SCATEC ASA Sparebank 1 Markets 2024 Energy Conference
Terje Pilskog, CEO
Disclaimer
The following presentation is being made only to, and is only directed at, persons to whom such presentation
may lawfully be communicated ('relevant persons'). Any person who is not a relevant person should not rely, act or make assessment on the basis of this presentation or anything included therein.
The following presentation may include information related to investments made and key commercial terms thereof, including future returns. Such information cannot be relied upon as a guide to the future performance of such investments. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Scatec ASA or any company within the Scatec Group. This presentation contains statements regarding the future in connection with the Scatec Group's growth initiatives, profit figures, outlook, strategies and objectives as well as forward looking statements and any such information or forward-looking statements regarding the future and/or the Scatec Group's expectations are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements.
Alternative performance measures (APM) used in this presentation are described and presented in the fourth quarter 2023 report for the group.
2
2023: All-time high installations of renewables
- Despite geopolitical and macroeconomic challenges
Global annual renewable capacity additions, GW
550 | +50% | 510 | ||||||||||||
500 | ||||||||||||||
450 | ||||||||||||||
400 | ||||||||||||||
350 | 280 | 295 | 340 | |||||||||||
300 | ||||||||||||||
250 | 194 | |||||||||||||
200 | ||||||||||||||
150 | ||||||||||||||
100 | ||||||||||||||
50 | ||||||||||||||
0 | ||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||
Other | Bioenergy | Hydropower | Wind | Solar PV | ||||||||||
Source: IEA
3
- Renewables installations accelerated throughout 2023
- Total addition of renewables increased by 50%
- Solar PV the driving force with 75% of total additions
2023: All-time high activity level and financial results
Power Production: EBITDA increase | Development & Construction: Strong margins | |
NOK 3.2bn | NOK 8.2bn | |
Power Production EBITDA | D&C Revenues with 12% gross margin | |
Optimise portfolio: Increased funding | Growth: Secured projects for 2024 | ||
NOK 2.7bn | NOK 350m | NOK 2.5bn | |
of growth funding from transactions | equity investments | secured EPC revenues | |
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Strong and predictable cash flow from operating assets
- Supported by inflation protection and interest hedges*
Power production EBITDA, NOK million | 2024 EBITDA outlook | ||||||||
3,500 | 3,216 | NOK 3,400-3,700million | |||||||
2,949 | Sale of Upington | ||||||||
3,000 | 2,835 | ||||||||
& Mocuba | |||||||||
2,500 | |||||||||
2,000 | |||||||||
1,500 | 976 | 1,404 | EBITDA, 2023 per country** | ||||||
1,000 | |||||||||
492 | |||||||||
500 | 18% | 19% | |||||||
0 | |||||||||
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | ||||
Power production, GWh
4,000 | 3,823 | 3,898 | 3,615 | |||
3,000 | ||||||
2,000 | 1,602 | |||||
1,000 | 926 | |||||
318 | ||||||
0 | ||||||
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
5 *80% of project debt with interest hedges and 90% of Power Production EBITDA is either in USD/EUR, have partial or full inflation protection through local CPI adjustments, or is based on sales in the local power market (Philippines).
**Based on normalised LTM EBITDA excluding sale of Upington & Mocuba
10%13%
7%
9% | 12% | |||
11% | ||||
Philippines | Malaysia | Ukraine | ||
South Africa | Egypt | Other | ||
Uganda | Laos | |||
Price drops pave the way for attractive growth
Solar PV module prices (USD/W) | 2024 & 2025 Est. solar PV market balance (GW) | |
0.50 | 2,500 | ||||||
0.45 | |||||||
0.40 | 2,000 | ||||||
0.35 | |||||||
1,500 | |||||||
0.30 | -45% | ||||||
0.25 | 1,000 | ||||||
0.20 | 500 | ||||||
0.15 | |||||||
0.10 | 0 | ||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
Polysilicon | Wafer | Module | ||
Ingot | Cell | PV installations | ||
20242025
- Fundamentals for renewables continue to strengthen
- PV modules -45%
o Energy storage systems -24% |
• Market balance indicating |
Turnkey energy storage system prices1 (USD/kWh)
600 | ||||||
500 | ||||||
400 | -24% | |||||
300 | ||||||
200 | ||||||
100 | ||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
2024 Exp. battery metals balance (million tonnes)
Demand Supply
1.0
0.8
0.6
0.4
0.2
0.0
Lithium Lithium Cobalt sulfate Nickel sulfate
carbonate Hydroxie
further price pressure |
• Forecasted interest rates |
adding to positive outlook |
1) Four-hour duration systems
Sources: BNEF: Bimonthly PV Index November 2023, 2H 2023 Battery Metals Outlook, Energy Storage System Cost Survey 2023, Clean Energy Associates
Renewable baseload outcompeting hydrocarbon-based energy
Kenhardt production profile, dispatchable capacity from 5am to 9:30pm
120 | PV | |
100 | ||
Hybrid | ||
80 | ||
BESS | ||
60 | ||
40 | ||
MWh | Discharge | |
20 | ||
0 | Charge5:00am | 9:30pm Hours |
-20 | ||
-40 | ||
-60 |
LCOE* of hybrid PV + BESS expected to continue downwards
140 | Coal | Solar PV | |||||||||
OS wind | Hybrid PV + BESS | ||||||||||
120 | -15% | ||||||||||
$/MWh | 100 | ||||||||||
80 | |||||||||||
60 | |||||||||||
40 | |||||||||||
7 | 20 | ||||||||||
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | |
Source: S&P Global *LCOE for South Africa |
Our strategy
Develop, build, own and operate renewable energy in emerging markets
GrowOptimise
RenewablesPortfolio
500-750
H2
million NOK annually in gross equity investments towards 2027
Focus on PV, wind and BESS due to attractive fundamentals
Selective growth within green H2 in Egypt and hydro through partnerships
More capital recycling to self fund growth and consolidate the portfolio
Capital discipline and deleverage at corporate level, positioning for future opportunities
8
Capturing full project value with several sources of revenue
Equity IRR build up
Hurdle rate | |||||||
1.2x CoE | |||||||
Cost of | 20% uplift | Power | D&C | Service | Integrated Refinancing | Asset | Lifecycle |
Equity | production | margin | margin | IRR | rotation | IRR | |
IRR |
9
Attractive returns
- 1.2x CoE from Power Production
- 8-10% gross D&C margin
- 25-30% Services EBITDA margin
- Added value from refinancing and asset rotation
Summary
- Strong fundamentals for renewables
- Solid and predictable cash flow from operating assets
- Secured profitable growth for 2024 in line with self-fundedgrowth plan
- Focus on capital discipline, capital recycling, and deleverage
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Disclaimer
Scatec ASA published this content on 05 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 March 2024 11:25:23 UTC.
