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Solar at 2c/kWh – the cheapest source of electricity

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Major new study says policy makers and energy planners still underestimating cost potential of large scale solar. It says that tithin in a decade, it will be cheapest form of power and will fall to 2c/kWh.

agora solar cost fall

A major new study from a leading German think tank and renewable energy specialist says the cost reduction potential of large scale solar is still misunderstood, and predicts that solar PV will be the cheapest form of power within a decade, and cost less than $US0.02/kWh by 2050.

The study by the Berlin-based Agora Energiewende says that the end to cost reductions from solar plants is “not in sight”, even after falling more than 80 per cent in recent years.

It cites a range or reasons for this. Primarily, though, it comes down to an expected doubling in module efficiency, which will mean less panels are needed to produce the same amount of power, and therefore less land, less materials, less maintenance and lower installation costs.

These balance of systems costs are expected to fall by up to 2/3 in coming decades, and combined with a fall in the cost of finance, could cut the cost of solar technology in areas such as Australia, the US and parts of Europe to as low as 1.5 Euro cents/kWh.

“Even in the most conservative scenarios for market development, without considering technology breakthroughs, significant further cost reductions are expected,” the report says.

The forecasts produce a range of outcomes, depending on the actual increase in module efficiency – to 24, 30, or 35 per cent; the scale of deployment in coming decades, and the extent of “learning rates”.

Finally, depending on annual sunshine, power costs of Euro 4-6 c/kWh are expected in Europe by 2025, reaching Euro 2-4 c/kWh by 2050. That means it will be cheaper than conventional technologies – which costs between Euro 5c and 10c/kWh – by 2025.

It will even cheaper – at Euro 1.5c/kWh in countries with more sun.

“For the next decade, this represents a cost reduction of roughly one third below the 2015 level,” it says. “In the long term, a reduction of roughly two thirds compared to the current cost is expected.”

Lead author Daniel Fuerstenwerth said one of the reasons for the study was the lack of recognition among policy makers and advisors about future cost falls in solar PV, and official forecasts which continued to downplay the potential role of the technology.

This is despite the fact that organisations such as the International Energy Agency has predicted that solar costs would fall to 4c/kWh, and would in effect become “unstoppable”, and predicts it will be biggest single source of energy by 2050. Even Australia’s Bureau of Resource and Energy Economics recognises that solar will be the cheapest technology by 2030.

“The long term scenarios tend to underestimate the role of solar in power systems and in decarbonisation efforts,” Fuerstenwerth told RenewEconomy in a phone interview.

“When you look at the scenarios being prepared – there is always a very small share of solar. For example, in Germany, the power grid system is being discussed for scenarios that include a maximum 10 per cent share of solar PV in long term future.”

The Agora study found that in “large parts” of Europe, large scale solar was likely to be competing with conventional technologies – which costs between Euro 5c and 10c/kWh – by 2025.

agora cost ground mounted
In other regions of the world with higher solar irradiation, solar power will be even cheaper than in Europe.

“Our results indicate that solar power will become the cheapest source of electricity in many regions of the world, reaching costs of between Euro 1.6 and 3.7c/kWh in India and the Mena region (Middle East and North Africa) by 2050.

Cost competitive- ness with large- scale conventional power plants will be reached in these regions already within the next decade, at a cost for solar power by 2025 ranging between 3.3 and 5.4 ct/kWh.

(Indeed, in UAE for instance, solar is already cost competitive, with a tender for 200MW of solar going at less than $US0.06/kWh, less than the prevailing cost of gas-fired generation at $US0.09/kwh.

In North America, the study predicts that costs for large scale solar photovoltaics will reach Euro 3.2 to 8.3c/kWh in 2025 and Euro 1.5 to 5.8 c/kWh in 2050, the wide cost range due to significant geographical differences within the region.

In Australia, the study says, costs will reach Euro 3.4 to 7.1c/kWh in 2025 and 1.6 to 4.9 c/kWh in 2050. Interestingly, the study underlines how the cost of capital will be critical to the cost of electricity delivered by solar. This graph below illustrates how (remember the currency is in Euro).

agora cost country

 

“The cost of capital is and will remain a major driver for the cost of power from solar photovoltaics,” the report says. “Producing power from solar photovoltaics requires a high up-front investment, but subsequently allows power production for 25 years and more at a marginal cost of close to zero. It is thus a very capital-intensive power-generation technology, and the interest paid on both debt and equity has a large effect on the total cost of a large-scale photovoltaic project.”

It estimates the difference of the cost of technology could be as much as 50 per cent. “The regulatory environment will thus be key for reducing the cost of power from solar photovoltaics in the future, as the cost of capital is largely driven by the risk perceived by investors,” it notes. Australian developers understand this very well.

Here is the estimates on all regions:

agora solar

  

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  • john

    A very quick calculation cost of 5kw system $7000 which puts out 8000 KwH per year in the north of Australia for lets say 15 years.
    :- $7000 / (8000*15) = $0.05888
    The system is expected to work for over 20 years so use 7000Kwh as average.
    Result 5c KwH.
    This is small scale installation which is way above expected cost for commercial.
    The most expensive part of the system beside the labour is the inverter which as we all know Google has set a challenge to give $1 million to the designer who can come up with a better solution as a reward.
    In the commercial area I totally believe that 2c a KwH is easily achievable.

    • barrie harrop

      Deals are being done now at utility level in USA at 5 cents Kwh,2050 be a conservative projection,lets say it could be even 2020?

      • The 5c deals in US include an investment tax credit. so more likely 7c to 8c.

        • barrie harrop

          Yes.

    • neroden

      At this point, it’s important to make projections on battery costs too. These are coming in at 5c/kWh right now. 10c/kWh, or even 15 c/kWh is better than the grid in rural Australia; you should expect a decimation of the Outback grid very quickly.

