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Solar rises, nuclear falls

January 5th, 2012

My piece for the National Interest is now up. It ran under the headline “The end of the nuclear renaissance”, but that’s only half the story and probably the less interesting half. The real news of 2011 was the continued massive drop in the price of solar PV, which renders obsolete any analysis based on data before about 2010. In particular, anyone who thinks nuclear is the most promising candidate to replace fossil fuels really needs to recalibrate their views. There’s a case to be made for nuclear as a backstop option, but it’s not nearly as strong as it was even two years ago.

Feel free to comment here or at NI.

Categories: Economic policy, Environment Tags:
  1. January 5th, 2012 at 12:45 | #1

    Nice to see it John. In my experience it’s quite unusual for an economist to be up on the play. Rapidly Falling PV prices was big news about 6 (and 12, and 18) months ago but for an economist to write about it so quickly since markets started pricing in the data is quite remarkable.

    I’d not be giving up on nuclear too soon though. There’re a lot of vested interests with their tentacles in the public pocket.

    pop

  2. Hermit
    January 5th, 2012 at 12:47 | #2

    OK I’m calling the bluff of solar enthusiasts; renounce all subsidies and mandates. That is no more feed-in tariffs, renewable energy certificates, green development grants and sanctioned renewable energy targets. We don’t need them any more.

  3. January 5th, 2012 at 13:19 | #3

    @Hermit

    ah, gee, can we wait until I’ve had a chance to profit from them?

    p

  4. Peter Smith
    January 5th, 2012 at 13:28 | #4

    One point though – we really need Gen IV reactors (or whatever they are called today) to use up the current high-level waste and convert it into stuff that is safely disposable. The fact that they will generate some power too is just incidental.

  5. Steve
    January 5th, 2012 at 13:31 | #5

    Its been quite amazing watching the PV price falls and increase in installations over the last half decade.

    Couple of quick observations:
    - the price drops seem to be due to economies of scale, production shifting to countries with cheap labour costs (ie China) and improvements in manufacturing processes, rather than any great change in technology – single layer crystalline silicon screen printed cells are still the dominant technology (as has been the case for three decades), although thin film technology continues to grow (albeit at least a decade or more behind early predictions for it).
    - while I have no qualms about industrial or commercial scale systems, I would hazard a guess that in countries where there has been a very rapid subsidy-led increase in domestic rooftop PV installations (such as in Australia, particularly NSW) the standard of installation has probably dropped, with lots of new, inexperienced installers joining the market to take advantage of the goldrush.
    - Still a long way to go – with only about 60 GW(peak) of installed capacity worldwide, that’s not enough to power even just Australia, and still a ways off encountering big difficulties for grid management.
    - Subsidies and or a feed-in tariff are still needed, to drive the market. You have to get a great install price and then use some generous assumptions to get a reasonable payback time on a PV system without any subsidies.

  6. Sam
    January 5th, 2012 at 13:44 | #6

    @Hermit
    As long as we use the real price for carbon (according to JQ, $50 per tonne), I’d be happy to remove other subsidies.

  7. John Quiggin
    January 5th, 2012 at 13:46 | #7

    @Sam – SNAP! I was just writing exactly the same thing, with the proviso that subsidies for nuclear in the US and elsewhere should also go.

  8. John Quiggin
  9. Ikonoclast
    January 5th, 2012 at 14:04 | #9

    @John Quiggin

    Double SNAP! – with the proviso that subsidies for fossil fuels should also also go.

  10. Ikonoclast
  11. John Quiggin
    January 5th, 2012 at 14:24 | #11

    OK, Hermit – it seems as if our cards are on the table, so it’s time to compare hands.

    Would you support the cancellation of nuclear loan guarantees in the US, subsidised deals like UAE/S.Korea and publicly mandated nuclear programs like that in China, conditional on a $50/tonne carbon price?

  12. Fran Barlow
    January 5th, 2012 at 14:48 | #12

    @John Quiggin

    I’d be happy for all subsidies for specific installation/development (as opposed to R & D) to go on all technologies, subject to there being no technological bars to any energy technology — all constraints to relate purely to technology neutral environmental footprint feasibility questions.

    As an alternative …

    Where there are significant capital cost questions, I’d be happy for any technology that met proper technologically neutral environmental, schedule, technical and operational feasibility tests and due diligence to be granted loan guarantees up to a certain agreed value per GW. These would be available, in theory, to geothermal, tidal, wave, wind, nuclear, solar thermal, PV or any technology or combination of technologies that would pass muster. All technologies would have to be able to show credible plans for decommissioning of plant and equipment and storage of waste at minimum hazard to the biosphere for at least 100 years.

    All subsidies to fossil fuels would also be removed.

    An independent commission would oversee the drawing up and measurement of all developments in which state funded loan guarantees were mooted to ensure that value for money was being obtained. It would also report on developments in energy technology.

    Fair enough?

  13. Hermit
    January 5th, 2012 at 14:50 | #13

    @John Quiggin
    Good question I think the answer would be some kind of least cost combination. Relevant variables include the gas price and the cost of energy storage which both nukes and renewables need to cope with fluctuations. I think at $50/t for CO2 and no technology specific quotas then nuclear would get the lions share of the generation mix based on long run carbon taxed average cost. An optimum mix for 2050 Australia might be something like coal baseload 15%, nuclear baseload 40%, unsubsidised wind power 20%, open (peaking) and combined cycle gas 10%, hydro and biomass 5%, solar thermal with storage 5%, PV 5%, wavepower & geothermal assume nil. The problem has stochastic energy flows and unknown prices. We only know CO2 must be 20% of current levels.

    BTW the subject of subsidies needs some rules. For example Australia’s diesel rebate is more of a tax refund than a cash giveaway. Low power prices to aluminium smelters traces back to interstate rivalry I believe. A lot of US nuclear funding was for the military and won’t happen again.

  14. Fran Barlow
    January 5th, 2012 at 14:50 | #14

    And I assume an explicit carbon price of at least $AUD50CO2e rising incementally to $AUD100CO2e by 2020

  15. John Quiggin
    January 5th, 2012 at 15:13 | #15

    It appears we (that is, most commenters here) are agreed on the policy issue, where discussions like this might have some marginal and peripheral impact on the actual outcome (at the very least, most people reading this have a vote). By contrast, I (like, I assume, everyone else here) have no influence at all on the investment decisions of electricity generators.

    So, we should just push for a higher carbon price, and a corresponding winding back of all kinds of subsidies, in whatever venues are open to us. There is little point in arguing about what investments would be likely to be more preferred if that push were successful.

  16. Fran Barlow
    January 5th, 2012 at 15:40 | #16

    @John Quiggin

    So, we should just push for a higher carbon price, and a corresponding winding back of all kinds of subsidies, in whatever venues are open to us.

    Pretty much, with a minimum of exception from carbon pricing and absence of free permits, a maximum of due diligence in “offset” schemes, and a removal on any express technological bars.

  17. Robert Merkel
    January 5th, 2012 at 16:17 | #17

    John, that’s great, but there’s something missing from your analysis – what happens to the cost of grid electricity once solar parity arrives?

  18. frankis
    January 5th, 2012 at 16:35 | #18

    @John Quiggin
    Yes – there’s a certain charm to keeping stuff simple, probably not uncorrelated to the fact we’re simple-minded creatures.

