Enviromena: First mover advantage
Enviromena is ready for when major solar PV tenders go to market.
It was 2008 when Enviromena, a one year old solar EPC contractor, started putting together a 10MW PV plant for the Abu Dhabi-based Masdar Institute. Back then, the cost of building the plant was around three times higher than it would be now and no-one really knew how solar PV panels would fare in the Middle East’s 50 degree summer temperatures.
Fast forward to the present, and the price of solar PV hardware has tumbled, renewable energy has moved up the agenda and Enviromena has learned lots and lots about how those PV panels perform in the dust, heat and haze of the Middle East. The company has picked up a host of contracts on the way and believes it has now installed around 45% of grid-connected solar capacity in the MENA region.
It’s been steady progress and the company’s 29 permanent employees are all busy, but Enviromena believes the region’s PV market could be about to step up another level. “We’ve got this nearly 50% market share for all of the grid-connected solar PV in the Middle East and North Africa. That’s quite an accomplishment from our perspective and now we are at this inflection point where solar has achieved competitiveness with conventional energy,” says Sander Trestain, the company’s executive director of projects and one of three co-founders along with CEO, Sami Khoreibi, and executive director of operations, Erik Voldner.
“What we are seeing is a massive swing in the uptake of solar. This is a transition period for us to go into much larger, much more utility-scale projects and it’s an exciting moment to be the market leader.”
Enviromena came about after Khoreibi, who was then working in the energy industry, met with representatives of the Masdar Initiative during a business trip to the region. The future CEO took his findings back to fellow Canadians Trestain and Voldner, who both have an engineering background. A period of intense market and technology research began and Enviromena was formed in 2007.
“The opportunity for us to be pioneers in introducing a new energy technology into the region was hugely exciting,” says Khoreibi. “That was the real motivator.
“The fact we’re producing clean energy is very important to us. It was a very big factor in the ambitions and intentions of not just ourselves, but a lot of the government programmes that were launched at the time in 2007.”
What: Solar PV EPC contractor
Founders: Sami Khoreibi, Sander Trestain, Erik Voldner
Outside investors: Masdar, Good Energies, Zouk
Key projects: Sheikh Zayed Solar Power Plant, Noakchott, Mauritania;
Masdar Solar Power Plant, Abu Dhabi
Progress to date: More than 30 projects in six countries; around 40MW of installed capacity; 45% share of MENA grid-connected capacity
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Enviromena’s contract with Masdar was awarded mid-way through 2008 and the company’s first round of fund raising was closed in 2009. Further funding rounds were held in 2010 and 2011.
Besides the three founders, the company now has three major outside shareholders. The largest investor is Masdar, which holds stakes in renewables ventures around the world. Fellow investors are Good Energies, a US-based private equity fund, and Zouk, an investment company with offices in London and Singapore.
Enviromena’s project portfolio to date consists of 30 projects in six countries totalling around 40 MW of installed capacity. The range of projects is diverse, from solar panels on car park shades and the top of schools to a hybrid PV/diesel plant providing power to an off-grid residential development. The projects range in size from a few hundred kilowatts to 15MW in the case of the Sheikh Zayed Solar Power Plant at Noakchott, Mauritania.
Along the way, Enviromena has figured out how to deal with some of the real and theoretical problems that could impact solar panel performance. The three big ones, as Trestain points out, are dust, haze and heat.
The big fear about dust is that it will cover the panels and impact performance. The solution to that problem in Enviromena’s case is a broom. “It’s a four metre long broom that sits on some rollers, you push it up and down a row of solar modules and it brushes the dust off,” explains Trestain. “We did studies, we looked at various types of bristles and the glass is actually very hard. This is simple. That was a big one down.”
Also, because the brushes are on a strict cleaning schedule, Trestain says that Enviromena plants probably have lower soiling levels than plants in Europe, where rain is the main cleaning mechanism.
As well as dealing with dust, the company has learned a lot about the impact of heat on solar panel performance. “Specific to photovoltaic technology, you do see a decrease in performance a little bit as temperatures rise,” explains Trestain. “One thing that was unknown when we built the first plant was that nothing’s really been built in these temperatures.”
Would the drop in performance be in line with historical models or would the extra heat of the Middle East have a more detrimental impact? More worryingly, would the heat damage the panels and impact long term performance?
