Coronavirus cuts PV demand as Europe hit hard

The impact of the coronavirus pandemic on the global solar industry has shifted from a supply problem to a demand problem, as travel restrictions delay projects and economic uncertainty curbs investment activity.

IHS Markit now predicts annual global PV installations will fall 16% this year to 105 GW, the research group said March 31.

Europe could see a much larger drop, IHS Markit said. Previously, the group had predicted installations in Europe would rise by 5% in 2020 to 24 GW and Spain, Germany, Netherlands, France, Italy and Ukraine would account for 63% of demand.

Chinese solar manufacturing has resumed and could reach full capacity by mid-2020, but travel restrictions imposed by most major solar markets have delayed projects and cut short-term demand, IHS Markit said in its latest statement.

"Almost all large projects originally planned for completion in H1 2020 will be impacted in some way, and roof-top installations will grind to a halt. COVID-19 will also severely hit the planning and kicking-off of new projects in H2 2020," it said

IHS Markit predicts travel restrictions will be gradually lifted throughout the summer and solar activity will pick up in the second half of the year.

"However, the severity of the global economic downturn triggered by the pandemic will prevent a rapid recovery this year...the general financial environment will impact heavily on demand for all types of PV systems," it noted.

Following short-term disruption, IHS Markit predicts installation growth will resume from 2021 on the same growth trajectory that PV has seen over the last decade.

"Despite this major global health and economic crisis, we believe the mid-term fundamentals for solar PV growth continue to be strong, including continued cost reduction, the need for greater resilience and autonomy, low-carbon energy generation, distributed generation, and scalability," it said.

On March 26, the European Council of ministers called on the Council, the European Commission (EC) and the European Central Bank (ECB) to integrate the green transition into a compressive recovery plan for the COVID-19 pandemic. This will require a coordinated exit strategy and "unprecedented investment," the ministers said.

Germany loosens installation deadlines, retains tender dates

Solar developers in Germany will be allowed to apply for extensions to construction deadlines following the supply chain disruption caused by the coronavirus pandemic, Germany's energy regulator Bundesnetzagentur (BNetzA) said March 23.

As the coronavirus spreads across Europe, supply interruptions and travel restrictions have delayed projects. BNetzA is aiming to limit the penalties incurred by developers.

The dates of future renewable energy tenders in Germany remain unchanged, for now, BNetzA said.

Germany allocated 300 MW of new solar projects in March and will tender for a further 150 MW in June, followed by 300 MW in July, 400 MW in September, 150 MW in October and 400 MW in December.

BNetzA will inform the tender winners but will not publish the results online or enforce implementation deadlines until after the impact of the coronavirus has softened, the agency said.

In the Netherlands, solar and wind industry associations Holland Solar, NVDE and NWEA have called on the government to extend deadlines for project decisions by one-year.

Travel restrictions were impacting project schedules, Holland Solar said in a statement March 26.

"The shortage of manpower is the biggest problem and to a lesser extent the shortage of material," the trade group said.

Chinese solar manufacturing is ramping up and most solar power installers in the Netherlands have enough stock for about three months, allowing them to bridge the supply gap, it said.

US solar sector calls for coronavirus aid to minimize job losses

The impact of coronavirus on the US solar industry is deepening as the pandemic spreads across the country, the US Solar Energy Industry Association (SEIA) has warned.

The worsening pandemic has led to supply chain interruptions and labor shortages and 40% of solar companies had reported a reduction in workforce by March 26, a survey by SEIA showed.

Key concerns for solar companies include delays to project construction, supply chains and permitting, and a slump in customer acquisitions, SEIA said.

More than 63% of respondents were concerned they couldn't get access to tax equity, it said.

Congress failed to include explicit support measures for renewable energy companies in a new $2 trillion coronavirus aid package agreed March 25. Solar, wind and hydro industry groups had called on Congress to extend tax credit deadlines for renewable energy projects to prevent mass job losses.

"We are working with Congress to find solutions," SEIA said March 26.

Before the crisis, US solar employment was forecast to rise by 7.8% this year to 269,500 jobs as new installations soared to record levels, the Solar Foundation said in its National Solar Jobs Census in February. Annual solar PV installations were forecast to rise by 47% in 2020 to almost 20 GW, SEIA and Wood Mackenzie said in a joint report. Growth would mainly be driven by the utility-scale market and total annual installations were expected to creep above 20 GW in 2021, SEIA said.

Employment in solar installation, the largest job sector, was expected to grow by 9.5% this year, adding around 15,000 jobs to the US economy, the Census showed. Employment in operations and maintenance (O&M) was expected to rise by 4%, equivalent to 463 new jobs nationwide, it said.

                    US solar installation forecast before coronavirus pandemic

                                                              (Click image to enlarge)

Source: SEIA, Wood Mackenzie

"This once again is testing our industry’s resilience, but we believe, over the long run, we are well positioned to outcompete incumbent generators...and to continue growing our market share,” SEIA said.

Coronavirus lockdowns slice power demand, hike renewables share

The escalating coronavirus pandemic has sliced power demand in Europe and the US, pushing down prices and increasing renewable energy share, data from grid operators show.

The closure of factories and offices has reduced business power demand and this has not been offset by residential demand. In some countries, travel restrictions could tighten in the coming days and weeks, further impacting power demand and asset operations.

In Germany, a manufacturing powerhouse, industrial demand could fall by up to 20% this year due to the coronavirus crisis, reducing power prices by as much as 7.8%, Enervis energy consultancy said. The share of renewable energy could rise from 42% to 45% this year, it said.

In the UK, the lockdown of all but essential workers reduced power demand by around 10%, increasing the share of renewable energy and putting some gas plants out of the money, the national grid said.

In France, national power demand has fallen 15% since self-distancing measures were put in place, national grid operator RTE said March 19. On March 17, France ordered people to stay at home unless they had to perform essential duties, after the closure of bars, restaurants and non-essential shops failed to limit congregations. On March 23, France enforced perimeter limits on civilians.

The lockdown has shifted daily demand patterns, creating challenges for forecasters, RTE said.

"There is no reference scenario that allows us to predict day-ahead demand as accurately as usual...RTE forecasters are having to adjust their forecasts in real-time," it said.

French power demand is rising more gradually than normal during the morning, hitting a lunchtime peak around 13:00 local time, then falling more sharply than usual in the afternoon ahead of the evening peak period, the grid operator said.

                               French power demand before, after lockdown

                                                            (Click image to enlarge)

Source: RTE (France's national grid operator)

In Italy, where coronavirus fatalities have soared, power demand fell by up to 9% following a nationwide quarantine March 13, according to S&P Global Platts Analytics.

In the U.S. ISO New England region, changes in behavior following the coronavirus outbreak had reduced power demand by 3 to 5% compared with normal levels, ISO New England said March 31.

"Our forecasters are seeing load patterns that resemble those of snow days, when schools are closed and many are home during the day. These patterns include a slower than normal ramp of usage in the morning, and increased energy use in the afternoon," the ISO said in an earlier statement.

"Though the pandemic is affecting energy usage, weather conditions remain the primary drivers of system demand," the operator noted.

"We will continuously monitor these ever-changing trends in load patterns, and make the appropriate adjustments to calculate an accurate load forecast," it said.

New Energy Update 

As demand for bifacial panels takes off, early field learnings are seen as critical to optimizing performance.

Bifacial panels are forecast to represent 17% of the global solar market by 2024, Wood Mackenzie said in a recent report. Some 30% of new U.S. utility-scale projects will use bifacial systems by 2025, according to the US National Renewable Energy Laboratory (NREL).

A new study by German developer Enerparc shows how optimization of key bifacial parameters such as albedo (ground reflectance) and tilt angles can significantly boost power production.

Over a year, Enerparc studied the performance of bifacial panels at an operational solar facility in southern Germany. Enerparc has developed over 3 GW of PV projects globally, including over 1 GW in Germany.

The study showed that for plants with fixed structures, high ground coverage ratios and a typical albedo of around 20%, bifacial modules can increase output by 4%, Miriam Guari Borrull, Systems Engineer at Enerparc, told the conference in Munich on March 6.

Bifacial modules introduce a greater number of performance variables and some are key to boosting output.

Operators can double the bifacial gains by using commonly-available materials like gravel to improve ground reflectance, Borrull said.

"When we [use] an artificial albedo we [found] a simulated bifacial gain of 8%," she said.

Winter boost

To perform the tests, Enerparc installed 10 strings of bifacial modules under the same conditions as monofacial modules.

Enerparc used standard row layouts and simple and proven installation methods and assumed a fixed tariff revenue arrangement.

The bifacial modules had 290 W frontside power and 75% bifaciality. The modules were fixed using standard mounting structures at a height of 0.7 meters, a base case tilt angle of 20 degrees and 3.5 m row spacing.

The ground coverage ratio was 65% and albedo (ground reflectance) was measured at 17%.

Over the whole year, the bifacial gain was 4%, but this rose to over 7% during winter, Borrull said.

Gains increased in the winter due to lower temperatures, higher levels of diffuse irradiance which reaches the rear side of the module, and snow coverage, she said.

Some developers are now exploring bifacial projects in northern regions of Europe and North America to capitalize on the high reflectance qualities of snow.

As fixed tariff subsidies expire in the coming years, bifacial plant operators could take greater advantage of higher wholesale prices in the winter.

                   Average wholesale power prices in Central Western Europe

                                                           (Click image to enlarge)

Source: European Commission's quarterly electricity market report

Revenue bounce

In its tests, Enerparc found that the type of ground surface has a dramatic impact on the albedo and the gain in output was directly proportional to the increase in albedo, Borrull said.

Fresh snow was estimated to have an albedo of around 80 to 95%, compared with 15 to 25% for green grass and 10 to 20% for bare soil, she said.

For sites with similar conditions, operators might look to use quartz-sand gravel, limestone gravel or open-pored concrete to increase albedo, Borrull said.

"Of course you have to keep in mind biodiversity and which material you have available [close by]," she said.

In the U.S., NREL is currently developing the first ever database of albedo values for different regions and different types of ground surface.

