Renewables 2021

Analysis and forecast to 2026

Renewables 2021 is the IEA’s primary analysis on the sector, based on current policies and market developments. It forecasts the deployment of renewable energy technologies in electricity, transport and heat to 2026 while also exploring key challenges to the industry and identifying barriers to faster growth.

Renewables are the backbone of any energy transition to achieve net zero. As the world increasingly shifts away from carbon emitting fossil fuels, understanding the current role renewables play in the decarbonisation of multiple sectors is key to ensuring a smooth pathway to net zero.

While renewables continued to be deployed at a strong pace during the Covid-19 crisis, they face new opportunities and challenges. This year’s report frames current policy and market dynamics while placing the recent rise in energy and commodities prices in context. In addition to providing detailed market analysis and forecasts, Renewables 2021 also explores trends to watch including storage, producing hydrogen from renewable electricity, stimulus packages, aviation biofuels and residential heating.

Executive summary

Improved policies and COP26 climate goals are set to propel renewable electricity growth to new heights

Additions of renewable power capacity are on track to set yet another annual record in 2021, driven by solar PV. Almost 290gigawatts (GW) of new renewable power will be commissioned this year, which is 3% higher than 2020’s already exceptional growth. Solar PV alone accounts for more than half of all renewable power expansion in 2021, followed by wind and hydropower.

The growth of renewable capacity is forecast to accelerate in the next five years, accounting for almost 95% of the increase in global power capacity through 2026. We have revised up our forecast from a year earlier, as stronger policy support and ambitious climate targets announced for COP26 outweigh the current record commodity prices that have increased the costs of building new wind and solar PV installations. Globally, renewable electricity capacity is forecast to increase by over 60% between 2020 and 2026, reaching more than 4 800 GW. This is equivalent to the current global power capacity of fossil fuels and nuclear combined. Overall, China remains the leader over the next five years, accounting for 43% of global renewable capacity growth, followed by Europe, the United States and India. These four markets alone account for 80% of renewable capacity expansion worldwide.

China and the European Union are set to overshoot their current targets, setting the stage for a more ambitious growth trajectory. China’s commitment to reach carbon neutrality before 2060 has led to new nearer-term targets, such as 1 200 GW of total wind and solar PV capacity by 2030. We forecast that China will reach this target four years early thanks to the availability of long-term contracts, improved grid integration, and the cost competitiveness of onshore wind and solar PV compared with coal generation in many provinces. The trajectory of renewable capacity growth over the 2021-26 period indicates that renewable power growth in the European Union as a whole is set to outpace what the current National Energy and Climate Plans (NECPs) envision for 2030. This trend supports the ambition of reaching the stronger targets being finalised under the “Fit for 55” programme. Rapid deployment is being driven by member countries implementing larger auction volumes, corporations contracting for more renewable electricity, and consumers continuing to install large amounts of solar panels.

Improving competitiveness, ambitious targets and policy support are putting renewable power on course for new highs in India and the United States. Relative to existing capacity, renewable power is growing faster in India than any other key market in the world, with new installations set to double over our forecast period compared with 2015-20. Solar PV is expected to lead the way, driven by competitive auctions aimed at achieving the government’s ambitious renewable power target of 500 GW by 2030. Over the 2021-26 period, the expansion of renewable capacity in the United States is 65% greater than in the previous five years. This is the combined result of the economic attractiveness of wind and solar PV, increased ambition at the federal level, the extension of federal tax credits in December 2020, a growing market for corporate power purchase agreements, and growing support for offshore wind.

Despite rising prices, solar PV will set new records and wind will grow faster than over the previous five years

Even with surging commodity prices increasing manufacturing costs for solar PV, its capacity additions are forecast to grow by 17% in 2021. This will set a new annual record of almost 160 GW. Solar PV alone accounts for 60% of all renewable capacity additions, with almost 1 100 GW becoming operational over the forecast period in our main case, double the rate over the previous five years. In a significant majority of countries worldwide, utility-scale solar PV is the least costly option for adding new electricity capacity, especially amid rising natural gas and coal prices. Utility-scale solar projects continue to provide over 60% of all solar PV additions worldwide. Meanwhile, policy initiatives in China, the European Union and India are boosting the deployment of commercial and residential PV projects.

Onshore wind additions through 2026 are set to be almost 25% higher on average than in the 2015-2020 period. Global onshore wind additions doubled in 2020, reaching an exceptional level of almost 110 GW. This was driven by an acceleration in China as developers rushed to complete projects before subsidies expired. While annual additions in the coming years are not expected to match 2020’s record, we forecast that they will average 75 GW per year over the 2021- 2026 period.

Total offshore wind capacity is forecast to more than triple by 2026. By then, offshore wind additions are expected to account for one-fifth of the global wind market, a major milestone. Global capacity additions of offshore wind are set to reach 21 GW by 2026, thanks to rapid expansion in new markets beyond Europe

and China. This includes large-scale projects that are expected to be commissioned in the United States, Chinese Taipei, Korea, Viet Nam, and Japan.

The expansion of dispatchable renewables is critical to support the integration of more wind and solar, but their growth is forecast to slow slightly. The expansion of hydropower, bioenergy, geothermal and concentrated solar power accounts for only 11% of renewable capacity expansion worldwide over our forecast period. Relatively higher costs, lack of policy support and limited remuneration of flexible and dispatchable renewables discourage their expansion.

Asia is set to overtake Europe as India and Indonesia lead renewed growth in global demand for biofuels

Following a historic decline last year amid global transport disruption, total biofuel demand is on course to surpass 2019 levels in 2021. In our main case, annual global demand for biofuels is set to grow by 28% by 2026, reaching 186 billion litres. The United States leads in volume increases, but much of this growth is a rebound from the drop caused by the pandemic. Asia accounts for almost 30% of new production over the forecast period, overtaking European biofuel production by 2026. This is thanks to strong domestic policies, growing liquid fuel demand and export-driven production. Recent Indian ethanol policies and blending targets for biodiesel in Indonesia and Malaysia are responsible for most of the growth in Asia. India is set to become the third largest market for ethanol demand worldwide by 2026.

Renewable heat has gained some policy momentum, but its market share is not set to increase significantly

Since the start of 2020, heat from renewable sources has benefited directly or indirectly from several policy developments, mostly in Europe. Under current policies, renewable heat consumption, excluding traditional uses of biomass, is expected to increase by one-quarter during the 2021-26 period. Its share of global heat consumption is only forecast to rise from 11% in 2020 to 13% in 2026. Fossil fuels are set to continue meeting much of the growing global demand for heat, leading to a 5% increase in heat-related CO2 emissions over our forecast period.

The lack of policy and financial incentives for renewable heat is preventing faster growth. Globally, more than one-third of heat consumption is not covered by any financial incentive for renewables, and more than half is not subject to any renewables-related regulatory measures. The fragmented nature of heat markets

and local characteristics of heat demand partly explain the limited national policy coverage. This makes greater collaboration with subnational actors necessary.

High commodity and energy prices bring significant uncertainties

Rising commodity, energy and shipping prices have increased the cost of producing and transporting solar PV modules, wind turbines and biofuels worldwide. Since the beginning of 2020, prices for PV-grade polysilicon more than quadrupled, steel has increased by 50%, aluminium by 80%, copper by 60%, and freight fees have risen six-fold. Compared with commodity prices in 2019, we estimate that investment costs for utility-scale solar PV and onshore wind are 25% higher. In addition, restrictive trade measures have brought additional price increases to solar PV modules and wind turbines in key markets such as the United States, India and the European Union.

Around 100 GW of contracted capacity risks being delayed by commodity price shocks. Equipment manufacturers, installers and developers are absorbing cost increases in different ways, with some sectors being more heavily affected than others. Smaller companies are more exposed because of their more limited finances. Higher prices for solar PV and wind plants pose a particular challenge for developers who won competitive auctions anticipating continuous reductions in equipment prices. If commodity prices remain high through 2022, three years of costs reductions for solar and five years for wind would be erased. The increased costs would require over USD 100 billion of additional investment to install the same amount of capacity. This is equivalent to increasing today’s annual global investment in renewable power capacity by about one-third.

But higher natural gas and coal prices have improved the competitiveness of wind and solar PV. For corporations, fixed-price renewable energy contracts serve as a hedge against higher spot prices for fossil fuel energy. For governments, higher electricity prices have not brought higher subsidies for wind and solar PV, as around 90% of all wind and PV projects have long-term fixed- price purchase agreements.

Rising prices are slowing biofuels’ growth by more than 3 percentage points in 2021 as polices changed in key markets. Compared with average 2019 prices prior to the Covid-19 crisis, biofuel prices had increased between 70% and 150% across the United States, Europe, Brazil and Indonesia by October 2021, depending on the market and fuel. In response, governments have lowered blending mandates in Argentina, Colombia, Indonesia and Brazil, reducing

demand. We estimate these actions have reduced demand by 5 billion litres in 2021 compared with a scenario in which mandates remained unchanged or were increased as planned.

Supported by the right policies, recovery spending on renewables could unleash a huge wave of private capital

Renewables – including electricity, heat, biofuels and biogas – account for just 11% of governments’ economic recovery spending on clean energy. Renewables are expected to receive USD 42 billion, led by solar PV and offshore wind. But greater public spending on renewable power could mobilise more than USD 400 billion of total investment. If appropriate enabling policies and regulatory frameworks were implemented, almost 400 GW of additional renewable projects – led by solar and wind — could be deployed over our forecast period, equal to the entire installed power capacity of the Middle East. However, the level of private sector contribution will depend on the effectiveness of the policies and implementation measures supporting the new investment.

