geothermal resource, includinggeothermal resource, CO its the of use complete more and towards further step a positive be humans would for supplements omega-3 low-cost produce i Iceland. in southwest plant power algae for aquaculture production at the Hellisheidi geothermal micro- Power, ON to co-locate utility, an Icelandic with contract a signed (Israel) year. the during Algaennovation emerged notable some inIn ideas addition, geothermal energy utilisation (CO dioxide carbon eliminating into research million) to advance 18.3 (USD million 16 EUR Europe, across partners 17 of aconsortium (GECO) project, Control Emission example, the European awarded Commission the Geothermal For 2018. during front research the on continued Work also support. energy renewable to Italy’s changes to retroactive amount would it in that Directive, Energy Renewable EU's to the commitment Italy’s of in violation be would decree the that argued was it addition, In confidence. investor erode and uncertainty increase would and globally sector the of development in the role historic Italy’s undermine would a move such that concerned was for geothermal energy. public industry support The country’s the cut would that government Italian the of decree adraft by was dismayed industry geothermal the Europe, In costs. upfront high and risk development high both carries and technologies to competing compared expensive is development that geothermal concern the company’s underscores the project a plan to serve a small but growing fleet of hydrogen fuel cell cell fuel hydrogen of growing fleet but asmall to serve a plan with in 2018, electrolyser ahydrogen incorporated also plant GW. 2.2 of target previous the of instead GW) (up 0.6 current the 2026 by GW from 1.1 of capacity installed atotal aiming for additions, near-term capacity planned its curtailed greatly had it that 2018 in late announced company the pipeline, in the projects several has Pertamina While subsequent mineralisationsubsequent in underground rock deposits. for gases these of reinjection the is project GECO the of focus sulphide from open-loop emissions

loop powerloop vent plants gases to the atmosphere. Stand-alone closed-loop binary-cycle power plants can avoid significant venting of CO venting of power avoid can plants significant binary-cycle Stand-alone closed-loop 87 90 If successful, this effort to effort this successful, If i geothermal plants. One One plants. geothermal 2 stream. 2 91 ) and hydrogen hydrogen ) and The Hellisheidi The 89 88 86

plant (Ormat). Te Zealand’s Sweden) of OMaui New Ahi and (Climeon, Iceland Zhejiangcorporation Kaisan), the low-temperature in project Chinese of Turboden subsidiary and (Ormat, States United the in noted units new (Turboden), three the in Croatia plant Ciglena Velika in (Ormat), Kenya the extension Olkaria the include in 2018 plants binary-cycle completed to Turkish installations, addition In in 2018. ending decade in the MW) 523 (totalling country in the plants power 28 at technology its installed and incentives, local for to qualify subsidiary alocal under in Turkey components other and turbines manufactures Ormat 2018. of as construction under all and capacity capacity, allof installed half than more represented Exergy and Ormat from technology Japan). of Turkey, In Industries binary-cycle Heavy Mitsubishi of (Italy) Turboden and (Italy, asubsidiary Exergy States), (United Technologies are Ormat technology this of providers key the Among resources. low-temperature relatively for suitability to its in part due markets, in some dominant is technology heat and power geothermal earlier, binary-cycle noted As through electrolysis usingthrough geothermal power. electrolysis generated fuel with in Iceland buses and vehicles passenger 2 and other pollutants from the geothermal Conventional andother pollutants fluid. open- 93 95 projects. and to generate new new investment new to attract helps resources geothermalabout informationbetter of availability The 94 92

03 85 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

China added 7.0 GW of hydropower capacity in 2018 (excluding HYDROPOWER pumped storage) – similar to its additions in 2017 – for a year- end total of 322.3 GW.9 Hydropower generation increased 3% to HYDROPOWER MARKETS 1,234 TWh in 2018.10 China’s total completed hydropower projects The global hydropower market in 2018 looked very similar to the during the year represented investment of CNY 67.4 billion preceding year in terms of capacity growth and concentration (USD 9.8 billion), an increase of 8.4% over 2017.11 While the of activity, adding an estimated 20 GW to reach a total installed country’s growth in hydropower capacity (24%) was not in capacity of around 1,132 GWi.1 Given the large amount of proportion to overall growth in electricity demand (28.6%) during hydropower capacity in place globally, the overall ranking of the five-year period of 2013-2018, plant utilisation improved countries did not shift during the year. The top 10 countries for enough to raise hydropower’s share of China’s electricity total capacity remained (in order) China, Brazil, Canada, the generation from 16.9% to 17.4% during the period.12 United States, the Russian Federation, India, Norway, Turkey, Pakistan reached a milestone in 2018 with the commissioning Japan and France, which together represented more than two- of three long-delayed projects. With a combined output 2 thirds of global capacity at year’s end. (p See Figure 23 and of nearly 2.5 GW, these projects increased the country’s Reference Table R16.) total hydropower capacity by approximately a third, to nearly Worldwide generation from hydropower, which varies each year 9.8 GW.13 The completed projects were the 108 MW Golen Gol with shifts in weather patterns and other local conditionsii, was an plant, the 969 MW Neelum Jhelum plant and the 1,410 MW estimated 4,210 TWh in 2018.3 Global pumped storage capacity 4th Extension to the Tarbela Station, which now commands (which is counted separately) increased about 1% during the year.4 nearly 4.9 GW of capacity.14 Progress also was made towards initiating construction of the decades-delayed 800 MW As in many preceding years, China led in commissioning new Mohmand Dam project, which, when completed, is expected to hydropower capacity, representing more than 35% of new help with flood control, irrigation of existing and new farmland, installations in 2018.5 Brazil came second, as in 2017, followed and provision of drinking water to the city of Peshawar.15 by Pakistan and Turkey, all adding more than 1 GW of capacity.6 Other countries that added significant capacity included (in Hydropower capacity in Turkey expanded by just over 1 GW in order of additions) Angola, Tajikistan, Ecuador, India, Norway and 2018, for a year-end total of 28.3 GW – or 32% of the country’s Canada.7 (p See Figure 24.) China also was home to most of the overall generating capacity.16 Following a drought in 2017, new pumped storage capability in 2018, with smaller additions hydropower generation rebounded 5.5% to 60.9 TWh, providing completed in Austria and the United States.8 more than 20% of Turkey’s electricity supply for the year.17

i Where possible, all capacity numbers exclude pure pumped storage capacity unless otherwise specified. Pure pumped storage plants are not energy sources but means of energy storage. As such, they involve conversion losses and are powered by renewable and/or non-renewable electricity. Pumped storage plays an important role in balancing grid power and in the integration of variable renewable energy resources. ii Hydropower output also may vary with other local priorities, such as the use of storage capacity (reservoirs) to balance variable renewable electricity genera- tion and to manage water supply, as well as with market conditions, such as the price of competing sources of energy.

FIGURE 23. Hydropower Global Capacity, Shares of Top 10 Countries and Rest of World, 2018

28% 9% Brazil China

7% Next Canada 6 countries 7% United States Russian Federation 4 % 31% India 4 % Rest of World % 17 Norway 3 % Turkey 3 % Japan 2 % France 2 %

Note: Total may not add up due to rounding. Source: See endnote 2 for this section.

86 03

FIGURE 24. Hydropower Capacity and Additions, Top 10 Countries for Capacity Added, 2018

Gigawatts

350 +7.0 +0.4 300 80 Added in 2018 250 60 2017 total 200 50 +0.5

150 40 +0.4 +3.8 +1.1 100 20 50 +2.5 +0.6 +0.7 +0.6 0 China Brazil Pakistan Turkey Angola Tajikistan Ecuador India Norway Canada

Source: See endnote 7 for this section. MARKET AND INDUSTRY TRENDS

India increased its hydropower capacity by 0.5 GW in 2018, for a second unit was a year-end total of 45.1 GW.18 The single-largest project to come anticipated online in As in 2017, China and into service in India was the Kishanganga plant, comprising three 2019.27 The Rogun project Brazil accounted for 110 MW units, in the northern state of Jammu and Kashmir.19 is not expected to be The project drew on the local manufacturing and construction fully completed until more than capacity of Bharat Heavy Electricals Ltd., as did the fourth and 2032, and if the dam final 30 MW unit added at the Pulichintala plant in Telangana.20 rises to the planned 335 half of all new hydropower The 110 MW Pare hydropower plant in Arunachal Pradesh also metres, it will be one 28 capacity installations. was completed during the year.21 India’s remaining hydropower of the world’s tallest. installations comprised relatively small facilities, totalling about An earlier assessment 100 MW.22 By year’s end, India had a pipeline of 37 additional by the World Bank hydropower projects representing 12 GW of capacity, although 16 highlighted the potential macroeconomic risks associated of those (6 GW) were stalled for various reasons, such as lack of with such a costly project, as well as concerns about the funds as well as environmental concerns.23 required population resettlements and the potential impacts on downstream water flows.29 Tajikistan also launched a Although annual additions in India continue to be significant project (with World Bank funding) to refurbish and modernise in absolute terms, hydropower has ceded ground relative to the 3 GW Nurek plant, which could boost the country’s solar PV and wind power capacity. Hydropower’s share of the hydropower capacity 12%; the plant provides more than 70% country’s total installed capacity dropped by half between 2008 of electricity demand nationwide and is the largest hydropower i and 2018, to 13%, while the share of other renewables doubled, to facility in Central Asia.30 21%.24 As a result, hydropower’s share of total generation in India To the north, the Kyrgyz Republic advanced ongoing upgrades declined from more than 16% in 2008 to about 10% in 2018.25 of its four-decade-old Toktogul plant, awarding contracts for Electricity generation from hydropower in India increased 2.7% the facility’s four generating units. The modernisation plan, during 2018 to nearly 140 TWh.26 with the support of regional development banks, will raise the In Central Asia, several notable hydropower developments plant’s output from 1.2 GW to 1.44 GW while also improving plant occurred in 2018, including new construction as well as plant safety, efficiency and reliability.31 Also in the region, Kazakhstan upgrades. In late 2018, Tajikistan started up the first of six completed modernisation of the first unit of the Shardarinsk 600 MW turbines at the Rogun facility, which resumed plant, which has been in service for more than 50 years. When construction in 2016 after a hiatus extending back to the 1970s; the work is complete, the plant is expected to experience a 26% i Due to differences in average capacity factors among the different renewable energy technologies, these relative shifts in capacity shares do not accurately reflect changes in the share of generation.

87 RENEWABLES 2019 GLOBAL STATUS REPORT

gain in power (to 126 MW) and to be available for another 35-40 downstream and caused years of service, offering greater reliability and safety.32 the loss of infrastructure Relatively mature markets Hydropower development in both Tajikistan and the Kyrgyz and homes. The dam was in North America Republic has long been opposed by neighbouring Uzbekistan, nearing completion at the and Europe are seeing on the grounds that such development might harm the latter’s time, but these events a rising need for agricultural interests. However, Uzbekistan has softened its have caused a long delay 46 opposition and, in 2017, expressed its aspiration to harness more for the project. plant of its own hydropower potential (12 GW total, of which only 1.8 GW The United States ranked was being utilised as of 2018).33 As of year’s end, Uzbekistan fourth in hydropower modernisation. was engaged in efforts to modernise its outdated hydropower capacity in 2018, with facilities, which provide only 11% of the electricity needs of the 80 GWi in place at year’s fast-growing economy.34 end.47 The US market is relatively mature and has seen only Afghanistan restarted operation at its largest hydropower plant, modest growth in recent years, adding 0.9 GW (1.1%) during the 48 the 100 MW Naghlu, which had been inoperable since 2012. period 2013-2018. The country added four new hydropower Afghanistan is dependent on electricity imports but is relatively plants in 2018 (three of them at or below 6 MW of capacity), retired 49 rich in hydropower resources, so it has focused its attention on a few small units and ended the year with net growth of 0.1 GW. rehabilitating existing facilities and building new ones as a means Proposed new hydropower projects in the United States with to achieve rapid and cost-effective access to environmentally active permits amounted to less than 240 MW of capacity, and 50 friendly energy.35 most were relatively small projects. A study found that small- scale projects (less than 10 MW) are the most cost-efficient type In the southern Caucasus, Azerbaijan completed major of new hydropower development in the country because they modernisation and rehabilitation on the 425 MW Mingachevir typically use existing infrastructure.51 Hydropower generation 36 station. With the bilateral support of Iran, the country announced in the United States totalled 292 TWh, down marginally (2.9%) 37 significant progress on two new hydropower dams in early 2019. relative to 2017.52 Halfway around the globe, Brazil ranked second in the world The US west coast accounts for around half of the country’s for hydropower capacity and generation, as well as for new annual generation and was responsible for most of the decline installations in 2018. Approximately 3.8 GW was added, in output in 2018. After a record snowpack improved hydropower 38 somewhat more than in 2017, for a year-end total of 104.1 GW. output in the state of California in 2017, drier conditions the In the state of Mato Grosso, the last of four 175 MW units was following year caused a 39% drop in generation.53 Dam safety installed at the São Manoel plant on the Teles Pires River, and received heightened attention in the country following the the 300 MW Colíder plant was undergoing operational testing spillway failure at California’s Oroville Dam in 2017. In late 2018, 39 of its first unit in late 2018. Another five 611 MW turbines were the Federal Energy Regulatory Commission issued a report added to the Belo Monte plant – which is slated to total 11.2 GW on the event and began reviewing the recommendations of its 40 when completed – reaching nearly 7.6 GW at year's end. Brazil’s dam safety programme with an eye towards avoiding future hydropower output increased 4.2% during 2018, to 418 TWh, incidents.54 providing nearly 72% of the electricity generation in the country.41 Some Canadian provinces and their US counterparts have Ecuador completed 0.5 GW of hydropower capacity to rank expressed interest in recent years in building new transboundary 42 seventh globally in 2018 for new capacity. Among the projects transmission lines, primarily to enable Canadian hydropower to completed was the 180 MW Delsitanisagua project, two years serve US demand. In late 2018, Canada’s National Energy Board 43 behind schedule. The plant represents 10% of the country’s approved the proposed Manitoba-Minnesota Transmission generating capacity and is expected to directly benefit more than Project, involving a 500 kilovolt line connecting the networks of 44 500,000 inhabitants in the country’s south. The project was Manitoba Hydro (96% hydropower, with another 695 MW under plagued by cost overruns and contractual disagreements with construction) to Minnesota Power’s Great Northern line, already 45 Hydrochina, which was in charge of the construction. under construction.55 The Canada-US agreement envisions imports Also in Latin America, Colombia’s largest infrastructure project, of 250 MW to Minnesota, but the interconnection is expected the still-incomplete 2.4 GW Ituango hydropower plant, had a major to have capacity for 885 MW.56 A second project – the proposed setback starting in April 2018. Blockage of a diversion tunnel used 1,090 MW Northern Pass line between the Hydro Quebec territory during construction caused the reservoir to fill rapidly, setting off and the US state of Massachusetts – was denied a permit in an uncontrolled spill. The subsequent rapid changes in river flows early 2018 by the New Hampshire siting authority, and the focus forced the evacuation of thousands of people in communities shifted to an alternate 1.2 GW line through the state of Maine.57

i This excludes nearly 23 GW of US pumped storage capacity.

