Solar Energy

Technologies, markets, CO2 emissions, impact on energy system

Bit Bang, Sustainable Energy theme 1.4. 2015

Petra Lundström, Fortum Power and Heat Oy

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Solar EconomySolar based production with high overall system efficiency

Geothermal

Hydro

Wind

Sun

Ocean

Traditionalenergy production Exhaustible fuels that

burden the environment

Coal GasOil

Advancedenergy productionEnergy efficient and/or

low-emission production

Nuclear today

Nucleartomorrow

CHP

CCS

Bio

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Changing energy system

Storage

Active ConsumerDemand

Response

Lo

w

Effi

cie

ncy

H

igh

Effi

cie

ncy

High Emissions Emission free

Interconnectors

Smart applications

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Solar energy availability

Source: Research Institute for Solar Energy

Global horizontal irradiation (kWh/m2 per year)

Total amount of solar energy incident on the surface of the Earth is 800 million TWh per year. That is more than 5000 times the annual global primary energy demand.

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Solar energy availability in EuropeYearly solar horizontal irradiation availability in Europe

0

200

400

600

800

1000

1200

1400

1600

1800

2000

kW

h/m

2

Diffuse

Beam

Source: Beam direct sun and diffuse sky irradiation calculated from European Test Reference Years

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How much electricity could be produced in theory ?

With a PV system of 15% efficiency, a module area of 25 km x 25 km would be needed to produce the yearly electricity consumption in Finland.

To produce all world’s electrity consumption, an area equal to 40% of Finland would be needed.

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Three main solar energy technologies with unique characteristics

Photovoltaics, PV/CPV Solar Thermal, STConcentrating

Solar Power, CSP

Power Residential to utility scale

Power & heatCommercial to utility scale

Heat & coolingResidential to comm. scale

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Solar energy conversion technologies

Photovoltaics (PV) global installed capacity 200 GW• Can utilise both direct beam sunlight and diffuse skylight• Crystalline silicon cells (90% of the current PV market)• Thin film cells (10% of the current PV market)• Organic and dye-sensitised cells (laboratory to pilots)

Concentrating solar thermal power (CSP) installed capacity 5 GW• Conventional technology with steam turbines, requires high direct sunlight

Concentrating Photovoltaics (CPV) mainly pilot projects, installed capacity 0.3 GW• High efficiency systems with lenses, requires high direct sunlight

Solar thermal heating systems installed capacity 300 GW• Collector systems that heat air or water• China the biggest market by far

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Solar PV cell technologies and typical module efficienciesMonocrystalline silicon

15-21%Multicrystalline silicon

14-17%Thin film7-14%

Polymer< 10%

Dye-sensitised< 10%

Concentrating PV30-35%

Global cumulative capacity will be doubled again in three years

• Cumulative capacity will be doubled from 2013 to 2016

• European share of cumulative capacity will decrease below 50% by the end of 2014

• China will surpass Germany’s cumulative capacity in 2015

• Germany is already producing 6% and Italy 8% of its electricity consumption with PV

• Cumulative capacity will exceed 1.5 GW in 30 countries by 2018

Source: Global market outlook for photovoltaics 2014-18 (EPIA, June 2014)

2007

2008

2009

2010

2011

2012

2013

E2014

E2015

E2016

E2017

E2018

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50

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150

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400

OtherIndiaAustraliaJapanUSAChinaR. of EuropeUKFranceSpainItalyGermany

Cu

mu

lati

ve

ca

pa

cit

y (

GW

)

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Global solar generation will grow from 1% to 30% of consumption

Source: IEA Solar Photovoltaic Energy Technology Roadmap (2014)

2014 2030 20500

1000

2000

3000

4000

5000

6000

7000

Global PV generationA

nn

ua

l ge

ne

rati

on

(T

Wh

)

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PV module spot market price decreased by 80% during 2009-12

Sources: Photon International, PV magazine

1/09

3/09

5/09

7/09

9/09

11/0

91/

103/

105/

107/

109/

1011

/10

1/11

3/11

5/11

7/11

9/11

11/1

11/

123/

125/

127/

129/

1211

/12

1/13

3/13

5/13

7/13

9/13

11/1

30.0

0.5

1.0

1.5

2.0

2.5

3.0German spot market price for PV modules

Factory gate c-Si Mono c-Si Multi c-Si a-Si CdTe

PV

mo

du

le p

ric

e (

eu

ro/W

p)

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Solar PV power generation is becoming very competitive

Source for PV system turnkey price development: International Technology Roadmap for PV, 2013 (20% added to the estimated system cost)Real interest rate: 5% (nominal WACC minus inflation)O&M cost: 14 EUR/kW/yearUtilisation: Nordic 900, South France 1400, South Italy 1700 hours/yearSystem lifetime: 30 years

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 20230

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20

30

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60

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80

90

100

Nordic

South France

South Italy

PV

LC

OE

(E

UR

/MW

h)

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Average PV lifetime CO2 emissions compared with average European and Fortum generation mix

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50

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350

AverageEuropeanmix 2010

Fortumaverage

mix 2010

FortumEuropeanaverage

mix 2010

PV SouthItaly,

manuf. withEuropeanaverage

mix

PV inSouth Italy,manuf. with

Fortumaverage

mix

PV inSouth Italy,manuf. withFortum EU

averagemix

PV inNordic,

manuf. withEuropeanaverage

mix

PV inNordic,

manuf. withFortumaverage

mix

PV inNordic,

manuf. withFortum EU

averagemix

CO

2 e

mis

sio

ns

g/k

Wh

Utility scale PV plant: Amrit 5.4 MWp solar power plant

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• In operation since March 2012

