EV prices will keep on falling

 Battery costs continue to fall.  If anything, the rate of decline is accelerating.   

This has huge implications for EVs, obviously.  EVs will very soon have the same "sticker price" as petrol cars (they are already much cheaper to run).  EVs will rapidly rise to 100% of car sales.

But it also is crucial for de-carbonising electricity generation.   

Let's take a simple example.  Within the tropics (between 23 degrees north and south of the equator), we could run the grid entirely on solar.  For example, at Brisbane (latitude 27 S), in mid-winter (June), there are 10 hours and 25 minutes of daylight.  With tracking solar, which faces due east in the morning and due west in the afternoon, the output profile is "square", i.e., rises almost immediately to the maximum and stays there, compared with, say, rooftop solar, where the output rises in a sine wave to its maximum over a couple of hours over midday.  Demand at night is 2/3rds of demand during the day, so we would need something like 8 hours of storage.  If battery costs have halved, that means that 8 hours of storage will now cost what 4 hours used to.  

Outside the tropics, combining wind and solar and 8 hours of storage will be able to replace fossil fuels.  Only in high latitudes (north of 60 degrees), with long winter nights and high demand for heating, will we require seasonal storage (hydro or power-to-gas).  

Remember also, that EVs are storage on wheels, with the average EV having 70 kWh, or 3 plus days (72 hours plus) of average household demand (20 kWh per day).  This will be combined with several hours' worth of storage at every utility-scale solar farm, plus additional storage at substations to stabilise the grid.  

This video from the Electric Viking discusses the plunging costs of battery storage and its implications.

Renewables briefly make up 70% of Oz's grid

Variable-tilt solar panels. Photograph: Mick Tsikas/AAP

From The Guardian

Renewable energy generation hit a new record on Friday, briefly contributing more than two-thirds of the power in Australia’s main grid.

According to the Australian Energy Market Operator (Aemo), the milestone was set at 12.30pm, with a contribution of 68.7%, or 18,882MW, from renewable sources.

The figure is 4.6 percentage points higher than the previous record, which was set on 18 September.

Of total power in the grid on Friday, 34% came from distributed solar, which outstripped black coal’s contribution of 22%.

Renewable penetration rates are measured in 30-minute intervals, and illustrate contributions to the grid within a short period of time.

“It’s very different to 100% renewables 24/7,” said Alison Reeve, climate change and energy deputy program director at the Grattan Institute. “Nevertheless, it does show how much the grid is changing.”

“Five years ago the maximum that we’d managed to get to was 30%, and five years before that, I don’t know that anyone was even measuring [renewables], it was so small.”

One challenge of the energy transition was managing fluctuating contributions from renewable sources, Reeve said. “Once the solar has dropped out [at night], the percentage that you need to ramp up your non-renewables up to is a lot higher,” she said.

“One of the things that is gradually driving particularly coal-fired power plants out of the market at the moment is that they can’t ramp up and down that quickly … they’re not good at switching on and off over a couple of hour periods.”

Gas and hydro generators are more responsive at short timescales. Because of high gas prices currently, “when those gas generators come on they set quite a high price in the electricity market,” Reeve said.

Hydro generators have recently been limited in their operation because of the wet weather on the east coast of Australia, she added. “They can’t send too much water down the river because they don’t want to make any flooding worse,” she said.

Another challenge was replacing the “system’s stability” that coal and gas provide to the electricity grid – the ability to drop and raise generation slightly in order to “keep the voltage in the grid balanced”, Reeve said, which will require more long-duration storage infrastructure such as batteries.

“Until we figure out a way to get that balancing role done by other things like pumped hydro and batteries, and we have enough of those in the system, there will be a natural upper limit on how much renewables penetration we have, particularly once you move beyond the instantaneous … and start to talk about what we can sustain over four or eight hours.”

Reeve described these as “solvable problems”, but which required ironing out of details including costs, storage location and how the services would be valued.

A July report by the International Renewable Energy Agency (IRENA) found Australia was now among the world leaders in cheap solar energy.

Behind China and India, in 2021 Australia had the third-lowest utility-scale solar cost in the world, of $0.042 USD/kWh [or USD42/MWh] (AU$0.065). This represented a 21% year-on-year drop in price.

According to IRENA data, the average cost of electricity from utility-scale solar has dropped by 90% in Australia since 2010.

From a tweet by Simon Holmes à Court

Renewable energy continues its march in Australia's national electricity market.

