Photovoltaic Grid Parity in the Tertiary Sector
Upcoming SlideShare
Loading in...5
×
 

Photovoltaic Grid Parity in the Tertiary Sector

on

  • 616 views

This webinar goes through the technico-economic assessment of photovoltaic installations in non-residential buildings. Its viability is compared with the costs of electricity from the grid. The ...

This webinar goes through the technico-economic assessment of photovoltaic installations in non-residential buildings. Its viability is compared with the costs of electricity from the grid. The methodology for such an exercice will be explained and the conclusions and lessons will be presented.

Additionally, an assessment of local regulation in seven countries is made: France, Germany, Italy, Spain, Brazil, Chile and Mexico.

For further information, please read the Grid Parity Monitor issues.

http://www.leonardo-energy.org/webinar/photovoltaic-grid-parity-tertiary-sector-session-1

Statistics

Views

Total Views
616
Views on SlideShare
462
Embed Views
154

Actions

Likes
3
Downloads
35
Comments
1

3 Embeds 154

http://www.leonardo-energy.org 151
http://sustainableboard.com 2
http://www.slideee.com 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

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

11 of 1

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

    Photovoltaic Grid Parity in the Tertiary Sector Photovoltaic Grid Parity in the Tertiary Sector Presentation Transcript

    • PV Grid Parity Monitor for Commercial Consumers Financial AdvisoryStrategy Consulting Market IntelligencePolicy Consulting Leonardo ENERGY Webinar Series April 11, 2014 - 10:00 CET David Pérez, Partner dpn@eclareon.com María Jesús Báez, Associate mjb@eclareon.com GPM 3rd Issue
    • Platinum sponsors: • ECLAREON • Grid Parity Monitor (GPM) - Introduction - Definitions and Methodology - Results - Conclusions Agenda 2
    • Platinum sponsors: 3 ECLAREON’s service portfolio includes strategy and policy consulting as well as financial advisory COMPANY OVERVIEWINDUSTRY FOCUS • Entry strategies (new geographies & technologies) • Commercial & business strategy • New ventures & business planning • EBITDA improvement • Restructuring • Corporate strategy • Market information tools and publications for the RE sector: - Grid Parity Monitor (GPM) - PV price navigator - Solar Atlas • Organization of trade delegations and sector conferences • Commercial due diligence • M&A advisory, coordination & negotiations • Company valuation • Target screening & partner search • Equity and debt capital raising • Investment opportunities • Expert’s reports • Horizon 2020: coordination of proposals and participation as partners • Legal framework analysis • Support in policy making • International knowledge sharing Strategy consulting Market intelligence Financial advisory / M&A Policy consulting Business promotion RenewableEnergySmartGrids Energy Efficiency
    • Platinum sponsors: 4 ECLAREON mainly covers the European, Latin American and US markets and has permanent offices in Berlin and Madrid (>40 employees) and partner offices in Bogota, Milan, New Delhi, and Santiago ECLAREON’s global presence Note: * Partner offices represent partnership agreements with local consultants COMPANY OVERVIEWGEOGRAPHIC REACH Permanent office Partner office* ECLAREON activity
    • Platinum sponsors: • ECLAREON • Grid Parity Monitor (GPM) - Introduction - Definitions and Methodology - Results - Conclusions Agenda 5
    • Platinum sponsors: PV “grid parity” is the moment when the cost of generating PV electricity is equal to the price paid for grid electricity For the sake of simplicity this report compares PV LCOE with retail electricity prices In reality, depending on the local self-consumption regulation, a part of the PV generation might be lost or valued at a different rate Note: * Levelized Cost of Electricity Source: ECLAREON analysis INTRODUCTION Grid electricity price PV electricity cost (LCOE*) EUR ct / kWh Grid Parity Years Simplistic Illustration of PV Grid Parity • Grid electricity is cheaper than PV-generated electricity - PV needs support mechanisms (FiT, tax credit, etc.) • PV-generated electricity is cheaper than grid electricity - It is more convenient to auto- consume PV electricity than to buy electricity from the utility 6
