More solar, less wind

Solar Wind

BNEF sees global PV installations outpacing wind in 2013, Thailand and Turkey top emerging region list, big Chilean project will compete on spot market

You can soon add one more chapter to solar power’s remarkable growth story. This year, for the first time, the amount of new solar installations will outpace those of their breezy cousin, according to Bloomberg New Energy Finance. As Renewable Energy World, Sun and Wind Energy, and Bloomberg itself have reported, 36.7GW of new solar generating capacity will be deployed in 2013, compared to 35.5GW of on- and offshore wind capacity, BNEF posits. The reversal of fortune results from a combination of market dynamics and some regions’ policy support for solar and policy uncertainty for wind.

“The dramatic cost reductions in photovoltaics, combined with new incentive regimes in Japan and China, are making possible further, strong growth in volumes,” Jenny Chase, BNEF’s head of solar analysis, told Bloomberg News. The story adds “lower panel costs and government support are accelerating deployment of solar energy even as growth slows in the mature European markets. Wind installations, more than double solar before 2011, are also being slowed by Europe, as well as a lack of clarity on policy in the U.S. and China.”

Although China, Japan, and, to a slightly lesser extent, the U.S. top the PV installation hit parade for now, a new analysis from IHS foresees several new gigawatt-plus-potential markets growing at triple the global average over the next five years. The research group pegs Turkey, Thailand, and South Korea as the top three emerging countries, expecting the trio to reach 2.9GW, 2.8GW, and 2.6GW , respectively, of cumulative installations by 2017. Other top 10ers with at least a 2GW forecast include South Africa, Ukraine, the Netherlands, Chile, and Brazil.

The study notes that “of the 30 largest PV developers building up pipelines in emerging PV markets, 21 are concentrating their development efforts on Latin America, even though most of the projects lack off-take agreements. ‘Competition for off-take agreements in markets like Chile is tightening,’” IHS analyst Josefin Berg said in the accompanying press release. “’Some developers are looking at selling PV-generated electricity on the merchant market.’” The release stated that “competition for grid access will also be a bottleneck for PV developers. Out of Chile’s 6GW pipeline, IHS forecasts less than one-third will secure a revenue channel, close financing, and finish construction by 2018.”

Just as IHS issued its Chilean prognostications, news of a major new unsubsidized project in the South American country—with full financial backing, all permits in place, and an actual construction schedule—was announced. Owned by the troika of Etrion (70%), Total (20%) and Spanish firm Solventus Energias Renovables (10%), Project Salvador is a 70MW (DC) PV plant to be sited on 133 hectares of Atacama desert land. This is a unique project, said to be the largest of its kind, because the unsubsidized solar-generated electricity it produces will compete on the spot market alongside other types of power sources. Salvador will “operate on a merchant basis where the electricity produced will be sold on the spot market and delivered to the Sistema Interconectado Central electricity network, with the ability to secure future power purchase agreements,” according to the press release.

The project will cost about $200 million and will be 70% financed through nonrecourse debt ponied up by the U.S. government-backed Overseas Private Investment Corp. The three partners, based on their respective ownership interests, will fund the remaining 30% equity portion. Construction of the project is set to begin in Q4, with SunPower (which just happens to be majority-owned by Total) leading the EPC efforts and supplying the modules and trackers. When the solar farm is completed in early 2015, it will produce approximately 200 GWh of power annually.

Although there’s no mention of why the project is named Salvador, the Curator can’t help but recall the late Salvador Allende, the leftist president of Chile who was assassinated in a bloody coup in 1973. Although he didn’t care much for capitalism, I bet he’d be pro-solar if he were alive today.