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SOLAR GENERATION V -
2008
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The Greenpeace/EPIA
‘Solar Generation’ Scenarios
Methodology and Assumptions
If PV is to have a promising future as a major energy
source, it must build on the experiences of those countries
that have already led the way in stimulating the solar
electricity market. In this section, we look forward to what
solar power could achieve - given the right market
conditions and an anticipated fall in costs - over the
coming two decades of the twenty-first century. As well as
projections for installed capacity and energy output, we
also make assessments of the level of investment required,
the number of jobs that would be created and the crucial
effect that an increased input from solar electricity will
have on greenhouse gas emissions (see Part Five: Solar
Benefits).
The three EPIA /Greenpeace scenarios outlined below are
based on the following core inputs:
✜ Current PV market data from reliable sources (national
governments, the International Energy Agency, PV industry)
✜ PV market development over recent years, both globally and
in specific regions
✜ National and regional market support programmes
✜ National targets for PV installations and manufacturing
capacity
✜ The potential for PV in terms of solar irradiation, the
availability of suitable roof space and the demand for
electricity in areas not connected to the grid
1. Advanced Scenario
This scenario is based on the assumption that continuing and
additional market support mechanisms will lead to a dynamic
expansion of worldwide PV installed capacity. Market support
programmes create economies of scale and PV prices will fall
faster as a result, leading to a further market push.
Although such market programmes are designed to be only a
temporary means of support, they are nonetheless crucial in
initiating a stable commercial environment. EPIA/Greenpeace
strongly believe that this scenario can be achieved if the
necessary political support is forthcoming.
2. Moderate Scenario
This scenario envisages the
development of PV against the background of a lower level of
political commitment. Over the longer term, the gap
between the Moderate and Advanced Scenarios widens
considerably. With insufficient additional global political
support, fast market deployment is difficult. Without the
potential for economies of scale, PV production costs
and prices will fall at a slower rate than in the Advanced
Scenario, resulting in a lower level of PV deployment.
3. IEA Reference Scenario
The IEA Reference Scenario is based on the projections for
PV capacity in the International Energy Agency’s latest
World Energy Outlook (WEO 2006). WEO 2006 records actual
market statistics up to 2004 and then builds its scenario on
those figures. Solar Generation updates the IEA assessment
with actual market statistics to 2006, and then uses the IEA
assumptions to project those forward. In the IEA Reference
Scenario, conventional electricity sources remain dominant
for the foreseeable future. This scenario can therefore
be regarded as a way for policy makers to see what an
unsustainable energy future would look like, compared with
Solar Generation’s Advanced Scenario.
The growth rates presented in all the scenarios represent an
average calculated from varying rates of annual growth.
The following assumptions have been employed to show the
effect of these scenarios in terms of both electricity
supply and carbon dioxide savings:
Electricity consumption
Two assumptions are made for the expected growth in
electricity demand over the first decades of the 21st
century. The ‘Reference Scenario’ for growth in global
electricity demand, against which the percentage
contribution from PV power can be judged, is extracted from
projections by the International Energy Agency (WEO 2006).
These show global demand for power increasing from 14,374
TWh in 2004 to 17,467 TWh in 2010, 22,775 TWh in 2020,
28,098 TWh in 2030 and 31,951 TWh in 2040 (extrapolated).
The ‘Alternative Scenario’ for future electricity demand is
based on the Greenpeace/European Renewable Energy Council
Energy Revolution report (January 2007), and takes into
account the extensive use of energy efficiency measures in
order to decrease final electricity consumption. This
scenario shows global demand for power increasing from
13,675 TWh in 2003 to 14,188 TWh in 2010, 16,614 TWh in
2020, 19,189 TWh in 2030 and 22,516 TWh in 2040. The PV
contribution is therefore higher under this projection.
Carbon dioxide savings
An off-grid solar system which replaces a typical diesel
unit will save about 1 kg CO2 per kilowatt hour of output.
The amount of CO2 saved by grid-connected PV systems depends
on the existing profile of electricity production in
different countries. The global average figure is taken as
0.6 kg CO2 per kilowatt-hour. Over the whole scenario
period, it has therefore been assumed that PV installations
will save on average 0.6 kg CO2 per kilowatt-hour.
The scenarios are also divided in two further ways - into
the four global market divisions (consumer applications,
grid-connected, off-grid industrial and off-grid rural), and
into the regions of the world as defined in projections of
future electricity demand made by the International Energy
Agency. These regions are OECD Europe, OECD Pacific, OECD
North America, Latin America, East Asia, South Asia, China,
the Middle East, Africa and the Transition Economies (mainly
the former Soviet Union).