88 to 370 MW, increasing its annual production 15%. annual production its MW,to 370 increasing 76% capacity peak plant’s the to and raise flexibility operational and efficiency greater to achieve in 2018 was upgraded plant by extremely high rainfall in later months. in later rainfall high extremely by followed months summer in the conditions dry year, very the with during widely fluctuated it awhole, as 2018 for range a normal and increase efficiency andduring increasepeakperiods. load efficiency flow surplus to utilise MW) to 270 time (upgraded over in 1969 constructed originally to a facility adjacent was built station power new This plant. II Búrfellsstöð MW 100 the of commissioning with the generating alsoIceland its increased capacity 2013-2018, installed capacity rose 4% (1.8 GW). 4% (1.8 rose capacity installed 2013-2018, storage. virtual generation to Germany functioning andas the United Kingdom, flexible fast-response, in providing Norway across facilities similar join to expected is plant the place, in are cables submarine facilities. existing of expansions and upgrades being that of half nearly i generation on average duringelectricity period. the 2013-2018 all of to 17% close representing to capacity, available proportion Hydropower generation in the has Russian Federation risen in 47.1 of MW, a total for 57 about GW. increased capacity hydropower stated year, country’s the but the during into operation came plants new No continued. stock existing of modernisation and retrofits while in 2018, was modest construction new of scale relative the markets, mature other some in as But capacity. for fifth ranking world, in the facilities hydropower of fleets extensive most the of one has Federation Russian The capacity. installed for Federation Russian to the only second ranks Norway region, the Within projects. storage pumped on as well as modernisation on agrowing focus but projects large new few with maturity, relative have reached continent European the on markets hydropower All

This total that plants may alongside incremental net includesome“mixed” incorporate generation from capability pumping natural (open loop) inflows and,as such, are counted as hydropower capacity. 59 While the country’s hydropower generation was within was within generation hydropower country’s the While 62

58 Norway added 0.4 GW of capacity, with with capacity, of GW 0.4 added Norway 64 Over the five-year period period five-year the Over 60 Norway’s Lysebotn II II Lysebotn Norway’s 65 63 61 Once new new Once 66

2019. in late completion expected project’s the upon GW 2.1 will reach capacity total the where and in 2017 were completed similar units two where facility, Laúca the at units MW 334 two included environmental objectives. power, for grid stability, and for advancing national and economic renewable variable of curtailment minimising for tool important an to be storage pumped China considers construction. under storage pumped additional of GW 36 around had country the 1.5 GW was added in 2018 for a total of 30 GW. 30 of atotal for in 2018 was added GW 1.5 an and estimated 2013-2018, period the during 40% than less). or MW 32 (each Uganda and adding Malawi Egypt, each), as GW well as 0.1 (more Zimbabwe and than Congo the of Republic Democratic for capacity after Ethiopia Africa. and South after for capacity continent the third on it ranking end, year’s at 3GW of atotal for GW 0.7 another adding capacity, hydropower new of deployment rapid its continued term, near in the supply energy renewable expanded transmissionexpanded infrastructure. and systems automation grid modernised by in part facilitated of 5 GW of capacity. of 5GW of atotal for storage), were (and pure pumped storage those 4of were pumped 12 in 2018, permits preliminary issued projects incorporate storage pumped of as the function: their 18 primary States United in the projects hydropower prospective the of Most GW. 2.2 to nearly 16% around facility the of capacity the will raise renewable power technologies. variable of growing use the accommodate to better response fast to and provide control frequency to enhance specifically turbines, reversible MW 180 two the of range operating entire the across control to allow precise was optimised project The GW 160 of total end ayear- for in 2018, GW 1.9 increased capacity storage Pumped 2018. in 1 GW totalled continent African the on additions Capacity of its kind in the country. in the kind its of facilities largest and oldest the of one plant, Ludington Michigan’s of state the at refurbishment an extensive of MW, stage one during 45 by capacity, storage pumped its increased States United The reservoirs. of network an existing at capacity pumping of MW 360 added in Austria project II Obervermuntwerk The Ust-Ilimsk and the 6 GW Krasnoyarsk facilities in Siberia. facilities Krasnoyarsk 6GW the and Ust-Ilimsk GW year, way 3.8 the during were under the including projects Shushenskaya, set new output records. output new set Shushenskaya, Sayano- the plant, hydropower largest country’s the where Siberia, in year, especially previous to the relative in 2018 production hydropower increased conditions hydrological Much-improved Austria and the United States. United the and Austria in the country. projects storage pumped proposed of GW 16.3 for issued been 72 70 Other African countries adding capacity included the adding countries capacity African Other Angola, which is seeking to expand electrification and and electrification to expand seeking is which Angola, 83 73 82 i . As of early 2019, preliminary permits had had permits preliminary 2019, early of As 74 New capacity was installed in China, in China, was installed capacity New 80 77 When completed, the staged project project staged the completed, When 79 75 China’s capacity grew more more grew capacity China’s 68 Multiple modernisation 67 The achievement The was 71 Angola’s additions 76 At year’s end, end, At year’s 69 78 81

03 89 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

HYDROPOWER INDUSTRY Certification of bond issuances on the basis of The hydropower industry A notable feature of the hydropower industry in 2018 was sustainability criteria can noted intensifying the swelling ranks of ageing facilities that require repairs and help advance renewable upgrades. More than half of all hydropower facilities worldwide energy deployment. have either already undergone, or will soon require, upgrades global However, green bond and modernisation.84 Another trend was growing recognition standards have largely competition of the value that hydropower facilities can offer for the effective excluded hydropower.93 In in 2018. integration of variable sources of renewable energy, such 2018, the Climate Bonds as solar PV and wind power, and of the potential synergies Initiative (CBI) updated its between hydropower and other renewable energy technologies, Climate Bonds Taxonomy, depending on local conditions.85 which provides guidance These two themes are interconnected. On the one hand, to help decision makers identify assets and projects that are refurbishment and modernisation of hydropower plants may take aligned with the requirements of a low-carbon economy, and on greater urgency and different priorities in evolving energy provides screening criteria consistent with the 2-degree Celsius systems where flexibility in operation is paramount. Modernisation global warming target set by the Paris Agreement. While schemes can be designed and optimised to reflect the needs hydropower facilities cannot yet receive certification from CBI of power systems with high shares of variable renewable (the eligibility criteria had not yet been finalised as of the end of generation, just as they need to be optimised for changing 2018), the new Taxonomy indicates that any type of hydropower 86 climate conditions. Even without storage pumping capability, project may be “2-degree compliant” provided that specific reservoir hydropower plants – especially those using modernised criteria are met, including compliance with best industry practices controls and communication systems – can modulate output and in assessing and addressing environmental and social risks.94 provide passive storage and system balancing functions to better Leading providers of hydropower technology reported mixed integrate variable generation.87 results in 2018 and growing competition in the global hydropower On the other hand, the rapidly rising share of variable renewables market. For example, GE (United States) reported higher losses in the energy mix of many regions requires greater attention to for its hydropower segment as revenues contracted 3% in 2018.95 the availability of energy storage and flexible supply – including The company noted competitive pressure from other turbine hydropower, with pumped storage currently being the primary manufacturers and the need for continued investment to further means of electricity storage globally. (p See Systems Integration improve the efficiency and flexibility of its hydropower technology chapter.) New energy storage and additional opportunities for through the use of digital solutions.96 Spurred in part by the need effective balancing of load and supply are receiving greater for grid flexibility to accommodate growth in renewable energy, recognition as critical components of sector integration, allowing GE said that the hydropower industry continues to maximise variable renewables to serve not only more of the general value with new small-scale and pumped storage projects to 88 electricity demand but also transport and thermal applications. support the expansion of both wind and solar power capacity.97 The hydropower industry continued to work on advancing the Voith Hydro (Germany) also reported significant growth in sustainability of hydropower development in 2018. Building the market for pumped storage technology in the context of on previous work in this area, including the 2011 Hydropower the expansion of both wind power and solar PV, with strong Sustainability Assessment Protocol (HSAP), the International demand driven by China.98 Voith noted Brazil’s improving Hydropower Association (IHA) launched two new tools. The market conditions and a North American market focused on first was the Hydropower Sustainability ESG Gap Analysis Tool modernisation projects – but a constrained European market, due (HESG Tool), which was developed under the mandate of the to preferential subsidies for wind power and solar PV.99 Overall, Hydropower Sustainability Assessment Council and helps Voith conveyed deterioration of its hydropower division in a developers and operators assess and close any gaps that challenging environment characterised by much higher-intensity projects might face with regard to established best practice in competition in the global market.100 Sales were strongest in Asia 89 the environmental, social and governance arenas. A key driver and North America but declined 20% overall due to low orders in behind the project was to provide a more agile and low-cost (yet preceding years and delays in the construction of major projects; 90 non-compromising) alternative to a full HSAP assessment. new orders declined 27%.101 The second development from the IHA was the launch of the Andritz Hydro (Austria) reported sales being down 4% for the Hydropower Sustainability Guidelines on Good International year, due primarily to a decline in order intake in previous years.102 Industry Practice. The 26 guidelines present definitions of However, the company welcomed a 10% increase in new orders the processes and outcomes relating to good practice in the in 2018.103 planning, implementation and operation of hydropower projects, and may be specified in contractual arrangements to help ensure good project outcomes.91 Both of these tools are aligned with the World Bank’s new Environmental and Social Framework and the International Finance Corporation’s Environmental and Social Performance Standards.92

90 scale demonstration and pilot projects of less than 1MW. than less of projects pilot and demonstration scale small- relatively on focused projects most with market, energy operating capacity at year’s end. year’s at capacity operating of MW 532 an estimated 2MW, with were approximately in 2018 additions Net redeployments. and removals undergo development under wave projects and year, tidal power various of wave devices being pursued. being waveof devices types different eight least at with stage, development technology platform. to a floating or attached mountedbeing either on floor the sea convergence around most the turbines, of use horizontal-axis asignificant have and shown maturity to technological closer ii i rates. different at progressed have and sectors distinct two as are seen they in common, elements have some wave technologies and power stream tidal Although conversion. and waveenergy stream tidal are effort development most the receiving categories technology two The energy. of cost high projected to its due in 2018 backing government was refused Kingdom, United in the located consideration, under type that of facility new promising most the Perhaps projects. hydropower of types some in used technologies same the technologies, turbine in-stream well-established and mature relatively use facilities barrage Tidal power Ocean MARKETS POWER OCEAN of wave conditions that exist. that waveof conditions variety to and the waves from energy extracting of complexity to the in part due is This approaches. core afew just around much as converged not has wave technology power Conversely, despite decades of developmentdespite decades efforts. untapped largely remains it but enormous, is energy ocean of potential resource The in 2018. deployed were being turbines tidal of arrays where Scotland, of shores the off particularly and found around the world primarily is but concentrated in Europe, total. this of 90% than more represent where they exhibit considerable predictability in performance. in predictability considerable exhibit they where

