Presentation on theme: "First Solar FuelSmart™: Powering Energy Security"— Presentation transcript:
1 First Solar FuelSmart™: Powering Energy Security Dr Raed Bkayrat, VP Business Development, Saudi ArabiaFirst Solar began as a high-tech startup with a disruptive solar technology ideally suited for utility-scale power plants in hot, sunny environments and with unprecedented low costsThrough determined innovation, we have since become the world leader in photovoltaic solar energy
2 First Solar at a GlanceOver 8GW installed worldwide and over 3GW contracted pipelineStrongest Financial Stability & Bankability in the industryFacilitated approx. $9B USD worth of project financingDriving innovation across entire value chain and plant solutionCost competitive with conventional energy sources todayFounded in 1999 and publicly traded on Nasdaq (FSLR)First Solar is a proven solar company with over 8GW installed worldwide and over 5GW of sales opportunities in our pipeline, with over 3GW under contract todayMany people do not understand how dramatically solar costs have reduced over the years. First Solar provides solar energy that is cost competitive with conventional energy sources todayWith our proven track record and wide range of PV energy solutions, we are the partner of choice for leading utilities and global power buyersWe drive innovation to improve every facet of the solar value chain and power plant solutionFirst Solar is the most bankable solar company in the world. We have the strongest balance sheet and cash position in the industry and unparalleled use of our technology in debt financed projects around the worldWe were founded in 1999 and are publicly traded on the NASDAQ stock exchange under the ticker symbol FSLR
3 TOPAZ SOLAR FARM Largest investment grade renewable bond in history site: San Luis Obispo, USAsize: 550MWowners: MidAmerican Energy Holdings CompanyLargest investment grade renewable bond in historyTopaz is one of two 550MW power plants we are currently constructing in California(550MW is roughly the nameplate capacity of a coal-fired power plant)Topaz represents the largest renewable bond in history and the first to be rated investment grade from all three credit rating agenciesFirst Solar engineered and is constructing the plant and will operate and maintain it for MidAmerican, a Berkshire Hathaway company
4 The First Solar Advantage Other PV Providers’ Model=More Cost & More RiskFirst Solar’s Model=More Value & Less RiskPV energy solutions with superior value and less riskOther PV providers rely on unaligned and fragmented approaches to the delivery of PV power plants, which simply cannot maximize value or minimize riskThere is obvious margin stacking, bankability and financial credibility issues, lack of integration between companies to optimize power plant performance, and overall reliability concernsWho is going to stand behind the performance of the entire plant several years after installation?What happens if one of the technology companies goes bankrupt and there is a warranty issue?The best solution provider is the one who has demonstrated leadership in all aspects of solar and accepts responsibility for the entire plant solutionAs you are about to see, First Solar maximizes value and minimizes risk with our expertise across the entire solar value chain, which results in more reliable, dependable, and cost effective PV energy solutions for our customers and partners
6 Solar is Less Expensive than Diesel PV electricity prices have reduced over 50%Diesel prices remain highly volatile and have steadily increasedSmall PV System Median Installed Price 2003–2012WTI Crude Oil Prices 2003–2013PV prices have reduced by over 50% in the last few years.Meanwhile, oil prices have steadily increased and remain highly volatile.Our hybrid system solutions are designed to capitalize on the value of solar, reducing operational expenses and hedging against rising fuel prices while maintaining reliable operations.Sources: Diesel Pricing US Energy Information Administration; Solar Pricing: DOE, Lawrence Berkley National Laboratory
