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SOLAR MARKETS UPDATE

4-5 JULY 2017 | SINGAPORE


financeasia.solarenergyevents.com
CONTENTS
Asia Pacific
Why 2016’s drop in renewables investment was good news in disguise 3
2017 global PV demand forecasts as high as 85GW 4
Thailand and Vietnam become lead countries for OEM solar module supply 5

Australia
Lyon Group to build world’s largest solar-plus-storage project in South Australia 7
Australian rooftop solar financier issues another AU$50 million climate bond 8
First Solar closes financing for 48.5MW solar project in New South Wales 9
Enel to acquire 137MW phase of Bungala Solar project in Australia 10

China
Price of Chinese module imports to India dropped 8% in Q1 2017 11

India
India added 5.5GW solar in FY2016/17 12
UK-India trade ties deepen with £240 million energy investment 13
Fortum proves low solar tariffs viable in India 14
India’s Greenko raises US$155 million equity from GIC and Abu Dhabi investors 15
ADB approves US$175 million to Powergrid for solar park transmission 16

Indonesia
Engie partnerships to invest US$1.25 billion in Indonesian renewables, agreements in Singapore 17
Indonesia’s new rural electrification regulation 18

Japan
Canadian Solar secures US$35 million credit facility with Sumitomo Mitsui Finance 19
Streamlined: Japan’s PV market future 20
GSSG Solar to acquire 350MW portfolio of solar in Japan 21
International PV players ready for Japan’s large-scale tenders 22
Japan’s big PV names targeting self-consumption and rooftop market 23
Japan to lower tariffs, cancel projects after paying ¥2.3tr last year for FiTs 24

Philippines
Philippines hits 903MW of solar PV under RE law, ground-breaking on 150MW plant 26

Malaysia
Edra plans to develop 50MW solar project in Malaysia 27
Malaysia to auction 460MW of large-scale solar PV 27
ENGIE enters partnership to develop solar in Malaysia 28

Pakistan
Pakistan to adopt competitive bidding for new solar PV projects 29
Canada MoU with Pakistani province for 1GW of solar 30

Sri Lanka
Sri Lanka to tender 100MW floating solar plant, funds module R&D 31

Thailand
Thai solar slated to rejuvenate from mid-2017 but long dry spells expected 32

2
ASIA PACIFIC

Why 2016’s drop in renewables investment


was good news in disguise
Despite a significant drop in global
renewable energy investment last year,
a corresponding rise in renewables
deployment spelled encouraging news
for the sector, according to a new UN
Environment Programme (UNEP) report
entitled ‘More Bang for the Buck’.

Credit: UNEP
The drop in investment did not dem-
onstrate a lowering of interest in the
technologies, but instead came as an
2016 saw a 10% drop in average cost per megawatt for setting up solar PV and wind projects - UNEP, BNEF,
indicator that the costs of renewables
Frankfurt School report.
are coming down. Indeed, during 2016
there was a 10% drop in average cost
per megawatt for setting up solar PV and in renewable energy install costs. the dramatic cost reductions of the past
wind projects. Moreover, investment in re- few years, unsubsidised wind and solar
newables was roughly double the amount Solar investment was down 34% to can provide the lowest cost new electri-
invested in fossil fuel generation – its US$113.7 billion last year, at the same cal power in an increasing number of
highest proportion to date. time as PV installations grew to a record countries, even in the developing world
75GW. - sometimes by a factor of two.
The report did however acknowledge
a slowdown in China, Japan and some The regions with the most noteworthy “Instead of having to subsidise renew-
emerging markets as part of the reason tail off in clean energy investments were ables, now authorities may have to
for reduced investment. China (down 32%), Japan (down 56%) and subsidise natural gas plants to help them
Mexico, Chile, Uruguay, South Africa and provide grid reliability.”
Notably, the report which does not Morocco (down 60% or more). This was
include large hydro capacity in its figures, blamed on lower than expected electric- Erik Solheim, executive director of UN
was also delivered in partnership with ity demand growth as well as auction and Environment, added: “Ever-cheaper clean
Bloomberg New Energy Finance (BNEF) financing delays. The US only dropped tech provides a real opportunity for inves-
and the Frankfurt School-UNEP Collabo- 10%, while Europe grew 3% and Jordan tors to get more for less.”
rating Centre. saw a 148% rise.
UNEP also praised the continued raduc-
Worldwide renewables investment There was also record acquisition activity tion in solar tariffs driven by aucitons
dropped 23% to US$241.6 billion in 2016, in renewables rising 17% to US$110.2 round the world. Yesterday PV Tech re-
its lowest levels since 2013, yet installa- billion. ported that GTM Research was expecting
tions grew 8% from 127.5GW in 2015 to a the upcoming tender in Saudi Arabia to
record 138.5GW in 2016. This trend was Michael Liebreich, chairman of the potentially drop below two US cents per
made possible predominantly by the drop advisory board at BNEF, said: “After kWh for the first time.

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ASIA PACIFIC

2017 global PV demand forecasts as high as


85GW
Global PV demand for 2017 could be
as high as 85GW according to market
research firm GTM.

The figures published on Tuesday coincid-


ed with that of rival firm IHS Markit, which
has predicted a lower tally of 79GW.

The latter’s prediction of negligible


growth on its 2016 figure of 78GW is at-
tributed to poor performance in the three
largest markets of China, the US and
Japan.

Credit: Welspun Renewables.


GTM Research has forecast that by the
end of 2017, India will have overtaken
Japan to become the third-largest PV
end-market demonstrating that India
can hardly be considered an emerging
market. India is expected to overtake Japan as the third-largest market globally.

“In some senses, characterizing what


we expect to be a nearly 10 GW market untapped segments including residential last year was partly attributed to a large
with a refined national tender program, rooftop and rural mini-grids, problems volume of projects completed prior to
domestic content capacity, and a consoli- that mature markets typically do not 2016 finally being recognised in Beijing’s
dated base of large players as ‘emerg- face,” he added. official register.
ing’ seems pretty crude. On the whole,
I would disagree with that characteriza- Great unknown Bloomberg New Energy Finance told PV
tion,” Ben Attia, research associate at China has proven to be a difficult market Tech that its rolling forecast for 2017 is
GTM Research and lead author of the to forecast with state-level proclamations currently at a range of 76-81GW with the
report told PV Tech. capable of shifting the industry on its axis. mid-point figure 79GW.

“But in another sense, India is still an Both firms expect recent deployment Figures released last month by Taiwan-
emerging market because the market growth in China to tail off with IHS going based firm EnergyTrend predicted just
potential is still significantly limited by further and betting on a fall in installa- 73.9GW. It echoed the expectation of
capital squeezes, effective rooftop policy, tions during 2017. reduced rollout in China and also expects
grid balancing and utility bankability to see India leapfrog Japan into the num-
risks, component quality risks, and huge, The bumper +34GW witnessed in China ber three spot.

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ASIA PACIFIC

Thailand and Vietnam become lead


countries for OEM solar module supply
While third-party outsourcing of solar
PV module assembly has been a con-
stant feature of the PV industry for
many years, the landscape of suppliers
and the country of manufacturing has
changed radically in the past two years,
and will continue to do so out to the
end of 2018.

This article shows clearly how third-party


module supply by original equipment
manufacturers (OEMs) has moved firmly
to Thailand and Vietnam, with continued
market-share gains expected from these
countries going forward.

Image: Celestrica
We explain why these changes have oc-
curred and what the implications of this
shift are expected to be.

Contract manufacturing is prevalent across almost every adjacent technology market, not simply the solar
The analysis is taken from the January
industry.
2017 release of our PV Manufacturing &
Technology Quarterly report. The themes
are set to be discussed at the forthcom- different in outsourcing for solar cells and remove mainland China from the picture.
ing PV CellTech 2017 event in Penang, modules comes from tolling, something This is done because third-party outsourc-
Malaysia, 14-15 March 2017. that is different from the role of dedicated ing in China is rather the norm for solar,
OEMs and is touched on below when we all across ingot, wafer, cell and module
What is the role of OEM suppliers in talk about the China issue. production.
solar?
Firstly, it is worth reviewing what we mean Contract manufacturing is prevalent In fact, tolling is rife in China, where com-
by OEM supply, and why many suppliers across almost every adjacent technology panies effectively sublet time on under-
and OEMs themselves choose to stay market, not simply the solar industry. The utilized factories to produce product for
off the radar in terms of promoting this drivers tend to be somewhat industry- other competitors. Even polysilicon plants
supply-to-market tactic. specific, but are mainly stimulated by cost are used on a tolling basis in China.
and route-to-market. It is a theme that
In contrast to the semiconductor industry has reshaped global manufacturing in Tolling is radically different from OEM
that has different definitions of contract the whole for the past four decades, has supply. OEM suppliers’ model is to oper-
manufacturing and roles for OEMs in the often been characterized by chasing the ate as a dedicated third-party assembly
supply-chain, solar module manufacturing next cheap labour region, and could not route, with a brand, such as Flextronics,
is relatively simple and simply assembling be a more pertinent topic to consider in Celestica and Jabil Circuits. Often OEM
cells into a module ranks is a one-stop global economics, with President Trump suppliers shift to a dual OEM/direct-mar-
shop with virtually no technical barriers- and Mexico forming the lead case-study. ket approach, generally driven by lack of
to-entry. business or a hunger to increase margins.
Again, China forms a unique case for
Therefore, the role of the dedicated OEM third-party sourcing There are likely hundreds of companies in
for solar module production is somewhat China today that operate in a quasi-OEM,
synonymous with module contract sup- Before we dive into the discussion and partial-tolling, and on/off direct-sell-to-
ply, and the terms are used in this article analysis of global OEM module supply market approach. There is no parallel
interchangeably. The main term that is for solar, the first thing we need to do is in the solar industry, and nor should 

