network June 2016
British Photovoltaic Association Member Magazine
TAKING ON THE WORLD
The BPVA is helping the UK solar industry seek global markets
NEW SOLAR DAWN
CELTIC GOLD
Lifting the lid on Iran’s renewables potential
Ireland’s solar future looks rosy
POWER LINE
FLEXED AND READY
Lightsource’s Nick Boyle on private wire PPAs
BIPV roofing launches in the UK
BPVA
British Photovoltaic Association
REAL VALUE SOLAR HAS NEVER LOOKED SO GOOD
With SolarWorld, you benefit from quality modules made in Germany. Solar power enables you to protect yourself against rising energy prices, preserve the environment and secure energy for the future. Your local SolarWorld Certified Partners will ensure you peace of mind thanks to their excellent all-round service. OVER 40 YEARS OF SOLAR EXPERIENCE: As a PV pioneer, we have more than 40 years of technology experience. We turn this potential into top quality and future-oriented solutions for our customers. WWW.SOLARWORLD-UK.CO.UK
SOLARWORLD QUALITY – VALUE YOU CAN COUNT ON
Welcome Hello and welcome to the first issue of the BPVA’s new members’ magazine, Network. The BPVA was set up six years ago to be the voice of the UK solar PV industry. Today our remit is about empowering the UK solar industry at home and abroad. With Network we will communicate our efforts and those of our members to a wider audience in the UK and internationally. With over 10GW of PV installed, the UK solar industry has developed significant expertise that can be offered to new and emerging markets, creating export opportunities. We are committed to growing Network’s global reach as the leading platform for promoting the sector. Regulatory changes have created a challenging economic environment in the UK solar industry, but we are confident of the outlook for the rooftop sector. Our first issue includes a discussion about the BPVA’s future strategy, reflecting the transition the UK and global PV industry is going through. There are positive signs that Ireland’s solar market is on the cusp of taking off. Several large-scale projects are in the pipeline. Annually Ireland’s solar PV installations could exceed 250MW. With the lifting of international trade sanctions, western investment is seeking opportunities in Iran, including the country’s nascent renewables industry. Our first issue brings you up to speed on Iran’s solar potential, developments in policy and highlights the challenges that remain in terms of providing investors and developers with assurances they need before entering this exciting potential market. The UK is shaping up to be one of Europe’s first adopters of energy storage and electric vehicle (EV) demand is growing, driven by British consumers’ growing interest in energy self-sufficiency. Network aims to keep you up to speed on synergies between the solar PV and these emerging sectors. These are, without doubt, challenging times for the UK’s rooftop solar industry. The recent cuts to support will thin the industry out. The bright side is that established players are finding new models and approaches to enhance the value of solar energy. The focus has switched to developing offerings and services that increase self-sufficiency through optimised use of solar PV electricity. That can only be good news for both residential consumers and large energy users. In this issue we hear from Lightsource about private-wire power purchase agreements, which the company is using to finance projects for commercial customers. We hope you enjoy reading Network and look forward to hearing your thoughts and ideas. Reza Shaybani Chairman
www.bpva.org.uk
The Rt Hon Lord Barker of Battle President
June 2016 | network 1
Contents 24
Iran’s new solar dawn
NEWS 5 Wind and solar investments up, fossil fuels down, according to BNEF 6 SunEdison files for Chapter 11 Portugal runs on renewables for four days 7
India hits 7GW of solar installations
8
Iran publishes new FiT rates Spain to remove ‘sun tax’
9
UK introduces new FiT rates
10 UK regulator urges power firms to connect more renewables Launch of European solar and storage task force announced 11 JinkoSolar to build three solar PV projects in Mexico Northern Ireland’s first large-scale solar farm connected Hive expands into Spain
14
UK firm launches BIPV roofing products
15 Director of BPVA Global appointed SolarWorld launches 300 watt bifacial solar module at Intersolar 16 Aleo Solar supplies modules for San Marino’s largest solar system Haymarket and BPVA launch Smarter Living magazine SMA clings to global inverter top spot
Smart Living magazine, p16
13 Conergy furthers global presence
12 Vector Cuatro scores more business in Latin America and Asia 13 Conergy increases MENA presence Leclanché opens North American subsidiary
2 network | June 2016
www.bpva.org.uk
network
32 Lightsource’s floating solar farm
British Photovoltaic Association Member Magazine June 2016
© Copyright BPVA 2016 Network is published six times a year by the British Photovoltaic Association (BPVA) and distributed free of charge to the association’s membership.
48
37
Supercharged
Where next?
Contributors Nick Boyle (Lightsource), Justin Canning (BIPVco), Alexandra DeSouza (BPVA), Robert Goss (Solar Electric Ireland), Miguel Pérez (Vector Cuatro), Gavin Quantock (Deloitte), Mark Varian (Eversheds), Iwan Walters (Eversheds), Siobhan Goss (BPVA), Sara Verbruggen Publisher The BPVA Reza Shaybani (Chairman) Olivia Hall (Director)
FEATURES 18
For all enquiries email network@bpva.org.uk
Thinking big about solar
BPVA chairman, Reza Shaybani, reflects on the current state of the UK solar sector and discusses the association’s new strategic direction
24 A new solar dawn in Iran Iran’s solar potential is attracting global interest
32 Solar pricing security
37 Where to invest next? Deloitte’s Gavin Quantock on new markets and new opportunities for solar investments
43 Risk and reward of being an early mover The clean energy and sustainability group at Eversheds law firm is expanding its international outreach
46 Events
Lightsource’s CEO Nick Boyle explains private-wire agreements for the commercial solar segment
Listings of solar PV conferences and exhibitions
34 Ireland’s solar PV market is ready to roar
48 Fully charged and ready to go
Ireland’s new minority government views solar positively, which could lead to support needed to unlock demand
Delta Electronics has developed a fast-charging station that won’t be left in the dust when the next generation of e-cars arrive
BPVA www.bpva.org.uk
British Photovoltaic Association
JOIN US! Find out more about the benefits
All rights reserved. No part of the publication may be reproduced in material form (including photocopying or storing it in some medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright owner, except in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency. Applications for the copyright owner’s written permission to reproduce any part of this publication should be addressed to BPVA. No responsibility is accepted by BPVA, its employees or agents for the accuracy of the information contained herein. Express or implied opinions given by the authors are not necessarily those of the BPVA. Designed in the UK by publishink: info@publishink.co.uk
of being a BPVA member on p40
June 2016 | network 3
SOLAR POWER
ENERGY STORAGE
SMART TECHNOLOGY
Clever ideas for a cleaner, greener future
ELECTRIC VEHICLES
MAGAZINE
LOWER BILLS FOR LIFE Get a home battery & start saving now!
Inside
FIVE STUNNING SOLAR HOMES MEET YOUR NEXT CAR!
WE RATE THE TOP ELECTRIC VEHICLES
12 of the best
NEW SMART GADGETS
9 780802 264466
ISBN 978- 0- 8022- 6446- 6
03
ISSUE 1 £5.95
STEP-BY-STEP GUIDE TO GOING SOLAR
EXTREME ENERGY… off-grid wonders from around the world
GLOBAL NEWS
Solar and wind up, fossil fuels down As solar prices fall, installations boom $/W (DC)
MW installed 100,000
Costs down 150×
50
10,000
1,000 5
100 Cumulative installations up 115,000×
0
1975
1980
1985
1990
Volume installed (MW) – RH scale
1995
2000
2005
10
2010
2015
1
Crystalline silicon PV module price (2015 $/W(DC)) – LH scale
Source: BNEF
RENEWABLES, especially solar and wind, have been thriving, while two years of crashing oil, natural gas, and coal prices have led to downsizing in the fossil fuels industry. Clean energy investment broke new records in 2015 and is now seeing twice as much global funding, compared with fossil fuels, according to findings published by Bloomberg New Energy and Finance (BNEF) in April. A key driver for the growth in renewables is because wind and solar PV is becoming cheaper to produce. Recent solar and wind auctions in Mexico and Morocco ended with winning bids from companies that promised to produce electricity at the cheapest rate, from any source, anywhere in the world, said Michael Liebreich, chairman of the advisory
www.bpva.org.uk
board for BNEF. In Germany’s most recent solar PV auctions, prices were historically low at €0.074/ kWh. Because solar PV power generation is a technology and not a fuel, efficiencies will continue to increase, further driving down prices for years to come. As prices of batteries continue to fall, this trend should pave the way for widespread adoption of solar PV as a grid-friendly resource that is able to act more like dispatchable power, eliminating solar PV’s intermittency. According to BNEF, since 2000, the amount of global electricity produced by solar power has doubled seven times over. Wind power, a more established technology, has doubled four times over the same period. Over the past 18 months instances of
the two forms of renewable energy beginning to compete head-to-head on price and annual investment are increasing. Meanwhile, fossil fuels have been getting crushed by falling prices and, more recently, declining investment. The coal industry has experienced this trend first. Coal prices have been falling, but wealthier Organisation for Economic Co-operation and Development countries have been reducing demand for almost a decade. In China, one of the largest consumers of coal, demand has also flattened. Developing countries with rapidly expanding energy demands continue to add coal, though the rate is slowing. Troubles in the oil and gas sector are more contingent on a mismatch of oversupply and actual demand. However, with renewable energy expanding at record rates and with more and more efficient cars— including electric vehicles— hitting the road in major markets, such as Europe, the US and China, achieving fossil-fuel profits is getting more difficult. The best minds in energy keep underestimating what solar and wind can do, according to BNEF. Since 2000, the International Energy Agency has raised its long-term solar forecast 14 times and its wind forecast five times.
June 2016 | network 5
GLOBAL NEWS
SunEdison files for Chapter 11 GLOBAL renewable energy developer SunEdison filed for Chapter 11 bankruptcy in April. The separate publicly traded companies SunEdison created to hold renewable energy assets, the ‘Yieldcos’, TerraForm Power and TerraForm Global, are not part of the bankruptcy. In a statement, the two Yieldcos said they had enough liquidity to operate. The companies are not listed as debtors. SunEdison grew rapidly, opening up local businesses to develop projects in numerous emerging and high-growth solar PV markets, including India and the UK, whilst expanding into the US onshore wind sector. The
SunEdison’s headquarters. Photo: SunEdison
company , headquartered in Maryland Heights, Missouri, raised financing though leveraged and debt instruments. When it filed under Chapter 11, SunEdison had assets of $20 billion (£14 billion) and liabilities of over $16 billion. Solar industry watchers said the bankruptcy is not a reflection of the sector, which is growing rapidly.
According to Philip Wolfe, founder of WikiSolar, it is a case of what can happen when a company expands too quickly into too many global markets. Miguel Pérez chief operations officer, asset management, at European renewable energy advisory firm Vectro Cuatro, says: “In any industry, when
such a major player files for bankruptcy, it has a ripple effect and can dent confidence in the sector, generating some uncertainty. On the other hand it will create opportunities for other players in the industry and it provides lessons to be learned by everyone, about how to manage an organization’s appetite for and management of risk. This was something that the company could not balance in the end.” In the wake of the bankruptcy, assets developed by SunEdison are expected to come onto the market. In April 2016, UK green energy supplier Ecotricity acquired SunEdison’s UK portfolio of 800 solar PV residential rooftop installations.
Renewables power Portugal for four days DURING May Portugal ran entirely on renewable energy for 107 hours – four consecutive days – on a mix or solar, wind and hydropower. The country, which used to be one of Europe’s largest polluters through heavy reliance on coal, has invested in renewables, especially onshore wind, but also solar, to meet an
6 network | June 2016
EU directive target for renewables to meet 31% of Portugal’s energy needs by 2020. It is one of the highest targets of any EU member state. The Portuguese association for sustainable land development, Associação Sistema Terrestre Sustentável (ZERO), along with the Associação Portuguesa de Energias Renováveis
(APREN), the national renewable energy association, analysed data from Portugal’s grid operator, showing that the country was able to run on renewables, without falling back on thermal power, from the early hours of the morning of Saturday May 7, to late afternoon on Wednesday May 11. According to ZERO
the data shows Portugal can be more ambitious in a transition to a net consumption of electricity from 100% renewables, with huge reductions of greenhouse gas emissions. Germany also beat its own previous record, with renewable energy meeting nearly 100% of demand for several 15-minute long periods on Sunday May 15.
www.bpva.org.uk
GLOBAL NEWS
India installs 7GW of solar ACCORDING to the Ministry of New and Renewable Energy (MNRE) India’s installed solar capacity reached 6999MW – just shy of 7GW – by the end of April. The states with the highest installed capacities are Rajasthan with just over 1.2GW, Gujarat with over 1.1GW, followed by Tamil Nadu with 1GW and Andhra Pradesh with 793MW. India is set to become the fourth largest solar market globally in 2016 behind only China, USA and Japan. The Indian government
has announced a goal of achieving 100GW of solar capacity by 2022. India’s nationwide Solar Parks Policy is one scheme hailed as a success. MNRE has approved 33 solar parks in 21 states with 19.9 GW of capacity. However, while MNRE has set a target of 12GW of installed utility-scale solar projects for financial year 2016/17, consultancy Bridge to India expects new capacity additions of between 5-6GW for financial year 2016/17 to be more reasonable. Intense competition in the sector has driven
lending appetite at aggressive tariff levels will be the two main challenges to India achieving its targets for large-scale solar deployment. According to India Solar Handbook, international utilities and independent power producers with strong balance sheets and lower cost of capital are likely to play a greater role in the market. In projects under development, international developers account for 18% of the market; international utilities account for 14%. Bridge to India expects 37GW of cumulative utility scale capacity addition in India by 2020.
