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Cost-Efficient and sustainable deployment of renewable energy sources towards the 20%
target by 2020, and beyond
D2.5 Analysis of Solar Valleys of Opportunity
Date: February 2012
D2.5 Analysis of Solar Valleys of Opportunity i
Project no.:
IEE/09/999/SI2.558312
Deliverable number: D2.5
Deliverable title: Analysis of Solar Valleys of Opportunity
Work package: WP2
Lead contractor: Ciemat
Logo of the contractor
The sole responsibility for the content of this report lies with the authors. It does
not necessarily reflect the opinion of the European Communities. The European
Commissionis not responsible for any use that may be made of the information
contained therein.
Author(s)
Name Organisation E-mail
Marta Santamaría CIEMAT [email protected]
Natalia Caldés CIEMAT [email protected]
Irene Rodríguez CIEMAT irene.rodrí[email protected]
Dissemination Level
PU Public
PP Restricted to other programme participants (including the Commission Services)
RE Restricted to a group specified by the consortium (including the Commission Services)
CO Confidential , only for members of the consortium (including the Commission Services)
D2.5 Analysis of Solar Valleys of Opportunity ii
PERFACE/ACKNOWLEDGEMENTS
This document reports activities and results of Task 2.5 of the Intelligent Energy Europe
supported project RES4Less. This work has been conducted on the base of data provided by the
modelling tool RESolve-E. The development and improvement of the tool is the result of the
work carried on by some members of ECN, specially Francesco Dalla Longa and Joost van
Stralen, jointly with Lachlan Cameron and Rodrigo Rivera Tinoco.
This input has been provided by ECN and later, fruitfully discussed with some of its members:
Francesco Dalla Longa, Tjaša Bole-Rentel and Paul van der Oosterkamp, as well as internally
with some members of CIEMAT: Rosa Sáez; Yolanda Lechón and Helena Cabal, to all of
whom we are specially thanked for gathering impressions and ideas with us. The preliminary
results were also shared and enriched by comments from other members of the RES4Less Team
during an internal meeting of the project with the ECN Team and Dierk Bauknecht (Oeko
Institute), Henrik Klinge Jacobsen (DTU), Lise-Lotte Pade Hansen (DTU),, Michael ten
Donkelaar (Enviros). Outside the project consortium, Luís Crespo (Protermosolar) and Sofía
Martínez (IDEA) provided us some invalueable insights on solar-thermal and the use of
cooperation mechanism, respectively.
D2.5 Analysis of Solar Valleys of Opportunity iii
EXECUTIVE SUMMARY
Previous work within Work Package 2 of the RES 4 Less project has allowed to identify the
surplus of renewable electricity (RES-E) potential over the national RES target - specified in the
National Renewable Action Plans (NREAPs) -. The costs and technology composition of the
surpluses have been determined using ECN RESolve-E model, and a set of so-called Valleys of
Opportunity (parts of the identified surpluses that are readily exploitable for cross-border
cooperation via a suitable cooperation mechanisms) has been proposed. A Valley of
Opportunity is typically characterized by a Host country (seller of surplus) and a User country
(buyer of surplus): by buying RES-E from a host country the user country can potentially realize
some cost savings in reaching its NREAP target.
The report presented here analyzes the proposed Valleys of Opportunities from a technological
perspective. Specifically, this report focuses its attention on solar energy, mainly photovoltaic
(PV) and concentrated solar power (CSP), combining the results from the VoO assessment of
task 2.2 with insights from other relevant sources.
The following conclusions can be extracted from the various steps of the analysis conducted:
- Firstly, based on cost data, it can be concluded that the most cost-competitive countries for
solar energy are located in South Europe and Germany and that, from a technology
perspective, PV is more cost competitive than CSP. Morever, PV is expected to reach higher
cost reduction due to learning effects than CSP.
- Secondly, solar surplus is expected to increase over time, going from 11% of total EU
surplus in 2015 to 22% of EU surplus in 2020. In both cases, half of it comes from PV and
the other half from CSP. From a country perspective, the ranking varies depending on the
specific technology. On one side, in 2015 PV surplus is found mostly in Spain and France.
However, by 2020, Spain is no longer a key player while France maintains its leading
position together with Germany. On the other side, CSP surplus shows more of a steady
pathway, since Spain stands as a leading country both in 2015 and 2020.
Going beyond the analysis of the results of Task 2.2, this report also addresses practical
constraints and barriers for the further deployment of solar technologies. Some of them include
legal, administrative, as well as grid infrastructure limitations.
Finally, a first deployment path draft has been outlined as a way to identify those aspects that
should be deeply analyzed in the subsequent case studies that will be conducted in the next
work package of the RES 4 Less project.
D2.5 Analysis of Solar Valleys of Opportunity 1
TABLE OF CONTENTS
Page
1.) INTRODUCTION 6
2.) ANALYSIS OF SURPLUS POTENTIAL ON REGIONAL/COUNTRY
LEVEL
6
2.1. Insights from the NREAPs 6
2.2. Analyses of cost supply curves in solar rich regions & countries 7
2.3. Assessment of surplus potential by country, and region 10
3.) OVERVIEW OF POTENTIAL VoO FOR SOLAR 11
3.1. Geographic overview of most promising VoO for solar 11
3.2. Comparing results from RESolve-E and other sources 14
3.3. Historical and policy development of the identified VoO 15
4.) ASSESSMENT OF CONSTRAINTS ON VoO FOR SOLAR IN
SELECTED COUNTRIES
17
4.1. Specific PV constraints 17
4.2. Specific CSP constraints 19
4.3. Grid constraints 20
5.) DEPLOYMENT PATH FOR VoO SOLAR IN CASE STUDY
COUNTRY
20
6.) CONCLUSIONS 22
D2.5 Analysis of Solar Valleys of Opportunity 2
1. Introduction Previous work conducted in WP2 of RES 4 Less project has identified, firstly -within task 2.1 -
the amount of RES surplus potential by Member States (MS), that is the excess of renewable
(RES) potential over the national RES target fixed by the RES Directive by combining MS RES
production potential data as well as RES targets and RES production cost for each Member
States. Secondly - within the task 2.2 -, all the information has been integrated in a common
framework analysis with the aim of estimating the Valleys of Opportunity (VoO) for the whole
Europe, that consist on identifying potential host and user countries of RES surplus within EU.