Despite their important role in decarbonising key sectors, biofuels and biogas were allocated less than USD 5.5 billion of government economic recovery spending. Renewable heat technologies also saw a limited public funding. Both industries would strongly benefit from enhanced recovery stimulus programmes.

Faster growth of renewables is within reach but requires addressing persistent challenges

Governments need to address four main barriers to accelerate renewables deployment. For wind and solar PV projects in advanced economies, various challenges to permitting and grid integration have led to lower-than-planned capacity being awarded in government auctions. In emerging and developing economies, stop-and-go policies, the lack of grid availability and risks concerning off-takers’ financial health are hurting investor confidence, resulting in elevated financing rates. Lack of remuneration and targeted policy support for flexibility are an issue in all countries. In addition, challenges concerning social acceptance of wind and hydropower projects caused an increasing number of countries to delay or cancel planned projects.

In our accelerated case, annual renewable capacity additions in the next five years could be one-quarter higher than in our main case, reaching more than 380 GW per year on average. Our accelerated case assumes that governments

address the above-mentioned policy, regulatory and implementation challenges in the next 12-24 months. Moreover, the stabilisation and eventual decline of commodity prices and increasing volumes of affordable financing from the private sector all contribute to the accelerated growth of renewable electricity capacity.

Biofuels demand growth could more than double between 2021-2026 in our accelerated case. Increasing biofuel demand and production hinges on stronger policies that address cost, sustainability and technical limitations. India, the European Union, the United States, China and other countries are all considering or implementing strengthened biofuels policies. However, relatively higher cost of biofuels compared with gasoline or diesel in most markets remain a key challenge, limiting policy ambition or how well biofuels compete with other emission reduction technologies. Uncertainty over the availability of sustainable feedstocks and technical constraints are also important barriers.

Renewables’ penetration in to hard-to-decarbonise sectors is slowly emerging and promises a bright future

Policy momentum supporting the production of hydrogen from renewables and biojet has stimulated a large number of projects. If realised, planned projects indicate that global electrolyser capacity for hydrogen could stimulate the deployment of 18 GW of additional wind and solar PV capacity in the 2021-2026 period. While this would account for only 1% of forecast growth of renewables in our main case, the fulfilment of the entire announced electrolyser capacity pipeline could bring an additional 475 GW of wind and solar PV capacity in the longer term, the equivalent of one-third of total installed variable renewable capacity today.

Biojet technology is ready to fly but policies to stimulate demand lag behind.

Global biojet demand is set to range from 2 billion to 6 billion litres by 2026 in our main and accelerated cases. The success of biofuels mainly depends on policy discussions in the United States, Europe and potentially China. Given the low absolute volumes proposed, feedstock sustainability will likely not prove a constraint over the next five years. However, increasing the diversity of feedstock supply from waste remains critical to achieve rapid expansion in the medium-term.

Renewables need to grow faster than our forecasts to close the gap with a pathway to net zero by 2050

Globally, annual renewable power capacity additions through 2026 in the IEA’s Net Zero Emissions by 2050 Scenario are 80% higher than in our main

case. For solar PV and wind, average annual additions would need to be almost double what we see in our main case forecast over the next five years.

For biofuels, annual demand growth needs to quadruple. To align with the Net Zero Emissions by 2050 Scenario, countries would need to implement existing and planned policies while also strengthening them before 2026. These policies must ensure that biofuels are produced sustainably and avoid negative impacts on biodiversity, freshwater systems, food prices and food availability. Policies must also incentivise greenhouse gas reductions, not just biofuel demand. For net zero by 2050, renewable heat demand growth needs to almost triple from the main case.

To get renewables on track with net zero by 2050, governments not only need to address current policy and implementation challenges but also increase ambition for all renewable energy uses. Governments can build on the momentum of competitive solar and wind, but they must also significantly strengthen their policy focus on dispatchable renewable electricity and renewable energy use in buildings, industry and transport. Governments should also consider targeting much more economic recovery spending on renewables while also putting in place policies and regulations enabling higher mobilisation of private capital.

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Granular Time of Day Analysis of Balancing the Indian Electricity Grid in 2030 – CSEP

Model and Analysis

  • India has very aggressive plans for scaling RE (450 GW by 2030; today is 100 GW)
  • Using 2019 time of day (ToD) data for both demand and supply by fuel type, what happens over time (2021-2030) for the system (national level) under different assumptions of rising RE? Will the RE be enough to avoid new coal?
     Will there be a risk of “too much” RE (that might be curtailed)? What will be least cost options for the system?
     How should we think of batteries?
     What are the key choices and points of uncertainty that matter?  etc.
  • This is a simplified despatch model but using real 2019 ToD data all-India
  • The focus is on insights and trends – and what factors matter

Unique features of this study/model

  • Parametric analysis with 30-minute resolution
  • Future RE is modeled VERY differently and explicitly Different shapes of outputs
    Different shares of wind vs. solar
  • Segregate capacity and energy for battery
  • Most studies assume “4-hour battery”, i.e., $200/kWh = 0.25 kW output for 4 hours
  • Some studies use LCOE for battery operating like a fuel

• Use varying escalation rates across capital, fuel, forex, interest, etc. (thus, not a simple LCOE)

All RE isn’t the same

• Solar and wind dominate, esp. the growth – 450 GW target by 2030 could be 420 GW solar and wind (per CEA, also projects 2:1 ratio)

• Solar is diurnal variance, less seasonal variance than wind  But wind provides more output during evening peak

• Solar is less expensive on an levelized cost of energy (LCOE) basis
Solar has a lower Capacity Utilization Factor aka Plant Load Factor than wind

New growth may be 27% and 36+%, respectively
That excludes rooftop, which remains low PLFs (and is “negative demand”)page9image35490032page9image35490656

• Big Unknown – shape of RE growth over the years (CAGR, linear, etc.)?

 Model assumes exponential/CAGR
Practical but it also reflects today’s reality in energy terms:

Growth of RE < Growth of Demand (energy basis)

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Impact of Component Reliability on Large Scale Photovoltaic Systems’ Performance

Abstract: In this work, the impact of component reliability on large scale photovoltaic (PV) systems’ performance is demonstrated. The analysis is largely based on an extensive field-derived dataset of failure rates of operation ranging from three to five years, derived from different large-scale PV systems. Major system components, such as transformers, are also included, which are shown to have a significant impact on the overall energy lost due to failures. A Fault Tree Analysis (FTA) is used to estimate the impact on reliability and availability for two inverter configurations. A Failure Mode and Effects Analysis (FMEA) is employed to rank failures in different subsystems with regards to occurrence and severity. Estimation of energy losses (EL) is realised based on actual failure probabilities. It is found that the key contributions to reduced energy yield are the extended repair periods of the transformer and the inverter. The very small number of transformer issues (less than 1%) causes disproportionate EL due to the long lead times for a replacement device. Transformer and inverter issues account for about 2/3 of total EL in large scale PV systems (LSPVSs). An optimised monitoring strategy is proposed in order to reduce repair times for the transformer and its contribution to EL.

Keywords: ; reliability; real data; energy yield; fault tree analysis; failure mode and effect analysis; availability; failure rates

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Rebooting Renewable Energy Certificates for a Balanced Energy Transition in India

India sought after for green energy agreements, says renewables secretary -  The Economic Times

CEEW Centre for Energy Finance
The CEEW Centre for Energy Finance (CEEW-CEF) is an initiative of the Council on Energy, Environment and Water (CEEW), one of Asia’s leading think tanks. CEEW-CEF acts as a non-partisan market observer and driver that monitors, develops, tests, and deploys financial solutions to advance the energy transition. It aims to help deepen markets, increase transparency, and attract capital in clean energy sectors in emerging economies. It achieves this by comprehensively tracking, interpreting, and responding to developments in the energy markets while also bridging gaps between governments, industry, and financiers.

The need for enabling an efficient and timely energy transition is growing in emerging economies. In response, CEEWCEF focuses on developing fit-for-purpose market-responsive financial products. A robust energy transition requires deep markets, which need continuous monitoring, support, and course correction. By designing financial solutions and providing near-real-time analysis of current and emerging clean energy markets, CEEW-CEF builds confidence and coherence among key actors, reduces information asymmetry, and bridges the financial gap.

Financing the energy transition in emerging economies
The clean energy transition is gaining momentum across the world with cumulative renewable energy installation crossing 1000 GW in 2018. Several emerging markets see renewable energy markets of significant scale. However, these markets are young and prone to challenges that could inhibit or reverse the recent advances. Emerging economies lack well-functioning markets. That makes investment in clean technologies risky and prevents capital from flowing from where it is in surplus to regions where it is most needed. CEEW-CEF addresses the urgent need for increasing the flow and affordability of private capital into clean energy markets in emerging economies.

CEEW-CEF’s focus: analysis and solutions
CEEW-CEF has a twin focus on markets and solutions. CEEW-CEF’s market analysis covers energy transition–related sectors on both the supply side (solar, wind, energy storage) and demand-side (electric vehicles, distributed renewable energy applications). It creates open-source data sets, salient and timely analysis, and market trend studies. CEEW-CEF’s solution-focused work will enable the flow of new and more affordable capital into clean energy sectors. These solutions will be designed to address specific market risks that block capital flows. These will include designing, implementation support, and evaluation of policy instruments, insurance products, and incubation funds.

