Docstoc

Microsoft PowerPoint - Feed-in Tariff Options v3

Document Sample
Microsoft PowerPoint - Feed-in Tariff Options v3 Powered By Docstoc
					                           Photovoltaics - Electricity from Sunlight




   Feed-in Tariff Options

  Muriel Watt & Juan Rivier

With thanks to BP Solar & Conergy
               Photovoltaics - Electricity from Sunlight




PV Market Trends
                                                                                                  Photovoltaics - Electricity from Sunlight




                          The Australian PV Industry

      60

      50

      40                                                                                                  Grid - Central
                                                                                                          Grid - Distributed
MWp




      30
                                                                                                          Off-grid Industrial
      20                                                                                                  Off-grid residential

      10
                                                                                                      2004: ~ 6.7 MW
      0                                                                                               PVRP & RRPGP:
           1992
                  1993
                         1994
                                1995
                                       1996
                                              1997
                                                     1998
                                                            1999
                                                                   2000
                                                                          2001
                                                                                 2002
                                                                                        2003
                                                                                               2004
                                                                                                      2.6 MW = 40%
                                                                                                      Grid ~ 13%


           Cumulative Installations
                                 Photovoltaics - Electricity from Sunlight



                PV vs Other Renewables
                 The RE Action Agenda
2010 Target: $4billion in revenue,
             including $1.8billion in exports
 2004            Total RE      PV Industry
                 Industry
 Annual          $1,052m       $204m
 Revenue
 Export Sales    $241m         $100m

 Employment      6,200         1,100
                    Photovoltaics - Electricity from Sunlight


Australian and International PV
      Installation trends
                    Photovoltaics - Electricity from Sunlight




Projected World PV Market Value
                      Photovoltaics - Electricity from Sunlight




European Projected Break-even points
                                               Photovoltaics - Electricity from Sunlight




                 Australian PV Industry Roadmap




• Business as Usual
   – Module imports 90% long-term. No export
   – BOS imports 50% long term. Export 50%
   • Sunrise 350
   – Module imports 25%. Export 50%
   – BOS imports 25%. Export 50%
                                                                                                                             Photovoltaics - Electricity from Sunlight



                                                           Australian PV and electricity price
                                                                       forecasts
                                 0.80


                                                                  Dis tributed G rid-c on P V LE C ($/k W h)
                                 0.70
                                                                  P V LE C with RE Cs ($/k W h)
                                                                  Retail E lec tric ity P ric e (2% pa inc reas e) $/k W h
                                 0.60                             Retail E lec tric ity P ric e (4% pa inc reas e) $/k W h
                                                                  Retail E lec tric ity P ric e (6% pa inc reas e) $/k W h
Comparative Electricity Prices




                                 0.50



                                 0.40



                                 0.30



                                 0.20



                                 0.10



                                 0.00
                                          02




                                                      06


                                                            08


                                                                  10




                                                                                           16




                                                                                                             20


                                                                                                                      22


                                                                                                                              24




                                                                                                                                             28
                                    00




                                                04




                                                                         12


                                                                                  14




                                                                                                    18




                                                                                                                                      26




                                                                                                                                                     30
                                                                                         20
                                  20


                                         20


                                               20


                                                     20


                                                           20


                                                                 20


                                                                       20


                                                                                20




                                                                                                  20


                                                                                                           20


                                                                                                                    20


                                                                                                                             20


                                                                                                                                    20


                                                                                                                                            20


                                                                                                                                                   20
                                                                                         Ye a r
                                       Photovoltaics - Electricity from Sunlight




                  BAU or Scenario 350 in 2010


                                 BAU              Sunrise 350
Annual Aus installed (MW)        16                       127
Cumulative Aus Capacity (MW)     120                      350

Module exports (MW)              20                       445
Sales $m                         80                     1,180

Australian share of the global
market (%)                       <1                         7

Jobs                             310                    5,300
                    Photovoltaics - Electricity from Sunlight