This analysis has been conducted from a country perspective.
The aim of the subsequent tasks 2.3, 2.4 and 2.5 consists on, based on previous results,
conducting the analysis from a specific RES technology perspective. The purpose of these tasks
resides on identifying what are the main countries as well as constraints and opportunities for
each RES technology in order to define tailored deployment pathways. In particular, the current
report (D.2.5) is focused specifically on solar energy technologies, mainly photovoltaic (PV)
and concentrated solar power (CSP).
The first section of this report focuses its attention on analyzing, step by step, data related to
solar surplus for various countries and solar Valleys of Opportunity for both 2015 and 2020.
After conducting this quantitative analysis, a more qualitative analysis has been conducted to
identify potential constraints for solar technologies. Finally, a first draft deployment path has
been elaborated to identify those aspects that should be taken into account in the case studies
implemented in next work package.
2. Analysis of surplus potential on regional/country level
2.1. Insights from the NREAPs
As a first step, the information from National Renewable Action Plans (NREAP´s) and data
related to RES cost production (see Deliverable 2.1. of RES 4 Less project), has been combined
in order to identify those countries expected to have a solar surplus (that is excess solar
production potential over their national targets). Figure 1 shows results for those countries
forecasted to have solar technologies surplus - considering PV and CSP, but also thermal energy
-. As can be seen in Figure 1, Germany has the highest solar excess potential (4,804 KToe),
mainly from PV (3,559 KToe) but also from thermal energy (1.245 KToe). Spain also shows
high solar excess potential (1320 KToe) from CSP technology.
On the other side, Italy and Luxembourghave reported a deficit to achieve their RES production
2020 targets, and are therefore potential candidates to purchase (part of) the solar excess from
the countries displayed in Figure 1.
D2.5 Analysis of Solar Valleys of Opportunity 3
0
500
1000
1500
2000
2500
3000
3500
4000
Bugaria Denmark Germany Spain Lithuania Hungary Slovakia Sweden
Solar
excess
[KToe]
PV
CSP
Thermal
Figure 1. Solar excess potential by country, based on NREAP´s and cost data [KToe]
2.2. Analysis of cost supply curves in solar rich regions & countries
As a second step, cost supply curves for solar electricity throughout EU have been analyzed,
both for 2015 and 2020. This analysis has been conducted on the same cost supply curves that
were used in the modelling exercise of RES 4 Less task 2.2. Figure 2 shows the cost of
electricity production for PV and CSP throughout EU in 2015 and 2020, compared with the PV
cost supply curve in 2010. By comparing PV cost curves in 2010 and 2015, a significant
increase in PV production as well as a decrease in costs is expected to be reached from 2010 to
2015. As a proof of this improvement, Figure 2 shows that the inflection point in the 2010 PV
cost curve is around 15.000 GWh, while in 2015 that point is displaced to the level of 40.000
Gwh. Comparing PV and CSP cost curves in 2015, results show that CSP cost production is
significantly higher than PV. Besides, Figure 2 shows that in both cases (PV and CSP),
comparing the 2015 and 2020 curves, it can be concluded that the production capacity is
expected to increase significantly (especially for PV), and that costs are expected to decrease.
Figure 2. PV and CSP cost of electricity production in EU in 2015 and 2020 [€ct/kWh]
The amount of PV electricity produced by country in 2015 is displayed in Figure 3. In order to
analyze this information, seven different cost ranges have been considered: [i] from 9 to 12
PV-2010 PV-2015
PV-2020
CSP-2015 CSP-2020
0
10
20
30
40
50
60
70
80
90
0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000
Electricity production (GWh)
Ele
ctri
city
pro
du
ctio
n c
ost
s (c
€/K
Wh
)
PV-2010
PV-2015
PV-2020
CSP-2015
CSP-2020
Co
sto
fe
lect
rici
typ
rod
uct
ion
(c€
/kW
h)
PV-2010 PV-2015
PV-2020
CSP-2015 CSP-2020
0
10
20
30
40
50
60
70
80
90
0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000
Electricity production (GWh)
Ele
ctri
city
pro
du
ctio
n c
ost
s (c
€/K
Wh
)
PV-2010
PV-2015
PV-2020
CSP-2015
CSP-2020
Co
sto
fe
lect
rici
typ
rod
uct
ion
(c€
/kW
h)
D2.5 Analysis of Solar Valleys of Opportunity 4
c€/kWh; [ii] from 12 to 15 c€/KWh; [iii] from 15 to 18 c€/KWh; [iv] from 18 to 21 c€/KWh;
[v] from 21 to 30 c€/KWh; [vi] from 30 to 40 c€/KWh and [vii] over 40 c€/KWh. As expected,
most countries displaying the lowest solar cost are located in South-Europe, mainly Spain, Italy,
Greece and Portugal. Nevertheless, there are other countries outside this area with low
generation cost such as Germany and France. Regarding CSP production, by 2015, Spain is
expected to be the only producer of electricity from CSP (24,960 MWh).
Figure 3. Contribution by country to the PV cost curve in 2015 [GWh]
The estimated amount of electricity produced by PV in each country is displayed in Figure 4.
