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Published on September 12th, 2013 | by Giles Parkinson

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How The Solar PV Industry Became A Global Phenomenon

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September 12th, 2013 by
 

This article first published on RenewEconomy

The recent slew of quarterly reports from the world’s major solar PV manufacturers have delivered some encouraging news: surplus capacity is being removed, manufacturing costs continue to fall, selling prices have stabilised and margins are improving. Some solar manufacturers may even post a profit later this year or in 2014.

But by far the most impressive piece of information was the extent to which the industry is growing in new markets. The influence of Europe, which kicked off the solar PV boom nearly a decade ago with its feed-in tariffs, is fading. China, Japan and the US will compete for domination in the coming years, but strong markets in the rest of Asia, Africa and South America are also emerging.

“The global PV market is becoming more diversified,” says Liangshing Miao, the chairman and CEO of Yingli Solar, the world’s biggest manufacturer of solar PV. “China, the US, Japan and other new and emerging markets, will become the main drivers of demand in the second half of this year. (We are witnessing) the globalization of the PV industry.”

This is a recurring theme in the industry. Last month, Deutsche Bank published an analysis which talked of a major “inflection point” in the global PV industry. Analyst Vishal Shah said that three-quarters of the world’s market will be “sustainable” for solar within 18 months, meaning there is an economic case to install solar PV with little or no subsidy.

More recently, Deutsche Bank noted that the US – the world’s biggest electricity market – was rapidly approaching the point where more than half of its states were at “grid parity”, also meaning that no additional subsidies are required for solar PV. It predicted the US market would reach annual installations of 16GW by 2016, and have total installed capacity of 50GW.

But it’s not jut the big four markets that are offering huge opportunities for solar PV. In another report, Deutsche said Chile could become the first subsidy-free market in the world, explaining why it had more than 3,500MW of projects in the pipeline.

Robert Petrina, Yingli’s head in the Americas, says sales in Latin America have surged 1,700 per cent over the last year, utility-scale projects are popping up everywhere and distributed generation is very strong.

He cited Chile, Mexico, Ecuador and Brazil (Yingli is a sponsor of the FIFA World Cup in 2014) as being among the strongest markets in Latin America. It now operates in 18 countries there. “The signals overwhelmingly point to continued development in accelerated PV adoption,” Petrina says. “We are seeing new markets open up and project sizes increasing in those regions.”

Yingli published this graph in relation to its 2nd quarter results to illustrate how demand is moving away from Europe. The most interesting parts are the first and third columns, because they highlight how Europe has shrunk from more than 50 per cent of demand to just over one quarter.

Screen-Shot-2013-09-10-at-8.39.01-AM

Yingli’s Miao says the company is already redeploying staff and resources to other emerging markets in Africa and Asia.

In South Africa, the government has already signed contracts for 1GW of solar PV and is currently holding an auction for another 400MW of PV capacity. The provincial government of Gauteng announced earlier this month it would spend $1 billion installing 300MW of solar on the rooftops of all state-owned buildings.

In Zimbabwe, solar developer Twalumba has reportedly signed an MoU with British company Thompson Cole to develop eight solar farms totaling 600MW over the next 15 months, with the help of Chinese and British financing. Saudi Arabia is gearing up to make a massive investment in solar PV, along with other Gulf and north African countries. On a smaller level, Ethiopia is half way through a World Bank-sponsored program to bring distributed solar to 25,000 households not connected to the grid. Private companies offer similar programs in Africa and Asia to some of the 1.6 billion people who don’t have electricity.

In Asia, India is working its way through its ambitious program to have 20GW of solar PV by 2022, Pakistan has just announced plans for 700MW of solar capacity in Punjab province, Bangladesh already has installed a million off-grid solar systems, and has announced plans for another 500MW deployment.

Thailand and Malaysia are emerging as strong markets, and a new source of manufacturing. Even Brunei is looking at introducing a feed-in tariff for solar, albeit to help the oil-rich sultanate reach an incredibly modest renewables target of just 10 per cent by 2035. Russia is also holding a tender for 700MW of solar projects.

The predictions of Deutsche Bank, other investment banks, and individual analysts such as Tony Seba, are based on the premise that fossil fuel prices will continue to rise, while solar PV costs will continue to fall. This last assumption is contested by many in the traditional utilities business, but these two graphs below tell us much about the changing dynamics of the industry, and puncture holes in the views of some that the price falls in solar PV modules are unsustainable.

