By Leoncio Montemayor, Solarplaza
In anticipation of Solar Market Parity Spain, we’re sitting down to speak to Javier Izcue, Managing Director of Sungrow Ibérica, the Iberian arm of international solar inverter manufacturer Sungrow.
Hello Javier, pleasure to have you here. Just as a quick introduction, could you briefly describe us what you do at Sungrow and what you are responsible for?
Right now, I am the Managing Director and Country Manager of Sungrow Ibérica. We are mainly developing the markets of Spain and Portugal and also help our customers with international expansions to other countries. My daily work is related to sales and business development, but I also lead the product management team, the sales team, the accounting team and the service team, in order to facilitate them working in the most efficient and practical way.
I think we all know that Spain might be the hottest market right now. How is Sungrow preparing for a second solar renaissance in Spain? What do you think is the fundamental change that is driving this?
The fundamental change is that we are not depending on an FIT scheme anymore. Now, projects are no longer dependent on a tariff. They can actually be profitable by going merchant or signing a power purchase agreement (PPA). The dropping construction costs, as well as the ever-decreasing costs of the solar panels, inverters and trackers have made this new scenario possible.
We have structured and organized our Spanish branch by carefully considering the volume of work we currently have and expect to have on the medium- to long term. We have assembled a fantastic, multidisciplinary team with some of the best professionals active in the Spanish solar market, and we enjoy the full support of our EMEA team and the company HQ in China. All in all, we think we have all the tools in place to be successful here in Spain. I don’t want to come on too strongly, but I’ll just mention that we still have some interesting vacancies running and we are looking always for motivated and talented people.
Out there, there are (myself included) many optimists talking about 2-5 GW of PV per year. Something that well, seems unreal, taking into account previous capacity additions. Do you think this is realistic? Are there any bottlenecks that the industry should be aware of?
I totally agree. This year alone, 4 GW worth of solar capacity is set to be connected, as an outcome of the recent tenders. Then, there are also some more standalone projects supported by PPAs or merchant schemes. Self consumption projects are experiencing a new boom in Spain as well, so it’s not that crazy to think that Spain will install 5GW next year. And over the coming years, if Spain complies with what it was agreed in Paris - and the government’s resolve clearly points to that - an average of 3GW per year is absolutely realistic and mandatory.
Thanks to the impressive cost decline of PV in the last years, we’ve reached an age where the whole paradigm of energy provision is being turned upside down. What used to be a passive consumer of electricity, now has the chance to fully become an active prosumer. How does self-consumption change the whole game?
This is the biggest challenge for Spain in the next couple of years. It’s a relatively immature market now, but the commercial and industrial (C&I) segment is starting to position itself strongly in self consumption arena. At the residential scale, we think the cost of the batteries have to come down in order to change the habits of the market and truly launch the energy transition.
Over the next months/years, we’ll see how the biggest utilities will have to fight to claim their place in the energy market of the future.
Self-consumption in Spain was given a boost last year with the royal decree 15/2018. Have you seen, in your multiple conversations with customers, a shift in thinking regarding energy provision? Are customers willing to go for self-consumption instead of signing corporate PPAs?
Yes, it’s true that companies have changed their mind about self consumption with this new law. Energy costs are very important to the C&I segment, so companies undertake very deep analysis and sometimes prefer a PPA, if not self consumption. It depends on a lot of factors, like the bankability of the offtaker, the running time of the PPA, and the price of course. They make their Excel tables and then make decisions based on different criteria. Banks have a lot of power too, influencing this final decision.
If you ask me, I believe self-consumption is the most sustainable way to produce and consume energy as you are literally consuming the energy where you are producing it. However, maybe the overall costs might be more expensive than other configurations, as economies of scale are usually achieved with utility-scale solar plants. What to make of this conundrum (price/sustainability)? As a corporate/industrial user, what are the key decision factors that make you go for a corporate PPA with a utility-scale solar project or a self-consumption project?
I think we should ask that question to the investors. The point here is to compare cost criteria with security criteria. If we achieve a solid balance in both, self consumption will boom globally. That’s why we think the costs of batteries have to decrease to facilitate this transition and cultural change related to energy. The PPA option allows for lower CAPEX, and for some industries this is a key point.
How is Sungrow preparing for a boom in self-consumption projects?
We are developing a very interesting portfolio related to this boom, including projects with hybrid inverters and batteries. We also have started a Joint Venture with Samsung, allowing us to offer the market’s best solutions for Utility Scale Storage and future residential uses.
We have great storage specialists in-house as well, already boasting experience related to more than 500 storage projects across the world.
What are you most excited about for Solar Market Parity Spain?
So far, we’ve always found all the events organized by Solarplaza very interesting. They offer great possibilities to learn from the market and exchange information with all the relevant stakeholders of the solar industry. The level of all speakers is also very high, making it a great opportunity to get a global overview from different organizations.
Fill in the blank. Solar energy will represent approximate of … of the global electricity mix by 2030.
Taking into accout that 74% is the estimation of renewable energy in the Plan Nacional Integrado de Energía y Clima (PNIEC) 2021-2030.