For those not involved in the industry, the concept of floating solar photovoltaic (FPV) projects may seem unusual. We are taught from an early age that mixing electrics and water in such proximity is not something we should be doing, and while offshore wind is now an established renewable energy technology, FPV has yet to make the plunge. Much like the transition of wind from onshore to offshore in search of more space and becoming a better, more consistent resource, the time is now ripe for a much wider-scale rollout for FPV. The sun shines on land and sea alike; if we look a little closer, we can see that there are significant benefits to be gained from moving this technology into a wet environment. Floating Solar is now being harnessed by many developers and is being hailed as the next new revolution in renewable energy, being likened to the Onshore Solar market a decade ago.
The concept is simple. Flotation units are linked together to form a buoyant body, on which traditional panels can be affixed. The whole structure can be built row by row at the water’s edge and then launched onto the water surface as each row completes. Once located on the body of water, it is then anchored via mooring lines to the sea (or reservoir) bed. Modules can be combined into ‘islands’ to suit the needs of a project or the shape of the available water formation. Combiner boxes and inverters are placed alongside, with the project then feeding energy out to the onshore transformer via marine cables.
The reality is that the core technology for these projects is evolutionary rather than revolutionary. Solar photovoltaic systems are technically well understood and deployed globally; the industry has access to a wealth of knowledge gained in the offshore wind industry, which can be used to address some of the challenges which might come with subsea cables and the electrical repatriation of power from a wet generating location being received onshore.
Significant solar suppliers, such as Sungrow and Baywa, are now rolling out their own modular systems and building on the work of earlier innovators in this sector, such as Isigenere and Ciel & Terre. Nevertheless, the floating deployment of these technologies is still more expensive. As an example, Structural Balance of System Costs (SBOS), which include the floating structure, mooring and anchoring system, make up about 34% of total project cost, compared to just 8% for a similar ground mounted project1.
With some locations however - particularly islands - having limited land mass for utility scale, onshore solar sites have strong support from offtakers with preferential PPAs (Power Purchase Agreements). The opportunity landscape for experienced onshore solar developers to take advantage of strong commercial first mover incentives is becoming a reality.
Renewable energy developers will be all too familiar with the challenges of acquiring land with sufficient planning consent when delivering onshore projects. While wide open spaces may be available in some territories, many others with existing transmission and distribution systems to support consumers and local demand will appreciate that development space can often be at an absolute premium. It’s no surprise therefore to see a significant amount of FPV development activity in Southeast Asia; countries such as South Korea, where there is limited land mass with a large part being mountainous, are finding alternative ways to fuel their power needs and are looking closely at Floating Solar.
As the cost of land goes up, access to open water starts to look increasingly attractive. 87% of FPV capacity is in the Asia Pacific region2, but other countries with high land cost and an availability of inland water bodies, such as the UK, are already home to numerous projects. It’s not a well-known fact that the QEII FPV project in Greater London, near Heathrow owned and operated by Lightsource BP at 6.4MW, is one of the largest Floating Solar arrays in Europe and indeed was the largest when it opened in 20163.
Another key advantage FPV offers is an overall enhanced power efficiency. As systems heat, they become less efficient; this results in a meaningful reduction in power output and consequently project efficiency and profitability. Proximity to water has a cooling effect, reducing the temperature of the operating system and benefitting the site with a greater power output than a comparable land-based site. This lower operating temperature is also expected to slow module degradation.
Moreover, there are further advantages to FPV. Covering a large surface area of the water reduces water evaporation; given the mounting water conservation challenges faced by some parts of the world, the prospect of keeping water in reservoirs is appealing. In addition to this, it has been posited that this shaded area helps to reduce the growth of harmful bacteria and algae which are unwelcome in water supplies. For these reasons, a large number of existing and developing floating solar projects are located on dam and reservoir systems.
It seems clear that FPV will have an increasingly important role in the energy transition; it’s also clear that Renewable Energy developers who are considering moving from a dry to a wet operating environment will face many risk challenges, particularly as the size of system increases, depending on location, whether it be inland reservoir, lake or the open seas. However, insurers are currently not actively targeting this generation technology; their limited experience suggests that any cover offered is likely to be as an accommodation to a broader client relationship. We should be mindful that moving from an onshore to offshore environment can often significantly increase the perceived risk of a project (depending on location), and this would be reflected in the rates, deductibles and terms available in this hesitant, capacity-strapped market. We would therefore encourage an early involvement with risk and insurance advisors so that good cost modelling and risk expectations can be built into the development.
Oliver Warren is an Account Executive in the Renewables team, Willis Towers Watson GB. Oliver.Warren@WillisTowersWatson.com
1 https://www.woodmac.com/news/editorial/floating-solar-update-2019/ 2 https://www.saipem.com/en/blog/new-frontiers-renewables-floating-solar 3 https://www.rechargenews.com/transition/fire-hits-bp-ventures-flagship-floating-solar-plant-in-uk/2-1-877293
