Rhein on Energy and Climate

The Sun supplies the Earth with enough light and heat to cover humanity’s energy demand several times. But to fully use it we have to overcome two crucial obstacles: make solar power cheap enough to compete with fossil energy and send it over long distances to the consumption centres.

Acting at the request of the G7, the International Energy Agency has just published two road maps 2050, which analyse the role solar electricity could play for the global electricity supply in the coming decades.

The IEA concludes that solar technologies – PV and solar concentrated power – should contribute about one quarter to the global electricity demand in 2050, compared to just one percent share today That is a huge increase! It will constitute no less than a revolution of traditional power generation.

Solar power will be ideal for countries in the earth’s Sunbelt. Australia, South Western USA, Mediterranean/ Middle East, Southern India and southern Africa will be the principal beneficiaries.

They should be able to cover essentially all their electricity needs from solar power provided governments put in place appropriate regulatory systems and offer the right incentives for compensating the cost difference between fossil and solar power. These will gradually disappear thanks to technological progress and economies of scale in the production of solar equipment on the one hand, and rising costs for fossil energy on the other.

To turn solar power into one of the mainstays of the electricity supply in the course of the coming decades we shall have to invest huge amounts in generation facilities and smart grid systems.

But as long as the cost differential between solar and fossil electricity generation persists, investors will be shy to take the risks.

Governments have therefore to provide advantageous feed-in tariffs like in Germany or solar bonuses like in Spain.

In the last few years fabulous progress has taken place in PV-based electricity generation. We have witnessed breath-taking changes in technology, production scale and market penetration

Thanks to rapid technological progress and mass production the prices for PV modules have tumbled by as much as 50 percent during the last 18 months. This development is expected to continue in the coming two decades allowing the phasing out of the various subsidy schemes. For the time being these are perfectly justified, as they constitute a minimal compensation for the external costs of fossil energy.

The industry is in a rapid transformation; a few large-scale industrial companies that combine intensive research and low productions costs will soon dominate the world market.

Europe has lost its leadership to more cost-effective and research-intensive Chinese and US companies. That is regrettable from a European industrial perspective. But Europe has never been able to develop a concerted industrial strategy. Germany, followed by Spain, has been a lone forerunner, with too much emphasis on decentralised generation at home.

In contrast to PV thermal solar power (CSP) has been lagging behind. Installed capacity has stagnated at minuscule 400 MW between 1985 and 2006, largely because of lack of public financial support. Contrary to PV this technology lends itself ideally to large-scale power generation in regions with intense solar irradiation. There its long-term development potential is at least as favourable as that of PV. It has two main advantages: it produces steam, also for industrial process and desalination, and it offers more effective possibilities for power storage through high-temperature molten salt.

For all its positive elements, the IEA estimates show that solar energy is unlikely to satisfy more than 25 percent of global electricity demand by the middle of the century. Adding another 12 percent from wind, 20 percent from hydro and 10 percent from biomass we might hope to cover two thirds of global electricity demand from renewable sources. That will not suffice to halve global C02 emissions by 2050, considered as the minimum for preventing a climate debacle.

Humanity will therefore have no choice but to continue using coal, gas and nuclear power for the next 40-50 years. To minimise the devastating climate impact of coal-fired power plants Carbon Capture/Storage will be indispensable for reducing emissions and helping countries like China to continue exploiting their single biggest energy resource. It should therefore become mandatory for every new coal-fired power plant commissioned after 2020, when the technology is expected to reach market maturity, though at extra generation costs.

Brussels 10.05.10 Eberhard Rhein

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