Shining a light on Solar energy in Ireland

One of the unjustified criticisms of nuclear energy for Ireland is that we couldn’t afford the large cost involved. While it is hard to defend the enormous capital cost of the very large nuclear station being built at Hinkley Point in Britain, Ireland is unlikely to build such a station. Instead, we are likely to wait a year or two until smaller, cheaper and even safer plants become available and economically attractive to our relatively small island.

One way to assess whether nuclear is economically attractive to us is to understand the economics of other low-emission technologies, one of which is solar energy. The costs of Solar Photovoltaic (Solar PV) panels have fallen dramatically in recent years, so it is time to have a look at the figures as they might apply to Ireland in 2018.

Perceived benefits

The 2017 Irish Solar Energy Association Annual Conference in November heard that there is €1 billion of investment in solar technology planned for Ireland. The suggestion was that rooftop solar panels in schools would enable communities to see tangible benefits and the resulting long-term energy savings should go directly to the schools. Enabling this would create 7,000 direct jobs, save the exchequer €210 million a year, and maintain Ireland’s attractiveness for foreign investment. A spokesperson said that, as a taxpayer, he was really concerned about the prospect of annual fines of up to €420 million facing Ireland.

Solar farm or rooftop?

There are two different scenarios at play here – solar farms and rooftop solar.

Most of the current planned investment is for large-scale solar farms that require dedicated land banks and export electricity export to the grid. These solar farms are subject to the EU Emissions Trading Scheme (ETS). However, rooftop solar has higher maintenance costs and normally supplies the building supporting the roof with only the excess electricity being exported to the grid. These are non-ETS solar schemes.

Solar energy farms involve large arrays of solar panels over a number of acres of land, as in Figure 1 below. A recent project in Northern Ireland, for example, concerns a 5 MW solar farm being installed on 33 acres for a reported £7 million. The owner, a large user of electricity, says that the electricity produced will be worth over £500k per year. This confirms that it will operate at around 10% capacity factor. [5MW capacity, 10% capacity factor, £118 per MWh, 8760 hours per year yields £517k per year].

Excluding maintenance costs of at least £70k per year and interest, legal, insurance and other overheads, the project appears to return £517k on a capital investment of £7 million. This would be an unacceptably low return on investment of 7.4% from which to fund the above costs and repay the capital.

Figure 1: A 1 MW Solar PV farm has panels such as these covering 5 to 7 acres

Would placing solar panels on the rooftops of schools – who pay more for their electricity – make more economic sense? The downside here is that schools are only open for 183 days per year at primary level and 167 days per year at post-primary level and are normally closed during most of the summer season when solar panels are producing most of their energy.

If schools were to use 20% of the annual solar energy, avoiding the need to pay 20 cent per unit for electricity, and export the remainder at €80 per MWh, that electricity would be worth €456k annually. This is an even less attractive proposition than the solar farm in the previous example, and is not economically viable.

Value of electricity produced

Using the examples above, €1 billion would buy 632 MW worth of solar farms and produce 550,000 MWh of electricity per year. If this was valued similarly to onshore wind which receives a guaranteed price of €80 per MWh, that electricity would be valued at €44.3 million per year.

This is well short of the €50 million annual interest charge on the capital (at 5% per annum), the estimated €10 million annual maintenance charge and legal and other overheads.

To return reasonable breakeven operating costs of €66 million annually, the solar electricity would need to be priced at €120 per MWh, which is 50% higher than the guaranteed price for electricity from onshore wind. This does not make economic sense.

Value of emissions avoided

On average throughout the year in Ireland, electricity emits 468 grams of carbon dioxide per unit. This can be expressed as 0.468 tons of CO2 per MWh. Although emissions are often lower in summer – when solar energy is at its peak – and solar energy is more likely to displace flexible and cleaner gas rather than dirtier and less flexible coal and peat, using the average figure indicates that 632 MW of solar farms could avoid 260,000 tons of CO2 annually. This has a value to electricity producers who are subject to the Electricity Trading Scheme (ETS).

