Solar PV Market Potential Globally - Tekes

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Jun 17, 2014 - Solar PV Market Potential Globally and in Finland. Christian Breyer ▻ [email protected]. Agenda. ▫ Status and Dynamics of solar PV ...
Solar PV Market Potential Globally and in Finland Christian Breyer Solar Energy in the North – Aurinkoenergia Pohjoisissa Oloissa Helsinki, June 17, 2014

Agenda

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Status and Dynamics of solar PV Diffusion Grid-Parity Vision behind High shares of Renewables in the System Solar PV in the Nordic Summary

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Business model of conv. utilities is collapsing

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Power plant investments in EU (2000 – 2013) Power plant investments in EU in 2000 – 2013 in GW

source: EPIA, 2014

 PV and wind power will become the core pillars of a sustainable power supply  gas fired power plants are the bridging technology towards a 100% RE power supply  investments in gas infrastructure are NO stranded investments (unlike coal and nuclear) 6

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: EPIA, 2014

Global installed PV cap.: cumulated and added

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: EPIA, 2014

Global Installed PV Capacity: Relative

source:

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Werner C., Gerlach A., Breyer Ch., 2013. Analysis and Forecast of Global Installed Photovoltaic Capacity and Identification of Hidden Growth Markets, 28th EU PVSEC, Paris Gerlach A.-K., Breyer Ch., et al., 2011. PV and Wind Power – Complementary Technologies, ISES Solar World Congress, Kassel

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

enormous market growth ahead, since ~50%+ of conventional power capacity base could be supplemented by PV at least (there is NO competition to wind power)

Global Installed PV Capacity: Growth Rates

source:

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Werner C., Gerlach A., Breyer Ch., 2013. Analysis and Forecast of Global Installed Photovoltaic Capacity and Identification of Hidden Growth Markets, 28th EU PVSEC, Paris Gerlach A.-K., Breyer Ch., et al., 2011. PV and Wind Power – Complementary Technologies, ISES Solar World Congress, Kassel

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

enormous market growth ahead, since ~50%+ of conventional power capacity base could be supplemented by PV (there is NO competition to wind power)

Experience Curve: driven by growth and learning cost reduction by x% per each doubling of cumulated historic capacity (PV modules: ~20%, PV systems: ~16%)

100,000.000

current wholesale price range

annual production [MWp]

major inventions 10,000.000

Si solar cell

terrestrial module

roof-top programm

1,000.000 100.000 10.000 1.000

major markets 0.100

off-grid 0.010 0.001 1955

space 1960

1965

on-grid terrestrial

1970

1975

1980

1985

roof-top 1990

1995

2000

power plant 2005

2010

year

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: Breyer Ch., et al., 2011. Research and Development Investments in PV – A limiting Factor for a fast PV Diffusion?, 25th EU PVSEC/ WCPEC-5, Valencia 2010, September 6–10 ; Breyer Ch., et al., 2013. Global current and historic photovoltaic research and development investments from the public and private sector, Energy Policy, 62, 1570-1580

Solar PV: long-term Capex projection

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source: ISE, 2014 Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Solar Resource and current and projected cost Moderate region LCOE2014: 90 – 140 €/MWh LCOE2020: 80 – 110 €/MWh LCOE2030: 65 – 85 €/MWh LCOE2050: 50 – 60 €/MWh

Sunny regions LCOE2014: 50 – 80 €/MWh LCOE2020: 40 – 60 €/MWh LCOE2030: 30 – 50 €/MWh LCOE2050: 25 – 40 €/MWh data source: NASA SSE 6.0, calculation by HDKR model 1h interval at mean day of month for all months of the year source:

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

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Agenda

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Status and Dynamics of solar PV Diffusion Grid-Parity Vision behind High shares of Renewables in the System Solar PV in the Nordic Summary

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Solar PV and End-user Economics

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: Deutsche Bank Securities, 2014. 2014 Outlook: Let the Second Gold Rush Begin, New York

Impact of Solar Irradiation and Electricity Prices

 solar irradiation differs by a factor of up to 2.5 (1,000 – 2,500 kWh/m²a)  for electricity this factor is as high as 30 (0.01 - >0.30 EUR/kWh) and therefore making electricity prices far more important for reaching grid-parity than solar irradiation

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: Gerlach A. and Breyer Ch., 2012. Global Grid-Parity Dynamics on a National and Regional Level, 27th EU PVSEC, Frankfurt

Impression for (Commercial) End-User Profitability

source: REC Solar, 2014. Study on the Profitability of Commercial Self-Consumption Solar Installations in Germany; Italy and Turkey (only in German available)

Lappeenranta University of Technology • both systems on the right are part of a 220 kWp commercial solar PV system • it is financially beneficial for the university • more details in August: Kosonen A., Ahola J., Breyer Ch., Albó A., 2014. Large Scale Solar Power Plant in Nordic Conditions, 16th EU Conference on Power Electronics and Applications, August 26-28, accepted

