Interview with Tom Georgis, Senior Vice President of SolarReserve

Interview with Tom Georgis, Senior Vice President of SolarReserve

On 8th Sep, 2015, at the 63th floor of Park Hyatt, Beijing. As the hotel’s world top fine positioning, America-based SolarReserve is committed to globalizing the industry pioneer’s world-class molten salt storage tower CSP technology to mass commercialization.

Shrouded by haze, that environment seemed “relatively appropriate” to talk about Solar Thermal Power Generation. With the multidimensional topics such as  SolarReserve’s market strategies, CSP market in China…etc, journalist at CSPPLAZAinterviewed Mr. Tom Georgis, Senior Vice President of SolarReserve. Mr. Tom sincerely expressed his ideas on these questions. So here we composed this interview report.

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photo: Mr. Tom Georgis, Senior Vice President of SolarReserve

Commissioning Testing of Crescent Dunes is near the end. Coming into service the following October

CSPPLAZA: Crescent Dunes was completed in Oct 2014, and the commissioning testing has lasted for 1.5 years. CSP industry is much concerned about the project, and look forward to its early commercial operation. What contributes to such longer commissioning testing period?

Tom Georgis: Crescent Dunes s a new innovative technology of its kind for the first time, with a pioneering significance. This is also a technical improvement process for us to practice and make breakthroughs. So it takes typically a longer time than the traditional power plant. And there happened some challenges on the construction site, significantly the challenges on the engineering site(Flageg’s bank-up contributed to the delay of mirror procurement) that lead to the delay. But all these have been addressed, this unique molten salt technology has gone very well.

Since solar field commissioning is the first completed part, the power purchasing agreement is still unscheduled. So our contract with NV Energy for the 25-year off-take agreement is still unscheduled.

The steam generating system has been tested(with a steam temperature of about 560℃), and we’re moving into the testing commissioning phase of the steam turbine. Once that completed, we’ll possibly start producing electricity and reach commercial operation. That’s scheduled for next month, October.

CSPPLAZA: Is it also because of the time-consumption solar field commissioning?

Tom Georgis: Commissioning testing of the solar field is not the difficult point. We completed this testing before April.

CSPPLAZA: How do you see the value of Crescent Dune’s longer commissioning testing?

Tom Georgis: Crescent Dunes’s longer commissioning testing period did exceed our expectation, but it’s a valuable process. Molten salt storage CSP is a very particular and innovative technology. Form this process, we gained an abundant experience feedbacks, which we will applied in the late projects in markets like South Africa, Chile and even China.

More importantly we are moving into other markets, we would close financing, and finish constructing the first part of Redstone in South Africa. So all the lessons learned from Crescent Dunes will be transferred over to South Africa. And we just received environmental approval for two towers in Chile.

Crescent Dunes lies the foundation for the latter projects not only from the validation of the technology but also the EPC. And of course we want to build them faster, more cost effectively, and as we build more and more, the price will come down. Cost is very important in any market, we anticipate the cost very competitive here in China, that also one of the reasons why we continue to come to China.

In a word, Crescent Dunes laid a solid foundation for CSP industry.

CSPPLAZA: Where does the most difficult part lie in the project proceeding?

Tom Georgis: The most complex part of the technology is the receiver itself, which is for the heat exchange course of the tower. So we must make sure all the receiver system, the collector system and control system, all the heliostats are calibrated, and the steam generating system is very uniquely customized.

Through the construction and mission process of the second generation, we improved the installing technology, we understood that molten salt storage CSP technology is very reliable, it’s the future of CSP world.

CSPPLAZA: How long will the commissioning period take normally in the later projects?

Tom Georgis: In our schedule we plan 6 months for testing commissioning for later projects, we think it is sufficient for. All the lessons learned from Crescent Dunes will be applied in Redstone in South Africa, to Copiapo in Chile.

CSPPLAZA: What key learning did you get form Crescent Dunes?

