Email of the on solar power, desertification, and profitability
Comment of the Day

March 16 2021

Commentary by Eoin Treacy

Email of the on solar power, desertification, and profitability

This video is very interesting. It is hard to comprehend the scale of this project.  It is part of China's ''ending poverty'' project.

Whilst the US has been engaged in adventurism in the M-E and elsewhere (right up till today) resulting in heavy losses, both financial and human cost, China has been powering ahead in leaps and bounds, spreading their sphere of influence far and wide. Interesting times.


Eoin Treacy's view

Thank you for this interesting video which is both information and raises some important questions. The point they seek to get across is that solar panel power plants can create clean energy, reverse desertification, and create lucrative income streams for local populations. 

The video at no point discusses the efficiency of the solar panels, the sustainability of using the precious water resource to regularly clean them, the cost/efficiency of power lines to get the electricity to where it is needed or the desire for energy self-sufficiency.

This article from examines the similar ambition of using the Sahara as a solar well to generate electricity for Europe. Here is a section:

Covering 20% of the Sahara with solar farms raises local temperatures in the desert by 1.5°C according to our model. At 50% coverage, the temperature increase is 2.5°C. This warming is eventually spread around the globe by the atmosphere and ocean movement, raising the world’s average temperature by 0.16°C for 20% coverage, and 0.39°C for 50% coverage. The global temperature shift is not uniform though – the polar regions would warm more than the tropics, increasing sea ice loss in the Arctic. This could further accelerate warming, as melting sea ice exposes dark water which absorbs much more solar energy.

This massive new heat source in the Sahara reorganizes global air and ocean circulation, affecting precipitation patterns around the world. The narrow band of heavy rainfall in the tropics, which accounts for more than 30% of global precipitation and supports the rainforests of the Amazon and Congo Basin, shifts northward in our simulations. For the Amazon region, this causes droughts as less moisture arrives from the ocean. Roughly the same amount of additional rainfall that falls over the Sahara due to the surface-darkening effects of solar panels is lost from the Amazon. The model also predicts more frequent tropical cyclones hitting North American and East Asian coasts.

Some important processes are still missing from our model, such as dust blown from large deserts. Saharan dust, carried on the wind, is a vital source of nutrients for the Amazon and the Atlantic Ocean. So a greener Sahara could have an even bigger global effect than our simulations suggested.

We are only beginning to understand the potential consequences of establishing massive solar farms in the world’s deserts. Solutions like this may help society transition from fossil energy, but Earth system studies like ours underscore the importance of considering the numerous coupled responses of the atmosphere, oceans, and land surface when examining their benefits and risks.

The size of solar arrays necessary to cover 20% of the Sahara is mindboggling. The desert is 3.5 million square miles so covering a fifth of it in solar panels would mean building more than 1000 facilities on the scale of what is discussed in China’s promotional video.

That’s a decades-long process but it’s what the growth ambitions of the renewables sector are based on. Europe’s clear political intention to boost the cost of carbon credits is helping to fuel speculation in all manner of projects to harvest the rewards from taxing conventional industry.

This article from Bloomberg focuses on the profitability of solar as it gains scale and competes against itself rather than legacy providers. Here is a section:

That was good for the early solar plants. However as solar generation increased and net demand fell further and further, fewer other power generators were needed to meet that net demand during solar hours. Those generators were lower-cost, with the result being that solar’s realized price—what it earns during generating hours—has fallen steadily. Last year it was barely $20 per megawatt-hour, down from $50/MWh in 2014.

There’s another wrinkle to this realized price phenomenon. Solar’s challenge is not just that its realized price has fallen; it’s also that the realized price is now a substantial haircut to the “around the clock” power prices that plants with 24-hour operations see. In 2011, when a small volume of solar captured high daytime prices, solar generators saw a significant premium to the around-the clock price. Today, a large volume of solar has depressed daytime prices, and solar generators now see a noticeable discount to the around-the-clock price.

This realized price trend is a problem in search of a solution. One certainly exists already: utility-scale energy storage in the form of large batteries that can store bulk power during solar hours and discharge it again when demand peaks in the evening. California has already studied the notion in depth, and there are plenty of commercial developers already pursuing utility-scale solar and storage projects.

Another solution is something I’ve written about before in the case of even more solar-rich South Australia: creating new sources of demand. Get used to this refrain, and not just from me. Abundant, inexpensive, zero-carbon electrons are in search of companies and business models to use them. Those could include electrolyzing hydrogen, performing energy-intensive computation in large data centers, charging electric vehicles, or—just as importantly—other electricity-intensive processes and businesses that do not yet exist.

The announcement today that California is reducing the payments made to rooftop solar reflects the compression of margins as scale is achieved. The Solar ETF continues to paused in the region of the trend mean and some additional consolidation appears likely but a renewed moved to new highs can be sustained.

The introduction of cheap abundant new sources of power will inevitably create new sources of demand. That is particularly relevant for storage and hydrogen solutions in the near term and potentially important for major polluters like aluminium and cement in the long term.

Hydrogen stocks tend to be extremely volatile. They surged higher in 2020 and have experienced deep pullbacks to their respective trend means of late. Their ability to continue to demonstrate support in the region of their MAs will be an important potential vindication of the bull market hypothesis.

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