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It's All About Price
Solar Still Has a Long Way to Go

India’s energy minister Piyush Goyal made waves earlier this week when he said that he thought that “a new coal plant would give you costlier power than a solar plant.” Solar costs have fallen significantly in recent years, but Goyal might be leaning a bit too far forward on his skis according to new research that suggests the renewable energy source has a lot further to go if it really wants to compete without subsidies. Varun Sivaram and Shayle Kann write in Nature:

As solar penetration grows, its value to the electricity system decreases. One way to see this is by observing the wholesale market price of electricity when solar generation is highest. The more solar energy that feeds into the grid, the lower the wholesale price will be during periods of peak solar production, as more supply chases demand. […]

[I]n the long term, as solar becomes a mainstream power source, regulators and utilities around the world are likely to align solar compensation more closely with wholesale market pricing. As solar is non-dispatchable, project operators cannot strategically sell into the market at higher-priced times — solar is purely a price taker (unless paired with energy storage, as discussed below). If compensation tracks solar’s value as adoption grows, then solar owners will experience declining revenues.

Sivaram and Kann are describing a very intuitive process: lacking cost-effective commercial-scale energy storage options (these currently don’t exist), solar producers can only supply the grid when the sun is shining. This currently has a fairly large overlap with times of peak demand, so producers can fetch relatively strong prices for their efforts. But as more and more solar panels are installed, grids will see a daytime glut that will depress prices. The more inroads solar energy makes into power mixes, the more difficult it’s going to be to actually make a profit. These authors suggest that solar power therefore needs to get much, much cheaper than many seem to think.

For decades we’ve been promised that solar power’s day in the sun has been just around the corner. Lately there have been some serious inroads made, especially in the developing world, but we’re still waiting for the real breakthrough necessary for it to compete with fossil fuels on its own merit.

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  • Blackbeard

    “but we’re still waiting for the real breakthrough necessary for it to compete with fossil fuels on its own merit.”

    If you are talking about terrestrial solar power, either PV or CSP, this will never happen. Solar is too diffuse, intermittent and unreliable, and it is at its best in the wrong place, i.e. along or near the equator while it’s needed is far to the north. In addition affordable and scaleable storage technology is beyond our capabilities. Space-based solar might work if we had a cost-effective technology to beam the power down, but again this is far beyond our current capabilities.

    In any case none of this matters. The push for solar, and other costly and unreliable “renewable” technologies has nothing to do with economics and everything to do with politics, ideology and virtue signaling. If you disagree then try to explain, for example, how large scale rooftop solar could ever make sense throughout the cloudy, rainy, north German plain at latitude 53 north?

    • Jim__L

      Add to that the tendency of Greens to stack as many people as possible under the fixed square footage of one high-rising roof. It’s just insanity.

    • LarryD

      Space Based Solar Power absolutely requires cheap access to orbit. Too expensive, otherwise. Even the optimistic studies done some years back conclude this. SBSP however, is high risk. You have to build a large satellite and the ground station before you get one watt out of the project, same problem nuclear has traditionally had (huge up front costs, long lead time before payoff), only even more so. And then there is the Sword of Damocles issue. Modify the beam-down link and it’s a hell of a weapon.

      The variability of ground based solar power, combined with the lack of cheap storage to buffer and smooth it out, mean a conventional power plant, with fast response to demand changes (usually this means natural gas powered) has to be built to take up the slack. Economically, it’s always cheaper to just build the conventional plant and not build the solar at all. And notice that the green exclude both hydro and nuclear options a priori. As Instapundit says “When they start acting like it is a real emergency …”

      • Jim__L

        In-situ resource utilization is a hedge against high cost of launch. Grab an NEA or two, a la the Asteroid Redirect mission, and the amount of mass you have to launch from Earth drops by orders of magnitude.

        As for cooking what’s in the beam’s path — you don’t have to have a beam that can do much more than double the solar flux, to get useful power out.

        • LarryD

          A) Making the SBSP project dependent on another big project, with an extended timeline. I read that NASA’s ARM has been watered down to moving a small boulder from a NEA to lunar orbit. And that won’t even launch for another couple of years. Even granting the availability of the raw materials, the solar cells and their support structures have to be manufactured, so you’re postulating a significant space based industry. So the demand for SBSP will be in space itself, so why beam it down to earth?

          B) Sure, the power beam will be spread out over at least tens of square kilometers, for safety’s sake. But if the total power isn’t at least in the hundreds of GigaWatts range, the project isn’t worth the effort. Focus the beam tighter, viola, microwave weapon. An issue that can’t just be waved away. Who would the various nations trust to not do this?

          • Jim__L

            I suspect you’re overestimating the degree of industrialization required for a pilot SBSP plant — of course they’d use solar power, but there’s more than enough of that to go around up there. Once you’ve got proof-of-concept for the CVD processes required for actually manufacturing the panels on-orbit, scaling up would be expensive, but on the same order of magnitude as other Energy projects. (Or Space projects. Or Mining projects.) Sums that most industries would consider, well, astronomical, are pretty much par for the course in these cases.

          • LarryD

            NSS (National Space Society http://www.nss.org) has been looking at SBSP for years now. Their current assessment is that:

            “The technologies and infrastructure required to make space solar power feasible include:

            * Low-cost, environmentally-friendly launch vehicles.
            Current launch vehicles are too expensive, and at high launch rates may pose atmospheric pollution problems of their own. Cheaper, cleaner launch vehicles are needed.

            * Large scale in-orbit construction and operations.
            To gather massive quantities of energy, solar power satellites must be large, far larger than the International Space Station (ISS), the largest spacecraft built to date. Fortunately, solar power satellites will be simpler than the ISS as they will consist of many identical parts.