• Fortum acquisition June 2013

• Utilisation 1760 kWh/kWp/a

• First Solar modules and SMA inverters

Greenfield PV power plant in Madhya Pradesh

• Greenfield power plant, inaugurated in January 2015

• Production 1 700 kWh/kWp/a

• 125 000 CdTe First Solar PV modules, 15 inverters

• Module field covers an area of 28 hectars

Kapeli PV power plant ,12 MWp

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Rooftop solar: 20 kW Café Carusel (Helsinki)• Commissioning 2013

• Annual yield 19 500 kWh

• Peak power 19,6 kW

• 80 Naps 245W PV modules

• 2 SMA inverters

• Mounting system from Hilti

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Discussion topic - ALL

• Intermittent renewables – both wind and solar power – are growing significantly in many countries

• Intermittent means that power production varies depending on time of day and natural conditions (windiness and cloudiness)

• Electricity consumers are increasingly becoming small-scale intermittent producers

• What is the impact of this development on the energy business?

Average power prices in Nordics and Germanywere very close in December 2014 …

Fortum / Hydro Power and Technology division18

… but hourly prices were very different !Price pattern is getting more important than average price

Fortum / Hydro Power and Technology division19

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The traditional value chain in energy business is changing

• A traditional utility business value chain:

• Growth of decentralized and intermittent production changes the picture:– Also consumption must become more flexible

– Consumption and small scale production either for autoconsumption or for sale go hand in hand• The customer needs both to buy and sell electricity

– More storage capacity needed, initially at the customer’s in a smaller scale

– Many new decentralized production technologies are renewable, i.e. no fuel supply

– Well functioning electricity market and distribution grids are of vital importance

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Background material

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Concentrating PV (CPV)

To increase the efficiency of PV, it is possible to join together several thin layers of semiconductors that each capture a different wavelength of the solar spectrum. Best 3-junction cells (Ge/GaInAs/GaInP) exceed 40% efficiency. New 4-junction cells are expected to reach 50%.

These cells are expensive and to reduce material cost, they are used with concentrator systems (lenses and mirrors). Concentration ratios can be up to 1000X which means that only 10 cm2 of cell is needed for 1 m2 module. Concentrating PV requires high direct sunlight and a sun-tracking device.

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Concentrating solar (thermal) power (CSP)Another way of utilising direct sunlight with tracking systems is concentrating solar thermal power (CSP). Reflectors are used to concentrate sunlight to a receiver and heat a medium (syntethic oil, water or molten salt) which in turn will heat up steam that is driven to turbine to generate electricity. Typical solar-to-electric efficiencies range from 15% (throughs) to 25% (dishes). A benefit of CSP is that heat can be stored or backup fuels used to generate electricity when the sun is not shining.

A CSP tower with a molten salt storage

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CSP reflector systemsParabolic through Linear Fresnel reflector

Solar tower with heliostats Parabolic dishes

Parabolic throughs and linear Fresnel reflectors (LFR) have a line focus. Throughs have a mobile receiver whereas LFR receiver is fixed.

Solar towers and parabolic dishes have a point focus. Tower receiver is fixed whereas dishes are mobile and have an independent engine/generator (such as Stirling engine or microturbine)

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Solar PV growth continues outside Europe- China, Japan and USA the biggest markets

Source: Global market outlook for photovoltaics 2014-18 (EPIA, June 2014)

2006

2007

2008

2009

2010

2011

2012

2013

E2014

E2015

E2016

E2017

E2018

0

10

20

30

40

50

60Other

India

Australia

Japan

USA

China

R. of Europe

UK

France

Spain

Italy

Germany

An

nu

al m

ark

et

(GW

)

• The annual PV market is likely to be around 45-55 GW for the next few years

• China will stay the biggest market, Japan boom continues at least 2014, USA expected to grow steadily

• European market share has decreased from 75% in 2011 to below 25% in 2014

• There is significant upside up to 70 GW in 2018 if favorable policies are in place

Fortum – business in solar energy

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• Fortum buys back surplus energy from solar energy systems

• Price is linked to NordPool spot-price – Fortum commission (0.003 euro/kWh)

• Remote readable and hourly measurement based energy meter is required

• Launched 2012 in Finland and Sweden

• Fortum as interface to the customer and system integrator of turn-key solutions

• Standardized solar kits of 6, 9 12 or 18 panels – 1.3 to 3.8 kW

• Fortum is seeking for growth opportunities in countries with good solar energy resources and synergies for other Fortum growth initiatives

• Fortum as owner and operator of solar power plants. Typical size > 5 MW

• In June 2013, Fortum acquired a 5.4 MW solar power plant in India

• In January 2015, Fortum commissioned a 12 MW solar plant in India

Solar kits for residential customersB2C

Buyback of surplus production

Energy producer with large scale solar energy farms

Solar solutions for commercial customersB2B

• > 20 kW tailored systems for commercial customers

• Fortum as energy partner offering turnkey solutions according to facility specs and customer needs

• Supply and installations in cooperation with 2-4 trusted partners

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Solar PV (multicrystalline silicon) manufacturing process

Balance of system includes all other system components except the module: inverters, cables, mounting, installation work etc.

PV (large) systemcost breakdown

Silicon

Ingot/wafer

Cell

Module

Balance of system

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Energy payback time depends on the solar conditions

0

0,5

1

1,5

2

Monocrystalline Multicrystalline

En

erg

y p

ay

ba

ck

tim

e (

ye

ars

)

Sun belt

South Europe

Germany

Source: Update of energy payback time data for crystalline silicon PV modules (Thomas Wetzel, 26th European PVSEC, 2011)Solar PV electricity production: Sunbelt 1800, South Europe 1275, Germany 1000 kWh/kWpeak

Energy payback time for crystalline silicon modules at various locations