by Matt LeDucq, Suntech America
Trillions of dollars have been spent on power generation projects during the past decade, but only about 1 percent of those projects use solar photovoltaic (PV) technology. Those dynamics are changing fast.
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The 8.22-MW solar power plant in Alamosa, Colo., with more than 27,000 Suntech solar modules was one of the largest in the U.S. when it was completed in 2008. Today, Suntech is partnering with EPCs on solar projects from 1 MW to more than 200 MW. |
The world added 18,000 MW of PV projects in 2010, up from 2,000 MW in 2003. As the technology continues to improve, PV has emerged as a mainstream solution for power generation, attracting major investors, as well as some of the world’s leading power plant construction companies. The entrance of highly experienced and professional engineering, procurement and construction (EPC) companies into the PV industry is driving down the levelized cost of solar electricity for utilities and ratepayers.
As the scale and complexity of PV projects have grown, so have the stakes and responsibilities of EPCs. More than 99 percent of a solar project’s total costs are in construction. Once the system is installed, you can’t just add fuel or increase utilization to make up for lost time. No other industry in the world is so focused on getting the job done right the first time. For that reason, capacity guarantees have become a mainstay in EPC contracts for PV projects.
PV technology, however, presents technical and planning challenges compared with traditional generation facilities. Accounting and managing those risks is critical for an EPC to fulfill contractual obligations and key construction milestones. It all starts with understanding PV system capacity. For PV, capacity is not simply a matter of calculating the combined theoretical power ratings of contributing components. EPCs must account for other real-world variables such as unforeseeable delays and weather risks that have implications for achieving a desired PV system capacity. Understanding and mitigating PV-specific risk variables is critical to satisfying performance guarantees and reaching final completion.
Managing Unforeseeable Delay
With traditional power generation, the equipment only begins degrading upon its energization or being placed into operation. The life cycle of a PV module begins the day it is exposed to sunlight. Therefore, project delay takes on new meaning for contractors.
Consider the following scenario: A new 100-MW project gets to mechanical completion with all modules affixed. The day before interconnection, an unexpected labor strike occurs and the plant sits idle for 150 days during negotiations. For any other type of power generation equipment, you wouldn’t give a second thought to the physical capacity of the plant. A 250-MW coal power plant still will be a 250-MW coal power plant after 150 days. PV modules, however, do not have on-off switches and begin a long, gradual degradation curve the instant they are exposed to sunlight.
Any delay will alter the capacity of the PV installation, making it difficult to reach final completion. There are no quick fixes. In some instances, the modules simply can be covered during the delay, preventing further degradation and eliminating additional risk. If you are working on a PV project with upwards of 500,000 modules, however, simply covering them is not always viable.
Because you can’t prevent all risk, it is important to manage risk from the outset in contract negotiations. The contract negotiation of the prime or EPC agreement lays the foundation for how risk will flow throughout the project, determining which risks are acceptable and which can be passed to vendors and subcontractors. For example, time limits on force majeure can be put into place after which time certain activities such as covering panels can be shared costs. Further, degradation tables should be provided and guaranteed by the PV module manufacturer because they should know their products best.
Because of the high potential costs associated with delay, EPCs must work with reliable module suppliers who can deliver large volumes on time, have records of successful global logistics management, can and will stand behind their degradation guarantees, and fully understand the risk associated with large PV projects.
Managing Mother Nature
With traditional power generation, the capacity of a power plant remains the same regardless of weather conditions. PV technology is unique; temperature, wind and rainfall can impact plant capacity and long-term system performance.
It’s important to account for irradiance and temperature variance. Older PV projects often entertained yield or megawatt-hour or kilowatt-hour guarantees because of the challenging nature of weather risks. Projects today typically account for weather-related variables such as irradiance and temperature during the planning process. Still, EPCs are not completely risk-free after considering meteorological conditions. Using proper instruments to measure such variables is essential.
Effective ambient and panel temperature measurement methods have been in place for years, but the ability to measure irradiance with the same level of accuracy still is not in place. Pyronometers, reference modules and reference cells have been deployed on projects to measure irradiance, but all must be examined and inaccuracies must be accounted for properly in the performance guarantee. PV module manufacturers can be good resources to help determine which equipment should be used to measure irradiance properly.
Another issue to consider is soiling, which loosely can be defined as the amount of dirt or dust that sits on the module glass. Solar plants are the only source of power generation where this is a significant factor in overall plant performance because high levels of soiling impede photons from making their way to the PV cells, decreasing capacity and yield.
Often, a percentage of decreased capacity to account for soiling is incorporated at the planning stage. Assuming the percent is based on enough research, this method likely is the quickest way for an EPC to handle a soiling variable in the performance guarantee. In the case of soiling, EPCs are gambling with the weather. They are guaranteeing the amount of wind, humidity in the air and other conditions that interact to equal the amount of dust that will stay on panels. If a blanket percent is given, the whole project is one dry spring away from potential underperformance.
Modeling the soiling variable based on actual conditions rather than scientific guesstimates is interesting, though somewhat in its infancy. In one soiling variable measurement, there would be a nonsoiled, control irradiance measurement device somehow kept clean that would measure against a soiled, noncontrolled irradiance measurement device. This theoretically would create the actual soiling percentage. This effort has flaws, but it could be an interesting concept for EPCs to consider.
Make Safety a Priority
With traditional power generation, safety is always the first priority. The same is true with PV projects. PV technology, however, naturally presents different safety risks that require consideration.
For example, PV modules are always live when the sun is shining. This is elementary in some ways, but often it is not fully digested by everyone on the ground. Having one crew member in charge of potentially hazardous execution steps, such as fusing the module systems, can help mitigate risks. A string of modules even fused at the combiner box can pack 600-1,000 volts and 15-amp shock easily, which is severe and dangerous if not respected.
Education and training, followed by an on-site test for field crew, should be deployed prior to any activity on-site. Many contractors have a simple, effective way to identify those who have been educated in a safety course. Borrow their idea and place a sticker on the hard hats of those who pass a PV-specific safety course administered by the safety manager. A full site-specific safety plan must be created by a safety professional for each project. Awareness is the best bet for accident-free project completion. Any injuries obtained on a project site can be pinned to the EPC for negligence, and they can be sued for more than the original contract value. There is no substitute for safety planning and prevention.
Risks, Rewards
Understanding the nuances and potential risks of PV project development is vital for EPCs planning to undertake projects in this rapidly growing industry. With careful planning and reliable partners, all of the PV-specific complexities in PV power plant construction can be overcome or at least mitigated.
Every power generation resource presents challenges and opportunities, and we’re just beginning to realize the full potential for large-scale solar electricity generation. In an environment of rising long-term fossil fuel prices, the price of solar electricity will continue to decline with improved technology and economies of scale. Some of the greatest opportunities for improving the economics of PV, however, will be improving efficiency in PV project execution. The work of EPCs remains central to making solar electricity competitive against all traditional sources of power generation.
Author
Matt LeDucq is the senior director of business development and strategic projects for Suntech, the world’s largest producer of solar panels. Reach him at [email protected].
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