The current market price for CO2 in the ETS has been consistently below €10 per ton since 2011 (see Figure 2 below), so the avoided CO2 would be worth less than €2.6 million. This does not significantly alter the lack of an economic case for solar farms.

Figure 2. EU ETS prices since 2008. Price has been less than €10/ton since 2011.

Value of increased use of Renewables

For rooftop schemes that fall in the non-ETS sector, there is a value attributed to their use in increasing the amount of renewable energy used in Ireland.

Aside: Although the climate is influenced by greenhouse gas emissions, Ireland’s emissions from electricity are within our allowed limits and lowering these emissions further is of little or no financial benefit to us, as explained above.

The same cannot be said for Renewables targets, which are not specifically aimed at reducing emissions. Rather, they are political agreements that are not associated with emissions increase or decrease. To illustrate this point, Figure 3 shows how the United Kingdom is on track to exceed its climate change target of an emissions reduction of 16%. But Figure 4 shows that it is failing to meet its political target of 15% of energy from Renewables and may be fined as a result. End Aside
Figure 3. Member States, their ESD target and trends in meeting their 2020 emissions targets
Figure 4: Share of renewable energy in gross final energy consumption, by country, 2004 and 2015

Nonetheless, Ireland has committed to getting at least 16% of our energy from renewables by 2020 and will probably be fined at an estimated rate of approximately €120 million for every % underachieved.

632 MW of rooftop Solar PV could produce 550,000 MWh of electricity per year, supplying around 2% of Ireland’s electricity. As electricity represents around 20% of the energy used in Ireland, this solar energy could contribute about 0.4% of renewable energy to Ireland’s total at a potential value of €50 million. If this penalty has a realistic chance of being avoided, then there may be economic merit in rooftop solar. This aspect could merit further study.

Conclusion

While rooftop solar is less effective and has higher annual costs than solar farms, there is a possibility that it may make more economic sense if it can be used to contribute to Ireland’s renewable energy targets under the EU Effort Sharing Directive. However, the above analysis may not completely capture all the nuances of how Renewables targets are calculated under this Directive, so any corrections in that regard would be very much appreciated.

These calculations take no account of constraints or curtailments required to ensure electricity grid stability – some solar energy may not be usable due to an excess of Renewable electricity available at any time, or other generators may need to act ‘out of merit order’ in order to accommodate fluctuations in intermittent energy sources such as solar or wind. Such constraints costs exceeded €130 million in 2017, so even a 2% increase here would amount to €2.6 million.

Also ignored is the need to repay the €1 billion capital cost. Repaying this cost over 20 years would require €50 million per annum.

Finally, given that solar energy will be near zero at times of our highest demand for electricity – dark, mid-winter evenings – we must retain sufficient non-solar generators to supply our largest electricity needs. This means that solar energy is not technically required to satisfy electricity needs unlike non-solar generators, which are required. Further, as the non-solar generators will have lower load factors as they are displaced by solar energy, their loss of income will need to be made up in some way for them to remain in business. These extra costs are also ignored in the above analysis.

There is quite an amount of detail behind this analysis of a complex topic, so I’m open to query on any or all of it. But, the conclusion for now is that solar PV farms do not appear to have an economic case for Ireland in 2018.

Calling the tune on climate change

Ireland’s Citizens’ Assembly on how the State can make Ireland a leader in tackling climate change is failing in its duty to represent all viable technologies, including nuclear energy, as it is only allowing argument supporting renewable technologies.

As a result, the process is not only flawed but it is doomed to fail as there is no credible path to success in tackling climate change – let alone lead in it – that deliberately excludes proven clean technologies.

The Irish government declared Climate Change to be one of the most important long-term challenges facing us and effective action is needed now that we know that climate damage is happening quicker than we thought.

Ireland is by far the worst EU performer at meeting our climate targets, as can be seen from this official EU graph showing we are projected to exceed our 2020 emissions targets by 12%.

