Welcome back to another busy week! This time, we are covering why IEA thinks the renewables will be the only energy source showing growth in spite of the COVID-19 crisis, how Germany, despite being hampered by the lockdown, managed to install 1.1 GW new solar in 2020Q1 and what Elon Musk has been tweeting that could potentially get him sued, and many more!
Your Monday Briefings is now divided into 2 sections:
- The 1st section has all the solar news related to COVID-19
- The 2nd section has solar news which has little to do with the pandemic.
SECTION 1: COVID-19 WATCH
According to the new study conducted by IEA, “Renewables are the only energy source likely to experience demand growth across the remainder of 2020 regardless of the length of lockdown or strength of recovery.”
The usual argument against the renewables is that solar and wind power are intermittent, therefore it cannot serve the customers on an energy-on-demand basis, which the nuclear and fossil fuels excel.
The above-mentioned characteristic of renewables is now a strength at the time of crisis, when the traditional energy sources are taking a hit:
- Due to the fall of demand, the power generated by coal will decrease by more than 10%.
- For the same reason, the gas usage will fall by 5%.
- Due to the restrictions imposed on land transport and air travels, the oil demand will decline by 9%
- For the same reasons stated above, global demand for biofuels is likely to decrease.
- Nuclear will also drop by 3%.
The report nonetheless has stressed the importance of the priority dispatch, which has helped the renewables to remain unfazed by the pandemic.
Source: pv magazine
The energy specialists at an European law firm, Fieldfisher, have reported that some European governments, especially, Britain, the Netherlands, Portugal, and Spain have shown signs of the recovery of its industry recently, which is followed by resumed talks regarding the corporate PPA (CPPA).
The CPPA in question could be divided into 2 categories:
- The long-term projects which are not due to be built for at least 2 years: Most of them emerged from the COVID-19 unscathed. Many companies are looking to pick up where they left off before the pandemic
- The projects that are due soon: For most projects in this category, it seems unlikely to be able to be delivered on time. It will be up to the lawyers and mediators to determine whether or not the terms of the contracts can still be applied under such unprecedented circumstances.
Many companies nevertheless are trying to resolve the issues regarding the contracts without actually getting the court involved.
Source: pv magazine
However, this endeavor is delayed, because one unnamed European lender could not provide a response due to the pandemic.
According to the Chinese PV giant’s unaudited annual financial reports, there was a roughly US$78.87 million worth of breach of banking covenants (RMB 557 million), which has caused a cross-default of approximately US$732 million (RMB 5.17 billion) of other loans. And about US$515.4 million (RMB 3.64 billion) will be due this year.
GCL-Poly’s is confident that this financial complication will be resolved. However, as the post-COVID-19 new normal is being shaped daily, the old financial conditions may no longer apply.
Source: pv magazine
SECTION 2-1: NON-COVID-19 Regional Market News
And for those of you who are sick of COVID-19 news, here is the news that is not (entirely) related to COVID-19.
According to IEA’s Snapshot of Global PV Markets, the world has collectively installed 114.5 GW of new solar power in 2019, which put the new record only slightly above 2018 and 2017.
The total cumulative installed PV capacity stood at 627 GW globally.
China’s PV market has been on the decline for 2 consecutive years. The country boasted a record high of 53.0 GW of new solar in 2017. And its new solar installation took a nose dive ever since, which stood at 30.1 GW in 2019.
However, China remained as the PV industry leader due to its impressive cumulative PV capacity (204.7 GW)
In the rest of the world, the newly installed PV capacity has reached 84.9GW, a 44% jump from 58.8 GW in 2018.
The European market led the charge in terms of the expansion in new solar power, adding roughly 21 GW in 2019. The largest European markets in 2019 were as follows (in the order of market size):
- Spain, 4.4 GW
- Germany, 3.9 GW
- Ukraine, 3.5 GW
- The Netherlands, 2.4 GW
- France, 0.9 GW
Source: IEA’s Photovoltaic Power Systems Programme
Under Ontario’s 2009 Green Energy Act, all hydropower customers, including Georgian College, will need to pay a Global Adjustment Charge. The fee is typically 60% of the total amount of the annual power bill.
