Dr Peter Mark Jansson PP PEAssociate Professor – Electrical Engineering - Bucknell UniversityPresident – INTEGRATED SYSTEMSSenior Member IEEE

Renewable Energy Workshop 2012

“Global Market Impacts on Wind and PV Technologies”

A Presentation to the Bucknell University Renewable Energy Workshop – 12 May 2012

PS10 CSP Plant – Andalucia, Spain

Aims

Review two renewable energy technologies current market drivers

▪ Technology, economics, electricity demand, environmental concerns, modularity and construction ease, government policy

Resulting Market Trends US and Global

Impact on Renewable Costs and Electricity Prices

Over $3/watt

Market Drivers of Renewable Growth 1) Growing Global Energy/Electrical

Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives

▪ Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of

Construction

Market Drivers of Renewable Growth 1) Growing Global Energy/Electrical

Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives

▪ Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of

Construction

Sources of Energy - US

Source: EIA Energy Outlook 2009 (Early Release), Table 1, 2008 Data

Petroleum, 38.9

Coal, 22.6

Natural Gas, 24.1

Nuclear, 9.3

Hydro, 2.6

Biomass, 3 Other, 1.4

CO2 Emissions (millions of metric tons . and per quad)Petroleum: 2598, 64.0 Natural Gas: 1198,53.0Coal: 2115, 92.3

About 86% Fossil Fuels

1 Quad = 293 billion kWh (actual)1 Quad = 98 billion kWh (used, taking into account efficiency)

US Electricity Sources (‘07 & ‘09)

US EIA - 2007

US EIA - 2009

Source: http://www.eia.gov/cneaf/electricity/epa/figes1.html

Global & US Trends

Prime Movers (World Electricity 1998,2005,2008 & US 2009) Fossil Fuel (Thermal) powered – 62.8% 66.0% 67.8%

69.1% Nuclear fission – 16.9% 15.2% 13.5% 20.2% Hydro powered – 18.8% 16.7% 15.9% 6.8% Renewables & Other** – 1.5% 2.1% 2.8% 3.9% ** - ‘Other’ includes geothermal, wood, solar and biomass

Fossil

Hydro

Nuclear

Source: USDOE - EIA and IEA.org

US Generation Capacity Trends

Hydro and Other Renewables

Historical and Projected US Energy Consumption

EnergyinQuads

Source: EIA Annual Energy Outlook, 2010Data says we will be 81% Fossil in 2035!!

The World: Top Energy Users (in Quad), 2006 Data

USA – 99.9 China – 73.8 Russia – 30.4 Japan – 22.8 India – 17.7 Germany – 14.6 Canada – 14.0 France – 11.4 UK – 9.8 Brazil – 9.6

World total is 472; Average per 100 Million people is about 7.32. If world used US averagetotal consumption would be about 2148 quad!

Source: US DOE EIA

Market Drivers of Renewable Growth 1) Growing Global Energy/Electrical

Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives

▪ Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of

Construction

PV Cell Research

SOURCE: S.Kurtz, “Opportunities and Challenges for Development of a Mature Concentrating Photovltaic Power Industry”, NREL Technical Report Feb 2009

Photovoltaics

Historic Market Growth Technology improvement Near mass production in China

Historical PV Data (Cost v. Market)

SOURCE: U.K.W. Schwabe MSE Thesis 2011 Rowan University

Global PV Market Growth

2010 – 143%2011 – 31.8%

2005-2011CAGR – 61.5%

SOURCE: Schwabe and Jansson

PV Industry Experience Curve

SOURCE: U.K.W. Schwabe MSE Thesis 2011 Rowan University

2011> 62 GW

<$0.95/ W

Market Drivers of Renewable Growth 1) Growing Global Energy/Electrical

Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives

▪ Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of

Construction

Cost of PV Electricity

SOURCE: U.K.W. Schwabe MSE Thesis 2011 Rowan University

2012 - $0.9/w module - $3.5o/w systems

SOURCES: Prometheus Institute, INTEGRATED SYSTEMS , RAI Services, Inc.

