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US To Invest $1.85B in Abengoa & Abound

July 6, 2010 | 19 Comments

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Washington, D.C., United States -- In his weekly video address on Saturday, President Obama announced the offer of conditional commitments to Abengoa Solar Inc. and Abound Solar Manufacturing for loan guarantees of US $1.45 billion and $400 million respectively.

Solana will employ solar trough technology using parabolic shaped glass mirrors that direct sunlight onto receiver tubes that heat the fluid inside to over 700 degrees Fahrenheit.

Abengoa is expected to use the money to finance the construction and start-up of a concentrating solar power generating facility. The Solana, Arizona plant will add 250 megawatts (MW) of capacity to the electrical grid using parabolic trough solar collectors and an innovative six-hour thermal energy storage system-the first of its kind in the country.

Electricity from the project will be sold through a long-term power purchase agreement with Arizona Public Service Company. Abengoa Solar estimates that the Solana project will employ approximately 1,600 workers during the construction phase of the project and create over 80 skilled permanent jobs for the plant's operation.

Over 70 percent of the components and products used for Solana will be made in the United States. Two assembly factories will be constructed on the Solana site, and as a result of Solana's large need for mirrors, a new mirror manufacturing facility will be sited just outside of the Phoenix area, contributing additional direct investment and adding more jobs to Arizona's economy.

Solana will employ solar trough technology using parabolic shaped glass mirrors that direct sunlight onto receiver tubes that heat the fluid inside to over 700 degrees Fahrenheit. The heat is then used to turn steam turbines. The project also includes a thermal energy storage system that will allow Solana to produce electricity after the sun has set.

Abound Solar will use the money to continue its move toward full commercialization of its thin-film solar panels. Funded by the American Recovery and Reinvestment Act, this project includes two facilities, one in Longmont, Colorado and the other in Tipton, Indiana. The Indiana facility will occupy a new factory originally constructed for a Chrysler auto parts supplier that was never able to move in due to the economic downturn. The company anticipates that the project will create approximately 2,000 jobs during construction and 1,500 permanent jobs.

"This project is yet another example what the Recovery Act has done in communities across the country in creating the new, clean energy jobs of the future," said Energy Secretary Steven Chu. "By supporting new cutting-edge solar manufacturing technologies, we are advancing a diverse renewable energy portfolio while helping to position the U.S. at the forefront of the global green economy."

The company will use proprietary manufacturing technology developed jointly by Colorado State University, the National Renewable Energy Laboratory and the National Science Foundation. They will produce photovoltaic panels using an innovative process in which thin films of Cadmium-Telluride are deposited onto the glass panels. Upon completion, the project will be able to manufacture enough panels each year to support up to 840 megawatts (MW) of new solar power annually. The project is expected to reach full capacity by 2013.

Solar Energy

19 Reader Comments

Comment
1 of 19

rolf-westgard-67277

July 7, 2010

Trying to understand the numbers. Near $1.5 billion for 250 name plate MW. Give it a generous 50% capacity factor with its mysterious thermal storage system, you would be at $12 billion for 1000MW. Sounds like a good argument for nuclear or combined cycle NG which among other things would provide a lot more jobs. And the 30% imports are probably the high tech part.

Comment
2 of 19

a-b-24958

July 7, 2010

" Give it a generous 50% capacity factor with its mysterious thermal storage system "

Nothing mysterious, it is molten salt, I guess. And it won't produce CO2 or nuclear wastes that have to be dealt with by your kids once you are gone . . .

http://www.renewableenergyworld.com/rea/news/article/2010/06/foster-wheeler-to-supply-torresol-steam-generators?cmpid=SolarNL-Tuesday-June22-2010
June 18, 2010. Foster Wheeler AG announced that a subsidiary of its Global Power Group has been awarded a contract to design, supply and provide site advisory services for two sets of solar steam generators, including preheaters, kettle type evaporators, superheaters and reheaters, as well as low pressure and high pressure feedwater heaters. The equipment delivery is scheduled for the first quarter of 2011.
The plants will use Seners's concentrated parabolic trough technology (SENERtrough) and will have energy storage capability by means of molten salt tanks that is designed to provide up to seven hours of plant operation without sun radiation. The plants are expected to operate approximately 3,500 hours/year. The equipment will be integrated into the Valle 1 & Valle 2 Solar Thermal Power Plants, located in San José del Valle, Spain. The plants, which are owned by Torresol Energy, a company created by Spain-based Sener (60%) and the Abu Dhabi-based company Masdar (40%), will have an installed power capacity of 50 megawatts (MW) each.

http://www.pv-tech.org/news/_a/project_focus_morocco_secures_agreements_for_9billion_solar_plans/
Morocco has now reportedly secured agreements with the World Bank, the European Commission and Germany in connection with its large-scale US$9 billion solar project, which is expected to produce 38% of the country's power by the year 2020. The project consists of five power generation sites that will produce 2000MW of electricity, with a combined surface area of 10,000 hectares, in Ouarzazate, Ain Bni Mathar, Foum Al Oued, Boujdour and Sebkhat Tah.

