Value Chain Analysis of the PV Market in Pakistan Project "Pakistan Solar Quality Potential"
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Value Chain Analysis of the PV Market in Pakistan Project “Pakistan Solar Quality Potential“ Bundesverband Solarwirtschaft e.V. (BSW-Solar)
Content Project “Pakistan Solar Quality Potential“ The value chain analysis • Energy situation & key stakeholders for PV development • Key actors in the value chain • PV import data • Feedback from interviews & market research • Market segments & perceptions • Business environment for German PV companies • Target segments for German PV companies © BSW-Solar
German Solar Association: 3 TASK To represent the solar industry in Germany in the thermal and photovoltaic and storage sector VISION A sustainable global energy supply provided by solar (renewable) energy ACTIVITIES Lobbying, political advice, public relations, market observation, standardization EXPERIENCE Active in the solar energy sector for over 30 years REPRESENTS More than 800 solar producers, suppliers, wholesalers, installers and other companies active in the solar business from all over the world HEADQUARTERS Berlin Wholesale Project Con- System Equipment Materials & Distri- Develop- structi O&M components bution ment on © BSW-Solar
BSW-Solar: Working world wide to improve frameworks for the use of solar energy! Partnerships, Market reports, esp. Partner countries in business networks “Enabling PV” “PV FINANCING”
Objective To achieve a sustainable quality demand of PV products, through the improvement of the capacity building of local institutions helping them to achieve an organizational structure that allows them to continue with the dissemination of quality standards and norms in Pakistan • Duration: August – December 2016 • On behalf of the GIZ • Partners: Pakistan Solar Association © BSW-Solar
Project activities & outcomes Analyze the Identification of the PV value chain of market potential & the PV in Pakistan needs of local stakeholders Development of a Target group of the trainings are training concept & installers and of the awareness awareness campaign are the end customers campaign The pilot region is Lahore. Identification of Nevertheless, the training material the key will be generic and able to be used multipliers for in all the country dissemination © BSW-Solar
Project activities & outcomes To qualify key Pakistani Conduction of multipliers for the application trainings of the standards and norms. Focused on installers. Strength Bringing together relevant cooperation stakeholders including training between institutions and industries in both Pakistan & countries Germany & disseminate the results with relevant stakeholders in both countries © BSW-Solar
Methodology of the study Compilation & review of published data/statistics on solar PV Identification of the key value chain actors Development of customized supply chain questionnaire Interviews were conducted with key solar PV value chain actors Results based on interviews and complemented with statistics and available market data
Solar irradiation levels - Pakistan High irradiation levels Across the country (4.5-7.0 kWh/m2/day) In particular: Punjab & Sindh provinces: 4.5 – 6.0 kWh/m2/day High PV potential in both rural and urban areas. Industry concentrated in Punjab & Sindh provinces. © BSW-Solar
Power sector in Pakistan: installed capacity RE Nuclear Thermal Hydro 21,257 MW 23,167 MW 23,302 MW 23,617 MW 24,953 MW 25,255 MW 26,197 MW Share of RES steadily increasing each year 1136 MW of RES installed by 2016, mainly PV, wind and micro/mini hydropower 2010 2011 2012 2013 2014 2015 2016 RE 50 106 408 1136 Nuclear 462 787 787 787 787 787 1.127 Thermal 14.240 15.753 15.888 15.852 16.963 16.963 16.814 Hydro 6.555 6.627 6.627 6.928 7.097 7.097 7.121 Source: CPPA, NEPRA and AEDB
