Major Energy Business Opportunities in the United Kingdom Dr Piers - - PowerPoint PPT Presentation

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Major Energy Business Opportunities in the United Kingdom

Dr Piers Willson UK Trade & Investment September 2013

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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

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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

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United Kingdom: A Low T ax Environment

23.0 34.4 33.0 27.5 25.0 39.5 20.0 19.6 19.0 21.0 21.0 4.0 45.0 45.0 45.0 43.0 52.0 39.6 13.8 32.3 21.1 29.1 11.8 6.2 25 50 75 100 125 150 United Kingdom France Germany Italy Netherlands United States %

International Tax Comparison

Corporate Tax Rate % VAT /GST Tax Rate % Income Tax Rate % Employer Social Security Rate %

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Source: Doing Business 2013, The World Bank, International Finance Corporation

Annually the World Bank ranks the ease of doing business globally based on 10 areas:

Starting a business Dealing with construction permits Getting Electricity Registering Property Getting Credit Protecting investors Paying taxes Trading across borders Enforcing contracts Resolving insolvency

Country Ease of Doing Business Rank, 2 0 1 3 UK 7 Ireland 15 Germany 20 Netherlands 31 France 34 Spain 44 Italy 73

Ease of Doing Business

September 2013

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The UK Market for Energy

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Drivers of Business Opportunities in Energy in the UK

Keep the lights on Reduce greenhouse gas emissions and meet

• bligations

Keep the cost low Ensure diversity and security of supply Renew the Grid in a ‘Smarter’ way

EEI Presentation to LEP Conference 26/03/2013

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UK Electricity Market Reform

Ensuring Capacity

• UK could run out of power
• Standby provision
• Storage solutions
• Contracts to be let from 2014 for

2018 Subsidising Delivery of low carbon power

• From uncertainty to certainty

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How does the subsidy work?

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Renewable Obligation

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Contract for Difference strike Price

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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 Technologies (Waste) 15,700 15,700 15,200 14,200 13,700

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INR 20 Lakh Crore

• pportunity

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Two Case Studies: Solar Offshore Wind

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UK Solar PV – The UK Market

• The UK currently has installed

capacity of 2.5GW

• UK Government target of 22GW

by 2020

• 2012: UK was fastest growing

large scale solar market (>5MW)

• Proposed strike price for large

solar = 12,600INR/MW

• Domestic Solar: 450,000

Installations since April 2010

50000 100000 150000 200000 250000 300000 350000 400000 450000 500000 Jul‐09 Oct‐09 Jan‐10 Apr‐10 Jul‐10 Oct‐10 Jan‐11 Apr‐11 Jul‐11 Oct‐11 Jan‐12 Apr‐12 Jul‐12 Oct‐12 Jan‐13 Apr‐13 Jul‐13

UK Domestic installations

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UK Solar PV – Opportunities for Indian Companies

50% 25% 25%

Estimated Market Breakdown 2020

Domestic Community Utility

Opportunities for:

• Sales, final assembly and

distribution

• EPC contractors for community

and utility scale

• 4 of top ten owners are foreign
• wned
• 70% of EPC contractors are

foreign-owned

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Offshore Wind

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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

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A Projection: Offshore Wind Turbine Installation to 2020

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Offshore Wind Supply Chain Opportunities

• Foundations
• Towers
• Castings and Forgings
• Blades
• Cables
• Sub-stations
• Installation and Commissioning

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• 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

Specialised Support for Investment

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INR 20 Lakh Crore

• pportunity

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Services for inward investors

Client

Visit Programmes Professional Support Property Options Financial Assistance Government Departments Specialist advice (tax, skills) Suppliers & Partners Market Information Regulation Access to Academia

Contact: piers.willson@ukti-invest.com Sushil.Rana@fco.gov.uk shruti.sharma@fco.gov.uk