Energy from the Desert: Feasability of Very Large Scale Power Generation (VLS-PV) [1 ed.] 9781134276660, 9781902916415

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Energy from the Desert

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First published in 2003 by James & James (Science Publishers) Ltd. This edition published 2013 by Earthscan For a full list of publications please contact: Earthscan 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Earthscan 711 Third Avenue, New York, NY 10017 Earthscan is an imprint of the Taylor & Francis Group, an informa business © Photovoltaic Power Systems Executive Committee of the International Energy Agency The moral right of the author has been asserted. All rights reserved. No part of this book may be reproduced in any form or by any means electronic or mechanical, including photocopying, recording or by any information storage and retrieval system without permission in writing from the copyright holder and the publisher. A catalogue record for this book is available from the British Library ISBN 978-1-90291-641-5 (hbk) Cover image: Horizon Stock Images / Michael Simmons

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Neither the authors nor the publisher make any warranty or representation, expressed or implied, with respect to the information contained in this publication, nor assume any liability with respect to the use of, or damages resulting from, this information. Please note: in this publication a comma has been used as a decimal point, according to the ISO standard adopted by the International Energy Agency. At Earthscan we strive to minimize our environmental impacts and carbon footprint through reducing waste, recycling and offsetting our CO2 emissions, including those created through publication of this book.

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Contents

Foreword Preface Task VIII Participants List of Contributors Acknowledgements COMPREHENSIVE SUMMARY Objective Background and concept of VLS-PV VLS-PV case studies Scenario studies Understandings Recommendations EXECUTIVE SUMMARY A. Background and concept of VLS-PV A.1 World energy issues A.2 Environmental issues A.3 An overview of photovoltaic technology 6

A.3.1 Technology trends A.3.2

Experiences in operation and maintenance of large-scale PV systems

A.3.3 Cost trends A.3.4 Added values of PV systems A.4 World irradiation database A.5 Concept of VLS-PV system A.5.1

Availability technology

of

desert

area

for

PV

A.5.2 VLS-PV concept and definition A.5.3 Potential of VLS-PV: advantages A.5.4

Synthesis in a scenario for the viability of VLS-PV development

B. VLS-PV case studies B.1 General information B.2

Preliminary case study of VLS-PV systems in world deserts

B.3

Case studies on the Gobi Desert from a life-cycle viewpoint

B.4 Case studies on the Sahara Desert B.5 Case studies on the Middle East desert C. Scenario studies and recommendations C.1 Sustainable growth of the VLS-PV system concept

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C.2 Possible approaches for the future C.3 Financial and organizational sustainability C.4 Recommendations C.4.1 General understandings C.4.2 Recommendations on a policy level C.4.3 Checklist for specific stakeholders PART I: VLS-PV

BACKGROUND AND CONCEPT OF

1. World energy issues 1.1

Long-term trend in world primary energy supply and demand

1.2 Potential of renewables 1.3 Trends in the PV market 1.3.1

PV module production and PV system introduction in the world

1.3.2

Perspectives of the PV market

References 2. Environmental issues 2.1 Global environmental issues 2.1.1

Observed change in the global climate system

2.1.2

Projections of the future climate

2.1.3

Projected influences by climate warming 8

2.1.4

Recent progress for mitigating the projected future climate

2.2 Regional and local environmental issues 2.2.1

Acid rain

2.2.2

Desertification and land degradation

2.2.3

Biodiversity and natural systems

2.3 Expected impacts and approaches for VLS-PV References 3. An overview of photovoltaic technology 3.1 Basic characteristics of photovoltaic technology 3.2

Trends in government budget relating to PV programmes in three regions

3.3 Trends in solar-cell technology 3.3.1

Crystalline silicon solar cells

3.3.2

Thin-film solar cells

3.3.3

Technologies in perspective

3.4 Trends in PV system technology 3.4.1

Technologies in perspective

3.4.2

Estimation of electricity production from PV systems

3.5 Trends in power transmission technology 3.5.1

A.C. power transmission

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3.5.2 3.6

D.C. power transmission

Experiences in operation and maintenance of large-scale PV systems 3.6.1

Operation information

and

maintenance

3.6.2

Long-term performance

cost

3.7 Cost trends 3.7.1

Recent trends in PV system and component prices

3.7.2

Trends in PV module costs

3.7.3

Long-term cost perspectives

3.8 Added values of PV systems 3.8.1

Research activities on added values of PV systems in IEA/PVPS

3.8.2

A case study for added values of PV systems – ‘utility benefits’

References 4. World irradiation database 4.1 The JWA World Irradiation Database 4.2 Negev Radiation Survey 4.3 WRDC solar radiation and radiation balance data 4.4 BSRN: Baseline Surface Radiation Network

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4.5

NOAA NCDC GLOBALSOD: global daily WMO weather station data

4.6 METEONORM v4.0 (edition 2000) 4.7 SeaWiFS surface solar irradiance 4.8 LaRC Surface Solar Energy dataset (SSE) 4.9 ISCCP datasets References Website addresses 5. Concept of VLS-PV 5.1 Availability of desert areas for PV technology 5.1.1

Availability of world deserts

5.1.2

Estimation of PV system potentials utilizing world deserts

5.2 VLS-PV concept and definition 5.3 Potential of VLS-PV: advantages and disadvantages 5.4

Synthesis in a scenario for the viability of VLS-PV development

5.5 Market trends relevant to VLS-PV 5.5.1

End-users, stakeholders and needs

5.5.2

Market trends in non-OECD countries

5.5.3

Market trends in OECD countries

References

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PART II: VLS-PV CASE STUDIES 6. General information 6.1 Distribution of the deserts 6.1.1

Desert areas of the world

6.1.2

Major deserts in the world

6.2 Major indicators of desert areas and countries 6.2.1

General data

6.2.2

Energy data

6.3 Methodology of the major analysis technique 6.3.1

Methodology of life-cycle assessment of PV technology

6.3.2

Methodology technology

of

I/O

analysis

of

PV

References 7. A preliminary case study of VLS-PV systems in world deserts 7.1 General assumptions 7.1.1

World deserts relevant to this case study

7.1.2

VLS-PV design and configuration

7.1.3

Annual power generation

7.2 Estimation of cost components 7.2.1

Initial costs

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7.2.2

Annual operation and maintenance costs

7.3 Results and discussion 7.3.1

Total annual costs

7.3.2

Generation costs

7.4 Conclusion References 8. Case studies on the Gobi Desert from a life-cycle viewpoint 8.1 Installation site of VLS-PV system in this study 8.1.1

General information for China

8.1.2

Climate data used in this study

8.2 Assumptions for case study 8.2.1

Rough configuration of VLS-PV system

8.2.2

Life-cycle framework of VLS-PV system

8.2.3

Data preparation for this case study

8.3 System design 8.3.1

Array design

8.3.2

Array support structure and foundation

8.3.3

Wiring

8.3.4

Labour requirements and fuel consumption for construction

8.3.5

Summary of system design

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8.4 Operation and maintenance of VLS-PV system 8.5 Life-cycle analysis of the VLS-PV system 8.5.1

Life-cycle cost analysis

8.5.2

Energy and CO2 emission analysis

8.5.3

Sensitivity analysis: PV module efficiency, interest rate and PV module degradation

8.6 Conclusion References 9. Case studies on the Sahara Desert 9.1 Network concept 9.1.1

Long-distance transmission technologies

9.1.2

Grid integration issues

9.1.3

Pre-case study of the Sahara Desert case

9.2 Technology transfer 9.2.1

General information on Morocco

9.2.2

Analysis of PV module fabrication costs

9.2.3

Analysis of socio-economic impact of transferring a PV module manufacturing facility

9.3 Conclusions References

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10. Case studies for the Middle East, including sun-tracking non-concentrator, and concentrator photovoltaics 10.1 The Negev Desert: where and why? 10.2 A conventional PV system: what could it do? 10.2.1 Energy output 10.2.2 Annual value of PV electricity at Sede Boqer 10.2.3 Land requirements 10.2.4 Load matching 10.2.5 Growth factors Conclusions regarding a static 10.2.6 non-concentrating VLS-PV system in the Negev Desert 10.3 Sun-tracking 10.3.1 Energy output 10.3.2 Load matching 10.3.3 Land requirements 10.3.4 Sun-tracking conclusions 10.4 A concentrator photovoltaic system 10.4.1

What is it and what are its possible advantages?

10.4.2 Energy output 10.4.3 Land requirements

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10.4.4 Load matching with a CPV system 10.5 Cost estimation for concentrator PV system 10.5.1 Basic assumptions 10.5.2 Workforce costs 10.5.3 Cost of material-handling equipment 10.5.4 Cost of site preparation 10.5.5 Cost of materials for the CPV units 10.5.6 Total plant cost estimate 10.5.7 Additional costs 10.5.8 Cost of financing 10.5.9 The D.C. option 10.5.10Operation and maintenance costs 10.5.11Cell degradation 10.6 Discussion and conclusions References PART III: SCENARIO RECOMMENDATIONS

STUDIES

AND

11. Introduction: conclusions of Parts I and II 11.1 Background and concept of VLS-PV (Part I) 11.1.1 Energy and environmental issues 11.1.2

Overview of PV technology and relative information

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11.1.3 Concept of VLS-PV 11.2 Lessons learned from VLS-PV case studies (Part II) 11.2.1 Indicative electricity cost of VLS-PV 11.2.2

Energy payback time and CO2 emission from VLS-PV

11.2.3

Network concept and socio-economic effects of VLS-PV

11.2.4 Technology options for VLS-PV 11.3 General conclusions 12. Scenario studies 12.1 Sustainable growth of the VLS-PV system concept 12.1.1

Concept of the sustainable development scheme of VLS-PV

12.1.2

A preliminary economic analysis of the VLS-PV development scheme

12.1.3

Expected approaches for the sustainable growth of VLS-PV

12.1.4 Conclusions 12.2 Possible approaches for the future 12.2.1

Basic concept and issues for VLS-PV development

12.2.2 VLS-PV development scenario 12.2.3

A promising project proposal for ‘S-0: R&D stage’ in Mongolia 17

12.2.4 Conclusions 12.3 Financial and organizational sustainability 12.3.1 General assumptions 12.3.2 Funding in a phased approach 12.3.3

Costs of a 100 MW demonstration plant in Egypt

12.3.4 Conclusions and recommendations References 12.4 Appendix A

Investment and cashflow for a 100 MW plant in Egypt, Scenario I (1 000 EUR)

B

Investment and cashflow for a 100 MW plant in Egypt, Scenario II (1 000 EUR)

13. Recommendations 13.1 Introduction 13.2 General understandings 13.3 Recommendations on a policy level 13.4 Checklist for specific stakeholders

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Foreword

The International Energy Agency’s Photovoltaic Power Systems Programme, IEA PVPS, is pleased to publish this study on very large-scale photovoltaic (VLS-PV) systems. VLS-PV systems have been proposed on different occasions and they may also represent a controversial theme. The present market focus is indeed on small-scale, dispersed stand-alone photovoltaic power systems as well as small and medium-sized building-integrated grid-connected photovoltaic power systems. Both applications have proven large potentials, of which only a very small fraction has been realized until now. However, in the longer term, VLS-PV systems may represent a future option for photovoltaic applications and thereby contribute even more to the world energy supply. For the first time, the present study provides a detailed analysis of all the major issues of such applications. Thanks to the initiative of Japan, Task VIII of the IEA PVPS Programme was designed to address these issues in a comprehensive manner, based on latest scientific and technological developments and through close international cooperation of experienced experts from different countries. The result is the first concrete set of answers to some of the main questions that have to be addressed in this context. Experience with today’s technology is used, together with future projections, to make quantified estimations regarding the relevant 20

technical, economic and environmental aspects. Besides the specific issues of VLS-PV, the subject of long-distance high-voltage transmission is also addressed. This study includes a number of case studies in desert areas around the world. These case studies have been carried out in order to investigate the VLS-PV concept under specific conditions and to identify some of the local issues that can affect the concept. I would like to thank the IEA PVPS Task VIII Expert Group, under the leadership of Prof. K. Kurokawa and Dr K. Kato, for an excellent contribution to the subject investigated. The study provides an objective discussion base for VLS-PV systems. This is very much in line with the mission of the IEA PVPS Programme, aimed at objective analysis and information in different technical and non-technical areas of photovoltaic power systems. I hope that this study can stimulate the long-term discussion on the contribution of photovoltaics to the future energy supply by providing a thorough analysis of the subject investigated.

Stefan Nowak Chairman, IEA PVPS Programme

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Preface

‘It might be a dream, but ...’ has been a motive for continuing our chosen study on Very Large Scale Photovoltaic Power Generation – VLS-PV. Now, we are confident that this is not a dream. A desert truly does produce energy. This report deals with one of the promising recommendations for solving world energy problems in the 21st century. This activity first started in 1998 under the umbrella of IEA Task VI. The new task, Task VIII: ‘Very Large Scale PV Power Generation Utilizing Desert Areas’, was set up for feasibility studies in 1999. To initiate our study, a lot of imagination was required. It was felt that dreams and imagination are really welcome, and that it is worth while to consider things for future generations, our children and grandchildren. People have to imagine their lives after 30 or 50 years, even 100 years, since it requires a longer lead-time to realize energy technology. In this sense, studies in terms of VLS-PV include plant design by extending present technologies as well as discussing basic requirements for PV energy in the future energy-supplying structure, the social impact on regions, and the local and global environmental impact. It is known that very large deserts in the world have a large amount of energy-supplying potential. However, unfortunately, around those deserts, the population is generally quite limited. Then, too much power

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generation by PV systems becomes worthless. However, world energy needs will grow larger and larger towards the middle of the 21st century. In addition, when global environmental issues are considered, it is felt that future options are limited. These circumstances became the backbone and motive force for VLS-PV work. Finally, all the Task VIII experts wish to thank the IEA PVPS Executive Committee and the participating countries of Task VIII for giving them valuable opportunities for studies.

Prof. Kosuke Kurokawa Editor Operating Agent–Alternate, Task VIII

Dr Kazuhiko Kato Operating Agent, Task VIII

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Task VIII Participants

Kazuhiko Kato, OA New Energy and Industrial Technology Development Organization (NEDO), Japan Kosuke Kurokawa, OA–Alternate Tokyo University of Agriculture and Technology (TUAT), Japan Isaburo Urabe, Secretary Photovoltaics Power Generation Technology Research Association (PVTEC), Japan David Collier Sacramento Municipal Utility District (SMUD), USA David Faiman Ben-Gurion University of the Negev, Israel Keiichi Komoto Fuji Research Institute Corporation (FRIC), Japan Jesus Garcia Martin Iberdrola S.A., Brussels Office, Spain Pietro Menna General Directorate for Energy and Transport – D2, European Commission, Italy Kenji Otani 26

National Institute of Advanced Industrial Science and Technology (AIST), Japan Alfonso de Julian Palero Iberdrola, Spain Fabrizio Paletta CESI SFR-ERI, Italy Jinsoo Song Korea Institute of Energy Research (KIER), Korea Leendert Verhoef Verhoef Solar Energy Consultancy, the Netherlands Peter van der Vleuten Free Energy International bv, the Netherlands Namjil Enebish, Observer Department of Fuel and Infrastructure, Mongolia

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Energy,

Ministry

of

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List of Contributors

David Collier

(Section 3.8)

Namjil Enebish

(Section 12.2)

David Faiman

(Sections 3.6, 4, 10)

Kazuhiko Kato

(Sections 1, 2, Section 3.1–Section 3.3, Section 3.8, 7, 8, 11, Section 12.1, Section 12.2)

Keiichi Komoto

(Sections 2, Section 3.3, Section 3.7, 6, Section 9.2, Section 9.3, 11, Section 12.1, Section 12.2)

Kosuke Kurokawa

(Sections 1, Section 3.4, Section 5.1–Section 5.4, Section 12.2, 13)

Jesus Garcia Martin

(Section 3.7)

Pietro Menna

(Section 9.2)

Kenji Otani

(Sections 3.6, 4)

Alfonso Palero

de

Julian

(Section 3.7)

Fabrizio Paletta

(Section 3.5, Section 9.1)

Jinsoo Song

(Section 3.7)

Leendert Verhoef

(Section 5.5, Section 12.3, 13)

Peter van der Vleuten (Section 3.3)

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Acknowledgements

This report was accomplished with the kind support of various organizations and people around the world. Our activity, Task VIII, started in 1999, continuing on from IEA PVPS Task VI/Subtask V, which had been executed in 1998, as advanced research for VLS-PV. We would all like to thank Mr Kunisuke Konno, Mr Ken-ichiro Ogawa and Mr Ichiro Hashimoto (NEDO, Japan), who provided us with a great deal of support as the OA country’s members of the IEA PVPS Executive Committee. Mr Anzero Invernizzi, Mr John Peter Meisen, Mr John Benner, Mr Kong Li and Mr Anding Li gave us impressive and attractive presentations, in the preparatory workshop in 1997, which became the first step of international activity before the VLS-PV project started as an activity of PVPS. Mr Winfried Rijssenbeek, Mr Jeroen van der Linden and Mr Pim Kieskamp, who were members of Task VI/ Subtask V, in which a preliminary study on VLS-PV systems was carried out prior to the initiation of Task VIII, and who participated in the early stage of this PVPS Task VIII, contributed a lot to the initiation of this task. Mr Rudolf Minder, who was a member of Task VI/ Subtask V, also contributed to the initiation of this task. Mr Göran Andersson, who was also a member of Task VI/Subtask V, contributed to ‘Trends in power transmission technology’ in this report. 31

The case study on the Gobi Desert was developed thanks to the members of the Japanese domestic committee for VLS-PV: Mr Tetsuo Kichimi (Resources Total System), Mr Hiroyuki Sugihara (Kandenko), Mr Tetsu Nishioka (GETC), Mr Kazuyuki Tanaka (CRIEPI), Mr Makoto Tanaka (Sanyo), Mr Masahiro Waki (Sanyo) and Mr Masakazu Ito (TUAT). Also, we would like to thank Mr Ken-ichi Isomura (NEDO), Mr Yukihiko Kimura (NEDO) and Mr Tsunehisa Harada (PVTEC) for supporting and managing that committee. Research on the case study for the Middle East was funded by the Israel Ministry of National Infrastructures and the Rashi Foundation. Special thanks are due to Mr Howard Wenger for discussions on PV system losses, and to Mr Robert Whelan for discussions on parabolic dish system costs. The authors are also indebted to Mr Charles M. Whitaker, who read an early version of this chapter and made several valuable comments and suggestions. The work for the Dutch participation was supported by the Dutch Ministry for Economic Affairs through Novem, the Netherlands Agency for Energy and the Environment. The members of the Dutch forum for VLS-PV gave support and feedback on issues concerning VLS-PV: Mr Job Swens (NOVEM), Mr Evert Vlaswinkel (NUON), Mr Henri van Diermen (REMU), Mr Edwin Koot (Ekomation), Mr Michiel van Schalkwijk (Ecofys), Mr Ronald van Zolingen (Shell Solar Energy), Mr Roland van Beek (SolarNed), Mr Laurens Hoebink (Stork), Mr R. van der Borch (Profin), Mr Daan Dijk and Mr Hans Biemans (Rabobank

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Nederland), Mr N. D. Liem (GTI Energy Solutions BV), Mr Remko Knol (Siemens), Mr Arno Wurkum (Arcadis), Mr Rein Jonkhans and Mr Bert Smolders, Mr Berrie van Kampen, Mr Arno Bron and Mr Wouter Borsboom (TNO), Mr Nico van der Borg (ECN), Mr Rene Blickman (Stroomwerk), and Mrs Kayla Ente (Ente Consulting). Finally, all the Task VIII members thank the IEA PVPS Executive Committee and the participating countries of Task VIII for giving them valuable opportunities for studies.

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Comprehensive summary

Objective The scope of this study is to examine and evaluate the potential of very large-scale photovoltaic power generation (VLS-PV) systems (which have a capacity ranging from several megawatts to gigawatts), by identifying the key factors that enable VLS-PV system feasibility and clarifying the benefits of this system’s application to neighbouring regions, as well as the potential contribution of system application to protection of the global environment. Renewable energy utilization in the long term also will be clarified. Mid- and long-term scenario options for making VLS-PV systems feasible in some given areas will be proposed. In this report, the feasibility and potential for VLS-PV systems in desert areas are examined. The key factors for the feasibility of such systems are identified and the (macro-) economic benefits and the potential contribution to the global environment are clarified. First the background of the concept is presented. Then six desert areas are compared, and three of these are selected for a case study. Finally, three scenario studies are performed to ensure sustainability. Background and Concept of VLS-PV A very large-scale PV system is defined as a PV system ranging from 10 MW up to several gigawatts (0,1–20 km2 total area) consisting of one plant or an aggregation of multiple units operating in harmony and distributed in 35

the same district. These systems should be studied with an understanding of global energy scenarios, environmental issues, socio-economic impact, PV technology developments, desert irradiation and available areas: • All global energy scenarios project PV to become a multi-gigawatt generation energy option in the first half of this century. • Environmental issues which VLS-PV systems may help to alleviate are global warming, regional desertification and local land degradation. • PV technology is maturing with increasing conversion efficiencies and decreasing prices per watt. Prices of 1,5 USD/W are projected for 2010, which would enable profitable investment and operation of a 100 MW plant. • Solar irradiation databases now contain detailed information on irradiation in most of the world’s deserts. • The world’s deserts are so large that covering 50 % of them with PV would generate 18 times the world primary energy supply of 1995. VLS-PV Case Studies Electricity generation costs of between 0,09 and 0,11 USD/kWh are shown, depending mainly on annual irradiation level (module price 2 USD/W, interest rate 3 %, salvage value rate 10 %, depreciation period 30 years). These costs can come down by a factor of a half to a quarter by 2010. Plant layouts and introduction 36

scenarios exist in preliminary versions. I/O analysis shows that 25 000–30 000 man-years of local jobs for PV module production are created per 1 km2 of VLS-PV installed. Other findings of the three case studies (two flat-plate PV systems and one two-axis tracking concentrator PV) are as follows: • The case study in the Gobi Desert describes a VLS-PV system built of strings of 21 modules combined into arrays of 250 kW consisting of 100 strings. Two of these arrays are connected to an inverter of 500 kW. Two hundred of these sets of two arrays are distributed over an area of approximately 2 km2. Total requirements for construction of the plant based on local module assembly are 848 485 modules, 1 700 tons of concrete for foundations and 742 tonnes of steel for the array supports. The life-cycle CO2 emission is around 13 g-C/kWh, due mainly to manufacturing of the modules and the array supports. • In the Sahara case study, several distributed generation concepts were compared to minimize transmission costs. A potentially attractive option is 300 dispersed plants of 5 MW PV systems, the total capacity of which is 1,5 GW, located along the coast of Northern Africa, connected to the grid by a single 1–10 km medium-voltage line. A complete I/O analysis was also carried

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out, resulting in 2 570 induced jobs by the operation of a 5 MW/year PV module production facility. • In the Negev Desert in the Middle East, a 400-sun concentrator dish of 400 m2 was evaluated. Simulations indicated that 16,5 % overall system efficiency is achievable, and an economically attractive operation with generation costs of less than 0,082 USD/kWh is possible. Scenario Studies Three sustainable scenario studies were developed showing that sustainable local economic growth, sustainable technological–environmental development and non-technological demonstration and sustainable financial (stakeholder) support are possible when a long-term perspective is developed and maintained: • In the concept of sustainable local economic growth, the first local PV module production facility has an annual output of 5 MW. This local production supplies for the construction of the local VLS-PV system. In subsequent years, four more 5 MW module production facilities are brought into operation, so that annually 25 MW is supplied to the local VLS-PV system. After 10–15 years, a module production facility of 50 MW is put into operation. Every 10 years this facility is replaced by a more modernized one. Thus after approximately 40 years a 1,5 GW VLS-PV plant is in operation, and the local 38

production facility supplies for replacement. In this way, local employment, and thus the economy, will grow sustainably. • To reach the point of a 1 GW system, four intermediate stages are necessary: R&D stage, pilot stage, demonstration stage, and deployment (commercial) stage. From stage to stage, the system scale will rise from 2,5 MW to 1 GW, and module and system cost will go down by a factor of 4. Production will be shifted more and more to the local economy Technological issues to be studied and solved include reliability, power control and standards. Non-technical items include training, environmental anti-desertification strategies, industrialization and investment attraction. These four stages have a total duration of 15 years. • To realize the final commercial stage, a view to financing distribution is developed for all of the three previous stages, consisting of direct subsidies, soft loans, equity, duty reduction, green certificates and tax advantages. It is clear that direct subsidies will play an important role in the first three stages (R&D, pilot and demonstration). Ultimately, in the commercial stage, enough long-term operating experience and track record are available to attract both the soft loans and equity for such a billion-dollar investment. Understandings

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From the perspective of the global energy situation, global warming and other environmental issues, as well as from the case studies and scenarios, it is apparent that VLS-PV systems can: • contribute substantially to global energy needs • become economically and technologically feasible • contribute considerably to the environment • contribute considerably to socio-economic development. Recommendations To secure that contribution, a long-term scenario (10–15 years) perspective and consistent policy are necessary on technological, organizational and financial issues. Action is required now to unveil the giant potential of VLS-PV systems in deserts. In such action, the involvement of many actors is needed. In particular, it is recommended that, on a policy level: • national governments and multinational institutions adopt VLS-PV systems in desert areas as a viable energy generation option in global, regional and local energy scenarios; • the IEA-PVPS community continues Task VIII to expand the study, refine the R&D and pilot phases, involve participation by desert experts and financial experts, and collect further feedback information from existing PV plants; • multilateral and national governments of industrialized countries provide financing to 40

generate feasibility studies in many desert areas around the world and to implement the pilot and demonstration phases; • desert-bound countries (re-)evaluate their deserts not as potential problem areas but as vast and profitable (future) resources for sustainable energy production, recognizing the positive influence on local economic growth, regional anti-desertification and global warming.

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Executive Summary A Background and concept of VLS-PV

We are in a new age beyond the 20th century, which was the age of high-consumption society maintained by a mass supply of fossil fuels and advances in science and technology. But our activities in such a society will have a serious impact on us, such as in energy security, global environmental issues, population problems, etc. Therefore, it is necessary to reconstruct a new society with new values and new lifestyles in order to sustain our world from now on. Finding solutions for energy and environmental issues is essential for realizing a sustainable world, since it will take a long time to develop energy technologies and to recover from the destruction of the global environment. Renewable energy such as solar, hydropower, geothermal and biomass is expected to be the main energy resource in future. Photovoltaic (PV) technology is one of the most attractive options of these renewables, and many in the world have been trying to develop PV technologies for the long term. In Part I, the informative introductory part of the whole report, both global energy and environmental issues, including the potential of renewable energy sources and the market trends in PV technology, are reviewed as a background for this report. General information on PV technology, such as trends in solar cells and systems, operation and maintenance experiences, and a case study

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on added values of a PV system for utilities, are summarized. World irradiation data are also important to start a discussion about the potential of VLS-PV systems. In the last chapter of Part I, the concept of VLS-PV systems, which is the theme of this report, is introduced. A.1 World Energy Issues The two oil crises in the 1970s made us aware that fossil fuels are exhaustible and triggered development of alternative energy resources such as renewable energy. Nevertheless, most of the primary energy still depends on fossil fuels, and current utilization of renewables is negligibly small, except for hydropower. According to the IEA report, generally the total amount of fossil-fuel resources in the world will not exhaust the energy supply until 2030, although there are possibilities of a rapid increase in energy demand, a geographical imbalance between supply and demand, and temporal and local supply problems. There is a forecast that the world primary energy supply in 2030 will increase to over 1,5 times as much as that in 2000, as shown in Figure A.1.

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Figure A.1 World primary energy supply by region, 1971–2030. Source: IEA In addition, energy demand in Asian countries will increase much more than in OECD countries. Even beyond 2030, rapid growth in developing countries may continue further, reflecting the economic gap between the developing and the industrialized countries. In addition to the long-term world energy problem, global warming is another urgent issue because CO2 emissions are caused by the combustion of fossil fuels (see Figure A.2). As pointed out at Kyoto COP-3, simple economic optimization processes for world energy supply can no longer be accepted to overcome global warming.

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Figure A.2 World primary energy supply and CO2 emissions, 1971–2030. Source: IEA In any consideration of future energy problems, basic conditions and tendencies may be summarized as follows: • World energy demands will rapidly expand towards the middle of this century due to world economic growth and population increase. • The sustainable prosperity of human beings can no longer be expected if global environmental issues are ignored. • The share of electrical energy is rising more and more as a secondary energy form. • Although the need for nuclear power will increase as a major option, difficulties in building new plants are getting more and more notable at the same time. 46

• Thinking about the long lead-time for the development of energy technology, it is urgently necessary to seek new energy ideas applicable for the next generation. In order to solve global energy and environmental issues, renewable energy resources are considered to have a large potential as well as to provide energy conservation, carbon-lean fuels and CO2 disposal/recovery. Among the variety of renewable energy technologies, photovoltaic (PV) technology is expected to play a key role in the middle of this century, as reported by Shell International Petroleum Co. and the G8 Renewable Energy Task Force (see Table A.1). Table A.1 Installed global capacity estimated by G8 renewable energy task force (GW)

The world PV market as well as the world PV system installation has been growing rapidly for the past several years. Besides, PV industries in the USA, Europe and Japan recently established their long-term vision of the PV market. According to their vision, potential cumulative PV installation will be in the hundreds of gigawatts in 2030. A.2 Environmental Issues

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Recently, great concern about environmental issues, most of which have been caused by human activities, has spread throughout the entire world. The environmental impact of VLS-PV systems may be divided into three categories from a geographical viewpoint, i.e. global, regional and local environmental issues, as shown in Figure A.3. The global environmental issues are matters related to global changes. Regional issues are trans-boundary environmental issues, including atmospheric and water pollution. Local environmental issues are changes restricted to the local environment that surrounds the VLS-PV installation site. The most important phenomenon in this issue may be desertification and land degradation. Change in microclimate is another local environmental issue.

Figure A.3 Possible environmental issues impacted by VLS-PV systems

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Among environmental issues, global warming is one of the most important issues because it has a large variety of impact in various respects. According to the IPCC (Intergovernmental Panel on Climate Change) Third Assessment Report, the global average surface temperature has increased by (0,6 ± 0,2) °C since the late 19th century. It is very likely that the period from 1990 to 2000 was the warmest decade. Also, the global average surface temperature has been projected to increase by 1,4–5,8 °C between 1990 and 2100. The projected rate of warming is much greater than the observed changes during the 20th century, and is very likely to be without precedent at least during the last 10 000 years. To mitigate the projected future climate change and influences, the UN Framework Convention on Climate Change (UNFCCC) has activated a negotiating process. In COP-3 held in Kyoto in 1997, the Kyoto Protocol was adopted and six greenhouse gases (GHGs) have been designated for reduction by the first commitment period. In November 2001, COP-7 was held in Marrakesh, Morocco. At this conference, the Marrakesh Accords were adopted, and many have expressed a wish for the Kyoto Protocol to enter into force in 2002. The finalized Kyoto rulebook specifies how to measure emissions and reductions, the degree to which carbon dioxide absorbed by carbon sinks can be counted towards the Kyoto targets, how the joint implementation and emissions trading systems will work, and the rules for ensuring compliance with commitments. The meeting also adopted the Marrakesh Ministerial Declaration as input for the 10th anniversary of the Convention s adoption

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and the ‘Rio+10’ World Summit for Sustainable Development (Johannesburg, September 2002). The Declaration emphasizes the contribution that action on climate change can make to sustainable development and calls for capacity building, technology innovation and co-operation with the biodiversity and desertification conventions. Desertification is the degradation of land in arid, semiarid and dry subhumid areas. It occurs because dryland ecosystems, which cover over one-third of the world’s land area, are extremely vulnerable to overexploitation and inappropriate land use. Desertification reduces the land’s resilience to natural climate variability. Soil, vegetation, freshwater supplies and other dryland resources tend to be resilient. They can eventually recover from climatic disturbances, such as drought, and even from human-induced impacts, such as overgrazing. When land is degraded, however, this resilience is greatly weakened. This has both physical and socio-economic consequences. Combating desertification is essential to ensuring the long-term productivity of inhabited drylands. Unfortunately, past efforts at combating desertification have too often failed, and around the world the problem of land degradation continues to worsen. Recognizing the need for a fresh approach, 179 governments have joined the UNCCD as of March 2002. The UNCCD promotes international co-operation in scientific research and observation, and stresses the need to co-ordinate such efforts with other related Conventions, in particular those dealing with climate change and biological

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diversity. New technologies and know-how should be developed, transferred to affected countries, and adapted to local circumstances. For example, photovoltaic and wind energy may reduce the consumption of scarce fuelwood and deforestation. These technologies, however, should also be environmentally sound, economically viable and socially acceptable. VLS-PV systems will be one of the promising technologies for solving environmental problems. However, if some projects involving environmentally safe and sound technology are proposed, we should pay attention not only to the operation but also to the entire life-cycle, including production and transportation of components and incidental facilities, construction and decommissioning. For this purpose, life-cycle assessment (LCA) is a useful approach and is becoming a general method of evaluating various technologies. Besides the contribution to reducing gas emissions such as CO2, projects for developing and introducing new technologies, such as the Clean Development Mechanism (CDM), must accompany the sustainable social and economic development of the region. A.3 An Overview of Photovoltaic Technology A.3.1 Technology trends PV technology has several specific features such as solar energy utilization technology, solid-state and static devices, and decentralized energy systems. The long history of R&D on solar cells has resulted in a variety of solar cells. Crystalline (single-crystalline, polycrystalline) silicon is the most popular material for

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making solar cells. In 2001, crystalline Si PV modules had approximately 80 % of the market share. Mainly because of the lack of sufficient supply of suitable silicon material and because of the limited possibilities for further improvements in manufacturing costs for wafer-based silicon solar cells, much of the worldwide R&D effort is spent on the development of thin-film solar cells. Since extensive expertise has been gained with silicon as a semiconductor material, the first candidates for replacing wafer-based solar cells use silicon as an active layer. The most popular thin-film technology today uses amorphous silicon as the absorber layer; low-cost manufacturing techniques have been designed and amorphous silicon solar panels are the most cost-effective in the market today. Multiple cell concepts, using a combination of amorphous silicon and microcrystalline silicon cells (micromorph concept), show interesting potentials for increasing solar-cell efficiencies at relatively low cost. Another group of thin-film silicon solar cells make use of high-temperature deposition techniques and grow the silicon thin films on high-temperature resistant (mostly ceramic) substrates. Making use of lift-off and transfer techniques, silicon layers that have been grown on silicon substrates at high temperatures can be transferred to low-cost substrates and the original substrate can be re-used. A different approach using silicon thin films for enhancing the efficiency of a silicon solar cell is the combination of crystalline silicon wafers with amorphous silicon cells (hetero-junction cells). Compound thin-film solar cells using material other than silicon (CIGS, CdTe) have demonstrated their high

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efficiency capability and offer a promising future for this type of thin-film solar cells. Dye-sensitized and organic solar cells have potential of low cost; today, their efficiencies are still and probably will remain low, and the lifetime of the cells is a major concern. Long-term reliability of thin-film solar panels is, as with other types of semiconductors, very much dependent on the encapsulation. The general trend for all future design activities will be to improve the conversion efficiency of the cell, the simplicity, the throughput and the yield of the production process, and the long-term reliability of the module. Looking at the present status of R&D, manufacturing and market penetration of the various technologies, it can be expected that amorphous silicon will remain the dominant thin-film technology in coming years. In particular, the combination with microcrystalline silicon offers higher and more stable efficiency, which is needed in many applications. The next dominant thin-film technologies may be polycrystalline compound solar cells, like CIS and CdTe. Next to that, thin-film silicon cells, either on ceramic materials or via transfer techniques, may offer the best price/performance ratio for most applications. For the longer term, organic cell concepts may also enter the market. In principle, all the cell concepts mentioned above have the potential to reach and even pass the 1 USD/W level. It can be expected that research activities on all concepts will be continued and that all concepts, at some time in the future, will be commercially available. These are all major drivers towards lower cost per unit of electricity.

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A.3.2 Experiences in operation and maintenance of large-scale PV systems According to the facts of three projects of SMUD, operation and maintenance cost of large-scale PV system seems to be low, less than 1 % of gross total project cost, as shown in Table A.2. Table A.2 Actual operation and maintenance costs

Project name

Total project cost (USD)

Actual (USD)

Actual (USD/ kW)

Actual (USD) / Total project cost

Solarex Residential (3292 050 723 6 50723 19,76 kW)

0,32 %

Sacramento Metropolitan 1 324 122 7 500 Airport Solarport (128 kW)

58,59

0,68 %

Rancho Seco PV-3 Ground-Mounted 2 580 008 4 167 Substation System (214 kW)

19,47

0,25 %

The long-term reliability of solar cell and modules was discussed by reviewing long-term data on field exposure in four regions: Pacific Rim, USA, Europe and Negev

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Desert. In general, the performance degradation of a crystalline Si solar-cell module ranges between 0,4 and 2,0 %/year. In this report, performance degradation was classified into three levels: typical (0,5 %/year), severe (1,0 %/year), and worst (1,5 %/year). A.3.3 Cost trends Although PV is currently at a disadvantage because of its high cost, we believe PV has the best long-term potential because it has the most desirable set of attributes and the greatest potential for radical reductions in cost. Costs for the entire system vary widely and depend on a variety of factors, including system size, location, customer type, grid connection and technical specifications. For example, for building-integrated systems (BIPV), the cost of the system will vary significantly depending on whether the system is part of a retrofit or is integrated into a new building structure. Another factor that has been shown to have a significant effect on prices is the presence of a market stimulation measure, which can have dramatic effects on demand for equipment in the target sector. The installation of PV systems for grid-connected applications is increasing year by year, while the grid-connected market must still depend upon government incentive programmes at present. The installed cost of grid-connected systems also varies widely in price. Figure A.4 shows the trends of PV system and module prices in some countries. Although, in more recent years, this shows a slight increase in some markets due to high demand, there appears to be a continued downward trend.