7 Solar is Cost Competitive with Conventional Energy Sources Today Gas Combined CyclebbcWe deliver solar energy that is cost competitive with conventional energy sources today.We currently provide a LCOE of between $.07-$.15/kWh, depending on the region and other factors. On the screen you can see the LCOE of a wide range of conventional generation sources, including coal, nuclear, natural gas, and diesel.As you can see, our current energy costs are competitive with a wide range of conventional generation sources… And compared with peaking generation sources, LNG, and diesel… our cost competitiveness is substantial.Solar energy has a meaningful value proposition for anyone burning liquid fuel as their primary energy source. With fixed pricing and extremely low operating costs, our hybrid solutions reduce the risk of fuel price volatility while providing reliable and cost competitive solar electricity.Note: LCOE is a holistic view of the total cost of ownership over the plant’s life and includes factors such as development, financing, and maintenance costs. LCOE varies greatly depending on irradiance levels, interest rates, and development costsSources: Coal and Nuclear: Bloomberg New Energy Finance LCOE Update: Q2 2013; Gas Combined Cycle, Gas Peaking, and Diesel: Lazard LCOE Sensitivity Analysis June 2013; First Solar: Internal data.(a) Does not include cost of carbon capture. (b) NG = natural gas. LNG = liquefied natural gas. Data assumes natural gas prices of $10 in Northern Europe and $18 in Japan (all in US$ per MMBTU). (c) Assumes diesel prices of $3.00 for India, $4.30 for Australia, and $7.00 for Northern Europe (all in US$ per gallon). Diesel assumes a high end capacity factor of 30% representing intermittent utilization and low end capacity factor of 95% representing base load utilization, O&M cost of $15 per KW/year, heat rate of 10,000 BTU/KWh and total capital costs of $500-$800 per KW of capacity.
8 PV is Highly Compatible with High Ambient Temperatures Thermal energy output decreases when PV energy output increasesIt is commonly known that most open cycle gas turbines and reciprocating engines de-rate, or decrease their power output as temperature increases.PV is highly compatible with thermal engines in this regard.As temperatures rise throughout the day and thermal energy output decreases, PV energy output increases.
9 Solution: The PV Hybrid Low Speed EngineMid Speed EnginePV Hybrid Systems combine PV solar generation with a fossil fuel engine generator to reduce fuel consumption and save costs.Combustion TurbineHigh Speed EnginePV Hybrid systems combine PV solar generation with a fossil fuel engine generator to reduce fuel consumption and save costs.PV Hybrid Systems are compatible with any thermal engine technology.However, since lower efficiency machines result in higher fuel costs, maximum economic benefits are achieved with high to medium speed open circuit gas turbines and reciprocating engines.Compatible with any thermal engine technology
10 First Solar FuelSmart™ Hybrid Systems Operate as a secondary power sourceWill not replace existing thermal infrastructure/fleetAre commercially viable due to operational fuel savings aloneThink of solar as a source of fuel, not just additional capacity.Our FuelSmart™ Hybrid Systems operate as a secondary power source to your existing thermal infrastructure or greenfield project.The hybrid system will not replace your existing thermal fleet.With fixed pricing, solar hedges against rising fuel costs and reduces the risk of fuel price volatility while reducing your operational expenses.We think of solar as a source of fuel, not just additional capacity.This is a pure economic decision based on solar energy’s commercial viability due to fuel savings alone.
11 First Solar FuelSmart™ Benefits EconomicOperationalEnvironmentalCombining PV with thermal generation provides significant economic, operational, and environmental benefits.
