The Solar PV Index

Last week we investigated the performance of German wind farms which, after a massive surge in capacity over the past two decades, are now in a position to contribute substantially to the electricity mix (7.6 % in 2011 according to the national statistical office). However, as we have seen, this comes at a price. The contribution shows large and largely unpredictable variations which have a destabilising effect on the grid.

Another source of renewable energy which has gained a lot of support recently is solar PV. Like wind PV has soared dramatically  in the past years. Nevertheless, its overall contribution to the energy mix is very low (3.1 % of total power generation in 2011).  Moreover, like electricity produced by wind mills, PV is a factor of instability to the grid. The sun is not shining uniformly throughout the day. Passing clouds may severly impact the output of solar cells causing fluctuations in the supply chain.

Impressive growth rates in both capacity and production, are inclined to mislead the observer. A more thorough consideration of the situation of solar PV, however, will have to look at the output per MW installed. That is the quantity which allows us to assess the investment in that energy source.

Like in the case of wind farms, the expected productivity of solar PV depends heavily on the location. And thus, we should not be surprised to see huge differences between various installations. Here, however, we look at the global picture. This point of view is even more justified since Germany decided to abolish all nuclear plants by 2022 which, in turn, means a higher burden for all other sources of energy. As the country, simultaneously, is highly committed to reducing its carbon footprint renewables are bound to play a much larger role in the future.

Fig. 1 Solar PV in Germany. Average output per MW installed capacity and solar irradiation.

Fig. 1 shows the average PV output (P/C) in MWh/MW (blue curve) while the red curve refers to the average solar irradiation (SI) in kWh/sqm (r.h.s. scale). The performance per MW installed has been adjusted by using a specific model in order to account for extra capacity added over the course of a year. The two curves appear to follow a similar trend. Nevertheless, their correlation is quite weak. An increase in irradiation may even coincide with a downturn in specific production. Thus, on a global scale, more sunshine does not necessarily mean more solar energy produced. Over the period in question we get an average PV output of 868.8 MWh per MW installed with a spread ranging from less than 700 MWh/MW to 1157 MWh/MW.

Fig. 2 Solar PV in Germany. Deviation from mean output per MW installed (P/C) and solar irradiation (SI) in %.

Fig. 2 displays the deviations of both specific output P/C and solar irradiation SI in % over the period in question. This picture confirms the conclusions drawn from Fig. 1. The variations in PV performance are not necessarily reflected in the respective variations of solar irradiation. They may even go in opposite directions. Remarkably, the fluctuations in SI are much larger than the ones in P/C, at least on an annual scale.

As in the case of wind more capacity does not always mean more output. The availability of sunshine comes in as a crucial factor which may be decisive for the performance of a particular facility. And, like the wind, this quantity may vary a lot over the years as can be inferred from the green curve.

There is one more message hidden in Fig. 2. One may argue that due to the relatively small scale of solar PV in terms of the entire German power production, the variations in P/C do not fully reflect the varying nature of solar irradiation. In other words, one might expect them to become even larger as the number of PV installations increases. This in turn implies that the fluctuations in the power grid may be even disrupting than today.

In view of this it is of utmost importance to develop storage facilities for the solar energy produced. This should in fact be a priority.

Solar PV in Sweden – The SHEAB Project

Below is a report about the SHEAB project which is designated to harvesting solar PV in central Sweden.

The SHEAB Project

by Hans Nyhlén

In two small municipalities, Sala and Heby, located north of Västerås and West of Uppsala, is the home for Swedens first and only (?) multiple-owned economic association investing in Solar PV.

It all started in 2008, when the municipality-owned energy company Sala-Heby Energi AB (SHE) wanted, as the first energy supplier in Sweden, to offer its customers to trade with electricity from the sun. A number of options were presented to SHE´s customers in the autumn of 2008 and a specific offer was made. Solel i Sala och Heby Ekonomisk förening was then formed in the spring of 2009 as a result of this work. The first co-owned photovoltaic facility was built in Sala in September 2009 and since then, a new PV plant has been built every year. During this short period of time the specific investment cost of turnkey solar PV plants has fallen by more than 70 %!

Today the co-owned economic association has nearly 200 members, mostly private persons but also a handful of companies. The total installed PV capacity is 200 kWp, giving approximately 180 000 kWh annually. These figures are growing though, since more members are joining and some old members buy more shares. During the first five years, the association has decided to use all its incomes and membership fees to build up a palette of Solar PV plants. Thereafter, the electricity production from the PV plants will give members cheap electricity for a long time, combined with continued commissioning of new solar PV plants.

