How not to use feed-in tariffs


in Economics, Geek stuff, Law, Politics, Science, The environment

As I mentioned when expressing doubt about Bloom Boxes, many environmentalists assume that distributed generation of electricity is inherently preferable to large-scale generation and transmission. As I have argued in the past, there are good reasons to argue the converse. Micro wind turbines are especially dubious, given that the energy output from turbines increases with the diameter of the blades. Those little rooftop turbines some people install just don’t make sense, unless they live in very remote and windy areas. In a place as northern and cloudy as Britain, home solar photovoltaic arrays may make even less sense, especially if investments in more cost-effective options like improving efficiency of energy use have not yet been made. Saving many kilowatt-hours a day through better insulation beats producing a trickle of electricity, especially given that it is less costly.

In a recent essay, George Monbiot argues that feed-in tariffs for small scale renewables are regressive and a waste of money:

[The government] expects this scheme to save 7m tonnes of carbon dioxide by 2020(5). Assuming, generously, that the rate of installation keeps accelerating, this suggests a saving of around 20m tonnes of CO2 by 2030. The estimated price by then is £8.6bn. This means it’ll cost around £430 to save one tonne of carbon dioxide.

Indeed, if the government is going to provide feed-in tariffs for renewable projects, they must be the sort that can actually make a difference: multi-megawatt run-of-river hydro projects, concentrating solar stations that can put out baseload power, and the like. If the government wants a sound climate policy for homes, it should be tightening building standards, encouraging retrofits, and the like.

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{ 14 comments… read them below or add one }

scatter March 4, 2010 at 10:45 am

I think George lost the plot in that article. Some fundamental errors that completely undermine his arguments. Some slightly more level headed responses came via letters the next day:

We’re talking a few pounds on the average annual electricity bill in return for full pump priming of the microgeneration industry.

Yes it’s not the most cost effective way of cutting carbon but the fact is that every available roof will need solar PV and solar water heating by 2050 so we’ve got to start somewhere.

There’s lots of energy efficiency activity planned for the coming decade so it’s not like this is happening at the expense of other activity.

Milan March 4, 2010 at 10:58 am

Yes it’s not the most cost effective way of cutting carbon but the fact is that every available roof will need solar PV and solar water heating by 2050 so we’ve got to start somewhere.

This is far from established.

Small diameter turbines are fundamentally inefficient, as is solar PV in England. We need to be investing in cost-effective solutions that can be deployed at large scales, not distracting sideshows that are profitable for some companies and individuals.

scatter March 4, 2010 at 11:18 am

If you’re talking roof mounted wind turbines I would agree, but not well sited mast mounted turbines. And in the middle of the UK, solar PV generates 60% of the quantity generated at the very southern tip of Spain:

I don’t call that inefficient.

The UK is shooting for an 80% cut in CO2 emissions while allowing aviation to stay at 2005 levels. This, along with the difficulty of cutting some industrial emissions, effectively means we need to totally decarbonise both housing and transport. A domestic scale PV installation (2.5kWp) will generate enough electricity in a year (2,125kWh) to power an electric vehicle for 9,000 miles which is the average. We’ll need those roofs.

By the 2020s / 2030s solar PV will be cheap and the installer base will be there, but that doesn’t just happen magically overnight.

Milan March 4, 2010 at 11:29 am

You should read David MacKay’s excellent book: Sustainable Energy – without the hot air. It is available online for free, and provides detailed information about what renewable energy solutions for the UK would actually look like.

scatter March 4, 2010 at 11:35 am

I know it – it’s an interesting read. He makes some very good points but he’s not right about everything.

I’m not saying we can get by purely on microgen. We need lots of large scale capacity too and we need a means to share it with our neighbours.

(link needs fixing btw)

. March 4, 2010 at 11:37 am

Solar photovoltaic

Photovoltaic (PV) panels convert sunlight into electricity. Typical solar panels have an efficiency of about 10%; expensive ones perform at 20%. (Fundamental physical laws limit the efficiency of photovoltaic systems to at best 60% with perfect concentrating mirrors or lenses, and 45% without concentration. A mass-produced device with efficiency greater than 30% would be quite remarkable.) The average power delivered by south-facing 20%-efficient photovoltaic panels in Britain would be:

20%× 110 W/m2 = 22 W/m^2.

Figure 6.5 shows data to back up this number. Let’s give every person 10 m^2 of expensive (20%-efficient) solar panels and cover all south-facing roofs. These will deliver:

5 kWh per day per person.

