Ontario pv market presentation see management team cb
Upcoming SlideShare
Loading in...5
×
 

Ontario pv market presentation see management team cb

on

  • 218 views

 

Statistics

Views

Total Views
218
Slideshare-icon Views on SlideShare
216
Embed Views
2

Actions

Likes
0
Downloads
0
Comments
0

1 Embed 2

http://www.linkedin.com 2

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Ontario pv market presentation see management team cb Ontario pv market presentation see management team cb Presentation Transcript

    • Wir entwickeln Energie und MärkteThe Ontario PV Market:Economics, Opportunities and StrategiesChristian BogueMonday February 7th, 2011Hamburg, Germany
    • About Ontario● One of ten provinces, largest by population with 13,167,894inhabitants as of April 2010● Home to:● Toronto: provincial capital and most populous city● Ottawa: national capital of Canada● 80 MW Sarnia PV facility: powers 12,000+ homes● Broken into Northern and Southern Ontario● majority of population and arable land located in south● Borders Minnesota, Michigan and New York states● Toronto Pearson Int‟l Airport flys to Frankfurt and London● ForEx: 1 EUR = 1.34 CAD (closely follows USD)
    • Ontario‘s energy mix - Mostly Nuclear & Hydro● Nuclear● 41% of generation in 2005● 16 reactors in operation at 3 different sites: Pickering, Bruce and Darlington● Total of 11,400 MW of generation capacity● Gov‟t Policy: nuclear still has a role in energy generation through to 2025● Hydro● Ranked 2nd behind China in hydroelectricity generation● Most major hydropower sites in Ontario already exploited● 2000 sites still remaining in northern Ontario that may be utilized togenerate electricity in the future.● The OPA is still completing feasibility and implementation studies formany of these sites.● currently accounts for approximately 21% of generation● estimated to rise to 30% by 2025
    • Ontario Energy Mix – Visually displayed
    • Electricity Prices in Ontario● Regulated by theIndependent ElectricitySystem Operator (IESO)● Half of all users in theprovince pay wholesaleprices● Lower use consumers(homeowners/smallbusinesses) pay regulatedrates● Four different pricestructures available →
    • Insolation Levels in Ontario
    • Green Energy and Economy Act of 2009 – Key Points● Passed into law on May 14, 2009● Feed in Tariffs for renewable energy sources● Systems sizes less than 10kWp considered “”MicroFit” and receive:● Standardized regulations● simpler application procedure● faster turn-around time● 20 year payment from Ontario Power Authority (OPA)● providing small generators with protection against changes ingovernment policies● “Local Content Clause” for materials and labor
    • Additional Renewable Energy Support Programs● Aboriginal Energy Partnerships Program● provides funding for many of the key developmental stages of FirstNations and Métis projects.● Community Energy Partnerships Program● provides funding to assist community groups with the developmental costsassociated with renewable energy projects.● Aboriginal Loan Guarantee Program● Worth $250 million, run by the Ontario Financing Authority, supportsAboriginal participation in new renewable green energy infrastructure suchas wind, solar and hydroelectric.● Municipal Renewable Energy Program● The Municipal Renewable Energy Program will provide support tomunicipalities for extra costs associated with new renewable energyprojects.
    • About the Ontario Power Authority (OPA)● Independent, non-profit corporation● Established through the Electricity Restructuring Act of 2004.● Licensed by the Ontario Energy Board● Sets electricity rates, enforces rules, and protects consumers● Reports to the Ontario legislature through Ontarios Ministry of Energy● The OPA is responsible for:● Assessing the long-term adequacy of electricity resources● Forecasting future demand and the potential for renewable energy● Preparing an integrated system plan for conservation, generation,transmission● Procuring new supply, transmission and demand management eitherby competition or by contract, when necessary● Achieving government targets for conservation and renewable energy
    • OPA Feed in Tariff Rates
    • Comparing FiT Programs – Germany and Ontario
