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5 Thoughts on U.S. Solar Thermal from Abengoa Solar's Fred Morse

With so many venture-backed startups looking to build solar thermal power plants in the U.S. desert, we thought it would be interesting to hear from one of the more well-established — and well-capitalized — players. Abengoa Solar is the solar arm of the decades-old Spanish renewable energy and engineering giant Abengoa, which did 3.21 billion euros ($4.78 billion) in sales in 2007. We chatted with the company’s senior adviser to the U.S., Fred Morse, who shared with us these five thoughts on the U.S. solar thermal market.

Parabolic Troughs For the U.S.: Abengoa Solar is planning to only use older parabolic trough technology for its U.S. solar deals — at least for now. The policy framework and utility contract needs of the U.S. market require that the solar thermal technology be “proven,” “bankable” and “reliable,” Morse explains, and with the older technology there is the benefit of knowing not only that it works, but for how long it will last and at what cost.

That’s not to say that Abengoa isn’t also working with more cutting-edge solar thermal technology, like that of Linear Fresnel (used by Ausra). And Abengoa Solar is currently building a solar power plant using Power Tower technology in Sevilla. Because Spain doesn’t use utility contracts and has feed-in-tariff incentives, the Power Tower tech can be financed more easily, says Morse.

Fastrack for Solar Applications: On the subject of the Bureau of Land management’s recent solar application freeze and subsequent unfreeze, Morse suggests that the Bureau could process applications more effectively and efficiently by fastracking solar projects with deadlines. Those with impending deadlines could “move to the head of the line,” says Morse.

No ITC, No Arizona Solar Project: Abengoa Solar will not, Morse confirmed, build its planned solar power project, Solana, in Gila Bend, Az., unless the ITC is extended. Because the ITC extension is also getting down to the wire (by the end of this year) inaction is already causing delays in the plant’s construction and could cause difficulty in financing.

In fact Morse says the company is already moving slower on Solana because its waiting to see if the ITC will be renewed. The company is also worried that the longer they hold back on any construction steps because of the ITC, the more construction could cost. Solana requires 3 square miles of steel — another Golden Gate Bridge — says Morse, and in the meantime the price of steel keeps going up.

Being Big Has Its Advantages: Morse points out that compared to the other young startups in the solar thermal biz, Abengoa has decades of project financing experience and has an R&D budget of tens of millions of dollars. Between biofuels and solar, Morse said Abengoa spent over $50 million on R&D alone last year, which he estimates is bigger than the DOE’s entire R&D budget for solar thermal.

Goals for 2008: Getting the ITC passed is the first goal, says Morse. Then, assuming that happens soon, Morse says Abengoa Solar will focus on getting the permits and interconnection for the Solana plant. The company is also considering building a mirror factory somewhere in the U.S. Southwest.

8 Responses to “5 Thoughts on U.S. Solar Thermal from Abengoa Solar's Fred Morse”

  1. CTYankee

    Katie,

    Great premise. Too bad that we’re handing the brass ring to another foreign firm. I don’t blame Abengoa, they’re doing what any self respecting company should do… make a profit!

    I can lambaste the domestic investors for funding wild and ridiculous concepts when there are so many rational ways to generate energy from sunshine. By playing the old-boy game, they keep their friends happy while selling the nation out.

    I can also criticize the entrepreneurs for putting forth so much technical crap, but that’s also understandable… chase the $$$.

    The regulations that exist are there to protect the utilities from wholesale disruptions, but there doesn’t mitigate the need for more energy. And there are 100% reliable methods that can assure that the flow of energy into the grid is uninterrupted.

    The greatest threat to continued stability of supply is the economic decisions that can be made to idle a plant simply because the profit margin isn’t thick enough — note: I didn’t say unprofitable

    The BLM is an act of government schizophrenia reversed itself. But there are millions of acres of rooftop & developed land exempt from the BLM that can successfully covered with solar collection. Covered, not converted. We can turn rooftops from thermal liabilities into electrical assets.

    While the bean counters certainly feel it’s easier to finance huge projects, we’re seeing the quote/unquote “downturn” of the fledgling industry simply because a few project are hitting a few hurdles.

    There are small ventures that can start to make significant impact with just a few million dollars of capital investment. There are also superior technologies that are ready to explode into production. One company is ready to produce parabolic troughs at >350MW per year, with a capital investment of ~$5MM. There isn’t a mirror factory on Earth that can come close!

    These systems can be optimized in the 50-400kW range, for rooftop deployment on just about any big-box, strip mall, warehouse, office building, school, factory, even parking lots. They can go in ‘turnkey’ and transparently. They will last 20+ years almost without maintenance.

    Each kilowatt (kW) of capacity delivers ~100 kilowatt-hours (kWh) of energy. You buy the capacity once, and you earn the energy forever. The unit pays for itself in from 3-7 years, the rest is profit. And with the rising cost of oil, and other energy sources, It’s easy to see that the payback can only get shorter. Finally there are still incentives available; big-solar seems to need them, we can make do without!

    For more information please visit:

    http://www.solarandthermal.com/

    The Light is Green!

  2. Sol Shapiro

    Right on, Fred. ITC is absolutely needed as the most critical item. With a long term extension, we will get a handle in about 5 years on whether solar thermal will indeed start to become competitive; in all three implementations Fred mentioned – trough, power tower and Fresnel.