Select Committee on Welsh Affairs Written Evidence


Written Evidence from Welsh OPTO-Electronics Forum Photovoltaics Group

A PV Solar Energy Road Map for Wales

REPORT OF THE WELSH OPTO-ELECTRONICS FORUM PHOTOVOLTAIC GROUP: JUNE 2006

SUMMARY OF RECOMMENDATIONS

  The WOF PV Group strongly recommends the following Actions in order to secure the successful future development of the PV industry in Wales.

    —  The need for government stimulation is paramount. This may be via direct investment, via regulation (eg building regulations) and via example/demonstration (ie inclusion in new public buildings).

    —  The industry should seek to fill identified gaps in the supply chain via inward investment, new start-up and spin-out companies and demonstration programs.

    —  The research infrastructure should be stimulated to ensure that Welsh PV research remains at the leading edge. This applies to all forms of research and development, including universities, industrial R&D and other organisations such as Technium and WERC.

    —  Public education and awareness should be promoted, both as a long-term strategy and in order to support any Government initiatives. To this end the Group recognises a need for developing media relations via a press officer, and also for appointment of a high-profile Welsh PV "Champion" or spokesperson.

1.  INTRODUCTION: THE GROUP

  The Welsh Opto-Electronics Forum (WOF) Photovoltaic Group was formed in recognition of the unique opportunities currently existing for the Photovoltaics (PV) industry to establish a strong base in Wales.

  PV is a rapidly growing technology industry and the Group recognises and supports the high quality of current Welsh expertise in a large number of major supply chain links.

  The Group aims to represent the industry in Wales as a whole, to facilitate building upon the existing skills base in order to strengthen the industry further, and to act as an advisory and information-disseminating body to present the overwhelming case for PV as part of an integrated energy policy.

  Members of the Group include industrial manufacturers and installers, university researchers and Government representatives at both Welsh Assembly and Local Authority level.

2.  PV TECHNOLOGY

  Photovoltaics is an attractive, clean, renewable energy source with many advantages as part of an integrated energy policy. Its suitability for integration into the built environment enables it to side-step some of the issues associated with other renewable and clean energy options.

  Photovoltaics includes a whole raft of current technologies, from the mature crystalline silicon technology, through various types of thin-film technology (amorphous silicon, compound semiconductor (GaInP/GaAs) and polyctrystalline compound semiconductor (CIGS, CdTe ), to dye-sensitised (Gratzel) cells and the newer nanocrystalline and polymer technologies. Thus there is a range of potential solutions to match various application requirements, and also a range of approaches to the important issue of reducing the cost (Cost per Watt) of PV-generated power.

  This cost is dependent upon a number of different factors, including materials costs, energy costs, yield (throughput) and conversion efficiency. For example crystalline silicon technology is currently able to obtain the fairly high conversion efficiency in production of around 18% (around half of the theoretical maximum limit), but the materials costs are high compared with thin-film technologies, and the current world shortage of silicon represents a limiting factor. Similarly thin-film GaInP/GaAs cells have high manufacturing costs which are offset by the higher achievable conversion efficiencies of 35-40% (depending upon cell design), while polycrystalline thin-film technologies with lower conversion efficiencies have potentially lower manufacturing costs. Some of the newer technologies, while currently having conversion efficiencies of only a few percent are potentially extremely cheap to produce. Clearly then, research and development is an important ongoing element of the PV industrial support structure and will undoubtedly play a vital part in informing and driving future industry success in reducing the cost per Watt to a competitive level.

  Fig 1 shows the projection of the European Photovoltaic Industry Association (EPIA) on reducing PV energy costs in Europe. The figure shows that PV is expected to achieve competitive price levels (in Northern Europe) by 2020. This projection takes into account the expected levels of government stimulation for the industry in countries such as Germany and Spain. The WOF PV Group believes that investment and support for the PV industry in Wales at the present time will ensure that Wales also has the industry and infrastructure to take advantage of what is clearly expected to become a major source of renewable energy in the future.

  Although, the short term view is that PV Solar energy is expensive compared with conventional fossil fuels, the projection is that it will become price competitive in Wales beyond 2020 as indicated in Fig. 1. The proposed strategy is to have substantial support to expand the installation programme in Wales up to 2020 so that there is the capacity for economically viable expansion beyond 2020.

Figure 1

PROJECTED REDUCTION IN PV ENERGY COSTS IN EUROPE. REPRODUCED FROM THE EUROPEAN PHOTOVOLTAIC INDUSTRY ASSOCIATION (EPIA) ROADMAP DOCUMENT1


  Other important advantages of PV as part of the energy supply structure result from its distributed nature. This makes it ideally suited as part of a strategy to ensure supply protection against terrorist threat and security of supply via diversification of production. Furthermore it reduces stresses on the grid system which can arise from large localised inputs.

3.  PV IN A GLOBAL CONTEXT

  Germany is the world's leading PV adopter and has the largest share of the global market, with Germany, Japan and the US accounting for fully three-quarters of the market at the present time2. The cost of PV is falling year on year and production increasing rapidly. In 2005 a total of 1,727 MWp of PV cells were produced, representing an increase of 45% over 2004. This is part of a steady growth trend over a 15 year period3, largely due to market introduction programmes, rural electrification programmes and materials and process technology development.

