BIG oil & gas profits skyrocket. Some of this capital could be used to better manage their solar activities.
All the players (as figured above) are active in the renewables sector, inclusive of solar. In February 2022, Shell reported its highest profits in 115 years at $39.9 bn (USD) and double those of 2021. Saudi Aramco will announce last year's profits on 12 March 2023. They are expected to be in the vicinity of $140 bn (USD). Aramco and others are literally awash with cash. Perhaps, it is time for these same oil & gas corporations to consider more meaningful, better engineered and better managed solar “Green-Washing” (less profitable / even 'loss leader' investments) for the benefit of our Planet.
"Without doubt, solar assets need to be better managed"
At present, the phrase, “least cost design” is commonplace in international Requests of Proposals (open tender applications) for solar projects of varying size. Alternatively, the industry should be focusing on:
“Enhanced reliability, durability and energy output to increase financial returns at the lowest possible investor risk"
Industry-wide underperformance is of concern as solar assets age. To counter this trend, their performance needs to be monitored in real-time by the Internet of Things (IoT). This happens in most other industries around the world, including other energy production technologies, such as, nuclear, combined-cycle oil and gas, wind and hydroelectricity. IoT is deployed routinely to mitigate safety concerns &/or maximise productivity.
In solar, however, we prefer NOT TO COLLECT PERFORMANCE DATA at the level of the units of energy production, namely, individual solar panels. The necessary technologies exist (micro-inverters, multi-module micro-inverters and DC/DC optimisers), but these are not generally deployed at scale atop of millions of homes, factories, commercial premises &/or solar farms due to cost concerns. Elsewhere, however, more and more solar infrastructure is accompanied by high-cost expenditure items, such as, panel-cleaning robotics, energy storage, solar tracking and higher-powered solar panels. The latter expenditure serves to reduce Return on Investment, lengthens the Payback Period and heightens investor risk. This supplementary spend needs to be de-risked effectively.
Continuous performance monitoring is currently left to sub-optimal overviews based on the output from hundreds or thousands of solar panels interconnected 'In Series' and analysed collectively. Indeed, it severely limits project durability and works to almost ensure longterm underperformance with respect to energy production and cashflow predictions. Nonetheless, this ineffective approach forms the basis of most public and private sector efforts to raise solar project finance &/or debt.
The above is similar to looking for COVID-19 or HIV-AIDS viruses in pooled blood samples from all daily passengers at New York's Central station, i.e. instead of at the level of individuals. The approach does not allow one to fight epidemics effectively.
"Tools akin to SCADA or Industry 4.0 will eventually migrate into solar. But, this is already at least two decades overdue"
No amount of new technology development, laboratory pre-testing, Balance of System optimisation, Bill of Materials standardisation (batch-to-batch homogeneity) &/or industry propaganda can safeguard field performance over decades into the future in the field. Performance needs to be measured. Industry-standard spreadsheets employ 25- to 30- year timelines when seeking project finance. This period is consistent with solar panel guarantees offered by panel manufacturers. However, the latter are rarely activated, i.e. apart from damages due to extremes of weather, such as, hail & high winds.
Solar developers can seek more attractive financing terms through compatibility with, for example, Munich RE’s Photovoltaic Bankability Warranty or Bloomberg’s Module Tiering List (PV Moduletech Bankability) of the panel manufacturers themselves and the likelihood or otherwise of their corporate survival for decades to come. Yet, here too, these measures have limited relevance to field-based performance and durability of the actual solar panels. They have more in common with the housing industry's Triple-A ratings just prior to the 2007-2008 Sub-Prime Financial crisis. These measures help secure cash and debt, but cannot guarantee investor returns.
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Currently, the industry tends to naively and almost blindly wish to continue believing the rhetoric of solar panel manufacturers that their solar panels will work almost unfailingly for at least 30 years. This view is far from reality. Yet, field interventions rarely involve replacement, repair or re-orientation?of individual solar panels. This is because solar panel underperformance remains invisible (apart from insensitive and highly sporadic drone inspections). The sensitivity of the latter is far removed from that achievable by micro-electronics (Module-Level Power Electronics) and is always inversely proportional to the distance-to-target squared. Panel guarantees can be activated if more than 0.4% to 0.5% of solar energy transformation efficiency is lost per panel per annum. But today, this measure depends on costly and time-consuming manual field interventions and removal of panels to a testing laboratory. This is often impractical or unaffordable.
During daylight, solar energy production is subject to constant change. This is due to time or day, weather, season and climate, while individual panels each such show considerable variation in the their respective transformation efficiency of this solar irradiation into electrical energy as a function of these same parameters. Such variation needs to be made visible and not hidden away in ‘String Series’. Costs will be higher, but so too will the likely environmental and monetary gain because of extended solar facility lifespans.
Over time, this variation within a population of solar panels (locally or across countries and continents) will negatively impact projected energy output and thereby projected cashflows. Today, individual solar panel performance is simply ignored by the bulk of the solar industry and this at a time when solar is highly fashionable as the 'cheapest form of electricity'. Unfortunately, it is not yet the most reliable or longest-lasting form of energy-producing infrastructure.
Several high-profile solar enterprises disappeared in Europe and the USA during 2012 and 2013. Today, the bulk of solar developers are less than a decade old. Like their predecessors, they remain vulnerable to excessive debt and underperformance with respect to overly-optimistic cashflow projections.
"If solar is to prosper and survive, we need to learn from the lessons of the past".
A decade ago, overly-generous Feed-in-Tariffs drove industry growth. Today, it is popular sentiment of governments, corporations, and individuals alike. This enthusiasm should not forego an obligation to manage one’s assets properly and actually measure performance of each of our solar panels.
A data centre and its network of interconnected data centres cannot afford to leave its many thousands of microprocessors (CPU’s) unmonitored. In solar, we do not monitor their equivalents (individual solar panels). Solar assets must first and foremost be managed correctly and coupled with improved data collection and performance analytics. This can only occur at the expense of additional Year One CAPEX. Increased durability works always to reduce the Levelised Cost of Energy Production, i.e. as for solar’s other much longer-lived energy-sector competitors (nuclear, combined-cycle oil and gas, wind and hydroelectricity). This effect is most dramatic if enhanced durability can be measured in extra decades. (13) Solar Energy Facilities built to last ..... | LinkedIn )
The solar industry’s investor credentials can ill-afford a scenario two-decades hence of major and widespread investment losses. This has been seen in association with what are termed?:‘Phantom Forests’. This refers to large-scale tree-planting (green) initiatives around the world over the last ten years that have produced very few durable forests and many failures (Cf. Phantom Forests: Why Ambitious Tree Planting Projects Are Failing - Yale E360 ). These initiatives remain popular with governments internationally, but they are equally dependent upon "how well they are managed" – Not just short-term and not without detailed performance monitoring and analytics.
Capital destined for ESG-compliant Green and Climate Bonds and other classes of investment lack suitably de-risked and auditable solar projects. Like most investors, they seek to realise attractive profits. It is our industry's role to derisk these investments and deliver profits reliably.
This will open the way to a new Solar Age featuring continuous performance monitoring of individual solar panels and DC/AC inverters over decades coupled with an ability to activate performance guarantees at any time from Day 0 to Year 30 and beyond. Mobile networks (e.g. 5G & 6G) will facilitate this continuous monitoring whether solar panels are deployed alone or among millions anywhere in the world.?Cf. "A NEW SOLAR AGE": https://www.dhirubhai.net/feed/update/urn:li:activity:6971479377679130627/ ; while also addressing the problem of inadequate inverter longevity: (1) Inadequate longevity of solar String Inverters | LinkedIn
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