These areThese the MWSihwa 254 plant (completed Korea in2011) tidal andthe of inthe Rance 240 power Republic MWLa station inFrance in1966). (built from the harnessing energy waves, the by potential ocean tidal ocean range usedto of generate power toOcean (rise refers technologies electricity andfall), used in this report does notincludeoffshorepower wind or does marinebiomass energy. used inthis report tidal (permanent) streams, currents, temperature ocean power ocean of gradients (ocean thermal The gradients. definition energy conversion) andsalinity of development efforts. untapped despite decades energy remains largely The The potential enormous enormous 7 At this point, tidal power devices have evolved to a level to a level have evolved devices power tidal point, At this OCEAN POWER OCEAN i represents the smallest portion of the renewable renewable the of portion smallest the represents of ocean ocean of 9 Therefore, wave power is still at a at still wave is power Therefore, 6 10 Tidal stream technologies are are technologies stream Tidal 2 5 Two tidal barrage facilities launched. have been projects pilot afew only and commercial deployment, of short well remain also technologies gradient salinity and conversion energy thermal Ocean 3 Development activity is Development activity 4 11 1 Each Each 8 ii

investment. private to leverage funding public on dependent highly remains industry the that found power ocean on study Commission European A2018 support. public to steady require continues sector power ocean the market-ready, near be to appearing development with some tidal activity, power technologies and ongoing progress despite technological Therefore, ( energy conversion (OTEC). thermal ocean power and wind offshore floating of development the for resources its reserve and doors) OpenHydro’s closing manufacturing and development of tidal turbine technology (thus cease would it that announced OpenHydro, manufacturer turbine tidal Irish the of (France), company parent July,In Naval Energies towards commercialisation. progression and success technological indicated particular, in arrays, turbine tidal of manufacturers hand, one the On industry. power ocean the for contrasts stark of was one 2018 year The INDUSTRY POWER OCEAN possible due to the technologies’ different levels of maturity. of levels different technologies’ to the due possible not is claims power,company wind the which offshore floating) (non- fixed-bottom with to has compete now power tidal said year. per units up to of 25 arate at turbines 2 MW (France), was to produce which in Cherbourg plant manufacturing turbine tidal its of inauguration the after amonth and Canada, in turbines OpenHydro’s of one of installation the after days not proceed with tidalnot proceed power tenders. to decision 2016 government’s UK turbines)the and OpenHydro to 75 (equivalent to 50 2028 by waters in French installed capacity power tidal of MW 100-150 only foreseeing government reasoning alleged The behind was the decision the French in support for a new tidal project. tidal a new for in support million) 21.9 (USD million 29.8 CAD announced government Canadian Emera), the partner Canadian its and OpenHydro of (a Fundy of Bay partnership Scotia’s in Nova project Tidal Sharp Cape failed the following Canada, In in 2018. progressed projects stream tidal other to an end, came plans OpenHydro’s as Even vital for the industry to progress towards commercialisation. to progress industry the for vital are considered that –signals systems energy to decarbonising contribution potential significant its reflect that signals market industry, launching the commercialisation of the technology. power tidal the for point aturning to be was expected plant somewhat abruptly. promptedoutlook leader to one stop industry operation was from private finance. private was from 75% which of 2018, of as worldwide in projects invested been billion) had 6.9 (USD 6billion EUR than More maturity. greater achieves industry the until returns predictable on based certainty investment relative to create paramount considered is support revenue continuing projects, in funding investors to private risk the See Wind Power section in this chapter. this in section Power Wind p See 19 Furthermore, while injection of public monies lowers lowers monies public of injection while Furthermore, 13 20 14 The industry is still awaiting clear awaiting clear still is industry The The announcement The only came two 12 On the other hand, a negative anegative hand, other the On 17 22 Further, Naval Energies Naval Energies Further, This CAD 117 million million 117 CAD This ) 15 The Cherbourg Cherbourg The 16 21 18

03 91 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

(USD 85.8 million) project would install five 1.5 MW seabed- Off the coast of North Wales, Minesto of Sweden demonstrated mounted tidal turbines manufactured by Andritz Hydro in the the ability of its “energy kite” to harness relatively low-energy tidal Bay of Fundy, alongside a 2 MW floating twin-turbine module streams and ocean currents.35 A turbine integrated with a wing, developed by Orbital Marine Power (formerly Scotrenewables the tethered device operates in a manner similar to an airborne Tidal Power, United Kingdom).23 kite. The device is said to enhance the energy conversion by 36 Also in Nova Scotia, Sustainable Marine Energy (United Kingdom) “flying” faster than the actual tidal flow. installed its PLAT-I tidal power floating platform equipped with In France, after two years in port for maintenance and optimisation, four 70 kilowatt (kW) Schottel Hydro (Germany) tidal turbines.24 Sabella’s (France) D10 turbine was re-immersed in the Fromveur By early 2019, in the wake of a successful collaboration between Passage off the coast of Brittany, where it will supply electricity to the two companies in both Scotland and Canada, Schottel and the island of Ushant for a planned three-year term.37 Sustainable Marine Energy made the strategic decision to merge China had several tidal turbines under development in 2018. 25 their tidal power operations. Building on smaller turbines installed earlier, Zhejiang University In the United Kingdom, manufacturers made progress on several deployed one 600 kW horizontal-axis turbine near Zhairuoshan fronts. Scotland’s MeyGen tidal stream array is the world’s largest Island, and Guodian United Power went to sea trials on a (6 MW), with four 1.5 MW horizontal-axis turbines in place since 300 kW turbine nearby.38 Hangzhou United Energy deployed 2017.26 In 2018, the project entered its 25-year operational phase; both vertical- and horizontal-axis turbines, 400 kW and 300 kW it ended the year having generated 10 gigawatt-hours (GWh), the each respectively; the company’s combined installed capacity amount of electricity that 2,800 Scottish households consume totalled 1.7 MW by year's end.39 27 Preparations were under way to install at least two in one year. Wave power development also continued in 2018, with several new 2 MW turbines at the MeyGen site, with both incorporating projects active around the globe. However, the industry showed larger generators and rotor diameters, as well as a common some signs of financial distress and wavering government export cable – all designed to reduce the technology’s levelised support.40 cost of energy.28 Australian wave power developer Carnegie received investment In the Bluemull Sound of Scotland’s Shetland Islands, Nova support from Enel Green Power (Italy) as Carnegie embarked Innovation (United Kingdom) and its partner organisations on a government-backed plan to deploy its first full-scale were granted a renewed lease for an expanded array of tidal 1.5 MW CETO 6 wave energy converter off the coast of Albany, turbines along with an approval for expansion from the European Western Australia.41 By early 2019, however, the Western 29 Commission, which provides financial support for the project. Australia government had terminated its pending grant of The project includes three 100 kW direct-drive turbines, with AUD 15.8 million (USD 11.1 million) for the Albany project because plans to add another three units. The objective is to prove that the of doubts that Carnegie would be able to fund its portion of the reliability and availability of tidal power arrays can be increased AUD 53 million (USD 37.3 million) development.42 Driven in 30 Also in 2018, Nova even as costs are reduced by at least 40%. part by losses in unrelated subsidiaries, the company entered Innovation integrated on-shore battery storage to demonstrate bankruptcy administration in early 2019 with hopes to recapitalise the ability of tidal power to offer load-following dispatch.31 its core wave power business.43 Orbital Marine Power continued successful tests of its 2 MW Funding for ocean power in the United States continued in 2018, SR2000 twin-turbine tidal power device at the European Marine with a particular focus on wave power devices and associated Energy Centre (EMEC) in Orkney, Scotland, generating more than technology. Ocean Energy (Ireland) constructed its wave power 3 GWh in its first year of testing.32 In 2018, Orbital Marine started OE Buoy in the US state of Oregon. The device, which is preparations to launch a new version of the turbine (Orbital O2) 38 metres in length and has a potential power output of at EMEC by 2020.33 The new device will mimic the concept of 1.25 MW, will be deployed in the Pacific at the US Navy test site the original, comprising a 73 metre long floating superstructure on the island of O’ahu in Hawaii.44 The USD 12 million project supporting two 1 MW turbines on each side, but adding new is funded in part under a collaborative agreement between features such as 360-degree blade pitch control for bi-directional the US Department of Energy (DOE) and the Sustainable power capture.34 Energy Authority of Ireland.45

The ocean power industry remains highly dependent on public funding to leverage private investment.

92 demonstration of half-scale wave its C3 energy converter. a completed and (Sweden) CorPower deployed Scotland, of funding. EU of Ireland,wave with the support in energy Northern converter WaveRoller its testing continued (Finland) AW-Energy PTO. the continuous motion orbital harnesses of waves through a air, a technology known as an oscillating water column. water an oscillating as known air, atechnology compressed wave-induced by driven is that Kymaner (Portugal) by developed turbine a bi-radial incorporates device upgraded commercialise the technology. Power (Italy) to further Green Enel with collaboration its (PTOs devices take-off power new of advancement design, device were early-stage funding for i emissions. carbon in reduction maximum deliver to technology the of ability the developing world-leading in technology a global market; and pathway of the United Kingdom the prospect for the technology; government criteria: the appearance of a clear cost-reduction three against wave industries and tidal power the for support public value of the assessed study a2018 context, that In confidence. investor sector private on effect an adverse with slowing, to be said is Kingdom United in the support public In general, however, momentum the industry created by past PTOs. and controls wave of materials, power-related development the million) for 5.7 in 2018 (USD million 4.5 GBP than more and Islands government, awarded Enterprise of the Scottish Highlands the of asubsidiary (WES), Wave Scotland Energy converter. WaveSub wave energy scale quarter- prototype its deployed Kingdom) (United Systems Power Marine (England), in Cornwall FaBTestAt facility the trials. open-sea of phase asecond for wave device power MARMOK-A-5 its Spain) Group, redeployed IDOM of (now part Oceantec (BiMEP) in Spain, Platform Energy Marine Biscay At the cables. submarine through grid Island Wanshan to the was connected and testing open-sea for deployed was platform desalination kW) (60 PV solar and kW) (200 wave hybrid floating kW a260 in China, Pacific, the Across development project shortening times. and costs capital aim reducing of the with technologies, power ocean to support in million grants 25 up to USD for recipients selected had it that announced DOE US the 2019, early In winter seas as well as 85% availability to generate electricity. to generate availability 85% as well as seas winter in survivability its demonstrated device the deployment, first its order to reduce regulatory uncertainty. regulatory reduce to order in power ocean of impacts environmental potential regarding and knowledge understanding the consolidation of scientific all three fronts, while wave energy conversion was not advanced advanced was not conversion wave while energy fronts, all three on to deliver able being of evidence showed had technologies ii Point-absorbers are wave energy converters that couple a floating element to a sea-floor base, converting the wave-driven motion of the floating top the relativeii Point-absorbers wave-driven the floating motionof to are converting wave base, element to that asea-floor a floating energy couple converters wave energy converters for testing in real ocean conditions. ocean in real testing for converters wave energy prototype half-scale to launch Kingdom) United (both Energy AWS and Ocean Energy Mocean to million) funding in 9.8 (USD

A PTO (power take-off) is a device for transferringPTO energyconversion, is adevice ocean In of casethe the powertransfers source converted to deliver fromwork. its A PTO (power take-off) the base into from electricity, European Marine Energy Centre Ltd. endnote 70forthis See section. energy (i.e., from wave action) inamanner that is suitable forgenerating electricity. 56 In early 2019, WES announced a further GBP 7.7 GBP million afurther announced WES 2019, early In 53 Late in the year, AW-Energy announced year, in the announced AW-Energy Late 59 The study concluded that tidal power power tidal that concluded study The 54 At EMEC off the northern coast coast At the off EMEC northern i ) and control systems, and and systems, control ) and 47 46 52 The three topic areas areas topic three The The WaveSub device WaveSub device The 48 50 58 During During 55 49 The The 51 57

nearly one-third of them developing point-absorber with types, various of converters wave energy were developing in operation, the potential impacts of such projects are unknown. projects such of impacts potential the in operation, target. commercialisation the to meet scale of economies requisite the allows that sector industrial anew of establishment in the also but development in technology only not timeline, that to meet required is work much that acknowledges overtopping/terminator devices. overtopping/terminator and converters wave surge oscillating columns, water oscillating attenuators, include wave categories power prominent Other power. ocean of development the hamper and consenting project to slow continue that risks environmental aside, put or to resolve, DOE, US the year,the by during led continued Efforts (mainly 2020). EU and funds Horizon programmes, regional and respectively. 2030, and 2025 by in Europe technologies wave and tidal power to commercialise needs funding estimated and timeline steps, necessary the power, outlining ocean for plan the European published an Commission implementationIn 2018, vertical-axis turbines and tidal kites. vertical-axis turbines. horizontal-axis on were working which of half world, the around developers technology power tidal 90 than were more there 2018, In developers. and projects of viability enough mayto threatencostly be the financial assessments case-by-case such that suggested area in this knowledge scientific current the on in 2018 released Astudy impacts. of potential and data significant collection assessment undertake to developers individual require to locations some in regulators prompted has technologies power ocean various with associated life marine to risks environmental regarding uncertainty Ongoing with one-third each coming from industry technologies, these to commercialise 2030 and 2018 between required is billion) funding in 1.4 (USD billion 1.2 EUR estimated An marine environment. marine to the risk small very to pose appears devices single of deployment well meet the other two criteria. two other the meet well could pathway but acost-reduction to demonstrate yet enough 65 However, because there are no large arrays arrays large no are there because However, 68 Other tidal power devices include include devices power tidal Other 71 60

64 69 The study found that study the The At least 200 companies companies 200 At least

/

pri 62 vate national equity, ii devices. 61 The plan plan The 67 63 66 70

03 93 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

regulatory instability in many countries, financial and bankability SOLAR PHOTOVOLTAICS (PV) challenges, and the need to integrate solar PV into electricity markets and systems in a fair and sustainable manner.8 But solar SOLAR PV MARKETS PV already plays a significant and growing role in electricity 9 The annual global market for solar photovoltaics (PV) increased generation in several countries. In 2018, it accounted for 12.1% only slightly in 2018, but enough to surpass the 100 GWi level of total generation in Honduras and substantial shares also in (including on- and off-grid capacity) for the first time.1 Cumulative Italy (nearly 8.2%), Greece (8.2%), Germany (7.7%) and Japan 10 capacity increased approximately 25% to at least 505 GW; this (6.5%). By the end of 2018, enough capacity was in operation compares to a global total of around 15 GW only a decade earlier.2 worldwide to produce close to 640 TWh of electricity per year, or an estimated 2.4% of annual global electricity generation.11 (p See Figure 25.) Higher demand in emerging markets and in Europe, due largely to ongoing price reductions, compensated In most countries, the need still exists for support schemes for solar for a substantial market decline in China that had consequences PV, as well as for adequate regulatory frameworks and policies around the world.3 governing grid connections.12 Government policies – particularly Despite the single-digit growth rate of the global market in tenders and, to a lesser extent, traditional FITs – continued to 2018, solar PV has become the world’s fastest-growing energy drive most of the global market in 2018.13 Corporate purchasing technology, with gigawatt-scale markets in an increasing of solar PV expanded considerably, and self-consumption was number of countries.4 Demand for solar PV is spreading and a significant driver of the market for new distributed systems in expanding as it becomes the most competitive option for Europe and the United States.14 Although still a negligible share of electricity generation in a growing number of markets – for the annual market, a number of purely competitive (“unsubsidised”) residential and commercial applications and increasingly for systems were being constructed in 2018; interest in this segment is utility projects – even without accounting for the external costs significant and growing quickly.15 5 of fossil fuels. For the sixth consecutive year, Asia eclipsed all other regions for Eleven countries added more than 1 GW of new capacity during new installations, despite declines in the region’s top three markets the year, up from 9 countries in 2017 and 7 countries in 2016, and (China, India and Japan).16 China alone accounted for around markets around the world have begun to contribute significantly 45% of global additions, but this was down from nearly 54% in to global growth.6 By the end of 2018, at least 32 countries had a 2017.17 Asia was followed by the Americas.18 The top five national cumulative capacity of 1 GW or more, up from 29 countries one markets – China, India, the United States, Japan and Australia year earlier.7 – were responsible for about three-quarters of newly installed There are still challenges to address in order for solar PV to capacity (down from about 84% in 2017); the next five markets become a major electricity source worldwide, including policy and were Germany, Mexico, the Republic of Korea, Turkey and the

i For the sake of consistency, the GSR endeavours to report all capacity data in direct current (DC). See endnotes and Methodological Notes for further details.

