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China’s Green Leap Forward
Jul 30, 2015 | The Diplomat
By Cynthia Kao
Gray, smoggy cities and black manufacturing wastelands–these are the images that dominate international headlines about China’s environment. Heavy industry, the pressing need to generate energy and jobs for more than 1.3 billion people, and the systematic failure of adhering to operational standards has led to dangerous levels of pollution... -
China approves renewable energy zone in Winter Olympics candidate city
Jul 30, 2015 | Shanghai Daily
The State Council has given the green-light for the creation of a renewable energy zone in the city of Zhangjiakou, which is part of the Beijing bid for the 2022 Winter Olympics. Under the plan, Zhangjiakou will be home to a low-carbon Olympic area which will be run completely... -
UK policy changes designed to stop solar farm development in its tracks
Jul 22, 2015 | PV Tech
By Finlay Colville -
If there was one clear takeaway from the consultation and impact assessment releases by the UK’s Department of Energy and Climate Change (DECC) today, it would be that the government does not want any more solar farms as of today. -
Renewable Energy Powers Up Rural India
Jul 29, 2015 | The Wall Street Journal
By R. Jai Krishna
A small field of solar panels on the outskirts of this rural district was built to generate energy for a cellphone tower. Now it also supplies electricity to local residents who have suffered from chronic power shortages for decades. Hoping to ride India’s cellphone revolution, some small Indian startups are trying to bring more reliable power... -
What Mexico’s climate goals mean for the energy sector
Jul 24, 2015 | Energy Transition
By Lillian Sol Cueva
In preparation to the international climate negotiations in Paris later this year, countries are asked to submit their climate contributions (INDCs) outlining what mitigation and adaptation actions they intend to take post 2020. On March 28, Mexico – as the first emerging economy to do so – presented its INDC. -
Rising to the climate challenge
Jul 30, 2015 | Google Blog
By Eric Schmidt
In less than five months, policymakers from around the world will gather in Paris to finalize a new global agreement on combating climate change. Already, many governments are putting forth ambitious emissions reduction goals. And companies are taking action, too, by reducing their own footprints and investing in clean energy. -
Which Is Cheaper -- Rooftop Solar Or Utility-Scale Solar?
Jul 30, 2015 | Forbes
By James Conca
The Brattle Group,with support from the Edison Electric Institute, just released a study concluding that utility-scale solar photovoltaic (PV) systems in the United States are more cost effective than residential-scale (rooftop) PV systems in achieving the economic and policy benefits we all expect to come from the widespread use of solar...
Industry News
Full Text of Stories Below
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Jul 30, 2015 | The Diplomat
By Cynthia Kao
Gray, smoggy cities and black manufacturing wastelands–these are the images that dominate international headlines about China’s environment. Heavy industry, the pressing need to generate energy and jobs for more than 1.3 billion people, and the systematic failure of adhering to operational standards has led to dangerous levels of pollution and environmental degradation. However, the need for more sustainable practices has not gone unrecognized by the Chinese Communist Party (CCP). In fact, since 2012, China has consistently ranked as the world’s biggest investor in renewable energy.
The sheer size of China’s population and economy means its energy decisions have massive consequences. In 2007, China became the world’s largest emitter of greenhouse gases. By 2035, China’s ratio in global energy demand is predicted to rise from the current 22 percent to 26 percent, and its world share of CO2 emissions, already the largest in the world, is predicted to rise by over a third, to account for 30 percent of the world’s output by 2035. But China also has the largest renewable energy reserves in the world. Currently it holds roughly 24 percent of the world’s renewable energy capacity and given China’s ongoing investments, that share is expected grow.
China’s strategy for a more sustainable energy sector is two-pronged, focusing on bolstering green energy infrastructure and investing in R&D to make both green and non-renewable energy production methods more efficient. Over the past decade, China has passed many laws and goals for expanding renewable energy. Notably, China’s five-year plans have pursued an aggressive renewable energy policy, pushing to increase renewable energy production to 15 percent of the total energy mix by 2020. Heavy government investment and subsidies for both government owned and private companies will be a key driver in succeeding these goals.
The big push to expand the green sector has reaped promising results. Renewables are becoming a rising share of the Chinese energy sector. The billions of dollars that the CCP has funneled into developing the clean energy sector has given Chinese companies a major push in the world market for clean energy development. For instance, in 2013, China invested $4.3 billion in its smart grid market, taking the world lead from the United States.