Renewable energy certificates (RECs) are market-based instruments that allow the unbundling of green power into two products – a green attribute that can be traded in the form of certificates and the commodity itself, i.e., electricity (CERC 2010). Since their launch a decade
ago, RECs worth an aggregate INR 9,266 crore (USD 1.24 billion1 ) have been sold on India’s two power exchanges.

RECs play an important supporting and balancing role in India’s energy markets, but insufficient demand has plagued them to varying degrees. Although down from a peak of 18.6 million in October 2017, the December 2020 closing balance of 5.1 million unutilised RECs still
points to a seven per cent shortfall in demand. Although 99 per cent of REC purchases on power exchanges are done to meet renewable purchase obligations (RPOs), organisations in India, including state discoms, are far from being RPO compliant. In addition, purchases for voluntary reasons are negligible.

The private sector responded enthusiastically. Tenders for new capacity were oversubscribed and record-setting low tariff levels were achieved both during the lockdown (Mint 2020a) as well as afterwards, when the economy gradually opened up (Mint 2020b). Investors also voted
with their wallets, driving up the share prices of RE developers (CEEW-CEF 2020), mirroring a trend seen globally. At the global level, 2020 also saw green bonds cross the USD 1 trillion “cumulative issuances since inception” milestone (BloombergNEF 2020).

Figure 1 RECs issued per financial year vs end-use

floor price reduction (Prateek 2018), the current trading suspension has carried on for much longer. RECs faced other bumps on the road in 2020. Take the revocation of 3.6 million RECs in August, the first such instance since their launch a decade ago. It is important to note that these RECs were not revoked because they had expired, but rather because it was determined that they had been erroneously issued in the first place and the revocation was undertaken to rectify the error (APTEL 2020). More generally, and to allay fears of inventory loss, CERC exercises its power under clause 15 of the REC regulations and extended the validity of RECs
from time to time. For example, recently the validity of RECs which expired or were due to expire between April 01, 2020, and September 30, 2020, were extended up to October 31, 2020 (CERC 2020).

As a result, to date, there has never been a revocation of RECs due to lifespan expiry. However, this should not be misconstrued as an indication of robust demand for RECs. This is apparent from the 5.1 million RECs that remained unsold and unconsumed (closing balance) as of December 2020 as shown in Figure 1. Insufficient demand, as represented by the quantum of unconsumed RECs in the closing balance, has plagued this instrument to varying degrees ever since its inception. Although down from a peak of 18.6 million in October 2017, the December 2020 closing balance still points to a 7 per cent shortfall in demand.

Origin of RECs
RECs were conceived as instruments that would allow the separation of the green attributes of RE from the underlying electricity generated. They act as a bridge between those generating RE and those not in a position to procure sufficient amounts of RE even though they may wish to do so for either voluntary or compliance reasons. Their origin can be traced to regulatory evolution, which commenced a little over 15 years ago, and which had a wide-ranging impact on the Indian power sector.

Each REC issued corresponds to 1 MWh, or 1,000 kWh, of electricity injected into the grid. Depending on the generating source, there are two types of RECs –solar and non-solar. Power System Operation Corporation (POSOCO) is the REC issuing authority, and as depicted in Figure 2, RECs may be issued to two categories of eligible entities, discoms and RE generators, each with some qualifications. Once issued, sale on the exchange and self-consumption are the only two ways they may be put to use. Further, RECs sold on the exchange must be priced in between the specified floor and forbearance (ceiling) prices, both of which have undergone several downward revisions over the years.

Figure 2 RECs issuance source vs end-use

The four key takeaways that follow from Figure 2 are summarised below

An INR 9,266 crore (USD 1.24 billion) market

An aggregate of 59.5 million RECs worth INR 9,266 crore5 (USD 1.24 billion) have been sold on the two power exchanges in the time since they were launched in 2010. Breaking the volume into respective financial years reveals a general upward trend as shown in Figure 3 The sharp peak in volumes recorded in FY18 was a result of buyers taking advantage of a reduction in the REC floor price. The decline in volumes post-FY18 was perhaps inevitable given the significant quantum that was cleared in FY18. However, reduced as they were, the FY19 and FY20 numbers remained consistent with the linear trend line for REC volume growth. The dismal volumes recorded till date in FY21 are of course an altogether different matter, being the result of the ongoing suspension of REC trading, which has carried on for more than six months now.

Figure 3 INR 9,266 crore (USD 1.24 billion) generated via the sale of RECs on power exchanges

It is hoped that stricter penalties envisaged in the draft Electricity (Amendment) Bill, 2020, will push discoms towards RPO compliance. But to what extent is it possible for them to do so via REC purchase? The short answer is that there just is not enough supply in the market for that to happen. As Figure 4 demonstrates, bridging the FY20 RPO shortfall of 27 RPO undercompliant states alone would exceed all the RECs issued in the previous decade.

Figure 4 Discom demand shortfall

RECs and international relevance: CERs

Market based mechanisms and instruments are not unique to India, and 2021 is poised to be a pivotal year in charting the way forward for certain instruments that straddle the international arena. Specifically, a broad consensus exists on some key issues that need addressing at the 26th United Nations Climate Change Conference (COP26) which is slated to be held in Glasgow in November 2021. Among them is Article 6 of the Paris Agreement, which deals with voluntary
international cooperation in the implementation of nationally determined contributions (NDCs), including via market mechanisms that mitigate greenhouse gas emissions.

While RECs were never meant to be mainstays of the energy transition, they remain important supporting instruments that act as a balancing force in India’s energy transition. And with the aggregate value of RECs traded on power exchanges estimated to be INR 9,266 crore (USD 1.24 billion), their scale is not trivial. Moreover, India’s RE ambitions for the next decade far exceed anything seen or even thought of in the previous one. As such, the stakes are that much higher for even supporting instruments such as RECs. Under the circumstances, positioning them to reflect the fundamental changes that the RE ecosystem has undergone in the past decade, and preparing them for the even more dramatic changes that lie ahead, is not
just desirable, but imperative.

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Wind energy: A gender perspective

Ahead of their time: How a close-knit business community sparked India's  energy transition

The expansion of renewable energy promises a broad array of benefits. That renewables are
good for energy security, air quality and health, and the reduction of greenhouse gas emissions is well known. What many do not realise, however, is that the renewable energy transition can boost economic development and create jobs. Global employment in the
renewable energy sector grew by nearly 4 million jobs in six years – from 7.1 million in 2012 to 11 million in 2018 (IRENA, 2019a). Renewable energy is creating jobs as fossil fuel industries are shedding them due to rising automation in extraction, overcapacity, consolidation, regional
shifts, and the substitution of coal by natural gas in the power sector. IRENA’s socio-economic footprint analysis estimates that employment in renewables will almost triple to 42 million in 2050.

The importance of gender equality
Women have long been underrepresented in conventional energy industries such as coal, oil and gas, whether in exploration and extraction activities or in running power-generating plants. All available information suggests that men outnumber women in most of these workplaces, and especially in technical, managerial and policy-making positions (Catalyst, 2019). Energy is still often seen as a man’s domain, where persistent cultural and social
norms sway hiring decisions. More prosaically, workplace disparities reflect educational pathways and recruitment networks that remain heavily male-oriented. The widespread perception that the energy field requires technical skills above all else, and that energy is
a “dirty” business, reinforce these patterns (Paraskova, 2017). Another factor is the relative scarcity of female role models in the sector, and inadequate mentoring and peer networks for women.

Gender in the context of sustainable development
Renewable energy, including wind power, enables the achievement of key social, economic and environmental objectives expressed in the Sustainable Development Goals (SDGs). The triangle of sustainable energy, jobs and gender objectives finds expression in three of the
17 SDGs: SDG 7 (access to modern, clean, and sustainable energy), SDG 5 (gender equality and empowerment), and SDG 8 (inclusive growth and decent work). They are closely interconnected. Achieving SDG 7 is indispensable to a vibrant, clean and inclusive economy.
The close interaction between the energy system and the broader economy implies a symbiotic relationship between SDGs 7 and 8. The gender objectives expressed in SDG 5 shape the way the energy industry and the economy at large function, aiming to make them

Figure 1.2: Distribution of survey respondents by region

The survey also asked participants to provide information about the segment of the value chain to which their activities belong, and the size of the organisation participating in the survey. Box 1.4 explains what is meant by segments of the value chain and defines two terms
– “roles” and “activities” – used throughout this report.

Segment of the value chain. Among replies on behalf of an organisation, 23% of responses received were from developer companies, followed by manufacturing firms (19%), service providers (16%) and operators (15%). “Other”2 was selected by 27% of the responders
(see Figure 1.3).

Figure 1.3: Distribution of survey respondents by segment of the value chain

70% of survey participants were women

of the organisation they work for represent a workforce of varying size. Naturally, replies from representatives of large companies or other entities have a significant impact on the overall results. Notably, however, the distribution of total employment by organisation size is unknown; whether the distribution in the survey sample matches that of the wind industry as a whole is therefore also not known.

Survey participation by women and men. Both women and men were invited to respond to all survey questions, but around 70% of respondents were women. This disparity mirrors participation in IRENA’s global renewable survey (IRENA, 2019b) and may serve as an indication that concern about gender issues in the wind sector is still driven by gender itself. The level of education of survey respondents was roughly the same for men and women.

Educational achievement. For individuals, additional questions enabled respondents to provide information about their gender and educational attainment and background, specifically in technical or non-technical fields. The composition of respondents according to
these various characteristics can influence survey results, as personal backgrounds and work experiences will colour perceptions of both problems and solutions. As Figure 1.5 on the distribution of educational status shows, 93% of respondents had a university degree, with over half of the total holding a master’s.

Figure 1.5: Distribution of survey individual
respondents by educational achievement

large numbers of such workers with limited or less specialised qualifications. The underrepresentation of lowerskilled employees can affect the analysis, both in the quantification of the share of women in the industry and in the qualitative analysis. In
fact, parts of the workforce that are less well represented may have very different workplace experiences and could therefore hold views very different from those of the rest of the sample.

Representation of lower-skilled employees in the survey
To assemble a meaningful sample, the survey captured a broad cross-section of organisations
and individuals in the wind energy sector. However, the self-selected nature of participation in an online survey may influence results in favour of people with a proactive interest in the topic, in this case mostly women with higher levels of education. An online survey, while convenient, may therefore unintentionally limit or exclude part of the population of interest, especially the lower-qualified segment of the workforce. Manufacturing workers on a factory floor or construction workers are difficult to reach, especially in remote project locations, unless an online survey is paired with workplace interviews co-ordinated with employers or labour unions.

As Figure 1.6 shows, personnel in management, STEM, and non-STEM functions (including engineers; technicians; experts in quality assurance, health, safety and environment; experts in law, regulation, standardisation and logistics; marketing personnel; financial analysts) account for about a third of the total labour required for a typical 50 MW onshore wind project. These are the types of employees who may be expected to participate most readily in an online survey. The remaining two-thirds of the labour required is in lower-skilled jobs (such as construction and factory workers). The views of people in these types of positions are far less likely to be reflected in the survey results. Similarly, for a typical 500 MW offshore wind farm, low-qualified individuals again represent the highest category (47%). STEM and non-STEM personnel together account for 41%.

Figure 1.6: Roles and skill requirements in onshore and offshore wind

Employment of women in the wind energy sector

This section opens with key findings from IRENA’s wind survey. A series of figures sketch
the sector’s gender landscape by region, activity, and organisational size. The next topic is major barriers to women’s entry, retention and advancement in the sector. The discussion of issues relating to pay inequities draws comparisons with IRENA’s earlier survey of the renewable energy sector as a whole. The section then turns to possible solutions. These include
networking and mentorship efforts; workplace practices, policies and regulations; and mainstreaming initiatives. It closes with examples of grassroots women’s initiatives in the field.

By activity. Developers and “other” activities along the wind value chain perform best in employing women. By contrast, female employment in equipment manufacturing is below
the 21% average for the wind energy sector (Figure 2.4). From the perspective of assessing not just the number of jobs but also their quality, this represents a challenge, given that manufacturing typically offers better-paying jobs than other segments of an industry (Mishel,

Figure 2.4: Shares of women in the wind energy sector, by activity

Figure 2.5 disaggregates the findings presented in Figure 2.4. For each major activity, it shows the share of women broken down by STEM, non-STEM but professional, administrative and management roles. Once again, administrative positions are where much higher proportions of women find employment. This is particularly the case among developers and in the “other” category. Repeating findings from IRENA’s survey of the entire renewable energy sector,
STEM-related positions also seem to have a significantly lower female presence than other professional jobs (IRENA, 2019b). Indicating an area where gender equality remains a remote ideal, the share of women is by far the lowest in senior management.

Figure 2.5: Shares of women by occupation in the wind energy sector, by activity

Barriers to female entry, retention and advancement in the wind workforce
Breaking down the barriers to women’s entry, retention and advancement in the wind workforce requires full awareness of the impediments. Overall, more than half (53%) of the respondents to IRENA’s wind sector survey stated that barriers do exist. But this average figure hides diverging answers. As was true when IRENA canvassed the entire renewable energy sector (IRENA, 2019b), men tended to see fewer genderrelated barriers than women did.

In fact, the replies were mirror opposites, with just one-third of men acknowledging the existence of barriers compared with twothirds of women (Figure 2.7). On a regional basis, respondents from Africa, Latin America and Caribbean, and Europe and North America (in that order) recognised gender barriers in greater numbers than those from Asia-Pacific.

Figure 2.7: Perceptions of gender-related barriers in the wind sector among women and men
Figure 2.8: Barriers to entry for women in wind energy, ranked by respondents in order of importance

Barriers to entry
The survey sought to assess the importance of barriers specific to job entry into the wind sector. Of individual respondents who replied that women do face barriers, a follow-up question was asked to rank specific impediments to entry according to their perceived importance (see Figure 2.8).

Barriers to retention and advancement
Once a woman is employed, her ability to stay in a given job and her opportunities for professional growth are shaped by several factors. Women face barriers to retention and advancement that men do not, especially during the childbearing years. Individuals participating in the survey raised several concerns related to the retention of women in the wind workforce (see Figure 2.9). Fairness and transparency in internal policies and processes were identified as the most relevant concerns, followed by some specific policies and working
practices that were felt to be lacking in many organisations.

Figure 2.9: Barriers to retention for women in wind energy, ranked by respondents in order of importance

Selected measures to address barriers
Measures to improve the gender balance depend on specific circumstances. Survey participants support the need to change the social and cultural norms that rule society. Attitudes generally do not change quickly. But organisations in the wind sector (whether
enterprises, industry associations, governmental agencies, non- or intergovernmental organisations, or others) can take steps that will accelerate change, including measures to ensure greater fairness and transparency in internalprocesses and policies to support a
better work-life balance.

In addition, many survey participants highlighted the need to support networking, mentoring, training and opportunities for sharing work experiences (see Figure 2.13). Internships and seminars were seen as less important or effective. These responses echo the results of IRENA’s
gender survey for the entirety of the renewable energy sector.

Figure 2.13: Measures needed to support women in wind energy

The path ahead

Advancing equality and diversity in the wind energy sector promises winners all around. It
establishes greater fairness in an industry critical to making energy use – and thus all economic activities – more sustainable. Women, after all, account for half the human population. That very fact indicates how great a gain the wind industry can expect if it taps into the female pool of talent, skills, and perspectives more fully.

Limitations of the survey
As noted in IRENA’s previous gender survey (IRENA, 2019b), online surveys can have several types of bias. However, as this survey was focused on one sector (wind), more is known about the population of interest (employees in the sector) than would be the case in a multisector study. Some of these biases were solved through weighting, by adjusting the responses to
reflect the distribution of different characteristics in the underlying population.

Table A.1 shows the distribution of known employment in the wind sector (IRENA, 2019a) across locations and compares it to the survey responses. Africa and Latin America and the Caribbean were over-represented in the responses of both organisations and individuals, while the Asia-Pacific region was under-represented. The share of responses from Europe and North America almost matched the share of employment in the combined region in the case of organisations, but the region was over-represented in the sample of individuals. To adjust for these differences, weights were used to calculate global averages so that they would more accurately reflect the regional distribution of employees in the sector.

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Advancing renewables in developing countries

seychelles | IRENA newsroom

The Abu Dhabi Fund for Development (ADFD) in 2013 undertook to support renewable energy
projects through a joint initiative with the International Renewable Energy Agency (IRENA). Through that facility, the fund has dispensed AED 1.285 billion (USD 350 million) over the course of seven cycles. In the first six cycles, ADFD has dedicated AED 900 million (USD 245 million) to fund 24 projects, benefitting 23 countries spanning different continents worldwide.

Six annual selection cycles of the IRENA/ADFD Project Facility were completed by January 2019, resulting in the allocation of USD 245 million by the Abu Dhabi Fund for Development (ADFD) to 24 selected projects. ADFD at the outset committed USD 350 million in the form of concessional loans for the implementation of renewable energy projects in developing countries. ADFD allocates funding to the projects based on an agreed evaluation and selection process, and the resulting recommendations issued by the International Renewable Energy Agency.

After announcing the selected projects in each cycle, IRENA connects the project proponents
and host government representatives with ADFD to jointly work through five main stages of implementation. IRENA additionally facilitates engagements between ADFD and the various
project teams to support communication and monitors the progress of projects and related
development impacts. Figure 1 shows the geographical distribution of ongoing projects.

Figure 1 Projects progressing from the first six selection cycles

The main post-selection stages are as follows:

  1. Preliminary loan offer, acceptance and onsite project appraisal.
  2. Agreement signing, ratification and loan declaration. This entails processing loan agreement and loan guarantee agreement, where applicable.
  3. Procurement of consulting engineers. Their role is to support the Project Implementation Unit (PIU) in final design and project oversight.
  4. Selection of Engineering Procurement and Construction (EPC) contractor(s).
  5. Construction and commissioning. This stage includes a sequence of disbursements to the project, as per milestones set by the PIU in consultation with ADFD.

Portfolio progress highlights
Overall portfolio implementation progress has improved compared to the previous year, with
more projects reaching the procurement and construction/installation phases.

Five projects are working through the procurement stages (Stages 3 and 4); another four are at various stages of loan agreement processing (Stage 2) and the remaining project is still at the preliminary loan offer stage (Stage 1) (see Figure 2).

Figure 2 Portfolio progress

Subsequent sections of this report provide updates on the progress of the projects at various critical milestones and list the challenges faced by each project to date.

Status of loan agreements
Thirteen of the 18 progressing projects now have signed loan agreements; 12 of those loan
agreements have been ratified and declared effective, paving the way for disbursements. The
loan agreements for a further four projects have been drafted and are expected to be signed in early 2020 The last project in the sixth cycle remains at the preliminary loan offer stage and has yet to reach loan agreement processing.

