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Possible PV adoption and diffusion scenarios

It is very difficult to forecast exactly the extent to which PV will contribute to the mid-twenty-first-century energy system. Apart from the rates of innovation and cost reduction of PV technology itself, it wild depend on many other factors, including:

- innovation in and prices of all competing (renewable and nonrenewable) energy technologies;
- the definition and implementation of environmental protection policies;
- national and international energy policies;
- the internalization of environmental costs in market prices;
- an increase in the lifecycle efficiency of energy chains;
- the availability of investment capital for renewable energies in industrialized countries and developing countries;
- institutional and infrastructure reforms.

Depending on the evolution of some or several of these parameters,11 very different future scenarios could result. However, several statements can be made with a high degree of confidence.

On the demand-side

- World primary energy demand will increase strongly in coming decades, driven mainly by population growth and economic growth.

The price elasticity of demand is close to unity, which means that energy demand will grow roughly in inverse proportion to the fall in energy prices (in relative terms).

- Developing countries' share of primary energy demand (and eventually of emissions) is actually expected to increase by more than 50 per cent by 2020 (Khatib 1993; IEA 1993).

- Electricity intensity will increase in both industrialized countries and developing countries. In the latter, it is expected to rise at twice the rate of economic growth. According to the "accelerated policies" scenario of the International Panel on Climate Change (IPCC), the present developed countries will be responsible for over 60 per cent of world electricity demand in 2050. Figure 7.7 shows the predicted increase in electricity demand from 2000 to 2050 for different groups of countries.

- It has been estimated that in 1990 over 2 billion people - 37 per cent of the world population and 48 per cent of developing countries, population - still had limited or no access to electricity.

Fig. 7.7 World electricity demand according to IPCC's "accelerated policies" scenario

Giving this population access to basic electricity-driven services remains a top-priority issue.

On the supply side

Current progress is slow because PV has to compete with several alternative (and currently cheaper) energy technologies. However, PV provides a set of unique features, including the following:

- Owing to its high modularity, PV has extreme flexibility for powering a wide range of electricity-driven services, from very small applications to large power plants.

- PV is very well suited to providing electricity to rural and remote areas in developing countries. PV solar home systems could meet some basic needs of the people living in those areas, significantly increasing their standard of living. These PV applications can be installed rapidly and are more cost effective than taking the electricity grid into those regions. Most developing countries have excellent potential for the direct use of solar energy, the majority having higher insulation than world average values and large areas (e.g. deserts) suitable for solar panels.

- Direct solar conversion technologies are in practice the only renewable energy technologies that can be used in urban areas. The coupling of PV building-integrated systems with other solar-active or solar-passive and/or energy-saving measures substantially increases the technological and economic potential of PV in these areas. This is true for both industrialized countries and developing countries.

- As described earlier, PV technology is rapidly evolving. Substantial improvements in both technological performance and cost reduction are expected.

- The theoretical potential of solar energy is enormous. PV has very few physical utilization limits. With reasonable PV efficiencies available in the very short term, surfaces available for PV would be more than enough to meet the whole electricity demand in both industrialized and developing counties.12 The main missing element is a means of storing electrical energy. This will be needed to balance supply and demand patterns, both day/night and summer/ winter. In the very short term, the storage problem could be overcome by appropriately using other energy sources such as hydroelectric dams. In the long term, hydrogen would seem to be the most likely storage medium and carrier for PV energy. Thus, there are no major long-term resource or technological constraints to PV diffusion. The main factors that will limit the speed of PV expansion in the energy market are economic ones.

Given these premises, some plausible scenarios up to 2050 are presented in the next part of the paper.13 Other assumptions have also been incorporated in these scenarios:

- only electricity production has been considered;

- no cost-effective storage means is available (prior to 2050);

- PV electricity introduced directly to the grid never exceeds 10 per cent of total annual electricity demand;

- from 2010 on, the PV electricity production cost is assumed to be comparable with those of other renewable (and non-renewable) electricity sources.

2000

At the turn of the century, PV diffusion is likely to be strongly limited by economic constraints, because it will still have to compete with much cheaper energy technologies. Crystalline silicon technology is still likely to dominate the market, although the implementation of the world's two biggest planned PV power plants (150 MWp in China and 100 MWp in the United States) will certainly give a great impetus to amorphous silicon technology. Other thin-film technologies will still be in the very early stages of commercial production.

PV module production will still largely be restricted to industrialized countries. Only system assembly and maintenance steps will be locally performed in developing countries, almost totally for rural electrification purposes (with the exception of China's 100 MW central power plant project). In Europe, applications will shift from demonstration plants and remote systems to decentralized, grid-connected systems. This will occur as building-integrated systems prove to be fully feasible and more attractive than other systems. This is also likely to happen in the United States. Moreover, the big PV power stations planned for the United States will demonstrate the value of PV for supplementary power production during peak hours of daytime demand.

