global techno-economic trends for solar pv and · pdf filesaudi aramco: company general use...

Saudi Aramco: Company General Use

Global Techno-Economic Trends for Solar PV and Relevance for MENA 22 January 2016: American University of Beirut

Peter Durante: Division Head – New & Emerging Technology + Market Intelligence Team Saudi Aramco’s Power Systems Renewables Department

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Photovoltaics (PV): Scalability and versatility From the smallest to largest plants, and to every corner of the world & beyond

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Global Installation Trends – GWp Net Additions by Tech

-50,000.00

0.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Marine

Geothermal

Biomass & Waste

Solar

Wind

Hydro

Gas

Coal

Oil

Nuclear

Data source: BNEF 2015, subscriber database

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Global Installation Trends – RE now the majority

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100% 20

01

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

NB: Nuclear and Oil excluded as they were negative from 2009-2013

Coal Gas Hydro Wind Solar Biomass & Waste Geothermal Marine

Source: BNEF 2015, subscriber database

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Global Installation Trends – Solar’s share growing

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

% of Total Renewable Energy Capacity Additions by Technology Data Source: BNEF 2015

Marine

Geothermal

Biomass & Waste

Solar

Wind

Hydro

Data source: BNEF 2015, subscriber database

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Solar Cell Price Decline in Perspective

•  Importance of up to date market intelligence.

99% Cost reduction since 1976

-85% since 2008

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Evolution of Wind and PV LCOE

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LCOE (Levelized Cost of Energy) Comparison Unsubsidized cost of energy comparison ($/MWh)

Source : Lazard's Levelized Cost of Energy Analysis—Version 9.0 (2015)

DEWA PV PPA = $0.0584/kWh Jordan PV PPAs = $0.061-0.077/kWh

Egyptian Wind PPA ~ $0.04/kWh – 2015 Moroccan Wind PPA ~$0.031/kWh - 2016

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Costs (and capacity) – What was previously seen as overly optimistic now seems prescient or even conservative

2009

Installed capacity at end-2014 = +180GW

Utility PV cost:

PPA awarded for $0.0584/kWh by DEWA in early 2015

for 2016/7 first power

Other utility PPAs from $0.061-0.085 globally

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!  Industrial goods follow learning curve

!  Doubling of cumulative capacity " X % cost reduction

!  PV cost reduction X > 20%

!  Price often used as proxy for cost

!  PV module cost reduction since 1990 > 90% since 1976 > 99%!

Module Learning Curve

Excessive margin period (price distortion)

Source: Graph from IEA, current price from variety of market sources and discussions

2015 prices

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Predictions – not all estimates are equal

Source: MIT ‘Future of Solar’ study. 2015

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PV & Wind – leading growth in the energy sector

Source: New energy outlook 2015, Bloomberg New Energy Finance Note: ‘Other Renewables’ = hydro, geothermal, biomass, solar thermal, marine and ‘flexible capacity’ (storage, demand response, etc.) Note: Solar Thermal (CSP) remains less than 1% of installed capacity by 2040 Note: Energy from solar + wind in this forecast = 30% of global total

2012 Fossil Fuel

Nuclear

Other Renewables

Wind

Solar PV

2040

Technology 2012 GW 2040 GW Growth Solar PV 101 3,687 36.5 X

Wind 282 2,033 7.2 X

Other Renewables 1,235 2,572 2.1 X

Coal 1,800 2,310 1.3 X

Nat Gas 1,472 2,448 1.7 X

Oil 359 320 0.9 X

Nuclear 336 533 1.6 X

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Predictions within top clean-tech analysts also vary (2020 annual installs – 135GW or 80GW?)

