PHOTOVOLTAIC SOLAR POWER: 25% of the World’S Electricity Low-Carbon in 2050!

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PHOTOVOLTAIC SOLAR POWER: 25% of the world’s electricity low-carbon in 2050!

État des lieux et analyses 5 ©TATIC Current situation and analysis collection

The Foundation realises studies which contribute to draw up a synthesis of the state of the knowledge on a subject, by ap- proaching as far as possible the economical, social and ecological aspects.

Previous publications:

Agrocarburants Agriculture et gaz à effet de serre The photovoltaic solar energy Biodiversité et économie : Cartographie des enjeux les clefs pour comprendre en partenariat avec le Réseau (2011) en partenariat avec le Réseau Action Climat (2010) en partenariat avec Humanité Action Climat (2008) et Biodiversité (2012)

Les solutions de mobilité soutenable Mobilité au quotidien : comment Démocratie participative : en milieu rural et périurbain lutter contre la précarité guide des outils pour agir

en partenariat avec le Réseau (2014) 2ème édition (2015) Action Climat (2014)

November 2015

Coordination and editing Nicolas Ott – consultant

Steering committee Marion Cohen (Fondation Nicolas Hulot) Alain Grandjean (Economist, Conseil scientifique de la Fondation Nicolas Hulot) André-Jean Guérin (Conseil Economique, Social et Environnemental, administrateur de la Fondation Nicolas Hulot)

Traduction LA ROSE DES VENTS – Contact : [email protected]

We thank all the experts consulted for their contribution and the time they devoted Ch. Ballif, X. Barbaro, M. Brewster, A. Burtin, A. Chaperon, A. Cuomo, O. Daniélo, G. de Broglie, L. Deblois, I. Deprest, S. Dupré La Tour, N. Gauly, S. Lascaud, B. Lemaignan, D. Lincot, P. Malbranche, D. Marchal, A. Mine, O. Paquier, C. Philibert, Pedro A. Prieto, A. Roesch, JP. Roudil, E. Scotto, R. Sharma, P. Sidat, JM. Tarascon, G. Vermot Desroches.

THE CONTENT OF THE REPORT COMMITS ONLY THE FONDATION NICOLAS HULOT AND NOT THE EXPERTS QUESTIONED. PHOTOVOLTAIC SOLAR POWER: 25% of the world’s electricity low-carbon in 2050!

TABLE OF CONTENTS

1. INTRODUCTION: SUMMARY AND CONTEXT...... 8

1.2 The sun and mankind: a relative match between solar irradiance and human establishment...... 9 1.3 The physical concepts on which photovoltaic power is based...... 10 1.4 The various technologies and uses of photovoltaic power...... 10

2. OVERVIEW AND PROSPECTS FOR DEVELOPMENT OF PV: THE ECONOMIC AND PHYSICAL DATA...... 12

2.1 From a niche market to a competitive industry in several countries...... 12 2.1.1 Photovoltaic power, long confined to a niche market ...... 12 2.1.2 Support programs allow access to a sufficiently large market to push down costs...... 13 2.1.3 Photovoltaic power is now competitive in many countries...... 14 2.2 Recent and future cost trends for a photovoltaic module...... 16 2.2.1 Improvement in the efficiency of photovoltaic cells ...... 16 2.2.2 The impact of improvement in industrial processes on the competitiveness of photovoltaic power...... 20 2.2.3 Inverters...... 22 2.2.4 Other costs, “Balance of System”...... 23 2.3 Photovoltaic power cost prospects which will make it a very competitive energy...... 25 2.3.1 An expected halving of capital costs...... 25 2.3.2 Trend for the LCOE up to 2050...... 26 2.4 Needs for investment in massive production of electricity ...... 27 2.5 Supply constraints and the EROI issue...... 32

3. CHALLENGES FACING PV: INTERMITTENCY MANAGEMENT...... 36

3.1 Integration into grids ...... 36 3.2 Consumption management...... 40 3.3 Storage, a new revolution?...... 44 3.3.1 The various storage technologies...... 45 3.3.2 Technical and economic prospects for batteries ...... 46 3.3.3 The energy and non-energy impacts of electrochemical storage...... 51

4. ARE MANUFACTURERS PREPARED FOR THE POTENTIAL (R)EVOLUTIONS TO COME?...... 53

4.1 Photovoltaics is not THE solution, but an important solution to global energy issues ...... 53 4.2 The sun, gold for the salvation of developing countries?...... 55 4.2.1 The electricity grid of tomorrow...... 55 4.2.2 Photovoltaics: an immediate solution to significantly improve the life of billions of human beings ...... 55

5. CONCLUSION...... 57

6. BIBLIOGRAPHY ...... 58 EXECUTIVE SUMMARY

n the eve of COP21, there is no At the start of the 21st millennium, the tiveness gains, while certain compo- longer time to question the re- levelized cost of a photovoltaic instal- nents of the cost of these facilities will O ality of climatic disorders; solu- lation was about $750 per MWh com- increase (safety requirements for the tions must be implemented. Moreover, pared with less than $70 per MWh for nuclear industry, allowance for a car- even today, more than 1.3 billion hu- other types of production. Subsidies bon cost for gas- and coal-fired power man beings have no access to elec- (especially in Europe) and industrial stations, particulate emission reduction tricity. How can we provide the ener- and technological progress then made standards for coal and growing pres- gy services essential to those who are it possible to expand the market for sure from civil society against the ex- deprived of them, without any carbon photovoltaic power and initiated a con- traction of fossil fuels). emissions? Long considered too ex- tinuous fall in costs, which are now ap- pensive and posing technical prob- proximately the same as those of con- lems due to its intermittency, pho- ventional production facilities. PHOTOVOLTAIC POWER: A DIFFERENT KIND OF tovoltaic solar energy has in recent The current and future technical de- ENERGY! years undergone developments which velopments described in detail in this give reason to doubt this diagnostic. study make it possible to expect a 20% The photovoltaic technology is What’s more, due to future progress to 40% reduction in the initial capital based on physical principles it is estimated that it could provide at cost of a photovoltaic installation by completely different from those least 25% of the world’s electricity in 2030. On the 2050 horizon, based on of other electricity production 1 2050 instead of the 5% envisaged in market trends, the cost will be halved. facilities. The latter are based most long-term planning scenarios. Moreover, many manufacturers ex- on the classic laws of physics, pect the lifetime of photovoltaic power using mechanisms occurring on plants to be lengthened, from 25 years a macroscopic scale: operating an alternator to produce elec- Photovoltaic solar (the service life currently adopted for calculation of the levelized cost) to pos- tricity. The difference between power, an increasingly sibly 30 or even 40 years. the technologies is the force competitive energy These two developments will inevita- used to cause the rotor to turn bly reshape the electricity and energy (wind, water, steam produced by Although the first discoveries regard- landscape profoundly compared with the combustion of coal, gas or ing photovoltaic solar energy date from the current view. The levelized cost of a nuclear fission reactions, etc.). the 21st century, this source of ener- ground-based photovoltaic installation Photovoltaic power, on the other gy has long remained confined to the could be between US$50 and US$35 hand, is based on quantum phys- niche market of the space industry. per MWh in 2050, and the cost of a resi- ics which governs the behavior The electricity produced by photovolta- dential installation between US$70 and of matter on or below the nano- ic power was far more expensive than US$50 per MWh. metric scale. Now, this physics is that coming from other technologies in no way similar to that which Conversely, the costs of conventional (gas, coal, nuclear). we “experiment with” every day. production facilities will on the whole That makes photovoltaic power a increase. These mature technologies 1. Out of a total electricity consumption range of 35 different kind of energy. Far more to 40 PWh in 2050 (extrapolated from the scenarios will see no breakthrough in competi- of WEO 2014). modular than the others (a 1 W or 1 GW installation can be manufactured), it can still benefit from technological breakthroughs. CAPITAL COST AND LEVELIZED COST The other production facilities, Two economic statistics make it possible to evaluate the competitiveness of based on mature technologies, an energy production installation. The initial capital cost, on the one hand, can only experience continuous is decisive for the decision to launch a project. It is calculated in US$ per improvements. This special fea- MW installed. The levelized cost (or discounted cost of energy), on the other ture of photovoltaic power means hand, includes not only depreciation of the initial capital cost but also oper- that this industry is far more ating costs (maintenance, cost of primary energy) relative to the total kWh similar in its development dy- produced over the life of the installation. The levelized cost (expressed in namics to electronics industries US$/MWh) takes into account a discount rate which has the special feature – which experience exponential of greatly reducing future costs, and thus proves unfavorable to solar energy cost reductions - than to energy due to the magnitude of the initial investment. industries.

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Photovoltaic solar ed global electricity demand in 20502. ing clouds). This can cause problems of power: a clearly In light of the information brought to- balance between supply and demand gether in the present study, this target and hence at the level of electricity grid sustainable energy seems easily attainable from an invest- management. In order to clarify this is- from the economic and ment viewpoint and desirable from the sue, the study investigates the follow- environmental viewpoints economic viewpoint. ing three dimensions of the electricity The study also reviews the existing system. The competitiveness of photovoltaic literature concerning the availability power being ensured, it is important to 1. What is the capacity of a of the raw materials required for such check that the necessary investments mature grid for coping with a photovoltaic power plant program to make this energy a significant part intermittency? and the issue of the energy return on of the electricity mix are feasible. Note, Analysis of the French grid, typical of investment. According to figures from first, that an energy sector technology a mature and efficient grid, shows that the MIT, the first point is apparently not has never experienced such develop- the current transmission systems of a major obstacle for technologies based ment, which makes it more similar to developed countries (equipped to man- on silicon (the second most abundant the specific development process of age significant fluctuations in supply element on the planet). As regards the the electronics world, in both its speed and demand) can already tolerate ap- energy return on investment, already of market penetration and the pace of proximately 5% to 8% of consumption satisfactory, it is set to increase, thus innovation. In 15 years, the installed supplied by photovoltaic installations reducing the carbon content of photo- capacity has been multiplied by more without setting up a new system. At voltaic electricity (currently between 30 than 100, to 186 GW at the end of 2014, the level of distribution systems, on the and 70 g of C02 per kWh). This clearly including more than 40 GW installed other hand, a match between consump- places this energy source in the club of in 2014 alone (a record year for invest- tion density and production density is a energies with a sufficiently low carbon ment, at US$136bn). This is the order rule that it is important to obey in order content3 to enable us to stay on track for of magnitude of the coal-fired pow- to ensure unconstrained deployment of global warming of less than 2°C. er station capacity installed in China photovoltaic systems. each year (and about 15-20% of the 2. Can consumption be made equivalent electricity production). This flexible to move in step with process is gathering momentum, more- Intermittency, a major production fluctuations? over. Based on simply maintaining the obstacle to the growth Consumption management (for indi- annual investment level of 2014, com- of photovoltaic power? viduals and industrial firms) makes it bined with expected cost reductions, possible to further increase the mar- we obtain a cumulative total of 4,000 to A photovoltaic system produces only ket share of photovoltaic power in the 6,000 GW installed by 2050 (including in the daytime and more in summer electricity mix. By processes currently installations to be renovated). than in winter. This production may being developed, this involves either This scenario is really conservative vary from one hour to the next as a re- forcing the consumption of certain because it means assuming a halt in sult of changes in sunlight (e.g. pass- electrical appliances at the time of pho- growth in investment in photovoltaic tovoltaic production peaks (in the mid- power despite the substantial increase dle of the day) or eliminating demand 2. 6,000 to 8,000 GWc represents a production of ap- in its competitiveness. A capacity range proximately 8 to 10 PWh (assuming average insolation at off-peak production times (at night). of 6,000 to 8,000 GW would make it equivalent to 1350 kWh per kWc) out of a total electricity consumption range of 35 to 40 PWh in 2050 (WEO Most consumption management tech- possible to meet 20-25% of estimat- 2014 scenarios). niques are well known and, in some 3. On the 2050 horizon, we should aim at an electricity production facility mix for which the carbon content cases, already employed notably in is less than 100 g of CO2 per kWh and as close to 50 France (management of hot water cyl- as possible.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 5 inders and development of demand response schemes). Moreover, they have MANAGING CONSUMPTION MEANS CHANGING OUR WAY significant potential for development, OF CONSIDERING ENERGY! which should be increased by chang- In the world of the electricity system as it has been developed since Edison’s ing national regulations to enhance first electric power station in 1882, consumption is variable and production their economic value. adjusts. With photovoltaic power it is production which is variable. Can elec- 3. How to improve electricity tricity consumption adapt to production? Yes, to some extent: some of the storage? services provided by electricity can cope with a time lag in the supply of To date, the most economical means electricity. Examples are the need to wash linen or heat domestic water and for “storing electricity” are hydraulic the housing unit (if it is well insulated). There is clearly an intrinsic flex- pumping stations, but their growth po- ibility in the use of the various devices and real benefits from managing tential is limited. Recent developments consumption. regarding electrochemical storage could radically change ways of smoothing out intermittent production such as photovoltaic power. Long regarded WHY IS THERE A DIVERGENCE BETWEEN THE PERCEIVED COST as a costly technology, usable only for OF THE BATTERIES AND THEIR ACTUAL COST? specific applications, electrochemical Whereas the capital cost observed in the market is around US$300-350 storage has in the last three or four per kWh for the lithium technology, the 2015 reports of the IRENA or the years seen a rapid improvement in its IEA on storage technologies and batteries regard the capital cost as around competitiveness, like photovoltaic sys- US$600-800 per kWh. This divergence can be explained by the fact that tems. For example, in 2015 firms such the batteries’ electronic fundamentals confer on them a speed of innovation as Tesla and LG Chem posted capital faster than the time for analysis by the conventional energy world. So long as costs of US$300-350 per kWh stored batteries were expensive, their market and their impact remained anecdotal. (versus about US$1000 per kWh stored The continuous rapid improvement in the cost of this equipment has result- five years ago). There are still signifi- ed in practically an on-off dynamic: they can go very quickly from having a cant prospects for development. lack of visibility to having a major impact on the electricity system. Several reports show that for a capital cost of less than US$200 per kWh stored, battery storage provides a more competitive solution than a back-up with fossil-fueled thermal equipment. Finally, electrochemical storage has the huge merit of providing a response to the initial needs of the inhabitants in countries which have no structured electricity grids. Like for mobile phones

which made it possible to avoid devel- 3.0 ANNA REGELSBERGER CC BY-SA © oping very costly infrastructure, this is a truly historic opportunity.

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The transition to row. Numerous stakeholders, including remembered that what is important is photovoltaic power, large banks such as Goldman Sachs, not electricity in itself, but the servic- Citigroup and UBS, have become aware es that it can provide: lighting, access a turning point that of both the potential of these changes to telecommunications (mobile phones must not be missed and the risk for those firms not taking in particular, which are a decisive fac- by the authorities them into account. tor in the African economy, access to and by industry! More seriously, a scenario in which pho- knowledge via internet), crop irrigation, tovoltaic systems were deployed by ig- conservation of foodstuffs and health- The simultaneous technical and eco- noring or merely bypassing the current care (via hospital facilities capable of nomic development of the photovoltaic centralized electricity system would operating in satisfactory conditions of power, consumption management and definitely not be optimal for society. hygiene, having refrigeration areas and electrochemical storage technologies Regarding this, the legislation which sewage treatment facilities), etc. is changing the prospects for the elec- will supplement the Energy Transition Such services would be provided far tricity systems of tomorrow. A first ef- Act in France will have a responsibili- more rapidly and efficiently by inno- fect can already be seen, with the rapid ty, in particular, for encouraging such vative solutions based on small photo- deployment of small individual devices, a deployment within the framework of voltaic installations coupled to storage and elsewhere in the construction of an adaptation of the national and Euro- with easily transportable backup ther- high-capacity power plants ordered by pean electricity systems. The changes mal systems. Whereas several decades wealthy sunny countries. This trend that this study glimpses for the near are needed to build an electricity grid, points to radical changes which will future therefore require a strengthen- a few weeks are sufficient to set up a concern the developed countries’ elec- ing of public policies concerning the small system based on photovoltaic tricity systems. The big operators and deployment of photovoltaic systems, power and energy storage. managers of these systems, like the electricity storage, consumption man- This local approach, according to a public authorities, must become aware agement, and tariff links with the grid. leopard-spot pattern, i.e. with uniform of this potential for development, and distribution throughout the territory, facilitate it rather than ignore it or, even would then gradually lead to intercon- worse, combat it. Like it or not, some nection, but not necessarily as exten- households, economic stakeholders A fantastic hope for sively as in the case of a centralized and local authorities are thus acquiring those who do not system. Above all, it could be deployed a capacity for and an interest in becom- yet have access to for a lower cost, involving the local ing their own electricity producers. By populations and gradually developing allowing each actor to manage part of electricity, provided an industrial fabric notably for man- their electricity needs (or even energy that it be viewed agement and maintenance of the in- needs thanks to the development of from a decentralized stallations. Finally, this more modular the electric car), the prospects for the perspective as close as electrification would allow populations development of photovoltaic power are possible to the needs to make use of electricity and improve radically changing the relationship their standard of living without neces- between the electricity consumer and More broadly, these developments rep- sarily radically changing their life style. producer, a relationship that at present resent a fantastic opportunity for de- They would be able to adapt the use of reflects the dominant role of the elec- veloping countries, and in particular renewable energies to their perspective, tricity system. the 20% of the global population who which is not foreseeable in the case of Those who do not make the transition still do not have access to electricity, by centralized deployment plans which soon enough will be poorly positioned enabling them to have control of their are inevitably approximate in their al- in the energy organization of tomor- supplies. Regarding this, it should be lowance for specific local features.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 7 1. INTRODUCTION: SUMMARY AND CONTEXT

1.1 Purpose of Benchmark scenario used in Methodological notes on the the publication, this report for global energy performance of this study. consumption in 2050. The study covers the outlook for glob- scenarios used and At present, final energy demand rep- al expansion of photovoltaic power by methodological notes resents about 110 PWh, of which 18% 2050 for ground-based (industrial) and for electricity (i.e. about 20 PWh). As roof-based (residential) installations. It The challenge now is no longer to prove regards photovoltaic solar power, it does not include data relating to con- global warming but to find solutions in supplies scarcely 1% of electricity concentrated solar power. This technolo- order to limit it while allowing human- sumption. gy adds an aspect of complexity (the ity to keep on making progress. The part for concentrating light) which ap- levers of action are well known: more In the World Energy Outlook 2014, the pears more as a limiting factor for its sober and efficient life styles, energy International Energy Agency (IEA) deployment. Moreover, this technology efficiency of buildings, agroecology, de- considers several scenarios for ener- has not experienced the rapid expan- velopment of renewable energies, etc. gy trends between now and 2040. The sion hoped by some stakeholders. The The main issue is to find the right solu- Current Policies Scenario foresees no present study also does not include tions to actuate these levers. changes from current policies. The New Policies Scenario considers a contin- data relating to the new uses which are In this report, Fondation Nicolas Hulot uation of the existing policies and the appearing at present (e.g. the smart- investigates photovoltaic solar power, implementation of measures already phone), because the latter will probably which is one answer for the produc- planned but not yet implemented. The remain marginal in volume compared tion of low-carbon energy. It deserves 450 Scenario consists in adopting with electricity production connected to special attention because it is one of measures to effectively limit the global a grid (whether it be a national grid or the rare renewable energies which (i) increase in temperature by 2100 to 2°C the electricity network of a house in the in the past few years has confounded compared with the pre-industrial glob- context of decentralized production). the forecasts (notably with regard to al temperature. The study first examines the economic cost reduction) and (ii) has very great data of photovoltaic power to assess to malleability: a photovoltaic power sys- All these scenarios factor in an increase what extent an increase in the compet- tem can be placed on a smartphone to in the share of electricity in final ener- itiveness of this technology could ena- produce a few watts or in open coun- gy consumption due to the appearance ble it to expand, and whether the nec- try to produce several hundred million of new uses and the electrification of 1 essary financing could be obtainable. watts (megawatts). It can generate elec- new regions in the world . For example, We then check whether these economic tricity very close to points of use or in electricity consumption could reach 35 results could be compatible with the a centralized facility to supply a power PWh according to the 450 Scenario and availability of raw materials, the energy grid. It can therefore meet a great vari- 40 PWh according to the New Policies 2 return on investment and issues related ety of needs and generate development Scenario, i.e. from 23% to 24% of the fi- to intermittency, namely the inherent opportunities representing a radical nal energy consumed in the world. integration capacity of power grids, de- change from conventional centralized In each of these scenarios photovoltaic mand management and electrochem- power systems supplying consumers solar power represents between 3% and ical storage. If only electrochemical via vast grids, involving more or less 6% of electricity consumption, i.e. be- storage is discussed, this is not because extensive overall control. tween 1.3 and 2.0 PWh. the FNH considers it as the only appro- The purpose of this study is to see to In order to evaluate to what extent pho- priate storage solution but because of what extent photovoltaic solar power tovoltaic solar power could contribute to the similarity of the electrochemical could represent a substantial propor- global consumption, we shall assume storage facility manufacturing industry tion of global electricity consumption electricity consumption ranging be- with the photovoltaic module manu- 3 by 2050, taking into account, in par- tween 35 and 40 PWh in 2050 . facturing industry. Regarding the inte- ticular, the economic aspect, the avail- gration capacity of the grids, the study ability of resources, and intermittency 1- As a reminder, at present more than 1 billion people was mainly based on data concerning management issues. still have no access to electricity. France. However, this does not make it 2- 1 PWh = 1 petawatthour = 1,000 billion kWh impossible to establish concepts appli- 3- The idea is of course not to validate or invalidate the work of the WEO (especially since the latter stops at cable to the grids of developed coun- 2040 whereas the present study goes up to 2050), but to have a consistent order of magnitude with which tries in general. to compare projections concerning photovoltaic solar power, the subject of the present study.

