Leading through standards Modernizing Saudi Arabia s quality infrastructure will improve competitiveness of its emerging solar industry By Khaled Masri, Managing Director, Standards Associates, LLC Introduction This paper describes a project plan for standardization, testing and certification for solar energy modules and components in Saudi Arabia. It is based on a study conducted by Standards Associates, LLC under contract with the King Abdullah University for Science and Technology (KAUST) in 2012 1. The purpose of the study is to develop a business model for laboratory network for testing long-term performance and reliability of solar energy modules and components utilizing the principle of public private partnership. The study relied on information received from stakeholders during field interviews. The government, private sector, and universities were represented in the stakeholders groups which included: the National Industry Cluster Development Program (NICDP) of the Ministry of Commerce and Industry (MOCI); and the Saudi Standards, Quality and Metrology Organization (SASO). The study concluded that K.A.CARE should: 1. Establish a Coordination Program for solar energy testing and certification to avoid duplication of effort among the national testing centers. 2. Establish Solar Quality Working Group on performance and reliability testing and certification of CSP and PV solar technologies. 3. Study establishing a regional solar energy testing laboratory. The urgency The Kingdom of Saudi Arabia seeks to solve the pressing energy challenges by introducing solar energy to ensure sustainability and save the precious oil and gas resources. With its rich solar resource, Saudi Arabia wish to become a major player in the global solar energy industry from research and product development, through manufacturing of systems components for Solar photovoltaic (PV), and Concentrating solar power systems (CSP). Ultimately, Saudi Arabia wishes to harness the energy of its plentiful sun for the export of power. The King Abdullah City for Nuclear and Renewable Energy (K.A.CARE) is the launching pad for the emerging national solar energy industry providing the much needed incentives for this industry to grow 1
and prosper. Among these incentives is laying the ground for a state of the art quality infrastructure to attract investments in various segments of the solar energy value chain. In May 2012, K.A.CARE announced its plans of maximizing solar energy deployment return to 41 GW (16 GW from PV and 25 GW from CSP) by the year 2032, which is equivalent to 16.1 to 22.65 % of the energy generation of Saudi Arabia. The importance of testing and certification Testing is an essential part of the certification process to ensure products are in compliance with national and international standards. Safety testing is required in order to meet the relevant standards for health, environmental and safety concerns such as: the prevention of electrical shock, fire hazards, and personal injury due to electrical, mechanical, and environmental stresses in the field. On the other hand, quality testing which demonstrate the performance and reliability of solar products is not required at this moment but should be included as a part of design for robustness. Certification is a crucial part of the quality infrastructure. It is a procedure by which an independent third party gives written assurance that a product, process or service conforms to specified requirements. Certification is primarily driven by marketplace requirements. Typically solar modules are certified or qualified to the standards mentioned above. For example, solar module manufacturers must obtain a performance and safety certification from a Nationally Recognized Test Laboratory before any new module can access the North American market. In Europe the Global Approval Program for Photovoltaics (PV GAP) is more prevalent. PV GAP established two certification marks for PV products, a PV Quality Mark for PV components and a PV Quality Seal for systems 2. Saudi Arabia is a member of the World Trade Organization (WTO) and signatory to the Technical Barriers to Trade (TBT) agreement. The WTO-TBT does not support additional or repetitive testing to be required by member countries unless proven to be necessary due to environmental, cultural or social conditions. Currently, solar products imported or produced in Saudi Arabia are not subjected to any specific testing or certification for either safety or quality. In addition to protecting the market from dangerous and poor quality products, testing and certification are needed as economic tools to gain competitive advantages and to provide incentives for local manufacturing. The vast majority of global solar manufacturers today have demonstrated compliance with the required international standards established by the industry. Therefore, it is not in anybody s interest to impose extra layers of testing or certification. However, a strong case can be made in support of the argument that quality testing, while not required, is very important to demonstrate and validate the long-term performance and reliability of solar products in the unique environmental conditions of Saudi Arabia and the GCC region as whole. These tests help determine the performance of the product in specific climate and environmental conditions such as: hot and humid locations, hot and dry locations, snowy locations, dusty locations, seashore locations and industrial locations. Also, performance and reliability testing have gained more popularity and attention due to the need to prove the bankability of existing products. 2
Strategy for implementation A good quality infrastructure is required to assure quality, reliability, and safety. Proper quality infrastructure will help protect society and the environment from the damaging effect of unsafe, poor quality, and non-compliant products and will improve the competitiveness of the country emerging solar industry. The ISO (International Organization for Standardization) quality infrastructure (QI) framework is shown in figure 1. This QI system has been adopted and implemented by most national standardization bodies including the Saudi Standards, Quality and Metrology Organization (SASO). A robust regulatory framework based on internationally recognized, quality infrastructure is expected to be developed by K.A.CARE for the emerging Saudi solar industry in the very near future. Both universities and the private sector should be consulted and actively involved in developing and implementing the system. When developed, the quality infrastructure framework should include the following standards3: IEC 61215 - The standard for monocrystalline or polycrystalline silicon flat-plate photovoltaic modules IEC 62108 - The performance standard for concentrated photovoltaic (CPV) modules and assemblies IEC 61646 - The standard for thin-film flat-plate photovoltaic modules, for which a required light-soaking test can be done outdoors or indoors with a simulated sunlight source IEC 61730 - Represents an additional safety standard for photovoltaic modules K.A.CARE role is to provide sufficient incentives for the solar industry to grow and prosper. Among these incentives is laying the ground for a state of the art quality infrastructure to attract investments in various segments of the solar energy value chain. Plan for quality testing and certification The plan to produce 41 GW (16 GW from PV and 25 GW from CSP) by the 2032 is ambitious. Currently, solar products imported or produced in Saudi Arabia are not subjected to any specific testing or certification for either safety or quality. Testing and certification are needed as economic tools to gain competitive advantages and to provide incentives for local manufacturing. The vast majority of global solar manufacturers today have demonstrated compliance with the required international standards established by the industry. Therefore, it is not in anybody s interest to impose extra layers of testing or certification. This will ensure continued compliance with the WTO-TBT by limiting additional or repetitive testing only to demonstrate and validate the long-term performance and reliability of solar products in the unique environmental conditions of Saudi Arabia and the GCC region as whole. 3
The goal of the KAUST study was to develop a business model for a network of laboratories in Saudi Arabia for testing the performance and reliability of solar panels and issuing 3 rd party reports and certificates. To achieve this goal the following steps were followed: 1. Conduct analysis of the existing stakeholders to: a. Identify the major sectors that impact the solar industry in Saudi Arabia. b. Identify the stakeholders, within each sector, interested in joining the laboratory network while emphasizing the role of the private sector. c. Conduct interviews with various stakeholders to identify existing capabilities and interests. d. Define the roles and responsibilities of the Government, private, and university sectors with regards to performance and reliability testing, and certification of solar panels in Saudi Arabia. 2. Develop a model based on public-private partnership for setting independent 3 rd party laboratory network to test performance and reliability of solar panels and issuing accredited certificates and reports. The major objective of establishing this laboratory is to provide testing and verification services to the manufacturers, EPC, government, investors and other users of solar energy in the GCC (and possibly other Arab) countries. The Laboratory will ultimately be able to carry out all tests required by the solar industry, utilities, and standardization organizations in the Arab countries. Stakeholders must take the lead A plan for such a magnitude can only work if the stakeholders work together in an integrated manner. The major stakeholders are: Government: Private Sector: Universities: Electricity & Co-generation Regulatory Authority (ECRA) King Abdul-Aziz City for Science and Technology (KACST) King Abdullah City for Atomic and Renewable Energy (K.A.CARE) Saudi Standards, Metrology and Quality Organization (SASO) Acwa Power International Business Engineering Corp First Vision Company MTTS Naizak National Solar Systems, LLC Solar Arabia Limited Sun and Life Xenel Industries King Abdullah University for Science and Technology (KAUST) King Fahd University of Petroleum and Minerals (KFUPM) King Saud University (KSU) Table 1. Major Stakeholders Based on the stakeholders analysis, the following roles and responsibilities emerge for the main players in Saudi Arabia s solar energy industry. 4
