1 South African PV Industry Overview

Transcription

1 South Africa Solar Energy Technology Road Map Subject Solar PV Baseline Report (Draft 2) Date 10 May 2013 Coordinator: Tumi Maphelele Contributors: Richard Stanford, Bavesh Kooverji 1 South African PV Industry Overview 1.1 PV Development in South Africa PV technology was introduced to South Africa in the 1980 s; however, up until a few years ago, the solar photovoltaic (PV) industry in South Africa consisted of small scale installations, predominantly off-grid and in rural areas. In the late 1990 s, larger commercial scale projects were implemented, however, these projects were still only in the order of tens of kw in size. In 2010, due to rapidly increasing electricity costs and an ever increasing awareness of global warming issues, there was a marked increase in larger commercial scale projects in the order of hundreds of kw. In 2013, construction began on 18 large, utility scale projects with a combined capacity of 630 MW. These projects are as a result of the Department of Energy s Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). 9 other projects, with a combined capacity of 417 MW, have achieved preferred bidder status and are currently about to reach financial close. Compared to developed solar PV markets, South Africa is still at a very early stage. The current estimated installed capacity, as of 2012, is 30 MW (PV localisation report) as can be seen in Figure 1 compared to approximately 30 GW installed capacity in Germany. However, the PV market in South Africa is expected to grow rapidly over the next 4 years as can be seen in Figure 2. Figure 1: Installed PV Capacity until 2012 (Source: EScience et al, 2013) Figure 2: Projected growth of the SA PV market (source: EPIA, 2012) 1.2 Geographic Distribution The maps below show the distribution of the larger scale projects in South Africa as well as the solar resource distribution. The first map shows the REIPPPP round 1 and round 2 projects and the second map shows large commercial projects which have been commissioned outside of the REIPPPP process. Key aspects to note are that the REIPPPP projects are dispersed around the country with the major gathering being in the high solar resource areas, away from city centres. Page 1 of 14

2 Figure 3: Round 1 and Round 2 REIPP Projects which have achieved preferred bidder status (Source: EScience et al, 2013) The non-reipppp commercial projects are focussed around the major city centres (Johannesburg, Cape Town and Durban). This provides solar PV with a unique advantage of being able to supply electricity where it is physically required which results in the potential for reducing the demand on transmission and distribution lines. The commercial scale projects shown in this map are all privately developed in order to supplement the grid feed with onsite generation. The driving force behind themajority of these projects is green advertising and social responsibility, however, the cost of PV is reducing to a point that a few of the later projects will have a levelised cost of energy that is nearing grid parity. Figure 4: Known Commercial and Industrial Projects built in 2010, 2011 and 2012 (Source: EScience et al, 2013) Page 2 of 14

3 1.3 Key Industry Stakeholders Government linked solar energy stakeholders Table 1 below provides a list of the government linked entities which have an active role in the development of PV in South Africa. Organisation Department of Energy (DoE) Department of Environmental Affairs (DEA) Department of Science and Technology (DST) Department of Trade and Industry (DTI) Municipalities National Energy Regulator of South Africa (NERSA) South African Cities Network (SACN) South African Local Government Association (SALGA) Function and relevant role in renewable energy Manages energy resources and the utilisation thereof. The DoE also develops/implements and monitors electricity policy and programmes such as the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). Promotes sustainable utilisation of the country s natural resources, through conservation, to enhance economic growth. DEA is also responsible for environmental impact assessments. Develops, implements and monitors science and technology policy and programmes. They are custodians of technology research and development (and manage the South African Energy Grand Challenge). Develops, implements and monitors economic policy and programmes to enhance economic growth. DTI, through IDC, is also involved in funding energy infrastructure projects, particularly renewable energy. Responsible for securing the delivery of basic services (including energy) in their municipal areas and for many aspects of Integrated Development Planning. Possibly also for routing national government subsidies directed towards energy provision. Municipalities derive the majority of their income from electricity sales. Regulates energy industries including electricity, piped gas and petroleum pipeline industries. Oversees licensing and compliance, pricing and tariffs, electricity infrastructure planning and regulatory reform as the electricity regulator. NERSA has recently passed and administers the REIPPPP. City management partnership between different spheres of government to support the governance of South African cities. This is done through an established network which facilitates the exchange of information, experience and best practices on urban development. Represents, promotes and protects the interests of the local government sector and its employees. SALGA has various roles related to local government transformation. It has a stake in the implementation of renewable energy policies at the local level South African National Energy Development Institute (SANEDI) The public entity entrusted with the coordination and undertaking of public interest energy research, development and demonstration. Established by DoE and DST in October 2004, as part of the state energy company CEF (Pty) Ltd. SANEDI is tasked with developing human capital in the energy research sector and also with funding fundamental and applied research to create and maintain a culture of innovation in the energy sector. The specific renewable energy arm of SANEDI is the Renewable Energy Centre of Research and Development (RECORD). Table 1: Government linked solar energy stakeholders and their roles (Source: adapted from Holm.d et al, 2010) Page 3 of 14