12 First Solar FuelSmart™ Benefits Reduces fuel consumptionSaves fuel costsMitigates fuel price volatility riskPV is highly scalable and repeatableAllows for phased implementationReduces technical and financial riskEconomicOperationalEnvironmentalThe pure economic benefits associated with First Solar’s PV hybrid system include:Reducing fuel consumption:Saving fuel costsMitigating the risk associated with fuel price volatilityPV is highly scalability and repeatable:Allowing for phased implementationAnd reducing technical and financial project risks
13 First Solar FuelSmart™ Benefits Reduces fuel consumptionReduces imports and increases energy independenceReduces fuel transportation and logisticsReduces thermal plant operation timeExtends asset lifeIncreases redundancyReduces O&MEconomicOperationalEnvironmentalFrom an operational perspective, First Solar’s hybrid system enables you to:Reduce fuel consumptionReducing fuel imports and increasing energy independenceAlso reducing fuel transportation and logisticsThis will also reduce the thermal plant operation timeWhich will extend your thermal asset lifeIncrease redundancy (especially during peak loads occurring in the middle of the day)And reduce O&M
14 First Solar FuelSmart™ Benefits Increases potential revenue via trading creditsReduces CO2 emissions and noiseContributes to positive community and PR potentialAids in overcoming regulatory boundaries for additional capacity for brownfield expansionEconomicOperationalEnvironmentalFrom an environmental perspective, First Solar’s hybrid system provides the following benefits:Additional revenue potential via trading creditsReduces CO2 emissions and noiseReduces exposure to increased air quality and sound regulationsPositive community contribution and PR potentialBrownfield expansion aids in overcoming regulatory boundaries for additional capacity
16 How It Works – Typical Day Let’s take a look at a typical day for a thermal fleet with 3 engine generators utilizing First Solar’s PV Hybrid SystemLet’s assume that without the hybrid system 2 of the generators run at about 75% and the third at 50%The PV production will generate a profile that looks like a bell curve which you can see along with load profile for this exampleWhen our hybrid system is not generating electricity (such as at night) the thermal plant (which is the primary power source) will behave exactly as it did before the hybrid system was installed.When solar energy production begins, the energy requirements of the thermal plant will be reduced, saving fuel and money.To the primary power source, this looks just like a reduction in load.
17 How It Works – Typical Day As you can see on the far right, we have a load of 125kWThere are 3 diesel generators; only one is producing power to achieve the 125kWSince it is night time, the PV plant is not producing power
18 How It Works – Typical Day In the morning, the load has increased to 1,000 kWThe PV plant has started to produce 250 kW2 diesel generators are each producing 375kW to achieve the 1,000 kW load efficiently
19 How It Works – Typical Day In the late morning we still have a 1,000 kW loadThe PV plant is producing 700kWBoth diesel gensets have reduced to 150kW to balance the load
20 How It Works – Typical Day With 2 gensets only producing 150 kW each, an alert is triggeredThe lead controller switches to only 1 genset running at 300 kW to be more efficientThis puts too much emphasis on the PV (i.e. insufficient spinning reserves in case of unplanned PV curtailment/clouds) so the PV set point is lowered
21 How It Works – Typical Day With the reduced set point, PV is producing 525 kWThe diesel genset now ramps to 475 kW to fill the remaining load1 diesel genset provides insufficient spinning reserveThus, lead control system engages 2nd diesel genset to ramp
22 How It Works – Typical Day We still have a 1,000 kW loadThe PV plant is producing 525 kW of solarThe diesel gensets are running at 238 and 237 kW
23 How It Works – Typical Day The cloud passes and the PV plant resumes output of 525 kWThe diesel gensets decrease output and spin at 238 and 237 kW
24 How It Works – Typical Day At the end of the day the load is still at 1,000 kWThe PV plant has reduced to 150 kWAll three gensets increase output and are spinning at 350 kW each
25 How It Works – Typical Day At night, the max load is 1250 kWThe sun has set and the PV plant is not producing any powerAll 3 gensets increase their output to 412, 412, and 426 kWThe gensets behave just as they did without the PV system with no impact on reliability
26 Key TakeawaysSolar is cheaper than diesel. With fixed pricing and no fuel- price volatility, solar represents a meaningful value proposition for anyone burning liquid fuel as their primary energy source.Think of solar as a source of fuel, not just additional generation capacity. PV hybrid systems are designed to operate as a secondary power source to reduce fuel consumption and are not intended to replace the existing thermal infrastructure.First Solar’s FuelSmart™ solutions effectively combine photovoltaic (PV) solar generation with a fossil fuel engine generator to reduce fuel consumption and save costs.PV is cost competitive with conventional energy sources today, and provides significant cost savings compared to diesel generation.Hybrid systems, which combine PV with fossil fuel generation such as diesel, provide significant fuel and cost savings for anyone burning liquid fuel as their primary energy source.With expertise in grid integration for utility-scale PV systems, we can integrate the right PV control system with the master diesel control system to provide maximize fuel savings while maintaining system reliability – which is crucial to dependable operations.