Solar energy the next global warming
Photovoltaics in the fast lane worldwide
The global solar market is booming. In many regions, photovoltaics (PV) is already the cheapest form of electricity generation and is on the way to becoming one of the main pillars of energy supply. In view of global warming, more and more investors, citizens and governments are relying on climate-friendly solar power. A guest contribution by Horst Dufner.
The entrance area of Intersolar Europe at Messe München in 2019. The world's leading trade fair for the solar industry will next take place from June 9th to 11th, 2021.
Photo: Solar Promotion
International is the Photovoltaic on the rise. Some figures: In 2019, solar power systems with more than 121 gigawatts (GW) were installed worldwide. In 2018 it was 109 GW. The globally installed PV capacity increased to more than 580 GW. The information comes from market researchers at the New York Institute Bloomberg New Energy Finance (BNEF). For this year, the analysts forecast an increase in PV systems of around 140 GW, which would have corresponded to growth of a good 15%.
PV market quite robust in the corona crisis
As a result of the corona pandemic, BNEF has now corrected these forecasts downwards, but compared to other economic sectors, the PV market is quite robust during the corona crisis. In countries badly affected by the pandemic, such as Spain, the solar sector has so far only made minimal slumps through the crisis.
According to industry insiders, investors apparently viewed PV projects as a solid and safe investment. In any case, they expect a strong surge in demand as soon as corona restrictions are reduced or lifted.
Photovoltaics: Rapid cost reduction
Central to the worldwide rise of PV is its rapid cost reduction. The investment costs of large solar power systems in Germany have fallen by 75% over the last 15 years, according to the Freiburg Fraunhofer Institute for Solar Energy Systems (ISE). Worldwide, the electricity production costs of PV have fallen to an average of 50 US dollars per megawatt hour (MWh), the BNEF market researchers recently announced. A decade ago, generating one MWh of solar power cost well over $ 300.
The electricity production costs of new solar parks in China, the world's largest PV market, are currently only 35 dollars per MWh, according to BNEF. This corresponds roughly to the level of the operating costs of coal-fired power plants.
Economies of scale make the difference
The world's cheapest PV projects with LCOE between 23 and 29 US dollars / MWh are currently being implemented in China, Australia, Chile and the United Arab Emirates. According to the BNEF, this will enable them to force existing fossil fuel power plants out of the market.
"If the previous trends continue, we expect that the electricity production costs of the best photovoltaic projects will fall to below 20 dollars per megawatt hour by 2030," says BNEF analyst Tifenn Brandily.
The cost reductions are primarily due to technological improvements, competition and economies of scale, which are particularly evident in large solar parks. Due to the economies of scale, the operating and maintenance costs can be reduced particularly significantly and components can be procured more cheaply. Accordingly, the average size of ground-mounted PV systems has increased sharply in recent years. According to BNEF estimates, solar parks today are a third more powerful than four years ago, with an average of 27 megawatts (MW).
At Intersolar Europe, exhibitors from all over the world will be showing new developments in the solar industry - solar modules can be seen here.
Photo: Solar Promotion
Solar parks on a gigawatt scale
Some PV power plants have now exceeded the gigawatt barrier. Bhadla Solar Park in the Indian state of Rajasthan is currently in the lead with an installed capacity of 2.245 gigawatts (GW). The largest PV park in Europe is currently being built in southwest Spain in the province of Badajoz / Extremadura. The builder is the Spanish energy supplier Iberdrola, which applied for approval in May 2020 for the realization of a Francisco Pizarro solar park, which is even larger with 590 MW, in the Extremadura region.
Subsidy-free through long-term supply contracts
Many of these large projects are now financed without subsidies through long-term electricity supply contracts. With such “Power Purchase Agreements” (PPAs), companies protect themselves against rising electricity prices. The PPA market for renewable power is growing, increasing by over 40% worldwide in 2019 compared to the previous year. Supply contracts for electricity from PV and wind turbines with an output of 19.5 GW were concluded, most of them in the USA.
Supply contracts for young and old
Solar PPAs are also in vogue in Europe. Spain is again leading the way here. In February 2020, the world's largest PPA contract in the solar sector to date was signed between the Spanish energy provider Audax Renovables and the Irish company Welink Investment Holdings. The project concerns PV systems in Spain and Portugal with a total output of 708 MW.
PPAs can also be of interest to cooperatives. In March 2020, the energy supplier EWS Elektrizitätswerke Schönau eG signed a multi-year supply contract for solar power with the InnSalzach eG (EGIS) energy cooperative. The electricity is produced in the newly built EGIS solar park in Unterdietfurt in Lower Bavaria. The total output of the plant is just under 4.3 MW.
Inexpensive for traffic and Power-to-X
The importance of PV will also continue to increase in view of the global trend towards electrification and sector coupling, i.e. the use of solar power for heating and transport. The need for inexpensive solar power, for example to produce climate-friendly fuels for aircraft and ships, or chemicals with so-called Power-to-X technologies, is increasing rapidly. This opens up new opportunities, especially for large-scale countries with high levels of solar irradiation, such as Morocco or Chile.
Improve space efficiency and overcome space shortages
Due to technological innovations, it is also possible to continuously increase the PV efficiency and thus to generate more solar power on the available space. The trend here is “bifacial” PV modules, which also use the indirect light on the back, or half-cell modules, which are significantly more powerful thanks to two module halves connected in parallel.
In order to overcome the shortage of space in a number of regions, more and more floating solar parks are being built around the world. PV floating systems with a capacity of around two GW were installed worldwide at the end of 2019 - especially in Asia. But floating solar power systems on inland waters are also popular in Europe, for example in the Netherlands. The first pilot applications are now also available at sea, the aim being a combination with offshore wind turbines.
One of the highlights of Intersolar Europe in 2019 were "floating solar parks", so-called "floating PV" systems.
Photo: Solar Promotion
Intersolar Europe: the international stage
The bottom line: PV is developing dynamically and in a variety of ways. New players with innovations and business models are pushing into the industry and opening up new markets. As the world's leading trade fair for the solar industry, "Intersolar Europe" offers the right international stage for this. Here the leading suppliers, manufacturers and dealers as well as start-ups of the solar industry meet international investors, project developers, system integrators and installers to present the global trends. The next Intersolar Europe will take place in Munich from June 9th to 11th, 2021.
Horst Dufner, head of the innovation platform "The smarter E Europe", Solar Promotion GmbH
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