Since the area of all south-facing roofs is 10 m^2 per person, there certainly isn’t space on our roofs for these photovoltaic panels as well as the solar thermal panels of the last section. So we have to choose whether to have the photovoltaic contribution or the solar hot water contribution. But I’ll just plop both these on the production stack anyway. Incidentally, the present cost of installing such photovoltaic panels is about four times the cost of installing solar thermal panels, but they deliver only half as much energy, albeit high-grade energy (electricity). So I’d advise a family thinking of going solar to investigate the solar thermal option first. The smartest solution, at least in sunny countries, is to make combined systems that deliver both electricity and hot water from a single installation. This is the approach pioneered by Heliodynamics, who reduce the overall cost of their systems by surrounding small high-grade gallium arsenide photovoltaic units with arrays of slowly-moving flat mirrors; the mirrors focus the sun- light onto the photovoltaic units, which deliver both electricity and hot water; the hot water is generated by pumping water past the back of the photovoltaic units.

The conclusion so far: covering your south-facing roof at home with photovoltaics may provide enough juice to cover quite a big chunk of your personal average electricity consumption; but roofs are not big enough to make a huge dent in our total energy consumption. To do more with PV, we need to step down to terra firma. The solar warriors in figure 6.6 show the way.

A technology that adds up

“All the world’s power could be provided by a square 100 km by 100 km in the Sahara.” Is this true? Concentrating solar power in deserts delivers an average power per unit land area of roughly 15 W/m^2. So, allowing no space for anything else in such a square, the power delivered would be 150 GW. This is not the same as current world power consumption. It’s not even near current world electricity consumption, which is 2000 GW. World power consumption today is 15 000 GW. So the correct statement about power from the Sahara is that today’s consumption could be provided by a 1000 km by 1000 km square in the desert, completely filled with concentrating solar power. That’s four times the area of the UK. And if we are interested in living in an equitable world, we should presumably aim to supply more than today’s consumption. To supply every person in the world with an average European’s power consumption (125 kWh/d), the area required would be two 1000 km by 1000 km squares in the desert.

Fortunately, the Sahara is not the only desert, so maybe it’s more relevant to chop the world into smaller regions, and ask what area is needed in each region’s local desert. So, focusing on Europe, “what area is required in the North Sahara to supply everyone in Europe and North Africa with an average European’s power consumption? Taking the population of Europe and North Africa to be 1 billion, the area required drops to 340 000 km^2, which corresponds to a square 600 km by 600 km. This area is equal to one Germany, to 1.4 United Kingdoms, or to 16 Waleses.

The UK’s share of this 16-Wales area would be one Wales: a 145 km by 145 km square in the Sahara would provide all the UK’s current primary energy consumption. These squares are shown in figure 25.5. Notice that while the yellow square may look “little” compared with Africa, it does have the same area as Germany.

Milan March 4, 2010 at 11:39 am

In short, even providing 10 square metres of PV panels per person in the UK would only generate 4% of the amount of energy used by the average European. And those panels are expensive, particularly once you start thinking about energy storage to correct for variability.

Surely, there are more efficient ways we can be spending money at this point, while houses are still leaky and heated with conventional furnaces.

Milan March 4, 2010 at 12:00 pm

The UK is shooting for an 80% cut in CO2 emissions while allowing aviation to stay at 2005 levels.

This also strikes me as a dubious plan. Why cut more important activities to the bone, so people can keep attending stag parties in Tallinn or two-hour business meetings halfway across the continent?

Frivolous air travel is one of the things that should be cut back on first. Putting taxes on jet fuel used internationally would be one way of getting started on that. Another would be enacting policies to discourage short-haul flights.

Air travel seems to be one area where policy in the UK is incoherent:

scatter March 4, 2010 at 12:12 pm

Believe me I fully agree with hitting energy efficiency (especially household) very hard. When we do, that 5kWh per person per day will be considerably more than 4%!

In the coming decades we’re going to need every bit of juice we can get our hands on and the ability to generate half of a home’s (current) electricity consumption on site is an obvious win to me.

Most importantly, PV is not going to be expensive for ever. Parity with fossil fuels is well within the industry’s grasp, but that’s not going to happen by itself.

. March 4, 2010 at 12:21 pm

Will Solar Prices Fall into Grid Parity?

But as those two examples illustrate, grid parity will almost certainly NOT come to the United States as a whole all at once. Federal incentives were expanded in 2009, including the removal of the $2,000 cap on residential systems and the admittance of utilities into the Investment Tax Credit, but continue to vary widely between states. The feds provide a baseline subsidy, but what truly makes solar affordable for most homeowners and businesses are the added incentives offered by their state. So, in terms of reaching grid parity, we can expect the Southeast — despite its healthy share of sunshine — to be the slowest to reach the Holy Grail. This is due primarily to a lack of incentives, low electricity costs and a deep connection to fossil-fueled electricity.

Without incentives, there is still a real chance for PV, especially commercial PV, to reach grid parity in the relative short-term. Current capital costs for commercial PV are about $5.50 to $6.60 per watt depending on the size of the installation, according to Standard & Poor’s. Incentive levels in many northeastern states are upwards of $4.00 per watt, which means that, given incentives, the levelized cost of electricity (LCOE) of commercial PV systems was already below standard commercial rates. Furthermore, if falling panel prices enable systems to reach or fall below $5.00 per watt, then solar PV could reach parity even without subsidies.

