By Jyoti Prasad Painuly

PV, A Promising Component of the Renewables in Europe

Taking lead, in the 3rd European Renewable Energy Policy Conference organized by European Renewable Energy Council (EREC) in Brussels in November 2009, European Commission projected a share of 80% renewable energy in final energy consumption by 2050, indicating the policy direction in which EU could move. There was a broad consensus in the conference that renewable energy will be the mainstream source of Europe’s energy supply by 2050. A combination of policy framework of renewable energy targets, carbon pricing and funding for R&D is expected to lead development of a strong renewable energy sector. PV can be expected to play a significant role in this. In March 2007, the European Council had endorsed the binding target of a 20% share of renewable energies in the overall EU energy consumption by 2020. This implies a share of about 35% of electricity consumption. The EU goals also included reduction of overall energy consumption by 20% and reduction of greenhouse-gas emissions unilaterally by 20% from 1990 levels. The policy rationale for EU declaration includes increased energy security, environmental sustainability and climate change concerns. PV has tremendous potential to meet these requirements, and can be expected to be a key component of the renewable energy strategies in the EU countries.

In the study SET FOR 2020, European Photovoltaic Industry Association (EPIA, 2009)¹⁾ considers different scenarios for PV deployment in Europe. The most optimistic scenario, which has been termed as Paradigm Shift Scenario indicates that under right conditions PV electricity could provide up to 12% of the EU electricity demand by 2020. In this case PV will yield more than a third of the additional renewable production required, with the remainder supplied by wind, biomass, concentrated solar power, geothermal, hydro, tidal, wave and other forms of renewable energy. This, however, would require full dedication from the PV industry to achieve cost reductions, marketing efforts, optimized PV supply chains, greater cooperation with utilities, the rapid and widespread adoption of power storage and smart grid technologies, and wider policy support of PV in Europe. Thus, PV can supply a significant share of the 1,244 TWh gap in renewable energy production required by 2020. According to EPIA, by the end of 2020, PV can be competitive in as much as 76% of the European electricity market.

World PV Installation: Expansion Expected

In yet another significant study “Energy from Desert” Komoto et.al. (ed.)8) presents a roadmap for very large PV systems and indicates that in a sustainable scenario, world total cumulative PV capacity will reach 133 TW in 2100. In this scenario, annual world PV installation is expected to be about 120 GW/year in 2030, 1,000 GW/year in 2050 and finally level off at 4,5 TW/year in 2100. This indicates expansion of the world PV market US$56 billion/year in 2020, US$160 billion/year in 2030, US$0,9 trillion/year in 2050 and finally stabilize at US$3,4 trillion/year in 2100. Of this, very large system are expected to provide 50% of the capacity.

Figure 1. World production of PV cell/module (Source: Jager-Waldau, 2008)

Existing and Emerging

EU countries with their renewable energy targets can be expected to be high growth markets. According to IEA (2008A)⁴⁾, in one of their PVPS study of 14 countries, the potential solar power production from available PV roofs and facades could meet between 15% and 60% of each country’s electricity demand. Besides EU whose renewable energy sector and policies are highly visible, several other countries have fixed targets for growth of renewable energy with PV as an important component of their renewable energy strategy. Australia has targeted 45 Terawatt-hours (TWh) of electricity by 2020, and India increased its target to 14 GW of new renewables capacity by 2012. Of this, governmental target for grid-connected photovoltaic systems is 50 MW. On the other hand, PV companies in India expect the PV market to grow to 1-2 GW by 2010. Japan set new targets for 14 GW of solar PV by 2020 and 53 GW by 2030. China has set a target for renewable energy to contribute 10% of the country’s gross energy consumption by 2020, a huge increase from the current 1%. A new and emerging market is South Korea where 75-80 MW was installed in 2008. Korea has a target to increase the share of renewable energy to 5% by 2011. For photovoltaics, a goal of 1.3 GW cumulative installed photovoltaic electricity generation capacity by 2012 and 4 GW by 2020 has been set. Even Brazil, with share of electricity from renewable at 87% in 2007, plans to increase it. The U.S. is an existing as well as emerging market with a number of states taking initiative to increase share of renewable energy with incentives that are making electricity from PV competitive with electricity from the grid.