Promisingly, the share of energy produced by coal, a water-intensive and dirty energy source, has been declining incrementally. Coal produces about 70 percent of China’s energy, and China accounts for half the world’s coal consumption. However, the push for renewable energy is slowly changing things. Chinese coal production in 2014 dropped by a little more than 2 percent, and is forecast to drop even more by the end of this year. At this rate, Bloomberg New Energy Finance predicts that China’s power sector carbon emissions could be in decline by 2027, though coal will still continue to supply over 50 percent of China’s energy.
Aside from domestic investments in clean energy, China also has a long reach abroad. With $396 billion and $135 billion invested abroad in energy and transportation respectively, and along with the recent creation of the Asian Infrastructure Investment Bank, China commands tremendous influence over the development of clean energy sectors around the world.
However, China’s green energy sector is not without its issues. Many of China’s green energy companies are heavily subsidized by the CCP. Their long-term success will depend on their ability to be profitable once government assistance is reduced, especially in the wake of an appreciating yuan and slowing economic growth. After all, this is not the first sector that the CCP has rapidly expanded through enormous government subsidies. For instance, China’s steel industry shot from the world’s fifth biggest producer of steel to the first in the span of a year (from 2005 to 2006) largely through energy subsidies. Yet many of the steel companies grew dependent on subsidies for growth and found their profitability faltering. Many were ultimately unable to pay back the mounting debts from their rapid expansion and unprofitable, inefficient ventures. Now a similar, but not necessarily inevitable, danger faces the renewable sector.
Already consuming nearly a quarter of global energy, China and its energy path, its successes and failures, have great consequences for the future of sustainable development. It can serve as a model on which to build more sustainable infrastructure and expand the renewable sector, but it may also serve as a warning of the pitfalls that may be encountered. With concrete legal framework in place and already promising signs of transition, the greening of China’s energy structure will be watched with great interest.
Link: http://thediplomat.com/2015/07/chinas-green-leap-forward/
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China approves renewable energy zone in Winter Olympics candidate city
Jul 30, 2015 | Shanghai Daily
The State Council has given the green-light for the creation of a renewable energy zone in the city of Zhangjiakou, which is part of the Beijing bid for the 2022 Winter Olympics.
Under the plan, Zhangjiakou will be home to a low-carbon Olympic area which will be run completely on renewable energy.
Wu Weidong, executive vice-mayor of Zhangjiakou, says the creation of the zone will also improve the environment in the Beijing-Tianjin-Hebei region. "Zhangjiakou can improve its environment by building this renewable energy demonstration area. And at the same time, it can transport clean renewable energy to Beijing and the Beijing-Tianjin-Hebei region, an important part promoting the region's development."
According to the plan, by 2020, 55 percent of electricity consumption should be met by renewable energy and 40 percent of industrial enterprises should realize zero carbon emissions.
All of the city's public transportation will be fueled by renewable energy within five years.
As Beijing's partner in the Winter Olympic bid, Zhangjiakou is expected to host the biathlon, Nordic combined, ski jumping, snowboard, and freestyle skiing events.
Link: http://www.shanghaidaily.com/article/article_xinhua.aspx?id=294946
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UK policy changes designed to stop solar farm development in its tracks
Jul 22, 2015 | PV Tech
By Finlay Colville -
If there was one clear takeaway from the consultation and impact assessment releases by the UK’s Department of Energy and Climate Change (DECC) today, it would be that the government does not want any more solar farms as of today.
It is hard to come to any other conclusion, but of course, stating this in black and white would be a clear own-goal with regards to the inevitable legal backlash now expected from the industry. And on this topic, if legal challenges in the past to previous DECC amendments had a somewhat partial industry representation, then today's announcements are likely to move the bar even higher.
In May 2014 the coalition government announced that support under the Renewable Obligation scheme (RO) would end in March 2015 for solar projects over 5MW. Rumours of further cuts circulated after the election.
The release from DECC today is not a surprise. The surprise is that it took DECC so long to get its head around what was going on. In fact, earlier in 2015, DECC claimed it had done its own internal analysis on deployment of sub-5MW solar farms for the fiscal year ending 31 March 2016, and announced an expectation of 200-300MW of solar farms within this power range. No alarm bells were raised then to the industry when these statements went out from DECC, and if anything gave the industry a clear message that DECC was okay with sub-5MW sites being developed, this is probably the strongest signal.