The first graph on the left (from Yingli’s 2nd quarter accounts) shows that in just the past year, the non-silicon cost of PV modules has fallen by 18 per cent. And on the right, we see that because prices have stabilised, or even risen in some markets, the gross margins of the company have rebounded. The fall in costs are consistent with a recent study by the National Renewable Energy Laboratory and the Massachusetts Institute of Technology that suggests production scale, rather than low labour costs, has driven China’s boom in manufacturing PV modules, and delivered its cost superiority of other manufacturers.

Screen-Shot-2013-09-10-at-8.40.26-AM

Intriguingly, Yingli chief strategy officer Yiyu Wang said that project costs for its current pipeline of 130MW in utility-scale solar projects in China are about $1.03-$1.05 a watt. That is less than half the cost of smaller projects in Australia, such as those to be built under the ACT Big Solar program, and one-third of the cost of AGL Energy’s 155MW solar plant proposed for Broken Hill and Nyngan in NSW. Wang suggested that Yingli would generate a return in the “higher mid teens” for these projects.

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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • Bob_Wallace

    “Yingli chief strategy officer Yiyu Wang said that project costs for its current pipeline of 130MW in utility-scale solar projects in China are about $1.03-$1.05 a watt.”

    That is $1/Watt.

    $1/Watt in the US would mean 5c/kWh (SW) to 6c/kWh (NE) electricity.

    “Wang suggested that Yingli would generate a return in the “higher mid teens” for these projects.”

    Those are some sweet profits.

  • JamesWimberley

    The big news here is Yingli´s 18% cuts in non-silicon production cuts in one year. This is evidence for the way-out optimistic scenario (I think it was floated in a McKinsey report) that the solar learning curve is actually going to speed up. For instane, there is after al no fundeamental reason why other markets should not match German soft costs quite rapidly; there are no hidden secrets.

  • Shiggity

    The free market really is amazing. In only 10 years (2005-2015) it figured out how to continue growing without oil. In that time frame the Leaf, the Volt, the Model S all came out, the Prius surged to be a top selling vehicle. Wind and solar both trended exponentially and batteries became economical in applications people thought would take decades longer.

    No matter how many facts you show some people, they still won’t accept it. When you’ve lived with oil for your entire life and the major publications refuse to run even one story about renewable energy it must be hard to accept a paradigm shift as monumental as this. We’re through the looking glass and the perceptive will make immeasurable amounts of money. Don’t believe me? Checkout renewable energy mutual funds and ETFs.

    • Steeple

      The free market really is amazing; we can’t forget that lesson. This is a really exciting time for the energy space.

      • Grad

        Free market has created problem of global warming and unsustainable economy in the first place. Don’t forget that.

        • Steeple

          Free markets and Capitalism are indeed the worst economic models, except for every other model tried in the history of mankind.

          Don’t forget that while you type this from the comfort of wherever you are.

          • Bob_Wallace

            A totally free market would be a total disaster.

            Can you say “monopoly”?

            Can you say “We all work for the same company and buy everything we purchase from the company store?”.

            Can you say “slave”?

          • Steeple

            Geez, I make a comment backing Shiggity’s on free markets and it get a comment about slavery. It’s Friday, Bob. Have a cold one.

            Yeah, monopolies happened over 100 years ago when Rockefeller roamed the Earth. Not much in the way of monopoly power going on now. Aside from the Federales poor handling of banks, I think we have plenty of regulatory controls on our free market economy.

            If you want to look for monopolies, go to Russia or China.

          • Bob_Wallace

            You’re right. We suffer from few monopolies and near-monopolies in the US because we regulate the market and don’t let it run free.

            (The American telephone monopoly was broken up in 1984.)

          • Grad

            If other economic models didn’t work that doesn’t mean that free market and capitalism works.

            Global warming is a real problem and if we don’t fix it it’s gonna be utter calamity. So much for free markets and unlimited exploitation of environment.

          • Bob_Wallace

            Free markets and capitalism work extremely well.

            They maximize gains but don’t do much for things which aren’t priced. If there’s no price on clean water, for example, then they’ll do nothing to keep water clean. In fact, if costs can be saved by dumping waste into the water they will destroy water quality.

            If we don’t keep markets and capitalism well enough regulated we’ll get run over.

            It’s a lesson we seem to have to relearn from time to time.