Comment
3 of 19

david-doty-31004

July 7, 2010

Had some similar thoughts, Rolf, except that I doubt that the CSP gets close to 50% capacity factor. A bigger concern is that it took First Solar over a decade to go from commercial production of CdTe panels at moderate scale to commercial production at large scale of a CdTe panel with more than 5 years lifetime. There is no data showing that Abound Solar knows how to make a CdTe panel at low cost that will achieve high efficiency for years in the field. Of course, we need to have more than one viable source of the type of panel that has proven to be the most cost effective, but I worry that what we have here is a case of Uncle Sam deciding to screw First Solar – and the tax payer.

With respect to CSP, this is a case of the US investing an enormous amount of money into an outdated technology in a foreign company from a country that may be on the verge of bankruptcy. Even a year ago, I still believed CSP had a bright future; but the evidence is steadily increasing that PV will win, and CSP will become a dinosaur.

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4 of 19

rolf-westgard-67277

July 7, 2010

Yes, David. this is another case of a foreign company sopping up our money. I had hoped that the mysterious thermal storage system would be something better than molten salt. Excel Energy is buying a multimillion $ molten salt system to keep the energy ignorant MN legislature happy. But its a useless kluge with limited capacity.
It's hard to comprehend how our Nobel physics DOE chief could be sucked in by this as well as the earlier attempt to scrap Yucca Mountain. Lawyers appear to be running the energy show at the moment.

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5 of 19

doggydogworld

July 7, 2010

Solana will provide dispatchable daytime power which is much more valuable than intermittent and "too-early" daytime power from PV or the "day-and-night" power from nuclear. You need to compare costs vs. load-following and peaking power, which is very expensive in the summer.

It's also not clear if Solana will need the entire 1.45b loan. All estimates I've seen for construction cost are around 1b. Some of the extra 0.45b may be startup costs for this first-of-a-kind plant, some may be extra room to allow for worst-case cost overrun scenarios.

Comment
6 of 19

Anonymous

July 7, 2010

They should have funded Enviromission's solar draft towers project in Arizona instead. Potentially way cheaper, simpler, no oils or salts, no water consumption, employing proven processes and with all of the integration advantages (thermal inertia) of trough. Anyway, looks like SCPPA (in SoCal) is going to cash in on it. A great solar choice IMHO. This was just presented in Burbank, CA City Council yesterday (Pg. 14):

http://burbank.granicus.com/MetaViewer.php?view_id=6&event_id=17&meta_id=80554

In stark contrast, Abengoa's energy prices (like most thermals) are likely very high. The storage system only adds capital cost and complexity and reduces value. (Truly, do you want to pay solar prices during evening base load periods?) IMHO steam cycles (turbines) are for the last century. It's time to move on to advanced systems. PV and draft towers.

Come on America, is this the best we can do? Dumping money into an antiquated solar technology?

Should we not be fostering competing solar technologies to create competition and innovation?

Comment
7 of 19

Anonymous

July 7, 2010

Here's more on what I think the US should have funded:

http://www.youtube.com/watch?v=xb-mQcvGczo&feature=related

How can this not work? Heat capture under glass + convective flow + wind turbines + a big tower. All employing well understood principles.

The tower is not even as tall as the finished Burj Dubai skyscraper in Dubai.

Comment
8 of 19

rolf-westgard-67277

July 7, 2010

Nuclear power is always dispatchable. Solar power is dispatchable when the sun shines or in the relatively brief period when sodium sulfur's giant batteries, kept at 550F, have storage. So far there are NO truly dispatchable solar systems in the world.

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9 of 19

rolf-westgard-67277

July 7, 2010

There's an eerie similarity between the effective 100MW here at Solana, and the 100 summer megawatts from the $2 billion Cape Wind farm boondoggle. Taxpayers generally won't lose at Solana. It's just the APS rate payers who will get hosed to cover the $1.45 billion.

