copyright © 2014 the brattle group, inc. this report was prepared for the texas clean energy...
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Copyright © 2014 The Brattle Group, Inc.
This report was prepared for the Texas Clean Energy Coalition with the support of the Cynthia and
George Mitchell Foundation. All results and any errors are the responsibility of the authors and do
not represent the opinion of the project’s sponsors, The Brattle Group, Inc. or its clients.
Some unconventional reasons for more solarThe Georgia Solar Energy Association
Jurgen Weiss, PhD.Principal, The Brattle Group
September 10 , 2015
PREPARED BY
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Disclaimer
The content of this presentation reflects the my own opinions and in no way a general opinion of the Brattle Group! Any errors are entirely my responsibility.
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5 seconds about meDr. Weiss is an energy economist with 20 years consulting experience. He leads the Brattle Group’s climate change practice and specializes in issues broadly motivated by climate change concerns, such as renewable energy, energy efficiency, energy storage, the interaction between electricity, gas and transportation, and carbon pricing.
Jurgen has worked on solar issues in North America, Germany, Japan and Saudi Arabia. He has testified in Federal and State Court and in front of regulatory agencies on issues related to renewable energy.
He holds an MBA from Columbia University and a PhD in Business Economics from Harvard University. He is a native of Germany and works in North America, Europe and the Middle East.
Jurgen Weiss, [email protected]
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Think of solar as an insurance against the “fat tail” of climate change risk
Source: Frank J Convery and Gernot Wagner, Reflections—Managing Uncertain Climates: Some Guidance for Policy Makers and Researchers
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Space is not the issue with PV
Source: http://modernsurvivalblog.com/alternative-energy/amazing-total-area-of-solar-panels-to-power-the-united-states/
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If we want to ramp it up quickly, we probably can
Solar PV is probably more like smartphones or TVs than power plants, so scaling up production capacity should be easier
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The risk premium is already quite small and will likely get smaller
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Across various deployment trends, PV becomes cost-competitive soon
Assumptions: $4/W PV all in; 20% learning curve; no other solar costs: 20% capacity factor for 20 years.40 GW increase in capacity each year for constant rate40 GW increase the first year, increasing by 6 GW each year
Gas CC costs from EIA forecasts, assumed no non-fuel changes from 2013 to 2040.
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Integrating solar will likely not be a major challenge for a while
But investments with long lead times (large-scale transmission) should be made soon
Source: BDEW
Activated regulation service in GermanyMarch 20 Solar Eclipse in Germany
Source: https://twitter.com/DrSimEvans/status/578864470161813504/photo/
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There are better and worse ways of rolling out and scaling up solar PV
▀ There are better and worse incentive schemes− FITs (like GA had and Germany used until 2014) provide revenue
certainty, which helps a lot, but failing to adjust the FIT to market realities can be expensive (Germany, Italy, Spain)
− NEM is simple, but likely not great beyond initial deployment− Competitive Procurements work well for large projects, but are
not risk-free▀ Avoid discriminating between residential/DG PV and larger scale
− There could be a win/win/win in properly structured community scale projects Utilities maintain a role PV can be deployed more rapidly and cheaply Customers benefit, through power and perhaps as investors
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The lessons/messages summarized▀ We should think about climate change action as an insurance policy and solar (PV)
will likely play a key role in such an insurance policy▀ We have plenty of “resource” to power our system with renewables (probably a
mix of solar and wind)▀ Since PV is more like other “appliances”, we can (and should) ramp up PV “as
quickly as we can” (still not well defined)▀ The insurance premium is likely cheap since PV projects are no longer (significantly)
more expensive than fossil alternatives and that the difference will likely disappear soon.
▀ We’ll end up with a different system and the change requires investments, but the size of those is not very large and system operators know how to manage a system with sizable shares of PV and RE
▀ Even if we “need” much more PV, we should still be smart about rolling it out− No incentive system is perfect, but we need to make sure we learn from the
mistakes of others− We’ll likely need a mix of DG and utility scale
Make sure economic incentives are not unduly skewed Invest in infrastructure with long lead times early (transmission) Community-type arrangements may prove win/win/win
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