The Ta’u Island Solar Farm isn’t Cost Efficient

by Jaymez

1 December, 2016

 

With a payback period of between 22.5 and 73 years, and costing more than twice the island’s annual GDP, the solar farm is an outrageous expenditure. The Island will still rely on a fossil fuelled generator back-up. Yet the Government bodies and compliant uncurious journalists imply, or pretend, that the project is cost justified. They think the project should be replicated around the world. We need journalists to ask more questions, carry out more analysis. Unfortunately it is this same lack of investigative journalism which has allowed the Global Warming scare to get so far.

Renewable energy enthusiasts were very excited about the news from the tiny island of Ta‘ū in the Manu’a Islands of American Samoa. They said they have installed an electricity micro-grid, which only took a year to build, features 1.4 megawatts of solar generation capacity from 5,328 solar panels, and 6 megawatt hours of battery storage from 60 Tesla Powerpacks which can be recharged in 7 hours. It is expected to replace 109,500 gallons of diesel used by the Island annually.

In one article a community spokesman, Mr Ahsoon, said moving to renewable energy was a cost-saving alternative to diesel and removed the hazards of power intermittency to the 600 residents on Ta’u.

A similar sentiment was shared in another, “Before today, every time we turned on the light, turn on the television, turn on maybe the air conditioner, all of the cash registers in China, Vietnam, Saudi Arabia go ‘cha-ching,’ but not after today,” SolarCity market development director Jon Yoshimura told Radio New Zealand. “We will keep more of that money here, where it belongs.”

The tremendous excitement of renewable enthusiasts is exemplified in an article by Trace William Cowen titled, Tesla Is Now Running a Whole Damn Island on Nothing but Solar Power. Cowen’s enthusiasm glosses over the fact that diesel generators and diesel fuel will still be kept on the island for backup purposes. That writer was so lacking in objectivity he ended the article with “Whatever the cost, let’s get this shit going worldwide.” Which is a typical reaction from the ‘true believers’ who never question the science, the costs or the alternatives.

Given the excitement I had to check out the veracity of claims, particularly about cost savings and the lack of any need for back-up.

I’m aware of some remote solar and wind turbine installations, but they all have diesel back-up that is used frequently, and often exclusively, due to the lack of renewable power generation. The lack of renewable power can be caused by the weather, or damage including lightning strikes, tornadoes, cyclones, hail and delamination of solar panels exposed to severe winter. And of course equipment failure. You can train the locals to do the ongoing cleaning and maintenance, and basic service and repairs, but anything beyond that and a technician and parts need to be flown or shipped in. Until they arrive, the diesel generator is vital.

Of course if the cost of repairing and maintaining the equipment becomes greater than relying on the fossil fuel generated power, the renewables just get left in place to rot. I toured The Big Island of Hawaii a couple of years ago and saw this for myself with some of the now disused wind farms which were touted as replacing expensive diesel which had to be shipped to the island. The location they said was ideal for wind turbines with consistent wind all year round.

The disused Kimoan wind farm at South Point on The Big Island Hawaii. Just some of thousands of rusting wind turbines in the US alone.

There are more disturbing images here and here to demonstrate this isn’t a one-off for wind turbines. There are in fact thousands of abandoned wind turbines in the US alone, and there have been some big solar systems which have been left and eventually levelled.

For instance the Carrizo Plain’s solar plant was the largest photovoltaic array in the world, with 100,000 1′ x 4′ photovoltaic arrays producing 5.2 megawatts at its peak. But it failed to compete with the cost of fossil fuel energy production, and without favourable government contracts of subsidy or compulsory power purchase it was not profitable. The site was abandoned until eventually being cleared.

The advocates of Ta‘ū’s solar system imply that back-up is an unnecessary option. They say they have about 6 hours of backup storage to cover, if required, and they say it will only take 7 hours to fully recharge the batteries.

I am always suspicious of the numbers quoted. I wonder whether that 1.4 megawatts of solar generation capacity is when the sun is at the ideal angle to the fixed solar panels and takes in to account the fact the sun will be over-the-horizon for a lot of the panels for a large part of the daylight hours as the solar farm straddles a ridge with roughly two thirds on one side and one third on the other.

I discovered it actually took two years to build, not the claimed one year, so what else are they glossing over in their press releases?