Tom Georgis: Probably in the big project, the key is engineering. That means to make sure the engineering is done on time, all the key issues are addressed, the design of correct parameters on the engineering site, which flows from procurement to construction. But for Crescent Dunes, the EPC process was not competitive, because it is a new technology. But in South Africa and Chile projects, there are quite few competitive EPC groups interested in building facilities for us, with cost saving and shorter construction periods. And again we’ll be able to take advantage of all the lessons that were learned from Crescent Dunes.

CSPPLAZA: So this technology is becoming mature, yes?

Tom Georgis: Yes, it is gradually mature, and it is very important for another perspective in terms of financing. So investors or lenders prefer to invest money in the SolarReserve projects with the fact that we are the only company that has proven molten salt tower technology.

With a big cost reduction potential, molten salt tower technology is the final solution

CSPPLAZA: Gemasolar, the world’s first molten salt CSP project, came into operation in May 2011. And Crescent Dunes is the second of that type. How do you see the influence of the 2 plants on CSP industry?

Tom Georgis: Gemasolar is very small, only 19.9MW, similar to Solar Two, which is different from large scale like 100MW. At a practical level, Gemasolar, after Solar Two, once again verified the feasibility of molten salt storage tower CSP technology. But for large-scale power plant, skill is extremely critical. In South Africa, we won a competitive tender for solar thermal with storage. SolarReserve in South Africa was the only to bid successfully, and was ordered the PPA with this technology. So in this way, SolarReserve is the world’s only provider of commercial-scale mature molten salt CSP technology solutions.

CSPPLAZA: Can we say that molten salt tower technology is the final solution for CSP industry?

Tom Georgis: We surely think so, absolutely.

CSPPLAZA: BrightSource claims that Ivanpah plant needs 4 years to reach the designed power generating capacity. How about Crescent Dunes?

Tom Georgis: BrightSource has a different technology, they have direct steam with no storage. So for SolarReserve, we will certainly meet the annual output with sufficient pumped salt. Crescent Dunes is our first commercial scale plant, like any new technology, of course in year one, there may be some issues. So far our testing commissioning and any process are very good, but it is hard to tell a specific transitional period while we are confident to say that we’ll achieve the required output as per the PPA.

CSPPLAZA: Abengoa transformed Palen project from tower to trough, what about the reasons in your opinion?

Tom Georgis: I think there are a couple of issues, one is Ivanpah has problems with birds in California. California has suffered a serious threat of environment, some species are endangered. So for better level of environment, the energy commission and the regulatory body get very concerned about towers, and push that hard on towers in California, and trough will be less contentious. So Ivanpah’s birds burning record prevent Palen from being approved.

After technology change, Palen was approved. I don’t know well about Palen, but relevant news reading indicates that tower project mostly have no place in California.

But we think that’s misguided and it incorrect, because we SolarReserve’s tower project-Rice in California has no issues with birds. So we can preserve tower project with technical solutions, taking development of Crescent Dunes as an example. Before starting Crescent Dunes, we made very deep study on local environment and study of birds and bats, thus to minimize environmental impact. Then we know acquire effective construction and O&M solutions to avoiding such impact. Our another tower project Rice in California has also been approved.

CSPPLAZA: Is it to some extent because of the immaturity of trough technology?

Tom Georgis: Trough is considered very mature and proven. There had been trough plant operating since the 1980′ in California, called Segs. But trough is not as efficient as tower, because trough needs natural gas as auxiliary to ensure the normal operation of the HTF, especially in conditions like western China, a large quantities of auxiliary fuel is required. .Generally speaking, trough is less efficient than tower, as well as its high cost with limited decline space.

Well, Solarreserve don’t require natural gas in Crescent Dunes, no natural gas in South Africa and Chile, also no need of natural gas in China. So I think trough is a mature technology, but it is not the future technology for CSP.

