has the time finally come for solar and storage in …...4 nigel etherington, planet & company...

Has the time finally come for Solar and Storage in Ontario?

2

Roadmap 2020: Powering Canada’s Future with Solar Electricity

Canadian Solar Industries Association Has the time finally come for Solar and Storage in Ontario?

3

National trade association representing the solar energy industry throughout Canada

Since 1992, worked to develop markets and create opportunities for our Members

Solar energy technology adds value to the world in many ways,

Thus the solar industry is making the world a better place

Trade associations exist to represent the interests of their Members

CanSIA exists to maximize the benefit of the solar industry to Canada

Solar as mainstream energy source, Integral part of Canada's diversified electricity-mix

Ensure solar industry will be sustainable with no direct subsidies


4

Nigel Etherington,Planet & Company

Robert Leah,Recurrent Energy

Greg Scallen,SunEdison

Bob Waddell,Centrosolar

Utilia Amaral,SunEdison

John Rilett,ENMAX

Thomas Timmons,Gowlings

Bonnie Hiltz,GDF Suex Canada

Jon Kieran,EDF EN Canada

Ivano Labricciosa


5

Develop a supportive and stable policy and regulatory environment that recognizes thetotal value of solar electricity, including externalities.

Simplify and streamline permitting and processes for grid interconnection and meteringof solar electricity systems.

Reduce soft costs to levels consistent with global best practices.

Educate the Canadian population on the true benefits and costs of solar electricity, andempower them to take action to support and adopt solar.

Develop new and enhance existing relationships with technologies, applications andstakeholders to create synergies that enable greater solar electricity use in Canada.


6

*This survey of Ontarians about solar energy, technology and policies was fielded: between May 1 and May 8th, 2015, with 837adult Ontarians. Using a randomly-recruited, non-opt-in online panel, the margin of error would be +/- 3.39%, 19/20.


7

Decreasing Capital Costs and Cost of Capital combined with low technology deploymentrisk are driving global market:

• “The sun could be the world’s largest source of electricity by 2050, ahead of fossil fuels, wind, hydroand nuclear” - International Energy Agency (IEA), October 2014


Source: IEA PVPS Trends Report

8

Modules responsible for more than half of the total decline.


0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

2013$ USD

per W DC

Utility-Scale Solar Equipment Costs

BOS Inverter Module

Source: NREL & CanSIA Analysis

Estimated

9

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014

$bn USD

Global New Investment in Renewable Energy by Sector

Other Renewables Wind Solar

Source: Bloomberg New Energy Finance.


10

Significant declines in capital costs combined with historically low costs of capital enable:

The most competitive utility-scale solar projects to deliver electricity for$0.08/kWh USD without financial support

Now common to see power-purchase agreements for solar of $0.05/kWh to$0.06/kWh and recent reports of pricing below $0.04/kWh pricing are nowemerging

Ontario’s Large Renewable Procurement program is the first ever competitive procurementof utility-scale solar in Canada:

Price discovery may be game-changer for solar in Canada.


11

Pricing reaching new lows, drivers include manufacturing scale (e.g. giga-factories).

Reliability, flexibility, reduced complexity and network congestion.

Conservation, demand-side management and load-shifting.

Integration of renewables and losses of generation sources (nuclear, coal).


Ugly old technology being replaced with beautiful consumer products.

Poster-children like Elon Musk of Tesla will boost cachet.

12

Solar-plus-battery grid parityis fast approaching.

“Load Defection” and “GridDefection” would bedisruptive to traditional utilitybusiness models.

As this disruption is so close,and well within the 30-yeareconomic life of typical utilityassets, how should long termdecision-making adapt to thisdisruption?


Source: Rocky Mountain Institute

13

Applications are received and processed on an ongoing basis.

Draft documents under consultation until May 14.

Application window proposed for July 13.

“Bid-Down” points introduced to favour projects with most efficient cost structures

Proposal submission deadline is September 1.