Power sector in Pakistan: supply & demand scenario Capacity Availability Demand The power deficit was near 5 GW in 30938 summer 2016 27600 Multiple power generation projects 25080 26590 from various sources are currently 23107 in the pipeline and are envisaged to 21599 25961 eliminate the power deficit by 2019 24262 - if expected projects are 18738 completed on time 19917 18262 17107 PV based projects can play a key 21096 role in the elimination of the power deficit, particularly in the industrial 17500 and residential sectors. 14121 Source: MoWP
Power sector in Pakistan: higher demand in the domestic & industrial sector Increase of 11,000 GWh in the last 5 years, specially in the domestic and industrial sector Source: Pakistan Energy Yearbook 2015 © BSW-Solar
Rationale for PV development Significant and increasing energy demand in the country Policy on FITs (Feed in tariffs) catalyzing project development Introduction of net metering Introduction of import quality standards Financing available for PV
Key stakeholders for PV development
Other stakeholders for PV development • PSA (Pakistan Solar Association) : National trade body of Pakistan’s PV industry. The association represents and promotes PV businesses in the country • REAP (Renewable Energy Association of Pakistan): Non-profit organization currently representing 400 members with the aim to promote renewable energy sources in Pakistan • International donors/technical assistance programs BMZ (German Ministry of Economic Cooperation) GIZ (implementers on behalf of BMZ) KfW bank ADB (Asian Development Bank) USAID (United States Agency for International Development) JICA (Japan International Cooperation Agency) ADB (Asian Development Bank) European Commission World Bank UNDP (United Nations Development Program) UNIDO DFID
PV Value Chain Actors
Trend of import of PV panels: Oct’14 - Sept’15 vs. Oct’15 - Sept’16 Chinese PV panels have the highest share of imports into Pakistan which has increased between 2014 and 2016. This is attributed to price competitiveness with similar products from other countries, extensive customer outreach through dealership networks and a large variation in product quality/pricing which caters to different economic classes of customers. 0.40% (4 MW) 0.53% (5.4 MW) China 1.39% (14.1 MW) 0.22% (1.1 MW) 0.21% (1.1 MW) China UAE 0.62% (6.3 MW) 1.47% (15 MW) UAE 3.20% 1.40% (7.3 MW) (16.7 MW) Germany Malaysia Korea 95.60% (975.3 MW) Germany 94.98% (497 MW) Others Hong Kong Others Oct'14 - Sept'15 Oct'15 - Sept'16 • Federal Board of Revenue (FBR), GoP, 2016 • Panel volume imported (MW) calculated based on 0.7 USD/Watt (FBR Valuation Ruling No. 620/2013)
Trend of import of inverters: Oct’14 - Sept’15 vs. Oct’15 - Sept’16 Chinese inverters have highest share of imports into Pakistan which has increased between 2014 and 2016. The reasons behind this dynamic are the same as in the case of import of PV panels i.e. price competitiveness with similar products from other countries, extensive dealership networks and a large variation in product quality/pricing which caters to different economic classes of customers. China China UAE 2.13% (39.5 MW) UK Germany Germany 2.16% (40.1 MW) 7.28% (135.1 MW) Finland Finland 20.46% (317.1 MW) 2.58% (47.9 MW) UAE Others 3.17% (58.9 MW) 2.55% Other EU 4.21% (39.5 MW) States (78.3 MW) 6.01% UK (93.2 MW) 6.93% 65.01% (1007.4 MW) (128.8 MW) 71.54% (1328.8 MW) Italy 2.86% Others (44.3 MW) 3.11% (48.1 MW) Oct'14-Sept'15 Oct'15-Sept'16 • Federal Board of Revenue (FBR), GoP, 2016 • Inverter volume imported (MW) calculated based on 37.5 USD/kW (FBR Valuation Ruling No. 751/2015) • Inverter statistics presented are for all inverters imported into country (i.e. for use with PV systems and also for use as UPS for charging only from the grid )
