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Partial Eclipse


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The solar energy revolution that began sweep the world a few years ago seems to have stalled, caught up in political games between the industrialised nations and China. However, the future remains bright as the sun is expected to shine again.

Rajendra Shende was invited to write an article on the occasion of OECD Forum of May 2013 about recent ups and downs of the progress and prospects of PV modules and panels in context of its falling prices. Read the article that was published in special issue published at the time of OECD Forum: “Partial Eclipse”

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Partial Eclipse

  1. 1. May 2013 OECD Forum Special BIZ@INDIA5870 The solar energy revolution that began sweep the world a few years ago seems to have stalled, caught up in political games between the industrialised nations and China. However, the future remains bright as the sun is expected to shine again. I n just one year the Earth’s surface receives as much solar energy as two times the total reserves of the Earth’s non-renewable resources of coal, oil, natural gas, and mined uranium combined. Solar radiation received by small part the Sahara Desert-area of about nine times smaller than France or almost equivalent to the area of West Bengal of India- could provide all of the energy need of 500 million Europeans. Just over one per cent of its eight million square meter of total area of this desert, labeled in todays financial standard as ‘ worthless land’, could yield the same amount of electricity as all the world’s present power plants combined. Only 15000 sq. km of total 200,000 sq. km of Thar desert on the Western part of India’s State of Rajasthan, can produce from solar radiation, total electricity which would be more than equal to all the installed capacity of coal and other power plants in India. Rajasthan is known for its natural landscape and monumental heritage. Solar energy could be ‘future heritage’ of Rajasthan.One square meter area on the roof or the open space can give on average one kW of electricity –good enough for normal consumption of a family in the developing country, Earth’s deserts where the tempe- rature could easily and frequently rise to 45 degree plus, are sitting ‘under the energy reserve’ the way certain countries are sitting ‘on top of fossil fuel reserve’. Country-specific maps of fossil fuel reserves are known to many, and now the United Nations has released the solar radiation maps country wise! The field-testing of the solar systems has now proved these astonishing figures given above. And what more, the photovoltaic (PV) cells that convert the solar light into electricity, used in this testing process, hadmiserably and desolately low effici-ency i.e. just about 15-18 per cent. Indeed, that’s what maximum efficiency present technology can offer at commercial level. The laboratory and pilot scale have reported the efficiency levels of about 40 percent using inter alia nano-technology. But the cards on these results are being held too close to the chest and the details are not known. Imagine if such efficiency levels of 40 percent or even higher were realized, the world would go complete solar! Solar energy is the ultimate truth to respond to energy challenge global. At this point, the treatise on ‘global energy security’ should be concluded. Global Solar Energy Scenario A partial eclipse Rajender Shende
  2. 2. BIZ@INDIA May 2013 OECD Forum Special 71 Both renewable and non-renewable energy sources are free for any one to explore and exploit, but they come at cost to each of us because they are ‘packaged’ for our use. Read any report on solar energy, be it by International Energy Agency or United Nations, it invariably states that technology to gainfully exploit the solar energy exists, but its scale up and the cost is prohibitive as compared to alternate fossil fuel generated electricity. So, finally it all boils down to the fact that the main barriers are human inability to scale up the technology and its failure to bring down the cost of the solar PV systems. We are living in the interesting times indeed. Both the commercial scale inventions of automobiles and photovoltaic cells are nearly 100 years old. Starting with assembly line for automobile manufacture invented by Henry Ford and his team, the world has undergone the mobility revolution. Once termed as ‘difficult to scale up and definitely beyond reach of well-to- do families’, the car manufacture became cost-effective and cars soon became accessible and affordable. There is at present one car for every 7 citizens of the world. If 7 passengers can be packed in a car, the whole global population can be sitting in the existing cars, with no one left to walk! I am exaggerating and dramatizing the situation for the simple reason. It is for the industry and the policy makers to reflect that : if we can transform automobile industry so that it becomes affordable and easy to operate, why not solar power units that generate electricity by photovoltaic cells? Answer is not far to seek. There were no power-wars in 1913 when Henry Ford launched the revolutionary assembly line technology. There were no lobbyists and pressure groups from bicycle industry or steam driven trains or animal driven cars. Today the scenario in the alternative sources of energy is full of power-war with intense lobbying. ‘Henry Fords’ of the solar energy are deprived of the resources to make the concerted efforts to improve the PV technologies that generate electricity from sunlight. There are mainly two types of technologies by which solar energy can be