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ASIA PACIFIC

one expect to see this change in China manufacturing. Moreover, within Vietnam there were still many Chinese companies
anytime in the near future. and Thailand, it is important to define that needed fully-operational third-party
clearly who is operating the sites. In this supply routes to feed the US market.
Therefore, in our graphic below, we regard, the separation of Malaysia from During 2016 however, this has changed
remove all China-based third-party activ- Vietnam and Thailand is again justified, due to the increased availability of new
ity, that also happens to be impossible with Vietnam and Thailand having a cell and module capacity set up across
for anyone to come close to tracking greater number of OEM players whose Southeast Asia by Chinese and Taiwanese
with accuracy, and look at the main OEM business model has more of a sub- companies, under their own brand.
production trends outside China. This is contract element to it, with the custom-
shown in the graphic below. ers often being Chinese companies who PV CellTech to address prospects for
bankroll the efforts. OEM suppliers going forward
Of all the updated and new analysis of As we set up the agenda for the PV
PV manufacturing done by our in-house The OEM landscape post SunEdison CellTech 2017 event in Penang, Malay-
research team, this is one of the most restructuring sia, 14-15 March 2017, we specifically
striking visuals. We have chosen to group The other factor that has come into play invited some of the companies that were
data across certain countries and regions in the past 12 months comes from the behind the above market shifts, as OEM
to show the trend most clearly. This fallout of the SunEdison supply arrange- operations had previously been incred-
means putting OEM module production ments, with SunEdison just a few years ibly stealth within the solar industry. The
in Europe, Canada, Korea, Indonesia, ago being highly vocal and proud of other driving factor is our continued focus
Taiwan, India and some others into the running a fab-lite approach. Virtually on really knowing who is making the cells
Rest-of-the-World group. This allows us overnight – at the end of 2015 – module and modules being shipped to the end-
to track everything outside Latin America, and cell suppliers that were reliant on a market today.
Malaysia, and the dual Southeast Asia constant supply of product being shipped
countries of Vietnam and Thailand, as to SunEdison’s downstream projects had To view the latest PV CellTech agenda,
one group that operates differently to the to quickly find new customers, or even please follow this link. To register for the
aforementioned countries. decide if the timing was right to move event, click here.
from OEM supply to a branded offering
We make a clear distinction also be- to the end-market. We will also be hosting free webinars in
tween Malaysia and Vietnam/Thailand, February, discussing PV manufacturing
with OEM operations in Malaysia again It appears most have managed this, albeit and technology trends and the impact of
differentiated, in a similar way to how the with related impairment and write-off global market drivers. You can register for
country as a whole is placed for high-tech costs. Ultimately, at the start of 2016, these webinars through this link.

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AUSTRALIA

Lyon Group to build world’s largest solar-


plus-storage project in South Australia
Brisbane-based renewable energy
investor Lyon Group will soon start
building a AU$1 billion (US$767 mil-
lion) solar-plus-storage farm in South
Australia - the world’s largest.

The Riverland project will include 330MW


of solar PV requiring AU$700 million
investment alongside a 100MW/400MWh
lithium-ion battery system costing be-
tween AU$200-300 million. This will also

Credit: Lyon Group


be Australia’s largest PV farm.

Various news outlets including the Aus-


tralian Broadcasting Corporation have
cited Lyon Group founding partner David Another solar-plus-storage project from Lyon Solar.
Green speaking to reporters in Adelaide
about the record-breaking project.
process. Lyon Group has reportedly al- Another 100MW battery at Kingfisher
Green said the project would include 3.4 ready shown interest in participating. Lyon Group had already announced last
million solar panels and 1.1 million bat- year another major solar-plus-storage
teries. Lyon Group has secured land with Moreover, as more renewables come project at Roxby Downs in South Austra-
construction set to kick off in June, requir- online all over the country, Australia’ s lia.
ing 270 workers, and commissioning due energy industry faces the impact of im-
in December. It was reported that grid minent closures of multiple old, coal-fired The Kingfisher Project will include 120MW
connection negotiations are at advanced plants. For example, the Clean Energy of solar costing AU$250 million and a
stages. Council today called for renewables and 100MW/200MWh lithium-ion battery
storage to replace the 1.6GW Hazelwood system requiring between AU$100-150
The storage element of the project comes coal station in Victoria, which was closed million investment. This will include 1.3
at an auspicious time given the multiple this week. million PV panels and 1.1 million batteries
blackout issues that hit South Australia again.
over the last few months, causing a fierce Now Lyon Group, which is backed by
national debate about whether renew- Japanese giant Mitsubishi and Blackstone The battery will be connected to a grid
ables were to blame. Even Tesla chief via US hedge fund Magnetar Capital, has that will power nearby mining activity.
Elon Musk weighed in by offering to build announced its own separate storage plan The project will also be connected to
a 100MW battery to solve the crisis, which for South Australia. Australia’s wholesale market, the National
he would provide free of cost if not com- Electricity Market (NEM). It is due to come
missioned within 100 days of being asked. Green told reporters that the solar power into full operation by mid-2018.
Just a few days later the South Australian generation will qualify for renewable
government announced plans to tender energy subsidies of AU$84/MWh, addi- Engineering firm Downer will carry out
for a 100MW battery, emphasizing that tional to the wholesale market price. The EPC, while US-based firm First Solar will
there will be an open, competitive tender project is also 100% equity financed. carry out O&M activities.

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AUSTRALIA

Australian rooftop solar financier issues


another AU$50 million climate bond
Financial services group FlexiGroup,
whose subsidiary Certegy Ezi-Pay
finances rooftop solar, has issued a
AU$50 million (US$38 million) climate
bond, which has been certified by the
global Climate Bonds Initiative (CBI).

The Clean Energy Finance Corporation


(CEFC) made a cornerstone commitment
of AU$20 million to the bond.

Credit: CEFC
This is only the second climate-certified
issue of a bond backed by securitised as-
sets in Australia, with FlexiGroup issuing a The Clean Energy Finance Corporation (CEFC) made a cornerstone commitment of AU$20 million to the
very similar bond back in April 2016. bond.

CEFC debt markets lead Richard Lovell The bond is backed by consumer receiv- bonds. Our investment support for the
said: “FlexiGroup achieved tighter pric- ables originated through FlexiGroup’s FlexiGroup climate bond is part of our
ing on this climate bond, which shows wholly-owned subsidiary Certegy Ezi-Pay, strategy to ensure that Australia’s clean
investors were prepared to pay a ‘green which has financed more than 120,000 energy sector can tap into this burgeon-
premium’. This is a strong market signal solar PV rooftop installations. ing source of capital, and that investors
which will assist in accelerating the de- with a socially responsible mandate have
velopment of a more varied and flexible Lovell added: “There is clearly a global the opportunity to participate.”
green bond market in Australia.” trend toward investment in green

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AUSTRALIA

First Solar closes financing for 48.5MW


solar project in New South Wales
US integrated PV firm First Solar
has reached financial close on a
48.5MW(ac) solar project in New South
Wales, Australia.

The Manildra Solar Farm has received


AU$9.8 million (US$7.5 million) of grant
funding from the Australian Renew-
able Energy Agency (ARENA) under its
large-scale solar funding round. A 13-year
power purchase agreement (PPA) has
also been signed with EnergyAustralia,
a major utility that is set to sign PPAs for
500MW of wind and solar projects across
eastern Australia.

The project will use 466,000 First Solar


thin-film modules and single-axis trackers
to produce more than 120GWh per year
for the equivalent of 14,000 households.

Jack Curtis, First Solar regional manager


for Asia Pacific, said: “We have witnessed
unprecedented cost reductions in large-
scale solar in recent years. As the appetite
for this asset class continues to grow,
timely and reliable project delivery will be
the strongest driver of future cost reduc-
tions, cementing solar as a competitive
energy source in Australia.”

First Solar has also appointed local engi-


neering firm O’Donnell Griffin to provide
EPC services for the project. Construction
is scheduled to commence in the first half
of 2017 and once complete in 2018, First
Solar will have more than 400MW(ac) of
solar PV installed in Australia.

