L R AS Published on Monday 19 February 2018 - n° 222 - Categories:Thread of the Week
Le Fil de l'Actu of February 19th
THE IMPORTANT POINTS OF THIS WEEK'S NEWS (le Fil de l'Actu n°222 du 19 février)
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FRANCE
* Result of the CRE 4 tranche 3 call for tenders (CRE 4.3)
* Winners of the call for tenders for innovative solar installations
* Comment on the CRE 4 call for tenders. 3 by GreenUnivers
* Assessment of the outcome of the call for tenders for innovative solar projects
* EDF's 2017 accounts
* Greenpeace's assessment of EDF's 2017 accounts
* Construction of 250 MW in Australia by Total Eren *
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THE FILE
* Solar energy is on the road to global energy dominance .
* The No. 1 developer in 2017 is Chinese SPIC, followed by GCL NE
* First contract to replace a state-of-the-art gas-fired power plant
* Global storagevolume in 2017 increased by 4.6% over 2016
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THE WORLD
* The American energyshift in favour of RE * The
number of community aggregators is growing fast in California
* Sharp rise in storage facilities in the UK *
Are there financialdifficulties for some Chinese manufacturers?
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THE PRODUCTS
* Tesla'sdemand for batteries is drying up Panasonic's capacity
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THE COMPANIES
* SunPower's 2017 accounts : very bad
* SolarEdge's 2017 financial year is very good
*REC Silicon's 2017 accounts.
* Shunfeng International's 2017losses again *
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MISCELLANEOUS
* Conversion rate of 25.04% achieved by Trina *
THE DEVELOPMENT OF THESE TITLES
FRANCE
* Result of the call for tenders CRE 4 tranche 3 (CRE 4.3)
Study by Finergreen of the result of the call for tenders CRE 4 tranche 3 (CRE 4.3) :
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* Winners of the call for tenders for innovative solar installations
Finergreen has carried out a study on the winners of the tender for innovative solar installations :
Comment on the RCE 4.3 call for tenders: Urbasolar is the largest winner. It features prominently in all three categories of the competition. It is present on ground-based power stations over 5 MW (27.7 MW obtained), on those between 0.5 and 5 MW (22 MW) and on shaded areas (12.4 MW), i.e. 62 MW in all. It is also the leader in the first period of the call for tenders for innovative projects.
The average price of the 77 proposed projects is €61.60/MWh, down 4% compared with the second period. However, in the large power segment, the average price is €55.30/MWh: it is stable compared with the previous tranche (€55.50/MWh) in July, which had set a record downwards. "There is a turning point for several reasons: the price of photovoltaic panels is falling less rapidly, the price of connections is tending to rise and interest rates are rising," explains Daniel Bour, President of Générale du Solaire. This professional is now anticipating a 5 to 10% drop in rates on an annual basis. He adds: "a good number of smaller projects and shadehouses (perhaps half) will never materialise, particularly because the files would be far from secure, often because the site owner may change his mind. And the resulting fee may be subject to funding constraints. »
Result of the CRE 4 tranche 3 call for tenders (CRE 4.3)
GreenUnivers of 12 February
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* Assessment of the outcome of the call for tenders for innovative solar projects
The first period of the call for tenders for innovative solar projects (100 kW to 3 MW) rewarded 15 developers, identified and ranked by the Finergreen firm (see Winners of the call for tenders for innovative solar installations ). They share 77 MW. The 50 projects have a fairly low average price of €80.70/MWh. The five leaders (Urbasolar, Langa, Tenergie, Total Solar allied with Amarenco and Luxel) account for nearly two thirds of the total volume awarded.
The call for tenders includes four families. The components, such as the two-sided panels, attract 25.7 MW. Innovations in the electrical system attract 10.2 MW. Improved operation (monitoring software, preventive maintenance...) generates 22 MW. And 15.3 MW will be devoted to the agrivoltaic power stations, a family "trussed" by Tenergie, Akuo Energy and Voltalia,
GreenUnivers of 12 February
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* EDF's 2017 financial statements
In 2017, the EDF Group generated sales of €69.6 billion, down 2.2% on 2016, due to the drop in production, the price of nuclear power and low hydroelectricity.
