Lane Crockett - slides - clean energy forum June 2011

Investing in Renewable Energy

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What promotes investment in renewable energy?

• Reasonable return on equity

• Reliable and reasonably predictable revenue stream

• Confidence in plant output and operating costs

• Investor certainty (i.e. manageable risks)

• Social and environmental outcomes

The same as any other infrastructure investment!

The benefits of renewable energy

• Sound financial investment

• Zero greenhouse gas emissions

• Lower OHS risks than alternative fossil fuel generation

• Positive social and environmental outcomes

• Broader health benefits to community

Are others investing?

Investor sentiment today

• Looking brighter after much turbulence

• New investment is underwritten by the 20% renewable energy target by 2020

• Carbon price will improve investment certainty

• Banks are keen and super funds ($1T) getting interested

Lane Crockett Pacific Hydro

REC Prices

“Enhanced” RET announced

COAG review of RET announced

NSW G-FIT announced

Rudd Govt elected with 20% by 2020

target

Expanded RET legislated

Howard Govt refuses to increase MRET

Vic Govt wins election with VRET and NSW

RET announced

Underlying graph from Green Energy Markets Renewables Report

SA, Qld & WA support for state RET schemes

Market forecasts oversupply in ERET

design

Estimate of technology breakdown for 20% RET

Bloomberg New Energy Finance

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Bloomberg New Energy Finance

Levelised Cost of electricity ($/MWh)

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ATSE 2009

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AGL, IES & Pacific Hydro

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What do Victorians want?

Survey question: If you had to pick one of these as your preferred option which would it be?

QDOS Survey June 2010

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Renewable energy:

• Popular

• Good investment

• Creates jobs

• Clean and healthy

• No emissions!

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My ten minutes is up.....

Name of Speaker Document Title

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Cost make-up of residential electricity tariff (IPART)

RET (thin wafer)

Retailer cost

Generation cost

Transmission cost

The National Electricity Market

The NEM is a dynamic network which has to balance generation to variable demand in 5 minute periods.

Name of Speaker Document Title 16

AEMO 2010

NEM already manages a high levels of intermittent generation

Name of Speaker Document Title 17

Renewable resources in Australia

Wind

• Lowest cost, lowest environmental footprint

• Around 7000MW of planning approved wind farm capacity in Australia

• May be limited by social factors

Renewable resources in Australia

Solar

• Current costs are high but falling rapidly

• Resource is highly confluent with load demand

• PV costs falling rapidly due to efficiency gains and volume capacity growth

• Solar thermal (with storage) - power can be dispatched into the grid

Opportunities for main technologies

Geothermal

• Vast resource

• Industry moving to conventional technology

• Power can be dispatched into the grid

Wave

• Large coastal resource