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Figure A.4 PV module and system price trends in some countries We need to accelerate that trend. One way to do that is to step up the scale of the typical PV plant. The largest plant has a capacity approaching 100 MW/year. It would take such a plant, running flat out, 100 years to produce enough equipment to match the power-generating capacity of one medium-sized combined-cycle gas turbine power plant. We believe there may be significant economies of scale to be reaped as we move up to 50–100 MW plants. Another path towards radically lower costs is technology step change. The technology in use today is based on crystalline silicon. This is an inherently material-intensive technology. It requires batch production methods, and is now relatively mature. The great hope for the future lies with thin-film 56

technologies, which are much less material-intensive and suitable for continuous production processes. They offer the potential to shift on to a lower and steeper learning curve. However, we need to be a little cautious about predicting when thin film will start to realize its commercial potential. Both of these routes – stepping up the scale, and backing the new technology – carry large risks, both technical and commercial. Taking bold steps will require a great deal of confidence in the rapid emergence of a mass market. Today’s cost of single-crystal and polycrystalline silicon modules (although proprietary) is such that the present factory price of 4 USD/W includes all costs, as well as marketing and management overheads, for that product line. Note that module prices for single-crystal and polycrystalline silicon have been essentially stable, between 3,75 and 4,15 USD/W, for nearly 10 years, while manufacturing costs have been reduced by over 50 %. Based on the studies cited and on further analysis, it seems likely that fully loaded manufacturing costs for a 100 MW single-crystal silicon module will be 1,40 USD/ W. This would permit a profitable price of 2,33 USD/W. Prices at this level are likely to be required in order to open up the massive grid-connected and building-integrated markets. The cast-ingot polycrystalline option continues to have module costs slightly lower than those of the single-crystal, allowing this option to offer profitable prices at the 2 USD/W level. Thin films and concentrators could have manufacturing costs that will allow profitable prices of 1,25 USD/W. In this forecast, the PV market continues to grow at 15–25 %. However, in order for this forecast

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to become a reality, several major events need to occur. First, the existing subsidized grid-connected programmes in countries such as Japan, Germany, the Netherlands and the USA need to stimulate the installation of quality, reliable systems in sufficient quantities to stimulate investment in large-volume module manufacturing plants. Secondly, continuing decrease in the price of modules must be realized. There must be profitable modules below 2 USD/W by the year 2005 and even lower prices, approaching 1,5 USD/W, must occur by 2010. Thirdly, in the transitional phase towards competitive prices, marketing and financing schemes have to be introduced more widely which will allow the customers to opt for this solution in spite of costs. A.3.4 Added values of PV systems PV technology has unique characteristics different from those of conventional energy technologies, and additional values are hidden in PV systems besides their main function, which is, of course, power generation. Table A.3 shows a summary of non-energy benefits that can add value to PV systems. Nowadays, many people are becoming aware of the additional benefits offered by PV systems. Unfortunately, this awareness does not contribute to the effective promotion of PV systems since current added values are not quantitative but qualitative. Thus research activities on quantitative analysis of this issue should be continued. Table A.3 Summary of non-energy benefits that can add value to PV systems Category

Potential values

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Electrical

kWh generated; kW capacity value; peak generation and load matching value; reduction in demand for utility electricity; power in times of emergency; grid support for rural lines; reduced transmission and distribution losses; improved grid reliability and resilience; voltage control; smoothing load fluctuations; filtering harmonics and reactive power compensation.

Significant net energy generator over its lifetime; reduced air emissions of particulates, heavy metals, CO2, NOx, SOx, resulting in lower greenhouse gases; reduced acid rain and lower Environmental smog levels; reduced power station land and water use; reduced impact of urban development; reduced tree clearing for fuel; reduced nuclear safety risks.

Architectural

Substitute building component; multi-function potential for insulation, water proofing, fire protection, wind protection, acoustic control, daylighting, shading, thermal collection and dissipation; aesthetic appeal through colour, transparency, non-reflective surfaces; reduced embodied energy of the building; reflection of electromagnetic waves;

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reduced building maintenance and roof replacements. New industries, products and markets; local employment for installation and servicing; local choice, resource use and control; potential for solar breeders; short construction lead-times; modularity improves demand matching; resource diversification; reduced fuel imports; reduced price volatility; deferment of large capital outlays for central generating plant or transmission and distribution line upgrades; urban Socio-economic renewal; rural development; lower externalities (environmental impact, social dislocation, infrastructure requirements) than fossil fuels and nuclear; reduced fuel transport costs and pollution from fossil-fuel use in rural areas; reduced risks of nuclear accidents; symbol for sustainable development and associated education; potential for international co-operation, collaboration and long-term aid to developing countries. There is a case study on the added values of a PV system for SMUD. The utility benefits evaluated are as follows. • Energy: avoided marginal cost of system-wide energy production.

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• Capacity: avoided marginal cost of system-wide generation capacity. • Distribution: distribution capacity investment deferral. • Sub-transmission: sub-transmission capacity investment deferral. • Bulk transmission: transmission capacity investment deferral. • Losses: reduction in electricity losses. • REPI: renewable energy production incentive. • Externalities: value of reduced fossil emissions. • Green pricing: voluntary monthly contributions from PV pioneers. • Fuel price risk mitigation: value of reducing risk from uncertain gas price projections. • Service revenues (economic development): net service revenues from local PV manufacturing plant (result of economic development efforts). Table A.4 is an estimation result of utility benefits of fixed PV systems. Table A.4 Estimation result of utility benefits of fixed PV systems (USD/kW, 1996)

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A.4 World Irradiation Database Irradiation data are important to start a discussion about the potential of VLS-PV systems. The Japan Weather Association (JWA) collected irradiation and air temperature data during 1989 and 1991 from every meteorological organization in the world. Data items are monthly means of global irradiation, monthly means of ambient air temperature, and monthly means of snow depth. The data were collected from 150 countries, and data from 1 601 sites throughout the world are available. Monthly global irradiation was estimated from monthly sunshine duration where there were no irradiation data. The Negev Radiation Survey, which was established in the 1980s by the Israel Ministry of National Infrastructures, monitors the following meteorological parameters at nine stations in the Negev Desert: normal direct beam irradiance, global horizontal irradiance, ambient temperature, humidity ratio, wind speed, and wind direction. The data are available from the Ben-Gurion National Solar Energy Centre, in the form of

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a CD-ROM, which contains a set of Typical Meteorological Year (TMY) files (updated every three years) together with all previous years of actual data for each site. Besides these, there are a variety of worldwide databases of solar energy resources. Table A.5 shows the name and website address for some of these. Table A.5 Examples of world irradiation database Name

Website address

Ground observation 1. Negev Radiation Survey http://www.bgu.ac.il/solar WRDC solar radiation 2. and radiation balancehttp://wrdc-mgo.nrel.gov/ data 3.

BSRN: Baseline Surface http://bsrn.ethz.ch/ Radiation Network

4.

NOAA GLOBALSOD

5.

METEONORM 2000 http://www.meteotest.ch/ (commercial product)

NCDC

http://www.ncdc.noaa.gov/

Satellite-derived data 6.

SeaWiFS surface solarhttp://www.giss.nasa.gov/ irradiance data/seawifs/

7.

LaRC Surface Solarhttp://eosweb.larc.nasa.gov/ Energy dataset (SSE) sse/

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8. ISCCP datasets

http://isccp.giss.nasa.gov/ isccp.html

A.5 Concept of VLS-PV System A.5.1 Availability of desert area for PV technology Solar energy is low-density energy by nature. To utilize it on a large scale, a massive land area is necessary. However, one-third of the land surface of the Earth is covered by very dry deserts, as shown in Figure A.5. High-level insolation and large spaces exist. It is estimated that if a very small part of these areas, say 4 %, were used for the installation of PV systems, the annual energy production would equal world energy consumption.

Figure A.5 World deserts (unit: 104 km2) A rough estimation was made to examine the potential of desert under the assumption of a 50 % space factor for 64

installing PV modules on the desert surface as the first evaluation. The total electricity production becomes 1 942,3 × 103 TWh(= 6,992 × 1021 J = 1,67 × 105 Mtoe), which means a level almost 18 times as much as the world primary energy supply, 9 245 Mtoe (107,5 × 103 TWh = 3,871 × 1020 J) in 1995. These are quite hypothetical values, ignoring the presence of loads near these deserts. However, at least these indicate high potential as primary resources for developing districts located in such solar-energy-rich regions. Figure A.6 also shows that the Gobi Desert area between the western part of China and Mongolia can generate as much electricity as the present world primary energy supply In Figure A.7, an image of a VLS-PV system in a desert area is shown.

Figure A.6 Solar pyramid

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Figure A.7 Image of a VLS-PV system in a desert area A.5.2 VLS-PV concept and definition Presently three approaches are under consideration to encourage the spread and use of PV systems.

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(a) Establish small-scale PV systems that are independent of each other. There are two scales for such systems: installing stand-alone, several hundred-watt PV systems for private dwellings; and installing 2–10 kW systems on the roofs of dwellings as well as 10–100 kW systems on office buildings and schools. Both methods are already being used. The former is used to furnish electrical power in developing countries, the so-called SHS (solar home system), and the latter is used in Western countries and in Japan. This seems to be used extensively in areas of short- and medium-term importance. (b) Establish 100–1 000 kW mid-scale PV systems on unused land on the outskirts of urban areas. The PVPS/ Task VI studied PV plants for this scale of power generation. Systems of this scale are in practical use in about a dozen sites in the world at the moment, but are expected to increase rapidly in the early 21st century. This category can be extended up to multi-megawatt size. (c) Establish PV systems larger than 10 MW on vast, barren, unused lands that enjoy extensive exposure to sunlight. In such areas, a total of even more than 1 GW of PV system aggregation can be easily realized. This approach makes it possible to install quickly a large number of PV systems. When the cost of generated electrical power is lowered to a certain level in the future, many more PV systems will be installed. This may lead to a drastically lower cost of electricity, creating a positive cycle between cost and consumption. In addition, this may become one of the solutions to

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future energy and environmental problems across the globe, and ample discussion of this possibility is believed to be worthwhile. The third category corresponds to very large-scale PV (VLS-PV) systems. The definition of VLS-PV may be summarized as follows: • The size of a VLS-PV system may range from 10 MW to one or a few gigawatts, consisting of one plant, or an aggregation of many units that are distributed in the same district and operate in harmony with each other. • The amount of electricity generated by VLS-PV systems can be considered significant for people in the district, in the nation or in the region. • VLS-PV systems can be classified according to the following concepts, based on their locations: • land based (arid to semi-arid, deserts) • other concept (water-based, lakes, coastal, international waters) • locality options (D.C.: lower, middle, higher income; large or small countries; OECD countries). Although VLS-PV systems include water-based options, in principle, many different types of discussions are required on this matter. It is not neglected but it is treated as a future possibility outside the major efforts of this study. A.5.3 Potential of VLS-PV: advantages

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The advantages of VLS-PV systems are summarized as follows: • It is very easy to find land around deserts appropriate for large energy production by PV systems. • Deserts and semi-arid lands are, normally, high-insolation areas. • The estimated potentials of such areas can easily supply world energy needs in the middle of the 21st century. • When large-capacity PV installations are constructed, step-by-step development is possible through utilizing the modularity of PV systems. According to regional energy needs, plant capacity can be increased gradually. This is an easier approach for developing areas. • Even very large installations are quickly attainable to meet existing energy needs. • Remarkable contributions to the global environment can be expected. • When a VLS-PV system is introduced to a certain region, other types of positive socio-economic impact may be induced, such as technology transfer to regional PV industries, new employment and economic growth. • The VLS-PV approach is expected to have a major, drastic influence on the ‘chicken-and-egg’ cycle in the future PV market. If this does not happen, the distance to VLS-PV systems may become a little far.

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These advantages make it a very attractive option, and worthy of discussion regarding global energy in the 21st century. The image of this concept is illustrated by Figure A.8.

Figure A.8 Global network image A.5.4 Synthesis in a scenario for the viability of VLS-PV development Basic case studies were reported concerning regional energy supply by VLS-PV systems in desert areas, where solar energy is abundant. According to this report, the following scenario is suggested to reach a state of large-scale PV introduction. First, the bulk systems that have been installed individually in some locations would be interconnected with each other by a power network. Then they would be incorporated with regional electricity demand growth. Finally, such a district would become a large power source. This scenario is

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summarized in the following stages according to Figure A.9:

Figure A.9 Very large-scale PV system deployment scenario 1. A stand-alone, bulk system is introduced to supply electricity for surrounding villages or anti-desertification facilities in the vicinity of deserts.

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2. Remote, isolated networks germinate. Plural systems are connected by a regional grid. This contributes to load levelling and the improvement of power fluctuation. 3. The regional network is connected to a primary transmission line. Generated energy can be supplied to a load centre and industrial zone. Total use combined with other power sources and storage becomes important for matching to the demand pattern and the improvement of the capacity factor of the transmission line. Furthermore, around the time stage 3 is reached, in the case of a south-to-north inter-tie, seasonal differences between demand and supply can be adjusted. An east-to-west tie can shift peak hours. 4. Finally, a global network is developed. Most of the energy consumed by human beings can be supplied through solar energy. For this last stage, a breakthrough in advanced energy transportation will be expected on a long-term basis, such as superconducting cables, FACTS (flexible A.C. transmission system), or chemical media.

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Executive Summary B VLS-PV case studies

VLS-PV systems are expected to generate a variety of advantages and will be one of the most attractive technologies for our future, particularly from the viewpoints of energy and the environment. However, realizing VLS-PV systems may constitute a long-term project, the nature of which we have not yet experienced. Therefore, the capability of VLS-PV systems and the configuration of each component must be assessed while taking into account site conditions, regional electricity demand, system performance, transmission technology or other alternative options, and concurrent use with other energy resources. In Part II, some case studies on VLS-PV systems for selected regions were undertaken to employ the concepts of VLS-PV systems, after surveying general information concerning candidate sites. As case studies, first, introductory analyses on the generation costs of VLS-PV systems in world deserts were carried out. Secondly, energy payback time, CO2 emissions and generation costs for VLS-PV systems in the Gobi Desert in China were evaluated in detail from a life-cycle point of view. Next, by assuming the Sahara Desert as the site, a network concept for a VLS-PV system was discussed and an estimation of the socio-economic impacts of technology transfer were analysed. Finally, using a simulation model for the Negev Desert located in the Middle East, fixed modules, one-axis tracking modules, 73

two-axis tracking modules and a concentration system were summarized as expected technologies for VLS-PV systems. B.1 General Information The deserts that are the most promising sites for VLS-PV systems cover one-third of the land surface. The distribution is shown in Figure B.1. Because the degree of the impact of VLS-PV systems would depend upon the various conditions of particular regions, major indicators concerning major regions/countries with deserts were investigated. The selected regions/countries were China, India, the Middle East, North Africa, Mexico and Australia.

Figure B.1 Aridity zones of the world. Source: World Atlas of Desertification (UNEP, 1992) Although the economic state of these countries (except for Australia) is lower than the world average, it has 74

been growing every year. Particularly, the growth in China and India is remarkable. With economic growth, energy consumption is increasing, most of which has depended upon fossil fuels for the commercial and industrial sectors. The trends for electricity were almost the same. In China, India and Australia, more than 75 % of the total electricity is generated by coal, while in the Middle East, North Africa and Mexico, oil and gas are the main resources for generating electricity. However, the candidate site is not limited to only one desert. That is to say, it may be concluded that all those deserts have the possibility to be candidate sites for VLS-PV systems. As the methodologies for case studies, we focused on life-cycle assessment and I/O analysis. The former is a method for making environmental decisions, and is becoming increasingly popular in environmental policies. The latter is a method for estimating economic effects using an inter-industry table. These are effective methods to evaluate the impacts of VLS-PV systems. The former is applied in a case study on the Gobi Desert, and the latter is applied in a case study on the Sahara Desert focusing on socio-economic impact of VLS-PV systems. B.2 Preliminary Case Study of VLS-PV Systems in World Deserts To make a rough sketch of VLS-PV systems in desert areas and to investigate their economic feasibility, a preliminary case study was carried out. It was assumed that VLS-PV systems each with a 1 GW capacity would be installed in the six major deserts of the world, as shown in Figure B.2.

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Figure B.2 The six deserts used in this case study: (1) desert name, (2) reference point, (3) area, (4) annual average ambient temperature, (5) annual horizontal global irradiation It was supposed that a 1 GW VLS-PV system, which is an aggregation of ten 100 MW PV systems with flat-plate fixed array structures, would be installed in each desert. Figure B.3 shows conceptual images of a 1 GW VLS-PV system. Assuming that the power output from a VLS-PV system would be transmitted to a given load centre, construction of 110 kV transmission lines would be taken into account. Though the transmission lines depend upon distance from the load centre to the VLS-PV system, a distance of 100 km was employed for all deserts to avoid complicated evaluation in this study.

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Figure B.3 Conceptual image of a 1 GW VLS-PV system To calculate the annual power generation of the VLS-PV systems, cell temperature factors, load matching factors, efficiency deviation factors and inverter mismatch factors were taken into account in calculating the performance ratio (PR) for each installation site. The annual average in-plane irradiation was estimated from the annual global horizontal irradiation using a method for separating into direct and scattered radiation known as the Liu–Jordan model. Initial costs, consisting of system component costs, transportation costs of the system components, system construction costs, and annual operation and maintenance (O&M) costs, were calculated in order to estimate the generation costs of VLS-PV systems installed in the six world deserts. No land cost was taken into account in this study, and cost data in Japanese yen

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were converted to US dollars at the (recent) exchange rate of 120 JPY/USD. Based on estimates of the initial cost and the annual O&M cost, the total annual costs of 100 MW PV systems installed in the six deserts were calculated assuming an annual interest rate of 3 %, a salvage value rate of 10 %, a depreciation period of 30 years, and an annual property tax rate of 1,4 %. An annual overhead expense of 5 % of annual O&M costs was also taken into account. The generation costs are shown in Table B.1. The lowest generation costs were estimated when the array tilt angle was 20° independent of PV module price, except for the case of the Gobi Desert, where a tilt angle of 30° had the cheapest generation cost. The generation costs at a PV module price of 1 USD/W, which range from 5,2 to 8,4 US cents/kWh, are roughly one-third as great as those at a PV module price of 4 USD/W. Table B.1 Generation cost of 100 MW PV system (US cents/kWh)

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Figure B.4 represents the best estimates of generation costs for each desert as a function of annual global horizontal irradiation. With the exception of the Negev Desert and the Great Sandy Desert, in which the generation costs are relatively higher because of high wages, the level of generation costs of a 100 MW PV system are roughly the same. Though the generation costs decrease gently according to the increase in annual irradiation, even the generation cost for the Gobi Desert, which has much less annual irradiation than the Sahara Desert, is on a level with that of the Sahara. Electricity from VLS-PV systems in these deserts would not be so cheap when the PV module price is expensive (such as at 4 USD/W), but 79

the cost of the electricity will become economic even with the proven system technologies employed in this study when the PV module price is reduced to a level of 1 USD/W. The current market price of PV modules is not low enough for the realization of VLS-PV systems, but it is expected that PV module prices will decrease rapidly with the growth of the PV market. Therefore, VLS-PV systems in desert areas will be economically feasible in the near future.

Figure B.4 Best estimates of generation cost for each desert as a function of annual global horizontal irradiation B.3 Case Studies on the Gobi Desert from a Life-Cycle Viewpoint As shown previously, the introduction of VLS-PV systems in desert areas seems to be attractive from an economic point of view when PV modules are produced

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at a low price level, even though existing PV system technology is adopted. But we must pay attention not only to the economic aspect but also to the energy and environmental aspects, since PV systems consume a lot of energy at their production stage and therefore emit carbon dioxide (CO2) indirectly, as a result. Therefore, the feasibility of VLS-PV systems was evaluated in depth from a life-cycle viewpoint by means of life-cycle analysis (LCA). The Gobi Desert was chosen as the installation site of VLS-PV systems for LCA in this study This desert, which lies in both China and Mongolia, is around 1,3 × 106 km2 in size and is located between 40°N and 45°N. Installation of the VLS-PV systems in the Gobi Desert has some advantages: it is a stone desert rather than sand, and a utility grid exists relatively close to the desert. In this study, it was assumed that the 100 MW VLS-PV system would be installed in the Gobi Desert on the Chinese side. To execute LCA, a life-cycle framework of the VLS-PV system has to be prepared. Figure B.5 gives an image of the life-cycle framework of the VLS-PV system in this study. It was supposed that array support structures, transmission towers and foundations for the array support structures and the transmission towers would be produced in China and that other system components would be manufactured in Japan. All the components are transported to some installation site near Hoh-hot in the Gobi Desert by marine and/or land transport. Land transport is also taken into consideration. Land cost is

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not considered, but land preparation was considered here.

Figure B.5 Life-cycle framework of the case study In this study, a south-facing fixed flat array structure was employed and the array tilt angle was given as a variable parameter (10°, 20°, 30°, 40°). Both PV module price and inverter price were also dealt with as variable parameters. System performance ratio (PR) was assumed to be 0,78 by consideration of operation temperature, cell temperature factor, load matching factor, efficiency deviation factor and inverter mismatch factor (= 0,90). It should be noted that the efficiency deviation factor involves long-term performance degradation (0,5 %/year) as well as short-term surface degradation by soil (= 0,95). The number of PV modules in a string was taken to be 21 by consideration of the Voc of the PV module and the

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D.C. voltage of the inverter. Then the rated output from one string is 2,52 kW. Accordingly a 250 kW PV array requires 100 strings. Two of these 250 kW PV arrays located north and south in parallel form the 500 kW system with a 500 kW inverter and a 6,6 kV/500 V transformer. Figure B.6 illustrates an example of the field layout for such a 100 MW VLS-PV system with a 30° tilt angle. It was assumed that array supports were made of zinc-plated stainless steel (SS400), and the thickness of several types of steel material were chosen according to stress analysis assuming that the wind velocity is 42 m/s, based upon the design standard of structural steel by the Japanese Society of Architecture. A cubic foundation made of concrete was used. Its dimension was decided in accordance with the design standard of support structures for power transmission by the Institute of Electrical Engineering in Japan. Taking into account Japanese experience in civil engineering and the local labour situation in China, local labour requirement was also estimated for system construction such as PV module installation, array support installation, production and installation of foundations, cable installation, and installation of common apparatus. Table B.2 shows a summary of requirements to construct a 100 MW VLS-PV system in the Gobi Desert in China. Table B.2 Summary of total requirements for a 100 MW VLS-PV system in the Gobi Desert

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a99

% of construction yield is considered.

bSpare

sets are included.

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Figure B.6 Example of field layout for 100 MW VLS-PV system (30° tilt angle) (unit: m) Labour cost for the operation was estimated based on the assumption of a 100 MW VLS-PV system that was in service 24 hours a day by nine persons working in shifts. The annual labour cost for electrical engineering was assumed for these operators. Maintenance cost was also calculated based on actual results of a PVUSA project; that is, the cost of repair parts was 0,084 %/year of the total construction cost and labour for maintenance was one person per year. Figure B.7 shows the results of the generation cost of the 100 MW PV system. Differences in the annual cost due to PV module price resulted in differences in these generation costs. Though the least annual cost was obtained at the least array tilt angle for any tilt angle, the

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minimum generation cost appeared at around 30° due to the increase in annual power generation as the array tilt angle increased. The generation cost stays at a high level, around 18 US cents/kWh (just less than the current consumer price for residential sectors in Japan), when the PV module price is 4 USD/W. But it decreases remarkably to less than 7,0 US cents/kWh (close to the current electricity tariff in China) if the PV module price goes down to 1 USD/W.

Figure B.7 Generation cost of a 100 MW PV system Figure B.8 represents the results of total primary energy requirement and energy payback time (EPT). EPT was estimated assuming that electricity from the PV system would replace utility power in China where recent conversion efficiency is around 33 %. As shown in these figures, the best EPT was obtained at 20° array tilt angle, and BOS components made of steel and concrete (such as array supports, transmission lines, foundations and troughs) contributed much to both energy requirements because these materials consume a great deal of energy 86

to produce in China. Transportation also uses a certain amount of energy. Nevertheless, EPT resulted in a very low level. This suggests that the total energy requirement throughout the life-cycle of the PV system (considering production and transportation of system components, system construction, operation and maintenance) can be recovered in a short period much less than its lifetime. Therefore VLS-PV is useful for energy resource savings.

Figure B.8 Total primary energy (TPE) requirement and EPT of a 100 MW PV system Figure B.9 shows the results of life-cycle CO2 emissions and life-cycle CO2 emission rate of the 100 MW PV system, assuming 30-year operation periods. Discussion of these results is the same as for the total primary energy requirement and the EPT Considering the CO2 emission rate of existing coal-fired power plants, about 300g-C/kWh, the life-cycle CO2 emission rate of a 100 MW PV system is much lower. So the VLS-PV system in desert

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areas is a very effective energy technology for preventing global warming.

Figure B.9 Life-cycle CO2 emissions and life-cycle CO2 emission rate of a 100 MW PV system B.4 Case Studies on the Sahara Desert It is necessary to build a concept for supplying the electricity that VLS-PV generates, and the supply of such electricity may contribute to regional development. Additionally, VLS-PV may induce some economic impacts, such as an employment effect. A network concept for introducing VLS-PV in the Sahara Desert and the expected socio-economic impact of the technology transfer of PV module fabrication were discussed. A transmission system devoted to the exploitation of remote energy resources has to be designed to minimize transmission costs, while respecting reliability and environmental requirements. Transmission costs depend 88

on the transmission distances and the hours of yearly utilization. From these viewpoints, the transmission costs were analysed for three cases: (1) a 1,5 GW centralized PV power plant plus 300–900 km of transmission line; (2) 1,5 GW produced by 30 PV plants of 50 MW; and (3) 1,5 GW produced by 300 PV plants of 5 MW. The third case produced the most attractive results. Each of these plants should cover an area of approximately 10 ha (0,1 km2), and the power would be typically delivered through single A.C. MV lines (for example, 20 kV). In this case, the PV plants would be distributed within the coastal strip of North African countries, placed less than 10 km from the HV/MV substations and the distribution networks that feed the loads. When assuming 5 km as a transmission distance, the transmission cost would range from 3,7 to 6,2 USD/MWh, depending upon yearly utilization of VLS-PV, as shown in Figure B.10.

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Figure B.10 Case of small PV systems along with network Additionally, having a variety of technology transfers is very important for the sustainable expansion of VLS-PV, and the transfer of PV manufacturing facilities may bring about the stimulation of various economic activities as well as the establishment of a local PV industry. To grasp such impacts quantitatively, a technical analysis of an industrial initiative in the photovoltaic sector and evaluation of the socio-economic impacts of the PV demand in terms of gross domestic production and job creation were carried out by the I/O analysis method. When assuming the transfer of a facility with the capacity of 5 MW/year, it has been made clear that the local availability of cells (Case L) brings very different returns on investment in the local economy, and the induced production increases from 1,4 times to 3,5 times the expenditure, as shown in Figure B.11 and Table B.3. The induced job creation involved 2 570 employees (Case L), while on the other hand, in the case of not assuming the availability of local cell production (Case I), the induced job creation involved 489 employees.

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Figure B.11 Necessary production (MUSD)

expenditure

and induced

Table B.3 Induced impacts of transferring a PV module manufacturing facility

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Besides the economic effects of manufacturing, the availability of PV systems contributes to support social and economic development of the region that is more environmentally sound. To perform technology transfer effectively, clear knowledge of the needs of, as well as the potential benefits to, the local population is required. However, it is expected in the future that VLS-PV will be reinforced year by year with operating PV module facilities in the region, and that the electricity generated by VLS-PV will be able to supply global areas through the Mediterranean Network. As a result, an electricity-for-technology exchange scheme may be initially set up. B.5 Case Studies on the Middle East Desert

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There are certain types of PV systems considered for constructing VLS-PV systems. In addition to the fixed-module VLS-PV, the use of sun-tracking non-concentrator and concentrator PV systems is expected. The relative performances – which involved static PV modules (oriented facing south, with tilt angle equalling geographic latitude), one-axis tracking modules (having a horizontal axis in the N–S direction), two-axis tracking modules, and a 400× point-focus concentrator PV system – are addressed and the potential economic benefits of employing highly concentrated solar radiation as an energy source for PV cells were considered. As a practical site, the Negev Desert was chosen, because the Negev is located at a truly representative ‘point’ among the principal deserts of the Middle East and has produced a wealth of documented detailed meteorological data. Computer simulations were carried out, using a typical meteorological year (TMY) dataset for a specific Negev site, Sede Boqer. At Sede Boqer, a 25 m diameter multipurpose solar concentrator operating at a solar concentration of 400×, as shown in Figure B.12, already exists.

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Figure B.12 The PETAL (Photon Energy Transformation and Astrophysics Laboratory) 400 m2 aperture parabolic dish reflector at Sede Boqer (the square screen at its focal point is 1 m × 1 m in size) Simulations have indicated that, in a typical Middle Eastern desert, 8,5 % total system efficiency from a conventional static PV system, 10,7 % effective system efficiency for a one-axis sun-tracking system, and 11,8 % effective system efficiency for a two-axis tracking system are to be expected, where all three system types employ identical, polycrystalline Si PV modules. However, using a dense array of Si concentrator PV cells in a 400-sun point-focus system, the simulations have indicated that 16,5 % total system efficiency (17,2 % effective system efficiency) may be attainable if the cells are actively cooled so as to remain at a fixed temperature

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of 60 °C. Here, effective system efficiency was defined as the total annual A.C. energy output divided by the annual global irradiance that would be received by a static system of similar aperture area, irrespective of the type of PV system that was being discussed (i.e. one-axis, two-axis, or concentrator). Regarding the prospects for a concentrated VLS-PV plant, it was concluded that a single 1 m2 concentrator PV module exposed to a light flux of 400 suns (where 1 sun is here defined as 1 000 W/m2) would produce nearly 100 kW of electric power. Table B.4 compares a number of area-related output parameters of interest for all four types of systems. Table B.4 Comparison of predicted area-related performance parameters for various VLS-PV systems at Sede Boqer Static One-axisTwo-axis Concentrator 30° tilt tracking tracking (CPV) System yield (kWh · kW−1 ·1 644a 2 071a y−1) Yield per PV module area 189 −2 (kWh · m · y−1)

238

2 279a

262

Yield per 400 m2 light capture75 600 95 200 104 800 area (kWh·y−1)

95

1 754b

154 000

154 000

Land area/light 2,89 capture area

3,42c

7,90d

7,90d

Yield per land area (kWh · m−2 65,4 · y−1)

69,6

33,2

48,7

aSolarex

MSX64 modules.

bModified cRancho

SunPower Heda 303 cells.

Seco plant.

dHesperia

Lugo plant.

The estimation of the cost of a 30 MW turnkey project was approximately 136 500 USD per concentrator (CPV) unit, where in a typical meteorological year each unit would generate 154 000 kWh of A.C. electricity at Sede Boqer. When assuming 30-year financing, the electricity would work out to 0,045 USD/kWh in the case of 3 % interest and to 0,064 USD/kWh in the case of 6 % interest. By considering annual O&M costs to be 2 % of the capital cost, 0,018 USD/kWh would be added to the electricity costs given above. There is a wealth of hardware and performance data available for non-concentrator PV systems for validation, while the experimental situation is sparse for concentrated PV systems. However, it might be concluded that the economics of a concentrator VLS-PV plant could turn out to be attractive.

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Executive Summary C Scenario studies and recommendations Through Parts I and II, it was suggested that the VLS-PV system would be an attractive energy source in the 21st century. However, the long-term sustainable operation of VLS-PV systems must be discussed considering local benefits to be brought about by introduction and expansion of the VLS-PV system. Then the step-by-step enlargement of the PV system might be an effective way to prevent financial, technological and environmental risks caused by its rapid development. In addition, it is expected that this activity will be continued with properly allotted efforts for further quantitative discussion and necessary evaluation of VLS-PV to improve our knowledge, to overcome its defects and to establish an international network with other interested people. In Part III, based on the generalized understandings from Parts I and II, scenario studies were carried out and ‘recommendations’ to stakeholders as conclusions were described. In the scenario studies, a concept for the sustainable growth of VLS-PV was discussed, which included both the long-term economic aspects and the life-cycle point of view, and a development scenario assuming actual stages was proposed. Further, the financial and organizational sustainability on proposed stage was discussed. Finally, in order to propose mid- and long-term scenario options that would enable the feasibility of VLS-PV,

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recommendations for considerable stakeholders were given to realize such long-term targets gradually. C.1 Sustainable Growth of the VLS-PV System Concept VLS-PV has a huge generating power capacity and it will be more feasible to enhance the capacity gradually. Therefore, for the introduction of VLS-PV, a development scheme for sustainable growth is needed. Considering the economic aspects of VLS-PV is also important for a sustainable initiative. The domestic production of PV modules is one of the most important issues for the successful introduction of VLS-PV. As an example, a conceptual scheme of PV module manufacture through technology transfer to the region, as shown in Figure C.1, was considered. PV modules produced at the facilities will be installed in desert areas as part of a centralized system.

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Figure C.1 Conceptual view of a sustainable, technology transfer scheme The power-generating capacity of the system will be reinforced yearly with operating PV module facilities and a VLS-PV system will be developed. Figure C.2 shows the sustainable scheme for VLS-PV development, which supposes that the capacity of VLS-PV will be over 1 GW in 28 years, and will reach 1,5 GW in 43 years. With the replacement of PV modules and facilities, and with operating facilities, the VLS-PV will be a sustainable power plant. Further, when a variety of VLS-PV components are produced near the VLS-PV and waste management, like recycling, is introduced, ‘scrap and build’ for VLS-PV will be realized, as shown in Figure C.3.

Figure C.2 development

Sustainable

99

scheme

for

VLS-PV

Figure C.3 Example of a concept for sustainable growth of VLS-PV In the economic analysis, the generation cost for VLS-PV was estimated to be around 3–5 US cents/kWh for 1,5 GW. However, to obtain long-term economic benefits, providing advantageous incentives will be needed in the first stage. Further, for deploying

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domestic/regional manufacturing of VLS-PV system components, it is necessary to build a financial mechanism for investing in facility operation, not only investment for constructing the facility. Some organizational/institutional support will be indispensable and this will contribute not only to profitability in the long term but also to successful technology transfer. C.2 Possible Approaches for the Future The VLS-PV scheme will be a project that has not been experienced before. Therefore, to realize VLS-PV it is necessary to identify issues that should be solved and to discuss a practical development scenario. Focusing on the technical development, a basic concept for VLS-PV development, which consisted of the following four stages, was proposed. Although the capacity of the first PV system was set at 25 MW, R&D stage (S-0) was assumed as the first stage to verify the basic characteristics of the PV system. • S-0: R&D stage (four years) • PV system: 5 × 500 kW research system • Price of PV module: 4 USD/W • PV module: import from overseas • Inverter: import from overseas • S-1: Pilot stage (three years) • PV system: 25 MW pilot system • Price of PV module: 3 USD/W • PV module: import from overseas • Inverter: import from overseas • S-2: Demonstration stage (three years) • PV system: 100 MW large-scale system

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• Price of PV module: 2 USD/W • PV module: domestic/regional production • Inverter: import from overseas • S-3: Deployment stage (five years) • PV system: around 1 GW VLS-PV system with energy network • Price of PV module: 1 USD/W • PV module: domestic/regional production • Inverter: domestic/regional production To develop VLS-PV, there are many technical and non-technical aspects that should be considered in each stage. These are summarized in Table C.1. Table C.1 Summary of the VLS-PV development scenario

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S-0: R&D stage (four years) Five 500 kW PV systems will be constructed and operated to verify the basic characteristics of the PV system in a desert area. The reliability of VLS-PV in a desert area and the requirements for grid connection will be mainly examined and investigated as technical issues. Conditions for site selection, planning of co-operation frameworks, including training engineers, and funding schemes will be investigated as non-technical issues. S-1: Pilot stage (three years)

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A 25 MW PV system will be constructed and operated to evaluate and verify preliminary characteristics of a large-scale PV system. Technical issues here are of a higher level and shift to concentrated and grid-connected PV systems, for building VLS-PV technical standards. PV module facilities will be constructed and operated although the PV modules constructed would be imported. PV module production will be introduced in the next stage. Further, development for preventing desertification, such as vegetation and plantations, will also be started at this stage. S-2: Demonstration stage (three years) A 100 MW PV system will be constructed and operated to research methods of grid-connected operation and maintenance when VLS-PV actually takes on part of the local power supply. The knowledge, on connecting VLS-PV to the existing grid line, obtained at this stage will be technical standards for deploying VLS-PV. Non-technical issues will also advance for industrialization. Mass production of PV modules will be carried out and BOS production on-site will be started towards a deployment stage. S-3: Deployment stage (five years) A 1 GW PV system will be operated to verify the capability of VLS-PV as a power source. Although the technologies for generating and supplying electricity will be nearly completed, for deployment of VLS-PV in the future, some options such as demand control, electricity storage and component recycling will be required. These will contribute to building the concept of the solar

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breeder, which is similar to ‘scrap and build’ shown in Figure C.3, and some business plans for VLS-PV will be proposed. The implementation of VLS-PV will activate the world PV industries in a wide range of technologies involving a vast range from solar-cell production to system construction. However, to achieve the final stage, the previous stages from S-0 to S-2 are important, and the developments in each stage should be carried out steadily. C.3 Financial and Organizational Sustainability The proposed scenario for the development and introduction of very large-scale PV systems in deserts has basically four stages: R&D, pilot, demonstration and deployment (commercial) stages. The characteristics of these stages range from theoretical to technical, i.e. through the techno-economic, socio-economic and purely commercial characteristics. Each stage of growth has its own characteristics and cost structure. From a viewpoint of the financial scenario, the feasibility stage should be settled before the R&D stage. The estimated investment levels for these phases range from 1–2 MUSD for the feasibility stage to 4 000 MUSD for the commercial stage. An indicative portfolio of funding sources for each stage is identified. Since the first two stages are not supposed to be commercial, but are theoretical and experimental, no further exploitation or return on investment (ROI) calculation is undertaken. At this moment, the costs and funding arrangements of the commercial stage can only 105

be estimated. The third stage (the demonstration stage) should generate cost and income details for a full investment proposal for such a large plant. There are six potential sources of financing the investment. In Table C.2, a first estimate of possible contributions from these sources is given: Table C.2 Example of contribution towards investment by various sources of co-funding in the different stages of the introduction of VLS-PV

a

Redundancy of funding is necessary to reduce risks. • Direct subsidies may be provided for demonstration, experimental, export promotion, or development co-operation reasons by governmental bodies. The closer a given situation is to being commercial, the lower the direct subsidies that are expected to be granted. • The provision of soft loans and green money may be driven by similar motives, but they can also be provided by private capital. The loan money should increase as the project becomes more commercial to leverage the ROI for the shareholders.