The decline in sales and the shift towards renewable energies led to a 16% decrease in earnings before depreciation, amortisation and provisions (EBITDA or ebitda) to €13.7 billion (-16.3% over 2016). 13.7 billion (-16.3% over 2016). Net profit from ordinary activities amounted to €2,820 million (-31%). Net profit attributable to equity holders of the parent was €3.2 billion, up 11% thanks to a capital gain on the sale of RTE shares.
The group expects EBITDA for 2018 to be between €14.6 and €15.3 billion (+7% to +12%).
In 2017, EDF Energies Nouvelles, the company's renewable energy branch, generated 12.6 TWh, an 11% increase compared with 2016.
read the commentary on EDF's accounts by Greenpeace: Greenpeace's assessment of EDF's 2017 accounts
Photon of February 16 and ABC Bourse of 16-2
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* Greenpeace's assessment of EDF's 2017 accounts
For Greenpeace France, EDF's management is catastrophic: "EDF's results have never been so bad. Free cash flow is negative for the 11th consecutive year; operating profit is down sharply; indebtedness is unsustainable; the group is losing market share.... Despite the support of the State through successive capital increases, all indicators are in the red this year and once again raise the question of EDF's solvency". "The financial health of EDF continues to deteriorate. It is going to become more and more difficult for the company to face up to its commitments, notably the development of renewable energies, the big refit of the reactors or the construction of the two reactors at Hinkley Point ", analyses Greenpeace France.
"In 18 months, EDF has revised its financial forecasts downwards eight times. EDF is having more and more difficulty repaying its bonds (around €4 billion within a year and nearly €14 billion over the next four years), and making the investments essential to the safety and security of an ageing French nuclear fleet". "EDF's future is darkening: nuclear electricity production has never been so low; reactor unavailability, whether planned or not, is increasing. With rising production costs, the profitability of the French industry is inexorably deteriorating".
EDF's figures as seen by Greenpeace:
The net debt/EBITDA ratio (2.5 times) has never been so bad. EDF forecasts a further deterioration in 2018 (more than 2.7 times). If we include the TSDI (hybrid bonds for €10,095m), the ratio is well over the 3 times threshold. This ratio enables the rating agencies to measure a company's ability to repay its debt: EDF's solvency is deteriorating.
Gross debt has almost tripled in 10 years: from €28 billion in 2006, it has risen to €75 billion in 2016. Bonds represent ? of the debt.
On 27th October 2017, EDF announced that the group's Ebitda (or EBITDA) would be down by at least 15% compared to 2016. This is a record drop: you have to go back to 2006 to have an Ebitda (or EBITDA) of less than €14 billion.
Nuclear electricity production fell by 9% between 2015 (416.8 TWh) and 2017 (379.1 TWh).
At the end of 2016, Greenpeace was already warning about EDF's financial health in a study by AlphaValue's financial analysis firm entitled "EDF asphyxiated by nuclear power",
Tecsol, 15 February
Total Eren to build a 250 MW power plant in Australia. It will be completed by mid-2019. Electricity sales will cover 200 MW. A 100 MW battery storage system will also be built.
GreenUnivers of 14 February
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THE FILE
* . Solar energy is on the road to global energy dominance
According to the Managing Director of Sol Systems, solar energy receives public support, benefits from a reduction in costs, achieves a higher conversion rate, and corresponds to investors' expectations.
Natural gas production will provide 35% of US electricity generation in 2016 and 32% in 2017. It remains ahead of coal (30% in 2016). Natural gas sets the offset price in most markets and therefore determines wholesale electricity prices. Gas production is expected to increase over the next 24 months as new pipelines transport gas from production to consumption. This will cause gas prices to fall over this period. Beyond that, uncertainty dominates as natural gas discoveries are at their lowest level in 70 years and have continued to decline steadily over the past five years. Recent studies indicate that many gas operators have exploited the cheapest wells to maximize revenues and for short-term profitability, leaving more expensive gas in the ground and potentially increasing extraction prices over time. Most current electricity projections estimate that wholesale electricity prices will increase from $0.079/kWh to $0.085/kWh (depending on location) by 2039. This price does not include the value of carbon.
