The more we move into renewable energy solutions with our customers, the more it sets us thinking about the way industry and society interact with the world. We're privileged to be able to see new technology as it emerges... what the world needs now is for people to make their best efforts to embrace that technology.
Our foremost blog writer on this topic is Dr. Petri Konttinen, Luvata's renewable energy expert who will be appearing here regularly.
Wednesday, September 2, 2009
Information is pouring from the solar market - but what is the reality?
Daily PV and weekly solar thermal news tell about some positive and some negative issues. The same goes for companies, projects, financing and government policies. But what is the reality in the field? New government support policies take some time to become effective, and in the meanwhile companies have to struggle with their costs and try to keep cash flow stable. Some manage to do this better, some worse.
There seems to be only one issue of which the news have concensus about: Prices are going down, meaning that the grid parity for PV will be reached sooner, and solar thermal systems will become more and more economically feasible. However, I hardly see any good comprehensive analyses of the status of the full market or prognosis for this year.
For example, I received “Solar Heating Industry Review 2009” by Renewable Energy World Magazine Issue July-August 2009 yesterday. After reading it, I was not any wiser that before. I mean that those companies who are doing well, were claiming to have sold or manufactured so-and-so much in 2008. The others were reported about their manufacturing capacity. That is not any information in this sort of market situation! What I wish to see, is a clear analysis of the market, the driving forces and the positive and negative issues for the whole sector. I still wait to see such an analysis for 2009 both for solar thermal and PV, and we are living now September. Wake up analysts, there’s a call for you!
Monday, April 27, 2009
Energy is first and foremost politics
What never stops to amaze and to some extent amuse me is that, no matter the nation, time, or energy scale - whenever one truly analyses the energy speeches of politicians and other decision-makers, there is one conclusion: they are talking politics.
Take Finland for example: a few years ago wind power was considered as something "nice, but too expensive and not suitable for large scale applications for Finland". Now, with the tightened renewable energy demands from the EU, the government is demanding huge amounts of new wind power. On another occasion, according to the newspapers, our prime minister, Mr. Vanhanen commented that nuclear power is not suitable for developing countries - they should focus on wind power. But for Finland he found nuclear energy very suitable.
Why did he ignore the most ideal power source - solar energy - completely?
What bothers me with politicians is that they are most likely thinking about the next election period meaning four to six years ahead. The time needed to fully develop a new energy source from the first innovation into a global-scale commercialisation takes typically between 50 and 100 years, so called long waves in energy evolution.
Yesterday, I was in discussions with an experienced energy specialist. He said that in Finland people and administration in general have absolutely no (or very little at the best) idea how fast renewable energies are progressing in other countries. In Europe, people who have worked in this field have foreseen this happening, but it has not lead to sufficient national actions except in biomass. I would like see change.
I have been developing an idea for PV deployment in Finland outside the well-established summerhouses with a "small" feed-in tariff. In this idea, the government would decide how much funding is wanted for full PV support, i.e. how much more every consumer of electricity would be willing to pay to develop the PV market in Finland. The government will soon propose feed-in for wind power, and preliminary intelligence suggests that the guaranteed fee would be some 8,3 c/kWh, including normal market price and a premium.
In my model for PV, the total funding per annum could be some 1 - 10 million €, just to start with. The feed-in tariff would be set in a level, where the PV system pay-back time in Southern and Middle Finland would be some 7-10 years. It would be guaranteed for 20 years, so it would need to be somewhat higher than in Germany. It should be distributed geographically so that the money would not all go into one large installation in the capital area. In this way the early adopters would have a chance to set up economically feasible grid-connected PV systems, and they would set an example for the rest of the area around them. We have some such private people and companies who have done this, but they are few and far-between.
With this model we would initiate more interest in PV, get more domestic business and new companies evolving, and eventually build a Finnish solar cluster.
In principle, is this idea correct? The answer is “yes” if it increases the use of renewable energy. Is it politically correct? The answer is “yes” if it increases votes.
Thursday, April 2, 2009
Finally the PV hype seems to be over - for now - and we are in business!
I don't say that we are back in business, since in my opinion we were never so far in a normal mainstream business. After the huge %-growth per year for the past 15 years, the PV industry has to face the hard reality the same as everyone else today. Sure, there will be fadeouts and consolidation, and many good ideas started will not have a chance to flourish to their full - for now. But, if such a recession had to come, I think it's better it came now, and not after five years from now. Why? Because it's better to drop back from hype to reality when we are flying at 1,000 meters and have a chance to land somewhat safely than to make a totally uncontrolled spin and crash from 10,000 meters.