ARENA chief executive Ivor Frischknecht


Credit: First Solar

said: “By supporting innovators like


First Solar, ARENA has fast-tracked the
development of substantial new Austra-
lian industries like the large-scale solar
The Manildra Solar Farm has received AU$9.8 million (US$7.5 million) of grant funding from ARENA.
sector, which is now on the cusp of being
commercial.”

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AUSTRALIA

Enel to acquire 137MW phase of Bungala


Solar project in Australia
Enel announced Monday that it has
closed an agreement to acquire Bunga-
la Solar One — the 137.5MW phase of
the 275 MW Bungala Solar PV project
— from Bungala Solar Holding Pty Ltd.,
a subsidiary of Australian developer
Reach Solar Energy Pty Ltd.

The project is currently tabbed as the


largest ready-to-build solar project in Aus-
tralia. The transaction was conducted by
Enel through a joint venture between Enel
Green Power and the Dutch Infrastructure
Fund (DIF).

The purchase of the phase is expected to


be closed in the third quarter of 2017. The
Bungala Solar project is located near Port
Augusta in South Australia.

Image: Enel
Francesco Starace, Enel CEO and gen-
eral manager, said: “The acquisition of
Australia’s largest PV project, which takes The 275MW project is expected to be completed by the third quarter of 2018.
us onto a new continent, is an important
step forward for the Enel Group. The
Australian renewable energy market is US$157 million dollars. The total installation is expected to be
characterised by abundant resources completed and operational by the third
and growing demand. Enel will work to The total investment will be financed quarter of 2018.
harness these resources and contribute through a combination of equity and
to the Australian economy, generating project finance with a consortium of local The Bungala Solar project is expected
shared value for all our stakeholders and international banks. The project is to produce around 570 GWh annually,
through a strategy that delivers industrial fully contracted with a long-term power equivalent to the consumption needs of
growth built upon a foundation of sustain- purchase agreement with Australian utility approximately 82,000 Australian homes.
able development.” Origin Energy. There are already plans for larger solar
projects to be developed in Australia,
The joint venture’s total investment in Construction at Bungala Solar One is as the Kidston Solar project is expected
the 275MW installation is around US$315 expected to begin by mid-2017, followed to feature a 270MW second phase that
million dollars — which entails project by Bungala Solar Two — with construc- will be paired alongside the initial 50MW
construction, with Enel providing around tion slated to start by the end of 2017. phase.

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CHINA

Price of Chinese module imports to India


dropped 8% in Q1 2017
The price of Chinese module imports
to India has dropped 8% over the last
quarter and 29% year-on-year, according
to new price indices calculated by consul-
tancy firm Bridge to India.

The consultancy has analysed import


prices for modules and inverters, as well
as costs of utility-scale and rooftop EPC,
by interviewing up to 10 leading project
developers, EPC firms and module sup-
pliers.

Modules
Looking specifically at multi-crystalline PV
module imports from China for orders of
minimum 50MW in size, Bridge to India
calculated cost, insurance and freight
(CIF) to India, not including any further

Credit: Alpex Solar


port or inland transportation costs. Mod-
ule prices have been falling steeply due
to oversupply combined with quarterly
demand fluctuations in China.
Bridge to India has analysed import prices for modules and inverters, as well as costs of utility-scale and
rooftop EPC.
Inverters
Inverter prices were shown to have fallen
21% year-on-year and 5% over the last in size, EPC prices declined 22% year-on- year-on-year and 6% over the last quarter.
quarter, mainly due to increasing compe- year, and 8% over Q1 2017.
tition and new players such as TBEA, Hua- Bridge to India, associate director, con-
wei and Sungrow entering the market. Rooftop EPC sulting at Bridge to India, wrote a blog on
Meanwhile, for 500kW rooftop solar proj- PV Tech today discussing the new tender
Utility-scale EPC ects on an industrial pre-fabricated metal process paradigm in India following
For utility scale solar projects of 50MW structure, EPC prices have declined 21% recent record low solar tariffs.

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INDIA

India added 5.5GW solar in FY2016/17


India added 5,526MW of solar PV
capacity in the fiscal year 2016/17, up
83% on the previous year, according
to new figures from the Ministry of
New and Renewable Energy (MNRE).

Consultancy firm Bridge to India said the


numbers were “impressive”, but still 50%
below the annual target of 12GW. On
the other hand, wind additions of 5.4GW
in the same period were 35% over the
annual target.

The consultancy noted a downward


trend in renewable energy allocation

Credit: IBC Solar


during the financial year making the
20,450MW target for 2017/18 “impos-
sible” to meet.

India did install a “blockbuster” 5.8GW India installed a blockbuster 5.8GW or renewables in March in the lead up to the financial year end.
of renewables in March in the lead up to
the financial year end, which was more threat include accelerated depreciation to six months. Despite just “modest”
than the previous 11 months combined. and 10-year tax holidays. renewables growth expected in 2017/18,
Bridge to India noted that this rush was Bridge to India forecasts that deploy-
likely to have been driven by a widely Noting the downward trend in solar ment will still be well ahead of thermal
expected phase out of incentives from tenders over the year, the consultancy capacity additions.
this month onwards. Incentives under expects this trend to continue for up

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INDIA

UK-India trade ties deepen with £240


million energy investment
A joint investment of £240 million has
been unveiled by the UK and Indian
governments to encourage investment
into India’s rapidly growing energy and
renewables market and deepen trading
ties between the two countries.

UK chancellor Philip Hammond visited


Delhi and Mumbai on Tuesday as part of
the 9th UK-India Economic and Financial
Dialogue (EFD), hosted by Indian Finance
Minister Arun Jaitley. As the UK prepares
to leave the European Union, Hammond
was expected to engage in high level
talks aimed at expanding the UK’s eco-
nomic and trading relationship with India.

As part of these efforts, investment from


the City of London is to be encouraged
into India’s energy sector through a UK-
India sub-fund of India’s National Invest- Chancellor Philip Hammond visited Delhi and Mumbai earlier this week for the 9th UK-India Economic and
Financial Dialogue.
ment and Infrastructure Fund. With a core
investment of £120 million from each gov-
ernment, this will aim to raise £500 million seek to agree priority areas for bilateral “As we deliver on the shared commit-
for Indian infrastructure projects. collaboration and a business delegation ment to provide sustainable, secure and
of over 40 companies will explore com- affordable energy in both our countries,
The fund will focus initial investments mercial opportunities. the India-UK Energy for Growth Dialogue
on India’s rapidly growing energy and will enable us to explore the immense
renewables market and a fund manager is Representatives from across power, shared economic opportunities lying
expected to be selected by the autumn. renewables, oil and gas will discuss future ahead.
direction for the energy sector, infra-
Hammond said: “As we prepare to leave structure financing, and opportunities for “India invests more in the UK than in the
the European Union, it is more important wider collaboration. rest of the EU combined, while the UK is
than ever that we strengthen our relation- the biggest G20 investor in India. I look
ship with India, one of the world’s leading In addition to energy, Clark will also forward to discussing how the UK govern-
economies and one of our oldest friends engage in discussions on climate change ment’s Industrial Strategy will increase the
and allies.” and wider UK-India ties supporting re- prospects for shared trade, investment
search and innovation as part of the UK’s and energy innovation between our two
The UK’s secretary of state for business, emerging industrial strategy. great countries.”
energy and industrial strategy (BEIS) has
also landed in India to take part in the Speaking ahead of the visit, the minister According to BEIS, the Energy for Growth
first talks between the two countries dedi- said: “On my second visit to India since Dialogue takes forward a commitment
cated to deepening energy cooperation taking office, I look forward to discussing made by Prime Ministers Narendra Modi
between the two countries. our shared priorities of providing secure, and Theresa May during the latter’s visit
affordable and sustainable energy. It is to India in November last year when
Greg Clark will meet with his ministerial clear that building greater collaboration plans were unveiled for a £10 million joint
counterparts over the two day visit (6-7 between the UK and India in the energy research and development centre to sup-
April) as part of the inaugural India-UK sector has the potential to increase pros- port solar innovations.
Energy for Growth Dialogue, which will perity and growth in both our nations.

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INDIA

Fortum proves low solar tariffs viable in India


Finnish firm Fortum has commissioned
a 70MW solar PV plant in the Indian
state of Rajasthan, which it won last
year at what was then a record low
tariff of INR4.34/kWh (US$0.067).

Critics had said that even higher tariffs in


other states were unworkable, although
irradiation and solar park costs do vary in
each location.

Prices hovered above this 4.34 rupee level


for some time, but they dropped signifi-
cantly lower in February this year with

Credit: Fortum Corporation


the likes of Acme Solar hitting a levelized
tariff of INR3.29/kWh at the Rewa park in
Madhya Pradesh. Jaws dropped in the
industry, followed by the usual to and fro
between doubters and those convinced
that market conditions genuinely make
such low tariffs feasible. Fortum has commissioned a 70MW solar PV plant in the Indian state of Rajasthan with what was once a
record low tariff.