PV electricity sales contracts all indicate declining prices. They have a lower price than a new generation gas-fired power plant. The PJM price is around $0.03 / kWh.
The cost of solar power plants will continue to fall as investors move more and more towards financing these plants. This is due to the overvalued price of shares on the stock market, while investments in power plants are not correlated with stock market assets. They are long term, they are denominated in dollars. The financing of sovereign wealth funds, pension funds or insurance companies adjust their resources to their expenses. There is therefore an attraction of investors for solar investments, which can only lead to a decrease in the cost of borrowing for project promoters.
Even the rise in interest rates expected in 2018 will not change this attraction, as electricity rates rise with interest rates. As electricity rates rise, the efficiency of solar power plants increases as the cost of solar power is fixed at construction and does not require fuel (such as natural gas).
In turn, the costs of solar installations will decrease. The price of panels should fall from the second quarter onwards. For the time being, precautionary stocks, of the order of 6.5 GW according to Credit Suisse, have been built up and American demand is anemic due to the wait for tariffs. Automation of production will continue to drive down panel costs. The author estimates that the price of silicon will fall by around 20% to $14/kg or even $13/kg in 2018 as a result of increased supply. In addition, wafer manufacturers are steadily reducing wafer thickness: 7 grams of silicon were needed in 2010, 4.8 grams in 2016 and probably 3.6 grams in 2020 (-25% in four years). Wafer manufacturers are increasing the conversion rate by using PERC, bifacial, half-format cells. This should lead to a panel production price of $0.20/watt in 2019. Panel prices are expected to be less than $0.40/W in Q3 2018 (including duties) and then at $0.30/W in 2019.
The inverter sector will also benefit from a sharp drop in prices. Currently between $0.05 and $0.06/Watt, their price should fall by 5% per year in the near future. In the past, string inverters have become the predominant solution in commercial rooftop power plants and small power plants. The cost of solar trackers ($0.12 to $0.15 / watt for a single string) is also expected to fall. They will use less steel for this. Thus, even with tariffs, solar energy will come back to $0.95 / watt with single-axis trackers. This will provide electricity at less than $0.03/kWh supplanting natural gas in many places.
By 2020, solar power will be the predominant source of new electricity generation capacity in the United States. But cheap electricity is only part of the equation.
Solar power must also transport electricity from midday to the evening or evening. This requires energy storage with batteries. Storage costs should be reduced by 10-20% per year, perhaps with other storage sources than lithium ion.
Consumers will want to choose the origin of their energy. Electricity companies have no incentive to buy more solar energy unless customers demand it. Therefore, power purchase agreements should be offered in a differentiated way, with wind, solar or gas origins to meet different expectations.
https://www.greentechmedia.com/articles/read/solar-is-going-to-win-bigly#gs.xK7JraA
GreenTech Media of 15 February
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* The number 1 developer in 2017 is Chinese SPIC, followed by GCL NE
The two biggest developers on the planet in 2017 are Chinese and are setting up operations in China: State Power Investment Corporation (SPIC) with more than 7 GW of cumulative installations, and GCL New Energy with more than 5 GW, according to GTM Research.
Canadian Solar and First Solar have the largest project portfolios, followed by Total, which owns SunPower and Eren. With two reserves) GTM did not review SPIC's portfolio as it is only active in the Chinese market. b°) The US market could be affected by the introduction of tariffs and thus affect Canadian Solar. If Canadian Solar and SunPower were to be adversely affected by the tariffs, they could turn to other dynamic countries.
Among the top 10 developers in terms of installed capacity, only three, Engie, Enerparc and Lightsource, have significant capacity in Europe.
The world market is marked by the rise of installations in South America, India and a few other countries. In Latin America, Enel Green Power has the largest portfolio, but there are also First Solar, Total, Canadian Solar, EDF, ...
PV Magazine of 15 February
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* First contract to replace a state-of-the-art gas-fired power plant
First Solar announced a year ago that solar energy could help to ensure peak consumption instead of gas-fired power plants. The panel manufacturer is going to install a 50 MW battery in Arizona to supply energy between 3 p.m. and 8 p.m. to the electricity company APS (Arizona Public Service).