  19. January 5th, 2012 at 16:44 | #19

    More importantly, what happens to the cost of 2D TVs once once 3D TVs reach price parity? Currently there is a huge amount of infrastructure devoted to building and distributing 2D TVs. We can’t do away with this infrastructure because a large portion of the population feel sick, get headaches, or throw up when watching 3D TV. As fewer 2D TVs are sold, manufactuers and distributers will have no choice but to increase the cost of 2D TVs to make up for the shortfall in sales. So while 3D TVs will have gotten cheaper, 2D TVs will become much more expensive and the price rise in 2D TVs will cancel out any benefit from decreased price of 3D TVs.

  20. Sam
    January 5th, 2012 at 17:33 | #20

    @Fran Barlow
    I hate to break up the warm glow of agreement, but I feel I should put all my cards on the table. I would still support the ban on nuclear in Australia even if we were seeing the exact opposite kind of economic development. That is, even if solar had stagnated, while nuclear had got an order of magnitude cheaper, my position would be unchanged.

    The risk of catastrophic meltdown, routine small radioactive releases into the environment, and moderate exposure to some nuke workers make nuclear very much a second best option in my view, even were the electricity practically free. I simply don’t believe the safety claims made by the other side, especially after Fukushima. In poor countries, where lives depend on economic growth, perhaps they’d have no choice and nukes should prevail. Being as rich as we are, and with as much sun as we get, I’d prefer just paying 50c/KWh for the luxury of not getting cancer. Fortunately, the economics seem to be on my side of the argument anyway, so the point is moot.

    So my ideal policy position is

    1) No commercial reactors in Australia ever.

    2) No subsidies to anyone.

    3) A real carbon price.

  21. January 5th, 2012 at 17:33 | #21

    @John Quiggin

    Snark? Moi? :-)

    ok ok, so i missed your earlier posts. Consider me admonished and remorseful.

    I did read this today (a la Peter Smith’s comment above):

    http://bravenewclimate.com/2012/01/05/plentiful-energy-ifr-book/

    p

  22. Robert Merkel
    January 5th, 2012 at 17:45 | #22

    @Ronald Brak

    Your analogy misses the point. Unless you plan to take Australia off-grid entirely (call me when you’ve priced the batteries) you still need pretty much the same grid you had before, spread across fewer Kwh sold.

    Now, maybe you can cost-shift to those who haven’t installed solar cells. But the price still has to be paid.

  23. January 5th, 2012 at 18:07 | #23

    Cool! I was able to predict the future!

  24. rog
    January 5th, 2012 at 18:13 | #24

    Dropping subsidies would be an appropriate response to calls for austerity and (more) conservative fiscal management. This should nclude govt and other non market guarantees. Should libertarians and other cultists adopt this strategy nuclear power should/would be dead and buried.

  25. Ernestine Gross
    January 5th, 2012 at 18:24 | #25

    Happy New Year!

    Great article. Good news on many fronts, including yet another example of mainstream economics (as distinct from dominant macro-economic ideology- ‘schools of thought’) trumping corporatist public relations talk as well as a certain Lord’s theories).

  26. Sam
    January 5th, 2012 at 18:54 | #26

    What lessons do people take from the Solyndra collapse? To me, it seems that government helps best when it is a customer to industry, not a financier. I’m prepared to be a bit of a free-marketeer on this. Is my position reasonable?

  27. John Quiggin
    January 5th, 2012 at 19:31 | #27

    @Robert Merkel

    Your analysis assumes that all solar power is generated from rooftops & similar distributed sources – otherwise, there’s no effect on the grid relative to existing sources. In reality, I expect a lot of solar PV will be generated in desert locations, and transmitted via HVDC. That requires some extra transmission investment (one reason we need a carbon price, even when generation costs reach grid parity), but doesn’t require any change in distribution networks.

    More importantly, the grid has to be able to carry peak demand, which is precisely what solar will reduce. So an increase in distributed solar will reduce the need for further increases in distribution capacity, which have driven the big increases in the cost of electricity we’ve seen.

    There are some problems with the current design of the grid, which is ill equipped to handle reverse flows of electricity. Similarly the transmission network and pricing structures have been set up with the existing generators in mind. But these are really second-order issues when we are looking at a timescale of decades.

  28. pablo
    January 5th, 2012 at 19:42 | #28

    Sam @25. Reasonable yes, in reality probably no. Today the Australian Coal Association asked the Federal Government for more assistance in developing CO2 sequestration, in particular for a share of the recently announced assistance for alternatives (AFR Thursday 5). The Greens oppose it but my guess is that Gillard will find a way to placate the coal sequesters. Maybe she could tie it to more rigour on controlling fugitive emissions of methane from existing and future coal mines.
    Also I wonder what solar panels would cost if aluminium smelters paid a ‘market’ price for their electricity? On top of a C tax next July it would be a more realistic figure.

  29. Robert Merkel
    January 5th, 2012 at 20:27 | #29

    @John Quiggin

    At the risk of revisiting very old stoushes..

    Retail grid parity, I’ll pay. But wholesale grid parity (even assuming carbon pricing)? I can’t retrieve the paper at the moment, but it appears that even with $1/watt PV modules, one estimate that I’ve been able to dig up suggests a 3% cost of capital to produce electricity at 6.4 c/kWh in the Gobi desert and 5.3 c/kWh in the Sahara. Australian solar PV would presumably be somewhere between the two, and that’s in the ballpark to be competitive. But 3% cost of capital? Can I borrow money at that rate, please?

    Solar cells placed to maximise daily energy output produce their maximum output at noon (assuming a cloudless day). 1pm, daylight savings time, and drops off quite a lot after that. The faintest of clouds in the sky (which can still occur on very hot days) can also drop the output a great deal.

    Peak demand (in Victoria, at least) occurs on stinking hot days around 4:30 pm or so.

    Amongst other things, this suggests that solar panels (if not steerable) should be oriented to the north-west, not the north.

    But it also suggests that you won’t be able to underinvest in your grid on the basis of widely deployed small-scale PV, unless you also factor in a lot of demand-shifting technology which is conceptually simple but would take a while to deploy (see stoush on nuclear thread).

  30. Paul G. Brown
    January 6th, 2012 at 03:48 | #30

    As someone who had some time ago settled for the conclusion that “nuclear power is the least bad of a number of bad alternatives”, I just want to say that the declining capital costs of solar are changing the balance.

    But that said, I disagree that we should ban nuclear. Rather, I think we should try as hard as we can to price inputs appropriately, and let the technology develop accordingly. If nuclear power does provide a cheap, safe and efficient power source, more power to them. I’m OK with setting the safety bar and long-term costs as high as it needs to be.

    I also suspect we’re about to learn some unpleasant truths about the unintended environmental consequences of widespread solar deployment. New technologies bring new problems.

    Still. All rather heartening.

  31. Fran Barlow
    January 6th, 2012 at 05:47 | #31

    @Paul G. Brown

    I largely agree with Paul’s framing of the issue above.

  32. Hermit
    January 6th, 2012 at 07:21 | #32

    A question that has been posed by others is how much PV could we use if it was free? That is 0c per kwh. We could plaster every garden shed and dog kennel with panels and store the excess daytime output for night and overcast conditions. However we could be looking at 20c per kwh to retrieve that energy from a battery type system. Few parts of Australia have the option of mountain storage of pumped hydro so that option is limited.

