A Backlash for PV Systems?

PV System Sprawl
Just a decade ago an investment of a solar system would not have been economically viable due to high investment costs, low efficiency and undeveloped technique. However, governmental subsidies and schemes to encourage electricity production from PV systems parallel to developed technology and reduced costs have led to a PV-progression over the last five years. In fact in 2014, according to IEA-PVPS, the installation of PV systems in Sweden doubled for the fourth year in a row. Despite of this progression of PV system installations, solar energy only contribute to approximately 0,05 % of Sweden’s total energy consumption (Energimyndigheten, 2015) to be compared with Germany where solar energy contributes to 5,8 % which mainly is a result of encouraging policy strategies and an electricity price double that in Sweden making a PV installation more economically viable (energytransition.de, 2015). In Sweden, a considerable measurement to encourage PV installation was the recent introduction of net-debiting enabling PV owners to waive over-production of electricity with consumption. This was not possible just a few years ago hence the PV system needed to be designed to meet owner's peak load (Ny teknik, 2015). Recently a non-government bill was raised by the Swedish Finansdepartementet suggesting taxation of SEK 0,30/kWh of PV-produced electricity, which is currently tax-exempted, effective summer 2016, by systems larger than 144kW, which equals an approximate PV-surface of 1 000 square meters. The taxation applies also if a juridical or natural person owns multiple smaller PV systems individually smaller than 144kWh but together exceeds 144kW. (DI, 2015)

Will the Sprawl Continue?
In spite of high investment costs and slow return of investment, commercial businesses, private house holds and industries have taken a step in the direction of becoming at least partially self-suppliant of electricity by installing PV systems. The introduction of net-debiting, on top of government subsidies and EU-grants, spurred growth of PV produced electricity in Sweden over the last five years. A continuous development in the same direction would lead to an increase of electricity self-supporting private house holds, industries and property owners and people becoming more habituated with PV power. However, the non-government bill on taxation not only will amerce those already invested in the environment but also those who have plans to. Property owners planning on installing multiple smaller PV systems will be taxed although the individual systems are smaller than 144kW each. The already stressed economical aspect on a PV investment would be even more pinned down and plans on PV integration in new buildings and installation by property owners and companies might be resigned or at the least reconsidered due to the taxation. The general responsibility of the increase of PV produced electricity should fall on state-level in terms of management control measurements, active investment aids, knowledge dispersion and normalization of incidence of PV systems, not the other way around. Thus reforming of the current monopoly-like electricity market in order to lay up for a future with numerous smaller electricity producers. Paradoxically, to be achieved by a government that owns and controls a majority of the power plants generating substantial state yield.

Energiewende – Negative impact on electricity price?

A quick review of the German Energiewende
The term “Energiewende”, e.g. energy changeover, was first introduced in the 1970s by nuclear opponents alleging that alternative energy sources were feasible and is an attempt to propose a holistic solution including of renewable energy and energy efficiency. A 1980 study by the German Institute for Applied Ecology was one of the first to argue that economical growth could be obtained parallel with lower energy consumption whilst antecedent publications merely comprised warnings but without specific solutions. Fundamental historical disasters in regards of nuclear such as Chernobyl in 1980 and Fukushima in 2011 spurred the plans of the German nuclear phase-out, which is a central part of the Energiewende advocating nuclear to be too risky, too expensive and not being congenial with renewables. As a result of these plans of nuclear phase-out, eight plants out of 17 were shut down between 2011, the year of the Fukushima accident, and 2015. The aim is that all remaining plants in Germany are to be shut down by 2022 and the electricity gasp is to be filled by renewables, natural gas turbines, efficiency and conservation, demand management and the interim relying on conventional existing power plants. (energytransition.de, 2015)