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• Equity and in-kind contributions are investments by the shareholders of the project. Examples of in-kind contributions are office housing and free management services. • Import duties may be exempted or reduced to stimulate the uptake of new or renewable energy technologies in a particular country. • Green certificate buy-off may constitute an up-front contribution of a utility that subsidizes the project and receives green certificates in return. • Other instances may be profit tax advantages of investors regarding the project. Basically, all net investment costs, interest and profits should be recovered through exploitation of the plant. The net investment is the investment after subtracting subsidies and fiscal advantages. There are four recognized sources of income during the exploitation stage: • electricity power sales • opportunity costs, to be explained later • green certificates, not to be double-counted with a possible up-front investment • tax incentives, such as reduced VAT and exemption from pollution taxes. In Table C.3, an overview of the income and recurring costs from the exploitation is given.

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Table C.3 Estimated income as a percentage of total recurring costs after subsidy of the different stages of the introduction of VLS-PV

The feasibility stage is easily supported when applying to national or multinational governmental organizations. The size and novelty of the project is expected to gear sufficient interest to achieve the involvement of the World Bank, the EU, and the respective national governments of interested OECD countries. There are no exploitation costs or income at this stage. At a cost of around 30–40 MUSD, this R&D/pilot project would be a project of a relatively large size for individual governments to bear, but not for two or more governments or multilateral organizations. As it has interesting technical and social aspects, there will be multiple instruments to apply for funding. The strongly reduced investment by heavy subsidies will enable the electrical power to be sold favourably. Thus electricity accounts for 50 % in the income of the plant. Other sources of income are green certificate values and tax incentives. The subsidy for the cost and financing of a 100 MW demonstration plant will be reduced. The exploitation could be economically attractive, depending on several assumptions. The first and most important are the value of green certificates and the value of so-called 108

opportunity costs. These opportunity costs are costs avoided by certain companies or increased income for such companies, due to the existence of the VLS-PV project. The deployment/commercial stage will have to benefit from reduced costs of PV modules and increased cost of power and of green certificates. However, it may be too early to give more details regarding such a 1 GW plant. It is recommended to make a full-scale feasibility study for an R&D project and a 100 MW demonstration plant. This feasibility study should identify targets and location, and fully secure funding sources and electricity outlets for both stages. Without funding identified and secured for the 100 MW demonstration plant, the R&D stage should not be implemented. C.4 Recommendations As an overall conclusion of this work, recommendations are given here to realize long-term targets based upon the results of the studies performed in the IEA Task VIII. The adoption of VLS-PV will require four steps, as shown in Figure C.4:

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Figure C.4 Flowchart for recommendation 1. Absorbing the concept of VLS-PV in a desert environment 2. Considering a long-term scenario approach 3. Positioning yourself in terms of your strategy 4. Making an action plan and allocating resources In this report, concrete information on VLS-PV is given, so the first two steps can be taken into consideration. The generalized understandings and recommendations on a policy level give direction to those who consider the adoption process. To support those willing to consider the third and fourth steps, an initial checklist is given. 110

C.4.1 General understandings Based on this report, the considered stakeholders may recognize the following valuable findings. VLS-PV can contribute substantially to global energy needs • The world’s deserts are so large that covering 50 % of them with PV units would generate 18 times the primary energy supply of 1995. • All global energy scenarios project solar PV energy to develop into a multi-gigawatt energy generation option in the first half of this century. VLS-PV can become economically and technologically feasible • Electricity generation costs are between 0,09 and 0,11 USD/kWh, depending mainly on annual irradiation levels (with module price 2 USD/W, interest rate 3 %, salvage value rate 10 %, depreciation period 30 years). These costs can come down by a factor of 2–3 by the year 2010. • The PV technology is maturing with increasing conversion efficiencies and decreasing prices per watt; projected prices of 1,5 USD/W around the year 2010 would enable profitable investment and operation for a 100 MW PV plant. • Solar irradiation databases now contain detailed information on irradiation in most of the world’s deserts. VLS-PV can contribute considerably to the environment

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• The life-cycle CO2 emission is as low as 13 g-C/ kWh; this is mainly due to the module production and the array support. This should be compared with the value of 200 g-C/kWh for just the fuel component of conventional fossil-burning power plants. • The environmental issues for which VLS-PV may provide a solution are global warming, regional desertification and local land degradation. VLS-PV can contribute considerably to socio-economic development • Plant layouts and introduction scenarios are available in preliminary versions. I/O analysis concluded that 25 000–30 000 man-years of local jobs for PV module production will be created per 1 km2 of VLS-PV installed. VLS-PV development needs a long-term view and consistent policy • To reach the level of a 1 GW system, four intermediate stages are recommended: R&D stage, pilot stage, demonstration stage, and deployment (commercial) stage. From stage to stage, the system scale will rise from 2,5 MW to 1 GW, the module and system cost will go down by a factor of 4, and manufacturing will be shifted more and more to the local economy. • In the concept of sustainable local economic growth, the first local PV module manufacturing facility has an annual output of 5 MW. This

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local production provides for construction of the local VLS-PV system. In subsequent years, four more 5 MW module manufacturing facilities are brought into operation, so that annually 25 MW is supplied to the local VLS-PV system. After 10–15 years, a module production facility of 50 MW is put into operation. Every 10 years this facility will be replaced by a more modernized one. Thus after approximately 40 years a 1,5 GW VLS-PV power station will be in operation, and the local manufacturing facility will supply for replacement. In this way, local employment, and thus the economy, will grow sustainably. • To realize the final commercial stage, a view to financing distribution has been developed for all of the three previous stages, consisting of direct subsidies, soft loans, equity, duty reduction, green certificates and tax advantages. It is clear that direct subsidies will play an important role in the first stage. C.4.2 Recommendations on a policy level From the global energy situation, global warming and other environmental issues, as well as from the case studies and scenarios, it can be concluded that VLS-PV systems will have a positive impact. To secure that contribution, a long-term scenario (10–15 years) on technological, organizational and financial issues will be necessary Action now is necessary to unveil the giant potential of VLS-PV in deserts. In such action, involvement of many actors is welcome. In particular, the following are recommended on a policy level:

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• National governments and multinational institutions adopt VLS-PV in desert areas as a viable energy generation option in global, regional and local energy scenarios. • The IEA PVPS community continues Task VIII for expanding the study, refining the R&D and pilot stages, involving the participation by desert experts and financial experts, and collecting further feedback information from existing PV plants. • Multilateral and national governments of industrialized countries provide financing to generate feasibility studies in many desert areas around the world and to implement the pilot and demonstration phases. • Desert-bound countries (re-)evaluate their deserts not as potential problem areas but as vast and profitable (future) resources for sustainable energy production. The positive influence on local economic growth, regional anti-desertification and global warming should be recognized. C.4.3 Checklist for specific stakeholders To decision-makers in industrialized countries You obviously have a long-term view of the world energy market trends and the need to provide a national energy outlook. • Have you considered the future possibility of VLS-PV for your industries, which may become

114

•

•

•

•

•

major enterprises controlling the world energy market? Do you have a step-by-step plan for R&D to make good use of the extensive capabilities in photovoltaic technology when the world energy problem arrives? Do you have a view to initiate, continue and extend bi- or multilateral international collaboration with those developing countries which have abundant solar energy? Do you have funds available for R&D or pilot programmes with training courses to introduce PV technology into developing regions, especially around deserts as a first stage of a consistent step-by-step approach? Do you have strategies in place to maintain regional sustainability and to consider a moderate technology transfer scenario when planning the further development of developing countries? Have you considered using your influence to mobilize multilateral institutions to stimulate VLS-PV?

To decision-makers in developing countries You obviously are aware of the coming world energy problem in 20–30 years. • Did you include solar PV energy as one of the most favourable renewable energy options when national master plans for energy supplies were discussed? 115

• Have you considered the opportunity that your country will be able to export PV energy to neighbouring regions and that new jobs will be brought to your people? • Are you aware of the fact that PV technology has already proven itself to be a cost-competitive energy source for rural electrification and is still being improved very rapidly? In particular, are you aware that it is especially effective for stabilizing rural lives? • Have you considered a regional development plan that utilizes abundant electricity production and vast lands? • Have you settled on a step-by-step, long-term approach that starts with solar home systems or mini-grids as the first stage and finally reaches VLS-PV in 20–30 years? • Do you have a plan to cultivate and gradually raise a domestic PV specialists’ society from an early stage to a developed stage? • Have you already asked for support from the variety of financial institutions you can utilize? To decision-makers in oil-exporting countries You obviously are aware of the fact that many oil-exporting countries around desert areas also have an everlasting natural resource: solar energy. • Are you aware that you can export PV energy to neighbouring regions as well? • Do you know that PV technology has already been proven as a cost-competitive energy source 116

•

•

• •

for rural electrification and is still being improved rapidly? Did you develop a long-term view of the future world energy market and your strategy including the new level of photovoltaic power plants and industries? Are you aware that it will bring you opportunities for high-tech industries and new jobs? Can you confirm the study results that a 100 MW PV power plant will be economically attractive in an oil- exporting country? Have you discovered good conditions in interest rates, the value of green certificates and the value of opportunity benefits from oil savings? Have you decided to invest in the development of the world photovoltaic business? Did you choose an appropriate scale for starting towards VLS-PV?

To financing institutions and banks You are presumably aware of the fact that the market potential for VLS-PV amounts to 2 billion people worldwide. • Are you aware of the Task VIII study results that show the size of indicative investment levels for the 100 MW demonstration stage and the 1 GW deployment stage corresponds to 500 and 4 000 MUSD respectively? Do you consider this much different from the magnitude of hydropower or infrastructure projects in a budgetary sense? 117

• Do you respect the following funding scenario study for a 100 MW demonstration stage and a 1 GW deployment stage? They are economically attractive in some cases, assuming that 30–65 % of total investment is met by soft loans with 4 % interest. Another portion is expected to come partially from subsidy, equity, tax reduction, etc. • Can you positively support a full-scale feasibility study for a pilot project and for a 100 MW demonstration plant as a continuation of the Task VIII? This will identify targets and locations and will secure the funding sources and electricity outlets for both stages. • Can you support the pilot stage and the 100 MW demonstration stage according to the results of this study? • Could you consider a low-interest soft loan on a long- term basis for the initiation of VLS-PV system projects around desert areas? To PV industry associations and multinational industries You are obviously aware of possibilities for future market growth in southern countries. • Are you aware of the future possibility of VLS-PV for PV industries? They may become major enterprises controlling the world energy market. • Are you confident that the photovoltaic technology and market will become competitive on a worldwide level within 20 years?

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• Can you ensure that the prices for solar PV energy will be reduced by a factor of a half to a quarter within the next decade? • Can you support and invest in local industries to take off according to the technology transfer scenario? To PV specialists and the academic community You know that fundamental research will generate new seed technologies for VLS-PV. • Can you confirm expected directions such as very high-efficiency PV cells, high-concentration optics, organic polymer PV cells, chemical energy transportation media like hydrogen or methanol, superconducting power transmission and so on? • Did you formulate and assist a PV specialist society in developing countries in co-operation with top leaders in those countries? • Will you join our continuing work, seeking the realization of VLS-PV systems? Expected work items may include more precise case studies for specific sites and funding, proposals for R&D co-operation plans, other possibilities in technological variety, resource evaluation, additional value analysis and so on. To power utilities

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You have clearly recognized that the world energy market structure will change very drastically in the near future. • Can you confirm business opportunities in photovoltaics within the next decades? • Can you confirm that a power transmission scenario is possible according to our study results? Additional tieline construction of less than 100 km, for connecting VLS-PV through existing national power grids to a load centre, will raise the electricity price by less than 1 US cent/kWh. One example is a transmission operation in co-operation with coal-burning power stations located on a colliery. • Are you ready to invest in photovoltaic industries and foster technological societies with a long-term view for the future world energy market? To the International Energy Agency You are clearly aware that the diversification of energy resources and the development of alternative energy are essential for overcoming the world energy problems within the next decades. • Can you confirm our view that solar PV energy is one of the most favourable options for future electricity production? • Can you confirm your continuous support of the IEA PVPS Implementing Agreement on the • basis of the long- term world energy outlook? 120

Would you support our idea about multilateral activities between IEA member countries and developing countries? • Can you organize the higher level of IEA PVPS activities including demonstration projects for VLS-PV? • Do you want to support a full-scale feasibility study corresponding to a pilot project and a 100 MW demonstration plant? This will identify targets and location, and fully secure funding sources and electricity outlets for both stages. • Can you support and enhance the continuing work in the IEA PVPS Task VIII? Expected work items are to be: • more precise case studies for specific sites including detailed local conditions and funding sources as well as demand application, • proposals for the first or second stage of co-operation plans to be submitted to financial institutions, • comprehensive evaluation of other possibilities of a technological variety such as tracking, concentrator and advanced PV cells, • resource evaluation of VLS-PV by means of remote sensing technology, • investigation of additional effects of VLS-PV on the global environment such as global warming and desertification, • expansion of evaluating approaches to other types of PV mass applications in 121

the 21st century, including value analysis in the economy, environment, socio-economy and others.

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Part I Background and Concept of VLS-PV We are in a new age beyond the 20th century, which was the age of high-consumption society maintained by the massive supply of fossil fuels and advances in science and technology. But human activities in such a society bring serious impacts on to ourselves such as energy security, global environmental issues and a population problem. Therefore, it is necessary to reconstruct a new society with new values and new lifestyles in order to sustain our world hereafter. Finding solutions for energy and environmental issues is essential for realizing a sustainable world, since it will take a long time to develop energy technologies and to recover from the destruction of the global environment. Renewable energy, such as solar, hydropower, geothermal and biomass, is expected to be the main energy resource in the future. Photovoltaic (PV) technology is one of the most attractive options of these renewables, and many in the world have been making endeavours to develop PV technologies for the long term. Part I, which is the introductory part of the entire report, begins with a review of global energy and environmental issues (Chapters 1 and 2). Chapter 3 is a general description of PV technology. The irradiation database in Chapter 4 is background information for discussion of very large-scale photovoltaic power generation

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(VLS-PV) systems, the concept of which is introduced in Chapter 5.

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Chapter One World energy issues

1.1 Long-Term Trend in World Primary Energy Supply and Demand Since the Industrial Revolution in the 18th century, world energy demand has been growing as the population has increased and the world economy has grown. The present world primary energy supply has reached approximately 20 times as much as it was 100 years ago based on the development of fossil fuels such as coal, oil and natural gas. Since the middle of the last century, nuclear energy has also been generated for practical use. The two oil crises in the 1970s made us aware that fossil fuels are exhaustible and triggered the development of alternative energy resources such as renewable energy. Table 1.11, 2 shows the latest statistics on proven fossil-fuel reserves. Recently, global environmental issues described in Chapter 2 have been boosting development of renewable energy resources. Nevertheless, most of the primary energy still depends on fossil fuels and current utilization of the renewables is negligibly small except for hydropower. Table 1.1 Proved reserves of fossil fuels and uranium

126

Natural Oil Coal Uranium gas (103 (billion (billion (million billion bbl) tons) tons) m3) Proved reserves, R

1 033,8

146

North America

6,2%

5,0%

26,1 % 17,8 %

8,6%

4,3%

2,2 % 6,3 %

2,0%

3,5%

12,4% 2,8 %

Central and America Europe

South

Former Soviet Union 6,3%

984,2

3,95

37,7% 23,4 % 0,0 %

Middle East

65,4% 33,8%

0,0 % 23,0 %

Africa

7,2%

7,7%

6,2 % 18,7 %

Asia–Pacific

4,3%

7,0%

29,7 % 31,4 %

Annual production, P 26,2 R/P (years)

41,0

2,3

4,28

0,035

61,9

230

64,2a

aR/P

of uranium is obtained by dividing its proven reserve by its annual demand (0,062 million tons) because its annual production is less than its annual demand. Data sources: Fossil fuels BP Amoco Statistical Review of World Energy 2000, BP Amoco.1 Uranium – IAEA Uranium 1999, OECD/NEA.2 According to the IEA report,3 generally the total amount of fossil-fuel resources in the world will not exhaust the energy supply until 2030, although there are possibilities 127

of a rapid increase in energy demand, a geographical imbalance between supply and demand, and temporal and local supply problems. There is a forecast that the world primary energy supply in 2030 will increase to over 1,5 times as much as that in 2000, and fossil fuel will continue to be 90 % of the total as shown in Figure 1.1.3 This will result in a significant increase in carbon dioxide (CO2) emissions and will make it difficult to stabilize atmospheric CO2 levels.

Figure 1.1 World primary energy supply by fuels, 1971–2030. Source: IEA Figure 1.23 is the same world primary energy supply from 1971 to 2030 by region. This figure suggests that energy supply in Asian countries will increase much more than in OECD countries. This trend is seen more easily from Figure 1.3,3,4 which represents relationships between energy demand per capita and PPP (parity purchase any power) by region. PPP per capita of OECD

128

countries increases successfully without increase in energy consumption per capita, while the economic growth of developing countries depends on an increase in energy consumption. Even beyond 2030, rapid growth in developing countries may continue further, reflecting the economic gap between the developing and industrialized countries.

Figure 1.2 World primary energy supply by region, 1971–2030. Source: IEA

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Figure 1.3 Regional energy and economy per capita. Source: IEA In addition to the long-term world energy problem, global warming is another urgent issue because CO2 emissions are caused by the combustion of fossil fuels, as shown in Figure 1.4.3 As pointed out at the Kyoto Conference of the Parties COP-3, simple economic optimization processes for world energy supply can no longer be accepted to overcome global warming. It was also pointed out at the Kyoto COP-3 that changes in final energy demands and non-fossil substitution for fossil-fired power generation are both necessary in order to meet the Kyoto Protocol.

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Figure 1.4 World primary energy supply and CO2 emissions, 1971–2030. Source: IEA Besides the IEA, several international institutions report future world scenarios, which are briefly summarized in Table 1.2.5–7 The IEA forecast looks somewhat conservative for non-fossil energy for 2020, but analyses by the EU (European Union) and WEC/IIASA (World Energy Council / International Institute for Applied Systems Analysis) gave more ambitious shares to non-fossil sources. These forecasts imply that the share of electric energy will increase in the future. Only WEC/ IIASA forecast that non-fossil fuels would account for approximately 30–40 % of total primary energy supply for 2050. This indicates that there will be a large need for renewable sources in the middle of this century. Table 1.2 Summary of future world scenarios

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Moreover, even a major oil company is concerned about the potential of renewables as a major energy resource in future. Shell International Petroleum Co. recently predicted world energy resources towards 2060, as shown in Figure 1.5.8 Around 2020, oil will begin to decrease its share and renewables will take off as one of the major energy resources. Biomass will come first and then solar energy will become actualized around 2030. It is also forecast that more than half of the world’s energy supply will come from renewable resources in the 2050s.

Figure 1.5 World energy forecast towards 2060

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So considering future energy problems, the basic conditions and tendencies may be summarized as follows: • World energy demands will rapidly expand towards the middle of this century due to world economic growth and population increase. • The sustainable prosperity of human beings can no longer be expected if global environmental issues are ignored. • The share of electric energy is rising more and more as a secondary energy form. • Although the need for nuclear power will increase as a major option, difficulties in building new plants become more and more notable at the same time. • Alternatively, renewables are considered to possess large potential as well as providing energy conservation, carbon-lean fuels and CO2 disposal/recovery. • Thinking about the long lead-time for the development of energy technology, it is urgently necessary to seek new ideas for energy sources applicable for the next generation. 1.2 Potential of Renewables All of us know that a variety of renewables exist around the world, for example, solar energy, hydropower, geothermal, wind and biomass. The origin of almost all of these renewables is solar energy, as shown in Figure 1.6.9 Incoming radiant energy from the Sun to the Earth can be estimated as 172 500 TW (TW = 1012 W) by 133

multiplying the solar constant (= 1,353 kW/m2)10 by the cross-section of the Earth (= 1,275 × 1014 m2). Approximately 70 % of this energy, 120 000 TW, enters the terrestrial sphere and then becomes an energy source to drive a variety of natural energy flows and phenomena. It reaches the atmosphere, hydrosphere, upper lithosphere and biosphere. From the lower lithosphere, geothermal energy also flows out, which is not of solar origin. Its percentage is not so large compared with the solar quantity. In addition, another smaller form of non-solar content is induced by the gravitation of the Moon, i.e. tidal energy.

Figure 1.6 Renewable energy balance on the Earth (TW). (Note: The solar constant that seems to be the most certain is 1,370 ± 0,006, according to WMO11). Source: B. Sørensen, 1991 Since solar energy flow is distributed from place to place, its density tends to become weak or uneven. This

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may be the main reason for difficulties in the efficient and economical utilization of renewables. Table 1.3 gives renewable energy flows and their capabilities estimated by Sørensen9 and IIASA,12 respectively. The right-hand column ‘Resource base’ in Sorensen’s analysis is thought to be ideal values without considering conversion efficiencies. The right-hand column of the IIASA estimation is suggested as realistic values considering economical factors within 50 years. Though the direct utilization of solar energy is not included in IIASA’s estimation, the total potential amount of renewable energy for both technical and realistic assumptions ranges from 8,7 to 15,0 TW (274 to 473 EJ). As already described, the total primary energy supply is forecast at around 569–645 EJ in 2020 and 829–1 038 EJ in 2050.This means that the potential of renewables is estimated to be on the same order as world energy consumption in this century. Accordingly, one major option of future energy resources is obviously renewables. Table 1.3 Potential amount of world renewable energy resources

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Coming back to our present day, world renewable energy supply is small. Table 1.413, 14 shows renewable energy supply in OECD countries. The world renewable energy supply in 1998 was about 12 EJ, a large part of which was from traditional renewables, that is, hydropower and geothermal. Unconventional renewables such as photovoltaic energy and wind energy were a negligible small amount. Therefore, continuous efforts to develop renewable energy technologies over the coming 15 years are indispensable. Table 1.4 Trends in world renewable energy supply in OECD countries

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At the G8 Summit held in Okinawa in June 2000, a renewable energy task force reported a strategic pathways analysis for alternative power generation scenarios towards 2030.15 In this activity, a scenario analysis was performed for the following two scenario options by using the SIMULI (SIMUlation of Learning Investments) model developed at Chalmers University of Technology, Göteborg, Sweden: • Business as Usual (BaU) in which G8 governments will not implement any actions for promoting renewable energies. • Diversify-Renewables which is based on the Alternative Power Generation Case of IEA World Energy Outlook 2000 Reference Scenario except for PV, small hydro and other innovative technologies such as biomass, fuel cells and IGCC. Figure 1.7 shows the comparison between Diversify-Renewables and the World Energy Outlook (WEO) Alternative Power Scenario for the OECD 137

countries. It is supposed in the Diversify-Renewables scenario that world PV market will grow 35 % annually to 2012. As shown in Table 1.5, which gives installed global capacity in the Diversify-Renewables scenario, PV technology is expected to contribute the most among renewable technologies. Figures 1.8 and 1.9 show technological scenarios for world electricity supply based on the SIMULI model. Table 1.5 Installed global capacity ‘Diversify-Renewables’ scenario (GW)

in

the

Figure 1.7 Comparison between the ‘Diversify-Renewables’ scenario and the World Energy

138

Outlook Alternative Power scenario for the OECD countries. Source: G8 Renewable Energy Task Force

Figure 1.8 World electricity supply in the case of the Business as Usual scenario. Source: G8 Renewable Energy Task Force

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Figure 1.9 World electricity supply in the case of the Diversify-Renewables scenario. Source: G8 Renewable Energy Task Force 1.3 Trends in the PV Market 1.3.1 PV module production and PV system introduction in the world Figure 1.1016 shows world PV module shipment by region from 1983. The world market for photovoltaics has been growing at over 20 % annually for the past several years. Though it took more than 10 years to exceed 100 MW, only two years were required to reach 200 MW, and PV module shipment in 2001 reached 391 MW. This rapid growth in the recent PV market has been driven by the increase in Japanese PV module 140

shipments due to the market-promoting programmes. There is an estimate that the world PV market will rise to 1–2,3 GW in 2010,17 which almost meets other forecasts of 1,7 GW18 and 1,3 GW19 in 2010.

Figure 1.10 World PV module shipment by region, 1983–2001 Figure 1.1116 gives the same PV module shipment by technology. The majority of the PV market is crystalline silicon technology (c-Si and poly-Si), which accounted for around 80 % of total shipments in 2001.

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Figure 1.11 World PV module shipment by technology, 1983–2001 Reflecting recent growth in the world PV market, the world PV system introduction has been increasing. Figures 1.12 and 1.1320 represent the growths of cumulative PV system introduction by region and application, respectively. The cumulative PV system introduction at the end of 2001 was 982 MW, approximately half of which was introduced in Japan. Also PV system introduction in Germany has been increasing recently to around 20 % of the world total.

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Figure 1.12 Growth introduction by region

of

143

cumulative

PV

system

Figure 1.13 Growth of introduction by application

cumulative

PV

system

1.3.2 Perspectives of the PV market With respect to near-future targets for PV system installation, several governments have their own targets as shown in Table 1.6. Table 1.6 Near future target of PV system installation by government Japan

4 820 MW (2010)

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US

3 000 MW (2010)

EU

3 000 MW (2010)

Germany Italy The Netherlands

300 MW (2003) 50 MW (2004) 250 MW (2010)

Data source: Resources Total System Co. Ltd. Concerning long-term prospects of the PV market after 2020, there are several deployment scenarios reported from the USA,21 Europe22 and Japan.23 (A) SOLAR-ELECTRIC POWER – THE US PHOTOVOLTAIC INDUSTRY ROADMAP21 The US Photovoltaic Industry Roadmap Steering Committee (which consists of Astropwer, Idaho Power, Avista Labs, Siemens, Solar Industries, Solarex, SEIA, MIT, Spire Corp., Trace Engineering, Purdue University, BP Solar and Stella Group) reported their roadmap in April 2001. This report indicates the future direction of the PV industry, evaluation organizations, and national programmes for their market enlargement towards 2020.Their goal is to meet 10 % of domestic peak generation capacity by 2030 by PV technology. In order to obtain this goal, they indicate the near-term, mid-term and long-term roles for both industry and government, as shown in Table 1.7. They expect that cumulative world PV module shipment will reach 88 GW in 2020 and annual shipment in the world will increase to 17 GW/

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year. They also estimate US PV module shipment in 2020 to be 7,2 GW/year (Figures 1.14 and 1.15). Table 1.7 Activities/roles of the solar-electric industry and the government. Source: National Centre for Photovoltaics

146

Figure 1.14 Goals for cumulative world PV shipments showing US share and distribution in domestic and non-domestic markets. Source: National Center for Photovoltaics

Figure 1.15 Goals for annual US-based industry shipments from 2001 to 2020 showing both world and US domestic and non-domestic markets. (Targeted total 147

shipments in 2020 will be 17 GW/year). Source: National Center for Photovoltaics (B) SOLAR GENERATION – SOLAR ELECTRICITY FOR OVER 1 BILLION PEOPLE AND 2 MILLION JOBS BY 202022 Greenpeace International and the European Photovoltaic Industry Association produced a long-term vision for PV deployment in October 2001. As summarized in Table 1.8, they expect that cumulative world PV module shipment will amount to 207 GW in 2020, which is a more exciting target than the US perspective and will generate 276 TWh. They also forecast that PV module cost will be reduced to 1 USD/W in 2020 and contribute to solar electrification for 1 billion off-grid people and job creation for 230 million people in the world. Moreover, they project that PV can generate 9 113 TWh, which corresponds to 26 % of the world’s electricity demand. Table 1.8 Greenpeace/EPIA long-term solar electricity vision Target years

In 2020

Projections

Global solar 278 TWh electricity output

148

Remarks 30 % of total demand in Africa, or 10 % of total demand in OECD Europe, or 1 % of total global electricity production

PV system 207 GW capacity Grid-connected 82 million consumers worldwide 35 million in Europe Off-grid consumers

1 billion worldwide

Employment potential

2,3 million full-time jobs worldwide

Investment value

75 000 MUSD/year

Cost of modules

solar

Level of USD/W achieved

1

Cumulative 664 million carbon savings t-CO2

In 2040

Global solar 9 113 TWh electricity output

149

26 % of total global demand more than the combined demand in OECD Europe and OECD North America in 1998

(c) NEW INDUSTRY CREATION FOR ENERGY AND ENVIRONMENT – A LONG-TERM VISION OF JAPANESE PV INDUSTRY23 In June 2002, the Japanese Photovoltaic Industry Association (JPEA) drew up their long-term outlook towards 2030. They expect that cumulative PV installation in Japan will rise to 28,7 GW in 2020 and 82,8 GW in 2030. In 2030, the domestic market will extend to 2,25 × 106 MJPY due to annual PV introduction of 10 GW, and the market price of a residential PV system will decrease to 200 000 JPY/kW. They also have a prospect that VLS-PV will appear in desert areas in around 2030. Table 1.9 is a summary of their long-term outlook. Table 1.9 JPEA long-term outlook towards 2030 2010

2020

2030

capacity4,82

28,7

82,8

Residential sector 4,2 %

20%

45,6 %

Public sector

2,2 %

22%

72%

0,01 %

13 %

47%

Annual installation 1,23 (GW/year)

4,3

10,05

Market scale (billion 473 JPY)

1 250

2 250

Cumulative installation (GW)

Penetration ratio

Commercial sector

150

Share of export

8%

18%

25%

–

300

300

250

200

Industrial system 380

250

200

Employment potential – (thousand persons) Market price (1 000 JPY/kW) Residential system

References 1 BP Amoco, BP Amoco Statistical Review of World Energy 2000. 2

OECD/NEA, IAEA Uranium 1999.

3

IEA, World Energy Outlook, 2002 edition.

4

IEA, Key World Energy Statistics from the IEA 2002.

5

IEA, World Energy Outlook, 2000 edition.

6

EU.

7

WEC/IIASA.

8 J. van der Veer, Royal Dutch/Shell Group and Dawson, Shell International Renewables, press release from Shell International Petroleum Co., London, 6 October 1997. 9 B. Sørensen, ‘Renewable energy – a technical overview’, Energy Policy, May 1991.

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10 M. P. Thekaekara and A.J. Drummond, ‘Standard values for the solar constant and its spectral components’, Nat. Phys. Sci., 229(6), 1971. 11 WMO, Technical Note No. 172, 1981. 12 W. Häfele, Energy in a Finite World, Vol. 2, IIASA, Ballinger, 1981, p. 220. 13 IEA, Electricity Information. 14 IEA, Energy Balances in OECD Countries. 15 G8 Renewable Energy Task Force, Chairmen’s Report, July 2001. 16 P. Maycock, PV News. 17 E. Lysen and S. Nowak, IEA–PVPS Overview, Sacramento, USA, 23 April 2001. 18 P. Maycock, Renewable Energy World, Vol. 2, No. 4, July 1999. 19 http://co2.kemco.or.kr/htm/fccc_ie.html 20 IEA, Trends in Photovoltaic Applications, August 2002. 21 Solar-Electric Power – The US Photovoltaic Industry Roadmap, April 2001. 22 Greenpeace International and European Photovoltaic Industry Association, Solar Generation – Solar Electricity for over 1 Billion People and 2 Million Jobs by 2020, October 2001. 23 Japanese Photovoltaic Industry Association, ‘New industry creation for energy and environment – a 152

long-term vision of Japanese PV industry’, 19th Symposium on PV System, Tokyo, June 2002 (in Japanese).

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Chapter Two Environmental issues

Recently, great concern about environmental issues has spread throughout the entire world. For human well-being and sustainable economic development, all projects must take environmental assessment into account. Although VLS-PV is essentially expected to serve as a mitigation measure, it is indeed a very large-scale and long-range project, the likes of which we have never before experienced. Therefore, the environmental aspects of VLS-PV must be discussed in advance with the utmost care. This chapter simply offers a general description of some major environmental issues relating to the introduction of VLS-PV, and expected impacts thereof. The environmental impact of VLS-PV may be divided into three categories from a geographical viewpoint, i.e. global, regional and local, as shown in Figure 2.1. The global environmental issues are matters related to global changes. In particular, climate warming is one of the most important issues in the world. Regional issues are trans-boundary environmental issues, in which atmospheric and water pollution can be included. Local environmental issues are changes restricted to the local environment that surrounds the VLS-PV installation site. The most important phenomenon in this issue may be desertification and land degradation. Changes in 154

microclimate are another local environmental issue. Since biological diversity is closely related to various environmental issues, it will be discussed in each category as a cross-sectional issue.

Figure 2.1 Possible environmental issues impacted by VLS-PV 2.1 Global Environmental Issues 2.1.1 Observed change in the global climate system There is great anxiety that the release of greenhouse gases (GHGs) into the atmosphere results in a variety of influences on the Earth. There are various kinds of GHGs, which have global warming potentials as shown in Table 2.1. In this section, some changes that have been caused by GHGs will be described. Table 2.1 GHGs and global warming potentials (GWP)1

155

156

2.1.1.1 Global climate change Increases in the concentration of GHGs increase the atmospheric temperature. According to the IPCC (Intergovernmental Panel on Climate Change) Third Assessment Report,1 the global average surface temperature has increased by (0,6 ± 0,2) °C since the late 19th century. It is very likely that the period from 1990 to 2000 was the warmest decade, and 1998 the warmest year, in the instrumental record since 1861. As indicated in Figure 2.2, most of the increase in global temperature since the late 19th century has occurred in two distinct periods: from 1910 to 1945, and in the period since 1976. The rate of increase of temperature for both periods is about 0,15 °C/decade.

Figure 2.2 Changes in average surface temperature1 The regional patterns of the warming that occurred in the early part of the 20th century were different from those that occurred in the latter part. The most recent period of

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warming (1976–1999) has been almost global, but the largest increases in temperature have occurred over the mid- and high latitudes of the continents in the Northern Hemisphere. It is likely that the rate and duration of the warming of the 20th century is greater than at any other period during the last 1 000 years. The 1990s are likely to have been the warmest decade of the millennium in the Northern Hemisphere. The detailed temperature record for the Northern Hemisphere is shown in Figure 2.3. The rate and duration of warming of the Northern Hemisphere in the 20th century appear to have been unprecedented during the millennium.

Figure 2.3 Temperature anomalies in the Northern Hemisphere1 2.1.1.2 See-level rise The level of the sea at the shoreline is determined by many factors in the global environment that operate on a

158

great range of time-scales, from periods of hours (tidal) to millions of years (ocean basin changes due to tectonics and sedimentation). On the time-scale of decades to centuries, some of the largest influences on the average levels of the sea are linked to climate and climate change processes. According to IPCC,1 based on geological data, eustatic sea-level (i.e. corresponding to a change in ocean volume) may have risen at an average rate of 0,1 to 0,2 mm/year over the last 3 000 years. Over the past 3 000–5 000 years, oscillations in global sea-level on time-scales of 100–1 000 years are unlikely to have exceeded 0,3–0,5 m. On the other hand, the rate of global mean sea-level rise during the 20th century is in the range 1,0–2,0 mm/ year. This rate is about 10 times that of the rate occurring during the last 3 000 years. Based on the very few long tide-gauge records, the average rate of sea-level rise has been larger during the 20th century than during the 19th century. 2.1.1.3 Ozone depletion Ozone (O3), almost all of which exists in the stratosphere, absorbs harmful ultraviolet radiation to protect living beings on the Earth. Ozone is depleted by the use of chlorofluorocarbons (CFCs) and halons. CFCs and halons are anthropogenic chemicals and are used in refrigerants, aerosol propellants, electronic solvents and foam blowing. They remain in the stratosphere for a long time because of their high chemical stability, and the chlorine, which dissolves

159

ozone, is released by ultraviolet radiation. Ozone depletion results in induction of skin cancer, cataracts, reduction of agricultural yields, and exacerbation of urban smog. 2.1.2 Projections of the future climate In order to make projections regarding the future climate, based on recent scientific analysis, the IPCC has developed a new set of emissions scenarios, effectively to update and replace the well-known IS92 scenarios. The new approved scenarios were set as in the IPCC Special Report on Emission Scenarios (SRES).2 Four different narrative storylines (A1B, A2, B1 and B2) were developed to describe consistently the relationships between the forces driving emissions and their evolution, and to add context for scenario quantification. Later, two additional scenarios (A1FI and A1T) were selected within the Al family. Table 2.2 shows brief descriptions of each scenario. Indeed, several decades of scenarios with different assumptions, based on these storylines, were set for making projections. Table 2.2 Emissions scenarios of the Special Report on Emissions Scenarios (SRES)2 The A1 storyline and scenario family describes a future world of very rapid economic growth, with a global population that peaks in mid-century and declines thereafter, and the rapid introduction of A1: new and more efficient technologies. Major underlying themes are convergence among regions, capacity building, and increased cultural and social interactions, with a substantial reduction in regional

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differences in per capita income. The A1 scenario family develops into three groups that describe alternative directions of technological change in the energy system. The three A1 groups are distinguished by their technological emphasis: fossil intensive (A1Fl), non-fossil energy sources (A1T), or a balance among all sources (A1B) (where ‘balance’ is defined as not relying too heavily on one particular energy source, on the assumption that similar improvement rates apply to all energy supply and end-use technologies). The A2 storyline and scenario family describes a very heterogeneous world. The underlying theme is self-reliance and the preservation of local identities. Fertility patterns across regions converge very A2: slowly, which results in a continuously increasing population. Economic development is primarily regionally oriented, and per capita economic growth and technological change are more fragmented and slower than in other storylines. The B1 storyline and scenario family describes a convergent world with the same global population, which peaks in mid-century and declines thereafter, as in the A1 storyline, but with rapid change in economic structures towards a service and B1: information economy, with reductions in material intensity and the introduction of clean and resource-efficient technologies. The emphasis is on global solutions to economic, social and environmental sustainability, including improved equity, but without additional climate initiatives. 161

The B2 storyline and scenario family describes a world in which the emphasis is on local solutions to economic, social and environmental sustainability issues. It is a world with continuously increasing global population, at a rate lower than that of A2, B2: intermediate levels of economic development, and less rapid and more diverse technological change than that of the A1 and B1 storylines. While the scenario is also oriented towards environmental protection and social equity, it focuses on local and regional levels. The globally averaged surface temperature is projected to increase by 1,4–5,8 °C between 1990 and 2100, as shown in Figure 2.4.1 Temperature increases are projected to be greater than those in the IS92 scenarios. The projected rate of warming is much greater than the observed changes during the 20th century, and is very likely to be without precedent during at least the last 10 000 years.

162

Figure 2.4 Projection of increase in average surface temperature1 Projections of global average sea-level rise from 1990 to 2100 lie in the range 0,09–0,88 m (Figure 2.5),1

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primarily from thermal expansion and loss of mass from glaciers and ice caps. The central value is 0,48 m, which corresponds to an average rate of about two to four times the rate over the 20th century. The range of sea-level rise based on the IS92 scenarios was 0,13–0,94 m. Despite higher temperature change projections in this assessment, the sea-level projections are slightly lower, due primarily to the use of improved models that involve a smaller contribution from glaciers and ice sheets. Extreme high water levels will occur with increasing frequency as a result of mean sea-level rise. Their frequency may be further increased if storms become more frequent or severe as a result of climate change.

