Floating solar to drive up global PV panel demand

Record-high levels of solar energy installation around the world have seen the emergence of large-scale floating solar arrays, driving up demand for photovoltaic (PV) panels and the metals needed to build them.

Global floating solar capacity was just 2.4GW across 35 countries in 2019. But the market is gaining momentum this year, and individual project capacities have grown from less than 10MW to double-digit capacities in 2020 and at least 100MW in 2021. There are several projects with capacities of more than 2GW each under development.

Southeast Asia is leading the acceleration in floating solar deployment as the region looks to meet growing electricity demand with renewables. In the past, southeast Asia has relied on hydropower, but droughts in recent years have drained river and reservoir levels, contributing to blackouts. Floating solar panels are one way of increasing power generation while also reducing evaporation in reservoirs. In turn, the water has a cooling effect on solar panels, boosting their efficiency.

Singapore is adopting floating solar as a way of expanding its renewable energy capacity despite land constraints. Singapore-based solar developer Sunseap and Badan Pengusahaan Batam (BP Batam) are building a floating solar and energy storage system on a reservoir on Batam Island in Indonesia.

The $2bn project will have a generation capacity of 2.2GW and storage capacity of more 4GWh, making it one of the world's largest floating PV installations. Sunseap expects some of the electricity to be exported to Singapore through sub-sea cables. Construction will start in 2022, with completion planned for 2024.

The project demonstrates the leap in the scope of floating PV capacity, as Sunseap has recently completed Singapore's first offshore floating solar farm with a capacity of 5MW.

Vietnam expanded its floating PV capacity in 2020 as its overall solar capacity leapt by 10GW to 16.5GW ahead of the expiration of feed-in tariffs. Although the country is slowing its solar capacity additions to avoid overloading the power grid, it continues to add floating installations. The Vietnamese government is working with the Asian Development Bank (ADB) to run auctions for floating solar capacity, with a 300MW auction this year to follow last year's 100MW round. In 2019, the ADB invested in Vietnam's first floating solar farm, which has a capacity of 47.5MW.

Vietnam's largest floating installation is a 70MW complex completed in December 2020 to meet the feed-in tariff deadline. But this project will soon be surpassed, as Singapore-based investment firm Clime Capital is investing in a floating PV and storage project in Dong Nai province that is being developed by Blueleaf Energy, part of Australian bank Macquarie's Green Investment Group. The project has a capacity of 500MW of solar power and 200MWh of battery storage.

In neighbouring Laos, French state-controlled utility EdF is working with Lao Holding State Enterprise and the Electricity Generating Public Company of Thailand to start construction on a 240MW solar project at the Nam Theun 2 hydropower plant in 2022, with completion scheduled for 2024.

Malaysian renewables firm Cypark has issued a private placement to raise financing for the construction of a 173MW floating solar project. It is also building a project across two sites with a combined capacity of 100MW under an engineering, procurement and construction contract set to become operational in March 2022. The company is working with Cove Suria and Malaysian investment firm Kelantan Utilities Mubaarakan to install a 60MW project by the end of this year.

In South Korea, the environment ministry has identified five dams that could host a combined 2.1GW of solar capacity by 2030. One of the sites is Hapcheon dam, where solar firm Hanwha Q Cells is developing a 41MW project.

The new capacity would be in addition to a 4.6 trillion South Korean won ($3.98mn) 2.1GW project under construction on Saemangeum Lake. This facility is being built by Norway-based Ocean Sun and South Korean energy firm EN Technologies. The first phase of 1.2GW is expected to be completed in April 2022, with the 900MW second phase to follow in 2025.

European countries are also expanding their capacity. German renewable energy firm Baywa RE and its Dutch subsidiary, GroenLeven, recently commissioned two floating PV farms in the Netherlands with capacities of 41.1MW and 29.8MW. French energy regulator CRE closed bidding earlier this month on a 250MW offshore project and plans to issue tenders for two more 250MW sites.

Growing demand for solar panels at such large installations is driving demand for electronic metals such as indium, gallium and tellurium, as well as silicon.

The solar industry is expanding at a record pace, with global installed PV capacity rising by 138.2GW, or 18pc, to 773.2GW, according to trade association SolarPower Europe. The group predicts the market will grow by a quarter in 2021, adding another 203GW of capacity to surpass 1TW. The market has the potential to reach 2TW by 2025.

By Nicole Willing