down tariff prices by more than 30% in the last two years. Many developers are struggling to raise capital and banks are seemingly reluctant to lend to projects at such low tariffs, according to Bride to India’s 2016 edition India Solar Handbook. Broader sector policy reform through amendments in the Electricity Act 2003 is still awaiting parliamentary approval. Going forward, investments in the grid to ensure robustness and the lack of investment/
18–20 OCTOBER 2016 • NEC • BIRMINGHAM
18–20 OCTOBER 2016 • NEC • BIRMINGHAM
Listen to latest updates on government targets & low carbon developments
See 100+ new energy efficient products & upcoming technologies
Meet, network & grow your business relationships
REGISTER FOR YOUR FREE TICKET
energyliveshow.co.uk Energy Half page 131 x 170mm.indd 62
www.bpva.org.uk
9
SHOWS
CONNECTING THE ENERGY INDUSTRY Includes:
FREE access to 9 shows during UKCW
PART OF
16/05/2016 13:15
June 2016 | network 7
NEWS – POLICY AND INCENTIVES
Iran revises renewables FiTs IN May the Iranian energy ministry published revisions to its feed-in tariff (FiT) rates for solar PV, wind power and other renewables. The changes also include revisions to the FiT banding for different sized solar PV plants. Solar PV plants with a capacity of 30MW and above with a FiT of 3200IRR/kWh (£0.073/ kWh), replace the previous band of solar PV plants of 10MW capacity and above and the previous rate, which paid out 5600IRR/kWh. The FiT band of solar PV plants up to 30MW capacity, with a revised FiT of 4000IRR/kWh, replaces the previous band of solar PV plants up to 10MW capacity, with the rate of 6750IRR/kWh. The FiTs can also receive a bonus of up to 15%
if components of solar PV plants meet local content requirements, to encourage investment in a domestic PV supply chain. Developers of largescale solar PV plants in Iran sign a power purchase agreement with the Renewable Energy Organization of Iran (SUNA) for a term of 20 years. The FiTs are paid in local currency, Rials. In 2015, the Iranian government announced a renewable energy target of 5GW by 2021, with about two thirds of this amount designated to solar PV. Iran is seeking to develop its significant solar and wind resources, as well as other forms of renewable power, to generate electricity to meet the country’s growing demand, which will allow Iran to
Table 1 2016 FIT for solar PV Above 30MW capacity*
3200 IRR/kWh
Up to 30MW capacity
4000 IRR/kWh
Capacity of 10MW and less
4900 IRR/kWh
Up to 100kW capacity (allocated to consumers and limited to the distribution capacity)
7000 IRR/kWh
Up to 20kW capacity (allocated to consumers and limited to the distribution capacity)
8000 IRR/kWh
* Quota capacity for wind and solar farms are determined by the Ministry of Energy, which will follow up the development of renewable and clean power plants policy to the maximum 2000MW per year by the private sector. SUNA is required to make appropriate arrangements for the implementation of the mentioned policy. Source: SUNA Table 2 2015 FIT table for solar PV Above 10MW capacity
5600 IRR/kWh
Up to 10MW capacity
6750 IRR/kWh
Up to 100kW capacity (allocated to the subscribers and limited to the distribution capacity)
8730 IRR/kWh
Up to 20kW capacity (allocated to the subscribers and limited to the distribution capacity)
9770 IRR/kWh
Source: Meyar Tose’e Niroo
maximize the amount oil and gas that it produces for export sales. Currently, Iran sells oil mainly to countries in Asia-Pacific including China and India. The lifting of trade sanctions in January 2016 allows Iran to increase its exports to Europe, which have been constrained in
recent years. The lifting of trade sanctions, due to Iran agreeing to a peaceful nuclear programme, is also creating new opportunities for UK and European developers and engineers of renewable energy plants to invest in the country’s nascent renewables sector.
system will be approved and collective selfconsumption permitted. This will be a welcome move if enacted. While Spain more than doubled installations to 49MW in 2015 from 22MW in 2014, this amount is still considered way below the country’s potential. The new agreement is the result of discussions between political parties,
UNEF and other 25 organisations including consumer groups, unions, other renewable energy associations, environmental groups and social movements. All parties agree that self-consumption is a civil right that plays a key role in the fight against climate change and can lead to significant job creation.
Spain set to remove ‘sun tax’ ACCORDING to Solar Power Europe member UNEF (Spanish Photovoltaic Union), Spanish political parties representing the majority in parliament signed an agreement in April to remove the Royal Decree against self-consumption of solar power, within 100 days of a government being formed. At the time of going to
8 network | June 2016
press, Spain had not yet formed a government on the back of the general elections, held in 2015. According to Solar Power Europe, the agreement, signed by 227 members of parliament, states that the ‘sun tax’ on energy produced and consumed without feeding the grid will be removed. Furthermore, the net metering
www.bpva.org.uk
NEWS – POLICY AND INCENTIVES
UK introduces new FiTs NEW feed-in tariffs (FiTs) and changes to incentives for solar PV and other renewables in the UK came into force on 8 February 2016. Following the industry’s rejection of the government’s initial proposals to cut the domestic PV tariff to £0.0163/kWh, in response to evidence submitted during its consultation, the new domestic PV tariff has been set at £0.0439/ kWh. Before the cut the tariff for domestic rooftop solar PV in the UK was £0.12/kWh. The FiTs are subject to quarterly degressions (see table). Regarding FiTs, the government also announced that deployment caps will be set to limit new spending on the scheme to £100 million up to the end of 2018/19. Caps on deployment will be put into place on a quarterly basis. For the below 10kW band for Q3 the capped amount is 50.6MW and for Q4 the
amount is 57.1MW. For the 10–50kW band for Q3 the amount is capped at 17.4MW and for Q4 the amount is capped at 17.8MW. A queuing system means that if a cap is reached then all new installations will be placed in a queue for the next quarter’s cap. Installations must be registered under the following cap, to guarantee they will receive FiT payments. There is not a guarantee either in terms of which FiT rate the installation will receive, as these are subject to quarterly degressions. A “rollover” clause means any unused capacity from a particular deployment cap will be added on top of the next quarter. The government also reintroduced preaccreditation for solar PV and wind generators over 50kW and all hydro and anaerobic digestion generators. This is designed to give
businesses and other owners of large rooftops more certainty when choosing to invest in solar. For the Renewable Obligation (RO) scheme, the government announced it will close the RO across the UK to new solar PV capacity at 5MW and below from 1 April 2016. For large-scale rooftop and ground-mount projects above 1MW the FiT rate is £0.87/kWh. In combination with ongoing reductions in solar PV costs, some investors, including local authorities and pension funds, should be able to achieve a reasonable payback with the new tariff for large-scale solar PV. Meanwhile, to date the government has opted not to increase the valueadded tax (VAT) rate to 20%, which the industry had previously feared. In April 2016 the European Commission published an Action Plan on VAT, which the
solar PV industry hopes will support Ministers’ indicated intentions to apply a reduced rate of 5% VAT on solar PV and solar thermal panels. The European Commission wants to give national governments increased autonomy in terms of how they grant lower rates of VAT. The chancellor George Osborne’s budget for 2016 made no mention of an increase in VAT for solar panels, which raised the hopes that British solar customers would not be hit with yet another price hike, following the FiT cuts. In March a cross-party amendment to the budget led to positive statements from Energy Secretary Amber Rudd and Treasury Minister David Gauke, ahead of EU VAT reform, suggesting the UK would retain the low 5% rate of VAT for solar. However the Treasury is yet to confirm officially that the VAT rate on solar panels will not be increased.
Solar PV FiT rates with quarterly degressions 2016 prices p/kWh for solar PV
2016 Q1
2016 Q2
2016 Q3
2016 Q4
2017 Q1
2017 Q2
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
<10kW
4.39
4.32
4.25
4.18
4.11
4.04
3.97
3.90
3.83
3.76
3.69
3.62
3.55
10-50kW
4.59
4.53
4.46
4.39
4.32
4.25
4.19
4.12
4.05
3.98
3.91
3.85
3.78
50-250kW
2.70
2.64
2.58
2.51
2.45
2.39
2.33
2.27
2.20
2.14
2.08
2.02
1.96
250-1000kW
2.27
2.21
2.15
2.09
2.03
1.97
1.91
1.85
1.78
1.72
1.66
1.60
1.54
1MW-2MW
0.87
0.82
0.76
0.70
0.64
0.58
0.52
0.46
0.41
0.35
0.29
0.23
0.17
Standalone
0.87
0.82
0.76
0.70
0.64
0.58
0.52
0.46
0.41
0.35
0.29
0.23
0.17
Source: Department of Energy and Climate Change
www.bpva.org.uk
June 2016 | network 9
NEWS – POLICY AND INCENTIVES
Ofgem urges power grid companies to connect more renewables IN March UK energy regulator Ofgem challenged local electricity grid owners to squeeze more capacity out of their grids to connect renewables. Renewable generation capacity has grown rapidly in the UK. By December last year 8.6GW of solar capacity had been installed, exceeding earlier official projections, made in 2012, that around 6.5GW of solar panel capacity would be connected by 2030.
In some regions, including the south west of England, there is little spare network capacity meaning costs and timescales for connection can be extremely high. In response Ofgem is calling on electricity distribution network operators (DNOs) to speed up connections, firstly by finding new ways to link more generators to the existing network. DNO Western Power Distribution (WPD) has a queue of 7.6GW
of generators waiting to connect of which around 4.8GW are solar panel projects. WPD is reconfiguring part of its grid so that some of the generators in the queue can get connected more quickly. In addition, WPD is offering to connect some generators if they agree to cut their output on days of the year when there is the highest demand from other generators to use the grid. They will not receive compensation payments
for this. Ofgem chief executive Dermot Nolan said: “We want DNOs to take creative approaches to speeding up renewable connections. They can do this firstly by making best use of their existing grids, as WPD has done. We are also calling on DNOs to enable earlier investment in new capacity where necessary using funding in their price controls. This means that they won’t be adding extra costs onto bills.”
European solar and storage task force launches
10 network | June 2016
its members regarding challenges presented by the solar and storage market which, though nascent, is growing. However, potential users of energy storage and investors in the technology are faced with challenging regulatory landscape. That said, Europe is expected to contribute to a third of energy storage installations in 2016, with Germany, the UK and Italy accounting for the biggest pipelines. According to the survey’s respondents, market design and industry guidelines are most important, with some calling for clear
PHOTO: S&C ELECTRIC
A European solar power and storage task force was launched in May, following a kick-off meeting in Brussels at the offices of European association Solar Power Europe. The meeting provided insights on European markets, defined final work streams, methodologies and corresponding content and distributed activities within the working groups representing behind-the-meter and in-front-of-meter energy storage models. Prior to launching the task force Solar Power Europe surveyed
Europe’s energy storage installations are rising though the regulatory landscape remains challenging
standards, including quality standards, to be established, which the industry will contribute to setting up. The new task force has set out several goals that its work will focus on achieving. These
include identifying and promoting policy developments with a view to influence the negotiation of the market design reform which will be presented in November 2016 by the European Commission.
www.bpva.org.uk
NEWS – BPVA MEMBERS
JinkoSolar to build three solar PV projects in Mexico
Northern Ireland’s first largescale solar farm connected
CHINESE PV module maker JinkoSolar has won rights to develop and build three solar PV projects, totalling 188MW, in Mexico under a recent electricity auction. The Mexican government intends to invest £9.6 billion to add renewable power capacity of 6GW between 2015 and 2018, to meet the country’s rising demand for electricity, partly through clean indigenous resources, including solar and wind. Two of the projects are located in Yucatán and one in Jalisco. They are expected to reach commercial operation by mid-2018 where all electricity
Lightsource Renewable Energy has developed and connected Northern Ireland’s first ever largescale solar PV farm. In May the 4.83MW solar farm, at Crookedstone Road, in Antrim, was connected directly into the private network of the nearby Belfast International Airport. The array will provide 27% of the airport’s annual electricity demand using clean energy. In addition, the Crookedstone site will also help to increase local biodiversity levels. Lightsource worked closely with ecologists throughout the planning stages to create a tailored
environmental plan for the new solar farm. The site will feature new planting of native hedgerow, wildflowers and the installation of bird and bat nesting boxes around the site. The net outcome will be a site in which a diverse range of flora and fauna can thrive. The Northern Ireland Executive’s target is to meet 40% of energy demand from renewables by 2020. Renewable energy can also bring local benefits, with the Crookedstone project representing an investment of more than £5 million in the local economy, including use of local contractors and services.
means choosing sites with the highest irradiation, those with on-site grid connections and sites that are clean and appropriately sited with respect to natural and human environments.” “Since the typical development time for a solar project in Spain is close to two years, we believe that securing and starting to develop projects now so that they will be ready by 2017/2018 will pave the way for economically
viable solutions in terms of power purchase agreements, swap or derivative options” says Hermida. Hive Energy’s expansion into Spain comes hot on the heels of the launch of new offices in Dubai, Turkey and Mexico. The Spanish solar market holds great opportunities for growth and is not dependent on subsidies. Hive is also a member of Spain’s Union Espanola Fotovoltaica (UNEF).
generated will be sold to Mexico’s Federal Electricity Commission (Comisión Federal de Electricidad, or ‘CFE’) under a power purchase agreement for 15 years, as well as related clean energy certificates for a 20 year period. The expected total generation of the three projects is over 500GWh. Referring to the Mexico contracts, JinkoSolar’s chairman Xiande Li said: “We look forward to leveraging this win to further increase our growth momentum in Mexico and other emerging solar markets as we continue to seek new project development opportunities.”
Hive opens Spanish office SOLAR developer Hive Energy has set up regional headquarters in Madrid, Spain. The office, which opened for business in May, has been set up to develop opportunities in Spain’s fledgling solar market. Hive Energy is looking at a number of sites, which could generate over 300MW. The Spanish offices are led by Luis Martinez Hermida, who brings to the role over 10 years of experience in investment
www.bpva.org.uk
banking and renewable energy from across the US, Latin America and Europe. Spain has the highest irradiation in Europe at 1,650kWh/kW, compared with the UK which has 950kWh/kW. However in total installed solar PV capacity in Spain is 4.5GW, compared with 10GW in the UK. Hermida says: “We are focusing on the best projects in terms of technical, economical and planning feasibility. This
June 2016 | network 11
NEWS – BPVA MEMBERS
Vector Cuatro scores more business in Latin America and Asia European renewable energy consultant and adviser Vector Cuatro reports growing demand for its services in Latin America and Asia-Pacific
12 network | June 2016
in the country, amounting to more than 50% of the awarded production. As governments in various global markets turn to competitive auctions to contract for new renewables capacity, Vector Cuatro works with clients to help them improve costs. According to Miguel Pérez COO, asset management: “In auctions we are seeing prices for renewable energy much lower than they have been with FiT schemes. Accuracy becomes very important when estimating costs. We can help clients when they are preparing their tender documents for auctions, where they have to determine the best price at which to sell energy from their plants.” The company has 1.1GW of solar PV and wind capacity under asset management globally. “We able to use the size of the portfolio we manage as a basis to leverage best prices from various service providers, such as insurers, and auditors, when we run tender processes on behalf of clients,” says Pérez. Despite the slowdown in demand in markets, such as the UK, Pérez thinks services businesses in the renewables industry have a promising future ahead.
