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)

This chart was updated June 15 to show Wood Mackenzie's 'high adoption' forecast for bifacial panels (September 2019). Strong growth since the forecast means this is a "better representation of the market" than the base case, Wood Mackenzie said.

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

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

Sunrun to buy rooftop competitor Vivint for $1.5 billion

US residential solar installer Sunrun is to buy competitor Vivint Solar for around $1.5 billion, the companies announced July 6. The new company will have a combined enterprise value of $9.2 billion.

"This transaction will increase our scale and grow our energy services network," Lynn Jurich, CEO of Sunrun said.

"Joining forces with Sunrun will allow us to reach a broader set of customers and accelerate the pace of clean energy adoption and grid modernization," David Bywater, Vivint CEO, said.

Sunrun shareholders will hold around 64% of the combined company, with the remainder held by Vivint stockholders. Together, the companies have around 500,000 customers, representing 3 GW of capacity.

    Forecast US solar installations by segment

                                 (Click image to enlarge)

Source: Wood Mackenzie, SEIA (June 2020)

The acquisition will create around $90 million of annual savings, the companies said.

"We see opportunities across the entire cost base, including consolidating and optimizing our branch footprint, reducing redundant spending on technology systems, scaling our proprietary racking technology, as well as improving sourcing capabilities within our supply chains," they said.

Battery products will expand revenue opportunities.

"A larger footprint of solar and battery assets...increases the value of what we bring to our grid services partnerships and strengthens our ability to deliver considerable value in that business," the groups said.

US House committee backs solar, wind in new climate plan

A U.S. House select committee has called on Congress to enact a range of long-term measures to reduce emissions and improve the health of US citizens.

The U.S. House Select Committee on the Climate Crisis called for the US to achieve net zero carbon dioxide emissions by 2050 and to establish interim targets to assess progress. Greenhouse gas emissions must fall to 37% below 2010 levels by 2030 and 88% below 2010 levels by 2050, it said.

Congress must support the "rapid deployment" of solar, wind, energy efficiency and other low carbon measures, as well as new transmission infrastructure, the committee said.

Measures that incentivize domestic manufacturing of clean technology must be implemented, including clean vehicles, it said.

New laws must also be put in place by 2030 to protect at least 30% of all US land and ocean areas, prioritizing areas with high ecological and carbon sequestration value, the committee said.

Limits on fossil fuel extraction must be implemented on onshore and offshore areas, it said.

The committee also called for the launch of new economic sectors such as direct air capture and low carbon building materials.

Further measures are required to protect US citizens from high pollution areas and the effects of climate change, it said.

Macquarie, Enso to build 1 GW of UK solar plus storage

Macquarie’s Green Investment Group (GIG) and renewable energy developer Enso Energy have formed a joint venture to develop 1 GW of unsubsidized solar plus storage capacity in the UK, the companies announced June 29.

"Initial projects are grid secured and are being submitted for planning approval," the partners said. "This includes projects across England and Wales, where the team are currently conducting virtual community consultations."

The coupling of solar and batteries will allow the plants to supply peak demand periods as well as grid services that help mitigate rising solar and wind capacity.

Many of the projects will use the latest bifacial and tracking technology, which should increase efficiency and lower average costs.

GIG and Enso plan to sign corporate power purchase agreements (PPAs) for the projects.

GIG was initially launched by the UK government in 2012 as the Green Investment Bank. Bought by McQuarrie in 2017, GIG has financed 7.5 GW of renewable projects in the UK and has a global development pipeline of 25 GW.

Enso has developed over 1.5 GW of renewable energy projects in the UK.

EDF partners with Octo Energy to develop UK solar plus storage

French electricity giant EDF has partnered with UK renewable energy developer Octo Energy to build 200 MW of solar plus storage capacity in England and Wales, EDF announced June 29.

Octo will seek out opportunities on dual-use sites, such as farmland, the companies said.

EDF is one of the "Big Six" energy suppliers in the UK. The group currently owns 1 GW of UK solar capacity and 1 GW of wind. The group also operates a 49 MW battery, the largest in the UK, at its West Burton gas-fired power station.

EDF's partnership with Octo forms part of the group's plan to build 10 GW of storage capacity in Europe by 2035 and double its renewable energy capacity to 50 GW by 2030.

Last November, EDF bought Pivot Power, a UK-based developer of storage and infrastructure for electric vehicle charging. Pivot plans to install 2 GW of battery capacity directly to the high-voltage transmission system. The first projects are expected online in south-east England in 2020.

Reuters Events

Increasing lifespans for PV plants are placing greater pressure on long-term operations and maintenance (O&M) efficiency.

Longer lifespans allow operators to spread costs over a longer operating period and compete for lower-priced power purchase agreements (PPAs). The average life expectancy of US utility-scale PV projects rose to 32.5 years in 2019, compared with 21.5 years in 2007, according to a recent survey by the Lawrence Berkeley National Laboratory (Berkeley Lab).

Longer lifespans increase project exposure to merchant wholesale prices that are typically lower than PPA contracts.

Average O&M costs have fallen, but costs rise as components age during the merchant tail period. This makes long-term O&M assumptions, including major component replacement, critical to project risk.

Accelerated lifetime testing helps to inform financial models and growing operational data will spur new learnings on replacement costs.

Lenders are particularly keen to minimize uncertainty during the lower price merchant tail period, Bjarne Sonderskov, Head of Technical Operations at Danish renewable energy investor Obton, told Reuters Events.

“Cost of capital is crucial to the investment and that’s also why we look to improve the O&M by predicting failure to any component," he said.

Data grab

Growing O&M learnings and competition between suppliers have reduced prices.

US O&M costs were estimated at between $5,000 and $8,000/MW/yr in 2019, the Berkeley Lab found. In 2018, the National Renewable Energy Laboratory (NREL) pegged O&M costs without inverter replacement at around $9,000-10,000/MW/yr. and prices including inverters at $13,000-14,000/MW/yr.

Global O&M spending is set to soar in the coming years as more capacity comes online. Annual global spending on solar operations and maintenance (O&M) is forecast to double to $9.4 billion by 2025, Wood Mackenzie Power and Renewables said in a recent report.

