DELIVERABLE 7.3 Analysis of impact of selected partnerships on distribution 1

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1 ENER/FP7/296009/InSun InSun Industrial Process Heat by Solar Collectors DELIVERABLE 7.3 Analysis of impact of selected partnerships on distribution 1 Work Package 7 Market Deployment Analysis 1 Completion Date: 30 th March 2014 This document has been produced in the context of the InSun Project. The research leading to these results has received funding from the European Community's Seventh Framework Programme ([FP7/ ]) under grant agreement n ENER/FP7/296009/InSun. All information in this document is provided "as is" and no guarantee or warranty is given that the information is fit for any particular purpose. The user thereof uses the information at its sole risk and liability. For the avoidance of all doubts, the European Commission has no liability in respect of this document, which is merely representing the authors view. Page 1 of 16

2 Contents 1 Introduction Methodology and general notes Soltigua experience SOLID experience Solera experience Conclusions Page 2 of 16

3 1 Introduction The present deliverable presents the analysis of impact of selected partnerships on distribution of solar collector technologies and together with Deliverable D7.2 Report on one stop shop model innovations, which has been completed in parallel - should be seen as one of the first two building blocks of Deliverable D7.5 Road map for a fast marked deployment of solar thermal process heat applications with special focus on the different collector technologies. The present deliverable summarises the work performed by industrial partners Solera, Solid and Soltigua within Task 7.3 Optimise placement opportunities for solar solutions by defining high potential industry and /or technology specific partners. In Task 7.3, distribution channels have been explored and strategic alliances have been identified, assessed and selected, with particular reference but not limited to the industrial application groups, which had been defined in Task 7.2, such as food industry, steam based applications, hot-air based applications. Based on the opportunities available, the selected partners have been and/or will be involved in promotion activities of Task 7.2 such as the participation to industry specific exhibitions. Page 3 of 16

4 2 Methodology and general notes The general methodology followed in the preparation of this deliverable has been to map the most relevant distribution partnership opportunities identified within Task 7.3 by the three main technology providers Solid, Solera and Soltigua. In order to have impact on distribution, partnerships need to include companies with a strong presence and track records on well-defined market segments. These market segments can be defined in terms of: 1. geography 2. industrial sector 3. application type One market segment can be defined by one or more of the three elements listed above. The more elements concur to the definition of a segment, the more specific and well defined the segment is. This has an effect on the type of impact that a partnership can have on distribution. For example, a company active in general process steam applications throughout all Italy will have a broader but less focused distribution impact than a company providing turn-key steam systems to laundries in Southern Italy. The presence and track record of potential distribution partner depends also on the type of activities that they perform. For a given market segment these activities can include: 1. Commercial (intermediation and/or sales and distribution of goods) 2. System design (planning or engineering only) 3. System integration (including execution of sub-contracted services and activities) 4. Manufacturing of relevant equipment It is worth noting that activities 2 to 4 relate to the three item categories listed in the Section 6 Conclusions of the Deliverable D7.2 Report on one stop shop innovation, whose work has been taken into account in the preparation of the present report. If we combine the three market segments defined above with the three types of activities listed we can obtain a matrix which shows the different possible partner identities. 1. COMMERCIAL PLAYERS 2. PLANNERS AND DESIGNERS 3. SYSTEM INTEGRATORS 4. EQUIPMENT MANUFACTURERS A. GEOGRA PHY B. INDUSTRIAL SECTOR C. APPLICATION TYPE Page 4 of 16

5 Potential partners naturally align along the diagonal of the matrix, from the top left to the bottom right corner, where the top left contains the more commercially oriented partners and the bottom right contains the more technically oriented partners. So far, we do not believe that it is possible to establish a general rule on which partnerships are the most impactful ones for distributing solar process heat technologies. In the following sections we present how each individual company has decided to operate and their operating strategies. To conclude this section we present also some remarks on the scope of target markets as identified during the course of the project so far. From a geographical point of view, the initial focus was on EU based installations in the short term and extra EU installations in the medium and longer term. The activities performed while preparing this deliverable showed a very high potential of the extra EU market for the export of EU-made technologies. This implies a very broad market to target, which in turn requires establishing suitable partnership with suitable players who can provide adequate support in the target geographical areas. This is an important and not easy task. For this reason, it was decided to also include extra EU partnerships in the analysis performed. From an industrial sector point of view, based on the evidence available at the beginning of the project, these selected industrial sectors had been identified in the food industry, the steam generation processes and hot air generation processes. These three sectors were in line with the specific features of the three planned installation sites. During the first 24 months of the project, new facts and evidence led to a different set of priorities, which varied from partner to partner and which are described in more detail in the following sections. Here we provide the general methodological information that priorities have been set according to the relative industrial attractiveness of the different sectors. Within the perspective of relative industrial attractiveness to the solar technology providers, when supported by robust evidence, water heating has been considered a viable option for concentrating collectors and solar district heating devoted to industrial users has been included as a parallel form of process heat. This broader perspective has enriched the analysis of the spectrum of possibilities, a very much needed option in face of a slower than expected pick-up phase of the market for solar process heat installations. Page 5 of 16