Data collected will include types of vegetation and soil, data from surface radiation, CO2, water and energy flux networks.

Another key performance driver is the tilt angle of the modules and the optimum tilt angle depended on the ground coverage ratio of the modules, Borrull said.

For a 30% ground coverage ratio, the optimum tilt angle was around 30 to 40 degrees while for a 55% ground coverage ratio, the optimum tilt angle was around 20 degrees, she said.

Future uses

Creative installation of bifacial modules could open up new deployment opportunities.

"There are lots of different use cases. One case could be dual-use of the available area, for example agri-PV," Armin Scherl, Head of System Engineering at Enerparc, told the conference.

PV panels can even be installed vertically, for example to serve as fences or noise prevention, and this can have additional benefits, Scherl said.

The vertical installation of PV panels facing east-west can help to match up supply with peak demand periods—and higher wholesale prices-- in the morning and evening, he said.

"The feed in curve comes really close to the curve of demand-- with the morning and the afternoon peak," Scherl said.

"This could make sense for the future...where we sell energy on the spot market and not on fixed tariffs," he said.

New Energy Update 

On March 28, Spain tightened nationwide coronavirus restrictions, prohibiting all "non-essential" outside work, including construction, for two weeks.

The move came as Spain's daily coronavirus mortality rate rose above 800 and its total death toll was the second-highest in the world after Italy. Some experts predict European nations will require lockdowns of varying severity for months.

Spain's solar sector has been booming as developers race to meet construction deadlines and falling costs spur unsubsidized projects. Prior to the crisis, Spain was forecast to install 3.5 to 4 GW/year of new capacity in the next five years, according to SolarPower Europe.

Following the latest lockdown, project partners are working together to limit delays and maintain the integrity of the industry.

Spanish utility Iberdrola will now halt construction work on six new projects it is developing in Extremadura, the company told New Energy Update.

However, the company will continue planning for this 2 GW of new capacity and is implementing measures to minimize job losses down the supply chain, the company said.

Iberdrola is "supporting our suppliers so that they are not forced to take measures that could be irreparable to their future activity," it said.

Common objective

Spain's solar suppliers are aligning company and worker goals to minimize the length of project delays, Jose Donoso, chief executive of Spanish solar industry group UNEF, told New Energy Update.

Iberdrola does not expect significant delays to projects currently under construction, the company said.

Spanish solar companies are adopting smart home-working practices and workers unable to work are required to take paid holiday for the initial 15-day period, Donoso said.

When the crisis is over, employees will be required to make up the lost hours of work, presumably through overtime or not taking paid holiday, he said.

This will enable companies to minimize delays and limit the impact on worker income, he said.

There is a general understanding along the supply chain that force majeure will apply during the coronavirus crisis, Donoso said.

Depending on the contract, force-majeure can excuse non-performance, adjust commercial terms according to market conditions, or in some cases, terminate the contract.

Subsidy payments will also remain valid, despite project disruption, Donoso added.

“All parties involved in contracts will understand it,” he said.

Projects developed without subsidized tariffs could face greater challenges in the coming months as developers seek to secure long-term power purchase agreements (PPAs) with businesses amid an uncertain economic outlook.

Critical operations

The latest restrictions also allow "essential" operations and maintenance (O&M) to continue at existing solar plants.

Iberdrola is able to continue O&M activities at its operational solar assets, the company said.

“The company has established a rigorous health and safety system, aligned and coordinated with the administrations responsible," the spokesperson said.

O&M workers in Spain are encouraged to travel in single occupancy vehicles and are provided with personal protection equipment, including masks and gloves, UNEF said in a statement March 24.

The staff are given documents approving their right to move around during the day and operators are using remote online monitoring tools to minimize labor needs, it said.

Grid-ready

After rapid construction last year, Iberdrola's giant 500 MW Nunez de Balboa PV project is now set to start commercial operations slightly later than planned.

Europe's largest solar facility, Nunez de Balboa is located on a 2,470-acre (1,000-hectare) site in western Extremadura and was due online in Q1. Funded by European and Spanish banks, the facility is expected to produce 832 GWh of power per year and Iberdrola has signed long-term power purchase agreements (PPAs) with Kutxabank, telecoms group Euskaltel and supermarket group Uvesco. The remainder of the power will be sold to retail customers or the wholesale market.

Construction was completed in December and Iberdrola has completed all testing, including energization, and set up the O&M team, the company told New Energy Update.

Iberdrola is now awaiting one single registration document before it can start operating the plant.

“This procedure could be temporarily affected by the [coronavirus] alarm status, but we do not foresee [a significant] impact from this situation in our renewable development plans,” the company said.

By Neil Ford

Half of US solar workers impacted by COVID-19 cuts, survey shows

Some 55% of US solar workers have been laid off or are working at reduced hours or lower pay due to the ongoing COVID-19 pandemic, according to a survey performed by the US Solar Energy Industry Association (SEIA).

The findings are based on a survey conducted between March 22 and April 10. The participants represented 34,000 jobs, around 15% of the solar workforce.

          Impact of COVID-19 on US solar jobs

                                 (Click image to enlarge)

Source: Solar Energy Industry Association (SEIA)

Late last month, SEIA said 40% of solar companies had reduced their staff numbers and warned the situation was worsening.

Since the outbreak of the virus, Wood Mackenzie Power & Renewables has reduced its US solar market outlook for 2020 by 18%, from 19.6 GW to 16.0 GW.

Before the crisis, US solar employment was forecast to rise by 7.8% this year to 269,500 jobs as new installations soared to record levels, the Solar Foundation said in its National Solar Jobs Census in February.

Employment in solar installation, the largest job sector, was expected to grow by 9.5% this year, adding around 15,000 jobs to the US economy, the Census showed. Employment in operations and maintenance (O&M) was expected to rise by 4%, equivalent to 463 new jobs nationwide, it said.

"This once again is testing our industry’s resilience, but we believe, over the long run, we are well positioned to outcompete incumbent generators...and to continue growing our market share,” SEIA said last month.

UK solar output hits new record as lockdowns cut pollution

Reductions in pollution due to the COVID-19 lockdown helped UK solar production hit record levels on April 20, the UK Solar Trade Association (STA) said.

Solar supply peaked at 9.68 GW at 12:30 local time, surpassing the previous record of 9.55 GW set on May 14, 2019.

“Ideal weather conditions and lower levels of pollution than normal mean solar is providing record levels of cheap, clean power to the grid," STA said.

Across Europe, COVID-19 lockdowns have sliced power demand, increased the share of renewable energy, and depressed prices.

                Impact of COVID-19 on UK power demand (April 14)

                                                         (Click image to enlarge)

Source: UK National Grid ESO

At its peak, solar power supplied almost a third of UK electricity and had helped keep coal-fired power stations offline for 11.5 consecutive days, STA said. This could increase further in the coming days.

"As the lockdown and good weather continues, it is expected that more solar generation records will be broken," it said.

New Energy Update

The COVID-19 crisis has created both supply and demand problems for PV component suppliers.

Lockdowns and travel restrictions have severely disrupted supply chains and delayed new projects, slicing demand outlooks.

Analysis group IHS Markit now predicts annual global PV installations will fall 16% this year to 105 GW, the research group said March 31.

Europe could see a much larger drop, IHS Markit said. Previously, the group had predicted installations in Europe would rise by 5% in 2020 to 24 GW.

       Global annual PV installations by region

                                (Click image to enlarge)

Source: IHS Markit, March 2020

Leading inverter suppliers like Germany’s SMA Solar and Spain’s Power Electronics are adapting their businesses to meet the short and long-term challenges of the COVID-19 crisis.

SMA's inverter orders were strong before the crisis and is maintaining full output capacity. The company still expects to sell 14 to 15 GW of inverters this year, compared with 11.4 GW in 2019, Ulrich Hadding, CFO of SMA, told New Energy Update.

The pandemic will "certainly have an impact on demand over the next three to four months, after which we expect a strong recovery," Hadding said.

Power Electronics, the largest supplier of inverters to US utility-scale projects, is also maintaining its 2020 US outlook, at 12 GW, a similar level to 2019 when early safe harbour orders to meet tax credit deadlines boosted order numbers.

"It’s hard to say how packed Q3 and Q4 will become, or how compacted Q4 will be if we see too many push outs into that quarter...this is uncharted territory for all of us," Ron Puryear, Vice President and General Manager of Power Electronics, said.

"The secret sauce will be whether or not the panels can catch up to the project time lines," Puryear said.

IHS Markit expects a ”limited overspill” of US utility-scale projects to shift from H2 2020 to H1 2021, Cormac Gilligan, an associate director at IHS Markit, said.

Developers and EPCs are likely to safe harbour key components in a similar way to 2019 to fulfil end of year tax credit deadlines, he said.

Securing parts

Component supply remains a challenge for inverter groups and SMA has activated "second source" suppliers in countries and regions that are less affected by COVID-19 restrictions," Hadding said.

Transport capacity limitations have increased costs, he warned.

Grounded passenger flights have severely curbed air freight options while sea freight container capacity is also limited, Hadding said.

The company is working closely with suppliers to find solutions, he said.

"Typically, air freight costs negatively impact gross margins in the low single digits in gross margins terms," Miguel De Jesus, a solar market analyst at IHS Markit, told New Energy Update.

Power Electronics sources components from Europe, where most countries have been locked down for weeks.

For now, Power Electronics is running its US factory in Arizona at full capacity, Puryear said.

The US division holds a large inventory of components and is well-placed "to weather the storm, but not if things remain locked down for another month or two," he said.

Spain and Italy have seen the greatest number of factory closures and most European countries are starting to ease restrictions as death tolls soften. On April 13, the Spanish government allowed manufacturing and construction to restart after a two-week ban of all non-essential work.

"We seem to be in good shape with our current suppliers keeping up," Puryear said.

Full output

Along with common measures such as face masks, SMA has adapted production processes to protect employees and maintain 100% production capacity.

Using flexible working arrangements, SMA is able to adjust production at short notice and fulfil customer orders, Hadding said.

"Our production has been highly flexible even before the crisis...we are working with temporary workers, etc," he said.