4 1.3.2 Sector Associations Key sector associations include: Acronym SANEA SAPVIA Full Name South African National Energy Agency South African Photovoltaic Industry Association SESSA Table 2: Key sector associations Sustainable Energy Society of South Africa Financiers The major financiers in the solar PV industry are listed in Table 3 below. All of these financiers have supplied debt financing to developers for the REIPPP Programme. Nedbank Capital Standard Bank ABSA Key Industry Financiers Industrial Development Corporation (IDC) Rand Merchant Bank (RMB) Development Bank of South Africa (DBSA) Investec Old Mutual Table 3: Key solar PV financiers 1.4 Research and Development Research and development (R&D) in South Africa, in terms of PV technology development, is currently being carried out by a number of tertiary education institutions such as: South African Research Centres Centre for Renewable and Sustainable Energy Studies (CRSES) at University of Stellenbosch Energy Research Centre at University of Cape Town University of Johannesburg University of Fort Hare Nelson Mandel Metropolitan University University of Pretoria Council for Scientific and Industrial Research Tshwane University of Technology Table 4: Key research institutions The private sector also carries out R&D, however, the private sector is currently not big enough to make a significant contribution to the development of PV technology in South Africa. Page 4 of 14

5 2 Solar PV Technology Overview 2.1 PV Technical Basics A PV System generally consists of: PV modules mounted on some form of mounting structure which is either at a fixed inclination angle or tracks the sun in some form or other; An inverter which converts DC electricity into grid compliant AC energy; Switchgear, protection and metering devices; DC and AC cabling; Batteries (for off grid applications); And various balance of plant. Figure 5: Grid Connected PV System overview PV Modules Table 5 below lists the different types of commercial PV cell technologies available globally. Crystalline Silicon and Thin film PV are the most developed technologies and thus make up the lion s share of the global PV market. Concentrated PV technologies have developed significantly over recent years and are being increasingly implemented in projects worldwide. Crystalline Silicon (c-si) Thin Film Type Description Efficiency Mono-crystalline 13-19% Multi-crystalline 14-18% Amorphous Silicon (a-si) 4-8% Cadmium Telluride (CdTe) 10-11% Copper Indium Gallium Dieseline (CIGS) 7-12% Multi junction amorphous silicon (µc-si) 7-9% Concentrated PV (CPV) Uses lenses to focus sunlight on PV cells ~25% Table 5: Commercial PV cell technologies Page 5 of 14

6 Organic cells, dye-sensitized cells and thermo PV are still at a fairly early stage of development and are not seen as commercially viable products at this stage. Organic Cells Fully organic approach 3-8% Dye-sensitized cells Gallium Arsenide Ribbon Pulled Silicon Hybrid Cells A hybrid of an organic cell retaining inorganic component Crystalline material suitable for PV with good efficiency at high temperatures but are infinitively expensive. Ribbons are placed into a silicon melt and pulled. Less expensive than conventional silicon cells since there is no need for wafer cutting. Hybrid cells combine the advantages crystalline and amorphous cells to provide a high efficiency and high sensitivity to low light conditions High efficiency PV cell combined with a thermal Thermo PV (TPV) radiation source Table 6: Other PV cell technologies under development 2.2 Current status of cost and performance PV module costs 2-11% Up to 35% PV module prices have been decreasing steadily since the 1980 s, however, since 2008, the prices have decreased rapidly as can be seen in Figure 6. The rapid decrease in module price can be attributed to numerous reasons including: Rapid increase in global demand which led to economies of scale; A decrease in the silicon price; Improved module manufacturing techniques; and Improved module efficiencies - - NA Figure 6: PV module price trend (source: Mints. P, 2013) Page 6 of 14

