Investors are seizing opportunities in the European commercial photovoltaic market
2023/10/27
In terms of utility scale photovoltaic power generation, there are three different business models. Bidding is the one that is absolutely risk-free. The second type is power purchase agreements (PPAs), which are slightly more risky, especially commercial power purchase agreements because they rely on private companies and something may happen during the 20 year agreement period, "he said. The last option may be riskier - commercial photovoltaics. But if you look at commercial photovoltaics in Germany or Spain, as well as the prospect of high prices in the wholesale market, the potential for huge profits is significantly higher than the associated risks, so this is a different investment.
Masson stated that he believes this trend is becoming increasingly active in certain European markets such as Spain and Germany. He said that this trend is also accelerating in Italy, but due to unstable solar regulations in the country, it is not obvious.
The situation in Europe may be the best currently, as wholesale prices are relatively high and foreseeable wholesale prices are also high, "he said. When the market price is between 50 and 100 euros per megawatt hour, the photovoltaic NCOE in southern Spain is about 20 euros (approximately $21.17)/MWh, which is easy. "Masson co authored an IEAPPSP report titled" Trends in Photovoltaic Application Development in 2023 ", which was recently published. The report points out the key changes that have occurred in the photovoltaic industry over the past year, including the second consecutive year of growth in commercial photovoltaic opportunities in many countries. The report states that this shift is particularly evident in mature markets affected by high electricity prices.
The design of the electricity market plays an important role in the emergence of this business model, as the market should provide short-term and long-term incentives, "the report continues. In 2022, Norway's first (commercial photovoltaic power plant) project was licensed, and 18% of Australia's nearly 20 GW of electricity generation is in the spot market. Hungary and Italy already have commercial photovoltaic systems. Experts estimate that up to half of Spain's future utility scale projects may be commercial photovoltaic
Masson also serves as the co chairman of the European Solar Manufacturing Council, a solar industry association, and believes that commercial photovoltaic sales will increase to a certain extent.
A few years ago, there was a popular curve concept in California, where the more photovoltaic energy produced at noon, the more wholesale prices would decrease, "he said. We haven't seen this happening in Europe yet, but at some point, it's highly likely to happen in Spain
Masson said that when studying international photovoltaic trends, the uneven data collection has always surprised him.
We are developing a technology that is considered mainstream, but very few countries understand the real situation in their respective countries, "he said.
For example, one of the impacts of this lack of understanding is the inappropriate solar bidding activities carried out by public utilities, Masson said, and analyzed Vietnam as an example.
I went to Vietnam to collaborate with Vietnamese operators and utility institutions, and they are considering installing 800 MW of photovoltaic power, "he said. But on the other hand, looking at some African countries, no one understands what is installed. Not at all. If you don't even know what you currently have, how should you formulate renewable energy development policies
Masson said that if all solar stakeholders, from distribution and grid operators to installers, report installed capacity, then the data may be modified.
Masson stated that policy lag also affects the deployment scope of solar photovoltaic. Compared to the installed capacity in 2022, the impact on manufacturing scale is evident.
The market could have grown significantly in 2022, "he said," but it didn't. Why? Because we are starting to touch the limits of existing policies
Social recognition and training of skilled labor are still significant obstacles to the popularization of photovoltaic technology. Masson said he believes that without "high approval from decision-makers," these challenges will not be overcome.
The energy transformation has begun to eliminate employment opportunities in the traditional energy industry on a large scale. This is normal. But we must create similar employment opportunities in the photovoltaic industry, "he said. One way to create job opportunities is to expand Europe's solar photovoltaic manufacturing capacity, which can create job opportunities, which will reassure decision-makers, "Masson said. All these political barriers or obstacles are slowing down the pace of market growth. Otherwise, our installed capacity this year will reach 400GW.
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