Solar Thermal Technology is facing an existential threat as plunging solar panel prices have made other solar technologies fight for their future. Many Solar Thermal Companies have closed down in 2011 and many of the CSP Power Plants have now been converted in to PV panel projects. This is because the costs of building a solar panel power plant is less than half that of a solar thermal plant. You can read the advantages and disadvantages of solar thermal technology below.

However Solar Thermal Technology is finding a niche in Hybrid Fossil Fuel Power Plants . The reason that Solar Thermal is gaining traction in Solar Hybrid Plants is

1) They can use the existing Electricity and Transmission Infrastructure of the new Fossil Fuel Plant or the Existing One

2) Solar Thermal Technology in most cases generate Steam which can be used by the Turbines of the Fossil Fuel Plant saving additional costs

3) They help in Utilties meet the RPS standard or generate Green Certificates which generates additional money

4) Helps in Backing the Green Credentials of the Owner

5) Hybrid Plants also don’t have to face the problems of Intermittency as the Gas or Coal Plant can generate Electricity at any Time.

Advantages of Solar Thermal Energy

  • No Fuel Cost – Solar Thermal Energy does not require any fuel like most other sources of renewable energy.This is a huge advantage over other fossil fuels whose costs are increasing at a drastic  rate every year.Electricity prices are increasingly rapidly in most parts of  the world much faster than general inflation.Price shocks due to high fuel costs are a big risk with fossil fuel energy these days
  • Predictable,24/7 Power -Solar Thermal Energy can generate power 24 hours a day.This is made possible as solar thermal power plants store the energy in the form of molten salts etc.Other forms of Renewable Energy like Solar PV and Wind Energy are intermittent in nature.The electricity supply is much more uniform and reliable.
  •  No Pollution and Global Warming Effects – Solar Thermal Energy does not cause pollution which is one of the biggest advantages .Note there are costs associated with the equipment used to build and transport Solar Thermal Energy Equipment
  • Using Existing Industrial Base – Solar Thermal Energy uses equipment like solar thermal mirrors and turbines which is made in large scale at low cost by the existing Industrial Base and requires no major changes in equipment and materials unlike new technologies such as CIGs Panels.

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 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

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.

Solar Thermal Energy

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.

Advantages of Solar Thermal Energy

1) No Fuel Cost – Solar Thermal Energy does not require any fuel like most other sources of renewable energy. This is a huge advantage over other fossil fuels whose costs are increasing at a drastic  rate every year. Electricity prices are increasingly rapidly in most parts of  the world much faster than general inflation. Price shocks due to high fuel costs are a big risk with fossil fuel energy these days.

2) Predictable, 24/7 Power -Solar Thermal Energy can generate power 24 hours a day. This is made possible as solar thermal power plants store the energy in the form of molten salts etc. Other forms of Renewable Energy like Solar PV and Wind Energy are intermittent in nature. The electricity supply is much more uniform and reliable.

3) No Pollution and Global Warming Effects – Solar Thermal Energy does not cause pollution which is one of the biggest advantages. Note there are costs associated with the equipment used to build and transport Solar Thermal Energy Equipment.

4) Using Existing Industrial Base – Solar Thermal Energy uses equipment like solar thermal mirrors and turbines which is made in large scale at low cost by the existing Industrial Base and requires no major changes in equipment and materials unlike new technologies such as CIGs Panels.

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.

Read about the Advantages and Disadvantages of Natural Gas, Nuclear Energy and Coal

What is a Solar Power Plant

Solar Power Plant isSolar Power Plants a Device which generates power or electricity using Solar Energy.Note normally solar power plants refers to large ground mounted solar farms rather than the residential solar rooftop projects.However it is only a matter of usage and a solar power plant can refer to a very small solar panel of 5 watts as well as a huge solar plant of hundreds of megawatts consisting of hundreds of thousands of solar panels.