However, the forecasts then were grossly underestimated by DECC – no fault of the solar industry. So, when the first quarter build out of solar farms was complete under 1.4ROCs on 31 March 2015, there was nothing on the table from DECC to provide any forewarning that problems would arise for developers in the next 12 months. Other than DECC's track record of being spooked by solar deployment, crucially with a time lag that is all too apparent from anyone relying upon the databases supplied by the regulator, Ofgem, to monitor both deployment and pipelines.
Indeed, with virtually everyone in the UK solar industry aware of the Ofgem database problems, one could potentially flag the issue that the government should have been aware that their monitoring of future deployment had a six-month lag. And six months have passed since the previous claims of 200-300MW of projected annual deployment of sub-5MW sites. So the frustration that will inevitable become highly vocal from developers in the coming days and weeks is blatantly clear to understand.
On the specifics of the proposed changes, the first takeaway on the RO is to effectively close it 12 months early, almost regardless of the grace criteria, on 31 March 2016. The other option DECC had here would have been to keep the RO open as planned to 31 March 2017, but reduce the banding level from 1.2ROCs/MWh to a token-gesture level that was well below break-even levels. Either would have had the same effect.
But the potential killer is opening up the grandfathering clause. Indeed, if there was one word that will completely shock the whole renewables community – not just solar – then here it is. Potentially, it has the scope to effectively shatter the investor premise that the UK is safe, risk-free once installed, and that the UK will not implement anything that could be considered to be retroactive as was the case with southern European countries in the past few years. While there is nothing in the proposals on retroactive cuts, simply introducing the grandfathering word for future developments does not send out the correct message at all. Surely the same end goal from DECC could have been advocated without going down this line? Are they aware of the potential ramifications of this, even at the proposal level?
All said and done, where is the middle ground? Going on the assumption that today's releases from DECC are its opening gambit, then which parts have the scope for negotiation. Which proposals have red lines drawn around them?
Ultimately, this is likely to be what affects deployment of sub-5MW solar farms between now and 31 March 2016, and the next few months will be critical in this. In this respect, the advance warning and the time to do anything before 31 March 2016 should be called into question. Previous consultations and final announcements of policy changes tend to drag on.
If this process runs into October, November or December, then there is potentially only weeks left to do anything before 31 March 2016. And getting back to the comments above, this is entirely down to the six month delay by DECC in realising what was happening at the planning stage, and something that the industry can feel highly aggrieved about today. If this consultation proposal was to come out, it should have come out on 1 April 2015, after the deployment of Q1, not almost seven months later into the current fiscal year.
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Renewable Energy Powers Up Rural India
Jul 29, 2015 | The Wall Street Journal
By R. Jai Krishna
A small field of solar panels on the outskirts of this rural district was built to generate energy for a cellphone tower. Now it also supplies electricity to local residents who have suffered from chronic power shortages for decades.
Hoping to ride India’s cellphone revolution, some small Indian startups are trying to bring more reliable power to the country’s rural regions using mini electricity plants, powered by renewable alternative-energy sources such as solar, wind and biogas.
But reaching out to the subcontinent’s backwaters can be expensive and risky, so Gurgaon-based Omnigrid Micropower Co. has developed a business model where it sets up its small solar-power plants near cellular towers to guarantee reliable income from telecommunications companies before it starts serving villagers.
Kamlesh Kumar, 34 years old, who has a small general store in Hardoi, has seen sales soar as the affordable and reliable power now lets him stay open at night. “When it used to become dark in the evening, we would just shut shop early,” he said. “Now we close late.”
Omnigrid is part of a growing network of small renewable-power companies trying to light up India’s hard-to-reach rural regions. Roughly 40 companies already serve remote villages and businesses with small plants that use renewable energy, according to a report from Goldman Sachs Group Inc. and the Climate Group, a U.K.-based environmental organization. They help bring power to approximately 100,000 households, a number that is expected to grow to reach millions.
The companies want to use solar energy to replicate the success of the cellular-phone-service industry. Despite decades of government spending on phone lines, it wasn’t until private-sector cellular companies came along that hundreds of millions of Indians got their first phones. This became possible because the companies were able to use cellular technology to untangle themselves from costly and hard-to-build networks of wires.
