Another major solar thermal equipment producer Areva exits the business

4 Sep, 2014 by
Solar Energy

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.

Indian Solar Thermal Developers start giving excuses to escape their stupidly low bids

17 Jan, 2014 by
India,Solar Energy

We at Greenworldinvestor have always been of the opinion that most solar thermal plants will never come up in India, given the atrociously low bids made by companies such as Reliance and Lanco during the reverse auctions of Phase 1 of the Jawaharlal Nehru Mission. While the solar PV developers were bailed out by the crash in the solar panel prices, nothing of that sort has occurred for the solar thermal developers. CSP technology has seen bankruptcies as solar PV costs have declined at a tremendous pace. CSP suffers from a number of disadvantages as compared to solar PV besides the cost.

Solar thermal developers have already got an extension of 10 months and still they are nowhere near completing their solar thermal plants. Only one developer has completed the 50 MW plant, while others are still sitting on their asses waiting for divine intervention to bail them out.

Now these utilities Lanco and Reliance are starting to put the blame on the ministry for the lack of their own performance and stupidity. They are citing wrong DNI data for not completing their plants. Their excuse is that they got the wrong date from the ministry on solar radiation for their plants, which will affect their return projections. This argument simply does not hold water almost 2 years after they won the awards. Did it take them two years to measure the solar radiation data and come to this conclusion? Was it not their responsibility to find the solar radiation data before committing to plants with investments in hundreds of millions of dollars?

It is very clear that these developers have no intention of building these plants and will keep coming up with excuses to escape. This is the whole problem of PPP partnerships with these unethical Indian business groups. Reliance Power is infamous for not building its UMPP plant in AP because the coal prices went up making its stupidly low bid uneconomical. The companies do not understand the concept of risk management and know that the Indian government filled with corrupt politicians will change the rules of the game in their favor later on. If things work out well, they will make tons of money and if it does not, they will get bailed out. So simply bid stupidly in auctions and win out in either case.

 Solar power plants of Reliance Power, Lanco and others, are seeking higher tariffs saying that the data on solar radiation provided by the government was faulty which has led to lower generation. Several companies have filed petitions before the central regulator, seeking higher tariffs jut as a panel chaired by Deepak Parekh recommended compensation for Tata and Adani’s higher costs of generation.

At least three solar thermal power project developers with mandate to commission total 250 mw of capacity have moved petitions before the Central Electricity Regulatory Commission (CERC) seeking higher tariff.

Reliance Power subsidiary Rajasthan Sun Technique Energy, Lanco Group’s Diwakar Solar Projects and Godawari Power and Ispat owned Godavari Green Energy, in their respective petitions, claimed that the solar radiation data shared by ministry of new and renewable energy (MNRE) are incorrect and solar thermal projects may not be able to generate power as per the projection.

However, it turned out 15%-20% less than ministry’s projections for solar radiation, which is the only fuel for our kind of projects.

Indian Solar Thermal Plants in a world of trouble, many of them not to get built

18 Jun, 2013 by
Concentrated Solar Thermal,India,Solar Energy

India has awarded 500 MW of solar thermal plants during JNNSM Phase 1, as it gave both solar PV and solar thermal technology an equal boost. However solar thermal technology is losing out to solar PV even during 2011; and we had pointed it out that giving solar thermal technology too much money did not make sense. In fact we are also against giving subsidy for large ground mounted solar panel farms, as it only benefits large corporate houses. Instead India should give subsidies for rooftop solar installations, which is now seeing some traction. The failure of this policy is now being seen as most solar thermal plants are not being built because the developers are set to lose money.

Only Godavari Power has started the first 50 MW solar thermal plant after paying much higher amounts of money than anticipated and the project being far behind schedule. As solar thermal technology is not developed, major western component suppliers like Dow, Siemens etc. have managed to extract high payments from these developers. Also most of the plants which were won by big companies like Lanco and Reliance Power may never be built. Note Reliance power is notorious for not keeping to its commitments if economic conditions turn unfavorable .  The company did not built its massive 4000 MW plant in AP after imported coal prices shot up making its cost higher than the selling price. Even as Tata Power sold electricity at a loss, Reliance Power stopped building the project.

