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Investing in Renewable Energy

1

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What promotes investment in renewable energy?

Reasonable return on equity

Reliable and reasonably predictable revenue stream

Confidence in plant output and operating costs

Investor certainty (i.e. manageable risks)

Social and environmental outcomes

The same as any other infrastructureinvestment!

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The benefits of renewable energy

Sound financial investment

Zero greenhouse gas emissions

Lower OHS risks than alternative fossil fuel generation

Positive social and environmental outcomes

Broader health benefits to community

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Are others investing?

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Investor sentiment today

Looking brighter after much turbulence

New investment is underwritten by the 20% renewableenergy target by 2020

Carbon price will improve investment certainty

Banks are keen and super funds ($1T) getting interested

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Lane Crockett Pacific Hydro

REC Prices

EnhancedRET

announced

COAG reviewof RET

announced

NSW G-FITannounced

Rudd Govtelected with20% by 2020

target

ExpandedRET

legislated

Howard Govtrefuses to

increase MRET

Vic Govt winselection with

VRET and NSWRET announced

Underlying graph from Green Energy Markets Renewables Report

SA, Qld & WAsupport for state

RET schemes

Market forecastsoversupply inERET design

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Estimate of technology breakdown for 20% RET

Bloomberg New Energy Finance

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Bloomberg New Energy Finance

Levelised Cost of electricity ($/MWh)

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9

ATSE 2009

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10

AGL, IES & Pacific Hydro

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11

What do Victorians want?

Survey question: If you had to pick one of these as your

preferred option which would it be?

QDOS Survey June 2010

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12

Renewable energy:

Popular

Good investment

Creates jobs

Clean and healthy

No emissions!

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13

My ten minutes is up.....

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Name of Speaker Document Title

14

Cost make-up of residential electricity tariff (IPART)

RET (thin wafer)

Retailer cost

Generation cost

Transmission cost

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The National Electricity Market

The NEM is a dynamic network which has to balancegeneration to variable demand in 5 minute periods.

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Name of Speaker Document Title 16

AEMO 2010

NEM already manages a high levels ofintermittent generation

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Name of Speaker Document Title 17

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Renewable resources in Australia

Wind

Lowest cost, lowestenvironmental footprint

Around 7000MW of

planning approved windfarm capacity in Australia

May be limited by socialfactors

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Renewable resources in Australia

Solar

Current costs are high but falling rapidly

Resource is highly confluent with load demand

PV costs falling rapidly due to efficiency gains and volumecapacity growth

Solar thermal (with storage) - power can be dispatched intothe grid

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Opportunities for main technologies

Geothermal

Vast resource

Industry moving to conventional technology

Power can be dispatched into the grid

Wave

Large coastal resource