    The other option is gas fired electricity for night and cloudy conditions. That is we use all the free PV electricity when we can and switch to gas fired when we can’t. The wholesale cost would be about 13c per kwh in 2012 but by 2050 as global gas supplies dry up the cost of gas generated electricity could be nearer $1 per kwh. The fact that daytime PV needs either energy storage or gas fired backup means it can never be truly cheap when the shadow costs are factored. It’s the price of intermittency.

  33. Ikonoclast
    January 6th, 2012 at 07:23 | #33

    @John Quiggin

    JQ writes: “I expect a lot of solar PV will be generated in desert locations, and transmitted via HVDC.”

    I absolutely hope you are right, JQ. When I see this happening, in serious quantities, I will know (as well as any human can know anything) that we have turned the corner and might just save the climate from AGW.

    In the (recent) past, I was a big advocate of solar convection towers (SCT) for this desert power generation. It seems however on efficiency grounds (especially surface collection area to power generated but very likely on cost too) that SCT cannot compete with PV. SCT need a large collection apron (black tarmac covered by a greenhouse set-up). The advantage of SCT is that they can produce power (even more power) at night as the temperature differential between ground level and 500m to 1000m altitutude is greater at night. Whether this advantage of SCT offsets the significant day time advantage of PV I do not know.

    Does PV also outperform solar concentrating arrays?

    I admit I am surprised by the apparent imminent victory of PV in the large-scale generating race. I thought SCT would ultimately be the large scale solution. On the other hand, as one of my old workmates used to say; put solar PV on roofing material and the entire roof of every new house in Australia can generate power. That would be a lot of power.

  34. John Quiggin
    January 6th, 2012 at 07:55 | #34

    As I’ve pointed out many times, the problem with nighttime power at present is that we have too much of it. That’s why it’s offered at giveaway prices. The adjustment to a different pattern of supply will take time and a variety of changes in network structures, but this kind of change happens all the time. It won’t be costless, but it also won’t be the end of industrial civilisation as we know it, or even a noticeable drag on the rate of economic growth

    At current growth rates, the annual *increase* in output is around $40 billion, four times the *total* revenue from the current carbon price. If a price of $50/tonne were phased in over a few years, the effects would barely be noticeable.

  35. Fran Barlow
    January 6th, 2012 at 07:58 | #35

    @Hermit

    While I’m certainly in the skeptical camp on PV scaling up to do the work of fossil hydrocarbon thermal plants, your reasoning on price seems flawed.

    The bulk of demand is during the day. If the price of night usage went up to $0.20kWh retrieving from batteries for after dark, the total end user cost of power on demand would not be onerous.

    Of course, it’s the non-household usages with which one needs to be concerned.

    Pumped storage is certainly possible — we have a huge coastline and even some locations where getting elevation cheaply would not be a huge problem. We’ve also got some quite deep mines which could be modified for such usage. It would be very expensive up front but amortised over 40-50 years much less so.

    Politically, there would be wailing and gnashing of teeth over such a big budget item, but technically, it would be viable.

  36. Fran Barlow
    January 6th, 2012 at 09:13 | #36

    Regardless of the application of solar to industrial-scale power production, I do want to say that news of falling costs for PV is very welcome.

    I caught some of Foreign Correspondent the other night, and the chap was wandering about Bhutan, looking for some fungus — I kid you not. He came across some nomadic folk living in a tent on a windy hilltop. They had a portable solar panel supplying them with, presumably, some low marginal cost power that simply could not have been supplied any other way.

    In a seprate story the other day I saw some shots of an aid project — in Sierra Leone I think — and again, the locals had solar panels supplying light, power for mobile phones, and so forth.

    Personally, I like the idea that scaling up solar panel production may have the consequence of providing relatively cheap power (and indirectly, other services of importance, like communication, lighting, hot water) to marginalised people in the remoter parts of the developing world and if that means that I personally have paid more for power here, I’m entirely relaxed about that. If this is one of those cases where ‘trickle down’ really has worked as imagined, then I’d say that was a very good thing.

  37. Troy Prideaux
    January 6th, 2012 at 09:34 | #37

    @Fran Barlow
    [in violent agreement] Although – and it’s not an area I keep a close eye on – I was under the impression that some or many of these PV cell producers were on the financial brink in 2011?

  38. paul of albury
    January 6th, 2012 at 09:38 | #38

    Trickle down often works with technology, perhaps less so with money. But it’s unlikely outside 30s Science Fiction to happen with nuclear. It’s an interesting advantage of solar. And it makes it more difficult to monopolise – there are options apart from engaging with large corporate providers.

  39. quokka
    January 6th, 2012 at 09:43 | #39

    @John Quiggin

    The publicly available details of the Moree PV farm, said to be one of the largest in the world are as follows:

    Capital Cost: 0ver $900 million
    Nameplate Capacity: 150 MW
    Capacity Factor: 30%
    Technology: One axis tracking PV
    Storage: none
    Completion: 2015

    Scaling this up to generate the same amount of electricity as 1GWe nuclear would cost about $18 billion – over three times the capital cost of the supposedly expensive EPRs (with substantial time and cost overruns) being built in Europe. The PV farm would have an expected LCOE of $0.20-0.30/kWh.

    No doubt that lower panel cost and some learning would drop that $18 billion back of envelope figure considerably, but it would need to be by a factor of nearly 3 to become roughly equal to the most expensive nuclear. And then it still is not reliable.

    Apparently, Moree is a good solar location. Presuming we have a global perspective, the economics of PV will be a lot worse in many places than at Moree. To declare the The End of the Nuclear Renaissance, obsoleted by PV the very least that is required for starters is the the LCOE of PV is comparable to that of nuclear in all the worlds major population centres. That’s just for starters, then we could move on to the as yet unsolved issues of short term storage at some reasonable cost. And move on to the extremely thorny (and very likely insoluble) issue of what to do in climates such as northern Europe where PV exhibits extreme seasonality that is inversely correlated with seasonal demand. The high winter seasonal demand in Northern Europe can only be expected to grow if the required transition to heat pumps and resistive heating occurs. This is a big issue – in Scotland for example nearly 50% of end energy use is for heating.

    The issues are so much bigger and more complex that $1 per W panels.

  40. Hermit
    January 6th, 2012 at 10:18 | #40

    Quokka is one of many to suggest an all renewables grid system would cost triple that of a nuclear based system but with less reliability. Some will say Fukushima proves nuclear is not reliable. Given that 20,000 people are dead or missing from the Japan tsunami and quake while the radiation death toll so far is 0 people I’d be prepared to take the risk.

    Pricy solar installations like Moree will require backup generation that is immune to the weather. That means even more capital or fuel use for a given output
    http://www.smh.com.au/environment/weather/moree-residents-threatened-by-floods-20111128-1o1wu.html

  41. quokka
    January 6th, 2012 at 10:24 | #41

    @Troy Prideaux

    I don’t know about how many PV panel manufacturers are “on the brink” and should such circumstances exist who’s going to be entirely forthright about it anyway? Notably BP has recently dumped it’s PV panel business.

    What is known is that there is currently a glut of panels on the world market and prices are depressed. Manufacturing facilities are running under capacity and planned scaling up has been dramatically reduced in 2012.