 

Types of Solar Power Plants

Note there are a number of solar energy technologies which convert the power from the sun to electricity.However the two main solar technologies in use are Solar Thermal Technology and Solar Photovoltaic Technology.Current Solar PV Technology accounts of the lion’s share of solar power generated globally and is gaining more marketshare as costs of solar power decrease.

1) Solar Thermal Power Plants

2) Solar PV Power Plants

Solar Power Plants in India

Solar Power Plants in India have increased tremendously in 2011 as solar power plants under the Indian federal government JNNSM subsidy scheme get completed under Phase 1.While the success of India’s subsidy scheme was in doubt due to irrational bidding during the auction,the sharp decrease in the price of PV solar panels has made the project winners quite lucky.Solar Thermal Projects by big firms like Reliance Power and Lanco also have managed to get debt closure and should also get finished.While I am not in favor of the Indian government’s support for large solar farms over rooftop solar projects,it is helping in putting Indian prominently in the global solar map.The Second Phase is supposed to ameliorate these problems but the first plans do not seem to be too great.The support for large solar farms will be increased from the current 5 MW cap to 20-25 MW cap.This will lead to only large investors,utilities and companies being left in the fray and lead to lesser competition.

Read about the Largest Solar Power Plants in the World

Cost of Setting up a Power Plant in India

The biggest advantage of solar energy are declining costs particularly for polycrystalline solar panels which has made the costs of building a solar power  plant come down by 50% in the last 2-3 years.The costs of setting up solar thermal plants are higher and the costs have not come down as  much which is making solar developers of CSP plants convert them into PV power plants.The costs of a solar power plants also depends on what kind of solar panel technology you are using,for example it typically costs less for thin film solar plant and if you use solar trackers it costs more.The main thing that you should consider is the lifetime cost which is to divide the total cost of solar power plant divided by the energy generated over the lifetime of the plant.

  1. The capital cost of a large solar power plant using solar panels costs about $3/watt
  2. The capital cost of a large solar thermal power plant using parabolic troughts/power towers will  cost around $5-6/watt

Annexure

You can read the complete list of solar energy projects in India (note this is a ever changing list)

 Solar Thermal Power Plants to be constructed 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

Solar PV Power Plants under JNNSM ( 5 MW)

1 Camelot Enterprises Pvt. Ltd. Maharashtra
2 Khaya Solar Projects Nagore Rajasthan
3 DDE Renewable Energy Nagore Rajasthan
4 Electro Maritech Pvt Ltd Nagore Rajasthan
5 Vasavi Solar Power Nagore Rajasthan
6 Fine Hope Allied Energy Rajasthan
7 Karnataka Power Corpn. Ltd Karnataka
8 Newton Solar Pvt. Ltd Nagore Rajasthan
9 Green Tech Power Pvt. Ltd. Jodhpur Rajasthan
10 Saidham Overseas Pvt. Ltd Nagore Rajasthan
11 Mahindra Solar One Pvt. Ltd Jodhpur Rajasthan
12 Azure Power (Rajasthan) P.Ltd. Nagore Rajasthan
13 Rithwik Projects Pvt. Ltd, Anantapur AP
14 Sai Sudhir Energy Anantapur AP
15 Maharashtra Seamless Ltd Jaisalmer Rajasthan
16 Viraj Renewable Energy Jodhpur Rajasthan
17 Northwest Energy Nagore Rajasthan
18 Sun Edisson Energy P.Ltd Bikaner Rajasthan
19 Electrical Manufacturing Co.Ltd Allahabad UP
20 Alex Spectrum Radiations P.Ltd Bikaner Rajasthan
21 Indian Oil Corpn. Ltd. Barmer Rajasthan
22 Coastal Projects Ltd Chitradurg Karnataka
23 Welspun Solar AP Anantapur AP
24 CCCL Infrastructures Ltd Tuticorin TamilNadu
25 Alex Solar Pvt. Ltd. Orissa
26 Punj Lloyd Jodhpur Rajasthan
27 Bhaskar Green Power P.Ltd Jaisalmer Rajasthan
28 Oswal Woollen Mills Jodhpur Rajasthan
29 Amrit Animation P.Ltd Jaisalmer Rajasthan
30 Precision Technik P.Ltd Jaisalmer Rajasthan