Renewable energy could offer a similar solution for remote areas, because it is created and consumed in the same region and doesn’t require massive power plants and hundreds of kilometers of power lines.
Cellular companies have also become of one of the biggest potential customers of the new tiny power companies. As cellphone use has taken off in India, cellular companies have put up hundreds of thousands of cellular towers across the country. To keep them running during regular blackouts they depend on diesel-fueled power generators that are expensive to run and create noise and air pollution.
Omnigrid decided to start setting up its tiny solar-power plants, which generate less than 50 kilowatts of power, near the towers. That power is used to keep the cellular towers running, and leftover capacity is used to power nearby village homes and businesses.
“The [demand] growth is faster,” when you serve both telecom companies and villagers, said Anil Raj, Omnigrid’s chief executive. “That’s what makes the difference.”
The company now helps provide power for about 70 cellular towers and the people who live near them. It is hoping to replicate the model in thousands of villages in the coming years. Earlier this year, Omnigrid announced plans to form a joint venture with SunEdison Inc. of the U.S. to build 5,000 micro power plants in rural areas at a cost of about $500 million.
Omnigrid charges cellular companies roughly the same amount they pay the state-owned power companies for energy. It also offers packages to consumers for six or seven hours of power a day, to be used when the state-owned power grid isn’t working. The company built its own independent power lines and outlets to reach each village house that subscribes to its service. It charges from $2 to $11 a month depending on how much power a particular consumer wants. That is usually less than consumers would pay to use kerosene lamps or for a supply of candles.
One of Omnigrid’s oldest, new customers is 103-year-old Suraj Prasad Mishra. He has spent most of his life without electricity. Government power lines arrived in the area 20 years ago but they rarely work at night, meaning life would have to slow down drastically at dusk.
He and his neighbors can now get more reliable power thanks to Omnigrid. His village has become more productive and lively at night. “Wherever there is light, you feel like roaming around,” he said. “It is very helpful.”
India’s government has big plans for solar energy as it hopes to wean itself of the country’s dependence on imported fuel. New Delhi has set an ambitious target of a fivefold increase in electricity generation from solar power to 100 gigawatts by 2022, at a total cost of 600 billion rupees ($9.4 billion).
A number of companies have announced plans to enter the sector aggressively, hoping to take advantage of government efforts to make it easier to produce and distribute renewable energy. Separate from its venture with Omnigrid, SunEdison plans to invest $15 billion to set up power plants to produce 15 gigawatts of electricity from solar and wind farms. India’s Bharti Enterprises Ltd., Japan’s SoftBank Corp. and Taiwan’s Foxconn Technology Group—known formally as Hon Hai Precision Industry Co. —have announced plans to work together to invest $20 billion to tap the growing demand for solar energy. The private-equity unit of Goldman Sachs has invested close to $400 million in ReNew Power, a solar- and wind-power company.
Smart Power India, is one of the organizations trying to promote the small-grid options. With the help of a $75 million grant from the Rockefeller Foundation, it is helping companies such as Omnigrid and others to eventually set up mini power plants to serve 1,000 villages.
“This could be a great method to speed up energy access and economic empowerment in rural areas,” said Smart Power CEO Jaideep Mukherji.
Yet even with the help of steady income from cellular companies, numerous barriers still need to be overcome before renewable energy can be a predictable and profitable business in India.
Government regulations make it difficult to import solar panels, for instance, or buy the big tracts of land needed as solar-panel sites. Meanwhile, it is still cheaper to produce power using coal. So, as India expands the capacity of its coal-fueled power plants, it might become harder for solar-power companies to compete.
The state-run power distributor in Hardoi acknowledges it has failed to provide the power the region needs. The northern state of Uttar Pradesh—where the district sits—needs more than 14 gigawatts in peak hours, but gets only 12 gigawatts.
Shamim Ahmad, managing director of the company—which is named Madhyanchal Vidyut Vitaran Nigam—said districts such as Hardoi are given only 10 hours of power a day.
“The demand is more than the supply,” he said.
That could change, he added, as the government invests more to modernize its power infrastructure.
In the meantime, though, the people of Hardoi and across the subcontinent will be looking for affordable options, which increasingly might be found at the base of the village cellular tower.