    I don’t know what PV panel prices are going to be in five or ten years, but I would suggest that even a modestly conservative attitude to risk would be to wait a few years to see how this all sorts itself out. There is rather a lot at stake here. Sometimes all I see are appeals to the X^Y key on a calculator backed by faith in the prophet Moore.

  42. quokka
    January 6th, 2012 at 12:13 | #42

    Prof Q suggests in this article that one consequence of the Fukushima accident is that there will be costly redesigns of the current Gen III+ nuclear power plants on offer to better deal with decay heat that caused the Fukushima accident. I have seen no substantial evidence of such and invite anybody to present it together with some estimates of what such purported costs are.

    The AP1000 has received NRC design approval, apparently without any major post Fukushima redesign work. There is apparently no such redesign work demanded by the UK regulator for the EPR whose design approval is pending and immanent. I have seen one report about some changes to the Flamanville project demanded by the French regulator, but it is far from clear that this will have a major impact on the economics. In China the outcome will most likely be an accelerated transition to Gen III+ designs, in particular the AP1000 and/or derivatives, but that was very likely to happen anyway.

    The bottom line is the decay heat problem has been known “for ever” and considerable effort has been put into dealing with it in more modern designs – well before the Fukushima accident. In other words the claimed “redesign work” has already occurred and is factored into the cost pre-Fukushima. Regulators apparently consider that it is satisfactory for designs such as the AP1000.

  43. John Quiggin
    January 6th, 2012 at 12:33 | #43

    @quokka
    I’m not sure whether you’re not paying attention to the news, or just ignoring evidence that doesn’t meet your predetermined view. As an example of a shutdown directly traceable to Fukushima, Google tosses up:
    http://www.dallasnews.com/business/energy/20110419-nrg-ends-project-to-build-new-nuclear-reactors.ece

    Note that it was not only TEPCO’s financial problems but the NRC safety review that killed this project, which was probably the most promising candidate to be built after the two AP1000 sites mentioned in the post.

  44. PeterM
    January 6th, 2012 at 13:22 | #44

    Hi Quokka.

    Despite the dropping costs of solar panels the, market is going bullish on utilities with substancial nuclear generation capacity. I guess you can put your money where you month is by putting some dollars into stock recommended in the following Forbes article:

    http://www.forbes.com/sites/thestreet/2012/01/05/5-stocks-that-will-have-investors-going-nuclear/

    If the article is correct, you could do pretty well out of it. From what I can see, the return seem to be much better than investment in photovoltacic. Even PV companies which seem to have relatively good technology like First Solar are generating massive negative returns. (And then there is Solyndra!) It seems like the Chinese are flooding the PV market with silicon below cost, so the drop in prices may just be a marketing tactic to monopolise the market. (Bloody captialists that they are!)

  45. Mel
    January 6th, 2012 at 13:47 | #45

    Fran #36

    You really don’t have to go to the windy hilltops of Bhutan to find people getting all their power from solar. My elderly next door neighbours have been solar only for 40 years, not because they are hippies but because the cost of getting the grid extended to their house when they built it was was prohibitive. Even today many “remote” houses in my central Victorian area are off the grid due to cost considerations.

  46. Happy Heyoka
    January 6th, 2012 at 13:55 | #46

    I’m someone on the fence with nuclear power – it seems that even as we develop safer and cleaner fuel cycles, the human element is always the problem (eg: incompetent Japanese regulators, the usual big company bullshit with TEPCO). Personally, I hope that R&D continues but that doesn’t fix the human problem…

    As I understand it, Chinese manufacturers of PV and associated electronics have had a windfall from heavy government subsidies and strong domestic sales. That’s great news for the environment and consumers – the down side is that a bunch of innovative companies in other countries are finding it pretty hard to compete with that (especially given domestic economics in places like the USA and Germany) – have a read about the current fortunes of companies like SMA.

    The other upside for solar power is the “NIMBY” factor – large scale solar plants are pretty inoffensive… while coal mines, nuclear plants and even wind turbines have fairly active lobby groups opposing them.

  47. Ben
    January 6th, 2012 at 14:52 | #47

    @Hermit

    OK, you’re on. Can we renounce fossil fuel subsidies while we’re at it?

  48. Hermit
    January 6th, 2012 at 15:13 | #48

    @Ben
    Sure but you may have seen my comment that what some claim are FF subsidies are arguably not so. For example the diesel rebate is essentially a partial fuel tax refund to those eligible. Below market electricity prices paid by aluminium smelters I think are the result of interstate rivalry to attract jobs. Non-indexation of fuel excise and car fringe benefits tax are a bit of a stretch. However I would like to know how much Infrastructure Australia is contributing to FF promoting projects like the Gladstone harbour development. That kind of info seems to be hidden behind a veil of fog and I suspect the amounts are large.

  49. Chris Warren
    January 6th, 2012 at 15:30 | #49

    @PeterM

    This could be a furphy. There is no way of determining “cost”. What is the evidence that China is selling below cost?

    My guess is; you do not know what Chinese costs are. So presumably all this is just a Western winge.

    Anyway, I understand that Western costs are so high because BP Solar has purchased PV intellectual property rights and other producers must now hike their selling prices above costs.

    You cannot winge about Chinese economics if you accept free trade. If Chinese production is truly unfair, then tariffs are the only recourse.

  50. Troy Prideaux
  51. PeterM
    January 6th, 2012 at 16:04 | #51

    @Chris #48

    I’d suggest that classical economics says that costs should be some where near prices. (Ignoring monopoly rents, externalities etc.) But these classical market conditions definitely do not apply in the PV market at the moment.

    You are spot on about me not having a clue on China’s PV cost structure but neither does anyone else outside the Chinse PV industry. Unless you have some inside knowledge, I’d suggest you don’t know the real cost of PV manufacture in China either. The place is completely opaque. I don’t think they have made any manufacturing break throughs so my guess is their price advantage is coming from the sweat off their population’s backs. Mainly, through cross subsidising the capital expenditue on Silicon Foundaries and the like. Maybe there is a contribution from the violation of the PV intellectual property rights, you mention. All in all, I cannot see the situation resulting in a viable, innovative, sustainable PV industry in the long term.

    For these reasons, I can’t see any case for putting money into PV firms. Still, it early days yet! If you want to put your money into the PV industry, don’t let my China bashing stop you.

  52. January 6th, 2012 at 17:44 | #52

    John, There is a simple case for choosing a mix of power sector technologies given the marked changes in solar costs and the fact that the degree of economies of scale based on standardised technologies has not really been tested. Its a portfolio issue with large lumpy investments.

    I think CCS should also be pursued for some time yet given the technological uncertainties associated with it. There is obviously a case for public investments in all these technologies and for cooperative international efforts to determine where cost efficiencies are converging to.

    Its too early yet to declare a win for solar. The race isn’t finished.

  53. Greg
    January 6th, 2012 at 19:51 | #53

    @Sam
    The lesson to draw from Solyndra is this:-

    If you are manufacturing a high-volume commodity item sold to engineers, don’t use a high-cost process and insist on a non-standard size and shape.

    Solyndra went bust because its product was not competitive. That’s how markets are supposed to work.

    Should the US government have guaranteed loans to Solyndra? In an ideal world – one in which there is a $50/tonne price on carbon, no externalities, and no subsidies for anything – perhaps not. Given the political realities, absolutely. And if anything it should be argued that there have been too few Solyndras, not too many. The programme hasn’t been aggressive enough. But people don’t understand venture capital.

