During her day’s sojourn in India earlier this month on the invitation of the Indian Prime Minister Angela Merkel, Chancellor of Germany, held inter-governmental consultations, quite unusually, at the cabinet level. Such cabinet-level discussions are held with very few countries. India is the first Asian country with which such discussions have been held. About half a dozen ministers accompanied her with the intentions of further expanding and intensifying economic cooperation between the two countries. Germany is the largest trading partner of India in the European Union.
The Institute of Electrical and Electronics Engineers (IEEE), the organization behind standards such as WiFi, Wimax and hundreds of others, sees Solar energy as becoming the cheapest power source in ten years.
The organization, which is increasing its focus on Solar this year through the setting up of a journal and experts groups, is one of the few international bodies to throw its weight behind a single source of energy and hold it up as the definite candidate to bet on. Most other experts and bodies tend to see a combination of sources, such as Wind, geothermal and nuclear as the solution to getting out of the hydrocarbon problem.
The IEEE, after which many standards are named, is considered the world’s largest association of professionals — encompassing experts in nearly all fields from electronics to aviation.
The forecast, if it comes true, will also pose a challenge to countries such as Saudi Arabia which derive a lot of its income from its deposits of fossil fuel. Many such countries actively limit their production so that that the reserves last for 20-40 years more. If Solar is sure to become cheaper than fossil fuels, such countries would be better of producing as much as possible when there is still demand for such products.
IEEE says Solar has the potential to more than meet the entire energy requirement of the planet.
“The rate of energy from sunlight hitting the earth is of the order of 100,000 terawatts. Just a fraction is needed to meet the power needs of the entire globe, as it takes approximately 15 terawatts to power the earth,” it pointed out. “No other alternative source has the same potential,” says James Prendergast IEEE’s Executive Director
Currently, power produced from solar photovoltaic plants costs around 4 US cents (Rs 18) per unit, while coal powered plants produce a unit of power at around Rs 3 or 4, without including cost of pollution. Many governments, such as India’s, provide purchase guarantees for solar powered electricity production. India, for example, is offering around Rs 17 per unit of such electricity, under its massive Solar Mission.
However, global solar PV production is still minuscule — around 20-30 Gigawatt per year, not enough to even meet the incremental power demand for a country like India. India has a total of around 155 GW of capacity most of which is able to run 24-hours a day, compared to solar which runs effectively only for around 6 hours.
The production capacity, however, has been increasing at an average annual growth rate of more than 40 percent since 2000. At current trends, by 2050, it is expected that solar PV will provide 11 percent of global electricity production, corresponding to 3,000 gigawatts of cumulative installed capacity.
International Finance Corporation (Ifc) on Thursday announced an investment of $4 million to build the country’s first large scale grid connected thin-film solar power plant, which will help bolster clean energy locally and provide additional electricity to about 11,000 people.
The investment by Ifc, a member of the World Bank Group, into Sapphire Industrial Infrastructures, a subsidiary of Moser Baer Clean Energy, will support the construction of a 5-megawatt solar plant at Sivaganga in Tamil Nadu.
“Ifc recognises the potential of large-scale solar power generation to help meet India’s enormous energy needs,” country head-Solar Farms at Moser Baer Clean Energy Rajya Ghei said.
The learning from this project will help us replicate similar projects in other Indian states, Ghai added.
The solar plant will have the capacity to produce eight million units of power annually, and is expected to avoid approximately 6,600 tonnes of greenhouse-gas emissions per year.
Grid connected solar electricity has received lukewarm response from the private sector in India due to higher initial investment and generation costs as compared to conventional energy sources.
“The successful commissioning of this first large scale thin film solar photo-voltaic plant demonstrates private sector’s ability to rise to the challenges associated with achieving a balanced energy mix,” Ifc director, Infrastructure Asia, Anita George, said.
The Solar Energy Company to adopt parent Company Name
SunTechnics Energy Systems, one of India’s largest companies dedicated to solar energy today announced that it would adopt its parent company name “Conergy” and be recognized going forward as Conergy Energy Systems. SunTechnics began its Indian operations in 2005 and the name change is in line with the company’s strategy to be recognized as “Conergy” worldwide.
Further to this announcement, the Indian entity will now focus largely on small and large scale solar photovoltaic projects. The company operates two core businesses: grid-connect systems (large scale solar parks) and off grid systems (Stand alone SPV Systems). The company’s product portfolio will continue to include Conergy grid-connect components, sourced from its European and North American factories and off-grid systems produced from its Bangalore facility which for the time being will continue to be promoted under the SunTechnics brand.
