66762 Utility Scale Solar Power Plants A Guide For Developers and Investors This document was written for the International Finance Corporation (IFC) by Alasdair Miller and Ben Lumby of Sgurr Energy Limited. The project was implemented in partnership with The Global Environment Facility (GEF) and the Austrian Ministry of Finance. A Guide For Developers and Investors 3 Executive Summary This guidebook is a best practice manual for the development, construction, operation and financing of utility-scale solar power plants in India. It focusses primarily on ground mounted, fixed tilt PV projects and also covers solar tracking system technology. Intended to be a practical toolkit, the guidebook includes an annex that covers Concentrated Solar Power (CSP) technology and highlights aspects of the CSP project development process that differ from the PV equivalent. It also has annexes on construction, operation and maintenance contract terms. It should be noted that, although the guidebook is focused on utility-scale, grid-connected solar projects, much of the technical content is equally relevant to off-grid solar applications. To illustrate various aspects of project development, construction and operation, a number of case studies have been included. All case studies are based on the same project: a real 5MWp, thin film plant situated in India. The following section summarises the various aspects in the process of development, operation and financing of utility scale solar power plants in India. Each topic is covered in detail in this book. This is a preliminary version of "Utility Scale Solar Power Plants" An updated version will be available on: www.ifc.org/publications/ 4 Utility Scale Solar Power Plants Solar PV Technology The applications of solar PV power systems can be split into PV modules must be mounted on a structure. This helps to four main categories: off-grid domestic; off-grid non-domestic; keep them oriented in the correct direction and provides them grid-connected distributed; and grid-connected centralised. with structural support and protection. This guidebook is focussed on grid-connected centralised applications. Mounting structures may be either fixed or tracking. Since fixed tilt mounting systems are simpler, cheaper and have The main components of a PV power plant are PV modules, lower maintenance requirements than tracking systems, they mounting (or tracking) systems, inverters, transformers and are the preferred option for countries with a nascent solar the grid connection. market and with limited indigenous manufacturers of tracking technology (such as India). Although tracking systems are Solar PV modules are made up of PV cells, which are most more expensive and more complex, they can be cost-effective commonly manufactured from silicon but other materials are in locations with a high proportion of direct irradiation. available. Cells can be based on either wafers (manufactured by cutting wafers from a solid ingot block of material) or PV modules are generally connected together in series to “thin film” deposition of material over low cost substrates. In produce strings of modules of a higher voltage. These strings general, silicon-based crystalline wafers provide high efficiency may then be connected together in parallel to produce a higher solar cells but are relatively costly to manufacture, whereas thin current DC input to the inverters. film cells provide a cheaper alternative but are less efficient. Inverters are solid state electronic devices that convert DC Since different types of PV modules have different electricity generated by the PV modules into AC electricity, characteristics (in terms of efficiency, cost, performance in low suitable for supply to the grid. In addition, inverters can also irradiation levels, degradation rate), no single type is preferable perform a range of functions to maximise the output of a PV for all projects. In general, good quality PV modules are plant. expected to have a useful life of 25 to 30 years, although their performance will steadily degrade over this period. In general, there are two main classes of inverters: central inverters and string inverters. Central inverters are connected The PV module market is dominated by a few large to a number of parallel strings of modules. String inverters manufacturers based predominantly in Europe, North America are connected to one or more series strings. While numerous and China. Selecting the correct module is of fundamental string inverters are required for a large plant, individual importance to a PV project, keeping in mind the numerous inverters are smaller and more easily maintained than a central internationally accepted standards. When assessing the quality inverter. of a module for any specific project, it is important to assess its specifications, certifications and performance record besides While central inverters remain the configuration of choice the track record of the manufacturer. for most utility-scale PV projects, both configurations have their pros and cons. Central inverters offer high reliability and ease of installation. String inverters, on the other hand, are cheaper to manufacture, simpler to maintain and can give enhanced power plant performance on some sites. A Guide For Developers and Investors 5 Solar Resource The efficiency of proposed inverters should be carefully Reliable solar resource data are essential for the development considered during the development process. While there is no of a solar PV project. While these data at a site can be defined universally accepted method for quantifying inverter efficiency, in different ways, the Global Horizontal Irradiation (the total there are a number of established methods that can help in solar energy received on a unit area of horizontal surface) is making an informed decision. Almost half of the inverter generally of most interest to developers. In particular, a high market is dominated by SMA Solar Technology AG, which long term average annual GHI is desired. has a higher market share than the combined share of the next four largest vendors. Following a global shortage of inverters There are two main sources of solar resource data: satellite in 2010, some big name players are starting to enter the solar derived data and land-based measurement. Since both sources inverter market. A key parameter is the Performance Ratio have particular merits, the choice will depend on the specific (PR) of a PV power plant, which quantifies the overall effect site. Land based site measurement can be used to calibrate of losses on the rated output. The PR, usually expressed as a resource data from other sources (satellites or meteorological percentage, can be used to compare PV systems independent stations) in order to improve accuracy and certainty. of size and solar resource. A PR varying from approximately 77% in summer to 82% in winter (with an annual average PR As solar resource is inherently intermittent, an of 80%) would not be unusual for a well-designed solar PV understanding of inter-annual variability is important. At least installation or plant, depending on the ambient conditions. 10 years of data are usually required to give the variation to a reasonable degree of confidence. It is also important to consider the capacity factor of a PV power plant. This factor (usually expressed as a percentage) In India, solar resource data are available from various is the ratio of the actual output over a period of a year to sources. These include the Indian Meteorological Department, theoretical output if the plant had operated at nominal power NASA’s Surface Meteorology and Solar Energy data set, for the entire year. The capacity factor of a fixed tilt PV plant METEONORM’s global climatological database, and satellite- in southern Spain will typically be in the region of 16%. Plants derived geospatial solar data products from the United States in India operating within a reliable grid network are expected National Renewable Energy Laboratory. These sources are of to have a similar capacity factor. varying quality and resolution. Appropriate expertise is needed to interpret the data. This apart, the “specific yield” (the total annual energy generated per kWp installed) is often used to help determine the financial value of a plant and compare operating results from different technologies and systems. 6 Utility Scale Solar Power Plants Project Development The development of a PV project can be broken down The development phase takes the project from the feasibility into the following phases: conceptual, pre-feasibility study, stage through to financial close and is likely to consist of: feasibility study, development and design. In general, each • Preparation and submission of the permit applications succeeding phase entails an increased level of expenditure but for the proposed solar PV project. reduces the risk and uncertainty in the project. In practice, the progression through these phases is not strictly linear. The • Preparation and submission of a grid connection amount of time and money committed in each phase will vary, application. depending on the priorities and risk appetite of the developer. • Revision of the design and planning permissions. A typical scope for a feasibility study would include the • Decision on contracting strategy (turnkey EPC items below (again, these are covered in more detail in the contract or multi- contract). book): • Decision on the financing approach. • Production of a detailed site plan. • Preparation of solar PV module tender documentation. • Calculation of solar resource and environmental characteristics. • Supplier selection and ranking. • Assessment of shading (horizon and nearby buildings • Preparation of construction tender documentation. and objects). • Contractor selection and ranking. • Outline layout of areas suitable for PV development. • Contract negotiations. • Assessment of technology options providing cost/ benefit for the project location: • Completion of a bankable energy yield. • Module type. • Preparation of a financial model covering the full life cycle of the plant. • Mounting system. • Completion of a project risk analysis. • Outline system design. • Environmental impact assessment. • Application for outline planning permission. • Production of a detailed project report. • Grid connection – more detailed assessment of likelihood, cost and timing. • Securing financing for the project. • Predicted energy yields. The design phase will prepare the necessary detail and documentation to enable the tendering and construction of the • Financial modelling. solar PV plant. A Guide For Developers and Investors 7 Site Selection Energy Yield Prediction Selecting a suitable site is a crucial part of developing The energy yield prediction provides the basis for a viable solar PV project. In selecting a site, the aim is to calculating project revenue. The aim is to predict the average maximise output and minimise cost. The main constraints annual energy output for the lifetime of the proposed that need to be assessed include: power plant (along with the confidence levels). The level of accuracy required will depend on the stage of development • Solar resource – Global Horizontal Irradiation, of the project. annual and inter-annual variation, impact of shading. • Local climate – flooding, high winds, snow and To estimate accurately the energy produced from a PV extreme temperatures. power plant, information is needed on the solar resource and temperature conditions of the site. Also required are the layout • Available area – area required for different module and technical specifications of the plant components. technologies, access requirements, pitch angle and minimising inter-row shading. To make life easy for project developers, a number of solar • Land use – this will impact land cost and energy yield prediction software packages are available in the environmental sensitivity. The impact of other land market. These packages use time step simulation to model the users on the site should also be considered. performance of a project over the course of a year. To ensure • Topography – flat or slightly south facing slopes are more accurate results that would satisfy a financial institution’s preferable for projects in the northern hemisphere. due diligence and make the project bankable, the analysis should be carried out by a qualified expert. Realistic allowance • Geotechnical – including consideration of groundwater, resistivity, load bearing properties, soil should be made for undermining factors such as air pollution, pH levels and seismic risk. grid downtime and electrical losses. • Geopolitical – sensitive military zones should be Annual energy yields may be expressed within a given avoided. confidence interval (for example, the P90 annual energy • Accessibility – proximity to existing roads, extent of yield prediction means the energy yield value with a 90% new roads required. probability of exceedance). Since the energy yield simulation software is heavily dependent on the input variables, • Grid connection – cost, timescales, capacity, proximity and availability. any uncertainty in the resource data gets translated into uncertainty in the yield prediction results. As the energy yield • Module soiling – including local weather, depends linearly, to a first approximation, on the plane of environmental, human and wildlife factors. array irradiance it is the uncertainty in the resource data that • Water availability – a reliable supply is required for dominates the uncertainty in the yield prediction. module cleaning. • Financial incentives – tariffs and other incentives vary between countries and regions within countries. 8 Utility Scale Solar Power Plants Plant Design The design of a PV plant involves a series of compromises The electrical design of a PV project can be split into the aimed at achieving the lowest possible levelised cost[1] of DC and AC systems. The DC system comprises the following: electricity. Choosing the correct technology (especially • Array(s) of PV modules. modules and inverters) is of central importance. Selecting a module requires assessment of a complex range of variables. • Inverters. At the very least, this assessment would include cost, power • DC cabling (module, string and main cable). output, benefits / drawbacks of technology type, quality, spectral response, performance in low light, nominal power • DC connectors (plugs and sockets). tolerance levels, degradation rate and warranty terms. • Junction boxes/combiners. The factors to consider when selecting inverters include • Disconnects/switches. compatibility with module technology, compliance with grid code and other applicable regulations, inverter-based layout, • Protection devices. reliability, system availability, serviceability, modularity, • Earthing. telemetry requirements, inverter locations, quality and cost. The AC system includes: In designing the site layout, the following aspects are important: • AC cabling. • Switchgear. • Choosing row spacing to reduce inter-row shading and associated shading losses. • Transformers. • Choosing the layout to minimise cable runs and • Substation. associated electrical losses. • Earthing and surge protection. • Allowing sufficient distance between rows to allow access for maintenance purposes. Every aspect of both the DC and AC electrical systems should be scrutinised and optimised. The potential economic • Choosing a tilt angle that optimises the annual gains from such an analysis are much larger than the cost of energy yield according to the latitude of the site and carrying it out. the annual distribution of solar resource. • Orientating the modules to face a direction that In order to achieve a high performance PV plant, the yields the maximum annual revenue from power incorporation of automatic data acquisition and monitoring production. In the northern hemisphere, this will technology is essential. This allows the yield of the plant to be usually be true south. monitored and compared with calculations made from solar irradiation data to raise warnings on a daily basis if there is a shortfall. Faults can then be detected and rectified before they have an appreciable effect on production. [1] Levelized cost is the net cost to install and operate a renewable energy system divided by its expected life-time energy output. A Guide For Developers and Investors 9 In addition, power plants typically need to provide 24-hour • Local communities. forecasts (in half hourly time steps) to the network operator. • Health and safety agencies/departments. These forecasts help network operators to ensure continuity of supply. • Electricity utilities. • Military authorities. Selection of suitable technology and optimisation of the main electrical systems is clearly vital. Alongside, Early engagement with all relevant authorities is highly detailed consideration should be given to the surrounding advisable to minimise risk and maximise the chances of infrastructure, including the mounting structures, control successful and timely implementation of the project. building, access roads and site security systems. While these systems should be relatively straightforward to design and Construction construct, errors in these systems can have a disproportionate impact on the project. The management of the construction phase of a solar PV project should be in accordance with construction Permits and Licensing management best practice. The aim should be to construct the project to the required level of quality within the time and cost Permit and licensing requirements vary, depending on deadlines. the location of the project but the key permits, licences and agreements typically required for renewable energy projects During construction, the environmental impact of the include: project as well as the health and safety issues of the workforce (and other affected people) should also be carefully managed. • Land lease contract. The IFC Performance Standards give detailed guidance on • Environmental impact assessment. these issues. Compliance with these standards can facilitate the financing of a project. • Building permit/planning consent. • Grid connection contract. Typical issues that arise during the construction of a PV project include: • Power purchase agreement. The authorities, statutory bodies and stakeholders that • Foundations not being suited to ground conditions. should be consulted also vary from country to country but will • Discovery of hazardous / contaminated substances usually include the following organisation types: during excavation. • Local and/or regional planning authority. • Incorrect orientation of modules. • Environmental agencies/departments. • Insufficient cross-bracing on mounting structures. • Archaeological agencies/departments. • Incorrect use of torque wrenches. • Civil aviation authorities (if located near an airport). • Damaging cables during construction / installation. 10 Utility Scale Solar Power Plants Operations and Maintenance • Delayed grid connection. Compared to most other power generating technologies, • Access / construction constrained by weather. PV plants have low maintenance and servicing requirements. However, suitable maintenance of a PV plant is essential to • Insufficient clearance between rows for vehicle access. optimise energy yield and maximise the life of the system. Maintenance consists of: While some of these issues appear minor, rectification of the problems they cause can be expensive. While close • Scheduled or preventative maintenance – planned in supervision of contractors during construction is important, advance and aimed to prevent faults from occurring, using the services of a suitably experienced engineer should be as well as to keep the plant operating at its optimum considered if the required expertise is not available in-house. level. • Unscheduled maintenance – carried out in response Commissioning to failures. Commissioning should prove three main criteria: Scheduled maintenance typically includes: • The power plant is structurally and electrically safe. • Module cleaning. • The power plant is sufficiently robust (structurally • Checking module connection integrity. and electrically) to operate for the specified project lifetime. • Checking junction / string combiner boxes. • The power plant operates as designed and performs • Thermographic detection of faults. as expected. • Inverter servicing. Commissioning tests are normally split into three groups: • Inspecting mechanical integrity of mounting structures. • Visual acceptance tests. These tests take place before any systems are energised and consist of a detailed • Vegetation control. visual inspection of all significant aspects of the plant. • Routine balance of plant servicing / inspection. • Pre-connection acceptance tests. These include an open circuit voltage test and short circuit current test. Common unscheduled maintenance requirements include: These tests must take place before grid connection. • Tightening cable connections that have loosened. • Post-connection acceptance test. Once the plant is connected to the grid, a DC current test should be • Replacing blown fuses. carried out. Thereafter, the performance ratio of the plant is measured and compared with the value stated • Repairing lightning damage. in the contract. An availability test, usually over a period of 5 days, should also be carried out. • Repairing equipment damaged by intruders or during module cleaning. • Rectifying supervisory control and data acquisition (SCADA) faults. A Guide For Developers and Investors 11 • Repairing mounting structure faults. MWp for solar PV power projects commissioned during fiscal years 2010/11 and 2011/12. The CERC benchmark also gives • Rectifying tracking system faults. a breakdown of the various cost elements that can be used by Careful consideration should be given to selecting an developers for planning or comparison purposes. operation and maintenance (O&M) contractor and drafting the O&M contract to ensure that the performance of the plant The financial benefits and drawbacks to the developer is optimised. After the project is commissioned, it is normal should be explored in detail through the development of a for the EPC contractor to guarantee the performance ratio and full financial model. This model should include the following the O&M contractor to confirm the availability and, ideally, inputs: the performance ratio. • Capital costs – these should be broken down as far as possible. Initially, the CERC assumption can be Economics and Financial used but quoted prices should be included when Modeling possible. The development of solar PV projects can bring a range of • Operations and maintenance costs – in addition to the predicted O&M contract price, operational economic costs and benefits at the local and national levels. expenditure will include comprehensive insurance, Economic benefits can include: administration costs, salaries and labour wages. • Job creation. • Annual energy yield – as accurate an estimate as is available at the time. • Use of barren land. • Energy price – this can be fixed or variable and will • Avoidance of carbon dioxide emissions. depend on the location of the project as well as the tariff under which it has been developed. • Increased energy security. • Reduction of dependence on imports. • Certified Emission Reductions – under the Clean Development Mechanism, qualifying Indian solar • Increased tax revenue. projects may generate Certified Emission Reductions, which can then be sold. However, this revenue is An awareness of the possible economic benefits and costs difficult to predict. will aid developers and investors in making the case for • Financing assumptions – including proportion of developing solar energy projects to local communities and debt and equity, interest rates and debt terms. government bodies. • Sensitivity analysis – sensitivity of the energy price to changes in the various input parameters should be India’s Central Electricity Regulatory Commission (CERC) assessed. has produced a benchmark capital cost of INR 169 million/ 12 Utility Scale Solar Power Plants Financing PV Projects Solar PV projects are generally financed on a project finance In Europe, it is quite normal to see the equity partners and basis. As such, the equity partners and project finance partners developers form a special purpose vehicle (SPV) to develop the typically conduct an evaluation of the project covering the project. The equity component is typically around 15-20% of legal aspects, permits, contracts (EPC and O&M), and the total project investment cost. The debt portion—usually specific technical issues prior to achieving financial closure. provided by an investment bank offering project finance The project evaluations (due diligence) identify the risks and or leasing finance—is typically 80-85% of the total project methods of mitigating them prior to investment. investment cost. There are typically three main due diligence evaluations: Despite the recent turmoil in the international credit markets, many financial institutions are willing to provide long • Legal due diligence – assessing the permits and term finance for the solar energy sector. Individual projects contracts (EPC and O&M). from smaller developers may receive financing with a loan to value (LTV) ratio of 80%, whereas portfolios of solar power • Insurance due diligence – assessing the adequacy of the insurance policies and gaps in cover. projects from experienced developers may be financed with a LTV ratio of 85%. Typical terms of the project finance • Technical due diligence – assessing technical aspects loan are approximately 18 years. In India, a debt-equity split of the permits and contracts. These include: of 75:25 is taken as standard and the debt term is typically • Sizing of the PV plant. around 14 years. • Layout of the PV modules, mounting and/or At present, the insurance industry has not standardised the trackers, and inverters. insurance products for PV projects or components. However, • Electrical design layout and sizing. an increasing demand for PV insurance is expected to usher in standardisation. In general, while large PV systems require • Technology review of major components liability and property insurance, many developers may also opt (modules/inverters/mounting or trackers). to add policies such as environmental risk insurance. • Energy yield assessments. • Contract assessments (EPC, O&M, grid connection, power purchase and Feed-in Tariff ( FiT) regulations). • Financial model assumptions. A Guide For Developers and Investors 13 Conclusion Solar power is becoming a widely accepted tech- nology. India is well-placed to benefit from the suc- cessful development of a solar energy industry. It is hoped that this guidebook will encourage Indian project developers and financiers to adopt industry best practices in the development, construction, operation and financing of solar projects. 14 Utility Scale Solar Power Plants Contents 1 INTRODUCTION���������������������������������������������������������������������������������������������������������������������� 23 2 SOLAR PV TECHNOLOGY�������������������������������������������������������������������������������������������������������� 24 2.1 Applications of Solar PV����������������������������������������������������������������������������������������������������������������� 24 2.2 Overview of Ground Mounted PV Power Plant���������������������������������������������������������������������������� 24 2.3 Solar PV Modules����������������������������������������������������������������������������������������������������������������������������� 24 2.4 Mounting and Tracking Systems���������������������������������������������������������������������������������������������������� 31 2.5 Inverters������������������������������������������������������������������������������������������������������������������������������������������� 34 2.6 Quantifying Plant Performance����������������������������������������������������������������������������������������������������� 39 2.7 Solar PV Technology Conclusions��������������������������������������������������������������������������������������������������� 41 3 THE SOLAR RESOURCE� ����������������������������������������������������������������������������������������������������������� 42 3.1 Quantifying the Resource��������������������������������������������������������������������������������������������������������������� 42 3.2 Solar Resource Assessment������������������������������������������������������������������������������������������������������������� 42 3.3 Variability in Solar Irradiation�������������������������������������������������������������������������������������������������������� 44 3.4 Indian Solar Resource���������������������������������������������������������������������������������������������������������������������� 44 4 PROJECT DEVELOPMENT�������������������������������������������������������������������������������������������������������� 50 4.1 Overview of Project Phases������������������������������������������������������������������������������������������������������������� 50 4.2 Concept�������������������������������������������������������������������������������������������������������������������������������������������� 50 4.3 Pre-Feasibility Study������������������������������������������������������������������������������������������������������������������������ 50 4.4 Feasibility Study������������������������������������������������������������������������������������������������������������������������������� 51 4.5 Development����������������������������������������������������������������������������������������������������������������������������������� 52 4.6 Detailed Design������������������������������������������������������������������������������������������������������������������������������� 55 5 SITE SELECTION���������������������������������������������������������������������������������������������������������������������� 55 5.1 Introduction������������������������������������������������������������������������������������������������������������������������������������� 55 5.2 Site Selection Constraints��������������������������������������������������������������������������������������������������������������� 56 6 ENERGY YIELD PREDICTION� ��������������������������������������������������������������������������������������������������� 60 6.1 Irradiation on Module Plane����������������������������������������������������������������������������������������������������������� 60 6.2 Performance Modelling������������������������������������������������������������������������������������������������������������������ 61 6.3 Energy Yield Prediction Results������������������������������������������������������������������������������������������������������ 61 6.4 Uncertainty in the Energy Yield Prediction����������������������������������������������������������������������������������� 61 A Guide For Developers and Investors 15 Contents 7 PLANT DESIGN������������������������������������������������������������������������������������������������������������������������ 68 7.1 Technology Selection����������������������������������������������������������������������������������������������������������������������� 68 7.2 Layout and Shading������������������������������������������������������������������������������������������������������������������������� 74 7.3 Electrical Design������������������������������������������������������������������������������������������������������������������������������� 77 7.4 Infrastructure����������������������������������������������������������������������������������������������������������������������������������� 92 7.5 Site Security�������������������������������������������������������������������������������������������������������������������������������������� 93 7.6 Monitoring and Forecasting����������������������������������������������������������������������������������������������������������� 94 7.7 Optimising System Design��������������������������������������������������������������������������������������������������������������� 98 7.8 Design Documentation Requirements����������������������������������������������������������������������������������������� 100 7.9 Plant Design Conclusions�������������������������������������������������������������������������������������������������������������� 102 8 PERMITS AND LICENSING����������������������������������������������������������������������������������������������������� 105 8.1 Permitting, Licensing and Regulatory Requirements – General������������������������������������������������ 105 8.2 IFC Performance Standards On Social And Environmental Sustainability�������������������������������� 105 8.3 Permitting, Licensing and Regulatory Requirements – India����������������������������������������������������� 106 9 CONSTRUCTION�������������������������������������������������������������������������������������������������������������������� 110 9.1 Introduction������������������������������������������������������������������������������������������������������������������������������������110 9.2 Interface Management������������������������������������������������������������������������������������������������������������������110 9.3 Programme and Scheduling����������������������������������������������������������������������������������������������������������110 9.4 Cost Management��������������������������������������������������������������������������������������������������������������������������113 9.5 Contractor Warranties�������������������������������������������������������������������������������������������������������������������115 9.6 Quality Management���������������������������������������������������������������������������������������������������������������������116 9.7 Environmental Management���������������������������������������������������������������������������������������������������������116 9.8 Health and Safety Management���������������������������������������������������������������������������������������������������117 9.9 Specific Solar PV Construction Issues��������������������������������������������������������������������������������������������117 9.10 Construction Supervision�������������������������������������������������������������������������������������������������������������119 10 COMMISSIONING���������������������������������������������������������������������������������������������������������������� 122 10.1 General Recommendations��������������������������������������������������������������������������������������������������������� 123 10.2 Pre-Connection Acceptance Testing������������������������������������������������������������������������������������������ 123 10.3 Grid Connection�������������������������������������������������������������������������������������������������������������������������� 123 10.4 Post Connection Acceptance Testing����������������������������������������������������������������������������������������� 124 10.5 Provisional Acceptance��������������������������������������������������������������������������������������������������������������� 124 10.6 Handover Documentation���������������������������������������������������������������������������������������������������������� 125 16 Utility Scale Solar Power Plants Contents 11 OPERATION AND MAINTENANCE��������������������������������������������������������������������������������������� 126 11.1 Scheduled/Preventative Maintenance���������������������������������������������������������������������������������������� 126 11.2 Unscheduled Maintenance��������������������������������������������������������������������������������������������������������� 128 11.3 Spares�������������������������������������������������������������������������������������������������������������������������������������������� 129 11.4 Performance Monitoring, Evaluation and Optimisation���������������������������������������������������������� 129 11.5 Contracts�������������������������������������������������������������������������������������������������������������������������������������� 129 11.6 Operations and Maintenance Conclusions�������������������������������������������������������������������������������� 133 12 ECONOMICS AND FINANCIAL MODEL�������������������������������������������������������������������������������� 134 12.1 Economic Benefits and Costs������������������������������������������������������������������������������������������������������ 134 12.2 Central Electricity Regulatory Commission (CERC) Cost Benchmarks�������������������������������������� 136 12.3 Financial Model���������������������������������������������������������������������������������������������������������������������������� 137 13 FINANCING PV PROJECTS� ��������������������������������������������������������������������������������������������������� 144 13.1 Introduction��������������������������������������������������������������������������������������������������������������������������������� 144 13.2 Project Financing������������������������������������������������������������������������������������������������������������������������� 144 13.3 Risks���������������������������������������������������������������������������������������������������������������������������������������������� 146 13.4 Insurance�������������������������������������������������������������������������������������������������������������������������������������� 149 14 CONCLUSION���������������������������������������������������������������������������������������������������������������������� 150 Appendix A – Concentrated Solar Power 1 INTRODUCTION�������������������������������������������������������������������������������������������������������������������� 151 2 Installed CSP Capacity���������������������������������������������������������������������������������������������������������� 152 3 THE SOLAR RESOURCE� ��������������������������������������������������������������������������������������������������������� 152 4 Review of CSP Technologies � ������������������������������������������������������������������������������������������������ 152 4.1 Overview of Concentrating Solar Thermal Technologies����������������������������������������������������������� 154 4.1.1 Uptake and Track Record������������������������������������������������������������������������������������������������������������ 156 4.1.2 CSP Cost Trends��������������������������������������������������������������������������������������������������������������������������� 156 4.1.3 Summary Comparison���������������������������������������������������������������������������������������������������������������� 158 4.2 Parabolic Trough Concentrators��������������������������������������������������������������������������������������������������� 158 4.2.1 Reflector�������������������������������������������������������������������������������������������������������������������������������������� 160 4.2.2 Receiver Tube������������������������������������������������������������������������������������������������������������������������������ 161 4.2.3 Heat Transfer Fluid��������������������������������������������������������������������������������������������������������������������� 161 4.2.4 Base Frame, Tracking System and Connecting Elements�������������������������������������������������������� 162 A Guide For Developers and Investors 17 Contents 4.2.5 Examples from Industry������������������������������������������������������������������������������������������������������������� 162 4.2.6 Losses������������������������������������������������������������������������������������������������������������������������������������������� 163 4.2.7 Costs�������������������������������������������������������������������������������������������������������������������������������������������� 164 4.2.8 Conclusions��������������������������������������������������������������������������������������������������������������������������������� 165 4.3 Power Tower���������������������������������������������������������������������������������������������������������������������������������� 166 4.3.1 Heliostat and the Tracking and Control Mechanisms�������������������������������������������������������������� 166 4.3.2 Receiver, Heat Transfer Medium and Tower���������������������������������������������������������������������������� 167 4.3.3 Examples in Industry������������������������������������������������������������������������������������������������������������������ 167 4.3.4 Conclusions��������������������������������������������������������������������������������������������������������������������������������� 168 4.4 Parabolic Dish�������������������������������������������������������������������������������������������������������������������������������� 169 4.4.1 Stirling Engines��������������������������������������������������������������������������������������������������������������������������� 169 4.4.2 Conclusions��������������������������������������������������������������������������������������������������������������������������������� 170 4.5 Power Block����������������������������������������������������������������������������������������������������������������������������������� 170 4.6 Energy Storage and Supplementary Heating������������������������������������������������������������������������������ 171 4.6.1 Overview������������������������������������������������������������������������������������������������������������������������������������� 171 4.6.2 Storage Medium (Including Molten Salts)�������������������������������������������������������������������������������� 172 4.6.3 Supplementary Heating (Use of Natural Gas or LPG)�������������������������������������������������������������� 172 4.6.4 Costs�������������������������������������������������������������������������������������������������������������������������������������������� 172 4.6.5 Conclusions��������������������������������������������������������������������������������������������������������������������������������� 173 4.7 Cooling and Water Consumption������������������������������������������������������������������������������������������������� 173 4.7.1 Cooling Options�������������������������������������������������������������������������������������������������������������������������� 173 4.7.2 Water Consumption��������������������������������������������������������������������������������������������������������������������174 4.8 Integrated Solar Combined Cycle������������������������������������������������������������������������������������������������� 175 4.9 Concentrated Photovoltaic (CPV)������������������������������������������������������������������������������������������������� 176 4.9.1 Manufacturers and Examples from Industry���������������������������������������������������������������������������� 176 4.9.2 CPV Advantages and Disadvantages���������������������������������������������������������������������������������������� 177 4.10 Linear Fresnel Reflector��������������������������������������������������������������������������������������������������������������� 177 4.10.1 Applications and Examples������������������������������������������������������������������������������������������������������ 177 4.10.2 Reflector and Structure������������������������������������������������������������������������������������������������������������ 178 4.10.3 Receiver and Heat Transfer������������������������������������������������������������������������������������������������������ 179 4.10.4 Conclusions�������������������������������������������������������������������������������������������������������������������������������� 179 18 Utility Scale Solar Power Plants Contents 5 Site Selection� ����������������������������������������������������������������������������������������������������������������������� 180 6 Energy Yield Prediction � ������������������������������������������������������������������������������������������������������� 180 6.1 Site Conditions and Data Measurements������������������������������������������������������������������������������������ 180 6.2 Technology Characteristics����������������������������������������������������������������������������������������������������������� 181 6.3 Energy Yield Modelling���������������������������������������������������������������������������������������������������������������� 181 7 Project Implementation � ������������������������������������������������������������������������������������������������������� 182 7.1 Overview����������������������������������������������������������������������������������������������������������������������������������������� 182 7.2 Design��������������������������������������������������������������������������������������������������������������������������������������������� 182 7.2.1 Project Size and Land Area�������������������������������������������������������������������������������������������������������� 182 7.2.2 Load Matching Generation�������������������������������������������������������������������������������������������������������� 182 7.2.3 Solar Multiple������������������������������������������������������������������������������������������������������������������������������ 182 7.2.4 Capacity Factor�������������������������������������������������������������������������������������������������������������������������� 182 7.2.5 Grade of Heat����������������������������������������������������������������������������������������������������������������������������� 183 7.3 Development���������������������������������������������������������������������������������������������������������������������������������� 183 7.4 Engineering, Procurement and Construction������������������������������������������������������������������������������ 184 7.5 Uncertainties and Risks����������������������������������������������������������������������������������������������������������������� 184 7.5.1 Achieving Performance Improvements������������������������������������������������������������������������������������� 184 7.5.2 Realising Learning Rate Effects������������������������������������������������������������������������������������������������� 184 7.5.3 Supply Chain Competition��������������������������������������������������������������������������������������������������������� 185 7.5.4 Short Term Cost Uncertainties��������������������������������������������������������������������������������������������������� 185 8 Conclusion���������������������������������������������������������������������������������������������������������������������������� 185 Appendix A – Concentrated Solar Power������������������������������������������������������������������������������������������������� 151 Appendix B – AC Benchmarks�������������������������������������������������������������������������������������������������������������������� 186 Appendix C – EPC Contract Model Heads of Terms��������������������������������������������������������������������������������� 188 Appendix D – O&M Contract Model Heads of Terms������������������������������������������������������������������������������ 195 A Guide For Developers and Investors 19 Contents LIST OF FIGURES AND TABLES FIGURES Figure 1: Overview of Solar PV Power Plant���������������������������������������������������������������������������������������� 25 Figure 2 (a): PV Technology Classes������������������������������������������������������������������������������������������������������ 26 Figure 2 (b): Development of Research Cell Efficiencies�������������������������������������������������������������������� 30 Figure 3: Effect of Tilt on Solar Energy Capture��������������������������������������������������������������������������������� 31 Figure 4: Benefit of Dual Axis Tracking System����������������������������������������������������������������������������������� 32 Figure 5: An Example of a Tracking PV Plant�������������������������������������������������������������������������������������� 33 Figure 6: PV System Configurations����������������������������������������������������������������������������������������������������� 35 Figure 7: Transformer and Transformerless Inverter Schematic��������������������������������������������������������� 36 Figure 8: Efficiency Curves of Low, Medium and High Efficiency Inverters as Functions of the Input Power to Inverter Rated Capacity Ratios������������������������������������ 37 Figure 9: Inverter Manufacturer Market Share 2009�������������������������������������������������������������������������� 39 Figure 10: Annual Average Global Horizontal Irradiation����������������������������������������������������������������� 43 Figure 11: Example Pyranometer Measuring GHI (Image courtesy: Kipp & Zonen)������������������������� 43 Figure 12: Annual Average Daily Global Horizontal Irradiation for India at 40-km Resolution.���� 45 Figure 13: Annual Mean Horizontal Solar Irradiation for Three Cities in India�������������������������������� 46 Figure 14: Monthly Diffuse and Direct Solar Irradiation in Chennai, India�������������������������������������� 47 Figure 15: Large Scale PV Plant������������������������������������������������������������������������������������������������������������� 57 Figure 16: Uncertainty in Energy Yield Prediction������������������������������������������������������������������������������ 65 Figure 17: Sun-path Diagram for Chennai, India��������������������������������������������������������������������������������� 75 Figure 18: Shading Angle Diagram (Image courtesy of Schletter GmbH)����������������������������������������� 76 Figure 19: Voltage and Power Dependency Graphs of Inverter Efficiency��������������������������������������� 79 Figure 20: PV Array Showing String Cables����������������������������������������������������������������������������������������� 82 Figure 21: Typical Transformer Locations and Voltage Levels in a Solar Plant where Export to Grid is at HV�������������������������������������������������������������������������������������������������������� 89 Figure 22: PV System Monitoring Schematic��������������������������������������������������������������������������������������� 95 Figure 23: Components of a Forecasting System�������������������������������������������������������������������������������� 97 Figure 24: Spacing Between Module Rows����������������������������������������������������������������������������������������119 Figure 25: Solar Panel Covered with Dust������������������������������������������������������������������������������������������ 127 Figure 26: Benchmark Solar PV Plant Cost Breakdown according to CERC������������������������������������� 136 20 Utility Scale Solar Power Plants Contents FIGURES Appendix A – Concentrated Solar Power Figure 1: Average Daily Direct Normal Solar Irradiation for Selected Asian Countries (kWh/m2 /day)���������������������������������������������������������������������������������������������������� 153 Figure 2: Ideal Representation of a Concentrating Solar Power System����������������������������������������� 154 Figure 3: Solar Thermal Concentrator Types������������������������������������������������������������������������������������� 155 Figure 4: Typical CSP Power Plant Schematic (Parabolic Trough with Storage)������������������������������ 155 Figure 5: Implementation of CSP Technologies��������������������������������������������������������������������������������� 157 Figure 6: Generating Cost for Recently Completed and Under Construction CSP Projects����������� 157 Figure 7: An Example of a Parabolic Trough Concentrator�������������������������������������������������������������� 160 Figure 8: An Example of a Parabolic Concentrator Solar Plant�������������������������������������������������������� 161 Figure 9: Component Cost as a Percentage of Overall Plant Cost��������������������������������������������������� 163 Figure 10: Installed Cost of a Parabolic Trough Plant with Storage������������������������������������������������ 164 Figure 11: Generating Cost of a Parabolic Trough Plant������������������������������������������������������������������� 165 Figure 12: An Example of Solar Power Tower Technology��������������������������������������������������������������� 167 Figure 13: An Example of a Parabolic Dish System��������������������������������������������������������������������������� 169 Figure 14: Implementation of Energy Storage in CSP Plants������������������������������������������������������������ 171 Figure 15: ISCC Plant Schematic���������������������������������������������������������������������������������������������������������� 175 Figure 16: Illustration of Typical CPV Concentrating Mechanism���������������������������������������������������� 177 Figure 17: Example of SolFocus CPV Installation������������������������������������������������������������������������������� 177 Figure 18: Kimberlina solar thermal energy plant, installed by AREVA Solar (USA)���������������������� 178 A Guide For Developers and Investors 21 Contents TABLES Table 1: Characteristics of Various PV technology classes������������������������������������������������������������������ 28 Table 2: PV Module Standards�������������������������������������������������������������������������������������������������������������� 29 Table 3: Indicative List of Inverter-related Standards������������������������������������������������������������������������� 38 Table 4: Inter-Annual Variation in Solar Resource From Analysis of NASA SSE�������������������������������� 44 Table 5: Losses in a PV Power Plant������������������������������������������������������������������������������������������������������ 62 Table 6: Comparison of Module Technical Specifications at STC������������������������������������������������������� 69 Table 7: Inverter Selection Criteria������������������������������������������������������������������������������������������������������� 70 Table 8: Inverter Specification�������������������������������������������������������������������������������������������������������������� 73 Table 9: Definition of Ingress Protection (IP) Ratings������������������������������������������������������������������������� 83 Table 10: Performance Optimisation Strategies���������������������������������������������������������������������������������� 98 Table 11: Annotated Wiring Diagram Requirements������������������������������������������������������������������������ 101 Table 12: Solar PV Project Interfaces���������������������������������������������������������������������������������������������������111 Table 13: Typical EPC Payment Schedule���������������������������������������������������������������������������������������������114 Table 14: Warranty Types and Requirements�������������������������������������������������������������������������������������115 Table 15: Benchmark Costs������������������������������������������������������������������������������������������������������������������ 137 Appendix A – Concentrated Solar Power Table 1: CSP Installed Capacity (MW)������������������������������������������������������������������������������������������������� 156 Table 2: Comparison of Solar Thermal Concentrating Technologies����������������������������������������������� 159 Table 3: Parabolic Trough Reference Plant Characteristic���������������������������������������������������������������� 164 Table 4: Condenser Cooling Options���������������������������������������������������������������������������������������������������174 Table 5: Water Requirements for Different CSP Plant Types������������������������������������������������������������ 175 Table 6: Examples of ISCC Plants�������������������������������������������������������������������������������������������������������� 176 Table 7: Load Matching Options��������������������������������������������������������������������������������������������������������� 183 Appendix B – AC Benchmarks Table 1: Cable Specification���������������������������������������������������������������������������������������������������������������� 186 Table 2: Switchgear Specification������������������������������������������������������������������������������������������������������� 186 Table 3: Transformer Specification����������������������������������������������������������������������������������������������������� 187 Appendix C – EPC Contract Model Heads of Terms Table 1 – Milestone Payments and Transfer of Title������������������������������������������������������������������������� 191 22 Utility Scale Solar Power Plants List of abbreviations °C Degrees Centigrade CPV Concentrating HV High Voltage Tracking Photovoltaic A Amp IFC International Finance MTBF Mean Times Between CSP Concentrated Solar Corporation Failures AC Alternating Current Power IEC International NAPCC National Action Plan AOD Aerosol Optical Depth DC Direct Current Electrotechnical for Climate Change Commission a-Si Amorphous Silicon DIN Deutsches Institut für NREL National Renewable Normung IP International Energy Laboratory CB Circuit Breaker Protection Rating or DNI Direct Normal Internet Protocol NVVN NTPC Vidhyut Vyapar CDM Clean Development Irradiation Nigam (NVVN) Mechanism IRR Internal Rate of Return DSCR Debt Service Coverage O&M Operations and c-Si Crystalline Silicon Ratio ISC Short-Circuit Current Maintenance CCGT Combined Cycle Gas EIA Environmental Impact JNNSM Jawaharlal Nehru PPA Power Purchase Turbine Assessment National Solar Mission Agreement CdTe Cadmium Telluride EN European Norm kWh Kilowatt Hour PR Performance Ratio CE Conformité EPC Engineer Procure LTV Loan to Value PV Photovoltaic Européenne Construct LV Low Voltage REC Renewable Energy CER Certified Emission FiT Feed-in Tariff Certificate Reduction MET Meteorological GHI Global Horizontal RPO Renewable Purchase CERC Central Electricity MNRE Ministry of Renewable Irradiation Obligation Regulatory Energy Commission GSM Global System SCADA Supervisory Control for Mobile MPP Maximum Power Point and Data Acquisition CIGS Copper Indium Communications (Gallium) Di-Selenide MPPT Maximum Power Point A Guide For Developers and Investors 23 1. INTRODUCTION The objective of this guidebook is to communicate how to successfully finance, develop, construct and operate a utility scale PV power plant. Throughout the guide, a number of case studies have been included to illustrate specific aspects of the development and construction of solar PV projects in India. These case studies are based on a real solar PV project of 5 MWp capacity located in India. While the studies are based on this one specific project, many of the issues addressed are relevant to other locations and many of the challenges faced by this project will be common across solar power plant projects in India. This plant was the first of its kind on this scale in India and served as a demonstration plant. It is in this context that the case studies should be read. The layout design recommendations assume the plant is located in the northern hemisphere, although the concepts may be extended to southern hemisphere locations. Annex A gives an overview of CSP technology and highlights key differences between the PV and CSP project development processes. Other appendices provide technical benchmarks for AC equipment and heads of terms for EPC and O&M contracts. The guidebook may also be read in conjunction with the Indian market analysis report[2]. [2] IFC Market Analysis on Solar Power Generation in India (SgurrEnergy Limited). Case Studies The case studies will highlight a wide range of issues and lessons learned from the development and construction of the 5 MW plant in Tamil Nadu, India. However, it should be noted that many of these issues (e.g. the losses to be applied in an energy yield prediction or the importance of a degree of adjustability in a supporting structure) come down to the same fundamental point: it is essential to get suitable expertise in the project team. This does not only apply to technical expertise but also to financial, legal and other relevant fields. It can also be achieved in a variety of ways: e.g. hiring staff, using consultants or partnering with other organisations. Issues and lessons described in these case studies will inform the actions of other developers and help promote good practice in the industry to ensure that best practices can be followed to support project financing in this sector. 24 Utility Scale Solar Power Plants 2. SOLAR PV TECHNOLOGY This section of the guidebook discusses PV applications, onto the semiconductor PV cells generates electron module technologies, mounting systems, inverters, monitoring movement. The output from a solar PV cell is direct and forecasting techniques. It provides an overview of current current (DC) electricity. A PV power plant contains commercially available technologies used in utility scale many cells connected together in modules and many modules connected together in strings[3] to produce solar PV projects. The purpose is to provide a framework the required DC power output. of understanding for developers and investors before they commit to a specific technology. • Module mounting (or tracking) systems – These allow PV modules to be securely attached to the ground at a fixed tilt angle, or on sun-tracking frames. 2.1  Applications of Solar PV • Inverters – These are required to convert the DC There are four primary applications for PV power systems: electricity to alternating current (AC) for connection to the utility grid. Many modules in series strings and • Off-grid domestic – Providing electricity to parallel strings are connected to the inverters. households and villages that are not connected to the utility electricity network (the “grid”). • Step-up transformers – The output from the inverters generally requires a further step-up in voltage • Off-grid non-domestic – Providing electricity to reach the AC grid voltage level. The step-up for a wide range of applications such as transformer takes the output from the inverters to the telecommunication, water pumping and navigational required grid voltage (for example 25 kV, 33 kV, 38 aids. kV, 110 kV depending on the grid connection point and requirements). • Grid-connected distributed PV – Providing electricity to a specific grid-connected customer. • The grid connection interface – This is where the electricity is exported into the grid network. The • Grid-connected centralised PV – Providing substation will also have the required grid interface centralised power generation for the supply of bulk switchgear such as circuit breakers and disconnects for power into the grid. protection and isolation of the PV power plant as well as generation and supply metering equipment. The The focus of this guidebook is on grid-connected centralised substation and metering point are often external to the PV power plants. However much of the guidebook is also PV power plant boundary and are typically located on relevant to other applications. the network operator’s property[4]. 2.2  Overview of Ground Mounted 2.3  Solar PV Modules PV Power Plant This section describes commercially available technology options for solar PV modules, discusses module certification Figure 1 gives an overview of a megawatt scale grid- and module manufacturers, and elaborates on how solar PV connected solar PV power plant. The main components module performance can degrade over time. include: [3] Modules may be connected together in series to produce a string of modules. • Solar PV modules – These convert solar radiation When connected in series the voltage increases. Strings of modules connected in directly into electricity through the photovoltaic parallel increase the current output. effect in a silent and clean process that requires [4] Responsibility for this is defined in the grid connection contract. Normally, it is the grid operator‘s onus to maintain the equipment in the grid operator‘s no moving parts. The photovoltaic effect is a boundary—and there will be a cost to be paid by the PV plant owner. semiconductor effect whereby solar radiation falling A Guide For Developers and Investors 25 Utility Grid Sunlight Solar Modules LV/MV Voltage Mounting Racks Step Up AC Utility Net Meter Inverter & Transfers DC DC/AC Disconnects Electricity to Inverter AC Transfers the Service Converted AC Panel Electricity Figure 1: Overview of Solar PV Power Plant 2.3.1  Background on PV Materials The unusual electrical properties required for PV cells limit Figure 2(a) summarises the technology classes: the raw materials from which they may be manufactured. Silicon is the most common material while cells using • Crystalline Silicon (c-Si) – Modules are made from cells of either mono-crystalline or multi-crystalline cadmium telluride and copper indium (gallium) di-selenide silicon. Mono-crystalline silicon cells are generally are also available. Each material has unique characteristics that the most efficient, but are also more costly than impact the cell performance, manufacturing method and cost. multi-crystalline. PV cells may be based on either silicon wafers • Thin Film – Modules are made with a thin film deposition of a semiconductor onto a substrate. This (manufactured by cutting wafers from a solid ingot block of class includes semiconductors made from: silicon) or “thin film” technologies (in which a thin layer of a semiconductor material is deposited on low-cost substrates). • Amorphous silicon (a-Si). • Cadmium telluride (CdTe). PV cells can further be characterised according to the long range structure of the semiconductor material, “mono- • Copper indium selenide (CIS). crystalline”, “multi-crystalline” (also known as “poly- • Copper indium (gallium) di-selenide (CIGS). crystalline”) or less ordered “amorphous” material. 26 Utility Scale Solar Power Plants 2.3.3  Thin Film PV Modules As of January 2010, approximately 78% of the global Crystalline wafers provide high efficiency solar cells but are installed capacity of solar PV power plants use wafer-based relatively costly to manufacture. In comparison, thin film cells crystalline silicon modules. Amorphous silicon and cadmium are typically cheaper due to both the materials used and the telluride thin film modules make up the remaining 22%. simpler manufacturing process. However, thin film cells are less efficient. Mono Crystalline Crystalline silicon cells Poly/Multi Crystalline Amorphous Thin film silicon Microcrystalline Thin film cells CIS/CIGS CdTe Figure 2(a): PV Technology Classes 2.3.2  Crystalline Silicon PV Modules Crystalline silicon modules consist of PV cells (typically The most well-developed thin film technology uses silicon between 12.5 square cm and 20 square cm) connected in its less ordered, non-crystalline (amorphous) form. Other together and encapsulated between a transparent front (usually technologies use cadmium telluride and copper indium (gallium) glass), and a backing material (usually plastic or glass). di-selenide with active layers less than a few microns thick. In general, thin film technologies have a less established track record Mono-crystalline wafers are sliced from a large single crystal than many crystalline technologies. The main characteristics of ingot in a relatively expensive process. thin film technologies are described in the following sections. Cheaper, multi-crystalline wafers may be made by a variety 2.3.3.1  Amorphous Silicon of techniques. One of the technologies involves the carefully controlled casting of molten poly-silicon, which is then In amorphous silicon technologies, the long range order of sliced into wafers. These can be much larger than mono- crystalline silicon is not present and the atoms form a continuous crystalline wafers. Multi-crystalline cells produced in this way random network. Since amorphous silicon absorbs light more are currently cheaper but the end product is generally not as effectively than crystalline silicon, the cells can be much thinner. efficient as mono-crystalline technology. A Guide For Developers and Investors 27 Amorphous silicon (a-Si) can be deposited on a wide range process, the quality of assembly and packaging of the cells of both rigid and flexible low cost substrates. The low cost of into the module, as well as maintenance levels employed a-Si makes it suitable for many applications where low cost is at the site. Regular maintenance and cleaning regimes may more important than high efficiency. reduce degradation rates but the main impact is specific to the characteristics of the module being used. It is, therefore, 2.3.3.2  Cadmium Telluride important that reputable module manufacturers are chosen and power warranties are carefully reviewed. Cadmium telluride (CdTe) is a compound of cadmium and tellurium. The cell consists of a semiconductor film stack The extent and nature of degradation varies among module deposited on transparent conducting oxide-coated glass. A technologies. For crystalline modules, the cells may suffer from continuous manufacturing process using large area substrates irreversible light-induced degradation. This can be caused by can be used. Modules based on CdTe produce a high energy the presence of boron, oxygen or other chemicals left behind output across a wide range of climatic conditions with good by the screen printing or etching process of cell production. low light response and temperature response coefficients. The initial degradation occurs due to defects that are activated on initial exposure to light. 2.3.3.3  Copper Indium (Gallium) Di-Selenide (CIGS/CIS) Amorphous silicon cells degrade through a process called the Staebler-Wronski Effect[5]. This degradation can cause CIGS is a semiconductor consisting of a compound of reductions of 10-30% in the power output of the module copper, indium, gallium and selenium. in the first six months of exposure to light. Thereafter, the degradation stabilises and continues at a much slower rate. CIGS absorbs light more efficiently than crystalline silicon, but modules based on this semiconductor require somewhat Amorphous silicon modules are generally marketed at thicker films than a-Si PV modules. Indium is a relatively their stabilised performance levels. Interestingly, degradation expensive semiconductor material, but the quantities required in amorphous silicon modules is partially reversible with are extremely small compared to wafer based technologies. temperature. In other words, the performance of the modules may tend to recover during the summer months, and drop Commercial production of CIGS modules is in the early again in the colder winter months. stages of development. However, it has the potential to offer the highest conversion efficiency of all the thin film PV Additional degradation for both amorphous and crystalline module technologies. technologies occurs at the module level and may be caused by: 2.3.4  Module Degradation • Effect of the environment on the surface of the module (for example pollution). The performance of a PV module will decrease over time. • Discolouration or haze of the encapsulant or glass. The degradation rate is typically higher in the first year upon initial exposure to light and then stabilises. • Lamination defects. Factors affecting the degree of degradation include the [5] An effect in which the electronic properties of the semiconductor material quality of materials used in manufacture, the manufacturing degrade with light exposure. 28 Utility Scale Solar Power Plants Table 1: Characteristics of various PV technologies[7] Copper Indium Technology Crystalline Silicon Amorphous Silicon Cadmium Telluride Gallium Di-Selenide Abbreviation c-Si a-Si CdTe CIGS or CIS Cost ($/Wp, 2009) 3.1-3.6 2.5-2.8 2.1-2.8 2.7-2.9 Percentage of Global 78% 22% installed capacity[8] Thick layers Thickness of cell Thin layers (<1µm) Thin layers (<1µm) Thin layers (<1µm) (200-300µm) Current commercial 12-19% 5-7% 8-11% 8-11% efficiency Temperature coefficient for -0.50%/°C -0.21%/°C -0.25%/°C -0.36%/°C power[9] (Typical) • Mechanical stress and humidity on the contacts. efficiency technologies are more costly to manufacture, less efficient modules require a larger area to produce the same • Cell contact breakdown. nominal power. As a result, the cost advantages gained at the • Wiring degradation. module level may get offset by the cost incurred in providing additionally required power system infrastructure (cables and PV modules may have a long term power output mounting frames) for a larger module area. So using the lowest degradation rate of between 0.3% and 1% per annum. For cost module does not necessarily lead to the lowest cost per crystalline modules, a generic degradation rate of 0.5% per Wp for the complete plant. The relationship between plant annum is often considered applicable (if no specific testing has area and module efficiency is discussed in Section 5.2.2. been conducted on the modules being used[6]). Banks often assume a flat rate of degradation rate of 0.5% per annum. At the time of writing, crystalline silicon technology comprises almost 80% of global installed solar capacity and is In general, good quality PV modules may be expected to likely to remain dominant in the short term. But the presence have a useful life of 25-30 years. The possibility of increased of thin film technologies is growing. As of 2010, Cadmium rates of degradation becomes higher thereafter. Telluride accounted for the large majority of installed thin film capacity but CIGS is thought to have promising cost 2.3.5  Module Cost and Efficiency reduction potential Table 1 shows the cost and commercial efficiency of some 2.3.6 Certification PV technology categories. As may be expected, while higher [6] US Department of Energy, National Renewable Energy Laboratory. The International Electrotechnical Commission (IEC) [7] ASIF: Informe Annual 2009. Maximum efficiency values taken from “Best Production-Line PV Module Efficiency Values From Manufacturers‘ Websites” issues internationally accepted standards for PV modules. PV compiled by Bolko von Roedern, NREL 9-2009 modules will typically be tested for durability and reliability [8] “Global Market Outlook for Photovoltaics until 2014” www.epia.org (Concentrating PV and other minor technologies not shown). [9] The temperature coefficient for power describes the dependence on power output with increasing temperature. Module power generally decreases as the module temperature increases. A Guide For Developers and Investors 29 according to these standards. Standards IEC 61215 (for Table 2 summarises major PV quality standards. These are crystalline silicon modules) and IEC 61646 (for thin film an accepted quality mark and indicate that the modules can modules) include tests for thermal cycling, humidity and safely withstand extended use. However, they say very little freezing, mechanical stress and twist, hail resistance and about the performance of the module under field conditions performance under some fixed test conditions, including of varying irradiance and temperature experienced at a standard testing conditions (STC )[10]. specific site location. Table 2: PV Module Standards Test Description Comment Crystalline silicon terrestrial The standard certification uses a 2,400 Pa pressure. Modules IEC 61215 photovoltaic (PV) modules – Design in heavy snow locations may be tested under more stringent qualification and type approval. 5,400 Pa conditions. Thin-film terrestrial photovoltaic Very similar to the IEC 61215 certification, but an additional IEC 61646 (PV) modules – Design qualification test specifically considers the additional degradation of thin and type approval. film modules. Part 2 of the certification defines three different Application Classes: 1). Safety Class 0 – Restricted access applications. EN/IEC 61730 PV module safety qualification. 2). Safety Class II – General applications. 3). Safety Class III – Low voltage applications. Module safety assessed based on: 1). Durability. IEC 60364-4-41 Protection against electric shock. 2). High dielectric strength. 3). Mechanical stability. 4). Insulation thickness and distances. Required for modules being installed near the coast or for IEC 61701 Resistance to salt mist and corrosion maritime applications. The certified product conforms to the Conformité Européenne EU health, safety and environmental Mandatory in the European Economic Area. (EC) requirements. Comply with the National Electric Underwriters Laboratories Inc. (UL) is an independent U.S. Code (NEC), OSHA and the based product safety testing certification company which UL 1703 National Fire Prevention Association. is a Nationally Recognised Testing Laboratory (NRTL). The modules perform to at least 90% Certification by a NRTL is mandatory in the U.S. of the manufacturer’s nominal power. [10]   STC, Standard Test Conditions are defined as an irradiance of 1000W/m 2 at a spectral density of AM 1.5 (ASTM E892) and cell temperature of 25°C. 30 Utility Scale Solar Power Plants Figure 2(b): Development of Research Cell Efficiencies[12] This diagram was created by the National Renewable Energy Laboratory for the Department of Energy There are efforts to create a new standard, IEC 61853, There are currently a few large module manufacturers which will test the performance and energy rating of modules dominating the market. Financial institutions often keep lists under a variety of irradiance and temperature conditions. of module manufactures they consider bankable. However, This standard should facilitate comparison and selection of these lists can quickly become dated as manufacturers modules, based on performance. introduce new products and quality procedures. Often, the larger manufacturers (such as Suntech, Sunpower or First 2.3.7  Module Manufacturers Solar) are considered bankable, but there is no definitive and accepted list. Manufacturers of PV modules are based predominantly in Europe, China and North America[11]. A 2009 survey by 2.3.8  Module Technology Developments Photon International (2-2009) indicated that there were over 220 suppliers of PV modules and over 2,700 products. When Solar PV module technology is developing rapidly. While assessing the quality of a module for any specific project, it a wide variety of different technical approaches are being is important to assess its specifications, certifications, track explored, the effects of these approaches are focused on either record, and the track record of the manufacturer. improving module efficiency or reducing manufacturing costs. [11]   There are several module manufacturers in India but the current installed Incremental improvements are being made to conventional production capacity is still under 1000 MWp per annum. India exports a major portion of the production. The dominant technology is crystalline c-Si cells. One of these improvements is the embedding of silicon with amorphous silicon gaining ground. [12]   Image courtesy from United States National Renewable Energy Laboratory the front contacts in laser-cut microscopic grooves in order to www.nrel.com, it can be accessed April 2011. A Guide For Developers and Investors 31 Figure 3: Effect of Tilt on Solar Energy Capture reduce the surface area of the contacts and so increase the area Figure 2(b) illustrates the development of the efficiencies of the cell that is exposed to solar radiation. Similarly, another of research cells from 1975 to the present day. It should be approach involves running the front contacts along the back of noted that commercially available cells lag significantly behind the cell and then directly through the cell to the front surface at research cells in terms of efficiency. certain points. 2.4  Mounting and Tracking Systems Different types of solar cell inherently perform better at different parts of the solar spectrum. As such, one area of interest PV modules must be mounted on a structure, to keep them is the stacking of cells of different types. If the right combination oriented in the correct direction and to provide them with of solar cells is stacked (and the modules are sufficiently structural support and protection. Mounting structures may transparent) then a stacked or “multi-junction” cell can be be fixed or tracking. produced which performs better across a wider range of the solar spectrum. This approach is taken to the extreme in III-V cells 2.4.1  Fixed Mounting Systems (named after the respective groups of elements in the Periodic Table) in which the optimum materials are used for each part Fixed mounting systems keep the rows of modules at a of the solar spectrum. III-V cells are very expensive but have fixed tilt angle[13] while facing a fixed angle of orientation[14]. achieved efficiencies in excess of 40%. Less expensive approaches Figure 3 illustrates why the tilt angle is important for based on the same basic concept include hybrid cells (consisting maximising the energy incident on the collector plane. of stacked c-Si and thin film cells) and multi-junction a-Si cells. Other emerging technologies which are not yet market ready [13]   The tilt angle or “inclination angle” is the angle of the PV modules from the but could be of commercial interest in future include spherical horizontal plane. [14]   The orientation angle or “azimuth” is the angle of the PV modules relative to cells, sliver cells and dye sensitised or organic cells. south. East is -90° south is 0° and west is 90°. 32 Utility Scale Solar Power Plants Output Power Improvement with tracking Without tracking Time of Day Figure 4: Benefit of Dual Axis Tracking System 2.4.2  Tracking Systems The tilt angle and orientation is generally optimised for each In locations with a high proportion of direct irradiation PV power plant according to location. This helps to maximise including some regions of India, single or dual-axis the total annual incident irradiation[15] and total annual energy tracking systems can be used to increase the average total yield. For Indian sites, the optimum tilt angle is generally annual irradiation. Tracking systems follow the sun as it between 10º and 35º, facing true south. There are several moves across the sky. They are generally the only moving off-the-shelf software packages that may be used to optimise parts employed in a PV power plant. the tilt angle and orientation according to specifics of the site location and solar resource. Single-axis trackers alter either the orientation or tilt angle only, while dual-axis tracking systems alter both orientation Fixed tilt mounting systems are simpler, cheaper and have and tilt angle. Dual-axis tracking systems are able to track the lower maintenance requirements than tracking systems. sun more precisely than single-axis systems. They are the preferred option for countries with a nascent solar market and limited indigenous manufacturing of Depending on the site and precise characteristics of the tracking technology. solar irradiation, trackers may increase the annual energy yield by up to 27% for single-axis and 37% for dual-axis trackers. Tracking also produces a smoother power output plateau as shown in Figure 4. This helps meet peak demand in [15]   Irradiation is the solar energy received on a unit area of surface. It is defined afternoons, which is common in hot climates due to the use of more fully in section 3.1. air conditioning units. A Guide For Developers and Investors 33 Figure 5: An Example of a Tracking PV Plant Almost all tracking system plants use crystalline silicon An example of a tracking PV plant is shown in Figure 5. modules. This is because their higher efficiency reduces Aspects to take into account when considering the use of additional capital and operating costs required for the tracking tracking systems include: system (per kWp installed). However, relatively inexpensive single-axis tracking systems have recently been used with some Financial: thin film modules. • Additional capital costs for the procurement and There are many manufacturers and products of solar PV installation of the tracking systems (typically $140-700/kWp). tracking systems. A 2009 survey of manufacturers by Photon International magazine (11-2009) listed 170 different devices • Additional land area required to avoid shading with a wide range of tracking capabilities. Most fall into one compared to a free field fixed tilt system of the same of six basic design classes (classic dual-axis, dual-axis mounted nominal capacity. on a frame, dual-axis on a rotating assembly, single-axis • Large tracking systems may require cranes to install, tracking on a tilted axis, tracking on a horizontal axis and increasing the installation cost. single-axis tracking on a vertical axis). In general, the simpler the construction, the lower the extra yield compared to a fixed • There is a higher maintenance cost for tracking systems due to the moving parts and actuation system, and the lower the maintenance requirement. systems. Typical additional maintenance costs range from $2.8-21/kWp per annum. 34 Utility Scale Solar Power Plants Operational: 2.5.1  Inverter Connection Concepts • Tracking angles: all trackers have angular limits that There are two broad classes of inverters: central inverters vary among products. Depending on the angular and string inverters. The central inverter configuration shown limits, performance may be reduced. in Figure 6 remains the first choice for many medium and • High wind capability and storm mode: dual-axis large scale solar PV plants. A large number of modules are tracking systems especially need to go into a storm connected in series to form a high voltage string. Strings are mode when the wind speed is over 16-20 m/s. This then connected in parallel to the inverter. could reduce the energy yield and revenues at high wind speed sites. Central inverters offer high reliability and simplicity of • Direct/diffuse irradiation ratio: tracking systems will installation. However, they have disadvantages: increased give greater benefits in locations that have a higher mismatch losses[16] and absence of maximum power point direct irradiation component. This is discussed tracking[17] (MPPT) for each string. This may cause problems further in Section 3. for arrays that have multiple tilt and orientation angles, suffer 2.4.3 Certification from shading, or use different module types. Support structures should adhere to country specific Central inverters are usually three-phase and can include standards and regulations, and manufacturers should conform grid frequency transformers. These transformers increase the to ISO 9001:2000. This specifies requirements for a quality weight and volume of the inverters although they provide management system where an organisation needs to: galvanic isolation from the grid. In other words, there is no electrical connection between the input and output • Demonstrate its ability to consistently provide voltages—a condition that is sometimes required by national products that meet customer and applicable electrical safety regulations. regulatory requirements. • Aim to enhance customer satisfaction through the Central inverters are sometimes used in a “master slave” effective application of the system. These include configuration. This means that some inverters shut down processes for continual improvement as well as the when the irradiance is low, allowing the other inverters to run assurance of conformity to customer and applicable more closely to optimal loading. When the irradiance is high, regulatory requirements. the load is shared by all inverters. In effect, only the required number of inverters is in operation at any one time. As the 2.5 Inverters operating time is distributed uniformly among the inverters, design life can be extended. Inverters are solid state electronic devices. They convert DC electricity generated by the PV modules into AC electricity, ideally conforming to the local grid requirements. Inverters can also perform a variety of functions to maximise the output of the plant. These range from optimising the voltage across the strings and monitoring string performance to logging data, and providing protection and isolation in case of irregularities in the grid or with the PV modules. [16]   Mismatch refers to losses due to PV modules with varying current/voltage profiles being used in the same array. [17]   Maximum Power Point Tracking is the capability of the inverter to adjust its impedance so that the string is at an operating voltage that maximises the power output. A Guide For Developers and Investors 35 Central Inverter String Inverter Figure 6: PV System Configurations In contrast, the string inverter concept uses multiple String inverters, which are usually in single phase, also have inverters for multiple strings of modules. String inverters are other advantages. For one, they can be serviced and replaced increasingly being used as they can cover a very wide power by non-specialist personnel. For another, it is practical to keep range and can be manufactured more cheaply in a production spare string inverters on site. This makes it easy to handle line than central inverters. Additionally, they provide MPPT unforeseen circumstances, as in the case of an inverter failure. on a string level with all strings being independent of each In comparison, the failure of a large central inverter—with other. This is useful in cases where modules cannot be a long lead time for repair—can lead to significant yield loss installed with the same orientation, where modules of different before it can be replaced. specifications are being used, or when there are shading issues. Inverters may be transformerless or include a transformer to step up the voltage. Transformerless inverters generally have a higher efficiency, as they do not include transformer losses. 36 Utility Scale Solar Power Plants MPP Tracking Power Inverter Voltage Amplitude Decoupling Power MPP Tracking Voltage Decoupling + Inverter Amplitude + Isolation Figure 7: Transformer and Transformerless Inverter Schematic In the case of transformerless string inverters (see Figure 7), implemented across the installation. Transformerless inverters the PV generator voltage must either be significantly higher also cause increased electromagnetic interference (EMI). than the voltage on the AC side, or DC-DC step-up converters must be used. The absence of a transformer leads Inverters with transformers provide galvanic isolation. to higher efficiency, reduced weight, reduced size (50-75% Central inverters are generally equipped with transformers. lighter than transformer-based models[18]) and lower cost due Safe voltages (<120 V) on the DC side are possible with this to the smaller number of components. On the downside, design. The presence of a transformer also leads to a reduction additional protective equipment must be used, such as of leakage currents, which in turn reduces EMI. But this DC sensitive earth-leakage circuit breakers (CB), and live design has its disadvantages in the form of losses (load and parts must be protected. IEC Protection Class II[19] must be no-load[20]), and increased weight and size of the inverter. [18]   A Review of PV Inverter Technology Cost and Performance Projections, NREL Standards, Jan 2006. [20]   The load-dependent copper losses associated with the transformer coils [19]   IEC Protection Class II refers to a device that is double insulated and therefore are called load losses. The load-independent iron losses produced by the does not require earthing. transformer core magnetising current are called no-load losses. A Guide For Developers and Investors 37 2.5.2  Power Quality/Grid Code Compliance 2.5.3 Efficiency Power quality and grid code requirements are country- A number of different measures of efficiency have been dependent. It is not possible to provide universally applicable defined for inverters. These describe and quantify the guidelines. The national regulations and standards should be efficiency of different aspects of an inverter’s operation. consulted when selecting an inverter and designing a solar PV The search for an objective way of quantifying inverter power plant. performance is still ongoing. New ways of measuring efficiency are frequently suggested in industry literature. The most In general, one of the quantities used to describe the quality commonly used methods are discussed below. of a grid-connected inverter is total harmonic distortion (THD). It is a measure of the harmonic content of the inverter The conversion efficiency is a measure of the losses output and must be limited in most grid codes. For high quality experienced during the conversion from DC to AC. devices, THD is normally less than 5%[21] . These losses are due to multiple factors: the presence of a transformer and the associated magnetic and copper 100 90 80 70 Inverter Efficiency (%) 60 High 50 Efficiency Medium Efficiency 40 Low Efficiency 30 20 10 0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Ratio of Input Power to the Inverter’s rated Capacity Figure 8: Efficiency Curves of Low, Medium and High Efficiency Inverters as Functions of the Input Power to Inverter Rated Capacity Ratios[22] [22]   Jayanta Deb Mondol, Yigzaw G. Yohanis, Brian Norton. Optimal sizing of [21]   Handbook of Photovoltaic Science and Engineering (Wiley, 2003) array and inverter for grid-connected photovoltaic systems, 2006. 38 Utility Scale Solar Power Plants Table 3: Indicative list of inverter-related standards losses, inverter self-consumption, and losses in the power Electromagnetic compatibility electronics. Conversion efficiency is defined as the ratio of the (EMC). Generic standards. fundamental component of the AC power output from the EN 61000-6-1: 2007 Immunity for residential, inverter, divided by the DC power input: commercial and light-industrial PAC (Fundamental component of AC power output) environments. nCon = = Electromagnetic compatibility PDC (DC power input) (EMC). Generic standards. The conversion efficiency is not constant, but depends on EN 61000-6-2: 2005 Immunity for industrial the DC power input, the operating voltage, and the weather environments. conditions including ambient temperature and irradiance. Electromagnetic compatibility The variance in irradiance during a day causes fluctuations (EMC). Generic standards. in the power output and maximum power point (MPP) of a EN 61000-6-3: 2007 Emission standard for residential, PV array. As a result, the inverter is continuously subjected commercial and light-industrial to different loads, leading to varying efficiency. The voltage environments. at which inverters reach their maximum efficiency is an important design variable, as it allows system planners to Electromagnetic compatibility optimise system wiring. (EMC). Generic standards. EN 61000-6-4: 2007 Emission standard for industrial Due to the dynamic nature of inverter efficiency, it is environments. better depicted through diagrams than by uniform numeric Information technology values. An example depicting the dependency of the inverter equipment. Radio disturbance EN 55022: 2006 efficiency on the inverter load is given in Figure 8. characteristics. Limits and methods of measurement. The European Efficiency is an accepted method of Electronic equipment for use in EN 50178: 1997 measuring inverter efficiency. It is a calculated efficiency power installations. averaged over a power distribution corresponding to operating Photovoltaic systems – Power climatic conditions of a central European location. As a useful IEC 61683: 1999 conditioners – Procedure for means of comparing inverter efficiencies[23], the efficiency measuring efficiency. standard also attempts to capture the fact that in central Europe most energy is generated near the middle of a PV Inverters can have a typical European Efficiency of 95% and module’s power range. peak efficiencies of up to 98%. Most inverters employ MPPT algorithms to adjust the load impedance and maximise the Another method of comparing efficiencies is using the power from the PV array. The highest efficiencies are reached Californian Efficiency. While the standard is based on the by transformerless inverters. same reasoning as the European efficiency, it is calibrated for locations with higher average irradiance. Inverter manufacturers should measure the efficiency of their products, according to the IEC 61683 standard, to [23]   If h50%denotes the efficiency at a load equal to 50% of the nominal power, the ensure that the results are accurate and compliant. European Efficiency is defined as: n Euro=0.03×n5%+ 0.06 ×n10%+ 0.13×n 20%+ 0.1×n30%+ 0.48×n50%+ 0.2 A Guide For Developers and Investors 39 2.5.4 Certification In order to ensure a high level of quality and performance, The latest global market survey for inverters conducted by and to minimise risk, inverters must be compliant with Photon International magazine (04-2010) lists 1,068 inverter a number of standards. The requirements, in terms of types, 532 of which are rated at 10 kW or less. Over a quarter compliance with standards, depend on the location of the of the inverter types belong to the 10 to 100 kW range. project and the type of inverter. Over the past year, a number of major industry players have Important standards bodies for inverters are DIN VDE, started to enter the inverter market. These include GE, ABB, IEC and EN. Inverters must be CE compliant in order to and Schneider Electric (through the acquisition of Xantrex). be installed in Europe. Table 3 is a non-exhaustive list of In 2010, the growth in the solar PV market and delays in standards to which inverters should conform according to production (due to scarcity of key electronic components) led European practice. to a global shortage of inverters. 2.5.5  Inverter Manufacturers 2.6  Quantifying Plant Performance The inverter market is dominated by SMA Solar The performance of a PV power plant is expected to fall Technology AG, which has a higher market share than during its lifetime, especially in the second and third decade of the combined share of the next four largest vendors (Kaco, its life as modules continue to degrade and plant components Fronius, Power-One and Siemens) (as illustrated in Figure 9). age. In addition to the quality of the initial installation, a high Other inverter manufacturers hold the remaining 18% share degree of responsibility for the performance of a PV plant lies of the global market[24]. with the O&M contractor. This section discusses how the operational performance of a PV plant may be quantified. 2.6.1  Performance Ratio Others 18% The quality of a PV power plant may be described by its Performance Ratio (PR). The PR, usually expressed as a Siemens percentage, can be used to compare PV systems independent 5% of size and solar resource. The PR may be expressed as: SMA Power-One 49% (AC Yield (kWh)) 6% PR = (Installed Capacity (kWp)×Plane of Array Irradiation(kWh/m2) )×100% Fronius 10% By normalising with respect to irradiation, the PR quantifies the overall effect of losses on the rated output and allows a comparison between PV systems at different locations. A KACO new energy plant with a high PR is more efficient at converting solar 12% Figure 9: Inverter Manufacturer Market Share 2009[24] [24]   Sun & Wind Energy February 2010 40 Utility Scale Solar Power Plants irradiation into useful energy. The PR of a plant may be CF=(Energy generated per annum (kWh))/(8760 predicted using simulations, or alternatively may be calculated (hours / annum)×Installed Capacity (kWp)) for an operational plant by measuring irradiation, ambient temperature, wind velocity, module temperature, voltage and The capacity factor of a fixed tilt PV plant in southern current over a given time period. Spain will typically be in the region of 16%. This means that a 5 MWp plant will generate the equivalent energy of As PV plant losses vary according to environmental a continuously operating 0.8 MW plant. Plants in India conditions through the year, the PR also varies. For example, operating within a reliable grid network are expected to have a the more significant negative temperature coefficient of power similar capacity factor. for crystalline modules may lead to increased losses at high ambient temperatures. A PR varying from approximately 2.6.3  Specific Yield 77% in summer to 82% in winter (with an annual average PR of 80%) would not be unusual for a well-designed solar PV The “specific yield” (kWh/kWp) is the total annual energy power plant that is not operating in high ambient temperature generated per kWp installed. It is often used to help determine conditions. the financial value of an array[25] and compare operating results from different technologies and systems. The specific yield of a Some plants using amorphous silicon modules show the plant depends on: opposite effect: in summer months, the PR increases, dropping again in the colder winter months. This is due to the fact that • The total annual irradiation falling on the collector plane. This can be increased by optimally tilting the Staebler-Wronski degradation is partially reversible at high modules or employing tracking technology. temperatures. It is common to observe seasonal oscillations in the PR of amorphous silicon plants due to this thermal • The performance of the module, including sensitivity annealing process. to high temperatures and low light levels. • System losses including inverter downtime. Averaged across the year, a PR in the upper seventies or lower eighties is typical for a well-designed plant. This may be Some module manufacturers claim much higher kWh/ expected to reduce as the plant ages, dependent on the module kWp energy yields for their products than those of their degradation rates. competitors. However, independent studies to determine the divergence between actual peak power and nominal power— 2.6.2  Capacity Factor and to correct for other technical distortions—tend to show much less of a difference. The capacity factor of a PV power plant (usually expressed as a percentage) is the ratio of the actual output over a period of one year and its output if it had operated at nominal power the entire year, as described by the formula: [25]   An Array is a linked collection of PV modules. A Guide For Developers and Investors 41 2.7  Solar PV Technology Conclusions Photovoltaic (PV) cell technologies are broadly categorised as either crystalline or thin film. Crystalline wafers provide high efficiency solar cells but are relatively costly to manufacture; they are sub-divided into mono-crystalline or multi-crystalline silicon. Mono-crystalline silicon cells are generally the most efficient, but are also more costly than multi-crystalline. Thin film cells provide a cheaper alternative but are less efficient. There are three main types of thin film cells: • Amorphous Silicon – The low cost of a-Si makes it suitable for many applications where low cost is more important than high efficiency. • Cadmium Telluride – Modules based on CdTe produce a high energy output across a wide range of climatic conditions with good low light response and temperature response coefficients. • Copper Indium (Gallium) Di-Selenide (CIGS/CIS) – Commercial production of CIGS modules is in the early stages of development. However, it has the potential to offer the highest conversion efficiency of all the thin film PV module technologies. The performance of a PV module will decrease over time due to a process known as degradation. Typically, the degradation rate is highest in the first year of operation and then it stabilises. PV modules may have a long term degradation rate of between 0.3% and 1% per annum. Banks often assume a flat rate of degradation rate of 0.5% per annum. Modules are either mounted on fixed angle frames or on sun-tracking frames. Fixed frames are simpler to install, cheaper and require less maintenance. However, tracking systems can increase yield by up to 34%. Tracking, particularly for areas with a high direct/diffuse irradiation ratio, also enables a smoother power output. Inverters convert DC electricity generated by the PV modules into AC electricity, ideally conforming to the local grid requirements. They are arranged either in string or central configurations. Central configuration inverters are considered to be more suitable for multi-megawatt plants. String inverters enable individual string MPPT and require less specialised maintenance skills. String configurations are becoming increasingly popular as they offer more design flexibility. PV modules and inverters are all subject to certification, predominantly by the IEC. However, one major absence in the standards is performance and energy rating testing other than at standard testing conditions (STC). A standard is being prepared for this, which should enable easier comparison of manufacturers. The performance ratio (PR) of a well-designed PV power plant will typically be in the region of 75% to 85%, degrading over the lifetime of the plant. The capacity factor should typically be in the region of 16%. In general, good quality PV modules may be expected to have a useful life of 25 to 30 years. 42 Utility Scale Solar Power Plants 3. THE SOLAR RESOURCE 3.2  Solar Resource Assessment 3.1  Quantifying the Resource Long term annual average values of GHI and DNI can be obtained for a site by interpolating measurements taken from Site selection and planning of PV power plants requires ground based sensors or indirectly from the analysis of satellite reliable solar resource data. Power production depends imagery. Ideally, historical values of daily or hourly irradiation linearly on the plane of array irradiance[26], at least to a first with a spatial resolution of 10 km or less are required to approximation. The solar resource of a location is usually generate regional solar atlases. defined by the values of the global horizontal irradiation[27], direct normal irradiation and diffuse horizontal irradiation as As the distance between a solar resource and a ground-based defined below. sensor increases, the uncertainty of interpolated irradiation values increases. Under such circumstances, satellite derived • Global Horizontal Irradiation (GHI) – GHI is the data may be preferred. The uncertainty in satellite-derived data total solar energy received on a unit area of horizontal is reducing as new models develop. The precise point at which surface. It includes energy from the sun that is satellite data become preferable over data interpolated from received in a direct beam and from all directions of ground sensors depends on the individual case. The relative the sky when radiation is scattered off the atmosphere (diffuse irradiation). The yearly sum of the GHI is merits of these alternative data sources are discussed below. of particular relevance for PV power plants, which are able to make use of both the diffuse and beam 3.2.1  Satellite Derived Data components of solar irradiance. Satellite-derived data can offer a wide geographical coverage • Direct Normal Irradiation (DNI) – DNI is the total solar energy received on a unit area of surface and can often be obtained retrospectively for historical directly facing the sun at all times. The DNI is of periods in which no ground-based measurements were taken. particular interest for solar installations that track This is especially useful for assessing long term averages. A the sun and for concentrating solar technologies combination of analytical, numerical and empirical methods (as concentrating technologies can only make use of can offer half-hourly data with a nominal spatial resolution the direct component of irradiation). down to 2.5 km, depending on the location and field of view • Diffuse Horizontal Irradiation (DHI) – DHI is the of the satellite. energy received on a unit area of horizontal surface from all directions when radiation is scattered off the One advantage of satellite resource assessment is that data is atmosphere or surrounding area. not susceptible to maintenance and calibration discontinuities. The same sensor is used to assess locations over a wide area. Irradiation is measured in kWh/m2, and values are often This can be particularly useful in comparing and ranking sites given for a period of a day, a month or a year. A high long as bias errors are consistent. term average annual GHI is typically of most interest to PV project developers. Average monthly values are important A comparison of the GHI values shows that statistics when assessing the proportion of energy generated in each obtained from satellite readings correspond well with month. Figure 10 shows the annual average of GHI for India. ground-measured data. But it is not so in the case of DNI [26] Irradiance is the power incident on a surface per unit area. (Watts per square values. Currently, it is not so clear if this dissonance is due meter or W/m 2). to the satellite methodology or the poor maintenance of [27] Irradiation is a measure of the energy incident on a unit area of a surface in a given time period. This is obtained by integrating the irradiance over defined ground-based measurement stations, but is likely to be a time limits. (energy per square meter or kWh/m 2) combination of both. A Guide For Developers and Investors 43 Figure 10: Annual Average Global Horizontal Irradiation[28] This diagram was created by the National Renewable Energy Laboratory for the Department of Energy (USA) Efforts are underway to improve the accuracy of satellite- derived data. One way is to use more advanced techniques for the treatment of high reflectivity surfaces such as salt plains and snow-covered regions. Another technique uses updated methods for estimating the Aerosol Optical Depth (AOD), which can depend on locally generated dust, smoke from biomass burning and anthropogenic pollution. Accurate estimates of AOD are particularly important for the calculation of DNI for concentrating solar power applications. Concentrating solar power is discussed in Appendix A – Solar CSP Annex. Figure 11: Example Pyranometer Measuring GHI (Image courtesy: Kipp & Zonen) [28] United States National Renewable Energy Laboratory www.nrel.com, accessed May 2010. 44 Utility Scale Solar Power Plants 3.2.2  Land Based Measurement The traditional approach to solar resource measurement For locations that have a low density of MET stations and is to use land-based sensors. A variety of sensor technologies rely on satellite data, on-site resource monitoring may be is available from a number of manufacturers with differing considered during the feasibility stage of the project. On-site accuracy and cost implications. The two main technology resource monitoring may be used to calibrate satellite-derived classes are: estimates, thereby reducing bias and improving accuracy. In general, up to four months of measured data can reduce • Thermal Pyranometers – These are also known as existing bias, and improve the estimation of the long term solarimeters and typically consist of a black metal plate mean. A further, four to eight months of measured data will absorber surface below two hemispherical glass domes improve the capability to capture seasonal variations. But in a white metal housing. Solar irradiance warms up the metal plate in proportion to its intensity. The the best results are obtained by monitoring for a full twelve degree of warming, compared to the metal housing, months or longer. can be measured with a thermocouple. High precision can be achieved with regular cleaning and recalibration. 3.3  Variability in Solar Irradiation Since thermal pyranometers have a slow response time, they might not be able to capture rapidly varying In terms of irradiation, the solar resource is inherently irradiance levels due to clouds. Also, diffuse irradiance can be measured if a sun – tracking shading disc is used intermittent. In any given year, the total annual global to block out irradiance travelling directly from the sun. irradiation on a horizontal plane varies from the long term An example of a pyranometer is shown in Figure 11. average due to climatic fluctuations. This means that though the plant owner may not know the energy yield to expect in • Silicon Sensors – These are cheaper than pyranometers any given year, he can have a good idea of the expected yield and consist of a PV cell, often using crystalline silicon. The current delivered is proportional to the irradiance. averaged over the long term. Temperature compensation can be used to increase accuracy but its scope is limited by the spectral To help lenders understand the risks and perform a sensitivity of the cell. Some wavelengths (for example sensitivity analysis, it is important to quantify the limits of the long wavelength IR) may not be accurately measured, inter-annual variation. This can be achieved by assessing the resulting in a lower irradiance measurement of up to long-term irradiation data (in the vicinity of the site) sourced 5% compared to thermal pyranometers. from nearby MET stations or satellites. At least 10 years Well maintained land-based sensors can measure the solar of data are usually required to give a reasonably confident resource with a relative accuracy of 3-5%. Long term data assessment of the variation. Research papers[29] show that for from such stations may be used to calibrate satellite – derived southern Europe (including Spain), the coefficient of variation irradiation maps. However, maintenance is very important since (standard deviation divided by the mean[30]) is below 4%. soiled or ill-calibrated sensors can easily yield unreliable data. Table 4 shows the coefficient of variation for four locations in India as derived from data provided by NASA. In Europe, it is not common for the solar resource to be measured at the site of a PV plant for any significant length of time, prior to construction. Energy yield predictions typically rely on historical irradiation data taken from nearby [29] Uncertainties in photovoltaic electricity yield prediction from fluctuation of solar radiation. Proceedings of the 22nd European Photovoltaic Solar Energy meteorological (MET) stations or derived from satellite imagery. Conference, Milano, Italy 3-7.9.2007. [30] The coefficient of variation is a dimensionless, normalised measure of the dispersion of a probability distribution. It enables the comparison of different data streams with varying mean values. A Guide For Developers and Investors 45 Figure 12: Annual Average Daily Global Horizontal Irradiation for India at 40 km Resolution[31] 3.4  Indian Solar Resource Table 4: Inter-Annual Variation in Solar Resource From Analysis of NASA SSE Data sources for solar radiation in India are of varying Number of years Coefficient of quality. Comparison and judicious selection of data sources by Location of data Variation specialists in solar resource assessment is recommended while New Delhi 22 3.4% developing a project. Some of the more accessible data sources Mumbai 22 2.5% include: Chennai 22 2.2% • India Meteorological Department data from 23 field Sivaganga 22 4.3% stations of the radiation network, measured from 1986 to 2000. [31] Data from United States National Renewable Energy Laboratory www.nrel. • NASA’s Surface Meteorology and Solar Energy data com, accessed May 2010. National boundaries shown may not necessarily accurately reflect the Indian national boundaries. set. This holds satellite – derived monthly data for a 46 Utility Scale Solar Power Plants 2500 Horizontal Solar Irradiation (kWh/m²) 2000 1500 1221 1027 1320 Direct 1000 Diffuse 500 820 800 656 0 Mumbai Chennai New Delhi Figure 13: Annual Mean Horizontal Solar Irradiation for Three Cities in India Figure 13: Annual Mean Horizontal Solar Irradiation for Three Cities in India grid of 1°x1° covering the globe for a 22 year period METEONORM generates climatological averages (1984-2005). The data are considered accurate estimated by using interpolation algorithms and for preliminary feasibility studies of solar energy satellite data. projects in India. They are also particularly useful for estimating the inter-annual variability of the • Satellite-derived geospatial solar data products from solar resource. the United States-based National Renewable Energy Laboratory (NREL). Annual average DNI and GHI, • The METEONORM global climatological database latitude tilt, and diffuse data are available at 40 km and synthetic weather generator. This contains resolution for South and East Asia and at 10 km a database of ground station measurements of resolution for India, as shown in the examples of irradiation and temperature. In cases where a site is Figure 10 and Figure 12. over 20 km from the nearest measurement station, A Guide For Developers and Investors 47 250 Horizontal Solar Irradiation (kWh/m2) 200 150 Direct 100 Diffuse 50 0 rch ril y er y ber y ber st ary e ber Ma uar Jul Jun tob gu Ap Ma vem cem u em Au r Jan Oc Feb t No De Sep Figure 14: Monthly Diffuse and Direct Solar Irradiation in Chennai, India Figure 13 shows the proportion of direct and diffuse Figure 14 shows how the average monthly solar irradiation radiation for three cities in India obtained from the varies over a year at Chennai. The energy yield and revenue METEONORM database using land-based sensors supervised of a PV power plant may be expected to vary approximately by the Word Meteorological Organisation (WMO). Due to in proportion. The annual mean GHI in Chennai is the higher proportion of direct irradiation, it may be expected 2,021 kWh/m2. By optimally-orientating a fixed tilt plant, that tracking technologies will offer a greater advantage in the yearly sum of global irradiation may be increased to New Delhi than in Mumbai. 2,048 kWh/m2. Based on this resource, a 1 MWp plant with a PR of 80% will give an AC yield of 1,638 MWh. 48 Utility Scale Solar Power Plants Case Study 1 Resource Assessment In order to support financing, the developer of the 5 MW plant in Tamil Nadu had a basic solar resource assessment carried out. However, only one data source was used and there was no assessment made of the inter-annual variability of the resource. Nor was any analysis provided of the historical period on which the data was based. However, as has been seen globally, financing institutions are becoming more sophisticated in their analysis of solar plants and their requirements are moving towards including analysis from additional data sets. In a competitive market, financial institutions will tend to give better terms of financing to those projects that have the lowest risk financial return. An important component of the risk assessment is the confidence that can be placed in the solar resource at the site location. Developers can reduce the perceived long term solar resource risk by: • Comparing different data sources, assessing their uncertainty and judiciously selecting the most appropriate data for the site location. • Assessing the inter-annual variation in the solar resource in order to quantify the uncertainty in the revenue in any given year. There are a variety of possible solar irradiation data sources that may be assessed for the purpose of estimating the irradiation at potential solar PV sites in India. The datasets either make use of ground-based measurements at well- controlled meteorological stations or use processed satellite imagery. The location of the 5 MW plant in Tamil Nadu was more than 200 km from the nearest MET station. It was, therefore, necessary to rely on data interpolation between distant MET stations, and on data from satellites. The image below compares the data obtained for the site location from three such data sources. There is a significant discrepancy between them. A robust solar resource assessment would compare the data sources, discuss their uncertainty and select the data most likely to represent the long term resource at the site location. Where there is significant uncertainty in the data sources (or in the case of large capacity plants), a short term data monitoring campaign may be considered. Short term monitoring (ideally up to one year in duration) may be used to calibrate long term satellite-derived data and increase the confidence in the long term energy yield prediction. A Guide For Developers and Investors 49 Mean daily global horizontal irradiation (kWh/m2) 7.0 6.0 5.0 MET station interpolation 4.0 (20 years) 3.0 NASA SSE satellite data (22 years) 2.0 10 km resolution satellite data 1.0 (7 years) 0.0 h l y y er ber ber ary y st Oc r e ri Ma rc uar be Jul Jun gu tob Ap Ma vem cem u em Au r Jan Feb t No De Sep 50 Utility Scale Solar Power Plants 4. PROJECT DEVELOPMENT To move from concept to construction, a project must • Development – The development phase takes pass through a number of development stages. The key the project from the feasibility study to financial consideration during project development is the balance of closure. This involves moving the project forward on a number of fronts including outline design and expenditure and risk. There is no definitive detailed “road selection of contractors. map” for developing a solar PV project. The approach taken will depend on the developer’s priorities and requirements • Detailed Design – The key systems and structures such as risk profiles or deadlines, as well as site dependent will be designed in detail. This will generally be parameters. completed by a contractor. • Construction – The physical construction of This section outlines a general development process for a the project. solar PV project and highlights key considerations for each stage. More detail on each of these stages is given in the following sections. However, it should be noted that in 4.1  Overview of Project Phases practice the development process may not follow such a simple linear progression. The development process for a solar PV project can be broken down in to the following stages: 4.2 Concept • Concept – An opportunity (a potential PV project) The identification of a potential solar PV project generally is identified. requires: • Pre-feasibility study – This is the first assessment of • A project sponsor[32]. the potential project. It is a high-level review of the main aspects of the project such as the solar resource, • A potential site. grid connection and construction cost in order to decide if it the project is worth taking forward. • Funds to carry out feasibility assessments. • Feasibility study – If the outcome of the pre- 4.3  Pre-Feasibility Study feasibility study is favourable, a detailed feasibility study can be carried out. This consists of a A pre-feasibility study aims to assess if a project is worth significantly more detailed assessment of all aspects of progressing without committing significant expenditure. the project. The purpose of the feasibility study is to explore the project in enough detail for the interested A pre-feasibility study should, as a minimum, include parties and stakeholders to make a commitment to assessment of: proceed with its development. [32] The Sponsor(s) is (are) the party that owns the specific Project Company which is set up to develop and own a specific project or portfolio. Contracts and other agreements are entered into in the name of the Project Company. The Sponsor provides financial (and other) resources, thereby allowing the Sponsor to retain control of the project in a way that can allow it to minimise its exposure to risk. A Guide For Developers and Investors 51 4.4  Feasibility Study • The project site and boundary area. The feasibility phase will focus on the possible site or sites outlined in the pre-feasibility study. It will take into account • A conceptual design of the project, including each of the constraints in more detail and, if multiple sites are estimation of installed capacity. being assessed, should highlight the preferred site. • The approximate costs for development, construction and operation of the project and predicted revenue. A typical scope for a feasibility study would include: • Estimated energy yield. • Production of a detailed site plan. • Grid connection – cost and likelihood of • Calculation of solar resource and environmental achieving connection. characteristics (temperature and wind speed). • Permitting requirements and likelihood of achieving • Assessment of shading (horizon and nearby buildings these. and objects). In order to keep expenditure low, estimated costs are likely • Outline layout of areas suitable for PV development. to be based on indicative quotes or comparisons with similar projects. Similarly, conceptual design will be based on readily • Assessment of technology options providing cost/ benefit for the project locations. This includes available information. The method for assessing the likelihood assessment of: of obtaining a grid connection or obtaining planning (or other) consents will depend on the location of the project. • Module type. To start off, initial contact should generally be made with the • Mounting System. relevant organisations. • Outline system design. The site and resource assessments will constrain the area • Application for outline planning permission. likely to be viable for project use. At the pre-feasibility stage, these assessments should take the form of a desk-top study. • Grid connection – more detailed assessment of likelihood, cost and timing. While a full energy yield is not required, an initial energy • Predicted energy yields. yield should be carried out using solar resource data and estimates of plant losses (based on nominal values seen in • Financial modelling. existing projects). The feasibility study may overlap with the development phase depending on the priorities of the developer. 4.4.1  Outline System Design Outline system design provides a basis for all project development activities from estimating costs to tendering for contractors. It is also required for planning permission applications. While a conceptual design will have been 52 Utility Scale Solar Power Plants developed as part of the pre-feasibility study, it may be • Information required for submission. worthwhile assessing various design configurations at this stage • Method of submission (online or via the planning in order to ensure that an optimised design is selected. department office). Specific tasks include: • Standard restrictions for the area of the development (for example zoning regulations). • Calculation of shade and initial PV plant layout. This • Process for making amendments at a later date. process of optimisation typically takes into account: • Shading angles. An application for outline planning (or other) permission should form part of the feasibility stage. A full application • O&M requirements. should be made during the development process. • Module cleaning strategy. It should be stressed that regulatory requirements vary • Tilt angle and orientation. widely in different regions. The particular requirements of the • Temperature and wind profiles of the site. Indian market are covered in detail in Section 8.3. • Cable runs and electrical loss minimisation. 4.5 Development • Module selection. This is a selection based on the feasibility phase output, current availability and The development phase of the project takes the project from pricing in the market place. the feasibility stage through to financial closure. The suggested • Inverter selection. scope of work in this phase consists of: • Mounting frame or tracking system selection, • Preparation and submission of the permit including consideration of site specific conditions. applications for the proposed solar PV project. • Electrical cabling design and single line diagrams. • Preparation and submission of a grid connection application. • Electrical connections and monitoring equipment. • Revision of the design and planning permissions. • Grid connection design. • Decision on contracting strategy (i.e. single EPC • Full energy yield analysis using screened solar data contract or multi-contract). and the optimised layout. • Decision on the financing approach. 4.4.2  Planning Applications • Preparation of solar PV module tender documentation. Advice on planning documentation requirements in the project area can be obtained from the local planning • Supplier selection and ranking. department or from an experienced consultant. The type of • Preparation of construction tender documentation. information that needs to be considered includes: • Contractor selection and ranking. • Permits or licences required. • Contract negotiations. • Timescales for submission and response. A Guide For Developers and Investors 53 • Completion of a bankable energy yield. The EIA should consider the likely environmental effects of the proposed development based upon current knowledge of • Preparation of a financial model covering the full the site and the surrounding environment. This information lifecycle of the plant. will determine what specific studies are required. The EIA • Completion of a project risk analysis. should then assess ways of avoiding, reducing or offsetting any potentially significant adverse effects. The studies will • Environmental impact assessment. also provide a baseline case that can be used in the future to • Production of a detailed project report. determine the impact of the project. • Securing financing for the project. Guidance on the significance of impacts is mainly of a generic nature. However, it is broadly accepted that this 4.5.1  Bankable Energy Yield Prediction significance reflects the relationship between a number of In the development stage, a bank grade energy yield will be factors: required to secure finance. It is advised that this energy yield • The magnitude or severity of an impact (that is, the is either carried out or reviewed by an independent specialist. actual change taking place to the environment). This will ensure that confidence can be placed in the results and will help attract investment. • The importance or value of the affected resource or receptor. The energy yield should include: • The duration involved. • An assessment of the inter-annual variation and yield • The reversibility of the effect. confidence levels. • The number and sensitivity of receptors. • Consideration of site-specific factors, including soiling or snow, and the cleaning regime specified in The significance, importance or value of a resource is the O&M contract. generally judged on the following criteria: • Full shading review of the PV generator including • The land’s designated status within the land use near and far shading. planning system. • Detailed losses. • The number of individual receptors. • A review of the proposed design to ensure that • An empirical assessment on the basis of parameters are within design tolerances. characteristics such as rarity or condition. 4.5.2  Environmental Impact Assessment • Ability to absorb change. It is recommended that the EIA is carried out by an An Environmental Impact Assessment (EIA) is likely to be experienced Environmental Impact Assessor or similarly required for projects over a certain size. It is an assessment qualified person. of the possible impact, positive or negative, that a proposed project may have on the environment. The EIA should consider the natural, social and economic aspects of a project’s construction and operation during its lifespan. 54 Utility Scale Solar Power Plants 4.5.3  Detailed Project Report The main output of the development phase will be a • Spare parts inventory cost. detailed project report. This will be used to secure finance from banks or investors (more information on financing is • Connection cost for electricity and services. in Section 13). The information should be project-specific • Details of the permitting and planning status. including all relevant information in a professional and clear format. The items detailed below give examples of the • Environmental impact assessment, restrictions and mitigation plans. information that should be included: 4.5.4  Contract Strategy • Site layout (showing the location of modules, inverters and buildings). Indicative plans showing: There are two main contracting strategies that a developer • Mounting frame and module layout. may consider: multi-contract and single EPC contract. • Inverter locations and foundations/housings. A multi-contract approach will require significantly more • Security measures. project management from the developer during the design and construction phase. However, it will be cheaper than an EPC • Buildings and other infrastructures. approach. • Initial electrical layouts: The higher cost EPC option transfers significant risks • Schematics of module connections through to from the developer to the contractor. If this option is chosen, the inverter. then the detailed design stage will be completed by the • Single line diagrams showing anticipated cable EPC contractor. The developers will need to ensure that routes. the tender documentation is accurate and includes all the required information and systems. It will be easier and more • Grid connection and potential substation requirements. economical to make changes before the contracts are signed. If the developer has little or no experience, or is unsure of any • Bill of materials for major equipment. aspect of the project, it is advised that they seek advice from an • Energy yield analysis. experienced consultant in that area. • Losses assumed with regard to the energy yield There is no single preferred contracting approach. The forecast. approach taken will depend on the experience, capabilities and • Financial model inputs including: cost sensitivity of the developer. • Long term O&M costs and contingencies (up to the end of the design life and/or debt term). • Availability assumptions. • Degradation of module performance assumptions. A Guide For Developers and Investors 55 4.6  Detailed Design 5. SITE SELECTION This phase will prepare the necessary detail and 5.1 Introduction documentation to allow construction of the solar PV plant to be carried out. The following documentation will be prepared: Selecting a suitable site is a crucial component of developing a viable solar PV project. There are no clear cut rules for site • Detailed layout design. selection. Viable projects have been developed in locations • Detailed civil design (buildings, foundation, access that may seem unlikely on first look, such as on high gradient roads). mountain slopes, within wind farms and on waste disposal sites. In general, the process of site selection must consider • Electrical detailed design. the constraints and the impact they will have on the cost of • Revised energy yield. the electricity generated. The main constraints that need to be assessed include: • Construction plans. • Project schedule. • Solar resource. • Interface matrix. • Local climate. • Commissioning plans. • Available area. The key electrical systems must be designed in rigorous • Land use. detail. This will include equipment required for protection, • Topography. earthing, and interconnection to the grid. The following designs and specifications should be prepared: • Geotechnical. • Geopolitical. • Overall single line diagrams. • Accessibility. • MV & LV switchgear line diagrams. • Grid connection. • Protection systems. • Module soiling. • Interconnection systems and design. • Water availability. • Auxiliary power requirements. • Financial incentives. • Control systems. “Showstoppers” for developing a utility scale PV power The civil engineering items should be developed to a level plant in a specific location may include constraints due to suitable for construction. These will include designs of array a low solar resource, low grid capacity or insufficient area. foundations and buildings, as well as roads and infrastructure However, a low solar resource could be offset by high local required for implementation and operation. The design basis financial incentives, making a project viable. A similar criteria should be determined in accordance with national balancing act applies to the other constraints. These are standards. The wind loadings should be calculated to ensure discussed further below. that the design will be suitable for the project location. 56 Utility Scale Solar Power Plants 5.2  Site Selection Constraints 5.2.1  Solar Resource A high average annual GHI is the most basic consideration Depending on the site location (latitude) and the type for developing a solar PV project. The higher the resource, the of PV module selected (efficiency), a well-designed PV greater the energy yield per kWp installed. When assessing the power plant with a capacity of 1 MWp developed in India is GHI at a site, care must be taken to minimise any shading that estimated to require between one and two hectares (10,000 will reduce the irradiation actually received by the modules. to 20,000 m2) of land. A plant using lower efficiency CdTe Shading could be due to mountains or buildings on the far thin film modules may require approximately 40 to 50% horizon, or mutual shading between rows of modules, or more space than a plant using poly-crystalline modules. shading near the location due to trees, buildings or overhead Figure 15 shows a large ground mounted plant. cabling. Avoiding shading is critical as even small areas of shade may significantly impair the output of a module or 5.2.3 Climate string of modules. The loss in output could be more than predicted by simply assessing the proportion of the modules In addition to a good solar resource, the local climate that are shaded. should not suffer from extremes of weather that will increase the risk of damage or downtime. Weather events that may When assessing shading, it must be remembered that the need consideration include: path the sun takes through the sky changes with the seasons. An obstacle that provides significant shading at mid-day in • Flooding – May increase the risk of erosion of December may not provide any shading at all at mid-day in support structure and foundations, depending on geo-technical conditions. June. The shading should be assessed using the full sun-path diagram for the location. • High wind speeds – The risk of a high wind event exceeding the plant specifications should be 5.2.2 Area assessed. Locations with a high risk of damaging wind speeds should be avoided. Fixed systems do not shut down at high wind speeds, but tracking The area required per kWp of installed power varies with systems must shut down in safe mode when speeds the technology chosen. The distance between rows of modules of 16-20 m/s are exceeded. (the pitch) required to avoid significant inter-row shading varies with the site latitude. Sites should be chosen with • Snow – Snow settling on modules can significantly reduce annual energy yield if mitigating measures sufficient area to allow the required power to be installed are not taken. If the site is prone to snow, then one without having to reduce the pitch to levels that cause has to consider factors such as extra burden on the unacceptable yield loss. mounting structures, the loss in energy production and the additional cost of higher specification modules or support structures. The cost of removing the snow needs to be weighed against A Guide For Developers and Investors 57 Figure 15: Large Scale PV Plant 5.2.4 Topography the loss in production and the likelihood of further Ideally, the site should be flat or on a slight south facing snowfall. The effects of snow can be mitigated by a (in the northern hemisphere) slope. Such topography design with a high tilt angle and frameless modules. makes installation simpler, and reduces the cost of technical The design should also ensure that the bottom edge modifications required to adjust for undulations in the of the module is fixed higher than the average snow level for the area. A site that has regular coverings of ground. With additional cost and complexity of installation, snow for a long period of time may not be suitable mounting structures can be designed for most locations. In for developing a solar PV plant. general, the cost of land must be weighed against the cost of designing a mounting structure and installation time. • Temperature – The efficiency of a PV power plant reduces with increasing temperature. If a high temperature site is being considered, mitigating 5.2.5 Geotechnical measures should be included in the design and technology selection. For instance, it would be A geotechnical survey of the site is recommended prior to better to choose modules with a low temperature final selection. The purpose is to assess the ground conditions coefficient for power. in order to take the correct design approach, and to ensure that the mounting structures will have adequate foundations. The level of the geotechnical survey required will depend on the foundation design that is envisaged. 58 Utility Scale Solar Power Plants 5.2.7  Grid Connection Best practice dictates that either boreholes or trial pits are A grid connection of sufficient capacity is required to made at regular intervals and at a depth appropriate for the enable the export of power. The viability of grid connection foundation design. The boreholes or trial pits would typically will depend on three main factors: capacity, availability and assess: proximity. These factors should be considered thoroughly at an early stage of a project; otherwise, the costs could become • The groundwater level. prohibitive if the site is later found to be in an unfavourable • The resistivity of the soil. area for grid connection. • The load-bearing properties of the soil. • Capacity – The capacity for the grid to accept exported power from a solar plant will depend on the • The presence of rocks or other obstructions. existing network infrastructure and current use of the system. The rating of overhead lines, cables and • The soil pH and chemical constituents in order to transformers will be an important factor in assessing assess the degree of corrosion protection required and the connection capacity available. Switchgear fault the properties of any cement to be used. levels and protection settings may also be affected The geotechnical study may also be expected to include an by the connection of a generation plant. In cases where a network does not have the existing capacity assessment of the risk of seismic activity and the susceptibility to allow connection, there are two options available: to frost, erosion and flooding. 1) to reduce peak power export to the allowable limits of the network or 2) to upgrade the network to 5.2.6 Access allow the desired export capacity. Network upgrade requirements will be advised by the network operator. The site should allow access for trucks to deliver plant and But some aspects of that upgrade can be carried out by contractors other than the network operator. Initial construction materials. This may require upgrading existing investigation into network connection point capacity roads or building new ones. At a minimum, access roads can often be carried out by reviewing published data. should be constructed with a gravel chip finish or similar. However, discussion with the network operator will be The closer the site is to a main access road, the lower the cost required to fully establish the scope of work associated of adding this infrastructure. Safe packaging of the modules with any capacity upgrades. and their susceptibility to damage in transport must also be • Proximity – A major influence on the cost of carefully considered. connecting to the grid will be the distance from the site to the grid connection point. Sites should be The site should be in a secure location where there is little at locations where the cost of grid connection does risk of damage from either people or wildlife. It should ideally not adversely affect project economics. Besides, be in a location where security and maintenance personnel can a higher connection voltage will entail increased cost of electrical equipment such as switchgear respond quickly to any issue and this requirement should be and transformers, as well as a higher conductor stipulated in the maintenance contract. specification. A higher voltage is also likely to increase the time taken to provide the connection resulting in a longer development period. • Availability – The grid availability describes the percentage of time that the network is able to export power from the solar PV plant. The annual energy A Guide For Developers and Investors 59 yield from a plant may be significantly reduced if the Clearances from the military may be required if the site is in grid has significant downtime. This may have adverse or near a military-sensitive area. Glare from solar modules can effects on the economics of the project. Availability affect some military activities. statistics should be requested from the network operator to establish the expected downtime of the network. In developed areas, the availability of the 5.2.9  Module Soiling grid is usually very high. If the modules are soiled by particulates, then the efficiency 5.2.8  Land Use of the solar plant could be significantly reduced. It is, therefore, important to take into account local weather, environmental, Solar PV power plants will ideally be built on low value human and wildlife factors while determining the suitability of land. If the land is not already owned by the developer, then a site for a solar PV plant. The criteria should include: the cost of purchase or lease needs to be considered. The developer must purchase the land or rights for the duration • Dust particles from traffic, building activity, of the project. Besides access to the site, provision of water, agricultural activity or dust storms. electricity supplies and the rights to upgrade access roads must • Module soiling from bird excreta. Areas close to be considered along with relevant land taxes. nature reserves, bird breeding areas and lakes should be carefully assessed. Since government permission will be required to build a solar plant, it is necessary to assess the site in line with the local Soiling of modules may require an appropriate maintenance conditions imposed by the relevant regulatory bodies. If the and cleaning plan at the site location. land is currently used for agricultural purposes, then it may need to be re-classified for “industrial use” with cost and time 5.2.10  Water Availability implications—and the possibility of outright rejection. Clean, low mineral content water is preferred for cleaning The future land use of the area must also be taken into modules. A mains water supply, ground water, stored water or account. It is likely that the plant will be in operation for access to a mobile water tank may be required; the cost of the at least 25 years. As such, extraneous factors need to be various options will have an impact on the project economics. considered to assess the likelihood of their impact on energy The degree to which water availability is an issue will depend yield. For example, the dust associated with building projects upon the expected level of module-soiling, the extent of natural could have significant impact on the energy yield of the plant. cleaning due to rainfall and the required cleaning frequency. Locating the plant in an environmentally sensitive area 5.2.11  Financial Incentives should be avoided. Government stipulated environmental impact assessments or plant/wildlife studies will slow down Financial incentives (such as feed-in tariffs or tax breaks) in and potentially stop the development of a project. different countries, or regions within countries, have a strong bearing on the financial viability of a project. Such incentives Any trees on the project site and surrounding land may need could outweigh the costs associated with one or more of the to be felled and removed, with associated cost. site selection constraints. 60 Utility Scale Solar Power Plants 6. ENERGY YIELD PREDICTION An important step in assessing project feasibility and 2. Calculating the irradiation incident on the tilted attracting finance is to calculate the electrical energy expected collector plane for a given time step. from the PV power plant. The energy yield prediction 3. Modelling the performance of the plant with respect provides the basis for calculating project revenue. The aim of to varying irradiance and temperature to calculate the an energy yield analysis is to predict the average annual energy energy yield prediction in each time step. output for the lifetime of the proposed power plant. Typically, a 25 to 30 year lifetime is assumed. 4. Applying losses using detailed knowledge of the inverters, PV module characteristics, the site layout, DC and AC wiring, module degradation, downtime The level of accuracy needed for the energy yield prediction and soiling characteristics. depends on the stage of project development. For example, a preliminary indication of the energy yield can be carried out 5. Applying statistical analysis of resource data and assessing the uncertainty in input values to derive using solar resource data and estimates of plant losses based on appropriate levels of uncertainty in the final energy nominal values seen in existing projects. For a more accurate yield prediction. energy yield prediction, software could be used to illustrate detailed plant specifications and three-dimensional modelling These steps are described in more detail in the following of the layout. Modelling will also help assess shading losses sections. within time-step simulation. 6.1  Irradiation on Module Plane To accurately estimate the energy produced from a PV power plant, information is needed on the solar resource In order to predict the solar resource over the lifetime and temperature conditions of the site in addition to the of a project, it is necessary to analyse historical data for the layout and technical specifications of the plant components. site. These data are typically given for a horizontal plane. Sophisticated software is often used to model the complex The assumption is that the future solar resource will follow interplay of temperature, irradiance, shading and wind- the same patterns as the historical values. Historical data induced cooling on the modules. While a number of software may be obtained from land-based measurements or from packages can predict the energy yield of a PV power plant information obtained from satellite imagery as described in at a basic level, financiers generally require an energy yield Section 3.2.1 Data in hourly or sub-hourly time steps are prediction carried out by a suitable expert. preferred. Statistical techniques can be used to convert average monthly values into simulated hourly values if these are not Typically, the procedure for predicting the energy yield of immediately available. a PV plant using time-step (hourly or sub-hourly) simulation software will consist of the following steps: Horizontal plane irradiation may be divided into its diffuse and direct components. Models are used to calculate the 1. Sourcing modelled or measured environmental data resource on the specific plane at which the modules are tilted. such as irradiance, wind speed and temperature Part of this calculation will take into account the irradiance from land-based meteorological stations or satellite reflected from the surroundings towards the modules. The imagery (or a combination of both). This results in degree to which the ground is able to diffusely reflect radiation a time series of “typical” irradiation on a horizontal plane at the site location along with typical is quantified by the albedo values, which vary according to environmental conditions. surface properties. A higher albedo factor translates into A Guide For Developers and Investors 61 6.4  Uncertainty in the Energy Yield Prediction greater reflection and so higher levels of diffuse irradiation. The uncertainty of energy yield simulation software depends For example, fresh grass has an albedo factor of 0.26, reducing on each modelling stage and on the uncertainty in the input down to a minimum of approximately 0.15 when dry. Asphalt variables. Modelling software itself can introduce uncertainty has a value between 0.09 and 0.15 or 0.18 if wet. of 2% to 3%. 6.2  Performance Modelling The typical relative accuracy of measurements at meteorological (MET) stations by a well-maintained Sophisticated simulation software is used to predict the pyranometer is 3-5%. This represents the upper limit in performance of a PV power plant in time steps for a set of accuracy of resource data obtained through MET stations. conditions encountered in a typical year. This allows a detailed However, in many cases, the presence of a MET station at the simulation of the efficiency with which the plant converts solar project location (during preceding years) is unlikely. If this irradiance into AC power and the losses associated with the is the case, solar resource data will likely have been obtained conversion. Some of these losses may be calculated within the using satellites or interpolation as described in Section simulation software, others are based on extrapolations of data 3.2. This will increase the uncertainty in the resource data from similar PV plants and analysis of the site conditions. depending on the quality of the satellite or the distance from a well maintained MET station. In general, resource data Depending on specific site characteristics and plant design, uncertainty of 7.5%[33] or higher may be expected. losses may be caused by any of the factors described in Table 5. Energy yield prediction reports should consider and Uncertainty in other modelling inputs include estimates (ideally) quantify each of these losses. In individual cases, in downtime, estimates in soiling, uncertainty in the inter- some of the losses may be negated or considered in logical annual variation in solar resource and errors due to module groupings. specifications not accurately defining the actual module characteristics. 6.3  Energy Yield Prediction Results The energy yield depends linearly, to a first approximation, The predicted annual energy yield may be expressed within on plane of array irradiance. Therefore uncertainty in the a given confidence interval. A P90 value is the annual energy resource data has a stronger bearing on the uncertainty in yield prediction that will be exceeded with 90% probability; the yield prediction than does the accuracy of PV modelling. P75 is the yield that will be exceeded with 75% probability; Total uncertainty figures of up to 10% may be expected. A while P50, the expected value, is the annual energy yield good energy yield report will quantify the uncertainty for the prediction that will be exceeded with 50% probability. Good specific site location. quality energy yield reports used by investors will give the P50 and P90 energy yield prediction values as a minimum. [33] “Quality of Meteonorm Version 6.0”, Jan Remund, World Renewable Energy Congress 2008. 62 Utility Scale Solar Power Plants Table 5: Losses in a PV Power Plant Loss Description The solar resource can be reduced significantly in some locations due to air pollution from Air pollution industry and agriculture. Due to mountains or buildings on the far horizon, mutual shading between rows of modules Shading and near shading due to trees, buildings or overhead cabling. The incidence angle loss accounts for radiation reflected from the front glass when the light Incident angle striking it is not perpendicular. For tilted PV modules, these losses may be expected to be larger than the losses experienced with dual axis tracking systems, for example. The conversion efficiency of a PV module generally reduces at low light intensities. This causes a loss in the output of a module compared with the standard conditions at which the modules Low irradiance are tested (1,000W/m2). This 'low irradiance loss' depends on the characteristics of the module and the intensity of the incident radiation. The characteristics of a PV module are determined at standard temperature conditions of 25°C. For every degree rise in Celsius temperature above this standard, crystalline silicon modules Module temperature reduce in efficiency, generally by around 0.5%. In high ambient temperatures under strong irradiance, module temperatures can rise appreciably. Wind can provide some cooling effect which can also be modelled. Losses due to soiling (dust and bird droppings) depend on the environmental conditions, rainfall frequency and on the cleaning strategy as defined in the O&M contract. This loss can be relatively large compared to other loss factors but is usually less than 4%, unless there Soiling is unusually high soiling or problems from snow settling on the modules for long periods of time. The soiling loss may be expected to be lower for modules at a high tilt angle as inclined modules will benefit more from the natural cleaning effect of rainwater. A Guide For Developers and Investors 63 Table 5: Losses in a PV Power Plant Loss Description Most PV modules do not match exactly the manufacturer’s nominal specifications. Modules are sold with a nominal peak power and a guarantee of actual power within a given tolerance Module quality range. The module quality loss quantifies the impact on the energy yield due to divergences in actual module characteristics from the specifications. Losses due to “mismatch” are related to the fact that the modules in a string do not all Module mismatch present exactly the same current/voltage profiles; there is a statistical variation between them which gives rise to a power loss. Electrical resistance in the cable between the modules and the input terminals of the inverter DC cable resistance give rise to ohmic losses (I2R). This loss increases with temperature. If the cable is correctly sized, this loss should be less than 3% annually. Inverter performance Inverters convert from DC into AC with an efficiency that varies with inverter load. This includes transformer performance and ohmic losses in the cable leading to the AC losses substation. Downtime is a period when the plant does not generate due to failure. The downtime Downtime periods will depend on the quality of the plant components, design, environmental conditions, diagnostic response time and the repair response time. 64 Utility Scale Solar Power Plants Table 5: Losses in a PV Power Plant Loss Description Grid availability and The ability of a PV power plant to export power is dependent on the availability of the disruption distribution or transmission network. Typically, the owner of the PV power plant will not own the distribution network. He, therefore, relies on the distribution network operator to maintain service at high levels of availability. Unless detailed information is available, this loss is typically based on an assumption that the local grid will not be operational for a given number of hours/days in any one year, and that it will occur during periods of average production. Degradation The performance of a PV module decreases with time. If no independent testing has been conducted on the modules being used, then a generic degradation rate depending on the module technology may be assumed. Alternatively, a maximum degradation rate that conforms to the module performance warranty may be considered. MPP tracking The inverters are constantly seeking the maximum power point (MPP) of the array by shifting inverter voltage to the MPP voltage. Different inverters do this with varying efficiency. Curtailment of Yield loss due to high winds enforcing the stow mode of tracking systems. tracking Auxiliary power Power may be required for electrical equipment within the plant. This may include security systems, tracking motors, monitoring equipment and lighting. It is usually recommended to meter this auxiliary power requirement separately. Grid Compliance Loss This parameter has been included to draw attention to the risk of a PV power plant losing energy through complying with grid code requirements. These requirements vary on a country to country basis. A Guide For Developers and Investors 65 Figure 16: Uncertainty in Energy Yield Prediction Figure 16 represents the typical combined uncertainties in uncertainty in energy yield when inter-annual variability is the yield prediction for a PV power plant. The dashed blue combined with the uncertainty in the yield prediction. The line shows the predicted P50 yield. The green lines represent total uncertainty decreases over the lifetime of the PV plant. uncertainty in energy yield due to inter-annual variability The lower limit on the graph corresponds to the P90 and the in solar resource. The solid red lines represent the total upper limit corresponds to the P10. 66 Utility Scale Solar Power Plants Case Study 2 Energy Yield Prediction The developer of a the 5MW plant in Tamil Nadu required a solar energy yield prediction to confirm project feasibility and assess likely revenues. The developer did not consider the range of available input data or conduct a long term yield prediction over the life of the project; both of these would have been useful to derive a more accurate yield figure, particularly for potential project financiers. The developer sourced global horizontal irradiation data for the site location (see case study 1). Commercially available software was used to simulate the complex interactions of temperature and irradiance impacting the energy yield. This software took the plant specifications as input and modelled the output in hourly time steps for a typical year. Losses and gains were calculated within the software. These included: • Gain due to tilting the module at 10º. • Reflection losses (3.3%). • Losses due to a lower module efficiency at low irradiance levels (4.2%). • Losses due to temperatures above 25ºC (6%). • Soiling losses (1.1%). • Losses due to modules deviating from their nominal power (3.3%). • Mismatch losses (2.2%). • DC Ohmic losses (1.8%). • Inverter losses (3.6%). A Guide For Developers and Investors 67 The software gave an annual sum of electrical energy expected at the inverter output in the first year of operation. Although this is a useful indicative figure, an improved energy yield prediction would also consider: • Inter-row shading losses (by setting up a 3D model). • Horizon shading, if any. • Near shading from nearby obstructions including poles, control rooms and switch yard equipment. • AC losses. • Downtime and grid availability. • Degradation of the modules and plant components over the lifetime of the plant. The results will ideally show the expected output during the design life of the plant and assess the confidence in the energy yield predictions given by analysing: • The uncertainty in the solar resource data used. • The uncertainty in the modelling process. • The inter-annual variation in the solar resource. The energy yield prediction for the 5MW plant was provided as a first year P50 value (the value expected with 50% probability in the first year) excluding degradation. The confidence that can be placed in the prediction would typically be expressed by the P90 value, the annual energy yield prediction that will be exceeded with 90% probability. Projects typically, have a financing structure that requires them to service debt once or twice a year. The year on year uncertainty in the resource is therefore taken into account by expressing a “one year P90”. A “ten year P90” includes the uncertainty in the resource as it varies over a ten-year period. The exact requirement will depend on the financial structure of the project and the requirements of the financing institution. 68 Utility Scale Solar Power Plants 7. PLANT DESIGN Designing a megawatt-scale PV power plant is a complex thin film amorphous silicon, it should be realised that process that requires considerable technical experience and each technology has examples of high quality and low knowledge. There are many compromises that need to be quality products from different manufacturers. made in order to achieve the optimum balance between • Different technologies have a differing spectral performance and cost. This section highlights some of the key response and so will be better suited for use in certain issues that need to be considered when designing a PV plant. locations, depending on the local light conditions. • Amorphous silicon modules generally perform better 7.1  Technology Selection under shaded conditions than crystalline silicon modules. Many of them show a better response in 7.1.1 Modules low light levels. While certification of a module to IEC/CE/UL standards • The nominal power of a module is given with a tolerance. Some modules may be rated with a (as described in Section 2.3.6) is important, it says very little ±5% tolerance while others are given with a ±3% about the performance of the module under field conditions of tolerance. Some manufacturers routinely provide varying irradiance and temperature. It is also relatively difficult modules at the lower end of the tolerance, while to find comprehensive and independent module performance others provide modules that achieve their nominal comparisons. In addition, modules tested under a specific power or above (positive tolerance). set of conditions of irradiance, temperature and voltage, • When ordering a large number of modules, it with a specific inverter, may perform very differently under is recommended to have a sample of modules alternative conditions with a different inverter. independently tested to establish the tolerance. • The value of the temperature coefficient of power This makes choosing a module a more difficult process than will be an important consideration for modules it may first appear. Many developers employ the services of installed in hot climates. an independent consultant for this reason. When choosing modules, the following key aspects should be considered: • The degradation properties and long term stability of modules should be understood. The results of independent testing of modules can sometimes be • The aim is to keep the levelised cost of electricity [34] found in scientific journals or papers from research (LCOE) at a minimum. When choosing between institutes. high efficiency-high cost modules and low efficiency- low cost modules, the cost and availability of land • The manufacturers’ warranty period is useful for and plant components will have an impact. High distinguishing between modules but care should be efficiency modules require significantly less land, taken with the power warranty. Some manufacturers cabling and support structures per MWp installed offer as guarantee of performance the percentage of than low efficiency modules. the peak power for a given duration; others give it as a percentage of the minimum peak power (that is, • When choosing between module technologies such as the peak power minus the tolerance). mono-crystalline silicon, multi crystalline silicon and • Frameless modules may be more suitable for locations that experience snow, as snow tends to slide off these modules more easily. [34] The cost per kWh of electricity generated that takes into account the time value of money. A Guide For Developers and Investors 69 • Other parameters important for selection of modules beyond 25 years. The conditions listed in both the include: cost ($/Wp), lifetime, and maximum power guarantee and product guarantee are important, system voltage. and vary between manufacturers. 7.1.2  Quality Benchmarks • Lifetime – Good quality modules with the appropriate IEC certification have a design life in excess of 25 • Product guarantee – In the EU, manufacturers are years. Beyond 30 years, increased levels of degradation legally bound to provide a product guarantee ensuring may be expected. The lifetime of crystalline modules that modules will be fully functional for a minimum has been proven in the field. Thin film technology of 2 years. Some companies guarantee a longer period, lifetimes are currently unproven and rely on with 5-6 years being the usual duration. accelerated lifetime laboratory tests, but are expected to be in the order of 25-30 years also. • Power guarantee – In addition to the product guarantee, most manufacturers grant nominal power The module data sheet format and the information that guarantees. These vary between manufacturers but a should be included has been standardised and is covered by EN typical power guarantee stipulates that the modules 50380, which is the “data sheet and nameplate information for will deliver 90% of the original nominal power after photovoltaic modules”. An example of the information expected 10 years and 80% after 25 years. So far no module in a data sheet is provided in Table 6. manufacturer has offered a power output guarantee Table 6: Comparison of Module Technical Specifications at STC Manufacturer Xxxx Module Model Xxxx Nominal power (PMPP) 210 Wp Power tolerance ±3% Voltage at PMAX (VMPP) 26.5 V Current at PMAX (IMPP) 7.93 A Open circuit voltage (VOP) 33.2 V Short circuit current (ISC) 8.54 A Maximum system voltage 1000 VDC Module efficiency 14.33% Operating temperature -40°C to +85°C Temperature coefficient of PMPP -0.41%/°C Dimensions 1480×990×50 mm Module area 1.47 m2 Weight 18 kg Maximum load 5400 Pa Product warranty 5 years Performance guarantee 90%: after 10 years; 80%: after 25 years 70 Utility Scale Solar Power Plants 7.1.2 Inverters No single inverter concept is best for all situations. In efficiency are major inverter selection criteria, directly affecting practice, the local conditions and the system components have the annual revenue of the solar PV plant. It is also important to be taken into account to tailor the system for the specific to bear in mind that efficiency varies according to a number application. Different solar PV module technologies and of factors. Of them, DC input voltage and percentage load are layouts may suit different inverter types. So care needs to be the two dominant factors. Several other factors should inform taken in the integration of modules and inverters to ensure inverter selection, including site temperature, product reliability, optimum performance and lifetime. maintainability, serviceability and total cost of ownership. A thorough financial analysis is required to determine the most Among the major selection criteria for inverters, the cost-effective inverter option. Many of the inverter selection financial incentive scheme and the DC-AC conversion criteria listed in Table 7 may feed into this analysis. Table 7: Inverter Selection Criteria Criterion Description Banding of financial incentive mechanisms may have an influence on the choice of inverter. For example, feed-in tariff Incentive scheme (FiT) schemes might be tiered for different plant sizes which may, in turn, influence the inverter size. Size influences the inverter connection concept. Central Project size inverters are commonly used in large solar PV plants. High efficiency inverters should be sought. The additional yield usually more than compensates for the higher initial cost. The way the efficiency has been defined should be carefully considered. Performance Consideration must also be given to the fact that efficiency changes with DC input voltage, percentage of load, and several other factors. MPP range A wide MPP range allows flexibility and facilitates design. National electrical regulations might set limits on the maximum power difference between the phases in the case of 3-phase or single phase output an asymmetrical load. For example, this limit is 4.6 kVA in the German regulations. The compatibility of thin-film modules with transformer-less Module technology inverters should be confirmed with manufacturers. A Guide For Developers and Investors 71 Table 7: Inverter Selection Criteria Criterion Description A transformer inverter must be used if galvanic isolation is National and international regulations required between the DC and AC sides of the inverter. The grid code affects inverter sizing and technology. The national grid code might require the inverters to be capable of reactive power control. In that case, over-sizing inverters Grid code slightly could be required. The grid code also sets requirements on THD, which is the level of harmonic content allowed in the inverter’s AC power output. High inverter reliability ensures low downtime and maintenance and repair costs. If available, inverter mean time Product reliability between failures (MTBF) figures and track record should be assessed. If modules of different specifications are to be used, then Module supply string or multi-string inverters are recommended, in order to minimise mismatch losses. Ease of access to qualified service and maintenance personnel, and availability of parts is an important dimension to consider Maintainability and serviceability during inverter selection. This may favour string inverters in certain locations. If a fault arises with a string inverter, only a small proportion of the plant output is lost. Spare inverters could be kept locally System availability and replaced by a suitably trained electrician. With central inverters, a large proportion of the plant output would be lost (for example, 100 kW) until a replacement is obtained. Ease of expanding the system capacity and flexibility of design Modularity should be considered when selecting inverters. For sites with different shading conditions or orientations, Shading conditions string inverters might be more suitable. Outdoor/indoor placement and site ambient conditions Installation location influence IP class and cooling requirements. Plant monitoring, data logging, and remote control Monitoring/recording/telemetry requirements define a set of criteria that must be taken into account when choosing an inverter. 