          • A Real Libertarian

            The lessons of economic development worldwide show that Free Markets are how you keep poor countries sources of cheap resources and cheap labor instead of them becoming economic competitors.
            From the opium wars and the white mans burden to banana republics and Smedley Butler to the CIA’s post world war II reign of terror.
            That’s exactly what any free market put in practice in any place of significance has been.

          • Bob_Wallace

            I’m not sure I can completely buy that.

            Market forces can take production to places where labor is cheap. But moving production to those places often starts economic growth which can build into turning the area into an economic player.

            I saw that growing up in the Appalachian region when the textile industry moved in. And we’ve certainly seen it happen in China and other Asian countries.

          • A Real Libertarian

            All the Asian countries used government intervention to build their economies. You should check out Ha-Joon Chang’s work, he’s especially qualified because he grew up in South Korea in the 60s and 70s. In 1963 South Korea had a per-capita GDP HALF that of Ghana.

            As for Appalachia I’m betting that was sometime between 1940 and the late 60s?

          • Bob_Wallace

            Governments were involved, but it was cheap labor that provided income for the nations.

            Japan pulled itself back up via cheap labor following WWII.

            It seems like the textile mills were moving on before the late ’60s. By then we had other, better paying, industries up and running.

          • A Real Libertarian

            China had cheap labor for the entire 19th century. India too.

            They didn’t start developing until the government could start setting economic policy instead of foreign governments.

          • Bob_Wallace

            I miss your point.

            Cheap labor is a ladder to a more vibrant economy. Obviously other factors could stop growth.

            In the 19th Century the US was largely an agricultural country. We didn’t buy all that much from anyone and we had plenty of inexpensive labor for the modest amount of manufacturing we did.

          • A Real Libertarian

            And how did America get rich?

            Highest tariffs in the world. Massive government investment in infrastructure. Complete disregard for intellectual property. All the things free market dogma says will destroy an economy.

            Cheap labor is only a ladder to a more vibrant economy if government policies support growth. If they don’t then then a country always going to be poor and underdeveloped.

          • Bob_Wallace

            How did America get rich?

            We came out of WWII with very little damage to our country. We had huge amounts of new factories and tools we had built for the war effort. We hadn’t tapped our natural resources very heavily. We had built major amount of new infrastructure to support the war and that infrastructure supported post war industry.

            And we had a generation of very serious people who had been through the Great Depression and then a very major war. We took many of those serious people and gave them a free education.

            Our competition, Europe and Asia, had their factories, mines and infrastructure bombed into rubble. They lost a much larger portion of their workers to the war. Even their agriculture was badly damaged. Much of their natural resources has been used for the war.

            We had an incredible advantage over most of the rest of the world.

            This was also the time at which science was really starting to give us useful answers. We took this new generation of scientists and engineers and put them to work building an information base for us to move technology at a speed never even dreamed of in the past.

            Obviously a government can interfere with growth and development. The socialism/communism experiments were massive failures. India’s decision to become self-dependent and to force full employment kept them from growing.

          • A Real Libertarian

            “Obviously a government can interfere with growth and development.”

            But if a government doesn’t interfere, then growth and development are an impossibility. Sure government can hold development back, but it must be involved in the first place for it to be possible in the first place.

            “The socialism/communism experiments were massive failures.”

            Not to sure about that. If you compare the Soviet Union in 1921 and 1991 the later is much, much better then the former even with the civil war, Stalin, Hitler and a generation of leaders only capable of coasting along.

            China is much better off now then in 1949 even with everything they’ve gone through.

            And of course socialism and communism are in no way the same thing and neither the USSR nor China are communist in any way Marx would see.

            “India’s
            decision to become self-dependent and to force full employment kept them
            from growing.”

            But there has been no famine on the scale of those during the Raj

          • Bob_Wallace

            ” If you compare the Soviet Union in 1921 and 1991 the later is much, much better then the former even with the civil war, Stalin, Hitler and a generation of leaders only capable of coasting along.

            China is much better off now then in 1949 even with everything they’ve gone through.”

            How about we compare 1921 Russia to 1991 Russia along side 1921 US to 1991 US?

            And how about we take a look at see when, well after 1949, China started getting better off. I was there in the 1980s and it certainly started well after then.

          • A Real Libertarian

            “How about we compare 1921 Russia to 1991 Russia along side 1921 US to 1991 US?”

            OK, in 1921 the USSR was near destroyed after the first world war and the civil war, 10 million dead, industry in the toilet (steel production was about 5% of 1914 levels IIRC) and the best agricultural land were battlefields.

