HELIONOMICS

FRANCESCO MENEGUZZO

Santa Flavia (PA) July 7th, 2011

Utility-Scale PV Plants in Italy: A Sustainable Way

Towards Low Price Electricity?

HOW TO GET LOW PRICE ENERGY TODAY???

TOMORROW ???

WHAT I’M SPEAKING ABOUT…

UTILITY SCALE PV ECONOMIC OPTIMIZATION FROM SUN-TRACKING SYSTEMS

WHAT I’M SPEAKING ABOUT…

UTILITY SCALE PV ECONOMIC OPTIMIZATION FROM SUN-TRACKING SYSTEMS

WHAT I’M SPEAKING ABOUT…

UTILITY SCALE PV ECONOMIC OPTIMIZATION FROM SUN-TRACKING SYSTEMS

1st QUESTION How much is the energy topic urgent?

SHORT-TERM ENERGY SECURITY

RISK

ITALY 13th out 171 Countries!!!

ITALY’S BAD POSITION

MOREOVER, ITALIAN ELECTRICITY GENERATION RELIES ON NATURAL GAS >60% !!!

PIIGS

2nd QUESTION Are EROEI constraints matched?

SOCIAL COMPLEXITY IS PROPORTIONAL TO

AVAILABLE NET ENERGY

• COMPLEXITY = EVERYTHING BEYOND PURE SURVIVAL

(social assistance, health care, education, infrastructures

maintenance, etc) equality and opportunities!

• AVAILABLE NET ENERGY: energy available after

extraction, transport, transformation and concentration

ENERGY COST:

PROPORTIONAL TO THE NET AVAILABLE FRACTION

• “QUALITY” OF FOSSIL SOURCES IS QUICKLY WORSENING

• SOLAR PV AND WIND POWER OK

• NUCLEAR NO - BIOMASSES NO (with exceptions)

OK

NO 40 YEARS PV

FOSSIL FUELS BAD FATE

PEAKS OF FOSSIL FUELS / AVAILABLE ENERGY PER CAPITA

around year 2020

NUCLEAR “FUEL” BAD FATE

235URANIUM PEAK

3rd QUESTION Is PV energy manageable? (intermittency)

Recent IEA Report

"Harnessing Variable Renewables: a

Guide to the Balancing Challenge”

• Europe, present grid shape

• Intermittent (PV and Wind) power

manageable from 27% - Spain and

Portugal – up to 60% - Denmark

• Italy around 50% - far from such target!

PREDICTABILITY IS FEASIBLE:

• HOURLY ERRORS < 10%

• UP TO 48 HOURS IN ADVANCE

4th QUESTION FUNDAMENTAL!!!

Is utility-scale sun-tracking PV a low cost energy?

Basic derived questions:

A. How much can we pay such PV electricity still

offsetting the “weight” on energy bills?

B. Is such remuneration enough to enable

investments?

A) – PV IMPACT ON THE ELECTRICITY MARKET

PV IMPACT ON THE ELECTRICITY MARKET GRID CONNECTED PV POWER “PUSHES” OUT OF THE MARKET THE

MOST COSTLY POWER PLANTS (OPEN CYCLE “TURBOGAS”) DURING

AND AROUND “PEAK HOURS”, SO DOING “CUTTING” THE MARKET

ELECTRICITY PRICE !!!

“PEAK SHAVING”: HOURLY ELECTRIC LOAD ON THE “TRASMISSION” GRID (GREEN AND

RED CURVES) AND DIFFERENCES ON THE SAME DAYS IN 2010 AND 2011, AS WELL AS

ESTIMATED PV GENERATION (2011, DOTTED CURVE)

PEAK SHAVING: ANOTHER EXAMPLE

PV IMPACT ON THE ELECTRICITY MARKET

SUSPECT OR REALITY?

PV IMPACT ON THE ELECTRICITY MARKET

ELECTRICITY PRICES ON THE EUROPEAN MARKETS

(data: ITALIAN AUTHORITY FOR ELECTRICITY AND GAS)

PV

EFFECT?

EMPIRICAL ESTIMATION OF THE “PRICE EFFECT”

PV IMPACT ON THE ELECTRICITY MARKET

Basic data and assumptions:

• Period: March 1st, 2011 to June 24th, 2011

• Only “working days” considered (Monday to Friday)

• About 1,800 hours data sample

• PV hourly generation estimated from TERNA (high voltage grid

manager) data (HV connected PV) combined with GSE (Energy

Services Manager) installed PV power data (about 4.600 MWp to 6.800 MWp

during the period)

• Total needed electricity load drawn from GME (Electric Market

Manager) data + PV hourly self-use (not to grid) in turn estimated from

comparisons of GME and estimated PV generation data (around 20% of

total PV generation)

EMPIRICAL ESTIMATION OF THE “PRICE EFFECT”

PV IMPACT ON THE ELECTRICITY MARKET

Basic data and assumptions (continues):

• Electricity price assumed as the “non-constrained” PUN (National

Unique Price), also denoted as “NAT”

• Any hour was classified as “no PV” or “PV” according to a simple PV

generation threshold: in order to retain sufficiently large and

overlapping samples the 2,000 MWh threshold was chosen

• As a result, more than 600 “PV” hours and about 1,200 “no PV” hours

constituted the data sample

• The diurnal hourly price (“NAT”) structure was derived on a

monthly basis (March to June) from the observed relationships

“NAT vs Load” during the “No FV” hours

EMPIRICAL ESTIMATION OF THE “PRICE EFFECT”

PV IMPACT ON THE ELECTRICITY MARKET

Diurnal hourly price (“NAT”) vs Load (standardized data)

EMPIRICAL ESTIMATION OF THE “PRICE EFFECT”

PV IMPACT ON THE ELECTRICITY MARKET

Basic Methods:

• The electricity price (NAT) observed in every

“PV” hour was compared with the

corresponding estimated NAT in the “no PV”

hours at the total (observed + PV self-use)

estimated load

EMPIRICAL ESTIMATION OF THE “PV PRICE EFFECT”

PV IMPACT ON THE ELECTRICITY MARKET

The PV “price effect” unfolded !!!

