No doubt, you’ve heard about Germany’s likely decision to quickly and severely cut its solar PV feed-in tariff policy, a world-leading solar policy that has made Germany a solar power hero of sorts. A friend recently shared a story by Bjørn Lomborg on these cuts with me and asked me for my opinion. It’s taken me a few days to get to it because Lomborg’s piece is so full of myths and lies, but before I get to debunking Lomborg’s claims, let’s have a little context.Lomborg is infamous for denying the need for clean energy action to stop human-caused global warming, and for claiming that scientists’ concerns about global warming are overblown.
Lomborg has flipped and flopped a bit in the past few years, but he has stuck to his odd idea that deploying clean energy now isn’t the best way of responding to global warming (again, going against a large consensus on the matter by experts in the field).
Unfortunately, for Lomborg, the Danish government recently announced that it was cutting $1.6 million in funding for his “Copenhagen Consensus Center” — “It’s been very strange that particular researchers have received special treatment due to ideology. We’re going to run fiscal policy differently,” said Ida Auken of the Socialist People’s Party at the time.
Now, onto the matter of the day, Lomborg’s recent claims (read: myths and lies) about solar energy in the midst of Germany’s move to scale back its solar PV subsidy policy….
There are a handful of reasons why Germany is cutting its solar feed-in tariff policy so quickly and dramatically. As Susan noted the other day, though, the big one is that it cuts into rich and influential utility companies’ bottom lines. It’s also related to the extremely fast and unpredicted drop in the cost of solar PV panels, but mostly because of the effect that is having on the utilities.
“New solar installations of a record 7.5 GW in 2011, far outpacing the country’s 2.5 to 3.5 GW plans, have cut into the business model of German utilities,” as Susan notes.
“Increasing the amount of solar power on the grid has actually lowered peak electricity prices (How the merit order effect works) but it has generated a backlash among German utilities, who are having their bottom line hurt by solar competition….”
But, his has already been covered in more depth (a few times here on CleanTechnica) so let’s just get on to the Lomborg myths.
Note: because I’d rather not drill the myths into your head, I’m leading with the most important (accurate) point related to each myth.
1. Solar PV reduces the price of electricity (or keeps it lower than it would be otherwise). Lomborg makes the claim that Germany’s increase in solar PV is going to result in a massive spike in electricity bills.
First of all, we’ve written on the documented evidence that solar PV reduces electricity bills, since it produces the most electricity at peak demand when baseload power is already stretched and producing new electricity costs the most. (Aside from Susan’s piece from this week linked above, I wrote about how solar PV reduces the price of electricity on February 9th and John Farrell posted a piece on it again on February 13th — I don’t think Lomborg caught either of those.)
The same thing happens with wind power, which is even cheaper than solar today, as I’ve documented here. (Note, again, that Lomborg isn’t a fan of wind energy either — basically, he’s just not a fan of deploying clean energy.)
Now, as implied above, utility companies’ inability to charge more than a pretty penny for peak electricity (since homes are now providing it themselves) might very well be hurting their profits. But should energy policy be about making sure traditional, rich utility companies make a hefty profit, or should it be about what’s best for the citizenry? (Tough one, I know… if you’re a politician.)
2. Solar power is already cheaper than fossil fuels and nuclear. Solar’s levelized cost of electricity (LCOE) may not be, and if that’s the only thing that matters to Lomborg, his claim that solar is more expensive than coal, natural gas, or nuclear, might be right. However, if you look at a couple of important factors, solar is already cheaper.
First, I know folks like Lomborg don’t like to do this, but if you take the true cost of all energy sources into account (including health costs not included in the LCOE), solar is already cost-competitive (and subsidies to support solar adjust for failures in the market that leave out those important externalities).
Furthermore, if people actually evaluated the price of solar based on the true lifespan of solar power systems, the situation gets even better. If you do this and even continue to leave out externalities like health costs, solar is already cost-competitive in many or most regions.
