Petron Group LLP predicts Energy and fuel prices in the United States

1. USA RENEWABLE ENERGY REPORT

2. About Petron Group LLP
▪ Petron Group LLP is an emerging and rapidly evolving Private Equity
Firm who invests in socially and environmentally responsible
Projects.
▪ The company has launched the Alternative Power Generation
Fund to deal with this growing concern of climate change while
simultaneously generating profit in the process, as Industry leaders it
is our responsibility to upkeep our environment.
▪ This report focuses on alternate energy technologies as a
remarkable solution to cope up with climatic change issue and fulfil
global energy requirements.

3. At a Glance
Total
generation of
electricity for
all sectors
67%
33%
7%
6%
19%
27%
39%
Other
renewable…
Hydro
Nuclear
Natural gas
Coal
In 2014, the United States generated around 4093 billion Kilowatt hours of electricity
Principal sources
of United States
Electricity generated measured in Billion kwh , Over the decade from 2004 to 2014
2014
According to the US Bureau of labor
statistics show that average electricity
prices across the United States have
risen for nine of the last 10 years
Natural gas
(+412bKwh)
Wind
(+168)bKwh
Solar
(+18)
Coal
(-393bKh)
Petroleum
(-90) Bkwh
2004
Around 67% of
the electricity
generated was
from fossil fuels
such as coal,
natural gas and
petroleum

4. USA Electricity Allocation
4
Last Year, the United States generated around 4093
billion Kilowatt hours of electricity. From wholesome
amount
Around 67% of the electricity
generated is from fossil fuels such
as coal, natural gas
and petroleum. Coal (39%),
natural gas (27%)
Hydro (6%) and other
renewable energy sources
(7%) last year wind and
solar combined increased
186 billion kWh
The largest increase
in electrical generation came
from natural gas (in 2014
electricity generated was 412
billion kWh greater than 2004)
The largest decrease in the
electricity generation from the
coal by 393 billion kWh and
from petroleum decreased by
90 billion kWh.
4093
billion kwh
Fossil fuels

5. Electricity Price Trends
0
20
40
60
80
100
2013 2023 2033
These statistics seem to verify warnings that US electricity costs will increase
+51%
+21%
If this trend continues, the
average kilowatt hour of
electricity could cost
$162.86¢
The average price of electricity is skyrocketing these days in United States
8.64
36.9
Last decade Current
• Recent history seems to justify these projections, as electricity
rates have increased by 42 percent in the last decade.
• In fact electricity costs are rising at twice the rate of inflation,
according to The Washington post.
Average residential rates by state

6. Electricity Price Trends
These statistics seem to verify warnings that US electricity costs will
increase
If this trend continues,
the average kilowatt
hour of electricity
could cost
$1
62.86¢
The average price of electricity is skyrocketing these days in United
States
8.64
36.9
Last decade Current
• Recent history seems to justify these projections, as electricity rates
have increased by 42 percent in the last decade.
• In fact electricity costs are rising at twice the rate of inflation,
according to The Washington post.
Average residential rates by state
+21%
+51%
0 50 100 150 200 250
2013
2023
2033

7. 7
8.37 8.53 8.67 9.06 9.3
37.34
17.88 17.62 17.34 17.01
446%
209% 203%
191% 182%
0%
100%
200%
300%
400%
500%
0
5
10
15
20
25
30
35
40
USA Electricity Market
Price Gap Assumption Per Kwh
Matching Trade data is only a small part of what we do best
Buy Sell Price Gap
KWhLouisiana
Hawaii
PriceGap
Price Per Kwh
Washington
Alaska
PriceGap
Idaho
Newyork
PriceGap
NorthDakota
Connecticut
PriceGap
Arkansas
Vermont
PriceGap

8. There is no one cause for the
continuing rise in electricity rates.
Instead, several factors combine
to keep the amount climbing.
These factors include
"Everywhere you Look New regulations Driving Electricity
prices higher" Coal Plants are Shutting down, Power
Outages Left and right, Renewable Energy is no longer
only used against Global Warming, It has became a
national Security issue, It is EEFC Responsibility to Protect
America and our environment
- Richard H Stone, CEO of EEFC Energy a leader in
Renewable Power Generation
 All fossil Fuel Power Plants will have to be upgraded
to comply with the new regulations. That can cost
hundreds of Hundreds of millions of dollars. One
Company, EEFC Energy, has already have taken
the Initiative to comply with these new regulations.

