PHOTOVOLTAIC POWER SYSTEMS PROGRAMME

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1 Introduction to IEA, and some recent results Greg Watt Operating Agent, Task 1, IEA Programme

2 OUTLINE.. The IEA, & the IEA Programme IEA Task 1, & our key activities Some of our recent analyses & results.

3 IEA Activities International Energy Agency Energy security and environment Governing Board & CERT Working Parties (4) & Implementing Agreements (42) Renewable Energy Working Party 9 IAs including

4 The Programme Collaborative R & D agreement established within the IEA since The 20 participating countries are Australia, Austria, Canada, Denmark, France, Germany, Israel, Italy, Japan, Korea, Mexico, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States of America. The European Commission and EPIA are also members. Malaysia is currently an active observer.

5 IEA features Regarded as one of the most active, successful programmes Global network of expertise Broad variety of stakeholders Independent, objective, neutral Guided by all members through ExCo, work carried out on a task-shared basis Analyses & recommendations carry weight because of the IEA connection.

6 Current activities (tasks) Information exchange & dissemination Performance, reliability & analysis Very large scale systems PV services for developing countries Urban scale PV applications Hybrid systems Environmental Safety & Health

7 Task 1 All countries (plus ) are Task 1 members Promote and facilitate information exchange and dissemination concerning the technical, economic, environmental and social aspects of photovoltaic power systems

8 Our key activities (1) An important deliverable of Task 1 is the annual Trends in photovoltaic applications report 11 published since 1995 Largely based on the information provided in the National Survey Reports which are produced annually by each Task 1 participant.

9 Our key activities (2) PVPower newsletter 2 issues per year IEA and general PV news

10 Our key activities (3) - the so-called special information activities A range of activities, including workshops and documents, provide analysis and summary assessment of special topics. Directed at technical, economic, environmental and social aspects of PV systems and applications Usually managed by a specific country or a group of countries from the Task 1 membership.

11 Spectacular market growth! (market size doubling roughly every 2 years) Cumulative installed grid-connected and off-grid PV power in the reporting countries Grid-connect Off-grid 42% MW Market size doubling roughly every 2 years

12 But, where does PV electricity presently fit in the larger energy picture? 100,000 10,000 TWh 1, Global electricity consumption Currently 1/50 of one percentage point! Maybe a couple of percentage points by 2020 PV electricity

13 Public spending on PV: a billion dollar plus enterprise! R,D&D and market support; Over a decade, public spending on PV has doubled, with relatively steady increases from year to year; Initially this spending was largely focused on RD&D; :1 The amount spent on market support increased at the expense of RD&D (in both absolute and relative terms) until 2001; 01 3: saw the previously steadily increasing budgets for market support decrease for the first time in a decade; From 2001 RD&D expenditure has been both increasing, and increasing its share of the total PV public expenditure. 04 1:1

14 A real market? market 85% in Japan & Germany 800 MW residential PV systems in Japan 0 Breakdown Supported grid-connected Unsupported grid-connected Unsupported off-grid Supported off-grid

15 PV market support frameworks Enhanced feed-in tariffs Direct capital subsidies Green electricity schemes Renewable portfolio standards plus emerging mechanisms Preferential home mortgage terms Green loans from commercial banks Share offerings in private PV investment funds Tax credits

16 In an ideal world Various measures can be combined to function more effectively Funding issues are given due consideration The support framework is stable over time, separate from political interference, transparent and clearly targeted In the real world.

17 Patterns of annual installed capacity (values for 2003 set equal) Explosive growth Healthy growth Undulating market Panic & collapse Country 1 Country 2 Country 3 Country

18 Longer-term industry trends PV module production and module production capacity Production Capacity MW

19 Industry value chain Growth: Silicon feedstock (tonnes sold to PV industry) (Ingot & wafer production) PV Cell Production, MW PV Module Production, MW % % % Cell Production Capacity, MW/yr % Module Production Capacity, MW/yr %

20 The key players PV cell production (MW) by country in 2005 Germany (341,8) US (156,3) Spain (70*) Australia (35,6) France (33,5) Norway (20,0) Japan (823,5) Italy (11,6) Korea (5,3) UK (1,8)

21 The key players (2).. Share of PV cell production in the reporting countries by company in 2005 (%) RWE Schott (DEU, USA) 6% Shell Solar (DEU, USA) 4% BP Solar (AUS, ESP, USA) 5% Isofoton (ESP) 4% Photowatt International (FRA) 2% Others (23 companies) 16% Mitsubishi Electric (JPN) 7% Sanyo Electric (JPN) 8% Kyocera (JPN) 9% Q-Cells (DEU) 11% Sharp (JPN) 28%

22 Continuing price falls? Booming demand and tight feedstock supply Evolution of price of PV modules and systems in 3 selected reporting countries, accounting for inflation effects #1 modules #1 systems #2 modules #2 systems #3 modules #3 systems Constant USD/W The PV economists Holy Grail!

23 PV s additional values or how to sell expensive technology! Electrical Peak demand reduction, supply security, reduced line losses, power quality improvement Environmental Reduced emissions, water use & safety risks from power generation.. Architectural Multi-functional, reduced embodied & purchased energy Socio-economic New industries, products & markets, energy supply diversity, local employment, sustainable development, aid mechanism

24 Some challenges for policy makers How secure is political support for PV if prices do not fall, wealth flows to other countries and local jobs do not materialize? Global market, vigorous demand & tight supply opportunities for small players and innovators (and countries) OR large (established) players to thrive at the expense of all others? To what extent should the market s willingness to pay for grid-connected PV be explored before public resources are allocated?