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Solar Slump

One of the confusing problems with the so-called Moore’s photovoltaics law, which predicts a steady decline in PV production costs, is that costs are easily confused with prices. From the point of view of solar energy's long-term commercial viability, lower prices and costs are both a good thing, of course. But from the producer's point of view,  low costs are not a good thing if they only reflect weak markets.

That unfortunately is the situation today. Since the beginning of the year, solar cell prices have dropped about 40 percent, as some government subsidies have been phased out just as production capacity has sharply increased. Prices "are now below the cash cost for many manufacturers," the Financial Times reports today--meaning presumably that prices are below production costs. The situation suggests, the British paper continues, that there will be considerable consolidation in the photovoltaics industry in the coming year.

To be sure, there are still many bright spots in what the FT can't resist calling a "cloudy" outlook with "dark days." A big one is that China has just unveiled a feed-in tariff for solar projects, Taking a cue from similar laws in Germany, Denmark, and Spain, among others, China will guarantee the price of electricity generated by solar cells. For any projects completed before 1 July this year, the price is 1.15 yuan--nearly 18 U.S. cents per kilowatt-hour--and for projects completed thereafter it will be 1 yuan.

That's great news for China's solar manufacturers but not, admittedly, for all others. Chinese producers already dominate the world market, and the feed-in tariff will help them cement their hold. 

Renewable Europe: Wind Power in EU to Triple by 2020

The European Wind Energy Association (EWEA) estimates that the wind energy capacity in the EU will nearly triple by 2020, bringing the total installed capacity up to about 230 gigawatts. At the end of 2010, the EU had about 84 GW installed.

If EWEA's "conservative estimates" prove correct, the EU will get about 16 percent of its total power supply from wind energy by the end of the decade. According to the EWEA press release today:

Electricity production from wind power is expected to increase from 182 Terawatt hours (TWh) or 5.5% of the total EU demand in 2010, to 581 TWh or 15.7% of the total demand in 2020. By 2020 the electricity production from wind energy will be equivalent to the total electricity consumption of all households in France, Germany, Poland, Spain and the United Kingdom together.

The biggest gains in wind power capacity are projected for Finland (9.6-fold increase), Poland (9.5-fold increase), and Bulgaria (8-fold increase), though none of these countries are currently among the leaders in absolute or proportional capacity. Denmark, which already gets about 25 percent of its power from wind, will see only a 1.6-fold increase, but this will bring the total to 38 percent of its power needs. Germany and Spain, which lead the way in absolute capacity, are also projected to less than 2-fold increases, but will arrive in 2020 at 17 percent and 27 percent of their total power supply, respectively.

One of the biggest growth sectors of the European renewables landscape -- and that which clearly sets it off from the United States -- is offshore wind. As of the end of June, the EU has 1,247 offshore wind turbines for an installed capacity of 3,294 MW; 101 offshore turbines were connected to the grid in just the first half of this year. The US, at last count, has zero.

(Image via Vattenfall/Flickr)

FERC Issues Major Rule to Encourage Grid Expansion

Considering its import, the Federal Energy Regulatory Commission’s Order 1000, issued on July 21, has attracted remarkably little notice. Together with its precursor, Order 890, promulgated in 2007, it represents the most important U.S. power grid reform since the system was opened to wholesale competition with Order 888 in 1996. 

FERC’s objective with Order 1000 is to remove bottlenecks that have impeded expansion of the grid, expedite long-term planning, and make the power system more friendly to intermittent renewable sources of energy. The order mandates development of regional transmission plans and introduces the principle that such plans should take consideration of public policy requirements (such as state renewables portfolio standards).

It also sets out principles for allocation of transmission investment costs. As spelled out in the statement by FERC Chairman Jon Wellinghoff, those include: that costs should be commensurate with benefits; that no costs should accrue to those receiving no benefits; and that no costs may be imposed on an adjacent region without that region's consent.

Expanding on the need for the order and the rationale for the new rules, Wellinghoff cited NERC's 2010 Long-Term Reliability Assessment, saying that 60 percent of additions to the power grid to 2019 will be made to accommodate wind and solar generation. "Strengthening and expanding the system for the reliable integration of these resources will require significant investment in transmission," said Wellinghoff, with some understatement.

