Spain’s Massive Investment in Solar Power has Greatly increased the Cost of their Electric Power

Posted by PITHOCRATES - August 24th, 2013

Week in Review

People think renewable energy is the answer to all our energy problems.  But that isn’t quite so.  In fact, all it does is increase the cost of our electric power.  For sunshine and wind may be free.  But the equipment to harness the energy in sunshine and wind is not free.  It is very, very expensive.  And you need a lot of it.  You will not see one wind turbine service the power needs of one metropolitan area.  You may see a wind farm providing a small percentage of the electric power needs of a large metropolitan area.  And only when the wind blows.

Wind can blow day or night.  But it can also NOT blow day and night.  While solar panels will not work at all at night.  So you have massive investments to install renewable energy generation capacity.  And there will be times when they will provide no power.  So what do you do?  What do you do when the wind doesn’t blow and the sun doesn’t shine?  You turn to old reliable.  The electric grid.

This is why renewable energy is so costly.  It cannot replace our fossil-fuel power plants that can provide reliable power day or night in any type of weather.  It can only supplement what we call our baseload power.  Like our beloved coal-fired power plants.  One of the most cost-efficient ways to produce reliable electric power.  Which the power companies have to still run and maintain day and night.  For those who don’t have a wind turbine or a solar array providing their electric power.  And to light up the night.  So instead of one cost-efficient power generation system we have two systems.  One cost-efficient and one cost-inefficient.  And those who invested heavily into renewable energy are now having to deal with these very real problems (see Out Of Ideas And In Debt, Spain Sets Sights On Taxing The Sun by Kelly Phillips Erb posted 8/19/2013 on Forbes).

With so much sunshine at its disposal, Spain has aggressively pursued the development of solar energy: over the past ten years, the government has made significant advances in pressing solar energy and is one of the top countries in the world with respect to installed photovoltaic (PV) solar energy capacity.

It might, however, be too much of a good thing. Spain is generating so much solar power, according to its government, that production capacity exceeds demand by more than 60%. That imbalance has created a problem for the government which now finds itself in debt to producers. And not by a little bit. The debt is said to have grown to nearly 26 billion euros ($34.73 billion U.S.).

So how do you get out of that kind of debt? You propose incredibly onerous taxes and fines, of course. And you do it on exactly the behavior that you encouraged in the first place: the use of solar energy panels. That’s right. Spain is now attempting to scale back the use of solar panels – the use of which they have encouraged and subsidized over the last decade – by imposing a tax on those who use the panels…

…many residents in Spain generate enough electricity from solar that they get paid to selling the excess energy back to producers. This, it turns out, is a problem. The government is putting a stop to that, too: as part of the reform efforts (read: desperate measures), there will be a prohibition on selling extra energy.

If the power companies are providing all the power at night they have to maintain their power plants.  And their power distribution system.  Which means they even have to trim the trees away from their overhead power lines from people who use solar power during the day.  Nothing changes for the power companies.  Except that they can’t sell as much power as they once did.  So their costs of producing power remain the same.  But their revenue has fallen.  Forcing them to operate at a loss.  Or find other ways to replace their lost revenue.  Which they have to.  Because they must have the same capacity available during the day that they have at night.  Even if they aren’t selling as much power during the day as they are at night.  And the last thing they want to do is buy excess power back from homeowners with solar panels on their house when they’re producing their own power that they can’t sell.

Baseload power plants like coal and nuclear take time to bring on line.  They have to produce the heat that boils water into steam.  Then superheat the steam to remove all water from it.  So the steam can spin the generator turbines without damaging the vanes on the turbine.  And once they start these plants up they run these systems at full capacity where they produce power most cost-efficiently.  During peak demand they may bring on some gas-fired turbines that can start and produce power quickly.  And add them to the grid.  When the peak subsides they can shut down these gas-fired turbines and let the baseload generation carry the remaining load.

The Spanish government invested heavily into solar power for whatever reason.  It’s ‘free’ power.  It’s ‘clean’ power.  Or it was just a good way to create a lot of jobs.  But what Spain has now is a surplus of peak power generation during the day that doesn’t eliminate the need to maintain baseload power generation during the day.  Creating a surplus of electric power during the day no one wants.  While requiring power companies to maintain their baseload power during the day so they can provide power at night.  Incurring great costs on the power companies.  Which must be passed on to the same people who paid for the renewable energies subsidies.  The electric power consumer.

This is a classic example of a Hayekian malinvestment.  Friedrich Hayek of the Austrian school of economics said this is what happens when governments interfere with free markets.  They make investments to produce what they think is best while the market demands something else.  The market demanded low-cost electric power.  Which baseload power plants (coal and nuclear) provided.  But the government intervened and subsidized the more costly solar power.  This bad investment—or malinvestment—has only increased the cost of electric power for the Spanish consumer.  And now the Spanish have a big problem on their hands.  What to do with this surplus of peak power no one wants to pay for?  And how to replace the lost revenue of the power companies so they can cover their costs?  Two problems they didn’t have until the government intervened into the free market.


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Even though Solar Panels and Natural Gas Home Generators allow us to Disconnect from the Grid we Shouldn’t

Posted by PITHOCRATES - April 21st, 2013

Week in Review

I remember losing power for a couple of hot and humid days.  The kind where you stick to everything because you’re just covered in sweat.  Making it almost impossible to sleep.  But I was able to borrow my father’s generator.  So I would not have to suffer through that insufferable heat and humidity.  While I was able to run my refrigerator, turn the lights on and even watch television I could not start my central air conditioner.  Even when I shut everything else off.  It was large enough to run the AC.  But it was just not big enough to start it.  I tried.  But as I did that inrush of current (about 40 amps) just stalled the generator.  Which could put out only 30 amps at 240 volts.  So even though I had a 30 amp generator to start an air conditioner that was on a 20 amp circuit breaker it wasn’t big enough.  Because of that momentary inrush of current.  So I suffered through that insufferable heat and humidity until the electric utility restored power.  And I never loved my electric utility more than when they did.

Now suppose I wanted to go to solar power.  How large of a solar array would I need that would start my air conditioner?  If one square inch of solar panel provided 70 milliwatts and you do a little math that comes to approximately a 950 square-foot solar array.  Or an array approximately 20 FT X 50 FT.  Which is a lot of solar panel.  Costly to install.  And if you want to use any electricity at night you’re going to need some kind of battery system.  But you won’t be able to run your air conditioner.  For one start would probably drain down that battery system.  So it’s not feasible to disconnect from the electric grid.  For you’re going to need something else when the sun doesn’t shine.  And because there can be windless nights a windmill won’t be the answer.  Because you’re going to need at least one source of electric power you can rely on to be there for you.  Like your electric utility.  Or, perhaps, your gas utility (see Relentless And Disruptive Innovation Will Shortly Affect US Electric Utilities by Peter Kelly-Detwiler posted 4/18/2013 on Forbes).

NRG’s CEO David Crane is one of the few utility CEO’s in the US who appears to fully appreciate – and publicly articulate – the potential for this coming dynamic.  At recent Wall Street Journal ECO:nomics conference, he indicated that solar power and natural gas are coming on strong, and that some customers may soon decide they do not need the electric utility. “If you have gas into your house and say you want to be as green as possible, maybe you’re anti-fracking or something and you have solar panels on your roof, you don’t need to be connected to the grid at all.”  He predicted that within a short timeframe, we may see technologies that allow for conversion of gas into electricity at the residential level.

If you want carefree and reliable electric power you connect to the electric grid.  Have a natural gas backup generator sized to power the entire house (large enough to even start your central air conditioner).  And a whole-house uninterruptible power supply (UPS).  To provide all your power needs momentarily while you switch from your electric utility to your gas utility.  Well, all but your central air conditioner (and other heavy electrical loads).  Which would have to wait for the natural gas generator to start running.  Because if you connected these to your UPS it might drain the battery down before that generator was up and running.  No problem.  For we can all go a minute or two without air conditioning.

So this combination would work.  With solar panels and a natural gas generator you could disconnect from the electric grid.  But is this something we should really do?  Not everyone will be able to afford solar panels and natural gas generators.  They will have to rely on the electric utility.  Some may only be able to afford the solar panels.  Staying connected to the grid for their nighttime power needs.  But if our electric utilities cut their generation and take it offline permanently it could cause some serious problems.  For what happens when a day of thunderstorms blocks the sun from our solar panels and everyone is still running their air conditioners?  The solar panels can no longer provide the peak power demand that they took from the electric utility (causing the utilities to reduce their generation capacity).  But if they reduced their generation capacity how are they going to be able to take back this peak power demand?  They won’t be able to.  And if they can’t that means rolling brownouts and blackouts.  Not a problem for those with the resources to install a backup generator.  But a big problem for everyone else.

We should study any plans to mothball any baseload electric generation.  For renewable sources of energy may be green but they are not reliable.  And electric power is not just about comfort in our homes.  It’s also about national security.  Imagine the Boston Marathon bombing happening during a time of rolling blackouts.  Imagine all of the things we take for granted not being there.  Like power in our homes to charge our smartphones.  And to power the televisions we saw the two bombers identified on.  We would have been both literally and figuratively in the dark.  Making it a lot easier for the bombers to have made their escape.  There’s a reason why we’re trying to harden our electric grid from cyber attacks.  Because we are simply too dependent on electric power for both the comforts and necessities of life.  Which is why we should be building more coal-fired power plants.  Not fewer.  Because coal is reliable and we have domestic sources of coal.  Ditto for natural gas and nuclear.  The mainstay of baseload power.  Because there is nothing more reliable.  Which comes in handy for national security.


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Solar Power grows at 76% Annual Growth but you wouldn’t know it by the Power it Adds to the Grid

Posted by PITHOCRATES - March 16th, 2013

Week in Review

The government subsidized solar power industry is growing like gangbusters.  Thanks to all those government subsidies.  For it appears if it weren’t for that there would be no solar power industry.  Except in space.  Where it is the best choice.  But here on earth?  It just doesn’t work that well (see U.S. Solar Market Grew 76% in 2012 by Ucilia Wang posted 3/14/2013 on Forbes).

Imagine 16 million solar panels blanketing large pieces of land and covering roofs of homes and businesses. That was the number installed in the United States in 2012, when 3.3 gigawatts of the solar equipment materialized to representing a 76% annual growth.

Cumulatively, the country had about 7.2 gigawatts of solar generation capacity from solar panels by the end of 2012, according to a report by GTM Research the Solar Energy Industries Association. That capacity doesn’t mean consumers could tap that much power from solar power projects. The amount of production depends on whether the sun is up and unobstructed by clouds.

So how much useable power do we get from that installed 7.2 gigawatts?  Well, to determine that we must look at the capacity factor.  Which is the ratio of actual power to potential power over a period of time.  According to the Carnegie Mellon Electricity Industry Center they calculated the capacity factor for a solar array in Arizona.  A pretty sunny place.  They found the capacity factor to be 19%.  So if we use that we can calculate the useable power from that installed 7.2 gigawatts.  Which comes to approximately 1.4 gigawatts (0.19 X 7.2 gigawatts).  Now, assuming a house with a 200-amp, 240-volt service uses about 30 amps on average over a period of time that 1.4 gigawatts could power maybe 190,000 homes.  Of course, this power can only go to the grid when the sun is shining.  And in Arizona that means the air conditioners are running at maximum capacity.  So if we assume these houses are consuming 100 amps on average when the sun is shining this 1.4 gigawatts may only power 57,000 homes.

The U.S. is one of the fast-growing solar energy markets in the world, thanks in part to the generous federal tax benefits, loans and grants to support solar technology development and deployment. On top of that, over half of the states require their utilities to sell an increasing amount of renewable electricity.

The declining prices for solar panels in recent years have helped to make them more attractive. The fall — 28% for wholesale silicon solar panel prices — came largely as a result of a global oversupply of solar panels and a fierce competition. While project developers and consumers benefit from the lower prices, dozens of manufacturers have filed for bankruptcy or needed financial rescues to stay alive.