In remote locations, poor maintenance and damage (by man and nature) are the biggest concerns. Having people who are adequately trained to look after the system and live in a remote location is difficult. Locals are trained to do some repairs and maintenance but if not properly supervised, the work doesn’t get done, or isn’t done properly and wind and solar systems can remain down for extended periods.

In urban areas, dirt and dust can diminish solar panel efficiency by up to 30%. But on an island with salt laden air the decline in efficiency could be significantly more. Cleaning routines for more than 5,000 panels will need to be regular and rigorous, and fresh water is at a premium on the island.

Rust is obviously another major issue in a marine/island environment, but one article indicated SolarCity used marine grade panels. But what about the batteries and inverters? From the pictures they look like standard equipment has been supplied.

But what I really wanted to find out is how the installation was cost justified. I can’t believe the lack of curiosity among the journalists who wrote the couple of dozen articles I read without mentioning any cost. Of those I found which mentioned the cost, there was no explanation of how the installation was cost justified.

The publicly declared cost of the project was US$8m. Though as it was paid for by the American Samoa Economic Development Authority, the Environmental Protection Agency, and the Department of Interior, we can’t be sure that includes all of the costs and subsidies and surely wouldn’t include land acquisition. Though there must have been plenty of lovely tropical holidays for the phalanx of bureaucrats involved in saving the planet and reducing our carbon footprint.

One enthusiastic reporter from Nature World News must have misread the press release because they wrote, ‘Before the introduction of solar energy, the island used to rely on 109,500 gallons of diesel per year or $8 million in fuel costs.’ If what she wrote reported was accurate, that would equate to US$73.06 per gallon they were paying before or US$18.28 per litre. Even with shipping costs diesel wouldn’t be that expensive, and anyone with half a brain should pick up that error. But that is how gullible the ‘true believers’ are.

The island did indeed use 109,500 gallons of diesel a year which they expect to be replaced by solar power, but it cost nowhere near $8m. In fact, American Samoa has one of the cheapest retail costs of fuel in the world because the fuel outlets are Government owned, not owned by an oil company.

GlobalPetrolPrices.com indicated the price of gasoline in American Samoa in November 2016 was just US$0.63 per litre. (Meanwhile we pay twice that in Australia). In an article date 11 August 2014, before the global collapse of oil prices, the ABC indicated America Samoa had the cheapest fuel in the Pacific region at US$98.98 per barrel. If only Australia enjoyed such cheap fuel!

If we used the average of these two prices as a long term proxy of their fuel costs, we come up with US$0.81 per litre or US$3.24 per gallon. And since ULP and Diesel prices are fairly close, we can assume Ta‘ū was paying 109,500 X US$3.24 = US$354,780 per year to cover all their fuel costs to produce their electricity.

Regardless of the solar farm, the island will still need to import fuel for motor vehicles, fishing and other boats, and independent generators not to mention maintaining the existing electric generator. But let’s be generous and assume the island does save US$354,780 pa in fuel costs.

Then without considering the cost of money and alternative investment options, the payback period for the US$8m installation will be 22.5 years. This is likely to be well over the equipment warranties and operational life of most of the equipment. Of course the equipment warranties rely on the survival of Elon Musk’s companies.

The recent move by Elon Musk to have Tesla buy SolarCity is a risky one, with the purchase including billions of dollars of debt for a company that’s far from profitable; SolarCity spends $6 for every $1 it makes in sales. Both Tesla and SolarCity rely largely on federal and state grants and subsidies which are less likely under a Trump presidency. So the value of any guarantees and warranties should be taken with a grain of salt.

There is little doubt anyway that the solar array will not last 22.5 years at a high level of efficiency. Efficiency will deteriorate as the equipment ages, and that assumes it is perfectly maintained. It also assumes a tropical storm doesn’t come through and decimate it sooner.

In February 2005 Cyclone Olaf came through the area. Radio Australia reported “The island of Ta’u in the Manu’a group, 100 kilometres east of the American Samoan capital Pago Pago, appears to be the worst hit. It may take up to a week for power to be restored after the island’s generator was severely damaged.”

It seems they were silly enough to build the generator where storm surges could soak it. It was estimated it would take a week to wash out the salt water from the main generator, dry it out and get it going again. How long would it take to repair over 5,000 solar panels and the equipment which goes with that if the installation looked like this?

February 2005: Cyclone Olaf decimates the Manu’a Islands in American Samoa. Worst hit was the island of Ta’u

It isn’t just dirty panels, age and severe weather events that can dramatically impact on power availability and performance of solar panels. Environmental conditions are a big issue.