Trend of import of charge controllers: Oct’14 - Sept’15 vs. Oct’15 - Sept’16 High proportion of ‘Chinese’ Charge controllers being imported into the country with the same reasons behind this dynamic as those already cited above for the case of PV panels and inverters. Overall volume of Charge controllers imported from Germany has increased over the last year, although there has been a minor decrease in the market share 2.04 % (14.8 MW) 2.41 % (17.5 MW) China 6.72 % (39.4 MW) 5.83 % (42.3 MW) 3.35 % (19.6 MW) 2.60 % (18.9 MW) Germany 4.47 % (26.2 MW) 5.96 % (43.2 MW) USA 36.03 % (211.1 MW) China 32.78 % (237.7 MW) Italy 23.58 % (138.1 MW) Germany 7.02 % (50.9 MW) Other EU USA 19.37 % (140.5 MW) states Singapore UAE 25.86 % (151.5 MW) Italy 21.98 % (159.4 MW) Turkey Others Sweden Others Oct'14 - Sept'15 Oct'15 - Sept'16 • Federal Board of Revenue (FBR), GoP, 2016 • Charge controller volume imported (MW) calculated based on 37.5 USD/kW (FBR Valuation Ruling No. 751/2015)
Trend of import of deep cycle’ batteries: Oct’14 - Sept’15 vs. Oct’15 - Sept’16 High proportion of Chinese ‘deep cycle’ batteries being imported into the country with the same reasons behind this dynamic as those already cited above for the case of PV panels and inverters. Overall volume of batteries imported from Germany has increased over the last year, although there has been a minor decrease in the market share 0.49% (117.4 t) 1.81% (530.6 t) 0.98% (286.4 t) 0.47% (137 t) 1.03% (247.9 t) 3.71% 3.70% (1086.6 t) (899.8 t) 1.65% (483.2 t) 2.57% (621.3 t) China China 1.97% (475.2 t) 3.03% (888.1 t) 2.62% USA Vietnam (634.3 t) 3.24% (950.0 t) USA Vietnam 5.17% (1249 t) Korea France Singapore Korea 82.44 % Other EU 85.13% (24,970 t) (19,900 tonnes) states UK Germany Germany Others Others Oct'14 - Sept'15 Oct'15 - Sept'16 • Federal Board of Revenue (FBR), GoP, 2016 • Deep cycle battery volume imported (tonnes) calculated based on 1.72 USD/ kg (FBR Valuation Ruling No. 723/2015)
Results based on interviews and market research © BSW-Solar
PV products & service range in Pakistan imported brands available PV panels Inverters Batteries Voltronic (Taiwan) Long (Vietnam) Yingli (China) Hoppeke (German) Kyocera (Japan) Schneider Electric (French) Sacred Sun (China) Powersonic (China) Rene Sola (China) Trojan (USA) LG (Korean) SMA (Germany) ABB (Swedish- Narada (China) JA Solar (China) Baykee (China) Canadian Solar (China) Swiss) Outback (USA) JTE (China) Alfa Solar (Germany) CSB (Taiwan) Hitek (UK) Nedap (Holland) Sungrow (China) Huawei (China) Jinko Solar (China) Sunny Power (China) GH (Belgium) Baykee (China) Studer (Swiss) Inti Power (China) Trina Solar (China) Solar World (Germany) TBB Power (China) Phono (China) Fronius (Austria) Beyond PV (Taiwan) Victron (Holland) Eurener (Spain) I-Energy (Taiwan) Hanergy (China) Kaco New Energy (Germany) Shanghai Solar (China) Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.) and on market research. The list is not exhaustive and may not include all available brands. The component brands are listed in no particular order. Considering the scope of this study, it was not possible to assess the specific market share of each respective brand mentioned here. Classification of equipment into ‘Tiers’ is currently not possible, due to the lack of quality standards in Pakistan.
