Joined at the hip: the US-China clean energy relationship Center for Strategic & International Studies, Washington DC Nathaniel Bullard Bloomberg New Energy Finance, 2004-2010 26 October 2010
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US and China power production, 2005 20e (GWh) China US 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2005 2010 2015 2020 Coal Natural gas Nuclear Hydro Other renewables 5% annual electricity growth 2011 20 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2005 2010 2015 2020 Coal Natural gas Oil Nuclear Hydro Other renewables 1% annual electricity growth 2011 20 Note: For US, coal includes a small but growing amount of new CCS generation from 2011. Assumes a USD 6.90mmbtu natural gas price 2010 20. A lower natural gas price would result in less coal generation and more natural gas generation. 3 US-China clean energy: joined at the hip, 26 October 2010
Clean energy asset finance new build in US and China, 2004 Q1 2010 (USD bn) Annual investment Cumulative investment since 2004 30 150 25 20 15 10 5 Q1 only 125 100 75 50 25 0 2004 2005 2006 2007 2008 2009 2010 United States China United States Cumulative China Cumulative 0 Note: All figures are grossed and buffered to include estimates for undisclosed and unknown deals 4 US-China clean energy: joined at the hip, 26 October 2010
Top 10 Tier 1 c-si cell manufacturers and top 15 wind turbine manufacturers, end-2009 Top 10 PV cell manufacturers, 2009 Top 15 wind turbine producers, 2009 Name (Country) Current capacity (MW) Name (Country) Production (GW) Suntech (China) 1,090 Q-Cells (Germany) 1,000 JA Solar (China) 800 SolarWorld (Germany) 710 Sharp (Japan) 695 Trina Solar (China) 600 Yingli (China) 600 Canadian Solar (China) 420 SunPower (US) 414 Solarfun (China) 360 Vestas (Denmark) 6.3 GE Wind (US) 5.8 Sinovel (China) 5.8 Gamesa (Spain) 4.4 Suzlon (India) 3.5 Goldwind (China) 3.4 Enercon (Germany) 3.3 Dongfang (China) 3.3 Repower (Germany) 2.9 Nordex (Germany) 2.5 Acciona (Spain) 2.5 Siemens (Germany) 2.2 Mitsubishi (Japan) 1.6 XEMC (China) 1.2 Clipper (US) 1.0 5 US-China clean energy: joined at the hip, 26 October 2010
California Solar Initiative photovoltaic module suppliers by country of corporate headquarters, Q3 2007 Q3 2010 (% of total) 100% 90% 80% 1% 7% 10% 5% 8% 21% 12% 4% 2% 2% 3% 2% 2% 6% 2% 6% 7% 3% 13% 12% 4% 8% 14% 10% 5% 4% 6% 2% 9% 5% 2% 6% 3% 5% 1% 13% 5% 2% 8% 70% 60% 41% 26% 35% 42% 41% 35% 19% 33% 30% 29% 26% 20% 29% 50% 40% 30% 18% 10% 3% 7% 18% 12% 29% 17% 16% 28% 39% 41% 29% 20% 10% 22% 37% 42% 35% 28% 37% 33% 30% 36% 26% 14% 17% 25% 0% Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 US China Japan Germany UK Canada Other Europe Other Asia, CSI 6 US-China clean energy: joined at the hip, 26 October 2010
US dollar to Chinese renminbi, January 2005 October 2010 Source: Bloomberg 7 US-China clean energy: joined at the hip, 26 October 2010
US dollar to euro, January 2005 October 2010 Source: Bloomberg 8 US-China clean energy: joined at the hip, 26 October 2010
China Development Bank loans to clean energy manufacturers, April-September 2010 (USD m) $11,400m $13,300m Suntech, $7,300m Total = $33bn LDK Solar, $8,900m Trina Solar, $4,400m Goldwind, $6,000m Yingli Green Energy, $5,300m JA Solar, $4,400m April May June July September Note: PV manufacturing companies encompasses raw material, wafer and module producers 9 US-China clean energy: joined at the hip, 26 October 2010
Value breakdown of PV modules from leading Chinese and US manufacturers, mid-2010 Value breakdown by company country of origin, Suntech module Value breakdown by manufacturing country of origin, SunPower module Total 18.3% $81.7% % Content Total 17.5% 48.7% 33.8% % Content Module Assembly $0.58/W Gross Margin 11% Module Assembly $0.68/W Gross Margin 14% Cell $0.43/W 6% Cell $0.46/W 7% Ingot Wafer $0.54/W 21% Ingot & Wafer $0.52/W 15% Polysilicon $0.35/W 44% Polysilicon $0.35/W 45% Overseas China Korea Phillippines US Note: Based on where the product is manufactured. Polysilicon production for Suntech is provided by US-based MEMC. Note: Based on where the product is manufactured. Polysilicon from Korean DC Chemical, wafers by a Philippines-based First Philec-SunPower JV, cells in a Philippines SunPower factory, and module assembly in Mexico or Poland. 10 US-China clean energy: joined at the hip, 26 October 2010
Value breakdown of wind project using equipment from leading US and Chinese manufacturers, mid-2010 Value breakdown by company country of origin, GE 1.5MW turbine installed in China Value breakdown by company country of origin, Sinovel 3MW turbine installed in US Total 35% 57% 8% Total 10% 53% 37% Others 4% 17% Others 4% 17% Control System 5% Control System 5% Power Converter 5% Power Converter 5% Main Bearings 3% Main Bearings 3% Generator 3% Generator 3% Gearbox 13% Gearbox 13% Blades 23% Blades 23% Tower & Foundation 27% Tower & Foundation 27% International China US International China US Note: Based on the country of origin for the company producing the product, not necessarily where the product was produced. 11 US-China clean energy: joined at the hip, 26 October 2010
Estimation of value creation for a hypothetical Texas wind farm (USD 000/MW) 775 198 1457 595 301 381 1198 115 304 182 155 134 184 670 Bearings Control systems Driveshaft, Gearbox, Generator Tower Rotor, nacelle, blade Turbine assembly Transport Construction & BOP Financing O&M Total International China US Source: CSI, Bloomberg New Energy Finance Note: Assumed to be using 3MW turbine from China, 75%/25% China/US financing, blades may end up being produced in the US. 12 US-China clean energy: joined at the hip, 26 October 2010
VC/PE investment in US and China PV manufacturing companies, 2004 Q3 2010 (USD m) $1,707 $1,186 $733 $700 $518 $45 $105 $82 $223 $41 $150 $56 $16 2004 2005 2006 2007 2008 2009 2010 Q1-Q3 US China Note: PV manufacturing companies encompasses raw material, wafer and module producers 13 US-China clean energy: joined at the hip, 26 October 2010
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