      • john

        There is a very strong market that has been around for years with off grid power for stations all over Australia.
        The cost to clear and build poles and wires a few km is far dearer than the solar pv and battery solution and the figures are only getting better.
        Note {stations} I mean Cattle properties.

        • BarleySinger

          But don’t forget that those in the power business know their days are numbered when it comes to huge profits. This mess, is all about them dragging things out and grabbing for a few more dollars.

          This is also why in Queensland there are actually utility companies that REFUSE to take any power BACK from peoples grid-connected PV (they want all your business or one of it). Meanwhile in the middle east, there are new PV plants being built, instead of new GAS plants (at 2/3rds the cost of gas).

          Coal and gas production is central source power. Wind also requires a grid as does those huge solar plants … but … they are not as profitable and do not let the energy cartels keep sole control. The extreme profits of ‘black energy’ are going to die.

          Meanwhile right now it costs less to put PV on your house than it does to pay your electric bill. I have a quote in my inbox for 10KW monocrystaline solar with 2 sola-x inverters and 10kw deep cycle gel batteries, for just under $24k. Even if I added that onto my mortgage, it would STILL be less cash per month than I pay to AG – AND ould finally have reverese cycle (and stop tearing my right arm apart ever winter from chopping wood).

          Unless the big power outfits trot out some new form of unbelievably inexpensive power generation (and fast) there will be no reason at all to continue having the sort of BIG MONEY grid they love, and profit from. The grid will be very different. The thing you use when your own PV has problems, or when it is a very foggy winter day (July in SA).

          Lets also not forget the new cannabis based version of graphine, made form the fibers of the plant heated to 300C. Standard graphine is a high energy product, ungodly expensive and horribly polluting to make. Hemp based graphine is cheap. No high pollution, far less energy to make it, and with the same “Big Capacitor” style battery tech as a result.

          • Sim

            Utilities will have to start thinking of themselves as distribution networks as apposed to power supply centres. It would be better for a low feed in rate nearer to 5cents and the utilities have to pay all of the solar residential power supplied than for people to go off grid or get 8 cents intermittently with a high import rate. Limits should not be placed on 5kw systems max. only like in Queenland. If they buy low and sell high at least they become the ” battery” rather than people go off grid and use battery power which wastes a potential profit for utility and residential.

  • barrie harrop

    Abbott’s coal led future is disappearing over the horizon .

    • john

      Tone is now terminal as the Oz has items that undermine him.
      Once that paper decides to get rid of leader he/she is gone.
      Tone got his message from Peabody

  • John Saint-Smith

    Given Australia’s very long transmission lines from conventional coal-fired power stations, there are further cost savings in using local solar with storage, both distributed and large scale.
    The barriers to solar keep falling while the identified costs of coal continue to rise. Only things that haven’t fallen yet are the blinkers on the eyes of the Liberal Party.

    • john

      You are absolutely correct just work the real gain when distributed energy is fed back with a 10% transmission loss let alone the over 45% loss for the Zone 3 area in Qld. The facts are that pumping power into a grid with that level of trans. loss is received with open arms.

      • wideEyedPupil

        Yes but the arrangement of network, generation and retail ownership will conspire to mean that they exploit as much profit from any advances in preference to much cheaper grid supplied power for all…

  • Simon_Strauss

    I followed the link to “Australia’s Bureau of Resource and Energy Economics recognises that solar will be the cheapest technology by 2030 ” and am having difficulty reconciling the info on this chart http://reneweconomy.com.au/wp-content/uploads/2012/07/BREE-december.png with the costs cited in this article. What did I miss?

    • Read the story. As it says, this graph you posted was what the government had been relying on half a year earlier in the energy white paper. the Bree estimates are in the previous two graphs in that story. http://reneweconomy.com.au/2012/canberra-concedes-wind-solar-to-be-cheapest-energy-by-2030-82930

    • Ronald Brakels

      Simon, are you aware that solar power is currently providing Australian consumers with electricity that outcompetes coal power? I’d suggest this reality is slightly more pertinent than an out of date graph.

      • Simon_Strauss

        http://reneweconomy.com.au/wp-content/uploads/2012/07/Screen-Shot-2012-07-31-at-1.00.38-PM.png

        I’d like to think that you are correct but looking at the referenced charts I see room for error. Personally I am on-board with solar and have a 10Kw system installed….

        Perhaps there are factors like not having to duplicate the existing grid infrastructure but it seems likely that coal will be used for several more decades. With the coming Labor federal govt. we might see more “green” incentives also?

        But returning to your comment: I’d be grateful if you could show me where solar is out competing coal at the moment for 24 hour (base load) supply…

        • Ronald Brakels

          My relative’s new rooftop solar system cost them $1.32 a watt. If we remove the Renewable Energy Target subsidy that comes to $2 a watt. They have excellent insolation and their roof is well positioned. Their system appears to operate at over 80% of what its ideal capacity factor would be under perfect conditions, giving an actual capacity factor of about 18% in their location. I’ll estimate the system lifespan at 30 yeas and average yearly maintenance costs at 1% of the total unsubsidized capital cost. As my relatives cost of capital is presumably about 4.7% the cost to them per kilowatt-hour of electricity they produce is about 9.3 cents. They currently get a feed-in tariff but let’s say they don’t. With 50% self consumption that would mean their solar electricity costs them 18.6 cents a kilowatt-hour. Currently they pay about 30 cents a kilowatt-hour for mostly coal derived grid electricity. And even with a discount rate of 10% it is still cheaper than grid electricity, particularly if a smaller system is installed to increase self consumption.

          So, even without the Reneable Energy Target subsidy or a feed-in tariff, solar can still outcompete grid electricity in Australia, which is mostly generated from coal. In less ideal locations such as Melbourne this still applies provided self consumption is high enough.

          • Simon_Strauss

            Ronald thanks for your answer. However I don’t think that you have proven your assertion.

          • Ronald Brakels

            Do you live in a universe where 18.6 is bigger than 30?