The batteries will be coupled with a 65 MW solar power plant. The whole system will be operational in 2021.
Until now, APS has only installed 1 MW systems, and a 50 MW system has never been installed in the United States (there is the 100 MW Fluence project which will be installed by 2021).
This proposal from First Solar creates a new paradigm for very sunny regions.
A year ago, APS launched a request for proposals. It was open to all technologies and had to provide energy between 3 p.m. and 8 p.m. during the day.
The proposed system is 135 MWh, i.e. almost three hours with a power of 50 MW. The contract stipulates that the system must supply this energy during this period. First Solar will have the freedom to use the surplus as it sees fit.
The project has a ratio close to 1 between the solar energy obtained and the storage capacity. Until now this has not been the case because the cost of storage required the use of low-power batteries. The price agreed in this contract is not known. One can only refer to the Tucson Electric Power project which proposed a price of $0.045 per kWh with 100 MW of solar and 30 MW of storage for four hours. All this means that the balance of projects has changed: storage is no longer an addition to a solar installation, but plays a key role in getting the bid.
GreenTech Media of 13 February
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* Global storagevolume in 2017 increased by 4.6% over 2016
The global storage volume in 2017 increased by 4.6% over 2016, to 1.17 GW, after a 61% increase between 2016 and 2015, according to Bloomberg NEF. The average cost of storage fell by 24% last year to $209/kWh. This still high price still requires government subsidies or aid, as otherwise potential consumers of decentralised production would consider the cost of a battery prohibitive.
In 2017, South Korea installed 406 MW (35% of the world total) because of the reduction in electricity tariffs for commercial customers deploying storage systems. North and South America installed 522 MW (45% of the total), 3% less than in 2016. The EMEA zone has increased slightly. In the United Kingdom, efforts were made in favour of storage.
PV Magazine of 15 February
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THE WORLD
* The American energy shift in favour of RE
Bloomberg NEF focuses on the American energy shift towards RE: coal still accounts for 30% of US power generation capacity, but its contribution fell by 3% between 2016 and 2017. Natural gas is the second largest source of electricity generation and has decreased by 2% year on year. The third source, nuclear power, with 20%, is being caught up by RE, which reached 18% in 2017 due to the abundant installations in 2016 and hydroelectric production, which was more favourable in 2017 than in 2016.
Natural gas, which appears to have a promising future, is subject to increasing competition from RE. The price of gas is recovering, while the volume of generators is stagnating: in 2016 and 2017, natural gas generated more electricity than coal.
In 2017, RE generators accounted for 62% of new installations. According to BNEF, US solar power purchase agreements have reached a low of just over $20 per megawatt hour. The selling price of wind power in the North American "wind belt" averaged $0.017 per kilowatt hour. The BNEF notes that some regions crossed the symbolic "dollar per watt" threshold this year. GTM Research confirms that fixed systems for large power plants have returned below $1 per watt in some regions in the first half of 2017.
While wind installations were larger than solar installations, between 2008 and 2012, solar reversed the situation with 10.7 GW of solar installed in 2017, compared to 7.3 GW of wind. This is due to the federal tax credit which has encouraged developers to complete their construction before 2020, with prospects of lower purchase prices by then making it more attractive to wait. This was the case in 2016 for solar energy. Despite the disruption to solar in 2017, BNEF estimates that RE construction will resume its previous growth.
GreenTech Media of 15 February
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* The number of community aggregators is growing rapidly in California
The number of community aggregators is growing rapidly in California: there are eight operational entities and a dozen more are in the process of being created or expanded, representing 1.85 million customer accounts. For many, the use of aggregators stems from a desire to reduce energy costs. Legislation has been passed to target aggregators in New York, Massachusetts, Illinois, New Jersey, Ohio and Rhode Island.
For California utilities, these aggregators are a threat to their business because customers using them leave it to the utilities to manage the power lines, maintenance crews and customer service platforms that keep the system running. The split between aggregators and power companies has been discussed for a long time.
