EQ Magazine June 2018 edition by EQ Int'l Solar Media Group

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June 2018

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June 2018

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I N T E R N AT I O N A L

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CONT EN T

VOLUME 10 Issue # 6

ELECTRIC VEHICLE

The global electric-vehicle market is amped up and on the rise

TECHNOLOGY

Right Technologies For Floating Projects

BUSINESS & FINANCE

SkyPower and the Government of the Republic of Uzbekistan ...

BUSINESS & FINANCE

Risen Energy deepens expansion outside of China by

Disclaimer,Limitations of Liability While every efforts has been made to ensure the high quality and accuracy of EQ international and all our authors research articles with the greatest of care and attention ,we make no warranty concerning its content,and the magazine is provided on an>> as is <<basis.EQ international contains advertising and third –party contents.EQ International is not liable for any third- party content or error,omission or inaccuracy in any advertising material ,nor is it responsible for the availability of external web sites or their contents The data and information presented in this magazine is provided for informational purpose only.neither EQ INTERNATINAL ,Its affiliates,Information providers nor content providers shall have any liability for investment decisions based up on or the results obtained from the information provided. Nothing contained in this magazine should be construed as a recommendation to buy or sale any securities. The facts and opinions stated in this magazine do not constitute an offer on the part of EQ International for the sale or purchase of any securities, nor any such offer intended or implied Restriction on use The material in this magazine is protected by international copyright and trademark laws. You may not modify,copy,reproduce,republish,post,transmit, or distribute any part of the magazine in any way.you may only use material for your personall,Non-Commercial use, provided you keep intact all copyright and other proprietary notices.If you want to use material for any non-personel,non commercial purpose,you need written permission from EQ International.

June 2018

12 INDIA

Relief for solar producers as government reneges on import duty

07 INDIA Azure Power Surpasses 1 GW of Operating Solar Capacity

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54 RENEWABLE ENERGY

From black gold to green power

TECHNOLOGY

Solar UAV to be developed with the potential to stay airborne...

INVERTER

Why Mega Solar Projects Are Turning to String Inverters

20 PV MANUFACTURING

WTO sets up panel to resolve India-US renewables case...

RENEWABLE ENERGY

‘Renewable industry created 500,000 plus jobs in 2017 globally’

INTERVIEW

with Dr.P.V.Ramesh CMD. Rural Electrification Corporation

22 PV MANUFACTURING

Meyer Burger divests its Solar Systems business to Patrick...

74 RENEWABLE ENERGY

SoftBank’s mega investment plan may not soften up government

INDIA

ROOFTOP & OFFGRID

Arunachal CM launches 1 MWp solar power plant

BSES installs first grid-connected rooftop solar plant

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EQ NEWS Pg. 07-39

June 2018

JA SOLAR was founded in 2005 and listed on the US NASDAQ Exchange in 2007. Its impressive supply chain includes photovoltaic products that design, manufacture and sell to over 100 countries and regions. Products range from silicon wafers, cells and modules to complete photovoltaic (PV) power systems. On the strength of its continued technological innovations, solid financials, global sales and customer service networks, JA SOLAR has received worldwide recognition from authoritative agencies, as a leading global manufacturer of highperformance PV products.

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india

Azure Power Surpasses 1 GW of Operating Solar Capacity Azure Power (NYSE: AZRE), one of India’s leading independent solar power producers, announced that its portfolio has surpassed 1 GW of operating solar capacity, making it one of the largest solar power companies in the country.

his milestone was achieved with the company’s recent commissioning of a 50 MW project in Andhra Pradesh. The project has been setup in Ananthapuramu Solar Park across approximately 250 acres. Azure Power will supply power for 25 years to Solar Energy Corporation of India (SECI), a Government of India enterprise and a company with a AA+ domestic debt rating by ICRA, a Moody’s company. The levelized tariff is INR 4.79 (~US 7.5 cents) per kWh, which includes Viability Gap Funding (VGF).

Founded by Inderpreet Wadhwa in 2008, Azure Power started its journey by developing a 2 MW plant in Awan, Punjab and since then has witnessed tremendous growth, increasing its installed capacity to over 1 GW over the last ten years. The company has a footprint across 23 states in India and has built a strong solar power portfolio with ~80% of its operating or committed projects with counterparties that have domestic debt ratings that are A or higher.

“IFC has been an investor in Azure Power since 2010, supporting the company’s growth at different stages. Our continued and sustained investments in Azure Power has helped provide access to clean and affordable energy to millions of people.” said Hyun-Chan Cho, Head, Asia, Infrastructure and Natural Resources, IFC “We are very proud and privileged to be a part of this ten-year journey. I would like to congratulate the company on reaching this landmark and look forward to a stronger partnership.”

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Inderpreet Wadhwa, Founder, Chairman and Chief Executive Officer, Azure Power “We started with the vision of providing affordable solar power for generations and the mission to be the lowest cost power producer in the world. Through our collective efforts and support from our stakeholders, we have achieved this important milestone of 1,000 MWs operating through large-scale, mini/micro grid and rooftop solutions across the entire country. We are delighted to make this contribution towards the realization of our Hon’ble Prime Minister’s commitment of clean and green energy, through solar power generation.”

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Since inception, Azure Power has been at the forefront of the solar sector in India. The company installed India’s first private utility scale solar project in Punjab, implemented India’s first megawatt scale solar rooftop project in Gujarat, was the first solar power producer to set up a private utility scale solar plant in the states of Uttar Pradesh and Chhattisgarh and was also the first private solar producer in the country to supply solar power to border outposts. The company has established itself as a leader in the Indian solar rooftop market. The company’s rooftop journey started in 2013, with a 2.5 MW plant in Gandhinagar, Gujarat and has since grown its rooftop portfolio under Azure Roof Power to over 190 MWs across 23 states making the company’s rooftop portfolio one of the largest in the country.

Last year, Azure M-Power, which focuses on mini and micro grids, electrified 320 households across 11 villages in the eastern state of Jharkhand. Azure M-Power plans to expand access to electricity to millions of Indians currently without power enabling sustainable economic development, inclusive growth and resilience against climate change. The company has also achieved many financing landmarks. In 2016, it launched an initial public offering on the New York Stock Exchange, creating the first listing of Indian energy assets in the United States. The following year, it issued India’s maiden solar Green Bond. Azure Power is backed by several marquee institutional investors such as one of the largest pension funds in Canada, Caisse de dépôt et placement du Québec (CDPQ), International Finance Corporation (IFC) which is an investment division of the World Bank, venture capital funds HelionVenture Partners and Foundation Capital, and development finance institutions such as Société de Promotion et de Participation pour la Coopération Économique (PROPARCO) and Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) and Netherlands Development Finance Company (FMO).

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Michael Sabia, President and Chief Executive Officer, CDPQ said “Our investment in Azure Power, a leader in its field, has allowed us to build our presence in the solar power sector in India, a priority market for us. We are excited to be a part of their growth story and are pleased to contribute, as an investor, to a global low-carbon economy.”

June 2018

india

Spot power prices to be around Rs 4/unit in May, June: Experts Spot power prices in the country are unlikely to surge in the next two months and hover around Rs 4 per unit in view of availability renewables, mainly wind energy, experts say.

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here were fears that the persistent shortage of coal at thermal power plants in the country may jack up spot power prices in the near term with the onset of summer. “The spot power prices in the country would be around Rs 4 per unit in the next two month due to availability of wind energy due to progression of monsoon,” a market expert told PTI. The average spot power price at the Indian Energy Exchange was Rs 4.01 per unit till April 27, 2018. It was Rs 4.01 in March as well, but was higher than Rs 3.22 in February this year. The average price was around Rs 2.5 per unit in February and March 2017. But it was slightly up at Rs 2.7 in April last year.

“Last year the peak power demand was around 159 GW, which at maximum level, can increase up to 165 GW this year in May and June. But that could be compensated over 34 GW installed wind power capacity,” the expert.

Wind energy generation achieves optimum levels in May and June due to the weather system. Besides, there would be optimum solar energy generation in May and June, he said. Solar energy capacity has already crossed the 22 GW mark. That would also also generate around 5GW at 20 per cent efficiency. The rainy season from July onwards when mining of the dry fuel is affected. According to Central Electricity Authority (CEA) data, as many as 27 thermal power plants out of the monitored 114 are facing coal shortage. The CEA data for April 25, 2018 shows that 17 non-pit head power plants have super critical coal stocks which would not last more than 4 days. Besides, there are 10 such plants which have critical coal stocks which would not last for more than 7 days. Coal shortage at thermal power plant has been affecting thermal power generation in the country. According to Power Ministry data, the average plant load factor (PFL) or capacity utilisation at thermal power plants of independent power producers was 55.32 per cent in 2017-18, lower than 55.73 in 2016-17 and 60.49 per cent in 2015-16. However, the PLF of state power generation utilties improved slightly to 56.83 per cent last fiscal from 54.35 in 2016-17 and 55.41 in 2015-16. During 2017-18, the peak power deficit was 2 per cent after meeting 160 GW requirement against demand of 164 GW.

Source: PTI

June 2018

9th India-Japan Energy Dialogue held in New Delhi; both countries agree to work together for energy security, energy access and climate change issues Both countries agree to initiate the discussion on Electric Vehicles (EVs) and commit to work together in promoting well-functioning energy markets he 9th India Japan Energy Dialogue was held in New Delhi, . Minister of State(IC) for Power and New &Renewable Energy, Shri R.K Singh, and Minister of Economy, Trade and Industry (METI) Mr. Hiroshige Sekosigned a Joint Statement at the conclusion of the meeting. Both Japan and India, as the third and the seventh largest economies respectively, recognized that having access to reliable, clean and economical energy is critical for their economic growth and in achieving this, both Ministers agreed on further strengthening of bilateral energy cooperation for energy development of both countries, while also contributing to worldwide energy security, energy access and climate change issues. Both India and Japan with a view to implement ationally Determined Contributions (NDCs) under the aegis of the United Nations Framework Convention on Climate Change (UNFCCC) recognized the importance of development and deployment of next generation technologies including hydrogen to realize de-carbonization. Both India and Japan appreciated the relevance of the grid stability given the high penetration of variable renewable energy. Both countries agreed to initiate the discussion towards development of Electric Vehicles (EVs) by collaborating with “Policy dialogue on next generation/Zero emission vehicles”. Both India and Japan reiterated the continued importance of coal-based electricity generation in the energy mix in both the countries and also agreed to promote the cooperation on environmental measures for coal-fired power plants. Both India and Japan further confirmed their commitment to work together in promoting wellfunctioning energy markets and affirmed to promote transparent and diversified Liquefied Natural Gas (LNG) market through the relaxation of destination clause.

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June 2018

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india

TSRTC inks MoU with TSREDCO for Green engery The Telangana State Road Transport Corporation (TSRTC) has entered into an MoU with Telangana State Renewable Energy Development Corporation Ltd.(TSREDCO) here on Friday for installation of solar PV plant.

orporation has already initiated The LED project under the CSR scheme of HUDCO and all the 29 Depots of the Hyderabad City and Bus Bhavan have been fixed with Led fixtures. The savings of electricity due to these LED fixtures is approximately Rs.30.00 lakh per annum and it is further proposed to replace all the old electrical fixtures with the LED fixtures throughout the state. Since the project requires sizeable budget we are exploring ways to implement it fully, the Corporation, besides replacing with LED fixtures, has decided to harness the Solar Energy keeping in view of the available infrastructure facilities and an MoU signed with the TSREDO to take up the Solar PV plant. The total roof area of the building is approximately 7.00 lakh Sq.ft. Under the agreement, TSREDCO will complete the project in 6 months from the date of handing over the site. TSREDCO have called EOI and finalised the agencies to supply, install , commission and maintain the Solar PV plants for a period of 25 years under the RESCO(Renewable Energy Service Company) mode. Earlier, joint inspection of sites were conducted by TSRTC and TSREDCO. It is estimated that the total capacity of 5MW of Solar Power can be harnessed, through the available Roof Top area. The 5MW Solar Plant will generate around 65,60,000 Kwh to 74,25,000 Kwh per annum. In order to have an encouraging response from the Solar Power Supplying agencies the entire state has been divided into 5 packages with a mix of both Urban and Rural areas. The Corporation will be the first Organisation in the country to take such a giant leap in harnessing the Solar Power which would enable fulfilling the partial load requirements. TSRTS is catering to the travelling needs of the common man amd transports daily 89.43 Lakh passengers covering 33.36 lakh Kms/day with employee strength of 56,425. It has a fleet strength of 10,377 buses. The Infrastructure of TSRTC is huge and consists of Bus Bhavan, 97 Bus Depots, 3576 Bus Stations, 3 Workshops, 2 Training Centres and a Hospital at Tarnaka. Source: UNI

June 2018

Setting Up & Operation of Solar Power Plant is in nature of ‘Works contract’, 18% GST applicable: AAR [Read Order The Authority for Advance Ruling ( AAR ) Maharashtra ruled that in the case of separate contracts for supply of goods and services for solar power plant, there would be a cumulative consideration as ‘works contract’ and hence the rate of tax would be 18% under IGST and an aggregate of 18% of CGST and SGST.

pplicant M/s Fermi Solar Farms Ltd. is engaged in the operation of renewable energy power plant projects. These typically include operation of soar power plants set up across India for generation and distribution of electricity generated through solar plants. The Applicant approached the authority seeking clarification on the following questions: Whether in case of separate contracts for supply of goods and services for a solar power plant, there would be separate taxability of goods as ‘solar power generating system’ at 5% and the services at 18% ? Whether parts supplied on standalone basis (when supplied without PV modules) would also be eligible to concessional rate of 5% as parts of solar power generating system ? Whether benefit of concessional rate of 5% of solar power generation system and parts thereof would also be available to sub-contractors ? Though the authority couldn’t provide clarity to the other two questions owing to absence of any documents, the first question was clarified in the aforementioned manner. The authority further stressed that depending upon the nature of supply, intra-state or inter-state, the rate of tax would be governed by the governed by the entry under Integrated Goods and Service Act, 2017 Source : taxscan

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india

Power Grid sets Capex Target of 25,000 Crore for 2018-19 Power Grid Corporation of India Limited (POWERGRID) has signed Memorandum of Understanding for the year 2018-19 with Ministry of Power, Government of India.

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oU was signed by Shri Ajay Kumar Bhalla, Secretary, Ministry of Power, Government of India and Shri I.S. Jha, CMD, POWERGRID in the presence of senior officials from Ministry and POWERGRID. The MoU includes various targets to be achieved by POWERGRID during FY 201819. Capex target for the year has been set as Rs. 25,000 crore. Other targets in the MoU inter-alia include parameters related to human resources, project management, R&D and innovation and other efficiency and operational performance parameters. POWERGRID, a Navratna CPSE and the Central Transmission Utility (CTU) of the country, has been consistently receiving highest rating i.e. “Excellent” under since signing of the first MoU in 1993-94. As on March 31, 2018, the company owns & operates over 148,800 ckt. km. of transmission lines, 236 EHV sub-stations with transformation capacity of more than 322,000 MVA. Availability of this gigantic transmission network has been consistently maintained over 99.5%.

June 2018

india

Indias clean energy capacity touches 70 GW: MNRE

Relief for solar producers as government reneges on import duty India has scrapped a duty on solar modules, making it easier to import the products after a sudden change in customs policy last year led to a logjam of shipments at Indian ports.

Ministry of New and Renewable Energy said Indias installed clean energy capacity has already touched 70 GW and 38 GW is under implementation as per the data compiled till March 31.

he 70 GW installed renewable energy capacity in the country is double of the capacity four year back, a Ministry of New and Renewable Energy statement said. The MNRE also said that around 56,000 solar power pumps were installed in the last financial year, which is highest ever in a single year.

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Commenting on the achievement of renewable energy in the country, Power and New & Renewable Energy Minister R K Singh said, “India is progressing fast in the areas of renewable energy and government is committed to meeting target of having 175 GW by 2022”.

The ministry said that renewable energy capacity of 11,788 MW is added during last fiscal, which is the highest ever in a single year. The ministry claimed that it has bid out 32,500 MW capacities in last fiscal, which is nearly 10 times capacity commissioned in 2013-14. The ministry also boasted about discovering lowest wind and solar power tariff of Rs 2.43 and Rs 2.44 per unit, respectively, in the last fiscal through tariff based competitive bidding. It also said that India generated 100 billion units of electricity through renewables last fiscal, which is highest ever so far. Source : PTI

June 2018

“Looks like it will take a month before we get our money (bank guarantees) back, but we are happy that the issue has been resolved,” Enerparc’s Managing Director Santosh Khatelsal said.

everal consignments of solar modules, worth more than $150 million in total, were held up for more than three months at ports after Indian customs’ officials in August demanded that some of them be classified as “electric motors and generators”, carrying a 7.5 percent import duty. Previously they were subject to no duty. The finance ministry reversed the policy last month, stating in a notice seen by Reuters that most solar modules should revert to their original classification and that no tax should be levied on them. Indian component makers have struggled to compete with Chinese companies such as Trina Solar and Yingli and have sought anti-dumping duties as well as long-term safeguards. But the logjam of shipments at ports posed a headache for solar power producers and threatened to delay Prime Minister Narendra Modi’s plan of nearly tripling the country’s

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total renewable energy capacity to 175 gigawatt (GW) by 2022. The plan has spurred foreign investment in the sector, with Japan’s SoftBank and Goldman Sachs among others investing in solar projects in India.Any duty is bad news for solar power producers such as SoftBank-backed SB Energy but good for local solar component makers such as Indosolar and Moser Baer. The change in policy last August led to logjams as it was not immediately clear which modules belonged to the new classification. To ease the situation customs officials agreed to release shipments if importers paid a bank guarantee to cover any duty they may be required to pay. An executive at the Indian unit of Germany’s Enerparc, which had 30 of its containers stuck at the port of Chennai, said there was still some uncertainty about the process even though the duty had been scrapped. Source: in.reuters

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June 2018

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India’s largest solar park in Dholera gets Union govt approval

Arunachal CM launches 1 MWp solar power plant Arunachal Pradesh Chief Minister Pema Khandu launched the 1 MWp Solar Power Plant the biggest solar project installed in the State so far at the Energy Awareness Park near Indira Gandhi Park.

he project ‘Installation of 1 MWp Grid Connected Solar Photovoltaic Power Plant’ was constructed at an estimated cost of Rs 8.50 crore with the Arunachal Pradesh Energy Development Agency (APEDA) being the implementing agency. It was funded under the ‘incentive grant’ under 13th Finance Commission, Government of India.

In his inaugural speech, the Chief Minister Pem Khandu appreciated the efforts of APEDA in making use of solar power to generate energy and in feeding power to the grid, which will cut down energy costs. as the world grapples with global warming, the use of renewable sources of energy is the best way to prevent it and emphasized on activities, which are environment friendly.

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Citing the PM Narendra Modi’s initiative to provide power to all under Pradhan Mantri Sahaj Bijli Har Ghar Yojana ‘Saubhagya’, Khandu said that under the leadership of PM Modi, the country is looking towards green energy and slowly phasing out use of nonrenewable sources of energy. Earlier, giving a brief on the project, APEDA director Er Marki Loya said the biggest solar project so far installed in Arunachal Pradesh is feeding the power generation into 11 KV grid network of department of power. Depending on weather condition and solar radiation, the generation starts at 0530 hrs in the morning till 1800 hrs in the evening. He further informed that the import of energy from outside the state is reduced to the extent following its generation thereby reducing the energy bill payable by the state. Being located in the load centre, it will also contribute in reduction of line losses. It will also help in meeting the solar RPO (Renewable Energy Purchase Obligation) to some extent. The plant is totally automatic and unmanned one. It automatically switches on getting sunshine and grid is available and switches off when either sunshine or grid supply or both are not available. Among others, power & industries minister Tamiyo Taga, APEDA chairman Wanglam Sawin, commissioner, power & NRE Kaling Tayeng and senior govt officers were also present on the occasion. Source: UNI

June 2018

The largest solar park in the country which is coming up at the Dholera Special Investment Region (DSIR), located some 110 km from Ahmedabad, has received its final set of approvals from the Union Ministry of New and Renewable Energy. This was confirmed by the Dholera Industrial City Development Corporation Ltd. (DICC).

he ambitious 5,000 mega watt solar park project was recently announced by Chief Minister Vijay Rupani, earlier this month. “We received approval from the Union Ministry of New and Renewable Energy for the solar park. With this, the tender for the first phase of the solar park will be out in June itself. For the next phase, it will be undertaken in subsequent months,” said Jai Prakash Shivhare, managing director, DICC. Earlier this month, the state government gave its in-principal approval to the project, some 11,000 hectares of land along the Gulf of Khambhat. In fact, the government has projected that the park will attract an investment of Rs 25,000 crore and generate employment for close to 20,000 people. Source: timesofindia.indiatimes

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india

MNRE issues National Wind-solar Hybrid Policy The Policy provides framework for promotion of large grid connected wind-solar PV hybrid system A scheme for new hybrid projects under the policy is also expected shortly.

inistry of New and Renewable Energy has issued National WindSolar Hybrid Policy The objective of the policy is to provide a framework for promotion of large grid connected windsolar PV hybrid system for efficient utilization of transmission infrastructure and land. It also aims at reducing the variability in renewable power generation and achieving better grid stability.

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On technology front the Policy provides for integration of both the energy sources i.e. wind and solar at AC as well as DC level. The Policy also provides for flexibility in share of wind and solar components in hybrid project, subject to the condition that, rated power capacity of one resource be at least 25 per cent of the rated power capacity of other resource for it to be recognised hybrid project.

The Policy seeks to promote new hybrid projects as well as hybridisation of existing wind/solar projects. The existing wind/solar projects can be hybridised with higher transmission capacity than the sanctioned one, subject to availability of margin in the existing transmission capacity. The Policy provides for procurement of power from a hybrid project on tariff based transparent bidding process for which Government entities may invite bids. Policy also permits use of battery storage in the hybrid project for optimising the output and further reduce the variability. It mandates the regulatory authorities to formulate necessary standards and regulations for wind-solar hybrid systems. With significant capacity additions in renewables in recent years and with Hybrid Policy aiming at better utilisation of resources, it is envisaged that the Hybrid Policy will open-up a new area for availability of renewable power at competitive prices along with reduced variability. A scheme for new hybrid projects under the policy is also expected shortly.

June 2018

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india

ACME GROUP STRENGHTNEN ITS SOLAR PORTOFOLIO BY WINNING 250 MW SOLAR POWER CAPACITY IN 1000 MW SOLAR TENDER WTO sets up panel to resolve India-US renewables case; hearing soon

ACME won 250 MW Solar PV capacity in the reverse auction held on 14.05.2018 invited by Maharashtra State Electricity Distribution Co Ltd (MSEDCL). Total capacity allotted under the reverse auction was 1000 MW.

