Distributed solar has an edge in the speed with which it will respond to financial incentives, he says. The private sector will begin to install solar panels in response to a feed-in tariff much more quickly than developers of large solar projects can negotiate power-purchase agreements with utilities and win regulatory approval from the government.
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A 50-turbine wind farm in Goodhue County in southeastern Minnesota has met with stiff local resistance, a frequent tale in the wind industry. Recently, the project developer won a key court case to move forward, after making concessions about the distance (“setback”) between the wind farm and local homes. However, many residents remained unconvinced that the project was in their best interest.
But today the project developers offered $10,000 payments (over 20 years) to about 200 local residents to try to win them over. The concept might work, although the payments – $500 per year – aren’t particularly large.
In a recent European study, researchers found that citizens generally have two priorities for renewable energy projects: avoiding environmental and personal harm and sharing in the economic benefits from their local energy resources. The $10,000 checks could go a long way toward satisfying local residents that they aren’t being simply colonized for their wind resource.
Will it work?
The wind project had already been certified as “community-based” under a 2005 state statute, but local opponents contested that a wind farm development by a company owned by Texas oilman T. Boone Pickens hardly qualified. It remains to be seen whether a more significant a direct benefit for nearby residents is enough to buy their support.
Concentrating solar thermal power has promised big additions to renewable energy production with the additional benefit of energy storage. But with significant water consumption in desert locations, is the energy storage benefit of concentrating solar enough to compete with the dramatically falling cost of solar PV?
In May, I compared the water consumption of fossil fuel power plants to various solar technologies, noting that wet-cooled concentrating solar thermal power (think big mirrors) uses more water per megawatt-hour (MWh) than any other technology. The following chart, from the earlier post, illustrates the amount of water used to produce power from various technologies.
Water consumption can be cut dramatically by using “dry-cooling,” but this change increases the cost per kilowatt-hour (kWh) of power generated from concentrating solar power (CSP). In the 2009 report Juice from Concentrate, the World Resources Institute reports that the reduction in water consumption adds 2-10 percent to levelized costs and reduces the power plant’s efficiency by up to 5 percent.
Let’s see how that changes our original levelized cost comparison between CSP and solar PV. First, here’s the original chart comparing PV projects to CSP projects, with no discussion of water use or energy storage.
To make the comparison tighter, we’ll hypothetically transform the CSP plants from wet-cooled to dry-cooled, adjusting the levelized cost of power.
Using the midpoint of each estimate from Juice from Concentrate (6 percent increase to levelized costs and 2.5 percent efficiency reduction), the change in the cost per kWh for dry-cooling instead of wet-cooling is small but significant. For example, all three concentrating solar power projects listed in the chart are wet-cooled power plants. With a 6% increase in costs from dry cooling and a 2.5% reduction in efficiency, the delivered cost of electricity would rise by approximately 1.7 cents per kWh.
The following chart, modified from our earlier post, illustrates the comparison.
With the increased costs to reduce water consumption, CSP’s price is much less competitive with PV. In our May post, we noted that a distributed solar PV program by Southern California Edison has projected levelized costs of 17 cents per kWh for 1-2 MW solar arrays, and that a group purchase program for residential solar in Los Angeles has a levelized cost of just 20 cents per kWh.
In other words, while wet-cooled CSP already struggles to compete with low-cost, distributed PV, using dry cooling technology makes residential-scale PV competitive with CSP.
But there’s one more piece: storage.
While Nevada Solar One was built without storage, the PS10 and PS20 solar towers were built with 1 hour of thermal energy storage. Let’s see how that changes the economics.
To make the comparison comparable, we’ll add the cost of 1 hour of storage to our two PV projects, a cost of approximately $0.50 per Watt, or 2.4 cents per kWh. The following chart illustrates a comparison of PV to CSP, with all projects having 1 hour of storage (Nevada Solar One has been removed as it does not have storage).
When comparing CSP with storage (and lower water use) to PV with battery storage, we have a comparison that is remarkably similar to our first chart. Distributed PV at a commercial scale (1-2 MW) is still cheaper than CSP, but residential PV is more expensive.
Even though dry-cooled CSP competes favorably on price, it still uses much more water than PV. That issue is probably why many solar project developers are switching from CSP to PV technology for their large-scale desert projects.
Without a significant cost advantage, the water use of CSP may mean an increasing shift to PV technology.
Back in April 2011, ILSR Senior Researcher John Farrell gave this presentation on the potential for solar power in Minnesota to a group of solar businesses and advocates. Solar in Minnesota: Great Potential View more presentations from John Farrell. Continue reading
CENTERVILLE, Wis. — About 75 residents from area communities affected by the CapX2020 power line project gathered at two public meetings Wednesday at the Centerville community center. Continue reading
Update 7/26: One commenter asserts that the loss figures offered by the original author may be relevant in India, but do not reflect the U.S. grid, where losses total around 7%. EIA data seems to reflect this [xls].
