Futurist: Solar Will Be The Answer

Futurist Ray Kurzweil isn’t worried about climate change
By Lauren Feeney - Full Credit PBS

Ray Kurzweil at JavaOne+Develop 2010 in San Francisco. Photo: Flickr/Yuichi Sakuraba

Author, inventor and futurist Ray Kurzweil famously and accurately predicted that a computer would beat a man at chess by 1998, that technologies that help spread information would accelerate the collapse of the Soviet Union, and that a worldwide communications network would emerge in the mid 1990s (i.e. the Internet).

Most of Kurzweil’s prognostications are derived from his law of accelerating returns — the idea that information technologies progress exponentially, in part because each iteration is used to help build the next, better, faster, cheaper one. In the case of computers, this is not just a theory but an observable trend — computer processing power has doubled every two years for nearly half a century.

Kurzweil also believes this theory can be applied to solar energy. As part of a panel convened by the National Association of Engineers, Kurzweil, together with Google co-founder Larry Page, concluded that solar energy technology is improving at such a rate that it will soon be able to compete with fossil fuels.

I caught up with Kurzweil when he was in New York promoting a new documentary about his life to ask him about his optimistic views on the usually gloomy subject of energy and climate change.

Lauren Feeney: You have made a prediction about the future of solar energy….

Ray Kurzweil: One of my primary theses is that information technologies grow exponentially in capability and power and bandwidth and so on. If you buy an iPhone today, it’s twice as good as two years ago for half that cost. That is happening with solar energy — it is doubling every two years. And it didn’t start two years ago, it started 20 years ago. Every two years we have twice as much solar energy in the world.

Today, solar is still more expensive than fossil fuels, and in most situations it still needs subsidies or special circumstances, but the costs are coming down rapidly — we are only a few years away from parity. And then it’s going to keep coming down, and people will be gravitating towards solar, even if they don’t care at all about the environment, because of the economics.

So right now it’s at half a percent of the world’s energy. People tend to dismiss technologies when they are half a percent of the solution. But doubling every two years means it’s only eight more doublings before it meets a hundred percent of the world’s energy needs. So that’s 16 years. We will increase our use of electricity during that period, so add another couple of doublings: In 20 years we’ll be meeting all of our energy needs with solar, based on this trend which has already been under way for 20 years.

People say we’re running out of energy. That’s only true if we stick with these old 19th century technologies. We are awash in energy from the sunlight.

Feeney: In his recent State of the Union address, President Obama set a goal of running the country on 80 percent renewable energy by 2035, which is a little bit less ambitious than what you’ve suggested. Are you satisfied with the goal set by the president?

Kurzweil: 2035 is 24 years. I am saying we can meet all our energy needs from solar in 20 years. It’s actually pretty consistent with what I’m saying.

Feeney: You have a very optimistic view of the future; eccentric, even. You believe that eventually we’ll be able to live forever, and maybe even bring people back from the dead. How would that growth in population affect the environment? A lot of people are afraid of overpopulation as one of the major factors in climate change.

Kurzweil: We will be extending the human life expectancy; in fact, we have done that already. Human life expectancy was 37 years in 1800, 48 in 1900; it’s now pushing 80. But this is going to go into high gear now that health and medicine has changed. It used to be hit or miss. We’d just find things — medicine was just a kind of an organized set of ideas that we discovered accidentally. We now have the actual means of understanding the software of life and reprogramming it; we can turn genes off without any interference, we can add new genes, whole new organs with stem cell therapy. The point is that medicine is now an information technology — it’s going to double in power every year. These technologies will be a million times more powerful for the same cost in 20 years.

However, the same technologies that are going to extend life and nudge up the biological population are also going to expand the resources. We just talked about energy, because we are running out of it, but actually we are awash in energy. We are awash in water — pun intended. Just most of it is dirty and polluted. And we know how to convert it, today, but it takes energy, which is why it’s expensive. Once energy is inexpensive, we can create water.

There is a whole set of new food technologies. We are going to go from this revolution that happened 10,000 years ago of horizontal agriculture to what’s called vertical agriculture, where we grow plants, fruits, vegetables and meat in computerized factories by artificial intelligence; hydroponic plants tended by intelligent robots to create fruits and vegetables, in-vitro cloned meats, basically just cloning the part of the animal that you want to eat, which is the muscled tissue. There is no reason to create a whole animal to get to the parts that we want to eat.

The point is that the same technologies that are going to increase human longevity are also going to expand the resources and ultimately make them very inexpensive.

Feeney: You talk about what will happen instead of what might happen. But there are so many obstacles to dealing with climate change — political gridlock, consumer apathy. Are you concerned that these things might not happen because of obstacles like these?

Kurzweil: My main thesis, which I call the law of accelerating returns, is not affected by the kind of things you are referring to. The exponential growth of computation is measured in many different ways continued through the entire 20th century, completely unaffected by the little things like World War I and II or the Great Depression. It was not affected at all by the recent economic downturn. This exponential growth of solar energy has continued through thick and thin.

As the cost per watt of solar falls significantly below coal and oil, people are going to go to that for economic reasons. It won’t be a political issue.

Feeney: A lot of climate scientists say that we have about 10 years to turn the situation around, otherwise we’re going to hit this tipping point and we are all doomed. So you think we’re going to make it?

