Solar power still better than nuclear in the fight against climate change
The Guardian, 24 June 2013
George Monbiot claims in a gentlemanly article to have won our £100 bet, made three years ago, that solar PV would be at grid parity – the same cost as conventional retail electricity – by 2013. The very good news is that over the past three years, the actual average price of installed residential solar PV has come down some 60%, while the cost of new nuclear has gone up 70% and is still rising.
I base the former on the real achievement at my company Solarcentury and the latter on a recent compilation in Le Monde of data for EDF's Flamanville EPR reactor, the type of nuclear plant nuclear advocates like George want to foist on the UK economy at great cost to the public, starting at Hinkley Point.
The slightly bad news is that I probably lost my bet. Solar-industry people have been e-mailing me pleading that I argue the toss, pointing out that solar markets like the Netherlands are already at grid parity, and that by using somewhat lawyerly points I can defend my ground when it comes to the UK. I can't be bothered, because anyone studying the pattern of play in any detail will know that if I lost, it wasn't by much.
By way of illustration, read this extract of what Dave Edwards of Solarcentury said below George's article. I can't better it:
Grid parity has a clear and widely accepted definition: when the levelised cost of solar (falling rapidly) crosses the cost of grid electricity (rising rapidly). The average retail price of electricity in the UK is 14.5p according to EST or Decc's own statistics. Plenty of anecdotal evidence would suggest higher. ….Levelised cost of solar … is 15.3p, at a 5% discount rate. If you used the risk free rate of 3.5%, as some energy economists would argue you should, it is substantially less. So in my view, you [Monbiot] win this battle, if only by a matter of months; but PV is winning the war, at least on paper.
Lest anyone think that this is an employee who has fallen victim to the prejudiced view of his chairman, let me bring in consultancy McKinsey, better known for its work for Big Energy than support of the solar industry. In its 2012 report Solar Power, Darkest Before the Dawn, their team concluded that big as the solar cost-down had been over the period in question, costs will continue to fall at about 10% a year, some markets already are at grid parity, many more will be by 2015, and that by 2020 fully a thousand gigawatts of solar PV could be installed around the world. This, they said, will change the face of the energy industry. I could have picked similar statistics out of reports from other old economy stalwarts such as Bloomberg, UBS or Lazard. Solar PV will be a key player in national energy mixes beyond 2020, in other words, including in the UK. EDF still won't even be close to connecting their Hinkley Point version of Flamanville by 2020, by their own admission, even if they get the go ahead from the government for the huge subsidies they will need.
George says I wouldn't agree terms of the bet with him. I didn't do so because he for his part never accepted my multiple invitations to come and visit Solarcentury, see solar engineers at work, and hear their voice on this. Had he done that, maybe his perspective might have been adjusted a little, or even changed.
And so to George's thoughtful point that we have both lost the bet, because the government is so bad on this and related issues. We are almost on the same page here.
Clearly people like environment secretary, Owen Patterson, whose opinion he cites, are delusionists, intent on betraying their country's long-term interests in defence of their dangerous belief system. But we have to hope that not all government ministers are in that camp. Some, Conservative and Lib Dem, do seem to be fighting for sanity. And Labour is showing way more form on these matters in opposition than it did in government.
There is all to fight for, still, with the varied allies we have in the complex civil war that is the struggle to survive climate change. Solar and other green industries really could be cutting emissions meaningfully while taking disenfranchised young people off the streets and into fulfilling jobs.
So for my part, £100 is on its way to my charity of choice, SolarAid, with no regrets. For his part, perhaps George would like to visit Solarcentury now? We are open tomorrow. Hinkley Point C won't be for many years, if at all.