Why it makes sense to combine Diesel systems with PV?

Solution for the reduction of energy production costs

of diesel electrical power stations with the support of Photovoltaic

+
Diesel Genset PV

Yakutsk - Republic of Sakha / Russia – June 2013

Why do we talk about supplementing Diesel Gensets with PV?

“Price of diesel 'hits new record

“PV system cost have gone down by
high‘. It is thought the rise will
50% within the last three years. Now,
even have a knock-on effect on
new business models become
food prices.”
attractive.”
- BBC news UK
- Intersolar Conference 2012

„By upgrading our conventional Diesel Gensets to a PV-Diesel-

Hybrid system, we save up to 450,000 liter Diesel fuel every
year.
This really provides a great business case for our company.“

- Statement from SMA project example (1MWp PV-Diesel-

Hybrid installation on a mining site in South Africa)

SMA Solar Technology AG Source: SMA 2

Agenda

1 Introduction to SMA

2 The PV-Diesel-Hybrid Business Model

3 SMA’s System Solution for PV-Diesel-Hybrid Applications

4 Why SMA?

SMA Solar Technology AG 3

1 Introduction to SMA

SMA Solar Technology AG – Key Facts

 Founded in 1981
 Sales 2012: EUR 1.5 billion
 Over 30 GW installed SMA
inverter power worldwide
 Well-positioned in 21 markets all
Headquarter
Headquarters
over the globe Foreign companies
Subsidiaries

 More than 5500 employees

 More than 1 000 professionals in
research and development

SMA Solar Technology AG Source: SMA 4

1 Introduction to SMA

Being technology and global market leader for PV inverters,

SMA serves all market segments worldwide

SMA has strong partnerships with all relevant PV stakeholders:

module manufacturers, developers, wholesalers, EPCs, etc …

All PV applications All performance ranges All module types

On-grid Residential Crystalline

< 2 kW modules

Residential
2 kW to 30 kW
Off-grid Thin film

Commercial
30 kW to 500 kW

Concentrator
Backup
Industrial modules
To > 1 MW

SMA Solar Technology AG Source: SMA 5

1 Introduction to SMA

Small and medium power class –

Complete product range for customized system design
Max. AC
SUNNY BOY/SUNNY MINI CENTRAL/SUNNY TRIPOWER Power (kW)

1 2 3 4 5 6 7 9 11 17 20
* reactive-power compatible inverter

With 240 1200 2000HF, 2500HF, 3000HF 3300, 3800 4600A 5000A 6000A 7000HV-11*
transformer

UL-listed
240US 2000, 2500, 3000US 3000, 4000,
5000, 6000, 6000,7000, 9000,10000,
3000HFUS 4000US 5000TLUS
7000, 8000US 8000TLUS 11000TLUS

1300TL 1600TL 2100TL

2500TLST 3000TLST 6000,7000, 9000,10000,
8000TL 11000TLRP*
Without
transformer
3000TL 3600TL 4000TL 5000TL

10000TL,12000TL, 15000,20000TLEE
15000TL,17000TL*

5000TL 6000TL 7000TL 8000TL 9000TL

8 Due to the wide product range SMA string inverters fit to all applications.
SMA Solar Technology AG Source: SMA 6
1 Introduction to SMA

Power Plant Solutions – inverters and system solutions

for every plant design
Max. AC
SUNNY CENTRAL Power (kW)

... 500 600 700 800 1000 1250 1800

Without
transformator
500CP XT/ 500CP-JP 630, 720, 760, 800, 850, 900CP XT

500MV 630MV 800MV 1000MV 1250MV 1600MV

MV-Stations

TCS500 TCS630 TCS800 TCS900 TCS1000 TCS1250 TCS1600 TCS1800

UL-listed

500HE-US 500, 630, 720, 760, 800CP-US,

8 SMA offers a complete range of central inverters for industrial applications

(incl. MV stations).
SMA Solar Technology AG Source: SMA 7
1 Introduction to SMA

Each day, over 20 MW of SMA PV inverters are installed

worldwide

53 MWp, Germany 85 MWp, Italy 14 MWp, South Korea 44 MWp, Thailand

16 MWp, USA 10 MWp, UAE 10 MWp, Greece 22 MWp, Spain

Why they chose SMA:

Reliability (Technology & Company)
Bankability of SMA1 Risk reduction
Experience (over 30 GW installed capacity)
Grid Management Capability
Financial Performance (SMA Inverters increase yield + reduce TCO2RoI
) maximization
SMA Solar Technology AG 1. > 400 Mio. € net liquidity (cash and cash equivalents) as of 30.9.2012 2. Total Cost of Ownership 8
Source: SMA project example
Agenda

1 Introduction to SMA

2 The PV-Diesel-Hybrid Business Model

3 SMA’s System Solution for PV-Diesel-Hybrid Applications

4 Why SMA?

SMA Solar Technology AG 9

2 PV-Diesel-Hybrid Business Model

Why PV-Diesel-Hybrid systems?

Electricity Cost
($/kWh)

 PV system cost decreased by > 50%

in the last 3 years
 Fuel cost for Diesel Gensets are
steadily rising

Today Time

Already today, we see a significant cost advantage of PV-Diesel-Hybrid

systems compared to conventional Diesel Gensets.
This gap will become even bigger in the future.

SMA Solar Technology AG Source: SMA 10

2 PV-Diesel-Hybrid Business Model

A detailed cashflow analysis clearly shows the financial

attractiveness of PV-Diesel-Hybrid

Assumptions (Base Case) DCF2 Analysis

Effective savings2
 System is designed such that all generated PV
(Mio. USD) Equity
energy can be used
8 Debt
 No annual increase of fuel cost included! Break-even
6 after 4-5
 PV plant size: 2 MWp years
4
 Specific yield (PV): 1600 kWh/kWp p.a.
 PV system cost1: 2000 USD/kWp CapEx (+ OpEx 2
2% p.a.) 0 Years
 Effective fuel cost: 1.30 USD/liter
-2
 Genset efficiency: 3.5 kWh/liter
-4
 PV financing: 30% equity, 70% debt (with 7% 0 1 2 3 4 5 6 7 8 9 10 12 14 16 18 20
interest rate and 5 year amortization time);
cashflow discount factor: 8%
 Payback time of the investment for PV-
Diesel-Hybrid is just 4-5 years.
 After 10 years, effective (net) savings are
nearly 4 Mio. USD.

SMA Solar Technology AG 1. PV system cost will significantly depend on country and project specifications 2. Discounted Cash Flows 11
Source: SMA analysis
2 PV-Diesel-Hybrid Business Model

PV-Diesel-Hybrid is already a real business case in high irradiation

regions with effective Diesel cost > 1 USD/liter

Payback time (years)

Annual PV full load time
22
900 kWh/kWp (e.g. Germany)
20
1200 kWh/kWp (e.g. Italy)
18
1500 kWh/kWp (e.g. India)
16
1800 kWh/kWp (e.g. Australia)
14
2100 kWh/kWp (sunniest spots worldwide)
12
10
8
6
Financially
4 attractive area
2
0 Diesel cost1 (USD/l)
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4

Volatility span Actual effective Diesel cost for genset

2009-2012 operators in remote areas
8 Given the Diesel price volatility and genset industry mindset, a short payback time is crucial.
1. Effective cost at point of consumption including fuel transportation and storage cost etc.
SMA Solar Technology AG Assumptions : 1 MW PV plant; 100% consumption of PV power possible; CapEx=2,000 USD/kWp; OpEx= 2% of CapEx p.a.; PV financing 12
with 30% equity/70% debt with 7% interest rate and amortization time of 5 years; Genset efficiency 3.5 kWh/l (net electricity production); CapEx
and Maintenance cost for Diesel genset not included, since PV is considered as add-on here, not as genset hardware substitution Source: Web
Agenda