More than 85% of the global solar PV capacity has been installed in the last 5 years, so it will be some time before we know the true field performance of the panels. Based on a report published by Norway-based DNV GL, titled PV Module Reliability Scorecard Report 2016, the performance, degradation and reliability of the 22 suppliers PV’s tested, varied significantly.

The five test categories in the 2016 Scorecard cover each of the major sources of performance degradation over the lifespan of a solar module — repeated Thermal Cycling, Dynamic Mechanical Load Stress, Humidity-Freeze conditions, Damp Heat Exposure and Potential-Induced Degradation.

Nineteen companies participated in the Thermal Cycling test with efficiency degradation rates varying from 1% to 35%.

The Damp Heat test also produced varying results. Modules were held at a constant temperature of 85° Celsius and a relative humidity of 85% for 1,000 hours (about 42 days). Twenty-one companies participated in the Damp Heat Test, with degradation rates varying from 0.6% to 58.8%.

Another test that produced wide-ranging results was the Potential Induced Degradation (PID) test, where 1kV (kilovolt or 1,000 volts) is applied in damp heat testing conditions for 100 hours. The test provides the temperature and moisture conditions necessary to stimulate increased leakage of electrical currents. Twenty-two companies participated in the PID test, with degradation rates varying from 0% to 58.3%.

Typically the current standard 25-year warranty is triggered if modules degrade more than 3% within the first year and at a linear rate down to 80% of its original power-rating in year 25. We don’t know what the SolarCity guarantees are on this deal, but it is clear from the tests that many PV’s will degrade significantly over their lifetime and the damp, hot environment of a Pacific island will guarantee these PV’s will. So the amount of power, and power storage they rely on now won’t be available in the future without replacement or upgrade.

That said, let’s still assume the island saves US$354,780pa on diesel fuel, part of the saving will need to go towards the servicing and maintenance of the installation. I would estimate that would include one senior electrical engineer, some qualified solar technicians (there are over 5,000 solar panels), and at least a couple of linesmen or whatever to service and manage the micro-grid distribution lines. In addition, they definitely need at least one person totally dedicated to stopping the advance of the jungle on the solar site. Among them they will also need to distribute the job of keeping over 5,000 panels cleaned. That is 6-7 staff minimum, with at least 3 of them being paid at a normal ‘Western rate’  for the level of technical knowledge and ability required, whether or not those jobs are filled by islanders.

One writer indicated that 6 of the 15 locals used in the installation would be retained in ongoing employment. They may well be technicians which have been trained, or staff to make basic checks on the panels, keep them clean and keep the site clear of jungle growth. I don’t imagine the maintenance or servicing of existing diesel generation can simply be transferred. Besides, they are retaining that system as back-up.

I can’t see how you could get away with less than US$245,000 in new salary and wages and personnel on-costs, and I think that is conservative. The annual savings now starts to look something like just US$109,780. That would give us a 73 year payback period on the initial $8,000,000 cost, without accounting for opportunity costs.

Unless Islanders are charged considerably more for their electricity than they have been paying, this project is just not cost effective.

This is the lesson we have learned over and over again when we look at renewables. Unless the project comes with a massive government (taxpayer) subsidy, it cannot be afforded and can never be cost justified. The only reason there are some private investors in solar and wind farms is purely because Governments give massive grants and subsidies to build, and provide guaranteed purchase of all power produced, whether they needed it or not, and at a prices well above market value.

The only way my own 5 KW roof solar system works from a cost perspective is that the Federal Government and State Government subsidised more than half the purchase cost through RET’s and Small-scale Renewable Energy Scheme respectively and the State Government guarantees to pay for any power I produce which I don’t use myself.

As Google engineers announced some time ago, Renewable Energy with currently known technology cannot compete on cost with fossil fuels. Why do so many journalists and government bodies want us to believe otherwise?

Based on the average per capita GDP for American Samoa, $8 million is more than the island’s annual GDP. Building that solar plant on the tiny island of Ta‘ū, would be the equivalent of Australia spending US$1,339.54 billion (more than Australia’s entire annual GDP) on a renewable energy platform which would still require fossil fuel powered back-up. That’s US$55,814 for every, man, woman, other gender identity person and child in Australia. And we’d still be reliant of fossil fuel powered back-up. Put that to a vote!