FIGURE 25. Solar PV Global Capacity and Annual Additions, 2008-2018

Gigawatts

600 World Total Annual additions 505 Gigawatts Previous year‘s 500 +100 capacity 405 400 +99 305 300 +76 229

200 177 +51 138 +39 101 +37 100 40 71 +30 23 15 +17 +31 +7 +8 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Note: Data are provided in direct current (DC). Source: Becquerel Institute and IEA PVPS. Totals may not add up due to rounding. See endnote 2 for this section.

94 03

Netherlands.19 The annual market size required to rank among newly installed.22 While down more than 15% relative to 2017, the top 10 countries continued to increase, reaching 1,330 MW the scale of new installations was greater than expected 20 in 2018 (up from 954 MW in 2017). following significant subsidy reductions by the central government At year’s end, the leading countries for cumulative solar PV in May 2018, and the country’s additions were more than four capacity were China, the United States, Japan, Germany and times those of the next-largest market.23 (p See Figure 27 India.21 (p See Figure 26.) and Reference Table R17.) By year’s end, China’s cumulative China’s annual solar PV market declined for the first time since 2014 capacity of 176.1 GW was well beyond the national target of but the country had its second-biggest year so far, with 45 GW 105 GW by 2020 that was established in 2016.24

FIGURE 26. Solar PV Global Capacity, by Country and Region, 2008-2018

Gigawatts

600 World Total Rest of World 505 Gigawatts India 500 Germany Japan 405 400 United States

China MARKET AND INDUSTRY TRENDS 305 300 229

200 177 138 101 100 71 40 15 23 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Note: Data are provided in direct current (DC). Source: See endnote 21 for this section.

FIGURE 27. Solar PV Capacity and Additions, Top 10 Countries, 2018 Gigawatts

200 Annual additions +45.0 Previous year‘s capacity

150

100

+10.6 +6.5 50 +3.0 +10.8 +0.4 +0.3 +3.8 +0.9 +2.0 0 China United Japan Germany India Italy United Australia France Republic States Kingdom of Korea

Note: Data are provided in direct current (DC). Source: See endnote 23 for this section. Data for India are highly uncertain.

95 RENEWABLES 2019 GLOBAL STATUS REPORT

In 2018, solar PV generated more than 12% of Honduras' electricity and substantial shares in other countries.

These still-substantial additions came despite policy changes in China and Malaysia (the sources of about 85% of India’s imports China that reduced the FIT payment for solar generation, capped of solar product), flaws in the tender scheme and uncertainty distributed projects at 10 MW for 2018, and ended approvals for surrounding the Goods and Services Tax, all of which affected new subsidised utility-scale plants (abolishing the 13.9 GW target large-scale installations.36 Investment in India’s solar sector fell for 2018), mandating that they go through auctions to set power 27% by one estimate, despite an increase in investment in new prices.25 The policy changes also shifted project approval to manufacturing facilities, because of the decrease in installations local governments.26 Key factors driving China’s policy revisions and the decline in system costs.37 (p See Investment chapter.) included a backlog in FIT payments and a growing deficit in Even so, solar PV was India’s largest source of new power the nation’s renewable energy fund, as well as concerns about capacity for the second year running, and, for the first time, it uncontrolled growth and a realisation that bids under the country’s accounted for more than half of the capacity added during the Top Runneri programme were much lower than the national FIT.27 year.38 India is targeting 100 GW of installed solar PV by fiscal The changes reportedly signalled the central government’s shift year 2022.39 in focus from high-speed growth and dependence on subsidies, The Indian rooftop market continued to grow rapidly, up about to high-quality development in order to reduce costs through two-thirds during 2018 by one estimate.40 But total rooftop capacity technological improvements.28 remained relatively low, reaching as much as a few GW by year’s China’s market in 2018 was driven largely by the Top Runner and end, a long way from the national target of 40 GW by 2022.41 The Poverty Alleviation programmes (and the FIT until late May).29 rooftop market continued to consist mainly of large commercial Centralised utility power plants (above 20 MW) accounted for and industrial companies, as well as government entities and nearly 53% of the year’s installations (and 71% of the year-end educational institutions, all seeking to reduce their electricity bills; ii total); the remainder was in distributed systems, which were up few residential customers can afford the upfront costs.42 considerably in both their capacity added in 2018 and their share As in recent years, most of India’s newly installed capacity during of total additions relative to previous years.30 2018 was in large-scale installations, with the bulk of this in five Curtailment of China’s solar PV generation continued to decline, states: Karnataka, Rajasthan, Andhra Pradesh, Tamil Nadu and from a national average of 6% in 2017 to 3% in 2018, although Maharashtra.43 At least three of these states (Andhra Pradesh, curtailment rates remained far higher in the remote provinces of Karnataka and Tamil Nadu) continued to face curtailment Gansu (10%, down 10 percentage points) and Xinjiang (16%, down challenges, in the range of 10-25%, which resulted in significant 31 6 percentage points) due to insufficient transmission capacity. losses to project developers.44 More than 40 GW of additional Reduced curtailment and rising capacity helped increase China’s large-scale solar projects was tendered in India during 2018.45 solar PV output 50%, to 177.5 TWh.32 As a result, solar PV’s share However, the gap expanded between tenders issued and of total annual electricity generation in the country rose to 2.6% auctions completed. Many auctions were cancelled retroactively, in 2018 (from 1.9% in 2017).33 and several gigawatts of awarded capacity were annulled during the year.46 The second-largest market in Asia was India, which added an estimated 10.8 GW for a total of around 32.9 GWiii.34 Installations The market in Japan also contracted (down about 13%), for the were down relative to the previous year, for the first time since third consecutive year, with 6.5 GW added for a total of 56 GW.47 2014.35 The decline was due to several factors, including land Japan’s market continued to suffer from high prices of solar and transmission constraints, a safeguard dutyiv on imports from generation (Japan’s prices are some of the highest worldwide),

i China’s PV Top Runner programme, introduced in 2015, provides economic incentives to Chinese companies to invest in new and innovative technologies and to achieve minimum performance criteria for cells, modules and inverters. The programme, based on auctions, was created to promote the application of advanced, high-efficiency solar PV products and to close outdated production facilities. See endnote 27 for this section. ii “Distributed” solar PV in China includes ground-mounted systems of up to 20 MW that comply with various conditions, in addition to commercial, industrial and residential rooftop systems. Distributed generation consists largely of commercial and industrial systems and, increasingly, residential and floating projects. See endnote 30 for this section. iii Data for India are highly uncertain. See endnote 34 for this section. iv Members of the World Trade Organization may take safeguard action, which includes placing temporary duties or restrictions on imports, while they adjust in order to become more competitive with foreign producers.

96 related toand as landfinancing, well permission acquisition, issues regarding schemes, uncertainties national support including factors, to several due to 2017 relative 37% down in relatively high and bid prices were undersubscribed. resulted 2018, and 2017 in late held tenders, three first country’s to end 2018 with 7.9 with GW. 2018 to end 2 GW than more added Korea of Republic the in Asia, Elsewhere in 2017. nationally 5.7% (11% Kyushu region), in the up from generation electricity total Japan’s of 6.5% an estimated for accounted year, the PV solar For consumption. self- for solar-plus-storage of use in the expanded interest and stable, fairly remained sector rooftop residential Japan’s and on the landscapes negative natural impacts environment. potential include that to concerns due governments their and citizens local and developers between conflicts grow, some raising to continued in Japan plants solar large of number the so, Even costs. labour high and constraints grid shortages, land progress in their financing and business models. business and financing their in progress make to continued Japan in movements power Community environmental law. assessment national arevised under MW 40 than larger projects PV solar covering was considering government national the 2019, early By national target for 2023. for target national the GW, surpassing 5.1 of already atotal for GW 1.6 installing by a renewable portfolio standard (RPS). standard portfolio arenewable by increased its share in the electricity mix in 2018. mix electricity share in the its increased also which generation, nuclear inflexible with combined output renewable variable of shares high of Kyushu to due periods of island the on occurred (and PV generation solar wind) of increased the commercial sector’s interest in theincreased self-consumption. commercial sector’s have grid the from to electricity relative costs solar grown falling as 52 The market for larger rooftop systems also has has also systems rooftop larger for market The 55 Late in the year, Japan’s first curtailment curtailment year, in the first Japan’s Late 57 59 The market has been driven primarily primarily driven been has market The However, Turkey’s additions were 51 58 Turkey followed, 56 54 49 48 The The 53 50

solar PV projects weresolar projects PV approved for construction. several and coal, against favourably (and power) wind competed PV solar Philippines, in the auction; solar first its held which includingthe region held tenders, and Bangladesh Kazakhstan, as delays as project developers await further cost reductions. cost await further developers project as delays as on most new homes (starting in 2020). (starting homes new most on installations solar to mandate state US first the became it year the during and GW), (3.4 capacity in added all states led again added an estimated 10.6 GW for a total of 62.4 GW. 62.4 of atotal for GW 10.6 an estimated added sectors contracted by 8% and 3%, respectively. 3%, and 8% by contracted sectors utility-scale and non-residential the but markets, state emerging by driven 7%, expanded sector residential to 2017. The compared (down 2%) stable was relatively awhole as market US The States. United to the largely due in 2018, market global the of 14.5% around for accounted Americas The GW). (0.4 Malaysia and GW) (0.5 Pakistan as well as 2025, by GW 20 of atarget and aFIT by driven 1 GW), Taipei Chinese (almost included capacity to add in Asia Others in many states that previously did not have significant markets. have significant not did previously that in many states progress with continued, additions in capacity shift geographic a Overall, GW). (0.9 Carolina Texasby North and (added 1 GW) on the tariff schedule);on the tariff the based shifted (timelines delays and cancellations to project led which modules, and cells solar imported on duties federal to new largely due was reportedly year duringcommissioned the capacity utility-scale new on most new homes. new most on installations solar to mandate state US first the became California 65 California was followed 61 63 Several countries in in countries Several The United States States United The 67 The decline in in decline The 62 64 California California 60 66

03 97 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

effects of import tariffs were countered somewhat by a global of federal tax credit support).73 Interest in solar-plus-storage is oversupply of modules (resulting from China’s policy changes increasing in the US residential market as well.74 (p See Systems and subsequent decline in module demand), which drove down Integration chapter.) prices.68 To the south, several countries in Latin America and the Late in the year, the US market also was buoyed by increased Caribbean are seeing a rapid expansion of annual installations, interest from corporations, including utilities, eager to begin thanks to an abundance of solar resources and a favourable construction of new projects before the federal investment tax political climate.75 Large companies are flocking to the region credit begins to phase out in 2020.69 Companies signed a total of with expectations of massive expansion.76 13.2 GW of utility-scale solar power purchase agreements (PPAs), The region’s top country for additions in 2018 was Mexico, pushing the pipeline of contracted projects to the highest level which ranked among the top 10 globally for the first time.77 ever, at 28.3 GW.70 While commercial and industrial off-takers (p See Figure 28.) Mexico added more than 2.7 GW (up from were responsible for 285 MW installed in 2017), boosting its total capacity five-fold only 153 MW of capacity to nearly 3.4 GW.78 This substantial growth in capacity resulted additions during 2018, US companies, including from the grid connection of several very large projects (a result of they accounted for 21% utilities, signed auctions as well as private PPAs) and from a significant increase (2.8 GW) of new deals in distributed projects under Mexico’s net metering scheme.79 signed, or 1 GW more

than in all previous years 13.2 GW Chile followed Mexico in the region for cumulative capacity, with of utility-scale solar 80 combined.71 Innovations almost 0.5 GW installed for a total of 2.6 GW. Most of Chile’s such as aggregationi PPAs in 2018. capacity is in large-scale projects, many of which support mining are helping to open operations and other major energy consumers.81 the market for smaller Much of the capacity installed in Latin America has occurred 72 businesses as well. via large-scale PPAs, with many new ones announced in A few of the US projects contracted in 2018 included energy 2018, and the region is home to a good portion of the world’s storage; large-scale solar-plus-storage projects are already merchantii solar plants.82 But distributed solar PV has begun to undercutting new gas plants in some markets (with the help see significant growth, particularly in Brazil, where cumulative

i Aggregation can occur when, for example, a large corporation acts as “anchor tenant”, providing a strong credit rating to support project financing, and enabling the developer to build a larger project than the corporation requires. The developer then negotiates separate PPAs for the additional capacity with smaller purchasers, who have differing credit ratings, and who benefit from lower transaction costs and reduced complexity. Alternatively, a number of companies jointly negotiate an agreement, aggregating their individual capacity requirements in order to organise a larger deal and, thereby, to more cost-effectively acquire a PPA. See endnote 72 for this section. ii Merchant solar plants are facilities financed by investors built with the intention of selling electricity into the wholesale market, rather than through a PPA, which includes an agreed purchase price for electricity that is generated by a plant over several years.

