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Forget this Spin Too: Solar PV is not on the Brink of Being Subsidy Free

September 28, 2017

By Paul Homewood

 

 

You may have read press reports the other day about the first “subsidy free” solar farm, which was officially opened two days ago.

 

 

For instance:

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Britain’s first solar farm to operate without a direct subsidy opens today and is expected to generate enough power for 2,500 homes.

Clayhill solar farm contains 31,000 ground-mounted panels and occupies 45 acres of farmland previously used to grow wheat and rapeseed near Flitwick in Bedfordshire.

The farm is able to operate without a subsidy in part because of a steep fall in the cost of solar panels and also because it is linked to giant batteries that store power and release it at times of peak demand.

https://www.thetimes.co.uk/edition/news/clayhill-britain-s-first-subsidy-free-solar-farm-revives-fading-industry-sxzd36t5j

 

But it turns out things are not as quite as black and white as either the operator or the government would like us to believe, as GWPF explain:

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Hot on the heels of the uncritical media fuss around the recent Contracts for Difference awarded to offshore wind (for comment see “Forget the Spin: Offshore wind costs are not falling”) comes an equally misleading set of headlines falsely claiming that Solar Photovoltaic generation is on the brink of operating without market distortions and coercions. The truth, unsurprisingly, is quite otherwise.

Claire Perry MP, Minister of State for Climate Change and Industry, will today cut the ribbon at the Clayhill Solar Farm, a project that the Department of Business, Energy and Industrial Strategy (BEIS) has welcomed with a striking press statement entitled “Subsidy Free Solar Comes to the UK”.

Naturally enough this has generated a good deal of supportive press coverage, but, like the recent excitement about the low prices awarded to offshore wind, it sounds too good to be true and in fact turns out to be so.

The truth is that while the Clayhill scheme does include 10 MW of solar panels, its economic heart is comprised of five BYD batteries, apparently with a peak output of 6 MW and a storage capacity of 6 MWh of electrical energy.

These batteries will seek lucrative retaining contracts to provide system balancing services, probably under the Capacity Mechanism. Economically, Clayhill is not a “subsidy free” solar system, but a battery storage project providing rapid response power and using onsite solar as one of its charging options.

Thus, contrary to the absurd PR coming out of BEIS, Clayhill is in no respect an indicator of incipient economic maturity in the solar sector, and underneath the silly headlines parroting BEIS’s nonsense even the site’s developers and the Solar Trade Association both give the lie to the exaggerations.

Mr Shine, chairman of Anesco, which owns Clayhill, has very honestly admitted to The Times that solar farms are “still not economically viable” (“Clayhill, Britain’s first subsidy-free solar farm, revives fading industry”), and in the FT  he is unequivocal:

“‘It [the Clayhill project] wouldn’t pay with solar by itself at the moment . . . it needs the storage as well,’ said Mr Shine.”

Elsewhere in the FT’s story the Solar Trade Association (STA), alert to the possibility that the BEIS hype might put an end to any hopes of a renewal of subsidies to solar in the UK, is quoted as saying:

“We absolutely applaud them [Anesco] but government shouldn’t then assume the industry is away — it isn’t […] It is only going to be exceptional projects [that are built subsidy free].”

Indeed, the STA spokeswoman is further reported as observing with complete truth that “Government subsidies would still be required to support the majority of solar projects in future.” (“Solar power breakthrough as subsidy-free farm opens”).

If these contradictions were not bad enough for departmental credibility, there is behind it all a still deeper irony: the Capacity Mechanism and its market for expensive grid balancing options such as batteries only exists to address the undesirable consequences of the government’s cack-handed market distortions in favour of uncontrollable renewables such as solar and wind.

https://www.thegwpf.com/forget-this-spin-too-solar-pv-is-not-on-the-brink-of-being-subsidy-free/

 

The Times tells us about giant batteries that store power and release it at times of peak demand.

In fact they are Mickey Mouse affairs, only able to store 6 MWh. Given the solar farm capacity is 10 MW, that battery storage is not going to last for long.

If the storage gets a contract under the Capacity Market, as John Constable surmises, it would probably be paid a subsidy of about £150,000 pa (assuming a rate of £25/KW). This would be in addition to the revenue from any electricity sold.

 

The solar farm would produce in the region of 8760 MWh pa (assuming 10% loading). At a typical market price of £40/MWh, this would generate annual revenue of £350K.

In other words, the Capacity Market payment would account for 30% of the total revenue for the site. As John Constable correctly suspects, the whole solar farm would be uneconomic without this money.

It is no wonder the guy from the Solar Trade Association is worried people might get the wrong message!

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37 Comments
  1. HotScot permalink
    September 28, 2017 7:26 pm

    Meanwhile, 45 acres of farming land is engulfed by solar panels, and the clamour is that global warming will reduce productive farming land, and people across the globe are starving right now.