Fortum’s plant completion will be wel-


comed by the Indian government, which The firm’s 70MW commissioning at the largest solar plant to date, with a total
despite aiming to push prices down Bhadla Solar Park came on schedule, 85MW installed across Rajasthan and
will want to see through a sustainable having secured a 25-year power purchase Madhya Pradesh. The company is also
industry. Nonetheless it is well known that agreement with major Indian utility NTPC. building a 100MW solar plant at Pavaga-
Fortum has a rock solid balance sheet and da in Karnataka, which is due for comple-
Bridge to India has cited poor risk pricing Fortum entered India by announcing tion in the next few months, with a tariff of
in the business plans of Fortum’s Indian plans to invest €200-400 million. The INR 4.79/kWh.
rivals. Bhadla project is the company’s third and

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INDIA

India’s Greenko raises US$155 million


equity from GIC and Abu Dhabi investors
Indian renewable energy firm Greenko
Energy Holdings has raised US$155
million in equity from an affiliate of
global investment firm GIC and a
wholly-owned subsidiary of the Abu
Dhabi Investment Authority (ADIA).

The funds will be used to build new


renewable energy projects and work on
Greenko’s already acquired PV projects,
with further plans to expand existing wind
farms. Greenko completed its acquisition
of bankrupt SunEdison’s 587MW Indian
solar and wind portfolio for US$392 mil-
lion last November, bringing to an end
several months of the sector fretting over

Flickr: SunEdison
how SunEdison’s demise might impact
downstream progress in India.

GIC is investing US$123.9 million, while


The funds will be used to grow Greenko’s renewable energy portfolio, having recently acquired SunEdison’s
US$31.1 million is to come from the ADIA Indian PV assets.
entity, which invests on behalf of the Abu
Dhabi government. Greenko had already
raised US$230 million in capital from Greenko now has more than 2GW of sustainable platform to take advantage
ADIA and GIC last June. GIC remains the operational wind, solar and small hydro of evolving energy market dynamics and
majority shareholder in Greenko having projects in India. Anil Kumar Chalamala- strong sector fundamentals accelerated
bought a stake last October for US$213 setty, chief executive Greenko Group, by new government initiatives.”
million. said: “We have created a strong and

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15
INDIA

ADB approves US$175 million to Powergrid


for solar park transmission
The Asian Development Bank (ADB)
has approved a US$175 million loan
to India’s major network operator and
utility Power Grid Corporation of India
(Powergrid) relating to solar park trans-
mission.

ADB will also administer a US$50 million


co-financing loan equivalent from the
Clean Technology Fund (CTF) – a US$5.8
billion component of the Climate Invest-
ment Funds.

India recently doubled its solar park


capacity target to 40GW, and Powergrid is

Flickr:ADB
working on projects to improve transmis-
sion.
ADB will also administer a US$50 million co-financing loan equivalent from the Clean Technology Fund (CTF).

Specifically it is working on transmission


infrastructure for 2.5GW of power from Transmission is one of a number of issues energy,” said Kaoru Ogino, an ADB prin-
parks in Bhadla in the state of Rajasthan affecting solar parks, including retender- cipal Eenergy specialist. “We are looking
as well as 700MW from Banaskantha, ing of solar park capacity of late due to forward to the benefits of this partnership
Gujarat. Furthermore it is working on various infrastructure delays putting off with Powergrid to continue helping India
two subprojects aiming to increase solar potential bidders. achieve a more inclusive and sustainable
power generation by 4.2GW. future.”
“India, with its mandate of achieving a
In related news, this week Indian state-run more sustainable future, is leading the An ADB loan agreement of up to US$500
utility NTPC also completed commission- lines in achieving energy security while million was announced last month relat-
ing of its 260MW project at the Bhadla increasing energy capacity and supply ing to Green Energy Corridor projects.
Solar Park. through renewable sources such as solar

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16
INDONESIA

Engie partnerships to invest US$1.25 billion


in Indonesian renewables, agreements in
Singapore
French power giant Engie Group is
partnering with three firms to develop
various solar-related projects in Indo-
nesia requiring US$1.25 billion invest-
ment.

The largest partnership agreement is with


sugar producer Sugar Group for a joint
US$1 billion investment in 500MW of solar
PV and biomass projects in Sumatra and
Eastern Indonesia over five years. Of this,
300MW will be dedicated to solar parks,
including a 140MW park in Lampung.

The second partnership is with micro-

Flickr: Bart Spielman


grid developer Electric Vine Industries
to invest US$240 million in building and
operating smart PV microgrids for 3,000
villages in the province of Papua over
five years. The projects are set to power The largest partnership agreement is with Sugar Group for a joint US$1 billion investment in 500MW of solar
around 2.5 million people during a 20- PV and biomass projects.
year period.
profit organization that was launched by Technological University Singapore and
The third is with PT Arya Watala Capital Engie during COP21, and were signed Schneider Electric to work on micro-grid
to invest US$15 million in up to 10MW of as part of French President Francois technologies for the region.
solar plants in East Nusa Tenggara, the Hollande’s visit to Southeast Asia in late
southernmost province, over three years. March. Yeoh Keat Chuan, managing director
The projects will be located in 10 differ- of Singapore Economic Development
ent areas in the province on major islands Singapore and Malaysia partnerships Board, which will support the projects,
such as West Timor, Flores and Sumba. As part of Hollande’s visit, Engie has also said: “The rapid urbanisation in Asia is
signed a partnership agreement in Malay- accelerating the need for smart and sus-
Didier Holleaux, executive vice president sia with Sime Darby on renewable energy. tainable urban solutions. We are pleased
of Engie Group, said: “Our strategy is to that Engie is leveraging Singapore’s
work through an ecosystem of partners to It has also partnered with utility Senoko strong ecosystem of industry and research
co-develop and scale renewable energy Energy and electricity storage group partners to develop and commercialise
and innovative low-carbon technology Bolloré to co-develop smart city solutions new urban solutions in Singapore to serve
solutions to meet the country’s unique including energy storage in Singapore this region. These efforts also build on
energy challenges.” and the Asia Pacific region. the capabilities of the new Engie Lab
Singapore, which was launched last year,
The three partnership agreements come Finally, Engie has signed agreements and reflects Engie’s growing presence in
as part of the Terrawatt Initiative, a non- with its R&D arm Engie lab, Nanyang Singapore.”

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INDONESIA

Indonesia’s new rural electrification


regulation
In an unprecedented move, the Direc- feasibility study? Without knowing these energy will be wasted.
torate General of Electricity under the variables, any business model that relies
Indonesian Ministry of Energy and Min- on household tariff collection can fail Rural electrification and its financial
eral Resources has pushed through a before it even starts. Farming communi- viability is a complex issue. It involves
rural electrification regulation recently ties only have cash a few months within engaging with the communities and
signed by the new minister, Ignasius their harvest payments. Fishing communi- understanding their needs, both physi-
Jonan. This regulation provides the ties and day labourers at nearby mines or cally and culturally. Understanding their
framework on how a private business fields typically have daily income. Will the requirements, their potential for growth,
entity can provide electricity to current- businesses pay attention to these facts and acknowledging their way of living is
ly un-electrified regions through busi- and apply the right payment scheme? Or required for a sustainable electrification
ness area concessions. It also provide will they assume everyone will pay for all program.
ways to calculate and receive electricity of the electricity produced for the dura-
subsidies from the government. tion of the project? Our team members and myself are still
learning new things despite having visited
This regulation opens the flood gates to Even more worrying is that there is over 300 rural communities and engaging
businesses currently providing electrifica- no standard of service defined in the with them and listening to their stories.
tion technologies and business models regulation. A solar lantern or an inad- We inspected over 200 solar PV microgrid
to rural areas. The exact requirements on equate small home system given to each systems and continue to find opportuni-
how to become an appointed electricity household may be counted as providing ties to learn more about how to acknowl-
provider is not defined within the regula- electricity service to the community. This edge each community as unique social
tion. Today there is an abundance of means that distributors of these products constructs. Only then we can develop and
technologies and business models avail- will be able to get approval to dissemi- design an appropriate electrification plan
able. Without a complete and responsible nate their wares and get paid through using the right technologies and payment
feasibility study, there is a huge risk to the the subsidy fund. What if the community schemes that meet their needs.
communities that they will receive elec- needs more than lanterns or individual
tricity in ways that are neither appropriate systems? What about productive use of Despite all of this, the new regulation
nor adequate. Indonesia’s diversity means energy? What about communities that are provides an opportunity for the private
that the energy use needs and growth better served with mini-grids? sector to engage in electrifying Indone-
potential between the communities vary sia’s 12,000 villages currently without any
widely. The reverse can also happen where mini- access to electricity. If the right compa-
grid providers will be able to install their nies can take advantage of the regulation,
Who will be performing a complete and systems in locations where there is no this will create mutually beneficial rela-
responsible energy needs assessment, need. A huge amount of subsidies will be tionships between them, the Indonesian
geophysical survey of the area, studies required to build the mini grids in these government and more importantly the
for social behavior, and economic activity locations. Unless they are also bringing community members and households.
and growth potential compiled as a useful additional economic activity, the available

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18
JAPAN

Canadian Solar secures US$35 million credit


facility with Sumitomo Mitsui Finance
Solar power company Canadian Solar
announced Thursday that its wholly-
owned subsidiary Canadian Solar Proj-
ects K.K. has entered into a three-year
credit agreement with Sumitomo Mitsui
Finance for US$35 million.

