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.

Largest EV Fast-Charging Network To Roll Out In Netherlands

By Zachary Shahan — cleantechnica.com

Via EV Obsession:

The world’s largest nationwide network of EV fast-chargers is planned for the Netherlands, and ABB has just won the contract.

The task for ABB is to put a fast-charging station within 50 kilometres (31 miles) of all 16.7 million inhabitants of the Netherlands. In total, that will come to about 200 EV fast-charging stations.

Image Credit: ABB

Image Credit: ABB
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Here’s more info from ABB:

Each of the more than 200 Fastned stations along Dutch highways will be equipped with several multi-standards fast chargers, such as the 50 kilowatt (kW) Terra 52 and Terra 53 models, capable of charging electric vehicles in 15-30 minutes. The first ABB Terra fast chargers are due to be delivered in September 2013. Construction of the Fastned stations, which will have solar canopies, is expected to be completed by 2015.

To date, the Netherlands is the most populous country to roll out a nationwide fast-charging network. Fast-chargers will be located a maximum of 50 kilometers apart along all highways, and because of ABB’s multi-standard design, the network will be capable of serving EVs offered by all major car brands from Europe, Asia and the USA. ABB’s open standards-based cloud connectivity solution allows Fastned to create a user-friendly payment and access service for all drivers.

Sounds pretty good. For more details, check out the ABB news release.

*Note that the world’s first nationwide fast-charging network is supposed to roll out in Estonia.

A Rising Tide, Floats All Boats

Globalization means countries are working together for mutual success
Globalization means interdependence between countries and regions, opening up Foreign Direct Investment flows between participating countries. Image courtesy of: www.wittenborg.eu

by John Brian Shannon

As the world economy improves, national economies are being lifted up by a rising tide of success in other countries.

Now that we are living in an evermore globalized world, nations are no longer entities unto themselves. While they were once insulated from the economic successes or failures of other nations, that is profoundly no longer the case.

A recent example is the United States financial crisis of 2008 which was at first confined within the U.S., but later spread to Europe, Japan and China, with those countries experiencing varying degrees of economic malaise directly attributable to the original fall of the U.S. sub-prime mortgage segment.

Had a financial crisis of this sort taken place within the 1950-1980 timeframe, it would have been seen as an ‘America only’ affair as the (then) economic islands of Europe and Asia had little interest in the internal workings of the American economy.

How the world has changed in the 21st century

Recently, ‘America sneezed’ and most of Europe along with Canada ‘caught the cold’ – and while Asia felt unwell, it didn’t miss a day of work.

Globalization is a process. Every year, countries are harmonizing their diplomatic relations, international trade and laws, walking through the remaining issues towards true interdependence between nation-states.

Along the way, we have seen dramatically lower prices for consumers within the participating nations and a strong downward pull on inflation within the globalized community. Foreign Direct Investment (FDI) flows toward nations with lower land, factory and labour costs, while competition ensures that prices reflect those newfound cost savings.

One of the unfortunate effects of globalization from the Western perspective are the jobs that have fled the West to Asia. Over the span of (almost exactly) four decades, millions of manufacturing jobs have gone to the nations which feature low cost land, factory, and labour rates.

The transition of trillions of dollars from the West to the Emerging Market economies and Frontier Market Economies has spawned a rising economic tide in the Middle East, much of Asia, and in India. In fact, the rise of the BRICS nations are easily traced by the FDI inputs into their nations, as a welcome effect of, (but certainly not the primary cause of) their success.

Since 1998 China and India have been described as the two economic engines of Asia, and during recent recessionary times were noted as the economic engines of the entire world. Even as some nations were falling away from their traditional economic rankings, the unprecedented demand for raw resources and high-tech originating from the ‘rising tiger’ economies, slowed the fall of the Western economies and have even spurred their quicker recovery.

Historically, it was axiomatic that when the United States was doing well, Europe, Japan, Canada, Australia and New Zealand were doing well — as the U.S. economy had the power to float those economies no matter the ‘local’ economic conditions.

America is no longer alone with this power

Now, not only can American demand float the economies of countries or entire regions — the combined demand of the BRICS nations can float national economies and regions.

The U.S. population seems ‘torn’ at this juncture, with some in that country lamenting the loss of the unipolar world which was theirs since the end of the Cold War, whilst others welcome the strengthening and broadening-out of the world economy into a truly interdependent and open economic model.

For those Americans who believe in the open economic model (which is the name given to the ‘free enterprise’ system by economists) the strengthening and broadening-out of the world economy is exactly in line with their beliefs and is seen as an adjunct to American economic and political clout.

“We told you the open economic model was the way to prosperity, and now you are ‘our firm converts’ to that, and to the democracy which necessarily accompanies successful free enterprise systems.”