Government role The mandate given to K.A.CARE to drive the solar industry (depicted in Figure 2) and develop the needed regulations, capacity and infrastructure is an enormous task which requires substantial resources. Utilizing Public Private Partnerships (PPP), K.A.CARE could benefit from resources already available in the private sector, universities, research institutions (such as KACST) and other government organizations. SASO already plays an important role in Saudi Arabia s industrial quality infrastructure providing services in several areas including: standards, metrology, quality assurance, and conformity assessment (testing and certification). Other essential components of the QI include import control, and market surveillance. These functions are being fulfilled by the Saudi Customs Department and the Ministry of Commerce and Industry (MOCI). Together, SASO and MOCI are also responsible for negotiating and implementing mutual recognition agreements (MRAs) with the testing and certification bodies of Saudi Arabia trading partners. MRA is a tool for facilitating trade through acceptance of results of conformity assessment procedures. MRAs are based on mutual acceptance of certification marks of conformity and test reports issued by recognized testing and certification bodies in the MRA signatory countries. Therefore, it is essential that K.A.CARE should start developing some of these capabilities locally to support the emerging solar industry of Saudi Arabia. Private sector role If given the opportunity, the private sector can play a major role to help bridge the gap by investing in testing laboratories to provide performance and reliability certification of solar panels. The main challenge which this study attempts to address is to come up with a business model that engages universities, industry and K.A.CARE together in addressing the pressing need for reliability and performance testing and certification of solar panels and components. Universities role Several universities in Saudi Arabia including: KAUST, KSA, and KFUPM have already started to develop Photovoltaic performance testing. Additional capabilities are still needed. More laboratories and outdoor testing fields need to be built, testing equipment and specialized technical skills need to be acquired. These capabilities can be further developed by forming Joint ventures with the private sector to offer testing including: Performance at standard test conditions Performance characterizations Design qualification testing Reliability research to predict lifetime of modules in the field. 5
Business model In today s business environment countless innovative business models are emerging. Entirely new industries are forming as old ones collapse. A business model describes the rationale of how an organization creates, delivers, and captures value (economic, social, or other forms of value). The process of business model construction is part of business strategy. Business model is used to describe various aspects of a business, including purpose, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies. Thus, a business model describes the architecture of the value creation, delivery, and capture mechanisms employed by the business enterprise. The essence of a business model is that it defines the manner by which an enterprise delivers value to customers, entices customers to pay for value. Saudi Arabia is targeting the concentrated power technonology and the photovoltaic for both the crystalline and thin film technologies. Business model innovation is essential to invigorate this emerging industry. A network of laboratories is essential to conduct performance and reliability testing in order to determine if the quality of the product can withstand, and will continue to function for a long time according to their design and specification in the special environmental conditions unique to Saudi Arabia, the GCC region, and the entire Arab countries. The laboratory network envisioned in this study is a public-private partnership mainly for performance and reliability testing and certification of photovoltaic solar panels. The approach we followed to develop the business model is based on the Business Model Generation 4. In order to use this methodology we must think and deal with the laboratory network as an organization. For the purpose of this study we will refer to the network of laboratories envisioned as the Arabian Solar Energy Laboratories for Performance & Reliability (ASEL-PR). The ASEL-PR business model can best be described through basic building blocks that show the logic of how ASEL-PR intends to deliver value. The business blocks cover the main areas of a business: customers, offer, infrastructure, and financial viability. Conclusion The study concluded that K.A.CARE should establish a Coordination Program for solar energy testing and certification to avoid possible duplication of effort among the national testing centers. At the same time, K.A.CARE should seek to establish Solar Quality Working Group on performance and reliability testing and certification of CSP and PV solar technologies. After these steps have been taken, K.A.CARE will then need to conduct a feasibility study to establish a regional solar energy testing laboratory. About the Author Khaled Masri is the Managing Director at Standards Associates, LLC, where he works with governments, research and development institutions, and manufacturers on developing and implementing standards, certification, and testing for performance and reliability of PV and concentrated PV. He can be contacted at +1-703-635-7842 or kmasri@standardsassociates.com. 6
References 1 Concept Paper: A business model for performance and reliability testing and certification of solar energy modules and components in the Kingdom of Saudi Arabia, Standards Associates, LLC, Vienna, VA, May 2012 2 White Paper on PV Module Certification and Testing: A study for the National Industry Cluster Development Program (NICDP) Kingdom of Saudi Arabia. PICON Solar GmbH, Feb 2012 3 IEC - IECEE 2010, procedure for certification of photovoltaic (PV) products and the use of the IECEE PV quality mark and PV quality seal, www.iecee.org 4 www.businessmodelgeneration.com 2012 7