Sumitomo Mitsui Finance stands as one


of Japan’s largest leasing companies in
the world — boasting a presence across
the globe. The facility earned commit-

Image: Canadian Solar


ments from five finance leasing institu-
tions.

Canadian Solar intends to use the pro-


ceeds from the facility in order to spur the
Canadian Solar intends to use the proceeds from the facility in order to spur the development of PV projects
development of PV projects in Japan. This
in Japan.
stands as Canadian Solar’s second financ-
ing with the Sumitomo Mitsui Finance
group. from a leading group of finance leasing excess of JPY13 billion of credit lines with
institutions. We value our partnership with them. We look forward to expanding our
Dr. Shawn Qu, chairman and chief execu- SMFL. This is our second financing with banking relationship in Japan and other
tive officer of Canadian Solar, said: “We the broader Sumitomo Mitsui Financial important markets.”
are pleased to secure strong support Group. We have successfully raised in

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19
JAPAN

Streamlined: Japan’s PV market future


In every maturing market for solar
PV, thoughts start to turn away from
generating raw kilowatt-hours and be-
ing paid handsomely through feed-in
tariffs (FiTs) for them. Instead, sensible
thinking focuses on generating power
where and when it is actually needed,
whether that be through on-site self-
consumption or injecting it into the
grid at the times of day when it is most
needed, using batteries. In Japan how-
ever, this trajectory has been transpar-
ent and accelerated over the past five
years that the FiT has been in existence
(since July 2012).

“When we had ¥42 (US$0.37) /kWh FiT,

Image: Andy Colthorpe.


the business was so easy, people who
knew nothing about PV could run PV busi-
nesses, but now those amateurs are not
able to control the situation. Those who
can manage the situation correctly can
run business. Others have already left the Trina Solar Japan director Ye Chen with the company's latest bifacial modules, at the PV Expo show in Tokyo.
PV industry,” Yoshio Sekiguchi, a technical
expert at local, vertically integrated PV market in Japan is likely to total around Frontier, were this year not even repre-
company Looop, says. 8.6GW. Although figures released of sented with stands at the show, although
module shipments by the Japan Photo- their products were on display on the
Over and over again, at last week’s PV voltaic Energy Association (JPEA) only booths of distributors. The pair have
Expo trade show in Tokyo, PV Tech heard come up to around 6.4GW, Kaizuka says elected to focus on their overseas activi-
that those that will survive in Japan’s PV the JPEA statistics do not include Tier 3, ties for the time being, Kaizuka explained.
market will be the ones in it for the long Tier 4 makers, or many instances of large
haul. conglomerates like Marubeni buying “In Japan, based on historical records,
directly from Chinese makers. the peak of the solar industry was 2015
On a product level, you could see this in and 2016. Everybody says the same thing,
the fact that the domestic likes of Looop Kaizuka says that despite the absence of it’s going to slow down a little bit until
and China’s Trina Solar were offering precise data, some trends become appar- 2020 to absorb all those projects that
glass-glass modules, boasting ever- ent from looking at the market: market have already registered and keep stable
tougher materials and longer lifespans. volumes are down from the 10GW+ market size after that,” Trina Solar’s Ye
In Looop’s case they were offering the in- early years of the FiT, and manufacturing Chen says.
dustry’s longest warranties – 30 years – for volumes are down for Japanese module
their ‘Nextough’ modules, while Trina So- makers. “[The] market majority after that will come
lar was promoting the maximum yield fac- from commercial and residential roof-
tor of their bifacial modules at the show. In all, the mass market for PV in Japan tops.”
Indeed, there were several domestic and could have peaked in 2015, especially
international makers showcasing bifacial where ‘megasolar’ was concerned, RTS PV’s Kaizuka believes that going
modules, showing that squeezing out on which RTS’ Kaizuka and Trina Solar forward, Japan’s market will streamline
every drop of power from limited space is Japan’s director Ye Chen were in agree- down to around 5GW of new demand per
getting more and more important. ment. year, even if as much as half of a 50GW+
pipeline of already-approved projects is
Overall trends Two of Japan’s largest module manufac- cancelled, as has been widely reported.
Market analysis expert Izumi Kaizuka of turers, Kyocera – with around 1.4GW of
research firm RTS PV says this year’s PV capacity - and thin-film stalwarts Solar This year’s first tenders for large-scale

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20
JAPAN

solar (projects over 2MW) could be a last week, Japan’s move towards a self- veloper Eiwat, says batteries are another
‘wait-and-see’ process for many develop- consumption based solar market has next logical step, for large-scale as well
ers, who may choose not to get involved lead to the likes of Toshiba, Sharp and as rooftop solar. His company is involved
just yet, nonetheless an existing backlog Panasonic focusing firmly on the Zero with deploying US-made Aquion non-tox-
of higher FiT projects will sustain the Energy House (ZEH) concept, with higher ic, non-flammable ‘saltwater electrolyte’
market for some time to come, Kaizuka efficiency modules taking pride of place. batteries into Japan and according to Shi-
says. Furthermore, while the FiT drops Foreign players like LG and SunPower bata, if Aquion’s initial tranche of 10 proj-
this year to ¥21, this is still much higher who also make high efficiency modules ects in Japan this year go well, regional
than in comparable markets like Germany will continue to aggressively target this power companies, which also govern
(US$0.06/kWh). According to Looop sales market too, Izumi Kaizuka says, while Japan’s grid network, could give the ok
representative Rihan Kimura, system it will be “harder to sell high volumes for a further wave of batteries. As well as
prices have fallen so much in Japan that of cheap modules into the megasolar allowing for greater self-consumption, the
the IRR’s for projects have actually slightly (2MW+) market”. batteries could also remove the curtail-
risen from around 5%-6% to 6%-8%. ment risk from PV plant output, which has
Masaaki Shibata, a 20-year veteran of been seen as a barrier to investment in
Self-consumption future and batteries the Japanese renewables industry and some of the more saturated grid areas.
As we already explored in a news item president of consulting group and de-

GSSG Solar to acquire 350MW portfolio of


solar in Japan
Solar investment firm GSSG Solar an-
nounced Monday that it will provide
over US$120 million in additional com-
mitments to the firm’s investments in
Japanese solar projects.

As a result of this increased capacity,


GSSG will invest in the acquisition and
financing of an incremental US$1 billion
of Japanese mega-solar plants over a
three-year investment period.

Image: Martin Abegglen / Flickr


GSSG raised its first fund in 2014, which
focused primarily on Japanese solar with
select exposure to the US utility solar mar-
ket. This new commitment is exclusively
tabbed for the Japanese market and will
allow the firm to acquire another 350MW
of solar projects within the country.

GSSG is an investment manager that


GSSG will invest in the acquisition and financing of
overviews the technical, financial, and ex- laborative structures with its development
an incremental US$1 billion of Japanese mega-solar
ecution risk of each potential solar project partners and stakeholders. plants over a three-year investment period.
investment. It focuses on aligned and col-

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JAPAN

International PV players ready for Japan’s


large-scale tenders
The prospect of Japan introducing a ten-
der system for large-scale solar project
rights from this year does not phase in-
ternational companies doing PV business
in Japan, who have said they are ready
for the new policy.

Dr Shawn Qu, CEO of Canadian Solar, and


Terry Zhao, CEO of Chinese inverter com-
pany Sungrow’s Japanese subsidiary both
told PV Tech that the prospect of annual
500MW auctions for PV projects over 2MW
is not an obstacle to their ambitions in the

Image: Andy Colthorpe.


