MARKET ANALYSIS FOR PE/VC NEW SOURCES OF ENERGY: the commercial viability of clean energy sources 2020 What’s in this report: This sample report was designed to help a hypothetical Thanks for downloading this PE/VC client interested in entering the energy market. sample secondary research report. The client required data and analysis to understand: All of our sample reports are created to give you a taste for the level of • Anticipated changes in sources of • Key players –- private and clean energy government --investing in new insights and quality of output our energy clients receive when they engage us • Barriers to entry and commercial viability • KPI comparison of fusion energy to answer their strategic questions. versus other resources Have a look at other types of research and support we cover: Buyer Screening Risk Assessment Company Profiles Joint Value Proposition Financial Modeling &Valuation Future Casting Identifying future Unicorns Market Trends Competitive Benchmarking Addressable Market Potential Pain Points Assessment Product Battlecards Go-To-Market Strategy Product Gap Analysis Partner Benchmarking Data Synthesis Value Chain Analysis Dashboarding Churn Analysis Account Propensity In-Depth Interviews Strategic Sale Assessment RESEARCH OBJECTIVE RESEARCH QUESTIONS To provide a comprehensive view on What are the transformational sources for clean energy sources to estimate the clean energy? commercial viability of nuclear fusion as a source of energy generation Explain feasibility of Fusion and how viable it is (any estimate to commercialization) What are the issues related to scalability for GEOGRAPHIC SCOPE fusion? Any table comparing key metrics (production, GLOBAL cost etc.) of fusion vs other forms 3 © 2020 Grail Insights Key Findings Nuclear is one of the prime non-renewable source of energy that contributes to 10.2% of the world's electricity, which is generated by about 441 nuclear power reactors. About 53 more reactors are under construction, equivalent to approximately 15% of the existing capacity Several government entities and private companies are investing significantly in the Nuclear Fusion technology as a viable source of energy in the future. The biggest project is ITER*, which is expected to start its fusion generation operations by 2035 China is moving swiftly, compared to other countries and is expected to develop its first commercial scale demo nuclear fusion plant by 2030. Several other regions, including the US, South Korea, and EU, are looking forward to develop commercial scale fusion power demo reactor by ~2050 Apart from the government projects, several private companies and investors including, Lockheed Martin, General Atomics, Bezos Expeditions, Breakthrough Energy Ventures, are also investing their resources into fusion power technologies Start-ups, such as General Fusion, Commonwealth Fusion Systems and TAE Technologies, have received substantial funding (~USD 1 Bn combined till date) from prominent venture capitals. Certain start-ups including General Fusion and Tokamak Energy are planning to develop their first commercial plant by 2030 In terms of external costs, Fusion energy, with an average cost of 1 USD/MWh, is the most economical. However, the initial capital investment is high with Fusion power plant, compared to other forms of energy 4 Notes: *ITER (International Thermonuclear Experimental Reactor) is an international nuclear fusion research and engineering megaproject in France © 2020 Grail Insights Contents Market Overview Industry Outlook Commercial Viability Investment Outlook & Key Players KPI Comparison Non-Exhaustive Market Overview – Energy Sources Modern Renewables and Nuclear Energy are the prime sources of clean energy and electricity in the global market TRADITIONAL SOURCES CLEAN AND NEW SOURCES OF ENERGY TRADITIONAL BIOFUEL EXISTING Hydropower, solar, wind and nuclear fission Wood fuels, agricultural by-products and dung EMERGING FOSSIL FUELS Geo-thermal, Modern bio-fuel, Hydrogen Fuel Cell FUTURISTIC Coal, crude oil, and natural gas Nuclear Fusion 6 Source: REN21; Energy.gov © 2020 Grail Insights Non-Exhaustive Market Overview of Clean Energy Low-carbon clean energy made up 20.5% of global primary energy consumption in 2019, of which nuclear energy accounted for ~4.5% and is projected to remain a mainstream source of electricity generation CLEAN ENERGY MARKET SHARE Low-carbon clean energy has been established globally as a mainstream source of electricity generation Low carbon clean energy accounted for 20.5% of global primary energy consumption in 2019 and is expected to increase to 26.3% by 2030. Most of the increase will likely come from traditional renewable sources such as solar, wind, and hydropower However, Nuclear energy had a