The decision made by Germany to phase out nuclear power has been topical in other European countries while laws and policies to actually implement the transition have been an influence to others. However, Germany faces huge challenges economically, environmentally, socially and politically in order to follow out and achieving the Energiewende, which is awaiting a perspicuous policy framework still. A decisive egress is to determine at what cost the Energiewende is viable and from were the funds are to be raised. Currently an excessive increase of electricity prices has afflicted the domestic private households more than it has on the subsidised industry. An arising key-question is therefore how much more Germany can boost present electricity prices already being higher than in most other European countries. Whilst larger energy companies, such as European Vattenfall, argue that the electricity price increase would be immense, The German Institute for Economic Research predicts a significantly smaller price adjustment in order to finance the Energiewende. (Beveridge & Kern, 2013)

Is the Energiewende impact on electricity price all that negative?
It seems congenial in the arguments above that the price of electricity will increase during the Energiewende transition although not agreeing on how big an increase. All the same it should be no surprise implementing a milestone program such as out-phase of nuclear power will inevitably induce substantial costs. When a product or a service, in this case electricity, is produced at a higher total cost in favour of the environment, in order to minimize the risk of disasters and preventing future plant attacks, it would be more than justified that consumers accept the price adjustment. Especially when bearing in mind that technologies and efficiency most likely will improve over the years of transition hence leading to reduced prices. Could it be so that consumers have been accustomed to a too low price on electricity in comparison with the price development on for example petrol and diesel? It seems reasonable to begin value electricity more, make efforts in saving electricity and be willing to pay for it since we do not hesitate paying for motor fuel despite increasing prices and tax and for services that did not apply just two decades ago, e.g. cell phone, WIFI, television subscriptions and so on. In any case, a small price to pay for a big cause.

How did Brazil become a pioneer in ethanol production?

Short Brazil sugar and ethanol history
Brazil has a long tradition of sugar cane cultivation dating back to the 16^th when the Portuguese crown colonised the country. The agricultural strategy of the colonists was to produce sugar to be exported to Europe. (Retsö, 2011) Centuries later, as a result of these sugar plants Brazil is now a leading producer of sugarcane ethanol and a pioneer in using the ethanol as an economically viable alternative to fossil motor fuels. The production of ethanol is mostly sold domestically where sold either pure or gasoline-blended. The use of ethanol in vehicles began as early as 1920s in Brazil but boosted notably during the oil crisis of the 1970s when government realised efforts were needed in order to diversify Brazils energy source. In 1979, these efforts resulted in the development of the first industrial-scale car production of cars running on ethanol as fuel. However the real upswing for sugarcane ethanol came in 2003 during the introduction of flex fuel vehicles running on either gasoline or ethanol. (Ellis, 2007) Today, Brazil has an energy matrix where the proportion of renewable energy sources is remarkable high, and the country is among the worlds biggest producer of biofuels (MME, 2012).

In the rise of the oil prices in the 1970s and declining Brazilian sugar exports the current Brazilian Institute of Alcohol was reinforced and the government began the Brazilian ethanol program named Pró-Alcool. The aim of the program was to develop technologies, spur the increase of production and wide spreading the use of ethanol for fuel. Between 1970s and 1980s the government of Brazil stimulated both supply and demand of ethanol by measurements such as strongly subsidising ethanol production and tax incentives that reduced prices of ethanol-powered cars. (ANP, 2010)

So what could the reasons be for Brazil becoming a pioneer in ethanol production?
The Brazilian sugar systems go way back in tradition and know-how ever since the country was colonised in the 16^th century with an agricultural aim of culturing and exporting sugar inter alia. Technologies have over the years been refined and the production of and use of ethanol as motor fuel had an early start in Brazil. When sugar exports were declining, the expansion of ethanol might initially have been a relief measurement for the sugar industry and a synergy effect of that, a decimated dependence on oil import. Realising the potential of this alternative energy source and with production and knowledge already established, the natural thing to do would be to re-evaluate assets you already have; sugar and a country with indigenous technology. The government acknowledged this asset and when oil prices peaked on top of a declining sugar export, focus on ethanol production primarily for the domestic market seemed viable. In order to stimulate and control the demand and supply, governmental intervention in terms of subsidies, tax incentives and domestic manufacturing of subsidised ethanol-powered cars progressed for decades resulting in a turnover from sugar to ethanol production that in contrast to wind and solar power does not need or is dependent on imports.