"Even in Europe...many PV inverter manufacturers have been able to maintain manufacturing levels with limited to no disruption due to their businesses being associated with critical businesses such as energy," De Jesus said.

To minimize the financial impact, SMA has taken advantage of liquidity protection measures introduced by various countries, including measures that delay tax and social security payments, Hadding said.

"Those measures will be upheld as long as legally feasible," he said.

Price impact

Experts predict the ongoing COVID-19 crisis will lead to slower falls in inverter prices than seen in previous years.

"As PV inverter prices are already at low levels, IHS Markit forecasts price declines of 10% year on year...in some years historically, price reductions have exceeded 20%," Gilligan said.

"The planned decline of our sales prices might soften a bit, for specific products in certain countries we might even see price increases," Hadding said.

The inverter market has seen significant consolidation in recent years. Suppliers such as Advanced Energy, Satcon, Bonfiglioli and Bosch have exited the market while Siemens and Fimer have both acquired inverter businesses.

Hadding predicts further consolidation in the inverter supply chain in the coming years.

"It will become more difficult to keep up a smooth supply chain. Supply security will get a higher priority compared to low prices," he noted.

"Given the rapid reduction of demand in certain markets globally, it is expected that some consolidation will occur and suppliers will consider numerous options such as divestment, mergers or full exit," Gilligan said.

Survival strategy

For the wider PV sector, the swamping effect of the COVID-19 pandemic risks demoting the importance of the global climate challenge.

The increasing competitiveness of solar power plants will help companies tackle the long-term challenges and green deals between governments and the private sector could help accelerate the wider recovery.

Despite the current challenges, SMA is maintaining its 2020 financial outlook of a sales increase of 1.0 to 1.1 billion euros ($1.1-$1.2 billion) and EBITDA increase of 50 to 80 million euros. Going forward, the company is implementing additional measures to improve the flexibility and cost effectiveness of its operations, Hadding said.

As the renewable energy market grows, diversification will be key to ensure business stability.

"We see good growth potential over the coming years for SMA in the field of digital energy solutions, but also storage system technology, and services such as operations and maintenance (O&M) for utility-scale PV power plants," he said.

For Power Electronics, key growth markets include energy storage and electric vehicles.

"Our move into the electric vehicle business has been a good one, we have big long term plans here," Puryear said.

New Energy Update 

PV price drop set to continue as cells improve

PV prices will continue to fall based on historic learning rates of over 23% in the coming years, due to improvements in wafer and cell performance, advances in bifacial cells and improved layouts, according to the latest annual Photovoltaic Roadmap (ITRPV), published by German engineering industry group VDMA.

This implies selling prices will fall by over 23% for every doubling in cumulative PV shipments.

The ITRPV summarizes over 100 parameters along the crystalline silicon (c-Si) PV value chain, using insights from 57 leading international PV component suppliers.

Monocrystalline silicon (mono-Si) wafers will represent 75% of the market in 2020 and this share will grow in the coming years, the report said.

By 2030, multi-crystalline silicon (mc-Si) wafers will represent only 5% of the market, it said.

Wafer sizes will continue to rise and efficiencies of PERC p-type mono-Si modules are forecast to rise from 203 W/m² in 2020 to 225 W/m² in 2030, the report said. N-type cell concepts could be 5 W/m² higher, it said.

Heterojunction technology (HJT) modules will achieve area efficiencies of 210 W/m² in 2020 and will outperform other c-Si module types to reach close to 240 W/m² within 10 years, it said.

Trina Solar's new large module certified at 516 W

Trina Solar's new 500 W module has been certified by German independent testing group TUV Rheinland at a power output of 516 W and 600 W models are on the horizon, the Chinese group announced April 24.

Trina started commercial production of its new "Vertex" large module on March 18 and shipped its first order on March 27, the company said.

“With the development and improvement of the industry chain, especially the improvement in glass supply capacity, adding another column of cells to the existing five-column layout design can increase the Vertex module’s power output to more than 600W," Yin Rongfang, Vice General Manager and EVP at Trina Solar said in a statement.

Rising PERC+ cell conversion efficiency combined with optimized module design and installation will drive further increases in power output, Rongfang said.

"This provides the direction and path for the iterative development of PV modules, which will further drive the continuous decrease in the balance of system (BoS) and levelized cost of energy (LCOE) of PV systems,” he said.

Global inverter shipments rise 18% in 2019

Global PV inverter shipments grew by 18% in 2019 as US developers safe-harbored inverters to meet tax credit deadlines and replacement activity climbed, Wood Mackenzie said in a new report.

The top five inverter vendors-- Huawei, Sungrow, SMA, Power Electronics and Fimer-- retained around 56% of the global inverter market, Wood Mackenzie said. The top 10 suppliers retained a market share of around 76%, it said.

                                   Global inverter shipments in 2019

                                                               (Click image to enlarge)

Source: Wood Mackenzie

The COVID-19 outbreak has severely disrupted solar supply chains and delayed new projects. Analysis group IHS Markit now predicts annual global PV installations will fall 16% this year to 105 GW, the research group said March 31.

Amid COVID-19 lockdowns, inverter suppliers have been working hard to maximize output.

SMA's inverter orders were strong before the crisis and is maintaining full output capacity, Ulrich Hadding, CFO of SMA, told New Energy Update last month.

The company still expects to sell 14 to 15 GW of inverters this year, compared with 11.4 GW in 2019, Hadding said.

The pandemic will "certainly have an impact on demand over the next three to four months, after which we expect a strong recovery," Hadding said.

Power Electronics, the largest supplier of inverters to US utility-scale projects, is also maintaining its 2020 US outlook, at 12 GW, a similar level to 2019 when early safe-harbor orders to meet tax credit deadlines boosted order numbers.

Reduced transport and supply chain options are increasing inverter costs and this will lead to slower falls in prices than seen in previous years, suppliers warn.

"As PV inverter prices are already at low levels, IHS Markit forecasts price declines of 10% year on year...in some years historically, price reductions have exceeded 20%," Cormac Gilligan, an associate director at IHS Markit, said.

"The planned decline of our sales prices might soften a bit, for specific products in certain countries we might even see price increases," Hadding said.

New Energy Update

COVID-19 restrictions are impacting short and long-term strategies of wind and solar developers.

In Europe and US, factory closures have cut demand and short-term power prices. Supply chain disruptions have delayed project schedules and increased costs.

The pandemic is also delaying the signing of long-term power purchase agreements [PPAs] critical for most large-scale renewable energy projects.

PPA demand was surging before the crisis but business closures and the looming global downturn is impacting credit ratings and lower power demand has created uncertainty over future wholesale prices.

      UK spot power prices in 2020 versus historic

                                (Click image to enlarge)

Source: NordPool

Amid the uncertainty, companies are postponing PPA decisions or negotiating for better terms, Paolo Ghezzo, Head of Renewables Independent Engineering at consultants RINA, told New Energy Update.

Prices must be high enough to mitigate offtaker risks and many developers may wait for prices to recover more towards pre-COVID-19 levels, Martin Scharrer, Head of Legal (Energy & Investments) at German solar and wind power investor Encavis, said.

“Projects are not as attractive as they need to be for investors, especially purely financial investors,” Scharrer said.

"It might take some time until we are back to the prices before Corona," he warned.

Group effort

The economic fallout of COVID-19 will impact the creditworthiness of offtakers large and small. Risks will differ between country and sector.

Large corporates with strong balance sheets led early growth in renewable energy PPAs, but falling wind and solar costs have enticed a wider range of smaller, riskier offtakers into the market.

In 2018, 75 companies entered into corporate renewable energy PPAs in the US, compared with 31 in 2017, according to the Rocky Mountain Institute's Business Renewables Center (BRC).

Increasing use of layered PPA structures which aggregate demand from a number of offtakers could help mitigate risks, Daria Nochevnik, Principal Advisor at ECS Consulting, said.

Layered PPA structures allow smaller firms to buy power from larger projects, or spread risk across a range of different renewable assets, Nochevnik, also a communication lead at the European Federation of Energy Traders (EFET), said.

Many smaller firms seek shorter PPA contracts and this has spurred the layering of multiple contract tenors, requiring an in-depth understanding of regional power trends. The spread between PPA and wholesale prices varies between country, depending on market-specific factors such as liquidity and national regulation.

Utility squeeze

The credit risk of utilities—major buyers of renewable energy-- is also under pressure, Uday Varadarajan, Principal, Electricity at Rocky Mountain Institute (RMI), told New Energy Update.

The impact on the utility depends on the regulatory regime it operates in and its exposure to COVID-hit companies, Varadarajan said.

“If the regulatory regime includes measures to decouple the volume of consumption from total collections in a timely fashion, then the utility’s revenues are likely to be resilient to this crisis in the near term - and the counterparty risk is likely to be minimal”, he said.

If a prolonged downturn prevents customers from paying their bills, liquidity becomes an issue, Varadarajan said.

“This could be a concern for utilities like Pacific Gas & Electric (PG&E), already reeling from recent events”, he said.

PG&E filed for Chapter 11 bankruptcy protection in January 2019 after several deadly wildfires left it with billions of dollars of potential liabilities.

The Californian utility is offtaker for Berkshire Hathaway's 550 MW Topaz PV plant in San Luis Obispo County. On April 22, Fitch Ratings affirmed senior notes for the facility at "C," a very high level of credit risk, due to its exposure to PG&E.

"Material changes in revenue and cost profile are occurring across the power sector in the U.S. and likely to worsen in the coming weeks and months as economic activity suffers and government restrictions are maintained or expanded," Fitch warned.

Tighter contracts

The COVID-19 crisis will bring greater scrutiny of PPA contracts, particularly in the negotiation of force majeure clauses, Scharrer said.

Companies may look to extend the period for which counterparties under force majeure are unable to terminate the contract, typically set at around 180 days, Scharrer said. Contracts may also include greater detail on risks from health and safety issues, he said.

Legal mechanisms of force majeure claims will become more prominent, while pandemic insurance options may also be introduced, Nochevnik said.

More standardization of contract terms across the industry should help mitigate risks and speed up negotiations.