    So not only will our energy bills rise, our food bills will rise and productive farming land is turned over to more profitable means of land use.

    And our rabid communist labour party claims victory in the next election, and Theresa May describes how the left wing Conservative party supports capitalism.

    Is the UK the worlds political laughing stock, or is it just my imagination?

    • Tom O permalink
      September 28, 2017 8:12 pm

      Worse still, this is the same thing happening in countries that NEED extra food, but in those cases, the land is being turned into sources for bio fuels which they cannot even use. At least Britain can use the electrical generation, what little there is, that is.

      • Sheri permalink
        September 29, 2017 1:05 pm

        Yet global warming gets blamed for food shortages—the rise in temperatures, NOT the actual cause, rapid wealth via the government’s taxpayer pocket-picking and handing out of billions for useless projects. If global warming “causes” food shortages, it will be because of government graft, greed and lies. The actual temperatures will be totally irrelevant in all of this.

  2. saxonboy permalink
    September 28, 2017 7:32 pm

    Mr Shine ! you couldn’t make it up.

  3. keith permalink
    September 28, 2017 7:36 pm

    Yes, well this is another example like turning food crops into fuel, e.g. bio fuels. The lunatics are well out the madhouse!

  4. September 28, 2017 7:42 pm

    Why do they propose to charge the batteries with expensive solar electricity when they could do it cheaper off the grid when electricity prices are lowest. ? That is how pumped storage works.

    • September 28, 2017 9:16 pm

      They could do both, in theory at least. Solar is daytime only, cheap rate is nighttime only.

    • It doesn't add up... permalink
      September 28, 2017 10:11 pm

      It’s unclear exactly how the battery will be run, but if it is used as short term storage, then it would have to operate much as Dinorwig does – buying in baseload power at night, and supplying the grid during rush hour. You need to allow for output being only 80% of input, so if you buy at £25/MWh and sell at £50/MWh you’re only really getting a margin of £15/MWh – not £25/MWh. 15x6x365 is just £32,850 – and that’s being generous. Grid scale battery systems including their electronics cost in the order of £500/kWh of capacity, so it’s a paltry return on a £3m investment.

      Most grid batteries are in fact competing in the enhanced frequency response market, which helps to smooth supply/demand imbalances in the grid on very short time scales measured from seconds to minutes (which is why they don’t need more than an hour or so of capacity relative to output). The most recent tender for EFR cleared at £7 to £12/MW/h of service provided. Assuming a full year of 8760 hours, this would be more remunerative at 7 to 12x6x8760 or £367,920 – £630,720p.a., less penalties for underperformance and net power purchase cost, which would be of the order of 0.5% of capacity, or about 263 MWh at say £40/MWh.

      • richard verney permalink
        September 29, 2017 10:29 am

        Unfortunately, I do not fully understand your comment, and I would appreciate a little more clarification.

        Obviously, pump storage has to buy in energy so as to fill the high level reservoir. It cannot fill the high level reservoir from the energy it produces on discharge to the lower level holding.

        On the contrary, the solar farm can charge the battery, during the day, from its own produced solar energy. It therefore does not need to buy in any energy to charge the battery (unless of course it wants to charge the battery at night and that could be a financially viable option depending upon energy pricing at any given moment and if it does this then, it becomes two separate plants, a battery back up system, and a solar farm but just on the same site).

        What this solar farm cannot do is recharge the battery at the same time as it is producing and selling energy to the grid. It can either sell energy to the grid, or it can charge its battery, but not do both at the same time.

        I guess it makes its decision on how to juggle with its own energy production depending upon the value/price of energy at any moment.

      • Sheri permalink
        September 29, 2017 1:10 pm

        Richard: How is the cost of building the solar plant that charges the battery different from buying the energy from the grid, other than the company with the solar plant and batteries gets ALL the tax breaks, profits and other perks? They still spend money to build the plant, unless the government does that for them for “free”.

      • It doesn't add up... permalink
        September 29, 2017 2:14 pm

        Storage is inefficient – you get out less that you put in. In the case of Dinorwig, it’s about 75%. There are three ways to calculate the economics: either you can cost the power for pumping as 12GWh at say £25/MWh, which is £300,000, and the value of output as 9GWh at £50/MWh, or £450,000 for a profit of £150,000 or £12.5/MWh on the purchase volume/£16.67/MWh on the sale volume – or you can take 75% of the output price (£37.5/MWh), subtract in input price to get £12.5/MWh of input and £150,000 of margin – or you can take 100/75ths of the input price (£33.33/MWh) from the output price to get £16.67/MWh margin on the output of 9GWh, which is again £150,000.

        For the solar farm, if it chooses to store its own production then it loses the possibility of selling at the market price at the time it stores energy. It may be forced to store production (see the comments about Coltishall below), but unless this is so, it is likely that the cheapest electricity will be overnight, when demand is low.

