SMALL PHOTOVOLTAIC APPLICATIONS IN REGIONS OF LOW ELECTRIFICATION: HIGH DEMAND, FAST FINANCIAL AMORTIZATION AND LARGE MARKET POTENTIAL

Transcription

1 SMALL PHOTOVOLTAIC APPLICATIONS IN REGIONS OF LOW ELECTRIFICATION: HIGH DEMAND, FAST FINANCIAL AMORTIZATION AND LARGE MARKET POTENTIAL Ch. Breyer 1,2, C. Werner 1,3, P. Adelmann 4 1 Q-Cells SE, Sonnenallee 17-21, Bitterfeld-Wolfen OT Thalheim, Germany, Phone +49 (0) , c.breyer@q-cells.com 2 Universität Kassel, Wilhelmshöher Allee 73, Kassel, Germany, 3 Hochschule Anhalt, Bernburger Str. 55, Köthen, Germany, 4 Hochschule Ulm, Prittwitzstr. 10, Ulm, Germany. Abstract People in rural regions of various developing countries suffer on having no access to modern forms of energy, in particular electricity. This paper is focussed on regions inhabited by these people and presents insights on the short financial amortization periods of solar home systems and photovoltaic pico systems. With amortization periods of about 6-18 months, pico systems represent a capitalized value of about times the original capital expenditures at the point of full financial amortization. Based on such excellent economics the total global residential small PV market potential is estimated to about bn. Motivation In the world 1.4 billion people have no access to electricity.[1] Small photovoltaic (PV) applications, like solar home systems (SHS) and PV pico systems (PS) [2], enormously improve local standards of living. More than 80% of people without access to electricity live in rural areas of developing countries [1] typically showing high solar irradiation. Thus attractive priced SHS and PS enable a fast financial amortization compared to conventional energy costs. Increasing demand for small PV applications and constant reduction of financial amortization create large market potentials in countries with low electrification rates. The purpose of the presented work is to analyse the location of people without access to electricity and to give an estimation of market potential for small PV applications, driven by fast financial amortization of those systems. Approach Electrification rates for all countries in the world are transferred to georeferenced coordinates. Besides visualising these data are used for combining with solar irradiation data for analysing local solar resource [3], where people without access to - 1 -

2 electricity live. Same approach is applied for end-users diesel prices [4] indicating the major part of local energy cost [5]. Based on current local energy expenditures and cost for SHS or PS financial amortization period for respective systems is calculated for all countries with electrification rates less 80%. Market potential of SHS and PS can be estimated by georeferenced analysis. Results Electrification is completed in Europe, Central and East Asia and North America. It is nearly finished in Latin and South America, North Africa and Middle East. People without access to electricity mainly live in sub-saharan Africa, South Asia and in some countries of the Pacific Rim (Fig. 1). A large majority of them lives in India, Bangladesh, Indonesia, Nigeria, Pakistan and Ethiopia. Georeferenced analysis of solar irradiation of those regions where the 1.4 billion people without access to electricity live confirms that a majority of them has access to very good up to excellent solar resources of about 1,800 2,200 kwh/m²/y irradiation on module surfaces of fixed optimally tilted PV systems (Fig. 1). Most people without access to electricity live in developing countries of gross domestic product (GDP) per capita of less than 2,500 USD (Fig. 2). An overview on global cumulative installed PV capacity, in particular in developing countries, is presented by Werner et al.[6] Fig. 1: Global access to electricity in percent of local population (left) and population without access to electricity in dependence of respective local solar irradiation on module surfaces of fixed optimally tilted PV systems (right). In the left, the dark blue colour coding represents up to 100% electricity access of local population, whereas dark red is an indication for very low electrification rate of local population of 10% or even less. In the right, the line is referred to the right axis and represents distribution of world population. The bars are referred to the left axis and represent population without access to electricity. Data are taken from United Nations [7,8], International Energy Agency [9] and Breyer and Schmid [3]

3 Fig. 2: Electrification rate in dependence of GDP per capita for developing countries (left) and relevant data for all countries in the world of at least 15 mio people without access to electricity (right). The bubble size in the left is according to the quantity of people without access to electricity. Data are taken from United Nations [7,8], International Energy Agency [9], the World Bank [10] and Breyer and Schmid [3]. People without access to electricity spend money on kerosene for lamps, dry cell batteries for radios and tape recorders and charging mobile phones [5]. All those basic energy needs are able to be substituted by SHS and PS. The conventional energy cost are paid week by week, or month by month, whereas PV systems have to be bought in total but can be used for years. Attractiveness of PV applications is distinguished by their financial amortization period. For calculating the financial amortization of SHS and PS their specific cost need to be calculated and compared to the substituted energy cost (Fig. 3). The replacement cost of key components like battery, charge controller or LED lamps have to be considered as well. The substituted energy costs are composed by the aforementioned kerosene and dry cell batteries. Fig. 3: Cost and lifetime assumptions for PS and SHS (left), conventional energy needs (left) and global distribution of diesel prices (right). In the right, dark blue colour coding represents subsidised diesel price, turquoise colour is equal to true cost of diesel at a crude oil price of about 80 USD/barrel, whereas dark red is an indication for high taxation. Data are taken from GTZ [4], Breyer et al. [5] and Gabler [11]