Last week, the CPUC passed a resolution that will require future aggregators to take on at least some of this common burden - the adequacy of resources or the need to provide enough power to meet the needs of the grid when energy demand peaks. Mechanisms are now in place to share utility costs between new aggregators and utilities. The new regulations specify that the new aggregator must submit its implementation plan no later than January 1 before starting to serve new customers. This regulation applies for the period 2018-2019. Regulations will be put in place for the future.
GreenTech Media of 14 February
In twelve months, storage projects increased by 240% in the United Kingdom. Installation forecasts (by Solar Media Market Research) are expected to increase by 200% in 2018 alone. This development stems from the national desire to phase out coal, the falling cost of the technology, and the widespread coupling between batteries and wind or solar power stations (30 GW would be ready to be connected). This evolution makes the United Kingdom considered as a strategic market for international players.
Above all, the emphasis is being placed on projects that generate different revenues in the long term, which is referred to as a "revenue stack" from multiple different sources of income.
Installed energy storage capacity in the UK in 2022 is expected to be 50 times greater than in 2017!
Energy Storage of 14 February
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* Are there financial difficulties with some Chinese manufacturers?
Some Chinese panel manufacturers would be in financial difficulties due to the rapid decline in demand. These producers lack working capital. One leading manufacturer has even delayed payments to its suppliers.
The difficulties stem from seasonality (winter), the decision by the United States to introduce customs duties, and Indian plans to introduce customs duties of up to 70%.
The situation can be managed by these cash-strapped producers if demand for panels picks up again in March.
Digitimes of 14 February
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THE PRODUCTS
* Tesla battery demand dries up Panasonic's capacity
The huge demand for batteries by Tesla makes Panasonic's cylindrical batteries unavailable. In order to supply, Panasonic must use its production capacity in Japan. Customers without deliveries from Panasonic are turning to Samsung SDI and LG Chem who are working at full capacity, and are wondering whether they should increase their capacity! The two South Korean manufacturers, who were sixth and tenth in the 2016 world ranking of suppliers of batteries for electric vehicles, climb to 4th and 5th place in 2017.
This is the consequence of the irregular production of the Tesla gigafactory, which depends on solar energy from Nevada. Tesla cannot obtain electricity because the factory is located in the middle of the desert: the factory's production is not stable.
Energy Trend of 16 February
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THE COMPANIES
* SunPower's 2017 financials: bad enough
You can't even ask yourself what's going on at SunPower anymore, as the company is sinking into losses. In the 4th quarter, its purchases were higher than its sales, as the gross margin was negative. In addition, sales were one third lower than in the 4th quarter 2016.
One could not have a better impression when looking at the 2017 financial year: for the first time, the annual gross margin is also negative. Operating losses account for half of sales, and the operating margin is three times lower than in fiscal 2016.
After these successive losses ($2,115 million), the company's shareholders' equity has returned to $143 million compared to financial debt of $1,605 million, which means that fresh capital must be found, as SunPower expects to lose another hundred million dollars in the first quarter of 2018!
| CA 4th quarter 2017 | variatio / 2016 | gross margin 2017 | gross margin 2016 | res operat 2017 | operating margin 2017 | operating margin 2016 | net income 2017 | net margin 2017 | net margin 2016 |
| 658 M$ | - 36 % | - 2,3 % | - 3,1 % | 735 M$ | - 112 % | - 29 % | -569 M$ | - 86,4 % | - 26,8 % |
| Turnover 2017 12 months | variatio / 2016 | gross margin 2017 | gross margin 2016 | res operat 2017 | operating margin 2017 | operating margin 2016 | net income 2017 | net margin 2017 | net margin 2016 |
| 1872 M$ | - 27 % | - 0,8 % | + 7,4 % | -1018 M$ | - 54,0 % | - 18,1 % | 851 M$ | - 45,5 % | -18,4% |
SunPower of 14 February
NDLR SunPower is accumulating difficulties as it is going to sell its stake in the yield company 8point3, 18% below the average stock market prices of the last three months. It is a direct victim of the US Administration's customs duties. It has entrusted its production of half-cell panels to the Chinese, who will quickly copy it, or increase the production prices since SunPower did not want to manufacture them in its own factory: it will no longer have the means to react. Finally, SunPower boasts that it produces IBC panels on a pilot line with 23% efficiency, which, it claims, would allow it to produce at lower cost, while at the same time Trina Solar announces a conversion rate of 25% on a large IBC cell: the company no longer has a technological lead and no longer has the financial means. It is going to make its main shareholder, Total, pay!
