BloombergNEF: Finding Value in a Sustainable Future - Demand Drivers Input Drivers Operational Efficiency Competitors - Energy and Mines Australia
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BloombergNEF:
Finding Value in a
Sustainable Future
Demand Drivers
Input Drivers Policy
Economics
& forecasts
Operational Sustainability
Efficiency Innovation
& tech
Finance
Competitors
1 Energy and Mines, Perth
Cheap renewables are here 2 Energy and Mines, Perth
The cost of clean technologies
continue to decrease
Solar PV module prices Onshore wind turbine prices Lithium-ion battery prices
$/W euro / W $/kWh
5 1.40 1,200
4.5 1.30
-94% since -37% since 1,000 -85% since
4 1.20
2008 2008 2010
3.5 1.10 800
3
1.00
2.5 600
0.90
2
0.80 400
1.5
1 0.70
200
0.5 0.60
0 0.50 0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2010
2013
2016
2008
2009
2011
2012
2014
2015
2017
2018
Source: BloombergNEF
3 Energy and Mines, Perth
In Australia, coal generation
costs have gone up…
Price and capacity offers from black coal generators in Australia
Offered Capacity (MW)
3000
2016
2000
1000
0
0- 10 - 20 - 30 - 40 - 50 - 60 - 70 - 100 - 300 -
10 20 30 40 50 60 70 100 300 1000
3000
2018
2000
1000
0
0- 10 - 20 - 30 - 40 - 50 - 60 - 70 - 100 - 300 -
10 20 30 40 50 60 70 100 300 1000
Price (A$/MWh)
Source: BloombergNEF, AEMO
4 Energy and Mines, Perth
…as have gas prices
Weekly gas spot prices in Eastern Australia
Domestic market pricing LNG linked pricing Partial de-coupling from LNG prices
A$/GJ
20
Ramp gas from Scarcity pricing Australian Domestic Gas
LNG producers Security Mechanism
15
10
5
0
Jan
Jun
Jan
Jun
Jan
Jan
Oct
Oct
Oct
Oct
Feb
Mar
Jul
Feb
Mar
Jul
Feb
Mar
June
Jul
Sept
Feb
Mar
June
Jul
Sept
Apr
May
Aug
Sep
Apr
May
Aug
Sep
Apr
May
Aug
Apr
May
Aug
Nov
Dec
Nov
Dec
Nov
Dec
Nov
Dec
2014 2015 2016 2017 2018
Adelaide Sydney Victoria Brisbane Wallumbilla Singapore LNG spot
Source: BloombergNEF, Australian Energy Market Operator
5 Energy and Mines, Perth
In Australia, new renewables
are already undercutting existing coal
Short-run cost of coal versus levelized cost of electricity of wind and solar in Australia
A$/MWh
200
2016 2018
180
160
140 Solar PV
LCOE
120
Wind
100 LCOE
80
Wind
Solar PV
60 LCOE LCOE
40 Short-run cost of coal based on spot coal price
Short-run cost of coal based on spot coal price
20
0
Source: BloombergNEF. Short-run cost of coal assumes a standard heat rate of 9.9GJ/MWh, an energy content of black coal of 25.1GJ/tonne and a range of 6000kCal thermal spot
prices at Newcastle hub in 2016 and 2018.
6 Energy and Mines, Perth
Australia LCOE stack Source: BloombergNEF 7 Energy and Mines, Perth
Larger industrial systems are
expected to grow
Annual commercial installations
Number of systems Net present value (A$/kW)
16,000 4,000
Commercial NPV
12,000 3,000
Commercial
Industrial NPV
8,000 2,000 Industrial
4,000 1,000
0 -
2010 2020 2030 2040 2050
Source: BloombergNEF. Note: For more details see: Australia behind-the-meter PV and storage forecast (Web | Terminal).
8 Energy and Mines, Perth
Which could drive a massive
surge of behind-the-meter PV capacity
Annual capacity additions Cumulative installed capacity
GW GW
4.0 60
3.5 50
3.0
40
2.5
Industrial
2.0 30
Commercial
1.5 20
Residential
1.0
10
0.5
0.0 0
2010 2020 2030 2040 2050 2010 2020 2030 2040 2050
Source: BloombergNEF. Note: For more details see: Australia behind-the-meter PV and storage forecast (Web | Terminal).
