Key Insights FEBRUARY 2015

Transcription

1 Current and Future Cost of Solar Photovoltaics Key Insights FEBRUARY 15

2 Agora Energiewende - who we are Independent and non-partisan Think Tank, 1 Experts Mission: How do we make the Energiewende in Germany a success story? Financed with 15 million Euro by the Mercator Foundation and the European Climate Foundation Analyzing, assessing, understanding, discussing, (Project duration: 1-17) putting forward proposals

3 Starting point: uncertainty about the future role of solar PV among experts and policy makers Today: solar photovoltaics becomes mainstream Future: very different perspectives on solar power Cost for solar power will decrease The future will be based on solar power? Cost for solar power will rise again soon Solar will remain a rich-peopletechnology Source: istock/trekandshoot Solar is a gamechanger for energy industry The solar bubble is about to burst Own illustration 3

4 Objective: provide a range of future cost scenarios to support discussion on role of solar PV Cost of solar PV today Cost of solar PV in 5 Conservative assumptions Ambitious assumptions Min Max Own illustration

5 Focus on large scale systems and crystalline silicon technologies breakthroughs are far from impossible but not considered here Solar PV system size Solar PV technology Focus Focus 1kW kwp kwp 1 MWp MWp > MWp Crystalline Silicon-Technologies Concentrating Photovoltaics Private house Industry Ground-mounted High concentration Thin-film-Technologies Other Technologies Dye-sensitized solar cells Many other technologies Source: Fotolia/Smileus Source: Naturstrom AG Sources: Fotolia/ls_design, Fraunhofer ISE Einteilung nach: EPIA, Solar Generation, 11 Own illustration 5

6 Backup Future solar module prices in different scenarios are based on the historical learning rate Example of methodology used Expert discussion: Scenarios of market development Resulting cost of solar modules based on learning rate World market solar PV modules, in GW Scenario, PV-Breakthrough: 17 GW in 5 Scenario 1, year 5: 7-3 /kwp : ~ GW Scenario 1, most pesimistic: 175 GW in 5 Scenario, year 5: - /kwp Own illustration

7 Key Insight 1: Solar photovoltaics is already today a low-cost renewable energy technology Feed-in tariff for new large-scale solar photovoltaic in Germany ct/kwh* 3 3 ~% For Comparison: ,7 *Nominal values, Feed-in tariff applicable at first of January each year, value 15 excl. adjustment of, ct/kwh for direct marketing. Source: German renewable energy law, Agora Energiewende 7

8 Key Insight : Solar power will soon be the cheapest form of electricity in many regions of the world. Cost of electricity from new solar power plants in Southern and Central Europe ct/kwh* For Comparison: cost of electricity from fossil fuels: - 1/3 - /3 Most pessimistic assumption, lowest irradiation Most optimistic assumptions, highest irradiation *Real values in 1; bandwidth represent different scenarios of market, technology and cost development, as well as power plant location between south of Germany (119 kwh/kwp/y) and south of Spain ( kwh/kwp/y). Source: Own illustration

9 ct/kwh* Key Insight 3: Financial and regulatory environments will be key to reducing cost in the future. Cost of electricity of solar PV at different costs of capital, example southern Germany and southern Spain in 5 Cost of capital:** Germany (south) Spain (south) 5% 5% 7,5% % More sun, lower cost Higher cost of capital, higher cost * Real values in 1 ** Weighted average cost of capital (WACC) Source: own illustration 9

10 Cost of electricity Key Insight : Most scenarios fundamentally underestimate the role of solar power in future energy systems. Cost of electricity and contribution to power system per technology, scenario for Germany 35* 15ct/kWh expensive with low contribution Cost-optimal decarbonisation with higher share of cheapest technology? Illustrative ct/kwh Biomass Wind offshore cheap with high contribution 5ct/kWh Solar PV Wind onshore % % 3% Contribution to power system * Contribution of renewables based on scenario B35 of grid development plan 15, cost of electricity for other technologies based on Agora Energiewende 1 Source: own illustration

11 Summary: Key Insights 11

12 Deep-dive regions and countries 1

13 Solar power will soon be the cheapest form of electricity in many regions of the world. Cost of electricity from new solar power plants in North America, Australia, India and Mena region in ct/kwh* North America (1,5 5,) Australia (1,,9) India (1, - 3,7) Mena (1, - 3,7) * Real values 1; full load hours based on [7], investment cost bandwidth based on different scenarios of market, technology and cost development; assuming 5% (real) weighted average cost of capital; Source: Own illustration 13

14 UK: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: United Kingdom ct 1 /kwh Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 1

15 Spain: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Spain ct 1 /kwh 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 15

16 France: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: France ct 1 /kwh Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 1

17 Poland: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Poland ct 1 /kwh Full load hours: 95-5 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 17

18 Full report available at: Comments and feedback welcome! Media contact: 1

19 Backup Excel tool and further country-results 19

20 Online tool (Microsoft Excel) allows calculation of current and future cost of solar PV in different countries and currencies Available (for free) at: To calculate cost of electricity in your country: 1. Go to tab Cost of solar per country in other currency. Select a country 3. (Select cost of capital - optional). Select currency to display

21 Greece: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Greece ct 1 /kwh 1 Full load hours: 13 - kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 1

22 Germany: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Germany ct 1 /kwh Full load hours: 9 - kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered

23 Italy: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Italy ct 1 /kwh 1 Full load hours: - 15 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 3

24 Austria: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Austria ct 1 /kwh 1 1 Full load hours: 5-15 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered

25 Denmark: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Denmark ct 1 /kwh 1 1 Full load hours: 5-1 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 5

26 Finland: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Finland ct 1 /kwh Full load hours: 5-15 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered

27 Latvia: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Latvia ct 1 /kwh 1 1 Full load hours: 1-15 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 7

28 Romania: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Romania ct 1 /kwh 1 1 Full load hours: 1-15 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered

29 Hungary: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Hungary ct 1 /kwh 1 1 Full load hours: 1 - kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 9

30 Czech Republic: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Czech Republic ct 1 /kwh Full load hours: 95-5 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 3

31 Estonia: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Estonia ct 1 /kwh 1 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 31

32 Lithuania: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Lithuania ct 1 /kwh 1 1 Full load hours: 5 - kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 3

33 Bulgaria: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Bulgaria ct 1 /kwh 1 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 33

34 Slovakia: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Slovakia ct 1 /kwh Full load hours: 95-1 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 3

35 Slovenia: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Slovenia ct 1 /kwh 1 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 35

36 Montenegro: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Montenegro ct 1 /kwh 1 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 3

37 Macedonia: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Macedonia (FYROM) ct 1 /kwh 1 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 37

38 Serbia: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Serbia ct 1 /kwh 1 1 Full load hours: 1 - kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 3

39 Backup Non-EU countries 39

40 Australia: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Australia ct 1 /kwh 1 1 Full load hours: 5-15 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered

41 China: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: China ct 1 /kwh 1 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 1

42 India: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: India ct 1 /kwh 1 Full load hours: - 15 kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered

43 Turkey: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Turkey ct 1 /kwh 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 3

44 South Korea: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Korea, South ct 1 /kwh 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered

45 USA: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: United States ct 1 /kwh 1 Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered 5

46 Russia: Current and future cost of solar energy Levelized Cost of electricity from large scale solar PV: Russia ct 1 /kwh Full load hours: kwh/kwp p.a., Cost of capital (WACC): between 5% and % Exchange rates based on time of analysis (may 1); ranges include differences in solar irradiation within the country as well as scenarios of technology and global market development; a global market for modules, inverters and other cost components is assumed, short-term effects of higher cost in new markets (e.g. first GW in a specific country) are not considered

47 Backup further details on analysis 7

48 Backup Different approaches were applied to estimate future cost of components and were discussed in detail in expert workshops Overview of Methodology Applied to Estimate Total System Cost in 5 Component Cost in 1 Logic of calculation Cost in 5 Balance of System Inverter Component based Learning curve Module Learning curve

49 Backup Short term market estimations for 15 are used as starting point for scenario estimations* PV market development, GW per year Input Expert Discussion IHS (Q1 1) Deutsche Bank EPIA (13)- Average CAGR -13 5% CAGR ~% Not considered in analysis CAGR 13- ~ 17% *For 15, the average of available market forecast is used Own illustration 9

50 Backup Number of Duplications in Cumulated Production Does not Differ Strongly Across All Scenarios Cumulated PV production in scenarios, in TW; duplications Number of Duplications , 5,5 Own illustration 5

51 Backup Crosscheck with global electricity demand: PV break-through scenario only feasible with Electricifcation Global Electricity Demand and PV Generation, in *TWh Crosscheck of scenarios: PV share of electricity demand in 5 Demand based on IEA Prof. Breyer 91% % % 1% % 1% % 5% Own illustration 51

52 Backup Increasing module efficiency will lead to cost reductions in all other parts of the power plant Total land area needed for PV power plant with 1 MWp Today: (Module Efficiency ~15%) 5: (Module Efficiency ~3%) ~ soccer fields ~x Efficiency ~5% Surface ~1 soccer field Effect of higher module efficiency: Less modules to install Less weight to transport Less structures to build Less surface to use Own illustration 5

53 Backup Future Balance-of-System cost are based on scenarios of module efficiency and further analysis Example of methodology used Scenarios of module efficiency Resulting balance-of-system (BOS) cost* Today Scenario 5 Conservative Average Optimistic ~3 /kwp -39% -5% ~15% ~% 5 pure c-si ~3% 5 dual-junction Technology assumed ~35% 5 triple-junction ~ /kwp 1 5 max (all worst case assumption) ~ /kwp 5 min (all best case assumption) *Detailed analysis of cost drivers and impacts, including those beyond module efficiency, as well as results of expert discussions included in study Own illustration 53

54 Backup Inverter for large scale solar PV power plants have developed tremendously over the last decade Example of technology development: Inverter 3 kw PV-inverter manufactured 37 kg -> 1 kg/kw 3 kw PV-inverter manufactured 155 kg -> 5 kg/kw Possible technical progress: SiC power modules higher switching frequency higher power density higher voltage levels in utility scale inverters kw PV-inverter manufactured 1 kg -> kg/kw Own illustration, Fraunhofer ISE 5

55 Backup Future Cost of Inverters are estimated based on the Price Experience Curve Inverter Price, Cumulated Produced Capacity Scenario 1: /kwp Scenario 3: 3 /kwp Scenario : /kwp Source of historic data: SMA Own illustration, Fraunhofer ISE 55

56 Backup Resulting total cost of ground mounted PV systems in 5 ranges between and /kwp assuming no technology breakthroughs (conservative estimate) Cost of PV System, in /kwp 1 5 ~ /kwp Max Min BOS 335 Inverter 1 ~ /kwp Module ~ /kwp Own illustration 5