Why Building In Overcapacity At Solar Power Plants Makes So Much Sense

 Why Building In Overcapacity At Solar Power Plants Makes So Much Sense

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New Energy Industry In China

HUAI’AN, CHINA – DECEMBER 5, 2020 – An aerial photo of a photovoltaic power generation project is … [+] taken in Huai ‘an City, Jiangsu Province, China, on December 5, 2020. – PHOTOGRAPH BY Costfoto / Barcroft Studios / Future Publishing (Photo credit should read Costfoto/Barcroft Media via Getty Images)

Barcroft Media via Getty Images

An interesting article in Quartz, “It’s time to start wasting solar energy”, illustrates the energy industry’s mindset change from one of investing just enough to cover demand and then passing on expensive infrastructure overheads to consumers, to being able to produce a surplus at no extra cost. In other words, the economics of abundance applied to energy.

For some time now, the fall in the cost of solar panels — by some 90% over the last decade — has meant that the most expensive parts of a solar energy plant are the land and the frames that hold panels in place. Solar energy is now the cheapest in history. Moreover, solar is not dependent on moving parts that wear out, and production can be managed with software, without the need to maintain turbines or furnaces. Even the land where solar panels are installed can be creatively put to other uses

We are now at a point where we should be overbuilding capacity at solar energy farms, something we would never do in the case of a conventional power plant. Understanding that it is cheaper to continue to build in excess even when there is no market at the present is the key to understanding energy. Furthermore, we are not only talking about cheaper panels, but also about advances that allow, for example, the generation of energy when the sun is not shining, or even small amounts during the night.

Think about the potential when we start operating on economies of scale like these, and what we will be able to do when electricity is so cheap and abundant that it is not even worth measuring it. Newer solar installations already have significant overcapacity, to the extent that the inverters they feed usually have considerably less capacity than the total generation volume, until recently by a factor of 130%, but with plans in some cases to reach 291%.

What to do with all this surplus energy? Store it in batteries that are also increasingly cheaper (prices have fallen by 88% over the last decade), or use it to produce green hydrogen, which can be stored and transported for use wherever it is needed.

This is a change that will see a resizing of all electricity generation infrastructures over the coming decade. Eliminating fossil fuel power plants and replacing them with oversized solar plants is not only greener, it is also cheaper. Utilities that fail to do so will be unable to lower their prices and be left out of the game.

Those who understand this are immediately considering taking advantage of it, whether they are individuals, utility companies or entire countries. Moving from an economy of scarcity to one of abundance can be difficult to visualize, understand or accept, but its foundations are unquestionable. It may not seem to make sense to overbuild generation infrastructure, until you start seeing things in terms of technological economies of scale. If you still believe in last century’s myths about renewables, it’s time to take a look around. It could truly be a lightbulb moment.