1 Introduction to SMA

2 The PV-Diesel-Hybrid Business Model

3 SMA’s System Solution for PV-Diesel-Hybrid Applications

4 Why SMA?

SMA Solar Technology AG 13

2 PV-Diesel-Hybrid Business Model

PV-Diesel-Hybrid applications cover a wide range of use cases

Criteria for a favorable industrial Hybrid case PV-Diesel-Hybrid use cases

 Significant amount of 24/7 base load Utilities/ IPP2

(in off-grid/weak-grid regions)
gensets

 Fit of load curve and daily profile of PV Remote industries

power (e.g. mining, oil&gas, desalination)

 Sufficient space available for PV Big Agriculture

installation (e.g. irrigation systems)

 Application size for PV: > 0.5 MW

Tourism
 Effective Diesel fuel cost3 > 1 USD/liter (e.g. hotels, resorts)
for genset operator
Real estate
 End user mindset: need to save OpEx1, CO2 (e.g. offices, warehouses)
obligations, and/or will to ‘go green’

8 What benefit brings a PV-Diesel-Hybrid system compared to genset pure play?

SMA Solar Technology AG 1. Operational Expenditures 2. Independent Power Producer 3. Effective cost at point of consumption including fuel 14
transportation and storage cost etc.
Source: SMA
3 SMA‘s Hybrid System Solution

SMA’s solution allows for a scalable deployment of PV

PV Inverters Fuel Save Controller Battery Inverters

Spinning Reserve

 Storage integration to
substitute spinning
 Robust design proven  Intelligent and fast reserve/idle genset
operation Grid Manager
in harsh interfacing between
environments load, genset and PV
 High tolerance for inverter  Increased PV penetration of
wide voltage and  Several operation 100-120% to reach economic
frequency ranges modes for maximum optimum, including support for
 Integrated compability diesel off-mode
management  Together with SMA
functions for weak inverters: up to 60% PV
PV PENETRATION of 20 % means: PV PENETRATION of 60 % means:
grid penetration 1
For each 1 MWpossible
installed Genset capacity For each 1 MW installed Genset capacity
 Up to 20% PV you can add 200 kW of PV you can add 600 kW of PV
penetration1 possible
PV Penetration
up to 20 % up to 60 % 100 % +

SMA Solar Technology AG 1. Ratio between PV peak power and genset nominal power 15
Source: SMA
3 SMA‘s Hybrid System Solution

Industrial loads in remote areas are typically supplied

by conventional Genset systems

Industrial Load
e.g. Mining facility,
cement factory, metal
works

Genset System
Powerhouse The main component
Includes main in the electricity
busbars, genset supply system
SMA Solar Technology AG controllers, etc.
3 SMA‘s Hybrid System Solution

Adding Photovoltaics is the first step towards a

future-proof system...

Industrial Load
e.g. Mining facility,
cement factory, metal
works
PV Modules/BOS1
All module technologies
PV inverter supported
The heart of SMA‘s
solution for hybrid
systems

Genset System
Powerhouse The main component
Includes main in the electricity
busbars, genset supply system
SMA Solar Technology AG controllers, etc.
SMA equipment 1. Balance of System (e.g. cabling, module racks, etc)
3 SMA‘s Hybrid System Solution

... but a smart communication between Genset and PV is

mandatory to leverage the full hybrid potential

Industrial Load
e.g. Mining facility,
cement factory, metal
works
PV Modules/BOS1
All module technologies Data Acquisition Module
PV inverter supported Measures the actual load
The heart of SMA‘s both active and reactive
solution for hybrid Interface Module
systems Acts as a data
concentrator and data PV Main Controller Module
logging device for Sunny Monitors genset status and
Tripower inverters computes maximum allowed
PV power

Genset System
Powerhouse The main component
Includes main in the electricity
busbars, genset supply system
SMA Solar Technology AG controllers, etc.
SMA equipment 1. Balance of System (e.g. cabling, module racks, etc)
3 SMA‘s Hybrid System Solution

Integration of storage will be the next step in order to increase

the PV penetration

Industrial Load
e.g. Mining facility,
cement factory, metal
works
PV Modules/BOS1
All module technologies Data Acquisition Module
PV inverter supported Measures the actual load
The heart of SMA‘s both active and reactive
solution for hybrid Interface Module
systems Acts as a data
concentrator and data PV Main Controller Module
logging device for Sunny Monitors genset status and
Tripower inverters computes maximum allowed
PV power

Battery Inverter Genset System

(optional2, for increased Powerhouse The main component
PV penetration) Includes main in the electricity
busbars, genset supply system
controllers, etc.
SMA equipment 1. Balance of System (e.g. cabling, module racks, etc) 2. Available by end of 2013
3 SMA‘s Hybrid System Solution

The SMA Fuel Save Controller enables intelligent communication

between PV, gensets, and load

8 With the Fuel Save Controller + SMA Inverters, we can achieve PV penetration levels1 up to 60%
while still securing overall system stability and smooth genset control2.

