Periodic Reporting for period 2 - Solar Bankability (Improving the Financeability and Attractiveness of Sustainable Energy Investments in Photovolatics: Quantifying and Managing the Technical Risk for Current and New Business Models)
Reporting period: 2016-03-01 to 2017-02-28
The overall objective of the Solar Bankability project is to reduce the risk associated with investments in sustainable energy projects. The project results should increase trust from investors, financers and insurance companies. The project aims to establish a common practice for professional risk assessment based on technical and financial due diligence. The specific objectives of the Solar Bankability project are:
1. To develop, document and establish practices for evaluating and mitigating the technical risks associated with investments in photovoltaics over the project life cycle, i.e. during development, operation and decommissioning.
2. To develop, document and establish practices for valuing such risks when modelling the costs of a PV investment as investors do when evaluating the life cycle costs of such projects.
3. To evaluate how these risks affect the electricity production and the expected return on investment in different business models.
4. To enable the key actors, and particularly the financial market actors, to widely adopt the project results as best practices for the mitigation of risk of sustainable energy investments with current and new business models.
1. To develop, document and establish practices for evaluating and mitigating the technical risks associated with investments in photovoltaics over the project life cycle, i.e. during development, operation and decommissioning.
2. To develop, document and establish practices for valuing such risks when modelling the costs of a PV investment as investors do when evaluating the life cycle costs of such projects.
3. To evaluate how these risks affect the electricity production and the expected return on investment in different business models.
4. To enable the key actors, and particularly the financial market actors, to widely adopt the project results as best practices for the mitigation of risk of sustainable energy investments with current and new business models.
The Consortium has collected a list of prioritized Technical Risks in a technical Risk Matrix. The uncertainties associated to these technical risks have an impact on the initial yield assessment and consequently on the lifetime yield prediction. The Consortium was able to assess the economic impacts of the development phase technical risks on the PV plant performance and in addition, the Consortium has developed a cost-based FMEA to evaluate the technical risk impacts on PV plant performance during operation. Ultimately, this cost-based approach allows for assessing the economic impacts of the technical risks in PV system operation on the PV plant performance, i.e. the electricity production. The resulting documented Risk Matrix, the cost-based FMEA methodology, and the evaluation of the technical risks during PV system operation are presented in the joint Deliverable D1.1/2.1 and available on the Solar Bankability project website accessible by the public.
The benchmarking and gap analysis was used to identify the parameters in the PV LCOE which are influenced by the technical risks in the PV project lifecycle as identified in the Risk Matrix. The results were used to develop and establish ways to evaluate the technical risks when modelling the PV LCOE. A snapshot of the business models in representative national PV markets in EU was given and served to understand the current climate of existing business models used for PV investment and the corresponding features and boundary conditions. The results were used to select the appropriate cases in the simulation of different business models where the impacts of technical risks on the electricity production and expected return on investment were evaluated, The country business model snapshots are presented in the Deliverable D4.1 and available on the Solar Bankability project website accessible by the public.
Once the technical risks have been identified, the focus moved to the identification of mitigation measures divided into preventive and corrective mitigation measures. Their impact was assessed in terms of reduction of uncertainty in yield assessment and in the CPN (Joint Report 1.2/2.2) and in the LCOE (Report 3.2).
The CPN methodology was linked to cash flow modelling with the creation of technical risks scenarios on 4 different business models (residential with and without storage, utility scale with central and string inverters) and the results were collected in Report 4.2.