It’s interesting that some companies like Abengoa in Chile for example, is developing trough in Chie. But sice its new trough will not be competitive in Chile, they claimed that they can do a molten salt tower. As a professional media for CSP industry, you CSPPLAZA must know global market very well, so you must be clear that molten salt tower is the future if you do CSP. In a word, tower technology require no auxiliary, it’s convenient for heat storage with a big potential competitive advantage of cost. We are very active in South Africa and Chile. And I believe we will find the right Chinese partners to lead tower molten salt technology development in China.

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photo: 110MW Crescent Dunes CSP project

CSP + heat storage has no fear of PV + power storage

CSPPLAZA: One big advantage of CSP lies in heat storage ability. But PV technology with power storage is rapidly developing, though with a higher cost than CSP storage. Will PV battery storage become a threat to CSP heat storage as its cost gets reduced?

Tom Georgis: Absolutely no necessary to worry about it, PV battery storage will never become a threat to CSP heat storage. There has been much discussion on the topic of PV + storage. Firstly we need to be clear that PV battery storage is used to keep electricity frequency and more smooth to the transmission system during the day, while CSP heat storage to store potential power. So there is no comparison between batteries and molten salt in terms of storage.

Secondly, we can think of the price around batteries, it’s even aggressively 500 dollars per KWh, while with molten salt, we build at 100 dollars today. Of course PV will say that it can for competitiveness. We think the best solution is hybrid PV with CSP, no need of batteries. I think batteries will have a place with PV in DG( distributive generations), but that doesn’t makes sense to utility scale. impossible.

Thirdly, CSP storage heat is quite different from PV storage of chemical energy. Heat storage is very efficient, our molten salt tank with 99.5% heat energy. Chemical batteries have very low efficiency. With the limitation on technology, this one could be regulars. It doesn’t matter what you do, there is certain limitation that will prevent it from reaching certain result. Batteries would have a reasonable amount of energy, so in the future, it cannot compete with heat storage. That’s one big distinction.

Fourthly, we should ask how long battery lasts when we talk about battery. Molten salt will last much longer certainly, we plan for 30 years, while batteries have to be replaced every 10 years.

Besides, environmental cost should be considered. Salt can be used as fertilizer while the products that go into the battery are environmentally impactive. So PV battery is quite distinctive to molten salt storage.

CSPPLAZA: What if the cost of PV storage becomes lower than that of CSP heat storage? Will it be available to be applied in utility scale?

Tom Georgis: Well it is costly today, and I think it impossible in the near future. When talk about PV with battery like it’s said just for transmission security and reliability, not for the ability to shift a tremendous of energy to run overnight, batteries just don’t have that capability. The cost to do 24/7 PV battery is not possible, is not the future

The U.S. CSP market is still hopeful while Chinese market is hugely potential

CSPPLAZA: How do you see the future CSP market of America?

Tom Georgis: We say there is opportunity of CSP in America. Recently we’ve been discussing that we want to reduce gas emissions. We need 24/7 power, and there is requirement now in many directions in the US for storage. Utility commissions, the regulator and the government officials are starting to recognize the value of storage. Because with too much PV and wind, intermittency is becoming a big challenge that has caused problems for the transmission system. Currently the challenge of CSP technology for us SolarReserve is the cost. So we plan to build projects internationally to reduce our cost, and in the next couple of years we will come back into the US market with more cost effective pilot projects. I think that will allow us to secure PPA. We are still very enthusiastic about the US market. But in the near term, there are markets that are much more attractive for us, which are primarily south Africa and Chile. But we still remain very enthusiastic about US market.

CSPPLAZA: Previously, the Obama Administration released the CPP, what is the impact of this release on American CSP development?

Tom Georgis: We think it is very encouraging for CSP, for some of the reason we’ve been discussing. The CPP impacts the coal fire generation the most. Coal-fired power generation is used for base-load power in the US. And our CSP technology with storage can also specifically provide base-load power. I think the impact of CPP is going to be the increasing in renewable energy.