Kurzweil: Even if those timelines were correct, there will be quite a transformation within 10 years and certainly within 15 or 20 years. The bulk of our energy will be coming from these renewable sources. So, I think we have plenty of time. I think we can make it to the point where these renewables are taking over. And I think there are reasons besides climate change to move away from fossil fuels — that whole oil spill, remember that, that’s not climate change, that’s just pollution. But I don’t see a disaster happening before we can get there because it is pretty soon at hand.

Energy priorities for the 112th Congress (Sen. Jeff Bingaman) - The Hill's Congress Blog

Energy priorities for the 112th Congress (Sen. Jeff Bingaman) - The Hill's Congress Blog

By Sen. Jeff Bingaman (D-N.M.) - 02/01/11 06:56 AM ET

Sen. Jeff Bingaman (D-N.M.) gave these remarks Monday at the New Democratic Network and National Energy Policy Institute.

At the beginning of this new Congress, it is already becoming clear that energy policy will have a major place on this Congress’ agenda.

Part of that is because the President made clear last week in his State of the Union speech he will give energy a major priority in his administration.

In part, it is because our energy security is dependent on overseas supplies and global stability. The events that we have seen unfold in North Africa and the Middle East are stark reminders that the world is an unpredictable place. Whenever geopolitical events potentially affect our access to affordable energy supplies, it is a spur to consider energy policies that might reduce those geopolitical risks.
But perhaps more important than any of those reasons is the competitive pressure we are experiencing from other major world economic powers, as they take a very leading role in clean energy markets.
According to Bloomberg New Energy Finance, new investment in clean energy globally reached nearly a quarter of a trillion dollars in 2010. That was a 30 percent jump from where it was in 2009, and a 100 percent increase from the level in 2006.

China alone invested $51.1 billion in clean energy in 2010, making it the world’s largest investor in this sector. China now manufactures over half of the photovoltaic modules used globally. In 2010, China installed about 17 gigawatts of new wind capacity – roughly half of the total capacity installed globally – with virtually all the equipment being supplied by its domestic manufacturers.
But the concern about the competition for clean energy jobs is not just about China. Europe also made major strides last year towards competing in these markets. Countries like Germany, the Czech Republic, Italy, and the United Kingdom, have emphasized small-scale distributed electricity generation projects. In Germany, 8.5 gigawatts of new photovoltaic capacity were added in 2010. So there is a lot going on around the world in that area.

We also see that other countries consume energy more efficiently than we do. According to the International Energy Agency (or IEA), Japan, the United Kingdom, and Canada are all ahead of the United States in implementing policies to make sure they get the most out of every BTU that they consume. Japan has its “Top Runner” program, which encourages competition among appliance and equipment manufacturers to continuously improve the efficiency of those appliances and that equipment.

So the question is, how do we respond to this competitive world for the clean energy jobs? I believe that to remain at or near the forefront of this strongly developing market, we need to do at least four things:
First, we need to ensure that we remain at the forefront of energy research and development, since innovation is the source of our greatest competitive strength. The President made that point in his State of the Union Speech and in other forums, as well.

Second, we must ensure that we have a strong domestic market for clean energy technologies. Without clean energy market-pull in the United States, there will not be the incentive to manufacture and deploy these technologies here.

Third, we have to ensure that we have the necessary financial infrastructure and the incentives to provide the capital needed to build advanced energy technology projects.
And finally, we need to have explicit policies to promote the development of U.S. manufacturing capabilities for these clean energy technologies

I think these four items or elements should be at the heart of whatever comprehensive energy legislation that we undertake in this Congress. Let me say a few more words about each of them.
The first item to consider is support for advanced energy technology R&D. America has traditionally led the world in many of the characteristics that are essential to having an innovation economy. We have the predominant share of the world’s best research universities. We are the world’s largest source of financial capital. We have a disproportionate share of the world’s leading innovators in high technology. But these advantages are shrinking rapidly. In 2007, United States energy research expenditures were at about 0.3 percent of GDP. Japan was at about 0.8 percent of GDP and even China was about 0.4 percent. Since then, our overseas competitors have significantly increased their research investments in energy, while our own investments in this area have grown only modestly. It is clear that if we are to put together any kind of bill that deserves to be labeled as comprehensive energy legislation, we need to address the huge gap between where our investment in energy technology research is and where in fact it ought to be.

In his State of the Union address, President Obama correctly identified this as a major priority for the appropriations process this year. Secretary Chu will appear before the Committee on February 16 to testify about the details of the President’s plan for funding, which will be released on Feb. 14.

The second item is ensuring robust domestic demand for clean energy technologies. It is not enough just the support the research. Getting clean technologies developed, manufactured and deployed here in the United States will require a robust and certain demand for clean energy in the marketplace. This reality was underscored to me during a trip recently to Silicon Valley. I spoke to various people there involved in financing and developing clean energy projects. The message I heard consistently was that uncertain U.S. demand for clean energy is preventing many promising clean technologies from being developed in this country. Companies will not establish a manufacturing base where they do not see a strong market. Private capital sources are, in fact, exerting intense pressure on American clean energy innovators to establish their manufacturing base overseas, where government policies are creating this strong clean energy demand.

