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Business and regulatory challengesand solutions with respect to private sector investments in RE
Accra, Renewable Energy Fair
8 October 2019
1. By number of customers. Publicly owned operators not included
2. By installed capacity. Includes managed capacity for 4.2 GW
3. It includes nuclear
4. Includes customers of free and regulated power and gas markets
2
1st network operator1
World’s largest private
player2 in renewables
Largest retail customer
base worldwide1
73 mn end users
64 mn customers4
43 GW capacity2
46.5 GW capacity3
5.7 GW demand response
Enel Group IntroductionLeader in the new energy world
USA
5 GW
Canada
0,1 GW
Spagna
6,5 GW
Italia
14,5 GW
Grecia
0,3 GW
Romania
0,5 GW
Messico
2,1 GW
India
0,2 GW
Australia
0,3 GW
Sud Africa
0,5 GW
Brasile
2,5 GW
Colombia
3,2 GW
Peru
1,1 GW
Cile
4,7 GW
Argentina
1,4 GW
Guatemala
0,2 GW
Panama
0,4 GW
Costa Rica
0,1 GW
Marocco
Russia
Zambia
Ethiopia
Germany
Indonesia
Kenya
Singapore
3Managed capacity (GW) 10.6 3.7 28.1 0.9
Key figures 2018
Key financials (€bn)
Consolidated
Capacity (GW)
Production (TWh)
EBITDA
Opex
Maintenance capex
Growth capex
2018
39.2
99.1
4.5
1.4
0.3
2.9
Consolidated capacity (GW) 8.2 2.3 27.8 0.8
43.4
108.4
Managed
Hydro SolarWindGeo
Global Footprint
Enel Green Power
Countries with advanced stage of development
Countries of presence3.3
Technology Focus: Proven Renewables
Wind Onshore
Solar Photovoltaic
Geothermal Energy
Hydroelectric
Biomass
Innovation: the key to compete
Storage
Offgrid systems
Hybrid Solutions
Solar Home System
Enel Green Power’s technologies
Marine Energy
EGP is focused on Mature Technologies… …and investigates Innovative Solutions
Market features to attract investorsThe Regulatory perspective - Africa
Source: Poyry, What does it take to accelerate RES Investments in Africa, 2019
1.Openness
2.Attractiveness
3.Readiness
Dim
en
sio
n
ch
ara
cte
risti
cs Assess national
commitment towards
RES development and
openness of renewable
market to private sector
investments
Assess supporting
policies and
instruments to promote
the development of
renewable energy
sources and ensure
attractiveness of
renewable market for
private investors
Assess the readiness of
national power market
to efficiently integrate
and manage increasing
capacities of variable
renewable generation
Regulatory
Dimensions
To
pic
s
Energy strategy
Market framework and
governance
Investment regulation
Production-based
supporting schemes
Investment-based
supporting schemes
Cost reflective electricity
prices
Network development
regulation
Routes-to-market
System Operation
regulation
Grid Connection regulation
Investor perspective
Market features to attract investors
6
The Regulatory perspective - Ghana
…further
enhanced by
Energy policy with specific RES targets for
power generation. Detailed and solid sector
masterplan.
