[ckilmer]

Is Solar The Next Shale?

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Will solar power transform electricity markets as significantly as shale transformed oil and gas?

That is the question posed in a new study by Wood MacKenzie, an international energy research and consulting company.

“Just as shale extraction reconfigured oil and gas, no other technology is closer to transforming power markets than distributed and utility scale solar,” writes Prajit Ghosh, an energy analyst at Wood MacKenzie and the study’s primary author.

Based on the study’s persuasive analysis, it seems difficult to dispute that solar technology will transform – and in some states already is transforming – wholesale power markets.

But there is whopper of a caveat. The scope of the solar-induced transformation will depend on political decisions made in the future. The shale revolution also depended on political decisions. The vital difference is that the decisions that enabled the shale revolution mostly preceded the maturation of shale extraction technologies.

Paul Joskow, a professor of economics of the Massachusetts Institute of Technology and the President of the Sloan Foundation, has argued that regulatory and market reforms in the natural gas industry provided an essential economic platform for accelerating technological advances in shale extraction. In 2013, Joskow explained in an article published by the American Economic Review that:

The recent dramatic and largely unanticipated growth in the current and expected future production of shale gas . . . would not have been realized as quickly and efficiently absent deregulation of the wellhead price of natural gas, unbundling of gas supplies from pipeline transportation services, the associated development of efficient liquid markets for natural gas and reforms to the licensing and regulation of prices for gas pipelines charge to move gas from where it is produced to where it is consumed.

The solar-induced transformation described by Wood MacKenzie can largely be explained by the following two charts.

The first chart shows the results of a “net cost analysis” performed by Wood MacKenzie for utility-scale power plants constructed in California. Net cost is a metric for estimating the profitability of investing in a new power plant. It is the difference between a power plant’s total revenues (e.g., sales, capacity, incentives) and its total costs (e.g., construction, fuel).

[ClearCase_guy]

Solar has been on the verge of transforming the world for at least 40 years now.

I ain’t holding my breath.

[Fungi]

No. Period. Not now. People do not realize the ramifications of solar. Enough sad for now.

[RegulatorCountry]

If solar collapses in price on a par with oil driven by shale in the past year I’ll jump on the solar bandwagon. I want to secure a stable cost for future energy requirements and neither major political party in this country appears willing to fight for that, call me what you want.

[Myrddin]

Probably. Just as shale flourished with high oil prices and is falling on its sword with the crashed price of oil, the solar business depends on high costs of competitive technologies to make it look attractive. Lower those costs and nobody wants solar. The comparison is instructive.

[bigbob]

Keep gummint’s nose out of it, and technology will eventually bring solar generation to a cost-effective level. Without doubt.

[fso301]

grid parity has arguably already been reached in many states where they are driven by incentives and financial innovation.

Is financial innovation another term for soaking the taxpayer?

[Usagi_yo]

Fusion ... Solar .... Vaporware.

[catnipman]

“large scale solar economics have already reached grid parity:”

Except at night.

Or in the low sun wintertime.

Or areas where it rains and/or is cloudy much of the time.

Or areas where it frequently hails large hailstones.

Or where the population is so built up, there’s no place to site giant solar farms.

Other than that, yeah, solar is great!

[dalereed]

Eliminate all the government subsidies and the solar crap will disapear!!!

[knarf]

no

[lonestar67]

People miss the huge benefits of cheap solar:

Giant toxic lakes in china unnoticed by supposedly environmentally sensitive folks

Super cheap labor in China undercutting American manufacturing

Chinese govt price supports distorting the price cost ratios of solar

Solar is really good.

[mrsmith]

Power companies are REQUIRED to purchase the solar.
Other forms of electric generation must subsidize the solar- so become less viable.

This is all a natural result of government “renewable energy mandates”. These costly mandates are becoming very unpopular so don’t bet any money on them continuing.

[clearcarbon]

"Our base case forecast assumes 26 GW of distributed solar and 45 GW of large scale solar by 2035, totalling above 71 GW. "

How much power is that per square foot (or square meter)?

[central_va]

Technically ALL sources of energy are solar.

[bolobaby]

Look, I’ll be stoked when we have new technologies that actually work well enough to efficiently replace existing technologies.

But...

Graphs that show “projections” out to 2035 aren’t enough to convince me. If I followed technology projections, I should have my flying car by now according to Popular Science.

[Huskrrrr]

My sister and her husband, in Iowa, rigged up a solar panel to charge their Leaf. More power to them. :0)

[arthurus]

The EA on direction of the Vizier Valerie and Sultan Mohammed are trying to shut down the oil boom to raise the price sufficiently to make solar competitive. Whether it ever succeeds or no the success of the project will also be achieved if the price of energy can be raised enough to price the middle class out of the market to be replaced by an ever growing and ever less prosperous welfare class that when the middle class no longer exists outside of the apparatchik class can be transformed into cheap third world labor with which to undercut Indonesia and Vanuatu.

[wjcsux]

The only way solar is viable is through massive government subsidies coupled with massive government punishment of conventional energy sourses such as coal.

[sparklite2]

No.