7 Recently, however, the PV module price has stabilised such that the PV module prices have risen for the first time in four years. Many analysts forecast that the PV module price will stabilise now, and potentially increase slightly over the next year or two PV system costs PV modules make up approximately 50% of the cost of grid connected PV systems and 25% of offgrid systems as can be seen in Figure 7. Therefore, the cost of PV modules has a very large impact on the total cost of PV systems. The other major cost items are the inverters, mounting structures, cabling and batteries for off-grid systems. Figure 7: Percentage cost breakdown of PV systems (source: EScience et al, 2013) The current estimated installed costs for different PV systems can be seen in Table 7 below along with the estimated potential for local content at the moment. The low local content percentages can mainly be attributed to the fact that PV modules make up such a large portion of the total installed cost. PV System Type Installed Cost Current potential local content Utility scale fixed tilt PV system R22.47/W 48% Utility scale fixed tracking system PV system R24.51/W 50% Commercial/industrial scale PV system R20.00/W 43% Residential gird-supported PV system R27.50/W 40% Residential off-grid PV system R47.00/W 30% Table 7: Estimated costs for different types of PV systems (source: EScience et al, 2013) Page 7 of 14

8 2.3 Global uptake of Solar PV As can be seen in Figure 8 below, the installed capacity of PV systems has increased exponentially since 2008 in line with the decrease in module prices. Figure 8: Global installed capacity of PV from (source: IEA, 2012) 2.4 PV Technology Development in South Africa Key Localisation Drivers Local content requirements in REIPPP Programme Key Localisation Impediments Lack of key local resources such as silicon, glass, skilled persons Lack of sufficient demand to entice manufacturing facilities it is estimated that a minimum annual demand of 600 MW is required in order for PV module manufacturers to be enticed to set up full PV module manufacturing facilities. Page 8 of 14

9 3 South African PV Market 3.1 Key Market Segments The South African (and global) solar PV market can be split up into market segments as shown in Table 8. Globally, the three market segments each have roughly the same market share. Market Segment Capacity Current Market Drivers Small residential market segment Medium to large commercial and industrial market segment Large utility-scale market segment Table 8: Key PV market segments < 10 KW 10 kw 1 MW > 1 MW Energy security (incl. backup) Offset consumption Offset consumption Green Image Feed in Tariff (REIPPPP) Offset diesel consumption for remote large energy users such as mines 3.2 Current market size and recent growth The graphs below show what the imminent solar PV market size will be once the REIPPPP projects are constructed. They go further by forecasting the growth of the PV market in South Africa depending on the adoption rates. Figure 9: Projected market growth (source: EScience et al, 2013) Page 9 of 14

10 3.3 Leading Suppliers Technology Providers Local Market Leaders Other International Suppliers Comment PV Module Inverter Mounting Structures Tenesol (acquired by Sunpower) Solaire Direct Set Solar ART Solar (setting up facility) AEG TUB (setting up facility to manufacture JEMA inverters) MLT Drives Microcare SMA (have set up a service office in SA) PowerWay Schletter PIA Solar Jinko Solar Canadian Solar BYD Hanwha SolarOne Solarworld Sunpower Yingli SMA KACO Victron Outback Hilti Table 9: PV Technology market leaders (source: adapted from localization report) Project Developers Emerging industry Market dominated by imported Local companies - assembly lines of c-si technology Total capacity: 158 MW Potential assembly capacity: 308 MW Local content: 21.5%-25.5% Emerging industry Market dominated by imported products Locally manufactured inverters tend to have higher prices than imported inverters Local content varies between 35%-75% depending on the manufacturer Emerging industry Have significant cost reductions potential Manufacturing of components generally outsourced to local aluminium/steel companies Local content is about 95% due to raw steel and aluminium being considered 100% local Below is a list of project developers which have reached preferred bidder statues in round 1 and round 2 of the REIPPPP process. Project Developers SlimSun BioTherm Energy Soitec Scatec Solar Momentous Energy AE-AMD Renewable Energy Mainstream Renewable Ltd Power Moncada Mulilo Renewable Energy SunEdison Energy SolarReserve LLC Solar Capital Building Energy Solaire Direct SunEdison Energy Core Energy Erika Energy Kensani Cobra Gransolar WBHO Building Energy Acciona Energy Enel Green Power Table 10: Project Developers who have reached preferred bidder status in REIPPPP round 1 and round 2 Page 10 of 14