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Agenda

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Status and Dynamics of solar PV Diffusion Grid-Parity Vision behind High shares of Renewables in the System Solar PV in the Nordic Summary

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Solar Economy (as defined by Fortum)

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: Brunila A., 2012. Fortum – Power and heat company in the Nordic countries, Russia, Poland and the Baltics

Resources and Energy Demand Key insights: • no lack of energy resouces • limited conventional resources • solar and wind resources need to be the major pillars of a sustainable energy supply Remark: • conventional resources might be lower than depicted by Perez

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source:

Perez R. and Perez M., 2009. A fundamental look on energy reserves for the planet. The IEA SHC Solar Update, Volume 50

source: Kauppinen H., 2013. Kaasuvisio energia- ja ilmastotiekarttaan 2050, Suomen Kaasuyhdistyksen syyskokous , November 21

Agenda

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Status and Dynamics of solar PV Diffusion Grid-Parity Vision behind High shares of Renewables in the System Solar PV in the Nordic Summary

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

50% RE in Germany – Agora Energiewende, DE

Key insights: • PV-Wind-Gas is the least cost option • nuclear and coal-CCS are too expensive • nuclear and coal-CCS are high risk technologies • high value added for PV-Wind due to higher capacities needed 28

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: Agora Energiewende, 2014. Comparing the Cost of Low-Carbon Technologies: What is the Cheapest option, Berlin

100% RE in Germany – Fraunhofer ISE, DE

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: Henning H.-M. and Palzer A., 2012. 100 % Renewables for Electricity and Heat – a Holistic Model for a Future German Energy System , 7th IRES, Berlin

100% RE in Ireland – Aalborg University, DK source: Connolly D. and Mathiesen V., 2014. A technical and economic analysis of one potential pathway to a 100% renewable energy system, Int. J. Sustain Energy Planning and Mgm

Key characteristics: • 100% RE system for all sector • hourly resolved simulation • solar PV ‚forgotten‘ • well balanced RE-heat and RE-mobility • focus on energy flows and system costs • no grid, no import/ export, not fully optimised 30

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

100% RE in Ireland – Aalborg University, DK

Key insights: • 7 step approach feasible • significant increase in power demand (~ +350%) • BUT, no change in total primary energy demand (TPED) • highly efficient power-based RE system enables powerto-gas/liquid pathways 31

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

100% RE in Ireland – Aalborg University, DK

Key insights: • 2020 system cost only 30% higher than reference (neglecting: cost of climate change, cancer deaths, negative trade balance effects, lower level of employment in energy sector, less tax income) • 2050 system cost identical to reference • simplified standard economic consideration, neglecting the full view on total societal cost • otherwise, maybe 30% less in cost (personal estimate) PV Market increase Potential Globally and in Finland(> 100 000 jobs) significant in employment 32 • Solar Christian Breyer ► [email protected]

Storage options in General and RPM

TES

daily seasonal storage for PV + Wind

source: Breyer Ch., Rieke S., et al., 2011. Hybrid PV-Wind-Renewable Methane Power Plants – A Potential Cornerstone of Global Energy Supply, 26th EU PVSEC, Hamburg, September 5-9

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Key insights: • gas is the only long term energy storage • RPM might be favoured due to an evolutionary transition process

Energy system Major components • CCGT/ OCGT • wind energy • PV • CSP • TES • battery • renewable power methane (RPM) • heating rod

Key characteristic • 100% RE • hourly consideration • Power supply security • Worst case assumption (no hydro, heat, mobility, regional power exchange, no H2 direct use) 34

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: Pleßmann G., Erdmann M., Breyer Ch., et al., 2013. Global Energy Storage Demand for a 100% Renewable Electricity Supply, 8th IRES, Berlin, November 18-20

Financial and technical assumptions for 2020 Technology Capex Opexfix Photovoltaics 900 €/kWp 15 Wind power 1000 €/kWel 30 Battery 250 €/kWhel 20 Gas storage 0.05 €/kWhth 0.001 Power-to-Gas 936 €/kWel 24 CCGT 750 €/kWel 15 OCGT 380 €/kWel 7.6 CSP (solar field) 500 €/kWth 10 Thermal storage 28 €/kWhth 0.3 Steam turbine 700 €/kWel 14 Heating rod 20 €/kWth 0.4 Hot heat burner 100 €/kWth 2 Natural gas fuel -

€/kWp €/kWel €/kWhel €/kWhth €/kWel €/kWel €/kWel €/kWth €/kWhth €/kWel €/kWth €/kWth

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

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Opexvar 0 0 0 0 0.03 0 0 0 0 0 0 0 0.03

€/kWhel €/kWhel €/kWhel €/kWhth €/kWel €/kWhel €/kWhel €/kWhth €/kWhth €/kWhel €/kWhth €/kWhth €/kWhth

Lifetime [a] Efficiency [%] 25 25 10 80 50 20...30 50 30 58 30 38 25 50 20 93 30 42 30 100 20 95 -

What does a 100% RES supply cost?

