Solar PV & Wind
Renewables 18% generation in 2017. Gas still leads. Solar PPA low of $20/MWh and wind $17/MWh. In 2016, Solar PV installation cost $1/W. 12.5 GW of coal retired vs 15 GW in 2015. Solar installed 10.7 GW and wind 7.3 GW.
Top 15 global solar PV developers accounted for 20% installed generation representing 26.4 GW. Top 5 GCL, First Solar, Canadian Solar, Total (SPWR) and Brookfield have a 40 GW pipeline.
Global wind energy installations was 50 GW in 2017. China 20 GW, US 7.1 GW, Germany 6 GW, Australia 245 MW. Prices in Canada 3c/kWh, Mexico 2c/kWh.
Funds aggressively pursuing clean energy investments and actively making them.
Proposed tax changes might impact tax equity providers and munis.
(1) BASE: US banks and insurance companies that are foreign-owned might exit tax equity finance.
(2) ITC: Expiration might mean munis build and own assets rather than offer PPAs. Now, munis offer PPAs so developers get ITC.
NY 1,000% increase in solar growth from 2011 to 2017. $2.8 BN private investment. 1 GW in development.
Japan stops issuing FIT subsidies. Awarded 16 GW biomass power, targeted 6-7 GW by 2030. Wood pellet demand will increase from 500,000 ton in 2017 to 9.5 MM tons in 2025. Biomass demand is expected to increase from 7.6 MM tonnes in 2017 to 23 MM tonnes in 2025
NY announces 1.5 GW of energy storage. Growth is "like wind on steroids".
PJM had 250 MW energy storage by 2013. FERC approval gives states 9 months to provide energy storage integration plan.
Energy storage competitive with gas-fired power within 4 years.
US energy storage Tesla $3.15/W in 4Q17, SolarCity $2.89/W. Australia energy storage $2.51/W. Solar + storage system cost 20% less than the price of solar alone.
Solar + Storage more attractive in the US than Wind + Storage. Wind investors take the PTC, solar the ITC. If battery charges from the grid, it forfeits the ITC. 1 MW/1 MWh battery cost = $1,235/kW including capital, O&M, and replacement cost.
Ideal battery system cost = $335/kW expected around 2028 in ERCOT South.
Oil & Gas
LNG supply growth 50% between 2015 and 2020. LNG supply contracts have been long-term expected to shorten to absorb supply coming online over the next 3 years. Trading firms like Trafigura, Vitol, Glencore and Gunvor account for 20% short-term LNG trades. LNG expected to trade like oil.
Overall positive company results for 2017. 341 S&P 500 companies reported so far beat top-line revenue estimates by 1.2% and bottom-line EPS estimates by 4.8%. YOY revenue growth of 8.3% and EPS growth of 15.7%. JPM expects the expansion cycle to continue. Outsized move in rates caused equity markets to take pause. Expect the Fed to hike rates 3-4 times this year. Project finance spreads continue lower. Leverage and the interest burden are both expected to spike over the next decade according to Moodys. 24 MW AD to Power project located in Canada keeps organics out of landfills. Produces power and fertilizer from organic waste as well as manure.