The World Trade Organisation (WTO) has set up a panel to resolve the dispute raised by India against the US with regard to the policies of eight American states in the renewable energy sector.

ndia had alleged that the domestic content requirement norms imposed by these eight US states are inconsistent with global trade rules. As both the countries failed to resolve the issue in the bilateral consultation process, India had sought formation of dispute resolution panel. “The dispute settlement body of WTO has agreed to establish a panel. It will soon start the hearing, a government official said. On September 9, 2016, India had requested consultation with the US under the dispute settlement system of WTO regarding alleged domestic content requirements and subsidies provided by these states in the renewable energy sector. Under the norms of domestic content requirements, it is mandatory upon domestic companies to source a portion of input from local markets products. India had alleged that the measures of those American states are inconsistent with WTOs Agreement on Trade-Related Investment Measures and the Agreement on Subsidies and Countervailing Measures. They are inconsistent because they provide less favourable treatment to imported products vis-a-vis domestic products, and because the subsidies are contingent on the use of domestic over imported goods, India had stated in its application to WTO. The eight states are Washington, California, Montana, Massachusetts, Connecticut, Michigan, Delaware and Minnesota. The request for consultation is the first step under the Dispute Settlement System of WTO. Consultations give the parties an opportunity to discuss the matter and find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations fail to resolve the dispute, the complainant may request adjudication by a panel. Issues are cropping up in renewable energy area as the sector holds huge investment potential for businesses. With India focusing on this segment, companies in developed countries want to tap this market. Source: PTI

June 2018

SEDCL invited 1000 MW solar tender under Built Own and Operate model wherein successful developer can set up solar project anywhere in India and supply power to MSEDCL under 25 year PPA. This selection process concluded at a very competitive tariff wherein ACME was allotted largest capacity i.e. 250 MW at a tariff of INR 2.72/kWh out of total tender capacity of 1000 MW. As per the tender, the project has to be commissioned within 15 months from PPA signing and would entail investment to the tune of approx. 250 Million USD.

A continuous effort to innovate and offer most competitive solar tariff to people said Shri Manoj Kumar Upadhyay, Founder and Chairman of ACME Group. ACME Solar is an independent power producer, which builds, owns and operates solar power plants in India. It has an operating capacity of over 1500 MW solar projects in India. With this won capacity, ACME’s total portfolio will increase to 2300 MW. With strong in-house execution and design team, ACME plans to execute this project in self-execution mode.

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June 2018

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india

Rays Power Infra completes 3 large EPC Solar PV projects in Karnataka is less than 100 days Projects in Jhamkhani, Bijapur, and Kustagi were developed under Karnataka’s open access scheme by leading solar power EPC

ays Power Infra, one of India’s leading and most technically adept solar power EPCs, announced the commissioning of 3 large EPC solar PV projects in Karnataka, under the state’s open access scheme. The projects in Jhamkhandi (40 MW), Bijapur (45 MW), and Kustagi (45 MW) were built with the best in class design and equipment, and took less than a 100 days from land acquisition to commissioning. The breathtaking speed of the development of the projects, as well as the cutting-edge design and stateof-the-art equipment reflects upon the technical skill of the company. Managing to build these 3 projects simultaneously in this short period of time will allow the businesses operating in the area to access costeffective and eco-friendly energy. The open access model implemented in Karnataka enables access to power at considerably lower rates, offering better efficiencies and lower utility bills while reducing the carbon footprint of industries in the areas being serviced by projects built in the state. These projects will be a cost-effective source of energy for the businesses and MNCs in the region, enabling greater economic growth and prosperity in these three areas.

Commenting on this achievement, Ketan Mehta, CEO, Rays Power Infra Pvt. Ltd., said, “Built with the best available technology in less than a 100 days, these projects reflect upon our company’s capacity to commission state-of-theart solar power plants at 3 separate locations simultaneously. This sets a new benchmark for quality and efficiency, and showcases the depth of our engineering skill and capacity. We are extremely grateful to the support we have received from all stakeholders, particularly the state government with its open access policy, and our private partners who have provided extensive support.”

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Rays Power Infra aims to continue in its endeavour to provide its extensive project experience and industry-leading technical expertise to become one of the top players in India through its innovative, ecofriendly, and cost-effective solar power technology solutions.

ROOFTOP & OFFGRID

BSES installs first grid-connected rooftop solar plant Delhi electricity distribution company (discom) BSES-Rajdhani on Friday announced it has installed the first grid-connected 100KW solar rooftop plant in a residential housing society in Dwarka locality of the city as part of its Solar City Initiative to “solarise” the area.

hiv Bhole Cooperative Group Housing Society (CGHS) in Dwarka has become the first such housing society to install a 100KW grid-connected rooftop solar plant, a BSES release said. “Each of the 60 flats will save around Rs 4,500 annually in their electricity bills, while the solar plants will be able to offset around 32 per cent of a resident’s annual carbon emission,” it said. “The plant has been installed by Green Ripples Pvt Ltd following RESCO business model that entails providing electricity at a cost identified through competitive bidding, which in this case is Rs 2.66 per kWh (kilowatt hour) net of generation-based incentive, and is around 2.40/kWh less than the tariff of BSES Rajdhani Power Ltd (BRPL).” Solarise Dwarka initiative, launched in January, is being implemented by BRPL in collaboration with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ India) under its Indo-German Solar Partnership project, it added.

June 2018

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Commenting on the development, German Ministry of Economic Cooperation and Development’s South Asia Division Head Wolfram Klein, who inaugurated the plant, said: “It is quite encouraging to see people participating in the energy transition in India; that is the only way to have a sustainable energy transformation, similar to what we saw in Germany.” BRPL Chief Executive Amal Sinha said: “We would like to achieve at least 2.5 MW of solar installation within Dwarka, and are convinced of the increased role solar and other green energy would play going forward.”

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PV MANUFACTURING

Egypt signs MOU with China’s GCL for $2 billion solar panel factory China’s GCL Group has signed a memorandum of understanding (MOU) with Egypt’s ministry of military production to build a solar panel facility at a cost of up to $2 billion, state-run newspaper AlAhram reported

nder the MOU, which was signed on Wednesday, the facility will manufacture panels capable of producing 5 gigawatts (GW) annually, it said, without mentioning the location or timeframe of the project. Egypt in 2014 announced extensive plans to develop renewable energy targeting 4.3 GW of wind and solar projects to be installed over three years, but many investors pulled out following contract disputes Egypt aims to meet 20 percent of its energy needs from renewable sources by 2022. President Abdel Fattah al-Sisi, a former general who took office in 2014, has promised to revive the economy,

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which has struggled since a 2011 uprising scared away investors and tourists, Egypt’s main sources of foreign currency. He has called in the military to assist in major infrastructure projects and with distribution of subsidized commodities to help curb price rises. The economic weight of the military, which produces everything from bottled water to macaroni, has long been a topic of speculation in Egypt but official comment on its economic activities is rare. Sisi said in March that the military’s economic activities were equivalent to 2-3 percent of GDP, well below the more than 50 percent that some have claimed.

June 2018

RESEARCH & ANALYSIS

JinkoSolar maintained its position as top solar PV module shipment provider in 2017, says GlobalData JinkoSolar Holding was the leading company for global solar photovoltaic (PV) module shipments in 2017. The company had shipments of 9.7 gigawatts (GW) of PV modules compared to Trina Solar’s 9.1 GW, keeping its rival in second place, according to GlobalData, a leading data and analytics company.

lobal solar PV module market was valued at $36.71bn in 2017 and is estimated to reach $26.4bn, in 2021, registering a negative compound annual growth rate (CAGR) of 8% between 2017 and 2021. The fall in the market value was mainly due to the fall in module prices. JinkoSolar reported spectacular results in 2017, with the company reaching the milestone of receiving the first Cradleto-Cradle (C2C) certificate in China from SGS, one of the world’s leading testing, inspection, verification, and certification organizations. This certification highlights JinkoSolar’s commitment to high environmental, health, and safety standards.

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Ankit Mathur, Practice Head of Power at GlobalData, comments: “JinkoSolar has broken a number of world records for its silicon solar cell and module technology, displaying its technological prowess. The company has maintained its top position in terms of solar PV research and development through its advanced manufacturing process, higher mass production speeds, and enhanced quality control compared to its counterparts.”

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Trina Solar is also in a strong position in the areas of product quality and reliability, performance, innovation, as well as robust financial management. The company has achieved a number of breakthroughs with its innovative research and development, and its large-area interdigitated back contact silicon solar cell hit a record efficiency of 24.13% in May 2017. Regarding the other companies which made the top rankings, Canadian Solar Inc. and JA Solar Holdings Co., Ltd occupied third and fourth place, with shipments of 6.9 GW and 6.7 GW, respectively. Hanwha Q Cells Co., Ltd. came fifth with 5.6 GW, GCL System Integration Technology Co., Ltd. was sixth with 4.6 GW, Lerri Solar Technology Co. Ltd stood in seventh place with 4.4 GW, and Yingli lay in eighth spot with 2.9 GW. Mathur adds: “Lerri Solar Technology Co. Ltd., a subsidiary of LONGi Green Energy Technology, gained substantial ground by entering into the top solar manufacturer ranking in 2017. The company is planning to raise its stakes in the growing market through rapid expansion in domestic and overseas manufacturing facilities. Recently the company announced its plan to increase its production base with a set up 1GW Mono Cell and 1GW Mono Module Manufacturing Facility in India. “Risen Energy has entered the 2017 top 10 listing of the solar module manufacturers after gaining competitive edge in technology, automation and cost control in the photovoltaic sector. From the past few years the company has been company expanding its presence in markets such as Italy, Germany, Romania and India.” Source: globaldata

June 2018

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June 2018

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BUSINESS & FINANCE

GIP Is Said to Consider Raising Its Dubai’s Relam Investment Largest Infrastructure Fund to invest $300 mn in India Global Infrastructure Partners, an owner of London’s Gatwick Airport, has started talking to investors about a potential infrastructure fund that could eclipse the record $15.8 billion pool it finished raising according to people familiar with the matter.

Dubai-based Relam Investment LLC announced its entry into the Indian market with an initial commitment to invest USD 300 million in the real estate and technology sectors over the next five years.

he New York-based firm began discussions on the possible fund — whose target could reach or top $20 billion — with a group of the largest clients in its current vehicle at a dinner it hosted in Berlin last month, said some of the people, asking not to be identified because the information isn’t public. The firm is seeking anchor commitments before formally launching a fundraising process. A GIP representative declined to comment. GIP focuses on projects in the energy, transport, water and waste industries and has been putting money to work at a fast clip. Earlier this year, it teamed up with investors to acquire renewable-power specialist Equis Energy for $5 billion, and it has a pending deal to buy Italian high-speed train operator Italo for 1.98 billion euros ($2.4 billion). Over time, its funds have grown in size: the first two totaled $5.64 billion and $8.25 billion, respectively. Unlisted infrastructure is increasingly attractive to institutions such as pension funds and sovereign wealth funds, in part because returns are uncorrelated to stocks and other asset classes. Assets swelled to $418 billion as of June 2017, more than four-times the level of capital dedicated to the sector a decade earlier, according to data provider Preqin.

Enphase Energy Announces Chief Financial Officer Resignation Enphase Energy Inc. (NASDAQ:ENPH), a global energy technology company and the world’s leading supplier of solar microinverters, announced that its Chief Financial Officer, Bert Garcia, is leaving the Company to pursue other opportunities. Enphase has an external search underway to identify a replacement. Garcia will continue as CFO until June 30, 2018, and will support an orderly transition to his successor. Bert has been an integral part of the Enphase team for eight years,” said Badri Kothandaraman, president and CEO of Enphase Energy. “We would like to thank him for his service and wish him well in his future endeavors. His knowledge and leadership will be important through the transition period.

I have enjoyed working at Enphase and am pleased by the progress we have made to position the business for continued success,” said Bert Garcia. “l remain fully committed to helping Badri and the Enphase team with this important transition.

The company will make India as it’s hub for investments in Southeast Asian markets, its chairman and managing director Sultan Ali Rashed Lootah said. “We have allocated an investment portfolio of USD 50 million to fund emerging technology companies and another USD 250 million into the real estate sector,” Lootah said, adding the investment will be done over a period of next five years.

he company is investing in three technology companies – Oya, Bricx and T-Hub, according to him. “In the real estate sector, we would be looking at investment in commercial as well as affordable, energy-efficient and sustainable housing projects,” he said. The company is open to either invest directly in a real estate project or partner with any domestic company to invest, Lootah added. Relam Investment LLC, a joint venture between UAE-based Vault Investment and Vietnamese MIG Holding, also signed a co-operation agreement with Mumbai-based RRP S4E Innovation to set up renewable energy plants in the country. Besides real estate and technology sectors, the firm will also focus on investments into energy, oil and gas, trading, healthcare, retail and agriculture sectors. Source : pti

June 2018

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BUSINESS & FINANCE

Hinduja Power buys Alan Roslingâ&#x20AC;&#x2122;s Kiran Energy for Rs 1,000 cr

Hinduja National Power Corp, a part of the Hinduja Group, has acquired Kiran Energy Solar Power for around Rs 1,000 crore, two sources close to the development have said.

he company had last year initiated talks to acquire city-based Kiran Energy which is an integrated developer- operator and a pioneer of grid connected solar PV plants in the country. Kiran Energy was founded by Ardeshir Contractor and Alan Rosling, a former Tata Sons executive director in 2010, and has a operational portfolio of around 85 mw now. The company is also engaged in building solar clusters in Gujarat, Maharashtra, Karnataka, Tamil Nadu and Rajasthan with capacities varying between 50 mw and 100 mw. Sources told PTI that the Hindujas have acquired Kiran Energy by buying out the private equity funds who own majority. Three private equity players who are exiting the company are Argonaut Ventures, New Silk Route and Bessemer Venture Partners India which collectively own nearly 80 per cent in the company. The founders Contractor and Rosling and a few others own the rest. The Hindujas were not reachable for comments, but the sources said the size of the deal could be in the range of Rs 800 to Rs 1,000 crore.

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A few years ago, co-chairman of the Hinduja group Gopichand Hinduja, had said the group had plans to invest USD 1 billion to install 1000 mw of solar capacity. Following this, Hinduja National Power had announced plans to expand its generation capacity to 10,000 mw over the next decade at an expected investment of USD 10 billion. Total projected capacity will be a mix of thermal, hydro, nuclear and renewable energy, asp the company website. The company has already commissioned its 1,040-mw coal-fired thermal power plant near Visakhapatnam in Andhra. It can be noted that Tata Power had in June 2016 snapped out Welspun Energy for an estimated Rs 10,000 crore, in what would be the largest solar M&A in the country. Welspun Renewable Energy has a 1.1-gw portfolio. Source: outlookindia

June 2018

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BUSINESS & FINANCE

SkyPower and the Government of the Republic of Uzbekistan Announce 1,000 MW Solar Project in Uzbekistan Global leader in sustainability and utility-scale solar production, SkyPower, has announced an estimated $1.3 billion foreign direct investment in Uzbekistan to build 1,000 MW of solar energy generation capacity throughout the country.

his project will bring the largest foreign direct investment in Uzbekistan’s history. Uzbekistan and SkyPower also signed the first Power Purchase Agreement (PPA) in the country’s history, whereby the government will be purchasing power from an international and private company. Uzbekistan’s President Shavkat Mirziyyoyev has signed a decree signifying the government’s full support of the project and sovereign guarantees. SkyPower will be the first independent power producer in the history of Uzbekistan, working closely with stateowned utility company Uzbekenergo. This project is also the first public-private partnership between Uzbekistan and a truly North American company. Uzbekistan President Shavkat Mirziyoyev has been praised for his progressive approach to growing the nation’s economy, and the SkyPower project will be the first ever solar power generation project in Uzbekistan. The project will contribute an estimated $2.9 billion to Uzbekistan’s gross domestic product and create thousands of jobs. This will ultimately bring Uzbekistan to about 10 percent of its total renewable generation capacity, helping Uzbekistan reach its 2030 Paris Climate commitments while bringing power to the people of Uzbekistan.

June 2018

François-Philippe Champagne, Minister of International Trade for the Government of Canada, remarked, “Growing Canada’s cleantech and renewable sectors and encouraging the export of locally developed ideas and solutions that benefit the world is a priority for our government. I am pleased to see industry leaders like SkyPower Global help us towards that goal. This historic partnership with UzbekEnergo and the government of Uzbekistan will bolster growth in the region and help establish Canadian expertise in this fast-growing sector. I commend the SkyPower team for thinking big!”

SkyPower Chief Executive Officer Kerry Adler said that, “There are still more than a billion people globally without access to energy services, and our mission is to bring solar power to people who need it most. This is a historic partnership that will benefit both the Government of Uzbekistan and SkyPower, and we are happy to be building Uzbekistan’s first solar power installation. President Mirziyoyev’s forward-thinking vision for Uzbekistan, along with the commitment of the Deputy Prime Ministers and the leadership of the National Project Management Office in concert with Uzbekenergo leadership, together have really helped move this project forward. Uzbekistan is a country that holds tremendous opportunities for foreign investors under the vision for growth and expansion of President Mirziyoyev.” Source: edelman

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BUSINESS & FINANCE

Risen Energy deepens expansion outside of China by starting construction of first large-sale groundmounted PV station in Nepal Risen Energy Co., Ltd., a Chinese A-share market-listed PV module producer, officially commenced the build-out of a facility under an engineering, procurement and construction (EPC) contract in Nuwakot, Nepal.

{ Mr. Wang said: In line with the One Belt, One Road initiative, we have made significant progress in the global market, thanks to our advanced PV manufacturing technologies and rich experience in overseas projects. As one of the key parts of the initiative, Nepal is an attractive market for us. Over the next seven years, Nepal, a country boasting abundant water resources, aims to achieve the goal of 17,000 megawatts of electricity generation, which is unlikely to be met via hydropower alone. Renewable energy methods including PV have become important supplements and Nepal is on the right track. Looking forward, we plan to invest in and develop more EPC projects in Nepal and across South Asia in a move to contribute to solving the local energy crisis and boosting China-Nepal cooperation in connection with new energy.

isen Energy is the general contractor for the 25MW solar PV power station. The project represents one of the Chinese solar panel makerâ&#x20AC;&#x2122;s efforts in compliance with the Chinese governmentâ&#x20AC;&#x2122;s One Belt, One Road initiative by exporting products, brands and technologies abroad, as well as a milestone demonstrating how an efficient and professional solar PV solution from China solves the electricity shortage in Nepal. Upon completion, the power station is expected to become the first large-scale ground-mounted PV station. Nepal energy minister Barshaman Pun, Nepal Electricity Authority executive Nutan Bhattrai, Risen Energy president Wang Hong jointly witnessed the initiation of a significant partnership between China and Nepal in terms of environmentally-friendly energy during the opening ceremony. In addition to EPC and the follow-up adjustment and calibration upon completion of the project, Risen Energy will contribute high-efficiency 275W solar modules, which are both reliable and cost-efficient, to the project. The facility is scheduled to be put into operation by the end of this year, at which point it will be connected to the state grid and provide clean electricity to Kathmandu Valley during the daytime. The Chinese provider has accelerated its expansion plans outside the home market, plans that have been in the making for years, by actively bidding on and participating in projects worldwide. In addition to enhancing its presence in Europe, the Americas and Australia, Risen Energy has expanded into countries along the One Belt, One Road route including Bangladesh, Kazakhstan, Kyrgyzstan and the ASEAN countries. The PV provider has also been a key player in facilitating close partnerships in terms of clean energy between countries. To date, the company has 1,000 projects either under development or being delivered across the globe. The company is well on track to see the sum of its installations outside of China exceed 800MW by the end of this year. Source: Risen Energy Co., Ltd

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June 2018

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BUSINESS & FINANCE

Sunsure Energy Raises $2 Million from L&T Finance, TATA Cleantech and cKers SunSure Energy has reached yet another milestone in its evolution from a bootstrapped company into a prominent name in the medium-scale Solar PV Solutions (100 kW – 20 MW).

owards the last quarter of FY18, it has raised zero-collateral based debt capital from marquee institutions in the clean energy sector including TATA Cleantech Capital, L&T Finance & cKers Finance. Currently financing limits available are for a total of Rs 15 Cr (USD $2.2 Million) and the proceed of funds would be towards working capital needed for constructing Solar PV projects upto 100 MW in FY19. These limits can be raised higher to accommodate more projects once the lenders have comfort created by quality projects that Sunsure executes.

Anand Srivastava, Director – Corporate Development for Sunsure Energy, said, “We are delighted to have highly respected institutions like TATA Cleantech, L&T finance and cKers as partners in our growth story. The current financing structure is more of a Purchase Order financing which is exactly the kind of capital a project execution company needs. This was not available for companies in the Solar construction space without collateral securities. So we are fortunate to have a first of its kind facility from these institutions which have trusted our execution capabilities.” He also added, “The security creation will happen on the project assets and equipment that will be bought from the funds and personal guarantees from the promoters. The interest rates are much better than any other non-collateral lending options available in the market for young companies. Being a professionally run company and not a family business, collateral property is generally missing for first generation promoters like us. So traditional banks have very restrictive options for exponentially growing companies like us. They are also turning more reluctant to lend due to high amounts of NPA turnouts with their largest clients.”

ADIA eyes renewable technologies, long-term returns improve in 2017

Abu Dhabi Investment Authority (ADIA), the world’s third-biggest sovereign wealth fund, said it may invest more in renewable energy, as climate change fears prompt fund managers even in the oil-rich Middle East to look beyond fossil fuels

“The world’s energy industry is in the early stages of a fundamental shift from fossil fuels to a more sustainable reliance on a range of renewable technologies,” ADIA said in its 2017 annual review. he ADIA’s comments show how global sovereign funds are waking up to growing calls from governments to address climate change and to build a low-carbon society in the future. Two years ago ADIA invested in Greenko Energy Holdings, one of India’s renewable energy companies, with Singapore’s GIC. ADIA manages the reserves of the emirate of Abu Dhabi, part of the United Arab Emirates and which produces about 3 percent of the world’s oil output. The fund manages $828 billion in assets, according to the Sovereign Wealth Fund Institute, making it the world’s third- largest sovereign wealth fund. Norway’s $1 trillion sovereign wealth fund said earlier this year it will step up its assessment of the risks posed by climate change to its investments in power producers, oil firms and basic materials companies.

"ADIA said it conducted a review last year of climate change and its potential impact, in order to assess how markets and governments could respond to this impending transition. Overall, ADIA’s latest review showed that its long-term returns improved in 2017, helped by rising equity markets. In U.S. dollar terms, the 20-year and 30-year annualized rates of return for the ADIA portfolio were 6.5 percent and 7 percent, respectively. This compared to 20-year and 30-year annualized rates of return of 6.2 percent and 6.9 percent, respectively, in 2016. ADIA said 55 percent of assets are managed by external managers." PRIVATE EQUITY REORGANIZATION ADIA also said it completed a reorganization of its private equity department last year with a move from a productfocus to regional teams focusing on five industry sectors: financial services, healthcare, industrials, technology and consumer. During the year, a new head of Asia-Pacific was appointed in addition to sector heads for financial services, healthcare and industrials. Recruiting for the technology and consumer sectors has started, it added. Late in 2017, the department purchased a significant minority stake in KKR India Financial Services, an alternative credit provider. This year, the department will continue to deploy capital in line with its strategy of increasing its sector-led investment activity, with a focus on evaluating structured equity opportunities, defensive industries and other privateasset investments, ADIA said. However, it warned current valuation levels and increasing competition for deals amongst market participants suggests that the industry might enter a period of lower returns than those experienced in recent years.