Wärtsilä’s energy storage system is expected to reduce the amount of the fee.
The company has designed an energy management system called GEMS, which charges its energy storage system when the electricity price is low and discharges when the price is higher.
Similar to the rest of Canada, the winter in Ontario is long. GEMS is also flexible to adjust energy consumption according to the higher energy demand in winter.
Source: Renewable Energy Magazine
1. Polysilicon Weekly Review
This week, the price range of mono-grade polysilicon was roughly US$8,496~8,779 (RMB 60,000~62,000)/ ton. The sale price has slipped to about US$8,680 (RMB 61,300)/ ton, down 2.85% week-on-week.
The sale price of polycrystalline silicon has also slipped to roughly US$8,212 (RMB 58,000)/ ton, down 1.02% week-on-week.
The prices of polysilicon have been hitting record low for 5 weeks in a row.
Compared with 5 weeks ago, the mono-grade polysilicon has decreased 17.9%, the polycrystalline silicon 17.7%. The prices of polysilicon has been on a 3~5% weekly decline for 4 weeks. However, the decline has narrowed to 1~3% last week.
Why are the prices slipping?
The reason behind the weekly declines was the still weak demand across the globe.
Across the PV supply chain, the pressure of inventory level varies. The scheduled maintenance of the production capacity has not been done in large-scale implementation.
The relatively ample supply of polysilicon has contributed to the small price decline in polysilicon this week.
Why is the rate of price decline is slowing down?
The rate of the decline continued to contract this week.
This is in part due to the market price, which is now almost as low as the production cost of almost all the active polysilicon manufacturers. This has reduced the room for further reduction.
Another contributory factor is that some of the top-tier polysilicon manufacturers are entering the production capacity maintenance phase. This has relieved some of the pressure on the supply side, thus the narrowing decline.
According to the Silicon Industry Association, China’s polysilicon production stood at 35,700 tons in April, up 0.3% MoM, which mostly remained on a flattened trend.
However, the prices are set to increase in May
In late April, 3 manufacturers are maintaining their production capacity. 2 more manufacturers plan to follow suit in May. This will considerably affect the supply of polysilicon in May.
According to the preliminary estimate, the production will decrease by 12% MoM, which will further relieve the pressure on the market supply.
Regarding the demand, most of the postponed PV projects need to connect the grid by June 30 or risk losing their subsidy. Therefore it is estimated that the demand will recover slightly in May and June.
The recovering demand and contracting supply will create a favorable economic condition, where the price of the polysilicon will stop its downward slide and achieve stability.
Source: Silicon Industry of China Nonferrous Metals Industry Association
2.China’s Supply Chain Development
The demand of solar energy is facing certain pressure due to the pandemic.
The consequent postponement of the projects has put the growth of new solar installations under pressure.
However, as the pandemic-induced restrictions are easing, coupled with the decrease in the cost of production, the PV industry can get growth back on track.
Regarding the post-COVID-19 PV industry trends, there are 4 aspects that should demand your attention:
- The emerged value of modules: the competition among the leading system integrators will intensify. The ones with the advantages over channels and production cost will be the last one(s) standing.
- The polysilicon manufacturers with outdated production capacity will be exiting the market. The market share will be snatched up by the market leaders. The proportion of production cost occupied by polysilicon will decrease further. Therefore the buyers are more tolerant regarding the price increase.
- The market penetration of double-glass modules will be increased further. This is partially due to the price reductions of the glass, which drives the cost of production down. Plus, double-glass modules can effectively lower the cost of PV systems. The gain in double-glass module market share will drive up the sales volume of glass and POE-based encapsulant film.
- The large-size wafers will gain more market penetration gradually. As 158.75mm-wafer’s reign as the mainstream of the industry is coming to an end, the market preference is shifting to 166 mm wafers. The quoted prices of the 166 mm wafers are already lower than those of 158.75 mm.
