Everyone loves solar power. Except maybe Australia’s energy utilities… and some of its state governments… Anyway, we know our readers love hearing about what’s happening in the solar industry, so we thought we’d put together a list of things to look out for in the solar year ahead. Enjoy.
Hot global markets
The Middle East: With Abu Dhabi’s 100MW Shams 1 solar plant – the largest single-unit solar power plant in the world, which aims to providing 20,000 homes in the region with renewable electricity – set to switch on in the first quarter of 2013 (to be followed shortly thereafter by Shams 2 & 3, which will aim to generate similar levels of electricity) the Middle Eastern nations are looking like the ones to watch in 2013 – especially for concentrated solar power. As we wrote earlier this month, both Saudi Arabia and COP18 host country Qatar reinforced their intentions to invest tens of billions of dollars into large-scale CSP – including solar thermal and concentrated solar PV technologies – at the Doha climate talks.
Saudi Arabia intends to spend $110 billion on installing more than 41GW of solar over the coming two decades, including 25GW of CSP, while Qatar intends to build 1.8GW of large-scale solar by 2020 and has a 30 per cent renewables target by 2030. Much of this will come from CSP – with the first pilot plants featuring parabolic trough technologies opened in December to coincide with Doha. Dubai is also building a 1GW solar park, and Kuwait, which already has a 50MW CSP facility, is aiming for 15 per cent renewables (almost all CSP) by 2030.
As Giles Parkinson wrote, “the strategy is significant because the sheer weight of investment and deployment will almost certainly spark the slump down the cost curve which did not occur after the initial deployment of CSP petered out in Spain. …CSP is considered critical if any of the 100 per cent renewable energy scenarios are to be implemented, because it has the ability to add storage and provide ‘dispatchable’ energy – allowing it to smooth over and fill in the gaps between intermittent sources such as wind and solar.”
And just this week comes the news that Megalim Solar Power Limited, a special purpose vehicle of BrightSource Energy and Alstom, has won the tender for the construction of a 121MW solar thermal power plant in Israel that is expected to come online in 2017. It is one of the three projects selected under Israel’s Ashalim 250MW tender announced in 2008. The project will be located in the Ramat Negev Regional Council 3.15 square kilometer site in Nagev Desert of Israel.
Other markets to watch include India, with its newly set interim target of 9GW of grid connected solar by 2017; China – of course – with speculation arising earlier this month that it is ready to lift its target for the deployment of solar to 40GW by 2015, just weeks after the official target was raised to 21GW. This includes 3,000MW of solar thermal. South Africa is another to watch as it continues to roll out its auction system. And according to First Solar’s James Hughes, Latin America is another potentially exciting market that’s already showing signs of growth, including subsidy free plants in Chile, which has high electricity costs, plenty of sun, and a lack of alternatives.
Concentrated solar power: We know that the Gulf nations are planning to pour billions into CSP technology as part of their plan to replace oil-based power plants. Indeed Qatar’s first pilot plants featuring parabolic trough technologies were opened at the start of the month to coincide with COP18 in Doha. Outgoing Australian Solar Institute chief Mark Twidell – who listed the slow pace of CSP growth as the biggest industry low of 2012 – is encouraged by this fact, and describes it as the “missing link” in high renewable penetration scenarios. As French energy giant Alstom has also recognised, the dispatchable nature of solar thermal with storage will make it a particularly valuable form of energy in most future scenarios.
In Australia, says Twidell, several local groups are doing important work in high temperature storage – using graphite blocks, and novel liquids and metals to store high temperature fluids which can then be converted into electricity. And he says the potential for hybrids is also exciting, like pre-heating water for use in coal-fired plants and work alongside gas-fired units. But some of the most exciting local work in CSP technology is being carried out by the CSIRO, which is leading a major new research initiative in that aims to reduce the cost of the technology to between 9c and 12c a kilowatt hour, so that it will be able to compete with fossil fuels – possibly as early as 2016.
The Australian Solar Thermal Research Initiative (ASTRI) was unveiled just last week, delivering $35 million of funding from the Australian Solar Institute and the Australian Renewable Energy Agency, as part of an $87 million research program that will also draw on money from the private sector. The program brings together Australian and US research institutions, with United States research collaborators and with leading international and Australian CSP companies.
Hot Prices: Will 2013 be the year of grid parity?
Pike Research once predicted that 2013 would see solar costs reach the long-elusive goal of grid parity – the cost of electricity from traditional power sources – in many markets. And with more and more lower-cost technological developments – like this one, reported this month, which could result in solar cells that produce electricity at 45c/W – that moment is certainly starting to seem closer than ever. In markets like India and Hawaii, grid parity (or even cheaper than grid solar) looks to be just around the corner. While in Spain, October heralded its first “grid parity” solar installation, an 8kW PV system installed by German solar group Conergy.