Source: in.reuters

June 2018

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BUSINESS & FINANCE

YES SECURITIES acts as Exclusive Advisor to Kiran Energy for its acquisition by Hinduja Group Kiran Energy, one of the leading and pioneering solar energy IPP (Independent Power Producer) in India has been acquired 100% by Hinduja Group, a diversified conglomerate with business interests across automobiles, financial services, engineering, international trading, healthcare, real estate, media and infrastructure.

ES SECURITIES’ Sustainable Investment Banking Team (SIB) acted as the exclusive advisor to the transaction. Kiran Energy operates solar power plants in Rajasthan, Gujarat and Maharashtra. Kiran Energy has operating solar plants with a capacity of 85 MW and has been a leader for solar energy in India both in terms of technologically advanced power plants and best in class project financing. Kiran Energy power plants have been awarded for best plant load factors, the Company has been adjudged the best Solar Power Producer by IPPAI and recently in 2018, as the best solar power technical team. The company is promoted by Ardeshir Contractor, a first-generation entrepreneur and technocrat, along with a team of cofounders and backed by leading Private Equity investors viz. Bessemer Venture Partners, GKFF (Argonaut capital) and Rivendell PE (New Silk Route). In 2010, Mahindra & Mahindra joint-ventured with the Kiran Energy group to jointly build three solar power plants and in 2013, First Solar Inc, USA, invested a minority stake in three of Kiran Energy solar power plants. Nishith Desai Associates and AZB & Partners acted as the legal advisor to Kiran Energy and Crawford Bayley & Co. acted as the legal advisor to Hinduja Group for the transaction.

Ardeshir Contractor, MD of Kiran Energy, commented: “Kiran Energy always held the conviction that solar energy would evolve as a mainstream energy source for India. Over the last 7 years, it has been a tremendous experience to be at the forefront of this evolution. We are extremely pleased with our agreement with Hinduja Power and look forward to witnessing the growth of the business to new heights. We are very satisfied about the collaboration with YES SECURITIES’ Sustainable Investment Banking (SIB) team, which was able to find the right match for the assets, and made the whole process quite smooth for us”

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YES SECURITIES’ Sustainable Investment Banking (SIB) team acted as the exclusive advisor for this transaction. Speaking on this occasion, Mr. Vikas Dawra, Group President & Global Head, Investment Banking said, “YES SECURITIES, a wholly owned subsidiary of YES BANK has deep rooted understanding and expertise in the renewable energy space and is privileged to have associated with Kiran Energy. Kiran is one of the very first solar platform in India and assisting it in finding favorable exit to the existing investors gives us a lot of satisfaction and happiness. With this transaction SIB has established its credentials as the No. 1 renewable energy M&A advisor in the country by volume.”

Source: yesbank.in

June 2018

TECHNOLOGY

Out with the old - in with the new New products review at SNEC Growatt is dedicated to technical innovation, the upgrade of products and state-of-the-art craftsmanship and regards its offerings as its core element of competitiveness. The company therefore ensures that any product it delivers to its overseas consumers is innovative, of high quality and representative of the image of China.

The new large-capacity industrial & commercial string inverters, which were released on the second day of SNEC, are equipped with optional AFCI module on the DC side, which can accurately detect DC side arc faults and handle them in a timely manner to avoid fires. The smart IV curve diagnosis function actively monitors the working curve of each MPPT. “In recent years, distributed photovoltaics has developed rapidly and the industrial & commercial photovoltaics in the middle and east China has generated more prospects. The industrial and commercial roof is with large area and high electricity price, so value of industrial and commercial PV investment is greater and there are lots of development opportunities.

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Growatt insists on an innovation driven strategy, focusing on penetration of research and development, as well as developing better cost performance, higher added value and more powerful new products.” Said Jimmy Yuan, Growatt’s Senior product manager.

Energy storage system, as an essential part supporting the smooth operation of power grid, pushes the integration of renewable energy into grid and supports the development of distributed energy, multi-energy complementary, micro-grid, electric vehicles and energy internet, has received unprecedented attention in importance and value of applications.

rowatt attracted nearly 200 top engineers, partners, reporters and audiences during the amazing presentation show on the stand of SNEC 2018, who witnessed the new products 2.5-6K-X, 7-8KMTL-S , including large capacity of commercial smart new inverter MAX 50-80KTL3 LV/MV. On the first day (28May) Growatt launched the 2500-6000 TL-X series. The series are more powerful on the performance with 1.4 times DC overload and 1.1 times AC overload,12.5A string current design, perfectly matching bi-facial module, and increase up to 10% energy generation. For the human machine interface, Growatt 2500-6000 TL-X is the first to use OLED display touch screen, clear and beautiful, no button design. The series provide a user- friendly experience, and are more resistant to low temperature, a perfect combination of low energy consumption and long life span; The comprehensive communication interfaces including USB/RS485/GPRS/4G/WiFi/RF can be flexibly matched for intelligent monitoring and operation & maintenance. At the same time, it reserves the optimizer, energy storage battery, and IoT interface to facilitate future system expansion.

June 2018

Tower structure of EV charger is stable and reliable, 0-200A current continuously adjustable; AC and DC chargers are integrated, simple and convenient.” Said Given Pan, Growatt ’s R&D director.

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“Energy storage applications are found in many areas of production and human living. It provides functions of peakshaving, energy shifting and regulation of frequency, power backup and improvement of power quality. According to the different application scenarios, Growatt provides various application solutions for home, business, and micro-grid. Cases are all over the world and the shipments are far ahead in the domestic and overseas market. The newlyreleased PV-storage-charger products are integrated design of PV storage and EV charging, it is with high-efficiency and environmental friendly. In addition, Growatt displayed off-grid series SPF, the SPA series AC BUS solution that is easy for PV system retrofitting, and the new SPH4K-11K high-voltage three-phase hybrid inverters, fully adaptive to various application scenarios and provide customers with comprehensive service solutions.

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TECHNOLOGY

Joly wood’s “Futuristic Technology” Debuts at SNEC2018 to Lead a New Era of Bifacial Technology

NEC (2018) PV POWER EXPO (SNEC 2018) was successfully concluded in Shanghai on 30th May. As the largest and most authoritative event in the photovoltaic industry, SNEC has become a platform for various photovoltaic enterprises to present advanced product technologies. Jolywood, a leading enterprise in the efficient N-type photovoltaic technology, dwarfed other competitors with its efficient bifacial technology and diverse application plans. In addition, against the backdrop of rapid development of grid parity, the efficient N-type products, aluminum partnerof bifacial modules, new transparent backsheetproducts and glass-free AI module launched by Jolywoodat the exhibition won wide attention from the industry. In terms of technological innovations, the brand new aluminum partner of bifacial modules introduced by Jolywood this time brought another feasible solution to the cost reduction and efficiency improvement of the system. Based on the efficient N-type bifacial modules and trackers, the technology of aluminum partner of bifacial modules also adopts the innovative pre-roller coating high-reflective colorful aluminum tile technology. The high-reflective coating on the surface, as the reflective surface of the solar module, may reflect more than 80% of the white light, greatly improving the power generation efficiency of the module. Currently, the efficient N-type mono-crystalline bifacial cells developed by Jolywood based on N-PERT technology feature a conversion efficiency of more than 22%, with the efficiency of the back greater than 19%, increasing nearly 30% of power generation than that of general single-side modules. After applying the technology of aluminum partner of bifacial modules, the project will see an increase of 30% in terms ofpower generation revenue. In addition, Jolywood is working with design units to apply the N-type bifacial modules plus aluminum partners into complementary agriculture and photovoltaic scenarios, forest and photovoltaic scenarios, and power stations on mountains and water surfaces so as to bring higher benefits for users.

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As to the research and development of products, Jolywood worked with DuPont to hold a new transparent backsheet news conference titled “Getting to Know a Transparent Backsheet” to jointly introduce a patented transparent backsheet product. Compared with traditional backsheet products, the new transparent backsheet boasts multiple advantages such as light weight, breathability, and high gain. In this regard, the transparent backsheet reduces the weight of the module by 30% compared to the double glass structure, thereby decreasing transportation and installation costs; the average transmission rate of visible-near infrared light area is no less than 90%. Meanwhile, if it functions together with a high reflection transparent backsheet, the power of the module can be increased by 5W to 6W. Moreover, Jolywood also provides the industry with a comprehensive transparent backsheet solution that matches bifacial modules, further enhancing the efficiency of bifacial products and creating more benefits. The glass-free AI module developed by Jolywood may be bended freely, and its cells are made of efficient N-type 100um ultra-thin material, with an efficiency of over 23%. Its surface is made of fluoroplastics featuring high transparency and strong tenacity, sound heat resistance, chemical resistance, electrical insulation, radiation and mechanical resistance. Also, the module has broad spectral response. Compared with conventional modules of the same power, it boasts smaller size, lighter weight, flexible and beautiful design. Besides, it can be used in a variety of curved surfaces, and bent into s-shape or arc-shape, making up for the defect that solar modules only had straight but no curve lines in the past. Compared with thin-film modules, the glass-free AI module boasts high conversion efficiency, low temperature coefficient, sound absorption of scattered light, high bendability, and excellent cost performance. It is suitable for various special photovoltaic applications, such as solar aircrafts, solar golf electric vehicles, solar electric sightseeing vehicles, solar electric patrol cars, solar electric scooters, solar chargers, integrated solar street lights, yachts, rooftop power generation, backpacks, outdoor tents and other fields.

June 2018

TECHNOLOGY

DuPont Scientists Named JinkoSolar Breaks World Record for P-type Monocrys- 2018 Heroes of Chemistry American Chemical Society’s Heroes of Chemistry Award Presented talline Cell Efficiency to DuPont Photovoltaic & Advanced Materials Scientists for their Innovations in Metallization Pastes for the Solar Industry

a global leader in the solar photovoltaic industry, announced that its P-type monocrystalline cell broke the world record again with efficiency hitting 23.95% during certification testing done by the Photovoltaic and Wind Power Systems Quality Test Center at the Chinese Academy of Sciences (CAS).

Mr. Kangping Chen, CEO of JinkoSolar, commented, “This recent technical breakthrough is a combination of several our latest technologies. In particular, the introduction of novel passivation and selective contact technology have successfully broken the technical bottleneck created by traditional PERC technology and represents a significant step forward for our P type solar cells with their previous efficiency record of 23.45% in 2017. We will continue to allocate resources towards innovating new and high efficiency solar technologies and their application to the market as we continue to provide the most reliable and highest efficiency products.”

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-type mono wafer technology is a contributor, with the highly doped and low defect wafers providing excellent bulk quality. The continued gain in efficiency is a result of the further optimization of selective emitter (SE) formation, silicon oxide passivation and the rear side passivation. JinkoSolar’s unique light-capturing technology uses black silicon and the multi-layer ARC technology reduces the front side reflectivity of cells to be lower than 0.5%, which ensures the growth of the short-circuit current. Meanwhile, an advanced grid design and a new type of screen-printing paste are used to reduce the series resistance and the metal / silicon interface compound probability as a result of promotion of solar cell fill factor.

June 2018

cientists from DuPont Photovoltaic and Advanced Materials (PVAM) were awarded the American Chemical Society’s (ACS) Heroes of Chemistry Award for their invention of DuPont™ Solamet® PV17x, the gamechanging metallization paste that greatly improved the energy efficiency of solar cells. Fine silver lines are printed on solar panels and their design leads to the efficient capture of the sun’s energy turning it into electricity. DuPont scientists made advances in lead-tellurite frit chemistry and commercialized it as multigenerational Solamet® metallization pastes creating a step-change in performance with increasingly higher cell efficiency and performance advantages. The majority of the PV industry has adopted tellurite-based silver pastes in essentially all p-type c-Si solar cells. These solar cells account for more than 90 percent of the overall $34 million annual solar module market. Heroes of Chemistry is an annual award sponsored by the American Chemical Society that recognizes talented industrial chemical scientists whose work has led to the development of successful commercialized products ingrained with chemistry for the benefit of humankind. This year the recognition goes to the collaborative effort by a diverse team of DuPont scientists who shared a common vision of advancing solar technology: Kurt Mikeska, Charlie Torardi, Paul VerNooy, Ken Hang, Brian Laughlin and Alan Carroll. “ACS knows that good business results usually have good science as their foundation. As a result of our scientists’ dedication and commitment, our solar cell manufacturer customers were able to make more efficient cells, use less paste, expand the wafer firing temperature window, and improve adhesion during the panel making process,”

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Chuck Xu, global business director, DuPont Photovoltaic and Advanced Materials. “These combined benefits contributed to improved solar cell performance and lower cost of ownership throughout the industry.”

As the world is striving for renewable energy to reach grid parity with fossil fuels, the role of scientists becomes more and more important. “DuPont™ Solamet® technology plays a central role in making solar panels more powerful and more cost-effective. The technology is fostering a fast-growing industry that is creating jobs while enabling sustainable living for humankind,”

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Peter Dorhout, ACS president. “This is a strong example of chemistry having a direct, positive impact on society, which is why these inventors are clearly ‘Heroes of Chemistry.’”

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TECHNOLOGY

JA Solar’s High-Efficiency Mono PERC Modules Continue to Expand Their Reach in Brazilian Market

JA Solar Holdings Co., Ltd. (Nasdaq: JASO) (“JA Solar”), one of the world’s leading manufacturers of high-performance solar power products, announced that JA Solar will supply 8.1MW of its high-efficiency mono PERC modules to the first solar power plant utilizing PERC modules in Brazil.

ocated in Minas Gerais, this project marks the country’s first ground-mounted utility-scale solar power plant to adopt PERC technology. The solar plant was acquired by Sindustrial, a leading construction and electrical panel manufacture company, and Solatio Energia, the largest solar project developer in Brazil. The solar power plant, which is situated in a semi-desert area, will be powered by JA Solar’s high-efficiency mono PERC modules. These high-performance solar modules can ensure high power and stable output under extreme environmental conditions including high temperature and drought, optimizing profits generated from the solar plant for our customers. Separately, JA Solar’s high-efficiency mono PERC modules are also well received by the distribution channels in Brazil. WEG, one of the leading Brazilian electric power companies, recently ordered 7.8 MW of JA Solar’s mono PERC modules for distribution to maintain its competitive position in the marketplace.

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Mr. Cao Bo, Vice President of JA Solar, commented: “Brazil has abundant solar energy resources and represents a promising market for solar energy. JA Solar entered the Brazilian market in 2015, and provided a total of 254MW of solar modules for the country’s biggest solar plant in 2016.

Additionally, we established our Brazilian subsidiary last year, expanding our presence and further supporting our customers and partners in the region. JA Solar is committed to our R&D efforts to develop high-performance solar modules. As a PERC patent holder, JA Solar is capable of providing our Brazilian customers with more reliable products and services.”

Record 410 watt module with heterojunction solar cell technology CEA INES team, in collaboration with Meyer Burger, achieves new heterojunction 72 cell module perfor -mance record at 410W.

he record module integrates heterojunction cells manufactured on industrial 2400 wph Meyer Burger cell manufacturing equipment on the CEA INES pilot line with an average HJT cell efficiency of 23.4%. Achieved within the framework of the strong CEA – Meyer Burger partnership on heterojunction technology, the CEA INES pilot line for heterojunction cell manufacturing integrates Meyer Burger’s PECVD and PVD equipment. The record module was manufactured in Thun on Meyer Burger’s SmartWire Connection Technology (SWCT™) manufacturing equipment using materials based on the newest generation SWCT™. This result highlights the very high potential of heterojunction technology and the 15 years of expertise of the CEA INES team on heterojunction technology strengthened by its partnership with photovoltaic equipment supplier Meyer Burger.

Source: JA Solar

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June 2018

TECHNOLOGY

Solar UAV to be developed with the potential to stay airborne for a year A new solar electric unmanned aerial vehicle (UAV), which has the potential to fly for up to a year before needing maintenance, has become a step closer to reality following a new agreement between two cutting-edge British companies, BAE Systems and Prismatic.

new solar electric unmanned aerial vehicle (UAV), which has the potential to fly for up to a year before needing maintenance, has become a step closer to reality following a new agreement between two cutting-edge British companies, BAE Systems and Prismatic.Engineers from Prismatic and BAE Systems will collaborate on the development of the new solar powered High Altitude, Long Endurance (HALE) UAV known as PHASA-35™, with work already underway to prepare the first aircraft to be ready for flight tests in 2019. The technology would offer a year-round, low cost persistent service for a wide range of needs including surveillance and vital communications to remote areas, using only the sun to power the aircraft during the day and recharge the batteries for overnight operation.Solar HALE vehicles offer a significantly cheaper alternative to conventional satellite technology, with PHASA-35™ (standing for Persistent High Altitude Solar Aircraft), being a concept solar electric UAV that uses proven, long life battery technology and ultra-lightweight solar cells to potentially maintain flight for up to 12 months. The PHASA-35™ concept has a 35-metre wingspan and weighs just 150kg – its lightweight, efficient build allows it to fly at high altitudes for long periods of time. A quarter scale model (named PHASE-8™) completed a successful maiden flight in 2017, with Prismatic Ltd and BAE Systems now looking to take the technology a step further.

“Prismatic is a fast paced and forward thinking company and PHASA-35™ is a great example of what the team can achieve in a short space of time. We were keen to invest in the programme as part of our long term strategy to explore new technologies and solutions in air and space. I look forward to working with the team and I’m sure the collaboration will add further strength to both ourselves and Prismatic.” Michael Christie, Strategy Director within BAE Systems’ Air sector

June 2018

BAE Systems will invest in the development and flight testing of the PHASA-35™ system as part of its drive to continually develop new technologies to support aircraft of the future, working collaboratively with SMEs and academia. BAE Systems has a portfolio of patents and patent applications covering approximately 2000 inventions internationally, and under the agreement with Prismatic, it will provide expertise in aerospace technology and project management to progress the PHASA-35™ programme through to a marketable offering.

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“PHASA-35™ has the ability to revolutionise the way we think about Beyond Line of Site communications. It’s great to have the support of a world leading technology company like BAE Systems. I’d like to extend a huge thank you to the team who have worked tirelessly over the past two years to develop PHASA-35™ as a proven, cost effective and reliable system.” Paul Brooks, Founder and Managing Director of Prismatic Ltd Source: indiastrategic.in

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TECHNOLOGY

LONGi Solar released its Hi-MO3, an innovative half-cut bifacial n-mono PERC module. This is another advanced PERC cell and module construction by LONGi Solar which follows on the heel of its Hi-MO1 PERC low-LID module in 2016 and Hi-MO2 bifacial PERC module in 2017.

i-MO3 uses half-cut techniques to reduce the operating current of the cell by half, effectively reducing resistance losses and increasing power by 5-10 watts on average. With bifacial technology, the front-side power of the module reaches 320W (60-cell), and the bifaciality is higher than 75%. Under shaded conditions, Hi-MO3 yields more energy than a full-cell module array. The advantages of Hi-MO3 include lower hot spot temperature that reduces LCOE by a factor of 10% or more compared to conventional products at all irradiation levels.

“This 3rd generation of Hi-MO with higher power, higher yield, lower hot spot effect further improves product efficiency and performance which in turn accelerates the reduction of LCOE,” Zhong Baoshen, Chairman of LONGi, said. “It’s the result of the R&D team’s relentless focus in technological innovations. We expect that the launch of Hi-MO3 can bring new breakthroughs to the development of the industry.”

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“PV power generation as a strategic emerging industry in China has huge development potential for the future. PV companies must have a sense of responsibility and mission to continuously make innovations and progress,” said Li Junfeng, former director of National Center for Climate Change Strategy and International Cooperation.

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LONGi Solar Launches Half-cut Bifacial PERC Hi-MO3 Module rated at 320W on the Front-side

Shi Dinghuan, Former Counselor of the State Council and honorary chairman of China Renewable Energy Society, added, “the advancement of energy revolution and green revolution requires the promotion of technical innovation in PV products, continuous improvement of photoelectric conversion efficiency and PV investment value, and further acceleration of grid parity. LONGi’s practice in technological innovation and product innovation deserves encouragement and recommendation.”

LONGi has continuously increased R&D investment in the science and technology of mono-crystalline. In the past five years, the company invested a total of RMB 2.464 billion. In 2017 alone, the company invested RMB1.108 billion, 6.77% of its sales, into R&D, the highest among PV companies in the world. With continuous R&D investment, LONGi Solar has made remarkable technological progress. Since September 2017, the company has broken the world records for PERC cell and module technology eight times. In 2017, LONGi Solar shipped 4.66GW nocrystalline modules, ranking first in the world in monocrystalline cell and module shipments for three consecutive years. The release of Hi-MO3 is expected to further accelerate the progress of PV grid parity.

June 2018

TECHNOLOGY

20.66% – LONGi Solar Sets Another World Record For 60-cell Module Conversion Efficiency Jolywood Partners with Imec LONGi Solar announced that China General Certification Center (CGC), an authoritative, independent testing organization, has validated that to Develop Bifacial Solar Cells LONGi Solar’s 60-cell bifacial shingling module achieved a front-side conversion efficiency of 20.66%, the highest in the world to date. Dr. Lv Jun, Vice President of LONGi Solar said, “this breakthrough in module conversion efficiency further confirmed the development potential of monocrystalline PERC. We firmly believe this will completely replace mainstream products in the next three years and effectively improve PV system’s power generation efficiency and reliability, which in turn reduce LCOE and brings customers more benefits.”

ased on the high conversion efficiency of single-sided PERC, bifacial PERC cells generate power from both the front and rear sides, adding 10%25% higher yield at a cost similar to single-sided PERC. In the future, the market share of PERC bifacial modules will increase rapidly. This is the third time this year that LONGi Solar has led the industry and broke the world record for PV module efficiency. The achievement can be attributed to the company’s high R&D investments. In 2017, LONGi set a new record in the PV industry for R&D expenditure, investing USD 175.7 million, 6.77% of revenue in R&D. LONGi Solar will gradually bring its innovative technologies to mass production and apply these advanced technologies to its products to provide customers with world leading efficient mono-crystalline solutions.

“Technological innovation is the soul of LONGi,” Li Wenxue, President of LONGi Solar said. “Oriented to the market and customers, our module technologies have successfully balanced power and efficiency, and taken into account both costs and benefits. LONGi promotion of monocrystalline modules will bring customers higher return on investments, and contribute to green energy for the world.”

Jolywood (Taizhou) Solar Technology Co. Ltd (“Jolywood” or “the Company”), a leader in the research, development and mass production of N-type bifacial solar cells, has collaborated with Imec,

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orld-leading research and innovation hub in nano-electronics, energy and digital technology, on developing industrialized bifacial solar cells with an average front-side conversion efficiency up to 21.9 percent. As part of the collaboration, Imec has also demonstrated screen-printed monofacial n-PERT cells with the conversion efficiency up to 22.8 percent.

“Jolywood is at the forefront of the n-type industrial technological developments in the PV industry, so we’re very satisfied with the close collaboration with Imec, the world-leading PV research institution,” said Dr. Zhifeng Liu, R&D Director of Jolywood. “And we’re very delighted with the excellent progress in the development of the high-efficiency bifacial n-PERT solar cells that have come as part of our collaboration. With our strong commercialization capabilities and experience, we look forward to transferring the achievements into commercial production.”

