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China's New Solar Price

A decade ago, when IEEE Spectrum was preparing a special issue on China's tech revolution, a colleague sitting in an airplane heard somebody behind her exclaim, "But what's the China price?" What he was asking, like everybody in business then and since, was what the Chinese were charging for products in his particular line.

Since Saturday, when the European Union settled a solar trade dispute with China on terms favorable to the People's Republic, we at least seem to know, more or less, what the global floor price for photovoltaics will be in the near future: 56 euro cents per installed watt of photovoltaic cell, or roughly US $0.75/W.

The EU settlement of a trade complaint brought by European PV manufacturers led by Germany's SolarWorld does not impose sanctions or tariffs on China. It does not satisfy the complainants and is seen as weak—typical of Europe's failures to advance its global interests with sufficient resolve. But that's geopolitics, which is a story for another day.

What's of interest here is the settlement's setting of a solar price that's well below the one-dollar-per-watt mark, often considered the breakeven point for PV market competitiveness. It will "allow Chinese companies to export to the EU up to 7 gigawatts per year of solar products without paying duties, provided that the price is no less than 56 cents per watt," as the Financial Times put it in its report. That is, Chinese producers will be permitted to collectively export 7 GW of solar cells to Europe each year—an amount equal to more than half of Europe's solar market—without incurring trade penalties. ("A trade deal with the European Union gives China 60% of the EU's solar-panel market," concludes a video interview on the Wall Street Journal site.)

The 7-GW ceiling on Chinese PV exports to EU states is essentially voluntary: Any exporters exceeding that limit will pay tariffs averaging 47.6 percent, as of August 6. That would seem to almost guarantee that Chinese exporters will not sell to Europeans at a price below 56 euro cents per watt. And, as Europe represents such a large fraction of the global solar market, the global PV floor price will be approximately the same.

In the short run, however, the effect of the European settlement may be that the Chinese will dump PV cells in the U.S. market at an even lower price. That is the opinion of Keith Bradsher, China correspondent for the New York Times, who previously did outstanding reporting about the crisis in the U.S. auto industry and the festering troubles of Detroit.

Photo: William Hong/Reuters

 

Wind Now Cost Competitive With Coal in India

In India, the expiration of some federal incentives for renewable energy last year has not put a damper on the outlook for wind and solar power.

Wind power is now cost competitive with new coal-fired generation in India, according to a report from HSBC [pdf]. Falling costs are just one reason for the increased interest in wind. For the first time, India has identified water as a scare natural resource in its most recent five-year plan. Nearly 90 percent of India’s industrial water demand comes from thermal power plants, according to the HSBC report.

The appeal of some renewables, such as wind and solar photovoltaic, is that they use far less water than coal, nuclear, or natural gas power plants. Across the globe, water stress is growing within the energy industry and power plants have to partially shut down when there isn’t enough water for cooling. In India, water shortages just before monsoon season in 2012 forced hydro generation and thermal power plants to partially close.

India needs all the power it can get. Last July, a sweeping power outage left about 700 million people without power. Outages are a daily occurrence in India, although usually not at that scale, because of a dearth of generation coupled with an outdated grid. The Central Electricity Authority estimates India has a peak deficit of 12 gigawatts.

The latest five-year plan calls for a doubling of renewable energy from the previous plan, including 15 gigawatts of wind, 10 gigawatts of solar, 2 gigawatts of small hydro and nearly 3 gigawatts of biomass. Individual Indian states have also instituted solar and wind installation targets.

Although there was some uncertainty in the renewable industry as federal incentives expired in 2012, many key wind states have raised the feed-in tariff for wind in the past year. The tariff, however, is still lower than the tariffs for new coal capacity, according to HSBC.

Solar is likely not far behind wind. The report estimates that solar could be at parity with coal in India as soon as 2016. Unlike the United States, India does not have abundant gas reserves, so the switch to gas-fired power plants from coal is unlikely on a large scale.  

Solar power, however, is already cheaper than diesel generators, which power everything from homes to businesses to cell towers. The India government has mandated that 75 percent of the nation’s cell towers have to run on renewables by 2020, and mobile companies are looking at everything from solar to fuel cells to replace dirty diesel generators.

Wind and solar look more attractive with every passing year in India, but more work needs to be done on the grid infrastructure that connects new generation to the homes and businesses that need it. HSBC notes that many state utilities don’t have the money to invest in new transmission lines without which, new wind generation can't come online.

Smaller microgrids might help in area that aren’t currently served effectively by a utility. The Indian Tower and Infrastructure Providers Association already has pilot projects in place that will help it understand how telecoms could power their own cell towers using renewables, then sell additional power back to local villages.

