Sharp Energy Solution Europe (SESE)

March 29th, Ukraine, Kyiv

Sharp Energy Solution Europe (SESE)

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16.4 GW

• High growth again in Germany despites reduced profitabilities

• High profitability markets: Italy, CZ, SK, BE, FR…

• PV as an alternative investment with guaranteed cash flows

• National RE action plans (EU27)

• Growing competition

• World economic growth is back

• Electricity demand is growing

• USD / € eveolution, weak USD against € (20% change in the exchange rate) 1 USD 84 €Ct – 1 USD 72 €Ct)

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1. The PV market

2. Photovoltaic in Ukraine

3. Ways to success

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The market in 2010

201020092006 2007 200820052001 2002 2003 2004

0.47

2.51

6.17

7.20

16.4

1.441.120.58

1.580.33

+59%

+145%

+17%

+132%

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World split in 2010

ROW

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Market in 2010 in Europe

Germany: 7.4 GW

Italy: 2.3 GW

Czech Rep: 1.4 GW

France: 0.7 GW

Spain: 367 MW

Belgium: 361 MW

Greece: 150 MWSlovakia: 145 MW

Austria: 50 MW

Portugal: 45 MW

UK: 40 MW

Bulgaria: 11 MW

Rest of Europe: 86 MW

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Cumulated worldwide installed capacity until 2010

39.3 GW

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Cumulative installed capacity 2010

GW countries:

GermanyItaly

SpainJapan

USACzech Republic

France China in 2011 ?

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Our position in 2010… installed capacity EU27

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An outlook to 2011 Europe

14 GW

21.3 GW

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World Forecasts until 2015

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The Ukraine frame conditions for the PV Industry

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Ukraine offers better natural conditions for solar energy use than Germany

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Source: JRC PV GIS, http://re.jrc.ec.europa.eu/pvgis/ (2011)

Climatic region

Average specific energy yield

(in kWh/m²)

North-West 800-1.000

Centre 1.000-1.200

South-East 1.200-1.450

Average 1.200• Average solar yields of 1,5-3,7 kWh/m²/Day

Environmental Analysis

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Framework Analysis

• Ukraine offers good natural conditions & space for PV systems.

• Government V. Yanukovich has enabled certain steps to “Green Tariff Law” effective.

• “Local Content Rule” to promote a Ukrainian PV industry from 2012 challening.

• Apart from the centralised procedures to obtain electricity generation license &

accreditation for the green tariff, administrative procedures for PV projects are not

defined and tested yet.

• Foreign developers require support from local consultants to navigate the non-

transparent processes for site acquisition, grid connection & permitting on

regional/local levels.

• MW plants may be developed within < 12 months.

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Market Analysis

• Ukraine has a certain solar history with a well developed upstream Industry.

• Until 2009 PV market was minimal, (approx. 3 MW)

• The Green Tariff Law has triggered demand in grid-tied PV systems.

• In 2010 the first projects (Crimea area) on behalf of Ukrainian investors,

were announced.

• Ukrainian government approved of expedited licensing conditions for 185

MW (12 projects) in total over the next year.

• Bottlenecks are:

• limited grid infrastructure,

• lack of local supply structures,

• high country risk and maybe resulting financing problems for projects.

This will slow down the implementation of projects.

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Ways to success

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Best case EEG (German feed in law)

20 European countries with feed in tariffs according to EEG model:

Germany, France, Spain, Portugal, Italy, BulgariaLuxemburg,

Denmark, Czech Republic,

Austria, Hungary, Slovenia, Estonia, Lithuania, Latvia, Malta,

SlovakiaGreece, Cyprus, UK

Source: German Environmental Department 2008

Overview incentives and feed in tariffs

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When is a FIT scheme successful?

Pre conditions of a successful FIT or Green Tariffs

- Priority access to the grid for renewable Energies

- Less administration procedure “red tape”- No local content rule- Promotion of the tariffs- Awareness of the population- Stable and reliable commitment to the

tariffs, just regular changes: Investors must have investment security.

Source: German Environmental Department 2008

Successful Feed in Tariffs or Green Tariffs

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1500

1100

850850

600

3 3 3 3

150

80784012101274

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

annually installed PV power in MWp total installed PV power in MWp

Development of the German PV market

Milestones

1991-1995: 1,000 roofs program (grants)

1999-2003: 100,000 roofs program (loans)

2000: Renewable Energy Sources Act (EEG) (FIT)

2004: Amendment of EEG (FIT)

PV Market Data 2010

Newly installed power 7400 MWp

Total installed power 17400 MWp

Generated electricity 12000 GWH

Savings CO2 emissions 7,5 Mio t

System price Dez 2010 3038€/kW 2489 €/kW

Tax income 2010 1,5 Bln €

Employees 150000

Enterprises 15000

Tota

l in

sta

lled

PV

pow

er

in M

Wp

7400

2010

9134

17.400 MW in Germany in total 2010

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http://ec.europa.eu/energy/res/setplan/communication_2006_en.htm

EU PV Industry: Target of max. 12% PV electricity share by 2020

The SET Plan

1) Assumes 1,200 TWh p.a. per GWp2) Based on installed based 2007: 4,5 GWp

what it is about: a study prepared on the request of the EU commission

“scenario for PV e-share until 2020”   4%, 6% and 12% scenario 130 GW, 195 GW, 390 GW (155, 182, 235 billion € allocation cost)

The European perspective

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•no ad hoc changes of Green tariffs, no local content in order to attract foreign investors.

•In the context of the new Ukraine Financial law PV investments can create income for communities (local profit is not part of the federal financial balance.)

•Communities (responsible for real estate) can run estates more cost efficient.

•PV FIT will push Ukraine development of the local industry and creates jobs, income and taxes.•Communities must take over promotion responsibility and regulation support like: Clarification of local net issues and land licensing

•Trainings must be established as fast as possible organized by centralized Kyiv institutions.

•There should be a more ambitious target to replace a certain share of conventionals via RE. The current energy strategy 2030 is not ambitious enough with 40 Mio toe Renewable energies.

•Investigations Feb 2011 showing the electricity price increases (up to 30%) will lead in an dept increase because of the higher prices. Over 50% of the population said that. But this helps achieving grid parity faster.

Main Recommendations for accelerating market growth

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Evolution is on it’s way !