As can be seen, as result of learning effects, a new cost range (7-9 c€/KWh) has been added in
2020. As in the previous analysis, countries that play a relevant role and could potentially
produce a significant amount of solar energy at a competitive cost are: those located in
Southern-Europe, but also Germany and France figure as competitive countries in PV
production. UK could also be included in the same MS group of relevant PV producers. As in
the previous analysis, by 2020, the total expected electricity produced by CSP is provided by
Spain.
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
Spa
in
Italy
Por
tuga
l
Fra
nce
Gre
ece
Oth
ers
Ger
man
y
Spa
in
Fra
nce
Italy
Oth
ers
Ger
man
y
Spa
in
Oth
ers
Ger
man
y
Spa
in
Oth
ers
Ger
man
y
Spa
in
Italy
Oth
ers
Ger
man
y
Fra
nce
Oth
ers
Ger
man
y
Fra
nce
Oth
ers
9-12 c€/KWh 12-15 c€/KWh 15-18 c€/KWh 18-21
c€/KWh
21-30 c€/KWh 30-40 c€/KWh > 40 c€/KWh
Ele
ctri
city
pro
du
ctio
n(G
Wh
)
Countries clasified by PV cost ranges (c€/kwh)
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
Spa
in
Italy
Por
tuga
l
Fra
nce
Gre
ece
Oth
ers
Ger
man
y
Spa
in
Fra
nce
Italy
Oth
ers
Ger
man
y
Spa
in
Oth
ers
Ger
man
y
Spa
in
Oth
ers
Ger
man
y
Spa
in
Italy
Oth
ers
Ger
man
y
Fra
nce
Oth
ers
Ger
man
y
Fra
nce
Oth
ers
9-12 c€/KWh 12-15 c€/KWh 15-18 c€/KWh 18-21
c€/KWh
21-30 c€/KWh 30-40 c€/KWh > 40 c€/KWh
Ele
ctri
city
pro
du
ctio
n(G
Wh
)
Countries clasified by PV cost ranges (c€/kwh)
D2.5 Analysis of Solar Valleys of Opportunity 5
Figure 4. Contribution by country to the PV cost curve in 2020 [MWh]
2.3. Assessment of surplus potential by country, and region
Based on the results from task 2.2, Table 1 and Figure 5 shows the evolution of total solar
surplus throughout the studied period and its share compared to the total renewable electricity
surplus according to the NREAPS. By 2015 solar surplus will reach 13 GWh (5 GWh of PV and
8 GWh of CSP) and by 2020, 36 GWh (18 GWh of PV and 18 GWh of CSP).
Table 1. Solar and total UE surplus [TWh]
2015 2020
PV surplus 5 18
CSP surplus 8 18
Total solar 13 36
Total EU surplus 119 163
Ele
ctri
city
pro
du
ctio
n(G
Wh
)
Countries clasified by PV cost ranges (c€/kwh)
Contribution by country to each cost range [MWh]
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
Sp
ain
Ita
ly
Gre
ece
Cyp
rus
Po
rtu
ga
l
Oth
ers
Ge
rma
ny
Sp
ain
Fra
nce
Ita
ly
Po
rtu
ga
l
Oth
ers
Ge
rma
ny
UK
Fra
nce
Sp
ain
Oth
ers
Ge
rma
ny
Sp
ain
Oth
ers
Ge
rma
ny
Sp
ain
Oth
ers
Ge
rma
ny
Sp
ain
Oth
ers
Ge
rma
ny
Fra
nce
Oth
ers
7-9 c€/KWh 9-12 c€/KWh 12-15 c€/KWh 15-18
c€/KWh
18-21
c€/KWh
21-30
c€/KWh
30-
40
= 0
>40 c€/KWh
Ele
ctri
city
pro
du
ctio
n(G
Wh
)
Countries clasified by PV cost ranges (c€/kwh)
Contribution by country to each cost range [MWh]
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
Sp
ain
Ita
ly
Gre
ece
Cyp
rus
Po
rtu
ga
l
Oth
ers
Ge
rma
ny
Sp
ain
Fra
nce
Ita
ly
Po
rtu
ga
l
Oth
ers
Ge
rma
ny
UK
Fra
nce
Sp
ain
Oth
ers
Ge
rma
ny
Sp
ain
Oth
ers
Ge
rma
ny
Sp
ain
Oth
ers
Ge
rma
ny
Sp
ain
Oth
ers
Ge
rma
ny
Fra
nce
Oth
ers
7-9 c€/KWh 9-12 c€/KWh 12-15 c€/KWh 15-18
c€/KWh
18-21
c€/KWh
21-30
c€/KWh
30-
40
= 0
>40 c€/KWh
D2.5 Analysis of Solar Valleys of Opportunity 6
Figure 1 / Solar and other technologies surplus [GWh]
0
20
40
60
80
100
120
140
160
180
2015 2020
Other tech. surplus
CSP surplus
PV surplus
Figure 5. Solar and total EU surplus [TWh]
Analyzing the results in relative terms (Table 2), it could be concluded that solar energy could
represent 22% of EU total surplus by 2020, half of it from of CSP (11%) and half from PV
(11%).
Table 2. Solar surplus over total EU surplus [%]
2015 2020
PV surplus 5% 11%
CSP surplus 6% 11%
Total 11% 22%
Analyzing the surplus from a geographic perspective (Figure 6), EU solar surplus will be
mostly originated:
- In case of PV, by 2015, Spain stands as the country with the highest surplus (71%),
followed by France (20%). In contrast, by 2020 Germany stands as the country with the
highest surplus (67%) followed by France (28%). One possible explanation to this change
lies in that total German RES potential in 2015 is supposed to be used to cover its own
RES target, thus, having a reduced surplus. Over the next period 2015-2020, Germany is
expected to have a great increase in its RES potential, thus allowing for significant increase
of its surplus.