Figure 3 Status of loan agreement processing
Table 1 Status of projects currently (or soon to begin) generating electricity

Implementation and process improvements, 2014–2019
The IRENA/ADFD Project Facility has achieved notable successes in the six cycles by applying
the lessons learned along the way to improve the evaluation and selection process and facilitate project implementation. IRENA and ADFD continue to actively engage with project development teams to support the implementation process and bring the benefits of renewable energy to the developing world. Project advancement has also been facilitated by joint appraisal missions, together with periodic conference calls with project teams and follow-up missions to monitor and document progress.

Progress was made in 2019 in terms of increasing the proportion of projects completing implementation, with 44% of the portfolio reaching the construction stage, compared to 33% in 2018. Several projects began generating electricity, thereby providing renewable energy benefits to target communities. Loan agreement processing also advanced, with three additional projects signed in 2019 and five others under negotiation. Ongoing follow-up activities include an online progress tracking platform, which is being updated and re-deployed to provide project teams with the ability to issue regular reports on progress,
challenges and mitigation measures.

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Towards 100% renewable energy: Utilities in transition

Cities heading towards 100% renewable energy by controlling their  consumption | Energy Cities

The adoption of the United Nations’ 2030 Agenda for Sustainable Development, and in particular Sustainable Development Goal 7 (SDG7) to ensure access to affordable, reliable, sustainable and modern energy for all, has led to a global consensus around the need to substantially increase the share of renewable energy in the global energy mix. Renewable energy is key to sustainable development and will play a crucial role in advancing progress on various Sustainable Development Goals as well as the global climate objectives set out in the 2015 Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC; the Paris Agreement; IEA, IRENA, UNSD, WB, WHO, 2019).

Global status and trends
Building on its first global mapping of 100% renewable energy targets in 2018, the IRENA Coalition for Action, in a joint effort with several partners, has continued to identify and evaluate national and subnational targets. The updated overview of the global status on 100% renewable energy targets includes new targets announced in the past year as well as further details on the type of targets and their legal.

Mapping of 100% renewable energy targets – national level
In 2019, a total of 61 countries had set a 100% renewable energy target2 in at least one end-use sector, up from 60 countries in 2018. Geographically, these 61 countries are distributed as follows: Africa (19), Asia (15), Oceania (10), Central America and the Caribbean (8), Europe (7), and South America (2) (see Figure 1). Of the 61 countries, 14 countries have committed to reaching a 100% renewable energy target in at least one end-use sector by 2030 at the latest, two countries by 2040 and the others by 2050.

Figure 1. Geographical distribution of national 100% renewable energy targets

The mapping of targets shows a high commitment from countries in Africa, Asia and Oceania to achieve 100% renewable energy. Many of these targets were announced through the Marrakech Communique at COP22 (the 22nd Conference of the Parties to the UNFCCC) by countries that are most vulnerable to the effects of climate change, particularly least developed countries and small island states.

In 2019, the one country to revise its renewable energy ambitions to include a 100% renewable energy target was Portugal. The country announced a strategy for achieving 100% renewable electricity generation by 2050 in its Roadmap to Carbon Neutrality, adopted by the Portuguese government in July 2019. The transformation is expected to be achieved through large increases in solar photovoltaic (PV) deployment, building on the existing high shares of wind and hydropower, and coupled with improved energy efficiency to reduce overall electricity consumption.

Targets by sector
While some of the renewable energy targets have been clearly defined in terms of end-use sectors, other targets are broader in scope. In cases where the 100% renewable energy target has not been clearly defined, the category “RE – not specified” has been used in the mapping exercise. Of the countries included in the mapping, 42 fall into this category. In the case of targets that are wellspecified in terms of end-use sector, most are focused on 100% renewable electricity, with few countries having set targets for more than one sector. In fact, the mapping exercise identified 18 targets aiming for 100% renewable electricity. Two countries with a renewable electricity target (Austria and Denmark) have also adopted targets for 100% renewable energy in the transport sector, whereas two (Denmark and Lithuania) have set a target for 100% renewable energy in heating and cooling as well as electricity. Indonesia has thus far announced a 100% renewable energy target in the transport sector. Denmark remains the only country with a 100% renewable energy target that.

Figure 2. Overview of national 100% renewable energy targets, by end-use sector

Type of target/commitment
The degree to which a country’s political leaders and policy makers are held accountable for achieving 100% renewable energy targets depends on the context in which the commitment was made and established. The targets representing the highest level of commitment would usually be those established in national law and are thus legally binding. Other targets may be formally established in policy documents such as nationally adopted energy and climate plans, including the nationally determined contributions(NDCs) under the UNFCCC. Several targets have also taken the form of highlevel policy announcements by national governments or pledges under global initiatives (e.g., the Marrakech Communiqué) but have not been fully integrated into national plans or strategies to date. To provide a comprehensive overview, the mapping in this white paper includes all types of 100% renewable energy targets in its analysis. However, to develop an understanding of the level of commitment, a first attempt has been made in this white paper to distinguish between different target types (see Figure 3).

Figure 3. Overview of national 100% renewable energy targets, by type of commitment

As Figure 3 illustrates, many of the commitments to 100% renewable energy targets were established by Climate Vulnerable Forum (CVF) countries under the Marrakech Communiqué at COP22. The communiqué states, “We strive to meet 100% domestic renewable energy production as rapidly as ossible”. Of the 48 CVF countries, 6 (Costa Rica, Fiji, Papua New Guinea, Samoa, Tuvalu and Vanuatu) have taken additional steps to translate this pledge into their NDCs, most of which are conditional upon receiving appropriate international support and funding. Two non-CVF countries (Guyana and Indonesia) have also included 100% renewable energy targets into their NDCs. Of the remaining 11 countries with 100% renewable energy targets, 10 (Austria, Cabo Verde, Denmark, Djibouti, Iceland, Lithuania, Portugal, Solomon Islands, Spain and Sweden) have defined how they intend to achieve their targets in national energy plans or strategies.

The role of utilities in the energy transformation
Moving from ambitious renewable energy targets to accelerated implementation will require
proactive regulation, new market rules and collaboration between existing as well as new players in the energy market. This is key to making sure that the energy system is fit for renewable energy goals and transitional barriers are removed. In delivering energy to households, businesses and industries, energy utilities have played a crucial role in creating and shaping the current energy system. The ability of utilities to adjust to new demands will partly determine how fast the transformation can happen as well as what their role will be in a future energy system built on very high shares of renewable energy.

Overview of utilities in transition to 100% renewable energy
To further illustrate and understand the role that utilities can play in the transformation to 100% renewable energy, this white paper analyses a selected number of companies operating or having previously operated as “utilities” that are moving towards supplying 100% renewable electricity to their customers, either on their own initiative or because of government policies occurring in the jurisdictions they serve. The case studies cover different geographies, technologies, ownership structures and levels of operation including national, regional and local operations. The case studies were selected by members of the Coalition for Action based on first-hand experience from or familiarity with these utilities and build primarily on first-hand data obtained through interviews with senior representatives of the respective utilities. Table 1 below provides an overview of selected case studies, while detailed case studies are provided.

Table 1. Overview of utility case studies further

National-level utilities

Ørsted is the largest energy company in Denmark, accounting for 50% of electricity generation and 35% of heat generation. Engaged in the generation and distribution of electricity and heat to customers across the entire country, Ørsted develops, constructs and operates onshore and offshore wind farms, bioenergy plants and, to a smaller extent, waste-to-energy plants. In addition to its operations in Denmark, Ørsted is also active as a developer and operator of offshore wind in other parts of the world, with 5.6 gigawatts(GW) in operation in 2019. The Danish government holds a majority stake in Ørsted, owning 50.1% of the company’s shares (Ørsted, 2019a).

In 2018, 75% of Ørsted’s total power and heat generation was achieved through renewable energy sources(41% wind and 34% biomass), an 11 percentage pointsincrease from 2017. The remaining 25% consisted of fossil fuel generation (17% coal and 8% natural gas), as shown in Figure 7.

Figure 7. Ørsted total heat and power generation, 2018

Ørsted has committed to achieving at least 99% renewable energy by 2025 and to fully phasing out coal from its generation mix by 2023 – well before the national target of 100% renewable energy by 2050 (Ørsted, 2017). The target is set to be achieved through substantial increases in offshore and onshore wind deployment, as well as through the conversion of coal- and gas-fired power stations to sustainably sourced biomass.

Regional/state-level utilities
SA Power Networks – South Australia

Since the privatisation of the electricity sector in 1999 there has been no vertically integrated electrical utility in South Australia. Currently there are many electricity generating companies and retailers but only one distributor (SA Power Networks) and one transmission line company (Electranet). SA Power Networks is a privately held monopoly regulated by the Australian Energy Regulator. Its primary role is to maintain and operate the state’s distribution network, which serves around 860 000 homes and businesses and 1.7 million people (SA Power Networks, 2019a).

Figure 8. The changing role of SA Power Networks

South Australia is at the forefront of the Australian energy transformation, with a target of reaching 100% renewable energy in all end uses by 2050 (AEMO, 2018). For the power sector, with currently committed projects in the pipeline, South Australia is expected to reach 73% VRE in electricity generation by 2021 and effectively 100% by 2025/2026. By the end of 2018, about 53% of South Australia’s electricity came from renewables – 35.2% from wind (1 809 megawatts [MW]) and the rest predominantly from rooftop solar (930 MW), with another 135 MW from large-scale solar farms (AEMO, 2018). Natural gas supplied the bulk of the remaining generation with increasingly diminishing supply provided through interconnection with the eastern states. Some emergency local diesel supply also exists. A 500-MW brown coal power station in the state’s north closed in 2016. Prior to that, the majority of South Australia’s electricity generation was from natural gas and brown coal (AEMO, 2018).