Overall installed PV capacity will be very limited by 2000. A 15 per cent yearly mean market growth would imply a worldwide installed capacity of 1 GWp. This should be considered as the lower-limit, "business-as-usual" (bau) case. It should be noted, however, that, if proposed R&D policies were fully implemented and all environmental and social costs were fully taken into account, a capacity level of 5 GWp would be possible in Europe alone (TERES 1994). Extrapolating this value for the entire world would14 imply a potential total worldwide installed PV capacity of 50 GWp. Although this is unlikely to happen, it gives an idea of the magnitude of the gap between present "business-as-usual" patterns and an alternative future pattern in which all environmental burdens are accounted for.

2010

By 2010, thin-film technologies could be strong competitors to crystalline silicon technology, thus sharply reducing PV module costs and making PV much closer to competitiveness with other energy technologies over the full range of applications. This outcome strongly depends on the success of demonstration projects and on the implementation of accelerated R&D policies during the first decade of the new century. Uncertainty about this explains the gap by a factor of over 60 between the most conservative and the most optimistic fore cast values for 2010 (from 4 GWp to 265 GWp installed worldwide see also fig. 7.8).

Fig. 7.8 PV worldwide electricity production scenarios (Notes: A daily mean insolation of 4.6 kWh/m2/day was considered in all calculations, where necessary. a. TERES 1994, assuming regional solar energy demand shares as indicated by the WEC 1994; b. NREL 1990, assuming regional solar energy demand shares as indicated by the WEC 1994; c. Johansson et al. 1993, assuming a PV share in all inter. mittens renewable of 18 per cent in 2030 and 28 per cent in 2050; d as indicated in the IPCC "accelerated policies" scenario)

As electricity demand strongly increases in the developing world, solar energy demand will also dramatically rise in those regions. According to the World Energy Council scenario (WEC 1994), in 2010 Asian countries alone will account for one-third of world solar demand. At that time local mass production of entire PV systems (including modules) is likely to begin in China, India, and other South-East Asian countries. In these countries and in some regions of Latin America, PV applications will likely include building-integrated systems in highly polluted megalopolises and large power plants for big remote applications and for local grid support. In Africa the main demand will still come from rural electrification systems.

In Europe, the full implementation of R&D and environmental accounting programmes will possibly lead to the installation of a 25 GWp capacity (practically all decentralized, grid-connected systems), providing 3.4 per cent of annual electricity demand at that time (TERES 1994). In 2010, PV is not likely to have expanded strongly in the former centrally planned East European economies (including the CIS) because their priority is likely to be given to energy-saving and other infrastructural measures.

Finally, according to the NREL study, PV capacity of 9-40 GWp could be installed in the United States, depending on whether R&D programmes are implemented (NREL 1990). According to World Energy Council projections, this would correspond to about 25 per cent of the total world PV demand.

2030

In 2030, all the various PV technologies will eventually have reached a high level of maturity and be economically competitive with other energy sources.

Given their extremely high electricity demand (more than all OECD countries together), Asian countries will not only be the largest PV "consumers" (accounting for around 40 per cent) but could eventually be among the world's biggest PV producers. In those countries, PV could meet 5 per cent of total electricity demand (Johansson et al. 1993). Larger proportions could be supplied only with some large-scale storage systems (hydropower stations or hydrogen production).

Overall, developing countries are expected to account for 50-60 per cent of worldwide PV demand in 2030. The major uncertainty for 2030 regards former centrally planned East European economies. On the one hand, high electricity intensity, the need to substitute for obsolete coal and nuclear power plants, and the high technical skill of local engineers and scientists would suggest rapid and extensive PV diffusion in those countries. On the other hand, because of non optimal insolation, other competing (renewable and nonrenewable) technologies might be preferred. According to these two different scenarios, former centrally planned East European economies could account for 8-21 per cent of worldwide PV demand.

2050

In 2050, the regional distribution of PV demand is likely to be similar to that in 2030: 60 per cent of demand will come from the developing countries. Asian countries alone will be responsible for up to or even more than 40 per cent of total world demand, while PV penetration in Africa and Latin America is expected to be lower because of abundant biomass resources. Europe will account for only 5 per cent of demand because of non-optimal insolation and land constraints. Japan will account for 3 per cent. The rest, with some degree of uncertainty owing to factors mentioned earlier, will mainly be shared between the United States and former centrally planned East European economies.

