Solar PV Market Potential Globally - Business Finland · · 2014-06-18Solar PV Market Potential Globally and in Finland Christian Breyer Solar Energy in the North –Aurinkoenergia

Solar PV Market Potential Globally

and in Finland

Christian Breyer

Solar Energy in the North – Aurinkoenergia Pohjoisissa Oloissa

Helsinki, June 17, 2014

4 Solar PV Market Potential Globally and in Finland

Christian Breyer ► [email protected]

Agenda

Status and Dynamics of solar PV Diffusion

Grid-Parity

Vision behind

High shares of Renewables in the System

Solar PV in the Nordic

Summary



Business model of conv. utilities is collapsing



Power plant investments in EU (2000 – 2013)

PV and wind power will become the core pillars of a sustainable power supply

gas fired power plants are the bridging technology towards a 100% RE power supply

investments in gas infrastructure are NO stranded investments (unlike coal and nuclear)

source: EPIA, 2014

Power plant investments in EU in 2000 – 2013 in GW

source: EPIA, 2014



Global installed PV cap.: cumulated and added

source: EPIA, 2014



Global Installed PV Capacity: Relative

enormous market growth ahead,

since ~50%+ of conventional power capacity base could be supplemented

by PV at least (there is NO competition to wind power)

source: Werner C., Gerlach A., Breyer Ch., 2013. Analysis and Forecast of

Global Installed Photovoltaic Capacity and Identification of Hidden

Growth Markets, 28th EU PVSEC, Paris

Gerlach A.-K., Breyer Ch., et al., 2011. PV and Wind Power –

Complementary Technologies, ISES Solar World Congress, Kassel



Global Installed PV Capacity: Growth Rates

enormous market growth ahead,

since ~50%+ of conventional power capacity base could be supplemented

by PV (there is NO competition to wind power)

source: Werner C., Gerlach A., Breyer Ch., 2013. Analysis and Forecast of

Global Installed Photovoltaic Capacity and Identification of Hidden

Growth Markets, 28th EU PVSEC, Paris

Gerlach A.-K., Breyer Ch., et al., 2011. PV and Wind Power –

Complementary Technologies, ISES Solar World Congress, Kassel



Experience Curve: driven by growth and learning

0.001

0.010

0.100

1.000

10.000

100.000

1,000.000

10,000.000

100,000.000

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

year

an

nu

al p

rod

uc

tio

n [

MW

p]

space terrestrial roof-top power plant

Si solar cell terrestrial module roof-top programm

major markets

major inventions

off-grid on-grid

0.001

0.010

0.100

1.000

10.000

100.000

1,000.000

10,000.000

100,000.000

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

year

an

nu

al p

rod

uc

tio

n [

MW

p]

space terrestrial roof-top power plant

Si solar cell terrestrial module roof-top programm

major markets

major inventions

off-grid on-grid

source: Breyer Ch., et al., 2011. Research and Development Investments in PV – A limiting Factor for a fast PV Diffusion?, 25th

EU PVSEC/ WCPEC-5, Valencia 2010, September 6–10 ; Breyer Ch., et al., 2013. Global current and historic photovoltaic

research and development investments from the public and private sector, Energy Policy, 62, 1570-1580

cost reduction by x% per each doubling of cumulated

historic capacity (PV modules: ~20%, PV systems: ~16%)

currentwholesale pricerange



Solar PV: long-term Capex projection

source: ISE, 2014



Solar Resource and current and projected cost

data source: NASA SSE 6.0, calculation by HDKR model 1h interval at mean day of monthfor all months of the year

source: Breyer Ch. and Schmid J., 2010. Population Density and Area weighted Solar Irradiation: global Overview on Solar Resource Conditions for fixed tilted, 1-axis and 2-axes PV Systems, 25th PVSEC/ WCPEC-5, Valencia, September 6–10

Moderate region

LCOE2014: 90 – 140 €/MWh

LCOE2020: 80 – 110 €/MWh

LCOE2030: 65 – 85 €/MWh

LCOE2050: 50 – 60 €/MWh

Sunny regions

LCOE2014: 50 – 80 €/MWh

LCOE2020: 40 – 60 €/MWh

LCOE2030: 30 – 50 €/MWh

LCOE2050: 25 – 40 €/MWh



Agenda


Grid-Parity

Vision behind



Summary



Solar PV and End-user Economics

source: Deutsche Bank Securities, 2014. 2014 Outlook: Let

the Second Gold Rush Begin, New York



Impact of Solar Irradiation and Electricity Prices

solar irradiation differs by a factor of up to 2.5 (1,000 – 2,500 kWh/m²a)

for electricity this factor is as high as 30 (0.01 - >0.30 EUR/kWh) and therefore making electricity prices

far more important for reaching grid-parity than solar irradiation

source: Gerlach A. and Breyer Ch., 2012. Global Grid-Parity Dynamics on a

National and Regional Level, 27th EU PVSEC, Frankfurt



Impression for (Commercial) End-User Profitability

source: REC Solar, 2014. Study on the Profitability of Commercial

Self-Consumption Solar Installations in Germany; Italy and

Turkey (only in German available)

