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RENEWABLE ENERGY

MODEL FOR EVALUATION

TO TRULY TRANSFORM OUR ECONOMY, PROTECT OUR


SECURITY, AND SAVE OUR PLANET FROM THE RAVAGES OF
CLIMATE CHANGE, WE NEED TO ULTIMATELY MAKE CLEAN,
RENEWABLE ENERGY THE PROFITABLE KIND OF ENERGY.
BARACK OBAMA, Address to Joint Session of Congress, Feb.
24, 2009

4/29/2016

PRESENTATION OUTLINE

Solar
India

Approach

Electricity

Renewable

Waste
to
Energy

Q&A

USA
Wind
4/29/2016

MODELING APPROACH

Macro
Energy
Industry

Technology
Specific

Refinement

Sensitivity
Studies

MODEL

4/29/2016

FACTORS: SUPPLY & DEMAND. SUBSTITUTES.

Generation
Capacity

Number
End Users
Losses

Growth
Rate

Growth Rate

Competition

Supply

Substitutes

Demand

ENERGY LANDSCAPE: POPULATION


USA

India Electricity Demand by Sector


India Electricity demand sector and generation,TWh

2nd

Energy
Consumer

320
million

Demand

0.73%
Population

Growth

Industry

Residential

Services

Transport

Agriculture

Other Energy Sector

7,000
6,000
5,000
4,000

India
4th

3,000

Energy
Consumer

1.3
billion

2,000

1.2%
Population

1,000

Growth

0
2000

2013

2020

2030

4/29/2016

2040

RENEWABLE VS. NON-RENEWABLE ENERGY SUPPLY


Percentage of Renewable Energy Supply

Conventional

India

Coal
Gas
Oil
Nuclear

41%
40%
38%

27%

28%

30%

31%

32%

34%

Renewables

Hydro
Bio Fuels
Wind
Geothermal
Solar PV

USA

18%

2014

18%

2015

19%

2016

20%

2017

21%

2018

22%

2019

35%

23%

2020

37%

24%

2021

25%

2022

26%

2023

28%

2024

RENEWABLE ENERGY SUPPLY PROJECTIONS


US Avg. Price Scenarios ($ per kWh)

Electricity Price*

India

US

$0.19

$0.12

($/KWH, 2011)
*ADJUSTED FOR PURCHASING POWER
7

USA: ENERGY SUPPLY BY ENERGY SOURCE (1,140 GWH, 2014)


Oil, 61, 5%

Solar PV, 15, 7%

Coal, 318, 28%


Nuclear, 105, 9%

Renewables,
202, 18%

CSP, 1, 1%

Geothermal, 3, 2%

Hidro, 102, 50%

Wind, 64, 32%

Gas, 457, 40%


Bioenergy, 17, 8%

4/29/2016

INDIA: ENERGY SUPPLY BY ENERGY SOURCE (288 GWH, 2013)


Gas, 23, 8%

Renewables

Oil, 7, 3%
Nuclear, 6, 2%

Other, 7, 9%
Solar PV, 3, 4%

Renewables,
78, 27%
Wind, 23, 29%

Hydro, 45, 58%

Coal, 174, 60%

4/29/2016

RENEWABLE ENERGY SUPPLY PROJECTIONS


USA
Hidro

India
Bioenergy

Wind

Solar PV

Hydro
Renewable Energy Supply, India, GW

350
Renewable Energy Supply
USA ,GW

300
250
200
150
100

50
-

Wind

Solar PV

Other

160

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

140
120
100
80
60
40

20
0
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024
10

INDIA: ELECTRICITY CONSUMPTION

4/29/2016

IEA

11

INDIA: RENEWABLES POWER GENERATION CAPACITY

4/29/2016

IEA

12

USA WASTE TO ENERGY: FACTORS

Availability of MSW

Price of Electricity

High Recycling Rates

Public Support

Property Prices

Tax Credits

4/29/2016

13

USA WASTE TO ENERGY: MSW AVAILABILITY


Total MSW Availability, MM Tons per Year
400

Growth Rate 2010-2013 1.40% EPA

350

254

266

279

260

273

286

2013

2014

2015

2016

2017

2018

Yearly Empirical Growth rate till 2025 8.30%

Experts predict worldwide waste will double by 2025

MM Tons per Year

300

293

299

307

314

2019

2020

2021

2022

321

329

337

2023

2024

2025

250
200
150
100

Energy produced per ton of MSW 550 kWh MSW

50
0

4/29/2016

Model Demo

14

USA WASTE TO ENERGY: PRICE OF ELECTRICITY


Price of Electricity

Considering different scenarios price varies:

From $9.6 in 2018, if the resources for oil


and gas are still high
To $14.03 in 2023, if the price of oil an gas
increases

Reference case: United States 2013 ($/MMBtu)

High economic growth ($/MMBtu)

Low economic growth ($/MMBtu)

High oil price ($/MMBtu)

Low oil price ($/MMBtu)

High oil and gas resource ($/MMBtu)

13.50
13.00
12.50

12.00
11.50
11.00
10.50
10.00
9.50
9.00
2013

2014

2015

2016

2017

2018

2019

2020

2021

4/29/2016

Model Demo

2022

2023
15

USA WASTE TO ENERGY: RECYCLING


Loss of energy production due to recycling (kWh)

Reycling Rate

40%

3,000,000

39%
2,500,000

Loss of Energy Production due to Recycling

Energy Produced per Tone

37%

2,000,000

36%
1,500,000
35%
34%

1,000,000

Loss of Production, MWh

Adjust for Legislation

Recycling Rate, %

Recycling Growth Rate

38%

33%
500,000
32%
31%

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

4/29/2016

Model Demo

16

USA WASTE TO ENERGY: PUBLIC SUPPORT


IS GLOBAL WARMING A
SERIOUS THREAT?

"YES, GLOBAL WARMING WILL


HAPPEN IN MY LIFETIME".
Conservative
Republicans, 37%

No 42%
Independents, 66%
Yes 58%
Liberal Democrats, 89%

4/29/2016

Model Demo

17

USA WASTE TO ENERGY: COMMERCIAL PROPERTY PRICES


Assumptions

3.10%

Implications

168

208

Property Prices negatively affect the NPV of landfills


Reducing landfill projects NPV is increases the

probability of success of WTE projects


Expected
Price Growth

Moody's/RCA
Commercial
Price Index
2015Q4-

Moody's/RCA
All Property
Price Index
2015Q4

75 % decline in disposal facilities from 1986 to 2009

4/29/2016

Model Demo

18

USA WASTE TO ENERGY: TAX CREDITS


Assumptions

Application

420 $MM
CAPEX WTE plant

0.011 $/kWh

30%

Production Tax Credit

Investment Tax

3.329 GW per
Yr.
Energy Production

$126MM

$41.8MM

ITC

PTC

4/29/2016

Model Demo

19

INDIA WASTE TO ENERGY: FACTORS


Population-1.5B by 2030 (40% Urban)

MSW Generation
133,760 TPD

80.65% dumped in land fills

Market potential 2780 MW


(2050)

Current Utilization <30


MW

WTE Plants 2031


Number of Plants- 215

Installed Capacity- 1075 MW

Growth Rate- 37%

4/29/2016

20

INDIA WASTE TO ENERGY: KEY ASSUMPTIONS

$0.08
Price, per
kWh

5MW
Generating
Capacity

$50,000
Capital Cost,
per TPD

+3%
Maintenance
Cost, per Yr.

4/29/2016

21

INDIA WASTE TO ENERGY: CAPACITY


6

700,000
616,467

Number of Plants Added to the Grid

WTE Plants added to the grid

500,000

456,642

Total generation (MWh)

400,000
338,253

250,558
2

185,599
137,480

30,660
1

0
2013

41,391

55,878

75,435

2014

2015

2016

200,000

101,837
1

2
1

300,000

Generated Capacity, MWh

600,000

100,000

2017

2018

2019

2020

2021

2022

2023
4/29/2016

22

INDIA WASTE TO ENERGY: POPULATION


Implications

Projections
#REF!

