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Strategy recommendations for solar industry executives:

A transition from market followers to market makers

July 2016

 

 

Thinking even Bigger

 

The bigger value proposition is to sell a holistic solution for the marketís electricity gap: (a) a ramp-up of [X] TWh/a in a five year timeframe, on an accelerated schedule not possible from any other source, (b) an output profile collaboratively agreed upon and tailored to the priority demand requirements of the grid operator, e.g. spreading out from the peak load period, (c) geographically distributed power plants for a smoothed total contribution to the grid, (d) hybrid source combinations and complementary facilities, to buttress the PV supply, (e) for an all-inclusive, fixed price of USD [x] /kWh. The selling process has to persuade the top echelons of government, winning over the politicians and bureaucrats responsible for the decision-making.The daytime electricity gap for the country can be largely eliminated in successive phases of a market wide PV-centric rollout - a feat that has not been achievable, for the chronically deprived markets, with fossil fuels or other energy sources to date.

 

What are the compelling reasons for the market regulator to accept this approach?

 

Size of commitment slashes pricing: with a TWh commitment, the host country can negotiate a price that is not possible from other sources within the given timeframe. The combination of speed, price, and certainty of cost, is unbeatable.

 

Minimisation of financial uncertainty: consumers do not have to worry about bills unexpectedly rising because of the volatility of fossil fuel prices. PV offers steady bills for the consumer.

 

Complete package: instead of simply selling a bulk quantity of energy, the electricity is being delivered to best match the shape of the demand pattern specificed by the grid operator.

 

Grid readiness: The contractor will not only arrange technology upgrades but also the training of the grid operator to manage the large renewables penetration.

 

Project financing capital: a comprehensive risk management strategy, interactively planned with the debt financiers and market regulators,will reduce the cost of debt in the project financing.

 

Local content: local industry will be built up in a more carefully staged manner, with less risk of dysfunctional investment.

 

Simplified implementation: the government can rely on a single, focused implementation plan to close the electricity gap.

 

Transparent objective and progress for public approval: most importantly, the government will be able to show a clear progress path to the public, with transparent accountability and empowerment of the contractor, well defined milestones, and goals that can be easily understood and appreciated by anyone.

 

There is nothing technically or economically impossible in the above.The strategy can be pursued with currently available and affordable means.The solar industry has to shift gears in educating the decision-makers, collaborative planning, and diligently organising the fulfillment.

 

 

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