Taking CPV in New Directions: 2013

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1 Photo courtesy of Amonix Taking CPV in New Directions: In association with: CPV International th Concentrated Photovoltaics Conference and Exhibition March, Madrid In partnership with CPV International 2013 (21-22 March 2013), PV Insider has provided you with an exclusive overview on the opportunities for commercialisation and expansion in the industry, so you can develop strategies to win projects and boost your profitability in 2013 and beyond. This guide provides you with a glimpse of the challenges and opportunities being addressed at CPV International To find out more about the only internationally focused CPV event, high level speakers and key topics please visit:

2 Section 1: CPV of Today and Tomorrow CPV Stakeholders Survey: The results In 2012 PV Insider conducted a CPV industry survey, with the aim to understand the concerns, priorities and challenges for CPV businesses. Over 200 CPV stakeholders responded with 50% of replies made up of developers, system manufacturers, and utilities. We asked them 3 key questions that will help you understand how your competitors and peers are adapting to market changes, so you can develop a winning business strategy that is competitive in 2013 and beyond. You can get invaluable insight for your business by learning the results of these 3 questions: What should be the industry s key focus in 2013? What areas of your CPV business do you expect to develop in 2013? Which 3 countries are key markets for your CPV business? key question is how will they compare to PV? If PV panel costs rise as anticipated then it may be that CPV becomes even more competitive. An opportunity in 2013: CPV suppliers and manufacturers have a chance to drive down costs by increasing the level of standardisation of modules, which will enable manufacturing costs of components to come down and make CPV more competitive. Standardisation and its progress in the CPV industry will be discussed at CPV International 2013 (21-22 March), and will be led by TUV Rheinland, ISFOC and Amonix. What areas of your CPV business do you expect to develop in 2013? What should be the industry s key focus in 2013? Cost Technology Partnerships Deployment Customers/ New markets n Educate more customers 5% n Survive during challenging times 11% n Commercialise technology 23% n Find new market opportunities 15% n Deploy more installations 18% n Improve efficiency 24% n Drive down costs 79% Over 50% of CPV stakeholders believed that cutting costs should be the key focus, this is unsurprising given the low cost of PV panels. IMS research has predicted that costs will fall by 16% annually, but the When we asked the community what their business would focus on in 2013, the largest response was for developing their technology. This was an interesting result which suggests individual priorities are not the same as those for the community. Is this because cutting costs is not something that can be affected by individual companies? Instead it could be that manufacturers and suppliers believe that the key to cutting costs and increasing volumes occurs through the development of technology. After all finding new customers, developing new projects, lowering cost and developing technology are all related to having a robust and bankable product. To find out more about how to make your CPV business globally competitive, go to 2

3 An opportunity in 2013: Developing and commercialising technology at low cost will be crucial for CPV to obtain lower LCOE. Discussing this and ways to test this technology will take place at CPV International 2013 (21-22 March) through multiple sessions, particularly in developing hybrid power plants. Leading this discussion will be Heliotrop and Voltiq Partners. Which 3 countries are key markets for your CPV business? Germany China MENA South Africa Greece Australia India Portugal Korea Turkey Mexico Chile Brazil USA Spain Italy The most frequently mentioned markets for CPV were USA, Spain, Italy and the MENA region. When considering new markets, the Middle East and North Africa regions were selected as the region with the most promise for CPV outside the USA. Even though European markets are not particularly active at the moment, they are still favoured over a lot of other emerging markets. The interest in MENA is validated by favourable policy, high DNI radiation and the need to capitalise on solar power in the region. Even though South Africa is not mentioned as a key market, it is expected to be a growth area that is already seeing a hype of activity with the 44MW Touwsrivier plant being developed by Soitec An opportunity in 2013: Moving into countries with high DNI outside Europe and the USA presents opportunities but also challenges in project development. At CPV International 2013 representatives and decision makers form Chile, Morocco, Saudi Arabia and China will be discussing these challenges and suggesting strategies for deployment in presentations showcasing the opportunities for CPV projects. Sun Power C7 tracker Courtesy of SunPower To find out more about how to make your CPV business globally competitive, go to 3

