Yale Environment 360: U.S.-Spain Energy Companies Plan World’s Largest Solar Towers

e360 digest

21 Mar 2013: U.S.-Spain Energy Companies

Plan World’s Largest Solar Towers A U.S.-based company that will soon finish construction of one of the world’s largest solar thermal power plants in the Mojave Desert, is now looking to build an even larger plant in Southern California. BrightSource Energy, which is expected to begin producing up to 370 megawatts of electricity Click to enlarge

via e360.yale.edu

Comments

[Doug Poetzsch]

I think it is a great sign for the solar industry that such a large scale project has been approved. It is a good sign for the industry that a large company thinks it will be profitable to build a large scale plant in California. Solar energy producers have struggled to compete in recent years due to cheap sources of energy coming from coal and natural gas. As coal and natural gas prices rise, solar becomes a more profitable option. Hopefully this trend continues and we are able to take more advantage of solar as a carbon-free energy resource in the coming years.

[Will Andrews]

It will be interesting to see how pressure from one of the world's largest solar thermal power plants to build another larger power plant will effect projects of smaller alternative energy producing companies. It is possible that the greater competition will spawn more accessibility in the realm of alternative energy power plants. It is a good sign that companies are aware of the importance of developing cleaner power plants.

[Ellison Johnstone]

It is great to see that BrightSource Energy and Abengoa Solar are working together to produce a new massive solar plant in California, especially as it represents an international force working toward increasing renewable energy use. I think it is extremely important that cooperation like this, from companies based in different countries, quickly increases as we continue to try to reduce climate change.
The new plant planned for California sounds like it holds a lot of great potential for reducing carbon emissions. The only problem that stands out to me is that, even with its massive size, it only provides 200,00 homes with electricity. Although this is obviously a great start, it only puts a small dent in energy use in California, let alone the entire United States. As we have talked about, it is going to take a great effort to really curb climate change, with lots of different kinds of renewable energy and a combination of approaches. This plant is definitely a step in the right direction, and hopefully will become a source of inspiration for other renewable energy projects in California and around the world.

[Marissa Gubler]

This is great that they are building large solar plants in the US. It is really nice that the US and Spain are both developing a solar plant, as this could be an example of successful international carbon mitigation and lead to facilitating international cooperation concerning mitigating carbon emissions. If these solar plants are successful, they might serve as an example for future energy development and help further the shift towards cleaner alternative energies. Not only will these (and hopefully many future) plants help reduce carbon emissions, but the construction of these plants will also create jobs at a time when unemployment rates are fairly high, thereby possibly having positive effects, such as, reducing crime and stresses on welfare systems.

[Wen Xiang Chuah]

While I'd like to echo the sentiments expressed above, I can't help but feel that the solar technology utilized in the above article is a little...delicate. Presumably mirror alignment will be managed mechanically, which opens up a host of mechanical issues, not to mention the sheer sustainability of the concept. In addition, the natural limitations of solar (inconsistent, only while sunny, etc) technology remain impediments to widespread utilization.

From a financial perspective, I wonder how much of this green technology has been subsidized by the government - as seen previously in companies like solyndra, solar remains a relatively risky proposition as a business model.

[Alex Fernández]

This project is undoubtedly taking a step towards more sustainable energy, but the high costs and regulatory hurdles of this emerging sector worry me. I am also concerned about the efficacy of placing the solar power plant in Southern California. The company has had great success in the Mojave desert- but are the two places necessarily comparable?

Still, if it is possible, the idea of powering 200,000 households and preventing 17 million tons of carbon emissions during the life of the plant sounds outstanding. I am also thrilled to learn that California state regulations will require that one-third of their power come from renewable sources by 2030. For once it seems policy is heading in the right direction.

[Kate LeMasters]

I echo both the excitement and worry from previous comments that will come from building this solar power plant in California. It undoubtedly marks a movement from large firms to more sustainable energy practices, but it does not indicate a widespread shift. I agree with Wen that possible subsidies by the government should be looked into, at least to cover overhead costs. The long-term benefits of these technologies outweigh the costs, and solar energy specifically has mostly upfront costs. That being said, some sort of loan system could be implemented by the government as companies shift to solar power. The company would then pay providing a loan to cover the cost back in a sufficient time frame as it begins to reap the awards of having solar power rather. This would remove the disincentive in a more expensive energy source for companies.
I agree with Alex that we must look at the site-specific characteristics of where this facility is being built. Just because it worked in the Mojave desert does not mean that it will work in Southern California. More importantly, that definitely means that it will not work in Washington or other areas of the Pacific Northwest with low amounts of sunshine. While this seems obvious, it must be pointed out from a practical perspective.
That being said, there is an image in Kahn’s book that emphasizes the shift over time to different energy resources. As time goes on, the costs increase for coal and oil, and we will eventually end up in an alternative energy world. This company is doing a successful job in transferring to alternative sources and other companies should follow step, although that does not necessarily mean through solar power. Other alternative resources, such as wind power, also have large upfront costs that are short-run, so a loan system could be implemented here as well. I have by no means addressed the nuances of a loan system, but it could be a possibility when incentivizing more firms to switch to alternative energy resources on a large scale.