8 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG Finally, the last part gives a few ideas Let us specify, finally, that this study power is not the only solution and since regarding changes in the landscape of aims to outline global trends in terms the question is examined on a global the electricity industry and the pros- of orders of magnitude, and that each level, this data shows us that photo- pects offered by the development of of the points presented would deserve voltaic power can play a major role in photovoltaic solar power in non-electri- being examined in greater detail. humanity’s energy supply. Moreover, a fied regions. recent MIT report4 highlights a negative This study was carried out following correlation between per capita GDP and extensive bibliographic work and nu- solar irradiance : the poorest countries merous interviews with experts from at present are those with the most solar the world of industry, grid manag- 1.2 The sun and mankind: resources. ers and the research world. For some a relative match between However, these correlations are based charts, the FNH has included not only solar irradiance and merely on average insolation. But in- the data from published reports but also human establishment solation varies during the day, from data from work by experts. The latter one day to the next and throughout the are in this case identified as level 1, 2 The sun inundates the earth with a year. Although the solar resource is, on or 3 experts because they express their quantity of radiation equivalent to sev- average, fairly well distributed (unlike views as individuals having expertise eral thousand times the world’s energy other energies, such as oil!), it is at first and not in the name of the organization consumption. This potential is theoret- sight not obvious how to use it to make in which they work. We specify that ical: absorption by the atmosphere and it a source of energy supply for human- the FNH has not produced data in the darkening by clouds reduce it locally. ity. The purpose of this report is clear- present study but has rather produced And the sun does not shine at night. ly to understand what it is possible to summaries of data collected from var- However, the energy received on the do faced with this complexity, and the ious sources (published reports and ground remains three orders of mag- conceivable changes required sooner experts) and established scenarios (re- nitude greater than the world’s ener- or later to make photovoltaic power a garding changes in the installation cost gy consumption. The question then is low-carbon energy source supplying of photovoltaic power, the photovoltaic whether the correlation between solar humanity. capacity installed worldwide, the cost irradiance is consistent with the estab- of electricity production by a photovol- lishment of populations. Figure 1 shows taic installation) based on this data and the existing correlation. Admittedly, it its assessment of the experts’ analyses. is not perfect, but since photovoltaic 4- (MIT, 2015) CITATION MIT15 \l 1036

FIGURE 1 : COMPARISON BETWEEN THE DISTRIBUTION OF THE EARTH'S SURFACE, POPULATION DENSITY AND SOLAR IRRADIANCE AND COMPARISON OF INSOLATION AS A FUNCTION OF PER CAPITA GDP, FROM "THE FUTURE OF SOLAR ENERGY", MIT, 2015

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 9 1.3 The physical • Wind for wind generators; 1.4 The various concepts on which • Water for hydroelectric dams, tidal technologies and uses photovoltaic power plants, marine turbines and of photovoltaic power wave energy converters; power is based • Steam generated using the energy Photovoltaic technologies are Before exploring the prospects for de- released by the combustion of coal/ divided into two major categories: velopment of photovoltaic power, it is gas/wood/oil, by nuclear fission re- • Technologies based on wafers, i.e. necessary to summarize the physical actions, or by concentration of the thin slices of material assembled properties underlying this technology rays of the sun (thermodynamic solar alongside one another; power); and recent technical and economic de- • Technologies based on thin films, for velopments. In 1839 the physicist An- • Direct combustion of liquid petrole- which the component parts are “de- toine Becquerel and his son made the um products in engines (mostly die- posited” atom by atom, like deposit- first observation of the photovoltaic ef- sel). ing several coats of paint on a wall. fect which is manifested by a change At present, the wafer technology (in in the electric properties of a semicon- The common feature of all these means blue and orange on Figure 2) is the ductor material when it is subjected to of production is that they use mecha- main technology in the market, with radiation. This results in the appear- nisms occurring on a macro scale (cm, thin films (in green) confined to a lim- ance of an electrical voltage. It was not m, km) and governed by the laws of ited level. There is often talk of compe- until nearly 50 years later, in 1883, that conventional physics6, which describes tition between these two main types Charles Fritts manufactured what can the world that we all see. Conversely, of technologies. According to several be called the first photovoltaic cell in photovoltaic power uses phenomena experts we met, this competition will history. It was formed of selenium and occurring on a nanometric scale7, the eventually disappear through conver- gold, and had an efficiency of about 1%5. scale of electrons themselves. This has gence of the “thin film” and “crystalline At that time, the phenomenon was still several implications: silicon” technologies (we can already only partially understood. The effects see this appear in hybrid technologies were described, but the fundamental • Photovoltaic power is far more mod- such as heterojunction, which involves physical causes remained unexplained. ular: a 1 W or 1 GW installation can be manufactured (one billion times depositing amorphous silicon on crys- In 1905, Albert Einstein proposed a larger!); talline silicon or multijunctions which scientific explanation – for which he combine other materials on crystalline • Photovoltaic power is based directly received the Nobel Prize for Physics in silicon). 1921 – using the concept of the photon on quantum physics, i.e. the physics (a “particle” of light). Photovoltaic effect governing the behavior of matter on 8 Uses of photovoltaic power is due to an interaction between light or below the nanometric scale . Now, Due to its great malleability, photo- and the nanometric structure of matter. quantum physics is in no way similar voltaic power can be implemented in This understanding, and engineer Rus- to the physics which we “experiment devices ranging from a few watts to sel Ohl’s discovery, in 1939, of the P-N with” every day. In this nanomet- several hundred megawatts (1 million junction – an arrangement of matter in ric world, you can slow down light, 9 watts). A distinction is made between a so-called semiconductor configura- pass through walls, etc. In fact, the the following uses: tion – led to Ohl’s filing, in 1941, of the potential of this world is far vaster first patent for a photovoltaic cell. The than that of the conventional world • Ground-based power plants from a concept of a photovoltaic cell based on consisting of turbines, wind gener- few MW to several hundred MW. the photoelectric effect and a particular ator vanes and concrete dams. That • Roof-based installations from a few arrangement of matter came into being. makes photovoltaic power a different kW to a few hundred kW. The small- kind of energy, as we shall see fur- It is important to understand the spe- est installations are generally for ther on. cific fundamental features of photovol- residential buildings, whereas the taic energy, because they have impor- biggest are on tertiary and industrial 6- Apart from nuclear reactions which make use of tant implications for its development. particle physics for steam generation. On the other buildings. hand, electricity production is still performed by a All other means of electricity produc- conventional mechanism of steam generation causing • On-board installations, as is tradi- tion use macroscopic mechanisms to rotation of a turbine, which actuates an alternator. tionally the case on satellites. produce electricity: causing an alterna- 7- 1 nanometer = 0.000,001 millimeter 8- In current photovoltaic cells, the thickness of the Regarding on-board installations, re- tor to operate to produce electricity. The photoactive parts ranges from one micron to about one cent developments offer new possibili- difference between the technologies hundred microns. 9- In quantum mechanics one is not in a single state ties for the incorporation of photovoltaic lies in the force used to drive the rotor: (hot or cold, at the top or at the bottom), but one is systems, due to innovations including with certain probabilities in all the possible states si- multaneously. The tunnel effect, for its part, is due to photovoltaic cells as close as possible Heisenberg's uncertainty principle which describes the 5- Approximately the conversion efficiency of photo- uncertainty inherent in the nanometric world regar- to the points of use. synthesis performed by chlorophyllic plants. ding position and speed, energy and duration, etc.

10 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG • Companies such as Microsoft and • Photovoltaic cells are incorporated in ly different from that of ground-based Sunpartner Technologies are devel- means of transport to provide part of power plants and residential installa- oping photovoltaic films capable of their energy consumption. tions. This is because, while consumers generating part of the electricity con- These new uses, representing only a will be attentive the competitiveness sumption of mobile phones. For mere small part of the installed capacity of a photovoltaic installation designed voice use, phones can be practically (driven mainly by the electricity pro- solely to produce electricity, it is high- 100% autonomous. duction sector), do not come within the ly likely that they will not hesitate to • The inclusion of photovoltaic cells in scope of this study. Note, however, that add a few dozen euros to have the lat- building materials allows greater ar- they could represent a powerful driver est smartphone producing part of the chitectural flexibility than with con- of innovation for the whole sector, be- electricity that it consumes (even if that ventional photovoltaic panels. cause their business model is complete- electricity is far more expensive than that taken from the grid).

FIGURE 2 : MARKET SHARE TRENDS FOR THE MAIN PHOTOVOLTAIC TECHNOLOGIES IN THE CELL PRODUCTION MARKET, FRAUNHOFER INSTITUTE, 2015.

FIGURE 3 : DIAGRAMS OF THE MAIN EXISTING PHOTOVOLTAIC CELL TECHNOLOGIES (MARKETED OR IN DEVELOPMENT): "THE FUTURE OF SOLAR ENERGY", MIT, 2015* * Each diagram shows the various layers forming the photovoltaic cell, and their relative thickness.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 11 2. OVERVIEW AND PROSPECTS FOR DEVELOPMENT OF PV: THE ECONOMIC AND PHYSICAL DATA

he photovoltaic power industry at all stages of the complete cycle; 2.1 From a niche market was long confined to a niche • Gradual allowance for the cost of to a competitive industry market, but its performance and T greenhouse gas emissions for gas- in several countries competitiveness have changed enor- and coal-fired power stations will in- mously in recent years. As we shall see crease their cost; in this section, photovoltaic power is al- 2.1.1 Photovoltaic power, long • The installation of carbon capture ready at present a competitive means of confined to a niche market and storage systems for power plants electricity production in several coun- On 4 September 1882, Thomas Edi- burning fossil fuels (and provided tries. It still has significant prospects son put into operation the first electric that their economic profitability and for development. power station using coal as the source sustainability on a global scale are of primary energy to supply lighting Conversely, the costs of conventional proved, which is not yet the case); production facilities are generally in- for buildings around Wall Street. The • The introduction of standards for re- creasing. This is an inherent feature of production of the first electric power duction of particulate emissions due mature technologies for which no mas- stations was immediately used to meet to coal-fired electric power stations. sive gain can be expected. The physi- humanity’s main uses (lighting, then cal principles of thermodynamics will The photovoltaic technology, as we have transport and the operation of ma- not be exceeded. The 30% to 50% effi- described it in the previous section, is chines), and on a massive scale (dis- ciencies already achieved correspond based on completely different physical tricts and then entire cities were rapidly to the theoretical maximum. Any im- principles. All other means of electrici- electrified, e.g. for lighting). ty production are based on convention- provements will therefore be merely Photovoltaic power, meanwhile, real mechanics for the strictly electricity continuous improvements. On the other mained for a long time confined to the generating part. Quantum mechanics, hand, certain cost components of these niche market of the space industry, be- the physics on which photovoltaic tech- installations will continue to increase ing first used in 1958. The low efficien- nology is based, offers major potential due to: cy (about 5% at the time) and the asso- for development, making it possible to • Increased security and safety re- ciated cost meant it was not possible further improve the competitiveness of quirements for the nuclear industry, to envisage massive use for the main this technology. electricity needs of humanity. In the 1970s and 80s, many countries looked for alternative energy solutions to oil. France, which had invested heav- FIGURE 4 : INVESTMENT IN RESEARCH ON SOLAR TECHNOLOGIES BY THE US DEPARTMENT OF ENERGY (EXCLUDING FUNDAMENTAL RESEARCH), THE FUTURE OF SOLAR ENERGY, MIT, 2015 ily in solar energy, setting up the Comes (Solar Energy Commission), was at that time one of the leaders in this field. A large number of photovoltaic concepts were conceived at this time. However, due to the combination of a preference for nuclear power (also motivated by military reasons), the oil countershock and the high cost of solar technologies, almost all research in this area was discontinued. France was not a special case, as shown by investment changes in the budget of the US Department of Energy devoted to solar power. Accordingly, from the 1980s to the end of the 1990s, renewable energies in general and photovoltaic power in particular were completely ignored by energy producers and energy policies.

12 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 5 : COST TREND FOR PHOTOVOLTAIC MODULES AS A FUNCTION OF CUMULATIVE INSTALLED CAPACITY. DATA: FRAUNHOFER INSTITUTE, MIT, IEA. ILLUSTRATION: FONDATION NICOLAS HULOT

2.1.2 Support programs allow Market size has also had an impact on ate facilities dedicated to photovoltaic access to a sufficiently large industries related to photovoltaic pow- systems made it possible to solve the market to push down costs er such as the procurement of silicon. procurement problems and develop an Until 2008, due to the small size of the industry fully adapted to this sector. In the 2000s, the launch of support pro- photovoltaic market and its lower qual- This initiative was essential in order to grams, in Europe in particular, provid- ity requirements than for microelec- continue to improve the competitive- ed photovoltaic systems with a market tronics, silicon producers simply used ness of silicon photovoltaic cells. Today, size enabling it to enter cost regions scrap from the production of electron- the solar power industry represents compatible with a mass market. This ics silicon to supply the photovoltaic about 300 kT of silicon per year, where- also highlighted a dynamic that has sector. Growing demand in this sector as the electronics industry generates a existed for the past several decades. soon created tensions related not to a production of only 40 kT per year! This The production costs of photovoltaic problem of raw material procurement11 trend, among others, makes it possible systems fall when market size increas- but to the industry’s organization. The to now say that photovoltaic power has es. The reasons for this are diverse decision of silicon producers to cre- become an optoelectronics segment in (non-exhaustive list)10. its own right.

• The production of electronic goods 11- Silicon is the second most abundant element in the allows automation and an increase earth's crust. in the size of production plants. Pro- duction in a 100 MW or 1 GW plant does not entail the same cost per watt FIGURE 6 : COST TREND FOR DRAM TYPE MEMORY USED IN COMPUTERS AND FLAT PANEL DISPLAYS AS A FUNCTION OF THE CUMULATIVE SIZE OF THEIR RESPECTIVE MARKET, WINFRIED HOFFMANN, ASE, 2014 produced. • The R&D investment made possible by the increase in market size means that the quantities of materials used (and hence the related costs) can be reduced without detracting from the performance and quality of photovoltaic modules. • Also, R&D makes it possible to improve energy efficiency, contributing to cost optimization. We find the same phenomenon as in more conventional electronics markets (see Figure 6).

10- These various points and others will be examined in greater detail in Part 2.2.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 13 FIGURE 7 : COMPARISON OF THE LCOES OF PV/NUCLEAR/ GAS/COAL, FRAUNHOFER INSTITUTE. DATA BASED ON BUYBACK TARIFFS FOR GROUND- BASED PV INSTALLATIONS IN FRANCE, LAZARD, TCDB (EXCLUDING COST OF CO2), IEA ETP 2015. ILLUSTRATION: FONDATION NICOLAS HULOT.

ANALYSIS: THE LCOE OF A NEW PHOTOVOLTAIC SOLAR POWER SYSTEM HAS FALLEN FROM ABOUT US$750 PER MWH IN 2000 TO ABOUT US$85 PER MWH AT PRESENT. * LCOE = Levelized Cost Of Energy = Life-cycle cost of a means of production obtained by discounting its production over its lifetime. In the refe- rences used to plot this graph, the discount rate for the LCOE is in a range of 6% to 8% depending on the reference, when such data is available.

2.1.3 Photovoltaic power • In Austin, SunEdison won a PPA12 to is now competitive in many sell its electricity at US$50 per MWh countries (this price includes federal support via a tax credit, and is equivalent, ex- Until recently, the electricity produced cluding this aid, to US$70 per MWh. by photovoltaic systems was a very expensive energy compared with oth- • In Dubai, ACWA Power won a PPA at er electricity production technologies about US$60 per MWh without sub- (gas, coal, nuclear), as shown by Figure sidies. According to certain compet- 7. Therefore, photovoltaic power was itors, the competitive financing rate not economically viable without state obtained by ACWA Power explains subsidies. these levels, but even without that, the best other competitors were at In 2015, this is no longer the case in US$65-70 per MWh. many countries: the LCOE of photovoltaic power is approximately the same In fact, as we shall see subsequently in as that of other conventional means of this report, the potential of photovolta- production. ic power for the coming years has been thoroughly changed by comparison In some countries, this competitiveness with what could be imagined just three is even far greater, as suggested by the years ago. data concerning certain recent calls for bids:

12- PPA: Power Purchase Agreement = agreement between a producer and a marketer for the purchase of electricity over a given period at a given price

14 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG © HÉLÈNE GARDÈRE | CC BY-SA 3.0 © HÉLÈNE GARDÈRE | CC BY-SA

THE LCOE (LEVELIZED COST OF ENERGY)

The competitiveness of an electricity production unit is before. To ensure the supply of electricity linked to the impacted by two types of economic data: (i) the size of the consumption profile of electricity demand on the national initial investment (expressed in US$/W), which, depend- level, it is therefore necessary to supplement photovoltaic ing on the financing conditions, will have an impact on the electricity production with back-up systems3. Even if de- decision to launch the project or not1, and (ii) the levelized mand is highest during the period of photovoltaic power cost (LCOE) of production of a kilowatt hour (kWh) over production, it is necessary to ensure a minimum level of the lifetime of the equipment which produces it. production at night. The LCOE, therefore, includes not only depreciation of the Conversely, for conventional power stations (coal, gas and initial capital cost but also operating costs (maintenance, nuclear), the LCOE is based on base-load operation, i.e. cost of primary energy) over the life of the installation rel- they operate continuously at a constant capacity. To en- ative to the total kWh produced. In the present study, it is sure the supply of electricity linked to the consumption calculated with a discount rate of 5% (a rate taking into profile of electricity demand on the national level, it is nec- account the cost of capital and the cost of debt needed for essary to supplement base-load production in the daytime financing). Overall, the LCOE can ensure a certain com- due to the fact that consumption is highest in daytime. It parability between various means of production for the is possible to have variable gas- and coal-fired production life-cycle cost of production. during the daytime, in line with consumption. However, Some stakeholders consider that the LCOE for photovoltaic this greatly increases the cost of production (mainly be- solar power and those for conventional means of produc- cause fixed costs must be recouped on a smaller volume tion (nuclear, gas, coal) are not comparable2, because the of electricity), and that resembles the extra cost of the production profiles are not the same. It would therefore back-up system for photovoltaic solar power. For nucle- 4 be necessary to compare the LCOE for photovoltaic solar ar power, due to technical constraints , it is necessary to power to which would be added the LCOE for back-up fa- add dedicated means of production to meet demand when cilities (see below). it exceeds the base-load production. This extra cost also resembles the extra cost of the back-up system for photo- Photovoltaic systems produce energy in a manner vary- voltaic power. So, basically, we can say that, in 2015, new ing with time: the average production profile of photovol- photovoltaic, nuclear, gas- and coal-fired installations taic systems on the national level has a bell shape, the have similar production costs. amplitude of which varies from one day to the next (depending on the overall intensity of insolation). This var- 3-A back-up is a means of production used to compensate for the inadequacy of iation is random although perfectly predictable the day a main means of production to meet demand. 4-Regarding this point, note that the LCOE for the nuclear industry in France does not take into account a back-up which is essential for it and which was 1- These factors are analysed in the following two parts. designed for it specifically because of (i) its relative inflexibility and (ii) its sur- 2-However, these comparisons are systematically made and, as we shall show, plus capacity at night. These back-up systems are the 4 GW of Pumped Storage are not meaningless on a basic level. Power Stations (PSPS's).

