By Dave Elliott
The interim energy policy outline that emerged in 2012 after the Fukushima nuclear disaster envisaged getting between 25% and 35% of Japans electricity from renewables by 2030, with wind and solar playing major roles. A new fuller plan is expected soon, but in the meantime progress is being made with renewables, with the Japan Renewable Renewable Energy Foundation claiming that ‘Japan will be able to increase the electricity from renewables to at least 20% of its total consumption by FY2020 without putting an undue burden on corporations or on households’. (more…)
By Dave Elliott
China’s economy has been accelerating at uniquely high levels, although lately that has slowed slightly. Some say that will provide a helpful respite from the massive eco/health problems that have been created by burning so much coal and oil- epitomised by the dire air pollution in big cities like Beijing, which of late has led to major health scares and protests. China has a massive renewable energy programme, with for example wind on and off grid already at around 75GW, but it’s barely able to keep up with the growth in energy demand. So the transition to a sustainable energy future may take some time. (more…)
By Dave Elliott
Renewables have continued to grow in Germany, providing around 23% of total electrical generation from around 32GW of wind and 32GW of PV solar, most of this being locally owned capacity, including projects run by a growing number of local energy co-ops. And it works well: in bitterly cold March last year, the wind and PV were supplying about half of total electricity at one point:http://reneweconomy.com.au/2013/graph-of-the-day-wind-solar-provide-half-germanys-energy-output-88052.
by Dave Elliott
Photovoltaic (PV) solar is moving ahead rapidly, with over 100GW now installed around the world at various scales. The attractions of PV are that it is a silent operating, relatively robust and an easy to fit technology, with no moving parts or plumbing requirements. But since PV cells use specially fabricated materials they were initially expensive. However that changed as volume production increased and technology improved. Indeed PV has one of the best unit cost/installed capacity ‘learning curve’ slopes in the renewable energy field. Progress down this curve seems likely to continue given that there are many new cell technologies emerging. They will increase energy conversion efficiency and reduce unit cost, since with higher efficiencies less cell material is needed. Depending on the type, commercial silicon cells can have energy conversion efficiencies of 10-18%. More advanced cells, using more exotic materials, can achieve more, at least under laboratory condition e.g., the US National Renewable Energy Labs say copper indium gallium selenide (‘CIGS’) solar cells can be almost 20% efficient.
By Dave Elliott
The boom in shale gas extraction may dominate the news headlines, but renewable energy is also moving head rapidly in the USA. It currently supplies about 15% of US electricity, if off-grid use is included, and the potential for expansion is very large. A new report from the US National Renewable Energy Laboratory (NREL), ‘The Renewable Electricity Futures Study’ (RE Futures), found that the US renewable resource base was sufficient to support 80% renewable electricity generation by 2050, even in a higher demand growth scenario. It also looks at a 90% option, with 700GW of wind and solar PV.
To accommodate this large variable supply input, there would have to be major upgrades to the grid and up to 100GW of balancing back up/ load shifting/storage. But NREL’s hourly modeling found that, with this backup in place, demand could always be met, even at peak times, although 8-10% of wind, solar, and hydro generation would need to be curtailed e.g. at times of low demand, under an 80%-by-2050 RE scenario, and more storage would be needed in the 90% scenario.
By Dave Elliott
On May 26th, in sunny weather, Germany’s 22GW of PV solar-generation capacity supplied 50% of the country’s electricity, and around the world PV looks like it may become a major energy option in the years ahead, accelerating past 50GW of grid-linked capacity, with price parity with conventional sources not far away. Consultancy firm McKinsley says that PV prices will reach grid parity with coal and nuclear as soon as 2020. Its report, entitled ‘Solar Power: Darkest before the Dawn’, forecasts that solar PV costs will fall by an average of 10% per year through to 2020.
The German Advisory Council on the Environment (SRU) has produced a very detailed report setting out pathways for a transition to renewable electricity. It concludes that is possible to get to 100% by 2050, as against the current German government target of only 80% by then.
The SRU comments ‘In our view, the prospects for this transition are far brighter than the government would have us believe; and we are far less persuaded than the government appears to be concerning the compatibility of nuclear power and renewables. But many of the recommendations and concepts in the present report are relevant regardless of whether the goal is to achieve 80 or 100% renewable electricity’.
