Bishop Hill Levelised costs claim another victim
May 9, 2014 Energy: solar 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?
Reader Comments (111)
I suggest Chandra review the detailed power curves for Germany, which has the largest solar capacity, showing the export and import positions as well as the generation from solar, wind and other sources starting on page 154 here:
http://www.ise.fraunhofer.de/en/downloads-englisch/pdf-files-englisch/news/electricity-production-from-solar-and-wind-in-germany-in-2013.pdf
It can be seen how insignificant solar output is in winter months, contributing nothing at all to peak demand, while often simply adding to the export surplus when wind output is significant because conventional power must be maintained to balance the grid and handle the reactive load represented by wind. It can be seen that the morning and evening rush hours result in peak demand. In summer, peak solar output results in peak export for the day - exports that have proved problematic for neighbouring grids, and often achieve negative prices. The additional load on ramping up and down conventional coal and CCGT plant can also be seen. A further problem is that solar and wind output don't tone down conveniently at weekends when demand is generally much lower, again throwing the burden of adjustment on conventional power and exports.
The basic fact Chandra evades, is that without continual political favoritism, solar would be wiped out overnight. (Ditto wind). Robbins does at least address it, but with a boldface denial (either knowingly deceiving or out of ignorance, not sure which).
And as to Chandra's notion that anyone here "boosts" conventional energy ... well, this can only be described as comedic. The short of thing a desperate alarmist/green/political-correctness booster would say to try and cover his tracks. Cheap, reliable energy is what most here want, just like Joe Public. Who gives a damn who produces it?
If it were true, oil would be forced to become cheaper to be able to compete or it would disappear. The fact, however, is that oil keeps getting more expensive. But, sure, I keep hoping for the day when ANY form of energy forces oil producers to lower their prices.
Hawaii is one precinct where unsubsidized residential solar PV is economical compared with 40 cents/kWhr grid power- which explains why Hawaii still heavily subsidizes solar PV...???
California is an excellent example of anthropogenic competitiveness of solar PV. To effect a false equivalence, local government can either increase the cost of conventional electricity, or subsidize the cost of solar PV. In the case of California, government indecision (or perhaps deliberate decision) led to simultaneous implementation of both.
It would be interesting to remove all subsidies from solar PV and fossil fuels such as coal or natural gas, and also burden solar PV with the same TAXES currently paid by fossil fuels, to see where the levelized cost falls. I think that the solar PV cheerleaders would not be amused with the result.
Once solar panel costs drop to $0.00 per Watt (no, that is not a typo), the next battle over solar PV system cost will be trying to convince unions representing panel installers that they must lower their wages and become non-profit; to save the climate, of course. It will be amusing to watch the teamster thugs mixing it up with protesting Greenpeace and WWF hand-wringers.
:-)
Regardless of who does what the really worrying part is that ever increasing energy demand curve. Frankly we better hope that solar energy comes good - as well as everything else on the table!
I'm astonished though that journalists cannot grasp that as soon as solar companies become truly viable rather than bankrupt the oil companies will buy them out. They don't play favourites - it's about whatever makes money and that is based only on what we, the public, demand. It's hypocrisy to suggest otherwise.
i thik it is wishfull think that pv's will cut the line of self sufficiency
they are needed in satellites and make for nice "the Maritan"(andy weir) lecture but that is about it.
Look at them, they are flat 2D layout substrates built on very expensive pure silicon plate substrates, even your average weed can do better than that to capture solar energy
chris y: "Once solar panel costs drop to $0.00 per Watt (no, that is not a typo), the next battle over solar PV system cost will be trying to convince unions representing panel installers that they must lower their wages and become non-profit; to save the climate, of course.'
As an idealistic engineering student in the 1970s, which had the last big wave of enthusiasm for this stuff, I went to a presentation sponsored by the career office by a solar panel installing company. He told us straight up, "I hire college grads to do this because I can't afford union labor." It was the beginning for me of rethinking a lot of this stuff and learning what was really going on.
Sandy, the Bishop says solar is out-competed by conventional because conventional can run 24h. But only baseload plant runs 24h. Peaking stations run when needed, ramping up and down to match demand (hopefully efficiently, although we often hear that much conventional can't do that). Solar generation occurs during the day and offsets peaking conventional (and, because of zero marginal costs, "out-competes" it). I'll give you this though, solar sucks against peaking conventional plant that runs to match peaks in nighttime demand.
Chandra,
Did you not notice that China - a country I have visited many times for technical talks, has been installing just about every power source available? Why not note its huge investment in hydro (Three Gorges, etc.) plus its now leading-the-world skill in installing nuclear on a massive scale?
Nobody is impressed when you try to spin but part of a story.
"If renewables are so bad an idea, why is China installing as fast as it can manage?"
Well tactically, if they can feign commitment whilst pursuing their real energy policy :
http://www.reuters.com/article/2014/01/07/china-coal-idUSL3N0K90H720140107
Then we will continue to hamper our economies with punitive energy pricing
Chandra
We have had conventional methods* of covering peaks in demand for many years, it's only since things like Solar and Wind came on the scene has the grid stability been compromised and prices risen rapidly, it's no coincidence.
Even renewables, Hydro, small amount of pumped storage (Dinorwic, Ffestiniog and Cruachan) , gas turbines have been around for a long time too Alsthom