Utility-scale Solar Power — Now Cost-effective!

by John Brian Shannon

New, utility-scale photo-voltaic solar power is now competitive with new, utility-scale coal. (When neither is subsidized)

Timing is everything it is said. Which makes now a great time to be alive for green energy advocates.

Quite under the radar of the mainstream media, the costs to build utility-scale solar photovoltaic installations have fallen dramatically over the past 24 months with solar (PV) panel prices expected to bottom out in June or July of 2013.

Not only have PV solar panel prices plunged over the past two years — but due to U.S. EPA emission regulations which went into effect January 1, 2012, the costs to build (new and cleaner-burning) coal power plants, or to retrofit existing ones to burn natural gas, have risen dramatically.

These two developments have ushered in a profound shift to utility-scale power generation in the United States which are just now beginning to be recognized.

solar vs coal price 2011-2020

Quite separate from the cost of building new natural gas-fired power plants, or to retrofitting existing coal-fired power plants, are the actual day-to-day costs of producing power and transmitting it to numerous end-users.

To maximize efficiency, electrical utilities employ the Merit Order ranking system whereby the lowest-priced electrical generation is brought online first, then once that capacity is fully-enabled, even more power is added to the grid by using the second-lowest priced electrical generation – and so on. During times of peak usage several different kinds of electrical power may be brought online to meet demand.

You may be surprised to know that Germany, which also employs Merit Order ranking, has over one-million solar panels installed throughout the countryside with plans for another million to be installed within six years. Utility companies there are able to pass on significant savings to users between the hours of 10:00 am and 6:00 pm when solar panels are producing power most efficiently.

With only 4% of it’s electrical power coming from green energy sources, German utilities are able to pass along 10% to 40% savings on their customer’s electricity bills. Imagine the (daylight-hours only) cost savings there six years from now when fully 8% of Germany’s energy grid will be powered by sustainable energy.

The ‘golden age’ of U.S. low-subsidy sustainable energy infrastructure begins in earnest in 2013, only because it now makes economic sense to do so.

Here is a nice chart which shows (up to year 2009) the average yearly energy subsidy for different kinds of energy used in the United States.

Biofuels compare favorably to the other (primarily dedicated to) transportation fuels Oil and Gas. While Renewable electrical energy compares favorably to conventional Nuclear electrical energy.



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The Economics of Green Energy

by John Brian Shannon

Back in the old days of sustainable energy, circa 2000, the cost of switching to solar or wind was so expensive that only the well-intentioned considered it — and only the wealthy could afford it.

How times have changed!

Nowadays, utility-scale solar power and wind power are cost-competitive with utility-scale coal-fired and nuclear electrical power generation.

And obviously, solar and wind are much better for the environment.


That’s not to knock coal, which has provided reliable power for decades and still has a great future in Coal to Liquid fuels — that is, coal processed into extremely pure transportation fuels. Gasoline for your car, diesel for cars, trucks and ships and jet fuel are all created from coal using CTL technology.

South Africa’s SASOL have been using CTL technology successfully since 1955 and 30% of all the transportation fuels in that country are made from domestically-sourced coal. No alterations to vehicle engines or aircraft turbine engines are required to use fuels which are made from coal — as the CTL technology produces almost laboratory-quality fuels when using the Fisher-Tropsch catalytic process.

However, electrical power generation which burns raw coal releases billions of tons of CO2 and carbon monoxide, along with huge amounts of hydrogen sulfide, arsenic, lead, cyanide, sulfur dioxide, nitrous oxide and other toxins into the atmosphere every year — all of which easily cross state lines, national boundaries and even the oceans before settling in both populated areas and farmland.

One brand new coal-fired plant per week is completed and goes into service in China these days and this has been the case since late 2008.

In 2010 for example, China operated 620 coal-fired power plants which burned over 3 billion tons of coal per year. Just the CO2 emissions alone from coal-fired electrical generation in China surpassed 7.2 billion tons in 2010.

Which leads to higher health care costs in both the developing world and the developed world. According to CLPmag.org

“China faces a number of serious environmental issues caused by overpopulation and rapid industrial growth. Water pollution and a resulting shortage of drinking water is one such issue, as is air pollution caused by an over-reliance on coal as fuel. It has been estimated that 410,000 Chinese die as a result of pollution each year.”

In addition to being cost-competitive with coal, solar and wind are also cost-competitive with nuclear. In the case of solar and wind power there is no need for very costly nuclear spent-fuel storage — as some types of nuclear fuel rods must be stored in terrorist-proof bunkers and be constantly-cooled 24 hours per day/365 days per year for up to 20,000 years — without any interruption lasting longer than 36 hours. The cost of just one failure here would be catastrophic.


Nuclear power has been statistically safe – with only one serious incident about every ten years on average. However, we have seen deaths caused by exposure to radioactive emissions from nuclear power plant accidents and indirect adverse health effects on population centres near nuclear disaster sites. Some particles remain radioactive at toxic levels for many decades.

Which leads to higher health care costs in many nations as the wind can carry radioactive particulate thousands of miles — just as it can carry toxic gasses and soot from coal-fired power generation for thousands of miles.

For the most recent example of the cost to clean up nuclear accidents, the Fukushima disaster had been estimated at between $15 – 45 billion dollars, but more recently a $50 – 100 billion dollar price-tag has appeared and full decommissioning may take until 2030 to complete. The Japanese government is covering all the costs of decommissioning the Fukushima nuclear site — which means Japanese citizens will end up paying the full cost through taxation.

From the perspective of taxpayers everywhere who bear the brunt of health care costs and disaster mitigation, the full cost of a given kind of fuel must include the costs of all adverse health effects, deaths, damages and lost productivity caused by each kind of fuel.

Which is why solar, wind and biomass are still the better deal by far – even at the same per-gigawatt price.

John Brian Shannon writes about green energy, sustainable development and economics from British Columbia, Canada. His articles appear in the Arabian Gazette, EcoPoint Asia, EnergyBoom, the Huffington Post, the United Nations Development Programme – and other quality publications.

John believes it is important to assist all levels of government and the business community to find sustainable ways forward for industry and consumers.

Check out his green energy blog at: http://johnbrianshannon.com

Check out his economics blog at: https://jbsnews.wordpress.com

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