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Renewable + conventional trends

dspp
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Renewable + conventional trends

#131882

Postby dspp » April 13th, 2018, 10:25 am

Prompted by this report I thought I'd start a new topic to follow aggregate trends rather than the parochial ones. Below are my skim read takeaways.

UN / Bloomberg : 2018 Global Trends in Renewable Energy Investment - report

http://fs-unep-centre.org/sites/default/files/publications/gtr2018v2.pdf

MONEY - 2017

Wind $107bn, solar $180bn, large hydro $45bn (mostly Baihetan dam, China), $103bn new fossil plan, $42bn nuclear

Now the developing countries are putting more money in to renewables capacity adds than developed, i.e. getting closer to fully commercial basis.

LEVELISED COSTS - 2017

"In the U.S., for instance, in 2017 the average LCOE without subsidy for PV without tracking was $54 per MWh, with onshore wind at $51 per MWh, versus gas-fired generation at $49 per MWh, coal at $66 and nuclear at $174". See graph on p17.

POWER & CAPACITY - 2017

61% of new capacity adds renewables

19% global gen capacity now renewable

12% actual generation is now renewable

VEHICLES & STORAGE - 2017

1.1 mln EVs sold (vs about 85 mln conventional)

$209/kWh for lithium ion battery packs

crossover point for unsubsidised EV to equal/beat conventional in mid 2020s on lifetime cost; late 2020s on purchase cost

regards, dspp

dspp
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Re: Renewable + conventional trends

#134863

Postby dspp » April 26th, 2018, 11:02 am

If you look at the latest annual GWEC report
http://gwec.net/cost-competitiveness-pu ... -in-front/

and in that look at the trend report
http://gwec.net/wp-content/uploads/2018 ... 8-2022.jpg

They are broadly predicting global wind installs will run flattish at 52-66 GW/yr .

Contrast that with the global PV trend
https://www.pv-magazine.com/2017/12/01/ ... modules-2/

which is basically climbing well above 100GW and showing no sign of decelerating and one has to wonder if there will in time be reduced demand for wind, i.e. will the flatlining wind market actually turn to a decline in due course. I can make the contrary argument that capacity factors are greater for wind, and that largescale deployment offshore of large rotor machines will further drive that, and that the wind/solar combi minimises storage costs, but nevertheless one has to wonder at the ways the trends are running.

regards, dspp

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Re: Renewable + conventional trends

#198130

Postby dspp » February 1st, 2019, 11:20 am

Bloomberg NEF report on 2018 renewable installs:

Increased capacity installed for slightly less money. Wind capacity growing slightly, money up slightly, shifting offshore (so capex/MW stable I guess, but capex/MWh improving) . Solar capacity growing strongly, money falling markedly, very good capex/MW increases. It is woth going to the link and taking a look at the two graphs. Solar and wind about equal in $ terms, but solar double wind in capacity terms. However since typical solar capacity factor is 10% and typical wind is 30+%, then wind is still beating solar in $/MWh terms. But solar can go in anywhere and in small chunks, whereas wind is location specific and is best done as big projects. So really nothing changes in the overall trajectory.

January 16, 2019
Solar commitments declined 24% in dollar terms even though there was record new photovoltaic capacity added, breaking 100GW barrier for the first time.

London and New York, January 16, 2019 – Global clean energy investment[1] totaled $332.1 billion in 2018, down 8% on 2017. Last year was the fifth in a row in which investment exceeded the $300 billion mark, according to authoritative figures from research company BloombergNEF (BNEF).

There were sharp contrasts between clean energy sectors in terms of the change in dollar investment last year. Wind investment rose 3% to $128.6 billion, with offshore wind having its second-highest year. Money committed to smart meter rollouts and electric vehicle company financings also increased.

However, the most striking shifts were in solar. Overall investment in that sector dropped 24% to $130.8 billion. Part of this reduction was due to sharply declining capital costs. BNEF’s global benchmark for the cost of installing a megawatt of photovoltaic capacity fell 12% in 2018 as manufacturers slashed selling prices in the face of a glut of PV modules on the world market.

That surplus was aggravated by a sharp change in policy in China in mid-year. The government acted to cool that country’s solar boom by restricting access for new projects to its feed-in tariff. The result of this, combined with lower unit costs, was that Chinese solar investment plunged 53% to $40.4 billion in 2018.

etc


2018 results:
https://about.bnef.com/blog/clean-energ ... lion-2018/
2019 predictions:
https://about.bnef.com/blog/transition- ... ions-2019/

TheMotorcycleBoy
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Re: Renewable + conventional trends

#202084

Postby TheMotorcycleBoy » February 18th, 2019, 12:50 pm

Hi,

Apologies if this is the wrong thread to pose this question but it looked like a reasonable choice; and that is, are firms like BP and Shell looking at all into, research and then gradual diversification into non-fossil fuel based energy sources? Or as entities (do people think they) will they dwindle either as demand (climate change concerns) or supply (diminishing resources) effect their size and profitability?

thanks Matt

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Re: Renewable + conventional trends

#202090

Postby TheMotorcycleBoy » February 18th, 2019, 1:03 pm

Ahh... some stuff here about Shell's investment in other energy sources
https://www.fool.com/investing/2018/07/ ... shell.aspx

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Re: Renewable + conventional trends

#202511

Postby dspp » February 20th, 2019, 9:09 am

TMB,

That's a fair TMF-USA article re RDSB, but it is only a limited view in my opinion.