PHOTO: VECTOR CUATRO
IN the past few months Vector Cuatro, a subsidiary of Falck Renewables, has advised clients in Japan, Mexico and El Salvador. A recent project for the Madrid-headquartered company involved performing technical advisory services for a 33MW solar PV plant developed by Nippon Solar Services in Japan’s Oita prefecture. The project, which reached financial close in late 2015, is expected to start operations in 2018. Japan is one of the Vector Cuatro’s main markets. Since its opening an office there four years ago, the company now offers technical services, consulting, which includes selection and negotiation of EPC contractors, construction projects, project financing advice and asset management services to what amounts to over 4GW of projects in Japan, all of it solar PV. The company plans to extend its regional footprint, where the demand for renewables is growing in south-east Asia, including Thailand and the Philippines. In Mexico, Vector Cuatro has provided financial and technical advice to some of the companies participating in the first long-term renewable energy auctions
Miguel Pérez, COO asset management, Vector Cuatro
He says: “But companies have to be able to adapt to changes and continue to enhance their expertise and the levels of service they provide. That could mean aiming to provide the level of service in a new market consistent with your domestic market. This requires understanding the needs and the culture of the local market that you are entering.” Pérez also does not rule out continuing to develop and expand on services provided within domestic or established renewables markets. “If you look at the O&M market in Italy’s solar PV industry, the providers of these services are not the same as they were 4–5 years ago. Some have exited the market, others which were small then are now leading players. This market has been under constant change.”
www.bpva.org.uk
NEWS – BPVA MEMBERS
Conergy increases MENA presence
Solar developer Conergy is expanding in the Middle East and North Africa (MENA), by increasing the number of employees in the region and expanding its’ offerings to include larger-scale rooftop
projects. With high levels of solar irradiation and new renewable energy policy targets and investment interest, the MENA region is poised for rapid solar growth, with projections
to reach a total of 15GW and £34.6 billion in solar investments by 2020. “We have all the capabilities necessary to make a huge impact in these markets,” said Rasmus Friis, Conergy’s
Leclanché opens North American subsidiary The North America team will focus on stationary and mobility markets in the US and Canada, from the regional headquarters in Dallas, Texas. Leclanché also has an engineering and technology centre in Anderson, Indiana. The North American market for energy storage has become Leclanché’s primary focus, according to Bryan Urban, who heads up the subsidiary. Urban, an energy industry executive with more than 25 years of
www.bpva.org.uk
experience in the power generation and energy infrastructure sectors, stepped away from the company’s board to become executive vice president of Leclanché’s North American business. Leclanché’s new North American operations follow on from the company receiving a $28.9 million (£20 million) purchase order to deliver one of the world’s largest stationary storage systems to Independent Electricity System Operator (IESO) in Ontario. The purchase
order, covering the battery storage system and power conversion equipment for the project, is part of the previously announced $45 million project construction scope that will be managed by Leclanché. The company has partnered with Deltro Energy, which is constructing the plant facilities, balance of plant and high voltage connections to the grid. Anil Srivastava, Leclanché’s CEO, says, “Bryan and his team
were instrumental in securing the contract for the energy storage systems for the Ontario grid project, which we successfully won over several larger battery storage competitors.” Other members of the North American team are Thom Reddington, senior vice president operations, based in Anderson, Mark Albert, director of business development, based in Dallas and Jim Lowe, senior project manager, also based in Anderson.
June 2016 | network 13
PHOTO: CONERGY
Conergy has developed solar projects in many global markets, including Thailand
president of EMEAI. “We’ve had early success with rooftop solar in the region over the past couple of years and are now bringing our knowledge and talent in utility-scale solar development to the table.” Over the last few years, Conergy has tested the markets with rooftop projects in Saudi Arabia and Kuwait. The first was a threeproject portfolio, totalling 2.5MW, in Saudi Arabia on King Abdullah University of Science and Technology (KAUST) and in the King Abdullah Financial District (KAFD) also on the top of the Capital Market Authority Tower.
NEWS – BPVA MEMBERS
UK firm launches BIPV roofing products BIPVco, a spinout from a collaborative project between Swansea University in Wales and Tata Steel, is launching building-integrated photovoltaic roofing
14 network | June 2016
build projects and roof recladding projects.” The UK and the rest of Europe is the company’s initial market, while global BIPV market and export opportunities are expected to come on-stream from as early as 2017, according to Canning. “There is interest in Germany but we also see potential from sun-belt regions such as the Middle East in states like Dubai where there is a lot of new construction happening and decent support schemes for PV. “Australia is another promising market, where there have been concerns about crystalline PV modules on rooftops especially in high winds, which have been shown to compromise the integrity of the roof by lifting as the wind gets underneath the panels.” The company’s products are suitable for commercial, industrial and residential roofs. Other buildings, such as churches, stations, and stadiums, which are due for re-roofing, could also benefit from the aesthetically sympathetic look of the product. The modules weigh under 3kg/sq m, compared with 20kg/sq m for a crystalline silicon PV module, which opens up their potential to
PHOTO: BIPVCO
B
IPVCo, set up in 2013, is based in Shotton, Wales, in a building that initially housed collaborative R&D between Tata Steel and Swansea University. The company has several projects with partners in the UK that are entering construction this year. They include a supermarket, a care home, a passive house and a new building at Swansea University. In a post-subsidy market, attention is again turning to BIPV. Tata’s Sustainable Building Envelope Centre (SBEC), located on the same site as BIPVCo, has become a port of call for construction companies and global brand owners that are interested in how buildings can be designed from the ground up to be sustainable and zero energy. BIPVco’s modules use flexible copper indium gallium selenide (CIGS) technology-based cells. These are integrated directly into the roofing component or fused onto the carrier substrate by heat and vacuum sealing and is compatible with standing seam metal roofs. The modules can also be applied to single ply roof membranes. Chief commercial officer Justin Canning says: “Our target market is architecturally specified new
BIPVco’s modules use flexible CIGS technology-based cells
be used on non-load bearing roof space with limited load carrying capacity. The company is working with roofing specialists such as IPS Roofing based in Yorkshire who provide roofing for industrial and commercial buildings, including offices and warehouses, and roofing for apartments. However, BIPVco is also looking to work with solar PV developers and engineering, procurement and construction (EPC) firms that are expanding their portfolios of offerings and services to include BIPV technologies and products. In the next two to three years, BIPVco will steadily ramp up its manufacturing capacity to 40MW on a single shift, from about 10MW this year. “The BIPV market is set to grow significantly worldwide and we are prepared to meet demand across the globe,” says Canning.
www.bpva.org.uk
NEWS – BPVA MEMBERS
Director of BPVA Global appointed
Alexandra DeSouza leads the BPVA Global team
wind markets around the world with particular focus on structured financing, M&A and
corporate strategy. From private practice she joined SunRay Renewable Energy as part of the start-up team that went on to develop a pipeline of over 1GW before being acquired by SunPower in 2010. From 2013 DeSouza was part of the SunEdison UK management team responsible for the development, financing and sale of over 300MW of ground-mount PV projects and launch of its UK residential and
commercial power purchase agreement business. As part of sponsor management teams, DeSouza’s career has since taken her to projects in the US, South Africa, Spain, Italy, Egypt, Jordan and Norway and has included start-ups such as SunRay as well as large solar firms. BPVA Global is a new service, committed to delivering the latest information on global solar PV opportunities.
PHOTO: BPVA
ALEXANDRA DeSouza has been appointed as director of BPVA Global. DeSouza will lead the BPVA Global team as it supports members entering new markets through organizing networking events, regulatory briefings and financing workshops and providing commercial and political expertize and connections. Over the last 10 years DeSouza has acted as in-house counsel for companies in solar and
SolarWorld launches 300 watt bifacial solar module at Intersolar Europe
www.bpva.org.uk
electricity and increases energy efficiency. Light reflected onto the rear side of the module makes higher yields of up to 25% possible. SolarWorld’s new racking system is designed for mounting bifacial modules on flat roofs. The module is mounted at a distance of 30cm from the roof surface optimizing light capture for energy harvest. The increased elevation ensures optimized energy harvest without sacrificing the performance of the racking system. The Sunfix Bisun racking system consists of five pre-assembled
The new bifacial 300 watt model has an efficiency of 18%
components and can be installed using only one tool. It is fixed to the roof by ballast. Roof bolts can be integrated into the system if required. The legs are made of sturdy, weather-resistant material of stainless steel and aluminium.
At Intersolar SolarWorld will also be showing its residential energy storage system, SunPac LiOn, which starts with an affordable capacity of 2kWh that can be expanded incrementally in 2kWh modules up to 10kWh. SolarWorld is one of Europe’s leading panel and balance of system component suppliers. The company is also expanding into new markets, including Poland and Turkey. In Africa, where SolarWorld has been distributing products for over 10 years the company is seeing demand for large-scale projects.
June 2016 | network 15
PHOTO: SOLARWORLD AG
The company’s bifacial module achieves an output of over 300 watt by using a five-busbar technology combined with passivated emitter rear contact (PERC) cells. The new bifacial 300 watt module, which has an efficiency of 18%, will be available in 2016. SolarWorld will also show its specially developed racking for the system at the show in Munich. By combining PERC cells with five-busbar technology, output can be increased further since a higher number of conducting circuit paths on the cell improves transmission of the
NEWS – BPVA MEMBERS
Aleo Solar supplies modules for San Marino’s largest solar system The Republic of San Marino’s largest solar PV installation was connected to the grid in May this year. The 700kW system, which uses modules supplied by Germanybased Aleo Solar, is installed on the roof of Colorificio Sammarinese a manufacturer of environmentally friendly paints and enamels.
The system was installed by Prometeo Energy, based in Serravalle, San Marino. It uses more than 2400 monocrystalline modules installed on the 4000 sq m roof area. Earlier this year Aleo Solar supplied around 76,000 modules for a 50MW solar park in the Philippines. The project on the central Philippine
island of Leyte was connected to the grid in March 2016 and qualifies for the government’s feed-in tariff. The project, near the town of Palo on the island was built by SAS Sunrise, a subsidiary of Sino-American Silicon Products Inc (SAS). In addition to Aleo, SAS subsidiary Sunrise Global
Solar Energy also supplied modules for the solar farm. Aleo has been manufacturing solar panels in Germany since 2001. The company makes both monocrystalline and polycrystalline modules, as well as a hybrid module that harnesses heat generated on the roof to produce hot water.
New solar lifestyle magazine launched
SMA clings to global inverter top spot
In a joint venture, the BPVA and Haymarket Media Group have launched the UK’s first consumer magazine dedicated to solar, energy storage, smart technology and electric vehicles. Smarter Living offers companies in these industries a unique opportunity to connect their business directly with millions of UK consumers, reach qualified sales leads, align their brand with trusted, independent editorial, build consumer confidence in their business and help their brand become a household name in the UK solar market. Readers are subscribers to Haymarket’s leading
SMA maintained a steady lead at the top of the global PV inverter revenue chart, but China’s Huawei and Sungrow, are closing in, according to analyst firm IHS. Germany’s SMA, which in May published encouraging first quarter financial results, has maintained its position at the top of the IHS Global PV Inverter Market ranking, securing a 14% share of global inverter revenue in 2015. “In maintaining a flat market share compared to 2014, SMA ended five consecutive years of market share declines. A major contributor to SMA’s improved performance was its large market share in the US
16 network | June 2016
consumer titles including What Car? and Stuff Magazine, who have requested to receive Smarter Living. The magazine will be read by people who are actively investing in living a greener lifestyle, from installing solar panels, to upgrading their existing PV and home energy systems, and buying an electric car.
and other high-growth utility-scale markets,” said Cormac Gilligan of IHS Technology. This performance marked the first time in five years that SMA has managed to arrest a slide in its revenue share. Buoyed by strong domestic demand in China, ICT conglomerate Huawei and pure-play inverter company Sungrow both had a strong 2015, with the former topping the global table in terms of MW shipments, while claiming 9% of global revenue, pushing it up to second in the ranking. In 2015, for the first time ever, Sungrow and Huawei topped 1GW of inverter exports.