72 Utility Scale Solar Power Plants 7.1.2.1  Quality Benchmarks 7.1.3  Mounting Structures The guarantee offered for inverters varies among Mounting structures will typically be fabricated from steel manufacturers. A minimum guarantee of two years is typical, or aluminium, although there are examples of systems based with optional extensions of up to twenty years or more. A on wooden beams. A good quality mounting structure may be 2009 survey of inverters[35] showed that only one inverter expected to: manufacturer in the 100-500 kW range offers a guarantee longer than 20 years. • Have undergone extensive testing to ensure the designs meet or exceed the load conditions experienced at the site. While many manufacturers quote MTBF of 20 years or more, real world experience shows that inverters generally need • Allow the desired tilt angle to be achieved within a to be replaced every five to ten years. Based on a 2006 study[36], few degrees. investment in a new inverter is required three to five times • Allow field adjustments that may reduce installation over the life of a PV system. time and compensate for inaccuracies in placement of foundations. Inverter protection should include: • Minimise tools and expertise required for installation. • Incorrect polarity protection for the DC cable. • Adhere to the conditions described in the module • Over-voltage and overload protection. manufacturer’s installation manual. • Islanding detection for grid connected systems • Allow for thermal expansion, using expansion joints (depends on grid code requirements). where necessary in long sections, so that modules do not become unduly stressed. • Insulation monitoring. Purchasing good quality structures from reputable Inverters should be accompanied by the appropriate manufacturers is generally a low-cost, low-risk option. Some type test certificates, which are defined by the national manufacturers provide soil testing and qualification in order to and international standards applicable for each project and certify designs for a specific project location. country. Alternatively, custom-designed structures may be used to The inverter datasheet format and the information that solve specific engineering challenges or to reduce costs. If should be included has been standardised and is covered this route is chosen, it is important to consider the additional by EN 50524:2009 – “Data sheet and name plate for liabilities and cost for validating structural integrity. This photovoltaic inverters”. An example of the information apart, systems should be designed to ease installation. In expected in a datasheet is provided in Table 8. general, installation efficiencies can be achieved by using commercially available products. The topographic conditions of the site and information gathered during the geotechnical survey will influence the choice of foundation type. This, in turn, will affect the [35] Photon International, The Photovoltaic Magazine, April 2009 choice of support system design as some are more suited to a [36] A Review of PV Inverter Technology Cost and Performance Projections, NREL particular foundation type. Standards, Jan 2006 A Guide For Developers and Investors 73 Table 8: Inverter Specification Model XXX Manufacturer XXX Type (e.g. string, central, etc) String Maximum power 21.2 kW MPPT range 480…800 V DC Maximum voltage 1000 V Maximum current 41 A Rated power 19.2 kW Maximum power 19.2 kW Grid connection 3 AC 400 V + N, 50 – 60 Hz Maximum current 29 A Cosφ (DPF) 1 (±0.9 on demand) AC THD <2.5% Maximum efficiency 98.2% European efficiency 97.8% Internal consumption during <0.5 W night-time Transformer present No Cooling Natural convection Dimensions (WxHxD) 530 x 601 x 277 mm Weight 41 kg Working environment -25…+55°C, up to 2000 m above sea level (ASL) IP rating IP 65 as per EN 60259 Warranty 3 years (basic); can be extended to 20 years Standards compliance EN 61000-6-4:2007, EN 61000-6-2:2005, DIN IEC 721-3-3, VDE 0126-1-1 Certificates CE, UL, CSA 74 Utility Scale Solar Power Plants Foundation options for ground-mounted PV systems In marine environments or within 3 km of the sea, include: additional corrosion protection or coatings on the structures may be required. • Concrete piers cast in-situ – These are most suited to small systems and have good tolerance to Tracker warranties vary between technologies and uneven and sloping terrain. They do not have large manufacturers but a 5-10 year guarantee on parts and economies of scale. workmanship may be typical. • Pre-cast concrete ballasts – This is a common choice for manufacturers having large economies of Tracking system life expectancy depends on appropriate scale. It is suitable even at places where the ground maintenance. Key components of the actuation system such is difficult to penetrate due to rocky outcrops or as bearings and motors may need to be serviced or replaced subsurface obstacles. This option has low tolerance to uneven or sloping terrain but requires no specialist within the planned project life. skills for installation. Consideration must be given to the risk of soil movement or erosion. Steel driven piles should be hot-dip galvanised to reduce corrosion. In highly corrosive soil, additional protection • Driven piles – If a geotechnical survey proves such as epoxy coating may be necessary in order to last the suitable, a beam or pipe driven into the ground can result in low-cost, large scale installations that can 25-35 year design life. be quickly implemented. Specialist skills and pile driving machinery are required, these may not always 7.2  Layout and Shading be available. The general layout of the plant and the distance chosen • Earth screws – Helical earth screws typically made of steel have good economics for large scale installations between rows of mounting structures will be selected and are tolerant to uneven or sloping terrain. These according to the specific site conditions. The area available to require specialist skills and machinery to install. develop the plant may be constrained by space and may have unfavourable geological or topographical features. The aim 7.1.3.1  Quality Benchmarks of the layout design is to minimise cost while achieving the maximum possible revenue from the plant. In general this will The warranty supplied with support structures varies but mean: may include a limited product warranty of 10 years and a limited finish warranty of five years or more. Warranties could 1. Designing row spacing to reduce inter-row shading include conditions that all parts are handled, installed, cleaned and associated shading losses. and maintained in the appropriate way, that the dimensioning is made according to the static loads and the environmental 2. Designing the layout to minimise cable runs and associated electrical losses. conditions are not unusual. 3. Creating access routes and sufficient space between The useful life of fixed support structures, though rows to allow movement for maintenance purposes. dependent on adequate maintenance and corrosion protection, could be expected to be beyond 25 years. A Guide For Developers and Investors 75 4. Choosing a tilt angle that optimises the annual describe the celestial motion of the sun throughout the year for energy yield according to the latitude of the site and any location on earth, plotting its altitude[38] and azimuth[39] the annual distribution of solar resource. angle on a sunpath diagram as shown in Figure 17. This, along 5. Orientating the modules to face a direction that with information on the module row spacing, may be used to yields the maximum annual revenue from power production. In the northern hemisphere, this will 1. Calculate the degree of shading and usually be true south[37]. 2. Simulate the annual energy losses associated with Computer simulation software could be used to help design various configurations of tilt angle, orientation and row the plant layout. Such software includes algorithms which spacing. Horizon Line Drawing Plane: Tilt 30˚, Azimuth 0˚ 90 75 60 Sun Height [˚] 45 30 15 Behind Behind The Plane The Plane 0 -180 -150 -120 -90 -60 -30 0 30 60 90 120 150 180 Azimuth [˚] Figure 17: Sun-path Diagram for Chennai, India[40] [37] True south differs from magnetic south, and an adjustment should be made [39] The azimuth is the location of the sun in terms of north, south, east and west. from compass readings. Definitions may vary but 0° represents true south, -90° represents east, 180° [38] The elevation of the sun above the horizon (the plane tangent to the Earth‘s represents north, and 90° represents west. surface at the point of measurement) is known as the angle of altitude. [40] PVSYST V5.06 76 Utility Scale Solar Power Plants 7.2.1  General Layout Minimising cable runs and associated electrical losses may • Shading – More highly tilted modules provide suggest positioning an LV/MV station centrally within the more shading on modules behind them. As shading plant. If this option is chosen, then adequate space should impacts energy yield much more than may be expected simply by calculating the proportion of the be allocated to avoid the possibility of the station shading module shaded, a good option (other than spacing modules behind it. the rows more widely apart) is to reduce the tilt angle. It is usually better to use a lesser tilt angle as The layout should allow adequate distance from the a trade-off for loss in energy yield due to inter-row perimeter fence to prevent shading. It should also incorporate shading. access routes for maintenance staff and vehicles at appropriate • Seasonal irradiation distribution – If a particular intervals. season dominates the annual distribution of solar resource (monsoon rains, for example), it may be 7.2.2  Tilt Angle beneficial to adjust the tilt angle to compensate for the loss. Simulation software is able to assess the Every location will have an optimal tilt angle that maximises benefit of this. the total annual irradiation (averaged over the whole year) on 7.2.3  Inter-Row Spacing the plane of the collector. For fixed tilt grid connected power plants, the theoretical optimum tilt angle may be calculated The choice of row spacing is a compromise chosen to reduce from the latitude of the site. However, adjustments may need inter-row shading while keeping the area of the PV plant to be made to account for: within reasonable limits, reducing cable runs and keeping ohmic losses within acceptable limits. Inter-row shading can • Soiling – Higher tilt angles have lower soiling losses. The natural flow of rainwater cleans such modules never be reduced to zero: at the beginning and end of the day more effectively and snow slides off more easily at the shadow lengths are extremely long. Figure 18 illustrates the higher angles. angles that must be considered in the design process. l h α β a b d Figure 18: Shading Angle Diagram (Image courtesy of Schletter GmbH) A Guide For Developers and Investors 77 The shading limit angle[41] α is the solar elevation angle benefits of orientating an array that deviates significantly from beyond which there is no inter-row shading on the modules. south. For example, an array facing in a westerly direction will If the elevation of the sun is lower than α then a proportion be optimised to generate power in the afternoon. The effect of of the module will be shaded. Alongside, there will be an tilt angle and orientation on energy yield production can be associated loss in energy yield. effectively modelled using simulation software. The shading limit angle may be reduced either by reducing 7.3  Electrical Design the tilt angle β or increasing the row pitch d. Reducing the tilt angle below the optimal is sometimes a choice as this may give For most large solar PV plants, reducing the levelised cost of only a minimal reduction in annual yield. The ground cover electricity is the most important design criteria. Every aspect of ratio (GCR), given by l/d, is a measure of the PV module area the electrical system (and of the project as a whole) should be compared to the area of land required. scrutinised and optimised. The potential economic gains from such an analysis are much larger than the cost of carrying it out. For many locations a design rule of thumb is to space the modules in such a way that there is no shading at solar It is important to strike a balance between cost savings and noon on the winter solstice (December 21st in the northern quality. Engineering decisions should be ‘careful’ and ‘informed’ hemisphere). In general, if there is less than a 1% annual decisions. Otherwise, design made with a view to reduce costs in loss due to shading, then the row spacing may be deemed the present could lead to increased future costs and lost revenue acceptable. due to high maintenance requirements and low performance. Detailed energy yield simulations can be carried out to assess The design of each project should be judged on a case- losses due to shading, and to obtain an economic optimisation by-case basis, as each site poses unique challenges and that also takes into account the cost of land if required. constraints. While general guidelines and best practices can be formulated, there are no “one-size-fits all” solutions. While the 7.2.4 Orientation recommendations in the following sections are based on solar PV plants with centralised inverter architectures, many of the In the northern hemisphere, the orientation that optimises concepts discussed also apply to plants with string inverters. the total annual energy yield is true south. In the tropics, the effect of deviating from true south may not be especially The following sections are based mainly on European significant. practices. Practices will differ elsewhere. It is, therefore, crucial to bear in mind that in all cases the relevant national and Some tariff structures encourage the production of energy applicable international codes and regulations are consulted and during hours of peak demand. In such “time of day” rate followed, to ensure that the installation is safe and compliant. structures, there may be financial (rather than energy yield) [41] Also known as “critical shading angle”. 78 Utility Scale Solar Power Plants 7.3.1  DC System The DC system comprises the following plant: higher than that given by standard multiplication factors. So, this effect should also be taken into consideration. If in doubt, • Array(s) of PV modules. the manufacturer should be consulted for advice. • DC cabling (module, string and main cable). 7.3.1.1  PV Array Design • DC connectors (plugs and sockets). • Junction boxes/combiners. The design of a PV array will depend on the inverter specifications and the chosen system architecture besides the • Disconnects/switches. specific context and conditions of use. Using many modules in • Protection devices. series in high voltage arrays minimises ohmic losses. However, safety requirements, inverter voltage limits and national • Earthing. regulations also need to be considered. When sizing the DC component of the plant, the maximum • Maximum number of modules in a string – The voltage and current of the individual strings and PV array(s) maximum number of modules in a string is defined should be calculated using the maximum output of the by the maximum DC input voltage of the inverter to individual modules. Simulation programs can be used to help which the string will be connected to (VMax (Inv, DC)). with sizing but their results should be cross checked manually. Under no circumstances should this voltage be exceeded. Crossing the limit can decrease the inverter’s operational lifetime or render the device For mono-crystalline and multi-crystalline silicon modules, inoperable. The highest module voltage that can all DC components should be rated as follows, to allow for occur in operation is the open-circuit voltage in the thermal and voltage limits[42]: coldest daytime temperatures at the site location. Design rules of thumb for Europe use – 10°C as the Minimum Voltage Rating: VOC(STC) ×1.15 minimum design temperature, but this may vary according to location. The maximum number of modules in a string (nMax) may therefore be calculated Minimum Current Rating: ISC(STC) ×1.25 using the formula: The multiplication factors used above (1.15 and 1.25) are VOC(Module)@Coldest Module Operating Temperature×NMax VMPP(Inv Min) as closely as possible. This will require voltage dependency graphs of inverter efficiency (see example • Voltage optimisation – As the inverter efficiency is in Figure 19). If such graphs are not provided by dependent on the operating voltage, it is preferable inverter manufacturers, they may be obtained from to optimise the design by matching the array independent sources. Substantial increases in the Figure 19: Voltage and Power Dependency Graph of Inverter Efficiency[43] [43] Image courtesy of F.P. Baumgartner, www.zhaw.ch/~bauf 80 Utility Scale Solar Power Plants plant yield can be achieved by successfully matching Guidance on inverter and PV array sizing can be obtained the operating voltages of the PV array with the from the inverter manufacturers, who offer system sizing inverter. software. Such tools also provide an indication of the total • Number of strings – The maximum number of number of inverters required. strings permitted in a PV array is a function of the maximum allowable PV array current and the A number of factors and guidelines must be assessed when maximum inverter current. In general, this limit sizing an inverter: should not be exceeded as it leads to premature inverter ageing and yield loss. • The maximum VOC in the coldest daytime temperature must be less than the inverter maximum 7.3.1.2  Inverter Sizing DC input voltage (VInv, DC Max). It is not possible to formulate an optimal inverter sizing • The inverter must be able to safely withstand the strategy that applies in all cases. Project specifics such as the maximum array current. solar resource and module tilt angle play a very important • The minimum VOC in the hottest daytime role when choosing a design. While the rule of thumb has temperature must be greater than the inverter DC been to use an inverter-to-array power ratio less than unity, turn-off voltage (VInv, DC Turn-Off). this is not always the best design approach. For example, this • The maximum inverter DC current must be greater option might lead to a situation where the inverter manages than the PV array(s) current. to curtail power spikes not anticipated by irradiance profiles (based on one hour data). Or, it could fail to achieve grid code • The inverter MPP range must include PV array MPP compliance in cases where reactive power injection to the grid points at different temperatures. is required. • When installed, some thin film modules produce a voltage greater than the nominal voltage. This The optimal sizing is, therefore, dependent on the specifics happens for a period of time until initial degradation of the plant design. Most plants will have an inverter sizing has occurred, and must be taken into account to range within the limits defined by: prevent the inverter from being damaged. • Grid code requirements: for example, reactive power 0.833000v GRID Figure 21: Typical Transformer Locations and Voltage Levels in a Solar Plant where Export to Grid is at HV Delivery and Commission – Consideration should be transportation will still be significant and road delivery may given to the period of time required for manufacture and require special measures such as police escort. delivery of transformers. Most large transformers will be designed and built on order, and will therefore have a lengthy The positioning of the transformer in the power plant lead time, which can stretch to several years. should also be decided at the planning stage. By doing this, a transformer can be easily and safely installed, maintained The delivery of large transformers to the site can also and—in the event of a failure—replaced. Liquid-filled be a problem. Large transformers can be broken down to transformers should be provided with a bund to catch any some extent, but the tank containing the core and winding leakage. Oil-filled transformers, if sited indoors, are generally will always need to be moved in one piece. In the case of considered a special fire risk. As such, measures to reduce the transformers around the 100 MVA size, the burden of risk to property and life should be considered. 90 Utility Scale Solar Power Plants 7.3.2.4 Substation The substation houses the primary and secondary electrical Metering – Tariff metering will be required to measure the equipment for the central operation of the solar plant and export of power. This may be provided at the substation or connection to the local electricity grid. The substation can also at the point of connection to the grid. Current transformers provide an operational base for staff required for operation and voltage transformers provided in the switchgear will be and maintenance as well as stores or other auxiliary functions connected to metering points by screened cable. associated with the solar plant. Equipment such as the LV/MV transformers, MV switchgear, SCADA (Supervisory Control Data Monitoring/SCADA – SCADA systems provide and Data Acquisition) systems, protection and metering control and status indication for the items included in the systems can be placed within the substation. substation and across the solar plant. The key equipment may be situated in the substation in control and protection The layout of the substation should optimise the use of rooms. Air conditioning should be considered due to the heat space while still complying with all relevant building codes and generated by the electronic equipment in the modules. standards. A safe working space should be provided around the plant for the operation and maintenance staff. Auxiliary equipment – The design of the substation should take into account the need for auxiliary systems required for a The substation may be wholly internal or may consist of functioning substation/control room. All auxiliary equipment internal and external components such as transformers, HV should be designed to relevant standards and may include: switchgear and backup generators. Separation between MV switch rooms, converter rooms, control rooms, store rooms • LV power supplies. and offices is a key requirement, besides providing safe access, • Back-up power supplies. lighting and welfare facilities. In plants where the substation is to be manned, care should be taken to provide facilities like a • Uninterruptible power supply (UPS) batteries. canteen and washrooms. • Diesel generators. Where HV systems are present, an earth mat may need to • Auxiliary transformers and grid connections. be provided to obtain safe step/touch potentials and earth • Telephone and internet connections. system faults. Earth mats should be installed prior to setting the foundation. Lightning protection should be considered • Lighting. to alleviate the effect of lightning strikes on equipment and • Heating Ventilation and Air Conditioning (HVAC). buildings. • Water supplies. A trench is often required as a means for easing the routing • Drainage. of power and data cables to the substation. • Fire and intruder alarms. Where necessary, the substation may also need to accommodate the grid company’s equipment (which might be in a separate area of the building). Additional equipment may include: A Guide For Developers and Investors 91 7.3.2.5  Earthing and Surge Protection The earthing of a solar PV plant influences a number of risk The earthing arrangements on each site will vary, depending parameters, namely: on a number of factors: • The electric shock risk to people on site. • National electricity requirements. • The risk of fire during a fault. • Installation guidelines for module manufacturers. • The transmission of surges induced by lightning. • Mounting system requirements. • The severity of EMI. • Inverter requirements. The earthing of a solar PV plant encompasses the following: • Lightning risk. • Array frame earthing. While the system designer must decide the most appropriate earthing arrangement for the solar PV plant, one can follow • System earthing (DC conductor earthing). the general guidelines given below: • Inverter earthing. • Ground rods should be placed close to junction • Lightning and surge protection. boxes. Ground electrodes should be connected between the ground rod and the ground lug in the Earthing should be provided as a means to protect against junction box. electric shock, fire hazard and lightning. By connecting to the • A continuous earth path is to be maintained earth, charge accumulation in the system during an electrical throughout the PV array. storm is prevented. • Cable runs should be kept as short as possible. The entire PV plant and the electrical room should be • Surge suppression devices can be installed at the protected from lightning. Protection systems are usually based inverter end of the DC cable and at the array on early streamer emission, lightning conductor air terminals. junction boxes. The air terminal will be capable of handling multiple strikes of lightning current and should be maintenance-free after • Both sides of an inverter should be properly isolated before carrying out any work, and appropriate safety installation. signs should be installed as a reminder. These air terminals will be connected to respective earthing • Many inverter models include internal surge stations. Subsequently an earthing grid will be formed, arrestors. Besides, separate additional surge protection devices may be required. Importantly, connecting all the earthing stations through the required national codes and regulations, and the galvanised iron tapes. specific characteristics of each project must be taken into account. 92 Utility Scale Solar Power Plants 7.3.2.6  Quality Benchmarks The AC cable should be supplied by a reputable • Type testing to appropriate standards. manufacturer accredited to ISO 9001. The cable should have: • A minimum warranty period of two years. • Certification to current IEC and national standards • An expected lifetime at least equivalent to the design such as IEC 60502 for cables between 1 kV and life of the project. 36 kV, IEC 60364 for LV cabling and IEC 60840 for cables rated for voltages above 30 kV and • The efficiency should be at least 96%. up to 150 kV. An example of the information expected in datasheets is • Type testing completed to appropriate standards. provided in Appendix B – AC Benchmarks. • A minimum warranty period of two years. 7.4 Infrastructure • A design life equivalent to the design life of the project. A utility scale PV power plant requires infrastructure • Ultraviolet (UV) radiation and weather resistance (if appropriate to the specifics of the design chosen. Locations laid outdoors without protection). should be selected in places where buildings will not cast unnecessary shading on the PV module. It may be possible to • Mechanical resistance (for example, compression, tension, bending and resistance to animals). locate buildings on the northern edge of the plant to reduce shading, or to locate them centrally if appropriate buffer AC switchgear should be supplied by a reputable zones are allowed for. Depending on the size of the plant, manufacturer accredited to ISO 9001 and should have: infrastructure requirements may include: • Certification to current IEC and appropriate national • Office – A portable office and sanitary room with standards such as IEC 62271 for HV switchgear and communication devices. This must be watertight and IEC 61439 for LV switchgear. prevent entry to insects. It should be located to allow easy vehicular access. • Type testing to appropriate standards. • LV/MV station – Inverters may either be placed • A minimum warranty period of two years. amongst the module support structures (if string inverters are chosen) in specially designed cabinets • An expected lifetime at least equivalent to the design or in an inverter house along with the medium life of the project. voltage transformers, switchgear and metering Transformers should be supplied by reputable manufacturers system[49]. This “LV/MV station” may be equipped with an air conditioning system if it is required accredited to ISO 9001. They should have: to keep the electrical devices within their design temperature envelopes. • Certification to IEC and appropriate national standards such as IEC 60076 for the power • MV/HV station – An MV/HV station may be used transformer, IEC 60085 for electrical insulation and to collect the AC power from the medium voltage IEC 60214 for tap changers. transformers and interface to the power grid. [49] For string inverters, the LV/MV station may be used to collect the AC power. A Guide For Developers and Investors 93 7.5  Site Security • Communications – The plant monitoring PV power plants represent a large financial investment. The system and the security system will require a modules are not only valuable but also portable. Efforts should communications medium with remote access for be made to reduce the risk of theft and tampering. Such efforts visibility and control of the plant. There can also be may include: a requirement from the grid network operator for specific telephone landlines for the grid connection. Often, an Internet broadband (DSL) or satellite • Reducing the visibility of the power plant by planting shrubs or trees at appropriate locations. Care should communications system is used for remote access. A be taken that these do not shade the plant. GSM (Global System for Mobile Communications) connection or standard telephone line with • Installing a wire mesh fence with anti-climb modems is an alternative though it has a lower data protection. A fence is also recommended for transfer rate. safety reasons and may be part of the grid code requirements for public safety. Measures should be 7.4.1  Quality Benchmarks taken to allow small animals to pass underneath the fence at regular intervals. Some benchmark features of PV plant infrastructure include: • Security cameras, lights and microwave sensors with GSM and TCP/IP transmission of alarms and faults to a security company as an option. • Water-tight reinforced concrete stations or pre- fabricated steel containers. • Anti-theft module mounting bolts may be used and synthetic resin can be applied once tightened. The • Sufficient space to house the equipment and facilitate bolts can then only be released after heating the resin its operation and maintenance. up to 300°C. • Inclusion of: • Anti-theft module fibre systems may be used. These • Ventilation grilles, secure doors and concrete systems work by looping a plastic fibre through all foundations that allow cable access. the modules in a string. If a module is removed, the plastic fibre is broken. This triggers an alarm. • Interior lighting and electrical sockets. • A permanent guarding station with security guard • Either adequate forced ventilation or air- providing the level of security required in the conditioning with control thermostats, insurance policy. depending on environmental conditions. • An alarm system fitted to the power plant gate and the medium voltage station, metering station and to any portable cabins. 94 Utility Scale Solar Power Plants 7.5.1  Quality Benchmarks Some benchmark security features include: three main methods for obtaining the solar irradiance and environmental conditions: • Fence at least two meters high. • Metallic posts installed every 6m. • On-site weather stations – To measure the plane of array irradiance, module temperature and preferably • Galvanised and plastic coated fencing. horizontal global irradiance, humidity and wind speed. This is the option of preference for many • Video surveillance: current utility scale PV power plants. It allows data to be collected and compared remotely with yield • Multiple night and day cameras at a set distance figures on a daily basis for immediate fault detection. apart. • Meteorological data gathered from weather • Illumination systems (infrared) for cameras satellites – Simulation and calculation algorithms along the perimeter of the site. measure the projected power plant output. This figure becomes the benchmark for comparing values • A minimum of 12 months recording time. received from the PV plant on a daily basis, and helps 7.6  Monitoring and Forecasting detect faults immediately. This method removes the need for an onsite weather station. A number of good commercial providers of packages use this technique 7.6.1  Monitoring Technology in Europe. Rapid fault detection depends on data being made available from satellites and being If high performance, low downtime and rapid fault analysed quickly. detection is required, automatic data acquisition and • Local weather stations – This is the least desirable monitoring technology is essential. This allows the yield of the of the three options as data may not be available for plant to be monitored and compared with calculations made several months. During that period, the plant may from solar irradiation data. Monitoring and comparison also lose considerable revenue if faults in the plant go help raise warnings on a daily basis if there is a shortfall. Faults undetected. It is also possible that the local weather can be detected and rectified before they have an appreciable station does not accurately track the conditions at the effect on production. site (especially if it is some kilometres distant). In case there are other PV power plants in the vicinity of the Relying solely on manual checks of performance is not site—or one large plant is split into a number of components- advisable. A high level of technical expertise is needed to detect it is possible to compare production data and identify a fault certain partial faults at the string level. In fact, it can take with one plant. Internet-based solutions are available that many months for reduced yield figures to be identified. The function in this manner. lower yield may lead to appreciable revenue loss for a utility scale PV power plant. The on-site weather station solution is currently the most common option. Data-loggers can be used to collect data from The key to a reliable monitoring and fault detection the weather station, inverters, meters and transformers. This methodology is to have good knowledge of the solar information is transferred once a day to a server which carries irradiance, environmental conditions and plant power output out three key functions: simultaneously. This allows faults to be distinguished from, for example, passing clouds or low resource days. There are A Guide For Developers and Investors 95 • Operations management – The performance service team via fax, email or text message. management (either onsite or remote) of the PV power plant enables the tracking of inverters or • Reporting – The generation of yield reports strings. detailing individual component performance, and benchmarking the reports against those of other • Alarm management – Flagging any element of components or locations. the power plant that falls outside pre-determined performance bands. Failure or error messages can be Figure 22 illustrates the architecture of an internet portal automatically generated and sent to the power plant based monitoring system. MONITORING CENTRE SOLAR PV PLANT Main Servers Temperature Wind Speed Irradiance / Direction Metroligical Sensors Internet DSL/GPRS/GSM/TL Inverters(s) SCADA Meter(s) •  Real time data Web Interface •  Historical data •  Reporting •  Alarms (SMS, email, FAX) •  Monitoring Power •  Events •  Visualisation Transformer •  Forecasting Grid Operator REMOTE OFFICE Key SCADA  System Control and Data Acquisition DSL  Digital Subscriber Line GPRS  General Packet Radio Service GSM  Global System for Mobile Communications TL  Telephone Line Figure 22: PV System Monitoring Schematic 96 Utility Scale Solar Power Plants 7.6.2  Forecasting Technology 7.6.3  Quality Benchmarks Dispatchable power plants typically need to provide a Monitoring systems should be based on commercially forecast to the network operator. This helps to fix plant available software/hardware which is supplied with user schedules and guarantee continuity of supply. Often, manuals and appropriate technical support. production forecasts (in half hourly time-steps) are required 24 hours in advance. This entails weather forecasts coupled Depending on the size and type of the plant, minimum with power forecasting algorithms—more so since PV power parameters to be measured include: production is intermittent and random in nature. Such forecasting algorithms can use physical models, statistical • Plane of array irradiance measured to accuracy within 5% and stability within 0.5% per year. The approaches or a combination of both. At the least, the irradiation sensor will be of the same technology algorithms require the definition of: as the modules being measured, or technology independent. Silicon sensor reference cells are not • Power plant capacity. advisable for use in Performance Ratio calculations. • Module tilt and orientation. • Ambient temperature measured in a location representative of site conditions with accuracy better • Module specifications. than ±1°C. • Latitude and longitude of the plant. • Module temperature measured with accuracy better • Meteorological agency data, gathered from ground than ±1°C. This is done using a sensor thermally measurement stations and/or satellites. bonded to the back of the module in a location positioned at the centre of a cell. The algorithms typically take three-hour national and/or • Array DC voltage measured to an accuracy of regional forecasts and break them down to 30 minute local within 1%. forecasts (temporal interpolation) before using algorithms to forecast power production. Comparison of historical • Array DC current measured to an accuracy of within production and actual weather can also allow learning 1%. algorithms to be employed. Figure 23 shows the components • Inverter AC power measured as close as possible to of a forecasting system. Results of forecasting are typically the inverter output terminals with an accuracy of posted on web portals. There are a variety of commercial within 1%. forecasting products available in the market today. But • Power to the utility grid. availability may be limited to regions that have rapid access to meteorological agency’s weather data. • Power from the utility grid. • Measurement of key parameters at one-minute intervals. A Guide For Developers and Investors 97 Local Monitoring Systems National/Regional Local weather weather forecast Satellites Temporal interpolation Learning system Mask & shading Database Solar PV plant simulation Production forecast Monitoring Figure 23: Components of a Forecasting System 98 Utility Scale Solar Power Plants 7.7  Optimising System Design The performance of a PV power plant may be optimised The aim is to minimise losses. Measures to achieve this are by a combination of several enabling factors: premium described in Table 10. Reducing the total loss increases the quality modules and inverters; a good system design with annual energy yield and hence the revenue, though in some high quality and correctly installed components; and a good cases it may increase the cost of the plant. Interestingly, efforts preventative maintenance and monitoring regime leading to to reduce one type of loss may be antagonistic to efforts to low operational faults. reduce losses of a different type. It is the skill of the plant Table 10: Performance Optimisation Strategies Loss Mitigating Measure to Optimise Performance • Choose a location without shading obstacles. • Ensure that the plant has sufficient space to reduce shading between Shading modules. • Have a robust O&M strategy that removes the risk of shading due to vegetation growth. Incident angle • Use anti-reflection coatings, textured glass, or tracking. Low irradiance • Use modules with good performance at low light levels. • Choose modules with a lower negative temperature coefficient for power at Module temperature high ambient temperature locations. • Choose modules less sensitive to shading (for example amorphous silicon). Soiling • Ensure a suitable O&M contract that includes an appropriate cleaning regime for the site conditions. • Choose modules with a low tolerance. A tolerance of ±3% is typical but Module quality tolerances of between ±1.5% to ±10% are common. • Sort modules with similar characteristics into series strings where possible. Module mismatch • Avoid partial shading of a string. • Avoid variations in module tilt angle. A Guide For Developers and Investors 99 designer to make suitable compromises that result in a plant with a high performance at a reasonable cost. The ultimate aim of the designer is to create a plant that maximises financial returns. In other words, it will usually mean minimising the levelised cost of electricity. Table 10: Performance Optimisation Strategies Loss Mitigating Measure to Optimise Performance • Use appropriately dimensioned cable. DC wiring resistance • Reduce the length of DC cabling. Inverter performance • Choose correctly sized, highly efficient inverters. • Use correctly dimensioned cable. AC losses • Reduce the length of AC cabling. • Use high efficiency transformers. • Use a robust monitoring system that can identify faults quickly. Downtime • Choose an O&M contractor with good repair response time. • Keep spares holdings. • Install PV plant capacity in areas where the grid is strong and has the Grid availability potential to absorb PV power. Degradation • Choose modules with a low degradation rate and a peak power guarantee. • Choose high efficiency inverters with good maximum power point tracking MPP tracking algorithm. • Avoid module mismatch. • Ensure that tracking systems are suitable for the wind loads to which they Curtailment of tracking will be subjected. 100 Utility Scale Solar Power Plants 7.8  Design Documentation Requirements There are a number of minimum requirements that should • Mounting structure drawings with structural be included within design documentation. These include: calculations reviewed and certified by a licensed engineer. • Datasheets of modules, inverters, array mounting system and other system components. • A detailed resource assessment and energy yield prediction. • Wiring diagrams including, as a minimum, the information laid out in Table 11. • A design report. It will include information on the site location, site characteristics, solar resource, a • Layout drawings showing the row spacing and summary of the results of the geotechnical survey, location of site infrastructure. design work and the energy yield prediction. A Guide For Developers and Investors 101 Table 11: Annotated Wiring Diagram Requirements Section Required details • Module type(s) • Total number of modules Array • Number of strings • Modules per string • String cable specifications – size and type. • String over-current protective device specifications (where fitted) – type and voltage/ PV String Information current ratings. • Blocking diode type (if relevant). • Array main cable specifications – size and type. • Array junction box locations (where applicable). Array electrical details • DC isolator type, location and rating (voltage/current). • Array over-current protective devices (where applicable) – type, location and rating (voltage/current). • Details of all earth/bonding conductors – size and connection points. This includes details of array frame equipotential bonding cable where fitted. Earthing and protection • Details of any connections to an existing Lightning Protection System (LPS). devices • Details of any surge protection device installed (both on AC and DC lines) to include location, type and rating. • AC isolator location, type and rating. • AC overcurrent protective device location, type and rating. AC system • Residual current device location, type and rating (where fitted). • Grid connection details and grid code requirements. • Details of the communication protocol. Data acquisition and • Wiring requirements. communication system. • Sensors and data logging. 102 Utility Scale Solar Power Plants 7.9  Plant Design Conclusions The performance of a PV power plant may be optimised by reducing the system losses. Reducing the total loss increases the annual energy yield and hence the revenue, though in some cases it may increase the cost of the plant. In addition, efforts to reduce one type of loss may conflict with efforts to reduce losses of a different type. It is the skill of the plant designer to make compromises that result in a plant with a high performance at a reasonable cost. For plant design, there are some general rules of thumb. But specifics of project locations—such as irradiation conditions, temperature, sun angles and shading—should be taken into account in order to achieve the optimum balance between annual energy yield and economic return. It may be beneficial to use simulation software to compare the impact of different module or inverter technologies and different plant layouts on the predicted energy yield and plant revenue. The solar PV modules are typically the most valuable and portable components of a PV power plant. Safety precautions may include anti-theft bolts, anti-theft synthetic resins, CCTV cameras with alarms and security fencing. The risk of technical performance issues may be mitigated by carrying out a thorough technical due diligence exercise in which the final design documentation from the EPC contractor is scrutinised (as described in Section 13.2.2). A Guide For Developers and Investors 103 Case Study 3 Design It is vital to ensure that suitable technical expertise is brought to bear on every aspect of the plant design through in-house or acquired technical expertise. In case of the 5 MW project, the most significant of the design flaws were: Foundations: • The foundations for the supporting structures consisted of concrete pillars, cast in situ, with steel reinforcing bars and threaded steel rod for fixing the support structure base plates. This type of foundation is not recommended due to the inherent difficulty in accurately aligning numerous small foundations. • Mild steel was specified for the fixing rods. As mild steel is prone to corrosion, stainless steel rods would have been preferable. Supporting structures: • The supporting structures were under-engineered for the loads they were intended to carry; in particular, the purlins sagged significantly under the load of the modules. As supporting structures should be designed to withstand wind loading and other dynamic loads over the life of the project, this was a major problem. Extensive remedial work was required to retrofit additional supporting struts. • The supporting structure was not adjustable (i.e. no mechanism was included to allow adjustment in the positioning of modules). This is a basic mistake which compounded the flaw in the choice of foundation type; the combination of these two mistakes led to extensive problems when it came to attempting to align the solar modules. 104 Utility Scale Solar Power Plants Electrical: • String diodes were used for circuit protection instead of string fuses. Current best practice is to use string fuses, as diodes cause a voltage drop and power loss, as well as a higher failure rate. • No protection was provided at the submain or main junction boxes. This means that for any fault occurring between the array junction boxes and the DC distribution boards (DBs), the DBs will trip and take far more of the plant offline than is necessary. • No load break switches were included on junction box before the DBs. This means it is not possible to isolate the plant at the array, submain or main junction box levels for installation or maintenance. • The junction boxes did not allow for string monitoring. This reduces fault diagnosis capability. The design flaws listed above cover a wide range of issues. However, the underlying lesson is that is it vital to ensure that suitable technical expertise is brought to bear on every aspect of the plant design. Should the developer not have all the required expertise in-house, then a suitably experienced technical advisor should be engaged. It is also recommended that, regardless of the level of expertise in-house, a full independent technical due diligence is carried out on the design before construction commences. It should be borne in mind that it is far cheaper and quicker to rectify flaws at the design stage than during or after construction. A Guide For Developers and Investors 105 8. PERMITS AND LICENSING Obtaining the relevant permits and licences is essential • Civil aviation authorities (if located near an airport). to facilitate the timely completion of a project. Clearances • Local communities. also help ensure that the development proceeds in harmony with the natural environment, existing land usage and other • Health and safety agencies/departments. regulatory interests. • Electricity utilities. It is recommended that early stage consultation with key • Military authorities. authorities, statutory bodies and other relevant stakeholders is 8.2  IFC Performance Standards On Social And sought. This is valuable in the assessment of project viability, Environmental Sustainability and may guide and increase the efficiency of the development process. Early consultation can also inform the design process The social and environmental sustainability standards laid to minimise potential environmental impacts and maintain down by the International Finance Corporation (IFC) for overall sustainability of the project. all its investment projects have set an example for private companies and financial institutions. 8.1  Permitting, Licensing and Regulatory Requirements – General The IFC performance standards relate to the following key topics: The exact requirements vary from country to country but the key permits, licences and agreements typically required for • Social and Environmental Assessment and renewable energy projects include: Management System. • Land lease contract. • Labour and Working Conditions. • EIA. • Pollution Prevention and Abatement. • Building permit/planning consent. • Community Health, Safety and Security. • Grid connection contract. • Land Acquisition and Involuntary Resettlement. • Power purchase agreement. • Biodiversity Conservation and Sustainable Natural Resource Management. The authorities, statutory bodies and stakeholders that should be consulted also vary from country to country but • Indigenous Peoples. usually include the following organisation types: • Cultural Heritage. • Local and/or regional planning authority. Compliance with the IFC performance standards will not only ensure a socially and environmentally sustainable project • Environmental agencies/departments. but will also facilitate the sourcing of finance for the project. • Archaeological agencies/departments. For further detail on the IFC’s performance standards see www.ifc.org. 106 Utility Scale Solar Power Plants 8.3  Permitting, Licensing and Regulatory Requirements – India • Ministry of Defence – It is recommended that The solar PV industry in India is at an early stage of the Ministry of Defence is consulted at the land development in a rapidly changing policy and regulatory identification stage. This is necessary to ensure that the land does not lie in an unsafe zone, and environment, marked by very significant diversity between the development would have no adverse impact on different states. As such, it is not practical to describe specific defence in sensitive areas. permitting and licensing requirements for all states. Instead, this section gives a broad overview of permitting and licensing In addition, the following agreements would be required at requirements relevant to most of the country. an early stage to enable the development to proceed. 8.3.1  Project Start-up • Power Purchase Agreement (PPA) – This is an important requirement for establishing the viability of the project. In India, under the solar generation- The following key national and state level bodies should be based initiative policy of MNRE, a PPA can be consulted and the relevant approvals sought to confirm the signed with the state utilities. However, the draft viability of a project proposal. The aim would be to establish a guidelines of the National Solar Mission specify starting point for the wider permitting and licensing process. that for projects above 5MW, the PPA is signed by NTPC Vidhyut Vyapar Nigam (NVVN). Projects • Ministry of New and Renewable Energy below 5MW can be signed by the state distribution (MNRE) – The Indian renewable energy industry utilities. is reliant on policies and support mechanisms implemented by the national government. Project • Land Agreement – An agreement to procure or lease the necessary land is another key requirement for allocation and approval from the MNRE forms the developing solar projects. first step towards permitting and licensing a solar power project. MNRE has specific requirements 8.3.2  Project Development and Implementation to be fulfilled by solar project developers under its generation-based incentives scheme and the National Solar Mission. To progress the project, the developer would need to consult district and local level bodies and seek approvals • State Nodal Agencies – These are state-level agencies for development. The relevant authorities, agencies and facilitating development of renewable energy projects departments are likely to differ from district to district. approved by MNRE. Obtaining an approval from the relevant agency is an essential requirement for Examples of the types of organisations that should be engaged obtaining other licences and agreements for land include the following: lease and grid connection. • District Advisory Committee – A clearance may be • Ministry of Civil Aviation – For plants located in required from the district collector confirming that the proximity of an airport, an early consultation the project would not have an adverse impact on its with the Ministry of Civil Aviation at the time surroundings. of land assessment is essential to ensure that no objections are raised. A Guide For Developers and Investors 107 • Planning Department – The project will normally • Local Governing Bodies – In some areas, a project require prior approval from the relevant planning may fall under the jurisdiction of governing bodies department at town and district levels. for small villages. Consultation with these local bodies is key to getting consent for the project from • Archaeological Department – Consultation and the local population. Their approval can facilitate approval from the relevant archaeological department work in the construction and operation phases. will confirm that the land acquired for the project is not of historical significance. In addition, the following requirements should be noted. • Fire Safety Authority – Consultation and approval from the relevant authority may be required with • Construction power requirements – This specific licence is normally obtained from the state respect to relevant fire safety requirements during distribution utility for obtaining power required construction and operation of the project. during construction of the plant. Otherwise, stand- • Forest Authority – Consultation and approval from alone diesel generators can be utilised with prior the relevant forest authority may be required if trees permission from the pollution control board. are to be felled to prevent any shading of PV plant. It may also be prudent to confirm that the land to be • Environmental Impact Assessment – An assessment of the potential environmental impacts of the developed has not been reserved for future forestry development should be undertaken. If required, operations. appropriate mitigation measures should be identified • Pollution Control Board – Consent from the local in consultation with relevant stakeholders. As pollution control board may be required with respect a guideline, projects should adhere to the IFC to wastewater management and noise emission performance standards (see Section 8.2). control, particularly during the construction phase of the project. 8.3.3  Power Export • Irrigation Department – In addition to confirming • Grid Connection – In addition to the power that land is not subject to any relevant reservation, purchase agreement, a grid connection permit from consultation with the irrigation department may the transmission utility is required for exporting ensure water availability during construction and power. This normally specifies and confirms the operation. point and voltage level of connection. • Industrial Development Corporation – Early • Electrical Inspectorate – Electrical inspectorate consultation with such authorities at state level may approvals ensure safety on all electrical installations. yield indirect benefits to the project, depending on The approvals are likely to be mandatory various initiatives taken up by local governments for requirements of the public works department of the industrial development. state in which the plant is built. These are required through the life cycle—from pre-construction to post-commissioning—of the project. 108 Utility Scale Solar Power Plants Case Study 4 Permits and Licensing There are many permits required for a multi-megawatt PV power plant in India. An indicative, non-exhaustive list of the permits obtained for the 5MW plant built in Tamil Nadu in 2010 is shown in the table below. These apply specifically to this project and permitting will differ in other states. In addition to the permits that are suggested below, there will naturally be permits and licenses required as a result of simply operating a business in India (eg. human resource requirement) which have not been included below in the interest of focus. However, these need to be given equal attention in the development phase. A lesson learnt in the case of the Tamil Nadu plant was that comprehensive legal advice on the permits is required as well as a stringent management and follow up of the application processes. It must be noted that some permit requirements were not relevant to the Tamil Nadu plant. Permission from the Ministry of Defence, for example, was not required as the site was not in a militarily sensitive zone. The majority of the permits were applied for and in place prior to the start of construction. This is deemed best practice and sets a good example for other developers. One permission, involving land access rights, was overlooked. The main access route to the plant was through land owned by another party. Until rights are obtained, the project remains vulnerable to the risk of goodwill being withdrawn. Some permits were issued on the condition that the plant was to be completed before a certain date. This caused problems when the project was delayed. As a result, a re-application or extension was required. This illustrates the importance of effective planning of projects and scheduling of construction. A Guide For Developers and Investors 109 Area of Permission Documents Received Timing Ministry of New and Renewable Letter from MNRE confirming eligibility of the project for Prior to construction Energy (MNRE) generation-based incentive. “In-principle approval” from Tamil Nadu Energy State Nodal Agencies Prior to construction Development Agency (TEDA). Ministry of Civil Aviation Not required as not in civil aviation proximity. - Ministry of Defence Not required due to location of site and land ownership. - Power Purchase Agreement (PPA) PPA from Tamil Nadu Electricity Board (TNEB). Prior to construction Various, mainly prior to Land Agreement Deeds of sale for land. construction District Advisory Committee on Renewable Energy issued a District Advisory Committee Prior to construction no-objection certificate. Certification of Land Use by the Director of Town & Planning Department Prior to construction Country planning. Archaeological Department Not required as no heritage buildings were on site. - Forest Authority Not required as no tree felling was required. - The Tamil Nadu Pollution Control Board consented – one Pollution Control Board Prior to construction consent each for air and water. Irrigation Department Not required as no water courses were diverted. - Not required as the land was already classified as non- Industrial Development Corporation - agricultural. Seismic Centre Published data were incorporated into the design. - Local Governing Bodies No objection received from local Panchayat. Prior to construction This was not required as a diesel generator was used for Construction power requirements - construction power requirements. EIA Submitted. Prior to construction Grid Connection Consent from the Tamil Nadu Electricity Board. Prior to construction Start-up power and tie-in approval from Tamil Nadu Electrical Inspectorate Electricity Board. Full approval required after During and after construction electrically connected. Local stakeholders Consent through meeting. Prior to construction Land tax Land tax receipts for the site and approach road - CDM approval from the Ministry of Environment and Other Prior to construction Forests. NB. This list is indicative only. 110 Utility Scale Solar Power Plants 9. CONSTRUCTION 9.1 Introduction project interfaces, describe which organisations are involved, allocate responsibility for each interface to a particular The management of the construction phase of a solar PV individual, and explicitly state when the interface will be project should be in accordance with general construction reviewed. In general, design and construction programmes project management best practice. Therefore, the aim is to should be developed to minimise interfaces wherever possible. construct the project to the required level of quality, and within the time and cost limits. During construction, issues Opting for a turnkey EPC contract strategy will, in effect, like environmental impact, and health and safety of the pass the onus for interface management from the developer to workforce (and other affected people) should also be carefully the EPC contractor. But interface management will remain managed. an important issue and one that requires ongoing supervision. To some extent interfaces between the project and its The approach to construction project management for a surroundings (for example grid connection) will remain the solar PV plant will depend on many factors. Of them, one of responsibility of the developer. the most important is the project contract strategy. If a turnkey EPC strategy is chosen, then a contractor with a From a developer’s perspective, construction project suitable track record in the delivery of complex projects should management for a full turnkey EPC contract will be be selected to minimise this risk. Information should also be significantly less onerous than that required for a multi- sought from potential contractors on their understanding contract approach. However, a multi-contract approach gives of the project interfaces and their proposed approach to the developer greater control over the final plant configuration. managing them. Regardless of the contract strategy selected, there are a number of key activities that will need to be carried out, either by the 9.3  Programme and Scheduling developer or a contractor. These activities are described in the A realistic and comprehensive construction programme is following sections. a vital tool for the construction planning and management Typical EPC contract terms may be found in Appendix C – of a solar PV project. The programme should be sufficiently EPC Contract Model Heads of Terms. detailed to show: • Tasks and durations. 