Saudi Arabia is planning to invest $ 109 billion over the next 20 years in order to take advantage of its excellent solar resources and diversify its energy mix, according to Alexander Lenz, president — the Middle East and Southeast Asia region, Conergy Asia & ME Pte. Ltd. This is because the “Kingdom believes sustainable energy is imperative for its future growth,” Lenz told Khalil Hanware of Arab News in an exclusive interview.
“They (the Kingdom) plan to purchase electricity generated not only from solar resources (PV and solar thermal) but also wind, geothermal and waste-to-energy plants. Their cumulative target of renewable capacity is anticipated to be more than 54,000 megawatts by 2032 with 41,000 coming from solar,” said Lenz, who previously held senior corporate management roles with Conergy AG as VP of business development.
Following are excerpts from the interview:
Currently, many solar plants are under construction in Saudi Arabia with a total capacity of some 15 megawatts. How is Conergy contributing to the expansion of solar energy in the country?
To date, Conergy has built 2 projects in Saudi Arabia. In 2010, Conergy erected the first large scale solar system in the Kingdom, at 2 megawatts on the roof of the King Abdullah University of Science and Technology (KAUST) in Thuwal. Since then this plant has over-performed by +6.7 percent and has also served as a learning tool for the students at the university. In 2012, Conergy built a rooftop system for the King Abdullah Financial District (KAFD) in Riyadh. With this solar system, the KAFD has chosen sustainable architecture with the aim of achieving one of the most significant eco certifications in the world - the LEED Gold certification awarded by the US Green Building Council. At close to 200 kilowatts, the KAFD solar plant will not only be the first but also the largest rooftop plant in Riyadh. With these 2 live projects Conergy has demonstrated that solar PV as a technology is suitable for Saudi Arabia and can easily be integrated into the built environment. One key learning that has surfaced in these projects is that it is best to consider including solar systems very early on in the planning process, even as the main building design is still being drawn up rather than at a later stage. Last minute decisions to include a solar installation while the building structure is still being erected by other contractors can prove to be difficult and can cause delays. Furthermore, not many general contractors in the country are familiar with the solar PV technology yet. This is one area we've tried to work on.
The KAFD will be reducing its dependence on the Kingdom's oil reserves and relying on solar technology from Conergy for a portion of its energy requirements. How is your solar project working with KAFD?
Conergy collaborated with local partner Modern Times Technical Systems (MTTS) in the KAFD project where over 800 Conergy PowerPlus modules have been installed. Installation of the modules is complete but the plant's commissioning is slightly delayed as the building housing the modules is still under construction. But the solar system is expected to be commissioned in the next few months. With this project, the KAFD has chosen sustainable architecture with their pursuit of the LEED Gold certification awarded by the US Green Building Council. At close to 200 kilowatts, the solar plant will not only be the first but also the largest rooftop plant in Riyadh. Once the system is completed, over 330 megawatt hours of clean energy will be generated each year - enough to power 1,500 computers in the financial centre. The solar plant will prevent the emission of 180 tons of the damaging greenhouse gas CO2 annually.
What future does Conergy see for Saudi Arabia in the global renewable energy market?
Conergy sees Saudi Arabia as one of its key growth markets. It will be very important for our future, which is why we are supporting this market. We not only have an office in the UAE but are also working toward building a regional training center in the region to increase public and professional awareness of solar energy. Sustainable energy is imperative for the long term, and Saudi Arabia is planning to invest $ 109 billion over the next 20 years in order to take advantage of its excellent solar resources and diversify its energy mix. They plan to purchase electricity generated not only from solar resources (PV and solar thermal) but also wind, geothermal and waste-to-energy plants. Their cumulative target renewable capacity is anticipated to be more than 54,000 megawatts by 2032 with 41,000 coming from solar. The Kingdom's renewable energy plans currently prioritize large utility-scale renewable power plants, but they also plan to promote small off-grid plants. With these large scale solar power developments, Saudi staff will benefit from technology transfer and will be trained in these renewable energy technologies.
How does Conergy provide support to companies in the Middle East on this new path toward sustainability?
With our 2 live projects, Conergy has demonstrated that solar PV as a technology is suitable for Saudi Arabia and can easily be integrated into the built environment. We realize that not many general contractors in the country are familiar with the solar PV technology yet. This is one area we've tried to work on. Since entering the Saudi Arabia market in 2008, we've partnered with a number of local companies and also opened an office in the UAE to serve the wider Middle East market. As such, we've been present in the country since the solar market was still in a very early stage and we have managed to develop a strong network of reliable partners.
What is Conergy's KAUST project in Thuwal?
At 2 megawatts, the solar PV rooftop installation built by Conergy at the KAUST in Thuwal was the first large scale solar system in the Kingdom when it was commissioned in 2010. The rooftop solar installation is installed on the north and south laboratories of the university. It features premium components, combining over 9,300 high efficiency solar modules with Conergy Suntop III mounting systems and Conergy 280K central inverters. The photovoltaic plant occupies 11,577 square meters of roof space and produces 3,332 megawatt hours of clean energy annually, while also saving up to 3,320 tons of carbon emissions. This equates to carbon offsets of approximately 6,000 circumnavigations of the world by car. After its first full year of operations, the electricity produced from this plant exceeded its expected simulated yield by +6.7 percent.
Since it was founded in 1998, Conergy has sold more than 1.6 gigawatts of solar energy. Who are Conergy's customers and where?