[Ellen Gleason]

One thing that stood out while reading this piece was the proximity of these two large-scale projects to one another in Southern California. Energy companies, especially when partnering between two continents, must be focusing on the most cost-effective strategy when deciding where and in what capacity to undertake projects like these. I would be interested in knowing exactly what incentives California provides, whether tax-based or otherwise, in order to promote alternative energy projects like solar towers. Like Kate said, not all states have the amount of annual sunshine necessary for large solar plants. However, if other states could adopt legislation or tax changes similar to those implemented in California, would we see an increase in the number of alternative energy plants elsewhere in the United States?

[David Fishman]

This article serves as a good example of how legislation can impact private market decision making and incentives. The article points to high costs and regulatory hurdles as a principle hindrance for solar powered energy’s proliferation, yet, since California has mandated that one third of the power generated by utility companies must be derived from renewable sources by 2030, investing in solar suddenly has some benefit despite its lack of relative profitability. California, along with the entire Mojave Desert, has the benefit of an abundant physical solar resource stock, which can ensure stability from its solar thermal power plants, making the general area optimal for such capital investments. According to the article, the two towers being built in Riverside, California could generate approximately 200,000 household’s electricity demands per year, in addition to preventing 17 million of additional tons of carbon emission.

Undoubtedly, this is a step in the right direction, but, in order to envision solar thermal towers’ proliferation throughout America, one should look at the relative market costs. For example, the Tennessee Valley Authority can produce enough coal-based electricity for 700,000 households at a lower cost. I am not saying this makes coal the preferable option, I am merely stating, that: if not for the California legislation mandating that one third of utilities power needs to be derived from renewable sources, these $2.6 billion capital projects will not be incurred throughout America. Unless, legislation is passed that alters the relative costs. If we, as a society, deem the benefits of sequestering 17 million tons of carbon emissions as something of relative value, then we need to implement a legislative mechanism to account for that value. Say a carbon tax or emission voucher system.

[Nick Cianciolo]

The cost of this project is staggering. $2.6 billion to power a mere 200,000 homes? That is $13,000 per home. Now this does bring up a few questions... First, how long is the life span of this plant? If the $13k per household cost is spread over a 50 year time period then it is not astronomically high. Second, how much does it cost to maintain this plant and provide the actual electricity to homes excluding the $2.6 billion start up cost? This could make economical sense if the maintenance and power delivery costs were extremely low, however, I have not gotten that impression from things discussed in class. Another issue to bring up is that California is already more or less bankrupt and is seeing capital flight at unprecedented levels. Can they really afford to be financing projects like this? It is a cost-benefit calculation that our country and world need to answer; California provides a good example of how hard that can be when they have failing inner city schools yet are spending massive amounts on green energy.

[Tyler Voorhees]

I’m impressed by the scale of these renewable energy projects, and the signs of international cooperation between a Spanish and American company. Like many of the other posters, I worry about the location. I assume that the locations must have been chosen with good reason, but will there be enough sunlight throughout the year the make sure the plants provide power consistently? I would also be interested to hear about any studies on the cost of delivering the energy to consumers in California.
I thought the last sentence of the article was also interesting- California is requiring utilities companies to use 30% renewable. by 2030. I already imagine California has maxed out available hydro power possibilities so it will be interesting to see if this will be a cost effective way for them to meet that target and how consumers will react to possible price increases. Is the government going to have to provide subsidies for this to be profitable? It’s also worth noting that as technology increases, I’m sure these solar projects will get bigger and cost will be less of a concern.

[Avery Gant]

While I agree with Nick that the start up costs seem extremely high, I do not believe the bankruptcy incurred in California should have a large saying on the construction of the plant. BrightSource energy does not appear to be financed by the state government of California, so they are simply building what they believe will be an economically successful source of energy. The new regulations in California should push these expenses onto energy firms that must either must develop a large amount of renewable energy plants, or close existing plants to reach the 30% limit. I think this article really shows the importance of applying an economic mindset to environmental issues. By requiring a certain portion of the energy sector to be renewable, California has created a new market in their state. I would not be surprised to see larger energy firms continue to expand into this new renewable market. A downside is that these solar plants appear to have a very high start up cost, so it will likely exclude smaller firms from entering. I believe that CA has made a good economical decision with this litigation; and has not failed to analyze the costs as Nick suggests.