9.2  Interface Management • Restrictions placed on any task. Interface management is of central importance to the • Contingency of each task. delivery of any complex engineering project, and solar PV projects are no exception. The main interfaces to be considered • Milestones and key dates. in a solar PV project are listed in Table 12. It should be noted • Interdependencies between tasks. that the interfaces may differ, depending on the contracting structure and specific requirements of particular projects. • Parties responsible for tasks. For a multi-contract strategy, the developer should develop a • Project critical path. robust plan for interface management. This plan should list all • Actual progress against plan. A Guide For Developers and Investors 111 Table 12: Solar PV Project Interfaces Item Element Organisations Interface / Comments • All contractors Monitoring of compliance with all 1 Consents • Landowner planning conditions and permits. • Planning authority. • Civil contractor • Mounting or tracking system supplier • Central inverter supplier Site clearance. Layout and requirements for 2 Civil Works foundations, cable trenches, ducts, roads • Electrical contractor and access tracks. • Grid connection contractor • Security contractor • Civil contractor • Electrical contractor Layout of the security system, including 3 Security power cabling and communications to the • Security contractor central monitoring system. • Communications contractor • Mounting or Tracking system supplier Foundations for the mounting or tracking Module • Civil contractor system, suitability for the module type and 4 Mounting or electrical connections, and security of the Tracking System • Module supplier modules. Earthing and protection of the • Electrical contractor mounting or tracking system. • Civil contractor (for central inverters) • Mounting system supplier (for string Foundations for larger central inverters, inverters) or suitability for the mounting system. • Module supplier Suitability of the module string design 5 Inverter for the inverter. Interface with the • Inverter supplier communications for remote monitoring • Electrical contractor and input into the SCADA system. • Communications contractor 112 Utility Scale Solar Power Plants Table 12: Solar PV Project Interfaces Item Element Organisations Interface / Comments • Electrical contractor AC/DC and • Civil contractor Liaison with regard to cable routes, sizes, 6 Communications weights, attachments and strain relief Cabling • Communications contractor requirements. • Security contractor • Civil contractor Liaison with regard to required layout of building equipment and interface with on- • Electrical contractor site cabling installed by the site contractor. 7 Grid Interface • Inverter supplier More interface outside the site boundary for the grid connection cable/line to the • Network operator network operator’s facilities. • Electrical contractor Interface between the security system, • Security contractor inverter system, central monitoring 8 Communications (SCADA), the monitoring company, and • Communications contractor the owner or commercial operator of the • Owner and Commercial operator PV plant. Commissioning of all systems will have 9 Commissioning • All contractors several interface issues particularly if problems are encountered. All tasks and the expected timescale for completion should • Electrical site works. be detailed along with any restrictions to a particular task. For • Grid interconnection works. example, if permits or weather constraints stop construction during particular months. • Commissioning and testing. For a solar PV project, it is likely that the programme will A high level programme should be produced to outline the have different levels, incorporating different levels of detail timescales of each task, the ordering of the tasks and any key around each of the following main work areas: deadlines. This should be completed as part of the detailed design. • Site access. The programme will then be built up to detail all the • Security. associated tasks and sub tasks, ensuring that they will • Foundation construction. be completed within the critical timescale. A thorough programme will keep aside time and resources for any • Module assembly. contingency. It will also allocate allowance for weather risk or • Mounting frame construction. permit restrictions for each task. • Substation construction. A Guide For Developers and Investors 113 9.3.2  Planning and Task Sequencing Interdependencies between tasks will allow the programme Appropriate sequencing of tasks is a vital part of the to clearly define the ordering of tasks. A project scheduling planning process. The tasks must be sequenced logically and package will then indicate the start date of dependent tasks as efficiently. The overall sequence of works is generally: site well highlighting the critical path. access, site clearance, security, foundation construction, cable trenches and ducts, substation construction, mounting frame Critical path analysis is important to ensure that tasks construction, electrical site works, communications, onsite that can affect the overall delivery date of the project are grid works and then testing and commissioning. Each of these highlighted and prioritised. A comprehensive programme work areas should be broken down into a series of sub-tasks. should also take into account resource availability. This will Alongside, an assessment of the inputs required for each task ensure that tasks are scheduled for when required staff or plant (especially when interfaces are involved) will help develop a are available. logical and efficient sequence. Incorporating a procurement schedule that focuses on items Consideration should also be given to any factors that could with a long manufacturing lead time (such as transformers, prevent or limit possible overlap of tasks. These factors could central inverters and modules) will ensure that they are include: ordered and delivered to schedule. It will also highlight any issues with the timings between delivery and construction, and • Access requirements. the need for storage onsite. • Resource availability (plant and manpower). To share this information and to save time and effort, • Planning (or other regulatory) restrictions. it is strongly recommended that an “off-the-shelf” project • Safety considerations. scheduling package is used. 9.3.3  Risk Management 9.3.1 Milestones The risks associated with the project should be identified, Milestones are goals that are tied in with contractual assessed and managed throughout the construction process. obligations, incentives or penalties. Incorporating milestones The hazards need to be incorporated in the planning and in the programme helps the project team to focus on achieving scheduling of the project. Each aspect of the project should be these goals. In effect, construction must be planned around assessed for likelihood and impact of potential risks. The next certain milestones or fixed dates (for example, the grid step would be to develop a suitable action plan to mitigate connection date). identified risks. If a particular risk could affect the delivery of the whole project, alternatives for contingency (in terms of If the contracted milestones are included in the programme, time and budget) should be included. the impact of slippage on these dates will be apparent. Appropriate budgetary and resourcing decisions can then be 9.4  Cost Management made for those delays. The milestones can also indicate when payments are due to a contractor. The viability of a solar project will be affected by the duration of the construction period. During construction, the project will be in debt owing to interest and finance charges, 114 Utility Scale Solar Power Plants and lack of income to make payments. Therefore, a shorter Earned value management – This is an approach based construction period is generally preferable. The period of on monitoring the project plan, actual work completed and construction also requires prudent cost management, which is work-completed value to assess if a project is on track. Earned tied in with the project schedule and the contracted payment value management indicates how much of the budget (and structure. available time) should have been spent, with regards to the amount of work done to date. This method necessitates The payment structure will depend upon the type of advance calculation of both the baseline cost for a task and contract opted for, but is likely to involve milestone payments. the resources required. If used correctly, this is a powerful tool The typical range of EPC payment schedules is detailed for estimating and controlling project overspends as early as in Table 13. If a multi-contract strategy is chosen, then a possible in the construction period. similar structure for phased-out payments for each contract is advisable. Completion certificates – Completion certificates are issued once the entire (or a specific) part of the plant is This schedule shows that a high percentage of the payments physically complete. These certificates are issued prior to any are made once the goods have been delivered to site. It also tests taking place and confirm that the contractor has installed allows enough money to be held back to ensure that the the equipment correctly. They may only be for a specific part contractor completes the works. of the project (for example a string of modules). Payment for a particular item of work will not be made until the appropriate The tools used for construction cost management in a solar completion certificate has been issued. PV venture are the same as for any major engineering project. These can include: Table 13: Typical EPC Payment Schedule Payment Payment Due Upon % of Contract Price 1 Advance payment (commencement date) 10-20 2 Civil works completed 10-20 Delivery of components to site (probably 3 40-60 on a pro-rata basis) 4 Modules mechanically complete 5-15 5 Modules electrically complete 5-15 Provisional completion and commercial 6 5-10 operation 6 Solar PV plant taken over 5-10 A Guide For Developers and Investors 115 9.5  Contractor Warranties Snagging lists – Compiling “Snag Lists” as an ongoing The owner of a PV power plant will typically use the exercise is recommended. A prerequisite to the hand-over services of an EPC contractor to design and build a project. phase, this list is a process of monitoring and tracking any He will also require an O&M contractor to operate and defects. These should be addressed and rectified to the maintain the plant during its operational phase. satisfaction of the developer. In some cases, the take-over will occur with some minor defects still outstanding. In such The EPC contractor offers project planning services, and a scenario, the snagging list will detail these minor defects, will provide the necessary engineering for project design. The which will then have to be addressed within a stipulated contractor will typically be responsible for material selection period. and procurement of modules, inverters, and balance of plant components. Construction may be carried out by the EPC Take-Over certificates – Take-over certificates will be contractor or through partnerships with local installation issued by the contractor for acceptance by the developer. These and project development companies (in this case, the EPC will be issued once all tests have been completed and defects contractor will provide on-site inspection). Warranties within addressed. It is normal for the power purchaser to request a the EPC contract may include a Defect Warranty, Module copy of the take-over certificate. To expedite the launch of the Capacity Warranty, Performance Ratio Warranty and project, the developer may choose to take over a project with Structure Warranty as described in Table 14. minor snags, subject to the contractor taking responsibility to complete them. While this conditionality is acceptable, progress in addressing defects should be monitored. Table 14: Warranty Types and Requirements Warranty Type Details The contractor warrants that the plant will be free from defects in materials Defect warranty and workmanship, and that the project will adhere to the qualities set out in a technical specifications document. The contractor may guarantee that the total peak capacity of the project within a certain time period after completion is not less than a certain value, and Module capacity warranty may also certify that the degradation will not exceed a given value during the warranty period. The contractor guarantees that the PR as measured during a PR test will not be Performance ratio warranty less than a given value, and that the PR shall not reduce by more than a given percentage during the warranty period. The contractor warrants the structural integrity of elements of the works for a Structure warranty given period. 116 Utility Scale Solar Power Plants 9.5.1  Warranty Duration Warranties for EPC contracts are typically in the two to five • Acceptance criteria. year range. If the O&M contractor is also the EPC contractor, • Completion date. it can be easier to enforce these warranties. However, if they are separate companies, the exclusions to the warranties should • Details of any records to be kept (for example, be checked carefully. Also, the maintenance carried out by photographs or test results). the O&M contractor should be in compliance with the EPC • Signature or confirmation of contractor completing contractor’s requirements. tasks or accepting delivery. The original manufacturer’s warranties on components such • Signature of person who is confirming tasks or tests on behalf of the developer. as inverters, support structures and modules should be passed from the EPC contractor to the plant owner at handover. Quality audits should be completed regularly. These will Acceptance testing is often completed before the plant is help developers verify if contractors are completing their works handed over to the owner. in line with their quality plans. Audits also highlight quality issues that need to be addressed at an early stage. Suitably Even in a multiple contract structure, the component experienced personnel should undertake these audits. warranties described in Table 14 above would be applicable and should be incorporated. However, these warranties will 9.7  Environmental Management be contract-specific, and need to be decided upon before tendering for the work. This is a judicious way to ensure that The IFC Environmental, Health, and Safety (EHS) the guarantees provided are on a par with those expected by Guidelines are technical reference documents with general the developers. and industry-specific examples of good international industry practice. With respect to environmental management, the 9.6  Quality Management guidelines cover the following areas: Controlling construction quality is essential for the success • General Guidelines. of the project. The required level of quality should be defined clearly and in detail in the contract specifications. • Air Emissions and Ambient Air Quality. • Energy Conservation. A quality plan is an overview document (generally in a tabular form), which details all works, deliveries and tests to be • Wastewater and Ambient Water Quality. completed within the project. This allows work to be signed • Water Conservation. off by the contractor and enables the developer to confirm if the required quality procedures are being met. A quality plan • Hazardous Materials Management. will generally include the following information: • Waste Management. • Tasks (broken into sections if required). • Noise Emissions. • Contractor completing each task or accepting • Contaminated Land. equipment. A Guide For Developers and Investors 117 It is recommended that these guidelines are followed as Community Health and Safety: a benchmark, along with any specific local guidelines and information from the EIA. • Water Quality and Availability. • Structural Safety of Project Infrastructure. As for quality management, contractors should be urged to develop an environmental management plan (addressing the • Life and Fire Safety (L&FS). areas listed above), against which their performance can be • Traffic Safety. monitored. • Transport of Hazardous Materials. 9.8  Health and Safety Management • Disease Prevention. The health and safety of the project work force and other • Emergency Preparedness and Response. affected people should be carefully overseen by the project The IFC guidelines give guidance on how each of these developer. Apart from ethical considerations, the costs of not aspects of H&S should be approached, outline minimum complying with health and safety legislation can represent requirements for each aspect and list appropriate control a major risk to the project. Furthermore, a project with a measures that can be put in place to reduce risks. sensitive approach to health and safety issues is more likely to obtain international financing. As a minimum standard, compliance with local H&S legislation should be rigorously enforced. Where local legal The IFC EHS guidelines cover two main areas of health and requirements are not as demanding as the IFC guidelines, it is safety: occupational health and safety and community health recommended that the IFC guidelines be followed. and safety. The issues covered under these areas are listed below. 9.9  Specific Solar PV Construction Issues Occupational Health and Safety: The following sections describe common pitfalls or mistakes • General Facility Design and Operation. that can occur during the construction phase of a solar PV project. Most of these pitfalls can be avoided by appropriate • Communication and Training. design, monitoring, quality control and testing on site. • Physical Hazards. 9.9.1 Civil • Chemical Hazards. The civil works relating to the construction of a solar PV • Biological Hazards. plant are relatively straightforward. However, there can be • Personal Protective Equipment (PPE). serious and expensive consequences if the foundations and road networks are not adequately designed for the site.. The • Special Hazard Environments. main risks lie with the ground conditions. Importantly, • Monitoring. ground surveys lacking in meticulous detailing or proper interpretation could lead to risks such as unsuitable foundations. 118 Utility Scale Solar Power Plants Used land also poses a risk during the civil engineering Underground cables should be buried at a suitable depth works. Due to the nature of digging or pile driving for (generally between 500mm and 1,000mm) with warning tape foundations, it is important to be aware of hazardous obstacles or tiles placed above and marking posts at suitable intervals on or substances below the surface. This is especially important in the surface. Cables may either be buried directly or in ducts. If former industrial sites or military bases. cables are buried directly, they should be enveloped in a layer of sand or sifted soil should be included to avoid damage by 9.9.2 Mechanical backfill material. The mechanical construction phase usually involves the Comprehensive tests should be undertaken prior to installation and assembly of mounting structures on the site. energisation to verify that there has been no damage to the Some simple mistakes can turn out to be costly, especially if cables. these include: 9.9.4  Grid Connection • Incorrect use of torque wrenches. The grid connection will generally be carried out by a third • Cross bracing not applied. party over whom the project developer will have limited • Incorrect orientation. control. Close communication with the grid connection contractor is essential to ensure that the grid requirements are If a tracking system is being used for the mounting met. Delay in the completion of the grid connection will affect structure, other risks include: the energisation date, which will delay the start of commercial • Lack of clearance for rotation of modules. operation. • Actuator being incorrectly installed (or as specified), 9.9.5 Logistical resulting in the modules moving or vibrating instead of locking effectively in the desired position. Logistical issues can arise if designs or schedules have not These mistakes are likely to result in remedial work being been well-thought through. Issues that may arise include: required before hand-over and involve extra cost. • Lack of adequate clearance between rows of modules for access. 9.9.3 Electrical • Constrained access due to inclement weather Cables should be installed in line with the manufacturer’s conditions. recommendations. Installation should be done with care as • For larger tracking systems and central inverters, damage can occur when pulling the cable into position. The cranes may be required. Therefore, suitable access correct pulling tensions and bending radii should be adhered and manoeuvrability room within the site is essential to by the installation contractor to prevent damage to the (see Figure 24). cable. Similarly, cables attached to the mounting structure require the correct protection, attachment and strain relief to make sure that they are not damaged. A Guide For Developers and Investors 119 Figure 24: Spacing Between Module Rows 9.10  Construction Supervision It is recommended that the owner and lenders of the project Design reviews will generally be carried out on: are kept informed of developments during construction. Construction supervision may be carried out by in-house • Design basis statements. resources. Alternatively, a “technical advisor” or “owner’s • Studies/investigations. engineer” may be commissioned to carry out the work on their behalf. • Design specifications. • Design of structures. The role of the technical advisor during the construction phase is to ensure contractor compliance with the relevant • Drawings (all revisions). contracts, as well as to report on progress and budget. The • Calculations. construction supervision team would generally comprise of a site engineer supported by technical experts in an office. • Execution plans. The main parts of the technical advisor’s role are: review of • Risk assessments and method statements. proposed designs, construction monitoring and witnessing of key tests. • Quality plans. • Safety plans/reports. • Material and equipment selection. • O&M manuals. • Test reports. 120 Utility Scale Solar Power Plants The objective of the design review is to ensure that the • Inspection of cable tracks. contractor has designed the works in accordance with the • Witnessing of delivery/off-load of solar modules, contract agreements and relevant industry standards. It also transformers, inverters and switchgear. aims to ascertain that the works will be suitably resourced and sequenced to deliver the project as specified. The design • Inspection of module, switchgear and inverter review could also cover specific areas such as grid compliance installation. or geotechnical issues, depending upon the specific project • Witnessing of site acceptance tests. requirements and experience of the developers. • Witnessing of completion tests. Key stages and tests for witnessing will include: • Monitoring and expediting defects. • Inspection of road construction. Besides the owner’s engineer, the lender’s engineer has the additional role of signing off and issuing certificates that state • Inspection of foundations. the percentage of the project completed. These certificates are • Verification of cable routes. required by the lenders prior to releasing funds in accordance with the project payment milestones. Case Study 5 Construction and Project Management The 5MW PV power plant in Tamil Nadu was constructed during 2010. At commencement, construction was projected to be completed within 38 weeks; due to various factors, many of which are covered in the case studies in this book, construction ended up taking approximately 52 weeks – a significant and costly delay. In addition, the constructed plant suffered from serious quality issues. The construction schedule should be carefully thought through by suitably experienced personnel. It is also recommended that project management software tools are used as these enable the developer to track the progress of a project, identify resource constraints and understand the impact of uncompleted tasks. The main causes of the construction delays were: • Design flaws. Poor design of components, such as the support structures, lead to costly and time-consuming remedial measures. • Poorly planned construction schedule. The illogical sequencing of construction tasks caused a number of delays: A Guide For Developers and Investors 121 • Monsoon rains restricted access to the site as the access road had not been sealed. The access route should have been sealed well before the arrival of the monsoon. • Modules were damaged (and were at risk of theft) as they were stored unprotected on site for long periods of time. Modules and other valuable components should not be delivered to site until shortly before they are required. If they must be delivered earlier then they should be stored in a controlled and secure environment. The constructed plant suffered from a range of serious quality issues. These included: • Foundations in incorrect locations. • Poor alignment of foundations. • Cracked and damaged foundations. • Elements of the supporting structure left unattached. • Poorly aligned solar modules. • Damaged solar modules. • Poor attention to detail in finishing of substation buildings. While a wide range of factors undoubtedly contributed to each of these issues, the following factors are considered to have been particularly significant: • Design quality. Certain basic aspects of the design led directly to construction quality issues. The clearest example of this is the design of the foundations and substructures leading to misalignment of the modules. These problems could have been avoided if suitable expertise had been used in the design stage. • Design documentation and document control. It is preferable to have a full set of “for construction” design drawings before construction commences. Throughout the construction process, it is vital that document management is thoroughly carried out; in particular, design changes and revision of drawings should be rigorously controlled. The failure to do this led to basic mistakes such as foundations being constructed in the wrong locations. • Contractor capability. It is fundamentally important to select a suitably experienced and capable construction contractor. Ideally, a contractor with demonstrable experience of similar projects should be selected. In any case, potential contractors’ proposed approach to quality management should be thoroughly scrutinised during the contractor selection process. • Project Management – supervision / monitoring. Regardless of the capability of the selected contractor, the developer must monitor construction progress closely. Suitably experienced personnel should regularly inspect the progress and quality of the works (and the completeness of the quality records) as they progress. If the developer does not have suitable resources in-house to carry out construction supervision then they should engage a competent party to do it on their behalf. 122 Utility Scale Solar Power Plants 10. COMMISSIONING The commissioning process certifies that the project owner’s Inverter commissioning should follow the protocol requirements have been met, the power plant installation is described in the inverter installation manual. Tasks may complete and the power plant complies with grid and safety include: requirements. Successful completion of the commissioning • Checking inverter cabling for conformity to process is often considered to be part of the provisional or final schematic diagrams. acceptance of the PV plant. • Checking that cable connections are firm. Commissioning should follow the procedure described in • Checking DC voltages for polarity and verifying IEC 62445 and prove three main criteria: that they are approximately the same for each string. Voltages must not exceed the maximum voltage of 1. The power plant is structurally and electrically safe. the inverter. 2. The power plant is sufficiently robust (structurally • Checking AC grid voltage. AC voltage measurements and electrically) to operate for the specified lifetime between the external conductors should be of a project. approximately the same as the nominal voltage of the inverter. 3. The power plant operates as designed and its performance is as expected. • Checking the internal AC power supply. Critical elements of a PV power plant that require • Mounting the inverter panelling. commissioning include: • Inserting fuses or insulation blades (if applicable). • Module strings. • Switching on the voltage supply by turning on the grid monitoring circuit breaker (if applicable) and the • Inverters. external voltage supply circuit breaker. Status lights • Transformers. should not be showing a fault. • Switchgear. • Switching on the inverter and checking for power export to the grid (if the irradiation level is above the • Lightning protection systems. inverter threshold) and for any abnormal noise. • Earthing protection systems. With the exception of the module strings, the • Electrical protection systems. commissioning of the remaining plant components follows standard procedures for power plant (the guide does not • Grid connection compliance protection and dwell further on the details). The following sections provide disconnection systems. an overview of the pre-connection and post-connection • Monitoring systems (including irradiation sensors). acceptance testing and documentation requirements for the module strings. • Support structure and tracking systems (where employed). A Guide For Developers and Investors 123 10.1  General Recommendations Commissioning should start immediately after installation inverters. These tests according to IEC 62446 should include: has been completed or, where appropriate, sequentially as strings are connected. For power plants employing modules • Open Circuit Voltage Test. which require a settling-in period, for example, thin film • Short Circuit Current Test. amorphous silicon modules, performance testing should begin once the settling in period has been completed and the 10.2.1  Open Circuit Voltage Test modules have degraded. This test checks whether all strings are properly connected Since irradiance has an impact on performance, tests should (module and string polarity) and whether all modules are be carried out under stable sky conditions. The temperature of producing the voltage level as per the module data sheet. The the cells within the modules should be recorded in addition to test should be conducted for all strings. the irradiance and time. The open circuit voltage, Voc, should be recorded and Ideally, commissioning should be carried out by an compared with temperature adjusted theoretical values. independent specialist third party selected by the owner. It should include both visual and electrical testing. In particular, 10.2.2  Short Circuit Current test visual testing should be carried out before any system is energised. The testing outlined in this section does not This test verifies whether all strings are properly connected preclude local norms which will vary from country to country. and the modules are producing the expected current. The test should be conducted for all strings. Test results should be recorded as part of a signed-off commissioning record. While an independent specialist would The short circuit current, Isc, should be recorded and be expected to carry out these tests, it is important that the compared with the temperature adjusted theoretical values. developer and owner are aware of them and make sure that the required documentation is completed, submitted and 10.3  Grid Connection recorded. Grid connection should only be performed once all 10.2  Pre-Connection Acceptance Testing DC string testing has been completed. It is likely that the distribution or transmission system operator will wish to Prior to connecting the power plant to the grid, electrical witness the connection of the grid and/or the protection relay. continuity and conductivity should be checked by the Such a preference should be agreed in advance as part of the electrical contractor. Once completed, pre-connection connection agreement. acceptance testing should be carried out on the DC side of the The grid connection agreement often stipulates the level of parameters—such as electrical protection, disconnection and fault—to which the PV power plant is required to adhere. Usually, these conditions need to be met before commissioning the grid connection. 124 Utility Scale Solar Power Plants 10.4  Post Connection Acceptance Testing Once the power plant is connected to the grid, the for the temperatures observed during the test. This is known inverters will be powered up according to the manufacturer’s as the adjusted performance ratio. The electrical energy start-up sequence. Inverter internal meters and displays generated is typically considered to be acceptable if it is within should be verified prior to use. ± 3-5% of the value given by the agreed temperature adjusted performance ratio. Post grid connection should include: If there are significant differences between the contractual • DC current test. and actual adjusted performance ratio, the EPC contractor • Performance ratio test. should identify and rectify the discrepancy before repeating the performance ratio test. 10.4.1  DC Current Test 10.4.3  Availability Test This test verifies whether all strings are producing adequate and consistent operating current as per the module An availability test should be performed in parallel with the data sheets. The test should be conducted for all strings. performance ratio test as described above. This will confirm that an acceptable availability is being achieved according to The string current values per inverter will be checked guaranteed values. The test will typically be performed for a against the average values of all strings connected to the minimum of ten consecutive days under stable sky conditions. same inverter and checked against acceptance criteria. The availability of the system can be defined using the 10.4.2  Performance Ratio Test formula: This test checks if the power plant is performing at or (Power export time + Time in which above the performance ratio agreed or warranted within the power is not exported due to reasons EPC contract. Measured beyond control ) Average = 100% * A standard testing period would be continuous testing (Theoretical time for which power Availability for a minimum of ten consecutive days. Typically, may be exported) a minimum irradiance will be defined and the performance ratio measured for the period in which that irradiance is exceeded. 10.5  Provisional Acceptance The electrical energy generated should be recorded at the The completion of the commissioning tests outlined above metering point (or as agreed in the contract documentation) often forms part of the acceptance tests for the PV power and compared with the guaranteed value provided by the plant. In some instances, the performance ratio test will EPC contractor. An adjustment can be made to account be repeated after a period of operation. In such a case, the A Guide For Developers and Investors 125 completion of the commissioning tests marks the provisional acceptance of the PV power plant. The final acceptance takes place after a successful repeated performance ratio test. The period of operation between the two tests is dependent on the contract with the EPC contractor and the level of risk taken on the components of the PV power plant. For example, a PV power plant with a new technology, an untested module manufacturer or a new EPC contractor may carry a larger degree of technology risk. Therefore, repeating the performance ratio test after one or two year’s operation helps identify degradation and teething problems. 10.6  Handover Documentation The commissioning record[50] should be handed over to the developer once commissioning is complete, having been signed by the authorised signatory to confirm that the work is satisfactory. Where appropriate, the O&M contractor should be informed of any system performance issues. The commissioning record is typically submitted along with other handover documentation, which should include: • The O&M manual. • Conformity and guarantee certificates. • Warranty documentation. • Performance guarantees. • Monitoring compliance certificates. [50] The commissioning record is a checked-off list of tasks that that have been completed as part of the commissioning process. 126 Utility Scale Solar Power Plants 11. OPERATION AND MAINTENANCE Specific scheduled maintenance tasks are covered in the Compared to most other power generating technologies, following sections. PV plants have low maintenance and servicing requirements. However, proper maintenance of a PV plant is essential to 11.1.1  Module Cleaning optimise energy yield and maximise the life of the system. Module cleaning is a simple but important task. It can Maintenance can be broken down as follows: produce significant and immediate benefits in terms of energy yield. • Scheduled or preventative maintenance – Planned in advance and aimed at preventing faults from The frequency of module cleaning will depend on local occurring, as well as keeping the plant operating at its site conditions (for example, prevalence of dust or rain) and optimum level. the time of year. As the soiling of modules is site – specific, • Unscheduled maintenance – Carried out in the duration between clean-ups is likely to vary between sites. response to failures. However, it is generally recommended to clean the modules at least twice annually. Figure 25 shows the solar panel covered Suitably thorough scheduled maintenance should minimise with dust. When scheduling module cleaning, consideration the requirement for unscheduled maintenance although, should be given to the following: inevitably, some failures still occur. A robust and well-planned approach to both scheduled and unscheduled maintenance is • Environmental and human factors (for instance, important. autumn fall debris and soiling from local agricultural activities). 11.1  Scheduled/Preventative Maintenance • Weather patterns: cleaning during rainy periods is less likely to be required. The scheduling and frequency of preventative maintenance is dictated by a number of factors. These include the • Site accessibility based upon weather predictions. technology selected, environmental conditions of the site, • Availability of water and cleaning materials. warranty terms and seasonal variances. The scheduled maintenance is generally carried out at intervals planned in If the system efficiency is found to be below the expected accordance with the manufacturers’ recommendations, and as efficiency, then module cleaning should be scheduled required by the equipment warranties. Scheduled maintenance as necessary. should be conducted during non-peak production periods and, where possible, at night. The optimum frequency of module cleaning can be determined by assessing the costs and benefits of conducting Although scheduled maintenance will both maximise the procedure. The benefit of cleaning should be seen in an production and prolong the life of the plant, it does represent improved performance ratio due to the lower soiling loss—and a cost to the project. Therefore, the aim should be to seek the resultant increase in revenue). A cost estimate to clean all the optimum balance between cost of scheduled maintenance and modules at the PV plant should be obtained from the cleaning increased yield through the life of the system. contractor. If the cost to clean is less than the increased revenue then it is beneficial to clean the modules. A Guide For Developers and Investors 127 Figure 25: Solar Panel Covered with Dust 11.1.2  Module Connection Integrity 11.1.4  Hot Spots Checking module connection integrity is important for Potential faults across the PV plant can often be detected systems that do not have string level monitoring. This is through thermography. This technique helps identify more likely for central inverter systems for which no string weak and loose connections in junction boxes and inverter monitoring at the junction/combiner boxes has been designed. connections. It can also detect hot spots within inverter In such cases, faults within each string of modules may components and along strings of modules that are not be difficult to detect. Therefore, the connections between performing as expected. modules within each string should be checked periodically (this may include measuring the string current). Thermography should be conducted by a trained specialist using a thermographic camera. 11.1.3  Junction or String Combiner Box 11.1.5  Inverter Servicing All junction boxes or string combiner boxes should be checked periodically for water ingress, dirt or dust Generally, inverter faults are the most common cause accumulation and integrity of the connections within the of system downtime in PV power plants. Therefore, the boxes. Loose connections could affect the overall performance scheduled maintenance of inverters should be treated as a of the PV plant. Any accumulation of water, dirt or dust could centrally important part of the O&M strategy. cause corrosion or short circuit within the junction box. The maintenance requirements of inverters vary with size, Where string level monitoring is not used, periodic checks type and manufacturer. The specific requirements of any on the integrity of the fuses in the junction boxes, combiner particular inverter should be confirmed by the manufacturer boxes and, in some cases, the module connection box should and used as the basis for planning the maintenance schedule. be conducted. 128 Utility Scale Solar Power Plants 11.1.8  Balance of Plant The annual preventative maintenance for an inverter should, The remaining systems within a PV power plant, including as a minimum, include: the monitoring and security systems, auxiliary power supplies, and communication systems should be checked and serviced • Visual inspections. regularly. Communications systems within the PV power • Cleaning/replacing cooling fan filters. plant and to the power plant should be checked for signal strength and connection. • Removal of dust from electronic components. • Tightening of any loose connections. 11.1.9  Vegetation Control • Any additional analysis and diagnostics Vegetation control and ground keeping are important recommended by the manufacturer. scheduled tasks for solar PV power plants since there is a strong likelihood for vegetation (for example, long grass, trees 11.1.6  Structural Integrity or shrubs) to shade the modules. The ground keeping can also reduce the risk of soiling (from leaves, pollen or dust) on the The module mounting assembly, cable conduits and any modules. other structures built for the PV plant should be checked periodically for mechanical integrity and signs of corrosion. This will include an inspection of support structure 11.2  Unscheduled Maintenance foundations for evidence of erosion from water run-off. Unscheduled maintenance is carried out in response to failures. As such, the key parameter when considering 11.1.7  Tracker Servicing unscheduled maintenance is diagnosis, speed of response and repair time. Although the shortest possible response is Similarly, tracking systems also require maintenance preferable for increasing energy yield, this should be balanced checks. These checks will be outlined in the manufacturers’ against the likely increased contractual costs of shorter documentation and defined within the warranty conditions. response times. In general, the checks will include inspection for wear and tear on the moving parts, servicing of the motors or The agreed response times should be clearly stated within actuators, checks on the integrity of the control and power the O&M contract and will depend on the site location— cables, servicing of the gearboxes and ensuring that the and whether it is manned. Depending on the type of fault, levels of lubricating fluids are suitable. an indicative response time may be within 48 hours, with liquidated damages if this limit is exceeded. The alignment and positioning of the tracking system should also be checked to ensure that it is functioning The majority of unscheduled maintenance issues are related optimally. Sensors and controllers should be checked to the inverters. This can be attributed to their complex periodically for calibration and alignment. internal electronics, which are under constant operation. Depending on the nature of the fault, it may be possible to rectify the failure remotely – this option is clearly preferable if possible. A Guide For Developers and Investors 129 Other common unscheduled maintenance requirements It is important that spares stock levels are maintained. include: Therefore, when the O&M contractor uses some spares he should replenish the stocks as soon as possible. This • Tightening cable connections that have loosened. arrangement will reduce the time gap between the • Replacing blown fuses. identification of the fault and replacement of the non- operational component. This can be of particular relevance for • Repairing lightning damage. remote locations with poor accessibility and adverse weather • Repairing equipment damaged by intruders or conditions. Consultation with manufacturers to detail the during module cleaning. spare parts inventory, based upon estimated component lifetimes and failure rates, is recommended. • Rectifying SCADA faults. • Repairing mounting structure faults. 11.4  Performance Monitoring, Evaluation and Optimisation • Rectifying tracking system faults. To optimise system performance, there is a need to ensure The contractual aspects of unscheduled O&M are described that the plant components function efficiently throughout the in more detail below. lifetime of the plant. Continuous monitoring of PV systems is essential to maximise the availability and yield of the system. 11.3 Spares Section 7.6.1 describes some of the information required In order to facilitate a rapid response, a suitably stocked for an effective monitoring system. A SCADA system is able spares inventory is essential. The numbers of spares required to monitor the real-time efficiency and continuously compare will depend on the size of the plant and site-specific it with the theoretical efficiency to assess if the system is parameters. Adequate supplies of the following components operating optimally. This information can be used by the should be held: O&M contractor to establish the general condition of the • Mounting structure pieces. system and schedule urgent repair or maintenance activities such as cleaning. • Junction/combiner boxes. • Fuses. 11.5 Contracts • DC and AC cabling components. This section describes the key issues for consideration • Communications equipment. with regards to O&M contracts. A model O&M contract is included in Appendix D – O&M Contract Model Heads of • Modules (in case of module damage). Terms. • Spare inverters (if string inverters are being used). • Spare motors, actuators and sensors should also be kept where tracking systems are used. 130 Utility Scale Solar Power Plants It is common for the O&M of PV plants to be carried • Warranties and operational targets. out by specialist O&M contractors. The contractor will be • Terms and conditions. responsible for the operation and maintenance of the whole plant. This is likely to include: • Legal aspects. • Modules and mounting frames or tracking system. • Insurance requirements and responsibilities. • Inverters. These issues are discussed in the following sections. • DC and AC cabling. 11.5.2  Contractor Services and Obligations • String combiner or junction boxes. The O&M contract should list the services to be performed • Site SCADA system, remote monitoring and by the contractor. This list should be site-specific and include communication systems. the following: • Site substation. • Plant monitoring requirements. • Site fencing and security system. • Scheduled maintenance requirements. • Auxiliary power supply. • Unscheduled maintenance requirements. • Site access routes and internal site roads. • Agreed targets (for example, response time or system • Site building and containers. availability). • Vegetation control. • Reporting requirements (including performance, environmental, and health and safety reporting). • Maintenance of fire-fighting equipment or reservoirs. It should be stipulated that all maintenance tasks shall be 11.5.1 Purpose performed by the contractor in such a way that their impact on the productivity of the system is minimal. In particular, The purpose of an O&M contract is to optimise the the contract should stipulate that maintenance tasks should be performance of the plant within established cost parameters. kept to a minimum during the hours of sunlight. To do this effectively, the contract must be suitably detailed and comprehensive. In particular, the O&M contract should The O&M contract will typically define the terms by which clearly set out: the contractor is to: • Services to be carried out by and obligations on the • Provide, at intervals, a visual check of the system contractor. components for visible damage and defects. • Frequency of the services. • Provide, at intervals, a functional check of the system • Obligations on the owner. components. • Standards, legislation and guidelines to which the • Ensure that the required maintenance will be contractor must comply. conducted on all components of the system. As a minimum, these activities should be in line with • Payment structure. manufacturer recommendations and the conditions of the equipment warranties. A Guide For Developers and Investors 131 • Provide appropriate cleaning of the modules and the • Local engineering practices (unless the documents removal of snow (site specific). and conditions listed above require a higher standard). • Make sure that the natural environment of the system is maintained to avoid shading and aid 11.5.5 Payment maintenance activities. • Replace defective system components and system The cost and remuneration of the O&M contract is components whose failure is deemed imminent. generally broken down in to: • Provide daily remote monitoring of the performance • Fixed remuneration and payment dates. of the PV plant to identify when performance drops below set trigger levels. • Other services remuneration and expenditure reimbursement. 11.5.3  Obligations on the Owner Fixed remuneration outlines the payment for the basic In an O&M contract for a PV plant, the obligations on the services that are to be provided by the maintenance contractor owner/developer are generally limited to: under the O&M contract. This section should include the following: • Granting the O&M contractor access to the system and all the associated land and access points. • Cost – this is usually a fixed price per kWp installed. • Obtaining all approvals, licences and permits • Payment structure (that is, monthly, quarterly or necessary for the legal operation of the plant. annually). • Providing the O&M contractor with all documents • Payment indexation over the duration of the and information available to them and necessary for contract. the operational management of the plant. Remuneration for other services includes payment for any 11.5.4  Standards, Legislation and Guidelines services above the basic requirement. This should include: This section of the contract outlines the various conditions • Method for determining level of other services to which the O&M contractor must comply while carrying carried out. out the O&M of the plant. These conditions are contained • Agreed rates for conducting these services. within the following documentation: • Agreed method for approving additional expenses or • Building or construction permits. services with the owner. • Planning consents and licences. • Any required spare parts and other components that are not covered by individual warranties. • Grid connection statement, the grid connection agreement and PPA (or similar). 11.5.6 Warranties • System components installation handbooks. An availability warranty can be agreed between the • Applicable legislation. maintenance contractor and the owner of the system. It then becomes the responsibility of the maintenance contractor 132 Utility Scale Solar Power Plants to make sure that the system operates at a level greater than It is also recommended that this section includes the the agreed value. If the system operates below the warranted circumstances in which either the maintenance contractor or level, then the maintenance contractor may be liable to pay a the developer would be entitled to terminate the contract. penalty. 11.5.10  Response Time 11.5.7 Legal The guaranteed response time of a maintenance contractor The contract will have a section outlining the governing is an important component of the O&M contract. As soon law and jurisdiction of the O&M contract. The governing as notification of a fault occurs, it is the responsibility of the law is normally the law of the country in which the project contractor to go to the site within a set period of time. The is located. A legal succession or a transfer of rights condition faster the response time, the swifter the issues can be diagnosed is required for the developer to reserve the right to assign the and resolved towards the aim of returning the system to full O&M contract to a third party. production. The distance between the PV plant and the contractor’s premises has a direct correlation to the duration of It is also recommended that every contract has a non- the guaranteed response time. disclosure agreement. This agreement between the O&M contractor and the developer will outline the information The time of year coupled with the accessibility to the that is to be treated as confidential and that which could be site can have a bearing on the actual response time for any disclosed to third parties. unscheduled maintenance event. Restrictions in access roads, at certain times of the year, can delay response. Adverse 11.5.8 Insurance conditions can also reduce the size of the payload that can be transported to the site, thus extending the duration of the The contract should have a section outlining the insurance maintenance work. responsibilities of the contractor for the operations and maintenance activities. This insurance should cover damage to 11.5.11  Selecting a Contractor the plant, as well as provide cover for employees conducting the maintenance. When choosing an O&M contractor, his experience should be thoroughly examined. In particular, the following aspects It is normal for the O&M contractor to also arrange and should be considered: pay for the full site insurance. • Familiarity of the contractor with the site and 11.5.9  Term of Agreement equipment. • Location of the contractor’s premises. Every O&M contract needs to have a section that outlines when the O&M contract shall become effective and the • Number of staff. duration of the contract from the effective date. This section • Level of experience. should also include provisions to renew or extend the contract upon conclusion of the originally agreed term. • Financial situation of the contractor. The intention should be to select a suitably experienced contractor able to meet the requirements of the contract for the duration of the project. A Guide For Developers and Investors 133 11.6 Operations and Maintenance Conclusions It is important to define the parameters for the operation and maintenance of a PV project during its life. These conditions must, as a minimum, cover the maintenance requirements to ensure compliance with the individual component warranties and EPC contract warranties. If an O&M contractor is being employed to undertake these tasks it is important that the requirements are clearly stated in the contract along with when and how often the tasks need to be conducted. It is normal for an O&M contractor to provide a warranty guaranteeing the availability of the PV plant. In some cases when the O&M contractor is also the EPC contractor, it is possible for the warranty to include targets for the PR or energy yield. The agreed availability limits are often based on the independently verified energy yield report, but with some leeway. In general, the O&M activities for a solar PV power plant are less demanding than those related to other forms of electricity generation. This is mainly due to the fact that there are no moving parts in a solar PV system (unless it is a tracking system). However, maintenance is still an important factor in maximising both the performance and lifetime of the plant components. 