Dear George, (if I may)
I write regarding your interesting piece about solar in the Guardian, 21st June, here . I think that you are mistaken in some of what you say, though I admit I’m less interested in the technicalities of who won your bet than in the more general case for and against UK solar. (I will play along with the bet bit, though, in what follows). I’m sorry that my comments are detailed and hence long, but I’ve been meaning to write to you about this before now, and your article yesterday has galvanized me. I should be very happy to discuss, or even debate, these points with you at any opportunity.
As an academic engineer turned psychologist, I have been working in recent years on designing and building energy-neutral micro-homes as part of the Cube Project (see the production model QB2 at this site and the original QB1 here). Given that one of the points of the original QB1, and of the production model QB2, was to demonstrate that a dwelling could, even in the southern part of the UK, generate as much energy as it uses (on average at least – more about that later), your points about solar are highly germane. The Cubes rely only solar energy, collected via 3kWp of solar panels and a 5kW air-source heat pump. Importantly, there is nothing about the Cube buildings that means that the same energy-neutrality could not be achieved with a full-sized home. Essentially, everything scales up with surface area and we have designed a four-bedroom house (QB7) along the same principles.
I turn to the details of your argument in approximately the order you raise them in your article, and have added some numbers (which were otherwise in somewhat short supply).
1. How much does UK solar cost and is it cost competitive? Have we got grid parity for householders?
I don’t really agree with your adoption of the DECC’s definition of grid parity (“Grid parity can be defined as the point at which government support for a technology is no longer required”) though I respect your attempt to get an independent arbitration. Even so, if I were being lawyerly (and I can’t resist) I would point out that you do not prove that a subsidy is required just by virtue of showing that a subsidy exists. As a psychologist, I’m well aware that a subsidy might be strategically necessary to get people to change their behaviour, even in circumstances in which it would be logical for them to change their behaviour anyway (i.e., in the absence of the subsidy). My attempt, therefore, will be to show that it is financially prudent for a householder to purchase UK solar today (and we are not yet at the end of 2013, when your bet expires). This, I guess, is in the spirit of your bet (whose terms were never agreed anyway, if I understand correctly).
Some figures: 4kWp of solar costs £6k-£7k today in the UK, all installed. (I know this, as we have just had a quote from a reputable supplier for a local project). Let us take £6.5k as representative. That 4kWp of panels will generate 3400kWh of electricity each year, local to the householder (i.e., consumer not wholesale), and will occupy around 28m2. I will use a lower figure of 3200kWh per year to take into account some loss over a 20-year lifespan. To raise £6500 and pay it back monthly over 20 years, at an interest rate of 5% APR (higher than current mortgage rates for that period), will cost me a constant £43 per month over the period, or £516 a year. This gives a constant cost over the period of (51600/3200)=16.1p/kWh, a figure that will remain the same regardless of any inflation in the economy over that period. Actually, in the first year, the price per kWh should be perhaps be based on the 3400kWh that will be generated in that year, which would give 15.2p/kWh inflating by no more, probably less, than 1% thereafter as the PV degrades slightly. I am not counting any energy that will be generated by the solar PV after 20 years though, if I did so, it would make solar look better still.
(Of course, the p/kWh figures here assume that I can benefit from all the energy that my PV system generates, as it generates it. Net metering (but no subsidy) would ensure that this is the case, and would allow any excess that I generate to be used by my neighbours. See below, for a discussion of what happens when lots of people have solar.)
How competitive is this? A quick trawl of comparison sites shows that if I were to choose an electricity tariff which fixes prices until only 2016 (not the fix until 2033 that I get with the solar option), then I would pay £530 per year for my 3200kWh. (OK, this includes some element of standing charge but, even without that, we are in the region of 14p/kWh today if you want to fix). So the price today of fixed-price electricity for the next two years is almost exactly the same as the constant price of solar for the next 20 years. You can be sure that the grid price will inflate after the fixed-rate period. Even it inflated by only 2.5% per year (it is unlikely, historically, that the rate of inflation would be so low) in year 20 the price would be 60% higher than the solar cost and the average cost over the whole 20-year period will have been 28% higher than the solar cost.
In summary, solar in the UK is already price competitive with grid electricity supplied to the household, even before any externalities in the grid electricity are taken into account. Any reasonable factoring in of the damage done by CO2(such as you would support) would, of course, push the grid price yet higher relative to the solar. The FIT subsidy is there to encourage behaviour change, not to make the electricity price competitive.
I’ve discussed above the issue of cost competitiveness of UK residential solar against consumer electricity supplied by the grid. I’m less sure that industrial PV in the UK is yet competitive with more traditional generating technologies as a supplier of wholesale electricity (compared on the basis of, say, the Levelized Cost of Energy, LCOE). However, the cost of PV is falling, whereas most of the alternatives are rising in cost (and, in the case of fossil fuels, will continue to do so as the price of carbon dioxide emissions is properly incorporated). Thanks to these drastic price falls, Chris Goodall, among others, now believes that PV in the south of England to be LCOE competitive with new nuclear as he writes here. Indeed, using a wholesale price of £1000/kWp, a discount rate of 3.5% over 20 years, and a capacity factor of 10% suitable for the southern UK, gives a LCOE of 9p/kWh (even disregarding any generation beyond 20 years). So Goodall may well be right.
2. Alternative low-carbon energy
You favour nuclear and offshore wind in your generating mix. I absolutely agree with you on both counts and, furthermore, support your position on 4th generation reactors such as the GE PRISM integral fast breeder reactor. Your support for both, however, must acknowledge that they will both lead to an increase in wholesale and, hence, consumer price. Even in their current negotiations for more conventional reactors, EDF are likely to get a strike price of 10p/kWh linked to inflation, possibly more. This is around 5p/kWh more than the current wholesale nuclear price, suggesting that the consumer price would rise by at least this much if new nuclear were to go ahead (as I hope it does). This would make solar even more competitive than I have set out above (especially since solar prices are likely to fall rather than rise, tariff disputes notwithstanding). Regards offshore wind, current wholesale prices seem to be around 14p/kWh, with a hope, rather than an expectation, that they will come down to 10p/kWh in due course. Such values would also suggest a consumer price per kWh of electricity significantly higher than today’s, and therefore not competitive with local solar or even wholesale solar. In summary, it is illogical to support offshore wind and nuclear on the basis of their price relative to UK solar.
3. Energy density and accessibility
One of points that I have seen you make several times before is that solar does not work well at high latitudes such as in the UK, while asserting that offshore wind is a good alternative. Some figures are necessary, I think. Based on the figures for the southern half of the UK given above, the energy intensity of UK solar is around 850kWh/(8760h*7m2)=13.9 W/m2. By comparison, the first phase of the London Array offshore wind farm is 100km2 in area and will generate somewhat less than 200MW at an average of less than 2W/m2. This is one seventh of the surface energy intensity of UK solar. Figures for onshore wind are similar. Don’t get me wrong: I support onshore and offshore wind, but the comparison in terms of surface energy intensity strongly favours solar, even at UK latitudes. In addition, as you point out, solar can be deployed very easily, discretely and quietly by comparison with either wind option. Moreover, as you also aver, a solar installation is also something that I can personally effect. I cannot personally insist that a government permits, and a company builds, a nuclear power station (though I wish that they would do both). I cannot personally construct an efficient wind farm (since efficiency demands massive scale). I can, however, deploy solar on my own roof, or contribute to a local community scheme. Solar is thus convenient and accessible.
4. Matching demand and energy storage
You point out that solar energy in the UK is not well matched to demand. I think, however, that this is an incidence of what, in a psychotherapeutic context, might be called all-or-nothing thinking. Clearly the UK could not run on 100% solar, as it could not run on 100% wind, but that is not really the issue. The issue is whether solar can make a good contribution to UK low-carbon energy mix.
The electricity demand on an average June day ranges from 23GW to around 37GW at midday (not, in fact, in the evening, and well synchronised, therefore, with the solar supply curve). In December the range is from 28GW to 48GW, the latter being in the early evening as you suggest. These figures mean that there would be no problem in excessive solar supply, were we to install, say, 30GWp of solar capacity (as in Germany). This could be increased if there were additional demand produced by a shift to electric vehicles, as I guess you would support. (Each million vehicles on a 7kW charge will provide a somewhat despatchable demand of 7GW, so five million such vehicles can double our summer peak demand so as to absorb solar peaks.) 30GWp of UK solar would produce around 26TWh of very low-carbon electricity per year, which is 7% of current total UK demand. With reduction in night-time baseline power demand and by further managing daytime demand (charging EVs, generating hot water using heat pumps, etc., at any excessive solar peaks), there is no reason why solar could not contribute nearer 20% of yearly electricity demand without the need for any other storage.
As Chris Goodall has pointed out in his comments on your piece, there are also possible peak storage mechanisms other than EVs and hot water. He suggests power-to-gas, which converts electricity, water and CO2 into methane at around 55% efficiency, possibly rising to 75% in future. Even at 75% electric-to-gas efficiency, the round-trip electricity-to-electricity efficiency would be no more than 40% if reconversion to electricity was required. An alternative is storage of electricity in the form of liquid air (e.g., UK company Highview Power Storage) which already achieves 60% and is intended to reach a 70% round-trip electrical storage efficiency (approaching that of pumped water storage) if placed in locations next to a source of waste heat (such as a nuclear power station – you’ll see where I’m going here). This 70% of stored electricity could, of course, be used to run a heat pump when it returns to the grid, making a substantially more efficient system overall than electricity-to-gas (though with legitimate questions about storage capacity).
In summary, there is not an immediate problem in terms of demand matching until one gets to at least 10% overall solar supply and, with additional storage in EVs, hot water and cryogenic stores, this figure might rise to nearer 20%. Even in June, solar peaks don’t need to be stored for very long, as energy demand continues into the evening and throughout the night.
To conclude, whatever the state of your excellent bet with Jeremy Leggett (and I gather that he is expecting to concede, prematurely perhaps), I think you have sold UK solar somewhat short, not so much shooting in the air as shooting yourself (and the rest of us) in the foot. I’d be most interested in your comments, or to discuss this at any time at your convenience.