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Is "Solar+"​ the future of energy?

source: Pixabay

Solar power, specifically PV, has grown rapidly since the turn of the century. That growth shows little sign of slowing down on a global basis.

The initial driver of growth was subsidy, in particular the introduction of feed-in-tariffs (FiTs) in Europe, along with other policy mechanisms like tax credits in the US. Now though, continued growth is being driven by the competitiveness of solar energy: even without subsidy, solar in many markets is already the cheapest way to generate a kWh of electricity. Subsidy has largely done its job and is, quite rightly, being reduced or removed. Both at the product level and between project developers, through auctions, a combination of technological progress and market competition are and will continue to drive costs down.

Of course there are plenty of criticisms of solar, in particular the potential limits of its value to electricity systems once “full costs” are taken into account: those required to balance the supply and demand of electricity in the face of variability (which is an factor for both supply and demand).

My response to those criticisms is that we'll increasingly live in a "solar +" world. Solar will be the preferred way to produce a kWh of energy, because nothing will be able to compete on cost. The "+" will refer to a variety of integrations that add ‘dispatchability’ (flexibility and predictability - and hence value) to that energy.

We’re already seeing a range of “solar +” examples emerging - I very briefly highlight some below. In some cases they are already competitive with conventional alternatives.; in others they are early in their evolution, and costly. But then it would be ‘brave’ to bet against technological progress…

+ Storage

The most obvious “solar +” application at present is the addition of storage. In particular the addition of Li-ion battery storage, since the latter industry is experiencing growth and cost-reduction pathways that will look very familiar to those with a PV background.

Example markets like Hawaii are shifting solar energy away from the middle of the day (where it can be problematic for the system) towards the evening peak. Their latest RFP points towards ever-increasing storage durations (6 hours) and also recognises the crucial role that distributed resources, presented via aggregators, will play.

The impact on the business case for traditional sources of peaking power – gas generators – is already being felt. In the southwest US, tenders for solar + storage have come in at less than $30/MWh (and, in the long-run, costs are only going one way). That’s led analysts such as Wood Mackenzie to forecast that more than 6.4 GW of new natural gas-fired peaking capacity in the US could be at risk by 2027, with developers such as 8minutenergy Renewables claiming that they can build solar+storage “a factor of two cheaper”.

Another announcement which really caught my eye recently was that, by aggregating residential solar + storage from about 5,000 customers, Sunrun had won a bid for 20 MW in ISO-NE’s 2022-2023 Forward Capacity Market. They’ll be paid $3.80/kW/month ($912,000 for the full year contract). Although this represents a tiny part of the total capacity market in New England, the significance of this announcement is how it points to the direction of travel – with the addition of storage able to turn solar into something able to provide a predictable, contractable future capacity guarantee.

+ EV Charging

I quite often refer to electric vehicles (EVs) as “mobile batteries”. After all, to the power system, that’s exactly what they look like.

So it’s no surprise that the integration of solar with EV charging is already a focus for many companies. For example, on a product level, SolarEdge recently announced what they claim to be the “world’s first” integrated (2-in-1) EV charger and solar inverter, so removing the need to install separately a charger and a PV inverter and more easily and efficiently managing the smart interaction between solar generation and the car.

Taking things further, there will certainly be growth of systems which combine solar with both “mobile batteries” (EVs) and stationary ones. In particular, stationary batteries will provide an important buffering mechanism between constrained grid connections and fast chargers. Integrating these systems with solar canopies like this one will further reduce grid loads, as well as ensure that charging of the cars is kept as 'clean' as possible.

+ Other Low-carbon Power Generation

There are some obvious synergies and advantages to integrating solar with other power sources, particularly other clean ones.

From a practical point of view, it enables sharing of key project assets such as land and grid connections. Companies such as GE are even starting to build projects where solar panels are directly integrated with power conversion within the wind turbine, so reducing balance of plant costs too, and increasing both capacities and energy outputs.

Another factor in integrating solar and wind is that the two energy sources are often complementary in terms of when they are (and are not) available. So in the example given above, solar is expected to provide peak energy in the summer, with wind doing so in the winter.

Once again, these may seem like tiny projects in today’s market, but they provide important pointers to the future.

Some policymakers agree. India’s Ministry of New & Renewable Energy released their National Wind-Solar Hybrid Policy in May 2018, aiming to provide a framework for promoting large grid connected wind-solar PV hybrid systems. A big motivation to do so is to optimise the usage of transmission infrastructure and land, while reducing the impacts of solar and wind on energy variability and grid stability. In most cases, if not all, battery storage is likely to be an additional component of the plant design.

Such plants are being built, for example this 41 MW solar photovoltaic, wind, and battery storage hybrid plant in Andhra Pradesh. It consists of 25 MW solar PV and 16 MW of wind, coupled to an energy storage system.

Another way to address variability issues with solar and share vital resources such as grid connections is to integrate not with wind but with a dispatchable, low-carbon source instead: such as hydropower. Here’s an example from Thailand, where it’s planned to build a 45-MW solar array next to an existing hydro dam – indeed floating in the reservoir behind that dam. If the project is a success then the intention is to follow it with 15 more similar projects: up to 2.7 GW total generation.

+ Conventional fuelled generators

Particularly in systems such as microgrid or off-grid (captive power), where there are limited sources of supply which can be used for balancing, it may prove for some time to be impossible to totally avoid the use of conventional fuels. Nevertheless, given how much money solar generation can save compared to transporting and burning fuels like diesel, integrating clean with ‘dirty’ generation – in many cases with battery storage too – will become the norm.

Less fuel doesn’t just mean lower cost, it means more predictable cost too (less exposure to fluctuating commodity prices). It also means lower emissions. Even if this doesn’t create direct value (through renewable energy certificates or similar), it will increasingly create indirect value through the preference of shareholders and lenders to put their money into cleaner projects and avoid the risk of stranded, carbon-heavy assets.  

There are already plenty of examples; such as this one, where Resolute Mining has signed an agreement for the development of a 40 MW independent solar hybrid power plant at a gold mine in Mali, West Africa. The plant will combine solar, battery, and heavy fuel oil (HFO) technologies. When constructed, it hopes to be the world’s largest off-grid, fully integrated hybrid power plant for a stand-alone mining operation. It will replace an existing 28MW diesel plant and should generate savings of up to 40% on the current operating costs.

+ Clean fuel: Hydrogen

Of course a natural evolution of that last example is to combine solar with a dispatchable fuel which is itself low-carbon. And it shouldn’t have escaped your notice how much talk there is nowadays about hydrogen as a candidate to do just that – so long as the hydrogen is produced by splitting water using clean electricity (and solar would be the cheapest), rather than from fossil fuels (which most hydrogen is today).

There are already some interesting examples emerging where solar is integrated with hydrogen production, such as this energy self-sufficient housing complex in Vårgårda, Sweden. A block of thirty flats runs entirely on solar energy and stored hydrogen. When fully completed and operational, one hundred and seventy-two flats in six housing blocks will be able to operate free from external energy sources, because rooftop solar PV will produce enough energy to meet residents’ power needs year-round. When the sun is shining, surplus energy is collected in a battery and can be used to produce hydrogen, which is compressed and stored. When needed, a fuel cell converts hydrogen back to electricity. Summer overproduction can be stored as hydrogen for use in the winter.

This is a small-scale example and it’s important to note that electrolysis is very much still at an early (and small) scale. However expect it grow rapidly and look out for a number of innovations to expand its scope – for example this (currently R&D) approach to using seawater as the water source.

A key point to note in any solar + hydrogen discussion is that conversion back to electricity in a fuel cell is only one possible pathway for the hydrogen. Alternatively, hydrogen very much provides an opportunity for “solar +” to provide a crossover into solving decarbonisation conundrums within the heating and transport sectors too.

Solar technology is not standing still

Finally, it’s important in our “solar +” discussion not to concentrate solely on the added integrations (the “+” part). Solar PV is still a technology with huge scope for both evolutionary and disruptive improvements.

