Solar Power

[Hopalong]

Until utilities find a way around the variability of wind and solar power and even some with other renewable like hydro, can see use for coal, natural gas and nuclear power generation.
Might be more acceptable to some if private enterprise was investing in clean coal technology but, sure as hell, others would be crying that they were using monopoly powers to get money just as with publicly owned.

[chuckChuck]

Utility-scale solar in the US now averages 5 cents per kilowatt-hour

By Andy Colthorpe Oct 01, 2015 11:45 AM BST 0

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Further evidence has been delivered of the rapid fall in the cost of utility-scale solar in the US, which dropped to an average of US$0.05 per kilowatt hour, according to a new report by Lawrence Berkeley National Laboratory.

The price of power purchase agreements (PPAs), long-term contracts between project developers and utilities, has also declined 70% in the past six years since 2009, with installed project costs also falling by 50% since then.

The report, ‘Utility-Scale Solar 2014’, looked at nearly 200 PV projects as well as a handful of CSP and CPV projects. The report’s authors, Mark Bolinger and Joachim Seel, defined utility-scale as any project over 5MW capacity.

Bolinger and Seel looked at empirical data from the sector, comparing installed project prices, operation and maintenance (O&M) costs, performance of systems and other metrics, as well as the PPA prices.

Utility-scale solar development has, from a historical base in the south-west of the country and mid-Atlantic states, which span from New England in the northern East Coast to the south-Atlantic states, spread to the south-east. Meanwhile, projects in the eastern US are primarily fixed-tilt installations and those in the southwest more commonly using trackers. Thin-film is also on the increase in the south-western US, where the lowest PPA prices in the country are regularly being signed, partly due to the region having the country’s richest solar resources. Even in non-southwestern states such as Arkansas and Alabama however, some PPAs were signed at prices of around US$0.05/kWh or US$0.06/ kWh.

Overall, the drop of 50% in installed project costs was driven by the fall in median upfront project costs from US$6.3 per watt in 2009 to an average of US$3.1 per watt for projects completed in 2014. In terms of performance, AC capacity factor reached 29.4% by the end of 2014, up from averages of 26.3% and 24.5% respectively for projects constructed in 2011 and 2012, with those readings also taken during the 2014 study.

By the end of 2014, the country had a solar project pipeline of 45,000MW at various stages of awaiting interconnection – including a large number of projects outside the traditionally strong regional markets like California and the southwest.

Bolinger and Seel point out that the investment tax credit (ITC), which offers 30% tax breaks to all scales of solar in the US, had played a major part in this cost-reduction drive. Efforts by industry groups and solar advocates are ongoing at present to attempt to extend the period of support at its current level. It is scheduled to drop to just 10% at the end of next year, leading many to speculate the looming deadline will slow down progress as it approaches and then passes.

The report demonstrates just how quickly prices – and costs – are falling. To put it in context, just a few months ago, a project in Dubai by developer ACWA Power was hailed as the "cheapest solar project ever", which was bid into a competitive tender process at a price of US$0.0585/kWh.

Berkeley Lab’s report was funded by SunShot Initiative, the US Department of Energy’s solar cost-cutting programme. SunShot seeks to accelerate R&D activities with an overall aim of making solar at all scales competitive with other forms of generation by 2020. The director of SunShot, Minh Le, told PV Tech back in February that the programme had already reached 70% of its goal, aiming for a cost per kilowatt hour of US$0.06 across the entire sector – without any incentives.

[chuckChuck]

Solar Power Costs Headed Toward 4c/kWh

October 3rd, 2014 by Giles Parkinson

RenewEconomy.

The highly conservative International Energy Agency predicts the cost of solar energy will fall to around 4c/kWh in coming decades as the sun becomes the dominant source of power generation across the world.

As we reported on Monday, the IEA now expects solar to become the biggest single source of energy by 2050 and has now doubled its forecast capacity for solar PV.

Rooftop solar, it says, will now account for one half of the world’s solar PV installations, because as a distributed energy source the technology is “unbeatable”.

On costs, it says all solar technologies will fall dramatically in coming decades, with solar PV falling to as low as 4c/kWh, utility-scale solar to around the same level, and solar thermal with storage will fall to as low as 6.4c/kWh.

As this graph below shows, the minimum price tends to occur in regions with great sunshine, and it also assumes a low capital cost of around 8%.

iea solar lcoe

Indeed, IEA executive director Maria van der Hoeven said capital costs were a key element in bringing down the cost of solar technologies. To do this, she said, it was critical to have stable and long-term policies.

This graph below illustrates how financing costs have a critical bearing on the overall cost of solar – any technology for that matter, but particularly one where the bulk of the cost is in the upfront capital outlay for installation.

iea cost capital

Van der Hoeven said policy makers needed to make clear, credible and consistent signals, which can lower deployment risks to investors and inspire confidence.

“Where there is a record of policy incoherence, confusing signals or stop-and-go policy cycles, investors end up paying more for their investment, consumers pays more for their energy, and some projects that are needed simply will not go ahead.” The implications for Australia, where large-scale investment has ground to a halt because of policy uncertainty, could not be any clearer.

The forecasts from the IEA are not the most dramatic that can be found, but they are significant because the IEA is essentially a conservative organisation that was created in the 1970s to defend developed countries’ access to fossil fuels

It has a history of underestimating the impact of new technologies such as solar, as we pointed out in this article – even though it has doubled its forecast for solar PV deployment in just the last few years. Other agencies, such as IRENA, have a much more bullish forecast for solar.

The IEA insists that its figures are not forecasts, but what the world should be aiming for. The deployment of solar could be much higher – assuming costs come down faster than thought. The IEA’s base model still relies heavily on “baseload” generation.

If the IEA figures are right, solar PV’s share of global electricity will reach 16 per cent by 2050, a significant increase from the 11 per cent goal in the 2010 roadmap.

This will require 4,600 GW of installed PV capacity by 2050 – more than half of it in China and India. This requires the installation rate to nearly quadruple to 124GW year. It notes solar PV will be a highly effective abatement tool, avoiding up to 4 gigatonnes (Gt) of carbon dioxide (CO2) annually on its figures.

The IEA says variability is an issue, but it can be overcome with interconnections, demand-side response, flexible generation, and storage. The overall cost will require an increased investment of $44 trillion – but this will generate savings of $115 trillion in fuel costs.

The IEA says the dramatic cost falls in solar PV means that the sector is around five years ahead of where it thought it would be.

Solar thermal with storage, on the other hand, was lagging because its “dispatchability” was not being fully valued.

That would change, however, because solar thermal with storage would play a critical role in the energy systems of the future and would be a match for solar PV because of its ability to store energy for use at night or times of peak demand. In some countries, solar thermal deployment is expected to be greater than solar PV. In others, the opposite will be true.

iea regions

Paulo Frankl, the IEA’s solar expert, says half the large PV deployment considered in this roadmap would take place on buildings or nearby (such as over parking lots). More than half of this would be on commercial buildings rather than residential.

The forecasts rest, in part, on the concept of grid parity – when the cost of distributed PV generation is equal or below the per-kWh component of retail electricity prices – and on self-consumption. “At the utility level, solar PV has many competitors. At the distributed level, solar PV has a competitive advantage and is unbeatable.”

Source: RenewEconomy. Reprinted with permission.



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About the Author

Giles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.