Let’s combination of the following 2 factors: Obviously reducing coal-fired generation while base-load is also required, and the problem caused by intermittency of PV and wind power. So as a result, CSP with storage is a perfect selection forward. We can help integrate PV and wind power by smoothing out their output or balancing their output with no emissions. CSP with storage can run like a coal-fired plant with zero emissions . So we are very encouraged by the CPP. We look forward to taking advantage of that to develop tower project in the US.

CSPPLAZA: Besides the markets in South Africa and Chile, where is SolarReserve going to develop CSP business mainly?

Tom Georgis: Certainly China is the key market for us. We’ve been coming China for 5 years to study the market, talking to strategy partners, talking to the policy makers, talking to governmental officers, the grid operators and regulators. And we think there is tremendous opportunities here in China. And again with emphasis on reducing green house gas emissions, displacing coal-fired generation, increasing renewable, it is perfect market for us. The solar resource in the far east and the west China is very good. We will be interested in a supply chain based in China for domestic and international projects. This is why I spend a lot of time here.

We are certainly very active in Middle East. We are looking at Egypt, Oman, and waiting for the Saudi Arabia’s solar program. They’ve been announcing a massive solar program. We think we are positioned to participate in Saudi Arabia.

And then for Australia, we’ve been spending a long time and have our office at first. We keep focus on the mining sectors, which have a large demand of renewable energy. So there is a big renewable energy demand in Australia. But like China, Australia has very inexpensive coal, which is probably the biggest challenge for us. But considering environmental policy and requirements, there is a lot of opportunities. And of course the mining sectors, not just for Australia, but globally, is a big consumer of continuous power . So we can build base-load solar thermal facility with storage next to a large mines to provide them with7/24 power. And even to very remote locations.

CSPPLAZA: On behalf of SolarReserve, or just in your opinion, how is Chinese CSP market currently?

Tom Georgis: Well we are patiently waiting. We think it the early stage. Certainly a lot of interest. We are still waiting for greater clearness on the CSP tariff, hoping that there will be requirement for storage, because we think just make CSP without storage doesn’t make sense. You have to have storage, or it is just like PV and wind. So hope it will be more clearly around the policy, like that in south Africa, they require CSP with storage, which is important for us. I think new transmission should be built or to understand the transmission planning process a little better, so that good resource sites will be in better collaborating with safety grid in this area.

When it comes to Chinese CSP, everyone always says Qinghai. But it’s so big a province it’s important to select the sites with best solar resources, and make sure the transmission comes to it. As a developer, it’s not just in China but in any country the top 3 issues is transmission. China needs this type of technology, especially the hybrid with wind or PV, which will help promote the whole industry. And partnering with US company, the US technology, establishing a new large manufacturing base in China for Chinese projects and international projects.. PV still have its place. So this is a new market opportunity for the Chinese economy. And it will be a global opportunity. So we are very excited for China.

CSPPLAZA: SolarReserve’s projects in South Africa and Chile are mainly hybrid CSP & PV project, how do you see the technology’s future market in China?

Tom Georgis: Yes, definitely we do. And we think it has a promising future in China. But like the US, in China we still need to make everything, such as complete transmission system and China needs to bring in advanced technology. The challenges with PV and wind is the intermittency and the impact in the transmission system. So with CSP & PV, and CSP & wind located together. We can manage the intermittency problem with combined systems, as well as meet increasing power demand.

China is the leading force of CSP technology in cost cutting

CSPPLAZA: Now do you have any Chinese partners?

Tom Georgis: No. We’ve been coming here for 5 years talking to potential strategy partners about the manufacturing site, but also on the project site to participate in China. China is a special market with huge potential. We hope to be conductive to Chinese market.

CSPPLAZA: What is the role China plays in global CSP industry?

Tom Georgis: According to the current trend, the global demand for electricity is constantly increasing, and there is a large room for clean power growth. For clean power, sustainable supply is the key, which is just the weakness of wind power and PV. So CSP with heat storage is increasingly critical.