region. “We are prepared. We are ready to
participate in the tenders under the new
rules,” Qu said. “Competition is always
there,” he added when asked if the new
auction system would lead to aggressive
price competition across the industry. Canadian Solar's stand at PV Expo, Tokyo. The company was showcasing its vertically integrated strengths from
high-efficiency modules to EPC services and everything inbetween including residential energy storage solutions.
“Even with the FiT, it has already dropped
several times and now the tenders will allow on price, so [the lowering of the FiT rate] Sungrow welcomes the introduction of
some market elements into this process. was not a surprise to us at all,” Qu said. tenders, according to Zhao. “It is good
But there have been tendering mechanisms news for us, because [to be successful]
in many other countries where Canadian Inverter maker welcomes increased in auctions, you have to lower costs. For
Solar participates, so we are not surprised competition through tenders lower costs, if the inverter is cheaper, it’s not
at all, we will be fully prepared and will par- Meanwhile, Sungrow Japan, which has a enough. But we can make the whole system
ticipate.” Ontario-headquartered Canadian target to supply 200MW of inverters in the cheaper, with 10% payback [in Japan]. For
Solar recently connected a 24MWp PV plant country this year, wants to be in the country our inverters, the transformer will be cheap-
in Yamaguchi Prefecture, bringing its total long-term, CEO Terry Zhao said. “Unlike er in some cases. With some other inverter
portfolio in operation in Japan to 46MWp. some other Chinese companies, we want to makers you need two transformers for just
That project was awarded the feed-in tariff be in business in Japan for 20, 30 years from 1MW of PV. With ours, for a 2MW system
(FiT) rate of ¥40 (US$0.35)/kWh, applicable now,” Zhao said. you can use just one transformer instead of
in 2013, the second year of Japan’s large- two. These technical aspects will make our
scale FiT scheme. The company has introduced two inverters customers win the auctions [we hope]. We
to the Japanese market, including a central see it as a positive step,” Zhao said.
Although the FiT rate has since fallen drasti- inverter solution specifically for 2MW+
cally, this year dropping to just ¥21/kWh for PV plants, meaning it has a lot at stake in What may make the process more com-
projects to be awarded under the tender, Japan’s megasolar (local term for large- plex and difficult for some are new rules
Canadian Solar has a further pipeline in Ja- scale) market. Zhao said that Japan’s falling governing the right to connect to Japan’s
pan of 167MWp of projects under construc- FiT would not deter the company. “The regional grid network, Izumi Kaizuka, a mar-
tion and 66MWp of projects ready to go, all FiT will drop to ¥21 next month, but even ket research expert at Tokyo-based RTS PV,
at higher FiT rates than this year’s reduced that is dearer than in other countries. In the told PV Tech. In addition to securing rights
rate. “We still have a good inventory of high Japanese market, costs are very high so through auctions, project developers must
FiT projects that will take a few more years we and panel makers need to bring whole also enter what could be lengthy discus-
to build out. [Furthermore], we’ve been in system costs down. The FiT could still drop sions with whichever of Japan’s 10 regional
this business for 16 years. We know that to ¥20 or ¥18 and we would still be ok [as an utilities – which are also the country’s grid
grid parity is the ultimate goal and we think industry],” Zhao said. operators – to get their PV plants grid-tied,
we can beat conventional energy sources which is a necessity to receive the FiT.

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JAPAN

Japan’s big PV names targeting self-


consumption and rooftop market
The Japanese PV market’s switch from ing so-called ‘hybrid’ inverters, which
a feed-in tariff (FiT) driven, mostly incorporate solar PV inverters and bat-
utility-scale phenomenon to one tery inverters into one package.
based on rooftops and self-consump-
tion was in evidence at the PV Expo Also of interest on the Panasonic stand
trade show in Tokyo this week. was a new set of square modules for
the commercial market, specifically
PV Tech visited the booths of major designed to be placed in narrow spaces
manufacturers and international house- on flat roofs at high altitude, including

Image: Andy Colthorpe.


hold names Panasonic, Toshiba and the many skyscrapers that dominate the
Sharp during the exhibition. It was clear skylines of Tokyo and other major Japa-
that while utility-scale PV (known as nese cities. The modules are capable
‘mega solar’) in Japan is set to dimin- of withstanding strong winds and are
ish in market size, with the government considered suitable even for buildings
Sharp's Zero Energy House solution, utilising the
now confirming the introduction of an- more than 200 metres tall. company's own-brand 'Blacksolar' high-efficiency
nual 500MW tenders, each of the three modules.
big names was preparing to see the Zero Energy Houses and Zero Energy
already strong residential market take Buildings Sharp business strategy manager Hideo
off further and commercial PV continue Japan has introduced new Zero Energy Miki said that from his company’s point
to grow. The Japanese government House (ZEH) and Zero Energy Building of view it was important to make ZEH
has confirmed that FiT prices will fall to (ZEB) standards. While last year industry kits that were not just capable of gener-
¥21 (US$0.18)/kW this year with further sources at the show had expressed a ating more power than they consumed
drops expected next year, meaning that belief that ZEH would be mandatory for in nominal terms, but also by using bat-
from then it will be as economical to all new houses built by 2020, it appears teries making practical good use of that
self-consume onsite generated power the government has scaled back its generated power.
as to sell it back to power companies. ambitions on receiving feedback from
housebuilders. Instead there is a target Miki said that while there are some
Panasonic’s booth included its latest that by that year 50% of new dwellings incentives available from the govern-
high-efficiency ‘HIT’ branded modules and new commercial buildings will be ment for ZEH, the support scheme
for the residential market boasting net zero energy, which still represents a seems somewhat complex and requires
conversion efficiencies as high as 19.3%. sizeable opportunity in a country which homeowners to present evidence of
They are also branded ‘P&S’, or ‘push builds close to one million new houses the house being net zero energy before
and slide’, which means the modules a year. funds can be received. Sharp has also
can be easily snapped into place on launched its own range of batteries for
rooftop installations. Streamlining In addition to the big three profiled, houses in several configurations with up
labour costs and installation times have many companies were presenting kits to 6.5kWh of storage available in the
been a key area where improvements and solutions for ZEH, incorporating basic models.
have been cited as needed in Japan’s heating and insulation, PV and energy
market. storage. Perhaps the most sophisti- Toshiba’s latest ranges of products for
cated looking was Sharp’s (pictured). the rooftop market included a pro-
While residential rooftop PV is still be- Companies like Panasonic, Sharp and totype solar roofing tile, which while
ing installed on a feed-in tariff basis for Toshiba, which are involved in a number more conspicuous than Tesla-SolarCity’s
the most part in Japan, Panasonic was of different business areas related to much-hyped solar shingles, still ap-
marketing inverter solutions for house- electronics already have many of the peared to fit neatly into rows of normal
holds that are ‘battery-ready’, so that necessary technologies within their roofing tiles. Unfortunately as the tiles
when economics dictate, system owners production and marketing capabilities were not yet available to buy, Toshiba
will be able to simply add lithium-ion and the focus on ZEH and ZEB seemed representatives also demanded that PV
batteries to their existing PV systems. a natural fit. Tech refrain from photographing them,
Panasonic as well as Sharp was also sell- so we cannot show them to you.

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JAPAN

Japan to lower tariffs, cancel projects after


paying ¥2.3tr last year for FiTs
Japan is set to lower its levels of
feed-in tariff (FiT) payments once
again, while a multi-gigawatt pipeline
of unbuilt large-scale PV projects will
be “cancelled” at the beginning of
April.

On the opening day of World Smart


Energy Week, incorporating the PV
Expo show in Tokyo, Toshimitsu Fujiki, a
director at Japan’s government Ministry
of Economy, Trade and Industry (METI),
confirmed that a “new FiT system” will
be in effect from the beginning of the
new financial year, 1 April.

Image: Andy Colthorpe.


While Fujiki did not allude to how much
would now be payable for the power
generated at various scales, drops of
10% and 11% have not been uncommon
in the past couple of years, with the The opening ceremony for PV Expo in Tokyo this morning. An estimated 70,000 people attend the whole
average FiT payment currently standing World Smart Energy Week event, which also includes expos on fuel cells, batteries and other technologies.
at around ¥21 (US$0.19)/kWh. Japan’s
renewable energy FiT has primarily
fostered solar development rather than the prospect of widespread build-out forward plans to build facilities. In some
other forms of generation such as wind of more transmission lines to carry the cases it has been suspected that after
and biomass and Fujiki said that in 2016, power, emphasising the “local” dimen- taking the rights to build solar farms at
the Japanese government paid out ¥2.3 sion of the idea. FiT rates of as much as ¥42 per kilowatt,
trillion in tariffs. developers have intentionally waited for
“We have to think of better ways to equipment prices to keep dropping to
“There are great possibilities [for renew- utilise existing [transmission] lines. We maximise their profits.
able energy] but we must reduce costs,” have to study this,” Fujiki said, add-
Fujiki said, referencing recent tenders ing that METI was likely to create new Following much speculation on the
in Abu Dhabi that secured project agencies to support self-consumption fate of these several dozen gigawatts
development at just US$0.03/kWh as an policies and sector coupling. of projects, Fujiki of METI confirmed
example of what might be achieved. today in a keynote address at the expo’s
Confirmation of tenders and conference that as of 1 April, projects
METI will hold briefing seminars around cancellation of unbuilt projects unbuilt or without concrete plans to
Japan in order to educate and discuss Some 57GW of large-scale PV projects go ahead in place will lose their rights
with stakeholders how to introduce were registered for the FiT in the first to the FiT and will be cancelled. In the
more renewables into the energy mix two or three years of the scheme’s most recent edition of PV Tech Power,
while reducing the taxpayer burden. introduction after 2012, with would-be Solar Media’s technical journal for the
The METI official said repeatedly that developers taking advantage of rela- downstream solar industry, Japanese
one important aspect of this was the tively relaxed rules on what constituted industry analyst Dr Hiroshi Matsukawa
concept of “local production and lo- a project’s planning documents. of research group RTS PV estimated
cal consumption”. This could refer to that as much as half to two-thirds of that
self-consumption of PV, particularly in PV-Tech has reported extensively on 57GW pipeline is likely to be axed.
non-grid connected systems, as well as this ‘pipeline’, with many non-PV firms
local consumption of PV. Fujiki ruled out jumping into the industry and putting Fujiki also confirmed that as part of the

