Opportunities for Investment in

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					               Opportunities for Investment in
                     Renewable Power
                        Bradford T. Nordholm
                    Starwood Energy Group Global




“What’s the Deal?” X
October 14th 2009
 Even in Challenging Times Electricity Demand Will
 Continue to Grow

                                            Residential, Commercial and Industrial Energy Consumption by Energy Source

                                                 Electricity                 Natural Gas                   Liquids                               Coal
       Energy Source (quad. Btu)




                                   20.0                                               17.1
                                                               15.7   16.0     16.5
                                   15.0   12.8     13.6
                                                                                                  11.7
                                                                                                            10.7      9.7
                                   10.0

                                    5.0                                                                                                 1.8      2.0    2.2

                                    -
                                          2007     2015    2030       2007     2015   2030        2007     2015      2030              2007     2015    2030

     • Electricity projected to be the fastest growing source of energy for residential, commercial and
       industrial end-users
     • Electricity demand growth driven by:
         ─ Increasing use of electrical and electronic equipment in households and businesses
         ─ Increasing demand for air-conditioning
         ─ Increasing use of electric motors in industrial production
     • Wide-spread adoption of plug-in hybrid vehicles could increase electricity demand by an incremental
       1.2% by 2020 and 2.7% by 2030 over currently projected demand 1
        ― Implies new generation will have to be ~15% higher than currently anticipated
Source: U.S. Department of Energy, Annual Energy Outlook 2009. 2015 value for coal extrapolated
1 Analysis conducted by Oak Ridge National Laboratory using the U.S. Department of Energy’s Annual Energy Outlook 2007 forecast as the reference case




      2                            STARWOOD ENERGY GROUP GLOBAL, LLC
Generation and Transmission Capacity Will Need to
be Added but ‘Planned’ Lags ‘Demand’

           Generation: Planned Additions by Type (MW)                                                                                 Transmission: Total Planned Additions

                                                                                                                                   190,000

                                                                                                                                   185,000




                                                                                                        Capacity (Miles) > 200kV
                                                                                                          Total Transmission
50,000                                                                                                                             180,000
45,000
40,000                                                                                                                             175,000
35,000
30,000                                                                                                                             170,000
25,000
20,000                                                                                                                             165,000
15,000
10,000                                                                                                                             160,000
 5,000
   -                                                                                                                               155,000
             2008                 2009                2010                 2011                 2012
                                                                                                                                   150,000
                    Natural Gas   Wind   Coal   Solar Thermal and Photovoltaic    Nuclear   Other                                             2007      2008-2012    2013-2017    2017 Total
                                                                                                                                             Existing    Additions    Additions    Projection

Source:    U.S. Department of Energy, Annual Energy Outlook 2009                                       Source: National Energy Reliability Council


Transmission additions, in particular, are critical to Connecticut reliability:
                         1. New England East-West Solution (NEEWS)
                         2. Southwest Connecticut Reliability Project (Bethel to Norwalk; Norwalk to Middletown)
                         3. LI Replacement Cable (Norwalk, CT - Northport, NY)
                         4. Glenbrook Cables (Stamford, Darien and Norwalk)



       3     STARWOOD ENERGY GROUP GLOBAL, LLC
Real Story is that 250 GW (>$1 Trillion) of New
Renewable Capacity Needed to Meet RPS Goals
                                                                           State           Target   Year
  Aggregated State RPS implies ~17% renewables nationally                 Arizona           15%     2025
                                                                         Califonia          33%     2020
  Proposed Federal RPS of 25% by 2025 would further increase the         Colorado           20%     2020
                                                                       Connecticut          27%     2020
  required investment                                              District of Columbia     20%     2020
                                                                         Delaware           20%     2019
                                                                          Florida           20%     2020
                                                                          Hawaii            20%     2020
                                                                            Iowa          105 MW    1999
                                                                          Illinois          25%     2025
                                                                     Massachusetts          15%     2020
                                                                         Maryland           20%     2022
                                                                          Maine             40%     2017
                                                                         Michigan           10%     2015
                                                                        Minnesota           30%     2025
                                                                         Missouri           15%     2021
                                                                         Montana            15%     2015
                                                                     North Carolina        22.50%   2021
                                                                      North Dakota          10%     2015
                                                                     New Hampshire         23.80%   2025
                                                                       New Jersey          22.50%   2021
                                                                       New Mexico           20%     2020
                                                                          Nevada            20%     2015
                                                                         New York           25%     2013
                                                                            Ohio           12.50%   2025
                                                                          Oregon            25%     2025
                                                                      Pennsylvania          18%     2020
                                                                      Rhode Island          16%     2020
                                                                      South Dakota          10%     2015
                                                                           Texas          5880 MW   2015
                                                                            Utah            20%     2025
                                                                          Virginia          12%     2022
                                                                         Vermont            10%     2012
                                                                       Washington           15%     2020
Source: M.J.Beck Consulting, LLC                                        Wisconsin           10%     2015




