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Friday
May092014

Levelised costs claim another victim

Science writer Martin Robbins has written about the Koch Brothers today, telling us how the new-found "grid parity" of solar energy in some parts of the world is going to give them and other fossil fuel barons a "kick in the balls".

Last year, a small solar revolution happened across Europe, as Spain, Italy and Germany reached "grid parity’" – the point at which the cost of producing electricity from solar energy becomes cheaper than the cost of buying it from the national grid. Just a few years ago, solar installations needed massive government subsidies to be cost effective. Now – in three countries, at least – they can compete on equal terms with their dirtier cousins.

And this spells trouble for big oil:

For Big Energy, it’s a nightmare. Slow to innovate, lumbered with vast national infrastructures to maintain, and selling a product that gets more expensive to produce each year, fossil fuel companies are facing what could be a massive disruption to their market – one that they look set to be on the wrong side of.

The problem is that Robbins hasn't really understood the maths. You see, grid parity is defined (by Wiki) as:

...when an alternative energy source can generate electricity at a levelized cost (LCoE) that is less than or equal to the price of purchasing power from the electricity grid.

And as readers at BH know, you should never ever use levelised costs for intermittent energy sources because it's grossly misleading to do so. (In essence, solar generators earn money for at best 12 hours out of 24, so they are completely outcompeted by dispatchable generators, which can earn for 24 hours a day, even if their levelised costs are the same).

Nobody even tries to argue that levelised costs are not misleading - the maths is so trivial that it would be suicide to do so. The best they seem to be able to come up with is to say that "everybody uses it".

So contrary to Robbins' expectations, solar is not about to assault the Koch brothers. And as if you needed any proof, take a look at this recent report from Spain, one of the countries about which Robbins is so excited. There, the government has had the temerity to suggest cutting subsidies to solar power operators.

The squawking is something to behold.

So just whose balls is it that are being kicked?

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Reader Comments (111)

I think you only get elements up to atomic number of iron by fusion. Elements with higher atomic number don't get formed by fusion because that absorbs energy, rather than releasing it as in fusion.

For uranium and so on that I imagine Dung was referring to, I think you do need the temperatures and pressures of a supernova to get things to stick together to form (for example) uranium nuclei. Some of the energy used in forming the nuclei can then eventually be released, billions of years later, in a nuclear power station by fission.

May 9, 2014 at 9:43 PM | Registered CommenterMartin A

You don't have to look very hard to find business reports like this

"Chinese Zombies Emerging After Years of Solar Subsidies"
[...]
"Only five solar-power vendors remain in a space built for 170 at a sprawling complex of offices stacked three stories high outside Xinyu city..."
That story is from Bloomberg, who are normally staunchly in the global-warming camp.

China built massive over-capacity on the basis of continuing, and increasing, Western stupidity. The chickens have been coming home to roost for a while now and (almost) everyone is worse off as a result.

I suspect politicians were largely duped (incentivised?) into thinking that wind and solar were close to being ready for large scale roll-out and all that was needed was 'one last push'.

What we effectively got, was one last 'putsch' from the greenshirts and Cider-with-Rosie parties.

May 9, 2014 at 9:44 PM | Unregistered Commentermichael hart

Chandra.

In Spain, the price differential between the cost of conventionally generated electricity & the money received by the owners of solar PV farms (feed in tariff) is so large that the said owners buy conventional electricity to power floodlights focused on the PV panels which generate electricity at night that is sold back to the Spanish grid at an exorbitant price, six times higher than was paid for the electricity to generate the PV electricity. Do you think the the operators of the PV farms are being honest? Don't you wonder why the people who run the Spanish grid haven't thought it really strange that a PV farm is generating electricity at night?

Chandra, are you honest enough to admit that the Spanish scam should be stopped & the culprits jailed?

May 9, 2014 at 9:45 PM | Registered Commenterperry

{snip O/T]

May 9, 2014 at 9:48 PM | Unregistered Commenterptw

Nuclear?