relatively low share of 4.5% in 2019; advancements in technologies in nuclear sources, including Plasma and Fusion nuclear reactors, are providing opportunities to scale up the nuclear energy share in the coming future Renewable Share of Total Final Energy Consumption, Global Primary Energy Consumption By Energy Source, 2019*(e) Projection Nuclear Energy 4.5% Renewable energy 16.0% 21.7% (excluding biofuels) 79.5% Wind 4.5% Fossil Fuels Modern Renewables 4.6% Nuclear 25.2% 22.1% 3.0% 1.4% Solar Coal 22.2% 21.8% 16.0% 10% Natural gas Hydropower 32.1% 29.9% Petroleum and other 1.5% liquids (including biofuels) Geothermal Heat/ other 2019 2030 renewable 7 Note: *Forecasted figures, BP Energy market review Source: eia.gov; Our World In Data; BP © 2020 Grail Insights Non-Exhaustive Market Overview of Nuclear Power in Electricity Generation Around 10.2% of the world's electricity is generated by about 441 nuclear power reactors. About 53 more reactors are under construction, which will be equivalent to approximately 15% of the existing capacity GLOBAL NUCLEAR POWER STATUS (2020) Currently Operating 2nd Largest source of global low Under Construction carbon electricity Number of 441 Reactors 53 ~10.2% Global share of nuclear electricity production REGIONAL DISTRIBUTION OF NUCLEAR POWER CAPACITY 389,979 MWe Total net installed Africa In MWe capacity Latin America North America 18 Out of 53 under construction Asia nuclear reactors are in China and Europe 0 50,000 100,000 150,000 200,000 India Operational Under Construction 8 Source: IAEA, World Economic Forum, BP © 2020 Grail Insights Non-Exhaustive Nuclear Power Production Projections Analysts predict that the nuclear power production share is expected to increase from 10.2% in 2018 to 11.7% by the end of 2050, in an optimistic scenario NUCLEAR ENERGY MARKET GROWTH World Nuclear Electricity Production (Forecast) Total global electricity production is expected to rise by 33% over 2030 and 94% by 2050, at an annual growth rate 5,761 4,977 of ~ 2.1% The world nuclear electrical generating capacity is 3,844 projected to increase to 3,844 TW-h by 2030 and to 5,761 2,990 Low 2,563 2,836 2,804 TW-h by 2050 in the high case High – This represents a 49% increase over current levels by Capacity (TW·h)Capacity 2030 and an ~124% increase in capacity by 2050 – In 2018, electricity generation from operational 2018 2030 2040 2050 nuclear reactors increased about 2.4%, reaching 2563 WORLD TOTAL AND NUCLEAR ELECTRICAL PRODUCTION TW∙h Electrical 2030 2040 2050 The share of nuclear electricity in total electricity 2018 Capacity Low High Low High Low High production in the world is expected to increase to 11.5% in 2030 and to 11.7% in 2050, in the optimistic scenario Total (TW·h) 25,196 33,538 41,101 49,032 The global nuclear electric power generation market is Nuclear (TW·h) 2,563 2,836 3,844 2,804 4,977 2,990 5,761 estimated to reach USD 156.2 Bn by 2023 from USD 129.8 % of total 10.2% 8.5% 11.5% 6.8% 12.1% 6.1% 11.7% Bn in 2018 at a CAGR of 3.8% during 2018-2023 Notes: Projections of nuclear power are presented as low and high estimates encompassing the uncertainties inherent in projecting trends. The low case was explicitly designed to produce a ‘conservative but plausible’ set of projections assuming that current market, technology and regulation trends continue to be the same. The high case projections are 9 ambitious but are still plausible and technically feasible. Source: IAEA, BCC Research © 2020 Grail Insights Contents Market Overview Industry Outlook Commercial Viability Investment Outlook & Key Players KPI Comparison Nuclear Fusion in Electricity Generation Non-Exhaustive The current nuclear power reactors are primarily based on the Nuclear Fission technology; Scientists around the world are increasingly working on developing ‘Nuclear Fusion’ technology as a viable and scalable source of energy in the future NUCLEAR FUSION AS A SOURCE OF ENERGY While the existing plants rely on nuclear fission; the high level of radioactive waste as a by-product has restricted its scaled growth Scientists are currently working on nuclear fusion to develop nuclear power to solve the challenge of radioactive waste – Nuclear fusion is potentially offering an inexhaustible supply of zero-carbon energy and has been successfully tested at a small-scale; however, it is yet to be tested at a commercial scale PROMINENT REACTOR CONCEPTS TOKAMAK REACTORS STELLARATOR Separate groups of scientists in Germany and China have recently Stellarator is another plasma device that relies primarily on announced breakthroughs in nuclear fusion using tokamak reactors external magnets to confine a plasma. – Tokamak reactors use a doughnut-shaped ring to house heavy and super- Stellarator produces high-density plasma