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20 September 2019

Floating solar on verge of greatness, but is it bankable?

Thomas Reindl, deputy CEO from the Solar Energy Research Institute of Singapore kicked off the Floating Solar Conference this week in Amsterdam and summed up the prospects for float solar in one slide.

The slide showed what percentage of the surface area of each reservoir would be needed to equate to the energy of the dams themselves. There was a respectful hush as the audience took in the numbers, the Aswan dam, the 1.4 GW Narmada dam in India, the Guri dam in Venezuela, the Three Gorges in China (pictured), and the numbers were all similar – 4%, 3% less than 1%, 2% – most of them needed less than 10% of the surface area covered with floating solar, to double their outputs.

If the audience wasn’t serious about floating solar prior to that point, suddenly they were – this was a subject to change the world.

Reindl put up another slide – “We keep a database of all the man made water bodies in the world, and there are 400,000 square kilometers of them, and if just 5% were covered in floating solar, it would generate 4 Terrawatts of electricity, more than 4 times what solar has achieved today.” There were opportunities in the US, Brazil, Uruguay, China, India, Africa and all over Asean (Association of South East Asian Nations) and many other places besides.

But before the shock and awe began to fade, the conversation had started – “How do we harness those opportunities?”

Here Reindl was less forthcoming and every other speaker in the rest of the day had a go at the big debate, which is how to make each opportunity “bankable,” that infamous term that makes each opportunity a water tight way that a financier can extract profit from the project. And here the whole idea fell apart – banks employ “experts” which know if this is a big risk or not, but almost none of those experts have ever seen a successful floating solar project, because they are so new. The call went out for experts to actually be “expert” and not just ruin a perfectly good project. They need to get educated. When they have seen a floating solar project, they have not seen one at scale and those who have seen one of those, cannot vouch that it will survive for fifteen years, which is what they will need to do before every one of those locations could get funding.

Each speaker took a go at it and many echoed Reindl’s advice – take the low hanging fruit, do the easy ones first, natural water features first, sand pits and coal mine that filled with rain next, don’t try to put floating solar in the sea, and if you have to, make it near shore and in the tropics where there is no evidence of typhoons, and waves never get above one meter.

Two speakers on a panel close to the end, William Otto at Marin, and Gino Bawn, senior engineer at ITP Energized, took turns to repeat this message like a mantra at the last session. The message was the bigger the waves, the more you spend, the more risk the higher the chance of failure. Think small, make it work then build. If you have to put a floating plant at the seas edge, then learn from the fish farmers who had slowly realized that at the edge of the sea was the best place to rear fish and better still combine the two ideas so there are two revenue streams, put the solar above the fish farms.

Bawn added, “The engineers can deal with bigger waves, but the costs just keep going up,” citing experiences from floating wind and oil platforms.

Borge Bjoneklett on the same panel added, The Strait of Johor, between Singapore and Peninsular Malaysia had enough calm sea to get a GW of energy. If you have to do the sea, do it there.”

Some sessions circled all the way back to those hydro dams, and how much reservoir space they have and how little of it we need to convert to save the planet. It did not help that a rather smug session where Marc Borghans, head of sustainable project finance at ING Bank, gave one word answers to questions about how to improve bankability, and seemed to think it was everyone else’s problem and not his. We’re not sure that ING bank is going to see much in the way of profit from floating solar, but someone sure as hell will.

As we cycled through the audiences, we listened for scraps of intent, we came across people who had “already solved the sea issue,” in a design that was initial created at Sea6 Energy in India to create a floating platform to support seaweed growth, and then adapted it to floating solar. “It’s all about making the platform flexible,” said Principal Engineer Rajesh KatReddy, and showed an intricate “Heath Robinson” style prototype that seemed to be tied together with string, but clearly worked. And yet his first real trial will have to wait until next year, when the site, the money and the stars all finally align on 6 years of work. So another truth came out of the conference, that you can’t keep renewable engineers down, they just eat up all the problems.

Another chap, Uday Bhende from India, managing director at Kirloskar Solar, took the conversation off in another direction, partnering solar with batteries, but suggested that he could build hydro storage using a turbine with no steel in it. What use is that?

“Well it can work with saltwater from the sea, as a battery. You don’t need two pools, one at the top of the cliff and one at the bottom, you just need the sea and a cliff. He claimed he had built a pump that would work with this set up, and it could easily be a way for floating solar energy to be used.” The problem again was bankability. He has to create a miniature trial, then a larger one, and finally find one at scale. I am sure we shall see him there next year, and the year after – but we are equally sure he will not give up and he will get the job done.

One DNV Consultant Jasper Lemmens spent an entire session listing what was different from land based solar to floating solar, and what everyone needed to do about each problem to make it “bankable.” It was like a lesson in making proposals more bankable. It came down to moorings, making components watertight, calculating wind loading, reporting on wave loadings, adding a bathymetry study (water depth) and a current study, and how you will launch from a docking platform, plus you must not forget environmental impact. It’s not enough that the engineers to have to solve the puzzles of how to make a platform last for 25 years, they have to prove it with the best study they can muster, and perhaps still, if it was down to the ING executive, they still would get passed over for a ground solar installation.

There were several floating platforms shown at the event, some with tracking, and others which tied solar panels into a pair, one sloped to take the morning sun, and one to take the evening sun. These were called the “East West” arrangement. Tracking systems were largely frowned on despite being ingenious, because they did not have 15 years of proving they worked. One system built the entire system as a circle of panels, arelady sloped towards the sky, and the entire thing was turned in its moorings to follow the sun, offering 30% more energy. The advice was to steer clear of such things, it is one more thing to go wrong. Luckily nobody listened.

And that is the rub here. It is a market that can take off, but until it has taken off there are so many people not prepared to risk an inch, so that the painful progress from 68 MW installed 3 years ago, to 169 MW two years ago to 528 MW of floating solar last year, to the 1.3 GW that is expected this year, will continue at this pace. Until everything has been tried, and financiers can see that the risks have been fully assessed, and there is little left to go wrong.

That will be achieved by pioneers in time, but more likely by the arrival of bigger fish in the little pond that is Floating Solar today, and seeing plenty of representatives from Equinor and EDF Renewables, and their ilk, we can see that they are already sniffing around the opportunity pool, lining up their ducks ready to take a swim in floating solar – this year or maybe next.

Reindl finishing by saying that in 5 years there will be 10 GW of floating solar and growing. We think he is a little too depressed at the rate of progress and it might be quite a bit more. One Chinese company claimed to have a 1 GW system in development already and a 150 MW system in production.

Another speaker from Sungrow was asked if the reservoir had ever dried up? They must have known something, because she owned up totally, “Yes that’s happened to us.” What did she do, she was asked, “Nothing the panels were still working and made electricity.” We supposed they have more to worry about if their dam had dried up – having lost all their drinking water and their electricity at once – but it was a picture that made those bankers present wince.

The rest of the show spent time talking about bird droppings and whether they needed to be cleaned off, or would the rain just deal with the problem. That was good for little more than a few laughs. It is clearly always dependent, like all things renewable, on the circumstances. In the Netherlands, the rain will take care of it, in the tropics, there is no rain.

One of the main sponsors was an investment firm called Trio and clearly it has found that a number of Dutch projects are highly bankable, and it was on the lookout for more. So not all investors think alike and see only obstacles.

One voice recounted his first meeting with a financier over floating solar, “Yes it may excite you, you’re an engineer, you like problems, but we’re bankers, so just bring us more ground based or rooftop solar.” That’s one approach, but when you realize that permitting problems have sunk the German solar effort this  year, and transmission problems look like doing much the same in India, then you come back to the entire reason for floating solar, the land drivers. Where land is expensive or needed for other things like farming, water surfaces are the least valuable, and the most bankable. When you put it like many financiers may find they have to think again.

Finally we heard one voice tailing off. “In the solar market ten years ago you has to chase around after finance, now they chase after you”. So while you may have to do about 7 or 8 more studies to get a project off the ground, we think our planned forecast of floating solar for later this years, will show that the finance will be found.