Wind beating solar in race of renewables
Wind is winning the race for the best- value renewable energy source, writes Keith Orchison
REWIND to the oil crisis years of the 1970s, and the talk in energy research circles was about the potential of wind and solar power. Fastforward to 2008, with oil sitting at $ 100 per barrel, and the wind industry has more than 75,000 megawatts of installed capacity, with the prospect of doubling its participation in the next 25 years — while the solar sector is still the wistful wannabe of the global power business with just 3000 MW of installed capacity.
For all the talk of future prospects — with the current solar spin claiming it could be delivering 10 per cent of world electricity consumption by the middle of the century — the harsh reality for the sector is that it is still a tortoise battling its way through the research and demonstration phase while wind farmers have hared off to claim multi- billion rewards in an ever- growing number of countries.
In Australia, with a new federal government committed to introducing both emissions trading and a greatly enlarged mandatory renewable energy target, solar still cannot look forward to a major surge in its standing.
Research undertaken for the petroleum industry by consultants CRA International predicts that the wind sector will continue to be the big winner here in the race for a green power market share.
CRA modelling suggests the twin incentives will drive five times more benefits for the the wind sector in the national power market than for solar energy — predicting that wind farms will be delivering almost 44,000GWh a year in 2020 versus just over 8000GWh for solar power.
Solar is also in danger of being run over by hot rock geothermal energy in the race for Australian power sales — the geothermal industry believes that it can deliver about a tenth of national electricity needs, or some 36,000GWh a year, by 2030 from the Cooper Basin and other heat mining sites.
The reason that solar power has not made more substantial inroads into the energy market around the world is that it is more expensive than just about every other way of producing electricity.
In the US, for example, recent studies show that solar photovoltaic power costs consumers at least 25 cents per kilowatt hour versus under 19 cents for mainstream supplies from coal- fired and nuclear power stations. Rooftop solar panels cost about $ US2.50 per watt — a figure that needs to drop to about $ US1 per watt to be really commercially viable.
The buzzword for renewable energy advocates is ‘‘ grid parity’’ — becoming price competitive with conventional fossil fuels. The Australian geothermal power industry sees national emissions trading from 2010 at $ 20 to $ 40 per tonne of carbon dioxide as providing it with the means of challenging fossil fuel suppliers of baseload power. The wind sector will need both trading and the MRET subsidy to make it viable.
The solar sector needs all this and more — it also wants electricity retailers to be forced to pay a subsidy for excess energy that buildings with rooftop solar arrays can sell into the power grid.
At the same time it continues to need substantial research and development support from the taxpayer.
Under a scheme introduced by the Howard Government, the solar business is being supported by a $ 75 million ‘‘ Solar Cities’’ program while its single biggest Australian venture — a power plant to be developed at Mildura at a cost of $ 420 million — is receiving almost $ 80 million from the federal Government and $ 50 million from the Victorian Government.
The Rudd Government has also promised to spend $ 489 million on installing solar panels on the roofs of Australian schools.
Internationally, governments in Germany, Italy, Spain and South Korea allow solar power producers higher wholesale prices — subsidised by customers — while in the biggest government effort of all, China has been using solar cells to help drive its electrification of small towns and villages in the sunlight- rich western regions.
The Chinese ‘‘ Brightness Program’’ aims to deliver electricity to 23 million people currently without power by 2010. China’s photovoltaic manufacturing capacity was tripled in 2006 and doubled again last year.
However, with an installed capacity estimated at 80 megawatts — compared with the national total of 713,000MW, 14 times bigger than Australian generation capacity — China’s solar industry remains minuscule.
Despite its lowly global status, the solar industry sees a bright future in the medium and long term, driven by the willingness of governments around the world to embrace renewable energy, high and still rising conventional energy prices and continued progress in cutting solar manufacturing costs and improving power performance.
One of the world’s largest investor- owned power companies, the Virginia- based AES Corporation, which has 43,000 MW of generation capacity in 28 countries, announced last month that it was setting up a $ US1 billion joint venture for solar power development in Europe and Asia.
Paul Hanrahan, chief executive of AES, which sources a fifth of its power production already from wind, hydro- electricity and biomass, says the project with American private equity firm Riverstone Holdings will build solar plants ranging in size from two to 50 megawatts to feed energy into high voltage networks.
It is, he adds, part of a $ US10 billion investment by the company over 5- 10 years in renewable energy.
Investments like this demonstrate that solar power has come a long way since the world was gripped by energy fears in the 1970s — but the sector needs to look to the horizon to see how far its strongest green competitor, wind energy, has raced in the same time frame.