Last year, EFET launched a new standard corporate power purchase agreement (CPPA) which includes terms on force majeure, change of law and termination due to non-delivery or insolvency.

Long view

The long-term impact of COVID-19 on PPA demand and prices will depend on the length and breadth of the economic fallout.

Forward power markets in Europe indicate prices could return to levels seen before the pandemic in two to three years, Guy Brindley, Senior Analyst at industry group WindEurope, told New Energy Update.

If short-term prices remain low, some developers may still sign PPA contracts, confident they will still make long-term savings, Brindley said. Other project owners with adequate equity financing may take on merchant risk for two or three years then negotiate PPA contracts, he said.

Countries keen to stimulate new build activity could reintroduce short-term support measures such as feed in tariffs, Scharrer said.

"It could be useful in my opinion to get the economy bouncing back quicker...plus the countries still have to fulfil their targets for renewable energies in [their] climate action plans,” he said.

Green engine

Despite the wider economic crisis, the fundamentals behind long-term PPA growth remain strong, experts said.

Falling technology costs and sustained low cost of finance have propelled renewable energy growth and these trends will continue going forward, Oyvind Breivik, head of energy communications at aluminium group Norsk Hydro, a major buyer of renewable power, said.

“Now, we are seeing even lower interest rates, and many believe this will last for a long time,” he noted.

Based on cost, PPA activity could swing in favour of solar in the coming years, Wood Mackenzie Power and Renewables said in a report published in 2019.

Falling solar costs, battery storage synergies, and favorable solar resource profiles could see U.S. corporate demand for solar soar past wind from 2021, the research group said.

                   US corporate demand for wind, solar (aggressive forecast)

                                                          (Click image to enlarge)

Wood Mackenzie report 'Analysis of commercial and industrial [C&I] wind energy demand in the U.S,' August 2019.

Rising renewable energy targets at both a national and corporate level will continue to spur activity.

Amid the pandemic, the European Commission and European Council have reaffirmed their commitment to carbon neutrality by 2050 and pending EU-level Green Deal legislation will help support growth, Nochevnik said.

“PPAs and corporate PPAs in particular will remain a key instrument for facilitating the uptake of renewable energy in Europe in a cost-effective way," she said.

Reporting by Neil Ford

Editing by Robin Sayles

COVID-19 cuts 65,000 US solar jobs, cancels 50,000 new roles

The US solar industry has cut 65,000 jobs due to COVID-19 and cancelled the creation of around 50,000 positions, the US Solar Energy Industry Association (SEIA) said in a statement May 18.

By June, the solar workforce is expected to fall to 188,000 personnel, dragging the industry back to 2014 levels, SEIA said.

Before the crisis, US solar employment was forecast to rise to 302,000 jobs this year as new installations soared to record levels, SEIA said. The Solar Foundation was less bullish, predicting job numbers would rise by 7.8% this year to 269,500 in a pre-COVID-19 census.

Since the outbreak, worker restrictions and supply chain issues have delayed solar construction and slowed new investments.

Some 3 GW of US solar capacity is now expected to be installed in Q2, 37% lower than forecast before the pandemic, SEIA said May 18.

Since COVID-19, Wood Mackenzie Power & Renewables has reduced its 2020 US solar market outlook by 18%, from 19.6 GW to 16.0 GW.

Solar, wind and hydro industry groups have called on Congress to extend tax credit deadlines for renewable energy projects to prevent further job losses.

“Thousands of solar workers are being laid off each week, but with swift action from Congress, we know that solar can be a crucial part of our economic recovery,” Abigail Ross Hopper, president and CEO of SEIA, said in a statement.

Private equity group buys SunPower O&M business

Canadian private equity group Clairvest has acquired SunPower's solar operations and maintenance (O&M) business, Clairvest said May 14.

The new O&M company has been renamed NovaSource and Clairvest will support the O&M team in a management buyout, the company said.

NovaSource provides O&M services to 3 GW of commercial and utility-scale assets across nine countries.

“NovaSource can capitalize on our industry’s tail winds and the expected growth of installed solar assets over the next ten to fifteen years," Jack Bennett, CEO of NovaSource, said in a statement.

Pre-COVID-19, annual global solar O&M spending was forecast to double to $9.4 billion by 2024, as installed capacity grows, Wood Mackenzie Power and Renewables said in a report published in October 2019.

Annual solar installations were forecast to rise to 120 GW-125 GW in the early 2020s, driven by growth in emerging markets, WoodMac said in July 2019.

By 2022, some 19 countries were forecast to install between 1 and 5 GW of solar power per year, compared with just seven countries in 2018, WoodMac said. New growth markets include Saudi Arabia, France and Taiwan, it said.

            Forecast solar markets by annual installations (Pre-COVID-19)

Source: Wood Mackenzie Power and Renewables, July 2019.

In 2018, SunPower sold 4.7 GW of utility-scale solar projects to Clearway Energy Group, a subsidiary of Global Infrastructure Partners (GIP).

Last November, SunPower announced it would split its business into a SunPower services company and a separate panel manufacturer, renamed Maxeon Solar. On May 15, China's Tianjin Zhonghuan Semiconductor Co. received Chinese regulatory approval to invest $298 million in Maxeon Solar.

"Today's [Maxeon] announcement puts us one step closer toward creating two independent, pure play, publicly-traded companies," Tom Werner, president and CEO of SunPower said.

"Our planned transaction will allow for each company to focus on their core strengths in their respective markets around the world," he said.

Giant Nevada solar-storage project wins federal approval

Quinbrook Infrastructure Partners has received full federal approval for its groundbreaking 690 MW Gemini solar plus storage project in Nevada, the company announced May 11.

The U.S. Department of Interior has approved the $1.1 billion project, following a favorable Final Environmental Impact Statement (FEIS) in December, Quinbrook said.

“This final decision officially clears the pathway for Quinbrook, and our development partners at Arevia, to accelerate completion of detailed project designs and procurement plans for one of the world’s largest renewables projects," David Scaysbrook, Co-Founder and Managing Partner of Quinbrook, said.

Following the approval, Quinbrook launched a new company called Primergy to manage the Gemini project and develop or acquire further PV and storage projects across North America.

Located 33 miles north east of Las Vegas, the Gemini plant will include a 380 MW AC battery storage system, providing 2,125 MWh of storage capacity, proposal documents show.

Nevada utility NV Energy has agreed to purchase the entire capacity of the project under a 25-year power purchase agreement (PPA). The storage will be used to supply power in the early evening peak demand period.

NV Energy has also agreed to purchase power from the Arrow Canyon and Southern Bighorn solar plus storage projects, currently being developed by EDF Renewables North America and 8minute Energy, respectively.

US to double renewables plus storage plants by 2023

The number of US solar and wind assets co-located with batteries will double from 53 in 2019 to 109 by 2023, according to the US Energy Information Administration's latest inventory of power plants.

The number of renewables plus storage plants has tripled since 2016. Texas currently hosts almost half of this capacity and Nevada will soon rival Texas as giant projects such as Quinbrook's Gemini solar plant come online.

                          Top 10 US states for renewables plus storage 

                                                               (Click image to enlarge)

Source: U.S. Energy Information Administration (EIA), Preliminary Monthly Electric Generator Inventory

Renewables developers are building larger projects to benefit from economies of scale. The average renewable capacity at new coupled facilities is forecast to hike from 34 MW in 2019 to 75 MW by 2023 while average battery capacity will soar from 5 MW to 36 MW, EIA said.

The storage of excess energy is the most common application for co-located batteries but the majority of facilities serve more than one function, EIA noted. Frequency regulation, system peak shaving and backup power are also common applications.

New Energy Update

As solar and wind operators battle through COVID-19 restrictions, lower wholesale prices have raised concerns over future revenue streams.

In Europe and US, factory closures have cut power demand, lowered prices and increased the share of renewable energy. The signing of long-term power purchase agreements (PPAs) has slowed as the looming downturn creates uncertainty over future demand.

Higher renewable energy shares during COVID-19 have raised fresh concerns over future "price cannibalization." Wholesale power prices were already soft as growing solar and wind capacity lowers marginal generation costs. As renewables penetration grows and subsidies expire, this will impact all solar and wind projects.

   Spot power prices in Central Western Europe in Q4 2019

                                 (Click image to enlarge)

Source: European Commission's Quarterly Electricity Market Report. Data source: S&P Global Platts

On Easter Sunday, strong UK solar and wind output combined with a nationwide lockdown to push daytime intraday prices between 11:00 a.m. and 6:30 p.m. below night-time prices, Tim Dixon, Wholesale Team Leader at Cornwall Insight, said in a research note. Across Europe, negative prices and curtailments have become more frequent during the lockdowns.

"The trends observed over the weekend are perhaps a sign of things to come as we move into a world with greater levels of embedded and intermittent sources of generation," Dixon said.

"It is likely that many of these trends will be exacerbated...causing greater cannibalization and volatility in wholesale power prices," he said.

Many operators are now preparing for these risks by developing storage solutions or offering a wider range of grid services. As solar and wind capacity continues to grow, new support mechanisms may also be required.

Contract cover

Despite the current challenges, many developers remain bullish on solar and wind growth as technology gains and economies of scale bring further cost reductions. Large-scale projects are now being developed subsidy-free, typically combining PPAs with some merchant market exposure.

In Europe, the spread between PPA and wholesale prices varies between country, depending on market-specific factors such as liquidity and national regulation. As PPA liquidity grows, prices should converge towards wholesale market levels.

                                        Levelized cost of wind, solar

                                                             (Click image to enlarge)

Source: Lazard consultancy's Levelized Cost of Energy Analysis, Version 13.0 (November 2019)

Lightsource BP's solar construction pipeline remains "very strong" and the group continues to receive interest from financial investors, Adele Ara, Director of Asset Management at the UK-based developer, told New Energy Update.

Lightsource develops solar assets in Europe, North America and Asia. In Europe, the group has developed over 1.3 GW of capacity and invested $3.4 billion since 2011. The company also provides O&M services to over 2 GW of projects.

Lightsource's assets have remained "resilient" during the COVID-19 price slump due to a mix of PPAs and subsidies, Ara said.