PV products & service range in Pakistan • Chinese products have a considerable market share of the PV market in the country with over 90 % of the PV panels and over 80 % of the ‘deep cycle’ batteries. This is attributed to the price competitiveness with similar products from other countries, extensive dealership networks and a large variation in product quality/pricing which caters to different economic classes of customers. • Considerable variation in quality and price of PV products (panels, batteries, inverters) being imported from China • There is a niche in every market sector (industrial, commercial and residential) that requires high quality and reliable PV products, particularly inverters and batteries. These elements of the market constitute the target customer group for European products. • Most existing and potential users of PV from the industrial sector in Pakistan claim to prefer European products since they are bankable and more reliable. However, currently they purchase Chinese products (PV panels and inverters) due to the high costs of the European products and the limited offer of after-sales services in comparison to the Chinese ones. * Results based on interviews with PV key value chain actors (importers, wholesalers, retailers, installers etc.) and on market research
PV products & service range in Pakistan: panels Local ‘assembly’ of panels being conducted by five companies in Pakistan. However, imported panels manufactured by reputed brands are currently preferred due to the higher reliability and trust enjoyed by foreign brands Panels Local manufacturing Local assembly Yes No Limited volumes and questionable quality Customers NOT satisfied with performance of local panels (efficiency versus price) Import of PV panels Low quality panels (low cost brands & smuggled) High quality panels (reputed brands) * Results based on interviews with PV key value chain actors (wholesalers, importers, retailers, installers etc.)
PV products & service range in Pakistan: batteries Manufacturing of AGM batteries is expected to commence soon in Pakistan with four different industrial groups setting up factories in the southern Pakistani city of Karachi: Daewoo Group Treet Group Eco Star (DWP & GREE Groups) Homage Landscape of batteries for PV systems in Pakistan Local battery Imported battery (≅60%)** (≅40%)** High quality (≅30%)** Sub-standard (≅100%)** High quality Sub-standard (≅70%) ** (High-end European, American, (Lead acid car batteries) (Yet to start manufacturing) (Low grade Chinese) Chinese) * Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.) ** Rough estimates based on feedback collected during interviews and market research. Detailed surveys are necessary to determine more accurate statistics regarding the battery landscape in Pakistan.
Results: customer awareness Question: What is the general level of ‘Customer awareness’ related to PV products in Pakistan? : Awareness scale (0 to 10) 0: Unaware 10: Aware 10% • ‘Low’ level of awareness (≤2) : 23% 23% • ‘Moderate’ level of awareness (>2≤5): 67% ≤2 • ‘High’ level of awareness (>5≤10): 10% >2≤5 67% >5≤10 Note: ‘Customers’ collectively refers to clients from the residential, commercial, industrial and public sectors Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)
Results: payback expectations Question: What are the ‘Payback expectations’ from PV products of the different customer segments in the Pakistani market? 5 years 5 years 5,0 4.5 years 4,5 4,0 3.5 years The shortest payback expectations 3,5 are for the commercial sector (3.5 years), followed by the industrial Payback Time (years) 3,0 sector (4.5 years) 2,5 2,0 1,5 1,0 0,5 0,0 Commercial Residential Industrial Public Sector Target Sector for PV Products Note: ‘Customers’ collectively refers to clients from the residential, commercial, industrial and public sectors Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)
Results: certified PV components Question: What is the proportion of ‘Certified’ PV components in the local market? Low proportion of ‘certified’ PV components available in the local market 20% 20 Proportion of Certified Components in Pak Market 18 14% 16 14 12 9% 10 8 6 4 2 0 Inverter Battery Panel Solar system components Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.) Exact statistics on the specific brands and their respective volumes being imported into Pakistan are only available with the customs authorities. However, this information is restricted and classified.
