IEA sees a world run on solar  

The Climate Spectator has a look at a recent IEA report on solar energy - IEA sees a world run on solar

The International Energy Agency has outlined, in detail, its vision of how solar energy technologies could form the backbone of the world’s electricity network, providing half its electricity needs by 2060.

The scenario, outlined in the IEA’s Solar Energy Perspectives, released last week, was first canvassed in late August. Essentially, it looks at the options available to the world if it took decisive, but belated action, on climate change, and alternative technologies such as nuclear and carbon capture and storage failed to deliver as promised.

And, for the first time, it also recognises a future where baseload power may no longer provide the bedrock of the world’s energy needs, as it has done for a century or more, but is replaced by a system of flexible and inflexible energy sources, where intermittent sources such as wind and solar PV are complemented by “dispatchable" and flexible sources such as solar thermal with storage, hydro, and gas.

The IEA has been canvassing a range of scenarios over how the energy systems of the future may look under various climate and energy policy responses. Under its 450 scenario, where the world holds true to its political target of limiting global warming to an average 2°C by capping greenhouse gas emissions at 450 parts per million, solar accounts for less than 20 per cent of total generation by 2050, rising to 25 per cent of generation in its “high renewable" scenario, where renewables need to account for 75 per cent of the world’s generation to make up for the lack of nuclear or CCS.

However, in its “Testing the Limits" scenario, the IEA considers what would happen if the world made a belated but sharper change in its energy policy – whether for security, economic or climate reasons, as seems increasingly likely given the nature of the international climate talks – and if many countries decided to abandon nuclear power and carbon capture and storage was found to be costlier, more limited or not as safe as hoped, which it concedes is quite possible.

In this scenario, the IEA says, solar energy could become the backbone of a largely renewable energy system worldwide. The make-up of energy sources varies from region to region, thanks to climate variations, but most of the estimated nine billion people will live in warmer climates, and areas with strong solar radiation (such as north Africa and the Middle East to Europe, and Australia to Indonesia), and become net exporters of solar energy. In colder climates such as Europe, wind and solar PV match the seasonal demand peaks.

Globally, the IEA scenario has solar thermal accounting for 28 per cent of total electricity generation by 2060, with some 6,000GW of capacity with storage (it has around 1GW now). Solar PV accounts for 20 per cent of generation, with 12,000GW of installed capacity (about 40GW now), and solar fuels add a further 2 per cent of generation.

Of the other technologies, wind power also makes up 28 per cent of generation, with 10,000GW of capacity, hydropower provides 10 per cent, and baseload – a mixture of geothermal, nuclear and biomass with CCS – provides 11 per cent of generation with around 1,200GW of capacity. Natural gas has capacity of around 3000GW, but is used sparingly as a balancing fuel and accounts for just 1 per cent of total generation.

The IEA does not break down the energy contributions in individual regions, but it should be noted that in its “high renewable" 450 scenario, the IEA says 40 per cent of the energy in regions such as Australia, central Asia, parts of India and south-western US, and the Middle East, could come from solar thermal alone.

As for costs, the IEA says, it is simply a matter of planning ahead. “Renewables in general, and solar energy in particular, may not always offer the lowest cost options to meet our energy needs, nor even the cheapest way of doing so while reducing global carbon emissions," it notes. But because of the risk that other options may fall short, solar technologies offering “indigenous, inexhaustible resources", are more secure, less likely to experience price volatility once the technologies are mature, are environmentally sustainable, and “the cheapest known antidote to catastrophic climate change, even if they are or appear to be higher-cost options in other ways."

It says that by 2060, the world is four times richer, but only consuming 50 per cent more energy because of energy efficiency measures. “Even if the cost of one energy unit were twice as much as today, the total energy expenditure would be proportionally smaller than today. It is thus conceivable to prefer an energy future that provides security, economic stability and preserves the sustainability of ecosystems and the environment, even if it is not the least-cost option when such considerations are ignored."

But it may not be that expensive. The IEA notes that solar PV is already competitive with “bulk power" in many areas, particularly islands, off-grid locations, and where PV is competing with oil. Solar thermal is also likely to fall substantially – a recent tender for a 50MW solar thermal plant in Mongolia was bid at $140/MWh. It says that solar thermal will be competitive with intermediate and peaking plant by 2020, and by 2030, solar costs will range from $50/MWh in the best solar regions, to $150/MWh in the worst. Other technologies will be grouped north or south of $100/MWh. It notes that, in the case of building integrated solar PV, where solar will be crucial to the value, “the cost of PV would almost vanish in the market segment where it currently costs the most."

BusinessGreen reports that South Africa has approved a raft of renewable energy projects, including 2 solar thermal power plants - South Africa green lights 1.4GW of new wind and solar power projects

Plans to build more than 3.5GW of renewable energy capacity in South Africa have taken a major step forward after 28 wind and solar power projects were approved as part of a government tender round that should serve to burnish the host country's green credentials as the Durban Summit enters its final few days.

The government yesterday awarded preferred bidder status to projects totalling 1,416MW of capacity, split between wind power, solar photovoltaic and concentrated solar power projects.
The 28 winners were selected from a total of 53 bids and now have until June 2012 to secure financial close and then begin construction.

