South Africa Solar Energy Technology Road Map Subject Solar PV Baseline Report (Draft 2) Coordinator: Contributors: Tumi Maphelele Richard Stanford, Bavesh Kooverji Date 10 May 2013 Page 1 of 14 1 South African PV Industry – Overview 1.1 PV Development in South Africa PV technology was introduced to South Africa in the 1980’s; however, up until a few years ago, the solar photovoltaic (PV) industry in South Africa consisted of small scale installations, predominantly off-grid and in rural areas. In the late 1990’s, larger commercial scale projects were implemented, however, these projects were still only in the order of tens of kW in size. In 2010, due to rapidly increasing electricity costs and an ever increasing awareness of global warming issues, there was a marked increase in larger commercial scale projects in the order of hundreds of kW. In 2013, construction began on 18 large, utility scale projects with a combined capacity of 630 MW. These projects are as a result of the Department of Energy’s Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). 9 other projects, with a combined capacity of 417 MW, have achieved preferred bidder status and are currently about to reach financial close. Compared to developed solar PV markets, South Africa is still at a very early stage. The current estimated installed capacity, as of 2012, is 30 MW (PV localisation report) as can be seen in Figure 1 compared to approximately 30 GW installed capacity in Germany. However, the PV market in South Africa is expected to grow rapidly over the next 4 years as can be seen in Figure 2. Figure 1: Installed PV Capacity until 2012 (Source: EScience et al, 2013) Figure 2: Projected growth of the SA PV market (source: EPIA, 2012) 1.2 Geographic Distribution The maps below show the distribution of the larger scale projects in South Africa as well as the solar resource distribution. The first map shows the REIPPPP round 1 and round 2 projects and the second map shows large commercial projects which have been commissioned outside of the REIPPPP process. Key aspects to note are that the REIPPPP projects are dispersed around the country with the major gathering being in the high solar resource areas, away from city centres.
Transcript
South Africa Solar Energy Technology Road Map
Subject Solar PV Baseline Report (Draft 2)
Coordinator:
Contributors:
Tumi Maphelele
Richard Stanford, Bavesh Kooverji
Date 10 May 2013
Page 1 of 14
1 South African PV Industry – Overview
1.1 PV Development in South Africa
PV technology was introduced to South Africa in the 1980’s; however, up until a few years ago, the solar photovoltaic (PV) industry in South Africa consisted of small scale installations, predominantly off-grid and in rural areas. In the late 1990’s, larger commercial scale projects were implemented, however, these projects were still only in the order of tens of kW in size. In 2010, due to rapidly increasing electricity costs and an ever increasing awareness of global warming issues, there was a marked increase in larger commercial scale projects in the order of hundreds of kW. In 2013, construction began on 18 large, utility scale projects with a combined capacity of 630 MW. These projects are as a result of the Department of Energy’s Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). 9 other projects, with a combined capacity of 417 MW, have achieved preferred bidder status and are currently about to reach financial close.
Compared to developed solar PV markets, South Africa is still at a very early stage. The current estimated installed capacity, as of 2012, is 30 MW (PV localisation report) as can be seen in Figure 1 compared to approximately 30 GW installed capacity in Germany. However, the PV market in South Africa is expected to grow rapidly over the next 4 years as can be seen in Figure 2.
Figure 1: Installed PV Capacity until 2012 (Source:
EScience et al, 2013)
Figure 2: Projected growth of the SA PV market (source:
EPIA, 2012)
1.2 Geographic Distribution
The maps below show the distribution of the larger scale projects in South Africa as well as the solar resource distribution. The first map shows the REIPPPP round 1 and round 2 projects and the second map shows large commercial projects which have been commissioned outside of the REIPPPP process.
Key aspects to note are that the REIPPPP projects are dispersed around the country with the major gathering being in the high solar resource areas, away from city centres.
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Figure 3: Round 1 and Round 2 REIPP Projects which have achieved preferred bidder status (Source:
EScience et al, 2013)
The non-REIPPPP commercial projects are focussed around the major city centres (Johannesburg,
Cape Town and Durban). This provides solar PV with a unique advantage of being able to supply
electricity where it is physically required which results in the potential for reducing the demand on
transmission and distribution lines.
