Talk delivered at CIR Series http://www.hvm-uk.com/events/register/

1. Distributed
Genera.on
Alan
South,
Chief
Innova.on
Officer
6th Smart Grids & Cleanpower Executive Briefing Day 3 June 2014, Cambridge, UK www.hvm-uk.com

2. Commercial
opera.on
of
the
na.onal
132kV
electric
power
transmission
grid
begins
in
the
UK.
It
is
the
first
integrated
na.onal
grid
in
the
world.
Small
and
inefficient
power
sta.ons
are
being
closed
down.
(1935)
Source: Grid@75

3. 3
Source: Shell New Lens scenarios: Oceans

4. 4
Source: Edison Foundation Brief October 2013
0.00
1.00
2.00
3.00
4.00
5.00
1am 2 3 4 5 6 7 8 9 10 11 12pm 1 2 3 4 5 6 7 8 9 10 11 12am
Kilowatt
Consumption6 Solar6Production
Utility provides power
Utility provides power
Customer generation,
grid support needed
Customer uses grid to
export excess power

5. 5
Source: Google images

6. 6
Source: Morgan Stanley
March 4, 2014
Clean Tech, Utilities &
Autos
Batteries + Distributed Gen.
May Be a Negative for Utilities
Improvements in batteries and distributed
generation could partly or completely eliminate
some customers’ usage of the power grid. We see
the greatest potential for such disruption in the
West, Southwest, and mid-Atlantic.
Our analysis suggests utility customers may be
Industry Views
Industry Industry View
Autos & Auto-Related In-Line
Clean Tech In-Line
Diversified Utilities / IPPs In-Line
Regulated Utilities In-Line
California Solar Competitiveness
$ / KWh
$0.08
$0.10
$0.12
$0.14
$0.16
$0.18
Morgan Stanley & Co. LLC Stephen C Byrd
Stephen.Byrd@morganstanley.com
+1 212 761 3865
Adam Jonas, CFA
Adam.Jonas@morganstanley.com
+1 212 761 1726
Simon Flannery
Simon.Flannery@morganstanley.com
+1 212 761 6432
Timothy Radcliff
Timothy.Radcliff@morganstanley.com
+1 212 761 4139
M O R G A N S T A N L E Y R E S E A R C H
N O R T H A M E R I C A

7. 7
The
u.li.es’
new
philosophy:
either
adapt
-­‐-­‐
or
wither
away
and
die
Under
threat,
Germany’s
second-­‐biggest
u.lity
says
it
will
create
a
new
‘prosumer
business
model’
The world’s largest
solar bridge under
construction in
London
6
• “The
massive
erosion
of
wholesale
prices
caused
by
the
growth
of
German
photovoltaics
cons.tutes
a
serious
problem
for
RWE
which
may
even
threaten
the
company’s
survival,”
wrote
the
u.lity
in
a
recent
strategy
paper.
• Clearly,
the
management
of
RWE,
un.l
recently
seen
as
one
of
the
“dir.est”
energy
companies
in
Europe,
has
decided
once
and
for
all
to
leave
its
past
behind
and
embrace
a
future
in
which
it
believes
renewable
and
increasingly
decentralized
forms
of
energy
will
dominate..
• RWE
indicated
that
they
will
no
longer
invest
in
fossil
power
genera.on
as
of
2018.
Energy
transi.on
The
impact
on
the
power
sector
business
model
Source: Solarcentury

8. 8
Drivers
and
barriers
for
distributed
genera.on
low
cost
renewables
low
cost
and
accessible
storage
and
controls
grid
charges
and/
or
poor
grid

9. 9
22%
cost
reduc.on
each
.me
installs
double
Source: Solar Photovoltaics V, EPIA

10. 10
Source: SMA website

11. 11
Solar
growth
to
2015
Source: Bloomberg New Energy Finance “PV Market Outlook” Q2 2013” 13 May 2013
2.8GW
6.6GW 7.7GW
18.2GW
28.7GW 30.5GW
39.6GW
50.5GW
59.2GW
2007 2008 2009 2010 2011 2012 2013 2014 2015
Western Europe Eastern Europe Japan USA
China India Rest of World
Historical Forecast

12. 12
East
Africa’s
largest
solar
installa.on
Source: Solarcentury

13. 13
Source: SolarCity website

14. 14
solarcity
Source: Prox website

15. …
think
investors
generally
do
not
appreciate
the
poten.al
size
of
the
market.
Source: Morgan Stanley