Comment
10 of 19

doggydogworld

July 7, 2010

Rolf - nuclear is not dispatchable. It is baseload, not load-following or peaking. If you engineer it to be load-following your cost/MWh increases a lot.

Anon - the Enviromission concept is extremely low density. I never understood how it could be cost-effective. They've been around for years, never built anything and probably never will.

Also, your "evening baseload power" comment is misguided. Peak electicity demand in SW US locations can come as late 8pm. A/C usage is not driven primarily by sunshine, which peaks around 1pm local in daylight savings time zones, or even by outside air temp, which peaks around 4-6pm, but by the cumulative buildup of heat during the day in the thermal mass of the structure.

Comment
11 of 19

rolf-westgard-67277

July 7, 2010

Nuclear power is always available. Wind and solar are not which is why they currently provide less than 2% of our nations electric power. Solar is so small you can hardly measure it.

Comment
12 of 19

TheGreatUnknown

July 7, 2010

Doggy - until we see a price, we have no idea if Enviromission is cost effective. From what I have seen the capacity density is comparable and the energy density superior (due to cf's I've heard well above 50%). Obviously SCPPA is seeing some value. I believe their contracts are public so we should be able to see some form of price soon.

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13 of 19

doggydogworld

July 7, 2010

TheGreatUnknown - you can do rough estimates based on their stated tower size and covered area. Their cost numbers seemed much cheaper than similar structures (skyscraper shells, greenhouses, etc.). I just couldn't get the numbers to line up at all.

What did SCPPA actually sign up for? CA utilities do tons of renewable power purchase agreements for projects that never gets built because the vendor can't fund it and make money at the contracted per kWh price. SCPPA does take an ownership stake in many of their proejcts, but not this one as far as I can tell.

Comment
14 of 19

TheGreatUnknown

July 7, 2010

Doggy - Not sure. I just don't see how solar tower does not work as expected. The equations and principles are simple and well understood with the only real challenge being the building of the tower, which is structural. I like the odds.

Comment
15 of 19

rolf-westgard-67277

July 7, 2010

Permanent jobs at Solano will number 150, not the thousands the President is touting. Wet cooling is likely, using 1.4 million gallons of water a day. It's another Cape Wind boondoggle.

Comment
16 of 19

michael-taylor-48754

July 8, 2010

refering to comment 6. wouldn't investing in older proven tech speed up the installation and use instead of waiting for research and devlopment?

Comment
17 of 19

dtrahan

July 12, 2010

Let's see. 80 permanent jobs created according to various reports. Spend $1.4 billion get 80 jobs. Doesn't seem like a good trade. Why not take the $1.4 million divide it up over the 70000 homes and let individuals install PV. Less stress on grid maybe. Bigger is not always better.

Comment
18 of 19

MyEnergyMan

July 13, 2010

Mr. President Obama, Abengoa Solar a foreign based company getting Billions of our tax dollars producing 70% of the components here in America and 30% abroad. As a taxpayer putting billions of dollars to a foreign company to produce jobs here is ludicrous. This has to stop.

We do not need Abengoa we can do here all here 100% American Made. Putting 100% of the funds to 100% American Companies producing 100% American Made Parts.
If it's sush a good deal let the foreign company spend their own moneys since they will be selling the power. They can get their investment back from being a competitive power provider.Power 70,000 homes with this solar farm for 1 Billion.That's $14,285 for a solar power for each home.

Now look at these numbers a company 100% American owned can for $100,000,000 produce power 70,000 homes with 23 substations placed where power is consumed. This product is 100% green, needs no storage systems, uses no chemical reactions and will create 100% American Jobs. It makes power 100% of the time on demand at 100% capacity.
Has the same reliability as Hoover Dam Power without the environmental concerns for only 1/10 the cost of this solar farm or just $1.430.00 per home.I encourage you to contact your Senator to let them know this Corporate GIFT to foreign companies has to stop. We have the technology here we do not need to give our hard earned cash away to create technologies that are over priced and under performing. Let them know we have a company here in America who will put America to work making a 100% American Made GREEN Technology that we can EXPORT creating long term job growth and that company is Electric Energy Store located in California.

www.electric-energy-store.com

Comment
19 of 19

ron-peterson-82973

July 15, 2010

Loan guarantees don't cost the taxpayer much unless the project fails or the market disappears.

Building the project will employ people, just not permanently.

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