NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 1 / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

CLEAN ENERGY FINANCING OVERVIEW

NATIONAL ACADEMY OF SCIENCES WORKSHOP

25 JULY 2013

ETHAN ZINDLER

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 2 / / / /

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NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 3 / / / /

North America (39)

South America (5)

Europe (88)

Asia Pacific (24)

Africa (29)

San Francisco

Sao Paulo

Washington New York

Cape Town Sydney

London Beijing

New Delhi

Hong Kong

BLOOMBERG NEW ENERGY FINANCE: 200 STAFF IN 13 OFFICES WORLDWIDE

Tokyo

Singapore

Zurich

Objective: Be the definitive source of insight, data and news on the transformation of the energy sector.

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 4 / / / /

WHO WE SERVE: 700+ LEADING PLAYERS GLOBALLY

GOVERNMENT & AGENCIES SUPPLY CHAIN &TECHNOLOGY

UTILITIES & ENERGY FINANCE & INVESTMENT

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 5 / / / /

$269bn

GLOBAL TOTAL NEW INVESTMENT IN CLEAN ENERGY 2004–12 ($BN)

Source: Bloomberg New Energy Finance

Note: Includes corporate and government R&D, and small distributed capacity. Adjusted for re-invested equity. Does not include proceeds from acquisition transactions

$54bn$80bn

$114bn$165bn

$191bn $187bn

$251bn$302bn

2004 2005 2006 2007 2008 2009 2010 2011 2012

+48%+42%

+45%

+16% -2%

+34%

+20%-11%

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 6 / / / /

CLEAN VS FOSSIL-BASED GENERATING CAPACITY INVESTMENT, 2006–12 ($BN)

Source: Bloomberg New Energy Finance Note: Clean energy total excludes large hydro. Fossil fuel is investment on coal and gas capacity. We assume capacity retirement of 3.3%/yr for coal and 4%/yr for gas.

Clean energy

Fossil fuel

0

50

100

150

200

250

300

350

2006 2007 2008 2009 2010 2011 2012

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 7 / / / /

TECH DEVELOPMENT AND WHERE FINANCING / GOVERNMENT SUPPORT FITS IN

Product Development Early Commercialization

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

Commercial Maturity

Ga

ps

Deployment / Pilot Facility

Technology Creation

Research & DevelopmentDemonstration / Proof of

ConceptDiffusion /

Commercialization

Valley of death -Technological

Public MarketsSeries A Series B Later RoundsSeries C

Generate idea and begin to generate intellectual property

Design and test prototypeBuild company Improve intellectual property

Prove technical validity in the fieldMarket technology

Prove manufacture process can be scaled economicallyProve technology is viable at scale

Proven technology is sold and distributed

Valley of death - Commercialization

Grants, Natl lab support

Grants, loan guarantees

Grants, loans, guarantees, 48C credits

Tax credits (PTC/ITC)

Scale-back, MLPs (?), etc.

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 8 / / / /

+4+4

+5 +1 +2 15 -0.1

+23

+7 44

+19 63+19

CLEAN ENERGY INVESTMENT TYPES & FLOWS IN THE UNITED STATES, 2012 ($BN)

Source: Bloomberg New Energy Finance

VC Corp R&D

Gov R&D

PE Public markets

new equity

Total company

investment

Re- invested

Asset finance

Small distributed

capacity

Total investment

M&A/ Buy-outs

etc.

Total transactions

Technology development

Equipment manufacturing/ scale-up

Projects

Asset and company mergers, acquisitions, refinancing, buy-outs etc.

US by far world leader (68% of global VC/PE investments in 2011)

US by far world leader (75% of global VC/PE investments in 2012)

Led by: • Tesla (secondary) • Solarcity (IPO) • GT Advanced Tech

(convertible) • Sunpower (secondary)

36% Drop from 2011 after expiration of incentive programs: • DOE loan

guarantee • 1603 Treasury

cash grant • Anticipation of

wind PTC expiration

Note: Includes corporate and government R&D, Adjusted for re-invested equity.

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 9 / / / /

1.4 1.61.0

1.82.5

4.1

1.9

3.6

5.9 6.16.8

10.1

7.87.2

9.7

12.4

10.311.3

8.27.5

3.0

8.7

6.45.3

6.5

9.2

7.5

12.9

6.4

18.1

20.3

11.8

9.5

11.9

8.5

6.7

3.7

9.5

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Wind Solar Bioenergy Energy smart technologies Other clean energy

NEW INVESTMENT IN CLEAN ENERGY IN THE US BY SECTOR, Q1 2004–Q2 2013 ($BN)

Source: Bloomberg New Energy Finance Note: Total values include estimates for undisclosed deals. Excludes corporate R&D, government R&D, digital energy asset investment and energy storage asset investment (only available annually)

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 10 / / / /

0.10.2

0.10.2 0.2

0.4

0.2

0.6

0.3

0.91.0

0.5

0.80.9

1.01.2 1.2

1.7

2.3

1.7

0.7

1.4 1.3

0.6

1.7

2.1

0.7

1.4

1.7

1.2

1.61.5

1.21.3

0.9 1.0

0.6 0.7

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

PE Expansion capital VC Further VC Series C VC Series B VC Series A VC Seed/Tech

VC/PE NEW INVESTMENT IN CLEAN ENERGY IN THE US BY ROUND TYPE, Q1 2004–Q2 2013 ($BN)

Source: Bloomberg New Energy Finance Note: Total values include estimates for undisclosed deals. Excludes PE buy-outs which do not constitute new money flows, but rather money changing hands.

NATIONAL ACADEMY OF SCIENCES, 25 JULY 2013 11 / / / /

LEVELISED COST OF ELECTRICITY Q2 2013 ($/MWH)

Source: Bloomberg New Energy Finance Note: regional scenarios are shown to demonstrate the richness of the dataset and are discussed further in the sector-specific sections of the Note.

0 50 100 150 200 250 300 350 400 450 500

Coal firedNatural gas CCGT

CHPNuclear

Small hydroLarge hydro

Biomass - anaerobic digestionLandfill gas

Geothermal - flash plantBiomass - incinerationMunicipal solid waste

Wind - onshoreGeothermal - binary plant

PV - c-SiBiomass - gasification

PV - c-Si trackingPV - thin film

STEG - tower & heliostat …STEG - parabolic trough

Wind - offshoreFuel cells

STEG - parabolic trough + storageSTEG - tower & heliostat

STEG - LFRMarine - tidal

Marine - wave

Global LCOE range Regional scenarios Q1 2013 central Q2 2013 central

1059861

531

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ETHAN ZINDLER, EZINDLER@BLOOMBERG.NET TWITTER: @ETHANALL