            * Power transmission.
            A relatively small effort is also necessary to assess how to best transmit
            power from satellites to the Earth’s surface with minimal environmental impact.”

            They are envisioning getting most of the resources need for the manufacture of SBSP from the moon or near-Earth asteroids, which means a not-inconsiderable space based industry. We can’t rely on NASA or other government organizations to get us there, fortunately there are already commercial interests in mining NEAs. But they havn’t done any research launches yet, so that is decades away.

            By the time SBSP is feasable, I expect it will have to compete with 4th generation fission and fusion power. By fusion, I don’t mean ITER, I think Polywell, Dense Fusion Focus, and Field Reverse Configuration all are fairly good prospects for achieving practical fusion power. I’m not sure SBSP will ever make sense, economically.

          • Jim__L

            Once a Space Race really gets rolling, it can get rolling quickly. These are not technologies that are any giant leap over what we’ve done before; Musk is sprinting across ground that NASA covered decades ago, and he’s got a far leaner budget.

            Re: Fusion – “decades away” is a technical term meaning “maybe never”. Fusion has gotten a lot more funding and attention than ISRU, but it needs breakthroughs to make it work. We know how to mine. We’ve got processes that will work in microgravity and in vacuum. We know how to make solar panels through zero-g-friendly processes. Asteroid ISRU does not need breakthroughs, all it needs is logistical support to apply what we know already to an environment that is exotic, but by no means mysterious.

            Human beings are very, very good at building more factories than we’ve ever known what to do with. What we need now is energy and raw materials to feed those factories, in a way that doesn’t make Earth’s environment unlivable. Industrializing space makes sense both from the raw materials standpoint, and from a jobs standpoint — there is enough work out there for both our machines and for US to do.

            The word “frontier” is an abused and neglected term these days, but I’m convinced it’s our only real way to solve the global problems that seem to intractable now.

          • f1b0nacc1

            A) I wouldn’t argue that NASA’s assessments of what is possible and what is not should be seen as even remotely relevant here, though your point is well taken. Create a market, and keep the govt out of it, and it is possible….but then again, if the govt would stay out of it, we wouldn’t be in this mess in the first place
            B) This is the killer. Once you put that capacity into orbit, you have created a very deadly weapon, and there is no way to trust anyone with it.

          • Bill_Woods

            B) It doesn’t work like that. The resolving power of the transmitter is limited by its diameter and the wavelength of the microwaves. If you wanted to make the power density ten times higher, you’d have to build it three times wider, which would be obvious long before it was finished.

        • f1b0nacc1

          Getting the pieces in orbit for ISRU is still quite a big job, and while cheaper then sending the whole thing into orbit prebuilt, is still very, very pricy. SpaceX is likely to make this possible for us, but not anytime soon.

      • Blackbeard

        Exactly. The president says the Earth is on the verge of becoming uninhabitable and then proposes programs that, even if followed faithfully worldwide would have negligible impact. The Greens say we’re all doomed and then add that we should immediately shut down all nuclear power plants, our largest source of carbon free energy. And yet,amazingly, these people are winning. What does that tell you about the intelligence of the human race?

  • Jim__L

    Has anyone come up with a business model to take advantage of sunny “high-powered” days? If “supply is chasing demand”, that’s an opportunity on the customer’s side.

    I suspect Greens are expecting unicorns to start chasing them at any moment now.

    • Tom

      I’m not sure why. Given modern society, I’m not sure how many of them fulfill the main requirement.

      • Jim__L

        You have a point — modern greens tend to bathe more.

        • f1b0nacc1

          Would be hard for them to bathe less…

    • rheddles

      Has anyone come up with a business model to take advantage of sunny “high-powered” days?

      Yes! It’s taught in all our land grant colleges and it’s called agriculture.

  • Fat_Man

    Solar cells are a bright shiny object used by greens to distract the rubes from the misery green plans will inflict on the average person.

    Solar electricity will never be economical, even if the cells are free and operate at maximum quantum efficiency.

    First free cells wouldn’t be free. It would still cost thousands of dollars to put them up on a roof. We put a new asphalt shingle roof on our house (a nice suburban house not Algore mansion sized) a few years ago. It cost about $15,000. I can’t conceive of a generating material that would be as cheap as asphalt roofing ($200/100 sq ft.), which is about as generic and low tech as it gets. Furthermore the roofing business labor pool is also generic and low tech. Getting licensed electricians involved will only drive up labor costs. I have not even noodled the price of wiring and the electronics needed to make the low voltage DC output of the cells usable. Frames and land would be large costs for non-roof systems. Paving material? Around here roads are repaved every few years — more cost.

    Second, solar systems do not operate at night and their output can drop between 50 and 75% on a cloudy day. Every day has a night, and a majority of days around my location are cloudy. There are no economically viable systems for storing large quantities of electricity, therefor every watt of solar you are relying on must be backed up by a watt of something else. These days that is usually natural gas generation. This doubles the capital cost of solar systems.

    Third, north of the tropics there is an annual variation in the amount of available solar energy. In my location at 40 north, the ratio between available solar energy in June and the amount in December is about 2.67 to 1. The amount of electricity used does not vary nearly that much. Electricity used for air conditioning in the summer is used for lighting, heating, and cooking in December. We often hear brownout alerts on the coldest days of the winter.

    The implication of this is that two thirds of a solar electricity system big enough to supply us in December would sit idle in June, producing no revenue but still carrying a capital cost.

    The punch line is that solar electricity is and will remain unaffordable no matter what the solar cell technology is.

  • Kneave Riggall

    “solar power’s day in the sun”

    That’s the problem, isn’t it? Solar power only works when the sun shines.

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