      • Jason

        You’re joking right. Solar power is great when the sun shines. Ever look at a detailed solar production curve during a sunny day with a few clouds? You need a back up. The question is will the combination give us enough energy to run business as usual? I think not based on my own expertise and

        http://www.amazon.com/gp/product/144199436X/ref=oh_aui_detailpage_o06_s00?ie=UTF8&psc=1

        • Ronald Brakels

          Jason, are you saying that if I can get electricity from my roof for about half the cost of purchasing electricty from the grid it doesn’t outcompete grid electricity? If so, could you explain in detail why you think that is the case. Be sure to include your definition of competitive. Here’s one google gave me that matches my own: “2. as good as or better than others of a comparable nature.”

          • Jason

            Yes. Because you still need the grid!
            There is an odd lack of logic through multiple threads. It’s like people’s desires cloud their capacity to connect the dots. Your statement would only be true if the new power source DID NOT require the original source of power to fill in the gaps…. remember we’re talking about REPLACING fossil fuels….which is the most efficient storage medium ever developed by Nature and replacing it with in comparison hugely inefficient systems!

          • Ronald Brakels

            So according to you, Jason, if electricity from rooftop solar was completely free, and supplied all my daytime electricity use, you would not say it is competitive with grid power because I still use the grid for electricity at night? That’s an interesting viewpoint, but not one that is consistent with how the majority of people use the word competitive, or with common sense. Give me your definition of competitive. I’m interested in seeing it. But maybe you should try to convince coal and gas generators to see things your way on account of how they’ll be very relieved to learn that rooftop solar isn’t competitive with the electricity they produce. And since it is not competitive consumers will presumably switch back to using only grid electricity.

          • Jason

            Things only make sense when you understand them in relation to other things. You are saying that energy on the roof is cost competitive while ignoring the broader context and relationship of solar to the grid. Solar wouldn’t function without the grid so the costs have to be taken into account . Now you want to leave the grid you need storage for night and presently this combination is no where near cost effective but will be moving closer sooner than later. But the real point I’m making is the larger question can solar, wind and renewable energy run our society as it currently is…. at the current scale and meet growing demand globally? For the energy market is a truly global market. It’s possible but we’d have to improve efficiency beyond our wildest dreams and secure a substitute for oil. .. for oil is not only energy it’s in EVERYTHING. So when I suggest it’s not as simple as this article makes out of just swapping, it won’t be. ..and this is why we need to think more on exactly what we want renewable energy to do for humans and what cultural and social assumptions are going to come into question as the net energy available to do work declines. This is so much bigger than just your rooftop.

  • Nick Thiwerspoon

    The forecasts seem very conservative. Total rooftop solar costs have been falling in Australia by 23% per annum in the last 6 or 7 years; the costs of the panels themselves (in US$) have fallen by about 18% per year over 30+ years. Assuming a mere 10% per annum fall from now on in the highest cost per kWh for 2015 (in the top chart, namely 8 cents) the cost will fall 2/3 in 10 years to 2.8 cents per kWh, by 90% in 20 years to 1 cent per kWh. Panels themselves will continue to get cheaper, and the cost of installation will plummet as we all (installers, councils, electricity utilities, electricians, finance providers) move down the learning curve, and economies of scale start to work.

    (The chart was published in RenewEconomy earlier this week; I’ve converted it to a log scale and assumed a 15% per annum decline in total costs over the next 2 years. Original source: Origin presentation to analysts)

  • Jason

    The fatal assumption in this article is believing renewable energy sources can run business as usual…

    Renewable energy can only exists within an advanced industrialized economy powered by oil.

    It can only come into existence over time within a stable business as usual economy that has positive growth uninterrupted.

    Here’s the scenario I see rolling out… conventional oil peaked in 2005 – unconventional oil filled the gap while prices were high but it created a unique situation where slowing economic growth and output coincided with increasing supply capacity due the high price of oil.

    Recently this has resulted in oil prices falling far more than anyone ever anticipated and unconventional sources as a result are being shelved at an alarming rate…essentially we are seeing a blood letting within the industry.

    Over the past six months, 53% of vehicle purchases in the U.S. were light trucks or sport-utility vehicles, which tend to consume more gas than cars, according to Commerce Department data. That was the highest share in a decade and up from 51% last June, when oil prices peaked for the year. The Transportation Department estimates Americans drove more than three trillion miles in the 12 months through November, the most since mid-2008 and the biggest annual increase—38 billion miles—in a decade. Falling oil prices aren’t only a sign of too much supply and not enough demand. The more prices fall, the more people can afford oil, an effect that can goose demand and ultimately help push prices back up.

    Here is the kicker- when demand does surge upwards again – the supply from unconventional oil is not going to be there – there is going to be a lag in supply and this will send the price through the roof and seriously risk popping the debt bubbles all over the world.

    On top of this all the energy used to mine, transport, manufacture and install solar has to come from fossil fuels- but if oil the most important of fossil fuels goes on a yo yo ride – it is going to provide a highly uncertain and volatile background in which to make long term investments worth billions of dollars let alone create untold economic havoc across the globe….

    So this article’s analysis isn’t worth anything, their scenarios simply aren’t realistic…unless there is serious talk about a major shift in how we run the economy for under the current assumptions this yo yo in oil is going to result in the eventual collapse of industrialized society on a time horizon far too swift for the deployment of large scale renewables

    I know this sounds crazy- but in two years or so oil will be well over a $100 a barrel again and it will result in the chaotic destruction of demand and the cycle will repeat , how many times is anyone’s guess but each time it will result in more economic carnage than the last and the time between cycles will decrease…. there are some really smart people at MIT that talked about this back in 1972 their 40 year update checking what actually happened vs the scenarios was close enough to be called spot on…

    • neroden

      Utter silliness. You can power your solar panel factories with solar power. You can power your mines with solar power (already being done for a major copper mine in Australia). You can obviously power railroads with solar power (via electricity), and the same for trucking. Ships too, though it’s a little harder.

