Welcome to Don Rodrigo Europe's first subsidy-free …...Europe's first subsidy-free utility-scale Solar Project Welcome to Don Rodrigo Dr. Benedikt Ortmann, Director Solar Projects

Europe's first subsidy-free utility-scale Solar Project

Welcome to Don Rodrigo

Dr. Benedikt Ortmann, Director Solar Projects

Introduction of BayWa

Case study: a utility-scale subsidy-free plant in Spain 2

Don Rodrigo – Europe's Solar Milestone

Cooperative

of bavarian

farmers

Listed on German

Stock Exchange

Largest German

Agricultural Company

Market leader

in Smart Farming

Founded

in 1923

Turnover 2017

€17 billion

EBIT 2017

€171.3 million

Employees

17,550

Locations

More than 3,000

locations in 40 countries

19231930

1947

1960

2018

3

https://www.90jahre-baywa.de/chronik/krieg_neuanfang

BayWa r.e. – dynamic growth and sustainable profitability

Turnover 2018

Founded

1.4 billion €

2009

Gathering our combined

market experience under the

BayWa r.e. umbrella

EBIT 2018

Experience

75 million €

3,000 MW

Development and realization

of projects in the area of solar,

wind power, bioenergy and

geothermal energy

Employees

Company

1,500

Wholly owned subsidiary

of BayWa AG

our stable parent company

Don Rodrigo – Europe's Solar Milestone 4

BayWa r.e. location

Active in the market

Wind power projects and services

Geothermal energy (Germany only)

Trading in solar components

Bioenergy

Energy tradingH

PV projects and services

H

Our Global Footprint



Grid Parity is happening

6

In 2012 we started Europe’s solar milestone

project on a green field


The selection of the country1. The story of Don Rodrigo – How we achieved Europe‘s Solar Milestone Project

Why Spain?

As we planned to build this project unsubsidized, there was no concern major about politics in Spain


Stable

currency

Stable

economyOECD

countryIdeal solar

irradiation zone

The selection of the site

1. The story of Don Rodrigo – How we achieved Europe‘s Solar Milestone Project


Land Requirements

The decent site characteristics offered the optimal basis to build this extraordinary project.

No major

compensatory

measures required

Relatively flat

underground

Reasonable

price for the

lease

270 ha Spatially

coherent

No environ-

mental limits

for flora

and fauna

Grid con-

nection nearby

9

Detailed and comprehensive project design from the start1. The story of Don Rodrigo – How we achieved Europe‘s Solar Milestone Project

Approval steps

Request to Red Eléctrica

for grid connection capacity

The planning process was following the same process as for a conventional power plant

Environmental

impact

declaration

Permitting process at

ministerial level & a grid

extension was required

Soil group

compatibility

statement


Shutterstock: 148095986

Local community Commitment is a key element

Benefit for the community

Local support and local commitment was a key element of the project success

– more than 200 new jobs were created and local workers are employed.


Yearly local tax of up to 4 Mill. €

will remarkably lift incomes

Our Partners

Ansasol S.L., Prodiel,

the local municipality

11

Optimized technical planning process for most efficient use of land1. The story of Don Rodrigo – How we achieved Europe‘s Solar Milestone Project

String inverters and fixed-tilted technology

▪ Simple module exchange, simple maintenance

▪ Independency from the manufacturer for 20 years

▪ No standardized pavement needed, more flexibility

for module tables

▪ 2,000 flexible string inverters adapting to the specific

land conditions

▪ Flexibility, simplicity and independence means lower costs

▪ 1-axis would have brought less than 155 MW

➢ Availability, performance and reliability of string

inverters optimize the quality of the plant‘s

production and lower the total costs of

ownership significantly


Overall state-of-the-art System Design1. The story of Don Rodrigo – How we achieved Europe‘s Solar Milestone Project

The electricity are transformed on-site

up to 220kV by its own substation

Decentral inverter concept leads to

▪ A maximum of availability

on PV-plant-level

▪ Ease of maintenance,

low risk for replacements

▪ Reduced cost

Specific string construction in the

lower row and one in the upper

row minimizes shading losses

at dusk and dawn

Strings deliver the produced

electricity to a string inverter

Module tables with 2 module

rows each

Overhead cable lines with an

approx. length of 2.6 km will be

connected to an existing substation

owned by the transmission

grid operator Red Eléctrica

de España (REE)

27 – 29 panels

assembled in strings

Substructure Zimmermann

InvertersHuawei 60 KTL

and 100 KTL

Panel type Crystallin

Panel

manufacturerAstronergy & GCL


We leveraged the full potential of our site’s advantages

by designing a perfectly tailored system.

13

Don Rodrigo – Facts & Figures1. The story of Don Rodrigo – How we achieved Europe‘s Solar Milestone Project

Sevilla – Andalucía, Spain

▪ Europe’s 1st subsidy free Solar Project of its scale

▪ Capacity: 175 MWp

▪ Equivalent to the consumption

of 93.000 average Spanish households

▪ 198.000t CO2 emission reduction annually

▪ Largest subsidy-free project in Europe

▪ 1.500V DC and connection to REE’s substation at 220kV

▪ 3000km DC cable, 160km AC cable, 7,000 tons structure, more than

500,000 modules were processed (800 containers)

▪ Site has a size of approx. 270 ha, equivalent to 190 football fields

▪ First project in Spain with a long term PPA of 15 years together with

Statkraft, one of Europe’s largest generators of renewable energy

▪ Commissioning is planned for Q2/2019


Simon KornekHead of Continental long-term

Portfolio at Statkraft

14

Don Rodrigo was fully erected in 9 months


All about Grid Parity – and how Photovoltaic Energy is disrupting the market


0

2

4

6

8

10

12

14

16

18

20

What is grid parity?

