The Brazilian PV Market CELA final · Solar PV module&factory8 17PV& component& manufacturers...
Transcript of The Brazilian PV Market CELA final · Solar PV module&factory8 17PV& component& manufacturers...
About CELA
CELA – Clean Energy Latin America is a Brazil-based financialadvisory and consulting firm supporting renewable energy companiesinterested in investing in Latin America with:
- Equity fundraising,- Project finance structuring,- Mergers & Acquisitions,- Advisory for participating in energy auctions,- Investment and strategy consulting, and- Financial due diligence of projects.
We are specialists in solar PV, wind, bioenergy and small hydro
CELA Clients
Recent Track Record in PV (selected)
Clean Energy Solutions CenterFinance Expert
2015
DG Solar PV Business PlanConsultant
2015
BRL 1,777,192,717PV Auction
Financial Advisor
2015
Latin America DG Solar PV Strategy
Consultant
2015
BRL 869,743,453Wind AuctionFinancial Advisor
2014
Brazil Solar PV Market StudyConsultant
2014
Latin America PV Solar Business Plan
Consultant
2013
M&AFinancial Advisor170 MW PV
2015
DG Solar PV Business PlanConsultant
2016
UTILITYConfidential
DG Solar PV Business PlanConsultant
2015/16
M&AFinancial AdvisorCurrent mandate
2016
M&AFinancial AdvisorCurrent mandate
2016
Agenda
• The Brazilian Renewable Energy Market
• Utility-Scale PV
• Distributed Generation (DG)
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Brazil power market at a glance: large market, even larger growth potential
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Indicator
GDP (2015) US$ 1.77 trillion
Population (2012) 202,401,584
Installed capacity (2015) 140,272 MW
PV installed capacity 25 MW
Consumption (2015) 522,832 GWh
Residential tariff (2015)¹ R$579.78/MWh (US$ 166/MWh)²
Commercial tariff (2015)¹ R$567.80/MWh (US$162/MWh)²
Center West (CO)
South (S)
North (N)
North East (NE)South East (SE)
North
Population 8.5%
Consumption 6.8%
Average tariff (BRL 2015) 482.00
Average tariff (USD 2015) 137.71
Center West
Population 7.6%
Consumption 7.2%
Average tariff (BRL 2015) 545.13
Average tariff (USD 2015) 155.75South East
Population 42.2%
Consumption 51.1%
Average tariff (BRL 2015) 547.83
Average tariff (USD 2015) 156.52
South
Population 14.4%
Consumption 17.8%
Average tariff (BRL 2015) 541.65
Average tariff (USD 2015) 154.76
North East
Population 27.9%
Consumption 17.0%
Average tariff (BRL 2015) 466.59
Average tariff (USD 2015) 133.31
Source: ANEEL, 2015.¹ Prices include taxes, distributuion / transmission fees² Considered BRL3.50/USD
Brazilian power matrix shift: from hydro to PV
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90.8, 65%12.6, 9%
1511%
8.9, 6%
5.94.4%
32%
21%
0.0210%
00%
Hydro
Gas
Biomass
Oil
Wind
Coal
Nuclear
Solar
Flexible Capacity
12532%
11729%
4812%
4411%
369%
205%
41%
41%
10%
Source: BNEF, 2016.
140 GW 400 GW
Capacity mix, 2040Capacity mix, 2015
The Brazilian solar resource is exceptional;; its lowest irradiation is better than most of Europe’s highest• The annual mean of daily
horizontal global solarirradiation in any region ofBrazil higher than 1,500kWh/m2, much greater thanthose for the majority of theEuropean countries
• The maximum solarirradiation value is 2,372kWh/m2;; it occurs in thenorthern part of Bahia state
• The lowest global solarirradiation – 1,550 kWh/m2 –occurs on the North shore ofSanta Catarina
7 Source: ABINEE.
Brazil average annual irradiation (kWh/m2/day)
How will PV get from a few MW to 14GW in 2026 and 125GW in 2040?