LRP II RFQ expected in Q1 2016.

Phase 1 procured ~34 MW from five companies offering ancillary services.

IESO will take lessons from these new projects into Phase 2 for a further ~16 MW.


14

Consultation expected to begin in Q3 2014. CanSIA’s Ontario DG PV Task Forceworking to define best practices for program design and existing program exit-strategy.

It is expected that LRP I and II will be over-subscribed presenting an opportunity forfurther contracting in subsequent years of non-contracted projects with competitivepricing. The Long Term Energy Plan and introduction of Capacity markets will furtherinform the direction this takes.

Auction Revenues, Allowances, RECs and Offsets are all mechanisms which are usedto incent the deployment of solar technologies in other jurisdictions. CanSIA arecurrently participating in the consultations on program design which is in its early days.


15

Supply-mix planning has defined Ontario solar market since 2008, Long Term EnergyPlan consultation process expected to take place in 2015/2016 and viewed as critical.

-

1,000

2,000

3,000

4,000

5,000

6,000

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

CumulativeInstalledCapacity

(MW)

Graph: Cumulative Solar Installed Capacity in Ontario & Policy Drivers

2008 - 2016 was driven by Supply-Mix Planning (i.e. 10,700 MW).

2016 – 2020 drivenby existing microFIT,

FIT and LRP

2020 – 2025 newcommitments needed

(e.g. LTEP)


16

Today’s energy consumers (“prosumers”) seek more value than has been possibletraditionally. Empowered by technology they want to interface with grid, produce theirown electricity and soon store it too.

Continued cost declines will increase rate of prosumers adopting solar: Rate at whichcapital costs can continue to decline is slowing.

“Soft Costs” present major opportunity to maintain rate of cost decline (Constructionindustry accounting term for expense not considered direct construction cost andtypically considered to be “non-hardware”).

Deployment of storage will experience unnecessary processes, costs and barriers.

Many of the decision-makers will be common for solar and storage i.e. municipalofficials, LDCs, electrical inspectors etc.


17

The microFIT and FIT programs are expected sun-set before 2020, by that time solarembedded generation will have transitioned toward “self consumption”.

Unclear yet what those programs will look like and how they will be administered.

Valuing “time-of-use”, ancillary services and emissions reductions will be key.

• Include “revenue de-coupling” rate-design to counter impact of “load defection” onLDCs.


18

In 2004, Ontario’s supply outlook was not sufficient to meet North American reliabilitystandards. Province now in strong supply position and benefitting from decade ofinvestments:

Narrative that has been driving definition of Ontario’s electricity needs has broadenedin scope from reliability to need for greater flexibility and resilience:

Solar is ideal technology to meet these needs due to unique siting, operational, andownership characteristics compared to conventional centralized resources.

However, to maximize solar’s contributions to reliability, flexibility and resilience its roleneeds to be bolstered with further visibility, forecasting accuracy and dispatchability.

Deployment of dispatchable solar will drive storage sales.


19

Accelerated deployment of solar in Ontario has been successful:

Costs driven-down dramatically, wealth of lessons learned, now “bankable”.

Alleviation of Inherent risks to placing new technologies on the grid.

Soft Costs: Identification and elimination of unnecessary processes, costs andbarriers are essential for financial competitiveness.

Regulatory Modernization: Valuing “time-of-use”, ancillary services and emissionsreductions essential for both.

Dispatch: Storage provides solution for solar, solar deployment to drive storage sales.


20

John Gorman, CanSIA President & CEO

Email: [email protected]

Twitter: @JohnAGorman

LinkedIn: ca.linkedin.com/in/johnarthurgorman

YouTube: Search “gorman solar TedX” to watch TedTalk.

Canadian Solar Industries Association FROM PROCUREMENT TO ADOPTION

21Canadian Solar Industries Association Has the time finally come for Solar and Storage in Ontario?

has the time finally come for solar and storage in …...4 nigel etherington, planet & company...

Documents