Perception of the PV market segments Industrial Commercial Typical installation size Typical installation size 1 MW – 10 MW 100 kW – 1 MW High potential industries & locations High potential segments & locations • Textile (spread across Punjab province) • Hospitals (across the country) • Sports (focused in Sialkot city) • Private educational institutions • Food industry (across the country) • Hotels & restaurants (across the country) • Pharmaceutical industry (Karachi) • General provision stores (across the country) Possible project financing models Possible project financing models • Financing through recently announced scheme for • Financing through recently announced Scheme RE project financing by State bank of Pakistan. for RE project financing by State bank of Loans being offered at 6% for solar PV projects up to Pakistan. Loans being offered at 6% for solar PV 50 MW projects up to 50 MW • Conventional financing through lending from bank • Conventional financing through lending from along with equity from project developer bank along with equity from project developer • Equity Product preferences Based on past trends, industry prefers to install reliable Product preferences and high quality components to ensure project In the past, tendency to install cheaper and less bankability. reliable quality Chinese brands. However, slowly trend moving towards increasing awareness leading SMA, Schneider and ABB quite popular in terms of to installation of SMA, Schneider and ABB due to reliability compared to Chinese products high level of reliability http://www.sbp.org.pk/smefd/circulars/2016/C3.htm Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)
Perception of the PV market segments Residential Public sector (Government funded) Typical installation size Typical installation size 1 kW – 20 kW 50 kW – 200 kW High potential locations High potential segments & locations • Urban centers (Karachi, Lahore, Islamabad, Rawalpindi, • Public hospitals & health facilities Faisalabad, Multan, Hyderabad) • Government educational institutions (across the • 40,000 un-electrified off-grid villages across the country country) • Agricultural areas across Punjab, Sindh and KPK • Public parks and recreation facilities (across the provinces owned by farmers with land holdings of different country) sizes • Public offices (across the country) Possible Project Financing Models Possible project financing models • Financing through recently announced scheme for RE • Public financing from national approved budget as per PC- project financing by State bank of Pakistan. Loans being 1 document offered at 6 percent1 for solar PV projects up to 50 MW • Grant aid from international donor agencies • Equity • Funding through donor projects in off-grid areas Product preferences Tendency remains to maximize project size within allocated Product Preferences budget. Also, ‘open’ tenders bidding mechanism based on High price sensitivity exists with niche market for ‘high awarding project to ‘lowest’ bidder results in high quality and quality’ and certified products. Large proportions of clients in durable products losing out to competitors offering lower this sector opting for Chinese products although increasing quality products interest in ‘certified’ high quality products as result of ‘lessons learnt’ 1. http://www.sbp.org.pk/smefd/circulars/2016/C3.htm * Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)
Business environment for German PV companies: opportunities & challenges Challenges Opportunities ‘Customer awareness’ for PV and the benefits of Net Metering introduced by NEPRA in Sept 2015. investing in high quality and certified equipment need To increase the share of PV and generate revenue by feeding to be increased back into the grid. Issuance of licenses for net metering has commenced ‘High Price sensitivity’ for European products compared to non-European products. Financing through recently announced scheme for RES project • Residential sector: customers willing to pay 20% financing by State Bank of Pakistan. Loans with 6% interest Industrial sector: 30 to 40% higher cost rate for solar PV projects up to 50 MW • Commercial sector:10-15% higher cost Implementation of ‘Import Quality Standards’ to be implemented soon. It will ensure reduction in ‘uncertified’ solar PV components in the market and promote quality Limited after sales’ support of European products in ‘certified’ products comparison to e.g. China. German products enjoy high level of trust and reliability in all Limited technical expertise & product knowledge on customer segments of the Pakistani solar PV market. Specially PV components leads to issues during commissioning grid tied systems for system configuration and also during operation The focus should be on Large industry (textile, sports, pharmaceutical etc.) . These industries are the mainstays of the Pakistani economy generating a high annual profit. Solar pumping applications also possess considerable potential for projects in the pipeline from the public sector in Sindh and Baluchistan provinces * Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)
Target segments for German PV products & services Products Services ‘Grid tied’ inverters for use in medium scale (100kW-1 MW) and large scale (>1 MW) grid connected projects Technical consulting services being set up by industrial and commercial sectors. (techno-economic feasibility studies, grid (Price competitiveness with comparable connection studies, support in project products from other countries will be critical) tendering process, monitoring of commissioned projects, maintenance and operation of large scale grid connected & Batteries (Flooded or AGM) medium scale PV projects) The residential, off-grid & the commercial sector installations requiring battery back up. Installed system are expected to scale EPC Companies up to use the economic benefits of net for developing both commercial sector metering and will require larger battery (kW scale) and large scale (>1 MW) grid banks. connected projects (Potential for high quality batteries exists but price competitiveness will other EPC contracting companies with a strong comparable products will be critical) profile of developing large scale projects are in high demand PV testing & monitoring equipment (battery testers, PV panel testers, PV analyzers, PV panel flash test equipment) Results based on interviews with PV key value chain actors (wholesalers, importers, installers, retailers etc.)
