Status Quo - Storage systems and PV in a global context 2. October 2013 Stuttgart Martin Ammon Senior Research Manager EuPD Research
Economic Parameters of Photovoltaics and Storage 2
Evaluation approaches of investments - Economic perspective - Business perspective 3
Levelized Costs of Electricity (LCOE) 4
Economic Parameters of Photovoltaics and Storage Levelized Costs of Electricity Cent LCOE = kwh 5
Economic Parameters of Photovoltaics and Storage Levelized Costs of Electricity + O&M + Investment Removal PV System = Electricity 6
Economic Parameters of Photovoltaics and Storage Levelized Costs of Electricity = + =1 (1+) + (1 ) (1+) =1 I PV : investment costs A t : annual total costs R n : removal costs M el : electricity output d PV : degradation rate i: discount rate n: lifetime in years t: operating year 7
Economic Parameters of Photovoltaics and Storage Grid Parity of Photovoltaics in Germany 60 Cent/ kwh Sources: EuPD Research/ BDEW 2013 50 Cent/ kwh 40 Cent/ kwh = + =1 (1+) + (1 ) (1+) =1 30 Cent/ kwh 20 Cent/ kwh 10 Cent/ kwh 2006 2007 2008 2009 2010 2011 2012 2013 Electricity price (private households) LCOE PV 8
Economic Parameters of Photovoltaics and Storage Levelized Costs of Electricity PV system 2013 System price 1,600 /kw system size 5.0 kwp Yield per kwp 900 kwh/ kwp Degradation 0.25% Life-span 20 years O&M PV system 1.5% Removal costs 800 Installations costs 20% Discount rate 4.00% Inflation rate 2.00% 9
Economic Parameters of Photovoltaics and Storage Grid Parity of Photovoltaics in Germany 60 Cent/ kwh Sources: EuPD Research/ BDEW 2013 50 Cent/ kwh 40 Cent/ kwh = + =1 (1+) + (1 ) (1+) =1 30 Cent/ kwh 20 Cent/ kwh 10 Cent/ kwh LCOE PV_2013 0.18 / kwh 2006 2007 2008 2009 2010 2011 2012 2013 Electricity price (private households) LCOE PV 10
Levelized Costs of Storage (LCOS) 11
Economic Parameters of Photovoltaics and Storage Levelized Costs of Storage + O&M + Investment Removal Storage = Stored Electricity 12
Economic Parameters of Photovoltaics and Storage Levelized Costs of Storage = + =1 (1+) + h (1+) =1 I St : investment costs A St : annual total costs R n : removal costs Cap St : installed capacity DoD: depth of discharge E el : electrical efficiency Ch C : charge cycles per year n: lifetime in years t: operating year i: discount rate 13
Economic Parameters of Photovoltaics and Storage Levelized Costs of Storage Source: EuPD Research 2013 12,000 10,000 8,000 6,000 4,000 2,000 LCOS LI Lithium ion battery Battery price 2,300 /kw Battery size (nominal) 5.0 kwh Depth of discharge 80% Battery size (effective) 4.0 kwh Battery efficiency 92% Life-span battery 20 years O&M battery 1% Removal costs 575 Installations costs 10% 0.73 /kwh 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Investment costs O&M Removal costs 14
Economic Parameters of Photovoltaics and Storage Levelized Costs of Storage Source: EuPD Research 2013 12,000 10,000 8,000 6,000 4,000 2,000 0 LCOS PB Lead acid battery Battery price 900 /kw Battery size (nominal) 8.0 kwh Depth of discharge 50% Battery size (effective) 4.0 kwh Battery efficiency 92% Life-span battery 10 years O&M battery 1% Removal costs 360 Installations costs 10% 0.65 /kwh 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Investment costs O&M Removal costs 15
Levelized Costs of PV-Storage (LCOS PV ) 16
Economic Parameters of Photovoltaics and Storage Photovoltaic System + Storage PV System 100% User 100% Storage (100% - X) 17
Economic Parameters of Photovoltaics and Storage Levelized Costs of PV-Storage PV System + Storage = PV Electricity _ Storage Loss 18
Economic Parameters of Photovoltaics and Storage Levelized Costs of PV-Storage = + + (1+) + =1 (1 ) (1+) =1 _ + (1+) + =1 ( h ) (1 ) (1+) =1 19
Economic Parameters of Photovoltaics and Storage Levelized Costs of PV-Storage PV system Lithium ion battery System price 1,600 /kw Battery price 2,300 /kw system size 5.0 kwp Battery size (nominal) 5.0 kwh Yield per kwp 900 kwh/ kwp Depth of discharge 80% Battery size (effective) 4.0 kwh Degradation 0.25% Battery efficiency 92% Life-span 20 years Life-span battery 20 years O&M PV system 1.5% O&M battery 1.0% Removal costs 800 Removal costs 575 Installations costs 20% Installations costs 10% LCOS PV 0.42 /kwh 20