For those Americans who secretly or publicly wish for a closed economic model (known as the ‘communist’ or ‘statist’ economic model by economists) globalization is the root cause of all American economic woes — when in fact, America’s recent economic problems were caused by a perilously-lacking regulatory environment in but one segment of the U.S. economy and poor decision-making by a handful of individuals.

As nations advance towards interdependence they will see rising demand in their own countries from other partner nations (as at any given time, certain of them will be experiencing growth) thereby helping to balance-off the occasional lack of demand in their own country.

De-facto; Interdependence between nations means facilitation of effort, FDI, and countless other forms of assistance towards whatever is the weakest link of the chain.

This contrasts with the decades of ruthless competition which played itself out (even between allies) and ruled every diplomatic and national economic decision. De-facto, that was a ‘sink all the other boats first, before we get sunk’ game, played out in the global economy.

Wherever interdependent nations are working together to improve upon an open economic model, they are in effect working to create a rising tide for all of the participants within that interdependency, because it is simply and profoundly in their best interests to do so.

Interdependency is creating the incoming tide that will float our boats.

From Wikipedia, the free encyclopedia

“The aphorism “a rising tide lifts all boats” is associated with the idea that improvements in the general economy will benefit all participants in that economy, and that economic policy, particularly government economic policy, should therefore focus on the general macroeconomic environment first and foremost. The phrase is commonly attributed to John F Kennedy,[1] who used it in a 1963 speech…”

JOHN BRIAN SHANNON

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China’s Dream Team — MY COMMENT

by John Brian Shannon

While some might think that the sky is falling now that a new President of China and a new Chinese Premier will be installed in March 2013 — Stephen S. Roach with his years of professional experience working with many of the individuals involved, tells us in his latest Project Syndicate article China’s Dream Team we should feel hopeful this time around.

Not that we didn’t feel hopeful when President of China Hu Jintao and Premier Wen Jaibao came to power. In fact, I would like to take the opportunity to compliment the team of Hu Jintao and Wen Jaibao for their many successes — including the massively successful XXIX Olympiad held in Beijing.

Both men attended Harvard in younger years, both had plenty of exposure to Western ideas and neither seemed to ‘have it in’ for the West.

Historically speaking, communist leaders have generally displayed skepticism or outright hostility to the West and have been critical of Western thought and actions, even when some Western policies were of little concern to communist nations.

During the tenure of Hu Jintao and Wen Jaibao, China has advanced in many areas and has remained a peaceful partner of the West. In particular, both leaders ushered in powerful policies and regulations to help mitigate the environmental catastrophe which has resulted from such rapid industrialization.

China presently burns more than 3 billion tons of coal each year resulting in the production of 7.2 billion tons of CO2, plus other gaseous pollutants and particulates. These numbers are expected to double by 2020 based on already planned and funded (but not yet built) coal power plants adding to the output from existing coal-fired power plants there.

The successful Chinese program directed by these two great men to dramatically limit nitrous oxides at coal-fired power plants comes to mind. This is important because, according to Wikipedia; “Nitrous Oxide is a major greenhouse gas and air pollutant. Considered over a 100-year period, it has 298 times more impact ‘per unit weight’ (Global warming potential) than carbon dioxide.[2]”

For an overview of the Chinese environmental situation and their response to it (current as of May 2012), please see my UNDP article here:

Or go directly to the downloadable PDF.

Over 382 billion dollars worth of conservation and sustainable energy projects have been announced since May 2012. And, another 56 billion was announced today, December 5, 2012 read the Reuters article here.

By 2020, when China will pump 15 billion tons of CO2 into the air just from its coal plants, any positive conservation and mitigation efforts made now will have enormous consequences then.

Let us hope that the new leadership team is as enlightened about the environment as the previous team. Let’s hope the calm and reasonable approach to international affairs and the wise economic choices of former President Hu Jintao and Premier Wen Jaibao will continue.

Above all, let’s not spoil the atmosphere with fearful or angry rhetoric. Minor irritants must remain minor! China needs us, we need them. Full stop.

Only second in importance to ending the Cold War (which was successfully ended by dialogue, goodwill and cooperation between the various players) is the need for China and the West to find ways to work together everyday for the betterment of the largest number of citizens in China and the West.

If the same degree of dedication, goodwill and cooperation is employed to find ways for China and the West to work together as was done to end the Cold War, everyone on the planet will reap those benefits for decades to come!

I welcome incoming Chinese leader President Xi Jinping and Premier Li Keqiang to their new official positions and hope that Western leaders will reach out with sincere invitations to promote a grander and better vision of our world than was ever thought possible just 30-years ago.

