Thursday, August 16, 2012

Thursday, August 16, 2012 - The Solar Power Update

The Solar Power Update
- by Sinclair Noe

DOW + 85 = 13,250
SPX + 9 = 1415
NAS + 31 = 3062
10 YR YLD +.03 = 1.84
OIL +.92 = 95.25
GOLD + 11.60 = 1615.70
SILV +.39 = 28.32
PLAT + 42.00 = 1445.00

Last Sunday morning a caller to the radio show asked about solar projects in the desert. Let me tell you a little of what I've found out.

Solar power in California has been growing rapidly, because of a Renewable Portfolio Standard which requires that 20% of California's electricity come from renewable resources by 2010, and 33% by 2020. Much of this is expected to come from solar power.

At the end of 2010, California had 1,386 MW of solar and 3,177 MW of wind farms. According to a recent report by the California Public Utilities Commission, California failed to meet the 20% renewables by 2010 target. Pacific Gas & Electric and Southern California Edison were the closest to meeting the goal. PG&E generated 17.7% of the electricity it sold in 2010 from renewable sources while SCE was the closest to hitting the goal by producing 19.4% of its electricity from renewable sources in 2010. San Diego Gas & Electric, on the other hand, generated only 11.9% of its electricity from renewable sources in 2010

The California Solar Initiative is a 2006 initiative to install 3,000 MW of additional solar power by 2016. Included in it is the million solar roof initiative. In 2011, this goal was expanded to 12,000 MW by 2020. We're nowhere near the target.  
The last numbers I've seen and they are probably a little out of date show California has a cumulative total of 441 MW of distributed solar PV systems, the highest in the country, but still far short. In other words, solar is a growth industry. 

In 2012, the Bureau of Land Management is giving priority status to 5 solar project proposals in California. The 750 MW McCoy Solar Project has been proposed by NextEra. The 100 MW Desert Harvest project has been proposed by enXco. The 664 MW Calico Solar Energy Project has been redesigned by K Power. The 600 MW Mount Signal Solar Farm #1 has also been proposed.

The Ivanpah Solar Electric Generating System, is a solar thermal power project currently under construction in the California Mojave Desert, 40 miles southwest of Las Vegas. The project will occupy about 4,000 acres (16 km2) near Interstate 15 near the California–Nevada border. With a planned capacity of 392 megawatts; it will deploy 170,000 heliostat mirrors focusing solar energy on boilers located on centralized solar power towers. It is believed to be the largest solar thermal project in the world.

The project will cost $2.2 billion and the largest investor in the project is NRG Energy, out of New Jersey, that has put in $300 million. Google has invested approximately $168 million. The project has received a $1.375 billion loan guarantee from the United States Department of Energy.

 NRG Energy, Google, BrightSource Energy and construction partner Bechtel announced that the Ivanpah Solar Electric Generating System  has reached the halfway mark. Ivanpah has also reached its peak construction workforce, with more than 2,100 construction workers and project support staff on-site. The project is on-track to be completed in 2013.

The Desert Sunlight Solar Farm is a 550 MW solar power plant under construction in Riverside County, California, that will use thin-film solar photovoltaic modules made by First Solar. The Topaz Solar Farm is a 550 MW photovoltaic power plant, being built in San Luis Obispo County. The Blythe Solar Power Project is a 500 MW photovoltaic power station under construction in Riverside County.  The California Valley Solar Ranch (CVSR) is a 250 megawatt solar photovoltaic power plant, which is being built by SunPower, northeast of California Valley in San Luis Obispo.

So, let's do some back of the envelope calculations. We're looking at a few projects that should produce about 3,300 megawatts; based upon the Ivanpah project, which is 392 megawatts at a cost of $2.2 billion, you are probably looking at about $18 billion in solar related projects. 

While there has been extensive coverage regarding the failure of the solar company, Solyndra, there has been almost no coverage of the projects that are moving forward or that have been steadily producing. If you only heard the Solyndra story, you might think solar is a failure. It is not; it is a phenomenal success story.  The Obama administration has just this summer put the finishing touches on a plan to fast track solar deals on public lands;specifically, 17 sites in six southwestern states.

It all falls under a plan to give greater access to energy developers who want to explore federal lands. Green energy projects are now the highest priority, all in keeping with President Obama’s campaign pledges. This doesn't mean the Big Oil lobby is dead; the administration has also awarded leases to oil and gas producers both offshore and on land, and domestic oil production has jumped in the past 4 years. 

Specifically, the Departments of Interior and Energy have issued their final environmental impact statement for solar development in the states of Arizona, California, Colorado, Nevada, New Mexico and Utah. The Interior Department says that it has subsequently approved 17 utility-scale solar energy projects that when built will produce nearly 5,900 megawatts of energy. For context: 285,000 acres of public lands will be open to such construction, which has the potential to produce nearly 24,000 megawatts of electricity. California, which has the renewable energy mandate, is at the center of the policy. Altogether, 70,000 megawatts of new generation have been proposed there. 

For now, solar is a nascent industry. By the end of 2011, Arizona had installed 383 MW of photovoltaics, in third place, behind New Jersey, and California. The Solana Generating Station, located near Gila Bend is a proposed 280 MW parabolic trough solar plant, and is expected to be operating in 2012.  When finished the plant will provide 5% of the power from Arizona Public Service, the state's largest utility.

What's the future of solar?

Fossil fuels are running out, or at the very least becoming increasingly more expensive to extract. Carbon dioxide is building up. What to do? German engineers are building the biggest solar energy project ever in the Sahara Desert, where there’s lots of sunshine. And lots of room. More than three-and-a-half-million square miles. That’s as big as the continental United States. A solar array big enough to supply the whole world with electric power could fit into 35,000 square miles. One percent of the Sahara. About the size of the state of Maine.

Maybe the coolest thing about the planned project is that most of the technology has been around for years and we know it works.  If we think about the idea of Moore's Law, the number of transistors on an IC board doubles every two years, or computing power doubles every 2 years. Don't expect that kind of technological advancement in solar, but even if the efficiency doubled every 4 or 5 years, it would be spectacular. Right now, these big projects in the desert are expensive, but the technology has already improved to the point where the payback is fairly quick and cost-efficient. The more we invest in solar, the more efficient and cost effective it will become.

I'm sick and tired of the apologists that say solar isn't ready to meet our national energy needs. Guess what, nothing is ready for that. It will be a mix of technologies for many years to come. Coal may seem cheap but it isn't; the environmental costs are enormous. Nuclear has problems, just look at Chernobyl, Fukushima, Three Mile Island, and more recently the problems at San Onofre. Natural gas, is just another fossil fuel, slightly cleaner, but fracking might destroy the aquifers. Ethanol has been another innovation, but it is difficult to justify putting food in your gas tank when people are going hungry. Even if you don't believe in climate change, clean energy production makes sense. If you believe in climate change, then clean energy production is crucial.

One certainty is that energy technology of 100 years ago is not going to be the answer for our energy needs over the next 100 years. Another certainty is that the energy industry will be one of the most important parts of business in the years ahead. And I bet you, that there is some shade tree mechanic, some modern day Edison, who will change the world.  Some day, I'll tell you that story.

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