However, rather than going it alone, it suggest that an alliance with Denmark and Norway could be the best arrangement for generation, grid balancing and storage, for example integrating in the regions hydro for pumped storage. That was seen as possibly preferable to reliance on importing power (e.g. from Concentrating Solar Power projects) from North Africa.
Some of the scenarios rely heavily on wind power, both offshore and on-land, and also on solar photovoltaics (PV), which, on one scenario, make up a large proportion of the 2050 mix (with around 100GW of PV installed by then). However SRU claims that this is not the only option and that if demand could be reduced from 700TWh by 2050 to 500TWh, then much less PV would be needed.
It sees this as a preferable option and is critical of the way PV has been supported so far in Germany, arguing that it was expanding too rapidly and imposing unsustainable costs. The current high rate of expansion ‘would result in half the capacity that is needed for a wholly renewable electricity supply in 2050 in the high electricity demand scenarios to be already installed in 2020. This means that unnecessary capacity would be installed prematurely, which in turn would increase long-term renewable electricity costs and jeopardise acceptance of a wholly renewable electricity supply’. Consequently, it says that ‘Photovoltaic support should be drastically reduced so as to rectify mismanagement in this domain, whose current expansion rate far exceeds that deemed necessary’.
Exit from PV?
Why the change of heart on PV? Germany has been at the forefront of PV with around 19GW now in place. That, SRU says, is the problem- it’s boomed too fast, partly due to cost reductions, so that the high FiT tariffs impose too much cost on consumers. This same argument has been heard across the EU- in Spain, Italy, France, and now in the UK, all of whom, like Germany, have imposed Feed In Tariff (FiT) cut backs or capacity caps for PV. The latest German cuts range from 3-15%. Some see this as just a failure of political nerve- they say we should leave FITs alone, since PV prices will then fall, as the market builds, and the cost pass through to consumers can also then be reduced.
SRU evidently doesn’t agree and also has more fundamental problems with PV. While they note that some think PV ‘will be competitive once grid parity is achieved, with solar electricity generation costs on a par with household electricity rates, they say that ‘this assumption fails to reckon with the fact that household electricity demand and solar energy production are highly asynchronous. Households with solar panels need to be able to draw energy from the grid at times, which would significantly reduce the economic benefit of home PV installations in the (likely) event that some household electricity needs to be drawn from the grid during high rate periods. Hence the achievement of electricity generation costs that can compete with the prices charged by power companies by no means indicates that photovoltaics deserve a place in the future energy mix’.
Some might see throwing PV out of the mix as an odd idea. Economically it’s almost certain to get very much cheaper. And SRU’s technical case against PV is not that strong- PV can make a lot of sense for day-time occupancy buildings, for summer air-conditioning and for topping up night time storage heaters. More generally, although load factors are low, we are going to have to get used to balancing variable supplies, as we have more renewables on the grid. SRU may be right that PV will make it harder, but it’s a huge resource well suited to access via roof tops, easy to install and run-with no moving parts to go wrong. It may have been unwise to try to use FiTs to get its initial very high price down rapidly, but that doesn’t means the technology is rubbish. Or that FiTs are no use, if well designed, with effective price degression mechanisms.
However, it is true that, in the worsening economic climate, the FiT for PV have been seen as provocatively high and hard to defend. SRU says that further support in Germany is ‘no longer justifiable on the grounds of learning curve effects, for the market for PV installations has grown considerably and is now international in scope. Even if Germany stopped promoting photovoltaic energy, the remaining PV installation market would be large enough to allow for further cost reductions’. So, in effect, SRU is saying that, although it has cost a lot, the FiT has done its job and no more support is needed. More pragmatically they say that since the national alternative energy programme cost apportionment ‘cannot be increased without meeting political opposition, perpetuating the current photovoltaic support framework would deprive renewables of funding that have the capacity to produce electricity far more efficiently’.
In fact through, SRU doesn’t suggest abandoning PV entirely. They say that ‘in the interest of political credibility and preserving the relevant technical skills and know-how, PV capacity expansion should not be discontinued altogether’. Instead it suggests that ‘the scope of PV expansion should be kept at a low level that however still ensures that installed capacity can be adjusted to potential changes in demand. Only if a rise in electricity demand appears highly probable, PV capacity expansion should be promoted accordingly.’
So PV should in effect be kept in reserve. SRU says ‘The planning period for such a capacity expansion – which ideally would be realised as late as possible -should be keyed to the relationship between the capacity needed and the possible annual expansion rate.’ It adds ‘If projections of large decreases in PV installation manufacturing costs are accurate, this would be yet another reason to rein in photovoltaic energy support. The later PV installations are installed the lower their social cost will be’.
Some might see SRUs conclusion that ‘PV support urgently needs to be reined in’ as a capitulation to right-wing free-market enthusiasts, equally it might be seen as a sensible recognition of the limits of PV and FiTs in the current context. Most observer now agree that FiT tariff levels for PV need cutting, but the debate over how much continues- in the UK, focusing on the proposed very drastic 50% cut, with the resistance campaign’s slogan being ‘Cut don’t Kill’.
- ‘Pathways towards a 100 % renewable electricity system’, SRU
The full Department of Energy and Climate Change (DECC) review of the ‘Clean Energy Cashback’ Feed In Tariff (FiT) for photovoltaic (PV) solar installations resulted in further cuts to support – following on from the 72% cut in the tariff for PV projects over 50kW that had emerged from the earlier ‘fast track’ review.
The new cuts were prefigured in a speech at the end of October by Energy Minister Greg Barker, who, while welcoming the successful installation so far of over 100,000 PV arrays (around 300MW), said: ‘Much of the growth in PV has been as much about consumers accessing the Government backed tariff as accessing the technology. High net worth individuals chasing returns which are now easily reaching double figures at a time when interest rates for savers have collapsed to an historic low. That can’t be right.’
So DECC is planning to more than halve feed in tariff incentives for solar PV projects of 4kW or less from, in effect, December this year- reducing the tariff from 43p/kWh to 21p/kWh, which it says should yield a 4.5% rate of return. They also proposed reductions to the tariffs for PV installations between 4kW and 250kW, ‘to ensure those schemes receive a consistent rate of return’.
There’s also a proposal to introduce an energy efficiency requirement for FITs for solar PV. If the building does not meet the energy efficiency criteria the installation would receive a lower FIT rate of 9p/kWh. In addition there’s a proposal for new multi-installation tariff rates, set at 80% of the standard tariffs for individual installations, for ‘aggregated’ PV schemes- where an individual or organisation gets FIT payments from more than one PV installation, located on different sites, as in ‘rent a roof’ schemes.
Launching a consultation on the proposals, Barker said that the existing tariffs led to ‘returns for investors in solar PV that are simply not sustainable and, without action, could result in the spending envelope for the scheme rapidly being breached’ He explained that ‘If the Government took no action, by 2014-15 FITs for solar PV would be costing consumers £980m a year, adding around £26 (2010 prices) to annual domestic electricity bills in 2020. Our proposals will restrict FITs PV costs to between £250-280 m in 2014-15, reducing the impacts of FITs expenditure on PV on domestic electricity bills by around £23 (2010 prices) in 2020.’
DECC is to publish a separate consultation ‘around the end of 2011’ on ‘other aspects of the scheme including the tariffs for other FIT technologies. As part of its review of the FITs, DECC will also consider ‘whether more could be done to enable genuine community projects to be able to fully benefit from FITs.’
In a fact sheet it evidently released prematurely, the Energy Saving Trust gave an early warning of the scale of the cuts and said that under the proposed changes payback time would be 18 years for a 2.9kW system, eight years longer than at the current levels. But it said that the new rate of return, which it put 4%, was more “appropriate” than the original 5-8% rate, due to the changes in the investment market that has seen interest rates slashed.
Dave Sowden of the Micropower Council agreed that ‘they needed to recalibrate it….but if you go below five per cent then you completely wipe out free solar and social housing schemes. It just becomes a rich man’s game.’ Friends of the Earth concurred: ‘The proposals will pretty much exclude everyone who does not own their own home and have significant savings to hand from installing solar’. The proposal to backdate the changes to December also caused concern – e.g. it could impact on those half way through installation negotiations. Overall, the timing of the cuts was a big problem for developers.
