Large-scale solar is about to rise on the energy scene with unprecedented impact. The revolution in small-scale solar is well-known, with installation of small solar systems in California, New Jersey, Germany, Japan and Spain setting records each year. But the time for 5 megawatt and over systems seems to have arrived.

I recently attended the first annual Concentrated Solar Power Summit in San Francisco. Attendance was double what was expected, with over 300 business, academic, non-profit and governmental representatives present. The summit began on a rocky note, with discussion focusing on the fact that the federal energy bill passed in December did not include an extension of the 30 percent investment tax credit, considered crucial for new large-scale solar projects to be built. But the mood lightened up throughout the two days, with company after company presenting its technology and utility company, non-profit, and government voices expressing optimism for the various solar technologies presented.

Large-scale solar (which I define as any solar technology used in facilities of 5 MW or larger) is a better load-following resource than wind, today’s more cost-effective renewable energy technology. Wind power is competitive today with fossil fuel power generation, but whereas wind power often peaks when demand is far from its peak (depending on the location of the wind turbines, with inland turbines being more likely to peak at night and coastal turbines more likely to peak in the afternoon), solar facilities peak in early to late-afternoon. This is much closer to the time of peak demand, which typically occurs in the late afternoon or early evening.

To sweeten the solar deal even further, some large-scale solar technologies can be “firmed up” with storage systems like molten salt thermal storage. This technology was developed at Solar Two, the “power tower” system built in the 1990s near Barstow, which achieved multi-day continuous operations with its molten salt thermal storage.

Solar Reserve, one of the most exciting new companies to present at the Summit, is the direct descendant of the experience with Solar Two. Solar Reserve is a joint venture with Rocketdyne and United Technologies, and has the engineer who ran the Solar Two project for a decade on its team. This company claims that it can achieve cost parity with natural gas power plants today – with the investment tax credit. It also claims that it is more cost-effective to include the more expensive energy storage systems with their facilities because these facilities can then sell power during peak pricing, while also becoming reliable peak power providers.

Claims Must be Backed Up

We must take all such claims with a grain of salt – until they are substantiated with “steel in the ground” – but the general buzz at the Summit was truly exciting. Most companies that discussed price focused on the target contract price of 15 cents per kilowatt-hour, as the price at which companies could turn a decent profit and also ensure construction occurs. The price for electricity from new baseload natural gas plants is about 9 cents per kilowatt-hour, and rises to 12 to 48 cents per kilowatt-hour for peak power, depending on what report you read.

Many utilities have signed power purchase agreements with solar companies, including two massive contracts with the concentrating dish manufacturer, Sterling Power, which was notably absent from the Summit. Sterling has contracts of 850 and 900 MW, respectively, with Southern California Edison and San Diego Gas & Electric. More recently, and perhaps more realistically, Solel recently received signed a contract with PG&E for 553 MW of trough-based concentrating solar power (the most prevalent technology today, with facilities in California, Nevada and Spain). Also quite promising is the 177 MW project planned by Ausra for a site in San Luis Obispo County. Ausra has a contract with PG&E for this power and has also announced it plans to construct a manufacturing facility in Las Vegas, vertically integrating its operations.

CalRENEW-1, a 5 MW solar photovoltaics project, just received approval from the California Public Utilities Commission (CPUC) to sell power to PG&E. This is the first solar PV project contracted for under the state’s “renewable portfolio standard.” With the RPS system somewhat re-structured this year by SB 1036, the CPUC now has authority to approve contracts even if they come in over the “market price referent,” which is the proxy cost of power from new natural gas plants. The “word on the street” is that the cost of PV is coming down fast, such that it may now be able to compete favorably with concentrating solar power technologies and may even be competitive with new natural gas-fired electricity. If true, this will be truly revolutionary, though it is hard to envision 1,000 MW solar PV farms spread throughout the desert, considering the vast ramp-up in solar PV production that would be required for such projects.

However, there are literally 50,000 MW of large-scale solar projects proposed in Southern California, consisting of trough, dish and power tower concentrating solar power projects as well as some truly massive PV projects. The entire installed capacity for all of California is less than 70,000 MW, so the magnitude of new solar projects proposed is incredible.

Many of these projects may, however, turn out to be “vaporware” – more aspiration than reality. But even if 10 percent or less of these projects is built, 5,000 MW of large solar facilities will more than achieve California’s ambitious renewable energy goals, and will, very likely be a cost-saver for ratepayers in the long-term. This is the case because even if such facilities cost more up-front, costs can be locked in over the life of the contract because there are no fuel costs. Construction and amortization costs are known at the start of the contract, so if ratepayers are paying 15 cents per kilowatt-hour for the life of the contract, such prices will very likely be less than what ratepayers will pay for electricity from new natural gas plants because the cost of natural gas has risen precipitously and is projected to continue to rise at a rapid rate.

So will we see this revolution go beyond the ranks of the attendees at the Summit in San Francisco? The general consensus was that the investment tax credit needs to be renewed – and not for just one year. The Senate stimulus package recently proposed includes a 1-year extension, so let’s hope this is enough to continue progress on the many projects already proposed. Taxpayers and ratepayers will almost certainly benefit over the coming decades if Congress and our president are wise enough to see the light.

Comment by Bob Amorosi:

3kwh/m^2/day of sun would be fantastic. I can envision just half of my residence's rooftop here in Ontario equipped with a small-scale CSP. Just 20 to 30 m^2 would satisfy my residential energy needs easily, with lots to spare on sunny summer days. Combine this technology with some sort of decent future storage capability (in my basement), and I might even be able to divorce myself from the grid altogether all year long.

You know, if this technology were available commercially, even if it were many thousands of dollars, it would be worth pitching to new home builders as an option. When someone goes to buy a new home and spends in the order of 500 thousand on it, even adding another 10% to the mortgage to pay for a CSP system would be attractive if meant no utility bills to the home owner for the life of their mortgage.

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