Data source: BNEF 2015 New Energy Outlook Data source: GTM 2020 Outlook

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0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2010 2015 2020 2025 2030 2035 2040 2045 2050

GW

cum

mul

ativ

e in

stal

lati

on

Year

BNEF

Agora low

Agora high

IEA (hi-Ren Scenario)

UBSe

Forecasts of Global Installed PV Capacity

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Cost Reduction Drivers

•  Modules

-  Efficiency

-  Cheaper material

-  Less material

-  Optimized production

-  (Disruptive technology)

•  Inverter

-  Power Electronics

-  Mass production

-  Dematerialization

•  BOS

-  Standardization

-  Optimization

-  Functional integration

•  Installation

-  Automation

-  Pre-assembly

-  Optimization

•  Energy

-  Higher specific yield

•  Financing

-  Bankability

-  Relative WACC

•  O&M

-  Automation

-  Remote sensing

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Efficiency is on the Rise - Examples

•  Top 10 manufacturer.

•  Multi-crystalline Silicon

!  Top thin film manufacturer.

!  CdTe

11.6%

2011

15.6%**

2015

15.9%*

2011

19.1%*

2015

* Best module, ** best production line (average Q1 2015 at 14.6%)

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Efficiency Drives Cost Down Beyond Module

•  Increased module efficiency :

" Less Material (to build module)

" Less land

" Less civil works

" Less racking

" Shorter cabling

" Less work

Source data: ITRPV and BNEF

18% 15%

8% 10%

32% 26%

12%

12%

8%

7%

16%

13%

7%

6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

current (15%) next (18%)

Effect of cell efficiency increase

Ground

Mounting

Wiring

Inverter

Module assembly

Cell conversion

Wafer

-11%

Efficiency increase largely justifies a higher cell cost. Example: Cell cost +25% à System cost -11%

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Efficiency is on the Rise: Expansions have higher efficiency 2011 market ≈30GW * 50% " 15 GW

2015 market ≈50GW * 30% " 15 GW

# (Entire) 20GW growth from advanced concepts!

Source: GTM Research

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Efficiency far from Limit

•  Thermodynamic limit ≈95%

•  Practical limits

-  Single junction (Shockley-Queisser limit) ≈32%

-  Multi junction limited only by technical feasibility

•  46% achieved!

Source: NREL

Source: Royal Society

!  Myth: “Efficiency is topping out”

!  Myth cherry-picks period and technology

!  Reality

!  2000-2010 focus on scale

!  Since 2010 focus on cost " efficiency improvements.

!  Technology shift

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8%

12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

current (15%) 2050 (30%)

Ground

Mounting

Wiring

Inverter

Module assembly

Cell conversion

Wafer

Efficiency to move beyond 30%

•  Effect of 30% commercial efficiency

-  All else equal reduces cost by ≈1/3

•  But, all other aspects will improve in parallel!

Source: Agora

-36%

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Inverter Learning Curve

•  Similar price decline as for PV modules

•  Increased power density (dematerialization)

•  Road free to further >2/3 cost reduction

Source: Agora

1995 2005 2014

25kg/kW 10.5kg/kW 2.4kg/kW

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Balance of System Cost is Declining

•  BOS cost can be improved considerably.

-  Rail-less, automation, functional integration, pre-assembly, standardization, etc.

Source: Agora

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Expect disruption

•  Forecasts assume:

-  No technology breakthrough

-  Incremental improvements only

•  “Disruptive” events likely in next 35 years

-  3RD Generation PV (i.e. Perovskites)

-  Roll-to-roll coating

-  Default building material (no more racking cost)

-  Cheap storage " >4 time larger PV market potential (learning curve " ≈1/3 cost reduction)

-  Fully automated installation

-  Fully automated cleaning

-  Commercial efficiencies beyond 30%

-  …

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Thank you…

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•  Bloomberg New Energy Finance:

-  New Energy Outlook 2015

•  Agora Energiewende ‘Current and Future Cost of Solar Photovoltaics’ (2015)

•  Lazard’s Levelized Cost of Energy 9.0 (2015)

•  MIT Energy Institute: Future of Solar Energy (2015)

•  GTM Research Global PV Demand Outlook 2015-2020 (2015)

•  US National Renewable Energy Lab – National Center for Photovoltaics

•  IHS

•  UBS Research

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