A SYSTEMIC APPROACH TO EVALUATE PV ECONOMICS AND PV POLICY STRATEGIES

Transcription

1 A SYSTEMIC APPROACH TO EVALUATE PV ECONOMICS AND PV POLICY STRATEGIES Hyun Jin Julie YU Institute for Techno-Economics of Energy Systems (I-tésé), French Alternative Energies and Atomic Energy Commission (CEA Saclay) Paris-Saclay University IAEE Singapore 2017 June

2 TABLE OF CONTENTS Context and questions Systemic evaluation of PV power France s case: PV development scenarios Conclusions 2

3 RAPID PV GROWTH & SHARP DECLINE IN PV PRICES Explosive growth of PV installations with political support (low-carbon energy transition): > 305 GWp in 2016 PV prices are falling faster than expected (module prices with global learning curve). Germany Residential PV System prices 1.5~1.9 $/Wp (2015) PV Module ~0.5$/Wp Source: Author's elaboration based on IEA PVPS Trends in photovoltaic applications Very low contract prices : i.e. 24 $/MWh in Abu-Dhabi (UAE) 3

4 BUT SOME ISSUES STILL REMAIN International National Electricity systems Stakeholders Grid management Energy transition PV costs Who pays? PV policies Innovation PV systems Globalization PV excess capacity New markets Energy poverty Price competition Trade disputes Solar resources Sustainable development We are facing a decisive moment for high shares of PV in energy systems. How to secure a sustainable PV growth? What PV development strategies? 4

5 PAGE 5 SYSTEMIC EVALUATION OF PV POWER

6 PV POLICY MECHANISM A macroscopic approach to analyze PV policy systems Contexts (e.g. globalization, historicity, energy system) Policy objectives Energy security Energy access Environmental Economic e.g. EU directives, Energy transition roadmap PV target and green growth Which instruments? Policy Inputs Supply R&D Industry Demand Market Integration Policy efficiency Policy effectivness ($) Value chain Costs Usages Outputs PV costs Production costs Systemic (grid-level) Outcomes Technological Energy systems Economic Societal & environmental PV policy decisions and results: country-specific, context-dependent 6

7 STAKEHOLDERS IN THE ELECTRICITY SYSTEM Interest (high) Sources: World Bank (interest-influence matrix), Yu H.J.J., IAEE conference 2014,(stakeholder analysis) Defenders: supporters Promoters Influence (low) PV industry, PV prosumers Associated industries/org Apathetics: Bystanders Little pricesensitive end users Interest (low) Government Latents (Blockers) Conventional plant & grid operators Remaining endusers Influence (high) A low priority to the PV policy but can influence it when the PV development impacts their interests Important to understand the needs! Stakeholders move around the grid and new players appear! Analysis needed on a regular basis to track their positions overtime. 7

8 SYSTEMIC EVALUATION OF PV POWER Impacts on latent group! The level of penetration Electricity energy system context Sources: OECD/NEA 2012, Ueckerdt et al. 2013, Pudjianto et al. 2013) PV integration strategy is needed to minimize the integration costs! Grid-related costs Additional investment for grid reinforcement and extension Match local consumption/ PV production Avoid grid injection Balancing Day-before forecast, realtime adjustment, Demand(t) = Supply(t) Improve weather forecast accuracy Smooth PV production fluctuations (i.e. geographical spread, daily storage system) Demand response Backup (adequacy) Provision of dispatchable backup capacity Match the peak demand & the sun power availability Improve electricity storage solutions 8

9 EXTERNALITIES OF PV POWER Yet to be internalized into PV prices Significant impacts on the national energy system, environment, economy and social welfare. CO2 emissions reduction, health Land usage (distributed systems, avoid fertile lands) Job creation PV industry development, trade balance Energy independency, geopolitical risks Technology development Increase of fossil fuel dispatchable plants Land usage (centralized systems) Job destruction Rise of electricity tariffs (i.e. EEG in Germany) Reduced profitability of conventional plants and grid operators & impacts on the longterm investment decisions Evaluation & management of PV values: countryspecific (different context and political decisions) 9

10 PAGE 10 FRANCE S CASE: PV DEVELOPMENT SCENARIOS

11 FRENCH ENERGY POLICY & PV ENERGY Renewables energies : 40% of power mix (2030) PV target: > 20 GWp in 2023 Fossil fuels Nuclear : 50% of power mix (2025) Supply Demand 563 TWh (2015) 447 TWh (2014) 11

12 FOUR TYPES OF PV INTEGRATION SCENARIOS What choices in regard with PV deployment in French electricity system? In front of the meter grid connection (FIT) or Behind the meter grid connection (Self-consumption) Rapid integration Grid injection (full) GR: Scenario G with Rapid integration GP: Scenario G with Progressive integration SR: Scenario S with Raid integration SP: Scenarios S with Progressive integration Saved grid injection (e.g. PV selfconsumption with batteries) Progressive integration 12

13 RESIDENTIAL PV SELF-CONSUMPTION WITH BATTERIES PV self-consumption: PV electricity directly consumed at the same site where it is produced. Poor correlation PV production vs. residential consumption demand response or storage solutions Source: [7] [8] Further reduction in PV system costs Continuous decline in the battery costs (Li-ion) $/kwh 150 $/kwh Natural demand will appear! Source: IEA s PV Technology roadmap 2014 Advantages Limit grid injection at the high matching ratio Social demand for energy independency & green energies New biz opportunities (i.e. EVs, batteries, BIPV, grid services ) Risks Massive & rapid deployments : impacts on electricity systems & stakeholders What if million of individual houses in France swift to PV self-consumption? Potential aggregate demand of 56 GWp (10% of French demand) What systemic effects? 13