Thanks to Conergy's early entry into the most important global growth markets, our sales teams are active in 40 markets on 5 continents. Our customers are all over the world in all important growth markets. We think global and act local. Our sales teams possess a profound knowledge of the local markets and have developed a close-knit and well-established network of installers, wholesalers and partners on one hand and financial investors and businesses on the other. In that way, we are always close to our customer. Our customer groups differ depending on the region and the respective market conditions. In the very mature European solar markets for example, there is a trend toward rooftop installations whereas in the growth markets such as the Middle East, Asia-Pacific or America, large-scale PV power plants prevail. In some countries like Australia or Malaysia, solar is subsidized through feed-in tariffs. In many countries in the Middle East there are public tender procedures and in countries like Thailand and the United States the markets work via licenses and power purchase agreements of the public utilities. Depending on these different market conditions, Conergy's customer groups range from wholesalers and installers who serve the end-customers to equity partners, financial investors, family-run businesses, large companies as well as the public sector and institutional investors. Conergy has now produced and sold more than 2.2 GW of clean solar energy, and not just 1.6 GW.
What is Conergy's strategy in renewable energy markets of the future?
On the way toward grid parity, the solar market is undergoing a very significant change at present. Boosted by the sharp fall in system prices over the past few years and the continuous reduction in subsidies, it is moving away from a purely investment-driven, profit-oriented market toward a genuine energy market. Conergy has two main focal points: In Europe, Conergy focuses on rooftop plants that are already competitive compared to energy from the grid. In the Asia-Pacific and Middle East region as well as in other growth markets, the emphasis is on large-scale plants. The availability of energy is the key since these countries have to meet the rising local energy demand. The energy needs have risen tremendously in India and in the Middle East. In many of these countries, solar energy is a very attractive and cost-effective way to produce energy. For a number of Asian countries, investments in photovoltaics is cheaper in the long term than the import of energy and in some countries, grid parity has already been reached or is very close to being achieved. Grid parity is already a reality today, a fact that is illustrated by 14 Conergy pilot projects in Spain and another two installations in Australia. There, the solar plants on the roofs for some of the projects we've worked on are already cost-effective even without any solar subsidies thanks to nearly 100 percent of own consumption (power generated by the residence or commercial owner is consumed by the same entity). During the day, the plant owners need virtually no electricity from the grid and thus save around 30 percent of their energy costs. At night, the plant owners continue to draw their electricity from the grid; but with a "net metering" concept (which offsets self-consumed energy and electricity fed into the grid with the electricity consumed from the public grid, for instance at night) similar to what is already implemented in Italy. In the future, the solar plant will not just be a financial product for the customer as an "investor," which is meant to produce the highest possible profit from feed-in tariffs fixed for 20 years. Instead, it will also be the power plant on the roof of the customer in the role of "consumer," which supplies clean energy for their household, makes them independent and saves them money at the same time, even beyond the 20-year period.
Conergy is listed on the Frankfurt Stock Exchange since 2005. What has been the performance of Conergy in the stock market for the last seven years?
Conergy's IPO was in 2005 and the performance of the shares in the first couple of years was very successful. However, the excessive overcapacities in the industry and the resulting price pressure it created as well as the general consolidation process of the entire solar industry negatively influenced the share prices of listed solar companies in the past. These developments also affected the performance of Conergy's shares.
Conergy distributes its product portfolio through a network of partners and wholesalers. Can you explain?
In Asia and the rest of the world, Conergy builds turnkey solutions for solar installations larger than 500 kilowatts. For these installations, the solar experts offer all services from the planning and engineering, to the supply of the components and the installation of the power plants, operation and maintenance, the technical and commercial management, output insurance and extensive warranties. For installations below 500 kilowatts, a segment Conergy pursues in Europe, North America and Australia, Conergy closely collaborates with its network of partners and installers. Through this channel, Conergy has successfully served more than 10,000 customers. However, the installer network is not just a normal distribution channel for components, it goes far beyond. Through its partners, Conergy has access to the small roofs, to the end-customers and can thereby access and participate in the decentralized energy market. This is a key to success in the complex and very mature solar markets all over Europe since here most installations are being built on private and commercial rooftops. When it comes to the professional and precise planning of a solar plant, Conergy supports its partners: With the online-based planning tool "Conergizer," a software designed for small systems, the installers save a lot of time and enjoy an efficient planning process - from 3D visualization of the installation, assessing shading caused by obstacles on the roof, electrical or static planning and the selection of the components for calculation of profitability. This service is available 24/7. Conergy's partners have planned more than 30,000 installations with this planning tool. Through the Conergy Academy, the PV solution and service provider offers its partner network extensive trainings in all areas as well as technical support on the construction site and on the phone. On site, the logistics is coordinated by Conergy and the components are being delivered at any time desired by the installer. On completion, Conergy offers monitoring solutions as well as operations and maintenance services, warranties and/or output insurance.
How many projects Conergy has done in Saudi Arabia and globally?
Conergy has been involved in two major projects in Saudi Arabia to date, and globally it has advised more than 10 000 customers since being founded 14 years ago. Since then Conergy has produced and sold more than 2.2 GW of clean solar energy. We have learned a lot in the process - about sun, wind and weather on all five continents, as well as the high standards required by our international customers. Today, Conergy offers any private customer, enterprise and investor all-round peace of mind and perfection. Our solar projects are in different countries, including Greece, Germany, Spain, South Korea, the UK, and France.