            In 1991 the USSR was falling apart, there were lines to get meat. There were coups aplenty. And then it just collapsed. It was still better then life in most of the oligarch ruled, mafiya infested post-soviet republics but that’s not saying much.

            In 1921 the US was putting down the last of the labor uprisings the Palmer Raids kicked off, It was near unharmed by the war, The European imperial powers had been anywhere from heavily damaged (Britain) to outright destroyed (Austria-Hungary), and it had built a massive amount of factories for the war that could be re-purposed for peacetime manufacturing.

            In 1991 the US was hit with one of the worst postwar recessions to that point, was faced with a out of control crime problem (Combination of the contra crack epidemic, the war on drugs and Nixon’s benign neglect policy all hitting critical mass about the same time) and a quadrupled national debt.

            So the USSR improved more but was worse off at both times (of course Russian guy suffers most).

            China was better off in 1979 then 1949 on pretty much every measurement of social welfare. The economy didn’t pick up until the 80s but since then it’s never been a free market.

          • Bob_Wallace

            I have to admit that I’m not following your thinking, so I’m going to let it go.

          • A Real Libertarian

            Let’s see if I can explain:

            1. Free markets don’t exist, the lack of government intervention in the economy is forced on poor countries by rich countries. The rich countries got that way via government intervention and don’t want any competitors, so they kick away the ladder (like fossils and nukes demanding no subsides for renewable energy while sucking as much as they can for themselves).

            2. The Soviet Union and Red China, while still crapsacky were much better then what was before them. Even if you buy the whole “100 million dead because of Communism” shtick, that’s still a drop in the bucket compared to Imperialism’s body-count.

            3. America doesn’t really have the moral high ground here. Anything the Soviets have done, America has done too, just not always inside the borders. e.g. Bolsheviks used chemical weapons to put down peasant uprisings? So did the American government (Blair Mountain). Stalin sent lots of people to the GULAG? Japanese-American internment (not as bad but still an inexcusable stain on FDR and Americas legacy) etc. etc.

            Anything else I’ve missed just ask.

          • A Real Libertarian

            I was referring to the 19th century.

          • agelbert

            Maybe the first half of the 19th century. In the second half, the US was the most dangerous, place (accidents causing death or maiming from machinery) in the world. It was this free market madness that led to the reforms in the workplace and hourly wages as well as many child labor laws. The free market you like so much would have done nothing to change that unless they had been forced by we-the-people in the form of government regulation.

            Mark Aldrich, Smith College

            The dangers of work are usually measured by the number of injuries or fatalities occurring to a group of workers, usually over a period of one year. 1 Over the past century such measures reveal a striking improvement in the safety of work in all the advanced countries. In part this has been the result of the gradual shift of jobs from relatively dangerous goods production such as farming, fishing, logging, mining, and manufacturing into such comparatively safe work as retail trade and services. But even the dangerous trades are now far safer than they were in 1900. To take but one example, mining today remains a comparatively risky activity. Its annual fatality rate is about nine for every one hundred thousand miners employed. A century ago in 1900 about three hundred out of every one hundred thousand miners were killed on the job each year. 2

            The Nineteenth Century

            Before the late nineteenth century we know little about the safety of American workplaces because contemporaries cared little about it. As a result, only fragmentary information exists prior to the 1880s. Pre-industrial laborers faced risks from animals and hand tools, ladders and stairs. Industrialization substituted steam engines for animals, machines for hand tools, and elevators for ladders. But whether these new technologies generally worsened the dangers of work is unclear. What is clear is that nowhere was the new work associated with the industrial revolution more dangerous than in America.

            US Was Unusually Dangerous

            Americans modified the path of industrialization that had been pioneered in Britain to fit the particular geographic and economic circumstances of the American continent. Reflecting the high wages and vast natural resources of a new continent, this American system encouraged use of labor saving machines and processes. These developments occurred within a legal and regulatory climate that diminished employer’s interest in safety. As a result, Americans developed production methods that were both highly productive and often very dangerous. 3

            Accidents Were “Cheap”

            While workers injured on the job or their heirs might sue employers for damages, winning proved difficult. Where employers could show that the worker had assumed the risk, or had been injured by the actions of a fellow employee, or had himself been partly at fault, courts would usually deny liability. A number or surveys taken about 1900 showed that only about half of all workers fatally injured recovered anything and their average compensation only amounted to about half a year’s pay. Because accidents were so cheap, American industrial methods developed with little reference to their safety. 4

