Bloomberg New Energy Finance, 2004-2010

Food for Thought, Frankfurt

Energy Smart Technologies
2 November 2010
Albert Cheung
2 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
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3 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Towards a smart energy system
Source: Bloomberg New Energy Finance
Bulk generation Grid-scale storage
Nuclear
Wind
Coal
Solar
New energy mix
Gas
Other
renewables
Pumped
hydro
Flywheel Battery
Transmission grid
Local distribution grid Smart building and home
Interconnection
to super-grid
Micro-grid
Distributed
wind, solar,
CHP, other
Distributed
storage
+ -
Heat pumps &
district heating
Multi-way flows &
distributed resources
Plug-in
EV
Active demand
side
Smart
meter
Energy
management
system
Smart
HVAC
Smart
appliances
Smart EV
charging
On-site
storage
Micro-
generation
Compressed
air
Smart grids
CCS
Transmission
substations
Transmission
substations
Distribution
substations
Smart transmission Smart transmission
Smart
distribution
4 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
300+ smart grid projects worldwide
CANADA
Universal smart
metering in Ontario
USA
200 projects and pilots
$4bn stimulus package
EUROPEAN UNION
80% smart metering
by 2020; Over 50
projects and pilots
BRAZIL
Proposed universal
smart metering
mandate; large-scale
pilots
CHINA
Strong Smart Grid with wide
area measurement systems
28m smart meters by 2010
SOUTH KOREA
J eju Island pilot;
Nationwide smart grid
by 2030
SINGAPORE
Smart metering
pilot 2011-12
AUSTRALIA
Smart metering in Victoria;
Newcastle Smart Grid,
Smart City project
UK
100% smart metering
by 2020; GBP 500m
for Low Carbon
Networks
JAPAN
Multiple pilots
5 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
China, US and EU cumulative smart meter roll-outs
(millions of smart meters)
Source: Bloomberg New Energy Finance Note: figures are the number of installed smart meters at the end of the year
0
50
100
150
200
250
300
350
2010 2011 2012 2013 2014 2015
US EU-15 China
6 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
US stimulus: Smart Grid Investment Grant spending to date
($m)
Souece: DOE, Bloomberg New Energy Finance. Note: Data as at 15 October 2010.
-
20
40
60
80
100
120
140
160
180
200
0 10 20 30 40 50 60 70 80 90 100
Money outlaid as of 15 October Award values
Projects (by size of award)
Only
12% of
total
$3.4bn
7 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
EU-15 smart meter deployments and potential home energy
management market, 2010-2016e
Source: Bloomberg New Energy Finance. Note: Based on national plans and announced smart meter deployments. Assumes an accelerated smart meter roll-out by 2016 in the UK.
Low and high cases based on HEM penetration rates that lead to 24% and 45% penetration of HEM systems among AMI-enabled households by 2016 respectively.
Revenues are based on a basket of HEM items as in the US case, but with a greater emphasis on IHDs.
million meters EUR m
-
500
1,000
1,500
2,000
2,500
0
20
40
60
80
100
120
140
160
2010 2011 2012 2013 2014 2015 2016
Others
Finland
Denmark
Sweden
Portugal
Netherlands
Spain
United Kingdom
Italy
France
Germany
HEM market size - low case
HEM market size - high case
8 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Home energy management: value chain and selected players
Communications
& components
In-home display
HEM software /
platform
Web or other
portals
Smart devices &
appliances
9 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Illustrated partnerships between HEM vendors and AMI companies
Source: Bloomberg New Energy Finance. Note: Light blue companies are players in AMI, dark blue are HEM vendors. Gridpoint and Silver Spring are highlighted as they have
recently acquired energy management software companies. Partnerships are selected and non-exhaustive. Partnerships between AMI companies are not shown. Silver Spring
Networks is also partnered with Comverge, Cisco and Digi International. Microsoft Hohmis also partnered with Blue Line Innovations.
Itron
Energy-
Hub
Open-
Peak
GE
Energy
Cisco
Comverge
Tendril
Landis+
Gyr
Elster
Current
Silver
Spring
Networks
GE
Appliances
Digi
Inter-
national
Ember
Control4
Gridpoint
Ecobee
EnerGate
Trilliant
Blue Line
Innovations
Onzo
Echelon
Honeywell
Google
Power-
Meter
AlertMe
Current
Cost
TED
Microsoft
Hohm
10 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Regulation changes everything
Vertically
integrated
De-
regulated
De-
regulated
De-
regulated
Vertically integrated utilities
No competition
Key hurdle is regulatory approval
Unbundled network and retail
Network operator responsible for metering
Retail open to competition
High levels of competition
Retail suppliers responsible for smart meters
Central communications provider
No clear policy
400 distribution networks
Each responsible for its meters
Infrastructure focus
Regulator as proxy for consumer
Cost recovery heavily regulated
Metering is regulated
New services separated from meters
Competition for cool technology
Competition drives metering costs down
New services could come from utilities
or from third parties
Uncertain outcome
Roll-out could be chaotic
M
o
r
e


