Solar Energy;; A pillar of The Sustainable Energy Kingdom
April 17, 2010 Royal Decree No. A/35 3/5/1431 A.H. 2
Royal Vision Sustainability Reliability Extending the Life of Oil Electricity generation & Desalination
Solar Energy Development Targets 4
Maximizing Return Oil Saved Economic Sector Sustainability How Much Can We Do? Demand Growth Demand Pattern Technology Characteristics How Much Should We Do? Economics Sustainability Technology maturity 5
Target Solar Capacity by 2032 Maximizing solar deployment Return 41 GW 6
Target Solar Capacity by 2032 Maximizing solar deployment return Solar PV 16 GW Solar CSP 25 GW 7
Target Solar Capacity by 2032 Energy Generation* Contribution (TWh/y) % Solar PV 28-35 4.4 5.5 Solar CSP 75-110 11.7-17.2 16.1-22.65 % * Load factor: PV = 0.2 0.25, CSP = 0.34 0.5 8
Hydrocarbon Fuel Saved Hydrocarbon Fuel Saved** (MMBOE/y) Hydrocarbon Fuel Saved** (MBOE/D) Solar PV 33-46 90-126 Solar CSP 99-145 271-397 361-523 (MBOE/D) * Load factor: PV = 0.2 0.25, CSP = 0.34 0.5 ** Average hydrocarbon plant efficiency = 45% 9
RE Capacity Installed by Technology GW in 2030 930 KSA % of Rest Middle East & Africa 899 401 358 196 185 14 11 13 11 6 9 16 3 2 Wind PV Biomass 2 CSP Geothermal 29% 37% 27% 68% 33% KSA % of World 1% 4% 2% 36% 3% 70 33 6 6 25 1 34 31 2 KSA Rest of Middle East Africa Rest of the World 10
Solar Energy Deployment Roadmap GW 45 40 35 30 25 20 15 10 5 0 Cumulative installed capacity, GW Solar CSP Solar PV 25 25 22 20 19 17 16 13 14 11 10 6 7 3 2 2 3 0 0 5 6 7 8 9 9 10 11 12 13 15 16 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Years 11
K 12
Policies & Strategies Execution Regulatory Investment & Business R&D & Innovation International Relations Human Capacity Mandate K.A.CARE City 13
Established by Royal Order April 17, 2010, the Mission is to be: driving force for making atomic and renewable energy an integral part of a national sustainable energy mix, creating and leveraging the competitive advantages of relevant technologies for the social and economic development of the 14
Key K.A.CARE Objectives CREATE a sustainable economic sector for Saudi Arabia anchored by local alternative energy demand market CONTRIBUTE to job creation, GDP growth, environmental footprint reduction and sustainable development MAINTAIN highest levels of safety, security and transparency 15
Execution of K.A.CARE Mandate SUGGEST alternative energy mix Sustainable and efficient energy future for KSA DEVELOP & LEAD execution plans PLAN for and BUILD physical city 16
Building the Optimum New Energy Mix 17
Peak Power Demand Will Nearly Triple in Next 20 121 GW GW YIC System SOA Remote SOA System WOA Remote WOA System COA Remote COA System EOA Remote EOA System 2010 2015 2020 2025 2030 2032 Source: ECRA 2010 18
Gap between peak demand and existing + planned capacity 140 Peak Demand 120 v v New Committed Existing Diesel 100 v Existing HFO GW 80 60 60 GW (Approx.) v v Existing Crude Existing Gas 40 20 0 2012 2020 2032 Year 19
Energy Consumption Patterns Total of 193,472 GWH Commercial 12.2% Agricultural 2.6% Industrial 17.9% Building 79.5% Governmental 15.1% Residential 52.2% 70% consumed by HVAC Source: Saudi Electricity Company (SEC) 2009 20
Parameters Affecting Energy Mix Development Value chain development Economics of hydrocarbons saved Energy Mix Electricity and desalination demand patterns Human capacity development Regulatory and physical infrastructure requirements Technology choices 21
Annual Electricity Demand Pattern in KSA Seasonal change in peak load exceeds 40% MW Week Number (July 2009 August 2010) 22
Day-Night Load Variation for Saudi Arabia Uniform day-to-night variation year round GW Day 1 15 29 43 57 71 85 99 113 127 141 155 169 183 197 211 225 239 253 267 281 295 309 323 337 351 365 Night 23
Forecasted Daily Electricity Demand Pattern 2032 140 Demand GW Generation 120 100 80 Daily load during a work day in August 2032 v v Peak load Base load 60 40 Daily load during a holiday in January 2032 20 0 0 0 : 0 0 0 6 : 0 0 1 2 : 0 0 1 8 : 0 0 2 4 : 0 0 Time of Day 24
Capacity Identification Using Technology Load Matching Approach Start with known hydrocarbon capacity in target year X: (Existing + Committed Retiring) Solar Nuclear + Waste-to-Energy + Geothermal Load Following Base Load Required Additional Capacity 25
Technology Installed Capacity Estimation 2032 Start with known hydrocarbon capacity in year 2032: 60.5 GW 41 GW 21 GW Load Following Base Load 121 60.5 = 60.5 GW Source: ECRA, SEC, Team Analysis 26