So, we have to take seriously the marketplace reality that the high-wage, clean-energy manufacturing of the future will be located both close to demand and in countries with the most favorable clean energy policies. My desire is to see the United States lead the world in renewable energy manufacturing so all of the solar panels and wind turbines that we install around the country are not stamped “Made in China” or “Made in Germany.” This is the key reason why I have long supported a Renewable Electricity Standard. We need to provide long-term market predictability for renewable electricity. Our on-again, off-again production tax credits are no match for the comprehensive approaches being put in place by our economic competitors.

The third item is support for deployment. We have to have policies to encourage deployment of these technologies. While end-use demand is certainly one of the first things an entrepreneur or potential investor looks at when deciding where to locate operations, the analysis does not end there. An equally important question is – Is there a path to full commercialization of this technology? How do we build the first-of-a-kind project (or the first-few-of-a-kind projects) utilizing a new clean energy technology to demonstrate its actual cost and performance? This is what the private sector wants to see before it will invest in a technology.

This is a particular problem for clean energy technology, because the capital costs in this area are higher than previous high-tech success stories in the United States such as IT or biotechnology. No investor in today’s marketplace can match these capital requirements by themselves. Our competitors in Asia and Europe have set up institutions to address the problem. They have already successfully lured companies to commercialize and manufacture their U.S.–developed clean energy technologies in those markets. We need to set up similar institutions if we hope to support clean energy jobs here in the United States.

The fourth element I mentioned was support for manufacturing. If we want clean energy jobs, we need to have policies to encourage manufacturing to occur here. In addition to providing a predictable market for clean energy and a robust financing capability for first-of-a-kind projects, we need to have incentives for manufacturing the critical components for clean energy technologies. Other countries, most notably China, have complemented their clean energy market standards with robust tax incentives and other fiscal subsidies specifically targeted at manufacturing clean energy components. And as a result, the U.S. has gone from being a world leader in producing clean energy technologies and enjoying a “green trade” surplus of more than $14 billion in 1997, to a “green trade” deficit of nearly $9 billion in 2008. We cannot afford to sit idly by as our economic competitors move clean energy manufacturing steadily overseas, and deprive Americans of solid job opportunities.

So these are four key strategic elements that need to be included in any energy legislation in this Congress, if an energy bill is to help us compete in global energy markets in the future. None of these individual ideas are new, but their interconnection is now more apparent. A few years ago, we thought that we could do just one or a few of these things and be successful. It is now clear that you must do all four of them and do so on a level that is competitive with what other countries are doing.
Let me now describe some of the specific policy initiatives that I think will be very timely for us to pursue in the Senate this year. Most of these initiatives will be items I hope to champion in the Committee on Energy and Natural Resources. This is not intended to be an all-inclusive list. The committee has 22 Members, many of whom have just been appointed. I anticipate a lot of meetings and bipartisan dialogue over the next few weeks as we work out our legislative roadmap for this Congress. But the following topics are issues that I think are particularly crucial for us to address. They are also issues where we did have strong bipartisan consensus in the 111th Congress. This gives us a good place to start our deliberations this year.

The cheapest energy is the energy we do not have to use by operating more efficiently. So, clearly where I’d start with is energy efficiency. In the last Congress, we had a very productive dialogue in the Energy Committee and among businesses, manufacturers, and efficiency advocates interested in appliance and equipment energy efficiency. The result was a package of legislative provisions that codified consensus agreements to update certain existing appliance standards, to adopt new appliance standards, and to improve the overall functioning of the Department of Energy’s efficiency standards program. Many of these efficiency provisions were part of the comprehensive energy bill we reported out of Committee in 2009. Others were subsequently approved by the Committee or part of bipartisan bills.

These sorts of standards are essential if U.S. appliance manufacturers are to remain competitive in world markets, which will increasingly demand highly efficient appliances and equipment. By ensuring a strong domestic market for energy efficient products, we keep innovation and jobs here in America, while realizing significant energy and water savings, and major cost-savings to the American consumer.
Obviously we had great difficulty in getting any sort of legislation though in the lame duck session of the last Congress; we were not able to enact these consensus provisions. We had overwhelming, broad bipartisan support, but not unanimous support in the Senate. This is an important piece of our early agenda in this Congress, and I hope we can introduce it soon. My staff has been working with the consensus group of stakeholders on some further technical changes to last year’s package. I plan to introduce a revised package within the next week or two.
There is also much that can and should be done to promote efficient use of energy in other parts of the economy.

In residential and commercial buildings a broad coalition supported Home Star, a program for residential building efficiency. I hope we can move forward on this. Similar interest was apparent with commercial buildings in a program called Building Star. I hope to move one or both forward. In transportation, two proposals from last Congress deserve a closer look.

First, we should provide a greater point-of-sale incentive to vehicle purchasers, with dealership rebates that would be larger for the more fuel-efficient cars. Senators Lugar, Snowe and others cosponsored this legislation with me in the last Congress. A second set of proposals dealt with diversifying the sources of energy that we use in transportation. This bill was Senators Dorgan and Alexander’s proposal and passed out of the Energy Committee on a very large 19-4 vote.

