Thursday, January 31, 2013

QOTD

“Procurement costs for solar plants are falling. It is fair and appropriate for the tariff to be reduced accordingly.”

Masayoshi Son

According to Forbes magazine, Son's net worth is $8.1 billion as of 2011 and he is the second richest man in Japan, despite being the person who has lost the most money in history (approximately $70 billion in the dot com crash of 2000).

See Wikipedia

Germany hits 7.6 GW for 2012

Germany installed 7604.1 MW in 2012. December total of 330.1 MW will lead to a 2.2% degression rate in February through April. Interestingly, the last two degressions steps have been decided by surprisingly small margins. Once was lucky, twice feels like data manipulation.

Looking more closely at the data the December installation rates accross all brackets were healthy considering the time of year. Surprisingly the 5 MW+ bracket continues to show resiliency with over 50 MW installed in December.

Note:Average installation prices in January were 1476 Euro/kWp and trending down during the month.

Wednesday, January 30, 2013

Germany's Surcharge Problem

BAH! A pox on taxes!
Germany's Environmental Minister Peter Altmaier recently proposed ammendments to the FiT rules that would hold the FiT surcharge - currently at 5.3 cents/kWh - in check. While this proposal has merit Altmaier's subsequent suggestion that Germany impose retroactive taxes is a miserable idea.

One measure that may work would be to ask people to defer their contracted FiT for X months. You'd be paid the current FiT rate for your net production. After X months you'd go back to your contract but it will have been extended by X months. If you could get enough people to defer payment every other year you'd be able to hold the surcharge in check.

Another angle would be to look at time-weighted wholesale electricity prices over the last 5 years and extrapolate where they'd be without the FiT. Let's say the aggregated savings to Heavy industry has been a billion dollars. Raise the surcharge for the Heavy Industries so that you recover this billion dollars. I think this rule is actually rather important. The subsidy effect the FiT has on Heavy Industrial electricity purchases could easily be seen as unfair competition under WTO conventions.

The concept of holding the surcharge in check is reasonable. There do seem to be some options. 

Tuesday, January 29, 2013

Green Journalists and Carbon

Why do Green journalists talk about Carbon so much when they should be talking about the competitiveness of solar? At this point it's like calling into work sick when you're dressed to then nines and ready to dance a jig. The Carbon story was entertaining for a while... So is watching hamfisted monkeys playing Operation.  I think it’s time to change the music. This isn't about denying climate change - It's about denying the solution to climate change. Wake the fuck up you lazy pull it out the drawer fuckdoodles and start creating a better narrative.

Craig Morris earns exceptions points for:

"it's about renewables, not carbon"

Misreading the Bones

In electricity markets there is nearly always much more generation available than needed. We have the extra generation for peaking, outages and so forth. All generation options are not equal. Some options have a price of 25 $/MWh, others 50 $/MWh and others still more. Some generation options provide firm energy, others non-firm. 
 
I'd argue that in solar manufacturing we don't have an overabundance of players that can deliver a competitive price at Tier 1 quality. There's extra capacity but the price point is either too high or the quality level is too low for what the market really wants and needs. Analysts yammer on about manufacturing overcapacity but when you look at what's competitive we're not far from balanced.
 
I follow Germany closely. To be honest I see plenty of demand for Tier 2 and Tier 3 product so that contradicts my points here to some degree. That said I also see plenty of demand for quality and the price differential between quality and Meh isn't ridiculous. I don't think the market is suffering from over supply - it's suffering from under information. 
 
At the Power System Operations level reliability trumps price - not by much but it's a Kings beats Queens situation. We pay more for Firm Energy than Non-Firm Energy because we recognize there's a premium that comes with reliabiltiy. I expect the same will happen with photoelectrics. Solar is a 25+ year investment. FiTs and assorted incentive policies create unnatural pressure to rush into the market to take advantage of incentives. Once we remove the artificial sweeteners I'm convinced we'll see the reliability bias take over. Take away the hurry factor and people will make smarter investments. If we view manufacturing capacity with a reliability bias the overcapacity situation goes away. Conclusion... the banalysts are misreading the bones.

Saturday, January 26, 2013

Vitamin Z



I look in the cabinet for vitamin Z
The little white tablets that organize me
Take one for luck and two for glory
Then into the mirror and off to explore me

Dropbox Testing

Economics of Photoelectricity - January 2013