Introduction of BayWa
Case study: a utility-scale subsidy-free plant in Spain 1 Largest German Market leader in Agricultural Company Smart Farming Listed on German Stock Exchange Turnover 2017
1960 2018 €17 billion Cooperative EBIT 2017 of bavarian farmers 1947 €171.3 million Employees
17,550 1930 Locations
More than 3,000 founded in locations in 40 countries
1923 2 Agriculture Energy Construction Materials
Trade agric. Productivity Fruit Classical Energy BayWa r.e. goods renewable energy
Digital Machinery Wind Solar Solar Energy Services Farming Trade Projects Projects Trade Solutions (O&M)
Case study: a utility-scale subsidy-free plant in Spain 3 BayWa r.e. in figures – dynamic growth and sustainable profitability
Turnover 2017 EBIT 2017 Employees
€ 1,366.7 million Euro € 66.6 million Euro 1,400
Founded Experience Service
2009 > 2,500 MW > 5,000 MW Gathering our combined Development and construction of Wind and Solar assets market experience under the of projects in the area of solar, under management BayWa r.e. umbrella wind power, bioenergy and geothermal energy
BayWa r.e. Company presentation 4 BayWa r.e. worldwide
H
BayWa r.e. location
Active in the market
Wind power projects and services
PV projects and services
Trading in solar components
Bioenergy
Geothermal energy (Germany only)
H Energy trading
BayWa r.e. Company presentation 6 Solarpark ohne staatliche Förderung
Was wir von Spanien lernen können
Dr. Benedikt Ortmann CEO Solar Projects Grid Parity is happening
The 175 MWp Don Rodrigo plant
Case study: a utility-scale subsidy-free plant in Spain 8 Don Rodrigo Project Overview
Sevilla Andalucía, Spain
. Capacity: 175 MWp
. Largest merchant project in Europe
. connection directly to REE’s substation at 220kV
. First utility project in Spain with a long term PPA of 15 years
. Completely without any subsidies or any other support mechanism
. Provides a 6.5% IRR (unlevered), resp. a 8.5% IRR (levered)
Case study: a utility-scale subsidy-free plant in Spain 9 Area without subtitle Area with subtitle
Source
BayWa r.e. Roadmap 2022 10 2020 : 20 “in 2020 panel prices will go below 20 Cent/Wp”
US$/Wp 1,80
1,60
1,40
1,20
1,00
0,80 Hier Grafik einfügen über Preisentwicklung Module
0,60
0,40
January 1st 2020 0,20
0,00 04.09.2009 09.10.2010 13.11.2011 17.12.2012 21.01.2014 25.02.2015 31.03.2016 05.05.2017 09.06.2018 14.07.2019 17.08.2020 21.09.2021
China poly Index Interpolation
Source: pvinsights weekly module price index Case study: a utility-scale subsidy-free plant in Spain 11 The panel remains at ~50% of construction costs - Comparison of the CAPEX Split for a PV installation -
US-$ 4,00 per Wp [ZELLBEREICH] 3,50 [ZELLBEREICH]
3,00
2,50 [ZELLBEREICH] Labour BOS 2,00 hardware BOS [ZELLBEREICH] 1,50 [ZELLBEREICH] Inverter [ZELLBEREICH] Module [ZELLBEREICH] [ZELLBEREICH] 1,00 [ZELLBEREICH] [ZELLBEREICH] [ZELLBEREICH] 0,50 [ZELLBEREICH] [ZELLBEREICH][ZELLBEREICH] [ZELLBEREICH] [ZELLBEREICH] [ZELLBEREICH][ZELLBEREICH] 0,00 2010 2011 2012 2013 2014 2015 2016 2017 2018*
phase of panel shortage
Source: NREL (utility-scale PV system costs benchmark summary (inflation adjusted), 2010-2017 2018*: data base BayWa
Case study: a utility-scale subsidy-free plant in Spain 12 LCOELCOE development development Don Don Rodrigo Rodrigo € / MWh - real money 2019 (no inflation) - 100,0
scenario: high 90,0
80,0
70,0 scenario: central Power price forecast Spain 2018-2048 - generation weighted, real money 2019 - 60,0 scenario: low
50,0
42,6 42,4 42,1 41,8 41,7 41,4 41,1 42,0 41,9 41,4 42,1 41,4 41,1 40,5 39,9 40,0 Annualannual CostLCOE Of Electricity (ACOE)
30,0 depreciation Average LCOE 25 €/MWh
20,0
11,8 8,6 8,3 10,0 interests 8,1 8,1 8,1 8,0 7,9 7,9 7,9 7,9 7,9 7,9 7,9 7,9
operation & maintenance cost 0,0 op. year: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 13 Grid Parity will spread over Europe
Helsinki 2029 Study by the Bequerel Institute, Brussels