  54. Greg
    January 6th, 2012 at 20:47 | #54

    I wouldn’t write off nuclear entirely (for the rest of the world, this is. It’d definitely be silly for Australia to go nuclear before a decade has elapsed, and everyone else has shown that it’s a bad idea).

    Personally I much prefer solar PV. The idea of building big kettles to boil water – for that’s what nuclear reactors are – seems so Victorian, so teak-and-brass. And all that digging and delving busywork to get the ore – so unnecessary-seeming, these days. That was Jules Verne’s future; it doesn’t seem like ours.

    PV, on the other hand: no moving parts, except the electrons and holes in the semiconductor. It seems more modern, somehow; and at the same time timelessly mystical. Get things done by sitting in the sun! Zen, or perhaps Tao, tapping into the flow of chi. Anyway, to me there’s no comparison aesthetically.

    But…

    Politicians like – greatly desire – monuments to themselves, things they can stick a brass plaque on, saying “The Hon. Hilda Baggins opened this facility on 1/4/2017″. Can they do that with nuclear? Yes. With PV? Not so much.

    No doubt you’re inclined to write this off as facetious and bringing down the tone of the conversation here, but reviewing the history of infrastructure might change your mind. Political ego is one of the larger forces in the world – quite large enough to overwhelm common sense or economic soundness, or aesthetics.

    And in the end the important thing is to get off coal. If that’s most easily done by (metaphorically) winching out the coal furnace and smokestack and dropping in a reactor, then so be it. I’ll be watching for progress reports from the UAE.

  55. January 6th, 2012 at 21:50 | #55

    I am wondering if Australia will build large amounts of grid connected PV in deserts and use long distance HVDC to get the electricity to coastal cities. Maybe it won’t be considered worthwhile. If a HVDC transmission line was built across a desert anyway, connecting desert PV to it would be pretty straight forward, but I’m not sure if it would be worth building long distance HVDC lines just for the purpose of building desert PV. This is because Australia is so darn sunny the desert isn’t that much sunnier than population centres. Looking at Queensland, PV will only generate about 14% more electricity in Cloncurry than it will in Brisbane and Cloncurry is almost the sunniest place in Australia. I don’t know how much long distance HVDC transmission lines cost, but they may not be worth it for for a 14% difference, particularly since there would be about a 5% power loss from Cloncurry to Brisbane.

    PV out around Moomba will produce nearly 30% more electricity than it will in Melbourne, so this would be more worthwhile, but it’s only about 14% more than what PV will generate in Mildura, or about 12% more with HVDC transmission losses, and Mildura is much closer to Melbourne.

    Geographic dispersion of PV has definite advantages, but I don’t know if it will be considered worthwhile given Australia’s low carbon price and the large amount of existing fossil fuel generating capacity that will be sitting around ready to meet demand once the spot price of electricity goes above the combined cost of fuel and carbon price.

    The most important factor determining how much grid PV will be built is probably competition with point of use PV. At three dollars an installed watt, lots of people with a reasonable discount rate should be able to make money from point of use solar. However, since grid PV is only worth wholesale electricity prices rather than retail electricity prices, by the time grid connected PV is competitive with other grid generating capacity, there might be an awful lot of point of use solar installed. Maybe enough to lower electricity prices during the day and damage the economics of grid connected solar.

    Grid connected solar potentially has very low installation costs and if built on grazing land the cost of land is insignificant. The land could even still be used for grazing if the panels were spaced out. But point of use solar also has the potential for very low installation costs as well. If solar panels are built into roofing material and installed during building construction, the installation cost could be very low. After all, the roof and its installation would have to be paid for anyway and the electrical connection could be done along with the rest of the building’s wiring.

    So, maybe a world with cheap PV will be a world without much desert grid connected PV and maybe it will also be a world without much grid connected PV at all. If the installed cost of PV gets low enough we may simply have a lot of point of use PV and simply let the price of electricity drop down to zero early in the morning after sunrise and on mild sunny weekends. If solar PV is cheap enough and the cost of infrastructure to send it where it might be more valuable is high, then this might be the cheaper option. Of course, in a world where the price of electricity often drops down to zero, but with reasonably high prices early in the evening or on cloudy days, it might make it worthwhile to invest in thermal storage of the sort developed for concentrated thermal solar power, provided the cost is low enough. Instead of concentrated sunlight these would use electrical resistance heating to heat the storage medium when the price of electricity is low. If practical, unlike pumped storage these could be built small and local, which would help avoid the need to build long distance transmission infrastructure.

  56. Chris Warren
    January 6th, 2012 at 22:05 | #56

    @PeterM

    Yes – economics says one thing – reality another.

  57. Hermit
    January 7th, 2012 at 08:33 | #57

    I think any PV energy storage system would have to have a round trip efficiency of at least 50% and not require site specific advantages. One system with 7% efficiency is PV to water hydrolysis to hydrogen fuel cell. Google for example Stewart Island Initiative.

    It’s been suggested that the modern industrial system cannot live with oil at a real price over $150 a barrel. If it tries to exceed that economic contraction will pull it back into line. I suspect that the economy cannot be inclusive with electricity prices over say 50c per kwh. When smart meters tell us that is the power price on hot afternoons people will fry in the heat instead. If we go to the shopping mall to keep cool maybe they’ll charge admission fees. Even if affluent countries seem for now to be able to afford very high electricity prices (read Germany) I don’t think the other half of the world can get there. Affordable energy is a matter of social justice.

  58. Michael
    January 7th, 2012 at 08:49 | #58

    John,
    I have just returned from holidaying with family in Germany. I have to say that the take up rate of solar and wind power is amazing – there are turbines and solar panels appearing everywhere. Note that this is the country which has also announced it is going to decommission its nuclear power plants. Ahh the Germans – so much cleverer than us.

  59. Hermit
    January 7th, 2012 at 10:23 | #59

    A relatively unbiased analysis of German energy policy is here in the form of a slide show. This week Merkel and Putin opened a section of the Nord Stream gas pipeline that bypasses Ukraine. Other neighbours of Germany are watching closely as well.

  60. John Quiggin
    January 7th, 2012 at 12:33 | #60

    “It’s been suggested that the modern industrial system cannot live with oil at a real price over $150 a barrel.”

    The price has been at or above $100/barrel for quite a few years now, and doesn’t seem to have caused any major problems for countries (like Australia) that have managed to avoid the impact of the GFC, which was unrelated to oil

    I’m sure the same would be true for electricity at 50c/kwh and even for life without airconditioning on hot afternoons – I grew up quite happily without it, and I’m sure the same is true for most readers over about 30. But since the cost of solar PV is now well below 50c/kwh, and PV is most available on hot afternoons, I don’t suppose we will ever find out.

  61. Ikonoclast
    January 7th, 2012 at 12:53 | #61

    One of Australia’s real problems right now is the domination of politics by the coal and metals mining lobby. Labor and Liberal are in the pockets of this lobby. Until we can break the power of this lobby (which contributes only about 5.6% of Australia’s Gross Domestic Product and only about one third of our exports) we will not develop the solar and renewables economy we need for our survival.