Can transmission losses completely offset economies of scale for solar power plants? An article in Renewable Energy World argues against the building of multi-megawatt (MW) solar PV instead of on-site or local PV systems. In particular, the author writes:
The biggest problem with the multi-MW solar PV plant is that it loses 12-15 percent of expensive power as it passes through a series of power transformers. PV solar inverters generate power at 400 [Volts] three-phase. In large plants, this power is first boosted to 66 [kilovolts] or more with several power transformers and then stepped down to 400V with another string of transformers to suit consumer requirements. In addition, there is a further transmission loss of 5-7 percent in the power grid. Why suffer an avoidable 20 percent loss of expensive solar power?
…There is thus no ‘scale advantage’ in large PV solar plants. In reality, all multi-MW plants are basically clusters of several 500-kW plants since solar inverter capacities are limited to about 500 kW and no more. Why not have one hundred 500 kW plants instead of one giant 50 MW plant?
With 20% of the power from a large-scale solar plant lost in transformers and power lines, it could seriously alter our previous analysis of solar economies of scale. Here are the original charts, with the first chart shows our original analysis of solar economies of scale, with strong savings for scale for new projects (as reported by the Clean Coalition):
The next chart shows the economies of scale in the German rooftop PV market, as reflected in their feed-in tariff rates. The percentages show the price in each size tranche relative to the price for the smallest rooftop PV systems. Once again, there are significant savings for scale, especially when going from a project 100-1000 kW to one that is 1 megawatt or larger (15 percent).
But if there is a 20% power loss for the voltage stepping and transmission for larger solar projects, then when it comes to delivered power, small projects may perform better. Let’s assume that projects 1 MW and larger require the voltage step and transmission (and incur the losses), whereas smaller plants do not. The following two charts illustrate the difference.
The first chart takes the Clean Coalition (green line) data from the Solar PV Economies of Scale chart and calculates the levelized cost of the power from each size power plant based on the sunshine in southern California. For the largest size solar power plants, the cost is adjusted for the losses due to transmission and transformer stepping.
As we can see in the first chart, the losses from transmission wipe out most economies of scale for large-scale solar, making 1 MW and larger solar PV plants equivalent to on-site solar power from a 25 kW solar PV array.
We can similarly examine the effect in the German case. Here the government sets the price paid for solar by size class, and since it’s based on output at the power plant, large-scale plants that have transmission losses get paid for their entire power output, regardless of how much usable power reaches customers. The following chart shows what German customers effectively pay for solar, assuming that 1 MW and larger facilities all experience the 20% transmission losses explained earlier.
As we can see in the chart, the cost of transmission can wipe out the economies of scale in installed costs, making large-scale solar comparable to solar PV of 30-100 kW, but without the same transformer and transmission losses.
It may be true that the installed costs of solar PV continue to fall as projects get larger, but it’s clear that relying on the price of solar at the power plant does not accurately reflect the cost to the grid or ratepayers. For some size of larger power plants (1 MW? 5 MW?), the lost power from stepping up and down voltage through transformers and from transmission may largely offset the economies of scale from building a larger power plant.
Rather, mid-sized solar (or specifically, projects that can connect directly into the distribution system without changing the voltage) may deliver the best cost per kilowatt-hour.
I winced yesterday when James Gavin, chair of the Partnership for a Healthier America, said he’d like to see Walmart double its U.S. store count. He was speaking at Michelle Obama’s event announcing that several retailers will open stores in “food deserts.” It was a sort of half-jokey remark, but, still, in a conversation about food in America, the suggestion that Walmart should have an even bigger role in our food system is pretty disturbing. This is a company that already captures 25 percent of grocery sales nationally and more than 50 percent in some metro areas. Continue reading
The Golden State has covered over 50,000 roofs with solar PV in the past decade, but could it also save 30% or more on its current solar costs? It turns out switching energy policies could save ratepayers billions.
If 2011 is a banner year and the state sees 1 gigawatt (GW) of installed capacity, the savings to ratepayers of a CLEAN program (over 20 years) would be nearly $3 billion.
A serialized version of our new report, Democratizing the Electricity System, Part 5 of 5. Click here for: Part 1 (The Electric System: Inflection Point) Part 2 (The Economics of Distributed Generation) Part 3 (The Political and Technical Advantages of Distributed Generation) Part 4 (Regulatory Roadblocks to Democratizing the Electricity System) Download the report. The… Continue reading
Energy policy matters, a lot. The Germans have a comprehensive feed-in tariff, providing CLEAN contracts to anyone who wants to go solar (or wind, or biogas, etc). The U.S. has a hodge-podge of utility, state and federal tax-based incentives. What does that mean?
Much cheaper German solar. In fact, it’s like having your favorite craft or microbrew beer at a price that beats Budweiser. From a study of U.S. solar prices reported in Renewables International:
Perhaps most surprisingly, the study found that the planned arrays larger than one megawatt have an average installed price of $4.50 per watt, with only a third of the systems in the pipeline coming in at prices below four dollars per watt. As Renewables International reported in January, the installed system price of photovoltaics in the US was easily 60 percent above the level in Germany in 2010 for equivalent system sizes (arrays smaller than 100 kilowatts).
Here’s a chart illustrating that cost differential, with the German prices updated for the 2nd quarter of 2011.
If the German solar prices are wunderbar, that makes the U.S. “furchtbar.”