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 15 2.2 Recent and future This section reviews recent develop- 2.2.1 Improvement in the cost trends for a ments which have made it possible, efficiency of photovoltaic cells for each of these cost components, to However, the efficiency values identi- photovoltaic module improve the competitiveness of photo- fied in Figure 9 are not those of mar- voltaic power, and future developments. From manufacture of the cell to start- keted cells nor the modules. In gener- The competitiveness drivers in the up, there are three basic cost compo- al, there is a difference of about 3% to coming years are not viewed similarly nents of a photovoltaic module. 6% between the efficiency of a cell in by the various experts. • The photovoltaic modules, which the laboratory and the efficiency of an • For some of them, competitiveness themselves include the cells produc- industrial module. At present, the effi- developments will be due to the im- ing electricity and glasses to protect ciency of industrial modules for tech- provement in industrial processes at those cells and a frame to maintain nologies based on crystalline silicon the levels of both the production of overall leakproofing. is around 15-21%, and around 12-15% the various equipment items (mod- on thin films. The shortfalls in the ef- • The inverters, which can convert the ules, inverters) and installation. ficiency of industrial photovoltaic mod- direct current produced by the mod- • For others, technological innovation ules compared with cells in the labora- ules into alternating current flowing regarding cells will be the driver for tory can be explained by: in our electricity grids. competitiveness. • The existence of larger and more nu- • The “Balance of System” comprises • Still others think that the improve- merous defects in an industrial cell all other costs (electric cabling, con- ments will come from a mixture of than in a “hand-made” laboratory nection to grids; civil engineering, these two aspects13. cell; structure; installation; design, planning, administration, taxes, etc.). • Phenomena of absorption and “deg- 13- This graph gives an idea of the cost breakdown radation” of the quality of the cells for a ground-based photovoltaic installation. Of course, this breakdown varies for each installation. once encapsulated in a module Coming efficiency improvements Figure 9 shows that the efficiency of cells at the laboratory level has gener-

FIGURE 8 : ally stagnated in the 2000s. Conversely, COST BREAKDOWN OF A GROUND- the efficiency of modules has gradually BASED PHOTOVOLTAIC INSTALLATION EXCLUDING GENERAL AND ADMINISTRATIVE increased (Figure 10). This confirms the COSTS. SOURCE: ADEME, MIT, ITRPV, assertion of some experts that, in recent FRAUNHOFER INSTITUTE. ILLUSTRATION: FONDATION NICOLAS HULOT* years, the improvement in efficiency is * This graph gives an idea of the due more to an improvement in indus- cost breakdown for a ground-based photovoltaic installation. Of course, this trial processes for implementing the breakdown varies for each installation. technologies than to innovation on the cells.

FIGURE 9 : BEST LABORATORY EFFICIENCY TRENDS FOR PHOTOVOLTAIC CELLS, NREL, 2015.

ANALYSIS: THE LABORATORY EFFICIENCY OF SILICON- BASED CELLS (IN BLUE) HAVE INCREASED FROM ABOUT 14% IN THE 1970S TO ABOUT 25% AT PRESENT. THE DATA IN PURPLE CORRESPOND TO THE EFFICIENCY OF CONCENTRATED SOLAR POWER AND DO NOT COME WITHIN THE SCOPE OF THIS STUDY.

16 FONDATION NICOLAS HULOT POUR LA NATURE ET L’HOMME • WWW.FNH.ORG FIGURE 10 : ENERGY EFFICIENCY TRENDS FOR THE MAIN COMMERCIAL MODULES SINCE 1997*, "TECHNOLOGY ROADMAP - SOLAR PHOTOVOLTAIC ENERGY", IEA, 2014 * sc-Si = monocrystalline silicon, mc-Si = polycrystalline silicon, a-Si = amorphous silicon

FIGURE 11 : 2014 ROADMAP OF THE ENERGY EFFICIENCY OF FIRST SOLAR CELLS, 2014*.

ANALYSIS: NOT ONLY DOES THE 2014 ROADMAP IDENTIFY ALL THE IMPROVEMENTS TO BE MADE BY COMPARISON WITH THE UNCERTAINTIES OF 2013, BUT IT ALSO FORESEES AN EFFICIENCY 15-20% HIGHER THAN THAT OF THE 2013 ROADMAP. * ARC = anti-reflection coating; TBD = To be done; CO = coating

FIGURE 12 : 2014 ROADMAP OF YINGLI CELLS, 2015

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 17 FIGURE 13 : PROSPECTIVE EFFICIENCY In recent years, however, innovations Longer-term, the experts are more di- TRENDS FOR PHOTOVOLTAIC CELLS ON THE 2025 HORIZON, "INTERNATIONAL at the research and development level vided. Some see a flattening out at 30%, TECHNOLOGY ROADMAP FOR have made it possible to significantly because they are not convinced, or are PHOTOVOLTAIC", 2015* improve the efficiency of some tech- very cautious, regarding the ability to * mono-Si = single-crystal silicon, mc-Si = polycrystalline silicon nologies. This is the case for thin films, implement new photovoltaic technol- notably for the technology of First So- ogies making it possible to exceed the lar, which recently revised its roadmap theoretical efficiency of a standard cell upward, and for the roadmap of Yingli, (single-junction)15. Others think that we one of the leading producers of photo- shall have photovoltaic modules with voltaic cells using the crystalline sili- an energy efficiency above 30% on the con technology. 2030 horizon and exceeding 50% on the The data of the ITRPV14 presented in 2050 horizon. The work and areas of Figure 13 point in the same direction. development of some laboratories aim- Moreover, the indications of the Yingli ing to implement new methods with the roadmap regarding one of its technolo- most abundant possible raw materials gies show the importance of innovation and “common” equipment suggest that concerning the cells in improving their it is possible to achieve an efficiency of competitiveness. This confirms the ex- 40% to 50%. perts’ estimates of a revival of the innovation driver in the competitiveness of photovoltaic systems and of an improvement in module efficiency, from a range of 15-20% to 20-25% in the next 15- The efficiency of single-junction cells as designed at present is limited to 30%. This is what is called the 5-10 years. Shockley-Queisser limit, named after the physicists who proved it. Cells using concentrators now manage to exceed this efficiency, because their theoretical efficiency is higher. However, concentration technologies 14- ITRPV = International Technology Roadmap for are not an approach privileged by the FNH because Photovoltaic: groups together photovoltaic system ma- of the extra complexity added by concentration. Mo- nufacturers over the entire value chain to study tech- reover, the cost of these technologies is still far higher nological developments relating to photovoltaic power. than that of cells without concentration.

18 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 14 : PROSPECTIVE EFFICIENCY TRENDS FOR PHOTOVOLTAIC MODULES ON THE 2050 HORIZON, ITRPV, FRAUNHOFER INSTITUTE, CEA, EPIA, CSEM, EXPERTS SURVEYED. ILLUSTRATION: FONDATION NICOLAS HULOT.

ANALYSIS: THE PROSPECTIVE EFFICIENCY TRENDS SHOW A TREND IN A 20-25% RANGE WITHIN 5-10 YEARS, AFTER WHICH THERE ARE MAJOR DIFFERENCES DEPENDING ON EXPECTATIONS REGARDING THE DEPLOYMENT OF CELLS EXCEEDING THE 30% LIMIT.

An improvement in efficiency can have higher efficiency should not result an impact on various cost components. in an increase in the cost of the unit • The first concerns the Balance of production capacity in US$/W nor in System (BOS) part (see sub-section the LCOE (also related to the systems’ 2.2.4 below). lifetime). Figure 15 shows that even a significant increase in the cost of • The second concerns the cells’ cost producing a cell can result in a sub- per watt. Developments at the labo- stantial fall in the cost per watt due to ratory level always take place under improved efficiency. the constraint of production costs: the extra production cost for a cell of

FIGURE 15 : TRENDS IN THE PRODUCTION COST OF A CELL IN US$/W (BASE = 100) AS A FUNCTION OF TRENDS IN THE UNIT COST OF MANUFACTURING A CELL (IT IS CONSIDERED THAT THE SIZE OF THE CELLS IS THE SAME RELATIVE TO THE VARIOUS EFFICIENCY LEVELS) AND ITS EFFICIENCY (THE EFFICIENCY LEVELS OF 17% AND 22% CORRESPOND APPROXIMATELY TO THE EXTREME LIMITS OF THE EFFICIENCY RANGE OF SILICON PHOTOVOLTAIC CELLS).

IF WE TAKE A CELL WITH AN EFFICIENCY OF 17% WHOSE COST PER UNIT POWER IS ADOPTED AS A REFERENCE AT 100 AND IF WE ASSUME THAT INCREASING THE EFFICIENCY OF THIS CELL TO 50% IMPLIES INCREASING PRODUCTION COSTS BY AROUND 100%, THE COST PER UNIT POWER OF THIS NEW CELL WILL BE 30% LESS THAN THAT WITH 17% EFFICIENCY.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 19 2.2.2 The impact cost driver in terms of material con- of improvement in sumption is the consumables of manu- industrial processes on facturing equipment. the competitiveness of At present, the polysilicon and wafers photovoltaic power account for about two-thirds of the cost of a cell. A reduction in silicon thick- Reduction in cell production costs ness will therefore have a significant This is still a very important area of impact on the cost of producing cells. research. Some experts consider it The wafers used in silicon-based tech- the key area. The goal is to reduce the nologies typically have thicknesses of quantities of materials used to manu- approximately 150-180 µm16. According facture cells, the quantities of materials to many experts, in the next 5-10 years used at the production machinery level the thickness of silicon could fall to (consumables) and the number of steps 120 µm for single-crystal and 150 µm necessary for the production of a cell, for polycrystalline. According to the and to improve production quality. experts, to go below 100 µm radiation Improving product quality capture must be improved. At present, Improvements in product quality can research is focusing particularly on limit defects and the resulting losses anti-reflection and radiation capture while bringing the efficiency of indus- strategies, and on reducing internal trial cells closer to that of cells pro- recombinations by means of a higher duced in the laboratory. quality of the crystal lattice17. Reducing material quantities The reduction in the quantities of ma-

terials used in cells concerns, above all, 16- (MIT, 2015) CITATION MIT15 \l 1036 p28, (Inter- technologies using crystalline silicon. national Technology Roadmap for Photovoltaic, 2015) CITATION Int15 \l 1036 p. 10 In technologies using thin films, the 17-(MIT, 2015) CITATION MIT15 \l 1036 p. 25

FIGURE 16: SPOT PRICE TRENDS FOR THE MAIN COMPONENTS OF A PHOTOVOLTAIC MODULE, ITRPV, 2015* * Cost of a module = cost of polysilicon (blue) + cost of producing the wafer from polysilicon (green) + cost of producing the cell from the wafer (red) + cost of producing the module from the cell (purple).

20 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 17 : PROSPECTIVE TRENDS IN SILICON THICKNESS FOR CRYSTALLINE SILICON PHOTOVOLTAIC CELL TECHNOLOGIES, ITRPV, 2015.

A reduction in the thickness of silicon of the thin film technology with tech- from 180 µm to 120 µm in the next 10 nologies related to crystalline silicon. years would cause a fall in the cost of It could reduce the cost of producing a modules by about 10%, assuming that module by 30%. the decline in thickness resulted in a Reduction in the quantity of consuma- decline, in similar proportions, in 50- bles20 used in production processes 18 75% of the cost of producing wafers . The consumables in the photovoltaic These projections do not take into ac- module production process from the count potentially radical changes such polysilicon production stage can also as, for example, those of the French permit cost reductions. Laboratories company S’Tile19. This firm has devel- such as the CEA and CSEM21 are re- oped an innovative fabrication process searching these issues. For example, (soon in the pilot phase of industrial the stage of ingot sawing to produce validation of the technology) which wafers is a heavy consumer of cutting makes it possible to reduce the silicon wire. Developments have been made thickness to 40 µm by using a ceramic with diamond-coated cutting wires to substrate with a sintered silicon pow- save a few percent on production costs der base. This technology, if it materi- by extending the lifetime of these con- alizes, is the first example of a merger sumables.

18- A smaller quantity of silicon implies a smaller quantity of energy for wafer fabrication. The wafer fabrication process consists of melting silicon in cru- 20- A consumable is an item used during the produc- cibles, followed by solidification of the ingots and, tion process which becomes worn over time and must finally, cutting out the ingots into wafers. While the be replaced. For example, wafer fabrication requires a last part of the process is only slightly impacted by cutting out step using a special wire. This wire is a the reduction in thickness, the first part, very ener- consumable: it becomes worn and must be replaced. gy-hungry, is impacted. 21- CEA = Commissariat à l’Energie Atomique et aux 19- http://www.silicontile.fr/la-technologie/la-cellule- Energies Alternatives; CSEM = Centre Suisse d’Electro- integree/ nique et de Microtechnique.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 21 Reduction in the number of production gle step with no loss of silicon. This also steps, and automation allows gains in product quality thanks The series of steps from polysilicon pro- to improved wafer uniformity and ho- duction to the module involving human mogeneity. intervention is a source of non-quality. This technology is already producing Each step and each transfer from one results, and a 250 MW production plant step to another entails a risk of dam- is planned. Its potential has not gone aging the products and, overall, either unnoticed: Chinese and Japanese in- reducing production efficiency and vestors22 have forged an alliance with hence increasing production costs, or this firm, because such a process would increasing the defects in the product effectively be a major breakthrough for and reducing its performance in terms photovoltaic power in general and for of durability and energy efficiency. the polycrystalline silicon technology Automation is a first step to improve in particular. These disruptive innova- product cost and quality. All the stake- tions suggest potential for technologies holders see this trend on the horizon in other than polycrystalline silicon. the next few years, generating competitiveness gains for photovoltaic power. Surveyed stakeholders also expect an 2.2.3 Inverters increase in the unit size of plants, from To be capable of injecting the electricity 1 to 5 GW on a 2030-2040 horizon, here produced by photovoltaic modules, it is FIGURE 18 : : ONE-STEP FABRICATION PROCESS FOR A POLYCRYSTALLINE again producing effects of scale which necessary to adapt the characteristics WAFER, 1366 TECHNOLOGY will improve the competitiveness of of the electricity produced. Photovoltaic photovoltaic power. modules produce direct current, whereas the power grid and building installations use an alternating current at a frequency of 50 Hz. To convert direct current to alternating current, a power electronics device is used: the inverter. An inverter is not used merely to convert direct current to alternating current. It can also include control and interface equipment to improve the performance of photovoltaic installations. The latest developments allow inverters to contribute to stabilization of the power on the grid, and produce reactive power23. Inverters are also experiencing cost trends similar to those for photovoltaic modules according to market size. Here again, the technical fundamentals of the inverter industry, namely power electronics products, explain the cost trends as a function of the increase in Together with automation, laboratories market size. Not the amplitude of the and manufacturers are also working on trends, but their linear relationship. a reduction in the number of production steps, which gives gains in terms of costs, energy consumption and quality

improvement. A promising example is 22-Haiyin Capital and IHI Corporation. the US-based company 1366 Technolo- 23- A device which produces work consumes so-called gies. It has developed a fabrication pro- active power. However, just as an electron rotating in a copper coil generates a magnetic field, so the use cess for polycrystalline silicon wafers of alternating current in our equipment can, in particular, generate magnetic fields that are associated which permits a reduction from four with the device's reactive power. This is an important steps with 50% silicon losses to a sin- parameter for the stability and overall optimization of a power grid.

22 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 19 : COST TRENDS FOR PHOTOVOLTAIC INVERTERS. DATA: FRAUNHOFER INSTITUTE, MIT. ILLUSTRATION: FONDATION NICOLAS HULOT.

Inverter improvements ital cost of inverters but which makes photovoltaic industry, especially its in- The main future developments are a the overall economic equation more stallation component, is still young and generalized voltage increase from 1000 competitive is the incorporation of new needs to improve in order to optimize its to 1500 V allowing a reduction of ap- systems at the inverter level: better industrial processes. proximately 10% in capital costs related monitoring and better communication One example concerns setting up of the to the inverter. Another development for an improvement in the photovoltaic metallic structures bearing the photo- expected over the next 5 to 10 years power plant’s performance, and inclu- voltaic panels. Technologies have been is an increase in inverters’ service life sion of a service to help with network developed allowing the use of metal- from 10 to 15 years. Further productivity stabilization. lic piles drilled directly in the ground, improvements, especially regarding the without a concrete structure, using design to help improve inverter main- machines that automatically adjust the tainability (since this equipment is one 2.2.4 Other costs, “Balance of position of the piles. These innovations of the main maintenance points) will System” have been able to reduce by 20% to 30% make it possible to continue to bring The “Balance of System” comprises all the costs of the structural part while down inverter costs. the other cost components of a photo- improving the environmental impact A new device has appeared in the res- voltaic module = electrical cables, the (no concrete foundation)24. idential market: micro-inverters. Their structure on which the module rests, Reduction of installation and advantage lies in their direct incorpo- the land, labor for installation, the maintenance costs ration in photovoltaic modules, thereby transformer and miscellaneous engi- Installation eliminating installation costs. Sunpow- neering costs and administrative ex- The installation costs for ground-based er, in particular, has developed a mod- penses (including taxes). power plants represent a significant ule for the residential sector allowing a For the “Balance of System”, it is not so proportion of the cost of a photovol- “plug-and-play” mode for easier instal- much the “production” of the various taic installation, whether it be a large lation. However, some stakeholders are items (very labor-intensive) which will ground-based installation (approx. 10%) still skeptical regarding the economic play a role in pursuing competitiveness, or a small residential installation (ap- and technical viability of these mi- as the standardization of installation prox. 25%). cro-inverters. processes, effects of scale and … im- Another factor which does not neces- proved professionalism. The developers 24- Neoen has implemented this technology at its Ces- sarily result in a reduction in the cap- themselves recognize the fact that the tas location in southwest France.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 23 Automation of tasks such as precise Impact of improvements in the ter-effect due to the increase in pow- positioning of the structures’ metal- efficiency of photovoltaic modules er per cable, which entails rather an lic piles by machines will be extended on the costs of the “Balance of increase in the unit cost of each ca- only marginally to other parts of the System” part ble, but the overall economic equa- installation phase. This phase will al- In addition to its impact on the unit tion results in savings). ways remain labor-intensive. On the cost of modules, an improvement in These gains are non-negligible. For other hand, improving professionalism the efficiency of photovoltaic modules example, increasing energy efficiency and increasing the skills and efficiency has an impact on the cost components from 15% to 20% reduces surface area of installers is still a major lever for im- of the “Balance of System” part. This is needs by about 25% and hence struc- proving competitiveness. because an efficiency improvement de- ture needs (and costs) by 25%. creases the size of the installation for Regarding this we note major differenc- More precisely, as an illustration, if we an identical capacity, and therefore: es not only due to differences in labor consider that the costs per watt remain costs, but especially due to differences • the size of the structure per Wp, and fixed for the modules and for the invert- in levels of professionalization. Where- the length of installation time and er and electrical parts (which is a good as in France installation costs are about hence its cost; basic approximation), the efficiency 25 US$0.9/Wp for a total cost of US$4/ • the land and civil works; effect alone will, in the short term, re- Wp (for a roof-integrated residential • cabling, as emphasized in the Fraun- duce the costs of photovoltaic power by installation), in Germany costs are hofer Institute’s study published in about 5% as shown in Figure 20. about US$0.2/Wp (for on-roof installa- February 201528 (there is a coun- tion), for a total cost of approx. US$2/ Wp, while the United States is closer to France than to Germany in terms of 28- One stakeholder reported costs of US$2.1/Wp for a 9 kWp building-integrated installation with a si- costs26. The 2015 study by the MIT on gnificant reduction in installation costs. The same stakeholder mentioned that switching from a buil- the future of solar power also mentions ding-integrated system to an on-roof system would this clearly: these cost differences are make it possible to save up to 30% on installation costs. because of due to differences of efficiency and professionalism. In France there are already stakeholders which stand out and will act as a driving force27. FIGURE 20 : IMPACT OF AN IMPROVEMENT IN EFFICIENCY ON BOS COSTS (THE OTHER COSTS ARE CONSIDERED Professionalization will provide both CONSTANT). CALCULATIONS: FONDATION NICOLAS HULOT. cost reductions and an improvement in the quality of installations. This is a normal tendency for an industry that is still young. Maintenance Maintenance is also a source of improvement in competitiveness at the levels of both cost and impact on the service life of an installation. One of the components requiring the most maintenance in a photovoltaic installation is the inverter. Recent improvements at the level of inverter design will be able to optimize maintenance costs and hence the lifetime and overall performance of the installation.

25- ADEME data 26-(MIT, 2015) CITATION MIT15 \l 1036 27- One stakeholder reported costs of US$2.1/Wp for a 9 kWp building-integrated installation with a significant reduction in installation costs. The same stakeholder mentioned that switching from a building-integrated system to an on-roof system would make it possible to save up to 30% on installation costs.