Residential grid parity is more distant but still closest in the Northeast. Outside of the Southwest and Northeast, where solar irradiance and/or electricity costs make the solar-grid-parity question more complicated and uncertain, help will have to come from other renewables. Most notable among these are geothermal (Northwest) and wind power (Midwest). It is important when discussing grid parity for solar power not to forget its intermittency and the fact that some backup power system will be needed. Even if our solar infrastructure were so advanced as to provide all our power needs during peak load times, we would still need alternative sources to pick up the slack on cloudy days and at night.

. March 5, 2010 at 12:22 pm

Treachery or Common Sense?

I’m being hounded for taking a stand against feed-in tariffs: here’s a riposte to the critics.

By George Monbiot, posted on the Guardian’s website, 5th March 2010.

Once again I am a traitor to the cause, a corporate sell-out, a dangerous maverick who has gone over to the dark side. My column this week on feed-in tariffs provoked the same sort of charges that were levelled against me when I first came out against biofuels in 2004. We’ve now seen how that’s panned out. When other greens wake up to the amazing waste of money and opportunities this scheme represents, I think the feed-in tariff scandal will go the same way.

One of the more sophisticated responses came from my old sparring partner Jeremy Leggett, chairman of the installation company Solar Century. He managed to ignore most of my arguments, but never mind. Here is the fork he is impaled on. Either solar photovoltaic (PV) power in the United Kingdom is, as he claims, a cheap, efficient technology, or it isn’t. If it is, why should we be subsidising it to the tune of 41p per kilowatt hour? If it needs this subsidy, it is neither cheap nor efficient. If it doesn’t need it, the feed-in tariffs are even more of a swindle than I thought.

A recent paper Leggett helped to write claims that solar PV will achieve “grid parity” for homeowners in 2013. This means that the electricity produced, when all costs are taken into account, will be no more expensive than the electricity we buy from the grid. Assuming we can agree on terms and measurement, I have £100 that says his prediction won’t come true. Will Leggett accept my bet?

To the greens who accuse me of treachery I say this: we do not have a moral obligation to support all forms of renewable energy, however inefficient and expensive they may be. We do have a moral obligation not to be blinded by sentiment. We owe it to the public, and to our credibility, to support the schemes which work, fairly and cheaply, and reject the schemes which cost a fortune and make no difference.

. March 12, 2010 at 2:05 pm

“My own instincts press me to support solar power. Like most environmentalists I believe that small is beautiful. I hate pylon lines and I don’t care for the sight of big power plants of any description, wind farms included. I detest the big energy firms which provide our electricity. I am deeply attracted to the idea of being able to produce my own power, just as I love producing my own fruit and vegetables. But my attempts to find the best means of tackling climate change, which I explain at greater length in my book Heat, have forced me to put my gut feelings to one side. Our choices must be based on the best possible information. Otherwise we waste our lives chasing chimaeras.

Against my instincts I’ve come to oppose solar photovoltaic power (PV) in the UK, and the feed-in tariffs designed to encourage it, because the facts show unequivocally that this is a terrible investment. There are much better ways of spending the rare and precious revenue that the tariffs will extract from our pockets. If we are to prevent runaway climate change, we have to ensure that we get the biggest available bang for our buck: in other words the greatest cut in greenhouse gas production from the money we spend. Money spent on ineffective solutions is not just a waste: it’s also a lost opportunity. “

viking logarta May 20, 2010 at 12:08 pm

There’s a debate raging in the Philippines over the definition of run-of river hydro to qualify for FIT rates . Specifically on amount of storage or regulation allowed. How is it defined in Canada? Please help.

. November 21, 2011 at 11:10 pm

Energy and the sun

SIR – The breakthrough in affordable solar cells over the past few years has been driven entirely by the “feed-in tariffs” that you criticise (“A painful eclipse”, October 15th). The replacements on offer—carbon pricing and renewable-energy quotas—have proved ineffective at supporting crucial, emerging technologies.

Quotas on renewables generate windfall profits for old hydropower and nuclear facilities that have long been written off, and subsidise the most profitable renewable- energy projects. Feed-in tariffs are limited in support to new power plants and can be differentiated to curb excess profit. By guaranteeing a reasonable return on investment, feed-in tariffs decrease the cost of capital, thus decreasing the market power of large utilities.

Germany’s solar-panel boom has both created employment at home (150,000 jobs last year) and driven the development of a flourishing solar-panel industry in China, with global benefits in the form of rapidly dropping costs. The trade goes both ways: China imports German manufacturing equipment.

The most cost-efficient long-term climate strategy is to support renewable technologies that have the potential for rapid cost reductions, including solar photovoltaic and solar thermal power. This will not be achieved through a carbon price alone. No big energy-generation technology has ever been commercialised without targeted support.

Lauri Myllyvirta
Sven Teske
Greenpeace International

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