Dr Tobias Bischof-NiemzChief Engineer

Electricity from Sunlight: An overview of Photovoltaic growth in South AfricaPresentation at the light-based technologies innovation forum

CSIR Energy Centre

Johannesburg, 14 March 2016

Dr Kittessa RoroCell: +27 825495131Email: KRoro@csir.co.za

1

Dr Kittessa RoroSenior Researcher: PV technologies

Professional Experience

• Jan 2015 – today: Senior researcher in the Integrated Energy centre

within CSIR responsible for the PV technology research and growing

CSIR’s PV technology domain experience and knowledge

• April 2013 – Dec 2014: Senior Project co-ordinator, responsible to lead the

development of the Solar Energy Technology Research, Development and

Innovation Roadmap for South Africa, a study commissioned by the department

of Science & Technology

• Oct 2009 – March 2013: Postdoctoral researcher at the CSIR-National Laser Centre

responsible for the development of selective solar absorber coatings

• Jan - Sept 2009: Post doctoral Fellow at University of Pretoria

• July - Dec 2008: Postdoc at Nelson Mandela Metropolitan University

Education

• PhD in 2008 in Physics from Nelson Mandela Metropolitan University

• MSc in 2004 in Physics from University of Johannesburg

• B.Sc (Hons) in 2002 from former Rand Afrikaans University, South Africa

• BSc in 1999 from Addis Ababa University, Ethiopia

2

Agenda

Solar PV technology

The solar PV growth story – A decade of dramatic change

South African PV market overview

CSIR’s world class PV testing facility

3

The solar resource is both enormous and very well distributedOne of the few low carbon technologies capable of meeting a substantial portion of world wide electricity demand

Sources: SolarGIS, CSIR EC analysis

With today’s technology, total South African electricity demand could bemet by solar covering 0.16% of the contiguous RSA.

4

Two main solar power technologies

Solar Photovoltaic (PV)

Concentrated Solar Power (CSP)

PV dominates contemporary solar electricity generation and it will continue to do so for the foreseeable future

Mature: 97% of global solar capacity (~200 GW)

Modular: efficiency does not depend on scale

Output responds immediately to changes in insolation

Less mature, more expensive

Capital costs fall with scale

Needs clear skies

Dispatchable when thermal storage is added

5

In a grid connected solar PV power plant, the most distinctive technology items are module and inverters

The key parts of solar energy generationsystem are:

o PV modules – to collect sunlighto Inverter – to transfer DC to Aco Support structure

The system component, excluding themodule are referred to as the balance ofsystem (BOS) component

Source: Own analysis

6

Agenda

Solar PV technology

The solar PV growth story – A decade of dramatic change

South African PV market overview

CSIR’s world class PV testing facility

7

In 2015, 59 GW of solar PV were newly installed globally

1

20032001

1

2002

00

2000

0

2016E2004

1

2005

2

2006

3

2007

7

2008

7

2009

17

2010

30

2011

31

Total RSA

power system

(approx. 45 GW)

2012

38

69

2013 2015

42

59

2014

PV

Sources: International Energy Outlook of the EIA; SPE; HIS, CSIR analysis

Annual new global capacity in GW/yr

Subsidy-driven growth triggered significant technology improvements and cost reductions

ConsequenceSolar PV is now cost competitive to alternative new-build options

Global solar PV installations reached 59 GW in 2015, a 35% increase over 2014, while growth in 2016 is expected to top a further 17%

8

The past five years has borne witness to remarkable growth in the solar PV generation capacityFor the first time more PV capacity added than wind, 1/3 of RE installations were solar

9

20072006

7

2004

4

2005

5

2003

32

20022001

21

2000

139

2012 2013

178

70

40

2009

16

2010

101

2011 2015

237

20142008

23

PV

Cumulative Global installedSolar PV capacity GW

Total global installed solar PV capacity is approaching 250 GW, a 15X expansion since 2008

Source: snapshot of Global PV 1992-2014 (IEA-PVPS), HIS, own analysis

9

Solar Power until today mainly driven by US, Europe, China and JapanGlobally installed capacities for solar PV and CSP end of 2015

