Tuesday, February 20, 2007

Cheap solar power poised to undercut oil and gas by half

Ambrose Evans-Pritchard
The Telegragh, London

Within five years, solar power will be cheap enough to compete with carbon-generated electricity, even in Britain, Scandinavia or upper Siberia. In a decade, the cost may have fallen so dramatically that solar cells could undercut oil, gas, coal and nuclear power by up to half. Technology is leaping ahead of a stale political debate about fossil fuels.

Anil Sethi, the chief executive of the Swiss start-up company Flisom, says he looks forward to the day - not so far off - when entire cities in America and Europe generate their heating, lighting and air-conditioning needs from solar films on buildings with enough left over to feed a surplus back into the grid. The secret? Mr Sethi lovingly cradles a piece of dark polymer foil, as thin a sheet of paper. It is 200 times lighter than the normal glass-based solar materials, which require expensive substrates and roof support. Indeed, it is so light it can be stuck to the sides of buildings.

Rather than being manufactured laboriously piece by piece, it can be mass-produced in cheap rolls like packaging - in any colour. The “tipping point” will arrive when the capital cost of solar power falls below $1 (51p) per watt, roughly the cost of carbon power. We are not there yet. The best options today vary from $3 to $4 per watt - down from $100 in the late 1970s.

Mr Sethi believes his product will cut the cost to 80 cents per watt within five years, and 50 cents in a decade. It is based on a CIGS (CuInGaSe2) semiconductor compound that absorbs light by freeing electrons. This is then embedded on the polymer base. It will be ready commercially in late 2009.

“It’ll even work on a cold, grey, cloudy day in England, which still produces 25pc to 30pc of the optimal light level. That is enough, if you cover half the roof,” he said.

“We don’t need subsidies, we just need governments to get out of the way and do no harm. They’ve spent $170bn subsidising nuclear power over the last thirty years,” he said.

His ultra-light technology, based on a copper indium compound, can power mobile phones and laptop computers with a sliver of foil. “You won’t have to get down on your knees ever again to hunt for plug socket,” he said

Michael Rogol, a solar expert at Credit Lyonnais, expects the solar industry to grow from $7bn in 2004 to nearer $40bn by 2010, with operating earnings of $3bn. The sector is poised to outstrip wind power. It is a remarkable boom for a technology long dismissed by experts as hopelessly unviable.

Mr Rogol said he was struck by the way solar use had increased dramatically in Japan and above all Germany, where Berlin’s green energy law passed in 2004 forces the grid to buy surplus electricity from households at a fat premium. (In Britain, utilities may refuse to buy the surplus. They typically pay half the customer price of electricity.)

The change in Germany’s law catapulted the share price of the German flagship company SolarWorld from €1.38 (67p) in February 2004 to over €60 by early 2006. The tipping point in Germany and Japan came once households twigged that they could undercut their unloved utilities. Credit Lyonnais believes the rest of the world will soon join the stampede.

Mike Splinter, chief executive of the US semiconductor group Applied Materials, told me his company is two years away from a solar product that reaches the magic level of $1 a watt.

Cell conversion efficiency and economies of scale are galloping ahead so fast that the cost will be down to 70 US cents by 2010, with a target of 30 or 40 cents in a decade. “We think solar power can provide 20pc of all the incremental energy needed worldwide by 2040,” he said.

“This is a very powerful technology and we’re seeing dramatic improvements all the time. It can be used across the entire range from small houses to big buildings and power plants,” he said.

“The beauty of this is that you can use it in rural areas of India without having to lay down power lines or truck in fuel.”

Villages across Asia and Africa that have never seen electricity may soon leapfrog directly into the solar age, replicating the jump to mobile phones seen in countries that never had a network of fixed lines. As a by-product, India’s rural poor will stop blanketing the subcontinent with soot from tens of millions of open stoves.

Applied Materials is betting on both of the two rival solar technologies: thin film panels best used where there is plenty of room and the traditional crystalline (c-Si) wafer-based cells, which are not as cheap but produce a higher yield - better for tight spaces.

Needless to say, electricity utilities are watching the solar revolution with horror. Companies in Japan and Germany have already seen an erosion of profits because of an effect known “peak shaving”. In essence, the peak wattage of solar cells overlaps with hours of peak demand and peak prices for electricity in the middle of the day, crunching margins.

As for the oil companies, they are still treating solar power as a fringe curiosity. “There is no silver bullet,” said Jeroen Van der Veer, Shell’s chief executive.

“We have invested a bit in all forms of renewable energy ourselves and maybe we’ll find a winner one day. But the reality is that in twenty years time we’ll still be using more oil than now,” he said.

Might he be wrong?

