In the Scattered Light of the Russian Sun. Russian Manufacturer of Solar Modules Hevel Modernized Production and Took Half of the Russian Solar Energy Market
In July of this year, Hevel Group, the largest Russian manufacturer of photovoltaic panels, completed the modernization of production and reached the planned capacity of 160 MW per year. The Russian manufacturer is certainly not as big as Chinese factories, which produce panels for more than 1 GW per year, but Hevel also has different goals. Its products are of higher quality and more reliable than Chinese ones, they are more efficient, but most importantly, panels manufactured by Hevel keep operating in scattered light, which is a very important advantage in our not so sunny country.
Hevel is a joint venture of RUSNANO and Renova Group, established in 2009 as an integrator of solar energy solutions. Hevel is engaged in the production of panels and their installation, and maintenance of photovoltaic power plants. As of today, Hevel Group has a fleet of photovoltaic power plants with a total capacity of more than 100 MW and a large scientific and technical centre.
The main industrial site of Hevel is located in Novocheboksarsk, Chuvashia. This is the largest plant in Russia that produces solar modules based on the domestic technology. The company has developed a technology of new generation solar module production based on heterojunction technology (HJT), combining the advantages of two old technologies—thin-film and crystalline. This technology allows producing panels with a cell efficiency of more than 22%. Only two more companies in the world can do it—Panasonic (Japan) and Sun Power (USA).
A Special Way
Eight years ago, when Hevel Group was created, there were two effective technologies of production of silicon-based solar modules in the world: based on crystalline silicon and thin-film, using the so-called amorphous silicon. The advantage of the first technology is in the relatively high efficiency, the second one is advantageous since the module production required far less amount of silicon. And silicon is the main component that determines the cost of the final product and, accordingly, the economy of the future photovoltaic power plant (PPP). As a result, the cost of a watt of electricity received from a module created based on film technology is lower compared to the modules based on crystalline silicon. In addition, thin-film technology is better suited to Russian conditions, since such modules better perceive scattered light.
Hevel Group relied on the thin-film technology, and even then it was an attempt to go its own way: almost all PPPs in the world use panels based on crystalline silicon.
The thin-film technology lost its competitive advantages by the middle of the decade as a result of the high efficiency of the modules based on crystalline silicon and the sharp drop in the cost of silicon, which began in 2009. Hevel Group also faced a choice between: further development of the thin-film technology or transition to a new one. But termination of production was out of the question: more than 20 billion roubles had already been invested in the plant by that time.
This money could be in principle recovered on thin-film technology through ensuring the construction of larger photovoltaic parks.
Investors in the solar energy almost all over the world have quality investment return mechanisms, and Russia is no exception. The existing mechanisms of capacity supply agreements (CSA) for renewable energy sources (RES) make it possible to close the market from foreign products and create comfortable conditions for the repayment of funds invested in power. For example, now in Russia, the terms and conditions of CSA for RES provide for fifteen years of guaranteed cash flow at 12% per annum on invested capital. The mechanism of return on investment is similar to a standard CSA: the investor builds the plant, and the regulator guarantees payments to the investor while observing the installed capacity utilization factor (the so-called capacity payment). CSA for RES is quite an interesting tool, considering the current interest rates in the market.
In 2017, the Ministry of Energy determined that the cost of a kilowatt of installed capacity at PPP would be compensated to investors based on the rate of 109.5 thousand roubles. For example, wind, according to the Ministry, costs 103 thousand roubles, while hydroelectric power costs 163 thousand roubles per kilowatt of installed capacity. It follows from the figures that a kilowatt of installed capacity of solar and wind generation is already cheaper than classical water. However, it is necessary to take into account the so-called installed capacity utilization factors (ICUF).
In Russia, ICUF of photovoltaic power plants is no more than 10%, wind power plants—about 20%, hydroelectric power plants—40%. That is, on average, the HPP will generate four times as much electricity as the PPP of the same rated capacity generates.
Bet on Modernization
Hevel had its own strategy of sequentially increasing the efficiency of thin-film modules to 12-13%. Since 2010, its own scientific and technical centre has been working thereon, but considering the pace of development of solar technologies, this was not sufficient to enter foreign markets. The scientists’ proposal to introduce a new, hybrid technology that showed high results in laboratory studies was the way out. A strategic decision to invest additional funds in modernization was made. As a result, the plant was re-equipped, and the project got a second wind due to the change of technology from thin-film to heterostructure-based—photovoltaic technology, the industrial use of which was made possible by Russian specialists.
However, the availability of laboratory prototype showing promising results and the introduction of this technology in production are absolutely different things. To do this, it was necessary to rebuild the process, order new equipment (sometimes unique), expand the industrial site. And the problem was not only the lack of technical resources in Russia for the development of production. There was also no methodological procedures in our country: no SNiPs (Building Codes and Regulations), GOSTs (State Standards) and other regulatory documents for the production and maintenance of photovoltaic panels. As a result, we had to create them. In fact, together with Hevel Group, the whole market for production and maintenance of photovoltaic modules unprecedented for our country was created.
The second stage of production modernization which started in 2016 affected about 30% of equipment and required about 3.8 billion roubles of investment. By the way, the Industrial Development Fund (IDF), which allocated 300 million roubles as a soft loan at 5% per annum for a period of five years was one of the investors of the project. “The funds of the IDF partially covered the costs for the purchase, installation and adjustment of technological equipment,” Roman Petrutsa, director of the IDF, says.