I think the same thing will happen here as well, as the dollar has risen by 25% during this period and labor costs have escalated. This would mean that these solar thermal plants would not make money, if not lose money. The solar thermal plants had been bid for aggressively even at that time and we had raised doubts about how these developers would be able to recuperate those costs. I think most of the other solar thermal plans will not be built, as the developers might find it more profitable to fight the case in the Indian courts rather than constructing them.

Why is Solar Thermal technology losing to Solar PV technology

Solar thermal energy has been losing out in the last couple of years to solar photovoltaic energy which is seeing a huge increase in demand amidst very low prices. Some of the major solar thermal energy projects in the globe have been converted into solar PV installations due to its lower costs. Some of the major solar thermal energy companies like Solar Millennium have sold their solar thermal portfolios to other companies while Stirling Power Systems has gone bankrupt. Tessera has sold its solar thermal plants which had gotten DOE Loan Guarantees in California to Solar Developers who have made these solar thermal plants into solar panel ones. However there are some companies like eSolar and Brightsource Energy which are powering ahead with their technologies and projects with backing from big industrial MNC  conglomerates like GE and Areva. Their Power Tower Technologies are supposedly more efficient than the mainstream parabolic toughs that are used.

Disadvantages of Solar Thermal Energy

 1) High Costs – Solar Thermal Energy costs at least Euro 3.5/watt and has not declined too much in the last 3-4 years. However these costs are too high  as Solar PV already costs Euro 2.5/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) 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.

3) 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 Sea Water 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.

4) 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.

5) Limited Locations and Size Limitations – Solar Thermal  Energy can only be built in places which have the high amount of solar radiation. They can be built in deserts mostly and require a large land area. This means its not possible to build them in populated areas. Solar Thermal Energy also can only be built in large sizes which are at least 50 MW in size to be economical. This contrasts to Solar PV which is sold in sizes as low as 5 Watts.

6) Long Gestation Time Leading to Cost Overruns – The Gestation Time for permitting, financing, drilling etc. can easily take 5-7 years to develop a concentrated solar thermal power plant. Compare this to 6 months for a small wind farm or 3 months for a Solar PV plant.

7)  Financing – is the biggest problem in developing projects particularly for small solar thermal developers in this industry.

Bloomberg

Godawari’s plant and the other six projects that prevailed in the 2010 auction won licenses by pledging to sell power at an average of 11,480 rupees ($197) a megawatt-hour. That’s 43 percent below the global average of $344, according to data compiled by Bloomberg. Supplier Dow Chemical Co. (DOW) almost doubled the price for its critical heat-transfer fluid to $5.67 a kilogram in the months following the bid, according to Agrawal. The project was further set back when a dust storm caused a building at the site to collapse, delaying construction by a month, while the rupee depreciated 23 percent against the dollar since the auction.Godawari Power & Ispat Ltd. (GODPI) started Asia’s biggest solar-thermal plant as India limps toward clean-energy targets with prices almost half the global average.The 50-megawatt plant in northwest Rajasthan state boasts 5,760 mirrors that concentrate the sun’s rays, generating steam to drive turbines, project Managing Director Siddharth Agrawal said in an interview. Output started a month behind scheduleey were also hurt by overpricing from U.S. and European suppliers with virtual monopolies over niche products such as heat-transfer fluid and absorber tubes, Singal said. Future projects could contain costs by turning to China, which is offering both items at half the price, he said.

 

Every Solar thermal Plant in India is delayed, still the Government wants to award more

14 May, 2013 by
Concentrated Solar Thermal,India,Solar Energy

Every single solar thermal plant awarded under India’s federal subsidy program (JNNSM Phase 1) is delayed according to MNRE. Note I have been critical about solar thermal technology for a long time now because of the manifold problems that the technology faces. The sharp erosion in solar panel prices has made solar PV technology move miles ahead of the solar thermal technology. However, the Indian government wants to give an equal share of solar thermal plants to developers under JNNSM.

