Creating and Sustaining Renewable Energy Markets
Creating and Sustaining Renewable Energy Markets The Business Challenges and Opportunities of Energy and Water Sustainability Washington, DC October 13, 2008
Renewable Energy Imperative “ It’s about national power. Everything America (or any country) can do to go green today will make it stronger, healthier, more secure, more innovative, more competitive, and more respected. What can be more patriotic, capitalistic and geostrategic than that?” Thomas Friedman, “Hot, Flat and Crowded” 10/16/2009
2
Business and Industry
Government R&D; Financial incentives; Inform; Educate; Regulate
Legislators/R egulators
Enact and enforce laws
Educational Institutions
10/16/2009
Create and market products and services; R&D
Environmentally Environmentall y Sustainable Markets Sustainable Markets
Create demand; Purchas e products
Consumers
Valuation and investment; Provide capital
R&D; Educate workforce
Non-Profit Organization s Educate; Inform; advocacy
Financial Sector
3
Drivers of Renewable Energy Markets • Government: – – – –
State RPS – 29 states enacted State system benefits funds & carbon auctions Federal ARRA spending > $70B Federal tax credits – 8 yr extension ITC; 3 yr PTC; 30% grant; utilities eligible for ITCs;
• Private Equity - Venture capital up: – $836 M 59 deals 1st Qtr 2009 – $1.2 B 85 deals 3rd Qtr 2009
• Sustainability initiatives • Consumer demand 10/16/2009
4
State Renewable Portfolio Standards
10/16/2009
29 states and DC have an RPS
5
What Is Market Success? • Brazil - 2008 eclipsed any other major market; 50% of its transportation fuels bio-ethanol • Denmark – 15+% electricity generation wind • Iowa – 15% electricity generation wind; up 5% 2006 • US – 8% transportation fuel from ethanol • China – 20% new hot water heater sales solar 10/16/2009
6
Challenges of RE Growth • Stock market declines affect IPO markets – 2007 : 272 IPOs; Clean tech stocks up 60% – 2008: 43 IPOs ; Clean Tech stocks down 60%
• Tightened credit markets • Cumbersome federal procurement process • Increasing NIMBY and regulatory challenges • Escalating cost of materials • Intermittent nature solar & wind 10/16/2009
7
RE Growth, by Resource (Billions)
Biofuels Solar Wind TOTAL
2007
2008
2018
$25.4
$34.8
$105.4
20.3
51.4
139.1
30.1
29.6
80.6
75.8 40%
10/16/2009
115.9
325.1
35%
Source: Clean Edge, Clean Energy Trends 2008, Clean Energy Trends 2009 8
Future Drivers • “Smart Grid” – – accurate forecasting of RE – infrastructure investments – • “Green Power Express”; offshore wind
• Utility scale energy storage • Increase in micro grids • RE projects in developing nations • Federal RPS – 25% by 2025 • Federal carbon cap and 10/16/2009 trade
9
CONTACT INFORMATION Ellen Lutz 215-242-1424 [email protected]
10/16/2009
10
Renewable Energy Imperative “ It’s about national power. Everything America (or any country) can do to go green today will make it stronger, healthier, more secure, more innovative, more competitive, and more respected. What can be more patriotic, capitalistic and geostrategic than that?” Thomas Friedman, “Hot, Flat and Crowded” 10/16/2009
2
Business and Industry
Government R&D; Financial incentives; Inform; Educate; Regulate
Legislators/R egulators
Enact and enforce laws
Educational Institutions
10/16/2009
Create and market products and services; R&D
Environmentally Environmentall y Sustainable Markets Sustainable Markets
Create demand; Purchas e products
Consumers
Valuation and investment; Provide capital
R&D; Educate workforce
Non-Profit Organization s Educate; Inform; advocacy
Financial Sector
3
Drivers of Renewable Energy Markets • Government: – – – –
State RPS – 29 states enacted State system benefits funds & carbon auctions Federal ARRA spending > $70B Federal tax credits – 8 yr extension ITC; 3 yr PTC; 30% grant; utilities eligible for ITCs;
• Private Equity - Venture capital up: – $836 M 59 deals 1st Qtr 2009 – $1.2 B 85 deals 3rd Qtr 2009
• Sustainability initiatives • Consumer demand 10/16/2009
4
State Renewable Portfolio Standards
10/16/2009
29 states and DC have an RPS
5
What Is Market Success? • Brazil - 2008 eclipsed any other major market; 50% of its transportation fuels bio-ethanol • Denmark – 15+% electricity generation wind • Iowa – 15% electricity generation wind; up 5% 2006 • US – 8% transportation fuel from ethanol • China – 20% new hot water heater sales solar 10/16/2009
6
Challenges of RE Growth • Stock market declines affect IPO markets – 2007 : 272 IPOs; Clean tech stocks up 60% – 2008: 43 IPOs ; Clean Tech stocks down 60%
• Tightened credit markets • Cumbersome federal procurement process • Increasing NIMBY and regulatory challenges • Escalating cost of materials • Intermittent nature solar & wind 10/16/2009
7
RE Growth, by Resource (Billions)
Biofuels Solar Wind TOTAL
2007
2008
2018
$25.4
$34.8
$105.4
20.3
51.4
139.1
30.1
29.6
80.6
75.8 40%
10/16/2009
115.9
325.1
35%
Source: Clean Edge, Clean Energy Trends 2008, Clean Energy Trends 2009 8
Future Drivers • “Smart Grid” – – accurate forecasting of RE – infrastructure investments – • “Green Power Express”; offshore wind
• Utility scale energy storage • Increase in micro grids • RE projects in developing nations • Federal RPS – 25% by 2025 • Federal carbon cap and 10/16/2009 trade
9
CONTACT INFORMATION Ellen Lutz 215-242-1424 [email protected]
10/16/2009
10