            Mining

            Nowhere was the American system more dangerous than in early mining. In Britain, coal seams were deep and coal expensive. As a result, British mines used mining methods that recovered nearly all of the coal because they used waste rock to hold up the roof. British methods also concentrated the working, making supervision easy, and required little blasting. American coal deposits by contrast, were both vast and near the surface; they could be tapped cheaply using techniques known as “room and pillar” mining. Such methods used coal pillars and timber to hold up the roof, because timber and coal were cheap. Since miners worked in separate rooms, labor supervision was difficult and much blasting was required to bring down the coal. Miners themselves were by no means blameless; most were paid by the ton, and when safety interfered with production, safety often took a back seat. For such reasons, American methods yielded more coal per worker than did European techniques, but they were far more dangerous, and toward the end of the nineteenth century,

            http://eh.net/encyclopedia/article/aldrich.safety.workplace.us

            All the above was environmentally unsustainable from the start.
            We need a clean biosphere based market, not the old dog eat dog free market that is destroying the planet’s air, soil and water.

          • A Real Libertarian

            And combine all that with the lack of a hereditary aristocracy to split attention, you get the unusual bloodiness of American labor wars.

          • Bob_Wallace

            People should read Upton Sinclair’s “The Jungle”.

            That gives one a good taste for how it was to work in America’s low regulation factories.

          • Steeple

            Unlimited exploitation of the environment? Not in the US. Maybe in China.

          • agelbert

            We have a long, long road ahead to even begin to reduce the massive rape of the biosphere and beggaring of the employees in the USA amounting to unrelenting corporate exploitation. If you think it is otherwise here, you need to start here:

            Corporations Cause $2.2T in Environmental Damage Every Year

            By Tom Young

            Published February 19, 2010

            LONDON, United Kingdom — [Editor's note: This article originally appeared on BusinessGreen and is reprinted with permission.]

            The world’s 3,000 largest companies are causing £1.4 trillion (US$2.2 trillion) worth of environmental damage every year, according to an unpublished U.N. report seen by the Guardian.

            The report calculated about half the cost was associated with the release of greenhouse gases, while the remainder of the costs arise from local air pollution, and damage caused by the over-use and pollution of freshwater and fisheries.
            Full article here.

            http://www.greenbiz.com/news/2010/02/19/corporations-cause-22t-environmental-damage-every-year

          • Steeple

            Nothing says Objectivity louder than the UN commissioning a report supporting what they are already doing. And with a total of 17 researchers doing a study of all of the effects of ever kind of pollution all over the planet, what could go wrong.

            Go join Karl Marx on a mountain in Tibet if you are sick of “corporate exploitation”. And dont use any modern conveniences such as air travel, packaged food, electronics, clothing, electricity and lighting, etc along the way. You wouldn’t want to support any more exploitation, would you?

          • Bob_Wallace

            Perhaps you should visit Tibet and see what capitalistic greed is doing there.

            It’s not about giving up food, travel and creature comforts. It’s about figuring out how to produce what we want in a sustainable manner.

          • A Real Libertarian

            “Nothing says Objectivity louder than the UN commissioning a report supporting what they are already doing”

            What are you talking about? (Note that if you say Agenda 21 I will quote Nelson Muntz at you).

            “And dont use any modern conveniences such as air travel”

            Think the world wars might have something to do with that?

            “packaged food”

            Who inspects food again?

            “electronics”

            Government built the internet.

            “clothing”

            You think corporations invented clothes?

            “electricity and lighting”

            I seem to recall something about the words “rural electrification” and “New Deal”. Can anybody remind me?

          • Steeple

            Orville and Wilbur

            Yeah, the FDA inspects the food that is grown on the private land that is tilled, fertilized and cared for before the crops are harvested, transported, and turned into something save and edible.

            Telephones. Radio. Television. Development of the integrated circuit. Personal computers. Distributed software. Cell phones.

            Check out the clothing people were wearing in the 1930s.

            Thomas Edison.

            And you think you are a Libertarian?

          • A Real Libertarian

            The Wright Brothers invented airplanes (as far as history is concerned). But it was the World Wars that turned them into practical forms of transportation.

            Do you have any idea how much government intervention there is in American Agriculture?

            The integrated circuit was first conceived by someone working for the British ministry of defense. The first customer for mass production was the American Air Force.

            If you’re referring to distributed computing, that was based on the internet.

            And the clothing people were wearing in the 1930s is relevant how?

            Nikola Tesla.