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The new bifacial cells developed by the two parties use narrow (~40 μm) printed silver (Ag) fingers on the front side and printed aluminum (Al) fingers on the rear, the latter making contact with the emitter. By using Al instead of AgAl for the rear contacts, the cost per cell is lowered to US$0.01/Wp. On a batch of M2-sized cells (area: 244.3 cm²), an average conversion efficiency of 21.9 percent was demonstrated, with the best cell topping 22.1 percent. Used in bifacial operations under standard front illumination conditions in conjunction with an additional 0.15 sun rear illumination, these cells can achieve an efficiency of 25 percent. Additionally, Imec also fabricates screen-printed monofacial n-PERT cells with efficiencies up to 22.8 percent, which is a state-of-the-art result for an industry-compatible fabrication process. Also, the PV module has been proven compliant with the essential requirements, and a certificate from TÜV SÜD, the prestigious German product testing organization. Jolywood is the world leader in the development, production and marketing of high-efficiency monocrystalline N-type bifacial solar cells. The company is the #1 N-type Bifacial Cell Manufacturer in the world, and focuses on cutting-edge technology innovation to further improve cell efficiency and to lower the levelized cost of electricity (LCOE). Imec, on the other hand, is an international R&D and innovation hub, active in the fields of nanoelectronics and digital technologies.

Source: LONGi Solar

June 2018

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TECHNOLOGY

DuPont Unveils a New Expanded Product Portfolio at 2018 SNEC PV Power Expo As an industry leader in solar solutions that deliver proven power and lasting value for the industry, DuPont Photovoltaic Solutions (DuPont) showcases a broader portfolio of innovative materials as well as customer collaborations in booth W4-555 at 2018 SNEC International Photovoltaic Power Generation and Smart Energy Exhibition.

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“DuPont aims to bring high efficiency, high reliability material solutions to our customers through continuous innovation to enable sustainable growth of the PV market and attractive return of investment for solar power investors.” said Chuck Xu, global business director, DuPont Photovoltaic & Advanced Materials.

ne of the new highlights is the clear DuPontTM Tedlar® PVF film, an ideal backsheet material for bifacial modules that can generate greater power output. Compared to a double glass module structure; the breathable, clear Tedlar® PVF film based backsheets allow for higher reliability, lower operating temperature, up to 30% lighter weight, and a lower module installation cost. The clear Tedlar® PVF film is expected to be a drop-in with most current manufacturing processes for backsheets and modules with little if any additional investment in equipment needed for most manufacturing processes. A successful collaboration comes from the world’s largest solar energy installer, Huanghe Hydropower Development Co., Ltd.(HHSD), a leading clean energy subsidiary of State Power Investment Cooperation (SPIC) of China. A 72-cell, high-power, bifacial module protected by clear Tedlar® PVF filmbased backsheet will be featured in the booth. DuPont continues to be an industry pacesetter for innovation in the solar industry by introducing leading performance metallization pastes. Solamet® PV21x, the latest front side silver, is designed to enhance most mainstream cell tech-

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"We are proud to present the extended portfolio of products in SNEC, in which the new generation of Solamat® Metallization Paste, along with the new Teddyller® Backsheet content, is included in addition to Dow Corning TM PV silicone products in our PV offerings. nologies. Solamet® PV21x delivers better contact performance and high aspect ratios that enable cell efficiency enhancement >0.1% and maintains high throughput in mass production. Visitors to the booth will see TwinPeak 2 Series, a multi PERC module from REC that showcases power output up to 300W. Also showcased is a multi c-Si cell from TATA Power Solar achieving >19% efficiency. Another spotlight is on IBC, the one paste solution to contact both P and N emitters which has been demonstrated in mass production by SHARP. A high-power module for rooftop application by SHARP will also be showcased in the booth. With completion of the merger between Dow and DuPont, DuPont Photovoltaic Solutions is proud to broaden our PV offerings by integrating the Dow Corning brand portfolio of solar silicone solutions including sealants, adhesives, potting agents, encapsulants and electrically conductive adhesives. These state-of-the-art solar silicone solutions have enabled reliable solar systems with an increase in durability and efficiency. Our booth will feature a field tested solar panel from BP Solar that demonstrates over 25 years of proven performance using silicone encapsulants from Dow Corning brand. DuPont leaders and scientists will share their expertise on technology advancements and trends in the industry through panel discussions and in technical speeches throughout the SNEC Conference.

June 2018

TECHNOLOGY

Heraeus Photovoltaics forecasts higher efficiencies in PV industry with new Beyond Paste Solutions Portfolio at SNEC 2018 Expanded and integrated portfolio of pastes, products and services to help solar wafer, cell and module manufacturers achieve greater performance and efficiency.

eraeus Photovoltaics, a leading technology solution provider for the renewable energy industry, announced a new and expanded portfolio of products and services at the 2018 SNEC International Photovoltaic Power Generation and Smart Energy Exhibition & Conference in Shanghai. These new solutions, coupled with the company’s position as the world leader in metallization paste, is part of a strategic transformation by Heraeus to expand its innovations further across the PV value chain. Heraeus took the opportunity to unveil an advanced electrically conductive adhesive (ECA) named Hecaro that contains exceptionally little silver but delivers performance equivalent to high silver ECAs. In addition to the overall cost savings, Hecaro has been optimized for screen-printing, fast curing and long term reliability. All these factors position Hecaro to be a strong candidate for advanced solar cell interconnection designs such as shingling, IBC, HJT. The expansion of Heraeus into adjacent applications is part of the market trend for PV companies looking to streamline and simplify their value chains by seeking partners who can provide a more integrated suite of products, solutions and support.

Dr. Weiming Zhang, Executive Vice President and Chief Technology Officer for Heraeus Photovoltaics, stated that expanding its expertise beyond paste was a natural evolution. He said, “Our paste success is due in large part to the holistic approach we employ to helping our customers leap higher in the quest for efficiency gains and cost leadership. Our new ‘beyond paste portfolio’ will help enable them to be more competitive and innovative. Equally important, our work will help the solar industry continue to deliver the lowest total cost per-watt cost of generating electricity.”

June 2018

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THE EXPANDED HERAEUS PORTFOLIO INCLUDES: HeraGlaze©, a high-purity, high-density barrier coating that enhances crucible performance in multi-crystalline silicon solar wafer production. By increasing the usable section of the silicon ingot, HeraGlaze increases both wafer output yield and cell efficiency; Heraeus Solaray infrared radiation heating lamps use high quality quartz tube and heating material. Through the control of the material properties, Solaray provides a smoother and more stable optimization of sintering process for the solar cell, allowing customers to achieve greater efficiency; HecaroTM, a revolutionary electrically conductive adhesive that contains <50% silver content, providing proven reliability and faster coating. Additionally, Hecaro can be screen-printed; The company’s new Cell Optimization Service, which partners with world-class research institutions to provide customers with a complete solar cell analysis, simulation and process optimization; A new paste-and-screen bundle gives solar customers a one- stop solution that shortens the test time and reduces production costs. The screens effectively optimize the metallization process in solar cell production lines, providing the advantage of fine-line printing and improved long-term printing stability. Technical experts from Heraeus Photovoltaics will provide details on the company’s Beyond Paste PV Solution Portfolio at the 2018 SNEC International Photovoltaic Power Generation and Smart Energy Exhibition & Conference (Booth W3-510), taking place May 27-30 at the Shanghai New International Expo Center.

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TECHNOLOGY

JinkoSolar Reveals All-New 410W Cheetah Series At SNEC 2018, Erecting New Standard In Ultra High Performance Modules JinkoSolar Holding Co., Ltd. (NYSE: JKS) (the “Company,” or “JinkoSolar”), a global leader in the solar PV industry, announced that, with the theme of “Conquering the Grid Parity Paramount”, the company showcased six of its blockbuster products, leading the charge towards a new wave of industry innovations and illustrating the strength of the company’s brand.

NEC, JinkoSolar revealed, for the first time, its milestone JinkoSolar 410W Cheetah module that is reinventing the market standard for high performance. In addition, JinkoSolar also showcased its 310 W bifacial module, redefining the application boundaries of solar. Beyond the Cheetah and bifacial series, JinkoSolar also introduced, for the first time, its gold framed module designed to meet the need for elegant luxury in the Chinese residential PV market.

Showcased for the first time in the world at SNEC, JinkoSolar 410 W Cheetah module is the world’s highest-performing commercially mass-produced monofacial module, bringing the industry into the new age of PV 4.0 with mainstream module output of over 400 W. JinkoSolar Cheetah module is designed to meet the needs of the ultra-high performance market segments, such as the likes of China’s “Super Top Runner Program”.

All JinkoSolar Cheetah series modules are produced in the company’s next-gen ultra-smart P5 super factory and represents the most cutting-edge technology in solar module manufacturing. Utilizing an all new wafer and cell design, the Cheetah series has erected a new benchmark for ultra-high performing modules with its industry leading performance in metrics such as, but not limited to, output, limited degradation, shade tolerance, and durability. JinkoSolar 72 Cell Cheetah module’s 410 Wp performance is over 30 Wp higher than that of comparable products in the industry. The Cheetah series’ range topping conversion efficiency of 20.38% makes it the ideal solution for tender-based large scale PV projects and projects with ultra-high technical requirements such as those in China’s Super Top Runner program.In regards to the widely discussed N-type and P-type bifacial modules, JinkoSolar is the only tier 1 module manufacturer to offer both types of bifacial modules. JinkoSolar 380 W 72-cell monocrystalline bifacial module has expanded the application boundaries of PV module installation. Traditionally, modules were largely installed in a horizontally flat or near flat manner. However, bifacial modules has opened the possibilities of installing modules in a vertical manner, drastically lowering the amount of space needed in PV projects.

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The ability of the bifacial modules to generate power on both sides has increases its practicality, creating new PV applications such as on highway fencing, greenhouses, sunrooms, and other building integrated photovoltaics (BIPV). Depending on the type of tracker utilized, module installation angles, and the installation environment, one can expect an additional 5-25% power generation from bifacial modules relative to that of monofacial modules. JinkoSolar 385 W N-type bifacial module shares all the unique performance attributes of the P-type bifacial module and has the additional advantage of having lower degradation than that of the Ptype bifacial module. With the residential PV market growing at a breakneck pace, at SNEC, JinkoSolar also introduced its 320 W 60-cell golden framed module for the first time. Studies have shown that residential PV end-users, on average, are financially well off and are early adopters of new lifestyles and products. As such, these end-users have higher requirements for product personalization and quality. Combining a high efficiency of 19.37% and elegantly luxurious design, JinkoSolar golden frame module is the ideal solution for the residential PV market. Given its frameless and extreme anti-PID characteristics, JinkoSolar 335 W dual glass black silicone polycrystalline module has also garners substantial attention at the SNEC. The dual glass design provides the module, particularly in areas of high temperature and humidity, with great weather protection. The dual glass modules enables stable PV system operations in extreme weather environments.

“Industry transformation, continued technology evolution, and increasingly complex market demands are all obstacles we must overcome to accelerate the development of the PV industry. Having been preparing for these challenges, Jinko displayed six technical products at SNEC, showcasing what it means to be at the cuttingedge of smart solar manufacturing. As an innovative technical leader in PV, JinkoSolar will continue to development and present new cutting-edge PV technologies, lead the intelligentization of China’s PV manufacturing, and catalyze the development of the PV industry” commented JinkoSolar CEO Kangping Chen.

June 2018

EXCLUSIVE INTERVIEW

Exclusive Interview With Dr.P.V.Ramesh Talking to ET Now, PV Ramesh, CMD, REC, says 85% of REC loans go to the public sector, distribution, generation and transmission of the government power utilities — both central and state — and there is no stress here.

Chief Managing Director Rural Electrification Corporation

June 2018

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EXCLUSIVE INTERVIEW Rural electrification has been a cornerstone of the current government’s plan. We were just chatting with the power secretary before the break. Every village in the country is now electrified. However, rural India is still without power. What is the roadmap and plan and the next leg of taking electricity to every household?

Ramesh : This has been a proud moment for us. As the honourable prime minister has declared on 28th April, every single village in this country has been provided with access to power. That is every single village listed in the census of 2011, nearly about 6 lakh villages. We crossed a milestone. It is a significant move in terms of pushing the last mile to reaching out to the hitherto excluded areas in the villages and this is a big step forward in inclusive development in creating a new India. The next big step is the programme that the honourable prime minister launched last year in October 2017 — the Pradhan Mantri Sahaj Bijli Har Ghar Yojana, the Saubhagya Scheme — which seeks to take electricity to every single household in this country. That is nearly 3.8-crore households and that is a programme that is being launched and is at brisk pace of execution across the country.

The power ministry has estimated that connecting all homes with power connections will require 28 GW of generation capacity. What is the role REC would play over the next two to three years? How much of finance does REC target to generate for the sector?

Ramesh : REC is very active in financing the renewable segment. We are the first Indian corporate to raise green bonds and then create a special window for financing renewable projects and we are at the forefront of promoting green energy in this country. However, we will continue to support hydro and thermal segments as well. We have just financed a hydro project in Andhra Pradesh in Polavaram. We will continue to support this modernisation of the existing thermal projects as they get retro fitted. As demand picks up, we are looking forward to a very promising growth in the REC’s investment in the generation segment.

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Power plants are underutilised with issues like fuel shortage and the power sector is under stress. When do you see resolution of stress in the sector coming?

the end of third quarter of the last financial was 2.9% and the net was 2.1%. We are operating within the framework defined by the Reserve Bank of India and we are working with all the other banks.

Ramesh : The government is pushing towards a power for all within the shortest possible time to ensure affordable quality power to all citizens of this country. REC in that sense has an extremely unique place because we are a major financing company that provides much needed funding for the power sector across the country and across the value chain – generation, transmission, distribution and also the upstream activities like coal mine development, downstream activities like manufacturing of the electrical appliances, renewable energy. We are also involved as a nodal agency in major flagship programmes like Deen Dayal Upadhyaya Gram Jyoti Yojana, Saubhagya and power for all and such other programmes. We have an unique place of working with the private sector, public sector, state utilities, state governments in terms of ensuring that the quality power that the power sector transforms in a way that the country can accelerate on the development path.

Do you see a rise in gross NPAs and provisions due to the stress?

Ramesh : There are power projects which are experiencing stress and particularly in the IPP segment and also in the thermal power segment. There are a few hydro projects, but essentially REC has the unique position of having its loan book of nearly Rs 240,000 crore. Of that, 85% goes to the government sector, distribution, generation, transmission of the government power utilities — both central and state utilities — and there is no stress in any one of those 85%. Of the remaining 15%, about 1212.5% goes to the private IPPs and particularly to the generation segment. We have the lowest nonperforming assets among the peers in this league. Our gross NPAs at

UDAY has reduced the debt servicing burden of the discoms collectively by about Rs 15000 crore a year. It has created that level of additional financing space for the discoms to invest in capital strengthening. And when we look at the various operational parameters, almost all the discoms are making sincere efforts to see their operational efficiency improves, we see at an aggregate level and AT&C losses are coming down, the cost of ACS – ARR Gap is coming down, the billing efficiency is improving, the collection efficiency is improving and the overall management of in terms of all the discoms have filed tariff petitions before the regulators.

Ramesh : It is not the right time to talk about the specifics because the audit is still ongoing. We will certainly comply with all the provisioning requirements that the RBI mandates. We will ensure compliance with the highest standards of corporate governance and ensure that the assets are supported as per norms. I am fairly confident that the situation is stable, there is an optimistic future. As a major player in the power sector and not just as a financier but as a holistic total service provider, I am very confident that the power sector is going through a transformational change. The next few months and years to come is very, very positive. Our shareholders and citizens at large ought to be believed and know that what is happening on the power sector front.

How is the performance under the UDAY scheme so far and which discoms were under stress and which according to Axis Bank saw huge stress from power sector. Investors are you are performing better? concerned. How much exposure Ramesh : The UDAY scheme has been do you have to the government very closely monitored at the highest levels of the government. The Ministry and private sector and which of Power monitors this very closely. We segment — generation, play a supportive role to the ministry transmission, distribution — are in this regard and we see a significant you seeing stress in? impact of UDAY.

June 2018

Energy storage

New materials for sustainable, low-cost batteries developed Scientists have developed novel materials that could help develop sustainable and low-cost aluminium batteries.

Japan’s Marubeni signs MOU with Sweden’s Northvolt on battery biz

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Japanese trading house Marubeni Corp said on Tuesday it has signed a memorandum of understanding (MOU) with Swedish battery manufacturer Northvolt AB to collaborate in a lithium-ion battery business to meet growing demand in Europe.

June 2018

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orthvolt, whose Chief Executive Officer Peter Carlsson used to work for Tesla, plans to build Europe’s biggest battery cell plant in Sweden, with the backing of investors such as Volkswagen-owned truckmaker Scania and Swiss engineering group ABB. Marubeni is considering supplying Northvolt’s battery factory with manufacturing equipment such as coating and slitting machines as well as raw materials including cathode and anode materials, a company spokeswoman said. The Japanese trading company also plans to support the Swedish firm’s sales of storage batteries, using its know-how in the renewable energy business, while the two companies are looking at jointly developing an battery recycling business, it added. Energy storage is becoming increasingly important as production of renewable energy rises, because the wind might not blow or the sun shine during the peak hours when most consumers turn on their lights and appliances. Northvolt competes against rivals such as South Korea’s LG Chem to set up large-scale battery cell plants across Europe, where automakers and industrial firms have so far been largely reliant on Asian imports. Danish wind turbine maker Vestas has also signed a partnership deal with Northvolt.

he first is a corrosion-resistant material for the conductive parts of the battery; the second is a novel material for the battery’s positive pole that can be adapted to a wide range of technical requirements, said scientists from ETH Zurich in Switzerland. Scientists have developed novel materials that could help develop sustainable and low-cost aluminium batteries. The first is a corrosion-resistant material for the conductive parts of the battery; the second is a novel material for the battery’s positive pole that can be adapted to a wide range of technical requirements, said scientists from ETH Zurich in Switzerland. The energy transition depends on technologies that allow the inexpensive temporary storage of electricity from renewable sources. A promising new candidate is aluminium batteries, which are made from cheap and abundant raw materials. As the electrolyte fluid in aluminium batteries is extremely aggressive and corrodes stainless steel, and even gold and platinum, scientists are searching for corrosion-resistant materials for the conductive parts of these batteries. Researchers have found what they are looking for in titanium nitride, a ceramic material that exhibits sufficiently high conductivity.

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Energy storage

Frost & Sullivan Consultants Release 6 Predictions that Will Shape the Global Energy Storage Sector in 2018

“This compound is made up of the highly abundant elements titanium and nitrogen, and it’s easy to manufacture,” said Maksym Kovalenko, a professor at ETH Zurich.

The scientists have successfully developed aluminium batteries with conductive parts made of titanium nitride in the laboratory. The material can easily be produced in the form of thin films, also as a coating over other materials such as polymer foils. Kovalenko believes it would also be possible to manufacture the conductors from a conventional metal and coat them with titanium nitride, or even to print conductive titanium nitride tracks on to plastic. “The potential applications of titanium nitride are not limited to aluminium batteries. The material could also be used in other types of batteries; for example, in those based on magnesium or sodium, or in highvoltage lithium-ion batteries,” said Kovalenko. The second new material can be used for the positive electrode (pole) of aluminium batteries. Whereas the negative electrode in these batteries is made of aluminium, the positive electrode is usually made of graphite. Now, Kovalenko and his team have found a new material that rivals graphite in terms of the amount of energy a battery is able to store. The material in question is polypyrene, a hydrocarbon with a chain-like (polymeric) molecular structure. In experiments, samples of the material – particularly those in which the molecular chains congregate in a disorderly manner – proved to be ideal. “A lot of space remains between the molecular chains. This allows the relatively large ions of the electrolyte fluid to penetrate and charge the electrode material easily,” Kovalenko said. One of the advantages of electrodes containing polypyrene is that scientists are able to influence their properties, such as the porosity. The material can therefore be adapted perfectly to the specific application. “In contrast, the graphite used at present is a mineral. From a chemical engineering perspective, it cannot be modified,” said Kovalenko. Although existing lithium-ion batteries are ideal for electromobility due to their low weight, they are quite expensive and therefore unsuitable for economical largescale, stationary power storage, researchers said.

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Integration of innovative business models and multiple revenue streams such as revenue stacking must be adopted nergy storage market is being swept by a wave of disruptive technologies and business models with companies looking to capitalize on this lucrative sector. Frost & Sullivan’s recent analysis, Global Energy Storage Market Outlook, 2018, finds that the total installed capacity will grow 15.9 percent between 2017 and 2018, and the top six countries (China, US, South Africa, Chile, France, and Israel) will complete installation of 1,369 MW of gridscale ESS projects in 2018. The study covers alternative energy storage technologies such as thermal energy storage, flywheel energy storage, compressed air energy storage, and supercapacitors and batteries that are used for renewable energy storage, as well as in consumer, industrial, and electric vehicles. Technology forecasts, applications, and regional trends (Asia-Pacific, Europe, and North America) along with key government initiatives, value chain analysis, and emerging companies are also provided.

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“In the alternative energy storage systems market, concentrated solar projects with thermal energy storage are rapidly gaining traction due to falling photovoltaics prices and proven storage technology,” said Utham Ganesh, Energy & Environment Research Analyst at Frost & Sullivan. “Solar and storage technology is widely becoming the preferred mode of energy storage in the global residential market.”

To gain a competitive advantage, Ganesh says players should focus on providing “energy storage-as-a-service” that can deliver value to businesses and mitigate financial obscurities. Six predictions that will unlock growth opportunities in the global energy storage sector:

• Global ESS installed capacity will grow by 20.4 percent in 2018. • Li-ion will remain dominant, with notable growth expected for flow bat• • • •

teries: While Li-ion continues to lead battery technology, flow batteries are increasingly penetrating the US and Asia-Pacific regions. New business models, such as the energy service company model, are emerging. Molten salt thermal storage market will dominate in 2018: Projects in China, Africa and South American countries will help continue this trend from 2017. Government incentives will drive growth: Subsidies will be vital in driving EV and residential systems, while utility-scale systems will begin to compete commercially with traditional peak power plants. Mergers & acquisitions trend: Energy companies are expected to continue acquiring or partnering with energy storage solution providers and unlocking new revenue streams.

“Energy storage is strongly dependent on energy policies and incentives. The current lack of clearly defined policies and inadequate financing will hinder energy storage project adoption,” noted Ganesh. Global Energy Storage Market Outlook, 2018 is part of Frost & Sullivan’s Energy & Environment Growth Partnership Service program.