 

Photo: Santosh Verma/Bloomberg/Getty Images

Collision Between Water and Energy Is Underway, and Worsening

When a heat wave spread across the Midwest in the summer of 2012, the Powerton coal plant in central Illinois had to temporarily shut down a generator when its water supply became too warm to effectively cool the plant.

Although 2012 was a year of severe drought in the U.S., the problems seen at various coal, nuclear, and hydropower facilities last summer are  only likely to increase in coming years unless the power sector quickly changes its way of doing business, according to a new study from the Union of Concerned Scientists (UCS) [PDF]. The problem is that the power sector is not known for moving quickly. 

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Minnesota Nuclear Plant Upgrade Is $267 Million Over Budget

After being shut down for four months, Minnesota’s Monticello nuclear power plant will restart this week with an additional 71 megawatts of capacity, a 12 percent power uprate. The increased costs, however, will far outstrip the additional percentage of power production.

The project, which included maintenance, upgrades and the uprate, was budgeted at $320 million. But Monticello has cost overruns of about 83 percent, or $267 million, according to the Minneapolis Star Tribune.

The plant's owner, Xcel Energy, has not released the final cost to the public, claiming that the figures are trade secrets. But state regulators do know the costs, which will be passed on to Xcel’s customers. The company told the Star Tribune it would release details on the cost and why the project went so over budget in the future.

Monticello is hardly the first nuclear power plant to suffer a massive cost increase. In three southern U.S. states, Florida, Georgia, and South Carolina, customers are paying billions for reactors that aren’t yet producing power, according to Mark Cooper of the Vermont Law School Institute for Energy and the Environment. And elsewhere in Georgia, Southern Company reportedly spent at least $737 million more than it originally slated for two new nuclear reactors it is adding to a facility along the Savannah River.

Nuclear power comprises about 20 percent of electricity production in the U.S., and much of that fleet is aging. Existing reactors are an important base load of power for some utilities, especially as there is increasing regulatory pressure to close old, dirty coal-fired power plants. But the nuclear plant inventory is aging too, and of the country’s more than 100 reactors, 73 have received approval to operate until they are 60 years old.

Regulators and plant operators are wading into uncharted waters in measuring, monitoring and modeling key components of the aging reactors. Researchers at Pacific Northwest National Laboratory, for instance, are developing acoustic modeling tools that can identify cracks or corrosion. In Monticello, which is less than an hour from the twin cities of Minneapolis and St. Paul, part of the cost increase, according to the Star Tribune, was that additional engineering problems surfaced once the upgrades were underway. 

Besides high costs and uncertainty about the lifespan of reactors, other forces are at work too that could sideline upgrades for existing nuclear. Xcel Energy cancelled plans for a similar uprate to another nuclear power plant it operates in Minnesota because of a decline in power demand, according to Nuclear Street. Electricity use in the U.S. has more or less flat-lined in recent years, partially because of the recession but also due to a larger trend of energy efficiency measures. That's fortunate, because the public's appetite for nuclear power, never large, has only gotten smaller since Japan’s Fukushima Dai-ichi nuclear accident in March 2011.

Fortunate too, is the availability of cheap natural gas, which has also made gas-fired power plants an attractive option for utilities that need to build new capacity or replace older plants. The majority of new generation being installed in the U.S. is gas. Another benefit of gas, compared to coal or nuclear, is that it can ramp up or down quickly to balance out intermittent renewable energy sources such as wind or solar. Still, natural gas can't be the whole answer for Xcel Energy. A 2007 Minnesota law requires it to produce 31.5 percent of its energy from renewable sources by 2020.

 

Photo: John Doman/The St. Paul Pioneer Press/AP Photo

Can Wastewater Injection from Fracking Cause Earthquakes?

Hydraulic fracturing to release gas or oil trapped deep underground in shale rock is of course highly contested. In environmental circles and on the political left, indeed, the "politically correct" view seems to be that fracking is just as bad as nuclear energy, however much each might contribute to energy security or greenhouse gas reduction. The wider mainstream view—and this is the attitude explicitly embraced by the Obama administration—is that fracking can be good if properly regulated to minimize negative effects on the environment, especially on water. That position may be complicated, however, by results of  new study appearing Friday in Science, which strongly suggest that wastewater injection in fracking operations can significantly aggravate earthquake risks.