www.bpva.org.uk
INTERVIEW
Thinking big about solar Simply remaining focused on solar PV is not enough if the UK wants to maintain its leadership in the global industry, says BPVA chairman Reza Shaybani, as he discusses the organisation’s new strategic direction
Reza Shaybani: “One of BPVA Global’s initiatives is an online platform that connects developers, EPCs and investors with buyers in international markets”
I
n just a few years the UK solar PV market has rapidly ascended the ranks to become one of the largest in the world, establishing a skilled services-oriented industry of installers, developers and engineers. Long-term, the industry’s survival depends on its ability to adapt readily in response to challenges and changing market forces, believes Reza Shaybani, founder and chairman of the British Photovoltaic Association (BPVA). That’s not simply rhetoric on his part. Over the past two years the association’s focus has evolved to meet this challenge. By placing a foot in the door of emerging clean energy markets the BPVA is helping to open up export opportunities for ‘Solar UK’. The organisation is also nurturing links with the nascent electric vehicle charging infrastructure and energy storage segments. Network: Why expand the BPVA’s remit to include these other technologies? RS: When it was set up in 2010 the BPVA
18 network | June 2016
differentiated itself by focusing solely on solar PV technology. Today we recognize that storage – particularly intelligent energy storage systems that combine advanced batteries and software controls – is going to facilitate the transition of solar PV to a mainstream source of power in the UK. Energy storage and electric vehicles (EVs) are similar. More and more car makers are realizing that the EV battery can act as storage, with the right interface. Mercedes Benz is a good example with its concept that exploits the role that EVs can play as grid storage resources. Solar PV is the resource that charges the battery, which powers the home or drives the car. It’s about linking these up. Whether charging batteries, within a residential storage system, or within an electric car, both of these types of systems optimize the consumption of PV-generated electricity. Solar PV is a highly versatile power generation technology. It works at large-scale and it works at the residential, small-scale. The
www.bpva.org.uk
INTERVIEW innovation that has gone into panels – their design and fabrication – means consumers have a host of different options available to them, from the standard cost-effective polysilicon panels, to unobtrusive black modules, to building-integrated variants, such as PV tiles and glass. Compared with other types of renewable energy technology, the British public has embraced solar PV. Obviously good subsidies in the past have played a huge role in getting to the situation that we are in today, where over a million rooftops have solar panels installed on them. But PV has lots of favourable attributes. Not only is solar PV less obtrusive than onshore wind it is more flexible than solar thermal because it can provide electricity and the excess can be used to heat water. Our members, which include solar PV installers and developers, are in a good position to be able to expand their businesses by installing energy storage systems and electric vehicle charging equipment in addition to solar PV. The first wave of adopters are going to be found in the existing homes that already have solar panels installed. Network: In terms of activities, what has the BPVA been doing to raise awareness among its members about the relevance of energy storage to them? RS: About three years ago we started to expand our activities to promote synergies between PV, energy storage and electric vehicle charging systems. We started out by organizing an annual conference, back in 2013, hosted
The BPVA is committed to representing its members’ interests not only in the UK solar PV market, but increasingly in emerging renewable energy markets worldwide
“The UK solar industry won’t die because the global solar market isn’t going to die. That’s why it is important to support our members in these development opportunities arising abroad” in London that addresses energy storage opportunities in the UK. We then went on to launch a newsletter providing news about energy storage developments, related to solar PV. We have also surveyed our installers about energy storage. We have partnered with publisher Haymarket to launch the UK’s first consumer magazine which is all about how homes can deploy not just solar PV, but home energy
www.bpva.org.uk
management systems, batteries, electric vehicles and other technologies to help them consume clean energy more efficiently. Smarter Living is a print and online publication that puts the solar PV industry in direct communication with the ultimate enduser – the consumer – and it helps consumers to navigate all these different options that are available to them. I guess you could say that the magazine gives consumers the confidence to become less dependent on utilities and the grid. Installing solar PV is the first step but it’s all about how you use it. Education about the benefits of solar PV, among the public and among schools, for instance, has always been an important part of the BPVA’s activities. Smarter Living magazine is an extension of that. Network, our own magazine, is a platform primarily for our members to promote their activities in PV, energy storage and also electric vehicle charging solutions. On top of that the magazine is also aimed at promoting the UK industry abroad. We are also lobbying the government to develop policies that support the uptake of electric cars. Network: How are you doing that? RS: We are lobbying the treasury directly. The hard truth is that there is going to be no additional money in the public purse for other clean technologies, such as storage. Our approach is to look at what is available in terms of existing finances that subsidize the purchase of electric cars and to advise the government how this money can be directed more effectively at supporting all the new infrastructure that electric cars require. Currently, if you want to buy a new electric car, you are entitled to up to £5000 off of the purchase price. We would argue that for a person or household to be able to afford cars
June 2016 | network 19
INTERVIEW The BPVA’s activities include organising conferences on topics, including solar PV as well as energy storage
in the bracket of £35,000 upwards, which new electric car models tend to cost roughly, then they will be able to afford it whether or not there is a subsidy that slightly reduces the asking price. Why not use that pot of money instead to invest in fast-charging infrastructure? The biggest barrier to electric car uptake is range anxiety. Charging up your car over eight hours at home is fine, but the infrastructure is lacking when it comes to charging up cars for any journey that extends beyond the battery’s range. That means having charging stations in cities, as part of shopping centres, motorway services, all those types of places where you expect to fill up your car with petrol. Not only that but fast-charging technology – where you can recharge an electric car in a matter of minutes – really needs to be promoted in the UK. Using money to support this new infrastructure will encourage more adopters. When car makers invest in volume production, this will drive down the price of electric cars so more people can afford them. But, even early adopters have been put off because they are concerned by range anxiety. One company that we are excited to be working with, but can’t talk about in too much detail yet, has developed a turnkey electric vehicle charging station, which deploys fastcharging technology. It is modelled on petrol garages, with a charging station with several ‘pumps’. Most EV charging outlets charge up one car at a time, whereas this charges several at a time. The EV charging station can also be
20 network | June 2016
integrated with solar panels. Network: How has the BPVA’s membership base changed since it was set up in 2010? RS: The membership profile has changed, definitely reflecting how the industry has also changed over the past six years. We started with 10 founding members. In 2011 to 2013 we saw lots of global companies coming to the UK to set up their subsidiaries here, including panel makers, engineering, procurement and construction (EPC) firms, developers and investors, in addition to homegrown developers such as Hive and Lightsource. The membership also reflected the number of installers in the market. At the peak of the solar boom, the UK had 5,500 solar installers. Many of these were attracted by the subsidies. Every electrician and entrepreneurial roofer wanted to do solar. Cuts in subsidies, the introduction of the Microgeneration Certification Scheme (MCS) accreditation, these developments forced the industry to grow up and shook out many players that had not made a long-term business plan out of solar PV. We grew quickly in line with the boom, undoubtedly. However, from the outset we set up an organization that went further than only catering for companies within the solar PV industry. We opened the association’s doors to those who would make use of and deploy the technology, including architects, councils, housing associations and universities. We also attracted companies from sectors
www.bpva.org.uk
INTERVIEW that were looking to sell products and services around solar, such as law, recruitment and insurance. Again, many of these were drawn to the industry because of the attractive subsidies. As the market settled in 2014 after feed-in tariff (FiT) reductions, more companies left the industry. At around this time we saw a sign of a maturing industry, in terms of the membership renewals. These companies clearly were committed to being in the solar PV industry, so we could start to be more proactive. Then there was the election in May last year, and already rumours by June that the subsidies would be severely cut. By that point it became very clear that we needed to allow ourselves to be connected with companies developing technologies and systems in the form of energy storage and electric vehicle charging platforms – that will enable solar PV to be a major contributor of power in the UK. Most of our members are solar PV companies. We have a few members from the storage industry and are talking to electric vehicle charging solutions players and we hope to announce something soon. Network: What is the potential for energy storage as a UK industry? RS: In solar PV the UK has been a follower. Unlike Germany, we never had an industry rooted in research and development (R&D), which then led to companies developing production tools for fabricating PV cells and modules. We have had to import the key components used in solar PV systems from other countries be it Germany, the US or, increasingly, China. In energy storage and electric vehicle charging, we have an opportunity to lead. We have UK universities doing R&D in this area and players that are developing and commercialising products and platforms deploying battery technology, companies such as Moixa. Not only that our market potential is significant, due mainly to factors such as rising energy prices and because we have such a substantial base of installed solar PV. Suppliers of energy storage systems, such as Samsung, see the UK up there with Germany, the US, Australia and Japan. We can lead the market, but we need the right support. That requires looking at how the various stakeholders’ needs and requirements can be addressed, whether government or consumers. One concern within government is that as
www.bpva.org.uk
BPVA
Activities The BPVA’s eight working groups share knowledge and resources, channelling members’ expertise, advising key decision makers, market development and coordinating policy and lobbying activities.
Policy
This group advises on solar energy sector policy, through meetings with key government organisations, including DECC and UKTI.
Communication
Activities span establishing marketing and communication strategies for the BPVA as well coordinating marketing, branding and PR work for the solar PV industry as a whole.
Application
Work includes identifying suitable applications that can help to grow the solar PV industry and networking with key players from related industries, such as BIPV, eco-mobility and energy storage.
Education
This group is tasked with examining all aspects of training courses offered, identifying the industry’s needs and cross promoting required courses for each segment.
Finance
Networking with key financial institutes, identifying sources of affordable financial options for the industry and end users, as well as assisting with developing financial models for residential, commercial, agricultural and large scale solar projects are this group’s core activities.
Construction
This group focuses on identifying ways to bring the solar PV and construction industries closer together and to make sure solar PV products are used as part of the build process. The group also promotes the use of BIPV products in the built environment. Activities include networking with major construction companies, national and local house-builders, developers, architects and real estate companies throughout the UK.
Energy storage
This working group is looking at ways to bring the solar PV and energy storage industries closer together to build a more efficient, more reliable, cheaper and safer energy supply. Activities also include assisting international energy storage companies in setting up a UK presence.
EV charging
For electric vehicles (EV) to become mainstream, certain challenges need to be overcome. Consumers have concerns the driving range of electric vehicles won’t be enough to meet their needs, a problem known as range anxiety. The EV working group is focused on collaborating with companies that can develop fast charging networks across the UK.
June 2016 | network 21
INTERVIEW electric cars become more widely adopted at the expense of traditional cars, the revenue from fuel duty will come under threat. Well, why not apply an equivalent duty of a few pence for recharging at public charging stations? Consumers will be more likely to adopt electric cars if charging them is as straightforward and accessible as refuelling a conventional car. Companies like Charge Point in the US, for instance, have developed clever software that allows charging stations to introduce the same transactional payment methods that exist for refuelling at petrol stations. Paying at the pump, or in the kiosk, or using fuel cards, all of these options need to be available for fast-charging electric cars because
BPVA
Members Companies that are members of the BPVA span the entire solar PV value chain and include:
Engineering procurement and construction (EPC) firms Greencells Vector Cuatro Belectric Conergy
Developers
Lightsource Renewable Energy Vogt Solar Conergy Hive Energy Abacus Solar
Installers
TGE Group Kingspan Energy Project Solar
Panel suppliers SolarWorld Sunsolar Energy Aleo Solar Hanwha Q Cells
Energy storage and electric vehicle charging Moixa Technology Off Grid Energy Leclanché Nex-G Energy Delta WW
22 network | June 2016
that is what we are already used to. Network: When compared with other established PV industries, what sets the UK apart in the global marketplace? RS: EPC, design, project finance are all services where the UK solar industry has expertize, which can all be deployed in new and emerging markets. In some sectors Britain is a net exporter. So we are applying that same philosophy and entrepreneurial attitude as many of these sectors, to sell solar PV and related technologies abroad. We think the UK has some unique attributes to help it expand the solar industry into new global markets, even compared with Germany, which has pioneered solar PV. Germany is still one of the biggest markets in the world by installed capacity of around 40GW. The country quickly established a domestic industry, not just equipment suppliers and R&D institutes but German companies were set up to make panels using German equipment. That was the origin of the first wave of small to mid-sized module makers such as Solar World and Aleo Solar. Then there came the downstream part of the industry – the service providers in terms of installers, developers, EPCs and O&M companies. Between 2006 and 2010 the UK market, on the other hand, was small compared with Germany’s. Today, very little PV module production occurs in Germany because it has largely gone to China. German equipment suppliers no longer dominate like they did a few years ago. Germany has had to compete with other solar PV-producing countries. Compared with the UK, Germany has lacked in the area of financing, particularly finding innovative ways of financing. The city of London drives the growth of solar. For instance, a solar PV project that is going to be happening in Iran is fully funded in London. London continues to attract a lot of capital because since 2010 UK-based companies have emerged with successful track records in developing projects. The future for these companies is about seeking opportunities abroad for their businesses to expand. Many of these players have grown to a point where demand in the UK alone cannot sustain them. We are asking the government to help us by positioning the solar industry’s expertize in financing and management – engineering, design and so on – as part of the UK’s export strategy. Now is the right time to do it. I began talking a few years ago about export markets for UK
www.bpva.org.uk
INTERVIEW
“London continues to attract a lot of capital because since 2010 UK-based companies have emerged with successful track records in developing projects. The future for these companies is about seeking opportunities abroad for their businesses to expand” solar and I was questioned. Looking back, at that time the UK had very little installed capacity and there were very few markets for solar PV, outside of a handful of European countries, the US and China. Today it is a different story. The UK has installed over 10GW projects that UK companies have executed and with finance raised here. The UK solar industry won’t die because the global solar market isn’t going to die. That’s why it is important to support our members in these development opportunities arising abroad. However, current energy policy is making it very difficult for renewables to thrive in the UK at present, even though renewables – solar PV in particular – have come down in cost, and are nearing grid parity. The National Grid’s new ancillary grid services market is looking to the energy storage sector to provide ‘synthetic inertia’, needed to balance generation and demand as thermal power plants are retired. These are positive developments that the government should capitalize on. Instead it seems that energy policy is intent on relying on gas – through hydraulic fracturing (fracking) – and nuclear, even when it is clearly going to cost the taxpayer dearly. In contrast renewables are being side-lined. The rationale for reducing subsidies for renewable energy is to avoid overburdening bill payers. But then, shouldn’t all subsidies, direct as well as indirect, for every type of generation project also be removed? Among UK voters solar PV is a popular technology and with the right policy the commercial PV market could reach its full potential. Network: What are you doing to help members tap into solar export opportunities? RS: The government helped create the industry, then demolished it and now we are calling on it to help rebuild the industry. To do
www.bpva.org.uk
this we are working closely with UK Trade & Investment to see how the UK solar industry can tap opportunities abroad. That is why we launched our new BPVA Global service. Through this we will make information on emerging PV markets in different countries and regions available to our members. One of BPVA Global’s initiatives is an online platform that connects developers, EPCs and investors with buyers in international markets. The buyers – they can be governments or private sector developers seeking consortiums of co-developers – present their project online and are connected to the bidders. One of our members has already secured project rights in several African countries, including Kenya and Tanzania, and members have been able to bid on three projects in India that have been promoted via our online platform. This year is the start of our new strategic direction. We are broadening our focus to include energy storage and electric vehicle charging infrastructure. We are also a platform to promote not only solar PV but these industries to a global marketplace. That is going to be compelling not only for domestic players but also global companies, because we are going to be your eye in the sky, bringing to your attention these global opportunities.
BPVA
Reza Shaybani Reza Shaybani has been managing private and public technology-focused companies in the optical disc manufacturing, semiconductor and solar PV industries for the past 20 years. Since 2006 he has played an active role in the solar PV industry globally through funding and investing in a number of leading companies, many of which are based in the UK. Reza is chairman of the board of directors of British Photovoltaic Association (BPVA), the national trade association of the UK solar energy industry, representing the PV sector’s interest at home and internationally. He is currently also managing partner at Greenray Energy Capital and director of special projects at Meyer Burger Global, a global leader in the development and production of manufacturing equipment for solar photovoltaic cells and modules. In 2015 Reza formed RatedSolarInstaller.com, connecting qualified installers to customers. Reza is well-known in the Middle East for developing successful businesses in the optical media manufacturing industry and also in the solar PV sector. He has strong links in Iran, his country of birth, within both political and industrial circles and is currently working to develop a pipeline of 1GW solar projects in the country.
June 2016 | network 23
COUNTRY INSIGHT: IRAN PHOTO: ALIREZA KHEIRKHAH
A new solar D dawn in Iran Iran’s solar potential is attracting global interest, following the lifting of international trade sanctions. The opportunities for the UK solar sector could be significant, but investors need to proceed with caution Pictured above: In 2015 the Iranian government announced a renewables target of 5GW by 2021 and has introduced a good feed-in tariff for solar and other technologies
24 network | June 2016
espite Iran sitting on some of the largest supplies of natural gas and oil in the world, this has not deterred policymakers from turning their attention to exploiting the country’s considerable renewable energy resources, which include both solar and wind. The Iranian government recognises that burning through oil and gas to produce electricity to keep up with the country’s voracious energy requirements is neither a sustainable or economically viable approach in the long run, since fossil fuels used for supplying domestic demand are subsidized. By supplying more of the country’s demand for electricity with renewables and alternative energy, Iran can free up more oil and gas to sell on the international markets. In recent decades Iran’s energy consumption has increased by an average of 6% every year. By developing solar, wind and alternative conventional assets, including nuclear and geothermal plants, Iran can meet demand and reduce its reliance on fossil fuel-based electricity generation. According to ‘Energy Price Reform and Energy Efficiency in Iran’, published by the International Association for Energy Economics, the price of energy in Iran has been heavily subsidized, which is as high as 12% of
www.bpva.org.uk
COUNTRY INSIGHT: IRAN
“In 2015 the government of Iran settled on a revised renewable energy target of building 5GW of new renewable energy capacity by 2021, equivalent to more than 5% of the country’s electricity generation. Solar PV is expected to make up a substantial share of this target” gross domestic product (GDP), depending on the definition of the subsidy (direct or indirect) and world energy prices. To bring its budget deficit under control and to control energy consumption in 2010, the Iranian parliament ratified the Targeted Subsidies Reform Act, which has gradually increased energy prices, helping create the need for renewables and alternative sources of electricity to compete with fossil fuelgenerated electricity.
