This year solar energy in Germany reaches 20 GW. A nuclear power plant has about 1 GW.
The problem is that solar energy is more fickle, but generally available at the interesting time of midday. During night conventional sources like brown coal and nuclear plants deliver a base load of 32 GW.
Cheap solar panels from China are one explanation.
This capacity expansion has led to switching off solar panels when energy generation was especially plentiful. Government now wants to chop the subsidies to solar energy with 30%, but that demands a 2/3 majority in the Bundesrat (roughly: German senate).
1) The RMB dropped 12% from June 2010 to April 2011. Then rose back up 14% April 2012 and ended where they started (depends on which divisor you use). In the same periods oil prices rose (measured in EUR) 73% and dropped back down 15% – respectively.
This is an exceptionally rapid adjustment to varying exchange rates and oil prices – in an area where you normally plan 30 years ahead. Naturally you pick the lower hanging fruits first – and perhaps overshoot the target a bit. We can see that the politicians having a hard time keeping up – but let see if they can’t get a move on, when we are talking real money?
When you get a hefty (relative) discount of 50% – the combination of high oil prices and low RMB – plus the necessary cash some things can be done even if it is a one-time offer. I haven’t even considered the possibility of a large extra discount due to a large order.
2) One of the points I have been trying to make repeatedly is that in energy supply the immediate fascination with oil prices in USD is far from the whole picture – some people are able to think on their feet. Environmental religious icons do have to live with being taken on and off the wall according to a very rapidly changing fashion – the eternal truth may just be dusted off before it is removed back to storage.
3) It does, as the news report states, give management problems for the people that are on watch 24 hours a day in 3 shifts – switching, redirecting and adjusting supply and demand of power (hopefully without blowing to many fuses) – in the most unsexy job: Looking at dials pulling the occasional switch. They might not be spearhead science, but they generally know what they are doing.
With more diverse energy supply competent administration may only save a couple of percentage points off the national energy consumption, but with such huge amounts they more than earn their keep.
4) What does seem called for is a hydroelectric power plant that can pump water back into the reservoir when supply is abundant. This could mean profitability – even if the naked calculated investment in itself doesn’t give a positive return – but it might be profitable still – provided it gives the possibility to exploit other resources better. All different energy sources have their characteristics and the winner will be the one that can play on all the keys on the piano.
5) From the larger political perspective the heyday for solar and wind energy might be over – for now.
- The easy pickings have been plucked – the law of diminishing returns to scale is valid here too.
- The opening of the Nord Stream and South Stream natural gas lines from Russia – bypassing politically unstable states – solves a part of former supply reliability problem.
- If an EU high tension/high capacity grid is build from money in what others call a stimulus packet a greater integration of European energy supply might give its contribution to growth. The importance of an economic stimulus is not the stimulus, but what you stimulate.