SOLAR POWER PLANTS TO DO OR DIE

Will 2011 close the chapter on large-scale CSP? Andy Skumanich, CEO and founder of Solar Vision consulting, explains why CSP is unlikely to emerge victorious from the battle of the solar technologies.
Rikki Stancich, 3 December 2010 (CSP Today)

[Andy Skumanich, CEO/founder, Solar Vision consultants:] "I think it is do or die time, a turning point; now is the time that CSP needs to demonstrate its viability in the US…[Investors and financiers] want proof, there is a fear factor, and they do not want to be funding huge projects where they don’t have a strong confidence…Some of them are just outright off CSP – and CPV…PV is going so fast that it really is…taking over…"

[Andy Skumanich, CEO/founder, Solar Vision consultants:] "I can’t over-emphasize how 2011 is the year of execution…[It] is the time to really demonstrate the commercial viability of CSP…or the capital markets will start to walk away…I would say there is a window of perhaps a year, where the projects that are in the pipeline are showing real progress, real functionality, meeting the cost targets…Brightsource and Solar Reserve are doing a good job of this…"

And for the investor? (click to enlarge)

[Andy Skumanich, CEO/founder, Solar Vision consultants:] "…[CSP] is behind the curve with PV…[It must] demonstrate its value, and that value is storage and hybridization. The problem is that PV and battery combinations are really nipping on CSP’s heels, because there are now battery solutions that are on the order of roughly $3/watt - NGK in Japan may have a battery solution that is $3/watt…$6/watt, which places you at the low-cost side of CSP…[T]here are now two paths to the solar energy storage solution…The market is brutal. It will take which ever option is cheaper, and which ever technology has the right functionality. CSP needs higher DNI, higher light requirements. It has higher operations and maintenance costs. Likely, it would likely be the PV battery arrangement that wins out."

[Andy Skumanich, CEO/founder, Solar Vision consultants:] "…[There may be] cost efficiency of achieving economies of scale with CSP, but when you start getting to scale, you can also run into big problems. Labor considerations, permitting and multiple jurisdictions can become more complicated…[A] modular micro grid approach to CSP - like Sopogy’s – is a great one…There is a hidden market of micro grid installations. They are nominally off grid, but they are really more micro or island grid arrangements because there is not the infrastructure in places like India that can support a full grid connection…The concept is similar to a cell phone tower model, instead of putting up landlines for the network, you can put up cell towers, and you are able to achieve the phone coverage. In this case you have ruralised electrification that is done with 1-2MW CSP configurations…[but] you are talking about villages and the government can’t just throw in lots of micro grids."

A middle ground for micro-grids? (click to enlarge)

[Andy Skumanich, CEO/founder, Solar Vision consultants:] "We have done some analysis looking at micro grid opportunities around the world. India, parts of Africa, former Soviet Republic countries, and a large part of South America all have a real opportunity for this micro-grid market. Our estimates are roughly in the order of a GW/year – the PV market this year is in the order of 15 GW, so with micro CSP grids so you are talking almost a 10%…[M]icro CSP developers could really tap into this market. In these areas you can’t put in large scale CSP, for which you need a high level of O&M and where there are high initial costs, so [large-scale CSP developers] would miss that market altogether…[But] the PV-battery solution is the simplest, so in this respect CSP is still not a front runner for this important developing market."

[Andy Skumanich, CEO/founder, Solar Vision consultants:] "…[We will begin to see] product differentiation…CSP becomes one of a type of products for niche segments of the market… [like] PV panels….optimized for Germany…[and those] optimized for Morrocco…for California, and so on…You would have macro product differentiation, where CSP starts getting relegated to Spain or places that have infrastructure, capital and a market that will accept it, but it won’t have a broad implementation. So it won’t go away, but it may start getting marginalized."