May 9, 2014 at 6:59 PM | Registered CommenterMartin A

Being pedantic Martin, isn't everything heavier than iron (Uranium Plutonium etc..) the outcome of a Supernova (star - ie Solar equivalent)

May 9, 2014 at 9:48 PM | Unregistered CommenterRob Burton

Though as you correctly pointed out Martin - even nuclear isn't 'Solar' of origin

May 9, 2014 at 9:50 PM | Unregistered CommenterRob Burton

chandra won't respond to the counterarguments, instead she will just throw another snippet from The Guardian/BBC/grist /SKS.

Chandra is used to throw a snippet and then expects to hear "baaaaaaa" from the believers, in agreement.
It must be very disconcerting to chandra that each of his incoherent remarks actually can be answered , negated and proved to be TheGuardian greenie lefties' shyte.

May 9, 2014 at 9:55 PM | Unregistered Commenterptw

ptw, That one at 9:48 PM was wayyyyy off-topic.

May 9, 2014 at 9:57 PM | Unregistered Commentermichael hart

to power floodlights focused on the PV panels which generate electricity at night that is sold back to the Spanish grid at an exorbitant price, six times higher than was paid for the electricity to generate the PV electricity.

That seems (if I did the sum right) to imply that they get an efficiency for the process [electricity power in] >> [light] >> [electricity power out] greater than 16 % (= 1/6) for them to make a dishonest profit..

So the lights would need an efficiency of greater than 40% if the solar panels had an efficiency of 40%. (0.4 × 0.4 = 0.16) Those figures sound awfully high to me.

S.L.B.T.M.

May 9, 2014 at 10:00 PM | Registered CommenterMartin A

I like the meme on where uranium comes from :)
It seems we all have learnt to quickly check wiki, by now (although chandra is lagging , but he soon will be back to write that, indeed, it comes from supernovae)

Not that anyone of us "knows" of course.
It could very well be there is a rose painted cow at the end of the universe, that poops uranium.

It is all a bit conjectures I am afraid.
Also , the formation of uranium requires extremely this and that, UNTIL someone comes along and makes it in a cooker at home, of course. Little do we know.
Unless we get all employed by the BBC. Then that person with the cooker will NEVER come.

May 9, 2014 at 10:00 PM | Unregistered Commenterptw

"Some of you are rather confused about electricity supply. Have you ever seen a demand curve that peaks at night?"

May 9, 2014 at 10:04 PM | Unregistered CommenterChandra

chandra, sure newyearseve, olympics worldcups on the other side of the globe that sort of stuff
what you are trying to tell us is that "piggybacking" on the work and infrastructure of other people other technologies, is somehow adding value, it is not.

May 9, 2014 at 10:08 PM | Unregistered Commenterptw

isn't everything heavier than iron (Uranium Plutonium etc..) the outcome of a Supernova (star - ie Solar equivalent)
May 9, 2014 at 9:48 PM | Unregistered CommenterRob Burton


Rob - yes, I think all that stuff comes from supernovas But I don't think you can call a supernova a 'solar equivalent'.

May 9, 2014 at 10:09 PM | Registered CommenterMartin A

Chandra - I already answered you. Yes. [Demand curves that peak at night are normal in the British winter.] I gave an example of one. (May 9, 2014 at 6:28 PM)

May 9, 2014 at 10:12 PM | Registered CommenterMartin A

We should sent out our Posh lefties with a butterfly catcher to the next supernova, to catch some Uranium for us.

Can we not drop the message it would be very much anti-obama not to do so? tantamount to raaaacism, really.

May 9, 2014 at 10:20 PM | Unregistered Commenterptw

The paper by Joskow referenced by the Bish makes clear that Levelised costs are inappropriate for wind but not for solar. At least not for solar in California. Solar in Scotland, a dark wet gloomy land, would be stupid.

May 9, 2014 at 10:30 PM | Unregistered CommenterPeter Mott

In warm climes at least - what I have looked at the most - peak electricity demand is almost always late afternoon/early evening. There are a couple of main reasons for this.