But we’re not done yet! As discussed on our solar energy page, the projected cost of solar in a few years is already lower than coal and nuclear at that time. And the important but often overlooked point here is that it takes years to get a new coal or nuclear power plant up and running. So, by the time you had a new plant up and running, the electricity from it would already be more expensive than the projected price of solar at that time (and note that solar prices have been falling faster than anyone predicted in previous years). Here are two images and a video on this matter from our Solar Power page (linked above):
3. Solar doesn’t work at night (for the most part) — who cares?! Lomborg focuses a little on solar not working at night (solar PV, that is). Yes, solar doesn’t produce electricity at night, and the water doesn’t come out of the shower head when I turn the shower off — no problem. Wind is often more abundant at night, so mixing wind and solar works well (which Germany and anyplace with much clean energy does). Additionally, as noted above, peak demand isn’t at night, and what solar is most useful for (at the moment) is covering peak demand. Aside from wind, there are many other ways to fill in at night when needed, but the bottom line is that diversity is key, and no one is ever going to try power a country 100% from solar (at least not in the near future), so this is really a completely moot point.
4. Solar power from Germany is sometimes exported and electricity from other power sources is sometimes imported. Lomborg makes a fuss about power from other countries sometimes needing to be imported when solar power production is low. This need is not unique to solar, though, and isn’t really an issue. As I noted about a month ago, Germany’s abundant solar power helped to save France’s butt when it got really cold in France and nuclear power production dipped. The key, again, is a good diversity of energy sources, a good grid, and good planning. Solar is actually very flexible, one of its strengths, unlike nuclear and coal baseload power that takes ages to start up (sometimes days) and can actually really “get in the way” as a result of that, as the article linked above notes. Solar’s intermittency is not a problem at this level of integration and it’s not likely to be any time soon (if ever). But why not knock a potential weakness while we have the chance — right, Lomborg?
5. Solar PV drives electricity bills down. Again, Lomborg comes back to the claim that solar is going to wildly drive up consumer electricity bills. The key to spreading a myth is pounding it into you head, you know? As described above, solar PV drives down the price of electricity. In the medium- to long-long run, solar installed today is clearly a cost-effective solution to new power production. And, of course, if you put solar on your home, the better off you are!
6. The cost of global warming inaction is MUCH greater than the cost of strong global warming action now. As noted the other day, a new study by former Microsoft executive Nathan Myhrvold and climate scientist Ken Caldeira finds that we need a 100% shift to truly clean energy now in order to avert serious climate consequences in the second half of this century (the climate consequences of the coming decades from previous emissions are basically already locked into place).
Bill Gates and U.S. Energy Secretary Steven Chu emphasized basically the same thing this week at the ARPA-E 2012 summit.
Perhaps more importantly, for countering Lomborg’s claim that the cost of global warming action and clean energy deployment today is too expensive for us (that it’s more expensive than not acting), Yale economist has shown that the cost of climate inaction is MUCH greater than the cost of action. Here’s a chart on his findings:
Others have come to the same finding. Lomborg’s claims to the contrary, without any supporting evidence, are just plain untrue.
6.5. Clean energy deployment today is a MUST in order to address global warming. Woops, I jumped the gun a bit. Debunking Lomborg’s claim that “focus first on increasing research and development to make green-energy technology cheaper and more competitive,” much of what was included in the point above is again relevant. We need action now, not in 10 years. However, even beyond that, this R&D to cut costs, not deployment, is a false choice. Firstly, deployment is one of the best ways to get costs down. Solar prices dropped off a cliff in the last year, and have for years, largely due to increased demand and deployment. This creates better economies of scale and also stimulates private sector innovation. Furthermore, we don’t need one or the other, but both. We need continued R&D, but certainly not at the expense of extremely effective policies stimulating clean energy installation around the world.