6 3 Soltigua experience ENER/FP7/296009/InSun Analysis of impact of selected partnerships on distribution With reference to the matrix presented in the methodology section, Soltigua s particular approach has been to look actively for partners who can perform and/or coordinate system integration activities, because this is in line with the one stop shop concept which is a cornerstone of the overall marketing strategy and which is described also in Deliverable 7.1. The idea is therefore to include whenever possible partners with technical skills which are adequate for the technical segments on which they focus. This has been done in two different methods. In the first one, manufacturers of key process heat components have been contacted, met and interviewed. The choice of manufacturers has addressed also manufactures of elements such as ORC turbines and/or chillers, which can be used in poly-generation systems which provide process heat and/or power and/or cooling. These poly-generation systems are raising more and more interest and present relevant potential synergies with solar process heat, which is why Soltigua decided to include them in the scanning performed on potential distribution partners. In the following table, we provide an overview of the main contacts with manufacturers of system components. Table 3.1: system component manufacturers Company (name and country) Short description Potential for distribution partnership summary assessment 1. Exergy (Italy) ORC manufacturer The company showed interest in collaborating with the new FRESH NRG collector but suggested to expand the operating temperature up to C. Specific interest in Fresnel collectors. 2. Turboden (Italy) ORC manufacturer The company showed interest in concentrating solar thermal collectors. Target operating temperature up to C. May not be easy to develop collaboration terms due to existing links with other manufacturers of concentrating collectors. 3. Rank (Spain) ORC manufacturer The company showed interest in concentrating solar thermal collectors. Target operating temperature up to C. Main interest in parabolic troughs. Is collaborating with Soltigua within the FP7 Bricker project. 4. Zuccato Energia (Italy) ORC manufacturer The company showed interest in concentrating solar thermal collectors. Target operating temperature up to C, well within the Page 6 of 16

7 5. Transparent (India) 6. EAW (Germany) NH3 absorption chiller manufacturer LiBr absorption chillers manufacturer 7. Robur (Italy) NH3 absorption chiller manufacturer 8. Mingazzini (Italy) 9. ICI Caldaie (Italy) Manufacturer of industrial boilers and of thermal oil equipment Manufacturer of boilers including industrial boilers FRESH NRG target, but current main interest in parabolic troughs. Is collaborating with Soltigua within the FP7 REELCOOP project. Contacts provided evidence of potential difficulties due to requests for exclusivity and possible IP spillover. Contacts currently on hold. Contacts provided evidence of interest in developing chillers of adequate size for the FRESH NRG collectors (100 to 200 kw of cooling power). Meeting planned during the next months to understand better the potential synergies Leading EU manufacturer of NH3 absorption chillers. Has already experience in solar cooling systems with Fresnel collectors. Contacted several times. Interested in providing the equipment but not very interested in devoting time to the specific needs of solar Already a supplier of Soltigua, provided components for the solar steam generation with Fresnel collectors in the Italian demo site. Contacted several times by Soltigua. Main focus seems to be on boilers and on their standardised production. Limited interest in solar applications. As shown on the above assessment, the following companies provide potential to develop full blown distribution partnerships: 1. Mingazzini 2. Exergy 3. Zuccato 4. Rank 5. EAW This said, one of the main conclusions of the search performed so far has been that equipment manufacturers have often a limited interest in promoting solar solutions, which limits their impact on distribution. More specifically, Soltigua s experience so far has been that these companies can become much more interested only after they have been actively involved in one or more solar installation in which their own equipment has been used together with the solar system. Four out of the 5 equipment manufacturers listed above, are active in systems where their equipment have been or will be installed together with Soltigua s collectors due to market opportunities which they did not contribute to generate. It is Soltigua s hope and plan to use the evidence of these actual installations to transform the opportunistic attitude of equipment manufacturers into a more proactive one. Page 7 of 16