Offshore Wind Energy is supposed to increase from around  3 GW today to 75 GW by 2020 as countries in Europe,Asia and North America heavily support this industry.Onshore wind energy growth on the other hand is expected to  slow down as 38 GW of Wind Capacity were installed in 2010 with Western Markets showing a sharp slowdown.Note every industry sees costs declining with large capacity except the mature industries.For example Wind Energy has seen a 10% decline in costs for every 100% increase in installed capacity.Note offshore wind projects offer even more Wind Energy Advantages than normal Land Based Wind Farms.The only problem facing offshore wind power is high costs  as the industry still is on the learning curve.PWC has come up with a survey where most of the participants say that it will take 10-15 years for offshore wind energy to reach grid parity.What this means is that Offshore Wind Energy Companies will continue to depend on government subsidies like higher electricity prices,tax breaks,low interest loans to survive.

Total Costs of a Offshore Wind Park

The cost of an offshore wind park can range between $4.5-5.5 per MW which is much higher than land based wind at around $2 million per MW.However the load factors for offshore wind are higher so they compensate somewhat for the higher capital and operating costs for offshore wind energy.Note the PPAs being signed for offshore wind range fro 20-25c/Kwh which is much higher than the 8-10c/Kwh given for onshore wind energy

What the Survey Showed

The average construction cost per megawatt varied among questioned European offshore wind power developers, with 38 percent of survey respondents saying their average cost came to less than $3 million, while 31 percent quoted $4-5 million.But most building contractors and manufacturers of wind farm components asked in the survey expected the cost for construction and turbines to drop in the next five years, making it cheaper to instal new wind farms.

Solar Energy Dropping by almost 10% Every Year compared to Offshore Wind

Solar Energy is the fastest growing renewable energy source because its cost are declining at a rapid pace.Solar Thermal Energy is getting left behind Solar PV with a number of CSP Plants being abandoned and converted to Solar PV Farms.Note Offshore Wind too might get affected if Solar PV costs continue to decline as rapidly as they are doing right now.While Offshore Wind is being heavily supported by European countries,its a matter of time before Solar PV starts making inroads into this Green Energy source as  well.Note Europe with 80% of the world’s offshore wind farms is also home to 80% of the world’s solar energy capacity as well.

Solar Thermal Power will also take almost 10 years to Reach Grid Parity

Abengoa which is a leader amongst Solar Thermal Companies thinks that Solar Thermal Power won’t reach Grid Parity till 2020 and may even take a further 10 years to achieve parity with the fossil fuel  energy sources costs.This makes you wonder if CSP is a technology worth investing in since  Photovoltaic Technology has already reached grid parity in some parts of the world and should reach parity in most parts by 2015.PV Technology has seen a rapid advance in technology and cost cutting over the past few years making the installation cost come down to $3.5-4/watt compared to $6-7/watt for CSP Technology

Offshore wind can shed subsidy in 10-15 years: study

Offshore wind power technology will become economic without state subsidies in 10-15 years’ time, most government bodies said in a survey published on Thursday by consultancy PwC.Nearly half of the government bodies interviewed said they expected offshore wind to survive without subsidies within 10-15 years, while 17 percent of respondents counted on less than 10 years and an equal share thought 15-20 years were needed.

Eighty percent of those who forecast a decrease said costs could drop 10-20 percent.”Nearly all of the developers we surveyed said supply chain capacity constraints are a significant problem for offshore wind construction to such an extent that 82 percent said they create the risk of a seller’s market,” PwC found in its poll.