    • Platinum sponsors: The GPM Series analyzes grid parity proximity in several markets; this 3rd issue focuses exclusively on the commercial segment INTRODUCTION Countries included in the GPM Series up to date Source: ECLAREON 7 Distinctive features of this issue Included in GPMC Included in previous issues BRASIL (Salvador) MEXICO (Hermosillo) SPAIN (Las Palmas) ITALY (Rome) FRANCE (Marseille) GERMANY (Munich) CHILE (Copiapó) Key: Perspective • Commercial segment - 30kW system vs. commercial utility rates Markets • Mature markets - France, Germany, Italy and Spain • Promising markets - Brazil, Chile and Mexico Methodology • Assumptions (not exhaustive) - 100% on-site self-consumption - 70% debt ratio • Inputs (not exhaustive) - Real market data for EPC prices - After-tax cost flows - Only accounts for the energy charge
    • Platinum sponsors: The PV Grid Parity Monitor is sponsored by renowned international companies • Platinum Sponsors • Gold Sponsors INTRODUCTIONSPONSORS 8 Platinum sponsors:
    • Platinum sponsors: The PV Grid Parity Monitor is supported by relevant FV partners in each market • Partner Associations • Supported by INTRODUCTIONPARTNERS 9
    • Platinum sponsors: The LCOE of a system refers to the constant and theoretical cost of generating PV electricity over the system life DEFINITIONS & METHODOLOGY Cost flows of a commercial PV System Source: ECLAREON analysis 10 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 € Initial investment Operating expenses Key: Tax shield 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 €ct / kWh PV LCOE of the PV System • PV Levelized Cost of Energy (LCOE) accounts for all costs associated with a PV system over its life - These include initial investment, O&M costs, corporate taxes, among others • It assumes a constant value per year and is expressed as cost per kWh - It incorporates total PV electricity generated over the system’s lifespan • It considers the return required from the investment, to discount future costs (and production) to present
    • Platinum sponsors: For a specific PV system, PV LCOE is fixed as soon as the PV system is built, but grid electricity prices are likely to increase LCOE of PV Technology vs. Grid Electricity Price 0 5 10 15 20 25 30 2009S1 2009S2 2010S1 2010S2 2011S1 2011S2 2012S1 Years EUR ct/ kWh LCOE of PV technology Grid electricity price 0 10 20 30 40 50 60 70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 EUR ct/ kWh Years of operation of the PV system Grid electricity price LCOE of a specific PV system installed in S2 2013 LCOE of A SPECIFIC PV System Installed S2 2013 vs. Grid Electricity Price Source: ECLAREON analysis DEFINITIONS & METHODOLOGY 11
    • Platinum sponsors: 12 Note: Data from the second half of 2013 Source: ECLAREON analysis RESULTS Germany, Italy, and Mexico are best positioned for the development of the PV self-consumption market Positioning Matrix of the countries analyzed Note: Data from the 2nd half of 2013 Source: ECLAREON Analysis 0,0 0,2 0,4 0,6 0,8 1,0 - + Regulatory support for PV Self-Consumption - + GridParityProximity BrazilChile France Germany Italy Mexico Spain Countries at grid parity Best positioning for self-consumption
    • Platinum sponsors: RESULTSBRAZIL The regulatory environment in Brazil is favourable, but PV is not yet competitive against grid electricity Note: * Compound Annual Growth Rate Source: ECLAREON analysis Past evolution of grid electricity price and PV LCOE (SALVADOR) • A net-metering regulation, proposed by ANEEL, for renewable energy systems up to 1 MWp is in place since January 2013 - Users pay for the difference between the energy consumed and the one fed to the grid - Compensation will be held within the same rate period Assessment of Brazilian regulatory framework for PV self-consumption 13 0 20 40 60 80 100 120 140 2012S2 2013S1 2013S2 PV LCOE (avg.) CAGR * S2'12-S2'13 Standard tariff -23.2% -27.3% BRL ct/ kWh • In Salvador, PV technology is still far from being competitive against grid electricity - Commercial electricity tariffs were recently reduced - PV LCOE remains high due to high system prices and a high discount rate