Another positive thing is that the prices of PV modules and systems are forced to go down, which closes the gap between the grid parity faster. My feelings from both the PV TEC in Munich and EPIA Annual General Meeting in Frankfurt were that things are moving into a more healthy direction. I had very odd gut feeling at the PV Valencia Fair before the global turmoil started, since there seemed to be no tomorrow and everyone was talking about how the huge growth just continues and continues.
I admit, it's easy to be wise afterwards, but in my opinion today's global PV business needs to go through a tight cost-saving and business model re-evaluation. In the EPIA AGM a huge majority of us voted for continuation of the SET 2020 Study for making the milestones and setting directions for PV to become a mainstream electricity source for the near future, where the specific target is to provide 12% of the European electricity by PV by 2020. And I firmly believe, that because of the global crisis we are in a stronger position to make this happen than what we would have been without it.
The earlier PV industry was in a way like a lazy, fat cat lifted from one basket (country) to another. It did not need to hunt actively nor think how to survive in a tough situation. That kind of attitude leads in lazy minds too, generally speaking. Now, when most of the countries are making large recovery packages, we have a chance to bring out the streamlined and hungry PV cat saying; "Look, we are the future with a proven history. It's just a matter of time when our turn comes, let's make it even faster with smart actions". For me, the EPIA AGM was the first public gathering, where we focused a lot on that what needs to be done besides and after reaching grid parity for getting access into the main electricity markets.
At the end of the day, it's not that we need to get to the grid parity and expect that everything rolls smoothly after that. The hard work of past decades in R&D, manufacturing and business model development is going to reach that important milestone soon, in a few years in the best locations. But, another important work awaits us from there: How to change the opinion; public, utilities, governments and so on to believe that PV is not marginal, it is and will be the mainstream just like the fossil fuels are now. This is the next challenge we need to boldly take together.
Wednesday, March 4, 2009
Can Obama push green energy through in his budget?
What impressed me most about President Obama’s budget proposal on Feb 28th was that he said the budget will make real and dramatic change, and that there is a strong opposition gearing up for a fight. His reply to them was: "So am I".
However, during the last few weeks there has been debate about his green energy goals and the budget wrestling is just beginning. Earlier analysts were saying that US congressional negotiators may possibly drop the $7.7 billion planned for renewable-energy grants in the economic stimulus legislation, simply "if there’s a fight, they’re not going to hold-up the bill that stops the Great Depression for a wind credit.”
I wonder if the oil and gas industry is strong enough to dilute the green energy portion of the budget? This would be a huge disappointment to the whole global industry, since we are all looking at the USA to finally lead the way.
Luckily, the Middle Class Task Force had their first meeting in Philadelphia on Feb 27th, and they were focusing on green jobs as a pathway to a strong middle class. Hopefully they get their message through to congress and into the budget. Denying green energy the take-off it needs may not lead into a crash, but it would surely delay its’ emerging for a few years or more, and that is not what we want. We want it all, and we want it now!
Monday, February 9, 2009
As the recent global economic crisis demonstrates, no person, company or country is immune. What happens in the USA, China or Europe can have implications that can resound around the globe. In my last blog, I questioned whether the USA will overtake Europe in PV, but is this really about us against them? Shouldn’t this be about –we.
Similar to the Clinton Global Initiative (CGI) which has established the framework to turn ideas into actions and to help our world move beyond the current state of globalization to a more integrated global community of shared benefits, responsibilities, and value to deliver meaningful and measurable results, why not take this same foundation to develop the best practices from here and there, and create a truly global renewable energy network of cities on all continents.
The EU has established a similar program and is planning for the EU Sustainable Energy Week (EUSEW) from Monday 9 February to Friday 13 February. This event covers key topics that highlight the multi-sectoral nature of sustainable energy development and stresses the need for everyone to work together towards a common goal.
CGI, EU and all other major regions should work together towards developing the best and most cost-effective methods for how we can all act fast to reduce CO2-emissions while simultaneously benefiting each local economy with sustainable activity and job creation. It is - or at least should be - no longer about you or me, but us.
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