Overview: Solar Energy in the European Union
The solar energy in the European Union is primarily made up of photovoltaics (PV) and solar thermal energy (both concentrated solar power and solar heating and cooling).
In the year 2010, the €2.6 billion European solar heating sector consisted of small and medium-sized businesses, and it generated 17.3 terawatt-hours (TWh) of energy as well as employed 33,500 workers and created one new job for every 80 kW of added capacity. In addition to that, during the year 2011, an additional 21.9 gigawatts (GW) of photovoltaic systems were connected to the grid in the European Union. This was a steep increase from the 13.4 GW that was installed in 2010. For this period, the turnover of the European PV market amounted to approximately €36 billion.
Then in 2018, the European Union installed around 8 GW of solar power systems. This number is a 36% year-on-year increase over the 5.9 GW connected to the grid in the EU-28 in 2017. Additionally, solar installations in Europe as a whole grew by around 20% to 11 GW in 2018, up from 9.2 GW the year before.
Policies and Potential in the European Union
The development of a sustainable and efficient energy system is one of the biggest challenges that the European Union faces. Without affordable, more efficient, and reliable low-carbon energy technologies, Europe will not achieve a sustainable energy system by 2050. With that said, the European Commission has recently published actions that set out to reach the ambitious goal of becoming a resilient Energy Union that addresses sustainability, energy security, and competitiveness.
In order to achieve this goal, fundamental changes to Europe’s energy systems are needed. Renewable energies can contribute to this goal by reducing the dependency on fossil fuels and greenhouse gas emissions while guaranteeing a more secure supply. At the European level, efforts to increase the role of renewable energy have already started with the 1997 White Paper. Then in June 2009, the European Directive on the promotion of the use of energy from renewable sources came into force. This sets compulsory targets for the Member States to achieve by 2020, to support the worldwide stabilization of the atmospheric greenhouse gases in the 450–550 ppm range.
By the end of 2011, the Commission published its energy roadmap 2050, in which a range of scenarios is analyzed. A common feature of all of these is that renewable sources should provide the largest share of all energy supply technologies by 2050. The split between the different sources and technologies is open, and the discussion about new renewable energy targets for 2030 is starting to heat up. The Commission’s most recent communication on renewable energy policy looks to the post-2020 period and proposes to start the process of preparing policy options and milestones for 2030.
Solar energy is an important technology option to make this shift to a decarbonized energy supply happen. The solar resources in Europe and worldwide are actually abundant. In fact, the current target in the European Union (EU) Member State National Renewable Energy Action Plans of 89 GW by 2020 greatly underutilizes the available resources.
Solar energy can be used by a family of technologies capable of being integrated among themselves. It can also be integrated with other renewable energy technologies. Aside from that, all these technologies can deliver heat, cooling, electricity, lighting, and fuels for a host of applications.
In the medium term, photovoltaic (PV) systems will be introduced as important parts of new and re-fitted buildings, a market that will also be driven by legal requirements for energy efficiency in buildings. Directive 2010/31/EU requires the Member States to ensure that by 2021, all new buildings should be “nearly zero-energy” buildings. Building-integrated PVs provide an important energy supply component to balance consumption.
Photovoltaic Solar Power
Nature and Market
The PV sector in Europe has expanded rapidly on an annual basis, with high annual growth rates — of the order of 40% per year since 2000. With a cumulative installed capacity of around 51 GW, the European Union is the one that is leading in PV installations, with more than 70% of the total worldwide 69 GW of solar PV electricity generation capacity by the end of 2011. The industry itself claims that there are now over 300,000 jobs in Europe, with the potential to increase to over 2 million by 2020.
The dominant PV technology in the short to medium term has been the crystalline silicon-based systems, and they are expected to remain that way. Production data for the global cell production in 2011 vary between 28 and 37 GW. There is significant uncertainty in the data for 2011, and this is because of the highly competitive market environment. Another factor was the fact that some companies report shipment figures while others report sales or production figures, thus resulting in a discrepancy of data.
However, the solar cell production is only a limited part of the whole PV value chain. In order to judge the developments in the PV industry properly, it is important to look at the whole upstream industry (e.g. materials, polysilicon production, equipment manufacturing) as well as the downstream industry (e.g. inverters, the balance of system components, system development, installations). Additionally, it is also worth noting that even though more than two-thirds of the solar modules installed in Germany were not produced there, more than 60% of the added value remains within the German economy.
