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Power shift

Two US researchers have declared that solar electricity in their home state is now cheaper than next-generation nuclear power. Olivia Boyd looks at their study – and its global implications.

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The sunshine of North Carolina, a state on America’s Atlantic seaboard, has long been a draw for tourists seeking a little southern warmth on the region’s beaches. But holiday companies are not the only ones trumpeting a good local deal. The price of the state’s solar-generated electricity has fallen so far that it is now cheaper than new nuclear power, according to a report published in July by researchers at the state’s Duke University. The authors say their figures indicate a “historic crossover” that significantly strengthens the case for investment in renewable energy – and weakens the arguments for large-scale, international nuclear development.

Solar power is usually branded as a clean but expensive energy source, incapable of competing on economic grounds with more established alternatives, such as nuclear. The outspoken pro-nuclear stance adopted by a raft of iconic environmental figures – James Lovelock, Stewart Brand, Patrick Moore – has helped to instill in policymaking circles the sense that this is the only power source that can restructure our energy supply at the pace, scale and price required by the pressures of rapid climate change. This study, which was co-authored by former chair of Duke University’s economics department John Blackburn and commissioned by NC Warn, a clean-energy NGO with a firm anti-nuclear bent, challenges that view. “This report should end the argument for risking billions of public dollars on new nuclear projects,” says Jim Warren, NC Warn director.

The paper states that commercial-scale solar developers in North Carolina are already offering utilities electricity at 14 cents or less per kilowatt hour. Meanwhile, two power companies – Duke Energy and Progress Energy – are pushing ahead with plans for local nuclear plants that, at current estimates, would generate electricity at the higher rate of 14 to 18 cents per kilowatt-hour.

The “crossover” is largely thanks to a marked decline in the costs of solar photovoltaic (PV) systems seen over the past decade. The study cites figures from the Lawrence Berkeley National Laboratory indicating that the cost of solar PV fell from US$12 (81 yuan) per installed watt in 1998 to US$8 (54 yuan) in 2008, on average – a one third drop in 10 years. In 2008 and 2009, costs fell even more rapidly, bringing the 12-year fall to 50%. Meanwhile, the expense of nuclear has ballooned. The estimated cost of construction in the United States at the start of the nuclear renaissance was around US$2 billion (13.6 billion yuan) per reactor. It now stands at around US$10 billion (67.8 billion yuan).

The Duke University research is, of course, limited in geographical focus – the 14 cents figure, which is net of public subsidies, is specific to the North Carolinian regulatory context, where (as in many places) tax benefits and incentive payments for solar electricity help lower costs to customers. But the authors argue that solar is expected to be cost-competitive without subsidies within the decade. And their overall message – that solar and other renewables represent increasingly good value compared to alternatives – is not unique. Jeremy Leggett, the founder of the UK’s largest solar company, Solarcentury, predicts “even cloudy Britain” will reach residential grid parity between solar and fossil-fuel power within five years, while Google is claiming breakthroughs in its bid to make renewables cheaper than coal.

And the pace of development on the ground is startling. At the end of 2009, total worldwide solar installations passed the 22,000-megawatt mark. During that year, more than 7,000 megawatts of solar-generating capacity had been built globally, half of which was in Germany.

“When you begin seeing solar production on this level, it starts making a significant difference. It’s no longer a niche thing,” says Antony Froggatt, senior research fellow in the energy, environment and development programme at UK think-tank Chatham House. “It’s very clear that the learning curve for solar is very fast. We are seeing very, very rapid production and economy of scale is clearly crucial.”

Blackburn and his co-author, Sam Cunningham, argue that the strengthening renewables sector, combined with the perceived financial risks of new nuclear, is influencing investor behaviour: “Very few other states [American states other than North Carolina] are still seriously considering new nuclear plants. Some have cancelled projects, citing continually rising costs with little sign of progress toward commencing construction. Many states with competitive electricity markets are developing their clean energy systems as rapidly as possible.”

Some experts are not convinced that renewable power is yet in a position to squeeze out new nuclear, however. Froggatt points out that, in the United States, it is gas, not renewables, that is posing the biggest threat to the nuclear industry. “Shale oil gas has totally changed the market in the US and brought down the price of gas significantly,” he says. “How that pans out over the next few years and whether it’s a permanent fixture or temporary is probably the key issue for nuclear because that’s the main competitor.”

Meanwhile, in China, which has a target of generating 15% of energy from non-fossil fuel sources by 2020, “everything is needed and wanted”, says Froggatt. In other words, plans to build 20 gigawatts of solar PV by 2020 and three times as many nuclear plants as the rest of the world combined can happily co-exist, although it raises questions about how China structures its grid – nuclear plants are not suited to providing back up for intermittent renewable sources as they cannot be readily switched on and off. “Will falling prices speed up the development and installation of solar in China? Development, absolutely, because lots of the world’s solar is made in China. But I’m not sure it’s going to change nuclear ordering in the next 10 years,” says Froggatt.