 Can Feed-in Tariffs
drive the grid market?
                                              Photovoltaics - Electricity from Sunlight




                        Definitions
• Feed in tariffs (FITs) aim to offer customers who invest in
  PV, or other renewable energy technologies, an electricity
  buy-back rate which facilitates an economic payback within
  the life of the system
• First used in Austria at a local government level (rate
  based incentives)
• An enhanced tariff is mandated and paid for via a levy on
  electricity sales
• The tariff for the year of installation is guaranteed for a set
  period, typically 15 to 20 years
• FITs can attract huge investment in renewables if
  appropriately structured
• now available in several European countries
                                                       Photovoltaics - Electricity from Sunlight




                   German PV support

• 1990-1999 - 1000 rooftop program
   – low interest loans
• 1999-2003 - 100,000 rooftop program
   – interest rate of 1.91% until installed capacity reached 300MWp
• Since 2000 - enhanced feed-in tariff
   – started at around €0.50
   – increased in 2004, after the soft loans ceased
   – Current rates are available for a period of 20 years and vary with
     system size and type
   – Facades qualify for a higher tariff, on the basis that output will be
     lower
• FITs for wind also
   – Installation targets met earlier than planned
                Photovoltaics - Electricity from Sunlight




German PV market growth
                                    Photovoltaics - Electricity from Sunlight




            Feed in Tariffs Germany from 2004


•   Free surfaces (not roofs):   45.7 c€/kWh
•   Roofs 30 to 100 kWp          54.6 c€/kWh
•   Facades < 30 kWp:            62.4 c€/kW
•   Facades > 100 kWp            59 c€/kWh
•   Roofs < 30 kWp:              57.4 c€/kWh
•   Roofs > 100 kWp:             54 c€/kWh
•   Facades 30 to 100 kWp:       59.6 c€/kWh
                                 Photovoltaics - Electricity from Sunlight




         Results for PV in Germany by 2004

• Germany overtook Japan with the highest
  level of PV installations – 363 MWp
• Installed capacity in Germany reached 794
  MWp
• Industry turnover €1.7 billion
• 20,000 people employed in the sector
• Average electricity bill increased by 0.16%
  (~ A$1.78 per annum)
                     Photovoltaics - Electricity from Sunlight




Feed-in Tariffs in Spain

      Juan Rivier
                                                                               Photovoltaics - Electricity from Sunlight



                              Installed RES & CHP in SPAIN



                                                                                 Energy             Percentage of
                                                       Installed capacity
                  RES and CHP                                                  production               total
                                                              (MW)
                                                                                 (GWh)              consumption
CHP                                                          5744,92            18087,4                   7,32%
Photovoltaic                                                   16,3               16,6                    0,01%
Wind                                                         7849,2             15225,3                   6,16%
Hydro < 50 MW                                                1660,7              4600,4                   1,86%
Biomass                                                        29,0               127,5                   0,05%
Agricultural, industrial, and other wastes                   1375,4              6040,5                   2,45%
                                        Total                16675,5            44097,6                  17,85%
Source: Monthly report on energy production of RES and CHP (CNE), April 2005
                                                  Photovoltaics - Electricity from Sunlight




                    Spanish National Plan for 2010



                      Targets set by the National Plan to support RES
         RES
                                   for the year 2010 (MW)
                         Published in 1999         Revision in 2005
Wind                   13,000 (initially 8,974)                 20,155
Photovoltaic                    115                              400
Solar Thermal                   200                              500
Hydro < 10 MW*                  720                             2,199
Hydro 10 - 50 MW*               350                             3,257
Biomass                        1,708                            2,039
Solid Wastes                    168                              189
                                                     Photovoltaics - Electricity from Sunlight


