Care2.com, a catch-all web site that distributes free e-greeting cards and a blend of new age health care, pet care, and environmental news, caught this editor’s attention with the news that solar power is now cheaper than Diesel-generated electricity in India – without subsidies – and by the manner in which private industry and government agencies are adapting to this.
Two giants on the industrial side have thrown their substantial resources behind solar. BHARTI, the largest mobile phone company, is using the sun to power rural cell towers. Jaine Irrigation, the world’s biggest mango puree producer, is building an 8.5 megawatt solar power plant, according to Care2.
On the governmental side, Sustainable Business.com explains the reverse auction approach that helps India get cheaper power than other countries manage.
“In India, those that bid the lowest in a reverse auction win the right to build solar plants up to 20 megawatts (MW) and sell the electricity under a 25 year contract.
“Winners are required to buy solar cells domestically. After the auction, they have seven months to arrange financing and 13 months to complete the plants, according to government guidelines.” (One contradictory element in the report was solar’s low cost caused by dropping Chinese solar prices, although guidelines required domestic panels.)
The second such auction was held December 2 and awarded 28 plants with 350 megawatts capacity to the lowest bidders. France’s Solairedirect SA bid $147 per megawatt hour to win the right to build a 5 mW plant, 30-percent cheaper than solar’s worldwide average.
SustainableBusiness.com reports, “Globally, power project developers are paid about $208 per megawatt-hour to build a solar plant, $78 for a wind farm and $76 for a coal plant, according to Bloomberg New Energy Finance levelized cost of energy analysis.
“By forcing companies to compete on price, India is turning solar subsidies on its head – it wants to avoid the high payments that Germany and other EU countries face from paying above-market prices to incentivize growth in the market.”
The video gives some idea of the enthusiasm brought about by aggressive development of solar in at least one province.
India will become the world’s most populous country by 2025 at current birth rates, making their goal of achieving 20,000 megawatts of solar power essential for reducing climate change and air pollution, the latter leading to “high incidence of respiratory diseases, cancer, and heart diseases.”
The reverse auction technique has merit, but still faces the real-world lower costs of coal-fired electricity at this time, although solar and wind could eventually find lower cost points with increased production and new technology.
This author found some difficulty in analyzing cost per megawatt hour for competing technologies because of varying ways of calculating capital and operating costs and the differing types of government subsidies in different countries. Suggestions and apple-to-apple comparisons are welcome.