PV IMPACT ON THE ELECTRICITY MARKET

In agreement with our previous estimates (March 1st to April 14th)

EMPIRICAL ESTIMATION OF THE “PV PRICE EFFECT”

COMPUTATION OF THE “PV SAVINGS”

PV IMPACT ON THE ELECTRICITY MARKET

Basic Methods:

• The “saving” in every “PV” hour was computed as

the difference between the total hourly observed

electricity cost and the cost that would have been

paid in a “no PV” hour for the total load

• Additional “PV Savings” were estimated in the “No

PV” hours due to the avoided cost of the “self-

use” residual PV generation

PV IMPACT ON THE ELECTRICITY MARKET

“PV HOURS” – the PV “SAVINGS” vs Total Electric Load

COMPUTATION OF THE “PV SAVINGS”

PV IMPACT ON THE ELECTRICITY MARKET

COMPUTATION OF THE “PV SAVINGS”

“PV HOURS” – the PV “SAVINGS” vs Estimated PV Generation

PV IMPACT ON THE ELECTRICITY MARKET

COMPUTATION OF THE “PV SAVINGS”

Basic Results:

• The “PV Savings” grow with the combined growth of

electric load and PV generation

• THE LOWEST ESTIMATE OF THE “PV SAVINGS” FOR

THE ~ 80 CONSIDERED DAYS WAS about € 360

million, out of about € 850 million feed-in tariffs (> 40%)

• THE LOWEST ESTIMATE OF THE “UNIT PV SAVING”

WAS about 125 €/MWh (PV generation around 2,9 TWh)

UNIT OF PV GENERATED ELECTRICITY

THE “RIGHT PRICE” FOR THE UTILITY

SCALE PV PLANTS GENERATION

THE (LOWEST!) “RIGHT PRICE” OF THE

PV ELECTRICITY TO OFFSET ANY

ADDITIONAL CHARGE ON THE END

USERS’ BILLS IS:

125 €/MWh

B) – UTILITY SCALE SUN-TRACKING PV INSTALLATIONS

Basic data and assumptions:

ANNUAL INFLATION 2.50%

ANNUAL ELECTRIC INFLATION 3.00%

POWER (kWp) 10,000

STILL (“S") OR TRACKING (“T") T

CELL TECHNOLOGY (Mono-Si, Poly-Si, a-Si, other) Mono-Si

GEOGRAPHIC REGION – NORTH ("N"), CENTER ("C"), SOUTH ("S") S

ANNUAL GENERATION [kWh/kWp] - TRACKING = +45% 2,175

ANNUAL EFFICIENCY LOSS (%/year) 0.50%

OWN CAPITAL (Y/N) N

CAPITAL INTEREST RATE IN LOAN PERIOD [%] 5.00%

LOAN PERIOD (years) 20

PRESENT UNIT COST (€/kWp) 2,200.00

“TURN-KEY” INSTALLATION COST *€] 22,000,000.00

UTILITY SCALE SUN-TRACKING PV INSTALLATIONS

Basic data and assumptions (continues):

GUARANTEE PERIOD (years) 10

INVERTER REPLACEMENT FREQUENCY (years) 10

INVERTER UNIT COST(€/kWp) 192.11

INSURANCE COST [yearly % of PV COST - constant] 0.60%

O&M COST [yearly % of PV COST (+ inflation)] 1.00%

TERRAIN AREA [hectares] 40.00

TERRAIN COST [(€/hectare/year) + inflation] 1,000.00

TAX ON TERRAIN COST (first year, applied on total cost) 18.00%

OTHER COSTS - personnel (guard, etc)

[€/year + inflation] 60,000.00

NET PRESENT VALUE (NPV) RATE [%] 5.00%

PV INSTALLATION LIFE-TIME [years] 40

UTILITY SCALE SUN-TRACKING PV INSTALLATIONS

A POSSIBLE UTILITY-SCALE PV TRACKING REMUNERATION SCHEME:

• CONSTANT TARIFF AT 125 €/MWh DURING THE FIRST 20 YEARS

• SINCE YEAR 21, FREE MARKET COMPETITION, e.g. AT PRESENT

MINIMUM PRICE (NAT) 50 €/MWh + INFLATION (2.5% per year)

STABILITY + POWER COST LOWERING

UTILITY SCALE SUN-TRACKING PV INSTALLATIONS

IS SUCH SCHEME SUSTAINABLE?

UTILITY SCALE SUN-TRACKING PV INSTALLATIONS

IS SUCH SCHEME SUSTAINABLE?

YES – APPARENT FROM PREVIOUS CHART !!!

TOTAL COSTS € 57,4 million

TOTAL INCOME € 91 million

NET PRESENT VALUE OF TOTAL COSTS € 29,8 million

NET PRESENT VALUE OF TOTAL INCOME € 41,5 million

+ 39%

FRANCESCO MENEGUZZO

THANK YOU!!!