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CLIENT
UTILITY
Solar.Company CLIENT Solar.Company
Rent /&Leasing&of PV&system Financed Sale of PV&system
Installation,.maintenance.and.monitoring
Monthly.payment
UTILITY
Installation,.maintenance.and.monitoring
Operation.Agreement.vs..Net.Metering
Operation.Agreement.vs..Net.Metering
Purchase.in.installments
New Business models for DG
Rising Power Tariffs
Fall$in$module$prices$4%CAGR$from$2015$to$2040$
-
20
40
60
80
100
120
140
160
180
200
Cen
ts U
SD/W
ProjectionHistorical
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
0.00
0.50
1.00
1.50
2.00
2.50
2015 2020 2025 2030 2035 2040
PV S
yste
m C
apex
(R$/
kWp)
Pow
er C
ost (
R$/
kWh)
Grid Parity Analysis - Residential Segment(Total Power Cost¹ vs. Solar DG Production Cost)
PV System Capex (R$/kWp) Power Cost - Bandeirante (R$/kWh)
Solar DG Production Cost (R$/kWh) Power Cost - CEMIG (R$/kWh)
Falling PV Costs Large Market / Growth
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Number of consumers per state/region, 2014
Commercial
Industrial
Residential
Center WestNorth North East South East South
New Products for DG
Pernambuco LER.2014 1º.LER.2015 2º LER.2015
Date Dez/2013 Out/2014 Ago/2015 Nov/2016
Registered 37;proj /;1,0GW 400;proj/10,7GW 382;proj /12,5GW 649;proj/ 21GW
Sold 5;proj /;92 MW 31;proj /;890 MW 30;proj/;834 MW 33;proj/ 929.MW
Ceiling Price R$250,00/MWh R$262,00/MWh R$359,00/MWh R$381,00/MWh
Avera.;Price R$242,66/MWh R$215,12/MWh R$301,79/MWh R$297,37/MWh
COD Jan/17 Out/17 Ago/17 Nov/18
Investment R$0,6 billion R$4,5.billion R$4,5.billion R$4,4.billion
Product
Contract+between+NewCo and+client:3 Rental3 Leasing+/+BOT3 Financed+sale,+
etc.
Contract+between+NewCo and+client:3 Rental3 Leasing+/+BOT3 Financed+sale,+
etc.
Contract+between+NewCo and+client:3 Rental3 Leasing+/+BOT3 Financed+sale,+
etc.
Location+of+net+metering+energy+
use
House+/+land+must+be+owned+or+leased+by+the+clientOther+locations+owned+by+the+client+but+within+same+concession+area
Condominium+areaApartments+/+houses+/+offices+owned+by+condominium+members+as+per+quotas
Apartments+/+houses+/+offices+owned+by+condominium+members+but+within+same+concession+area
PV+System
Equipment+may+be+owned+by+NewCo
Equipment+may+be+owned+by+NewCo
Equipment+may+be+owned+by+NewCo
Consumer+/+Client+(UC)
Client+(residence+/commerce/industry is+the+owner+of+the+project+UC+(power+bill)
The+condominiumis+the+UC+and+client
Need+to+prove+condominium+and++allotment
Consortium/Cooperative+is+the+UC+and+client
Clients+must+own+quota+in+the+consortium
Virtual(net(
metering
Self/
consum
ption
Condom
inium
Location+of+energy+generation
House+/+land+must+be+owned+or+leased+by+the+client
Generation+at+location+of+consumption
Condominium+area
Remote+area+allowed
Owner+of+UC+must+own+or+lease+land+where+generation+is+located
Business+Model
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Regular / Annual PV Auctions
Advancement of PV Sector in Brazil: net metering, tax incentives and PV auctions
2011-2012- ANEEL’s 1st PV R&D- RN 482: net metering
2013- Pernambuco1st PV auction in Brazil, 92MW in PPAs - Solar stadiums
2014- BNDES 1st PV financing line- 1st federal PV auction contracts ~1GWp in PPAs- Cumulativeinstalled PV capacity: 15MW
2015- RN 687: virtual net metering- 2,000 DG installations - 2 PV auctions contract ~2GWp- Convênio ICMS 16/2015 : tax breaks - Other tax incentives such as PIS/Cofins Law 13.169/15- Cumulativeinstalled PV capacity: 40MW
2016- 2 PV auctions:July 2016 and October 2016- Canadian Solar PV module factory -17 PV component manufacturers present in Brazil - Cumulativeinstalled PV capacity: 150MW3GWp underconstruction
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Agenda
• The Brazilian Renewable Energy Market
• Utility-Scale PV
• Distributed Generation (DG)
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Pernambuco LER 2014 1º LER 2015 2º LER 2015
Date Dez/2013 Out/2014 Ago/2015 Nov/2016
Registered 37 proj / 1,0GW 400 proj/10,7GW 382 proj /12,5GW 649 proj/ 21GW
Sold 5 proj / 92 MW 31 proj / 890 MW 30 proj/ 834 MW 33 proj/ 929 MW
Aver. Price R$242,66/MWh R$215,12/MWh R$301,79/MWh R$297,37/MWh
Aver. Price USD69/MWh USD61/MWh USD86/MWh USD85/MWh
COD Jan/17 Out/17 Ago/17 Nov/18
Investment R$0,6 billion R$4,5 billion R$4,5 billion R$4,4 billion
Investment~R$14 billion
~3GW have PPAs from the Brazil PV auctions
• 2 PV auctions announced in 2016: July (~12 GW registered) and October• A further 1 to 2GW of PPAs are expected to be contracted via auction everyyear