Already technologies such as bifacial have gone from nothing to over 10% of the new-build market in a very short space of time. They may capture 40% of the global market within a decade, particularly as ‘bankability’ factors become better understood.

In the longer term (don't expect to see these on a solar farm near you anytime soon) research such as this, achieving 28% conversion efficiency for perovskite silicon tandem solar cells, will one day feed through to better performing commercial solar panels.

We’ll also see entirely new materials for solar PV, particularly in thin-film. Some are just at the start of their commercialisation and growth curves, but will ultimately drive solar into applications currently out of reach. As the linked article says, just because solar has reached ‘grid parity’ with competing conventional sources, it doesn’t mean that’s the end of the solar innovation story: “people didn’t stop making cars when they reached horse parity”.

Regardless of the direction of future solar technology, expect the advantages of a “solar +” approach to our energy system to continue to expand, both in terms of hybridisation diversity and its market impact.

John Massey's picture

Thank John for the Post!

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Discussions

Audra Drazga's picture
Audra Drazga on Apr 16, 2019 8:28 pm GMT

Great Article John, thanks for sharing. 

Matt Chester's picture
Matt Chester on Apr 17, 2019 12:30 am GMT

Love this piece, John. This quote in particular:

My response to those criticisms is that we'll increasingly live in a "solar +" world. Solar will be the preferred way to produce a kWh of energy, because nothing will be able to compete on cost. The "+" will refer to a variety of integrations that add ‘dispatchability’ (flexibility and predictability - and hence value) to that energy.

Sums up the possibility of tomorrow's grid and how different our kids may look at energy than we do, to me at least

William Hughes-Games's picture
William Hughes-Games on Apr 18, 2019 8:34 pm GMT

A factor to make solar a feasible alternative to fossil fuel which seems to get less attention is Demand Balancing.  A cupboard full of washed dishes or an airing cupboard full of clean clothes, washed when electricity was available in excess of demand is energy storage.  The demand when power is scarce is then reduced.  We need truly smart grids, not these pitiful excuses for smart grids which some power companies foist on us with the only aim of eliminating meter readings.  The power companies should be continually updating the cost of power, reducing it when excess is available until it triggers our smart meters and smart devices to start up.  However there are even better power demands to use for balancing the grid.  In the above example, once your washing machine starts, you don't want it to stop so it must continue the cycle regardless of the power cost during the cycle.  Heating your water or charging your battery, or for that matter, producing Hydrogen for your private use has no such disadvantage.  It can go on and off according to the  power price you have slected.  True smart meters and devices and power companies that vary the power cost according to availability are the key.  And they benefit as well.  More water can go through the generators insteas of over the spill way and there is much less need to feather their wind turbines.  They sell more power.

Ned Ford's picture
Ned Ford on Apr 18, 2019 11:44 pm GMT

We have known for some years that solar was expected to get cheaper than anything else.  "Anything else" at this point is wind.   I fully expect solar to become cheaper than wind, but think about it this way:  Free solar and free wind.  What is the best mix?

I see a future that generates 100% renewables, about 60% wind, 30% solar and 10% everything else that we have already, which won't expand a lot.  Also we need about 60% more electricity than we have today by 2040, in order to fuel electric cars and air to air heat pumps that replace heating oil, propane and natural gas furnaces.  And a few other things.  This causes a 70% reduction in GHG (66% of it is CO2, 4% is methane from fossil fuel extraction).

That's based on today's price relationship.  The cheaper solar gets the more we want, up to a point.  That point is where we need storage to shift solar to other times of the day  Unlike solar, wind can conform reasonably well with total load, and it is so cheap that we can overbuild and use the excess for all the storage you mention.  EV's have ended the push for hydrogen cars, but hydrogen storage for backup power may be a hot contender for battery storage, and there are at least three other storage technologies in the running.  Transmission may substantially reduce the need for storage, or we may find storage plus wind and solar is cheaper than transmission.

