clean energy investment trends by michael liebreich of new energy finance june 2008
TRANSCRIPT
Clean Energy Investment Trends REFF Wall Street Market Drivers Michael Liebreich Chairman & CEO new energy finance
New York, 19 th June 2008
© new energy finance, 2008 2
Source: New Energy Finance, IMF WEO Database, IEA WEO 2007, Boeing 2006 Annual Report
Adjusted for reinvestment. Geared re-investment assumes a 1 year lag between VC/PE/Public Markets funds raised and re-investment in projects. Grossed up value based on disclosed deals
Total Global New Investment in Clean Energy 2004 2007
1% of global fixed asset investment Clean energy asset finance is 9.6% of global energy infrastructure spend 2.5 times the size of commercial aircraft investment sector
$148.4bn
$92.6bn
$58.7bn
$33.4bn
2004 2005 2006 2007
76% Growth
58% Growth
60% Growth
© new energy finance, 2008
NEX vs. AMEX Oil, NASDAQ and S&P 500 2003 - 2007
Source: New Energy Finance, Bloomberg Index Values as of 09 June 2008
0
50
100
150
200
250
300
350
400
450
500
30 Dec 02 30 Dec 03 30 Dec 04 30 Dec 05 30 Dec 06 30 Dec 07
NEX AMEX Oil NASDAQ S&P 500
© new energy finance, 2008
NEX vs. AMEX Oil, NASDAQ and S&P 500
Source: New Energy Finance, Bloomberg Index Values as of 09 June 2008
0
50
100
150
200
250
300
350
400
450
500
30 Dec 02 30 Dec 03 30 Dec 04 30 Dec 05 30 Dec 06 30 Dec 07
NEX AMEX Oil NASDAQ S&P 500
Credit crunch!
© new energy finance, 2008
Total public markets transactions, Q1 2004 Q1 2008
Source: New Energy Finance Main markets only. OTC markets include with VCPE figure
$4.3bn
$1.0bn
$12.8bn
$3.7bn
$5.2bn $5.3bn
$3.9bn
$1.4bn
$5.4bn
$1.9bn $2.0bn
$1.5bn $1.2bn
$0.9bn $0.4bn
$0.1bn $0.2bn
$0.1bn
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
Secondary
IPO
Convertible & Other
© new energy finance, 2008
Total asset financing transactions Q1 2004 Q1 2008
Source: New Energy Finance Grossed up values based on disclosed deals.
$19.1bn
$27.8bn
$37.1bn
$30.5bn
$24.9bn
$15.8bn
$24.7bn
$15.3bn $16.5bn
$14.3bn $13.4bn
$9.1bn $9.0bn $7.8bn
$5.8bn
$3.8bn $3.3bn $4.4bn
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
Acquisition
Refinancing
New build
© new energy finance, 2008
Venture capital and private equity for companies, Q1 2004 Q1 2008
Source: New Energy Finance Grossed up values based on disclosed deals.
$4.7bn
$2.5bn
$3.4bn
$2.9bn
$3.5bn $3.7bn
$1.9bn
$2.5bn
$3.5bn
$1.4bn
$2.1bn
$1.6bn
$1.2bn
$1.5bn
$0.6bn
$0.4bn
$1.2bn
$0.2bn
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
PIPE/OTC
PE Buy-out
PE Expansion Capital
VC Late Stage
VC Early Stage
© new energy finance, 2008
NEX vs. AMEX Oil, NASDAQ and S&P 500
Source: New Energy Finance, Bloomberg Index Values as of 09 June 2008
0
50
100
150
200
250
300
350
400
450
500
30 Dec 02 30 Dec 03 30 Dec 04 30 Dec 05 30 Dec 06 30 Dec 07
NEX AMEX Oil NASDAQ S&P 500
Credit crunch!
© new energy finance, 2008
Total public markets transactions, Q1 2004 Q2 2008
Source: New Energy Finance Main markets only. OTC markets include with VCPE figure
INDICATIVE Q2 2008 VALUE
$4.3bn
$1.0bn
$12.8bn
$3.7bn
$5.2bn $5.3bn
$3.9bn
$1.4bn
$5.4bn
$1.9bn $2.0bn
$1.5bn $1.2bn
$0.9bn $0.4bn
$0.1bn $0.2bn
$0.1bn
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
Secondary
IPO
Convertible & Other
© new energy finance, 2008
Venture capital and private equity for companies, Q1 2004 Q2 2008
Source: New Energy Finance Grossed up values based on disclosed deals.
INDICATIVE Q2 2008 VALUE
$4.7bn
$2.5bn
$3.4bn
$2.9bn
$3.5bn $3.7bn
$1.9bn
$2.5bn
$3.5bn
$1.4bn
$2.1bn
$1.6bn
$1.2bn
$1.5bn
$0.6bn
$0.4bn
$1.2bn
$0.2bn
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
PIPE/OTC
PE Buy-out
PE Expansion Capital
VC Late Stage
VC Early Stage
© new energy finance, 2008
Total asset financing transactions Q1 2004 Q2 2008
Source: New Energy Finance Grossed up values based on disclosed deals.
