By Edmund Kelly
Two recent announcements may indicate that PV supply may be coming into balance with demand. Yingli, the number two PV panel maker is running out of cash after four years of massive losses, and Taiwan Polysilicon Corp, a Taiwan poly-silicon supplier has filed for bankruptcy. This should help bring supply into balance with demand and keep PV panels at current price levels, or higher for a while. If the industry can return to profitability it may result in investment in new plant and equipment that can deploy the backlog of technology improvements that enable progress on the long term PV cost reduction path.
By Edmund Kelly
Earth’s cloudy nature is unmistakable in this global cloud fraction map, based on data collected by the Moderate Resolution Imaging Spectroradiometer (MODIS) on the Aqua satellite. While MODIS collects enough data to make a new global map of cloudiness every day, this version of the map shows an average of all of the satellite’s cloud observations between July 2002 and April 2015. Colors range from dark blue (no clouds) to light blue (some clouds) to white (frequent clouds). This NASA site covers things in detail.
Part of the explanation for low ground level solar insolation levels is clouds blocking the sun. This picture from NASA, neatly illustrates the impact of clouds on solar insolation. Most of the world's population is in regions with heavy cloud cover. This includes Europe, China, Asia and North America. This picture also illustrates how truly exceptional California is.
Clouds introduce two problems for PV generation. They reduce average insolation which reduces utilization, but perhaps more importantly, they can significantly reduce insolation over long periods lasting weeks. The only current solution to this problem is backup fossil fuel generation capacity of a similar magnitude to PV generation capacity. The developed world already has adequate fossil fuel generation capacity, so the impact is to reduce the utilization of fossil fuel power plants, which at low levels of PV generation is a low cost. However in the developing world, they are adding new generation capacity and so, adding PV in significant amounts will need new matching fossil fuel backup generation.
StratoSolar, being above the clouds needs no fossil fuel backup generation, which with high PV market penetration will be a major advantage. However, this benefit is not yet in demand, so it seems StratoSolar suffers from premature timing. Markets don't anticipate. They respond.
by Edmund Kelly
This polysilicon market update presentation from March this year contained an updated graph of the classic PV module price reduction with cumulative volume learning curve. It has some interesting historical references and reinforces the fundamental stability of the long term price reduction trend. This trend is positive for the long term viability of PV, but there is nothing that predicts a rapid price decline from current levels. At these price levels, even with today's very low interest rates, PV still needs subsidies to survive, as is well illustrated by the recent PV declines in Germany, Spain, Italy and Australia, where subsidies were reduced or eliminated. The markets that grew to compensate for this decline, China, Japan and the US, introduced new or kept existing substantial subsidies.
This essential understanding is lost to climate change advocates who continue to believe that policy change alone will succeed using current wind and solar technologies on their current cost reduction curves. Unfortunately they don’t grasp the decades that will have to pass before this comes to pass.
StratoSolar is a possible answer that costs nothing more than an open mind. However it seems that open minds are an extremely rare commodity.
StratoSolar, received the "Most Innovative" award at this year's Harvard Business School (HBS) Northern California New Enterprise Competition. There were 15 new ventures competing.
We are currently making progress on fabricating a small scale prototype that will be the world's first buoyant tethered object deployed in the stratosphere.
We have recently been issued two patents and three more are pending.
We are bootstrapping slow but steady progress, building credibility on the path towards demonstrating feasibility and reducing skepticism. At some point the substantial profit potential will outweigh the steadily reducing skepticism.
Energy is about a $6T/year mostly commodity business and its all up for grabs as the pressure to eliminate fossil fuels steadily mounts. Ultimately the lowest cost renewable energy producer will win.
By Edmund Kelly
By Edmund Kelly
The rapid drop in PV panel prices in 2011 has led some optimists to predict continuing rapid price declines, particularly in the US. The triggering event in panel price decline was the drop in the cost of poly-silicon from over $100/kg to under $20/kg. This drop in price came as a result of investment in poly-silicon capacity which broke a cartel that had been keeping prices artificially high. This article by Matthias Grossmann describes the history in detail and focuses on the conditions necessary for renewed investment in poly-silicon production. He concludes that poly-silicon prices higher than the current $20/kg will be necessary to get investors on board. As supply is coming into balance with demand, that increased price is already happening, so investment in poly silicon production is likely to resume.
All this means is that rapid PV panel price declines from current levels are not likely and current price levels will prevail for some time. Current overall capital costs for large utility arrays varies from about $1.50/W to $2.00/W depending on a variety of project specific details, like local labor rates, land and regulatory costs. Interestingly, if low cost financing is available and you have the high capacity factor of a desert, this capital cost level can produce electricity competitive with fossil fuels without subsidy, as is illustrated by this project in Dubai. However 100% project financing at 4% for 27 years is not yet the norm. For StratoSolar financing we assume a working cost of capital of 8.5% over 20 years which results in about $0.06/kWh for electricity. At 4% financing we would be under $0.03/kWh. That is so low a cost for electricity that it would be immediately disruptive in all markets and would drive very rapid growth in installed capacity. This would drive down costs which would further drive down the cost of electricity.