2012

Cost of PV Electricity

EIA - NJ All Sector Weighted Average: 14.84 ¢ /kWh ---------------------------------------------

Moving Toward Grid Parity2012 EIA – PA Residential Average: 12.6 ¢ /kWh ---------------------------------------------

SOURCES: U.K.W. Schwabe, INTEGRATED SYSTEMS

2011 USDoL NY/NJ Average: 20.2 ¢ /kWh ----------------------------

Ball park Energy Costs

Source: http://www.oe.energy.gov/DocumentsandMedia/adequacy_report_01-09-09.pdf

Historical Change in Renewable Economics, Constant 2005 Dollars

Source: National RenewableEnergy Lab (NREL), Energy Analysis Office

Renewable Costs

SOURCE: Renewables 2011 – Global Status Report

Renewable Costs

SOURCE: Renewables 2011 – Global Status Report

Renewable Costs

SOURCE: Renewables 2011 – Global Status Report

Current Market Trends?

Global Hydro Capacity Continues to increase Large projects less so than small

projects Wind

Most rapidly expanding in terms of capacity

Solar Photovoltaics (PV) Most rapidly expanding in terms of

growth rate

Non-Hydro Renewables by State

Global Wind & PV Markets (1994-present)

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 201210

100

1000

10000

100000

69.4 77.6 88.6125.8

154.9201.3

287.7390.5

561.8744

927

1466 1744

2826

59507500

1820024000

730

1290 12831530

25203440 3760

6500 7270 8133 820711531

1519719865

2705138600 35800 41000

MWs of Wind

MWs of PV

SOURCE: Jansson 2012

Wind and PV vs. World Electric Capacity

World Annual Generation Changes New

Year ΔGrowth Wind & PV % 2008 +157 GW 33 GW 21 % 2009 +127 GW 46 GW 36 % 2010 +157 GW 54 GW 34% 2011 +61 GW 65 GW 106%

World Market Update: 1st Quarter 2012 World Wind demand is again expected to

be higher than 2011 demand US market growth of 1,695MW (new wind)

projects is 52% higher than 2011 Quarter 1* World Photovoltaic demand is also

expected to exceed 2011 performance Q1'12 global PV demand is now forecast at 6.9

GW, down 35% Q/Q, but up a huge 146% Y/Y** SOURCES: * - American Wind Energy Association - http://www.awea.org/learnabout/industry_stats/index.cfm * * - Solarbuzz -

http://solarbuzz.com/our-research/recent-findings/expectations-policy-adjustments-germany-drive-global-pv-demand-146-yy-q

Levelized Cost of Electricity

Cents per kWh Min

Max 2012* Wind Costs (2009) 8.4

14.2 5-13

PV Costs (2009) 13.2 29.8 7-18

* - Does not include 30% Federal Tax Credit, depends on local resource

2009 Data Source: http://www.epa.gov/cleanenergy/documents/renewables_cost_data.xls

Capital Investment for New Generation Wind

$1.5 - $2.00 / Watt PV

$2 – $3.50 / Watt Coal

$3-$3.50 / Watt Gas

$1-$1.50 / Watt Nuclear

$4-6.50 / Watt

SOURCE: http://www.ewea.org/index.php?id=1639

SOURCE: http://www.anga.us/issues--policy/power-generation/clean--efficient

State Variation in Electric Rates

The U.S average residential retail price of electricity was 11.53 cents per kWh in 2010

SOURCE: http://www.electricchoice.com/electricity-prices-by-state.php

Recent NY/NJ Retail Prices

SOURCE: U.S. Dept. of Labor – BLS –News Release 30 Nov 2011

Market Drivers of Renewable Growth 1) Growing Global Energy/Electrical

Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives

▪ Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of

Construction

Carbon Neutrality of Renewables

Climate Change is… US Opinion

Under Ex-aggeratedGenerally CorrectOver Exag-geratedNo Opinion

SOURCE: 2011 Gallup Poll

The greenhouse effect makes life on Earth possible…

Why Renewables?