Conergy’s customers in India include giants in the telecom, oil and gas, government nodal agencies and manufacturing sectors, as well as the state and national government units.
Speaking on the development Mr. Prakash Shetty, CEO and Director of SunTechnics said, “The initiative to adopt our parent company’s name coupled with Conergy’s continued expansion and active participation in this market is a clear indication of Conergy’s long-term commitment to the strategic Indian market. The Indian market is strongly driven by a high need for electricity. Off-grid is one of Conergy’s pillars for success and growth in India, with booming sectors like rural electrification, rooftop systems, BIPV, telecommunications, railways – of which we own a significant market share. The Year 2011 started with a well planned expansion of the company’s SPV module manufacturing capacity from 4 MW to 25 MW which was followed by several significant orders that has helped Conergy develop a formidable business backlog. Our EPC business has developed very encouragingly due to the support from the National Solar Mission and incentives from individual states. India’s National Solar Mission calls for the installation of 20 GW by 2020.”
Strong growth expected
Solar energy has gained considerable importance in Asia over the past year – and the market will continue to grow rapidly. Industry experts at Bank Sarasin Asia estimate that in 2010 solar PV installations grew by 87% percent globally.
In 2010, the most promising market was India, which grew by 166 percent. Bank Sarasin estimates that India recorded 80 MW of newly installed solar capacity last year. Furthermore, they anticipate that the Indian PV market will grow by 76% annually in the period from 2009 to 2015.
About the Conergy Group
Conergy is the only solar company worldwide that delivers synchronised solar systems. The system manufacturer produces all components needed for solar installation under one roof. Furthermore, all necessary services related to the solar plants come from one single source.
The Conergy System Services deliver the “Total Sleep-easy Package” for the Conergy System Technology. From the planning and financing to the engineering, installation and all the way to the monitoring, maintenance, operational and commercial management and insurance, Conergy offers a service package to cover all possible services for one’s own solar plant.
The Conergy System Sales takes Conergy’s premium products and services directly to the customer in nearly 40 different countries. With 24 subsidiaries in 14 countries on four continents, the solar group operates closer to the customer than any other solar company. This way, the solar experts have generated more than half of their sales outside of Germany.
The company today employs more than 1,700 people. Since Conergy was founded, it has produced and sold more than 1.5 GW of clean solar energy. More energy than two average nuclear reactors or coal-fuelled power stations can produce.
India’s performance on global environment index has improved earning it the 123th rank, primarily because of progress made in renewables. And, this has earned kudos for India’s green industry from United Nations Environment Programme executive Director Achim Steiner. “India has invested a lot in gre
en economy,” Steiner said, while addressing Indian industry in the Capital on Friday but wanted the industry to raise the bar.
This comes after a global environment performance index released recently ranked India at 123 among 165 nations, a jump of three positions as compared to previous years. Iceland tops the ranking while Sierra Leone is at the bottom of the table.
But, that does not mean that Indians do not want more. Majority of Indians in a global survey by US based public opinion agency Gallup said they want the country to adopt green economy norms for development.
Indians are more likely to say they are satisfied with efforts to preserve the environment (45%) than the ones who say they are dissatisfied (38%), the survey said, adding that majority of is more concerned about environment than economic growth.
The Indian industry can boost of being green primarily because of gains made in solar generation. A study released by Ernst and Young this week ranked India among top three nations, after China and US, on renewable growth.
The high ranking was primarily on progress made in installing solar photo-voltaic to generate power and off shore wind energy turbines.
But environment minister Jairam Ramesh still feels that India is not doing enough in research and development of renewable to become world leader as it was in 1980s.
US-based Astonfield Renewable Resources today announced that it has entered into a strategic partnership with Grupo T-Solar Global S.A., a Spanish-based solar power producer with an installed generation capacity of 168 megawatts (MW) in Spain and Italy, as well as a large pipeline in Southern Europe, Latin America and the US. The partnership has been initiated with Astonfield’s 5MW solar PV project in Osiyan Rajasthan, India, which is expected to be the first in a long-term strategic collaboration between Astonfield and T-Solar.
Astonfield will deploy T-Solar’s latest generation 5.7 square metre (m2), hydrogenated amorphous silicon (a-Si:H), thin-film modules in Osiyan Rajasthan. This project will be one of the first utility-scale solar power plants commissioned under the Jawaharlal Nehru National Solar Mission (JNNSM) and is expected to be commissioned by October 2011. Construction on the Osiyan Rajasthan project has begun and, once operational, it is expected to generate at least 8500 megawatt hours (MWh) per year, enough to power the equivalent of more than 13,000 Indian households.