                           Legal Framework for
                            RES installations

•   Past regulation: RD 2818/1998
    –   Feed-in tariff model or market price + premium
         •   Specific to each technology
         •   Revised every 4 years
    –   No market participation: right to be dispatched
    –   Limited technical obligation
    –   Alternative option: access to the wholesale
        market (RD 841/2002)
         •   Participation in all the electricity markets
         •   Assumption of deviation costs
         •   Possibility of aggregation
                                                      Photovoltaics - Electricity from Sunlight



                            Legal Framework (2)

•   Today regulation: RD 436/2004
    –   Feed-in tariff model
         •   Obligation of production prediction for generators >
             10MW
         •   Revision every 4 years for new installations only
    –   Alternative option: full access to the wholesale
        market + premium + incentive
         •   Participation in all the electricity markets
         •   Assumption of deviation costs
         •   Possibility of aggregation
    –   Modulated Reactive Energy incentive
    –   Incentive to cope with dips (wind parks)
                                              Photovoltaics - Electricity from Sunlight



                     Legal Framework (3)

•   Connection Standards
     –   Specific standards for photovoltaic < 100kVA
         connected to LV network
     –   Out of date standards for other technologies (1985)
•   Licensing procedures
     –   Very long and complicated: several authorities and
         market agents
     –   Regulated contract with the Distribution Company
•   Administrative requirements to access the market
     –   May be a barrier to small generators
     –   Possibility of avoiding most of the requirements by
         using a broker
                                               Photovoltaics - Electricity from Sunlight

                      Legal Framework (4)
                         Photovoltaics

•   Past regulation (RD 2818/1998)
     –   0.66 A$/kWh for < 5kWp
     –   0.36 A$/kWh for > 5kWp
     –   Revised every 4 years
•   Today regulation (RD 436/2004)
     –   0.66 A$/kWh for < 100kWp
     –   0.36 A$/kWh for > 100kWp
     –   Permanent for the whole life cycle of every installation
         (upgrade of more than 50% of the investment cost is
         considered the end of the life cycle)
•   Connection standard
     –   Specific mandatory connection standard for LV PV
         installations < 100kWp since year 2000
                                            Photovoltaics - Electricity from Sunlight




                       Lessons learned

•   Importance of connection standards definition
•   Fixed premium is more effective in promoting a
    technology, if it is high enough.
•   What is being discussed now is the efficiency
    and sustainability of such support
•   Rules different for small penetration than for
    well established technologies
•   Licensing procedures are too complicated
     –   Depends too much on political and administrative
         decisions: Galicia, Navarra and Castilla-La-Mancha
         are the most successful, while other regions have
         not given yet a single permission
                                             Photovoltaics - Electricity from Sunlight



                         Main barriers to the
                         development of RES

•   Technical requirements:
     –   Connection standards, Monitoring and communication
         devices, dips

•   Network capacity to evacuate generated energy.
•   Administrative processes
•   Economic support
     –   Too low or too high

•   Network connection deep-costs
                       Photovoltaics - Electricity from Sunlight




An Australian Feed-in Tariff?
                                                           Photovoltaics - Electricity from Sunlight



                        Australian Government Support for
                                   Renewables
•   PVRP
     – 17% of market
     – May end 2007 - will grid market be sustained?
•   RRPGP
     –   22% of market
     –   Trend to larger systems -> wind, concentrators?
     –   Restrictions on water pumping
     –   Implications of removal of diesel fuel excise
•   MRET
     – Proposed increase in deeming period for PV & size of deemed systems
     – Tapering off from 2005
•   Solar Cities
     – Short term grid sales -> longer term impact?
•   Renewable energy R&D funding
     – Industry priorities need to be defined
     – Opportunities for product & systems development
                                           Photovoltaics - Electricity from Sunlight




                General FIT Issues

• Could be set at State or national level
• Need to be clear about objectives – industry development,
  distributed generation, emissions reduction etc
• An appropriate starting tariff would be need to be agreed,
  based on installed costs, expected PV output and timing,
  electricity tariffs
• The guaranteed tariff should be decreased each year but
  available for an agreed period of time
• The feed-in tariff cost could be spread across selected
  customer types (eg. residential and/or commercial only),
  particularly to avoid the more sensitive industry sectors
                                         Photovoltaics - Electricity from Sunlight