Presence of IPPs and unbundling started
No limitation on foreign equity and equal
treatment of foreign investors
Formal adoption in national legislation;
Add one-stop-shop for permitting and clear rules
for land access
Open
The existing
advantages…
Market features to attract investors
7
The Regulatory perspective - Ghana
Attractive
FiT and RES quota obligations in place
Tenders
Fiscal incentives such as import duty and VAT
exemptions on solar PV equipment
Enforcing regulations
Implement a formal auction program
Cost-reflectiveness of electricity tariff
…further
enhanced by
The existing
advantages…
Market features to attract investors
8
The Regulatory perspective - Ghana
Ready
Network development plan considering RES
integration;
Multiple routes-to-market (dedicated off-taker,
bilateral PPAs, net-metering)
Publicly available grid code
Grid connection procedures and costs are
defined and plublicly available and include
priority of access for RES
Implementation of wheeling and net-metering through
secondary legislation
Clearer and cost-based remuneration mechanism for
TSO
Priority of dispatch for RES
Curtailment remuneration
…further
enhanced by
The existing
advantages…
Regulatory framework is fairly
advanced, however lack of
adequate supporting policies for
RES limits market attractiveness
for RE-IPPs
Market features to attract investorsThe Regulatory perspective - Ghana
Source: Poyry, What does it take to accelerate RES Investments in Africa, 2019
Why choosing Renewable EnergyDrivers for RES in a situation of overcapacity
Demand growth: Ghana is experiencing a steady GDP growth and the current
overcapacity will not be able to satisfy increasing demand.1
38%
1%
29%
32%
Hydro Solar Wind Biomass Geothermal
Marine Coal Gas Oil NuclearTotal RES
Ghana – Electricity Market OverviewKey Figures 2018-2030
Source: EGP estimate, UN dataset, Enerdata
8 9
11 12
13
14
18
22
3031
34
38
0
8
16
24
32
40
0
5
10
15
20
25
2018 2020 2025 2030
Mln peopleTWh CAGR
2020-30
Electricity
Demand
4,4%
Population
2,0%
RES
Production
3,7%
Production 2017
Capacity 2017
RES
share
Electricity
Demand
Pro Capita
61% 60% 64% 56%
0,4
MWh
0,5
MWh
0,5
MWh
0,6
MWh
GDP is expected to grow by 6,8% year-on-year up to 2023
Production mix is dominated by gas and hydro
11
40%
54%
6%
14 TWh
4,1 GW
40%
39%
8 89 9
1 2111
8 9
11 12
13 14
18
22
2018 2020 2025 2030
+1,9 GW forecasted by 2030
+0,8 GW Solar PV Utility
+0,3 GW Solar PV Distributed
+0,5 GW Wind Onshore
RES capacity evolution - GW RES Production evolution – TWh
2 2 2 2
11
2
2
3
3
2018 2020 2025 2030
Hydro PV Utility PV Distributed CSP Wind Onshore
Wind Offshore Bioenergy Geothermal Marine
+0,5 GW
+0,9 GW
+0,5 GW
Source: EGP Internal Analysis, Enel electricity demand scenario
Electricity Demand % RES Production on Electricity Demand
56%64%60%61%
Ghana RES Development ScenarioCapacity and Production
12
Why choosing Renewable Energy
Demand growth
13
Drivers for RES in a situation of overcapacity
1
2 Financial and energy security concerns.
RES are cheap.
RES plant are the best substitutes for technological offset of ageing thermal generators.
Energy security: RES help reducing fossil fuel dependence from neighboring countries. Also
in case of domestic resource, gas and oil price are strictly dependent on market
fluctuations. Hydro generation strongly depends on rainfall. Diversifying the energy mix by
including RES increases energy security.
RES and to reduce if not avoid tariff subsidies making tariffs more cost-reflective. Expensive
electricity is a major inhibitor to socio-economic development. RES will allow to decrease
the energy bill.
0
20
40
60
80
100
120
140
160
180
200
220
Solar PV Wind Onshore Solar PV Wind Onshore Solar PV Wind Onshore
2018 2025 2030
Economic
Choice
Average LCOE €cent/kWh – Global Average
Current Coal and Gas
Renewables - What is behind this growth?
Wind
down
~50%
PV down
>80%
Why choosing Renewable Energy
Demand growth
17
Drivers for RES in a situation of overcapacity
1
2 Financial and energy security concerns
3 Time-to-market: years can pass from the discovery of gas resource to the operation of a
gas plant, whilst it takes less and slightly more than 1 year for a PV and wind plant
respectively.
