Sunday, January 12, 2014

Solar Boom and Bust

I've been trying to group different perspectives on an energy them in pulling stories together, and this week there's some stories reminding me of how promising solar is, in the aspect of cost per unit of energy, and how it seems so unsuitable for making a large contribution in an energy mix (at least one for a northerly climate, as Ontario's is).

Two money stories - wildly different.

After a building boom, solar energy's prospects now aren't as sunny | Los Angeles Times

"Nobody's going to break ground on any big new solar projects right now — utilities want to see how farms coming online this year fit into the grid, and developers are waiting for more certainty about state policies and federal tax credits."
Another, somewhat unexpected issue is the difficulty solar developers are having negotiating agreements to sell their power to large utilities. The agreements reached to date guarantee solar providers higher rates than utilities pay for power from traditional energy sources.
"Until you know that you are going to build the plant and be able to sell the power, no one is going to get money to build,"

 DEUTSCHE BANK: We're About To Witness The 'Second Gold Rush' In Global Solar | Business Insider

Ground zero for the first global solar boom, which took off in the middle part of the last decade, was probably somewhere in the German countryside.
Deutsche Bank's clean tech team of Vishal Shah, Jerimiah Booream-Phelps, and Susie Min are calling a second global solar 'gold rush.'
Ground zero this time? Pretty much everywhere.
But instead of subisidies, the second rush will be driven by three elements: ongoing low system prices, more robust financing and the looming absence of subsidies.
The two stories may not be as different as it seems. The L.A. Times article, after noting subsidy uncertainty seems to be raining on utility-scale solar, "mid-sized and rooftop solar power is burgeoning and eventually could curtail demand for major solar plants..."

The Business Insider story notes new financing arrangement that, at my glance, seem aimed at non-utility scale projects (either business or residential).

There's a lot of discussion about distributed solar threatening traditional utilities, and I suspect that the situation in California will work around to somewhat resolving that issue. Solar is now economical (with incentives, and possibly without) for residences and commercial customers with higher usage, because many of California's service providers have steeply tiered price structures which recover far more of the fixed costs from, presumably, the most affluent (largest homes and consumption).

Essentially, progressive utility pricing models are being displaced by regressive incentive schemes.

Not unrelated, I noted today some 2013 figures for Germany, indicating the greatest growth in renewable generation came from biomass in 2013 - with solar in it's 4th year of slowing growth, and total wind generation declining again (as it has 3 of the past 5 years). Solar's share of generation hit 4.5%, up from 4.2% in 2012. Germany had adjusted it's incentive (feed-in tariff) to reduce as capacity increased, and by the end of 2013 new installations had been reduced to the target range.

Growth to get to 4.5% of generation was too expensive not to be slowed.

Finally, Chris Goodall's blog post pick up on exactly how much energy beyond the current electricity sector Germany wishes to displace, preferably with wind (25% growth in the past 6 years), and the currently, after much effort, slow-growth solar.

The Germans in the unusual role of impractical dreamers | Carbon Commentary

...estimates of the amount of primary energy needed to create the fuels a modern economy requires. The table below gives the figures.
Primary energy neededFinal energy created from this
Electricity550 TWh460 TWh (1)
Gas1110 TWh300 TWh
Liquid fuels1280 TWh520 TWh
 (1)      For electricity, the difference between primary and final energy arises from grid losses and from the losses in pumped hydro and in using some electricity for making methane, prior to conversion back to electricity.

The Germans are saying no to nuclear, but also to CCS and biomass. In one paper from a UBA employee, CCS is called ‘unsustainable’, an attitude remarkably at variance with the UK position. Biofuels of all forms are rejected for similar reasons. So all energy (not just electricity) comes from renewables in 2050 and the UBA sees PV and wind as being the dominant source. The need is for almost 3,000 Terawatt hours of electricity to provide this.
3,000 from 2013's 78TWh from wind and solar is ambitious - if not definitively impractical.

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