- In case of CSP, both 2015 ad 2020 surplus will be exclusively in Spain (100%).
D2.5 Analysis of Solar Valleys of Opportunity 7
Figure 2a / PV surplus, contribution by country [GWh]
France;2
France,
6
Germany
33
Spain
7
Spain; 1
0
2
4
6
8
10
12
14
16
18
20
2010 2015 2020Figure 2b /CSP surplus, contribution from Spain [GWh]
Spain;
18
Spain;
8
Spain;
20
2
4
6
8
10
12
14
16
18
20
2010 2015 2020
Figure 6. Contribution to solar surplus, country by country in 2015 and 2020 [TWh]
a) PV
b) CSP
3. OVERVIEW OF POTENTIAL SOLAR VoO
3.1. Geographic overview of most promising VoO for solar
a) Pair-wise analysis
Based on the previous analysis where the main “host countries” for solar technologies have
been identified, this section presents potential “user countries” for the solar surplus production.
The results are based on the pair-wise analysis carried out within task 2.2 of RES 4 Less, where
candidate VoOs have been identified by comparing the cost supply curves of each possible pair
of Member States in EU.
D2.5 Analysis of Solar Valleys of Opportunity 8
PV VoO in 2015
- Spain: Figure 7 shows the potential user countries for Spanish PV surplus in 2015.
Potential user countries interested in purchasing a significant amount of PV energy from
Spain would be: Belgium (3.8 TWh); Germany (3.8 TWh); Greece (3.8 TWh); Poland (3.8
TWh); Portugal (3.8 TWh); UK (3.8 TWh); Denmark (3.2 TWh); Italy (3.2 TWh); Czech
Republic (2.6 TWh); Netherlands (2.6 TWh); Bulgaria (2.1 TWh); Romania (1.2 TWh) and
Luxembourg (0.3 TWh).
PV - 2015: Spain as a host country
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Be
lgiu
m
Ge
rma
ny
Gre
ece
Po
lan
d
Po
rtu
ga
l
UK
De
nm
ark
Ita
ly
Cze
ch
Re
pu
blic
Ne
the
rla
nd
s
Bu
lga
ria
Ro
ma
nia
Lu
xem
bo
urg
Figure 7. Potential user countries for Spain PV VoO in 2015 – Pair wise analysis [TWh]
- France: The only potential user country for the PV surplus of France in 2015 is Germany
(0,9 TWh).
PV VoO in 2020
- France: Figure 8 shows the potential user countries for French PV surplus by 2020.
Potential user countries possibly interested in purchasing a significant amount of PV
energy from France are: UK, 5,1 TWh; Netherlands, 5,1 TWh; Poland, 4,4 TWh; Germany,
3,5 TWh; Greece, 3,5 TWh; Belgium, 2,7 TWh; Spain, 2,7 TWh; Italy, 2,3 TWh; Portugal,
2,3 TWh. Others with a minor amount are: Austria, 0,7 TWh; Bulgaria, 0,7 TWh; Czech
Republic, 0,7 TWh; Denmark, 0,7 TWh; Estonia, 0,7 TWh; Hungary; 0,7 TWh; Ireland,
0,7 TWh; Cyprus, 0,4 TWh; Slovak Republic, 0,4 TWh.
PV - 2020: France as a host country
0.0
2.0
4.0
6.0
8.0
10.0
12.0
UK
Net
herla
nds
Pol
and
Ger
man
y
Gre
ece
Bel
gium
Spa
in
Italy
Por
tuga
l
Aus
tria
Bul
garia
Cze
ch R
epub
lic
Den
mar
k
Est
onia
Hun
gary
Irel
and
Cyp
rus
Slo
vak
Rep
ublic
D2.5 Analysis of Solar Valleys of Opportunity 9
Figure 8. Potential user countries for France PV VoO in 2020 - Pair wise analysis [TWh]
- Germany: Figure 9 shows the potential user countries for the PV surplus of Germany in
2020. Potential user countries interested in purchasing a significant amount of PV energy
from Germany are: UK, 10.5 TWh; Netherlands, 6.4 TWh; Belgium, 3.2 TWh; Greece, 3.2
TWh; Poland, 3.2 TWh; Portugal, 3.2; Spain, 3.2 TWh; Italy, 2.3 TWh.
PV - 2020: Germany as a host country
0.0
2.0
4.0
6.0
8.0
10.0
12.0U
K
Ne
the
rla
nd
s
Be
lgiu
m
Gre
ece
Po
lan
d
Po
rtu
ga
l
Sp
ain
Ita
ly
Figure 9. Potential user countries for Germany PV VoO in 2020 - Pair wise analysis [TWh]
CSP VoO
- Spain-2015: Figure 10 shows the potential user countries for CSP surplus of Spain, both in
2015 and 2020. Potential user countries interested in purchasing a significant amount of
CSP energy from Spain in 2015 are: Germany, 1.2 TWh; UK, 1.2 TWh.
- Spain-2020: Figure 10 shows the potential user countries for CSP surplus of Spain, both in
2015 and 2020. Potential user countries interested in purchasing a significant amount of
CSP energy from Spain in 2020 are: Greece, 9.4 TWh; Netherlands 4.7 TWh; Poland, 4.7
TWh; Bulgaria, 2.4 TWh; Czech Republic, 2.4 TWh; Portugal, 2.4 TWh. CSP: Spain as a host country
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Ge
rma
ny
UK
Gre
ece
Ne
the
rla
nd
s
Po
lan
d
Bu
lga
ria
Cze
ch
Re
pu
blic
Po
rtu
ga
l
2015 2020
Figure 10. Potential user countries for Spain CSP VoO in 2015 & 2020 - Pair wise anal.