June 2018

Energy storage

Stanford Researchers Present ManganeseHydrogen Battery as Candidate for Grid Energy Storage The market interest in high-capacity, safe, and low-cost energy storage has picked up as the increasing deployment of solar and wind generation produces surplus electricity that cannot be immediately consumed.

ecently, researchers at Stanford University in the US state of California have successfully devised a rechargeable, waterbased battery that has the potential to store vast amounts of electricity cheaply and safely. The Stanford research team is optimistic that this prototype manganese-hydrogen battery can evolve into an energy storage equipment that takes in electricity generated by renewable energies and feeds the power back to the grid when needed. While solar and wind generation technologies have become popular, the intermittency of these renewable energies creates the problem of sudden power surpluses and shortages. Hence, the need for an efficient battery system to fill the gap between the sources of generation and the grid has become critical. Currently, the lithium-ion battery is the mainstream rechargeable battery technology on the market with the widest range of applications. However, building a high-capacity energy storage system using lithium-ion batteries (as some dubbed it “lithium-ion battery plants”) is considered a costly venture. Furthermore, lithium-ion batteries lose their charge over time, so they have to be replaced regularly. This special industrial salt is actually manganese sulfate, which is commonly present in dry cell batteries, fertilizers, and paper products. Electrons in the solution will react with manganese sulfate, forming manganese dioxide at the electrode and hydrogen gas that picks up the excess electrons. The hydrogen can then be turn into electricity through other methods (e.g. burning or other chemical processes). Since the generation of electricity from hydrogen gas is no longer an engineering hurdle, the main challenge for the research team is to show that their prototype water-based battery can be recharged.

June 2018

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The Stanford team’s manganesehydrogen batty is regarded as a prospective grid-scale energy storage solution because it specifically addresses the issues of cost and lifespan. Yi Cui, who is a material scientist at the university and a member of the research team, explained that the manganese-hydrogen battery works by dissolving a special salt in water and inserting an electrode. The salt together with the water produces a reversible chemical reaction that stores electrons in the form of hydrogen gas.

When testing the prototype, the researchers re-attached the power source to the depleted battery and found that the reaction can be reversed in a stable process. During recharge cycle, the manganese dioxide particles at the electrode combine with water to become the manganese sulfate. The restoration of the salt again creates excess electrons that are stored as hydrogen gas. This process is repeatable, thus allowing the battery to be recharged frequently. The prototype battery, which represents the initial stage of the research, is about 7.6 centimeters tall and can generate 20 milliwatt-hours of electricity. This amount is just sufficient for an LED flashlight. Nevertheless, the Stanford team believes that their technology is scalable and can be applied to industrial grade energy storage equipment capable of achieving at least 10,000 times in

charge/recharge cycles and having a lifespan of more than 10 years. Based on the estimated lifespan of the prototype battery, Cui calculated that the cost of storing electricity needed to power a 100-watt lightbulb for 12 hours with the manganese-hydrogen battery would come to about USD 0.01. On the whole, the research data provided by the Stanford team show that this technology can meet the recommended standard set by the US Department of Energy for utility-scale energy storage systems (i.e. capable of storing/discharging at least 20 kilowatts in an hour, performing 5,000 recharges, reaching a lifespan of at least 10 years). Also, to make such a battery system practical in terms of cost, the entire system has to be at or less than USD 2,000, or USD 100 per kilowatt-hour for consumers of its power. Source: energytrend

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inverter

Sungrow India Road show Technical Seminar Sungrow, the global leading inverter solution supplier for renewable energy, kick off the second road show technical seminar of the year 2018 in Jaipur successfully with its unique Mobile showroom to better demonstrate its products and solar system itself.

he event demonstrates the important role that technology and innovation plays in the renewable energy, Sungrow India the event was held at the Marriot, Jaipur. The event, highlights the latest R&D in solar technologies and market-ready applications (in India and overseas) with focus on the role of Utility and String Inverters. The current market penetration and the prospect on becoming cost-effective in future. With a mission of “Clean power for all” & with a vision of become a global leader of power conversion technology, SUNGROW is always committed to optimize all kind of resources to better meet our customers needs. With such unique Road show technical seminar, we exchange knowledge and understand customer point of view to better serve for long run. Over 67 business partners, solar expert and media partners attended the seminar, with an eagerness and excitement to understand new things. And followed by networking evening, cocktail and dinner.

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June 2018

inverter

Why Mega Solar Projects Are Turning to String Inverters Across the globe, even the biggest solar PV projects are taking a fresh look at string inverters. Just a few short years ago, a large solar PV project could be considered anything well north of 100 megawatts. It’s a testament to how quickly and dramatically the global solar industry has grown that a large PV plant now measured in hundreds of megawatts, and increasingly, gigawatts.

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se of string inverters in U.S. projects over 5 megawatts in size is expected to grow more than fourfold over the next five years, according to GTM Research. In India, the use of string inverters for large-scale solar projects jumped from about 1 percent in 2016 to 9 percent in 2017, according to consulting firm Bridge to India. They project that that share will expand to 30 percent by 2020. Unlike central inverters, the same string inverter can be used on projects ranging in size from just 1 megawatt to 1 gigawatt (of course, the number of devices needed will differ dramatically). That sort of flexibility is especially important in ultra-competitive marketplace.

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Traditionally, developers of large-scale utility solar power plants always used large central inverters for a very understandable reason. “In the past, lower capex leaned toward central inverters for large projects,” said Sham Ramnarain, chief engineer of Huawei FusionSolar Smart PV Solution for North America. “With innovations and mass production in string inverters, that advantage now leans toward string inverters.”

June 2018

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developers and [engineering, procurement and construction providers] have to bid more projects and they have to bid more variations of projects. Customers are interested in looking at not only traditional and poly modules, but also bifacial and split cells, and there’s always interest in looking at fixed-tilt versus tracking,” said Bates Marshall, vice president and general manager of Huawei FusionSolar Smart PV Solution for North America, who notes that Huawei typically defines megaprojects as anything above 200 megawatts.

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inverter

Thanks to a massive ramp-up in production — led by Huawei, which GTM Research ranks as the largest inverter manufacturer in the world — the capex advantage of legacy central inverters has all but disappeared. Cost savings related to balance-of-systems outlays are also making string inverters more attractive for large projects. Because central inverters were long the standard for large solar developments, EPCs lacked a design methodology suited for string inverters. Huawei has developed a block design approach that divides projects into 3- to 4-megawatt sections, each integrated with a medium-voltage transformer.

he past you had to use different inverters for different project designs, and you’d have a file drawer full of designs and optimizations and tradeoffs,” added Marshall. “From a velocity and flexibility standpoint, giving EPCs the ability to rely on a string inverter as one universal building block that doesn’t change at scale is very appealing.” As much as flexibility is important, this transition to string inverters for solar megaprojects is primarily being driven by economics. Even before Section 201 tariffs were imposed, EPCs and developers faced enormous pressure to drive down project costs The tariff decision has only exacerbated those pressures, forcing EPCs and developers to scour the designs and equipment used in projects for savings. Just a few years ago, the capital expense of string inverters was a financial deal-breaker.

“You’d get a quote for the inverter and lay out the preliminary design and bill of materials. And when you looked at it in Excel, the stark reality of capex was staring you in the face,” said Marshall. “The typical three-phase string inverter was twice the price.”

The result of developing and encouraging best practices around design has driven down cost. “We have pulled out 3 to 4 cents per watt with block design and technologies like our cluster rack and integrated transformer to consolidate components, reduce wiring and improve quality,” said Marshall. In the North American market, EPCs generally walk away from projects once they’re built. But the long-term project owners reap the O&M cost benefits of string inverters; Marshall estimates a net present value economic benefit resulting from O&M savings of between 5 and 7 cents per watt. The use of cloud computing, artificial intelligence and data analytics also drives reliability improvements and cost reductions with megaprojects. String inverters can collect enormous amounts of data that can be analyzed in real time to pinpoint potential problems. “We can do things like smart IV curve monitoring to provide a very granular, string-level characterization of underperforming strings,” said Marshall. “It tells you that you have a string with broken modules or a string with partial shading. It differentiates one from the other, and your technician can get a text [message]…saying, ‘This string has shading, so bring the weed whackers to take care of it.’ No central inverter has this capacity.” All of these advantages that come from the use of string inverters in megaprojects are important because they deliver the lower levelized cost of energy that is required in utility-scale market. “They provide better economic outcomes that are necessary to meet more aggressive PPA requirements,” said Marshall. “That is where the rubber meets the road. Source : greentechmedia

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June 2018

ELECTRIC VEHICLES

The global electric-vehicle market is amped up and on the rise

China remains firmly in the lead on our Electric Vehicle Index. But other pockets of growing public- and private-sector commitment to these vehicles have emerged. By : Mckinsey

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ELECTRIC VEHICLES

ast year, for the first time, global sales of new electric vehicles (EVs)1 passed a million units (Exhibit 1), according to McKinsey’s Electric Vehicle Index (see sidebar, “What is the Electric Vehicle Index?”). Under the current growth trajectory, EV producers could almost quadruple that achievement by 2020, moving 4.5 million units, around 5 percent of the overall global light-vehicle market.

Pure electric vehicles (BEVs) currently make up 66 percent of the global EV market. BEV sales are growing faster than those of plug-in hybrid vehicles (PHEV). However, specific markets have very different powertrain preferences, which are influenced by regulatory actions, customer choice, and the availability of specific models.

Would you like to learn more about the McKinsey Center for Future Mobility?

owever, in an attempt to reduce spending on subsidies while still encouraging EV sales, the government recently communicated a change in the incentive policy. On the one hand, it raised the minimum range to qualify for any incentive to 150 kilometers (up from 100) and the energy-density requirement to 105 watt-hours per kilogram (up from 90). On the other hand, the subsidies for long-range BEVs (400 kilometers or more) rose by 14 percent, to 50,000 renminbi ($7,900). Monetary support for plug-in hybrid vehicles fell by around 8 percent, to 22,000 renminbi ($3,500). In absolute terms, China’s EV-sales performance is quite remarkable. Yet the adoption rate represents only 2 percent on a national level—a limited number of large cities (such as Beijing, Hangzhou, Shanghai, Shenzhen, and Tianjin) account for a majority of EV sales. Nonetheless, China’s positive market performance helped put the country in a strong, well-balanced position in McKinsey’s latest overall EVI rankings (Exhibit 2): it was outperformed only by Norway in the EVI market score and reinforced its leading position—ahead of Japan, Germany, and the United States—in the industry EVI analysis (the “supply” side of the equation). However, given ’s EV-battery economics, leadership in EVI scores comes at a price: China and Norway have some of the world’s highest levels of spending on consumer and supply-side subsidies, at the taxpayers’ expense.

CHINA SOLIDIFIES ITS LEADERSHIP POSITION IN EV SALES

he Chinese market expanded by 72 percent over the previous year in 2017, solidifying China’s leadership position in EV sales. The country now has a larger EV market—primarily BEVs—than Europe and the United States combined. With a sales share of around 94 percent, domestic OEMs currently dominate the Chinese EV market. Generous subsidies and tight regulation continue to drive much of the growth. Electric vehicles are exempt from license-plate lotteries and auctions in some Chinese cities, and this still plays an instrumental role in promoting EVs. After a successful pilot program in selected cities, the Chinese government decided last year to introduce green license plates for new energy vehicles (NEVs) across the country. At the end of 2017, the plates were rolled out to all provincial capitals and other selected major cities, with the remaining cities to follow in the first half of 2018. Car owners with these license plates will be eligible for preferential treatment. Furthermore, China’s national and local subsidies for electric vehicles are among the world’s highest, reducing consumer concerns about the comparatively high up-front cost.

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June 2018

ELECTRIC VEHICLES

comparison of EVI performance over time reveals that China has rapidly overtaken the United States and Germany in combined EVI scores. Exhibit 3 shows China and Germany occupying roughly the same position in 2014, for example. Yet by 2018, China had far outpaced Germany in both market and industry EVI scores. In the market EVI scoring, China improved through higher EV sales, significant monetary and nonmonetary incentives, a greater variety of models, and the investment intensity of the charging infrastructure. China also excelled on industry scoring, significantly increasing its EV production and component shares. Major restrictions on local content— especially approved battery suppliers—keep a large portion of China’s EV profit pool locally based.

Germany and Norway led growth in the European Union

urope’s EV market grew by nearly 40 percent from 2016 to 2017, albeit from a small sales base. A variety of factors contributed, such as the ongoing headwinds for diesel technology and increasing customer interest in EVs. Much of the regional momentum emerged in Germany, where the EV market more than doubled. That country is now Europe’s second-largest EV market, outperformed only by Norway. Excluding the Netherlands, where an incentive shift from PHEVs to BEVs led to a significant drop in overall EV sales, European markets underlined the regional growth trajectory. Norway’s EV sales-penetration rate reached 32 percent in 2017, and by December every second passenger car sold there was an EV. Norway stands largely alone in its massmarket embrace of electric vehicles, so it provides a realworld picture of future EV sales proportions that developed markets could experience over the next five to ten years. Exhibit 4 shows the four stages of a disruptive trend. Having reached a critical mass of EVs, Norway is clearly ahead of other countries—the EV disruption is inevitable. Most other countries are still in the first stage, except for China and Sweden, which have already advanced to the second: disruption is somewhat more clear, with EVs emerging as a validated model. The rollout of more attractive, better-performing EVs in key high-demand segments is another major driver for sales uptake, both in Europe and the United States. Nevertheless, at 27 percent, US growth lagged behind that of China and the European Union, since fuel prices remain low, reducing the operating-cost advantage of EVs.

June 2018

Likewise, the US Environmental Protection Agency recently announced that it would revise existing vehicle-emission standards (set by the previous administration), which require cars and light trucks to average more than 50 miles a gallon by 2025. It is still unclear what the new standards will look like, but the regulations, or the time frame for their adoption, will probably be relaxed. However, California and 12 states that follow its lead are determined to maintain stronger air-pollution standards than the federal government does. India is new to the EVI this year. Both EV market acceptance and EV industry dynamics are at an early stage: the EV-adoption rate is less than 1 percent and domestic OEMs are just starting to launch EV models. Although the government rolled out a new tax policy to encourage EV adoption, a clear strategic road map is still missing. Demand comes mainly from commercial owners and the public sector, and the country has almost no charging infrastructure. Since India’s carbon-dioxide levels from electricity generation are among the world’s highest, it also needs more renewable-energy sources for its EVs to achieve true “wellto-wheel” zero-emission status.

New models (and regulations) to stoke markets

Global automakers will reportedly launch approximately 340 BEV and PHEV models in the next three years, significantly reducing supply as a barrier to further market uptake. The OEMs’ increased attention mainly reflects tougher emissions targets, especially in China and Europe, and announcements that several countries, as well as cities around the world, will set end dates for the sale of diesel- and gasoline-powered vehicles. Norway, for example, wants BEVs and PHEVs to account for 100 percent of its new-car sales by 2025. California, France, and the United Kingdom have proclaimed that they will end sales of ICEs by 2040. China too seems to be developing a long-term plan to abandon vehicles powered by fossil fuels: a new EV policy, which will become effective by 2019, requires automakers to comply with a mandatory EV credit target. As a result, several international automakers announced new joint ventures with domestic Chinese brands to develop and produce numerous EVs together. Electric vehicles have made meaningful progress in several regions and countries as they passed the milestone of one million sales, in 2017. With demand rising and manufacturers ramping up production capacities, the market will continue to grow. Looking forward, the confluence of government action, greater attention by OEMs, rising customer acceptance, and ingenious suppliers could accelerate the segment’s profitability until the early to mid-2020s. Source: mckinsey

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ELECTRIC VEHICLES

Revenue for Sales and Installation of Electric Vehicle Supply Equipment Is Expected to Reach Nearly $36 Billion in 2027 While plug-in electric vehicle market is concentrated in home charging, energy demand is expected to shift more toward fleet, private, and public charging in the next decade

new report from Navigant Re search examines the global market for plug-in electric vehicle (PEV) charging equipment, providing forecasts for equipment sales, segmented by region, technology, access type, and location type, through 2027. By the end of 2018, over 5 million PEVs are expected to be on roads globally, and by 2027, that number is expected to increase more than 10 times. A PEV population of this size will require nearly as many charging ports, and these ports will need to be more capable and sophisticated, offering higher power capacities and smarter technology to relay vehicle and charger information. According to a new report from @NavigantRSRCH, annual revenue for sales and installation of electric vehicle supply equipment is expected to grow from $6.5 billion in 2018 to over $36 billion in 2027. According to the report, the current PEV market is heavily skewed toward home charging, however, over the next 10 years, PEV energy demand will likely shift more toward fleet, private, and public chargers. The market is also expected to see major investments from automakers, utilities, energy companies, and governments during the next few years, but for the long term, viable business cases will need to be developed for each charging segment.

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The report, EV Charging Equipment Market Overview, analyzes the global market for PEV charging equipment sales across four major use cases: home charging, private charging, fleet charging, and public charging. The study covers the major drivers for the charging market and analyzes the potential uptake of alternating current (AC), direct current (DC), and wireless EV supply equipment. Global market forecasts for charging equipment sales, segmented by region, technology, access type, and location type, extend through 2027. The report also assesses the key emerging market and technology trends and the competitive landscape. An Executive Summary of the report is available for free download on the Navigant Research website.

“The focus in the market is on increasing charging speed, with the rollout of ultra-fast chargers just getting underway, however, equally important developments are emerging in vehicle-grid integration and load management technologies,” says Scott Shepard, senior research analyst with Navigant Research. “These technologies seek to further improve the business case for plug-in vehicles through energy cost reduction and increase the number of chargers commercial property owners can add to parking infrastructure without additional investments to expand building electrical infrastructure.”

June 2018

TECHNOLOGY

Right technologies for FLOATING PROJECTS Floating solar PV (FSPV) plant, refers to an array of photovoltaic panels on a structure that floats on a body of water, typically a reservoir or lake. America, Japan, and China have all started the floating projects. India now also has a big plan for the floating projects. In 2017, SECI has announced 10GW plan for the floating projects. Many states are active in developing the floating projects on the surface of reservoirs, storage/irrigation ponds and lakes.

20MW FSPV plant in Hangzhou, China

FLOATING PROJECTS ARE BUILT ABOVE THE WATER, QUITE DIFFERENT FROM THE ONES BUILT ON THE GROUND OR MOUNTAIN, WHICH MAKES CHALLENGES OF THE SOLAR PROJECTS.

1500V SYSTEM: MORE BENEFITS OR RISKS? The 1500V system will reduce the safety and reliability of electrical system, while increase the voltage of DC (high DC voltage and multiple nodes are prone to generating DC arc),power induced degradation (PID), and other risks. The central inverter is not equipped with any residual current device (RCD). When the voltage is raised to 1500V, the safety of the system performance requirements is higher. Various from AC, there is no zero-crossing point for DC, in the event of leakage, it will cause a major accident. For floating projects, the risk increased as the higher humility. The string inverter, however, has short DC circuits and long AC circuits, a zero crossing point for AC arc, as well as an RCD. Therefore, the 1500 V system of the string inverter is safer.

How to maintain the DC combiner box? There are fuses in the DC combiner box. Nowadays, many ground-mounted projects using no string monitoring box which make the operation and maintenance (O&M) much more difficult and energy loss even harder to detect.

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TECHNOLOGY

Headache of communications. Traditional RS485 cables have a poor environmental adaptability and can be easily damaged by the stress pull caused by fluctuations on the water. When the RS485 cables are arranged together with power cables, they suffer interference. In special deployment scenarios such as wet environment, the RS485 cables are prone to damages, resulting in communication interruption. Itâ&#x20AC;&#x2122;s difficult to locate a fault when the RS485 cable is faulty, resulting in difficulties in fault identification and rectification. Engineering of the RS485 cable is complex, causing higher cable andlabor cost, especially in the floating projects.

20MW FSPV plant in Huaibei, China

PID effect is heavier in floating projects. Floating projects are located in high-humidity environment, causing heavier PID effect. This hush environment requires higher protect level of the components in the project. Therefore, in addition to requiring the components to have anti-PID capability, the system design also requires the inverter to have anti-PID function and higher protection capability.

Mismatch is higher in the floating projects. Energy loss is 1% caused by higherDC voltage and mismatch.The distance between the DC combiner box and inverter varies with the central PV system. The voltage drop (voltage difference) and lack of flexibility in inverter installation are likely to cause string mismatch. Besides, the higher the voltage, the more serious the string mismatch. The string inverter, however, can minimize the mismatch because two strings are connected to one MPPT.

Ingress protection requirement is higher for combiner box and inverters. The high temperature and humidity in India have brought challenges to theinstallation of electrical devices,such as the combiner box and inverter on the water surface. To ensure the long-term O&M stability, the combiner box and inverter must be protected to a higher level. But a large number of fuses are used in a combiner box for overcurrent protection. The string protection using fuses requires a large amount of preventive maintenance work. With the long-term operation, fuses are aged, resulting in fuse failures. According to statistics, the DC fuse failure rate of a power plant is significantly increased starting from the fourth year of use. Meanwhile, the traditional solutions adopt external fans for cooling. However, the protection class of fans is only IP44/54, indicating thatwater vapor outside can enter the box, affecting device reliability. In addition, external fans have various issues such as large noise, poor reliability, and high replacement and maintenance costs. Once a fan is faulty, the cooling capability of an inverter is greatly weakened.

2MW FSPV plant in Saga Prefacture, Japan

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June 2018

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TECHNOLOGY Therefore, higher standards are raised for floating projects. Huawei has the total solution by string inverters to resolve the attached concerns. Huawei has offered more than 200MW floating projects in China. One of the largest floating projects, 50MW FSPV plant was commissioned in March this year, which located on Huainan, Anhui.

FSPV plant in Singapore

THE UNIQUE TECHNOLOGIES OF HUAWEI SOLUTION ARE:

Multi-MPPTs decreasemismatch loss due to DC voltage drop Taking Huawei SUN2000-70KTL string inverter for example, each 1 MW has 88 MPPTs. The energy yield drop of one string due to shading does not affect other strings. In this way, the energy yield loss brought by string mismatch is effectively reduced and the system efficiency is improved. The simulation analysis by PVsyst suggests that the mismatch loss due to DC voltage drop in a 2 strings in 1 MPPT circuit solution is about 0.1% less than that in a 100 strings in 1 MPPT circuit solution.

440KW FSPV plant in Sumiyakiike Parkin Chikuzen, Japan

Less DC, more AC Huawei inverter can be installed close toPV modules, which leads to shorter DC cable and prevents DC arcing.Short circuitsor grounding faults are likely to generate electricity leakage and electricity shocks. Faults on the DC side could easily cause the inverter to generate alarms and shutdown. Supposing a 1 MW central inverter shuts down due to a fault on the DC side, the energy yield loss is far more than the loss of a 70 kW string inverter. The string inverter is small in size and light in weight. The inverter is prepared as a spare device onsite, facilitating installation and maintenance. The system reliability is improved and energy yield loss is reduced, earning more interests for plant investors.

Zero-touch maintenance : no fuse requirement and IP65 protection Huawei string inverter adopts the closed cover design. Protected to IP65,it is highly anti-corrosive and adaptable to high temperature and humidity.By removing damageable components, integrating complex functions, and removing components and operations that require maintenance, the smart PV power plant has a simple overall architecture. The smart PV power plantuses Huawei Smart PV Solution supports 25-year reliable and maintenance-free running. Huawei inverter is at the IP65 protection class and supports isolation between internal and external environments, so that components are running in a stable environment, and impacts caused by external environments such as temperature, wind, and salt spray on the component lifetime are reduced; the system is not equipped with any damageable components, or any components that need to be replaced periodically such as fuses and fans, thereby achieving maintenance-free; all of the components and system adopt a 25-year reliability design and lifetime simulation, and also pass strict verification tests. Therefore, system components do not need to be replaced within the entire lifecycle and can reliably and economically operate.