First, there is the thermal lag of the natural system, so peak temperatures are reached several hours after the sun is at its zenith (and buildings have a thermal lag of their own).

Second, there is a significant overlap as home usage starts up in the late afternoon before business usage really ramps down mid-evening.

May 9, 2014 at 10:33 PM | Unregistered CommenterCurt

Chandra
Some information on solar output and demand in California, an American state well known for its sunshine. The curves appear to be summer rather than winter data (see below for why I think that).
Solar output
Demand curve included here

Despite the fact the second link saying

While the aggregate demand smoothes out the individual peaks, the daytime load is still double the night time load.
. It appears to me that the solar output from the first link has fallen to 50% of maximum whilst demand still has 2 hours of high demand left. When demand starts to fall solar output has fallen to less than 20%. San Fransisco is 37.7833° N London(UK) is 51.5072° N so at winter Winter solstice sunset times are
14:57 Lerwick (Shetland)
16:23 Lands End (Cornwall)
16:55 San Francisco (California)

To my mind in all three locations in winter there will be a high demand at a time when output from solar panels has fallen to zero hours previously. It's immaterial whether the demand is actually peak or 90% of peak, solar is not supplying any of it.

May 9, 2014 at 11:15 PM | Unregistered CommenterSandyS

MartinA the 10:04 post was not from me. It is something I said, but note that it is in quotes. I think it was probably from 'ptw' as he answered it immediately after. Strange way to go about answering my post, if you ask me (oh, you didn't...). It can't have been accidental, as he'd have to change the name field in the form. You are clearly right that daily demand peaks away from noon, I was imprecise. My point was that daily demand and solar supply are well correlated, hence AM's assertion that the non-24h nature of solar makes a difference to anything is invalid.

If any of you are actually interested in what goes on is stars as opposed to testing your Googling skills, I recommend the blog Starts with a Bang. You could start with How was Earth’s most well-known precious metal made?, although there are other posts on the same line.

May 9, 2014 at 11:24 PM | Unregistered CommenterChandra

I just realised I am a full blown idiot.. Now I'm off to The Guardian , my homebase from now on..Byeeee

May 10, 2014 at 12:36 AM | Unregistered CommenterChandra

quite.
(chandra has his honest bouts? it's a bot with the moth in it or something.)

Dark matter is another ridiculous thing: They find out the galaxies are not moving like they are supposed to according to
all their conjectures, so they must be moving the way they are because of mass that we not see...Dark matter!

May 10, 2014 at 12:41 AM | Unregistered Commenterptw

Chandra:
You need to do some research. Daily demand starts early in the daytime, even just before sunrise, here in Australia.
By coincidence wind energy tends to drop as the sun rises, because the incoming heat causes turbulence. At the same time production from solar is barely possible, because even panels angled towards the rising sun don't get much energy.

Solar generates most power in the 5 hours of midday, and the output drops off in the late afternoon. Peak demand here is very often late afternoon or early evening, because people returning home on hot days turn on their air conditioners and use other power (TV stoves etc.). Most commercial buildings run air conditioning 24 hours a day, partly to save the office/shop being hot in the morning but mostly to provide ventilation.

Solar power has been enthusiastically embraced by those who can afford the capital purely because the stupid politicians set a feed in tariff way above the cost of the electricity provided. Yes, I have solar and I am getting roughly 19% annual return. If the solar FIT was at standard electricity rates then the annual return would be 1.1%, so with a 25 year life they would never pay of the capital cost. I hope that the FIT is retained long enough for me to get my money back because some politicians are waking up to the problem. (Could you lend us Ed Davey in that case?).

There are 2 problems; the panels deteriorate with age, so after 10 years they don't return that much. Some cheap chinese panels have stopped working in a matter of months.
The second problem is that the FIT pushes up the price of electricity to those who cannot afford solar panels (pensioners, renters, people in flats and those with the wrong orientation). I did hesitate to put solar in for that reason but I met a greenie who said I had a moral duty to install them, so I did.

