By Paul Homewood
You may have read press reports the other day about the first “subsidy free” solar farm, which was officially opened two days ago.
For instance:
Britain’s first solar farm to operate without a direct subsidy opens today and is expected to generate enough power for 2,500 homes.
Clayhill solar farm contains 31,000 ground-mounted panels and occupies 45 acres of farmland previously used to grow wheat and rapeseed near Flitwick in Bedfordshire.
The farm is able to operate without a subsidy in part because of a steep fall in the cost of solar panels and also because it is linked to giant batteries that store power and release it at times of peak demand.
But it turns out things are not as quite as black and white as either the operator or the government would like us to believe, as GWPF explain:
Hot on the heels of the uncritical media fuss around the recent Contracts for Difference awarded to offshore wind (for comment see “Forget the Spin: Offshore wind costs are not falling”) comes an equally misleading set of headlines falsely claiming that Solar Photovoltaic generation is on the brink of operating without market distortions and coercions. The truth, unsurprisingly, is quite otherwise.
Claire Perry MP, Minister of State for Climate Change and Industry, will today cut the ribbon at the Clayhill Solar Farm, a project that the Department of Business, Energy and Industrial Strategy (BEIS) has welcomed with a striking press statement entitled “Subsidy Free Solar Comes to the UK”.
Naturally enough this has generated a good deal of supportive press coverage, but, like the recent excitement about the low prices awarded to offshore wind, it sounds too good to be true and in fact turns out to be so.
The truth is that while the Clayhill scheme does include 10 MW of solar panels, its economic heart is comprised of five BYD batteries, apparently with a peak output of 6 MW and a storage capacity of 6 MWh of electrical energy.
These batteries will seek lucrative retaining contracts to provide system balancing services, probably under the Capacity Mechanism. Economically, Clayhill is not a “subsidy free” solar system, but a battery storage project providing rapid response power and using onsite solar as one of its charging options.
Thus, contrary to the absurd PR coming out of BEIS, Clayhill is in no respect an indicator of incipient economic maturity in the solar sector, and underneath the silly headlines parroting BEIS’s nonsense even the site’s developers and the Solar Trade Association both give the lie to the exaggerations.
Mr Shine, chairman of Anesco, which owns Clayhill, has very honestly admitted to The Times that solar farms are “still not economically viable” (“Clayhill, Britain’s first subsidy-free solar farm, revives fading industry”), and in the FT he is unequivocal:
“‘It [the Clayhill project] wouldn’t pay with solar by itself at the moment . . . it needs the storage as well,’ said Mr Shine.”
Elsewhere in the FT’s story the Solar Trade Association (STA), alert to the possibility that the BEIS hype might put an end to any hopes of a renewal of subsidies to solar in the UK, is quoted as saying:
“We absolutely applaud them [Anesco] but government shouldn’t then assume the industry is away — it isn’t […] It is only going to be exceptional projects [that are built subsidy free].”
Indeed, the STA spokeswoman is further reported as observing with complete truth that “Government subsidies would still be required to support the majority of solar projects in future.” (“Solar power breakthrough as subsidy-free farm opens”).
If these contradictions were not bad enough for departmental credibility, there is behind it all a still deeper irony: the Capacity Mechanism and its market for expensive grid balancing options such as batteries only exists to address the undesirable consequences of the government’s cack-handed market distortions in favour of uncontrollable renewables such as solar and wind.
The Times tells us about giant batteries that store power and release it at times of peak demand.
In fact they are Mickey Mouse affairs, only able to store 6 MWh. Given the solar farm capacity is 10 MW, that battery storage is not going to last for long.
If the storage gets a contract under the Capacity Market, as John Constable surmises, it would probably be paid a subsidy of about £150,000 pa (assuming a rate of £25/KW). This would be in addition to the revenue from any electricity sold.
The solar farm would produce in the region of 8760 MWh pa (assuming 10% loading). At a typical market price of £40/MWh, this would generate annual revenue of £350K.
In other words, the Capacity Market payment would account for 30% of the total revenue for the site. As John Constable correctly suspects, the whole solar farm would be uneconomic without this money.
It is no wonder the guy from the Solar Trade Association is worried people might get the wrong message!
via NOT A LOT OF PEOPLE KNOW THAT
September 28, 2017 at 02:09PM
Iowa Climate Science Education 