Meanwhile, concentrating PVs (CPVs) is an emerging technology that is steadily growing at a very high pace, although from a low starting point. Within CPVs, there is differentiation according to the concentration factors and whether the system uses a dish (dish CPV) or lenses (lens CPV). The primary parts of a CPV system are the cells, the optical elements, and the tracking devices. The recent growth in CPVs can be traced back to the significant improvements in all of these areas, as well as system integration. However, it is also important to note that CPVs are just at the beginning of an industry learning curve, with a considerable potential for technical and cost improvements.
The change of the market from a supply-restricted to a demand-driven market and the resulting overcapacity for solar modules has resulted in a dramatic price reduction of PV systems of over 50% over the last 4 years. Because of this, the technology has maintained its learning curve in terms of module price per kWp. This has been mirrored by reductions at a system level: at the beginning of January 2012 for Europe, the average prices were €1850 (kWp)-1 for residential and €1685 (kWp)-1 for commercial systems.
In 2012, photovoltaic systems with a total capacity of 17.2 gigawatts (GW) were connected to the grid in Europe. This was less than in 2011 when 22.4 GW had been installed. In terms of total installed capacity, the EPIA’s 2012 report had shown that Europe still led the way with about 69 GW or 70% of the worldwide capacity, producing 85 TWh of electricity annually. This energy volume is enough to power the supply needs of over 20 million households.
In 2011, solar photovoltaic continued its growth trend, and Italy was the top market for the year, with 9.3 GW connected. It was followed by Germany with 7.5 GW, France with 1.7 GW, and the United Kingdom with 784 MW. In terms of cumulative capacity, Germany is the leading country, with more than 24 GW, and it is followed by Italy, with more than 12 GW. By now, PV is a significant part of Europe’s electricity mix, producing 2% of the demand in the EU and roughly 4% of peak demand.
Moreover, in 2011, the EU’s solar electricity production is evaluated as ca 44.8 TWh in 2011 with 51.4 GW installed capacity, which was up 98% from 2010. In the same year, the EU also had 21.5 GW worth of new installations. The solar power share in 2011 was around 3.6% in Italy, 3.1% in Germany, and 2.6% in Spain.
EuroObserver expects the total installation to reach at least 120 GW in 2020. The national strategies are equivalent to 84 GW solar capacity in 2020, which may underestimate the actual development taking place. For example, according to AGEE-Stat (the Ministry of Environment’s Working Group on Renewable Energy Statistics), Germany connected solar capacity 7.5 GWp in 2011, twice the 3.5 GWp target. EU accounted for 74% of all newly connected capacity in 2011.
Additionally, the Photon International magazine reported that the worldwide solar cell production capacity was 12.5 GW in 2009 and 37 GW in 2011. In 2012, production capacities were set to rise to 69 GW, which was the same as the total installed capacity worldwide at the end of 2011.
Denmark reached its governmental goal of achieving 200 MW of photovoltaic capacity by 2020 already in 2012, eight years ahead of time. Danish energy sector players estimate that this development will result in 1000 MW by the end of 2020.
Meanwhile. Croatia, which is a new member of the EU, has a less than enthusiastic embrace of solar power due to a number of reasons. However, in the past few years, Croatian solar energy has seen a dramatic increase in the overall output. From 32.4 MWh in 2012 to an additional 46.2 MWh in 2013, plus with another 108 MWh awaiting to be connected to the national grid and additional power plants under construction, the total energy output exceeded 200 MWh. The national renewable energy strategy of Croatia is to increase the participating share of renewables in the overall energy mix — from 15.8% (end of 2012) to around 25% by 2020, with solar generating at least 500 MWh.
|PV in the European Union (MWpeak)|
Solar PV Manufacturers
Manufacturers of solar PV products, particularly solar panels and solar mounting systems, are actually very abundant in the European Union. The following are only some of the most commonly known ones:
- SolarWorld. SolarWorld is a German company that is dedicated to the manufacture and marketing of photovoltaic products all over the world.
- Hanwha Q Cells. Hanwha Q Cells is a manufacturer of photovoltaic cells with headquarters both in Seoul, South Korea, and Thalheim, Germany.
- REC Group. Based in Norway, REC Group was founded in 1996 and has since become one of the world’s leading providers of solar energy solutions.
- Kioto Solar. Founded in 2007, Kioto Solar is an Austria-based provider of solar thermal and PV systems.
- Photowatt. Photowatt is a manufacturer of photovoltaic panels from France.
- Victron Energy. Victron Energy is a solar manufacturing company that was founded in 1975 in the Netherlands.