11 4 Research, Developments and Demonstration 4.1 Research Institutions The table below lists the research institutions which are active in the research and development of PV in South Africa as well as the relevant spheres of research which are being undertaken at each. Institution Centre for Renewable and Sustainable Energy Studies (CRSES) at University of Stellenbosch Energy Research Centre (ERC) at University of Cape Town University of Johannesburg (UJ) University of Fort Hare (UFH) Nelson Mandel Metropolitan University (NMMU) University of Pretoria (UP) Council for Scientific and Industrial Research (CSIR) Tshwane University of Technology (TUT) Research and Development The Centre for Renewable and Sustainable Energy Studies (CRSES) based at the University of Stellenbosch (US) is the hub for the Postgraduate Programme in Renewable and Sustainable Energy Studies. This programme is funded by the Department of Science and Technology (DST). The INTRODUCTION TO SOLAR COURSE by the CRSES focuses on the study of PV systems. There is limited PV research conducted at the University (the focus at US is more on Solar Thermal and CSP technology) Web: The Energy Research Centre (ERC) considers the policy and planning segments of renewable energy studies. Student research completed on the GIS mapping and solar potential in SA. Current research serves to quantify the capacity credit of solar PV in SA and the amount of power that can be relied on in the capacity planning process, or the reliability of installed PV plants. Web: Dr Vivian Alberts from the Department of Physics developed and improved the novel CIGS thin-film PV technology. This research was partly funded by the Innovation Fund (DST). Research areas include: Thin film solar research, Photovoltaic device simulation and nanomaterial for photovoltaic applications Web: Research areas include: Photovoltaic performance parameters, photochemical solar cells and Building Integrated Photovoltaics (BIPV) design and embedded generation PV research is performed by the Department of Physics which forms part of the Centre for Energy Research (CER), established in The Photovoltaic Outdoor Research Facility (ORF) allows research to be conducted on PV modules exposed to external environmental conditions. Research areas include: PV device and materials classification, Concentrator Photovoltaic (CPV) technology development and PV system design and optimisation for utility connection Web: Thin-film research group lookid=11 Previous research: Dye-sensitised solar cells (DSC) and Organic Photovoltaics (OPV s) Nanomaterial-PV applications Hybrid PV power supply system Environmental and social impact studies on PV power plants Web: PV electrification project at Ndumo Game reserve completed by the Centre for Energy and Electric Power (CEEP). Table 11: Research institutions and the relevant solar PV research being conducted by each Page 11 of 14

12 5 Public Policies and Initiatives Currently, the PV market is being driven and assisted by the following policies and initiatives: IRP REIPPPP Eskom Standard Offer 5.1 IRP In 2010, the Department of Energy (DoE) released the Integrated Resource Plan (IRP ) which aimed at allocating capacities to different electricity generating technologies till The allocated capacities for each technology can be seen in Table 12 below. The allocation of 8400 MW of PV capacity by 2030 has assisted the development of the REIPPP Programme and has been one of the driving forces behind the development of a South African PV market. Table 12: Capacity allocations according to the IRP REIPPPP The Renewable Energy Independent Power Producer Procurement (REIPPP) Programme was established by South Africa s Department of Energy (DoE) through the finalization of the Integrated Resource Plan (IRP) of This IRP aims to provide an installed capacity of Solar PV of 8400 MW between the periods The round 1 window of the REIPPP Programme allowed 18 Solar-PV projects to obtain preferred bidders status, which totalled to a 632 MW PV capacity. The average bid price for the round one projects was R2.75/kWh with a local content allocation of 28.5%. The round 2 window of the REIPPP Programme allowed 9 Solar-PV projects to obtain preferred bidders status, which totalled to a MW PV capacity. The average bid price for the round two projects was R1.65/kWh with a local content allocation of 47.5%. The decreasing Page 12 of 14

13 trend in average PV bid price and the increasing use of local content from round 1 to round 2 sheds a positive light on the future rounds of the REIPPP Porgramme. 5.3 Eskom Standard Offer In 2012, Eskom initiated an incentive for small scale renewable energy solutions by including them to be funded through Eskom s Standard Offer ( The incentive includes a payment of R1.20 for every kwh saved during weekdays between 6am and 10pm over a 3 year period for projects between 10kW and 1 MW. The total allocation for this offer is 10 MW. According to Knox. A, 2013,a total of 48 Solar PV project applications have been received by Eskom, however, only two projects have successfully been contracted thus far. Page 13 of 14

14 6 References 1) EScience Associates, Urban-Econ Development Economists and Chris Ahlfeldt, 2013, The localisation potential of photovoltaics (PV) and a strategy to support large scale roll-out in South Africa, Draft Final, SAPVIA, WWF and DTI 2) European Photovoltaic Industry Association (EPIA), 2012, Global Market Outlook For Photovoltaics until ) Holm. D, Klunne. WJ, Mapako. M, Mehlwana. M, Meyer. E, Peach. W and Roos. T, 2010, Solar Energy Baseline of South Africa, Department of Science and Technology 4) European Photovoltaic Industry Association (EPIA), 2012, Global Market Outlook For Photovoltaics until ) Mints. P, 2013, Solar PV Profit's Last Stand, Available [Online]: 6) International Energy Agency(IEA), 2013, PVPS Report: A snapshot of Global PV , Report IEA-PVPS T1-22:2013 7) Knox. A, 2013, Two projects approved for Eskom s renewable energy incentive, Available [online]: Page 14 of 14