Considering that currently, the biggest challenge for CSP technology is cost. I think China can be the dominant force in promoting CSP technology and costs reduction, this is also why we come to China. To reduce the technical cost of CSP project in the global markets need China’s products and equipments with high quality and low cost.

Molten salt tower CSP technology is the best choice. No need of small demonstration projects in China

CSPPLAZA: China has very special climatic conditions, such as high altitude, large day/night temperature gap and high wind. So which type of CSP technology is the best choice for China?

Tom Georgis: We definitely believe in some of the reasons you motioned. The high altitude and temperature is very good for us, because we don’t need any natural gas. We don’t need any natural gas in the infrastructures even at cold in the day, because we have steam turbines that likes colder temperatures with higher efficiency. So that works well for us. A high wind is engineering solution. So we account for high wind. Crescent Dunes is in the high desert, very cold and has high winds, a kind of like China’s Qinghai, but we don’t require any natural gas, which makes it perfect for western China. Unlike some other technologies, primarily trough, as I mentioned that 100m trough is 100m oil. Then you have to keep circulation and warm al at night, because the trough becomes a radiator at night, that just means the oil will turn to solid. So you have to use natural gas. But our molten salt CSP tower don’t need any of that. So tower technology is the best choice for CSP in China.

CSPPLAZA: Molten salt tower project is very popular among some Chinese enterprises, for example, CUPCON and Suncan are constructing such 10MW-grade pilot project, and other companies as well. Some such projects are claimed to be completed and put into operation within 2 years. With your rich experience, is such saying practical?

Tom Georgis: I know these projects but I don’t know the details. You know we had a 10MW project Solar Two back in 1990′, so we commercialized the 110MW Crescent Dunes now, with a expected annual output of 500,000MWh.

I think there will be tremendous work for these companies to do before completing their projects. We built 10MW 20 years ago, and we have run it for 3 years. We finished the 10MW molten salt tower 20 years ago, I want to emphasis it 20 years ago. Today, no one in China has built a 10MW molten salt tower. They are just trying to build, not built. I don’t know when they can complete it, at least today no one complete building one. Today none in China, zero in China. None operating 10MW molten salt in China.

I appreciate the interest in doing pilot projects here in China, this is a commercial technology. We are already on the third generation that others want to deploy. Our technology has arrived commercial application, and we are coming to China at utility scale now.

To do a small 10MW in China to try to approve the technology , I think it’s not necessary. But we fully appreciate that we got competition at some points. There are others that are working the technology, there may be a new version on the technology. So we don’t want the perception in China is new now, I mean by the time we build our first project in China with our partner, it will be project No. 4 or 5gereration of the skill in the world when it comes to China (Solar Two is our first generation, and Crescent the second).

To focus on smaller pilot projects, it’s OK, but you have to know what’s happening globally, for example what’s happening in Morocco, in South Africa, in the US and Chile. And in this way China will benefit from that, because you don’t have to go through all of the trying and pilot projects. We get a brain that commercial ready to the technology to china as soon as we found partners and projects, and more importantly, the tariff of the policy to be more clearly.

We have spent 100 million dollars in developing and proving this technology, so it’s not easy. As I said, I appreciate their trying, but it’s not easy, it’s very difficult. This is a problem in the industry. There have people claiming they can do things promoting a certain technology and other technology that are not performing. And then it creates a problem for the industry for CSP, because then people say that CSP won’t work. And that happens with Brightsource in the US. It was some news that asks questions why their project are underperformed. Of course there are reasons for that, but no one listens to that. Everyone just hear that it is underperformed, so CSP doesn’t work. We don’t want that happens in China. The key is that China has the ability to create this industry. It can be done by bringing in the best international technologies into China in creating a supply chain in China for Chinese projects but also for international projects. And again, that’s the model that has been around for a long time with technologies coming into China, probably more expensive technologies, and you get the supply chain going, and started to export. China exports globally.

And more importantly, there are tricky market conditions in China. One is the demand for power, another is requirement of green gas emission. So what China needs is skill and proven technology to really meet the two sites. We want to do thousands of thousands of MWs projects in China, because that’s what China needs.