9 Energy and Mines, PerthState-of-play for mining and
renewables
Mining generation projects, by tech Mining generation projects, by strategy
Installed capacity (MW)
400
Installed capacity (MW)
352
Small hydro 480
300 Embedded
792 generation
219
206 Wind
Hosting an IPP
200 201
127 121
Solar Miner as IPP
261
100
66 Renewable energy
39 645 subsidiary
10
0 Off-site PPA
2010 11 12 13 14 15 16 17
Source: BloombergNEF Source: BloombergNEF
10 Energy and Mines, PerthRenewable and off-grid
solutions for miners
Energy storage
/battery
Solar /inverters management
software
Mining
Fuel generators
/rental Redeployable
solar /rental
Hybrid micro-grids
Source: BloombergNEF
11 Energy and Mines, PerthA Hydrogen Future?
Transport
● {BPIX 321064668}
12 Energy and Mines, Perth
Source: BloombergChallenge 1: two thirds of the
energy is lost in conversion
Round-trip electrical efficiency of hydrogen
38%
2%
1.00 MWh 45%
0.33 MWh
Electricity input Loss Loss Loss Electricity out
(electrolysis) (compression for storage) (fuel cell)
Source: BloombergNEF, CSIRO
13 Energy and Mines, PerthChallenge 2: making clean hydrogen is costly Fuel cost ($/GJ) $32-41 Hydrogen from renewable electricity $15-20 Hydrogen from fossil fuels $3-11 Natural gas Source: BloombergNEF, Morgan Stanley, CSIRO 14 Energy and Mines, Perth
…but should get cheaper Expected electrolyzer cost reductions by 2025 $/GJ Source: CSIRO. Note: Figures for polymer electrolyte membrane (PEM) electrolyser. U.S. Department of Energy 2020 cost target: $19/GJ 15 Energy and Mines, Perth
Challenge 3: transporting hydrogen is tricky… Hydrogen embrittlement Source: General Electric, Eaugen Furamera, Metropolitan Consulting Engineering & Forensics. 16 Energy and Mines, Perth
..and long-distance shipping
won’t come cheap
Delivered cost: $30/GJ
+ Shipping: $15/GJ
Production: $15/GJ
Source: BloombergNEF, CSIRO. Note: Cost estimates for 2025.
17 Energy and Mines, PerthChallenge 4: producing at
scale requires a lot of power
78 EJ Projected demand in 2050 (Hydrogen Council)
Requires
29,250 TWh > than current
global generation
Source: BloombergNEF
18 Energy and Mines, PerthChallenge 5: Require a lot of
investment, and subsidies
Annual investment Annual subsidy
$bn/year 716 $bn/year
343
300
140
25
?
Hydrogen Renewables Oil and gas Hydrogen Renewables Fossil fuels
(requirement)* (2017) (2017) (2016) (2017)
Source: BloombergNEF, IEA, Hydrogen Council Source: BloombergNEF, IEA
19 Energy and Mines, PerthEnergy costs crucial to moving up the metals value chain 20 Energy and Mines, Perth
Movement towards regional
localization of supply chains
Selected investments, partnerships and supply agreements for Northvolt
$12m $12m
$12m
$18m
$62m $12m
$0.6m
$12m
█ Debt █ Investment █ Strategic partnership & investment █ Supply agreement
Source: Regional Development Australia
21 Energy and Mines, PerthRefined Product Control
D.R.C. cobalt capacity, 2019e Refined lithium capacity, Refined nickel capacity,
by processor country by location by location
Other
6%
MNCs
42%
112,400 metric tons
Chinese
52%
Source: BloombergNEF
22 Energy and Mines, PerthComponent manufacturing by region
Lithium-ion battery cathode production
thousand metric tons
454
324
2019
191
169 170 2021
51 51 41 39
36
7 7
Source: BloombergNEF China Korea Japan Europe U.S. Other
23 Energy and Mines, PerthBattery cell manufacturing by region
Battery cell manufacturing capacity by plant location
4%
3% 1% 11%
7%
12%
12%
2019: 1% 2025:
316GWh 2% 1,090GWh
12% 62%
73%
Source: BloombergNEF China U.S. South Korea Japan Europe Other
24 Energy and Mines, PerthWho can compete with China?
Cost of battery pack production Electricity use accounts for around half of
opex costs
$/kWh
$/MWh
450 160
400 140
350 120
300
100
250
80
200
60
150
40
100
50 20
0 0
China Korea U.S. Germany Poland Sweden China Fujian (CATL) Jiangxi (Farasis)
Source: BloombergNEF Source: BloombergNEF, Eurostat, Bloomberg
25 Energy and Mines, PerthCost of electricity is just the
beginning
$million/GWh (real 2019) Plant size
170
160
150
140 35GWh
130 -25%
120
Unsubsidized
110
100 Subsidized
90
80
2017 2018 2019
Commissioning year
Source: BloombergNEF, Eurostat, Bloomberg, Scientific American
26 Energy and Mines, PerthCopyright and disclaimer
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