SMA Solar Technology AG 1. Ratio between nominal PV power and nominal genset power (of gensets running at the same time) 2. Accounting 20
e.g. for minimum genset load and spinning reserve
Source: SMA analysis
3 SMA‘s Hybrid System Solution

How a typical day could look like (1/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

0 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
100 kW
1 000
30 .. 100 % 400 kW
800

0 kW 0 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
0 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Loads

100 kW
1 000 kW
SMA Solar Technology AG Source: SMA 21
3 SMA‘s Hybrid System Solution

How a typical day could look like (2/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

560 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
300 kW
1 000
30 .. 100 % 400 kW
800

200 kW 300 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
0 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Loads

800 kW
1 000 kW
SMA Solar Technology AG Source: SMA 22
3 SMA‘s Hybrid System Solution

How a typical day could look like (3/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

560 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
120 kW
1 000
30 .. 100 % 400 kW
800

560 kW 120 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
0 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Loads

800 kW
1 000 kW
SMA Solar Technology AG Source: SMA 23
3 SMA‘s Hybrid System Solution

How a typical day could look like (4/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

560 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
240 kW
1 000
30 .. 100 % 400 kW
800

560 kW 0 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
0 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Spinning reserve
from one genset
not sufficient Loads

800 kW
1 000 kW
SMA Solar Technology AG Source: SMA 24
3 SMA‘s Hybrid System Solution

How a typical day could look like (5/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

420 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
380 kW
1 000
30 .. 100 % 400 kW
800

420 kW 0 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
0 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Reduce PV
setpoint to force
2nd genset to start! Loads

800 kW
1 000 kW
SMA Solar Technology AG Source: SMA 25
3 SMA‘s Hybrid System Solution

How a typical day could look like (6/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

420 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
190 kW
1 000
30 .. 100 % 400 kW
800

420 kW 190 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
0 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Loads

800 kW
1 000 kW
SMA Solar Technology AG Source: SMA 26
3 SMA‘s Hybrid System Solution

How a typical day could look like (7/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

420 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
360 kW
1 000
30 .. 100 % 400 kW
800

80 kW 360 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
0 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Loads

800 kW
1 000 kW
SMA Solar Technology AG Source: SMA 27
3 SMA‘s Hybrid System Solution

How a typical day could look like (8/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

420 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
190 kW
1 000
30 .. 100 % 400 kW
800

420 kW 190 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
0 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Loads

800 kW
1 000 kW
SMA Solar Technology AG Source: SMA 28
3 SMA‘s Hybrid System Solution

How a typical day could look like (9/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

360 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
250 kW
1 000
30 .. 100 % 400 kW
800

200 kW 250 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
250 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Loads

950 kW
1 000 kW
SMA Solar Technology AG Source: SMA 29
3 SMA‘s Hybrid System Solution

How a typical day could look like (10/10)

PV Plant Generator power house
FSC10CONT SCADA system
FSC10IFM
(PV Main controller) Plant controller
(Interface Module)

360 kW
Diesel Genset
Gensets controllers 24h load and PV energy generation profile
1 200
STPand PV
330 kW
1 000
30 .. 100 % 400 kW
800

0 kW 330 kW 600

800 kW 30 .. 100 %
400 kW 400
Internal
control bus 200
340 kW
0
400 kW

10:00
12:00
14:00
16:00
18:00
20:00
22:00
0:00
2:00
4:00
6:00
8:00
30 .. 100 %

FSC10DAQ
(Data acquisition)