11 Source: CCEE, 2016.
The main winners of the PV auctions in Brazil: global PV players
630MW
557MW
330MW279MW
270MW200MW
150MW
149MW90MW
90MW
29#
53#
10#
30#
150#
270#
100#
90#
40#
210#
30#
60#
150#
184#
410#
30#
90#
120#
200#
119#
90#
280#
Rio#Alto#EnergiaSteelcon
Kroma/ExitoFRV
SolairedirectCobra
SunedisonERenovaCanadian#Solar
Outros#(<90MW)Enel#Green#Power
Pernambuco LER#2014 1º#LER#2015 2º#LER#2015
12Source: CCEE, 2016.
Agenda
• The Brazilian Renewable Energy Market
• Utility-Scale PV
• Distributed Generation (DG)
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Total Brazilian PV Installed Capacity May Reach 110 GW by 2040;; 75% in DG
Source: PDE 2024, PCE 2050, ANEEL, 2015 e Bloomberg, 2015.
• Brazil’s PV installed capacity will grow 4,059times between 2015 and 2040 (Bloomberg)
• PV DG growth:• 80% CAGR until 2023 (Ministry of Mines
and Energy)• 39% CAGR until 2040 (Bloomberg)• 13GW of new DG PV capacity added in the
next 10 years
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28,000
82,000
Brazil PV Installed Capacity, 2040
25% utilityscale75% DG
TOTAL= 110.000 MW
37 56 79 148 350 793 1,649
2,977
4,901
7,351
10,319
13,729
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Brazil DG PV installations (MW)
Annual
Cumulative
Brazil has 66MM residences, 5.6MM commerce and 0.57MM industries that use power from the grid today;; SE region is the largest market
15Source: ANEEL, 2015.
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Number of consumers per state/region, 2014
Commercial
Industrial
Residential
Center WestNorth North East South East South
Current local regulation (RN 687) allows the following business models:
Product
Contract between NewCo and client:- Rental- Leasing / BOT- Financed sale,
etc.
Contract between NewCo and client:- Rental- Leasing / BOT- Financed sale,
etc.
Contract between NewCo and client:- Rental- Leasing / BOT- Financed sale,
etc.
Location of net metering energy
use
House / land must be owned or leased by the clientOther locations owned by the client but within same concession area
Condominium areaApartments / houses / offices owned by condominium members as per quotas
Apartments / houses / offices owned by condominium members but within same concession area
PV System
Equipment may be owned by NewCo
Equipment may be owned by NewCo
Equipment may be owned by NewCo
Consumer / Client (UC)
Client (residence /commerce/industry is the owner of the project UC (power bill)
The condominiumis the UC and client
Need to prove condominium and allotment
Consortium/Cooperative is the UC and client
Clients must own quota in the consortium
Virtual net
metering
Self-
consum
ption
Condom
inium
Location of energy generation
House / land must be owned or leased by the client
Generation at location of consumption
Condominium area
Remote area allowed
Owner of UC must own or lease land where generation is located
Business Model
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Such expansion will require USD 90 billion in investments in DG PV projects in Brazil by 2040
Source: PDE 2024, PCE 2050, ANEEL, 2015 e Bloomberg, 2015.Exchange rate used in this slide is different from the other slides = R$3.1/USD.
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• Investment of BRL$950 Bn inelectricity in Brazil (PCE 2050)
- BRL138 Bn or 14,5% of investmentin PV in Brazil (PCE 2050)
• USD90 Bn of investment in DG PVin Brazil by 2040 (Bloomberg)
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2
4
6
8
10
2015 2020 2025 2030 2035 2040
Annual investment in DG PV in Brazil (USD Bn)
US
$ bi
llion
Av. Cidade Jardim 400, 7º. e 20º andaresSão Paulo, 01454-000
+55 11 3818 0998www.celaexperts.com
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