[TWh]
D2.5 Analysis of Solar Valleys of Opportunity 10
b) Global analysis
Besides the pair-wise analysis, In RES 4 Less task 2.2 also a complementary global analysis
has been carried out, where candidate VoOs have been determined by constructing a cost supply
curve for EU as a whole, and allocating the cheapest surpluses to replace the most expensive
RES-E options. The results reported in this section build on the outcome of the global analysis.
Global analysis in 2015
Figure 11 shows results from the global analysis for solar technologies in 2015. As can be seen,
potential host countries are France, Spain and Austria. PV is the only solar technology that
appears to be object of transaction. On the other side, potential user countries that reduce their
PV potential production are Germany, Poland and UK.
Global Analysis 2015: Eligible RES-E Potential -
Solar Breakdown
0
2
4
6
8
10
12
14
Fran
ce
Spai
n
Aus
tria
Den
mar
k
Slov
ak R
epub
lic
Cyp
rus
Hu
ngar
y
Esto
nia
Lith
uani
a
Bul
gari
a
Ger
man
y
Pola
nd UK
Elig
ible
RES
-E P
ote
nti
al [
TWh
]
CSP
PV
User CountriesHost Countries
Figure 11. Potential user & host countries for solar energy in 2015 – Global analysis [TWh]
Global analysis in 2020
Figure 12 shows the global analysis results for solar technologies by 2020. As can be seen,
potential host countries are France and Germany, both from PV energy. On the other side,
potential user countries that could reduce their solar production by purchasing cheaper RES
potential elsewhere are Spain (by reducing its CSP production) and UK and Poland (by
reducing their PV production).
D2.5 Analysis of Solar Valleys of Opportunity 11
Global Analysis 2020: Eligible RES-E Potential -
Solar Breakdown
0
2
4
6
8
10
12
14
Fran
ceG
erm
any
Den
mar
kSw
eden
Irel
and
Rom
ania
Finl
and
Aus
tria
Slov
enia
Slov
akH
ung
ary
Esto
nia
Lith
uani
aB
ulga
ria
Spai
nPo
land U
K
Elig
ible
RES
-E P
ote
nti
al [
TWh
]CSP
PV
User CountriesHost Countries
Figure 12. Potential user & host countries for solar energy in 2020 – Global analysis [TWh]
3.2. Historical and policy development of the identified VoO
This section is intended to analyze the modelling results in the context of the RES historical
development and policy support in each of the potential host countries identified: Germany,
France and Spain.
PV results
Since 2000, PV production worldwide has experienced a rapid increase. Nowadays, Asia stands
as the highest producer (more than 60%) and Europe is the leader in terms of renewable energy
investment, mainly due to the increased investment in small-scale solar installations in Germany
and Italy.
As described by the Joint Research Centre (JRC, 2011), in the last decade, Europe has
experienced a rapid increase of generation capacity from 185 MW in 2000 to 29.5 GW in 2010.
Last year, PV capacity was nearly doubled thanks to the installation of 13.5 GW (Figure 13).
D2.5 Analysis of Solar Valleys of Opportunity 12
Source: JRC (2011)
Figure 13. Annual photovoltaic installations from 2000 to 2010 [MWp]
This section will focus on the analysis of the historical and policy context of the countries
identified in the last section (JRC, 2011):
- France: After the great increase of capacity experienced in 2010 (720 MW, reaching a
cumulative capacity of 1.05 GW), feed-in scheme was revised in February 2011: [i] a cap
of 500 MW for 2011 and 800 MW for 2012 was set up, and [ii] new tariffs were fixed:
0.29-0.46 €/kWh for roof-top, depending on the categories; and 0.12 €/kWh for the rest.
- Germany: The market growth of PV sector in Germany is due to the feed-in system
introduced by the Renewable Energy Source Act in 2000. The guaranteed tariff for 20 years
from PV systems has a fixed built-in annual decrease that has been reduced over time on the
base of price reductions due to high growth rates. By 2010, Germany had the largest
installed capacity in EU (7.4 GW) and the the market experienced two peaks of installation:
in June, 2.1 GW and December, 1.2 GW. Both peaks are prior to the 13% feed-in tariff
reduction that took effect in July 2010 and January 2011. Cumulative reduction of feed-in
tariff during 2010 reached 33-36%.
- Spain has the second cumulative installed capacity in Europe (with 3.9 GW), most of it
installed in 2008 (2.7 GW). This increase was a consequence of an increase of feed-in tariff
set in 2007. Given the rapid unforeseen expasion, in autumn 2008, the Spanish Government
introduced a cap of 500 MW in the yearly installation and a reduction in feed-in tariffs. As a
result of the new legal framework, 100 MW of capacity were installed in 2009 and 380 MW
in 2010. At the end of 2010, the Spanish Government limited the feed-in tariffs to 28 years
and fixed a limit of hours to which feed-in tariffs could be given. Both changes affect
installed plants, so the PV sector has taken legal actions on the base of retroactivity.
D2.5 Analysis of Solar Valleys of Opportunity 13
CSP results
As described by ESTELA (2009), technical viability of CSP technology has been demonstrated
since the early 80´s, mainly by the operation of two plants located in Almería (Spain) and
Albuquerque (U.S.A.). Commercial development of CSP started on the second half of 80´s with
the installation of nine plants (400 MW) in the Mojave Desert (California). During the 90´s the
deployment of CSP stopped due to the lack of effective supporting systems. This situation
changed with new requirements in some states of the U.S.A. and the new feed-in tariff system in
Spain. Yet, since 2000, several test loops of real size were installed in the U.S.A and Spain to
provide financial institutions with technical evidence in terms of feasibility and performance.
