Rumours of concentrated solar power’s (CSP) death have been greatly exaggerated, or so you would think from the boom in gigawatts coming online in the next few months.
Almost 1.3GW came online this year or is due for completion next year, with a total of 2.7GW in signed power purchase agreements. These projects, sometimes costing close to US$1 billion or more, have been in the pipeline for four or five years. But the signs are that in another five years, this US pipeline will have run dry, like a river running into a desert.
BrightSource’s 377MW Ivanpah has been a shining example of CSP this year. SolarReserve’s 110MW plant Crescent Dunes in the Nevada desert is set to be CSP’s shining star in 2014. But although of the same generation of CSP, the companies were separated almost at birth. SolarReserve is like BrightSource’s little brother who watched the missteps of his elder sibling and chose another direction in life.
Crescent Dunes will be the first commercial-scale CSP project in the US with storage capability because of its molten salt technology. It has a 25-year PPA with Nevada Energy, the utility that lights Las Vegas.
But that’s not the only difference between these companies that at least at conception could once have passed for identical twins.
Founded in 2008, SolarReserve also started developing PV projects a year later. I recently sat down with Kevin Smith, the company’s CEO, to talk about SolarReserve and why its business model would see the company thrive – mostly because it looked beyond the US and CSP.
"BrightSource made a decision a number of years ago when PV prices were high and solar thermal was lower that they weren’t going to focus on storage technology," he said. "The Ivanpah project is a great project but has no storage.
"BrightSources’s challenge now is to transition to storage. They are going to struggle; they need to move from a direct steam type system and move to storage.
"Crescent Dunes will generate about 500,000MWh per year because of the storage costs, which is about twice what you’ll get out of a conventional PV or BrightSource direct steam. Each Ivanpah unit is around 130MW but will only generate 250,000MWh a year."
BrightSource’s 500MW Hidden Hills project with storage got cancelled earlier this year. Its slow shift to storage was compounded by a lack of diversity – both in geography and technology. And its 500MW Palen project was provissonally rejected by the California Public Utilities Commission earlier this week.
SolarReserve now has 246MW of PV projects worth US$800 million in South Africa and is looking to develop more. It sold a portion of its position in the 96MW Jasper project to Google earlier this year.
After its success with PV, with three projects entering into commercial operation in 2014, SolarReserve now wants a share of the pot of gold beneath the rainbow nation’s renewable programme with an RFP for a CSP project with storage. And the company has a long list of project proposals in other sunny countries.
"We just put in a bid in Chile for a tender of a CSP project," said Smith. "We have a bid going in March in Morocco with GDF Suez for a 100MW CSP project.
"Most of the markets we’re active in we’re doing PV and CSP. In some of them we’re focusing a lot of our energy on the mining sector – in Australia, South Africa, Chile. With a lot of those applications, we’re looking at combining CSP and PV into one project to provide 24 hour a day application for the mining sector, which is largely diesel oil based.
"So it’s pretty easy to beat the pricing if they are off grid.