Small is Beautiful

My recent Forbes article Cheap Photovoltaics Are Eating Solar Thermal’s Lunch about how the rapidly falling price for photvoltaic (PV) modules is undermining the case for concentrated Solar Thermal Power (CSP) is just one instance in a larger trend: In the modern energy economy, modular technologies advance more rapidly than large scale technologies because it is easier to get experience with them in the field at reasonable cost.

PV started with sub-watt sized cells in solar powered calculators. Solar calculators may not seem to have much to do with today’s multiple hundreds of megawatt (MW) sized plants which can be a billion times larger than a solar calculator, but the manufacturing experience with those tiny cells allowed manufacturers to bring costs down to the point where kilowatt sized systems started to be used on off-grid homes, which in turn brought down the price enough to allow subsidies to make solar affordable for most homeowners, and 1-2 MW commercial plants, and now we’re seeing announcements of solar farms approaching a gigawatt.

CSP, on the other hand, only starts to make sense at around 100 MW, so building each new plant represents a much bigger financial commitment than even a million calculators. Looked at this way, PV’s potential eclipse of CSP perhaps should have not been all that surprising. But hindsight is 20-20.

This also has implications for the advance of other energy technologies. Look for the modular technologies to gain ground at the expense of the industrial scale technologies.

Modular technologies

  • PV
  • Wind
  • Gas Turbines
  • Land Fill Gas
  • Grid based battery storage
  • Energy Efficiency
  • Smart Grid / Demand Response
  • Fuel Cells

Industrial Scale Technologies

  • CSP
  • Coal
  • Nuclear
  • Ocean Thermal Energy Conversion (OTEC)
  • Geothermal Power (sometimes small scale, but limited places it can be built)
  • Compressed Air energy Storage
  • Pumped Hydro
  • Flow Batteries

That’s just a few energy technologies off the top of my head, and I’m not trying to say that modular technologies will always win out over industrial scale technologies. But I am saying that price per kWh is not everything… sometimes small scale leading high prices per unit of energy but low prices for individual systems can allow a rapid evolution to lower prices per kWh. We’ve certainly seen that in Solar.

What’s next? LEDs were also able to develop rapidly because they were useful in a large number of specialized niches, such as indicator lights on electronics) despite the high initial cost per lumen.

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8 Comments

  1. There’s no doubt PV has become viable for homes and business the cost of PV has fallen around 30% in the past couple of years alone. And the growth in the Wind power has been big also but the UK FIT has helped to push solar forward in the UK, but that’s all changing this month. So we’ll have to see what happens to the UK solar industry.

  2. David Van said

    Makes sense to me, thanks! Speaking of grid based battery storage, what do you make of the Axion Powercube being integrated behind the meter as some kind of demand response system? I’m curious about the economic merit. http://tinyurl.com/7f42x2z

  3. Tom said

    I don’t think we have enough information to determine the economic merit of the powercube. I think there are enough functions that such a system could provide to easily pay for itself, but it might be a lot harder to get everyone who could benefit from those services to agree to pay of them,

  4. Tom,
    We agree with your conclusions. Sol Orchard is a leader in the Distributed Utility scale solar installations, and we believe it is the right choice for most utilities because the power is consumed right where it’s produced, which has many advantages for the utilities. We also think distributed storage will be of value to the utilities, and have some initiatives to prove that out.
    Not sure I agree with the flow battery being an industrial scale technology. One of the initiatives has a flow battery at the 1 MW scale, and it seems promising to me.
    Love your work. You are truly an asset to the renewable industry.
    Jeff

  5. Tom said

    Modular to industrial scale is a continuum… wind and flow batteries are somewhere in between. I chose to consider flow batteries industrial scale because the more hours of energy storage you have, the more economical they become, so the economics mean that they’ll generally be big.

    Another way to think of it is that modular technologies have some hope of entering consumer markets, like the solar calculator example.

    Wind got its start with small turbines, although it’s more economic at large scale. But until someone invents a 1 kW flow battery, I think it will remain an industrial scale technology. They may still succeed, but hte path is harder.

  6. Great post, Tom, thanks, but is small always beautiful? One reason why EVs are more efficient and lower carbon that the internal combustion engine, I’m told, is because even a coal plant wastes less energy than many thousands of automobile engines.

  7. Tom Konrad said

    No, Marc, Small is not always beautiful when it comes to efficiency, as you point out. The idea I’m trying to put forward here is that even though modular technologies may not be as efficienct or cost effective as industrial technologies, they may end up triumphing anyway because their small scale allows the technology to progress much faster.

    Another way to think about it is evolution… small creatuers tend to live and reproduce much faster than large ones, and given more generations, they may be able ot eveolve qucker and be more sucessful as a species than a much more impressive large creature.

    In other words, expect surprising progress from modular technologies… they may end up beating large scale technologies, even if the latter look better on paper.

  8. Large scale wind is already as cost effective as other commercial electric generation. Sign up, to help promote its development, and at the same time, reduce your own personal carbon footprint.
    According to AWEA only 2% of home in the US, are located where site wind is feasible. Nevertheless, everyone should call its electric utility, and ask them if they have a clean electricity option. If they do, sign on. If they do not, then make it clear to them, that you want one.

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