If we can prove the viability of high altitude, buoyant, tethered, platforms, the foundations laid by PV growth and the continuing improvement in PV technology will enable spectacular rapid growth for StratoSolar systems worldwide.
By Edmund Kelly
This article in next big future highlights the rapid advances in large scale desalination deployment that Israel has led over the last decade. Israel, a country of 8 million people, has gone from a precarious water supply situation to a position today where 50% of its water supply is from desalination and by 2020 it will be 70%. Fortuitously for Israel this has occurred while the Middle East is in the middle of a multi year drought which would otherwise have had a serious economic impact, as has occurred elsewhere in the Middle East.
As this recent paper illustrates in detail, reverse osmosis (RO) desalination has been steadily improving and is being deployed on an increasingly large scale worldwide, not just in Israel. The Israeli company IDE is selling water from the latest plant at Sorek for 58 cents a cubic meter. That is about $690/acre-foot, or less than much of the water purchased in California, some of which costs as much as $1,200/acre-foot. As the paper illustrates there are strong prospects for further cost reduction.
Reverse osmosis currently consumes about 3kWh of electricity to produce a cubic meter of water. At $0.06/kWh that is $0.18/m3 or about one third of the cost. Providing the energy for desalination from a cheap and sustainable, high utilization source would alleviate a major environmental concern that limits a broader acceptability of desalination, particularly in California.
Currently wind and solar alternative energy sources are expensive and worse, have a low utilization. The low utilization means desalination plants would have an equally low utilization. The combination of high cost and low utilization makes desalination powered by current intermittent alternative energy multiple times the cost from fossil fuels.
The StratoSolar solution of high utilization PV combined with gravity energy storage provides a cheap, high utilization, clean sustainable source of energy for desalination. Its lower cost over time will help further reduce the cost of clean water. The continuous cost reduction learning curve of RO desalination combined with StratoSolar electricity would reduce water costs to around $0.20/m3 ($230/acre-foot) by the early 2020s. This would make desalination the cheapest and most environmentally friendly source of water, potentially reducing some of the environmental impacts of the current exploitation of natural clean water sources.
By Edmund Kelly
Recently we got some surprising feedback. The opinion voiced was that StratoSolar could not achieve a lower Levelized Cost of Electricity (LCOE) than ground based PV. We got no detail on what drove that opinion, but it was from an important source. In some ways this represents an advance on simple disbelief. If it were expanded upon, the opinion may have been more like; "even if the concept were practical, you cannot produce lower cost electricity". Given that the case for StratoSolar fundamentally rests on producing lower cost electricity its interesting to ask what part of the argument have we not presented clearly or lacks credibility.
LCOE is a relatively simple calculation based on a few inputs: Capital Cost ($/W), Utilization (%), Financing cost($) and Operations & Maintenance (O&M). Comparing a ground PV array to same sized StratoSolar array, we can assume for this argument that financing and O&M costs are the same for both. This leaves $/W and utilization%. The StratoSolar argument is that it has a higher utilization based on more solar insolation and a similar or lower capital cost $/W. To say that we fundamentally cannot have a lower LCOE is to challenge these assertions.
The higher insolation claim is based on very well validated data from many sources which we describe in detail on the website. Its an externality we have no control over but we are starting to appreciate that it may not be well understood. A perspective we have heard voiced regularly from technologists is that the Watts on the ground are 1000W/m2 and in space its 1366W/m2, so the benefit is only about a third, which is too little to be worth chasing. This perspective mistakes peak daytime irradiance for the total daily energy or insolation in kWh/m2. Energy is what matters to LCOE not peak irradiance. It seems that the fundamental 3X utilization benefit from more sunshine at 20km altitude may be the thing we need to emphasize more as it seems it may not be well understood or accepted as valid by almost everybody.
By Edmund Kelly
A complete renewable energy solution requires the attributes of dispatch-ability and reliability of fossil fuel power plants at a lower cost of generation. PV panels have come down rapidly in price in recent years creating a wave of optimism for PV. A realistic analysis projects further price drops over time, but not at the recent precipitous rate of decline. Current PV price levels still need subsidy in all markets to generate electricity competitive with that from fossil fuels. Also PV is an unreliable and intermittent source of electricity that requires backup fossil fuel generation (or excess capacity and distribution) to handle unpredictable long duration weather outages and daily energy storage for nighttime generation. Currently there is no viable large scale energy storage solution other than pumped hydro. To provide renewable energy for less than fossil fuels, the combined cost of PV generation, backup generation and energy storage generation have to be less than the cost of generation from fossil fuels.
StratoSolar is a system solution that directly attacks all the problems of PV generation and transforms PV into a real, disruptive and transformative lower cost renewable energy solution.
