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Aug 30, 2023 554 likes •1.25k views

PV Market & Industry Development From self-consumption to 100% RES, a paradigm shift for PV Ir Gatan Masson PV Markzttan Masson, Director Director, Becquerel Institute Becquerel Institute Content & Strategy, Solar United

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PV Markzttan Masson, Director Becquerel Institute

PV Market & Industry Development

From self-consumption to 100% RES, a paradigm shift for PV

Ir Gaëtan Masson Director, Becquerel Institute Content & Strategy, Solar United Vice-Chairman, EU PV Technology & Innovation Platform Operating Agent, IEA-PVPS Task 1

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2 Solar United – UNSW October 2016 Becquerel Institute 2

BECQUEREL INS INSTITUTE

  • Research oriented Institute and

consulting company for Solar Technologies.

  • Global PV Market Analysis including

competitiveness and economics.

  • Industry analysis together with quality &

reliability.

  • Integration into electricity systems (grids

and markets).

  • In-house experts / Global network of

experts and stakeholders

  • PV Market Alliance partner
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IEA INTERNATIONAL ENERGY AGENCY PHOTOVOLTAIC POWER SYSTEMS PROGRAMME

What is IEA PVPS?

  • Implementing Agreement from

International Energy Agency – Technology Collaboration Program

  • Established in 1993
  • 29 members: 24 countries, European Commission, 4

associations

  • Strategy 2013-2017: “To enhance the international

collaborative efforts which facilitate the role of photovoltaic solar energy as a cornerstone in the transition to sustainable energy systems”

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  • PV market development
  • PV prices and technology
  • Competitive PV tenders
  • PV competitiveness
  • 100% RES
  • Self-consumption
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  • 1. Market Development
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FROM 1.1 .1 TO 50 GW IN IN 11 YEARS

51 GW

Source: IEA-PVPS 2015

228 GW

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CONFIDENCE IN IN NUMBERS ?

  • From 50 to 59 GW installed in 2015
  • Who’s right, who’s wrong ?
  • Counting apples, pears… and more ?
  • Some rules
  • Counting AC numbers is simply wrong  switch to DC
  • r count both.
  • What does « installed » means? Commissioned?
  • Production > shipments > installations …
  • …
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TOP 10 IN INSTALLATIONS AND TOTALS

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ENERGY VS POWER

PV Market Alliance

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TOP 1 TO 10 MARKETS

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PROSPECTS FOR DEVELOPMENT

« The Policy Triangle »

Source: PV Market Alliance – Becquerel Institute 2016

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5 5 YEARS FORECASTS ?

  • Many countries haven’t stepped in the PV market in a

sustainable way (see China, Japan or the US)

  • Those that have (Europe) are experiencing difficulties.
  • Tenders that are popping up are by definition policy-

driven: policy stops, the PV market stops

  • Self-consumption is difficult to implement (see China,

Italy…)

  • Uncertainties reflect, not the intrinsic PV potential but

the difficulties to realize that potential.

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A TALE OF 2 MARKETS

Distributed PV Centralized PV

Prosumers Producers

Grid injection, PPA, competition with utilities generation business Self-consumption, energy effiency, grid parity, competition with utilities distribution business

One technology

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SEGMENTATION OVER TIM IME

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WHAT KIN IND OF MARKET AHEAD?

Source: PV Market Alliance – Becquerel Institute 2015

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SHARE PER REGION

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MARKET IN INCENTIVES

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  • 2. Prices and Technology
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THE CSI LEARNING CURVE

Source: ITRPV 7th Edition - 2016

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CRYSTAL BALL ANALYSIS?

  • The Learning curve concept is an empirical way of

looking at COSTS decrease (due to technology improvements).

  • Has been theorized for semi-conductors well before

PV (BCG)

  • Prices vs Costs
  • Automation, industrialisation, different cost paradigm

in China (cheaper equipment…)…

  • Range of costs and prices: LC is perfect for low prices

but what for emerging technologies?

  • Modules or cells?
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ANOTHER PERSPECTIVE

Source: Becquerel Institute 2016

What about the costs ?

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PUBLIC IC DATA AND FORECASTS

  • Jinko announced (Q1-2016):
  • 0,37 USD/Wp production costs (others are close: 0,41-0,43)
  • 0,29 USD/Wp end 2017
  • 0,25 USD/Wp in 2020 (First Solar as well)
  • With GPM at 20%: 0,44 USD/Wp (and 0,35 USD FY 2017)
  • Prices and cost decline on a 30%+ learning curve
  • Official low market prices (Q3-2016): 0,38 USD/Wp
  • Prices for large orders: Down to 0,3x USD/Wp ?
  • Super competitive tenders (Dubai, Jordan, Peru, India)

are done with multi-Si, CdTe or aSi.