4 Depending on the prevailing energy consumption patterns the respective solar system size is taken into account (Fig. 3). The diesel prices in rural areas of developing countries are substantial higher than at urban locations, hence the socalled distance to port factor is linearly varied between 20% (> 2,000 USD GDP/capita) and 50% (< 300 USD GDP/capita) [5] in rough dependence on the local infrastructure availability and the efficiency of distribution channels. Price assumptions for PS and SHS are in the range of international market conditions in smaller and larger off-grid markets as well as the energy cost substitution potential of these systems according to energy consumption patterns of the users (Fig. 3).[5,11,12] Amortization of complete PV systems ranges between 6-18 months (PS) and months (SHS) but strongly depending on energy consumption patterns (Fig. 4). Thus, small PV applications are the least energy cost option for people without access to electricity in rural areas. Analysis shows that upfront investment seems to be less of a financial burden than anticipated. The capitalized value of the various small PV systems range between (PS) and 5 20 (SHS) times the original capital expenditures in most countries (Fig. 5). Fig. 4: Amortization period for 2 Wp PS (top), 10 Wp SHS (bottom, left) and 50 Wp SHS (bottom, right). Coloured countries show electrification rates of less than 80%. Economics are based on assumptions in Fig. 3 and inflation of 10% plus a real interest rate of 3%

5 Fig. 5: Capitalized value of 2 Wp PS (top), 10 Wp SHS (bottom, left) and 50 Wp SHS (bottom, right) at the point in time of full amortization till the end of lifetime. Assumptions for the calculations are based on data given in Fig. 3 and 4 plus a 20 years lifetime. Insights on solar resource conditions and local cost of current energy supply presented in previous paragraphs are used for a rough estimate of market potential for small PV applications. A market evaluation for Ethiopia, one of the poorest countries in the world, has led to a total market potential of 284 MWp valued by about 3 bn for roughly 70 mio people without electricity access.[5] These numbers correspond to about 30 Wp per small PV system. The market for the 1.4 bn people without access to electricity might be evenly addressed by small PV systems of the average size of 30 Wp for very poor regions, larger scale small PV systems of an average size of about 100 Wp for less poor regions and mini-grid applications providing annually about 300 kwh/user. Markets for PV powered mini-grids are covered by another paper.[13] The such derived global market potential for PS and SHS in very poor rural regions for residential purposes might be about 1.9 GWp and 20.0 bn, whereas the market potential for less poor rural regions might represent about 6.3 GWp and 66.7 bn. These numbers are excluding PV powered mini-grids. However, advanced commercial applications and public services lead to an even higher market potential. Most well emerging and developed countries in the world show a residential fraction of total final electricity consumption of roughly one third [13], i.e. commercial, industrial and public consumption is two times higher than the residential one. Therefore, the commercial and public (schools, health centres, lanterns, water pumping, telecommunication, etc.) small PV off-grid market might be two times higher than the residential one. These numbers still exclude PV powered mini-grids. In 2007, the global market for rural PV off-grid applications in developing - 5 -

6 countries has been estimated to about 50 MW [11] growing on a roughly 20% growth rate, but could expand much faster due to excellent fundamental economics. Conclusions Most people without access to electricity live in regions of very good or excellent solar conditions and have to pay significant amounts of their income for conventional energy supply. Attractive prices for PS and SHS lead to short financial amortization periods and enable people without access to electricity to cover their energy needs in a sustainable manner. Moreover, small PV applications are the least cost energy option. Fast growing global on-grid PV markets and scaling effects in local distribution channels will further reduce system cost. Based on enormous demand for sustainable energy supply of still not electrified people and excellent economics of small PV applications, the respective global market potential is expected to be in the order of bn (residential) up to more than 250 bn (residential, commercial and public). Excellent economics of small PV applications might significantly accelerate respective growth rate of off-grid PV markets in the years to come. References [1] [IEA] - International Energy Agency, World Energy Outlook 2010, IEA, Paris [2] Adelmann P., Pico PV An Overview, this conference [3] Breyer Ch. and Schmid J., Population Density and Area weighted Solar Irradiation: global Overview on Solar Resource Conditions for fixed tilted, 1-axis and 2-axes PV Systems, 25 th EU- PVSEC/ WCPEC-5, Valencia, September 6 10, DOI: /25thEUPVSEC2010-4BV.1.91 [4] Ebert S., Metschies G.P., Schmid D., Wagner A., International Fuel Prices th Edition, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), Eschborn, [5] Breyer Ch., Gerlach A., Hlusiak M., Peters C., Adelmann P., Winiecki J., Schützeichel H., Tsegaye S., Gashie W., Electrifing the Poor: Highly economic off-grid PV Systems in Ethiopia A Basis for sustainable rural Development, 24 th European Photovoltaic Solar Energy Conference, Hamburg, 2009, September 21 25, DOI: /24thEUPVSEC2009-5EP.2.3 [6] Werner C., Gerlach A., Adelmann P., Breyer Ch., Global Overview on cumulative installed Photovoltaic Power, this conference [7] [UNDP] - United Nations, Human Development Report 2007/2008, UNDP, New York, [8] [UN] - United Nations, World Population Prospects: The 2008 Revision Highlights, UN Department of Economic and Social Affairs, Population Division, Working Paper No. ESA/P/WP.210, New York, [9] [IEA] - International Energy Agency, World Energy Outlook 2006, IEA, Paris, [10] World Bank, Gross Domestic Production 2009, World Development Indicators database, Washington, [11] Gabler H., Photovoltaik zur netzfernen Elektrifizierung, 23. Symposium Photovoltaische Solarenergie, Bad Staffelstein, March 5-7 [12] Gabler H., Off-Grid Electricity Supply with Photovoltaic Solar Energy Current Trends in Household Electrification, 14 th PVSEC, Bangkok, September 6 10 [13] Breyer Ch., Werner C., Rolland S., Adelmann P., Off-Grid Photovoltaic Applications in Regions of Low Electrification: High Demand, Fast Financial Amortization and Large Market Potential, 26 th EU-PVSEC, Hamburg, September 5-9, accepted