Developing solar in emerging markets
Swedbank Conference March 17, 2016
Our values
- Predictable
- Driving results
- Change makers
- Working together
South Africa: Solar is now cheaper than coal
The 40 MW Linde plant in South Africa
Rapid price decline boosts volume growth
Total system cost - 1 MW (USD/Watt)*
Annual new installed capacity per year
(*) Capex will vary from market to market depending on system size, market maturity, bankability etc
3 Source: Bloomberg New Energy Finance, Q4 2015 PV market outlook
* Real values in EUR 2014, bandwidth represents different scenarios of market, technology and cost development. PV plant locations between south of Germany (1,190 kWh/kWp/year and South of Spain (1,680 kWh/kWp/y) US\$/watt)
Significant market growth ahead
Disruptive growth within PV, wind and storage required to meet IEAs 2 degree scenario achievable
Source: IEA
Technology is key – battery cost is dropping
Source: Pike Research
Storage will increase the market for large-scale PV
Export / generation capacity (% of installed MWp) Energy stored (hours)
-60 -40 -20 0 2 0 4 0 6 0 8 0 100 -3 -2 -1 0 1 2 3 4 5 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 Export grid PV generation Battery charging / discharging
Source: Bloomberg New Energy Finance
FT March 16: 90 % of new electricity was renewable
March 16
Scatec Solar – a leading player in utility scale PV
The 75 MW Dreunberg plant in South Africa
Scatec Solar Develops, Builds, Owns & Operates Solar Plants for 20 Years
A growing and diversified asset portfolio
A solid project funnel – basis for further growth
Our holistic approach is the recipe for success
Key ingredients:
- Market understanding and screening
- Access to financing
- Partnerships
- Regulatory framework and legal set up
- Project development and execution
- Operation and asset management
- Corporate Social Responsibility
- Security
Strong partners – provides capital and mitigates risk
Norfund partnership:
- Project development and investment partnership
- Norfund & KLP equity co-investors in key markets
IFC partnership:
• Project development and investment partner in selected countries in West Africa and Asia
Project finance partners
- Multilateral development banks and institutions providing long term non-recourse project finance
- Standard Bank and partners providing project finance to plants in South Africa
Key benefits:
- Access to lower cost of capital
- Expanded network for project origination
- Risk mitigation representing the Norwegian government, the World Bank and government partners
Strong community relations – vital for success
- Economic development often a critical part of the renewables program
- Strong community relations key for successful execution
- Job creation is the most important factor both directly through construction and operation jobs
- In South Arica Economic Development commitments over 20 years are made as part of the bid documents
- Existing Scatec Solar projects total community contributions in South Africa totals NOK 1.2 billion over a 20 year period; a significant contribution to the scarcely populated regions
- Specialist advisors engaged to manage CSR and ED programs
Africa: Lack of power holds back economic growth
Key facts
- 54 countries and population 1.1 billion
- Sub-Saharan Africa GDP equals Netherlands, but includes 7 of the 10 fastest growing economies in the world
- Total power production in Sub-Saharan Africa (ex South Africa) equals Norway's power production
- 600 million people without power
COP21 in Paris: Also a leap forward for renewables?
- Climate Finance, e.g. the UN Green Climate Fund, can speed up deployment of renewables in developing countries
- Scatec Solar: Strategy and Programme for UN accreditation(CDM) of our solar power plants in developing countries
- Current Scatec Solar projects save more than 600 000 tons of CO2 per year, to reach more than 2 million in 2018
- Norwegian developers and finance institutions (e.g GIEK, Norfund) can play a vital role in accelerating renewable investments in the south; partnering with UNs Green Climate Fund
- Hydro and solar investments by Norwegian IPPs will open opportunities for Norwegian suppliers
Scatec Solar is well positioned for the future
- Diversified asset base with stable cash generation for the next 20-25 years
- Solid project pipeline for further growth over the coming years
- Track record and business model for complex emerging solar markets
- Emerging economies take advantage of lower renewables prices
- Lower oil and gas prices have limited impact on the appetite for renewables
- Market transformation opens up for new business offerings
Thank you
The 60 MW Agua Fria plant in Honduras