                                       US solar opex estimates in 2019

                                                                 (Click image to enlarge)

Source: Berkeley Lab's 'Benchmarking Utility-Scale PV Operational Expenses and Project Lifetimes' report (June 2020).

Wind O&M has advanced faster than in the solar sector, spurred by higher maintenance costs. Many large wind operators have deployed predictive and preventative maintenance strategies to avoid major equipment failure and minimize downtime. Wind turbine suppliers have expanded O&M services and digital products to gain a share of the growing O&M market.

Larger solar operators are also implementing plant monitoring and data analytics technologies, looking to maximize economies of scale. Renewables developer Invenergy is developing in-house analytics to support rapid growth in the services sector. Solar operators like Invenergy, Duke Energy and Enel Green Power are deploying drones while some groups are testing automated cleaning technology. Gains from these technologies will increase as data pools grow.

Preventative maintenance will be key to reducing labour costs and gaining a competitive edge, Sonderskov said.

It could be "three or four years" before PV faults can be accurately predicted, he warned.

Many solar operators are still not spending enough on O&M, Hugh Kuhn, Principal at Solar Advisory Services in California, told Reuters Events.

"Assets are simply not being cared for as they should be for a long life,” Kuhn said.

Relatively minor issues such as misalignment of trackers, suboptimal inverter function or faulty module connectors, can add up to unravel the financial model, he said.

Repowering risk

Replacement of major components such as inverters are a critical factor in lifespan modelling.

Rapid technology advances have prompted repowering with higher performance products far earlier than many expected.

“The most challenging aspects of greenfield project development reside in permitting, zoning, interconnection, and land acquisition, so repowering with new equipment can be a shrewder financial choice than developing an entirely new project," Tara Doyle, Chief Commercial Officer at PV Evolution Labs (PVEL), said.

Operators must take into account compatibility of components in repowering cost assumptions. For example, central inverters are now wired to 1,500V, compared with 600V ten years ago.

"15 years from now the inverters will not be anywhere close to being electrically compatible with inverters installed today," Kuhn said.

“The inverter manufacturers need to up their game by offering future-proofing solutions. Certain areas of industry standardization would be super helpful," he said.

As more PV and wind capacity comes online, repowering models must factor in additional technologies, such as energy storage, Kuhn said. PV plus storage facilities can access higher prices in wholesale markets and revenues from grid services.

Storage functionality significantly changes the revenue model, but operators can include this option in contract terms from the outset, he said.

Reporting by Neil Ford

Editing by Robin Sayles
 

Joe Biden pledges to spend $2 trillion on clean energy in first term

US presidential hopeful Joe Biden has set out a $2 trillion spending plan for clean energy and sustainable infrastructure, pledging to install 500 million solar panels and achieve net zero carbon emissions in the power sector by 2035.

The Democratic nominee has pledged to spend the $2 trillion in his first term, far faster than previously proposed.

Biden proposes to reform and extend tax incentives that support clean energy and implement a technology-neutral "Energy Efficiency and Clean Electricity Standard (EECES)" for utilities and grid operators.

Biden's team plans to "dramatically expand" solar and wind energy deployment through community-based and utility-scale systems, including 8 million solar roofs and community solar systems and 60,000 onshore and offshore wind turbines.

Investments will also be channeled into battery storage technology to accelerate deployment in the power sector and for electric vehicles, it said.

    Forecast US solar installations by segment

                                  (Click image to enlarge)

Source: Wood Mackenzie, SEIA (June 2020)

Biden's clean energy initiative incorporates recommendations from a joint task force created by Biden and former contender Bernie Sanders, published on July 8.

The US presidential election is scheduled for November 3.

US court upholds FERC order in win for energy storage

In a major victory for the energy storage sector, a US Court of Appeal has upheld legislation by the Federal Energy Regulatory Commission (FERC) that allows distributed energy storage assets to participate in wholesale markets.

On July 10, the Court of Appeals for the District of Columbia Circuit (D.C. Circuit Court) upheld FERC’s Order No. 841, following appeals from the National Association of Regulatory Utility Commissioners and the American Public Power Association, amongst others, to opt out.

Issued in 2018, FERC Order 841 requires market operators to implement regulation that allows energy storage to participate in wholesale power markets, including real-time and reserve markets.

“This is an enormous step for energy storage, with the affirmation that energy storage connected at the distribution level must have the option to access wholesale markets, allowing homes and businesses to contribute to the resiliency, efficiency, sustainability, and affordability of the grid,” Kelly Speakes-Backman, CEO of the Energy Storage Association (ESA), said in a statement.

“This latest affirmation of Order 841 is especially important as it ensures energy storage can contribute all its values to the grid, regardless of its connection point," Speakes-Backman said. "As our electric system becomes more modernized and distributed, we are seeing the regulatory frameworks at both the wholesale and retail levels adjust to that reality."

The Solar Energy Industry Association (SEIA) also commended the ruling.

"Energy storage is a critical part of our clean energy transformation and will be a key part of solar’s goal to provide 20% of U.S. electricity generation by 2030," Katherine Gensler, vice president of regulatory affairs at the SEIA, said in a statement.

“...Still, we have a long way to go in terms of creating fair and open markets for all generators. We urge FERC to publish a final rule on wholesale market participation for distributed energy resources,” Gensler said.

UK accelerates energy storage permit process

UK government has relaxed planning rules for large-scale battery storage projects in order to accelerate deployment, it said July 14.

The government carved out electricity storage from Nationally Significant Infrastructure Projects (NSIP) regime in England and Wales, allowing developers to apply through faster local planning regimes. The new rules apply for projects of capacity over 50 MW in England and over 350 MW in Wales and exclude pumped hydro projects.

"Removing barriers for energy storage projects, which are discouraging bolder investment decisions in larger battery facilities, could treble the number of batteries serving the electricity grid," the government said in a statement.

“We welcome the decision to make it easier to deploy flexible large-scale energy storage technologies in the UK, which will help to further decarbonize and improve the resilience of our energy system,” Chris Hewett, chief executive of the UK Solar Trade Association (STA) said.