  Figure 2 shows the distribution of worldwide PV installation in 20042. The UK represents less than 5% of the 8% European (excluding Germany) share. Nevertheless an increase of around 40% per annum in the UK would generate 23% by 20234.

Figure 2

DISTRIBUTION OF WORLDWIDE PV INSTALLATION IN 20042



  Despite the small contribution of the UK to worldwide PV installation, the UK has several major manufacturers, including Sharp, the world leader with a market share of 24.8% (2005 figures).

  The EU is committed to achieving 12% (total) and 21% (electric) energy via renewable sources by 2010 in order to comply with the Kyoto Protocol. However, there exists at present no unified European PV policy. This has led to widely different approaches by the various member states. Between 2001 and 2003, PV in the E.U. doubled as a result of the highly successful German programme (accounting for 70% of installations). Installations in Spain and Austria also doubled during this period. The success of the German programme is attributable to a strong government support programme introduced in 2000 and updated in 2004, and utilising feed-in tariffs and guaranteed prices paid by utilities, as detailed in the European Photovoltaic Industry Association (EPIA) Roadmap document1.

  A total of 6,000 MWp PV capacity is forecast for the EU by 2010. New installations are expected to increase at a rate of 20-25% per annum, with research and development programmes resulting in steadily decreasing costs.

4.  THE CURRENT POSITION IN WALES

  While the potential domestic market in Wales is relatively small, the quality and range of expertise and the existing industrial supply base offers an excellent opportunity for its development as a key centre in the worldwide PV market.

  Established manufacturing expertise includes module assembly (Sharp, market leaders operating in Wrexham) and world-class III/V (compound semiconductor) production (IQE, Cardiff) together with substrate manufacturers and systems and installation companies together representing many years of successful experience.

  The PV research capability in Wales is also broadly-based and well-integrated, with particular strengths in fundamental thin-films and materials (Bangor) as well as power electronics (Swansea), energy efficient building design (Cardiff) and hydrogen energy research (Glamorgan).

  Appropriate specialist personnel are currently readily available in Wales, and the capacity exists for local training programmes to cater for an expanding requirement.

  Overall this provides many strong elements in a complete PV supply chain, and is a good basis for addressing some of the remaining identified weaknesses such as cell manufacture (particularly crystalline silicon) and quality assurance and testing.

5.  FUTURE OPPORTUNITIES FOR WALES

  The Welsh Assembly Government is committed to a sustainability agenda. Its devolved Planning function, together with the developing nature of the Welsh Energy Policy provide a unique climate for stimulated development of a strong Welsh PV industry.

    —  PV offers an opportunity to maintain a serious commitment to sustainability while mitigating some of the problems associated with other clean energy sources arising from the sensitive nature of much of the Welsh environment and countryside.

    —  Wales is geographically compact with a degree of autonomy which encourages good communications and mutual support networks within industry, within research groups and between industry and research. It is therefore well-placed to develop a complete, relatively independent multi-faceted technology industry.

    —  The domestic market is capable of responding quickly to stimulation provided by the Government via Planning or Building Regulations support (eg guidelines with respect to public buildings and/or new housing build). Because Wales has only 22 local authorities (compared with over 300 in England) there is an enhanced possibility of developing a coherent Welsh PV strategy. In Wrexham alone there are some 15,000 local authority housing properties requiring major renovations in the near future. A large-scale housing stock renovation program would provide opportunities for new PV installations in a similar way to the opportunities provided by new build, and the provision of low-cost energy throughout their lifetimes would help to offset the initial installation costs. The current need for renovation programmes is not unique to Wrexham, but exists throughout Wales as a whole.

    —  The status of the grid in some areas of Wales makes the low-power, distributed input offered by PV a more attractive option than large-scale localized input which may cause difficulties by straining the grid's local capabilities.

    —  A Government-led support programme for the PV industry in Wales would have the knock-on effect of indirectly supporting the Welsh economy as a whole, attracting private investment and providing more high-quality jobs.

  The WOF Photovoltaics group believes that a target of at least 10% of renewable energy generated via PV in Wales by the year 2020 is a realistic expectation.

  The WAG Energy Wales Route Map document5 target for renewable energy generation is 7TWh by this date. This would require a total installed PV capacity of 875MW. This is easily achievable within the present manufacturing capacity in Wales of 120MW/yr.

  875MW installed capacity is equivalent to around 437,000 houses each with small 2kW rooftop installations, or fewer if larger installations on public buildings and factories are also contributing to the total.

References:

1  European Photovoltaic Industry Association (EPIA) Roadmap. (Fig 1: Original Source: RWE Schott Solar)

2  Strategies Unlimited: Global Analysis of PV Markets & Application Forecasts.

3  Solarbuzz Solar Energy Facts: Global Performance.

4  P Maycock, Renewable Energy World, August 2005.

5  Welsh Assembly Government: Energy Wales, Route Map to a Clean, Low-Carbon and more competitive Energy future for Wales.





 
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