Hawaiian Electric Companies – United States

The Hawaiian Electric Companies – Hawaiian Electric (HECO), Maui Electric (MECO) and Hawaii Electric Light (HELCO) – provide electricity services for the majority of the islands that make up the US state of Hawaii (Figure 9). The companies are all investor-owned utilities and together serve 95% of the state’s 1.4 million residents on the islands of Hawaii, Lanai, Maui, Molokai and Oahu (HSEO, 2018). The renewable share of electricity generation reached 26.6% for the three utilities in 2018, up from 23% in 2015.

Figure 9. Overview of electricity providers in Hawaii

Launched in 2008, the Hawaii Clean Energy Initiative (HCEI) was established in Hawaii as a partnership between the State of Hawaii and the US Department of Energy. This initiative’s initial goal was for the state to produce 70% of its electricity from clean and renewable energy by 2030. An RPS of 15% electricity sales by the end of 2015 was also established. The HCEI has since been strengthened and in 2015 the Hawaii State Legislature reinforced the state’s commitment to clean energy by increasing the RPS requirement to 100% renewable electricity by 2045, with interim targets of 30% by 2020, 40% by 2030 and 70% by 2040.

Going from 9.5% renewable electricity generation in 2009 to over 25% in the past decade has required extensive efforts from the utilities, and significant work remains to reach 100% (Figure10).

Figure 10. Hawaiian Electric Companies’ progress towards achieving the 2020 RPS target

The Hawaiian Electric Companies have incorporated renewables in the forms of residential and
commercial rooftop solar, utility-scale solar, battery storage, wind, hydro and geothermal. The
companies’ combined annual oil use for power generation has declined by 88 million gallons
(330 million litres), or about 19%, since 2008, and total carbon emissions have been reduced by about 925 000 metric tonnes between 2010 and 2018 (Hawaiian Electric, 2019b). Recently, contracts have been signed for eight new solar-plus-storage projects for over 275 MW of solar and more than 1 GW of battery storage, all at prices well below the cost of fossil fuel generation (HSEO, 2018). In 2019, the companies issued a second request for proposals seeking about 900 MW of additional renewable electricity capacity.

In 2012, in the aftermath of the Fukushima disaster and Germany’s decision to completely phase out nuclear energy, Stadtwerk Haßfurt set itself the overarching target of achieving 100% locally produced renewable energies by 2030. The immediate response from Stadtwerk Haßfurt was influenced by the town of Haßfurt’s proximity to the Grafenrheinfeld nuclear plant, which was shut down in 2015.

Figure 11. Renewable energy projects implemented (red) and underway (blue), Stadtwerk Haßfurt

The 2030 target is currently planned to be realised across the following sectors: energy generation and distribution, heating and cooling, and industry and sector coupling.

In 2004, the City of Aspen adopted an ambitious goal to supply 100% of the city’s electricity needs from renewable energy resources by 2015. A total of 75% had been achieved by 2014, and by August 2015 the city’s electricity supply from renewables through Aspen Electric was 100% (NREL, 2015). Early in the project, it became clear that some critical definitions and assumptions about the 100% renewable goal needed to be clarified before options could be identified. Although the city had clearly stated a goal of 100% renewable energy, the specific technologies and project types that would be considered eligible as “renewable” energy had not been defined. Clarification was needed about other details that impacted the options available to the city, such as whether the purchase of renewable energy certificates needed to be bundled with an energy purchase. Renewables were determined to include solar, wind, and both small and large hydro. Biomass, landfill gas, sewage gas and directed biogas would be considered on an individual project basis dependent on the conditions of each unique
project. Wind and landfill gas became the primary technologies to complete the 100% renewable energy goal (NREL, 2015). Aspen Electric and the City of Aspen partnered with NREL in developing a pathway towards achieving a 100% renewable electricity supply through a combination of their own hydroelectric facilities and PPAs with wind and landfill gas suppliers. The results of this transformation are shown in Figure 12.

Figure 12. Aspen’s electricity supply transformation, 2014-2015

The city ran into several barriers that related to the different levels of renewables included in
the supply. For example, one barrier came up at around 35% wind energy, which resulted in
an energy imbalance. Thus, to further increase wind energy penetration, the city would have
to buy more wind energy than it actually needed. Around 2014 this barrier was overcome when MEAN agreed to allow Aspen a different method to buy additional wind that eliminated the surplus under most conditions.

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Renewable energy finance: Green bonds


As renewables have become a compelling investment proposition, global investments in
new renewable power have grown from less than USD 50 billion per year in 2004 to around
USD 300 billion per year in recent years (Frankfurt School-UNEP Centre/BNEF, 2019), exceeding
investments in new fossil fuel power by a factor of three in 2018.

Another defining trend of renewable energy investments has been a geographic shift towards
emerging and developing markets, which have been attracting most of the renewable investments each year since 2015, accounting for 63% of 2018 renewable power investments
(Figure 1). Besides China, which attracted 33% of total global renewable energy investments in 2018, other top emerging markets over the past decade include India, Brazil, Mexico, South Africa and Chile (Frankfurt School-UNEP Centre/BNEF, 2019). Nevertheless, many developing and emerging countries in Africa, the Middle East, South-East Asia and South-East Europe still have a largely untapped renewables investment potential.

Figure 1 Global renewable energy investment (excl. large hydropower), in USD billion, by region, 2004-2018

In addition to the growing technological and geographical diversity, the renewable energy
investment landscape is also witnessing a proliferation of new business models and investment vehicles, which can activate different investors and finance all stages of a renewable asset’s life. Examples include the rise of the green bond market, growing interest in corporate procurement of renewable power and new business models for small-scale renewables such as the pay-as-you-go model.


Green bonds help bridge the gap between providers of capital and green assets, helping
governments raise finance for projects to meet climate targets and enabling investors to
achieve sustainability objectives. Along with other innovative capital market instruments,
green bonds can support new or existing green projects through access to long-term capital.

A green bond is like a conventional bond in the sense that they both help the bond issuer to raise funds for specific projects or ongoing business needs in return for a fixed periodic interest payment and a full repayment of the principal at maturity. A green bond differs in the “green” label, which tells investors that the funds raised will be used to finance environmentally beneficial projects. The green bond market started about a decade ago and has undergone rapid growth in the past five years (2014-2018), as global efforts to scale up finance for environmentally beneficial assets intensified. From a market dominated by development banks,
green bonds have experienced not only growth in the total amount issued, but also a diversification of issuer types and sectors financed, and a widening geographic spread.

The green bond market continues to offer enormous growth potential. The cumulative
issuances of green bonds are below USD 1 trillion, while the global bond market is valued at around USD 100 trillion. On an annual basis, green bonds raised USD 167 billion in 2018, while the total bond market raised around USD 21 trillion (CBI, 2019a; SIFMA, 2019), as seen in Figure 2.

Figure 2 Green bond issuances, renewable energy power investment, renewable energy power investment need,
low-carbon energy transformation investment need and global bond issuances (USD, annual)


The green bond market has taken off in the past five years, with 2019 issuances expected to reach USD 190 billion. Along with the growing amount of capital raised, the market also expanded in its geographic reach, diversification of issuers and currencies in which green bonds are offered. Renewable energy leads the use-of-proceeds categories and is present in around half of all green bonds issued.

Overall, annual global green bond issuances rose from EUR 600 million in 2007 to USD 37 billion in 2014 and USD 167 billion in 2018 (Figure 3) (CBI, 2019a). For 2019, a new high of USD 190 billion is expected (CBI, 2019b).

Figure 3 Annual green bond issuances, per region, 2014-2018, USD billion

Green bonds are also issued in more currencies than ever before. While the US dollar and the euro are the top two currencies of issuances (accounting for 83% of issuances, by number, in 2018, followed by the Chinese renminbi), green bonds were issued in a record 30 currencies in 2018 (CBI, 2019a).

Renewable energy dominates green bond issuances, followed by energy efficiency projects
and clean transport. Most green bonds finance multiple “green” categories (Figure 5). Out of the sample of over 4 300 green bonds analysed by IRENA, 50% of the bonds (by volume, in USD) had renewable energy as one of the use-of-proceeds categories, while 16% were solely earmarked for renewable energy assets. On a regional basis, 21% of green bonds in Europe were dedicated only to renewables (by volume, in USD), 19% in Africa, 16% in the Americas and 14% of green bonds in AsiaPacific (IRENA, forthcoming (a)).

Figure 5 Breakdown of green bond issuances by use of proceeds, by cumulative volume (USD), 2010-2019*


While the promise and potential of the green bond market is large, scaling up current issuance
levels will require co-ordinated actions from multiple stakeholders to reduce market barriers.
Those barriers include lack of awareness of the benefits of green bonds and hence a lack of local investor demand, lack of clarity regarding green bond guidelines and standards, a shortage of green projects and high transaction costs for green bonds compared to traditional bonds.