4 Section 2: The Hottest Markets for CPV An introduction to the most lucrative CPV countries China National Renewable energy targets China s global dominance in the manufacturing of solar panels has positioned it well for increasing domestic installations. China s target is to have at least 11.6% of electricity generated as renewable power by 2015, increasing to 15% by 2020.This translates to 21GW of solar power by 2015, although there is no CPV-specific allocation. According to the China Briefing the total installed solar power capacity will reach 50,000MW by The core areas for this photovoltaic power generation will be in Eastern and Central China. Current capacity China currently has over 2GW of installed solar capacity which is predicted to rise to 5GW by the end of Legal and policy framework Companies producing over 50MW are required to produce at least 8% of their power from renewable sources. Local provincial governments have some freedom in the way they publicise and select bidders but individual provinces are guided in implementation by central government ministries which set the regulatory, economic and industrial standards for projects. Responsibilities for national policy and regulation are divided between the National Reform and Development Commission (NDRC) for energy pricing and planning. The Ministry of Finance is responsible for economic incentive programmes and construction codes have been issued by the Ministry of Construction Renewable energy leaders within China The head of the national energy coordination task force is the Chinese premier, newly appointed Wen Jiabao. A key agency is the Chinese State Environment Protection Agency, which plays a very strong role in project development and environmental impact assessment. It is not known how and whether the new Chinese premier will affect the current renewable policy set out in the most recent FYP. Other considerations Foreign companies are limited to a maximum of 66% debt financing for project capital costs against 80% for Chinese companies. There are some difficulties enforcing intellectual property law in China. PV Insider Analysis: The dry, desert climate is promising for CPV due to the strong support of the national government, who are also involved in owning and developing projects may see several more joint ventures between foreign and local CPV companies to allow foreign companies to enter the Chinese solar market. However, with only small pilot projects installed or under construction in China, it will be some time before we see larger scale projects. Saudi Arabia National Renewable energy targets The Government of Saudi Arabia has an ambitious renewable energy target of 10% of domestic-use power to be generated from renewables by 2020, increasing this to 41,000MW of solar power by 2030! Achieving this would save as much as 523,000 barrels of oil per day for the Kingdom. While there is no specific target for CPV installations, 16GW has been set aside for photovoltaic (including CPV) and 25GW is designated for CSP. Achieving these targets would make Saudi Arabia the world leader in using solar energy for power generation. Upcoming opportunities There will be two rounds of bidding for the first 4.7GW of solar power projects over the next two years for which the minimum project size is 5MW. In the first bidding round, 1.1GW of PV and CPV will To find out more about how to make your CPV business globally competitive, go to 4

5 be available, with this increased to 1.3GW in the second round. Round two is scheduled to begin in the third quarter of After the second round of bidding the government will announce a Feed in Tariff which will be divided by renewable energy source. It is unknown as to whether there will be a Feed in Tariff specific to CPV. In January 2013 Mecca city will choose companies from the tender process to operate and own power plant and production facilities. This will include 110MW of solar according to the Mayor of Mecca, Osama al Bar. Key players The Electricity Co-Generation Regulatory Authority (ECRA): The body currently responsible for regulating electricity and water desalination. The National Industrial Cluster, Solar programme: The solar cluster is doing considerable work to promote and develop projects to bolster system component manufacturing within the kingdom, especially of production of ingot wafers and cells on the local market. KA CARE: Established in 2010, it is the lead agency for national policy on and implementation of renewable energy. As well as formulating policy it is responsible for coordinating other agencies on investment, permits and developing a market conducive to renewable energy investment and development. PV Insider Analysis: Saudi Arabia proactively welcomes solar power because it is a commercially viable option for power and wealth creation. However, CPV will need to work hard to compete with conventional PV prices and the storage offered by CSP. Demonstrating a lower LCOE and proving the added advantages of CPV through job creation may go some way to increasing its popularity in the Kingdom. Establishing pilot projects and demonstrating performance may improve recognition of the technology and increase project size and number. Morocco National renewable energy targets The Government of Morocco has set a high target of 42% installed capacity from renewable energy sources by 2020-approximately 6,000MW. From this 14% is allocated to solar power although there is no CPV specific allocation. Set up prior to these targets, the Moroccan Solar Plan (launched in November 2009) aims to establish 2,000MW of solar installations by Current installed CPV capacity and manufacturing In 2011 Isofoton developed and installed a 30KW HCPV installation connected to the grid and funded by the European Commission. In 2011, Schneider Electric and Soitec signed an MoU with the Moroccan Agency for Solar Energy (MASEN), to promote Morocco s manufacturing capacity for solar components as well as to develop two 5MW pilot CPV projects. The first of the 5MW CPV pilot plants is to be built at MASEN s Ouarzazate site and scheduled for completion in The project partners will also look at the possibility of setting up a PV module assembly facility in Morocco. Key players Moroccan Agency for Solar Energy (MASEN): Created to implement the solar plan in the renewable energy policy. MASEN oversees all bidding for projects, and bidders are evaluated on offering the lowest tariff whilst fulfilling minimum technical specifications. The developer will then have a 25 year licence to build, own, operate the plant then to transfer it to MASEN. It is possible MASEN may take an active role in assisting in financing solar plants. Societe d investissements energetiques (SIE): A 1 billion dirham fund has been allocated to finance energy projects and promote renewable energy in Morocco. The Moroccan Agency for Development of Renewable Energy and Energy Efficiency (ADEREE): This agency is responsible for overseeing the development of renewable energy and promoting renewable energy in Morocco. Legal and regulatory framework Power from solar plants will be sold through a To find out more about how to make your CPV business globally competitive, go to 5