Drivers for developing renewable energy in Iran
There are also several other compelling reasons for Iran taking steps to develop its indigenous renewable energy resources. They include enhanced energy security and reduced dependency on fossil fuels. The country is also committed to cutting carbon emissions.
Iranian undergraduate students visiting a solar farm at Taleghan, north-west of the capital, Tehran
During COP21 talks held in Paris at the end of 2015, Iran announced a target to reduce its greenhouse gas emissions by 4%. In the last few years several states in the Middle East and neighbouring countries have made big announcements concerning plans to exploit significant solar and wind resources, which have yet to fully materialize. According to observers, there is genuine impetus within the Iranian government to create a stable policy framework and the right conditions to trigger investment in renewable energy. “SUNA (Renewable Energy Organization of Iran) seems to be adopting a similar approach to the Egyptian government and engaging early and in earnest with the industry. They are willing to listen to improve the quality of their programme and open it up to financing,” says Alexandra Desouza, who is on the executive committee of the British Photovoltaic Association (BPVA), after recently speaking at a renewables workshop in Tehran, organized by the BPVA, Sanglaj International Consultants and Eversheds law firm. In 2015 the government of Iran settled on a revised renewable energy target of building 5GW of new renewable energy capacity by 2021, equivalent to more than 5% of the country’s electricity generation. Solar PV is expected to make up a substantial share of this target. Today renewables account for less than 1% of the electricity mix. Opportunities for solar PV have already attracted international developers from various PHOTO: EBRAHIM NOROOZI
www.bpva.org.uk
June 2016 | network 25
COUNTRY INSIGHT: IRAN countries and regions, including Germany, Spain and Asia, seeking to partner with local Iranian companies that lack the technology and know-how to deploy solar PV at scale.
Ending trade sanctions
Iran’s current administration, led by moderate cleric Dr Hassan Rouhani who has been president since winning the vote in 2013, is supportive of renewables as part of his wider commitment to advocate policies that are designed to reverse the country’s economic decline and international isolation. On 16 January 2016 ‘Implementation Day’ marked Iran’s commitment to foster an exclusively peaceful nuclear programme. Many sanctions barring trade with Iran are in the process of being lifted. Rouhani has called for economic reforms and less reliance on oil revenues in the post-sanctions era when he submitted the draft budget for the next Iranian fiscal year (beginning March 21) to parliament. He told lawmakers that low oil prices were the best reason to cut the “umbilical cord” to oil, according to a Reuters news report. Not only will renewables displace subsidized fossil fuels for meeting domestic electricity demand, but these investments will help foster new industries and create jobs for a population, which has attained a high level of education, compared with the rest of the region, and where 65% of the workforce is under the age of 35 years.
TRADE
Lifting sanctions opens up UK–Iran trade relations Until very recently, UK companies were able to conduct only limited trade with Iran, which was under extensive UN as well as EU, US and third country sanctions. However, on 14 July 2015 the E3+3 (France, Germany, UK, China, Russia and USA) reached an agreement on a nuclear deal with Iran. Through the successful implementation of the deal, Iran can demonstrate its commitment to an exclusively peaceful nuclear programme. On 16 January 2016 – ‘Implementation Day’, the international nuclear watchdog, the International Atomic Energy Agency (IAEA), certified that Iran had restricted its nuclear activities. The historic accord was signed in Vienna. The lifting of the sanctions has unfrozen tens of billions of dollars-worth of Iranian assets and global companies that have been barred from doing business there will be able to exploit a market hungry for everything from cars and consumer brands to energy and aerospace components.
“Iran’s current administration, led by moderate cleric Dr Hassan Rouhani who has been president since winning the vote in 2013, is supportive of renewables as part of his wider commitment to advocate policies that are designed to reverse the country’s economic decline and international isolation” With the lifting of trade sanctions, the UK solar PV industry is also seeking to develop projects in the country. In early April of this year, for example, the Renewable Energy Organization of Iran (SUNA) announced that UK solar PV developer Hive Energy is planning to set up a local company in order to develop solar PV projects in Iran. The
26 network | June 2016
move is part of Hive Energy’s wider push into new and emerging renewable energy markets, where the company has opened new local offices in Mexico, Turkey and Dubai in the last 12 months.
Solar resource and installed capacity
Situated in the sun-belt, most of Iran benefits from about 300 clear sunny days a year and an average of 2200kWh of solar radiation per square metre, though the country’s central and southern regions have the highest levels of solar radiation. However, these areas also tend to be very dry and dusty, which can push up maintenance costs, for module cleaning. Iran’s installed and operational solar capacity is tiny, compared to its resource potential. Solar, mainly PV, accounts for a fraction of the country’s electricity generation mix. The first PV plant, 5kW size, was installed in Yazd in 1993. Some projects followed after, in Yazd, Semnan, Khorasan and Tehran, according to Solar energy in Iran: Investment Outlook (2015), published by Tehran-based renewable energy consultancy Meyar Tose’e Niroo. Since 2008 several concentrated solar power (CSP) plants have been built. Iran’s biggest solar PV power plant, with an output of 190MWh a year began operating in 2014 in Malard in Central Alborz province. Iran also has several small panel assembly factories in operation together amounting to less than 150MW of output. However, the
www.bpva.org.uk
COUNTRY INSIGHT: IRAN Iran benefits from about 2200kWh of solar radiation per square metre
country imports panels, mainly from China.
Electricity market structure
State-owned Iran Grid Management Company (IGMC) operates the power market and electricity network. The main producer of electricity in Iran is the Ministry of Power. The electricity system of Iran (production, transmission and distribution) is centralized and owned by the government. However, recently the government has started to investigate privatization, at the small-scale, to assess its benefits and outcomes for future programmes. At present electricity is provided by state owned power plants administered by the Electric Holding Company of Generation, Transmission & Distribution Company (Tavanir) and its affiliated regional electric companies. Tavanir is responsible for the management of, and controls all shares in, Iran Power Development Company (IPDC), SUNA, Iran Energy Efficiency Organization (SABA), Iran Power Plant Project Management (MAPNA) and Iran Power Plant Repairs Company, as well as 16 regional electric companies, 32 generation management companies and 42 distribution companies. The distribution companies cover different provinces, while others serve different cities. Due to its size, the capital Tehran is served by five of the distribution companies.
Renewables-friendly policy
Iran’s renewables-friendly framework and policy includes a feed-in tariff (FiT) scheme, first introduced in 2012. Following the latest FiT scheme revision, different bands now exist, to cater for different types of renewable
www.bpva.org.uk
energy technologies and for different sizes of renewable energy plants. FThe FiT for solar PV plants with a capacity of 30MW and above is 3200IRR/kWh (£0.073/ kWh), while the FiT for solar PV plants between 10MW and 30MW in size is 4000IRR/kWh. For solar PV plants with a capacity of 10MW and less the FiT is 4900IRR/kWh To support and encourage local manufacturing, the rate of purchase from generators that have projects designed and built locally, using technical know-how, is increased by up to 15%. SUNA has published weighting tables for all components and technology. For example, cells made locally receive a 2% bonus, while inverter electronics receive 2.8%. Any panel glass made in Iran receives 1.2%, while EVA as well as back sheets receive 1.1% and framing receives 1%.
Access to the grid
Renewable energy generators benefit from prioritized grid access, as well as guaranteed purchase of electricity on completion of the SUNA power purchase agreement (PPA). In addition, there are no license requirements, no foreign investment caps, land tax is free and there are exemptions on duties. Iran has well established legal institutions and foreign investment is protected, under the Foreign Investment Promotion and Protection Act (FIPPA) regulation of 2002. The country has set up free zones, as places for investment by western and other foreign countries to set up local operations and offices. These zones benefit from corporation and income tax exemptions. One of the decisions by the government under Rouhani has been the introduction of a fast-track permitting process for renewable energy plants, by restoring overall responsibility for permitting to SUNA. The association has also developed a standardised procedure for large-scale PV power plants above 100kW, to give confidence to investors and project developers. For these large-scale plants, SUNA is the first port of call for applicants. The agency continues to work on speeding up approvals processes to further reduce project development timeframes, which can take more than a year. For smaller systems that are under 100kW in size applicants need to approach the local distribution system operator first. PPAs for solar PV run for a period of 20 years from signature, after which the generator can sell its electricity in the Competitive Electricity Market of Iran, at a price similar to fossilfuelled power plants. The Ministry of Energy’s policy is to reduce
June 2016 | network 27
COUNTRY INSIGHT: IRAN
INSIDE IRAN
Economic overview of Iran and opportunities Iran is the second largest economy in the Middle East after Saudi Arabia, with an estimated nominal GDP of $397 billion (£275 billion) in 2015. After Egypt, Iran has the second largest population in the Middle East with around 80 million people. Approximately 65% are estimated to be under 35 years old and the workforce is highly educated, compared with the rest of the region. EU trade with Iran currently stands at around $8 billion and is expected to quadruple in the next two years. Iran’s economy is currently reliant on the oil and gas sector. It has the second largest gas reserves in the world and fourth largest oil reserves. Iran has highlighted its desire to increase oil output to 1 billion barrels per day in 2016. However, Iran seeks to diversify its economy, and also has significant agricultural, industrial and service sectors. The main imports to Iran are non-electrical machinery, iron and steel, chemicals and related products, transport vehicles, electrical machinery, tools and appliances. The Iranian Government is keen to attract foreign investment, with foreign direct investment needed across all major economic sectors. Over $1 trillion of investment in infrastructure is likely to be needed over the next 10 years. Key opportunities will also include the energy sector, automotive and airline manufacturing sectors. There may be an increased demand for consumer goods such as electronics and clothing. Iran is the world’s biggest emerging market since the collapse of the Soviet Union, half a century ago, according to former Tory chancellor Norman Lamont, who is Britain’s trade envoy to Iran. Source: Foreign and Commonwealth Office (FCO)
the FiT tariffs as the installed capacity of the different renewable energy technologies increase. SUNA, on instruction from the Ministry of Energy, will implement these revisions on an annual basis. Solar PV as well as wind and some other renewable power plants must be operational at full contracted capacity within 18 months of the date of the PPA to benefit from the FiT in effect at the date of signature. In case of delay, the FIT tariff in effect at the time of start of operation will be applied for the remaining period of the PPA. In order to give foreign investors further assurances against an often volatile currency, Iranian policymakers have introduced an index formula to correct for significant inflation and currency fluctuations. According to the report Solar energy in Iran: Investment Outlook (2015), “Foreign investors
28 network | June 2016
see the opening up of Iran’s renewable energy market as a modern day gold rush. Many countries and companies sent delegates, days after the nuclear deal agreement in Vienna. By lifting the sanction in spring 2016 all the embargos related to Iran’s banking system, insurance and energy will be removed and Iran will be able to trade directly.”
Overcoming challenges
However, there are challenges. Compared with other countries, including Germany, Italy and even the US, the UK’s level of trade with Iran lags behind, so companies will need to have a good understanding of the competition in the market and the advantages that other players in the sector have. For instance, German technology, including solar PV modules and inverters, German brands and, by association, services in relation to these, is held in high regard in Iran. German companies have not lost time in developing a pipeline of solar PV projects. Investors and developers also need to be aware of factors that can impact project development timeframes, since delays add costs. Sources of finance in Iran for investing in renewable energy projects are limited. Due to high levels of inflation, interest rates in Iran are high. Iran has a National Development Fund, which provides soft loans for energy and other projects. But, the main source of capital for this fund is oil export income, and since exports have declined in recent years, the fund’s pool of capital is diminished. The availability of international finance is still the highest barrier to entry. While the sanctions have been lifted, many institutions remain cautious – especially those with a US
“From a practical perspective, local and international banking systems need to synchronize so that cash can flow into the country… UK organizations, such as the BPVA, are working with SUNA to ensure the key agreements to the programme, including the PPA, meet international financing requirements” – Alexandra Desouza, BPVA executive committee member
www.bpva.org.uk
COUNTRY INSIGHT: IRAN
presence. Inter-governmental level discussions are on-going to try and give comfort to banks and investors that, with regard to political risk, Iran is a safe investment opportunity, Desouza observes.
Iran is the world’s biggest emerging market since the Soviet Union’s collapse
“From a practical perspective, local and international banking systems need to synchronize so that cash can flow into the country. We understand that SWIFT is still not fully operational as of today. UK organizations,
FAQS
Iran’s Renewable Energy Programme The BPVA has brought together a team of legal advisers, both in-house and on the ground in Iran to answer some pressing questions about the country’s renewable energy programme. 1. Can foreign companies invest directly in Iran? A. Since economic sanctions were lifted on 16 January 2016, it has been possible for EU nationals and companies to invest directly in Iran. There are no restrictions on foreign nationals owning shares in an Iranian corporate entity. A common investment strategy is to incorporate a joint venture company in Iran. The most recommended corporate structures for the establishment of JVs in Iran are joint stock companies and limited liability companies. 2. What permissions are required to secure a power purchase agreement (PPA) with the Renewable Energy Organisation of Iran (SUNA)? A. On establishment of a company in Iran it is possible to register a project and apply to SUNA for a construction permit (this can be done online). Once this preliminary permission is issued by SUNA, the next stage of permitting
www.bpva.org.uk
must be completed before SUNA will conclude the PPA with an applicant. It is necessary to secure an Environment Protection Permit, Grid Connection Permit and Land Usage Permit. A preliminary construction licence is valid for six months and full permitting and execution of the PPA must be completed within this time period. Once issued, it is not possible to transfer the construction licence to another entity. 3. What is the term of the PPA offered by SUNA and what feed-in tariffs (FiTs) apply? A. The SUNA PPA is for a term of 20 years from the date of signature. The FiT is fixed at the date of signature provided that the project is fully operational within 18 months of signature. After this period, the latest FiTs announced by SUNA will apply to the remaining term of the PPA. The FiTs are banded according to technology and size of project. The latest rates are published on page 8, in the news story Iran publishes new FiT tariffs. SUNA has indicated that it is considering restrictions as to the number of construction licences issued to one applicant at any time before any of its projects are operational. In ➥
June 2016 | network 29
COUNTRY INSIGHT: IRAN such as the BPVA, are working with SUNA to ensure the key agreements to the programme, including the PPA, meet international financing requirements,” says Desouza. There is still work to be done. The process for securing land, especially state owned land, can be time-consuming and given the infancy of the market, there is a lack of awareness and understanding of the international financing requirements to be built into land transfer/ lease agreements. Fortunately SUNA is open to collaboration with experienced industry players.
