Solar Power Is Cheapest–Well, At Least In The Atacama Desert!
By Paul Homewood
The failed Independent reports:
Data produced by Bloomberg New Energy Finance (BNEF) showed the cost of solar in 58 lower-income countries – including China, Brazil and India – had fallen to about a third of levels in 2010 and was now slightly cheaper than wind energy.
In August, an auction to supply electricity in Chile achieved the record low price of $29.10 (£23.30) per megawatt-hour – a record low price and about half the price of a coal competitor.
BNEF chairman Michael Liebreich said in a note to clients: “Renewables are robustly entering the era of undercutting [fossil fuel prices].”
Renewable energy is cheap in developing countries that are looking to add more electricity to their national grids.
“Renewable energy will beat any other technology in most of the world without subsidies,” Mr Liebreich said.
However, in rich nations where new renewable energy generators must compete with existing fossil fuel power stations the cost of carbon-free electricity can be higher.
The dramatic plunge in price had partly been produced by the economies of scale, with China in particular adding a vast amount of new solar capacity.
Ethan Zindler, head of US policy analysis at BNEF, said: “Solar investment has gone from nothing – literally nothing – like five years ago to quite a lot.
“A huge part of this story is China, which has been rapidly deploying solar.”
Beijing has also been helping other countries to pay for solar projects.
Bloomberg New Energy Finance have long lost whatever credibility they may have had, and simply act as shills for renewable energy interests, so it’s no surprise that the Independent want to quote them.
So let’s look at a few things they forgot to mention:
1) The solar project they highlight in Chile just so happens to be in the Atacama Desert.
Now I have never actually been there, but I suspect it might be one of the sunniest and driest spots in the whole world.
Also it will be constructed using Chilean labour working at much lower wages than in Britain.
In other words, the cost of solar power there has absolutely no relevance at all for the UK, or indeed much of the developed world.
2) They also forget to mention that the Chilean government is paying to install the transmission lines from the Atacama to the rest of the country, something that Bloomberg themselves reported in a separate article in August.
Therefore the real cost of using solar power is much greater than pretended.
3) Also, as previously reported by Bloomberg, the capacity of the new solar project is only 120MW.
If we generously assume capacity loading of 30%, we arrive at 315 GWh a year.
Last year, according to the BP Review, Chile generated 75.4 TWh. So the contribution from the Atacama project will be a paltry 0.4%.
4) The claim, that a huge part of this story is China, which has been rapidly deploying solar, is also nonsense.
Last year, again according to BP, solar power still only provided 0.7% of China’s electricity.
China is only interested in one thing, and that is exporting solar panels. That is why they are keen to cut prices and offering finance.