    4     STARWOOD ENERGY GROUP GLOBAL, LLC
     Near Term RPS Goals Require Huge Investment

                                     New Renewable Capacity (left) / $ Billions (right) to Meet State RPS
                                                                                                                                                    WI
     250,000                                                                                                                               $1,250
                                                                                                                                                    VA
                                                                                                                                                    UT
                                                                                                                                                    TX

     200,000                                                                                                                               $1,000   RI
                                                                                                                                                    PA
                                                                                                                                                    OH
                                                                                                                                                    NY
     150,000                                                                                                                               $750     NV
                                                                                                                                                    NM
                                                                                                                                                    NJ
                                                                                                                                                    NH
     100,000                                                                                                                               $500
                                                                                                                                                    NC
                                                                                                                                                    MO
                                                                                                                                                    MN
       50,000                                                                                                                              $250     MI
                                                                                                                                                    ME
                                                                                                                                                    MD
                                                                                                                                                    MA
              0                                                                                                                            $0
                                                                                                                                                    IL
8 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
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                                                                                                                                                    HI
    Source: SNL (Note: assumes 2% CAGR in total generation capacity and assumes renewable generation phased in evenly over time).




          5       STARWOOD ENERGY GROUP GLOBAL, LLC
 Who Will Lead Renewable Infrastructure Build-Out?

 • Private Equity firms with deep expertise in acquisitions and development are well positioned to
   capitalize on the opportunities presented by these market conditions
          — Significant un-deployed capital earmarked for energy/infrastructure
          — Familiarity with structured project finance
          — Ability to deploy capital quickly
          — Comfort with technology/development risk
          — Dominant market share of existing renewable generation
                                                                    100.0%

                                                                     90.0%
                I PP Ma r k e t Sha r e by Ge ne r a ti o n Ty pe




                                                                     80.0%

                                                                     70.0%

                                                                     60.0%
                                                                                                                                                              1997
                                                                     50.0%                                                                                    2002

                                                                     40.0%                                                                                    2007

                                                                     30.0%

                                                                     20.0%

                                                                     10.0%

                                                                      0.0%
                                                                             Coal   Natural Gas   Nuclear   Hydroelectric Conventional   Wind/Solar/Biomass

Source: EIA and Starwood Energy Group




      6      STARWOOD ENERGY GROUP GLOBAL, LLC
Utilities Need IPPs and Private Equity


                           Despite difficult market conditions, Utilities continue to
                          seek new renewable generation at an unprecedented rate
                          Date Issued                 Utility               Resource           Size
                           9/11/2009      Tucson Electric Power Company       Solar        50,000 MWh
                           8/5/2009                 NV Energy               Renewable          N/A
                           7/15/2009                 AEP Ohio                 Solar     1,800 MWh of RECs
                           7/8/2009                 PacifiCorp              Renewable        500 MW
                           6/29/2009      Pacific Gas & Electric Company    Renewable   800-1,600 GWh/year
                           6/29/2009     San Diego Gas & Electric Company   Renewable          N/A
                           6/29/2009        Southern California Edison      Renewable       1,900 MW
                           6/1/2009        American Electric Power Co.      Renewable       1,100 MW
                           5/19/2009      Nebraska Public Power District    Renewable          N/A
                           5/7/2009           Consumers Energy Co.          Renewable        250 MW
                           5/7/2009             Great River Energy          Renewable    1,600 GWh/year
                           4/30/2009              Hydro-Quebec                Wind           500 MW
                           4/22/2009         New York Power Authority         Wind           120 MW
                           4/14/2009              Hydro-Quebec               Biomass         125 MW
                           3/25/2009         Arizona Public Service Co.     Renewable    45,000 MWh/year
                           3/12/2009     Los Angeles Dept Water & Power     Renewable    1,000 GWh/year
                           2/12/2009            Westar Energy Inc.          Renewable        500 MW
                           1/29/2009          Consumers Energy Co.          Renewable        17.4 MW
                           1/21/2009        Northern States Power Co.         Wind             N/A
                           1/1/2009           Public Service Co. of CO        Wind          2,200 MW