UK in a good position
Despite the international interest that Iran’s nascent solar and wider renewables potential has begun to attract, the UK industry is in a good position to develop new business in the country. The UK has been the fastest growing European solar market over the past three years – UK companies have therefore been at the forefront of industry developments and are in a perfect position to carry the latest and best industry practice to Iran. Desouza says: “UK solar companies, such as Lightsource, Hive and Primrose Solar, have developed strong relationships with UK and international debt and equity finance providers
who are now looking to invest in new markets as the UK sector slows down. These investors want to participate in projects with known partners who understand their particular credit requirements. “Given the challenges of bringing international finance to Iran the importance of having an acceptable sponsor and EPC contractor, cleared by an investor’s credit committee cannot be underestimated.” In relation to large-scale renewable energy plants SUNA has strived to create a very transparent arrangement and provides regular updates to any new developments and changes happening in the market. Most of the information on the agency’s website is in English and key officials at the agency, including the managing director and his various deputies can be easily contacted. In order to gain first mover advantage in any new market requires a level of risk-taking and Iran’s emerging solar PV market is no different. Investors and players have to be prepared for a steep learning curve, to build the market as they go along, initially. But, the rewards can be worth it. The BPVA, through its members, is committed to sponsoring 1GW of solar development and has been working with SUNA to create a long-term regulatory and financing platform to achieve this.
Opposite: Keeping the lights on. Continued growth in domestic electricity demand is one of the reasons why the Iranian government wants to develop the country’s extensive solar, wind and alternative energy resources
FAQS (CONTINUED)
Iran’s Renewable Energy Programme ➦ addition, where an applicant has separate construction licences but the projects share land or a grid connection, the capacity for the purposes of FiT banding would be the aggregate capacity across the projects. In the case of delay of a maximum of nine months related to the times that are mentioned in the commercial operation of the power plant, SUNA is allowed to terminate the power purchase agreement of that power plant, annul their construction permit and also refund the state lands which are intended for the construction of the power plant through the competent authorities. In the event that the part of the power plant capacity is operated, the construction permit capacity and the contract proportionally will be reduced and the rest of the state lands will be refunded. 4. Are the FiTs “grandfathered” and are they indexed to inflation and exchange rate fluctuations? A. Yes, SUNA has stated that the FiTs applicable at the time of signing the PPA will be exempt from any future changes to tariff levels. All PPA payments are made in Rials. Each year for
30 network | June 2016
the term of the PPA the FiTs will be adjusted for inflation and exchange rate changes according to an adjustment formula set by the Economic Council Directive. It is worth noting that from Year 10 of the PPA the applicable FiT will be multiplied by 0.7 after applying the annual FiT inflation/foreign exchange (FX) adjustment. 5. Are there are any local content requirements? A. No, there is no requirement to use local equipment and services in order to qualify for a PPA. However, the FiT will be proportionately increased by up to 15% for projects constructed using local equipment, technologies, installers, design and manufacturing. SUNA have indicated that this bonus will be increased to a maximum amount of 30%. Note that a further bonus of 148 Rials/kWh is available for projects connected to the local distribution network. 6. Can foreign nationals own land and can a long-term lease of land be taken? A. Direct ownership of real estate by foreign nationals is
www.bpva.org.uk
COUNTRY INSIGHT: IRAN PHOTO: ALIREZA KHEIRKHAH
restricted but it is possible to own land through a company registered in Iran. While long term leases are not common in Iran, it is possible to take a lease and the term and rent can be freely agreed between the parties. 8. Does the Iranian Government offer any protection to foreign investment? A. The main Iranian foreign investment law is the Foreign Investment Promotion and Protection Act (FIPPA). The FIPPA grants foreign investors the same rights, protections and facilities available to domestic investors. This includes permission for investment in all fields where private sector activity is allowed and permission to hold up to 100% of shares in Iranian legal entities. Protection against expropriation and nationalization is guaranteed except where public interest reasons apply, in which case the expropriation should follow a non-discriminatory procedure and the investor should obtain compensation based on the real value of the investment. Moreover, the FIPPA includes provisions to ensure free transfer of foreign capital and profits of foreign investment abroad. Investors may also seek to take advantage of the many Bilateral Investment Treaties with Iran by indirectly investing
www.bpva.org.uk
via a Holding Company incorporated in a jurisdiction that benefits from such a treaty. 9. Who is responsible for issuing the grid permission and for the connection of projects? A. The Electric Holding Company of Generation, Transmission and Distribution (Tavanir) owns and manages the regional electricity companies, generation management companies and distribution companies. Grid permission is subject to delivery of an acceptable grid feasibility study carried out by a company approved by Tavanir. Whether the permission is issued by a distribution company, regional electricity company or Tavanir will depend on the capacity of the project and voltage of the connection. Grid connection works can be carried out by a private company under the supervision of Tavanir. The grid feasibility study should set out clearly the design and connection plan for the works. On completion of the works and commissioning, Tavanir will own and manage the connection facilities including the substation. 10. What is the average solar radiation in Iran? A. The average solar radiation in Iran is 4.5â&#x20AC;&#x201C;5.5 kWh/m2 with 300 sunny days annually on two thirds of the countryâ&#x20AC;&#x2122;s land area (Source: SUNA website)
June 2016 | network 31
MARKET TRENDS
Solar pricing security Why private-wire agreements will be key to unlocking demand in the C&I solar market in a post-subsidy world
32 network | June 2016
PHOTO: LIGHTSOURCE
L
ightsource’s floating solar farm project for Thames Water has been mentioned across the news recently. After all, a reservoir is an unusual place for a power plant. But how the project has been financed demands as much attention. Thames Water is buying the electricity generated by the solar plant under the terms of a private-wire power purchase agreement (PPA). A private-wire PPA sees a developer connect a large-scale rooftop or ground-mounted solar array behind the meter of a major energy user. The offtaker of the energy signs a longterm PPA contract (20 years at least) with the developer, agreeing to purchase a certain percentage of the energy generated by the installation at a pre-agreed index-linked price. The solar developer finds the land, builds, operates and maintains the site. With the recent cuts to feed-in tariff rates and the removal of the renewables obligation certificate (ROC) mechanism, much of the UK’s commercial & industrial (C&I) market could be financed in the same way in future. Customers pay below current electricity prices. By installing a utility-scale installation and connecting it behind the meter, some charges levied on grid purchased power can be avoided. Lightsource’s CEO Nick Boyle says: “Our target at Lightsource is to undercut the energy users’ bill by 15% and fix that cost for the next 20 years – indexed-linked at the retail price index (RPI). If you look at the projections, electricity price and inflation increases outstrip RPI. Not only are you looking at a 15% reduction in costs today, the gap gets even bigger because RPI is predicted to rise by 2.6% and electricity price/ inflation at more than 5%. Therefore, the savings increase year-on-year.” Lightsource is developing several other private-wire network projects in the UK. They include signing a 25-year PPA with Belfast International Airport for the largest solar project to connect to a UK airport. The developer will hard-wire a 4.84MW off-
site solar PV farm into the airport’s private network, providing 27% of the airport’s annual electricity demand. Over the past five years Lightsource has developed a UK solar PV portfolio of more than 1.3GW. Boyle is confident the company will install double that amount over the next five years. “Private-wire projects are going to be absolutely central to us achieving that target,” he says. In the markets that Lightsource is looking to expand into, which include the US, Latin America – Mexico especially – and India, there is big potential for private-wire projects. These types of projects will also prove attractive in off-grid sectors, such as oil and gas and mining. PPAs provide two key things – price security and supply security. Boyle says: “We are looking at solar markets with a five year future at least – so a good regulatory framework in place is important, with a sufficient volume of potential capacity to develop on an annual basis that can sustain our business in that local market. The electricity prices need to be higher than the cost of generating solar electricity, without subsidy, but a well-structured government tender process is also good.” In addition, Lightsource is also in the process of developing an offering for private-wire projects in the residential UK solar PV market.
Lightsource has developed a floating solar farm on Thames Water’s QE2 reservoir
www.bpva.org.uk
COUNTRY INSIGHT: IRELAND
Ireland’s solar PV market is ready to roar The minority government formed by the Republic of Ireland’s two main parties views solar PV positively and players hope this will result in support to unlock pent-up demand
34 network | June 2016
A
ccording to an extract of the New Programme for Government, solar seems to be an area where the new minority government formed by Ireland’s rival parties Fine Gael and Fianna Fáil is in agreement. The document states: “We will facilitate the development of solar energy projects. Solar has the potential to provide a community dividend. The Department of Agriculture shall endeavour to facilitate such development while maintaining basic payment schemes, subject to European Commission approval.” “The Department of Communications, Energy and Natural Resources is running a consultation to see what renewable technologies should be supported. With such a strong mention for solar in the Programme for Government it would be fair to assume solar will be supported by whatever new regime will be brought in,” says Mark Varian, a partner at Eversheds’ Ireland office in the law firm’s construction and projects team in the corporate and commercial practice. The firm is advising a number of Irish and international investors. With a policy support mechanism
The 250kW rooftop solar PV installation by Solar Electric Ireland for O’Shea Farms in Kilkenny is Ireland’s largest private investment in a solar PV Photo: Solar Electric Ireland
www.bpva.org.uk
COUNTRY INSIGHT: IRELAND introduced, total solar deployment in Ireland over the 2017-2030 period is projected at approximately 3.7GW in a central scenario calculated by KPMG in its report, ‘A Brighter Future: the potential benefits of solar PV in Ireland’ published in 2015 for the Irish Solar Energy Association. At present, the only support for solar is from the government’s Sustainable Energy Authority of Ireland (SEAI), which provides grants, with over €20 million (£15.6 million) available annually. But, this pot of funding is split between several different technologies, including renewable energy, such as solar PV, and energy efficiency technologies, such as LED lighting. According to KPMG’s report solar PV is becoming competitive in Ireland, not only against other renewables but also against conventional forms of generation, since costs have fallen by 80% from 2008 to 2013. The report estimates that a large-scale ground-mount project in Ireland would now cost in the region of €150/MWh. According to Nick Boyle chief executive of solar PV developer Lightsource, Ireland’s solar potential will need to be developed if the republic is to have a chance of meeting its renewable energy target of 40% by 2020. Despite having abundant wind resources,
CHALLENGES
Can a solar boom help Ireland hit its target? UNLIKE other countries, which have incentivized all types of renewable energy technology, including wind, solar PV, biomass and others, there is no FiT for any type of solar PV installation, whether rooftop or ground-mounted, under Ireland’s Renewable Energy Feed in Tariff (REFIT) scheme. However, Ireland has some of the highest renewable energy targets of any EU member state aiming to source 40% of its electricity from renewables by 2020. Most of the country’s renewable energy capacity consists of onshore wind, but projects deploying this technology are proving more contentious to develop and gain planning permission. According to KPMG’s calculations, generation tariffs for domestic scale rooftop installations (the most expensive type to install) would need to start at around €13 cents/kWh in 2017. Grid connection could be a challenge. CER is dealing with applications amounting to 3GW of solar PV. The figure is rising.
“Ireland’s Commission for Energy Regulation is conducting a consultation as to how to deal with the avalanche of solar applications. Last count it was up to about 3GW and rising rapidly, bearing in mind there is only about 2.8GW of operational renewable energy assets on the island currently” – Mark Varian, Eversheds law firm Ireland had developed 2.4GW of wind power by the end of 2015, which along with just over 600MW of wind installed in Northern Ireland, meets about 24% of the island of Ireland’s electricity demand. Lightsource is an early mover in the market and its projects include a 20.56MW groundmount solar farm in Monaraha, in Tipperary. “We have a significant pipeline in Ireland,” Boyle says. Robert Goss, joint managing director of installer Solar Electric Ireland, says: “Without a FiT-type programme in place, the return on
www.bpva.org.uk
investment is too long for many agricultural and industrial businesses in Ireland. This is shame because there are many types of businesses that use a lot of electricity during the day, which matches the output of solar panels. But without an incentive in place the economics of investing in solar are challenging to get right.” But, Varian says: “Due to the position of the European Commission a move away from FiTs is inevitable, save for where consumers are involved, such as residential solar PV rooftop.”
Challenges
According to Goss there are also other areas that need addressing to enable solar PV adoption, which include rules, initially introduced for solar thermal systems, which limit the number of panels that can be fitted onto a roof before planning permission has to be sought. Goss says: “Removal of these planning restrictions will also help to ensure more widespread uptake of solar PV.” Solar Electric Ireland was set up in 2011. The company’s main markets are commercial and residential solar PV. As well as being the main distributor for Conergy’s panels in Ireland, the company has distribution rights for SMA inverters and mounting systems from S Flex. In 2015 Solar Electric Ireland supplied and installed the republic’s largest private investment in solar PV, a 250kW rooftop for customer O’Shea Farms in Kilkenny.
June 2016 | network 35
COUNTRY INSIGHT: IRELAND
PHOTO: SOLAR ELECTRIC IRELAND
Robert Goss, joint MD of Solar Electric Ireland, a leading installer of rooftop solar PV in the market
With the introduction of an incentive, Ireland is likely to attract more solar industry players. Goss says: “Rooftops are similar to those in the UK, as opposed to rooftops on the continent, so there are certainly synergies. Challenges include high-wind conditions in some places. We want to see an emphasis on high quality, which sometimes gets overlooked when incentive-driven markets first emerge.” Another looming challenge is Ireland’s grid connection policy, according to Varian. “Ireland’s Commission for Energy Regulation (CER) is conducting a consultation as to how to deal with the avalanche of solar applications. Last count it was up to about 3GW and rising rapidly, bearing in mind there is only about 2.8GW of operational renewable energy assets on the island currently,” Varian says. Based on projections and applications filed, Ireland’s ground-mount PV market could be in the region of 100–200MW annually, possibly more, with rooftop about 50MW a year. But, Varian sounds a note of caution. “The level of interest is so great that returns may be squeezed once the opportunity arrives and the support schemes are in place,” he says.