Thanks to these changes and the R&TD programs carried out in several countries (Germany,
Spain, Italy, U.S.A., etc.), in mid 2007 operation of a plant with a new generation of parabolic
trough collectors in Nevada (USA) (64 MW) and the first commercial power plant of a central
receiver in Seville (Spain) (10 MW) started. Since the end of 2008, the first European parabolic
troughs plant with storage is operating successfully in Granada (Spain).
The Spanish feed-in tariff system provided the right incentives to many Spanish companies to
participate in solar thermoelectric projects. Partly due to past and current favourable Spanish
regulatory scheme as well as due to optimum climatic conditions, a remarkable promotion of the
solar thermal industrial activity has taken place in Spain. As stated by the Royal Decree (RD
661/2007), a 0.27€/KWh fare1 for the electricity generated by solar thermal technologies, added
to the possibility to construct mixed plants with gas2, has generated a great interest for solar
concentration technologies among investors and the Spanish industrial sector. Since the
construction of the first CSP plant in 2006, a rapid increase of projects has taken place. As a
result of it, by the end of 2010 total installed capacity reached 632MW, most of them parabolic
trough (95%) but also some central receiver plants. Moreover, the recently approved Spanish
Renewable Energy Plan 2011-2020 considers a solar thermal installed capacity of 4.800 MW by
2020. Its associated energy production amounts to 14.379GWh, which accounts for
approximately 10% of the total RES (renewable energy sources) energy forecasted production
by 2020. Based on national NREAP´s, other countries forecasted an increase in its CSP capacity
by 2020: Italy (600 MW); Portugal (600 MW); France (540 MW) and Greece (250 MW).
1 The RD 661/2007 established that solar thermal producers can choose between: [i] obtaining a fix fare of
0.27€/KWh for the energy or [ii] selling it in the electricity market, taking in the price paid for the energy in the
market plus a 0.25 €/kWh premium - with a minimum turnover (considering the price of the market and adding
the premium) guaranteed of 0.25 €/kWh and a maximum limit of 0.34 €/kWh. 2 Between 12% to 15% to compensate for any heat losses during the process.
D2.5 Analysis of Solar Valleys of Opportunity 14
4. Assessment of constraints on VoO for solar in selected countries
4.1. Specific PV constraints
The European project PV LEGAL, supported by Intelligent Energy Europe programme, has
identified some of the most relevant administrative hurdles for PV systems. This section
summarizes some of the main barriers detected by PV LEGAL project for Spain; France and
Germany.
Germany - Medium and large-scale ground installations3
Site selection and administrative barriers:
- Granted feed-in tariff limited to areas with an urban development plant. Additional requirements
in case of urban development plan created or altered after 1/9/2003.
- Installation limited to ecologically less valuable areas.
- Long time invested in searching optimum areas for installation and in negotiations with the
owners of areas of the future installation.
- Prohibition of installation in certain areas marked in the Germany Renewable Energy Law
(EEG).
- Long process when the urban and land plans are modified: preliminary planning permission by
the municipal council and then, various municipal council meetings.
Grid connection permit barriers:
- Technical standards for grid safety 4 have been criticized by planners, installers and operators.
- Network operators are not complying with the obligation of expanding their networks envisaged
on the German Energy Industry Law.
- Problems for medium-small systems in rural areas with lines in poor conditions because the
EEG Law established that the extension is considered reasonable when its costs do not exceed
25% of commissioning up the system.
Grid connection and operation barriers:
- Slow and expensive proceedings.
- Critical problems with the application of a connection point.
- Problems with the allocation of the technically and economically most favourable connection.
- The procedure of connecting to the grid is not completely regulated, so grid operators have a
margin to make the connection of a system more difficult.
- Appearance of disputes about when feed-in tariff payments are made.
Corporal legal-fiscal barriers:
- Some municipalities refuse to allow PV settlement arguing unclear distribution of revenEUs
from business tax and no economic benefits from granting a license.
- In most cases, modifications of land or urban development plans are required for granting feed-in tariff payments.
Source: PV LEGAL project (Persem et al., 2011)
3 It should be noted that barriers in Germany are not as severe as in Spain or France, but still remain high
barriers. 4 Defined by FNN committee (Forum Network Technology/Network)
D2.5 Analysis of Solar Valleys of Opportunity 15
Spain - Medium and large-scale size installations (>10 MW)
Site selection barriers:
- Limited to municipalities within the General Urban Plan.
- Problems in the evacuation to the electrical network, which is often saturated
Administrative process barriers:
- Complex and time-consuming permitting procedures related to small systems.
- Delays in the response from Authorities.
Grid Connection Permit barriers:
- Opacity in the information from electricity retailers regarding the capacity of energy evacuation.
- Delays in obtaining a response from electricity retailer.
- High connection costs by electricity retailers (sometimes unjustified).
- Fixed study costs by some electricity retailers (expensive for small projects).
Support scheme barriers
- The payment of works licence and the guarantee is required before obtaining the assignment, so
the risk of non-allocation must be considered.
- Uncertainty on future retribution: inclusion in the Pre-registry depends on the quantity of
systems in the waiting list.
Financing barriers
- Many problems exist when looking for financing sources (especially for small systems).
Electricity production barriers
- Problems with concession of access and connection to transmission or distribution grid often
dEU to high saturated points -especially in low voltage grids-.
Source: PV LEGAL project (Collado and Dólera, 2011)
France – Medium and large-scale ground installations (4,5-12 MWp)
Site of selection barriers:
- Livestock Operation Permit (LOP) has to be modified in case of agricultural areas.
