UTILITIES AND SOLAR POWER PLANTS

Hedging bets: Why the utilities can’t afford to ignore CSP
Rikki Stancich, 23 November 2009 (CSP Today)

"CSPToday: …[W]hat policies need to be in place to support the continuing development of CSP in the US?..."

[Dr Fred Morse, Chair, Utility-Scale Solar Power Division/U.S. Solar Energy Industries Association, and co-Chair, Western Governors’ Association Solar Task Force, and senior US operations advisor, Abengoa Solar Inc, and former Executive Director of the White House Assessment of Solar Energy as a National Energy Resource and senior executive in charge of solar R&D and market development, U.S. Department of Energy:] "…[A] variety…including financial incentives, siting & permitting, transmission planning, and a cap on greenhouse gas emissions…[T]he most important is access to long-term, low-interest financing, which is what built our hydro resources many decades ago, to the long-term benefit of the country…[N]o public land has been approved for solar project development, despite a long history of fossil fuel development…[so] SEIA is working with the Bureau of Land Management and other agencies to ensure there is a clear and thorough review process…Transmission is another key issue…Finally, setting a price on carbon will be important for utilities and consumers to realize the long-term value of solar and other clean, renewable energy resources."

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"CSP Today: What is likely to kick-start project financing in the US? Does the loan guarantee program hold any promise for CSP?…[Morse:] There was a meltdown in the financial markets…But when you speak about a CSP plant in the hundreds of megawatts, you are talking about US$1 billion…So the U.S. Congress included a federal loan guarantee in the stimulus bill…[M]ost CSP developers believe this federal loan guarantee program is one of the keys to getting CSP projects built in the U.S.

"CSP Today: What challenges exist in the US, in terms of transmission, and what solutions are emerging?…[Morse:] Our power grid is out-dated and requires new lines to connect solar-rich areas to growing population centers…Just as our highway system was constructed through a national planning effort, we need to plan for our transmission needs on a regional and interconnection-wide basis…[S]preading the costs of new transmission across an entire interconnection or region will make it much easier to finance…Finally, the Federal Energy Regulatory Commission should have back-stop authority to approve the siting of new transmission…"

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"CSP Today: Is thermal storage likely to become a pre-requisite in US CSP projects?…[Morse:] Thermal storage is profoundly valuable to the utilities…Abengoa Solar's project in Arizona does incorporate thermal storage. But it would not have been selected without it; the utility (Arizona Public Service) required it…[A] solar resource during the daytime is of little value to the utility in terms of managing peak loads. They need energy during the morning and evening peaks…Thermal energy storage allows a CSP plant to meet that demand.

"CSP Today: What is the ceiling for CSP in the US? What will its overall share of the electricity generated be and how central will it be to energy strategy?…[Morse:] Today, there are about 8,000 MW of CSP projects with signed PPAs. That means the utilities who signed those PPAs accepted the price for electricity generated by those CSP plants…[I]f CSP is already competitive enough to get PPAs for 8,000 megawatts signed, I believe that CSP will continue to capture a growing part of the future electricity demand in the Southwest and, with adequate new transmission, begin to meet electricity demand across the United States..."