The commercial scale projects shown in this map are all privately developed in order to
supplement the grid feed with onsite generation. The driving force behind themajority of these
projects is ‘green’ advertising and social responsibility, however, the cost of PV is reducing to a
point that a few of the later projects will have a levelised cost of energy that is nearing grid parity.
Figure 4: Known Commercial and Industrial Projects built in 2010, 2011 and 2012 (Source: EScience et al,
2013)
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1.3 Key Industry Stakeholders
1.3.1 Government linked solar energy stakeholders
Table 1 below provides a list of the government linked entities which have an active role in the development of PV in South Africa.
Organisation Function and relevant role in renewable energy
Department of Energy (DoE)
Manages energy resources and the utilisation thereof. The DoE also
develops/implements and monitors electricity policy and programmes such as the
Renewable Energy Independent Power Producers Procurement Programme (REIPPPP).
Department of Environmental
Affairs (DEA)
Promotes sustainable utilisation of the country’s natural resources, through
conservation, to enhance economic growth. DEA is also responsible for environmental
impact assessments.
Department of Science and
Technology (DST)
Develops, implements and monitors science and technology policy and programmes.
They are custodians of technology research and development (and manage the South
African Energy Grand Challenge).
Department of Trade and
Industry (DTI)
Develops, implements and monitors economic policy and programmes to enhance
economic growth. DTI, through IDC, is also involved in funding energy infrastructure
projects, particularly renewable energy.
Municipalities
Responsible for securing the delivery of basic services (including energy) in their
municipal areas and for many aspects of Integrated Development Planning. Possibly
also for routing national government subsidies directed towards energy provision.
Municipalities derive the majority of their income from electricity sales.
National Energy Regulator of
South Africa (NERSA)
Regulates energy industries including electricity, piped gas and petroleum pipeline
industries. Oversees licensing and compliance, pricing and tariffs, electricity
infrastructure planning and regulatory reform as the electricity regulator. NERSA has
recently passed and administers the REIPPPP.
South African Cities Network
(SACN)
City management partnership between different spheres of government to support the
governance of South African cities. This is done through an established network which
facilitates the exchange of information, experience and best practices on urban
development.
South African Local
Government Association
(SALGA)
Represents, promotes and protects the interests of the local government sector and its
employees. SALGA has various roles related to local government transformation. It has
a stake in the implementation of renewable energy policies at the local level
South African National Energy
Development Institute
(SANEDI)
The public entity entrusted with the coordination and undertaking of public interest
energy research, development and demonstration. Established by DoE and DST in
October 2004, as part of the state energy company CEF (Pty) Ltd. SANEDI is tasked
with developing human capital in the energy research sector and also with funding
fundamental and applied research to create and maintain a culture of innovation in the
energy sector. The specific renewable energy arm of SANEDI is the Renewable Energy
Centre of Research and Development (RECORD).
Table 1: Government linked solar energy stakeholders and their roles (Source: adapted from Holm.d et al, 2010)
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1.3.2 Sector Associations
Key sector associations include:
Acronym Full Name
SANEA South African National Energy Agency
SAPVIA South African Photovoltaic Industry Association
SESSA Sustainable Energy Society of South Africa
Table 2: Key sector associations
1.3.3 Financiers
The major financiers in the solar PV industry are listed in Table 3 below. All of these financiers have supplied debt financing to developers for the REIPPP Programme.
Key Industry Financiers
Nedbank Capital
Standard Bank
ABSA
Industrial Development Corporation (IDC)
Rand Merchant Bank (RMB)
Development Bank of South Africa (DBSA)
Investec
Old Mutual
Table 3: Key solar PV financiers
1.4 Research and Development
Research and development (R&D) in South Africa, in terms of PV technology development, is currently being carried out by a number of tertiary education institutions such as:
South African Research Centres
Centre for Renewable and Sustainable Energy Studies (CRSES) at University of Stellenbosch
Energy Research Centre at University of Cape Town
University of Johannesburg
University of Fort Hare
Nelson Mandel Metropolitan University
University of Pretoria
Council for Scientific and Industrial Research
Tshwane University of Technology Table 4: Key research institutions
The private sector also carries out R&D, however, the private sector is currently not big enough to make a significant contribution to the development of PV technology in South Africa.
