Sunday, July 01, 2012

Same technology, different S-curves, different results.

Using solar power in areas where there's no power grid, e.g. in Asia and Africa, looks a lot more promising and cost-effective than introducing the same solar power technology in mature energy systems in the US or Europe.
(MIT Tech Review, June 8, 2012). Diesel is a major source of power in south Asia and Africa, where many areas lack access to the grid and frequent blackouts prompt those who can afford it to install backup generators. These markets could help a solar industry that’s struggling with low profit margins due to an oversupply of panels. In turn, the lower prices for solar power could speed up deployment in poor countries by providing a more economical alternative to diesel-powered pumps and generators, and a much faster path to electrification than waiting for grid infrastructure.

One of the first economical applications for solar is replacing diesel-powered irrigation pumps, Gopalan says. These pumps don’t have to run at night, so batteries aren’t needed, keeping costs down. “The total available market in India alone is 15 to 20 gigawatts, and irrigation pumping is a massive application in all of Asia and Africa,” he says. For perspective, the current total installed capacity for solar power is 65 gigawatts, according to the management consulting firm McKinsey.

In Asia and Africa, introduction of the technology does not depend on infrastructure investment. Furthermore, as recent power outages in the US show, the bottleneck in the energy system is not power generation, but power distribution.  Also, Germany's introduction of "green" energy involves massive investment into new distribution lines. As a result, adoption of the same technology in different areas produces dramatically different economic outcomes.

This difference is obvious to me on the personal level as well. Every day I walk my dog by our local high school. Two years ago it used a government subsidy and a local bond to install solar panels to cover its parking lot. Paradoxically, during the summer months when the largest amount of solar power is generated, the school is not in session. Therefore, the power cannot be used locally and has to be distributed through the grid - with losses - to remote users. In other words, there's a fundamental mismatch between the power generation and the power use patterns.

In contrast, the MIT article cited above talks about a solar panel installation in Asia that feeds irrigation pumps. Because the pumps have to work the hardest when there's a lot of sunshine, solar-based power generation and power consumption by the pumps are almost perfectly synchronized. Therefore, there's no need to store or distribute the power - with inevitable losses - to other users.

As we can see, economic efficiency of the same technology is quite different in these two cases. Here in California, we face a trade-off: the "greener" the energy, the more expensive it is. Opposite to that, in Asia the trade-off is broken: the "greener" the energy, the cheaper it is. Clearly, the technology's upside is much greater there.

tags: s-curve, synthesis, growth, distribution, infrastructure, niche construction, 4q diagram, market

No comments: