Il Sole ha già vinto (lo dice Deutsche Bank)

Deutsche Bank says solar market is massive, will generate $5 trillion in revenue by 2030. It describes solar plus storage as next the killer app, and says even in India there will be 25% solar by 2022.

india_solar_1

Deutsche Bank has produced another major report that suggests solar will become the dominant electricity source around the world as it beats conventional fuels, generates $5 trillion in revenue over the next 15 years, and displaces large amounts of fossil fuels.

In a detailed, 175-page report, the Deutsche analysts led by Vishal Shah say the market potential for solar is massive. Even now, with 130GW of solar installed, it accounts for just 1 per cent of the 6,000GW, or $2 trillion electricity market (that is an annual figure).

But by 2030, the solar market will increase 10-fold, as more than 100 million customers are added, and solar’s share of the electricity market jumps to 10 per cent. By 2050, it suggests, solar’s share will be 30 per cent of the market, and developing markets will see the greatest growth.

“Over the next 5-10 years, we expect new business models to generate a significant amount of economic and shareholder value,” the analysts write in the report. Within three years, the economics of solar will take over from policy drivers (subsidies),

Their predictions are underpinned by several observations. The first is that solar is at grid parity in more than half of all countries, and within two years will be at parity in around 80 per cent of countries. And at a cost of just 8c/kWh to 13c/kWh, it is up to 40 per cent below the retail price of electricity in many markets. In some countries, such as Australia, it is less than half the retail price.

The case for solar will be boosted by the emergence of cost-competitive storage, which Deutsche describes as the “next killer app” because it will overcome difficulties in either accessing the grid or net metering policies. “We believe reduction(a) in solar storage costs could act as a significant catalyst for global solar adoption, particularly in high electricity markets such as Europe,” it writes.

“As we look out over the next 5 years, we believe the industry is set to experience the final piece of cost reduction – customer acquisition costs for distributed generation are set to decline by more than half as customer awareness increases, soft costs come down and more supportive policies are announced.

“While the outlook for small scale distributed solar generation looks promising, we remain equally optimistic over the prospects of commercial and utility scale solar markets.

At utility scale, parity is also drawing near. Just four years ago, the ratio of coal-based wholesale electricity to solar electricity cost was 7:1. Now, says Deutsche Bank, this ratio is now less than 2:1 and it could likely approach 1:1 over the next 12-18 months. In some markets, it already is cheaper. And in India, that ratio could fall to 1:1 this year, with major ramifications for coal projects such as those in the Galilee Basin.

deutsche solar rise

“We believe utility-scale solar demand is set to accelerate in both the US and emerging markets due to a combination of supportive policies and ongoing solar electricity cost reduction. We remain particularly optimistic over growth prospects in China, India, Middle East, South Africa and South America.”

The Deutsche Bank report follows recent reports such as that by Agora Energiewende, which found that solar could fall below 2c/kWh by 2050. This week, the Abu Dhabi National Bank said that based on recent solar prices, even an oil price of $US10/barrel could not compete with the technology.

Gas needed a price of less than $5mmmbtu to compete, and that wasn’t happening anywhere. Last month, fossil fuel consultancy Wood McKenzie said solar farms were cheaper and displacing planned gas-fired generators in the US, despite the low cost of gas in that country.

Still, Deutsche Bank reported that while it is becoming increasingly clear that solar is now competitive with conventional electricity generation in many global markets, there is still some policy uncertainty that could impact investor sentiment and overall supply/demand fundamentals.

“That said, we believe the dependence on subsidies has decreased significantly compared to a few years ago and demand drivers are also increasingly more diverse as well as sustainable.

“We expect solar sector’s dependence on subsidies to gradually decrease over time, policy outlook to become more supportive and economics to take over politics over the next 3 years.”

Deutsche Bank said that despite the 30 per cent compound annual growth over the past 20 years, the solar industry is still roughly 1 per cent of the 6,000GW or $2 trillion electricity market.

“Over the next 20 years, we expect the electricity market to double to $US4 trillion and expect the solar industry to increase by a factor of 10. During this timeframe, the solar industry is expected to generate $5 trillion of cumulative revenue.

“By the year 2050, we expect global solar penetration rates to increase to 30%. We also see solar penetration rates increasing more rapidly in developing economies. India for example has recently announced targets to reach 100GW of solar capacity by 2022.”

If that occurred, solar would account for 25 per cent of total capacity in India. “We believe the opportunity would be even bigger if companies start adding services to the solar PV offering and venture into adjacent markets such as wind and hydro.”

Another two of the big markets are in the Middle East and central and south America. There, solar is already at grid parity in the wholesale market, And in areas where there is no grid, then solar is the obvious option.

“Even today, (with about) 20% of the world’s population does not have access to grid electricity,” it notes. “Due to declining costs and ability to deploy the technology without really developing the grid, we expect policy makers in developing countries to proactively promote solar .”

Kick Off Your Energy Management Program

When you walk into a big industrial plant, it is easy to be overwhelmed by the question “where on earth is all the energy going?” When I was a young engineer, I certainly was overwhelmed and I spent a lot of time doing detailed work on unimportant things. With most things in lifethe 80/20 rule is true and it is true for energy usage as well.

If you are adopting a systematic approach to energy management, you need to know:

  1. how much energy you buy in (your energy sources) and
  2. what is your end-use of that energy, and in particular, your significant energy uses (SEUs)

When you know the end uses of your energy in industrial processes or in buildings, you are in a position to make very dramatic energy reductions – instead of tinkering around in the utilities building.

In an ideal world:

  • you would like to plot your Sankey (energy flow) diagram
  • then identify your biggest energy saving opportunities by focusing on the significant energy uses

For example:

  1. In a breakfast cereal plant, we found that 70% of all of the energy was used in the drying of finished cereal. This made us focus on energy saving opportunities around the recovery of heat and latent heat from the dryer exhaust.
  2. In a high-end pharmaceutical manufacturing plant, we found that 80% of all of the end-use energy was used for climate control of clean rooms. This caused us to focus on HVAC, scheduling of clean room operation and re-examining regulatory requirements.
  3. In a university, we found that energy use was very widely fragmented and that most energy use was under the control of staff in local departments. This caused us to focus the energy management program around training and communication activities for employees and students.
  4. In a supermarket chain, we found that only 2% of energy was used for lighting of outdoor car parks. Before this analysis, some supermarkets had been investing time and effort on energy reduction in car park lighting because customers had complained about apparent energy wastage. After the analysis, the supermarkets re-focused on the bigger energy uses such as refrigeration, chilled displays and interior lighting.

When it comes to figuring out your end-use energy, the two common approaches are:

  • Calculation – by energy specialists using the equipment power ratings, operating schedules, advanced calculation techniques, sometimes including simulation
  • Metering – designing, tendering and substantially investing in automated metering systems

Both these approaches require a substantial investment of time and/or money – and this can delay your start on taking energy-saving actions.

The question is this: would you get better value for money by focusing on the most important energy uses from the start, rather than making an equal distribution of time and money across the entire plant?

If you are hiring energy analysis specialists, you could focus them on the biggest energy consumers.

Regarding metering, too many people “over- meter” too early and with the result that they have poorly designed and unbalanced metering systems – and they spend too much money on the wrong thing. For example, I very often see industrial plants that have hundreds of electrical meters and only one or two thermal meters – even though electrical /thermal energy use is split 50-50!

What is the value of guesstimation and visualization?

For different sectors within industry and buildings, there are research results available which will give a rough first estimate of the energy breakdown for your sector. So, why not search for results on the web and then apply the percentage breakdown to your site.

Or:

If you are in a very specialized industry, perhaps it is you who is the expert. Perhaps you have a rough idea yourself, from your experience.

Here is a Sankey diagram which shows all energy uses and clearly highlights significant energy uses (it also shows which of these are metered).

sankey diagram enerit

Now, can you visualize it? When you see your breakdown clearly, you can see what energy is “unaccounted” – i.e. you do not know where it is used! For example, I know of a manufacturing operation with long experience of making project-based energy-saving improvements. Only when they did a Sankey-style energy balance did they discover that 30% of their energy was being used in their water treatment plant at the back of their site (and “unaccounted”) – this demonstrates the importance of a top-down analysis of their energy use!

When you visualize, you can also decide which energy streams need extra metering and which ones just need an improved estimate – and depending on the size of the energy flow.

When you visualize, you can motivate your management by showing graphically key areas of energy cost reduction.

Bottom line: Yes – guesstimation will save you time and money. So, make your first guesstimate now, find a way to visualize it, and get focused on key areas for: saving energy now; improving your estimates; and investment in metering!

Paul F. Monaghan, Ph.D., is CEO of Enerit. Paul is a 30-year veteran of energy management throughout North America and Western Europe. As Enerit CEO, he is responsible for setting the strategic direction of Enerit energy software products. Enerit is a global leader in delivery of innovative systematic energy management system (EnMS) software to support Energy Star, ISO 50001, SEP and all EnMS based on the ISO 50001 approach. Enerit EnMS software is complementary to and integrates with monitoring and energy reporting software. Enerit software includes dynamic Sankey diagrams to make it easier to get started with a systematic EnMS approach.

Energia rinnovabile: uno sguardo critico

Many qualify electricity from solar panels or wind mills, in a poetical mode, as free energy.
There is no such a thing as free energy. It is renewable, but not free. It requires a large energy investment to produce solar panels or wind mills. It is imperative to use the proper tools to analyze any of the so called renewable sources of energy and dispel the notion that they represent free energy.
The objective of those renewable sources is to have a positive future flow of output energy, and that flow of renewable energy should be able to pay the initial investment in non renewable energy in a short period of time, say a maximum of 3 years. This standard indicates that we have a real innovation. Any Government financial support does not change the reality of our objective, fast payback of the energy investment.
This is the only objective we should have for a measure of reasonable sustainability and cut our dependency on foreign oil.
As you can deduct, this definition of sustainability is independent of the price of oil, as it should be. Let’s check the situation of the three most common projects for renewable sources with the standard mentioned above.
1. Ethanol: The future flow of renewable energy is negative. There is nothing left to pay for the humongous required energy investments-1 Gallon of ethanol, uses 1.85 Gallons of oil- If we do nothing, we will be better off in terms of energy consumption and emissions now and in the future. The government support, with all their financial help, cannot change the negative energy balance and the enormous increase in present emissions. Our goal is not fulfilled.
2. Wind Mills: The future flow of renewable energy is positive. However the very large investments in energy to engineer and build the units, including power lines, have an energy payback beyond 30 years.
This investment does not avoid the investment in carbon, gas, or nuclear power plants to cover the ~70% of the time they are not producing electricity. We are increasing dramatically the power consumption and emissions as we build the units now, for a meager yearly renewable volume of power. . Our goal is not fulfilled
2. Solar panels: The future flow of renewable energy is positive. The pay back for the initial energy consumption is beyond 50 years. Solar panels produce energy in average ~20% of the time. Any standard technology, let’s say small generators consuming natural gas, cost 1/30 of the energy cost of a solar panel for an equal total output.
We seem to be digging our own grave with gusto. None of those projects comply with the most elementary energy objective we have as a country; on the contrary, they produce a considerable spike of energy usage now, that could be avoided, and I doubt that they will ever have a proper pay back in created energy.
There is no wealth creation in these activities, no energy savings, only an immediate transfer of money from the Taxpayers to somebody else, destroying other Industries in the meantime.
Due to all kind of government money injected into these projects, and the high price of oil, money could be made. But if the price of oil goes below a certain threshold, boom, the project is no longer viable. See T. Boone Pickens suspending his wind mill project because oil went below US$60. Or the several bankruptcies in ethanol due to the higher price of corn in spite of all the subsidies! Millions of barrels of oil that we cannot afford to loose, thrown to the wind.
None of those programs complies with cutting CO2 emissions, a suspected objective anyway.
They make our dependence of foreign oil much worst, not better, using considerable high level engineering resources for naught.
There are enormous opportunities in energy savings and production in many Industries, with a positive balance of energy consumption and paybacks anywhere from 4 months to one year.

I nuovi decreti gemelli sull’incentivazione delle fonti rinnovabili

Decreto ministeriale 5 luglio 2012 – Incentivi per energia da fonte fotovoltaica (pdf)

Decreto ministeriale 6 luglio 2012 – Incentivi per energia da fonti rinnovabili elettriche non fotovoltaiche (pdf)

Allegati al decreto elettriche diverse dal FV (pdf)