"Electricity from Photovoltaic Power Plants without Feed in Tariff"

Project Vallis Solaris " In the Region … for the Region"

Full Integrated "Eco-industrial Cluster" for Development, Production

and Application of PV-Power in Croatia

Prof. Dr. Volker Wittwer

Fraunhofer Institute for Solar Energy Systems ISE, Freiburg

JRC Annual Event on the Scientific Support to the Danube Strategy / Ulm, 27.10.2015

Vallis Solaris ltd., Zagreb / Co-owner:Fraunhofer-Gesellschaft, München

The Fraunhofer-Gesellschaft undertakes appliedresearch of direct use to private and publicentities and of wide benefit to society as a whole.

● Customers:

− Industry− Service sector− Public administration

● Facts and Figures at a Glance:

− 67 Fraunhofer Institutes in Germany− at 40 different locations− 23ʹ000 employees− € 2.0 billion annual research budget− Roughly 2/3 of this sum is generated through

contract research on behalf of industry andpublicly funded research projects.

− Research centers and representative offices in Europe, USA, Asia and in the Middle East

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FRAUNHOFER GESELLSCHAFT MÜNCHEN:Institute for Solar Energy Systeme ISE Freiburg

Fraunhofer ISE develops systems, components, materials, processes for the following business areas:

■ Energy efficient buildings / technical building comp.

■ Applied optics and functional surfaces

■ Solar thermal technology

■ Silicon photovoltaics

■ Alternative photovoltaic technologies

■ Renewable power supply

■ Hydrogen technology

Fraunhofer ISE is the largest solar energy research institute in Europe■ Budget: 86.7 Mio EUR (2013)

■ Staff: 1.300 (2013)

■ Founded: 1981

Focus of R&D activities at Fraunhofer ISE: ■ Investigation of scientific and technological

fundamentals for solar energy applications

■ Development of production technology

■ Construction of demonstration systems

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R & D / System EngineeringLeadership

FRAUNHOFER ISE

SOLAR GLASSPRODUCTION

SOLAR SILICONPRODUCTION

(Mg-Si /Umg-Si 4N)

INGOTS /WAFFER /CELLS /

MODULES

PRODUCTION

INVERTERPRODUCTION

PHOTOVOLTAICPOWER PLANTS

STORAGECAPACITY

VALLIS SOLARISInitial Capital, Project Development,

Financial Structuring, Market

*) Full Integrated "Eco-industrial Cluster" for Deve lopment, Production and Application of PV-Power:

• total investment in Production Facilities / cumulated (2016-2021) app. EUR 700 m (CROATIA)

• total investment in PW Power Plants / cumulated (2018-2057) app. EUR 2,600 m (CROATIA)

• total workplaces app. 2,500 – 3,000 (CROATIA)

ELECTRICITYQUARTZSAND

Electricity from Photovoltaic (PV) Power Plants without Feed in Tariff

PROJECT VALLIS SOLARIS* - FROM SAND TO ELECTRICTY:

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Job Creation from PV Manufacturing & PV Power Plant Installation

Source: ISE Fraunhofer, Solar Summit , Freiburg, 23. October 2013

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1. SHORT TERM GOALS:

• Integrated PV Modules Production

(Ingots/Wafers/Cells/Modules/Inverters/System components)

for Local Markets and Export

• PV-Power Plants (Electricity for Local Market)

• REEE - Technology Center

(Transfer of knowledge, capacity building and initial development of Green Industry, the energy system transformation, flexibilization of production and use of electricity & heat , stationary batteries, optimization of the Croatian future energy system based on hourly modeling, …)

2. MIDDLE TERM GOALS:

• Storage capacity (Pumped Storage Hydro Plants, Stationary Batteries, Power-to-Gas, …), Solar Glass Production, Solar Silicon Production

• Physical infrastructures / Grids

• PV-Electricity Export

PROJECT GOALS:

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Why Umg-Silicon (Upgraded metallurgical silicon)?Silicor Si Purification Process vs. Conventional Siemens

Source: Fraunhofer ISE Freiburg

High Quality, with significant cost advantage

Item Umg-Si(Silicor)

Conventional-Si(Siemens)