Source: GF Securities
According to the new statistics from the Federal Network Agency (Bundesnetzagentur), 368 MW of new solar installation was installed in March, an 18 MW YoY increase.
The newly installed PV capacity of 1.1 GW in 2020Q1does not deviate much from1.27 GW in 2019Q1, which has proven the resilience of PV industry despite the impact of COVID-19.
This finding also coincided with IEA’s newest report, citing the renewables as the only energy source that is robust enough to achieve growth under a harsh economic climate induced by the pandemic.
Source: pv magazine
United Arab Emirates
The tender launched for constructing and running the 1.5 GW power plant in United Arab Emirates is awarded to the consortium of France’s EDF and China’s Jinko Power at $0.0135/kWh, which is $0.0021 lower than what France’s Total and Japan’s Marubeni offered for the 800 MW power plant in Qatar.
There are four other consortia formed by companies from China, France, Italy and Japan that have bid for the project.
The 1.5 GW solar farm is scheduled to be commercially operational in 2022Q2, which left little room for delay.
When the power plant begins its commercial operation, it will be the largest solar park in the Middle East.
Source: pv magazine
SECTION 2-1: NON-COVID-19 Company News
The company’s financial reports showed that its revenue has increased by 25.4% to 1.864 billion (2018: $1.572 billion).
Sungrow’s shipments in 2019 reached 17.1 GW, allowing the accumulative shipments to hit 100 GW as of December 2019.
The company remains as the market leader in markets like the United States, Brazil, and Chile and holds a market share of over 30% in Southeast Asia.
One of the crucial factors contributing to the growth that Sungrow is enjoying is the heavy investment in R&D.
1627 personnel assigned to R&D team and an increase in investment in R&D by 31.8% to $911.8 million in 2019, demonstrating more efforts were made in product innovations.
It is safe to say last week was hard on Elon Musk.
On Wednesday, April 29, he labeled the shelter-in-place order as “fascist” in an unhinged rant during the Tesla earnings call.
On Friday, May 1, he said he was selling all of his possessions.
In a subsequent tweet, he tweeted “Tesla stock price is too high imo”.
Then Tesla stock took a nose dive and was down more than 10%, according to Bloomberg.
Due to the lawsuit filed by SEC in 2018, Musk is not supposed to tweet about
- Tesla’s financial position or performance (that has not been published before)
- Tesla’s potential mergers or acquisitions (that have not been published before)
- Tesla’s production and sales numbers (that have not been published before)
- Tesla’s new or proposed business lines (that have not been published before)
- Tesla’s projections and forecasts (that have not been published before)
It remains unknown whether or not SEC will also bring a lawsuit against Musk this time.
German testing and certification body TÜV Rheinland has established that Trina Solar’s new 500W+ Duomax V and Tallmax V ("V series") modules can achieve a power output of 515.8W.
TÜV Rheinland has awarded the Chinese PV giant two certifications: one is IEC 61215, the other is IEC 61730.
IEC 61215 is an international standard that tests the quality of the PV modules in terms of the mechanical, electrical, climatic and safety aspects.
IEC 61730 is an international standard that tests the safety of the PV modules.
The laboratory will also test to see if electric shock, fire hazards, and personal injury caused by mechanical and environmental factors could be prevented.
Source: pv magazine
Xpeng P7 model is a super-long range, high-performance, fast-charging intelligent EV sports sedan, which incorporates many breakthroughs and firsts.
- It is the first L3 autonomy-ready production vehicle in the Chinese market. It boasts a world-beating New European Driving Cycle (NEDC).
- P7 has 706km super-long driving range
- In some configurations, the vehicle can go from 0 to 100 km/hr in 4.3 seconds.
- It is the first production model in any market worldwide powered by NVIDIA’s DRIVE AGX Xavier system-on-a-chip, delivering 30 TOPS (trillions of operations per second) performance while consuming only 30 watts of power.