converted to electricity. One is direct method i.e. by Photovoltaic (PV) which coverts the solar light to electricity by photoelectric effect. And another is indirect by CSP- Concentrated solar power. Unlike solar panels, which convert sunlight directly into electricity, CSP utilizes mirrors to focus light on water pipes or boilers, generating superheated steam to operate the turbines of generators. Total global electricity generation by photovoltaic cells today is just about 0.2 percent of total electricity generation. Electricity generation by CSP is even much smaller. Both technologies were invented more than a century back, but were nearly dormant due to ease in availability of the coal and oil. Then came the first oil shock of early 1970s and the world started to uncover these technologies that were gathering dust. While the wars of 1970s that gave rise to shortage of the oil were over, another war of the fossil fuel versus renewable energy started. The former was limited to certain pockets of geographical domain. The later was fought and still being fought in the global market place. To make the solar energy affordable, governments are providing the incentives in various forms. The subsidies could include those given to manufacturers of the PV panels, users of panels and feed-in tariff, but they remain small frills in terms of their amount and nature. Global subsidies- direct and indirect-for fossil fuel industry and users, for example, amount to USD $1.9 trillion dollars (1476.8 bn euros) as per the IMF report released in April 2013. Of that, direct subsidies amount to about half a billion dollars. Compared to these subsidies, that for solar electricity generation is small fraction. The subsidies, however small, seem to have one definite impact: it helps in market penetration, enhances the scale of economy and help bringing down the cost of solar energy. The recent worldwide phenomenon demonstrated such reduction in the cost of manufacture of PV cells very effectively. The costs came down drastically by about 70 percent over 3 years. It unfortunately created a very discouraging scenario, which reminds me of the description of ‘solar storm’ in the Sun’s atmosphere. Flares from solar storm, as we know from physics, create severe disturbances in the communication systems on the Earth because they interfere with geo- magnetism. The storm created by the Energy & Ecology But the story of power- war starts here. Yearwisesolarcellproduction AnnualProduction[GWp/yr] Total China, Taiwan Europe Japan North America Rest of World Solar Cell Production 2001 - 2010 2002 2004 2006 2008 2010 20 15 10 5 00 year ( data source: PV News 2009.4, 2010.5, 2011.5)
  3. 3. May 2013 OECD Forum Special BIZ@INDIA58 Energy & Ecology major countries in recent ‘flare-up’ due to reduced PV cell process originating from China did more harm than good to the solar power generation and international dialogue. It all started due to subsidies offered by the industrialized countries to the users and producers of the electricity from PV modules. The demand increased steeply due to such subsidies over last couple of years. Even during the financial crisis, the electricity produced by the PV panels grew at unprecedented rate in Europe, America and other countries. Chinese manufacturers came in large part to meet that demand. Backed by the incentives made available by the governments, the lower labor cost and increased production levels, China was able to deliver in the hungry market the PV panels at much reduced cost. Surprisingly, the industrialized world, which always looked for the lowering the cost and always respected productivity, put barriers to the import of PV Modules of Chinese origin. The usual reasoning of the national job losses and los of national manufacturing base were used to make complaints under the rules of World Trade Organization (WTO). As a result, China’s PV manufacturing collapsed. Chinese government had to ‘bail-out’ its PV industry. The ‘solar flares’ not only interfered with the ‘geo-magnetism’ but also the ‘geo- politics’. It is strange that productivity is not being rewarded when the solar energy is needed most by the global community. Interestingly, productivity is even punished by the importing countries under the rules of WTO. There is a sunny side to this power- war. The solar market is anything but static and stagnant. In 2012 the global capacity of solar PV installation grew by solid 42 % by adding an estimated 29-30 GW to already installed capacity of 70 GW. The growth is being seen as consistently high from year 2000. Even in the financial crisis of 3-4 years starting from 2008, the growth rate of PV installation suffered only marginally. Though concentrating solar power (CSP) has not had the same explosive growth as solar PV, installations are likely to be initiated on a commercial scale in Spain, United States, Middle East, North Africa, as well as in Australia, India, China and South Africa. In the backdrop of minor percent of Solar Energy in total global energy scenario (Solar power accounted for 0.5 percent of global electricity demand in 2011) these figures are extremely encouraging. Even in the wake of irrational wars in the market place and the recent stops and cuts in the incentive in some countries (e.g. Germany Italy and India), growth in capacity of PV installation remained robust in 2012, spurred of course by falling prices and stronger policy frameworks for example, in Japan and China. The growth is projected to continue over the medium term. Improving competitiveness is helping deployment of PV to spread into Africa, the rest of Asia, Latin America and the Middle East. Government policies and incentivesare helping to being