Solarletter #6_EN - IRA boosts the manufacturing capacity of the United States in renewables
Also: Hybridization of renewable energy parks is gaining momentum in Spain, EiDF experiences a stock market collapse following irregularities in its accounts and Price of photovoltaic modules continue
Please note that text below has been translated from the spanish version by using AI
Hello everyone and welcome back to Solarletter. My name is Imanol Matanza, and I aim to share with you the latest news, technological advancements, and trends in the field of photovoltaic energy. Through Solarletter, I hope to provide you with valuable information, market analysis, state-of-the-art updates, and practical tips that will help you stay informed about the latest developments in the photovoltaic industry.
I am always open to suggestions, questions, and comments, so please feel free to contact me. If you like it, don't hesitate to subscribe and share!
After a relaxing (and much-needed) vacation in the Mediterranean, and with a bit more of a sun-kissed glow, a new edition of Solarletter is back. Sunshine is undoubtedly beneficial for both health and, for some of you, your wallets too! :D
Now, let's go with the news for this week!
IRA boosts the manufacturing capacity of the United States in renewables
Through a post by Alejandro Diego Rosell, I became aware of a study funded by the "BlueGreen Alliance" and published in the United States. The study explains the consequences of the "Inflation Reduction Act" (IRA) in the country. For those of you who have not heard of it, this law aims to enhance the economic competitiveness and industrial productivity of the nation. Most notably, around 85% of the budget is allocated to energy security and the fight against climate change.
The report reveals that the manufacturing capacity of the United States is growing, and this is because it is starting to be cheaper to produce domestically than to import.
In summary, I could highlight the following key points from the study:
Reduction in Renewable Energy Costs: The law extends tax credits for clean energy production. This makes large-scale solar and wind projects much cheaper to build and operate, enabling renewable energy to be viable in more parts of the United States.
Tax Credits and Labor Costs: The additional costs of complying with labor requirements for tax credits are likely to be offset by higher tax credit rates. Projects that meet these requirements could be up to 60% cheaper than those that do not.
Boost for Domestic Manufacturing: With new tax credits, producing solar components within the United States becomes cheaper than importing them, benefiting the entire supply chain. This could increase demand for production and jobs in the United States.
Job Creation: The IRA could lead to the creation of approximately 1.3 million new jobs in large-scale solar energy sectors and 250,000 jobs in wind energy-related sectors by 2035. This includes jobs in both manufacturing and construction.
Higher Wages: Workers in the solar and wind sectors could see higher wages due to increased demand. Potentially, wages could increase by $70 billion for solar workers and $15 billion for wind workers by 2035.
Demand for Materials: The growth of renewable energy projects under the IRA will likely require much more aluminum, cement, and steel. These materials are crucial for building renewable energy infrastructure.
As Alejandro wonders:
“What can we in Europe learn from the American IRA? Will we be able to compete by manufacturing solar panels or wind turbines?”
This study highlights the potential benefits of policy measures that support renewable energy and domestic manufacturing, which can be valuable lessons for other regions striving to achieve similar goals.
_
Hybridization of renewable energy parks is gaining momentum in Spain
Another piece of news that caught my attention is one from the newspaper La Información, by Antonio Martos Villar. This news could easily fit into Sergio Fernández's Windletter, which, in case you are not familiar with it, I invite you to check out as he is back from vacation 😉. In the article, Antonio discusses how certain companies that own wind farms are trying to hybridize their parks by adding photovoltaic (PV) elements to them.
This idea makes a lot of sense, given the challenges associated with obtaining grid connection points and conducting environmental impact assessments. Hybridizing wind and PV increases the capacity factor of the park, which means that the injected energy will be closer to its theoretical potential if the park operated at maximum capacity all the time.
Additionally, cost savings are realized by sharing medium and high-voltage infrastructure. This includes cables, transformation centers, trenches, leasing permits, and more. It would indeed be interesting to see some financial studies of these hybrid parks and see how big those savings are.
Antonio also provides examples of future hybridizations in Spain:
Iberdrola plans to add 41 MWp and 33 MWp to the Ballestas and Casetona wind complexes of 69 MW in Burgos. They are also looking to develop around ten more projects, both in existing projects and new developments.