Improvement Factor

Module Reliability/Quality 25 years / 80%Passes all standards

25 years / 80% =

Cell Performance 17.0% 17.0% =

Environmental Impact Benign, low temp HazardousMust be remote

++

Energy Requirements < 25kWh/kg 110kWh/kg 1/4th

Construction Time 11 months 2 .5 – 3.5 years 1/4th

Construction Costs $36 million $115 million 1/3th

Plant footprint per 1000MT/yr 5000m² 49,300m² 1/10th

Energie-PayBack <1.0 years 1.5 years 2/3

Advantages are especially relevant when PV market enters next phase:o 2014: 45 GW Market (with overcapacity)o Medium term: 100 GW Market (capacity utilization)

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Silicon Wafers Solar Cells Modules Systems

Sun Sand Electricity

Ingots

Since the last 5 years, the institute ISE with support of the Fraunhofer Society and of theFederal Ministry for Environment and Nuclear Security BMU has invested over € 20mio intothe realisation of new and unique PV-technologies and production research in the domain of"UMG-Si”.

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UPGRADED METALLURGICAL SILICON (UMG-Si):Activities at Fraunhofer ISE / Cooperation with Vallis Solaris Company

Technology routes for Vallis Solaris:Standard-Technology and Technology-Innovations

*) Source: Fraunhofer ISE Freiburg

Slight increase complexity / Falling costs

(1) Poly-Si, market price 10/2010(2) Umg-Si, offer price 12/2012(3) Umg-Si, estimated valuesF

eeds

tock

-pric

e / P

urity

falls

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Why Umg-Silicon ?Status on production from India modules per 14.02.2013*

*) Source: Elkem Solar / ESS™ module performance considerations / 15.02.2013

Total productio so farESS™ modules (Umg-Si) : 2046.14 kWh (+3.0%)**Poly modules: 1985.78 kWh

**) The higher total production of the ESS™ modules comes from an increased performance at high solar irradiation

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Levelized Cost of Electricity (LCOE)**:

Through further project development the data will be subject to change.

Source: Fraunhofer Institute for Solar Energy Systems ISE, Project "Vallis Solaris" – Indicative Business Assessment (500 MW Integrated Ingot/Wafer/Cell/Module Factory in Croatia), 21.04.2015

*) German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (2012), Langfristszenarien und Strategien für den Ausbau der erneuerbaren Energien in Deutschland bei Berücksichtigung der Entwicklung in Europa und global, J. Nitsch et al., 2012.

**) The cost of electricity (typically cents/kWh, Euro/kWh, Euro or $/MWh) generated by different sources is a calculation of the cost of generating electricity at the point of connection to a load or electricity grid. It includes the initial capital, discount rate, as well as the costs of continuous operation, fuel, and maintenance. This type of calculation assists policy makers, researchers and others to guide discussions and decision making.

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Learning-curve based predictions of the LCOE of renewable energy technologies andconventional power plants in Germany by 2030 versus Vallis Solaris concept in Croatia

Through further project development the data will be subject to change.

Source: Fraunhofer ISE

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*) Joint Venture Company (Vallis Solaris – Croatian Utilities)

1. Initial Capital and Project development (building and operating permit); 2. Land

3. Power Purchase Agreement with Croatian Utilities; 4. Sales on Croatian Pension Funds, …

(after 25 years transfer of the PV Power Plants to the Croatian Utilities)

PUBLIC PRIVATE PARTNERSHIP – BOOT Model (build-own-op erate-transfer)

VALLIS SOLARIS Ltd. *

(PV Power Plants - Development)

Republic of Croatia,Municipalities

Croatian Utilities

PHOTOVOLTAIC – POWER PLANTS(SPV 1, 2, 3, …)

1 2

3

Croatian Pension Funds,Croatian Utilities,Other investors

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PV POWER PLANTS IN CROATIA:Development Structure Draft

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STATEOF

CROATIA

CROATIAN RENEWABLEENERGY MARKET

CROATIANPENSION FUNDS

(Croatian Citizens)

CROATIAN MUNICIPALITIES

CROATIANFINANCIALMARKET

CROATIAN SUPPLIERS -INDUSTRY

PROJECT VALLIS SOLARIS IN CROATIA -SYNERGIES FOR ALL PROJECT PARTNERS

VALLIS SOLARISHOLDING - CROATIA

(Job Creation from PV Manufacturing & PV Power Plant Installation)

FRAUNHOFERPROJECT CENTER –COOPERATION WITH

CROATIAN UNIVERSITIES(Transfer of knowledge)

In a wider sense the State of Croatia will benefit by the development of green industry, by the generation of green energy and by transfer of knowledge and technology. This will also reduce greenhouse gas emissions

and so will be beneficial regarding climate change.