Green Bond Principles (GBP): Core components

Use of proceeds: Bond proceeds should be described in the bond offering documentation,
with projects’ environmental benefits described and, if possible, quantified. Share of financing
versus re-financing amounts should also be provided by the issuer. The GBP list the most
commonly used types of projects supported by or expected to be supported by the green bond market. These are:

  1. Renewable energy (production, transmission, appliances and products);
  2. Energy efficiency (e.g., new/refurbished buildings, energy storage, district heating, smart grids and products);
  3. Pollution prevention and control (e.g., reduction of emissions, waste prevention/ reduction);
  4. Environmentally sustainable management
    of living natural resources and land use (e.g., sustainable agriculture, fishery, aquaculture and forestry, natural resources preservation or restoration);
  5. Terrestrial and aquatic biodiversity conservation (protection of coastal, marine and watershed environment);
  6. Clean transport (e.g., electric, hybrid, public, rail transport or infrastructure, reduction of emissions);
  7. Sustainable water and wastewater management (e.g., sustainable water infrastructure, wastewater treatment, drainage systems, flood mitigation);
  8. Eco-efficient and/or circular economy adapted products/technologies (e.g., sustainable products, resource-efficient packaging and distribution);
  9. Green buildings meeting applicable standards or certifications.
Climate Bonds Standard (CBS): Categories of eligible projects

Bonds could facilitate vast global capital flows into low-carbon assets. Through co-ordinated action between policy makers and the financial sector, green bonds can mobilise the large capital pools owned by institutional investors.

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Electricity Storage Valuation Framework

Electricity storage refers to technologies that store electrical energy and release it on demand when it is most needed. The storage process often involves conversion of electricity to other forms of energy and back again.2 With its unique ability to absorb, store and then reinject electricity, electricity storage3 is seen as a key solution for addressing the technical challenges associated with renewables integration alongside other solutions (e.g. more flexible demand, accelerated ramping of traditional power plants). Consequently, storage is garnering increasing
interest in the power sector and is expected to play a key role in the next stages of the energy transition.

Based on recent analysis by the International Renewable Energy Agency the renewable share of global power generation is expected to grow from 25% today to 86% in 2050. The growth is especially strong for VRE technologies – mainly solar photovoltaic (PV) and wind power – with an increase from 4.5% of power generation in 2015 to around 60% in 2050. Furthermore, almost half of PV deployment could be achieved in a distributed manner in the residential and commercial sectors, in both urban and rural locations (Figure 1).

Figure 1: Electricity generation mix and power generation installed capacity by fuel, REmap case, 2016–50

The role of electricity storage in VRE integration
Since the first quarter of the 20th century electricity storage, mainly in the form of pumped hydro, has been used to provide a wide range of grid services that support the economic, resilient and reliable operation of power systems. The great majority of global electricity storage capacity deployed up to the present day is pumped hydro due to its favourable technical and economic characteristics (IRENA, 2017a). Over the last hundred years, the electricity storage industry has continued to evolve and adapt to changing energy and operational requirements and advances in technology.

The services that electricity storage can provide depend on the point of interconnection in the power system. For example, when connected to the grid at the transmission level, electricity storage can support increasing shares of VRE (as explained above), participate in electricity market bidding to buy and sell electricity, and provide ancillary services at the various timescales relevant to technical capabilities of each technology. When connected at the distribution level, electricity storage can provide all of the above services and in addition can be used to provide power quality and reliability services at the local substation, defer distribution capacity investment, and support integration of distributed renewable energy. It can also be connected to other generation facilities, allowing for higher price capture, provision of grid services and at the same time savings on connection costs. Finally, electricity storage can be placed behind the meter (Figure 5) to support a customer in increasing PV selfconsumption, thereby reducing electricity bills (where time-of-use demand-side management schemes exist), improving power quality and reliability, and potentially
enabling participation in energy management, wholesale and ancillary services markets through aggregators.

Figure 5: Grid applications of energy storage

Physical location and operational mode (coupled with generators or standalone), along with the regulatory environment and market structure under which electricity storage operates, greatly affect the type of analysis needed to estimate both system-wide and project-wide
benefits of electricity storage. These considerations are explained in more detail in Phase 3. For example, electricity storage can be operated as a standalone unit or co-located with generation facilities, e.g. solar PV and wind farms. In the case that storage is co-located with
a PV farm, rather than being a standalone unit it is an asset of a “hybrid power plant.

Utilising the system-marginal prices from Phase 3, the various services a storage project can provide can be optimised to maximise the revenue the project receives. As a result of the optimisation, the hour-to-hour (or intra-hour) dispatch of the electricity storage project and
stacking of its various revenue streams can be visualised. Figure 7 shows the type of output from storage service stacking that can be expected from Phase 4. In this illustration, the entire capacity of a 6 megawatt-hour (MWh) electricity storage facility is used to shift VRE from hours 11–14 to hours 18–21.

Figure 7: Illustrative output from Phase 4

Figure 8 shows an example of the outcome from a project feasibility model. In this particular example, although the system benefits outweigh the costs, the monetisable benefits are less than the costs, making the project economically infeasible for the project owner. The difference between the cost and the monetisable benefit, or the economic viability gap, if greater than zero, could be due to high storage capital costs or unfavourable market mechanisms.

Figure 8: Illustrative output from Phase 5

Using power system models to assess value and viability

Figure 9: ESVF phases and the types of models used

In these cost-effective cases, a variety of regulatory options should be considered to ensure that costeffective projects are deployed. Policy makers and regulators can then use the results of this analysis to identify the economic viability gap and devise appropriate incentives so that projects that are seen to be worthwhile at the system level are sufficiently compensated at the project level to move forward. This is particularly relevant in the case of a liberalised market.

The weighted average competitive scores for each technology and for each case are calculated by multiplying the competitive scores, weighting and suitability matrices in Steps 1 to 3. Technologies are then ranked based on their weighted average score for a given case, with 1
being the most suitable for a specific application, 10 the least suitable. Rankings can be shown as a heat map of how suitable each technology is for each case (see Figure 17 and Figure 18). A green colour denotes most suitable technologies while red shows less suitable ones. The topranked technologies are used in the subsequent project feasibility analysis phase of the ESVF. Please note that values in this section are purely indicative, and they have to be adjusted case by case when performing the analysis depending on the system, the technologies and other specific conditions.

Marginal peaking plant cost savings Power systems are designed with enough firm capacity
to accommodate expected demand under both normal operations and contingencies. In a grid system with a growing load, the corresponding increasing peak is usually fulfilled by building new peaker capacity, the generation resources that are only utilised during peak hours. In systems with increasing proportions of VRE, peaks in the net load become higher and narrower, reducing the operating hours for peaker plants and making a business case for electricity storage with limited capacity to replace peaker plants cost-effectively. Electricity storage can potentially provide firm capacity to the system, deferring the need for new peaker plants.

Figure 24: Illustrative output from a price-taker storage dispatch model

With the energy and reserve prices from the system value analysis, and the optimal dispatch results from the pricetaker storage dispatch model, the revenue of the storage project can be calculated. Based on the application ranking from the storage technology mappings – stating
which technologies are most appropriate for the case – the cost side of the analysis can be determined, including CAPEX, OPEX, depreciation and taxes. The cash flow, as well as the net present value (NPV) and internal rate of return (IRR) for the project can be calculated (Figure 25).

Figure 25: Example of electricity storage project financial statements

Using power system models to assess value and viability As the proportion of VRE in power systems increases, electricity storage is becoming recognised by stakeholders as an important tool for effective VRE integration. Several examples of how electricity storage can facilitate VRE
integration are discussed in the next part of this report (Part 3), showing how early business cases are already driving deployment of storage in some jurisdictions. Depending on the primary service the electricity storage provides, however, other technologies may be capable
of meeting the same need. The cost-effectiveness of electricity storage must therefore be assessed at system level and compared against other technologies. Past research has demonstrated that stacking revenues from the variety of services that electricity storage can
provide is key to accurately accounting for the benefits of electricity storage, as well as a necessary condition for its commercial viability. The ESVF described in this report puts emphasis on the benefits (including revenue streams) electricity storage can bring both to its owners and, more importantly, to the power system.

Real-world cases of storage use in power systems

Renewable energy has advanced rapidly in recent years, driven by innovation, increased competitiveness and policy support. This has led to the increased deployment of renewable energy technologies worldwide, with their share of annual global power generation rising from 25% today to 86% in 2050 under the International Renewable Energy Agency (IRENA) Paris compliant REmap scenario In the same year about 60% of total generation comes from variable renewable energy (VRE), mainly solar photovoltaic (PV) and wind, which are characterised by variability and uncertainty.

Electricity storage systems have the potential to be a key technology for the integration of VRE due to their capability to quickly absorb, store and then reinject electricity to the grid. Because of this, electricity storage is gaining an increasing interest among stakeholders in the power sector. Policy makers therefore need to understand the value of these resources from a technology-neutral perspective. The IRENA Electricity Storage Valuation Framework (ESVF) aims to guide the development of effective electricity storage policies for the integration of
VRE generation. The ESVF shows how to value storage in the integration of variable renewable power generation. This is shown in Figure 28.

Figure 28: Electricity storage valuation framework: How to value storage alongside VRE integration

When the share of variable renewable energy (VRE) in the system is low, operating reserve requirements have traditionally been defined as a percentage of the load or as the largest contingency of the system, or in other words, the largest generating unit at that time. With this
low VRE penetration, reserves have been divided into FCR or primary reserves, FRR or secondary reserves and RR or tertiary reserves. FCR is used to stop the frequency deviation and needs to act within the first seconds after the contingency, FRR restores the frequency to its
nominal value and acts within 30 seconds and RR is used to replace the FRR and acts within 15 minutes.