FSPV plant in Aichi Prefecture, Japan

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TECHNOLOGY

PLCC (Power Line CarrierCommunication) : replace the RS485 communication cables, integrate the signal into power line, cutting workload and expense of cable routing, as well as reducing line loss on signal transmissions hence improving data transmission efficiency. After the PLCC technology is introduced to replace the RS485 solution, the transmission rate is greatly increased from 9.6kbit/s (a maximum transmission rate supported by RS485 cables is only 19.2kbit/s) to 200 kbit/s. In terms of construction, the PLCC technology uses AC cables as channels without additional cable arrangement, saving costs on communication cables and engineering by 0.01 RMB/W. By using AC cables as channels, the PLCC technology has a high reliability. When a component is damaged, you only need to replace the faulty component, which provides excellent maintainability. Therefore, the PLCC technology can both save communication cable costs and improve the reliability.

Unique IV curve scanning The complex onsite environment of floating plants poses challenges to troubleshooting and fault locating. The inspection outside the PV plant can be performed on a boat, but the inspection inside PV arrays can only be conducted on foot, which is inefficient and difficult. Huaweicutting-edgeSmart I-V Curve Diagnosis locates problematic PV strings and analyzes the root cause almost instantly by using Huawei big data technologies such as data mining and pattern recognition, reducing testing costs compared to traditional methods. In most centralized power plants, it is hard to detect string faults, and the loss of electric energy yield cannot be compensated. Based on the high-precision string-level detection of the smart PV controller, the system can detect faults in a timely manner. By analyzing databases, the system can accurately locate a specific faulty device and propose handling suggestions based on preset measures and O&M experience.

Anti PID solution, virtual grounding The power degradation of PV modules brought by PID greatly impacts the return on investment. Huaweipatent Smart Anti-PID technology provides Anti-PID module in SmartACU, implement positive voltage across PV- and ground to safely prevent PID effects in the daytime, and Huawei string inverter integrated Smart Anti-PID module can inject voltage+ to PVat night, recover power loss during daytime. This prevents + recover solution can perfectly reduce power loss by PID effects and earn more interests for plant investors.

FSPV plant in Aichi Prefecture, Japan

Higher energy yield : 2-3% more compared to central inverters Taking a floating PV plant in Jiangsu, China for example, two 1 MW sub-arrays with the same structured layout and tilt are selected. One adopts the 500KTL central inverter of a particular brand, and the other adopts the SUN200050KTL-C1 string inverter. Both of them connected to the power grid in August, 2017. A comparison of their energy yields in October shows that Huawei inverter yields 3.22% more of the power than the other brand with a clearcut advantage. All in all, Huawei FusionSolar Smart PV Solutionperfectly fulfills the requirements for constructing floating PV plants in India, and promotes the healthy and rapid development of the country's floating PV plant technologies.

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1MW FSPV plant in Jiangsu, China

June 2018

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RENEWABLE ENERGY

From black gold to green power Many of the world’s largest oil companies are, once again, investing in renewable energy assets. This time, they appear to be here to stay.

BEN WARREN

EY Global Power & Utilities Corporate Finance Leader

June 2018

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RENEWABLE ENERGY

he oil and gas sector is, once more, looking beyond petroleum. Over recent months, several of the world’s largest oil companies have acquired a variety of companies and projects that have nothing to do with extracting, refining or distributing hydrocarbons — but that are set to thrive in the low-carbon transition. In January, Royal Dutch Shell (Shell) agreed to buy 44% of Nashville-based solar project developer Silicon Ranch Corporation for up to US$217m, the latest in a string of clean energy acquisitions as part of its plans to invest between US$1b and US$2b in “new energies” each year until 2020. BP has committed US$500m a year to the space, and in April set out its low-carbon ambitions in a report, Advancing the energy transition. In December BP spent US$200m on a 43% stake in Lightsource Renewable Energy, Europe’s largest solar developer. France’s Total acquired solar photovoltaic cell maker SunPower back in 2011, and has more recently cut three deals: in 2016 buying elgian gas and green power supplier Lampiris and French battery maker Saft; and taking a minority stake in solar and hydro generator EREN Renewable Energy last year. Italy’s Eni has set a target of 1GW of installed renewable energy capacity by 2021, while Saudi Aramco is reportedly considering up to US$5b of renewable energy investments.

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“oil” from its name, and proposes to call itself Equinor. The change reflects “the global energy transition and how we are developing as a broa energy company,” says CEO and President Eldar Sætre.

orway’s Statoil has invested heavily in offshore wind and, in one of the more eye-catching signs of the sector’s reinvention, plans to drop This follows Denmark’s DONG Energy changing its name to Ørsted, reflecting its move from oil and natural gas into renewables. We’ve been here before. In 2005, following its earlier “Beyond Petroleum” rebranding, BP announced plans to invest US$8b in solar panel manufacturing, wind power, carbon capture and storage (CCS) and biofuels, a target it met by 2013. However, by then it had exited its CCS projects and solar investments, writing off a “significant proportion” of its investments, a spokesman says. So, what’s different this time? Growing concern about climate change — from society in general, and from long-term shareholders in particular — has forced oil companies to think about the implications of a transition to a low-carbon economy. Motivations include concerns about future demand for transport fuels, growth opportunities in lowcarbon technologies and diversifying into power generation to secure demand for natural gas.

June 2018

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RENEWABLE ENERGY

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“Investors want to understand what climate change means for the business models of oil companies,” says Carole Ferguson, Head of Investor Research at CDP, an investor-led initiative that provides a platform for environmental disclosure and research. Referring to the Paris Agreement target of keeping global warming less than two degrees Celsius above pre-industrial levels, she adds: “They want companies to explain how they are positioned for a two-degree world.” Indeed, shareholders have forced a number of oil majors to produce reports setting out how they are positioned to respond to tighter climate policies and declining demandhydrocarbons.Indeed, shareholders have forced a number of oil majors to produce reports setting out how they are positioned to respond to tighter climate policies and declining demand for hydrocarbons.

June 2018

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“There are plenty of questions facing our industry,” said Shell CEO Ben van Beurden, speaking at a global energy conference in Houston in March. “But I believe the biggest of them is climate change. … There is no other issue with the potential to disrupt our industry on such a deep and fundamental level.”

any analysts argue that oil companies are beginning to see the writing on the wall in terms of oil demand. For example, BP’s latest energy outlook in February forecast that oil demand will peak in the mid 2030s, as electric vehicles (EVs) take a larger share of the transport mix. This growing concern with long-term demand coincided with a period of low oil prices since late 2014, which weighed upon the economics of oil and gas.

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“A lot of people started wondering, ‘Is this the end of super-margins?’ ” notes Rick Wheatley, EVP new growth and Director of the leadership vanguard at Xynteo, based in Oslo. “If oil and gas is starting to look like a lowermargin production business, the blinders come off, and people start looking around for other sources of growth.

hey need growth and, at the moment, oil and gas is showing less of a growth rate than renewables. This is creating nervous shareholders. They are asking how these oil and gas companies will be able to match returns of the past based on these scenarios.” He adds: “If these companies wish to continue to attract investors and capital, they need to develop a proposition that is consistent with long-term projections that show demand declining.” Looked at in terms of both returns and growth, renewables can provide that proposition. Whereas oil company investments in renewables at the turn of the century were speculative bets in immature technologies and markets, ’s investments are, by and large, in proven technologies, many of which are creasingly cost-competitive without subsidy. And they are growing fast. The base-case scenario for energy market growth to 2035 from oil industry analysis firm Wood Mackenzie sees primary energy demand for oil growing at just 0.5% per year, compared to average annual growth rates of 6% for wind and 11% for solar. As might be expected, oil companies are adopting different strategies in response. Shell and Total have been most aggressive among the oil majors, with both making acquisitions across the electricity value chain.

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RENEWABLE ENERGY

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” Examples of recent and planned clean energy investments by oil and gas majors “There’s great uncertainty about the future,” says Antonios Panagiotopoulos, a Senior Associate at index provider and investment analytics firm MSCI. As well as investing in equipment makers and renewable energy generation,Total is increasing its presence in the retail gas and power, initially in France, with the €1.6b (US$2b) acquisition of gas and electricity retailer Direct Energie, announced in April, its latest move. Total may buy or build gasfired power plants to meet demand created by such a business, it has said.

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Shell, too, is making a play for power. Speaking in van Beurden said: “Power is the fastest growing segment of the energy system. We see opportunities in different parts of the power value chain and an additional opportunity through the integration of these parts.”

Alongside new fuels, power is one of the two focus areas for the company’s New Energies business. It, too, is entering the retail market, with the acquisition last December of First Utility, a UK-based energy provider. After Shell and Total, companies such as BP, Statoil and Eni make up a second tier of oil companies that are making investments in the renewables sector, but on a smaller scale. Statoil is leveraging its strength in offshore oil and gas with substantial investments in offshore wind: it operates farms in the North Sea, and is developing projects in the Baltic and off the US coast. CEO Sætre has said publicly that the company expects to allocate 15% to 20% of its investment spend to renewables by 2030. Eni is developing solarprojects in association with its oil and gas assets in North Africa, Ghana and Pakistan, as well as a solar energy business aimed atItaly’s industrial customers. BP, meanwhile, is investing around US$500m a year in low-carbon businesses, with around US$200m channelled through its corporate venture capital arm in a wide range of low-carbon technologies. “With this venturing the idea is to make a number of relatively small bets to try to understand the landscape a lot better,” says a spokesman. “The expectation is that some of these options can be scaled up.” However, not all oil companies are yet convinced by the renewable energy generation business case. North American firms have, thus far, largely avoided investments in renewable power, although they have invested in improving efficiency, developing carbon capture technology and in early-stage research.

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art of the reason is the make-up of their portfolios, observes Valentina Kretzschmar, Director, Corporate Research, at Wood ackenzie, explaining that US firms tend to be more exposed to low-cost US tight oil and shale. “This gives them a lot of comfort” that, even in a low oil-demand scenario, they can expect to remain profitable. She notes that they also have the financial wherewithal to quickly acquire significant market share inclean energy, if required. or oil companies that are making green investments, a criticism from both environmentalists and some concerned shareholders is that these are mere fractions of overall investment. “They are taking small steps — these investments are not hugely significant in dollar terms,”

says Andrew Grant, Senior Analyst at the Carbon Tracker Initiative, a think-tank focusing on climate change and the capital markets. “But they are representative of the direction of travel … I don’t think it’s greenwashing — they are trying to take genuine steps, and I think they deserve an assumption of good faith. There are, however, questions as to whether oil and gas companies are well positioned to transform their businesses — and, indeed, whether their investors would want them to. “Investors are used to making returns of around 20% from their investments in oil and gas companies,” says Grant. “For a renewable energy project, you’re looking at returns [to investors] in the range of 6% to 8%, although admittedly those returns are much more stable over time.” Kretzschmar at Wood Mackenzie argues that some investors with shorter-term views believe that oil majors risk “leaving value on the table” by investing in lower-returning renewable energy projects. “At the moment, oil and gas still makes more money, and committing more money now to renewables would be bad news for shareholders.”

HOWEVER, ANALYSIS BY WOOD MACKENZIE

“ These investments are not hugely significant in dollar terms. But they are representative of the direction of travel.” JON CLARK EY Oil & Gas Transactions

June 2018

RENEWABLE ENERGY

uggests that about 20% of investments that oil companies plan to make in theoretically high-yielding, upstream growth projects — which should return 18% on average — will return less than 10%, assuming the price of oil remains around US$65/barrel. This is in line with internal rates of return from onshore wind and solar projects, which Wood Mackenzie pegs at 10%. Meanwhile, longer-term investors are concerned about the lowcarbon transition, and are supportive of moves to diversify and decarbonize oil companies’ portfolios, says Kretzschmar. Jon Clark, Partner, UK&I and EMEIA Oil & Gas Transactions Leader at Ernst & Young LLP, argues that diversification into renewables represents a rational refocusing of oil companies toward what their market needs, rather than simply focusing on what they have traditionally supplied. By positioning themselves for an evolving energy market, oil companies are

June 2018

looking to futureproof their businesses. “Oil and gas companies are trying to take a market perspective rather than a supply perspective,” says Clark. “Historically, the assumption was that, if we can find the supply, someone will buy it. Now, it’s about finding a route to market. “Investing in renewables is just another source of energy to meet demand. Companies are thinking more about the market than about production.” Clark adds: “Investors in big oil tend to look for the dividend stream, and dividend streams are supported by a robust market for your product.” However, some observers question whether oil companies have the skills needed to compete in a very different energy market. “Companies do have some skills that translate, such as in offshore, or in geothermal,” says Grant at Carbon Tracker. “But certainly their workforces are likely to be more motivated by megaprjects.” Offshore wind definitely provides opportunities in terms of scale,

technological complexity and attractive returns. “A company like Shell will want to get involved with large-scale assets that fit within their skills base,” says Ferguson at CDP. “We’re talking about large-scale projects where a company like Shell can make the sort of returns they want to make, and are comparable to their current asset base.” “Offshore wind hasn’t come down the learning curve as much as onshore wind, and it’s expensive,” says Ferguson. That provides opportunities for oil and gas companies to apply their technical expertise in offshore operations to bring down costs and thus earn attractive margins, she says. In some regards, argues Clark, oil giants’ investments in renewables are a continuation of their traditional strategies of ongoing investment and diversification. “These big oil companies are individually spending tens of billions of dollars of capex annually. Each year, it’s a fair bit of reinvention.”

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RENEWABLE ENERGY

SEEING THE LIGHT

Clark adds that many oil companies are engaged in very different technologies than 20 years ago, citing the US shale revolution. “It’s not as if these companies have been doing the same thing for decades — they’ve changed a lot as their markets have changed.” But it is early days, he says. “Although we’re talking about quite big amounts of money, as a percentage of what they are spending on capex every year, it’s quite small. It’s not a strategic pivot — it’s more of a strategic toe in the water.” Assuming that oil companies move beyond this “toe in the water” phase, just how enthusiastic buyers of renewable energy businesses are oil companies likely to become? For its analysis, Wood Mackenzie calculates that the oil majors would need to spend US$350b on renewables by 2035 to replicate their 12% share of the world’s oil and gas production. This figure is around a quarter of the US$1.5t the majors need to invest to maintain their upstream oil and gas volumes by the same date. The company considers this “an unlikely scenario.” Nonetheless, the sector is potentially a large investor in renewables in the future. Could this new source of demand push up prices? Kretzschmar is skeptical, pointing to the high degree of capital discipline that low oil prices have imposed on the oil companies. “There is huge competition for capital, and the oil companies remain very focused on disciplined capital allocation — the markets would be very quick to punish any move away from that.” And a strategy of diversifying into renewable energy isn’t without its risks for oil and gas companies, observes Clark. “Are they trying to compete [for renewable energy investments] with entities with a much lower cost of capital?” such as pension funds, he asks. Given that interest in clean energy has been, to some extent, spurred by low oil prices, might oil companies lose interest if the crude price continues to recover? Wheatley at Xynteo acknowledges that this is a risk, but also notes that a backlog of projects has built up over recent years. “Every time the oil price increases by a dollar, it triggers new supply — and the long-term demand picture is relatively stable … . The more realistic people in the industry are less confident now about the more optimistic forecasts of a long-term future of increasing oil demand and prices.” While the direction of travel is clear, the speed of the journey is less so. “The future is very uncertain,” says Clark. “Will EVs have 5% of the market, or 35% in quite a short period of time? The reality is that no one knows the answers. The strategic response is to either pick what you think the answer is, and go for it, or you create optionality in your portfolio. That’s something oil companies have always done.”

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By Nick Boyle’s own admission, the CEO of Lightsource did not expect BP to become an investor: “I’ll be honest, it was a surprise to us.” However, when its advisors began the process of seeking a substantial investment in the UK-based solar energy developer and operator, it became clear that strategic investment from an oil company would make more sense than from a financial investor. “The oil majors showed the most rounded understanding of the art of the possible with PV [photovoltaic],” Boyle says. Since its creation in 2010, Lightsource has commissioned 1.3GW of solar capacity and manages approximately 2GW of capacity under long-term operations and maintenance (O&M) contracts. A return to solar by BP might raise eyebrows, given its unhappy history with the technology. But while its previous investments in PV were in solar manufacturing in western countries — a business that came to be

dominated by low-cost Chinese producers — Lightsource is a very different proposition. “ The tie-up with BP has attractions for a young company such as Lightsource, says Boyle. He cites three: BP’s brand and presence in more than 90 countries, offering marketing reach and local connections; BP itself is a large electricity user; and the footprint it has n industries such as mining and rports. He adds: “Having solar as another string to their bow is massively valuable. They are being asked by these organizations, ‘Have you got solar as part of a composite solution?’ Solar is a very cheap technology when you need electricity at the point at which it’s created.” Finally, the BP investment in growing Lightsource’s development business will help accelerate the business’s growth. “It’s not why we did the deal, but it’s certainly nice to have,” Boyle says.

June 2018

RENEWABLE ENERGY

Rates on the rise With interest rates on the turn, the time of cheap capital may be coming to an end for renewables developers. What does this mean for the sector?

or renewable energy developers seeking financing, it has been a time of plenty: with considerable demand among investors for renewable energy assets, there has been plenty of capital available — and often at attractive terms. “There’s no shortage of money out there for the construction of assets,” says Paul Corrigan, who leads Mainstream Renewable Capital, the financing arm of developer Mainstream Renewable Power. Since the financial crisis, quantitative easing programs from the world’s leading central banks have helped to ensure commercial banks are awash with liquidity, while low interest rates have encouraged institutional investors out of low-yielding government and investment-grade corporate debt and into more esoteric asset classes, such as infrastructure, looking for healthier returns. “From the equity point of view, we’re seeing a greater level of competition, which manifests itself in some instances in improved pricing. In debt, while pricing levels have held up, the terms of financing have generally improved,” says Corrigan. His firm is raising capital for projects in emerging markets such as Chile, South Africa, Vietnam and the Philippines. This competition has seen traditional project finance banks being joined by institutional investors such as pension funds and insurance companies, either participating through specialist funds or, increasingly, investing directly. Investors and project finance banks are now prepared to lend earlier in the cycle — and to move out of home markets — in a search for better returns. The declining cost of capital has helped reduce the cost of power generated by renewable energy assets. But with interest rates beginning to rise from historically low levels, and quantitative easing programs tapering off, this trend also may be

coming to an end. Indeed, some analysts are warning that the end of cheap funding poses risks for renewable energy developers. “The price of operational assets and even those in construction has been pushed up — the reason for that is the availability of capital, in particular debt,” says Matthew Huxham, a consultant at the Climate Policy Initiative. “Lenders have become increasingly willing to lend larger proportions of an asset’s value in debt — higher gearings, lower coverage ratios and weaker protections to lenders. ” Given that financing for most project construction is of shorter tenor than the life of the asset, most asset owners will be exposed to the risk of having to refinance at higher rates, Huxham says.In addition, as interest rates rise and more conventional investments begin to pay higher returns again,

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“there is also likely to be less feverish demand from non-specialist institutions for infrastructure equity and debt,” he says. “We are certainly very watchful of the interest rate cycle starting to turn, and that’s beginning to have an impact on the longerdated interest rates that matter to us,” says Mark Dooley, Global Head of Green Energy at Macquarie Capital. “With competitiveness around the price of power, government subsidies ebbing away, and the pressure on pulling all the numbers together, the optimization of cost of capital becomes a huge focus,” says Dooley. However, while change is coming, there are shock absorbers built into the system. Since the financial crisis banks have built in considerable margin between the rates charged by central banks and the interbank rates at which they lend. “The relationships between central bank cash rates and the cost of project finance is a loose coupling,” Dooley says. “The all-in cost of term project finance hasn’t followed cash rates all the way down and can absorb some monetary tightening before we see a material impact.” Also, longerterm lending is typically hedged in the interest rate swap market, which has priced in rising rates, notes Corrigan.

June 2018

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RENEWABLE ENERGY

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There is also inertia in capital allocation decisions, ays Ian Berry, Head of Infrastructure Equity at Aviva Investors, the fund management arm of the UK financial services giant. “Often, there is a significant lag for illiquid asset pricing versus liquid market pricing,” he says, with long lead times both for investors to make allocations to a sector and then for managers to deploy capital.

“The fundamental change is that the infrastructure market used to be dominated by commercial banks. Borrowers are in a privileged position where they can choose from bank financing and direct institutional lending.” In addition, some borrowers are pursuing innovative approaches to financing, further adding to the pool of potential investors.

For example, Glennmont Partners last year listed a bond on Borsa Italiana to help refinance a portfolio of Italian wind turbines. By listing a rated bond, some investors unable to invest directly in projects were able to participate in the refinancing. “What we’re seeing is a blurring between classic project finance and bond finance, which is helping non-banks toenter the space,” says Joost Bergsma, CEO and Managing Partner at Glennmont Partners.

A tougher operating environment ... means that developers and investors need to remember the basics.

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One reason for the abundance of capital is that lending to renewables is becoming increasingly mainstream, says Corrigan. “For many of these investors, renewables is no longer an alternative asset class.” This means they are unlikely to withdraw capital from the sector wholesale.

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The growing number of institutional investors active in infrastructure debt and competition between various types of capital provider is likely to continue, says Alejandro Ciruelos, Managing Director, Project & Acquisition Finance, Santander Global Corporate Banking.

Huxham at the Climate Policy Initiative, meanwhile, is promoting a new structure called the Clean Energy Investment Trust, which would repackage renewable energy project cash flows to make renewable energy project investing more attractive to riskaverse institutions. However, innovations such as bond financings are likely to be of less use for smaller developers, says Carol Gould, Head of Power and Renewables at the Japanese bank Mitsubishi UFJ Financial Group (MUFG). Some smaller developers struggle to benefit from competition among lenders, she says, due to the fact they tend to have fewer banking relationships and may be too small to attract direct funding from institutional investors.

t’s not economical putting together an institutional investment tranche for a 30MW onshore wind farm, when the bank market may be more flexible,” says Gould. “It’s only really going to be most beneficial for large portfolios of onshore wind or solar, and for offshore wind projects.” In anticipation of conditions getting tougher for developers, Dooley at Macquarie sees export credit agencies (ECAs) becoming increasingly important in financing deals. ECAs offer guarantees against loans that serve to reduce the regulatory capital that banks are required to hold against their lending to a particular project. “The trading banks love lending against ECA guarantees: it’s a nice capital story for them,” says Dooley. “It has a magnifying effect on the appeal of your transaction to the debt market … it creates price tension.” Many investors are looking for as much certainty as they can get on future revenues.