        HTH

  5. Francis Bowkett permalink
    September 28, 2017 7:46 pm

    Interesting coincidence, Paul. This morning I attended a “community meeting”. Here is the first paragraph of the meeting notice which was published in our local paper.

    “Amp is a global supplier of clean energy infrastructure and in partnership with Alectra Energy Solutions is considering the development of an energy project located in the City of Vaughan. This project will support the reliability of Ontario’s electricity system.” (Vaughan is a city just to the north of Toronto, Ontario. Alectra is the electricity system operator for Vaughan and other communities in the area.)

    The technology that Amp is proposing seems to be the same as that commissioned at Clayhill. During the presentation by Amp, and in response to questions, there was no attempt to characterize the installation as being able to provide backup power. It’s only described purpose was to “smooth out” the variable nature of electricity provided by renewables. I asked a question about the battery technology (lithium-ion) and was told they would not be using Tesla batteries but likely either LG or Samsung.

    Two other points: 1. The meeting was scheduled for 0900-1200. I arrived about 1030 and the only individuals in the room were the three Amp representatives. There was no evidence that anyone had sat at the approximately 15 tables, each with seats for 6-8 people. There were no used coffee cups in the room. 2. When I indicated I was a meteorologist (in response to a question.) I was then asked what I thought of renewable power. My response was that I consider it the biggest scam ever perpetrated on human beings. Interestingly, that did not end the conversation but, let’s say, the tone changed!

    • Sheri permalink
      September 29, 2017 1:11 pm

      Good job!

  6. Athelstan permalink
    September 28, 2017 8:00 pm

    “expected to generate enough power for 2,500 homes.”

    ?

    so long as all the homeowners don’t all boil their kettles at the same time?

    candle power equivalent? and erm tthat weasel what if and maybe…………”expected”

    I just cannot get my head around this arrant stupidity, and aren’t they [BEIS et al] really taking the piss, surely……… they must be?

    All that money for moonbeam tech and a chocolate teapot and as commenters above point out, all that good arable land gone to make way for it.

    FFS, the green loonies are running the shop.

    • Gerry, England permalink
      September 29, 2017 12:47 pm

      You forgot plug in their EVs to charge up, and looking ahead to all electric heating, turn the CH on.

    • Sheri permalink
      September 29, 2017 1:14 pm

      Since people are virtually ignorant about electricity (which is conveniently invisible and not measured easily), any lie sells. Email scams sell electricity from lightening and people buy into these things. Perpetual motion machines sell. Complete scientific illiteracy makes life very, very easy and lucrative for every scammer out there. The government encourages this illiteracy because the government is one of the scammers. One can sell anything to people who have the understanding of cave men but live in modern society.

  7. Broadlands permalink
    September 28, 2017 8:47 pm

    “Clayhill solar farm contains 31,000 ground-mounted panels and occupies 45 acres of farmland previously used to grow wheat and rapeseed near Flitwick in Bedfordshire.”

    Can we race to plant solar farms where food is grown while some are anxious to plant trees and others want to plant biofuel sources? This sounds more like the “Funny Farm”. The green loonies do seem to be in charge.

    • richard verney permalink
      September 29, 2017 10:32 am

      And what area of ground is occupied by an efficient Gas powered generator, and how much power does an efficient Gas power generator produce 24/7?

    • dennisambler permalink
      September 30, 2017 9:16 am

      Think of the panel cleaning jobs generated…

  8. September 29, 2017 5:53 am

    What a scam. I have been fighting one of these “energy barn” proposals in Devon. They need to be sited close to a 11kV or 33kV substation, which often means in the middle of the countryside.

    The 6MWh of storage compares to 9.1GWh of storage at Dinorwig, Of course is useful as it provides inertial support to the grid whereas these battery facilities provide instability at thre local network level.

    • September 29, 2017 6:15 am

      Of course Dinorwig is useful …..

    • Dave Ward permalink
      September 29, 2017 9:25 am

      “They need to be sited close to a 11kV or 33kV substation”

      The 60MW (or thereabouts) solar farm at the former RAF Coltishall site near Norwich, was originally going to need a dedicated HV cable to the Grid substation the other side of the city, as the local 11/33kV network couldn’t handle peak output. To the best of my recollection some “tweaking” of the farm’s design meant this was not, in the end, required. But if the developers were made to provide their own battery storage (to smooth the 24hr output) such farms would place far less strain on local networks in any case. But then they would no longer be highly lucrative “subsidy” generators…

      • It doesn't add up... permalink
        September 29, 2017 1:53 pm

        That’s an interesting observation. You could regard the added connection cost as reducing the value of peak levels of output that couldn’t be handled without it. Using a battery to smooth out between high noon in summer and late afternoon wouldn’t be cheap either – you would be diluting its cost over only part of the day and part of the year. The alternative is to sacrifice peak output (and therefore total output) by angling the panels sub-optimally.

