First Solar Keynote: Solar Power’s Transition from Subsidy Dependence to Mainstream Energy Solution
Solar Power’s Transition from Subsidy Dependence to Mainstream Energy Solution
By First Solar
In his keynote presentation at Intersolar North America 2012, Jim Brown, First Solar EVP of Global Business Development, laid out his vision for the solar industry’s future, enumerating the keys to success in light of the rapidly changing business drivers for utility-scale solar power on both the supply and demand side.
The industry is in the midst of a wrenching transition from subsidized to sustainable power markets that will emphasize competition with fossil fuel generation, rather than competition within solar. “Once we can compete with fossil systems, there is no shortage of opportunity. Global demand for new power plants is enormous,” Brown said, pointing not only to offshore markets like Asia, India, the Middle East and Africa, but also to the hundred gigawatts of old coal plants that will go offline in North America in the next decade. What makes solar compelling in India, China and Saudi Arabia is different from what helped create the initial market demand in Europe and America—factors like long-term environmental benefits and industrial policy. Although still relevant drivers, they will now take a back seat to fossil fuel savings, optimization of energy infrastructure and the need to add new power resources as quickly as possible.
Business demand drivers will be: energy security, fuel savings, power prices, infrastructure utilization and time-to-power; on the supply side: reliability, predictability, integration, cost reduction, logistical efficiency and global reach.
Seven keys to the future
1. Increased PV plant value through seamless integration. Optimizing across the full value chain will be required in order to build better systems with lower life-cycle costs and which perform better in the power system.
2. Solar becomes part of the energy mix to address fuel cost volatility and supply reliability. A diversified and robust mix of energy supplies can help avoid an over-reliance on or exposure to any one particular commodity or technology. Diversity over the long term should deliver better risk-adjusted return on investment.
3. Time of day value matching with off-take profiles. The pure peaking energy profile of PV creates a nice match with most system energy demand profiles, but the industry needs to get smarter about how to use solar in the dispatch stack and then how to optimize around it until we are better at shaping the demand curve with time-of-day incentives, implementation of storage, using portfolio diversification to firm intermittent resources, etc.
4. Delivering benefits of PV to remote industrial markets should reduce power costs. Example: Isolated PV-hybrid systems matched against an industrial load will require us to improve the hybrid interface to ensure units are perfectly synched so that any variability in the performance of the solar generator is immediately offset by production of the paired fossil unit. A finely turned system should be able to reduce long term energy and capacity costs.
5. PV plant controls and responsiveness need to produce optimal portfolio performance. The solar plant of the future will be a seamless and integrated asset working well with other plants in the system.
6. Standardization will emerge to force grid integration. PV plants systems will need to deliver predictable energy, automatic generation control, fault ride through, dynamic frequency & voltage control and controllable ramp rates as well as potentially sell reactive power, be accountable balancing services and possibly have capability to sell standby or reserve power.
7. Industry delivery capabilities need to evolve. The bulk of the utility-scale market will be served by companies with the competencies such as advanced technology, cost leadership, customer service, fast time to market, field proven, global reach, grid integration controls, high bankability, high reliability and predictability, operational and historical excellence, strategic alliances, strong R&D and reputation. Companies will acquire these skills directly or need to leverage partnerships or alliances.
“The transition from where we are now to the ultimate end
state will be filled with complexity and challenges, and it will not be without
pain, but the final reward should be the creation of a broad-based, dependable
market with high growth prospects.”
Download a PDF of the presentation (4MB)
Reprinted with permission from First Solar.