Sunlit waters: how floating solar PV can help turn the tide of carbon emissions

• 1 year, 5 months ago (2022-11-02)
• Junior Isles

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By Gaurav Singh , Acuity Knowledge Partners

The urgency to curb global emissions and for nations to diversify their energy sources has shifted the world’s attention towards renewable energy – solar and wind. Several countries have made significant progress in shifting from fossil fuels to renewable energy sources. Global solar capacity has doubled in the past three years, bringing the solar fleet to 1TW of capacity as of April 2022. But as solar installations continue to grow exponentially, concerns are likely to rise about land use, limiting the scope for solar adoption in small countries and countries with hilly terrain. Depending on the specific technology, a utility-scale solar power plant may require 5-10 acres/MW of generating capacity, according to the Solar Energy Industries Association (SEIA).

To overcome this challenge, which pits land used for agriculture and other economic activity against that used for energy generation, countries with high population density, especially those in Asia, are shifting their focus to floating photovoltaic (FPV) systems, which use water surfaces that do not serve an ecological, economical or recreational purpose. FPVs not only avoid conflict related to land use, but also improve the performance of solar projects, reduce costs associated with waterbody maintenance and convert underused space into revenue-generating space. FPVs are likely to make inroads mainly in markets where land is scarce and available at a premium.

Governments play a key role in encouraging investments in FPV

Governments have to take the lead through instruments such as higher feed-in tariffs (FITs), financial incentives and subsidies to make FPV projects appealing to utilities, private players and financial institutions. Incentivising emergent renewable technology has proven its worth with FITs boosting the growth of conventional onshore solar PV generation in many countries.

For example, Vietnam’s Ministry of Industry and Trade introduced a FIT scheme for an on-grid utility-scale solar plant installation in 2017 that included FPV projects. Its latest draft indicates the new FIT for FPV projects will be 8.5% higher than that for ground-mounted PV panels. Similarly, Taiwan applies specific FITs for FPV plants that are higher than FITs for ground-mounted PV systems. In 2021, the FIT for ground-mounted PV projects was NTD3.7236 per kWh, whereas for FPV panels, it was NTD4.1204 per kWh.

Governments should strive to develop a FPV power generation plan that offers more financial incentives to companies willing to invest in facilities that require expensive power-producing equipment.

Asia takes the lead in floating PV

In 2021, the floating solar market was dominated by Asia Pacific. The region leads the penetration of floating solar panels as, in some nations, there is a shortage of suitable land or intense competition for land with a fixed supply of fossil fuels. As a result, to meet the growing need for electricity while minimising environmental harm, Asian countries are transitioning towards renewable energy, with FPVs being a new addition. China is the leading international market in terms of FPV installations and will likely continue to dominate over the next five years, followed closely by India and South Korea. China recently commissioned the world’s largest floating solar power plant of 320 MW in Shandong province.

India, another highly populated country with a shortage of suitable land, is also making significant progress in terms of FPV installations. It had 1.8 GW of floating solar power in different phases of construction and approximately 170 MW of operating floating solar energy in 2021, according to the Council on Energy, Environment and Water (CEEW). The country is building a 600 MW FPV farm at the Omkareshwar Dam on the Narmada River in the state of Madhya Pradesh and expects to complete it by 2022-23. India undertaking the G20 presidency next year presents a new opportunity to accelerate the deployment of renewable energies including FPV.

Other Asian countries including Indonesia, South Korea, Taiwan and Vietnam have also either executed large-scale FPV projects or announced pipelines of projects for the coming years. South Korea is developing the world’s most ambitious FPV project of 2.1 GW capacity near the Saemangeum marshes on the Yellow Sea coast, which once complete, will be part of a power generation project of up to 3 GW.

At a global level, installed floating solar power capacity has grown more than a hundredfold across 35 countries; reaching over 4 GW of capacity in 2022. The Netherlands and France lead FPV installations in Europe, where solar developers face competition from the agricultural sector for land use.

Global FPV demand: leading markets, 2020-26E

Source: Wood Mackenzie Global Solar Markets Service

Lack of maturity holds back the FPV sector

Despite the overwhelming benefits associated with FPV, it accounts for only 0.5% of solar PV installations globally. This is because the benefits are offset by obstacles such as increased costs, varying water levels and extreme climatic conditions, poor project design and the deep technical due diligence required.

FPV plants are currently 20-25% more expensive to install than their ground-mounted counterparts. In addition, the lack of design standards, guidelines and legal regulations further accentuate the risk associated with FPVs, especially in marine environments. Inadequate designs and poor-quality materials can also risk water contamination during plant construction and operation.

Stakeholders need to step up to make FPV a viable clean energy alternative

In conclusion, there is a need for solar energy firms to come up with cost-effective FPV solutions and for governments, regulators and utilities to support national, regional and international frameworks that incentivise the construction of FPV infrastructure. It is a painful irony that climate change is putting ever more pressure on agricultural output but that onshore PV is only adding to that. The expansion of FPV capacity has the potential to speed the global transition to Net Zero whilst reducing competition for finite land resources.

Installed in appropriate locations, with the correct environmental and operational safeguards, it is clear the FPV is a “win-win”. It’s time for investors, governments and others to seek sunlit waters.