The answer, says Trestain, is that the impact hasn’t been that great and is in line with other parts of the world. Any loss in performance is also offset by the sheer amount of sun shining down on the panels.
“Yes, you lose a few percent because it’s hotter here, but you gain so much more because it’s much sunnier,” explains Trestain. “Take two identical solar plants between here and Germany, the one here will produce twice as much electricity over a year. Some of the best solar performance you can see in the world is here in the Middle East region.”
The rate of long term degradation in panel performance, as the products begin to age, is no more than a quarter of one percent per year. Haze, it turns out, has not unduly impacted performance, because of PV panels’ ability to convert diffused light as well as direct light.
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The company has chosen to be supplier and technology agnostic. It has used both thin film and crystalline panels on its projects, working with major Chinese suppliers and the US-based thin film specialist, First Solar.
“There’s a lot of products available that are very cost competitive and the technologies have matured significantly and become more efficient,” says Trestain. “There’s a lot of them, we’re not locked into anyone. You need to keep an open mind on any given project because you always have different specifications.”
With local experience and projects under its belt, Environmena is now looking forward to what it sees as the next phase of solar’s development in the region. By the company’s own estimates, around 1000MW of PV projects are expected to be awarded in MENA in the next 18 months, compared to the current total installed grid-connected capacity of around 69MW.
There is, of course, a big difference between plans for deployment and tenders being released to market. Khoreibi points to examples of two large programs that are definitely going ahead. One is Jordan’s 600MW solar programme, with 200MW of contracts already announced, and the other is DEWA’s 100MW plant, which goes to tender soon.
The key reason for Enviromena’s current optimism is the dramatically reduced costs of solar PV hardware. The company is even willing to go on record with specific figures for the cost of plant construction and power generation.
“The solar power plant we built in 2008 was 10MW for $50 million. Today, you could build an identical plant very comfortably for $15 million,” says Khoreibi.
This, according to the CEO, already makes solar competitive with conventional forms of power generation. He cites Jordan, where the company recently opened an office, as an example.
“The production cost on average of electricity in Jordan is higher using the existing technologies (a lot of it is oil fired) compared to solar technology. With solar today, you can produce very comfortably for $0.14 per kWh and the average production cost, I believe, in Jordan, is $0.19 per kWh,” Khoreibi says.
Different countries, the company believes, will have different motivations for rolling out solar. Jordan, for example, is driven by its strategic objective to achieve energy independence.
Countries with plentiful oil reserves are becoming mindful of ‘opportunity cost’ and want to export oil for $100 a barrel, rather than using it for domestic consumption. Another attractive application for solar, Enviromena believes, is peak shaving, whereby peak demand surges massively at different times of the day and at different times of year.
“In places with very high demand in the middle of the day, to produce that energy for one or two hours you have to have a power plant idle for 22 hours a day,” says Trestain. “When you look at the economics of having that plant idle and the fact that typically these plants are going to be oil fired, PV can be dramatically cheaper.”
Cost and ease of deployment are key parts of the Enviromena message and this, rather than environmental concerns, will ultimately dictate how successful solar will be in the region. “It’s no longer an environmental solution, it’s just an energy solution,” says Trestain. “We are competitive with many forms of conventional energy and faster to deploy than almost all forms of conventional energy. In a region with very high demand growth, it makes a lot of sense.”
Sheikh Zayed Solar Power Plant This is a 15MW grid-connected solar PV power plant located in Nouakchott, capital of Mauritania. It was the first multi-megawatt PV system to be installed in the country and when completed was the largest solar PV plant in Africa. The $32 million farm satisfies approximately 10% of Nouakchott’s power needs.
Masdar Solar Power Plant The 10MW Masdar Solar Power Plant was the largest solar PV system in MENA when it was completed in 2009. A combination of 87,777 polycrystalline and thin film modules from Suntech and First Solar were employed in the 220,000 square meter plant.
Qatar National Convention Centre This 667kW farm covers the roof of the Qatar National Convention Center. It produces 1,225 MWh of electricity per year and provides 12.5% of the building’s power. Enviromena worked with Doha-based GreenGulf to build the system, which uses SolarWorld modules.