In this regard, the United Kingdom system operator, National Grid, developed the EFR product, which it defines as a dynamic service where the active power changes proportionally in response to changes in system frequency. The EFR service was created specifically for energy storage and requires a response within 1 second once the frequency has crossed a threshold, which can be either ±0.05 hertz (Hz) (service 1, wide-band) or ±0.015 Hz (service 2, narrow-band). In Figure 30 the EFR service is positioned with respect to the other frequency response services in the United Kingdom.

Figure 30: Frequency response services in the United Kingdom

Besides the EFR product, which is already implemented and being used in daily system operation in the United Kingdom, there are other examples of power systems with similar
products that, although not implemented yet, will encourage the participation of energy storage in reserve provision. For example, the Australian Energy Market Operator (AEMO)
has developed an FFR product. AEMO refers to it as “the delivery of a rapid active power increase or decrease by generation or load in a timeframe of two seconds or less, to correct a supply–demand imbalance and assist in managing power system frequency.

Figure 34: South Australian total regulation FCAS payments

As for the value, batteries are proven to have lowered the cost of FCAS in South Australia, as shown in Figure 34. Data show that during the end of 2016 and in 2017 payments to
existing fossil fuel generators were very high, being over AUD 7 million in some six-week periods. With the installation of the Hornsdale project, this service can be provided in a
cheaper way. In 2018 the total savings in the FCAS market are estimated at AUD 40 million.

Figure 37: Net load curve (duck curve) for the California power system, 15 May 2018

The duck curve is already prominent in California, where it first appeared. But it has also been observed in other parts of the United States, such as in the New England states (Roselund, 2018). To manage this net load curve, the grid operator needs a resource mix that can react quickly to adjust production and meet the sharp changes in net demand. In California the first ramp in an upward direction occurs in the morning, starting around 4 am.

Figure 58 shows the solar PV share in a least-cost minigrid in 2017 and in 2030, considering two types of Liion batteries (nickel manganese cobalt [NMC] and nickel cobalt aluminium [NCA]). The graph has been prepared using results from energy modelling software (HOMER Pro) and input data from IRENA’s latest cost report on storage (IRENA, 2017a). It shows that, in 2017, development projects with a 2.5% nominal discount rate had an optimal solar PV share of about 90% with either NCA or NMC batteries. Commercial projects in a low-risk context (10% weighted average cost of capital [WACC]) had renewable share values of 44.5% with NCA and 50.7% with NMC. The results for the optimal PV share in mini-grids in a riskier context (15% WACC), typical of offgrid locations, showed a renewable fraction of only 36% using NCA and 38% using NMC batteries.

Figure 58: Solar PV share in least-cost hybrid mini-grids

Storage deployment in an off-grid context There has been a rapidly increasing interest in deploying storage solutions in off-grid contexts, especially in minigrids that are located in rural areas where there is no access to the electrical grid or on islands that rely on expensive and polluting diesel generation. This has been driven by the need to accommodate increasing amounts of solar PV, and to a lesser extent wind, to provide electricity access or displace diesel generation.

The role of aggregators and the value they can provide to BTM storage should be noted. Aggregators are new market participants that operate a virtual power plant, which is an aggregation of dispersed distributed energy resources with the aim of enabling these small energy sources to provide services to the grid. Figure 63 is an overview of how an aggregator works.

Figure 63: Overview of an aggregator

Aggregators allow enhanced participation of BTM storage in the different electricity markets, help decrease the marginal cost of power and optimise investment in power system infrastructure; however, they require a proper regulatory framework and advance metering
infrastructure in order to exploit their full potential.

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Employment Potential of Emerging Renewable Energy Technologies

Floating solar photovoltaic (FPV) technology offers a new and additional pathway to realize India’s clean energy ambitions. It taps the country’s large water reservoirs to overcome some of the persisting issues of ground-mounted solar, such as the lack of levelled land, evacuation infrastructure and performance degradation due to high operating temperatures. Concurrently, FPV provides additional employment opportunities. The Council on Energy, Environment and Water (CEEW), the Natural Resources Defense Council (NRDC), and the Skill Council for Green Jobs (SCGJ) have undertaken periodical studies to estimate the direct jobs created in the solar and wind industry since 2014. In this study, we estimate the direct employment potential across the project deployment cycle in the FPV sector. This estimate is drawn from project-based case-studies generated through surveys and interviews with manufacturers, developers, and EPC (engineering, procurement, and construction) providers. We also provide an insight into the operational strategies and team structure in addition to discussing the typical duration of different phases of project development and the corresponding workforce employed.


• A small-scale FPV plant (capacity <1 MW) directly employs 58 workers while a mid-scale (capacity <10 MW) plant 45, over the course of their deployment.

• The FPV sector generates indirect job opportunities through manufacturers of specialized components like floats, anchors, and mooring system as well as domestic module manufacturers.

• The FPV sector offers opportunities for people qualified in hydraulic engineering, marine
architecture, and plastic blow-moulding techniques, some of the key skills required for bringing an FPV plant to life, in addition to those required in groundmounted solar operations.

• By setting time-based targets for FPV capacity, the government could widen the employment potential of this sector, which would bolster efforts to drive India’s COVID-19 economic recovery and achieve its Paris Agreement goals.

Table ES1 Overview of Operations in Deploying a Floating Solar
Photovoltaic Plant of Different Capacities

Employment Insights from the Development of a Mid-Scale Plant

Figure ES1 Time-Share (days) of Project Development Cycle
Phases for a Mid-Scale FPV Plant

Floating photovoltaic (FPV) solar is an emerging technology in which solar photovoltaic (PV) modules are installed (floated) on a water body. Asia has taken a lead in FPV solar deployments, driven by rapid capacity deployments in China, India, South Korea, Taiwan,
Thailand, and Vietnam, and is expected to host two-third of the global capacity. FPV’s global installed capacity was 2.6 GW by August 2020 and a study projects a 20 percent annual growth till 2025.1 A conservative estimate puts the global FPV potential at 400 GW, which indicates enormous opportunities for this sector’s growth.

For clean energy transition, FPV technology offers immense opportunities for India, as water bodies are spread across its vast landscape. By the middle of 2019, India had about 2.7 MW of installed FPV capacity and projects with a combined capacity of 1.5 GW capacity are under development.3 The Government of India has set a target of achieving 10 GW of FPV capacity by 2022.4 According to someestimates, India can build 280 GW of FPV capacity by by utilizing about 30 percent area (nearly 1,800 square kilometres) of its medium and large water reservoirs.5 The bid prices for FPV tenders are also steadily declining, registering a 45 percent drop in prices between 2016 and 2018. As a result, India has achieved the lowest cost for FPV projects at `35 ($0.5)/watt, which was offered during the bid for 70 MW FPV capacity in Kerala.

FPV offers a promising option for supporting India’s clean energy transition. FPVs face fewer challenges compared to ground-mounted solar plants which are often confronted with issues such as unavailability of levelled land for installation, lack of power evacuation infrastructure in proximity to the installation site, and performance losses due to high operating temperatures. FPV eliminates the need for land by exploiting the existing artificial and natural water bodies like reservoirs and lakes. When these water bodies are in close proximity to an electricity generation site (e.g. hydropower dams or thermal power plants), an easy access to the transmission network is assured. The efficiency of solar generation is also enhanced by cooling effect of the water beneath and reduced soiling of the module surface.

Overview of floating solar technology

An FPV system consists of PV modules mounted on a floating structure, supported by mooring lines and anchors embedded in the water bed. The floating structure consists of a float, commonly made of high-density polyethylene (HDPE), designed to withstand water currents, local wind, and weight of the PV modules and auxiliaries. The floats are occasionally made of fibrereinforced plastic (FRP) and metals. Cables connect the modules to the inverters, which are typically installed at the shore. Figure 1 shows a schematic representation of a typical FPV system with its main elements.

Figure 1 Schematic Representation of Different Components of an FPV Plant

As FPV is a sunrise sector of the economy, we use a project-based analysis to assess the employment potential in the sector. We derived insights about operation strategies, organisational structure, and employed workforce at a project level through surveys and interviews with manufacturers, developers, and engineering, procurement, and construction (EPC) providers.

We provide insights from the survey responses and telephonic discussions in this section. We have gathered details on the average duration of activities and number of people employed along with how the duration of activities and workforce employed change based on the project size and company profile. These are indicative numbers based on the limited responses. A more comprehensive study undertaken when the sector matures would provide a clear picture of overall employment created over the course of an FPV project.

Figure 2 An FPV Solar Project Traverses Four Stages for a Successful Deployment

Operation and maintenance (O&M) of FPV plants are relatively smoother than ground-mounted solar. This is because installations on water do not give rise to issues like
accumulation of dust and/or sand, common in groundmounted installations. Therefore, periodic maintenance, which includes activities such as module cleaning and site cleaning, is done only four times a year for a small-scale plant and 28 times a year for a mid-scale plant.

Overview of Operations in Deploying a Floating Solar
Photovoltaic Plant of Different Capacities

We are upbeat about the sector’s potential to grow, and our respondents foresee an increase in employee strength in the coming three years. An interesting observation from our case-study is the possibility of additional employment prospects for local boatmen in project sites. Since the FPV project is primarily accessed by a boat, for carrying out installation and maintenance activities, the developers and EPCs can outsource these services to the local community living close to the water body. Although the number of jobs created would be small, it surely opens up an additional source of livelihood.

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