            I’m not the one demanding subsidies for failing industries when there is something much better to invest in.

          • agelbert

            You exhibit an abysmal ignorance of history, government and decent society. For your information, the most socialist, ‘take care of everybody whether they fail or don’t work’, are the elite parasites in our present oligarchical world society.

            Your so-called “free market” is nothing but code speech for “He who owns the gold, makes the rules” (otherwise known as the elite greedball’s “golden” rule)..

            http://www.alternet.org/why-idea-free-market-total-bs?page=0%2C0

          • A Real Libertarian

            “Take care of everybody RICH whether they fail or don’t work.”

            There, fixed that for you

          • agelbert

            Right!

            Would it be considered too lame an excuse for my error to claim that, for the elite parasites, anybody that isn’t rich is a nobody so they are automatically not part of the in group “everybody”?

            I know, I’m just grasping at straws. ;)

            Thanks for making my somewhat convoluted phraseology a little clearer. :>)

          • Steeple

            Wow, that really hurt

          • Grad

            Many products are made in China and then sold in US, so stop pointing finger.

            And US is one of the largest emitters of greenhouse gases, fracking is polluting groundwater, coal mines make lots of regional pollution, there were numerous oil spills, exploding oil platforms, massive dead zones in Gulf of Mexico, etc..

            This logic that environment is there for unlimited exploitation is deeply troubling.

          • Steeple

            I realize that people like you who seem to have no connection to the reality of how things actually work in a physical world would feel that way.

            Our emissions are very low on a unit of GDP metric. We just happen to have the worlds largest GDP without the world’s largest population. Sorry that bothers you.

            No evidence of fracking polluting ground water, although I am sure someone told you it does.

            We are dramatically reducing our coal consumption.

            Unfortunately, flammable and explosive substances do explode from time to time. Happens every where unfortunately, but a lot less often due to the tremendous effort of safety professionals.

            Dead zones in the Gulf? You can thank the Ethanol subsidy program that has led to an over farming of corn.

          • Bob_Wallace

            You’re one to talk about someone having no connection to the reality of how things actually work in a physical world.

            You live in a state of denial.

            Coal goes first, then NG follows into oblivion….

          • Steeple

            Nat Gas is undergoing a tremendous increase in demand. When do you think that trend will abate, Bob? Make your prediction.

          • A Real Libertarian

            Increase in demand + decrease in supply = ?

          • Bob_Wallace

            We’ve slowed our installation of NG plants. Unless a lot more plants are built use pretty much has a cap.

            Solar is really taking off. That means that midday demand is going to drop and NG will get turned off during those hours.

            Offshore wind is just getting going. It won’t have a big impact for a few years, but it will turn off gas during both day and night. We’ll build more onshore which will mean less gas use at night.

            Unless the uptake in EVs speeds up and nighttime wind goes to charging.
            We should know in a few months if Ambri’s liquid metal batteries deliver cheap storage. If so, gas will take another drop. Some Midwest wind farms are selling (without subsidies) for 4c. Store that at 2c and it will undercut NG.

            We’re doing pretty well with efficiency, so demand isn’t likely to cause an increase in gas use.

            The only thing that is likely to drive NG use higher over the next few years is all the coal plants going offline. I suspect for a while CCNG plants are going to get a lot of use, then plateau and start dropping.
            Oh, yeah. If a few more nuclear plants fail that will keep gas use up for a while.

            I can’t put month and year on when NG starts down. I can just see the sequence and I think we’re talking short years before NG use starts to drop.
            I suspect coal will be gone off the US grid ten years from now and NG will be on the decline. I doubt we can get most fossil fuel off our grid in less than 20 years. However, if we get another nice hearty El Nino like the 1997 one then things might change. Let the US get hit with some super heat waves and the desire to fight climate change will change the rate of change.

            Also, we’re really close to melting out the Arctic. It’s not clear how that will change our weather. If we get slapped really hard we might decide to convert to renewables faster.

            Melt a reactor and the public will force most/all reactors to close. That would extend NG’s life a bit.

            Force the gas industry to clean up their leaks and the price of gas goes up. That will speed up renewables.

            Too many variables to make accurate forecasts.

          • Bob_Wallace

            Giles just posted an interesting article that suggests that the NG peak might be sooner than later…

            “Well, there goes the myth that cheap shale gas would price renewables out of the US electricity market. Xcel Energy, one of the country’s biggest utilities, has just announced a planned major expansion of its solar and wind investments – because they are “cheaper and more reliable” than natural gas.