Figure 2.5 Projection of global average sea-level rise1 2.1.3 Projected influences by climate warming Natural and human systems are exposed to climatic variations, such as changes in the average, range and 164

variability of temperature and precipitation, as well as the frequency and severity of weather events. Systems would also be exposed to indirect effects from climate change such as sea-level rise, soil moisture changes, changes to the land, and so on. Based on the projected future climate, examples of the impacts of extreme climate events are shown in Table 2.3.3 It is very likely that daytime maximum and minimum temperatures will increase, accompanied by an increased frequency of hot days. It also is very likely that heat waves will become more frequent, and the number of cold waves and frost days (in applicable regions) will decline. Increases in high-intensity precipitation events are likely at many locations; Asian summer monsoon precipitation variability is also likely to increase. The frequency of summer drought will increase in many interior continental locations, and droughts – as well as floods - associated with El Niño events are likely to intensify. Peak wind intensity and mean and peak precipitation intensities of tropical cyclones are likely to increase. Table 2.3 Examples of impacts resulting from projected climate warming3 Projected changes Representative examples of during the 21st projected impacts (all high century in extreme confidence of occurrence in some climate phenomena, areas) and their likelihoods SIMPLE EXTREMES

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• Increased incidence of death and serious illness in older age groups and among the urban poor • Increased heat stress in Higher maximumlivestock and wildlife temperatures; more hot days and heat• Shift in tourist destinations waves over nearly all• Increased risk of damage to a land areas (verynumber of crops likely) • Increased electric cooling demand and reduced energy supply reliability

• Decreased cold-related human morbidity and mortality

Higher (increasing) • Decreased risk of damage to a minimum temperatures; fewernumber of crops, and increased cold days, frost daysrisk to others and cold waves over• Extended range and activity of nearly all land areassome pest and disease vectors (very likely) • Reduced heating energy demand More intense• Increased flood, landslide, precipitation eventsavalanche and mudslide damage (very likely over many • Increased soil erosion areas)

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• Increased flood runoff could increase recharge of some floodplain aquifers • Increased pressure on government and private flood insurance systems and disaster relief COMPLEX EXTREMES • Decreased crop yields Increased summer• Increased damage to building drying over mostfoundations caused by ground mid-latitude shrinkage continental interiors water resource and associated risk of• Decreased quantity and quality drought (likely) • Increased risk of forest fire • Increased risks to human life, risk of infectious disease Increase in tropicalepidemics, and many other risks cyclone peak wind • Increased coastal erosion and intensities, and mean damage to coastal buildings and and peak precipitation infrastructure intensities (likely over some areas) • Increased damage to coastal ecosystems such as coral reefs and mangroves

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Intensified droughts and floods associated• Decreased agricultural and with El Niño events inrangeland productivity in many different regionsdrought- and flood-prone regions (likely) (see also hydro-power under droughts and• Decreased intense precipitationpotential in drought-prone regions events) Increased Asian • Increase in flood and drought summer monsoon magnitude and damages in precipitation temperate and tropical Asia variability (likely) • Increased risks to human life Increased intensity ofand health mid-latitude storms • Increased property and (little agreement infrastructure losses between current models) • Increased damage to coastal ecosystems 2.1.4 Recent progress for mitigating the projected future climate For mitigating the projected future climate change and influences, the UN Framework Convention on Climate Change (UNFCCC) has activated a negotiating process. The Convention now has 186 Parties and is approaching universal membership. 2.1.4.1 Brief history

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In 1992, the UN Conference on Environment and Development was held in Rio de Janeiro, Brazil, and Parties have continued to negotiate in order to agree on decisions and conclusions that will advance implementation in the Conference of the Parties (COP). The history of COP is shown in Figure 2.6.

Figure 2.6. The history of the Conference of the Parties (COP) In March/April 1995, Parties launched a new round of negotiations at COP-1 in Berlin. These negotiations resulted in the adoption of the Kyoto Protocol at COP-3 (Kyoto, December 1997). Major issues of the Kyoto Protocol are shown in Table 2.4.4 According to the Kyoto Protocol, six GHGs have been designated for reduction by the first commitment period (from 2008 to 2012), namely CO9, CH4, N9O, HFCs, PFCs and SF6. A major cause of global warming is CO2 emissions due to human activities, in particular fossil-fuel combustion. Table 2.5 gives world CO2 emissions in 1990 and 1998,

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estimated by CDIAC (Carbon Dioxide Information Analysis Center).5 The Kyoto Protocol, however, left many of its operational details unresolved and referred these to the COP and subsidiary bodies for further negotiation. Table 2.4 Major issues of the Kyoto Protocol4

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Table 2.5 CO2 emissions of the world and top 20 countries in 1990 and 19985 (Unit: 106 1990 t-C/year)

1998

World totala

6 096

6 608

Annex B countriesa

3 929

3 790

Non Annex B countriesa

2 167

2 818

Top 20United States 1 314 b countries of America

United States of1 487 America

USSR

1 011

China

848

China

655

Russian 392 Federation

Japan

292

Japan

309

India

184

India

290

Germany

225

Federal Republic Germany

of184

United Kingdom

155

United 148 Kingdom

Canada

117

Canada

171

128

Italy

109

Italy

113

France

98

Mexico

102

Poland

95

France

101

Former German Democratic Republic

83

Republic of 99 Korea

Mexico

83

Ukraine

97

South Africa

79

South Africa

94

Australia

73

Australia

90

Democratic People’s 67 Republic of Korea

Poland

88

Republic Korea

Brazil

82

66

Czechoslovakia58

Islamic Republic of79 Iran

Islamic Republic Iran

Saudi Arabia

77

Spain

67

Spain aEmissions

of

of58 58

from fossil fuel and international bankers.

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bEmissions

from fossil fuel (not including from international bankers). At COP-4 (Buenos Aires, November 1998), Parties adopted the so-called Buenos Aires Plan of Action, setting out a programme of work both to advance the implementation of the Convention and to flesh out the operational details of the Kyoto Protocol. This programme of work was conducted in the subsidiary bodies and at COP-5 (Bonn, October/November 1999), with the deadline at COP-6 (The Hague, November 2000). However, Parties were unable to reach agreement on a package of decisions on all issues under the Buenos Aires Plan of Action at that session. Nevertheless, they decided to meet again in a resumed session of COP-6 to try once more to resolve their differences. At COP-6 Part II (Bonn, July 2001), Parties finally succeeded in adopting the Bonn Agreements on the Implementation of the Buenos Aires Plan of Action, registering political agreement on key issues under the Buenos Aires Plan of Action. Parties also completed their work on a set of detailed decisions based on the Bonn Agreements, which were forwarded to COP-7 for formal adoption. Work remains outstanding on a small number of decisions, however, and these were referred to COP-7 for further negotiation. 2.1.4.2 Main issues of COP-7 in Marrakesh In November 2001, COP-7 was held in Marrakesh, and attended by 171 governments and a total of some 4 500 participants. Parties were expected to formally adopt the detailed decisions completed at COP-6 Part II, and also 173

to finalize those decisions where work remains outstanding. At this conference, the Marrakesh Accords6 were adopted, and many have expressed a wish for the Protocol to enter into force in 2002. Marrakesh has included decisions on Kyoto Protocol issues that would be recommended for adoption to the COP. The finalized Kyoto rulebook specifies how to measure emissions and reductions, the degree to which carbon dioxide absorbed by carbon sinks can be counted towards the Kyoto targets, how the joint implementation and emissions trading systems will work, and the rules for ensuring compliance with commitments. Table 2.66 shows the modalities and procedures for the Clean Development Mechanism (CDM). Symbolizing the transition now being made to an operational Kyoto regime, the conference also elected 15 members to the Executive Board of the Clean Development Mechanism. This will ensure a prompt start to the CDM, the mandate of which is to promote sustainable development by encouraging investments in projects in developing countries that reduce or avoid emissions. Developed countries will then receive credit against their Kyoto targets for emissions avoided by these projects. Table 2.6 Outline of modalities and procedures for CDM6 Introductory description

• It is the Host Party’s prerogative to confirm whether a project activity assists it in achieving sustainable development. 174

• Public funding for CDM projects from Parties in Annex 1 is not to result in the diversion of official development assistance, and is to be separate from and not counted towards the financial obligations of Parties included in Annex 1. • CDM project activities should lead to the transfer of environmentally safe and sound technology and know-how. • For facilitating the prompt start of CDP, COP elects the members of the Executive Board. • COP, serving as the Meeting of the Role of COP/Parties to the Kyoto Protocol (COP/ MOP andMOP), shall have authority over and Executive Board provide guidance to CDM. • The Executive Board shall supervise CDM, under the authority and guidance of the COP/MOP, and be fully accountable to the COP/MOP. • The participant is a Party to the Kyoto Protocol. Participation requirements

• The participant assigning amount.

establishes

its

• The participant has a national system for the estimation of anthropogenic

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emissions by sources anthropogenic removals by sinks. • The participant registry.

has

a

and

national

• The participant has annually submitted the most recent required inventory. • The participant submits supplementary information on assigned amount. • Parties included in Annex 1 are to refrain from using certified emission reductions generated from nuclear facilities to meet their commitments. • The eligibility of land use, land use change and forestry project activities is limited to afforestation and reforestation. Notice regarding• To develop and recommend to the project Conference of the Parties at COP-8, simplified modalities and procedures for the following small-scale clean development mechanism project activities are necessary: (i) renewable energy project activities with a maximum output capacity equivalent of up to 15 MW (or an appropriate equivalent); (ii) energy efficiency improvement project activities that 176

reduce energy consumption, on the supply and/or demand side, by up to the equivalent of 15 GWh/year; (iii) other project activities that both reduce anthropogenic emissions by sources and directly emit less than 15 kilotonnes of carbon dioxide equivalent annually Although some negotiations regarding detailed decisions have been postponed to COP-8 or the Meeting of the Parties to the Kyoto Protocol (COP/MOP), the Kyoto Protocol will enter into force and become legally binding after it has been ratified by at least 55 Parties to the Convention, including industrialized countries representing at least 55 % of the total 1990 carbon dioxide emissions from this group. So far, 40 countries have ratified it, and many governments have called for the entry into force to take place in 2002. The meeting also adopted the Marrakesh Ministerial Declaration (Table 2.76) as input for the 10th anniversary of the Convention’s adoption and the ‘Rio+10’World Summit for Sustainable Development (Johannesburg, August–September 2002). The Declaration emphasizes the contribution that action on climate change can make to sustainable development and calls for capacity building, technology innovation and co-operation with the biodiversity and desertification conventions. Table 2.7 The Marrakesh Ministerial Declaration (Decision 1/CP.7)6 177

The Ministers and other Heads of Delegation present at the Seventh Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change, Mindful of the objective of the Convention, as set out in Article 2, Reaffirming that economic and social development and poverty eradication are the first and overriding priorities of the developing country Parties, Believing that addressing the many challenges of climate change will make a contribution to achieving sustainable development, Recognizing that the World Summit on Sustainable Development provides an important opportunity for addressing the linkages between climate change and sustainable development, Note the decisions adopted by the Seventh Session of the Conference of the Parties in Marrakesh, 1. constituting the Marrakesh Accords, that pave the way for the timely entry into force of the Kyoto Protocol; Remain deeply concerned that all countries, particularly developing countries, including the least 2. developed countries and small island States, face increased risk of negative impacts of climate change; 3.

Recognize that, in this context, the problems of poverty, land degradation, access to water and food,

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and human health remain at the centre of global attention; therefore, the synergies between the United Nations Framework Convention on Climate Change, the Convention on Biological Diversity, and the United Nations Convention to Combat Desertification in those Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa, should continue to be explored through various channels, in order to achieve sustainable development; Stress the importance of capacity-building, as well as of developing and disseminating innovative technologies in respect of key sectors of development, particularly energy, and of investment 4. in this regard, including through private sector involvement, market-oriented approaches, as well as supportive public policies and international co-operation; Emphasize that climate change and its adverse impacts have to be addressed through co-operation 5. at all levels, and welcome the efforts of all Parties to implement the Convention; Request the President of the Conference of the Parties at its Seventh Session and the Executive Secretary of the United Nations Framework Convention on Climate Change to continue to 6. participate actively in the preparatory process for the World Summit, and in the Summit itself, and to report thereon to the Conference of the Parties at its Eighth Session.

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2.2 Regional and Local Environmental Issues 2.2.1 Acid rain Acid rain is caused by high concentrations of substances such as sulfur dioxide (SO2) and nitrogen oxides (NOx), which form acids by reaction with water in the atmosphere. Acid rain is a major regional issue because the substances can move beyond boundaries. In Europe and the northern part of America, the major sources of SO2 are located in other countries. The main sources of SO2 and NOx are fossil-fired power generation plants and internal combustion engines. Acid rain influences the ecosystems of lakes and marshes, degrades forests, and deteriorates historic stone buildings and monuments. 2.2.2 Desertification and land degradation 2.2.2.1 Comprehensive description of desertification and land degradation Desertification is the degradation of land in arid, semi-arid and dry sub-humid areas. It is caused primarily by human activities and climatic variations. Desertification does not refer to the expansion of existing deserts. It occurs because dryland ecosystems, which cover over one-third of the world’s land area, are extremely vulnerable to overexploitation and inappropriate land use. Poverty, political instability, deforestation, overgrazing and bad irrigation practices can all undermine the productivity of land. Desertification and land degradation were defined at the United Nations Conference on Environment and

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Development (UNCED) in 1992 and in the Convention to Combat Desertification (CCD) in 1994 as follows: Desertification is land degradation in arid, semi-arid and dry sub-humid areas resulting from various factors, including climate variations and human activities. Land degradation means reduction or loss in arid, semi-arid and dry sub-humid areas, of the biological or economic productivity and complexity of rainfed cropland, irrigated cropland, or range, pasture, forest and woodlands resulting from land uses or from a process or combination of processes, including processes arising from human activities and habitation patterns, such as: soil erosion caused by wind and/or water; deterioration of the physical, chemical and biological or economic properties of soil; and long-term loss of natural vegetation.

Desertification reduces the land’s resilience to natural climate variability. Soil, vegetation, freshwater supplies and other dryland resources tend to be resilient. They can eventually recover from climatic disturbances, such as drought, and even from human-induced impacts, such as overgrazing. When land is degraded, however, this resilience is greatly weakened. This has both physical and socio-economic consequences. According to Kassas et al.,7 the consequences of desertification and land degradation are categorized into three levels: on-site, off-site and global. • On-site impact • Flora: changes in structure of species or population, decrease in biodiversity, loss of habitat, reduction of primary productivity, etc. 181

• Fauna: decrease in population of wild animals, including soil fauna, biodiversity, habitat, and degradation of livestock, etc. • Ground surface: soil erosion, loss of organic matter, salinization, crusting, etc. • Off-site impact • Soil deposition on downstream sites of productive lands, roads, railways and water reservoirs. • Influence on the health of livestock and people by dust or loss of other productive farmlands by salinized surface soils carried by wind. • Global impact • Reduction in global food productivity by loss of productive land resources. • Economic instability. • Political unrest. • Global climate change. • Water, air and soil pollution. • Loss of biodiversity. Desertification is caused by climate variability and human activities. In the past, drylands recovered easily following long droughts and dry periods. Under modern conditions, however, they tend to lose their biological and economic productivity quickly unless they are sustainably managed. Today, drylands on every continent are being degraded by overcultivation, overgrazing, deforestation and poor irrigation practices.

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Such overexploitation is generally caused by economic and social pressure, ignorance, war and drought. While drought is often associated with land degradation, it is a natural phenomenon that occurs when rainfall is significantly below normal recorded levels for a long period of time. The people themselves begin to suffer the influences of desertification when food and water supplies become threatened. Then, they endure famine, mass migration and colossal economic losses. Over 250 million people are directly affected by desertification, and some one billion are at risk. 2.2.2.2 Towards combating desertification: the role of science and technology Combating desertification is essential to ensuring the long-term productivity of inhabited drylands. Unfortunately, past efforts at combating desertification have too often failed, and around the world the problem of land degradation continues to worsen. Recognizing the need for a fresh approach, 179 governments have joined the UNCCD as of March 2002. The UNCCD aims to promote effective action through innovative local programmes and supportive international partnerships, and will be implemented through action programmes. These programmes represent the core of the UNCCD. At the national level, they will address the underlying causes of desertification and drought, and identify measures to prevent and reverse it. Success in combating desertification will require an improved understanding of its causes and impacts. That is, science and technology are vital tools in the fight

183

against desertification. The UNCCD has established a Committee on Science and Technology. Composed of government representatives, the Committee will advise the Conference of the Parties to the Convention (COP) on scientific and technological matters relevant to desertification and drought. In addition, ad hoc panels of government-nominated experts will provide information and advice on specific issues. The UNCCD promotes international co-operation in scientific research and observation. The Parties to the Convention agree to integrate and co-ordinate the collection, analysis and exchange of scientific data and information. They will also ensure the systematic observation of land degradation in an effort to better understand and assess the processes and effects of drought and desertification. The UNCCD stresses the need to co-ordinate such efforts with other related Conventions, in particular those dealing with climate change and biological diversity. There is still much to learn about the linkages between desertification and climate, soils, water, plants, animals and, in particular, people. Key research areas include climatology and meteorology, soil sciences, hydrology, botany, zoology, ecology, and the social sciences. Action programmes for combating desertification will outline the research priorities for particular regions and subregions, reflecting local conditions. New technologies and know-how should be developed, transferred to affected countries, and adapted to local circumstances. Modern communications, satellite imagery and genetic engineering are only some

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examples of modern tools that can help to combat desertification. Better weather forecasts and alerts can help to maintain or increase the land’s productivity while improving food security and local living conditions. So too can new plant and animal varieties that are resistant to pests, diseases and other dryland stresses. Photovoltaic cells and wind energy may reduce the consumption of scarce fuelwood, and thus deforestation. For all these reasons, the Convention commits Parties to promoting technological co-operation. It calls for promoting and financing the transfer, acquisition, adaptation and development of technologies that help to combat desertification or cope with its effects. These technologies should also be environmentally sound, economically viable and socially acceptable. Affected developing countries need more scientific and technological capacity. They often suffer from a scarcity of domestic skills, expertise, libraries and research centres. Many also need improved hydrological and meteorological services. The UNCCD encourages developed countries to support capacity-building efforts that will enable developing countries to combat desertification more effectively through science and technology. The UNCCD is opening an important new phase in the battle against desertification, though it is just a beginning. In particular, governments are regularly reviewing the action programmes. They also focus on awareness-raising, education and training, in both developing and developed countries. Desertification can only be reversed through profound changes in local and

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international behaviour. Step by step, these changes will ultimately lead to sustainable land use and food security for a growing world population. Combating desertification, then, is really just part of a much broader objective: the sustainable development of countries affected by drought and desertification. 2.2.3 Biodiversity and natural systems Currently 1,7 million species on the Earth have been actually described8 and it is estimated that 5–10 million species of plants and animals exist on the Earth. The global ecosystem is maintained by this biological diversity. Though extinction and evolution have occurred naturally and continuously since living organisms came into existence, the extinction of global biological resources is now occurring rapidly due to human activities. For example, tropical rainforests in Africa, South America and South East Asia are particularly suffering in this regard. From the perspective of regional impact, the IPCC Third Assessment Report3 shows that the vulnerability of human populations and natural systems to climate change differs substantially across regions, and across populations within regions. Regional differences in baseline climate and expected climate change give rise to different exposures to climate stimuli across regions. The natural and social systems of different regions have varied characteristics, resources and institutions, and are subject to varied pressures that give rise to differences in sensitivity and adaptive capacity. From these differences emerge different key concerns for each of the major

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regions of the world. Even within regions, however, impacts, adaptive capacity and vulnerability will vary. For example, Africa is highly vulnerable to climate change. Impacts of particular concern to Africa are related to water resources, food production, human health, desertification and coastal zones, especially in relation to extreme events. And irreversible loss of biodiversity could be accelerated with climate change. Figure 2.7 shows selected key impacts due to climate change in Africa. Climate change is expected to lead to drastic shifts of biodiversity-rich biomes such as the Succulent Karoo in South Africa, and the loss of many species in other biomes. Alterations in the frequency, intensity and extent of vegetation fires and habitat modification from land use change may negate natural adaptive processes and lead to extinctions. Changes in ecosystems will affect water supply, fuelwood and other services.

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Figure 2.7 Examples of the key impacts for Africa3 Alteration of spatial and temporal patterns in temperature, rainfall, solar radiation and winds due to climate change will exacerbate desertification. Desertification is a critical threat to sustainable resource management in arid, semi-arid and dry subhumid regions of Africa, undermining food and water security. In Table 2.8, the vulnerability to the impacts of climate change of selected subregions in Asia is shown. Climate change will impose significant stress on resources throughout the Asian region. Asia has more than 60 % of the world’s population; natural resources are already under stress, and the resilience of most sectors in Asia to climate change is poor. Many countries are socio-economically dependent on natural resources such 188

as water, forests, grassland and rangeland, and fisheries. The magnitude of changes in climate variables would differ significantly across Asian subregions and countries. Table 2.8 The vulnerability to impacts for selected subregions in Asia3

***** very high (95 % or greater); **** high (61–95 %); *** medium (33–67 %); ** low (5–33 %); * very low (5 % or less) Climate change would exacerbate current threats to biodiversity resulting from land use/cover change and population pressure in Asia. Many species and large populations of many other species in Asia are likely to be exterminated as a result of the synergistic effects of climate change and habitat fragmentation. In desert

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ecosystems, increased frequency of droughts may result in a decline in local forage around oases, causing mass mortality among local fauna and threatening their existence. Permafrost degradation resulting from global warming would increase the vulnerability of many climate-dependent sectors affecting the economy in boreal Asia. Pronounced warming in high latitudes of the Northern Hemisphere could lead to thinning or disappearance of permafrost in locations where it now exists. Large-scale shrinkage of the permafrost region in boreal Asia is likely. Poleward movement of the southern boundary of the sporadic zone also is likely in Mongolia and north-east China. The boundary between continuous and discontinuous (intermittent or seasonal) permafrost areas on the Tibetan Plateau is likely to shift towards the centre of the plateau along the eastern and western margins. The frequency of forest fires is expected to increase in boreal Asia. Warmer surface air temperatures, particularly during summer, may create favourable conditions for thunderstorms and associated lightning, which could trigger forest fires in boreal forests more frequently Forest fires are expected to occur more often in northern parts of boreal Asia as a result of global warming. 2.3 Expected Impacts and Approaches for VLS-PV There are many environmental issues that should be solved and be improved for the future, most of which have been caused by human activities, in particular,

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global warming is one of the most important issues because it causes a large variety of impacts in various ways, and a major cause of global warming is the emission of CO2 due to fossil-fuel combustion. CO2 emission from developing countries, especially in Asia, is rapidly increasing with economic growth. Desertification is also one of the most important environmental issues, especially when thinking about VLS-PV. Desertification is primarily a problem of sustainable development. It is a matter of addressing poverty and human well-being, as well as preserving the environment. Social and economic issues, including food security, migration and political stability, are closely linked to land degradation, as are such environmental issues as climate change, biological diversity and freshwater supply. VLS-PV may have a variety of environmental impacts, which can contribute to various kinds of environmental issues in the future, directly and indirectly. For example, since VLS-PV supplies electric power without fossil-fuel combustion, it will be possible to reduce CO2 emissions greatly if VLS-PV replaces conventional fossil-fuel power plants. The emission of SO2 and NOx will also be reduced. Further, while the unsustainable use of fuelwood and charcoal is a major cause of land degradation, installation of VLS-PV in a desert area can be a new energy source in place of fuelwood. On the other hand, VLS-PV will reduce direct sunshine on to the land surface. However, at present, it is unclear if VLS-PV that covers the land surface will be useful for preventing desertification and land degradation. Because such impacts will differ according to the site where

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VLS-PV is introduced, a precise evaluation of microclimatic changes around the area of VLS-PV will be needed. VLS-PV will be an international co-operative project. As a scheme of international projects between developing and developed countries for mitigating global warming, which influences regional, local and cross-sectional aspects such as biodiversity, a Clean Development Mechanism (CDM) has been proposed in the Kyoto Protocol. That is, VLS-PV has the possibility to be adopted as a CDM project. The modalities and procedures for CDM have been stated in the Marrakesh Accord established at COP-7. In addition, it has also been suggested at COP-7 that these be simplified for small-scale projects, meaning project activities with a maximum output capacity equivalent to up to 15 MW, although a detailed description was not decided at that meeting. The early stage of VLS-PV development may be adopted as a small-scale CDM project, because VLS-PV has a huge generating power capacity and it will be more feasible to enhance the capacity gradually. If some projects involving environmentally safe and sound technology are proposed, we should pay attention not only to the operation but also to the entire life-cycle, including production and transportation of components and incidental facilities, construction and decommissioning. For this purpose, ‘Life-Cycle Assessment (LCA)’ is a useful approach and is becoming a general method of evaluating various technologies.

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Although a precise environmental assessment should be carried out when VLS-PV is released, a preliminary LCA study on CO2 emissions of VLS-PV has already been reported9 and a large potential for help in reducing CO2 emission was noted. Besides the contribution to reducing emissions of gases such as CO2, projects for developing and introducing new technologies, such as CDM, must accompany the sustainable social and economic development of the region. VLS-PV will be one of the promising technologies for solving environmental problems. To show the contributions and impacts of VLS-PV, in Part II VLS-PV case studies will be carried out and some indicators on impacts will be discussed quantitatively. In Part III, scenario studies on sustainable growth and possible approaches for VLS-PV, including financial options, will be carried out. References 1 The Intergovernmental Panel on Climate Change (IPCC), Climate Change 2001: The Scientific Bases, Cambridge University Press, 2001. 2 The Intergovernmental Panel on Climate Change (IPCC), Emission Scenarios, Special Report of IPCC Working Group III, 2000. 3 The Intergovernmental Panel on Climate Change (IPCC), Climate Change 2001: Impacts, Adaptation, and Vulnerability, Cambridge University Press, 2001.

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4 United Nations Framework Convention on Climate Change (UNFCCC), Kyoto Protocol. 5 CDIAC (Carbon Dioxide Information Analysis Center), A Compendium of Data on Global Change, http://cdiac.esd.ornl.gov 6 United Nations Framework Convention on Climate Change (UNFCCC), Marrakesh Accords. 7 M. Kassas, Y. J. Ahmad and B. Rozanov, ‘Desertification and drought: an ecological and economic analysis’, Desertification Control Bulletin, No. 20, 1991. 8 World Conservation Monitoring Center, Global Biodiversity: Status of the Earth’s Living Resources, Chapman & Hall, London, 1992. 9 IEA PVPS Task VI/Subtask 50, A Preliminary Analysis of Very Large-Scale Photovoltaic Power Generation (VLS-PV) Systems, IEA- PVPS VI-5 1999:1, 1999.

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Chapter Three An overview of photovoltaic technology

3.1 Basic Characteristics of Photovoltaic Technology It is believed that photovoltaic power generation systems (PV systems) are very effective for eliminating the greenhouse effect. In principle, features in the utilization of a PV system are summarized as follows. PV systems as solar energy utilization Since photovoltaics represents one kind of solar energy utilization, it has common features with other types of solar energy: • enormous total amount • inexhaustible, renewable energy • clean energy without emissions into the environment • usable anywhere on the Earth without extreme uneven distribution • deviating hour-by-hour and affected by the influence of climatic condition. PV systems as solid-state, static devices A PV system also has characteristics as a semiconductor device because solar cells are manufactured by using semiconductor technology:

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• simple, direct energy conversion device • lightweight enough for rooftop installation, aiming at effective land use • easy handling and maintenance-free system without rotating parts • free selection of system scale by modular building-up configuration • flexible, economic investment plan attainable through short-term construction. PV systems as decentralized energy systems Generally, it is said that PV systems are appropriate for decentralized power generation rather than a central power station: • on-site station free from transmission/ distribution loss and cost • no fuel transportation required for remote site • flexible facility construction plan to meet local demand • higher overall reliability obtainable because of small influence of individual system shut-down • possible improvement of distribution grid characteristics by using high-speed control of power conditioners • useful for energy resource diversification of a certain region. Since, by a simple calculation described later, a large amount of PV installation is obtainable by using unused land throughout the world, studies of VLS-PV should

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estimate whether it is feasible to ignore some of the advantages for decentralized systems. 3.2 Trends in Government Budget Relating to PV Programmes in Three Regions Figure 3.1 shows the rough transition of government budgets relating to PV programmes for both R&D and market stimulation in Japan, European countries and the USA.

Figure 3.1 Rough estimation of government budgets relating to PV programmes in three regions (Data source: Resources Total System Co. Ltd) The Japanese total budget has been increasing rapidly for the past several years because of the initiation of market promoting programmes. Besides these, roughly speaking, the R&D fund has been kept rather stable, and the project goal and structure have also been maintained quite consistent. In spite of the drop in 1996 seen on the graph, this was not an actual decrease on the basis of the Japanese yen, because it became remarkably high, 84

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JPY/USD, in 1995. Recent decreases observed in R&D for 1995-1997 were caused naturally in conjunction with the rapid takeoff of market introduction activities. As shown in the same figure, the European total budget, including EU, Germany, Italy, France and the Netherlands, is considered to have grown stably. However, the budget level of each country varied from time to time and showed larger fluctuations. It is believed that a future target towards 2010 has also been settled recently. It may be expected to grow to a much higher level including market stimulation activities. It seems that the US R&D budget has been at a similar level compared with both EU and Japan, although it was notably high during the 1970s and early 1980s. Since the US government settled the Million Roof project recently, it is also expected that US PV industries will grow rapidly 3.3 Trends in Solar-Cell Technology As a result of a long history of research and development regarding solar cells, there are a variety of types of solar cells, which can be classified generally as shown in Figure 3.2. Many industries, research institutes and universities have made efforts to improve the efficiency and increase the size of solar cells.

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Figure 3.2 A variety of solar cells 3.3.1 Crystalline silicon solar cells Crystalline silicon is the most popular material for making solar cells. As shown in Figure 3.3, the classic monocrystalline and more modern multicrystalline silicon wafer technologies have so far dominated the PV market. This illustration shows the number of different technologies that have contributed to the global market over the years in significant quantities. Despite a development phase and a market presence of over 20 years, the thin-film technology amorphous silicon (a-Si) has not been able to replace the crystalline silicon wafer

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cells. On the other hand, the ribbon technologies have captured market share only in the last six years.

Figure 3.3 The photovoltaic market family tree1 Tables 3.1 and 3.2 show recent trends in the efficiency of crystalline silicon solar cells. The efficiencies of monocrystalline silicon cells have already exceeded 20 %, and those of multicrystalline silicon cells have been close to 20 %. However, most of these are records realized in laboratories. Past experience has shown that progress in laboratory efficiency leads to corresponding improvement in production after a certain time delay.

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Table 3.1 Recent progress in monocrystalline silicon solar cells2

efficiency

of

a(ap)

aperture area; (t) total area; (da) designated illumination area. Source: Solar-cell efficiency tables (Version 1–19), Progress in Photovoltaics, etc.2

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Table 3.2 Recent progress in multicrystalline silicon solar cells2

efficiency

of

a(ap)

aperture area; (t) total area; (da) designated illumination area. Source:Solar-cell efficiency tables (Version 1–19), Progress in Photovoltaics, etc.2 Monocrystalline silicon is obtained by melting crystalline material and by allowing the silicon to grow slowly in contact with a seed crystal. As the silicon cools, it gradually solidifies as a single cylindrical ingot of crystalline silicon. The ingot is then sliced in circular wafers, which are processed to make the solar cells. On the other hand, multicrystalline silicon is produced by different methods than monocrystalline silicon. In the case of direct casting, molten silicon is poured into a mould and allowed to solidify to form an ingot. The sawed wafers have a rectangular or square shape and are processed into solar cells. Obviously these shapes improve the packing of solar cells into modules with

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respect to the round cells, and they are more economical to produce. Today, it is widely accepted that this technology will maintain its dominant position for longer than was believed a few years ago. However, a significant issue for the future is the source of highly purified silicon for solar cells. Some 50 % of the cost of a module is due to the cost of processed silicon wafers. The PV industry has in the past used reject materials from the semiconductor industry that were available at low cost. This created a dependence that is only viable if both sectors grow at the same rate. An additional problem is that the semiconductor market is characterized by violent cycles of boom and bust superimposed on a relatively steep growth curve. In boom times, the material supply becomes tight, and prices increase. This happened in 1998, when even reject materials were in short supply and some solar-cell manufacturers had to buy regular semiconductor-grade materials at relatively high costs. In order to decrease the impact of the feedstock price on module cost, it is obviously necessary to reduce the feedstock consumption per peak watt. This can be achieved by reducing silicon wafer thickness, as well as by increasing efficiency. Concerning these points, Fraunhofer ISE has created a roadmap as shown in Figure 3.4. Further, the typical feedstock consumption in the wafer-making process is shown in Figure 3.5. The thickness of the commercial silicon wafers ranges between 300 and 400 um.

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However, reducing the thickness of silicon wafers provides an opportunity to remove the feedstock limitation threat from the main workhorse of PV power generation.

Figure 3.4 The Fraunhofer ISE crystalline silicon solar-cell roadmap1

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Figure 3.5 Different scenarios for the feedstock contribution to module cost based on a 10 cm × 10 cm × 10 cm model crystal1 The present technology for crystalline silicon solar cells is relatively mature, but several studies have shown that it still has a large cost reduction potential, and the road is wide open for further progress. 3.3.2 Thin-film solar cells Thin-film solar-cell technologies offer an attractive alternative to industry-standard crystalline silicon solar cells because of: • use of relatively small amount of semiconductor material • high potential for automated manufacturing • aesthetic outlook • cost-effective series connection of cells by laser scribing (monolithic integration) • possibility for lightweight and unbreakable panels and for roll-to-roll production processes • short energy payback time • lower temperature coefficient • better performance with diffuse light • greater economic possibility for making ‘low-power’ panels. Until now, commercially available thin-film (amorphous silicon) solar panels have offered lower price (per W) ratios than do crystalline silicon panels, especially for ‘low-power’ (less than 70 W) panels. However,

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crystalline silicon panels offer higher conversion efficiencies. This has resulted in the market domination of amorphous silicon panels for the application of solar home systems in developing countries. In the grid-connected market, where the balance of system costs and area costs have more impact and, consequently, high power and high efficiency are more important, crystalline silicon panels still dominate the market. 3.3.2.1 Thin-film solar panel concepts The required decrease in cost per unit of electricity (USD/W, USD/kWh or USD/Ah) may more easily be obtained by thin-film solar panels; such panels only use a few microns of active material, which is deposited, in low-pressure equipment, on a substrate of glass, metal, or plastic. Manufacturing processes for thin-film solar panels can more easily be automated and series connection of cells is achieved by a laser scribing process (monolithic integration). Moreover, the energy costs for producing thin-film solar panels are substantially lower than is the case with crystalline silicon. For protecting the thin layers of active material against environmental influences, the substrate with the deposited thin-film solar cells is covered by a second glass plate or by a suitable foil or coating. Thin-film solar cells are mostly built in a superstrate concept (Figure 3.6), where the incoming light enters the cell through the carrier of the cell, mostly glass.

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Figure 3.6 Production process of superstrate cell When a non-transparent carrier – such as metal, plastic, or glass coated with a non-transparent material – is used, the solar cell is built with a substrate concept (Figure 3.7); in this case, the incoming light enters the cell via the side opposite from the non-transparent carrier.

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Figure 3.7 Production process of substrate cell 3.3.2.2 Silicon-based thin-film solar cells Thin-film silicon solar cells are considered by many parties in the world to have the best potential for meeting the cost targets of the market. This has resulted in a broad range of research activities, characterized by

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numerous methods to deposit the active silicon layer and by numerous processes to realize a solar cell in these layers. The general aim of all thin-film silicon solar-cell research is to achieve cost reduction by diminishing the amount of high-purity active silicon material used in the solar cell. When combining this with the cost goals in the longer term (80 %) of the workforce is local. • A training period of 20 days preceding installation commencement. • Site level to better than 1 in 50 grade. • Availability of on-site grid electric power to commence installation (or, alternatively, a small PV plant). • Availability on-site of two mobile cranes with 5 tonnes at 10 m capacity for installation (to be disposed of at a 50 % price markdown at the termination of the project).

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• Availability on-site of four forklifts with 3 tonnes at 3 m for installation (three of which are to be disposed of at a 50 % price markdown at the termination of the project). • Availability on-site of two portable elevated platforms with extended heights of 25 m. 10.5.2 Workforce costs To achieve an installation of 320 CPV units in one year will require the continuous efforts of a dedicated and well-trained workforce operating in teams, working in parallel, fully supported by effectively crewed materials handling equipment, and supplied with all installation items on schedule. The specific requirements are as follows: • One site manager and chief engineer (60 000 USD). • One assistant site manager, human resources (40 000 USD). • One assistant site manager, logistics (40 000 USD). • One assistant site manager, engineering (40 000 USD). • Two site electricians (25 000 USD each). • Two mobile crane operators (25 000 USD each). • Four crane dogmen/riggers (15 000 USD each). • Four forklift truck operators (20 000 USD each). • Six crew leaders, installation (30 000 USD each). • Twenty-four installers (four per crew leader to form an installation team: 25 000 USD each). 598

• One concrete foreman (30 000 USD). • Twenty concrete workers including reinforcement fixers (15 000 USD each).

10.5.3 Cost of material-handling equipment • Elevated platforms (two units, 25 m) = 40 000 USD. • Forklifts (four units, 3 tonnes) = 280 000 USD. • Mobile cranes (two units, 5 tonnes at 9 m) = 500 000 USD. • Cost recovery from sale of two cranes and three forklifts at 50 % = −355 000 USD.

10.5.4 Cost of site preparation The site is assumed to be level. It is fenced by 6 km of fence 2,4 m high with three strands of barbed wire on top and two sets of gates 6 m wide for entry (170 000 USD). The plant has eight north–south rows, each with 40 CPV units. The rows are 56 m apart and the units are at 56 m spacing, occupying a total land area of approximately 1 km2. There are eight access roads, each 2,24 km long, which align with the rows of CPV units, and two end roads, each 448 m long, which connect the ends of the 599

row roads, forming a rectangle with the outermost row roads (Figure 10.12). The total length of array access roadways is 18,8 km and is of 200 mm consolidated cement-stabilized roadbase with hotmix seal (960 000 USD). Power and communication cables are buried in trenches adjacent to the row roads (160 000 USD). Insulated cooling pipework connected to a central heat recovery unit (not included in the cost estimate) is on above-ground posts along each row. In addition to the CPV units, there is a plant storage shed, 5 m high × 30 m long × 15 m wide, with a load-carrying concrete floor (49 000 USD), and a 10 m × 10 m control room, fully serviced with electricity, water and toilet facilities (30 000 USD).

