The role of Solar Photovoltaic in Renewables

1. The role of Solar Photovoltaic in Renewables Special General Meeting - SESSA 03 November 2011

2. Table of Contents • Background • Global trends • Technology and applications • Eskom’s initiatives • Future Outlook

3. South Africa’s Heritage South Africa receives more than 2 500 hours of sunshine per year with average solar radiation levels that range between 4.5 and 6.5 kWh/m2 daily.

4. Very high solar irradiation in South Africa excellent for Solar Technologies Average for Germany ... as compared to Germany, where residential grid parity will be reached soon Solar irradiation in South Africa ... Yearly total of global irradiation on horizontal surface Average for South Africa SOURCE: Joint Research Center of the European Commission; PVGIS; BCG analysis

5. IRP • Solar PV 9.4% of total capacity, (8 400 MW) is now included. • More renewables due to their increasing competitiveness. • An independent study on solar PV suggests that before 2015 the levelised cost of PV installation (without storage) would be the same, if not cheaper, than residential prices (especially at municipal retail tariff. This suggest that distributed generation should be seriously considered in future iterations of IRP with research into technology options for distributed generation and impact on networks, pricing and residual demand. Source IRP 2010

6. Worldwide PV market more than sextupled since 2007 Source : Boston Consulting Group

7. Key driver of PV is currently still policy regulation Source: Boston Consulting Group

8. But residential grid party will stabilize future with… Source: Boston Consulting Group

9. Solar Power

10. Solar Power

11. Global Solar PV growth

12. Global Trends • 371 MW of solar power will be installed on military housing across the US under the Solar Strong project, backed by a $344m partial loan guarantee from the US DoE. • Solar City has indicated that the project could generate as much as $1bn and 750 construction jobs, for which the company aims to hire veterans and militarymembers. • This is the largest domestic residential domestic residential rooftop solar project in history. Military homes to get 371 MW of PV rooftops

13. Sovereign debt crisis puts PV under the cloud • Recent changes to Italy’s feed in tariff (FIT) and • its worsening sovereign debt crisis are casting • dark clouds over its PV market, which was the • world’s second – largest last year. • Many analyst expect Italy to outpace Germany • this year to briefly become the world’s biggest • PV market but investors caution otherwise. • The new FIT is aimed at discouraging large ground large mounted projects coupled with darkening financial situation, is poising a knock on utility scale PV segment. • There is a move by government to tailor the new FIT to benefit rooftop system at the expense of ground mounted panels and this is being mirrored across Europe. Source: Rechargenews September 2011

14. Technology and applications • Crystalline silicon is more matured and has proven itself over the decades. • In future there will be increasing reliance on thin films, which can now be manufactured more cost effectively. • Cost curve decline continues with China leading the way.

15. PV Technologies Crystalline silicon Thin-film PV Concentrating PV 1 Nanotechnology approaches 2 3 4 • PV cells based on crystalline Si-wafers (c-Si) • Monocrystalline • Poly-/multicrystalline • (Ribbons) • Mature technology • Rooftop and solar farms are common applications • Remains attractive due to high efficiency • Thin film on glass or flexible substrates • Amorphous and micromor-phous silicon (a-Si, µ-Si) • CIS2/CIGS3 • CdTe4 • (HIT5) • Maturing, commercial plants running • Competition among thin- film technologies still open • Highly efficient PV cells with light focusing optics • Low-concentration PV (2–10 suns) • Medium-concentration PV (10–100 suns) • High-concentration PV (200–1,000 suns) • Maturing technology still at development stage, commercial applications developing • New technologies with future potential • Organic polymers • Dye-sensitized (Graetzel cells) • Quantum dots • Niche technologies such as Nanotechnologywhen commercialized will bring costs down by 2 to 3x current costs. Market share ~ 80% ~ 20% Mainly R&D, some demonstration < 1% 1. Up to 40.7% conversion efficiency (triple junction solar cell) 2. Copper indium diselenide 3. Copper indium gallium diselenide 4. Cadmium telluride (poisonous) 5. Hetejunction with intrinsic thin film: hybrid wafer (monocrystalline wafer coated with amorphous silicon thin film) Source: Expert interviews; company information; broker reports; BCG

