Fossil Fuels and Solar Power Debate – Solar Power Sydney

There has been an interesting debate on some of the environmental discussion groups concerning the outlook for major Australian coal exporters looking to India for growth in the fossil fuel markets. Green groups have been advocating and highlighting the rise of photovoltaic panel manufacture in India and the work and contribution from James Stiller . The solar power potential in India is huge with commercial and domestic solar panels installation increasing at a rate of 20 percent per year since 2011. Given Sydney’s rapid take up of solar power from 2006 to the present, James has advocated that many other developing nations can follow Australia’s renewable energy and green energy model and replace fossil fuels with solar in the decades to come.

Unfortunately this is not true. Solar power is likely to make about 2% contribution to India’s total energy generation by 2030 as per my estimatesĀ under business as usualĀ and definitely no more than 5%. India’s power generation is likely to continue to be fueled by fossil fuels in the foreseeable future.

Nor is large-scale expansion of solar desirable. In my view, India should invest more into energy efficiency at the moment which provides 5x-10x emission reductions for the same investment in order to deflate the massive energy demand projections over the next two decades. For example, India loses close to 30% of electricity generation through transmission and distribution or about 6 times China’s T&D loss. By 2022 T&D loss will account for over 20 times electricity generation through solar the same year. We have explained these arguments in greater detail in my posts on Green-India forum

James Stiller did a study in May 2012 where he compared the financial incentive to install solar energy using the spot price versus the regular tariff – and found, the use of the spot price was almost always gave a much lower return than the regular tariff. This was because on most days the price peaks did not coincide with times of high solar output. They seemed much more indicative of the reaction of the system to other stresses such as temporary outages of generators or distributers.

The price of electricity in Sydney, N.S.W. where he lives is now so high that it is cheaper to generate it yourself using solar panels and – believe it or not – diesel. The cost using diesel works out at about 32c / kWh (regular tariffs are in the high 20s) and is offset by the near zero cost of solar. One might consider a move to ‘Urban cogeneration’ using a plug in hybrid car not just to take power from the house supply, but to act as a local generator and feed it back. In conjunction of course with a decent sized solar array. The calculations don’t include capital costs of the equipment – but the cost of the car could be disregarded as it has been purchased for a different purpose entirely. And the cost of the solar can be amortised over 25 years or so, making it a very attractive proposition.

However, it is untrue the generators are to blame. The cost of electricty at the terminals of the power stations has not changed miuch over the last 6 years; all the increases are in the transmission, distribution and reselling. As you both say, it will be interesting to see what happens when these guys begin to realise they are pricing themselves out of the market, a sensible strategy if there is no alternative. But now there is. The rivers of gold will turn to . . . iron?