20
March

Utility Scale Solar farms are seeing exponential growth



The powerful economies of scale in solar PV are likely to lead to a progressive reduction in the costs to half of their present levels – enabling additional investments in grid expansion and integration technologies such as storage, connectivity, and demand-response that will increase the value of solar assets.

Owing to the low costs of solar PV, PV capacity can increase to 19,000 GW in 2050, representing almost half of the whole electricity capacity installed woldwide at that time.

Although the role of distributed generation will be important in this transition, utility scale solar PV will probably dominate the electricity generation in terms of installed capacity because of its favourable economies of scale, outweighing the savings in transmission costs brought about by decentralized microgrid installations.

global-capacty-by-category-2016-2050

Utility Scale Solar PV Plants are solar farms or solar parks that have a certain size and generate energy, supplying a utility, and not end-use consumers.

It is difficult to agree on the size of a utility scale solar facility, but we can concur that it can range from some MWs to the biggest solar farms of hundreds of MWs ever constructed.

These ground mounted solar PV systems use large areas of land, in many cases land formerly used for agricultural purposes, deserts, exhausted quarries or mines, or simply unused plots of land.

Virtually every utility scale solar facility has a Power Purchase Agreement (PPA) between a solar developer and a utility, that can provide the benefit of fixed-priced electricity during peak demand periods when electricity from fossil fuels is more expensive.

This advantage is linked to the fact that solar photovoltaic system investment costs have declined sharply in recent times, to the extent that weather forecasters and modelers have struggled to keep pace with developments over the last two decades. Solar system cost will probably continue to decline by further 50%, resulting in installed capacity costs for utility scale PV between $0.42 and $0.58/W (depending on region) by 2050, with increasing value in these assets coming from corresponding expenditures in storage and grid integration technologies.

This remarkably low capacity cost will enable solar PV to grow 65-fold from 1% of total electricity generation in 2016 to 40% in 2050, becoming the main means for electricity generation in less than two decades. The trend we envisage for utility-scale PV generation, in particular, is exponential for almost another two decades – in contrast to the annual capacity additions anticipated by the IEA’s New Policies Scenario, which are held almost constant at present levels.

global-energy-capex-by-source-2015-2050

Source: DNV-GL

 


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