“The key thing when we’re investing in renewables is we like to mitigate or manage merchant risk,” says Jason Cogley, a Managing Director at Fiera Infrastructure, a Canadian fund management company. “We’re invested in projects with long-term power purchase agreements (PPAs) with reputable counterparties, such as utilities, where we have 20-year visibility on fixed pricing.” “There is an increasing opportunity for institutional investors, either through debt funds or direct mandates, because there is still a very small number of banks who will lend long-term,” says Berry at Aviva Investors. “If you’re looking at lowerrisk assets, such as most renewables, there’s a really good fit with the requirements of long-term institutional investors.” Moreover, iven the growing sophistication of institutional investor teams, particularly regarding mature renewables technologies, there is less need for bank involvement in structuring transactions, he adds.

June 2018

RENEWABLE ENERGY

BEN WARREN EY Global Transactions

But investors need to be wary, warns Cogley. “There’s certainly a perception that there is a low-risk operating environment for these kinds of assets, but things can go wrong, gear boxes can fail, solar inverters have failed,” he says. “It’s not like investing in bonds: these are real assets and there can be issues to manage. Investors in those projects need to ensure they have adequate resources, both in terms of partners that they’ve subcontracted to, and within their investment teams as well.” A tougher operating environment also means that developers and investors need to remember the basics, argues Andy Harmer, Projects Investment Director at Equitix, a UKbased project developer and investor. “That involves looking closely at the technology itself, the EPC [engineering, procurement and construction] contractor that will wrap that, the contractor that will operate the plant, the strength of the covenants, the quality of the fuel supply agreements, pricing and length, with all of that backed up by a well thoughtout due diligence exercise.” Harmer adds: “The most important thing is discipline.” “A rising interest rate environment may well prove to be the subtext to a more fundamental shift in renewable energy and wider infrastructure financing and M&A,” says Ben Warren, EY Global Power & Utilities Corporate Finance Leader. “In the last few years, capital allocations toward infrastructure have increased exponentially, which, in the relative absence of new greenfield projects, has currently led to an overheated secondary market for assets in more mature markets like the UK. “With fund managers struggling to justify an ever-decreasing return to their investors, more bullish pricing assumptions around economic life, inflation, technical performance, operating costs and refinancing upsides, to name a few, have increasingly become the differentiators between winning and losing bids for assets.” Warren says: “As the underlying cost of capital starts to creep up, it will be interesting to see whether a more prudent approach is adopted to valuations, and indeed whether investors show signs of generally pricing risk more conservatively. The short-term squeeze on investment margins will certainly cast a spotlight on the performance of investment managers that goes beyond the volume of capital they manage to deploy.” n

June 2018

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RENEWABLE ENERGY

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June 2018

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RENEWABLE ENERGY

European Parliament seeks higher targets The European Parliament has proposed that the EU increases its 2030 renewable energy target to 35% of gross final energy consumption, higher than the 27% target agreed by the 28 EU Member States in December. MEPs also voted to raise the energy efficiency goal to 35% below projected consumption levels by 2030, compared with the 30% goal agreed by Member States. Renewables groups welcomed Parliament’s vote in January, with WindEurope calculating it would lead to an additional €92b (US$113b) of investment in the sector. In a study for the European Commission, the International Renewable Energy Agency said such a target would be “cost effective and realizable,” and would provide health benefits from lower pollution and an annual 0.3% boost to the bloc’s GDP. The Parliament was voting on elements of the European Commission’s Clean Energy for All Europeans package, unveiled in November 2016. The proposal will now be the subject of negotiations between the Commission, Parliament and member states, which are unlikely to be concluded before June at the earliest Meanwhile, prices in Europe’s carbon market have risen to their highest levels since 2011, in response to reforms to the EU Emissions Trading Scheme that will address a persistent over-supply of allowances. Prices briefly breached €14 (US$17) per tonne of carbon dioxide in March, as polluters and speculators snapped up allowances, anticipating higher prices in future.

June 2018

Neighbors begin to catch up with South Africa South Africa’s Department of Energy signed 27 renewable PPAs, worth ZAR56b (US$4.7b), on 4 April, ending two years of delays that had raised questions over the future of the country’s landmark renewable energy procurement program. State utility Eskom had stalled on the contracts, which Eskom executives said did not meet its needs for despatchable power at peak times. The decision is seen as a victory for South Africa’s new Government headed by Cyril Ramaphosa, which is aiming to be more business friendly than its predecessor. However, investors are increasingly looking beyond South Africa as renewable energy development ramps up in the region, supported by development banks. South Africa’s 11-rank fall in this RECAI index reflects continued uncertainty around new future projects resulting from the continued push-back from the coal sector and metal industry worries around possible job losses and power price increases. Other countries could provide an easier short-term route to

market for developers. The Scaling Solar program is developing more than 1.2GW of solar power cross Zambia, Ethiopia, Madagascar and Senegal. In Senegal, the National Agency for Renewable Energies has announced that construction is to begin on a 150MW solar plant, with partial operations beginning in 2019. Elsewhere in west Africa, Ghana’s President has set a target of ncreasing utility-scale solar capacity from 22.5MW at present to 250MW by 2030 and also plans to install 200,000 rooftop solar systems and 55 mini-grids. The African Development Bank is committing significant resources to renewables. Last year, all of its investment in the power sector was directed to renewable energy technologies, with 1.4GW of projects approved. The bank has pledged to invest US$12b in the power sector by the end of 2020, with the aim of leveraging between US$40b and US$70b per year.

Dutch offshore auctions go to zero

Pakistan plans 1.2 GW auction

Sweden’s Vattenfall has won two zerosubsidy offshore wind tenders, securing the rights to build 700MW of capacity off the Netherlands coast. The Hollandse Kust Zuid I and II wind farms are expected to be completed by 2022; if they go ahead as planned, these would likely be the first subsidy-free offshore farms to become operational, ahead of farms to be built off the German coast by Ørsted by 2024. The Dutch Government will provide connections to the grid, reducing project costs. They follow the publication, last October, of the latest Netherlands’ National Energy Outlook, produced by the Energy research Centre of the Netherlands (ECN) and Statistics Netherlands on behalf of the Government. It says that renewables accounted for 6% of the energy mix at the end of 2016, up from 1.6% in 2000. However, it also projects that this is set to reach only 12.4% by 2020, below the EU target of 14%, although it says this figure will rise to 16% by 2023, reaching the national target of 16% by that point. The report notes renewables could provide half of all Dutch power by 2025, although growth is likely to be much slower in renewable heat and biofuels.

Pakistan was due to hold its first auction for renewable energy capacity in April, as this edition of RECAI was going to press. The Pakistan Government is seeking 600MW of wind projects in Sindh province, and 600MW of solar plants in Punjab province, the chief executive of the Alternative Energy Development Board told Bloomberg. If successful, the auctions would double Pakistan’s renewable energy capacity. The projects are to be developed on a build, operate and transfer basis, with a likely concession period of 15 years. The National Transmission & Dispatch Company will build transmission lines to the wind projects.

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RENEWABLE ENERGY

US solar tariffs likely Boost for renewables International from Italian energy developers win Brazil to boost utility-scale wind contracts strategy That sets out how it plans to meet a target of 28% renewable energy by 2030, up from 17.5% at the end of 2015, and that pledges to phase out coal by 2025. Agreed last November, the Strategia nergetica Nazionale (SEN) will require an additional 40GW of capacity. Italy will also double its 2013 budget for R&D in clean energy to €444m (US$545m) in 2021. Under the SEN, coal is set to decrease while renewables increase to supply 55% of electricity by 2030, compared with 33.5% in 2015, while renewable heat will rise to 30% from 19.2%. Renewable sources will supply 21% of transport fuels by that date, up from 6.4% in 2015. The strategy is expected to lead to new Government largescale tenders, as well as boosting subsidyfree solar development. For example, UK’s Octopus began operating 63MW of subsidy-free solar plants in the country, and successfully refinanced them in January. Meanwhile, Italy’s secondary market in ubsidized solar assets is also expected to recover, as the risk of solar plants having their incentives withdrawn has reduced. The regulator, the Gestore dei Servizi Energetici, had the power to withdraw 100% of subsidies from plants where it discovered technical irregularities or mistakes in ocumentation.An amendment to the 2018 budget law requires more proportionate sanctions.

Brazil contracted 1.4GW of wind capacity at its latest tender in December — the first contracts won by wind projects since 2015. Enel, Iberdrola and EDP Renováveis were among the biggest winners for tenders, with bids averaging R$98.62/ MWh (US$29.25/ MWh) — a record low for wind bids in Brazil. The projects are due to come onlinen 2023, giving time to resolve the tranmission constraints that deterred wind developers bidding in recent tenders. However, the fiercely competitive bid prices do also raise the specter of potential undeliverability. Low demand forecasts and currency issues could also impact roll-out. The tender followed the announcement in November that the Inter-American Development Bank had agreed to lend BNDES, Brazil’s development bank, US$900m to support the financing of renewable energy projects in the country. Most of the loan will be directed toward wind projects and should finance around 600MW of capacity. A multitechnology A-4 auction also took place in April. Appetite was very strong with more than 50GW of applications and just 1GW awarded. Meanwhile, Brazil’s solar generation has recently reached 1GW, putting Brazil among the top 30 countries in the world in terms of solar capacity. Brazil aims to meet 45% of its total energy demand with renewables by 2030.

Solar import tariffs imposed by the US Government in January are likely to have nly a limited impact on solar energy development in the country, but are likely to tip the scales toward wind projects at the utility scale. In January, the Trump administration imposed tariffs on imports of solar PV cells and modules set at 30% (lower than eared), declining by five percentage points each year before ending after four years. The first 2.5GW of imports each year will be exempt. The tariffs will initially increase the cost fresidential systems by around 3% to 4% and utility-scale projects by 10%. This is likely to provide a near-term boost to wind rojects, which have recently struggled to compete in some technology-neutral renewable energy tenders from US utilities. A reduction to wind’s Production Tax Credit as part of the Tax Reform Bill was also pared in December. However, the solar tariffs — which are to be challenged under World Trade Organization rules — are neither expected to seriously derail US solar investment, nor encourage much, if any, shifting of solar manufacturing back to the US. Given recent price falls in solar, the tariffs raise costs only back to 2016 levels; according to analysts they have also not been set at a level or duration that could underpin investment in domestic solar manufacturing.

Thailand ramps up renewables Renewable energy projects totaling 1.8GW of capacity are to begin construction in Thailand this year, according to the country’s Energy Regulatory Commission. Due to be operational by 2019, the projects involve total investment of around THB96.9b (US$3.1b), and will contribute toward the country’s 25% renewables target by 2021. More than half of the capacity will come from wind projects, with 150MW from solar farms, 80MW from waste-to-energy and 40MW from biomass. A further 300MW will be developed under a new hybrid renewable PPA scheme, which requires operators to maintain fixed output at times of peak demand, through the use of battery storage capacity potentially combined with multiple renewable technologies.

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June 2018

RENEWABLE ENERGY

Betting on blockchain Blockchain has the potential to transform how renewable and distributed energy is managed and traded. However, the technology is not without its challenges. Samuel Pachoud, Stephen Church and Thierry Mortier explain how it might be deployed — and how incumbents can prepare.

June 2018

or most people, blockchain issynonymous with Bitcoin, the volatile cryptocurrency that promised investors a one-way bet before crashing dramatically. But facilitating cryptocurrencies such as Bitcoin is only one of many uses for blockchan technology, including some with the potential to help rapidly accelerate the take up of renewable energy. Blockchain allows its users to create a secure online ledger, stored on a number of “nodes,” on which they can write timestamped blocks of data, protected using encryption through electronic signatures. Entries to the database are permanently recorded, and are impossible for a single user to alter. The innovation is thatsuch a secure, transparent database allows users to enter into transactions or contracts without needing to rely on trusted third parties, such as lawyers, banks or exchanges. There are an enormous number of ways blockchain can be applied, beyond creating and tracking electronic currencies such as Bitcoin. The technology has been used to track ownership of assets, record and manage financial trades and oversee supply chains. Parties can use blockchain to enter into “smart contracts” under which trades, payments or other transactions may be automatically triggered by specific events. Blockchain’s value emerges where there is a need to share validated information between parties, where some or all of the following factors apply: significant counterparty risk; extensive manual processes; significant reconciliation activity; distributed databases; and an absence of trust between participants. Deployment of blockchain technology across the energy value chain is accelerating. According to data from Greentech Media, the first blockchain transaction around energy took place in April 2016; there are now 122 organizations involved in blockchain energy technology, and 40 deployed projects. It has tracked US$300m in transactions between the second quarter of 2017 and the end of January 2018.

For most people, blockchain is synonymous with Bitcoin, the volatile cryptocurrency that promised investors a one-way bet before crashing dramatically. But facilitating cryptocurrencies such as Bitcoin is only one of many uses for blockchain technology, including some with the potential to help rapidly accelerate the take up of renewable energy. Blockchain allows its users to create a secure online ledger, stored on a number of “nodes,” on which they can write time-stamped blocks of data, protected using encryption through electronic signatures. Entries to the database are permanently recorded, and are impossible for a single user to alter. The innovation is that such a secure, transparent database allows users to enter into transactions or contracts without needing to rely on trusted third parties, such as lawyers, banks or exchanges. There are an enormous number of ways blockchain can be applied, beyond creating and tracking electronic currencies such as Bitcoin. The technology has been used to track ownership of assets, record and manage financial trades and oversee supply chains. Parties can use blockchain to enter into “smart contracts” under which trades, payments or other transactions may be automatically triggered by specific events. Blockchain’s value emerges where there is a need to share validated information between parties, where some or all of the following factors apply: significant counterparty risk; extensive manual processes; significant reconciliation activity; distributed databases; and an absence of trust between participants. Deployment of blockchain technology across the energy value chain is accelerating. According to data from Greentech Media, the first blockchain transaction around energy took place in April 2016; there are now 122 organizations involved in blockchain energy technology, and 40 deployed projects. It has tracked US$300m in transactions between the second quarter of 2017 and the end of January 2018.

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It is a paradox that an energy-intensive technology like blockchain is being used to promote green energy.

Tesseract: accelerating the EV business case Another example is a pilot venture between EY and Gasunie, which has developed a blockchain system to create and authenticate green energy certificates. The system creates an encrypted token each time a green energy producer supplies power into the grid, with blockchain recording transaction details. There are, however, three issues facing those seeking to deploy blockchain more widely. The first lies with its novelty. Consumers, particularly, will need to become comfortable entrusting payments to systems using the new technology. While blockchain’s encryption and distributed architecture are designed to make the technology secure and robust, greater real-world operating history will be needed to reassure customers that their data, systems and transactions are safe. Second, it can be energy intensive. The processing power, and therefore electricity, required to create cryptocurrencies such as Bitcoin is considerable. Some cryptocurrencies are less energyhungry than others, energy efficiency can be improved and renewable energy deployed — but a paradox nonetheless exists in terms of using a relatively energyintensive technology to facilitate green energy penetration. Third, interoperability is a concern. Insurgent companies, particularly, tend to develop their own unique systems. As they scale or are acquired, these will need to be linked with those of competitors or acquirers. The risk is that the very challenges faced by existing large players — numbers of legacy assets that must be expensively integrated — will be faced down the line by blockchain pioneers.

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One answer to concerns around interoperability is companies working together in consortia. This poses its own challenges: such alliances tend to be slow-moving, and the companies involved can often be wary about how much information they give up to potential competitors. But one response to both these chal enges — taking a “wait-andsee” approach — is no answer either. The technology is developing quickly, and insurgents and incumbents alike are developing applications and business models that threaten to disrupt the existing energy landscape. Companies need to begin experimenting with blockchain, to start to understand its potential in their existing business and its potential for new applications. That experimentation and understanding needs to take place at the highest level of the company. It is not sufficient for the lockchain conversation to be delegated to the IT department, or for it to become a project of an ambitious junior — blockchain has to be on the C-suite agenda. Channing Flynn, EY Global Technology Industry Tax Leader, says: “To date, blockchain has transformed only people’s thinking. We don’t yet even know all the questions blockchain technology will raise, much less the answers. But waiting for the technology to take hold is too late. Now is the time to start defining the questions and influencing policy that will lead to answers.”

Electric vehicles propose profound challenges to manufacturers, charging infrastructure operators and consumers alike. Car companies need to develop expertise in lithiumion battery technology. Infrastructure operators will require significant capital expenditure, with unclear usage patterns and business cases. And consumers must accept the fact that EVs currently have a higher upfront cost than internal combustion engine (ICE) vehicles. The EY Tesseract platform is a blockchain technology pilot intended to address these problems. Its core idea is the “disaggregation” of the EV, providing different entities with economic exposure to the vehicle, the battery and charging points, and using blockchain to track use, charging and the associated payments. The platform has the potential to transform batteries from a depreciating asset with no revenue stream to an investable asset providing steady income. In doing so it ould make EVs cheaper, and shift customers’ costs from upfront to ongoing charges (although they would likely be lower than ICE running costs). Finally, it would better spread the investment necessary into charging points, and, by increasing EV uptake, it would increase their utilization. As a prototype, Tesseract is ready for in-market experimentation. We are in the process of selecting a lead client with whom to work to prove the business hypothesis. For more information, contact Philipp Schartau, Advisory Director, Innovation & Growth at Ernst & Young LLP, at pschartau@uk.ey.com.

June 2018

RENEWABLE ENERGY

Plugged in? Australia may be on track to meet its 2020 targets, but its renewables roll-out has shone the spotlight on storage. It is a paradox that continues to baffle many Australians: how can a country blessed with an abundance of energy resources have some of the highest power prices in the world and still suffer from periodic blackouts? Much of the answer lies in a lack of clear, long-term policy on climate and energy that balances Australia’s commitments to carbon emission reductions with energy affordability and reliability. Despite this policy uncertainty, Australia has seen substantial deployment of utility-scale and distributed renewable energy over 2016, the country’s Clean Energy Regulator estimated that, for the 2020 target to be reached, 6GW of new renewable energy capacity had to be committed through to the end of 2018. Investment over the last two years means that the 2020 target is likely to be met (see figure). However, this flood of new renewable capacity has not been without issues. In addition to the physical impact on power system security, large volumes of intermittent renewables have pushed some baseload capacity

June 2018

out of the market, contributing to increased ower price volatility in the wholesale market, which ultimately flows through to customers as higher retail tariffs. Meanwhile — and despite the growth in renewables — Australia’s greenhouse gas emissions grew in 2016-17 for the third year running. Australia’s Federal Government has responded with a proposal that seeks to address the “energy trilemma” by balancing the competing priorities of an electricity system that is reliable, affordable and green, and has, for the first time, developed a draft policy that brings together energy and environmental issues. Its proposed National Energy Guarantee (NEG) places obligations on retailers and some large users to either sell or consume energy that is reliable while meeting emission targets. It does this by setting reliability targets in each region to drive the right level of dispatchable energy based on local conditions, and an emissions target that will be set by the Government.

The Government maintains that the NEG will not only increase the reliability of the grid and help Australia meet its climate targets, but would also bring down wholesale and retail prices. A comprehensive consultation process is currently underway to guide the final design of the NEG. To date, most industry participants have expressed support for the policy certainty that the NEG could provide, but have raised the importance of ensuring the policy is administratively workable and does not negatively impact the transparency of the contracts market that operates alongside the physical market in Australia. Regardless of the progress of the EG, attention in Australia is increasingly turning to energy storage as a crucial means of addressing issues around intermittency and delivering reliability as the grid decarbonizes. As a result, Australia has been the source of a number of high-profile battery storage project announcements. For example, South Australia was the venue for one of Tesla CEO Elon Musk’s recent public announcements: a pledge to install a 100MW/129MWh battery system within 100 days, or deliver it for free. Tesla met the challenge, and the Hornsdale Power Reserve project (pictured above) began operating in December 2017.

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The project can power 30,000 homes for up to an hour in the event of a blackout, but is more likely to be called into action to even out electricity supplies at less critical times. And, compared with gas-peaking plants, it can switch quickly from charging to discharging — managing to switch state at least 14 times during a four-hour period. While there is a large volume of distributed storage linked to solar in the residential market, the Tesla project is the largest lithium-ion grid-scale battery in operation in Australia, and has attracted considerable interest in terms of how it interacts with the local power market. The learnings are likely to influence the size of subsequent projects, which technologies they use and the commercial arrangements needed to make them economically viable.

There are also regulatory implications. “Australia’s energy laws were based on a traditional view of large, centralized generators selling electricity to retailers for on-sale to end-use customers,” says

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Cara Graham, Partner, Power & Utilities, Transaction Advisory Services, at Ernst & Young — Australia.

“Rulemakers had to make updates to those laws to recognize the increasingly significant role that batteries are playing in the energy market, which is complicated by the fact that batteries can display characteristics of both generation and load depending on whether they are charging or discharging.”

The success of the Hornsdale installation — and the need for energy storage to grow amid increasing renewables penetration — has encouraged a number of other developers to come to market with proposed projects that include battery storage components. For example, Tesla and the Government of South Australia announced plans to link residential solar PV and battery systems across 50,000 homes to help balance the grid – which would become the world’s largest virtual power plant. In addition, at least two more traditional energy storage projects — hydro plants that pump water uphill when power prices are low, to release it to generate power at peak times

— are under consideration. The Snowy 2.0 project in New South ales would see the Australian Government fund an increase in its generation capacity by up to 2GW to provide approximatly 350,000MWh of energy storage. On the island of Tasmania, Hydro Tasmania is promoting plans for its Battery of the Nation project, which would provide up to 2.5GW of pumped storage, linked to mainland Australia by an undersea interconnector. However, as new technologies and the economics of distributed energy solutions improve, some observers question whether these two mega-projects, which will cost billions of dollars and take many years to complete, offer a sensible way forward in a quickly evolving market. Certainly, Australia is at the leading edge in terms of how industrialized economies can come to grips with the challenges of integrating high levels of renewable energy penetration. According to recent research conducted by EY, together with one of the world’s leading global analyst houses, in 2021 it will become the first country to reach the first of three new-energy tipping points — where off-grid energy reaches cost and performance parity with grid-delivered energy. The country has the potential to be a pioneer in developing the solutions to problems of intermittency and grid stability. The ongoing question for investors and developers is whether policymakers can set the scene for them to confidently place the right bet.

