Solar shines in global shift to renewables
By Tim Buckley on 22 May 2018
A 70 MW floating PV plant in construction in Anhui province, China
Solar energy is taking an increasingly prominent role in driving the ongoing transformation of global electricity generation markets alongside gains in storage, wind, hydroelectricity and energy efficiency.
IEEFA has today released a new report examining the global solar market and the ever-increasing scale of investment, the speed of implementation and the rapidly broadening range of applications that are becoming commercially viable e.g. concentrated solar power, floating solar, solar fish farms, commercial behind the meter applications, hybrid wind-solar-battery projects and in India, even solar-coal hybrid structures.
As readers of Renew Economy hear repeatedly, corporates, policy makers and regulators are all finding the speed of transformation hard to grasp, particularly in the crucial China and India markets, but the results of the past year are a good indicator of the trend.
Bloomberg New Energy Finance (BNEF) reports that 98 gigawatts (GW) of solar was installed globally in 2017, a 31% increase from the prior year.
Meanwhile – and just as important – BNEF estimates the levelized cost of solar dropped 15% year-on-year to US$86/MWh for capacity installed in 2017.
Leading the charge, China accounted for more than half the newly installed solar capacity, or some 53 GW, a figure that as recently as 2014 would have eclipsed the global total of solar installations.
While India’s current installation numbers aren’t as dramatic as China’s, the country is clearly embarking on a massive transformation of its electricity sector as well.
The country’s National Electricity Plan, released in March 2018, affirms national intentions to increase renewable energy capacity to 275 GW by 2027, with solar representing two-thirds of this total.
As renewables rise in India, thermal power capacity is forecast to decline to just 43% of the nation’s total in 2027, down from 66% today.
Major solar energy tenders are occurring every week in India (for May 2018 so far 1,000MW,500MW,750MW,200MWand 50MW) at prices now consistently 10-20% below the cost of existing domestic thermal power generation (and 50% below new imported coal fired power).
There is a remarkable buy-in across the country from the government through to the largest corporate incumbents like NTPC, Adani and Tata, each of whom are now amongst the largest and most aggressively ambitious investors in Indian renewables.
Only last week Tata Power committed to invest US$5bn to reach 12GW of renewables by 2028, such that more than half their capacity will be zero emissions sourced (up from zero in 2014 and 30% today).
Our report tracks the largest solar projects operational in the world, and the lead keeps changing. Adani commissioned the then world’s largest solar project at 648MW in Tamil Nadu in mid-2017, but it has slipped to the sixth position in less than a year – refer table.
By 2019 Rajasthan’s 2,225MW Bhadla industrial park is due for full commissioning; three times the size.
And Gujarat is now exploring a 5GW solar park ;double again.
Fourteen of the World’s Largest Operating Solar Projects
Source: Company & Press reports, IEEFA estimates
China and India are hardly alone on this front, as scores of other countries embrace solar.
Saudi Arabia, for one, announced in March 2018 a plan to build 200 GW of solar capacity by 2030, yet another marker in the transition under way across global energy markets. The uptake of solar is gathering momentum too in Europe and the Americas.
As highlighted in The Climate Council’s new report “Renewables & Business: Cutting Prices & Pollution”, the rise of Australian commercial and industrial solar (particularly rooftop) is really starting to boom.
With record high electricity prices crippling businesses, this is expected to keep accelerating, such that even the deliberately flawed NEG is unlikely to to slow this trend.
Not-withstanding this lack of a central policy to sensibly transition our electricity system, Australia remains a world leader in the uptake of solar.
This month cumulative solar installs passed through 7GW. Every week we are reading about new solar investments each of A$100-200m or more for regional Australia, with the speed of construction and uptake clearly evident.
Last week saw the partial commissioning of Australia’s largest to-date solar plant under construction, that being Enel of Italy’s 220MW Bungala solar farm in Port Augusta.
The same week we saw Lighthouse Solar’s 100MW Clare solar farm grid connected – the biggest to date in Queensland.
But the list of projects underway is changing so fast it is impossible to keep up with the latest largest so far solar development. The Queensland government is trying, with a useful reference map.
Solar Reserve’sAurora150MW CSP with 1,100MWh storage is a leading example of Australia’s global leadership in deploying new solar technologies, with this development’s price for peaking electricity setting a new global benchmark low.
And following the brilliant success of Tesla’s South Australian lithium ion battery development, Victoria is now replicating this with two more distributed utility scale battery projects by Tesla and Fluence, one linked to a solar project.
Having shown the way in Australia, Tesla has now commissioned a 18MW Belgium storage system for grid stabilisation, with a 30-40MW virtual peaking solar power plant to come.
And having installed the U.K.’s largest to-date unsubsidised solar with storage power plant(10MW solar, 6MW of storage), Anesco is looking to install 380MW of UK solar and storage by 2020.
Floating solar – another innovation with multiple advantages – is rapidly scaling up.
While Australia is still just trialing this, having commissioned a 100kWsystem in January 2018 at Lismore’s sewage treatment plant, China commissioned a 40MW project in 2017 and has two 150MW projects nearing completion in 2018.
Meanwhile, Maharashtra has announced requests for proposals for 1,000MW of floating solar, with India’s Solar Energy Corporation of India (SECI) having issued an expression of interest in support of a national target of 10GWof floating solar being released back in December 2017.
Looking at the combination of our coking and thermal coal plus liquid natural gas (LNG) positions, Australia is one of the three largest exporters of fossil fuels globally.
We have major industries at clear stranded asset risk and potentially terminal decline over the very long term. Even our 64% global share of seaborne coking coal is threatened longer term by the combination of technology innovation and carbon emissions policies.
But there-in lies the need to pursue opportunities in industries of the future. Renew Economy provided a glimpse of what could be possible in terms of Australia with CWP’s $20bn 6GW of wind and 3GW of solar Pilbara mega-project for renewable energy exports at world scale.
A vision that might take a couple of decades to come to full fruition, but in doing so it could transform world energy markets entirely.
More immediately, the West Australian budget is a beneficiary of our growing position as a world leader in lithium ion processing.
Technology innovation, deflation, ever-larger scale and the constant breaking of records are the clear lessons of solar led energy transformation now underway.
Australia should be pursing the opportunities for investment, jobs and export industries of the future as a top national priority.
Authors: Tim Buckley / Kashish Shah – IEEFA
Tim Buckley is IEEFA’s director of energy finance studies, Australasia.
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