Rapid Urbanization

1
0.9

Increase in demand for electricity

0.8

Lack of landfill space- 4 sq. miles per year

0.6

0.7

0.5
0.4
0.3

0.2

Model Demo

0.1
0
0

4/29/2016

23

INDIA WASTE TO ENERGY: THREATS & RECOMMENDATIONS

Lack of due diligence


Providing MSW according to contractual quantities
Presence of inerts
Inadequate market for sale of compost/RDF
Public resistance
Lack of financial viability

Federal WTE
identified issues:

Considerations:

New Plants- (30-20-50)- Federal-State-Private


Increased capital investment in infrastructure to sort MSW at source
Bridge tipping fee gap by subsidies from the government
Tax-breaks for investors

4/29/2016

24

SOLAR ENERGY: KEY CONCEPTS

Passive
Sun Energy => Heat
Active
Sun Radiation => Electricity
Photovoltaic (PV) Cells
Concentrated Solar Panels

4/29/2016

25

SOLAR ENERGY: FACTORS


Supply

Capacity

Average Sun Hours

Efficiency

Electricity Demand

End Users

Transmisson and Distribution

PG Own Use Growth Rate

Production Costs

Rebates

Capital Expenditure
4/29/2016

26

USA SOLAR ENERGY: DISTRIBUTION

4/29/2016

27

USA SOLAR ENERGY: SUPPLY


Solar Capacity (MWh/ Yr.)

Addition to Capacity & Supply

Installed Capacity (MW) in this year

Accumulated Solar Electricity Capacity

140,000,000

Accumulated Solar Electricity that can be Generated (MWh)

120,000,000

25,000

Accumulated Capacity =

20,000

Capacity Added + Capacity until last year * (1 - PV Panels Efficiency Decline)

100,000,000
15,000

80,000,000
60,000,000

10,000

40,000,000
5,000

20,000,000
-

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Yearly Generated Solar Electricity=


Capacity * 365 * Sun Hours * Generation Losses
4/29/2016

Model Demo

28

USA SOLAR ENERGY: DEMAND


US Electricity Demand

- PG Own Use
Growth Rate

- Transmission and
Distribution Loss

3.0%

Total Demand

4,700
4,650

2.5%

4,600
4,550

2.0%

4,500
1.5%

4,450
4,400

1.0%

4,350
4,300

0.5%

4,250
0.0%

4,200
2013

2014

Gross Demand

2015

2016

2017

2018

2019

2020

2021

Available Solar Electricity as Percentage of Total Demand

4/29/2016

Model Demo

Gross Demand, TWh

Percentage of Total Demand

End User Demand

29

USA SOLAR ENERGY: CAP-EX SOLAR PV ARRAY SIZE ($/KW)


<1.2 kW
$7,200

Small Array Size

1.2 kW to 6.5kW
$4,750

$3,700
$3,000

$2,800

$2,750

$2,613

Large Array Size

2009
Model Demo

$2,482

2010

2011

2012

2013

2014

2015

USA SOLAR ENERGY: ELECTRICITY PRICE

Model Demo

USA SOLAR ENERGY: SOLAR INCENTIVES & REBATES IMPACT


$6,000

Costs of Production ($/MWh)

U.S. Federal Investment Tax Credits

$5,000

Costs of Production with Rebates ($/MWh)


Costs of Production with Rebates and SRECs($/MWh)

30% of net cost of PV system


$4,000

Cash Rebates
From state, municipality, utilities or NGOs 10%

Solar Renewable Energy Certificates (SRECs)


$0.05 per kWh

$3,000
$2,000
$1,000
$2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
4/29/2016

Model Demo

32

USA SOLAR ENERGY: PV INSTALLATIONS

WIND ENERGY: FACTORS

1. PPA
Agreements

2. Tax
Concessions

3. Capacity

4. Production
Costs
4/29/2016

34

WIND ENERGY: PPA AGREEMENTS


Revenue Generated Wind

Model Inputs

Revenue India

Initial PPA Price


PPA Growth (Decline) Rate

Revenue US

$18,000
$16,000

USA

$24
Per MWh,
Average (2014)

India

$40
Per MWh,
Average (2012)

$25-$25

$30-$45

Per MWh,
Range (2014)

Per MWh,
Range (2014)

Revenue Generated, $MM

$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$2014

2015

2016

2017

2018

2019

2020
4/29/2016

Model Demo

2021

2022
35

WIND ENERGY: TAX CONCESSIONS AND REGULATIONS


US & India Tax Credits
$30,000

USA

$25,000

$20,000

$15,000

$10,000

India

Accelerated

$0.01/kWh

15% per Yr.

