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Analysis

Utility-Scale Tech Can Take Solar From Big to Massive

By Cas Biekmann | Wed, 04/06/2022 - 10:50

Utility-scale projects are growing increasingly bigger. In fact, CFE’s flagship 1GW Puerto Peñasco solar project is big enough to break into the current global Top 5 in terms of size. Tech advances and sound economics are making solar’s upsizing possible, though some question the approach of building such massive power plants.

For countries blessed with plenty of sunshine, utility-scale photovoltaic solar development is increasingly becoming the go-to option. Part of the technology’s appeal is its relatively simple scalability. A solar system can consist of as little as one module or can feature millions of them. That is why it is important to offer a sense of scale when discussing solar projects. According to the US Energy Information Administration, any project over 1MW is considered utility-scale and anything below is distributed generation (DG). Though the figure seems small, a 1MW solar project will feature thousands of modules across more than 1ha of space. In Mexico, the industry considers anything below 0.5MW DG, although this is more related to the regulation cap than anything else.

The “anything above 1MW” gives utility-scale solar a rather confusing scope. Around 10 years ago, a 50MW solar plant would be considered very large. In 2022, developers would consider such a project medium-sized at best. In Mexico, Acciona and Tuto Power’s 405MW Puerto Libertad power plant, along with Fotowatio’s 341MW San Luis Potosi power plant are among the largest in Latin America. It is important to distinguish between solar power plant or solar park, which can feature several power plants. The largest park in Latin America can be found in Mexico, too, in the form of the 828MW Villanueva project in the south of Coahuila, developed by Italian international Enel. The park takes up over 2,400ha of space and required a US$650 million investment.

The possibility to beat the size of these private industry-driven developments has greatly diminished due to the widespread uncertainty dominating Mexico’s energy sector. Nevertheless, Mexico’s government has already begun a project that would become Latin America’s new largest solar park: Puerto Peñasco, with a mammoth 1GW capacity, backed up by an integrated 100MW of battery storage. Such capacity does not come cheap, though. “The investment of US$1.6 billion in Puerto Peñasco contributed to Mexico having the most important solar power plant in Latin America and the seventh globally. The investment shows our commitment to integrate more renewable energy sources,” says Manuel Rodríguez, President of the Energy Commission of the Chamber of Deputies. By interconnecting the project with Baja California, the project will be a core component outside of its location in Sonora too. CFV Puerto Peñasco Phase 1 will have a capacity of 420MW, developed in a first stage of 120MW and a second of 300MW.

 

Technology Enables Expansion

Several components allow utility-scale solar projects to grow in size while decreasing the levelized cost of energy at the same time. Inverters, tracking and racking solutions all play an important role but solar modules are the most important. “Solar modules represent the biggest investment within a system, more than half of it. Therefore, they attract the highest amount of investment for improvements,” says Ernesto Najera, Business Development Director for Latin America at K2 Systems. Innovation in this area moves fast: “Panels change every few months in capacity, size and weight,” Najera adds. As module technology continues to improve, costs keep decreasing, excepting recent supply chain hiccups.

Research from DNV GL acknowledges that technology has allowed utility-scale solar costs to drop so much that companies looking to forecast prices have had a difficult time keeping up with the latest developments. “At DNV, we estimate system cost will continue to decline by another 50 percent, resulting in installed capacity costs for utility scale PV of between US$0.42 and US$0.58/W, depending on the region, by 2050,” the company estimates, adding that storage and grid integration technology further increase the value of solar power assets.

In terms of technology, companies offering bifacial modules maintain their promise of a higher energy yield compared to monofacial modules. Whether the higher cost of entry for bifacial modules pays off depends on a solar project’s specific characteristics. No matter if panels are mono- or bifacial, their output is increasing. “We were among the first to increase the output of silicon solar cell technologies. Only a few companies are switching to the 655-665W modules,” Armando Muñoz, Commercial Director for Mexico, Central America and the Andean Region at Canadian Solar says. Improvements can come from the type of cell size used. Depending on the company, a 210mm or 182mm layout is used. More and more, companies are looking toward the larger 210mm cells: “We now base our monofacial and bifacial modules on 210mm cells,” Muñoz  says. Previously, Canadian Solar had focused solely on 182mm. “Another innovation comes from silicon-based heterojunction solar cells (Si-HJT), which can help modules reach record levels of efficiency. This is expected to arrive in the market in late 2022,” Muñoz concludes.

 

Is Bigger Better?

Perhaps the real question is whether utility-scale solar should be Mexico’s bet for the future in the first place. Some rightfully question the merits of solar superprojects, which take up massive amounts of space and might not even be that efficient in terms of transmission. “It makes little sense to produce power in one area if you need to transmit it over vast distances and lose a great deal of energy in the process. Utility scale might be a business with vast quantities of money involved but if transmission is a problem, then it makes more sense to produce power via DG,” says Vladimir Ruiz, SE Director for Mexico and Central America at Fronius.

Even though Ruiz speaks for a company that focuses on DG, many leading independent analysts share his view, although DNV GL is not among them. “Although other commentators emphasize the role of distributed generation over large centralized installations, we do not share that view. We foresee utility-scale PV dominating electricity generation because of its favorable economies of scale, outweighing the savings in transmission costs brought by decentralized microgrid installations,” the company states. There is a caveat: DNV sees this viability of ever-larger projects because of dropping module costs. If supply chain issues continue to plague solar projects over the long term, this outlook could very well change.

The data used in this article was sourced from:  
DNV GL, MBN
Cas Biekmann Cas Biekmann Journalist and Industry Analyst