Link: http://www.wsj.com/articles/renewable-energy-powers-up-rural-india-1438193488
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What Mexico’s climate goals mean for the energy sector
Jul 24, 2015 | Energy Transition
By Lillian Sol Cueva
In preparation to the international climate negotiations in Paris later this year, countries are asked to submit their climate contributions (INDCs) outlining what mitigation and adaptation actions they intend to take post 2020. On March 28, Mexico – as the first emerging economy to do so – presented its INDC.
Mexico has set itself an unconditional goal of reducing its greenhouse gases and black carbon by 25 percent by 2030, and a conditional reduction goal (which is subject to the international carbon price, technical cooperation, access to low-interest finance and technology transfer) of 40 percent for the same period. In addition, it has set itself an adaptation goal, which will strengthen Mexico’s climate resilience to cover at least 50 percent of municipalities currently classified as “vulnerable to climate change”. Moreover, the adaptation goals call for a better early warning system and risk management when it comes to climate change, as well as an end to deforestation by 2030.
In Mexico, the energy sector produces almost 20 percent of the national carbon emissions (174 mTCO2e) and 7 percent of black carbon (8 thousand tons). The emissions trajectory outlined by the Mexican government looks as follows: clean energy generation will constitute 35 percent of total energy consumption by 2024 and 43 percent by 2030; currently it represents 19 percent. Clean energy, according to the Mexican government, includes wind, solar, biomass and nuclear, efficient combined heat and power, and thermoelectric plants with carbon capture and storage. In addition, the government plans to increasingly substitute heavy fuels, largely with natural gas.
Besides setting clear renewables goals, Mexico’s climate goals have the following repercussions (positive and negative) for the country’s energy transition:
Positive aspects:
There is a variety of technologies listed in its energy goals. Mexico has rightly recognized that it needs to diversify its energy supply from fossil fuels if it is to reach its climate goals. The goal by the Mexican government is to diversify its energy mix with renewables and natural gas.
They are coherent with national legislation. Mexico’s climate goals are coherent with the Law for the Use of Renewable Energy and Financing of Energetic Transition (LAERFTE) which calls for a reduction in fossil fuels in the energy sector from currently 85 to 50 percent by 2050.
They include mentions of human rights and gender equality. Of all climate goals submitted so far, Mexico and Morocco are the only countries that have included considerations of human rights and gender equality. According to the INDC, these considerations are important “in order for the measures to be implemented to take into account women as important decision makers regarding energy consumption.”
Negative aspects:
Nuclear is still included as a “clean energy” source. According to the LAERFTE, nuclear energy is part of what the Mexican government calls a “clean energy source”, yet it makes no mention of the real costs of new nuclear vs. new renewables. The costs for renewables have decreased rapidly over the last couple of years, and they are now much cheaper than nuclear power. Mexico needs to refrain from referring to nuclear power as a clean energy source by which to mitigate carbon emissions.
Black carbon commitment – good or bad? Mexico has demonstrated an innovative approach to limit its black carbon. However, there are serious doubts about the actual climate benefits this would have. According to Climate Action Tracker, “there is no established scientific method to compare the climate benefits of black-carbon reductions to those of carbon and other greenhouse gases […] The IPCC has not provided calculations of global warming potential for black carbon in its most recent Fifth Assessment Report […]”. In particular for the energy sector, it is important that a black carbon emissions goal would not be considered as priority since it represents just 7 percent of total black carbon emissions. Hence, all efforts in energy should be related to greenhouse gas reductions.
Natural gas is seen as a key solution to the climate challenge. In recent years, Mexico has been promoting natural gas as major source by which to cut national carbon emissions. However, little emphasis is put on associated methane leaks, a highly potent greenhouse gas, and the huge amount of water needed for this particular practice.
Lack of coherence within mitigation and adaptation goals. Since Mexico has included adaptation goals in its INDC it is important that all actions are coherent. For example, taking into consideration that water is a key sector for adaptation, it is important to exclude all the technologies that do not use water efficiently from the mitigation measures (i.e. fracking, mining, etc.)
Link: http://energytransition.de/2015/07/what-mexicos-climate-goals-mean-for-the-energy-sector/
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Rising to the climate challenge
Jul 30, 2015 | Google Blog
By Eric Schmidt
In less than five months, policymakers from around the world will gather in Paris to finalize a new global agreement on combating climate change. Already, many governments are putting forth ambitious emissions reduction goals. And companies are taking action, too, by reducing their own footprints and investing in clean energy.