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2 Solar PV Technology Overview
2.1 PV Technical Basics
A PV System generally consists of:
• PV modules mounted on some form of mounting structure which is either at a fixed inclination angle or tracks the sun in some form or other;
• An inverter which converts DC electricity into grid compliant AC energy;
• Switchgear, protection and metering devices;
• DC and AC cabling;
• Batteries (for off grid applications);
• And various balance of plant.
Figure 5: Grid Connected PV System overview
2.1.1 PV Modules
Table 5 below lists the different types of commercial PV cell technologies available globally. Crystalline Silicon and Thin film PV are the most developed technologies and thus make up the lion’s share of the global PV market. Concentrated PV technologies have developed significantly over recent years and are being increasingly implemented in projects worldwide.
Concentrated PV (CPV) Uses lenses to focus sunlight on PV cells ~25%
Table 5: Commercial PV cell technologies
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Organic cells, dye-sensitized cells and thermo PV are still at a fairly early stage of development and are not seen as commercially viable products at this stage.
Organic Cells Fully organic approach 3-8%
Dye-sensitized cells A hybrid of an organic cell retaining inorganic
component 2-11%
Gallium Arsenide
Crystalline material suitable for PV with good
efficiency at high temperatures but are infinitively
expensive.
Up to 35%
Ribbon Pulled Silicon
Ribbons are placed into a silicon melt and pulled.
Less expensive than conventional silicon cells since
there is no need for wafer cutting.
-
Hybrid Cells
Hybrid cells combine the advantages crystalline
and amorphous cells to provide a high efficiency
and high sensitivity to low light conditions
-
Thermo PV (TPV) High efficiency PV cell combined with a thermal
radiation source NA
Table 6: Other PV cell technologies under development
2.2 Current status of cost and performance
2.2.1 PV module costs
PV module prices have been decreasing steadily since the 1980’s, however, since 2008, the prices have decreased rapidly as can be seen in Figure 6. The rapid decrease in module price can be attributed to numerous reasons including:
• Rapid increase in global demand which led to economies of scale;
Recently, however, the PV module price has stabilised such that the PV module prices have risen for the first time in four years. Many analysts forecast that the PV module price will stabilise now, and potentially increase slightly over the next year or two.
2.2.2 PV system costs
PV modules make up approximately 50% of the cost of grid connected PV systems and 25% of off-grid systems as can be seen in Figure 7. Therefore, the cost of PV modules has a very large impact on the total cost of PV systems. The other major cost items are the inverters, mounting structures, cabling and batteries for off-grid systems.
Figure 7: Percentage cost breakdown of PV systems (source: EScience et al, 2013)
The current estimated installed costs for different PV systems can be seen in Table 7 below along with the estimated potential for local content at the moment. The low local content percentages can mainly be attributed to the fact that PV modules make up such a large portion of the total installed cost.
PV System Type Installed Cost Current potential local content
Utility scale fixed tilt PV system R22.47/W 48%
Utility scale fixed tracking system PV system R24.51/W 50%
Commercial/industrial scale PV system R20.00/W 43%
Residential gird-supported PV system R27.50/W 40%
Residential off-grid PV system R47.00/W 30%
Table 7: Estimated costs for different types of PV systems (source: EScience et al, 2013)
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2.3 Global uptake of Solar PV
As can be seen in Figure 8 below, the installed capacity of PV systems has increased exponentially
since 2008 in line with the decrease in module prices.
Figure 8: Global installed capacity of PV from 1992 – 2012 (source: IEA, 2012)
2.4 PV Technology Development in South Africa
2.4.1 Key Localisation Drivers
• Local content requirements in REIPPP Programme
2.4.2 Key Localisation Impediments
• Lack of key local resources such as silicon, glass, skilled persons
• Lack of sufficient demand to entice manufacturing facilities – it is estimated that a minimum annual demand of 600 MW is required in order for PV module manufacturers to be enticed to set up full PV module manufacturing facilities.