 7   STARWOOD ENERGY GROUP GLOBAL, LLC
 Capacity Summary of Connecticut

                             Historic and Future Nameplate Capacity
                                 State: CT Years: 2000 - 2015

  12000

  10000

   8000

   6000

   4000                                                                                                                 2008 CT Capacity by Fuel Type
                                                                                                                                             Water
                                                                                                                                             1.75%

                                                                                                                                            Solar
   2000                                                                                                                                    0.01%
                                                                                                                                                     Biomass
                                                                                                                               Other Nonrenewable     2.55%     Coal
                                                                                                                                      0.39%                    7.10%
       0
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                                                                                                                        Oil
                           Gas    Oil      Nuclear   Coal    Biomass    Solar    Other Nonrenewable     Water         33.93%


                                                                                                                                                                         Gas
                                                                                                                                                                       29.26%




Source: SNL                                                                                                                                    Nuclear
                                                                                                                                               25.00%




     8
 Renewable Energy Policies of Connecticut

 • RPS Standard: 27% of retail load by 2020 (4% from combined heat & power) – among the most
   ambitious state targets relative to existing levels of in-state renewable generation
 • Penalty for non-compliance of $55/MWh:
         • Payments will be allocated to Connecticut Clean Energy Fund for the development of Class I
           renewables (solar, wind, biomass, landfill gas, fuel cells, ocean/tidal, and some hydro)
 • Yet current projections suggest modest in-state build-out in the near term:
                                                Advanced
                                              Development    Announced      Total
                            Biomass Waste             67.5        120.7     188.2
                            Fuel Cell                 39.9         85.8     125.7
                            Hydro                      2.0          0.0       2.0
                            Tidal                      3.0          0.0       3.0
                            Grand Total              112.4        206.5     318.9



 • Current State-level incentives including Project 150 and the Solar Rebate Program are the first
   steps
 • However, more significant incentives are necessary to spur substantial renewable growth


Source: SNL and CCEF




     9
Connecticut Renewables in the News


 “CONNECTICUT REVISES ITS RENEWABLE PORTFOLIO STANDARD”
           -PMA OnLine Magazine – January 19, 2008

                         “Connecticut plan includes $19 million of stimulus funds for fuel cell, other technologies”
                                        -SNL Energy - April 24, 2009
 “Clean Energy Taking Root In Connecticut”
            -Chief Engineer - ‎ ct 1, 2009
                              O
                                                       “Energy report: Calgary firm lands wind farm project CT”
                                                                  -Financial Post – September 30, 2009


“Branford Unveils Solar Electric System Earned through Connecticut Clean Energy Communities Program”
                 -CCEF - September 30, 2009

                                                   “Pair erects $10 million in solar panels on Danbury building”
                                                                 -The Ridgefield Press – September 22, 2009

       “State's Technical High Schools Working To Emphasize 'Green' Skills”
                     -The Hartford Courant - October 12, 2009




  10
Opportunities for Connecticut Business

• Renewable energy build-out will have material effects on numerous industries
• To meet RPS standards will require a $30B infrastructure investment, a large portion of which
  will flow back into the local economy:
      • Project Development - $750MM (2.5%)
      • Construction / Installation - $4.5B (15%)
      • Operations - $75MM/year
      • Manufacturing - to the extent that components are made in-state




              Derby Dam                    Thule Distribution Facility      DFC3000 Fuel Cell
              Shelton, CT                        Seymour, CT                   Milford, CT




 11    STARWOOD ENERGY GROUP GLOBAL, LLC

				
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