14 – 16 FEBRUARY 2017 DUBAI, UAE
4 – 6 DECEMBER 2016 CAIRO, EGYPT As the region’s leading solar trade events, Solar Middle East & Solar-Tec provide your company with direct, established access to decision makers for major projects across the Middle East and North Africa. For booking and more information: www.solarmiddleeast.ae www.solartecegypt.com
ENERGISING THE INDUSTRY Brought to you by
36 network | June 2016
www.bpva.org.uk
NEW MARKETS FOR SOLAR PV
Where to invest next? With solar PV demand in the UK expected to slow and the focus shifting to new markets, new opportunities for the industry and its investors are emerging comfortable with them so that they can provide finance,” says Quantock. Deloitte acts for buyers and sellers. The firm also raises finance for transactions, including structuring finance.
PHOTO: DELOITTE
Global solar markets
M&A activity is increasing in the UK solar market, as owners and developers look to trade these assets, according to Deloitte’s Gavin Quantock
W
hen looking at the UK solar PV sector, the activity has been mixed and there are not as many new developments as previously, according to Gavin Quantock, a director in Deloitte’s advisory corporate finance, energy and infrastructure sector. Activity in solar has switched to more acquisition and/or disposal activity as owners and developers look to trade these assets. He says: “We believe that consolidation of portfolios will continue. Buyers of these assets tend to include investment funds looking for long-term yield assets, including infrastructure funds and pension funds, from all over the world.” Investors are comfortable with the solar sector. They understand the risk profile of these assets and there is a well-trodden path on how to structure and finance them. “The perception around renewable energy assets is one of positivity in the whole, we all know that renewable energy is going to be a way forward and therefore the key is mitigating the risks around them so that investors and financial institutions can get
Solar markets abroad where investors are investing in assets include India, which is considered the fastest growing renewable market in the world by many. “The key to expanding into these markets is being able to demonstrate experience and track record, this is of fundamental importance.” In terms of other countries, Egypt, Turkey and Nigeria also have future solar plans with the three combined having indicative pipeline capacity of well over 1GW, according to Quantock. The team Quantock works in consists of about 30 based in the UK, working in the energy and infrastructure sectors. “In terms of energy we work across the spectrum including solar PV, wind and biomass waste, offshore wind, waste and district heat networks.” The Deloitte team is part of a global network at the firm. In the UK the team has a deep knowledge of the solar and wider renewables sector and an understanding of the market dynamics. Quantock says: “If UK businesses and investors are looking at markets abroad then Deloitte will work with colleagues in local markets. The strength of the global network is really important. It also means that Deloitte’s UK team can provide their clients with a good understanding of local markets for international transactions. “We are very well connected and as our
“UK solar has a lot to offer export markets, because these companies have developed such a lot of projects in the UK and delivered them on time. They are able to point to this track record to investors from other markets and use it to promote their services abroad”
www.bpva.org.uk
June 2016 | network 37
NEW MARKETS FOR SOLAR PV clients expect more global reach then we can help them with this.” He thinks that UK solar PV developers and engineering firms have potential to export their services. “UK solar has a lot to offer export markets, because these companies have developed such a lot of projects in the UK and delivered them on time. They are able to point to this track record to investors from other markets and use it to promote their services abroad. This combined with positioning the offering with local knowledge is crucial when going outside of your ‘home’ market,” says Quantock.
Energy storage
Energy storage as also another area where Deloitte is seeing growing interest in the UK, due to the National Grid’s new enhanced frequency response market. “However, because this market only guarantees to pay out revenues for the first four years of the plant’s operation investors want to know what the revenue streams and models might look like beyond that.” Deloitte has spent a significant amount of time working on different commercial structures and what the build-up of the
38 network | June 2016
“The perception around renewable energy assets is one of positivity in the whole, we all know that renewable energy is going to be a way forward and therefore the key is mitigating the risks around these assets so that investors and financial institutions can get comfortable with them so that they can provide finance” revenue stack will look like in this sector. This includes analyzing various projects already in operation. However, because storage assets are few and far between, due to the early stage of the market, Deloitte’s clients are also looking at opportunities across Europe, including Germany, as well as other global markets. This requires understanding the local regulatory regime, when putting transactions together. The team will often work with developers of energy storage projects and put them in touch with infrastructure funds or generic financiers.
Emerging solar PV markets offering new opportunities for developers include India and Egypt (below) PHOTO: ENERPARC
www.bpva.org.uk
aleo
More power. Higher yield. Endless possibilities. Quality Made in Germany Find out more aleo solar GmbH I Marius-Eriksen-Str. 1 I 17291 Prenzlau I Germany I www.aleo-solar.com I info@aleo-solar.com
BPVA
British Photovoltaic Association
Who we are
The British Photovoltaic Association (BPVA) is the national trade association of the UK solar photovoltaic industry. The BPVA is a strong political and commercial organisation. As an influential and trusted voice of the industry, we have made a significant contribution to the emergence of the UK’s solar PV industry in recent years, which is now one of the largest solar markets in the world by installed capacity.
The BPVA stands for quality and value to its members Our mission is: “To ensure that solar photovoltaic energy is established as the leading renewable energy source in the UK and to promote the UK solar industry internationally.” We promote solar PV and assist our members in the development of their businesses at home and abroad. We recognise the importance of energy storage and electric vehicle (EV) charging technologies for solar PV. Through a number of innovative programmes, we are actively engaged in developing sustainable business models connecting solar PV, energy storage and EV charging technologies.
Governance
The BPVA is a fully independent, not-for-profit organisation. We are the only trade association entirely focused on solar PV. A dedicated in-house team oversees the daily activities of the BPVA. These include membership management, marketing, events, finance and policy. The executive committee is selected from various membership categories and represents all members’ interests. The BPVA has seven working groups: policy, communication, application, education, finance, energy storage and EV technologies. These are aimed at sharing knowledge and resources, channelling members’ expertise, advising key decision makers on market development and coordinating policy and lobbying activities.
Our members
Our members span companies across the entire solar PV value chain. These range from PV panel, inverter and balance of system (BoS) component manufacturers to installers, developers, investors and utilities, while we are attracting companies from the emerging sectors of energy storage and EV charging infrastructure. n Solar module manufacturers n MCS-certified installers n Inverter manufacturers n EPCs and system integrators n Developers n Distributors, retailers and resellers n Production equipment manufacturers n Material and BoS component suppliers n Architects, homebuilders and developers n Universities and educational institutions
n Research organisations nB anks, financial institutions, investors n Lead generation, marketing and media n Consultancies n Utilities and energy suppliers n Recruitment and training companies n Insurance firms n Community energy initiatives n Housing associations n Local authorities and councils
n Legal and other professional services n Governmental organisations/institutions n Roofing contractors n Energy storage system manufacturers n Energy storage integrators n Electric vehicle charging infrastructure companies n Monitoring and energy management companies n Other trade associations
Why join the BPVA
Our key objective is to grow solar PV’s share of the UK’s energy mix. We engage with the government at the highest level making sure the industry is represented. Our members play an important role in this process. By becoming a member, your organisation will be influencing decision makers. You will have access to intelligence on current and future regulatory frameworks and market developments, all of which is critical to enable your business to develop.
Tap into emerging solar PV opportunities
In the past few years, thanks to good subsidies and a strong regulatory framework, the UK has rapidly grown into one of the largest markets for solar PV by installed capacity. British and UK-based solar companies have exportable skills and expertise in all services that are required in the planning, design, development, construction and financing of PV projects. We are committed to helping our members tap into opportunities in new emerging solar PV markets worldwide. Membership also provides numerous other benefits, including a number of high-profile networking events, ministerial round-table meetings, exhibitions, conferences, workshops and working group meetings where our members meet in an exclusive environment. BPVA events are the ideal networking platform for you to develop effective political and business contacts. By joining the BPVA, you will be directly involved in the UK solar PV market as well as connected to international opportunities.
BPVA
British Photovoltaic Association
Be involved
Take part in shaping the industry by being at the heart of the decision-making process. Work in partnership with the government and be part of the policy development team. Increase awareness and promote solar PV as an important part of the UK energy mix.
Be informed
Obtain key information on market, data forecasts and government policies to help you plan your strategy. Get exclusive access to the latest information and regular updates on all developments directly affecting the solar PV industry in the UK and globally.
Be connected
Make the right connections, improve your brand, develop your network and meet new business partners. Gain visibility through our website and unique marketing activities.
Be ahead
Be the first to learn about new and developing technologies and applications such as energy storage, electric vehicle charging solutions and BIPV products.
Be global
Let the BPVA be the first important step in helping you unlock some of the exciting new PV opportunities in emerging markets around the world.
BPVA â&#x20AC;&#x201C; The voice of the solar PV industry in the UK Member benefits
n Lobbying and policy development n Market information, market research and surveys n Exhibitions and conferences n Sponsorship opportunities enabling you to gain awareness and credibility in the industry enhancing your brand n Networking events - including annual drinks reception at the Houses of Parliament n Discounts on events, products, publications and services n Access to industry experts providing advice on the market, regulations, certification processes and technical support n Trade missions and opening export markets n Weekly e-newsletters n Access to publications, market research and reports n Sales and marketing support n Member and installer directory n Public awareness campaigns n Insurance services n Financial services n Recruitment services n Training and workshops n Standardisation and certification n Use of BPVA logo n Networking with other members n Exposure to our global industry network of over 115,000 contacts n Membership certificate and membership card n Sales leads from RatedSolarInstaller.com and the BPVA website n Numerous brand-building opportunities n Exposure through the website n BPVA video casts n BPVA member pavilion at major trade shows n Free subscription to Network magazine, published by the BPVA n Free subscription to Smarter Living magazine, published by the BPVA & Haymarket Media Group CONNECT WITH US
www.bpva.org.uk | info@bpva.org.uk
Find a solar installer in your area that is trusted to provide a high standard of work, using the best products. Post a Job FREE
Domestic
Commercial
Rated Solar Installer is unique & FREE online platform for the solar photovoltaic industry, designed to give customers confidence when selecting an installer. Customers can read unbiased reviews and ratings of installers, receive up to three quotes and complete a rating after their solar installation is completed.
School
Just follow a few easy steps to find your ideal solar installer using our FREE online platform. Register with Rated Solar Installer Post a job for FREE Read installer reviews & ratings to choose your preferred installers
Using Rated Solar Installer will take the risk out of choosing the right company to do the job. Our installers are prequalified, and constantly reviewed, so you can have confidence in their standards of installation.
Get up to 3 quotes Choose your installer Have your system installed Register your installation with Rated Solar Installer Rate your installer to help others
A FREE of charge service
Claim your FREE 10-year insurance workmanship insurance
Quick and easy access to top quality installers Enhanced confidence and security in choosing installers Receive and compare up to 3 quotes Access to unbiased reviews and ratings from other customers 10 years FREE workmanship insurance (domestic installations only, subject to acceptance)
info@ratedsolarinstaller.com
PARTNER FEATURE
The risk and reward of being an early mover The clean energy and sustainability group at Eversheds law firm is expanding its international outreach PHOTO: EVERSHEDS
S Iwan Walters, partner at Eversheds’ clean energy and sustainability group. Credit: Eversheds
ince 2003 UK law firm Eversheds has grown its clean energy and sustainability group to a 100-strong legal team, which is seeing a boom in international solar transactions. The clean energy and sustainability group, headed by Michelle Davies, provides legal advice on all renewable and clean energy technologies, such as wind, solar and biomass. About 60% of the team advises on deals and clients’ activities in the UK, while the remainder works on international transactions. Some of the legal team is based in international offices in various locations, including Hong Kong and Dubai. The group’s practice covers all legal aspects of renewable energy deals, including real estate and consenting, offtake agreements, grid, construction, equity and debt financing as well as regulatory advice. Clients are a mix of developers, including West Coast Energy, China Sunergy, SunCredit, INRG and Camborne Capital, as well as funds that buy projects including investment management firm Black Rock, Foresight and Glennmont Partners, one of Europe’s largest clean energy investment companies. Eversheds is also focused on expanding its international activities, advising UK renewable energy companies on deals in emerging markets for renewables. In the Middle East the law firm has local offices in Saudi Arabia, Dubai and Abu Dhabi and has exclusive relationships with other local law firms to advise on legal aspects of clean energy projects. Where Eversheds does not have a local office, it partners with law firms in a jurisdiction. “It is an exciting time to be a lawyer working in the area of clean and renewable energy, because many of the opportunities that are beginning to emerge are international,” says
Iwan Walters, a partner in the clean energy and sustainability group and Eversheds’ corporate practice. Increasingly UK companies that have emerged as key players in the solar industry in the last few years, are targeting markets abroad. “The key advantages in the UK market have included a stable regulatory regime, a good grid network and a liquid capital market, with debt and equity financing. Where some of these feature in other international markets, it presents good opportunities for players in the UK renewable energy industry,” says Walters. Walters and his team have also been working with regulators in Iran to help shape regulatory policy relating to renewables. “In Iran, for example, the government has a competitive feed-in tariff (FiT) for solar PV and we have been working with our local partner – Sandlaj International – and the government of Iran and central bank of Iran on aspects of the solar PV programme such as power purchase agreements (PPAs). There are certain provisions needed in the PPA that western banks/investors require and the government is receptive to this, so we are in the process of presenting these changes to the regulator.” Making some key changes to the PPA in addition to having more banks in Iran – which will start to happen now that many international trade sanctions have been lifted – will help to create a more competitive market for developers seeking finance to fund projects. “Being an early mover in a new market means being involved in shaping it. There is an element of risk in that, so our work is about helping to mitigate that risk for our clients.” Legal advice on energy projects in the oil and gas and traditional power sectors have tended to be dominated by the established corporate law firms in the UK, including the top five,
“Being an early mover in a new market means being involved in shaping it. There is an element of risk in that, so our work is about helping to mitigate that risk for our clients”
www.bpva.org.uk
June 2016 | network 43
PARTNER FEATURE dubbed the ‘magic circle’, which include Clifford Chance and Freshfields Bruckhaus Deringer. “From the outset we knew that to get a seat at the table, we had to be involved in new markets very early and be more innovative in our approach, in order to establish our presence and build our reputation. We took the lead in Egypt, for example, advising on regulatory frameworks, reviewing project documents and advising on deals,” says Walters. The firm takes a similar approach in other emerging clean energy markets, not just in Iran, but in some African jurisdictions including Kenya and Ghana, as well as Argentina and some other Latin American markets. An important part of this strategy involves working with the right firms on the ground. “We have a network of ‘best friend local law firms’. For instance, we work exclusively with Sandlaj in Tehran who have been working with the Iranian government for a number of years,” Walters says.