o
p
e
n
,

l
e
s
s

r
e
g
u
l
a
t
e
d
11 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
US and UK smart metering business cases
US smart grid projects: benefits breakdowns Benefits of UK home smart metering, GBP bn
Source: DECC; Ofgem.
Source: Sacramento Municipal Utility District; Pacific Gas and Electric Company;
Portland General Electric.
52%
46%
60%
48%
40%
40%
14%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SMUD PG&E Portland General
Electric
Demand response Operational Meter reading
0
2
4
6
8
10
12
14
16
Energy/
carbon
savings
Load
shifting
Meter
reading
Reduced
inquiries /
customer
overheads
Other Total
12 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Baltimore Gas and Electric smart grid business case
Source: Baltimore Gas and Electric.
408
1801
204
661
61
452
580
104
166
641
194
0
500
1,000
1,500
2,000
2,500
3,000
13 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Demand response becoming entrenched in the US
DR growth in US organised markets (GW)
DR penetration in PJ M capacity market and
clearing prices
Source: PJ M Interconnection.
Note: Numbers in brackets denote megawatts clearing the RPM base residual auction.
Clearing price for 2012/2013 would have been $178.78/MW-day without DR.
Source: Bloomberg New Energy Finance analysis; ISO/RTO Council; respective
ISO/RTOs; FERC; other public sources.
(536MW)
(893MW) (939MW)
(1,365MW)
(7,047MW)
(9,282MW)
0
20
40
60
80
100
120
140
160
180
200
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
DR penetration in RPM RPM clearing price
% DR penetration (bars) USD clearing price (line)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2006 2007 2008 2009 2010e 2011e 2012e
Total
projection -
optimistic
Total
projection -
conservative
SPP
PJ M
NYISO
MISO
ISO-NE
ERCOT
CAISO
14 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Emerging technologies for grid-scale energy storage (MW)
Source: Bloomberg New Energy Finance
116,918
400
3
61
365
40
15
12
52,284
1,296
43
1,625
82
30
1
10
100
1,000
10,000
100,000
1,000,000
Pumped
hydro
CAESFlywheels PbA NaS Ni-Cad Li-ion Flow
batteries
Planned / In
construction
Installed
15 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
CAES
32%
Battery:
Li-ion
20%
Flow
batteries
17%
Flywheel
15%
Battery:
Unknown
12%
Battery:
Sodium-ion
3%
Battery:
Lead
carbon
1%
Total = $185m
Industry has not yet picked a winning technology
US DOE Smart Grid Demonstration Grants
Power Storage
US DOE ARPA-E grants for storage
(GRIDS programme)
Source: US Department of Energy, Bloomberg New Energy Finance Note: GRIDS
stands for Grid-scale Rampable Intermittent Dispatchable Storage Source: US Department of Energy, Bloomberg New Energy Finance
Battery - flow
31%
Flywheel
16%
Battery - metal
air
16%
SMES
15%
Battery - zinc
manganese
oxide
11%
Fuel cell -
regenerative
8%
CAES
3%
Total = $27.7m
16 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Electric vehicles gathering momentum
Global announced EV production
US forecast EV penetration
(% of light vehicle sales)
Source: Bloomberg New Energy Finance. Source: Bloomberg New Energy Finance.
0%
5%
10%
15%
20%
25%
2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
BEV PHEV
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2010 2011 2012 2013
BEV PHEV
17 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
0.3
0.4
0.1
0.4
0.3
0.4
0.5
0.4
0.4
0.9
0.4
0.5
0.5
0.8
0.6
1.0
0.6
0.9
0.6
0.4
0.5
0.5
1.7
0.6
1.2
1.3
0.8
0.1
0.1
0.1
0.1
0.2
0.4
0.4
0.3
0.2
0.1
0.1
0.4
0.2
0.1
0.2
0.2
0.2
0.2
0.4
Q1
04
Q2
04
Q3
04
Q4
04
Q1
05
Q2
05
Q3
05
Q4
05
Q1
06
Q2
06
Q3
06
Q4
06
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
Digital energy
Other energy smart technologies
Four-quarter running average
New financial investment in EST companies
Q1 2004 Q3 2010 ($bn)
Source: Bloomberg New Energy Finance. Note: Total values include estimates for undisclosed deals.
Project investments are excluded here. Other energy smart technologiesincludes power storage, fuel cells, and energy efficiency in buildings, transportation and industry.
18 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
M&A deals in digital energy H1 2003 to H2 2010 (to date)
Source: Bloomberg New Energy Finance. Note: H2 data as at 19 October 2010.
GE SNC-Lavalin ECS
Cisco Arch Rock
Constellation Energy - CPower
2010 H2
M&A
highlights:
Siemens Site Controls
Power-One Fat Spaniel
GE Opal Software
0
1
2
3
4
5
6
7
8
9
H1
2003
H2
2003
H1
2004
H2
2004
H1
2005
H2
2005
H1
2006
H2
2006
H1
2007
H2
2007
H1
2008
H2
2008
H1
2009
H2
2009
H1
2010
H2
2010
to date
M&A deals Yearly average
Q3
Q4
19 Energy Smart Technologies, Frankfurt Food For Thought, 2 November 2010
Bloomberg Leadership Forum Voting Result:
Which scenario is the most likely for the smart grid industry in 2020?
73%
16%
11%
0%
Today's incumbents dominate, after
acquisitions
Today's innovators leaders in
segments
Today's innovators competitive in
multiple segments
Today's industry incumbents
dominate
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Energy Smart Technologies
Frankfurt Food For Thought
Albert Cheung
acheung89@bloomberg.net