10.5.5 Cost of materials for the CPV units A concentrating collector is configured as a mirrored concave steel shell mounted to rotate about a horizontal axis on a fabricated steel base that rotates on a vertical axis at the centre of a concrete foundation. The forces that are required for this two-axis tracking are supplied by electrohydraulic actuators and controlled by on-board electronic elements and position sensors. The power-producing module of PV cells is mounted near the focus of the concave mirror and intercepts the uniformly distributed concentrated radiation at the exit of a flux receiver. Coolant fluid is pumped from the access road to a rotary joint at the centre of each CPV unit foundation,

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up the receiver mount, into the flux receiver walls and the PV module, and back down again, and thence, preferably, to a remote heat recovery unit. The materials and estimated costs can be allocated to a number of clearly identifiable categories, as follows. Concentrator Foundations, base, dish reflector, actuators and hydraulics, controls and cables, and flux receiver mount:

PV generator Flux receiver, PV cell module, cooling system, and piping:

Inverter Electric output equipment:

cables

and

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power

conditioning

10.5.6 Total plant cost estimate Depending upon the future evolution of inverter technology, all of the items enumerated above sum to as little as 96 010 USD/CPV unit, which is slightly more than 1 USD/W. Of this total, 85 500 USD/CPV unit represents the FOB costs for the components, and 10 510 USD/CPV represents the cost of installation. It is also important to note that, of the 85 500 USD/CPV total component costs, the inverter represents 37 %. (This figure could perhaps amount to 46 %, if inverter costs were to be as high as 450 USD/kW, rather than our assumed cost of 300 USD/kW. This eventuality would raise the plant cost to 111 010 USD/CPV unit or 1,19 USD/W.) A related and important aspect of CPV costs is their relative insensitivity to the cost of the CPV cells themselves. We have assumed a cell cost of 500 USD/m2 for the above estimates. But even if we have erred by a whole order of magnitude (i.e. if the cell costs were to reach 5 000 USD/m2), this would only add an additional 0,048 USD/W to the cost of the system. 10.5.7 Additional costs

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There are a number of items that have not been taken into consideration in the above subsections, because they are much more difficult to quantify. They have to do with how the plant will be used (e.g. whether energy recovery from the cell cooling water will be practised and for what purpose), how far the plant is located from the point(s) of manufacture, and what kind of profit margins may be assumed for designers and contractors. The following estimates should therefore be regarded as being a possible rather than a probable scenario. They are offered in order to gain some insights into the extent to which the above, more concrete, cost total may have been seriously underestimated. First, substantial design work will be needed since several CPV components, of the kind required for the project under discussion, are not off-the-shelf items. If we allow 1 % for licensing the required plant design configuration, this would add another 960 USD/CPV unit (0,010 3 USD/W). Secondly, 15 % might be a reasonable project handling fee for the power engineering company that would undertake the project. This would add another 14 500 USD per CPV unit (0,155 7 USD/W). Finally, no shipping costs have been included. It is estimated that each CPV unit would require three shipping containers, and that the shared equipment would require six additional containers. Thus shipping would add 3,018 75 USD to each CPV unit as container costs. From our case study for the Gobi Desert (Chapter 8) it was indicated that a shipping container costs 1 MJPY. Such an estimate, if relevant to the present

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situation, would add approximately 25 000 USD to the cost of each CPV unit (0,267 7 USD/W), unless the containers could be rented, or else purchased and profitably disposed of at project termination. In such a situation, the additional cost would be less. We thus end with a grand total estimate (including container costs) of 136 500 USD per CPV unit (1,46 USD/W) for a 30 MW turnkey CPV project. 10.5.8 Cost of financing We have estimated that a 30 MW turnkey project would cost approximately 136 500 USD per CPV unit, and that in a typical meteorological year each unit would generate 154 000 kWh of A.C. electricity at Sede Boqer. If 30-year financing were then assumed, depending on the interest rate, the electricity would work out as follows: • 3 % interest: 0,045 USD/kWh • 6 % interest: 0,064 USD/kWh 10.5.9 The D.C. option In situations for which only D.C. power is required, there is, in principle, no need to convert the natural D.C. output of a PV plant (whether CPV or of conventional non-concentrator design) to A.C. Instead, a D.C.-to-D.C. converter would be employed in order to maximize the power that is extracted from the PV cells under their varying operating conditions. D.C.-to-D.C. converters and D.C.-to-A.C. inverters would probably entail comparable costs for electronic components. However, because the cells in a CPV 604

module are kept at a constant operating temperature, and their current output (whenever non-zero) is always close to maximum, there may be situations for which maximum power point tracking is unnecessary, i.e. for which the inverter can be dispensed with entirely. Since, as we have seen, the inverter represents a substantial part of the total cost of a CPV plant, its elimination would result in substantially reduced final electricity costs. 10.5.10 Operation and maintenance costs There are no data available about the operation and maintenance costs of this kind of CPV plant, because none has yet been built. However, such a plant would have several important features that are similar to those encountered in many of the large solar–thermal power plants that have been constructed.13 The most important among these are tracking motors that must be maintained, fluids that must be pumped, and mirrors that must be cleaned. On the other hand, the maintenance costs of a CPV receiver (which itself contains no moving parts) may be expected to be lower than those of a turbine in the corresponding solar–thermal plant. For solar–thermal power plants annual operation and maintenance costs are often estimated as being 1–2 % of the capital cost.14 If we take the upper figure as being relevant for CPV plants, then it would add 0,018 USD/ kWh to the above-listed electricity costs. 10.5.11 Cell degradation An important factor that must be taken into consideration in evaluating the economics of a PV plant is the rate of component degradation over the expected life of the 605

plant. From our studies on the degradation rates of conventional PV modules (Section 3.6), we concluded that an annual power decrease of the order of 1 % is to be expected, and this effect has been allowed for in our various case studies for non-concentrator PV plants. However, for CPV plants the situation is complex. On the one hand, there is no information on how well CPV modules will withstand the long-term effect of being exposed to 400 suns and of being cycled on and off with each passing cloud. However, paradoxically, a relatively short cell life may turn out to have little economic significance. In order to appreciate this fact, it is important to realize that the PV module is potentially not only a relatively low-cost component of the entire CPV system but it is also physically small (i.e. 1 m × 1 m) and, consequently, easy to replace. Moreover, the CPV energy simulation that has been presented in the present study represents the existing ‘first generation’ of CPV cells, with a nominal efficiency of 23 %. This figure may be expected to rise rapidly in the near future for two reasons. First, multi-junction CPV cells have already been demonstrated15 with efficiencies in excess of 30 %, and there is intensive research under way to increase this figure still further. Secondly, unlike the situation that exists for non-concentrator PV cells, there is no absolute need to develop methods for fabricating large areas of high-efficiency CPV cell material. (Although, such a

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development would obviously lead to a welcome lowering of module fabrication costs.) Therefore, it is not unreasonable to expect that, 30 years after the construction of the first pilot CPV plant (using 23 % efficient cells), newly available commercial cells would have reached 38 % efficiency. This would require an average technology improvement rate of 0,5 % in efficiency each year. In such a situation, we could think about periodically upgrading our CPV plants by replacing their cell modules – every five years, for example. With such a strategy, plant revenue losses due to a 1 % energy degradation for each year of module use would be completely wiped out by the end of the seventh year, by the 25,5 % efficient cells that had been introduced at the end of year 5. From then onward, the plant would have an annual output that was always greater than the design output and one, furthermore, that would continue to increase every five years (Figure 10.14). During the entire assumed 30-year plant life, the average cell efficiency would be 28,5 %. The plant would thus produce 24 % more energy over its life than it was designed to do at the start. Such a bonus would, clearly, more than compensate for the assumed 1 % cell degradation during each five years of module use. But the annual cell degradation might be greater than 1 %. If this turns out to be the case, it is easy to calculate that the annual average cell degradation rate would need to be as high as 8 % before our assumed modest 0,5 % rate of cell technology improvement would be counteracted. Clearly, for any cell degradation rate falling between 1

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% and 8 %, the energy output from the system over its 30-year lifetime would be greater than the design figure.

Figure 10.14 Effective average cell efficiency for modules that are replaced every five years, assuming an average cell efficiency improvement by 2,5 % at each change and average annual cell degradation rates between changes of respectively 1 % and 8 %, where the starting cell efficiency is 23 % For these reasons, we believe that the presently unknown factor of CPV cell degradation should not have a negative influence on the economics of a CPV plant.

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10.6 Discussion and Conclusions In this chapter we have made a comparative study of the expected performance of a number of different types of possible VLS-PV plants in the Middle East. For a representative Middle Eastern location, we selected the Negev Desert, which is sandwiched at the intersection of the very large Egyptian, Jordanian and Saudi Arabian deserts. The types of system we compared involved static PV modules (oriented facing south, with tilt angles equal to geographic latitude), one-axis tracking modules (having a horizontal axis in the north-south direction), two-axis tracking modules, and a 400×, point-focus concentrator PV system (CPV). Our computer simulations, which were based on the advertised specifications of available PV cells, of both the non-concentrating variety (Solarex) and the concentrating type (SunPower), employed a typical meteorological year dataset for the specific Sede Boqer site in the Negev. These simulations indicate that, in a typical Middle Eastern desert, 8,5 % total system efficiency is to be expected from a conventional static PV system, 10,7 % effective system efficiency* for a one-axis Sun-tracking system, and 11,8 % effective system efficiency* for a two-axis tracking system, where all three system types employ identical, polycrystalline Si PV modules. On the other hand, using a dense array of Si CPV cells in a 400-Sun point-focus system, the simulations indicate that 16,5 % total system efficiency (17,2 % effective system efficiency*) may be attainable if the cells are actively cooled so as to remain at a fixed temperature of 60 °C.

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Regarding stationary as opposed to sun-tracking modules, the simulations indicated that there could be a number of significant advantages of employing one-axis tracking. Specifically, the annual output (particularly in summer) is higher, the daily energy output has a more gentle midday maximum than that of a static system (i.e. there is more power available in the early morning and late afternoon, which is of particular value for a grid-connected system), and one-axis systems do not require any additional amount of land per kWh of delivered energy. On the other hand, two-axis tracking does not appear to be a very attractive alternative for VLS-PV plants. It is true that the output of such a system is always higher than that of a stationary or one-axis system. However, there is a substantial penalty in land area requirements per kWh (by a factor of almost 2), and the maintenance costs are likely to be significantly higher than those of either a static or one-axis tracking system. Regarding the prospects for a VLS-CPV plant, it was concluded that a single 1 m2 CPV module exposed to a light flux of 400 suns (where 1 sun is here defined as 1000 W/m2) would produce nearly 100 kW of electric power. Furthermore, in spite of the greater space that is taken by the two-axis trackers needed to illuminate such modules, it was concluded that, thanks to the higher cell efficiency, a large CPV system would only require approximately 34 % more land area per kWh delivered than a static non-concentrating PV system. Table 10.12 compares a number of area-related output parameters of interest for all four types of system.

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Table 10.12 Comparison of predicted area-related performance parameters for various VLS-PV plants at Sede Boqer

aSolarex

MSX64 modules.

bModified cRancho

SunPower Heda 303 cells.

Seco plant.

dHesperia

Lugo plant.

We turn now to the potential contribution that VLS-PV plants could make to an existing electricity grid, vis-à-vis the replacement of fossil-fuelled plants by those of a more environmentally benign form. Here, the results are naturally highly dependent on the kind of demand curve that the grid is designed to serve. It is therefore necessary to model the specific situation for which a VLS-PV plant is to be installed. We therefore took, as one example of a realistic situation, the 1996 demand curve for Israel. We found that six or seven VLS-PV plants each with a capacity of 1 GW could have met both the mid-summer and mid-winter noon demand curves. Furthermore, three of the sun-tracking systems that were studied (one-axis and two-axis non-concentrator, and

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two-axis CPV) were found capable of providing greater percentages of the daily energy demand than could the more ‘peaked’ static system. For example, a 7 GW VLS-CPV plant could have provided in excess of 30 % of the daily December 1996 electricity demand, and nearly 55 % of the June 1996 demand. All of the above results are as precise as may be expected from computer simulations. Moreover, for non-concentrator PV systems, there is a wealth of hardware and performance data available to validate them. On the other hand, for CPV systems, the experimental situation is sparse. At the present time only a small number of companies are capable of manufacturing CPV cells (at a comparatively large expense compared to mass-produced non-concentrator PV cells), there are no long-term performance data available, and no large units of the kind envisaged here (i.e. 1 m2 cell modules) have ever been built. Nevertheless, by making a number of not unreasonable, albeit questionable, assumptions, it was concluded that the economics of a VLS-CPV plant could turn out to be extremely attractive. Clearly, in such a situation, the questionable assumptions will require experimental validation. First, a question exists as to whether CPV cells can ultimately be mass-produced for approximately 500 USD/m2. Today’s, mass-produced, non-concentrator cells cost less than this figure, but small-production-line CPV cells cost several orders of magnitude more. It has been assumed here that, under conditions of mass-production, Si CPV cells can be almost as

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inexpensive as mass-produced non-concentrator Si cells. On the other hand, because the CPV module is a relatively small component in a much larger system, we have seen that even a cell cost as large as 5 000 USD/m2 could result in attractive CPV economics. Secondly, there is no experience concerning the stability of CPV cells. We know that non-concentrator PV modules degrade by approximately 1 % per year. However, CPV cells would be subjected to much harsher conditions, with the solar flux dropping from 400 suns to zero and back again each time a cloud obscured the solar disc. In such a situation, it might be necessary to replace the solar cells periodically. This would be technically easy because of the comparatively small module size; however, it would only be economically feasible if the efficiency of available CPV cells were to be higher each time the modules were replaced. Again, we have found reasons to believe that this is likely to be the case. A related question applies to the power conditioning system. The inverters of conventional PV systems never experience a zero-current situation (except at night). On the comparatively rare occasions that large power surges arise (e. g. on a cold winter day when the clouds part at noon and suddenly reveal full sun conditions), fuses prevent damage to the inverters but with a concomitant loss of power. In the case of CPV systems, it will be necessary to design large (100 kW) inverters that are capable of producing short pieces of pure sine-wave output each time the sun appears on cloudy days. It is therefore not clear whether our assumed 95 % represents

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realistic annual average inverter efficiency for CPV systems. There are also a host of questions related to the long-term reliability and operating costs of large 400 sun two-axis trackers. Is 92 % a realistic figure for soiling/ shading losses as indicated in Table 10.11, and should we expect tracking losses? These issues are being addressed by experiments that are currently under way Nevertheless, for all of these worrisome questions, there are also a number of causes for optimism. First, 23 % (STC) efficient CPV cells represent only today’s state-of-the-art technology. Current research efforts with heterojunction structures lead to expectations of future efficiencies in excess of 40 %.16 Thus, CPV units that start out with a 100 kW rating when first built might become upgraded to as much as 175 kW units during the course of their operational life. (A corollary of such a scenario is that the land requirements per kWh would soon become equal to and even less than those of a static system. ) Furthermore, it would be a comparatively easy retrofit to upgrade the power rating of a CPV system whenever higher-efficiency cells were to become available and economics were to suggest the desirability of an upgrade. This is a totally different situation from that which exists for conventional PV systems, in which the module cost is the principal component of the system cost, and replacing the PV modules would be tantamount to replacing the entire system.

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A second cause for optimism is that the economics discussed above have largely ignored the monetary value of the waste heat, which comes conveniently packaged, thanks to the active cooling system required by the CPV cells. Whether the reuse of this heat would provide significantly greater system profitability or merely offset the parasitic costs of operating the cooling pumps is for time to tell. However, the mere availability of large quantities of such thermal energy enhances the local value of a VLS-CPV system in a remote desert region. References 1 D. Faiman, D. Feuermann, P. Ibbetson, A. Zemel, A. Ianetz, A. Israeli, V. Liubansky and I. Seter, Data Processing for the Negev Radiation Survey: Fifth Year; Annual Report on the Sixth Year of Research, Part III – Typical Meteorological Year v 2.1, Israel Ministry of National Infrastructures Report RD-15–98, Jerusalem, March 1999. 2 J. M. Gordon and H. J. Wenger, ‘PVISRAEL: A user-friendly PC software package for predicting utility intertie photovoltaic system performance’, Solar World Congress, vol. 1, ed. M. E. Arden et al., Pergamon, Oxford, 1991, pp. 111–116. 3 D. Faiman, D. Feuermann, P. Ibbetson, A. Zemel, A. Ianetz, A. Israeli, V. Liubansky and I. Seter, Data Processing for the Negev Radiation Survey: Fifth Year; Annual Report on the Sixth Year of Research, Part III – Typical Meteorological Year v 2.1, Israel Ministry of National Infrastructures Report RD-15–98, Jerusalem, March 1999.

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4 D. Berman, D. Faiman, P. Ibbetson and H. Wenger, Preliminary Studies for a 200 kW Photovoltaic Power Plant at Kibbutz Samar, Israel Ministry of National Infrastructures Report RD-21–95, Jerusalem, January 1995. 5 J. M. Gordon and H. J. Wenger, ‘Central-station solar photovoltaic systems: field layout, tracker, and array geometry sensitivity studies’, Solar Energy, 1991, 46, 211–217. 6 R. Spencer and M. Anderson, ‘SMUDPV1 photovoltaic power plant construction and operating experience’, Proc. 17th IEEE PVSC, 1984, pp. 872–875. 7 R. E. Daniels, D. J. Rosen and B. Dilts, ‘Unique design features of the SMUDPV1 1 MWAC photovoltaic central station power plant’, Proc. 17th IEEE PVSC, 1984, pp. 1276–1281. 8 R. E. L. Tolbert and J. C. Arnett, ‘Design, installation and performance of Arco Solar photovoltaic power plants’, Proc. 17th IEEE PVSC, 1984, pp. 1149–1152. 9 SunPower, personal communication from W. P. Mulligan, July 1999. 10 K. Pearlmutter, M.Sc. Thesis, Ben-Gurion University of the Negev, July 2001. 11 D. Berman, D. Faiman and B. Farhi, ‘Sinusoidal spectral correction for high precision outdoor module characterization’, Solar Energy Materials & Solar Cells, 1999, 58, 253–264.

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12 R. J. Arnault, E. Berman, C. F Gay, R. E. L. Tolbert and J. W. Yerkes, ‘The ASI one-megawatt photovoltaic power plant’, Solar World Congress, ed. S. V. Szokolay, Pergamon, Oxford, 1985, p. 1624. 13 P. De Laquil III, D. Kearney, M. Geyer and R. Diver, ‘Solar-thermal electric technology’, Renewable Energy: Sources for Fuels and Electricity, eds T. B. Johansson et al., Island Press, Washington, DC, 1993, pp. 213–296. 14 A. Rabl, Active Solar Collectors and Their Applications, Oxford University Press, New York, 1985. 15 H. L. Cotal, D R. Lillington, J. H. Ermer, R. R. King, N. H. Karam, S. R. Kurtz, D. J. Friedman, J. M. Olson, J. S. Ward, A. Duda, K. A. Emery and T. Moriarty, ‘Triple-junction solar cell efficiencies above 32 %: the promise and challenges of their application in high-concentration-ratio PV systems’, Proc. 28th IEEE PVSC, 2000, pp. 955–960. 16 L. L. Kazmerski, ‘Photovoltaics R&D: a tour through the 21st century’, Proc. 16th European PV Solar Energy Conf., Glasgow, May 2000, vol. 1, eds H. Scheer et al., James & James (Science Publishers), London, 2000, pp. 3–9.

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Part III Scenario Studies and Recommendations In Parts I and II, it was suggested that VLS-PV systems would be an attractive energy source in the 21st century. However, the long-term sustainable operation of VLS-PV systems must be discussed in consideration of the local benefits to be brought about by the introduction and expansion of such systems. Then, a step-by-step enlargement of PV systems might be an effective way to prevent the financial, technological and environmental risks caused by rapid development of VLS-PV systems. In addition, it is expected that this activity will be continued with properly allotted efforts for further quantitative discussion and necessary evaluation of VLS-PV to improve our knowledge, to overcome its defects, and to establish an international network with other interested people. In Part III, based on the generalized understandings from Parts I and II, scenario studies are carried out and, as the conclusion, ‘Recommendations’ to stakeholders are described. In scenario studies, the concept of sustainable growth of VLS-PV is discussed, which includes both the long-term economic aspects and the life-cycle point of view, and a development scenario assuming actual stages is proposed. Further, financial and organizational sustainability on the proposed stage is discussed. Finally, to propose mid- and long-term scenario options that would enable the feasibility of VLS-PV, recommendations to stakeholders are given to gradually realize such a long-term target.

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Chapter Eleven Introduction: conclusions of Parts I and II

The scope of this study has been to examine and evaluate the potential of very large-scale photovoltaic power generation (VLS-PV) systems, which have a capacity ranging from several megawatts (MW) to gigawatts (GW), by identifying the key factors that enable VLS-PV system feasibility and clarifying the benefits of this system’s application to neighbouring regions. The potential contribution to protecting the global environment and to renewable energy utilization in the long term has also been discussed. Before proposing the mid- and long-term scenario options for making VLS-PV systems feasible, this chapter will describe the generalized understandings from Parts I and II. 11.1 Background and Concept of VLS-PV (Part I) In Part I, introductory information for the entire report was given. First of all, both global energy and environmental issues, including the potential of renewable energy sources and market trends in PV technology, were reviewed. Then general information on PV technology, such as trends in costs and solar cells/ systems, operation and maintenance experiences, a case study on added values of PV system for utilities, and world irradiation data, were summarized. In the last

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chapter of Part I, the concept of VLS-PV systems was introduced. 11.1.1 Energy and environmental issues The two oil crises of the 1970s made us aware that fossil fuels are exhaustible and triggered the development of alternative energy resources such as renewable energy. Nevertheless, most primary energy still depends on fossil fuels, and the current utilization of renewables is negligibly small except for hydropower. According to an IEA report, generally the total amount of fossil-fuel resources in the world will not exhaust the energy supply until 2030, although there are possibilities of a rapid increase in energy demand, geographical imbalance between supply and demand, and temporal and local supply problems. There is a forecast in this report that the world primary energy supply in 2030 will increase to around 1,5 times as much as that in 2000.In addition, energy demand in Asian countries will increase much more than in OECD countries. Even beyond 2030, rapid growth in developing countries may continue further, reflecting the economic gap between the developing and industrialized countries. In addition to the long-term world energy problem, global warming is another urgent issue because CO2 emissions are caused by combustion of fossil fuels. According to the IPCC (Intergovernmental Panel on Climate Change) Third Assessment Report, the global average surface temperature has increased by (0,6 ± 0,2) °C since the late 19th century. Also, the globally averaged surface temperature has been projected to increase by 1,4–5,8 °C between 1990 and 2100.The

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projected rate of warming is much greater than the observed changes during the 20th century, and is very likely to be without precedent at least during the last 10 000 years. To mitigate the projected future climate change and influences, the UN Framework Convention on Climate Change (UNFCCC) has activated a negotiating process. In COP-3 held in Kyoto in 1997, the Kyoto Protocol was adopted and six greenhouse gases (GHGs) have been designated for reduction by the first commitment period. However, as pointed out at Kyoto COP-3, simple economic optimization processes for world energy supply can no longer be accepted to overcome global warming. UNFCCC also emphasizes that any action on climate change can contribute to sustainable development and calls for capacity building, technology innovation and cooperation with biodiversity and desertification conventions. Desertification is the degradation of land and reduces the land’s resilience to natural climate variability. This has both physical and socio-economic consequences. Combating desertification is essential to ensuring the long-term productivity of inhabited drylands. Unfortunately, past efforts at combating desertification have too often failed, and around the world the problem of land degradation continues to worsen. New technologies and know-how should be developed, transferred to affected countries, and adapted to local circumstances. For example, photovoltaics and wind energy may reduce the consumption of scarce fuelwood and deforestation. These technologies, however, should also be environmentally sound, economically viable and socially acceptable.

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In consideration of future energy problems, basic conditions and tendencies may be summarized as follows: • World energy demands will rapidly expand towards the middle of this century due to world economic growth and population increase. • The sustainable prosperity of humans can no longer be maintained if global environmental issues are ignored. • The share of electrical energy is rising more and more as a secondary energy form. • Although the need for nuclear power will increase as a major option, difficulties in building new plants are getting more and more notable at the same time. • Thinking about the long lead-time for the development of energy technology, it is urgently necessary to seek new energy ideas applicable for the next generation. In order to solve global energy and environmental issues, renewable energy resources are considered to possess large potential as well as providing energy conservation, carbon-lean fuels and CO2 disposal/recovery. Among a variety of renewable energy technologies, photovoltaic (PV) technology is expected to play a key role in the middle of this century, as reported by Shell International Petroleum Co. and G8 Renewable Energy Task Force. The world PV market and PV systems installation have been growing rapidly for the past several years. Besides, PV industries in the USA, Europe 623

and Japan have recently established their long-term vision of the PV market. According to their vision, potential cumulative PV installations will represent hundreds of gigawatts in 2030. 11.1.2 Overview of PV technology and relative information 11.1.2.1 Technology trends PV technology has several specific features such as solar energy utilization technology, solid-state and static devices, and decentralized energy systems. The long history of R&D on solar cells has resulted in a variety of solar cells. Crystalline (single-crystalline, polycrystalline) silicon is the most popular material for making solar cells. In 2001, crystalline Si PV modules had approximately 80 % of the market share. However, mainly because of the lack of sufficient supply of suitable silicon material and because of the limited possibilities for further improvements in manufacturing costs for wafer-based silicon solar cells, much of the worldwide R&D effort is currently spent on the development of thin-film solar cells. The most popular thin-film technology today uses amorphous silicon as the absorber layer; low-cost manufacturing techniques have been designed and amorphous silicon solar panels are the most cost-effective in the market today. Multiple cell concepts, using a combination of amorphous silicon and microcrystalline silicon cells (micromorph concept), show interesting potentials for increasing solar-cell efficiencies at relatively low cost. Another group of thin-film silicon solar cells makes use of

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high-temperature deposition techniques and grow the silicon thin films on high-temperature resistant (mostly ceramic) substrates. Making use of lift-off and transfer techniques, silicon layers that have been grown on silicon substrates at high temperatures can be transferred to low-cost substrates and the original substrate can be reused. A different approach using silicon thin films for enhancing the efficiency of a silicon solar cell is the combination of crystalline silicon wafers with amorphous silicon cells (heterojunction cells). Compound thin-film solar cells using a material other than silicon (CIGS, CdTe) have demonstrated their high efficiency capability and offer a promising future for this type of thin-film solar cell. Dye-sensitized and organic solar cells have potential of low cost; today, the efficiencies are still and probably will remain low, and the lifetime of the cells is a major concern. For the longer term, all the cell concepts mentioned above have the potential to reach and even pass the 1 USD/W level. It can be expected that research activities on all concepts will be continued and that all concepts, at some time in the future, will be commercially available. The general trend for all design activities will be to improve the efficiency of the cell, the simplicity of the concept, the throughput and the yield of the production process, and the long-term reliability of the module. These are all major drivers towards lower cost per unit of electricity. 11.1.2.2 Experiences in operation and maintenance of large-scale PV systems

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According to the three SMUD projects, the operation and maintenance costs of large-scale PV systems seem to be low, less than 1 % of gross total project cost. The long-term reliability of solar cells and modules was discussed by reviewing long-term data on field exposure in four regions: Pacific Rim, USA, Europe and Negev Desert. In general, the performance degradation of a crystalline Si solar-cell module ranges between 0,4 and 2,0 %/year. In this report, performance degradation was classified at three levels: ‘typical’ (0,5 %/year), ‘severe’ (1,0 %/year), and ‘worst’ (1,5 %/year). 11.1.2.3 Cost trends Although PV is currently at a disadvantage because of its high cost, we believe it has the best long-term potential because it has the most desirable set of attributes and the greatest potential for radical reductions in cost. Costs for the entire system vary widely and depend on a variety of factors including system size, location, customer type, grid connection and technical specifications. The installation of PV systems for grid-connected applications is increasing year by year and the trends of PV system and module prices in some countries appear to be a continued downward trend. We need to accelerate that trend. One way to do that is to step up the scale of the typical PV plant. The largest plant has a capacity approaching 100 MW/year. It would take such a plant, running flat out, 100 years to produce enough equipment to match the power-generating capacity of one medium-sized combined-cycle gas turbine power plant. We believe there may be significant

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economies of scale to be reaped as we move up to 50–100 MW plants. Another path towards radically lower costs is technology step change. The technology in use today is based on crystalline silicon. This is an inherently material-intensive technology. It requires batch production methods, and is now relatively mature. The great hope for the future lies with thin-film technologies, which are much less material-intensive and more suited to continuous production processes. They offer the potential to shift on to a lower and steeper learning curve. However, we need to be a little cautious about predicting when thin-film technology will start to realize its commercial potential. Both of these routes – stepping up the scale, and backing the new technology – carry large risks, both technical and commercial. Taking bold steps will require a great deal of confidence in the rapid emergence of a mass market. 11.1.2.4 Added values of PV systems PV technology has unique characteristics different from conventional energy technologies, and additional values are hidden in PV systems besides their main function, which is, of course, power generation. Nowadays, many people are becoming aware of the additional benefits offered by PV systems. Unfortunately, this awareness does not contribute to the effective promotion of PV systems since current added values are not quantitative but qualitative. Thus research activities on quantitative analysis of this issue should be continued. There is a case study on added values of PV systems for SMUD. Utility benefits evaluated are as follows.

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• Energy: avoided marginal cost of system-wide energy production. • Capacity: avoided marginal cost of system-wide generation capacity. • Distribution: distribution capacity investment deferral. • Sub-transmission: sub-transmission capacity investment deferral. • Bulk transmission: transmission capacity investment deferral. • Losses: electrical loss reduction. • REPI: renewable energy production incentive. • Externalities: value of reduced fossil-fuel emissions. • Green pricing: voluntary monthly contributions from PV Pioneers. • Fuel price risk mitigation: value of reducing risk from uncertain gas price projections. • Service revenues (economic development): net service revenues from local PV manufacturing plant (result of economic development efforts). 11.1.3 Concept of VLS-PV Solar energy is low-density energy by nature. To utilize it on a large scale, a huge land area is necessary. However, one-third of the land surface of the Earth is covered with very dry deserts. High-level insolation and large spaces exist there. It is estimated that, if a very small part of these areas, say 4 %, was used for the installation of PV systems, the annual energy production would equal world energy consumption.

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A rough estimation was made to examine desert potential by assuming a 50 % space factor for installing PV modules on the desert surface as the first evaluation. The total electricity production becomes 1 942,3 × 103 TWh (= 6,992 × 1021 J = 1,67 × 105 Mtoe), which means a level almost 18 times as much as the world primary energy supply, 9 245 Mtoe (107,5 × 103 TWh = 3,871 × 1020 J) in 1995. These are quite hypothetical values, ignoring the presence of loads from near these deserts. However, at least these indicate high potentials as primary resources for developing districts located in such a solar-energy-rich region. Basic case studies were reported concerning regional energy supply by VLS-PV systems in desert areas, where solar energy is abundant. According to this report, the following scenario is suggested to reach a state of large-scale PV introduction. First, the bulk systems that have been installed individually at some places will be interconnected with each other by a power network, incorporating the regional electricity demand growth. Then, the district will become a large power source. This scenario is summarized by the following stages: 1. A stand-alone, bulk system is introduced to supply electricity for surrounding villages or anti-desertification facilities around deserts. 2. A remote, isolated network will germinate. Plural systems are connected by a regional grid. It contributes to load levelling and the improvement of power fluctuation. 3. The regional network will be connected to a primary transmission line. Generated energy can

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be supplied to a load centre and industrial zone. Total use combined with other power sources and storage become important for matching to the demand pattern and the improvement of the capacity factor of the transmission line. Furthermore, in the case of a south–north inter-tie, seasonal differences between demand and supply can be adjusted. An east-west tie can shift peak hours. 4. Finally a global network will be developed. Most of the energy consumed by human beings can be supplied by solar energy. A breakthrough in advanced energy transportation ideas will be expected in the long term, such as superconducting cable, FACTS (flexible A. C. transmission system), chemical media, etc. 11.2 Lessons Learned from VLS-PV Case Studies (Part II) In Part II, some case studies on VLS-PV systems for the selected regions were undertaken to employ the concepts of VLS-PV systems. First, introductory analyses on the generation costs of VLS-PV systems in world deserts were carried out. Secondly, energy payback time, CO2, emissions and generation costs regarding VLS-PV systems concerning the Gobi Desert in China were evaluated in detail from a life-cycle point of view. Next, by assuming the Sahara Desert as a practical site, a network concept for VLS-PV systems was discussed and an estimation of the socio-economic impact of technology transfer was analysed. Finally, fixed modules, one-axis tracking

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modules, two-axis tracking modules, and a concentration system assumed for the Negev Desert located in the Middle East were summarized as expected technologies for VLS-PV systems, using a simulation model. 11.2.1 Indicative electricity cost of VLS-PV To make a rough analysis of VLS-PV systems in desert areas and to investigate their economic feasibility, a preliminary case study was carried out, for each of the six major deserts of the world: • • • • • •

Gobi Desert in China Thar Desert in India Sahara Desert in Africa Negev Desert in Israel (the Middle East) Great Sandy Desert in Australia Sonoran Desert in Mexico.

It was assumed that a VLS-PV system having a 1 GW capacity, which is the aggregation often 100 MW PV systems with flat-plate fixed array structure, would be installed in each desert. Assuming that the power output from a VLS-PV system would be transmitted to a given load centre, construction of 110 kV transmission lines would be taken into account. Though the transmission lines depend upon distance from the load centre to the VLS-PV system, a distance of 100 km was employed for all deserts to avoid complicated evaluation in this study. To calculate the annual power generation of VLS-PV systems, cell temperature factors, load matching factors, efficiency deviation factors and inverter mismatch factors were 631

included in calculating the performance ratio (PR) for each installation site. The annual average in-plane irradiation was estimated from the annual global horizontal irradiation using a method for separating into direct and scattered radiation known as the Liu–Jordan model. Initial costs, consisting of system component costs, transportation costs of the system components, system construction costs, and annual operation and maintenance (O&M) costs, were calculated in order to estimate the generation costs of VLS-PV systems installed in the six world deserts. No land cost was taken into account in this study, and cost data in Japanese yen were converted to US dollars at the (recent) exchange rate of 120 JPY/USD. Based on estimates of the initial cost and the annual O&M cost, the total annual costs of 100 MW PV systems installed in the six deserts were calculated supposing an annual interest rate of 3 %, a salvage value rate of 10 %, a depreciation period of 30 years, and an annual property tax rate of 1,4 %. An annual overhead expense of 5 % of annual O&M costs was also taken into account. The lowest generation costs were estimated when the array tilt angle was 20° independent of PV module price, except for the case of the Gobi Desert, where a tilt angle of 30° had the cheapest generation cost. The generation costs at a PV module price of 1 USD/W, which ranges from 5,2 to 8,4 US cents/kWh, are roughly one-third as great as those at a PV module price of 4 USD/W. Figure 11.1 represents the best estimates of generation costs for

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each desert as a function of annual global horizontal irradiation. Except for the Negev Desert and the Great Sandy Desert, in which the generation costs are relatively higher because of high wages, the level of generation costs of a 100 MW PV system are roughly the same. Though the generation costs decrease slightly with increase in annual irradiation, even the generation cost for the Gobi Desert, which has much less annual irradiation than the Sahara Desert, is on a level with that of the Sahara. Electricity from VLS-PV systems in these deserts would not be so cheap when the PV module price is expensive (such as at 4 USD/W), but the cost of the electricity will become economic even with the proven system technologies employed in this study when the PV module price is reduced to a level of 1 USD/W. The current market price of PV modules is not low enough for the realization of VLS-PV systems, but it is expected that the PV module prices will decrease rapidly with the growth of the PV market. Therefore, VLS-PV systems in desert areas will be economically feasible in the near future.

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Figure 11.1 Best estimates of generation cost for each desert as a function of annual global horizontal irradiation 11.2.2 Energy payback time and CO2 emission from VLS-PV Introduction of VLS-PV systems in desert areas seems to be attractive from an economic point of view when PV modules are produced at a low price level, even though existing PV system technology is adopted. However, we must pay attention not only to economic aspects but also to energy and environmental aspects, since PV systems consume a lot of energy at their production stage and therefore emit carbon dioxide (CO2 ) indirectly as a result. Therefore, the feasibility of a 100 MW VLS-PV system installed in the Gobi Desert in China was evaluated in depth from a life-cycle viewpoint by life-cycle analysis (LCA).

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Figure 11.2 represents the results of total primary energy requirement and energy payback time (EPT). EPT was estimated assuming electricity from the PV system would replace utility power in China where recent conversion efficiency is around 33 %. This suggests that the total energy requirement throughout the life-cycle of the PV system, considering production and transportation of system components, system construction, operation and maintenance, can be recovered in a short period much less than its lifetime. Therefore VLS-PV systems are useful for energy resource savings. Figure 11.3 shows the results of life-cycle CO2 emissions and life-cycle CO2 emission rate of the 100 MW PV system, assuming 30-year operation periods. In terms of the CO2 emission rate of existing coal-fired power plants (about 300 g-C/kWh), the life-cycle CO2 emission rate of a 100 MW PV system is much lower. So VLS-PV systems in desert areas are a very effective energy technology for protecting against global warming.

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Figure 11.2 Total primary energy (TPE) requirement and EPT of a 100 MW PV system

Figure 11.3 Life-cycle CO2 emissions and life-cycle CO2 emission rate of a 100 MW PV system 11.2.3 Network concept and socio-economic effects of VLS-PV It is necessary to build a concept for supplying the electricity that VLS-PV generates, and the supply of such electricity may contribute to regional development. Additionally, VLS-PV may induce some economic impacts, such as an employment effect. A network concept for introducing VLS-PV in the Sahara Desert and the expected socio-economic impact of the technology transfer of PV module fabrication were discussed. A transmission system devoted to the exploitation of remote energy resources has to be designed to minimize 636

transmission costs, while respecting reliability and environmental requirements. Transmission costs depend on the transmission distances and the hours of yearly utilization. From these viewpoints, the transmission costs were analysed for three cases: • 1,5 GW centralized PV power plant plus 300–900 km of line • 1,5 GW produced by 30 PV plants each of 50 MW • 1,5 GW produced by 300 PV plants each of 5 MW. The third case produced the most attractive results. Each of these plants should cover an area of approximately 10 ha (0,1 km2), and the power would be typically delivered through single A. C. MV lines (for example, 20 kV). In this case, the PV plants would be distributed within the coastal strip of North African countries, placed less than 10 km from the HV/MV substations and the distribution networks that feed the loads. When assuming 5 km as a transmission distance, the transmission cost would be in the range from 3,7 to 6,2 USD/MWh, depending upon yearly utilization of VLS-PV, as shown in Figure 11.4.