Areva the French Nuclear Giant which is known more for producing equipment for nuclear power plants is been awarded federal funding by the Australian Government to build a solar coal hybrid plant in Queensland.The 44 MW Concentrated Solar Power (CSP) Plant will be built near a 750 Thermal Power Station.This will be the second solar coal hybrid plant in the world when its gets finished in 2013.Note Areva has huge plans in the Solar Thermal Technology Industry after buying startup Ausra sometimes ago.The company which is an expert in power plant equipment technology such as boilers,turbines will use its expertise to build a CSP plant adding to the power output of the Kogan Creek Thermal Station.Note the cost mentioned implies around $2.4/watt which does not seem expensive.The CSP Coal Hybrid will not require storage which will help in reducing the costs of the power plant.Note a number of Fossil Fuel Solar Hybrid Plants are being planned around the world.Almost all of these power plants use CSP Technology instead of the PV Technology.Its a valuable niche for Solar Thermal Companies to explore as they face huge competition from Solar PV which is drastically reducing its costs to reach retail electricity price equality.

Areva looking at Tripe Renewable Energy Plan in Biomass,Solar CSP and Nuclear Energy

Areva alos plans 1000 MW of Solar Thermal Capacity in India with an investment of $3 Billion partnering with Indian financial institutions.The Company is awaiting the award of projects under JNNSM which has a huge capacity earmarked for Solar Thermal Projects.The Company also plans to set up a Solar EPC subsidiary to construct turnkey plants for other companies.India could be the biggest growth market for Areva with its recent opening of the nuclear sector.Areva already has a 60 MW biomass capacity in India which is also set to set sharp growth.Areva hopes to gain from growth in all the 3 sectors of Nuclear,Solar and Biomass Energy  .

AREVA was awarded a major contract to install a solar thermal addition to CS Energy’s coal-fired Kogan Creek power station in Queensland, Australia. This solar boost project, supported by the Australian and Queensland Governments, will be the world’s largest solar integration with a coal-fired power station.Construction of the AU$ 104.7 million (around €76 million) solar addition is scheduled to begin in the second quarter of 2011, with commercial operation planned for 2013.Adding solar energy to the Kogan Creek power station will increase its output by up to 44 megawatts in peak solar conditions to the current 750 megawatts and will avoid the production of 35,600 tonnes of greenhouse gas emissions annually.

Brightsource Energy,the Solar Thermal Startup has been making huge progress getting high profile investors and managing a $1.37 billion DOE grant for its Ivanpah 392 MW Solar Thermal Power Plant.The Company has managed to get its billion dollar Ivanpah Project financed through equity investments from NRG Energy and Google.It is now looking set to do an IPO which  would allow its Stock to List and gain further funds for expansion in USA,China and India.Note I don’t think Solar Thermal Technology is managing to compete effectively with the fast declining costs of Solar Photovoltaic Technology.However there still exists a niche area for Solar Thermal Companies and Technology.Note there are a number of Solar Thermal Companies fighting for the No.1 Position which includes giants like Siemens,Areva,Abengoa and startups like eSolar.Which one of these companies will be succesful in the face of the Solar PV Onslaught is a matter of debate.However Brightsource has certainly stole a march through smart funding.Here is what you want to know about  Brightsource Energy

Brightsource Energy Technology

BrightSource Energy’s proprietary LPT 550 energy system uses heliostats (mirrors) to focus Solar Energy to a Power Tower.The Heat in the Power Tower is converted to Steam which powers Steam Turbines just like a conventional Thermal Power Plant.Thousands of Heliostats are controlled by Computers and they Track the Movement of the Sun throughout the Day to maximize the Power Output.Note most of the top Management of Brightsource is drawn from the Luz Industris which built the massive 354 MW SEGs Solar Thermal Plant in Los Angeles in the 1980s and which is still the largest Solar Thermal Power Plant in the world.LUZ II was founded by Mr. Arnold Goldman, who was also the founder of the original Luz.In December 2008, Luz II changed its name to BrightSource Industries (Israel), Ltd. (BSII)

Brightsource has no commercial CSP Plant working till now though it has a pilot plant called Solar Energy Development Center (SEDC) in Israel with 4 MW capacity.

Brightsource Energy Investors

BrightSource Energy has raised more than $300 million in financing from top companies worldwide.Here is a list of those companies.

