Photovoltaic news and pv jobs

The end is always a beginning

16. July 2012 By:  Karl-Heinz Remmers

At the start of the vacation period and after the conclusion of the current amendment to the Renewable Energy Sources Act, the mood in the German photovoltaics industry is more mixed than ever. For many it was "lights out", while others barely manage to meet the altogether still very high demand.

If one believes public opinion, then the photovoltaics industry in Germany is finished. Many manufacturers of solar modules are faced with insolvency, while several other companies along the entire output chain were forced to cut substantial numbers of personnel. The German mechanical engineering industry in the photovoltaics sector is also going through a deep crisis at present. Investors have turned away and regional politicians – primarily in eastern Germany – struggle to preserve the laboriously developed photovoltaics industry. Brutal cutthroat competition abounds worldwide. And all of this, although the annually installed photovoltaics output continues to grow worldwide.

Prospective customers from Asia

Thus far, none of the larger or technologically-interesting production companies faced with insolvency have really been broken up. Instead there are various prospective customers for all of the insolvent companies – however, word has it that they all generally come from Asia, and not Europe. Obviously Asian entrepreneurs believe that it makes sense to set forth German technology and enterprises. European entrepreneurs apparently no longer believe this to be the case.

A detailed analysis of why this might be so should be very interesting, but would go beyond the scope of this blog entry. The fact is, however, that life goes on for many – although often with far fewer personnel and in the next stage of development probably in Asia. In view of the increasing proportionate share of transport costs, the continued high demand in Europe, and the more secure legal terms and conditions, the continuation of production even on European soil is, however, even more probable than one year ago. Thus the end is a beginning for everyone who believes that the worldwide market for photovoltaics is only at the beginning and not at the end.

Return of the zombies

With the intensified discussion of a quota model, this instrument, which has failed in many countries, but continues to be undead for the opponents of the change in energy policy, is once again in fashion. Interestingly enough, the quotas in the coming decades are to result in renewable energy values of between 80 and 100 percent. And precisely the losers and opponents of the change in energy policy – primarily the large power suppliers and other diehards – are to decide on how and which technology is to be developed via their anxiously held quotas.

A pure impediment to innovation, and that in light of the huge challenge with which we are faced by the change in energy policy. Instead of outdated proposals, there must be a comprehensive overall vision. Apart from the technology, a new market design is also needed, including completely new electricity prices and several newly prescribed legal and fiscal components. I refer to the project as Renewable Energy Sources Act 2.0, although I am well aware of the fact that 2.0 must really mean something completely new here and no simple patching of old principles.

The opposite of new, however, is the return of the political zombie, Wolfgang Clement to the public stage. Professedly despising solar technology and a former minister of economics who then left the SPD in frustration, he has now returned as the head of the board of trustees of the “Initiative for a New Social free-market Economy”, and thus trumpets his concept for renewable energies: a "quota model", in order to put a brake on expensive photovoltaics.

I am certain that this ole fellow still believes that a kilowatt hour of solar electricity costs two euros. And therefore he obviously aims to spotlight this likewise zombified neo-liberal initiative as a component. In fact, there is nothing new about this, but it is well known that zombies return to nag again and again. In contrast to many films, however, the zombie horde in the energy industry is manageable and their decade-old rhetoric can confidently be relegated to the history books. However, it is also necessary to do just that, and so it remains a task for all of us.

Many still waiting for the "big solution"

We all heard it in physics class: "Once we have control of nuclear fusion, then we will no longer have any problems with energy. The time will come in about another 50 years." With this figure, it does not matter whether such instruction took place in 1970 or 2012. Belief in the grand, magnificent solution continues to prevail. The decentralized renewable energies that are now already available are considered to be a temporary solution at most, or better still: expensive green wishful thinking.

But if that is what the cranks want, say the corporations, then let us provide a big solution and rely on offshore wind energy. Large wind power stations on the ocean produce a whole lot of electricity almost always. This ample electricity is then stored in part in enormous Norwegian hydroelectric power plants and distributed in Europe via gigantic electricity mains. What a wonderful idea, right? A whole lot of technology that costs a whole lot of money. And the great thing about it is that only the really big guys can afford it.