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Figure 11.4 Case of small PV systems together with a network Additionally, having a variety of technology transfers is very important for the sustainable expansion of VLS-PV, and the transfer of PV manufacturing facilities may bring about the stimulation of various economic activities as well as the establishment of a local PV industry. To grasp such impacts quantitatively, a technical analysis of an industrial initiative in the photovoltaic sector and an evaluation of the socio-economic impact of PV demand in terms of gross domestic product and job creation were carried out by the I/O analysis method. When assuming the transfer of a facility having the capacity of 5 MW/ year, it has been made clear that the local availability of cells (Case L) brings very different returns on investment in the local economy, and the induced production increases from 1,4 times to 3,5 times the expenditure, as shown in Figure 11.5. The induced job creation involved 638

2 570 employees (Case L). In the case of not assuming the availability of local cell production (Case I), the induced job creation involved 489 employees.

Figure 11.5 Necessary expenditures and induced production (MUSD) Besides the economic effects of manufacturing, the availability of PV systems contributes to supporting social and economic development of the region that is more environmentally sound. To perform the technology transfer effectively, clear knowledge of the needs of, as well as the potential benefits to, the local population is required.

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However, it is expected in the future that VLS-PV will be reinforced yearly with the operation of PV module facilities in the region, and that the electricity generated by VLS-PV will be able to supply global areas through the Mediterranean Network. As a result, an electricity-for-technology exchange scheme may initially be set up. 11.2.4 Technology options for VLS-PV There are certain types of PV systems for constituting VLS-PV systems. In addition to fixed-module VLS-PV, the use of sun-tracking non-concentrator and concentrator PV systems is expected. The relative performances – which involved static PV modules (oriented facing south, with a tilt angle equalling geographic latitude), one-axis tracking modules (having a horizontal axis in the N-S direction), two-axis tracking modules, and a 400× point-focus concentrator PV system – have been addressed, and the potential economic benefits of employing highly concentrated solar radiation as an energy source for PV cells was considered. As a practical site, the Negev Desert was chosen. The simulations have indicated that, in a typical Middle Eastern desert, 8,5 % total system efficiency from a conventional static PV system, 10,7 % effective system efficiency for a one-axis sun-tracking system, and 11,8 % effective system efficiency for a two-axis tracking system are to be expected, where all three system types employ identical, polycrystalline Si PV modules. However, using a dense array of Si concentrator PV cells in a 400-sun point-focus system, the simulations have indicated that 16,5 % total system efficiency (17,2 %

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effective system efficiency) may be attainable if the cells are actively cooled so as to remain at a fixed temperature of 60 °C. Here, effective system efficiency was defined as the total annual A. C. energy output, divided by the annual global irradiance that would be received by a static system of similar aperture area, irrespective of the type of PV system that was being discussed (i.e. one-axis, two-axis, or concentrator). Regarding the prospects for a concentrated VLS-PV plant, it was concluded that a single 1 m2 concentrator PV module exposed to a light flux of 400 suns (where 1 sun is here defined as 1000 W/m2) would produce nearly 100 kW of electric power. Table 11.1 compares a number of area-related output parameters of interest for all four types of systems. Table 11.1 Comparison of predicted area-related performance parameters for various VLS-PV systems at Sede Boqer

aSolarex

MSX64 modules.

bModified cRancho

Sun Power Heda 303 cells.

Sew plant.

dHesperia

Lugo plant.

The estimation of the cost of a 30 MW turnkey project was approximately 136,5 × 103 USD per concentrator PV unit, where in a typical meteorological year each unit 641

would generate 154 000 kWh of A. C. electricity in Sede Boqer. When assuming 30-year financing, the electricity would work out to 0,045 USD/kWh in the case of 3 % interest and to 0,064 USD/kWh in the case of 6 % interest. By considering annual O&M costs to be 2 % of the capital cost, 0,018 USD/kWh would be added to the electricity costs given above. 11.3 General Conclusions • It is very likely that world energy demand and supply will become very tight due to trends in world population and economic growth in the 21st century. Especially, for the growth of developing countries, new energy resources and related technologies have to be prepared. • In view of basic global environmental problems, there is a logical need for renewable energy, and it is expected to be an important option for the mid-21st century. It has been seen that photovoltaic technology shows promise as one of the major energy resources for the future. • The present, active PV market is supplied mainly by crystalline silicon technology, and a number of R&D activities are expecting breakthroughs in advanced material PV cell fabrication processes. Forecasts of the expected cost of photovoltaics range widely, from the pessimistic to the optimistic: for instance, on the brighter side, a module price of the order of 1 USD/W for thin-film technology is said to be feasible.

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• It is thought that PV technologies are on track to reach the necessary performance levels for examining the feasibility of VLS-PV. • The potential amount of world solar energy resources is sufficient for people’s life in the next century. Our mission is to prepare possible access to this useful energy. • Much potential exists in desert areas around the world. If appropriate approaches are found, they might provide a solution to the energy problem of countries surrounded by deserts. • VLS-PV in desert areas will be economically feasible in the near future. It is believed that VLS-PV will be a very globally friendly energy technology and will contribute in an environmentally sound way to support the social and economic development of such regions. Further, various types of PV systems can be applied for VLS-PV. • VLS-PV will change the surroundings – economy, population and climate. If a certain scale of demand for photovoltaic systems arises, it is considered that desirable effects will be induced in neighbouring regions, e. g. suppression of greenhouse gas emissions, induced employment by array field construction, array support assembly factories, technology transfer for PV module assembly, PV cell fabrication, etc. These effects will be significant for the regional society and economy. Since the possibility is quite enormous in these areas, this will reduce cost by mass production in the

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world, and thus VLS-PV technology will become realistic and competitive. • Findings obtained from the study are sufficiently attractive. We would like to propose the continuation and deepening of this work by stakeholders surrounding PV technology in the world. • This study will be completed by proposing a VLS-PV introduction scenario for recommendation.

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Chapter Twelve Scenario studies

The case studies discussed in Part II, in which the feasibility of introducing very large-scale PV systems into desert areas in terms of economics, life-cycle assessment (LCA) and technology transfer are examined, suggest that VLS-PV systems may be an attractive energy source in the 21st century. However, its financial aspect should not be ignored; that is, a great deal of funds must be raised to install a VLS-PV system even though the average generation cost of a system can be cheap. Furthermore, problems may exist that have not been investigated at the actual development stage. Therefore a step-by-step enlargement of the PV system might be an effective way to prevent financial, technological and environmental risks caused by its rapid development. Moreover, the long-term sustainable operation of a VLS-PV system must be discussed in consideration of the local benefits that the introduction and expansion of a VLS-PV system will produce. In this chapter, some scenario studies to realize VLS-PV are discussed. 12.1 Sustainable Growth of the VLS-PV System Concept VLS-PV has a huge generating power capacity and it will be more feasible to enhance the capacity gradually.

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Therefore, for the introduction of VLS-PV, a development scheme for sustainable growth is needed. Considering the economic aspects of VLS-PV is also important for a sustainable initiative. In this section, a sustainable development scheme for VLS-PV is considered and an economic analysis of the scheme is carried out. Further, expected approaches for the sustainable growth of VLS-PV are discussed. 12.1.1 Concept of the sustainable development scheme of VLS-PV In the first stage of VLS-PV introduction, most of the components will be supplied from countries that have sufficient production capacity. However, for the sustainable growth of VLS-PV, producing the components near the VLS-PV site will be necessary for the introduction to progress. Finally, it is expected that most or all of the components of VLS-PV will be produced and supplied in the region: that is, local proliferation of VLS-PV will take place. This will bring about the deployment and activation of the PV industry all over the world. In this section, a sustainable development scheme for VLS-PV, centred on PV module production facilities, has been drawn up as an example, and some descriptions of other required facilities are given to consider the concept of the sustainable growth of VLS-PV 12.1.1.1 Scheme for constructing/operating PV module facilities The domestic production of PV modules is one of the most important issues for the success of VLS-PV 646

introduction. As an example, the following conceptual scheme of PV module manufacturing through technology transfer to the region was considered (Figure 12.1).

Figure 12.1 Conceptual view technology transfer scheme

of

a

sustainable,

First, a facility for PV module fabrication with a production capacity of 5 MW/year will be constructed and operated. A PV system to supply electricity to the facility will be installed and operated at the same time, because the electricity consumed at a PV module facility will be supplied by PV systems. According to the cost analysis for the crystalline PV module shown in Chapter 9, a PV module facility with a production capacity of 5 MW/year will be operated 220 days/year and the electricity consumption for module

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fabricating will be 106 MWh-MW−1·y−1. Then, annual electricity consumption at a facility, including the electricity for the workers’ use, will be assumed at 120 MWh-MW−1·y−1. In this scheme, to supply electricity for neighbouring demand from the PV system with the beginning of VLS-PV development, a 25 MW PV system for start-up was assumed. After starting operation of the first 5 MW facility, other facilities with the same production capacity will be constructed and operated, and the scale of the induced effects will increase to several times the first stage. With the technology transfer for mass production of PV modules in the next stage, those facilities will be integrated to reach up to 50 MW/year of production capacity and will be operated continuously. The induced effects will increase further and will be sustained. Based on the concept shown in Figure 12.1, the scheme of constructing/operating PV module facilities was considered as follows (Figure 12.2). The lifetime of facilities was assumed to be 10 years. New facilities with a production capacity of 50 MW/year will be constructed in the final year of operating previous facilities, i.e. four additional 5 MW/year facilities. That is, at the start, a 5 MW/year facility will be operated. The total capacity will be enhanced to 25 MW/year in the fourth year and to 50 MW/year in the 14th year. Afterwards, the capacity of 50 MW/year will be continued.

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Figure 12.2 Scheme of the PV module fabrication facility operation 12.1.1.2 VLS-PV system development scheme PV modules produced at the facilities will be installed in desert areas as part of a centralized system. The power-generating capacity of the system will be reinforced yearly with operating PV module facilities and a VLS-PV system will be developed. Figure 12.3 shows VLS-PV system development based on the scheme of operating facilities shown in Figure 12.2. In this scheme, the lifetime of PV systems was assumed to be 30 years, while that of the facilities was 10 years. It should be noted that PV systems and facilities are parts of the VLS-PV development scheme, and that the lifetimes assumed represent periods for repairing parts of the VLS-PV

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Figure 12.3 development

Sustainable

scheme

for

VLS-PV

The power-generating capacity of the PV system will be over 1 GW in 28 years, and will reach 1,5 GW in 43 years. With the replacement of PV modules and facilities, and with operating facilities, the VLS-PV will be a sustainable power plant. Assuming the performance ratio to be 0,85 and the degradation rate to be 0,5 %/year, a VLS-PV with a generating capacity of 1,5 GW will supply electricity of 2,3 TWh/year or more, as shown in Figure 12.4, because desert areas have an abundance of irradiation. The VLS-PV system will continuously supply electricity to surrounding regions, and it will contribute to the support of more environmentally sound social and economic development of the region. An alternative scheme to exploit the facility output is to implement a very large-scale PV installation, allowing the setting-up of an 650

electricity-for-technology exchange scheme between industrialized and developing countries.

Figure 12.4 Annual electricity generation of VLS-PV by assumed development scheme Further, the electricity generated by VLS-PV offers numerous positive effects and various kinds of values will be considered. For example, PV systems that replace diesel-based generation systems will save about 1 kg-CO2/kWh.1 VLS-PV that have a capacity of 1,5 GW can reduce CO2 emissions by 2,4–3,3 million tonnes per year. In addition, assuming the scheme runs for 50 years, an accumulated total reduction of 66–94 million tonnes of CO2 emissions will be achieved, as shown in Figure 12.5.

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Figure 12.5 Projection for reducing CO2 emissions by VLS-PV (cumulative) 12.1.1.3 General description of other required facilities Besides PV module fabrication facilities, for VLS-PV system development through the domestic technologies/ products in the region, some other facilities will also be required. Though concrete examination has not begun, the following are basic concepts on BOS production and/ or procurement and disposal/recycling. (A) BOS PRODUCTION AND/OR PROCUREMENT The required BOS are the array supports, the inverters, the cables, the troughs and other common apparatus. Though part of the components might be produced domestically, others must be imported initially.

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According to the case study on the Gobi Desert described in Chapter 8, for the array structure of a 100 MW VLS-PV system, the required amount of steel is around 10 ktons and that of cement is 100 ktons or more. Therefore, to enhance the capacity of the VLS-PV system by 50 MW/year, half the amounts of those materials are needed annually. In China, the production of cement and iron products is large. As shown in Table 12.1, it is thought that enough materials will be available from inside the country to supply the VLS-PV Though the location of those facilities in China has not been confirmed in this study, to reduce the transportation cost, it is desirable that a plant is located near the VLS-PV site. Table 12.1 Production of cement and steel in China (1 000 tons)2

Although those are general industrial products, the possibility of local production may be different according to region. If there is not enough to supply both, the materials for array supports will have to depend upon imports or it will be necessary to enhance the ability of domestic production and to operate facilities near the VLS-PV site. Moreover, the high-technology products, such as 500 kW inverters, will be imported at first. In the future,

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producing most or all BOS in the region might be desirable, and the technology transfer on BOS production facilities should be considered and be introduced. (B) DISPOSAL/RECYCLING OF END-OF-LIFE PV MODULES/SYSTEMS The end-of-life PV system/modules will be decommissioned and waste management of those will be needed. Because VLS-PV consists of a great number of PV modules, inverters, array structures and so on, such management is very important. As shown in Figure 12.3, the end-of-life modules (or systems) will start to appear after 30 years. They are caused by the start-up system at first and afterwards they increase year by year. Disposal and recycling are ways of management of end-of-life PV system/modules. Concerning the components of VLS-PV, the way of management of end-of-life PV modules has not been established yet, while other components except PV modules might be managed by existing technologies for recycling and so on. The disposal of the end-of-life PV modules will not only decrease rare material resources but also bring about environmental pollution, though this depends on the kinds of PV cells. The compound semiconductor PV cells such as CdTe and CIS contain toxic and rare materials. In addition, owing to the relatively high value and energy content of silicon wafers/cells, the disposal of crystalline-Si PV cells might not be effective from the viewpoint of the environment and economy. Also, most

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of the PV modules introduced today have lead solder that contains toxic material. The technologies for recycling of end-of-life PV modules have not been established yet. However, R&D for PV module recycling has been carried out in some countries. (C) R&D FOR CRYSTALLINE SI PV MODULE RECYCLING Table 12.2 shows the examples of R&D for crystalline Si PV module recycling. Different approaches for recycling have been proposed. Table 12.2 Examples of R&D for crystalline Si PV module recycling

Chemical approaches Immersion in hot nitric acid solution3 has shown potential. However, it is unlikely to become a viable industrial process due to the huge amount of nitric acid needed. Disposal of this chemical waste in a responsible manner and the treatment of NO2 gas would undoubtedly increase the cell recovery complexity and the energy involved as well as the financial cost significantly. 655

Immersion in organic solvent4 revealed the possibility of recovering silicon from convenient crystalline silicon PV modules. From dissolution tests of EVA by various kinds of organic solvents, it was found that trichloroethylene could dissolve a crosslinked EVA sample kept at 80 °C. Applying a one-cell module (125 mm × 125 mm), it was found that mechanical pressure was important to suppress swelling of the EVA. After immersing the module in trichloroethylene at 80 °C for 10 days, the silicon cell was recovered without any damage. However, this method might not be promising as an industrial process, because of the long reaction time. Thermal approaches The thermal approach seems to be more favourable as an industrial process than chemical ones. Thermal decomposition of EVA in a nitrogen gas atmosphere5 showed the possibility of recovering Si wafers from PV modules. For the industrial process, recovering silver and lead, and control of emissions from the EVA decomposition process, need to be investigated. Pyrolysis, instead of combustion, in a conveyer belt furnace6 looks promising as an industrial recycling process. The EVA is burned away in an air atmosphere or decomposed under nitrogen. With an optimized nitrogen flow and conveyer belt speed, this reclamation process results in mechanical yields higher than 80 %. Pyrolysis in a fluidized bed reactor,7, 8 which has been developed in Europe, seems to be a most promising method for crystalline Si PV modules recycling. Figure

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12.6 illustrates the fluidized bed reactor proposed/ developed. This reactor is filled with very fine sand that has a narrow particle size distribution. Owing to an optimized air stream, this sand is in a hot boiling fluidized state. The PV modules are immersed in the fluidized bed. An 80 % mechanical yield of the wafers has already been obtained. Reclaimed wafers were reprocessed to PV cells, and the efficiencies of those were almost the same as PV cells processed from virgin wafers.

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Figure 12.6 The fluidized bed reactor8 Table 12.3 shows the result of cost analysis on recycled wafers, based on the presently available knowledge. Although the cost for the collection of the end-of-life modules is not included, it seems to be relatively low in cost.

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Table 12.3 Cost of recycled wafersa,b by fluidized bed reactor process8 Cost per recycled wafer

Investment

0,047 EUR

Energy

0,011 EUR

Etching, cleaning for cell 0,037 EUR processing Labour

0,120 EUR

Total

0,215 EUR

aTotal

investment cost: 515 000 EUR; mechanical yield: 80 %; capacity: 576 wafers/hour. bSize

of wafer: 125 mm × 125 mm.

(D) R&D FOR THIN-FILM PV MODULE RECYCLING Some results on R&D for thin-film PV modules have been reported, and most of those have focused on semiconductor compounds such as CdTe and CIS. The recycling of CdTe and CIS PV modules, which contain toxic materials, is an important technology for preventing environmental damage. The etching method for recovering the cell materials from crushed CdTe PV modules has been developed by Solar Cells Inc. (presently First Solar). It was reported in 19979 and in 1998.10 Cost-effective, environmentally benign and scalable PV scrap management options have been practised. It is also reported that this technology will be applicable for CIS PV modules.

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Hydrometallurgical technology has also showed the possibility of recovering cell materials from CdTe and CIS PV modules. It was reported in 1997 by Drinkard Metalox Inc. (US). 11 However, the results of additional work for establishing it as an industrial process are not clear. In addition, as a non-destructive approach, electrochemical methods for recovering cell materials from CIS modules and from CdTe modules were reported in 199812 and in 2001.13 (E) PERSPECTIVE FOR VLS-PV VLS-PV contains a large amount of PV modules, inverters, array structures, cables and common apparatus. Some 20–30 years after the beginning of VLS-PV operation, a large amount of waste, perhaps corresponding to 30–50 MW/year, will arise annually. The disposal of those wastes will render the resources useless. Therefore, recycling technologies will surely be needed from the viewpoint of the effective use of various materials. Because VLS-PV is one of the long-term scenarios for PV system introduction, technologies for recycling of PV modules will be established when waste management is required. Also recycling of the components, except PV modules, will be managed by already matured technology. However, the amount of waste recycling required is huge, and some facilities for only VLS-PV recycling might be constructed and operated. From the viewpoint of economics, low-cost transportation will be required and the facilities for recycling should be located near the VLS-PV

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To ensure the recycling of industrial products, the social infrastructure to gather the waste is needed, in addition to the technologies for processing. In this respect, gathering the waste from VLS-PV will be easy because those will be concentrated, while the waste from small-scale dispersed PV systems, such as residential systems and SHS, will be widely dispersed. The discussion of the management of end-of-life PV systems/modules is just getting under way. However, the proper management of the wastes from VLS-PV will be indispensable to the future and should be considered in a discussion of developing the scheme/scenario. If recycling facilities for PV modules/systems are introduced, the ‘scrap and build’ approach to VLS-PV will be carried out. 12.1.2 A preliminary economic analysis of the VLS-PV development scheme For sustainable growth, the economic aspect is one of the most important issues. In this section, an economic analysis based on the scheme shown in Figure 12.3 was carried out. 12.1.2. 1 General assumptions (A) CONSTRUCTION COST OF VLS-PV To analyse the economic aspects of VLS-PV based on a long-term scheme, not only the construction cost in the initial stage but also trends in cost reduction in the future are important. As is well known, a cost reduces by enhancing the amount of production/construction. This effect can be estimated by adapting a learning curve.

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This gives the progress ratio, which means the degree of cost reduction with a doubling of production. In this study, three cases of construction cost in the first year were assumed. Those were 4, 3 and 2 USD/W, corresponding respectively to Cases A, B and C. Concerning future costs, the progress ratio of the PV system was assumed to be 0,8, by referring to reports1, 14 describing cost trends. The growth rate of PV production was assumed to be 20 %/year, which corresponds to the average growth rate of the world PV market through the 1990s, because produced/installed PV systems for VLS-PV would be a part of the world PV market. Further, in all cases, the minimum construction cost was assumed to be 1 USD/ W. Based on those assumptions, the construction cost of the VLS-PV in each installed year was set up as shown in Figure 12.7. Periods for reducing the construction cost to 1 USD/W, which was assumed as the minimum cost, were shorter than the periods for installing 1 GW, i.e. 28 years.

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Figure 12.7 Assumed cost trends of VLS-PV (B) ECONOMIC

PARAMETERS FOR ESTIMATING ANNUAL EXPENSE AND

INCOME

To estimate annual expenditure, the economic parameters shown in Table 12.4 were assumed. The construction cost described above was converted to a capital cost by using rates like salvage value, interest rate and so on. Then, as the acceleration case, lower values of the annual interest rate were assumed. Besides the capital cost, O&M, electricity transmission and decommissioning costs were assumed as shown in Table 12.4. O&M cost was assumed to be 0,1 % of construction cost, by referring to the case study described in Chapter 7. Transmission cost was assumed to be 1 US cent/kWh by referring to the case study described in Chapter 9, in all cases. The annual expenditure for electricity transmission would depend upon annual irradiation of the VLS-PV site. The 663

decommissioning cost was assumed to be 10 % of the construction cost. It would be required after the 30th year and the cost including overhead was assumed to be 0,1 USD/W. Table 12.4 Assumed economic parameters

As an income source, the selling price of the electricity that the VLS-PV generates was assumed to be 7 US cents/kWh. In the acceleration case, the price was assumed to be 10 US cents/kWh by considering the value of reducing CO2 emissions. (C) TECHNICAL

PARAMETERS

FOR

THE

VLS-PV

DEVELOPMENT

SCHEME

Besides the above, some technical parameters have been assumed for the VLS-PV development scheme described in the previous section. Those are shown in Table 12.5. Table 12.5 Assumed technical parameters for the VLS-PV development scheme Lifetime

PV system

30 years

PV module facilitya 10 years

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Performance ratio of VLS-PV

85%

Degradation rate

0,5 %/year

aIt

was assumed that the PV module facility would use imported PV cells for assembling PV modules. 12.1.2.2 Annual income As shown in Figure 12.4, VLS-PV with a generating capacity of 1,5 GW will supply 2,3 TWh/year when annual irradiation is 2 000 kWh·m−2·y−1, 2,8 TWh/year when annual irradiation is 2 400 kWh·m−2·y−1, and 3,3 TWh/year when annual irradiation is 2 800 kWh·m−2·y−1. In the basic case, assuming a selling price of 7 US cents/ kWh, the annual income of VLS-PV in each year is shown in Figure 12.8. The annual income of a 1,5 GW VLS-PV would be approximately 170 MUSD/year when the annual irradiation is 2 000 kWh·m−2·y−1, 200 MUSD/ year when the annual irradiation is 2 400 kWh·m−2·y−1, and 230 MUSD/year when the annual irradiation is 2 800 kWh·m−2·y−1.

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Figure 12.8 Annual income of VLS-PV (electricity selling price = 7 US cents/kWh) On the other hand, in the acceleration case, the annual income of VLS-PV in each year is shown in Figure 12.9.

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Figure 12.9 Annual income of VLS-PV (electricity selling price = 10UScents/kWh) 12.1.2.3 Investment for VLS-PV construction Construction cost is the most important item in annual expenditure. Huge investments will be required for VLS-PV construction. Figures 12.10, 12.11 and 12.12 show the investments for VLS-PV construction in three cases. Investments in the first year will range from 50 to 100 MUSD/year and those will stabilize to 50 MUSD/ year with both cost reduction and capacity enhancement.

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Figure 12.10 Investment for VLS-PV construction (Case A: construction cost in first year = 4 USD/W)

Figure 12.11 Investment for VLS-PV construction (Case B: construction cost in first year = 3 USD/W)

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Figure 12.12 Investment for VLS-PV construction (Case C: construction cost in first year = 2 USD/W) 12.1.2.4 Annual expenditure, generation cost and break-even periods in the basic case (A) ANNUAL EXPENDITURE Figures 12.13, 12.14 and 12.15 show the annual expenditure of VLS-PV in the case that annual irradiation is 2 400 kWh·m−2·y−1. Although the annual expenditures around the 30th year, when reaching 1 GW, were quite different in each case, when reaching 1,5 GW, they would be approximately 135–140 MUSD/year in all cases.

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Figure 12.13 Annual expenditure of VLS-PV (Case A: annual irradiation = 2 400 kWh·m−2·y−1, interest rate = 4 %/year)

Figure 12.14 Annual expenditure of VLS-PV (Case B: annual irradiation = 2 400 kWh·m−2·y−1, interest rate = 4 %/year) 670

Figure 12.15 Annual expenditure of VLS-PV (Case C: annual irradiation = 2 400 kWh·m−2·y−1 interest rate = 4 %/year) The expense for electricity transmission will depend upon annual irradiation of the VLS-PV site, because the amounts of electricity generated depend upon annual irradiation. When the annual irradiation is 2 000 kWh·m−2·y−1, the annual expenditure in a 1,5 GW site will be approximately 130–135 MUSD/year in all cases; and in the case where annual irradiation is 2 800 kWh·m−2·y−1 the annual expenditure will be approximately 140–145 MUSD/year. (B) GENERATION COST Table 12.6 shows the generation costs of VLS-PV, not including transmission cost. In the first year, the generation costs were 11,4–16,0 (Case A), 6,7–13,3 (Case B) and 4,7–8,0 US cents/kWh (Case C). Those of

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Case C were almost the same as the assumed electricity price. In the 28th year, when reaching 1 GW, the generation costs were 5,4–11,6 (Case A), 4,3–6,0 (Case B) and 3,4–4,8 US cents/kWh (Case C). In Cases B and C, those costs were lower than the assumed electricity price. In the 43rd year, when reaching 1,5 GW, the generation costs were around 3–5 US cents/kWh, which was lower than the assumed electricity price, in all cases. Table 12.6 Generation cost of VLS-PV (US cents/kWh) (not including transmission cost) Annual irradiation (kWh·m−2·y−1) 2 000

2 400

2 800

Case A

16,0

13,3

11,4

Case B

12,0

10,0

8,6

Case C

8,0

6,7

5,7

28th year Case A (1 GW)

7,6

6,3

5,4

Case B

6,0

5,0

4,3

Case C

4,8

4,0

3,4

43rd year Case A (1,5GW)

5,2

4,3

3,7

Case B

4,7

3,9

3,3

Case C

4,4

3,7

3,1

1st year

(C) BREAK-EVEN PERIOD AND/OR PROFIT

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Figures 12.16, 12.17 and 12.18 compare the accumulative income of VLS-PV with the accumulative expenditure by annual irradiation. Figure 12.19 shows the periods for break-even, which means periods in which accumulative income will exceed accumulative expenditure.

Figure 12.16 Cumulative expense and income of VLS-PV (irradiation = 2 000 kWh·m−2·y−1, interest rate = 4 %/year, electricity selling price = 7 US cents/kWh)

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Figure 12.17 Cumulative expense and income of VLS-PV (irradiation = 2 400 kWh·m−2·y−1 interest rate = 4 %/year, electricity selling price = 7 US cents/kWh)

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Figure 12.18 Cumulative expense and income of VLS-PV (irradiation = 2 800 kWh·m−2·y−1 interest rate = 4 %/year, electricity selling price = 7 US cents/kWh)

Figure 12.19 Break-even periods (interest rate = 4 %/year, electricity selling price = 7 US cents/kWh) In Case A, VLS-PV will not be able to reach a breakeven within the assumed economic lifetime (30 years). In Case B, if the annual irradiation is more than 2 400 kWh·m−2·y−1, it will reach break-even, though the required periods will still be long. Therefore, when the construction cost in the first year is 4 USD/W, to obtain economic benefit is difficult, and further cost reduction or financial incentives for investment will be needed. These may be applied to the case where the construction cost in the first year is 3 USD/W; however, when the annual irradiation of the constructed site is very high, some economic benefit may be expected. On the other hand, in Case C, it seems easy to reach break-even and to obtain economic benefit. That is, if the

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construction cost in the first year is 2 USD/W, VLS-PV will be profitable enough as a business. 12.1.2.5 Break-even periods in the acceleration case The electricity generated by VLS-PV can contribute to world energy demands, alleviation of environmental problems such as global warming and/or desertification, improvement of basic human needs and so on. Therefore, it might be reasonable to assume that the selling price of the electricity that the VLS-PV generates would be set higher. Also it might be possible to procure advantageous financial sources, for example low-rate loans from international financial institutions. These are important factors to accelerate VLS-PV. From these viewpoints, higher electricity selling price and lower interest rate were assumed. (A) BREAK-EVEN PERIOD IN THE CASE OF HIGHER ELECTRICITY SELLING PRICE, E.G. 10 US CENTS/KWH Here, by considering the value of reducing CO2 emissions, a higher selling price was assumed. A green certificate value on CO2 emissions can be assumed to be 32 USD/t-CO2, by using the projections calculated by the IEA, and the value of PV electricity on reducing CO2 emissions will be assumed to be 3 US cents/kWh. Therefore, the electricity selling price was set at 10 US cents/kWh. Figure 12.20 shows the break-even periods, when it is assumed that the price will be 10 US cents/kWh. In Cases B and C, the VLS-PV will reach break-even easily within the assumed economic lifetime and economic benefits will be obtained. On the other hand, in Case A, 676

it will be profitable only when the annual irradiation is more than 2 100 kWh·m−2·y−1.

Figure 12.20 Break-even periods (interest rate = 4 %/year, electricity selling price = 10 US cents/kWh) From these results, and by considering the added value of PV electricity, the economic aspects of the VLS-PV will be improved and the possibility of obtaining economic benefit will increase. However, if the construction cost in the first year is 4 USD/W, a further strategy might be necessary. (B) BREAK-EVEN PERIOD IN THE CASE OF LOWER INTEREST RATE, E. G. 3 AND 2 %/YEAR As is well known, the macroeconomic parameters greatly influence the results of economic evaluation. In the acceleration case, the interest rates were assumed to be lower. The break-even periods in Cases A and B, assuming the electricity selling price to be 7 US cents/ kWh, are shown in Figures 12.21 and 12.22.

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Figure 12.21 Break-even periods (Case A, electricity selling price = 7 US cents/kWh) In Case A, it will be possible to obtain some benefit assuming a 2 % interest rate and a high irradiation area. However, in cases of 3–4 % interest rate, it will be difficult to reach the break-even point. In Case B, the possibility of reaching the break-even point will increase, and in the case of a 2 % interest rate, it will be possible to obtain economic benefits. In a high irradiation area, a 3 % interest rate will also lead to some benefits. Therefore, one can conclude that providing a lower interest rate load will improve the economic aspects. However, when the construction cost in the first year is 4 USD/W or when the interest rate provided is 3 %/year, further advantageous conditions will be expected. (C) BREAK-EVEN

PERIOD IN THE CASE OF HIGHER ELECTRICITY SELLING

PRICE AND LOWER INTEREST RATE

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Figures 12.23 and 12.24 show the results in both Cases A and B, assuming the electricity selling price to be 10 US cents/kWh. In Case B, it will be possible to obtain economic benefits by using low interest rate financing. Also, the VLS-PV will be able to obtain economic benefit by low interest rate financing and by a higher electricity selling price, even if the construction cost in the first year is 4 USD/W (Case A).

Figure 12.23 Break-even periods (Case A, electricity selling price = 10 US cents/kWh)

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Figure 12.24 Break-even periods (Case B, electricity selling price = 10UScents/kWh) That is, if both advantageous conditions, i.e. a higher electricity selling price and lower interest rate, are provided, the VLS-PV can obtain economic benefit and can become economically independent. Finally, if the interest rate and electricity selling price were 2 %/year and 10 US cents/kWh respectively, the balances of the accumulative expenditure and income are reflected in Figures 12.25, 12.26 and 12.27.

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Figure 12.25 Cumulative expense and income of VLS-PV (irradiation = 2 000 kWh·m−2·y−1, interest rate = 2 %/year, electricity selling price = 10 US cents/kWh)

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Figure 12.26 Cumulative expense and income of VLS-PV (irradiation = 2 400 kWh·m−2·y−1, interest rate = 2 %/year, electricity selling price = 10 US cents/kWh) 12.1.2.6 Consideration of economic aspects of VLS-PV VLS-PV is a long-term scheme and has huge positive potential for humans in the future. However, to realize this concept, the economic aspect is one of the most important issues. From this viewpoint, an economic analysis was carried out in this study. If the construction cost of the VLS-PV is 4 USD/W when the development starts, various kinds of incentives will be needed to obtain economic benefits, even in desert areas where the annual irradiation will be abundant, although it will be worth providing advantageous incentives to save the Earth. This may be applied in the case where the construction cost of VLS-PV in the first year is 3 USD/W. However, this case is realistic because it is quite possible to prepare the needed incentives for an advanced project. On the other hand, if the construction cost of the VLS-PV is 2 USD/W when development starts, the VLS-PV can produce enough economic benefits while the technical progress to reduce construction costs will be more important than introduction of some economic incentives. Generally, desert areas have huge amounts of irradiation energy. However, it might be difficult to develop the VLS-PV at once without providing advantageous incentives, unless there is a drastic cost reduction. To start development of a VLS-PV in a desert where annual 682

irradiation is 2 000 kWh·m−2·y−1, various kinds of incentives will be needed, although the level of such incentives will become lower with reduced construction costs. When annual irradiation is 2 400 kWh·m−2·y−1, the economic aspects of the VLS-PV will be improved. If the construction cost is USD/W, by providing some incentives, the VLS-PV will be able to obtain benefits. If annual irradiation is 2 800 kWh·m−2·y−1, the possibility that the VLS-PV can lead to economic benefits will rise, but such areas are considerably limited. From these results, it can be concluded that, in the first stage, providing advantageous incentives will be needed for VLS-PV development, and that the level of incentives needed will become lower by reducing construction costs when starting the development scheme and by selecting a site having abundant irradiation energy. Actually, in most desert areas annual irradiation is 2 000–2 400 kWh·m−2·y−1, and it can be expected that the construction cost will be 3–4 USD/W when the VLS-PV development starts. Therefore, some incentives and frameworks for VLS-PV development should be considered. It is thought that incentives for reducing the owner’s investment, such as direct subsidies, soft loans and so on, will be effective. For increasing the value of PV electricity, green certificate values, oil savings and other added values will be considered. Further, some international frameworks and organizational supports will also be important. 12.1.3 Expected approaches for the sustainable growth of VLS-PV

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The VLS-PV development scheme drawn up showed that VLS-PV would be able to provide the PV modules required for growth by itself. However, besides PV module fabrication facilities, some other facilities for VLS-PV system development using domestic technologies/products in the regions will be required. To do so and to improve the economic aspects, providing advantageous incentives and organizational/institutional support will be expected. In this section, the expected approaches for sustainable growth of VLS-PV are discussed. 12.1.3.1 Building the concept of ‘scrap and build’ for VLS-PV In a scheme for sustainable growth, not only construction and operating VLS-PV but also manufacturing PV system components and disposal/recycling of those components should be considered. That is, it is important to draw up the scheme from the viewpoint of the life-cycle. Figure 12.28 shows the concept of sustainable growth. In the first stage, a start-up VLS-PV system will be introduced and then most of the components will be supplied from countries that have sufficient production capacity. At the same time, a PV module manufacturing facility will be constructed and the required technologies will be transferred. The technology transfer of a PV module manufacturing facility is an important issue for VLS-PV development, and PV cell production in the region will be expected in the future. The production capacity of the facility will be reinforced year by year and the technology for mass production will be

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transferred. PV modules produced at the facility will be supplied for VLS-PV enhancement. This means that the VLS-PV will be able to provide the PV modules required for growth by itself.

Figure 12.28 Example of a concept for sustainable growth of VLS-PV Besides the PV modules, BOS manufacturing facilities will be needed. Though it is thought that the materials for array structures may be produced domestically, there are differences depending on the country/region. If there is not enough ability domestically, a method of supply has to be considered. Even if there is enough domestic capacity, to reduce transportation costs it is desirable that facilities be located near the VLS-PV site. Components requiring highly developed technologies, such as inverters, will be imported to start with, but local facilities will be required before long. Thus, though some of the BOS must be imported at the beginning, 685

technology transfer on BOS production facilities should be considered and introduced. Moreover, from the life-cycle viewpoint, the management of wastes from the VLS-PV is indispensable. Because the disposal of those wastes will make the resources useless, the effective use of various materials will be needed. Therefore, the facilities and technologies for recycling will be required. The recycling of end-of-life PV modules accounting for most of the PV system cost and containing long-life materials such as PV cells is especially important. Although technologies for recycling end-of-life PV modules are now under development, such technologies/facilities should also be transferred. If recycling facilities for PV modules/systems are introduced, then ‘scrap and build’ for VLS-PV can be carried out: that is, local proliferation of VLS-PV without virgin PV modules. 12.1.3.2 Deployment of domestic/regional manufacturing of VLS-PV system components For the sustainable growth of VLS-PV, the components will need to be produced near the VLS-PV site and various kinds of technologies and facilities should be transferred. To do so, it will be necessary not only to transfer technologies for manufacturing, but also to secure plenty of investment for constructing and operating facilities. The previous section focused on the economic aspects of the whole VLS-PV facility, and the annual investments required for VLS-PV construction were shown in Figures 12.7–12.9. Among the VLS-PV components, a

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PV module manufacturing facility is the most important. By referring to Chapter 9, which focused on the technology transfer of a PV module manufacturing facility, a rough calculation may be possible. The construction cost of a PV module facility with a capacity of 5 MW/year is guessed to be approximately 2 MUSD. In this case, the PV module cost will be approximately 3 USD/W and annual capital cost is about 2 % of the PV module cost. Therefore, it is possible to assume that those will be close to the PV module cost of Case A in the previous analysis. By using data with the assumption of the economic analysis in the previous section, the annual investment for a PV module production facility is roughly estimated as shown in Figure 12.29. Here, the scheme for constructing and operating the facilities is the same as in Figure 12.2, and the investment for operating the PV module facility excludes the cost for depreciation for the facility construction and equipment.