For 12 months to end October 2022: • coal: 59% • RE: 34% • gas: 7% 

5 years ago (2017): • coal: 74% • RE: 16% • gas: 10% 

20 years ago (2002): • coal: 92% • RE: 4% • gas: 4%

BNEF's renewables costs

The chart below shows the average global costs over time for different renewable generation technologies.   Offshore wind is more expensive than onshore, for obvious reasons, but has the advantage that winds are more reliable on water than they are on land.  Interestingly, tracking solar, where the solar panel rotates during the course of the day to face the direction of the sun, which you'd expect to be more expensive than fixed solar, is not.  The extra yield from a "squarer" insolation profile more than compensates for the extra expense of motors to rotate the panels.  Tracking solar is also better than fixed-tilt solar because output jumps to its maximum just after sunrise and lasts until just before sunset, which means output is better attuned to the daily demand profile, especially the morning peak.

So the cheapest global electricity comes from single-axis tracking solar, then onshore wind, then fixed solar, then offshore wind.  The green line shows a simple average of all four types, and you can see how it has fallen steadily over the last 12 years, falling from $256/MWh in H2 2009 to $52/MWh in H1 2021, or by 80%.  The recent uptick in LCOEs is driven by a three-fold jump in polysilicate prices (for solar) and a doubling of steel prices (for wind).   These are both cyclical, and will partly unwind as economic growth slows after the post-pandemic rebound.  The jump in polysilicate prices is particularly interesting, hinting at a massive build out of solar in China and globally.

Just like Lazard (whose data I have been using for a few years now) and IRENA, BNEF shows the same strong downward trends in the cost of renewables.   Lazard estimate the average cost of new coal at $112/MWh in the US, and the marginal/operating cost of coal at $41/MWh, though that will have risen this year because of the jump in the coal price.  This compares with the average for  onshore wind, and tracking solar of $40/MWh.   Lazard's calculation for the marginal cost of gas in the US is $28/MWh, but gas in the US is less than  half the price of gas outside the US.  For example, gas in Europe  has reached US$12.51/MBtu compared with $4.40 in the US.  And the US natural gas price is up 70% over the last year.   

The moral of this tale is obvious, but I'll tell you anyway:  coal is finished.  Because output from gas power stations can be ramped up more rapidly than from coal, to match supply shortfalls from renewables, gas is still "safe" for now.  Until battery prices halve again.

Rooftop PV reaches grid parity in EU

From PV Magazine:

If all the rooftops across the European Union able to host solar arrays did so, 680 TWh could be generated, providing 24.4% of the political bloc’s current electricity consumption.

That is the chief finding of a paper entitled A high-resolution geospatial assessment of the rooftop solar photovoltaic potential in the European Union, published on the ScienceDirect website.

The authors of the study combined geospatial and statistical data to assess the technical potential of rooftops for solar energy deployment on every building in the EU. The model, which also used machine learning, was used to quantify the total available rooftop surface for PV systems.

The methodology helped the researchers identify EU markets where rooftop PV could generate electricity at a very competitive levelized cost of energy.

“Specific countries such as Germany, France, Italy, Spain stand out in the maps as they host the highest economic potential that translates to more options for advantageous investments,” stated the paper, adding, electricity retail prices of €0.30-0.169/kWh meant rooftop solar could offer electricity savings of 49% in Germany, 44% in Spain, 42% in Italy and 23% in France.

Eastern EU member states such as Bulgaria, Hungary, Romania and Estonia, however, were cited as markets with very low retail electricity prices, of €0.095-0.12/kWh.

The rooftop PV analysis identified nine markets where grid-parity is some way off as a result of cheap grid power and all of them are in Eastern Europe: Romania, Poland, Hungary, Czechia, Slovakia, Croatia, Lithuania, Latvia and Estonia.

By contrast, Portugal was highlighted as a market with very favorable conditions, including high solar radiation, good financing availability and high retail electricity prices of around €0.22/kWh.

[Read more here]

Remember that rooftop solar is more expensive than industrial- or utility-scale solar because of economies of scale, and because utility-scale solar can use variable-tilt/tracking solar panels which increase yield by 20% or so, plus produce a "squarer" output profile than fixed-tilt solar because they shift to face the sun during the course of the day.   On the other hand, the price point is also higher, being offset against the retail not the wholesale cost of electricity. 

I have already looked at how onshore wind could provide ten times Europe's electricity needs, and how offshore wind could power all of NE Europe.  Rooftop PV could provide 25%, and large-scale PV even more.  There'll be no shortage of electricity even in a 100% green Europe. 

As can be seen from the map above, it would prolly make sense to put Europe's solar farms in Spain, North Africa, the south of France, Italy, Greece, Turkey and SE Europe, where solar resources are greater.   The offsetting cost would be the construction of HVDC (high-voltage direct current) interconnectors between these regions and northern Europe.  Rooftop solar doesn't have that problem, because it's located right next to the demand for electricity.

Massive solar + storage farm in Australia

Robertstown, South Australia

From PV Magazine:

A massive solar-plus-storage project with a A$1.17 billion price tag (US$822 million) has been waved through by the South Australian government. The facility will feature 500 MW (AC) of solar PV generation capacity collocated with 250 MW/1,000 MWh of battery storage around five kilometers northeast of Robertstown [About 120 kms NE of Adelaide].

The power station will be built in stages and connected to the Robertstown substation via 275 kV transmission lines. A previous assessment has determined the facility could export energy to the grid without significant restraint but it will potentially incorporate synchronous condensers to support reliability and security of supply.

According to EPS Energy, the Robertstown project is on track to break ground in the middle of next year and generate around 275 jobs during construction and 15 or so full time jobs once operational. When commissioned, the facility will generate enough electricity to power 144,000 homes during its 30-year life.

EPS Energy director Steve McCall said the company hopes to secure finance for the project within months.“We’re working with equity and finance partners right now and that’s looking all very positive,” he said. “We’re also committed to utilizing the regional workforce and local contractors.”

For EPS, the Robertstown project is one of several large scale solar and battery storage schemes in its gigawatt-scale portfolio. The company’s South Australian pipeline includes the Bungama Solar project – a proposed 280 MW generation capacity and battery project near Port Pirie – and the Yoorndoo Ilga Solar project, a 200-400 MW solar capacity and battery facility near Whyalla.

The Robertstown plant is one of two large scale solar and battery plans in the area, along with the Solar River Project which received development approval a year ago. That facility comprises a 200 MW solar generation plant plus 120 MWh of battery storage and is likely to add another 200 MW of solar and a further 150 MWh of battery storage in a second stage if a proposed high-voltage transmission line to Victoria goes ahead.

'250 MW/1,000 MWh' referring to the battery means that the output of the battery bank is a maximum of 250 MW for 4 hours.  Or it could be, half that for 8 hours.  With a capacity factor of 30%, the 500 MW of panels will produce only 150 MW of output, so, if that level of output were maintained into the evening and the night, the battery would supply power for 6 hours and 30 minutes.   This battery is twice the size of the Tesla "big battery" in SA, which when it was installed just two years ago, was the largest battery in the world.

The company says that the solar farm will have tracking solar panels, which "follow the sun":

tracking solar panel systems follow the sun’s movement throughout the day for maximum collection. At the end of the day the panels track back to the east ready for the next operation.

This produces a "squarer" electricity output profile and higher capacity factors compared with a fixed-tilt solar panel (rooftop solar, for example).  In that part of the world (semi-desert inland South Australia), tracking solar will provide pretty much constant from sunup to sunset.  Utilities and the grid operators will love the combination of near-baseload power provide by tracking solar and massive storage.

Australia is galloping towards a 100% green electricity future, despite the denialist right-wing federal coalition government which is firmly wedded to coal, and would quite like some nuclear too, thank you.  Mind you, the state coalition government, after railing against Labor's policy on renewables before it was elected, flipped when it came to power and is now enthusiastic about renewables.

Strong growth in US solar plus storage

From IEEFA:

The United States is on pace to lead the global market for grid-connected battery storage in 2019, overtaking 2018 leader South Korea, driven by accelerating solar-plus-storage projects and peaking capacity requirements, according to a May 21 research note from IHS Markit.

U.S. energy storage deployments will nearly double to 712 MW this year, surpassing South Korea, which is expected to drop below 600 MW “or even significantly lower,” according to Camron Barati, a senior analyst at IHS Markit.

After installing an estimated 920 MW in 2018, the South Korean energy storage sector tumbled in the first half of 2019 following a series of fires at storage installations that prompted an ongoing government investigation. The country’s Ministry of Trade, Industry and Energy, which launched an investigation in January after more than 20 fires, plans to complete the probe in June, according to a recent article in The Korea Times. In January, the agency asked public institutions, large multipurpose facilities and private owners to shut down their energy storage systems, while suppliers were forced to discontinue shipments, battering the financial results of large battery-makers LG Chem Ltd. and Samsung SDI Co. Ltd.

Both companies expect market activity to revive in the second half of 2019. 

In the meantime, IHS analysts see the U.S. market racing ahead, propelled by “significant regulatory and policy developments as well as the diversification in major applications and geographic activity,” Barati wrote in the research note. Those developments include a Federal Energy Regulatory Commission order to open up wholesale electricity markets, the ability of developers to use the federal investment tax credit for storage projects charging on solar power, new state-level storage mandates and incentives, and growth in behind-the-meter installations.

Between 2019 and 2023, more than 2,000 MW of energy storage paired with 10,000 MW of utility-scale solar photovoltaic arrays will be deployed in the United States, IHS forecasts. The firm estimates that combining 25 MW of four-hour batteries with a 100 MW single-axis tracking photovoltaic plant could reach a levelized cost of energy below $40/MWh if the developer qualifies for the federal investment tax credit.

About 4,300 MW of grid-tied energy storage will be added globally in 2019, according to IHS, with annual installations growing to more than 10,600 MW by 2025. Stronger outlooks in the United States, China, Japan and Australia led the analysts to boost their prior forecast through 2025 by roughly 3,530 MW.

Average capacity factors for fixed solar are around 26%, and adding tracking increases that to 30%:

Another seldom-reported metric to be found in Utility-Scale Solar is capacity factors, broken down by region. Looking across 260 different utility-scale PV projects, the report found a range of 15.4-35.5% in AC terms, with the median capacity factor coming in just above 26%.

That simple number belies a range of differences, including those caused by geography and technology. LBNL finds that the addition of tracking systems boost capacity factors by 3-5% percentage points, which put the average capacity factor for projects in California using tracking coming in above 30%.

[Read more here]

Tracking solar produces a much superior electricity daily supply curve (see chart here), which minimises the storage needed  to extend power supply into the evening.  With a 30% capacity factor, a 100 MW tracking solar installation would produce 30MW of output, so 25 MW from the batteries would cover demand from sunset for another 3.3 hours, say, from 6 pm to 9 or 10.

Demand from 10 pm to 6 am is (generally) half or 1/3rd of daytime levels, so for day-and-night solar, an additional 2-4 hours of storage would be required.  Of course, you'd need more for rainy days, etc, but with a diversified grid, with solar and wind farms in different areas, emergency supplies can be provided by legacy gas generators and seasonal storage.

The $40/MWh quoted above includes subsidies.  My estimate of 2019 pricing for wind+solar+6 hours of storage unsubsidised is $43.2/MWh, which falls to $32.3/MWh in 2021.  Wind+solar+8 hours of storage will cost $33.9/MWh in 2021, unsubsidised.  I reiterate: in a grid with geographically and technology diverse generation plants, 8 hours storage will be enough to produce "firm" supply.

Moral of the story:  Renewables with storage are now competitive with coal, and even in the US, where gas is cheap, with gas too.  And they will go on getting even more competitive.  Growth in renewables plus storage is exploding.  What's happening in the US now will be what happens across the world over the next few years.

Source: Lazard, my estimates, does not include subsidies, USA only.

The solar bell curve

With fixed solar panels, for example rooftop panels, the amount of power produced describes a bell, or perhaps better, a sine wave, rising steeply, then more slowly, then achieving a brief peak before falling slowly then faster.  There's a very brief "lip" at dawn and sunset, hence the "bell curve".

Single-axis tracking solar panels follow the sun, so they produce a much "squarer" generation profile.  Compare the two in the chart below (from Australian company, Carnegie Clean Energy):

This has important implications for the usefulness of solar to the grid.  Output rises sharply to its peak and stays there (unless it gets cloudy).  This is very useful for the morning demand ramp.

“The additional generation gained due to the single axis tracking system selected for the project has been evident with the system’s output quickly ramping up in the morning,” Carnegie said in a statement.

It also means that it's easier to project how much storage will be needed to approximate the output from a baseload plant.  Assuming nighttime demand is 2/3rd of daytime demand (as in California, for example), we would need 66% of maximum output for the 12 hours of darkness (on average; it would be different by season).  That means 2/3*12, or 8 hours of storage.  That leaves no safety margin for cloudy days, but if many geographically separated solar farms are attached to the grid, and there are other generation sources in the grid (wind/offshore wind/hydro) then it would be enough.  We will ultimately need more storage as renewables increase their penetration in the grid, but by then, battery costs will also have fallen--they should halve over the next 6 years.