Sunday, February 11, 2007

California Split

New York Times
Gar Alperovitz

SOMETHING interesting is happening in California. Gov. Arnold Schwarzenegger seems to have grasped the essential truth that no nation — not even the United States — can be managed successfully from the center once it reaches a certain scale. Moreover, the bold proposals that Mr. Schwarzenegger is now making for everything from universal health care to global warming point to the kind of decentralization of power which, once started, could easily shake up America’s fundamental political structure.

Governor Schwarzenegger is quite clear that California is not simply another state. “We are the modern equivalent of the ancient city-states of Athens and Sparta,” he recently declared. “We have the economic strength, we have the population and the technological force of a nation-state.” In his inaugural address, Mr. Schwarzenegger proclaimed, “We are a good and global commonwealth.”

Political rhetoric? Maybe. But California’s governor has also put his finger on a little discussed flaw in America’s constitutional formula. The United States is almost certainly too big to be a meaningful democracy. What does “participatory democracy” mean in a continent? Sooner or later, a profound, probably regional, decentralization of the federal system may be all but inevitable.

A recent study by the economists Alberto Alesina of Harvard and Enrico Spolaore of Tufts demonstrates that the bigger the nation, the harder it becomes for the government to meet the needs of its dispersed population. Regions that don’t feel well served by the government’s distribution of goods and services then have an incentive to take independent action, the economists note.

Scale also determines who has privileged access to the country’s news media and who can shape its political discourse. In very large nations, television and other forms of political communication are extremely costly. President Bush alone spent $345 million in his 2004 election campaign. This gives added leverage to elites, who have better corporate connections and greater resources than non-elites. The priorities of those elites often differ from state and regional priorities.

James Madison, the architect of the United States Constitution, understood these problems all too well. Madison is usually viewed as favoring constructing the nation on a large scale. What he urged, in fact, was that a nation of reasonable size had advantages over a very small one. But writing to Jefferson at a time when the population of the United States was a mere four million, Madison expressed concern that if the nation grew too big, elites at the center would divide and conquer a widely dispersed population, producing “tyranny.”

Few Americans realize just how huge this nation is. Germany could fit within the borders of Montana. France is smaller than Texas. Leaving aside three nations with large, unpopulated land masses (Russia, Canada and Australia), the United States is geographically larger than all the other advanced industrial countries taken together. Critically, the American population, now roughly 300 million, is projected to reach more than 400 million by the middle of this century. A high Census Bureau estimate suggests it could reach 1.2 billion by 2100.

If the scale of a country renders it unmanageable, there are two possible responses. One is a breakup of the nation; the other is a radical decentralization of power. More than half of the world’s 200 nations formed as breakaways after 1946. These days, many nations — including Brazil, Britain, Canada, China, France, Italy and Spain, just to name a few — are devolving power to regions in various ways.

Decades before President Bush decided to teach Iraq a lesson, George F. Kennan worried that what he called our “monster country” would, through the “hubris of inordinate size,” inevitably become a menace, intervening all too often in other nations’ affairs: “There is a real question as to whether `bigness’ in a body politic is not an evil in itself, quite aside from the policies pursued in its name.”

Kennan proposed that devolution, “while retaining certain of the rudiments of a federal government,” might yield a “dozen constituent republics, absorbing not only the powers of the existing states but a considerable part of those of the present federal establishment.”

Regional devolution would most likely be initiated by a very large state with a distinct sense of itself and aspirations greater than Washington can handle. The obvious candidate is California, a state that has the eighth-largest economy in the world.

If such a state decided to get serious about determining its own fate, other states would have little choice but to act, too. One response might be for an area like New England, which already has many regional interstate arrangements, to follow California’s initiative — as it already has on some environmental measures. And if one or two large regions began to take action, other state groupings in the Northwest, Southwest and elsewhere would be likely to follow.

A new wave of regional devolution could also build on the more than 200 compacts that now allow groups of states to cooperate on environmental, economic, transportation and other problems. Most likely, regional empowerment would be popular: when the Appalachian Regional Commission was established in 1965, senators from across the country rushed to demand commissions to help the economies and constituencies of their regions, too.

Governor Schwarzenegger may not have thought through the implications of continuing to assert forcefully his “nation-state” ambitions. But he appears to have an expansive sense of the possibilities: this is the governor, after all, who brought Prime Minister Tony Blair of Britain to the Port of Long Beach last year to sign an accord between California and Britain on global warming. And he may be closer to the mark than he knows with his dream that “California, the nation-state, the harmonious state, the prosperous state, the cutting-edge state, becomes a model, not just for the 21st-century American society, but for the larger world.”

Gar Alperovitz, a professor of political economy at the University of Maryland, College Park, is the author of “America Beyond Capitalism."