With T-Solar’s strategic investment and project debt financing in place from leading Indian banking institutions, such as the State Bank of India and the Export-Import Bank of India, Astonfield has confirmed that site construction is well under way and the Osiyan Rajasthan project is set for on-time commissioning. Schneider Electric, an engineering, procurement and construction (EPC) provider based in France, has been retained as the project’s (EPC) manager.
Air conditioning in India has not been common due to the extreme demand that it puts on a notoriously unreliable electrical infrastructure. But when you think about when air-conditioners (AC) would be most used in tropical countries like India, it coincides with the time when the sun is blazing its heat in the peak afternoon. Dr Upendra Kamdar, founder of Suryashakti Systems came up with air conditioning unit that is powered in part by direct solar heat. Because units often have to fit into limited space, the systems are small because solar PV panels and batteries are not needed.
The patented hybrid system works by using solar thermal energy to further expand the refrigerant coming out of the compressor, thus reducing the compressor load and saving electricity consumed by the system. Heat is absorbed from the atmosphere and also from hot air exiting from the air conditioning system, which is usually discarded as waste heat. As there are heat storage facilities available in the system, it works during night time as well and provides 48 to 72 hours back-up during cloudy days. The system can be effective in saving electricity consumption by up to 50% when compared to conventional air-conditioners.
Mr. Dinesh Kumar Shah, the owner of Vijay Stores, a World Magazine Subscription Agency from Gujarat, India, uses a hybrid solar air conditioner. The solar assisted AC units have been installed there for the past 1.5 years and have resulted in drastic reduction of the electricity bill. Mr Dinesh chose the hybrid systems because he runs air conditioning for 8 to 9 hours a day, and he was confident that he’d save 50% of his electrical use. He said with the new solar AC units he’s currently saving more than Rs 30,000 (Rs 15,000 per unit) per year. A price comparison of a 1 ton AC unit shows that the solar assisted AC from Suryashakti Systems costs around Rs 18-20 thousand (~60%) more than conventional units and the resulting savings as seen by Mr. Dinesh would mean a payback period of 1.3 years. The Indian Income tax law allows an 80% accelerated depreciation in the first year for solar systems and this makes it an even more attractive proposition.
When asked about the installation and maintenance requirements, Mr. Dinesh said that installation is similar to the normal AC unit. “The system is running smoothly and is in fact much less noisy,” he added. This system has also been installed in the offices of Indian Railways.
The latest development that this company is working on now is what Mr Kamdar describes as “100% solar ductable central AC system using solar thermal system and solar chiller”. This system can cool without the use of harmful refrigerants and also provide hot water for other purposes, resulting in a 99% reduction electrical energy use compared to conventional duct base AC. The system will be commercialised after he secures funding.
On May 26th, 2011, Ernst & Young released the latest edition of its global “Renewable Energy Country Attractiveness Indices”, which states that China remains by far the most promising location to pursue future renewable energy business opportunities.
The report places the United States in second place and India in third, as well as stating that nations around the world are increasingly broadening the scope of their renewable energy portfolios amid “challenging market conditions”.
“It is clear that the solar sector faces both challenges and growth opportunities,” observes Ernst & Young Global Cleantech Leader Gil Forer. “This is a good time for solar companies to continue to focus on cost reduction efforts, supply chain efficiencies, risk management and capital management.”
China scores high on wind, PV
China has held top position since August 2010, and earned its highest score ever during the quarter. China scored particularly high on its wind index, but also on solar PV.
Ernst & Young states that the China’s latest five-year plan is its “greenest” to date, including a target of 11.3% of primary energy generated by non-fossil fuels by 2015.
Lower incentive levels, restricted access to capital limit wind, solar development
The report also notes a chilling effect that the global financial climate has had on renewable energy markets, noting that some sectors, such as solar, have fared better than wind or biomass.
Ernst & Young states that apart from Brazil, which increased four places, most nations have dropped slightly in scores, as the result of diminishing incentives and restricted access to capital.
CSP, offshore wind providing new opportunities
The United States remained in second place in the report, on the strength of solar CSP, solar PV and onshore wind potential. Ernst & Young states that the nation’s utility scale solar sector remains “healthy”.
The report also notes that the increasing commercial viability of different technologies including offshore wind and concentrated solar power (CSP) provide new opportunities.
Report an assessment of future potential
It is important to note that this report was not an assessment of progress in renewable energy, but rather of future business potential.