FIGURE 28. Solar PV Global Capacity Additions, Shares of Top 10 Countries and Rest of World, 2018

% 11% 45 United States China 7% Japan Next 6 countries 15% Australia 4 % Germany 3 % Mexico 3 % Republic of Korea 2 % % 13 Turkey 2 % Rest of World 11% India The Netherlands 1 %

Note: Totals do not add up due to rounding. Source: See endnote 77 for this section.

98 to nearly 2.3 GW. 2.3 to nearly capacity its doubling in 2018, GW 1.1 than more added Brazil total, September; rising emissions prices in Trading Emissions the rising EU’s prices emissions September; in panels solar Chinese on tariffs of removal the included drivers PV. solar more and more deploy demand growing electricity rapidly with of cumulative as emerging economies globalportion capacity capacity to 115 GW. to 115 capacity total bringing additions, year’s previous the over up 36% 2018, in PV solar grid-connected of GW 8.3 around EU added The capacity. ranking for maintained totalbut second-place operating its GW) (9.7 installations new for region third-largest was the Europe instability. currency and rates interest to volatile in part due all of sizes projects for America Latin of in much achallenge remains to financing Access in 2018. GW 0.5 surpassed capacity distributed electricity tariffs and increased environmental awareness. environmental increased and tariffs electricity rising prices, module falling incentives, state-level of number to arising as well as programme metering net national Brazil’s of year, extension the during to the thanks was added total this of enacted in part to address energy security concerns. security energy to address in part enacted systems smaller for metering net and installations large-scale for to aFIT thanks GW), (1.6 capacity total its double to nearly Federation and Ukraine. Federation solar energy stimulating investment also the in Russian Belarus, of within the EU and with the cost-competitiveness beyond, for 2020, which many member states have yet to have meet. yet states many member which 2020, for targets binding national by driven installations, higher recorded Uruguay. and Peru Colombia, Chile, in Argentina, projects for issued have been which bonds, to green have turned developers 88 89 The region continues to represent a shrinking shrinking a represent to continues region The In 2018, however, In 2018, demand increased significantly 85 92 86 Relative to 2017, 22 of the 28 EU countries EU countries 28 the of to 2017, 22 Relative To overcome these challenges, several several challenges, To these overcome 90 Ukraine installed more than 0.7 GW 0.7 than more installed Ukraine 83 Nearly 0.4 GW GW 0.4 Nearly 91 93 Other Other 84 87 In In

funding for such projects in Italy, Spain and elsewhere. and inSpain Italy, projects such for funding to provide begun had way banks EU, and in were under the profit to make a subsidies government direct on rely not did that projects large-scale commercial systems. commercial large-scale and medium- for premiums feed-in and self-consumption were price). market the at to utilities (or electricity to sell even consumers PPAs industrial large with long-term to sign plans with projects commercial sector, where additions were up 90% relative to 2017. relative were up 90% additions where sector, commercial in the projects utility-scale by increasingly driven is market the rooftops, residential on were installed additions of 40% than more end. year’s by were in operation systems solar-storage 120,000 approximately and storage, with were installed all systems new and amounted to 7.7% of annual gross electricity generation. to 7.7% electricity amounted annualand of gross weather, sunny and summer dry to unusually largely due TWh), 46.2 (to in 2018 17% than more increased output solar country’s The power. wind onshore and solar for auctions joint first Germany’s in capacity all won the PV solar and were over-subscribed, tenders solar capacity: lining up future for year was asuccessful also It to fossil fuels; and a continuing decline in solar PV system prices. system PV in solar decline acontinuing and fuels; to fossil relative PV solar of competitiveness the improved which System, top spot for the first time in five years. in five time first the for spot top region’s the regaining market, largest EU’s the was Germany PV. PPAs solar bilateral for direct of emergence was the EU in 2018 in the development A significant 2018, added a record 1.4 GW to close the year with 4.3 GW. 4.3 with year the to close GW 1.4 arecord added 2018, in and, 2014 since growth market steady seen has Netherlands The total capacity to 45.3 GW. to 45.3 capacity total to 3GW, 2017, bringing to relative nearly 70% than up more from 360 MW in 2017 to 2.4 GW in 2018. GW to 2.4 in 2017 MW 360 from had more than 1.7 million solar PV systems. PV millionsolar 1.7 than more had 96 One estimate One shows PPA in the region increasing activity 100 The main drivers of the increase increase the of main drivers The 95 for a total of 115 GW. 115 of atotal for over installations, 2017 up capacity, grid-connected of GW 8.3 EU added The 101 Developers have begun to build build to have begun Developers By the end of 2018, Germany Germany 2018, of end the By 99 36 The annual market was was market annual The 97 By late 2018, about 15 15 about 2018, late By 102 More than half of of half than More % 98

106 While While 105 107 103 104 94

03 99 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

France ranked third in the region for new installations (0.9 GW), The corporate PPA sector in Australia is still at an early stage, despite a slight contraction relative to 2017.108 France was followed but in 2018 it accounted for contracts worth hundreds of by Italy (which pushed its total capacity over 20 GW), Belgium, megawatts of future capacity.119 109 Hungary and Spain, all of which installed around 0.4 GW. The Generation from Australia’s rooftop systems was boosted an United Kingdom, which in 2017 ranked second in the region estimated 22% during the year due to the installation of additional and ninth worldwide for installations, saw its market continue to capacity, but also as a result of greater understanding among 110 decline, to below 0.3 GW, due to the removal of support policies. system owners of how to maximise system output, as well as In Italy and Spain, installations rose slightly in 2018, following the use of smart energy management systems and monitoring several years of negligible installations; both markets have been equipment; rooftop systems accounted for 4.2% of the country’s 111 driven predominantly by self-consumption in recent years. total electricity consumption.120 Overall, Australia’s solar PV Self-consumption is playing an important role in Australia as output increased more than one-third in 2018, at the expense of well. Solar energy is already cheaper than electricity from the coal and gas, to 11.7 TWh, or 5.2% of total generation.121 grid in most of the country, thanks to the falling price of solar The rising penetration of rooftop and large-scale solar PV (and PV generation, existing subsidies for small-scale installations, wind power) continued to reshape Australia’s grid during the year, and high wholesale electricity prices.112 By late 2018, more than challenging electric utilities.122 In Queensland, where about half 2 million Australian homes and businesses were powered by of the new large-scale capacity was installed, solar generation rooftop solar PV, meaning that one in five households in Australia has depressed wholesale power prices.123 The dramatic increase generates at least some of its electricity with solar energy.113 in large projects in 2018 began to cause network constraints; Australia’s capacity additions nearly tripled relative to 2017, to by year’s end, the greatest concerns for project developers about 3.8 GW, raising total capacity to more than 11.1 GW.114 were delays and changing rules for grid connections, which Every state and territory but Tasmania broke records for have resulted in cost-overruns and have undermined investor 124 new capacity in 2018.115 Residential and commercial rooftop confidence, slowing the project pipeline. installations were up more than 40% (to nearly 1.6 GW), for a The Middle East and Africa saw substantial progress in 2018, total of around 8 GW.116 Capacity additions of large-scale utility with an estimated 2.6 GW added for a year-end total of at least projects surpassed annual additions of rooftop systems for the 6.7 GW.125 In the Middle East, most of the new capacity was in first time: more than 2.4 GW was added, up from 0.1 GW in 2017, the United Arab Emirates (as much as 0.6 GW), Israel and Jordan increasing the total capacity of utility projects to 3.1 GW.117 At (both adding around 0.4 GW).126 However, many countries across year’s end, more than 3 GW of additional large-scale capacity the region have begun to take advantage of falling solar PV prices was under construction.118 to diversify away from fossil fuels, or to power their oil and gas

100 where supply does not meet peak loads. peak meet not does supply where areas in electricity reliable secure to and costs energy reduce to help programmes PV solar Tunisiaand rooftop –launched Arabia Saudi Oman, Morocco, Egypt, –including Africa North and East Middle in the countries several 2018, and in 2017 but Dubai, and Jordan of outside market anascent remains generation PV expand energy options and blackouts. reduce to plan country’s the of part represents power to wind) addition (in solar and expense, great at gas natural liquefied imports being planned, under construction or commissioned in or 2018. commissioned underbeing planned, construction plants large had or tenders PV solar held continent the on countries and fossil fuel extraction. fuel fossil and manufacturing mining, for operations their to power plants PV solar are erecting companies world, the around and Africa Across 2018. during capacity GW 0.6 its of majority vast the added which Morocco, and GW) 0.5 least (added at GW 0.7 nearly with Egypt MW), (added 60 GW 1.8 with Africa South were capacity cumulative for countries top Africa’s end, At year’s rising demand and provide energy access. meet mix, energy the to diversify ameans as increasingly viewed tip, solar is southern PV to the continent’s Africa From northern industries. extraction held a 300 MW solar-plus-storage tender. solar-plus-storage MW a300 held Lebanon and Dhabi), Abu and (Dubai Emirates Arab United the and Oman Kuwait, Jordan, including countries, in several 2019 top installer for the year. the for installer top was Africa’s and 2018 in early park solar Benban GW 1.8 planned chapter. Renewables operations. plants PV solar building are companies Around the world, to power their their to power 127 ) Egypt inaugurated the first phase of its its of phase first the inaugurated ) Egypt Tenders were held during 2018 and early early and 2018 Tenders during were held 135 131 Motivating factors include economics include Motivating economics factors A former gas exporter, Egypt now now Egypt exporter, gas Aformer 129 130 128 ( 132 Distributed solar solar Distributed p 133 See Distributed Distributed See Several other other Several 134

mining operations. mining platinum for plant coal MW 600 planned originally the than rather facility PV solar MW a 300 to construct in 2018 plans announced proven at scale. at proven have and been benefits mutual provide they but stage, an early at USD 1.6 billion in 3 GW of solar power capacity in India. capacity power solar of in 3GW billion 1.6 USD than more invest to venture joint a announced companies mining and the use of agricultural lands. agricultural of use the and potential environmental challenges grid-connection impacts, about concerns raising areas, vast cover can plants Large-scale homes. for 50,000 electricity enough to provide expected is which MW), (105 date to project largest Jordan’s and Metro; Delhi the to power used be will generation the of aquarter which from in India, project Rewa MW 750 the Americas; in the project PV solar largest the in Mexico, park Villanueva MW 828 the included plants commissioned Newly end. year’s by (up in 2017) 28 from countries 37 least in at operating larger and MW 50 of plants PV solar 235 least at of a total with 2018, to grow during continued projects large of number and size The solar PV (and PV power)solar wind capacity. in have invested also elsewhere and Chile in Canada, companies and the flexibility of solar power systems. power solar of flexibility the and as well as favourable regulations, environmental considerations projects in nearly every region of the world. the of region every in nearly projects project to date. project PV solar behind-the-meter largest the reportedly manufacturer, asteel for electricity to provide project MW a240 for was signed land-based projects. land-based to linked concerns the of to some in part due rapidly increasing 138 146 Soon thereafter, two of the world’s largest coal coal largest world’s the of two thereafter, Soon ( 142 137 See Sidebar 3. Sidebar p See Planning or construction began on very large large very on began construction or Planning In August, a US long-term electricity contract contract In a August, US long-term electricity 145 Hybrid solar PV-hydropower systems are systems PV-hydropower solar Hybrid 144 Interest in floating solar PV is is PV solar in floating Interest ) 140 143 136 A firm in Zimbabwe Zimbabwe in firm A 139 Mining Mining 141

03 101 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

SIDEBAR 3. Floating Solar PV

The number of floating solar photovoltaic (FPV) installations has the Republic of Korea, Singapore and parts of India, where increased exponentially in recent years, due to strong interest FPV deployment has been driven largely by land constraints. from regions that lack available land for solar deployment and Floating installations offer several benefits in addition to driven by the rapid development of large-scale projects in China. increased potential for solar PV in countries with limited land The first FPV installation was a 20 kW pilot system completed availability, including improved energy yield, elimination of in Japan in 2007, and the first non-research installation was a the need for major site preparation, improved output (due to 175 kilowatts-peak system in the US state of California in the cooling effect of water and less dust on panels), reduced 2008. Just over a decade later, floating systems exist in at least evaporation from water reservoirs and the use of existing 29 countries in nearly every region of the world and are under electricity transmission infrastructure at hydropower sites. consideration or development in several more countries. Industrial basins, irrigation ponds and drinking water reservoirs In 2018, installed capacity of FPV crossed the 1 GW mark, the have been the preferred locations for FPV installations, although same milestone that ground-mounted solar PV reached in the a variety of artificial water bodies and near-shore sites also year 2000. Global installed capacity more than doubled during have been used. In China, spurred by the national Top Runner 2018, with an estimated 786 MW added to reach a cumulative programme, developers are transforming some of the country’s total of some 1,314 MW by year’s end. (p See Figure 29.) New dozens of existing flooded coal mines by installing floating solar capacity additions included two 150 MW projects in China (both PV systems: in Anhui Province, such systems range from 20 MW in Anhui Province), the world’s largest floating solar PV projects to 150 MW per site. to date. China dominates the FPV market with about 75% of the The rise of FPV is also opening opportunities for combining global installed capacity (more than 950 MW), followed by Japan. solar PV technology with hydropower stations. The world’s The third-largest FPV market, the Republic of Korea, first hybrid FPV and hydropower system was installed in 2017 commissioned its first megawatt-size installation in 2018 – an in Portugal (220 kW at the Alto Rabagão Dam). However, the 18.7 MW system in North Jeolla. use of solar PV-plus-hydropower has already been proven at FPV installations open new opportunities for the deployment scale with ground-mounted solar systems: for example, the of solar PV, especially in countries with high population Longyangxia project in Qinghai, China combines 1,280 MW of density and competing uses for available land, such as Japan, hydropower and 850 MW of ground-mounted solar PV. 73.8% Non-renewable FIGURE 29. Floating Solar PV Global Capacity and Annual Additions, 2008-2018, and Top Countries,electricity End-2018

Megawatts

1,500 Installed capacity Annual additions 1,314 Megawatts 16% % Japan Previous year‘s capacity 73 China 1,200

900

6% Republic of Korea 600 678

300 169 Chinese Taipei % 68 United Kingdom % 11 Others % 0 2014 2015 2016 2017 2018

Source: World Bank Group, ESMAP and SERIS. See endnote 146 for this section.