“The next steps in unlocking the potential of energy storage, and maximizing the crucial role it can play in managing growing solar and wind output, are to provide greater access to flexibility markets, including the capacity market, and applying fairer network charging rules,” he said.

The government's move comes amid growing activity in solar plus storage and a rapid expansion in UK offshore wind capacity.

The UK has committed to achieving net zero carbon emissions by 2050 and increasing UK offshore wind capacity from around 10 GW, to 40 GW by 2030.

Capital Dynamics, Tenaska agree 4.8 GW solar deal

Capital Dynamics has entered into a new strategic agreement with developer Tenaska to develop 4.8 GW of solar projects in the Midcontinent Independent System Operator (MISO) and Southeast Reliability Council (SERC) markets, the company announced July 8.

The deal includes 24 solar projects and follows a partnership between the groups in November 2018 for 2 GW of capacity in the MISO market, situated in the states of Michigan, Missouri, Illinois, Wisconsin, Indiana and Minnesota.

The latest deal "represents a large share of solar projects currently in the MISO and SERC interconnection pipelines and further diversifies Capital Dynamics’ growing utility-scale solar power portfolio across seven new states," Capital Dynamics said.

“We are pleased to enter into a new relationship with Tenaska in MISO and SERC, less than two years after our first MISO transaction,” Benoit Allehaut, Managing Director in Capital Dynamics’ Clean Energy Infrastructure business, said.

“The Tenaska team has done an excellent job overseeing a large portfolio of solar projects in attractive markets, and has worked well with our team in the past. We believe it is important to deliver competitive solar projects in regions where customers are switching to renewables,” he said.

Tenaska has developed 10.5 GW of gas and renewable power projects, including two solar projects in Southern California in which Capital Dynamics is an investor.

In October, Spanish group Acciona acquired 3 GW of U.S. PV projects and 1 GW of energy storage capacity being developed by Tenaska.

Acciona will work with Tenaska to complete the projects and plans to bring online eight of the plants, representing 1.5 GW of peak power capacity, by 2023, the company said.

Reuters Events

As solar technology costs fall and land becomes scarce, interest in floating solar plants is growing.

Last month, DNV GL launched a joint industry project (JIP) with 14 companies to develop the first ever best practice guidelines for inland floating solar projects. The consortium includes major energy groups such as France's EDF, Portugal's EDP and Norway's Equinor, as well as specialist floating solar developers from Europe and the US.

Global installed floating solar capacity has hiked from 10 MW in 2015, to 3 GW at the end of 2019, with early activity mainly concentrated in Asia. Growth is spreading and annual installations could rise to over 3 GW by 2022, according to forecasts from Wood Mackenzie.

Floating solar on human-made water bodies could eventually supply 10% of US power generation, the US National Renewable Energy Laboratory (NREL) said in a report last year. The study excluded water bodies used for recreation, fishing, navigation and wildlife conservation.

    US potential floating solar capacity, utility rates

                                (Click image to enlarge)

Source: NREL report 'Floating Photovoltaic Systems: Assessing the Technical Potential' (2019)

Floating solar is most attractive in markets with high renewable energy targets and limited land availability or high land prices, experts told Reuters Events.

“There is also a strong interest by individual utility reservoir owners that wish to generate additional electricity and revenue from an otherwise unused space,” Robert Spencer, software researcher at NREL and co-author of the US floating solar report, said.

Reservoirs are often owned and maintained by public entities, reducing land acquisition costs, while water treatment plants, quarries, mines and agricultural ponds can also be suitable. Hydroelectric facilities can offer grid connections and PV electricity can be stored on pumped storage schemes.

Floating solar presents structural design challenges, but also offers evaporative panel cooling which can increase energy efficiency.

Projects in Asia have shown there is little price difference between floating and land-based solar projects for capacities over 50 MW, Michele Tagliapietra, project manager for DNV GL's JIP, said.

Most projects in Europe and the US have been below 5 MW and the cost of projects of this size in Asia can be up to 15 to 20% higher than land-based projects, he said.

Installed floating capacity remains a fraction of land-based capacity. As a result, developers face investor concerns over cost and reliability, but this should change in the coming years as learnings are rolled out across the industry.

"Floating PV is already in use and also being vetted by technological consultants," Terje Pilskog, EVP Project Development & Project Finance at Scatec Solar, told Reuters Events.

"We believe such concerns can be overcome.”

Local needs

Asia is currently the most active region for floating solar projects, driven by government tenders and supportive feed in tariffs.

China is developing some 700 to 900 MW of capacity per year and other active markets include Japan and South Korea.

Demand is also growing in Europe. Growth will be led by the Netherlands, where large areas of shallow water offer plentiful project opportunities. Netherlands floating solar capacity could reach 1.4 GW by 2024, Wood Mackenzie forecasts.

Earlier this year, BayWa r.e. built Europe's largest floating solar city on 18-hectare lake that covers a sandpit site at Zwolle in central Netherlands. The 27 MW Bomhofsplas plant was installed in just seven weeks and the electricity is being sold directly to local residents via a cooperative. Over the last year, BayWa r.e. has built and sold eight floating solar parks in the Netherlands.

Last year, French group Akuo Energy completed a large floating solar facility on a lake in a former quarry in southern France. The 17 MW O'Mega1 project includes 47,000 solar modules and floating systems developed by Ciel & Terre.

The plant was partly financed through crowdfunding and investment from the local municipality, alongside investment from French bank Natixis.

Strong growth is also expected in the Americas.

Last October, New Jersey developers J&J Solar Power and Solar Renewable Energy and engineering group RETTEW completed the US' largest floating solar project.

The 4 MW project uses Ciel & Terre technology and is located on a pre-treatment water storage pond in Sayreville. The town issued a public RFP in late 2015, offering a power purchase agreement (PPA) to offset power use at the water treatment facility and related facilities.

“We entered into this project knowing that we had limited land available for a solar installation near the water treatment plant," Dan Frankel, Business Administrator of the Town of Sayreville, said in a statement.

“It’s an ideal approach that makes better use of our pre-treatment pond while dramatically reducing energy costs and offsetting the town’s carbon footprint,” he said.