For example, the relatively low score of Denmark (#22) represents a restricted grid capacity and reduced tariff levels following installation of the greatest per-capita wind capacities in the world.
Lanco Solar, a subsidiary of Lanco Infratech Limited, in consortium with Juwi Renewable India Ltd, has received a letter of award, or LoA, from Maharashtra State Power GenerationCo Ltd, or Mahagenco, for building a 75MW Crystalline technology based photovoltaic, or PV, solar power project in Dhule district in Maharashtra. The project value is INR8.84 billion.
The project would be fully commissioned by mid February 2012.
Madhusudhan Rao, Chairman, Lanco Group, said, “India’s solar power generation capacity will reach 68,000 megawatts (MW) by 2021-22, triple the government’s target. To pursue the same, we at Lanco has given utmost importance to build on capacities on solar power generation which is also the need of the hour and aims to have 300 MW in generation next two years & in EPC aims to have 300-500 MW of solar thermal and solar PV plants over the next couple of years.
“What we are trying to create today is a small portion of the opportunity we have in the future and for the same Lanco Infratech has been developing a number of solar projects and has been at the forefront in its commitment to develop and promote renewable energy in India.”
At the end of last year, the global photovoltaic market hit a cumulative installed capacity of 40 GW, of which 16.6 GW was added during 2010. A year of unprecedented growth saw new capacity more than double from 7.2 GW in 2009. Worldwide, solar PV already produces some 50 TWh each year. By 2015, though, capacity could climb to range from 131 GW to 196 GW.
These figures come from the European Photovoltaic Industry Association (EPIA), which recently presented its Global Market Outlook for Photovoltaics until 2015. The trade group linked last year’s surge to soaring German and Italian markets. Germany continued to lead the PV market worldwide, with 7.4 GW installed over the year, while Italy added a substantial 2.3 GW.
Other countries with significant growth included the Czech Republic, which saw a 1.5 GW expansion in 2010, a rise unlikely to be sustained in 2011. Japan gained 990 MW, the United States 900 MW, and France 700 MW. Spain regained some ground by installing 370 MW after two years of strongly adverse conditions. Belgium connected more than 420 MW of PV.
Europe Leads the Way
In terms of global installed capacity, the EU leads with almost 30 GW installed as of 2010 — about 75% of global PV capacity, up from 70% in 2009. Japan (3.6 GW) and the USA (2.5 GW) are some way behind, while China has already entered the Top 10 of the world’s PV markets and should reach its first GW this year.
Across Europe, installations last year totalled 13.3 GW, outstripping 9.3 GW for wind to lead all renewable generation technologies in added capacity. In its expansion PV was second only to gas power plants, for which new capacity reached between 15.7 GW and 28 GW, depending on the source. EPIA, in fact, links global investment in gas — rather than nuclear and coal — with the growth in variable renewable generation sources such as PV and wind.
At its current pace of expansion, Europe could increase the percentage of its electricity generated from PV by one percentage point every two years, says EPIA. The continent’s annual increase in capacity has grown from less than 1 GW in 2003 to over 13 GW last year. Despite difficult financial and economic circumstances, 2010 was expected to show a major acceleration. But a 130% Compound Annual Growth Rate (CAGR) exceeded all expectations and almost matched the 145% from 2007 to 2008.
Global Growth Opportunities
While the EU has dominated the world market for years, and may continue to do so, the rest of the world clearly offers greater growth potential. PV can provide a sustainable solution to the energy needs of the ‘sunbelt’ countries around the equator. In this region PV can already compete with diesel generators for peak power generation without policy support
Driven by local and global energy demand, the fastest PV growth is expected to continue in China and India, followed by Southeast Asia, Latin America and the MENA countries. The PV potential of the sunbelt countries could range from 60 GW to 250 GW by 2020, and from 260 GW to 1100 GW in 2030, representing 27% to 58% of the forecast global installed PV capacity by then.
Currently, though, among countries outside Europe only Japan and the USA have more than 1 GW of installed PV capacity. China could reach that threshold quickly but medium-sized markets will need several years to reach the same level of development.
A global analysis reveals three leading zones that are developing PV in contrasting ways. The Asia-Pacific (APEC) region, reflecting its wealth and economic growth, is the second-placed region behind Europe. In addition to Japan and China, the APEC region covers: South Korea, where the market has slipped since 2008; Australia, with more than 300 MW installed in one year; Taiwan; and Thailand, where more than 2.5 GW may be installed in coming years. North America is the third region, with Canada developing steadily alongside the US to form a huge market with tremendous potential for growth.