Ireland is “Paddy last” of the EU 28 in hitting emissions targets

After over a decade of our best efforts, Irish emissions are again rising and are projected to rise further even if we fully implement all our current policies. The graph below (using EPA data) shows the non-ETS emissions (in blue) starting to exceed our 2020 emissions target. [Note: ETS emissions (in red), from large users such as power stations and cement works, are not part of our EU targets as they are regulated separately under the Emissions Trading Scheme (ETS).]

EPA graph showing our target emissions (Blue) exceeding our 2020 target line (Green)

During this period, we have had Ministers for the Environment from a variety of political parties (Fianna Fáil, Greens, Fine Gael, Labour and the Independent Alliance) tackle the issue earnestly – and with endeavour – but with limited success.

That is not to belittle the many successful initiatives that most people are aware of. Ireland now has the highest fraction of electricity from wind turbines per person of any European nation. We changed our motor tax scheme and now drive much more efficient vehicles. Our waste collection is streamed and there is a good degree of recycling carried out by most people in the State.

Many other, less well-known, initiatives are also underway. There is a state-of-the-art marine power testing facility on our west coast. Our electricity grid operator, EirGrid, has made huge changes to how our system operates to allow intermittent wind power reach global record-breaking levels. Building regulations are moving slowly towards achieving near-zero emissions standards. And there are a number of energy efficiency schemes, some grant-aided, operating effectively throughout the country.

Yet, our emissions still rise as our growth in energy use outpaces the efficiency gains being made.

Although Ireland will certainly miss our 2020 EU climate-related targets, and we are likely to miss those for 2030, we have set ourselves very ambitious targets for 2050. These aim at reducing emissions by at least 80% – and preferably by 95% – below 1990 levels by 2050. This will require fundamental societal change at every level in Irish society if the targets are to stand any chance of being met.

To engage with society, Government tasked the Citizens’ Assembly with coming up with recommendations on how the State can make Ireland a leader in tackling climate change. The Assembly, in turn, established an expert advisory group to help them prepare information and advice to help them in this task. The Terms of Reference for this advisory group include:

  • In the case of issues where expert views are contested (i.e. where experts can make credible arguments that directly conflict with one another,) the Expert Advisory Group will ensure that both sides of the argument will be represented.

Nuclear power is clearly one issue where expert views are contested and these different views are outlined in the Energy Green Paper from 2014, the last Government paper to address nuclear power’s potential for Ireland. [The subsequent Energy White Paper essentially ignored the issue, as in Clause 166: “Nuclear power generation in Ireland is currently prohibited by legislation“].

The Green Paper argued against nuclear power on the basis of cost and size – arguments that are strongly contested. For example, EirGrid published a study that showed that there was no means of supplying electricity in Ireland cheaper than using even a large nuclear plant. Regarding size, the Green Paper itself accepted that smaller reactors could be accommodated on the Irish grid (p 49).

The Green Paper also wanted it understood that nuclear is not a “zero carbon” technology. While there is no such thing as a ‘zero-carbon’ technology, the Intergovernmental Panel on Climate Change (IPCC) have assessed nuclear power as being a low-carbon energy source, as in this extract from Chapter 6 of the IPCC Assessment Report 5 (AR5):

As it is clear that there are credible arguments in favour of nuclear power, there is an onus on the advisory group to ensure that both sides of the argument are represented.

That this has not happened appears to be a significant breach of the Terms of Reference for the Advisory Group, and is a matter that should be rectified without delay. Fortunately, this is a relatively straight forward matter to rectify.

What is more significant is that even the Citizens’ Assembly advisory group do not appear to understand the extent of the challenge that is facing us in effectively tackling climate change. Worse, they appear to believe that we could lead in this area merely by reinforcing current energy policy.

Certainly, we need to engage with the Citizens to ensure that society takes all the small but important steps needed to tackle climate change, not only through the Citizens’ Assembly but through the National Dialogue to be chaired by Pat Gilroy.