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3 South African PV Market
3.1 Key Market Segments
The South African (and global) solar PV market can be split up into market segments as shown in Table 8. Globally, the three market segments each have roughly the same market share.
Market Segment Capacity Current Market Drivers
Small residential market segment < 10 KW • Energy security (incl. backup)
• Offset consumption
Medium to large commercial and
industrial market segment 10 kW – 1 MW
• Offset consumption
• ‘Green’ Image
Large utility-scale market segment > 1 MW
• Feed in Tariff (REIPPPP)
• Offset diesel consumption for
remote large energy users such as
mines
Table 8: Key PV market segments
3.2 Current market size and recent growth
The graphs below show what the imminent solar PV market size will be once the REIPPPP projects are constructed. They go further by forecasting the growth of the PV market in South Africa depending on the adoption rates.
Figure 9: Projected market growth (source: EScience et al, 2013)
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3.3 Leading Suppliers
3.3.1 Technology Providers
Local Market Leaders Other International
Suppliers Comment
PV Module
• Tenesol (acquired by
Sunpower)
• Solaire Direct
• Set Solar
• ART Solar (setting up facility)
• Jinko Solar
• Canadian Solar
• BYD
• Hanwha SolarOne
• Solarworld
• Sunpower
• Yingli
• Emerging industry
• Market dominated by imported
• Local companies - assembly
lines of c-Si technology
• Total capacity: 158 MW
• Potential assembly capacity: 308
MW
• Local content: 21.5%-25.5%
Inverter
• AEG
• TUB (setting up facility to
manufacture JEMA inverters)
• MLT Drives
• Microcare
• SMA (have set up a service
office in SA)
• SMA
• KACO
• Victron
• Outback
• Emerging industry
• Market dominated by imported
products
• Locally manufactured inverters
tend to have higher prices than
imported inverters
• Local content varies between
35%-75% depending on the
manufacturer
Mounting
Structures
• PowerWay
• Schletter
• PIA Solar
• Hilti
•
• Emerging industry
• Have significant cost reductions
potential
• Manufacturing of components
generally outsourced to local
aluminium/steel companies
• Local content is about 95% due
to raw steel and aluminium
being considered 100% local Table 9: PV Technology market leaders (source: adapted from localization report)
3.3.2 Project Developers
Below is a list of project developers which have reached preferred bidder statues in round 1 and round 2 of the REIPPPP process.
Project Developers
SlimSun BioTherm Energy Soitec Scatec Solar
Momentous Energy AE-AMD Renewable Energy
Ltd
Mainstream Renewable
Power Moncada
Mulilo Renewable
Energy SunEdison Energy SolarReserve LLC Solar Capital
Building Energy Solaire Direct SunEdison Energy Core Energy
Erika Energy Kensani Cobra Gransolar
WBHO Building
Energy Acciona Energy Enel Green Power
Table 10: Project Developers who have reached preferred bidder status in REIPPPP round 1 and round 2
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4 Research, Developments and Demonstration
4.1 Research Institutions
The table below lists the research institutions which are active in the research and development of PV in South Africa as well as the relevant spheres of research which are being undertaken at each.
Institution Research and Development
Centre for Renewable and
Sustainable Energy Studies
(CRSES) at University of
Stellenbosch
• The Centre for Renewable and Sustainable Energy Studies (CRSES) based at the
University of Stellenbosch (US) is the hub for the Postgraduate Programme in
Renewable and Sustainable Energy Studies. This programme is funded by the
Department of Science and Technology (DST).
• The ‘INTRODUCTION TO SOLAR COURSE’ by the CRSES focuses on the study of PV
systems.
• There is limited PV research conducted at the University (the focus at US is more on
Solar Thermal and CSP technology)
Web: http://www.crses.sun.ac.za/index.php
Energy Research Centre
(ERC) at University of
Cape Town
• The Energy Research Centre (ERC) considers the policy and planning segments of
renewable energy studies.
• Student research completed on the GIS mapping and solar potential in SA. Current
research serves to quantify the capacity credit of solar PV in SA and the amount of
power that can be relied on in the capacity planning process, or the reliability of
installed PV plants.