“As North American developers, financiers and insurance entities strengthen their comfort with the advantages of floating solar, we expect to see significant rapid growth in the region that parallels the rest of the world,” Chris Bartle, Business Development Manager at Ciel & Terre USA, said.

Water forces

The best practice guidelines developed by DNV GL and partners will be technology-agnostic and focus on five key areas: site assessment, energy yield, mooring and anchoring, floating structures, and environmental impact and permitting.

As a nascent concept, operational learnings in floating solar remain limited. Developers are continuing to adapt their designs and introduce new concepts, Pilskog said. In one example, floating solar group Ocean Sun incorporated learnings from fish farming in its design.

Developers are focusing on reducing the cost of materials, improving reliability and gaining a greater understanding of the cooling effect, Pilskog said.

Specific challenges for floating solar developers include physical stresses from water and weather conditions and fluctuating cooling effects, he said. This requires design solutions for anchoring and mooring systems, corrosion, dynamic loading and shifting cooling effects.

“Mooring systems to anchor the system in place may range in complexity depending on the level of water level variability and underlying bathymetry [water depth],” Spencer noted.

The module mounting heights for floating solar plants are more restricted than land-based projects and special consideration is required for inverters and medium voltage equipment.

A robust industry-standard racking design is required to accommodate fluctuating water mechanics which puts added load and heat stresses on the system, Spencer said.

As designs evolve, greater focus will be placed on operations and maintenance (O&M) efficiency.

Currently, many floating systems are not optimized for inspection and maintenance and close-up inspections can be difficult, Tagliapietra said.

Floats, PV modules and DC cables are the most commonly replaced components. "In general all components are more challenging to replace than in ground-mounted systems," he said.

These issues will grow in importance as solar owners seek longer plant lifespans to maximize returns.

Reporting by Neil Ford

Editing by Robin Sayles

New US clean energy jobs drop to 3,200 in July

New clean energy jobs fell to 3,200 in July, from 106,000 in June, showing support is needed from Congress to stimulate job recovery, renewable industry groups said in a statement August 12.

Clean energy includes renewable energy, energy efficiency, grid modernization, clean vehicles and fuels. In May, the US Solar Energy Industry Association (SEIA) warned COVID-19 had cut 65,000 solar jobs and cancelled the creation of around 50,000 expected new roles.

Research by BW Research for E2, E4TheFuture, and the American Council on Renewable Energy (ACORE) showed that just one out of every six clean energy jobs lost since March has been recovered.

More than half a million clean energy workers remain jobless, representing 15% of the workforce, the report said. Between 2015 and 2019, clean energy jobs grew 70% faster than the overall economy.

     Forecast US solar installations by segment

                                   (Click image to enlarge)

Source: Wood Mackenzie, SEIA (June 2020)

"As federal Paycheck Protection Program (PPP) funds are exhausted and businesses are forced to close or scale back due to COVID-19’s resurgence, more layoffs could be imminent without congressional action," the industry groups said.

"What is needed most right now is temporary refundability of renewable tax credits so projects can continue to move forward despite an increasingly constrained tax equity market, and a delay in the scheduled phasedown of existing tax credits," Gregory Wetstone, President and CEO of ACORE, said.

First Solar sells O&M division to growing NovaSource group

US module manufacturer First Solar is to sell its North American operations and maintenance (O&M) business to NovaSource, the new O&M subsidiary of Toronto-based private equity firm Clairvest Group, as it shifts to a third-party project development model, First Solar announced in its Q2 results on August 6.

NovaSource was created in May, when Clairvest acquired SunPower's 3 GW O&M business through a management buyout. 

Competition in O&M is intensifying as project owners seek lower costs.

"Further business optimisation would require increased scale, product offerings, capital," First Solar said in its Q2 earnings presentation.

In October, First Solar said it would close its engineering procurement construction (EPC) business to concentrate on its core businesses of module manufacturing and project development.

Under a third-party EPC model, First Solar will "leverage a much broader external ecosystem of knowledge and expertise," Mark Widmar, CEO of First Solar, said.

First Solar's EPC shift comes as intense price competition impacts margins across the sector. Solar projects are also becoming more complex, using innovative layouts and new technologies like energy storage to increase market value.

First Solar recorded net sales of $642 million in the second quarter, some $110 million higher than in Q1, primarily due to the sale of its 128 MW American Kings project in California.

The group maintained its 2020 module production outlook at 5.9 GW and capital spending forecast at $450 to $550 million.

“We remain pleased with our operational performance with strong metrics across the board,” Widmar said.

While First Solar's financial results have not been "materially impacted" by COVID-19, the group will continue to provide limited guidance due to significant uncertainty over the severity and duration of the pandemic, it said.

Vistra gains permit for potential 1.5 GW battery in California

Texan energy group Vistra has been granted a permit to expand its Moss Landing energy storage facility in Monterey, California, to 1.5 GW/6 GWh, S&P Global reported.

Vistra is already building 300 MW of battery capacity at the Moss Landing power plant site and intends to add a further 100 MW by 2021. An expansion to 1.5 GW would make it the largest battery facility in the US.

The Moss Landing site hosts a 1.0 GW operational gas-fired plant and several decommissioned fossil fuel units and offers extensive space for battery development.

Vistra would expand the storage project “should market and economic conditions support it,” Curtis Morgan, CEO of Vistra reportedly told S&P Global.

“With this new permit in place, Vistra is working on the related infrastructure upgrades so that we will be able to move quickly when opportunities to add additional storage capacity arise,” he said.

A spate of large US battery storage projects is due online in the coming years.

In 2019, the number of US solar plus storage projects, either announced or online, rose from 16 to 38, the Lawrence Berkeley National Laboratory (Berkeley Lab) said in a report.

By 2023, the number of US solar and wind assets co-located with batteries will double to 109, the US Energy Information Administration (EIA) said in May.

                          Top 10 US states for renewables plus storage

                                                                (Click image to enlarge)

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

In May, Quinbrook Infrastructure Partners received full federal approval for its groundbreaking 690 MW Gemini solar plus storage project in Nevada.

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.

Reuters Events

Competition over land resources and global climate challenges are driving growing interest in agri-PV, the co-development of land for both solar power and agriculture.