102 Republic of Korea and Singapore, where population density the Taipei, Japan, Chinese India, China, as such places In 2018). in months 12 another for scheme FIT its of term the extended (which Vietnam and Malaysia in Japan, case the is as well, as projects floating include typically PV FITs solar for Preferential in 2018. was implemented that Program SMART state’s the of PV, solar part as floating use that projects solar value for the increases incentive and the US of state Massachusetts are floating; that projects for certificates energy renewable extra gives Korea of Republic the systems; ground-mounted for that than is higher that systems floating for tariff a feed-in Taipei offers Chinese example, For incentives. financial through are promoted installations FPV regions, and countries some In constrained by inflexible generation technologies. are or weak are grids where countries for particular in as well, openingexisting transmission opportunities assets of use make better can plants hybrid Such irrigation. as such purposes, other make for available water can also PV solar of use The complementary). be can PV solar from and and rainydry the generation from hydropower seasons, with in places (for example, availability water low of periods manage help and yield energy the boost can PV solar the Meanwhile, variability. resource solar of effects the reduce to used be can hydropower the solar-hydroIn systems, hybrid

for floating systems, with gains potentially as high as 10-15% as high as potentially gains with systems, floating for 5%higher to be estimated are conservatively (yields systems to ground-mounted relative PV solar floating of yield energy expected ahigher by are balanced costs However, these components. electrical resilient more and moorings floats, for need to the higher, slightly chiefly owing are still FPV of costs capital the basis, watt a per On systems. fixed-tilt mounted, of ground- that from greatly differ not does installations PV solar floating of (LCOE) electricity of cost levelised The in 2018. tenders to commercial led years in recent were deployed that plants gained or from pilot demonstration Singapore, experience and India In targets. energy renewable ambitious reach help to PV solar floating in using interest have shown governments cost, opportunity ahigh has or scarce is land and high is this section. Source: World endnote Bank See for Group, 146 and ESMAP SERIS. i economies of scale as of the scale marketeconomies expands. reflecting costs, in capital reductions have seen systems FPV Nevertheless, LCOE. to acomparable leading climates, in hot Research Institute of Singapore (SERIS). Energy Solar the by run test-bed PV floating the in measured As

i

03 103 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

SOLAR PV INDUSTRY The solar PV industry experienced significant growing pains in 2018. China continued to dominate global manufacturing as well as the world market for solar PV; as a consequence, the country’s decision to constrain domestic demand led to turmoil in the industry as Chinese modules flooded the global market.147 The resulting oversupply of cells and modules drove down prices and helped to open significant new markets, which counteracted the decline in China’s installations.148 Meanwhile, cell and module production capacity continued to increase.149 Record-low auction prices, driven by lower panel prices and intense competition, brought further consolidation in the industry.150 Trade disputes also affected the industry, weakening project pipelines in India and affecting growth in the United States.151 Overall, manufacturers had a challenging year with slim margins, and many manufacturers sold panels at below the cost There is a concern that tenders have been favouring the most of production.152 Nonetheless, competition and price pressures cost-competitive options and not necessarily the most advanced also led to investment in new, more-efficient production capacity or innovative technologies and designs.163 Even so, tenders have and to continued advances in solar PV technology, particularly driven a shift to market-oriented conditions in many countries in China.153 and to the introduction of new business models.164 Module prices declined about 29% in 2018, to a global average Trade policiesiii also influenced the industry in 2018, with two of 22.4 cents per watt, with the greatest decrease occurring of the top three country markets (India and the United States) after China’s policy changes in May.154 By one estimate, this placing new tariffs on China, the world’s largest manufacturer and helped lower the cost of installing 1 MW of solar PV by an exporter of solar products.165 Mid-year, the government of India average of 12%.155 As of late 2018, the LCOE from plants in placed a safeguard duty of 25% on solar products imported from operation was at levels close to or below the retail electricity China and Malaysia.166 Indian developers responded by stalling price in some countries, and in some cases even below project construction or sourcing imports from other countries in wholesale electricity prices.156 the region, particularly Singapore, Thailand and Vietnam.167 Along Record PPAs and tenders continued during 2018, with with a general slowdown in Indian demand during 2018, the duty some announcements of prices in the range of USD 20 per contributed to a reported 37% reduction in solar cell and module 168 MWh.157 Very low bid pricesi were seen in several countries, imports relative to 2017. By some accounts, however, it also led 169 including Brazil, India and Egypt (under USD 30 per MWh).158 to additions to domestic manufacturing capacity. Saudi Arabia announced the winning bid from its 2017 tender The United States imposed tariffs on nearly all major sources (USD 23.4 per MWh), and a PPA was signed in Dubai at a new of solar PV imports in early 2018.170 The prospect of tariffs led low for the United Arab Emirates (USD 24 per MWh).159 Germany to domestic stockpiling in 2017 and drove up panel prices in held an auction for large-scale projects that attracted bids below the country, making domestic production more profitable and EUR 40 (USD 45.8) per MWh for the first time, and solar PV beat spurring some new manufacturing plant construction.171 In wind energy in joint auctions, although average bid prices inched 2018, however, the import tariffs reduced demand for US solar up during the year.160 The United Statesii also saw long-term PPAs installations, a trend that was partially offset by a flood of Chinese signed at record low prices for solar generation (the lowest being panels entering the global market.172 Three additional sets of US under USD 24 per MWh) and for solar PV-plus-storage (median tariffs (on Chinese inverters and non-lithium batteries, on steel bid price of USD 36 per MWh).161 and on aluminium) adopted during 2018 also affected the US 173 Some in the industry consider tariffs in the USD 20 per MWh range solar industry. to be a “new normal” for winning tenders under ideal conditions Meanwhile, in September the EU ended anti-dumping and anti- (for example, high solar irradiation, stable policy environment), subsidy measures that had been in force since 2013 on cells and although the average solar PV LCOE remains somewhat higher.162 modules imported from China.174 The European Commission

i Note that bid prices do not necessarily equate with energy costs. Also, energy costs vary widely according to solar resource, project size, regulatory and fiscal framework, the cost of capital and other local influences. Distributed rooftop solar PV remains more expensive than large-scale solar PV but has followed similar price trajectories, and is competitive with (or less expensive than) retail electricity prices (although not wholesale prices) in many locations. See, for example, Galen Barbose and Naïm Darghouth, Tracking the Sun VIII: The Installed Price of Residential and Non-Residential Photovoltaic Systems in the United States (Berkeley, CA: Lawrence Berkeley National Laboratory, September 2017), p. 2, https://emp.lbl.gov/sites/default/files/tracking_the_sun_10_report.pdf, and IEA PVPS, Trends in Photovoltaic Applications 2018: Survey Report of Selected IEA Countries Between 1992 and 2017 (Paris: 2018), pp. 71, 73, http://www. ieapvps.org/fileadmin/dam/public/report/statistics/2018_iea-pvps_report_2018.pdf. ii These prices reflect the US Investment Tax Credit, which applies to residential and commercial solar systems. The tax credit is for 30% of installed system cost through 2019; it steps down to 26% in 2020, 22% in 2021 and 10% (commercial only) from 2022 onwards. iii In addition, in several countries measures were in place to encourage local production or to penalise the use of foreign-made products, from IEA PVPS, 2019 Snapshot of Global PV Markets (Paris: April 2019), p. 15, http://www.iea-pvps.org/fileadmin/dam/public/report/statistics/IEA-PVPS_T1_35_Snaps- hot2019-Report.pdf.

104 are developing global portfolios. global developing are substantial whereas capacity, domestic European multinationals have companies power States, United the and India in China, projects; PV solar of portfolios significant have acquired utilities some 29 GW worth of solar projects traded hands. traded projects solar of worth GW 29 some and funds, pension and companies insurance as such investors even with largeacquisitions, conservative attracting projects Solar (United States) rounded out the top 10. top the out rounded States) (United Solar Energy, GCL-SIKorea), Risen Talesun and (all China) First and of (Republic Q-CELLS (China/Canada), Hanwha Solar Canadian JA (allby Solar, Trina Solar followed China); LONGi and lead, Solar the maintained JinkoSolar companies: Chinese-based were three, that produces all of its modules. all its of produces that and thin films manufactures that company 10 top only the is Solar iv iii ii i projects. and companies to went downstream PV into solar flowing capital the of most in 2018 world the around elsewhere years, in recent development and research in and capacity manufacturing in investments significant made have China in companies some While value. added provide that and other developments add-ons technology specific markets, niche for products through to differentiation have turned manufacturers non-Chinese many result, a As manufacturing. high-tech in China on growing focus to the as well as funding mobilising in face they challenges to due compete to difficult manufacturers have foundNon-Chinese increasingly it through technologies. advanced costs with the expansion, aim of achievingfor further lower production plans announced and capacity manufacturing their increase to 2018 during investments significant made companies Chinese several China, in demand falling and reductions subsidy Despite running. year 10th the for in 2018 production global China dominated energy. renewable of supply the increasing of goal region’s the given to lapse, measures to allow the interest best EU’s was in the it that determined expansion has followed tax reform and trade tariffs). trade and reform tax followed has expansion (where States United the and Lanka Sri Africa, South Arabia, Saudi Nigeria, Morocco, India, including countries, in several wasand or under completed largely construction Chinese-owned) modules, for (mostly capacity manufacturing new China, Beyond in 2018. total the of 60% nearly shipped 87.2 GW, while module production rose 14.3%, to 85.7 GW. to 85.7 14.3%, rose production 87.2 GW, module while 2017, over to 21% than up more to be were estimated volumes production. cell for 10 top the were among also companies countervailing on solar-grade duties from the EU. polysilicon

Perovskite structured that (crystal) solar compounds includeperovskite cells are to simpleto manufacture to inexpensive relatively be andare expected amorphous technology. of thin film silicon absorption andother solar benefits Its with silicon good cells conventional of advantages crystalline HJT combines solar rays to thePERC rear the is (rather solar atechnique that of cell as into reflects the thereby ensuring module), absorbed than being increased efficiency components) systems andbalance of valueThe chain manufacturers solar also backsheets includes PV upstream wafers, chemicals, solar (e.g., glass, polysilicon, produce. They have achieved considerable efficiency improvements in improvements laboratoriesyears. in recent have considerable They produce. efficiency achieved efficiency potential is higher,cells. solar be efficiency can manufacturedit lowat relatively temperatures, steps it fewerthan production and dootherrequires high-efficiency inlow-lightwell as performance improved environments. andoperations andmaintenanceas well as providers. developers, downstream project procurement includingengineering, andconstruction companies, actors, 177 Seven of the top 10 manufacturers, and all of the top top all and the of manufacturers, 10 top the of Seven 175 In turn, China ended anti-dumping and and anti-dumping China ended turn, In 186 185 The year broke records for solar project project solar for records broke year The 188 180 The top 10 module suppliers module 10 top The 182 181 China’s cell production production cell China’s 178 Most of these these of Most 184 187 Leading 179 First First 176 183 i

technologies. cell new developing and types different of cells stacking by efficiency cell technologies. efficiency high- other than steps production fewer with and temperatures low at relatively manufactured be can and efficiencies higher the way. China leading with policy, by in part driven been has ramp-up by late 2019 or early 2020. early or 2019 late by available commercially technology its make to aims company The 2018. of end the by GW 60 to exceed in 2017, GW 35 than was expected and to more in 2013 lines pilot afew from increased capacity production cell PERC storage. energy including areas, service new into expanding and innovations labour-saving in investing continued world the around companies O&M pressures, to such response In countries. some in markets shifting or shrinking by as well as cost, of reflective necessarily was not that pricing throat cut- by affected were downstream and upstream Companies throughout the year. achieved were efficiencies module and cell record new and manufacturers topushed develop technologies, advanced has the LCOE reduce and efficiencies to increase drive The 2018. in bankrupt went companies solar Japanese 95 estimated an companies: solar for profits falling and payments in FIT to reductions due in bankruptcies rise asteady seen has Researchers also perovskite advanced Researchers (PERC) Cell Rear Emitter Passivated production of heterojunction cell technology (HJT) to factories converting are manufacturers several expansions, because it increases efficiencies with modest investment. with modest it increases efficiencies because variety cell solar silicon monocrystalline the for standard new the remainedas highly the industry on imports. dependent particularly equipment, find to and financing get to developers for difficult it made tenders from prices energy low very India, price pressure, with a notable increase in consolidation in India. in consolidation increase anotable with pressure, price of bite the felt (O&M) maintenance companies and operations the policy changes mid-year, in and Japan. changes policy the following China, in notably most perhaps bankruptcies, several efficiency record for a single junction silicon solar cell cell (26.7%). solar silicon junction single a for record efficiency the exceeding 2018, in late cell solar tandem perovskite-silicon a for efficiency conversion power 28% arecord announced PV more environmentally materials. friendly with content lead replace and stability improve long-term costs, reduce and efficiency year, to increase the working efficiency. theoretical maximum their reaching to close are marketplace), the in cells solar typical for (20-22% efficiency and stability for competition the of are and ahead market the of 90% about for 200 196 Although mono PERC is the focus of most capacity mono Although capacity PERC is of the focus most Researchers are working to overcome these limits limits these overcome to working are Researchers 197 195 Silicon-based solar cells, which solar account cells, Silicon-based 204 201 ii technology has become become has technology 199 iv 202 The large and rapid rapid and large The technology during during technology 190 UK-based Oxford Oxford UK-based Since 2013, Japan Japan 2013, Since 194 189 iii The year saw saw year The , which offers offers , which 192