- Lorentz. Founded in Germany in 1993, Lorentz is a company that has pioneered, innovated, and excelled in the engineering and manufacturing of solar-powered water pumping.
- ATERSA Group. ATERSA Group was founded in 1983 after the companies ELECSOL and ATESOL merged together. From its conception, ATERSA has developed, manufactured, and commercialized all the components needed for the configuration of a solar PV system.
- Megasol Energy. Megasol Energy was founded by Markus Gisler when he was only 12 years old in 1993. And since its conception, Megasol has transformed from being a garage company to becoming the leading solar manufacturing companies in all of Europe.
- AE Solar. Founded by Dr. Alexander Maier and his brothers Waldemar Maier and Victor Maier, AE Solar GmbH is a German renewable energy manufacturing company.
Concentrated Solar Thermal Power
Within just a few years, the concentrated solar power (CSP) industry has grown from negligible activity to over 4 GWe, either commissioned or under construction. By the end of January 2012, CSP plants with a cumulative capacity of about 1.7 GW were in commercial operation in Spain (about 71% of the worldwide capacity of 2.4 GW). Capital investment for solar-only reference systems of 50 MWe without storage was estimated to be around €4800 (kWe)-1. With storage, these costs can go up significantly. Depending on the direct normal insolation (DNI), the cost of electricity production for parabolic trough systems is currently of the order €0.18–€0.20 kWh-1 (southern Europe, DNI: 2000 kWh m2a-1). The Solar Europe Industrial Initiative indicates the potential to reduce costs by 35% by 2020.
Furthermore, more than 10 different companies are now active in building or preparing for commercial-scale plants. This is an improvement from a few years ago when only two or three were in a position to develop and build a commercial-scale plant. These companies range from large organizations with international construction and project management expertise who have acquired rights to specific technologies to start-ups based on their own technology developed in house.
The supply chain for CSP plants is not limited by raw materials because the majority are glass, steel/aluminum, and concrete. As of right now, evacuated tubes for trough plants can be produced at a sufficient rate to service several hundred MW per year. The National Renewable Energy Action Place (NREAP) forecasts an increase in capacity to 7 GW by 2020, mostly located in Spain. The CSP industry association European Solar Thermal Electricity Association is more optimistic, predicting 30 GW by 2020 and 60 GW by 2030.
|CSP in Europe (MWpeak)|
Solar Heating and Cooling
Over the next 10 years, the European solar thermal will grow on average at a rate of 15% per annum. According to the National Renewable Energy Action Plans, the total solar thermal capacity in the EU will be 102 GW in 2020. This number was previously 14 GW in 2006.
In June 2009, the European Parliament and Council adopted the Directive on the promotion of the use of energy from Renewable Energy Sources (RES). For the first time, solar heating and cooling accounting for half of the final energy demand will be covered by a European directive promoting renewable energies. The overall renewable target is legally binding, but a renewable mix is free.
According to the delivered national plans, the highest solar heating markets during 2010–2020 will be in Italy, Germany, France, Spain, and Poland, with respect to the national target in 2020 and capacity increase. Aside from that, top countries per capita will be Cyprus, Greece, Austria, Italy, and Belgium.
Though it seems like solar heating and cooling is thriving in Europe, there are actually a few countries where the solar thermal market is still in its infancy. In particular, Bulgaria, Denmark, the Netherlands, Sweden, and the United Kingdom have extremely low targets in their plans. Additionally, Estonia, Finland, Latvia, and Romania have not included solar thermal in their national plans at all.
Solar heating is the usage of solar energy to provide space or water heating. Back in 2005, the worldwide use was 88 GWthermal. The growth potential for this form of solar technology is enormous. The EU has been second after China in terms of the installations. If all EU countries had used solar thermal as actively as the Austrians, the EU’s installed capacity would have been 91 GWth (130 million m2). This is far beyond the target of 100 million m2 by 2010, set by the White Paper in 1997.
In 2005, solar heating in the EU was equivalent to more than 686,000 tons of oil. ESTIF’s minimum target is to produce solar heating equivalent to 5,600,000 tons of oil by 2020. A more ambitious, but totally feasible, target is 73 million tons of oil per year (2020) — a lorry row spanning 1.5 times around the globe.
|Solar Heating in the European Union (MWthermal)|
|EU (in GW)||19.08||21.60||23.49||25.55||29.66||31.39|
Solar Organizations in the European Union
In an effort to further the progress of the solar industry in Europe, numerous solar organizations have been formed throughout the continent. The primary purpose of these organizations is to spread the word about solar energy to as many people as they can. And they plan to achieve this goal by conducting numerous solar-themed activities, particularly conferences, trade shows, and exhibitions.