Outside these three regions, the MENA (Middle East and North Africa) region represents an untapped opportunity for the medium term. PV also shows great potential in South America and Africa, where electricity demand is expected to rise fast.
Forecasts to 2015
While growth in the EU in coming years could be low, or even negative, non-EU countries should more than pick up the slack from 2011 and 2012 onwards, ensuring continuous global PV market growth until 2015 and beyond.
In 2011, though, a market stagnation or even a small dip is not impossible. The speed of political decisions over 2010 and the start of 2011 acts as a reminder that PV will be incentive driven until competitiveness is reached in all of a country’s market segments. Yet EPIA believes market developments could raise global installed capacity in 2015 to between 131 GW and 196 GW, with 100 GW hit as soon as 2013.
A rapid global rebalancing could also be imminent, with the EU accounting for less than 40% of the world market by 2015 in the EPIA’s ‘Moderate’ scenario and about 45% in its ‘Policy-Driven’ scenario. While 2010 showed no sign of such a change, the rest of the world, and especially Asia, could prove a fertile market, even if the EU is likely to stay ahead in installed capacity over the next decade.
Production, which was once balanced between the EU and the rest of the world, is already growing faster in Asia, and particularly China. Modules are still mainly shipped to the EU, reflecting the smaller size of Asia’s market, although about half of the value of a PV system is currently created further downstream and closer to the consumers.
Anticipated growth in markets outside the EU would tend to reduce the mismatch between supply and demand. A current overcapacity should also further reduce module prices over coming years and thereby trigger more demand.
The disparity in installations between the EU and the rest of the world should decrease over the next five years. On the supply side, a rise in the relative share of transport in the cost of PV modules as module prices decrease should address the imbalance and encourage production closer to the end market. A continuing slide in PV module prices will also further erode the share of modules in the overall value of a PV system.
Unquestionably, global PV production capacity in 2010 considerably outstripped demand. Even so, several manufacturers announced plans to accelerate their capacity expansion.
This apparent contradiction extends from module manufacturers further upstream in the PV value chain. EPIA estimates that global production capacity for silicon could reach 370,000 tonnes next year, up from about 350,000 tonnes in 2010. Huge expansions have taken place since the 2005 and 2008 shortages, and many only came on-line last year. Various small Chinese players are being forced to shut down production while the largest established companies are announcing capacity increases of as much as 40,000 to 60,000 tonnes by 2012.
For wafers, global production capacity totalled 30-35 GW in 2010, of which more than 55% was in China. Germany accounts for more than 10% of global capacity, followed by Japan, Taiwan, Norway and the US.
Crystalline-silicon (c-Si) cell and module capacity is now mainly based in Asia. EPIA estimated global c-Si cell production at 27-28 GW in 2010. Almost half this capacity was in China, while Taiwan produced more than 15%, the EU more than 10%, Japan slightly less than 10%, and the US less than 5%. Module production capacities for c-Si were estimated slightly higher at 30-32 GW.
Global production of thin-film modules reached 3.5 GW in 2010. This is likely to increase to more than 5 GW in 2011 and might reach 6-8.5 GW in 2012.
Scaled Down Incentives
Three main factors have driven PV’s spectacular recent growth. Firstly, renewable energy is no longer a curiosity; PV has proven itself to be a viable energy source in all regions of the world. Secondly, price falls have brought PV close to grid parity in several countries, encouraging new investors. Finally, policymakers in key countries have introduced FiTs and other incentives that have helped develop markets, cut prices and raise investors’ awareness.
Over the last decade, global installed capacity has multiplied by 27, from 1.5 GW in 2000 to 39.5 GW in 2010 – an annual growth rate of 40%. Furthermore, that growth has proved to be sustainable, allowing the industry to develop at a stable rate.
The EU, having overtaken Japan, is now the clear leader in both market and installed capacity, thanks largely to German initiatives, which have also fed global expansion. In the rest of the world, the leading countries continue to be those that started installing PV even before the EU.
The market is expanding every year. In sunbelt countries, falling prices are bringing PV closer to grid parity and helping spread awareness of its potential. But the financial crisis and competition from other energy sources put pressure on policymakers to streamline incentives.
‘The currently installed global PV capacity produces power equivalent to the entire electricity consumption of countries like Greece, Romania or Switzerland,’ said Ingmar Wilhelm, EPIA’s president.
‘The evolution of the PV market in recent years has been heavily linked to the confidence and vision of… policymakers in supporting the development of the technology. Adequate support policies that have been driving the markets so far, such as the feed-in tariffs, must continue and be ever brought in tune with the declining cost curve of PV.’