StratoSolar is a combination of tried and true PV technology with a new unproven high altitude buoyant tethered platform technology. The risk is concentrated on the new technology of the buoyant tethered platform. Viability depends on whether buoyant tethered platforms can be built, deployed and not damaged or destroyed by environmental hazards over the 30 plus year lifetime of the power plant. Other risks are whether the predicted capital costs are achievable and possible regulatory impediments from the FAA and local authorities.
The new buoyant tethered platforms are really novel structural engineering towers. Large scale structural engineering is a well established engineering discipline. Building the first of a new class of large scale structural engineering projects could be compared with other once novel large structural engineering projects, like steel framed skyscrapers, concrete dams, oil production platforms or steel suspension bridges. This class of project always initially stretch human credibility but actually rarely fail because the structural engineering discipline is very robust. The same reasoning applies to StratoSolar platforms.
By Edmund Kelly
There was a recent article in IEEE Spectrum that explained why Google halted an energy research effort called RE<C (Renewable Energy less than Coal). It prompted this critical analysis by Joe Romm. Its rare to see this perspective on clean energy discussed in any detail, so I was pleasantly surprised to see two articles on this topic. Between them they explained two positions that have much in common but differ in important ways.
The Google engineers discussed how they had started with the goal of renewable energy less than coal and after several years of effort came to the conclusion that current technologies were not going to achieve that goal. In large part this realization came from the understanding that the problem was far larger than they had initially understood. Google halted their efforts in 2011. Google invests heavily in alternative energy deployment and in its operations is very focused on reducing energy, so halting RE<C was in no way a vote against clean energy or dealing with climate change.
Joe tried to paint the Goggle engineers as confused and misguided. Joe is a strong advocate for the status quo opinion on how to deal with climate change. Basically that position is; what we have with current wind and solar is good enough and what is needed is policy change, preferably a carbon tax. This tax will somehow magically cause fossil fuels to decline and alternative energy to prosper. Joe does not see RE<C as a necessary or desirable condition for dealing with climate change. At its core this is a view that politics can dominate the large scale economics of energy.
When Joe discusses the problems with nuclear power he is happy to use the facts of nuclear costs to counter the optimistic promises of nuclear advocates. In contrast when Joe discusses energy policy he uses the optimistic promises of carbon taxes rather that the facts of decades of failure to get agreement on such policies and the overwhelming evidence that such policies are unlikely to ever be approved at a global level. On top of that there is no clear evidence that such taxes will have the desired consequences. Developing nations, where most new energy consumption is concentrated see higher cost energy as a threat to their development.
The central debate is simple. Some (including Bill Gates) see RE<C as a necessary condition for the world to deal with climate change. This opinion is guided by the facts on the ground and the central importance of economics in decision making. Joe and the status quo clean energy consensus he represents see economics as secondary to policy, and believe that advocacy will achieve policy change and policy change will lead to the demise of fossil fuels and the rise of clean energy.
StratoSolar is a solution to RE<C. As Joe makes clear, the clean energy status quo does not believe that such solutions can exist and that they are not necessary. Unfortunately this perspective is self fulfilling in ensuring no such solution sees the light of day.
PV market growth in 2014 is projected to be flat or down. When will we realize that we are on a road to nowhere?
By Edmund Kelly
This article provides more evidence that the optimistic hopes for rapid growth in world PV installations seem to finally be running up against the economic and practical constraints.
China in 2014 is a good example. China's PV goal for 2014 was 14 GW. It now appears actual installations will be about 10 GW (as was predicted earlier). In 2013 the bulk of PV installations in China were large utility scale. In 2014 they wanted to move the bulk to rooftop installations. This was motivated by growing electricity transmission bottlenecks. Rooftop installations don't need new transmission but take longer and are considerably more expensive than large installations. So China was caught between a rock and a hard place. Utility systems mean building lots of expensive long distance transmission that takes years and has political opposition. Rooftop PV is more expensive and less efficient and is also relatively slow to install. Neither option could meet the 14 GW goal. The projections for next year are also for 10 GW. That would be three years in a row at about 10 GW.
This just adds one more piece of evidence to the case that none of today's carbon free energy technologies are practical or economically viable alternatives to fossil fuels. This includes wind, solar, hydro, bio and nuclear. All require government support to survive and governments cannot afford to support any or all of them at the significantly higher level needed to displace fossil fuels. The advocates of each technology are happy to take government subsidies and keep tilting at windmills as long as government keeps providing the subsidies.
There are attempts at advanced versions of wind, solar and nuclear, but investment levels are miniscule. We are spending over $250B on installing clean technologies that cannot succeed, but investing a tiny fraction of that on R&D for technologies that might succeed. This is especially true for system solutions like Nuclear or large Solar. In part its because government is bad at and should not be involved in picking winners. Finding a structure to finance large scale energy R&D has proved elusive. It would take venture investments at a considerably larger scale than current venture capital funds can support. For a portfolio approach to work a fund would need maybe $100B to invest in maybe 100 ventures over maybe a decade. Given the scale of energy, one success would be enough.
President of StratoSolar