However, the idea of linking supply schemes to efficiency was widely seen as making sense- it’s foolish not to sort building energy losses out first. Barker had said he wanted a new ‘whole-house approach’, including new measures to ensure that all new domestic solar PV sites meet minimum energy-efficiency standards: ‘It cannot be right to encourage consumers to rush to install what are still expensive electricity-generating systems in their homes before they have thoroughly explored all of the sensible options for reducing their energy consumption first. Frankly, such a standard should have been a pre-requisite for accessing the FiT subsidy from day one’.
He also, maybe sensibly, urged developers to move into the solar thermal market, which has seen slower deployment rates under the pilot Renewable Heat Premium Payment Scheme than those experienced by the PV under the FiT. While that may be an option for some developers, there were predictions of massive job losses in the PV sector, and a lot of resentment about the cuts. Surely if the FiT system was allowed to work, the cost would reduce as the market built, with FiT prices being ‘degressed’ continually, so consumers wouldn’t be hit hard.
The DECC report suggests otherwise- PV had boomed too fast. The consultation report notes that, as at September 2011 ‘ 255MW of solar PV had been registered for FITs. This compares to the 94MW that was originally projected for this point in time’, driven mainly by ‘the reduction in the cost of PV systems’. Barker claimed that ‘The cost of an average domestic PV installation has fallen by at least 30% since the start of the scheme – from around £13,000 in April 2010 to £9,000 now’. In addition, DECC noted, there were increased returns available from solar PV due to the ‘13% increase in retail electricity prices since April 2010, which has increased the savings from avoided consumption of imported electricity’. It added that multiple installation schemes had also played role in the uptake of FITs.
All of this threatened to push the cost passed on to consumers up rapidly- although that has to be put in perspective- DECCs impact report indicates that, at present, the FiT added just £1.40 p.a. to typical household bills. But what about the benefits, not just the cost savings for those on the scheme, but the climate benefits, which all share, and the indirect cost saving since less fuel has to be used nationally?
More specifically, there were social benefits. As DECC admitted, some multiple installations schemes enabled ‘those who cannot afford the upfront capital costs of purchasing a PV installation, including the fuel poor, to share in some of the benefits’, as in ‘free solar’, rent a roof schemes.
However DECC noted that some felt that for these, ‘the principal beneficiaries are generally the third parties rather than the hosts of the generating equipment.’ DECC say that ‘the returns available to such schemes are higher than in the case of individual installations. We therefore consider there is a strong case for adopting a different approach and tariff for multi-site generators of FITs’.
So it’s cuts across the board. It may be true that the UK FiTs were quite generous to PV. But then the FiT system was a new venture for the UK. DECC says that the new PV Tariffs are now similar to those in Germany. That’s not quite true. Despite recent cuts, most of the German tariffs are still larger, and the German FiTs have been running for many years, so that PV has a well-developed market. Here it is still in its infancy. And now it could stay that way.
DECCs consultation report is at: [www.decc.gov.uk/en/content/cms/consultations/fits_comp_rev1/fits_comp_rev1.aspx
By Carey King
This recent report from Lawrence Berkeley National Laboratory shows that there is evidence that California home buyers and sellers value photovoltaic solar systems installed on residential homes. This concept seems like it should obviously be true – that if you have an additional feature on an otherwise equivalent house it should sell for more money. However, various home owner associations around the United States often have arcane rules about what a homeowner can and cannot do to their home. Oftentimes installation of PV panels are frowned upon in some neighborhoods, and that is a tremendous shame. If someone is willing to pay for PV panels, which is still not the most effective investment for saving money from purchasing grid-based electricity, then that home owner should not have artificial barriers put into his/her way.
This and future studies will provide evidence that PV panels add value to homes just as do other features that do not provide or save energy (e.g. granite counter tops and tile floors). There are enough difficulties trying to develop and deploy new energy technologies, and we do not need attitudes to be one of these difficulties. There is very little that is inherently more beautiful about a normal roofing material versus a PV panel or even solar hot water panel. If you get the chance, tell your home owner association to remove barriers to energy efficient and energy-producing systems. I for one made sure to move into a neighborhood that didn’t have a homeowner association.