Back in the UK
“Despite cuts to incentives for technologies such as wind and solar PV, there’s still a lot of legal work in the UK, in refinancing and advising on transactions where solar or wind farms are being sold to new owners and operators who are aggregating operating assets to take advantage of the income streams,” says Walters. Though there is growing interest in energy storage, financing remains a challenge. “In the National Grid’s new ancillary services market, revenues are only guaranteed for the first four years. That’s too short a timeframe for project financing.” The only options then are asset or equity financing. “That’s why you might see manufacturers of battery systems financing these projects. That said, the market is attracting all types of players. Not just power producers, but renewable energy developers who might already have an existing site and grid connection rights, who are looking at adding storage,” says Walters.
Holdcos – an emerging financing trend
In terms of financing renewable energy projects, one trend is the growing use of backleverage debt, known as Holdco loans, already popular in the US market. Holdco loans are not secured by the actual project but by the cash flow allocated to the sponsor’s equity share.
44 network | June 2016
Most large-scale renewable energy installations, such as wind farms and ground-mounted solar farms, are financed using non-recourse project financing, where lenders are entitled to repayments from profits from the project’s income, once operational. In international projects, loan security and enforcement is subject to the laws of the jurisdiction in which the secured assets are located. The debt is not secured by the project, but by the sponsor’s interest in the project company, without recourse to the sponsor itself. “In emerging markets, we are starting to see project financing structures using a Holdco structure because it gives lenders additional security,” says Walters. The project and its assets are owned by an entity incorporated in the local jurisdiction, the same with a traditional project finance deal, but above that sits a Holdco, which is incorporated in a more attractive international legal market, one which might ideally have a bilateral trade agreement in place with the local market where the project is being developed.
OVERVIEW
The clean energy and sustainability group Eversheds’ specialist clean energy and sustainability team is one of the leading international teams and has been awarded Renewable Legal Advisors of the Year (Euromoney/Ernst & Young). The group advises on all aspects of all renewable and clean energy technologies across Africa, Asia, Europe and the Middle East, including: l Onshore and offshore wind l Biomass l Waste and landfill gas to energy l Solar l Wave and tidal l Hydro generation l Biofuels l Clean development mechanism (CDM) projects l Carbon credit trading l Energy storage Eversheds has advised on over 50% of the UK’s offshore wind projects; including acting as lead adviser on the largest offshore wind project in the world, as well as leading on the financing of the world’s largest proposed biomass project, and a cross-border hydropower project in West Africa.
www.bpva.org.uk
CHARGING THE FUTURE A powerful combination: Europe’s largest exhibition for batteries and energy storage systems and the world’s leading exhibition for the solar industry 380 energy storage companies, a special exhibition on e-Mobility & Renewable Energy, three days of expertise in exhibition forums, plus a program conference The efficient generation, intelligent storage and decentralized distribution of renewable energy: discover future-ready solutions for energy supply and mobility Register online to benefit from the early bird special!
JUNE 22–24, 2016 MESSE MÜNCHEN GERMANY EUROPE'S LARGEST EXHIBITION FOR BATTERIES AND ENERGY STORAGE SYSTEMS
www.ees-europe.com
CONFERENCES & EVENTS
The 2016 solar calendar PHOTO: GALLEON PROPERTY SEARCH
32nd EU PVSEC conference
20–24 June International Congress Centre (ICM) Munich, Germany EU PVSEC is the largest international Conference for Photovoltaic research, technologies and applications. The conference, now held in conjunction with Intersolar Europe, gathers the global PV community to conduct business, to network and to present and discuss the latest developments and innovations in photovoltaics. photovoltaic-conference.com/
Intersolar Europe (including ees Europe)
22–24 June Messe München Halls A1-A3, B1-B3 Munich, Germany Intersolar Europe is the world’s leading exhibition for the solar industry. In 2015, more than 1000 international exhibitors and around 38,000 trade visitors attended Intersolar Europe. The exhibition focuses on photovoltaics, PV production technologies, energy storage systems and renewable heating. Since its founding, Intersolar Europe has become the most important industry platform for manufacturers, suppliers, distributors, service providers and partners of the solar industry. The accompanying Intersolar Europe Conference consolidates the topics of the exhibition. In 2016, ees Europe, Europe’s largest exhibition for batteries and energy storage systems, takes place, again, in conjunction with Intersolar Europe, covering the entire value chain of innovative battery and energy storage technologies. intersolar.de/en/home.html
Intersolar North America
12–14 July Moscone Center West Hall 800 Howard Street San Francisco, California Since it was set up in 2008, Intersolar North America has become the most attended solar event and the premier networking platform for the North American solar industry. Co-located with SEMICON
46 network | June 2016
Palma de Mallorca will be the setting for the 11th ISES EuroSun Conference
West, the show takes place annually at the Moscone Center in San Francisco, California, the United States’ pioneering solar market. The event’s exhibition and conference both focus on the areas of photovoltaics, PV production technologies, energy storage and solar thermal technologies. intersolar.us/en/home.html
Intersolar South America
23–25 August Expo Center Norte White Pavilion São Paulo, Brazil Intersolar South America takes place at the Expo Center Norte in São Paulo, Brazil and has a focus on the areas of photovoltaics, PV production technologies, energy storage and solar thermal technologies. intersolar.net.br/en/home.html
Iran Solar PV Investment Opportunities
September 2016 London, UK The BPVA will host a development and financing workshop on the Iranian solar market. The event includes an overview of the regulatory framework and PPA terms, market update and a foreign investment strategy and protections session. There is the opportunity to discuss development challenges with key market participants including representatives from SUNA.
Solar PV, Energy Storage, EV Charging & Off-Grid Solutions Forum 2016
14 September 2016 London, UK Organised by the BPVA and International Battery & Energy Storage Alliance (IBESA), the one-day forum will cover several topics including further potential for solar PV in the UK, latest UK energy storage trends, as well as latest developments in e-mobility, including pilots, as well as an off-grid energy session. bpva.org.uk/members/bpva/events/ solar-pv-energy-storage-ev-charging-offgrid-solutions-forum-2016/
Solar Power International (SPI) 2016
12–15 September Las Vegas Convention Center North Hall & Westgate Hotel Las Vegas, Nevada Set up by the Solar Energy Industries Association (SEIA) and the Smart Electric Power Alliance (SEPA), SPI held its inaugural show in 2003. The event focuses solely on creating an environment that fosters the exchange of ideas, knowledge and expertise to further solar energy development in the US. Unlike other solar conferences, all proceeds from SPI support the expansion of the solar energy industry through SEIA and SEPA’s year-round research and education
www.bpva.org.uk
CONFERENCES & EVENTS activities, and SEIA’s extensive advocacy efforts. SPI’s primary mission is to deliver on the missions of both SEIA and SEPA in a way that strengthens the solar energy industry domestically and globally, through networking and education, and by creating an energetic and engaging marketplace to connect buyers and suppliers. solarpowerinternational.com/
Intersolar Middle East
19–21 September – Intersolar Middle East Dubai World Trade Center Dubai, United Arab Emirates With some of the highest solar irradiance levels in the world, large open spaces and an increasing demand for energy, experts verify the high growth potential of the MENA region’s solar industry. The organizers of Intersolar, the world leading exhibition and conference for the solar industry, have been active in the Gulf region for the past three years. In 2016 the organizers are teaming up with dmg events Middle East Asia to organize Intersolar Middle East in conjunction with GulfSol. ntersolar.ae/en/home.html
International Conference on Renewable Power Generation
21–23 September Savoy Place London, UK The Institution of Engineering and Technology’s RPG event is a growing forum for international academics, industry and business leaders to meet, publish results and share knowledge in the renewable power generation sector. With a revised scope which directly reflects challenges and issues faced by industry, and a new chair in Mike O’Hare, who has worked for National Grid, E.ON, London Array and SSE, the conference is more relevant than ever to those working in and researching for the expanding renewables sector. conferences.theiet.org/rpg-europe/index. cfm?origin=evvnt
Clean Energy Live 2016!
4–6 October 2016 NEC Birmingham, UK This year Solar Energy UK evolves into a broader exhibition – Clean Energy Live, opening up new market segments and
www.bpva.org.uk
bringing whole building energy solutions and centralised to distributed energy to the mainstream. Solar and energy professionals will discover the latest about how solar, energy storage, energy management and renewable heat can connect, delivering cost effective, low carbon solutions for the commercial and residential sector.
cleanenergylive.co.uk/
11th ISES EuroSun Conference 2016
11–14 October Hotel Palas Atenea Palma, Mallorca ISES, AEDES and the University of the Balearic Islands are pleased to announce the 2016 edition of EuroSun, the ISES European solar energy congress. Thermal demands on buildings and industrial processes account for one of the largest energy consumptions worldwide. As the energy supply chain shifts to a more sustainable model, a number of issues arise. Solar energy, in any of its forms, is expected to play a key role in the future supply of such demands. EuroSun 2016 will be a unique platform to discuss the latest developments with leading solar energy specialists as well as policy makers and industry representatives. The congress will host topic sessions, keynote speakers, plenary sessions and open discussion forums, as well as social events where you will have the opportunity to network, to meet old friends and to make new contacts. eurosun2016.org/
Energy 2016
18–20 October NEC Birmingham, UK Energy 2016, part of Construction Week 2016, is the industry trade event dedicated to renewables, innovation and power solutions. Uniting all the key business players in the industry such as architects, project/energy managers, engineers and developers, this event provides the perfect platform to unite the energy sector and the wider interconnected industries. Due to the success of last year’s show and increased demand, Energy 2016 has doubled in size spanning across two halls of the NEC (Hall 2 and Hall 3) which will
also accommodate the UKCW VIP Lounge in hall 3. ukconstructionweek.com/energy-show
Intersolar India
19–21 October Bombay Exhibition Centre Mumbai, India Intersolar India is the country’s largest annual exhibition and conference for the solar industry. The event’s exhibition and conference both focus on the areas of photovoltaics, PV production technologies, energy storage systems and solar thermal technologies. In 2014, 160 international exhibitors and around 9000 visitors attended Intersolar India. Over 85 distinguished speakers and 500 attendees discussed current industry topics and shed light on the conditions surrounding technological, market and political developments at the accompanying conference. intersolar.in/en/home.html
RENEXPO Poland
19–21 October Warsaw Centre Expo XXI Warsaw, Poland RENEXPO (Renewable ENergy EXPOsition) Poland is Poland’s largest event on renewable energy. The conferences and forums of RENEXPO Poland have become an important meeting place to gather information about current market developments and trends. renexpo-warsaw.com/index. php?id=7&amp;L=1
Solar Asset Management Europe 2016
9–10 November 2016 Sheraton Milan Malpensa Conference Centre Milan, Italy Solar Asset Management Europe is the continent’s leading conference dedicated to optimization of the operational phase of PV plants and portfolios. Solar Asset Management Europe brings together the leading investors, owners and service providers in the European PV industry. As well as providing a networking opportunity, the event is the best way to learn about innovations and best practices for optimizing performance, management and financial returns of PV assets. solarassetmanagementeu.com
June 2016 | network 47
FAST FORWARD >>>
Fully charged and ready to go Delta Electronics has developed a fast-charging station that won’t be left in the dust when the next generation of e-cars arrive
E
More power, more range
Several EV brands have announced the development of vehicles with significantly larger battery capacity, coming to the market within the next few years. Hyundai’s Ioniq EV model, due for launch later this year, will have a 70kW output. In the next couple of years, Tesla’s first long range electric cars with ranges of 400km or more, will start to roll off the production belt. The Tesla Fighter and other more powerful EVs in the works, will have a charge power of 150kW. In comparison, a 50kW charger will become a ‘slow charger’ compared with Delta’s ultra-fast charger. For instance, a car with a 100km driving range with a 68kW charging capacity can be charged within 13 minutes – 35% faster
48 network | June 2016
PHOTO: DELTA
lectric vehicles (EVs) are improving in performance at a formidable rate. New ultra-fast charging equipment from Taiwan’s Delta Electronics has been designed to meet the charging performance of today’s electric cars and plug-in hybrids, but also future models with longer driving ranges. The new ultra-fast charger, which is being commercialized in Europe, initially in Norway, also charges up to four cars at the same time. As it complies with the main global standards, including combined charging system (CCS) 200A, Japan’s CHAdeMO-125A, as well as plug Type2-63A and socket Type232A, the ultra-fast charger supports the quick charge standards of virtually all European, Asian and North American EV manufacturers. Delta’s ultra-fast charger comprises two charge points for direct current (DC) quick charging up to 150kW and two charge points for alternating current (AC) charging up to 65kW. Typical low power AC charging of EVs is fine for when electric cars are parked up at home overnight or for several hours at the office. Longer driving distances, however, need a system that allows all EV models to recharge rapidly compared with today’s standard chargers, which tend to be limited to an output of up to 50kW. compared with a 50kW charger. The ultra-fast charger is equipped with a dynamic power split function to avoid overinvestment in infrastructure needed to power upcoming EVs with large batteries and higher charging power capacity, up to 150kW. Delta has also focused on making the ultrafast charger user-friendly for consumers “refuelling” their electric cars. The charge cable is simply plugged into the car. Authentication is simple and the charge starts automatically – there is no need to select the charge gun and no buttons to start the charge. Prototyping and industrial production of the ultra-fast charger have been completed. The charging stations can also be integrated with solar PV modules.
Four charging guns are included in Delta’s latest EV charging platform
www.bpva.org.uk
FREE ENERGY day and night with the TiBox
Connect a TiBox to your solar array and you can store the energy your PV panels generate during the day to power your home whenever you like – even if that’s first thing in the morning or last thing at night. With a lifespan of up to 20 years, the TiBox home energy storage system is the smart way to free yourself from the big energy suppliers and take control of the cost of your electricity for decades to come. Whether you are installing a new solar PV system, or you are thinking about adding an energy storage system to your existing solar panels, get in touch to find out how we can help.
● Longest lifetime for Lithium batteries on the market today ● Charges and discharges in 1 hour ● Supports multiple cycles per day ● Safest chemistry available ● Swiss engineering coupled with German manufacturing
Email home.storage@leclanche.com or visit us at www.leclanche.com
#LeclancheHomeStorage
THE SOLAR EXPERTS
At Lightsource we are passionate about the way electricity is delivered in the next century though cleaner, more affordable distributed generation. As part of our contribution to this revolution, we have developed, constructed and funded more than 1.3 Gigawatts of distributed solar energy projects, investing over ÂŁ2.0 Billion in the process. Our projects provide clean electricity to homeowners, businesses, schools and national infrastructure from domestic scale up to multi-megawatt installations. As Europeâ&#x20AC;&#x2122;s leading solar energy company, we offer our customers integrated development, from financing through to asset management and maintenance services with an in-house team of over 350 experts. Drawing on decades of experience in the industry, we have developed the highest engineering standards in the construction and operation of solar power projects. Our track record has given us a global reputation for excellence that is second to none.
To find out more, visit www.lightsource-re.co.uk or give us a call on 0333 200 0755