Administrative process barriers:
- Appeal by a 3rd
party against the building permit: it could be made within 2 months counting
from the notification of the building permit. In case of a 3rd
party appeal, the administrative
court is referred and the permit risks being annulled.
- Feed-in tariff is restricted to <12MWp installations.
Grid connection permit barriers:
- Technical constraints relative to grid reception capacity.
- The time required since the start of the project to its connection could range between 39-220
weeks. Grid management procedures are very time consuming, being one of the main reasons of
the delays.
Grid connection & operation barriers:
- Several difficulties in introducing the installation with respect to the grid. The metre point must
be on the edge of the property, the connection works between the PV installation and the metre
point are borne by the owner.
Source: PV LEGAL project (Roland, S. and Elamine, W., 2011)
D2.5 Analysis of Solar Valleys of Opportunity 16
4.2. Specific CSP constraints
Based on the CSP contribution to sustainable energy analysis conducted by EASAC(2011) ,
some of the barriers for this technology are:
Technology barriers:
- Higher R&D is need in the search of new materials. There is scarce implementation of
innovate mechanisms in certain fields as compressed gas as heat transfer fluid; molten salt
for storage for parabolic troughs, etc.
- The complexity and risk associated to the operation and maintenance of the plant is so high
that it is required that more than one company back up the contractual agreement of this
service.
- Sometimes it is argued that CSP (with or without storage) has little contribution to electric
system stabilization services, referred to regulation5 or non-spinning reserves
6 services
(Sioshansi and Denholm, 2010).
- Preferred locations for CSP plants are arid places due their high solar resource. On the other
side, CSP installations use a significant amount of water, due to their cooling system
requirements. Unfortunately, as water availability in arid locations is low, it is desirable to
reach an improvement in performance of air cooling systems in order to reduce water
consumption by CSP plants.
- Despite the rapid expansion of solar trough and more recently tower system, commercial
application of other technological options as Linear Fresnel and parabolic dishes has not
been reached yet.
Economic and market barriers
In general terms, one of the main challenges of CSP is to reach a significant reduction on costs
and, simultaneously, to do it in a short period of time. Half of this reduction is expected to come
from technology developments and half, from economies of scale and volume production. At
the same time it is necessary to set up mechanisms to control the true value of electricity to the
grid and the ensure transparency of cost data. Besides, appropriate design of funding schemes
could contribute to improve competitiveness of CSP. More specific issues are mentioned below:
5 The inherent storage in the steam generator is small and the inertia of other plant components
prevents a sufficiently fast response. 6 CSP plant will be running and delivering electricity, not keeping in reserve, or if shut-down may not
be able to be started up quickly enough.
D2.5 Analysis of Solar Valleys of Opportunity 17
- CSP costs are highly dependent on plant characteristics. In this sense, it is necessary to
collect site and plant specific data to conduct a profitability analysis:
Annual production depends on: technology; size of the plant; availability of solar
resource and storage capacity.
Engineering, Procurement and Construction (EPC) costs depends on: technology
choice; site conditions or land cost.
Operation and maintenance costs (O&M) depend on: technology; site or availability of
water.
Project development costs depend on: characteristics of the country; legal framework;
currency exchange risks and tax and customs duties.
- Solar field installation costs are relatively high.
- It is difficult to quantify some additional cost as impact on landscapes; specific
charges on water or displacement of agriculture.
- There is no consensus on the potential impact on costs reduction due to increases in
scaling plants.
- Related to profitability analysis of CSP plants data have to be collected at plant
level, but also at energy system level. With this regard, Nagl et al. 2011 have
shown, for example, that with current economic cost it is not worthy to invest on
storage system, at least in the short-medium term. This is due to opportunity cost of
storing energy instead of selling it during price peaks.
4.3. Grid constraints
As indicated by ENTSOE (2010) in their Network Development Plan 2010-2020, the main
investment needed in the South-West of Europe is the interconnection between France and
Spain. Currently, the Iberian Peninsula only has four tie-lines that are continually congested.
France and Spain have the goal to increase their transfer capacities: to 2800 MW in the short
term and 4000 MW in a long term.
On the other side, the ambitious renewable plans in Portugal and Spain need an important
investment in transmission infrastructure. Portugal and Spain have the goal to avoid current
congestions and improve the Iberian Electricity Market (MIBEL) increasing their Net Transfer
Capacity (NCT) up to 3000 MW.
This problem also applies outside the Iberian Peninsula. Some of the most important flues that
can be developed are: France-Italy (where most of the networks are congested); France-
England; France-Belgium. Germany has long energy flues from the North to the South. Also
there are interconnection flues between Germany and south countries (mainly Italy) that
contribute to improve the cross border capacity.
D2.5 Analysis of Solar Valleys of Opportunity 18
5. Deployment path for VoO for Solar in case study region
Based on the considerations above, the following steps have been identified to implement a case
study related to solar VoO:
i. Identification of host-user pair of countries.
In the context of the RES 4 Less project, and taking into account the strong status reached by
PV technology in a short period of time, it seems more innovative to explore those possibilities
linked to CSP deployment. In this sense, the case study will be focussed on Spain as the most
probable candidate to become a CSP host country (given the current deployment of the
technology). With regards to user countries identified in the section devoted to CSP VoO
(Figure 10), and focussing the attention on the long term (2020), Greece figures as one of the
main potential host countries. Nevertheless, taking into account the current difficulties of the
Greek economy, it seems convenient to focus the attention on an alternative country as
Netherlands. Consequently, the case study will analyze the potential attractiveness of RES
cooperation agreements between Netherlands and Spain.
ii – Identification of the institutions that will be engaged in negotiating process.
