Green Energy for Data Centers Overview of U.S Wind & Solar - PowerPoint PPT Presentation

woodmac.com Green Energy for Data Centers - Microsoft Webinar Green Energy for Data Centers Overview of U.S Wind & Solar Procurement by Corporations Colin Smith Senior Analyst Colin.Smith@woodmac.com 0

woodmac.com Green Energy for Data Centers - Microsoft Webinar About Wood Mackenzie We provide commercial insight and access to our experts leveraging our integrated proprietary metals, energy and renewables research platform Wood Mackenzie is ideally positioned to support consumers, producers and financers of the new energy economy. Acquisition of MAKE and Greentech Media (GTM) Leaders in renewables, EV demand and grid- connected storage Over 500 sector-dedicated analysts and consultants globally, including 75 specifically to power and renewables Located close to clients and industry contacts Wood Mackenzie offices Wood Mackenzie Power & Renewables offices 1

woodmac.com Green Energy for Data Centers - Microsoft Webinar United States electricity demand will continue to be driven by C&I sector C&I segment will continue to serve as a critical client set for foreseeable future United States electricity demand (Pwh)  C&I segments comprise ~70% of US electricity demand Total CAGR:1.3%  Industrial efficiency increasing 177 C&I CAGR: 1.2% 4.3 4.3 workers in 2019 have equal output 4.2 4.2 4.1 4.1 4.1 4.0 4.0 3.9 as 1,000 in 1950* 3.9 3.8 3.8 3.7 1.2 27% 1.1 1.1  Electrification within energy 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.0 1.0 intensive industries driving some 1.0 1.0 power growth  Growth in concentrated power 68% 1.8 1.7 41% 1.7 1.7 1.7 1.7 demand from data centers 1.7 1.6 1.6 1.6 1.6 1.6 1.5 1.5  Services economy driving commercial growth and differentiation based on 1.4 1.4 1.4 1.3 1.4 1.3 1.3 sustainability 1.3 1.3 1.3 1.2 1.3 1.2 1.2 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Residential Industrial Commercial Source: Woodmac, * https://www.industryweek.com/leadership/hope-not-plan-myth-american-manufacturing 2

woodmac.com Green Energy for Data Centers - Microsoft Webinar The pool of potential C&I electricity demand is staggeringly deep Recent C&I offtake deals reflect a tiny percentage of total C&I power demand, opportunities in REC conversion Estimated annual renewable energy demand opportunity from F1000 Estimated current F1000 power demand as a share of total US C&I companies electricity demand, and current renewable share thereof, 2018 (TWh) 1,192 1,200 29 1,141 Identified but 11 1,150 11 47 uncontracted 1,100 demand 1,050 1,000 950 900 850 800 750 700 650 Remaining 600 550 1,094 potential 500 demand 450 F1000 400 350 Other U.S. C&I 300 250 Renewable 200 Non-renewable 150 100 50 0 US US Identified Identified Renewable energy electricity demand operational contracted demand opportunity demand met (non- demand demand PPA/GT) 3

woodmac.com Green Energy for Data Centers - Microsoft Webinar Levelised Cost of Energy (LCOE) and Net Cost of New Entry (NetCONE) outlook New analytic measures, such as NetCONE, point to solar leadership to meet future power demand Wind and Solar NetCONE – ERCOT West US LCOE range & medians (2018 $/MWh) Wind, $/kW Wind onshore 120 Solar utility 100 -31% 80 Gas CC 60 Median LCOE 40 20 0 2018 2020 2022 2024 2026 2028 2030 Solar, $/kW 150 100 +80% 50 0 2018 2020 2022 2024 2026 2028 2030 Note: LCOE lines represent medians Capacity revenue SRMC margin CONE Ranges represent US ranges for utility-scale projects Scarcity revenue Tax credits Net revenue NetCONE analysis derived from H1 Federal Carbon Case 4 Source: Wood Mackenzie

woodmac.com Green Energy for Data Centers - Microsoft Webinar Solar and wind C&I offtakers by procurement year Substantial increase in C&I deals YoY takes place as PTC phaseout loom and Section 201 tariff scare abates Select solar vs. wind C&I capacity deals by year of offtake announcement 10000 9000 4480 8000 7164 7000 6187 3901 6000 MWac 3360 5000 4000 4332 3107 3000 4480 1682 2000 3804 2549 1000 1418 1855 558 264 0 2015 or earlier 2016 2017 2018 2019 Utility solar Onshore wind 5

woodmac.com Green Energy for Data Centers - Microsoft Webinar Support for renewables is surging across the C&I sector Peer pressure building as RE100 ranks grow, mirroring new entrant activity Renewable C&I capacity, operational and in-development Cumulative RE100 signatories by year (through 2018) New C&I offtake entrants by year, U.S . 2016 2017 2018 Repeat C&I buyers C&I new entrants Source: Wood Mackenzie, RE100 6

woodmac.com Green Energy for Data Centers - Microsoft Webinar C&I offtaker segmentation Technology/data sector dominates, but could be surpassed by industrial clients in coming years Solar and wind capacity operating and in development by C&I segment Cumulative C&I capacity by segment in the U.S. Through 2018  Data centres, using between 20% and 87% more electricity per square foot than comparable buildings, are the largest segmentation of C&I offtakers  The industrial sector is best positioned to surpass data and technology as the largest offtaker of renewables in the U.S. » The number of large industrial companies like Dalmia, Gürmen Group, and Tata that have already signed renewable energy exceeds the number of data and technology firms  Retail and service industry companies have procured less offsite wind and solar due to both their smaller average load size and ability to leverage distributed generation resources like rooftop solar Source: Wood Mackenzie 7

woodmac.com Green Energy for Data Centers - Microsoft Webinar Additional capacity to meet C&I demand - forecast and potential range Wind is the best option in near-term due to PTC, solar expected to be preferred C&I supply for long-term Wind v. solar forecast for C&I demand , 2018-2030 (GW) GW Wind dominates Solar wins past 2020 due to Large spread driven by 15 during final years falling cost, ITC extension and F1000 goal setting of 100% PTC favorable diurnal generation behavior and REC usage 10 Baseline 6.70 10-year 6.49 6.54 5.88 5.71 capacity 5.55 5.07 5.01 additions: 4.54 5 4.24 Wind: 13 GW 2.98 Solar: 48GW 1.94 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Maximum Minimum Wind baseline Solar baseline Source: Wood Mackenzie 8

Thank You! Colin Smith Senior Analyst Colin.Smith@woodmac.com

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