By John Addison (4/8/11)
Like a castle under siege, Solar Power 2007 was such a hot event that registration had to be closed a week prior to the conference opening in Long Beach, California. Over 12,500 people attended last week. There was enthusiasm for high growth and technology advancements in photovoltaics (PV) and in large-scale concentrating solar power (CSP).
In 2006, PV grew over 40% to $20 billion in revenue and over 2,500 MW of new solar power. Renewable Energy World. The European Photovoltaic Industry Association (EPIA), forecasts a €300 billion industry by 2030 which will meet 9.4 per cent of the world’s electricity demand. By 2030, solar is forecasted to be the least expensive source of energy in many sunny regions of the world.
In the last 12 months, over 40% of PV installations were in one country – Germany – where high feed-in tariffs make it financially compelling to sell solar power to the electric utility than to buy power from the utility. Some presenters argued that even in select U.S. markets, such as Hawaii, subsidized solar is at price-parity with grid delivered electricity.
PV prices have fallen 90% in the past twenty years; 40% in the past five. This is good news to counter a hot-climate future as solar prices drop and coal prices increase.
The PV growth rate would be higher, but polysilicon will be scarce through 2010 according to most forecasts from the conference’s CEO panel. Polysilicon supply is expected to triple by 2010 from 2006 capacity. The shortage has also been a driver of technology that delivers the required electricity output with less silicon. These technologies include thin film, high efficiency PV, organic, concentrating PV (CPV), and balance of system improvements.
World leader, Sharp (SHCAY) is participating in all these technologies. Sharp continues with market share leadership, despite little growth due to the polysilicon shortage. Sharp plans to bring online new capacity to maintain leadership. Q-Cells (QCEG.F) and Kyocera (KYO) have taken market share from Sharp with their high growth. Suntech (STP) wants to take advantage of China’s low cost structure and vast market to surpass all.
First Solar (FSLR) has the cost to beat with its cadmium telluride (CdTe) alternative to polysilicon. First Solar’s (FSLR) production costs are $1.25 per watt of generating power vs. $2.80 for traditional solar systems. In the next few years, First Solar plans to be the first to achieve $1 per watt. This year, First Solar did not have an exhibit at Solar Power 2007. It is backlogged for several years, with contracts for $4 billion through 2012. Other cadmium telluride producers are in early-stage mode.
Public utilities had a record presence at Solar Power 2007. Many are mandated to increase their renewable portfolio. For example, the California RPS program requires that by 2010, 20% of their electricity will be from renewables. By 2020, it must be at least 33%. SB1368 closes California to coal produced electricity unless CO2 sequestration is used. This leaves California utilities highly vulnerable to the price of natural gas, providing an added incentive to diversify to renewables.
Utilities are especially interested in large-scale CSP plants delivering 10 to 600 MW. Four GW of CSP is being installed globally. Southern California Edison and San Diego G&E have contracted for 500MW with Stirling Energy Systems. This large-scale plant will include 20,000 curved dish mirrors each concentrating light on a Stirling engine. Other large-scale plants in Europe will also provide hours of thermal storage so that plant output can match the peak load demands of utilities. This counters the utilities’ concerns about intermittency of PV and wind. CSP costs are projected to drop to 8 cents/kWh, making it competitive where coal and natural gas greenhouse gas producers must buy greenhouse emission credits.
By 2010 major utility PG&E will meet its 20% target of delivered electricity from clean renewable energy. This will include 553 MW of concentrating solar power (CSP) from a new Solel project. When fully operational in 2011, the Mojave Solar Park plant will cover up to 6,000 acres, or nine square miles in the Mojave Desert. The project will rely on 1.2 million mirrors and 317 miles of vacuum tubing to capture the desert sun’s heat. It will be the largest CSP project in the world. Solel utilizes parabolic mirrors to concentrate solar energy on to solar thermal receivers. The receivers contain a fluid that is heated and circulated, and the heat is released to generate steam. The steam powers a turbine to produce electricity.
FPL Group announced $2.4 billion investments in CSP and smart-grid technology. The planned investment includes up to $1.5 billion in new solar thermal generating facilities in Florida and California over the next seven years, and up to $500 million to create a smart network for enhanced energy management capabilities. FPL plans to build 300 MW of solar generating capacity in Florida using Ausra solar thermal technology. The company recently received a $40 million in funding from Silicon Valley venture capital firms Khosla Ventures and Kleiner, Perkins, Caufield & Byers (KPCB).
Ray Lane, a Managing Partner at Kleiner Perkins gave a compelling opening keynote speech at Solar Power 2007. He declared that there is no energy shortage, because there is no shortage of sunlight. Mr. Lane showed a map of 92 x 92 miles of desert in California and Nevada. Using CSP, that unoccupied area could generate enough solar power to meet all power needs in the U.S. Challenges of such a project include multi-billion dollar investment in high-voltage lines to carry the electricity to remote cities. Storage is another major challenge. Although these investments are significant, the potential will drive strong CSP growth.
Expect solar to continue with its historic 35% growth over the next decade. Forecasts for solar supplying over 9% of the world’s energy needs by 2030 are achievable.