An incomplete picture of resource variability results in poor quantification of risk with negative impacts on project finance. Indeed, in some countries, energy generated from solar is on course for grid parity – that is, able to compete, in some cases un-subsidized, with traditional sources of energy.
During the due diligence process, financiers and developers will debate the levels of solar irradiance at the project site in order to gauge the potential power output and peak delivery. But typically what they are debating is the long-term average resource availability at the site. The variation of the resource from year to year is implicitly understood, but often never quantified, leading to difficulties when actual generation in any one year needs to be compared to expected long-term average generation.
Most often the solar irradiance information used to set expectations is based solely on one year’s worth of modeled TMY. Yet, weather rarely follows “typical” behavior and given increasingly erratic weather patterns, the actual conditions during any one year at a particular site generally varies significantly from the single “normalized” year’s worth of data provided by a TMY file.
It’s fairly obvious that returns are governed by the amount of power generated and subsequently sold to the grid offset by the costs of operations and the cost of capital. Investors will have a projection of these sales based on energy assessments from the TMY data bounded by a statistical distribution and so have a rough idea of the return to the portfolio.
Except that, by screening out the natural inter-annual variability, investors and developers don’t actually give themselves a realistic idea of what the variability of their annual returns will be over the lifetime of the project. They understand only the average conditions represented by the TMY and the worst-case scenario represented in the P95 distribution.
Industry wide figures suggest that a 5% negative anomaly in solar irradiation during only the summer months for a CSP or PV site can translate to a 1-1.5% decrease in annual revenue for a solar developer or operator, highlighting a clear industry requirement to take a more comprehensive approach to gathering long-term weather data.
A better understanding of average irradiance, variability and risk is, in short, why Vaisala compiled 15+ year records of solar irradiance across the globe to help consult clients on solar assessment and forecasting issues. The Summer Solar Performance Map of the United States, developed for the past five years, analyzes solar irradiance variability during the three-month period when peak production is commonly expected.
No comments:
Post a Comment