Energy efficiency in manufacturing and industrial operations is also important. The legislation reported by the committee last year contained a comprehensive program on manufacturing energy efficiency that had good bipartisan support. Again, I hope we can move forward with this legislation, too.
Another priority is the one highlighted by the President in his state of the Union speech – moving to a cleaner energy mix in the way we generate electricity.

For a number of years I have advanced a proposal for a Renewable Electricity Standard, to ensure a long-term and predictable demand for renewable clean energy resources. The President proposed to expand upon that concept by including a broader suite of technologies such as nuclear energy, coal with carbon capture and storage, and natural gas generation. The President’s stated goal, as he described it, is to achieve 80 percent of our electricity from such clean energy sources by 2035. The White House has asked us to work with them to see how the provisions for this Clean Energy Standard would be developed. Obviously, there are a lot details to work out. I am pleased that the Administration has reached out to the Committee to consult on this subject.

Perhaps no topic garnered more scrutiny during last Congress’s markup that the Renewable Electricity Standard. I plan to work with colleagues on both sides of the aisle in the Committee to determine how we can craft a workable legislative proposal to achieve what the President has set out as his goal. As we do so, a number of key design questions will need to be answered, such as, what counts as a clean energy technology? How does the proposal account for existing clean energy sources? Does the credit trading system that we have developed for renewables in our proposal for renewable resources fit with these other resources?

With respect to financing assistance for energy projects, I think there are at least three top priorities for early attention in this Congress: reforming the current loan guarantee program for clean energy projects, providing financing support for advanced energy manufacturing in this country, and providing reasonable stability and predictability in the tax provisions that apply to clean energy projects and technologies.

The first of these is to replace the current loan guarantee program for clean energy technologies with a Clean Energy Deployment Administration, or CEDA. CEDA would be a new independent entity within DOE, with autonomy like the Federal Energy Regulatory Commission has. It would provide various types of credit to support deployment of clean energy technologies including loans, loan guarantees, and other credit enhancements.

This proposal was strongly supported on a bipartisan basis in the Committee as part of the larger energy bill we reported. It also had a broad range of external support from clean energy developers, innovators, and venture capital firms. Fixing the problems of the current DOE loan guarantee program, and ensuring that we have an effective financing authority for a broad range of clean energy technologies, including renewables, nuclear, energy efficiency, and carbon capture and storage, needs to be one of our highest priorities. I am committed to moving ahead with that legislation in this Congress.

The second priority in the area of financing assistance relates to encouraging the location of manufacturing facilities here and replenishing the fund to award tax credits under section 48C. This section provides up to a 30 percent tax credit for the costs of creating, expanding or reequipping facilities to manufacture clean energy technologies.

The initial funding was vastly oversubscribed – the government received $10 billion in applications for $2.3 billion in tax credits. This is a powerful demonstration of the potential for clean energy manufacturing that exists in this country. In the last Congress, Senators Hatch, Stabenow, and Lugar joined me in filing the American Clean Technology Manufacturing Leadership Act. This bill would have added another $2.5 billion in tax credit allocation authority. President Obama has since called for an additional $5 billion. I hope we can help reintroduce bipartisan legislation to ensure this credit’s continuation at the President’s proposed level. While this is a matter that will be handled in the Finance Committee, it is an important near-term bipartisan opportunity in this Congress.

The third essential element is to bring stability and predictability to this part of the tax code in order to attract private capital to clean energy projects. If you look at this part of the tax code, many of the energy-related tax incentives will expire at the end of 2011, including the section 1603 program, the credit for energy-efficient residential retrofits, the credit for construction of new energy efficient homes, the credit for energy efficient appliances, the incentives for alcohol fuels (mostly ethanol), biodiesel and renewable diesel. Other energy-related tax incentives are set to expire at the end of 2012, 2013, and 2016.

One other major challenge and priority for the Committee in this Congress will be to address the proper and effective regulation of energy development to order to protect the public health and safety and the environment. I met this morning with Michael Bromwich, the Director of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). Clearly he is working very hard to get his arms around this critically important issue.

One of the important lessons learned from the National Commission on the Deepwater Horizon Oil Spill is that, in the long run, no one –least of all the regulated industry – benefits from inadequate regulation and underfunded regulators. In the aftermath of the Deepwater Horizon disaster, the Committee on Energy and Natural Resources last June came together and unanimously voted out a bipartisan bill to address the key problems uncovered by our hearings on the disaster. Unfortunately, Congress did not enact our bipartisan bill.

Our first hearing of this Congress, last week, heard from the co-chairmen of the President’s Commission on their recommendations. I hope to introduce on a bipartisan basis a follow-on bill to last year’s legislation in the near future. I hope that we can repeat our bipartisan success of the last Congress in developing a bill that recognizes our need to develop the rich resources of the Outer Continental Shelf, but also minimize the potential impacts of developing those resources on the marine and coastal environment and on human health and safety. This is important work that needs to be completed.
Finally, an item that I hope we can address early in this Congress in the Energy Committee deals with perhaps the most pressing energy security problem we have. That is the vulnerability of our electrical grid to cyber attack. A major disruption of the electric transmission grid, or the equipment it contains, as part of a cyber attack could have disastrous consequences. We need to ensure that adequate preventative measures are in place across the grid. The problem is that we don’t currently have mechanisms to ensure that these needed steps are being taken. The whole grid is as vulnerable as its weakest link. In the last Congress, our Committee twice passed legislation to address this need. The House of Representatives also sent a bill to the Senate on this subject, but again, due to the inability to process legislation in any mode other than unanimous consent in the Senate, we were not able to pass the legislation into law, nor take the needed steps to ensure the security of our grid. I hope to work with the Members of the Committee on both sides to deal with this issue early in this Congress.
So in conclusion, I have laid out a pretty aggressive opening agenda for the Committee. This week, we have two hearings – one to advance a bipartisan bill to ensure our nation’s future supply of medical isotopes and the other to raise the curtain on energy activities and issues generally in this Congress.