The group’s portfolio consists of grid-connected projects supported by feed in tariffs or PPAs, and long-term behind-the-meter contracts with industrial or commercial users.

The PPAs for the grid-connected projects vary in length and are as short as 12 months for some older subsidized solar projects, Zosia Riesner, Director of Power Markets, Europe at Lightsource BP, told New Energy Update.

Smaller offtakers typically seek shorter PPA contracts and many developers of larger projects are aggregating multiple offtakers or layering multiple contract tenors to secure sales.

Lightsource's long-term behind-the-meter PPAs have some volume exposure to industrial or commercial demand, Riesner said.

"Among our customers we have factories and large energy intensive sites. During COVID-19, for some sites there has been a shutdown period where demand has reduced and that has had a volume impact, meaning either more electricity has been exported to grid or that solar farm’s output has been curtailed," she said.

The COVID-19 crisis will bring greater scrutiny of new PPA contracts, particularly in the negotiation of force majeure clauses which allow termination of contract. More standardization of contract terms across the industry should help mitigate risks and speed up negotiations.

Stacking revenues

The current demand crunch has increased the prevalence of negative prices during times of high solar and wind output, highlighting the renewables disruption underway.

As battery costs fall, operators see energy storage as a key way of reducing these price risks.

          European installed utility-scale battery capacity by country

                                                          (Click image to enlarge)

Source: European Commission's Quarterly Electricity Market Report (Q4 2019).

An increasing number of wind and solar developers are co-locating storage technologies. The number of US solar and wind assets co-located with batteries will double from 53 in 2019 to 109 by 2023, according to the US Energy Information Administration's latest inventory of power plants.

Solar developers are increasingly looking to shift peak supply to times of higher prices. Wind operators like ScottishPower are also building energy storage facilities to mitigate wind intermittency.

"Increased volatility and greater price differentials between periods of low and high demand will produce arbitrage opportunities, something that will be welcomed by storage operators and flexible generation," Dixon said in his note.

Grid services such as reactive power and frequency response offer additional revenues, provided appropriate regulation is implemented.

Reactive power maintains grid voltage levels to allow greater energy transport along existing networks, while fast frequency response helps maintain grid active power requirements.

In solar plants, operators can use inverters to adjust voltage to provide reactive power services.

In November, Lightsource became the first UK solar operator to provide reactive power services at night.

The trial was performed at Lightsource's 4 MW St Francis solar plant in East Sussex and forms part of the 'Power Potential' reactive power initiative led by National Grid ESO and UK Power Networks. The network operators plan to create a reactive power market for distributed energy that will increase capacity in the south-east by 4 GW.

"This innovative trial, which forms part of our Power Potential project, is an exciting first step," Biljana Stojkovska, project lead at National Grid ESO, said in a statement.

"We look forward to seeing it progress over the coming months as we explore new reactive power markets for distributed energy resources," Stojkovska said.

Green future

Over the long term, the overarching need to reduce carbon emissions will drive growth in solar and wind.

Amid the pandemic, the European Commission and European Council have reaffirmed their commitment to carbon neutrality by 2050 and pending EU-level Green Deal legislation will support renewables growth. Over the long term, the electrification of transport and heating sectors will apply upward pressure to power prices.

Commercial PPAs will continue to underpin solar and wind investments but if prices fall too low across crucial production hours, governments may need to re-impose support mechanisms.

EU members will likely require "revenue stabilization" measures like the UK's contract for difference (CFD) model to meet carbon reduction targets, Alessandro Boschi, Head of Renewable Energy at the European Investment Bank (EIB), told S&P Global Market Intelligence April 23.

The COVID-19 crisis could accelerate moves towards such measures as EU states look to avoid project defaults, Boschi said.

A surge of defaults would "deter investment...you don't want that to happen," he said.

Reporting by Beatrice Bedeschi

Editing by Robin Sayles

Global PV costs fall by 13% as module pressure continues

The global average levelized cost of energy (LCOE) of new solar plants fell by 13% in 2019 to $68/MWh, the International Renewable Energy Agency (IRENA) said in its latest annual Renewable Power Generation Cost report.

The average installed cost of utility-scale PV fell by 18% last year to $995/kW, the agency said.

The cost of mainstream module technology fell by 14% in 2019 to $0.27/W. Prices in December 2019 ranged from $0.21/W for low-cost modules to $0.38/W for all-black modules, it said.

PV prices will continue to fall at learning rates of over 23% in the coming years, due to improvements in wafer and cell performance, advances in bifacial cells and improved layouts, according to the latest annual Photovoltaic Roadmap (ITRPV), published by German engineering industry group VDMA last month. This implies selling prices will fall by over 23% for every doubling in cumulative PV shipments.

Data for bifacial modules has become available as more developers opt for this technology, IRENA said.

Bifacial module costs were 56% higher than mainstream mono facial modules in 2019 and 18% higher than the most expensive options, it said.

  PV module prices by technology, supplier country

                                (Click image to enlarge)

Source: IRENA's 'Renewable Power Generation Costs 2019' report.

In recent months, bifacial module costs per Watt have been "within a close range of the higher performing monofacial options," IRENA said.

"This may support expectations of increased bifacial technology adoption in the market, given its potential for increased yield per Watt, compared to monofacial technologies," it said.

Bifacial systems are lowest cost option at over 93% of sites: study

Single-axis tracker bifacial plants are the lowest-cost option for 93.1% of global solar sites on a levelized basis, according to a new study by the Solar Energy Research Institute of Singapore (SERIS), published in the journal 'Joule.'

The researchers estimated the irradiance on both side of modules for different system designs. Performance calculations were validated against actual field data and extrapolated over a 25-year lifetime.

Single-axis tracker bifacial systems can increase energy yield by 35% and reduce the levelized cost of energy (LCOE) by 16% compared with conventional monofacial systems, the study said.

"Although dual-axis tracker installations achieved the highest energy production, due to their current high costs, they only reached the lowest LCOE values for locations very close to the poles," it said.

A regional sensitivity analysis showed that factors such as weather and local cost parameters can favor non-bifacial single-axis designs, the researchers noted.

For example, land cost and shading risks were not covered in the study.

US PV life expectancy rises to 32.5 years

The average life expectancy of US utility-scale PV projects rose to 32.5 years in 2019, according to a survey of project developers and consultants by the Lawrence Berkeley National Laboratory (Berkeley Lab).

Module manufacturers now typically offer warranties of 25 or 30 years. Many plant owners expect lifespans over 35 years, while very few anticipate lifespans below 30 years, the survey showed.

Life expectations also outstrip long-term power purchase agreements (PPAs), extending the "merchant tail" period exposed to power price risks, Berkeley Lab noted.

                                       Current life expectation of US PV plants

Source: Survey by Berkeley Lab, December 2019

Estimated lifetime operational expenditure (opex) was $17,000/MW/year in 2019, compared with $35,000/MW/yr in 2007, the survey showed. The latest opex estimates range between $13,000 and $25,000/MW/yr.

Operations and maintenance (O&M) costs have fallen significantly in recent years and were estimated at between $5,000 and $8,000/MW/yr in 2019, the laboratory said.

India's Adani wins world's largest solar build program

India has awarded Adani Green Energy Limited (AGEL) 8 GW of new solar projects, the world's largest ever solar development award, AGEL said in a statement June 9.

The projects will require $6 billion of investments and will be built over a period of five years. AGEL has also committed to build 2 GW of new solar cell and module manufacturing capacity in India by 2022, the company said.

The Adani group has launched a major clean energy investment drive and the new projects will double AGEL's renewable energy capacity. The group aims to install 25 GW of renewable power capacity by 2025 and become the world's largest solar power company.

In February, French oil major Total acquired a 50% stake in AGEL's solar business for around $500 million.

Total and Adani Green Energy Limited (AGEL) would create a 50/50 joint venture into which AGEL will transfer its solar assets, consisting of 2.1 GW of operational capacity and 475 MW of capacity under development, the French group said.

India aims to increase its installed renewable energy capacity from 81 GW in 2019 to 225 GW by 2022, which includes 50 GW of large-scale hydroelectric capacity.

New Energy Update 

A flurry of new desert solar projects is set to accelerate learnings in bifacial module technology.

In April, Saudi Arabia's ACWA Power signed an eye-wateringly low tariff of $17.0/MWh for a 900 MW solar plant in Dubai and said it would use bifacial panels and trackers. The $570 million project will increase the capacity of the Mohammed bin Rashid Al Maktoum Solar Park to 2.9 GW.

The 800 MW Al Kharsaah project in Qatar, the kingdom's first large-scale solar plant, will feature 2 million bifacial panels with trackers. The $500 million project is 60% owned by Qatar group Siraj and 40% owned by French oil group total and Japanese conglomerate Marubeni. The technology for Abu Dhabi's record-breaking 2 GW Al Dhafra Solar PV project, signed at a record-low tariff of $13.5/MWh, is yet to be confirmed. The development consortium reportedly includes Jinko Solar, a manufacturer of bifacial and monofacial technology.

In the US, Nevada’s ground-breaking 690 MW Gemini solar-plus-storage project will also reportedly use bifacial modules. Last month, project owner Quinbrook Infrastructure Partners received full federal approval for the project.

Early performance data shows that bifacial modules can offer double-digit performance gains over monofacial designs, depending on site conditions and plant layout.

In desert environments, bifacial panels can increase power output by as much as 35% when using special ground treatments that improve ground reflectance (albedo), Rajit Nanda, Chief Investment Officer at ACWA Power, told New Energy Update. ACWA Power develops projects across the Middle East, North Africa, Southern Africa and Southeast Asia.

Normal ground albedo in desert condition ranges between 30% and 45% and ground treatment using materials such as white sand, limestone or man-made materials, can increase this to 75%-80%, Nanda said.

Until now, investor confidence in bifacial modules has been curbed by a lack of operational data. This should soon change, as the large projects built in the Middle East and US provide a swathe of technology and modeling insights.

No downside

Ground reflectance is a crucial driver of bifacial performance, making the US and the Middle East key growth markets.