Endesa (Enel Green Power España) will build seven hybrid renewable projects at the Teruel thermal power plant (Andorra) in Aragon, totaling over 1,800 MW. These projects will include battery storage and an electrolyzer for green hydrogen generation.
Endesa (Portugal) will combine a 365 MWp PV installation with 264 MW of wind energy and 168 MW of battery storage in the Abrantes Region.
Endesa will install 43 MWp of floating PV, 48 MW of wind energy, and 49 MW of battery storage at the Alto do Rabagão reservoir.
Naturgy announced the acquisition of 422 MW of operating wind capacity in Spain and another portfolio of 435 MW of PV-wind hybridization projects in an "advanced state of development."
EDP Renovables has received authorization to operate a hybrid project in Spain.
Acciona Energía has the largest portfolio, with 2.3 GW of hybridization projects in the pipeline, either in the process of environmental approval or with the grid connection point secured.
One thing is clear: the park will never be able to evacuate more power than it has been granted (I wonder how the SCADA or monitoring system will work in a park of this kind). Furthermore, if storage becomes more common in these technologies separately, hybrid parks are likely to offer compelling advantages, allowing both technologies to be maximized to their fullest potential.
_
EiDF experiences a stock market collapse following irregularities in its accounts
El Confidencial reports that EiDF has experienced a 70% stock market collapse, leading it to return to the BME Growth (the Spanish stock market oriented towards expanding medium sized companies). The collapse has driven its stock price down to €8.93, a significant drop from the €29.76 at which it once traded.
This comes in the wake of doubts raised after PwC refused to sign off on its audited accounts initially, and Deloitte later raised concerns about serious accounting deficiencies within the company.
In Deloitte's report, there is evidence of potential document falsification by EiDF in some of its activities and transactions with third parties, where some documents had been created, modified, or falsified.
Additionally, as noted by Carlos Rodríguez, the auditor pointed out that "there is evidence of possible forgery of contracts and documents prepared by the company's management to justify the lack of control over the SPVs."
The Spanish stock market regulator warned the company to make the study's findings public without any interpretation, or else it would have published the full content of the executive summary itself.
_
Price of photovoltaic modules continues to decline
As has become customary in the recent editions of Solarletter, I reserve the last piece of news for photovoltaic modules. Just as in Solarletter #5_EN, where the top 20 manufacturers in the first half of 2023 were showcased, this time, it is about the price drop of photovoltaic modules as reported by PV Magazine (I am sorry, but the new is in german).
For five consecutive months, module prices have been decreasing at an average monthly rate of 6%, accumulating a total drop of 25% in all technologies so far this year. Despite the gradual stabilization of raw material costs in China, prices continue to fall due to high inventory levels.
This has led manufacturers and wholesalers to offer discounts to get rid of excess stock. Some customers are trying to cancel supply contracts or orders, which could entail penalties. While a reduction in supplies from Asia could help ease the situation, uncertainty remains about how long it will take to balance supply and demand in the solar panel market.
The market situation is expected to continue, and although a potential improvement could come from increased European and Chinese demand in the coming months, the current excess inventory, particularly of PERC technology modules, creates uncertainty about how long it will take to return to price stability. As a result, more price reductions are anticipated in the short term.
_
Edition´s microtip
After delving into the first two pieces of news for quite some time, I will try to keep this edition's tip a bit shorter. By this point, your coffee has probably run out, and you might be contemplating whether to go for a second cup...
In the previous edition, Solarletter #5_EN, we discussed DC connectors. This time, I would like to talk about AC connectors. I have come across connections made between copper and aluminum that have corroded due to galvanic corrosion. What might initially seem like a proper connection can deteriorate due to moisture and the galvanic potential difference between these metals, leading to rust. This worsens the electrical connection between the components and can create future hot spots.
That is why, for these specific cases, it is essential to use bimetallic aluminum/copper connectors. If you want to delve deeper, here is a link from Klauke.
That concludes the edition. I hope you enjoyed and it made your coffee break, public transportation ride, or nap more enjoyable. If you have any suggestions, recommendations, or comments, feel free to reply to this email.
If you liked it, help me give it a boost by sharing it on your social media, with your friends, or coworkers. And if you did not like it, I apologize, but returns are not accepted.
Sunny Regards!