Next week, Senate Democrats are away from Washington for several days for an issues conference, so our Committee will not have formal meetings.

Following the release of the President’s budget on Feb. 14, we will hear from Secretary Chu on Feb. 16 and then from Secretary Salazar and the Chief of the Forest Service on their budget requests in the first week after the President’s Day recess. When we finish with our duties to scrutinize the Budget request, we will return to legislative hearings on energy. By that time, I hope that we have sufficient bipartisan engagement with both the returning and the new Members of the Committee that we can start making good progress on developing one or more energy bills for the full Senate to consider in the first several months of this year.

Thanks again to Simon Rosenberg and the NDN for giving me this opportunity to talk about our agenda for the early part of this Congress.

Sen. Jeff Bingaman (D-N.M.) is the chairman of the Senate Energy and Natural Resources Committee.

Chadborne & Parke LLP's Project Finance NewsWire January 2011

Click here for Chadborne & Parke's latest Project Finance Newswire, which we consider to be required reading for clean energy project finance participants.

IN THIS ISSUE

1 More Subsidies for US EnergybProjects
8 DOE Loan Guarantee Update
12 California Cap-and-Trade Program Takes Shape
15 California Settlement Settles Old Scores and Charts New Paths for Generators
18 Master Financing Facilities for Solar Projects
29 Turkey Moves to Boost Renewable Energy
31 Cellulosic Biofuels: The Future Is When?
38 PPPs in the Middle East
42 Environmental Update

Solar Thermal vs. PV - A Brief History and Update

Are Solar Thermal Power Plants Doomed?

4 comments  |  by: Greentech Media / Seeking Alpha October 18, 2010  | about: ABGOY.PK / AMAT / NRG / SGFRF.PK / SPWRA / TAN / TSRA

 

by Michael Kanellos, Brett Prior
Concentrating Solar Power [CSP] is one of our favorite renewable energy technologies, but it might be in serious trouble. And this time the culprit is not cheap natural gas, the Koch Brothers, nor the desert tortoise advocates.

This time, the adversary is the other half of the solar family.

Just to clarify, CSP includes all concentrating solar thermal (CST) technologies, such as trough, tower, and dish-engine - as well as concentrating PV (CPV) technologies including companies such as Amonix, SolFocus, and Concentrix.

The CSP industry began to flourish in the late 1980s and early 90s in California, with the construction of 354 megawatts of parabolic trough plants in the Mojave Desert.

Then, the state allowed a real estate tax exemption lapse, a change in the law that companies like Solel and Luz warned would kill them. Right after Luz ran out of money, then Governor Pete Wilson signed an extension.

A second wave began around 2004 with the revival of green technology in the state. Luz founder Arnold Goldman rounded up the old team, recruited some new execs and founded BrightSource Energy. Peter Le Lievre and a group of Australians came up with Ausra and built a plant in Las Vegas.

Advocates said that solar thermal plants, if 500 megawatts or larger, could rival natural gas in cost per kilowatt hour. Another lapse in the property tax exemption loomed, but was avoided.

But then the 2008 financial crisis hit. The sudden decline of funding hit the industry particularly hard, considering that a demo plant costs around $25mm and a commercial plant requires somewhere north of $250mm. Ausra and eSolar had to retool their strategies, while BrightSource had to sell part of its first project at Ivanpah to Bechtel.

If that weren’t enough, environmentalists and U.S. Senator Dianne Feinstein pushed to declare a million acres of the Mojave a protected zone. Concerns about desert tortoises forced BrightSource to scale Ivanpah down to 370 megawatts. It was as if 19^th Century coal miners blamed their lot on the gruel purity standards being imposed on mining camp cafeterias.

But the projects have, in recent weeks, begun to get the necessary approvals from the California Energy Commission and the Bureau of Land Management, just in time to qualify for the Treasury Grant program.
So the near term outlook for CSP looks pretty bright, as BrightSource's Ivanpah, Abengoa's (ABGOY.PK) Solana, and Tessera's (TSRA) Imperial all look likely to break ground this year.
So, what could derail CSP's longer term prospects?

PV, that’s what.

The relentless price declines of PV panels allows developers to build PV plants at a lower cost than their CST cousins. This issue is illustrated in the following Capital Cost per watt chart (an excerpt from the upcoming GTM Research "CSP Report"). In 2010, the price to build a CSP park run by Troughs, Power Towers or Dish-Engines will cost between $5.00 and $6.55 per watt (AC). On the other hand, utility-scale PV projects can limbo below $3.50 a watt (DC).

By 2020, the CSP solutions are expected to be in the $2.40-$3.80 per watt (AC) range, but by that time PV plants could be below $2 a watt (DC). Trough & Tower plants are behind PV, and not likely to catch up.