Early movers in agri-PV are developing pilot projects and new technologies that will deepen industry expertise.

GroenLeven, a Dutch subsidiary of solar developer BayWa r.e., is building five pilot agri-PV projects in the Netherlands.

Key challenges for farmers include assessing the impact of the agri-PV project on crop yield and the best crops for the shared environment, Willem de Vries, Project Manager, Large Projects at GroenLeven, told Reuters Events.

GroenLeven will test five different types of crops at the pilot projects that are tolerant to shade: blueberries, red currants, raspberries, strawberries and blackberries.

The projects will use specialised monocrystalline solar panels that offer the plants more light than standard models and more protection from direct sunlight, rain, hail and frost, increasing the crop yield.

The Netherlands has set ambitious carbon reduction objectives and the country holds significant agri-PV potential, de Vries said.

"We have approximately 20,000 hectares of fruit cultivation,” he said. “...if only 50% of that were used in combination with agri-PV, we would be able to realize 8GW of solar power.” This would exceed the 7 GW of total PV capacity installed in the Netherlands to date.

UK rebirth

UK farmers have been key supporters of solar power and agri-PV projects could benefit from revamped support measures. In March, the UK government reopened subsidies for solar and onshore wind projects after a four-year moratorium which has favoured less mature technologies like offshore wind.

From next year, PV and onshore wind projects will once again be able to bid for UK contracts for difference (CfDs), the government said. The move will help the UK achieve its target of net zero carbon by 2050, it said.

                                UK annual solar installations by sector

                                                              (Click image to enlarge)

Source: UK Solar Trade Association (STA), November 2019

Around 70% of UK solar capacity is either owned by farmers or hosted on agricultural land, Jonathan Scurlock, Chief Adviser, Renewable Energy and Climate Change, the UK’s National Farmers' Union (NFU), said.

As farmers generally own or lease land under long-term arrangements, they are well positioned to make long-term investments. Many farmers are yet to install solar projects, offering strong growth potential.

"When we survey our members we find over 30% are using solar," Scurlock said.

Higher yield

Agri-PV systems can protect crops against the extreme weather events becoming more frequent due to climate change, Andreas Steinhueser, systems testing lead at Fraunhofer Institute for Solar Energy Systems ISE, said.

“Through active shading and rainwater harvesting techniques, agri-PV offers additional resilience to food supply chains," Steinhueser said. "Take the current heatwave in Europe – in such conditions it's realistic, even in a country such as Germany, for crop yields to actually increase thanks to agri-PV module shading.”

A 194 kW pilot solar field at a 1 hectare agricultural site in Heggelbach, southern Germany, highlighted the complimentary qualities of solar and agriculture.

Based on potato yield, the project increased land-use efficiency by 160% in 2017 and by 186% in 2018, when temperatures were hotter, according to calculations made by Fraunhofer ISE.

Small footprint

In system design, Agri-PV developers must take into account ecological factors as well as farmers' access needs, Steinhueser said.

“The system needs to be designed using materials that will not impact soil fertility (for example, concrete or treated wood), and support pillars need to be spaced so as not to slow down planting and harvesting operations,” he said.

Agri-PV projects could take advantage of rapid advancements in bifacial modules. Agri-PV panels are usually placed one to two meters off the ground, which means bifacial technology can offer efficiency gains, but this will depend on the type of crop, Steinhueser said.

“For example, it’s arguable that bifacial modules wouldn't profit much from diffuse irradiation when used in orchards, so although we think that bifacial modules hold huge promise in agri-PV, the way forward is likely an intelligent mixture of both bifacial and monofacial," he said.

Cost challenge

The gradual phasing out of solar subsidies creates a challenge for agri-PV developers.

Dutch projects can still benefit from incentives of 88 to 99 euros/MWh, depending on the size of the installation, but agri-PV projects do not currently receive any special support beyond that offered to solar farms.

“At this moment, this is a danger for agri-PV installations, as the capex investments are still higher compared with conventional ground-mounted solar installations," de Vries said. The equipment is more specialised and installation methods, such as the driving of piles, can require greater resources.

Longer term, agri-PV costs should fall as supply chains adapt to growing requests for specialised equipment, de Vries noted.

Growth-hungry developers must establish business models that can be repeated in different markets.

While the Heggelbach plant was small in scale and received research funding, it demonstrated the application of community-based financing.

This type of business model, incorporating funding from local cooperations, authorities or businesses, could be one solution to overcoming the barrier of high upfront costs, Steinhueser said.

Reporting by Ed Pearcey

Editing by Robin Sayles

Portugal solar auction sets record price, secures storage

Spanish company Enerland bid a new record low price of 11.1 euros/MWh ($13.2/MWh) in Portugal's latest solar auction, for a 10 MW project, according to media reports.

Enerland's bid pips the record $13.5/MWh tariff set by the giant 2 GW Al Dhafra project in Abu Dhabi in April and was 24% lower than the lowest price recorded in Portugal's previous auction in June 2019.

Solar technology costs are continuing to fall and the sites allocated in Portugal's tender are located in the south where solar irradiance is high.

South Korean solar manufacturer Hanwha Q Cells won the most capacity in the auction, securing 315 MW of the 700 MW on offer. The other auction winners were Spanish utility Iberdrola, Enel's Spanish subsidiary Endesa, developer Audax and Germany's TAG Energy.

Hanwha, Endesa and Iberdrola included storage in their bids, media reported, and will be paid a fixed premium for dispatch flexibility.

The intense price competition comes amid soaring activity in Spain, Portugal's closest neighbour. Spain is forecast to install around 4 GW of new solar capacity per year for the next five years as developers race to meet auction deadlines and falling costs spur unsubsidised projects.

California to review generation stack after heatwave cuts supply

California's power agencies will review power procurement plans and demand forecasting processes after a mid-August heatwave led to rotating power interruptions across the state.

California grid operator CAISO urged consumers to conserve electricity during afternoon and evening periods. Issues included unplanned stoppages of gas-fired plants, swinging wind resources and a lack of imports from neighbouring states suffering similar temperatures.