  • Large part of the PV market with higher prices !
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PV PRIC ICE LEARNING CURVE

0,4 USD/Wp

97% production 37% LC 20% LC

0,45 USD/WP – 275 GW

Source: Becquerel Institute 2016

0,38 USD/WP – 300 GW

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SIZ IZE MATTERS TO LOWER COSTS

Source: Fraunhofer ISE & IPA, 1 GW Study 2014

Quest for 10 GW is

  • ngoing
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WHAT ABOUT TECHNOLOGIES?

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THIN IN FIL ILM LEARNING CURVES

Source: Becquerel Institute 2016

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THIN IN FIL ILM ROADMAP

  • CdTe LC – 16-20% (Trina Solar, Becquerel Institute)
  • Costs and prices (annouced) significantly different
  • CIGS LC – 8-10% (Trina Solar, Becquerel Institute)
  • But why? One single main producer on a protected

market (JP)? Technology intrinsic characteristics?

  • Risk that TF might have difficulties to cope with cSi

price decline… ?

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HOW MUCH NEW CAPACITIES ARE NEEDED (A (AND WHEN)? )?

Source: PV Market Alliance – Becquerel Institute 2016

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2015 CAPACITIES

Source: RTS Corporation, do not use or reproduce without explicit agreement

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HOW MUCH NEW CAPACITIES ARE NEEDED?

Source: Becquerel Institute 2016

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A NEW PRIC ICE WAR

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3. . COMPETITIVE TENDERS

Source: Solar Power Europe – Global Market Outlook 2016 based on International Energy Agency data

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COMPETITIVE TENDERS

Is 0,03 USD/kWh realistic ? What is needed ?

  • Yield:

2000 kWh/kWp

  • CAPEX:

0,7 EUR – 0,8 USD/Wp

  • OPEX:

15 EUR/kW

  • WACC:

4% (nominal)

  • Degradation:

0,5%

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SENSITIVITY OF LCOE

0.02 0.04 0.06 0.08 0.1 0.12

Contribution to the LCOE per components in absolute value (LCOE = 0,107 EUR/kWh)

Source: Becquerel Institute 2016

1 EUR/WP CAPEX 30 EUR/Wp OPEX 6% Nominal WACC 1100 kWh/kWp Yield

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FUTURE CAPEX

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RESIDENTIAL PV LCOE IN IN UK

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RESIDENTIAL PV LCOE IN IN IT ITALY

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COMPETITIVENESS

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4. . 100% RES ?

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SELF-CONSUMPTION

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ROOFTOP PV DEVELOPMENT

PV Market Alliance

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BUSINESS MODELS

Prosumers Producers

Sale of electricity Savings on the electricity bill + Sale of excess PV electricity Net-metering Self- consumption + market price + FiT/FiP FiT / TGC Market price (+ premium? FiP)

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WIT ITH OR WIT ITHOUT PV PV

Electricity bill Electricity bill

Sales of PV Electricity

Building without PV

  • Electricity comes from

the grid Building with PV

  • Part of electricity produced

by PV is consumed in the building (reducing the electricity bill)

  • Non-consumed electricity

goes to the grid and is sold

  • When PV is not producing,

the electricity comes from the grid

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COMPETITIVE PV ?

CAPEX of PV System Savings on electricity bills Sales of excess electricity

< +

During PV systems’ lifetime (20-35 years)

OPEX of PV System

+

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ECONOMIC ICS OF SELF-CONSUMPTION

+ self-consumption taxes + sales of PV electricity Savings & Sales

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COMPONENTS OF ELECTRICITY

How much can be compensated from the electricity bill ?

99% 98% 97% 97% 97% 97% 97% 97% 96% 94% 85% 83% 79% Italy Turkey France Belgium Netherlands Switzerland Portugal UK Poland Denmark Austria Germany Spain

Maximum savings on electricity bills (average)

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SALES OF PV ELECTRICITY

Access to wholesale electricity markets 1. Current Excess PV electricity gets a FiT 2. Current Excess PV electricity gets a FiP above the market price 3. Future Excess PV electricity gets the market price though an aggregator 4. Future Excess PV electrivity gets the market price directly European Legislation pushed to integrate renewable into wholesale electricity markets

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SELF-CONSUMPTION RATIO IO

SC ratio = PV production locally consumed / total PV production Hypothesis used: 50% SC - Commercial segment / 75% SC - Industrial segment

  • Example: commercial segment in France 2015
  • Retail electricity price: 0,144 EUR/kWh
  • Wholesale market price: 0,045 EUR/kWh
  • Average value of PV electricity compared to the LCOE of PV electricity (average): 0,10 EUR/kWh

