How The Solar PV Industry Became A Global Phenomenon

by Giles Parkinson –Special to JBS News

This article first published on RenewEconomy

The recent slew of quarterly reports from the world’s major solar PV manufacturers have delivered some encouraging news: surplus capacity is being removed, manufacturing costs continue to fall, selling prices have stabilised and margins are improving. Some solar manufacturers may even post a profit later this year or in 2014.

But by far the most impressive piece of information was the extent to which the industry is growing in new markets. The influence of Europe, which kicked off the solar PV boom nearly a decade ago with its feed-in tariffs, is fading. China, Japan and the US will compete for domination in the coming years, but strong markets in the rest of Asia, Africa and South America are also emerging.

“The global PV market is becoming more diversified,” says Liangshing Miao, the chairman and CEO of Yingli Solar, the world’s biggest manufacturer of solar PV. “China, the US, Japan and other new and emerging markets, will become the main drivers of demand in the second half of this year. (We are witnessing) the globalization of the PV industry.”

This is a recurring theme in the industry. Last month, Deutsche Bank published an analysis which talked of a major “inflection point” in the global PV industry. Analyst Vishal Shah said that three-quarters of the world’s market will be “sustainable” for solar within 18 months, meaning there is an economic case to install solar PV with little or no subsidy.

More recently, Deutsche Bank noted that the US — the world’s biggest electricity market — was rapidly approaching the point where more than half of its states were at “grid parity” also meaning that no additional subsidies are required for solar PV. It predicted the US market would reach annual installations of 16GW by 2016, and have total installed capacity of 50GW.

But it’s not jut the big four markets that are offering huge opportunities for solar PV. In another report, Deutsche said Chile could become the first subsidy-free market in the world, explaining why it had more than 3,500MW of projects in the pipeline.

Robert Petrina, Yingli’s head in the Americas, says sales in Latin America have surged 1,700 percent over the last year, utility-scale projects are popping up everywhere and distributed generation is very strong.

He cited Chile, Mexico, Ecuador and Brazil (Yingli is a sponsor of the FIFA World Cup in 2014) as being among the strongest markets in Latin America. It now operates in 18 countries there.

“The signals overwhelmingly point to continued development in accelerated PV adoption,” Petrina says. “We are seeing new markets open up and project sizes increasing in those regions.”

Yingli published this graph in relation to its 2nd quarter results to illustrate how demand is moving away from Europe. The most interesting parts are the first and third columns, because they highlight how Europe has shrunk from more than 50 percent of demand to just over one quarter.

Yingli’s Miao says the company is already redeploying staff and resources to other emerging markets in Africa and Asia.

In South Africa, the government has already signed contracts for 1GW of solar PV and is currently holding an auction for another 400MW of PV capacity. The provincial government of Gauteng announced earlier this month it would spend $1 billion installing 300MW of solar on the rooftops of all state-owned buildings.

In Zimbabwe, solar developer Twalumba has reportedly signed an MoU with British company Thompson Cole to develop eight solar farms totaling 600MW over the next 15 months, with the help of Chinese and British financing. Saudi Arabia is gearing up to make a massive investment in solar PV, along with other Gulf and north African countries. On a smaller level, Ethiopia is half way through a World Bank-sponsored program to bring distributed solar to 25,000 households not connected to the grid. Private companies offer similar programs in Africa and Asia to some of the 1.6 billion people who don’t have electricity.

In Asia, India is working its way through its ambitious program to have 20GW of solar PV by 2022, Pakistan has just announced plans for 700MW of solar capacity in Punjab province, Bangladesh already has installed a million off-grid solar systems, and has announced plans for another 500MW deployment.

Thailand and Malaysia are emerging as strong markets, and a new source of manufacturing. Even Brunei is looking at introducing a feed-in tariff for solar, albeit to help the oil-rich sultanate reach an incredibly modest renewables target of just 10 percent by 2035. Russia is also holding a tender for 700MW of solar projects.