    • Local Content Clause I● Intentions, Perceptions and Accusations● Intended as job-creation policy● Seen as Canadian protectionism● Charged by the Japanese of infringing WTO rules● 60% total requirement● Applicable to all components● Includes design, labor and other services● Can be broken down by element (see next slide)● Few major producers have finished production lines in place● Current suppliers of SunEnergy active in Ontario are restricted to:● Samsung● Schletter● SMA
    • Local Content Clause IIMaterial Designated Activity QualifyingPercentageSilicon manufactured in an Ontario refinery 11%Ingots /Wafers Cast in and wafers cut by an Ontario saw 13%Cells Active PV layers formed in Ontario 11%Modules electrical connection and encapsulation in Ontario 15%Inverters Assembly, final wiring, testing 8%Mounting Bending, welding, piercing, and bolding 11%Wiring Wiring and elec. Hardware sourced locally 9%Labor Construction and on-site labor 18%Services Legal, technical and accounting work 4%Total 100%
    • Present Market Size● 168 MW installed in 2010*● Less than California„s180 MW● More than New Jersey„s 110 MW● 2011 expected domestic supply of 386 MW● 2011 demand forecast of 694 MW● Result: Demand for Ontario-made modules willexceed supply….● …..and put upward pressure on prices in the localmarket.*DC installed power.
    • Current Market Segment Distribution● 732 MW of solar FIT contracts approved sinceOctober. Of this:● 553 MW were utility scale projects.● 169 MW were Capacity Allocation Exempt (CAE).● Considered a close proxy for commercial rooftops● ≤ 250 kW when connected to a line < 15 kilovolts● ≤ 500 kW when connected to a line ≥15 kilovolts● 10 MW were micro FIT projects.● market is currently dominated by utility scaleprojects--over 75% of executed solar FIT contracts
    • Predicted Market Segment DistributionTransmissionConstraints in 2012So:Decreased approvalspeed for utility scalecontractsAndCommercial projectsdon‟t connect to ONtransmissionsystem…….They connect tolocal distributionnetworks w/ocapacity restraintsThusON develops into alargely commercialrooftop market: 70%of installation by2015.Market orientationtowards full buildingenvelope solutions.
    • Grid capacity and interconnection issues● Lacking transmission capacity means FiT application enter a “reserve”pool and await an ECT● An Economic Connection Test (ECT)● Occurs every 6 months● Review application waiting in the pool● decides if costs of grid upgrades for a project are justified based on:● Already known, confirmed transmission upgrades● other proposed generating facilities● distribution system expansion plans● While there is no official cap on projects…the number of utility-scale (500kW +) projects that may now connect tothe grid has arguably reached a de facto cap for the immediate future.
    • Selecting the right market segment● For developers flexible in their approach, opportunities can be found whereprojects are:● capacity allocation-exempt; (commercial roof-tops)● microFIT; (systems of 10kWp or less)● In close proximity to planned transmission expansion (see next point)● Strategic project placement● Examination of anticipated grid expansion plans● Secure locations for potential projects close to major lines● Example: Hydro One has announced a new 430 km, single circuit 230 kVtransmission line in north-western Ontario from Nipigon to the PickleLake area. Projects on/near this line will see faster ECT approvals
    • Canadian building standards and the CAE market● Building restrictions are important constraints in thecommercial rooftop market● Neither building codes nor rooftops in Ontario weredesigned with solar power in mind● Rooftop size is a limiting factor and energy density/m2 isdesired● Thus, two primary value drivers in this market are:● low-weight equipment solutions that work well withinexisting codes and structural limitations● Technologies that maximize output
    • Ground Mount Projects: The Canada Land Inventory (CLI)● Categorizes agricultural land into seven classes● Maintained and managed by the Ontario Ministry ofAgriculture, Food and Rural Affairs (OMAFRA)● Class 1 soils have the highest and Class 7 soils thelowest capability to support agriculture● Ontario Power Authority does not permit projects of100 kWp or more on:● CLI Class 1, 2 or 3 soils● specialty crop areas● Does not apply to First Nations reserve lands
    • CanSIA 2010 – December 6-7, Toronto, Canada● 2 day annual trade fair for solar in Canada● Organized by the Canadian Solar IndustriesAssociation (CanSIA)● Attended by Christian Bogue and Eike Dehning● Planned “Gesprächstermin Programm” from theGerman-Canadian Chamber of Commerce● Individual appointments with potential suppliers,developers, contractors, investors, banks, etc.