The US installed its first wave of large-scale bifacial projects last year. By 2025, around 30% of new U.S. utility-scale projects will use bifacial systems, according to the US National Renewable Energy Laboratory (NREL). By 2028, bifacial cells could represent 40% of the global solar market, according to the International Technology Roadmap for Photovoltaic (ITRPV).

Cedric Andre Broussillou, Research Director at the Qatar Environment and Energy Research Institute (QEERI), is more bullish.

“I estimate bifacial technology will go well above 50% of the global utility-scale market in the next few years,” he said.

                          Forecast bifacial solar installations by region

                                                              (Click image to enlarge)

Source: Wood Mackenzie, September 2019

Early investments by European banks, including those by the European Bank for Reconstruction and Development in Egypt's Benban solar park, have helped to "de-risk the technology,” Broussillou said.

“They limited the risk by using conservative assumptions for the bifacial gain and accepted some additional cost to demonstrate that the technology can be trusted at large scale," he said.

From a construction and operation perspective, there is no downside to using bifacial panels, Nanda said.

“This is the same module with a back side which produces gain in generation...These modules are abundantly available and have the same level of redundancy in spares," he said.

Material gains

Proven long-term reliability of bifacial panels will be key to reducing investment risk.

While there is currently a limited track record for bifacial performance, the materials used, such as the glass used to replace plastic back sheets, are intrinsically as reliable as those on operational monofacial plants, Broussillou said.

Advances in PV cell design are also creating a wider range of bifacial supply options.

"All new cell technologies which are being developed (PERC+, PERT, TOPCon, HJT) can include a bifacial design with the grid pattern on the front and back thus making those cells compatible with a bifacial module packaging," he said.

Bifacial forecasts

Improvements in bifacial modelling accuracy will also help to increase investor confidence, Veronica Bermudez Benito, Senior Research Director, Energy at QEERI, said.

QEERI is developing solar forecasting models based on multi-variate machine learning methods.

“The next step is to integrate this solar forecast capability into PV production forecasting integrating the specificities of the different PV technologies,” Bermudez said.

Forecasting is particularly important for the latest giant projects that have signed record low tariffs.

“You really need to optimize your predictions to keep the estimation errors low, as a way to optimize your return on investment,” Bermudez said.

Reporting by Ed Pearcey

Editing by Robin Sayles

Rapid growth in solar installations and intense price competition is presenting new challenges for fleet operators.

Utility-scale installations are forecast to hit a record level of 12.6 GW in 2020, the U.S. Solar Energy Industry Association (SEIA) and Wood Mackenzie Power and Renewables (WoodMac) said in its latest quarterly market report.

Some 8.7 GW of utility-scale PV is currently under construction and an additional 29 GW of projects are scheduled to come online in the next several years, the report said.

                      US PV installation forecast

                                     (Click image to enlarge)

Source: Wood Mackenzie Power and Renewables, September 2019

As fleet sizes grow, operators are expanding operations and maintenance (O&M) divisions and investing in the latest technology to maximize efficiency. Many are offering third-party O&M services to gain a share of the growing O&M market. Annual global solar O&M spending will double from around $4.5 billion in 2019 to $9.4 billion in 2024 as installed capacity grows, according to WoodMac.

SPower, the U.S.' largest privately-owned solar operator, has grown from eight employees in 2012, to 228 employees in 2019, including 98 operations staff. SPower currently operates 1.7 GW of capacity at 156 sites across 12 states.

The training and integration of new staff is a key challenge to growth, requiring significant resources, Randy Corey, Chief Operating Officer, sPower told the conference in San Diego on November 6. A surge in solar installations has led to a shortage in qualified construction and operations staff, Corey said.

"We have brought on 80 plus employees in the last nine months-- that's a challenge," he said.

Spower estimates the "hidden cost" to integrate an employee into company processes at between $50,000 to $150,000, not including wages and equipment, Corey said.

"That's not wages, that not equipment, that's people interacting. It's people [gaining] trust in what somebody else does," he said.

Expanding fleet sizes bring about greater monitoring and reporting requirements and operators must manage these alongside an expanding range of plant technologies.

To meet these challenges, operators like sPower and Southern Power are implementing the latest software and hardware solutions to minimize labor costs and gain economies of scale.

In-house O&M

Spower has built up its own in-house O&M expertise to gain more control over costs.

In-house O&M requires significant investments but these are justified by the returns, Corey said.

Spower estimates it costs between $60,000 and $80,000 to train and equip an O&M technician, not including wages.

Advantages of in-house O&M include greater control of cost, timing and documentation, Corey said. By incorporating these duties, sPower has increased coverage hours, uptime and power production, he said.

Larger O&M divisions also create opportunities for scalable technology solutions, such as data analytics, to improve predictive and preventative maintenance strategies.

Automated systems

Capacity growth brings about significant asset management challenges.

SPower has in place over 170 offtake and interconnection agreements for sites covering 1,300 land parcels, resulting in much higher compliance requirements than expected, Corey told attendees.

"In our company there are over 50,000 compliance items that we are contractually obligated to report on. Over 4,000 a month," he said.

Automated plant monitoring and reporting can significantly reduce labor costs.

Spower has integrated its monitoring and work order management systems into a central system used by all employees, Corey said.

"That brings an efficiency to the organization that you would not believe," he said.

In one example, automated monthly invoicing for revenue reduced errors and delays and saved around 1,400 to 1,800 man hours per year. This represents a saving of over $150,000 per year, based on a median wage with burden of $75/hour, Corey said.

"The system is paid for- as you get bigger, you need these things to get to the other side," he said.

Inventory pools

Larger portfolios increase spare parts challenges, requiring larger and more diverse inventories.

Rapid technology advances and solar market consolidation have also raised spares availability risks. Solar O&M companies are investing in centralized spare parts facilities and shared spare parts networks to minimize delivery delays.

SPower operates in a spare parts cooperative, giving it access to around $4.7 million of spare parts, Corey said.

"We share inventory- it's expensive. As companies, that has to happen more and more," he said.

Fleet analysis

Following a surge in solar development in the last five to 10 years, Southern Power has been reviewing the performance of its fleet, Lindsey Tibbs, Solar Operations Project Manager, Southern Power, told the conference.

Southern operates 28 PV facilities for a total capacity of 2.8 GW and over the last year the company has been analyzing ways to improve O&M efficiency.

Fleet analysis represents a huge task. Together, these solar facilities incorporate 20.5 million modules, 1,500 inverters, 1,200 MV transformers, 157,000 trackers and 22,000 combiner boxes.

Operators can supplement field checks with a combination of data analytics, aerial and hand-held IR scans and degradation studies to identify generic issues as well as site-specific faults, Tibbs said.

Drone aerial scans allow operators to identify whether faults are occurring at module level or string level, or due to other issues.

Operators such as Southern, Invenergy, Duke Energy and Enel Green Power are deploying drones and advanced imaging technologies at solar sites to detect faults and cut inspection times. Some are deploying machine learning technologies to provide automated maintenance insights.

"Aerial scans are moving to the forefront," Tibbs said.

"The price seems to be dropping on them enough that they are starting to supplement maintenance practices in a way that is really economic," she said.

                               US solar O&M costs by category (2018)

Source: National Renewable Energy Laboratory.

Handheld infrared scans can also reduce unplanned outages.

"We recently did this at a facility in Texas and found that we had three issues we needed to handle that day," Tibbs said. "We needed to take that equipment off-line...we were really able to prevent something more serious."

To analyze degradation, Southern Power is using a combination of inverter-level DC health studies and aerial scans, Tibbs said.

"We are looking to take both of those and compare them," she said.

Southern has been working with research groups such as the Electric Power Research Institute (EPRI) and the National Renewable Energy Laboratory (NREL) to establish how to action on the results.

Southern is now combining its solar learnings with experience in conventional generation to develop more sophisticated predictive and preventative maintenance strategies for solar plants, Tibbs told attendees.

The company is prioritizing models that provide the "greatest dollar value" to operations, focusing on performance metrics for inverters, transformers, trackers and combiner boxes, she said.

Corey and Tibbs both highlighted the need to share data and learnings to increase the competitiveness of the solar industry.

"The value of that data to the industry is absolutely phenomenal," Corey said.

"It's ok to share. That's what we've tried to do better," Tibbs said. "Hopefully as we share...we'll get better at it."

New Energy Update

PV installs to bounce back in 2021 as economic aid kicks in 

Global solar installations are set to recover sharply in 2021, climbing 33.8% year-on-year to 149.9 GW following a boost from COVID-19 stimulus packages, industry group SolarPower Europe said in its latest annual Global Market Outlook (GMO).

Following COVID-19 lockdowns, SolarPower Europe has cut its forecast for 2020 from 144 GW, to 112 GW. Rooftop PV installations have been particularly affected, due to a lack of access to buildings and revised spending plans of households and business owners in the economic downturn, it noted.

Economic aid will help solar installations rebound in 2021 and reach a parity with pre-COVID estimates by 2022, when 168.5 GW of new capacity is forecast, the report said.

             Forecast global solar installations

                                  (Click image to enlarge)

Source: SolarPower Europe's 2020 Global Market Outlook (GMO).

State support packages include the European Union's 750 billion-euro ($847.3 billion) Next Generation EU plan, which will supplement a new European Green Deal, and Japan's $1 billion support package for corporate renewable power purchase agreements (PPAs).

"Now, governments have the opportunity to accelerate the energy transition and realize the structural benefits renewables can bring regarding economic development and job creation," SolarPower Europe said.

"With the right policies they can enable low-cost solar to reach its full potential and lead the energy transition," it said.

US solar installs set to rise by a third despite COVID

US solar installations are forecast to rise 33% in 2020 to 18 GW as strong demand for utility-scale projects outweighs the impact of COVID-19 lockdowns, according to the latest quarterly market report by the Solar Energy Industry Association (SEIA) and Wood Mackenzie. Prior to the crisis, the groups had forecast almost 20 GW of installations this year.

Some 14.4 GW of utility-scale projects are now forecast to be installed in 2020, the report said.

"Record utility-scale procurement totals in 2019 and Q1 2020 positioned the segment for a record year, even as large-scale projects face some construction delays and challenges in financing and developing early-stage projects," it said.