      Yes, the oil economy will die. But the renewables economy *is already here*. Solar panel factories may spend a year or two putting up their own rooftop solar panels. Same with battery factories. And mines. But this is *already happening*. There may need to be a short period of rationing where solar panels are preferentially deployed to mines and factories. Fine! We can do that! China will do that by government order if it has to!

      • Jason

        you assume all we have to do is swap energy sources to continue to live in nirvana… this assumption is highly dubious at best… you over estimate the technologies capacity and you are ignoring the current scale of energy consumption and its relationship to economic growth. Also you are not seeing the conditions that need to be in place for this technology to be developed and spread- it requires a stable heavily advanced industrialized economy – making renewables an extension of the status quo – Unfortunately the EROEI for renewables is too low to run status quo business as usual – the link below helps with the exploration of this topic- to be clear- i want renewables to be successful- but we can’t be wearing rose tinted glasses it is too critical an area to screw up

        http://www.amazon.com/gp/product/144199436X/ref=oh_aui_detailpage_o06_s00?ie=UTF8&psc=1

        • Mike Shurtleff

          Jason,

          The low EROEI argument for renewables, Solar PV and Wind, violates common sense. Companies in Solar PV and Wind are scaling up to very large sizes. We’re talking revenues in the $ billions. Solar PV is being installed profitably withOUT subsidies in some areas, e.g. Chile. Wind is even cheaper.

          If they had such a low EROEI as these idiots suggest, then they would be spending way too much on energy costs during production. They could not be profitable …but they are profitable …and getting more so.

          An example of this:
          http://www.pv-tech.org/news/sunedison_expects_new_fbr_polysilicon_process_to_provide_400wp_modules_at_u – October 2014
          “SunEdison expects new FBR polysilicon process to provide 400Wp modules at US$0.40/W”
          “SunEdison said that its high pressure fluidized bed reactor (HP-FBR) technology being ramped at its new joint venture facility in Korea will provide source polysilicon to enable 400 watt peak PV panel performance at a cost of US$0.40 per watt peak by 2016.”
          “The HP-FBR technology developed by SunEdison is claimed to produce high purity polysilicon 10 times more efficiently than standard Siemens processes, while requiring 90% less energy consumption.”

          Notice it says “90% LESS ENERGY CONSUMPTION” …90% LESS!!!

          The idea that Solar PV and Wind have low EROEI is not correct. They are plenty high enough and getting higher. What is true is the average EROEI for oil has gotten much lower. We will likely never see $20/barrel oil again. Solar PV and Wind are still dropping in price …and still improving in EROEI …and they already have a high enough EROEI.

          mike

          • Jason

            Congrats on reading marketing material and they are profitable BECAUSE they are heavily subsidized by fossil fuels this has no bearing AT ALL on whether we can close the loop and produce the infrastructure from renewable energy sources. ..go deeper

          • Mike Shurtleff

            “they are profitable BECAUSE they are heavily subsidized by fossil fuels”
            Ah no, not everywhere.

            1. Solar PV power generation plants are being built in Chile with absolutely no subsidies. It’s the cheapest source of power there.
            2. Residential Solar PV is less than half the cost of end-of-grid power in Hawaii and Australia. This is still true if you take away all subsidies.
            3. Coal and Copper mines in Australia (YES! Coal mines!), copper mines in Chile, are using Solar PV and storage to replace expensive diesel power for running the mine.
            4. A large Solar PV installation was just won a bid in Dubai for less than 6c/kWh PPA, with absolutely no subsidies.
            5. Sunedison has publicly stated they don’t care if the US ITC for solar is extended past the end of 2016 (next year!), because they don’t think pulling it will have an effect. (…and remember Coal, Oil, and Nuclear still have far larger total subsidies than solar and have for a century.)
            6. Utility scale Wind in the US is now below 4c/kWh.
            7. The KILLER POINT: The cost of Solar PV, Wind, and Battery Storage are all still dropping significantly. …and yes this means their EROI is getting better and better.

          • Jason
          • Mike Shurtleff

            The low EROEI argument against renewables is bogus:

            Some more recent EROEI numbers for Solar PV:

            1. “Behind the Numbers on Energy Return on Investment “
            http://www.scientificamerican….
            “Solar (PV): There are a wide variety of estimates of solar PV’s EROI as well—in part because the technologies and production techniques are improving fast, a major reason for the large price reductions over the past decade. I used the most recent peer-reviewed study I could find (Raugei et al., 2012, cited above). Solar PV’s EROI is almost certainly rising (Raugei et al., 2012; personal communication, Michael Dale of Stanford University). The latest data in Raugei’s study was at least a couple of years old, so the EROI today is most likely higher than 6, the number cited in my article.”

            2. “EROEI of electricity generation”
            http://www.resilience.org/stor
            PV shown with EROEI of 8.3

            3. Reference for 3:
            http://en.wikipedia.org/wiki/File:Net_energy_cliff.gif
            Solar has an EROEI of about 12 on here. This is 2009 data.

            4. http://8020vision.com/2011/07/
            Solar PhotoVoltaic has an EROEI range of 10 to 35.
            Solar ThinFilm has an EROEI range of 13 to 74.
            This is 2011 data.
            It makes far more sense to see ranges like this. The range of EROEI will depend on the energy efficiency of the production process, the PV conversion efficiency, and the solar resource where the PV is installed. These all vary significantly.
            This author is representing EROEI for newer, emerging PV production technologies.

          • Mike Shurtleff

            Graphic for Reference 3:
            http://en.wikipedia.org/wiki/File:Net_energy_cliff.gif

            Solar has an EROEI of about 12 on here. This is 2009 data.