            In a filing to the public utilities commission in the state of
            Colorado, Xcel Energy requested permission to include 170MW of new, utility-scale solar capacity and 450MW of wind energy capacity in the state.

            The reason, Xcel Energy said, was not to meet renewable energy targets (which in Colorado happen to be 30 per cent by 2020), but because these technologies were best placed to fill basic generation needs. Solar and wind, it said, were competitive with the cost of gas-fired generation.

            “Based on generation needs, the most reliable and most cost-effective resources happen to be solar and wind,” Xcel Energy spokeswoman Michelle Aguayo told the online publication SRN. “We are not taking on solar because we have to, but because it is cost-effective and economical.”

            A lot has been written about the shale gas boom in the US and its apparent impact on other technologies, particularly renewables such as wind and solar. But its principal victims in the short term appear to be coal-fired generation and nuclear, with neither able to compete on cost – particularly with the additional burden of emissions and/or safety regulations.

            Part of Xcel Energy’s plan out to 2018 include the closure of a 108MW coal facility and the switching of another to natural gas.

            Wind is now priced at less than $50/MWh in the US, and the proposed build out of wind will take Xcel’s total wind capacity to 2,650MW – nearly equivalent to Australia’s entire capacity.”

            http://reneweconomy.com.au/2013/us-utility-chooses-wind-and-solar-cheaper-and-more-reliable-79876

          • Steeple

            I would be thrilled to see gas demand roll over so that we can preserve these valuable resources for longer.

          • A Real Libertarian

            Why is natural gas valuable?

          • Steeple

            I suspect there may be some times when the sun isn’t shining or the wind isn’t blowing when we want a clean and reliable source of power, at least speaking for Mr. And Mrs. Steeple. Nothing else is as clean and available on demand.

          • A Real Libertarian

            1. Storage

            2. Hydro (all types), Geothermal, Solar Uplift tower.

            3. Hook all the wind turbines in a 200 mile radius together and 30% of the power is as reliable as coal. Which incidentally is the amount of baseload power the utilities have been claiming is necessary for years.

          • Steeple

            1) good luck with that. Don’t forget to consider the environmental issues associated with producing the materials for what I presume are batteries.
            2) hope the environmentalists will let us keep the hydro we have already; have no idea what the economics on the other are. Seems like a lot of talk about Geothermal but not much action
            3) I’ll take fossil fuels over any combo of wind at 4PM on a hot summer day

          • A Real Libertarian

            “1) good luck with that. Don’t forget to consider the environmental
            issues associated with producing the materials for what I presume are
            batteries.”
            And compressed air and flywheels and pumped up hydro and batteries are much more environmentally friendly then fracking.

            “2) hope the environmentalists will let us keep the hydro we have
            already; have no idea what the economics on the other are. Seems like a
            lot of talk about Geothermal but not much action”
            Why wouldn’t they? The Economics are better then new nuclear and coal.

            “3) I’ll take fossil fuels over any combo of wind at 4PM on a hot summer day”
            So natural gas is superior because the modern world frightens and confuses you?

          • Steeple

            1) If compressed air and flywheels can compete, that’s great. I haven’t seen that yet in any material scale.
            2) Most Environmentalists are not swayed by economic arguments. Greed, you know.
            3) That wasn’t very nice. Answering anyway, wind doesnt blow much during the peak times of the day in the hottest parts of the country. I prefer reliablity in my power supply.

          • Bob_Wallace

            Flywheels are looking competitive in terms of grid smoothing. It’s unlikely that they would be a long term storage solution.

            Compressed air with heat storage is looking interesting. We may see it become a player.

            Environmentalists do a more complete economic analysis than those who do their math based only on how large their utility bill will be this month. When you include the cost of climate change, the cost of coal-caused health, and other external costs you get very different outcomes than if you ignore some very important costs.

            It’s cheaper to not change the oil in your car.

            Greed is what drives short term prices. How they can save a little this month even if it’s going to cost them far more over the long run. They, I guess, figure that they will somehow be able to dodge that bullet. Probably the old farts figure they’ll die before it gets bad and, well, screw everyone else.

            When someone who has been hanging around this site uses “wind doesnt blow much during the peak times of the day in the hottest parts of the country” you know that even they know they’re posting crap.

            If you don’t have a good handle on the reliability issue by now it could only be because when you get up in the morning and flush your brain free of facts.