8 The next years shall provide more feedback on this. A much more proactive behaviour has been identified in the category of system integrators. This is documented by the fact that more companies could be contacted and interviewed, but more importantly by the fact that the first sales of Soltigua s concentrating collectors are happening via some of the system integrators listed in the table below. More specifically, during the period December 2013-March 2014 Soltigua sold three systems: 1. One 1.5 MW system for process heat via an industrial district heating in Forlì, in Northern Italy 2. One 300 kw process heat system for a mine in Chile 3. One small 30 kw solar field for solar cooling of a Hotel in Rimini, on the seaside In all these cases 2, the sale was done not directly to the final client but indirectly via a system integrator who did take care of system integration activities such as civil works, hydraulic system completion and electrical connections, always being supported by Soltigua s personnel. In the following table, we list the main system integrators contacted during the period, starting with the companies who did the sales mentioned above. Table 3.2: system integrators Company Short Activities so far and next steps (name and country) description 1. Ceif (Italy) EPC Interested in the technology. Buyer of concentrating collectors for an industrial district heating installation in Northern Italy. Willing to consider it for other installations e.g. in Sardinia. 2. Terrasolar (Chile) Solar thermal installation company Partner of Soltigua for a parabolic trough installation in Chile. Willing to expand cooperation activities to Fresnel technology. 3. Nuova CEI (Italy) EPC Interested in the technology. Supplier of Soltigua for some installations in Northern Italy. Willing to consider it for other installations in Italy and abroad. 4. TYT (Turkey) EPC Partner of Soltigua for a parabolic trough installation in Turkey. Willing to expand cooperation activities to Fresnel technology. 5. AES (Tunisia) EPC Partner of Soltigua for a parabolic trough installation in Tunisia. Willing to expand cooperation activities to Fresnel technology. 2 We inlcude the solar cooling case even if it not directly related to process heat, because it also proves the importance of systems integrators for solar thermal systems in general Page 8 of 16

9 6. Acciona (Spain) EPC Partner of Soltigua for a parabolic trough installation in Spain. Willing to expand cooperation activities to Fresnel technology. 7. Millennium Energy Solar thermal Industry (Jordan) integration company in the MENA region, Cyprus, Chile 8. Magfin (Italy) Active in solar thermal in Southern Italy 9. Reyer (UK) UK based company also active in Jordan via a local subsidiary. 10. CEC (Jordan) System integration company 11. Aiguasol (Spain) Active in solar thermal in Spain and Chile 12. Enerficaz (Spain) Active in solar thermal in Spain and Chile 13. Termoindustriale (Italy) Active in solar thermal in Italy Interested in expanding solar thermal activities to process steam and medium temperature applications up to 250 C. Wide installation base so far and simple agreement terms with Soltigua. Interested in the technology. Willing to present it to clients. Interested in expanding to solar process steam and medium temperature applications up to 250 C. Limited installation base so far and challenging agreement terms with Soltigua. Interested in the technology but has no technical team available to dedicate to solar process steam and other medium temperature applications Interested in the technology but is also involved with the development of a competing Fresnel collector. Potential competition issues. Interested in the technology. Willing to present it to clients both in Spain and latin America. Interested in the technology. Willing to present it to clients. Strong preference for field installations of at least 900 m2 As shown in the table above, after the first three companies who did already buy a system, three other system integration companies will collaborate with Soltigua to the realization of three other projects which are due to be completed during the next 12 months. The number of potential candidates after this preliminary assessment suggests that it may be easier to find an industrial partner in the field of system integration rather than among manufacturers of components or equipment. Page 9 of 16

10 4 SOLID experience ENER/FP7/296009/InSun SOLID s overall approach regarding partnerships for market deployment includes working with local partners which work independently on commission basis to develop projects. SOLID offers them exclusivity on a project by project basis but no exclusivity for countries or regions. SOLID is also searching for partners actively, for example through the Austrian chamber of foreign trade, but SOLID rather find partners through its own networking efforts all over the world e.g. when company member are making presentations etc. Most of the times SOLID receives requests directly from companies or persons, who would like to be our partner for specific projects. It is very important, for SOLID that its partners have a good understanding of energy matters, industrial plant design & engineering, and customer relations. It is further an asset, if the partner can master explaining economic benefits in a rapidly changing environment regarding the cost of energy. The ideal partner for SOLID should have the following profile: 1. Pro-active in sales 2. Sales network in the relevant sectors 3. Strong technical background (engineering, architecture, construction, heating, ventilation, air conditioning, facility management,) 4. Expertise in energy related activities such as a. solar thermal energy, solar energy, renewable energy b. energy efficiency assessments and audits c. energy service contracting d. building standards and certification systems (LEED), green buildings 5. Experience in design, construction or development of large buildings and plants: hotels, schools, industry, airports, malls. Additional qualifications: 1. Knowledge of LEED certification schemes and similar green building standards 2. Familiar with European business culture 3. Local network of opinion leaders, project developers, financial institutions, political stakeholders. 4. Strong financial background for investing as stakeholder in projects 5. Well established basis with local financing institutions for project financing 6. Experience in energy service contracting, power purchase agreements, build-own-operate (BOO) models Usually, a partnership for large solar thermal solar turnkey project of SOLID is developed in several steps. 1. In a first approach to the client, the partner establishes a basis for communication, and presents the possibilities of SOLID and its technologies. If the client gets interested, initial data on demand and expectations (guided by a questionnaire) is gathered by the partner. Page 10 of 16

