Activity Report

June 20, 2014 Our future with solar power generation

Energy is an important component of society that hugely impacts all aspects of our lives. Here, let’s think about what could happen if renewable energy, especially solar power generation with photovoltaics (PV), becomes equal in cost to thermal power generation, which in Japan is currently about 10 yen/kWh.(1) What kind of changes in society could this lead to?

First, let’s look at the current cost of solar power generation, and then what is needed for it to get down to 10 yen/kWh. In the Nikkei newspaper dated Feb 22, 2014, there was an advertisement by a major electronic goods retailer for a low-cost solar power generation system. The price in the ad was 269,000 yen/ kW, so it means that a 3.3kW system, the standard size in Japan, now costs 888,000 yen. Compared to a few years ago when a similar system cost 3million yen, prices today have already come down a great deal. Assuming that this system will be in operation for 20 years, the total amount of electricity it will generate over its life cycle is:

3.3 kW x 24 (hours) x 365 (days) x 0.12 (operating rate) = 69,379 kWh

If the system purchase price of 888,000 yen is borrowed at an interest rate of 4% on a 20-year payment plan, the total amount payable is 1,289,000 yen. Thus, we can see that the cost of power generation today is 18.5 yen/ kWh.

Based on this calculation, the cost can get down to 10 yen/ kWh if, most simply, the conversion efficiency of solar power generation doubles and becomes 40%; or, if recycling of solar panels become possible so that the panels become much cheaper, or if the life cycle of solar power systems doubles, or a combination of such improvements. If all electricity requirements in the future were to be met by solar power generation, there would need to be a big drop in price of storage batteries as well, which are essential for equalizing solar power generation’s fluctuating output. However, existing pumped-storage hydroelectric technology and advancements in the smart grid are also expected to complement solar power and to contribute greatly to future energy production.

The total amount of electricity produced by Japan in 2012 was 940 billion kWh. (2)
In comparison, the potential for PV system installation according to estimations by the Ministry of Economy Trade and Industry (METI), Ministry of the Environment (MOE), and Ministry of Agriculture, Forestry and Fisheries (MAFF) are as shown below in the table.

Table: PV system installation potential
Category Generation capacity (GW) source
Buildings (residential, standalone + apartment buildings, including sidewall installation) 91 Energy and Environment Council, Cost Committee Verification Report 2011, p34 created by NEDO
Buildings (non-residential, including sidewall installation) 158 Mizuho Information & Research Institute “Market Expansion of PV generation” NEDO 2013
Other than buildings (10% of cropland, parking lots, stations, etc.) 563
Total 812

The estimated power generation capacity above is based on solar energy conversion efficiency of 15%. Hence, if PV technology were to advance to even just 20% efficiency, the potential generation capacity becomes 1,083GW. This means a potential total energy output of:

1083GW x 24 (hours) x 365 (days) x 0.12 (operation rate) = 1.1381 trillion kWh

This amount far exceeds the total amount of electricity that Japan generated in 2012. Thus in theory, PV solar power generation alone could, in the future, very well meet the total electricity needs of Japan. Further, considering Japan’s population density and level of industrialization, it also means that the whole world’s electricity needs could potentially be met by PV.

Let’s now take this story into the future, science fiction style.

In the year 2050, a scientist at a certain chemical company that had been working hard for many years made a quantum breakthrough with a revolutionary technology that realized PV conversion efficiency of 40% in one fell swoop. Thus at last, 10 yen/ kWh solar power generation became a reality, and humanity came into possession of an eternal source of energy. Meanwhile, the situation of global warming has escalated to an extreme that could hardly be imagine today; everywhere around the world, places are hit by freezing cold waves in the winter and violent heat waves in the summer, and ceaseless cycle of droughts and floods.

The first area to target was thermal generation using fossil fuels such as natural gas and coal. With no time to be lost in the battle against global warming, people installed system after system of PV in order to avoid burning any more fossil fuels. Thermal generation plants shut down one after another. A little while later, nuclear power was also phased out. Because of its low CO2 emissions and low cost, nuclear power had continued to be used despite its host of problems - including large scale damage in the case of accidents and the issue of storage for nuclear waste - but now with equally low cost solar power available, there was no longer any reason for its continued use.

Vehicles with internal combustion engines, which had been equally significant contributors to CO2 emissions, were also gradually replaced with electric vehicles as cheap and abundant solar power became available and performance of storage batteries improved. The drive range on one battery charge still lingered at around 400km, but it was no longer a problem with the development of charging infrastructure and a shift in people’s thinking. Li batteries continued to be the main type used in the vehicles, as this resource was now abundant. Li had previously been concentrated in just a few countries in South America, but the development of an economical method to extract Li from low concentration salt lakes had completely eradicated the problem of its scarcity and high price. Development of recycling technology for batteries further helped bring down the price of batteries.

The effects of the proliferation of PV and EV were far-reaching. Price of oil and natural gas took a nosedive, leading to the downfall of former resource-holding countries. The oil-producing nations of the Middle East were particularly hit hard. With no more income from oil, it became increasingly difficult for them to maintain national finances, and political unrest grew. However, with the wider world already past oil dependence, the political turmoil did not spread outside of the Middle East and remained a distinctly regional issue.

So finally, the world had reached a point in which there was no more inequality between the haves and have-nots of energy resource. As a new age of peace dawned with the rise of solar power generation, people felt a wave of relief washed over them for having solved the major challenge of sustainability, and all around, there was renewed hope in the idea of the progress for human civilization.

Fast-forward 50 years to the year 2100. The cycle of drought and flood still plagued regions around the world, but the drastic cut in use of fossil fuels, for the most part, has put a halt to global warming. The patent on PV technology has long expired, and in countries around the world, it was possible for anybody to make high-performance PV. As people became used to the never-ending supply of solar energy, they were gradually becoming used to wasting the energy. When there is no limit to the amount of electricity that can be used, should wasting it be acceptable, or is it still morally wrong?

Meanwhile, the trend of low birth rate that started in Japan at the beginning of the 21st century was now a major issue for every part of the world. With advancements in education and personal hygiene, and everybody striving for ever higher quality of life, the number of children was dropping at an alarming rate. Humanity has found the answer to the problem of sustainability for energy, but was now facing the problem of sustainability for its very own kind.

Perhaps it is just the fate of human beings to forever live under the pressure of a critical challenge.

1) Energy and Environment Council Costs of Generating Electricity 2011 Edition
2) Murazawa Yoshihisa, “The shock of 19yen.kWh solar power generation” Nikkei Business Online, April 14, 2014

Photo credits
1.“Solar Panels” by Living Off Grid (CC BY 2.0)
2.Balancing Sunlight by D Sharon Pruitt (CC BY 2.0)
3.Late afternoon sun by Paul Grinnell (CC BY-NC-SA 2.0)