Areva to exit Solar Thermal Business

Solar thermal technology has been on a downtrend for a long time now and Greenworldinvestor has been one of the first to call the declining fortunes of solar thermal technology, as solar PV has made massive leaps in technology. Solar PV panels can now be used to set up plants with 9-10c/Kwh which makes it quite competitive to fossil fuel plants, especially since these prices are fixed for 25 years while fossil fuel price increases by 3-4% every year.

Solar thermal technology has suffered from long gestation times and high costs. Its only advantage of providing 24/7 power has not proved to be good enough to offset the large difference in costs with solar PV. Besides, large solar thermal plants face environmental backlash and also require large amounts of water, which is not kosher in desert areas where solar thermal plants are built.

Most of the large solar thermal companies such as Siemens and solar reserve have already shut shop in the last couple of years. Desertec which was the champion of solar thermal technology intending to set up giant plants in the Sahara desert to provide power to Europe has also imploded. Now Areva the giant electrical equipment and automation giant has also decided to exit the solar thermal business seeing the paucity of opportunities. The French giant saw its share price plummet after it announced a first half loss and forecast a 10% fall in revenue. Areva is suffering from both a decline in nuclear energy, as well as solar thermal energy business. The company has not managed to sell nuclear reactors as Fukushima has made most countries completely shut off nuclear. The solar thermal business which was generating 100 million euros in annual revenues was also bleeding money. The company has decided to shut off this business as well.

Most solar thermal developers such as Reliance Power in India face huge troubles now as there are only a few equipment suppliers of solar thermal equipment. Besides it is very hard to change suppliers midway because of big difference in technology.