ROLE OF WIND POWER IN SA’s ECONOMIC RECOVERY PLAN
Speakers Ntombifuthi Ntuli Emerson Clarke Marubini Raphulu Grové Steyn Dr. Tobias Bischof-Niemz CEO: South African Director of Growth CEO: Hulisani Limited Managing Director: Head of Department Wind Energy and Partnerships: Meridian Economics Business Development: Association (SAWEA) Global Wind Energy ENERTRAG Council
Agenda • Introduction • Ntombifuthi Ntuli - Welcome on behalf of SAWEA • Speaker session: Emerson Clarke • Speaker session: Grové Steyn • Polling Questions • Speaker session: Marubini Raphulu • Speaker session: Dr. Tobias Bischof-Niemz • Q&A hosted by Ntombifuthi Ntuli
Ntombifuthi Ntuli CEO: South Africa Wind Energy Association
Emerson Clarke Director of Growth and Partnerships: Global Wind Energy Council
The e Ch Challen llenge e The ongo ngoing ing CO COVI VID-19 c cri risi sis s th threate tens s to to overshado hadow the c clim limat ate emerge genc ncy. The global energy transition requires vast scaling-up of new installations, and critical factors around the enabling environment for • wind power and other forms of renewable energy are yet to be resolved. At least 69 GW of wind power projects are at risk of being delayed and abandoned by 2024. • Wind ind ene nergy gy ne needs ds a a unif unifie ied d voic ice in in the global de glo bal debat bate abo about ut gr green n recovery. • Over US$10 trillion in economic relief and fiscal stimulus packages are currently being evaluated by governments around the world. • We have a window to act to advocate for what the wind industry needs to deliver the transition, as a key part of a renewed, decarbonised energy infrastructure
The Fun undam damenta tal Que l Questio tion • How d do w we t turn p rn public ic cons nsens nsus int nto g glo lobal l action? n? The public agrees on how the future should look: Polls show that, globally, 71% a agree ee that the • climate crisis is as serious as the pandemic. • Globally 65%, a and a a m majority i in ev ever ery countr try, want a green economic recovery.
COVID CO ID-19 9 is is expected to bring ring d down n glo lobal ne l new w wind nd ins nstalla latio ion n by 16% 6% i 2020, but th t the ma e market et is s likel ely to to bounce e back in 2 2021 Glob obal W Wind M Market Ou t Outl tlook ook, pre C COVID (Q1 (Q1 2 2020) ) vs vs. pos ost C t COVID (Q2 (Q2 2 2020) ) GW GW 80 76.7 76. 76. 76.1 2020 was on-track to be a record year in global wind history 73.4 73. 72. 72.1 6.2 71. 71.6 9.0 with more than 76 76 G GW to be installed. However, the CO COVID- 70 67.7 67. 66. 66.8 66. 66.2 65. 65.7 9.0 63. 63.8 15.0 13.7 19 c cris isis is, which disrupted global wind supply chains and 7.9 60.3 60. 7.6 6.6 60 12.7 12.2 project construction execution, is expected to brin ing d down own 6.1 global new installation to 63 63.8 G 8 GW this year, 16 16% lower 50 than our pre-COVID forecast made in Q1 2020. However, new installations are likely to bounce back next year and 40 make 2021 21 a a rec ecord y d year ear with annual installation reaching 69.9 67.8 62.6 59.8 59.2 58.4 58.4 76. 6.7 G 7 GW. 30 53.5 53.5 57.2 54.2 20 10 0 2019 2020 Q1 2020 Q2 2021 Q1 2021 Q2 2022 Q1 2022 Q2 2023 Q1 2023 Q2 2024 Q1 2024 Q2 (post (post (post (post (post COVID) COVID) COVID) COVID) COVID) Onshore Offshore Post-COVID GWEC’s Market Outlook represents the industry perspective for the expected installations of new capacity for the next five years. The outlook is based on input from regional wind associations, governmental targets, available project information and input from industry experts and GWEC members. Source: GWEC Market Intelligence, June 2020
Why Actio y Action is is Ne Needed: : Baseline Growth Global bal o onshore an and d offshore wind po d power n new instal allat ations, 2018-2024e GW “Ba “Basel eline” S e” Scen cenari rio Pre-COVID-19 Forecast: Capitalising on 19% year-on- 355 GW of new onshore/offshore installations over the next five years year growth in 2019, wind +19% 19% industry was on-track for a 76,1 record year of 76.1 GW new 73,4 71,6 67,7 installations in 2020: 66,2 60,4 • Growth concentrated in 50,7 China, Europe and the US • Market-based mechanisms, such as auctions, tenders and Green Certificates, driving volume 2018 2019 2020e 2021e 2022e 2023e 2024e Source: GWEC Market Intelligence
