27 Comments

Great job David

Solar above the 45th parallel is even more inefficient, especially for grid connected ‘farms’ where without the massive subsidies they receive, they have no business case (although that doesn’t bother the green zealots)

China et al (BRICS) will hoover up global silver deposits in their quest to sink the West (China & Russia already hold 3rd & 4th place global reserves), as they’re doing with fluorspar needed for EV batteries

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IBC (interdigitated back contact) cells can use aluminium instead of silver, as the contacts are on the back of the cell.

They are currently a little more expensive than TOPCon, because PERC production lines couldn't be adapted to make them so production volumes are small. They also can't use reflected light on the back surface of the cell as PERC and TOPCon can, so efficiency is only 25 percent-ish to TOPCon's 26-ish. On the plus side, their performance at high temperatures falls off more slowly than TOPCon's.

There are always substitutes. Personally, I'm hoping that the stability problems of perovskites can be solved, so that PV panels can be ink-jet printed on rolls of nano-textured mylar. That's taking a while, though.

None of this is to gainsay your opinion of the Economist. Remember this, and also remember that it knows as much about everything else as it does about European power prices.

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I read that Economist article and just as a piece of astoundingly naive analysis on the sustainability of the airline industry industry caused me to cancel the FT, this case of sunspots on the brain, caused me to cancel the Economist. As I read it I understood as many do, the confusion of fast growth with exponential effects, but the shocking and wilful emission of EROI. I’d think a copy of Vacaville Smil’s “How the World Really Works” should be compulsory reading for the new cabinet and its civil service enablers, but no doubt they;ll be reading “why I am no longer talking to White People..” instead

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Vaclav Smil!

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Excellent points; very helpful charts. Your commentary on silver is also helpful to me as an investor.

On wholesale value of electricity being beaten down by its own solar and wind energy generators' oversupply, I think the public (and ignorant politicians) are confused by claims like the Economist's that energy prices are going down. The word that this does NOT mean their electric bills will go down is not being explained often enough. Thanks for your post and I hope it gets widely disseminated. It wouldn't hurt to give a little more easily understood explanation on the wholesale vs retail in future. Great point that the renewables business couldn't possibly survive without subsidies and rate increases.

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To most people who are used to paying for petrol to run their vehicles they can see that sun and wind are free so its not unreasonable to make the connection that electricity prices should fall and thus not see media articles as being wrong. Also many people will say to me that new things cost money to develop before they can stand on there own two feet but what isn't cutting through is the fact subsidies are not only still required but now at an increasing level to sustain the lie. The other thing people just don't understand, and why should they, is that generation dominated by unreliables needs a huge amount of hands on management by the transmission operators to keep it stable which is costing billions. again there is no cut through on the scale of these additional costs. The problem is these costs are mission critical for example it was a single lighting strike that caused the 2019 grid collapse that was only arrested by low frequency load shedding. The problem with more and more asynchronous generation and hidden embedded generation is that we are creating the most complex of systems with so many permutations of interactions that you can be sure there will be something they've missed.

Having worked alongside grid engineers i can't believe they don't realise how imperilled the system is becoming so i imagine their voice is supressed by the financial opportunity that the owners can see here to exploit governments obsession with net zero. As I've said before on this forum I'm agnostic over climate change (mind you i will use Davids term Lukewarmer) but if you need to reduce carbon emission then it needs to be done in a way that ensures you deliver lower emissions without forcing up the price disproportionately. The current structure of subsidies for generation has totally distorted the market and made it financial engineering led not electrical engineering led.

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As a professional Electrical Engineer and HV Project Manager in the power generation sector for 40+ years, I’ve seen first hand the wilful and negligent sacrifice of our once stable grid to the renewable gods - believe me, it’s far worse than the public are informed and is the next Govt scandal coming in the early 2030’s, unless the direction of travel is changed - having Energy Ministers bereft of engineering competence, yet openly vulnerable to green socialist activism, is a recipe for disaster

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Thank you, good read.

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There are several important missing issues here. First, the price of Silver has been suppressed for decades because, in addition to it's industrial use, Silver is also a monetary metal and tends to move together with Gold. The Central Banks, in particular the Fed, don't want PMs to move up too fast in defense of the USD/Petrodollar system, so the prices of PMs are suppressed on the Comex paper Futures "markets" by the Fed, using the Bullion Banks as Agents.

Silver is the ONLY commodity which is still almost half of its ATH reached decades ago. What else could explain that other than highly concentrated net short Comex positions by mostly 4 (Four) Bullion Banks? And why has CFTC, the alleged "Regulator" never done anything about such skewed trading anomalies?

And the SIlver Institute has not only lied about the present supply deficit in Silver, it has also lied in arrears by changing the HISTORICAL demand data to make the current projections of growth demand appear much smaller in percentage terms. WHy would they do that?

