Crikey



Suntech calls an Australian solar boom

Suntech, the world’s largest solar manufacturing company, has produced stunning forecasts for the solar PV industry in Australia — saying it could supply 5% of the nation’s power demand by the end of this decade, reaching the target three decades ahead of the federal government’s most recent forecast.

Stefan Jarnason, the technical director of Suntech Australia, says solar PV capacity in Australia could reach 10 gigawatts by 2020, when it would be growing at a phenomenal 2GW a year. He bases these forecasts on rapidly declining costs, which mean electricity from rooftop PV that is already cheaper than coal-fired energy delivered by energy retailers in some parts of the country, will reach parity for commercial users around 2015, and parity for utility-scale developments towards the end of the decade.

It’s just a forecast, but it represents a growing realisation within and without the industry that in a very few years the rollout of solar PV will be dictated less by the scale of financial incentives — because it might not need much — but by the scale of regulatory protection for the current energy suppliers, because they might need all the help they can get.

Jarnason predicts installation of rooftop PV will slump sharply to about 250MW in 2012 because of the dramatic changes in government incentives over the past six to 12 months, but will grow at 20% per year as more consumers use it as a hedge against rising electricity prices. Again, this will depend more on the removal of regulatory barriers than on government financial support.

He predicts commercial-scale solar PV will be about 40MW in 2012 and grow at 40% a year, while utility-scale solar will grow at 20-60MW per year, before experiencing massive growth from around 2018, as solar costs come down, and hidden subsidies are removed from fossil fuels. “Until the government is able to remove hidden subsidies, growth in utility-scale will remain slow — when we hit grid parity there will be a boom,”  he told a seminar on “The Future of Solar,” hosted by the Grattan Institute and the University of Melbourne last night. By the end of the decade, he says, the combination of solar PV and solar thermal with storage will be able to deliver base-load power.

Such a scenario would appear to be a significant threat to the energy incumbents, particularly in the coal and gas industries, because it would reduce opportunities for new deployment and eat into their earnings because of the impact of solar and other short run marginal cost technologies in the so-called merit order effect (more on that tomorrow). It would also come as a shock to the government, which forecasts just 5% solar by 2050 in scenarios painted in its Clean Energy Future package. The long-awaited energy white paper, which will be delivered in the next month or so and will become the blueprint of the country’s energy planning over the next decade, will also be unlikely to have such a bullish forecast, seeing that none of the 23-person panel advising the government is a specialist in solar technology.

Indeed, Jarnason says the main impediments to the industry are not cost but regulatory barriers, with politicians seemingly unaware of the technology’s potential. “Unfortunately, politicians view solar PV, and probably to an extent all renewable energy, as a political exercise than an energy generation exercise,” he said. And the small numbers of incumbent generators, retailers and network operators are highly influential and also keen to maintain regulatory barriers. “They’d rather not have to change,” Jarnason said. “Solar PV is a form of distributed energy, so (the utilities) need to rethink how to generate supply to get you and I to pay for their energy.” This echoes the thoughts from the CEO of US utility NRG Energy.

Suntech’s forecasts may come as little consolation to the likes of SilexSolar, which announced on Tuesday that it would suspend manufacturing at its Homebush plant in Australia, blaming a trifecta of cheap Chinese imports, the high Australian dollar, and the policy changes on solar PV, particularly in NSW where the market has fallen to virtually zero. Ironically, the company’s decision to shut down came just a week after the carbon pricing legislation was finally passed by the Senate, and on the same day as a Chinese-based solar PV parts manufacturer announced a $6 million float on Sydney’s new venture capital market, the SIM-VSE.

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9 Responses

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  1. seeing that none of the 23-person panel advising the government is a specialist in solar technology.”

    And none is a major beneficiary of a domestic solar corporation, as Janarson is.

    I hope Janarson’s predictions are accurate, but so much of what Parkinson writes is little more than boosterism.

    by Frank Campbell on Nov 17, 2011 at 5:27 pm

  2. Geez, lighten up Frank. Its a potentially positive story.

    If technology could provide efficient and economic storage of power generated from P.V, I would ditch the grid altogether.

    by Microseris on Nov 18, 2011 at 7:33 am

  3. I’d ditch the grid too, Micro, if it were remotely economic. We could have exploited this middle class rort and taken the fat subsidies while they were on offer (I was tempted) but it would have been a tad hypocritical, slagging off renewable energy carpebaggers while pocketing other people’s money…

    Check out geothermal in Australia- read company and analysts’ reports (and Flannery’s hype in 2008)…a billion dollars wasted so far. Tech problems are horrendous. Check out what happened to carbon sequestration too…

    The point is prematurity: excessive claims for all these technologies just wastes capital and damages renewables research, not least from political backlash.

