Major Energy Business Opportunities in the United Kingdom Dr Piers Willson UK Trade & Investment September 2013 1 Presentation title - edit in the Master slide
UK Trade & Investment • UKTI is the Government organisation that helps UK based companies succeed in international markets and supports overseas companies to bring high-quality investment to the UK. • UKTI has staff in over 100 markets across the world working locally to support overseas investors enter the UK market. • 84 Indian companies placed a direct investment in the UK last year. India is the third largest investor in the UK (ahead of China) • Here today are Sushil Rana and Shruti Sharma, who are based at the UK High Commission in Delhi 2 2
THE UK: A SPRINGBOARD FOR GLOBAL GROWTH The UK offers an exceptionally attractive environment for business growth: Business environm ent : appropriate levels of regulation, strong IP protection and a flexible labour force Creativity and innovation : world-class talent and R&D excellence 3
United Kingdom: A Low T ax Environment International Tax Comparison United Kingdom 23.0 20.0 45.0 13.8 France 34.4 19.6 45.0 32.3 Germany 33.0 19.0 45.0 21.1 Italy 27.5 21.0 43.0 29.1 Netherlands 25.0 21.0 52.0 11.8 United States 39.5 4.0 39.6 6.2 0 25 50 75 100 125 150 % Corporate Tax Rate % VAT /GST Tax Rate % Income Tax Rate % Employer Social Security Rate % 4
Ease of Doing Business Annually the World Bank ranks the Ease of Doing ease of doing business globally Country Business based on 10 areas: Rank, 2 0 1 3 UK 7 Starting a business Ireland 15 Dealing with construction permits Germany 20 Netherlands 31 Getting Electricity France 34 Registering Property Spain 44 Getting Credit Italy 73 Protecting investors Paying taxes Trading across borders Enforcing contracts Resolving insolvency Source: Doing Business 2013, The World Bank, International Finance Corporation September 2013 5
The UK Market for Energy 6 Presentation title - edit in the Master slide
Drivers of Business Opportunities in Energy in the UK Keep the lights on Ensure diversity and security of supply Reduce greenhouse gas emissions and meet obligations Renew the Grid in a ‘Smarter’ way Keep the cost low EEI Presentation to LEP Conference 26/03/2013 7
UK Electricity Market Reform Subsidising Delivery of low Ensuring Capacity carbon power • UK could run out of power • From uncertainty to certainty • Standby provision • Storage solutions • Contracts to be let from 2014 for 2018 8
How does the subsidy work? 9
Renewable Obligation Type your title and date here 00/00/0000 10 10
Contract for Difference strike Price Type your title and date here 00/00/0000 11 11
Contract for Difference: Sample Proposed Strike Prices INR per MW Year 2014/15 2015/16 2016/17 2017/18 2018/19 Onshore Wind 10,100 10,100 10,100 9,600 9,600 Offshore wind 15,700 15,700 15,200 14,200 13,700 Solar (over 5MW) 12,700 12,700 12,200 11,700 11,200 Marine Energy 30,900 30,900 30,900 30,900 30,900 Coal-Biomass Conversion 11,200 11,200 11,200 11,200 11,200 Advanced Conversion 15,700 15,700 15,200 14,200 13,700 Technologies (Waste) 12
INR 20 Lakh Crore opportunity Type your title and date here 00/00/0000 13 13
Two Case Studies: Solar Offshore Wind 14 Presentation title - edit in the Master slide
UK Solar PV – The UK Market • The UK currently has installed UK Domestic installations capacity of 2.5GW 500000 • UK Government target of 22GW 450000 by 2020 400000 350000 • 2012: UK was fastest growing 300000 large scale solar market (>5MW) 250000 200000 • Proposed strike price for large xx 150000 100000 solar = 12,600INR/MW 50000 • Domestic Solar: 450,000 0 Jul ‐ 09 Oct ‐ 09 Apr ‐ 10 Jul ‐ 10 Oct ‐ 10 Apr ‐ 11 Jul ‐ 11 Oct ‐ 11 Apr ‐ 12 Jul ‐ 12 Oct ‐ 12 Apr ‐ 13 Jul ‐ 13 Jan ‐ 10 Jan ‐ 11 Jan ‐ 12 Jan ‐ 13 Installations since April 2010 15
UK Solar PV – Opportunities for Indian Companies Opportunities for: Estimated Market • Sales, final assembly and Breakdown 2020 distribution • EPC contractors for community 25% and utility scale 50% • 4 of top ten owners are foreign 25% owned • 70% of EPC contractors are foreign-owned Domestic Community Utility 16
Offshore Wind 17 17 Presentation title - edit in the Master slide
UK World Leader in Offshore Wind >UK leads the world in offshore wind: In operation: 3.3 GW Under construction: 2.1 GW Installed by 2020: 8-16GW • Ambition to reduce cost to around 10,000INR per MW by 2020 • Total Potential 39GW 18 18
A Projection: Offshore Wind Turbine Installation to 2020 19 19 19
Offshore Wind Supply Chain Opportunities • Foundations • Towers • Castings and Forgings • Blades • Cables • Sub-stations • Installation and Commissioning 20
Specialised Support for Investment • 10 major locations ideally suited as offshore wind hubs in the UK • Close to Round Three Areas • Enhanced infrastructure, portside land, skilled local workforce and local supply chain capabilities Teesside / Tees Valley The Humber Tyneside Great Yarmouth & Lowestoft Liverpool Belfast Edinburgh Inverness Sheerness 21
INR 20 Lakh Crore opportunity Type your title and date here 00/00/0000 22 22
Contact: piers.willson@ukti-invest.com Services for inward investors Sushil.Rana@fco.gov.uk shruti.sharma@fco.gov.uk Visit Market Programmes Information Professional Financial Support Assistance Access to Government Client Academia Departments Specialist Suppliers & advice Partners Property Regulation (tax, skills) Options 23 Presentation title - edit in the Master slide
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