The type of project that could get a boost from FERC 1000 is the Atlantic Wind Connection, the plan for an sub-sea transmission cable to link up offshore wind turbines with onshore grids in Virginia, Delaware, and New Jersey. As an analysis by the liberal think-tank Center for American Progress notes, "The AWC will be expensive with a cost of more than $5 billion, which is not surprising for a project this ambitious. This project may not make sense if only the traditional economic and reliability benefits are considered because the sum of those benefits may not outweigh the costs."

Though FERC squares nicely with the Obama Administration's emphasis on green energy, in terms of its inspiration and history, it can safely be characterized as nonpartisan. The work that led to it straddled the Clinton and George W. Bush administrations, and members of the current board, including the current chairman, took office under Bush.

Bloomberg Foundation Donates $50 Million to Anti-Coal Campaign

Electrical engineer Michael Bloomberg, who also happens to be mayor of New York City, founder of Bloomberg LLC, and the rich uncle behind the Bloomberg Philanthropies, doesn't play by the usual rules. Not content as mayor to adopt an ambitious greenhouse gas reduction program and to foster green technology, he also has taken charge of the C40 group of mayors dedicated to combating climate change. (In the photos, he's seen unveiling an electric car charging station and the city's latest greenification plan.) Now, through his personal foundation, he's donating $50 million to the Sierra Club's campaign to shut down as many of the nation's aging and dirty coal plants as possible by 2020.

It's a strikingly bold move, considering that Bloomberg is a member of the Republican Party, most of whose other members very probably oppose the Sierra Club's campaign. And that's not to mention the nation's coal-stage Democrats and union leaders, who also don't have much use for it.

The strategic objective of the campaign is to replace the old coal plants with "clean energy," meaning, as the Sierra Club sees it, wind, solar, and conservation. Bloomberg personally is somewhat pro-nuclear and has expressed skepticism about Governor Cuomo's objective of closing the Indian Point nuclear power plant north of the city.  But that's not exactly the Sierra Club's position. It opposes current generation nuclear power and worries, with good reason, about the environmental ramifications of natural gas fracking.

Can a large number of coal plants be closed without greater resort to natural gas and perhaps more nuclear energy as well? Not likely. But it will be an interesting game to watch. 

New Opacity in Global Warming Slowdown

A group led by top atmospheric geochemist Susan Solomon has found that higher aerosol levels during the first decade of this century may account at least in part for why global warming has been slower than climate models predicted on the basis of greenhouse gas buildup. Aerosols, which can be projected into the atmosphere from both natural sources like volcanoes and human sources like coal-fired power plants, shield the Earth from incoming solar radiation. They wash out of the atmosphere quickly, however, compared with most greenhouse gases, and so their effect is relatively short-lived.

An earlier paper by another Solomon group found that lower concentrations of stratospheric water vapor have been another factor in slowing the rate of global warming. That paper, which appeared early last year, indicated that concentrations probably increased between 1980 and 2000, on the other hand, adding to the warming trend.

The Solomon paper, published in this week's Science magazine online, estimates the radiative impact of higher aerosol levels in the last decade at minus 0.1 watt per square meter. That is enough to reduce the amount of expected warming by 25 percent. The findings are based on direct atmospheric measurements, and the paper makes no attempt to determine the natural versus human sources of the recent aerosol buildup. Its main message indeed is that aerosol levels are "persistently variable."

To put the findings in a very long perspective, during the Cretaceous period—120 to 90 million years ago, when Earth turned into a "hothouse," as the current issue of Scientific American puts it—warming took place at an average rate of 0.00025 degrees C per 100 years. During the Paleocene-Eocene Thermal Maximum, about 56 million years ago, the warming rate was 1,000 times as abrupt, at 0.025 per 100 years. The current rate is 1–4 degrees per 100 years, at least 400 times as high as in PETM.

Rooftop Solar Panels Double as Cooling Agents

Energy Secretary Steven Chu has famously touted the energy-saving benefits to painting rooftops white. This works by reflecting the sun's energy away from a building, helping to keep it cool and requiring less energy to do so. It turns out, though, that it isn't just white paint that can cool your roof. Solar panels can do it too.

Research published recently in Solar Energy suggests that daytime ceiling temperatures under rooftop solar photovoltaic systems are lower than under exposed rooftops. In the buildings the researchers studied in San Diego, it was 2.5 degrees K cooler (about 4.5 degrees F). At night, this situation was reversed, with ceiling temperatures under the solar panels registering higher than under exposed rooftop, which the authors said suggests "insulating properties" of PV systems.