1.9

32

26

USA

Sources: GWEC; EPIA; CSP Today; IHS, CSIR analysis

Europe0

1

43

44

China

0.32.5

Middle Eastand Africa

7 0

Rest of Asia Pacific02

Americasw/o USA/Canada

Total RSA power

system (45 GW)

CSP

4.8

Solar PV

306

237

69

Total World

37

0

Japan4,0

0.2

6,72,7

India

05

Australia

South Africa is rapidly picking up with 4.0/2.8/1.1 GW new

capacity by 2018-20

Operational capacities in GW

end of 2015

104

2.32 0

Canada

Key markets: China, USA, Japan, Germany & Italy

10

Dramatically falling cost of PV modules is a key factor in the recent growth of solar PV installations

Source: http://www.photovoltaik-guide.de/pv-preisindex

The focus of solar economics is shifting to the balance of system (BOS)!

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Jan-09 Dec-09 Dec-10 Nov-11 Nov-12 Oct-13 Oct-14

PV

Mo

du

le P

rice

(€

/kW

p)

PV price Index

Dec 2014, 1.24 €

Module PriceDrop ~ 70 %

11

Agenda

Solar PV technology

The solar PV growth story – A decade of dramatic change

South African PV market overview

CSIR’s world class PV testing facility

12

Integrated Resource Plan 2010 (IRP 2010):Plan of the power generation mix for South Africa until 2030

Installed capacity Energy mix

CO2

intensity

Carbon free TWh'sin 2030(34%)

Re-newableTWh's in 2030(14%)

0% 9%Share new

renewables

90

80

70

60

50

40

30

20

10

0

Total installed net capacity in GW

Coal

Gas

Peaking

Nuclear

Hydro

Wind

CSP

Solar PV

2030

85.7

41.1

2.4

7.3

11.4

4.8

9.2

1.2

8.4

2025202020152010

42.2

35.9

2.4 1.82.1

0

50

100

150

200

250

300

350

400

450

Electricity suppliedin TWh per year

1%

20%

5%5%1%3%

2025202020152010

255

Coal

Gas

Peaking

Nuclear

Hydro

Wind

CSP

Solar PV

2030

436

65%

90%

5%5%

Implementation of the IRP is done by Department of Energy through competitive tenders (“REIPPPP” for renewables)

Note: hydro includes imports from Cahora BassaSources: Integrated Resource Plan 2010, as promulgated in 2011; CSIR Energy Centre analysis

13

Very high solar irradiation in South Africa is a competitive advantage

Yearly total of global irradiation on horizontal surface

Average for Germany

Average for South Africa (2x)

Solar irradiation in South Africa ...... as compared to Germany, where solar PV is now

close to cost competitiveness with new coal and gas

Source: Joint Research Center of the European Commission, PVGIS, BCG analysis

14

More sun makes PV in RSA almost 50% cheaper than in Germany

52%

100%

PV achievable tariff in South Africa

Feed-in Tariff in Germany

Higher cost of capital Tariff linked to CPI Higher solar irradiation

20158EUR-ct/kWh

Achievable 201564 ZAR-ct/kWh

(52% * 8 EUR-ct/kWh @ 16.5 ZAR/EUR)

Actual 2015~70 ZAR-ct/kWh

GER: 5%RSA: 12%

GER: FIT constantRSA: tariff linked to CPI

GER: 900-1 000 kWh/kWp/yrRSA: 1 800-2 000 kWh/kWp/yr

15

Two PV markets in South Africa

1: Department of Energy’s competitive tender space (REIPPPP) large projects

2: Self-generation, embedded generators small projects

Source: CSIR analysis

IRP does not specifically plan for embedded PV, but mentions it as a mean to achieve the planned capacity

16

Consequence of cost reduction:PV is cost-efficient fuel-savers for CCGTs already today

16

3.1

1.1

0.30.8

0.30.5

0.6

0.6

0.70.80.4

2.5

0.50.7

0.1

R/kWh(May-2015-R)

Diesel (OCGT)

3.8

0.1

Gas (OCGT)

1.9

0.1

Mid-merit Coal

1.1

0.2

Gas (CCGT)

1.00.2

Nuclear

1.0

0.1 0.1

Baseload Coal

0.8

0.1

CSP

3.1

Wind

0.6

0.1

PV

0.8

0.1

Fuel

Capital

Fixed O&M

Note: Changing full-load hours for conventionals drastically changes the fixed cost components per kWh (lower full-load hours higher capital costs and fixed O&M costs per MWh); Assumptions: average efficiency for CCGT = 50%, OCGT = 35%; coal = 37%; nuclear = 33%; IRP cost from Jan 2012 escalated with CPI to May 2015; assumed EPC CAPEX inflated by 10% to convert EPC/LCOE into tariff; CSP: 50% annual load factor and full utilisation of the five peak-tariff hours per day assumed to calculate weighted average tariff from base and peak tariffSources: IRP Update; REIPPPP outcomes; StatsSA for CPI; Eskom financial reports on coal/diesel fuel cost; CSIR analysis

Renewables Conventionals

50%92% 50% 10%Assumed load factor

Fuel cost @ 92 R/GJ

Fuel cost @ 110 R/GJ

10%

Lifetime cost per energy unit

85%

17

Coal/gas new-build options

Actual results: PV in South Africa are cost competitive todayFirst four bid windows’ results of Department of Energy’s RE IPP Procurement Programme (REIPPPP)

0.8

1.1

2.1

3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Average tariffin R/kWh

(May-2015-R)

Bid Window 4(18 Aug 2014)

Bid Window 3(19 Aug 2013)

Bid Window 2(5 Mar 2012)

Bid Window 1(4 Nov 2011)

PV

Bid sub-missiondates

Notes: For CSP Bid Window 3, the weighted average of base and peak tariff is indicated, assuming 50% annual load factorSources: StatsSA on CPI; Department of Energy’s publications on results of first four bid windows http://www.energy.gov.za/IPP/List-of-IPP-Preferred-Bidders-Window-three-04Nov2013.pdf; http://www.energy.gov.za/IPP/Renewables_IPP_ProcurementProgram_WindowTwoAnnouncement_21May2012.pptx; http://www.ipprenewables.co.za/gong/widget/file/download/id/279; CSIR analysis

18

Coal/gas new-build options

PV makes sense across South Africa: CSIR’s first 560 kW PV system in Pretoria can compete with 75 000 kW PV systems in the Northern Cape Four bid windows’ results of Department of Energy’s IPP Procurement Programme and CSIR’s first own PV

1.1

2.1

3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Average tariffin R/kWh

(May-2015-R)

Bid Window 3(19 Aug 2013)

0.82

Bid Window 4(18 August 2014)

CSIR PV(Dec 2014)

Bid Window 1(4 Nov 2011)

Bid Window 2(5 Mar 2012)

PV

Bid sub-missiondates

Notes: For CSP Bid Window 3, the weighted average of base and peak tariff is indicated, assuming 50% annual load factorSources: StatsSA on CPI; Department of Energy’s publications on results of first four bid windows http://www.energy.gov.za/IPP/List-of-IPP-Preferred-Bidders-Window-three-04Nov2013.pdf; http://www.energy.gov.za/IPP/Renewables_IPP_ProcurementProgram_WindowTwoAnnouncement_21May2012.pptx; http://www.ipprenewables.co.za/gong/widget/file/download/id/279; CSIR analysis

Lifetime-cost-focused financial evaluation of

bids that can be replicated for other

public entities

CSIR0.83

75 000 kW per project

140 000 kW per project

558 kW project

19

At present, more than 1 000 MW of PV are operational in South AfricaPipeline of PV projects in the REIPPPP for large, utility-scale PV

398

417

626

2 291

435

415

Operational

1 043

Under constructionAwaiting for financial closure

813

Total procured

Total procured

BW1

BW2

BW3

BW4

BW4-additional

PV capacities in MWThis represents almost

the entire South African PV fleet at present; all

installed in 2014

Source:Department of Energy (DoE) 2015. Department of Energy, Renewable energy IPP procurement programme: bid window 4 preferred bidders announcement, 16 April 2015 Pretoria. South African Government;Eberhard, Anton, Kolker, Joel and Leigland, James 2014. South Africa’s renewable energy IPP procurement programme: success factors and lessons. Available from: <http://www.gsb.uct.ac.za/files/PPIAFReport.pdf, GreenCape, CSIR EC analysis