11 2. Based on this data, a project draft shall make a rough outline of key numbers and check the chances to realise a project. It contains a budgetary offer. The project draft is provided for free. 3. Based on the project draft we can develop a paid study working on details with the customer. The study results in a confirmed and approved detailed concept including technical and commercial clarifications and could actually include detailed engineering. The study shall be charged on costs including compensation for both SOLID and the Partner. 4. The client signs a contract with SOLID for supply of a system or components. 5. Construction of the plant is carried out under responsibility of SOLID with supply of key parts through SOLID adding local procurement and supervision through the Partner. Start up procedure will be done including both parties. 6. Operation & Maintenance shall be sold to the customer on a separate agreement. Partner support requested by SOLID includes: identifying and convincing the client assisting in the assessment of the technical and financial circumstances required to develop a techno-economic proposal for the client communicating the energy solutions developed by SOLID getting quotes from local suppliers for work done in country such as construction, pipework, electrical negotiations with the client, conclusion of the contract, after sales services support during project implementation (legal, finance, and/or technical) local organization during installation (local procurement, subcontracting etc.) support for payment Below there are described some examples in which way SOLID developed it s partnerships all over the world in the recent years. SOLID were searching for a partner in the Caribbean because of the good framework conditions (high energy price, high solar radiation, a lot of tourism, hotels etc. ), since approx. 7 years, The cooperation started in the framework of an ADA (Austrian Development Agency) project, which supported the market deployment for solar thermal technology in the Caribbean region. After some researching activities and some personal visits in the Caribbean region, SOLID found a partner, who perfectly fits to the requirements of SOLID, which are described above. SOLID was able to give the partner a monthly salary for acquisition activities because of the ADA incentive. This ensured a higher motivation of the partner and a better quality of the whole working progress. After three years of acquisition activities the first solar cooling project with a total collector area of approx. 1,000 m 2 could be realized. In the US / Arizona SOLID has its most successful partner since approx. 10 years. Here SOLID had luck and realized a project within the first year of the cooperation. So far a few other projects have already been realized. In the meantime we founded together with this partner already a subsidiary where SOLID and our partner are the owners. Although this partner has no technical background in solar thermal plants at all, it is a very successful cooperation as he have a very good network in the industry in general. Page 11 of 16

12 The solar thermal plant at Berger was a success story in collaborating with the austrian energy consultant denkstatt, who proposed SOLID as a specialist in designing & installing solar thermal plants for integrating a solar thermal system. Motivated by this success, SOLID investigated a lot of time in searching for new energy consultants in the last two years, by keeping in place all the previous existing partnerships in parallel. Most of the time energy consultants propose the client to install solar thermal plants in addition to energy efficiency measures, like using their waste heat. In the meantime, SOLID already has some agreements with partners, with whom SOLID already developed projects, which could be realized in the near future. Some of these partnerships are mentioned below: ic Consulenten AEE Intec Synergesis consult.ing Page 12 of 16

13 5 Solera experience ENER/FP7/296009/InSun Solera s experience in the aim of establishing partnerships on distribution was mainly directed in the Spanish speaking market, considering as main focus Spain and South America. With this regard, the core approach has been made contacting directly to industries of the food and paper sectors. Regarding Spain, some contacts among the food industry were already established during the BTA fair in 2012 (Barcelona, Spain) but also an intensive research was made in both branches and many first contacts were carried out but most of them stopped due to economic situation of the companies in this last years. Some of them asked to be contacted in the coming years, once their priorities have changed. Other reason for rejecting a partnership was the lack of real example in industries of the same branch, so the fear of non-trusted technologies was always a fact during the negotiation phases. In South America, some partnerships were considered but then discarded due to non-optimal location (i.e location in Colombia with many days with haze) or due to the abovementioned fear of a non-reliable technological know-how of the considered partners in the food/paper sector. Some of the contacts made are listed in the following table Table 5:1: industries contacted Company (name and country) Short description Activities so far and next steps Agroparque (Mexico) Food industry Interested in collectors but communication stopped due to economic reasons Laive (Peru) Food industry Contact made, first feasibility study made, possible cooperation in the future. Cemosa (Spain) Paper industry Interest in collectors and first feasibility study was made Molpack (south America) Paper industry First contact made. Possible cooperation in the future Goma camps (Spain) Paper industry First contact made. Economic situation stopped the cooperation Montesinos (Spain) Food industry Contact made, first feasibility study made, communication stopped due to economic reasons. Future interest in collectors Lácteos Martinez (Spain) Food industry Contact made, first feasibility study made, communication stopped due to economic Page 13 of 16