Key results
The results of the Greenpeace/EPIA ‘Solar
Generation’ scenarios show clearly that, even from a
relatively low baseline, PV electricity has the potential to
make a major contribution to both future electricity supply
and the mitigation of climate change. The main figures can
be seen in Table 3.1 for the whole scenario period up to
2030, and the results for annual capacity up to 2010 only in
Table 3.2.
The Solar Generation Advanced Scenario therefore shows that
by 2030, PV systems could be generating approximately 1,800
terawatt hours of electricity around the world. This
means that enough solar power would be produced globally in
just over twenty years’ time to satisfy the current
electricity needs of 60% of the countries in OECD Europe.
Under this scenario, the global installed capacity of solar
power systems would reach 1,272 GWp by 2030. About 60% of
this would be in the grid-connected market, mainly in
industrialised countries. The total number of people by then
supplied with household electricity from a grid-connected
(including building-integrated, large-scale and roof-top)
solar system would reach approximately 776 million. In
Europe alone, there would be roughly 220 million people
receiving their household electricity supply from
grid-connected solar electricity. This calculation is based
on an average household size of 2.5 people and an average
annual electricity consumption of 3,800 kWh.
In the non-industrialised world, approximately 290 GWp of
solar capacity is expected to have been installed by 2030
for rural electrification. Here, the assumption is that, on
average, a 100 Wp stand-alone system will currently cover
the basic electricity needs of three people per dwelling.
Over time, it is expected that larger systems will be used
for rural electrification. However, system sizes in the
developing world are presently much smaller than for on-grid
applications in the developed word, and the population
density is greater. This means that up to 2.9 billion
people in developing countries would by then be using solar
electricity. This would represent a major breakthrough for
the technology from its present emerging status.
By 2040, the penetration of solar generation would be even
deeper. Assuming that overall global power consumption had
by then increased as expected, the solar contribution
would equal 20 - 28% of the world’s electricity output,
depending on which scenario is used for electricity
consumption. This would place solar power firmly on the
map as an established energy source.
Figure 3.1 illustrates the development of cumulative
installed PV capacity under the three different scenarios.
At the end of the scenario period, in 2030, the outcomes
differ considerably. The most favourable outcome is under
the Advanced Scenario, which is based on the positive growth
of PV up to 2015, highlighting the importance of political
commitment in the coming years. Adequate support for PV
during this period (see Part Six: Policy Drivers) will
therefore facilitate the achievement of the Advanced
Scenario. In particular, the early development of the
dynamic relationship between mass production and cost
reduction is vital for establishing PV as a globally
important energy source. Figure 3.2 shows the development
path for annual PV installations under the three scenarios.
Figure 3.3 illustrates the expected comparative development
of the different types of PV application. All applications
(on-grid, off-grid rural electrification, off-grid
industrial and consumer applications) are expected to
increase in absolute numbers (MWp). However, the currently
very dominant grid-connected sector, representing roughly
85% of the market, will lose share in favour of off-grid
applications. Due to its immense potential, rural
electrification in particular will experience considerable
growth.
Figures 3.4 and 3.5 show how the Solar Generation scenarios
break down in terms of the regions of the world. Annual
installations (Figure 3.4) and cumulative capacities (Figure
3.5) are presented as a proportion of the actual market
figure, depending on the scenario. In both cases, OECD
Europe is the dominant region for PV deployment, followed by
the OECD Pacific
 and OECD North America. Over time, it is
expected that other regions of the world will gain share
from the currently leading regions. By 2030, a globally
diversified PV market can be expected where regions such as
China and Africa will make a significant contribution.
Tables 3.3 and 3.5 calculate the projected market value of
PV systems up to 2030, under the Advanced and Moderate
Scenarios respectively. This shows that by the end of the
scenario period, the annual value of the PV market would
have reached 318 billion euros worldwide under the Advanced
Scenario, and 172 billion euros under the Moderate Scenario.
In order to meet the growth in demand projected in the
scenarios, companies right along the PV value chain will
need to upscale their production capacities. Tables 3.4 and
3.6 give a breakdown of the investment needed in the PV
industry up to 2010. The highest level of investment is
required for silicon production and the upscaling of thin
film production capacities. The Advanced Scenario projects a
total investment of nearly 14 billion euros in the period up
to 2010.
In the light of the ongoing discussions about the level of
government support for PV, however, it has to be pointed out
that a considerable part of industry turnover will be
reinvested in new production lines. Although in the long run
this will have a positive impact on PV prices, due to
economies of scale, in the short term reinvestment will
inevitably limit the level of achievable price reduction.
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