In table 7.5, PV electricity production figures for different countries are reported from the "Renewables-Intensive Global Energy Scenario" (RIGES - Johansson et al. 1993), assuming a 28 per cent PV share in total intermittent renewables (all solar for electricity production and wind).

Table 7.5 PV electricity production in different world regions in 2050

Countriesa

Yearly PV electricity production (TWh/y)

Share of electricity demandb (%)

Western Europe 121 5
United States 332 10
Canada 62 12
Japan 68 9
Australia 16 10
Total OECD countries 599 9
Former centrally planned European economies 539 10
Total industrialized countries 1,139 9
Latin America 92 3
Africa 59 3
Middle East 168 10
China & planned economies 623 10
South/East Asia 621 10
Total developing countries 1,562 8
Total world 2,701 9

Source: adapted from Johansson et al. (1993) assuming a PV share of 28 per cent in total intermittent renewables.
a. Classification of OECD, industrialized, and developing countries as of 1995.
b. As indicated in the IPCC "accelerated policies" scenario,

Interestingly, all scenarios for 2050 (see fig. 7.8) forecast a world total installed PV capacity of between 1,000 GWp and 2,000 GWp. The electricity produced would then be of the same order of magnitude of 10 per cent of world electricity demand (3,075 TWh/year according to the IPCC "accelerated policies" scenario - see fig. 7.7).

Although this is a significant figure for PV diffusion in 2050, it should be not taken as an upper limit to PV expansion in the future, mainly because by that time the direct input of electricity from an intermittent source into the grid will no longer be a major technological issue. As pointed out by Johansson et al. (1993), the contribution of total intermittent renewables (all solar and wind) to total electricity demand will be locally very high (up to 37 per cent) in 2050. This will be possible owing to two factors. First, wind and solar are independent, not correlated, intermittent sources. By 2050 advanced electricity network optimization methods will be available that will allow the maximum contribution to be achieved from these intermittent sources together. Second, additional great flexibility will be guaranteed by advanced natural gas and coal combined-cycle turbine power plants for peak generation, which are able to adjust output quickly and which will be the best complement to intermittent renewable energy technologies.

Thus, although a 28 per cent share for PV in total intermittent renewables is significant, larger percentages are in principle possible. In fact, whereas wind and solar thermal stations (for electricity production) are most suitable for mid power generation in isolated areas (>100 kWp), PV systems are the only renewable technology likely to be used for electricity generation in urban areas. Given the potential for roof-integrated systems in OECD countries (van Brummelen and Alsema 1994), a relevant fraction of the total PV systems could come from roof-integrated systems. Moreover, the coupling of PV building integrated systems with other solar-active or solar-passive and/or energy-saving measures, and the fact that power is supplied where and when needed, substantially increases the attractiveness of PV systems compared with solar thermal and wind systems. This holds for both industrialized and developing countries. These two factors (not taken into account in the previous scenario) could lead to even higher shares of PV in total intermittent renewables, thus leading to higher PV penetration, as indicated in figure 7.8.

Finally, by the middle of the twenty-first century, electrolytic hydrogen production from intermittent sources is very likely to be a well-established and mature technology. This would definitely solve the storage problem of solar produced electricity. This is not likely to happen before 2030 because of the lack of the huge hydrogen storage and transportation infrastructures needed, and because hydrogen would eventually be mainly produced by much cheaper steam reforming of natural gas and biomass.

In 2050 however, large-scale hydrogen diffusion infrastructures will begin to appear, and advanced and efficient hydrogen storage methods will be available.15 Of course, other advanced electricity storage means, from advanced electrical batteries to superconductivity, could also be available at that time. With such storage systems, there would be no more technological limits to PV expansion.

Concluding remarks: PV and eco-restructuring

Today, major economic constraints limit the diffusion of PV in the world energy system. However, it is argued that this renewable energy technology will play a major role in the eco-restructuring transition leading towards a sustainable energy system for the twenty first century.

First, PV is fully compatible with the long-term targets of such a sustainable system. It is environmentally benign, because it uses the sun as a fully clean source. It is fully compatible with a decarbonized system using electricity and hydrogen as energy vectors. A major part of PV systems will be installed on surfaces already occupied by buildings (the theoretical potential of PV on rooftops alone could satisfy up to one-third of world electricity demand), thus significantly limiting the main environmental impact of PV, namely the occupation of land. Other indirect environmental burdens (i.e. generated during module manufacturing) are already low and will decrease with future PV technologies. PV will be economically compatible in the long term, because module and installation costs will decrease, as a result of technological innovation and economies of scale. It is a socially compatible energy technology, because it has a wide range of applications and involves a wide set of actors and users. Owing to some unique features, such as modularity, flexibility of use, silent and clean use, it has hardly any problems of public acceptance (even fewer than for other renewables, e.g. wind). Moreover, PV is geopolitically compatible. The sun is a "shared" primary energy resource throughout the world. Most developing countries have excellent potential for the direct use of solar energy. The majority of them have higher insolation than world average values and large areas (e.g. deserts) suitable for solar panels. Today, PV modules are produced almost entirely in industrialized countries, but in the future developing countries (particularly Asian countries) will be both major users and producers of PV.