The government awarded preferred bidder status to 18 solar PV projects totalling 632MW, and eight wind power projects, totalling 634MW. Two concentrated solar projects totalling 150MW, including the 100MW Abengoa-led KaXu Solar One also got the green light.

Climate Progress has a post looking at Interview of David Crane, CEO of US utility NRG Energy - Utility CEO on Solar: In “3 to 5 Years You’ll Be Able to Get Power Cheaper from the Roof of Your House Than From the Grid”.

David Crane, CEO of NRG Energy: The fundamental issue of our day [is] climate change…. The people who were opposed to climate change legislation used one of two tactics. They either said, “Well, we don’t believe it’s happening.” Which, of course, is just a bald-faced lie.

Or the second part of the one/two punch is, “We can’t afford to do anything about it because a synonym for the word “green” is “expensive.” But looking forward, electric vehicles will be far cheaper to operate than internal combustion engine vehicles. And solar panels on the roof will provide power more cheaply than taking power from the grid.

That’s from a Yale Environment 360 Interview of David Crane, the CEO of one of America’s’s largest electric utilities. It produces power for some 20 million U.S. households, and over 90% of NRG’s power comes from natural gas and coal. But Crane says the future — the near future — will be different.

Climate Progress has written a number of articles on the sharply declining cost of solar photovoltaics (see “Solar is Ready Now: ‘Ferocious Cost Reductions’ Make Solar PV Competitive“). It’s good to hear from a leading utility executive that the facts on the ground bear our analyses out.

Here are more excerpts from this remarkable interview, including his discussion of “democratization of customer choice” and the key role of electric vehicles:


e360: What can you do as a major power generator to nudge the country toward a renewable energy future?

Crane:I think the most important thing is to make the American public aware that now they have energy choices in a way that they never really did. You don’t just have to settle for using electricity in your house that is supplied by coal-fired power plants on the grid. And you don’t just have to put oil that comes from the Middle East in your gas tank. You can buy an electric car. You can put solar panels on your roof. You have choices now…..

e360: Could you talk about NRG’s move into utility-scale solar, and also your vision long-term of large-scale solar, versus distributed [smaller-scale] solar power?

Crane: So far most of our business has been utility-scale solar — gigantic plants in the desert. The biggest solar [project] we have is 295 megawatts. That’s something like 6 million solar panels. Those projects are really dependent on two things, because they cost over a billion dollars: the Department of Energy (DOE) Loan Guarantee Program and California’s 33 percent Renewable Portfolio Standard, and the fact that the two largest California utilities have been willing to sign long-term agreements in order to meet their requirements [to obtain 33 percent of their electricity from renewables by 2020] under the Renewable Portfolio Standards. We have over 800 megawatts of projects out there, which is a huge number for solar. But our view is that because the DOE Loan Guarantee Program is going away and the California utilities are coming close to putting themselves in a position to satisfy the requirement, there will be fewer of those projects in the future.

We expect to continue to pursue that business and to do well, but that’s not going to be the explosive-growth part of the industry. The explosive-growth part will be between distributed solar power, which is like 1 to 10 megawatt size, and then residential, which is measured in kilowatts. We have so many parking lots and warehouse rooftops and residential locations where people want to reduce their monthly electric bills and that is just an enormous area of growth….

e360: Can you explain your three-pronged approach to transforming the country’s electricity system.

Crane: Democratization of customer choice in our sector begins with two things. One is the electric car and the other is the solar panel on the roof. I think it actually starts with the electric car. You put the electric car in your garage and you really have a mini power plant because these batteries that drive electric cars are quite substantial pieces of equipment. The average car in the United States is sitting still about 22 hours a day. Those are hours where the car can either be accepting power from the grid or selling power through the grid in a phenomenon we refer to as V2G, vehicle-to-grid. That leads to the third leg of the trilogy, which is the smart meter, because between a smart meter in your house, combined with time and use pricing, you essentially want that electric car to be charging between midnight and four in the morning. And you want to have it available to basically drain itself a little between 2 and 6 o’clock in the afternoon. But someone has to tell it what’s going on with the grid at that point. And that’s what the smart meter does.

Right now around the country people are trying to introduce smart meters as just another information device. In our view, no one wants to pay for another information device, particularly when the information being given is about something that people don’t care about, which is their electricity use. So smart meters will only be accepted by the American public when they do something of value. And the first thing that they’ll do of value is they will sense when it’s expensive to run electricity and they’ll turn appliances off around the house. But the next thing they’ll do, which is the most valuable thing that will actually put dollars in your pocketbook, is that when the smart meter recognizes that the wholesale system is getting tight and there is good pricing, it will actually sell into the grid from the car battery. Or if power from the grid is getting really expensive, the smart meter might just turn the house off from the grid and then run the key appliances in the house off the electric car in the garage.

Then you have the solar panels on the roof. If you tie in a rooftop solar panel with a smart meter, then it’s exactly analogous to the electric car battery. The smart meter could turn off the house from the grid at 3 in the afternoon and rely exclusively on the power that’s coming from the solar panels on the roof, saving the customer a lot of money on their bill from the grid. And if the person puts a big solar panel on their roof, they could sell power from that. ...