Proposed Energy Mix 2032 Solar PV Solar CSP Hydrocarbons Nuclear + Geothermal + Waste-to-Energy 16 GW 25 GW 60.5 GW 21 GW 27
Load-Specific Technology Component of the Proposed Energy Mix by 2032 PV will meet total day time demand year round NUCLEAR + GEOTHERMAL + WASTE-TO- ENERGY will meet base-load demand up to night time demand during winter CSP with storage will meet maximum demand difference between PV and base-load technologies HYDROCARBONS will meet the rest of the demand 28
Global Solar PV Energy Trends 991 27.7 278 ~10 c$/kwh in 2020 200 GW installed in 2020 (10x) ~7 c$/kwh in 2030 108 76 54 43 38 20 15 5.3 3.8 1.3 1.7 2.1 2.7 7 9.8 15.4 19.4 1975 1980 1985 1990 1995 2000 2005 2009 2012 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2011 Solar electricity costs - utility scale PV (c$/kwh) Global installed capacity (GWp) 29
Solar CSP LCOE Today Ouarzazate Concentrated Solar Power IPP in Morocco: Capacity = 160 MW Technology = Parabolic Trough with storage Levelized tariff = 18.971 c/kwh 30
Name of Consortium Tarriff (MAD/KWh) ACWA Power, Saudi Arabia 159.7944 (US$ 0.1897) Abengoa, Spain 207.75 Enel, Italy 205.72
Solar Value Chain Development 32
Manufacturing, EPC and O&M split % total capex and opex throughout the plant lifetime 100 80 60 Other Molten salt HTF Steam generator Turbine Structures Absorber Mirrors Other Molten salt Steam turbine Receptor Mirrors Structures Other Module Cell Polysilicon Integrated module manufacturing Integrated module manufacturing Other Nacelle housing Generator Gearbox Rotor blades Tower Other Condenser Pre-heater Cooling tower Turbine EPC Other Fuel & ash handling Turbine & generator Air pollution control Boiler Rest of manufacturing EPC 40 EPC EPC EPC EPC EPC O&M 20 O&M EPC O&M O&M O&M 0 O&M O&M O&M CSP Trough CSP Tower Silicon PV Thin Film PV HCPV Wind Geothermal Waste-toenergy 33
Potential RE Value Chain Components CSP Technology 1 Trough Elements Collector Mirror Absorber EPC & O&M Molten Salts HTF Steam turbine and generator Storage Tank Other power block elements Minor elements PV Technology 3 Thin Film 4 HCPV Elements Integrated Module Factory EPC & O&M Inverter Rest of balance of system Integrated Module Factory Tracking System EPC & O&M Inverter Rest of balance of system Technology 6 Wind Elements Blades Towers EPC & O&M Gearbox Generator Power converter Nacelle housing and assembly Bearings Minor elements 2 Tower Heliostat Mirror EPC & O&M Receiver Molten Salts Steam turbine and generator Storage tank Other power block elements Minor elements 5 Silicon EPC & O&M Poly Silicon manufacturing Inverter Wafer Cell Module Rest of balance of system 7 8 Waste-to- Energy EPC & O&M Steam Turbine Boiler Grate Other power block elements Minor elements Geothermal EPC and O&M Steam Turbine Heat exchanger Condenser Minor elements 34
Value Chain Development Building a World-Class Solar Energy Sector: Industrial investment Research, development and innovation Technology development Education and training Human capacity development 35
Value Chain Development: Beyond the Solar Cell and the Mirror Electricity Generation Industrial Energy Applications Seawater Desalination & Water Management Applications District & Solar Cooling 36
Solar Energy and Desalination Solar Energy Photovoltaic cells (PV) Concentrating Solar collectors Electricity Heat Thermal Power Cycle RO MSF Heat Electricity ED MED MSF Electricity To the Grid MVC TVC MED RO TVC ED MVC 37
Localization of Solar Industry Maximizing benefits of solar energy requires localization policies highly on local skills cooperation 38
Summary New Energies Will : CONTRIBUTE to a sustainable future for Saudi Arabia PRESERVE non-renewable fossil fuel resources SAFEGUARD international energy leadership TRANSFORM KSA into the Kingdom of Sustainable Energy 39
The Road to Successful Implementation 40
Engagement with Local Stakeholders PPP MoHE, TVTC, SABIC, Aramco, HDF MCI, SAGIA, Chambers of Commerce, MODON, RCJY Commercial Banks KACST, KAUST, SABIC, Aramco, SWCC, SEC Venture Capital Management Firms Commercial Banks MCI, SAGIA, Shura Council SIDF, PIF, SCB MODON, RCJY, MCIT, MoT Human Capacity Development Value Chain Development Research, Development, and Innovation Technology Acquisition Policy, Rules and Regulations Incentives Infrastructure Economic Sub-Sector 41