          • Mike Shurtleff

            A more recent EROEI number for Wind:

            http://www.sciencedaily.com/re… – June 2014
            “Wind turbine payback: Environmental lifecycle assessment of 2-megawatt wind turbines”
            Date: June 16, 2014
            Source: Inderscience Publishers
            Summary: Researchers have carried out an environmental lifecycle assessment of 2-megawatt wind turbines mooted for a large wind farm in the U.S. Pacific Northwest. They conclude that in terms of cumulative energy payback, or the time to produce the amount of energy required of production and installation, a wind turbine with a working life of 20 years will offer a net benefit within five to eight months of being brought online.

            (20 x 12)/8 = 30 (20 x 12)/5 = 48

            EROEI of 30 to 48 for 2 MW Wind Turbines

          • Jason

            The link I provided to a book – Spain’s Photovoltaic revolution -The energy returned on Investment pg 115

            Our best estimate of the return on investment for Spanish photovoltaics in 2009 to 2011 can be derived by dividing the net electric energy equivalent output of 5,069 GWh by the direct sum all necessary energy inputs ( 2,065.3 GWh) . The result is an EROEI of 2.45 thermal units of energy out for one thermal unit of energy invested.

            This is from the installed solar projects and calculated and measured real actual energy production factoring in losses from:

            mismatch of modules
            losses due to dust
            angular and spectral losses
            nonfullfillment of name plate power
            losses due to temperature
            shadowing/shading
            maximum power point tracker
            direct current wiring
            AC/DC output of inverter
            AC wiring within the plant
            medium voltage losses ( within plant)
            voltage switch offs/sags / swells
            peak vs. nominal installed Power Factoring
            Losses in Evacuation line to the electric network
            degradation of panels over time

            The author has lead several photovoltaic installations totally 4,246 MW or covering about 3% of Spain’s total electric demand. he runs a blog http://www.crisisenergetica.org

            In the last 5 years I myself have been working for some of the biggest installers of solar in Australia.

            Since the book is a detailed analysis of the reality of INSTALLED solar projects in the real world…not the lab, or marketing material, or potential …

            Just what was ACTUALLY produced subtract what went in to build and run it ….

            There is no way we are running business as usual mate… not in a society built on infinite growth with a energy regime that has significantly lower EROEI … take care

        • onesecond

          Don’t get fooled by that EROI nonsense. The EROI of renewables is high enough and it can scale, there is no scarcity of materials, land, finance or labour and after a few month renewables generate net positive energy up for another 20 years. I see no physical or economical limits to go to a 100% renewable society. These papers make the EROI somehow a religious token but didn’t bring up a single argument that could change my mind.

          • Mike Shurtleff

            …and their EROI numbers for Solar PV and Wind are flat out false.

          • Jason

            What’s the point of arguing with a closed mind?

          • onesecond

            Wow, that is really steeping low Jason. I told you that I read the pieces about the “insufficient EROI”. I thought about its arguments and carefully weighed them against opposing arguments. I came to the conclusion that the “insufficient EROI” has no substance and only gets overhyped by people who do not know better. If you could point out where I am wrong in my thinking or deliver new arguments that hold up then that is fine for me.

            I already gave you a couple of reasons for my view, maybe you should start listening instead of referring to cheap rethorics.

          • Jason

            You don’t understand EROEI if you think it can scale. .. you stated bluntly you don’t see any limits. ..you’re wrong. In Lithium ion batteries it takes between 1.2 to 1.4 KG of graphite per kWh delivered . The US in 2011 consumed approx 407 trillion kWh in electricity. They last 12 to 14 years. Do the math! Then do the global math and cut it into half since other storage technology will play a role. Read my original argument. ..renewable energy can’t support advanced industrial economies. I didn’t say it couldn’t support ANY society just not one built on infinite growth. … to conclude your original post screamed closed mind and someone who has to go deeper. … technology is not where our challenge lies it is in our culture our stories the filters through which we interpret reality itself

          • onesecond

            Of course I understand EROI. I still see no new argument and doing the math leads to staggering amounts of accessible renewable energy while PV lasts for decades once installed. To be honest I can’t take the Aspo guy in your link too seriously. He is not even a physicist. Economic or “biophysical economic” modelling doesn’t change the physics: You get more energy than you invest and it can scale because no physical reason (meaning in reality) forbids that. I am not really sure if he says otherwise anyways, I think he admitted an EROI of 2 for a decade old PV technology.

            http://en.wikipedia.org/wiki/Charles_A_S_Hall

            I can’t help rolling my eyes when someone comes with the “renewable energy won’t work, there is not enough energy coming out of it”-nonsense. I am really sorry but we had that discussion in depth in the end of the nineties in Germany. The utilites claimed that RE would never be able to meet more than 4% of Germany’s electricity demand. I was young and stupid and kind of believed that there is a problem and studied physics to solve it. Of course it became obvious that they spilled utter nonsense.

            100% renewable energy for Germany has been modelled in depth by physicists from the Fraunhofer institutes and it is feasible and not that expensive.

            http://www.pv-magazine.de/fileadmin/uploads/PDFs/Webcode/pv-magazine_100-prozent-Strom_und_Waerme_Online.pdf

            Last but not least I have to add that current energy consumption is totally stupid, wastefull and unnecessary. Just some expamples: light bulb 95% waste, internal combustion engine 75% waste, fossil power plants 70% waste. You really only need a fraction of today’s energy consumption to achieve the same living standard (today: LED, EV, RE etc.). Germany as an heavily industrialized country only consumes half the energy per person compared to the US without doing anything special yet or drawbacks on comfortability.

          • Jason

            Finally your last part of this post makes sense and validates my arguement. For renewable energy to run a society that society would have to be enormously more efficient than the one we’re in. re read my posts I’ve clearly stated renewable energy will never run an advanced industrial society based on Oil. I have never said it wouldn’t run ANY society. The problem here is growth itself. The fly in the ointment for Germany is emissions have gone up over last few years since as the situation stands now the renewable energy still needs to be backed up! We need to temper our enthusiasm and remain focused models sometimes can’t predict those elements that are unpredictable or we don’t yet understand clearly enough. ..

          • onesecond

            See, that is where we differ. I wanted to make it clear that RE physically can make even the vast amount of energy accessible that is needed for our current stupid and unnecessary energy consumption. I can say that with conviction even more because a RE kWh is below 10 cent today and it is falling fast while storage kWh is following fast.
            I totally agree that this would be stupid and wasteful and add nothing to quality of life and I don’t think that this is going to happen because it would be uneconomically and environmentally (meaning resources and dead bats by windpower and so on) unfavourable.
            You are correct that the big EROI of fossil fuel has made that waste possible while hiding it and led to a very questionable society and way of life. Don’t construe a problem for RE out of that. They are not the problem, they are the solution.

          • Jason

            Now we are getting somewhere. This was my criticism of the article that the assumption was business as usual. Business as usual is killing the planet and it is at the cultural level that the real work needs done for RE can power a high quality of life in a stable culture not built on maximizing consumption in an infinite growth machine. So essentially I’m asking what do we really want this technology to do for us? I’m also critical of the climate change message that had reduced the metric of success in dealing with the issue to one item. Emissions.
            Climate change demands we look at the system since it really is feedback on the totality of humans impact on the ecosystems around the globe.
            I’m suspecting we are not all that far apart but just focusing on different aspects

          • onesecond

            Yes, the important part for me is to challenge people’s incorrect view of renewables not being up for the job.

          • Jason

            We’re just going in circles…. lastly not one person mentioned the most important variable in the equation. Population.
            Renewables will not run a growth based society. … period.

          • juxx0r

            Renewables growth >>> Population growth.

            do not see reason for period.

          • Mike Shurtleff

            “Germany is emissions have gone up over last few years”
            You are getting your information from very biased sources. This is true for a few cherry picked years, but the over-all trend in Germany is a reduction in CO2 output. Further, use of Wind and Solar is clearly helping them combat rising electricity prices, due to a dependence on NG from an unfriendly Russia and imported Coal. …and this is for a country with poor Solar resources. If they can do that imagine what a country like Australia can do with fantastic Wind and Solar resources.

            “We need to temper our enthusiasm and remain focused models sometimes can’t predict those elements that are unpredictable or we don’t yet understand clearly enough.”
            More FUD. The models are good enough. AGW is obvious.

          • Jason

            Agw is and is not being argued. The argument is around our collective vision for the future. It seems that everyone wants renewable energy to run business as usual. My thesis is it isn’t possible. Not one response has alluded to the reality that fossil fuels are mother nature’s storage device. Their energy density refinability and ease of transport and storage are not being replicated by ANY other proposed sources. Remember. ..we are talking about a time when we want these new sources of energy to RUN SOCIETY. It just seems obvious to me we have to radically reduce our net consumption of energy given the energy profit from these new sources doesn’t come close to matching what WE ARE USED TO AND FROM WHICH WE DEVELOPED our current model of thinking.
            Energy dictates social,political and business realities as well as form through which each takes and everyone is suggesting that this swap from centralized power to distributed power with less net energy to do work is nothing to worry about in a society built on GROWTH. I think you all are wearing red tinted glasses and was the thrust of my original post critiquing the assumptions within the article.
            Nothing argued so far in the various threads acknowledges this context except the last part of one second post but even this wasnt really knitting it all together.

          • Mike Shurtleff

            “In Lithium ion batteries it takes between 1.2 to 1.4 KG of graphite per kWh delivered.”
            Lithium battery in Leaf 140Wh/kg
            140Wh/kg = 1kWh/7.1kg, graphite would account for 16.8% to 19.6% by weight.
            Lithium battery in Tesla 365Wh/kg
            265Wh/kg = 1kWh/3.8kg, graphite would account for 31.8% to 37.1% by weight.
            Count me skeptical on your math. I’m guessing it’s based on old or cherry picked lithium battery information …same as the EROEI argument against Solar PV.

            There are 4 startup companies working toward 400Wh/kg solid state lithium batteries: Solid Power, Sakti3, Quantumscape, Seeo. The last one now has a production ready 220Wh/kg version. Next they plan 300Wh/kg. Final will be 400Wh/kg. We’ll wait and see about those, but still, progress on this looks very likely.

          • Mike Shurtleff

            Other very low-cost Battery Storage chemistries that can be used for 24/7 Solar PV and Wind power integration:

            (a) Aquion Energy – Available on the open market now.
            Cost is $250.00/kWh; deep cycle life is 5,000 (5,000 cycles at 1 cycle per day = 13.7 years)
            (25000c per kWh / 5,000) = 5c/kWh cost of storage

            (b) EOS Energy Storage – Available on the open market in 2016. Ramping 1 MWh Battery Pilot Production right now in New York. Test Installations planned by three utilities this year.
            Cost is $160.00/kWh; deep cycle life is 10,000 (10,000 cycles at 1 cycle per day = 27 years)
            (16000c per kWh / 10,000) = 1.6c/kWh cost of storage

            (c) AMBRI – Mass production to start in 2016. Prototype Production in Massachusetts has been up and running since November 2013. Prototypes have in under-going testing in installations. The chemistry has been improved.
            This one is amazing! Extremely low-cost over life of battery because of extremely high cycle-life. Competitive with pumped hydro power storage, without the geographical limitations.
            Cost has not been announced, but this battery has been design to use VERY cheap materials to begin with. I’m going to guess way high $400.00/kWh for purposes of calculation here.
            Deep cycle fade it 0.0002% per cycle. This would be only 1% degradation after 5,000 cycles, only 10% degradation after 50,000 cycles, only 20% degradation after 100,000 cycles.
            (50,000 cycles at 1 cycle per day = 137 years) (100,000 cycles at 1 cycle per day = 274 years)
            “Sadoway’s team says such batteries could last 300 years”
            Liquid electrodes are going to be self-healing.
            (40000c per kWh / 50,000) = 0.8c/kWh cost of storage
            (..and I’m guessing high on cost)

          • Mike Shurtleff

            “I didn’t say it couldn’t support ANY society just not one built on infinite growth.”
            You are now mixing issues in an unclear fashion. No level of EROEI can support a society based on “infinite growth” on a limited earth. That demonstrates lack of discipline in your reasoning.

