As the Nationals fretted on Sunday over how it could support a net zero target for 2050 without knowing exactly which technology would bury the last few tonnes of Co2 in three decades time (the answer is we don’t know, and we don’t need to know just yet), solar was pointing out what could be done in the short term.
Just before noon on Sunday (grid time), solar set a new share of Australia’s electricity production with 51.8 per cent. It was the first time it had delivered more than half of the main grid’s power needs at any one time, and did so for more than 2.5 hours.
Over the same weekend, the combined output of black and coal generators fell to its lowest level, and minimum demand also fell below 13GW for the first time (just a week after falling below 14GW for the first time), further crunching the operating space for so-called “baseload” generation.
The grid is evolving, and it is evolving quickly, whether the Nationals, or energy minister Angus Taylor like it or not. The big utilities have now discarded the idea of “baseload” as a relevant business model, the market operator is expecting 100 per cent renewables at certain times by 2025, and the country’s biggest transmission company says 91 per cent renewables (over a whole year) can be delivered by 2030.
It’s a reminder of what can be achieved over the short term, and the climate science tells us that the next 10 years, using the technologies we have now, is crucial to the success of capping average global warming at 1.5°C over the longer term.
Even conservative business groups are now on board, because they can see the cheaper costs, and the immense business opportunities from seizing the moment, and the cost of letting such opportunities slip through their hands.
One of the world’s most pre-eminent solar analysts is Jenny Chase, from Bloomberg NEF, who has written a book about the solar industry and updates this every year with a detailed Twitter thread. It provides some of the best insights into the industry you can find.
There is too much detail in the more than 50 different parts of Chase’s latest thread to report on, but here is a summary of what we think are the highlights.
The first is the observation that solar offers possibly the best option to achieve rapid emissions reductions and cost savings, and a reminder of why even the IEA considers solar to be the next king of the energy market and is now the “cheapest electricity in history“.
“There’s never been a better time to plan a lot of solar,” says Chase in her Tweets. “And many organisations are …. and the easiest first step to net zero is often to build massive amounts of solar.”
But here’s the problem. Right now, the world is not building enough solar, and is on a trajectory to build about 3.3TW of solar by 2030, rather below the 5.3TW that BNEF models suggest we need for the net zero by 2050 target.
The two biggest problems are getting connections, and keeping a lid on price rises in the supply chain.
“Solar is now the cheapest source of bulk electricity in most sunny countries, and that’s starting to sink in,” Chase observes. “Photovoltaics doesn’t need a breakthrough. Mostly, solar developers just need a grid connection and/or permission to sell electricity.”
That’s not as easy as it should be, as many Australian developers can and will tell you. But the emerging new threat is the price crunch on solar components, particularly silicon and freight costs.
“We are in an age of dramatic cost rises, unprecedented in my time,” Chase says.
“Metal silicon has cost <$2.5/kg since before 2003, but in September 2021 broke $10/kg. (The) cost of a container of freight Shanghai-Rotterdam was <$3,000 since before 2011, but has risen to $14,800 since October, 2020.”
Chase notes these costs are hitting other sectors just as badly as solar, and over the long term could be a positive for solar as the price spike in energy markets invites more to switch to renewables. But she says it is still a shock to a sector (and analysts) accustomed to lower prices for better tech every year.
“Standard mono module prices spiked to 27.3 cents per watt, the highest since early 2019, last week,” Chase observes, before adding a note of optimism: “(The) all time low was 19 cents in July 2020. This tweet might age like milk, but I think prices will come back down over 1-2 years and resume a slow decline driven by better tech.”
Chase expects some solar projects that bid seriously low prices – below $US25/MWh – probably won’t get built. She describes even cheaper prices registered in the Middle East as “opaque internal transfer prices and don’t count.”
“We’ll probably see a few years of PPA price adjustment as solar developers push power buyers for higher prices on new projects. After the energy crisis some of them will get higher prices, though Spain’s recent windfall tax on merchant renewable projects is a red flag.”
She says the solar supply chain needs to be more transparent, but she says the issue of recycling, and creating a “circular economy” is not super urgent for solar because the vast majority of solar panels are still in use and will be at least for another decade. But it can be done.
Chase refuses to get excited about perovskites “until a perovskite company can disclose a partnership with a named major module manufacture”, and is dismissive of floating solar (it’s solar on a boat) and “agri-voltaics” (it’s solar in a field).
“PV only has synergies with *some* agriculture. Competition for light and restricted mechanical access to crops are often problems. Existing Chinese agrivoltaics are largely PV subsidizing bad farming,” she says.
“People get far too excited about putting solar on things you technically can put solar on but maybe shouldn’t bother. Car roofs, roadways, etc. If you walk on it, drive on it or park it in a garage then put the solar somewhere else.”
And, she says, there is plenty of room for it to go. “There are enough golf courses in the US for about 370GW, ffs,” she writes. “There’s also loads and loads of roofs, so let’s see those who oppose ground-mounted solar support higher-cost roof-mounted solar.”