    • Results of CanSIA● OpSun Panels● Heliene Inc● Photowatt Ontario● Fronius Canada Ltd● Satcon Technology Corporation● SMA America LLC● Schletter● ASI Advanced Solar Investments● Samco Machinery Ltd● JCM Capital● TD Canada● Black and McDonald● Dial One Wolfedale Electric Ltd● Avacos Solar Energy Inc● Solargy Solutions, Inc.● Green Sun Rising● Efan Green Inc● Evergreen Power Solutions● Horizon Energy Solutions● CanACRE● 9 suppliers● 2 financing entities● 2 project management firms● 5 installers● 1 service providerConclusion: We‟ve met a sufficient number ofqualified firms with whom we could worktogether in developing the Ontario market.**A full evaluation of the value of these firms by both Messrs Bogueand Dehning, including possible areas of cooperation are available infull report form upon request.
    • Market Entry I: Positioned as pure EPC contractor● Low risk, low yield: Sub-contract to Ontario-based developers● Minimal amount of human and financial resources● Not responsible for complete project financing● No need for an equity stake in project● Requires only a local, (possibly) externally sourced engineer● No project sales rep needed● Could yield high project revenues for large projects● But….● Slow time to market● Shallow market penetration● Engagement with limited number of firms
    • Market Entry II: Positioned as full project developer● Higher risk, higher yield● More resource intensive● Sales rep, internal engineer, project manager● Project financing● Greater long term return● Deeper market penetration● Active project sales, rather than EPC inquiries from otherdevelopers● Total brand name recognition, not as sub-contractor
    • Market Entry III: Wholesaling● Opportunity to serve the microFIT market● Could build a retail “partner” network● Entails warehousing costs (local content = not from HH)● Component price fluctuations● Insufficient understanding of core supply/demand drivers onlocation● Need to arrange new purchasing agreements w/ suppliersNote: due to the youth of the market, a wholesaling option will onlywork in a tight bandwidth – from suppliers with a floor on purchasevolumes that installers cannot reach.
    • Market Entry IV: SunEnergy does not enter the market● Some things to consider:● Attractive markets are not obligatory to enter● Other promising markets will also emerge● Internal capacities are the primary decision factor:● Financial: operating budget, credit limit, etc.● Personnel: additional overhead, controlling to SEE vs. SEA?● Entry should be made with sufficient resources…With the number of new firms moving into the market,SunEnergy’s historical precedence of a small one or two manteam will perhaps yield sales, but will not be sufficient forestablishing a secure position in the market place.
    • From a seasoned professionalDirk Morbitzer of Renewable Analytics in San Francisco and former Director of GlobalProcurement at Trina Solar as well as S.A.G. Solarstrom, offered the following inputregarding the structure of a new market‟s team:“the number of people depends on the market segment you go after. If you start asubsidiary focused on selling modules you may be ok with 3 people: one in BusinessDevelopment, one in sales (hardcore) and one in technical support. But to really rampup revenues you want to hire additional sales people…up to 4 – 6 sales reps perengineer. But you can not just hire sales people without local engineering / gridconnection knowledge.”“If you want to go into the project market you need a minimum of 3 people, one inBusiness Development / Sales, one Project Engineer and one Utility ConnectionEngineer / Relationship Manager plus several outsourced functions – with legalservices being the most crucial and most expensive function.”
    • Recommendations (Next Steps)● Management review of SEE 2011 business plan● contributing factors include:● Running operational costs of current business units● SunEnergy Americas● New office in Bologna?● French market business plan?● Project financing costs● Simultaneous projects in DE, IT, UK, USA, ON….● Reporting structure to Hamburg or Syracuse (SEA)● Relative attractiveness of ON compared to othermarkets
    • Wir entwickeln Energie und MärkteThank you for your attention.Questions?