Q&A: Accenture on solar power
Accenture's Giampietro Sanna discusses regional prospects for solar.
Giampietro Sanna, managing director, utilities, Middle East, Accenture, discusses the prospects for solar in the GCC.
Are GCC utilities embracing solar and what proportion of power supply could realistically be provided by solar here?
With electricity demand forecast to almost double by 2020 and gas supplies tightening, countries in the Gulf region are actively exploring alternative sources of power, and this quest will increasingly steer investment decisions in GCC countries over the next decade, including the utilization of solar power. The solar potential in the MENA region is enormous.
With some of the highest solar irradiation levels in the world, as well as vast tracts of uninhabited desert on which to build capacity, the region could technically meet its own and the rest of the world’s power requirements through solar energy. For example, studies in Oman have shown that CSP (Concentrated Solar Panels) infrastructure covering just 0.1 per cent of its land mass would generate sufficient power to meet the sultanate’s annual electricity demand.
At the start of 2013, renewable energy played only a marginal role within the MENA region; however a clear trend of activity can be seen. KSA has defined an impressive target of 40 GW of new solar capacity by 2032; Abu Dhabi’s first 100MW of solar capacity came on-stream earlier this year; Dubai has announced plans to develop a 1,000MW solar park; and Kuwait has announced plans to procure solar power capacity within its independent water and power program.
Estimation of solar contribution and target setting requires intensive modeling power scenarios related to the energy intensity of the economy and population trends. In terms of setting potential targets, it is possible to analyze the experience of those countries which have invested significantly in solar energy. Germany and Italy are by far the most developed solar markets. In June, Italy generated 11 per cent of its demand from solar installations, while in April production from solar panels in Germany reached a peak equivalent of 12 per cent of overall demand.
The European Photovoltaic Industry Association estimates that solar generation could fulfill between 15 per cent and 25 per cent of the overall European demand by 2030. Gulf countries, which feature lower industrial electricity demand and higher irradiation, clearly have the potential to exceed these targets. However, the challenge of meeting future demand for electricity cannot be tackled solar and other renewables alone. Demand management and energy conservation will also play an important role.
Can it ever be done cheaply or will it always be generated at greater cost than conventional power?
Installation costs have decreased sharply in recent years and expectations foresee a further 50 per cent reduction in capital costs by 2020. Indeed, in some regions, such as the southern Italian island of Sicily, solar generation has already reached the solar parity.
Taking into consideration international prices of oil and gas and the real cost (i.e. net of subsidies) of conventional power generation, solar generation is already a competitive alternative for many countries. To achieve genuine development in the adoption of solar power, it is fundamental that GCC countries evaluate generation technologies on the basis of the overall opportunity cost and of the actual cost of conventional sources.
The real cost of conventional power generation in the region, which is distorted by heavily subsidized oil and gas feedstock, is finally being acknowledged; this in turn is providing a better understanding of the economics of renewables. Mainstream forecasts show that the cost of renewable energy production will be driven down further by technological advances and mass production, and it could even match gas-fired generation within less than a decade.
What are the technology choices available when building solar arrays? What are the respective pros and cons of each?
Mature technologies such as photovoltaic solar panels (PV) and concentrated solar panels (CSP) are solid and reliable and ensure interesting return to investors and utility operators all around the world. Less mature technologies that have the potential for future development include solar thermoelectricity systems (STA), dry sensitized solar cell (DSPV) and concentrated photovoltaic system (CPV).
PV has by far the largest share of current solar output, and generates electrical power by converting solar radiation through semiconductors, utilizing monocrystalline, polycrystalline and amorphous silicon, cadmium telluride and copper indium gallium selenide/sulfide. PV is more flexible and it is scalable, but the supply is not programmable.
CSP concentrates sunlight, or better solar thermal energy, using mirrors or lenses, onto a small area where the concentrated heat will drive a steam turbine connected to a power generator. In addition to electricity generation, CSP could also provide steam for desalination or enhanced oil recovery purposes, and heat can be partially stored.
In general there are some main technical drawbacks to the utilization of solar power including the size of installations, the challenge of connecting renewables projects to national grids and harsh climate conditions. In the end, the market will decide the best-fit technology to implement, and investors are very savvy about evaluating the different solutions costs and their performance and addressing the above mentioned technical issues.