The future of solar – centralised or local generation?

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The world’s largest concentrated solar plant is nearing completion, and so are the world’s biggest solar PV projects. But does the future of solar power lie in huge, centralised power plants, or in smaller, localised distributed configurations. Many in the industry are pointing to local, and utilities are waking up to how disruptive that will be to their way of doing business.

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After driving several hours along Interstate 15 through the desolate and ancient land formations of the Mojave Desert, and after rising over a large summit, you are suddenly presented with a glimpse of what many say is the future of electricity generation.

The 392MW Ivanpah solar tower power station is the biggest concentrated solar thermal project in the world. It is also the most visually arresting. It features three huge towers, each 150m tall, surrounded by huge fields of mirrors that will focus the sun’s energy on a receiver located at the top of the tower. Water is boiled to create steam that then drives the turbines.

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It’s solar generation at a massive scale, made more impressive by its surroundings. Even though it spreads over so many hectares, its size pales against the grandeur of the stunning Mojave landscape.

Ivanpah is not the only solar power station of large-scale being built in this art of the world. To the north, across the state border in Nevada, a 110MW solar tower with storage facility is being built by SolarReserve.

To the west, in the heart of California’s “high desert”, First Solar is nearing completion of a 250MW AVSR solar PV project near Lancaster, while down the road SunPower has begun construction of a 579MW solar PV plant of their own.

A little further north, the tables are turned as SunPower puts the finishing touches to its 250MW CVSR project, while First Solar is about to trump it with the 550MW Topaz solar PV project, which is half way through construction.

But even as these massive projects are nearing completion, the question is being asked: Does the future of solar really lie in more of these large scale projects? Even the owners of these huge projects are not so sure.

NRG, the largest owner of generation assets in the US, and part owner of the Ivanpah project, says it is uncertain about the future of such large scale projects, because they are hugely capital-intensive.

“These projects are massive, and even though the technology is proven it is very difficult to continually build these in the US, because there are limits to where these projects can be placed,” says Todd Michaels, the head of distributed generation for NRG.

“Utilities are fully procured out in the south-west where this technology most appropriate.  You are seeing a move to push new solar projects into distribution network. That’s where our CEO David Crane is saying these projects are heading – into distributed energy in general and solar in particular.”

CEO SunPower Tom Werner is building two of these massive projects, but even he says he is not sure where the future lies, which is why he is having his company hedge his bets.

“We large scale utility, large and small distributed generation , and rooftop,” Werner told RenewEconomy is a recent interview. “We purposely straddle all three because we don’t know the answer to your question, to be honest.

“Here’s how we look at it. The beauty of solar is that it is easy to site, where there is sun. It’s quick to install, scaleable, and you can make it big or small. Those are huge advantages.

“So you can though utility problem on its head – you ask yourself, where do I have transmission, where do I have load, and then you can put put  solar  in it.

“If you think that way, you need all three. In Los Angeles, where there is load, it’s where the buildings are, there’s lots of roof space, and the distribution capacity argues for distributed generation. But for sure large scale ground mount is half the price, but you need the land. There will be different solutions for different environments.”

Werner says it is probable that distributed generation will disrupt the way utilities deliver energy. “The idea of hub and spoke of a large energy generation and transmitted to a bunch of customers is likely to be disrupted by solar DG,” he says, echoing comments by NRG’s Crane

“The economics have come down enough, so people are asking why don’t I just generate where I use it. The key is whether you need the wires or not. We are a few years away from that not being needed.”

“Our view is that both will exist in the long run, but distributed generation – I can quote big utilities exec who 3-4 years ago called it “loony”. But they are now investing.”

Werner’s point about distributed generation is borne out by recent developments, both here and in the US. The local utility in Palo Alto, in the heart of Silicon Valley, recently conducted an auction and awarded 80MW of solar projects for just US6.9c/kWh, which equates to around US10c/kWh after tax incentives.

In Australia, it will be interesting to see what takes off first. SunPower will likely be announcing some projects as it rolls out its “energy services” model with Diamond Energy.  But it seems clear that many of the projects will be designed with local load needs in mind.

The Sunshine Coast council may have set the tone, with its announcement last week that it will build a 10MW solar farm to provide half of its energy needs.

That is just half way down the road to the sort of scenarios painted by NRG’s Crane and SunPower’s Werner. It’s unlikely that customers will not need the grid at all – barring some stunning developments in storage, but they are likely to need it a lot less than in the past.

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10 Comments
  1. Mick 6 years ago

    …It is not really an “either / or” question. There will be most certainly need for both.