Lappeenranta University of Technology

• both systems on the right are part of a 220 kWp

commercial solar PV system

• it is financially beneficial for the university

• more details in August: Kosonen A., Ahola J., Breyer Ch., Albó A.,

2014. Large Scale Solar Power Plant in Nordic Conditions, 16th EU

Conference on Power Electronics and Applications, August 26-28, accepted



Agenda


Grid-Parity

Vision behind



Summary



Solar Economy (as defined by Fortum)

source: Brunila A., 2012. Fortum – Power and heat company in

the Nordic countries, Russia, Poland and the Baltics



Resources and Energy Demand

source: Perez R. and Perez M., 2009. A fundamental look on energy reserves for the

planet. The IEA SHC Solar Update, Volume 50

Key insights:• no lack of energy

resouces

• limited conventional

resources

• solar and wind resources

need to be the major

pillars of a sustainable

energy supply

Remark:

• conventional resources

might be lower than

depicted by Perez

source:

Kauppinen H., 2013. Kaasuvisio

energia- ja ilmastotiekarttaan 2050,

Suomen Kaasuyhdistyksen

syyskokous , November 21



Agenda


Grid-Parity

Vision behind



Summary



50% RE in Germany – Agora Energiewende, DE

source: Agora Energiewende, 2014. Comparing the Cost of Low-Carbon

Technologies: What is the Cheapest option, Berlin

Key insights:

• PV-Wind-Gas is the least cost option

• nuclear and coal-CCS are too expensive

• nuclear and coal-CCS are high risk

technologies

• high value added for PV-Wind due to higher

capacities needed



100% RE in Germany – Fraunhofer ISE, DE

source: Henning H.-M. and Palzer A., 2012. 100 % Renewables for Electricity and Heat – a

Holistic Model for a Future German Energy System , 7th IRES, Berlin



100% RE in Ireland – Aalborg University, DK

source:

Connolly D. and Mathiesen V., 2014. A technical and economic

analysis of one potential pathway to a 100% renewable energy

system, Int. J. Sustain Energy Planning and Mgm

Key characteristics:

• 100% RE system for all sector

• hourly resolved simulation

• solar PV ‚forgotten‘

• well balanced RE-heat and RE-mobility

• focus on energy flows and system costs

• no grid, no import/ export, not fully optimised




Key insights:

• 7 step approach feasible

• significant increase in power demand (~ +350%)

• BUT, no change in total primary energy demand (TPED)

• highly efficient power-based RE system enables power-

to-gas/liquid pathways




Key insights:

• 2020 system cost only 30% higher than reference (neglecting: cost

of climate change, cancer deaths, negative trade balance effects,

lower level of employment in energy sector, less tax income)

• 2050 system cost identical to reference

• simplified standard economic consideration, neglecting the full

view on total societal cost

• otherwise, maybe 30% less in cost (personal estimate)

• significant increase in employment (> 100 000 jobs)



Storage options in General and RPM

source: Breyer Ch., Rieke S., et al., 2011. Hybrid PV-Wind-Renewable

Methane Power Plants – A Potential Cornerstone of Global

Energy Supply, 26th EU PVSEC, Hamburg, September 5-9

daily seasonal

storage for PV + Wind

TES

Key insights:

• gas is the only long term energy storage

• RPM might be favoured due to an

evolutionary transition process



Energy system

Major components

• CCGT/ OCGT

• wind energy

• PV

• CSP

• TES

• battery

• renewable power

methane (RPM)

• heating rod

Key characteristic

• 100% RE

• hourly consideration

• Power supply security

• Worst case assumption (no hydro,

heat, mobility, regional power

exchange, no H2 direct use)

source: Pleßmann G., Erdmann M., Breyer Ch., et al., 2013. Global Energy Storage Demand for a

100% Renewable Electricity Supply, 8th IRES, Berlin, November 18-20



Financial and technical assumptions for 2020

Technology Capex Opexfix Opexvar Lifetime [a] Efficiency [%]