Why A y Acti ction i is Ne Neede ded: d: Volume at Risk Global bal o onshore an and d offshore wind po d power n new instal allat ations, 2018-2024e “Do N Noth thing” g” S Scenar ario GW 69.3 69 3 GW W downgrade due to Pre-COVID-19 Forecast: projects failing to close financing 355 GW of new onshore/offshore installations over the next five years and recessionary impact, including: • Lack of extensions for project CA CAGR commissioning deadlines (e.g. China -4% 4% and the US) 76,1 73,4 71,6 Lack of extensions for Feed-in-Tariffs 67,7 67,7 • 66,2 62,9 (e.g. Vietnam) 60,4 52,2 • Heightened investment risk around 51,5 51,2 50,7 currency, counterparties, credit lines and other areas (e.g. Australia, India, Brazil, Mexico and other emerging markets in Latin America and Africa) 2018 2019 2020e 2021e 2022e 2023e 2024e 20% of scheduled capacity abandoned and cumulative new installations decline to 285 285.7 G GW in “Do Nothing” scenario Source: GWEC Market Intelligence We note that this analysis is as of mid-April 2020 and does not account for a market-by-market assessment.
Wh Why A y Acti ction is s Ne Neede ded: d: Green Recovery Global bal o onshore an and d offshore wind po d power n new instal allat ations, 2018-2024e “Green “G een R Reco ecover very” ” Scen cenari rio GW 94. 4.9 9 GW W upside, at minimum, to Pre-COVID-19 Forecast: 355 GW of new onshore/offshore installations over the next five years achieve climate-resilient growth: • States extend deadlines for project commissioning/FITs CAGR CA • All delayed installations in 2020 +12% 12% 1 10 come online 2021-2022 100 • Higher capacity targets for RE and 95 improvements to the enabling 83,9 environment increase the project 76,1 73,4 71,6 pipeline 67,7 66,2 62,9 60,4 • Paired with widescale electrification 50,7 measures Aligned with IPCC stipulations to • maintain a 1.5°C pathway 2018 2019 2020e 2021e 2022e 2023e 2024e 27% increase in capacity to at least 449.9 G GW W cumulative new installations in “Global Transition” scenario Source: GWEC Market Intelligence
The Ch Challe allenge ge: Huge public affairs gap • Spe Spending g by by w wind e d energy gy i is s dw dwar arfed d by by f foss ssil fuel i incumbe bents. ts. Wind energy faces a fossil fuel industry prepared to spend hundreds s of m millio illions s of d dolla llars s in the form of donations and lobbying. • Each year, the top five publicly owned Oil and Gas companies spend more than US$200 million on lobbying designed to influence climate-related policy. • Campaigns commonly focus on low-carbon commitments, position corporate materials/leadership as climate expertise and use misdirection to avoid commitments. Sources: https://www.statista.com/statistics/257364/top-lobbying-industries-in-the-us/; https://www.forbes.com/sites/niallmccarthy/2019/03/25/oil- and-gas-giants-spend-millions-lobbying-to-block-climate-change-policies-infographic/#3bebafdb7c4f
GWEC’s WEC’s Indus dustr try S y State tatement – ke key pi y pillars llars 1 2 3 Inves estmen ent f for a a sus ustai ainabl able an e and d An An e enablin ling e envir iron onment for or Empo power ermen ent o of peo peopl ple e to dr drive e res esilien ent f fut utur ure clean ean en ener ergy gy the en e ener ergy gy t tran ansition • Investment in critical infrastructure •Fit-for-purpose regulation •Direct and indirect job creation (power systems, grid) •Secure existing/awarded projects •Reskill workers from fossil fuels •Investment criteria - ‘No Harm’ and auction processes •“Shovel-ready” wind projects as a principle and evidence-based •Removal of barriers for corporate end- solution for near-term job dislocation decision-making users and disruption •Reporting requirements in line with •Net-zero commitments, carbon •Commitment to a just and inclusive TCFD recommendations budgets, carbon pricing, science- energy transition •Scale up financing and stem capital based approaches for governments •Health and safety flight for emerging markets •Decarbonisation of all economic •Young generations as key •Economic output of renewables versus sectors through electrification stakeholders of the green economic fossil fuels recovery
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