The opportunity cost of cheap PV

The ever lower cost of photovoltaic solar cells is great news, in so many ways – but paradoxically, it could delay the transition to completely renewable electricity.

Storing electricity is difficult and expensive. To do it with batteries in an isolated rural home is easy (and common) enough, but if you tried to roll out batteries on a large scale, the amount of materials needed would cause an ecological disaster in itself – if you don’t believe me, read this article by Tom Murphy, an associate professor of physics at the University of California, San Diego.

Tom Blakers has argued for using pumped-storage hydro power, which certainly works – but on this dry continent there are going to be a lot of questions before we decide how much of that we can use.

Photovoltaic cells produce electricity directly. On the other hand, solar thermal power plants can easily build storage, because heat is quite easy to store. As we have already reported, the Torresol Gemasolar plant has successfully achieved 24 hours round-the-clock electricity production.

But if solar companies turn in a big way to photovoltaics, which only generate electricity while the sun shines, we can generate a lot of clean electricity (and cut some emissions) – without making the necessary preparations to completely abandon our reliance on fossil fuel energy.

Solar thermal plants continue to be built in countries that have put in place some of the necessary assistance to renewable energy, but as the article below indicates, if bottom line cost considerations are our only guide then we may fall to the old maxim “if you don’t know where you are going, any road will take you there.”

The World’s Largest Planned Solar Plant Switching 500 MW from Concentrated Solar Thermal to Photovoltaics

From Climate Progress. Stephen Lacey, Aug 18, 2011

Nothing happens very quickly in the energy sector. That’s why the rapid economic change in solar PV is such a fascinating story – the downward cost curve for modules looks more like what we see in consumer electronics, not in energy technologies.

Given that trend, today’s news probably isn’t a huge surprise: The two companies responsible for the development of the world’s largest solar plant – the 1,000 MW Blythe Project in Southern California – said they would be using photovoltaics in place of concentrating solar power for the first 500 MW phase.

Solar Millennium and Solar Trust of America received a $2.1 billion loan guarantee for the first phase of the project earlier this year. It was originally going to utilize parabolic troughs, but will now be all PV.

GTM Research Senior Analyst Brett Prior estimates that the installed cost of 500 MW of parabolic troughs at the Blythe site is about $5.79 a watt. Today, with PV prices so low, the project could pencil out to $3.40 a watt with crystalline-silicon PV.

“My sense is that with the CSP version, even with subsidized debt, Solar Trust of America couldn’t get direct/sponsor equity investors to sign on, as the expected returns must have been too low,” explains Prior to Climate Progress.

This brings the total capacity of CSP-to-PV conversions to 2,999 in the U.S., according to GTM Research:

Alpine SunTower 92 MW (NRG/eSolar)

New Mexico SunTower 92 MW (NRG/eSolar)

Calico 850 MW (Tessera/SES)

Imperial Valley 709 MW (Tessera/SES)

Beacon 250 MW (NextEra)

Ridgecrest 242 MW (STA)

Agua Caliente 280 MW (NextLight)

Blythe phase I 500 MW (Solar Millenium/Solar Trust of America)

Total: 2,999 MW

Solar Millenium and Solar Trust of America say they’re still committed to CSP. But like so many other companies, the market conditions are strongly favoring PV – a technology that can be deployed much faster and cheaper.

Expect the trend to continue as a chronic oversupply of PV modules keeps prices depressed and hardware/power electronics companies also continue dropping costs and increasing reliability.

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