Installations of distributed solar projects are expected to drop by 31% in 2020 due to lockdown restrictions and lower investment appetite during the recession. By 2021, distributed solar activity will recover close to 2019 levels, the report said.

The US solar market is now forecast to install 113 GW of capacity in the period 2020-2025, down by 3.6 GW compared with pre-COVID predictions, it said.

                             Forecast US solar installations by segment

                                                                (Click image to enlarge)

Source: Wood Mackenzie, SEIA (June 2020)

Wood Mackenzie clips long-term O&M growth forecast 

Annual global spending on solar operations and maintenance (O&M) is forecast to hit $9.4 billion by 2025, a year later than forecast in October 2019, Wood Mackenzie said in a new report. Despite short-term COVID-19 challenges, total O&M spending will continue to rise as installed capacity grows and ageing plants require component replacement or repowering.

Some $4.1 billion of the spending will be in the Asia-Pacific (APAC) region, while $3.5 billion will be spent on projects in Europe Middle East and Africa (EMEA) and $1.8 billion in the Americas, the report said.

In Europe, inverter repowering will be a key driver of spending, Wood Mackenzie said. Inverters are typically replaced after around 10 years, sometimes earlier.

"More than 16 GW of systems are currently over ten years old. By 2025, that number will grow to 100 GW," it said.

Intense competition between O&M suppliers prompted further market consolidation in 2019. The top 15 O&M suppliers increased their global market share from 51% to 54%, Wood Mackenzie said. Of the 12 markets examined in the report, only Germany, the UK, the US and France showed no consolidation last year.

In Spain, the share of the O&M market held by the top five players soared from 9% in 2018 to 71% last year, it said.

New Energy Update

A recent survey by the Lawrence Berkeley National Laboratory (Berkeley Lab) showed that the average life expectancy of US utility-scale PV projects rose to 32.5 years in 2019, compared with 21.5 years in 2007.

Module manufacturers now typically offer warranties of 25 or 30 years. Many plant owners expect lifespans over 35 years, while very few anticipate lifespans below 30 years, the survey showed.

The longer estimates come despite little operational data on long-term performance of PV plant components, particularly on newer models.

“The utility-scale solar market is really only ten years old," Joachim Seel, Senior Scientific Engineering Associate at Berkeley Lab, told New Energy Update.

"While cutting-edge module technology is stress-tested to estimate design life we don't have empirical data on how they actually perform after 30 years in the field,” he said.

Sharp falls in component and maintenance costs in recent years could impact these lifespan estimates, experts told New Energy Update. To manage these risks, operators are opting for shorter component warranties and taking greater control over maintenance and product testing.

Cost erosion

PV costs are continuing to fall as suppliers improve cell performance and plant layouts. The global average cost of mainstream module technology fell by 14% in 2019 to $0.27/W, the International Renewable Energy Agency (IRENA) said in its latest annual Renewable Power Generation Cost report. In the US, solar power purchase agreement (PPA) prices fell by 4.7% last year to an average of $27.40/MWh in Q4 2019, market platform provider LevelTen said. Operations and maintenance (O&M) costs have also fallen significantly in recent years and were estimated at between $5,000 and $8,000/MW/yr in 2019, the Berkeley Lab found.

                     PV module prices by technology, supplier country

                                                           (Click image to enlarge)

Source: IRENA's 'Renewable Power Generation Costs 2019' report.

PV components such as cells could last for as much as 50 years, but the drive for lower costs and lightweight designs could significantly shorten lifespans, Robin Hirschl, Technical Director at Danish renewable energy investor Obton, told New Energy Update.

Module suppliers have reduced the thickness of glass on the backsheet, which could affect robustness. Thinner module frames are also used, reducing mechanical stability, while connection boxes "use less material and hence possibly less protection," Hirschl said.

Glass and frame thickness are now fairly standardized and sometimes offer insufficient support for larger module profiles, Bryan Banke, Director of Asset Management at Adapture Renewables, said.

"They twist and undulate in high winds creating micro-cracks and stress fractures in the thin conductor busses and solder," he said.

Many operators will opt for major component overhauls as panel efficiency advances and other components succumb to weather conditions and electrical loads, Banke said.

“The models will be reworked and projects refinanced to pay for repowering and to reflect contemporary energy rates,” he said. "Most likely, future repowering will include storage to fundamentally change the way these systems deliver energy."

Factory faith

General improvements in manufacturing processes have driven longer lifespan assumptions, more than specific component gains, Jenya Meydbray, CEO at PV Evolution Labs (PVEL), told New Energy Update.

Increased automation in high-volume manufacturing has helped control quality, he said.

Growing learnings on joint degradation have also increased testing capabilities, Meydbray said.

"Over the past twenty years, the industry has amassed a large body of data about the reliability of solder joints and encapsulants in the field and how to accelerate this in a controlled laboratory environment," he said.

Pile corrosion must be managed to achieve longer lifespans. Piles typically only last around 20 to 25 years, depending on factors such as the corrosivity of the soil, the thickness of the pile and physical loading, Meydbray said.

Operators can extend lifespans by assessing corrosion levels and adding new piles to provide further strength. Another solution is using cathodic protection to passive electricity through the piles and reduce corrosivity.

"That’s thought to be more expensive at this time,” Meydbray noted.

Inverter swaps

Inverters typically represent 5 to 10% of project costs and are expected to be replaced at least once over the lifetime of the plant.

                              US solar O&M costs by category (2018)

Source: National Renewable Energy Laboratory (NREL).

On PV plants with 40 year term financial models, Adapture has inverter replacement reserves that "start funding in year 10 with expected use in year 20," Banke said.

Despite strong price pressure, inverter reliability has improved. New inverter designs can boost performance and provide additional reliability and maintenance benefits. In some cases, operators may choose to switch from large central inverters to string inverter systems.

“In reality, for central inverters, we will replace parts for each individual inverter until we no longer can,” Banke said.

Warranty risk

Panel and inverter suppliers have extended warranty lifespans but many operators are choosing shorter terms.

Warranties are useful for detecting manufacturing defects in the first few years of operations, but longer wear and tear issues may not be covered, Banke said.

“It’s more cost efficient to replace modules on your own dime than to jump through warranty hoops," he said.

Fears over supplier longevity also deter some operators from signing long-term warranties, particularly for inverters. Stockpiling of major components helps reduce spare parts risks if the supplier exits the market.

“That’s why we put such importance on accelerated lifetime testing," Jon Previtali, Director of Technology & Technical Service at Wells Fargo Renewable Energy & Environmental Finance (REEF), said.

"And other quality assurance/quality control methods like factory inspection and production oversight.”

Reporting by Neil Ford

Editing by Robin Sayles

Oil group Galp to buy 2.9 GW of Spanish PV projects

Portuguese oil and gas group Galp Energia has agreed to buy stakes in 2.9 GW of Spanish PV capacity, in operation or under development, from ACS Group, Galp announced January 22.

Valued at 2.2 billion-euro ($2.4 billion), the portfolio includes 900 MW of operational capacity and 2 GW of projects scheduled to be built by 2023, and will make Galp one of the largest solar operators in Spain.

The deal is expected to be closed in the second quarter of 2020, at which time Galp will make a payment of 450 million euros and assume 430 million euros of project finance liabilities for operational plants.

Galp plans to allocate 40% of investment in businesses that help to reduce carbon emissions. The group plans to finance the new solar plants through project finance and will look for partnership opportunities.

Falling solar technology costs and growing offtaker demand have reignited Spain's solar market. Spain was the largest solar market in Europe last year and is forecast to install 3.5-4 GW/year of new capacity in the next five years, according to industry group SolarPower Europe.

In December, power utility Iberdrola completed the construction of its 500 MW Nunez de Balboa solar plant in south-west Spain, Europe's largest solar facility, within a year.

Iberdrola plans to invest 8 billion euros in 3 GW of Spanish renewable energy projects, mostly solar PV, in 2018-2022.

US set to install 13.5 GW utility-scale PV in 2020, smashing records

The U.S. is forecast to install 13.5 GW of utility-scale solar photovoltaic (PV) capacity in 2020, surpassing previous records and representing 32% of new power additions, according to the U.S. Energy Information Administration's (EIA) latest inventory of power generation projects.

The EIA's prediction is slightly higher than the 12.6 GW forecast by the Solar Energy Industry Association (SEIA) and Wood Mackenzie late last year. The previous record was 8 GW in 2016.

Wind installations will soar to 18.5 GW this year, also smashing records, EIA said. Wind will account for 44% of total new capacity additions, it said.

More than half of the new PV capacity will be in four states, EIA said. Texas is set to host 22% of new capacity in 2020, followed by California (15%), Florida (11%), and South Carolina (10%).

                       US planned power capacity additions in 2020

                                                            (Click image to enlarge)

Source: U.S. Energy Information Administration (EIA), January 2020

EIA predicts 9.3 GW of new gas-fired capacity will be brought online in 2020, while 11 GW of conventional power capacity will be shut down. Some 5.8 GW of coal-fired capacity will be closed, as well as 3.7 GW of gas-fired capacity and 1.6 GW of nuclear capacity.

                Forecast change in power generation by fuel in 2020

                                                           (Click image to enlarge)

Source: U.S. Energy Information Administration (EIA), Short-Term Energy Outlook, January 2020

EIA expects strong levels of solar and wind additions to continue into 2021. In addition, natural gas fuel costs will increase next year and gas-fired generation will drop by 2.3%, it said.

The U.S. contracted PV pipeline swelled to a record 38 GW in 2019 as falling costs spurred demand from utilities and corporate customers.

U.S. corporate demand for solar power is forecast to storm past wind power demand in 2021 and rise to ten times the demand for wind by 2024, Wood Mackenzie said in a report published in August.

The U.S. Midwest is set to be a key growth area for the solar industry in the coming years.

In the Midwest MISO, SPP, and PJM markets, some 6.6 GW of solar projects are “either under construction or in the latest stages of planning and likely to be completed through 2023," Fitch said in a research note in October. Around 79 GW of projects are in various stages of development in the region, it said.