0

250

500

750

0200400600

Siegenthaler et al 2005Vostok + EPICA Dome C

Age / 000 years before present

CO

2 / pp

mv

You are Here

396 ppm

NOAA Data from Hawaii

April 2012: 396.18 ppmApril 2011: 393.28 ppm

Next year over 400 ppm !

U.S Annual Average Temperature

Source: http://www.noaanews.noaa.gov/stories2009/images/1208natltemp.png

Market Drivers of Renewable Growth 1) Growing Global Energy/Electrical

Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives

▪ Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of

Construction

Federal RE Tax Credits

Homeowners and Businesses 30% Renewable Energy Investment

Tax Credit

Businesses and Investors Accelerated Depreciation

Renewable Portfolio Standards

30 States with min. standards7 States with voluntary goalsSOURCE: http://205.254.135.7/todayinenergy/detail.cfm?

id=4850

Source: http://www.dsireusa.org/

State renewable portfolio standardState renewable portfolio goalSolar water heating eligible *†

Extra credit for solar or customer-sited renewablesIncludes separate tier of non-renewable alternative resources

WA: 15% by 2020*

CA: 20% by 2010

☼ NV: 25% by 2025*

☼ AZ: 15% by 2025

☼ NM: 20% by 2020 (IOUs)

10% by 2020 (co-ops)

HI: 40% by 2030

☼ Minimum solar or customer-sited requirement

TX: 5,880 MW by 2015

UT: 20% by 2025*

☼ CO: 20% by 2020 (IOUs)

10% by 2020 (co-ops & large munis)*

MT: 15% by 2015

ND: 10% by 2015 SD: 10% by 2015

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

☼ MO: 15% by 2021

WI: Varies by utility;

10% by 2015 goal

MI: 10% + 1,100 MW by 2015*

☼ OH: 25% by 2025†

ME: 30% by 2000New RE: 10% by 2017

☼ NH: 23.8% by 2025☼ MA: 15% by

2020+ 1% annual increase(Class I Renewables)RI: 16% by 2020

CT: 23% by 2020

☼ NY: 24% by 2013

☼ NJ: 22.5% by 2021☼ PA: 18% by 2020†

☼ MD: 20% by 2022☼ DE: 20% by 2019*☼ DC: 20% by 2020

VA: 15% by 2025*

☼ NC: 12.5% by 2021 (IOUs)

10% by 2018 (co-ops & munis)

VT: (1) RE meets any increase in retail sales by

2012; (2) 20% RE & CHP by 2017

30 states & DC

have an RPS7 states have goals

KS: 20% by 2020

☼ OR: 25% by 2025 (large utilities)*

5% - 10% by 2025 (smaller utilities)

☼ IL: 25% by 2025

Renewable Portfolio Standards

States with Solar REC Markets

Solar Renewable Energy Credits

SOURCE:http://srectrade.com/srec_prices.php

Pennsylvania SREC History

SOURCE: http://srectrade.com/pennsylvania_srec.php

Time Period SREC Value

Autumn 2009 – December 2010 $250-$300 / MWhr

January 2011 – March 2011 $176 -$250 / MWhr

April 2011 $ 100 / MWhrMay-June 2011 $ 80 / MWhrJuly 2011 $ 50 / MWhrAugust 2011 $ 25 / MWhrSep-December 2011 $ 10-20 / MWhrJanuary 2012 $ 20-30 / MWhrFebruary 2012 $ 10-35 / MWhrMarch 2012 $ 10-20 / MWhrApril 2012 $ 20 / MWhr

SREC Markets Weak from Overbuild

Market Drivers of Renewable Growth 1) Growing Global Energy/Electrical

Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives

▪ Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of

Construction

3 MW (Tulleytown,PA) PV plant Designed in 6 months Permitted in 3 months Constructed in 6 months

Multiple Factors Favor Renewables Loss of any one market driver will not change

momentum of this industry Most of states in the US (including PA) now have

aggressive renewable portfolio standards requiring ever increasing levels of wind, solar and other renewable based electricity.

New Jersey’s Experiment was a success – one state can impact global markets and investment in a renewable technology

The global demand for wind systems and photovoltaic (PV) systems has been doubling every 1-3 years.