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China’s Solar Power Has Reached Price Parity With Coal
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China’s solar power has reached price parity with coal [arstechnica.com]:
The incredible plunge in the price of photovoltaic systems has made solar power an affordable option for much of the world. And, as long as solar is providing a small fraction of the power on a given grid, there's little holding back the addition of new photovoltaic facilities. But as the fraction of solar power grows, managing the fact that it only generates electricity intermittently becomes a significant grid-management challenge.
At that point, factors other than price become significant in determining how much solar energy makes sense. And those factors can vary from country to country. This means that understanding solar's potential requires a country-specific analysis. This week, researchers in China released an analysis of their country, indicating that solar has now reached a point where it's cost-competitive with coal. The report also states that solar (when coupled with storage) could handle nearly half of China's needs by midcentury.
A changing landscape
Like everywhere else, China has seen the cost of solar power dive over the last decade, with a 63 percent drop between 2011 and 2018 alone. In line with that, the installation of solar has risen dramatically. Currently, a third of the entire planet's new solar capacity is being commissioned in China; the country passed the installed capacity of the US in 2013 and Germany in 2015, and it now has over 250 GW active—well more than double what its economic plan had specified by this point.
Given that China plans to hit net zero emissions by 2060, it is likely to continue this building spree.
But the forecast is not all rosy. Most of China's population is located in the country's southeast. The best solar resources (in terms of cloudless days and available land) are in the northwest, which also happens to be sparsely populated. This mismatch has left solar facing constraints due to limits in the ability of China's grids to shift power across its vast distances. The output of solar plants in the northwest has frequently ended up curtailed, as there's no capacity to send it where it's needed.
As a result, it's been somewhat difficult to fully understand the economics of solar power in China.
To get a clearer picture, the researchers built a model that takes into account most of the factors influencing solar's performance. The model tracks changes in technology, economics, solar resources, and the Chinese grid for the period from 2020 to 2060. It used six years of satellite weather data to estimate typical productivity in different areas of the country, and it included information on existing land use that would interfere with solar-farm siting.
A lot of potential
Among other things, the model produces what the researchers term the "technical potential"—the amount of solar energy that could be produced if all accessible sites were used to produce it. For 2020, the technical potential for solar in China is just under 100 petawatt-hours, or about 13 times all of China's electricity demand. Because of improvements in technology, that technical potential is projected to rise to nearly 150 PW-hr by 2060, the year China plans on reaching net-zero emissions.
But many of those sites are relatively poor. The average capacity factor (the actual production versus. rated capacity) is estimated to be only 17.6 percent (for context, the average for plants operating in the US is in the area of 25 percent).
The analysis also produces an estimated price that will provide a profit for solar facilities in each location, taking into account initial costs, maintenance, and financing. Those suggest that, in 2020, most of the country can produce solar at a price that's equal to that of coal. About 80 percent of the potential capacity will hit price parity by 2022, and this will be true everywhere before this decade is over.
The gap will also continue to grow, as solar's price is likely to fall further. It's currently at $49.3/MW-hr but is projected to decline to $13/MW-hr by 2030 and $3/MW-hr by 2060. And the researchers note that solar's competitiveness with coal comes despite the fact that the health and environmental costs of coal aren't priced in to the cost of electricity generated using it. If there were a price on carbon, the price gap between coal and solar would already be large, and it would become immense by midcentury.
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