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What a difference a year (in PV) makes

What a difference a year (in PV) makes
Issue Time:2018-12-24
Dire warnings about the state of our planet characterized 2018, with a plethora of reports released calling for climate action. The solar PV, and storage, industries have a leading role to play in the required energy transition: this bold quest was taken on by many over the last year, with technological progress and expansion seen upstream and downstream, and in policy, globally. Like last year, China took all by surprise, this time, however, in the form of its abrupt 31/5 policy change, the effects of which are still being felt in almost every corner of every market. 

While there were a number of PV firsts this year, the biggest story of 2018, without a doubt, was that of China’s very abrupt PV policy about turn at the end of May (hence the term: 31/5), which led to the immediate brakes being applied to its PV industry charge. Effectively, it contained three major elements: (i) halting the development of ground-mounted solar plants in 2018; (ii) reducing the quota of distributed PV projects to 10 GW in 2018; and (iii) a universal lowering of FITs by CNY 0.05/kWh (US$0.0072).

Given China’s clout, this not only affected the domestic manufacturing and project industry, but it also had global consequences, with module prices plummeting, overcapacity building, prolonged project delays by developers waiting for costs to go down further, and predictions that new capacity additions would fall below those of 2017.

However, it was not all doom and gloom, and after the aftershocks had passed, there was talk of market rebounds and stronger than projected activity.

Commenting, Jenny Chase, Head of Solar Analysis at BloombergNEF tells pv magazine, “In August, we thought that the Chinese installation in 2018 would drop to 36GW (from 53GW in 2017), because the Chinese government passed a law on 1 June setting a deadline of 30 June for projects to be commissioned under existing subsidies.”

She continues, “Turns out 7GW of projects missed the deadline and commissioned in July. Our China estimate for 2018 is back to 43GW, so total world build in 2018 is likely to be around 109GW … Price-wise, we currently see modules at 23-26 US cents per W on the global market.”

MENA means business

The year 2018 got off to an innocent start, with news of tenders in the MENA region attracting the biggest attention. On January 5, Saudi Arabia announced the shortlist for its first, 300 MW, solar tender. It dismissed a bid submitted by UAE-based Masdar and French energy giant, EDF, which if accepted, would have become the world’s cheapest offer for solar energy. That accolade still lies with a consortium formed by Trina Solar and Mitsui for a Mexican PV project, awarded in December 2017, which will sell solar power at $19.7/MWh. The country’s Renewable Energy Project Development Office additionally announced it would launch tenders for seven large-scale solar power projects totaling 3.3 GW this year. No further details were provided, however.

Oman also launched a 500 MW tender for the country’s first large utility-scale PV independent power project (IPP), which is set to be built in Ibri, around 300 km west from Muscat, at an estimated cost of around $500 million.

Across the seas, Tesla was busy as a bee, working on the production of its long-awaited Solar Roof tiles – a product it believes will revolutionize the rooftop solar industry – in New York, the United States. This, however, was not the most interesting news to come out of the company in 2018, however …

U.S. President Trump, meanwhile, opened the door for specific products and nations to be excluded from the contentious Section 201 tariffs. While this provided some respite in the gritty trade war, there were other controversial tariff decisions waiting in the wings.

Ramping up

Germany’s auction for large-scale solar attracted bids below €0.04/kWh for the first time. Overall, the German Federal Network Agency said prices reached an average value of €0.0433/kWh, while the lowest bid hit €0.0386/kWh and the highest, €0.0459/kWh. A total of 79 bids for a combined capacity of 546 MW were pre-selected. Successful bidders had until March 1 to deposit the second project’s guarantee.

Marking a resurgence in the European PV market, SolarPower Europe estimated that the continent installed 8.61 GW of new PV capacity in 2017 – a 28% increase on the previous year. Leading the charge was Turkey, which installed 1.79 GW of new capacity. For EU Member States – a collection of 28 nations that does not include Turkey – growth was more modest, with 6.03 GW installed, against 5.69 GW in 2016. “We are expecting strong growth in the coming years as several EU member states are choosing solar to meet their national binding 2020 renewables targets,” said Michael Schmela, executive advisor and head of market intelligence at SolarPower Europe.

On the tracker front, according to GTM Research, Latin America overtook the United States for the first time, to become the leading market in terms of shipments. This shift was due to the Section 201 solar tariff uncertainty in the United States in 2017, which “significantly stunted” the market.

Marking another trend – floating solar – a Dutch consortium announced plans for the world’s first “off-shore” floating PV plant, in the North Sea. It said the pilot project will be developed over the next three years and will utilize standard PV modules. It expects the array to have a 15% higher yield compared to traditional installations.

Unbelievable

March saw the insolvency announcements of two big names in German PV: Schletter GmbH and SolarWorld Industries GmbH. The former announced insolvency under self administration, while for the latter, it was its second insolvency within a period of 12 months.

South Africa’s solar saga was also in full swing this month. It finally seemed as if an end were in sight for the PPA drama, which had been dragging on since 2015. On March 9, Newly appointed Energy Minister, Jeff Radebe announced that all 27 outstanding PPAs would be signed on March 13. However, a court interdict was sought by two unions at the eleventh hour to prevent Eskom from concluding the agreements. While the government said an interdict was not granted, and that Eskom was free to sign the PPAs, the unions were nevertheless successful in their bid, with the matter being pushed back to March 27. Finally, common sense prevailed, with the interdict being struck from the court on March 29. The PPAs were not, however, signed … 

Reinforcing Europe’s solar resurgence, fallen solar star, Italy, appeared to rise from the ashes, with news that it will launch a series of mixed wind-solar auctions totaling 4.8 GW as part of a new incentive scheme for renewable energy for the period 2018-2020.

In Saudi Arabia, an incredible memorandum of understanding was signed between the Crown Prince of Saudi Arabia and Japan-based SoftBank founder Masayoshi Son, to establish a 200 GW PV energy project by 2030. How likely it is to materialize, and what will be done with the power, if it is realized, however, remains to be seen.

Following on from its bold plans unveiled last December to install 30 GW of solar between 2020 and 2035, French energy giant EDF said it intends to become a market leader for storage in Europe. The goal is to deploy around 10 GW of storage capacity by 2035, for an investment of around €8 billion..

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