The formation of Solel i Sala and Heby ekonomisk förening shows that it is possible to take advantage of a local interest, from both private persons and companies, in solar electricity and turn it into construction of large photovoltaic systems. It also shows that it can be done in a relatively short time.

Is the German Solar Dream Coming to An End?

Germany used to be one of the cornerstones of the European solar industry. But times have changed and what has so far been considered as the avant-garde of renewable energies is facing a grim reality.

A number of German solar panel producers have run into serious economic troubles. The most recent case is the company Q-Cells which filed for bankruptcy earlier this week. For some time Q-Cells used to be the biggest German producer of solar modules.

Another company, Phoenix Solar, is struggling with massive financial problems. The same is true for Conergy which, in addition, suffered from serious management errors. Solon, Solar Millenium and Solarhybrid filed for bankruptcy during the past four months. Even the brightest star on the German sky, Solarworld, is no longer as shiny as it used to be due to a changing economic environment.

Pampered by abundant subsidies Germany´s solar industry saw a massive growth during the past 10 years. However, recently two crucial factors came into play which led to a substantial shift. On the one hand, there was a discussion in Germany as to how much money should be pumped into renewable energies. Economic analyses revealed that more than EUR 100 billion have been directed towards renewables so far. With ever growing installed capacities this amount is bound to grow over the coming years, thus putting a substantial burden on electricity consumers who, in the end, are paying the bill. As a consequence and in order to keep subsidies under control feed-in tariffs have been cut drastically recently.

On the other hand, German producers of solar modules are increasingly suffering from competitors, especially in China. This led to a slump in prices for PV modules (more than 70 % since 2009) which, in turn, increased the pressure on German companies. Being under pressure from two sides, PV producers are now facing a different reality than at the time when solar industry took off.

The figure below shows the development of electricity produced from PV.

PV power production and share in the electricity grid. Source: AG Energiebilanzen.

Although these the growth rates were impressive, starting from virtually zero in the year 2000, the contribution of PV to the power grid remained rather modest (3 % in 2011). Given the low share of PV in electricity production, the question arises what level of subsidies is considered to be justified. One may even wonder if feed-in tariffs are to be abolished at all.

What is going to happen? Once the market forces have done their work, PV will continue its upward trend, though at a more moderate pace. But most importantly, the vast majority of PV modules will come from China, thus leaving not much room for production in Europe. What is bad news for the solar industry is, in turn, good news for the consumers and for investors who will see lower investment expenses as the prices for modules have fallen dramatically.

PV as such is not to be blamed for the current problems. On the contrary, PV fills a useful niche in the power grid, but not more than that. However, what is to be blamed is a legal framework which created the illusion of a quasi risk-free economy where feed-in tariffs were guaranteed for 20 years and even paid for non-produced electricity in case of network problems caused by the renewables themselves. The price for this illusion was first to be paid by the consumers and now by the people losing their jobs in the companies going bankrupt.

Photovoltaics has certainly a future in Germany as in other parts of Europe. However, its growth needs to be based on a sound economic environment. This process is now under way. It goes without saying that PV will always be a minor player in the field. Nevertheless, it has a role to play and maybe, on a smaller scale and by using smart storage technologies, it may develop  into a key power source for local communities.

Renewables in Europe 2: Photovoltaics

In a recent posting we discussed the development of energy produced from biogas in the EU over the past two decades. The growth rates, as for most renewables, were impressive, showing the huge potential of that particular source of energy. Simultaneously, it became clear that not all countries progressed at the same speed. Yet the overall contribution of biogas to the energy mix is still quite small.

Similar statements can be made about photovoltaics. At the beginning of the 1990s it was virtually non-existing. But soon things started changing.

Fig. 1 Energy generation from photovoltaics

In 1990 only the following countries produced more than one TJ (Terajoule) of solar power (in decreasing order): Spain, Italy, Portugal, Germany, Finland (!) and the Netherlands. The output of all other states now forming the EU was virtually zero. But gradually more and more countries embarked into photovoltaics. By the end of our reporting period, i.e. in 2009, just a handful of the 27 Member States remained abstinent from solar energy, amongst them the Baltic countries, Ireland, Poland and Romania. Due to the low starting level in practically every country, the relative changes experienced in each of them turned out to be close to 100% or even higher than that in some cases. Fig. 1 highlights the annual change of energy produced from photovoltaics in some selected countries. A significant increase is almost always linked to a corresponding growth in PV capacity.

The overall picture turns even more impressive when we take a different point of view.