Loads

1 000 kW
1 000 kW
SMA Solar Technology AG Source: SMA 30
3 SMA‘s Hybrid System Solution

There are 6 key levers favoring PV-Diesel-Hybrid systems

minimizing both, cost and risk

1. Reduction of variable costs

Significant reduction of fuel consumption

PV-Diesel-Hybrid
system 2. Reduction of CO2 emissions Enhanced business case /
Fullfilment of obligations and/or selling of minimised cost
certificates

3. Scalability
PV penetration rate can be scaled up
continously.

4. Energy independence
The solar ressource is always on site

5. Planning security Enhanced supply

Project is less dependent on fuel price volatility security / minimised risk

6. Social aspects
Project is „greener“ and more accepted by
people

8 How can these benefits be quantified?

SMA Solar Technology AG Source: SMA analysis 31
3 SMA‘s Hybrid System Solution

SMA provides tools for optimal system design and translates this
directly into financial benefit for the end customer

Optimal system design Simulation of financial benefit

Effective Savings (cumulative discounted cashflows)
Savings (´ 000 USD)
12000
10000
8000
6000
4000
2000
0
-2000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Years

 Specific solar irradiation, genset power and
load profile are considered to determine the
optimal PV system
 Genset specifications (minimum load, spinning
reserve etc.) are also taken into account
 Power Audit and grid stability analysis is
offered as additional service
 Payback time for PV investment is analyzed
as a function of the fuel price
 For a fixed fuel price, the overall saving
potential for the hybrid plant owner is
analyzed based on a DCF1 simulation

8 With quick, transparent and reliable information on technical and financial feasibility, we
support our customers to find the best solution!

SMA Solar Technology AG 1. DCF = discounted cash flow 32

Source: SMA analysis
Agenda

1 Introduction to SMA

2 The PV-Diesel-Hybrid Business Model

3 SMA’s System Solution for PV-Diesel-Hybrid Applications

4 References

SMA Solar Technology AG 33

4 References

Project example1: Hybrid system for

Yailu Village in Republic of Altai (Russia)

 60 kWp PV system
 6 x SI 5048 + 9 SMC 7000HV
 2 x 40kW DieselGenSet
 Since february 2013 33.000 kW/h
produced by Diesel and 18.000
kW/h by PV -> 5.000 Liter
Diesel

SMA Solar Technology AG 1. Sunny Island system instead of Fuel Save Controller 34
Source: SMA project example
4 References

Project example1: Hybrid system for

Yuchugei Village in Republic of Sakha (Russia)

 20 kWp PV system
 2 x STP 10.000TL
 2 x 100kW DieselGenSet
 Production in the first year
20000 kw/h -> fuel save of
around 6.500 Liters Diesel
SMA Solar Technology AG 1. Hybrid system without Fuel Save Controller 35
Source: SMA project example
4 References

With over 20 years of experience in small hybrid installations,

we now see a clear business case for industrial applications

SMA reference example:

 Mining site in South Africa
 2x800 kVA Perkins Gensets + 500 kVA grid connection
 Upgraded with 1 MWp PV
 Modules: 4170 high-efficiency 240W poly-Si
 Inverter: 63 STP 17000 + FSC1
 PV power production: ca. 1.8 GWh p.a.
 Annual savings: approx. 450,000 liter Diesel fuel
SMA Solar Technology AG 1. Fuel Save Controller 36
Source: SMA
4 References

Project example: 500 kWp hybrid system in Thailand running

successfully since April 2004
 500 kWp PV plant with SMA central
inverters
 2 x 250 kVA SMA battery inverters
 Local grid powered with 5 MVA hydro and
6 MVA diesel gensets
 Saves ~ 200 000 L of diesel p.a. and 483
tons of CO2 emissions

SMA Solar Technology AG 1. Realized without Fuel Save Controller 37

Source: SMA project example
4 References

Superior system technology leads to higher saving potential

PV-Diesel-Hybrid system technology … Optimized system solution …

… plus superior system know-how … and highest fuel saving potential

SMA Solar Technology AG Source: SMA 38

 Thank you for your attention!

SMA Solar Technology AG 39