Aberdeen Calculation basis: 2021 Gdansk . the expected price developments of whole 2022 Amsterdam sale electricity in each country Brighton 2021 2018 Oldenburg . the solar irradiation map 2020 Krakow Lille Konstanz 2022 . expected price developments in EPC and 2019 2019 Innsbruck Miskolz 2018 2019 material costs for photovoltaic Zürich Graz Baia Mare 2019 2019 2020 Bolzano Bilbao 2020 2019 Constanta It does not contain: 2019 Marseille . grid connection costs 2017 Thessaloniki . possible differences in land and 2019
development costs Intensity Irradiation Cadiz Ragusa 2017 2017 Chania 2018
Case study: a utility-scale subsidy-free plant in Spain 14
Structural composition of the 15-years PPA at the Don Rodrigo plant
Case study: a utility-scale subsidy-free plant in Spain 16 Main structural components of the Don Rodrigo PPA
Secure the offtake of the electricity Maximize the term of the offtake Have a fixed price period in the generated agreement beginning
The more of the generated power is taken The duration of the PPA term determines the A fixed price period secures cash flows in the off, the better possible duration of the long term debt beginning of the investment, which makes the
business case more robust At Don Rodrigo all electricity produced is being sold via the PPA, no physical limit At Don Rodrigo the PPA term is 15 years, the project finance can go up to 18 years At Don Rodrigo the first 5 years come with a fixed price (lower than today‘s 5-y-future), after The fixed and the floor price provide enough that it will have a (very low) floor price cash for the „banking case“
17 Main structural components of the Don Rodrigo PPA
Switch to a floor price scheme later Choose experienced and bankable counterparts
Having a flexible pricing lateron helps the counterparties: • The bankability of the PPA is linked to the insolvency risk of the offtaker • The offtaker is secured against falling prices over time and can therefore offer a longer term, has to • For production underruns the producer has to provide offer a floor though guarantees, so that the offtaker may buy missing production on the spot market (at a presumably higher price) • The producer is secured against the worst case through a floor price provided by the offtaker
• If prices rise, both profit, as the producer receives higher revenues and the offtaker still receives a discount off the recent power price index
18 Was wir von Spanien lernen können
• Möglichst wenig im Marktgeschehen herumpfuschen • Flächen, Flächen, Flächen! • Investoren haben der spanischen Förderung nicht vertraut – • Es war einfach, die Flächen zu entwickeln vertrauen aber dem freien Markt • Andalusien hat über 100 neue Beamte eingestellt, um den • Im Bemühen, es für die Solarindustrie besonders gut zu machen, Genehmigungsprozess weiter zu beschleunigen wird mit ständigen Veränderungen in der Förderung eher • Allein um Sevilla sind weitere 1 GW in Entwicklung – wo finden Verunsicherung der Markteilnehmer geschaffen wir so etwas in Deutschland? • Ständige regulatorische Eingriffe erschweren zudem die Anstatt Förderung auf der Absatzseite brauchen wir Hilfe auf der Projektplanung Seite der Flächenbereitstellung und –entwicklung • Die Bepreisung von CO2 ist sinnvoll, aber auch hier ist Vertrauen „Grid Parity“ können wir auch in Deutschland im verloren gegangen Kraftwerksbereich sehr schnell erreichen, brauchen dafür aber Die Absicherung langfristiger PPAs über Floorpreise hat sich als große Flächen sinnvolles Instrument erwiesen Dafür werden weltweit zunehmend Flächen wie Netzzugang und Einspeisevorrang sind wichtige Privilegien Gewässer Die Bepreisung von CO2 Zertifikaten ist richtig, muss aber stabil Landwirtschaftliche Kulturen & Gewächshäuser und berechenbar werden Konversions- Bergbau- Militärflächen usw. verwendet
Case study: a utility-scale subsidy-free plant in Spain 19 Dr. Benedikt Ortmann BayWa r.e. Solar Projects Arabellastraße 4, München