The only explanation to ALL of the above is that Silver is the most undervalued commodity in the world and its price is about to explode higher as physical metal (as opposed to paper contracts) is VERY scarce to find in quantity.

This will ultimately NOT impact the solar industry because the Silver content is small but, in aggregate, the demand for Silver will take off as will the price.

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David

Thank you for highlight the Microgeneration cost data for solar installations which I hadn't come across before. It tells a story that is completely at variance with The Economist's absurd projections. We should remember that the cost of solar PV modules in $ per kW of capacity has fallen pretty consistently and sharply in real terms since the mid-2010s. However, the MCS figures shows a much smaller reduction in inflation-adjusted installed cost followed by an increase from 2022 onwards (like everything else in the electricity sector).

This reinforces what I argued in my REF paper on solar power - i.e. that it is the non-PV elements of solar costs that will dominate in the medium and long run. Things like civil works, electrical kit, installation, etc. Those are not going to decrease because they are subject to Baumol's disease - labour costs that increase with labour productivity that does not increase (as rapidly). As a consequence the capex & opex costs of solar power will inevitably start to increase in real terms. At which point The Economist's projections will look even sillier.

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Since the 2010's as you mention solar panels have become cheaper, but let's not forget why. Back then the US and Germany had an industry manufacturing solar panels. Then the Chinese moved in stole the technology and stole the market.

We cannot compete with forced and slave labor, (The Uighur Act didn't seem to hurt them.). Now they have flooded the market in anticipation of the US manufacturing our own. But when you look at the companies setting up shop here you see many of those same Chinese panel manufacturers are the here collecting our subsidies to assemble the panels here. When this happens they won't be as cheap - they can't bee the labor will cost - unless they import their own workers too!

Does anyone but me see a problem with this?

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Don't forget the cheap, coal fired power.

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Also the panels may have dropped in price but the steelwork they are supported on the cables that connect them to the inverters that convert the power and the transformers and switchgear that connect it all to the DNO certainly haven't gone down in price.

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True. In my previous calculations the cost of PV panels accounted for less than 20% of total capex costs in 2020 (this was for utility scale installations). That may be down to 15% now. While micro installations are always more expensive than much larger plants the figures are consistent with a capex cost of around £1,000 per kW of capacity at scale. Solar plants will not be viable in the UK without subsidies at those costs. DESNZ claims that the capex cost for new plants is around £600 per kW but that is fantasy.

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But I'm assured that solar is cheaper than other forms of generation. I mean I read it in the Grauniad so it must be true. /sarc

The obvious thing is to insist that solar get £0 per kW in subsidies and see how much gets built, but we all know what the answer to that will be

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As many have pointed out, most commentators have zero practical or engineering knowledge and even less common sense. It is true that solar power can be relatively cheap under ideal climate conditions such as Atacama desert in Chile or the Sonoran desert in Mexico, but, oddly enough, no-one wants to live there. By the time you have paid the real costs of transporting the output somewhere useful, it is no longer so cheap. On top of which, deserts are pretty hostile places so that the chances of a solar plant operating at full output for 30 years (as assumed) are about zero.

This is a core aspect of our current mess. Ignorant - and stupid - policymakers and commentators are persuaded to act on the basis of cost figures that are little more than fantasies. All the rest of us have to live with the real world consequences of these delusions. In times past, the response would have been to say "there, there, dearie ..." and head for the nearest exit. That is, of course, what any organisation with a choice may do.

People should read the classic book "Exit, Voice and Loyalty" by the brilliant political economist Albert O Hirschman.

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Let's not forget that a major reason for the new transmission line in the SW is to handle solar surpluses in Devon, Cornwall and Dorset. It will not be taking anything from Hinkley Point for a decade, and the load on the existing lines has been reduced by the closure of Hinkley Point B, although that loss leads to regional imports in winter in particular.

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The fascination with geometrical progressions goes back to Malthus, natch. It NATURALISES change, frees it from human agency, recessions, etc. One can see this in breezy prognoses about AI, eg.

Here's my 2014 review of an influential book on IT that exemplifies this contradiction-lite, Pollyanna approach, very typical of the US, which never had to struggle vs feudalism... https://www.spiked-online.com/2014/07/11/its-not-the-future/

Yes, it's about IT, not energy. But The Economist betrays the power of this oh-so-sophisticated thinking, which now extends to... photovoltaics.

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Thank you for another fascinating Sunday morning read David.

This week has been bountiful for animals like me, eager to find out what's really going on with energy. The latest article on the Doomberg substack is "No, Solar Isn't Cheap" https://newsletter.doomberg.com/p/no-solar-isnt-cheap and from the Energy Bad Boys only yesterday: "Why Nuclear is Cheaper than Wind and Solar" https://energybadboys.substack.com/p/why-nuclear-is-cheaper-than-wind all shining light from different directions.

