Strictly private and confidential
Algeria Energy Transition
Alternative Energies – Benchmark, differential and local content
Mouloud Bakli – Tell Group
November 2016
Algeria Solar Energy – November 2016 2
Sustained growth of the PV globally
The Algerian renewable opportunity
Zoom on PV manufacturing value chain
Recommendation and possible options for differentiation
Algeria Solar Energy – November 2016 3
A PLANE CAN FLY WITH SOLAR PANELS
MOST IMPORTANT NEWS OF YEAR? SOLAR IMPULSE JUST FINISHED WORLD TOUR, IT WAS IN ALGERIA JULY 2016
Algeria Solar Energy – November 2016 4
> 256 GWpCumulative PV
installation by 2015
> 15% CAGR of annual
installation 2014-20
-18% 2015 solar PV
electricity cost ($/MWh)
One nuclear reactor ~ 0.5~1 GW
120 country
reached parity
Source: BNEF, WBL-EL
Best
10%
Low
7 8
18
29 31
38
45
56
6570
79
88
100
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015 2016f 2017f 2018f 2019f 2020f
57 GW in 2015, 64 GW in 2016f
FASTEST RENEWABLE ENERGY GROWTH
SUSTAINED AND CONFIRMED GROWTH IN END MARKET FASTEST RENEWABLE ENERGY GROWTH
PV GLOBAL INSTALLATION
Algeria Solar Energy – November 2016 5
Sustained growth of the PV globally
The Algerian renewable opportunity
Zoom on PV manufacturing value chain
Recommendation and possible options for differentiation
Algeria Solar Energy – November 2016 6
30
35
40
45
50
55
60
65
70
75
80
2013e 2014e 2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f
Forecasted Electric Consumption (2013-2024, en TWh)
Intraday Power Consumption (in MWh)
Source: Industry, Tell Group
ALGERIA ELECTRIC CONSUMPTION
A GROWING DEMANDE OF 10 THW EVERY 4 YEARS
Electric consumption in Algeria is expected to
exceed the threshold of 50 TWh in 2017 after
overpassing the of 40 TWh bar in 2013 which
represents an increase of almost 20% in 4 years.
However, the electric consumption per capita is still
at 1260 KWh per year where the worldwide
average is at 3100 kWh
Supported by the household growing demand,
more precisely the demand on white goods’
utilization, the electric consumption will continue
to grow and is expected to reach 60 TWh by 2020
and 70 TWh by 2023
The fast industrial development mixed with
increasing production capacity of the main
strategic sectors (Oil and Gas, metallurgy, heavy
industries,,) risk to further pressure Sonelgaz’s
capacity to provide the needed electricity
The weather conditions have a clear impact on the
electric consumption demonstrating high demand
pics in the summer days
Algeria Solar Energy – November 2016 7
Sonelgaz electricity production reached to 64.7 TWh in
2015, up 6.9% compared to 2014
The main power generation sources were are thermal
centers and steam turbines fueled by gas
Thermal centers absorb 49% of the natural gas transit in
Algeria. In 2015, thermal centers consumed a volume of
17bn m3 in gas
Electric production structure (Sonelgaz, 2015)
Gas turbines
56%Steam
turbines
14%
others
30%
Natural Gas transit (2015)Evolution of production (interconnected north network 1997-2025, in GWh)
1997 20252020201520102000
150 000
0
100 000
50 000
Low Scenario
111 504 GWh
High Scenario
146 843 GWh
1997
20 957 GWh
Source: Industry, Tell Group
ALGERIA’S ELECTRICITY GENERATION
CONVENTIONAL THERMAL ELECTRICITY DEPENDENCY
Natural Gas transit (2015)
Source: Industry, Tell Group
Source: Industry, Tell Group
Thermal Plants
49%
Public
distribution
30%
Sonatrach
clients
11%
Industrials
10%
Source: Industry, Tell Group
Algeria Solar Energy – November 2016 8
Algeria plans to generate 22GW of clean energy by 2030
Solar will be the largest source of clean energy production as it would account for 60% of the total 2030 targets
1st Phase (2015-2020) 2nd Phase (2021-2030)
Biomass 360 640
CSP 0 2000
Wind 500 4500
PV 5000 9575
0
5000
10000
15000
In M
W
4000
Solar
60%
Initial Renewable Energy Plan
Solar CSP
Solar PV
Wind
Biomass
13,5 GW
2 GW
5 GW
1 GW
2030 Targets
22 GW
ALGERIAN RNE PROGRAM 2030 SOLAR POWER TO PRODUCE 13.5GW OF ELECTRICITY
