The longer term players in the industry have definite roadmaps that focus on achieving the goal of making solar power competitive over the long term.
ABB Grows in the Solar Industry
Bob Stojanovic | ABB Inc.
Tell me a little bit about ABB’s role in the solar industry.
ABB has a very broad role in the solar industry, from the somewhat obvious presence in utility-scale to the not so obvious roles, including software and consulting services. In fact ABB has the most comprehensive value proposition in solar. Our traditional strengths in electrical power products and power systems fit well within the utility scale solar market.
From the front end of the process Ventyx, a member of the ABB Group, has smart grid software that enables developers to find the best locations for potential solar power plants by analyzing network traffic, infrastructure and capacity.
ABB helps developers with grid interconnect studies, load flow analysis and power quality assessments. Another team within the same division can deliver the turnkey Electrical Balance of Plant (EBOP) solution from the DC combiner boxes through the inverters, transformers and switchgear to the substation and grid interconnection. The fact that ABB manufactures all these components makes a compelling case for a customer to request an EBOP as a system from ABB.
ABB Power Systems also has tremendous experience working with the major utilities in the U.S. and around the world. With the unique working knowledge that ABB possesses, we can deliver entire turnkey electrical substations for utility-scale projects within a realistic budget and time frame. This includes the control systems needed to run the entire plant (SCADA, PLC and DCS), unique power quality systems and devices including battery energy storage (BESS), Flexible AC Transmission Systems (FACTS) and Static Synchronous Compensators (STATCOM).
ABB Power Products produce all the major components and devices that are used within substations, including transformers, switchgear, circuit breakers, capacitor banks, etc.
The recent acquisition of Power-One by the Power Conversion business unit positions ABB as a leading global supplier of solar inverters, which play a critical role in converting the sun’s energy into electric current and controlling its flow into the power system. ABB has the market’s most comprehensive offering of solar inverters, from residential to utility applications, with products ranging from micro-inverters to utility scale central inverters. ABB and the former Power-One now have the ability to deliver solutions and services for all solar PV applications globally.
ABB Low Voltage Products division (circuit breakers, terminal blocks, disconnect switches, power supplies) is the leading global supplier of components for circuit protection and control devices that are used in PV inverters and combiner boxes. ABB works closely with our customers to satisfy current and future needs in this area by collaborating with the industry and our customers to deliver safe and reliable products.
How is ABB changing the solar landscape?
The obvious response is to highlight ABB’s recent $1B Power-One acquisition. But behind the scenes, ABB is changing the landscape by offering continued innovation and outstanding commitment to research and development. In 2013 alone, ABB’s R&D investments totaled more than $1.5B. Now that ABB has a comprehensive portfolio that extends from fittings and Ty-Raps through the combiner box and inverter to the components in the substation, it is clear that investments in R&D will continue to distinguish ABB from its competitors. We will continue to change the solar landscape as we strive to provide power and productivity for a better world.
How will the Power-One integration be noticed across the industry?
The impact of the acquisition has already been noticed across the industry. As a whole, the industry, including our competitors, recognized the acquisition as positive. This investment in the solar market added a sense of stability and faith during a time of uncertainty and consolidation. The Power-One organization and its products were already top-of-the-line; the ABB acquisition simply improved the access to global markets and customers while reinforcing the bankability. This translates to stability in an exciting and fast-evolving, growing market.
How does ABB plan on remaining a leader in solar energy globally and domestically?
ABB has identified the solar power market as a key industry segment that is aligned with our core products and capabilities. As such, there are industry segment leaders within ABB both regionally and globally that we align with to form and implement the strategies. We will continue to work with our customers to recognize issues and trends so we can deliver the products and services to make our customers and ABB successful.
Right now, solar energy use in the U.S. is still quite low; does ABB see this number growing?
Solar energy use in the U.S. is still quite low, less than 1% of our supply, however the growth rate is excellent and costs continue to decline. Everybody in the industry understands that solar power has to be competitive in order to be a sustainable industry. The longer term players in the industry have definite roadmaps that focus on achieving the goal of making solar power competitive over the long term. The steady decreases in cost and increased efficiency, combined with the fact that solar PV is scalable, flexible and predictable, will ensure the industry’s growth for a long time to come.
How is ABB’s approach to the U.S. solar marketplace different and more effective than others?
I have been with ABB for 15 years and I can only say that we approach the U.S. market based on what is best for our customers and our company. As a result of ABB’s market leadership position and broad offering in the industrial automation and energy markets, it was not difficult for ABB to recognize the solar trend relatively early. ABB’s approach is to study, recognize, invest and participate in growth markets that are in line with our core offerings.
Where does ABB see the future of Solar in the U.S. in the next 5 years? 10 years?
This is a hot topic of debate in the solar community as the Federal Investment Tax Credits are scheduled to be reduced from 30% to 10% at the end of 2016. If we put the tax credit issue aside for a moment, the primary driver of utility scale solar power is due to the Renewable Portfolio Standards of 29 individual states. Those standards will dictate how much renewable power needs to be only by a certain end date.
The tax credits simply serve as a mechanism to get private capital off the sidelines in order to invest in a relatively new industry during what has been proven to be a very challenging economic environment over the past five years. A conservative approach would be to assume that solar PV’s future in the U.S. is purely an economic outcome once the ITC expires and it will have to compete purely on its economic merits.
Solar PV will have to compete with other types of power generation at a lowest cost per kWh basis. I think the industry as a whole recognizes that, and is moving to make long term solar power competitive with traditional technologies. You can look at some recent PPA’s issued in Texas at the five cent per kWh range. Solar Power has an advantage over the fossil fuel based generation in that the cost of the power can be predicted over a 20 to 25 year period and is defined as (LCOE) Levelized Cost of Energy. More traditional forms of power generation are dependent on a primary fuel like natural gas or oil. Other market-based commodities are subject to the volatility of the cost resource. Solar is not subject to the regular rules of supply and demand and other potential geopolitical issues because the primary fuel source of solar power is free. Solar power at a distributed generation level is already competitive with retail power rates in many markets in the U.S. without the need for an investment tax credit.
Solar-distributed PV is certainly part of our future, the question is how will it be implemented and integrated into our existing grid? In regards to the concerns about the variable nature of solar PV and its effect on the grid. The technology needed to address those concerns exists and are available for implementation today. The policy issues surrounding solar power and distributed generation will ultimately dictate the direction of the solar power industry.
Which other renewable energy sectors is ABB involved in or planning to get into in the near future?
At the core of ABB, we are involved in all forms of power generation. ABB has been active as a provider of technologies in wind, hydro, biomass, and geothermal. ABB invests in tidal power from ABB Technology Ventures. We are more heavily involved in some than others depending on the technology and value that we add as provider of products and systems. Wind from an ABB perspective for example, is very similar in nature to utility-scale solar power. The grid systems and substations are a common piece, as are low voltage protective devices. While ABB does not manufacture wind turbines, we manufacture most of the electrical devices that are used in the assembly of wind turbines. For example, ABB manufactures generators and converters used to convert mechanical energy into electricity.
What is your role at ABB?
As the Director of Solar Power North America, I am responsible for ABB’s approach to the solar vertical market in North America. It is my job to keep track of the market and understand its nature and direction so that I can help guide our strategy both domestically and globally. I work across ABB’s five divisions and more than 22 business units to insure that the businesses align with market opportunity, and that we approach the market the right way. Together we identify opportunities for investment and produce development based on trends. If I had to boil it down to one sentence it is my job is to make sure that ABB is as successful as possible across all of our businesses and product lines in the solar power market.
ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 150,000 people.
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