The Duke University study rejects the argument that solar cannot replace baseload power from nuclear or coal because of its intermittent nature as “obsolete”, stating that it becomes a “manageable issue” when solar-generated electricity feeds into a power grid with wind, hydroelectric, biomass and natural-gas generation. But, for Simon Harrison, energy director at global engineering consultant Mott MacDonald, it is still a crucial point. “You have to think about the role of both types of generation in the overall supply and demand balance,” he says “Solar is a technology that is essentially available when the sun is out, while nuclear is there 24 hours a day. Before we can even contemplate moving into a world where solar replaces nuclear, a lot of things have to happen – around storage, around smart grids and so on.”

However, Harrison recognises that, for investors, solar and other renewables hold some significant trump cards. “The trouble with nuclear is that investment is so lumpy. With renewables, it’s quite easy – the amounts are quite bitesize and if you invest and it doesn’t work out, the losses are containable. Potentially in the future, you could be contemplating five gigawatt-scale solar installations, which have comparable capital costs to a nuclear plant. But even then, you could still do them gradually, which makes financing a whole lot easier. And it isn’t so dependent on supply chains.”

This last point strikes a particular chord in western Europe, where the first nuclear plant to be ordered in the region since the 1980s – the Olkiluoto 3 reactor in Finland – is running four years behind schedule and at least 2.75 billion euros (US$3.6 billion) over budget. It is also the subject of several lawsuits between the utility, the reactor vendor and the Finnish government.

The debacle, which has been caused by a mixture of design flaws, construction mistakes, an unrealistic timetable and an inexperienced supply chain, has had a significant impact on public opinion – a poll conducted by national broadcaster YLE earlier this year found more than half of Finns were now against nuclear development, which, says sociologist Tapio Litmanen,  is up from around 30% to 35% before Olkiluoto 3. Many claim it has also slowed down investment in renewable power. An Ernst & Young index from February 2010 ranks Finland number 27 in “renewable energy attractiveness”, 12 places below neighbouring Sweden and 10 below Denmark.

The Olkiluoto fiasco underlines the significant financial and practical challenges that nuclear construction faces. Nonetheless, in July, the Finnish parliament gave the green light to two new reactors. John Blackburn and colleagues in North Carolina may have a lesson to teach energy policymakers. Whether any of them are ready to listen is another question.


Olivia Boyd is assistant editor at
chinadialogue.

Homepage image from www.smud.org

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Default avatar
匿名 | Anonymous

行业观察

该研究背后的分析非常糟糕。这篇发表的报告不是来自同行评审的周刊,而是来自反对核武器的活动家。“纽约时报”做了少许事实调查后发表了一篇社论对此事进行道歉。

Industry Observer

The analysis behind this study is bad. The published report is not from a peer-reviewed journal, but is from an anti-nuclear activist. The New York Times published an editorial apology about this, after doing too little fact-checking

Default avatar
匿名 | Anonymous

来自worldchanging.com的转贴

有趣的发现。这里有两个事实:新建核电站的情况很少见,所以他们的费用会不可避免的超预算,原因是不合适或不成熟的供应链。然而,利用太阳能情况刚好相反。有这么一大群供应商竞争项目,这样就会降低成本;另外规模经济也有助于降低生产商的成本。更有趣的是,从未见过这么一大笔资金投入到光电的研发中,这将进一步提高光电的效率,从而更多地降低成本和空间需要。

reposted from worldchanging.com

Interesting findings. There are two factors going on here. New Nuclear plants are so rare that they will inevitably go over budget due to an inadequate/ fledgling parts supply chain. However, the reverse is happening in solar. There are such a large number of suppliers that they compete, which drives costs down and there are economies of scale which help to drive costs down for producers. Even more intriguing is the realization that photovoltaics has never seen such a large investment in research and development. This may further drive efficiencies in photovoltaics, which could further decrease costs and space requirements.

Default avatar
匿名 | Anonymous

太阳能 VS 核能

为什么太阳能(间歇性电力的容量因子低于20%)要与核能(每秒的基本负荷在85%及以上)相比较,我简直无法想象。对此你没有什么理由好解释的!

solar vs nuclear?

why solar (intermittent power with capacity factors lower than 20%) is being compared to nuclear (baseload with cf's of 85% and up) is beyond me. there is no good argument you can make here!

Default avatar
匿名 | Anonymous

不能单单看价格

国际太阳能光伏价格的大大下降是站在中国大量耗能生产粗硅的基础上的。中国偏低的能源价格使太阳能光伏看起来很不错。其实计算能源回报比是一种更科学的方法。

comparing prices alone is not enough

The large-scale decline of international Solar PV price is based on the energy-intensive production of unpurified silicon. China's lower energy price make Solar PV look good, but as a matter of fact, energy risk ratio counting is a more scientific method.