New Renewable Energy Program Phasing
Algeria Solar Energy – November 2016 9
AFRICA SOLAR ENERGY DEVELOPMENT
NO. 2 IN THE TOP 50 SOLAR PV PLANTS
Solar Energy Capacité: 343 MW
Djanet (illizi) 3 MW
Adrar (Adrar) 20 MW
Kaberten (Adrar)3 MW
(Tamanrasset) 13 MW
Tindouf9 MW
Aoulef (Adrar) 5 MW
Z.Kounta (Adrar) 6 MW
Timimoune (Adrar) 9 MW
Reggane (Adrar) 5 MW
In Salah (Tamanrasset) 5 MW
Ain Albel (Djelfa)20 MW
Telagh (Sidi-Bel-Abbes
12 MW
Sedrate Leghzel(Naama) 20 MW
Ain Skhouna (Saïda) 30 MW
El Khnag (Laghouat) 20 MW
Oued El Kebrit(Souk Ahras)
15 MW
Aïn Al Bel (Djelfa) 33 MW
Laghouat 40 MW
Oued El Ma (Batna) 2 MW
(El Bayadh) 23 MW
Aïn El Melh (M'sila) 20 MW
El Hedjira (Ouargla) 30 MW
1500 kWh/m²/y
1800 kWh/m²/y
2200 kWh/m²/y
2600 kWh/m²/y
Average solar energy of 5.70 kWh/m2/day
Solar potential of about 170,000 TWh/year
Algeria Solar Energy – November 2016 10
Sustained growth of the PV globally
The Algerian renewable opportunity
Zoom on PV manufacturing value chain
Recommendation and possible options for differentiation
Algeria Solar Energy – November 2016 11
SOLAR PV
VALUE CHAIN REVIEW AND CONTRIBUTIONM
od
ule
PV
WafersPolysilicon Cells Modules
Inst
alla
tio
n /
Bo
S
FeedstockBy-product
production Transformation Assembling
Technical
StudiesInvertersRacking /
MountingEPC
Civil
Engineering
Operations
Management
Development
IPP
Installations of solar equipment account for about 60% of the total value chain of the photovoltaic industry
Value Contribution
(% of equipment cost)
Sector
Sector
28% 19% 19% 34%
Algeria Solar Energy – November 2016 12
SOLAR PV VALUE CHAIN
ANALYSIS OF PV EQUIPMENT SEGMENTS
Elements Attractiveness
Polysilicon Highly capital and energy intensive. Oversupplied worldwide. Difficult to be competitive
Wafers Strong and attractive development potential (especially for type N& Low cost) but transfer of
technology or acquisition is required
Cells Medium potential unless high capacity developed to benefit from economies of scales.
Technological progress (particularly for the PV bifacial), differentiation opportunity
Modules Strong potential but this market is dependent on customs policies (panels imports) however
we can add Glass-Glass opportunity and Coating on glass for dust mitigation
Comments
Algeria Solar Energy – November 2016 13
Illustration Module cost breakdown
Source: Bloomberg, Tell group
Source: Electricity forum
PV Cellule
PV Module
PV Panel
It’s the last step to obtain a final
product called the “PV Module”, where
cells are assembled and electrically
connected
There are various types of modules,
depending on the final usage
The final product includes 60 - 70 cells, with peak power
of 250 to 330wc/module
Prices for modules have significantly decreased from
~$1/Wc in 2010 to less than $0.5/Wc in 2016
45 46 47 47 48 49
53
59 58 5760 60 59
57
Hanwha JA Solar Jinko CanadianSolar
Trina Renesola Yingli
Blended cost ASP
Module prices in USD/ W (2015)
Other material cost 35%
Cell Cost 65%
PV MODULES
SEGMENT REVIEW
Algeria Solar Energy – November 2016 14
SOLAR PV BARRIERS TO ENTRY
BOS AND MODULES ARE THE MOST ACCESSIBLE SEGMENTS
Module assembly
Technical
know-how
required
High
Low High
Low
Barriers to entry
bubbles size represents
capital intensity
Polysilicon
manufacturing
More difficult
markets to enter
Cells manufacturing
EPCIPP
Mounting structure
manufacturing
O&MComponents wholesale
Algeria Solar Energy – November 2016 15
2015 2020 2030
1st Phase
Installation of 4GW2nd Phase : Installation of 10.5GW
Mounting /
RackingOPC
Developmen
t IPP
O&MInvertersTechnical
Studies
PolysiliconWafersCellsModules
Development of equipment manufacturing industriesDevelopment of Modules andBoS activities
SOLAR PHOTOVOLTAIC DEVELOPMENT
TARGETS AND INDUSTRIAL OPPORTUNITIES
Algeria Solar Energy – November 2016 16
LOCAL CONTENT CASE STUDY AND BENCHMARKING
SOUTH AFRICA – LEADER OF SOLAR ENERGY IN THE CONTINENT
Round 1 Round 2 Round 3
Technology Threshold Target Threshold Target Threshold Target