Economic Parameters of Photovoltaics and Storage PV system price development Source: EuPD Research 2013 2,400 PV system price development and price forecast: Residential rooftop systems in Germany 2,200 2,000 1,800 1,600 1,400 1,200 1,000 2011 2012 2013e 2014e 2015e 2016e 2017e 2018e 21
Economic Parameters of Photovoltaics and Storage Lithium-Ion-Storage solution price development Source: EuPD Research 2013 2,400 Storage system price forecast: 6 kwh Lithium-Ion-Storage solution 2,200 2,000 1,800 1,600 1,400 1,200 1,000 2013e 2014e 2015e 2016e 2017e 2018e 22
Economic Parameters of Photovoltaics and Storage Grid Parity of PV-Storage in Germany 60 Cent/ kwh Sources: EuPD Research/ BDEW 2013 50 Cent/ kwh 40 Cent/ kwh 30 Cent/ kwh Grid Parity of Photovoltaics Grid Parity of PV-Storage 20 Cent/ kwh 10 Cent/ kwh 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Electricity price (private households) LCOE PV LCOS PV 23
Economic Parameters of Photovoltaics and Storage Grid Parity of PV-Storage in Germany (incl. Funding) PV system Lithium ion battery System price 1,600 /kw Battery price 2,300 /kw system size 5.0 kwp Battery size (nominal) 5.0 kwh Yield per kwp 900 kwh/ kwp Depth of discharge 80% Battery size (effective) 4.0 kwh Degradation 0.25% Battery efficiency 92% Life-span 20 years Life-span battery 20 years O&M PV system 1.5% O&M battery 1.0% Removal costs 800 Removal costs 575 Installations costs 20% Installations costs 10% Funding battery system 3,000 LCOS PV 0.37 /kwh 24
Economic Parameters of Photovoltaics and Storage Grid Parity of PV-Storage in Germany 60 Cent/ kwh Sources: EuPD Research/ BDEW 2013 50 Cent/ kwh 40 Cent/ kwh Grid Parity of PV-Storage 30 Cent/ kwh 20 Cent/ kwh 10 Cent/ kwh 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Electricity price (private households) LCOE PV LCOS PV LCOS PV (Funding) 25
Global Potentials 26
Global Potentials Grid Parity of Photovoltaics in Europe - 2013 35 Sources: EuPD Research/ BDEW 2013 electricity price (private households) in Cent/ kwh 30 25 20 15 10 Sweden Denmark Ireland Germany Belgium Austria Slovakia Hungary Greece Cyprus Italy Portugal Spain Malta PV system price in / kwp 1,600 1,300 5 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 solar radiation in kwh/ kwp 27
Global Potentials Grid Parity of Photovoltaics in Europe - 2016 Sources: EuPD Research/ BDEW 2013 35 30 electricity price (private households) in Cent/ kwh 25 20 15 10 UK Czech Republic Netherlands Luxembourg Poland Slowenia France PV system price in / kwp 1,600 1,300 5 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 solar radiation in kwh/ kwp 28
Global Potentials Grid Parity of Photovoltaics in Europe after 2016 Sources: EuPD Research/ BDEW 2013 35 30 electricity price (private households) in Cent/ kwh 25 20 15 10 Finland Latvia Lithuania Estonia Rumania Bulgaria PV system price in / kwp 1,600 1,300 5 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 solar radiation in kwh/ kwp 29
Global Potentials Grid Parity of PV-Storage in Europe - 2013 35 Sources: EuPD Research/ BDEW 2013 electricity price (private households) in Cent/ kwh 30 25 20 15 10 Cyprus battery price in / kw 2,300 1,500 1,200 5 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 solar radiation in kwh/ kwp 30
Global Potentials Grid Parity of PV-Storage in Europe - 2016 35 Sources: EuPD Research/ BDEW 2013 electricity price (private households) in Cent/ kwh 30 25 20 15 10 Italy Cyprus Portugal battery price in / kw 2,300 1,500 1,200 5 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 solar radiation in kwh/ kwp 31
Global Potentials Grid Parity of PV-Storage in Europe - 2018 35 Sources: EuPD Research/ BDEW 2013 electricity price (private households) in Cent/ kwh 30 25 20 15 10 Denmark Germany Italy Spain Cyprus Portugal battery price in / kw 2,300 Malta 1,500 1,200 5 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 solar radiation in kwh/ kwp 32
