Solar energy prices fall as installations rise

Ultimately, every bit of energy on Earth comes from the sun. It’s what made the plants and animals that turned to fossil fuels grow. Solar energy is the source of all our food, our energy for transportation systems and the energy needed to run industries. Although we see water and wind as sources of renewable energy, they also ultimately depend on the sun.

If the world has a desire to be completely self-sufficient, maximizing the energy we harvest directly from the sun is the ideal way to do that. According to the latest Trends in power transition (paywall) report by Bloomberg New Energy Finance, 182 GW of new solar power was added worldwide last year — about half of all new capacity. Wind good for a extra quarter of new capacity. “Wind and solar are now the cheapest sources of new bulk power generation in countries that make up two-thirds of the world’s population and three-quarters of global GDP,” BNEF said.

But there is a cloud between what would otherwise be good news. Fossil fuels accounted for 14% of new emissions last year, led by coal, which reached an unprecedented 8.5% year-on-year increase to a record 9,600 TWh. As a result, CO2 emissions from the energy sector increased by 7% compared to the previous year.

Nevertheless, that 14% figure for new fossil fuel capacity is the lowest level ever, according to BNEF. About 13 GW of coal-fired power was added last year, down from 52 GW in 2019 and 82 GW in 2012.

“It’s been a year of highs and lows, for the best and worst reasons,” said Ethan Zindler, head of Americas at BNEFsaid in a statement reported by Relief dive. “Renewables grew very quickly, but the comeback of coal and the fact that countries – including those that have committed to achieving net-zero emissions – are continuing to build coal is really disturbing.”

BNEF said three factors contributed to the surge in coal-fired generation last year: a 5.6% increase in global electricity production, driven by a recovering economy, less hydroelectric generation due to drought and higher natural gas prices. In terms of increased coal capacity, China increased by 9%, India by 16% and the United States by 14% compared to the previous year. China’s power plant fleet accounted for 36% of global carbon emissions from the energy sector from power generation last year, followed by the United States at 12% and India at 8%.

Coal-fired production could pick up again this year as European countries try to compensate for droughts and high natural gas prices by reopening shut down plants or delaying planned retirement of coal plants. BNEF said. Half of the countries that pledged to phase out coal at the United Nations’ 2021 climate conference recorded an increase in coal-fired generation last year.

The US and solar energy

Image credit: GCL

The annual report solar energy from Berkeley Lab also coming out this week. It says the US added more than 12.5 gigawatts of new capacity last year, bringing total installed capacity to more than 50 gigawatts, with Texas accounting for about a third of that increase. Combined with residential and other distributed solar installations, solar alone accounted for 45% of new generation capacity added to the grid last year.

According to ArsTechnica, the average cost of building solar in the US is currently $1.35 per watt. The leveled cost of solar electricity is falling faster than construction costs. In the US it is now $33 per MWh, and some PPAs come in at $20 per MWh. The Inflation Reduction Act can lower that number to about $27 per MWh or less.

The IRA can interrupt an industry trend. Previously, the only way to claim a battery storage tax credit was to link it to a renewable energy facility. Now stand-alone battery systems are coming into consideration, which could lead to more being built.

The Department of Energy reports that the cost of solar power is now competitive with “the cost of burning fuel in existing gas-fired generators”. In other words, ArsTechnica says, it may be more economical to not operate an existing gas generator and use the money spent on fuel to install a solar farm instead.

Prior to the IRA’s passage, the DOE said it expected the amount of new solar energy to triple by 2030 and increase rapidly from there. But now it says the new incentives in the IRA “will likely incentivize significant additional wagering.”

All that extra solar energy will change ‘business as usual’ for grid operators. On sunny days, non-solar generating power is increasingly taken from the grid in the afternoon, Ars say. That means the value of solar will fall in some areas as generation regularly begins to outpace demand. That, in turn, will make batteries — both personal and grid-scale — charged during these periods of excess more valuable, while decreasing the value of rooftop solar. And these changes are likely to be felt before the decade is over.

The forest through the trees

All those DOE’s sunny forecasts are subject to finding a place to put all those new solar parks. One of the biggest costs of a new energy supply is the connection to the grid. Solar developers can save a lot of money by installing a new solar park that already has a grid connection.

Charlotte County in south central Virginia happens to have several long-haul transmission lines intersecting it. There are plans to tap those resources for the Randolph Solar Project, a 4,500-acre facility that will remove some 3,500 acres of forest during construction. At least 5 other solar installations are also planned. When completed, they will be one of the largest solar installations east of the Rockies.

Recently, local resident PK Pettus spoke with the New York Times about solar projects. After Virginia passed a law in 2020 that required the elimination of fossil fuels from its energy sector by 2050, Pettus says, “I was so excited and hoped to see solar canopies in parking lots, solar panels on roofs, solar panels on big box stores. I never dreamed I would have. that there would be so much deforestation and equalization in a place that I care deeply about.”

Conservationists and advocates of farmland argue that the development of solar energy displaces valuable forests and farms. They believe that solar farms should be built on land that has already been developed or on degraded land, such as abandoned industrial estates and landfills. Some warn that a plan to protect the Chesapeake Bay, which has been underway for decades, could be jeopardized by the loss of so much forested land.

Pettus fears the Randolph project and the area’s other major solar farms will send groundwater and stormwater into Roanoke Creek, which encompasses several pristine wetlands and eventually drains into the Roanoke River. Runoff from deforested slopes can harm water quality and aquatic life, she says.

“It’s very disturbing on our part to see the surfacing on the sides of the problem,” said Judy Dunscomb, a senior conservation scientist at the Nature Conservancy, which supports both renewable energy and forest conservation. “On the one hand, people are trying to push through these really big projects and places are becoming more and more concerned about the potential impacts of those projects.”

The US Department of Energy says it will install solar panels on roofs and carports could supply nearly 80% of the country’s electricity needs. And while that may be true, there are far fewer incentives for such installations and the cost of those systems per watt is significantly higher than for grid-scale solar installations. They also don’t interconnect with the grid, but they do offer the promise of supporting more resilient, more diversified microgrids.

Dominion Energy plans to develop a solar farm in southwest Virginia on a flattened mountaintop that was blown away for coal. Such projects hit a sweet spot, the New York Times say. They are large enough to realize economies of scale, located on land that has already been degraded, and can stimulate the economy of a region in dire need of economic aid.

For example, there are more such former industrial sites on landfills, but they are often far from transmission lines. And the surfaces of such locations can be unstable, making construction complicated and expensive. Just about the worst thing that could happen to the climate is that one of its closest allies – solar energy – is seen as such a bad neighbor that no one wants it around.

The Inflation Reduction Act will turbocharge solar power plants across America. The hard work is not in building it. The hard work is figuring out how to place them in places that have community support and lend themselves to network connectivity.

States will also have to weigh up their interests in attracting large employers. In Virginia, Amazon, Google and Microsoft have committed to renewable energy, but together they use up to two gigawatts of power, nearly one-sixth of the state’s total power consumption. If Virginia wants the benefits these employers can provide, it will have to figure out how to meet their renewable energy demand or see them go elsewhere.

It is a delicate dance, and in the end it will be impossible to make everyone happy. The key will be to decide what role the need to reduce CO2 emissions should play. Because unless the earth stops overheating, as many as three quarters of the earth’s people could perish by the end of this century. It’s a matter of priorities, but that doesn’t mean the process won’t be messy.


 

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