  62. January 7th, 2012 at 15:39 | #62

    As Hermit said above, the cost of the PV cells is not the only issue
    http://bishophill.squarespace.com/blog/2012/1/3/windy.html

  63. January 7th, 2012 at 16:30 | #63

    @John Quiggin

    Yep. Europe seems to have survived just fine with liquid fuel prices much higher than Australia’s.

  64. Donald Oats
    January 7th, 2012 at 19:43 | #64

    In Murray Bridge solar PV has gone from “Look Dad, there’s a goddamn hippy” to nothing at all unusual—just witness the drive up Adelaide Road heading out of town towards the freeway; multiple houses along the route have substantial PV rooftop installations.

    Without getting into the nitty-gritty of subsidies, efficiency, etc, the main take-home message is that people have surpassed that “social anxiety factor” about whether it is worth doing, what the neighbours will think, whether their most conservative Liberal mates will ever talk to them again, etc. Once a an innovation has got past that social hump, it has moved well beyond the early adopter stage and is ready to pass into the ubiquitous stage (mature business). If Murray Bridge, full of conservatives, can have a noticeable coverage with solar PV, then so can anywhere else in Australia. Mind you, it is still a minority choice, but change is clearly afoot.

  65. rog
    January 8th, 2012 at 04:02 | #65

    Japan has announced the end of nuclear.

    http://www.msnbc.msn.com/id/45909321/ns/world_news-asia_pacific/#.Twht8Bz3Dls

    The reality of nuclear is that it is just too expensive for nations to bear the full costs.

  66. January 8th, 2012 at 05:14 | #66

    Rog, That article doesn’t say that. Its a lifespan argument over existing stations.

  67. Chris Warren
    January 8th, 2012 at 07:15 | #67

    @hc

    And with the usual escape clause – that the lifespan is not relevant if old plants can pass (vague) safety tests.

    This just illustrates how ‘spin-meisters’ get into public policy and media mouthpieces.

    Personally I doubt that modern nukes are more expensive to build and operate – but they are more expensive in terms of risk of catastrophe and leaks of radioactivity into the ecosystem at all points in the fuel cycle. The economic argument is irrelevant – the thought of so much cheap energy monopolised just makes capitalists drool.

  68. Chris Warren
    January 8th, 2012 at 07:45 | #68

    chrisl :
    As Hermit said above, the cost of the PV cells is not the only issue
    http://bishophill.squarespace.com/blog/2012/1/3/windy.html

    Great link to right wing, Montford conspiracy theories. According to the site:

    How I uncovered a plot to greenify the BBC’s output.

    and of course accompanied with the usual the-hocky-stick-is-illusion dogma.

  69. Chris Warren
    January 8th, 2012 at 07:47 | #69

    chrisl :
    As Hermit said above, the cost of the PV cells is not the only issue
    bishophill.squarespace.com/blog/2012/1/3/windy.html

    Great link to right wing, Montford conspiracy theories. According to the site:

    How I uncovered a plot to greenify the BBC’s output.

    and of course accompanied with the usual the-hocky-stick-is-illusion dogma.

  70. January 8th, 2012 at 08:59 | #70

    It is ironic that the low cost of solar panels has caused a solar project to fall over

    http://www.telegraph.co.uk/earth/energy/solarpower/8998404/The-sun-goes-down-on-solar-power.html

  71. Chris Warren
    January 8th, 2012 at 09:36 | #71

    chrisl :
    It is ironic that the low cost of solar panels has caused a solar project to fall over
    http://www.telegraph.co.uk/earth/energy/solarpower/8998404/The-sun-goes-down-on-solar-power.html

    Wrong.

    The source says that community projects were killed by “cuts” to incentives. This is government policy.

    The Telegraph is the mouthpiece of British Thatcherites, and no doubt is quietly cheering behind the scenes along with their CBI mates.

  72. quokka
    January 8th, 2012 at 14:58 | #72

    @Chris Warren

    Indeed so. The proposed new FITs are

    4 10 50 250 kW: 8.5 p/kWh

    The UK Climate Change Committee’s Renewable Energy Review found that the project cost of new nuclear generated electricity in the UK to be in the range 6-10 p/kWh slowing declining through 2040.

    Could you or anybody else please explain, in the light of the extravagant claims being made of PV being cheaper than or even close to the cost of nuclear, why the proposed FITs are sufficiently high that investors would have to be beaten way with sticks in the solar gold rush.

    Just why should these new proposed FITs cause projects to be cancelled?

  73. quokka
    January 8th, 2012 at 15:03 | #73

    Oops, the HTML rendering ate the relational symbols. The proposed FITs are:

    Up to 4kW: 21 p/kWh
    4-10 kw: 16.8 p/kWh
    10-50 kW: 15.2 p/kWh
    50-250 kW: 12.9 p/kWh
    over 250 kW: 8.5 p/kWh

  74. January 8th, 2012 at 15:16 | #74

    Chris Warren. When you write “cuts” to incentives, I think you mean cuts to subsidies.

    From the article”The cuts were understandable since the cost of solar panels has fallen steeply, boosting demand for them and income from the tariffs far beyond original projections: the former tripled between June and October alone.”

    The article seemed to be written in sorrow,the cheering was coming from the comments section.

  75. rog
    January 8th, 2012 at 20:45 | #75

    Given that Japan has been cancelling orders for new plants and shutting down existing plants (due in part to faults and accidents obscured by corrupt practices withing the industry and also do with external factors such as tsunamis and earthquakes and other unforeseeable events) it is hard to see that nuclear has much of a future in Japan.

    http://www.bloomberg.com/news/2011-10-28/nuclear-promotion-dropped-in-japan-energy-policy-after-fukushima.html

  76. rog
    January 8th, 2012 at 20:51 | #76

    There are three critical demographic groups in terms of public perception of nuclear energy: actual and potential host communities (which have nuclear plants in their backyards), the broader public, and political elites.

    Casual observers might have imagined that the most vocal opponents of nuclear energy would be found in communities that have similarly vulnerable facilities or are slated to receive them in the future. This, however, is not the case. To induce cooperation from host communities, the Japanese government has distributed hundreds of millions of dollars in incentives, loans, infrastructure, and assistance. Working through official government agencies, such as ANRE, the Japan Atomic Energy Relations Organization, the Japan Industrial Location Center, and the Center for the Development of Power Supply Regions, the central government has tried to bring the opinions of these communities in line with national energy plans. As a result, the actual and potential host communities have been less concerned with health and environmental hazards and more worried about the loss of revenue streams, taxes, and jobs.

    While those residents most at risk from nuclear power have said little, broader public opinion polls have revealed a gradual and clear movement toward anti-nuclear sentiment without large-scale anti-nuclear demonstrations. Recent polls conducted in early July show that roughly 70% of Japanese respondents favor ending Japan’s use of nuclear power and seeking alternative energy sources and higher levels of energy efficiency.

    Among political elites, the prime minister himself and the governors of prefectures with nuclear power plants have been increasingly anti-nuclear in recent days. While the current prime minister may not be in office much longer, the next administration will need to set out a clear and well-conceived plan for Japan’s energy policy.

    http://www.nbr.org/research/activity.aspx?id=163

  77. quokka
    January 8th, 2012 at 23:49 | #77

    @Michael

    There might be PV panels “everywhere”, but they don’t produce much electricity. In fact just over 3% of Germany’s electricity in 2011. An amount that will be dwarfed by new fossil fuel generation capacity under construction and planned in Germany. It is an inescapable fact that Germany’s decision to exit nuclear power means that it’s CO2 emissions will be higher than they otherwise would have been.

