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2 Giant Solar Thermal Projects by Tessera,NTR in USA run into financial trouble even before start of construction

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I have questioned the viability of Solar Thermal Technology given the sharp reduction in costs and technological improvements in Solar PV Technology.I have listed the reasons for Solar Thermal Technology to be uneconomic and probably a waste of money and time particulary for multi billion projects like the Desertec Project.

1) High Costs – Desertec will apparently cost Euro 3.5/watt with another Euro  50c/watt cost for High Voltage Transmission.However these costs are too high  as Solar PV already costs Euro 3.5/watt and even on a conservative basis will have its costs reduced by 5% in the next 10 years making it attain half the cost of Solar Thermal Technology by 2020

2) Political Problems – The Desertec Initiative requires unprecedented coordination between more than 40  countries in Europe and MENA.A Number of countries in MENA like Algeria,Morocco,Egypt etc are politically and socially volatile.There are already concerns being raised on the next phase of European Colonialism through this Energy Project.Some of the countries have disputed political boundaries.There are also no simple solutions to sharing of the costs and benefits.

3) Future Technology has a high probability of making CSP Obsolete – Solar Energy has become a Hotbed of Innovation with daily news of some new breakthrough in materials and process in PV Technology.Oerlikon has come out with a radial new a-Si Technology while CIGs player are touting increased efficiencies.Chinese Solar Companies have captured large chunks of the Solar Market through low cost leadership while number of Global Heavyweights like Posco,Samsung,Hyundai,Sharp,GE,TSMC promise to further decrease these costs.To bet Euro 400 Billion on a Technology that has a high probability of becoming obsolete is too risky.

4) Water Issue – Solar Thermal Plants use lots of Water which is Major Problem in Desert Areas.Using non-water cooling raises the cost of CSP projects too much.While using SeaWater has been proposed it remains to be seen if it possible to implement this solution as this would imply building Plants very near the Coastline

5) Energy Dependence – Currently Europe finds itself hostage to periodic Russian Gas Stoppages as it depends massively on imports of Oil and Gas.However this Project will replace one form of Energy Dependence to Another.Note using distributed PV note only cuts down on Transmission costs,it entirely eliminates the Energy Security Issue.

6) Ecological and Cultural Issues – The Usage of Massive Arrays of Mirrors is noted to heavily impact the Desert  Wildlife endangering the endangered species.California has already seen a massive fight on this issue with Project Developers curtailing the size of their Plants and spending money to move the wildlife.Don’t think this would receive too much attention in the African countries.They are also cultural issues with some of these Muslim countries might have in Exporting so much Energy to Christian Countries.

7) Terrorist Attacks and Rogue Regimes – The Transmission Lines become a prime Terrorist Target which would increase the cost of the Project as Multiple Lines are constructed.There is also the danger that a rogue regime takes control of the North African countries.This would create a situation akin to War over the  Suez Canal by Britain with Egypt.Any sort of Multilateral would impinge on the Sovereignty of the countries creating another problem.

8 ) White Elephant being Built to be Juiced by Companies – Their are  allegations that Desertec is nothing but a monstrous White Elephant being built by the Companies to juice European Taxpayers of Hundred of Billions of Euros.Note this Project cannot be constructed without Massive Subsides by European Countries which would have to be paid over the next 2-3 decades.It would lead to Billion Dollar Contracts for the Involved Companies and More Billions in Profits over the Lifetime of the Project.

Tessera Solar,NTR run into Financial Problems,2 Solar Thermal Projects probably going  to be shelved

Using the same logic,I had questioned the massive amount of USA taxpayer money being given as a cash grant to build almost  4-5 GW of Solar Thermal Plants in California.Most of these solar thermal projects were approved in the last 6 months of 2010 so that they could be eligible for the Treasury Cash Grant under Rule 1603.I seem to have been vindicated quite early with 2 of these giant solar thermal projects being developed by Tessera Solar have run into trouble.The CEO of the company has already left and many of the employees have been fired.Strange for a company that has won multi billion projects in hand.The parent Irish company NTR is reportedly looking to shelve the plants as it does not have enough money for 5% of the total project costs required before 2010 end.

Note Tessera Solar was going to use the Stirling Technology from a sister company Stirling Energy Systems to build its plants of  1.3 GW capacity.However this technology is said to have drawbacks like too many moving parts and the lack of storage capacity.Note Solar Thermal Technology’s main advantage over Solar PV remains its energy storage capability.In costs Solar Thermal Technology is way more costlier at $5-6/watt compared to $3.5/watt.

NTR project delays lead to posting of €210m loss

The energy company reported recently that it lost €210.6 million in the 12 months to March 31st, its financial year, compared with a €22 million deficit in 2009.The main contributor to the losses was a €147.9 million write-down in the value of a number of the utility’s assets, including its Greenstar waste management operation, and its solar power development business, whose value it cut by €96 million.But the projects would require an investment of €2 billion and the company decided to hold off until economic conditions and capital markets’ appetites for such investments improved.Management explained to shareholders at the company’s annual general meeting (agm) in Dublin yesterday that its assets were valued according to their potential to generate revenues.

Stirling Projects Frozen Amid Turmoil: Is the End Near?

NTR–an Irish conglomerate that owns Stirling Energy Systems and Tessera Solar–has decided to hold off on the two solar thermal projects those companies have tried to develop. The two projects–in the Imperial Valley and the Mojave–would be capable of producing around 1.3 gigawatts of power. Unfortunately, the projects would also cost quite a bit of money.

The Irish Times reported that the cost of the two projects and the write-downs associated with them contributed to a 210 million Euro loss for the year.


Abhishek Shah

3 Responses so far | Have Your Say!

  1. William Simpson

    Not worth a comment