Though the study's measurements occurred over a few days in April, modeling suggested that the overall reduction in cooling load would be 38 percent. In the winter, there would be no advantage or disadvantage to the panels in terms of heating load.

This seems to be one of the rare occasions where ancillary effects of a positive technology are also positive. We install solar panels on rooftops to help lessen carbon emissions, and it appears that we actually reduce energy needs at the same time.

And if we start combining some of this knowledge, there is some amazing potential here. The white roof idea that Secretary Chu espouses would, in ideal circumstances, save enough energy to equal taking the world's cars off the roads for 18 years. Then, consider some recent work in New York: about two-thirds of city rooftops could accommodate solar panels, with potential to generate an incredible 5,847 MW of power. If you mix in the cooling potential given New York's well-known heat island effect, and rooftop solar starts to look better and better.

(Image via murphyz)

What's the Score in Utility-Scale Solar?

Among the two or three people who follow this blog closely I'm probably known as a skeptic about utility-scale solar--that is to say, about when "grid parity" will be reached in the United States, Europe, and Asia, and electricity from photovoltaics will be able to compete, without subsidies, with natural gas, nuclear, and wind.

When I visited a small PV generating plant on the Pennsylvania-New Jersey border several years ago, the economics of the project turned out to be so dubious, its designers refused to tell me how much the plant had actually cost to build. Executives at Applied Materials convinced me that making and selling PV manufacturing machinery is a very good business as long as subsidies last, but left me unconvinced it will be a viable business without subsidies any time soon.

That said, it seems only fair to note, 18 months later, that a lot of utility-scale projects are being built in the United States and that a great many more are on the books. According to a list compiled by the Solar Energy Industries Association, PV plants with a combined capacity of close to 200 MW have come into operation since the beginning of 2010, and plants totaling another 356 W are under construction. Some of the utility-scale generating plants such as Florida Power & Light's 25-MW DeSoto Solar Energy Center (above) are quite large indeed. The biggest so far is Pacific Gas and Electric's 55 MW plant in Boulder City, Nevada.

Looking to the future, utility-scale PV projects with a combined capacity of 18 GW are in development, and there are plans for concentrating thermal projects adding up to more than 9 GW. To put that in perspective, even allowing for the fact that solar plants generate electricity only about a third of the time, if all the utility-scale solar were to be built, combined central solar capacity would be equivalent to about 10 nuclear power plants--not trivial.

But it seems to me a fair guess that most of those plants will not actually be built. In many cases environmental considerations--land use, availability of water to clean panels, transmission connections--will doom them. At both the Federal and state levels subsidies may be erratic. By one recent count, 29 states and the District of Columbia have adopted Renewable Portfolio Standards,  20 with special requirements for solar. But in many cases those solar "carve-outs" or "set-asides" include caps on permissible costs, which utilities and their contractors have been unable to meet. PV costs remain very high compared to competitors, and of course the competition--above all natural gas, selling at record-low prices--is a moving target.

The papers are full of stories quoting experts to the effect that PV is on the cusp of a technological breakthrough and near grid parity. I still don't see it.

India Uncovers One of World's Biggest Uranium Deposits

A uranium mine in southern India is home to 49,000 tonnes of ore, and reports suggest it could actually house three times that amount. According to India's Secretary of the Department of Atomic Energy, Srikumar Banerjee, that would make it the largest uranium mine in the world.

India currently has just under 5 gigawatts of installed nuclear power capacity, though it plans to increase that to 20 GW by 2020 and to 63 GW by 2050. The new uranium deposit could be an important piece in these expansion plans. Currently, India doesn't rank near the top of the list when it comes to uranium mining.

In 2010, more than 53,000 tonnes of uranium were mined around the world, with the bulk of that coming from Kazakhstan, Canada, and Australia. There is apparently enough proven uranium in the world to last the world's nuclear reactors at least a century.

Though it rarely gets the attention focused on other parts of the nuclear power industry, uranium mining does carry its own environmental and health risks. In the U.S., which in 2010 mined 1,660 tonnes of uranium, some controversy still swirls around the issue. In June, the Department of the Interior extended a moratorium on mining in a huge area surrounding the Grand Canyon. The region as a whole contains upwards of 150,000 tonnes of uranium.