June 2018

RENEWABLE ENERGY

A change

in the weather

It’s been a case of feast followed by famine for renewable energy developers in Poland over the last few years. After dramatic growth in 2016, when renewables jumped from meeting 10.7% of final energy consumption to 12.3%, the market came to a juddering halt last year. That pause puts Poland on course to miss its EU renewables target of 15% by 2020. However, hopes are high for a revival: a new prime minister has voiced support for investment in renewables; and the next ound of the annual UN climate talks is planned to be in Katowice, at the heart of Poland’s coal country, in December. Investors could be forgiven for being wary. Following its election in 2015, theconservative Law and Justice party introduced its 2016 Act on Investments in Wind Farms, which effectively killed new wind farm development by a requirement that no new wind farm could be established if existing buildings are closer than a distance equal to 10 times the height of its turbines. The act also increased real estate taxes on onshore wind installations, imposing a financial burden on wind farms that were already suffering from the loss of revenues from the green certificate system, introduced in 2005 as a key support for renewables. Changes to its rules increased supply and reduced demand, leading to prices sliding 90%between 2012 and 2017. In addition, last year a number of state-owned energy companies either terminated PPAs or insisted on renegotiating terms. At least one developer, US renewables group Invenergy, is demanding US$700m compensation via international arbitration. By some estimates, around 70% of Polish wind farms lost money last year. High levels of debt taken on by developers means there is a significant degree of distress in the market, with banks looking to offload wind

June 2018

farm exposure. International investors are on the hunt in the country for existing assets but depressed prices mean developers that don’t have to sell are holding out. The result was that just 36MW of new wind energy capacity was added in Poland in 2017, compared with around 1.5GW in 2015. Last October, the country dropped out of the RECAI Index, having been at 34th place in May. However, market participants are hopeful that the outlook for the sector may be about to improve. With Ecofys calculating that Poland is likely to meet no more than 13.8% of final energy consumption from renewables by 2020, the Polish Government is under growing pressure to demonstrate how it plans to fill the shortfall. In February, a consultation began on mendments to the Renewable Energy Sources Act, which, among other things, could reintroduce the earlier real estate tax rates, and offer more favorable uilding permits for projects acquired prior to the 2016 legislation. The consultation also gives details of renewable energy auctions for 2018, offering tenders for new and large onshore wind farms up to a total capacity of 1,000MW. The auctions are part of a program that began at the end of 2016 with a total budget of €9.4b (US$11.6b) up to June 2021. Successful bidders with installations above 500kW win premium payments above the electricity market price, while installations below that threshold can apply for a feed-in tariff. The program was given state-aid clearance by the EU in December. There is also potential for growth in biomass, offshore wind and solar. Biomass plants have the potential to benefit from payments via the new capacity market — legislation for which was passed by the lower house of parliament in December and approved by the EU in February. Although it is designed to incentivize coal-fired power, biomass

plants could also qualify for payments if they do not benefit from dedicated renewable energy support. potential to deploy up to 4GW of capacity by 2030, according to the Warsaw-based Foundation for Sustainable Energy (FNEZ). It says local suppliers are in a strong position to service a domestic offshore wind industry, given their existing success in providing components to the sector across Europe. However, FNEZ adds that deploment will depend upon a stable regulatory framework and financial support. The sector received a boost with the news, in March, that Norway’s Statoil is taking a 50% stake, alongside Polenergia, in two early-phase offshore projects, with a planned capacity of 1.2GW. Some growth is also expected in solar, as costs continue to fall and grid parity is achieved. A couple hundred megawatts of capacity per year are expected to be installed by 2020, according to recasts from Greentech Media. Large orporates may also provide a new ource of demand. A number of multinational consumer products companies, with commitments to source renewable power, have manufacturing plants in the country; these companies are now seeking PPAs to meet these commitments. Furthermore, Poland is se to benefit from EU efforts to help coal-dependent regions diversify. In December, the European Commission launched the Coal Regions in Transition Platform to address the social and economic effects of the low-carbon transition. The growth of the country’s wind energy industry — which already represents an export success story — can only encourage the Government to provide greater support to domestic renewable energy generation.

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Turning to the sun The Government of Egypt has long had big plans for its renewable energy sector. Back in 2008, it set a target of reaching a 20% share of renewables in the country’s energy mix by 2020, corresponding to 10GW of installed capacity. As of 2018, however, barely 1% has been achieved, largely due to an unsuccessful first round of its feed-in tariff program in 2014. But the Government has learned from its setbacks, and investment and plans are beginning to accelerate. In common with many countries in the region, Egypt is keen to tap substantial wind and solar resources to reduce energy subsidies — which currently consume a third of the national budget — and lower generation costs. Its first FiT round aimed to secure an initial generation of 2,000MW of wind and 2,000MW of solar capacity. However, investors were deterred because the Government insisted on using domestic resolution for any contract disputes, and because of high risks of currency devaluation and repatriation. The resulting very limited availability of financing meant only three projects achieved financial close. The second round has proved more attractive to developers due to two main factors. First, the Government agreed to allow dispute resolution to be governed by the Cairo Regional Centre for International Commercial Arbitration, providing the required level of comfort to international developers. Second, currency risk

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has been reduced by lowering the minimum foreign currency funding from 85% of the project cost in the first round to 70% for solar and 60% for wind, addressing developers’ concerns about volatility in the Egyptian pound. In addition, 30% of solar and 40% of wind FiT payments are fixed at a rate of EGP8.88 to US$1. The Government also provided stateowned land at discounted prices or free of charge, and ruled that developers ould join more than one consortium provided they are the majority equity interest holders in only one of them. Other tax and custom duty incentives were provided.On the other hand, the second round has seen a significant drop in tariffs due to global and regional price competition. This resulted in developers coming under pressure to manage their costs and negotiate lower-risk premiums with lenders (see table). Nonetheless, the second round saw 30 projects achieve financial close in ctober 2017. The round will result in approximately 1,390MW of solar capacity being developed, compared with the Government’s plan to allocate 2,000MW. One notable project benefiting from the FiT program, the Benban Solar Park in Aswan, is set to become the world’s largest solar park, eventually comprising 30 plants, generating 1.5GW, at a total cost of US$2b. However, the Government has still struggled to attract commercial banks, with most of the financing provided by development finance institutions.

For example, theInternational Finance Corporation has agreed to finance 13 of the projects through its US$653m Nubian Suns FiT Financing Program, while the European Bank for Reconstruction and Development is funding 16 projects as part of its US$500m Egypt Renewable Energy Financing Framework. In addition, the Multilateral Investment Guarantee Agency provided US$210m n political risk insurance to 12 projects. This funding helped bring international developers to the Egyptian market, including EDF of France, Spain’s AC IONA Energia, Norway’s Scatec Solar and Saudi Arabia’s ACWA Power. In addition to the FiT program, other renewables projects have been veloped, or are planned. Since 2001, a series of utilityscale wind farms have been established, with total capacity of 50MW, in cooperation with German development bank KfW, the Danish nternational Development Agency and the Japan International Cooperation gency. Current wind developments include a 540MW project under construction in the Gulf of Suez, a 580MW project in the same location that is in financing and a feasibility study for a 200MW project west of the Nile. In January the state-owned Egyptian Electricity Transmission Company invited prequalification bids for 600MW of build, own and operate solar capacity in the Minya and Aswan regions west of the Nile. It received 18 responses from developers. Other developments include a 500MW utility-scale solar PV project at Kom Ombo. Despite the acceleration in progress, international developers and funders remain wary of political and currency risks. Further investment mechanisms are required to provide a higher level of protection to developers and lenders. It would be to the benefit of the Government of Egypt to offer the right support to attract the best developers and commercial lenders to achieve its ambitious renewable energy targets.

June 2018

RENEWABLE ENERGY

US overtakes India on Renewable energy country attractiveness index despite rising protectionism

hina tops the latest Renewable energy country attractiveness index (RECAI) for the third time consecutively, with the US and Germany overtaking India, which falls from second to fourth position. The UK and the Netherlands are notable climbers (to positions seventh and ninth respectively), while Taiwan re-enters the bi-annual top 40 ranking.

{ Mr. BEN WARREN, EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor,

“Rising interest rates are likely to increase the cost of cheap capital that has underwritten the dramatic roll-out of renewable energy capacity over recent years. Government subsidies for clean power are being reduced around the world and financiers are anticipating tougher times ahead for project developers. However, movements in the Index suggest that these developments are just headwinds as the renewable energy sector continues to mature and markets expand.”

• US climbs to second place in the ranking notwithstanding tariffs on solar imports • India concedes second position due to investor concerns • Rising cost of capital may place renewable energy sector under strain

he 51st issue of the RECAI highlights the trend for rising protectionism across the renewable energy sector. India’s 2022 solar power target looks increasingly over-ambitious amid investor concerns, in response to the threat of a 70% tariff on imported solar panels and low power bids. And in January of this year, the US imposed tariffs on imports of solar PV cells and modules set at 30%. However, RECAI points to the resilience of the US market, which climbs from third to second position as the solar tariffs are mostly absorbed and wind projects are not subject to subsidy cuts under the recently passed US tax reform bill. Despite a large fall in renewables investment in 2017, the UK climbs three places to seventh position with the market adapting to subsidy-free solar PV, onshore wind projects and moves to repower old wind farms. Rapid expansion of renewables sees the Netherlands climb from 15th to 9th position since the last Index was published in October 2017. Re-entering at 31st position, Taiwan has returned to the top 40 for the first time in two years as the government announces its intention to go nuclear-free and takes action to increase renewables to 20% by 2025 – with a particular focus on offshore wind projects. Warren says:

“While the current economic climate has driven a relentless focus on costs, that focus is paying dividends with the global cost of electricity from renewable sources falling year-on-year. Combined with the plunging cost of battery technology, we anticipate further rapid growth of the evolving renewable energy sector in the coming years.”

{

The latest RECAI also explores the trend for many of the world’s largest oil and gas companies to increasingly make significant investments in low-carbon energy. But while the Index points to concerns around climate change and the rise of electric vehicles (EVs) as drivers for longterm ambitions to invest in renewable energy, the pace of transition among oil majors remains uncertain. Source: ey

June 2018

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RENEWABLE ENERGY

‘Renewable industry created 500,000 plus jobs in 2017 globally’ The renewable energy industry created more than 500,000 new jobs globally in 2017, a 5.3 per cent increase from the previous year, with India and China among the largest employers, an International Renewable Energy Agency (IRENA) report said

umber of people employed in the sector, including large hydropower, now stands at 10.3 million globally, surpassing the 10 million figure for the first time, said the fifth edition of Renewable Energy and Jobs – Annual Review, launched at IRENA’s 15th council here. China, Brazil, the US, India, Germany and Japan remain the world’s largest renewable energy employers, representing more than 70 per cent of all industry jobs globally. Although growing numbers of countries are reaping the socio-economic benefits of renewables, the bulk of manufacturing takes place in relatively few countries and domestic markets vary enormously in size. Sixty per cent of all renewable energy jobs are in Asia, the report said.

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“Renewable energy has become a pillar of low-carbon economic growth for governments all over the world, a fact reflected by the growing number of jobs created in the sector,” IRENA Director General Adnan Z. Amin said in a statement.

“The data also underscores an increasingly regionalized picture, highlighting that in countries where attractive policies exist, the economic, social and environmental benefits of renewable energy are most evident.” “Fundamentally, this data supports our analysis that decarbonisation of the global energy system can grow the global economy and create up to 28 million jobs in the sector by 2050,” Amin added. IRENA is a global inter-governmental organisation with 155 countries and the European Union and an additional 24 states in accession, supporting countries in their transition to a sustainable energy future.According to the report, the solar photovoltaic (PV) industry remains the largest employer of all renewable energy technologies, accounting for close to 3.4 million jobs, up almost nine per cent from 2016 following a record 94 gigawatts (GW) of installations in 2017.China was estimated to account for two-thirds of PV jobs — equivalent to 2.2 million — representing an expansion of 13 per cent over the previous year.Despite a slight dip in Japan and the US, the two countries followed China as the largest markets for solar PV employment in the world.India and Bangladesh complete a top five that accounts for around 90 per cent of global solar PV jobs.Jobs in the wind industry contracted slightly last year to 1.15 million worldwide. While wind jobs are found in a relatively small number of countries, the degree of concentration is lower than in the solar PV sector.China accounts for 44 per cent of global wind employment, followed by Europe and North America with 30 and 10 per cent, respectively.Half of the top 10 countries with the largest installed capacity of wind power in the world are European.“The energy transformation is one of improving economic opportunity and a rise in social wellbeing as countries implement supportive policies and attractive regulatory frameworks to fuel industrial growth and sustainable job creation,” IRENA’s Policy Unit head Rabia Ferroukhi said. Source : IANS

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June 2018

RENEWABLE ENERGY

The government is unlikely to accept SoftBank’s demand to fix tariffs in dollars or to give a central guarantee to buy electricity from its plants, dampening founder Masayoshi Son’s proposal to invest a staggering $1trillion by 2030.

fficials said after the Dabhol fiasco, in which Enron was granted similar assurances, the government is unlikely to expose state utilities to foreign exchange risks, which is also not in line with the tariff policy. Further, they said, assurance to purchas. Son met PM Narendra Modi a few days ago. He also met power minister RK Singh and senior officials of the power and renewable energy ministries to present his proposal. Officials in the power and renewable energy ministries said they would study the proposal and that no decision had been taken. A senior official, however, said it was unlikely the government would accept the conditions. In 2015, SoftBank had committed $20 billion along with Foxconn Technology Group and Bharti Enterprises to set up 20 GW (20,000 MW) solar power capacity in India. The consortium currently has 950 MW capacity — of which 350 MW is commissioned and 600 MW is in the pipeline — won through solar auctions. The currency risk for dollar-denominated PPAs falls on the government, which may be the stumbling block in the deal, as the government will try to avoid it, officials said. However, the government is considering the proposal and has ‘neither accepted nor rejected’ it, sources said.

“As an investor, SoftBank is seeking to reduce its cost, otherwise you have to add around 6% to your finance cost. Because someone has to take the risk, here they want the government to take the risk,” Some western countries have in the past offered dollar-denominated tariffs in solar projects to attract investments. Former power minister Goyal had also explored awarding solar power projects through dollar-denominated tariff-based bidding. The idea was shelved when solar tariffs fell sharply and the rupee weakened against the dollar. Under dollar-denominated tariff bidding, state power distribution companies seek supply bids in dollars for 25 years.

June 2018

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SoftBank’s mega investment plan may not soften up government

The investment proposed by Soft-Bank is more than the funds required to meet the 100 GW solar energy target by 2022. Former power and renewable energy minister Piyush Goyal had said the total investment required would be around Rs 6 lakh crore ($89.88 billion) going by the current cost of Rs 6 crore per mw.

SIMILAR OFFER This is not the first time a company has offered such an investment to India. In the late ’80s, China Light & Power had offered to supply power at 3 cents (dollar-denominated tariff) for 25 years. In hindsight, India’s decision to reject the proposal turned out to be prudent, considering the currency risk. A dollar equalled Rs 32 then, compared with Rs 67 now.

“SoftBank is looking to secure its investments. Asking for dollar-denominated tariffs is one way since finance is the biggest cost in setting up a solar plant,” a senior power ministry official said.

The national tariff policy, however, does not allow for passing on foreign exchange fluctuation risks to distribution companies.

“Appropriate costs of hedging and swapping to take care of foreign exchange variations should be allowed for debt obtained in foreign currencies.

This provision would be relevant only for the projects where tariff has not been determined on the basis of competitive bids,” the policy states. The guarantee on offtake of power that SoftBank has asked for is not a concern, officials said. “Once you sign a PPA, offtake of power is automatically guaranteed,” an official said. Power minister RK Singh could not be reached immediately for an official statement.

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RENEWABLE ENERGY

The future of renewable energy in India With the right investments in green technologies, India is well positioned to achieve renewable energy targets. The pursuit towards cleaner energy will have a crucial role in enabling the country’s transition to a fully sustainable energy system.

th 300 clear sunny days, over a dozen perennial rivers and a coastline of more than 7,500 KMs, India since the age of Puranas, had realised the importance of the sun and other sources of renewable energy and the power they possess for the benefit of its inhabitants. Post-Independence, India’s first Prime Minister, Shri Jawahar Lal Nehru while inaugurating the Bhakra Nangal Dam (having a potential to generate 1500 MW of Power) described it as the ‘New Temple of Resurgent India’. However, except hydro power, the other two abundant energy resources – wind and solar remained untapped in the last 70 years mainly due to lack of political will and unviability of relevant technologies. This fact is not hidden from anyone that India is the world’s fourth-largest carbon emitter with its population of 1.3 billion people with power sector contributing majorly to the same. But in the recent years, India has made significant strides in the renewable energy space. The Climate Change concern across the Globe has further propelled the Government and Decision Makers to develop a detailed blue print for clean and sustainable power for all. As part of the initial commitments to the Paris Climate Accord, India plans to reduce its carbon emission intensity – emission per unit of GDP – by 33-35% from 2005 levels over 15 years. It is working towards producing 40% of its installed electricity capacity by 2030 from non-fossil fuels. This would lead to a significant shift from coal-based power generation to renewable energy sources. To achieve these challenging statistics, it has to produce 100 gigawatt from solar, 60 gigawatt from wind, 10 gigawatt from biomass and 5 gigawatt from small hydropower

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by 2022. And this seems quite an uphill task as the renewable energy development in India is still in its nascent stage. As per the Ministry of Power, Govt. of India, India’s energy mix is evolving slowly with fossil fuels meeting 82% of demand; Coal remaining the dominant fuel with a 57.9% share of total production in 2018. However, there is also a silver lining behind the dark cloud, with the share of coal in the energy mix projected to fall to 50% by 2040, while the share of renewables rises significantly. Renewables will overtake gas and then oil by 2020 as the second largest source of energy production. As per the International Energy Agency’s (IEA) Renewables Report, Solar and Wind represent 90% of the country’s capacity growth, which is the result of auctions for contracts to develop power-generation capacity that have yielded some of the world’s lowest prices for both technologies. The country, which presently has low conventional energy resources in comparison to the energy needs of the huge population and the swiftly growing economy, can foster the enormous potential of solar energy. Under the leadership of Prime Minister Narendra Modi India is committed towards the development of renewable energy infrastructure. The 175 GW target for 2022 and the formation of ISA led by India and France is another example of the same. Apart from solar, the country is also exploring hydro power potential in the north-eastern states which are an abode to the hydro power opportunities. Besides the above, change in the energy mix will also ride upon innovative technologies, growing energy demand, strong wind and solar resources, policy support, and grow-

ing investments et al and will ensure smart, reliable, clean and affordable energy to over a billion people with an energy consumption growth of 4.2% p.a., faster than all major economies in the world, overtaking China as the largest growth market for renewable energy by the late 2020s. Another research by University of Technology (LUT) in Finland expounds that India has a huge potential to move into a fully renewable electricity system by 2050, owing to an abundance of renewable resources. If only we can optimally leverage sophisticated technologies to harness proactive collaboration with the industry, academia and energy innovation ecosystem, the region can move straight to affordable renewable systems. Such renewable energy systems can works mainly on clean energy, solar energy, wind energy and other new age storage solutions. Solar photovoltaics is the most economical electricity source and batteries satisfy the night-time electricity demand. In addition to covering India’s electricity demand for power, such system simulation can also cover for seawater desalination and synthetic natural gas beyond other measures.

Authors : PRAVEER SINHA MD & CEO, Tata Power

June 2018

RENEWABLE ENERGY

With the right investments in such green technologies, India is well positioned to achieve all this. This is significant given India’s burgeoning electricity demand and the persistent supply demand gap along with the summer shortages and outages, the pursuit towards cleaner energy sources will have a crucial role in enabling the country’s transition to a fully sustainable energy system. Ensuring those projects secure the necessary financing to enable that development, however, remains a challenge, with a large proportion of Southeast Asian projects considered unbankable. The bankability of renewable energy projects has always been an issue owing to off takers’ inability to absorb power and pay for it. Amongst the various developments that have taken place in the solar and wind power segments this year, the ones that would have a long-term impact on the power sector include bidding in the wind segment, which would mean that utilities would not scout for wind sites and choose wind turbine suppliers through competitive measures. Another vital strand is the government would tender 20,000 MW of solar capacity, which would perhaps be the largest block of capacity to be auctioned in a single tranche for the first time globally. The government’s strong resolve to heightened quality standards for imported solar photovoltaic (PV) modules, enforced through inspections will further help procurers get over 25 years of module life. This reflects a national commitment to green energy and shows how the country is fast transitioning towards a renewable-focused economy expediting renewable capacity build-up and removing the difficulties being encountered by developers and manufacturers. The future looks bright as nearly 293 global and domestic companies have committed to generate 266 GW of solar, wind, mini hydel and biomass-based power in India over the next decade. The initiative would entail an investment of $310 billion-$350 billion. For instance, the International Finance Corporation, the investment arm of the World Bank Group, is planning to invest about $6 billion by 2022 in several sustainable and renewable energy programmes in India.

The Indian power sector has an investment potential of Rs 15 trillion over the next four to five years, which indicates immense opportunities in power generation, distribution, transmission and equipment. While there is plenty of capital chasing the opportunities in the renewable sector, there are several risks that need to be kept in view, including counterparty risks both in terms of developers and procurers. The good news is renewable energy storage system market in India is expected to witness robust growth, over the next decade, once the cost of storage declines, which is likely to happen because of the sheer volume growth through the electric vehicle route. However, the success will only be possible when the FAME 2 will meet its desired objectives. To draw a parallel with other countries, in December TESLA’s 100MW Hornsdale Power Reserve battery system in South Australia delivered 100 MW into the national electricity grid in 140 milliseconds, instantly powering 1,70,000 homes when the Loy Yang coal power plant suddenly went offline. This testifies, why energy storage has become a complementary solution for renewable energy, which is seasonal and intermittent for ensuring 24×7, robust supply of energy. The thrust on solar and wind projects has increased the challenges in maintaining system stability, which is encouraging developers to support power grid networks with battery storage to help manage the variations in power supply. Renewable energy projects backed with battery technology could transform the energy scenario in India. However, the challenge is to develop a technology that is suitable for large renewable energy projects. As per industry reports, the deployment of energy storage is anticipated to grow over 40 per cent annually in the next 10 years, with around 80 GW of additional storage capacity. We have undertaken proof-of-concept in battery energy storage systems, wherein large lithium-ion battery banks are being deployed in Delhi. As India’s leading renewable energy players with a gross generation capacity of 3,210 MW through clean non-fossil sources, we are committed to transform the sector in sync with the government’s vision of promoting renewable energy building a total

capacity of 20,000 MW by 2025, of which 30-40 per cent would be based on non-fossil fuel. The need of the hour is addressing the bankability of renewable energy projects which has always been an issue in India, owing to off-takers’ inability to absorb power and pay for it. The power purchase agreement structure needs to be strengthened further to make renewable energy projects more bankable. There are states which, owing to their fiscal challenges, are not encouraging the must-run status of renewables and are forcing such capacities to back down when wind velocities are unfavourable. The government, therefore, should enforce must-run status as an obligation for all consumers to buy a good proportion of clean and green power. We also need to address some challenges faced by power producers which include high fuel supply risk, time overruns at plants, and the limited paying capacity of the financially weak distribution utilities due to pre-defined RPOs in their PPAs. Last but not the least, in order to remain energy positive and to make the most of renewable energy sources, we will have to parallelly focus on aggressive promotion of energy efficiency practices as India’s Energy demand will witness an exponential spurge owning to the lighting and cooling requirements due to the varied climatic conditions, the developments in the Electric Mobility, growth of the Industries as well as rural electrification. The World Bank in its report titled ‘Utility scale DSM opportunities and business models in India’ has pegged India’s energy efficiency market at Rs 1.6 lakh /- crore by considering the end use energy efficiency opportunities which is four times the Rs 44,000/crore in 2010, against the backdrop of the success of the Government of India’s UJALA scheme to distribute LED bulbs (Bachhat Lamp Yojana). Till now, over 28 Crore LEDs have been sold across the country which has resulted in energy savings to the tune of 36,545 MUs and avoided peak demand of 7317 MW. In monetary terms, savings of around Rs. 14,618/- crores have been achieved. This will also provide a very good market for companies manufacturing energy efficient lighting and appliances as well as companies providing DSM solutions. Source: energy.economictimes.indiatimes

June 2018

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