Web: http://www.erc.uct.ac.za/index.htm
University of
Johannesburg (UJ)
• Dr Vivian Alberts from the Department of Physics developed and improved the novel
CIGS thin-film PV technology. This research was partly funded by the Innovation Fund
(DST).
• Research areas include: Thin film solar research, Photovoltaic device simulation and
University of Pretoria (UP) • Thin-film research group http://web.up.ac.za/default.asp?ipkCategoryID=2222&sub=1&parentid=2050&subid=2207&ipk
lookid=11
Council for Scientific and
Industrial Research
(CSIR)
• Previous research: Dye-sensitised solar cells (DSC) and Organic Photovoltaics (OPV’s)
• Nanomaterial-PV applications
• Hybrid PV power supply system
• Environmental and social impact studies on PV power plants Web: http://researchspace.csir.co.za/dspace/bitstream/10204/3749/1/Cummings_d2_2009.pdf
Tshwane University of
Technology (TUT) • PV electrification project at Ndumo Game reserve completed by the Centre for Energy
and Electric Power (CEEP).
Table 11: Research institutions and the relevant solar PV research being conducted by each
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5 Public Policies and Initiatives
Currently, the PV market is being driven and assisted by the following policies and initiatives:
• IRP 2012-2030
• REIPPPP
• Eskom Standard Offer
5.1 IRP 2010 - 2030
In 2010, the Department of Energy (DoE) released the Integrated Resource Plan (IRP 2010 - 2030) which aimed at allocating capacities to different electricity generating technologies till 2030. The allocated capacities for each technology can be seen in Table 12 below. The allocation of 8400 MW of PV capacity by 2030 has assisted the development of the REIPPP Programme and has been one of the driving forces behind the development of a South African PV market.
Table 12: Capacity allocations according to the IRP 2010 – 2030
5.2 REIPPPP
The Renewable Energy Independent Power Producer Procurement (REIPPP) Programme was established by South Africa’s Department of Energy (DoE) through the finalization of the Integrated Resource Plan (IRP) of 2010. This IRP aims to provide an installed capacity of Solar PV of 8400 MW between the periods 2010-2030. The round 1 window of the REIPPP Programme allowed 18 Solar-PV projects to obtain preferred bidders status, which totalled to a 632 MW PV capacity. The average bid price for the round one projects was R2.75/kWh with a local content allocation of 28.5%. The round 2 window of the REIPPP Programme allowed 9 Solar-PV projects to obtain preferred bidders status, which totalled to a 417.1 MW PV capacity. The average bid price for the round two projects was R1.65/kWh with a local content allocation of 47.5%. The decreasing
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trend in average PV bid price and the increasing use of local content from round 1 to round 2 sheds a positive light on the future rounds of the REIPPP Porgramme.
5.3 Eskom Standard Offer
In 2012, Eskom initiated an incentive for small scale renewable energy solutions by including them to be funded through Eskom’s Standard Offer (http://www.eskomidm.co.za/industrial/sop). The incentive includes a payment of R1.20 for every kWh saved during weekdays between 6am and 10pm over a 3 year period for projects between 10kW and 1 MW.
The total allocation for this offer is 10 MW. According to Knox. A, 2013,a total of 48 Solar PV project applications have been received by Eskom, however, only two projects have successfully been contracted thus far.
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6 References
1) EScience Associates, Urban-Econ Development Economists and Chris Ahlfeldt, 2013, The
localisation potential of photovoltaics (PV) and a strategy to support large scale roll-out in South
Africa, Draft Final, SAPVIA, WWF and DTI
2) European Photovoltaic Industry Association (EPIA), 2012, Global Market Outlook For
Photovoltaics until 2016
3) Holm. D, Klunne. WJ, Mapako. M, Mehlwana. M, Meyer. E, Peach. W and Roos. T, 2010, Solar
Energy Baseline of South Africa, Department of Science and Technology
4) European Photovoltaic Industry Association (EPIA), 2012, Global Market Outlook For
Photovoltaics until 2016
5) Mints. P, 2013, Solar PV Profit's Last Stand, Available [Online]:
