Calibrating Solar's Growth Potential

• A new report from the International Energy Agency suggests the possibility of solar power becoming the world's largest electricity source by 2050.
• It is noteworthy that IEA thinks this could happen, but the growth rates required, let alone the policies necessary to support them, will be challenging to sustain.

In the wake of last month's UN Climate Summit in New York City, Monday's report from the International Energy Agency (IEA) on "How solar energy could be the largest source of electricity by mid-century" ought to be welcome news. At the same time, it conflicts with perceptions that some countries are already farther along than that. So IEA's indication of the feasibility of generating 26% of global electricity from solar energy by 2050 either looks quite ambitious or quite conservative, depending on your current perspective.

For me it always comes down to the numbers, without which it's impossible to grasp systems on the scale and complexity of global energy. IEA's high-solar roadmap--it's not a forecast--includes significant contributions from both solar photovoltaic power (PV) and solar thermal electricity (STE)--often referred to as concentrating solar power, or CSP--with the former making up 16% of global electricity at mid-century and the latter around 10%. As the detailed report from IEA indicates, achieving the headline result would require global installed PV capacity to grow 35-fold between 2013 and 2050, equivalent to an average of 124 Gigawatts (GW) per year of additions, peaking at "200 GW/yr between 2025 and 2040." That's a 6x increase in installations over last year.

To put that in a US electricity generation perspective, IEA projects that the US would have to hit one million GW-hours per year from PV--roughly what we currently get from natural gas power plants--by around 2035 to meet its share of the anticipated global solar buildup. US solar installations are on a record-setting pace of nearly 7 GW this year, but matching natural gas would require 120x growth in solar generation, or a sustained compound average growth rate over 25% for the next 20-plus years. That's not impossible, as recent PV growth has been even higher, but it won't be easy to continue indefinitely, especially without further improvements in the technology, and in energy storage.

The solar thermal portion of IEA's technology roadmap looks like a much tougher challenge. STE has been losing ground to PV lately, as the costs of the latter have fallen much faster than the former, for reasons that aren't hard to understand. Making PV modules cheaper and more efficient is analogous to improving computer chip manufacturing, while making STE cheaper and more efficient is more similar to manufacturing cheaper, more efficient cars or appliances.

One of the main reasons IEA appears to have concluded that STE could suddenly start competing with PV again is its inherent thermal energy storage capability, which enables STE to supply electricity after the sun has set. While I wouldn't discount that, it looked like a bigger benefit a few years ago, before electricity storage technology started to improve. Storage of all types is still expensive, which helps explain why fast-reacting natural gas power plants offer important synergies for integrating intermittent renewables like wind and solar power. However, it looks like a reasonable bet today that batteries and other non-mechanical energy storage technologies will improve faster than thermal storage in the decades ahead.

The upshot of all this is that getting to 16% of global electricity from PV by 2050 is a stretch, and the 10% contribution from STE looks like even more than a stretch. So how does that square with recent reports that Germany--hardly a sun-worshipper's paradise--got "half its energy from solar" for a few weeks this summer? A recent post on The Energy Collective does a better job of clarifying the significance of that than I could, providing links to German government data indicating that solar's average contribution in 2013 was just 4.5% of electricity--hence less than half that in terms of total energy consumption. The author extrapolates that at current rates of annual installations, it would take Germany nearly a century to get to 50% of its electricity from the sun.

Much can happen in 35 years that we wouldn't anticipate today. For now, solar PV looks like the energy technology to beat, in terms of low lifecycle greenhouse gas emissions and long-run cost trends. But whether it reaches the levels of market penetration the IEA's report suggests are possible, or tops out at less than 5% of global electricity supply, as their baseline scenario assumes, it must function within an energy mix that includes other technologies, such as fossil fuels, nuclear power and non-solar renewables. And that's true whether or not electric vehicles take off in a big way, which would significantly increase electricity demand and make the IEA's high-end solar targets even more difficult to reach.

Marrying Gas and Renewables

A Turkish developer recently announced that it would build a new power plant using technology from GE that matches wind and solar generation to the output of a highly responsive natural gas turbine, all integrated in one package with the hardware and software to mesh its output with the grid. GE is apparently calling this scheme IRCC, for "integrated renewables combined cycle", adding yet another acronym to our growing list of energy choices. This development looks interesting from a technical perspective, but also for what it suggests about GE's view of the future market for generating equipment and power delivery.

The International Energy Agency's "Golden Age of Natural Gas" scenario remains a question mark, rather than a certainty, but if gas is to serve as the key fuel for bridging between our high-emission present and the low-emission future, then we're likely to see more installations like the one in Turkey emphasizing the synergies between gas and renewables, rather than the tough competition gas is giving renewables in some markets. The IRCC--not to be confused with an IGCC or the IPCC--is interesting because it goes well beyond the idea of using gas-fired power plants to back up the naturally variable output of wind farms and utility-scale solar arrays.

The IRCC concept is built around a new combined cycle gas turbine, the Flex-Efficiency 50, with an impressive capability to ramp up and down, as needed, with minimal loss of either efficiency or emissions performance. And thanks to the energy technology portfolio the company has built up over the last decade, GE is able to offer one-stop shopping with GE wind turbines and a solar thermal generating module from eSolar, in which GE has recently invested. The gas turbine/solar thermal hybridization looks especially useful in maximizing plant efficiency and incorporating solar thermal power into the grid at the lowest possible cost, by avoiding the expense of an extra steam turbine and generator. If all this works as advertised, the grid operator shouldn't know or care whether the power being dispatched was generated using wind, sun, or gas.

Before you confuse this posting for a GE ad, I should note that at least in the configuration chosen for the Turkish site most of the power from this integrated plant would still be generated by the gas turbine, which has 10 times the peak output of the concentrated solar power module and more than 20 times the rated power of the small wind farm tied into it. By the time you account for the capability of the gas turbine to run 24/7 when necessary, compared to typical capacity factors of 25-40% for wind and up to 25% for solar, the proportion of the IRCC's annual megawatt-hours generated from gas could exceed 95%. Nor is GE the only firm bringing turbines like this to market. So it's an impressive step, though more of an incremental than revolutionary one. However, with its inherent flexibility, I wouldn't be surprised if this type of gas turbine could effectively integrate a much larger quantity of renewable generation on the grid outside the IRCC's fence, particularly after the operating experience of the first few installations has been absorbed.

GE's timing in introducing its IRCC concept could prove especially apt. Not only does the Flex-Efficiency turbine look useful for helping to meet California's aggressive new 33% renewable electricity target, but the 50-cycle version featured in GE's marketing materials--likely minus the solar thermal module--could be just what Germany needs, now that its government has begun to come to grips with the quantity of new fossil generation that's going to be required to make up for the post-Fukushima accelerated retirement of its nuclear power plants.

Putting Energy Security At Risk

In catching up on a week's worth of news after my vacation, several stories caught my eye. The US Congress is apparently renewing its effort to cut tax breaks for the domestic oil & gas industry, while the administration intends to reinstate the offshore drilling moratorium that had been set aside by a federal judge in Louisiana. At the same time, 50 members of Congress have written to Secretary of State Clinton asking her to block a new pipeline to carry crude produced from Canadian oilsands to US refineries. However, even when you factor in the energy contribution of new initiatives such as the $2 billion in loan guarantees for solar power projects announced last week, the net result of all of this would be to undermine two of the central pillars of US energy security for the last several decades: producing more energy here at home and importing energy preferentially from stable and friendly neighbors like Canada and Mexico. For all the lip service about energy independence prompted by the Gulf Coast oil spill, these actions would ultimately make us more reliant on OPEC and unfriendly regimes.

Start with the industry subsidies, which Representative Blumenauer (D-OR) indicates are worth $6 billion per year. Setting aside the important context that these represent reductions in industry tax rates that even after these benefits are still higher than those most other US industries pay, this works out to an average of just $0.18 per million BTUs worth of domestic petroleum and natural gas production, or about $1.05/bbl. Compare that to $18.90/bbl in subsidies for corn ethanol and the equivalent of $2.60 per million BTU for electricity from wind and other renewable sources. As I've noted many times, oil & gas subsidies amount to a lot of money--though ethanol subsidies will come close to exceeding them in aggregate this year--not because they're overly generous, but because the scale of oil & gas still dwarfs all renewables combined.

I'm not a big fan of any of these subsidies, and I think it's high time that the ethanol subsidy, in particular, be brought more in line with its net energy contribution. At the same time, if we want a domestic energy industry that can make a meaningful contribution to covering our needs, then some level of tax breaks and other benefits appears necessary. And while the oil & gas industry is certainly mature and profitable, relative to biofuels and renewable electricity, it is also a global industry that competes with producers around the world, many of which are owned by the same OPEC members that have set the current oil price through effective constraints on their own production. And when drilling eventually resumes off the Gulf Coast, it is guaranteed to be much more costly. Adding higher taxes to these higher costs and tighter regulations must inevitably result in fewer wells being drilled and more oil imported--and from where?

Not from Canada, if the signers of the oilsands letter get their way. Oilsands production raises legitimate environmental concerns, both locally and globally. Producing oil from these deposits results in higher greenhouse gas emissions, though environmentalists usually fail to mention that tripling the emissions from production, compared to conventional oil, raises the total lifecycle emissions of the oil by just 17% compared to the average barrel refined in the US, because the vast majority of those emissions occur when the resulting petroleum products are burned, not when the oil is produced or processed. Now, a 17% increase in emissions is not nothing, but it must be weighed against two other factors. First, if oil prices are high enough, this oil will likely be produced anyway, even if we don't take it. Canadian companies have already signed deals to send oilsands crude to China, and they would do more of this if we turned up our noses at the stuff. Secondly, there's no guarantee that the oil we'd import from elsewhere would result in substantially lower emissions. That's particularly true for crude produced from heavy oil deposits in Venezuela and elsewhere, which average 14% higher lifecycle emissions.

Canada has been our largest foreign oil supplier for years, but with oilsands making up a steadily-growing share of Canadian output, restrictions on our oilsands intake would torpedo that relationship. With Mexican production going into steep decline, we would have to import more from Russia and the Middle East to make up the difference. That doesn't sound like a recipe for energy security to me.

Nor can greener sources close this gap any time soon. If you doubt that, take a look at Abengoa's Solana concentrated solar power project, which the Department of Energy just awarded a $1.45 billion loan guarantee. This technology uses the sun's energy to generate steam for electricity production, and its thermal storage allows it to do so more reliably, and over a longer portion of the day than photovoltaic cells. This is one of the most promising renewable energy technologies available, though at an effective cost of over $5,000 per kW of capacity it's hardly cheap. Yet when you convert its annual power output into equivalent barrels of oil (via the quantity of natural gas it would likely back out) it works out to less than 3,000 barrels per day. Replacing the energy contribution of Gulf Coast drilling or Canadian oilsands imports would require hundreds of such facilities, along with tens of millions of electric cars to enable their output to substitute for oil, very little of which is used to generate electricity in the US.

While renewable energy sources must inevitably meet a growing proportion of our energy needs in the years ahead, for the present US energy security still hinges on oil, which accounts for 92% of our net energy imports. If the Congress is serious about enhancing US energy security, then it should focus its efforts on reining in consumption, rather than erecting further barriers to oil produced here in the US or by our most reliable foreign supplier.