Wind 25% 45% 25% 60% 40% 65%
Solar PV 35% 50% 35% 60% 45% 65%
Solar CSP (without storage) 35% 50% 35% 60% 45% 65%
Solar CSP (with storage) 25% 45% 25% 60% 40% 65%
Average local content percentage is calculated as follows: total local content / total tender value (net of exempted imported content)
Local content
definition
Requirements
threshold and
target
Local content targets as % of total tender value
Local content
calculation
Under RE IPPPP, local content is defined as “the total costs attributed to the project at the commercial operation date, excluding
finance charges, land and mobilisation fees of the operations contractor”
Total local content is calculated as follows:
(+) Total local products (goods, services and works)
(+) Manpower costs (only to the tenderer and not to the suppliers)
(+) Factory overheads
(+) Administration overheads
Algeria Solar Energy – November 2016 17
Sustained growth of the PV globally
The Algerian renewable opportunity
Zoom on PV manufacturing value chain
Recommendation and possible options for differentiation
Algeria Solar Energy – November 2016 18
COST
JOB
SAVINGS
Grid parity in 120 countries
Engine for growth: 40 jobs per MW
Further cost reduction: Bifacial, Coatings on glass (dust mitigation), Back side passivations…
+30% is realistic
Substantial savingOil&Gas Ener
15
2
3
4INNOVATION
LOCALCONTENTMANUF
KEY TAKE AWAY
Algeria Solar Energy – November 2016 19
ARC COATING ENGINEERING
• AntiRelective Arc on Glass
• Makes panel dust and water repelling
• Strongly hydrophobic
• + 3% Efficiency
• +5% Yield
• Tested by ENEL/3Sun
• Qualified by Yingli
SOLAR TECHNOLOGY OPTIONS
EXAMPLE OF 2 KEY DIFFERENTIATORS TO IMPROVE HARVESTING YIELD
BIFACIAL TECHNOLOGY
• Produces Energy from both sides
• < 15% Cost + at cell level
• =>+20-40% More Yield
• Chinese late on this option
• Leaders are US/European
Uncoated GlassEnki CleanARC® Coating
EDF –EN currently installing 90MW bifacial in Mexico
Algeria Solar Energy – November 2016 20
Higher power generation (10% to 35% more)
Broader peak energy generation during the day,
More installation options to optimize power gains
Lower module costs in Wp and lower system costs per kWh
Higher return of investment
Can use smaller land area
BI FACIAL TECHNOLOGY
CONVERTING LIGHT ENERGY LANDING ON BOTH SURFACES
Bifacial gain up to 30% in
the bifacial belt for vertical
E/W orientation
20% add-up gain due to
reduced soiling/sands on
vertical modules
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Algeria Solar Energy – November 2016 24
Criteria for Site Selection in Algeria Comments / Impact
Availability and Quality of solar radiation Amount of incident solar radiation and cloudiness kWh/m2 /day
Availability of vacant land Vacant land for its present as well as for its future development
Accessibility from national highways Transportation cost / Logistic
Distance from existing transmission line Distance from transmission lines to minimize losses
Variation in local climateSolar PV panels degrades with increasing temperatures, i.e. works best within 25C-45C. High wind velocity, extreme
temperatures, shadow on modules, dusting arrays... are to be avoided.
Use of nearby land Auxiliary facilities
Topography of site Flat or slightly south facing slopes
Geotechnical issues / nature of the landConsideration of groundwater resistivity, soil load bearing, pH levels, Old Salt lakes…) and seismic risk are important
criteria...(impact studies…)
Geotechnical political issues Site near sensitive military zones, and historical places should be avoided
Module soiling / dust managementEfficiency of plant could be reduced significantly if modules are soiled / The criteria should include dust particles from traffic,
building activity, agricultural activity or dust storms and module soiling from bird excreta.
Site identification map
ALGERIA SOLAR ENERGY OPTIMIZATION
SITE SELECTION TECHNOLOGY
Tell development partner