Reaching a strong deal in Paris is an absolute and urgent necessity. The data is clear and the science is beyond dispute: a warming planet poses enormous threats to society.
Public health experts recently warned that climate change threatens to “undermine the last half century of gains in development and global health,” through forces like extreme weather, drought, malnutrition, and disease. The U.S. government has asserted that climate change poses “immediate risks to U.S. national security,” as increased natural disasters and humanitarian crises fuel instability and violence. And many studies have revealed that critical infrastructure, like electricity and water, is vulnerable to rising sea levels and intensifying storms.
Climate change is one of the most significant global challenges of our time. Rising to that challenge involves a complex mix of policy, technology, and international cooperation. This won’t be easy, but Google is committed to doing its part.
Google has been carbon neutral since 2007. Our data centers, the physical infrastructure behind web services used by billions of people, now get 3.5 times the computing power out of the same amount of electricity, as compared to five years ago. We are also the biggest corporate purchaser of renewable power on the planet. Just today at the White House, we pledged to triple those purchases over the next decade. In addition, we're a major climate-minded investor, so far committing more than $2 billion to clean energy projects, from America’s largest wind farm to Africa’s largest solar power plant.
We're serious about environmental sustainability not because it’s trendy, but because it’s core to our values and also makes good business sense. After all, the cheapest energy is the energy you don’t use in the first place. And in many places clean power is cost-competitive with conventional power.
We’re making progress, but averting catastrophic climate change will require significant investment and bold innovations. Google and our private-sector peers are ready to lead. But something fundamental is required: clear policy. The global business community needs certainty to bring climate solutions to scale. We need the world’s political leaders to confirm that investments in clean energy are sound, and that the laws and policies meant to enable such investment will be designed for the long term and rooted in what science tells us needs to be done.
It’s encouraging to see the world’s major economies set ambitious climate targets, but it’s time to get a strong international climate agreement on the books. This December in Paris, it’s imperative that policymakers reach a deal that moves us toward a zero-carbon economy. That’s the kind of future that we’re committed to helping build, and that future generations deserve.
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Which Is Cheaper -- Rooftop Solar Or Utility-Scale Solar?
Jul 30, 2015 | Forbes
By James Conca
The Brattle Group,with support from the Edison Electric Institute, just released a study concluding that utility-scale solar photovoltaic (PV) systems in the United States are more cost effective than residential-scale (rooftop) PV systems in achieving the economic and policy benefits we all expect to come from the widespread use of solar energy.
But it may not be that simple and depends on what goal you have as a user.
The study was commissioned by First Solar, one of the largest solar companies in America. Titled Comparative Generation Costs of Utility-Scale and Residential-Scale PV in Xcel Energy Colorado’s Service Area, this study is the first to focus on a “solar to solar comparison of equal amounts of residential-scale and utility-scale PV solar deployed on an operating utility system.”
The study found that the cost of generating energy from 300 MW of utility-scale PV solar is roughly one-half the cost per kWh of electricity produced from an equivalent 300 MW of 5kW residential-scale systems when deployed on the Xcel Energy Colorado grid. Utility-scale solar remained more cost effective in all scenarios considered in the study, scenarios having different tax credits, monetizations, and inflation rates.
A new study concluded that utility-scale solar photovoltaic (PV) systems in the United States are more cost effective than rooftop PV systems in achieving the economic and policy benefits we all expect to come from the widespread use of solar energy. Source: Energy Northwest
The study also concluded that 300 MW of PV solar deployed in a utility-scale configuration avoids approximately 50% more carbon emissions than an equivalent amount of residential-scale PV solar.
The large difference in costs between utility- and residential-scale systems was attributed to economies of scale and greater solar electric output resulting from optimized panel orientation and tracking assumed for utility-scale systems. The improved orientation and tracking of utility-scale solar resulted in a higher capacity factor than for rooftop solar.
Using actual historic data from Xcel Energy Colorado, the study compared the per-MWh customer supply costs of adding 300 MW of PV panels in the form of either 60,000 distributed 5kW rooftop systems owned or leased by retail customers, or 300 MW of utility-scale solar power plants that sell their entire output to Xcel Energy Colorado under long-term power purchase agreements.