The better comparison is levelized cost of energy (LCOE) - as this corrects for the DC-to-AC conversion that PV needs to deal with, the differences in O&M, and the differing amounts of kWh generated per watt of equipment installed (as yields vary by technology).

This second chart depicts the LCOE on an apples-to-apples basis (same location, same plant size, same financing terms). Again, PV is cheaper today, and expected to widen its edge over the next decade. By 2020, the CSP technologies are expected to be in the $0.10-$0.12/kWh range, whereas PV is forecast between $0.07-$0.08/kWh.

A bleak outlook?
As a sign of the times, NRG Energy (NRG) decided that instead of building CSP plants using eSolar Towers, it would use the sites for PV plants. The company did this both in California (Alpine SunTower), and in New Mexico.

This sort of reversal wasn’t expected in 2006 or 2007, but since then the Chinese have ramped up their solar PV manufacturing, the cost of polysilicon has slid dramatically, and the overall cost of PV modules has declined significantly. Both Solon (SGFRF.PK) and SunPower (SPWRA) now make solar power plants “in a box” that can generate 1 megawatt. They come straight from the factory on big rigs.

If you accept the following 2 premises, the future for CSP looks pretty bleak.

1) PV is now cheaper than CSP on a levelized cost basis, and will reduce its costs faster than CSP going forward

2) When awarding solar power purchase agreements ((PPAs)), utilities will choose the lowest price option

What could prevent this scenario from coming to pass?

One possibilty is that utilities are willing to pay a premium for CSP plants for one of two reasons:

i) CST plants produce more consistent power output (less spikiness). These plants can produce power fairly consistently throughout the day because of the inertia of the turbine and the ability to burn natural gas when clouds roll in. When clouds blanket a PV plant - the output can drop off a cliff. The last time the solar thermal plants in the Mojave experienced an eyebrow-raising drop in power it was because Mt. Pinatubo blew.

ii) CST power plants fit naturally with storage systems and can even continue to produce power at night. For now, if utilities want solar with storage, the only economic option is CST (trough or tower). Perhaps at some point in the future new technologies like sodium batteries and dry cell batteries from Xtreme Power may help PV developers even the storage gap.

Are utilities willing to take quality or storage into account? Apparently not at the moment.
“Utilities aren’t willing to pay for consistency and storage,” said Brad Friesen, Vice President of the Renewables business line at Fluor, one of the largest EPC (engineering, procurement, & construction) firms in the world. Most of the utilities are concerned about meeting their renewable portfolio requirements, he said. Five years from now utilities might question their thinking, he added, but right now, these considerations are not given much weight.

And price is not the only area where CST plants are disadvantaged.

Lack of Modularity

Trough and tower plants require large turbines to operate - and the economics for steam turbines only work with 50 MW+ plants. So modularity is not an option for CST plants.

Developers have figured out that it is much easier (and faster) to site, permit and get transmission arranged for a sub-20 MW plant than it is for a larger project. That effectively rules out trough and tower - but allows for traditional flat-plate PV, CPV, and potentially Dish-Engine options.

Restricted geography

The economics of CST require that they be located in a more constrained geographic band.

Conclusion?

Solar thermal still has a lot of appeal. Some of the newer technologies (towers & dish-engines) are just coming out and may surprise us in their ability to lower costs. Other technologies like SolarReserve’s cycling salt could further wring out inefficiencies. (Friesen is a fan of SolarReserve). When quality and storage are required, solar thermal comes out cheaper than nuclear. The capital for nuclear plants cost $6,000 a kilowatt, or $6 a watt, or more, not including waste storage, and often rise higher than expected. Thermal plants may not run all night, but they provide consistent power in the day when needed. The question is whether the CST industry can survive until its competitive advantages are truly valued by the utilities.

"There is a role for solar thermal. If it is North Africa, that is fantastic," said Travis Bradford, founder of the Prometheus Institute and a professor at the University of Chicago. "But the difference (in the amount of total energy that will be produced by utility solar parks) between solar thermal and PV will be at least an order of magnitude. Maybe two." That is to say that if PV will see annual installations of 20,000 MW per year in the middle of this decade, perhaps CST will be more in the realm of 200-2,000 MW per year. Not a particularly rosy outlook.

It's like that old, painful axiom in semiconductors.

Don’t bet against silicon.

Disclosure: No positions
 

SoCal Edison Signs 36 Warehouse Rooftop PV Deals

July 27, 2010 09:00 AM Eastern Daylight Time 

Southern California Edison Awards 36 Contracts for Utility-Scale Solar Rooftop Project

ROSEMEAD, Calif.--(BUSINESS WIRE)--Southern California Edison (SCE) awarded 36 contracts to independent power producers for a total of nearly 60 megawatts from photovoltaic solar panels that will produce emission-free energy for SCE customers. The panels will be installed on 31 unused rooftops and five ground-mount sites in SCE’s service territory.

“We’re working to help California meet its Million Solar Roofs goal and supply even more renewable energy to our customers where and when it’s most needed, without the added time and expense to construct major new transmission facilities.”