(Image via Andrew Silver/USGS)

France Goes Offshore: Huge Wind Investment in World's Nuclear Capital

Only a few weeks ago we noted a trend-bucking investment into nuclear power by France, while the rest of Europe seems poised to phase out the always-controversial energy source. France, which gets about 75 percent of its electricity from nuclear power, isn't just sitting still on other energy options: the government recently announced a $14.3 billion tender offer to build 1200 offshore wind turbines to the north and west of the country.

 The government will now accept bids to build wind farms in five different offshore areas, with a goal of bringing them online between 2015 and 2020. France hopes to generate 23 percent of its electricity from renewable sources by 2020; it currently gets less than 13 percent of power from renewables.

Though France is standing by nuclear power in the wake of the Fukushima disaster, the country clearly sees an upside in significant diversification of its energy menu. And interestingly, so does French nuclear powerhouse company Areva: the company has partnered with Iberdrola Renewables in an effort to build some of the new offshore wind farms. Other energy company alliances have also been formed to bid on the massive wind projects.

(Image via rodonnelly)

Corn Ethanol Is Dead, Long Live Corn Ethanol

The United States is overwhelmingly the world's largest producer and exporter of corn (or maise, as most other people in the world call it). It grows about two fifths of the globe's total, more than twice as much as the next largest grower (China) and almost six times as much as the European Union's 27 countries combined. It accounts for more than half of corn exports, Argentina running a distant second.

So it's of greater than merely parochial interest that last year, for the first time, more of the U.S. corn crop went for the manufacture of ethanol fuel than for livestock feed, traditionally its main use by far. About 40 percent of U.S. corn now goes to ethanol, as Ken Cook of the Environmental Working Group noted on National Public Radio this week.

It's a sign of the fuel's growing maturity that ending direct U.S. support for ethanol production is under serious consideration. Essentially unrelated factors--the desire and need to cut Federal spending, a desperate search for bipartisanship, rising food prices, and (not least) the viability of the corn ethanol industry--are conspiring to end direct government support for the industry.  On June 16 the Senate voted to end both the 45 cent subsidy for every gallon of corn ethanol blended into U.S. gasoline and the 54 cent per gallon import tariff protecting  U.S. industry from Brazilian producers of sugarcane ethanol. Though the measure will not directly become law, it's being pretty universally interpreted as a clear sign that Congress will vote to end the subsidy and import duty by the end of this year.

The U.S. corn ethanol industry is facing the prospect with remarkable equanimity. That's partly because it will continue to benefit from Federal support, mainly in the form of a mandate--the renewable fuels standard--requiring that 7.5 billion barrels of ethanol be blended into automotive fuel in 2012, versus 4 billion in 2006. And it's partly too because corn ethanol is now being manufactured at a cost of $2-.2.50 per gallon, competitive or very nearly competitive with gasoline at current world prices.

To be sure, the case for ethanol has been overstated in terms of net energy and carbon-reduction benefits, by comparison with gasoline. Despite that, a general consensus continues to prevail--and not just in the United States--that substitutes for depleting oil must somehow be found, even if costs are somewhat higher and climate benefits minimal. Accordingly, the ethanol industry is here to stay.

Many dozens of plants are now producing corn ethanol in the United States. The largest single company in the business, POET LLC, operates 27 and produces 1.7 billion gallons per year.

Earlier this month, the U.S. Department of Energy extended a $105 million loan guarantee to POET for expansion of a pilot cellulosic ethanol plant in Emmetsburg, Iowa, which will manufacture ethanol from corncobs, husks, and leaves. It is the first such Federal loan guarantee for production of cellulosic ethanol and thus represents a major milestone.

Another milestone this month: Shell Oil's announcement that its Brazilian joint venture Raizen will invest $7 billion in the next five years to double production of sugarcane ethanol. With Petrobras and BP making sizable investments in sugarcane ethanol as well, Brazil is poised to take advantage of the opening of the U.S. biofuels market.

In the short run, to be sure, Brazil is not expected to be a major factor in the U.S. market: With domestic demand high and current production unexpectedly low, Brazilian ethanol prices are much higher than U.S. prices. That's yet another reason why U.S. Congress is almost sure to decide to save the Treasury $6 billion a year by ending subsidies and tariffs.


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