    • Platinum sponsors: RESULTSCHILE Despite high irradiation levels in Copiapó, a relatively low variable component of the electricity tariff impedes Grid Parity Past evolution of grid electricity price and PV LCOE (COPIAPÓ) • In March 2012 a net metering regulation for PV installations up to 100 kW was approved (Law 20.571) but technical rules are still pending - PV surpluses will be valued at an economical rate (lower than the retail electricity price) - This law will not come into force until a technical code is published Assessment of Chilean regulatory framework for PV self-consumption Source: ECLAREON analysis 14 0 20 40 60 80 100 120 140 160 180 2012S2 2013S1 2013S2 PV LCOE (avg.) CAGR S2'12-S2'13 -23.1% -25.6%Standard tariff CLP/ kWh • Despite relatively high irradiation levels in Copiapó, PV technology is not competitive against grid electricity: - Variable electricity prices for the commercial segment are low - PV installation prices remain above international competitive price levels - The discount rate is relatively high
    • Platinum sponsors: RESULTSMEXICO In the North of Mexico, commercial consumers with contracted power below 25 kW have reached grid parity Past evolution of grid electricity price and PV LCOE (HERMOSILLO) • The Medición Neta regulation already allows PV self-consumers to feed part of their production into the grid for energy credits • An eventual regulatory change that modifies the recognition process of injected power by PV systems would benefit these generators - If distributed PV generation is included in this legislation, it would allow self-consumers to attain savings from the fixed component of the utility rate Assessment of Mexican regulatory framework for PV self-consumption Note: *Tarifa 2; **Tarifa 3; ***Tarifa OM Source: ECLAREON analysis 15 PV LCOE (avg.) CAGR S2'12-S2'13 -22.7% 4.4% Tariff <25kW* 8.8%Tariff >25kW** Tariff <100kW*** 10.0% MXN/ kWh 0 1 2 3 2012S2 2013S1 2013S2 • In Hermosillo, certain commercial electricity consumers (“Tarifa 2”) have reached grid parity - For other consumers, low electricity tariffs still represent a barrier
    • Platinum sponsors: RESULTSFRANCE In Marseille, grid parity has not been reached yet, mostly due to low electricity rates for the commercial sector Past evolution of grid electricity price and PV LCOE (MARSEILLE) • In France, commercial PV systems can receive a Feed in Tariff (FiT) that compensates for the excess electricity fed into the grid - Given that FiTs are still higher than the retail price of electricity, self-consumption is not being incentivized • There is uncertainty about the future of the FiT scheme Assessment of French regulatory framework for PV self-consumption Source: ECLAREON analysis 16 0 2 4 6 8 10 12 14 16 2012S2 2013S1 2013S2 PV LCOE (avg.) CAGR S2'12-S2'13 Peak Summer Peak Winter -24.0% 1.4% 14.4% EUR ct/ kWh • Despite relatively high solar irradiation in Marseille, grid parity has not been reached yet, mostly due to low electricity rates for commercial consumers - However, with an estimated annual decrease of PV LCOE of 24%, grid parity could be a reality in the medium term
    • Platinum sponsors: RESULTSGERMANY PV grid parity has already been reached in Munich for commercial consumers; the regulatory support encourages the market • Germany’s EEG FiT program fosters the self-consumption market in an efficient way, as the tariff for the excess electricity is lower than the price of electricity from the grid - Moreover, the country is reducing the level of incentives every month • An EEG surcharge payment for PV on-site self-consumption is under discussion Assessment of German regulatory framework for PV self-consumption Source: ECLAREON analysis 17 0 2 4 6 8 10 12 14 16 18 2012S2 2013S1 2013S2 PV LCOE (avg.) CAGR S2'12-S2'13 Off-Peak Tariff Peak Tariff 13.3% 18.0% -11.1% EUR ct/ kWh Past evolution of grid electricity price and PV LCOE (MUNICH) • Full grid parity has already been reached in Munich for commercial consumers - System prices in Germany are competitive - The discount rate used for the calculation of LCOE is low - Retail electricity prices charged to commercial consumers are high
