Italy Meets the USA. VI Summit. Francesco Venturini - Enel Green Power CEO. New York, 14/02/2017

Transcription

1 Italy Meets the USA VI Summit Francesco Venturini - Enel Green Power CEO New York, 14/02/2017

2 The Renewable Energy Sector

3 Oil Roller coaster OIL ROLLER COASTER RIDE This chart tracks the relationship between oil prices and oil consumption since Recessions dampen Demand Iranian revolution, Iran Iraq war Oil prices* $110 What s going on here? In the early 1980s, oil consumption fell. This is why the chart seems to turn around Iraq invades Kuwait End 2000 Record Demand spurs a run up in prices $ $90 $80 $70 Jan 2017 $ Late 1960s, early 1970s Oil prices are steady and consumption grows quickly 1973 The Arab oil embargo causes prices to soar Asian financial crisis Sept.11 Attacks 2004 Jan 2016 $50 $40 $30 $20 $ World oil consumption, Million barrels/day *Average annual price of West Texas Intermediate crude oil, adjusted for inflation using the Consumer Price Index. Posted prices (not spot prices) are shown before Source: Energy Information Administration, Federal Reserve, Bureau of Labor Statistics, Rocky Mountain Institute Review based on Barclays and EIA Projections (EIA: Short Term Energy Outlook, Jan 2017) 2010: Demand 88.1 mb/d; average WTI price 80 $/b 2011: Demand 89,1 mb/d; average WTI price 95 $/b 2012: Demand 90.3 mb/d; average WTI price 94 $/b 2013: Demand 91.8 mb/d; average WTI price 98 $/b 2014: Demand 92.4 mb/d; average WTI price 93 $/b 2015: Demand 93.8 mb/d; average WTI price 49 $/b 2016: Demand 89 mb/d; average 43.3 price $/b 3

4 Auctions awarding prices PV and Wind record prices Morocco Mexico Wind $32 PV $27 Wind $28 PV UAE Wind PV $58 $24 Peru Wind $37 PV $48 Chile Wind $79 $40 PV $67 $29 Zambia Wind PV $60 Brazil Wind $48 $46 PV $69 $76 India Wind PV $82 $65 $66 $49 South Africa Wind $41 PV $57 Source: BNEF Prices refer to $/MWh 4

5 RES investments in 2016 A surprising slowdown 127GW Installations ( ) +535 % 87 GW $274 Bn $287 Bn Investments ( ) +363 % 20 GW $62 Bn Operators are now installing more capacity with the same amount of money Source: BNEF 5

6 Solar Power Ready to become the cheapest form of electricity Solar PV Almost 70 GW of PV installed in 2016 PV learning curve: 24,3% PV costs drop since 2009: 90% Incredible low auction prices in a row: last record 24,2 $ MWh in Abu Dhabi 1,77 Average disclosed capex for onshore wind and PV projects ($m/mw) 5,52 1,89 4,1 4,54 2,68 2,72 2,15 2,23 2, Q 2016 Solar PV Onshore wind PV is as competitive as Wind now 2,02 2,15 1,65 1,66 Wind Almost 60 GW of wind installed in 2016 Wind onshore learning curve: 19% Wind onshore costs drop since 2009: 50% Deals in 2016 indicating consolidation in the sector Source: BNEF, Climatescope, data from 58 emerging market economies including China, India and Brazil 6

7 M&A operations Surge of deals in the new tech field led by energy utilities Greensmith raises $18 m from AEP, Eon and others Stem raises $33m in round led by RWE Younicos raises $50m from investors incl. First Solar Engie acquires 80% of Green Charge Networks Constellation Tech Ventures invests in Qnovo GE Ventures invests $50m in Sonnen HALF 1 HALF 2 HALF 2015 Sunverge raises $ 36m in round led by AGL Doosan Acquires 1Energy Systems Enel acquires Demand Energy Networks Coupled with platforms battery storage will be pivotal to enable the provision of advanced services for both utilities and clients 7

8 Impact of digitization The digital journey Industries are at different stages in the adoption of digital technology Growing appetite by energy utilities in the digital business Thanks to software solutions deferral of assets investments will get traction Signs are looming utilities are catching up in the digital space Source: Boston Consulting Group Point on digitization journey 8