14 RESIDUAL LOAD DURATION CURVE REDUCTION Current French power mix: PV of 56 GWp (1.6%) and wind power of 9 GWp (3.8%) 2015 load duration curve Low capacity credit backup 2015 Residual load curve without PV +Wind (baseline) 56 GWp of new PV capa. added Reduction of full-load hours (Grid injection > Self-consumption) Residual load curve (PV selfconsumption 80%) Residual load curve (Full grid injection) Assumptions: wind power remains constant. Author s calculation, see Ueckerdt et al for methodology Overproduction (Grid injection > Self-consumption) 14

15 PV INTEGRATION COSTS PV integration into the mix: additional efforts to address intermittency of variable PV power Grid-level costs (Keppler et Cometo, 2012) 10% (France) Grid injection (Scenario G) No Grid injection (Scenario S) Grid-related ~6 $/MWh ~0 $/MWh Balancing costs ~2 $/MWh ~0 $/MWh Back up 16-~ 19 $/MWh 16 ~ 19 $/MWh Profile costs (56 GWp added, 10%) Profile costs* (Ueckerdt et al. 2013) Grid injection (Scenario G) No Grid injection (Scenario S) Unit /MWh PV /MWh PV Speed Rapid (R) Speed Progressive (P) * Author s calculations PV integration costs need to be taken into account for PV policy decisions! i.e. Long-term investment decision, system security. 15

16 PAGE 16 CONCLUSIONS

17 PV GROWTH OPPORTUNITIES IN NEW REGIONS Over 1.3 billion people in the world still have no access to electricity. Global horizontal irradiation (kwh/maccess 2 ) to electricity (%) Sources: Solargis, World Bank Good correlation between the lack of access to electricity and the solar resources. 17 PV development opportunities in new regions, a sustainable solution for energy access.

18 STRATEGIC OPTIONS FOR PV DEVELOPMENT Off-grid devices and systems 1 kwc 10 kwc 100 kwc 1 MWc PV technologies: modular and scalable. Thanks to scalability, strategic choices are possible to limit the systemic effects! Residential 1,3 /Wp 3 /Wp Commercial/ Industrial 0,8 /Wp 2,3 /Wp Utility-scale 0,7 /Wp-1,3 /Wp Source: IEA PVPS Trends in photovoltaic applications 2016 Data for EU countries Different strategic options according to the local or national contexts! 18

19 RECOMMENDATIONS FOR PV POLICY STRATEGIES Strategic orientations of PV development based on a systemic approach. Strategic decision making in a given context (initiatives, techno, usages, system integration, locations, Industries, services, etc.). Consistent and progressive integration process & longterm vision. Ongoing evaluation /feedbacks (dynamics) Evaluation of decision criteria (strategic decisions) Context analysis PV missions & values Stakeholders analysis SWOT analysis PV public policies: towards a value-oriented, gradually focus on limiting PV systemic effects. Risks analysis Global vision 19 Author s proposal: a systemic analysis framework to make strategic decisions of PV development policies (Yu, 2016)

20 Thank you for your attention PAGE 20 Contact: Institut de technico-économie des systèmes énergétiques Commissariat à l énergie atomique et aux énergies alternatives Centre de Saclay Gif-sur-Yvette Cedex

21 REFERENCES [1] Yu, H.J.J., Popiolek, N. & Geoffron, P., Solar photovoltaic energy policy and globalization: a multiperspective approach with case studies of Germany, Japan, and China. Progress in Photovoltaics: Research and Applications, 24(4), p [2] Keppler, J. H. & Cometto, M., Nuclear energy and renewables: System effects in low-carbon electricity systems, Nuclear Energy Agency, OECD. [3] Ueckerdt, F., Hirth, L., Luderer, G. & Edenhofer, O., System LCOE: What are the costs of variable renewables?. Energy, Volume 63, pp [4] Pudjianto, D., Djapic, P., Dragovic, J. & Strbac, G., Grid Integration Cost of PhotoVoltaic Power Generation, Energy Futures Lab, Imperial College. [5] Haas, R., Lettner, G., Auer, H. & Duic, N., The looming revolution: How photovoltaics will change electricity markets in Europe fundamentally. Energy, Volume 57, pp [6] Yu, H. J. J., Popiolek, N. & Geoffron, P., A Comprehensive Approach to Evaluate PV System Prices and Opportunity for PV Policy. EEM 15, Lisbon, Portugal. [7] Economic Feasibility of PV Self-consumption in the French Residential Sector in 2030 (Poster), WTE 2016 «Vers la transition énergétique», organized by l'université Paris-Saclay and R&D of EDF Group, 4 and 5 October 2016, Palaiseau, France [8] Yu H.J.J., Ph.D. Thesis. Public policies for the development of solar photovoltaic energy and the impacts on dynamics of technology systems and markets. [9] Yu. H.J.J, Solar Photovoltaic Development Opportunities in New Regions with a Global Virtuous Circle, 23rd World Energy Congress (WEC2016), organized by the World Energy Council, 2016 [10] Popiolek N., 2015, Prospective technologique: un guide axé sur des cas concrets, s.l. EDP Sciences. [11] Hirth, L., Ziegenhagen, I., 2015, Balancing Power and Variable Renewables: Three Links, Renewable & Sustainable Energy Reviews 21