134 Utility Scale Solar Power Plants 12. ECONOMICS AND FINANCIAL MODEL 12.1.1  Local Economic Benefits and Costs 12.1  Economic Benefits and Costs In general, a solar project is likely to usher in economic As well as providing commercial benefits to renewable benefits for the local area. But the level of benefit may be energy project developers, solar PV projects confer many region-specific, and may vary across the country. An awareness economic advantages to local and national economic growth. of these local economic benefits will help developers and investors in pushing solar projects as a development tool for Economic benefits and costs should be considered by local communities and government agencies. policy makers, developers, investors and lenders to ensure that individual profitable projects develop within a framework of Local economic benefits may typically include the following: sustainable development. • Generation of direct and indirect employment. Lenders often require compliance with social and • Infrastructure developments such as roads, environmental standards. Multilateral agencies such as the IFC water and electricity. may have their own Social and Environmental Performance • Development of barren, unproductive or Standards. Other lenders may require compliance to standards contaminated land. as outlined in the Equator Principles[51] before agreeing to finance a project. Government bodies may aim to mitigate • Grid network upgrades providing power the adverse impact of developments through permitting supply security. requirements. • Less polluting power generation. The Government of India has implemented an array of However, these benefits must be weighed against: policies to enhance the growth of the solar market and support the National Action Plan for Climate Change (NAPCC)[52]. • Resource impacts. Many projects are likely to be constructed in areas with a scarcity of water and electricity. So the use of these resources during The major economic benefits and drawbacks for large scale construction and operation of the plant may have solar PV projects are outlined in the following sections. an impact on the local economy. Careful siting and design of the projects should minimise this potential impact. • Demand management. In urban India, peak demand normally occurs in the evening. Shortage of supply and inability to manage demand results in power cuts, which have a negative impact on the [51] The Equator Principles (EPs) are a set of 10 environmental and social local economy and quality of life. While solar power principles adopted by the Equator Principle Financing Institutions is only generated during the day, there is no facility (EPFIs).These principles are criteria that must be met by projects seeking financing from these institutions. They are to ensure that the for trimming peak demand during the evening. Solar projects that receive finance are developed in a manner that is socially power development should, therefore, be part of a responsible and reflect sound environmental management practices. The full set of principles can be accessed through the following link: wider strategic plan to manage demand and supply. www.equator-principles.com/documents/Equator_Principles.pdf [52] The NAPCC is the strategy by which the Government of India intends to meet the challenge of climate change. It was announced in June 2008. A Guide For Developers and Investors 135 12.1.2  National Economic Benefits and Costs There are a number of national or macroeconomic benefits significant levels of solar power are installed in areas with a which are likely to accrue from the development of solar weak transmission network. power generation within India. An awareness of these benefits will aid developers and investors when pitching the case for Budget diversions may also be significant as higher solar development to policy makers. government budget allocations for solar projects may divert resources from low income groups. Engagement of the National economic benefits may typically include the developer with the local community (by supporting local following: employment, for example) would be one way to work out a mutually agreeable solution. • Increased energy security arising from diversification from coal-fired generation. 12.1.3  Benefits to Developers • Long term energy price pressures mitigated due to diversification of generation mix and technology Investment in solar projects offers a number of economic development. The cost of installing solar power benefits to potential developers, the most important of which generation is currently more expensive than coal-fired are outlined below: generation in India. This gap would be expected to reduce as the solar market matures and coal prices • Preferential tariff and guaranteed returns – Solar rise. Energy price stability can lead to a wide range projects in India receive a FiT for 25 years. of social and economic benefits. These include improved global competitiveness of domestically • Concessional duties and tax breaks – The produced goods and services, inflation reduction and Government of India has announced a concessional social cohesion. customs duty of 5% on imports, with an exemption on excise duty for some project components. • Reduced dependence on imports resulting from long term solar project development targets and mandates • Meeting the renewable energy obligation – set by the National Solar Mission for consumption of Utilities and independent conventional power domestically produced project components. producers have been mandated by the State Electricity Regulatory Commissions (SERC) to • Technology development, which leads to a purchase renewable energy under the Renewable redeployment of human resources from primary Purchase Obligation (RPO). At present, the industrial activities to higher value-creating proportion of renewable energy to be purchased secondary industries. varies from 3% to 5% of the total generation across various SERCs. This is likely to increase to 15% by • Climate change mitigation, in line with the NAPCC. 2020. • Reduction in pollution externalities such as health and environmental consequences. • Renewable Energy Certificate (REC) – RECs are market-based instruments which give the developer • Increased tax revenue. the option to either sell power produced at the state specific average power pooled cost, or alternatively to These benefits must be weighed against the cost of upgrades trade RECs separately. to major transmission lines. Grid upgrades are likely if • Certified Emission Reduction (CER) revenue[53]. [53] CER credits can be sold under the Clean Development Mechanism. See Section 12.3.6 136 Utility Scale Solar Power Plants • Improvement in corporate image – Investment in produced a benchmark capital cost of INR 169 million/MWp solar power projects allows developers to demonstrate for solar PV power projects commissioned during fiscal years their commitment to environmental concerns. 2010-11 and 2011-12. This capital cost is considered to be a • Business diversification – Development of expertise reference cost in India as no large utility scale projects have yet and technical skills within the developer organisation, been commissioned. allowing diversification of income generation streams and access to a large emerging market. Figure 26 gives the percentage breakdown of cost for a typical 1MWp size project. These costs are discussed in more detail 12.2  Central Electricity Regulatory Commission in Table 15. It should be noted that the various elements of (CERC) Cost Benchmarks the capital cost will vary depending on the technology selected and other project specific parameters; as an example, while 12.2.1  Capital Cost the CERC benchmark costs show modules accounting for approximately 60% of the overall capital cost, it is not unusual to In order to determine the level of the feed-in tariff, the see module costs ranging from 50% to 60% of the overall cost. Central Electricity Regulatory Commission (CERC) has Land Preliminary and Pre- [0.89%] Civil and Operative Expenses General Works [10.71%] [5.33%] Evacuation to Inter-connection [5.03%] Power Conditioning Unit [11.83%] Mounting Structures [5.92%] PV Modules [60.3%] Figure 26: Benchmark Solar PV Plant Cost Breakdown according to CERC[54] [54] Central Electricity Regulatory Commission (CERC)(2009); RE Tariff Regulations Report A Guide For Developers and Investors 137 12.2.2  Tariff Structure For projects commissioned in financial years 2010-11 and been assumed to be INR 0.951 million/MWp for projects 2011-12, the tariff has been structured (assuming a useful life commissioned in fiscal year 2010–11. There shall be an annual of 25 years) at a levelised rate of INR 17.91/kWh. This tariff escalation of 5.72% over the tariff period. takes into account a reasonable return of equity, interest on loan capital, depreciation factor, interest on working capital A more detailed discussion of the O&M costs associated and O&M costs. with solar PV is provided in Section 12.3. A more detailed discussion of the tariff structure is provided 12.3  Financial Model in Section 12.3. 12.3.1 Introduction 12.2.3  Operations and Maintenance It is clear from the discussion in the previous section that O&M expenses comprising extended warranties, repairs, many of the economic benefits and costs of solar PV project routine maintenance, employee and administrative costs have development do not accrue directly to the developer. Instead, Table 15: Benchmark costs Cost item Cost (INR million/MWp) Details It is assumed that 5 acres/MW is required, at a cost of INR 0.3 million/ Land 1.5 acre, although this estimate will vary according to the technology chosen. Although in practice there is a cost difference between crystalline and thin PV Modules 101.9 film PV modules, the cost assumed for both of these technologies is US$ 2.2/Wp. An exchange rate of INR 46.33/US$ is assumed. Mounting The cost assumed for the mounting structure is INR 10 million/MWp 10.0 structure irrespective of the type of technology. Power The cost assumed for the power conditioning unit/inverters, including the conditioning unit/ 20.0 required controls and instrumentation, is INR 20 million/MWp inverters This cost includes supply, erection and commissioning of all cabling, Evacuation to grid 8.5 transformers and evacuation infrastructure up to the grid connection connection point. This cost includes services related to design, project management, Preliminary and insurance and interest during construction, among others. Though it 18.1 operating expenses is expected to vary with project size, the cost assumed for generic tariff determination is INR 18.1 million/MWp. Civil and general This includes general infrastructure development, application for permits 9.0 works and approvals, and preparation of project reports TOTAL 169.0 138 Utility Scale Solar Power Plants these act as “externalities”, which stem from investment environment. For example, a site located in a dusty choices made largely on the basis of financial benefits and environment is likely to require frequent cleaning of modules. drawbacks. It is difficult to predict the O&M cost over the latter part The financial benefits and drawbacks to the developer are of the 25 year design life as there are very few large scale explored in detail through the construction of a full financial solar projects that have been generating for sufficient time model. This facilitates the identification of key variables to have reached the end of their design life. The modules, affecting the project value and enables financing decisions. which typically comprise over 60% of the total project cost, are generally supplied with performance guarantees for 25 The following sections describe the key items and years. However, other project components require routine assumptions that would be included in the financial modelling maintenance and component replacement. Aside from O&M, of a typical Indian solar project, and discuss the conclusions operational expenditure will include comprehensive insurance, that can be drawn from the results of the modelling process. administration costs, salaries and labour wages. 12.3.2  Capital Costs 12.3.4  Annual Energy Yield According to a CERC report, capital cost per MWp for There are a number of factors which affect the annual solar PV plant in India is expected to vary between INR 150 energy yield of a solar PV project as discussed in Section 6. million to INR 170 million. This total capital cost includes The confidence level of the yield forecast is important, as the the cost of land, PV modules, mounting structure, inverters, annual energy yield directly affects the annual revenue. balance of plant and support infrastructure, and start-up costs. The cost variation largely depends on the project location, the 12.3.5  Energy Price project design (such as the voltage level of power cables), the technology utilised and the grid connection cost. Besides the power generated, the solar PV project revenue is dependent upon the power price. This may be fixed or variable In addition to overall project cost, there can be significant according to the time of day or year, and must be clearly variation in component costs depending on the type of PV stipulated in the power purchase agreement. technology used. Economic return has historically been the key limiting A project with crystalline PV technology requires less surface factor for development of large scale grid-connected solar area per kWp installed compared to thin film modules. As a PV projects. PV has a high initial capital cost. High energy result, the mounting structure and DC cabling costs are lower. prices are required for projects to be economic. Currently, However, there is not significant variation in the other cost grid-connected solar projects are highly dependent on policy components. support initiatives such as grants, feed-in tariffs, concessional project funding and mandatory purchase obligations. 12.3.3  Operations And Maintenance (O&M) Cost In India, the power tariffs for solar PV projects are determined by the Ministry of New and Renewable Energy O&M costs for solar PV are significantly lower than other (MNRE). Incentive policies include the generation-based renewable energy technologies. O&M costs depend on many incentives (GBI) and the recently created Jawaharlal Nehru factors, including the project location and the surrounding National Solar Mission (JNNSM). A Guide For Developers and Investors 139 Under these regulatory regimes and incentive schemes, there fixed rate tariffs. However, it has potential for better revenue are five main tariff options for the sale of the renewable power than some of the other options. that is generated: All projects should carefully assess the current tariffs available • Demonstration scheme GBI – tariffs aimed at to them to capitalise on the best rate. It is advisable to reassess supporting pilot projects. the rate at any stage when the tariffs vary or new options (for • JNNSM scheme – tariffs to encourage both large and which the plant would be eligible) become available. small scale projects. 12.3.6  Certified Emission Reductions (CERs) • CERCs Levelised Tariff – generalised country wide tariff. As India is a non-Annex 1 party under the UN Clean • State Government Incentives – localised tariffs. Development Mechanism (CDM), qualifying Indian solar projects could generate Certified Emission Reductions (CERs). • Selling electricity and trading RECs separately. These CERs can then be sold to Annex 1 parties and help them Under the GBI scheme, the project developer signs a PPA comply with their emission reduction targets. This effectively with the relevant state utility grid operator for a period of 10 causes transference of wealth from Annex 1 parties such as the years, whereas under the JNNSM scheme, PPAs will be signed UK and Germany to Indian developers. for 25 years. Each CER is equivalent to the prevention of one tonne of CERC has ruled that projects commissioned in financial carbon dioxide emissions. The income from CERs can be year 2010-2011 and 2011-2012 shall have a tariff term of 25 substantial. However, this revenue source cannot be predicted years. This term has been fixed on the basis of a reasonable as it is uncertain whether the project will be accredited. deemed internal rate of return (IRR). Equity is assumed to Moreover, CER values fluctuate considerably. Therefore, comprise 20% of project cost, with a rate of return of 19% for sensitivity analysis around the CER price (and the period of the first 10 years of operation, and 24% for the rest of a plant’s time for which the project is accredited) is important. useful life. The National CDM Authority under the Ministry of Under the JNNSM scheme, large scale solar projects with Environment and Forests (MoEF) is the designated authority in an installed capacity of 5MWp and above—connected to the India for approving CDM projects. grid at 33kV and above—will sign a PPA with NVVN. This, in turn, shall bundle the power with conventional power and 12.3.7  Financing Assumptions sell it to various utilities through the RPO. For projects with an installed capacity of less than 5MWp, connecting to the The project financing structure generally comprises of debt grid at less than 33kV, the project developer will sign a PPA and equity as described in Section 13. with the state utilities. The general financial assumptions for a project in India are as Trading of RECs must be conducted through power follows: exchanges within the price-range set by CERC. This range is subject to variation. Given the variability of the price of RECs, • Financing structure – equity 20% and debt 80% as assumed in CERC tariff order. this policy involves a higher level of risk for developers than • Debt repayment period – 10 years. 140 Utility Scale Solar Power Plants 12.3.8  Project Economics and Financial Modelling Results A project financial model will calculate a range of project A Minimum DSCR value of less than one indicates the value indicators in order to allow developers, lenders, project is unable to service the debt in at least one year. investors and relevant government bodies to assess the project Lenders will conduct sensitivity analysis around the key economics from several perspectives. variables in order to determine whether the project will be able to service the debt in a bad year, for example if energy yield is From an investor’s point of view, a project is generally lower than expected, or operational expenditure is higher than considered to be a reasonable investment only if the internal expected. rate of return (IRR) is higher than the weighted average cost of capital (WACC). Investors will have access to capital at a range 12.3.9  Sensitivity Analysis of costs; the return arising from investment of that capital must be sufficient to meet the costs of that capital. Moreover, Sensitivity analysis involves changing the inputs in the the investment should generate a premium associated with the financial model (such as power tariff, capital cost, and perceived risk levels of the project. energy yield) to analyse how the value of the project changes (measured using Net Present Value, Internal Rate of Return, Solar projects are usually financed with equity and debt or the Debt Service Cover Ratio). components. As a result, the IRR for the equity component can be calculated separately from the IRR for the project as a Sensitivity analysis gives lenders and investors a greater whole. The developer’s decision to implement the project or understanding of the effects of changes in inputs such as power not, will be based on the equity IRR. tariffs on the project’s profitability and bankability. It helps them understand the key risks associated with the project. As returns generated in the future are worth less than returns generated today, a discount can be applied to future Typical results that are monitored during sensitivity analysis cash flows to present them at their present value. The sum of include: discounted future cash flows is termed the net present value • Post tax Project IRR. (NPV). Investors will seek a positive NPV, assessed using a discount rate that reflects the WACC and perceived risk levels • Post tax Equity IRR. of the project. • Average DSCR. Lenders will be primarily concerned with the ability of • Minimum DSCR. the project to meet debt service requirements. This can be measured by means of the debt service coverage ratio (DSCR), Typical variables investigated during sensitivity analysis are: which is the cash flow available to service debt divided by the • Capital costs. debt service requirements. The Average DSCR represents the average debt serviceability of the project over the debt term. • Operational costs. A higher DSCR results in a higher capacity of the project to • Annual energy production. service the debt. Minimum DSCR represents the minimum repayment ability of the project over the debt term. • Interest rate. A Guide For Developers and Investors 141 Case Study 6 Economics and Finances The 5MW plant’s costs increased during the project development and implementation phase, but the escalation was only 2% of the original predicted cost. The risk of escalating cost was reduced by employing EPC contracts for the major site works. Projects developed using EPC contracts are able to reduce the risk of cost overruns. Detailed financial models, including sensitivity analysis should be carried out. The plant was financed by a combination of equity and loan, including 18% of the final expected loan cost from the IFC. Cost estimates of the project were provided by the developer at different stages of development and construction. The first cost estimate was made in 2008/09; a final expected cost was calculated in late 2010. A comparison of the costs against CERC benchmark values has been made in the table below. Cost (INR million/MW) 5MW plant Cost Area CERC benchmark Original estimated Cost at EPC contract Final expected cost cost (2008/09) signing (Q4 2010) PV Modules 101.9 110.0 115.0 115.0 BOS and 28.5 56.9 60.6 60.6 transmission line Civil, mechanical works and 19.0 15.0 13.3 13.3 commissioning Land 1.5 7.0 3.7 3.7 Pre operative 4.0 4.0 5.7 expenditure Interest 18.1 2.0 2.0 4.1 Financing fee 1.0 1.0 1.1 Contingency 3.9 0.2 0.0 Total Cost 169.0 199.8 199.8 203.5 % variation on +18% +18% +20% benchmark The comparison shows that the CERC benchmark provides reasonable indicative estimates but these must be adjusted according to project specific details. The main variation in the 5MW Tamil Nadu project compared to the CERC benchmark can be attributed to the cost of PV modules and electrical works. The price of PV modules was found to be 13% higher than the CERC benchmark and the cost of electrical works was 113% higher than the benchmark. The high cost of electrical works was partly due to the requirement for an electrical transmission line extension. 142 Utility Scale Solar Power Plants The benchmark land costs (0.3 INR per acre) provided by CERC were in line with land costs incurred during the project. However, the project used 13.2 acres of land per MW installed compared to the CERC benchmark of 5 acres. As a result, the cost of land per MW installed was more than double that of the CERC estimate. In total, the Tamil Nadu project cost 20% more than the CERC benchmark. Although the costs increased during the project development and implementation phase, the escalation was only 2% of the original predicted cost. The risk of escalating cost was reduced by employing EPC contracts for the major site works. The table below shows how the operating expenditure (estimated for the 5MW Tamil Nadu plant) compares to CERC benchmarked costs, including the expected yearly escalation rates. As the operating costs are only estimates at the time of writing, no lessons can be learnt at this stage. However, the indication is that the Tamil Nadu plant O&M cost estimates are in line with those of CERC. Cost Area 5MW solar plant (INR) CERC (INR) % Difference Supervisor Salaries 480,000 Labour Wages 2,437,500 Insurances 782,500 4,755,000 -6% Office Expenses 400,000 Spare Parts & Tools 400,000 Total O&M Cost for 5MWp 4,500,000 Annual Escalations 5.00% 5.72% -14% Project costs and energy yield predictions were incorporated into a financial model to assess the viability of the project with a tariff rate of INR 17.91/kWh. A sensitivity analysis was also conducted to determine the viability of the scheme under different stress tests. A Guide For Developers and Investors 143 Conclusions • CERC benchmarks can be used to make reasonable estimates of project costs at the feasibility stage. • Costs need to be adjusted according to the specifics of the project, such as the distance to the grid connection point. • Predicted costs for the Tamil Nadu project have been adhered to as they fall within the 2% escalation range. Discrepancies with the CERC benchmarks were due to module cost, electrical connection costs and the total area of land required for the project. • Projects developed using EPC contracts are able to reduce the risk of cost overruns. • Detailed financial models, including sensitivity analysis should be carried out. 144 Utility Scale Solar Power Plants 13.  FINANCING PV PROJECTS 13.1 Introduction It is not unusual to see an equity financing fee involved in the provision of equity to the project. In some cases, the equity The financing of solar PV projects is typically arranged by partner provides operations management for the project over the developer or sponsor. It comprises two parts: an equity the long term. investment and project financing to cover the debt portion. In Europe, it is quite normal to see equity partners and Project finance is the long term financing of infrastructure developers form a special purpose vehicle (SPV) to develop the and industrial projects based upon the projected cash flows project. This is the equity vehicle which owns the project and of the project rather than the balance sheets of the project plant when constructed. The SPV signs the EPC and O&M sponsors. Both the equity partners and project finance partners contracts, and the project revenues are paid to the SPV. The typically conduct an evaluation of the project covering the working capital requirements and debt servicing are taken legal aspects, permits, contracts (EPC and O&M), and from the revenue to determine the returns for the equity technical issues prior to achieving financial closure. partners from the projects, typically in the form of dividends. The project evaluations (due diligence) identify the risks and In some cases, the equity partners will not commit equity to methods of mitigating any risks prior to investment. Where projects unless they have received firm commitments of debt the project has inherent risks, the exposure to these risks project finance or leasing finance. will be negotiated between the parties and reduced wherever possible with insurance. The debt portion is typically provided by an investment bank providing project finance or leasing finance. The debt The following sections cover each of these steps and portion is the larger investment, which is typically 80-85% of processes. the total project cost. 13.2  Project Financing Despite the recent turmoil in the international credit markets, many financial institutions are willing to provide 13.2.1  Financing Alternatives long term finance for the solar energy market. Individual projects from smaller developers may receive financing with a The equity portion can be provided by the developer or loan to value (LTV) ratio of 80%, whereas portfolios of solar from equity partners that sign agreements or letters of intent projects from experienced developers may be financed with a to purchase the projects from the developers. Equity partners LTV ratio of 85%. The usual term of a project finance loan is may be individual firms, developers or equity funds managed approximately 18 years. by management firms, bank equity fund managers or pension fund managers. Large corporations and utilities may develop solar plants without the need for project finance; these projects are The equity funds can be used as the seed capital to start the financed from the corporate balance sheet. But the corporation construction of the project, following completion of the design or utility will still conduct a similar due diligence review before and environmental studies, legal analysis, permit applications committing the project funds. and grid connection applications. The equity is typically around 15-20% of the total project investment cost. A Guide For Developers and Investors 145 13.2.2  How a Lender Evaluates a Project Both equity and debt finance investors typically evaluate the The due diligence phase of evaluating a project takes three legal, permitting, consent and technical due diligence areas of the main forms: project. The due diligence conducted at the equity stage may be based on preliminary technical information. On the other hand, • Legal due diligence – assessing the permits and the due diligence for project finance is conducted at a later stage contracts (EPC and O&M). and often supported with detailed technical information and • Insurance due diligence – assessing the adequacy of designs. the insurance policies and gaps in cover. The developer typically carries out the following tasks: • Technical due diligence – assessing the technology, integration and technical aspects of the permits and contracts. • Identifies the sites with the best resources. The due diligence process reviews the designs and • Negotiates the use of the land. equipment specifications against best industry practice and • Conducts an initial solar resource analysis. examines their appropriateness to the environment and design goals of the PV plant. Typical areas assessed in technical due • Completes an EIA. diligence are: • Conducts initial layout and design including initial equipment selection. • Sizing of the PV plant: • Applies for and receives planning permits and consents. • Layout in the land area available. • Applies for and receives grid connection offer or letters • Appropriate buffer zone around the plant to of intent. account for shading/other activities. • Applies for feed-in tariff (FiT) and/or PPA. • Overall size appropriate for the grid connection. The equity investor typically evaluates the work in the list • Layout of the PV modules, mounting and/or above. The next key step is to validate and confirm all the trackers, and inverters: permits, consents and power purchase agreements. Along with • Assessment of level of inter-row shading. the equity partner, the project SPV can look towards securing the technical solution, detailed design and equipment supply. In • Access to plant components for maintenance some cases, these are carried out by the developer, depending on and installation activities. the stage in which the equity partner enters the project. • Electrical design layout and sizing: The project finance partner can often influence the choice of • Assessment of cable losses in the DC/AC cabling. the equipment technology, based on what they perceive to be “bankable”. This often affects the selection of modules, inverters • Assessment of appropriateness of the cable or mounting structures. One way to avoid such issues is to have placement and connectors. discussions early in the design phase with the project finance • Appropriateness of the earthing and protection partner. This can help assess the equipment selection and satisfy systems. the requirements of all partners. • Compliance to safety standards. 146 Utility Scale Solar Power Plants • Technology review of major components (modules/ The process of due diligence can require considerable effort inverters/mounting or trackers): from the developer to satisfy the requirements of the lenders. It is important that the developers have realistic financial • Suitable for environment. models with contingencies clearly shown. Alongside, it is • Integration of components. also imperative to have a sensible construction programme, which takes contingencies into account. Such a programme • Track record of suppliers and models. will clearly show that the target deadlines are realistic and • Quality and compliance certificates. achievable. • Compliance to safety standards. The due diligence process is likely to identify risks, and help • Warranties. develop solutions to mitigate the issues found. It may result in changes in the design or use of components in the plant to • Design life. make the project “bankable” for the lenders. • Degradation assumptions. 13.3 Risks • Energy yield assessments: • Appropriateness of any assumptions made. This section describes the key risks considered to be applicable to an investment in solar PV projects. The list • Source of solar irradiation data. of risks identified below is not an exhaustive list. Investors • Assessment of shade. and developers should satisfy themselves that the level of risk attached with any development is appropriate to their • Degradation assumptions. investment criteria. Developers and investors should make • Uncertainty analysis. every effort to mitigate the risks where possible. • Model used and modelling techniques. 13.3.1  General Business Risks • Check the theoretical Performance Ratio. 13.3.1.1  Interest Rates • Contract assessments (EPC, O&M, grid connection, power purchase and FiT regulations): Interest rate risk (variability in rates) is the risk borne by an • Looking for interface points and areas where interest-bearing loan. It can be beneficial to finance projects on there could be risks. long term fixed interest rate loans, as opposed to variable rate • Examining construction timelines and ensuring loans. that the critical path is clearly identified and mitigated in the contracts. A fixed rate loan is a long term loan that carries a predetermined interest rate with a tenure usually of 15-20 • Assessing the warranty and guarantee positions years. Ideally, the plant should pay back the loan in 10 to 12 within the contracts – protection for the lenders. years. But spreading the loan over a longer period allows for • Financial model assumptions: smaller annual payments. This allows the developer the scope to build a reserve and to return a profit in the first years. • Assessing that the assumptions used are complete and appropriate. A Guide For Developers and Investors 147 13.3.2.2  Inverters and Cabling The interest rate is payable at specified dates before Besides considering quality and warranties, the overall maturity. This can be the best form of natural hedging to configuration of the PV power plant must be designed match long term income with long term sources of finance. correctly. This will ensure that the maximum power reaches the grid based on the gross irradiance reaching the modules. 13.3.1.2 Leverage The technology and manufacturer choice for the inverters In cases where projects are to be financed through a mixture is also important for ensuring trouble-free operation suited to of equity and non-recourse debt finance, leverage may the environment and design of the PV plant. Warranties and potentially increase the total return of the equity investors. maintenance activities for the inverters need to be carefully But it may also lead to increasing losses in adverse market assessed to ensure that the risk of inverter failure is minimised. conditions. 13.3.2.3  Technology Failure 13.3.1.3  New Business Start-up Generation of electricity involves mechanical and electronic As the solar PV industry is fairly new, very few companies processes. These may fail under certain conditions, leading to have a long history in operating in this renewable energy loss of revenue and repair or replacement costs. Selection of sector. A possible way to tackle this problem is to have key modules, tracking systems (if used) and inverters should be contractor and strategic partners that have experience in based on the track record of manufacturers—and the warranties constructing and operating solar power plants. they offer. These warranties help reduce the risk of technology failure in the initial years of the PV plant’s operational life. 13.3.2  Technical Risks 13.3.2.4  Solar Irradiation Risk 13.3.2.1  Solar Module One of the key factors in determining the energy yield of a It is important to consider the quality of modules (for solar plant is the solar irradiation at the site. Changes in weather example, checking whether degradation will occur faster than patterns such as cloud cover, rainfall and heat waves could expected) and the strength of the module manufacturer’s reduce the energy output and, consequently, investor returns. warranties. Any problems in the installation are usually However, meteorological assessments and long term averaging identified within the first year and corrected under EPC show that inter-annual variation over the lifetime of a PV plant (construction) warranties. Later, problems can be rectified is generally quite low, generally in the order of 5%, depending under manufacturer’s warranties. But as far as possible, it is on location. preferable to avoid any interruptions to production. 13.3.2.5  Solar Module Degradation Given the long term nature of the project, choosing the right technology is essential in achieving consistent results The efficiency of solar modules as well as their degradation and maximising power output over the life of the project. (loss of performance) has a direct effect on the yield of a solar A productive and viable PV power plant will automatically plant. The degradation is indicated by the supplier (usually less become an attractive proposition to potential buyers in the than 1% per year). Any unexpected loss of performance could future. have an adverse effect on the business. 148 Utility Scale Solar Power Plants 13.3.3.4  Grid Connection Module manufacturer’s power warranties generally cover The connection to the third party distribution or larger losses of power due to degradation. However, the transmission network is often non-contestable. Therefore, the warranties need to be reviewed carefully for exclusions. The final grid connection is reliant on the works of the third party financial strength and backing of the module manufacturers network operator or their contractor. Grid connection contracts should be assessed to verify that the manufacturer can support and deadlines should be finalised to mitigate this risk. any claims against their warranties. In some cases, insurance policies may be taken out by the manufacturers to cover 13.3.3.5  Delay in Obtaining an Operating Permit warranty claims. In some jurisdictions, the relevant authorities must determine 13.3.3  Pre Completion Risks whether the construction of the plant and connection facilities has been carried out in conformity with the approved design, 13.3.3.1  Cost Overrun and whether they comply with the legal requirements. Delays or difficulties in obtaining the operating permit may affect the Exposure to changes in the prices of components can income and profitability of the solar PV plant. account for a cost overrun. A change in prices for certain key components, in particular modules and inverters, may have an 13.3.4  Post Completion Risks adverse effect on the bottom line. 13.3.4.1  Market Risk 13.3.3.2  Delay in Completion Every developer should also keep in mind that government Delay in completion occurs when there is a reliance on policy towards renewable energy may change unfavourably. third party contractors for installation. In the construction Changes with respect to legislation concerning renewable phase of a project, developers and SPVs enter into agreements energy policy could reduce the forecast revenues and profits with third-party professionals, independent contractors and of new projects. As importantly, a global consensus on taking other companies to provide the required construction and action on climate change may positively influence government installation services. If such contracted parties are not able policy. to fulfil their contractual obligations, the developers may be forced to provide additional resources or engage other 13.3.4.2  Change of Legislation companies to complete the work. Any financial difficulty, breach of contract or delay in services by these third-party Legislation gives qualifying PV power plants the right to professionals and independent contractors could have an receive a levelised tariff which takes into account depreciation adverse effect on the business. benefit. In India, under the JNNSM this tariff is guaranteed for all electricity produced for 25 years. Under Indian law, the 13.3.3.3  Permits, Grid Applications and Feed-in government cannot retrospectively change the tariff issued. Tariff However, once a project is connected, particularly those under 33kV, there may be a residual risk that individual state Permits and grid applications need to be secured for all governments may ask grid operators to retrospectively adjust project sites. Any project will carry the risk that all approvals the tariff levels. will not be finalised and approved by the competent authority or party within the expected timeline. Any delays may have an effect on the income stream from the corresponding project. A Guide For Developers and Investors 149 13.3.4.3  Operational Considerations Every operational solar power station engages an O&M It is important to note that insurance is no substitute for quality Contractor to carry out the day-to-day maintenance of (design and components), and should not be seen as a ‘magic wand’ the solar power station. Inefficiencies in the operation and to mitigate issues related to design, equipment or contract. management of the project could reduce the energy output. This can be reduced by adding performance clauses within the 13.4.2  General Liability Insurance O&M contract, based on the availability of the PV plant and targets for energy yield or performance ratio. General liability insurance covers policyholders for death or injury to persons or damage to property owned by third parties. General 13.4 Insurance liability coverage is especially important for solar system installers, as the risk to personnel or property is at its greatest during installation. 13.4.1 Introduction 13.4.3  Property Risk Insurance At present, the insurance industry has not standardised the insurance products for PV projects or components. A The PV system owner usually purchases property insurance to number of insurers are providing PV insurance policies, but protect against risks not covered by the warranty or to extend the underwriters’ risk models have not been standardised. The coverage period. The property risk insurance often includes theft data required for the development of fair and comprehensive and catastrophic risks. insurance policies are lacking as insurance companies often have little or no experience with solar projects. Property insurance typically covers PV system components beyond the terms of the manufacturer’s warranty. For example, However, demand for PV insurance is increasing. In if a PV module fails due to factors covered by the warranty, the general, large PV systems require liability and property manufacturer is responsible for replacing it, not the insurer. insurance, and many developers may also opt to add policies However, if the module fails for a reason not accounted for in the such as environmental risk insurance. warranty, or if the failure occurs after the warranty period, the insurer must provide compensation for the replacement of the PV Though PV insurance costs can be quite high, it is likely module. that rates will drop as insurers become familiar with PV plants and as installed capacity increases. A recent study by NREL 13.4.4  Environmental Risk Insurance stated: Environmental damage coverage indemnifies PV system owners “Insurance premiums make up approximately 25% of a against the risk of either environmental damage inflicted by their PV system’s annual operating expense. Annual insurance development or pre-existing damage on the development site. premiums typically range from 0.25% to 0.5% of the total installed cost of a project, depending on the geographic 13.4.5 Business Interruption Insurance location of the installation. PV developers report that insurance costs comprise 5% to 10% of the total cost of Insurance against the risk of business interruption is often energy from their installations, a significant sum for a capital- required to protect the cash flow of the solar project. This insurance intensive technology with no moving parts.” policy can often be a requirement of the financing process. 150 Utility Scale Solar Power Plants 14. CONCLUSION It is widely being accepted that solar energy has a major part to play in promoting ecologically sustainable growth and tackling climate change. In addition, tapping the power of the sun can improve the energy security of those countries, including India, which are currently dependent on fossil fuel imports. India has excellent reserves of solar resource and is well-placed to benefit from the development of a solar energy industry. However, there are numerous and varied challenges to be overcome at various levels in order to establish a successful solar power industry. It is vitally important that developers and financiers of solar energy projects follow best practices in developing, constructing, operating and financing projects. It is hoped that this guidebook will go some way towards promoting such best practices in the sector. However, it should be borne in mind that there is no substitute for experience and expertise. A Guide For Developers and Investors 151 Appendix A Concentrated Solar Power: A Guide For Developers and Investors 1. INTRODUCTION The objective of this report is to provide an overview of Concentrated Solar Power (CSP) technology. The report is intended to be read in conjunction with “Utility Scale Solar Power Plants: A Guide for Developers and Investors”, and focuses on those areas where CSP differs from PV. The report describes the following technologies and associated aspects of CSP projects: Technologies: Project aspects: • Concentrated solar power technologies • Solar resource. including: • CSP technologies uptake, experience and costs. • Parabolic Trough. • Solar field equipment and heat transfer. • Power Tower / Central Receiver. • Energy storage and supplementary heating. • Parabolic Dish / Stirling Engine Systems. • Power block / steam plant. • Linear Fresnel Reflectors. • Cooling and water consumption. • Integrated Solar Combined Cycle (ISCC). • Site selection. • Concentrating Photovoltaics (CPV). • Energy yield prediction. • Project implementation including design, development and construction. • Uncertainties and risks. 152 Utility Scale Solar Power Plants APPENDIX A 2. INSTALLED CSP CAPACITY Between 1984 and 1990, 354 MW of CSP generating capacity The distribution of average daily direct normal irradiation was commissioned. This capacity remains in operation today. across India is shown in Figure 1. High resource locations are No additional commercial plants were commissioned until represented in red and orange. Plants located in these regions 2007[1]. The suspension of commercial CSP from 1990 to 2007 will have a superior financial viability. From Figure 1 it can was primarily caused by the high cost of the technology in be seen that the most suitable locations are primarily in desert comparison with overall wholesale power costs. regions such as those in western India. The renewed market interest in CSP since 2007 is due to a Financial viability of projects will depend upon the resource, combination of rising fossil fuel costs, firm renewable energy technology and project costs, and the extent of government- targets, and substantial governmental subsidies or other financial driven financial support. Current costs of the technology and support mechanisms. These factors have helped CSP technology constraints on financial support indicate that only projects become commercially attractive, resulting in increased investment that are located in the areas with the highest direct normal in CSP projects. There is now 900 MW of total capacity irradiation are likely to be viable in the near future with commissioned and a further 1,900 MW under construction. annual average direct normal irradiation values of greater than 2.2 MWh/m2/year or 6.0 kWh/m2/day[4]. When bundled with energy storage or when integrated with biomass or fossil-fuelled power plants, CSP can provide load- 4. REVIEW OF CSP matching generating capability. Hence, CSP is being considered TECHNOLOGIES as a major part of the renewable energy mix in the long term[2]. However, this will be dependent on substantial cost reductions CSP technology utilises solar power by first concentrating low being achieved, combined with government-driven economic density solar radiation and then either converting it: support. • To heat energy, and then through a turbine and 3. THE SOLAR RESOURCE generator to electricity, in concentrating solar thermal systems; or CSP technology generates electricity by focussing the • Directly to electricity, in concentrating photovoltaic component of solar irradiance that travels directly from the sun. (CPV) systems. The diffuse component of solar irradiance which is scattered from the ground and the sky cannot be focussed and therefore The main concentrating solar thermal technologies are cannot be used by CSP technology. For this reason, a CSP plant reviewed in Sections 4.1 to 4.4, while the related Balance must be located in an area where clear skies are common, as any of Plant (BoP), heat transfer media, factors affecting project cloud cover, haze, fog or smog would significantly reduce the development and location, and the potential for integration with levels of direct irradiance reaching the plant. To focus the direct conventional thermal generating plant are evaluated in Sections irradiance, CSP technologies should face the sun at all times. 4.5 to 4.8. CPV systems are reviewed in Section 4.9. Linear They do this by using sun tracking technology. Fresnel reflectors are covered in section 4.10. [1] SgurrEnergy CSP project database collated from information in Photon [2] IEA; Technology Roadmap, Concentrating Solar Power; 2010 International, Sun & Wind Energy [particularly 6/2010 issue], NREL CSP [3] National Renewable Energy Laboratory http://nrel.com projects database [http://www.nrel.gov/csp/solarpaces/by_project.cfm], and [4] SgurrEnergy for Asian Development Bank; Central-West Asian Countries Solar developer or project websites. Potential, Concentrated Solar Power; Draft report, November 2010. A Guide For Developers and Investors 153 Figure 1: Average Daily Direct Normal Solar Irradiation in India (kWh/m2/day)[3] This diagram was created by the National Renewable Energy Laboratory for the Department of Energy (USA) 154 Utility Scale Solar Power Plants APPENDIX A Concentrated Solar Radiation CONCENTRATOR Heat Beam RECEIVER Thermal Engine Work/Electricity Irradiance Heat Rejected Receiver Concentration Losses Losses Work/Electricity Heat Rejected Receiver Losses Concentration Losses Figure 2: Ideal Representation of a Concentrating Solar Power System 4.1  Overview of Concentrating Solar Thermal Technologies In concentrating solar thermal technology, the concentrator These may be categorised as line and point concentrators as focuses the solar radiation on to a receiver which then heats shown in Figure 3. a transfer fluid either directly or through a heat exchanger system. The heat transfer fluid is then passed into a Each of these technologies will be reviewed in greater detail in conventional thermal generation plant. Figure 2 provides subsequent sections. a schematic energy flow diagram (Sankey diagram) of a simplified concentrating solar thermal power system. The overall arrangement for a typical utility-scale power plant using a parabolic trough solar field is shown in Figure 4. This Concentrating solar thermal technologies include: example includes thermal energy storage, which is incorporated between the solar heat receiver and the electrical power generation • Parabolic troughs; plant. With parabolic trough collectors the receivers are distributed across the solar field in the reflector units, whereas in power towers • Power tower / central receivers; the heat receiver is located at one or more centrally located towers. • Parabolic dish / Stirling engine systems; and Parabolic dishes can be used with a Stirling engine • Linear Fresnel reflectors. or alternatively a Rankine cycle heat engine, integral to A Guide For Developers and Investors 155 Points Concentrators Line Concentrators Receiver Parabolic Power trough tower Receiver Concentrator Steam at 350-550°C 80-120 bar Molten Salt Air or Helium at 600-1200°C Absorber tube Parabolic 1-20 bar dish Sunlight Fresnel Receiver reflector Secondary Reflector Fresnel Reflector Concentrator Figure 3: Solar Thermal Concentrator Types[5] Steam Turbine Solar Field Solar G Reheater Condenser Hot Salt Tank Solar Superheater Steam Cooling Tower Generator Deareator Water Supply Cold Salt Tank Solar Preheater Expansion Vessel Figure 4: Typical CSP Power Plant Schematic (Parabolic Trough with Storage)[6] [5] Graphic courtesy of Abengoa Solar [6] Graphic courtesy of Abengoa Solar. 156 Utility Scale Solar Power Plants APPENDIX A each dish unit. Utility scale parabolic dish power plants would Geographically, south-west USA dominates in terms therefore comprise many dish units. Energy storage is not of operating experience and future projects, with Spain included in such plants since the heat engine operates directly dominant in projects recently completed and under from the solar concentrator heat source. construction. The arrangement of linear Fresnel reflectors and power 4.1.2  CSP Cost Trends plant could be similar to that for parabolic troughs. However, since current linear Fresnel reflector installations yield Due to variations in the configuration of the CSP plant lower temperatures than parabolic troughs, and hence lower (as described later in this guide), generating cost or levelised efficiency conversion to electrical power, linear Fresnel cost of electricity (US$/MWh) is a much better indicator of technology is generally used for direct heat applications rather true costs than installed cost (US$/MW installed capacity). than utility power generation. The capacity factor (or load factor) varies over a wide range for CSP plants. Plants with similar areas of solar field, and 4.1.1  Uptake and Track Record annual energy yields, may have differently sized generators depending on whether or not they have energy storage. The uptake and track record of concentrating solar thermal technologies is shown in Table 1 and Figure 5[7]. Generating costs have been calculated from available cost and performance information for recently completed Parabolic trough technology is by far the most established projects and projects under construction. This information technology in terms of operating experience. It also shows the is shown in Figure 6[9] (as a comparison the levelised cost of highest anticipated build rate, taking into account projects generation for PV plants in 2010 was estimated to range from which have reached the advanced planning stage[8]. [7] Project data in the SgurrEnergy CSP database is collated from information in development permits are in place or subject to final approval, power purchase Photon International, Sun & Wind Energy [particularly 6/2010 issue], NREL agreements are in place and construction contracts and financing are at an CSP projects database http://www.nrel.gov/csp/solarpaces/by_project.cfm, and advanced stage of negotiation. developer or project websites. [9] Calculated from selected project data in the SgurrEnergy CSP database [8] Projects in the advanced planning stage are defined as projects where assuming 8% discount rate. Table 1: CSP Installed Capacity (MW) Advanced Region Construction Operation Notes Planning Solar generation supplies peak air conditioning loads. To date, most plants without storage. USA 7,837 758 431 30% government support on capital cost, Department of Energy loan guarantees, renewables tariffs. Individual plant capacity limited to 50 MW and storage encouraged Spain 1,801 973 432 by feed-in tariff mechanism (€269/MWh ~ US$365/MWh). Rest of 276 165 9 Mainly ISCC in Middle East and North Africa (MENA) World Total 9,914 1,896 872 A Guide For Developers and Investors 157 12, 000 10, 000 Installed Capacity (MW) 8, 000 6, 000 Advance planning 4, 000 Construction Operation 2, 000 0 Parabolic Parabolic Power Parabolic Linear Trough Trough Tower Dish Fresnel hybrid Reflector or ISCC Figure 5: Implementation of CSP Technologies 1000 900 800 Parabolic Trough with Storage Generating Cost (USD/MWh) 700 600 Parabolic Trough without Storage 500 400 Power Tower without Storage 300 200 Power Tower with Storage 100 0 1.50 1.70 1.90 2.10 2.30 2.50 2.70 2.90 Direct solar insolation (MWh/m /year) 2 Figure 6: Generating Cost for Recently Completed and Under Construction CSP Projects 158 Utility Scale Solar Power Plants APPENDIX A 170 US$/MWh (Middle East) to 400 US$/MWh (Northern to energy consumers. However, the pool price option enables Europe). While there is no clear trend, or differentiation generators to sell electricity at the market price and receive a between the various technologies, it is clear that the sites with lower premium tariff (€254/MWh) linked to the average or the greatest solar resource achieved the lowest energy costs. reference electricity price. Once the additional incentive for participation in this option and the continuity supplement Consistent CSP cost trends have yet to emerge but the are considered, the total tariff can typically be of the order following general comments can be made: of €330/MWh (US$440/MWh) dependent on pool power price. The terms for the feed-in tariff limit the capacity of CSP • Reported costs vary widely: plants in Spain to 50 MW each, and encourage incorporation • Projects which have recently been completed, of energy storage. or are currently under construction, show increasing cost trends; and Recent costs have been two to three (or more) times previous current estimated costs – these factors should • Previously projected cost reductions are arguably be applied to the future projected costs. For all CSP currently not being realised. technologies in the foreseeable future, substantial economic • Generating costs will depend on: support will be required for project economic viability, through a support mechanism which is specifically designed to • Direct normal irradiation (DNI) at the project location; support CSP projects. • Size of plant; 4.1.3  Summary Comparison • Optimization of the plant design; The key parameters of CSP technologies including CPV are • Technology costs; summarised in Table 2. • Cost reductions achieved through technology improvements; 4.2  Parabolic Trough Concentrators • Increased competition in the supply chain; and A parabolic trough system is composed of a solar field, a • Learning rate effects. power block and an optional thermal storage system. The solar field consists of parallel rows of parabolic, trough-shaped solar Recent CSP development in Spain has been driven by collectors that focus direct normal solar radiation onto tubular the feed-in tariff which was €269/MWh (approximately receivers located at the focal point of the collectors. The US$365/MWh at the time of writing) for the regulated tariff collectors are installed on single-axis tracking structures that option, for years 2 to 25, linked to the average or reference can be aligned on a north-south or east-west horizontal axis electricity price, with a lower tariff thereafter. Elimination depending on the electricity demand profile. of feed-in tariff for year one has recently been introduced to reduce a government budget deficit or pass-through of costs A Guide For Developers and Investors 159 Each receiver consists of a metal tube with a solar radiation used to generate steam which is fed into a conventional steam absorbing surface in a vacuum inside a coated glass tube. turbine to produce electricity. A heat transfer fluid is circulated through the receivers and transports the heat generated at the receivers to a series of heat Alternatively, parabolic troughs may be used for steam exchangers in the power block of the plant. The temperatures augmentation or to supply process heat. achievable are generally in the region of 400°C. The heat is Table 2: Comparison of Solar Thermal Concentrating Technologies[10] Parabolic trough Tower Dish Engine Linear Fresnel Commercial experience >20 years <4 years - - Technology risk Low Medium High Medium Optimal scale/ 50 MW to >100 MW 50 MW to >100 MW 100 kW to >100 MW 50 MW to >100 MW modularity Construction Demanding Demanding Moderate Simple to Moderate requirement Operating temperature 300°C-550°C 260-570+°C 750°C 270°C Efficiency 14-16% 15-22% 24-31% 9-11% Storage Yes Yes No Yes Levelised cost of energy Current: 0.30-0.75 Current: 0.20-0.90 Future: 0.05-0.08 Future: 0.06-0.08 ($/kWh)[11] Future: 0.06-0.08 Future: 0.06-0.08 Water usage High High Low Medium Land requirement High High Variable / flexible Variable Acciona Solar, Abengoa Abengoa Solar / Solar / Abener, Solar Abener, Bright Source Tessera Solar / Stirling Ausra / Areva (small scale Leading developers Millenium, Solel / Energy, Torresol, Energy Systems (SES) projects), Novatec Solar Siemens eSolar [10] Original reference source: Technology Innovation Report, Concentrated Solar Thermal, Cleantech Group, 2008; DLR; SCB research. Taken from Standard Chartered Bank presentation and updated by SgurrEnergy. [11] Cost ranges cover projects with and without storage where appropriate. 