9 Enel Green Power positioning

10 Enel Green Power Positioning and key figures 1 Key figures 2016 Old perimeter Large hydro Capacity 1 (GW) Production (TWh) Key financials ( bn) 2016 Old perimeter Large hydro EBITDA Opex Maintenance capex Countries of presence Countries of interest or under development Growth capex Net installed capacity 1 (GW) Old perimeter capacity and growth capex not including USA projects managed through BSO model (Build Sell and Operate) Preclosing data. Geo Hydro Wind Solar Biomass Large hydro 10

11 1,2 1,0 0,8 0,6 0,4 0,2 0,0 Our competitive advantage Managing complexity Project cost composition 1 Key levers for cost optimization 100% 3-5% Development Innovation and strategic partnerships through flexible co-development agreements 44-47% Capex Design-to-value to increase reliability, production and minimize costs 18-22% 25-30% Opex & taxes Cost of capital Economies of scale, big data and predictive maintenance Low cost of financing coupled with hedging and risk control strategy Total Development Capex Opex & taxes Cost of capital 1. Indicative cost repartition of a sample project Above market equity return to shareholders 11

12 Business Development A worldwide record set by our BD in capacity awarded through auctions Italy, Brazil and South Africa Brazil, Turkey, and South Africa Morocco, Peru, Mexico, Zambia, Indonesia and Italy 2400 MW Morocco: 850 MW wind at record price 28$/MWh Perù: 326 MW awarded in 3 tech Italy and Brazil Italy, Brazil and Chile 1154 MW 1410 MW Mexico: 1 GW PV awarded in one single auction 156 MW 380 MW Zambia: 34 MW PV awarded through Scaling Solar Indonesia: 55 MW GEO 1 EGP award in Asia EGP annual awarded capacity grew X15 in 5 years through auctions 12

13 Engineering and Construction From small to big Construction capacity * x 2 GW Large presence of solar tech 0,9 GW 1 GW 0,9 GW Quantum leap in capacity under construction Big volumes to secure margins Solar Wind Others 2016: Western world record of 2 GW of capacity built in one single year 13 * 2GW refers to new capacity built during 2016 and does not take into consideration acquisition or disposals. Others category indicates Geothermal, Hydro and Biomass

14 Operational Efficiency Key performance indicators 1 Hydro cash cost (k /MW) Wind cash cost (k /MW) Solar cash cost (k /MW) Geothermal cash cost (k /MW) 5% 5% 3% 4% 2,1% 2,1% 1,8% 55,9 1,9% 37,1 51,7 121,8 111,0 44,0 29,1 20,4 Historical 2016 Historical 2016 Historical 2016 Historical 2016 Lost production factor First international operator for renewable capacity managed 1. O&M Cash Costs/MW at forex 2016 excluding taxes, insurance, contribution and not-recurring, historical values refer to years, except solar which refer to , 2016 preclosing data 14

15 Enel Green Power in North America 10/02/2017 Presentation footer 10PT. Please add the relevant country to the footer. 15

16 EGPNA Milestones of Growth 261 MW Enel makes first international acquisition in North America of 261 MW hydropower from CHI Energy, Inc. 570 MW Enel Green Power is born and it expanded its portfolio to include wind, biomass and geothermal energy 800 MW EGP expands in Canada and grows its portfolio and geographical diversification 2,000 MW The company grows significantly its wind portfolio, enters new state and cerates the first of its kind hybrid power plants +3,000 MW +1GW constructed in 2016, an increased solar portfolio, the largest wind project worldwide and new corporate customers +5,000 MW aiming towards 5GW of capacity in operation and investing over $1bn in

17 EGPNA Innovation Driving hybrid approaches to optimize renewables generation Stillwater, NV: Triple-hybrid plant combines geothermal with CSP and PV First-in-the-world application of three technologies to boost renewable generation at times of peak demand. PV supplies extra electricity when geothermal production dips due to increase in ambient air temperature. CSP supplements the heat of the geothermal resource. Viable option to compensate geothermal resource depletion over time. Research collaboration with the National Renewable Energy Lab and Idaho National Lab to explore opportunities for further improvement. Cove Fort, UT: Hybrid plant combines geothermal with hydropower Installed a modified Electrical Submersible Pump (ESP) in an existing injection well and operate it in reverse as an electric generator. Recover hydraulic energy from the brine on the downstream side of a binary geothermal power plant. Resulting in 8% improvement in output. Additional savings from avoided cost of repairs. 17

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