The solar rooftop project, approved by the California Public Utilities Commission in June 2009, calls for a total of 500 megawatts of solar generating capacity, most of it on otherwise unused large warehouse rooftops. Half of the 500 megawatts will be from independent power producers who respond to SCE’s request for offers under competitive solicitations; the remaining 250 megawatts will be owned and operated by SCE. It is expected that this project will create about 1,200 jobs for Southern Californians.
“These contracts make significant strides toward distributed renewable generation for one of the most innovative solar programs in the country,” said Marc Ulrich, SCE vice president, Renewable and Alternative Power. “We’re working to help California meet its Million Solar Roofs goal and supply even more renewable energy to our customers where and when it’s most needed, without the added time and expense to construct major new transmission facilities.” The contracts awarded today are the first executed under the competitive solicitations for independent power producers.
SCE believes that its solar rooftop project will be a boon for the solar industry and consumers alike, with the resulting cost per unit significantly more cost effective than more common residential photovoltaic installations in California. Eventually, this could help drive down installation costs of photovoltaic generation for everyone. When complete, the solar panels will cover an area totaling 4 square miles on about 250 otherwise unused warehouse roofs. The total power production will rival a utility-scale power plant, enough electricity to serve 325,000 average homes at a point in time. SCE has already installed panels on three rooftop warehouses in California’s Inland Empire that are delivering – or are in line to deliver – electricity to the grid.
SCE is the nation’s leading utility for renewable energy. In 2009, SCE delivered 13.6 billion kilowatt hours of renewable power to its customers, about 17 percent of its total power portfolio.

COMPANIES AWARDED CONTRACTS FOR ROOFTOP SOLAR
Company Name		Company HQ		Project location		Project size (MWDC)		Estimated Online Date
Tioga Solar XIX, LLC		San Mateo, Calif.		City of Industry		0.75		4/15/2011
Greenpower Williams LLC		Burbank, Calif.		Valencia		1.30		10/1/2011
SunEdison Utility Solutions, LLC		Beltsville, Md.		Mira Loma		1.20		1/25/2012
SunEdison Utility Solutions, LLC		Beltsville, Md.		Ontario		1.54		1/25/2012
SunEdison Utility Solutions, LLC		Beltsville, Md.		Ontario		1.46		1/25/2012
SunEdison Utility Solutions, LLC		Beltsville, Md.		Corona		1.13		1/25/2012
SunEdison Utility Solutions, LLC		Beltsville, Md.		Rialto		1.19		1/25/2012
SunEdison Utility Solutions, LLC		Beltsville, Md.		Santa Fe Springs		0.81		1/25/2012
SunEdison Utility Solutions, LLC		Beltsville, Md.		Pomona		1.25		1/25/2012
SunEdison Utility Solutions, LLC		Beltsville, Md.		San Bernardino		1.42		1/25/2012
SunEdison Utility Solutions, LLC		Beltsville, Md.		Fontana		1.17		1/25/2012
SS San Antonio West LLC		Ridgefield Park, N.J.		Chino		1.86		10/1/2011
Golden Solar, LLC		Santa Fe Springs, Calif.		Santa Fe Springs		1.43		4/1/2011
Golden Solar, LLC		Santa Fe Springs, Calif.		Santa Fe Springs		1.34		4/1/2011
Industry Metrolink PV 1, LLC		San Francisco, Calif.		City of Industry		2.00		12/1/2010
Advanced Solar Integration Technologies, LLC		Irvine, Calif.		Commerce		1.20		1/28/2011
Photon LLC		Fremont, Calif.		Rancho Cucamonga		1.26		1/31/2011
Photon LLC		Fremont, Calif.		Ontario		0.66		1/31/2011
Photon LLC		Fremont, Calif.		Ontario		0.56		1/31/2011
Photon LLC		Fremont, Calif.		Ontario		0.58		1/31/2011
Photon LLC		Fremont, Calif.		Chino		0.70		1/31/2011
Photon LLC		Fremont, Calif.		Rancho Cucamonga		0.89		2/28/2011
Photon LLC		Fremont, Calif.		Rancho Cucamonga		1.61		3/31/2011
Photon LLC		Fremont, Calif.		Los Angeles		1.70		3/31/2011
Photon LLC		Fremont, Calif.		Buena Park		2.51		3/31/2011
Photon LLC		Fremont, Calif.		La Mirada		1.10		4/30/2011
Photon LLC		Fremont, Calif.		La Mirada		1.02		4/30/2011
Photon LLC		Fremont, Calif.		Foothill Ranch		1.39		4/30/2011
Photon LLC		Fremont, Calif.		Lake Forest		0.94		4/30/2011
Photon LLC		Fremont, Calif.		Compton		0.66		4/30/2011
Photon LLC		Fremont, Calif.		City of Industry		0.59		4/30/2011
Solar Power, Inc.*		Roseville, Calif.		Palm Springs		2.83		9/15/2011
Solar Power, Inc.*		Roseville, Calif.		Palm Springs		4.96		12/15/2011
SEPV 1, LLC*		Woodland Hills, Calif.		Palmdale		2.27		3/31/2011
SEPV 2, LLC*		Woodland Hills, Calif.		Twentynine Palms		2.32		3/31/2011
Cascade Solar LLC*		San Juan Capistrano, Calif.		Joshua Tree		10.00		12/15/2011
* denotes ground-mount installation

About Southern California Edison
An Edison International (NYSE:EIX) company, Southern California Edison is one of the nation’s largest electric utilities, serving a population of nearly 14 million via 4.9 million customer accounts in a 50,000-square-mile service area within Central, Coastal and Southern California.