  1. BP
  2. Alstom
  3. Google
  4. Statoil
  5. Chevron.

The company has also got PE and VC investors like Draper Fisher,Vantage Point,Calstrs,Blackriver and DBL

Ivanpah Solar Thermal Plant

The 392 MW Ivanpah Solar Electric Generating System (ISEGS) is being built in  California’s Mojave Desert.The Concentrating Solar Power (CSP) Project is being builtapproximately 50 miles northwest of Needles, California (about five miles from the California-Nevada border) on federal land managed by the Bureau of Land Management.The complex is comprised of three separate plants to be built in phases between 2010 and 2013, and will use BrightSource Energy’s LPT 550 technology.

a) NRG Solar, a wholly owned subsidiary of NRG Energy, will be making an investment of up to $300 million over the next three years, joining BrightSource in the construction, ownership, and operation of Ivanpah.

Initial Public Offering (IPO) Plans

In 2010, BrightSource hired Morgan Stanley and Goldman Sachs to begin preparations for a public offering that is likely to happen in 2011. Its fourth round of equity financing in May netted $150 million, bringing total equity financing to $330 million to date.There has been no official word about the IPO or when the stock listing might happen.However the support of Google and NextEra plus the DOE Loan Guarantee should really push forward the date of a Brightsource IPO.

List of BrightSource Competitors

Solar Millennium – The company is one of the most aggressive players in the Solar Thermal Energy Sector.The company is in the process of building CSP plants in Africa,Europe,India and USA.This German company has won several project approvals to build CSP plants in Califronia through its JV Solar Trust with Ferrostaal Inc.The company has running plants at Andasol in Spain.In 2009, Solar Millennium entered into a joint venture with Suryachakra Power Venture for joint development of solar power projects in India.The company uses parabolic tough technology and is able to provide a turnkey solution from Technology to Design to EPC.

Abengoa – Abengoa is one of the most well known suppliers of Solar Thermal Equipment in the world and is a proven developer of large scale Solar Plants in Spain and USA.This Spanish giant has signed a JV with India’s largest capital equipment company BHEL to manufacture components for Solar Thermal Plants..t has managed to win a large DOE grant for constructing another large Solar Thermal Plant in the USA.It has also signed a JV with Abu Dhabi promoted Masdar to build a 100 MW Shams 1 plant near Madinet Zayed in UAE

Areva – Another Giant Global Electrical Equipment Conglomerate which entered the Solar Thermal Energy area by acquiring a struggling CSP startup Ausra.The company is planning like the others to make a major investment of around $3 billion to build 1000 MW capacity in India.The company is the biggest nuclear equipment supplier in the world and has interests in biomass energy as well.

Siemens – The world’s largest green company is quite weak in the Solar Energy area.Like other conglomerates and competitor Areva,it acquired Israeli CSP company Solel Energy to make its foray into the Solar Thermal Energy sector.The company is looking to expand in India where the JNNSM has given equal importance to Solar Thermal Technology.

Acciona – Acciona the Spanish Renewable Energy Giant is one the most experienced  in the Solar Thermal Category.The company has not been aggressively expanding in the CSP category lately.It recently backed out of bidding for the Solar Flagships program in Australia.The company built one of the large solar thermal plants in the US named Nevada Solar One in the 1980s.

eSolar – eSolar is one of the most exciting startups in the US Solar Technology.The company uses a unique Concentrating Solar Power (CSP) Technology which utilizes small, flat mirrors which track the sun with high precision and reflect the sun’s heat to a tower-mounted receiver, which boils water to create steam. This steam powers a traditional turbine and generator to produce solar electricity.The comany has won contracts to build its CSP plants in USA,Greece and China.

SolarReserve is a US company which uses  integrated molten salt thermal energy storage technology in conjunction with solar power towers licensed from United Technologies Corporation (UTC).The company has got approvals to build CSP plants in Arizona and California.The company has tied up with Chinese solar wafer giant GCL to build solar projects across the USA and holds 1100 MW of projects in development.