Global Potentials Influencing Factors to the Potential of PV Storage Influencing Factor Drivers Barriers FiT PV Systems low high Share of Renewable Energies in the Electricity Generation Installed Capacity of PV Systems [<10 kw] high high low low Household Electricity Prices high low Income per Capita high low Electricity Demand per Capita high low Total PV Market Size high low 33
Off-grid Markets 34
Off-grid Markets Input parameter Diesel generator System price 480 /kw Inflation rate 2.0% system size 5.0 kw Discount rate 4.0% O&M fixed 35 /kw CAGR diesel price 3.0% O&M variabel 0.07 /kwh Life-span 20 years Removal costs 38 /kw Fuel requirement 0.28 l/kwh Utilisation 1,500 h/a 35
Off-grid Markets LCOE by a diesel generator Sources: EuPD Research 2013/ GIZ 2013 1.5 Germany diesel price in / l 1 0.5 Morocco Mexico China Indonesia 0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 LCOE diesel generator in / kwh 36
Off-grid Markets LCOS PV system PV system Lithium ion battery System price 1,600 /kw Battery price 2,300 /kw system size 5.0 kwp Battery size (nominal) 5.0 kwh Yield per kwp depending on Depth of discharge 80% location Battery size (effective) 4.0 kwh Degradation 0.25% Battery efficiency 92% Life-span 20 years Life-span battery 20 years O&M PV system 1.5% O&M battery 1.0% Removal costs 800 Removal costs 575 37
Off-grid Markets LCOE by a diesel generator Sources: EuPD Research 2013/ GIZ 2013 Morocco Mexico Indonesia Germany China 0.0 Euro/ kwh 0.2 Euro/ kwh 0.4 Euro/ kwh 0.6 Euro/ kwh 0.8 Euro/ kwh LCOE Diesel LCOS PV 38
39 Sources: BMWi 2013/ IEA 2012/ Greenpeace 2012 World Energy Outlook Energy [R]evolution 2030 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Off-grid Markets Oil price development and forecast 250 $/b 200 $/b 150 $/b 100 $/b 50 $/b 0 $/b 1999 1998 1997 1996 1995 1994 1993 1992 1991
Conclusions 40
Conclusions Compared to the electricity prices of private households, electricity generated by PV systems is already competitive in most of the European countries. Further price reduction will lower the LCOE of PV systems within the coming years. The difference between LCOE of PV systems and electricity prices of private households will increase and that will push the diffusion of PV self-consumption solutions. PV storage systems are always accompanied by additional costs and a loss in electricity generation. According to current battery and PV system prices, Cyprus is the first country within the European Union to reach the so called Grid Parity of PV-Storage. Decreasing battery prices as well as PV system prices will help to establish more and more markets in which Grid Parity of PV-Storage is reached. Countries with high solar radiation and comparably high electricity prices such as Italy and Portugal will be the next. In other countries such as Germany and Denmark, the high electricity prices for private households push the success of PV storage solutions. 41
Conclusions Besides the electricity price, solar radiation and system prices present other factors influencing the market growth of PV storage systems. The status of the PV sales market as well as the feedin tariff for PV electricity are as important as the income situation and the electricity demand. In off-grid markets, the PV-storage system will be compared to other power sources, such as diesel generators. In the LCOE calculation, electricity generated by a diesel generator is compared to a PV storage system over the whole life-span of 20 years. Due to high solar radiation as well as low diesel prices in many countries it is cheaper to operate a PV storage system than a diesel generator. The finite nature of fossil fuel resources, the price of diesel and rising electricity prices will mean that PV systems, with or without integrated storage solutions, will become more and more competitive in all countries around the world. 42
THANK YOU FOR YOUR ATTENTION! 43
Imprint EuPD Research Phone +49 (0) 228-971 43-0 Fax +49 (0) 228-971 43-11 info@eupd-research.com www.eupd-research.com CEO Markus A.W. Hoehner Contact Martin Ammon Senior Research Manager m.ammon@eupd-research.com EuPD Research is a brand of HOEHNER RESEARCH & CONSULTING GROUP GmbH. 44