The study, led by Nicholas van der Elst of Columbia University's Lamont-Doherty Earth Observatory, finds that a severe Chilean earthquake on 27 February 2010 triggered, less than a day later, a significant earthquake in Prague, Oklahoma, where there was a set of water injection wells. Unusual seismic activity continued near Prague for almost two years until late November 2011, when an earthquake destroyed 14 homes and injured two people, according to a Lamont-Doherty press release. Then, in April 2012, a major earthquake in Sumatra triggered yet another earthquake near the Prague wells, where injection continues.

The Science article builds on an earlier study that appeared in Geology last March, in which a team of Lamont Doherty scientists hypothesized that high-pressure injection of water in a seismically active area could cause a known fault to "jump." “When you overpressure the fault, you reduce the stress that’s pinning the fault into place and that’s when earthquakes happen,” said Heather Savage, a co-author of both the older and newer reports.

Besides affecting Prague, the Chilean quake also is believed to have set off a temblor in Trinidad, Colorado, where suspicions about water injection and seismicity already had attracted the attention of the U.S. Geolorgic Survey. Japan's devastating earthquake of March 2011 is thought to have triggered a temblor in the West Texas town of Snyder, where high-pressure water injection was taking place.

The van der Elst research in Science appears together with other articles about how human activity may be affecting earthquake risks.

 

Photo: John Leeman/The Earth Institute, Columbia University

Netherlands Builds Nationwide EV Fast-Charging Network

Range anxiety is real for electric vehicle (EV) drivers. But it will soon be a thing of the past for EV owners in the Netherlands.

Fastned, a Dutch electric vehicle charging network company, has chosen ABB to provide more than 200 DC fast-charging stations that will blanket the country of more than 16 million people. The chargers will all be within 50 kilometers of each other.

It is not surprising that Fastned chose ABB to provide the charging stations, since the Fastend founders worked at a Dutch EV charging company called Epyon B.V., which was acquired by ABB in 2011.

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North China Pollution Cuts Life Expectancy by More than Five Years

As a 67-year-old American man, I can expect to live another 11 years; our talent for denial being what it is, this is something I don't dwell on much. But if you were to tell me that  because of some newly identified factor I can actually only expect to live half that long, I can guarantee this would get my attention.

It was from this perspective—admittedly not a completely logical one—that I digested the widely reported news yesterday that air pollution in northern China has cut life expectancy for the residents of that region by five and a half years. My first reaction was: Wow, that's a lot of years. Upon further sober reflection, my second reaction was: Wow, that's a lot of years.

The new estimate of China's air pollution toll, which is almost entirely attributable to combustion of coal, mainly in electricity generation but also for heating, comes from scholars at the Massachusetts Institute of Technology, Tsingua University and Peking University in Beijing, and the Hebrew University of Jerusalem. It appears this week in the Proceedings of the National Academy of Sciences. The study compares mortality among the 500 million people living in North China in the 1990s with those in the rest of the country and finds that differences are attributable almost entirely to respiratory ailments caused or aggravated by air pollution.

The gravity of the problem is of course nothing new. Credible estimates going back two decades have put the annual death toll from air pollution in China as high as a million. In the severely afflicted cities of the Northeast, communities have started to take drastic measures to protect their children, and the better off talk of emigrating--a new kind of brain drain.

Nevertheless, the new estimate of five-plus years reduced life expectancy is singularly attention-getting and is sure to circulate in China, however much the authorities try to minimize it. More than ever their attention will focus on how to reconcile jobs creation with public health by harnessing clean tech more effectively.

Contextualizing Conergy's Solar Failure

The announced insolvency of Germany's Conergy at the end of last week came as an unwelcome reminder that the bloodletting in photovoltaics is still not completely over. Conergy, though not a really major player in the current industry, was one of the early pioneers and a well-known name to insiders. So the inability of its executives to find new investors at the eleventh hour testifies to continuing unease about where and when the world PV market will settle down. Photovoltaic module prices have shown signs of strengthening since the spring—remember: higher prices are good for producers and essential to the survival of many—but it is too soon to tell whether they are on their way to stabilizing at a more sustainable level.

The whole field of photovoltaics has a long way to go, to judge from International Energy Agency statistics on renewables highlighted in the current issue of Spectrum. Though all sources of renewable energy now account for nearly 20 percent of world electricity generation, almost three quarters of that comes from hydropower. Wind makes up barely 10 percent of the renewables share (about 2 percent of total world generation), and solar for perhaps 1.5 percent of renewables and less than a half percent of the total.

