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

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Aug 29, 2022 249 likes •374 views

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

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Green Energy for Data Centers - Microsoft Webinar woodmac.com

Green Energy for Data Centers

Overview of U.S Wind & Solar Procurement by Corporations

Colin Smith

Senior Analyst

Colin.Smith@woodmac.com

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1 Green Energy for Data Centers - Microsoft Webinar woodmac.com

Wood Mackenzie offices Wood Mackenzie Power & Renewables offices

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

About Wood Mackenzie

We provide commercial insight and access to our experts leveraging our integrated proprietary metals, energy and renewables research platform

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Source: Woodmac, * https://www.industryweek.com/leadership/hope-not-plan-myth-american-manufacturing

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

 C&I segments comprise ~70% of US electricity demand  Industrial efficiency increasing 177 workers in 2019 have equal output as 1,000 in 1950*  Electrification within energy intensive industries driving some power growth  Growth in concentrated power demand from data centers  Services economy driving commercial growth and differentiation based on sustainability

1.5 2026 1.3 1.3 2017 1.1 1.6 1.2 1.3 1.0 1.3 2023 1.6 2019 1.0 1.7 1.7 1.6 2024 2020 1.1 1.7 2021 1.8 1.1 3.8 1.6 2022 1.3 1.1 1.3 1.0 1.1 1.2 1.7 2025 1.1 1.1 1.4 1.1 1.4 2028 1.4 1.1 2030 1.7 1.4 2029 1.5 1.2 1.0 1.7 1.3 1.2 2018 2027 3.7 3.8 3.9 1.6 4.0 4.0 4.1 4.1 4.1 4.2 4.2 4.3 4.3 3.9 68% 27% 41% Total CAGR:1.3% C&I CAGR: 1.2% Residential Industrial Commercial

United States electricity demand (Pwh)

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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

F1000 Other U.S. C&I Renewable Non-renewable 800 550 200 1,000 400 600 350 750 850 1,200 1,050 150 50 300 650 1,150 950 250 100 1,100 500 700 900 450 11 47 US demand met (non- PPA/GT) Identified contracted demand 1,141 Identified but uncontracted demand Remaining potential demand 1,094 Identified

perational

demand 11 29 US electricity demand (TWh) 1,192

Estimated annual renewable energy demand opportunity from F1000 companies Estimated current F1000 power demand as a share of total US C&I electricity demand, and current renewable share thereof, 2018

Renewable energy demand opportunity

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Note: LCOE lines represent medians Ranges represent US ranges for utility-scale projects NetCONE analysis derived from H1 Federal Carbon Case Source: Wood Mackenzie

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

US LCOE range & medians (2018 $/MWh)

Wind onshore Solar utility Gas CC Median LCOE Wind and Solar NetCONE – ERCOT West 80 100 20 40 60 120 Wind, $/kW 2018 2020 2022 2030 2024 2026 2028

SRMC margin Capacity revenue CONE Scarcity revenue Tax credits Net revenue 100 50 150 2024 2018 Solar, $/kW 2020 2022 2026 2028 2030 +80%

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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

1855 264 558 3804 4480 4332 1418 2549 3360 3901 6187 1682 3107 7164 4480 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 2015 or earlier 2016 2017 2018 2019 MWac Utility solar Onshore wind

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Source: Wood Mackenzie, RE100

Support for renewables is surging across the C&I sector

Peer pressure building as RE100 ranks grow, mirroring new entrant activity

Cumulative RE100 signatories by year New C&I offtake entrants by year, U.S.

2016 2017 2018 Repeat C&I buyers C&I new entrants

Renewable C&I capacity, operational and in-development (through 2018)

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Source: Wood Mackenzie

C&I offtaker segmentation

Technology/data sector dominates, but could be surpassed by industrial clients in coming years

 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

Solar and wind capacity operating and in development by C&I segment Through 2018 Cumulative C&I capacity by segment in the U.S.

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Source: Wood Mackenzie

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) 15 5 10 2024 6.54 2.98 6.70 2021 GW 2019 2020 2025 2022 2023 2030 2026 2027 2028 5.01 2029 5.07 1.94 6.49 5.88 4.24 4.54 5.55 5.71 Maximum Wind baseline Minimum Solar baseline Wind dominates during final years

f 100% PTC

Solar wins past 2020 due to falling cost, ITC extension and favorable diurnal generation Large spread driven by F1000 goal setting behavior and REC usage Baseline 10-year capacity additions: Wind: 13 GW Solar: 48GW

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Thank You!

Colin Smith Senior Analyst Colin.Smith@woodmac.com

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n the world’s natural resources. We are a leading research and consultancy business for the global energy, power and

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Wood Mackenzie™, a Verisk business, is a trusted intelligence provider, empowering decision-makers with unique insight

n the world’s natural resources. We are a leading research and consultancy business for the global energy, power and