Even Even 191 In In 203 193 198

03 105 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

Module manufacturers have continued to develop advanced In turn, such developments have prompted developers of technologies, such as multi-busbarsi and half-cut cellsii, which large-scale projects to invest increasingly in rigorous quality were first used in China under the country’s Top Runner assurance programmes to secure return on their investment programme but increasingly are seen elsewhere as well.205 By in the medium and long term.220 Governments and non-profit one estimate, at year’s end there were at least 15 technology organisations, as in Australia, for example, have stepped up options for modules, and the field was only expanding.206 Bifacial efforts to test and certify panels and other components in order modules, which can capture light on both sides, also offer to protect consumers.221 As new technologies emerge, not significant potential gains in output that are expected to more only do they make decisions more complex for developers (for than make up for their additional cost.207 Large projects with example, which module type to use, trackers or not), but there bifacial modules already were being deployed in 2018, although also is a need for new benchmarking tests.222 Quality assurance quality-related uncertainties remained.208 First Solar took a giant companies, such as DNV GL of Norway, are working with step forward with its transition to the Series 6 thin film module, universities and research institutions to advance and extend and in 2018 the company announced plans to triple its US reliability and performance tests for modules.223 In 2018, DNV manufacturing capacity.209 GL issued the world’s first project certificate for a solar PV 224 At the time, the Improvements in geographic information systems are helping plant to a 100 MW facility in Telangana, India. company’s service specification was believed to be the world’s developers identify locations with high solar resource potential only global guideline for certifying solar PV projects.225 for large-scale projects, and other advances are helping to reduce time requirements for project construction and commissioning.210 To help reduce uncertainty related to solar projects, large More and more large projects are using single-axis trackersiii, insurance companies have begun guaranteeing output from which flatten the production curve and increase yield.211 In 2018, solar farms. A new product sold by Swiss Re AG, called a Solar global tracker shipments jumped an estimated 40%.212 Revenue Put, reportedly can guarantee as much as 95% of a 226 Once projects are in operation, improved inverteriv reliability, solar plant’s expected output. remote technologies and advanced cleaning options are helping Other developments in 2018 included the opening in France of to reduce labour-related costs and outage times.213 Digitalisation what was believed to be the first non-pilot facility in Europe – is improving plant monitoring processes, and new technologies and possibly the world – dedicated to recycling solar panels.227 such as aerial drones, combined with artificial intelligence, are In early 2019, Sembcorp and Singapore Polytechnic signed a helping with preventative maintenance, speeding up procedures, collaborative agreement to commercialise Singapore’s first solar increasing plant efficiency and reducing associated costs.214 panel recycling process.228 Despite tremendous steps forward in solar PV technologies, the The linkages between solar PV, storage and electric vehicles need to drive down manufacturing and project development costs (EVs) continued to expand during the year. Solar cell and module has raised concerns that manufacturers and developers could be manufacturer Hanwha Q Cells announced plans to enter the pushed to cut corners, and that quality could be compromised.215 solar rooftop market with solar-plus-storage for residential Already, poor quality – from product manufacturing and shipping, customers.229 In early 2019, the Dutch oil giant Shell purchased to project design and construction, to commissioning and O&M Sonnen, the leading manufacturer of home batteries in Germany, stages – is an issue of concern in a number of countries.216 In with an eye towards becoming the utility of the future – focused India, as a result of price pressure, inexperience, extreme climatic on clean energy, EVs and distributed electricity generation with conditions and weak government requirements, many firms have storage.230 China’s BYD, which began by manufacturing batteries cut corners on quality in order to operate on thin margins, so and later expanded into EVs, has begun manufacturing solar that they can bid low and win projects.217 Smaller rooftop systems panels as well.231 In 2018, BYD and Kostal (Germany) signed a in India have experienced quality challenges as well.218 Other deal to provide storage solutions for residential and commercial countries, from Australia to Pakistan, also have faced component solar PV systems.232 In Germany, companies like Enerix, quality issues due to the desire for cheap imported modules and Sonnen and Solarwatt, which were once struggling due to a to a lack of testing and standards.219 shrinking domestic solar PV market, are thriving thanks to the growing demand for energy storage systems.233 (p See Systems Integration chapter.)

i Busbars are the thin strips of copper or aluminium between cells that conduct electricity. The size of the busbar determines the maximum amount of current that it can carry safely. ii Half-cut cells are fully processed solar cells cut in two pieces to reduce cell-to-module losses during assembly, which increases efficiency and boosts power. iii Trackers enable panels to track the movement of the sun. iv Inverters convert direct current electricity from solar panels to alternating current for the grid.

106 03

of new capacity additions in 2018, with the balance made up CONCENTRATING SOLAR by tower plants.7 By year’s end, the plants under construction THERMAL POWER (CSP) included just over 1 GW of trough systems, 0.8 GW of tower systems and 65 MW of Fresnel plants (at two facilities in China).8 CSP MARKETS In China, three new CSP plants with a combined capacity of 200 MW entered operation in 2018: the 100 MW Shouhang An estimated 550 MW of concentrating solar thermal power Dunhuang Phase II tower project (11 hours TESiii), the 50 MW (CSP)i came online in 2018, increasing cumulative global Supcon Delingha tower project (7 hours TES) and the 50 MW capacity more than 11% to just under 5.5 GW.1 (p See Figure 30 CGN Delingha parabolic trough project (9 hours TES).9 These and Reference Table R18.) This annual increase represents the projects form part of a national strategic plan to build local largest gain since 2014, and it occurred despite delays in several experience in the implementation of CSP by targeting more projects that had been scheduled to begin operation in 2018.2 than 5 GW of capacity by 2022.10 Under this plan, China’s central By year’s end, the pipeline of CSP projects under construction government in 2018 reduced the number of planned CSP projects reached around 2 GW in 10 countries across Africa, Asia, the qualifying for preferential FITs from 20 to 16; in addition, the Middle East and South America, with most of this capacity being government reduced FITs for plants that were initially targeted built in the United Arab Emirates (0.7 GW) and China (just over for completion in 2018 but delayed into 2019 and 2020.11 0.5 GW).3 All but 3 of the 23 plantsii under construction by the India was the only other country in Asia to have CSP capacity end of 2018 planned to include thermal energy storage (TES).4 under construction by the end of 2018.12 The 25 MW Gujarat Solar For the third consecutive year, new capacity came online only in One facility (9 hours TES) was expected to enter operation in late emerging markets. This trend is expected to continue because 2019, and the 14 MW Dadri Integrated Solar Combined-Cycle nearly all commercial CSP capacity under construction by the plant also was under construction.13 end of 2018 was in emerging countries.5 China and Morocco MARKET AND INDUSTRY TRENDS In North Africa, Morocco brought capacity online with the led the market in new additions, followed by South Africa and completion of the 200 MW Noor II facility (7 hours TES), and the Saudi Arabia.6 adjacent 150 MW Noor III plant (7 hours TES) was at an advanced Parabolic trough and tower technologies continued to dominate stage of construction by year’s end; once the plant is operational, the market. Parabolic trough plants represented around 70% Morocco’s total CSP capacity will exceed 0.5 GW.14

i CSP is also known as solar thermal electricity (STE). ii Two of these plants without TES are integrated solar combined-cycle (ISCC) facilities, hybrid plants that use both solar energy and natural gas to produce electricity. iii Storage capacity for CSP facilities with TES is typically reported in “hours” of storage. For CSP plants that incorporate TES, the thermal storage capacity is provided, in parentheses, in hours.

FIGURE 30. Concentrating Solar Thermal Power Global Capacity, by Country and Region, 2008-2018

Gigawatts World Total 6 5.5 Gigawatts Rest of World Spain 5 United States

CSP capacity 4 increased 11% 3 in 2018, led by China and Morocco. 2

1

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: See endnote 1 for this section.

107 RENEWABLES 2019 GLOBAL STATUS REPORT

South Africa ranked third for capacity additions in 2018. The Elsewhere, construction restarted at Chile’s 110 MW (17.5 hours TES) commissioning of the 100 MW Ilanga-1 plant (4.5 hours TES) Cerro Dominador CSP plant, which was expected to be operational increased the country’s total operating CSP capacity by just in 2020.22 Construction had been delayed due to financial challenges over 30%, to 400 MW.15 In addition, the 100 MW Kathu Solar at the project’s developer and contractor, Abengoa (Spain).23 Park (4.5 hours TES) was commissioned in early 2019, bringing In France, the 9 MW eLLO Fresnel facility, under construction at much-needed dispatchable power onto the country’s grid the end of 2018, entered operation in early 2019.24 16 during a period of capacity shortages and rolling blackouts. Spain remained the global leader in existing CSP capacity, with Nonetheless, the long-term future of CSP in South Africa is 2.3 GW in operation at the end of 2018, followed by the United uncertain: an updated draft Integrated Resource Plan, released States, with just over 1.7 GW.25 These two countries accounted by the government in early 2019, included no allocation for CSP for around 75% of the global CSP capacity in operation at year’s 17 beyond plants that already were under construction. end, but no new capacity has entered commercial operation in In Saudi Arabia, operations commenced at the 50 MW Waad Spain since 2013 and in the United States since 2015.26 Neither al Shamal Integrated Solar Combined Cycle (ISCC) plant, and country had new facilities under construction as of the end of construction continued at the country’s 43 MW Duba 1 ISCC 2018; however, in early 2019 Spain’s government announced a facility.18 Construction on CSP facilities also was under way target of 5 GW of new CSP capacity by 2030.27 elsewhere in the Middle East. Kuwait’s 50 MW (10 hours TES) Almost 17 GWhi of thermal energy storage, based almost entirely Shagaya plant was expected to reach commercial operation on molten salts, was operational in conjunction with CSP plants in 2019, and construction began on the United Arab Emirates’ across five continents by the end of 2018.28 (p See Figure 31.) 700 MW CSP plant at the Mohammed bin Rashid Al Maktoum With the exception of ISCC plants, all CSP plants that entered 19 In Israel, work continued on the 110 MW (4.5 hours Solar Park. operation between the end of 2014 and the end of 2018 TES) Ashalim Plot A parabolic trough facility, which entered incorporated a TES system.29 TES continues to be viewed as commercial operation in April 2019, and on the 121 MW Ashalim central to the operational value of CSP by enabling it to be a Plot B tower facility, expected to come online later in the year.20 In dispatchable source of power, increasing its capacity factor, total, just over 1 GW of CSP capacity was under construction in providing a source of grid flexibility and allowing for the integration the Middle East at the end of 2018.21 of higher shares of variable renewable energy in power systems.30 (p See Systems Integration chapter.)

i The total TES capacity in MWh is derived from the sum of the individual storage capacities of each CSP facility with TES operational at the end of 2018. Individual TES capacities are calculated by multiplying the reported hours of storage for each facility by their corresponding rated/net power capacity in MW.

FIGURE 31. CSP Thermal Energy Storage Global Capacity and Annual Additions, 2008-2018

Gigawatt-hours 20 World Total Annual additions 16.6 Gigawatt-hours Previous year‘s capacity +3.8 15 12.8 12.3 +0.5 +0.7 11.6 9.8 9.8 +1.8 10 +3.3 6.56.5 +2.0 5 4.5 2.0 +2.6 0.8 +1.2 0.4 +0.4 +0.4 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: See endnote 28 for this section.