16. Off grid applications • Off grid usage is suitable for markets with unreliable power supplies and or lack of Tx & Dx infrastructure. • There is a great opportunity for PV solar in rural development in Africa especially areas there is no electricity at all. • To ensure that electricity is available whenever it is required, even during periods with insufficient solar radiation, it is advisable to integrate a storage module as part of total PV solar system. • A long term, convenient and cost effective version of an off grid electricity supply, is combining photovoltaic systems with wind farms and/or kinetic hydro power plants and/or electricity generators powered by diesel.

17. PV Aspirations • Eskom has the aspiration to implement PV at a large scale. In line with this aspiration Eskom is also evaluating the use of concentrated photovoltaic (CPV) technology. This particular PV technology uses optics such as lenses to concentrate a large amount of sunlight onto a small area of solar photovoltaic materials to generate electricity. Unlike traditional, more conventional flat panel systems, CPV systems are often much less expensive to produce, because the concentration allows for the production of a much smaller area of solar cells.

18. The First Sites • The main objective is to obtain development, construction, operating and maintenance experience base within Eskom. • The intention is to increase the PV capacity in future based on the Integrated Resource Plan allocation from the Department of Energy (DoE). • The two PV plants at Kendal and Lethabo will be interconnected to the Power Station’s 11kV distribution boards for internal energy consumption for reductions of the auxiliary load during the day. Both projects scheduled to be operational in 2011.

19. Kendal & Lethabo: Two PV Technologies • Installation at Kendal will be a fixed-tilt polycrystalline silicone PV power plant of 625kW peak capacity • Fixed-tilt systems do not follow the daily sun movement, instead the PV panels are fixed at a predetermined angle which optimises solar radiation available in the region. • Installation at Lethabo will be a single-axis tracking polycrystalline silicone PV plant of 575kW peak capacity • Single axis tracking systems are positioned at an optimal angle with an additional advantage of tracking the daily sun movement (east to west) thereby increasing the annual output by approximately 30%.

20. Megawatt Park • Parking canopies located in the main visitors parking area that will serve as the mounting structure for a 400 kWp fixed axis crystalline silicone PV system. • Separate concentrating PV (CPV) dual axis tracking systems sized at 12 kWp each will be located adjacent to each main entrance to the Megawatt Park grounds. This particular system will be able to track the sun’s movement at both axis to maximise the sun’s exposure to the CPV panels. Since CPV can only operate efficiently in direct sunlight with a relatively low angle of incidence they require such tracking systems to make sure that they stay focused on the sun throughout the day. The high efficiencies of these cells however (typically 35%-40%) can enable the CPV units to operate at high module efficiencies, up to 27% (compared to a typical module efficiency of 20% for crystalline silicon or 12% for thin-film cadmium-telluride). Erecting Steel Support Structure for PV System Similar CPV System in WC Province

21. Opportunities for small PV Solar Projects • Promote new local PV supply chain manufacturing and technical service businesses; • Eskom aspires to support small PV solar projects by identifying prospective sites close to Eskom’s existing asset to create market for SESSA members.

22. Future Outlook • Photovoltaic technologies will be used in an increasing number of areas of life in future, and the trend towards using solar modules as a design element of buildings will continue. • Flexible thin film modules, which can be integrated into roofing foil and rolled out onto the house roofs or applied to vehicle roofs and boats are already available like in Germany. • German researchers and companies are currently developing processes to reduce module and systems costs and increase the energy yields of solar power plants, which will in turn lead to the wider use of photovoltaic systems

23. Please partner with us • Embrace energy saving as a national culture, joining the global journey towards a sustainable future • 49M campaign aims to create a culture of energy efficiency in SA • Remember the three Ps: save power, save your pocket and save our planet . If you’re not using it, switch it off!

24. THANK YOU Ayanda Nakedi Senior General Manager Renewables Business Eskom Holdings Limited Email ayanda.nakedi@eskom.co.za