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Project Vallis Solaris

POSSIBLY SYNERGIE

Mediterranean Solar Plan + Danube Strategy

MEDITERRANEAN SOLAR PLAN:Summary

� Developing renewable energies and improving the energy efficiency in theUfM* member states: Build 20 GW of extra production capacities of REbetween now and 2020

� 20-20-20 The objectives of the European Energy-Climate package for 2020:− reduction of 20-30 % of the CO2 emissions− reaching 20 % of RE (specific mandatory objectives for every member state).

� Renewable energy as an industrial catalyst

� Transfer of knowledge and capacity building

� Physical infrastructures: Grids

� Indicative criterias: regional impact, reproducibility, know-how transfer, demonstration effects, scaling up of potentials, positive impact on host country economy and employment;

� Vallis Solaris as possibly Pilot Project of Mediterranean Solar Plan-MSP, great acceptance by the Secretariat of Union for Mediterranean / letters from 13.12.2012 and 01.10.2013 / officially labelling procedure since 31.03.2015

*) UfM Member States: Austria , Algeria , Albania , Bosnia and Herzegovina , Belgium , Bulgaria, Croatia ,Cyprus , The Czech Republic , Denmark, Egypt , Estonia, Finland, France, Germany , Greece, Hungary , Italy , Israel , Jordan; Latvia , Lebanon; Lithuania , Luxemburg; Malta , Mauritania , Monaco , Montenegro, Morocco , The Palestinian Authority , The Netherlands , Poland, Portugal , Republic of Ireland , Romania , Slovakia , Slovenia , Spain , Syria , Sweden , Tunisia , The United Kingdom ,Turkey

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MEDITERRANEAN SOLAR PLAN:Project "Vallis Solaris" / locations – Synergy

1

2

3

4

1. Germany 2. Croatia 3. Turkey 4. Tunisia

Additional possibly location: 5. Morocco 6. Egypt

Synergy by Central Purchasing, Development of New Technologies (IP) with Industry and Research Institutes, International Project Development

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6

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Levelized Cost of Electricity (LCOE)**:

Through further project development the data will be subject to change.

Source: Fraunhofer Institute for Solar Energy Systems ISE, Project "Vallis Solaris" – Indicative Business Assessment (500 MW Integrated Ingot/Wafer/Cell/Module Factory in Croatia), 21.04.2015

*) German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (2012), Langfristszenarien und Strategien für den Ausbau der erneuerbaren Energien in Deutschland bei Berücksichtigung der Entwicklung in Europa und global, J. Nitsch et al., 2012.

**) The cost of electricity (typically cents/kWh, Euro/kWh, Euro or $/MWh) generated by different sources is a calculation of the cost of generating electricity at the point of connection to a load or electricity grid. It includes the initial capital, discount rate, as well as the costs of continuous operation, fuel, and maintenance. This type of calculation assists policy makers, researchers and others to guide discussions and decision making.

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Vallis Solaris Productions(Croatia, Turkey*, Tunisia*, Egypt*…)

Vallis Solaris Services(location / to be defined)

Full Integrated Production:

� Umg-Si� Solar Glass� Ingots� Wafers� Modules� Inverters� System components� Storage systems

(stationary batteries, gas to power…)

� Central Purchasing

� Development of New Technologies (IP) with Industry and Research Institutes

� International Project Development

VALLIS SOLARISHOLDING

SYNERGIE

*) Negotiations are in process

Vallis Solaris – Mediterranean Solar Plan:Increasing of Productivity through Cooperation / Structure Draft

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PROJECT VALLIS SOLARIS -SYNERGIES FOR ALL PROJECT PARTNERS

• Creation and securing of IP and high-tech working places in all supporting countries.

• Regional supply of cost-effective PV modules for solar power generation / electricity from renewables.

• Additional source of income for towns and communities on the basis of the PPP models for Investment in PV Power Plants:

- by contribution/cumulated (2018-2057) app. EUR 134 m, Ø p.a. EUR 3.4 m* (Croatia)

- by land rent/cumulated (2018-2057) app. EUR 174 m, Ø p.a. EUR 4.5 m* (Croatia)*) Source: Fraunhofer Institute for Solar Energy Systems ISE, Project "Vallis Solaris" – Indicative Business Assessment Vallis Solaris PV Power Plants in Croatia, 21.04.2015

• New Financial Product for Regional Stock-Exchanges (PV Power Plants- suitable for Pension Funds, Local Utilities and other national and international investors)

• Mutually beneficial partnerships between businesses and R&D institutions from all Vallis Solaris supporting countries.

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