Second, PV is very open to innovation and technical change. The key feature of PV is its extraordinary flexibility in terms of technological options for different PV devices, and in terms of the wide range of applications. In contrast with other energy technologies, PV involves not only utilities but also many other interested actors, from energy distribution companies, to architects, up to final users. PV is strongly oriented towards the delivery of energy services, particularly as far as applications in buildings are concerned. In fact, building integrated PV systems can also act as energy-saving systems (e.g. as sun-shading devices) and as small co-generation systems. Furthermore, PV in buildings has great synergy with other solar-active and solar-passive energy technologies, with energy-saving measures, and also with demand-side management.

Finally, PV is fully compatible with hydrogen energy technologies. The solar-hydrogen energy technology cycle is the most likely target for a sustainable energy system for the mid-twenty-first century. The cycle includes the direct use of solar energy, the electrolytic al production of hydrogen, the use of hydrogen as a chemical energy storage means and as an energy vector, and the eventual re-electrification of hydrogen by means of fuel cells. It is a fully clean cycle that uses electricity and hydrogen as energy vectors and that is capable of providing all energy services needed. The use of hydrogen as a means of energy storage is the final solution to the intermittent nature of the solar primary energy source, and virtually eliminates the ultimate technological limit of PV.

By 2050, PV is likely to supply about 10 per cent of world electricity demand. Most importantly, however, PV is open to a lot of other benign energy technology options. PV is consistent with all sustainable energy patterns and has no real long-term limits on its exploitation potential. It will therefore play a major role in the eco-restructuring transition and in the world energy system of the second half of the twenty-first century.

Notes

1. The PV cell conversion efficiency is normally defined as a ratio:
(electric power produced by the cell)/(light power arriving on cell surface under standard conditions)
The standard conditions are: air-mass (AM) = I (no clouds); temperature (T) = 25░C; incident light power density = 1 kW/m2.

2. The energy payback time is the time required for the energy system to "repay" the energy needed for its construction.

3. As far as quantitative results are concerned, it was assumed that PV substituted for electricity produced by the European mix of supply sources, and the thermal energy recovered substituted for heat produced by natural gas.

4. Including consumer indoor applications and large tax-subsidized grid-connected government demonstration projects.

5. Prices in constant 1994 US$.

6. This was announced at the 1st PV World Conference, Hawaii, December 1994.

7. For 1 ECU = US$1.2.

8. The potential for this application sector has been estimated at 300 MWp for Switzerland alone. This potential market is five times the present total world PV market.

9 Summer electricity consumption due to air-conditioning systems has increased heavily in recent years in both industrialized countries and developing countries. To mention just a few European cases: Greece's newly installed air-conditioning capacity increased nine-fold between 1987 and 1990 while in Italy, Spain, and Portugal the use of air-conditioning has been growing at a rate of 20 per cent per year (Ambiente Italia 1995).

10. Assuming 1,800 kWh/m2 annual average insolation and a 6 per cent real discount rate. In the longer term, some thin-film or concentrator technologies can be expected to supply electricity at 3.5-7.0 cents/kWh (Kelly 1993). PV electricity costs of course depend on several factors, some of them being technology specific (module and system efficiencies, lifetimes, and installation costs), others being site specific (insolation) or economic, such as capital cost discount rates.

11. Many of these issues also require an international cooperation effort (never before seen) to define international standards and rules tackling global environmental issues.

12. It is worth remembering that, within OECD countries, the average per capita available surface on roofs alone has been estimated to be 10 m2 (van Brummelen and Alsema 1994). Were such an area available for every person worldwide, even with present PV technology available on the market today, this would correspond to an installed capacity of around 5,500 GWp and yearly electricity production of about 9,300 TWh/y. This value exceeds present total world electricity demand.

13. Several other scenarios were taken into account and adapted to extrapolate worldwide PV diffusion WEC (1994), TERES (1994), NREL (1990), Johansson et al. (1993). The mean installed PV capacity was always calculated from annual electricity by considering a daily mean insolation of 4.6 kWh/m2/day.

14. By assuming regional solar energy demand shares as indicated in the WEC (1994) scenario.

15. Hydrogen storage is currently the major technological issue in hydrogen energy technology.

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