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.