Photovoltaics 900 €/kWp 15 €/kWp 0 €/kWhel 25 -

Wind power 1000 €/kWel 30 €/kWel 0 €/kWhel 25 -

Battery 250 €/kWhel 20 €/kWhel 0 €/kWhel 10 80

Gas storage 0.05 €/kWhth 0.001 €/kWhth 0 €/kWhth 50 -

Power-to-Gas 936 €/kWel 24 €/kWel 0.03 €/kWel 20...30 50

CCGT 750 €/kWel 15 €/kWel 0 €/kWhel 30 58

OCGT 380 €/kWel 7.6 €/kWel 0 €/kWhel 30 38

CSP (solar field) 500 €/kWth 10 €/kWth 0 €/kWhth 25 50

Thermal storage 28 €/kWhth 0.3 €/kWhth 0 €/kWhth 20 93

Steam turbine 700 €/kWel 14 €/kWel 0 €/kWhel 30 42

Heating rod 20 €/kWth 0.4 €/kWth 0 €/kWhth 30 100

Hot heat burner 100 €/kWth 2 €/kWth 0 €/kWhth 20 95

Natural gas fuel - - 0.03 €/kWhth - -

WACC: 7%; Capex CSP+8hTES: ~ 3200 €/kWel



What does a 100% RES supply cost?

• LCOE: global average 142 €/MWh (min 80 – max 203 €/MWh)

• strong dependence on local resource conditions

• more components need to be included (hydro, heat, mobility, desalination, etc.)

• still worst case assumptions





Global average:

Resulting cost optimal system configuration

Global capacities of resources

7300 GW PV

6700 GW Wind

3900 GW CSPel

Global capacities of storages (elec.)

1500 GWh Batteries (375 bn €)

1691000 GWhth Gas storage (85 bn €)

2360 GWel RPM capacity (2207 bn €)

73560 GWhth TES (2060 bn €)

6 %

67 %

27 % Battery

TES

RPM

Shares of energy supply from storages

33 %

46 %

21 %PV

Wind

CSP

Shares of energy supply

9400 TWh

13200 TWh

6000 TWh





Maximum (visionary) solar PV Market long-term

Key question:• What is the long-term maximum solar PV demand globally?

Assumptions:• global population: 10 billion people

• energy consumption level: today’s EU28 average should guarantee a good standard of living

• energy generation: primary energy demand supplied by power technologies, mainly wind energy and solar

energy, due to major constraints, like resources, costs, emissions and efficiency

• energy demand: sectors power, heat and mobility use different forms of energy, based on electricity

• efficiency of solar PV: doubling of system efficiency from ave 15% today to 30% (impact on area demand)

• senarios: breakthrough progress of batteries: Yes (PV share 40% of total) / No (PV share 25%)

Results:

• such an energy system is technically, economically and ecologically feasible (see Ireland, Germany, etc.)

• demand for solar PV capacity might be about 65 TWp up to 100 TWp depending on battery breakthrough

• solar PV energy generation might be up to 160 000 TWh/a

• roof-top capacity might be about 10 – 20 TWp, rest need to be ground mounted

• area demand for ground mounted systems would be 0.3 % - 0.6% of global land area



Agenda


Grid-Parity

Vision behind



Summary



Solar in the Nordic

Grid-Parity events in the Nordic *,**

• 2011: Denmark

• 2014: Sweden

• 2015: Norway

• 2016: Finland

• 2020s: Iceland

* for standard assumptions; deviations

possible

** Gerlach A. and Breyer Ch., 2012.

Global Grid-Parity Dynamics on a

National and Regional Level, 27th EU

PVSEC



Solar PV in the Nordic – A recent IEA view

source: IEA, 2013. Nordic Energy

Technology Perspectives –

Pathways to a Carbon

Neutral Energy Future

Key insight:

• solar PV is expected to play no role in the Nordic until 2050

To be discussed:

• However, solar power generation cost are already today comparable in some

regions to some of the mentioned solutions in the scenarios

• Are solar power generation costs of 50 – 60 €/MWh (in the mid- to long-term)

really too high?

• Additionally, we need sustainable solutions for the power, heat and mobility



Solar in the Nordic – Status and Dynamic

source: Kosonen A., Ahola J., Breyer Ch., Albó A., 2014. Large Scale Solar Power Plant in Nordic

Conditions, 16th EU Conference on Power Electronics and Applications, August 26-28, accepted

Based on:

• IEA-PVPS, 2013

• EPIA, 2014

• Werner C., et al.,

2013

• Kosonen A., et

al., 2014

Based on:

• Pleßmann G., et

al., 2013

• Kosonen A., et

al., 2014



Agenda


Grid-Parity

Vision behind



Summary



Summary

Solar PV diffusion trend is stable for decades (leaning rate,

growth rate, cost reduction)

More and more market segments become profitable

Solar PV is a major part of the complex energy system

PV and Wind emerge to the backbone of global energy supply

100% RE system is feasible: technical, economical, ecological

RPM is needed to achieve 100% RES based energy supply

Long-term market potential is huge: some TWp up to 100 TWp

Nordic PV markets: Grid-Parity will accelerate the growth

Thanks for your attention!

Documents

Solar PV Market Potential Globally - Business Finland · · 2014-06-18Solar PV Market Potential Globally and in Finland Christian Breyer Solar Energy in the North –Aurinkoenergia