Engagement with International Stakeholders PPP International universities and training institutions Export credit agencies, technology providers Battelle, Franhofer, CSIRO Venture Capital Management Firms WTO, nuclear bilateral agreements Export credit agencies Multinational/international corporations Human Capacity Development Value Chain Development Research, Development, and Innovation Technology Acquisition Policy, Rules and Regulations Incentives Infrastructure Economic Sub-Sector 42
Clear Developmental Goals PPP Saudization rate for solar energy service industry KSA world leader in CSP technology exports CSP development fully supported through local R&D KSA ownership of world best performing CPV technology Technology and region-based FIT scheme Energy mix not needing incentives anymore Smart grid development and connectedness with MENA region countries Human Capacity Development Value Chain Development Research, Development, and Innovation Technology Acquisition Policy, Rules and Regulations Incentives Infrastructure Economic Sub-Sector 43
Implementation Roadmap: Prioritization 7 6 5 4 3 2 1 Research, Development, and Innovation Value Chain Development Technology Acquisition Infrastructure Human Capacity Development Incentives Policy, Rules and Regulations Human Capacity Development Value Chain Development Research, Development, and Innovation Technology Acquisition Policy, Rules and Regulations Incentives Infrastructure Economic Sub-Sector 44
Implementation Roadmap: Sequencing Sustaining sector development Strategic objectives Human Capacity Development Time Sector transition to maturity Sowing the seeds of sector development Human Capacity Development Research, Development, and Innovation Technology Acquisition Infrastructure Value Chain Development Incentives Value Chain Development Research, Development, and Technology Technology Acquisition Policy, Rules and Regulations Incentives Key prerequisites Policy, Rules and Regulations Infrastructure 45
Nuclear Energy Contribution 46
Analysis of Possible Nuclear Deployment Scenarios 25 20 22.4 GW Scenarios 2030 Program End of Aggressive scenario Capacity (in GW) Production (in TWh) 22.4 22.4 167 167 # reactors 16 16 Cumulative capacity (in GW) 15 10 5 17.6 GW 14 GW 9.6 GW Balanced scenario Value Maximization scenario Capacity (in GW) Production (in TWh) 14 23 103 175 # reactors 10 16 Capacity (in GW) Production (in TWh) 10 22.4 71 167 # reactors 6 14 0 2015 2020 2025 2030 2030 2035 2036 2040 2045 Value Maximization scenario Balanced scenario Optimized scenario Capacity (in GW) Production (in TWh) 17.6 17.6 131 131 # reactors 11 11 Aggressive scenario Optimized scenario 47
Value Maximization Scenario Capacity in GW and Localization in % Gen III Cumulative Capacity (GW) Cumulative Capacity (GW) Balanced Scenario Offers Trade off Between Pace of Localization and Pace of Reactor Deployment 45 35 25 45 30 Gen IV & SMR Turnkey Learning Self reliance 80% 100% 15 20% 5 Gen IV commercialization -5 2015 2020 2025 2030 2035 2040 2045 2050 2055 Balanced Scenario Capacity in GW and Localization in % Gen III Gen IV & SMR Turnkey Learning Self reliance 100% 80% 20% 15 Gen IV commercialization 0 2015 2020 2025 2030 2035 2040 2045 2050 2055 Opportunities in the nuclear industry Enables KSA to play a role in the Gen IV and SMR market Self reliance (>80% localization) reached in 2045, 5 years following the expected commercialization of Gen IV reactors Enables the sustainability of the nuclear industrial development Nuclear value chain ready to support Gen IV by 2045 Requires further expansion of current NPP build program by 7 years and ~6 GW to reach a 100% self reliance Opportunities in the nuclear industry Enables KSA become a first mover in the Gen IV and SMR market contingent on the further expansion of current program Self reliance (>80% localization) reached in 2042 at the time where Gen IV is expected to begin commercialization Nuclear value chain ready to support Gen IV Requires further expansion of current NPP build program by 6 years and 4.8 GW to reach 100% self reliance Aggressive Scenario Capacity in GW and Localization in % Gen III Cumulative Capacity (GW) 40 30 20 Turnkey 20% Gen IV & SMR 10 0 Gen IV commercialization 2015 2020 2025 2030 2035 2040 2045 2050 2055 Opportunities in the nuclear industry No sustainable industrial development opportunity to enable KSA to play a role in Gen IV and SMR market Full reliance on turnkey contractors results in a minimal involvement of the local suppliers in the nuclear program Minimum localization of the nuclear value chain to support Gen IV and SMR 48
The Kingdom of Sustainable Energy 49
50