7. Germany’s solar policy has been a wild success. One of the most ridiculous claims Lomborg makes, perhaps, is that “Germany’s experiment with subsidizing inefficient solar technology has failed.” If anything, the policy has been so successful that it may need a bit of restructuring. Again, as Susan noted: “New solar installations of a record 7.5 GW in 2011, far outpacing the country’s 2.5 to 3.5 GW plans.” There’s a reason why countries around the world have gone the same route as Germany — the policy has been a wild success.
8. Today, we should try to reduce price of solar PV, first and foremost, with rapid deployment. Woops, I jumped the gun again. The main summary of why deployment is critical to further reducing the price of solar, not just R&D, is above. Basically, we’ve got the technologies to the point we need to produce them at a cost-competitive level, and the best way to further bring down the costs is with deployment. This is the route Google has now gone, and this is the route advised by studies and analysts. Of course, as stated multiple times above, not ignoring R&D, but not ignoring the potential from deployment either.
9. Solar produces green jobs. Lomborg uses the following quote as an absurd scare tactic: “many ‘green jobs’ are being exported to China, meaning that Europeans subsidize Chinese jobs.” Yikes, China is getting jobs out of a German solar energy boom, oh no! The fact of the matter is, this fast-growing solar industry is creating jobs around the world. The U.S. now has over 100,000 jobs from the solar energy industry. Germany has even more. The EU has over 1 million jobs in the clean energy arena. One of the really nice things about solar is that it creates a ton of jobs for local, small business. Solar installation and maintenance is, surely, giving Germany a huge jobs boost. Killing solar policies might take away some Chinese jobs (if that’s your main aim… and why should it be?), but it will also take away good jobs for Germans.
10. Germany’s solar energy growth is having a tremendous, positive impact on CO2 emissions. It’s so off point, I almost don’t even want to share this quote from Lomborg, but for the sake of debunking it, here it is: “the actual effect of extra solar panels in Germany leads to no CO2 reductions, because total emissions are already capped…. Germans simply allow other parts of the EU to emit more CO2.” How are you going to cut CO2 emissions if you don’t deploy clean energy?! Seriously, I think this claim takes the cake. Yes, policies are in place that require cutting emissions, and solar PV in Germany helps to hit those targets. Without solar in Germany, that would certainly be harder, and hey, it might not even happen. But Lomborg seems to think that it magically happens without doing anything and, so, doing something is counterproductive. Got that? Furthermore, there’s a huge push in the EU now to considerably raise its emissions reductions target (from 20% by 2020 to 30% by 2020), something that a recent study found would save the EU money. Certainly, such an improved target wouldn’t be possible, let alone talked about, if countries like Germany hadn’t aggressively reduced emissions ahead of schedule!
All in all, Lomborg tries to scare the reader (probably successfully in most cases) with big number that have no context and gross claims that the average reader wouldn’t know are just plain false. It’s a disservice to society, a disservice to Germany, and a disservice to generations to come that might have to live with the consequences if Lomborg (and friends) influence enough people.
To reiterate, as Giles Parkinson of REneweconomy writes, the German solar PV subsidy cut is “not so much because of the problems of trying to match a tariff rate with the plunging costs of solar, or the potential cost of consumers, but because solar PV is starting to create a large hole in the business models of the conventional power industry.”
Furthermore, “prices in peak power periods in the middle of the afternoon on sunny days are running lower than base power prices of 2am.” (In other words, electricity is now cheaper when it has traditionally been least expensive than it is when it should be least expensive.)
And: “The merit order impact was detailed in a recent study by IZES, which found that solar power has reduced the price of electricity on the EPEX exchange by up to 40 percent in the early afternoon when the most solar power is generated. This causes massive problems for generators of conventional power, who rely on increases in peak power prices to deliver their profit margins.”
Some quick details on the German solar subsidy cuts from James Montgomery of Renewable Energy World: “The newly proposed subsidies cut the FiT levels by up to 30 percent, limit the payback on electricity produced, and eliminate a self-consumption bonus. They also take effect on Jan. 2013 but apply to everything installed by March 9, not April 1 as many had thought. (The previous FiT structure would have cut the levels by another 15 percent in July.)”
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