    As recently reported in the Guardian, a single company in India, Essar Energy, is building eight new coal powered power stations. The output from these will about the same as that of the entire world’s installed PV capacity. And also around about the same as seven AP1000 nuclear power plants. There are about 430 nuclear power reactors in the world. Output from PV is not even in the same order of magnitude as output from nuclear. Not even close.

    About 13 GW of PV capacity was installed world wide in 2011 – over half of that in Germany. All new German capacity for 2011 would produce less electricity than the single New Shin Kori 1 nuclear power plant that entered full commercial service in Feb 2011.

    The overselling of PV to an extent that would make a marketing execute blush seems to me to exhibit a cavalier disregard for risk. James Hansen discusses these issues in his rather emphatic recent essay Baby Lauren and the Kool-Aid

    There is something very wrong with the situation where some environmentalists demand (rightfully) the acceptance of mainstream science on the issue of climate change but prefer to put their faith in cranks such as Busby or Caldicot on radiation risk, steadfastly refusing to acknowledge the mainstream science. Indeed they have publicly promoted these people at every available opportunity. Sorry, but picking and choosing what science one believes based on ideology is both wrong and exceedingly dangerous for the future of the biosphere. It cannot possibly lead to an objective approach to energy.

  78. John Quiggin
    January 9th, 2012 at 04:47 | #78

    Your numbers are wrong
    http://www.marketwatch.com/story/is-solar-growing-new-idc-energy-insights-forecast-shows-worldwide-solar-photovoltaic-module-shipments-rising-from-227-gw-in-2011-to-438-gw-in-2015-2011-12-13
    As regards your final para, we have seen a long thread here and, AFAICT no-one has cited “cranks like Busby and Caldicott”, or relied on claims made by such people. Certainly I didn’t do so in the original post. You are fighting shadows of your own invention, while nuclear power is being killed by economics.

  79. John Quiggin
    January 9th, 2012 at 04:52 | #79

    As regards the Hansen essay, he doesn’t seem to have any data past 2008, which makes it a bit difficult to take him seriously – how hard can it be to Google these numbers

    I’m sure he’s a fine climate scientist but he doesn’t know any economics – he was last seen claiming that there are fundamental differences between a carbon tax (he’s pro) and an emissions trading scheme (he’s against). That’s nonsense as can clearly be seen from the debate over the semantics of what we have here (a fixed price emission permits scheme, supposed to become an ETS over time).

  80. Hermit
    January 9th, 2012 at 06:28 | #80

    @John Quiggin
    The link points out that PV uptake depends on the continuation of subsidies. There is a danger in extrapolating the uptake of a niche product to a future in which the favourable conditions may no longer apply. Those favourable conditions include generous subsidies, fashion and the ability of the grid to accommodate small amounts of reverse flow.

    The growth of PV may well move from the West to Asia. In Japan there is the Fukushima factor and in China there may be the need for domestic stimulus. However as in the West it seems likely that the subsidies will taper off. A decade hence the world will end up with a relatively static x% of all kilowatt hours being generated by PV. I suggest that x will be a smallish number, my guess 10% maximum world wide. It won’t make a dent in fossil fuel dependence.

  81. January 9th, 2012 at 09:08 | #81

    So I was out driving my humvee the other day when I slammed into the passenger side of a porsche. “Sorry, for denting your car,” I said.
    “That’s not a dent!” said the porsche driver. “You’ve only reduced the width of my car by 10%. A ten percent reduction in width doesn’t count as a dent! Forget about it!”
    So I headed home, being careful not to stave in any vehicle I met by more than 10%, and when got home I set fire to a big pile of coal in my back yard, as I am required to do by the Jevons paradox ever since I had the roof insulation put in.

  82. Dan
    January 9th, 2012 at 09:16 | #82

    Genius.

  83. John Quiggin
    January 9th, 2012 at 09:16 | #83

    We already agreed, above, that nothing is going to beat coal in the absence of a carbon price or a subsidy, and that the optimal solution would be to phase out all the specific subsidies and replace them with a carbon price.

  84. quokka
    January 9th, 2012 at 10:26 | #84

    @John Quiggin

    I took my figures from this report: http://www.pv-magazine.com/news/details/beitrag/2011-world-pv-market-overview_100001876/

    This report refers to new installed capacity. The report you referenced seems to refer to PV panel shipments. They are not the same thing and possibly therein lies the source of the discrepancy. There is known to be a current over supply and if both these figures are accurate, it is considerable.

  85. John Quiggin
    January 9th, 2012 at 11:25 | #85

    No, the problem is that the report you cite refers to 2010, and its forecasts for 2011 were way too low.

    http://www.pv-magazine.com/news/details/beitrag/2011-world-pv-market-overview_100001876/

    In this lengthy thread, I haven’t seen anything to suggest that you have been paying any attention at all to the developments of the last year. You formed your views at some point in the past, and you are going to stick with them regardless of the contrary evidence. Unfortunately, that seems to be par for the course in this discussion.

  86. John Quiggin
    January 9th, 2012 at 11:31 | #86

    Here’s the view from the same site a year on. Note that the Dec 2010 report you cited actually underestimated 2010 installations, which ended up around 17GW.

    http://www.pv-magazine.com/news/details/beitrag/pv-in-2012–the-year-of-truth_100005327/

    The report has lots of gloom and doom, which is unsurprising from the POV of suppliers faced with 50 per cent price reductions and more to come, but all of that is good news for consumers.

  87. Troy Prideaux
    January 9th, 2012 at 13:15 | #87

    @John Quiggin
    Certainly good news for consumers and good news for the environment; however there is a scent of economic hypocrisy in the justification. Of course, that’s of little significance for the very real threat that faces us… well… unless of course you’re a shareholder or venture capitalist who’s helped fund these companies, but I suppose we should always be wary of businesses involved with government subsidies & other temporary assistance programs.

  88. quokka
    January 9th, 2012 at 13:19 | #88

    @John Quiggin

    Yes, I read everything in the article except the date and was about to retract that comment. However the general principle still stands. According to your link the projected deployment in 2015 is about 44 GW. The latest OECD monthly electricity stats report that 2010 electricity consumption in OECD countries alone was 10,309 TWh. By my calculation, assuming 15% capacity factor, that 44GW in 2015 of new worldwide PV capacity would satisfy just 0.56% of 2010 OECD demand.

    According to Wikipedia, world energy consumption in 2008 was 132,000 TWh. That 44 GW of PV represents 0.042% of 2008 world energy consumption.

    World energy consumption is forecast to grow at an annual rate of 1.5% to 2030. That 2015 PV deployment rate would need to be 35 times greater each and every year just to meet the increase in energy demand. Of course, growth may be greater or less than these projections, but the picture is clear.

    Quite simply there is no deployment of PV or projected deployment of PV over the next decade at the very least that can possibly contribute more than a small fraction of what is truly needed to address the climate problem. That is what the big picture tells us and if we want to shy away from the big picture one has to ask what is the point of all of this?

    Claims to the contrary are just distributing large amounts of the sustainable energy kool aide. If matters change over the next 5-10 years and PV deployment has hugely exceeded projections, and the LCOE of PV is comparable to nuclear then a reassessment is obviously due but for now that is the situation based on the numbers.