NSW starts going solar -- finally

The Bungala Solar Farm (source PV Mag)

In recent years, the government of the state of New South Wales has been on the right, run by the misleadingly-labelled Liberal Party.  The Liberal Party doesn't believe in climate change and still believes, despite the evidence, that coal is cheaper than renewables.  But NSW has the oldest coal-fired generators and the biggest percentage of such generators in Australia which will need to close down over the next decade or so.  Something needs to be done, and soon.

Well, first, after seeing the utter trouncing the denialist (more right-wing) Liberal Party got in the Victorian state election, and seeing apparently safe NSW Federal seats fall to "liberal-light" independents in by-elections, the NSW Liberal Party has suddenly seen the light and is busy embracing renewables.  More to the point, the economics of wind and solar just keep on improving.   Solar is less than half the cost of new coal, which means it will make no economic sense to replace aging coal power stations with new ones.  Large-scale solar is taking off in NSW, finally.

There are a few problems.  NSW doesn't have the wind resources of its neighbouring states of South Australia and Victoria, so to balance solar with wind it will need to import wind-generated electricity from them.  That means upgrades to the grid, which take time to build out.  A solar farm can be built in a few months, but HVDC lines takes a couple of years at least.  Plus, the best solar resources in NSW aren't close to the population centres on the eastern seaboard (where it gets much more rain) but in the drier interior, also far away from the centres of demand.  Again, new long-distance power lines are needed.  A partial fix is storage.  Power lines are designed to handle maxima, so if you could spread the midday maximum output from a solar farm over 24 hours, you could permit more solar to enter the mix.  If solar farms added enough storage, they could send electricity from the outback at night, when the long-distance grid is underutilised, and so could be larger.  We'll see whether the governments involved actually get their act together and start strengthening the grid and the interconnectors between NSW, Victoria and South Australia.  In the meantime, the short-term fix is more storage, though it's not yet cheap enough for large-scale deployment.

From PV Magazine:

In the final days of 2018, Australia’s New South Wales government gave its tick of approval for the construction of the state’s largest solar farm to date, rounding off a year that saw a flurry of utility-scale solar construction activity and an unprecedented number of big solar additions in the state.

The hotbed of utility-scale solar activity, New South Wales, waved through a massive 900 MW solar farm in the last days of 2018, looking to make another major step in its transition to a cleaner energy future.

The Yarrabee Solar Farm costing almost $1 billion will be located in southwest of Narrandera in the Riverina region of western NSW. The project is said to have the potential to power a city of almost one million people.

“When built, this new solar farm will have the capacity to power a city nearly twice the size of Newcastle,” NSW Minister for Energy Don Harwin said welcoming the construction approval.

The Yarrabee project was proposed by Australian developer Reach Solar Energy, which also stands behind the development of the 220 MW/275 MWdc Bungala Solar Project – Australia’s largest completed solar farm to date, which was later acquired by Italian power utility Enel and the Dutch Infrastructure Fund.

According to the project’s environmental impact statement, construction will be dependent on various factors, including power purchase agreements and availability of high voltage transmission network.   
It will cover up to 2600 hectares with approximately 3 million solar PV panels mounted on around 36,000 single-axis tracking systems.

The project will feature 222 inverter stations dispersed across the site. There are also plans for a battery storage system of 35 MW/70 MWh capacity.

The project approval followed the release of a new Large-Scale Solar Energy Guidelines developed by the NSW government to lead applicants and the community through the assessment process and site selection for state significant solar farm proposals.

“The new guideline reflects the NSW Government’s strong commitment to NSW’S booming solar energy market,” Harwin said.

It also followed a number of other big PV approvals granted in late December, including: a massive solar+storage project at Darlington Point – a 275 MW solar farm coupled with 100 MWh energy storage facility, the 140 MW Mulwala Solar Farm, the 170 MW Suntop Solar Farm and the 47 MW Gregadoo Solar Farm, rounding off another big solar year for NSW.

According to the government data, six solar farms were commissioned in 2018 alone, representing 305 MW and $475 million in investment, placing the total operating large-scale solar capacity in NSW at around 500 MW coming from nine projects.

Another seven solar farms were under construction representing 530 MW and around $720 million in investment, while there were almost 70 more solar farms with, or seeking, planning approval in NSW, with capacity to generate more than 10,000 MW.

[Read more here]

This single solar farm will provide about 15% of NSW's demand.  Another 3 or 4 will take NSW's renewables penetration to the levels already reached in South Australia, though there it's mostly wind-sourced.  It looks perfectly achievable within the next decade or less.