But according to First Solar’s Hughes, all this talk of grid parity is an unnecessary, and unimportant, distraction. “Everyone wants to talk about ‘grid parity’ – I’ve banned that phrase from the lexicon of First Solar,” he told RenewEconomy in a wide-ranging interview last week. That may be because First Solar’s panels aren’t used much on rooftops. But he said at utility scale, competing with base-load energy would be a difficult proposition for “quite a while,” but solar was already competitive in other parts of the energy market value chain and could become a sizeable industry in any case. “You will see people comment that the problem with solar is that you only have a 25 per cent capacity factor. And as a former utility guy my response to that is when you have a demand curve that looks like a sine wave, something in the system has to have a capacity factor of 25 per cent.”
And here is Stefan Franko, business leader for renewables at GE’s Power Conversion business, on the subject: “As long as we have not reached grid parity, everyone will try to target price decreases. Today, we cannot really talk about prices. What I see at the moment is that everyone is selling whatever they can produce at a price they might be able to afford. Yet this cannot continue forever. I’m sure that prices will continue to drop, and they will reach a level where the costs of raw materials – like copper, steel and silicon – will be the main factors determining this price limit.”
With grid parity remaining elusive (and perhaps becoming redundant) the focus is tipped to shift to “socket parity:” the concept that while renewables may not yet be able to compete with coal-fired gas stations at the utility-scale, solar panels can deliver cheaper electricity to the consumer than the current grids. In this game, the new winners in solar will be “those who understand that the relationship with the customer is everything,” says Sunrun CEO Lynn Jurich. “We’ll see this distinction become defined among companies in the third-party-owned solar sector this year, as homeowners realise they want a reliable service in addition to solar without the high upfront cost.”
Enter solar leasing. The key, according to pvXchange co-founder Kai Malkwitz in an interview with PV Magazine last month, is to make buying rooftop solar PV “as easy as buying an Ikea kitchen.” And it’s an approach that SolarCity has so far proven to be very rewarding – and potentially game-changing. As Giles Parkinson wrote in October, SolarCity’s model has been “to tap into deep pocketed investors to fund a leasing package for consumers – offering them the opportunity to install rooftop solar at little or no cost, and benefit from the reductions in the electricity bill.”
As we wrote last month, community renewable project ownership is common in Europe and other countries. “In Germany and Denmark, the countries with the most ambitious renewable policies, it is a fundamental part of their clean energy strategy. Even if the numbers in dollar terms are relatively small, it has granted the social licence to invest the hundreds of billions necessary for the clean energy transformation.”
In Australia, the concept is yet to really take off, although dozens of community groups in Australian are hoping to implement their own local renewable energy plans (some of them, however, like those of the WISE community group in Victoria, are being thwarted by state government planning restrictions). In the wind sector, this month saw Australia’s first community wind farm, Hepburn Wind, win the World Wind Energy award for its effort in establishing the two-turbine, 4.1MW Hepburn Wind project at Leonards Hill, 10km south of Daylesford in Victoria.
In solar, Australia’s first large-scale community solar project is in the works, with plans to attract local residential investors to pay $1,000 a share to install 3,000 photovoltaic solar panels on the roof of the South Melbourne Market. The LIVE Community Power project aims to have an electricity generation capacity of 740kW, and as we reveal today, Embark and Lend Lease have combined to announce a 400kW solar farm in Sydney. Could this be the start of something?
What’s ahead for Australia?
Australia has already passed the 2GW mark in solar, the question is when it will reach 3GW, and when will large-scale solar take off. The Climate Change Authority’s final verdict on the much contested Renewable Energy Target, delivered yesterday, that the fixed target of 41,000GWh of renewable energy by 2020 should be retained is a good starting point.
In October we saw Australia’s first utility-scale solar farm opened in WA, a 10MW facility that is relatively modest by international standards. All eyes will be on the next solar farm off the ranks, the 20MW Royalla project that won the ACT reverse auction with a bid that floored some of its rivals. Will it be able to deliver at its bid price?
The real movement could come in off-grid solar installations, possibly in a hybrid model with diesel and/or gas. Talk is that projects are nearing agreement. ARENA will play a critical role, and could give the green light to one or two 30MW projects left over from the Solar Flagships program. And Port August could provide a breakthrough moment for big solar thermal, if Alinta can come to an agreement with ARENA and other parties about installing a concentrated solar plant to replace, or more likely, to augment its coal plant. There will also be a focus on the Whyalla big dish solar project, which has funding from the government and is due to begin construction this year, and the Mildura demonstration plant for Silex System’ concentrated solar PV.
On the rooftop level, installers and households will continue to wrestle with the removal of feed-in tariffs and the solar multiplier. But with rising retail prices, and falling module costs, the attraction of solar is growing daily. And for those miffed about the attitude of the utilities and network operators, progress in battery storage is offering an alluring option to those wanting to protect themselves from rising grid costs. And expect commercial scale solar to finally gain some traction – there’s too many rooftops, too much sun, and too many grid price rises to ignore the opportunity.
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