The study found that projected utility-scale PV power costs will range from 6.6¢/kWh to 11.7¢/kWh across all scenarios, while projected power costs for a typical, customer-owned rooftop PV system will range from 12.3¢/kWh to 19.3¢/kWh.
“Over the last decade, solar energy costs for both rooftop and bulk-power applications have come down dramatically,” said Dr. Peter Fox-Penner, Brattle principal and co-author of the study. “But utility-scale solar will remain substantially less expensive per kWh generated than rooftop PV. In addition, utility-scale PV allows everyone access to solar power. From the standpoint of cost, equity, and environmental benefits, large-scale solar is a crucial resource.”
But there is another aspect to rooftop solar that does not seem to have been captured in this analysis – the fact that rooftop solar does not take any additional space, does not take any additional hook-up or transmission lines, and does not take any additional buffering, or load-following, beyond what the local grid already has. Rooftop solar is truly distributed while utility-scale solar is not.
And individual rooftop solar users become more self-sufficient and reduce the need to build additional utility-scale generation.
The study also used existing power-purchase agreements with utility-scale PV which vary from market to market, and include more than just actual production costs. The numbers for the rooftop systems did not include many of the subsidies other states, like Washington, provide to rooftop customers, such as buy-back at 54¢/kWh.
The study does point out this lack on page 11, “It is important to understand that all of our cost results include only the customer-paid costs for the generation from equal amounts of PV capacity deployed in two configurations in one particular utility service area. A complete tally of the differences between equal amounts of the two types of PV capacity would require that these two resource options be alternatively embedded in a complete, subsequently optimized integrated resource plan (IRP) for Xcel Energy Colorado or other systems of interest. When optimized, such an IRP would reflect the effects of each PV option on system costs and potential benefits such as savings (or incremental reinforcement costs) on transmission and distribution outlays, and differences in ancillary service costs.”
Warren Buffet recently purchased theworld’s largest photovoltaic solar array in Bakersfield, California. It is a 5-square-mile 579 MW PV array that cost a little over $2.2 billion. Assuming a capacity factor of 25% over the expected 25-year lifespan, this utility-scale PV will generate 32 billion kWhs in total:
579 MW x 1000 kW/MW x 8766 hours/year x 0.25 x 25 years = 32 billion kWhs
There are no obvious fuel costs, but PV solar has O&M costs of about 1.3¢/kWh, which comes to about $400 million over the life of this array. So to produce 32 billion kWhs at about $2.3 billion means a life-cycle cost of 7¢/kWh. This is getting close to the range of normal baseload providers like coal, nuclear and hydro, which have life-cycle costs of 5.1¢/kWh, 4.1¢/kWh and 2.7¢/kWh, respectively.
Note that these are actual costs to produce a kWh, not levelized costs, and do not include finance issues, subsidies or special markets, taxes and other costs that are not construction, production or fuel. Levelized costs for utility-scale solar, coal, nuclear and hydro are 13.0¢/kWh, 9.8¢/kWh, 9.3¢/kWh and 11.7¢/kWh, respectively, very different from actual costs.
In contrast, the citizens of Washington State have recently spent $50 million to install 14 MW of rooftop solar. In addition to the 30% installation tax credit, the State of Washington is giving 54¢ for every kWh given to the grid. Since that is about a third of what is produced, there is no cost for electricity for these people, and this return means the payoff-period is now just several years.
As one of these citizens, I just put a 4 kW rooftop solar array on my house. The system I put on my roof in February is the latest and greatest, and over its lifespan will produce about 150,000 kWhs of electricity for about 13¢/kWh. However, I have been selling a third of that back to the grid at my present net metering rate of 54¢/kWh, which more than covers the electricity I buy from the grid at only 7¢/kWh. Over the next several years, I’ll make about $6,000 in profit after subtracting the original capital costs of the array. Assuming this net metering windfall ends in 2021, and I have little O&M and decommissioning costs, I’ll get about a third of my electricity free for the subsequent 20 years.
Since the electricity I do buy from the grid is hydro and nuclear, I have a ridiculously low carbon foot-print to boot. In the end, I will have gotten this 150,000 kWhs for 0¢/kWh. The power I do buy, will still be at about 7¢/kWh. So maybe the utility-scale solar is best for America, but my rooftop system suits me just fine.
Link: http://www.forbes.com/sites/jamesconca/2015/07/30/which-is-cheaper-rooftop-solar-or-utility-scale-solar/
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