IEC quality standards Nr. IEC Standards Title 1 IEC 61646:2008 Thin-film terrestrial photovoltaic (PV) modules design qualification and type approval 2 IEC 61439-1:2011 Low-voltage switchgear and Control gear assemblies – Part 1: General rules 3 IEC 60947- Low voltage switchgear and control gear – Part 3: switches, disconnections, switch 3:2008+A1:2012 disconnections and fuse combination units 4 IEC: 62103:2003 Electronic equipment for use in power installations (e.g. EN 50178:1998) 5 IEC: 62930 Electric cables for photovoltaic systems (BT(DE/NOT)258)(e.g EN 50618) 6 IEC 62103 (2003-07) Electronic equipment for use in power installations Ed.1.0 7 IEC 61701:2011 Salt mist corrosion testing of photovoltaic (PV) modules 8 IEC 62116:2014 Protection against islanding of Grid (Utility-interconnected photovoltaic inverters – procedure of islanding prevention measures) 9 IEC 61683: 1999 Photovoltaic systems – Power conditioners – Procedure for measuring efficiency 10 IEC 62509:2010 Battery charge controllers for photovoltaic systems – Performance and functioning Adopted as Pakistan standard in 94th electro-technical national standards committee meeting held on October 21st, 2015. Implementation of these standards has yet to commence.
IEC quality standards Nr. IEC Standards Title 11 IEC 62093:2005 Balance-of-system components for photovoltaic systems – natural environments 12 IEC 62124: 2004 Photovoltaic (PV) stand alone systems – Design verification 13 IEC 62253: 2011 Photovoltaic pumping systems – Design qualification and measurements 14 IEC 62257 (2013) Recommendations for small renewable energy and hybrid systems for electrification – Part 1: General introduction to IEC 62257 series and electrification 15 IEC/TS 62257-9-5: 2013 (E) Recommendations for small renewable energy and hybrid systems for electrification – Part 9-5: Integrated system – Selection of stand-alone lighting kits for rural electrification Adopted as Pakistan standard in 94th electro-technical national standards committee meeting held on October 21st, 2015. Implementation of these standards has yet to commence.
IEC safety standards Nr. IEC Standards Title 1 IEC 62109-1:2010 Safety of power converters for use in photovoltaic power systems – General requirements 2 IEC 62109-2:2011 Safety of power converters for use in photovoltaic power systems – Particular requirements for inverters 3 IEC 61730-1:2004 Photovoltaic (PV) module safety qualification – Part 1: Requirements construction 4 IEC 61730-2:2004 Photovoltaic (PV) module safety qualification – Part 2: Requirements testing 5 IEC 61439-1: 2011 Low-voltage switchgear and Control gear assemblies – Part 1: Adopted as Pakistan standard in 94th electro-technical national standards committee meeting held on October 21st, 2015. Implementation of these standards has yet to commence.
IEC environmental standards Nr. IEC Standards Title 1 IEC 61000-6-4:2006 + A1:2010 Electromagnetic compatibility (EMC) – Part 6-4: Generic standards – Emission standard for industrial environments 2 IEC 61000-6-1:2006+ A1:2010 Electromagnetic compatibility (EMC) – Part 6-1: Generic standards – Immunity for residential, commercial and light-industrial applicable) 3 IEC 61000-6-3:2006 + A1:2010 Electromagnetic compatibility (EMC) – Part 6-3: Generic standards – Emission standard for residential, commercial and light industrial environments (if applicable) 4 IEC 60068-2 Environmental Testing (more than 70 standards in this series (From 2-1 to 60068-2-83) Adopted as Pakistan standard in 94th electro-technical national standards committee meeting held on October 21st, 2015. Implementation of these standards has yet to commence.
Luz Alicia Aguilar International Project Manager German Solar Association Phone: +49 (30) 29 777 88-40 E-Mail: aguilar@bsw-solar.de © BSW-Solar
You can also read