14 reasons. Future interest in collectors Direct contacts with industries didn t follow through a good path but in the meantime direct contacts were made with possible partnerships within system installers in different countries, because as it has been explained in previous paragraphs and in Deliverable D7.2, some aspects of this type of projects require the experience of local companies in order to deal with a good knowledge of legislation, opportunities, suppliers, etc. which may optimise the project cost and simplicity. Other companies directly contacted with us and some initial possible projects were analysed. In the following table some of the contacts established are shown. Table 5.2: system integrators Company (name and country) Short description Activities so far and next steps Arkolia Energies (France) Project planner and installer First feasibility study made for 60 collectors. Amgitec (Spain) Project planner and installer Contacts made and cooperation could be possible in the future Efiterra (Spain) Project planner and installer Contacts made and cooperation could be possible in the future Eurofred (Spain) Project planner and installer Contacts made and cooperation could be possible in the future Radiant PV (Australia) Project planner and installer Contacts made and cooperation could be possible in the future In this last years, the project that Solera has successfully carried out is in a textile german Industry, in which 30 collectors have been installed (approx. 100 m 2 of mirror surface) in order to support the heat requirements of the company. This client had interest in a photovoltaic project and, besides doing this installation, he decided to increase its renewable energy sources with parabolic collectors. The project was funded by the German foundation Deutsche Bundesstiftung Umwelt (DBU). After these years of analysing possible partnerships, the near future seems to stay close to the establishment of relationships with in-situ system integrators, which may optimise the project with their know-how. Page 14 of 16

15 6 Conclusions By comparing the experiences of the three industrial partners Soltigua, SOLID and Solera, we can identify similarities and differences which are essential to our conclusions. A first common element is that all three companies make active use of partners in order to offer a one stop shop solutions to the final clients. This is means that all three solar companies take charge of developing the relationship and the contractual activity required to include all the necessary services and supplies in their own offer. The contractual agreement may vary from case to case, depending on both the company s preferences and the specific features of the individual cases, but the need for partnerships is confirmed by the evidence gathered during the first two reporting periods of InSun. The nature of the partnerships includes in principle both a technical and a commercial element. The technical element is always present. Soltigua focuses more on system integrators and possibly on equipment suppliers, while Solera has also relationships with planners and designers. SOLID has recently moved towards developing a relationship with planners and designers, too, even if the examples provided by them show a great degree of flexibility in setting up partnership which can support their distribution. From a commercial point of view, Soltigua considers selling to its partners rather than to the final clients, in order to simplify system integration issues. SOLID is closer to selling to the final client, either directly (as in the Caribbean) or via companies of which SOLID becomes partners (as in California). This difference between Soltigua and SOLID depends also on the fact that the first is a collector manufacturer while the second is a system integrator. The sale made by Solera shows the importance of keeping a good partnership between partners already established, in order to facilitate the possibility of starting new projects with them. In general the commercial side of the activities appears to be less developed than the technical one, due to the infancy of the solar process heat market. This is more relevant for the market of concentrating solar collectors, which is a more innovative technology, and less for the market of flat plate solar collectors. The difference is reflected in the fact that SOLID has provided two examples of partners more versed on the commercial than on the technical side, while Soltigua focused more on technical companies. In general, however, the infancy of the market is the main aspect which influences the selection of the partners and the development of partnerships. In particular, few deals have been reported. It seems that the ability to complete more than one project with the same partner will be a key element for the optimization of the partnership and of the related one-stop-shop model. SOLID s examples seem to confirm this hypothesis. A potential solution to move beyond the market infancy of solar process heat is to also look at the extra EU market of these European technologies. Page 15 of 16

16 This report shows clearly that all three industrial partners are addressing the extra EU market, due to its inherently favourable economics in some countries characterized by high solar radiation and high energy costs. This observation has an impact on the search and selection of partners and it also provide an interesting hint which will be further developed in the future Deliverables of WP7, which will be due during the third reporting period. Page 16 of 16