INDICATIVE Q2 2008 VALUE
$19.1bn
$27.8bn
$37.1bn
$30.5bn
$24.9bn
$15.8bn
$24.7bn
$15.3bn $16.5bn
$14.3bn $13.4bn
$9.1bn $9.0bn $7.8bn
$5.8bn
$3.8bn $3.3bn $4.4bn
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
Acquisition
Refinancing
New build
© new energy finance, 2008
Eurozone wind farm financing rate, Euribor rate and ECB official rate
Source: New Energy Finance
1%
2%
3%
4%
5%
6%
7%
8%
Jan 2007 Apr 2007 Jul 2007 Oct 2007 Jan 2008 Apr 2008
Fed rate US Libor Total rate including spread
1%
2%
3%
4%
5%
6%
7%
8%
Jan 2007 Apr 2007 Jul 2007 Oct 2007 Jan 2008 Apr 2008
ECB rate Euribor Total rate including spread
© new energy finance, 2008
US wind farm financing rate, US Libor and Fed funds rate
Source: New Energy Finance
1%
2%
3%
4%
5%
6%
7%
8%
Jan 2007 Apr 2007 Jul 2007 Oct 2007 Jan 2008 Apr 2008
Fed rate US Libor Total rate including spread
© new energy finance, 2008
Yields on tax equity in affordable housing and wind projects 2007 - 2008: %
Source: New Energy Finance Anecdotal evidence based on interviews with tax equity investors and wind project developers.
5.00%
7.00%
5.75%
6.50%
Summer 2007 Summer 2008
Affordable Housing tax yields
PTC yields
© new energy finance, 2008
USD denominated contracts, Q4 2002- Q12008: Sample Size and $m/MW
Source: Companies, New Energy Finance Notes: 10 point rolling average, averaged by quarter of contract signing. Where no data points present, previous value from the previous quarter is usd
0
2
4
6
8
10
12
Q4_2
002
Q1_2
003
Q2_2
003
Q3_2
003
Q4_2
003
Q1_2
004
Q2_2
004
Q3_2
004
Q4_2
004
Q1_2
005
Q2_2
005
Q3_2
005
Q4_2
005
Q1_2
006
Q2_2
006
Q3_2
006
Q4_2
006
Q1_2
007
Q2_2
007
Q3_2
007
Q4_2
007
Q1_2
008
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
Number Price
38% rise in prices Q4 '06- Q1'08
© new energy finance, 2008
Wind turbine supply lead times April 2001 - March 2008
Source: New Energy Finance Notes: Trend line reflects 30point rolling average beginning in April 2001. Lead times are based on expected start of delivery, less date of contract signed.
0
5
10
15
20
25
Sep '02 Mar '03 Oct '03 Apr '04 Nov '04 May '05 Dec '05 Jul '06 Jan '07 Aug '07 Feb '08
Lead times 30pt rolling avg
© new energy finance, 2008
Reported US wind project power prices: $/MWh
Source: Federal Energy Regulatory Commission, New Energy Finance Desktop
Notes: Prices are average of reported quarterly contract prices weighted by volume of electricity. Reporting projects exclude projects connected in ERCOT zone.
$33.5/MWh $36.0/MWh
Average 2003 Average 2007
7% Increase
15.0
20.0
25.0
30.0
35.0
40.0
2003
Q4
2004
Q4
2005
Q4
2006
Q4
2007
Q4
Elec
tric
ity p
rice
($/M
Wh)
0
10
20
30
40
50
60
70
80
90
100 Number of reporting projects (RH) Weighted average price (LH)
© new energy finance, 2008
NEX vs. Wind Sector
Source: New Energy Finance, Bloomberg Index Values as of 19 May 2008
80
100
120
140
160
180
200
220
240
Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08
NEX (89)
NEX Wind (15)
Developer/ Power
Generator (7)
Turbine Manufacturer (6)
© new energy finance, 2008
Methodology explained in Research Note, “The cell maker’s dilemma: When will the silicon shortage ease?”. Based on data and assumptions updated in February 2008.
Projected solar silicon production by tier, 2006- 2011 ktonnes
Source: New Energy Finance, 2008
147
118
80
49
27 19
2006 2007 2008 2009 2010 2011
Silicon Tier 3
Silicon Tier 2
Silicon Tier 1
© new energy finance, 2008
2006 US biofuels bull run
Source: New Energy Finance
And investment shift to South America
$8.7bn
$13.1bn
$4.2bn
$1.0bn $1.0bn $0.7bn
$0.2bn
M&A/MBO
New investment 2001 2002 2003 2004 2005 2006
2007
VC/PE, Public Markets and Asset Finance only. Excludes re-investment adjustment. Grossed up value based on disclosed deals
$6.9bn
$4.0bn
$0.2bn $0.04bn
© new energy finance, 2008
Biofuels contribution to food price increases, 2004 - 2007
Base currency: US$ Source: New Energy Finance, USDA
Max price impact of Biofuels
+ 2.7%
+ 17.0%
+ 8.1% 168%
136%
63% Sugarcane
Food Oils
Grains
Input cost $ depreciation Other Supply & Demand Biofuels
© new energy finance, 2008
Grain supply-demand drivers, 2004-2007: m hectares (% change of land use)
Source: New Energy Finance, USDA
20.2 (2.9%)
2.7 (0.4%)
-2.6 (-0.4%)
-3.6 (-0.5%)
-4.8 (-0.7%)
-6.6 (-1.%)
-7.6 (-1.1%)
-24.1 (-3.5%) Population
Biofuels
Australia
Urbanisation
Yield Increase
Animal feed
Consumption habits
Added land
100%= 686m Hectares.
Total net impact on land availability
equivalent to -3.9%
© new energy finance, 2008
Grain land use for ethanol production 2007 (k hectares)
Source: New Energy Finance, USDA
9,017 22 831
172 137
0 0
0
0
0 0 0
Rice
Sorghu m
Wheat
Corn
US EU 27 China
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Michael Liebreich +44 20 7092 8803 [email protected]
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