Fig. 2 Electricity generation from photovoltaics, 1990 = 100

Fig. 2 illustrates how production figures have risen. The starting level is 1990 = 100. As can be inferred from the picture, some countries like Germany, Belgium and France even exceed the scale given. In 2009, Germany almost reached a whopping 600,000, thus being the unquestionable European champion in relative output since 1990. Spain (not shown) comes second with almost 100,000. One of the most striking examples, however, is Belgium where PV virtually did not exist until the year 2005, after which solar electricity began skyrocketing. In that context it is worthile noticing that Belgium is not a particularily sunny country. Nevertheless, PV is underlining its growth potential even in places where clear skies are not so frequent.

Having seen all those astounding figures we should not forget, however, that solar electricity is still a minor contributor to the entire power supply. This is true even in countries like Germany where the solar industry has been pampered with high subsidies. In any case, it will be exciting to follow the further development of photovoltaics in Europe over the next decades. Its full potential is still not exploited. The question is where its limits are.

The Cost of Photovoltaics in Germany

2011 was a very successful year for the German photovoltaics industry. More than 7500 MW of new capacity joined the electricity grid all over the country. This was the highest amount of newly installed solar capactiy ever. Germany is going green, faster than ever before.

The increasing trend to use solar PV, however, comes at a price. Every kWh of solar electricity which is fed into the grid is currently subsidised with 3.59 cEUR. For every newly installed PV facility subsidies are guaranteed for 20 years. According to a paper by the RWI (Rheinisch-Westfälisches Institut für Wirtschaftsforschung), a German economy think tank, subsidies for photovoltaics will amount to about 18 billion EUR during the next few years. In total, the entire financial support given to the solar industry so far adds up to 100 billion EUR since the year 2000.  This corresponds to about 4 % of Germany´s GDP in 2010.

If the solar boom continues these figures are likely to rise. This means that electricity consumers will have to pay higher energy bills in order to support green technologies. Currently an average consumer (4500 kWh per year) would, thus, have to pay some 160 EUR on top of his/her electricity bill annually.


Solar to Hydrogen – Can We Turn the Desert into a Hydrogen Plant?

Generating solar energy in the desert is a tempting challenge. The abundance of solar irradiation and the dry air with an almost cloudless sky provide almost perfect conditions for driving PV plants. Not surprisingly, people have thought about this possibility, and some projects have already been proposed which, however, so far have not developed beyond the first planning stages. Furthermore, these projects are still not on financially safe ground. In any case, they will require a tremendous amount of financing and that is, it seems, their most vulnerable point.

One of those futuristic project ideas, called Desertec, provides some insight into its deliverables and may thus be used as a reference. According to planning, it should be able to transmit in 2020 some 60 TWh of electrical energy from the north African desert right away to energy-hungry Europe. This roughly corresponds to the annual production of 6 nuclear plants. Electricity output is expected to grow continuously over the years with a target of 700 TWh annually in 2050.

One may, of course, question whether transmitting electricity over several thousands of kilometers is the smartest way of doing things. The losses in the transmission network will be significant, as discussed in an earlier posting. It´s not only the length of the distribution grid eating up a substantial part of the energy produced by the desert sun. As it does not make sense to transmit electricity during daytime only, part of the generated power would have to be stored for transmission during the night. This, too, consumes some energy which in turn reduces the efficiency of the whole project.

Rather than sending solar power via large distance cables to Europe, one may ask if using it for liquefying hydrogen might be a better option. Given the state-of-the-art technology the expected Desertec output for 2020 could provide some 6 Megatons of liquefied hydrogen annually which may be shipped across the Mediterranean for further useage.

Applying model calculations taking into account the losses during transportation and handling we found that this amount of liquid hydrogen could provide sufficient energy to drive some 3 million cars with an average annual driving distance of 20,000 km. This corresponds to the stock of registered vehicles in a country like Hungary (2008 data).

Going over to the even more optimistic scenario for 2050, then the collective effort of all desert-based PV facilities sould  enable the production of at least 70 million tons of liquefied hydrogen. Transferring this figure into cars on the road, we find that this amount provides fuel for not less than 35 million autos. This is reoughly equivalent to the number of registered cars in Italy (2008 data).

In this way solar energy, via its hydrogen derivative, could become a serious competitor to gasoline and diesel. Its advantages are obvious with both, solar energy and hydrogen being available in virtually unlimited quantity.  Moreover, the environmental benefits with a substantial reduction in CO2 emissions are equally promising. Bear in mind that the transport sector is responsible for about 25% of all CO2 emissions in Europe.

Solar Energy from the Desert – How Much Do We Lose?

The idea of producing solar energy in the desert appears, at first glance, quite appealing. There is a lot of sunshine available, and annual fluctuations in productivity are negligible compared to locations further up north. The main problem is just to transport the electricity generated in the desert to the consumers who, generally, are not residing at the place of production.

Desertec is an ambitious project aiming at producing large amounts of (mainly solar) energy in the desert and transmitting it across the Mediterranean to the consumers in Europe. The anticipated transfer volume is expected to rise from 60 TWh per year in 2020 to about 700 TWh in 2050. The latter figure corresponds roughly to 20% of all electricity generated in the 27 EU Member States in 2007. So there is indeed a substantial amount of energy available in the desert sun which was clear from the outset.

The crucial problem we are facing here is the following: transporting energy requires energy, and the longer the transport route the more energy you need for transporting, i.e. the higher the losses. Even with the best available technology we would expect to get less electricity out of the socket than what has been put in at the beginning of the transmission line.

High-voltage direct current (HVDC) is currently the best available technology for transmitting electricity over very long distances. The losses amount to a minimum of 3% per 1000 km. Thus, for a transfer volume of 60 TWh we would expect to lose some 1.8 TWh over 1000 km. Desertec estimates the length of its transmission lines to be more than 3000 km in 2020. In case that we would encounter transmission losses of at least 5.4 TWh per year.  Taking into account the anticipated transfer volume and the expected length of the transmission network for 2050 we can calculate the power losses to be at least of the order of 75 TWh, i.e. more than the entire transfer forecast for 2020.

To put things into perspective, the anticipated transmission losses for the Desertec project correspond to the annual output of 7 nuclear power stations (taking the Isar 2 power plant as a reference which, as the top performing German nuclear plant, produces an average of 11 TWh per year).

Thus, apart from worries about the policitcal stability of the producing region and the related issue of security of supply which are clearly outside the scope of this posting, transmitting energy across the Mediterranean sea is facing technical limitations which, in their entirety, may add up to considerable factors. From a technical point of view, it is far from evident, that producing solar energy in the desert and pushing it over the sea to Europe is a smart way of doing things. It is certainly more promising to increase the number of solar power facilities in Europe and connect them to local grids rather than looking for a far-fetched solution.

Using Solar Energy in Sweden

In general, we tend to believe that Nordic countries are unsuitable when it comes to using solar panels. And indeed, at first glance this may seem like an odd idea: winters are long, dark and snowy making solar installations practically useless. Thus, whenever energy is needed most the solar pathway is blocked. However, the other side of the medal may becomes apparent during summer when the sun is shining much longer hours than in southern Europe.

The first question to be asked is, of course, how much sunshine is available in Sweden? The answer depends very much on where you are as can be seen from the picture below

Fig. 1 Average sunshine hours in Sweden (Source: SMHI)

From this we conclude that the South generally receives more sunshine than the North. Furthermore, we see that a big part of the country gets on average more than 1600 hours of sunshine per year. As a reference we may compare this to one of the sunnier parts of Germany, the south-western federal state of Baden-Württemberg which has an average of about 1600 hours.

However, it is not only the number of hours that counts, but more importantly, we have to look at the amount of irradiation coming from the sun onto a particular spot of the Earth´s surface. Here the data are as follows: a substantial part of Sweden (once again, predominantly in the southern areas up to about the latitude of Stockholm) gets more than 925 kWh/sqm of global irradiation. The respective values for Baden-Württemberg are some 1100 kWh/sqm. Thus the better part of Sweden receives only about 15% less irradiation than the south-west of Germany.

We may therefore safely conclude that the situation for using solar energy in Sweden is far from hopeless. On the contrary, it appears that there is some potential for using it, all the more since solar panels have been improved significantly over the past years.

Let us examine the issue by picking a particular location. The city of Linköping is located some 200 km south-west of Stockholm. There, solar irradiation is about 950 kWh/sqm per year. Using solar modules with an efficiency of 10% , facing south at an angle of 45 degrees would safely provide us with an annual output of 95 kWh/sqm. Thus, a panel surface of  at least 10 sqm should yield an output of roughly 1000 kWh, which is considered to be the threshold where solar panels become economically viable. Using a module of that size would correspond to estimated savings of about 1400 SEK (150 EUR) per year (at current electricity prizes). Taking this savings potential into account we conclude that the installation costs of the solar module of about 20000 SEK (2200 EUR) may well be amortized after a bit more than 14 years.

Needless to say, that this amortization period would be shortend in case of increasing electricity prices and/or shrinking costs for installing the PV modules. Both these assumptions are quite realistic since energy costs, on the one hand, are very likely to rise (especially over the next years due to e.g. carbon taxes) whereas module costs, on the other hand, are expected to go down. In this context it may be worthwhile noting that module prices in Germany have slumped some 25% since January 2011.