Finally, all the key findings and main outcomes were framed in a risk framework divided into 4 phases: risk identification, risk assessment, risk management, and risk controlling (Report 5.8). The main results of the projects can thus be summarised as:
- Risk identification (Gap analysis and Risk matrix for the common nomenclature of failures with tool available on the website)
- Risk Assessment (Scenarios in uncertainty calculation of yield assessment and impact on P90/P50 ratio, CPN methodology for the calculation of the economic impact of technical risks, cash flow modelling with the inclusion of technical risk scenarios, impact of technical risks on LCOE, LCOE tool available on the website)
- Risk Management (Definition of mitigation measures divided into preventive and corrective and impact on uncertainty in yield assessment and on CPN, impact of mitigation measures on LCOE to evaluate the best mitigation strategy)
The benchmarking and gap analysis was used to identify the parameters in the PV LCOE which are influenced by the technical risks in the PV project lifecycle as identified in the Risk Matrix. The results were used to develop and establish ways to evaluate the technical risks when modelling the PV LCOE. A snapshot of the business models in representative national PV markets in EU was given and served to understand the current climate of existing business models used for PV investment and the corresponding features and boundary conditions. The results were used to select the appropriate cases in the simulation of different business models where the impacts of technical risks on the electricity production and expected return on investment were evaluated, The country business model snapshots are presented in the Deliverable D4.1 and available on the Solar Bankability project website accessible by the public.
Once the technical risks have been identified, the focus moved to the identification of mitigation measures divided into preventive and corrective mitigation measures. Their impact was assessed in terms of reduction of uncertainty in yield assessment and in the CPN (Joint Report 1.2/2.2) and in the LCOE (Report 3.2).
The CPN methodology was linked to cash flow modelling with the creation of technical risks scenarios on 4 different business models (residential with and without storage, utility scale with central and string inverters) and the results were collected in Report 4.2.
Finally, all the key findings and main outcomes were framed in a risk framework divided into 4 phases: risk identification, risk assessment, risk management, and risk controlling (Report 5.8). The main results of the projects can thus be summarised as:
- Risk identification (Gap analysis and Risk matrix for the common nomenclature of failures with tool available on the website)
- Risk Assessment (Scenarios in uncertainty calculation of yield assessment and impact on P90/P50 ratio, CPN methodology for the calculation of the economic impact of technical risks, cash flow modelling with the inclusion of technical risk scenarios, impact of technical risks on LCOE, LCOE tool available on the website)
- Risk Management (Definition of mitigation measures divided into preventive and corrective and impact on uncertainty in yield assessment and on CPN, impact of mitigation measures on LCOE to evaluate the best mitigation strategy)
In the Solar Bankability project the Consortium has succeeded in building a database of failures coming from more than 2000 expert reports for a total portfolio of more than 400 MWp. The evaluation of the impact of failures before operation was defined as an uncertainty of the initial yield assessment; for failures occurring during operation, the project partners have developed an innovative dedicated cost based Failure Modes and Effects Analysis which allows for the direct calculation of the economic impact of the failure and to assess the effectiveness of the mitigation measures. Dedicated tasks focus on disseminating the project results for capacity building among the key actors. Counting together these different kinds of engagement activities, the total number of people who should be reached by and learn from the project is targeted to be 3300. The outreach through wider media dissemination activities (press releases and public dissemination, professional/scientific publications, conference presentations) achieved during the project is well in line with the target. In addition to these, the Solar Bankability project website has registered the following statistics to-date:
· Over the two-year project period, the Solar Bankability website was visited by more than 5400 users.
· Report downloads: Deliverable D1.1/D2.1 has been downloaded 571 times, Deliverable D1.2/D2.2 233 times, Deliverable 3.1 180 times, Deliverable 3.2 126 times, Deliverable 4.1 has been downloaded 233 times, Deliverable 4.2 273 times, and Deliverable 5.8 126 times. The total number of downloads is thus well above 1500.
The primary energy substituted in 2016 thanks to the impact of Solar Bankability amounts to 5843 GWh with investments triggered around 13.7 m€.
· Over the two-year project period, the Solar Bankability website was visited by more than 5400 users.
· Report downloads: Deliverable D1.1/D2.1 has been downloaded 571 times, Deliverable D1.2/D2.2 233 times, Deliverable 3.1 180 times, Deliverable 3.2 126 times, Deliverable 4.1 has been downloaded 233 times, Deliverable 4.2 273 times, and Deliverable 5.8 126 times. The total number of downloads is thus well above 1500.
The primary energy substituted in 2016 thanks to the impact of Solar Bankability amounts to 5843 GWh with investments triggered around 13.7 m€.