California's vast solar fleet is unable to meet power demand after sundown, requiring significant gas-fired generation. California has around 28 GW of installed solar capacity, including 13.4 GW utility-scale, 7.0 GW of wind capacity and 4.2 GW of energy storage capacity, mainly pumped hydro. Peak power load surpassed 46 GW during the heatwave.

           California summer 2020 max on-peak power generation by type

Source: CAISO's Summer Loads and Resources Assessment, May 2020

"Our organizations want to be clear about one factor that did not cause the rotating outage: California's commitment to clean energy," the California Public Utilities Commission (CPUC), CAISO and California Energy Commission (CEC), said in a joint letter to Governor Gavin Newsom on August 19.

"Clean energy and reliable energy are not contradictory goals," they said.

High system demand, unanticipated loss of supply, and low net import availability due to hot temperatures throughout the Western US created "untenable system conditions," the agencies said.

Going forward, state forecasting and planning reserves must better account for the fact that climate change will mean more heat storms and more volatile imports, the groups said.

"Our changing electricity system may need larger reserves," they said.

Last year, the CPUC ordered 3.3 GW of new capacity to come online by 2023 after identifying peak demand is occurring later in the day.

Capital Dynamics, Tenaska to develop 2 GW of storage in California

Capital Dynamics and Tenaska have agreed to jointly develop nine battery storage facilities in California to provide 2 GW of power to the Bay Area, Los Angeles and San Diego.

The projects aim to alleviate power shortages caused by growing renewable energy capacity, heatwaves and other local supply limitations, the companies announced August 19.

Tenaska has developed 10.5 GW of gas and renewable power projects, including two solar projects in Southern California in which Capital Dynamics is an investor.

In July, Capital Dynamics and Tenaska agreed to co-develop 4.8 GW of solar projects in the Midcontinent Independent System Operator (MISO) and Southeast Reliability Council (SERC) markets.

The deal includes 24 solar projects and follows a partnership between the groups in November 2018 for 2 GW of capacity in the MISO market, situated in the states of Michigan, Missouri, Illinois, Wisconsin, Indiana and Minnesota.

The July deal "represents a large share of solar projects currently in the MISO and SERC interconnection pipelines and further diversifies Capital Dynamics’ growing utility-scale solar power portfolio across seven new states," the company said.

                                        US solar penetration by state

                                                                (Click image to enlarge)

Source: US National Renewable Energy Laboratory (NREL), Energy Information Administration (EIA)

Capital dynamics already owns several US battery storage projects. In August 2019, Capital Dynamics acquired the 180 MW solar/90 MW storage Townsite project in Nevada from Skylar Resources. The Townsite project is the first US solar plus storage project to secure fixed volume power purchase agreements (PPAs). Tenaska Power Services will provide energy management services, including sale and purchase of surplus or deficit merchant power and battery scheduling.

In October 2019, Spanish group Acciona acquired 3 GW of US PV projects and 1 GW of energy storage capacity being developed by Tenaska.

Acciona will work with Tenaska to complete the projects and plans to bring online eight of the plants, representing 1.5 GW of peak power capacity, by 2023, the company said.

Reuters Events

Two recent partnerships highlight the growing demand for UK solar plus storage projects.

Macquarie’s Green Investment Group (GIG) has formed a joint venture with renewable energy developer Enso Energy to develop 1 GW of unsubsidized solar plus storage capacity in the UK.

French electricity giant EDF also announced a partnership with UK renewable energy developer Octo Energy to build 200 MW of solar plus storage capacity in England and Wales.

France's largest power supplier, EDF is one of the "Big Six" energy suppliers in the UK. EDF's partnership with Octo is part of the group’s plan to build 10 GW of storage capacity in Europe by 2035 and double its renewable energy capacity to 50 GW by 2030.

Falling technology costs are increasing the competitiveness of solar plus storage projects and many are now being developed without subsidies.

Rising renewable energy capacity and changing consumption patterns are creating opportunities for price arbitrage, by shifting dispatch to times of higher prices, experts told Reuters Events.

Power prices fell as COVID-19 lockdowns sliced demand, but wholesale prices were already under pressure.

“Managing these revenue risks increases the appeal of storage,” Nathan Welch, Managing Director at Octo Energy, said.

   UK day-ahead power prices, by week (GBP/MWh)

                                 (Click image to enlarge)

Source: Nordpool power exchange

Negative prices will become increasingly common as higher volumes of zero marginal cost renewables are connected to the grid, Lauren Moody, Senior Energy Analysis Manager at National Grid ESO, said.

“Energy storage like solar plus [storage] can exploit these price patterns," Moody said.

Solar future

Despite only moderate solar resources in the UK, ongoing technology improvements have made solar plants competitive.

By 2025, large-scale solar will be the lowest-cost energy source, new analysis by the UK government showed this month. Large-scale solar plants are forecast to cost 44 pounds/MWh ($59.0/MWh) on a levelised basis, compared with 46 pounds/MWh for onshore wind, 57 pounds/MWh for offshore wind and 85 pounds/MWh for gas-fired plants, the Department for Business, Energy & Industrial Strategy (BEIS) said.

By 2030, the cost of solar is forecast to drop to 39 pounds/MWh, some 6 pounds/MWh lower than onshore wind and 8 pounds/MWh lower than offshore wind, BEIS said.

                                Forecast UK power generation costs in 2030 

                                                            (Click image to enlarge)

Source: UK government, August 2020

In March, the government reopened subsidies for solar and onshore wind projects after a four-year moratorium which has favoured less mature technologies like offshore wind. From next year, PV and onshore wind projects will once again be able to bid for UK contracts for difference (CfDs) as the government looks to accelerate decarbonisation plans.

Wider corporate demand for renewables is also growing. GIG and Enso plan to sign corporate power purchase agreements (PPAs) for their projects, they said.

Double gains

UK developers are also taking advantage of advancements in bifacial solar panel technology.

Demand for bifacial modules is soaring as developers seek greater plant efficiency. By 2028, bifacial cells could represent 40% of the global solar market, according to the International Technology Roadmap for Photovoltaic (ITRPV).

GIG and Enso Energy will deploy bifacial panels at their projects. Bifacial panels can increase output by several percentage points compared with monofacial panels, at marginal extra cost.