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JAPAN

ongoing streamlining of renewable en- Of immediate interest to the PV industry sponse and the aggregation of distrib-
ergy policy, Japan will introduce tenders is the increasing focus on residential uted energy resources into virtual power
and auctions for PV projects over 2MW energy efficiency, most notably in the plants (VPPs), which Fujiki said detailed
in size as of this year. RTS’ Matsukawa creation of Zero Energy Home (ZEH) regulations have been in the process of
also said in that PV Tech Power article standards. These net-zero energy drafting at METI since last October.
that he believed these would be annual houses would as a matter of course in-
auctions of 500MW at a time. clude PV and energy storage as well as Finally, Japan is also betting big on
double-glazed windows and other forms hydrogen fuel cells, with the country’s
Energy efficiency, Zero Energy of insulation. car manufacturers being the world’s
Homes, hydrogen and negawatts first to produce commercial hydrogen
Fujiki’s keynote address focused also Fujiki said many housebuilders had de- vehicles including Toyota’s Mirai, with
on energy efficiency measures in Japan, scribed ZEH as a difficult goal to attain, several hundred miles’ fuel range. Only
stating that huge strides have been but he said it was “critical” that such 92 hydrogen refuelling stations so far
taken in improving energy efficiency in steps were taken, with the government are in operation in Japan, but they have
factories and service industries, with expected to make all new homes net- already become commercialised, Fujiki
Japan’s economy still reliant on heavy zero energy dwellings by 2020. said. In addition, over 170,000 hydrogen
industries such as chemical processing fuel cells for households were installed
and steel. Also being put forward are “negawatt last year at private residences in Japan,
trading schemes”, including demand re- Fujiki said.

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25
PHILIPPINES

Philippines hits 903MW of solar PV under


RE law, ground-breaking on 150MW plant
The Philippines had 903MW of installed
solar PV capacity under its Renewable
Energy Law at the end of 2016, accord-
ing to Department of Energy (DOE)
figures.

The majority of this (900MW) was grid-


connected, with the rest (3.2MW) in the
self-consumption category. The figures do
not include 55 renewable energy-based
projects installed under different laws.

Overall a total of 150 grid-connected


projects and 16 self-consumption projects
have been awarded, with a total potential
capacity of nearly 4,082MW.

Credit: Conergy
Nearly 95MW PV due to start
operation in Philippines in March
The Philippines is also expected to bring
94.2MW of solar PV projects into com- The Philippines is also expected to bring 94.2MW of solar PV projects into commercial operation this month.

mercial operation this month, according


to more DOE figures.
munities - 3.82MW the end of 2017.
Of the three principal geographical divi- • SPARC Solar Power Agri-Rural Commu-
sions of the Philippines, Mindanao will not nities - 5.02MW At the ground-breaking ceremony,
see any projects commissioned although energy secretary Alfonso Cusi said:
it does have 338MW of projects going Luzon has 1,179MW of projects under “Currently, the country’s power demand
through feasibility studies or at various consideration or at various stages of is at 13,000MW and our supply is barely
stages of development. development. 14,000MW, hence we need more power
as well as reserve power.”
Project developers with capacities ex- The DOE has also released figures show-
pected to reach commercial operation in ing that as of 31 December 2016, there The release suggests that energy storage
the division of Visayas include: were 201 solar energy projects, totalling will be installed alongside the plant, but
• Cosmo Solar Energy - 5.67MW nearly 2,131MW, which have pending ap- no further details were given and the firm
• SunAsia Energy - 60MW plications across the three divisions. has not responded to requests.

Visayas has 465MW of projects under Solar Philippines breaks ground on Cusi added: “Solar power plants with
consideration or at various stages of 150MW PV plant in Talac reliable storage capability can be most
development. In related news, Filipino renewable useful in island countries like the Philip-
energy firm Solar Philippines has started pines.”
Meanwhile, expected additions at the construction on a 150MW PV plant in at
division of Luzon include: Concepcion, Tarlac, in the Philippines, ac- In an interview with PV Tech, Pete
• Next Generation Power Technology - cording to another release from the DOE. Maniego, senior policy adviser of the
18MW Institute for Climate & Sustainable Cities
• CW Marketing & Development - The project will use locally sourced mod- and of Counsel of Dime & Eviota Law,
1.675MW ules and is set to power the equivalent of has discussed the need for price-based
• SPARC Solar Powered Agri-Rural Com- 300,000 households once completed by competition in the Philippines.

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26
MALAYSIA

Edra plans to develop 50MW solar project


in Malaysia
Independent power producer Edra is
planning to develop a new 50MW solar
project in the Malaysian state of Kedah,
according to the Malaysian state news
agency, Bernama.

The project, which Edra plans to develop


by early 2018, would be led by Edra’s
wholly-owned unit, Edra Solar.

Datuk Mark Ling, president and executive


director of Edra Power, said: “The Kedah
solar plant is expected to generate ap-
proximately 80,000 MWh of electricity per
year and would be developed over 104
hectares at Bandar Kuala Ketil in Baling,

Image: Robert Scoble / Flickr


Kedah.”

Project Kedah Solar would stand as the


first of many utility-scale solar PV power
plants with an aggregate capacity of
up to 500MW to be developed by Edra
pursuant to the conditional award from The 50MW PV project would generate 80,000 MWh of electricity per year.
the Ministry of Energy, Green Technology
and Water. acquisition of the land that the project will and management team comprised mostly
be developed on. Edra plans to create of a local staff.
Edra Solar Entered into a land sales and skilled jobs for Malaysians through Project
purchase (SPA) agreement in August Kedah Solar during the construction, Once completed, the PV project is ex-
2015 with BDB Land Sdn Bhd, a subsid- operations and maintenance phases of pected to cut down on 36,000 tonnes of
iary of Bina Darulaman Bhd (BDB) for the the project — with engineers, operational carbon emissions per year.

Malaysia to auction 460MW of large-scale


solar PV
The Energy Commission of Malaysia 100MW in Sabah and Labuan in the East. last week and the deadline for submis-
(EC) has issued a Request for Proposla sions is 1 August 2017.
(RfP) document hoping to auction up to All solar plants will be connected to the
460MWac of large-scale solar capacity. grid, with power purchase agreements to Last November PV Tech caught up with
be signed with the main utilities Tenaga Catherine Ridu, chief executive officer of
Under EC’s second competitive bidding Nasional Berhad (TNB) or Sabah Electric- the Malaysia Sustainable Development
programme, it hopes to awards projects ity Sdn. Bhd. (SESB). Authority (SEDA) to discuss the policies
of 1-30MW capacity to make up a total needed to drive solar in the Southeast
of 360MW in Peninsular Malaysia and The RfP document was made available Asian country.

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MALAYSIA

ENGIE enters partnership to develop solar


in Malaysia
French energy group ENGIE has
signed a partnership agreement with
Sime Darby, a Malaysian multinational
for the co-development of solar and
integrated facilities management
services.

Malaysia is one of France’s major eco-


nomic partners in Southeast Asia.

Source: ENGIE Group


“We are pleased to form this strategic
partnership with Sime Darby, a most
respected and successful multinational
corporation with a strong local foothold.
(From left to right) Sime Darby’s Tan Sri Samsudin Osman, Scott Cameron, Malaysia’s Minister of Internation-
Our aligned vision on sustainability and al Trade and Industry Dato’ Sri Mustapa Mohamed, President of France Francois Hollande, Executive Vice
performance offers many opportunities President of ENGIE Didier Holleaux, Chairman of ENGIE Gérard Mestrallet.
to combine our strengths to positively
impact the lives of our many stakehold- energy mix, 3.5GW by 2030 (13%) and nership will enable us to significantly
ers,” said Didier Holleaux, executive 11.5GW by 2050 (34%). expand into these sectors,” said Tan Sri
vice president of ENGIE. Data Mohd Bakke Salleh, president and
“Our partnership will pave the way for group chief executive of Sime Darby.
ENGIE and Sime Darby will be provid- greater collaboration in the solar and
ing low-cost solar PV, aiding Malaysia in integrated facilities management space. In other ENGIE news, the company an-
its renewable energy goals. The country With a combination of technical exper- nounced earlier this month that it has
has a target to procure 2GW of clean tise and a deep understanding of the issued its second green bond, worth
energy by 2020 – 10% of its overall Malaysian market, we believe this part- approximately US$1.6 billion

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28
PAKISTAN

Pakistan to adopt competitive bidding for


new solar PV projects
Pakistan is set to adopt competitive
bidding for new solar PV projects, ac-
cording to an order published by the
National Electric Power Regulatory
Authority (NEPRA).

Since June last year the Authority has


been gathering views from stakeholders
on whether to shift towards a competitive
bidding methodology, hoping to move
on from the previous policy of upfront
tariffs for solar, of which there have been
three to date.

A total of eight organisations intervened

Flickr: Nicolas Raymon


on the proposals. Most believed a sudden
change in policy to reverse bidding would
hinder investment in the sector, given
that the country is in the midst of a PV
development cycle. Such bidding should
only be brought in once the current cycle
is over, they said. Another argument was Eight organisations intervened on the proposals but NEPRA has gone ahead with competitive bidding for
solar.
that creating the framework for competi-
tive auctions would take substantial time,
while interveners also pointed to several prices based on the prevailing conditions time. For this reason, it has also decided
global examples of countries reverting of the market. It has also been observed to adopt the auction model without a
back from auctions after they damaged that competitive bidding mode has been benchmark levelized tariff.
the market. the most successful and preferred mode
for arriving at fair and judicious prices and To carry out tenders, relevant agencies
NEPRA has now rejected these argu- after announcing three upfront tariffs for will prepare Request for Proposal docu-
ments, citing central government support solar PV technology, this is the appropri- ments for approval by NEPRA. State-
for the adoption of competitive auctions ate time for a logical shift towards [a] run utility National Transmission and
for renewable energy in general. competitive regime.” Despatch Company (NTDC) will offtake
power from auctioned projects.
In its order, NEPRA stated: “The Author- The authority also noted consistently im-
ity feels that the procurement of power proving efficiencies and declining prices NEPRA has recommended the Federal
under transparent competitive process is for PV equipment over recent years, a Government to notify its decision in the
most appropriate as it can fetch realistic trend expected to continue for some official Gazette.

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29
PAKISTAN

Canada MoU with Pakistani province for


1GW of solar
A Canadian government entity has
signed a memorandum of understand-
ing (MoU) with the government of
Pakistani province Khyber Pakhtunkh-
wa (KP) to cooperate on up to 1GW of
solar energy projects in the region.

The Canadian Commercial Corporation


(CCC) will help facilitate private compa-
nies to come in and contract with the KP
government to set up renewable energy

Flickr: Manalahmadkhan
projects, a source at the trade depart-
ment at the High Commission of Canada
in Pakistan told PV Tech.

Location, project numbers and sizes have


not been specified in the three-year MoU.
Foreign companies are interested by attractive upfront tariffs for solar in Pakistan.

Discussing the purpose of the agreement,


the source said: “The primary reason Canada and other regions showing high problems arise, added the source.
is that Pakistan is an energy deficient interest in investing in both the wind and
country. Because of that, they introduced solar sectors in the South Asian country. Last year Pakistan altered its solar feed-
policies which are attractive to foreign in- in tariff (FiT) rates for projects between
vestors and foreign companies that want As the CCC is a government agency 1-100MW capacity. The country also cur-
to invest in renewable energy.” which facilitates government-to-govern- rently has 300MW under construction at
ment contracts, it helps private compa- the second phase of the project Quaid-e-
He also cited “attractive” upfront tariffs nies enter countries such as Pakistan and Azam Solar Park (QASP) in Punjab.
as a reason for various companies from provides them with a form of cover if

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30
SRI LANKA

Sri Lanka to tender 100MW floating solar


plant, funds module R&D
Sri Lanka will go ahead with an inter-
national tender to set up a 100MW
floating solar plant on the Maduru Oya
Reservoir in the eastern part on the
island.

The Cabinet of Ministers approved the


programme for solar to cover around 4%
of the reservoir, the equivalent of 202
hectares.

This is the first step in a previously ap-


proved wider plan to set up floating PV
plants on various dams and reservoirs,

Credit: Twitter Maithripala Sirisena


which are governed by the Mahaweli
Authority, across Sri Lanka.

The proposal was put forward jointly


by president Maithripala Sirisena, in his
capacity as the minister of Mahaweli
development and environment, as well as
Susil Premajayantha, minister of science,
Sri Lanka president Maithripala Sirisena and the Cabinet are pushing forward with solar energy plans.
technology and research, and Ranjith
Siyambalapitiya, minister of power and
renewable energy. four university professors. The Cabinet strong interest at a high level to carry
has now also appoved an extra LKR80 mil- out large-scale solar auctions - not just
In related news, as part of goals to gen- lion (US$530,000) allocation to obtain the on reservoirs - with discussions ongoing.
erate 20% of the island’s electricity via necessary equipment, chemicals and con- Meanwhile, Spanish firm Grupo Clavijo
renewables by 2020, the Cabinet had ap- sumer goods for the training programme. recently supplied trackers to the 12.56MW
proved the implementation of a training Solar One Ceylon solar PV plant on the
programme for prototype manufacturing PV progress has been muted in Sri Lanka, island.
of solar panels last April - to be run by although PV Tech understands there is

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31
THAILAND

Thai solar slated to rejuvenate from mid-


2017 but long dry spells expected
Political changes over the last four
years and the recent death of King
Bhumibol has brought some inertia
to the Thailand market, but industry
members expect the market will return
to strong growth in the second half of
2017.

Speaking at Solar & Off-Grid Renewables


Southeast Asia in Bangkok, Franck Con-
stant, co-founder Sonnedix Group, said
it has not been easy to develop policy in
the current climate following a constitu-
tional referendum in August, which has

Credit: Tom Kenning


made foreign investors hesitate. Far less
capacity has come online compared to
the 2010/11 period.

Constant added: “The country is mourn-


The country is mourning the late king and there will be a natural slow down situation for a few months.
ing the late King and there will be a natu-
ral slow down situation for a few months. I
think that will extend into early next year.” applied for in 2010/11. He said the really had “little value” and is likely to add to
dry spot for the country was between costs.
Despite a level of “inertia”, Constant 2011 and 2015.
noted that Thailand is still leading the The next allocation out of these 800MW,
pack in Southeast Asia with more than Bennhold said there has a been a steady which is widely expected to come in the
3GW of operating solar PV installations; supply of quotas being allocated al- first quarter 2017, is also slated for around
far more than Malaysia, Indonesia, Laos though often with breaks of six months 500MW. However, the Electricity Generat-
and Myanmar, although the Philippines to one year at a time, and therefore it is ing Authority of Thailand (EGAT) has not
is catching up quickly. Regulations in the “quite likely there will be long dry spells said in what locations that capacity can be
Philippines and Thailand have been more again”. added, which will make it difficult to find
stable than other countries and they have suitable sites and conduct the required
a more level playing field in their regula- Nevertheless given the number of Thai grid studies in the short time periods
tory frameworks. and foreign companies in joint ventures available. EGAT has also historically ex-
invested in the supply chain and the cluded large parts of the country, such as
Referring to Thailand, Constant added: market reaching maturity, Bennhold was the entire northeast in the previous round.
“I believe the new ministry of finance, confident that the market will continue to
the new leadership in the government, progress. Bennhold added: “This is very un-trans-
is going to very aggressively push for parent and unpredictable process. […]
infrastructure implementation from the Athough the Energy Regulatory Com- That remains one of the key challenges.”
second half of next year. They want to do mission (ERC) has been successful in
green bonds and other interesting things streamlining the development process, Quotas and tariffs are also being adjusted
so watch this space on Thailand.” Bennhold pointed to complications in on a “relatively arbitrary” basis and fre-
Thailand’s policy making. This includes quency, making it difficult to invest in the
Florian Bennhold, managing director, the only capacity being worked on at long-term, he said.
Symbior Energy, said that the last year present, which is a total of 800MW specifi-
has actually seen an easing of inertia with cally to be developed jointly by agricul- End of subsidy
1GW installed, although this has been tural co-operatives and government On a positive note, Bennhold said: “In
mainly from postponed PPAs that were agencies. Bennhold said this specification the end, what I think is really chang- 

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32
THAILAND

ing the game right now is moving away view that fossil-based power is probably ened by several delays and uncertainties
from the subsidy. The feed-in tariff (FiT) of at a low right now and likely to increase in in 2016.
THB4.12/kWh (US$0.1157) that has been the coming years.”
announced is basically the same as the Yesterday in Bangkok, Wandee Khun-
peak, and solar generates roughly 70% of In support of both Constant and Ben- chornyakong Juljarern, chairwoman and
the time during the peak. nhold’s expectations for next year, a chief executive, SPCG, the largest solar
recent report from Bangkok-based law installer in Thailand, called for a focus on
“We are very close at least to the whole- firm Pugnatorius, forecast that 2017 will quality to keep solar sustainable across
sale rate and moving closer to the gen- be Thailand’s “second solar gold rush” Southeast Asia at an early stage.
eration rate, especially if you have some after a successful year in 2015 was damp-

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33
This report was created with articles from the
following Solar Media journalists

Conor Ryan
David Pratt
Finlay Colville
John Parnell
Tom Kenning

And
Andre E. Susanto, PT Inovasi Dinamika Pratama

4-5 JULY 2017


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