Installed Capacities and Promising Prospects

Grid-connected solar photovoltaics was the fastest growing power generation technology, with a 70% increase in capacity which reached 13 GW in 2008 with an estimated 5.4 GW addition during 2008 (Ren21, 2009). Spain and Germany were the market leaders with 2.6 MW and 1.5 GW of new capacity installations, followed by the U.S. (310 MW), South Korea (200-270 MW), Japan (240 MW) and Italy (200-300 MW). Australia, Canada, China, France, and India were other growing markets. Off-grid solar PV markets also grew and emerged in new countries, taking total PV installed capacity to more than 16 GW in 2008. Several other countries are emerging as attractive markets for the PV as a part of their renewable energy development plans.

Other important developments included building-integrated PV segment, which picked in Europe with more than 25 MW installed, and utility-scale power plants (more than 200 KW capacity), which grew in 2008 to reach a total 1,800 and installed capacity, 3 GW. The largest single plant of 60 MW in the world was installed in Spain. New utility scale plants are planned and under development in many countries in Europe and other countries, including China, India, Japan, and the United States.

PV Production

On production side, renewable energy industries in general experienced high growth during 2008 global solar PV production increased by 90% to 6.9 GW in 2008. China overtook Japan to become the new world leader in PV cell production and India also joined ranks of upcoming producer of solar PV with US$18 billion in new solar PV manufacturing investment plans. New manufacturing facilities and capacities came up in the Concentrating Solar Power (CSP) industry. Significant PV capacity increases in many countries are expected to take the solar cells production capacity to 35 GW by 2010. This could lead to softening of the market as demand is expected to be below the supply capacity. EU remains a promising market with the target for the cumulative photovoltaic systems capacity installed at 3,000 MW by 2010. This, however, assumes that new solar cell and module designs get developed as some of the available material resources may not be able to meet the current technology requirements (See Figure 1) (Jger-Waldau, 2008)⁶⁾.

PV Investment

On investment side, about US$120 billion was invested in renewable energy worldwide in 2008 (excluding larger hydro), of which solar PV accounted for around 32%. Banks, multilateral financing institutions, donors and governments continued to provide financing for renewable.

Declining Costs

Though mismatch in demand and supply, primarily due to material shortages, had resulted in price escalations in PV capital costs in recent years, the general long term trend has been reduction in costs of PV technology. In 2008, some of the IEA PV program countries reported the average price of modules as low as US$4/W. According to an LBL report (Wiser, 2009)¹¹⁾, the installed cost of grid-connected PV systems in the United States declined from US$10.5/W in 1998 to US$7.6/W in 2007. According to Hsser (2009)²⁾, electricity from photovoltaics can be expected to be competitive in the next 10-15 years, generation cost reaching appr. 0.20 /kWh. Downward pressure on prices of modules due to over-supply capacity may also result in lower installed costs in immediate future.

Policies

Renewable energy promotion policies have played a crucial role in development of PV. Feed-in tariffs have been particularly important in growth of grid-connected PVs. 73 countries had targets through policies by early 2009 and 64 had policies to promote to promote renewable power generation, including 45 countries and 18 other entities (states/provinces/territories) with feed-in tariffs. In addition to this 49 countries/states/ provinces had renewable portfolio standards (REN21, 2009)9).

The Future

The fast growing photovoltaic sector has also been effected by the financial crisis that hit the world in 2008, leading to some over capacity and cost reductions but it may lead to adverse impact on investment in the sector. However, with rapidly growing market, continuous flow of new entrants, new business models and innovations, the sector promises to be high growth sector. Financing costs have come down and investment trend indicates increasing availability of capital for commercial applications, signaling increasing confidence of financial sector in PV. In a policy paper, the German Advisory Council on Global Change (WBGU, 2008) shows that in an ambitious growth rate scenario, it is mainly solar power and solar hydrogen that can meet the exponentially increasing world energy requirements after mid century, when other renewable energy sources may peak at their sustainable level. The WBGU¹⁰⁾ portfolio of renewable energies in an ambitious CO₂ stabilization scenarios are given in Figure 2, which indicates the prominent role that solar PVs can be expected to play in future.