May 10, 2014 at 12:42 AM | Unregistered CommenterGraeme No.3

Nuclear.

Uranium as is Thorium, are star dust.

A collapsing core supernova, massive temperatures and blocking of electron decay, causes neutronization of elements. Next a very big bang, and all over the universe [in gaseous form] and do they go to on to form new stars and planets. U and Th are very common in the crust of the earth as igneous intrusive formations of rocks, which are soluble and then washed out into soils and richer deposits of pitchblende etc are formed - with a whole range of other ores and minerals.
Man digs them up and enriches the ore, and puts them together in a controlled pressured environment [critical mass] with lots of water = steam= rotates turbines= drives generator = electricity.

It's good, God sent - clean and efficient U or better - Thorium reactors....... but the greens don't like it.........or they didn't[?! ish].

May 10, 2014 at 12:59 AM | Unregistered CommenterAthelstan.

The Koch Brothers (pronounced "Coke") are the left's designated demons these days and you can't go more than a few hours viewing media without seeing them mentioned--usually with rote indignation-- in some column. In fact, the United States Senate majority leader, who Mark Steyn has described as a "furtive little rodent," barely lets a day go by without taking to the hallowed floor of the Senate to lambast these upstanding upstanding American citizens. Here's one cartoonist's take on that obsession:

http://www.realclearpolitics.com/cartoons/cartoons_of_the_week/index.html

We have a tradition, or rather we once had a tradition in this country, that Senators or Congresspersons should not attack private citizens from the respective floors in the US Congress. It's sad how much is being lost.


theduke

May 10, 2014 at 1:16 AM | Registered Commenterpottereaton

One of the problems with nuclear is that the primary circuit is pressurized (as in all fossil fuel power plants)
so they could explode (thernobyll)
An idea is to use fluor salts instead of water. They melt and become fluids at 400degrees or something but are far from becoming steam. The fluor salts can then with normal piping (say the ones used for sewage, simple) be led to an exchange that provides heat to a secondary, pressurized water circuit for the turbines to dturn.So your nuke remains an open pot then and cannot explode.Everything becomes a lot simpler in the nuke area.
A "problem" hereby is that these fluor salts are toxic. But okay we are not supposed to eat there, lots of things are toxic, don't drink the bleach in the toilet don't lick out the oil from your car engine.I think 2 people and a graduate , in the world, are working on this (2.7 million people are typing verbiage about windmills etc , though)

May 10, 2014 at 1:33 AM | Unregistered Commenterptw

Why would Big Oil be scared of a cheap energy source? They'd be on it like flies on cow dung if it was any good.

And what about Little Oil? Doesn't anybody care about them?

May 10, 2014 at 1:54 AM | Unregistered Commenterkellydown

May 9, 2014 at 2:55 PM | Chandra

Whether it is competitive across the whole 24 hours doesn't matter. It is being installed for these reasons in sunny places in the US and Oz.

What a load of codswallop ! Solar was being installed in Australia as a consequence of substantial government subsidy of installation costs and ridiculous feed-in tariffs that made it a lucrative tax-free income source for some homeowners at the expense of the 'have-nots'. Take away the subsidies and make the solar connected households pay to access the grid to "sell" their unused fluctuating power and let's watch this scam founder. Already, since some of these extortive feed-in tariffs have been curtailed, installation has dropped right off.

May 10, 2014 at 5:03 AM | Unregistered CommenterStreetcred

If tree huggers really want to kick Big Oil in the balls they should all just immediately cease all use of every - yes - every Big Oil product.

Go on, tree huggers, show us that you have the balls.

May 10, 2014 at 6:13 AM | Unregistered CommenterJimmy Haigh

Average daily sunshine hours for the UK over the last 15 years has been 3.9 hours.

And they think solar is a viable source of electricity generation in the UK. Madness!

May 10, 2014 at 6:39 AM | Unregistered CommenterNeilC

MTA and ConEdison now taking part in a study to assess the feasibility of mass storage device in their flagship property in Manhattan.


AVC/Gildemeister's CellCube will be an vital part of grid storage soon.