But we also need to greatly expand our climate change efforts by considering all technologies that can help us in this regard. Denying the Citizens’ Assembly the opportunity to make an informed choice about the low-carbon options identified by the IPCC is wrong and is an early indication of our likely failure begin, let alone to lead in, tackling the causes of climate change.

We know who is paying the piper – but we can hardly be expected to call for a tune that we know little or nothing about!

BENE’s submission to the Citizen’s Assembly

We made a submission on 11 August 2017 to the Citizen’s Assembly who were asking for input on “How the State can make Ireland a leader in tackling climate change”. Our submission is reproduced below. Comments are welcome, as always. Continue reading “BENE’s submission to the Citizen’s Assembly”

Why Nuclear; why now?

The 2014 Green Paper on Energy Policy questioned Ireland’s policy of ignoring the potential benefits of nuclear energy. The huge global threat posed by climate change and the threat to the national economy posed by volatile fossil fuel prices was acknowledged, while accepting the useful but limited role that renewables could play in our energy future.

But the 2015 Energy Policy has essentially kicked the can down the road – now the question may be addressed in a new National Energy Forum in mid-2016. Continue reading “Why Nuclear; why now?”

What was the Point of Carnsore?

Ireland rejected nuclear power in 1981. What was the environmental impact of that decision?

Carnsore Point, Co Wexford, was proposed as the location for Ireland’s first nuclear power plant. Many activists celebrated the decision not to pursue this option, but what were the impacts of that decision? Was this really a victory for our environment and our economy?

Continue reading “What was the Point of Carnsore?”

Ireland’s Energy: We need to debate the nuclear option honestly

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Fukushima nuclear power plant. The second-worst nuclear disaster in history killed no-one, while the tsunami that caused it killed more than 15,000 people. Photograph: Kimimasa Mayama/Reuters

There are pros and cons to nuclear energy, but the debate is often acrimonious and too often falls back to rhetoric instead of facts

The world’s traditional means of generating energy have been intensely polluting, expelling millions of tonnes of carbon dioxide into our atmosphere with scant regard for the consequences. Ireland has been complicit in this: Moneypoint, the coal-powered station in Co Clare, releases 3.12 million tonnes of CO2 in the atmosphere annually.

But as Moneypoint comes to the end of its operational life cycle, it is time to have a serious discussion about Ireland’s energy future, and nuclear power needs to be part of that discussion.

Continue reading “Ireland’s Energy: We need to debate the nuclear option honestly”

Nuclear solution still best for Ireland’s energy needs

OPINION: Fukushima frightens us all but mankind has never walked away from a technology, no matter how hard it is to master, write DAVID SOWBY and FRANK TURVEY 

EVER SINCE a human being first lit a fire, humankind has striven to harness the forces of nature in ways that yielded benefits but which also carried risks. As civilisation progressed, the benefits of any particular advance became more substantial but, by and large, so also did the risks.

But from the boiler explosions of the 19th century, through hydroelectric dam collapses, mining and oil-rig disasters, train and air crashes, Bhopal and Chernobyl, the response of humanity has never been to abandon a technology, but to derive lessons from what has happened so as to make the benefits available more safely in the future.

Thus will it be also with nuclear power in the aftermath of the Fukushima accident.

Continue reading “Nuclear solution still best for Ireland’s energy needs”

Minister calls for a nuclear debate

Ireland took an important step towards addressing its future energy needs with Eamon Ryan’s recent call for an Oireachtas committee discussion about nuclear power, writes Tom O’Flaherty.

It is becoming widely accepted that the greatest challenge facing human society over the next few decades is to arrest the onset of climate change, while there is still time to avert its more devastating effects.  A parallel challenge is to meet the world’s energy needs, and to safeguard national competitiveness, against a background of the diminishing supply and increasing cost of oil and gas.

Clearly these challenges have to be met on two fronts: by curtailing growth in energy demand, and by major development of non-fossil sources of energy. It is BENE’s belief that nuclear energy has a vital contribution to make to the latter objective.

Continue reading “Minister calls for a nuclear debate”