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International arbitration report
In this edition, we focused on the Shanghai International Economic and Trade Arbitration Commission’s (SHIAC) new arbitration rules, which take effect January 1, 2024.
United Kingdom | Publication | December 2017
The sun has long been a source of free and clean energy in the world of agribusiness, providing crops the nourishment they need to grow. However, the wider energy sector is now starting to utilise solar power for agricultural technology as well. Global investment in solar power generation is growing very fast. Solar energy increased its share of global electricity generating capacity by 50 per cent in 2016 alone, overtaking growth in wind, gas and other renewable technologies1. The cost of solar photovoltaic cells – the major capital cost in solar installations using that technology – has fallen 80 per cent since 20082. Technological innovation and manufacturing competition have intensified and Chinese manufacturers have gained significantly in market share.
Rooftop solar photovoltaic cell installations – a form of what is referred to in the electricity sector as distributed generation, located at the point of use – are now widespread. They are usually connected to the low-voltage electricity distribution grid and have often benefitted from feed in tariff incentive schemes, whereby the owner receives revenue for feeding surplus electricity into the grid. Even as incentive schemes have been scaled-back or withdrawn, falling capital costs are helping to keep these installations attractive. Solar microgeneration for isolated agricultural applications such as irrigation pumping and electric fencing is also now familiar, flexible and cost effective.
Rooftop solar that is not connected to the grid remains an elusive proposition. Even though the cost of solar photovoltaic cells has fallen significantly, the inability of such installations to provide round-the-clock output is a limitation for 24 hour energy intensive processes such as crop drying and food processing. This may change in the longer term as better and more cost-effective battery storage solutions become available, enabling users to make fuller use of their solar modules balancing their own demand.
Of increasing significance are large-scale solar parks, where arrays of solar PV modules are mounted on frames and owned and operated by developers. These parks now exist at utility scale. Such parks require a great deal of space, so that the rows of modules do not shade each other. They may cover a number of hectares and low-grade agricultural land is ideal for such ventures. The frames are usually low in height and installed over grass. The grass either has to be kept cut – a labor-intensive maintenance expense – or can be combined with suitable activities such as sheep grazing.
Recent years have seen renewed experimentation with the concept of “agrivoltaics” (or “agrovoltaics”, to use the spelling adopted in continental Europe), where solar panels and arable farming share the same land. The concept is that narrow panels are mounted at wide spacing on high frames and under-sown with valuable food crops. The panels shade the crops to some extent but the microclimatic effects are complex and site-specific. Shading may be a benefit or a disadvantage, taking into account effects such as the impact of the shade on evaporation rates. The effect on crop yields may therefore be positive, neutral or negative. Agrivoltaics seems generally to be well suited to market gardening, perhaps less so to arable crops. The agrivoltaic system also reduces the maintenance issues associated with more closely-spaced solar panels and puts the land to productive agricultural use. However, there are still some issues with cultivation operations to be weighed up, such as limiting the size and efficiency of farm machinery that can be deployed under and between the frames.
Of greater potential significance in countries with high levels of insolation is an alternative technology to photovoltaics: concentrated solar plants. Concentrated solar plants use parabolic mirrors to concentrate the sun’s energy on a vessel containing a medium of oil or salt, which becomes superheated. The heat from the oil or salt medium is used to heat water in a heat exchanger and the steam is then used to run conventional steam turbine generating units. These steam turbines can be dispatched to meet electricity demand in a similar way to non-renewable plants – overcoming a key limitation of photovoltaic technology. Crucially, the heat in the oil or salt medium is retained for some time after sunset and the plant can therefore continue to generate into the evening electricity peak demand.
Concentrated solar plants are not yet widespread but agriculture is well ahead of the game. Last year, a company in South Australia – the driest state on the driest continent on Earth – completed a 1.5 megawatt concentrated solar plant, which it uses for its agricultural operations. It cools 20 hectares of adjacent greenhouses and runs seawater desalination and water treatment plants for the farm’s irrigation purposes. Inside the greenhouses: a year-round controlled climate which produces 15 per cent of Australia’s tomatoes and exemplifies how food production can be adapted to even the harshest of environments in a sustainable manner.
The largest grid-connected concentrated solar installation in the world – with a capacity of 1,177 megawatts – is currently under construction in Abu Dhabi and rivals traditional fossil fuel plants in size. Very large arrays of this type are also planned in Tunisia, in conjunction with interconnectors that will enable power to be exported to Europe. The challenge is also being taken up in Morocco, a country almost entirely dependent on energy imports, which has adopted ambitious renewable energy targets. Following the commissioning of the first phase of an ambitious concentrated solar plant at Ouarzazate last year, the country has announced plans to increase renewable generation to over 40 per cent of its requirements by 2020 and over 50 per cent by 2030. This scheme has a strong agricultural dimension, with plans to use subsidised solar power for irrigation pumping, opening up 100,000 hectares of new farmland.
IEA, Renewables 2017
HM Government, The Clean Growth Strategy
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In this edition, we focused on the Shanghai International Economic and Trade Arbitration Commission’s (SHIAC) new arbitration rules, which take effect January 1, 2024.
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