24 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG 2.3 Photovoltaic power cost prospects which will make it a very competitive energy

2.3.1 An expected halving of this technology in the global electricity through assessment of these various capital costs and energy landscape. given by the experts consulted. Each Allowing for the various aspects of Over the next 10 years, based on data time, a high and low scenario are es- improvement in the competitiveness analysis and expert opinions, we can tablished (in terms of cost). They reflect of photovoltaic systems, we can draw indeed envisage a 20% to 40% reduction (i) for the current and coming years, the up a roadmap for trends in the cost of in the cost of a ground-based photovol- cost delta existing at present from one photovoltaic power on the 2050 hori- taic installation and a residential pho- installation to another and from one zon. It is important to remember that tovoltaic installation. Longer-term, the country to another due to differences every roadmap is hard to anticipate. market trend is to a halving of capital in the technical skills of installers, ad- Past experience with photovoltaic pow- costs. ministrative costs, etc.; and (ii) for the 2030-2050 horizon the inherent uncer- er shows us this. However, this makes The cost scenarios of the FNH were de- tainty regarding these future costs. it possible to realign the positioning of termined using the data collected and

FIGURE 21 : PROSPECTIVE TRENDS FOR THE INSTALLATION COST OF GROUND-BASED PHOTOVOLTAIC POWER PLANTS. ILLUSTRATION: FONDATION NICOLAS HULOT.

FIGURE 22 : PROSPECTIVE TRENDS FOR THE INSTALLATION COST OF RESIDENTIAL PHOTOVOLTAIC SYSTEMS. ILLUSTRATION: FONDATION NICOLAS HULOT.

ANALYSIS: THE TRENDS FOR THE INSTALLATION COSTS OF RESIDENTIAL PHOTOVOLTAIC POWER PLANTS REVEAL A SIGNIFICANT REDUCTION IN THE DIFFERENCE BETWEEN MINIMUM AND MAXIMUM COSTS. THIS REFLECTS THE CHANGE IN THE MATURITY DIFFERENTIAL OF THIS SECTOR ON THE GLOBAL LEVEL. IN 2015, WHILE GERMANY HAS COSTS AT THE LOW END OF THE RANGE DUE TO A MATURE, STRUCTURED AND COMPETITIVE SECTOR FOR INSTALLATION OF RESIDENTIAL PHOTOVOLTAIC POWER PLANTS, THE UNITED STATES IS STILL AT THE HIGH END OF THE RANGE DUE TO A FRAGMENTED MARKET, WHICH HAS NOT YET IMPLEMENTED THE CONTINUOUS IMPROVEMENT APPROACH THAT THE SECTOR UNDERWENT IN GERMANY. THIS IS AN ASPECT EMPHASIZED PARTICULARLY IN THE MIT'S 2015 REPORT ON THE FUTURE OF SOLAR ENERGY.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 25 2.3.2 Trend for the LCOE up to In the case of silicon cells, the panels 2050 are inert: barring a sealing defect between the glass and the cells, nothing As we saw in sub-section 2.1.3, the can happen. The oldest photovoltaic LCOE of photovoltaic power corresponds power plant is at Lugano in the Applied to the levelized cost of this energy over Science and Arts University of southern the entire life of the equipment which Switzerland. Installed in 1982 (capacity produced it. It is therefore impacted 10 kW), it still operates: after 33 years, significantly by the lifetime of the cells. the capacity is still about 80%. Accord- At present, cells are considered to have ing to some commentators, the modules a lifetime of 25 years. This means in used contain more material and were fact that at the end of this period, the therefore more solid. Conversely, ac- cell will still produce 80% of its initial cording to others, production processes capacity. This lifetime is modelled on have improved and our understanding the manufacturers’ warranties, which of durability issues has increased enor- are themselves imposed by insurers mously. The correct evaluation is rather and bankers. The latter have adopted this second one. Whereas the guaran- this lifetime because they have suffi- tees correspond to an annual decline in cient historical data to validate it. In the capacity of approximately 0.9% of maxi- context of buyback tariffs or 20-year mum power per year, all the developers PPAs, the definition of the business now recognize and use in their busi- model sometimes even involves con- ness model a deterioration of only 0.5% sidering a lifetime equal to that of the per year. The Lugano power plant, for installation, i.e. 20 years. its part, corresponds to a deterioration Indeed, even if a manufacturer’s tests of 0.7% per year. showed that the lifetime of their cells It is therefore highly likely that the ef- was 30 or 40 years, for the commonly fective lifetime of photovoltaic power accepted guarantee, the financing pe- plants will exceed 25 years and that the riod and the estimate of the life-cycle standard will be 30 or even 40 years. cost, the figure would remain fixed at The impact on the life-cycle cost of the 25 or even 20 years. installation is significant, as illustrated Nowadays, some producers consider in Figure 23. that their cells will last 30-40 years.

FIGURE 23* : ILLUSTRATION OF THE TREND FOR THE LCOE AS A FUNCTION OF THE LIFETIME OF A PHOTOVOLTAIC POWER PLANT. CALCULATIONS: FONDATION NICOLAS HULOT.

ANALYSIS: FOR AN IDENTICAL INITIAL CAPITAL COST AND OPERATING COSTS, ASSUMING A LIFETIME OF 20 OR 30 YEARS FOR THE PHOTOVOLTAIC MODULES, WE OBTAIN A COST DIFFERENCE OF APPROXIMATELY 16% (€82 PER MWH VERSUS €69 PER MWH). THIS DIFFERENCE, WHICH SEEMS PURELY MATHEMATICAL, IS IN FACT VERY IMPORTANT FOR EVALUATION OF THE RELATIVE COMPETITIVENESS OF VARIOUS MEANS OF ELECTRICITY PRODUCTION. * A 10 MW power plant for which the inverters are replaced every 10 years is considered in this illustration. We assume in each case an end-of-life capacity of about 80% compared with the initial capacity. The costs correspond to those of new projects undergoing development in France.

26 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG Based on the production cost trends FIGURE 24 : TREND IN LCOE RANGES FOR LARGE GROUND-BASED INSTALLATIONS AND SMALL (RESIDENTIAL) described in the previous section, and INSTALLATIONS. SOURCES: FONDATION NICOLAS HULOT (INSTALLATION COST SCENARIOS FIGURE 21 AND taking into account an extension of the FIGURE 22 LOW LEVEL OF COSTS = ORANGE COLOR; HIGH LEVEL OF COSTS = RED BLUE COLOR), ADEME, EXPERTS, IEA, TRANSPARENT COST DATABASE, E&Y, BNEF, MIT. ILLUSTRATION: FONDATION NICOLAS HULOT. service life by 25 to 30, and then 40 ANALYSIS: THE FIRST GRAPH CONCERNING GROUND-BASED PV POWER PLANTS SHOWS THAT PHOTOVOLTAIC POWER years, it appears that the electrical and IS ALREADY IN SOME CASES () COMPETITIVE WITH CONVENTIONAL FACILITIES, BUT THAT IT WILL BECOME SO energy universe is bound to be thor- SYSTEMATICALLY IN THE NEAR FUTURE. THE SECOND GRAPH SHOWS THAT THE ELECTRICITY PRODUCED BY A RESIDENTIAL INSTALLATION (WHICH CAN BE SELF-CONSUMED ON-SITE) IS ALSO IN SOME CASES COMPETITIVE WITH THE PRICE oughly reshaped by comparison with OF ELECTRICITY SUPPLIED BY THE POWER GRID (INCLUDING PRODUCTION AND TRANSPORT COSTS) BUT THAT IT WILL its current vision. Photovoltaic system BECOME SO SYSTEMATICALLY IN THE NEAR FUTURE WITH A DIFFERENTIAL THAT COULD BECOME SIGNIFICANT. development costs have fallen rapidly below the cost of development of conventional means of production, with a deviation by a factor of 2 and more after 2040. Despite the intermittency of photovoltaic system, such a pullback would have a significant impact on the trend for the global electricity system. We shall see, moreover, in the following section, that trends in consumption management and storage could reduce the problem of intermittency and further accentuate this development.

2.4 Needs for investment in massive production of electricity

Although photovoltaic systems are already a technology competitive with conventional facilities (see sub-section 2.1.3), further improvements in its competitiveness will make it an important factor in the development of renewable energies in order to reduce greenhouse gas emissions. The question is therefore whether the necessary investments to make this energy a significant part of the electricity mix are feasible. The first observation concerns the speed of deployment of photovoltaic systems. Never has an energy sector technology experienced such development, which is more similar to the specific development process of the electronics world, in both its speed of penetration and the pace of innovation29. In 15 years, FIGURE 25 : GROWTH IN INVESTMENT IN LOW-CARBON ENERGIES, BNEF, 2015 the installed capacity has been multiplied by more than 100, from slightly more than 1 GWp in 2000 to 186 GWp at the end of 2014. In the last four years, this capacity has been increased more than threefold. In terms of investment, in 2014 there was a record $136 billion invested (25% more than in 2013) for a

29- In photovoltaic power, major innovations emerge and are implemented in a few years. By comparison, in the nuclear industry, the EPR began to be developed at the R&D/engineering level in the early 1990s… (MRD $)

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 27 capacity increase of about 46 GW. That • The second makes the assumption conventional energies. This therefore represents more than half of the invest- that the investment level of 2014 implies a higher level of investment ments in renewable energies and about ($136 billion) will be maintained in less competitive electricity produc- the same amount of investments in each year until 2050, while taking tion facilities. fossil-fueled electricity capacity, which into account capacity renewal to de- A capacity range of 6 to 8 TW in 2050, 31 have become a minority since 2007- duce the net installed capacity . which could meet 20% to 25% of global 2008 and are constantly decreasing in We note that the installed capacity electricity demand in 205032, therefore both absolute and relative value terms. forecasts based on the two scenarios seems possible based on the competi- determined by the FNH (see Figure 27) tiveness data for photovoltaic systems Figure 26 shows the growth in installed are all at the high end of the forecast and the required investment level. capacity for various selected scenarios. ranges (see Figure 26). Now, these two This figure is based on pure economic scenarios are generally conservative. analysis. It does not take into account • The identical installed capacity sce- constraints on the power grids, and in- To assess the feasibility in terms of in- nario implies that investments in termittency constraints which might or vestment, the FNH adopted two scenar- photovoltaic power are divided by a might not limit these growth prospects. ios with reference to the 2014 situation. factor of 3 to 6 on the 2050 horizon • The first makes the assumption that (see Figure 28). an additional installed capacity of 46 • The identical investment scenario GW (2014 reference) is maintained amounts to stopping the increase each year until 2050, while taking in investments in photovoltaic pow- into account, for the investment part, er despite the major increase in its the cost of renewal of capacity to be competitiveness by comparison with replaced30. 32-6000 to 8000 GWp represents a production of approximately 8 to 10 PWh (assuming an average inso- 30-For the capacity to be replaced, an average lifetime 31- Over the period 2015-2018, the average installed lation equivalent to 1350 kWh per kWp) out of a total of 30 years was assumed for the installations over the capacity forecasts were adopted so as not to diverge electricity consumption range of 33 to 40 PWh in 2050 period. too far from the short-term forecasts. (scenarios of the WEO 2014).

FIGURE 26 : PROSPECTIVE TRENDS FOR INSTALLED PHOTOVOLTAIC CAPACITY ACCORDING TO VARIOUS SOURCES. ILLUSTRATION: FONDATION NICOLAS HULOT.

ANALYSIS: THE VARIOUS SOURCES GIVE A FAIRLY BROAD RANGE OF PROSPECTS FOR INSTALLED PHOTOVOLTAIC CAPACITY IN 2050. THE RANGE IS FROM ABOUT 1000 GW TO NEARLY 6000 GW. THE LOW SCENARIOS ARE OFTEN DUE TO PESSIMISTIC SCENARIOS REGARDING THE COMPETITIVENESS OF PHOTOVOLTAIC POWER (REFLECTING THE IEA'S CAUTION ON THIS SUBJECT IN THE WEO 2014) IN CONTRAST WITH THE HIGH SCENARIOS (SUCH AS THAT OF THE FRAUNHOFER INSTITUTE OR THE IEA IN ITS "HI-REN" SCENARIO OF STRONG DEVELOPMENT OF RENEWABLE ENERGIES).

28 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 27 : PHOTOVOLTAIC POWER DEVELOPMENT SCENARIOS: (I) CONSTANT ADDITIONAL ANNUAL CAPACITY, (II) CONSTANT ANNUAL INVESTMENT. CALCULATIONS: FONDATION NICOLAS HULOT.

FIGURE 28 : GROWTH IN ANNUAL INVESTMENT FOR A CONSTANT ADDITIONAL ANNUAL CAPACITY EQUAL TO THAT OF 2014. CALCULATIONS: FONDATION NICOLAS HULOT.

ASSUMPTIONS: GRAPH PRODUCED ON THE BASIS OF THE CAPACITY UNIT COST RANGE FOR GROUND- BASED AND RESIDENTIAL INSTALLATIONS (SEE FIGURE 21 AND FIGURE 22) ASSUMING A 60%/40% BREAKDOWN OF THESE TWO MAJOR CATEGORIES OF INSTALLATION IN TERMS OF INSTALLED CAPACITY.

(MRD $)

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 29 © TATIC ©

THE ISSUE OF FINANCING

Photovoltaic installations are highly capital-intensive means of production Any measure capable of reducing the cost (variable costs are practically zero), so the cost of financing the initial in- of capital therefore contributes to the com- vestment can have a very significant impact on the levelized cost of the petitiveness of photovoltaic power. The re- installation. The following example shows that a reduction in the cost of port by Grandjean & Canfin, “Mobiliser les financing from 5% to 2% can bring the LCOE down by 15%. financements pour le climat” (Mobilizing financing for the climate) (2015), shows Interest rate (%) 5% 4% 3% 2% that there are a large number of tools to LCOE (USD/MWh) 95 90 86 82 encourage investment in green technolo- Evolution of the LCOE compared with an interest rate of 5% - -5% -10% -14% gies and make them competitive.

FIGURE 29 : CHANGES IN THE LCOE ACCORDING TO THE COST OF CAPITAL, "TECHNOLOGY ROADMAP - SOLAR PHOTOVOLTAIC ENERGY", IEA, 2014

ANALYSIS: THE HIGHER THE REQUIRED INTEREST RATE OR RATE OF RETURN (WACC), THE MORE THE COST OF CAPITAL (IN BLUE) INCREASES TO BECOME THE MAJOR COST ABOVE A WACC OF 10%. REDUCING THE WACC BY COMPETITIVE FINANCING ARRANGEMENTS, BUT ALSO BY MORE REASONABLE INVESTOR REQUIREMENTS, THEREFORE HAS A SIGNIFICANT IMPACT ON THE LCOE OF PHOTOVOLTAIC POWER.

30 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG THE LOAD FACTOR… THE SERIOUS DEFECT OF PHOTOVOLTAIC POWER?

One important factor for characterizing the operation of or sunlight hours available. Typically, a good wind site an installation is what is called the load factor, which is combined with current wind-power technologies makes the relation between the quantity of electricity actually it possible to have a load factor of approximately 20% to produced by a production installation and the quantity of 25% on land (it can exceed 30% offshore). For photovoltaic electricity that it would have produced if it had operated systems, the load factor can range from 10% to 20% (for constantly at its maximum capacity. the best sites in terms of sunlight hours). For run-of-river For example, a 100 MW installation operating for a whole hydropower, the load factors range from 30% to more than year (8760 h) at full capacity would produce 876 GWh. If, 60%. during that year, it produced “only” 600 GWh, it will be The low load factor of wind turbines and photovoltaic sys- said that it has a load factor of 600/876 = 68%. tems is often regarded as a drawback: a large MW capaci- For means of production can be managed such as thermal ty must be installed to obtain a few MWh. For example, to power facilities (nuclear power stations, power plants op- achieve the production of a 900 MW nuclear reactor, 5000 erating on coal, gas, biomass or biogas), the load factor is to 7000 MW of photovoltaic capacity must be installed, i.e. the result of technical and economic optimization. A gas- 4 to 8 times more! fired power station and a combined cycle gas-fired plant However, such arguments are of little interest, because could operate for only a few hundred hours per year and what counts in the end is the cost of producing electricity. have a load factor of less than 10%, but that would cost With regard to the space constraint, which is often men- more than for a fuel-oil-fired plant operating for the same tioned, let us take comparisons. Each year, we artificialize number of hours. On the other hand, a fuel-oil-fired plant 100,000 ha of land in France. Artificialized land is land with a load factor of 90% would have a very high cost, far that has been concreted, coated, which no longer breathes, more than that of a gas-fired power station. Even nuclear can no longer produce, which dies. This is not the case for power, which is constrained in its operating ranges, can the land on which photovoltaic panels are “planted”. In- see its load factor vary as a result of different types of use. stead of artificializing 100,000 ha with concrete (roads, Given the over-abundance of nuclear power in France, it vacant office buildings – the Paris region has millions of must be adapted during the year, and this results in a load square meters of such office space – etc.), if photovoltaic factor of approximately 75%, in contrast with the US nu- farms were placed there, each year approximately 100 GW clear fleet which can operate almost continuously at full of photovoltaic power capacity would be installed, repre- capacity and thus achieves a load factor of approximately senting 15% to 20% of the nation’s electricity consumption. 90%. So, no, the load factor of photovoltaic systems is not a seri- For intermittent renewable energies, the load factor does ous defect. It is an intrinsic characteristic which impacts not reflect a particular use but an intrinsic operating con- in particular its cost, which is the only important factor straint: a wind turbine needs wind to produce electricity, for differentiating means of production (when, of course, a photovoltaic panel cannot produce electricity at night, it takes into account the negative externalities of each etc. The load factor of wind turbines and photovoltaic means of production). power systems therefore depends on the quantity of wind © CC0

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 31 2.5 Supply constraints Given the abundance of the various el- and the EROI issue ements used in photovoltaic technologies at the level of the earth’s crust, the Although the conclusions of the pre- MIT identifies no theoretical constraint vious section are very encouraging on deployment on the TW scale (1000 regarding the growth prospects for GW) in 2050. This makes the 6 to 8 photovoltaic systems, it should not be TW forecast range of installed capac- forgotten that building a photovolta- ity in 2050 completely realistic from ic power plant requires raw materials. the perspective of supply constraints. What are they and what are the limits The constraints are related rather to the of supply (because, like all resources, availability of skilled labor and good they are present on our planet in a lim- production sites (and hence their eco- ited quantity)? Moreover, we must con- nomic feasibility). sider the energy needed for the production of a photovoltaic power plant. This For the materials common to the various is the EROI issue (the Energy Return On technologies, the MIT’s analysis based Investment). on quantities currently used shows that Supply constraints there are no particular constraints. The deployment of a technology does The data in Figure 30 show that the not depend solely on its technical per- cumulative needs on the 2050 horizon formance but also on the limits to the represent only a few years of current supply of the required raw materials. production in the worst case scenario for materials for which accessibility is All photovoltaic technologies require not a problem. For example, to install glass to protect the cells, plastic, steel 6000 to 8000 GW by around 2050, i.e. and aluminum for the structures, con- 20% to 25% of the world’s electricity crete for the foundations and copper for consumption on that horizon, the to- electrical connections. The other ele- tal quantity of aluminum needed cor- ments necessary for manufacturing the responds to one year of current pro- cells according to the various technolo- duction. For the materials in greatest gies are shown in Figure 3. demand, such as glass, these results In its 2015 study on solar energy, the show simply that photovoltaic power MIT studied the issue of the supply of could become a structural aspect of the FIGURE 30 : MATERIALS CONSUMPTION OF raw materials to sustain more or less PHOTOVOLTAIC INSTALLATIONS MEASURED IN YEARS OF production factors for these materials. substantial growth on the 2050 hori- CURRENT PRODUCTION DEPENDING ON THE PROPORTION Moreover, manufacturers are working 33 OF PHOTOVOLTAIC POWER IN GLOBAL ELECTRICITY zon . 34 CONSUMPTION IN 2050 (33,000 TWH IN THE MIT to reduce the thickness of the glass STUDY), "THE FUTURE OF SOLAR ENERGY", MIT, 2015 or to replace it with thinner and lighter ANALYSIS: TO ACHIEVE A PRODUCTION REPRESENTING polymers. These developments will be a 5% OF GLOBAL ELECTRICITY CONSUMPTION IN 33- (MIT, 2015) CITATION MIT15 \l 1036 2050, ONE YEAR OF CURRENT GLASS PRODUCTION factor improving the availability of ma- IS NEEDED (IN RED ON THE GRAPH). TO ACHIEVE terials in addition to competitiveness. 50% (THE SMALL CIRCLE ON THE RED LINE) TEN YEARS OF CURRENT PRODUCTION ARE NEEDED.