Modernization began in August 2016, and an industrial output of modules based on the new technology was arranged as early as in April 2017 in Novocheboksarsk. Hevel Group does not disclose the cost of the modules being sold, but one can guess how much the company can gain from its activities. For instance, the Ministry of Energy gives 109.5 thousand roubles per kilowatt of installed capacity. Say, a quarter of this money is used for survey and installation works. This means that the sale of 160 MW of solar modules per year may result in revenues of about 13 billion roubles. The increase in the plant capacity to 220 MW will help to get about 18 billion roubles. According to Igor Shakhray, CEO of Hevel Group, the production site has quite a successful business model now, and investments are expected to pay off within four years.
From Large Generation to Small One
Heterojunction-based solar modules manufactured by Hevel effectively operate in the scattered light and at extreme temperatures (from -40°С to +85°С), which significantly expands the area of their application — from sunny but frosty Yakutia to desertlike Saudi Arabia. The guaranteed life of the module is twenty-five years, but the manufacturer promises that the solar module will serve even longer: three to four decades. “Our photoelectric module is reliable, highly efficient and stably operates in scattered sunlight; it has a low temperature coefficient and a high cell efficiency of more than 22 per cent,” Igor Shakhray says.
In addition, according to Hevel, the production of solar modules has a local content of 100%. However, interpretation of localization in the Russian legislation is point at issue. In practice, a part of the components for Russian solar modules is still purchased by Hevel Group from abroad, the other part is produced in Russia. Nevertheless, high efficiency, price and temperature characteristics make Hevel module quite competitive product in the global solar energy market—along with the best analogues.
Today, two large markets for RES use in the world may be conditionally distinguished. The first one consists of subsidized large energy programmes, when the costs for establishment of green energy generation facilities are paid off due to the wholesale capacity market and state subsidies. This means that capital costs for the construction of solar power generation facilities are returned through capacity payments, which are distributed to all industrial consumers of the so-called price zones of the energy market. The second large market includes the independent electric power sources required to supply electric power to various consumers: from small villages located far from the main power lines and ending with aircraft, copters, traffic lights, terminals, etc. The cost of the module at the relevant parameters is of primary importance for the first market, i.e. the state sets certain requirements for PPP (efficiency, localization level, ICUF, etc.), and the PPP operator must ensure all this at the lowest possible price.
Efficiency, cost of the watt of electricity produced, temperature coefficients, efficiency during dimming, and other parameters that describe the operation of the panels in certain weather and climate conditions are important for the second market. One can pay extra money for the specific parameters of the plants - as long as the panel performs its functions. Naturally, modules with high efficiency are more expensive than a “standard” product. And the products manufactured by Hevel fully correspond to the best world characteristics and thus are suitable for both PSA mechanisms and for self-contained electric power supply, i.e. for private use.
When Exports Are Unfavourable
Speaking about the development prospects, there are two directions in Hevel. The first consists in the expansion of production from the current 160 to 220 MW per year. “We have started the process of increasing the additional capacity and we plan to boost the plant to 220 MW at least by mid-2018,” Igor Shakhray hopes.
Export is the second direction. The company is ready to sell about 10% of the produced solar modules abroad; it can carry out the first overseas supplies as early as by the end of this year. The company has not yet provided any information about the countries with which it is negotiating; however, according to Igor Shakhray, the Middle East, Africa,
Central America and Europe are promising areas. But the company is interested not only in the supply of modules, but also in participation in tenders for the construction of photovoltaic power plants.
Nevertheless, Russia is the main sales market for Hevel solar panels: all the company’s products go to the domestic market at 100% capacity utilization. The current portfolio of projects amounts to 434 MW, of which 100 MW of plants have been already introduced, i.e. the plant is guaranteed to be given orders for the next three years. According to the estimates of the company itself, it claims at least 50% of the Russian solar energy market and intends to introduce up to 1 GW of solar power generation in the country by 2022 out of 1.7 GW, which the Ministry of Energy wants to have. Considering that at the beginning of this year, PPPs with the capacity of 75.2 MW (0.03% of all capacities) were connected to the unified power system of the country, the spurt that the Russian alternative energy sector will make is impressive.
To implement an ambitious plan, the structure of Hevel Group includes an engineering division that ensures construction and maintenance of photovoltaic power plants. The PPP maintenance process is completely non-labour-intensive and requires only remote administration and preventive inspection once a year. In fact, the operator of a photovoltaic power plant is rather a financial organisation than a production one.
And this is not a whim. Such a complex project as that of Hevel Group could be implemented only in an integrated manner, i.e. due to a full cycle—from purchase of silicon wafers to receiving the final payment for the installed capacity. As the experience of other companies in the Russian market shows, it is still very difficult to work under a different scheme.
What Is a Solar Module and What Is Built of It?
Solar module with dimensions of 1x1.67 m is a base product of Hevel Group. The rated capacity of this module is 300-310 W. Power plants, from small ones (for several tens of kilowatts) (mainly for the façades of buildings) to large solar energy facilities (for several tens of megawatts) are built using a set of these modules.
The base module accommodates 60 photovoltaic cells made of single-crystal silicon wafers based on heterojunction technology. It combines the advantages of classical silicon technology (thin-film and crystalline) and ensures efficient operation of the module at high and low temperatures, as well as in the scattered light.
Photovoltaic power plants have a number of advantages which make them positively different from other power generation sources: first, photovoltaic power plants (PPP) operate during the day and can cover the daily peak of electricity consumption, i.e. they can generate the most demanded energy. Second, they have such an important quality as instant switching on and off from the network. That is, PPP can act as a manoeuvring capacity, which also gives it a significant competitive advantage. And third, PPP causes minimal damage to the environment compared to all types of power generation facilities.