Anyone wishing to look at current commodity trading prices may find this useful: https://tradingeconomics.com/commodities from which we can see silver is 37% up on the year, against gold at 25%, copper at 25% and lithium, down 70%. Aluminium and tin are up 19%. Copper and lithium puzzle me and you may wish to delve - it suggests that lithium has been found to be plentiful, or recycling has been done on a big scale (!?), or, taking it with copper, the energy transition isn't quite what some say or think it is.

I've witnessed a wide division on mineral requirements for a wind, solar and battery world, from miners who say it's major, and barely or not remotely practical, to those for whom it's the elephant in the room, to be covered with a dust sheet. Then there are academics who tell us that, for example, there's plenty of lithium in sea water, reminding me of a motto on the office wall of an extremely able former boss of mine (an engineer): "Nothing is impossible for those who don't have to do it".

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Mined commodities subject to uncertainties in the level of demand are prime candidates for speculative cycles. If buyers anticipate a shortage they will try to tie up forward supply, but bidding against each other will drive up prices. The high prices entice fresh projects to be developed, but this takes time. It also serves to dampen demand as the prices paid for forward supply roll into goods supplied to the market. Lower demand may lead to oversupply and stockpiling at manufacturers. As fresh mining projects come on stream there is a large supply surplus but limited demand until the stockpiles are worked off. Prices crash, with miners competing for cash to help defray their investment costs. Mines with higher operating costs are unable to recover them at market prices, and so shut down. Some may even go bankrupt, allowing the assets to be acquired at fire sale prices by stronger players. Projects not yet completed or even started get halted. Balance is restored to supply and demand and prices stabilise. Then the stockpiles run out and manufacturers return to the market, creating an impression of rapidly rising demand, and the cycle repeats.

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I don't really follow Lithium, but I think actual demand didn't live up to the forecasts and more supply came online. Copper is trickier, with new mine supply lagging and demand rising sharply to meet the demands of the the so-called energy transition.

I saw the free part of the Doomberg piece, but I don't pay to see the rest.

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Lithium miners got sucked into the narrative that it was going to be batteries with everything and expanded capacity to get a slice of the action but that is proving to be flawed as take up is down across the board even in China. Of course they will be banking on a ramping up of incentives to bail them out now the EV uptake is falling behind what the environmental zealots tell them is needed to save the world.

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I'm so old that I can remember when the Economist (and FT) were 'must reads' for any serious business person. Today they're just another achingly woke Guardian-lite, written by teenage scribblers, largely powered by ChatGPT.

It's not as though PV is even a solution to CO2 emissions (if you think that's something that needs to be reduced). They can be useful in places like Andalucía or Arizona, where peak demand (for aircon) coincides with peak sunshine (and there's a lot more of it than we get in the UK), but at temperate latitudes their output is largely out of sync with domestic demand.

Even worse - if you search for "EROEI PV" you'll find scientific papers* pointing out that (at temperate latitudes) they struggle to generate over a working lifetime as much energy as was consumed in their manufacture (taking into account mining for minerals etc etc). And given they're mostly made in China, using electricity generated from burning coal, they're not even reducing global CO2 emissions very much.

Very, very effective at transferring money from the pockets of poorer people to those of the very wealthy, though!

* attacked by the usual "emergency green rebuttal" teams, but mostly on the basis of a few typos.

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I don't believe that solar number for one other reason.

Where will they put the panels? Sure there are places to put them but it gets harder as panels run out of obvious brownfield sites and start needing to get sites set in more environmentally sensitive areas. In fact we're already seeing that in California where they are replacing slow growing joshua trees with fields of solar panels and desert lovers are upset. Plus there's the requirement to connect the panels to the grid which means lots of transformers and power cables.

And then there's the question of who will install them (safely)? This isn't something that is easily automated so that level of solar panels being installed implies several multiples of the current number of installers

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There is going to be a lot of kick back if Millibrain thinks he just cover middle England with them and his new shoe in scientific minister, if hes worth his salt, should be out rightly objecting to them being installed in Scotland given the low capacity factor that far North. By all means mandate them on roofs of industrial warehouse and other similar large flat roofed spaces upto a certain latitude albeit even thats not really sensible but at least better than stealing agricultural producing land. Mind you i can't get they don't see the contradiction to want to energy sufficient but not food sufficient.

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A lot of the politicians/activists pushing netzero are clearly innumerate and unable to do basic sums. You would have thought that the civil service would have done the sums and presented them to ministers but that appears to not have been the case. Indeed one gathers that the civil service has been firmly behind the netzero push. It's all going to go horribly wrong but it'll cause lots of misery as it does

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Incontrovertible, David! Well done!

When experts use the term "exponential", what they generally mean is "pretty fast, at the moment".

Subconsciously, they are also transfixed by Moore's Law, even though Gordon Moore never used the word "law".

NB: Tin and aluminium also vital to PVs.

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