34- (MIT, 2015) CITATION MIT15 \l 1036, http://www.ceramicindustry.com/articles/94220- cutting-costs-in-photovoltaics-glass-manufacturing : whereas current technologies use glasses at least 3mm thick, the sector is tending toward 2mm glass, giving a 30% consumption gain, and polymer-base substrates.

32 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG For materials which are specific to a tech- FIGURE 31 : MATERIAL NEEDS OF VARIOUS PHOTOVOLTAIC TECHNOLOGIES nology, the economic and industrial situa- DEPENDING ON THE PROPORTION OF PHOTOVOLTAIC POWER IN GLOBAL tion may be different. CONSUMPTION IN 2050, "THE FUTURE OF SOLAR ENERGY", MIT, 2015 Let us first consider silicon. This is the sec- ANALYSIS: THE THREE GRAPHS SHOW THE MAIN GROUPS OF TECHNOLOGIES: COMMERCIAL TECHNOLOGIES BASED ON WAFERS, COMMERCIAL THIN FILM ond most abundant element in the earth’s TECHNOLOGIES AND EMERGING THIN FILM TECHNOLOGIES. ON THE RIGHT OF THE crust. It is present in various forms of sili- GRAPHS ARE SHOWN THE ACRONYMS OF VARIOUS TECHNOLOGIES: "C-SI" FOR CRYSTALLINE SILICON, "CDTE" FOR THE CADMIUM/TELLURIUM THIN FILM TECHNOLOGY, ca, and homogeneously. There is no physi- ETC. IN EACH GRAPH ARE INDICATED, FOR EACH TECHNOLOGY AND WITH THE SAME cal or economic constraint35. Moreover, the COLOR, THE COMPONENT MATERIALS OF THOSE TECHNOLOGIES. FOR "C-SI", THE QUANTITY OF SILICON (SI) AND THE QUANTITY OF SILVER (AG) ARE INDICATED. MIT data are based on quantities used at present. However, given the prospect of halving the use of silicon, or even dividing it by four, (see sub-section 2.2.2), the quantity needed to supply 25% of global electricity demand in 2050 could be reduced to a few years of current production, or less. As emphasized in the MIT report for silver, another important element in crystalline silicon cells, if the predictions by the ITRPV36 that silver requirements could be reduced by a factor of 3-437 materialize, then only two or three years of current silver production would be needed to manufacture photovoltaic cells whose average electricity production would account for 25% of total consumption in 2050. For the CdTe and CIGS thin film technologies and for GaAs technologies, on the other hand, in each case there is a limiting element requiring several hundred years of production: tellurium (Te), gallium (Ga), indium (In) and selenium (Se). Three difficulties can be seen: the question of the competitiveness of new fields to increase production capacity, the availability of labor, but above all the fact that these components are co-products of silver, copper and other metals. To increase the production of these co-products, production of the main products must be increased. Now, the economics of a mine requires exploitation of its various products. If the main products cannot be exploited, the mine will not be economically viable unless there is a very significant increase in the price of the co-products it wants to exploit. This is a difficulty which seems hard to resolve. Very with a reduction by a factor of 3 or 4 in the quantities required by peak watt compared with current data, the needs would still correspond to several hundred years of current production.

35- (USGS, Mineral Commodities - summaries 2015, 2015) CITATION USG15 \l 1036 36- (International Technology Roadmap for Photovoltaic, 2015)CITATION Int15 \l 1036 37- Such a reduction factor is not impossible. Already, the French company S’Tile has announced that its i-cell which is about to enter the demonstration phase will halve the quantity of silver per peak watt.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 33 This does not necessarily doom these Intuitively, it is easy to understand that technologies, but it will restrict their if more energy were needed to build a expansion, because no radical change photovoltaic power plant than the ener- in the mining supply of these materials gy that the power plant would generate is in sight at present. throughout its service life, there would The third category of cell, which is rap- not be much point in developing such a idly expanding in laboratories (quan- technology. Some experts consider that tum dots, cells based on perovskites the energy provided by an energy solu- in particular) has no problem of sup- tion must be at least five times greater ply. This is because at present all new than the energy required to implement photovoltaic technology developments the solution. take into account the issue of materi- Without examining in detail the valid- als supply (but not necessarily toxicity, ity of this figure, it seems fairly clear especially with the lead used in per- that the ratio between the energy sup- ovskite-based cells). plied by an energy solution and the en- So, looking at the universe of materi- ergy spent to implement that solution al constraints, the technologies using must be greater than 1. In the excellent silicon have no prohibitive constraints. book by Deberi, Deléage and Hémery, 39 Even the MIT sees none in its study A History of Energy , the authors ex- for photovoltaics accounting tor 100% plain that humanity developed through of global electricity consumption in the acquisition of efficient converters 205038. “saving human energy” for other tasks and thus making it possible to obtain The EROI (Energy Return On access to more resources. For example, Investment) the construction of sailing boats made How much energy is needed to produce it possible to transport merchandise 1 liter of gasoline, 1 kWh of electricity or with only 2-3 people when previously 1 cu.m of town gas? This is the ques- about ten additional rowers were need- tion that the EROI concept attempts to ed. The (mostly human) energy spent to answer. build the sailing boat made it possible to save far more human labor, because 38- The MIT does not say that this is feasible at the level of the electricity system, but simply that this growth hypothesis is not subject to a physical 39- (Jean-Claude Debeir - Jean-Paul Déléage - Daniel constraint regarding the necessary raw materials. Hémery, 2013)CITATION Jea13 \l 1036

HOW IS THE EROI CALCULATED?

To calculate the EROI, it is first essential to take into ac- on the EROI of photovoltaic power, on the other hand, the count the energy used to extract oil, gas, coal and urani- area examined is broader. It even claims to be complete um from the ground. Next, it is essential to take into ac- by including all the players involved in the construction count the energy needed for the manufacture of machines of a photovoltaic power plant and hence all the related capable of converting oil into gasoline, and coal, gas and energy expenditures: energy expenses for construction, uranium into electricity, or for capturing the wind and energy expenses to support the financial stakeholders sun and converting them into electricity. But should we allowing financing of a photovoltaic installation, energy also take into account the means of transport, oil and gas expenses to support administrative stakeholders working pipelines and other networks? Should we also consider “for” a photovoltaic installation (these stakeholders work the energy supplied to the humans who maintain the in- on regulation, control, taxes, etc.). Each cost (in cash) is stallations, the grids, and the roads to travel? As you can converted into this type of energy expense analysis. For see, the scope involved is a complex issue. It is hard to example, the banker needed to work out the financing for determine when to end allowance for the energy used to photovoltaic installations must be able to be housed and produce energy, since the latter is the basis of our activi- fed, and to travel to work for the financing of photovoltaic ties! This issue of the scope of responsibility also makes systems. This is reflected by a cost in terms of wages, but it possible to relativize the ratio of 5 considered by some it also generates an energy expense. There is therefore a authors as a good EROI. relation between the level of expenses (in cash) and the In most calculations, the scope of the EROI ends with con- quantity of energy consumed. sumption of the energy needed to build an energy pro- While the enlargement of the scope is interesting, it would duction installation or to build and operate an oil or gas be necessary to extend it to calculation of the EROI for all extraction installation. In the study by Hall and Prieto energies, in order to have comparable data.

34 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG the rowers could devote themselves to maintenance aspects, 1 MW of photo- other tasks that were not conceivable voltaic power now costs about €1m and THE RELENTLESS DECLINE before the advent of the sailing boat. maintenance over 25 years costs gen- IN THE EROI FOR OIL It also permitted population growth by erally €20K to €30K per MW per year, (here we consider the EROI relat- providing access to a vaster area for or between €0.5m and €0.75m over 25 ed exclusively to the investment procuring food for an identical human years. Keeping the scope and the data in the extraction installation and investment. The EROI of the sailing boat of Hall and Prieto, if we take the current not accessory energy expendi- was far greater than 1. But although an energy cost involved in the construc- tures). energy surplus was generated by using tion of a photovoltaic installation and the wind, this surplus had to be sus- that involved in its operation (although Until the 1930s, the EROI for oil tainable over time, because the former not taking into account potential sav- in the United States (the main oil rowers were now doing new activities, ings on the other cost factors), the EROI producer) was 100. In the 1970s, which were not indispensable in soci- increases from 2.41 to about 7-8. Tak- the EROI for global production ety prior to the sailing boat but which ing into account future improvements was between 25 and 40. It fell constituted the very essence of modern in the competitiveness of photovoltaic to 10-30 in 2005. At present, oil society’s existence. systems, the extension of the panels’ sands have an EROI ranging between <1 and about 8. These fig- This image makes it possible to un- service life from 25 to 30 and then 40 ures, which do not take into ac- derstand, apart from climate issues, years in 2050, we obtain the following count the accessory expenditures the need to ensure that a solution that pattern: related to oil (energy costs relat- is implemented can always generate a • Costs in 2030 according to the sce- ed to financing management, en- sufficient energy surplus to maintain nario of this report and a service life ergy costs related to the pollution and even continue to develop humanity. of 30 years: 10-11. generated, the energy used by all Two specialists on EROI issues, Messrs • Costs in 2050 according to the sce- the stakeholders directly or in- Hall and Prieto, have studied the EROI nario of this report and a service life directly involved in the project, of photovoltaic systems in Spain for of 30 years: 17-18. etc.), as in the study by Hall and installations built between 2009 and • Costs in 2050 according to the sce- Prieto, therefore overestimate the 2011. In their very detailed study, they nario of this report and a service life actual energy surplus generated find an EROI of 2.41: so one unit of ener- of 40 years: 23-24. by new oil fields. gy would be needed to create 2.41 units The EROI of oil decreases year after This gradual decline can be ex- with photovoltaic systems, giving a year. In contrast, photovoltaic power al- plained by the depletion of “eas- surplus of 1.41. Therefore if, effectively, ready exceeds the criterion of an EROI ily exploitable” fields. The new a surplus of 4 was needed to enable a greater than 5. The latter will still im- fields require more investment, civilization to continue to develop, pho- prove41 substantially over the coming more energy to extract oil which tovoltaics would not be a viable solution years, unlike for conventional electric- is located at greater depths, or in this respect. ity production techniques. is trapped in rocks from which On the other hand, French environ- These quick calculations call for a it is hard to extract it. Over time, ment and energy management agency deeper study of the present and future the situation can only get worse. ADEME found an EROI of approximate- data to refine the previous figures. This is one of the problems of the ly 10 to 3040, but without taking into But that will not change the identified oil planet. It is not so much the account the energy expenditures al- trend. Moreover, it would be interest- lack of oil that poses a problem, lowed for by Hall and Prieto, i.e. energy ing to do this for other fossil energies, as the decline in the energy sur- expenditures over and above the mere including carbon capture and storage, plus derived from it (apart from manufacture of the photovoltaic instal- and nuclear power. Their increasing its main problem which is CO2 lation (see box page 34). LCOEs and the likewise increasing gap emissions). Two of the most important factors in a with photovoltaics suggests that their photovoltaic installation are the capi- EROI will be less favorable and that tal cost in €/W and the cost of main- therefore, for humanity, this will be an tenance. Over the period 2009-2011, energy source or converter that is less Hall and Prieto estimated the capital efficient than photovoltaics. cost at about €5.5m/MW and operating and maintenance costs at €1.7m over 25 years. These euros correspond 41- The carbon content of photovoltaic electricity to energy investment. In light of the (currently between 30 and 80 grams of CO2 per kWh according to Ademe) will therefore also inevitably im- preceding investment analysis and the prove in the coming years. For sake of comparison, data from experts on the operating and installations operating on fossil energies emit between 300 and 1000 grams of CO2 per kWh, nuclear power and wind power around 10 grams and hydropower about 10 grams for installations in non-humid areas 40- (Ademe, Produire de l'électricité grâce à l'énergie or not drowning forests (in these areas, plant rotting solaire ('Producing electricity using solar energy'), can cause emissions of greenhouse gases, especially 2015) CITATION Ade15 \l 1036 methane, to climb significantly).

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 35 3. CHALLENGES FACING PV: INTERMITTENCY MANAGEMENT

he above forecasts should not 3.1 Integration into grids and on a sufficiently large level, and cause us to overlook an impor- hence with regard to the issue of the Ttant characteristic of photovol- To study the issue of the integration of balance between supply and demand, taic power, which is a potential obsta- photovoltaics into electricity grids, this there is no problem of intraday inter- cle to its expansion: its intermittency. report has examined the case of France, mittency. A photovoltaic system produces only which can be extended to a mature grid On the other hand, a photovoltaic sys- in the daytime and more in summer in a fairly large country, and hence to tem produces, in theory, whatever hap- than in winter. Moreover, production most developed countries. pens (except at night). Its production can be highly variable from one hour Integration of photovoltaics from has a potential impact on electrical to the next as a result of rapid changes the electricity transmission grid system management when considering in sunlight (e.g. a passing cloud). This viewpoint the power deviations relative to the dai- can cause problems of balance between Intraday intermittency ly average. This gives a measure of the supply and demand and hence at the One of the main problems of photovol- levels of variability needed to maintain grid management level. taics is its short-term intermittency. Its the balance of supply and demand (or 44 To obtain a realistic view of what could production can vary sharply from one net demand for photovoltaic produc- happen regarding the expansion of hour to the next. However, this charac- tion). photovoltaics, we must examine three teristic is very significantly reduced (or This need for flexibility of the electri- important aspects of the electrical sys- even cancelled out) by the transmission cal system depends intuitively, with tem: grid smoothing effect42, as stressed by regard to consumption, on the differ- • The grid’s capacity for withstanding the RTE43. The national production has ential between maximum consump- intermittency; practically a bell shape (see Figure 32), tion and minimum consumption. As • The capacity for increasing con- similar to the (theoretical) shape of the shown by the example of a summer day sumption flexibility to move in step production which would result from of consumption in France (this is true with production fluctuations; continuous insolation. Only the ampli- for most countries), peak consumption tude varies from one day to the next. is in the middle of the day, i.e. at the • The prospects for the development of same time as the peak in photovoltaic electricity storage. With regard to the transport network production (see Figure 33-a). The peak

42- The photovoltaic production seen by the transmis- in net demand will therefore tend to de- sion grid is the sum of the production of the connec- crease with the penetration of photovol- ted photovoltaic installations. The smoothing effect is due to the fact that the production of the installations taic systems, thus reducing the flexibil- varies on the whole independently of one another: a fall in photovoltaic production at one location in France ity requirement. On the other hand, at will be offset by an increase in another location. Short- a certain level of penetration of photo- term variations are therefore smoothed out in this way. voltaic systems, a consumption trough 43- (RTE, 2014) CITATION RTE14 \l 1036 will be generated, potentially resulting

FIGURE 32 : SMOOTHING in an increase in the flexibility require- EFFECT ON THE PRODUCTION ment, as illustrated by Figure 33-c tak- CURVE OF ALL PHOTOVOLTAIC 45 INSTALLATIONS THANKS en from the PEPS report and corre- TO THE ELECTRICITY sponding to a typical weekend day. TRANSMISSION SYSTEM, RTE

44- The net electricity demand is the result of the overall demand from which is subtracted the so-called "fatal" production, i.e. the production which occurs whatever happens (as is the case for photovoltaic solar power). 45- (Ademe - DGCIS - ATEE, 2013) CITATION Ade13 \l 1036

36 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG A B

FIGURE 33 :

A CURVE OF ELECTRICITY DEMAND IN FRANCE

B LOAD CURVE FOR VARIOUS REGIONS IN THE WORLD; SOURCE: IEC*

C CHANGE IN THE CURVE OF NET DEMAND FOR PHOTOVOLTAIC PRODUCTION ACCORDING TO THE RATE OF PENETRATION FOR PHOTOVOLTAICS. SOURCES: RTE AND ADEME

* (International Electrotechnical Commis- sion, 2011)CITATION Int11 \l 1036

29/10/2009 – 03:00 29/10/2009 – 07:00 29/10/2009 – 11:00 29/10/2009 – 15:00 29/10/2009 – 19:00

Intuitively, it is understandable that not increase the flexibility requirement the daily flexibility requirement is not by comparison with a situation without necessarily increased by photovolta- photovoltaics. There is therefore in the- ics. The simulations performed within ory no constraint up to these levels of the framework of the PEPS report show penetration on the French grid and on that, in France, the daily flexibility re- any mature grid46. According to the RTE quirement with 20-25 GW of photovol- experts and the studies they have per- taic power is equivalent to that without formed internally, the daily flexibility photovoltaic power (see Figure 34). We requirement for capacity is not impact- can basically indicate that a level of ed more than at present for the rates of penetration equivalent to 20-25% of the penetration mentioned above. power demand at peak consumption (about 100 GW in the case of France, for example), i.e. 5% to 8% of consumption 46- The above analysis is valid for a trouble-free reference situation and therefore implies a mature grid (which is about 450 TWh in all), does ensuring security of electricity supply.

FIGURE 34 : DAILY FLEXIBILITY REQUIREMENT ACCORDING TO INSTALLED SOLAR CAPACITY. SOURCE: ADEME* * (Ademe - DGCIS - ATEE, 2013) CITATION Ade13 \l 1036

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 37 Weekly fluctuations The second factor of intermittency of photovoltaic systems is fluctuations from one day to the next or weekly fluctuations. There can be major variations from the maximum level of the photovoltaic production bell shown in Figure

© KLAUS HOLL | CC BY-SA 3.0 HOLL | CC BY-SA © KLAUS 32. This can therefore create management problems at the level of the electrical system. At present this variability exists at the consumption level, as shown by the example of a week in July 2014 and a week in February 2015 (see Figure 35). In two days, the difference in power demand between the minimum power and maximum power can be from 20 to 30 GW with a variation in the average power of approximately 15 GW. The electrical system must therefore with- stand an across-the-board increase in FIGURE 35 : VARIATION IN ELECTRICITY DEMAND OVER ONE WEEK AT THE RTE-FRANCE LEVEL IN power demand. The same phenomenon SUMMER A AND IN WINTER B SOURCE RTE can occur with photovoltaic systems, for other reasons, considering net demand. The latter can change from one A day to the next due to a variation in the total photovoltaic production following changes in sunlight hours at the national level. These variations are not necessarily at the same times. On the other hand, photovoltaics cannot accentuate the preceding phenomenon significantly so long as it stays within penetration levels of approximately 20% to 25% of the maximum power demand. If this were the case, it would have to significantly increase the consumption peak and reduce the consumption trough. Now, it is at peak time that the photovoltaic system can produce, whereas at the time of the trough, it never produces. There is therefore in theory basically no significant impact of photovoltaics on the weekly flexibil- B ity requirement, at least so long as the installed photovoltaic capacity remains within proportions similar to standard consumption flexibilities. This “dimensional” analysis is consistent with the studies performed internally by RTE for France. According to RTE’s experts, the expansion of photovoltaic systems has no significant impact on the weekly flexibility requirement.

