Is CSP Facing Headwinds?

Evidence of a potential rout for CSP began to mount earlier this year when a number of projects, such as Tessera Solar's Calico Solar Project and Imperial Valley Solar Project, were apparently switched to PV after the original proposals for using CSP technology ran into trouble — largely on the back of the tumbling costs of PV.

Most recently, Solar Millennium AG agreed the sale of its Southwestern U.S. project pipeline with an output of 2.25 GW and consisting of CSP projects to solarhybrid AG.

Starting as early as 2013 solarhybrid will use the location to build solar power plants "using state-of-the-art photovoltaic technology," a statement says. This first project will be the 1,000-MW Blythe solar plant in California.

Under the terms of the agreement, Solar Millennium will receive a significant profit-share upon construction, in addition to being reimbursed the outlay for its entire project investment.

Both companies expect the negotiations to be successfully concluded as REW goes to press and solarhybrid has already paid the first installments on the purchase price. However, the companies have agreed to keep the details of the transaction confidential.

As a result of the agreement, Solar Millennium says it will focus on realising new and already planned solar-thermal and hybrid power plants in Europe, Asia, North Africa and Latin America and expand its respective technology platforms. The company adds that, in the US, it will be available as a project partner as soon as demand for storable solar energy starts growing again, with parabolic trough technology being its specialty.

Indeed, the company just inaugurated its Andasol 3 plant in the Spanish province of Granada.

The completion of the third Andasol power plant on a site measuring some 2 km² has meant the creation of Europe's largest solar power plant, located in Andalusia, in the south of the country.

With an installed output of 50 MW, its developers say Andasol 3 is expected to generate some 165 MWh annually from its roughly 205,000 parabolic reflectors.

Joachim Ludwig, executive board member with Ferrostaal AG said: "The market potential of solar thermal power plants is immense. That's why we got involved in Andasol 3 from day one, providing financial backing for the development of the project."

While work on Andasol 3 began in 2008, even back in January things looked far more optimistic for CSP as NTR plc announced the official opening of its Maricopa Solar power plant in Phoenix, Arizona.

Four months after breaking ground, NTR's Tessera Solar and Stirling Energy Systems (SES) unveiled the 1.5-MW project, the first commercial system for the 25-kW SunCatcher dish-Stirling engine CSP technology, designed and manufactured by SES. Maricopa is comprised of 60 of these SunCatcher units.

At that time in the SES development portfolio the first project in the Imperial Valley was 750 MW with the first 300 MW contracted under a power purchase agreement with San Diego Gas & Electric near El Centro, California. The second project, Calico, is an 750-MW project with Southern California Edison near Barstow, California; and Western Ranch is a 27-MW project with CPS Energy in West Texas.

However, in August Dublin-based NTR plc announced its financial results for the year ended 31 March 2011 in which it announced that it has decided to fully write down its solar investment, significantly contributing to losses of €280.2 million. This follows the decision earlier in the year to limit funding to its solar business, SES, "as it has not yet succeeded in attracting third-party investment." SES continues to seek third-party investors, the company says.

Commenting on the year, Michael McNicholas, chief executive of NTR, said: "This was a challenging year for NTR. We have taken a hard look at all of our businesses and made the necessary decisions to strengthen the group. We have reined in development spend and costs across the group and are driving increased value from the core businesses."

Subsequently, NTR's Tessera Solar sold its 750 MW Calico solar power project to K Road Power — less than a week after utility Southern California Edison had reportedly canceled a power purchase contract from the Mojave Desert-based plant.

However, K Road said a subsidiary, K Road Sun, will replace Tessera/SES's SunCatcher dish-Stirling technology with PV for the majority of the plant — 663.5 MW — although it will apparently use the SES dish-Stirling systems in a second phase of 100.5 MW.

August saw California Unions for Reliable Energy (CURE), a coalition of unions, announce a new collaboration with K Road Calico Solar, LLC. And, K Road also recently announced that Barclays Natural Resource Investments (BNRI), a division of the investment banking unit of Barclays Bank PLC, will make a "substantial commitment to fund the continued development, construction and operations of K Road's utility-scale solar power portfolio."

K Road currently has 11 solar power projects in the Southwestern US at various stages of development, totaling nearly 2300 MW. The near-term portfolio includes theCalico project in San Bernardino County, and the 350 MW Moapa north of Las Vegas.

SES and Tessera Solar are now apparently in liquidation.

CSP Supporters

Despite all the appearance of a troubled outlook, CSP is not without some influential supporters. For instance, GE certainly backs CSP, announcing back in August that it is to invest up to $40 million in eSolar, a developer of modular CSP technology, in addition to an existing licensing agreement between the two, signed in June.

As part of the deal Paul Browning, president and CEO of Thermal Products for GE Energy, will join the eSolar board.

John Van Scoter, president and CEO of eSolar commented that the "investment will fund the development of next-generation, modular solutions that enhance the cost competitiveness of solar, such as molten salt storage technology."