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Figure 12.29 A rough estimation of the required investment for a PV module facility The required investments for constructing the facility will be 2 MUSD in the first year, which will increase to 7 MUSD in the third year to enhance the capacity of production. Further, about 10 MUSD will be needed to construct a 50 MW/year facility in the 13th year. However, it is clear that most of the required investment is for operating the facility, such as materials, utilities and labour. This means that it is necessary to build a financial mechanism for investing in facility operation, not only for the investment for constructing the facility. Technology transfer requires a clear knowledge of the needs of as well as the potential benefits to the local communities. The role of governments is generally to understand local conditions and to create the background for private investments in the country. This is in order to

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amplify the effect of public interventions, being by itself generally insufficient to satisfy the needs of the recipient country. The background for private investments is essentially represented by an institutional framework able to assure some kind of return on the investment as well as information, knowledge and ability, which are conditions to make the investment a benefit not only for the enterprise carrying it out but also for the developing country. From this viewpoint, some organizational/ institutional supports are very important and should be carried out. 12.1.3.3 Organizational/institutional support for VLS-PV As mentioned above, for the sustainable growth of VLS-PV, some financial and institutional supports should be prepared, besides technological progress like cost reduction. Subsidies for renewable projects in the form of loans or funds are becoming a trend. Such funds can also be tapped for VLS-PV systems installed in developing countries. The loan conditions are normally difficult, as the funds first have their own conditions. Secondly, in most cases, they have to comply with the increasing complex conditions of their funding organizations. Application procedures take a long time and, up to approval, can last for some years. VLS-PV plants will fit in many of those funds. In some countries, a number of residential and business clients are prepared to pay higher tariffs for green electricity (electricity from renewable sources). Presently there is a niche market for green electricity, but there is scope for expansion. The market might expand to other OECD countries first, and

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later to the more affluent developing countries. If this trend continues, it might be an appropriate way of getting better prices for the electricity produced. Further, financing of a major project used to be done through the mechanism of corporate financing. Therefore, some international frameworks and organizational supports will also be important. The most likely financing options for VLS-PV include project financing and subsidies available under climate change mitigation initiatives like those managed by GEF and WB. Project financing seems, in the first instance, an attractive financing source. The concept of VLS-PV meets the necessary requirements in terms of providing financial guarantees. A point of attention here is the fact that very likely a multi-party joint venture will be established to own and manage the plant. Each contracted party carries its own financial risk, to be carefully assessed in advance. Investors are likely to determine the possible risks involved, and weigh these against the financial opportunities. Therefore, attracting investors who are already acquainted with the concept of PV power generation is recommended, although it is recognized that the concept of VLS-PV is a less familiar one. The main owner(s) of the VLS-PV plant will be the sponsor(s) or investor(s) of the project. These are likely to be the utilities and the producers of the PV systems, most often those of OECD countries. Other parties might also participate, like governments, contractors, etc. In the case of establishment in developing countries, local ownership or embedding needs appropriate attention.

690

The VLS-PV plants should fit with the national policies, and provide job opportunities of different levels such as monitoring, research and development, operation and maintenance, etc. Involving national governments during the idea phase of the project, and consulting them first, is often effective. It shows respect for the national government and it can help to fit in to their regulatory framework. There are several forms of participation for the parties involved in such a project, which is to be decided by the project sponsors. These options include, for example, so-called Built, Own, Operate (BOO) and Built, Own, Transfer (BOT) constructions. Combinations or other options are possible as well. Because the VLS-PV plant involves a minimal risk in terms of O&M, ownership by the recipient country might be successful and even desired. That is, from the viewpoint of the recipient country, BOT might be an interesting form. On the other hand, VLS-PV requires substantial investment, and if cashflow-based repayment is to be ensured over a lengthy period, the latter may opt for BOO construction. Also, institutional problems hampering successful implementation of such large-scale projects may be a valid reason to lay the ownership in the hands of the investor. 12.1.4 Conclusions The VLS-PV development scheme outlined shows that VLS-PV would be able to provide the PV modules required for growth by itself, and the power-generating capacity of VLS-PV would be reinforced to 1–1,5 GW in several decades. Then the VLS-PV system will continuously supply electricity to surrounding regions or

691

will set up an electricity-for-technology exchange scheme between industrialized and developing countries. In the economic analysis, the generation cost for VLS-PV was estimated to be around 3–5 US cents/kWh for a 1,5 GW VLS-PV system. However, to obtain long-term economic benefits, providing advantageous incentives will be needed in the first stage. For sustainable growth, consideration of various kinds of technologies/facilities including BOS production, O&M, disposal/recycling and so on will be necessary. If these are transferred to the region at the VLS-PV site, ‘scrap and build’ for VLS-PV will be achieved. Further, for deploying domestic/regional manufacturing of VLS-PV system components, it is necessary to build a financial mechanism for investing in facility operation, not only investment to construct the facility. Some organizational/ institutional supports will be indispensable and those will contribute not only to profitability in the long-term scheme but also to successful technology transfer. Investigation of specific funds that might be applicable to the concept of VLS-PV is recommended. For example, making use of subsidies provided through a Clean Development Mechanism (CDM) might be possible. Further, the institutional and policy framework in the applicable country should be supportive towards the initiative. In addition, though it was assumed that produced PV modules and so on would be introduced to enhance the VLS-PV, this is not the only way. To export the products produced, for example, PV modules are thought to be enough. By including such issues, both the proliferation of VLS-PV and the activating of the PV

692

industry all over the world will be possible with the sustainable growth of VLS-PV. 12.2 Possible Approaches for the Future VLS-PV has a huge potential to contribute to our future from the viewpoint of energy, environment and socio-economic concerns, and has the possibility of building a concept of sustainable growth as shown in the previous section. However, to realize VLS-PV it is necessary to identify issues that should be solved and to discuss a practical development scenario. In this section, the VLS-PV development scenario will be discussed and proposed as a possible approach for the future. 12.2.1 Basic development

concept

and

issues

for

VLS-PV

12.2.1.1 Basic concept from the viewpoint of R&D Because VLS-PV is a very large-scale and long-range project that has not been experienced before, it is essential to follow the viewpoint of R&D. First, based on a case study15,16 of large-scale PV systems focusing on the technical development, four stages from S-0 to S-3 were assumed as shown in Figure 12.30. Although the capacity of the first PV system in the VLS-PV development scheme proposed in Section 12.1 was set at 25 MW, to verify the basic characteristics of the PV system, the existing grid-line and grid-connection R&D stage (S-0) was assumed as the first stage.

693

Figure 12.30 Basic R&D concept for VLS-PV S-0: R&D stage (four years) • PV system: 5 × 500 kW research system • Price of PV module: 4 USD/W 694

• PV module: import from overseas • Inverter: import from overseas S-1: Pilot stage (three years) • PV system: 25 MW pilot system • Price of PV module: 3 USD/W • PV module: import from overseas • Inverter: import from overseas S-2: Demonstration stage (three years) • PV system: 100 MW large-scale system • Price of PV module: 2 USD/W • PV module: domestic/regional production • Inverter: import from overseas S-3: Deployment stage (five years) • PV system: around 1 GW VLS-PV system with energy network • Price of PV module: 1 USD/W • PV module: domestic/regional production • Inverter: domestic/regional production 12.2.1.2 Key issues for VLS-PV development To propose a VLS-PV development scenario, there are many issues that should be considered. They can be classified into the following five categories: 1. Site preparation and development for VLS-PV construction 2. R&D for VLS-PV to operate in a desert area and for power supply 3. Domestic/regional production of VLS-PV components 4. Concept of system extension 695

5. Frameworks of international co-operation for funding, training, etc. (A) SITE

PREPARATION

AND

DEVELOPMENT

FOR

VLS-PV

CONSTRUCTION

Site selection is one of the most important issues, and numerous conditions must be satisfied. For VLS-PV construction, site preparation and development are needed, and investigations of infrastructure, geographical and geological features, etc., have to be carried out. The construction of VLS-PV requires much equipment and material. The VLS-PV is generally located inland, constructed on the fringe of a desert, and the equipment and materials are carried by heavy lorry. Therefore, the conditions of infrastructure for freight transportation have to be investigated, such as whether there are any existing routes that lorries can use. If there are no such routes, constructing a new transport infrastructure will be required. It is preferable that the construction site is flat; however, levelling the land should be considered. Moreover, creating a ‘green belt’ is one of the most important and expected issues for VLS-PV. For plantation or vegetation, geographical and geological features including soil condition must be made clear. The PV system does not need water for generation; however, a water source is required for greening the desert, and agriculture development to prevent desertification. Supplying water around the VLS-PV site

696

by using electricity generated by the VLS-PV is quite feasible. On the other hand, it is also necessary to investigate the possibility of huge amounts of rain and floods. This is important not only for carrying out construction continuously without delays, but also to protect the VLS-PV site from floods caused by heavy rain after operation. (B) R&D

FOR

VLS-PV

TO OPERATE IN A DESERT AREA AND FOR

POWER SUPPLY

Some PV systems in the desert and some large-scale PV systems with a capacity of a few megawatts have already been demonstrated. However, those may be insufficient for VLS-PV. Concerning operation in a desert area, the influence of wide temperature fluctuations and sandstorms, for example, on the reliability of VLS-PV system components should be verified. Those are not limited in PV modules, and an optimization of the type of PV system is important. Power generated by VLS-PV will be supplied to fulfil neighbouring demand through a grid line. When combined with the existing grid line, the influence on the power quality should be considered. Therefore, an investigation of the condition of local grid lines will be needed, and then, if necessary, a protective control unit for connecting PV systems with the local grid line has to be developed and installed. The pattern of power demands in the region has to be investigated. It should be compared with the generating pattern of the VLS-PV to evaluate the contribution to the local power supply. To synchronize those patterns and to

697

mitigate any influence caused by VLS-PV output fluctuation, preparing batteries is thought to be one of the effective methods. Then, it should be considered whether installation of a battery unit has a preferable influence on the grid line or not, which type of battery is suitable, and how the battery should be connected in the system. Also, the regulations about grid connections in the region or country should be considered. If there are any regulations that prevent PV system connection to grid lines, a solution to the problem should be found. Further, considering economic aspects of VLS-PV, the selling price of the power that the VLS-PV generates is very important as described in Section 12.1. That is, the differences between the local price of power in the region, the assumed selling price of power generated by the VLS-PV, and the generation cost of the VLS-PV are also important key items. (C) DOMESTIC/REGIONAL MANUFACTURING OF VLS-PV COMPONENTS The domestic/regional manufacturing of VLS-PV components is one of the most important issues for sustainable growth of VLS-PV. To do so, several kinds of technologies have to be transferred. Further, to produce VLS-PV components on-site, it is necessary to procure materials for the PV cells, PV modules, array structures, etc. At the first stage, technology transfer of a PV module manufacturing facility is hoped for. In the next stage, transferring technologies for PV cell manufacture, BOS

698

manufacture and so on will be expected. To produce these on-site may lead to further cost reduction for PV system components because of inexpensive labour costs. Further, the dispersal of PV manufacturing technology will contribute to the activation of the PV industry all over the world. In the case of a PV module, the scenario of on-site production is influenced by the type or configuration of the PV cell. When assuming use of a crystalline Si solar cell, the possibilities of procuring Si materials and of solar-grade Si (SOG-Si) technology on-site should be considered. The materials concerned, except for the PV cell, are general industrial products. However, the possibility of producing them locally may be different depending on the region. If there are not enough supplies in the region, the materials will have to be imported or it will be necessary to enhance the ability for domestic production. This issue also holds for array supports. It is necessary for constructing and operating facilities on-site to consider the production scale and the conditions of utilities like water, electrical power, etc., while consumed electricity will be supplied by the VLS-PV. At the same time, it should be simulated, including the cost of production equipment, and the funding scheme should be considered in detail. (D) CONCEPT OF SYSTEM EXTENSION For the sustainable growth of VLS-PV, the concept of extension is very important. Then, the independence of VLS-PV and the life-cycle viewpoint should be

699

discussed. Further, the contribution to world PV industries should also be considered. The electricity consumed at the manufacturing facilities of VLS-PV components will be supplied by the VLS-PV, and the VLS-PV will be able to spread increasingly by itself. This results in the energy independence of VLS-PV However, because of fluctuations in the electricity supplied by the VLS-PV, in order to supply electricity stably, it is necessary to consider the stability of the production scenario for the operation of the manufacturing facilities. Although VLS-PV is expected to be a promising technology for solving environmental issues, it is indeed a very large-scale and long-range project, the likes of which we have not yet experienced. Therefore, the environmental aspects of VLS-PV must be discussed and attention should be paid to the whole life-cycle of the VLS-PV Especially, the management of end-of-life systems is important, because the VLS-PV contains a large amount of PV modules, inverters, array structures, cables and common apparatus, and a large amount of waste will be caused annually 20–30 years after the beginning of VLS-PV operation. If recycling facilities for PV modules/systems are introduced, ‘scrap and build’ for VLS-PV will be carried out. Therefore, LCA, with consideration to recycling, etc., is also discussed as a key item included in the development scenario. Proliferation of VLS-PV is possible by establishing energy independence and scrap and build for VLS-PV. An example of a development scheme for VLS-PV at one site was shown in the previous section. However, a

700

practical development scheme considering various aspects should be adopted. On the other hand, for the future of the PV industry all over the world, this is not the only way. That is, to export the products produced by technology transfer is thought to be enough. If VLS-PV is able to become a production base for PV systems, then a scenario for thinking about issues such as where PV systems produced should be installed, whether PV systems are reinforced, whether an additional system should be built somewhere else, etc., will be needed. (E) FRAMEWORKS TRAINING, ETC.

OF INTERNATIONAL CO-OPERATION FOR FUNDING,

For introduction of VLS-PV, it is necessary to build up frameworks for project formation. In the case of a national project in a developing country, some organizational/institutional supports are required. There are several forms of co-operation frameworks for driving a VLS-PV project. A subsidized project by developed countries, a bilateral or multilateral project by governments, and an industrialized project including private investments are considered. Of course, the roles of international organizations are also included. These change at each stage. In these frameworks, education and training of local engineers are needed. At first, the purpose will be to operate and maintain the VLS-PV Next, that will change to manufacturing VLS-PV components. Moreover, a VLS-PV is accompanied by a large investment. This means that it will induce an economic impact, including

701

employment effects. Especially, the transfer of manufacturing facilities brings about stimulation of various economic activities as well as the establishment of a local PV industry. Also, it may induce a more sustainable development in the invested region, although the expected impact of constructing the VLS-PV is smaller than that of operating manufacturing facilities. 12.2.1.3 Adaptation of key categories to the stages of the basic scenario Many issues are involved in VLS-PV development. However, the degree of importance and influence on the project depend on the progress of each stage. Here, the relations between key issues (categories 1–5, Section 12.2.1.2) and stages for R&D (S-0 to S-3, Section 12.2.1.1) are defined as shown in Figure 12.31.

702

Figure 12.31 Adaptation of key categories to the stages of the basic scenario Category 1 (Site preparation and development for VLS-PV construction) This refers to issues common to all stages from S-0 to S-3. However, the scale of the infrastructure and required area to be secured become larger with the progress of the VLS-PV. Therefore, the investigations have to be carried out before the real construction process, in S-0. Category 2 (R&D for VLS-PV to operate in a desert area and for power supply) This also refers to issues common to all stages from S-0 to S-3. However, the significance grows with expansion of the capacity of the VLS-PV. Especially, issues on power supply are indispensable for practical use of the VLS-PV. That is, most of these issues have to be examined in S-0 and in S-l in detail. Category 3 (Domestic/regional production of VLS-PV components) This refers to essential issues for VLS-PV. It is assumed that PV module production on-site will start in S-l and BOS production will start in S-2 by transferring technologies. Category 4 (Concept of system extension) This refers to issues for deployment of the VLS-PV. These need to be discussed after S-2. 703

Category 5 (Frameworks of international co-operation for funding, training, etc. ) These refer to issues common to all stages from S-0 to S-3. However, these should be discussed before the real construction process, in S-0. 12.2.2 VLS-PV development scenario VLS-PV has both technical and non-technical aspects. Based on the basic concept shown in Figure 12.30 and key issues discussed above, a VLS-PV development scenario consisting of four stages was discussed. 12.2.2.1 Stage S-0: R&D stage (A) OBJECTIVES AND OUTLINE The objectives are to verify the basic characteristics of the PV system in the region and to prepare schemes for future deployment. The capacity of the PV system for research is set to 500 kW, which is the minimum basic unit for building a VLS-PV. To compare different technologies, five sets of PV systems will be installed at one site. All the electricity generated is transmitted to the existing electricity grid, without being consumed by the site itself. The electricity required for research activities on-site will be supplied from the existing grid. In addition, fundamental research is performed in order to attain optimization of each material and system against desert conditions, and also investigative research is carried out concerning the possibility of on-site production. Table 12.7 shows technical and non-technical key items for S-0: R&D stage. 704

Table 12.7 Key items for the VLS-PV development scenario for S-0: R&D stage Stage Capacity system

S-0: R&D of

PV

5 × 500 kW

Cost of PV module 4 USD/W Production of PV Import from overseas module Production of BOS Import from overseas Objectives

To verify the basic characteristics of the PV system in the region To prepare schemes for future deployment

Technical items

Measurement and verification of the reliability of the PV module in (a) an environment with wide temperature fluctuations Development of the installed (b)support structure and construction method in sand Investigation of the influences of sandstorms in the desert on the (c) PV module surface and on the materials used for the array supports

705

Verification of the stability of the (d)inverter when connecting to the grid line Development of low-cost equipment for regional (e) conditions, and investigation of the possibility of procurement in the region Investigation of quality, (f) regulations and conditions for power supply Development of protective equipment that fits the connection (g)to the existing grid line, and investigation of procurement in the region

Non-technical items

(h)

Collection of environmental and meteorological data

(i)

Verification of the applicability of flat-plate tracking systems

(a)

Site selection to satisfy various conditions required

(b)

Investigation of the environment of the region

(c)

Detailed engineers

706

plan

for

social training

(d)

Preparation of co-operation frameworks and funding schemes

(B) TECHNICAL ITEMS Reliability of PV module in environment with wide temperature fluctuations The influences on the characteristics of the PV module, including degradation, are measured under an intense environment with wide temperature fluctuations between summer and winter, or day and night. Development of installed construction method in sand

support

structure

and

A support structure on insecure foundations and a method of low-cost construction considering the procurement of low-cost materials in the region are examined and developed. Influence of sandstorms on PV module surface and materials for supports Friction or deposition by sandstorms in a desert may affect the characteristics of the PV modules and of materials used for array supports. The influences of the deterioration are measured and possible provisions are investigated. Stability of the inverter when connecting to the grid line The stability of inverter operation is tested when the inverters produced in another country are connected to the grid line on-site.

707

Low-cost equipment for regional conditions, and regional procurement The development of low-cost devices, such as the module, inverter, switchboard, etc., and of methods that reduce the construction cost are carried out. Further, the possibility of procurement on-site is investigated. Quality, regulations and conditions for power supply Quality and regulations about grid connection and price conditions, etc., are investigated. It is indispensable to conform to regulations for power supply, especially when connecting to the grid. Co-operation with electricity suppliers in the region is also important. Protective equipment for connection to grid line, and regional procurement The development of protective equipment that fits the voltage and frequency change of the existing grid line in the region and that also fits the other required conditions is carried out. Further, the possibility of procurement on-site is investigated. Collection of environmental and meteorological data Statistical data, as fundamental data for designing VLS-PV, are collected. Applicability of flat-plate tracking systems The applicability of flat-plate tracking systems is investigated from the viewpoint of economical efficiency, maintenance and durability aspects. Further, a comparison with a conventional fixed system is carried out. 708

(C) NON-TECHNICAL ITEMS Site selection to satisfy various conditions A construction site for the VLS-PV is decided upon by considering the geographical and meteorological conditions required. A flat site is preferable, and an inclined site is also acceptable. For plantation or vegetation, geographical features, including soil conditions, are made clear; and water resources such as underground water are required. The investigation of the possibility of huge amounts of rain and flooding is important not only for carrying out the construction without stoppages but also to protect the VLS-PV from floods caused by heavy rain. Social environment of the region Various kinds of data on the social environment of the region are collected. For construction and operation of the VLS-PV and for manufacturing VLS-PV components, lots of engineers are needed. Also, infrastructure conditions such as supplying utilities and roads for freight transportation are important. Detailed plan for training engineers A plan for training and educating engineers is decided. The training of engineers begins with the training of system administrators. After that, the training for manufacturing VLS-PV components is carried out. Further, training for the instruction of local engineers is important. For training, some experts are dispatched from international organizations or developed countries. Co-operation frameworks and funding schemes 709

Co-operation frameworks and funding schemes are discussed and prepared. In this stage, it is possible for a project to be subsidized by developed countries. 12.2.2.2 Stage S-1: pilot stage (A) OBJECTIVES AND OUTLINE The objectives are to evaluate the characteristics of large-scale PV and to start social development on VLS-PV The capacity of the PV system is set at 25 MW for preliminary demonstration purposes of a 100 MW VLS-PV. The electricity generated is transmitted to the existing electricity grid, and some is consumed on-site for research activities. In the case of bad weather, or failure, the required electricity for research activities on-site will be supplied from the existing grid. In this stage, economic efficiency, reliability, method of operation and maintenance, and problems concerning grid connection are considered. Through this stage, the VLS-PV is optimized preliminarily. Further, social developments such as regional development and PV module production on-site are started. Table 12.8 shows technical and non-technical key items of S-l: pilot stage. Table 12.8 Key items for the VLS-PV development scenario for S-1: pilot stage Stage Capacity system

S-1: pilot of

PV

25 MW

710

Cost of PV module 3 USD/W Production of PV Import from overseas module Production of BOS Import from overseas Objectives

To evaluate the characteristics of large-scale PV system, preliminarily To start the social development for VLS-PV

Technical items

Establishment of the optimum layout of equipment, and of the (a) method of connecting multiple cables (b)

Establishment of the method of operation and maintenance

Grasp of (c) operationalcharacteristics large-scale PV systems

the of

Consideration of the optimum protection method for the whole (d)system, and of the main circuit composition to realize high efficiency Consideration of the data (e) collecting/monitoring method for the whole system (f)

Establishment protection 711

of

lightning

(g)

Cost reduction for PV module and equipment

Consideration of the main circuit composition and the total system (h) configuration to realize improvement in reliability Non-technical items

(a)

Developments desertification

for

preventing

(b)

Beginning of operation of the PV module facility

International co-operation with (c) funds from governments and/or international organizations (B) TECHNICAL ITEMS Optimum layout of equipment, connecting multiple cables

and

method

of

The size, number, relay method and wiring route of cables are considered to suppress losses and voltage imbalance between PV arrays. Further, the method for dividing the PV array, conducting system and route, and the layout of sub-electric room that contains the PV inverters, is optimized. Method of operation and maintenance The components of the VLS-PV may be polluted and damaged by a typical sandstorm in the desert. Establishing an operating and maintenance manual for the cleaning and replacement of PV modules, the 712

frequency of these operations, and checking the circuit breakers and other equipment, are performed. Operational characteristics of large-scale PV systems To establish a control method for stabilizing the output from a PV inverter connected to the grid line, the characteristics of the output fluctuations caused by weather or seasonal conditions are researched. Further, the layout of batteries and the system control methods on the D. C. and A. C. sides of the PV inverter are examined. To stabilize output, the control methods on the D. C. and A. C. sides of the PV inverter are examined as well as the layout of batteries. Further, the layout and connection of the PV modules are examined. Optimum protection for whole system, and main circuit composition for high efficiency A diode for protecting back-current, a bypass diode, a short current relay, a ground fault relay and so on are needed as protection equipment on the D. C. side for grid connection. To establish the optimum protection method, the kind of equipment required, the installation position and the setting level are all considered. Data collecting/monitoring method for the whole system VLS-PV requires a wide area and an increase in monitored items. Then, the system configuration, the surveillance items and so on are considered for a monitoring control system aimed at improvement of the working efficiency of surveillance. Establishment of lightning protection

713

Because VLS-PV is spreading to wide areas, it might be struck by lightning. A method of grounding the frames and module frames is researched, as well as selection and installation of lightning protection equipment. Cost reduction for PV module and equipment The possibilities of cost reduction for various kinds of VLS-PV components are considered. Then, the ease of maintenance and construction, the possibility of procurement in the region and standardization are focused on. Main circuit composition and total system configuration to improve reliability The division of PV arrays and redundancies of the PV inverters are examined to obtain a stable output power, and the optimum system configuration is considered. Measures to choke harmonic frequencies are examined in order to supply high-quality power to the grid line. (C) NON-TECHNICAL ITEMS Development for preventing desertification To prevent desertification, developments such as creating a green belt, plantations, etc., are carried out. Supplying water around the VLS-PV site by using electricity generated by VLS-PV is quite feasible. Beginning of operation of PV module facility A facility for PV module manufacturing is constructed and operated. In the first stage, PV cells are imported. Regional engineers are trained under instruction from experts. 714

International co-operation and funding This stage is carried out through bilateral or multilateral co-operation. The funds required are provided from participating countries. In some cases, international organizations may provide some of the funds. 12.2.2.3 Stage S-2: demonstration stage (A) OBJECTIVES AND OUTLINE As the first step for real introduction, a PV system with a capacity of 100 MW is constructed. The objectives are to build a technical standard including the method of grid-connected operation and maintenance of the VLS-PV, and to establish the foundations of an industry in the region. At this scale, the supplying power has to be controlled considering the power from the other plants in this area. The management of power becomes important, because the power generated by the VLS-PV is widely changed by irradiation fluctuations. In addition, the production and supply of PV modules near the VLS-PV site should be considered. A 100 MW VLS-PV is operated based on the knowledge of O&M which is obtained in the previous stage, and the problems that should be solved are identified. Based on these results, methods of power management with the VLS-PV are established as a technical standard. Social developments will progress more than in the previous stage. Through both mass production of the PV module and BOS production, the foundations of PV industries are established. Table 12.9 shows technical and non-technical key items of S-2: demonstration stage. 715

Table 12.9 Key items for the VLS-PV development scenario for S-2: demonstration stage Stage Capacity system

S-2: demonstration of

PV

100 MW

Cost of PV module 2 USD/W Production of PV Domestic/regional production module Production of BOS Import from overseas Objectives

To build a technical standard for operation and maintenance of the VLS-PV To establish the foundations of an industry

Technical items

Development of an operational system for smoothing the (a) fluctuations of the power supplied by the VLS-PV, caused by changes in irradiation conditions Development of a system for (b)forecasting the fluctuations in irradiation Investigation of the marginal (c) capacity to connect the VLS-PV with the grid line (d)

Examination of combination of VLS-PV with batteries 716

Non-technical items

(a)

Mass production of PV modules near the VLS-PV site

The beginning of PV cell (b)manufacture and other components of VLS-PV (c)

Preparation for industrialization of the VLS-PV

(B) TECHNICAL ITEMS Smoothing the fluctuations of VLS-PV power caused by irradiation conditions The power supplied by VLS-PV fluctuates because the generated power depends on irradiance. To supply power stably, it is necessary to make up for the power fluctuations with other power sources. However, there are no methods for generating and supplying such a large amount of power at once, so that forecasting of power supply fluctuation is needed. As one idea, preparing a back-up power source by forecasting fluctuation of irradiation is considered. Then, as combined back-up power sources, existing thermal power plants or pumping-up hydroelectric power plants are evaluated. Forecasting the fluctuations in irradiation The power supplied by VLS-PV fluctuates because of fluctuations in irradiation. It is hoped that a system for forecasting the fluctuations in irradiation can be developed. Possible methods to achieve this are cloud observation using satellites, ground-based illumination sensors or meteorological radar, etc. 717

Marginal capacity to connect VLS-PV with grid line To maintain power quality and reliability, including voltage fluctuations, the marginal capacity of the existing grid line for VLS-PV installation is investigated. Combination of VLS-PV with batteries To mitigate the influence of fluctuation of VLS-PV output, the availability of combination with batteries is examined. (C) NON-TECHNICAL ITEMS Mass production of PV modules near VLS-PV site Based on experiences in the previous stage, the mass production of PV modules is begun. Manufacture of PV cells and other components of VLS-PV A technology for production of PV cells is transferred. A crystalline Si PV module is chosen because that technology is the most established. Further, facilities for other components of VLS-PV are constructed and operated. Preparation for industrialization of VLS-PV In this stage, besides governments and international organizations, some funds are invested by private enterprise. To promote private investment, VLS-PV is evaluated as a business, and the expected contributions to economic activities such as employment effects are analysed. 12.2.2.4 Stage S-3: deployment stage 718

(A) OBJECTIVES AND OUTLINE The objective of this stage is to verify the capability VLS-PV as a power source, from the viewpoint technical and non-technical aspects, for deployment desert areas. A VLS-PV with a capacity of 1 GW constructed.

of of in is

As a method for management of the power supply, demand control for VLS-PV is researched. On the other hand, high-efficiency power storage is also expected to control the demand to minimum. In addition, the production and supply of VLS-PV components and materials should be considered to enhance the capacity of VLS-PV From this approach, the concept of the ‘solar breeder’ is proposed. Table 12.10 shows technical and non-technical key items of S-3: deployment stage. Table 12.10 Key items for the VLS-PV development scenario for S-3: deployment stage Stage Capacity system

S-3: deployment of

PV

1 GW

Cost of PV module 1 USD/W Production of PV Domestic/regional production module Production of BOS Domestic/regional production

Objectives

To verify the capability of VLS-PV as a power source from the viewpoint of technical and non-technical aspects 719

Technical items

Non-technical items

(a)Demand control for VLS-PV (b)

Development of technologies to store electricity efficiently

(c)

Development of technologies for recycling VLS-PV components

(d)

Establishing energy independence for VLS-PV including facilities

(a)

Establishment of breeder’ concept

(b)

Proposal of a business plan for VLS-PV

the

‘solar

(B) TECHNICAL ITEMS Demand control for VLS-PV In advanced countries, it is necessary to cancel any instability of the power supplied by a PV system, because high-level stability of voltage and frequency are required. However, when a VLS-PV is constructed in regions with a scarce power supply, it may be an idea to consider demand systems presupposing the fluctuation of the power supply constructed. For example, researching a system to cut the power supply to low-priority users or to change the speed of the production line in a factory according to the amount of power supplied are possible methods for demand control for VLS-PV. Technologies to store electricity efficiently

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To make up for the power fluctuation of VLS-PV, it is necessary to develop a technology to store electrical power more efficiently. This technology would be expected to reduce losses and to recover the power fluctuation supplied by VLS-PV instantaneously. Technologies for recycling VLS-PV components Technologies for recycling VLS-PV components are developed. The management of end-of-life systems is important, because VLS-PV contains a large amount of PV modules, inverters, array structures, cables and common apparatus. Operating recycling facilities near the VLS-PV site introduces the concept of ‘scrap and build’ for VLS-PV. Energy independence for VLS-PV including facilities All the electricity consumed at manufacturing facilities of VLS-PV components is supplied by the VLS-PV To supply electricity stably, a production scenario concerning the operation of manufacturing facilities for stability of production is necessary. As a result, VLS-PV is spread increasingly without electricity supply from outside. This means energy independence for the VLS-PV. (C) NON-TECHNICAL ITEMS The ‘solar breeder’ concept It is expected that VLS-PV components will be produced near the VLS-PV site to enhance the capacity of the VLS-PV. Then the VLS-PV supplies electricity to facilities. In this stage, the possibility of this idea is examined. By establishing this, the solar breeder 721

concept can be considered and proposed. The solar breeder concept includes, for example, the following aspects: • Facilities for the PV system are constructed and operated near the VLS-PV. • The PV system is manufactured using energy from the VLS-PV and is installed for VLS-PV enhancement. • The solar breeder contributes to regional development around the VLS-PV. • It induces socio-economic effects such as industrial activity, job creation, etc. Business plan for VLS-PV To commercialize VLS-PV, a business plan for future VLS-PV is proposed. By establishing energy independence and scrap and build for VLS-PV, the proliferation of VLS-PV at one site is possible: solar breeder. On the other hand, it is also possible to export the VLS-PV components produced. In this case, the VLS-PV will be able to become a production base of PV systems. Both scenarios can contribute to activation of the PV industry all over the world. 12.2.3 A promising project proposal for S-0: R&D stage in Mongolia The following is a proposal for the first R&D stage (S-0), assuming implementation in the Gobi Desert in Mongolia. This proposal consists of three major R&D items:•

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selecting a demonstration test site • demonstration test of PV systems • comprehensive evaluation of PV systems. 12.2.3.1 Selecting a demonstration test site First of all, a demonstration test site suitable for VLS-PV development has to be selected, considering various aspects such as natural conditions, power situations and social conditions. (A) NATURAL CONDITIONS The following meteorological conditions will be investigated to determine detailed specifications of PV systems and power system components. Temperature and humidity PV modules, inverters, batteries, etc., all of which are required to configure components of PV systems, have ranges of temperature and humidity for operation within which they should be used to guarantee their performance. However, since Mongolia is so severe in its natural environment, its conditions could be outside of the ordinary operation temperature and humidity. Irradiation and continual days of non-sunshine Data on the amount of global irradiation in recent years are indispensable for detailed design of PV systems. Moreover, data on direct and dispersed irradiation are necessary to examine the specifications of diverse types of system forms as described later. Data on continual days of non-sunshine are also useful for discussing the capacities of PV systems and batteries. 723

Wind conditions Wind conditions, including maximum wind speed, are required to examine the design and strength of support structures and foundations. Rainfall, snowfall, and ground and soil Data on these are needed to examine the detailed design of support structures and foundations for PV systems and the methods of installing the diverse components of the equipment. It is also important to obtain soil data to check effects on the soil, such as salinization, which can be caused by shading due to the PV arrays. (B) POWER SITUATIONS For the detailed design of PV systems, information on loads that consume supplied electricity (types of loads, load patterns, minimum load, maximum load, need for new load, etc. ) and technical information on existing independent power systems (specifications of the current D. C. generators, parameters of distribution lines, etc. ) are necessary. (C) SOCIAL CONDITIONS It is necessary to conduct research on materials for array support structures and foundations (cement, steel, etc. ) which should be acquired in Mongolia, local labour force conditions, average travel distances and routes from the main base points (for example, Ulaanbaatar) to the demonstration test site, methods of transporting materials and equipment (including those from Japan), receiving systems, and other infrastructure. At the same time, it is necessary to obtain information on the 724

standard quality of the power supply and the regulations and guidelines for the power utility (controlled values of voltage and frequency, allowable harmonic components, etc.). 12.2.3.2 Demonstration test of PV systems In conducting research on a demonstration PV system network in Mongolia, it is important to specify a PV system configuration that is reliable and economic in terms of the climatic and other conditions in Mongolia. In this proposal, it is planned to introduce into the existing independent grid a number of different types of PV systems, which seem to fit the climate and conditions in Mongolia, to test their operation for an optimal PV system. It is also meaningful to demonstrate the operation technology of a dispersed PV system network that can minimize fuel consumption for existing D. C. generators through the control of power demand and supply using batteries, etc. (A) DESIGN AND CONSTRUCTION OF PV SYSTEMS Based on the many types of data obtained at demonstration test sites as indicated in Section 12.2.3.1, different types of PV systems that seem fit for the climate and other conditions in Mongolia are designed and constructed. More specifically, these PV systems consist of: a group of non-tracking fixed installation systems with different types of PV modules (group A), a group of non-tracking fixed installation systems with different inclination angles (group B), a group of non-tracking fixed installation systems with different installation orientation directions (group C), a group of

725

vertical installation systems with double-sided PV modules (group D), and a group of one-axis tracking systems without concentration (group E). Each of the systems has 500 kW capacity and total capacity is 2 500 kW. Group A: non-tracking fixed installations with different PV modules Group A aims to examine the ability and adaptability of PV modules to withstand severe natural environments, such as greater amplitudes of daily temperatures and annual temperatures. Except for types of PV module, the same specifications of the systems are used to evaluate the impacts on the system performance brought about by different types of solar cells. Group B: non-tracking fixed installations with different inclination angles In general, the annual electricity generated by a non-tracking fixed installation system becomes a maximum when its array installation angle is set to the latitude of the installation site. However, many array installation angles of existing PV systems in Mongolia are set to a steep 60°. Since larger installation angles are accompanied by stronger wind pressure, the support structures and foundations need to be designed for strength, leading to increase in facility costs. Group B examines high-latitude array installation angles of non-tracking fixed installation systems that can yield a high cost-effectiveness performance under a severe natural environment. System specifications other than array installation angle are the

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same. Batteries are essential for a dispersed PV systems network, which cannot prevent imbalanced demand and supply of electricity with time. In order to attain high cost-effectiveness, however, the capacity of the batteries must be minimized. To this end, the output power of PV systems during daytime must be levelled as flat as possible to ensure flat input power to the batteries. Three groups that could level output power are designed and constructed to analyse and evaluate their cost-effectiveness. Group C: non-tracking fixed installations with different installation directions The output of a solar cell becomes maximum when sunlight enters the system vertical to the cell face. Therefore, a configuration of non-tracking PV systems with different installation directions is one way to level off the PV output. Group D: vertical installations with a double-sided PV module A double-sided PV module can level the PV output during the daytime. When this type of module is installed vertically, with its light-receiving sides facing east–west, a relatively stable pattern of power generation is available during clear days. In addition, unlike a non-tracking fixed installation system, the vertical installation of this module requires no support structure and the construction is also easy. Thus, the cost-effectiveness of this module seems high. Therefore, vertically installed systems of double-sided PV modules are built.