            “your original post screamed closed mind and someone who has to go deeper.”

            I would say that is more on you. You don’t seem to know, what you don’t know. You are exemplifying the Dunning Kruger effect.

          • Jason

            http://www.optiro.com/latest-news/tech-talk/full/critical-minerals-part-2-the-impact-of-the-lithium-ion-battery-technology-on-the-demand-for-graphite-and-rare-earths

            http://en.m.wikipedia.org/wiki/Lithium-ion_battery

            Notice the more graphite than lithium in lithium ion batteries part….

            Mike. Our economy as it is right now is an infinite growth machine. That’s WHY the economy has to grow every year….

            So if you’re looking for the Dunning Kruger effect look in the mirror

          • juxx0r

            ” In Lithium ion batteries it takes between 1.2 to 1.4 KG of graphite per kWh delivered”

            wow, start one new graphite mine, and there’s about 50 lined up ready to start, and you’ve got a 1/2 TWh of battery graphite ready to roll. Nothing to see here, move along people.

          • Jason
        • BarleySinger

          This also ignores that fact that OIL is not mostly used for energy. CRUDE OIL is the underpinning raw ingredient in nearly every item made in the ‘advanced’ world.

          Mind you there is a lot of evidence that this is also causing a lot of cancer and other problems. However…

          Look around your house. What is it made from? What are the items in your house made from? See all that plastic? All the “fake wood”? The pain on your walls? The tile on your floors? The clothes you are wearing? Your TV & computer? The medications that keep people living (almost all our prescription medications are made form crude oil). How about the tyres on cars? Insulation on our wires? The masses of plastic it takes to have a computer?

          All that comes from oil right now.

          Oh it does not NEED to, but it does, and without a total replacement for all of the technology invented over the last 100+ years, in the REAL oil dependent world we live in, having the Saudis pumping out oil as fast as humanly possible is just stupid.

          If people are not very very careful, the “black chemistry” we now rely on for everything, will not be replaced before crude gets too expensive to use as a primary source,

          • Jason

            The Story of Stuff people do a great little skit highlighting this truth. You are spot on and this is why our collective story has to change from consumption to quality of life.

          • Reto Fassbind

            Jason, no one agrees with you. Arguing with you is like trying to play chess with a pigeon: it knocks the pieces over, craps on the board, and flies back to its flock to claim victory.

          • Jason

            no one agrees with you – so i am wrong- thank god Galileo didn’t think that way…

          • Reto Fassbind

            Jason, Galileo Galilei was a great man. He was a physicist, astronomer and engineer and has been called the “father of modern science”, who changed the world 400 years ago. Jason… you’re no Galileo Galilei.

          • Jason

            It’s funny a far to large % of people still disagree with his findings. Bear this in mind as discussions continue about our collective future for like then a new idea is emerging about our place in the Universe. BTW insults are so immature grow up

          • Reto Fassbind

            Only delusional people feel insulted when they’re told that they shouldn’t compare themselves to a genius like Galileo.

          • Mike Shurtleff

            “This also ignores that fact that OIL is not mostly used for energy.”
            About 60% of global oil is used for light truck and car transportation. Then you have oil used for heavy trucking (i.e. long distance ground shipping) and air travel+shipping. Oil used for industrial plastics, fertilizers, pesticides, solvents, etc is something like 20% or 30%, can’t remember off the top. Nobody said oil was going away, but oil use for light truck and car transport is. Within the next three years you’ll see EVs/EREVs that are price competitive with regular gas/diesel vehicles. EVs/EREVs are already much cheaper to operate. That will spark a very rapid increase in EV/EREV sales …with obvious consequences.

            Oil used in the production of plastics means carbon that is re-sequestered. Who cares?

            There are other sources of oil that are already in production and the economics are being improved: wood and agricultural waste, algae, fast growing plants including halophytes, etc. If you make plastics from any of those, then I would argue you’ve just sequestered CO2 from the atmosphere, i.e. net negative CO2.

            I don’t see a problem. I see a lot of opportunity.

          • Jason

            You’re classic techno utopian. …tech will solve all issues.

            I’m sorry tech won’t solve a problem when the roots are in its culture.

          • Mike Shurtleff

            Yes, I am, but I’m not naive. I’ve understood the fundamental problem of human over population since I was teenager. I’m 58 now. Have you read “Collapse”? It can go either way: stability and balance (eg Hawaii) or collapse and degradation (eg Easter Island), speaking in terms of anthropology and paleontology. I cannot fix the population problem. I can fix the energy problem. Yes, tech will solve that one.

            You, my friend, are a classic dead-endian. You have no solution. I submit there is no percentage in that view.

          • Jason

            Yes I have read Collapse – a few times

            What you are arguing is we are going to move with no problem from an energy regime based on fossil fuels with high EROEI and replace it with renewable energy with storage that will have a EROEI far less in an economic and political system where GROWTH is paramount.

            You argue the EROEI facts are bogus… that we will run business as usual and live into the future where a techno utopian society will emerge and all the problems of humanity will be solved by technology

            I am not going to hold my breath….