Bifacial panels suit regions with lower solar irradiance and limited land availability, such as the UK, Ed Northam, Senior Managing Director at GIG Europe, told Reuters Events.

The UK’s high population density means that land availability and permitting is a challenge. Procurement of large flat areas next to grid connection points is difficult and many landowners initially expect high lease rates, a legacy of earlier solar subsidies.

EDF and Octo will seek out opportunities on dual-use sites, such as farmland, the partners said in June.

The market for combined agri-PV concepts is growing as competition over land intensifies.

“Our strategy is to identify lower grade agricultural land, which tends to suit livestock farming. Sheep farming, for example, is ideal given the land can continue to be farmed in the same manner,” Welch said.

Many UK farmers are yet to install solar projects, offering strong growth potential.

"When we survey our members we find over 30% are using solar," Jonathan Scurlock, Chief Adviser, Renewable Energy and Climate Change, the UK’s National Farmers' Union (NFU), told Reuters Events last month.

Grid payments

Greater access to the power balancing market and grid services are also improving the economics of solar plus storage, Moody said.

National Grid ESO recently widened access to the balancing mechanism to bring in more distributed solar and wind. The network operator is also working with partners to create a reactive power market for distributed energy that will increase capacity in south-east England by 4 GW. In November 2019, Lightsource BP became the first UK solar operator to provide reactive power services at night. The trial, performed at Lightsource's 4 MW St Francis solar plant in East Sussex, was "an exciting first step," Biljana Stojkovska, project lead at National Grid ESO, said in a statement.

The UK market for ancillary services is still developing and long-term returns are difficult to predict, Northam noted.

Contracts currently typically last between one and four years, he said. Future improvements to the market framework should lead to greater visibility of long-term revenues.

Battery boosters

A rapid expansion of UK offshore wind capacity in the coming years will increase the demand for storage.

UK offshore wind capacity is currently around 10 GW and the government plans to hit 40 GW by 2030, taking advantage of vast sea areas to hit carbon emissions targets. ScottishPower, the first utility to produce 100% of power from renewable sources, plans several battery storage projects to complement its growing offshore wind portfolio.

There is currently over 13 GW of battery storage projects in the pipeline, figures from the UK Solar Trade Association (STA) show, and the government plans to relax planning regulations for large-scale projects.

Demand-side factors will also impact the need for storage and solar plus storage plants in the coming years.

Increasing use of demand management and smart grids will affect load trends, as will the planned rollout of electric cars. The government aims for at least 50% of new cars to be ultra-low emissions by 2030 and plans to ban the sale of new petrol and diesel cars from 2035. These targets could change, however.

"The key in analysing how this will play out is essentially to understand the timing of this fundamental transition,” Welch said.

Last November, EDF bought Pivot Power, a UK-based developer of storage and infrastructure for electric vehicle charging. Pivot plans to install 2 GW of battery capacity directly to the high-voltage transmission system and the first projects are expected online in south-east England this year.

Reporting by Neil Ford

Editing by Robin Sayles

US solar industry calls for resilience as coronavirus hits activity

The global coronavirus pandemic is significantly impacting U.S. solar plant development and will curb the record installation levels expected this year, the U.S. Solar Energy Industry Association (SEIA) said March 17.

“We know anecdotally that the COVID-19 pandemic is affecting delivery schedules and our ability to meet project completion deadlines based partly on new labor shortages," SEIA said in a statement.

"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,” it said.

The latest forecasts before the crisis predicted annual PV installations would soar by 47% in 2020 to almost 20 GW, SEIA and Wood Mackenzie said in a joint report.

This represents an upward revision of around 2 GW from previous forecasts made by the groups in September. 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.

US solar installation forecast before coronavirus pandemic

                                         (Click image to enlarge)

Source: SEIA, Wood Mackenzie

Before the coronavirus crisis, US solar employment was forecast to rise by 7.8% this year to 269,500 jobs due to the surge in new installations, the Solar Foundation said in its National Solar Jobs Census.

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

New York unveils 17 new utility-scale solar projects

Developers NextEra, SunEast Development and Boralex all won multiple solar projects in New York state's latest renewable energy tender while ConnectGen was awarded the largest, the office of Governor Andrew Cuomo announced March 13. New York awarded over 17 utility-scale solar projects for a total capacity of over 1 GW, as well as 200 MW of wind capacity. All the projects will come online in 2021-2024.

The awards represent $1 billion in state investments and bids were 23% lower than an earlier tender in 2017, Cuomo's office said.

The largest solar project awarded was ConnectGen's 270 MW South Ripley solar plus storage facility, which includes 20 MW of energy storage.

NextEra was awarded the 200 MW Garnet Energy Center solar plus storage project, which includes 20 MW of energy storage, and the 180 MW North Side Energy Center project.

Other large projects include the 120 MW Greens Corners project developed by Boralex and an 80 MW project developed by SunEast.

New York has set a target of 70% of electricity from renewable sources by 2030 and net zero carbon emissions from power generation by 2040. The state plans to rapidly expand offshore wind capacity and install 3 GW of energy storage by 2030.

Last year, New York approved the construction of a 316 MW battery storage facility with eight hours of storage capacity in Queens, New York. Located at the Ravenswood Generating Station on Long Island City, the battery will be the largest ever built in New York.

New York must also reform its siting and permitting regulations for solar projects to ensure developers can meet project deadlines, the Solar Energy Industry Association (SEIA) warned said in a statement.

"Without streamlined processes, it could take several years for these projects to come online, delaying payback periods and stymieing market growth. Governor Cuomo has advanced a solid proposal to fast track solar projects, but we need the legislature to get this over the finish line and put these principles into practice," the SEIA said.

UK reopens solar subsidies to hit net zero carbon target

The UK government has reopened subsidies for solar and onshore wind projects after a four-year moratorium which has favored less mature technologies like offshore wind.

From next year, PV and onshore wind projects will once again be able to bid for UK contracts for difference (CfDs), the government said March 2. The move will help the UK achieve its target of net zero carbon by 2050, it said.