38 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG Seasonal intermittency ly, PSPS’s and thermal power stations50 problem is related to the distribution of The last factor of variability is seasonal were able to compensate for this pro- production capacity relative to electric- intermittency. This factor applies to the duction shortfall, but, more importantly, ity demand and grid density. On dense regions furthest north. For the “sunbelt” this test showed the feasibility of main- urban networks, whether for residential regions47, insolation is far more regular taining the balance of a power grid de- or service sector zones, the photovoltaic throughout the year. Irradiance48 can spite very significant variations in the capacity could reach 100% of the con- vary by a factor of 1 to 6 as in Germany, power of one of the system’s means of sumption peak for the area55. On net- or a factor of 1 to 1.5 as in Mali 49. This production51. works that are less dense, congestion fact makes it possible to understand As mentioned by a recent EDF study52, constraints would limit to 20-30% of that the proportion of photovoltaics is a system with significant intermitten- capacity the rate of penetration with- not equivalent in all regions of the terri- cy may require far greater variations in out strengthening the grid. At present, tory, and that in any case an electricity conventional thermal facilities in addi- various examples show that small- and mix will always be necessary. The spe- tion to the system’s storage facilities to medium-capacity photovoltaic systems cial feature of northern regions is that provide major variations in production. are expanding in zones of low density they have winters that are windier and However, the above example shows the and often with a capacity far greater with fewer sunlight hours, and sum- possibility of managing significant than local consumption peaks, which mers that are less windy but with more variations through anticipation and creates an extra cost. The typical ex- sunlight hours. The complementary smart consumption management. ample is an isolated farm installing 100 use of solar power and wind power is or 250 kW of photovoltaic capacity on a therefore appropriate to compensate for shed, i.e. the equivalent of the power for the disadvantage of photovoltaic power Inclusion of photovoltaic power several dozen houses56. over the full year. with regard to the distribution It is therefore necessary to deploy pho- This overall analysis shows that cur- system tovoltaic systems intelligently in rela- rent transmission systems are able to With regard to distribution systems, tion to the consumption locations, to absorb 20-25% of photovoltaic power, photovoltaics behaves differently. It avoid having capacity constraints on i.e. 5% to 8% of the total consumption of expands less, and also the low-voltage the distribution system. The constraint an electricity system. As a reminder, at power lines which will to the end con- of production density matching con- present photovoltaic power represents sumer may be affected by an injection sumption density must therefore be only slightly more than 1% of French of electricity coming from small in- verified, which is not necessarily the consumption. There is therefore no par- stallations, whereas their management case where there are no incentives. ticular problem at the level of national was initially planned only for draw-off. management of the electricity system, The main problems are: congestion Compliance with the voltage map a fact that is corroborated by RTE. In problems, with the need to strengthen Regarding the voltage map, the problem Germany, on the other hand, photovol- the grid, and problems in keeping the is mostly related to low-voltage lines. taic power already accounts for 7% of voltage within margins defined by a Even in the event of a good local match 53 consumption: its impact on the grid is voltage map . These problems are not between photovoltaic production and starting to become perceptible. Howev- caused by all installations. consumption, there will always be cur- er, these difficulties are not necessari- rent increases on lines devoted mainly ly insurmountable. On 20 March 2015, Congestion problems to the supply of points of consumption. a partial eclipse of the sun affected For large-capacity installations, there Current injection into a low-voltage net- Germany at around 10 o’clock in the is in theory no particular problem54, work line tends to increase the voltage. morning. Photovoltaic production fell because they are connected to the me- Conversely, when current is drawn off, by 5 GW in 75 min. and then increased dium- or higher-voltage grid by dedi- this tends to lower the voltage. For good by 14 GW in 75 min., the equivalent of cated infrastructure, like run-of-river resistance of the distribution system, the start-up in 75 min. of 15 nuclear hydropower plants in the past. There is the voltage must always remain with- reactors of 900 MW capacity, without therefore no grid impact. in a reference range. In a configuration the grid collapsing or going outside without photovoltaics, it is understand- For low -and medium- voltage installa- its standard operating specifications. able that the voltage map will tend to tions, the situation is different. The first Here, the important factor for electricity maintain the voltage near the top of the system management is the variation in range to cope with consumption peaks. power over a short period and not the 50- Note that at that time of day (between 10.00 am If, in this system, one incorporates pho- and 11.15 am) and for a day without an eclipse, in the quantity of energy involved. Admitted- absence of photovoltaic solar power in the German tovoltaics which will inject electricity energy mix, production would have been ensured by thermal power stations, because this corresponds to a consumption peak. 51- http://www.techniques-ingenieur.fr/actualite/ 55-(CIRED - A. Minaud - C. Gaudin - L. Karsenti, 2013) CITATION CIR13 \l 47- The "sunbelt" comprises the countries located technologies-de-l-energie-thematique_89428/eclipse- between the two tropics which enjoy the best insola- solaire-l-allemagne-passe-avec-succes-le-stress- 56- Although, for photovoltaics, the maximum production on earth by comparison with the countries in the test-de-sa-transition-energetique-article_293344/ tion capacities are added to one another, this is not the northern regions. 52- (EDF - R&D Division, 2015)CITATION EDF15 \l 1036 case for consumption, where time difference effects mean that the total power is far less than the sum of 48- Irradiance is a measure of the power of solar ra- 53- The voltage map defines lower and upper bounds the individual power ratings. In France, there are about diation on the ground per unit area. This quantity is that the voltage in a distribution system must not 30 million homes with a maximum electrical capacity expressed in W/m². exceed in order to maintain a standard quality of the of approximately 6 kVA, but the consumption peak is 49- (Anne Labouret and Michel Villoz, 2012)CITATION electricity supplied to consumers connected to the grid. at most around 100 GW and not more than 180 GW Ann12 \l 1036 54- (ERDF, 2013) CITATION ERD13 \l 1036 (180 GW = approx. 30 million x 6 kVA).

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 39 with potentially large and rapid power electrical mains frequency. Apart from result is very interesting in allowing fluctuations, this will tend to gener- the additional remuneration for photo- extensive development of photovoltaics. ate voltage peaks which could cause voltaic power farms (and hence an in- Without consumption management and the voltage to go beyond its reference crease in their competitiveness), this with a large photovoltaic capacity, pro- range, causing a local collapse in the can increase the grid’s capacity for in- duction peaks at midday could poten- network. This problem can be settled by corporating intermittent renewable en- tially exceed electricity consumption. changing the voltage map (which must ergies. In France, Energy Pool proposes Since it is possible to manage electric- be done in an organized manner), but to photovoltaic power plants a partici- ity uses and make them consume pho- above all by local regulation of the volt- pation in service systems as of 2016. tovoltaic power for at least 75% of their age based on appropriate management needs, it is possible to consider actively of photovoltaic installations’ reactive absorbing these production peaks by power. distorting the gross consumption curve Therefore, constraints on photovoltaics and making the consumption curve net exist, but they can be overcome by an 3.2 Consumption of photovoltaic production compatible improved match between production management with the operation of the power grid. For and consumption and by the imple- refrigeration and heating uses, it is also mentation of new systems, the cost of In the old electricity world, that of the possible to fairly easily increase the which will remain marginal by com- grid as it has been developed since rate of penetration of photovoltaics up parison with the overall cost. A reactive Edison’s first electric power station in to 50% of the equipment’s consumption. power management system uses power 1882, consumption is variable and it is The questions which then arise con- electronics which costs less than an production that adjusts. But, with pho- cern the technical feasibility and the inverter. It currently represents about tovoltaic power it is production which is proportion of electricity consumption 10% of the cost of an installation. Com- variable. Therefore, consumption must which can be effectively managed. now adapt to production. bining this perspective with the capac- In France, consumption management ity of the transmission grid to accept In the paradigm of the “old world” has existed for more than 50 years. It photovoltaic intermittency, 5% to 8% of stakeholders, this is inconceivable. is implemented mainly via direct man- electricity consumption could be pro- Electricity is a basic commodity which agement of hot water cylinder con- duced by photovoltaic systems without must be able to be supplied securely at sumption and through price structures 57 excessive changes in the grid . How- all times. But is electricity an end prod- providing incentives to consume in ever, to go further and achieve the 20- uct consumed as such? In some ways, specific time slots. This management 25% levels underlying the prospects for no. What is consumed are the services was and still is not very dynamic, be- development of photovoltaic systems of electrical equipment: the possibility cause it aims mainly at managing the from a purely economic and financial of telephoning, obtaining lighting by problem of electrical peaks in a fully standpoint, additional measures would means of a lamp, having clean linen manageable production system. While be needed. using a washing machine, having a the objective is different from that for Moreover, grid management in itself pleasant temperature thanks to a radia- the incorporation of photovoltaics, the can improve the integration of inter- tor, etc. But, you don’t necessarily want results are nevertheless impressive, as mittent renewable energies. According to phone or wash your linen at all times. shown by Figure 36. The amplitude of to some experts, the Danish grid man- Likewise, given the inertia of a housing power fluctuations in one day has been ager enormously changed its grid man- unit (especially if it is well insulated), it able to be divided by a factor of 4 in 50 agement methods, making increased is not necessary for a radiator to operate years. However, this management is use of forecasts and with far greater constantly. Therefore, there is clearly performed only on a specific segment involvement of the stakeholders in the an intrinsic flexibility in the use of the of electrical uses which have increased very short-term management of their various equipment. sharply (heating, refrigerator, washing production. This made it possible to A first observation: management can machine, electronics, etc.) and will con- generate greater flexibility in grid man- increase the proportion of photovolta- tinue to increase (electric car). agement and hence greater reactivity to ic electricity used by electrical equip- cope with rapid variations in the pro- ment. The Ines organization carried out duction of some types of power stations. an experiment on electric cars. Without In Denmark, it is of course wind power management, photovoltaic production that is predominant and not photovol- accounted for 15-20% of the battery’s taic power, but basically this changes electricity supply. With management – nothing in the problem of intermitten- and taking into account operating con- cy, with regard to the power grid. straints – the proportion of photovoltaic Likewise, via the services provided electricity injected into the battery in- by their inverters, photovoltaic power creased to more than 75%. The same plants can contribute to control of the result could be expected on hot water cylinders now managed, in France, especially as a function of nuclear sur- 57- This does not include the connection of large-capacity installations, but as was the case for hydroelectric pluses at night (resulting in low prices) power stations or the Flamanville EPR, specific lines or local constraints on the grid. This were built in each case to transport their production.

40 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 36 : CHANGE IN THE DAILY PROFILE OF FRENCH ELECTRICITY CONSUMPTION FROM 1957 TO 2007 (TO COMPARE EACH YEAR, THE RATIO BETWEEN POWER DEMAND AND THE AVERAGE DAILY POWER HAS BEEN SHOWN ON THE VERTICAL AXIS). SOURCE: "RENDRE PLUS FLEXIBLES LES CONSOMMATIONS D'ÉLECTRICITÉ DANS LE RÉSIDENTIEL" ("MAKING RESIDENTIAL ELECTRICITY CONSUMPTION MORE FLEXIBLE"), THE SHIFT PROJECT 2015.

In 2015, the Shift Project think tank daily consumption of approximately 50 performed a detailed study of the flex- GWh. The electric hot water cylinders ibility potential of various residential present in only 30% of homes would by electricity uses. For the type of uses themselves be able to meet the flexibil- identified, heating, domestic hot water ity requirements of approximately 25 (hot water cylinder) and domestic cool- GW of photovoltaics (see above) 58. If ing account for over half of consump- all homes were equipped with electric tion. Figure 37-b shows that about 3 kW hot water cylinders, the manageable is flexible in homes, including 1.8 kW power would be tripled and the energy for hot water cylinders. The advantage that could be shifted each day would of these power ratings is their potential be approximately 150 GWh, well above for absorbing intermittent production the 65 GW flexibility requirements of peaks. At present, hot water cylinder photovoltaics in France. The potential

FIGURE 37 : management can reduce consumption of this existing technology is therefore

A BREAKDOWN OF ELECTRICITY peaks by 6 GW in the morning and 6 GW very substantial. CONSUMPTION IN THE RESIDENTIAL in the evening. With approximately 11 SECTOR IN FRANCE million electric hot water cylinders, the 58- At present, only 80% of hot water cylinders are B AVERAGE FLEXIBLE CAPACITY IN THE servo controlled, so that only 16 GW of flexibility is now RESIDENTIAL SECTOR. SOURCE: "RENDRE potential is in fact around 20 GW for a operational, but there is nothing to prevent 100% servo control of hot water cylinders. FLEXIBLES LES CONSOMMATIONS ÉLECTRIQUES DANS LE RÉSIDENTIEL" ("MAKING RESIDENTIAL ELECTRICITY CONSUMPTION MORE FLEXIBLE"), THE SHIFT PROJECT 2015.

A B Average flexible power in W Average flexible power in

Heating Hot water Washing Cooling Total number of electric equipment in France

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 41 This situation is not specific to France, FIGURE 38 : SHARE OF ELECTRIC DOMESTIC HOT WATER IN RESIDENTIAL ELECTRICITY CONSUMPTION IN VARIOUS COUNTRIES OF THE WORLD, "TECHNOLOGY ROADMAP - ENERGY STORAGE", IEA, 2014 even though France is characterized by a high rate of electrification of thermal applications. The following table shows the share of electricity in domestic hot water. There is therefore already great potential for using the above flexibilities on the global level. The development of the electric vehicle will add even greater potential which could play a flexibility role over several days. With average travel distances of approximately 40-60 km and due to increased battery life (Tesla is already at 500 km59), batteries no longer have to be charged each day (see below for developments in electrochemical storage). As more and more stakeholders are saying, all the technology for electricity

consumption management exists and FIGURE 39 : LOAD SHEDDING PERFORMED BY ENERGY POOL ON MORE THAN 500 MW IN 2013. there is great potential. If this is not taking place at present, it is because of two reasons. • The first is related to the fact that the rate of penetration of photovoltaics (and intermittent renewable energies in general) means this is not yet necessary. • The second is that, at least in France, this management must emerge from its legacy of control by grid managers to shift to the level of management by private stakeholders. This also requires reviewing the tariff structures, which do not yet take into account the concept of excess intermittent renewable production. Another reason put forward is the discomfort for consumers. The existing example of hot water cylinder management, but also the use of peak/off-peak rates or ‘EJP’ (peak-day load shed- formed experiments on electric heat- pacity and future possibilities. On that ding)60 tariffs with manual control by ing management in Brittany in order to day, with two hours’ prior notice, Ener- the consumer of the use of their clothes prevent blackouts due to the weakness gy Pool found 500 MW of load shedding or dish washing machine, show that of the grid and of production in this re- from 24 industrial plants for a total vol- discomfort is a false reason. gion. The results of these experiments ume of about 1.8 GWh over a maximum Consumption management can be per- show that (i) the diffuse load shedding period of 4h. The magnitude of the de- formed by shifting consumption to the solution makes it possible to control cline shows that it is already possible to appropriate time in the event of a pro- voltages on the power grid and prevent “manage” the electricity consumption duction peak, but also by consumption blackouts, and that (ii) consumers very of industry depending on the electric- 61 shedding in the event of a production readily accept rotating heating switch- ity system’s needs. At present, Energy trough. Voltalis, which has a diffuse offs for 20-30 min. and cumulative load Pool has 1200 MW of capacity subject load shedding technology, has per- shedding operations for up to about to load shedding with industrial con- one hundred hours. Energy Pool has sumers that can be activated within 59- http://www.teslamotors.com/fr_FR/models also developed a load shedding system 2 hours. This capacity was placed on 60- EJP = effacement jour de pointe (peak-day load shedding). This is a special tariff with several price at the industrial level to absorb pro- alert 5 times in 2015. levels (day/night differential, and some days are very duction troughs via demand response expensive to reduce consumption on those days). Another flexibility problem has been 61- Load shedding involves asking stakeholders schemes. The day of 5 April 2013 is mentioned earlier, the problem of in- (private buyers or businesses) to stop their energy fairly eloquent regarding current ca- consumption voluntarily or automatically. This action ter-seasonal flexibility which depends could be remunerated.

42 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 40 : COMPARISON OF FRANCE'S ELECTRICITY CONSUMPTION AND PRODUCTION SURPLUSES/DEFICITS IN 2018 DUE IN PARTICULAR TO THE STRONG PENETRATION OF PHOTOVOLTAIC/ WIND-POWER INTERMITTENT ENERGIES. SOURCE: "FLEXI-CONSOMMATEURS" THINK TANK.

on latitude. This problem, which is Figure 40 shows two things: practically non-existent in some coun- • In summer there is a fairly stable IS THERMAL REGULATION tries, is significant in northern lati- production surplus (NB: the scale of RT 2012 WELL DESIGNED? tudes. On the face of it, this difficulty the graph could be deceptive, since Thermal Regulation RT 2012 im- in the development of photovoltaics is on a small time scale there can be plicitly combatted electric heat- not easy to manage. While postponing major variations leading to a far ing and domestic hot water on the filling of a hot water cylinder un- smaller surplus than what appears the grounds that they required til midday instead of the evening will on the graph). the start-up of gas- or coal-fired not impact the use of hot water by the • There is a tendency to have deficits in electric power stations. Without consumer, shifting consumption from winter, but with far larger variations wanting to enter this controversy, winter to summer is not obvious. The than in summer. it is clear that flexibility require- only types of consumption which can ments at the consumption level be adjusted over the year are those of Such a situation might seem insur- to absorb the intermittency of industries capable of storing their pro- mountable and represent a major photovoltaic power and effective- duction. curb on the expansion of photovoltaics. However, the manufacturers in ly flexible uses (in particular for Energy Pool has reflected with manu- the “flexi-consumer” think tank, after heating and domestic hot water) facturers on this question within the analysis, have reached the conclusion require a rethink of RT 2012. For framework of the “Flexi-consumer” that there was an economic benefit example, it is far more appropri- think tank. The think tank’s findings from shifting large volumes of their ate to power a hot water cylin- show that, according to the figures industrial production and hence their der with photovoltaic electricity from RTE, the problem of seasonal var- electricity consumption to summer than with gas. The same holds iations in photovoltaic production will while maintaining flexibility, and, on for heating. It would therefore be perceptible as of 2018. This analysis the other hand, increasing their flex- be useful to rethink the RT 2012 naturally takes into account the elec- ibility in winter when the situation is approach in light of prospective tricity mix and not merely photovoltaic more chaotic62. This is technically fea- changes in the electricity mix. power. In summer, however, wind pow- sible for these manufacturers63 (one of er, the other intermittent energy, pro- the members of the think tank rightly duces less than in winter. It is therefore pointed out that the curve in Figure 40 clearly photovoltaic power that is the corresponded to the curve of concrete main intermittent energy generating production, for example). potential surpluses in summer relative to winter, especially since, in regions 62- There could be question marks concerning the such as France, summer represents a social acceptability of an increase in the workload in summertime. No study has been performed, but trough in consumption from an overall between being able to spread their holiday leave over the entire summer season and being forced to take annual view of electricity consumption. leave during the annual shutdown which generally takes place in early August, right in the peak holiday season (hence peak costs), some could favorably view an increase in the workload in summer. 63- This does not apply only to small industries, but to large industrial firms such as cement and steel producers, i.e. industries carrying out complex industrial processes.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 43 It is also financially feasible provided 3.3 Storage, a new one promote service systems associ- revolution? ated with constant modulation of their consumption and take into account the Given the increasing potential for fact that these manufacturers would adapting electricity consumption to absorb a large quantity of intermittent production and grid characteristics, it electricity having a zero marginal cost. is already possible to foresee signif- Demand management, whether by icant growth in photovoltaics world- forcing consumption at specific times wide. At the same time, developments or by consumption shedding during in storage, and especially electrochem- production troughs, is therefore now ical storage, could radically change the not only feasible but, what’s more, al- approach to standby facilities to cope ready implemented. It is also more with intermittent production such as widely distributable, both in France photovoltaic power. and throughout the world. It is one lever This study focuses on electrochemical available to start supporting the grid storage in particular, because it is one with a view to an increase in the share of the storage processes which benefits of photovoltaics, but also to go beyond from technical and economic trends © TATMOUSS | CC BY-SA 3.0 | CC BY-SA TATMOUSS © the 5-8% of photovoltaic production that promising improvements similar to a mature grid can absorb (without re- those in photovoltaics and electron- quiring preliminary changes). One of ics in general. Moreover, it is a storage the major obstacles to the deployment technology which can be located an- of consumption management is often ywhere, unlike PSPS’s64, for example. the fact that certain stakeholders do Finally, after analyzing this technology, not want to change, because that would it could be less insignificant than was jeopardize their historical business thought just three or four years ago. model. The slow pace of change in the regulations to allow economic exploitation of this management (changes in consumption profiles, changes in hot water cylinder controls, etc.) is also a 64- PSPS = Pumped Storage Power Station. These problem. Admittedly, there will also be systems consist of two lakes at different altitudes connected to one another. To store electricity, water a capital cost for implementation of the is pumped from the lower lake to the higher lake. To management equipment, but it will be remove it from storage, water flows via a turbine from the higher lake to the lower lake. In France, there is 4 marginal, since the present cost of the GW in active PSPS capacity. This capacity is at present used mainly to absorb surplus nuclear production at products needed (which, moreover, are FIGURE 41 : BREAKDOWN OF STORAGE night or in periods of low consumption. Their operation FACILITIES WORLDWIDE ACCORDING far from prohibitive) will fall steeply is evolving, but this was clearly the primary reason TO INSTALLED CAPACITY IN MW (PSH = for their construction, due to the relative inflexibility PUMPED-STORAGE HYDROELECTRICITY, CAES given the potential size of the market. of nuclear power. = COMPRESSED AIR ENERGY STORAGE) (INTERNATIONAL ENERGY AGENCY, 2014)CITATION AGE141 \L 1036

44 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 42 : ELECTRICITY STORAGE APPLICATIONS (INTERNATIONAL ENERGY AGENCY, 2014)CITATION AGE141 \L 1036.

3.3.1 The various storage trol)65. Battery characteristics can meet technologies nearly all the constraints of intermittency of photovoltaic production, except Electricity is difficult to store, and is al- for interseasonal storage66. ways stored in an indirect form: One aspect seldom pointed out is the • Gravity storage using hydroelectric density of energy, i.e. the quantity of reservoir dams, PSPS’s; energy that can be stored per unit vol- • Mechanical storage using com- ume. Although, in a centralized elec- pressed air; tricity system, this is a secondary issue, • Electrochemical storage using bat- in a decentralized approach in which teries; local constraints generated by the in- • Chemical storage using power-to- termittency of photovoltaic production gas. facilities must be faced, it is no longer At present, gravity storage using water necessarily trivial. As emphasized by is by far the majority technique used Jean-Marie Tarascon, Professor at the worldwide. Collège de France, electrochemical storage, and in particular lithium bat- Moreover, storage can meet very differ- teries, has a very high energy density ent requirements depending on the as- compared with storage in dams (since pects to be addressed. In its Technology PSPS’s are always presented as the Roadmap on storage, the IEA lists the ultimate storage system). For exam- various characteristics of the types of ple, to store 10 kWh, the daily average storage. consumption of a home in a developed Batteries in the broadest sense – elec- country (excluding heating), you need: trochemical storage facilities – cov- • 500 g of lithium battery which fits in er the following main technologies: a 130 x 86 x 18 cm Tesla Powerwall; lead-acid battery, Li-ion battery, sodium-sulfur battery, sodium-ion battery, • Or you must raise 3700 cu.m of water flow battery, zinc battery. (i.e. about forty residential swimming pools) by one meter. These technologies can meet short- term storage requirements (a few days Electrochemical storage could there- at most) at the demand level (produc- fore, depending on developments re- tion transfer) and at the production garding its competitiveness in par- level (smoothing of the intermittent ticular, provide an answer to local production curve to prevent excessive intermittency constraints. variations in the power produced, ser- 65- (International Electrotechnical Commission, 2011) vice system role for frequency con- CITATION Int11 \l 1036 66- Flow batteries could play this role.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 45 3.3.2 Technical and economic trodes and electrolytes 67). Moreover, best capital and operating costs. the number of cycles that can be prospects for batteries Historical trend in battery costs performed depends on the depth of The important technical and economic Electrochemical storage has simi- charge/discharge68, as illustrated by factors for a battery are as follows. lar characteristics to photovoltaics in Figure 43. • The capital cost. Unlike electricity terms of the underlying physics and production facilities for which the Component parts of a battery cost drivers. There is the same learning relevant capital cost is the number A battery is formed of: curve in terms of cost per kWh stored of dollars or euros per unit power (W, • Elementary cells containing the ba- as for photovoltaics, as shown by Fig- kW, GW), for a battery the important sic storage elements: cathode, anode, ure 44 relating to the Li-ion battery thing is the number of dollars or eu- electrolyte and separator; market for electric vehicles. ros per unit quantity of electricity • A pack of cells determining the bat- Winfried Hoffmann (see Figure 45) has that can be stored (Wh, kWh, MWh). tery’s total storage capacity; a slightly different curve, with a similar trend for the cost of the cells alone. • For stationary use, the other impor- • The overall system with electronic This is the more important curve for tant factor is the battery’s durabil- components. ity, characterized by the number of our report, because the battery pack for Most of the cost (about 70%) is due to charge and discharge cycles. Over stationary use is not identical to that the cells/packs part in which lies the time, a battery which could store 10 for on-board use in an electric vehi- main issue with batteries: how to en- kWh will only be able to store 8 kWh cle where there are greater space and sure the best possible density for the (maximum lifetime for a mobile ap- weight constraints. plication) due to deterioration of the The advantage of electrochemical stor-

battery’s component parts (elec- 67- A battery consists of a cathode from which the age is that its learning curve does not current leaves, an anode where the current enters, and an electrolyte for ion exchange, allowing either the sto- depend solely on direct use for the elec- rage of electricity or its removal from storage. trical system. It also benefits from mo- 68- The depth of discharge is the percentage of the mentum in the electric vehicle market: total quantity of stored electricity which is discharged.

FIGURE 43 : NUMBER OF CHARGE/ DISCHARGE CYCLES THAT CAN BE PERFORMED WITH THE BEST BATTERIES ON THE MARKET ACCORDING TO THE DEPTH OF DISCHARGE, SAFT PUBLIC DATA. ILLUSTRATION: FONDATION NICOLAS HULOT.

FIGURE 44 : CHANGES IN THE COST OF THE LI-ION BATTERY PACK FOR ELECTRIC VEHICLES COMPARED WITH THAT FOR CRYSTALLINE SILICON PHOTOVOLTAIC MODULES. SOURCE: BNEF, 2014.

46 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG the cell production process is the same, micro and nano levels points to further FIGURE 45 : CHANGES IN THE COST OF LITHIUM-ION CELLS. SOURCE: ASE-HOFFMANN only the end packaging differs depend- very significant prospects for improve- ing on the use. ment. Conversely, gravity storage us- Like for photovoltaics, but undoubted- ing water, the PSPS, is based on a tried ly in a more pronounced manner, there and tested macroscopic technology for is a divergence entered the perceived which no radical change is foreseeable. cost of the batteries and the actual cost To reduce battery costs, several factors reached. The 2015 reports of the IRENA are looked at. or the IEA on storage technologies and • An improvement in industrial pro- batteries estimate the capital cost at cesses via greater automation using around US$600-800 per kWh, or even all the inherent potential of the elec- more. However, the current cost is rath- tronics and microelectronics indus- er US$300-350 per kWh for the lithium tries. technology in light of data provided no- • An improvement in energy densi- tably by Tesla and LG Chem. The com- ty making it possible to reduce the pany EOS even announces US$160-200 quantity of active elements. For ex- per kWh for batteries based on the zinc ample, a Toyota research team an- technology, production of which is ex- nounced in mid-2014 that it had pected to begin in 2016. succeeded in developing a lithium This divergence can be explained by battery storing seven times more the fact that the batteries’ electronic energy than a standard battery by fundamentals confer on them a speed changing the composition of the bat- of innovation faster than the time for tery’s cathode. If this breakthrough analysis by the conventional energy were confirmed and industrialized, world. So long as batteries were ex- it would entail significant prospects pensive, their market and their impact for a reduction in the capital cost of remained anecdotal. The continuous stored energy. Likewise, a research rapid improvement in the cost of this team from the Karlsruhe Institute of equipment has resulted in practically Technology has announced a new an on-off dynamic: in a very short pe- electrochemical storage concept riod of time, these technologies could making it possible to increase the cease being relatively invisible and energy density of a lithium battery could have a major impact on the elec- (tested technology) by a factor of 7 69. tricity system. This arrangement could also be extended to other battery concepts.

Outlook for changes in the capital • An improvement in lithium extrac- cost tion processes, notably by reducing Electrochemical storage and its applica- energy consumption. tions (for mobile systems in particular) are the subject of intensive research. Like for photovoltaics, the possibility 69- http://phys.org/news/2015-03-energy-density- of using the potential of physics at the lithium-storage-materials.html FIGURE 46 : PPROSPECTS FOR CHANGES IN THE COST OF LITHIUM- ION BATTERIES. SOURCE: UBS.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 47 FIGURE 47 : PROSPECTS FOR CHANGES IN THE COST OF LITHIUM-ION BATTERIES. ILLUSTRATION: FONDATION NICOLAS HULOT.

Figure 47 shows the prospects for However, industrial developments are manage conversion of the battery cur- changes in the capital cost of electro- not expected until 5-10 years’ time. rent. A second inverter will therefore chemical storage (cost of the complete Ease of installation and space require- be necessary. On the other hand, in the system excluding the inverter and in- ments will play an important role in the case of a new installation, it will be pos- stallation). development of batteries used for sta- sible to use hybrid inverters capable of The data currently available point to a tionary electricity storage (especially managing a “PV + battery + connection rapid fall in the cost of batteries over with a view to a decentralized use such to the grid” system for an extra cost at the next 10-15 years, which will make as residential use). They could, effec- present of approximately 10% compared them an important aspect of the elec- tively, impact the system’s overall cost with a standard inverter. For a system tricity system70. and the relative competitiveness of the such as the Tesla Powerwall, the extra cost would be approximately US$50, to Manufacturers and experts also men- various technologies. be compared with a cost of US$3500 for tion other promising technologies, such Battery LCOE a 10 kWh battery. as redox-flow technologies using liq- To analyze in greater detail the com- As regards installation, whether it be uid reagents, or technologies based on petitiveness of electrochemical storage performed on a centralized location sodium, which is abundant and easy for the electricity system, notably with 71 (connected to the electricity grid) or in to access . In light of current research regard to photovoltaic intermittency a residential context, its extra cost is and the demonstration phases complet- management, we must look at the stor- small. Like for the inverters of industri- ed, it may be imagined that in future age LCOE, i.e. the cost for each charge/ al plants, a centralized storage system technologies will merge, thereby accel- discharge cycle. erating the cost learning curve, shown arrives in complete modules. The only The aim here is to analyze use of the above. For example, 24M, a spinoff costs are civil engineering and connec- batteries within the framework of cou- company from MIT, has developed a tion. These costs are in no way similar pling with a photovoltaic system. The lithium battery based on the flow-bat- to those for installation of the photo- costs presented above (see Figure 47) tery technology concept in which the voltaic part which produces electricity concern only the storage system. How- electrodes are in suspension in a liquid and which is far more labor-intensive, ever, a battery must not only be in- and in a single block. 10,000 batteries whether for a ground-based system or stalled but it is also necessary to con- have already been produced, US$50m a residential installation. In the lat- vert its direct current into alternating has been raised and the 24M roadmap ter case, the labor for installation of a current, like for photovoltaic panels. plans to reach US$100 per kWh for an battery consists mainly of fastening equivalent or greater lifetime and use, At the time of the release of Tesla’s the battery to the floor or a wall and and with better recyclability. Powerwall, some said that the cost an- connecting it to the inverter. This work nounced by the producer (US$3500 for performed as part of a new installation Likewise, some are wagering on the 10 kWh of storage) was deceptively low will have only a marginal impact on development of batteries based solely because it took into account neither the the overall cost. To take the residen- on sodium, as a substitute for lithium. inverter nor the installation cost. tial example, fastening to the wall and connecting to the inverter a Powerwall 70- See below, regarding the storage LCOE Regarding the inverter, if a battery is 71- These technologies will be interesting mainly for inserted in an existing photovolta- type battery will require at most half a stationary storage due to the volume that they occupy. day’s work more than what is needed to Indeed, their market will be less vast than that for bat- ic system, the latter will have a single teries that can be used for electric vehicles, and hence inverter making it impossible to also install an electric radiator. Assuming a smaller scale effect.

48 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG FIGURE 48 : CHANGE IN RESIDUAL CHARGE DEPENDING ON THE NUMBER OF CHARGE/DISCHARGE OPERATIONS (IN RED: SAFT BATTERY WITH 60% DISCHARGE / IN BLUE: SAFT BATTERY WITH 100% DISCHARGE / IN GREEN: BATTERY FROM OTHER MANUFACTURERS). SOURCE: SAFT.

ANALYSIS: THE GRAPH SHOWS THAT CURRENT TECHNOLOGIES MAKE IT POSSIBLE TO ACHIEVE 4000 CHARGE/ DISCHARGE CYCLES FOR A BATTERY, I.E. ABOUT 10-12 YEARS OF DAILY USE. ON THE OTHER HAND, IT IS CLEAR THAT BY COMPARISON WITH THE 80% LIMIT TO RESIDUAL STORAGE CAPACITY, THERE REMAINS A LARGE REGION OF BATTERY USE (FROM 80% TO 60% OF RESIDUAL STORAGE CAPACITY).

FIGURE 49 : PROSPECTS FOR CHANGE IN THE NUMBER OF CHARGE/DISCHARGE CYCLES AT 100% DISCHARGE FOR VARIOUS BATTERY TECHNOLOGIES. SOURCE: IEA (INTERNATIONAL ENERGY AGENCY, ENERGY TECHNOLOGY PERSPECTIVES 2015)CITATION AGE15 \L 1036 .

an overall cost of US$50 an hour, that tery technologies achieve 6000 cycles makes US$200 extra cost. The extra at 100% depth of discharge according to cost of “installation + inverter” is there- the online documentation. A transition fore approximately 10% of the capital to 6000-7000 cycles within the next cost of the battery for a residential lo- 5-10 years is a development foreseen cation. It will undoubtedly be less for a by numerous specialists and manufac- centralized production facility. turers. Another important factor is the number The IEA, generally fairly conservative of charge/discharge cycles that the bat- in its forecasts concerning renewable tery can perform. At present, a battery energies and related technologies (and can perform about 4000 cycles at 100% in this case concerning battery costs), discharge, which corresponds to about is more optimistic than the stakehold- ten years’ operation. After that time, the ers in the sector regarding improve- maximum quantity of energy stored ments in the lifetime of lithium-ion corresponds to 80% of the initial quan- batteries. It estimates that the batteries tity. Increasing the number of cycles is could reach 10,000 cycles on the 2018 an important area of research. Accord- horizon. ing to some manufacturers, it is even To determine the competitiveness of a a major area ahead of reducing capital battery, the first thing examined is the costs. This is the case, in particular, for LCOE for daily use. Figure 50 shows the

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 49 By comparison with the PSPS, for the North American region, as illustrat- the experts74. Note that the lifetime im- which the LCOE is approximately ed by Figure 51. For a capital cost of less provement at a constant cost, i.e. main- US$100/MWh, we observe that the bat- than US$200 per kWh, battery storage taining a better residual capacity after teries very soon become competitive. provides a more competitive solution a larger number of cycles (e.g. 7000), In a 2015 report72, Citigroup analyzed than a back-up with fossil-fueled ther- only marginally improves the LCOE of the competitiveness of battery storage mal equipment. battery storage (5-10%) by comparison according to the capital cost of stor- Moreover, calculations show that if use with a configuration in which storage is age. With a capital cost of US$250/ is not limited to the number of cycles pushed up to 7000 cycles with a decline kWh, local storage with photovoltaics after which the residual storage capac- in residual capacity to 70%. is competitive in many countries (LCOE ity is 80% of the initial capacity (the Finally, in addition to the development US$102/MWh). With a capital cost of standard end-of-life threshold for a bat- goals of competitiveness and durability US$150/kWh, it rules out electric pow- tery used in an electric car), but if use of the batteries influencing their design, er stations using fossil fuel energies in is continued until 70%, giving slightly areas of research have focused on man- a back-up role (LCOE of US$65/MWh). more than 7000 cycles, the LCOE can agement of the battery. For example, These figures are consistent with the be reduced by 30% to 40%. Here we as- Younicos, a German software company, 73 market analysis performed by EOS on sume a linear degradation to 70% of the has developed expertise in the optimi- residual capacity, which is a reasona- 72- (Citigroup, 2015) CITATION Cit15 \l 1036 ble initial approximation according to 73- EOS is developing a battery system based not on 74- According to the experts, the deterioration is gene- lithium but on zinc. Production is set to begin in 2016. rally linear once the first cycles have been performed. If its costs (US$160/kWh) are confirmed, its technolo- On the other hand, when the battery's storage capa- gy will be a market leader. It could compete with the city deteriorates excessively and reaches the region of lithium technology and be a driver for competition and 50% of the initial storage capacity, accelerated degra- innovation. dation phenomena appear.

FIGURE 50 : CHANGES IN THE LCOE OF A BATTERY DEPENDING ON ITS COST AND USE AT UP TO 80% OF ITS INITIAL STORAGE CAPACITY. CALCULATIONS: FONDATION NICOLAS HULOT*.

ANALYSIS: A BATTERY WHICH COSTS US$350 PER STORED KWH HAS AN LCOE OF US$142/MWH. * We assume a 10% extra cost for the installation/inverter part by comparison with the capital cost of the battery alone, with a minimum of $150-200 for a 10 kWh battery. We assume a 5% WACC and a storable energy loss of 2% per year with a 93% inverter efficiency. The latter is count only once due to DC-DC storage between photovoltaic production and the battery. On the technical level, the battery is assumed to have a standard lifetime of 4000 cycles.

FIGURE 51 : ADVISABILITY OF DEPLOYING ELECTROCHEMICAL STORAGE ACCORDING TO ITS COST IN THE NORTH AMERICAN REGION (THE ACRONYMS REFER TO THE VARIOUS ZONES OF THE NORTH AMERICAN ELECTRICITY SYSTEM). SOURCE: EOS/IHS.

50 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG zation of battery management (based for 8000 cycles corresponds to 0.01 sisted synthesis methods making it on the sodium-sulfur technology) in kWh/kWh of storage. Even doubled, possible to reduce the energy con- order to improve their durability. The to allow for indirect energy costs, this sumption involved in manufacturing Younicos technology, closely watched extra energy cost for a photovoltaic the materials constituting a battery. by major battery manufacturers, would, installation coupled to a storage sys- according to Samsung75, be able to ex- tem would merely reduce the EROI tend the guarantee on its batteries up range of photovoltaics from 5-10 to Material constraints to 20 years (instead of 10 at present). 4.5-9. Like for the issue of the sustainability of massive deployment of photovoltaics, This company has raised hundreds of • 100-120 kg of CO2 is also a lot. But, there are question marks concerning millions of dollars, demonstrating the with 4000 cycles, the kWh stored in the availability of the materials used in confidence in its technology, which each cycle contains only an addi- batteries to allow their massive deploy- must nevertheless be validated on the tional 0.03 kg of CO2 at present, and ment. industrial level. this level will merely decline with the decline in the energy necessary to In its 2015 study, the MIT examined manufacture the batteries. this question in detail. Sodium-ion 3.3.3 The energy and technologies pose no problem of supply. Like for the photovoltaic part, not only non-energy impacts of Technologies such as the EOS technolo- are the current figures not disastrous, electrochemical storage gy based on zinc cathodes also pose no but they are also improving over time. problem. Regarding lithium, the picture The energy impact Moreover, faced with environmental is rather different, and this is the main Like for photovoltaics, electrochemical constraints, it can be noted that com- battery technology at present. It is the storage raises the question of its sus- panies working on battery development technology that offers the best energy tainability from the perspective of the are taking this into account in design- density (both for on-board electronic energy investment needed for the storing new batteries. Here are a few exam- applications and for mobility, the space age of this energy and for access to the ples: constraint is key). commodities necessary for manufac- • The firm 24M, already mentioned, ture of the batteries (hence the issue of • For most of the technologies, 35 years took into account in developing its recyclability). of current production with current battery the need to reduce the quan- battery performances would be nec- According to the experts, approximate- tities of energy involved in its manu- essary to store every day 10%-15% of ly 350-400 kWh of energy is needed to facture, and above all to improve re- global electricity demand in 2050 ac- “produce” 1 kWh of battery storage (of cycling, which, in general for mineral cording to the IEA’s Perspectives (see the Lithium-ion, lead or Ni-MH type), ores, can save the energy used for Figure 52). with emissions of approximately 100- their extraction by a factor of 2 to 1077. 120 kg of CO2. The main source of this • The technologies using more co- • Researchers are also looking into the energy consumption and greenhouse balt, such as the LiCoO2 technology, development of bio-inspired/bio-as- gas emissions is the extraction and are more problematic from a supply conversion of raw materials. viewpoint. 77- UNEP, Metal Recycling, April 2013 Before denouncing an ecological scan- dal, let us examine the figures rather more closely: FIGURE 52 : YEARS OF PRODUCTION OF MATERIALS FOR THE LITHIUM BATTERY TECHNOLOGIES • 350-400 kWh for 1 kWh of storage is TO MEET 1% TO 55% OF PEAK DAILY REQUIREMENTS WORLDWIDE. SOURCE: MIT. a lot. But this “1 kWh” of storage will be used several times, and more precisely 4000 times. So, manufacturing energy for each cycle falls to about 0.1 kWh76 for 1 kWh stored and half less with a doubling of the number of cycles. Moreover, the transition from production costs of US$400-500/ kWh, for an energy cost of kWh350- 400/kWh of storage, at US$100/kWh, corresponds to an equivalent fall in energy consumption per kWh of storage. At first sight, US$100/kWh

75-https://www.greentechmedia.com/articles/read/ younicos-wants-to-be-the-worlds-biggest-grid- battery-controller 76- Taking into account the deterioration of storage capacity over time.

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 51 This data reflects the present situation the recycling of lithium batteries, ac- considering the technologies currently cording to the UCSGS80. Bio-inspired/ deployed. It does not take into account bio-sourced processes are also devel- research on improving energy density, oping for concentrating rare or strategic or on technologies using more abun- metals found in water (aqueous mixture dant materials. The boom in storage is coming from recycling processes) or in evident from a resurgence of research soils, making it possible to concentrate in this area which points to significant nickel and cobalt, for example81. changes.