    The situation looks bleak, and is made more bleak by spreading false hope through gross overstatement of the contribution of PV spread by renewables zealotry. The fossil fuel industries just love this because it engenders a public attitude that there is a solution in sight, when in fact there is not. Their own PR machines could not hope to do such a good job of getting them off the hook.

    There is every indication that all forms of low emission generation are and will continue to be needed and there are some very difficult engineering and economic problems in making them co-exist due to intermittency issues not to be dismissed by lightly by hand waving about “myth of baseload”. For me any other position is taking gross and unacceptable risks with our climate future unwarranted by the current evidence.

  89. John Quiggin
    January 9th, 2012 at 13:58 | #89

    Total nuclear output output in 2010 was 2630 TWh, or about 2 per cent of total energy consumption, and equivalent (using your 15 per cent assumption) to about 2000 GW of solar PV

    http://nextbigfuture.com/2011/06/2010-world-nuclear-generation-was-2630.html

    That’s for an installed base that has been built up over many decades. If solar PV installations continue to rise at the rates observed over the last decade or so, cumulative installations would surpass 2000GW sometime in the 2020s.

    Of course, that’s nowhere near enough to solve the problem. For the next decade at least, the main gains have to come from some combination of wind, gas, energy efficiency, and reduced energy use. But that doesn’t change the conclusion that solar is now a potentially important contributor in the longer term, while nuclear is almost certainly not.

  90. Sam
    January 9th, 2012 at 15:39 | #90

    @John Quiggin
    ” to about 2000 GW of solar PV”
    Do you mean 2000 GWh here?

    And

    ” cumulative installations would surpass 2000GW sometime in the 2020s”

    Do you mean 2000TWh?

  91. Fran Barlow
    January 9th, 2012 at 16:02 | #91

    @Sam

    cumulative installations would surpass 2000GW sometime in the 2020s

    Do you mean 2000TWh

    Most unlikely. That wasn’t his point. PrQ was speaking of installed capacity {If solar PV installations …} rather than output.

    He went to the trouble of converting output to capacity allowing for the CF of 15%

  92. John Quiggin
    January 9th, 2012 at 16:06 | #92

    What Fran said

  93. Sam
    January 9th, 2012 at 16:14 | #93

    @Fran Barlow
    Ah, I get it now. My mistake. Thanks.

  94. quokka
    January 9th, 2012 at 16:16 | #94

    @John Quiggin

    Suppose there is 2000 GW of PV installed sometime in the 2020s. That will still generate a little less electricity than today’s 367 GWe of nuclear capacity. IEA projections for nuclear in 2030 range from low 501 GWe to a high 746 GWe. So we might conclude with some ambitious estimates for PV growth that by 2030 PV might generate roughly the same amount of electricity as nuclear. How much confidence do we place in these figures? In IPCC jargon, are they likely, very likely? Would those figures in 2030 warrant the claim that nuclear is unnecessary, let alone today? I would suggest that there would be at least one essential precondition and that is that the storage problem has been solved definitively and cheaply. How likely is that? Very likely, likely, better than 50:50? Who really knows and it really is very uncertain.

    In the end, it’s about risk.

    This is my last comment. I really don’t want to go round and the same circle. I can’t see that it adds anything.

  95. Steve
    January 10th, 2012 at 10:47 | #95

    A bit late back to the conversation, but:

    A word on peak demand: As I see it, there are two aspects to the discussion of peak demand:

    1. Generating power roughly during times when demand is high might mean you can sell your generated power at a higher price. This should be good for the economics of solar, which doesn’t generate electricity at off-peak times, only during shoulder and peak times during the day. (according to my Time-of-use electricity bill, peak time is 2pm to 8pm).
    2. Deferring the need for new infrastructure by offsetting peak demand requires that you lop the top off ALL peaks, not just take a chunk out of one peak, and leave others etc. If there is even one big peak, then you need the infrastructure to handle that peak. An unfortunate chunk of our electricity infrastructure is there just to deal with the small handful of very hot or very cold days each year.

    As Robert Merkel said, PV output peaks in the middle of the day, while summer peak electricity demand is later in the afternoon, and winter peak demand is even later (early evening).

    I cant see how PV will be of any benefit in reducing the need for infrastructure to handle demand at these peak times. If anything, PV might hurt the economics of new infrastructure, because new generation/transmission/distribution infrastructure will be needed for those peaks, but there will be less total energy delivered over that infrastructure – in other words, rather than lopping the tops off the peaks, PV is carving a chunk out of the side of the peak – the peaks are pointier, and the additional infrastructure to deal with the peak is needed for a smaller amount of time.

  96. John Quiggin
    January 10th, 2012 at 11:05 | #96

    Bear in mind that peaks can also be lopped off by pricing – we are nowhere near getting this right yet. If you need to construct a lot of infrastructure to deal with a few hours of demand per year, the price on those hours (multiplied by the quantity used) should cover the cost of the extra infrastructure. If users aren’t willing to pay that price, the infrastructure shouldn’t be built.

  97. January 10th, 2012 at 12:08 | #97

    In Australia peak demand is on hot, cloudless days in summer, as a result of all those air conditioners being run, and to a smaller extent more water being pumped. As this summer daytime peak is much higher than other peaks, PV is a huge help and does avoid the need for additional infrastructure. It cuts the top of the highest, most expensive to reach peak.

  98. Steve
    January 10th, 2012 at 12:22 | #98

    @Ronald Brak

    In Australia there is a big peak in both summer and winter – it has historically been an unambiguous winter peak, and it is only in the past decade that the summer peak has caught up and even overtaken the winter peak in some climates, due to the growing popularity of air-conditioning.

    Even then, the summer peak is not at midday or 1pm when PV output is at its highest. It is later in the afternoon. Even if the summer peak is successfully lopped, there is still the comparably very high winter peak, in the evenings on the coldest few nights of the year.

    And this is before we even discuss intermittency – ie what happens on that hottest day of the year when a storm rolls in, and demand is still very high but PV output drops off – while temperature can drop quickly with a southerly, the sun can disappear behind a cloud with even greater speed (this issue can be mitigated somewhat by siting industrial scale PV systems in the desert, as JQ suggests.

  99. January 10th, 2012 at 12:30 | #99

    Here in Adelaide, we only have rolling blackouts due to an inability to meet demand in the afternoon during summer heatwaves when the sun is shining. I assume this is true for the rest of Australia.

  100. Steve
    January 10th, 2012 at 12:46 | #100

    @Ronald Brak

    See page 5 of this presentation by Brian Spalding, commissioner of the Australian Energy Market Commission:
    http://www.trade.nsw.gov.au/__data/assets/pdf_file/0010/398926/spalding-presentation.pdf

    It would be nice to find out the assumptions etc behind this model to examine its legitimacy – it suggests that PV will not impact greatly on peak demand in NSW (ie the highest point in the graph on the left hand side is only taken down a small notch by the addition of 500 MW of PV.)

    Figure 1 from this doc:
    http://www.aph.gov.au/library/pubs/rp/2008-09/09rp09.htm

    Suggests Victorian summer peak demand on a high demand day in Feb 2006 was after 4pm, and for a high demand day in winter in June 2006, the peak was after 7pm. Not good for solar. Although I would point out that the charts seem to be sourced from a nuclear energy site, so they may have been cherry picked or something.

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