down the capital and operationalcosts for solar PV energy. The average cost per installed watt (system costs including electrical grid connection and other equipment needed for installation) of solar photovoltaic in the United States has dropped from over $7.50/watt in 2009 to $4.44/watt in 2012. In 2011 alone, cost per installed watt declined 17.4 percent. If it has to compete with the present cost of electricity, this cost has to come down below $ 1 /W. More than 100 governments are on track to set conducive policies to promote the solarenergy. Consumer awareness on use of solar energy is rising. Market is reacting favorablyto the competition and economy of scale. Prices are falling, what then is missing? What we are missing is the century old spirit of Henry Ford. Henry Ford assigned the adequate amount of resources for Research and Development (R & D), took risks, assembled his team,developed coordinated strategies between the teams and came up with technological innovation now commonly called ‘assembly line’ to bring down the cost and manufacturing time effectively. That brought down the final cost of the product. The R&D needed today to improve the efficiency of the PV cells to bring down the system cost is not adequate. R&D budget of OECD countries for renewable energy today represents a very small share of total spending by the governments on R&D. While Defense sector receives 30 per cent of OECD governments’ support for R&D, energy’s share at present is varying between 3 per cent and 4 per cent. Majority of this spending goes for fossil fuel research. R&D expenditure on fossil fuel and nuclear combined was more than twice that for renewable electricity. Ithas been observed that R&D spending in emerging economies for renewables is increasing but the priorities are based on national interests in each case. China has taken global lead in patent filing for the clean energy, PV solar is just part of it. International Energy Agency (IEA) made a strong recommendation at the 72 Photovoltaic power worldwide GWp[2] Year Capacity 2005 5.4 2006 7.0 2007 9.4 2008 15.7 2009 22.9 2010 39.7 2011 67.4 2012 100 GWp=GigaWatts Peak, ( 1 GW= 1000 MW ) InstalledcapacityofsolarPVcellsglobally
  4. 4. Energy & Ecology BIZ@INDIA May 2013 OECD Forum Special 73 recent Clean Energy Ministerial Conference in New Delhi of increasing the R&D spending for the renewable energy. But the present financial crisis is unlikely to allow the governments to allot more resources for such R&D spending. There is a way out. The world has experienced that R&D, if conducted throughcollaborationandpartnerships, brings down the costs and speeds up the results. The OECD countries have similar experience in their commercial projects of the European Space Agency and CERN-a research project on particle physics. Further, it is not just about how much money is being spent on the R&D but how it is spent. The money spent on coordinated research and collaborative efforts between the specialized teams from OECD countries and emerging economies would be more effective. India, particularly, faces formidable energy challenges on PV solar energy. It relies heavily on fossil fuels and its energy demand is set to grow more than fourfold over the coming decades. Current trends will drive up imports of fossil fuels, increase local pollution as well as greenhouse gas emissions, and put its energy security at risk. But India has a solid engineering base and a strong, innovative private sector that has consistently surprised the world with pioneering and affordable technology solutions. India has the opportunity to take lead in joint ventures in technology transfer energy and technology cooperation to enhance the efficiency of PV cell. BP Solar’s joint venture with Tata Group has indeed driven solar PV activity in India, but a collaborative and coordinated research to enhance the PV efficiency above 25 per cent in commercial installation would bring the cost of solar energy very near to the cost of other energy sources and make it broadly affordable. Another positive example in this direction is that of Suzlon Industries in the field of wind energy. Suzlon’s strategy has been to acquire majority shares in European technology companies, expand its R&D facilities in several countries in Europe, and engage in collaborative R&D. The company is currently passing through a very tough period due to its extremely highly leveraged books, brought on in part by the high acquisition costs and very rapid expansion. But Suzlon is currently addressing the debt issue and it is expected to be back on track. These difficult times apart, Suzlon has clearly set the tone for other Indian companies. Similar initiatives in the solar energy, coupled with leveraging of India’s knowledge power would make PV solar energy within the reach of India’s population. Building partnerships with international agencies and companies, establishing network of institutes and research oriented Public Private Partnerships(PPP) in solar energy would be needed to make technology breakthrough in PV cell efficiencies. In the present financial crisis, it makes sense for the OECD countries to initiate the collaborative research programmes taking advantage of the youth power of the emerging economies and the experienced manpower of their own countries to target the PV cell efficiency with time bound programmes. It would be a win- win strategy. The idea of secretive research programmes in case of solar energy is archaic. If the European goal of 20 per cent renewable energy by 2020 is to be fulfilled, they need out–of-box R&D that has global dimension and that crosses the boundaries, the way solar lights do. photovoltaics. Solar Map of the world