Note: Xi Jinping became General Secretary of the Chinese Communist Party and Chairman of the CCP’s Central Military Commission, giving him supreme authority over China’s armed forces. Next March, he will become President of China as well. Read more here.

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Will the Collapse of the Western Manufacturing Base Create a Worldwide Depression?

by John Brian Shannon

The Eastern economies have traditionally been the manufacturers and purchasers of downmarket goods in their own region, while Western economies have traditionally been the manufacturers and purchasers of upmarket goods in their particular region.

Over the past 40 years Asia has taken much of the West’s upmarket manufacturing base, so much so, that the West has lost fully 50% of the manufacturing jobs it once enjoyed previous to 1980. That is the single most important reason why there is significant unemployment, under-employment and worryingly, under-reported unemployment (people who no longer look for work) stats in the Western economies.

Which obviously leaves a big hole in the economy of the West, translating into lower Western economic performance and recessions in North America, Europe, Japan, Australia and New Zealand since the 1970’s.

The fact that many Western corporations are making huge amounts of money at this (outsourcing their manufacturing to Asia – resulting in better corporate profits due to the much lower labour rates there) is now a complete side-issue.

It has now come down to this; The once broad base of Western consumers with generous amounts of disposable income is changing to an ever-broadening base of Western consumers without much disposable income.

If things continue, soon it will impact the Eastern economies — as there won’t be enough people in the West with enough disposable income to afford much of those upmarket goods and services! Translating into reduced economic performance there.

For now, China and India are the only significant economies in the entire world which maintain a healthy growth rate. They have been the economic engines of the world since 1998. Here in the West, we have suffered two recessions since then — and that, with China and India firing on all cylinders and their admirable growth rates of at least 8% per year and sometimes much higher than that.

The U.S. growth rate was an anemic 2% last year and is expected to come in at 1.5% to 1.6% next year. The U.S has not seen any growth rate over 4% since the 1980’s. Europe and Canada have posted similar percentages over that same time-frame.

If demand for Eastern-produced goods slackens any further in the West, the Eastern economies will see recession too. At that point, with the West still mired in the fog of recession — the entire world economy will tailspin resulting in a worldwide depression. This is the fear of many economists — including economists in Asia.

Which is why I favour keeping some significant amount of manufacturing here in the West, as manufacturing produces (relatively speaking) a lot of jobs — while removing resources from the ground and shipping them to Asia produces relatively few jobs.

Oil refineries here cost 12 – 13 billion dollars, while in China they cost 1 billion dollars. No new refineries are planned for the West for obvious reasons. As much as I’d like to say otherwise, there is precious little chance of adding value to our petroleum exports when new refineries are so expensive here.

Which is why we need to find ways to add value to our other resources.There are many North American resources that are being exported away and some would say, squandered away. We need much more focus on a value-added economy. We need to add value to our diminishing resources before they leave our Western economy.

One way, is to manufacture products out of our resources — and then sell them abroad, to enhance our balance of payments, which would contribute to enhancing our GDP, thereby lowering our overall debt-to-GDP ratio. Those ratios are killing us right now in the West.

Another good way to improve our Western economic picture is to tariff all resource exports and use that money to fund infrastructure projects, which would contribute much to the economy, but only temporarily. After all those projects reach completion in about ten years, workers (consumers with disposable income) will again be unemployed or under-employed, just as they are now. What then?

Some economists have suggested a Goods and Services Tax for the U.S. economy and to use those windfall tax funds for national infrastructure programs, as was done in Canada so successfully from 1990 – 2004. I am one of those people. However, with the latest projected U.S. growth rates set to be 1.5% to 1.6% for next year, that means there is a lot of fragility in the economy and some economists say a large, useful Goods and Services Tax might stall the recovery process. A smaller tax would be much less useful, but the taxation rate could be increased as the economy builds positive momentum. Even with those limitations, it is still a good option for the U.S.

It keeps coming back to the fact that we need to add more value to our economy, especially to our export economy on a long-term sustainable basis. We need to create MORE jobs from the resources we extract and from our agriculture and forestry industries — or eventually there won’t be enough demand for Asian-produced products and when those Asian sales sag due to lack of demand in the West, it will hit the fan everywhere.

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John Brian Shannon writes about green energy, sustainable development and economics from British Columbia, Canada. His articles appear in the Arabian Gazette, EcoPoint Asia, EnergyBoom, the Huffington Post, the United Nations Development Programme – and other quality publications.

John believes it is important to assist all levels of government and the business community to find sustainable ways forward for industry and consumers.

Check out his personal blog at: http://johnbrianshannon.com
Check out his economics blog at:
https://jbsnews.wordpress.com
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