Penn State University Smeal College of Business Center for Strategic and International Studies Washington, DC October 13, 2009
Opportunities
2009
GE Company Proprietary
2030
GE Company Proprietary
A Changing World … Growing population & energy density
Cost of energy … fuel supply & demand
Increasing environmental requirements
Driving power generation technology
Escalating security concerns
5 GE Company Proprietary
Global Renewable Energy Targets North America U.S. … State RPS (35 + DC) Canada … Provincial targets (9)
Europe EU … 20% by 2020
China 10% by 2010 20% by 2020
India Mid East & Africa Latin America Chile … 10% by 2024
Morocco … 20% by 2012 Jordan … 10% by 2012 Egypt … 20% by 2020
14 GW wind by 2012
Asia Pacific Japan … 11% by 2030 Australia … 20% by 2020 New Zealand … 90% by 2025
Targets in 73 countries worldwide … 400 GW Wind & 80 GW Solar … 800,000 wind turbines + 400 million solar modules Copyright 2009 General Electric Company
Renewables ... A global non-linear shift Global Wind & Solar PV annual installations CAGR
(GWs)
The world today ~30
% 25 Solar PV 4 Wind '00
R G CA
Solar PV 36%
1% shift toward renewables Wind 23%
17
~40,000 wind turbines ~500,000,000 solar panels
8
'03
• 4,600 GW installed
'06
'09
Wind & Solar … Zero fuel cost, zero CO2 … Massive opportunity 77 7
Source: REN21 2008, EER, GE Marketing GE Company Proprietary
Challenges
Policy … Foundation for wind growth Manufacturing, materials & labor
Technology Transmission & integration
Siting & environment Electricity markets
Five key components … policy is the foundation 9 GE Company Proprietary
Policy … Foundation for wind growth Manufacturing, materials & labor
Encourage capacity expansion
Technology Reward performance
Transmission & integration
Siting & environment Streamline permitting
Motivate grid investment
Electricity markets Enable new revenue streams
10 GE Company Proprietary
’08 financial crisis shocked wind market 32 (view as of 8/08)
Annual wind installs (GW) Asia EU Americas
~5,000 WTG correction
27
22 (19%)
20
(13%)
15
Market inhibitors • $55B ’08 industry poised for $70B ’09 … drops to $40B • Financial crisis impacting all regions … tax equity compounding US drop • 1st global wind slowdown in a decade … 30% excess equipment “overnight” • US/Europe forecast ’09-11 wind & solar installs 260% of load growth (67 TWh)
11 7
7
8
(12%)
8
4 (33%) '00
'01
'02
'03
'04
'05
'06
'07
'08
'09 Est.
Policy accelerators • Stimulus $ (Treasury grant, LGP, Mfg ITC) • National RES • Carbon price
'09
New policies required to restore US growth 11 GE Company Proprietary
Waxman-Markey RES … designed to come in 3rd 1st
2nd
Europe
China
US
Fredrik Reinfeldt EU President
Hu Jintao PRC President
Barack Obama US President
EU Renewable Energy Directive
Wind installed base (GW)
2.3MM wind job years
National Energy Administration/NDRC* “State New Energy Revitalization Plan”
GW 5 16
1.5MM wind job years
+
GW 8 13
150
65 2020
GE actions
2008
1.3MM wind job years
GW 0 0 +1
125
25
12 2008
American Clean Energy & Security Act “Waxman-Markey”
*Proposed increase to 100 GW target
230
+
3rd
2020
Immediate: Advocate for higher near-term targets
2008
2020
Future: Strengthen RES in future revisions
75% of wind industry could be outside U.S. 12 GE Company Proprietary
Technologies & Strategies
GE and Wind … Combining Strengths GE Energy Financial Services