Energies such as solar and wind have seen dramatic price falls. The revolution in non-grid energy should be embraced by the UK
Saturday June 2013
We are regularly told by conventional utility companies, many politicians and commentators that energies such as solar and wind are hopelessly expensive and reliant on enormous subsidy.
But this is simply wrong. Renewables have seen such dramatic price falls in the past few years that they are threatening to upset the world as we know it and usher in an almost unprecedented boom in the spread of cheap, clean, home-produced energy.
Solar will be the cheapest form of power in many countries within just a few years. In places such as California and Italy it has already reached so-called “grid parity“. Onshore wind, on a piece of land not constrained by years of planning delays, is already the cheapest form of energy on earth. These are not wild claims – those are figures from General Electric, Citibank and others.
Solar PV, the area in which my company operates, is a case in point. Three years ago firms like ours were paying about €3,600 per installed kilowatt of solar capacity on barn roofs in Germany. Today it can be done for just over €1,000 – a staggering 70% fall. That is seriously cheap and will just keep getting cheaper.
Thanks to a surge in global production to 60 gWp annually, (enough to supply British households – not offices or factories – with all their electricity) solar power has dropped dramatically in price. But there is more to come. Cambridge IP, a global innovation and intellectual property firm, says there is a surge of interest and R&D into two new forms of solar power which are likely to be available commercially by the end of this decade.
Newly built solar plants are already considerably cheaper than new nuclear plants per kilowatt hour of electricity produced and we are almost at the stage where we don’t need a guaranteed price (known as a feed-in tariff) because solar energy will compete head on with conventional energy.
True, there is an ongoing cost from the German government’s previous support for solar, but is much lower than the subsidies pumped by the western world into nuclear, coal, oil and gas over the past decades.
It is always amazing how a tax cut announced by George Osborne for North Sea oil and gas industry is greeted as somehow being good for Britain whereas any support for renewables is immediately dubbed a subsidy by the conventional energy companies wedded to their dying business model. A tax cut is a subsidy by another name. And remember the estimated £100bn plus cost to future taxpayers of disposing of Britain’s dangerous pile of nuclear waste.
And solar is starting to pay its subsidy back. Germany now has more than 30 gigaWatt peak (gWp) of solar plants installed, such that on almost all days in the spring, summer and autumn, solar energy surges into the grid at a time when demand is at is strongest (air conditioning etc is running like mad) and when spot market energy prices are at their highest.
This peak price is being forced down by solar, helping to reduce wholesale prices. The big energy companies hate this because this peak is where they make their money. Solar in Germany is almost down to wholesale prices – in sunnier countries it already is.
This brings me on to a really exciting development . Our company is starting to sell power directly from the barn roofs we have our plants on to the farmers who own the roofs and nearby towns wishing to rescue themselves from the grasp of the RWEs and E.ONs of this world.
Why? Because we can produce power at around half of what farmers are paying.
This so-called “distributed” (ie non-grid) energy is where the real revolution is taking place. Distributed energy not only saves on the huge amount of energy lost in grid distribution, but it helps lighten the load on the grid. Whole German towns are going completely renewable. The citizens get cheaper, cleaner power. If only Britain would get this.
Just to be clear – Germany (Europe’s biggest economy) now gets 25% of its electricity from renewables – a proportion that is increasing by the month. This is twice the level of the UK, although, interestingly, similar to that of Scotland on its own. Germany is also leading on figuring out how to overcome the problems of “intermittency” by storing renewable energy. I agree with the sceptical environmentalist Bjorn Lomborg that much of the world’s efforts to reduce emissions in the past couple of decades have been a waste of time. I also agree with him on the need for a surge in R&D to provide a cheap, renewable-energy-powered future. It is just that I think that future is already here, not decades away. And nuclear power is already a thing of the past.