$5,000

$-

PTC

Depreciation

2016

2017

2018

India Tax Concessions

2019

2020

2021

2022

2024

U.S. Federal Tax Credits - Production

4/29/2016

Model Demo

2023

36

USA WIND ENERGY: INSTALLED CAPACITY


Top Wind Producing States, 2014

USA Installed Capacity (GW)

India Installed Capacity (GW)

USA Wind Electricity Generated (GWh)

India Wind Electricity Generated (GWh)

500,000

140
120

400,000

100

350,000
300,000

80

250,000
60

200,000
150,000

40

100,000
20

50,000
-

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

4/29/2016

Model Demo

Installed Capacity GW

Wind Electricity Generated, GWh

450,000

2024

37

WIND ENERGY: COST OF ELECTRICITY PRODUCTION


USA Annual O&M Costs

Capacity & O&M Costs

India Annual O&M Costs

$7,000
$6,000

U.S.: 30%,in $/MWh


India: 15%
$40-$60
per kWh

1980s $33
1990s $22
2000s $10
2010s TBD

Costs, in $MM

$5,000
$4,000
$3,000

$2,000
$1,000
$2014

2015

2016

2017

2018

2019

2020

2021

4/29/2016

Model Demo

2022

2023

38

WIND ENERGY: ADDITIONAL CONSIDERATIONS

1. Regulation
Changes

3. Rise of
Distributed
Power
Networks

2. Tax
Concession
Conclusions

4. Funding
Challenges
4/29/2016

39

QUESTIONS?

4/29/2016

40

ANNEX- USA WASTE TO ENERGY: PRICE OF ELECTRICITY


Return to Slide

4/29/2016

41

ANNEX- USA WASTE TO ENERGY: PRICE OF ELECTRICITY

4/29/2016

42

ANNEX- USA WASTE TO ENERGY: AVAILABILITY OF MSW


Return to Slide

4/29/2016

43

ANNEX- USA WASTE TO ENERGY: RECYCLING RATES


Return to Slide

4/29/2016

44

ANNEX- USA WASTE TO ENERGY: TAX CREDITS


Return to Slide

4/29/2016

45

ANNEX- USA WASTE TO ENERGY: PUBLIC SUPPORT


Return to Slide

4/29/2016

46

ANNEX- USA WASTE TO ENERGY: COMMERCIAL PROPERTY PRICES


Return to Slide

4/29/2016

47

ANNEX- USA WASTE TO ENERGY: OVERALL MODEL


Return to Slide

4/29/2016

48

ANNEX- INDIA WASTE TO ENERGY: POPULATION


Return to Slide

4/29/2016

49

ANNEX- INDIA WASTE TO ENERGY: OVERALL MODEL


Return to Slide

4/29/2016

50

ANNEX- USA SOLAR: INSTALLED CAPACITY


Return to Slide

4/29/2016

51

ANNEX- USA SOLAR: DEMAND


Return to Slide

4/29/2016

52

ANNEX- USA SOLAR: ESTIMATED COST WITHOUT REBATES


Return to Slide

4/29/2016

53

ANNEX- USA SOLAR: ESTIMATED COST WITH REBATES


Return to Slide

4/29/2016

54

Year

ANNEX- USA WIND: OVERALL MODEL


Return to Slide

2016
2017
2018
2019

PTC (per kWh)


$
0.0230
$
0.0184
$
0.0138
$
0.0092

Year

ITC
2016
2017
2018
2019

4/29/2016

30%
24%
18%
12%

55

GDP
US GDP

US vs. India GDP Growth Rate

30000

GDP in billion U.S. dollars

25000

20000

17,810

18,494

19,297

20,127

20,906

21,710

22,593

23,528

24,497

25,506

26,559

GDP Growth Rate

27,660

6.64%

7.29%

7.26%

7.46%

7.54%

7.65%

7.70%

7.74%

2.43%

2.43%

2.40%

2.50%

2.38%

2.13%

1.96%

1.98%

2014

2015

2016

2017

2018

2019

2020

2021

6.09%
5.08%

15000

10000

2.22%
1.49%

5000

2015

2016*

2017*

2018*

2019*

2020*

2021*

Year

2022*

2023*

2024*

2025*

2026*

2012

2013

India

USA

4/29/2016

56