In these activities, various solar professionals, ranging from scholars to manufacturers to solar installers, from all over the world congregate and discuss the recent developments of solar energy, the trends and products in the current market, and the trajectory that solar will take in the future. In other words, these activities are a great way to educate people about solar as well as to allow professionals to network and grow their business.
There are a ton of solar organizations that are formed and held in Europe. The following are only some of the most popular ones:
- International Solar Energy Society. Founded way back in 1954 in Freiburg, Germany, The International Solar Energy Society (ISES) is a nonprofit UN-accredited membership NGO that aims to become the trusted global advisor on renewable energy.
- World Solar Thermal Electricity Association. Founded in 2011 in Brussels, Belgium, World Solar Thermal Electricity Association, or STELAWorld for short, as formed to assist policy-makers and energy investors to access information on solar thermal electricity development and the value and the rapidly reducing cost of solar thermal electricity production.
- SolarPower Europe. A member-led association, SolarPower Europe has the primary goal of ensuring that more energy is generated by solar than any other energy source by 2030.
- EUROSOLAR. Founded in 1988, EUROSOLAR, previously known as the European Association for Renewable Energy, is dedicated to the cause of completely substituting for nuclear and fossil energy through renewable energy.
- Solar Heat Europe. Previously known as the European Solar Thermal Industry Federation, Solar Heat Europe strives for the growth of solar heat solutions in Europe through different actions, such as advocating for better regulation or encouraging the EU policymakers to shape a fair context for heating and cooling solutions.
Strategic Energy Technology Plan
Ever since 2007, with the strategic energy technology plan (SET-Plan), the EU has set out a long-term energy research agenda to address the key innovation bottlenecks that energy technologies are now facing. These bottlenecks are in frontier research, at the R&D/proof of concept stages, and for the demonstration and commercialization process when companies seek capital to finance major projects.
Implementation of the SET-Plan began with the establishment of the European Industrial Initiatives that bring together industry, the research community, the Member States, and the Commission in risk-sharing, public-private partnerships aimed at the rapid development of key energy technologies at European level. Likewise, the European Energy Research Alliance has been working since 2008 to align the R&D activities of individual research organizations to the needs of the SET-Plan priorities and to establish a joint programming framework at the EU level.
The SET-Plan has two timelines. The first timeline is for 2020, and this entails that the SET-Plan provides a framework to accelerate the development and deployment of cost-effective low-carbon technologies. With such comprehensive strategies, the EU should be on track to reach its 20–20–20 goals.
The second timeline is for 2050, and for this, the SET-Plan is targeted at limiting climate change to a global temperature rise of no more than 2°C, particularly by matching the vision to reduce EU greenhouse gas emissions by 80%–95%. In this regard, the SET-Plan objective is to further lower the cost of low-carbon energy and put the EU’s energy industry at the forefront of the rapidly growing low-carbon energy technology sector.
The development of PV, as well as CSP, is being addressed by the European Solar Industry Initiative. The Commission itself is closely involved, with an enabling role, in independently monitoring the progress that has been made in reaching the targets agreed with all stakeholders. At a very practical level, the Joint Research Center (JRC) and the European Solar Test Installation (ESTI) laboratory provides a European reference laboratory to validate the electrical performance and lifetime of PV devices based on emerging technologies. In tandem, it performs pre-normative research to develop and improve traceable, accurate measurement techniques with reduced uncertainty levels, thus benefitting both manufacturers and investors.
Technology Road Maps
SETIS, the SET-Plan Information System, is operated by the JRC and has been supporting SET-Plan from its onset, providing referenced, timely, validated, and unbiased information on low-carbon energy technologies. Its 2011 technology map report provides an assessment for medium to long-term development of solar energy technologies.
A wide variety of PV technological routes will continue to characterize the sector after 2020, depending on the specific requirements and economics of the various applications. Common commercial flat-plate module efficiencies are expected to increase to 25% in 2030, with the potential of increasing up to 40% in 2050 because of the wafer equivalent technologies and new device structures with novel concepts. Typically, the operational lifetime of PV modules is around 25 years, but it is expected to increase to 40 years.