The predictions of Deutsche Bank, other investment banks, and individual analysts such as Tony Seba, are based on the premise that fossil fuel prices will continue to rise, while solar PV costs will continue to fall. This last assumption is contested by many in the traditional utilities business, but these two graphs below tell us much about the changing dynamics of the industry, and puncture holes in the views of some that the price falls in solar PV modules are unsustainable.

The first graph on the left (from Yingli’s 2nd quarter accounts) shows that in just the past year, the non-silicon cost of PV modules has fallen by 18 per cent. And on the right, we see that because prices have stabilised, or even risen in some markets, the gross margins of the company have rebounded. The fall in costs are consistent with a recent study by the National Renewable Energy Laboratory and the Massachusetts Institute of Technology that suggests production scale, rather than low labour costs, has driven China’s boom in manufacturing PV modules, and delivered its cost superiority of other manufacturers.

Screen-Shot-2013-09-10-at-8.40.26-AM

Intriguingly, Yingli chief strategy officer Yiyu Wang said that project costs for its current pipeline of 130MW in utility-scale solar projects in China are about $1.03-$1.05 a watt. That is less than half the cost of smaller projects in Australia, such as those to be built under the ACT Big Solar program, and one-third of the cost of AGL Energy’s 155MW solar plant proposed for Broken Hill and Nyngan in NSW. Wang suggested that Yingli would generate a return in the “higher mid teens” for these projects.

This article, How The Solar PV Industry Became A Global Phenomenon, is syndicated from Clean Technica and is posted here with permission.

About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.

Short term pain, Long term gain for EMEA wind power

by Joshua S Hill — Special to JBS News

MAKE Consulting are predicting short term pain but long term gain for the Europe, Middle East and Africa (EMEA) grid-connected wind market, according to the inaugural EMEA Wind Power Outlook Report published earlier this month. They note that 7 of the top 10 global emerging markets are located in the EMEA region, which highlights the importance of the region in terms of the industry’s growth globally.

The general feeling of the MAKE report is that the EMEA region is set to see a contraction of demand for wind power over the next 18 months, due in large part to “policy uncertainty” across the European Union. Despite moderating regulatory uncertainty and “predominantly positive” regulatory momentum, MAKE are still predicting market contraction across the region to deepen into 2014, despite an overall global recovery of the wind industry and continued growth in the EMEA offshore and Emerging Markets.

We have seen recently various countries (most notably China) make inroads into the Africa solar PV market, redirecting manufacturing and investment to the largest emerging market continent left. Following tariffs levied against them in Europe, China began to make it known it was planning on expanding its panel manufacturing into Africa. While Google made its first African renewable energy investment of $12 million into the $260 million Jasper Power Project, a 96-megawatt (MW) solar photovoltaic (PV) facility to be built near Kimberley in South Africa’s Northern Cape Province.

African wind industry

The African wind industry, however, has seen steady growth over the past few years, as seen in the chart above (courtesy of The Wind Power).

Following MAKE’s assertion that offshore wind will be a predominant driver of growth over the next 18 months, it makes sense to take a look at some of the offshore projects in Africa. The country of Cape Verde on the north-west coast of Africa recently installed 5 offshore wind farms, although its capacity is currently hovering under 40 MW. However, further north in the country of Tunisia, it’s a different matter, with over 100 MW of wind capacity thanks to a 50 MW growth in 2012.

Meanwhile, according to the European Wind Energy Association, the annual installed offshore wind capacity in Europe has already moved above 1000 MW for 2013, falling just short of 2012′s full year total.

EWEA02

According to the stats, 277 wind turbines were connected to the grid to total 1,045 MW. Two of the big operations connected to the grid so far this year were the London Array wind farm and the Anholt Offshore Wind Farm, together adding up to 750 MW connected to the grid.

EWEA01

The EWEA were also critical earlier this year of 2012′s growth in the industry, noting that the 2012 figures do not reflect the “significantly negative impact” of economic, regulatory, and political uncertainty that has existed in Europe since 2011. We covered the relevant EWEA report in February of this year, which included the EWEA’s own warnings that 2013 and 2014 were going to be tough years for the European wind industry.