Technological scalability: do not think about a single, small PV plant, but think in the
perspective of a pipeline of projects that will promote economic development of a nation in
the long-term (job creation, smart extension,…)
0
20
40
60
80
100
120
140
160
180
200
220
Solar PV Wind Onshore Solar PV Wind Onshore Solar PV Wind Onshore
2018 2025 2030
Economic
Choice
Easiest
to do
PV & Wind
8 ÷ 12 months
CCGT
16 ÷ 20 months (open cycle)
26 ÷ 30 months (closed cycle)
Coal
40 ÷ 60 months
Nuclear
120+ months
Average LCOE €cent/kWh – Global Average
Current Coal and Gas
Renewables - What is behind this growth?
Why choosing Renewable Energy
Demand growth
19
Drivers for RES in a situation of overcapacity
1
2 Financial and energy security concerns
3 Time-to-market and technological scalability
4 Sustainability concerns: history is going towards renewable energies; the energy
transition is a fact. International investors are investing more and more in RES. Also
traditional oil&gas companies (ENI, Shell, Statoil,…) are dedicating part of their capex to
RES. RES are environmental friendly and are the perfect match for CSV objectives.
0
20
40
60
80
100
120
140
160
180
200
220
Solar PV Wind Onshore Solar PV Wind Onshore Solar PV Wind Onshore
2018 2025 2030
Who is leading the transition
Governments
Corporations
Wise and
sustainable energy
strategy
Innovative and
sustainable growth
Conscious and
sustainable value
chain
Utilities
Economic
Choice
Necessary
For Environment
1.5°C 2°C 2°C vs 1,5°C
2.6xworseEXTREME HEAT
SEA-ICE-FREE ARCTIC
SEA LEVEL RICE
10xworse
.06MMORE
Easiest
to do
PV & Wind
8 ÷ 12 months
CCGT
16 ÷ 20 months (open cycle)
26 ÷ 30 months (closed cycle)
Coal
40 ÷ 60 months
Nuclear
120+ months
Average LCOE €cent/kWh – Global Average
Current Coal and Gas
Renewables - What is behind this growth?
Why choosing Renewable Energy
Demand growth
21
Drivers for RES in a situation of overcapacity
1
2 Financial and energy security concerns
3 Time-to-market and technological scalability
4 Sustainability concerns
5 Political willingness: electricity bill reduction and accelerating RE penetration were a key issue in
the election campaign of Ghana’s President Nana Akufo-Addo.
The Ministry of Energy has recently disclosed that the Renewable Energy Act is being amended to
ensure active participation of the private sector in achieving government’s goal of scaling up the
penetration of renewable energy
Regulatory reliability: RE Master Plan 2019: RE from 42.5 MW in 2015 to 1363 MW in 2030 ->
there is much opportunity for private investors
Why choosing Renewable Energy
22
Drivers for RES in a situation of overcapacity
1
2
3
4
5 Political willingness and regulatory reliability
6 Commercial opportunities: export in neighboring countries or wheeling to C&I consumers
leveraging on the inner decentralization of renewable energy plant.
Demand growth
Financial and energy security concerns
Time-to-market and technological scalability
Sustainability concerns
Grid investments
Storage
Digitalization
Flexibility
Key enablers for «100% Renewables»
230
450
950
120
Hydro Wind Solar PV Other RES
260
560
940
80
Hydro Wind Solar PV Other RES
Source: World Energy Outlook 2018, New Policies Scenario - IEA
1.840 GW 1.750 GWAdditional 2020-2030 Additional 2030-2040
15%
38%18%
29%
16%
31%
22%
31%
10.000 GW
RES
Share
47%
RES
Share
53%
12.300 GW
2030 2040
Hydro
Other RES
Coal
Other
Conventional
18%
15%
29%
38%
RES
Share
33%
7.000GW
2017
RES Share
77%RES Share
76%EU
Latam
North AM
China
India
Africa
RoW
World Installed Capacity
How the installed capacity mix will look like
Thank you
26
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