9.  Large companies like Apple, Walmart, Google,
Verizon, and Kroger are increasingly generating
their own electricity. When big business
disconnects from the grid – thus taking revenue
away from electric companies — the cost of
maintaining it and generating electricity gets
passed onto homeowners and small business.
 Stringent new air pollution regulations
implemented by the Obama administration
could force more than 200 coal burning power
plants to close. Utilities will have to spend big
money to build new plants to replace those
facilities or buy electricity elsewhere. That cost
will be passed onto consumers.

10. Factors (Cont.)
 New emissions rules on mercury, acid gases and
other toxics by the Environmental Protection
Agency are expected to result in significant
losses of the nation's coal-generated power,
historically the largest and cheapest source of
electricity. Already, two dozen coal generating
units across the country are scheduled for
decommissioning. When the regulations go into
effect next year, 60 gigawatts of capacity —
equivalent to the output of 60 nuclear reactors
— will be taken out of the system, according to
Energy Department estimates
 One recent study predicts the cost of electricity
in California alone could jump 47% over the next
16 years, in part because of the state's shift
toward more expensive renewable energy

11. Factors (Cont.)
 In fact, the price of electricity has already been
rising over the last decade, jumping by double
digits in many states, even after accounting for
inflation. In California, residential electricity prices
shot up 30% between 2006 and 2012, adjusted
for inflation, according to Energy Department
figures. Experts in the state's energy markets
project the price could jump an additional 47%
over the next 15 years.
"We are now in an era of rising electricity prices
“ also "the steady reduction in generating
capacity across the nation means that prices
are headed up"
"If you take enough supply out of the system, the
price is going to increase"
- Philip Moeller, a member of the Federal Energy
Regulatory Commission

12. Factors
 The problems confronting the electricity system
are the result of a wide range of forces: new
federal regulations on toxic emissions, rules on
greenhouse gases, state mandates for
renewable power, technical problems at nuclear
power plants and unpredictable price trends for
natural gas. Even cheap hydro power is
declining in some areas, particularly California,
owing to the long-lasting drought.

13. Emergency Power Outages (1/4)
 A fifth of all power-generating capacity in a grid
serving 60 million people went suddenly offline, as
coal piles froze, sensitive electrical equipment
went haywire and utility operators had trouble
finding enough natural gas to keep power plants
running. The wholesale price of electricity
skyrocketed to nearly $2 per kilowatt hour, more
than 40 times the normal rate. The electrical
system's duress was a direct result of the polar
vortex, the cold air mass that settled over the
nation. But it exposed a more fundamental
problem. There is a growing fragility in the U.S.
electricity system, experts warn, the result of the
shutdown of coal-fired plants, reductions in
nuclear power, a shift to more expensive
renewable energy and natural gas pipeline
constraints. The result is likely to be future price
shocks. And they may not be temporary.

14. Emergency Power Outages (2/4)
 Moeller, the federal energy commissioner, warns
that these rapid changes are eroding the system's
ability to handle unexpected upsets, such as the
polar vortex, and could result in brownouts or even
blackouts in some regions as early as next year. He
doesn't argue against the changes, but believes
they are being phased in too quickly.
 The federal government appears to have
underestimated the impact as well. An
Environmental Protection Agency analysis in 2011
had asserted that new regulations would cause
few coal plant retirements. The forecast on coal
plants turned out wrong almost immediately, as
utilities decided it wasn't economical to upgrade
their plants and scheduled them for
decommissioning

15. Emergency Power Outages (3/4)
 The lost coal-generating capacity is being
replaced largely with cleaner natural gas, but the
result is that electricity prices are linked to a fuel
that has been far more volatile in price than coal.
The price of natural gas now stands at about $4.50
per million BTUs, more expensive than coal. Plans
to export massive amounts of liquefied natural
gas, the rapid construction of gas-fired power
plants and the growing trend to convert the U.S.
heavy truck fleet to natural gas could exert even
more upward pressure on prices. Malcolm
Johnson, a former Shell Oil gas executive who now
teaches the Oxford Princeton Program, a private
energy training company, said prices could move
toward European price levels of $10.

16. Emergency Power Outages (4/4)
 "When those natural gas prices start going up
again, we will feel it in the way of higher electricity
prices," warns James Sweeney, a Stanford
University energy expert.
 The loss of coal is being exacerbated by problems
at the nation's nuclear plants. Five reactors have
been taken out of operation in the last few years,
mainly due to technical problems. Additional
shutdowns are under consideration.

17. Renewable Energy Mandate (1/2)
 At the same time, 30 states have mandates for
renewable energy that will require the use of more
expensive wind and solar energy. Since those
sources depend on the weather, they require
backup generation — a hidden factor that can
add significantly to the overall cost to consumers.
 Nowhere are the forces more in play than in
California, which has the nation's most aggressive
mandate for renewable power. Major utilities must
obtain 33% of their power from renewable sources
by 2020, not counting low-cost hydropower from
giant dams in the Sierra Nevada Mountains.

