Name a real-world, non-subsidized application in which concentrated solar power (CSP) could competitively replace natural gas in an enormous, emerging market.
It’s solar enhanced oil recovery. Rod MacGregor, CEO of GlassPoint Solar, called it "a $115 billion heavy oil business opportunity."
And if GlassPoint’s "gigawatt" project pipeline is any indication, the power of CSP might find its real niche in pulling difficult-to-access barrels of oil from the ground, rather than spinning a turbine to produce electricity.
GlassPoint just received a $53 million round C equity investment led by Oman’s largest sovereign wealth fund, the State General Reserve Fund, along with the venture arm of Royal Dutch Shell and its original syndicate of venture firms: RockPort Capital, Nth Power and Chrysalix Energy Venture Capital. That brings GlassPoint’s equity funding to more than $80 million since the startup’s founding.
Much of the U.S.’ conventional crude oil reserves remain in the ground because of the physics of oil flow. Enhanced oil recovery could liberate hundreds of billions of barrels of heavy oil, according to the EIA.
Oil field operators already use enormous amounts of natural gas to coax difficult-to-access heavy oil from depleted wells via thermal enhanced oil recovery (EOR). Thermal EOR involves injecting steam into a depleted oil field to thin the remaining heavier oil and move it toward the well. This technique has been used for decades and accounts for more than 40 percent of U.S. EOR production, mostly in California, according to the DOE. Gas EOR using natural gas, nitrogen, or carbon dioxide injection accounts for nearly 60 percent of EOR production in the U.S. The potential for exhaust carbon dioxide to be used for gas EOR is being heavily researched.
Oman uses 23 percent of its own expensive natural gas in its oil fields, primarily for thermal EOR, according to GlassPoint’s CEO — and those numbers are expected to grow as EOR projects contribute an increasing portion to U.S. and Mideast crude oil production.
"Up to 14 percent of all the gas burned in California is burned in Kern County, while Kuwait will burn more gas for EOR than for electricity," said the CEO on Friday. That gas might be better used for power generation, desalination, petroleum products or export. The Economist claims that the amount of gas used in gas-fired thermal EOR means that "a barrel of Californian heavy oil gives the stuff from Canada’s tar sands a run for its money in terms of associated greenhouse-gas emissions."
GlassPoint’s greenhouse-enclosed parabolic solar troughs use mirrors to focus sunlight on a tube containing water, yielding high-pressure steam, which is injected into an oil reservoir to heat heavy oil. The greenhouse protects the mirrors from the desert elements, and an automated washing system cleans the glass.
The CEO noted, "The technology is radically different when we decided to go to oil and gas. The scale is so large, we had to take a step back with a clean sheet of paper." He explained that one of the cost drivers in a traditional CSP project is building the system to withstand wind — strong foundations required more steel and concrete. GlassPoint’s CSP system is enclosed in an agricultural greenhouse, which allows for cheaper, thinner mirrors and "half the amount of steel and aluminum" of an outdoor solar field, according to the CEO.
The system is direct water to steam, and in the case of GlassPoint, the water used is "produced water" from the well operations. This "horrible stuff," as the CEO referred to it, has to be used in the system with minimal cleanup.
GlassPoint installed a solar EOR project at an oil field operated by Berry Petroleum in Kern County, Calif. in 2011, which was used to preheat water for gas-fired steam generators. In May 2013, the Middle East’s first solar EOR project was deployed, a 7-megawatt system developed with Petroleum Development Oman, Oman’s largest oil company.
The real market, MacGregor said in an earlier interview, is the Middle East, where a “perfect EOR storm” favoring solar is setting in. Light crude in many Middle East fields is largely played out, he explained, and there is a shortage of natural gas, as well as plenty of sun.
The CEO spoke of a pipeline which included "multi-gigawatt" projects, saying, "It would not be unusual for a thermal EOR