The following institutions should be involved: [i] a public department or agency that works in
the energy sector and [ii] an independent institution with the capacity to certify.
At this moment in time, these kinds of institutions have been identified for the case of Spain:
- National Institute of Diversifying and Saving Energy (IDAE) will act as the public agency
devoted to participate in the cooperation mechanisms negotiating process.
- National Commission of Energy (CNE) will be responsible of certifying the content of
final agreements.
iii – Determine which kind of cooperation mechanism will be used.
After discussing about the different cooperation mechanisms during the Stakeholder
Consultation Meeting in Madrid, representatives from the Spanish National Institute of
Diversifying and Saving Energy (IDEA) transmit that Spain is not interested on the
implementation of statistical transfer or joint support scheme. In this sense, joint projects stands
as the most probable option to implement cooperation mechanism in Spain. The pros and cons
of each cooperation mechanism should be deeply analyzed (Klessman, 2010) in the subsequent
case study that will be conducted in the next work package of the RES 4 Less project.
iv – Estimate the overall cost of the transaction.
In order to reach an agreement, the direct costs and all the associated or indirect costs will be
estimated. In the field of indirect costs, the potential environmental impact associated to more
carbon intensive energy mix for the user country stands out. Moreover, other indirect cost as
deterioration of energy security and not deploying local RES industry in the user country will be
analyzed. These kinds of externalities will be taken into account in the case study, both for user
and host country, in order to inform the potential negotiation process.
One additional challenge in all bilateral negotiations is the fact that most of those indirect costs
and benefits are often hard to identify, quantify and let alone monetize. Previous research shows
that there are various methodological approaches that can help policy makers in this endeavour.
With regards to environmental impact, depending on the pollutant: [i] GHG emissions can be
D2.5 Analysis of Solar Valleys of Opportunity 19
estimated through carbon markets, and [ii] other environmental externalities through the
"impact pathway approach" (EC, 2005). Finally, socio-economic impacts can be estimated
trough input-output analysis (Withley et al., 2004, Hillebrand et al., 2006, Caldés et al. 2009) or
similar approaches (Ragwitz et al., 2009). Additional aspects as, the cost of integrating RES in
the system requires two different estimations: [i] the cost of system operation, estimated
through the additional capacity needed to maintain system security and [ii] the grid
reinforcement cost, estimated through load flow simulations of national transmission and
distribution grids (Auer et al., 2006).
v – Analyze additional aspects.
Finally, other very relevant aspects (i.e. associated risk and technical requirements such as grid
capacity, etc.) will be carefully analyzed.
D2.5 Analysis of Solar Valleys of Opportunity 20
6. Conclusions
The analysis conducted in previous tasks 2.1 and 2.2 of WP2 shows that, based on insights from
NREAPs and given German´s PV and Spain´s CSP surplus potential, Germany and Spain stand
as potential donors of PV and CSP, respectively. When the scope of the analysis is broadened
by including cost data, it appears that the most cost-competitive countries for solar energy
production are located in South Europe and Germany. When comparing technologies, it could
be concluded that PV is more cost competitive than CSP and also it is expected to reach higher
cost reduction due to learning effects.
Summarizing, when taking into account total RES surplus in EU, the assessment shows that:
- By 2015, 11% of total EU surplus will come from solar sources. In regional terms, most of
PV solar surplus will be concentrated in Spain and France. In the case of CSP solar
surplus, all of it will come from Spain.
- By 2020, 22% of total EU surplus will be originated from solar sources. In regional terms,
most of PV solar surplus will be concentrated in Germany and France. In the case of CSP
solar surplus, Spain continue to be the leading country.
When the integration of cost data and Member States RES targets is taken into account in the
analysis to identifying potential Solar Valleys of Opportunity (that means to detect potential host
and user countries of RES targets), results indicate the following:
- Firstly, when conducting the pair wise analysis and focusing the attention on PV
technology, results show that by 2015, the main host countries are: (i) Spain - with
Belgium, Germany, Greece, Poland, Portugal and UK as potential user countries - and (ii)
France -with Germany as potential user country. When looking at 2020, the scene
changes, as Spain does not appear as potential host country for PV. By 2020 (i) Germany
emerges with a great surplus potential in 2020 - with UK and Netherlands as potential users
-, and (ii) France maintains its position as potential host country in 2020 - with UK, the
Netherlands, Poland, Germany and others as potential user countries.
- Secondly, by conducting the pair wise analysis and focusing the attention on CSP
technology, results highlight that both by 2015 and 2020, Spain stands out as the only host
country of CSP in EU. Potential user countries will change from 2015 - with Germany and
UK as main candidates -, to 2020 - in which Greece, the Netherlands and Poland appear as
main potential user countries.
- Thirdly, when conducting the global analysis and focusing the attention on solar
technologies, results highlight that by 2015 Spain and France stand out as main host
countries, both as PV producers. On the other side, Germany appears to be a user country
by reducing its own PV production. Morevoer, and similarly to the pair-wise analysis
results, by 2020, France and Germany stand as main host countries, both as PV producers
and Spain figures as a potential user country by reducing its CSP production.
After conducting this quantitative analysis, a more qualitative review has been conducted to
identify potential constraints for the development of solar technologies. Some legal;
administrative and grid barriers for PV and CSP have been identified in those countries with a
higher solar resource, i.e. Spain, France and Germany.
Finally, a first draft deployment path has been conducted in order to identify those countries,
authorities, type of mechanism, cost-benefits and additional aspects that should be taken into
D2.5 Analysis of Solar Valleys of Opportunity 21
account and more deeply analyzed within the case studies that will be implemented in the next
work package of the RES 4 Less project.
D2.5 Analysis of Solar Valleys of Opportunity 22
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