6 double PPA structure whereby electricity is sold to MASEN. The Office of National Electricity will then pay MASEN for electricity at the rate it has set, with MASEN funding the difference in pricing. PV Insider Analysis: CSP already has a strong profile in Morocco. For CPV to compete against CSP and PV, proving the local capacity-building advantages of CPV is crucial. Developing national capacities for component and module manufacturing would be a big win for CPV. However, as pilot projects are still in their infancy it will take some time for the CPV market in Morocco to mature. Chile National Renewable energy targets Chile s current aim is for 10% of electricity produced for the grid to be from renewable energy sources by This is a decrease from a 20% target made two years ago. Current installed capacity The Chilean solar market is still in the early stages of development. Although there are 883MW, or 73 renewable energy plants operating in Chile, the country has only 1 large grid-connected solar plant in operation, the Calama Solar 3 plant in Atacama. Calama Solar 3 is operated by the company Solarpack and Chilean state-run copper producer Codelco. Timeline Due to the lack of Feed in Tariffs or strong promotional policies, there is no specific timeline for project development. Policy and regulatory framework The SEIC has approved 685MW of PV and solar thermal projects with another 1,900 MW awaiting permits. CPV projects do makeup a small number of projects, although the exact amount is not known. Companies with over 200MW of installed power producing capacity need to have at least 10% of their energy production coming from renewable energy sources or face fines. Law allows for a tax credit for solar projects in the regions of Arica and Parinacota. The tax credit can reach up to 35% of a project s total capital cost. Key players Comision asesora para el desarrollo Electrico/ Electricity Development Advisory Committee (CADE): This body has been appointed to advise the Chilean government on how to best increase electricity generation. Sistema de Evaluación de Impactos Ambiental (SEIA): The Chilean environmental agency has approved 685MW of PV and solar thermal projects, with another 1.900MW awaiting permits. Provincial governments in high DNI areas such as Antafogasta and Atacama will be playing a key role in project development. Other considerations Power generation in Chile uses four separate grid systems. The Central Interconnected System (SIC) is the central region s grid, and accounts for 68.5% of national generation and serves 93% of Chile s population. Unfortunately the lack of energy infrastructure in rural areas with high DNI hampers project development and efficient transmission to the grid. PV Insider Analysis: The difficulties with rural grid infrastructure could pose a problem for CPV especially as there are few storage opportunities. However, the Atacama desert and other regions present the highest DNI rates in the world.the large renewable energy target with increasingly competitive LCOE means that although in its early stages, CPV could become a key energy player in Chile. CPV International 2013 will be discussing the most burning questions about emerging markets for CPV and how to commercialise this high potential technology. To find out how your business could benefit from new opportunities for CPV, go to: To find out more about how to make your CPV business globally competitive, go to 6