The use of energy and materials in the manufacturing process will become significantly more efficient, thus leading to considerably shortened PV system energy payback times. Simultaneously, affordable materials will replace the expensive ones that are currently used (e.g. copper instead of silver). Additionally, increased R&D is required to bring thin-film technologies to maturity and long-term reliability and to create the necessary experience in industrial manufacturing. Beyond 2020, the efficiency of commercial modules could possibly reach more than 20% for copper indium gallium di-selenide, 16% for a-Si, and 15% for CdTe. In addition to that, these modules will have new and improved device structures and substrates, large area, non-vacuum deposition techniques, interconnection, and roll-to-roll manufacturing and packaging.
Meanwhile, concentrated PV technology is presently moving to commercial-scale applications. Further R&D efforts are required in optical systems, module assembly, tracking systems, and high-efficiency devices with the potential of reaching module efficiencies higher than 23% or 45% (low/high concentrating PVs).
Emerging PV technologies, such as advanced inorganic thin-film technologies, organic solar cells (organic PVs and dye-sensitized solar cells), also based on novel concepts such as quantum excitonic structures with their potential for cost reduction and performance improvement will represent an increasing share of the PV deployment after 2020. In order to capture this potential, significant R&D is mandatory. For example, it is important to work on the long-term stabilization of the performances of the organic solar cells and improve their lifetime.
Solar Thermal Electricity (Concentrated Solar Power)
The mainstream approach to CSP, which is oil circulating in trough receivers, appears to have a limited potential for cost reduction. When that approach is used, the ability to be dispatched analyzed as CSP’s future promise does not seem sufficient, together with mass production, to assure competitiveness. More research on advanced concepts, such as molten salts or solar trough, direct steam or Fresnel, and molten salts or solar tower, is still mandatory.
Beyond 2020, significant increases (above 600°C) in the operating temperature of the heat transfer fluids are to be expected compared with the current mainstream technology. This will be achieved by studying materials and components that are reliable at very high temperatures, developing new heat transfer fluids, more efficient cycles and new system architectures, and optimizing the plant control system. Gains in efficiency will be considerable: it will be more than 20% compared with the current state of the art.
In terms of its ability to be dispatched, the storage capacity will be improved (above 250 kWh m-3), owing particularly to the implementation of ad hoc thermochemical processes. This will make storage systems much more cost-effective. With regard to the environmental profile, a significant reduction of water consumption (below 0.25 kWh-1) can be obtained beyond 2020, particularly through the use of dry cooling systems. At the same time, the overall efficiency of the plant can be maintained.
As for multi-purpose plants and hybridization, it should be possible beyond 2020 to optimize the hybridization of CSP plants with other renewable energy sources and to efficiently couple the production of electricity with other uses (e.g. desalination). CSP plants — exploiting possible efficiencies, cost reduction, and performance improvements from innovative combined production of electricity and fresh water — are strategically and symbolically relevant for exploitation in the Middle East and North Africa region.
Regardless of the type of renewable energy source, there are non-technical aspects as well that greatly influence the development and deployment of renewables.
The first aspect is the electricity grid. The current European system is based on centralized conventional sources of energy, such as coal, oil, natural gas, and nuclear energy, and their respective distribution systems with a one-directional flow of the energy carrier. Meanwhile, renewable energy sources can either be used in centralized or decentralized installations. More effort is needed, not only to install PV electricity generation systems but also to facilitate grid access and enable the electricity infrastructure to absorb and distribute solar electricity. To this end, it is important that the solar energy technology community collaborates and contributes to the development of smart grids.
The second is serving the customer. One challenge to all renewable energy technologies, particularly in solar, is that becoming a significant electricity provider also means developing the ability to manage the supply and demand. Effective integration of PVs with economic storage technologies is likely to be a key challenge in this respect.
Markets, targets, and support mechanisms are the third aspect. The Commission’s 2012 communication on renewable energy policy calls for a more coordinated European approach in the establishment and reform of support schemes and an increased use of renewable energy trading among the Member States. Beyond 2020, it identifies three options beyond business. These are 1) new goals for greenhouse gas emissions (GHGs) but no goals for renewable energy (the energy trading scheme would be the main instrument to cut down on CO2 emissions), 2) national targets for renewable energy, energy efficiency, and GHGs, and 3) EU wide targets of renewable energy, energy efficiency, and GHG goals.
And finally, standards to support innovation are the fourth aspect. The internationalization of common standards to further promote innovation and ensure market access worldwide for European industries is a problem for all low-carbon technologies, including solar. The Commission’s communication in June 2011 on a “Strategy for European Standardization” stresses that science has a crucial role to play in the field of standardization.
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