EDC to commit US$72 million in financing for Dubai solar park

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EDC to commit US$72 million in financing for Dubai solar park

EDC's financing is predicated on the sale of PV panels from Canadian Solar, a Guelph-based clean technology company. Image: Masdar

EDC’s financing is predicated on the sale of PV panels from Canadian Solar, a Guelph-based clean technology company. Image: Masdar

Export Development Canada (EDC) announced Thursday that it has committed US$72 million in financing within the larger US$655 million senior project finance banking facilities for the third phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai.

This phase consists of the development, construction and operation of an 800MW PV project located within the park. EDC’s financing is predicated on the sale of PV panels from Canadian Solar, a Guelph-based clean technology company.

Dr. Shawn Qu, chairman and CEO of Canadian Solar: “We are proud to be partnering with Masdar/DEWA/EDF on this outstanding project. On the financing side, we are very pleased to have EDC’s commitment and continuous support for our global growth.  As Dubai diversifies its energy portfolio, our partnership will serve as an excellent example for future utility-scale solar projects in the region, and we are eager to contribute further to the energy market growth in the Middle East.”

The 800MW project will generate around 2.5 million MWh of electricity per annum upon completion. Once completed, the Mohammed bin Rashid Al Maktoum Solar Park in Dubai will be the largest single-site solar park in the world. By 2030, it is expected to displace an estimated 6.5 million tonnes of carbon dioxide each year.

Carl Burlock, senior vice president, financing and international growth capital at EDC, said: “Supporting clean technologies is a strategic priority for EDC. Canadian Solar’s contribution to an international project of this size is a testament to Canada’s leading expertise in the clean energy space.”

Tags:
edc, mohammed bin rashid al maktoum solar park, dubai, canadian solar

PV module warranties: Separating fact from fiction

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Source: PV CYCLE.

Source: PV CYCLE.

Negotiating photovoltaic (PV) module warranties can seem like a complicated task with blurred lines separating fact and fiction. Making the wrong choices could see a project saddled with hidden clauses, often unnecessary coverage, and false promises.

The warranty usually reflects a manufacturer’s confidence in its product, and it needn’t be a leap of faith if asset owners, lenders, developers, and EPC (engineering, procurement and construction) firms focus on three critical factors.

Unicorns Don’t Exist

PV module manufacturers tethering on the edge of financial bankruptcy are by no means a rarity. What impact does this have on warranties? Every manufacturer must maintain a cash warranty reserve to cover warranty claims, but this can be a challenge when the bulk of its financial resources are devoted to servicing debts.

As a result, manufacturers often resort to buying Original Equipment Manufacturer (OEM) insurance to cover warranty obligations. Often touted as a benefit, the reality is that insurance-backed warranties could add to the cost of the modules, while the inclusion of a third layer – and fine print designed to limit payouts – can slow down the claims process.

Critically, these insurance-backed warranties do not always offer Third Party Rights, which allow affected asset owners to receive payments in case of the OEM’s bankruptcy. And, as recent developments have shown, the risk of bankruptcy in the PV business is real.

Watch for the Sirens

Some PV warranties include clauses that may be unnecessary, even redundant, making them look like something that they are not.

Let’s start with workmanship warranties: this governs any defect that is the result of failings in the manufacturing process. These warranties span anywhere between 5 and 25 years, with coverage including repair, replacement or refund at either a depreciated value or at the market price.

It is also important to point out that some defects can negatively impact performance from the moment that the modules are installed; while others may take a year or two to manifest. The reality is that ten years is more than adequate for workmanship defects to come to light and one may argue that longer coverage is redundant to the performance warranty.

Looking at more mature industries – gas turbine manufacturers typically offer no more than a two-year workmanship warranty – a longer warranty usually compensates for the lack of a robust, long-term performance track record.

Beware the Trojan Horse

Manufacturers also provide warranties covering the performance of a module. In case a PV module under-delivers on its power output promise, manufacturers should offer a combination of physical and financial remedies, although hidden clauses may minimise the amount of compensation paid out.

Many module manufacturers will include an option to repair or replace a low-performing module. Significantly, many manufacturers reserve the right to supply used or refurbished modules as replacements. The best policies, however, will offer new modules, free-of-charge, to supplement any shortfall in capacity if a repair is not possible.

Things get a little complex when asset owners seek monetary compensation because the OEMs that offer financial reparation – and many do not – have different ways of calculating their liability.

The commonly accepted approach is for manufacturers to pay the asset owner the value of the shortfall between the actual power output of the affected module and a predetermined power output threshold. This threshold is based on the market price of the module at the time of the claim or the original sales price of the panels – as module prices have steadily fallen, it’s easy to see which option would be of greater value.