"We are aware of a number of projects (mainly solar PV and onshore wind) that have deployed or are planning to deploy on a merchant basis since the last [auction for these technologies] was held," the government said in a consultation document.

"However, there is a risk that if we were to rely on merchant deployment of these technologies alone at this point in time, we may not see the rate and scale of new projects needed in the near-term to support decarbonization of the power sector and meet the net zero commitment at low cost," it said.

According to the government, some of the projects will be able to secure CfDs at strike prices below the average expected wholesale price of electricity, resulting in net pay back to the state.

"Therefore, running an allocation round in 2021 which includes established technologies will help deliver a diverse generation mix at low cost, as well as give a clearer signal of the costs of these technologies, several years on from the previous auction," it said.

Global demand for replacement inverters to hike 40% in 2020

Global demand for replacement inverters is forecast to grow by 40% in 2020 to 8.7 GW following a sharp rise in installed PV capacity and as components age and lower quality units are swapped out, research company IHS Markit said in a report published March 3. Clearly, these forecasts may be revised due to the escalating global coronavirus pandemic.

Europe Middle East and Africa (EMEA) is currently the largest market for replacement inverters, recording 3.4 GW of demand in 2019, IHS Markit said.

Asia will increase its share of the replacement inverter market in the coming years, driven primarily by recent utility-scale growth in China and demand from Japan's residential and commercial solar segments, it said.

In the Americas, demand for replacement inverters is expected to grow at a compound annual growth rate (CAGR) of 130% between 2018 and 2023, primarily due to continuing growth in US installations. By 2023, the Americas will represent 12% of global replacement inverter demand.

US market consolidation has seen some large inverter suppliers exit the market, creating opportunities for smaller suppliers, IHS Markit noted.

While evolving technical regulations and import tariffs could lead to more suppliers exiting the market, the US remains a "highly lucrative" market as asset owners maintain a growing installed base of aging systems, particularly in the utility-scale sector, it said.

New Energy Update

As solar fleets age, operators are increasingly looking to repower their assets to improve competitiveness.

A key focus area for operators is the upgrade of inverters, the primary source of solar plant downtime.

Global demand for replacement inverters is forecast to grow by 40% in 2020 to 8.7 GW, over half of which will be in Europe Middle East and Africa (EMEA), research group IHS Markit said in a new report.

    Europe annual PV installations by country

                               (Click image to enlarge)

Source: European Commission's PV Status Report 2017.

Inverters typically represent 5 to 10% of project costs and new designs can boost performance and provide additional reliability and maintenance benefits. Modern inverters offer improved access, higher voltage, monitoring, and autonomous control functionality. In some cases, operators may choose to switch from large central inverters to string inverter systems.

To minimize upgrade risks, operators must perform a health check of the full solar facility with future components in mind, experts told the conference on March 5.

Other key decision drivers should include parts availability, supplier stability and looming technological advances, the experts said.

Performance focus

UK asset management group Gresham House recently assessed inverter repowering options at four of its oldest PV sites, two of which use central inverters while two use string inverters, John O'Toole, Technical Director at Gresham House, said.

"We are focusing first on the central inverters because they have the biggest impact on downtime," he said.

                              US solar O&M costs by category (2018)

Source: U.S. National Renewable Energy Laboratory (NREL).

At one of the sites, Gresham House chose to replace two 500 kW central inverters with string inverters, largely due to extra cabling requirements for a new central inverter.

"That's probably what we are likely to do on the second site," O'Toole said. "It's a very site-specific question...The approach is slightly different for each due to layout and configuration changes."

Inverter replacements can require additional component upgrades, O'Toole noted.

To replace the central inverter with string inverters, Gresham house had to replace transformers and cabling at the original combiner boxes, he said.

Holistic view

Operators must conduct a comprehensive performance analysis of the solar facility when making repowering decisions, as new components can introduce new sensitivities, Nicola Waters, Managing Director at UK O&M group PSH Operations, told the conference. PSH performed around 45 MW of repowering projects last year.

Other key considerations include electrical configurations, permitting and grid requirements, physical access and requirements of manufacturers down the supply chain, Waters said.

In one example, PSH replaced a 1.25 MWp central inverter that was underperforming due to poor EPC design, with a 2.2 MWp inverter. PSH typically assumes a budget of 60,000-90,000 pounds per MW ($71,000-$107,000/MW) for a central-to-central inverter replacement and this particular project increased the performance ratio (PR) by around 4.1%.

Testing the existing solar field revealed cable faults that hadn't been identified through preventative maintenance, Waters said.

"Doing a full field test before...thinking about the future-- what systems are going to be in there in the future-- is so, so important," she said.

The careful planning of deliveries to avoid unnecessary costs for on-site staff, involvement of the monitoring company in the project and salvaging of unused equipment also aided efficiency, Waters said.

"It's worth trying to salvage any equipment…Think about where else you might be able to use it, can you recycle it, can you upcycle it even, that's becoming more important, especially as more manufacturers are using generic parts," she said.

Future supply

Market consolidation has also been a key driver of inverter decisions as operators favor suppliers with stable outlooks and supply chain access.

"Replacement inverters of old generation inverters may simply not be available anymore," IHS Markit said in its report.

To mitigate these risks, O&M providers are developing specialist in-house inverter expertise and warehousing inventories of spare parts, it said.

At one of its central inverter sites, Gresham House chose to implement optimization add-ons rather than repower, based on stronger inverter performance and the expectation of a stable supply chain for the next five or 10 years, O'Toole said.

"The string inverter sites have a supply chain which can basically maintain the existing fleet of inverters for some time, once that supply chain starts to dry up then I think we will quickly reconsider replacement of those inverters," he said.

Disruptive gains

Operators must also take into account ongoing advances in inverter technology when deciding the timing of repowering.

"Technology is improving very quickly, they are designing new central inverters which can be switched out and the parts can be replaced like you have a string inverter inside the central inverter," Waters said.

"It might be worth in some cases waiting for that technology to come through... If you are not desperate to get that uplift right now," she said.

Operators may also want to use new lease models that manufacturers are set to offer going forward.

These may suit "some cases, where big repowering is on the cards," Waters said.

Robin Sayles

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