Only days before, however, the EWEA had announced that they believed there were significant opportunities for growth in emerging markets, such as Romania, Poland, and Turkey.

“These emerging markets are not only important in their own right, but they have increased perceived importance given the state of wind energy markets elsewhere in Europe,” Pierre Tardieu from EWEA said on launching the report.

Furthermore,

Emerging markets “are experiencing teething problems very similar to what we’ve experienced in the rest of the world,” said Inigio Sabater Eizaguirre from Vestas, who was in attendance at the annual meeting. He added that the European markets are attractive to companies like Vestas and that the ongoing recovery from the economic crisis is “big incentive” to look for new markets outside of the well-established markets already in existence throughout Europe.

MAKE believe that the European Union will meet their 2020 renewable electricity production targets with only 93% of its National Renewable Energy Action Plans (NREAP) targets met. They believe that the Southern European and Offshore targets will not be met, due primarily to “weaker-than-expected electricity demand growth.” Nevertheless, the EU Offshore market is still expected to be one of the brighter spots in a mediocre period of growth.

About the Author

I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium.   I love words with a passion, both creating them and reading them.
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Artist paints tribute to Mr. Nelson Mandela

Accomplished South African artist Salli van Druten took it upon herself to create a project named ‘Thanks for the Colour’ and painted the faces of 95 Nelson Mandela supporters and published their images in a book.
She then presented a copy of the finished book to Mr. Mandela as a gift for his 95th birthday on July 18, 2013.
All proceeds from the sale of copies of the book will go to the Nelson Mandela Children’s Hospital, in South Africa.

Salli van Druten at work on the "Thanks for the Colour" project.
Salli van Druten at work on the “Thanks for the Colour” project, where she painted portraits of 95 Mr. Nelson Mandela supporters. All proceeds from the book sales will go to the Nelson Mandela Children’s Hospital. All images are copyrighted by the artist.

Like many others, Salli believes that South Africa’s peaceful transformation from Apartheid to Democracy, and the absence of a civil war, was nothing short of a miracle.

Salli van Druten; “We moved from looking at our world in Black and White to a country exploding with colour. The role that Nelson Mandela played in this miracle, the humility and composure he showed when many around him were losing their heads, elevated him to the role of modern-day Saint.”

Salli wanted to thank Nelson Mandela for what he has done for her country and for the example he has set for the world. Painting portraits are her passion and the use of bold, bright colours seemed to fit the South African “Rainbow Nation” perfectly. What better way to celebrate Madiba’s 95th birthday than to paint 95 portraits of ordinary people in 95 days. Salli set herself the challenge with other people from around the world who feel the same way about Nelson Mandela.

She started a social media campaign and collected faces of 95 people together with their personal messages to Mandela, from 30 countries around the globe, to thank him in a personal way for the rich cultural understanding he has added to our modern civilisation.

She managed to complete all 95 paintings in the nick of time — just a week before Madiba’s birthday. The individual messages of appreciation with the portraits were then published in a book that Salli delivered to the Nelson Mandela Foundation on Tata Madiba’s (Nelson Mandela) 95th Birthday, on 18 July 2013.

Thanks for the Colour! Book and portraits by artist Salli van Druten. Proceeds from the sales will go to the Nelson Mandela Children's Hospital in South Africa.
Thanks for the Colour! — By renowned South African artist Salli van Druten. I was pleased and honoured to be one of the people chosen for Salli’s great work. My image and comment appears on the left page in this image. All images are copyrighted by the artist.
Collage of the 95 faces chosen by the artist. All images copyrighted by the artist.
Collage of the 95 faces chosen by the artist. All images copyrighted by the artist.
Book-Covers
The completed book by artist Salli van Druten. All images are copyrighted by the artist.

Egypt – Land of Chaos and Untapped Opportunity

by John Brian Shannon

Baltimore Sun
Protesters on Egypt want a better life and a corruption free government. Image courtesy: darkroom.baltimore.sun.com

If ever a country had the gift of being placed in the best geographical position on the world map, it is Egypt.

