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21
Feb
2017

The rise of solar energy

There are a number of reasons that explain the boom in solar energy: installations are more powerful and less expensive, investments have been stepped up, and more encouraging regulations have been introduced. As a result, in more and more countries, industrial operators and electricity producers such as ENGIE are focusing on this solution of the future.

358 gigawatts is the current total installed capacity of all the world’s photovoltaic solar farms around the world. In 2011, the total stood at 70 GW[1].

The sun is a source of energy with considerable potential to fight against climate change, stimulate growth and enable widespread access to energy: it is virtually unlimited, easily available, present in practically every country in the world, non carbon-emitting, and can be exploited on either a small-scale or a large-scale basis. At the present time, there is no technological barrier holding back the energy transition towards solar energy. It is rather financial and legal issues that are restraining it, but these are in the process of changing all around the world. The time for solar energy has dawned.

Competitive prices and regulatory changes

In five years, the price of electricity generated from solar energy has been divided by eight2 ! Meanwhile, the cost of solar panels has halved since 2010 and, according to IRENA (the International Renewable Energy Agency),  is expected to drop a further 60% in the next ten years. Automated production, in China for instance, has reduced breakage rates and through constant innovation, manufacturers are designing more efficient cells and improving the lifespan of installations (which can now be as much as 35 years, as against 25 just five years ago). Photovoltaic technology is now affordable, simple, mature and mastered. Affordable solar energy is the key to decarbonization, and putting it into widespread use throughout the world is a challenge that every country should be facing.

Solar energy has been put on a very ambitious course in France in the context of the French energy transition law: a target of 18 to 20 GW of installed capacity has been set for 2023, compared to 6.2 GW today. A number of government decrees now under preparation should stimulate production.

In many other countries, organizations are campaigning for the standardization of the regulatory framework and best practice. One of these is the Terrawatt Initiative, the first private non-profit organization set up by ENGIE, bringing together investors, energy suppliers and equipment manufacturers. Its objective is to put in place the conditions necessary to make 1,000 GW of solar capacity available worldwide by 2030.

Rise in solar energy production throughout the world

The solar energy boom is particularly strong in emerging countries that combine a sunny climate with sustained growth in demand for electricity. China intends to double its installed capacity between 2015 and 2020, to achieve 110 GW. India has an ambitious target of 100 GW of solar energy by 2022, while solar energy already accounts for a 4% quota of Chile’s energy mix, even though it was completely absent in 2012.

One of the consequences of this revolution is that the major European electricity producers have made a shift to solar generation. This is the case of ENGIE, which has made solar energy a key pillar in its strategy of becoming the world leader in the energy transition.

The Group already holds dominant market positions in some of the world’s sunniest regions. Through its subsidiary, Solairedirect, ENGIE has a total solar energy capacity of 471 MW in India, including 290 MW currently under construction in the states of Rajasthan and Uttar Pradesh. It is developing a solar plant in Chile that will generate 120 GW per year and has won contracts for new solar projects in Mexico. In Tanzania, ENGIE has installed a mini-network of photovoltaic panels in the village of Ketumbeine to provide rural populations with sustainable access to energy.

ENGIE is also active in the European market. Since the acquisition of Solairedirect in 2015, the Group is number 1 in the sector in France. It intends to roughly quadruple its installed solar capacity in France over the next five years. In Belgium, ENGIE installs photovoltaic solar panels for individuals and businesses through its subsidiary, Electrabel.

The Group is also responsible for a number of innovative projects around the world, including the Kathu concentrated solar plant in South Africa and the Alata Solar Smart Grid in Corsica, which allows the storage of solar energy.

1 AIE, report REN21 2016, Global market outlook for solar power 2016-2020.

2 ENGIE, Activity Report 2015, p. 27.

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