LONDON — Amid the turmoil that is currently afflicting the solar PV market in the U.S. it seems that another solar sector has sailed into troubled waters with little by way of a splash. Noticed or not, concentrating solar thermal power (CSP) is also nonetheless perhaps set to take a tumble given the current market portents. For instance, there have been a number of business failures in the sector and simultaneously project technology swaps away from CSP and to standard PV as that technology’s costs have dramatically fallen. A constrained finance market has combined with these factors to see opportunities for CSP dwindle. Or has it? For while it is true that certain business models have indeed failed, others have shown that they are by no means ready to throw in the towel when it comes to CSP.
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.
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.
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.”
GE recently unveiled its Integrated Solar Combined Cycle (ISCC) power plant that couples eSolar’s technology with GE’s combined cycle gas turbine products. “Adding eSolar’s high temperature tower technology to our combined cycle product offering allows us to offer an integrated solution with unparalleled efficiency, full dispatchability, and a market competitive cost of electricity,” said Browning, adding: “It allows us to offer a power plant that creates more value for customers.”
Through the licensing agreement the two companies are targeting Europe, Africa, the Middle East and the U.S., and are working on a 530-MW project in Turkey with investor and power project developer MetCap Energy, which will feature 50 MW of eSolar solar tower technology integrated with GE’s new FlexEfficiency 50 combined cycle gas turbine and 22 MW of GE wind turbines.
Located in Karaman, Turkey, the plant is scheduled to begin commercial operations in 2015. EPC services will be provided by Gama Power Systems Engineering and Contracting, Inc.
“We believe this project will set a standard for power generation investments where sunshine and wind is abundant in places like the Middle East,” said Gökhan Ínanç, deputy managing director of Gama.
This announcement followed a similar move to create a technology licensing agreement for linear Fresnel solar thermal power technology between JFE Engineering Corp (JFEE) and the Solar Power Group (SPG).
Under the terms of the deal, JFEE will commercialise SPG’s Fresnel technology having exclusive sales rights in Southeast Asia and Oceania and will also market the power plants in other countries.
SPG has demonstrated its technology at the 800 kW FRESDEMO pilot plant in Almería, Spain, it says.
“We will offer a competitive power plant to the market by combining SPG’s technology with ours for BTG (Boiler, Turbine & Generator) technologies,” pointed out Shigeyoshi Kosuge, senior managing director of JFEE. The company aims to enter into the solar thermal power market to the tune of ¥15 billion (€130 million) by fiscal year 2015.
And, in late September, this was followed by a deal with GDF SUEZ to develop a CSP project in Chile.
GDF SUEZ and SPG are to jointly develop a 5 MW system which will supply superheated steam to the Mejillones coal-fired plant (150 MW) in the North of Chile.
The next step involves the finalisation of permits, with the intention for the pilot plant to be in operation in early 2012.
E-CL, GDF SUEZ’s electricity company in northern Chile, will be the off-taker of the steam.
Siemens Energy has also recently received an order for a solar field using its recently acquired CSP technology in Catalonia, Spain, from the Spanish EPC UTE Termosolar Borges. Under the terms of the deal, Siemens will design, supply, integrate and construct the entire solar field, including the mirrors and solar receivers.
The parabolic trough power plant, to be built in Les Borges Blanques near Barcelona, will have a capacity of 22.5 MW and will include energy from biomass in addition to solar. The project is planned to go operational in early 2013. Together with the 50 MW Arenales project and the 50 MW Olivenza project also announced in the last few months, Siemens Energy is now constructing some 122.5 MW of parabolic trough plant.
TECHNOLOGY CUTS COSTS
As well as a series of commercial developments, technological advances must also be acknowledged. For instance, Schott Solar says it is extending its position in the CSP receiver market by offering a significantly improved product design. The company says its PTR® 70 receiver sets new standards for efficiency and long-term stability. A new coating that is being used in the unit increases the absorption rate of the receiver to over 95.5%, Schott says. At the same time, the emissions level of the heat radiation sinks to under 9.5%, they add.
To keep losses low – even after many years of operation – the company adds that it has introduced noble gas capsules that are to be integrated into the vacuum region of the receivers and may be opened at any time during the service life. Noble gas helps keep heat losses permanently low, Schott says.
And, in collaboration with the engineering team of schlaich bergermann und partner, FLABEG is developing a new solar collector design which it says will give both improved efficiency and cost reductions of solar thermal parabolic trough systems.
Since January 2010 a high level engineering team comprised of both companies has been developing a new collector, which they claim will be about 25% more cost effective compared to the company’s current parabolic trough by lowering specific cost (€/m<sup>2</sup>) and improving performance.
The new system will be optimised for large solar fields in the range of 500,000 to 2,500,000m<sup>2</sup> aperture area, they add. A larger diameter of the heat collection elements, supported by improved selective coatings with lower emissivity, allows a design with lower parasitic consumption and less piping in the solar field. Also the number of drives, sensors and controls is reduced by more than 50%, FLABEG says.
And, it is not just improvements in headline efficiency or bottom line costs which are advancing CSP. In October came the official inauguration of the Gemasolar plant in Spain.
Owned by Torresol Energy, a joint venture between Masdar and Spanish engineering group SENER, Gemasolar is the first commercial plant in the world to use molten salt thermal storage in a central tower configuration with a heliostat field.
Its storage capacity enables the plant to supply energy to the grid, based on demand, regardless of whether there is solar radiation. Thus, Gemasolar, with its 19.9 MW nameplate capacity, is expected to produce a net total of over 110 GWh per year by operating 6450 hours a year at full capacity.
Torresol Energy is developing two further facilities — Valle 1 and Valle 2 — in nearby Cadiz. These 50 MW facilities will employ parabolic trough technology and have an expected net electrical production of 160 GWh/year each. Both are scheduled to commence operations by the end of 2011.
Furthermore, and perhaps an unlikely source of renewable energy investment, Chevron Technology Ventures, a division of oil major Chevron USA Inc. has launched a CSP demonstration project.
The project uses 7,600 mirrors and the steam produced is injected into an oil reservoir to increase production by lowering the viscosity, displacing fossil fuels which previously generated steam.
BrightSource Energy Inc., is the technology provider and EPC. The project will be operated by Chevron Technology Ventures.
Indeed, while there is no doubt some turbulence, of all renewable energy sources, CSP will potentially be one of the major contributors to global energy needs. According to estimations by the IEA, 10-15 percent of global electricity production will be generated by CSP in 2050.