May 10, 2014 at 6:47 AM | Unregistered Commenterhpunnett

There's a simple test : can solar exist without subsidies or other political favours ?

May 10, 2014 at 7:28 AM | Unregistered CommenterTuppence

I've seen so many fluffy pieces along these lines that I'm sure at least one PR agency is being paid to push the story relentlessly to journalists.

May 10, 2014 at 8:13 AM | Unregistered Commenteranonym

James:
'If coal-fired power stations are so bad an idea, why is China installing as fast as it can manage?'
And Germany!

May 10, 2014 at 8:21 AM | Unregistered CommenterEddy

Eddy: and India!

Yesterday Paul Homewood provided an excellent analysis of this Times of India article.

He shows how India's planned additional 66,014 Mw of coal-based power generation would potentially increase its 2011 generation by 50% and "nearly double current [coal-based] output". He adds:

So, quite clearly, this extra capacity will have a huge effect on power output, and on coal use and emissions. …

BTW – it is also worth noting that, in 2011, non-hydro renewable electricity contributed just 3% to the total.

Funny how India's coal industry seems to have overlooked that message about their being "on the wrong side" of "a massive disruption to their market".

May 10, 2014 at 9:06 AM | Registered CommenterRobin Guenier

Dark matter is another ridiculous thing:
May 10, 2014 at 12:41 AM ptw

Do you think so? Years ago I was on holiday and I saw a talk advertised by an astronomer at some university in California. I went along and he presented results of an automatied search for dark objects passing between Earth and a star. From what I remember it was pretty convincing - it certainly was not due to a bat flying in front of the telescope.

May 10, 2014 at 9:14 AM | Registered CommenterMartin A

hur hur hur
May 10, 2014 at 12:43 AM | Unregistered CommenterMartin A

Some twat posted this under my name. Probably the same clown that posted something under Chandra's name.

I post as a Registered Commenter.

Moderator - would you care to compare the IP addresses of the 12:41 and 12:43 postings?
[You were right. Now snipped. TM]

May 10, 2014 at 9:23 AM | Registered CommenterMartin A

May 10, 2014 at 9:23 AM | Registered Commenter Martin A
In light of the increase in poster names recently I did wonder about both postings you mention as they seemed unusual.

May 10, 2014 at 9:47 AM | Unregistered CommenterSandyS

Athelstan
God/Nature/Gaia even started a research project to assist us. Particularly useful in waste disposal research.
Oklo Gabon

May 10, 2014 at 9:53 AM | Unregistered CommenterSandyS

Chandra,

Demand is shown here:

http://www.gridwatch.templar.co.uk/

This site also shows the pathetic output of the UK's windmills. You can check for yourself how demand varies and which generation methods follow that demand and keep the lights on. Watch the site for a while and then come back and tell us how good renewables are.

Also, if I was a Spanish tariif scammer I would just wire the mains input to the solar output and cut out the middle man - near 100% efficiency.

May 10, 2014 at 11:17 AM | Unregistered CommenterSteve Jones

Martin A,

I have had it in many places now that people hijacked my userid, even in disqus based environments.
On BH this is trivial of course (note IPs can easily be refreshed so do not say a lot)

otoh note that it is near certain that all past blogs will heavily be text mined. Certainly taken into account the fascist
mindset of the so called progressives. So it is actually very good that there
is not a guaranteed origin of posting. we should publicly tell each other/post our userid's password even in well working
disqus systems.after all commenting is graffitti-like we do not want anyone to be able to come after us and pinpoint identities with people (again: only our fascist faux progressives friends will want that to do with all the relaxed time they have on their hands in the quango, at our expense) the purpose of blog commenting is the content only(and amusingly seei how deeply the warmish religionists fail in ANY argument)

May 10, 2014 at 11:31 AM | Unregistered Commenterptw

so in case you wondered , my password is secret.
no seriously it is secret

May 10, 2014 at 11:32 AM | Unregistered Commenterptw

Not so sunny in Spain.
http://www.thelocal.es/20131112/spains-solar-police-to-kick-in-your-door

May 10, 2014 at 11:52 AM | Unregistered CommenterKohagan

SadButMadLad,
Large scale solar is a waste of space except possibly in low latitude arid regions. Unless there are several large breakthroughs in solar efficiency and storage of electricity, solar will always be an energy loser. Not to mention a financial scam supported by either gullible investors or tax payers.