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Group E: one-axis concentration

tracking

systems

without

The output of a solar cell becomes maximum when sunlight enters the system vertical to the cell face. Thus, when the receiving surface is always set vertically to the incoming sunlight, the maximum generated electricity is available from a PV system with a fixed capacity. Since this installation receives the same amount of solar radiation, the power output is also levelled. The climate of Mongolia is dry, and direct solar radiation accounts for a greater proportion of the amount of global solar radiation. Thus, a tracking-type system in Mongolia may produce a greater amount of electricity. However, since a precise solar-tracking system costs more, this proposal offers to build a north–south one-axis tracking system with an intermittent tracking function. (B) OPERATION TEST OF PV SYSTEMS An operational test of the various types of PV system groups constructed in Section 12.2.3.2(a) should be conducted for at least one year. During the operational test, the performance and possible discrepancies of the system components operating under severe natural environments are monitored and checked. This verifies whether the operation and control method of the PV systems are reasonable. (C) COLLECTING DEMONSTRATION TEST DATA This proposal aims to specify the optimal configuration of PV systems with excellent cost-effectiveness; to formulate guidelines for its multipurpose design and operation; and to make a sustainable entry-level model 728

of the system. To achieve these objectives, collecting various types of data through demonstration tests is indispensable. So data measurement systems to collect demonstration test data should be developed and introduced. Table 12.11 lists items of data to be measured. Like the network component equipment, the data measurement system must withstand operation under a severe natural environment. Table 12.11 List of data measurements Category

Item

Remarks

Irradiation (global horizontal irradiation; global Meteorological in-plane Average value of data (in principle, irradiation) the sum of 6 one-point seconds measurement data Temperature sampling as representative Humidity multiplied by 10 values in the conditions minutes demonstration test Wind (wind directions, area) wind speed) Amount of rainfall Radiation spectrum Moisture content of Once in the soil under months arrays

729

1–3

PV array output voltage (D.C.) PV array output current (D.C.) PV array temperature Average value of PV system (surface, rear side) the sum of 6 operation seconds output performance data Inverter sampling (measured by PV voltage (A.C.) multiplied by 10 systems) Inverter output minutes current (A.C.) Inverter output power (A.C.) Inverter frequency

output

PV array current and voltage curves Once

in

1–3

Inverter output months voltage waveforms Voltage (A.C.) Grid data

Average value of the sum of 6 Current (A.C.) seconds Battery charge and sampling discharge current multiplied by 10 minutes (D.C.)

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Battery charge and discharge voltage (D.C.) Diesel generator fuel consumption quantity Daily integration Electric power quantity generated by diesel generator 12.2.3.3 Comprehensive evaluation of PV systems Based on the data collected in Section 12.2.3.2, the power generation performances of various types of PV systems are analysed, and the reliability of different PV modules operating under severe natural environments is evaluated. Using the result of power generation performances and a life-cycle evaluation method, the optimal configuration of PV systems with excellent cost-effectiveness is specified in terms of energy, environment and economy. At the same time, guidelines for multipurpose design and operation of a PV systems network applicable to other areas in Mongolia are formulated. In addition, a business model that can achieve sustainable proliferation in the country is proposed. (A) EVALUATION OF PV SYSTEM POWER GENERATION PERFORMANCE The power generation performance, operation, maintenance, environmental impact and economics of the different PV systems constructed are compared and 731

evaluated in order to specify the optimal PV system form. (B) EVALUATING THE LONG-TERM RELIABILITY OF PV MODULES Since PV modules for the demonstration test are going to be exposed to a severe natural environment for a long time, their performance could be degraded (for example, lowered photo-transparency of the light-receiving glass surfaces under the influence of desert sand; weakened module structure due to thermal expansion and shrinkage of EVA caused by the wide range of daily and annual temperatures). The characteristics of different types of PV modules installed at group A are periodically measured and their changes since initial exposure to sunlight are analysed and evaluated. (C) EXAMINING THE OPTIMAL CONFIGURATION OF DISPERSED PV SYSTEM NETWORK

Based on the comprehensive analysis of the demonstration test data obtained in Section 12.2.3.2 and the PV system power generation performance evaluation result in Section 12.2.3.3(a), the optimal configuration of a dispersed PV system network (PV system form, necessary components and basic specifications, control method, etc. ) is specified in terms of energy, environment and economics. At the same time, quantitative evaluations of the fuel consumption reduction effect of D. C. power generation, CO2 emissions reductions, economic effects, etc., are carried out.

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(D) GUIDELINES FOR MULTIPURPOSE DISPERSED PV SYSTEM NETWORK

DESIGN

AND

OPERATION

OF

In order to generalize the findings obtained so far, dispersed PV system network design tools and operation guidelines that are applicable to areas whose characteristics are similar to the demonstration test areas are formulated for the purpose of technology transfer and human resource development. (E) PROPOSING A SUSTAINABLE PROLIFERATION MODEL An autonomous and sustainable business model of a dispersed PV system network is established in terms of technology and finance, so that Mongolia can proliferate the model by itself. More specifically, basic information – domestic situations (such as administrative responses to the proposal), analysis of international trends (such as the Kyoto Protocol), and analysis of expected social and economic effects – is collected to propose this autonomous proliferation model (deployment to other areas in Mongolia, revitalization of local industries, commercialization of new businesses, co-operation with administrative organizations) and an internationally co-operative proliferation model (Kyoto Protocol, including CDM, and other fund-raising schemes, etc. ). 12.2.4 Conclusions In this section, a VLS-PV development scenario was discussed. It consists of four stages from S-0: R&D stage to S-3: deployment stage. Various kinds of technical and non-technical items were identified in each stage. Table 12.12 shows a summary of the VLS-PV development scenario. 733

Table 12.12 Summary of the VLS-PV development scenario

S-0: R&D stage Five sets of 500 kW PV systems will be constructed and operated to verify the basic characteristics of the PV system in a desert area. In this stage, the reliability of VLS-PV in a desert area and the ability required for grid connection will be mainly examined and investigated as technical issues. Conditions for site selection, planning of co-operation frameworks (including training engineers) and funding schemes will be investigated as non-technical issues. Those are very important issues that affect the whole VLS-PV project. S-1: pilot stage 734

A 25 MW PV system will be constructed and operated to evaluate and verify the preliminary characteristics of a large-scale PV system. Technical issues here are of a higher level and shift to concentrated and grid-connected PV system, for building VLS-PV technical standards. PV module facilities will be constructed and operated, although the PV modules constructed would be imported. PV module production will be introduced in the next stage. Further, development for preventing desertification, such as vegetation and plantations, will also be started at this stage. S-2: demonstration stage A 100 MW PV system will be constructed and operated to research methods of grid-connected operation and maintenance when VLS-PV actually takes on a part of the local power supply. The knowledge, on grid-connecting VLS-PV to the existing grid line, that will be obtained at this stage will be technical standards for deploying VLS-PV Non-technical issues will also advance for industrialization. Mass production of PV modules will be carried out and BOS production on-site will be started towards a deployment stage. S-3: deployment stage This is to verify the capability of VLS-PV as a power source. In this stage, technologies for generating and supplying electricity will be nearly completed. However, for deployment of VLS-PV in the future, some options such as demand control, electricity storage and recycling of components will be required. These will contribute to

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building the concept of the solar breeder and some business plans for VLS-PV will be proposed. Thus, the implementation of VLS-PV will activate the world PV industries in a wide range of technologies involving a vast range from solar-cell production to system construction. However, to achieve the final stage, the previous stages from S-0 to S-2 are important, and the developments in each stage should be carried out steadily. 12.3 Financial and Organizational Sustainability 12.3.1 General assumptions 12.3.1.1 VLS-PV and funding The scenario for the development and introduction of very large-scale photovoltaic (VLS-PV) systems in deserts is described in the previous sections. There are basically four stages: R&D, pilot, demonstration, and deployment (commercial) stages. Each stage of growth bears its own characteristics and cost structure. The characteristics of these stages range from theoretical to technical, i.e. through the techno-economic, socio-economic and purely commercial characteristics. In this section, the feasibility stage was settled before the R&D stage. The estimated investment levels for these phases range from 1–2 MUSD for the first to 4 000 MUSD for the last, as shown in Table 12.13. Table 12.13 Stages for a financial scenario towards VLS-PV realization

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It should be stressed that, for VLS-PV, an appropriate experimental size should be at least 5 MW and a demonstration project should be of the order of 100 MW. This is much different from customary PV R&D and demonstration projects, but in a budgetary sense it is not much different from the magnitude of hydropower or infrastructure projects. Financing sources that can accommodate this larger scale should be identified. 12.3.1.2 Stakeholder-dependent types of funding All stakeholders as described in Section 5.5 may experience other benefits from the VLS-PV system. This has direct impact on the reasons for funding, the subsidy window, the type and the specificity of financing. Therefore, each project or programme for VLS-PV systems needs to be scrutinized concerning all possible benefits for all potential stakeholders. As an example, a reason relevant to a national government might be increased R&D activities, which could then be dealt with

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through a window at the ‘Ministry of Economic Affairs’ by a type of income tax reduction for all staff involved in R&D. 12.3.1.3 Redundancy of public funding In general, securing subsidies and grants from a multilateral governmental organization is a complex and time-consuming business. Rules are often hard to grasp, the conditions for funding may be very strict, and programmes and possible contributions change over time. Therefore, any financial scenario should provide fallback options and redundancies to cope with missed or reduced contributions. 12.3.1.4 Restrictions concerning financial scenarios In the scenario described in Section 12.1, the construction of a local manufacturing facility of PV cells and/or modules is envisaged. In the financial scenarios presented below, such a facility is treated as a module supplier for R&D and demonstration PV systems. Investment in and exploitation of these manufacturing facilities therefore needs to be arranged separately. To introduce a technology successfully on such a large scale, technology transfer and technological assistance for the country where the system is installed are necessary, and these aspects require attention. This will be partly incorporated within four stages. However, separate technical and managerial training as well as other educational programmes are also necessary. We have not incorporated the costs and funding of these extra activities. The different cost phases for a VLS-PV plant are investment costs, exploitation costs and 738

decommissioning costs. In the calculations, decommissioning phase is not yet accounted for.

the

12.3.1.5 Funding approaches An indicative portfolio of funding sources for each stage is identified. Since the first two stages are not supposed to be commercial, but theoretical and experimental, no further exploitation or return on investment calculation is undertaken. The investment and exploitation of the third stage, the demonstration project of 100 MW, is thoroughly calculated using the cost assumptions of Section 12.1. The results are based on a study by Ente. 17 At this moment, the costs and funding arrangements of the commercial stage can only be estimated. The third stage (the demonstration stage) should generate cost and income details for a full investment proposal for such a large plant. 12.3.2 Funding in a phased approach There are six potential sources of financing the investment: • Direct subsidies may be provided for demonstration, experimental, export promotion, or development cooperation reasons by governmental bodies. The closer a given situation is to being commercial, the lower the direct subsidies that are expected to be granted. • The provision of soft loans and green money may be driven by similar motives, but can also be provided by private capital. The loan money should increase as the project becomes more 739

•

• •

•

commercial to leverage the ROI for the shareholders. Equity and in-kind contributions are investments by the shareholders of the project. Examples of in-kind contributions are office housing and free management services. Import duties may be exempted or reduced to stimulate the uptake of new or renewable energy technologies in a particular country. Green certificate buy-off may constitute an up-front contribution of a utility that subsidizes the project and receives green certificates in return. Other instances may be profit tax advantages of investors regarding the project.

In Table 12.14, a first estimate of possible contributions from these sources is given. The total may be larger than 100 % because of redundancy in funding sources; i.e. not all potential sources need to be deployed to their full extent. Table 12.14 Example of contribution towards investment by various sources of co-funding in the different stages of the introduction of VLS-PV

740

aRedundancy

of funding is necessary to reduce risks.

Basically, all net investment costs, interest and profits should be recovered through exploitation of the plant. The net investment is the investment after subtracting subsidies and fiscal advantages. There are four recognized sources of income during the exploitation stage: • electric power sales • opportunity costs, to be explained later • green certificates, not to be double-counted with a possible up-front investment • tax incentives, such as reduced VAT and exemption from pollution taxes. In Table 12.15, an overview of the income and recurring costs from the exploitation is given. Table 12.15 Estimated income as a percentage of total recurring costs after subsidy of the different stages of the introduction of VLS-PV

The feasibility stage is easily supported when applying to national or multinational governmental organizations. The size and novelty of the project are expected to gear 741

sufficient interest to achieve the involvement of the World Bank, the EU and the respective national governments of the interested OECD countries. The cost is very low compared with hydropower. For example, the Dutch Government has the PESP facility, where 67 % (with a ceiling of approximately 125 000 USD) is granted for project development. There are no exploitation costs or income at this stage. At a cost of around 30–40 MUSD, this R&D/pilot project would be a project of a relatively large size for individual governments to bear, but not for two or more governments or multilateral organizations. As it has interesting technical and social aspects, there will be multiple instruments to apply for funding. The strongly reduced investment by heavy subsidies will enable the electrical power to be sold favourably Thus electricity accounts for 50 % in the income of the plant. Other sources of income are green certificate values and tax incentives. The cost and financing of a 100 MW demonstration plant to be built in five years has been determined for the nation of Egypt. The subsidy will be reduced and may even be higher and could be secured from export promotion subsidies such as the Dutch ORET/Miliev programme. The exploitation could be economically attractive, depending on several assumptions. The first and most important is the value of green certificates and the value of so-called opportunity costs. These opportunity costs are costs avoided by certain companies or increased income for such companies, due to the

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existence of the VLS-PV project. A more detailed description follows in Section 12.3.3. The deployment/commercial stage will have to benefit from reduced costs of PV modules and increased cost of power and of green certificates. It is too early to give more details regarding such a 1 GW plant. 12.3.3 Costs of a 100 MW demonstration plant in Egypt The costing model used for this financial analysis was created from an existing study18 which incorporates more than 30 parameters for construction, operation and maintenance conditions in connection with a site in the Gobi Desert. Additional information has been provided on a per-site basis. The cost assumptions used for preparation of the model apply the site-dependent parameters to the extent that this information has been provided for the Sahara/Egypt area. In this chapter, the results of a pre-feasibility study are reproduced, based on a study by Ente. 17 12.3.3.1 Financial assumptions The sensitivity analyses that have been prepared in Table 12.16 apply a number of fixed assumptions for the project. The model has been set up in such a way as to enable manipulation of variables as changes occur in the assumptions made, or as more information becomes available on the project. The assumptions that apply to both models are summarized in Table 12.17. The appendix to this section contains a summary of the technical assumptions and their related costs.

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Table 12.16 Cost assumption scenario calculations (MEUR) Costs

Scenarios I and III Scenarios II and IV

Module cost

335,7

336,6

Array cost

12,6

37,9

Foundation work 11,0 cost

14,3

Transmission cable cost

49,3

49,7

Inverter and 12,8 transformer cost

13,9

Common apparatus cost

22,1

22,1

Total investment 443,9

474,9

support

Table 12.17 Assumptions for financial calculations of a 100 MW demonstration plant Variable

Assumption

Interest rate

4%

kWh price

0,07 EUR

Green certificate value

34 EUR/tonne-CO2

Distance from the grid

200 km

Subsidy

7,2 MEUR

744

Inflation rate

3,5 %/annum

The NPV model has been prepared using an investor’s expected return, or discount rate, of 11 %. The interest rate provided on the loan is 4 %, which is the moderate interest rate used by the existing study. 18 Given the current economic situation in both the USA and Japan, it is estimated that a 4 % interest rate may be obtained. Debt financing is expected to come from an international financing institution, such as the World Bank or the GEF, or from a national institution with interest in the project. Alternative or supplemental financing may be provided through government-issued bond notes, from either the Egyptian or Dutch governments. The electricity cost is estimated at the average cost to industrial consumers in Egypt, or 0,07 EUR/kWh. This price is approximately 60 % of the price that the Egyptian utility (EEA) receives from its industrial customers. For this feasibility study, a conservative approach has been taken in estimating the kWh price. Because of the increasing pressure on energy companies to reduce electricity prices, it is reasonable to assume that the price paid for electricity generated from the VLS-PV system will be relatively low. 12.3.3.2 Value of green certificates The value of green certificates has been determined using the projections calculated by the IEA. Their projected value of 32 USD/tonne-CO2 has been held consistent throughout the projected operating period of the VLS-PV system. The constant pricing is due to the

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uncertainty of the future value of the certificates. Some projections are that the cost of implementing greenhouse gas mitigation processes will decrease as the technology improves. Some postulate that the costs will increase as the low-cost mitigation investments will be the first implemented and more costly investments will be made in later years. The approach taken for the purposes of this model is quite conservative, since the value of the certificates does not increase with annual inflation. Further assumptions made are that 50 kg of CO2 is saved per 100 W module. Therefore, the annual saving for a 100 MW facility employing 1 million modules is 50 tonnes of CO2. 12.3.3.3 Opportunity costs The opportunity cost assumptions for this model have been developed as an innovative way of considering the costs of implementing renewable energy projects in oil-producing countries. For the construction of VLS-PV systems in the desert, where levels of irradiation are highest, the opportunity cost presents a means of improving the economic attractiveness of investments in photovoltaics. Scaling up production of PV modules for VLS-PV systems could mean a breakthrough in production costs, which would make PV a more attractive alternative energy source in the wealthier northern countries where demand would be higher, should the cost become less prohibitive. The market price per barrel of oil is the price forecast by the IEA in their annual report on world energy trends. 19 The electricity produced per barrel of oil is derived from a

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report of the US Energy Information Administration. 20 This amount, which has been provided at 97 155 MW annually, is the equivalent of 14 million barrels of oil. The cost for a barrel of oil is determined based on the assumption that operating margins for oil production are 10%. Therefore,

The opportunity cost for year 1 is calculated using the parameters included in Table 12.18. Table 12.18 Parameters regarding opportunity cost Parameter

Value assigned

Price of oil per barrel

22,35 USD

Electricity production per 608 kWh barrel MWh production of a 100 207 193 MW system Number of barrels of oil 340 827 saved Profit margin on selling 10% price (PMSP) Opportunity cost = number of barrels saved × price of oil per 7,4 MEUR barrel × (1 – PMSP) 12.3.3.4 Scenarios 747

Several scenarios have been considered. These scenarios differ in the lifetime of the modules, local labour costs, the applicability of opportunity costs, the availability of tax relief, and export subsidies, as shown in Table 12.19. Table 12.19 Scenario assumptions and ROI of the net present value outcome for a 100 MW VLS-PV system in Egypt

Scenario I Scenario I forecasts the total cost of the project at 444 MEUR. Labour costs are estimated at 10,42 EUR/day. It is assumed that labour is supplied locally. The return on the project in present value terms is projected at 4,1 %. The financing was assumed at 70 % debt and 30 % equity. The present value of the return on equity investment is expected to be 8,5 %. The expected leverage on the project is projected to be between 20 and 30 % equity capital. In this model, there is no tax relief provided by the Egyptian Government. Because the project generates a profit for the Government already in the first year of operation, earnings are made from corporate taxes levied

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as well as property taxes. Owing to the attractiveness of the project, should the cost assumptions be confirmed from a technical standpoint, one might reasonably expect that the assumptions made to derive the opportunity cost would be supported by the Egyptian Government. The model reflects the phase-in period of five years for the construction of the facility. As such, one-fifth of the modules installed in year 5 would still be effective in year 24. Scenario II For this scenario, the life of the system has been extended to a period of 25 years. This is still five years less than the expected useful life of PV modules. Labour cost, still from local sources, has been increased to 14,05 EUR/day. The total cost of the project is 475 MEUR. A subsidy of 7,26 MEUR is obtained from the Dutch Ministry of Foreign Affairs and is paid out over a period of four years. To match the subsidy, the Egyptian Government waives property tax on the project for the first 10 years of the project. The leverage portrays a more conservative scenario in which only 20 % of the capital requirements will be financed through direct investment. This model provides a net present value of the return on investment of 6,6 %. The project provides an equivalent return of 7 % in present value terms. This is slightly less than the expected return required by electricity companies. With an additional subsidy from the European government, the return on the investment could be improved.

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Scenario III Scenario III is identical in costs to Scenario I. The absence of opportunity cost advantages, export subsidies and property tax relief makes the project financially unfeasible. Scenario IV Scenario IV is identical in costs to Scenario II. The absence of opportunity cost advantages makes the project financially unfeasible. 12.3.3.5 Financial architecture It is anticipated that consortia will provide the financing for the project. The anticipated participants are the World Bank, an Egyptian bank, a Dutch bank, the Egyptian, Dutch and European governments, the Egyptian energy company (EEA), a Dutch energy company, the module manufacturer, and some of the Dutch project contractors. Since the project is attractive both for lenders and from the perspective of investors, the recommended structure is a debt–equity combination. An increased equity contribution would also reduce the annual payments due on the loan financing. The anticipated equity participation is between 20 % and 30 %, to be determined by the interests of the equity participants. The assumption is that the Dutch energy company will invest for two reasons: first, the right to earn green certificates; and secondly, for the public relations aspect of becoming involved in a project that will be fundamental to building up PV production

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capacity on an international basis. A Dutch energy company could also take advantage of reduced PV module costs in meeting demand for green energy customers domestically. Thirdly, the expected return on investment, being a 7–8 % return in today’s money, makes for an attractive investment. The discount rate of 11 % has been chosen as the expected return required by investors, given the return on equity achieved by Dutch energy companies. Operating income as a percentage of revenue is also competitive in these models. In addition, the module manufacturer may want to participate to ensure that the project continues to buy their product. The Dutch energy company will participate to the extent that it earns the rights to green certificates. Ownership rights to certificates must be determined within consortia. The technical feasibility of the plan needs to be assessed and confirmed. Agreements would need to be made with the Egyptian authorities. 12.3.3.6 Boundary conditions (A) INTERNATIONAL PV PRODUCTION CAPACITY The market for PV is projected to increase by 20 % per year. Production capacity in 2001 was 390 MW. 21 For the construction of 100 MW, given today’s limited production capacity, the assumption used for the model is that the facility will be constructed over a period of five phases of 20 MW per year. Significant advantages to be gained by a staged implementation are as follows:

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• Fixed contracts may be negotiated for the purchase of PV modules. The consortia may obtain better prices given that a commitment is made to purchase a substantial amount of the PV module manufacturer’s yearly production. • Scale-up improvements can be made to the grid to accommodate increased capacity. • Financing requirements are spread out over a longer period of time. • The project can take full advantage of improvements in technology and cost savings obtained from the installation learning curve. The salvage value rate is dependent on factors such as the value of the silicon and the life of the foundations. Should the location become a permanent housing for a PV generation facility requiring the replacement of modules only as technology improves or as existing modules wear out, the salvage value may be higher. Top-quality modules are designed to last at least 30 years, and most manufacturers provide a 20-year warranty. (B) REALIZATION OF THE OPPORTUNITY COST The project becomes interesting from a commercial perspective as the result of the application of the concept of opportunity cost. The success of the financial feasibility of the project rests on the acceptance of governments and consortia of financiers that the opportunity cost is a real source of income that factors into the realization of the project. It is clear that the concept of opportunity cost

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is new. However, the income to be earned from the use of PV-generated electricity instead of fossil fuel in oil-producing countries is real, and must be considered in order to identify the real income to be obtained from implementation of VLS-PV systems in desert locations. (C) LIMITED SCOPE This financial feasibility analysis has been specifically applied to Egypt. It can be adapted for the other sites identified in Part II, being the Middle East, the Thar Desert in India and the Gobi Desert in China. (D) TAXATION AGREEMENTS Scenario II provides for an agreement with the Egyptian Government that, during the first 10 years of the project, it will be exempt from property taxes. There are no tax concessions included in Scenario I. In any case, formal tax agreements must be negotiated with the Egyptian authorities. (E) THE KWH PRICE The kWh price used in the model is based on the fact that most electricity consumers in Egypt, approximately 80 %, are industrial. The kWh price for the industrial consumer is 12,20 EUR for over 1 000 kWh consumed per month. The lower price accounts for the fact that, in Egypt, the national electricity distribution company, EEA, makes a net operating loss due to the lower prices. It is anticipated that EEA will not accept a price higher than 0,07 EUR for new sources of electricity delivered to their grid. (F) GREEN ENERGY PROGRAMME 753

The project could be more financially attractive were the Egyptian Government to implement a green energy programme. A green energy programme would assess a premium in the form of higher electricity prices for industries producing significant levels of greenhouse gases. This may be an attractive programme for the Government since it is an oil-producing country. This issue would have to be discussed further with Egyptian Government officials. 12.3.4 Conclusions and recommendations From the pre-feasibility study executed by the Netherlands Forum VLS-PV, it was concluded that a 100 MW plant may be economically attractive in an oil-exporting country such as Egypt. This conclusion depends heavily on the assumptions for interest rates and inflation and on the value of green certificates and the value of opportunity costs. Discussions with utilities and local actors in Egypt and other oil-exporting countries with deserts are necessary to confirm these claimed values. It is therefore recommended to make a full-scale feasibility study for an R&D project and a 100 MW demonstration plant. This feasibility study should identify targets and location, and fully secure funding sources and electricity outlets for both stages. Without funding identified and secured for the 100 MW demonstration plant, the R&D stage should not be implemented. References

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1 Greenpeace and European Photovoltaic Industry Association, Solar Generation – Solar Electricity for Over 1 Billion People and 2 Billion Jobs by 2020, 2001. 2 National Bureau of Statistics, People’s Republic of China, China Statistical Yearbook 1999, China Statistics Press, 1999. 3 T. M. Bruton, et al., ‘Recycling of high value, high energy content components of silicon PV modules’, 12th EU-PSEC, 1994. 4 T. Doi, et al., ‘Experimental study on PV module recycling with organic solvent method’, 11th PVSEC, 1999. 5 J. R. Bohland, et al., ‘Possibility of recycling of silicon PV modules’, 26th IEEE PVSC, 1997. 6 K. Wambach, ‘Recycling of PV modules’, 2nd WCPEC, 1998. 7 L. Frisson, et al., ‘Cost-effective recycling of PV modules and the impact on environment, life cycle, energy payback time and cost’, 2nd WCPEC, 1998. 8 L. Frisson, et al., ‘Recent improvements in industrial PV module recycling’, 16th EU-PSEC, 2000. 9 J. R. Bohland, et al., ‘Economic recycling of CdTe photovoltaic modules’, 26th IEEE PVSC, 1997. 10 J. R. Bohland, et al., ‘Photovoltaics as hazardous materials: the recycling’, 2nd WCPEC, 1998. 11 R. E. Goozner, et al., ‘A process to recycle thin film PV materials’, 26th IEEE PVSC, 1997.

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12 S. Menezes, ‘Non-destructive approach for recycling of CuInSe2 and related PV modules’, 2nd WCPEC, 1998. 13 S. Menezes, ‘Closed-loop approach for recycling CdTe PV modules’, 17th EU-PSEC, 2001. 14 International Energy Agency, Experience Curves for Energy Technology Policy, 2000. 15 K. Kurokawa, et al., ‘Case studies of large-scale PV systems distributed around desert areas of the world’, International PVSEC-9, Miyazaki, November 1996. 16 K. Kurokawa, et al., ‘Case studies of large-scale PV systems distributed throughout desert areas of the world’, International Workshop on VLS-PV Systems, PVTEC, Tokyo, March 1997. 17 K. Ente, Feasibility Study for Financing of Very Large-Scale Photovoltaic Systems, a study for the Netherlands Forum VLS-PV, April 2001. 18 PVPS Task VI/Subtask 50, A Preliminary Analysis of Very Large-Scale Photovoltaic Power Generation (VLS-PV) Systems, IEA-PVPS VI-5 1999:1, 1999. 19 IEA, World Trends Report 2000. 20 Energy Information Administration, Cost and Quality of Fuels for Electric Utility Plant, 1999, 10. 21 Energy Systems Inc., PV News, 2002, 21(3). Appendix (A) Investment and cashflow for a 100 MW plant in Egypt, Scenario I (1 000 EUR) 756

(B) Investment and cashflow for a 100 MW plant in Egypt, Scenario II (1 000 EUR)

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Figure 12.22 Break-even periods (Case B, electricity selling price = 7 US cents/kWh) 758

Figure 12.27 Cumulative expense and income of VLS-PV (irradiation = 2 800 kWh·m−2·y−1, interest rate = 2 %/year, electricity selling price = 10 US cents/kWh)

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Chapter Thirteen 13. Recommendations

13.1 Introduction As an overall conclusion of this work, recommendations are given here to realize long-term targets based upon the results of the studies performed in the IEA Task VIII. Recommendations are described considering the following stakeholders: • • • • • •

the general public decision-makers in PV industrialized countries decision-makers in developing countries decision-makers in oil-exporting countries financial institutions and banks PV industry associations and multinational industries • the academic community and specialist networks • power utilities • International Energy Agency The adoption of VLS-PV will require four steps, as shown in Figure 13.1:

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Figure 13.1 Flowchart for recommendations 1. Absorbing the concept of VLS-PV in a desert environment 2. Considering a long-term scenario approach 3. Positioning yourself in terms of your strategy 4. Making an action plan and allocating resources In this report, concrete information on VLS-PV is given, so the first two steps can be taken into consideration. The generalized understandings and recommendations on a policy level give direction to those who consider the adoption process. To support those willing to consider

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the third and fourth steps in Figure 13.1, an initial checklist is given in Section 13.4. 13.2 General Understandings Based on this report, the stakeholders listed above may recognize the following valuable findings: VLS-PV can contribute substantially to global energy needs • The world’s deserts are so large that covering 50 % of them with PV units would generate 18 times the primary energy supply of 1995. • All global energy scenarios project solar PV energy to develop into a multi-gigawatt energy generation option in the first half of this century. VLS-PV can become economically and technologically feasible • Electricity generation costs are between 0,09 and 0,11 USD/kWh, depending mainly on annual irradiation levels (with module price 2 USD/W, interest rate 3 %, salvage value rate 10 %, depreciation period 30 years). These costs can come down by a factor of 2–3 by the year 2010. • The PV technology is maturing with increasing conversion efficiencies and decreasing prices per watt; projected prices of 1,5 USD/W around the year 2010 would enable profitable investment and operation for a 100 MW PV plant.

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• Solar irradiation databases now contain detailed information on irradiation in most of the world’s deserts. VLS-PV can contribute considerably to the environment • The life-cycle CO2 emission is as low as 13 g-C/ kWh; this is due mainly to the module production and the array support. This should be compared with the value of 200 g-C/kWh for just the fuel component of conventional fossil-burning power plants. • The environmental issues for which VLS-PV may provide a solution are global warming, regional desertification and local land degradation. VLS-PV can contribute considerably to socio-economic development • Plant layouts and introduction scenarios are available in preliminary versions. I/O analysis concluded that 25 000–30 000 man-years of local jobs for PV module production will be created per 1 km2 of VLS-PV installed. VLS-PV development needs a long-term view and consistent policy • To reach the level of a 1 GW system, four intermediate stages are recommended: R&D stage, pilot stage, demonstration stage, and deployment (commercial) stage. From stage to stage, the system scale will rise from 2,5 MW to 1 GW, the module and system cost will go down by a factor of 4, and manufacturing will be shifted more and more to the local economy.

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• In the concept of sustainable local economic growth, the first local PV module manufacturing facility has an annual output of 5 MW. This local production provides for construction of the local VLS-PV system. In subsequent years, four more 5 MW module manufacturing facilities are brought into operation, so that annually 25 MW is supplied to the local VLS-PV system. After 10–15 years, a module production facility of 50 MW is put into operation. Every 10 years this facility will be replaced by a more modernized one. Thus, after approximately 40 years, a 1,5 GW VLS-PV power station will be in operation, and the local manufacturing facility will supply for replacement only. In this way, local employment, and thus the economy, will grow sustainably • To realize the final commercial stage, a view to financing distribution has been developed for all of the three previous stages, consisting of direct subsidies, soft loans, equity, duty reduction, green certificates and tax advantages. It is clear that direct subsidies will play an important role in the first stage. 13.3 Recommendations on a Policy Level From the global energy situation, global warming and other environmental issues, as well as from the case studies and scenarios, it can be concluded that VLS-PV systems will have a positive impact. To secure that contribution, a long-term scenario (10–15 years) on technological, organizational and financial issues will be

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necessary. Action now is necessary to unveil the giant potential of VLS-PV in deserts. In such action, involvement of many actors is welcome. In particular, the following are recommended on a policy level: • National governments and multinational institutions adopt VLS-PV in desert areas as a viable energy generation option in global, regional and local energy scenarios. • The IEA PVPS community continues Task VIII for expanding the study, refining the R&D and pilot stages, involving the participation by desert experts and financial experts, and collecting further feedback information from existing PV plants. • Multilateral and national governments of industrialized countries provide financing to generate feasibility studies in many desert areas around the world and to implement the pilot and demonstration phases. • Desert-bound countries (re-)evaluate their deserts not as potential problem areas but as vast and profitable (future) resources for sustainable energy production. The positive influence on local economic growth, regional anti-desertification and global warming should be recognized. 13.4 Checklist for Specific Stakeholders To decision-makers in industrialized countries

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You obviously have a long-term view of the world energy market trends and the need to provide a national energy outlook. • Have you considered the future possibility of VLS-PV for your industries, which may become major enterprises controlling the world energy market? • Do you have a step-by-step plan for R&D to make good use of the extensive capabilities in photovoltaic technology when the world energy problem arrives? • Do you have a view to initiate, continue and extend bi- or multilateral international collaboration with those developing countries which have abundant solar energy? • Do you have funds available for R&D or pilot programmes with training courses to introduce PV technology into developing regions, especially around deserts as a first stage of a consistent step-by-step approach? • Do you have strategies in place to maintain regional sustainability and to consider a moderate technology transfer scenario when planning the further development of developing countries? • Have you considered using your influence to mobilize multilateral institutions to stimulate VLS-PV? To decision-makers in developing countries

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You obviously are aware of the coming world energy problem in 20–30 years. • Did you include solar PV energy as one of the most favourable renewable energy options when national master plans for energy supplies were discussed? • Have you considered the opportunity that your country will be able to export PV energy to neighbouring regions and that new jobs will be brought to your people? • Are you aware of the fact that PV technology has already proven itself to be a cost-competitive energy source for rural electrification and is still being improved very rapidly? In particular, are you aware that it is especially effective for stabilizing rural lives? • Have you considered a regional development plan that utilizes abundant electricity production and vast lands? • Have you settled on a step-by-step, long-term approach that starts with solar home systems or mini-grids as the first stage and finally reaches VLS-PV in 20–30 years? • Do you have a plan to cultivate and gradually raise a domestic PV specialists’ society from an early stage to a developed stage? • Have you already asked for support from the variety of financial institutions you can utilize? To decision-makers in oil-exporting countries

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You are obviously aware of the fact that many oil-exporting countries around desert areas also have an everlasting natural resource: solar energy. • Are you aware that you can export PV energy to neighbouring regions as well? • Do you know that PV technology has already been proven as a cost-competitive energy source for rural electrification and is still being improved rapidly? • Did you develop a long-term view of the future world energy market and your strategy including the new level of photovoltaic power plants and industries? Are you aware that it will bring you opportunities for high-tech industries and new jobs? • Can you confirm the study results that a 100 MW PV power plant will be economically attractive in an oil-exporting country? Have you discovered good conditions in interest rates, the value of green certificates and the value of opportunity benefits from oil-savings? • Have you decided to invest in the development of the world photovoltaic business? • Did you choose an appropriate scale for starting towards VLS-PV? To financing institutions and banks You are presumably aware of the fact that the market potential for VLS-PV amounts to 2 billion people worldwide.

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• Are you aware of the Task VIII study results that show the size of indicative investment levels for the 100 MW demonstration stage and the 1 GW deployment stage corresponds to 500 and 4 000 MUSD respectively? Do you consider this much different from the magnitude of hydropower or infrastructure projects in a budgetary sense? • Do you respect the following funding scenario study for a 100 MW demonstration stage and a 1 GW deployment stage? They are economically attractive in some cases, assuming that 30–65 % of total investment is met by soft loans with 4 % interest. Another portion is expected to come partially from subsidy, equity, tax reduction, etc. • Can you positively support a full-scale feasibility study for a pilot project and for a 100 MW demonstration plant as a continuation of the Task VIII? This will identify targets and locations and will secure the funding sources and electricity outlets for both stages. • Can you support the pilot stage and the 100 MW demonstration stage according to the results of this study? • Could you consider a low-interest soft loan on a long-term basis for the initiation of VLS-PV system projects around desert areas? To PV industry associations and multinational industries You are obviously aware of possibilities for future market growth.

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• Are you aware of the future possibility of VLS-PV for PV industries? They may become major enterprises controlling the world energy market. • Are you confident that the photovoltaic technology and market will become competitive on a worldwide level within 20 years? • Can you ensure that the prices for solar PV energy will be reduced by a factor of a half to a quarter within the next decade? • Can you support and invest in local industries to take off according to the technology transfer scenario? To PV specialists and the academic community You know that fundamental research will generate new seed technologies for VLS-PV. • Can you confirm expected directions such as very high-efficiency PV cells, high-concentration optics, organic polymer PV cells, chemical energy transportation media like hydrogen or methanol, superconducting power transmission and so on? • Did you formulate and assist a PV specialist society in developing countries in co-operation with top leaders in those countries? • Will you join our continuing work, seeking the realization of VLS-PV systems? Expected work items may include more precise case studies for specific sites and funding, proposals for R&D co-operation plans, other possibilities in 770

technological variety, resource additional value analysis and so on.

evaluation,

To power utilities You have clearly recognized that the world energy market structure will change very drastically in the near future. • Can you confirm business opportunities in photovoltaics within the next decades? • Can you confirm that a power transmission scenario is possible according to our study results? Additional tie- line construction of less than 100 km, for connecting VLS-PV through existing national power grids to a load centre, will raise the electricity price by less than 1 US cent/kWh. One example is a transmission operation in co-operation with coal-burning power stations located on a colliery. • • Are you ready to invest in photovoltaic industries and foster technological societies with a long-term view for the future world energy market? To the International Energy Agency You are clearly aware that the diversification of energy resources and the development of alternative energy are essential for overcoming the world energy problems within the next decades.

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• Can you confirm our view that solar PV energy is one of the most favourable options for future electricity production? • Can you confirm your continuous support of the IEA PVPS Implementing Agreement on the basis of the long-term world energy outlook? • Would you support our idea about multilateral activities between IEA member countries and developing countries? • Can you organize the higher level of IEA PVPS activities including demonstration projects for VLS-PV? • Do you want to support a full-scale feasibility study corresponding to a pilot project and a 100 MW demonstration plant? This will identify targets and location, and fully secure funding sources and electricity outlets for both stages. • Can you support and enhance the continuing work in the IEA PVPS Task VIII? Expected work items are to be: • more precise case studies for specific sites including detailed local conditions and funding sources as well as demand application • proposals for the first or second stage of co-operation plans to be submitted to financial institutions • comprehensive evaluation of other possibilities of a technological variety such as tracking, concentrator and advanced PV cells • resource evaluation of VLS-PV by means of remote sensing technology

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• investigation of additional effects of VLS-PV on the global environment such as global warming and desertification • expansion of evaluating approaches to other types of PV mass applications in the 21st century, including value analysis in the economy, environment, socio-economy and others.

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