160 Utility Scale Solar Power Plants APPENDIX A Figure 7: An Example of a Parabolic Trough Concentrator Examples of a parabolic trough collector and a parabolic array. Mirrors need to be highly reflective to avoid losses and trough collector solar field are shown in Figure 7 and Figure 8. durable to resist the harsh environments encountered in the desert. The majority of mirrors currently used are of glass type The main elements of the collector system are: with a reflective backing. Mirrors can be manufactured from thick or thin glass; however, thick glass mirrors are currently • Reflector the most commonly used. • Receiver tube Thick glass mirrors are typically constructed of 3-5mm • Heat transfer fluid thick tempered glass or float glass (glass made by floating • Base frame molten glass on a bed of molten metal), which due to the high curvature required is normally pre-curved during construction. • Tracking system The mirrors are typically fixed directly on to the parabolic • Connecting elements trough supporting structure. • Control system The number of companies manufacturing thick glass mirrors is limited, with demand still outstripping supply. The A brief description of each component is given in the majority of reflectors manufactured for the parabolic trough following sub-sections. industry are produced by either Flabeg or Rioglass, both of which have historically manufactured glass for the automotive 4.2.1  Reflector industry. Other manufacturers are beginning to enter the market; however, their experience in manufacturing reflectors The reflectors used in parabolic trough systems are shaped is still limited. mirrors which are curved to create a focal point within a linear A Guide For Developers and Investors 161 Thin glass mirrors are constructed of a glass layer of around 0.8 mm. Due to the flexibility of the glass, these mirrors can be fixed directly to the supporting structure to provide the concentrator shape. The benefits of this type of mirror are the high reflectivity of the structure and lower cost in comparison to thick glass mirrors. One drawback of these mirrors is that they can be subject to corrosion if not correctly fixed to the supporting structure. Research is currently taking place on alternative reflector films made from such materials as polymers and aluminium. However, these technologies are currently still at the development stage and have not yet entered serial production or proved their durability. Despite differing concepts, most trough collectors have a similar design approach with individual collectors ranging Figure 8: An Example of a Parabolic from 5 to 6 metres in width and 12 to 13 metres in length. Concentrator Solar Plant 4.2.2  Receiver Tube 4.2.3  Heat Transfer Fluid Receiver tubes are mounted at the focal point of the The heat transfer fluid normally used in parabolic trough parabolic mirrors and serve as the first step in transferring the plants is thermal mineral oil. The two main types are Caloria, captured heat from the solar field to the power generation which has a temperature rating up to 300°C and Therminol block. Receiver tubes are made of a steel tube with a solar which has a temperature rating up to 400°C. Therminol is active surface treatment. The surface treatment maximises the more efficient of the two due to its ability to meet the the absorption of solar radiation and minimises the emission demanding requirements of vapour phase systems and its of radiative losses by means of a selective coating. The steel superior heat transfer properties. tube is surrounded by a glass tube with an internal vacuum to protect the selective coating from the effects of the ambient Alternative oils have been investigated such as Syltherm environment. Due to the differing expansion properties of which is rated above 400°C therefore allowing more efficient steel and glass an expansion bellows connecting the outer and heat transfer. This oil is, however, more expensive than the inner tubes is required. This ensures the vacuum between the others and as such it is not widely used. tubes is maintained. There must be a drying stage within the heat transfer loop There are only two main manufacturers of receiver tubes on to prevent condensation forming in the thermal oil at night. the market: the Israeli company Solel, now owned by Siemens, Direct steam generation technology is used in some plants, and the German manufacturer Schott. which eliminates the costs of specialised heat transfer fluid and the need for heat exchangers; however, efficiency and energy storage capacity is reduced. Further research is required in this field and pilot plants will need to be installed and generating 162 Utility Scale Solar Power Plants APPENDIX A to determine the feasibility of using this medium as the transfer collector panels were connected to one another by flexible fluid. hosing, which facilitated movement between neighbouring collectors besides helping rectify minor misalignment issues. Research[12], including commissioning of a pilot plant, is Some problems were observed during operations and the flexible currently underway investigating the use of molten salts (a hosing was replaced with a ball joint. This eliminated the original mixture of sodium and potassium nitrate) as a heat transfer problem. However, some concerns have been raised with regard fluid. Molten salts are also used for energy storage as described to the ball joint at high temperatures. Further research is being in Section 4.5. However, as the freezing point of these salts is performed in this area. typically above 200°C, a mechanism needs to be in place so that the molten salt does not freeze in any component of the system, The orientation of the solar field can be along either a north- including the pipe runs in the solar field from the receivers to the south axis or an east-west axis. A north-south axis is the norm to power island. allow collectors to track the sun’s azimuth over each day, hence maximising annual output. An east-west axis, in contrast, allows Other heat transfer fluids undergoing research include for seasonal adjustments for the sun’s elevation and latitude, thus pressurised gases and Diphenyl. maximising mid-day output. Since adjustment is seasonal rather than daily, east-west axis systems could dispense with motorised 4.2.4  Base Frame, Tracking System and and automated tracking systems. Usually, utility scale projects in Connecting Elements or near the tropics employ north-south axis systems. A structure is required to support the concentrators and allow 4.2.5  Examples from Industry the mechanism to track the daily path of the sun as it moves across the sky. The plants commissioned in the 1980s used a To date, parabolic trough technology is the most widely supporting structure designed by Luz International. Since then, deployed of the concentrating solar power technologies. there have been several evolutions from the original design. One Between 1984 and 1990, nine parabolic trough CSP plants, such structure is the Euro Trough torque box design. comprising 354 MW of generation capacity, were installed in the Mojave Desert of California in the south-west of the United The torque box is designed so that collector elements can be States. These pioneering plants were the SEGS plants of Luz connected together on one drive resulting in the reduction of the International; they are still in operation today having produced total number of drives and interconnecting pipes. The overall more than 11,000 GWh of electricity. reduction in components results in a reduction of cost and of the thermal losses in the system. The technology ceased to develop for a period of time and from 1990 until 2007 no further commercial scale developments Throughout the day, the parabolic troughs are normally set were commissioned. From 2007 to date a further 464 MW of on tracking mode by electric motors driving through gearboxes, parabolic trough power plants have been commissioned, 400 or directly by hydraulic drives. Hydraulic drives, which provide MW of which was installed in Spain. mechanical energy to move the collector, are currently the most common tracking mechanism used. An example of a recently completed project is the 50 MW Solnova I project which is reported to have achieved Generally, the solar field comprises many collectors. Earlier, significant construction and alignment (tracking) technology improvements. In addition 1,310 MW of capacity is currently under construction in Spain and the USA, with 7,960 MW at [12] Sandia National Laboratories - National Solar Thermal Test Facility the advanced planning stage, mainly in south-west USA. A Guide For Developers and Investors 163 4.2.6  Losses Losses within a parabolic trough plant arise from geometrical, upper limit on the size of solar field which can supply each optical and thermal factors. These losses, which are described power block efficiently, depending upon the heat transfer below, have to be given serious consideration during the design fluid used. Thermal losses mainly consist of convection and and siting stages of the plant development process. conduction losses to air and surrounding elements. Spacing between collectors must be adequate to minimise The maximum theoretical efficiency of a steam turbine plant shading losses, taking into account daily and seasonal variations (or any other heat engine) is limited by the Carnot Efficiency, in the sun’s path. As well as lateral spacing, losses in the defined as: effective collector length will also have to be taken into account tinlet steam - tcondenser outlet in sizing the solar field. ηCarnot= tinlet steam Optical and thermal losses will be present within the receiver Where: and will need to be accounted for when determining a plant’s ηCarnot = Carnot Efficiency, (%) overall energy production. Optical losses are associated with the tinlet steam = Temperature of steam at inlet to turbine (K) reflectivity, transitivity, absorptivity (the fraction of incident radiation that is absorbed) and beam irradiance inception factor tcondenser outlet = Temperature of water at outlet of condenser (K) properties of the receivers, including thermal incidence angle. Actual efficiency will always be lower than the theoretical Thermal losses and flow losses occur in the solar field maximum. As the steam temperature in a concentrating solar between the receivers and the power island, which places an plant is likely to be lower than in a conventional steam power 13% 14% Others 6% Land Preparation Foundations Thermal Oils 11% 27% Tubes Mirrors 4% Structures 11% Installation 14% Figure 9: Component Cost as a Percentage of Overall Plant Cost[13] [[13] http://www.leonardo-energy.org/csp-training-course-5-lessons 164 Utility Scale Solar Power Plants APPENDIX A 12,000 10,000 Installed Cost (1000 US$/MW) 8,000 Other Site Infrastructure 6,000 Power block / Steam plant Storage 4,000 Solar field / CSP Equipment 2,000 Figure 10: Installed Cost of a Parabolic Trough Plant with Storage Figure 10: Installed Cost of a Parabolic Trough Plant with Storage plant, and condenser temperatures may also be higher, the reference plant characteristics and main assumptions used to achievable efficiency is correspondingly lower. calculate the generating cost are given in Table 3. Based on these inputs, the levelised cost of energy was US$377/MWh, 4.2.7  Costs with the largest component of this cost being capital repayment on the cost of the project. The following section explores the installed and generating cost of a reference Parabolic Trough plant. The main opportunities for cost reduction have been reported as: Figure 9 provides a high level overview of the cost of each component in the solar field as a percentage of the overall cost Table 3: Parabolic Trough Reference Plant of the parabolic trough concentrator system. Characteristics Item The solar field accounts for around 60% to 80% of the Installed capacity 100 MW overall cost, while the power block (without energy storage) Direct normal irradiance accounts for around 10% to 15%. Energy storage, where 2.4 MWh/m2/yr (DNI) required, typically comprises 15% to 20% of the cost. The Land area 400 ha remaining cost is required for the civil and electrical site Capacity factor / load factor 38% infrastructure and other development activities. Energy yield 333 GWh/yr Figure 10 and Figure 11 give the installed cost and Energy yield per hectare 0.83 GWh/yr/ha generating cost breakdowns for a 100 MW capacity reference 8% discount rate, 20 year Capital repayment plant, based on the NREL SAM reference plant[14]. The term [14] NREL SAM model reference plant information from: Technical Report NREL/TP-550-47605, July 2010; Parabolic Trough Reference Plant for Cost Modelling with the Solar Advisor Model (SAM); C. Turchi. A Guide For Developers and Investors 165 350 300 Generating Cost (US$/MWh) 250 Land Rent, Insurance Fuel, water, losses 200 O&M cost 150 Capital Repayment 100 50 Figure 11: Generating Cost of a Parabolic Trough Plant Figure 11: Generating Cost of a Parabolic Trough Plant • Optimal siting of plants; • Technological improvements across the range of plant; • Optimal sizing of plants: size may increase to 200 MW or 300 MW before losses in the solar field • Increased competition in supply chain; and between the receivers and power island outweigh the benefits of increased size; • Learning rate effects with increase in cumulative built capacity, provided that build rate is sustained • Increase in storage capacity and capacity factor; or increased. 4.2.8  Conclusions Parabolic trough technology is currently the most established concentrated solar power technology. It can therefore be considered to be of relatively low technology risk. The main application is utility scale power generation, although it is also used for smaller scale power generation or process steam applications. The relative maturity of this technology is an advantage, as this has allowed refinement of many elements of the system. A large number of projects are currently in development, as seen in Section 4.2.5, reinforcing the technical viability of the technology. Drawbacks include: • shortage of manufacturers for key components (such as the power trough, receivers and mirrors) limits available manufacturing capacity and increases supply lead times; • limited maximum temperature, due to the limited concentration ratio achievable, which limits the maximum efficiency; • requires to be installed on flat ground, typically with a slope of less than 3%. Despite substantial financial support, the economic viability of this technology will depend greatly on the actual costs of completing projects currently under construction, as well as the effects of expected future reductions in costs from this baseline. 166 Utility Scale Solar Power Plants APPENDIX A 4.3  Power Tower 4.3.1  Heliostat and the Tracking and Control Mechanisms Power tower systems (see figure 12), also known as central receiver systems (CRS), consist of: A heliostat is an instrument consisting of a mirror mounted on a structure which allows the mirror to rotate. This allows • a heliostat field; direct solar radiation to be steadily reflected in one direction, • a tower and receiver; despite the movement of the sun. The heliostat should be positioned so that the reflected ray is consistently orientated • a power block; and towards the receiver. • an optional thermal storage system. Each heliostat is composed of a flat reflective surface, The field of heliostats (flat, dual-axis tracking mirrors) a supporting structure and a solar tracking mechanism. focuses direct normal solar radiation onto a receiver located Currently, the most commonly used reflective surface is the at the top of a tower at the centre of the heliostat field. The glass mirror. Membrane technology is under development receiver absorbs the concentrated radiation and transforms it consisting of a thin film reflective membrane stretched across into thermal energy in a working fluid, which is then pumped a mounting structure. This technology is still in its infancy to the power block. The power block generates steam (from and is not yet commercially available. Problems observed the heated fluid) to drive a conventional steam turbine and with stretched membrane heliostats include the durability generator to produce electricity. of the reflecting membrane and possible shape change of the heliostats surface due to wind effects. Heliostat sizes vary The temperatures achievable with power tower systems widely and aperture areas of up to 150 m2 have been assessed are greater than those achievable through parabolic trough experimentally. technology, and are in the region of 400-550°C. Temperatures of up to 1000°C are being mooted for future plants that In order to function properly, the heliostats must be cleaned will have demonstrable improvements in beam focussing at regular intervals as dirty heliostats can greatly reduce the on the receiver. This would enable much higher efficiency efficiency of the entire system. of conversion from heat to mechanical energy in the steam turbine, and thence to electrical energy in the generator. One difficulty encountered with the Abengoa Solar PS10 pilot plant (in Spain) was related to the wind conditions Although power tower technology is commercially less under which the heliostats could be utilised. In wind speeds mature than parabolic trough technology, a number of greater than 10 m/s the heliostats must be stowed (secured in a components and experimental systems were field tested as horizontal position) in order to avoid structural damage of the early as the 1980s and early 1990s. components. Very high wind speeds could cause damage. The principal components of power tower systems are The heliostat field is normally arranged to surround the described in further detail in the following sections. power tower. The most common layouts utilise a full circular field or a surrounding field in a north/south direction. The tracking system comprises an elevation drive and an azimuth drive which facilitate the movement of the heliostat to track the path of the sun throughout the day. To activate the A Guide For Developers and Investors 167 Figure 12: An Example of Solar Power Tower Technology tracking, each heliostat has its own individual control system. Since the effectiveness of focussing irradiation on the receiver The tracking algorithm takes into account various factors such diminishes when the heliostats are at too great a distance from as the distance from the heliostat to the receiver. the receiver, large power projects may comprise of more than one power tower, each with its own heliostat field. 4.3.2  Receiver, Heat Transfer Medium and Tower Experimental projects, such as the 2 MW Eureka tower The receiver transfers the concentrated solar energy reflected constructed by Abengoa Solar, are testing higher temperature from the heliostats to the transfer medium. Dependent on the technologies to achieve increased efficiency. technology, the receiver can be a boiler or steam drum. This directly produces superheated steam at around 550°C and a 4.3.3  Examples in Industry pressure of 160 bar for supply to the steam turbine or steam storage tank (as in the case of the BrightSource technology[15]). Currently there is 44 MW of power tower capacity in Alternatively, molten salt can be used as the heat transfer fluid operation, 416 MW under construction, and 1,291 MW at an and heat storage medium – see Section 4.5 for further details advanced planning stage. of heat storage and molten salts. The first power towers to be built (of pre-commercial scale) The tower supports the receiver, which needs to be located were the 10 MW Solar One and Solar Two plants in southern at a certain height above the heliostats to avoid, or at least California. Both installations were developed as demonstration reduce, shading and blocking of the heliostats. Tower heights plants. Solar One was operated from 1982 to 1988 and, after can vary from 50 metres to up to 165 metres depending on the initial test and evaluation phase, operated reliably. the distance of the heliostats from the tower. In Solar One, the water was converted to steam in the receiver and used directly to power a conventional Rankine [15] BrightSource website, technology section cycle steam turbine. The heliostat field consisted of 1818 168 Utility Scale Solar Power Plants APPENDIX A heliostats with an aperture area of 39.3 m2. The plant generated In June 2010 the World Bank approved a $200m loan to power for eight hours per day at summer solstice and four co-finance a 100 MW power tower plant near Upington, South hours per day close to winter solstice. Although Solar One Africa. demonstrated that power tower technology could be successful, it also revealed the disadvantages of a water/steam system, such In Rajasthan, India, ACME are commissioning a 10 MW as intermittent operation during cloud cover and the lack of plant, based on technology from eSolar (USA), and have plans to thermal storage. scale up to production of 50 MW units and implementation of utility-scale projects. Solar Two was built to replace the original Solar One power tower. The aim of the re-designed Solar Two was to test 4.3.4  and validate the use of nitrate salt technology, to reduce the technical and economic risk of power towers, and to stimulate Conclusions the commercialisation of power tower technology. The plant was built with sufficient thermal storage capacity to allow it Power tower technology is the second-most proven technology to operate at full capacity for up to 3 hours after the sun had for utility scale power generation after parabolic troughs. set. The conversion of Solar One to Solar Two required a new molten salt heat transfer system including the receiver, thermal Higher operating temperatures allow for higher performance storage, piping, steam generator and a new control system. and hence potentially lower costs than parabolic troughs. However, there is very limited information available on costs The first European plant and the first commercially which have been achieved, and on what is likely to be achieved operational power tower plant to be installed was PS10, near in the future; consequently, cost estimates remain uncertain. the Spanish city of Seville, which has a capacity of 11 MW. This plant was installed by Abengoa Solar and was completed Many developers are now adopting receivers which produce in the first quarter of 2006. The project has a heliostat field of steam directly in the receiver, as this type of steam receiver is 624 movable mirrors with a surface area of 120 m2. This field currently of lower cost and risk than molten salt receivers. concentrates the sun’s rays on the top of a 115 m tower where the solar receiver and steam turbine are located. A major factor in the scalability, performance and cost of energy using power towers is the effectiveness with which the A second plant, the 20 MW PS20, was installed in 2009 next heliostats focus the beam on the central receiver. This is an area to PS10; the design of PS20 was based on the original PS10 suitable for significant technical development and potential cost plant and included a number of significant improvements. reduction. These included a higher efficiency receiver, various improvements in the control and operational systems and a The terrain requirements for power tower plants are not as better thermal energy storage system. PS20 consists of a solar restrictive as those for parabolic trough technology, and plants field made up of 1,255 heliostats with an aperture area of 120 can be installed in areas with terrain gradients of up to 5%. m2. This field concentrates solar irradiation on the top of a 162 m tower which produces steam to drive the electrical generator. The actual costs of completing projects currently under construction, combined with future reductions in costs from Plants under construction and at an advanced planning this baseline will be key to economic viability of power tower stage are dominated by large scale (29 to 200 MW) plants technology, even where substantial economic support is in place. in the USA. In Europe, there is a 17 MW plant due for commissioning in Spain in 2011. A Guide For Developers and Investors 169 4.4  Parabolic Dish Parabolic dish technology offers a highly efficient conversion from solar energy to electrical energy, as well as full scalability. However, installed costs are likely to be higher than the costs of parabolic trough, Fresnel reflector and power tower systems. There are two forms of parabolic dish: one concentrates radiation on to a photovoltaic collector (concentrated PV or CPV) whilst the other concentrates radiation on to a heat receiver for a heat engine, which may be a Stirling engine or Rankine cycle micro-turbine and generator. CPV is covered in Section 4.9. Figure 13: An Example of a Parabolic Dish System uses heat to vary the pressure inside a hydrogen-filled sealed A total capacity of 3 MW of thermal parabolic dish systems chamber, driving pistons to produce mechanical power. The is in operation or construction, 387 MW can be considered world’s highest solar-to-grid efficiency of 31.25% was achieved to be at an advanced planning stage, with and a further 1,600 by Stirling Energy Systems in 2008[16]. MW at a less advanced stage. Most of the planned capacity comprises three large projects proposed by Tessera Solar/ Stirling Energy Systems’ sister company, Tessera Solar, Stirling Energy Systems. plans to install 1.85 GW in south-west USA. Initial plans are to install 10,000, 11.5 metre 25 kW solar dishes totalling 250 4.4.1  Stirling Engines MW. In subsequent projects, 850 MW and 750 MW would be installed and in latter phases, Tessera / Stirling Energy A Stirling system consists of a parabolic dish-shaped Systems could increase project capacity by a further 1,750 collector, a receiver and a Stirling engine. The collector focuses MW. If this is realised, the project would use up to 70,000 direct normal solar radiation on the receiver, which transfers twelve metre diameter solar dishes. Investment is estimated to heat to the engine’s working fluid to drive a generator. be in the region of $1bn[16]. Stirling engines are available for various applications in a The other principal players operating in the market are wide range of sizes, configurations and levels of complexity. Wizard Power which is developing the 40 MW SolarOasis They have been under development over several decades. The plant 4km north of Whyalla in South Australia using a recent focus on small-scale Stirling engines has been for micro- Rankine cycle engine, and Infinia who are developing Stirling cogeneration applications, as well as the CSP application. engine and dish technology. A 70 MW dish plant has been At the small and micro-scale the engine configurations and proposed for Spain. details are simplified to minimise unit costs, but this needs to be balanced against the resulting lower efficiency and possibly Stirling engines may be of particular benefit in applications reduced reliability or longevity. such as water pumping, where mechanical work is required, to drive a pump, rather than electricity for other purposes. The principal advantage of a Stirling engine design for CSP is that the focused heat from solar radiation is applied directly [16] Stewart Taggart; CSP: dish projects inch forward; http://www.trec-uk.org.uk/ to the heat engine-generator unit. Dishes typically provide a articles/REF/ref0904_pg52_55.pdf (accessed 26/07/2010); renewable energy focus July/August 2008 heat source at a temperature of 750ºC. The Stirling engine 170 Utility Scale Solar Power Plants APPENDIX A 4.4.2  4.5  Power Block Conclusions Since parabolic trough is the most established technology, the description of typical BoP will focus on this type of plant. Implementation of parabolic dish projects for utility-scale power generation is still at the demonstration stage. The power block of a CSP power plant is very similar to that of a conventional thermal electricity generation plant and Parabolic dish technology offers full scalability and flexibility their use and construction are considered proven technology of siting. Each dish is self-contained and does not require level in the industry. The steam required to drive the turbine is ground or close proximity to other dishes and hence is less generated via the heat transfer fluid and heat exchangers, exacting in its siting needs. The ease of finding a site combined rather than by the combustion of fossil fuels. with the relatively high solar to grid efficiency provides a basis for ambitious plans for construction of large projects using Due to the generally lower temperatures of heat from CSP tens of thousands of dish / Stirling engine units. plants compared with conventional combustion plants, and the smaller size of the plant, the efficiency of the steam plant However, rapid expansion is largely dependent, in the short is likely to be less for CSP than for conventional thermal term, on the achievements of one developer. Completion of generation projects, as explained in Section 4.2.6. The number the implementation cycle for commercial scale projects has yet of stages in the steam turbine may be less and the effectiveness to be demonstrated and uncertainties include: of the condenser may also be reduced (see Section 4.7). • Performance of production units, including efficiency The power system boiler is largely designed on a project- and reliability specific basis and requirements depend on the characteristics • Ramp up of serial production of the units, including of the CSP technology used. quality and costs Turbines are supplied by established manufacturers, such as • Longevity of units. Siemens, GE, Alstom or MAN Turbo. The Siemens SST-700 • Overall costs for construction of the site steam turbine, with a capacity of up to 175 MW is commonly infrastructure, including the foundations, access, and used for CSP applications. However, a specific CSP system electrical connections for the numerous dish units. steam turbine has not been released at this time. • Robustness of implementation plans, costing and commercial case. Due to the nature of CSP, the heat exchangers/boilers and turbines are subject to significantly more thermal cycling (heating and cooling) than conventional steam plants, which run for long periods at a time without outages. This cycling reduces the lifetime of the heat exchangers / boilers and can cause wear and damage to the turbine if the steam quality is not maintained. Low temperature steam turbines which are being proposed for larger solar fields or direct steam systems may not be well tested technology solutions. A Guide For Developers and Investors 171 3500 3000 (kWh/m²) 2500 (MW) Irradiation 2000 capacity Advance planning Solar 1500 Construction Installed Horizontal Operation 1000 500 0 Parabolic Parabolic Power Tower Power Tower Trough without Trough with without with Storage Storage Storage Storage Figure 14: Implementation of Energy Storage in CSP Plants 4.6  Energy Storage and Supplementary Heating 4.6.1  Overview The choice of whether or not to include energy storage depends on local market conditions. Energy storage is an established option for parabolic trough and power tower plants. Figure 14 compares the uptake of To date, in the south-west USA, parabolic trough plants CSP plants with and without energy storage. have typically been installed without energy storage as the solar resource is coincident with times of peak load (largely due to CSP with thermal energy storage, hydro with air conditioning). However, some parabolic trough projects impoundment, and biomass are the only established under construction, such as the 280 MW Solana project, and renewable power generation technologies which offer load other large projects being planned for the south-west USA, will matching capability[17]. It will become increasingly important incorporate energy storage. for plants to offer this capability as both the need to reduce reliance on combined cycle gas turbine (CCGT) plants and In contrast, in Spain the feed-in tariff mechanism has the increasing proliferation of wind and solar power will encouraged the use of energy storage and the technology has reduce overall load matching capacity in power grids. This will become established in parabolic trough plants. ensure further financial premium to support power plants with energy storage. Power tower plants tend to include energy storage although direct steam plants such as the Ivanpah plants in the USA [17] Excepting coincident resource with load demand, curtailment of generation, (370 MW) may not have energy storage. and use of separate energy storage plants such as pumped hydro or hydrogen. 172 Utility Scale Solar Power Plants APPENDIX A Energy storage in CSP plants was first demonstrated by transferring the storage medium from the cold tank for heating Solar One and Solar Two 10 MW power towers; it has from the solar field. also been demonstrated in a number of 50 MW parabolic trough plants, the first of which was the Andasol 1 plant Molten salt is the current storage medium of choice, commissioned in 2008. Current parabolic trough plants with although it has drawbacks, primarily logistical, as handling storage typically have between 6 to 8 hours energy storage is complicated. The molten salts used for energy storage, at full plant capacity. Some power tower plants have up to and sometimes for heat transfer in CSP plants typically 15 hours storage. Such storage is sufficient to accommodate comprise nitrate salt mixtures of 60% sodium nitrate and daily variation in solar irradiance and load demands, and 40% potassium nitrate. The use of calcium nitrate is a future enables the capacity factor of parabolic troughs to be increased possibility. The use of molten salts as a heat transport fluid is from 23-28% without storage to 36-41% with storage. well established in the chemicals and metals industries. Capacity factors for power tower plants range from 24% to 67%, the lower figures relating to plants without storage, while Innovation in storage media continues, including use of the higher figures are from the Solar Tres / Gemasolar plant, pressurised steam, specialised salts such as liquid fluoride which has storage. salts, phase change materials, thermo-chemical storage using ammonia, solids such as concrete or graphite, and hydrogen. It should be noted that overall energy output is likely to be Short-term energy storage may be provided using pressurised reduced as a consequence of incorporating a storage system, steam where the heat transfer fluid is direct steam, such as the but the system and economic benefits of the output matching 0.5 hours storage in the 64 MW Nevada Solar 1 parabolic demand in real time may outweigh these losses. The higher trough plant and the 1.0 hour storage provided in the 11 MW capacity factors from storage-equipped plants are likely to PS10 and 20 MW PS20 power towers. reflect a smaller turbine running at a higher percentage output for more hours. 4.6.3  Supplementary Heating (Use of Natural Gas or LPG) 4.6.2  Storage Medium (Including Molten Salts) The freezing of salts in storage tanks and circuits must be Heat storage using a liquid storage medium typically prevented, both overnight and during maintenance outages comprises two tanks: a hot tank and a cold tank. During high when heat is not supplied from the solar collectors and there solar irradiance, excess heat from the solar field is transferred is insufficient residual heat in the fluid, as the freezing points to the storage medium which is then transferred to the hot of the salt solutions are typically above 200°C, and hence tank. During low solar irradiance and high load demand, heat well above ambient temperatures. This is generally achieved from the hot tank is transferred to drive the steam turbine. through the use of natural gas or liquefied petroleum gas The storage medium is transferred to the cold tank once the (LPG) for direct heating or electrical heating. heat has been extracted from it. The cycle is completed by A Guide For Developers and Investors 173 4.6.4  Costs Partly due to the necessity for heating to prevent freezing of Thermal storage has been reported to add 5% or US$50/ molten salts and to provide essential back-up power, and also MWh to the generating costs of CSP. However, given to improve project economics, the use of natural gas or LPG variations in plant configuration, technical developments, is generally permitted by feed-in tariff mechanisms to generate changes in the costs of CSP technologies (including the solar up to a specified proportion of the total power generated. For field, storage, and steam power plant), and value of peak example the tariff system in Spain allows up to 15% of power electricity, the economic case for inclusion of energy storage to be generated from fossil fuels, and the SEGS plants in the should be assessed on a project by project basis, and in relation USA are permitted to use natural gas to supply up to 25% of to local electricity demand patterns. the heat energy into the turbines. Since continuity of power generation and ability to meet transient loads significantly 4.6.5  increases the value of electricity sales, operators generally use natural gas or LPG to generate power up to these limits and Conclusions export the excess output that is not required for essential self- loads. For example, generation from fossil fuels may be used Molten salts storage is technically proven but may in the evening or in the early hours once storage has depleted. be considered to be at an early stage of commercial This is much more cost-effective than increasing the size of demonstration. solar field or storage, and hence significantly improves the overall project economics. As thermal storage experience grows, it is likely that the operational flexibility of CSP will be broadened with In hybrid CSP plants, generation from natural gas is subsequent positive impacts on the economics. combined with solar energy generation. Natural gas may be used to increase the steam temperature above that provided 4.7  Cooling and Water Consumption from the solar field, to increase the efficiency of the steam power plant. In the case of integrated solar combined 4.7.1  Cooling Options cycle plants, generation from natural gas is dominant and a combined cycle gas turbine and steam turbine is used to In common with conventional steam turbine power maximise generation efficiency from the natural gas – this is generation plants, all CSP plants used for power generation discussed in Section 4.8. condense the steam exhausting from the steam turbine. This is necessary to achieve an acceptable efficiency when converting heat energy to mechanical energy, and to enable most of the purified water to be re-circulated back to the feed system and steam generators. As explained in Section 4.2.6, achieving a lower condenser temperature directly increases the theoretical efficiency limit of a turbine system. 174 Utility Scale Solar Power Plants APPENDIX A 4.7.2  Water Consumption The main cooling options for the condenser are summarised Conventional CSP plants such as parabolic troughs and in Table 4. Although dry cooling uses less water, initial power towers typically consume large volumes of water for capital costs are higher. Wet cooling is the most cost effective cooling to condense steam, provide make-up water for the approach in water rich areas. Dry cooling should be considered steam cycle, and for mirror washing. Water requirements for for water-stressed areas. different CSP technologies are given in Table 5. Table 4: Condenser Cooling Options Category Condenser cooling method Water and energy use Application Evaporative cooling in natural 5% of cooling water typically lost through evaporation. Common in large scale power plants. draft cooling towers. Wet Evaporative cooling using forced Air / evaporation temperature in hot draft with down-flowing water in climates may reduce steam cycle efficiency Most common form for CSP plants. box type structure. but not as severely as with dry cooling. Fan loads 0.5% to 1.5% of power More adaptable to power towers than generation. parabolic troughs. Air cooled condenser. Steam is condensed in a closed system Air temperature in hot climates reduces Plant costs are 5% greater than those of Dry including radiator, with heat steam cycle efficiency. wet evaporative cooling. extracted via high forced air flow Overall electricity generation reduced Overall generating costs typically 10% over finned tubes. by 5-7% compared with wet evaporative higher than that of wet evaporative cooling. cooling. Wet section used in “hot” season / conditions to maintain reasonable Cooling tower with dry or air efficiency. Due to its complexity, this option is only Hybrid cooled section above wet or water Dry section used in “cold” season likely to be applicable to larger scale CSP cooled section. / conditions that may reduce water plants. consumption to around 50% of that used during wet cooling. Lowest cost cooling system. Preferred Direct cooling from ocean, lake, option for power plants which can be sited Lowest energy use and highest steam by sea, for example nuclear power plants. river, cooling ponds, or recycled Direct cycle efficiency if low temperature cooling grey water (wastewater) through No known CSP plants using direct cooling source available. heat exchanger. to date except Palmdale plant in which it is planned to use recycled wastewater. Steam A Guide For Developers Turbine and Investors 175 Flue Fuel Gas G G Waste Heat Condenser Gas Turbine Recovery System High Pressure Steam Solar Steam Expansion Generator Vessel Deaerator Feedwater Low Pressure Preheater Figure 15: ISCC Plant Schematic[20] As the locations with the best solar resource are typically existing thermal power plants or as part of a new hybrid in arid areas, the supply of water can be a costly and complex installation. This is known as Integrated Solar Combined- exercise. Alternatives to water cooling should therefore be Cycle (ISCC). All combined cycle plants falling under this considered. Such methods are discussed in Section 4.7.1. The category use gas turbines in conjunction with steam turbines US Department of Energy (DoE) reports that dry cooling as the established conventional thermal power plant known requires approximately 350 litres per MWh for either type of as Combined Cycled Gas Turbine (CCGT). A typical ISCC plant. Hybrid wet/dry systems are also being developed which plant schematic is provided in Figure 15. balance water usage against cost and yield loss. Two different thermodynamic cycles, a gas-turbine Brayton All systems require water for mirror washing; this is typically cycle and a steam-turbine Rankine cycle, are combined in in the region of 60 to 90 litres/MWh. a single system through a Heat Recovery Steam Generator (HRSG). Fuel is combusted in the gas turbine in the 4.8  Integrated Solar Combined Cycle conventional way, and the hot exhaust gas goes through the HRSG. Here the energy from the gas generates and superheats It is possible to combine a solar thermal plant with a fossil steam to be used in the steam turbine cycle. In ISCC plants fuelled thermal generation plant, either by integrating with solar heat from CSP technology is integrated either at high Table 5: Water Requirements for Different CSP Plant Types Plant type Water demand, l/MWh[18,19] Parabolic trough, water-cooled condenser 2700-3500 Fresnel reflector Up to 3800 Power tower, water-cooled condenser 1900-2300 Parabolic dish (water required for mirror washing only) 60-90 CPV (water required for mirror washing only) 60-90 [18] CSP Today article – Cost efficiency Vs water usage, and US DoE Power Electricity Generation; http://www1.eere.energy.gov/solar/pdfs/csp_ [19] US Department of Energy (2001); Concentrating Solar Power Commercial water_study.pdf (accessed 26/07/2010) Application Study: Reducing Water Consumption of Concentrating Solar [20] Graphic courtesy Abengoa Solar. 176 Utility Scale Solar Power Plants APPENDIX A pressure in the HRSG or directly in the low pressure casing of Due to these advantages much of the CSP capacity outside the steam turbine. The general concept is an oversized steam the USA and Spain is made up of ISCC plants; a selection turbine, using solar heat for steam generation and gas turbine of projects that are currently under construction or recently waste heat for preheating and superheating steam[21]. completed is listed in Table 6. Similar to conventional CCGT, the gas turbine is operated to match electricity demand on the grid, ensuring higher value Table 6: Examples of ISCC Plants of the electricity generated. Night running increases the load Parabolic trough CCGT Capacity Plant factor for the steam turbine and condensing plant compared capacity (MW) (MW) with a solar-only system, so improving economics. Since the Ain Beni Mathar, 20 452 fossil fuelled gas turbine and its waste heat to the steam turbine Morocco provide both peak load-matching and continuity of supply, Hassi R’Mel, 25 130 ISCC plants do not utilise heat storage. Algeria Kuraymat, Egypt 20 115 All ISCC plants to date use parabolic trough technology Martin County, 85 Existing 450MW in the solar field. The CCGT power plant typically has a Florida, USA generating capacity of five to twenty times that which would be supplied by the solar field on its own. 4.9  Concentrated Photovoltaic (CPV) The steam temperatures provided from the gas turbine CPV uses concentrating optics to focus light onto small, exhaust through the HRSG are higher than can often be high efficiency cells (see Figure 16 & 17). These high achieved from CSP solar fields, which enables higher efficiency efficiency cells are more expensive than the cells used in operation of the steam turbine overall. Furthermore, it is cost normal photovoltaic plants due to the higher efficiency and effective for the larger scale steam turbine to have more stages operating temperatures required. The concept is to reduce than a small-scale steam turbine for a CSP-only power plant, the cost of electricity by minimising the amount of expensive providing a further increase in steam turbine efficiency. Hence, photovoltaic material required; the cost of the silicon cells the solar energy to electricity conversion is more efficient. typically comprises more than half of the module cost. The cost of the steam turbine, condenser, grid connection, With research cell efficiencies of over 40%, CPV is the most and site infrastructure are shared with CCGT power plant. The efficient of all the PV technologies. Efficiencies have been incremental costs for a larger steam turbine, the condenser and increasing by approximately 1% per annum and are expected cooling system are much less than the overall unit cost in a solar to peak between 45% and 50%. only plant, and an integrated plant does not have the thermal inefficiencies associated with the daily steam turbine start-up 4.9.1  Manufacturers and Examples from and shut-down. Industry [21] A. Fernandez-Garcia, E. Zarza, L. Valenzuela, M. Perez (December Installed capacity of CPV remains low. Only four 2009): Parabolic-trough solar collectors and their applications; http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VMY- companies, Amonix, ENTECH, Guascor Foton and SolFocus, 4YNB5Y6-1&_user=8452154&_coverDate=09%2F30%2F2010&_ rdoc=1&_fmt=high&_orig=search&_sort=d&_docanchor=&view=c&_ have installed plants of more than 1 MW. Amonix-Guascor searchStrId=1413265686&_rerunOrigin=google&_acct=C000050221&_ version=1&_urlVersion=0&_userid=8452154&md5=dae73bcebffd373c8a Foton, a joint venture, built the largest CPV plant at Parques 628c8a942157eb (accessed 26/07/2010); Renewable and Sustainable Energy Solares de Navarra, 7.8 MW, in 2008. Reviews, Volume 14, Issue 7, September 2010, Pages 1695-1721 A Guide For Developers and Investors 177 Secondary Mirror Primary Mirror High-Efficiency Optical Rod Multi-Junction Solar Cell Figure 16: Illustration of Typical CPV Concentrating Mechanism Figure 17: Example of SolFocus CPV Installation 4.10  Linear Fresnel Reflector Suncore Photovoltaics, a joint venture between Emcore and Linear Fresnel reflectors differ from parabolic troughs in that San’an Optoelectronics, is pursuing multiple projects as part the absorber is fixed in space above the slightly curved or flat of the 280 MW solar energy plan recently announced by the Fresnel reflector. Several mirrors are fitted into the system, all Chinese Government[22]. of which focus their energy on the central line-receiver. In some cases a small parabolic mirror is added to the top of the receiver 4.9.2  CPV Advantages and Disadvantages to further focus the sunlight. The principal advantages of CPV are that it requires water The options for siting and orientation of linear Fresnel plant for cleaning purposes only, is modular and is more flexible are similar to those for parabolic trough plant. A flat land than thermal CSP in terms of site requirements. Like parabolic area is required, and it is usual to orientate the reflectors in a dishes, CPV systems can be installed at sites with undulating north-south direction, in order to maximise sunlight captured terrain. throughout the day. Commercialisation of CPV is held back by the availability Linear Fresnel reflector technology has historically operated at of concentrator cells. A number of new companies with the lowest temperature of the available CSP technologies. the capability for epitaxial (single-crystal) growth of multi- junction cells have started competing with the established 4.10.1  Applications and Examples manufacturers Emcore[23] and Spectrolab. The availability of cells is expected to increase rapidly following the entry of these Implementation of linear Fresnel plants has been led by Areva new suppliers. Solar (previously Ausra, USA), with the 0.36 MW Liddell plant in Australia commissioned in 2007 and the 5 MW Kimberlina Although some standards are available, many key areas are plant commissioned in 2008. Areva Solar (Ausra) technology not covered in comparison with conventional PV. The most has been designed for application in utility-scale solar and solar critical of the required standards is ‘IEC 61853, Photovoltaic hybrid plants, steam augmentation and industrial processes such (PV) module performance testing and energy rating’, which as desalination and food processing. The overall concept was to has been in draft for over two years. In the absence of this design the technology to be utilised at the MW scale, although standard, nameplate energy ratings are debatable and hence some investors have lower confidence in CPV technology than [22] Emcore is the only vertically integrated CPV product provider at present, see: in conventional PV. In certain situations financing risk may be http://www.euroinvestor.co.uk/news/story.aspx?id=11207570 reduced if CPV is installed alongside a mature technology such [23] yourrenewablenews.com; EMCORE enters into multi-year agreement to supply Solar systems for utility scale power projects in US; http://www. as flat plate crystalline PV in a hybrid installation. yourrenewablenews.com/news_item.php?newsID=4085 178 Utility Scale Solar Power Plants APPENDIX A Areva Solar may be withdrawing from the construction of buildings for hospitals, factories and schools. These companies large utility power plants to focus on heat plants for industrial may develop and scale up their technologies for applications processes or smaller scale generation projects (up to 50 MW) such as process heat, desalination and power generation where the permitting process is more straightforward. in the future. The second major player in utility scale linear Fresnel plants 4.10.2  Reflector and Structure is Novatec Biosol which is currently constructing the 30 MW Puerto Errado 2 (PE2) project. This follows the commissioning The mirrors utilised in linear Fresnel technology are of their 1.4 MW Puerto Errado 1 (PE1) project in Murcia, generally manufactured from float glass and have a thickness of Spain in 2009. around 1-2 mm. This allows the mirror to be sourced from a number of manufacturers worldwide, unlike those of parabolic Other companies such as UK based Heliodynamics troughs where precision bent mirrors are required. Fresnel have developed and implemented facility scale systems for mirrors are relatively cheap to procure at around $9.8 and applications where the solar heat is used directly, without 3 kg per square metre, which corresponds to approximately conversion to electricity, for air conditioning and cooling in one third of the weight of a parabolic trough mirror. Figure 18: Kimberlina solar thermal energy plant, installed by AREVA Solar (USA) A Guide For Developers and Investors 179 The structures for mounting the mirror systems in linear 4.10.4  Fresnel systems are simpler than other CSP technologies allowing a higher volume of automated manufacture. As the mirrors do not need to support the weight of the receiver, the Conclusions overall weight of the structure can be reduced in comparison In the near term, it appears that linear Fresnel to parabolic trough technology. As linear Fresnel systems use technology is most likely to be implemented in mirrors located close together within a few metres of ground heat, rather than electricity generation applications, level, the wind has a reduced effect on the structure, allowing where its lower cost can more than outweigh its for a lighter structure to be used. When not in use, the mirrors lower performance compared with the other CSP can turn upside down for further protection from the wind, technologies. sand storms or hail. Its use for utility scale power generation is likely to 4.10.3  Receiver and Heat Transfer depend on: Linear Fresnel reflector plants use steam as the heat • The commercial success of the Puerto Errado transfer fluid. 2 (PE2) project and a small number of other proposed projects. The receiver of the Areva Solar / Ausra system is made from • Commercial success of small scale applications, steel tubes with heat absorption coating. Water is vaporised economies of serial production, and transfer of within the receiver tube. The steam is piped directly to the technology and production from small scale to required application, whether it is for electricity generation, larger scale units. steam augmentation or industrial processes. This allows for • Technology improvements and cost reductions the elimination of expensive receivers, performance reducing achieved for other CSP technologies. heat exchangers, and the costly transfer fluids that are required by parabolic trough technology. The simplification • Continuing substantial economic support for CSP power generation. of components required by the technology means they can be sourced from a variety of manufacturers. Novatec Biosol proposes to use evacuated tubes supplied by Schott on its future projects. These are similar to those used by parabolic troughs, which will enable superheated steam with a temperature of 450ºC to be supplied, compared with a temperature of 270ºC in previous plants. Due to the lightweight nature, the simplicity of the receiver and carrier and the absence of environmentally hazardous heat transfer fluids, the installation of a linear Fresnel solar field is much simpler than that of parabolic troughs. The modular design of the reflector and receiver units and prefabricated components reduce the need for skilled labour, particularly in small scale plants for heat applications. 