The institutional culture within Shell is very long term and aware of the context in which they operate, and open to doing things differently, and doing different things (unlike, say, Exxon) but there is not unanimity on the approach at any given moment. This is a healthy thing in my opinion as it avoids sterile groupthink, or the danger of domination by charismatic leaders that have occurred in some peers (BP, I'm looking at you). Shell is also more independent and global in thought and not a foreign/national policy tool to any way near the same extent as (say) ENI or Total. Those are my observations of ways of assessing culture in the majors. You can make similar qualitative assessments about the mid tier and the minors as well.

The downside of this is that Shell sometimes make a big & wrong call (entering coal, nuclear, forestry* to name but a few) but the upside is that they have the mental honesty to reverse the decision as pathways become clearer (and remember, sometimes the position is just for learning and/or hedging purposes, so the unwind may be egg-on-the-face but still profitable). So they are well aware of the trends in the energy sector and are themselves continually figuring out how to make a lowish risk transition. This is by no means a new discussion item in Shell and is pretty much slide 1 of day 1 training within Shell's long term workforce. It is worth reading the Shell quarterly updates & slide decks etc to get some more insight rather than depending on TMF-USA on this.

A lot of people & companies in the oil sector are dead set against transition, some to the point of denial of any of the rationales. This makes them uninvestable. Others may be capricious movers, which makes them higher risk plays. If looking at the global vertically-integrated majors you want to do serious quantitative analysis, then best to start simply by looking at their gas exposure vs their oil exposure, and by looking at the type of oil they have on their books (heavy, light, etc) and their reserves position.

Simply investing well in this area is a tough call - so not unreasonably investing with the transition in mind squares the challenge. It is a very valid discussion item but one we are unlikely to 'settle' here on TLF :) Personally one of the reasons my portfolio is tilted towards RDSB is because I see the transition position/time/manner debate within RDSB as being conducted more thoughtfully than in the others, and I do not see good opportunities for me to (as an individual) invest in renewables (yet) with a risk/reward profile that I find attractive.

regards, dspp


* these examples may be before your time, and have long since been exited

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Re: Renewable + conventional trends

#202570

Postby TheMotorcycleBoy » February 20th, 2019, 11:23 am

Many thanks for this reply, Dave,

dspp wrote:TMB,
The institutional culture within Shell is very long term and aware of the context in which they operate, and open to doing things differently, and doing different things (unlike, say, Exxon) but there is not unanimity on the approach at any given moment. This is a healthy thing in my opinion as it avoids sterile groupthink, or the danger of domination by charismatic leaders that have occurred in some peers (BP, I'm looking at you). Shell is also more independent and global in thought and not a foreign/national policy tool to any way near the same extent as (say) ENI or Total. Those are my observations of ways of assessing culture in the majors. You can make similar qualitative assessments about the mid tier and the minors as well.

Yes, the impression I got from the article was that Shell were, perhaps, quite forward looking.

dspp wrote:The downside of this is that Shell sometimes make a big & wrong call (entering coal, nuclear, forestry* to name but a few) but the upside is that they have the mental honesty to reverse the decision as pathways become clearer (and remember, sometimes the position is just for learning and/or hedging purposes, so the unwind may be egg-on-the-face but still profitable).

I wasn't aware of these, but I guess, many firms make ventures down side-alleys, and not all of those end up in dictating the "correct" path. But so as long as they can recover from the odd U-turn, then no lasting problem....

dspp wrote: So they are well aware of the trends in the energy sector and are themselves continually figuring out how to make a lowish risk transition. This is by no means a new discussion item in Shell and is pretty much slide 1 of day 1 training within Shell's long term workforce. It is worth reading the Shell quarterly updates & slide decks etc to get some more insight rather than depending on TMF-USA on this.

Thanks - yes will do.

dspp wrote:Personally one of the reasons my portfolio is tilted towards RDSB is because I see the transition position/time/manner debate within RDSB as being conducted more thoughtfully than in the others,

We have no oilies or energy providers (except Nat Grid NG.). In fact our foli arguably lacks diversity in oil/gas, pharma (we just have Bioventix BVXP which is more bio-tech than pharma), and media/IT. Sorry to get a tad off topic there....

I've tried to stick to just highish OM, and ROCE firms (with at least *some* dividend, yes you and I have had this discussion in the past :lol: ). As such we've got several "manufacturers" or niche suppliers (like Spirax). I'd like to put some energy (oil and renewables) in there, but struggled to find one I'm happy with. RDS is low on the OM and ROCE front, but definitely pays a decent DY, and if future earnings get protected by means of gradual diversification (renewables) then it could be worth a punt for us, I think.

dspp wrote: and I do not see good opportunities for me to (as an individual) invest in renewables (yet) with a risk/reward profile that I find attractive.

Ditto. I (briefly) looked at JLEN (John Laing Environment Services) the IT, but then I'd have to research ITs - a whole other investment ballgame, and furthermore (at first glance at their spec sheet) nothing really shouted at me, to buy a chunk.

So a holding in RDSB for us looks increasingly interesting.

thanks again
Matt

dspp
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Re: Renewable + conventional trends

#202573

Postby dspp » February 20th, 2019, 11:36 am

Yes, I have looked at JLEN a few times courtesy of the various folk who have prompted it. I cannot see much upside however so have done nothing so far.
regards, dspp

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Re: Renewable + conventional trends

#202797

Postby TheMotorcycleBoy » February 21st, 2019, 6:30 am

dspp wrote:Yes, I have looked at JLEN a few times courtesy of the various folk who have prompted it. I cannot see much upside however so have done nothing so far.
regards, dspp

I just took another look. It does currently have about 5.68% DY

From here:
https://jlen.com/wp-content/uploads/201 ... tsheet.pdf

6.31p (div) / 111p (current price) = 5.68%

So perhaps one to keep in mind (for me possibly).


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