Yet this glamour is truly on the wane. The friends of offshore wind technology (a technology that I regard as an important component in the change in energy policy, but not as a redeemer) are faced with enormous challenges. And it would be nice if they could master them within the next few months or years, because in the minds of many politicians, and unfortunately also the media as well, there is no other alternative than to seek happiness out on the ocean.
However, what will happen if in the months to come the many problems of detail, the substantial financing difficulties and the hair-raising legal proceedings because of numerous other problems come to light? What if the German magazine, Der Spiegel in fact calculates how much the "offshore debt" will actually be when the plants are ultimately paid for? Will it be possible to objectively consider when what outputs from the ocean will be realistic and how they can be used in a way that makes sense? Or will it be said that the change in energy policy has failed, because offshore energy needs more time and more realism? And thus new coal-fired power stations once again, or should the nuclear power plants continue to operate longer?

The entire industry of renewable energies will be confronted with these realities in just a few months. The answer can only be that the new decentralized market design that is undergoing rapid technical and commercial change is promptly supported with new proposals from us. We should all push the substantial onshore wind power and solar energy that is already available and provide for full development of the attendant possibilities, particularly in the sphere of bio-energy. This would be associated with both lower costs and rapid marketability.

Change in energy policy = everything is different

"Hopefully they won’t waste our money on the development of mains for offshore wind energy," commented a mayor in Saxony whose municipality has a number of wind, photovoltaics and bio-energy installations and whose budget, by the way, is very solid. For him and his growing number of cohorts, it is clear that they themselves are able to quickly implement a lot on a regional basis when it comes to the change in energy policy. And so he also works toward repurchasing electricity mains and establishment of regional public utilities – just like hundreds of other municipalities in Germany. And all of this stems from the center of society for the well-being of society at the local level, equipped with various technologies that make the change in energy policy possible in ever simpler and cheaper fashion, i.e. without the large corporations.

The change in energy policy will change everything – other mains, other controls, other technicians, other prices, other ownership structures and concomitantly other power structures – because cheap photovoltaic technology will result in electricity independence in apartment houses and in the municipalities. Companies and institutions will to large extent strive toward autarky or at least partial autarky. This can already be seen today. In Germany, as well more and more photovoltaic projects will no longer feed into the grid, but will in fact provide for substantial relief. PV covers peak loads and through the use of decentralized storage, the loads will be constantly reduced.

Yes, decentralized storage will also contribute to relieving the mains, because I believe we will witness a radical development and reduction in the price of decentralized storage systems in the next three to five years. Naturally not, however, if one believes the fears of the German suppliers and large corporations in the energy sector: The way they see things there are only pumped-storage power plants and perhaps someday power-to-gas or otherwise something large.

However, the Asians, for example, are going full steam ahead with small storage systems. Thus the costs and concomitantly the prices are dropping faster than many imagine. Compared with what is still to come the current offers should be called well-made prototypes at best. A system that costs EUR 10,000 euros today will be available for less than EUR 3,000 at the end of the year 2015 at the latest. And because millions of decentralized storage systems will be used worldwide and therefore masses of them will be produced and be able to be optimized for stationary application. And then we will see how the current very exciting race for the best storage, control, mains and market systems in the renewable energies segment will turn out.

What is already certain at this point is that the change in energy policy that is often compared with the flight to the moon will succeed even if, as at the beginning of the Apollo program, every individual screw of the rocket has not been accurately described. But with completion of the change in energy policy nearly everything in today’s energy system will be history. This includes today’s large power supply companies, if they do not actively participate in shaping this fundamental change. The first new beginnings and new tenors in communication from this sector and the associated federations can already be heard. I would be pleased if it were to enhance the necessary momentum for implementation of this "flight to the moon" or change in energy policy, and in order to call for the required overall structures for implementation in public policy.

In this spirit, I wish everyone a beautiful summer 2012. The next battle is already lined up in autumn if the increase in the Renewable Energy Sources Act reallocation cannot be prevented in October through a change in the roll-over mechanism. Relax and enjoy.