    • richard verney permalink
      September 29, 2017 10:35 am

      Are you sure of your figures?

      Per Wikipedia:

      The Dinorwig Power Station (/dɪˈnɔːrwɪɡ/; Welsh: [dɪˈnɔrwɪɡ]) is a 1,728-megawatt (2,317,000 hp) pumped-storage hydroelectric scheme, near Dinorwig, Llanberis in Snowdonia national park in Gwynedd, north Wales. Its purpose is not to help meet peak loads but as a “Short Term Operating Reserve”, to provide a fast response to short-term rapid changes in power demand.

      • It doesn't add up... permalink
        September 29, 2017 12:19 pm

        Don’t confuse the amount of storage with the rate at which power can be generated. The 9GWh of storage can last about 6 hours when generating at 1.5GW. It takes about 12GWh to fill it from empty, for a round trip efficiency of 75%. In practice, it mostly generates at well below capacity, but provides power that can be ramped up or down in seconds to keep the grid balanced as we switch things on and off and as gusts cause variations in wind output or cloud fronts dimming solar farms. It will be used flat out when supply is tight in a winter rush hour.

  9. Tim Hammond permalink
    September 29, 2017 8:38 am

    I remember reading Kafka as a teenager and wondering what it felt like to be trapped in bureaucratic insanity…

  10. Bitter&twisted permalink
    September 29, 2017 8:55 am

    Smoke and mirrors- that’s the greens and subsidy-suckers modus operandi

  11. Athelstan permalink
    September 29, 2017 9:07 am

    O/T but in a similar fug of eco mania and the law of unintended consequences…………………. yikes wot anovver volte face sez de orforitees innit dey is go, mind you, I think that Londoner’s should banish him and his bans.

    The green agenda is all about moolah, patronization, aberrant, overuse of onerous exercising of power through diktat and virtue signalling in excelsis Mr Khan like all his ilk are so good at sanctimony and pious nebulosity…

    • Sheri permalink
      September 29, 2017 1:19 pm

      How does one banish the extremely rich and powerful? Many of these companies and individuals are billionaires who can buy the press, the schools, whatever they want. It’s obviously a myth that democracies are run by the people—they are ran by the press and the billionaires. Other than some undesirable methods involving breaking the law, how does one stop the rich and powerful that were allowed and encouraged to run countries as they want? The wolves were invited to run the flock of sheep—now how does one correct that?

  12. September 29, 2017 9:28 am

    My earlier comment from Sep 26th

    Like Hornsea2 the trick is that it is piggy backing on the back if infrastructure paid for by a megasubsidised existing farm NEXT DOOR

    The Report quotes Richard Black (tricky GreenBlob PR man)

    Unfortunately the Times bottom editorial also waxes lyrical …#GullibleOrCorrupt

  13. September 29, 2017 9:35 am

    OT Will Ladbrokes take my money on a bet that Green NGO’s like WWF were involved in planning BBC2 #RussiaWithSimonReeve last night ?

    Seemed a tour composed of cherry picked DramaGreen causes
    So in effect a hour long advert for GreenBlob
    My comments over on bBBC

  14. richard verney permalink
    September 29, 2017 10:39 am

    Solar will only be subsidy free when it can supply energy to the grid at the same price as the cheapest price for coal, or the cheapest price for gas (and on the basis that the price for coal and gas is calculated on the basis that their prices have not been artificially escalated by the carbon tax put on them by the government)

  15. Coeur de Lion permalink
    September 29, 2017 12:00 pm

    Latitude and cloudiness mean UK is unsuitable for solar. End of.

    • Sheri permalink
      September 29, 2017 1:20 pm

      Stop injecting reality into these discussions!! Besides, it’s not about generating electricity, it’s about generating more wealth for the billionaires out there. The UK may be suitable for that.

    • September 29, 2017 4:22 pm

      Have you ever seen a map of worldwide solar insolation.

      Plus or minus 40 degrees latitude it is yellow to brown. We are in the green to blue area.

      I have previously posted on this site that I have a letter from the then DECC that the first 1,100MWs of installed solar capacity in GB ( worth about 110MWs at the solar load factor of 10% ) will cost ( as the FiT price was over 40p/kWh ) , and I am not joking, £10.5billion over the life of the contract. Feel free to write to DECC’s successor for confirmation.

  16. September 29, 2017 2:13 pm

    Reblogged this on Climate Collections.

  17. September 29, 2017 4:06 pm

    A bit off topic, perhaps, but where are all the animal and plant lovers, the ecologists and wildland preservationists when it comes to filling hundreds of acres of beautiful nature with black plastic?

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