There they are, with the Mediterranean to the north, the Suez Canal and the Red Sea to the north and east, and all of Africa to the south and west of them. It is literally, the crossroads between Asia, Europe and Africa.

Not to mention Egypt’s priceless Nile River and the still largely untapped resources such as its hydro-electric power opportunities, the fertile agricultural land of its Nile Valley, and the country’s unimaginable solar and wind power potential.

Egypt has somewhat more than 84 million people to help bring all those opportunities to fruition, who live on only 3 percent of the total land area of the country, which is the fertile Nile Valley.

Some 96 percent of the country is desert with nothing in sight except the blasting Sun and sand dunes. One tiny corner of Egypt covered with solar photovoltaic panels (or thermal solar power) could power all of Europe!

Some of that unused land could be used for wind farms, as there is plenty of untapped potential there too.

Egypt should be the richest nation (per capita) on the planet.

But it’s not. Which can only mean one thing. Bad management.

Of course in previous centuries, excessive looting by some colonial powers and Egypt’s ill-advised military adventures in recent decades didn’t help. Nor did the Cold War, an evil, but seemingly necessary step in our civilizations progress.

All those things are now far removed from the scene, so why isn’t Egypt rich?

There is no reason good enough, that Egypt’s people shouldn’t be enjoying their lives to the same per capita income levels, or better, than the fortunate citizens of Norway or Sweden who have an excellent standard of living, even without Egypt’s advantageous geological placement!

If Egypt’s people are demonstrating against anything at all, they are demonstrating against poverty and inequality — in what should obviously be one of the richest per capita nations on the planet.

There is no reason for them to live in poverty, nor should they feel like second-class citizens in the world.

It’s their country!

A country, belongs to it’s citizens – not to a military junta, not to elected politicians and not to foreign interests! Egypt, belongs to the Egyptian people and they have the right to make the most of their resources — and they sense something is wrong, because, so far, only the least has been made with that nations great resources and geopolitical placement. The political cycle that we have seen over the past months attests to the depth of those sentiments.

Expect the present cycle that we have seen to repeat endlessly until the Egyptian people are satisfied that the wealth of their country is being utilized properly, (for now) and to its maximum potential, (eventually). Not just that, but shared equally with a minimum of inequality between citizens.

The present demonstrations are not to be confused with political advantage, or politics at all. These demonstrations are fundamentally about ‘bread and butter’ issues.

Some foreign powers are trying to paint the Egyptian protests which led to the downfall of President Mubarak, the rise of Mohamed Morsi, and the removal of Morsi by coup d’état, as part of ‘the great transition to democracy’ and that is what it is all about. Which is an utter crock.

It’s about what politicians can do to make the lives of everyday Egyptians better. What Egyptians want is jobs, stable food prices and personal safety and security and a whole lot of chatter about democracy is great – IF that gets them closer to their goals.

The people want bread!

People will say and agree to almost anything on the path to full stomachs and disposable income. They want to have a share in the country’s great (and so far, largely wasted) wealth, and its unimaginable future wealth. Egyptians want to feel proud of their nation and their accomplishments instead of being referred to as ‘that backward, poverty-stricken nation between Israel and Libya’.

When a government arrives in power that can attract the necessary FDI (Foreign Direct Investment) to build the country’s infrastructure — especially, the agriculture and (renewable) energy sectors and a massive electrical transmission network to the north to service Europe, south and west to distribute electrical power to the rest of Africa, then and only then, will we see an end to the present downward spiral of politics, democracy, and faith in government institutions in Egypt.

It’s the economy, stupid.

Egypt’s next ten leaders should take a page out of former President Bill Clinton’s book, and place a sign on their desk, saying; “It’s the economy, stupid!

If they ever get that right, the rest will fall into place…

JOHN BRIAN SHANNON

To follow John Brian Shannon on social media – place a check-mark beside your choice of Facebook, Twitter or LinkedIn: FullyFollowMe/johnbrianshannon

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What is up with Africa?

by John Brian Shannon

Yesterday, the UNDP opined on Twitter that “Africa is on the move.”