    Concentrating Solar Thermal with storage has a considerale value proposition (storage, dispatchabily / load following, and ancilliary services), and will be important in any high renewable energy system (as per AEMO’s 100% Renewable Energy Study). I can’t see how that can be provided on a small / decentralised scale.

    PV – being highly modular – is of course entirely different. The (comparably small, given modularity) economies of scale is offset by the fact you have to have the transmission access, and land aquisitions costs (c.f. using roof space). Not to mention the the increase in losses (through the elctricity network) – and the fact that you will be competing with all thouse households that will be generating electricity at the exact same time…

    As the sunpower CEO said – all scales will be needed!

    • Bob_Wallace 6 years ago

      I doubt thermal is going to be able to compete head to head with PV. Thermal is probably going to have to store their heat and sell into peak hours once the Sun has dropped out.

      But they are also going to be competing against “generic” storage. Thermal storage is only going to cycle once per day. Battery/hydro/CAES storage can cycle twice, once to bring late night wind to early morning and once to carry PV to afternoon/evening. The more often storage can cycle, the better its economics.

      Of all the renewable technologies thermal solar seems the most ‘iffy’ to me. (Probably should put wave into that box as well.)

    • Miles Harding 6 years ago

      Yeah Mick!

      Too much “Master Chef” – the world is hooked on manufacturing a dichotomy where none exists.

      Add Solar thermal, Hot Rock, Tidal, Wind, Nuclear, Hydro and anything else we can think of as part for the mix. Use where appropriate.

      I think that backup gas burners for a solar-thermal power plant are a great idea if it makes a project possible.

      In addition to the supply side, the consumer must be reinvented**. In a renewable powered society, much less energy will be available overall and it may not be possible to run at full power on some days so activities may have to be curtailed.

      ** Like the 6-star energy efficient house, the consumer benchmark is well off what is readily attainable and likely necessary in a non-fossil fueled world.

      • Bob_Wallace 6 years ago

        ” In a renewable powered society, much less energy will be available overall”

        I see no need for that being true. We can install enough capacity to give us all the energy we want. It will be quicker and cheaper to get clean if we cut our usage with efficiency, but there’s no need to downsize our lifestyles.

  2. Petra Liverani 6 years ago

    Storage for PV is too costly at the moment so if we want to store energy which we need to be able to do to go 100% renewable we need large-scale CSP+ (Concentrated Solar Thermal Power plus molten salt storage). While other countries such as the US, Spain, Chile, India, Israel, Algeria, Egypt, Tunisia, UAE and South Africa are pushing development of CSP we are lagging and we’re tending to build plants that are pre-heaters for coal-fired power which is obviously not the right way to go. We need to step up now and build CSP+ to replace the dirty coal-fired plants in Port Augusta – see petition at http://www.communityrun.org/p/rpa

    • Bob_Wallace 6 years ago

      Eos Systems claims to be able to store for $0.10/kWh. That’s not a shabby price.

      Spain seems to have a new non-subsidized PV farm going up for $1.41/watt. That’s some cheap PV and the price will go lower.

      Thermal with storage is going to face some stiff competition.

      • derekbolton 6 years ago

        If Eos come anywhere near what they claim it will be a most welcome advance, but as yet it’s hard to judge how real this is. The pilot with Con Edison is not due to start until 2014.

        The perfect can be the enemy of the good: we can’t keep waiting for the next breakthrough.

        • Bob_Wallace 6 years ago

          I agree. Nothing is real until it is proved.

          But in the case of Eos they have six sizable grids signed up to test their batteries. That suggests that they have made an impression with what they’ve shown so far.

          http://www.green-energy-news.com/nwslnks/clips713/jul13022.html

          I don’t think we’re waiting. The are multiple new pump-up and CAES projects underway in the US. Pump-up, if frequently cycled should be less than $0.10/kWh but it takes time to build and it’s harder to site.

  3. JohnRD 6 years ago

    The solar thermal power plants proposed in the BZE stationary energy plan have auxiliary molten salt heating. This is a very cheap way of providing back-up since all it takes is a burner. What this means is that these solar thermal installations will supply reliable power on the rare occasions where the sun doesn’t shine and the wind doesn’t blow for days on end.
    Back-up for solar PV will be a lot more expensive.
    In the short term solar thermal will probably be competitive as a source of power for the peak demand period late afternoon early evening.

  4. Beat Odermatt 6 years ago

    The energy supply of the future must be a mix of alternatives, may it be geothermal, solar, wind and or high efficiency fossil fuel (ceramic fuel cells). I am surprised knowing that our Governments still pump hundreds of Millions into a dying car industry instead of helping innovation of new opportunities.

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