The 3 levels of grid parity

Cost o

f E

ne

rgy in

Con

ts/k

Wh (

$ 2

00

5)

Residential and Commercial Rates


Source: US Department of Energy

The ultimate goal – to produce Solar Energy cheaper than conventional energies – has now reached!

Wholesale price level Production price level Consumer price level

Utility Generation

Consumer price level

Easiest to achieve as cost of energy

are similar to high end-consumers prices

Wholesale price level

Comparable to the regular price,

to which municipal utilities purchase energy

Production price level

Same cost of energy production as classic

electricity utilities companies

17

Renewable Energy outperforms every other new energy form2. Grid Parity – Deep Dive

LCOE Comparison of Energy Technologies in Europe

Source: EU reference scenario 2020

13

11

8,5

6,3

5

4

0

2

4

6

8

10

12

14

New hydro New nuclear New gas New coal New wind New PV

Cent/kWh


Renewable Energy outperforms every other new energy form2. Grid Parity – Deep Dive

LCOE Comparison of Energy Technologies in Europe

Source: EU reference scenario 2020

13

11

8,5

6,3

5

4

0

2

4

6

8

10

12

14

New hydro New nuclear New gas New coal New wind New PV

Cent/kWh

Photovoltaic is the

cheapest power sourcein the history of mankind


Ingredient No. 1: radiationZones with ideal grid parity conditions are spread north

and south of the equator


North AustraliaSubsahara

North Africa

Mexico

Chile

20

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

1,60

1,80

04.09.2009 09.10.2010 13.11.2011 17.12.2012 21.01.2014 25.02.2015 31.03.2016 05.05.2017 09.06.2018 14.07.2019 17.08.2020 21.09.2021

January 1st 2020

Ingredient No. 2: EPC cost

2020 : 20In 2020 panel prices will go below 20 Cent/Wp

Source: pvinsights weekly module price index China poly Index Interpolation

US$/Wp


The panel remains at ~50% of construction costs

Source: NREL (utility-scale PV system costs benchmark summary (inflation adjusted), 2010 – 2017

2018ff: data projection BayWa

Comparison of the CAPEX Split for a PV installation

67%67%

51%46% 48% 51% 54%

49% 47% 47% 46% 46%

3,61

3,25

2,13

1,621,43

1,29

1,08

0,710,53

0,45 0,42 0,40

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Module Inverter Hardware BOS Labour BOS

US-$ per Wp

1

Phase of panel shortage

22

Ingredient No. 3: Sufficient electricity prices

Don Rodrigo – What Is Grid Parity? 23

0

10

20

30

40

50

60

70

80

Average 18y: 37.7 €/MWhAverage 10y: 40.8 €/MWh

Average Spot Power Price Germany (EUR/MWh, real prices)

42,1 41,8 41,7 41,4 41,1 42,0 42,6 42,4 41,9 41,4 42,1 41,4 41,1 40,5 39,9

11,8

8,6 8,3 8,1 8,1 8,1 8,0 7,9 7,9 7,9 7,9 7,9 7,9 7,9 7,9

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

LCOE development Don Rodrigo- real money 2019 (no inflation) -

Average LCOE 25 €/MWh

scenario: high

scenario: central

scenario: low

Power price forecast Spain 2018-2048- generation weighted, real money 2019 -

annual LCOE

depreciation

interests

operation & maintenance cost

€ / MWh

op. year:

24

LCOE development Don Rodrigo

Annual Cost Of Electricity (ACOE)

What is particularly disruptive with solar energy?

… and many more

It does not harm the nature

(green field or roof)

It is made for decentralized energy grids

(rural electrification)

It is easy to install It is easy adopt to the landscape

It is durable

(40+ years of production)

It is the cheapest!

It does not effect people‘s life quality

(no emissions, not even shadows etc.)

It is easy to scale (every single cell is already

a generator of its own)

It is reliable

(very low volatility)

PPAs –new for renewables, but well known in

conventional energies


Overview about PPA (1/2)3. PPAs – Our major contribution to support the European Energy Transition


The more of the generated

power is taken off, the better!

A fixed price period secures

cash flows in the beginning of the

investment, which strengthens

the business case.

The duration of the PPA term

determines the possible duration

of the long term debt!

Secure the offtake of

the electricity generated

Maximize the term of

the offtake agreement

Have a fixed price period

in the beginning

27

Overview about PPA (2/2)3. PPAs – Our major contribution to support the European Energy Transition


Having a flexible pricing lateron helps both counterparties

Switch to a floor price scheme later

The offtaker is

secured against falling

prices over time

The producer is

secured against

the worst case

If prices rise,

both profit

Choose experienced and bankable counterparts

Provided guarantees by the producer

The bankability of the PPA is linked to the

insolvency risk of the offtaker

28


Future outlook on the PV market in Europe

29

Many global companies have committed to a 100% renewable energy future


4. The Future of utility-scale solar in Europe

30

Transition to fully merchant market is in progress4. The Future of utility-scale solar in Europe

The study was performed 2016 by the Bequerel Institute, Brussels

Grid Parity spreads across Europe

The expected price developments of whole

sale electricity in each country

It based on

The solar irradiation map

Expected price developments in EPC

and material costs for photovoltaic

Grid connection costs

It does not contain

Possible differences in land and development costs


Dr. Benedikt Ortmann

BayWa r.e. Solar Projects

[email protected]

Documents

Welcome to Don Rodrigo Europe's first subsidy-free …...Europe's first subsidy-free utility-scale Solar Project Welcome to Don Rodrigo Dr. Benedikt Ortmann, Director Solar Projects