According to the U.S. Census there were 132,312,404 housing units in 2011.  So that massive investment in government subsidized solar power can at best in the southern United States (where it is very sunny) power only 0.043% of the houses in the country.  While providing no power for our businesses or institutions.  Or our street lighting.  Which, of course, it can’t.  As the streetlights only come on when solar power doesn’t work.  When it’s dark.  Because the sun isn’t shining.

Which explains why solar power is so heavily subsidized by government.  Because it is so bad an alternative to coal-fired power plants that no private investors will provide the financing for these boondoggles.  Which is typical for any government investment.  For if there were any value in it private investors would be pouring money into it.  But they’re not.  Because solar power is a bad investment.  For it is such a poor producer of energy.  It has its applications.  Such as in space.  Where it is a cheaper alternative than running power lines to the International Space Station from a coal-fired power plant on earth.  But back on terra firma we are far better off running power lines from coal-fired power plants than from solar arrays.  Because coal is good.  Coal is right.  Coal works.  All of the time.  Even when the sun isn’t shining.


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Silicon, Semiconductor, LED, Photon, Photovoltaic Effect, Photocell, Solar Panel, Converter, Battery and Solar Power Plant

Posted by PITHOCRATES - July 4th, 2012

Technology 101

A Photocell basically works like a Light Emitting Diode (LED) in Reverse

Solar power is based on the same technology that that gave us the electronic world.  Silicon.  That special material in the periodic table that has four electrons in its valence (i.e., outer most) shell.  And four holes that can accept an electron.  Allowing it to form a perfect silicon crystal.  When these silicon atoms come together their four valence electrons form covalent bonds with the holes in neighboring silicon atoms.  These silicon atoms share their valence electrons so that each silicon atom now has a full valence shell of eight electrons (with four of their own electrons and four shared electrons).  Making that perfect crystal structure.  Which is pretty much useless in the world of semiconductors.  Because you need free electrons to conduct electricity.

When we add impurities (called ‘doping’) to silicon is where the magic starts.  If we add a little bit of an element with five electrons in its valence shell we introduce free electrons into the silicon crystal.  Giving it a negative charge.  If we instead add a little bit of an element with 3 electrons in its valence shell we introduce extra holes looking for an electron to fill it.  Giving it a positive charge.  When we bring the positive (P) and the negative (N) materials together they from a P-N junction.  The free electrons cross the junction to fill the nearby holes.  Creating a neutrally charged depletion zone between the P and the N material.  This is a diode.  If we apply a forward biased voltage (positive battery terminal to the P side and the negative battery terminal to the N side) across this junction current will flow.  Like charges repel each other.  The negative charge pushes the free electrons on the N side of the junction towards the junction.  And the positive charge pushes the holes on the P side of the junction towards the junction.  Where they meet.  With free electrons filling available holes causing current to flow.  A reverse bias does the reverse.  Pulls the holes and electrons away from the junction so they can’t combine and cause current to flow.

It takes energy to move an electron out of its ‘hole’.  And when an electron combines with a hole it emits energy.  Typically this energy is not in a visible wavelength so we see nothing.  However, with the proper use of materials we can shift this wave length into the visible spectrum.  So we can see light.  Or photons.  This is the principle behind the light emitting diode.  Or LED.  An electric current through a P-N junction causes electrons to leave their holes and then recombine with holes.  And when they recombine they give off a photon in the visible spectrum of light.  Which is what we see.  A photocell basically works the other way.  Instead of using voltage and current to create photons we use photons from the sun to create voltage and current.

A Solar Array that could Produce 12,000 Watts under Ideal Conditions may only Produce 2,400 Watts in Reality

When we use the sun to bump electrons free from their shells we call this the photovoltaic (PV) effect.  This produces a small direct current (DC) at a low voltage.  A PV cell (or solar cell) then is basically a battery when hit with sunlight.  Electric power is the product of voltage and current.  So a small DC current and a low voltage won’t power much.  So like batteries in a flashlight we have to connect solar cells together to increase the available power.  So we connect solar cells into modules and modules into arrays.  Or what we commonly call solar panels.  Small panels can power small loads.  Like emergency telephones along the highway that are rarely used.  To channel buoys that can charge a battery during the day to power a light at night.  And, of course, the electronics on our spacecraft.  Where PV cells are very useful as there are no utility lines that run into space.

These work well for small loads.  Especially DC loads.  But it gets a little complicated for AC loads.  The kind we have in our homes.  A typical 1,000 square foot home may have a 100 amp electric service at 240 volts.  Let’s assume that at any given time there could be as much as half of that service (50 amps) in use at any one time.  That’s 12,000 watts.  Assuming a solar panel array generates about 10 watts per square foot that means this house would need approximately 1,200 square feet of solar panels (such as a 60 foot by 20 foot array or a 40 foot by 30 foot array).  But it’s not quite that simple.

The sun doesn’t shine all of the time.  The capacity factor (the percentage of actual power produced divided by the total possible it could produce under the ideal conditions) is only about 15-20%.  Meaning that a 1,200 square foot solar array that could produce 12,000 watts under ideal conditions may only produce 2,400 watts (at a 20% capacity factor).  Dividing this by 120 volts gives you 20 amps.  Or approximately the size of a single circuit in your electrical panel.  Which won’t power a lot.  And it sure won’t turn on your air conditioner.  Which means you’re probably not going to be able to disconnect from the electric grid by adding solar panels to your house.  You may reduce the amount of electric power you buy from your utility but it will come at a pretty steep cost.

Solar Power Plants can be Costly to Build and Maintain even if the Fuel is Free 

Everything in your house that uses electricity either plugs into a standard 120V electrical outlet, a special purpose 240V outlet (such as an electric stove) or is hard-wired to a 240V circuit (such as your central air conditioner).  All of these circuits go back to your electrical panel.  Which is wired to a 240V AC electrical service.  A lot of electronic devices actually operate on DC power but even these still plug into an AC outlet.  Inside these devices there is a power supply that converts the AC power into DC power.  So you’ll need to convert all that DC power generated by solar panels into useable AC power with a converter.  Which is costly.  And reduces the efficiency of the solar panels.  Because when you convert energy you always end up with less than you started with.  The electronics in the converters will heat up and dissipate some of that generated electric power as heat.  If you want to use any of this power when the sun isn’t shining you’ll need a battery to store that energy.  Another costly device.  Another place to lose some of that generated electric power.  And something else to fail.

We typically build large scale solar power plants in the middle of nowhere so there is nothing to shade these solar panel arrays.  From sun up to sun down they are in the sunlight.  They even turn and track the sun as it rises overhead, travels across the sky and sets.  To maximize the amount of sunlight hitting these panels.  Of course the larger the installation the larger the maintenance.  And the panels have to be clean.  That means washing these arrays to keep them dirt and bird poop free.  Some of the biggest plants in service today have about 200 MW of installed solar arrays.  One of the largest is in India.  Charanka Solar Park.  When completed it will have 500 MW of PV arrays on approximately 7.7 square miles of land.  With a generous capacity factor of 30% that comes to 150 MW.  Or about 19 MW/square mile.  The coal-fired Robert W. Scherer Electric Generating Plant in Georgia, on the other hand, generates 3,520 MW on approximately 18.75 square miles.  At a capacity factor of about 90% for coal that comes to about 3,168 MW.  Or about 169 MW/square mile.  About 9 times more power generated per square mile of land used.

 So you can see the reason why we use so much coal to generate our electric power.  Because coal is a highly concentrated source of fuel.  The energy it releases creates a lot of reliable electricity.  Day or night.  Summer or winter.  A large coal-fired electric generating facility needs a lot of real estate but the plants themselves don’t.  Unlike a solar plant.  Where the only way to generate more power is to cover more land with PV solar panels.  To generate, convert and store as much electric power as possible.  All with electronic equipment full of semiconductors that don’t operate well in extreme temperatures (which is why our electronics have vents, heat sinks and cooling fans).  So the ideal conditions to produce electricity are not the ideal conditions for the semiconductors making it all work.  Causing performance and maintenance issues.  Which makes these plants very costly.  Even if the fuel is free.


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