Qatar signs PV price below $16/MWh on its first major project

The Qatar General Electricity and Water Corporation (KAHRAMAA) has signed a solar power purchase agreement (PPA) for the 800 MW Al-Kharsaah Solar PV Power Plant at a price of 5.71 Dhs/kWh ($15.7/MWh), one of the lowest ever recorded, KAHRAMAA said January 19.

The QAR 1.7 billion ($471 million) Al-Kharsaah project represents the first large-scale PV project in Qatar, following a competitive tender held in 2019.

The project will be 60%-owned by Siraj Energy, a joint venture of Qatar Petroleum (QP) and Qatar Electricity and Water Company (QEWC). Japan’s Marubeni Corporation and France’s Total Solar International will hold a 40% share.

The Al-Kharsaah plant will be brought online in phases, with the first 350 MW online by the first quarter of 2021 and the remaining capacity completed by the first quarter of 2022.

Heavily reliant on LNG imports, Qatar is looking to diversify away from fossil fuels. The capacity of the Al-Kharsaah plant will be equivalent to 10% of Qatar's peak electricity demand.

Qatar has already helped to advance global research in PV technology. The Qatar Environment and Energy Research Institute (QEERI) has performed pioneering research into module cleaning strategies, and more recently, bifacial module technologies.

Testing in Qatar's dry and desert -like conditions has generated learnings that that can be applied in multiple global markets.

QEERI has built significant datasets on key metrics such as PV electrical performance and temperature, irradiation, ground reflectance (albedo) and meteorological conditions.

Current research includes the impact of soiling on the rear side of bifacial modules, an area where industry knowledge is limited.

New Energy Update 

In November, the U.S. Department of Energy (DOE) selected four cyber security projects in its latest $128 million funding round for advanced solar research.

The funding comes as increasing connectivity and grid efficiency goals present operators with new cyber security challenges.

In March, solar power operator sPower suffered a series of intermittent denial-of-service attacks which caused its Cisco-supplied firewalls to collapse. The breach reportedly allowed data requests to flood the system, overload the network, and affect some 500 MW of operational solar capacity.

In a filing to the DOE, sPower logged the breach as a cyber event that "causes interruptions of electrical systems operations" and "could potentially impact electric power system adequacy." SPower began patching outdated devices and updating software, but a vulnerability had been revealed.

For some time, security experts have warned about a more sustained attack aimed at switching off large portions of the electricity grid.

In 2018, the U.S. Department of Homeland Security (DHS) said Russian hackers had gained access to the control rooms of U.S. electric utilities by first penetrating the networks of suppliers who had trusted relationships with the power companies.

In September 2017, cyber security firm Symantec said it believed a sophisticated cyber espionage group known as Dragonfly was behind a wave of cyber attacks on European and U.S. power generation companies. Power blackouts in Ukraine in December 2015 and 2016 were also blamed on electricity grid cyber attacks.

Vulnerability assessments and tighter employee access remain key to improving security at solar plants, but technological solutions are also on the horizon.

U.S. research teams are developing cutting-edge inverter software and hardware that can detect and mitigate the specific risks posed by solar plant infrastructure.

Detecting threats

Specific attributes of solar plants make them particularly vulnerable to cyber attack. Tests have shown that the hacking of inverter devices could compromise grid stability, prompting suppliers to update their technology.

“The primary risk is that the inverters or the grid-interconnect controller are compromised,” Alan Mantooth, Distinguished Professor and research leader of Electrical Engineering at the University of Arkansas, said. The university is leading a 'Multilevel Cybersecurity for Photovoltaic Systems,' research project, which aims to improve cybersecurity at inverter and system level.

Backed by $3.5 million of DOE funding and $1.1 million cost share, the University of Arkansas researchers aim to develop an inverter to address supply-chain security and real-time intrusions.

"The inverter would have detection and mitigation protocols built in, as a defense mechanism," Mantooth said.

The team will develop machine-learning algorithms that evaluate security at the inverter and system level.

Even the hardware architecture is being modified to work with these new algorithms, providing a "fail-safe" type of mode, Mantooth said.

"So, if someone were to penetrate the cyber security barriers, there are hardware measures in place that will stop anything really bad from happening," he said.

Once certified as fully grid compliant, the new inverter will be installed in an operational solar farm, in parallel to the existing inverter.

The team will then test the new inverter by trying to penetrate the system.

"That’s a massive undertaking, as this an active solar farm, providing real power to the grid," Mantooth said.

The DOE is also funding research in autonomous inverter controls that improve grid resilience, led by the University of Central Florida, and a project by the Texas A&M Engineering Experiment Station to develop a cyber security system based on the concept of ‘watermarking’, namely pushing a test signal into a grid in order to authenticate security measures.

Innovations in blockchain technology will also help improve cybersecurity, Mantooth noted.

Blockchain’s information transparency and decentralized nature makes it a useful cyber security weapon, as all members can record and view any data encrypted onto their block, helping to maintain data integrity, and offering wrongdoers no “hackable” entry point.

Cyber walls

At the start of this year, new U.S. federal regulation came into force requiring operators of plants over 75 MW to implement and maintain a properly configured firewall.

Approved by Federal Energy Regulatory Commission (FERC) in 2018, the Critical Infrastructure Protection (CIP) Reliability Standard requires solar generators to have their cyber security policies approved every 15 calendar months by an appointed CIP manager.

The regulation should help operators address security breaches, electronic access controls, physical security controls, incident responses, recovery plans, and employee training. However, firewalls can still be breached and companies must prepare accordingly, Jon Franzino, Director of Grid Security at Grid Subject Matter Experts (GridSME), said.

Misconfiguration of cyber security systems remains a key risk in the solar sector, Franzino said. Most control centre staff are not network security experts, he noted.

Operators should also restrict access to systems to only those who need it, as many users often do not require the level of access they have been given, Franzino said.

"It’s the simple stuff we need to do," he said.

Defense costs

Cyber security packages will slightly increase upfront costs for solar projects, but should not change the underlying architecture of the system, Mantooth said.

During operations, staff must be educated on how to respond to detection signals, and know when to allow autonomous solutions to handle the problem, he said.

Operators must place sufficient importance on cyber security implementation and management, as they are typically focused on maximizing uptime, Franzino said.

Since the SPower incident, owners are starting to view cyber security as another area of business risk management, Franzino said.

Cyber security risks should be treated as a “business problem, not a technical problem,” he said.

By Ed Pearcey 

US Midwest solar prices fall 4% in Q4 2019 while wind prices firm

U.S. solar power purchase agreement (PPA) prices fell by 0.9% in Q4 2019 to an average $27.40/MWh, driven by a sharp fall in prices in the Midwest MISO market area, market platform provider LevelTen said in its latest quarterly PPA price index. Over the whole year, solar PPA prices fell by 4.7% while wind prices rose by 6.6%, it said.

Solar prices fell in four of the five main U.S. market areas in Q4, led by a 4.3% decline in the MISO region to an average price of $29.96/MWh, LevelTen said. At the same time, wind prices in MISO remained stable at $27/MWh after a $4/MWh rise in the previous quarter.

"The corporate market for MISO solar [virtual] PPAs has lagged other regions in the past, but this price decline illuminates a narrowing gap," it said.

Midwest solar activity is booming as developers leverage falling technology costs and rising renewable energy commitments. In the coming years, bifacial panels, batteries and economies of scale will challenge the dominance of wind developers in the region.

Solar prices in California's CAISO market and the central SPP and Texas ERCOT networks fell by around 1% last quarter while in the north-east PJM market area, prices rose by 2.6%, to $35/MWh, LevelTen said.

"It is unknown whether recent regulatory uncertainty in the PJM capacity market surrounding Minimum Offer Price Rules has had an effect on corporate PPA pricing, but this will be a dynamic worth monitoring in the coming months," LevelTen said.

                       US average day-ahead power prices in 2018-19

                                                             (Click image to enlarge)

Source: U.S. Energy Information Administration (EIA).

Some 40% of U.S. market participants predicted solar prices would fall further in 2020, while 40% predicted prices will remain relatively stable, LevelTen said. In contrast, 60% of industry participants predicted wind prices would remain around the same level this year, while 25% predicted prices would increase.

Copenhagen fund invests in 400 MW subsidy-free project in Canada

Copenhagen Infrastructure Partners (CIP) has agreed to fund the development and construction of Greengate Power Corporation's 400 MW Travers solar project in Alberta, Canada, without subsidies, the companies announced February 3.

Located in Vulcan County, Alberta, the C$500 million ($375.8 million) Travers project will be Canada's largest solar facility. Construction is expected to start in mid-2020 and the plant is expected to be online by the end of 2021.

Under the deal, CIP will provide funding for the development, construction and operation of the plant. Greengate will retain an ownership share and provide management services throughout the life of the project.

While Travers will be developed without subsidies, the plant will receive compensation under new Alberta's Technology Innovation and Emissions Reduction (TIER) scheme. In place since January, the TIER is funded through investments made by large emitters to meet tightening carbon reduction requirements.

Alberta plans to phase out coal-fired power generation by 2030, opening up significant opportunity for renewable energy development. Coal-fired generation currently supplies around 50% of the state's electricity, while almost 40% comes from natural gas plants.

Greengate had thus far developed around 1 GW of renewable energy projects in Canada.

CIP has around 8 billion euros ($8.8 billion) of energy infrastructure assets under management, located across North America, Western Europe and Asia Pacific.

Total partners with solar-hungry Adani group

French oil major Total has acquired a 50% stake in the solar business of Indian conglomerate Adani Group for around $500 million, Total announced February 6.

Total and Adani Green Energy Limited (AGEL) will create a 50/50 joint venture into which AGEL will transfer its solar assets, consisting of 2.1 GW of operational capacity and 475 MW of capacity under development. The acquisition will increase Total's global installed renewable energy capacity to around 4 GW.

Currently valued at around $15 billion, the Adani group has launched a major clean energy investment drive. The group aims to become the world's largest solar power company by 2025 and the largest renewable energy company by 2030.

India aims to increase its installed renewable energy capacity from 81 GW in 2019 to 225 GW by 2022, which includes 50 GW of large-scale hydroelectric capacity.

New Energy Update