U.S. Concentrated Solar Energy Outlook 2006

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Solar energy represents a huge potential domestic energy resource for the United States, particularly in the Southwest, where the deserts have some of the best solar resource levels in the world. In the past, the majority of solar generation was installed for remote-use application. For this application, photovoltaic (PV) panels have been the best-suited technology. As utilities put more interest into solar generation projects, solar thermal technologies, especially concentrating solar power (CSP), are gaining more attention. CSP technologies use reflective materials such as mirrors to concentrate the sun’s energy and convert it to electricity.

Concentrated utility scale power plants provide the lowest cost and most efficient methods for harvesting solar energy. Currently, the U.S. has about 350 megawatts (MW) of proven CSP technology, which has been operating successfully in California for the past fifteen years. Unfortunately, no new utility scale concentrated solar power units have been added in that time period.

Although solar energy is abundant and free, the cost to harness (harvest) it with solar collectors can be significant. As a result, electricity generated from solar energy is currently more expensive than power produced from conventional fossil fuel power plants. However, studies indicate that even at moderate levels of deployment, large-scale solar power could potentially compete directly with conventional fossil fuel generation.

Click on the image at right to view a map showing solar distribution in the U.S. - Courtesy NREL.

While installed costs are at around $2.5-2.9 million per MW, with power generation around $90-120 per megawatt-hour (MWh), the lowest of any solar technology, current goals are to achieve $35-43 MWh by 2025. Cost improvements are expected to come from improved designs, economies of scale, volume production, plus operation and maintenance cost reductions.

Cost reduction realized by wind power is a good model for CSP. The initial cost of wind power was high, but decreased as installed capacity increased. The same trend is expected to occur for CSP.

Recently, a number of Southwestern states have legislated renewable energy portfolio standards, particularly Arizona, California, New Mexico, and Nevada.

In August, after touring a National Solar Thermal Test Facility, President Bush signed the Energy Policy Act of 2005, which produced the strongest national policy for solar power in two decades.

According to a news report by the Western Governors’ Association’s Solar Task Force, the long-term federal investment tax credit and state-based incentives could promote as much as 8,000 MW of solar electric generating capacity by 2015 in the western United States. Deployment on this scale would also bring down solar costs to a point that would be competitive with power produced from fossil fuels, according to the report. The task force envisioned half of the deployment coming from central CSP and the other half from distributed photovoltaic (PV) generation.

According to the Department of Energy, at least 7,000 MW of centralized CSP plants will be built by the year 2020, and possibly much more. At this point, the development activity for CSP is advancing moderately with just under 200 MW scheduled to kick off construction by the end of 2008.

Currently, Arizona Public Service is building the first commercial solar trough power plant , which will be the first constructed in the United States since 1990. The Saguaro Solar Trough Generating Station will have a 1 MW generating capacity utilizing Solargenix Energy solar trough technology and Ormat Technologies’ (NYSE:ORA ) (Sparks, Nevada) power block to convert the solar heat into electricity. This is the first CPS application to take advantage of the low temperature energy conversion advancements made by the geothermal industry. The concentrated rays from the sun will heat a thermal transfer fluid between 250 and 550 degrees Fahrenheit. The thermal transfer fluids are then passed through a heat exchanger to vaporize a secondary working fluid such as pentane. The vapor is used to spin an expander turbine/generator making electricity and is condensed back to liquid before being re-vaporized in the heat exchanger once again. The Saguaro CPS is expected to reach commercial startup in January of 2006.

Solargenix Energy LLC (Raleigh, North Carolina) is developing the largest solar electric power plant to be built globally in the past fourteen years and it will be the third largest solar power plant in the world. Nevada Solar One, a 64 MW solar thermal electric generating plant, located in Boulder City, Nevada, should start construction by the end of the year, with commercial startup in early 2007.

The City of Victorville is working with Inland Energy, Incorporated to obtain a permit to build the world's first hybrid power plant to be located at the Southern California Logistics Airport in Victorville, California. The 500 MW "Victorville Two" project will combine a 450 MW natural gas-fired combined cycle power plant with a 50 MW concentrated solar power (CSP) plant that will both utilize the same heat recovery steam generators to produce steam for the turbine. The CSP plant will boost steam production during the day, effectively boosting the efficiency of the combined cycle process when energy demand is at its highest. The permitting process is expected to be completed by the spring of 2007. The city could potentially start construction before the end of 2007, with commercial startup expected 18 months later.

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