarbonisation of the UK, which will be used in the National Infrastructure Commission’s assessment for Parliament
Analysis of power system development in Morocco and Oman (markets with a very high share of renewables) for a large multi-national energy company
Multi-client study of the ‘New Economics of Offshore Wind’, involving GB Government and wind industry participants. Study focused on policy mechanisms likely to drive major growth of offshore wind
#AuroraForum Transaction Support Work Aurora is a leading commercial advisor for power and gas transactions
Gas peaker and battery storage portfolios, sell side advisory and debt raise for Flexible two of the largest transactions in the UK generation Battery storage, sell side advisory of the largest operational battery storage portfolio in Europe
Pumped Hydro, multiple buy side valuations including First Hydro
Battery project, successful debt and equity raise
Renewable Onshore wind, sell side market advisor for 400MW subsidy free project generation Borssele 3&4 offshore wind farm, buy side advisory
Race Bank offshore wind farm, buy side for successful bidder
Biomass plants, buy side advisor for Foresight Group for the acquisition of biomass portfolio
Thermal CCGT, sell side advisory for a large European utility generation EEW Energy From Waste (>Eur1bn), buy side advisory for Beijing Enterprise Holding
Energy from waste, buy side for Cory Riverside
Stake in Uniper, buy side advisory for a large hedge fund during the IPO process
UK National Grid distribution network (>£8bn), buy side advisor for successful Gas bidder consortia midstream TransitGas pipeline, buy side advisor for infrastructure fund
Gas Connect Austria, buy side advisor for large infrastructure fund
North-Sea gas upstream asset (>€4bn), commercial buy side advisor for successful bidder
#AuroraForum 2018 Title Partner 2018 Title Partner
Leadership in Strategic Advice and Financing for Power, Utilities and Infrastructure
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and launched a Public Takeover Offer for all shares, implying an Equity Value of EV of €8.05 billion €727 billion Lead M&A Advisor and Sole Debt Underwriter Financial Advisor to 2i Rete Gas Pending October 2017
has agreed to acquire €350 million a 50% stake in Senior Secured 8-year Notes
€225 million Senior Secured 7-year Notes Joint Global Coordinator and Bookrunner Financial Advisor to Eneco September 2017 May 2017
Sale of 61% stake in its Agreed to Merge via a gas distribution network to a Non-Proportional Spin-Off consortium of infrastructure investors
Corporate Broker and Advisor to National Grid Financial Advisor to Enel Green Power March 2017 November 2015
#AuroraForum 2018 Partners
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In addition to basic banking help lead the global transition services like lending, payments to a low-carbon, climate- and cash management and resilient economy. treasury, we provide tailored banking solutions in areas As a financial institution, ING Wholesale Banking (WB) including corporate and we can play a role in enabling meets all banking needs of large structured finance, leasing, and this transition by financing corporations, multinationals equity and debt capital markets. change, sharing knowledge and financial institutions. In short, we can finance your and using our influence. We are a truly international growth, manage your day-to- Being sustainable is not just team of more than 15,000 day banking needs and provide about reducing our own impact, banking professionals with you with a full range of banking it’s in all the choices we make— local knowledge and a presence solutions to help you achieve as a lender, as an investor and in 40 countries. your business goals. through the services we offer our customers. That’s why Ingwb.com We believe in taking the long sustainability is inherent to our view and in going beyond just purpose of empowering people mitigating harm—we want to to stay a step ahead in life and drive sustainable progress and in business.
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