May 10, 2014 at 11:56 AM | Unregistered Commenterhunter

OK it hasn't happened now but solar costs are dropping at not quite Moore's Law rates and at some stage will make crossover.

I expect the ecofascists to start calling for more regulation of solar soon, on the general line that they only like systems that don't work.

Of course solar can only compete because European power generation cost is overwhelmingly government parasitism (98% if nuclear cost were minimised). Difficult to think ground based solar could ever compete in a real free market.

May 10, 2014 at 12:20 PM | Unregistered CommenterNeil Craig

ptw

"Dark matter"

Any relative of the missing heat?

May 10, 2014 at 3:53 PM | Registered Commenterjamesp

“Scientific” reasons to refute the existence of God: He cannot be seen, heard, felt or detected in anyway whatsoever, though believers do say that the evidence of His existence is all around.

“Scientific” reasons to believe the existence of dark matter, even though it cannot be seen, heard, felt or detected in anyway whatsoever: the evidence of its existence is all around.

Aren’t humans odd.

May 10, 2014 at 4:54 PM | Registered CommenterRadical Rodent

I'll believe it when DECC reduce the strike price for solar from £120 to £50/MWh!

Meantime, India are planning to nearly double coal power capacity in next 5 yrs.

https://notalotofpeopleknowthat.wordpress.com/2014/05/09/india-plans-massive-increase-in-coal-power-plants/

May 10, 2014 at 5:42 PM | Unregistered CommenterPaul Homewood

Steve Jones, Gridwatch shows clearly that power demand is cyclical with daytime demand 10-15GW greater than nighttime demand. Solar power is available during the day and hence reduces the amount of conventional power that has to be cranked-up and down to meet daytime demand. These are just facts, no argument needed.

The Bishop originally said,

In essence, solar generators earn money for at best 12 hours out of 24, so they are completely outcompeted by dispatchable generators, which can earn for 24 hours a day, even if their levelised costs are the same.
This is clearly nonsense, as those dispatchable generators supplying the daytime peaks are, by definition, not operating 24 hours a day. As the marginal cost of solar electricity, once installed, is zero, conventional peaking plants which have to burn gas (etc) are at an obvious disadvantage. That is why anyone in the conventional generation business (and their boosters, like the Bishop and those here) will do their level best to stop solar from being built.

> Also, if I was a Spanish tariif scammer I would
> just wire the mains input to the solar output
> and cut out the middle man - near 100%
> efficiency.

...and achieve absolutely nothing except winning the dumb idea of the week prize.


Martin A

> dark objects passing between Earth and a star

That is not what is meant by "dark matter", although I have a feeling you already knew that. See The Death of Dark Matter’s #1 Competitor if interested.

May 10, 2014 at 5:56 PM | Unregistered CommenterChandra

Chandra - thanks for all the references.

May 10, 2014 at 7:58 PM | Registered CommenterMartin A

Chandra
Don't you answer difficult questions?
My earlier posting clearly shows that the output from solar drops rapidly away long before demand tails off into the low night time levels you are talking about. Even in California the winter sunset is before 18:00 and demand. The demand is 80% of peak from 08:00 to 22:00 and solar output rises to 50% at about 09:30 falls to 50% at 16:00. The fall off in solar is not a simple issue of it'll be OK on the night. We haven't even discussed the issue of cloudy/foggy days, or the problems with Solar power is available during the day and hence reduces the amount of conventional power that has to be cranked-up and down to meet daytime demand.

Do you think that solar produces maximum output from sunrise to sunset? A simple yes or no will do.

May 10, 2014 at 11:21 PM | Unregistered CommenterSandyS

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