• • • • 36

LCOE: global average 142 €/MWh (min 80 – max 203 €/MWh) strong dependence on local resource conditions more components need to be included (hydro, heat, mobility, desalination, etc.) still worst case assumptions

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

source: Pleßmann G., Erdmann M., Breyer Ch., et al., 2013. Global Energy Storage Demand for a 100% Renewable Electricity Supply, 8th IRES, Berlin, November 18-20

Global average: Resulting cost optimal system configuration Global capacities of resources  7300 GW PV  6700 GW Wind  3900 GW CSPel

Global capacities of storages (elec.)  1500 GWh Batteries (375 bn €)  1691000 GWhth Gas storage (85 bn €)  2360 GWel RPM capacity (2207 bn €)  73560 GWhth TES (2060 bn €) Shares of energy supply from storages 6%

Shares of energy supply 21 %

46 %

37

33 %

PV

9400 TWh

Wind 13200 TWh CSP 6000 TWh

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Battery

27 %

TES 67 %

RPM

source: Pleßmann G., Erdmann M., Breyer Ch., et al., 2013. Global Energy Storage Demand for a 100% Renewable Electricity Supply, 8th IRES, Berlin, November 18-20

Maximum (visionary) solar PV Market long-term Key question: • What is the long-term maximum solar PV demand globally?

Assumptions: • global population: 10 billion people • energy consumption level: today’s EU28 average should guarantee a good standard of living • energy generation: primary energy demand supplied by power technologies, mainly wind energy and solar energy, due to major constraints, like resources, costs, emissions and efficiency • energy demand: sectors power, heat and mobility use different forms of energy, based on electricity • efficiency of solar PV: doubling of system efficiency from ave 15% today to 30% (impact on area demand) • senarios: breakthrough progress of batteries: Yes (PV share 40% of total) / No (PV share 25%)

Results: • such an energy system is technically, economically and ecologically feasible (see Ireland, Germany, etc.) • demand for solar PV capacity might be about 65 TWp up to 100 TWp depending on battery breakthrough • solar PV energy generation might be up to 160 000 TWh/a • roof-top capacity might be about 10 – 20 TWp, rest need to be ground mounted • area demand for ground mounted systems would be 0.3 % - 0.6% of global land area

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Agenda

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Status and Dynamics of solar PV Diffusion Grid-Parity Vision behind High shares of Renewables in the System Solar PV in the Nordic Summary

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Solar in the Nordic

Grid-Parity events in the Nordic *,** • 2011: Denmark • 2014: Sweden • 2015: Norway • 2016: Finland • 2020s: Iceland

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

* for standard assumptions; deviations possible ** Gerlach A. and Breyer Ch., 2012. Global Grid-Parity Dynamics on a National and Regional Level, 27th EU PVSEC

Solar PV in the Nordic – A recent IEA view

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

source:

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IEA, 2013. Nordic Energy Technology Perspectives – Pathways to a Carbon Neutral Energy Future

To be discussed: • However, solar power generation cost are already today comparable in some regions to some of the mentioned solutions in the scenarios • Are solar power generation costs of 50 – 60 €/MWh (in the mid- to long-term) really too high? • Additionally, we need sustainable solutions for the power, heat and mobility

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Solar in the Nordic – Status and Dynamic

Based on: • IEA-PVPS, 2013 • EPIA, 2014 • Werner C., et al., 2013 • Kosonen A., et al., 2014

Based on: • Pleßmann G., et al., 2013 • Kosonen A., et al., 2014

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Solar PV Market Potential Globally and in Finland source: Kosonen A., Ahola J., Breyer Ch., Albó A., 2014. Large Scale Solar Power Plant in Nordic Conditions, 16th EU Conference on Power Electronics and Applications, August 26-28, accepted Christian Breyer ► [email protected]

Agenda

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Status and Dynamics of solar PV Diffusion Grid-Parity Vision behind High shares of Renewables in the System Solar PV in the Nordic Summary

Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Summary  Solar PV diffusion trend is stable for decades (leaning rate, growth rate, cost reduction)  More and more market segments become profitable  Solar PV is a major part of the complex energy system  PV and Wind emerge to the backbone of global energy supply  100% RE system is feasible: technical, economical, ecological  RPM is needed to achieve 100% RES based energy supply  Long-term market potential is huge: some TWp up to 100 TWp  Nordic PV markets: Grid-Parity will accelerate the growth

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Solar PV Market Potential Globally and in Finland Christian Breyer ► [email protected]

Thanks for your attention!