18. Co-Sponsors
There are three key programs through which the Recovery Act is driving
manufacturing and deployment of renewable energy technologies:
 Over $3 billion so far
in payments-in-lieu-
of-tax -credits to over
500 projects in 44
states to support
renewable energy
generation projects
 Supports more than
10,000 construction
jobs and over 2,000
ongoing operating
and maintenance
jobs
 Brings more than 4
GW of new
renewable energy
online
 Leverages $2 of
private capital for
every $1 of tax
credits
Payment-in-
Lieu-Of-Tax-Credits
(1603)
Manufacturing
Tax Credits (48C)
Loan
Guarantees
 $2 billion in
conditional or closed
loan guarantees for
renewables
deployment and
manufacturing
projects
 Projects will create or
save more than 5,000
construction and
permanent jobs, lead
to more than 3 GW of
clean power
generating capacity,
and avoid more than
30 million tons of CO2
per year, according
to company
estimates.
 Leverages more than
$4 of debt and equity
for every $1 of loan
guarantee subsidy
 Over $2 billion
in tax credits to
183 projects in
43 states for
clean energy
manufacturing
projects
 30 percent tax
credit for
qualifying
advanced
energy projects
in new,
expanded, or
re-equipped
domestic
manufacturing
facilities
 Competition
was more than
3x
oversubscribed
 Leverages $2 of
private capital
for every $1 of
tax credits

19. Investment Strategy
 We typically Invest into Power Generation
companies that operate eco friendly and has a
unique competive advantage to disrupt the
market globally.
 While our investment decisions are based primarily
on company-specific factors, we also consider
external factors (e.g., industry trends, regulations,
geopolitical risk). Companies in the energy
business are strongly influenced by broader
industry themes that will have a role in shaping our
prospects over the long term. As a component of
our Investment Strategy, we evaluate the price
differentiation. We evaluate key energy trends.
and highlight emerging market growth,
Regulations, and countries commitment towards
climate change policy.

20. Shifting Focus
 Alternative Energy is a large, diverse, and dynamic industry. It’s
not just about oil – consumption around the world is quite varied
by source. Over our three- to five-year investment horizon, we
believe that the traditional sources of energy (e.g., oil, gas, coal)
will continue to be the Obsolete energy inputs for the global
economy. Oil and gas comprise roughly 50% of the world’s
consumption, and, if you include coal, the amount is closer to
90%. Although its market share is currently small, alternative
energy has increased its share of the mix. Alternative energy
sources (e.g., solar, wind, bio-fuels, nuclear) are likely to continue
to grow faster than traditional energy sources. Yet, it’s important
to remember that energy changes generally happen gradually
because of long investment cycles, the scale and complexity of
the industry itself, and changing consumer preferences and
behaviors. the Petron Group LLP Funds seek to participate in the
rapid shifts to alternative energy.
 Isaac S Udotong Managing Partner said “ Petron predicts that
Energy prices will continue to rise with or without Competition,
Energy Inflation is 2x the rate of inflation, that’s trillions of Dollars
of new Cash Flow being Injected annually in the Electricity
market.!!

21. Barrier of Entry (1/2)
 These Structural barriers include high economies of scale, large
capital requirements, high upfront sunk costs, long lead times and
others. Regulatory barriers may also limit the entry decision as they
entail non-trivial supplementary costs and delays to the entrant.
Projects with very long time horizons like power plants are subject to
significant uncertainties about future prices, market conditions, future
cost, and the regulatory and policy frameworks. Strategic behavior
aimed at deterring new competition can also arise from excess
capacity, vertical integration and locational advantages.
 The pattern of entry in the generation segment of the electricity
supply industry of The Organization for Economic Co-operation and
Development) OECD countries, and seeks to provide an
understanding of its key determinants. The purpose is two-fold: to
evaluate the important factors influencing the entry of new
generators at the domestic level, from new firms and incumbent firms,
and to assess the determinants of entry into the different available
generation technologies, in particular those based on renewable
energy sources, so as to derive implications for the design of policies
aimed at spurring competition in the electricity supply industry which
are increasingly subject to significant renewable energy objectives.
4 types of Barriers for new Firms to enter the Electricity market:

22.  Yet, outside the major pension funds and insurance companies
institutional investor allocations to clean energy projects remain
limited, particularly when it comes to the types of direct investment
which can help close the financing gap. Reasons for institutional
investor hesitancy include a lack of information and expertise when it
comes to the type of direct infrastructure investment required to
finance clean energy projects. And a potentially unsupportive
regulatory backdrop. These problems are compounded by a lack of
suitable investment vehicles providing the risk/return profile that
institutional investors need to manage the risks specific to clean
energy projects. There are many species of risk including regulatory
risk stemming from a lack of clarity in the terms of environmental and
climate policy, and retroactive changes to support mechanisms.
Progress is being made with investor groups coming together to use
their scale and build their expertise in clean energy investment. From
the public sector, actions are underway to scale up green bond
offerings, create risk-mitigating public finance mechanism and co-
investment funding structures. These initiatives need to be
encouraged, carefully monitored and expanded where successful.
 Given the scale of the USD 71 trillion in capital in the hands of
institutional investors and evidence of an emerging interest on their
part for clean energy investments, an important question for policy
makers is which potential barriers may be preventing institutional
investors from significantly scaling up their commitments.
Barrier of Entry (2/2)

23. Market Outlook
 After two years of annual declines, investments in clean energy
worldwide jumped 9% year over year in the first quarter of 2014,
according to data released Wednesday by Bloomberg New Energy
Finance (BNEF), a London-based energy analysis firm. Solar power led
the way with a 23% increase, more than offsetting a 16% decline in
wind power. All told, investors spent $47.7 billion on renewables and
energy efficiency in the first three months of this year.
 Global investment in renewable energy is up, technology costs
continue to drop precipitously, and markets are expanding into
emerging economies in Asia, the Middle East, and Africa. The industry
still has a long way to go, and many say a shift to cleaner energy is
happening too slowly to offset the downside of carbon-heavy fuels.
Even so, the broad, global outlook for renewable is bright, and
deployment of the technology verges on rapid acceleration.
 Investment could still fall again in all of 2014. But the underlying
principles point to a dramatic if eventual change in the way people
power their homes and fuel their cars.
 "The financial crisis, cheap natural gas, subsidy cuts by cash-strapped
governments, and a flood of imports from Chinese solar-panel
manufacturers have profoundly challenged the industry's short-term
performance. But they haven't undermined its potential," McKinsey &
Company's report reads. "The industry is poised to assume a bigger
role in global energy markets; as it evolves, its impact on businesses
are consumers will be significant and widespread"
2014 Clean energy is making a comeback

24.  Decarbonizing the world’s energy system to avoid locking-in polluting
technologies and unacceptably high emission levels will require
doubling existing investment levels to around USD 2 trillion a year or
2% of GDP. Governments understand that large sums of capital will
be required, and many are also realizing the need for further recourse
to private capital as public finances have become strained in many
developed countries. Simultaneously, banking sector provision of
long-term finance has become tighter due deleveraging and new
financial regulations. With their USD 71 trillion in assets, instructional
investors potentially have an vital role to play. Given the current low
interest rate environment and weak economic growth prospects in
many OECD countries, institutional investors are increasingly looking
for real asset classes which can deliver steady, preferably inflation-
linked, income streams with low correlation to the returns of other
investments. Clean energy projects may combine these sought after
characteristics.
Vision for the Future

25. Future Forecast for Renewable Energy
 Wind solar and other forms of renewable energy will be a growing
power sources over the next few decades.
 The U.S. Energy Information Administration forecasts renewable
energy will be the fastest-growing power source through 2040.
 New investments in renewable energy rose from $9 billion in the first
quarter of 2004 to $50 billion for 2015’s first quarter, according to
Bloomberg New Energy Finance, and the volume of installed
photovoltaic systems in the United States has grown every year since
2000.
 The story that renewable energy advocates often share of how their
favorite power sources have grown so rapidly over recent years
believes the reality that those industries have expanded from small
market shares to start.
 Yet with increasing interest, investors are targeting renewables as
strong assets,
Steven S Yagi, Operating Partner of Petron Group LLP, an USA Private
Equity firm said.
“ We are taking renewable power to the next level, and eventually all
the coal-burning power plants will be decommissioned and replace
by our state of the art clean technology, everyone needs energy, but
we do not need to pollute the People to meet these needs,

26. The above information is not a complete analysis of every material fact
concerning any market, industry or investment. Data has been obtained
from sources considered reliable, but Petron Group LLP makes no
representations as to the completeness or accuracy of such information.
Opinions expressed are subject to change without notice. The
information provided is historical and does not predict future results or
profitability. This is not a recommendation to buy, sell, or hold any security
and is not indicative of Petron groups LLP current or future trading
activity. The securities identified are subject to change without notice
and may not represent an account’s entire holdings. Before investing in
any Petron Group LLP, you should carefully consider the Fund’s
investment objectives, risks, and management fees and other expenses.
To obtain a Fund’s Memorandum and summary, which contain this and
other important information, visit www.petron-group.com
Please read the Investment memorandum and summary carefully before
investing.
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