          • Steeple

            Show me the last hydro project that had significant support from Environmental groups. I can show you where they have closed hydro plants.

            I used to manage a power trading group; I know what the daily wind cycles look like and how out of phase wind is with hourly power load. This is the last time I’m going to tell you that.

            Quit being a jackass, Bob.

          • Bob_Wallace

            (I’m not going to take time to fix the Discus bug problem. You can read the link if the following is too difficult.)

            “Several firms have been converting non-powered dams into energy
            producing dams. Hydro Green Energy has conducted 28 projects in 13
            states. Each project creates approximately 140 construction and
            permanent jobs. Hydro Green Energy developed a plug-and-play technology
            allowing small falls of water (under 30 feet) to be converted into
            energy producing units. The Department of Energy recognized their
            success by awarding $1.8 million to HGE, allowing them to conduct
            further research in converting non-powered dams into energy producing
            entities.

            A second firm, American Municipal Power has converted 6
            non-powered dams on the Ohio River creating 350 MW of renewable energy.
            American Municipal Power is currently installing the largest hydro
            power conversion in the United States. The Smithland Project is valued
            at $400 million and has a 72 MW capacity, while creating 400
            construction jobs and up to 10 permanent operating positions. Finally,
            Advanced Hydro Solutions has begun converting an existing dam built in
            1942, the Mahoning Creek Dam in Armstrong County, Pennsylvania, into a
            hydroelectric facility. The $12.5 million project has a generation
            capacity of 6 MW and will produce 20,000 MWh energy yearly, supplying
            power for approximately 6000 homes. ”

            http://www.pennenergy.com/articles/pennenergy/2012/08/converting-non-powered.html

            You can read about Eagle Mountain, Silver Creek and Olivenhain pump-up projects here -

            http://en.wikipedia.org/wiki/List_of_energy_storage_projects

            I know a bit about closing, tearing down, dams. We’re getting rid of some here. They aren’t producing enough electricity to be important and they’re really restricting fish recovery.

            Quit posting foolishness and I won’t feel a need to point it out.

          • A Real Libertarian

            “That wasn’t very nice”

            Like calling Nick Griffin a Nazi isn’t very nice? I prefer to be accurate. P.S. Google Nick Griffin before you start screaming Goodwin’s Law.

            “wind doesnt blow much during the peak times of the day in the hottest
            parts of the country. I prefer reliablity in my power supply.”

            And what is the sun doing during the peak times of the day?

            Not to mention “Hook all the wind turbines in a 200 mile radius together and 30% of the
            power is as reliable as coal. Which incidentally is the amount of
            baseload power the utilities have been claiming is necessary for years.” as I said in the comment you were responding to.

          • Bob_Wallace

            The wind tends to blow strong and sweet on hot days – offshore. It’s that temperature differential thingie.

            Texas is getting ready to tap some of their quite good offshore wind because it will supply good energy during peak hours.

            Notice how, just off the beach, Texas has as good wind potential as up in the Panhandle? Go out a little off the beach and it’s even better. And Texas has all sorts of experience building stuff in Gulf waters. They could feed a lot of the southern states with that resource.

          • Bob_Wallace

            My take –

            1) Natural gas is dispatchable. We can efficiently turn it on and off as needed, unlike coal and nuclear.

            2) New NG capacity is cheap, compared to other new capacity.

            3) NG is cheap to store.

            Those facts work to give us a good way – right now – to fill in around wind and solar. We don’t – yet – have a good storage solution.

            Because we have NG we can install wind and solar as rapidly as we like, close coal plants, and end up putting a lot less GHG in our atmosphere.

            50% wind, 30% solar and 20% NG is a heck of a lot better than 100% coal.

            That’s not to say that we should look at NG as a solution. It’s nothing more than a bridge, and a very deep backup. As we develop better storage (or install more pump-up) we can cut back on NG and hopefully eliminate it at some point.

    • Chris

      The “free market” is coming to the solar sector… but not quite yet. With tariffs and price undertakings being set in the EU (*http://www.allecoenergy.co.uk/From-29th-July-2013—Statement-by-EU-Trade-Commissioner-Karel-De-Gucht-on-Trade-Tariffs.html), and a current need for Government incentives to encourage take up and development, it’s surely only a matter of time until the market is truely free.

    • A Real Libertarian

      There’s no such thing as a “free market” markets are either controlled by the government or the largest corporations in them.

      Or set up like the Mutualists and Individualist Anarchists want, but they’re all Socialists and thus were Unpersoned.

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