The mining sector is also endeavoring Some experts consider 2014 as a piv- to improve its technologies both from otal year in the development of elec- an environmental perspective and with trochemical storage. This is undoubt- a view to access to larger reserves. To edly due to the fact that batteries have take lithium, an Australian company, reached a first threshold of profitability Cobre Technology, recently announced and hence visibility on the energy mar- the development of a new technology ket, attracting attention in both scien- consuming less energy for extracting tific and financial circles. There is a lithium from micas. If this technology boom in initiatives: Tesla is going into is confirmed, it could considerably ex- stationary storage, and Benz is doing 78 pand lithium reserves . likewise82. Many stakeholders are an- Nevertheless, whatever the quantity of nouncing large investments in battery reserves, recycling remains the major production capacity. Tesla plans to process. According to some experts, the have more than 35 GWh of production recycling constraints are not techni- capacity in 2020, and the same holds cal but merely economic. Recycling of for BYD, backed by Warren Buffet. This battery component materials is already technology is currently entering the underway, and the increase in market electricity system rapidly and with a size will assist this process. In Europe, major impact, like photovoltaics, due the directive on waste electrical and to the speed of its deployment and its electronic equipment79 imposes certain pace of innovation similar to that of the levels of recycling. Other countries have electronics world, i.e. far faster than the adopted similar constraints to varying pace of innovation for conventional fa- degrees. The tried and tested technol- cilities, which is measured in decades. ogies for recycling of conventional acid batteries could easily be transposed to 80- (USGS, Lithium Use in Batteries - circular 1371, 2012) CITATION USG12 \l 1036 81-(D. Larcher and J-M. Tarascon, 2014) CITATION 78- http://reneweconomy.com.au/2015/australian- DLa14 \l 1036 company-says-new-process-could-bring-unlimited- 82- http://www.greencarreports.com/news/1098541_ lithium-supplies-29957 mercedes-follows-tesla-will-offer-home-energy- 79- 2012/19/EU Directive storage-batteries-too © RAMA | CC BY 2.0

52 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG 4. ARE MANUFACTURERS PREPARED FOR THE POTENTIAL (R)EVOLUTIONS TO COME?

4.1 Photovoltaics is the deployment of decentralized en- MWh) and the old cost (approximately not THE solution, but an ergy. Apart from the suitability (not €45/MWh). A comparison with these excluding other storage technologies) prices shows that local management of important solution to of batteries at the centralized level, part one’s consumption and production global energy issues calculation of the production costs for has already reached economic equilib- a residential installation capable of rium. “Never put all your eggs in the same storing about 50% of photovoltaic pro- This trend, called “load defection”83, is basket”, the saying goes. The same duction at the level of a region such as emphasized by a number of banks in applies for electricity. Technically, eco- southern France shows how quickly di- reports published during the second nomically and rationally, photovolta- rect supply becomes competitive with half of 201484. ics could never be considered as THE supply via the grid. technology. On the other hand, whereas Moreover, recent reports by the MIT, Admittedly, this supply cannot be 100% many projections put its place at around the Fraunhofer Institute and the Rocky based on photovoltaics with storage due 5% of global electricity consumption on Mountain Institute all note the strong to the annual variability of photovolta- the 2050 horizon, the above develop- coming penetration of photovoltaics ics. However, current prices for the sup- ments suggest rather a contribution of and batteries into the electricity mix, ply of electricity via the electricity grid 20-25%. and a high proportion of load defection are approximately €130/MWh, and can on a substantial fraction of electricity The main conclusions so far are as fol- only increase over time because (i) ren- consumption. lows. ovation investments will be needed on • Electricity production based on pho- the grids and (ii) the cost of the nuclear 83- This expression means that part of consumption tovoltaics is already competitive in fleet can only increase, at least given and capacity is disconnected permanently from the many countries, and this can only power grid. There is therefore a decline in the energy the difference between the cost of new and capacity connected to the grid. increase due to the prospects for de- nuclear development (at least €100/ 84- Quotes taken notably from (Rocky Mountain Insti- velopment, both economic and tech- tute, 2015) CITATION Roc15 \l 1036. nical. • The investment amounts needed to achieve a production representing FIGURE 53 : LCOE OF A 9 KW INSTALLATION WITH OR WITHOUT STORAGE FOR AN 20-25% of electricity consumption INSOLATION OF 1350 KWH/KWP AND THE COST ASSUMPTIONS FOR THE SCENARIOS OUTLINED are affordable. PREVIOUSLY IN THE REPORT (FIGURE 22). CALCULATIONS: FONDATION NICOLAS HULOT. • Mature grids can without any problem accept up to 8% of photovoltaic power. • Then, consumption management can increase to 75% the rate of penetration of photovoltaics in half of the manageable residential consumption uses. It also makes it possible to manage a significant part of industrial consumption and hence increase the rate of penetration of photovoltaics in consumption. • Finally, battery developments point to management of at least 10-15% of the world’s daily consumption on the 2050 horizon, according to the IEA Perspectives. These development perspectives for photovoltaics also open the way to

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 53 In this context, there are question ics in particular, will all come to realize marks concerning the future activity of the changes in progress and reposition stakeholders. Many firms which were their financial capacity insofar as pos- not related to the electricity universe sible. are penetrating this market, notably The prospects for the development of via the door of storage or photovoltaics. photovoltaics could nevertheless be These are stakeholders in the world of curbed in certain respects by bad reg- electronics (Microsoft, Google etc.), or ulations. This is the case, in particular, electric mobility (Mercedes Benz, Goog- for self-consumption and the issue of le). They are accustomed to a pace of invoicing connection fees for such in- innovation different from that conven- stallations. If it is not economic rigor tionally seen in the electricity sector. that prevails but a will to limit such a They also have a different approach to trend with all sorts of taxes (such as the the customer relationship, organization tax on the sun planned by the Span- schemes and business models. Their ish government for self-consumption advent with disruptive technologies installations), there would be risks of could have a major impact for the tradi- seeing good solutions stifled on unjus- tional stakeholders, especially if these tifiable grounds. Such a threat is not stakeholders do not take these develop- imaginary. In the energy transition law ments into account in their industrial enacted in France (host of the COP21 strategy sufficiently in advance. in December this year), it is said that In a note dated 20 August 201485 , UBS “measures necessary for a controlled analyzed the risks posed by the de- and secure development of installa- velopment of photovoltaics, batteries tions designed to consume all or part and electric vehicles for a number of of their electricity production, including big utilities. In the note, UBS indicat- in particular the definition of self-pro- ed the utilities negatively impacted by duction and self-consumption condi- such development. EDF, Verbund, En- tions, and the conditions for subjecting gie and Fortum were among them, due these installations to a tariff for use of to non-flexible assets locking up huge the public electricity distribution grids amounts of capital (nuclear power sta- and the use of experiments” will have tions in the case of EDF) and facing to be taken. If by ‘controlled’ is meant increasing production costs. It must not adversely affecting conventional in- therefore be hoped that the convention- stallations and stakeholders, this would al utilities, which historically have a then be in pure contradiction with what growth strategy not focused on renewa- economic analysis dictates and what ble energies in general and photovolta- the issues related to COP21 require of us.

85- (UBS, 2014) CITATION UBS14 \l 1036

FIGURE 54 : IMPACT OF PV + STORAGE + ELECTRIC VEHICLE DEVELOPMENT FOR VARIOUS INTERNATIONAL UTILITIES. SOURCE AND CALCULATIONS: UBS. Net earnings opportunity by compagny, 2025E (€m)

4.2 The sun, gold these developments on investment in insolation and, since its electricity his- for the salvation of electricity transport infrastructure (in tory has hardly been written, it can es- mature grids or in grids under con- tablish directly the electricity system developing countries? struction) would deserve to be studied. of tomorrow based on centralized and The view presented here is realistic in decentralized renewable energies. 4.2.1 The electricity grid of light of the technical and economic per- Given the current situation, the main tomorrow spectives described previously. Moreo- challenges facing Africa are fairly sim- As said previously, the electricity grid ver, it is the business model of a num- ple in the short term. of tomorrow (in France and in mature ber of companies. • Lighting. countries) will not consist solely of pho- • Communication (in particular, mo- tovoltaics or small power plants close to bile phones, which are a structural the consumption locations. Maintain- 4.2.2 Photovoltaics: an feature of the African economy, and ing a national and even supranational immediate solution to access to knowledge via internet). grid has certain advantages for the se- significantly improve the life of curity of electricity supply, but also for billions of human beings • Healthcare, with hospital installations that can operate in satisfactory the integration of intermittent renewa- The prospects for development of pho- conditions of hygiene, having refrig- ble energies. tovoltaics and batteries represent a eration areas and sewage treatment On the other hand, a large portion of fantastic hope for developing countries installations requiring pumping and consumption will be managed locally, and, in particular, the 20% of the world’s filtration systems running on elec- directly at the consumption locations. If population who still do not have access tricity. it is designed intelligently, the grid will to electricity. • Crop irrigation. permit this local management of part of Regarding this, it should be remem- local consumption and capacity. This bered that what is important is not Such services would be provided far will reduce consumption and capaci- electricity in itself, but the services that more rapidly and efficiently by inno- ty with regard to the grid, as a conse- it can provide: Moreover, it should be vative solutions based on small photo- quence reducing the requirements and clearly understood that yesterday’s grid voltaic installations coupled to storage hence costs in terms of grid infrastruc- with centralized means of production with easily transportable backup ther- ture. On the other hand, consumption is different from tomorrow’s grid with mal systems. Whereas several decades locations will use the grid as a supple- a large quantity of renewable energies, are needed to build an electricity grid, mentary source of supply and as an in- that could be centralized, but also de- a few weeks are sufficient to set up a surance thanks to smart management centralized as close as possible to con- small system based on photovoltaic of their consumption manageable by sumption. This difference explains the power and energy storage. a decentralized storage facility. In this difficulties faced at present by some This local approach, according to a study, the FNH has not examined in developed countries in implementing leopard-spot pattern, would then grad- detail this question of scenarios for the their energy transition. This is the case ually lead to interconnection, but not electricity grid of developed and devel- for Germany, which has had to and necessarily as extensively as in the oping countries, in a context of develop- still must not only reorganize its grid case of a centralized system. Above all, ment of centralized and decentralized topology, but also the way in which it it could be deployed for a lower cost, in- intermittent production facilities, cen- is managed. volving the local populations and grad- tralized and decentralized storage fa- Although Africa cruelly lacks elec- ually developing an industrial fabric cilities and consumption management/ tricity, it nevertheless has exceptional notably for management and mainte- adaptation to the variability of produc- assets. It enjoys substantial, regular nance of the installations. tion. The probably positive impact of

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 55 A few examples: Access Ventures Fund which aims to • The establishment of a photovoltaic invest in African SMEs in order to pro- solar power system to pump water vide Africans with electricity. An in- during the day (coupled with a water crease in this type of financial support storage system to manage the sun’s would be extremely useful and effective intermittency) would immediately for Africa. Likewise, the initiatives of provide a significant gain in terms EDF-Help and blueEnergy, in Ethiopia of development for the most isolated and Nicaragua, form part of a local ap- populations without needing to pull proach making it possible to implement power lines over thousands of kilo- local electrification solutions directly meters. and simply. If these initiatives are not • Providing a photovoltaic system and supported and promoted as solutions, a battery to give lighting for several they will remain marginal by compari- hours at night, allow mobile phone son with a more conventional and more recharging during the day, and to use centralized, hence less modular indus- internet, would also be simple and trial deployment. significant in terms of improving living standards. Shari Berenbach, chairman and CEO of Moreover, this more modular electrifi- the United States African Development cation would allow populations to make Foundation86, said the same thing at use of electricity and improve their the end of 2014 in an interview with standard of living without necessarily the Global Energy Initiative, saying that radically changing their life style. They for many rural populations, the estab- would be able to adapt the use of re- lishment of off-grid solutions was es- newable energies to their perspective, sential. She said she hoped that Africa which is not foreseeable in the case of would not repeat the errors of the Unit- centralized deployment plans which ed States, focused solely on the central- are inevitably approximate in their al- ized grid87. lowance for specific local features. Certain initiatives, supported by large groups, should be highlighted and promoted. Schneider Electric is involved 86- http://www.usadf.gov in a support program via the Energy 87- http://globalenergyinitiative.org/insights/200- interview-power-africa.html

EXAMPLE OF AFRICAN START-UPS/SMES OFFERING INNOVATIVE SOLUTIONS BASED ON DECENTRALIZED PHOTOVOLTAICS

Station Energy: A start-up which aims to bring electrici- lent of about 43 euro cents per day. This budget allows the ty to the most disadvantaged regions of Africa using the most precarious inhabitants to obtain access to lighting qualities of photovoltaics while drawing inspiration from safely, abandoning the dangerous - and especially highly the local culture. The company has developed a multiserv- pollutant - oil lamps still used by millions of homes in ice kiosk concept inspired by African grocery stores and Kenya and in Africa. Once equipped, each home can pay powered by solar energy. By bringing electricity to the for its green electricity supply by the day, via M-Pesa, the most remote and least equipped non-electrified regions mobile payment system which dominates the banking (in both rural and urban areas) of the continent, Station economy in Kenya. The level of 150,000 homes equipped Energy generates activity: lighting, hire of batteries and has already been exceeded. refrigerated areas, access to Internet, trade, etc.

M-KoPa: This Kenyan start-up proposes to the 30 million These two firms both share the same vision: using the Kenyans deprived of electricity and not connected to the malleability of photovoltaics to rapidly bring about an im- national power grid the purchase of solar energy by the provement in the living standards of African populations hour via a prepaid electricity system. Each M-Kopa kit al- without going via substantial electricity infrastructure, lows customer homes to light 3 light bulbs, for the equiva- and fitting in with the local culture.

56 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG 5. CONCLUSION

part from tangible facts such not be optimal for society. Regarding as rapid improvements in pho- this, the legislation which will sup- Atovoltaics, consumption man- plement the Energy Transition Act in agement and electrochemical storage, France will have a responsibility, in reports from the university world, the particular, for encouraging such a de- financial world and the industrial world ployment within the framework of an together reveal an underlying trend to adaptation of the national and Europe- improvement in the competitiveness an electricity systems. of technologies related to photovolta- The changes that this study glimpses ics and electrochemical storage. The for the near future therefore require a simultaneous technical and economic strengthening of public policies con- development of these technologies is cerning decentralized production, altering the prospects for the electricity electricity storage, consumption man- systems of tomorrow. agement, and tariff links with the grid. A first effect can already be seen on These disruptive changes will also, for- two fronts, with the rapid deployment of tunately, result in easier access to elec- small individual devices on one hand, tricity services for all those populations and elsewhere in the construction of (billions of people) which are more or high-capacity power plants ordered by less deprived of them at present. wealthy sunny countries. This trend The COP21 which is to be held in Paris also points to radical changes which in December 2015 is an opportunity to will concern the developed countries’ raise awareness of these breakthroughs electricity systems. The big operators and to guide capital investment taking and managers of these systems, like into account the outlook for develop- the public authorities, must become ment of electricity production and stor- aware of their potential for develop- age technologies that are both compet- ment, and facilitate it rather than ig- itive, beneficial for the population and nore it or, even worse, combat it. Like the climate, and compatible with our it or not, some households, economic planet’s material resources. It is also an stakeholders and local authorities are opportunity to enable initiatives sup- thus acquiring a capacity for and an in- porting electrification of the developing terest in becoming their own electricity countries to take paths that are both producers. Those who do not make the short and effective. This is by no means transition soon enough will be badly a panacea which would eliminate the positioned in the energy organization need to reduce energy consumption of tomorrow. in the rich countries and change our A scenario in which this deployment way of envisaging energy, but it is one were to be implemented by ignoring or way for us to face up to the energy and merely bypassing the current central- climate challenges of our planet. Let’s ized electricity system would definitely seize this opportunity!

PHOTOVOLTAIC SOLAR POWER: 25% OF THE WORLD’S ELECTRICITY LOW-CARBON IN 2050! 57 6. BIBLIOGRAPHY

Ademe DGCIS ATEE. Fondation Nicolas Hulot. (2013). Etude sur le potentiel du stockage d’énergies. (2011). L’énergie solaire photovoltaïque.

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Agence Internationale de l’énergie. Institut Fraunhofer Agora Energiewende. (2014). Technology roadmap Energy Storage. (2015). Current and Futur Cost of Photovoltaics. (2015). Energy Technology Perspectives 2015. International Electrotechnical Commission. (2014). World Energy Outlook. (2011). Electrical Energy Storage White paper. Anne Labouret et Michel Villoz. International Technology Roadmap for Photovoltaic. (2012). Installations photovoltaïques. Dunod. (2015). ITRPV, rapport 2014, 6ème edition. Bank, D. Jean-Claude Debeir Jean-Paul Déléage Daniel Hémery. (2015). FITT for investors Industry Solar. (2013). Une histoire de l’énergie. Flammarion. Bloomber New Energy Finance. MIT. (2015). New Energy Outlook 2015. (2015). The Futur of Solar Energy. CEA Ines. Morgan Stanley. (2015). Solar Mobility : long term practical experience charging electrified cars with PV. (2014). Batteries + Distributed Generation May Be a Negative for Utilities. CIRED A. Minaud C. Gaudin L. Karsenti. Morgan Stanley. (2013). Analysis of the options to reduce the integratino costs of renewable geenration in the distribution networks. (2014). Solar Power & Energy Storage.

Citigroup. NREL. (2015). Investment Themes in 2015 Dealing with (2013). The impact of Wind and Solar Divergence Storage Batteries : a Third Growth Market. on the Value of Energy Storage.

Colin P. Kelley, S. M. Pedro A. Prieto & Charles A.S. Hall. (2015). Climate change in the Fertile Crescent and (2013). Spain’s Photovoltaic Revolution The implications of the recent Syrian drought. Energy Return on Investment. Springer.

D. Larcher and J-M. Tarascon. Project, T. S. (2014). Towards greener and more sustainable batteries (2015). Rendre flexibles les consommations for electrical energy storage. Nature chemistry. électriques dans le résidentiel.

Deutsche Bank. Rocky Mountain Institute. (2014). 2014 Outlook : Let the Second Rush Begin. (2015). The economics of load defection.

EDF Division R&D. RTE. (2015). Technical and economic analysis of the (2014). Panorama des énergies renouvelables. european electricity system with 60% RES. UBS. EPIA. (2014). Will solar, batteries and electric cars (2014). Global Market Outlook for Photovoltaics 2014-2018. re-shape the electricity system ?

ERDF. USGS. (2013). Fiche thématique SERRER n°2 bis. (2012). Lithium Use in Batteries circulaire 1371. (2015). Mineral Commodities summaries 2015. Finance, B. N. (2015). Bloomberg New Energy Finance Summit 2015. (2015). Global trend in clean energy investment.

58 NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND • WWW.FNH.ORG THE NICOLAS HULOT FOUNDATION FOR NATURE AND MANKIND

A solution demonstrator Fondation Nicolas Hulot pour la Nature et l’Homme, founded in 1990, approved as being of public interest, apolitical and non-confessional, works for an ethical and supportive world which respects Nature and the well-being of Mankind. It has Founding Partner: set itself the goal of accelerating changes in individual and collective behavior by developing and highlighting solutions in favor of the ecological transition of our societies. For the Foundation, ecology should no longer be one issue among others, but should be the focus of public and private action.

This study was produced thanks In order to perform its role, the Foundation combines thinking to the support of: with action and awareness raising. It works out new ideas and brings proposals to political and economic decision makers, with its Scientific Advisory Board and its network of high-level multi-disciplinary experts. It identifies and assists the stakeholders in change by supporting and highlighting, in France and internationally, promising initiatives for the future so as to deploy them on a larger scale. This field reality inspires and nurtures intellectual production. And so that everyone may be a driver of the ecological transition, it prepares socially responsible motivation tools and campaigns. The Foundation is also a representative environmental NGO. As such, it sits in several advisory organizations such as the Conseil économique, social et environnemental (Economic, Social and Environmental Council) and the Comité national de la transition écologique (National Committee for Ecological Transition).

www.fnh.org PHOTOVOLTAIC SOLAR POWER: 25% of the world’s electricity low-carbon in 2050!

In this report, Fondation Nicolas Hulot investigate photovoltaic solar power, which is one anwser for the production of low-carbone energy. The purpose of this study is to see to what extent photovoltaic solar power could represent a substantial proportion of global electricity consumption by 2050, taking into account, in particular, the economic aspect, the availability of resources, and intermittency management issues.

www.fnh.org 6 rue de l’Est 92100 Boulogne-Billancourt Tél. : 01 41 22 10 70