In terms of hard numbers, solar generated 74 terawatt-hours in 2011; total world energy generation in 2011 was greater than 20,000 TWh. Seen in that context, and thinking of the pain Conergy's 1200 employees, its leaders and its investors must be experiencing, this blogger is reminded of the words spoken by Rick to his beloved Ilsa in the closing scene of Casablanca: "It doesn't take much to see that the problems of three little people don't amount to a hill of beans in this crazy world. Someday you'll understand that… Here's looking at you, kid."

Photo: Michael Urban/dapd/AP Photo

Japan Will Help Kenya Unlock Its Geothermal Potential

Kenya has some lofty goals when it comes to geothermal power. The African nation already has about 200 megawatts of installed geothermal capacity, but the Japan International Cooperation Agency (JICA) has committed $18.4 million to help Kenya reach its goal of five gigawatts of geothermal capacity by 2020.

The target is lofty not only because it would be a 25-fold increase in less than seven years, but also because the country’s current peak demand is about 1.2 GW. But five gigawatts of geothermal is just the beginning for Kenya. The country’s government expects it will need about 20 GW of electricity by 2030. Currently, more than half of Kenya’s installed capacity comes from hydro.

JICA’s grant to the Geothermal Development Company will provide three years of assistance for capacity building, including training in exploration, engineering, negotiations, and use of geothermal resources.

It’s unclear how much the Japanese can actually accomplish for $18 million. Many have questioned whether the recent pledge of $7 billion by President Obama for African electricity needs is enough to make a dent in a continent where two-thirds of people don’t have access to the grid.

Kenya’s peak power demand has been growing by about 8 percent a year, according to Bloomberg, but it will have to expand at a far faster rate to meet the goals of the government. The country’s largest power producer, Kenya Power, is aiming to go from serving just over 2 million people today to about 20 million by 2020.

JICA’s assistance will help build geothermal plants in Menangai 1 and 2, Suswa, and other geothermal fields. According to AllAfrica, Kenya has almost all the rigs it needs to achieve its set target, but it needs properly trained crews to keep the rigs running continuously and to bring the cost down on running the wells. JICA is also supporting a hydropower project in Kenya and a transmission line. 

Although the bulk of international aid is going to large energy development projects, many rural regions in Africa could benefit from microgrids, such as the SharedSolar project out of Columbia University’s Earth Institute.

Many experts in renewable energy see the mobile phone revolution, which leapfrogged landlines in developing countries, as a model of how to bring power to billions that currently live without it. But costs remain an issue. Although prices are coming down for distributed solar, the price of batteries and metering for microgrids remains high.

Kenya does have a rural electrification plan [PDF] that calls for rooftop solar, but that option will only meet a small fraction of the country’s electricity goals. 

Photo: ROBERTO SCHMIDT/AFP/Getty Images

World's Biggest Offshore Wind Farm Switched On in Britain

Around a year and a half ago, the Walney wind farm in the Irish Sea started spinning and prepared to relish the title of being "biggest in the world." It ended up enjoying that status a bit longer than expected, but the London Array, off the coast of Kent, now leaves Walney and its 367 megawatts in the dust.

Some numbers: 175 turbines. 630 megawatts. Half a million homes. 100 square kilometers. 450 kilometers of offshore cabling.

In other words, it's pretty big. The speed at which these enormous projects are popping around in the waters around the U.K. is impressive, especially considering the ongoing difficulties with getting even a single offshore turbine up and running in the U.S. (Cape Wind might have one by next year! Maybe!) There are now around 20 distinct offshore wind farms around the U.K., generating enough power for 2.3 million homes; when all offshore turbines that are spinning, in construction, or planned are combined, they total 15 gigawatts of capacity—about a quarter of the entire U.S. onshore wind power capabilities.

The London Array, owned by DONG Energy, E.ON, and the U.A.E.'s Masdar, looks to keep it's world's-biggest title for a bit longer than Walney held out, thanks to its already massive size and a phase 2 plan to bring it up to a full gigawatt. And some of the other big projects underway in the region won't be able to compete with that sort of girth: West of Duddon Sands farm will get to 389 MW, for example, while the Gwynt y Mor farm off the coast of Wales will reach 576 MW.

According to some of the executives involved with the London Array, big really is better when it comes to offshore wind. "This project is also a real milestone on the path to cutting the cost of offshore wind," said Brent Cheshire, the U.K. country chairman for DONG Energy, at the inauguration. "As projects get even bigger and move further offshore, we must continue to harvest the advantages of scale to bring down the costs." The CEO for E.ON UK added that the aim is to reduce the cost of offshore wind by 40 percent within just a couple of years. In a country that is actually good at building these farms, there's no reason to doubt that they can get there.

Photo: London Array

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