            Example – Australia-wide FIT

• FIT starts at 85c/kWh and available for 20 years
• FIT decreased by 7% per annum for 15 years to 31c/kWh
• Standard tariff - flat retail beginning at 12c/kWh and
  inflating at 3%
• That is, incremental FIT begins at 73c/kWh and ends at
  12c/kWh
• Installed system price of $11,500
• 1458 kWh/kWp
• FIT cost spread across residential and commercial
  customers

→ Australian PV Industry Roadmap target of 350MW
 installed capacity by 2010 would be met
                                                                                                                            Photovoltaics - Electricity from Sunlight



                                                 Net FIT Cost & Cumulative PV Installed
                                                     Australia wide (res, comm cust)
                        4500                                                                                                         4.00%



                        4000
                                                                                                                                     3.50%


                        3500
                                                                                                                                     3.00%




                                                                                                                                             % increase in cost of electricity
                        3000
                                                                                                                                     2.50%
MW Installed Solar PV




                        2500
                                                                                                                                                                                 MW Installed in NSW
                                                                                                                                     2.00%                                       net FIT % inc

                        2000

                                                                                                                                     1.50%
                        1500


                                                                                                                                     1.00%
                        1000


                                                                                                                                     0.50%
                        500



                          0                                                                                                          0.00%
                               2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
                                                                                                                                     Photovoltaics - Electricity from Sunlight



                                                                    A possible NSW FIT
                                                             (res, comm + 70% ind customers)
                               2500                                                                                                         4.00%




                                                                                                                                            3.50%


                               2000

                                                                                                                                            3.00%




                                                                                                                                                    % increase in cost of electricity
MW Installed Solar PV in NSW




                                                                                                                                            2.50%
                               1500

                                                                                                                                                                                        MW Installed in NSW
                                                                                                                                            2.00%                                       net FIT % inc


                               1000
                                                                                                                                            1.50%




                                                                                                                                            1.00%

                               500


                                                                                                                                            0.50%




                                 0                                                                                                          0.00%
                                      2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
                  Photovoltaics - Electricity from Sunlight




Other Considerations
                                                 PV Output (kW)




                                  0
                                      0.1
                                            0.2
                                                   0.3
                                                         0.4
                                                               0.5
                                                                      0.6
                                                                            0.7
                                                                                  0.8
                          0:
                             00
                          1:
                             00
                          2:
                             00
                          3:
                             00
                          4:
                             00
                          5:
                             00
                          6:
                             00
                          7:
                             00
                          8:
                             00
                          9:
                             0
                         10 0
                           :0
                         11 0
                           :0




PV Output
                         12 0
                           :0
                         13 0




                  Time
                           :0
                         14 0
                           :0
                         15 0
                           :0
                         16 0
                           :0
                         17 0
                           :0
                         18 0
                           :0
Commercial Load
                         19 0
                           :0
                         20 0
                           :0
                         21 0
                           :0
                         22 0
                           :0
                         23 0
                           :0
                              0
                                                                                        PV Output & Commercial Load




                                  0
                                      5
                                            10
                                                  15
                                                       20
                                                            25
                                                                 30
                                                                       35
                                                                            40
                                                                                  45




                                          CommercialLoad (MW)
                                                                                                                      Photovoltaics - Electricity from Sunlight
                 Photovoltaics - Electricity from Sunlight




PV Output & Residential Load
                                           Photovoltaics - Electricity from Sunlight




             FIT Implementation Issues

• Finance
• Likely public take-up
  – Germany (green interest, local self reliance, disposable
    income, age profile)
• Fast tracking trade skills
• Insurance / liability issues
• Utility response - OK with small penetrations, more
  issues once PV starts to be noticeable
• Not compatible with net metering → need for
  electronic or 2nd meter

				
DOCUMENT INFO