The study Energy from Desert indicates tremendous potential and possibility of tapping the solar power in deserts. The solar resources of six deserts--Sahara, Gobi, Great Sandy, Thar, Sonara, and Negev have been estimated at 752 PWh, which is 5.2 times the expected world energy demand in 2010. Experts estimate that the capacity of very large-scale systems (VLS-PV) could reach 100 MW in the near term, and then to GW-scale PV plants towards the middle of the 21st century. The average system cost is expected to come down to US$0.75/W in 2100, from US$4.50/W in 2010. In optimistic scenarios, the VLS-PV could reach a 20% share in the world energy supply by 2050 and 50% by 2100. Ken et al (2008)⁷⁾ present a plan which, with available technology and an investment of over 400 billion dollars by the federal government, could provide 69% of the electricity and 35% of total energy demand of the U.S. with solar power by 2050. These studies may seem like a dream now but these are visions of the experts for PV industry. These are also indicative of the opportunities that PV may hold for the future of mankind. It is for PV industry to realize this vision.

Jyoti Prasad Painuly is Senior Energy Planner at UNEP Risoe Centre, Denmark (http://uneprisoe.org). Painuly’s areas of interests include renewable energy, energy efficiency, and climate change issues.

REFERENCES

1) EPIA (2009), SET FOR 2020 Solar Photovoltaic Electricity: A mainstream power source in Europe by 2020, Ex Summary, European Photovoltaic Industry Association. http://www.setfor2020.eu/

2) Hsser Pius (2009). PV Investment in Europe, presentation at IEA PVPS workshop. http://genc.iie.org.mx/genc/fotovoltaico/pdfs/pv%20investment.pdf

3) IEA (2008). Energy Technology Perspectives in support of the G8 Plan of Action; Scenarios & Strategies to 2050, Executive Summary. IEA.

http://www.iea.org/techno/etp/ETP_2008_Exec_Sum_English.pdf

4) IEA (2008A). PV Snapshot, http://www.iea-pvps.org/ (accessed 30 Nov, 2009)

5) IEA (2009). Trends in Photovoltaic Applications, Survey report of selected IEA countries between 1992 and 2008, Photovoltaic Power Systems Programme, Report IEA-PVPS T1-18:2009.

6) Jger-Waldau Arnulf (2008). PV Status Report 2008, European Commission.

7) Ken Zweibel , James Mason and Vasilis Fthenakis (2008). A Solar Grand Plan, Scientific American January 2008.

(Preview: http://www.scientificamerican.com/article.cfm?id=a-solar-grand-plan)

8) Komoto Keiichi, Masakazu Ito, Peter van der Vleuten, David Faiman, Kosuke Kurokawa (ed) (2009). Energy from the Desert; Very Large Scale Photovoltaic Systems: Socio-economic, Financial, Technical and Environmental Aspects (Executive Summary), Earthscan 2009.

9) REN21 ( 2009). Renewables Global Status Report: 2009 Update (Paris: REN21 Secretariat). http://www.ren21.net/pdf/RE_GSR_2009_Update.pdf

10) WBGU (2004). Renewable energies for sustainable development: Impulses for renewables 2004, German Advisory Council on Global Change.http://www.wbgu.de/wbgu_pp2004_engl.pdf

11) Wiser Ryan, Galen Barbose, and Carla Peterman, (2009). Tracking the Sun; The installed cost of photovoltaics in the USfrom 1998-2007, LBL report LBNL- 1516-E. http://eetd.lbl.gov/ea/emp/reports/lbnl-1516e.pdf

For more information, please send your e-mails to pved@infothe.com.

© www.interpv.net All rights reserved