Central to this calculation is the Power Warranty Start Value and the Warranted Degradation, which represent the manufacturer’s commitment to the amount of power a module will produce. A robust warranty will account for a Power Start Value of 98% in the first year – in other words, the manufacturer guarantees that the module will deliver at least 98% of its nameplate power output in the first 12 months of its operation. Modules delivering less than 98% are subject to remediation in line with the warranty terms.

Beyond the first year, the module’s performance warranty is benchmarked to the Warranted Power Output level. A module with a no more than 0.5% annual drop in power – which is what the industry’s leading OEMs offer – guarantees that the power output of a module will not reduce by more than 0.5 percent per year, from the second year of its operation. Once again, a degradation that exceeds this limit per year from the third year of operation will attract a penalty, requiring the manufacturer to compensate the asset owner for the shortfall between the actual power output of the affected module and the power output threshold. The payout will be based on the market price of the module at the time of the claim or the original sales price of the panels.

The bottom line is that a warranty is only as good as the remedies it offers. Decision-makers can ensure that they secure the best terms available simply by doing their homework and ensuring that, at the very least, someone picks up the phone when they call the helpline to make a claim.

Timo Moeller is First Solar’s Global Director for Customer Support, Product Field Performance and Commitments.

Tags:
warranties, warranty, pv modules, module failure, technical failures

to-the-point: China’s BYD to set up PV research centre in Brazil

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June 23 (Renewables Now) – Chinese batteries and electric vehicles maker BYD Company Ltd (HKG:1211) said on Thursday it will establish its first overseas photovoltaic (PV) research centre in Brazil.

The company has signed a letter of cooperation with the University of Campinas (Unicamp) in Brazil’s state of Sao Paulo. Under the agreement, BYD commits to transfer over BRL 5 million (USD 1.5m/EUR 1.3m) by 2020 to set up a PV research centre at the university.

The news comes after BYD opened a solar panel factory with a capacity of 200 MW in Campinas in April. It says the factory makes it the first company in Brazil that offers comprehensive zero-emission energy ecosystem projects, including generation, storage and transportation, to the local market.

(BRL 1 = USD 0.299/EUR 0.268)  

Kenya’s newly signed 160 MW of solar PPAs: expensive?

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Kenya signed this month PPAs for 160 MW of new solar PV plants at a price of US$0.12 per kWh. The price has sparked controversy.

Kenya Power, a utility firm that owns and operates the majority of the electricity transmission and distribution lines in the country, and sells electricity to about 4.8 million customers, signed on June 5 power purchase agreements (PPAs) for four new solar PV plants of 40 MW capacity each.

pv magazine reported that the PPAs follow the feed-in tariff (FIT) law, providing the four PV projects a tariff of $0.12 per kWh.

This is indeed the source of the controversy. The feed-in tariff law was initially introduced in 2008 and was updated last in 2012. So, the PPAs signed this month are based on a five-year-old tariff price. The government was supposed to update the FITs in 2015, but it didn’t do so.

The four developers that have been awarded the PV projects are Eldosol, Radiant, Alten and Malindi Solar.

Controversial FITs
Not everyone is happy with the new PPAs. The Consumers Federation of Kenya (Cofek), which defines itself as “Kenya’s independent, self-funded, multi-sectorial, non-political and apex non-profit Federation committed to consumer protection,” has accused the government of corruption.

The four PV projects, Cofek argues, come at a very high feed-in tariff and “the cost of energy is set to go even higher after the Energy Regulatory Commission (ERC) approved unsolicited independent solar power producers to politically correct individuals in government.” In other words, Cofek suggests that the PV projects were given to close allies of the government. Cofek’s full view can be found via this link.

It is true that other parts of the developing world, including African states, have seen PV tenders that led to project FITs significantly lower than Kenya’s US$0.12/kWh.

Zambia for example, tendered two projects totalling 73 MW of solar PV capacity in 2016 for as little as US$0.0602 per KWh and US$0.0784 per KWh respectively.

Morocco too signed a 20-year PPA with Acwa Power last year for the development of 170 MW of solar PV plants at a rate of €0.0422 per kWh.

The Kenyan case reminds us of the recent Africa Energy Forum’s debate on whether competitive tenders or directly negotiated deals are the preferred tool for developing Africa’s solar potential.

Kenya is also considering introducing tenders for new solar power projects. Given the country’s electricity retailers sell electricity to consumers at tariffs that reflect the real cost of electricity generation and transportation, such tenders could attract very competitive FITs.

Europe’s solar manufacturing vacuum needs urgent action, says R&D and trade groups

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More in News, Manufacturing, Fab & Facilities, Materials, Cell Processing, Modules, Thin-Film, Markets & Finance, Policy, Companies, Europe, Asia & Oceania

Europe’s solar manufacturing vacuum needs urgent action, says R&D and trade groups

The recent bankruptcy of Europe’s largest integrated manufacturer, SolarWorld AG and the failure of anti-dumping duties on Chinese producers to maintain a minimum import price (MIP), due to circumvention by establishing production outside China and even in Europe, was a major concern to energy independence in the region, according to industry groups. Image: SolarWorld

The recent bankruptcy of Europe’s largest integrated manufacturer, SolarWorld AG and the failure of anti-dumping duties on Chinese producers to maintain a minimum import price (MIP), due to circumvention by establishing production outside China and even in Europe, was a major concern to energy independence in the region, according to industry groups. Image: SolarWorld

The significant decline in the solar PV manufacturing supply chain in Europe in recent years has reached a critical condition, according to a string of R&D and trade groups in the region. 

