We Do Not Need A New Solar Power Program And Especially Not This World …

September 30, 2013 by  
Filed under Green Energy News

It’s somewhat distressing to find an economics professor ignoring the basic tenets of trade and markets: it’s more so when it’s the economics professor who tried to drum the basics into your own brain those decades ago. But this is what has happened when Sir David King and Lord Layard have teamed up to suggest that we need to have a new “world sunpower programme”.

Their basic description of the background is entirely fine as laid out here.

What should it focus on? There will always be many sources of non-carbon energy – nuclear fission, hydropower, geothermal, wind, nuclear fusion (possibly) and solar. But nuclear fission and hydropower have been around for many years. Nuclear is essential but faces political obstacles and there are physical limits to hydropower. Nuclear fusion remains uncertain. And, while wind can play a big role in the UK, in many countries its application is limited. So there is no hope of completely replacing fossil fuel without a major contribution from the power of the sun.

Moreover, the sun sends energy to the Earth equal to about 5,000 times our total energy needs. It is inconceivable that we cannot collect enough of this energy for our needs, at a reasonable cost. The price of photovoltaic energy is falling at 10% a year, and in Germany a serious amount of unsubsidised, solar electricity is already being added to the grid. In California, forward contracts for solar energy are becoming competitive with other fuels and they will become more so, as technology progresses.

I’ve no problem with any of that indeed I wrote something that made the same points earlier in the week. There are political (not technological) problems with nuclear, hydro and biogas etc don’t scale well enough, wind isn’t ever going to be efficient enough, biofuels starve the poor which isn’t the point at all which leaves us with solar as the way to go. I also agree that storing said solar power is the big technological challenge although I tend to think we’re already on the cusp of the solution there, electrolysis of water and fuel cells.

So I’m not disagreeing with the basic analysis, it’s the solutions that I’m indignantly pointing too.

So here is our proposal. There should be a world sunpower programme of research, development and demonstration. The goal would be by 2025 to deliver solar electricity at scale to the grid at a cost below the cost of fossil fuel. All countries would be invited to participate. Those who did would commit, in their own countries, to major new programmes of research, internationally co-ordinated, and to share their findings for the benefit of the world.

My point being that we don’t need to do this. As I’ve already quoted the pair saying:

The price of photovoltaic energy is falling at 10% a year, and in Germany a serious amount of unsubsidised, solar electricity is already being added to the grid. In California, forward contracts for solar energy are becoming competitive with other fuels and they will become more so, as technology progresses.

Solar power is already becoming affordable: thus we don’t need to have some vast international program (for Americans, or programme for the English) to make solar power affordable. It’s possible to take two views of what has been happening and which you prefer to believe is entirely up to you. The first would be that once the problems with fossil fuels were revealed then people out there in the marketplace got to work on possible solutions. It’s taken a couple of decades but said solutions are appearing. The other is that governments recognised the problems, doled out the research money, created the markets (feed in tariffs and the rest) and this has led to the solutions appearing. An explanation to suit your political leanings is available then. I would tend to favour the first explanation just because I’m like that but there’s no reason you have to.

However, the point is that solar power really is becoming, unsubsidised, a competitor to fossil fuel derived electricity. We’ve got that 10% reduction in cost each year, we’ve vast companies competing as hard as they possibly can to continue to drive that price down. We don’t actually need another level or round of subsidy, even if it were subsidy that started this all off. For we’re already reaching the goal that we need to reach: price comparability for solar and fossil fuel derived electricity. That’s what we need, we’ve already done what we need to do to get it so why should we bother with doing anything else?

And then there’s this:

Each country would have the goal of demonstrating bulk supply of unsubsidised solar electricity in scale to the grid by 2025.


For a distinguished (and Layard is indeed a distinguished economist, King has the excuse that no one has ever accused him of understanding the subject) economist to overlook both Smith’s division and specialisation of labour and Ricardo’s comparative advantage is a grave sin. For whatever the final technology we decide to use for solar power, silicon based PV, solar thermal, multi-junction cells, whatever it is, there will always be places that have a comparative advantage. Those with cheap land and lots of sunshine. That is, say, not England, not Holland, but definitely Algeria and Australia: just as examples you understand. So it would actually be insane to try and insist that every country should have 10% or whatever of the grid fed by locally produced solar electricity. Whatever the technology we use it will always be cheaper to do this production in, say, the Sahara rather than Surbiton. It might even be that the Sahara should supply 100% of its electricity from solar and Surbiton none given the relative costs. Or that electricity should be piped from one to the other.

But to insist that, given the variability of the resource being exploited, each national or land area must exploit the same amount of it is ridiculous. It’s like saying that because there’s iron in all soil (there is) therefore Surbiton must provide 10% of its iron from its own soil. Rather than getting all it needs from some lonely mountain in Australia. I’ve no problem with the basic analysis which is that in the end solar is going to end up producing most of our electricity. But I am appalled at the economics which first demands a large effort and subsidy when we’ve pretty much solved the problem already and then, secondly, willfully ignores both trade and comparative advantage.

We really can do much better than this plan you know.

Comments are closed.