I'm very enthusiastic about dispatchable load.  And a lot of things emerge as we get to the point where we have some wind or solar to store.  Existing combined cycle plants can run on hydrogen and existing natural gas storage is enough for about four months of total U.S. consumption.  I'd do that calculation over when we prove that excess wind and solar generation can be turned into hydrogen at the price it needs to be, but I think it is solidly on the table for our 100% renewable future.

The biggest deal here is that whether it is wind or solar, or a stronger push for efficiency, with wind and solar, it is a future where a KWh costs less than it does today - maybe 20 - 25% less, and there are abundant jobs and abundant clean electricity, and we don't have to worry about climate change getting any worse.

How wind and solar stack up against eachother is much less important than getting as much as possible as fast as possible of both.  There's plenty of time for the relationships to sort themselves out after we get done eliminating fossil fuels and replacing the aging nuclear fleet.

 

Nathan Wilson's picture
Nathan Wilson on Apr 23, 2019 2:07 am GMT

A solar energy future is certainly capturing the imagination of many people, but the numbers suggest it will remain a minority contributor!

According to LBNL's 2018 report, solar only provided 2% of US 2017 electricity.  The SEIA reports that new solar installations actually dropped 2% from 2017 to 2018, falling to only 10.6 GW, which is dwarfed by the 19.3 GW of new gas-fired installations (eia).  Windpower, which is much larger at 6.5% of US electricity (source AWEA) roughly tied solar for new installations last year, when the numbers are adjusted for capacity factor (7.6 GW at 35%, vs 10.6 GW at about 25%).

Of course, wind and solar are not exactly complementary (i.e. there is typically a lot of day-time over-lap in their output).  But part of the time, the wind does blow while the sun is not shining.  And the way electricity markets work, anytime the combined supply of wind and solar exceeds demand, electricity prices fall to zero (which deters new construction).  Because combined wind/solar systems have better diversity of output, a combined system will always be easier for the grid to accommodate than solar alone (i.e. less storage required).  This is supported by studies from the US NREL and even in studies of German's storage-rich grid.

In fact, NREL studies show that even with very cheap energy storage, an optimized grid will not use much storage.  Storage is only economical when there are frequent deep swings in the cost of electricity (i.e. frequent zero-priced electricity), since storage's roll is to buy-low and sell-high.  Solar will produce frequent zero-priced electricity, even at annual penetration as low as 10%, but that will signal the market to build another type of generation, with less production over-lap with the existing solar.  Thus we see growth in the US gas-fired generation and windpower.  In fact, for most of the US, windpower is much cheaper than solar, due to the higher capacity factors.  Additionally, wind farms can (and should for minimal eco-impact) be co-located with crops on farm-land for very little net land use, whereas PV farms monopolize all the land they use.

The exceptions to the wind-solar mix may be California and Florida, which have poor wind energy resources.  We'll see how much they choose to invest in batteries (particularly given the strong influence of the fossil gas industry on California politicians).  The central US is already way ahead of California and Florida in deploying renewables, with several states already boasting >30% annual windpower penetration, compared to California's 12% of load served by solar (and 5.5% windpower).  The interior states can easily double their windpower deployments before there will be any technical/market reason to diversify with solar.  Texas (at 15% 2017-windpower) is starting to see some small solar deployments, but that's responding to a desire for "green virtue signaling" from companies and cities (e.g. Austin), rather than actual economic competitiveness with windpower.

Another factor is the US federal tax subsidy, which has powered solar and windpower growth, and which we are promised (by advocates) is no longer needed for strong growth, may not be really going away.  Interruptions in the PTC/ITC in the past has always resulted in steep decreases in wind and solar installations.  The so-called "phase-out" legislation in 2015 was really an extension until after the 2020 elections.  We can expect that every new windfarm that goes into service through the end of 2020 will claim a "2016 start date", which gives them the full 30% PTC, with a tiny 5% of costs incurred in 2016 to define the start of the max 4 year construction.   The solar PTC "phase-out" doesn't even start until the end of 2019, so no extensions are needed until after 2022 (i.e. no need to even ask for extensions yet).

So given the subsidy-dependence and the fact that solar works best when combined with other energy sources that can produce at night (i.e. wind & gas), what are poor countries doing?  Unlike the US, China and India don't have large fossil gas production, and what they have is needed by heavy industry (i.e. concrete & steel) for heat.  China is deploying PV, but with huge year-to-year fluctations in PV, driven by government policy: 53 GW in 2017, 35 GW projected for 2018 (for a total of 160 GW).  India's PV installations were 9 GW in 2017, about 6 GW in 2018 (hitting 25 GW total).  China and India both are continuing to deploy windpower (20 GW/year China, 4 GW/year India, with about 5% of annual electricity from wind in each, per LBNL-2018).  Both use feed-in tariffs as the subsidy mechanism.

Most importantly China and India are both continuing to build new dispatchable plants, mostly coal-fired power plants, which provide the majority of electricity in each country (China has 900 GW of coal-fire capacity, India has 200 GW).  Both also have world-leading annual nuclear power deployments, using domestic designs.  China spent a few years building nuclear plants with imported designs (e.g. Westinghouse AP1000, European EPR, and Russian VVER-1000), and after a pause to incorporate the best technology of each, is now ramping up production on their domestic H1000 and CAP1400 designs, with likely build rates of about 7 GW/year (equiv. to 25 GW of solar PV).  India is building VVER-1000s and domestically designed PHWR-700s, at a rate of 1-2 GW/year (source).

Bob Meinetz's picture
Bob Meinetz on Apr 23, 2019 4:41 pm GMT

"Solar power, specifically PV, has grown rapidly since the turn of the century. That growth shows little sign of slowing down on a global basis."

Facts suggest otherwise.

"While overall global investment in clean energy saw a decrease of just 1% year-over-year in the first half of 2018, solar’s share dropped 19% following changes to China’s PV policy and lower project costs, says Bloomberg New Energy Finance. It forecasts this trend to continue throughout the year."

I might feel a trace of guilt for raining on the Happy Renewables Fantasy Parade if it wasn't so hopelessly divorced from reality, and there wasn't so much at stake.

Germany's Failed Climate Goals: A Wake-Up Call for Governments Everywhere

Nathan Wilson's picture
Nathan Wilson on Apr 25, 2019 3:32 am GMT

Wow, surprising to see an article from pro-renewable Bloomberg admitting that Germany's Energiewende is failing.  It actually admits that the nuclear-phase-out is a big part of the problem.

It falsely claims:

"Germany was the first major economy to make a big shift in its energy mix toward low-carbon sources."

While forgetting that France, Sweden, and Switzerland all achieved deeply decarbonized grids many years ago using a mix of nuclear and big hydro.

And it closes with the claim that CC&S is the next great hope (with no thought of reversing the anti-nuclear strategy; shocking, given that nuclear is the only strategy that has ever worked!).

Bob Meinetz's picture
Bob Meinetz on Apr 26, 2019 3:26 pm GMT

Nathan, likely Bloomberg's authors didn't forget anything - they probably weren't aware of the accomplishments of France and Sweden. Or that CCS, hydrogen fuel, clean coal, biomethane, and biofuels were clever marketing, born in the boardrooms of desperate extraction companies. After all, it had almost become  "common knowledge" that renewables equate to clean energy.

That's changing, if not quickly enough. Like Bloomberg, the New York Times is losing its appetite for defending Church of Renewables dogma against science:

"As young people rightly demand real solutions to climate change, the question is not what to do — eliminate fossil fuels by 2050 — but how. Beyond decarbonizing today’s electric grid, we must use clean electricity to replace fossil fuels in transportation, industry and heating...

Where will this gargantuan amount of carbon-free energy come from? The popular answer is renewables alone, but this is a fantasy...

But we actually have proven models for rapid decarbonization with economic and energy growth: France and Sweden. They decarbonized their grids decades ago and now emit less than a tenth of the world average of carbon dioxide per kilowatt-hour. They remain among the world’s most pleasant places to live and enjoy much cheaper electricity than Germany to boot.

They did this with nuclear power."

Nuclear Power Can Save the World

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