(Note to Editors: Photos, fact sheets and b-roll are available at www.edison.com/solar.)

Contacts

Southern California Edison
Media Contact:
Vanessa McGrady, (626) 302-2255
Investor Relations:
Scott Cunningham, (626) 302-2540

Solar City's Residential Solar Power Solution

Solar power done cheap

 
SolarCity employees putting panels on a roof in Los Angeles.  
By Steve Hargreaves, Senior writerJune 28, 2010: 4:28 PM ET

FULL CREDIT TO www.CNNMoney.com

LOS ANGELES (CNNMoney.com ) -- In a construction van winding through Los Angeles' crowded streets one hot spring morning, 25-year old Tim Morris laid bare his contribution to changing America's dirty, fossil fuel-based economy. "I'd like to see America and the world become sustainable," said Morris, a transplant from Flint, Mich., who's been in L.A. just a little over four months. "Solar is the biggest difference I can make with what's on the market."

Andrea Kreuzhage is proud of the way her panels look atop her Los Angles home.

Morris is an installer for California-based SolarCity, one of a handful of companies pioneering an all-inclusive approach to solar, making it as easy and cheap for the consumer as possible. Under the company's model, customers agree to a monthly lease and sign the rights to claim subsidies over to SolarCity.

In return, homeowners get a solar array installed on their roof, maintained for the life of the lease. They're hooked up to the electric grid, so when they need more power than the panels provide, there's no disruption. And SolarCity guarantees the panels will produce a set amount of power, which the company says should offset the electric bill and more than compensate for the monthly fee.
"Our goal is to get millions of homes to go solar, but the biggest barrier is the experience," said Lyndon Rive, the company's 33-year old CEO with major entrepreneurial connections. "Humans are lazy by nature. They want to do the right thing, but they don't want to jump through ten hoops to do it."

The challenge now facing SolarCity, and competitors like Akeena and Sunpower: Can these residential-mounted solar systems compete with the massive utility-scale solar arrays being built in the desert or the vast commercial solar systems being put atop big box stores nationwide? And can they do it competitively when the generous government subsidies expire?

The obstacles are no doubt huge, but Rive may just be the man for the job. He's a serial entrepreneur, having started his own cosmetics business in South Africa at the age of 17. He sold it five years later, moved to the U.S., and along with his brother started a multi-million dollar tech company.

The brothers are now in SolarCity together, along with their more famous entrepreneur cousin - PayPal co-founder and Tesla Motors CEO Elon Musk.

Green jobs

SolarCity is the type of company President Obama and other supporters of the new "green economy" love to highlight. It's creating good jobs for construction workers hard-hit by the real estate bust. Solar City pays its installers $15 to $30 and hour, plus full benefits. It's growing. Last year the company had 300 employees. Now it's up to 560, and plans to have 800 by the end of 2010. It operates in five states, and is eyeing expansion plans in at least three others. In a working class suburb just south of Los Angeles, Wayne Holder is not the typical person one often conjures up when thinking of solar power.

Holder, 44-years old and an electrical engineer with the Los Angeles sanitation department, uses a lot of power. Between him, his wife and their two kids Holder says the washer and dryer get a constant workout. Plus, the family has a salt water pool the requires the filter to run nearly non-stop.
The result was an electric bill that reached nearly $600 a month last year, said Holder.
That's when he decided to call SolarCity. Now, he says he pays about $300 a month to the utility, and another $180 to SolarCity, with no change in electricity use. "It was a no-brainier," he said. "and the only thing I have to do is hose off the panels every once in a while."



Other customers do it more for the environment. On a hillside overlooking nearly all of Los Angeles, Andrea Kreuzhage recently put down $1,000 to install a SolarCity system on her roof. Kreuzhage, a 47-year old documentary film maker, is not a big user of power. Before her solar system, her monthly electric bill was about $50 a month. Her lease with SolarCity is $55, although her solar panels now actually produce more power than she uses. (Local law doesn't yet allow her to sell that power back to the utility, although people are working to change that.) But for her, the extra $5 a month is well worth it.
"The idea is to walk the walk, to be active, to do more," she said. And besides, "I'd rather pay a green business instead of a huge utility."

The helping hand

If SolarCity's customers and employees seem happy with the arrangement, they owe one entity a big thanks: the government. Thanks to a mix of federal, state and local incentives, some 50% of the costs of solar power are subsidized. Many of those subsidies are set to expire in eight years. The solar industry thinks it can compete without them, but it's clear costs will have to come down. "It's dependent on a lot of key breakthroughs and variables," said Bill Ong, a solar power analyst at the investment bank of Merriman Curhan Ford. "One can debate whether they are on track or not, but progress is being made."

As for solar power mounted on homes like SolarCity's model, known as "integrators" Ong said there is room for that type of power and larger commercial systems. "It's a big market for multiple players," he said, "and the integrator has this niche." But with so many challenges facing solar, and Rive's proven track record seemingly allowing him to get into any industry, why he'd pick one as risky as solar? For the potential.