            BTW I do have a recommendations on what we need to do that would be categorized as a “solution” but since we can’t even agree on the problem there is no point in muddying the waters further

          • Mike Shurtleff

            Actually, the correct term for me is “techno optimist”. I’m not a utopian. That term is synonymous with unobtainable. As already stated, I cannot solve all human problems.
            “Live into the future”, happily ever after? No, …BUT I can solve our energy problems for a good long time. Ever done the calculations for available and exploitable solar energy? It is the largest energy source available to us by far. …and now we canuse it economically.
            I fundamentally disagree with your EROEI numbers. You have one book reference. I submit that it is cherry picked bunk. It’s a bad reference.
            Read the book “Agnotology”, chapters 3 and 4. Chapter 3 explains disinformation spread by the smoking industry wrt smoking causing cancer, including falsified, fake science, special journals and all. Chapter 4 explains disinformation spread by the fossil fuel industry wrt to AGW and by extension renewables. It documents a few of the notorious players from the smoking industry slide right on in to play a significant role spreading FUD and false science for the fossil fuel industry. Some of these are people with schooling in economics posing as actual scientists, first in the health field, then in the climatology field.

            I gave you a common sense explanation at the beginning of why this low EROEI for RE argument is not true. I have more and better references on this than you, as well.

          • Mike Shurtleff

            Yes, I am. You seem to be a classic negativist, a dead-ender. I don’t see the percentage in that view.

            I can’t fix some of the larger human problems, like over-population, but I can fix the energy problem. Yes, tech can fix the energy problem.

            Let’s hope human over-population stabilizes peacefully, instead of devolving into war. Read the book “Collapse”. It can go either way. Unintelligent solutions to problems promote the occurrence of societal collapse. I’m not in favor of that. “Guess I’m just funny that way.”

          • BarleySinger

            OK, perhaps I was wrong on that, but petrochemicals as fuel are going away FAST. HALF of Germany’s energy needs are not met by solar. Solar is rapidly becoming the least expensive form of energy; is it even chosen by OIL PRODUCING NATIONS for their new power production systems, instead of OIL or GAS (at 2/3 the cost of GAS).

            Energy infrastructure can be replaced. Most peopel are completely unaware that most of the items they buy require crude oil to exist (which was my point – even if I lost it).

          • Mike Shurtleff

            Agree with first paragraph. Germany’s solar resource is not that great. It is amazing what they have done with it. Off-shore wind will help them more. (Solar resource in Southern US is very good. Australian solar resource is awesome. Imagine what will happen there.)

            Second paragraph. No, your point is good. Most people are unaware, as you say. I just don’t think availability of oil is a big threat. There is plenty of oil left and we don’t need it to run our vehicles. It is harder to get at and more expensive than it was 20 years ago …on average. We can make oil from, as I mentioned above.

    • Nick Thiwerspoon

      The percentage of global electricity supply produced produced by solar has been doubling every 2 years for 30 years. Currently it’s at roughly 1%. The percentage generated by wind has been doubling every 3 years. It’s currently at 2.5% . (Note this ignores the other renewable, hydro power, currently 16.3%.) In 2002, total wind plus solar provided just 0.3% of global electricity. My estimates are that by 2020, 13.8% of world elec gen will be provided by solar plus wind, by 2025 it will be close to 50%. Battery costs will continue to fall by 15-20% per annum, making renewables despatchable.

      Wind is already the cheapest source of power in the US; solar is close behind, and getting cheaper by the year. Even without a Paris agreement, simple economics will drive the replacement of coal and oil by renewables.

      I agree that volatility in the oil market is likely, though I have it on good authority ( via a colleague who spoke to a very senior person from the Saudi oil ministry) that Saudi Arabia is very well aware that there may be no market for their oil in 15 years time as EVs take off and therefore is keen to sell what it can now. As the cheapest producer with the largest reserves, if it steps up production (for entirely selfish reasons) swings will be mitigated. The key reason for the slide in the oil price is that for the first time in decades Saudi Arabia has declined to be the swing producer. I forget exactly where, but this outcome was forecast in these very pages a year or so ago. Even with small but rapidly growing inroads of renewables and EVs, producers with large cheap reserves of oil or coal would hasten the collapse in fossil fuel markets by producing as much as they could while they still could. In any case, the very volatility will make renewables more attractive.

      One factor which will make my forecasts need adjusting is the rise in EVs. Currently EVs are just 0.5% of car sales. But with Tesla’s gigafactory opening in (prolly) early 2017, EVs will not just have lower running costs than petrol- or diesel-fuelled vehicles, they will also have comparable outlay costs (“sticker prices”) At that point, EVs will really start biting into conventional car and lorry sales. I have no accurate data on this, but my guess is that that will cause a 3-5% a year additional “bulge” in electricity sales for several years (current forecasts are for electricity production to rise by 2.8-3% per annum without EVs). This will reduce the percentage of electricity produced by renewables, but will obviously also slash demand for and emissions from oil. Meaning that the oil price has begun (in my view) a secular decline even if it has a dead cat bounce over the next couple of years as fracking supply declines.

      (Data sources: various; my projections)

  • Jan Veselý

    What is important: Any power plant that produce steam to run the turbine have O&M costs about 25 USD/MWh. Plus fuel costs. Once wind and solar PV (no turbine) will get to say 30 USD/MWh then no coal/gas/nuclear/CSP plant can beat the cost.
    Onshore wind is now at 37 USD/MWh at best locations and falling. Solar PV is at 60 USD/MWh at best places and falling faster.

  • JohnOz

    Current total annual global primary energy demand is 0.5 zettajoules (ZJ).

    Annual global insolation is 3,850 ZJ and the resource is expected to be around for some 6 million years.

    Therefore, we are at the threshold of (practically) unlimited energy at DECLINING marginal cost of provision.

    The repercussions of constantly declining energy costs are truly ENORMOUS and way beyond the comprehension of most economists, not to mention politicians, who remain intent on protecting the now obsolescent fossil fuel industry.

    • Reto Fassbind

      just to be clear: the sun is going to be around for another 6 billion rather than 6 million years. So we don’t need to worry 😉

  • JohnOz

    Sorry the 6 million should be 6 BILLION years!

    • Reto Fassbind

      Oh, sorry, I didn’t see your *errata* notice before. So we’re on the same page.