Read on GWI Advantages and Disadvantages of Solar Thermal Energy.

Solar Thermal Plants fail to meet the timelines, Government ready to grant Extension rather than Penalize

All solar thermal plants are delayed because of one reason or another and if the contractual guidelines are followed, they would have to pay a penalty of Rs 230 crores. However, in our country crony capitalism rules the roost and the RE secretary wants to give these plants an extension of 10 months. Note India’s power regulator and ministries have been known to give more sops to corporate groups, even when they don’t meet the language of the contract. In the recent UMPP case, all big power companies such as Adani Power, Tata Power and Reliance Power are set to get higher power rates despite the contract clearly stating the price of the contract to be a fixed one.

Indian Government supports Large Power Plants instead of Rooftop Plants and Off Grid Solar

India’s solar power policy is flawed anyway, as the government is giving subsidy to large power plants instead of small solar rooftop plants and off grid solar energy. These plants are not helping improve solar technology nor are they making a big difference in India’s massive power deficit. All they are doing is benefiting some large corporate groups, who are not penalized even when they don’t meet the generous contract terms. Lanco which is building these 2 plants has not indicated a time when it would complete the two plants, while others are also taking their own sweet time. MNRE instead of changing focus is all ready to award 500 MW to solar thermal power during the next phase. Note these solar thermal plants are being supplied by Siemens who has left the business citing its non-viability. Many other top global solar thermal technology providers have shut shop as well. But Indian bureaucrats are living in the dark ignorant ages as usual.

Mint

India’s ministry of new and renewable energy is seeking to defer penalties on about $1 billion of solar-thermal power projects that are delayed by a lack of water, financing difficulties and equipment shortages.Seven projects totaling 470 megawatts in capacity by companies including by Godawari Power and Ispat Ltd., Reliance Power Ltd. and Lanco Infratech Ltd. that were to be ready by May, aren’t operational, Tarun Kapoor, joint secretary at the ministry, said in a phone interview from New Delhi. The projects could potentially forfeit about Rs230 crore ($42.5 million) in performance guarantees, according to rules when the contracts were awarded in December 2010.There’s obviously a problem since all are delayed, Kapoor said. This is the first time solar-thermal projects are being built in India and we want them to succeed. An expert committee at the ministry is recommending a 10-month extension for the projects, he said.

A 100-megawatt project owned by billionaire Anil Ambani’s Reliance Power is about six months behind schedule, Kapoor said. The Indian projects, ranging from 20 megawatts to 100 megawatts in capacity, are using turbines from suppliers including Siemens AG, General Electric Co. and Areva.India has built 1,686 megawatts of solar capacity and expects to award an additional 500 megawatts of solar-thermal capacity by 2017, Kapoor said. The outcome of the plants under construction could affect those plans, he said.

Our earlier article why:

Most Indian planned Solar Thermal Plants under JNNSM might not get built

We have repeatedly highlighted the drawbacks of solar thermal energy vis a vis crystalline solar panel technology. Solar Thermal Plants are getting replaced or mothballed altogether because of the high costs and long build times. India had awarded nearly 500 MW to 5 solar energy developers under JNNSM Phase 1 which were supposed to get built by Feb to May 2013. However only 2 of those plants are under construction while others are delayed ostensibly because of lack of heat transfer liquid availability. What we think is that many of these solar thermal plant developers will default and never build these plants given that they won’t show any profits. Reliance Power has not gone ahead with its 4000 MW ultra mega thermal power project in AP because the rise in coal costs has meant that they company can only sell power at a loss. Some of these solar plant developers would have come to the same conclusion given the high costs of solar thermal technology. Note solar panel farms have been mostly built on time, thanks to the collapse in solar module prices which led even the low ball bidders to escape losses.

Solar Thermal Plants under JNNSM

  1. Lanco Solar  100 MW  Rajasthan
  2. Reliance Power 100 MW Rajasthan
  3. KSK Energy 100 MW Rajasthan
  4. Godavari Power 50 MW Rajasthan
  5. Aurum Renewables 20 MW Gujarat
  6. Corporate Ispat  50 MW Rajasthan
  7. Megha Engineering 50 MW Andhra Pradesh

JNNSM Solar Thermal Plants saw huge discounts to base price

India’s ambitious JNNSM Plan to build 20 GW of Solar Capacity by 2022 has seen projects being awarded for 479 MW of Solar Thermal Projects under Phase-1. The Solar Project Bidding was expected to be extremely competitive and it turned out to be exactly that with discounts of  more than 30% being offered to the base price of RS 15.31 for Solar Thermal generated Electricity. Note Rs 15.31 was determined to be a decent price on which a Solar Thermal Plant Developer could get decent returns just a year ago. This means that a 30% Discount would lead to zero or very low returns for the Solar Thermal Winners. According to news reports there are 7 winners for these Solar Thermal Plants 6 of which will come up in Rajasthan which seems to be the biggest winner of these Solar Subsidy Scheme. Andhra Pradesh is the only other state to win a Solar Thermal Project. There were about 60 applicants for the Solar Thermal Part of the Phase 1 JNNSM Bidding from which 7 have been selected.

Solar Thermal Technology under Siege

Solar thermal technology received a huge blow when the biggest global green company Siemens abandoned solar energy altogether taking a massive loss on its $400 million acquisitions. Areva also announced that it will not build a 250 CSP plant in Australia as it did not get financing. Note 2-3 solar thermal plants in USA have already been converted into solar panel farms.

India reduces Solar Panel Plant prices by 20% to $1.5/watt and Solar Thermal Plants’ by 10% to $2.2/watt

4 Dec, 2012 by
India,Solar Energy

Solar Plant Price Reduction in India

The rapid decrease in solar panel prices has led to a sharp decrease in overall solar system prices, with the India’s central electricity regulator reducing the reference prices for a solar PV plant to $1.5/watt during 2013; a sharp cut of 20% from the previous year. Note solar panels can be bought at 65-70c/watt from wholesale sources in China which is a massive decline from the $4/watt solar panel ASP in 2008. Chinese solar panel producers have managed to sharply cut processing costs despite falling revenues and margins. The cheapest solar panel maker Jinko Solar recently announced that it can produce a normal multicrystalline solar panel from polysilicon at just 48c/watt. This is a stunning fall from the 65-70c/watt processing cost in 2012.

India has also reduced the reference price for a solar farm built with solar thermal technology to $2.2/watt a decline of 10%. I am not completely sure from where this reference price has been taken since solar thermal plant costs considerably more than the Rs 12 crore per MW fixed by CERC. However these prices are important as most states which are strongly pushing for solar power through subsidies will use this reference price for giving incentives and signing PPAs with solar developers.

The Indian governments should basically stop giving subsidies to solar thermal power plants given that the technology is getting obsolete in the face of competition from solar crystalline panels technology. Large solar thermal companies have stopped investing in the technology (Siemens, Solar Millenium) while a number of solar thermal plants in California have converted themselves into solar panel farms.

Solar Thermal Energy has been losing out in the last couple of years to solar photovoltaic energy which is seeing a huge increase in demand amidst very low prices. Some of the major solar thermal energy projects in the globe have been converted into solar PV installations due to its lower costs. Some of the major solar thermal energy companies like Solar Millennium have sold their solar thermal portfolios to other companies while Stirling Power Systems has gone bankrupt. Tessera has sold its solar thermal plants which had gotten DOE Loan Guarantees in California to Solar Developers who have made these solar thermal plants into solar panel ones.

Disadvantages of Solar Thermal Energy

1) High Costs – Solar Thermal Energy costs at least Euro 3.5/watt and has not declined too much in the last 3-4 years. However these costs are too high as Solar PV already costs Euro 2.5/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) 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.

3) 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 Sea Water 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.

4) 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.

5) Limited Locations and Size Limitations – Solar Thermal  Energy can only be built in places which have the high amount of solar radiation. They can be built in deserts mostly and require a large land area. This means its not possible to build them in populated areas. Solar Thermal Energy also can only be built in large sizes which are at least 50 MW in size to be economical. This contrasts to Solar PV which is sold in sizes as low as 5 Watts.