Today, on Project Syndicate David Fine wrote “Inside Africa’s Consumer Revolution” where he pointed out some interesting facts about that continent.

“Nowadays, Africa’s economic potential – and the business opportunities that go with it – is widely acknowledged. Poverty and unemployment are still more widespread than in other emerging markets, but accelerating growth since 2000 has made Africa the world’s second-fastest-growing region (after emerging Asia and equal to the Middle East).”

CAR101212B-1 Steady pace of African growth 2012 and 2013

The above chart is from the IMF which is noted for it’s careful and qualified assessments of developing nations and regions. Here is a small excerpt from their authoritative October report:

Regional Economic Outlook: Sub-Saharan Africa Maintaining Growth in an Uncertain World

”Economic conditions in sub-Saharan Africa have remained generally robust despite a sluggish global economy. The near-term outlook for the region remains broadly positive, and growth is projected at 5¼ percent a year in 2012–13. Most low-income countries are projected to continue to grow strongly, supported by domestic demand, including from investment. The outlook is less favorable for many of the middle-income countries, especially South Africa, that are more closely linked to European markets and thus experience a more noticeable drag from the external environment. The main risks to the outlook are an intensification of financial stresses in the euro zone and a sharp fiscal adjustment in the US–the so called fiscal cliff.”

Mind you, not everything is trending upwards — some things are going downhill there too. Way down. Here is a nice chart to underscore that trend.

image

Figure 1: African Debt and Debt Service Source: International Monetary Fund, World Economic Outlook Database, October 2009.

The World Bank agrees with the optimistic view of things and has noted this progress in their twice-yearly report on Africa — Africa’s Pulse. Here is a short excerpt from that report:

In its wide-ranging analysis of new developments in Africa, the new report notes that after ten years of high growth, an increasing number of countries are moving into ‘middle- income’ status, defined by the World Bank as those countries achieving more than $1,000 per capita income.

Of Africa’s 48 countries, 22 states with a combined population of 400 million people have officially achieved middle-income status; while another 10 countries representing another 200 million people today would reach middle-income status by 2025 if current growth trends continue or with some modest growth and stabilization.

On October 15, 2012 Jean-Michel Severino and Emilie Debled wrote about Africa’s huge growth opportunity in their great Project Syndicate piece, “Africa’s Big Boom

“Africa is undergoing a period of unprecedented economic growth. According to The Economist, six of the ten fastest-growing countries in 2011 were in Africa. Average external debt on the continent has fallen from 63% of GDP in 2000 to 22.2% this year, while average inflation now stands at 8%, down from 15% in 2000. This positive trend is likely to persist, given that it is based on structural geographic and demographic factors, such as rising exports, improved trade conditions, and steadily increasing domestic consumption.”

The continent we call Africa, once an economic backwater is rapidly-transforming into an important partner of the world’s major economies, by providing much-needed raw resources and increasingly, agriculture is playing an important role there.

A major UN paper dated June 2011 remarked on the recent optimism felt by many world leaders, “The African Moment: On the Brink of a Development Breakthrough

In the words of UN Secretary General Ban ki-Moon (2011:1) at the Summit of the African Union in January 2011: ‘Africa is on the move. The new narrative for Africa is a story of growth.’ And as Donald Kaberuka (2010:4), President of the African Development Bank, noted at the opening of the 2010 African Economic Conference, there is now ‘broad agreement that an unusually strong momentum has built up in the African economies over the last decade’. This change in perception does not mean that the immense challenges faced by the continent  are being glossed over, but the Afro-pessimism of the 1990’s has clearly been replaced by a much more realistic and confident outlook. African people seem to share this view.

The answer to the question What’s up with Africa? Everything you want in a growing continent.

Please take the time to read the seminal articles that I have cited in this post. They will enrich your understanding of this coming-of-age continent.

JOHN BRIAN SHANNON

To follow John Brian Shannon on social media – place a check-mark beside your choice of Facebook, Twitter or LinkedIn: FullyFollowMe/johnbrianshannon