    Boosters like Parkinson are the worst enemies of renewables, and delay rational action on CO2 by their opportunism and political ineptitude.

    by Frank Campbell on Nov 18, 2011 at 9:36 am

  4. No-one should ever mix ‘carbon sequestration’ and ‘renewable energy’ in same paragraph.

    Of course ‘carbon sequestration’ has gone nowhere. Everyone with even basic high school science knew that the idea of adding oxygen to carbon (burning) to produce heat, then using energy to separate out the CO2 and store safely for all time was likely to remain always energy and cost negative.

    Carbon sequestration (excluding normal forestry etc) will forever be seen as the coal industry’s political ploy to argue against regulation of its pollution, on the basis that there was redeeming technology just over the horizon. It is precisely what the gasoline auto industry offered in hydrogen fuel, in ‘Who Killed The Electric Car?” documentary. Only the Bush and Howard governments ever put money into carbon sequestration, as payback for the fact that both got so much in the way of political donations from the coal industry.

    The Suntech guy is right that the real issue in Australia is the government subsidies paid to the coal industry.

    But it doesn’t matter how much ‘faster’ rooftop PV gets implemented, as long as we keep implementing it fast enough to at least prevent any further CapEx going into coal-fired generating stations. Fill-in gas-powered plant or co-generation is not bad, as the CapEx is so low, that it can be turned on only when needed. But major new coal developments are quite a separate issue. For example, the NSW government should abandon the Cobbora Coal project in Western NSW, which it only invented as a long-term way to subsidise coal-fired generation, to indemnify the generators from rising costs, so as to sell-off those assets.

    by Graeme Harrison on Nov 18, 2011 at 11:45 am

  5. Frank, you are obsessed. This article is not about geothermal. Wherever there is money to be made you’ll find your precious “rorters”, especially at the birth of every major technology, ever. It doesn’t diminish the potentials of the technology.

    Nor is it “boosterism” that is the enemy of renewable energies - it’s fearful, right-wing alarmists like you who lie about its potential and seek to undermine it.

    It is only inevitable that costs will fall and renewable energy will make up the majority, and eventually all, of our energy needs. To say otherwise is to say the horseless carriage will never go faster than five miles per hour.

    by Rich Uncle Skeleton on Nov 18, 2011 at 4:18 pm

  6. I’m a left-wing alarmist, as you well know Anonymous Skeleton…

    Verballing is a routine device of Crikey head-bangers…

    This assertion -“It is only inevitable that costs will fall and renewable energy will make up the majority, and eventually all, of our energy needs.” - is typical quasi-religious- policy based on faith.
    The point is that heavy investment in unready renewable technologies simply leaves a mass of obsolete infrastructure when (and if) reasonably efficient and economic renewables appear. By wasting huge sums on premature technology, renewables R and D is delayed. And to the extent that the “carbon tax” weakens what remains of the industrial base, the situation is exacerbated. The carbon tax also damages progressive politics (haven’t you noticed?), again sabotaging rational action.

    What’s puzzling about bastions of climate millenarianism like Crikey is that the propagandists within seem unaware of the impact of the impending implosion of casino capitalism on all climate action. Climate change is well down the list of priorities now- but it will be nowhere when the Euro hits the fan…

    by Frank Campbell on Nov 18, 2011 at 4:38 pm

  7. It has been my experience most critics of solar energy have little real knowledge of it, zero experience with it, make their money with or for vested interests and get their information from News Ltd tabloids aka speak sheets for mining interests.
    Solar works really well.
    The problem is the political obstructionism from we all know where, but why does this exist?
    Look at party donations to the Liberal, National and to a lesser extent Labor parties. Its that simple.
    Same reason the NSW State govt makes a lot of noise about CSG to pacify the farming communities (their constituents) but really intends to do little about it.
    The fact that BOF has let the solar industry collapse in NSW is a big shame and why the real media have not brought him to account is perplexing.

    by Oldfootyhead on Nov 19, 2011 at 11:19 am

  8. This is great news. Go Suntech!

    by scottyea on Nov 19, 2011 at 4:23 pm

  9. Frank, I agree that investment in R and D for renewables is key to lowering carbon emissions and having a sustainable energy supply long term - but you are offering a false choice.
    “By wasting huge sums on premature technology, renewables R and D is delayed.”
    The industries learn by doing. As more solar cells are produced, the cheaper they become to make. This process must continue, rolling out more and more solar to lower cost of solar generated power to wholesale parity to make solar a viable alternative to fossil fuel generated power. Research is important, to develop and grow the possibilities for this technology - but this needs to be on top of industry growth lowering cost.
    It is not an either or situation, one cannot wait tinkering in a lab for the silver bullet technology to come along - it doesn’t exist.

    by Mark on Nov 20, 2011 at 1:48 am

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