6) Long Gestation Time Leading to Cost Overruns – The Gestation Time for permitting,financing,drilling etc. can easily take 5-7 years to develop a concentrated solar thermal power plant. Compare this to 6 months for a small wind farm or 3 months for a Solar PV plant.

7)  Financing is the biggest problem in developing projects particularly for small solar thermal developers in this industry.

Most Indian planned Solar Thermal Plants under JNNSM might not get built

29 Nov, 2012 by
Concentrated Solar Thermal,India,Solar Energy

We have repeatedly highlighted the drawbacks of solar thermal energy vis a vis crystalline solar panel technology. Solar Thermal Plants are getting replaced or mothballed altogether because of the high costs and long build times. India had awarded nearly 500 MW to 5 solar energy developers under JNNSM Phase 1 which were supposed to get built by Feb to May 2013. However only 2 of those plants are under construction while others are delayed ostensibly because of lack of heat transfer liquid availability. What we think is that many of these solar thermal plant developers will default and never build these plants given that they won’t show any profits. Reliance Power has not gone ahead with its 4000 MW ultra mega thermal power project in AP because the rise in coal costs has meant that they company can only sell power at a loss. Some of these solar plant developers would have come to the same conclusion given the high costs of solar thermal technology. Note solar panel farms have been mostly built on time, thanks to the collapse in solar module prices which led even the low ball bidders to escape losses.

Solar Thermal Plants under JNNSM

  1. Lanco Solar  100 MW  Rajasthan
  2. Reliance Power 100 MW Rajasthan
  3. KSK Energy 100 MW Rajasthan
  4. Godavari Power 50 MW Rajasthan
  5. Aurum Renewables 20 MW Gujarat
  6. Corporate Ispat  50 MW Rajasthan
  7. Megha Engineering 50 MW Andhra Pradesh

JNNSM Solar Thermal Plants saw huge discounts to base price

India’s ambitious JNNSM Plan to build 20 GW of Solar Capacity by 2022 has seen projects being awarded for 479 MW of Solar Thermal Projects under Phase-1. The Solar Project Bidding was expected to be extremely competitive and it turned out to be exactly that with discounts of  more than 30% being offered to the base price of RS 15.31 for Solar Thermal generated Electricity. Note Rs 15.31 was determined to be a decent price on which a Solar Thermal Plant Developer could get decent returns just a year ago. This means that a 30% Discount would lead to zero or very low returns for the Solar Thermal Winners. According to news reports there are 7 winners for these Solar Thermal Plants 6 of which will come up in Rajasthan which seems to be the biggest winner of these Solar Subsidy Scheme. Andhra Pradesh is the only other state to win a Solar Thermal Project. There were about 60 applicants for the Solar Thermal Part of the Phase 1 JNNSM Bidding from which 7 have been selected.

Solar Thermal Technology under Siege

Solar thermal technology received a huge blow when the biggest global green company Siemens abandoned solar energy altogether taking a massive loss on its $400 million acquisitions. Areva also announced that it will not build a 250 CSP plant in Australia as it did not get financing. Note 2-3 solar thermal plants in USA have already been converted into solar panel farms.

Bloomberg

Of the 500 megawatts of projects due to be completed in February and May, only a third of that capacity may be ready on time, said Tarun Kapoor, joint secretary at the Ministry of New and Renewable Energy. Three of the 10 ventures are unlikely to be built, he said in an interview in New Delhi. Aurum Renewable, which was considering turbines from GE, Siemens and Sumitomo Heavy Industries Ltd. (6302)’s Shin Nippon Machinery Co. for its 20-megawatt project, didn’t respond to e- mails and phone calls seeking comment. Lanco didn’t respond to requests for confirmation of a delay to its 100-megawatt plant. The company is also the contractor for KVK Energy & Infrastructure Pvt.’s 100-megawatt project.

 

Page 2 of 102
← 1 2 3 4 5 6 →
...
Last

Most Popular

Recent Comments