The European Technology and Innovation Platform for Photovoltaics (ETIP PV), EUREC – The Association of European Renewable Energy Research Centers and Solar United – The Global Solar PV Technology & Industry Association, as well as equipment manufacturers, materials providers and PV manufacturing companies have published an ‘Open Letter from the European PV Community’ to European policymakers to take urgent action to support the industry.

Although not a new claim, the recent bankruptcy of Europe’s largest integrated manufacturer, SolarWorld AG and the failure of anti-dumping duties on Chinese producers to maintain a minimum import price (MIP), due to circumvention by establishing production outside China and even in Europe, was a major concern to energy independence in the region, according to industry groups.

Marko Topič, ETIP PV Chairman stated: “Photovoltaics is transforming Europe’s and the World’s energy system. It is strategically important for Europe to maintain strong involvement in this technology and contribute to the energy union and sustainable energy independence in Europe.” 

The letter went on to highlight that the solar sector was of ‘strategic importance for the EU economy, providing energy independence, industrial jobs and economic growth.’

The letter to European policy makers also claimed that for more than two decades, Europe had lead in technology innovation and state-of-the-art manufacturing (industry 4.0) the sustainability of production and quality as well as conversion efficiency of solar products. 

The solution being put forward is to support R&D activities at manufacturers and R&D institutions while supporting large-scale manufacturing operations to compete with China. 

This could only be achieved with cheap finance, accelerated R&D and smart regulations to provide a sustainable PV manufacturing hub in Europe that would be of the scale required to effectively complete. 

Such calls have been increasing in recent years but European policy makers have yet to provide any tangible plans or meaningful support outside existing R&D funding structures and anti-dumping duties. 

Tags:
solarworld ag, c-si manufacturing, solar cell, pv modules, monocrystalline wafer, polysilicon, european technology and innovation platform for photovoltaics, the association of european renewable energy research centers

Monocrystalline solar modules on the rise – declining prices

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The market share of monocrystalline wafers will increase from 27 percent last year to 47 percent in 2020. Accordingly, the supply of monocrystalline solar panels will also increase. This is one of the results of the Polysilicon Market Outlook 2020 by Bernreuter Research. A clear indication of this is the fact that manufacturers of monocrystalline wafers such as Longi Green Energy Technology are currently significantly expanding their production capacities.

Less material for the wafers

The advance of monocrystalline technology is mainly due to the fact that it is cheaper compared to polycrystalline competition. According to analysts at Bernreuter Research, silicon consumption for a wafer will be reduced by 25 percent by 2020. If manufacturers still need an average of 4.8 grams of material per watt of wafer power, this value drops to 3.6 to a maximum of four grams per watt. However, since the monocrystalline silicon is more expensive as a raw material, the material saving becomes more noticeable in price than in the case of polycrystalline silicon.

More efficient production reduces costs

The analysts see a reason for the decline in silicon consumption mainly in the manufacturing process. “In addition to the growing market share of monocrystalline cells with their higher efficiencies, the rapid spread of diamond wire saws will considerably slow down the specific silicon consumption per watt,” predicts Johannes Bernreuter, head of Bernreuter Research and author of the study. These saws enable manufacturers to achieve higher throughput and use of a wire that is up to 40 percent thinner than conventional saws. This reduces the proportion of saw waste.

Dimond wire sawing is also getting more and more standard in the production of wafers for polycrystalline solar modules due to optimized production processes. “We expect more than 90 percent of the multicrystalline wafers to be sawn with diamond wire in 2020”, Bernreuter says. This could also enhance further declining prices of multicrystalline solar panels. (HCN)

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Storage and PV to help Vestas be ‘sustainable energy leader’: CEO

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Storage and PV to help Vestas be ‘sustainable energy leader’: CEO

Danish
turbine
manufacturer
Vestas
plans
to
increasingly
venture
into
hybrid
solutions
that
link
electricity
storage
and/or
solar
to
wind
power,
in
order
to
become
the
“global
leader
in
sustainable
energy”,
chief
executive
Anders
Runevad
said.

While
wind
will
continue
to
be
the
OEM’s
core
activity,
Vestas
wants
to
make
sure
it
interacts
with
different
sources
of
generation
and
storage
in
order
to
integrate
more
wind
power
into
the
system
and
improve
grid
stability,
the
CEO
said
during
the
launch
of