    • Platinum sponsors: RESULTSITALY In Italy, full grid parity has been reached and the market is driven by a regulation that fosters self-consumption Past evolution of grid electricity price and PV LCOE (ROME) • The Scambio Sul Posto (SSP) net- metering mechanism allows users with PV systems under 200 kW to obtain credits • It should be noted that this mechanism is currently under discussion among Italian regulators - The nominal power limit has already been cut and it is uncertain whether the SSP will be maintained in the future Assessment of Italian regulatory framework for PV self-consumption Source: ECLAREON analysis 18 0 2 4 6 8 10 12 14 2012S2 2013S1 2013S2 PV LCOE (avg.) CAGR S2'12-S2'13 -2.8% 5.2% -19.8% Peak tariff Mid tariff Off-Peak tariff 1.2% EUR ct/ kWh • Grid parity is an economic reality in Italy - The main drivers are competitive PV system prices, high irradiation levels (in comparison to others EU countries) and relatively expensive grid electricity prices
    • Platinum sponsors: RESULTSSPAIN Grid parity has been reached in Las Palmas, but the regulation is a barrier for market creation in Spain • In Spain, any electricity consumer can generate PV electricity for self- consumption • The latest law proposal de- motivates the installation of self- consumption PV systems - No compensation is allowed for the excess PV generation fed into the grid - A fee is charged for every kWh of PV self-consumption * Assessment of Spanish regulatory framework for PV self-consumption Note: *This fee has not been considered in the economic analysis Source: ECLAREON analysis 19 0 2 4 6 8 10 12 14 16 2012S2 2013S1 2013S2 CAGR S2'12-S2'13 Shoulder Tariff Peak Tariff -23.5% -17.3% -13.5% EUR ct/ kWh PV LCOE (avg.) Past evolution of grid electricity price and PV LCOE (LAS PALMAS) • In Las Palmas, grid parity has been reached, driven by two main factors: - The important decrease experienced by PV system prices - High irradiation levels
    • Platinum sponsors: CONCLUSIONS Main conclusions • Grid parity for the commercial sector has been reached in major markets: Germany, Italy, Spain, and Mexico * • The results of the analysis show that the main driver of PV grid parity is the reduction of PV system prices, one of the main parameters that determine LCOE - LCOE has decreased the least in Germany (11% annual decrease) and the most in France (24%) • Grid parity by itself is no guarantee of market creation, as PV self-consumption will only be fostered if grid parity is combined with governmental regulatory support - Germany, Italy, and Mexico are best positioned for PV self-consumption to represent a cost-effective and sustainable alternative • With PV already competitive against grid electricity in several markets, new trends are posing challenges on grid parity - In Germany, the idea of extending the EEG to on-site self-consumption is under discussion - In Spain, the latest proposal on self-consumption includes a fee on self-consumption (called “peaje de respaldo”) to cover grid charges Note: * Commercial consumers under “Tarifa 2” Source: ECLAREON 20
    • Platinum sponsors: 21 COMING SOON – New issue of the GPM Series focused on Utility Scale PV Plants in various countries Do you want more information about the GPM? Click on the envelope to send us an email  • The GPM reports are massively distributed - Specialized magazines: PV Magazine and others - Specialized websites: Leonardo Energy with 1.4 million visits a year and with over 70,000 subscribers - Professional social media - Senior PV professionals: last GPM issue was emailed to >18,500 professionals - PV associations: collaborating associations distribute the GPM to all their partners Available @ http://www.leonardo-energy.org/ http://www.eclareon.eu/en/GPM BE THE NEXT SPONSOR OF THE GPM Contact us: Davide Sabatino dsa@eclareon.com +34 913 950 155