108 storage applications. hours) four than (greater long-duration for competitive more be may TES with CSP that showed 2019 in early released a study 2018, in cost-effective increasingly became storage battery with being built elsewhere in the world. facilities than cheaper 40% to be were estimated construction conditions market certain under benefits cost (which offer tower projects both of deployment wider to the during the year. the during brought either intoprojects or operation under construction of 1GW over just with in 2018, globally developer project CSP i Electric. Shanghai firm Chinese ACWA Power to the developer Saudi was awarded the by Dubai, in completion, upon MW) (700 plant CSP largest world’s the to be for what contract is expected although the construction in 2018, were finalised capacity CSP new for auctions or tenders new No plants. CSP value of operational improve the to potential to due its TES on have focused developers CSP industry. national a new of growth rapid the for allowed and processes and skills CSP local of development the have supported technology) energy a key as sees government (which central the FITs CSP China, In for during deals concluded thisCSP period. 16 of to an analysis according 2018, early and 2016 between sharply fell systems CSP new building of costs capital The States. United the and Spain of markets CSP traditional the outside growth industry of years several followed This projects. in active involved regions and countries of range a broader from companies construction and developers with in 2018, geographically to diversify continued industry CSP The INDUSTRY CSP auctions, also have helped reduce costs. reduce have helped also auctions, competition. market greater driving is China), which in (particularly suppliers CSP more of emergence the and size in project an increase design, project and in technology innovations to as ongoing

For example, tower plants typically can achieve higher specific yield values and hence greater cost efficiency at higher and lower(greater latitudes than greater values andhence efficiency yield cost higherspecific achieve can tower typically plants example, For approximately endnote 30° to 33 See 35° ornorth). south forthis section. 33 Procurement mechanisms, including competitive competitive including mechanisms, Procurement 40 38 35 In 2018, Chinese projects under under projects Chinese 2018, In 39 ACWA leading Power was the 36 34 32 Costs declined due due declined Costs 31 i ) and TES, as well well as TES, ) and 37 While solar PV PV solar While alongside their planned CSP facility. alongside their planned CSP PV solar of MW 70 to build in 2018 apermit for applied plant CSP construction in 2018. construction under or completed projects on –were active States United the and Spain Africa, South Arabia, Saudi Kuwait, Israel, France, from others China and 7from – including developers other 14 At least in conjunction with a high-temperature CO to work intended gaseous) and solid (liquid, mediums transfer for research aimed at developing three heat- competing Energy of Department US the from in million funding 72 USD included in 2018 announced support research New costs. runninglower and efficiency higher for allowing exchangers, heat in CSP temperatures operating higher achieving on year, way the during were under focused many which of activities development and research CSP-related Several irradiance. hours with poor daylight during or night, at dispatch power for TES with CSP and hours daylight during generation PV solar low-cost relatively using by electricity of costs levelised lower allow for can PV solar and CSP both include that projects Hybrid facilities. PV solar with in parallel developed or built are being plants CSP Several (Spain). TSK and States) (United (China), Energy (Spain), Renewable Acciona SEPCO3 GE (China), (Spain), (Spain), Sener Abengoa Electric Shanghai included and/or construction) under completed MW of terms cycle efficiency as much as 10%. as as much efficiency cycle 100 MW solar PV plant. PV solar MW 100 to an existing adjacent construction under is which in Chile, facility Dominador Cerro the and capacity; PV solar of 1 GW over to just next built being is facility CSP MW 700 the where Emirates, Arab United in Park the Solar Maktoum Al Rashid bin developing high-temperature systems. for components CSP on focused projects research 15 for in million funding 12.4 USD CO alternative to conventional steam-driven power generation, the 2 power cycle offers the potential to raise thermal power thermal raise to potential the offers cycle power 41 The leading CSP contractors (ranked in contractors CSP leading The 44 42 In Australia, developers of the Aurora the of developers Australia, In 43 Examples include the Mohammed Mohammed the include Examples 2016 and early 2018. and early 2016 between sharply fell systems CSP new building of capital costs The 47 45 The DOE also announced DOE The

2 power cycle. power 46 48 An An

03 109 MARKET AND INDUSTRY TRENDS RENEWABLES 2019 GLOBAL STATUS REPORT

water heaters – the core sales segment of the solar thermal SOLAR THERMAL HEATING sector for at least a decade – dipped 44% between 2015 and AND COOLING 2018 because of market saturation and reduced construction activities.6 The growth in China’s so-called engineering segment, SOLAR THERMAL HEATING AND COOLING MARKET which includes hot water systems in multi-family homes, public buildings, and tourism and industrial facilities, did not offset the Solar thermal technologies are used extensively in all regions of strong decrease in the residential market.7 the world to provide low-temperature heat for hot water, space Gross additions in China during 2018 were 24.8 GWth, down heating and drying. Increasingly, industries, hospitals, hotels, 8 5% from the previous year (26.1 GWth). (p See Figure 33.) The laundries and other large heat consumers are turning to solar remaining countries among the top 20 for newly installed solar thermal systems to meet their needs for high-temperature heat, thermal capacity added a combined total of 6.5 GWth, 4% more steam and refrigeration. 9 than the 2017 volume of 6.3 GWth. The top 20 countries for new By the end of 2018, residential, commercial and industrial clients installations comprised around 94% of the global market in 2018.10 in 130 countries benefited from solar heating and cooling While China’s market continued to contract, important markets 1 systems. Glazed (flat plate and vacuum tube) and unglazed in several regions increased their annual installations relative solar thermal systems combined provided around 396 TWh to 2017. These markets included Australia (up 2%), India (17%), (1,426 PJ) of heat annually – equivalent to the energy content Mexico (4%), South Africa (2%) and, more notably, several 2 of 233 million barrels of oil. Cumulative global operating countries in Europe: Cyprus (5%), Denmark (128%), France (2%), capacity for these collector types reached an estimated Greece (4%), Poland (179%) and Spain (2%).11 Overall, annual 480 GWth at year’s end, up almost 2% from the previous year’s installations in 2018 rose in 10 of the world’s 20 largest markets – 3 total of 472 GWth. (p See Figure 32 and Reference Table R19.) a positive development compared with 2017, when only 6 of the 12 Globally, 33.3 GWth of solar thermal capacity was added in 2018, largest markets reported sales increases. 4 down 4% from the 34.6 GWth newly installed in 2017. The decline Turkey, India, Brazil and the United States were again the leaders is attributed to reduced demand for residential systems in China, in new solar thermal installations, after Chinai.13 Australia overtook which continued to be the world’s largest national market for solar Germany to rank sixth, and Germany fell to seventh place due to a thermal systems.5 Although China still dominated gross additions steadily shrinking national market.14 The list of the top 20 national (accounting for 74%), the country’s demand for residential solar solar thermal leaders remained largely unchanged in 2018, with

i Year-end 2018 data for cumulative capacity in operation are not available for countries other than China.

FIGURE 32. Solar Water Heating Collectors Global Capacity, 2008-2018 World Total Gigawatts-thermal 480 Gigawatts-thermal 500 472 Glazed 456 collectors 435 409 Unglazed collectors 400 374

330

300 285 242 203 200 170

100

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Note: Data are for glazed and unglazed solar water collectors Source: IEA SHC. See endnote 3 for this section. and do not include concentrating and air collectors.

110 03

some exceptions: Denmark and Cyprus (despite its small size) implementing subsidies joined the ranks of the top 20 countries, while Chinese Taipei and that target the deploy- China’s market for Japan dropped off the list.15 ment of residential and solar Vacuum tube collectors accounted for 72% of the capacity added commercial solar thermal 23 globally in 2018 (down from 73% in 2017); they represented more systems. Incentives are industrial than 80% of new installations in China and India, and 50% of the linked to the volume of market in Turkey.16 Flat plate collectors had a 24% share (up from hot water that a given heat 23% in 2017) and were the dominant technology in the largest solar thermal system is driven by policies to European countries.17 Unglazed collectors, which are commonly can produce, and cover combat air pollution. used to heat swimming pools, remained unchanged at 4% of the 20-40% of investment market and accounted for more than a third of new installations costs, greatly shortening in Australia, Brazil, South Africa and the United States.18 payback periods and driving demand for solar thermal systems in construction and The Chinese market continued to transition from vacuum tube manufacturing.24 collectors towards flat plate systems, even though vacuum tubes still accounted for most of the newly installed capacity.19 China’s market At the end of 2018, China’s cumulative solar thermal operating for vacuum tube collectors contracted a further 7% relative to 2017, capacity was an estimated 338 GWth, or around 70% of the 25 while new flat plate collector area was up 3%.20 Sales of flat plate world’s total. China’s cumulative capacity increased only 1% collectors have been driven by building codes that mandate the use in 2018 because replacement of the systems (87%) dominated 26 of solar thermal systems (and heat pumps) in new construction and gross additions. A typical Chinese-made system lasts around major renovations as means to reduce local air pollution.21 These 10 years, so only 13% (3.1 GWth) of China’s 2018 sales contributed 27 regulations have increased the demand for façade- and balcony- to increasing total operating capacity. MARKET AND INDUSTRY TRENDS integrated applications, where flat plate collectors have been a In Turkey, uncertainty about the economy, the national currency preferred solution compared to vacuum tube collectors.22 and the domestic construction market slowed market growth.28 Solar space heating and solar process heat are among the Installations were down 2%, to 1.3 GWth, following a modest technologies explicitly mentioned in China’s 13th Five-Year Plan increase of 4% in 2017.29 A 48% decline in construction permits (2016-2020) as options for combatting air pollution. Northern as well as relatively high interest rates resulted in lower sales provinces, including Beijing, Hebei and Shandong, responded by of solar thermal collectors in 2018.30 The volume was down

FIGURE 33. Solar Water Heating Collector Additions, Top 20 Countries for Capacity Added, 2018 Gigawatts-thermal

-5% 25

20 1.5 Unglazed +17% -2% collectors Glazed – evacuated 1.2 15 tube collectors Glazed – flat plate 0.9 -1% collectors 10 -5% 0.6

+2% -8% 5 +179% 0.3 -3% +4% +4% +128% +2% -8% +2% % 1.5 -3 -1% -7% +5%+2% 0

Italy China India Brazil Israel Spain Turkey MexicoGreecePoland Austria Tunisia Cyprus France AustraliaGermany Denmark South Africa Switzerland United States

Note: Additions represent gross capacity added. Source: See endnote 8 for this section.

111 RENEWABLES 2019 GLOBAL STATUS REPORT

Sales increased in most of the largest solar thermal markets outside China.

for both vacuum tube collectors, which were used in Turkey´s The United States ranked fifth for solar thermal sales in 2018

colder regions (such as middle and eastern Anatolia), and flat (totalling 623 MWth) and remained the world’s largest market for

plate collectors, which were installed in commercial projects at unglazed collectors, followed by Brazil (439 MWth) and Australia 31 44 schools, dormitories, military stations and prisons. (280 MWth). The unglazed segment accounted for 82% of US

th added (down 5% from For the second year in a row, India ranked third globally for additions during the year, with 511 MW 2017).45 Both glazed and unglazed collector segments fell short of new installations.32 The volume of sales was up significantly their 2017 volumes due to relatively low oil and gas prices and an (17%) over 2017, bringing new solar thermal installations to just 46 33 increasing focus on solar electricity instead of heat. below 1.3 GWth in 2018. Market development remained below expectations, however, in part because the Indian government For the first time, Australia rose to rank sixth among the largest prioritised the deployment of solar power capacity during 2018, global markets. Unglazed collectors continued to dominate the and new policies to support solar thermal systems were lacking.34 Australian solar thermal market, which has fluctuated at around 47 th every year since 2013. Preliminary numbers suggest India’s demand for vacuum tubes rose in 2018, with importsi 280 MW a modest upward trend in the market for glazed collectors, with from China reaching 5.8 million tubes, up 27% over 2017.35 This 48 new installations totalling around 128 MWth (up 6%). The key increase was due to low prices of raw materials and to the market driver was again the national renewable energy target, resulting cost advantages of vacuum tubes compared to flat plate which allows electric utilities to purchase small-scale renewable collectors. By contrast, flat plate collector sales in India dropped 49 36 technology certificates to meet their obligations. Residential 46% (147 MWth) from their peak in 2017 (278 MWth). The reduced and commercial solar hot water systems with glazed collectors demand for flat plate collectors was attributed to price increases of any scale are eligible for these certificates, and thus system that resulted from rising prices for copper and glass covers, both owners can reap benefits beyond energy cost savings.50 of which are key system components.37 Germany, Greece, Poland, Spain and Italy were Europe’s top Brazil added 0.88 GWth of solar thermal capacity in 2018, slightly five solar thermal markets in 2018.51 Germany’s solar thermal below 2017 levels.38 The main reason for the decline (of roughly 52 additions of 401 MWth were down 8% relative to 2017. The 1%) was a slowdown in implementation of the country’s social market decrease was a result of the generally low rate of housing programme, due to a lack of public funding.39 From refurbishment of old heating systems, the still relatively high 2009 to 2015, before Brazil’s financial crisis, the programme cost of residential solar thermal systems and the high demand effectively drove the country’s solar heat sector by mandating for heat pumps, particularly in new construction.53 the installation of solar water heaters in housing constructed for low-income families.40 The market contraction also was due Poland broke all records with its 179% increase in solar thermal to uncertainty surrounding Brazil’s 2018 presidential campaign installations relative to 2017, which was a weak year due to 54 and the election process, which constrained spending in private delays in tender processes. New installations of 217 MWth households, still the country’s dominant market segment for solar in Poland in 2018, approached the level of Greece.55 Poland’s thermal systems.41 emissions reduction programme – which aims to improve The Brazilian city of Belo Horizonte, which has installed more local air quality – drove the country’s solar thermal market by than 3,500 solar water heating systems in blocks of flats over providing municipalities with support for the installation of more- 56 Several the past two decades, further strengthened its position in 2018 efficient solar thermal and biomass heating systems. municipalities awarded contracts for tenders that were issued as the country’s solar city.42 In August, Brazil’s largest tennis and under the policy in 2017, yielding hundreds of new residential sports club, located in Belo Horizonte, commissioned a flagship solar water heater installations.57 However, the tenders also 2.3 MWth project that is expected to provide 70% of the club’s spurred fierce competition in system prices and did not achieve water-heating demand.43 sustainable market development for solar thermal systems.58

i In an early-2018 consultation with policy makers, solar thermal industry representatives pointed out that India’s increasing reliance on imported solar thermal technologies undercut the government’s ongoing “Made in India” campaign and reduced domestic employment. The government had yet to introduce any measures to address the issue as of end-2018.

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