Similar to South Africa, who needs power, needs hybrid CSP&PV projects to meet the needs of continuous power supply. I think China should also adopt this concept.

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photo: the bright receiver of working Crescent Dunes

SolarReserve plans all-round cooperation in Chinese market with well protection of  IP right

CSPPLAZA: What about SolarReserve’s market strategy in China?

Tom Georgis: We have many type of strategies in China. Firstly, we are to find the best project developers who want to do CSP, who wants to do molten salt CSP projects. The other is manufacturing. So again that’s establishing a supply chain for projects that are supported in China and also international projects. The third strategy is finding sources of capital for international projects. So we are talking to Chinese banks and Chinese investment groups that are interested in markets like South Africa and Chile, thus to establish cooperation between those markets and China. Finally , we would talk to Chinese EPC companies and construction companies. Again for the projects in China and international. These are 4 strategies in China. And the top of that is the policy, talks with government, the regulatory.

CSPPLAZA: What about SolarReserve’s standard for selecting Chinese partners? Do you have some Chinese partners?

Tom Georgis: The biggest concern is IP, protecting our IP. So they need to make sure that if someone may be stealing our technology that they get involved. If they want to develop CSP projects in China with our technologies and form a competitive stand offering the best price.

Then we want a partner with big entities that obviously have a voice in the energy sector and has a voice in renewable. And on the manufacturing site, we want to talk to groups that again are large and had experience selling internationally. So they have to be very capable with quality required for international projects. That’s quite of our criterion. So those are the types of companies that we are talking to.

CSPPLAZA: When it comes to CSP industry, SolarReserve and BrightSource appear in people’s mind firstly. We know that BrightSource cooperate with Shanghai Electric in joint venture form. Will SolarReserve’s cooperative with Chinese enterprises in such mode?

Tom Georgis: We SolarReserve will have a different collaboration mode with BrightSource. It’s my understanding that joint venture are more around trying to development more consult technology. As I understand, Brightsource is not actually developing projects but a EPC. China is special market, different from South Africa and Chile, where we directly develop our own projects.

In China, we may have a investment partner that will establish our own manufacturing capability, a strategy partners on the mining manufacturing site. So Solarreserve is not going to develop projects in China, not our own projects. We will work with partners who are interested in molten salt CSP, and provide them with technical support, as well as establish a manufacturing chain for projects in China and internationally.

CSPPLAZA: Have ever visited some CSP projects in China?

Tom Georgis: I have been to areas like Qinghai and Xinjiang to explore the sites. We’ve been to the locations, but I haven’t visit any specific project. We went to Qinghai 4 years ago, a time there were very few people in China know about CSP. And we explored the north and south of Qinghai for 2 weeks, coming back with the understanding that Qinghai is a very good location with an abundant solar resources for CSP project development.

CSPPLAZA: We know that a lot of Chinese CSP projects are entering development phase now. and some of them have cooperative partners, while some of them develop projects independently. How do you see this?

Tom Georgis: There are definitely other projects developers that work independently. As the only provider of mature molten salt CSP technology, we really appreciate those company attempting to do it. I hopefully want them to do this technology successfully.

But on large scale commercial molten salt tower CSP project, I don’t think there is to date any Chinese enterprise that can develop independently. For enterprises cooperating with us, I think they will feel proud of working with us.

Editor’s Notes: In the two-hour round conversation, the journalists felt SolarReserve’s powerful confidence to its molten salt tower CSP technology. We are willing to believe that such confidence comes from SolarReserve’s 20 more years investment in  this technology, with hundreds of millions of dollars in research cost and accumulation. Molten salt tower is an advanced CSP technology with the biggest potential of cost reduction. Crescent Dunes’s operation in the coming October will be the best indication of its nature, will set a milestone for CSP industry. Therefore, SolarReserve will be the vey, the really giant in CSP industry.