20

The development of small scale projects is impressiveThe most extensive list of privately owned installed and commissioned PV systems in SA

36.5 MW

Source: http://pqrs.co.za

Capacities in MWup to April 2015

21

It is expected that Rooftop PV will grow significantly in South Africa

9

22

2014

1

1 0

55

2050

25

30

2030

30

Solar PV capacities end of year in GW

Rooftop

Large-scale

Source: Integrated resource plan for electricity (IRP) 2010-2030, update report

22

Wind and PV stand for 2% of the electricity sent out from Jan-Jun 2015Actual energy captured in wholesale market (i.e. without self-consumed energy of embedded plants)

TWh

Hydro

0.5

IPPs (not wind/PV)

1.7

Nuclear

5.2

Sent Out

114.1

PV

1.1

Wind

0.9

OCGTs(Diesel)

3.3

Coal

99.9

Pumped Storage

1.5

Sources: Eskom; CSIR Energy Centre analysis

23

Agenda

Solar PV technology

The solar PV growth story – A decade of dramatic change

South African PV market overview

CSIR’s world class PV testing facility

24

PV testing facility for CSIR to enhance its ability to support development of PV as well as PV system design and optimisation in South Africa and globally

February SeptemberMarch April May June July August

Project Initiation

Project Planning

Project executionProject closure

Project registration

Source: CSIR EC

Aim: to establish a world-class facility in CSIR for testing PV modules and systems under South African environmental conditions

Project charter

Detailed project plan

Drafting RFP

Site securing

Evaluating RFP

Awarding contract

Construction starts

Construction completed

Facility commissioned

Facility handover

25

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

12 000

13 000

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000

Glo

bal

Irra

dia

tio

n in

Mo

du

le P

lan

e

[Wh

/m2/d

]

Global Horizontal Irradiation [Wh/m2/d]

Actual results of CSIR plant: single axis tracking array increases the solar irradiation in module plane by 20% on average over the GHI

20 % Single axis, ground mounted PV system

558 kWp

Commissioned at the beginning of October 2015

26

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

12 000

13 000

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000

Glo

bal

Irra

dia

tio

n in

Mo

du

le P

lan

e

[Wh

/m2/d

]

Global Horizontal Irradiation [Wh/m2/d]

Actual results of CSIR plant: single axis tracking array increases the solar irradiation in module plane by 20% on average over the GHI

20 %I

II

III

Single axis, ground mounted PV system

558 kWp

Commissioned at the beginning of October 2015

27

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

11 000

12 000

13 000

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000

Glo

bal

Irra

dia

tio

n in

Mo

du

le P

lan

e

[Wh

/m2/d

]

Global Horizontal Irradiation [Wh/m2/d]

Actual results of CSIR plant: single axis tracking array increases the solar irradiation in module plane by 20% on average over the GHI

20 %I

II

III

Tracking the astronomical movement of the sun does not always give the optimal tracking strategy!

Single axis, ground mounted PV system

558 kWp

Commissioned at the beginning of October 2015

28

Thank you!

29

Back-up slides

30

Dramatically falling cost of PV modules is a key factor in the recent growth of solar PV installations

Source: MIT Analysis, National Renewable Energy Laboratory, Lawrence Berkeley National Laboratory, U.S. Department of Energy, Solar Energy Industry Association, Photon Consulting LLC 6

The focus of solar economics is shifting to the balance of system (BOS)!

31

Two solar power principles are Photovoltaics (PV) & thermal Concentrated Solar Power (CSP)

Solar power-generation technologies

Line focusing Point focusing

ConcentratedSolar Power

Fresnel Tower Dish stirlingParabolic

troughCrystalline Organic PVConcentrated

PV (CPV)Thin film

PhotovoltaicsPV CSP

Market2

(share)2015

~ 53 GW ~ 254 MW~ 5 GW R&D ~ 600 MW < 10 MW100 MW 0 MW

1. Globally installed capacity end of 2014

2. Global new installations in 2014

Source: BCG 2011; BNEF; IHS, update by CSIR

~ 90% < 1%~ 8% R&D < 2% < 1%< 1% < 1%

TOTAL1

237 GWTOTAL1

4.5 GW

Photovoltaics is expected to be the dominant solar technology now and in the future