180 Utility Scale Solar Power Plants APPENDIX A 5. SITE SELECTION As discussed in Section 3, CSP technology can only capture Fresnel reflectors. An average slope of 3% or less is preferable the direct normal irradiance (DNI) component of the solar for parabolic troughs and linear Fresnel reflectors, and 5% resource. This is a primary driver in site selection. Prime CSP for power towers . Parabolic dishes and CPV, due to their locations typically require DNI exceeding 2,200 kWh/m2 modularity, can be installed on steeper slopes. CSP may per year. The site screening threshold should be determined require less land area per MWh than PV, depending on the taking into account the envisaged technology, plant design, technologies employed. and region-specific factors such as the cost of grid connection, power prices, and the additional economic support which will A far greater quantity of water is required for parabolic be available. When considering a technology for a specific site, troughs, power towers and linear Fresnel reflectors than for the following factors should be considered: solar PV plant, due to the need for turbine condenser cooling. Depending on whether dry or wet cooling is employed, a • Nature and scale of energy generation plant, for large quantity of water is required and therefore a local water example utility scale power generation or process source at an environmentally acceptable and economic price is steam augmentation. essential. • Land availability providing sufficient direct irradiation and area which is within slope limits 6. ENERGY YIELD PREDICTION for the candidate technologies. If land availability is limited this may indicate a preference for a high 6.1  Site Conditions and Data Measurements efficiency technology to capture, convert and generate the required amount of energy. As for PV plants, predicting a plant’s energy yield begins • Economic support available and affordability. with quantifying the available solar resource. Accuracy is Minimum generation cost ($/MWh) will generally crucial in this area, due to the CSP requirement for clear skies determine the final choice of technology, irrespective and high DNI. of energy capture and conversion efficiencies. • Load matching requirements, and value of peak Depending on the location, DNI constitutes between 50% energy, will determine the choice of energy storage and 90% of Global Horizontal Irradiance (GHI), and varies system and its capacity. considerably in time and location. Annual DNI can vary by up to 30% from one year to the next, so irradiance data • Water availability is likely to determine the choice of should be measured over as long a period as possible in order condensing system. to increase the confidence in the long-term prediction. DNI Regions with high levels of airborne dust, haze or smog data availability varies greatly by location, and local data may are not suitable. This often rules out sites near large cities, not be available. The availability of local data will determine particularly in arid developing nations. Higher altitudes lead how much site data is required, but one year is considered a to clearer skies and higher DNI, so accessible high altitude minimum. Measure-correlate-predict (MCP) methods can locations can be considered. then be used to compare satellite and local meteorological data against site measurements. Use of satellite data on its own can CSP also generally requires land with minimal gradient, result in over-estimation of energy yield due to the effects of although parabolic dishes and power tower technology are near-ground haze which may not be measured by satellite. not as sensitive to slope as are parabolic troughs or linear A Guide For Developers and Investors 181 6.3  Energy Yield Modelling Ambient temperature and relative humidity should be Several computer based energy yield and optimisation measured. The site wind speed is also important, as the plant software tools have been developed to model the performance may need to shut down when wind speeds exceed a certain of a variety of photovoltaic systems (including CPV) and limit. concentrating solar power (CSP) systems including parabolic trough, power tower, and dish-Stirling systems. The energy yield prediction must therefore be based on measurement and analysis of the solar resource and other Two categories of models can be found: physical models conditions at the site combined with a detailed analysis of the based on heat transfer and thermodynamic principles, and proposed technology, including thermodynamic modelling of empirical models based on data obtained from performance the plant design. analysis of installed systems. Although physical models are generally more flexible than empirical models, for which 6.2  Technology Characteristics only a limited range of system components can be included, they also add more uncertainty to performance predictions Each CSP technology has its own energy yield than empirical models. Models used for each technology are characteristics. A difference when conducting energy yield described below. analysis for CSP, as opposed to PV, is the added dimension of the thermal conversion technology (with the exception of • CPV – models typically use the plant layout, parabolic dishes). CSP requires that thermal inertia and the technical specifications for the PV modules and inverters, tracking parameters and weather data for efficiency of the Rankine cycle steam turbine is accounted the site. for. This, in turn, depends upon the form of cooling system employed. However, unlike PV, CSP does not lose efficiency • Parabolic Trough – models typically use the plant due to degradation over time, or losses in inverters. Higher design and layout, optical and technical parameters ambient temperatures generally increase efficiency, providing for the collectors, receivers, power block, heat transfer fluid, thermal storage system (if any) and that the condenser performance is not adversely affected, cooling system, as well as control parameters and weather data for the site. Modelling of candidate technology systems for a particular project therefore needs careful consideration. Whereas • Power Tower – models typically use the heliostat empirical guides based on previous project experience can be configuration, technical parameters for the tower, receivers, power block, thermal storage system used for preliminary scoping, proper definition of the project (if any) and cooling system, as well as control and performance modelling will require detailed information parameters and weather data for the site. and analysis of: • Dish-Stirling – models typically use the solar field • Site conditions and resource data. layout, technical parameters for the collectors, receivers and Stirling engine, and weather data for • Site layout for each technology. the site. • Thermodynamic modelling of each candidate technology system. 182 Utility Scale Solar Power Plants APPENDIX A 7. PROJECT IMPLEMENTATION 7.2.2  Load Matching Generation 7.1  Overview Load matching options for CSP plants (excluding CPV) are considered in Table 7, indicating the relative size of the steam For commercial projects completed to date, few major turbine and heat storage for a given size of solar field. project problems have been reported in the public domain. It can be considered that the base technology, at least for At present the cost of the solar field and storage are more parabolic trough plants is proven. significant than variations in size of the steam power plant, and other plant such as natural gas fired plant provides peak Engineer Procure Construct (EPC), Design Build Operate power. Hence most current plants follow an intermediate load (DBO), or Build Own Operate (BOO) contracting strategies matching regime. are all established in the CSP sector. However, long term operating experience is confined to Florida Power Limited’s 7.2.3  Solar Multiple SEGS plants in the USA. The ratio of installed capacity of the steam turbine to the There are very large cost uncertainties and some planned size of solar field varies with the project design, particularly projects are on hold or being redeveloped as PV solar depending on the integration of storage. generation projects due to relative costs, economic support, and uncertainties. The solar multiple is defined as: As with any industry that depends on government policy to Actual area of Solar Field set subsidies, there is potential for a boom and bust cycle in Area required to operate turbine at design output at time of the CSP industry, unless consistent support is available with maximum solar irradiance appropriate long-term tapered reductions. Plants without storage have an optimal solar multiple 7.2  Design of roughly 1.1 to about 1.5 (up to 2.0 for linear Fresnel Reflector plants), depending primarily on the amount of Various technology-specific design characteristics have been irradiation the plant receives and its variation through the day. considered in Section 4. Some of the main design parameters Plants with large storage capacities may have solar multiples for CSP projects in general are considered here. of up to 3 to 5. 7.2.1  Project Size and Land Area 7.2.4  Capacity Factor Whilst many current CSP projects are of 50 MW capacities, Currently the capacity factors of parabolic trough plants many reports indicate a capacity of 200 MW would be more generally fall in the range of 23-28% without storage and cost-effective. A rule of thumb indicator for the ratio of 36-41% with storage. Capacity factors for power tower installed capacity to land area is around 0.3 MW/ha. plants range from 24% to 67% with the lower end of the range applying to plants without storage and the higher figure applying to the Solar Tres / Gemasolar plant which includes storage. A Guide For Developers and Investors 183 Improvements in effectiveness of storage should enable • High grade heat enables more efficient conversion capacity factors to be increased in the future. However, since of heat energy to mechanical energy (and thence to the capacity of the plant is not directly determined by the size electrical energy) in the steam turbine. of the solar field, an increase in capacity factor does not usually 7.3  Development give a proportionate reduction in generating costs. Development requirements will be highly specific to the 7.2.5  Grade of Heat region and regulatory regime for planning and permitting in the region, including specific regulations applying to land use, The grade of heat refers to the temperature and pressure of water use, and power / renewable energy projects. the heat transfer fluid delivered from the receiver to the heat storage or steam power plant after transfer losses. The grade of The size of the project may be a major factor in determining heat is important since: the regulatory regime which applies and hence the time and likelihood of progressing projects through the planning and • High grade heat may enable more effective and lower cost heat storage; and permitting process. Table 7: Load Matching Options Load matching regime Capacity of steam turbine Capacity of storage Factors favouring application Locations where air conditioning or cooling plant Intermediate load – coincident provide high proportion of grid Medium Minimum load. solar irradiation and loads Projects where minimum investment cost is required. Supply evening loads. Intermediate load – delayed Medium Medium Common solution with current loads storage costs. High peak power price premium. Peak load Large Large Low cost storage technology available. High power price premium for continuous generation. Base load Minimum Large Low cost solar field and storage technologies available. 184 Utility Scale Solar Power Plants APPENDIX A 7.4  Engineering, Procurement and Construction The CSP sector is dominated by several solar energy • Parabolic trough mirrors – Flabeg, Rioglass; technology companies and affiliates who are experienced in: • Parabolic trough receiver tubes – Solel (now owned by Siemens), Schott; • CSP technologies; • Steam turbines for CSP projects – the market • CSP project development; and currently appears to be dominated by Siemens. • Undertaking or managing CSP projects on an EPC basis. 7.5  Uncertainties and Risks Examples of solar energy technology / EPC companies for Large uncertainties remain for the future of CSP both in parabolic trough developments active in Spain and USA include: the short and long term. Some of the major uncertainties are summarised in this section. • Acciona Solar; • Abengoa Solar / Abener; 7.5.1  Achieving Performance Improvements • Solar Millennium; and Many of the projected cost reductions for CSP rely on achieving performance improvements in the technology. • Solel – now bought by Siemens, and showing interest in CSP steam turbine market. Uncertainties include: Similarly, examples of companies involved in power tower • Extent of further improvements in alignment developments include: technologies; • Increase in cost-effectiveness of heat transfer using • Abengoa Solar / Abener; different heat transfer fluids, or the limits heat • Bright Source Energy; transfer imposes on scale-up of project size; and • Torresol; and • Effective feedback from projects recently completed or currently under construction into new projects • eSolar. soon to commence construction, to enable successful technical developments and lessons learned to be For CPV, the only companies that have installed plants of incorporated. greater than 1 MW capacity are Amonix, ENTECH, Guascor Foton and SolFocus. 7.5.2  Realising Learning Rate Effects Projections for long term cost reductions for CSP rely to a Technology divisions could be owned by an energy company large extent on learning rate assumptions. In order for these with construction subsidiaries. The aim of the subsidiaries would reductions to be realised there must be: be to develop and construct projects using whatever technology is most likely to receive development permits, while being • Continuity of technical development; economically viable for the company. • Sustained and continuous build rate, taking Manufacturers of key specialist components are limited in into account actual costs and economic support number. Some of them include: mechanisms which will be visible and bankable in future; A Guide For Developers and Investors 185 • Sufficient proportion of the value of the plant which market volume will be required to attract new supply can be expected to be subject to learning rate effects; companies into the market. and 7.5.4  Short Term Cost Uncertainties • The percentage learning rate effect which is predicted must be realistic. Other cost uncertainties include: 7.5.3  Supply Chain Competition • Commodity price variations; and Cost projections for CSP often assume increasing • Project development and construction cost competition in the supply chain. However, there is currently uncertainties (typically greater than ±30%) remaining low diversity of supply of specialist components, and sustained once preliminary project design is defined. 8. Conclusions For all CSP technologies in the foreseeable future, substantial economic support will be required for project economic viability, through a support mechanism specifically designed to support CSP projects. Hence the first requirement for bankability is the availability of such support, including commitment to provide revenue support at a defined level and for the period necessary to achieve appropriate project returns. For utility scale power production, parabolic trough is considered to be the most bankable CSP thermal technology, due to its operation- al track record, which gives it a moderate technology risk (low relative to other CSP technologies). However, actual project construction costs are currently very high and show a very large range. The actual completion costs of projects currently under construction will be key to providing the basis for acceptable financial risk. Power tower technology is considered to be the second most bankable CSP thermal technology based on operational experience of 44 MW projects over the last 1 to 3 years, and current project construction experience, which gives it a medium technology risk. As with parabolic trough, actual project construction costs are currently very high and show a very large range. The actual completion costs of projects currently under construction will be key to providing the basis for future financing. Parabolic dish technology has been demonstrated at unit level for dishes of 25 kW capacity. However, the construction of a large array of dishes to form a commercial scale project has yet to be completed. Bankability of this technology in the short term will be reliant on the success of one technology and project developer partnership, namely Tessera / Stirling Energy Systems (SES), in taking its plans forward. There is insufficient actual construction experience to confirm costs at this stage. Linear Fresnel technology and project development is currently being aimed at smaller-scale building-integrated, process steam, or desali- nation applications, although there are some technical developments currently being undertaken which could make it more competitive with parabolic trough for utility-scale generation. Until this is demonstrated pre-commercially, linear Fresnel technology is not con- sidered bankable for utility-scale power generation. There is insufficient actual construction experience to confirm costs of utility-scale projects at this stage. Concentrating PV is currently perceived as a relatively high risk investment compared to other solar technologies. Reasons for this include a lack of standardisation and certification, lack of volume production, and lack of an established supply chain with demonstrated capability. Financing risk may be reduced if CPV is installed alongside a mature technology such as flat plate crystalline PV in a hybrid installation. 186 Utility Scale Solar Power Plants APPENDIX B Appendix B AC Benchmarks Table 1: Cable Specification Manufacturer XXX Model XXX Conductor nominal cross-section 50mm2 Core number 1 Conductor type Rm Insulation thickness 5.5mm Sheath thickness 2.5mm External diameter 33mm Maximum conductor operating temperature 90°C Nominal voltage Uo 12 kV Nominal voltage U 20 kV Conductor material Copper litz wire, bare Core insulation Cross-linked Polyethylene (XLPE) Suitable for outdoor use Standards compliance DIN VDE 0276 part 620, HD 620 S1 , IEC 60502 Table 2: Switchgear Specification Manufacturer XXX Model XXX Insulation type Gas Insulated Switchgear Rated voltage 24 kV Rated short-duration power frequency withstand voltage 50 kV Rated lightning impulse withstand voltage 125 kV Rated frequency 50 or 60 Hz Rated peak withstand current 100 kA Rated short-circuit making current 100 kA Rated short-time withstand current, 3 s 40 kA Rated short-circuit breaking current 40 kA Rated normal current for busbar 5000 A A Guide For Developers and Investors 187 Table 2: Switchgear Specification Rated normal current for feeders (depending on panel type) 2500 A Degree of protection IP 65 – Primary part IP3XD – Secondary part Dimensions (WxHxD) 600x1625x2350 mm Warranty 2 years type-tested switchgear IEC 62 271-200 Standards compliance IEC 60038, 60095 Table 3: Transformer Specification Manufacturer XXX Model XXX Indoor/Outdoor Number of phase 3 Rating 1350 kVA Primary side voltage 20 kV Secondary side voltage 690V Vector Group Dyn5 or Dyn11 Cooling Oil immersed hermetically sealed ON AN Insulation type NYNAS NYTRO TAURUS Frequency 50 or 60 Hz No load loss Po 1.700 kW Impedance loss Pk 12.000 kW at 75°C Short-circuit impedance uk 6% Dimensions (WxHxD) 1860 x 1110 x 1830 mm Weight 3800 kg Oil weight 700 kg Noise level ≤ 60 dB(A) Protection system DGPT2 Warranty 2 years Standards compliance IEC 60076, IEC 60085, IEC 60214 188 Utility Scale Solar Power Plants APPENDIX C Appendix C of goods, materials, equipment, salaries and other items or any changes in general economic conditions. EPC Contract Model Heads • Ground Studies – means the ground studies of Terms commissioned by the Contractor at its own expense prior to the date of this Agreement in respect of the Definitions and Interpretation Site. EPC Definitions • Independent Engineer – means an independent engineer selected by the Lender(s) as of Financial • Acceptance Date – is the date that formal final Closing or thereafter and notified to the Contractor. acceptance of the Contractor’s works by the Client • kWp – means kilowatt peak. takes place. • Isc – means the short circuit current • Building Permit – means the building and planning permit which is attached to the Appendices. • Nominal Power – means the name plate nominal electrical output of the solar modules in kWp set • Construction Period – means the period out in respect of each module by the producer of commencing on the Effective Date and expiring on the solar modules on the label placed on the module the Completion of the Project. (save for manifest error). • Contractor – the EPC contractor. • Payment Schedule – means the payment schedule in • Client Representative – means a selected the form attached as Appendix [x]. representative of the Client that reports/advises the • Provisional Acceptance Report – means the report Client. to be signed which is set out in Exhibit [x]. • Effective Date – means the first day after the day on • Provisional Acceptance Test – has the meaning which the EPC Contract is signed. given to it in Appendix [x] • Final Acceptance Report – means the report to be • VAT – means value added tax or any equivalent tax signed in accordance with clause [xx] the form of that is levied on the supply of goods or services in which is set out in Exhibit [x]. any jurisdiction. • Final Acceptance Test – has the meaning given to it • PAP – Is the provisional acceptance period that is in Appendix [x]. allocated for the acceptance test to reach the agreed • Force Majeure Event – means all unforeseeable values. events that lie outside the sphere of influence of the • Plant – The power plant to which this contract Parties (including unlawful delays in proceedings at refers. Details of the power plant should be contained the public authorities) and the effects of which on the in an annex to the contract, including the total fulfilment of this Agreement cannot be prevented by nominal power output (MWp), details of the the Parties through reasonable efforts or alternative equipment and systems that form the plant. arrangements; such events or circumstances shall include, among others, extreme weather conditions • Principal – Owner of the Plant. at the Site that should not normally be anticipated at the time of conclusion of this Agreement. A Force • Voc – Open Circuit Voltage. Majeure Event does not include changes in prices A Guide For Developers and Investors 189 Subject and Purpose of the EPC Contract • The Contract is for the Contractor to carry out the distribution network. These permissions and turnkey construction, commissioning and delivery of authorisations will entitle the Contractor to carry out the Plant to the Client. the construction and installation of the plant on the Site. • The Contractor shall design and construct the Plant in accordance with the EPC contract, relevant Inspections international and national standards, industry best practice, OEM instructions, technical conditions set • The Client shall have the right to have the out in the Grid Connection Agreement and Power construction works monitored by a representative Purchase Agreement (or similar), and applicable of their own choice and on their own terms. The legislation. representative shall be independent and not affiliated • The subject of this Agreement involves engineering, to the Contractor in any way. design, procurement, construction, assembly, testing, start-up, commissioning of the Project by the Alterations to Client Scope of Work Contractor. The Project includes the construction and operation of the transformer station, connecting • All required alterations / deviations to the agreed the power plant to the feeding point, to the scope of work by the Contractor costing over transformer station, and connecting the power plant €/£/$[xxx] shall require the approval of the Client or at the transformer station to the mean voltage system the Client’s Representative. operated by [grid operator]. This includes switchgear (interface) as specified in Schedule of Scope of Tasks and Obligations of the Contractor Work, on a turnkey basis with fixed term fixed price including fixed timeline and fixed performance. General Scope of Performance Tasks and Obligations of the Client • The Client shall be provided with all appropriate site drawings/documentation before construction works General begin on site. • The Contractor shall deliver a Plant that operates • The Client shall be required to provide and maintain within the following capacity and performance access to the site unless this is included within the parameters: Contractor’s Scope of Work. • A total capacity of not less than [x] kWp DC. Site Data The total capacity shall be defined as the total of all nameplate output capacities as indicated on • The Client shall make available to the Contractor each module installed. any site data (already collected for the site) that has been requested by the Contractor before signing of • At Provisional Acceptance, Plant Performance the EPC contract. Ratio of greater than [x]%. Permits • During the Acceptance Test Period, a Plant Availability of greater than [x]% during daylight • Prior to the date on which the Contractor shall hours. commence site works, the Client shall obtain all • The Contractor shall be responsible for the necessary planning permissions, building permits, completion of the works that are necessary to satisfy authorisations for connection to the electricity 190 Utility Scale Solar Power Plants APPENDIX C Permits the requirements listed under the scope of the Prior to the date on which the Contractor shall commence contract. Works on the Site, the Client shall obtain all necessary • The Contractor shall also be responsible for the safe planning permissions, building permits and authorisations for and proper operation of the Works in conjunction connection to the electricity distribution network. This will with the works and services to be provided by the be done in order to entitle the Contractor to carry out the Client for the purpose of completing the Plant. construction and installation of the plant on the Site. • The Contractor shall provide a guarantee for a duration of [x] years that the plant will contain all The Contractor is responsible for designing, constructing characteristics detailed within the EPC contract. and the installation of the plant in accordance with all necessary planning permissions, building permits and • For the duration of the site works, the Contractor authorisations for connection to the electricity distribution shall be responsible for the provision of security/ network that are in place and have been obtained by the surveillance of the Site and all goods, materials, equipment and other items located on the Site. Client. • The contractor shall conduct studies to satisfy Documentation themselves of the ground conditions on site. Delay The Contractor shall provide the Client with all appropriate site drawings/documentation before construction works begin The Contractor shall be required to complete the on the site. installation and construction of the plant in accordance with the timelines set out within the Project Schedule. If the The Contractor shall be required to provide, at a minimum, Contractor is unable to complete the works within the agreed the following documentation after the final acceptance tests timescales, then the Contractor will be required to pay the have been completed: Client compensation. • Technical data sheets for all components / materials. The contractor shall be required to pay the client €/£/$xxxx • ‘Flash Lists’ for the modules. per day of delay past the agreed completion date within the • Operation and maintenance manuals. Project Schedule. • Procedures for managing faults/malfunctions/issues. The amount of compensation that the Contractor will be obliged to pay to the Client as a result of failure to meet the • Characteristics of the components. timelines set out within the Project Schedule shall be limited • Both general and detailed final ‘as built’ drawings. to a maximum of [xx]% of the total value of the Contract. • Inspection certificates from the respective competent governmental authorities and institutions, and any Defects other documents that would be required for the operation of the Plant. The Contractor shall be responsible to the Client for any defects, including absence of any feature explicitly specified • All component guarantees / warranties. within the scope of works, and any failure relating to any guarantee of any component of the plant. A Guide For Developers and Investors 191 The Contractor’s Right to Employ Sub-contractors • Mounting frame installation dates To fulfil obligations arising from the EPC Contract, clauses • Module installation dates are required to specify the entitlement of the Contractor to use competent third parties. The Contractor shall be fully • Inverter installation dates responsible for the action of sub-contractors. • Operation date The Contractor shall only be allowed to appoint sub- • Acceptance testing date contractors only after approval from the Client or the Client’s • Completion/Take-Over date Representative. Payment Schedule The appointment of sub-contractors does not relieve the Contractor of the responsibility for the complete, accurate and The Contract Price shall be a fixed cost for the complete delivery timely execution of the Contract. of the plant, and shall be calculated using the following formula: Project Schedule Total installed capacity (kWp) x €/£/$[xxxx]/kWp = contract price (excluding VAT) A project schedule shall be required to highlight the installation and construction timelines. It should also include, Payments shall be made by the Client to the Contractor in at a minimum, the dates for the tasks listed below: accordance with a Payment Schedule that shall be contained within the Annexes of the EPC Contract. The payment Schedule and • Commencement date associated Milestones shall take the form as seen within Table 1. Table 1 – Milestone Payments and Transfer of Title Milestones Definition of Milestone % of Contract Accumulated Payments M1 Advance payment after signing of Contract 10 10 100% mechanical and electrical completion of: • module support structures (tracking systems) M2 20 30 • security fence • electrical substation 100% mechanical and electrical installation of the PV modules, and M3 40 70 inverters. Payable after commissioning and availability of at least 90% of the M4 10 80 modules Acceptance of the Provisional Acceptance Tests and issuance of the M5 10 90 Provisional Acceptance Certificate. Completed scope of work and snag list. M6 First receipt of income from generation (of power) on the site. 10 100 192 Utility Scale Solar Power Plants APPENDIX C The Contractor shall not be entitled to payment for any The minimum documentation to be provided with the test milestone until all requirements of the milestone are met. The report is as follows: Client shall retain 10% of the contract until first receipt of income from generation (of power) on the site. • Technical data sheets for components / materials. • Operation and maintenance manuals. Testing and Sign Off • Procedures for managing malfunctions. Pre – final Testing • Characteristics of the components. Pre-final testing at a minimum shall consist of the following: • Both general and detailed final drawings. • Verification of the completeness of work. Final Acceptance Certificate • Voc and Isc for each string greater than [93]% of The Final Acceptance Certificate shall have a guaranteed nominal – with I>600W/m2. level of performance of: • Submission of: • [xx]% PR (to grid export meter) with temperature • Construction Progress Report. and irradiation correction. • Functional check documentation. • During the period between Provisional Acceptance and Final Acceptance an average availability during • Statement of module installation completeness. daylight hours of greater than [xx]%. • Snagging list as agreed by Contractor/Client. And following a period of [x] month(s) following the • Declaration of compliance to all local grid provisional acceptance test, the test is repeated with the connection requirements. following level of performance to be achieved: Provisional Acceptance • [xx]% efficiency (temperature and irradiation corrected) for the DC generation. The provisional acceptance test shall at a minimum consist of a provisional acceptance period (PAP) of [15] days, and • [xx]% conversion efficiency. shall have a guaranteed level of performance of: Or • [xx]% efficiency (temperature and irradiation • [xx]% Performance Ratio (to grid export meter) with corrected) for the DC generation. temperature and irradiation correction • [xx]% conversion efficiency. Make Good Periods Or If the Plant does not meet the guaranteed levels of • [xx]% Performance Ratio (to grid export meter) with performance set out in the Pre-Final, Provisional Acceptance temperature and irradiation correction or Final Acceptance tests, the Contractor has [x] days to make good the deficiencies. Retesting of the Plant will be at the A Guide For Developers and Investors 193 Insurance Contractor’s expense, including the costs for any external/ The Contractor shall have, at a minimum, the following third party testing experts. If the Plant does not achieve the insurance cover for the duration of the site works: guaranteed levels of performance even after repair and retests, then the Contractor shall either make compensation to the • Erection Insurance Client or the Client will be entitled to withdraw from the • Public Liability Insurance agreement. [Note: This clause needs to be carefully worded and agreed between the Client and Contractor. Even small • All Risks Insurance deficiencies in performance can add up to large reductions in The contractor shall also, at their own expense, be required revenue over the project lifetime.] to hold any other legally required insurance for the location of the Plant. Warranty Duration and Termination of Agreement The Contractor warrants that their work will remain defect free for a period of [x] years following final acceptance of the Plant. Sections required for covering: The Contractor will transfer all equipment warranties and • Commencement of the agreement guarantees to the Client following Final Acceptance. • Standard duration of the agreement Legal, Governing Law and Jurisdiction • Extension of the agreement (at the option of the Principal) The contract shall have sections covering: • Termination of the agreement due to: • Governing law and court of jurisdiction of the agreement. The governing law is normally the law • Financial arrears. of the country in which the Plant is located. • Insolvency. • A legal succession or a transfer of rights condition • “Good cause” relating to statutory law, failure to is required so that the Principal reserves the right to comply with the requirements contained in this assign the EPC contract to a third party. agreement, or environmental, planning or legal breaches. • Non-disclosure agreement. This agreement between the Contractor and the developer will outline what • Consequences of the termination. information is to be considered confidential and what may be disclosed to third parties. • Contractual language. Defining the language in which the official legal contract and agreement are to be drafted. • Agreed language for the delivery of reports, documentation and accounts and which version will be the legal copy. 194 Utility Scale Solar Power Plants APPENDIX C Arbitration Sections required for covering: 3. The Project Permits [Planning / Building / Grid Connection] • The settlement of any dispute that might arise concerning the EPC Contract. 4. Form of the Progress Report • Notification of arbitration. 5. Training of Personnel • Location of the arbitration hearing and under 6. Construction Schedule [this should include all the what law. timelines for the construction tasks for the plant] 7. Payment Schedule [this should include all the agreed Communications milestone payments for the project] Sections required for detailing how communications shall 8. Energy Yield Study (Yield Assessment Report) be conducted between the Client and Contractor, including 9. Performance Ratio language and acceptable channels of communication. 10. Performance Bond Contact details for both the Client and the Contractor’s 11. Warranty Bond representatives shall be included within this section. 12. Parts of the Project to which the Structure Warranty Applicable Law applies 13. [module manufacturer] Documents Sections are required for: 14. Module Warranty Terms & Conditions • Stating the law (depends on the location of the plant) that the agreement shall be governed by. 15. Sub-contractors [this should include a list of approved sub-contractors that are allowed to • Both parties to expressly declare acceptance of all the complete work on the plant] terms and conditions contained in the EPC Contract signed by them. 16. Provisional Acceptance Test and the Final Acceptance Test [this should include the test Appendices to the EPC Contract requirements that are planned to be done on the Plant] Within the contract, reference will be made to a number 17. Form of the Work Completion Certificate, of stand-alone documents, which will form an integral and Provisional Acceptance Report and the Final fundamental part of the contract. Acceptance Report 18. Form of the Protocol These documents may include the following: 19. Form of the Completion Report 1. Site Plans [this should include all layout plans for the proposed plant] 20. Form of the Site Hand-over Protocol 2. Scope of Work APPENDIX D A Guide For Developers and Investors 195 Appendix D O&M Contract Model Heads • Plant – the power plant to which this contract refers. Details of the power plant should be contained in an of Terms annex to the contract, including the total nominal power output (MWp), details of the equipment and Definitions and Interpretation systems that form the plant. • Annual Report – the report to be provided by the • Principal – Owner of the Plant. Contractor annually during the term of the O&M • Repairs – the implementation of all works required contract. to restore the function of the Plant following damage • Availability – means the availability of the Plant to or failure. feed electricity into the grid. Subject and Purpose of the O&M Contract • Availability Contractual Penalty – the penalty imposed if the plant fails to reach its contractual • The Contract covers the technical monitoring, availability. performance monitoring, maintenance and repair of the Plant, and associated activities. • Contractor – the O&M Provider. • Access to the Plant shall be provided by the Principal • Guaranteed Average Availability – the guaranteed to the Contractor. average availability of the plant for power generation during a specified time period and conditions as • The Contractor shall be properly trained and well defined in the contract. acquainted with the Plant. • Guaranteed Response Time – is the time taken • The Contractor shall maintain the Plant in to resolve faults, and is dependent on the nature of accordance with the O&M contract, O&M the fault and its impact on the total output of the Handbook, OEM instructions, technical conditions project. set out in the Grid Connection Agreement and Power Purchase Agreement (or similar), and • Maintenance – the execution of all operations, applicable legislation. required to maintain the functioning of the Plant in accordance with the agreed maintenance schedule. • The Contractor will maintain the plant as defined in the definition and annex [x]. This will include (but • Measured Average Availability – the actual average not necessarily be limited to): generation availability of the Project. This is measured and calculated as defined in the contract. • DC Generation components (modules, cables, mounting structures) • Normal Performance – defined as performance within [5%] of the Performance Ratio as defined in • AC Generation components (inverters, cables, Appendix [x]. transformers, MV switchgear) • OEM – Original Equipment Manufacturers. For • Monitoring Systems [monitoring generation of example, the manufacturers of the modules, inverters, power, climate (irradiation, wind, temperature), mounting system, security system and medium security, video control system (CCTV)] voltage electrical systems. • Site in general (vegetation control, road and site access, security fence and gates, buildings) 196 Utility Scale Solar Power Plants APPENDIX D • The Contractor shall maximise the output of the • Condition of the generation equipment and Plant in both the short and long term by monitoring supporting structures. and rectifying disruptions, and enable the Plant to adhere to the Minimum Availability parameter. • Functional check and condition of the security systems. • The Contractor is to provide periodic reports and advise on technical issues during operation. • Visible damage and defects including functional check of safety equipment. • The Contractor shall maintain the Plant to ensure that the degradation of the Performance Ratio is • Inspection of the medium voltage components not more than [1%] per year [as defined in the (up to the grid metering point). Acceptance Test] • The Contractor shall, as a minimum, maintain Plant • The Contractor shall operate and maintain the Plant components in order to comply with their warranty such that warranties under the EPC contract are not conditions. restricted and remain enforceable. • The Contractor shall remove snow and other accretions (dust and dirt) from the modules as Tasks and Obligations of the Contractor required. Operation of the Project • The Contractor shall keep the Site free from undesirable growth of plants and shrubs, to achieve • The Contractor shall: the best possible energy yields. Green areas shall be mowed and waste materials removed. Dust shall be • Operate the Plant on behalf of the Principal, kept to a minimum to reduce soiling. Vehicles and and ensure uninterrupted operation (wherever machines will be used such that they do not damage possible) and optimal usage of the Plant, subject plant components. to the weather conditions. • The Principal shall pay the cost of electricity and • Advise the Principal on all significant issues water required for maintenance purposes (within the relating to the operation of the Project. boundaries of the Plant)—and not expressly covered by another clause within this agreement. • Make sure that the Principal has unlimited right to inspect the Plant and perform works on it. • The Contractor shall maintain the Plant so that the degradation of the Performance Ratio is not more Maintenance than [1%] per year, and shall inform the Principal if this limit is likely to be exceeded. • The Contractor shall maintain the Plant in accordance with the Maintenance Schedule • The Contractor shall perform specialised cleaning (contained as an annex to this agreement). The as required, on a site-specific basis to avoid seasonal Maintenance Schedule will show the minimum dust and dirt accumulation. maintenance required and minimum frequency for each item per annum. • All maintenance work that may affect the energy generation of the Plant, will be carried out, as far as • The Contractor shall carry out a minimum of reasonably possible, during low-irradiation periods. [two] maintenance inspections per year. This shall include the assessment of the condition of the Plant including (but not limited to) the following: A Guide For Developers and Investors 197 Monitoring of the operation / analysis of the Failure Messages and Reaction Time data / switching off of the Plant • The Contractor shall monitor the Plant in • The Contractor shall: accordance with this agreement. In the event of a malfunction occurring in one of the functions • Monitor the operation of the plant and feed- monitored, a failure message will be sent to the in capacity, without interruption, 365 days a Contractor. year, 24 hours a day. This will be done using remote data monitoring systems which will be • The Contractor is obliged to take all reasonable maintained and updated by the Contractor. measures necessary to rectify any malfunction notified by a failure message, or detected through • Set right faults that can be rectified remotely. an inspection, as soon as possible to restore the This shall be done as soon as possible and within functionality of the Plant. [1] day. All other faults shall be rectified within the Guaranteed Response Time. • The Contractor is obliged to acknowledge and react to failure messages, depending on the severity of the • Check and assess the data collected on a daily failure or malfunction, as shown below: basis, and compare the readings with the assumed targets, by referring to the following • The Contractor is obliged to acknowledge the functions and operations: failure message within [1] calendar day. • DC Component Availability. • If the failure has a low impact on the yield loss of the Plant [<5%] per calendar day, then • AC Component Availability. the Contractor will commence and conclude measures to resolve the problem within [14] • Irradiation. calendar days of having received the failure message. • Generation (kWh). • Network availability. • For other failures in the Plant, the Contractor will commence measures to remedy the • Function of the Security System. malfunction within [24] hours after having received the failure message. • Performance Ratio. • Where relevant spare equipment is available • Faults and Response Logs. on site or within the Contractor’s control, the repair will be completed within [36] • Manage and maintain the operational hours of receipt of the failure message. monitoring and data recording system in a secure and permanent manner. • Where spare equipment is not available on site or within the Contractor’s control, the • Be obliged to switch off the Plant within [1] day Principal will be informed and updated on if the operator of the Grid System requires. the repair options, progress and return to service date. The Contractor will order the • The Principal shall have unrestricted access to read spare parts within [one] business day and the remote monitoring data. carry out the repairs, if and when the parts become available, within the Guaranteed Response Time. 198 Utility Scale Solar Power Plants APPENDIX D Repair • The Contractor is responsible for repairs in order to • The Contractor gives an assurance to keep parts bring the Plant to fault-free operation. available to PV plant experts or for inspection by insurance advisors/estimators whenever an insurance • The Contractor is to correct defects that become claim is made. known through technical monitoring, and visual and functional checks. Documentation and Reporting Obligations • The Contractor is to replace damaged components, or parts that are causing disruption to the operation. The Contractor is to provide the following reports: • In cases where material and spare parts are required • Monthly reports describing the availability, day by Contractor, the amount will be paid by Principal by day production, performance ratio, irradiation without the need for prior approval, provided the measurements, faults and maintenance or repair value does not exceed [USD 1500] within a [six] activities that are conducted on the Plant. month period. • Quarterly reports describing material events • Approval in writing is to be sought from the (that occurred or are expected to occur) such as Principal for repairs (including material and spare maintenance tasks and repairs, a schedule for parts) that are expected to exceed [USD 1500] within repairs and maintenance, a stock list of spare parts a [six] month period. and consumables, and a description of availability, irradiation, Performance Ratio and downtime. • The Principal shall approve the cost of repairs within [3] business days. • Semi-annual inspection reports documenting the visual and function checks with photographic • The Contractor is to keep a spares stock of evidence of observed issues. particularly susceptible components. • Annual reports for each year of the contract period • Spare parts, tools, measurement and test equipment giving: are the responsibility of the Contractor. • A summary of repairs and maintenance tasks Materials and Lubricants completed. • The Contractor will provide under this agreement • Parts and consumables used for repairs and all consumables, small items, and lubricants (with maintenance, and total cost thereof. a value less than [x]) required for the maintenance, inspection and repairs without charge. • A summary of performance and operation: monthly availability, Performance Ratio and • The Contractor guarantees that all parts to be production. delivered and installed within the scope of this agreement will correspond to the parts being • A summary of plane of array irradiation replaced, with respect to functionality and durability. measured on Site. • The Contractor is responsible for the removal • The annual Performance Ratio and a and disposal of old parts, lubricants, packaging as comparison of production with irradiation- required by the relevant laws and regulations. corrected target values given by the energy yield prediction. • Forecast of scheduled maintenance. A Guide For Developers and Investors 199 • Reports on significant disruptions, damage or supporting documents (for instance, O&M handbook, defects. relevant permits, consents and licences). Commercial Operation • The Contractor ensures that suitably qualified, experienced and accredited personnel will be used for • The Contractor will check and verify the accounts each task. with the energy supplier and energy off-taker in accordance with the Power Purchase Agreement. Security • The Contractor shall check invoices that have been [Depending on the requirements of the Principal, the received by the Principal from third parties—in the Contractor may be made responsible for the security course of the operation, maintenance and repair of arrangements for the Plant. If so, the requirements for the Plant—for plausibility and accuracy. monitoring and maintaining the security system—and the Defect and Insurance Claims costs of providing these services—should be contained in the agreement] • The Contractor is required to inform the Principal about possible and actual defects in the Plant • Security to be provided and monitored 365 days/year for which the Principal may have Warranty for 24 hours/day. claims under the EPC Contract or under other agreements that the Principal may enter into in Warranty and Liability respect of the Plant as soon as it gains knowledge of such defects. Warranty Period • The Contractor’s own works, equipment, spare parts and materials provided should be covered by • The Contractor warrants all respective maintenance work undertaken in accordance with this agreement. warranty for a period of [2] years. Guarantee is also given for operations to remedy any • The Contractor will provide full support to the agreed failures for a period of cover of [three] years Principal in communication with insurance from the time of the work. companies for matters related to the Plant. Replacement of Parts In the event that the Contractor cannot remedy the defects or fails to redress or make good any defect as soon • The Contractor provides a three-year warranty for any as possible, the O&M contractor shall pay the Principal replacement of parts and components provided and installed under this agreement. damages to compensate the loss incurred (including loss of profit). Guaranteed Availability Carrying out the operational management in • The Contractor is to ensure that the Measured Average compliance with the applicable laws and using Availability in each generation period equals or exceeds professional personnel Guaranteed Average Availability figures in the following manner: • The Contractor should be required to ensure • Guaranteed Average Availability for each [twelve] that the Plant is operated and maintained in month Generation Period of this agreement will be compliance with the applicable laws and contract in excess of: 97% 200 Utility Scale Solar Power Plants APPENDIX D The Contractor’s right to employ sub-contractors and the Principal’s right to instruct third party • The Measured Average Availability shall be calculated contractors according to the following formula: • Measured Average Availability = Grid-connected Clauses are required to specify the entitlement of the available hours / possible available hours * 100%. Contractor to use competent third parties to fulfil obligations arising from this O&M Contract. The Contractor should be • Grid-connected available hours are the number fully responsible for the action of sub-contractors. of hours that the inverters are connected to the grid and available for export of power. In effect, it also means the number of daylight Often, the Principal has the right to refuse the use of third hours (which are to be defined) during which parties. However, this should be expressly covered in this the Plant is able to convert irradiation into agreement. energy. Importantly, availability outside daylight generation hours is not to count towards the grid Obligations of the Principal connected availability hours. • Possible available hours need to be defined These will include: (taking leap years into account). It should exclude hours allowed due to a) defined periods • The creation and upholding of the legal of planned maintenance (e.g. [x] hours per year pre-requisites for the operation of the Plant in winter months, [x] hours per year in summer months) and b) hours when the Plant was not • The provision of documents and information available as a result of Force Majeure events. necessary for the operational management of the Plant and fulfilment of the Contractor’s obligations. • If the Measured Average Availability for a generation period is less than the relevant Guaranteed Average • Granting rights of access to the Plant, grounds Availability for a generation period, the Contractor and buildings inside the Site (as required for the shall pay an Availability Contractual Penalty [rate of execution of this agreement) at all times. penalty and calculation to be agreed]. Remuneration Liability The cost and remuneration of the O&M contract will be It is important to specify the equations for calculation of broken down into: the liability due to low availability and the maximum cap on liability besides outlining the method and timing for the • Fixed Remuneration Contractor to reimburse the Principal. These reimbursements • Paid by the Principal based on an annual may take the form of financial payments to compensate for fixed lump sum per kWp of installed nominal the generation losses, or reductions in the remuneration to the capacity (as defined in the EPC contract). Contractor (under the O&M agreement) in the subsequent • Reimbursement of expenditure and remuneration for term. other services not included in the fixed remuneration, and invoiced separately at agreed prices: • Liability should be limited to the loss of earnings of the Principal, taking into account any payments that • Spare parts and components that are approved are made by the insurance cover or other warranties in advance by the Principal and are required for on the Plant. maintenance and repair. This will not include A Guide For Developers and Investors 201 Legal, Governing Law and Jurisdiction parts that are subject to warranty claims, or The contract should have sections covering: minor repairs of value less than [x]. • Governing law and court of jurisdiction of the • Services and ancillary costs that are approved in agreement. The governing law is normally the law of advance by the Principal and are required for the country in which the Plant is located. maintenance and repair. This will not include services that are due to parts that are subject to • A legal succession or a transfer of rights condition is warranty claims, or minor repairs of value less required to reserve the Principal’s right to assign the than [x] that are to be corrected during semi- O&M contract to a third party. annual inspections. • Non-disclosure agreement. This agreement between • Agreement is to be made on the invoicing dates/ the Contractor and the Developer will outline what frequency and payment terms for the Principal. is to be considered confidential and what information may be disclosed to third parties. • Agreement is to be made on the indexation of the remuneration over the term of the agreement. Often • Contractual language. Defining the language that this is linked to a consumer price index, power the official legal contract and agreement would be purchase or tariff increase or inflation index. drafted in. Exclusions and work outside the agreement Agreement on the language for delivery of reports, documentation and accounts, and the version for the • Exclusions to the availability guarantee and agreed legal copy. remuneration, including maintenance or repair work that are caused by: Insurance • “Acts of God” The contract should also have a section outlining the • Extreme weather effects insurance responsibilities of the Contractor for the operations • Improper influence of the Principal and maintenance activities. This insurance should cover damage to the plant as well as provide cover for employees • Third parties not attributable to the Contractor on the Plant conducting the maintenance. • Work covering these exclusions will be decided upon It is also normal for the Contractor to arrange and pay between the Principal and Contractor at the rates for insurance for the full site. The agreement should contain full additional work agreed in this agreement. details and remuneration requirements, while the annex to the • Work outside the agreement including repair work contract should include the insurance documentation. undertaken within the scope of the insurance policy. In this case, the Contractor will carry out work as agreed with the insurance company and Principal. Costs will be agreed within the insurance terms and additional costs agreed with the Principal. 202 Utility Scale Solar Power Plants APPENDIX D Duration and Termination of Agreement Appendices to the O&M Contract Sections covering: Within the contract, reference will be made to a number of stand-alone documents, which will form an integral and • Commencement of the agreement fundamental part of the contract. • Standard Duration of the agreement. [This is often for a 5-10 year period.] These documents may include the following: • Extension of the agreement (at the option of the 1. Description of the Plant Principal) 2. Schedule of Maintenance • Renegotiation of the terms of the agreement following the expiration of the EPC Warranty. [After 3. Insurance Cover the expiration of the EPC warranty, the Contractor or the Principal may choose to renegotiate the terms 4. Sample Test Report [This should include all the tests of pricing, provision of O&M or support services, that are planned to be done on the Plant.] based on the past performance of the plant and the 5. Draft Annual Report [This should detail the outline existing O&M agreement. The O&M contract is of the report that will be issued on a yearly basis.] terminated if concurrence cannot be reached on the renegotiation of terms.] 6. Price list [This should contain staff charge out and expense rates, the agreed rates for any components • Termination of this agreement may also happen and/or the mark up and transportation costs for due to: the items.] • Financial arrears. 7. Technical Connection Conditions [This will include • Insolvency. all technical conditions imposed upon the Plant, including any imposed by the grid operator.] • “Good cause” relating to statutory law, failure to comply with the requirements contained in 8. Draft O&M Handbook this agreement, or environmental, planning or 9. Form of O&M Handover Protocol [This should be a legal breaches. form detailing the agreed handover procedure.] Communication 10. Energy Yield Analysis [This will be a copy of the energy yield study that should have been completed A section is also required to describe the pre-conditions by an independent company and accepted by for maintaining efficient and acceptable channels of both parties.] communication between the Contractor and the Principal. There should also be details of the representatives of the Principal and Contractor. A Guide For Developers and Investors 203 Acknowledgements: Alexios Pantelias, Hemant Mandal, Patrick Avato, Matt Willis, Anjali Garg, Naomi Bruck Contact Information Maruti Suzuki Building 3rd Floor, I Nelson Mandela Road, Vasant Kunj, New Delhi - 110070 India T: +91 11 4111-1000 F: +91 11 4111-1001 www.ifc.org 2011