All of SolarEdge's accounts are in the green, whether for the fourth quarter of 2017, where the gross margin increased by 2.5 points and the operating margin by more than 5 points, or for the full year, with a gross margin gain of 2.6 points and an operating margin that increased by 0.5 points. The net margin for the year reached 13.9% of sales, which strengthens shareholders' equity. The company managed to generate financial income over the full year, reflecting its excellent financial position. In 2017, the company devoted 9.1% of sales to research and development.
| Sales 4th quarter 2017 | variatio / 2016 | gross margin 2017 | gross margin 2016 | res operat 2017 | operating margin 2017 | operating margin 2016 | net income 2017 | net margin 2017 | net margin 2016 | delivery 2017 |
| 189 M$ | 70% | 37,5% | 35,0% | 35 M$ | 18,3% | 12,7 % | 20 M$ | 10,3% | 8,8% | 766 MW |
| Turnover 2017 12 months | variatio / 2016 | gross margin 2017 | gross margin 2016 | res operat 2017 | operating margin 2017 | operating margin 2016 | net income 2017 | net margin 2017 | net margin 2016 | delivery 2017 |
| 607 M$ | 24% | 35,4% | 32,8% | 91 M$ | 15,0% | 14,5% | 84 M$ | 13,9% | 13,0% | 2,500 MW |
SolarEdgeFebruary 14
Norwegian silicon manufacturer REC Silicon has announced a sharp increase in its losses both in the last quarter of 2017 (twice sales) and for the year as a whole. This would be due to a production cost on fluidised bed reactors that is higher than usual at $10.4 per kilogram produced.
Given this situation, the company was unable to contribute to the financing of the joint venture plant being built in China at Yulin. This plant is starting to produce silane gas. Rated capacity could be reached by the end of 2018.
| Sales 2017 12 months | variatio / 2016 | res operat 2017 | operating margin 2017 | operating margin 2016 | net income 2017 | net margin 2017 | net margin 2016 | delivery 2017 | variatio / 2016 |
| 272 M$ | = | - 127 M$ | - 46,8 % | - 79,6 % | - 367 M$ | - 135 % | - 54 % | 13503t T | +3 % |
| Turnover 4th quarter 2017 | variatio / 2016 | res operat 2017 | operating margin 2017 | operating margin 2016 | net income 2017 | net margin 2017 | net margin 2016 | delivery 2017 | variatio / 2016 |
| 78 M$ | -3% | - 10 M$ | - 13,2 % | - 153 M$ | - 196 % | 2616 T | - 19 % |
Photon of February 12th
Editor's note For the past three years, the company has been a victim of customs duties introduced by China. It cannot sell its production at a good price. It thought it could find a solution by setting up a production unit in China with a Chinese, but its financial situation is deteriorating so quickly that REC Silicon cannot provide its share of the cost of the construction, after having brought its technology... The Chinese partner will get everything back, the plant and the technology...
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* Shunfeng International to make more losses in 2017
China's Shunfeng International (SFCE) increased its sales volume by 30% in 2017 over 2016, but suffered an average price decrease of 17%. This led to a decrease in gross margin to 650 M RMB in 2017, compared to a gross margin of 737 M RMB in 2016. The loss for fiscal year 2017 would amount to RMB 830 million ($130 million). The company had lost RMB 2.4 billion in 2016 ($378 million).
Difficulties in dispatching electricity produced by the group's owned power stations will cause a shortfall of RMB 370 million in 2017 sales.
Photon of 16 February
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MISCELLANEOUS
* Conversion rate of 25.04% obtained by Trina
Trina Solar reports that a large-area (243.18 cm²) N-type silicon cell with an interdigitated back contact (IBC) has achieved a conversion rate of 25.04%. It has an open circuit Voc of 715.6 mV, a short circuit density Jsc of 42.27 mA/cm² and a fill factor of 82.8%.
Photon du 15 février
Le Fil de l'Actu n°222 du 19 février 2018