25% SC 0,061 EUR/kWh 50% SC 0,083 EUR/kWh 75% SC 0,116 EUR/kWh 100% SC 0,144 EUR/kWh

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57 Solar United – UNSW October 2016 Becquerel Institute 57

THE SC RATIO CHALLENGE

Self-consumption of PV installations 20 to 100% Challenge: minimizing grid injection Solutions: decrease PV system size, DSM, Storage

500 1000 1500 2000 2500 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Power (W) PV prod Consum

Grid consumption Self-Consumption Grid injection

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IM IMPACT OF SC RATIOS

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2 4 6 8 10 12 14 16 Percentage (%) PV power (kWp) Selfconsumption / Consumption Autoconsumption / PV production

Ratios are smaller in the residential sector (20-30%). DSM, system size, storage can increased them. Commercial and industrial applications can reach higher ratios. But is local

  • ptimization of SC
  • ptimum from a

system point of view ?

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DSM & STORAGE SOLUTIONS

500 1000 1500 2000 2500 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Power (W) PV prod Consum

Grid consumption Self-Consumption Grid injection

DSM Electricity Storage Other uses(out of the load) H&C, Transport

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SELF-CONSUMPTION BUSINESS CASE

  • A simple (residential) business model in Belgium

PV electricity production cost: 0,12 EUR/kWh (950 kWh/kWp + 1,5 EUR/WP + WACC @ 4%) Residential electricity prices 0,2 EUR/kWh (assuming 100% savings

  • n electricity bill)

Value of injected electricity = 0,04 EUR/kWh (Net-metering with grid tax: +0,13 – 0,12 = +0,01 EUR/kWh) With 30% SC: +0,09 – 0,12 = -0,03 EUR/kWh With 70% SC: +0,15 – 0,12 = +0,03 EUR/kWh

Margin for investment in Smart tools, storage or H&C

NPV_20years (i=2%) for a 5kWp PV system = 2400 EUR

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REGULATIONS & PARAMETERS

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A A NEED FOR REGULATIONS

Onsite Self- Consumption Right to self- consume

  • Self-consumption is legally permitted

Revenues for self- consumed PV electricity

  • Savings on the variable price of electricity from the grid

Charges to finance T&D costs

  • Additional costs associated to self-consumption such as fees or taxes may exist

Excess PV Electricity Value of excess electricity

  • Net metering: energetic compensation (credit in kWh)
  • Net billing: monetary compensation (credit in monetary unit)

Maximum timeframe for compensation

  • Self-consumption: real time (e.g 15 minutes)
  • Net metering and net billing: time frame is typically one year although there are some

exceptions (from credits that can be rolled over to the following billing cycle to quarterly compensation)

Same between shemes Main differences Key:

5250 28600
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CATEGORIES OF SELF-CONSUMPTION

On-site PV self- consumption Right to self-consume Revenues from self-consumed PV Charges to finance T&D costs Excess PV electricity Revenues from excess electricity Maximum timeframe for credit compensation Geographical compensation Other characteristics

  • f the system

Regulatory scheme duration Third-party ownership Grid codes and additional taxes/fees Other enablers of self-consumption System capacity limit Aggregate capacity limit 7 8 9 1 2 3 4 5 6 10 11 12

Clarify existing and future schemes, Allow comparison from

  • ne

scheme to another Consider some emerging questions such as:

  • How to finance the grid?
  • How

to keep government revenues stable?

  • How to save utilities ?
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WHIC ICH POLIC ICIES ?

Production based: classical "FiT" - style. No self-consumption Self-consumption with constrains Self-consumption + FiT Net-billing Net-metering Self-consumption + Premium 1 Right to self- consume Not Allowed Yes Yes Yes Yes Yes Revenues from self-consumed PV N/A Savings on the electricity bill Savings on the electricity bill Netting of production revenues and consumption costs Savings on the electricity bill Savings on the electricity bill Additional revenues on self- consumed PV N/A No No No No Premium 3 Charges to finance T&D cost N/A Yes No No No No 4 Revenues from excess electricity N/A Zero < retail price <= retail price = retail price > retail price 5 Maximum timeframe for compensation N/A Real-time Real-time Long period Long period Real time 2

GC, FiP

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THE DEBATE ON SELF-CONSUMPTION

Self-consumption will be constrained due to limited savings on the electricity bill

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IN IN SUMMARY…

Competitiveness ? Which Incentives ? Local industry vs low prices? Market Integration ? Cost of financing Quality & Reliability

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NEXT STEP IN IN EVOLUTION

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TIM IME TO SPIL ILL ;-)

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g.masson@becquerelinstitute.org g.masson@iea-pvps.org Becquerelinstitute.org www.pvmarketalliance.com Solarunited.org

Thanks for your attention