[Maggie Antonsen]

This sort of technological advance is really interesting. For a term paper in my other class I have been reading about Norway’s energy sector. One of the ways Norway has been able to avoid the resource curse can be contributed to its use of hydropower for electricity. Not only is it more economically friendly than petroleum, but it uses some of the natural advantages associated with Norway’s many waterfalls. I think this is very similar to California using solar power, as California is one of the sunniest states in the US, with on average 9.2 hours of sunlight a day:

http://www.eldoradocountyweather.com/climate/US%20Climate%20Maps/Lower%2048%20States/Sky%20Cover%20-%20Visibility/Mean%20Total%20Sunshine%20Hours/Gallery/mean-total-sunshine-hours.html

[Katja Kleine]

I was happy to see that there has been a movement towards solar energy in California. Despite the large startup costs, there are likely even more benefits than mentioned in the article. I agree with Avery that the California legislation has actually done great things for the state of California by making it necessary and possible to create new sources of renewable energy. The construction of this plant and maintenance will be helpful to the economy by making jobs and keeping them there in California, especially if other companies are leaving. Although I would like to know an answer to a point Nick brought up. What is the lifespan of a plant this size? How often would the towers and panels need to be replaced? These sort of questions have a large implications for how costly this endeavor actually will be.

[Scott Diamond]

Although the planned construction of solar power plants in the western portion of the country is promising, I have some serious doubts regarding how these projects would realistically produce energy on a large scale. The article alludes to high costs and regulatory issues as the two main issues surrounding solar energy, but another issue worth mentioning is the “not in my backyard problem”. Based on our class discussion about wind farms in class, it seems as though one of the biggest hurdles will be finding spaces within the US that would be ideal tracts of land for the solar power plants that do not upset local citizens. These wind farms only provide power to 200 thousand households, meaning that thousands of these plants would be needed to power a small portion of the country. The public may seem to be receptive to this project now, but we can expect fierce opposition to these plans when it comes closer to implementation. Overall, solar energy appears to be a promising albeit pricey alternative to traditional energy sources.

[Chris Nault]

Although the price of solar energy is still very high compared with conventional sources of energy, I believe that this investment will pay off because it is located in California. As the article mentioned, California lawmakers are looking to make regulations that will force the state's electric utilities to deliver one-third of their power from renewable sources by 2030. I'm not informed as to similar regulations in other states, except for North Carolina (who passed a law in 2007 requiring its electric utilities to supply 12.5% of its power from renewable sources by 2021), but it seems as if California is one of the most aggressive states in the country in implementing policies to require renewable energy usage. In addition, I believe it is beneficial that the US company completing this project is partnered with a Spanish company because Europe has invested a lot in renewable sources of energy as the movie "Switch" showed, especially Spain's investments in solar power.

[Ques0burrito]

In order for California to meet its target of deriving one-third of its energy from renewable sources by 2030, utility firms have been looking to expand into new realms. The proposed plan to build two of the world’s largest solar towers constitutes a step in the right direction, however at $2.6 billion for 500 MW leaves the cost per MW at $5.2 million/MW. Two new 1,100 reactors are currently under construction at the Virgil C. Summer Nuclear Generating Station in South Carolina—the first reactor to be built in the US in thirty years. The $9.8 billion dollar project equates to a cost of a little over $4.45 million/MW. Comparatively, these two projects illustrate that while alternative energy sources may be feasible on a large-scale, they fail to be cost competitive with other forms of energy. Furthermore, $5.2 million may be a lower-bound estimation, as the article is unclear whether the figure of $2.6 billion includes planning, regulatory related, and other costs. Overall, the implementation of these solar “power towers” in arid, high-sun exposure locations looks to be a wise investment. As such installations’ costs fall and efficiency rises we are likely see much more of these power plants.

[Gyung Jeong]

I am really glad to hear that the company is planning to build another 500-megawatt plant in California. If this kind of big company starts to build solar energy plants then it is pretty obvious that other companies will follow the same path. Although, as the article suggests, there are a lot of obstacles, such as high costs and regulations, this plan will ultimately reap more benefits than costs. I think it is a good idea that they decided to build the plant in California where by 2030, it will require that they deliver 1/3 of their power from renewable sources to the state. It is beneficial to both of the company and the state. In addition to its profits, if the state government relieves its strict regulations for the companies to build solar plants and the company supplies electricity, they can save the cost and help each other. I hope to see more businesses and governments working together.

[Eric Notari]

The growth of the capability of plants like these is remarkable, now up to 500 MW. While this number is great, it is still not enough. That is enough for only 200,000 houses, not even close to 1/3 of the total power for California. For this to become more widespread, we must continue to develop better technology and techniques for the use of alternative energy. As stated above, another problem with widespread expansion of solar plants like this one is not only the proper location, but also getting the approval of the people in the area. We have already seen and read articles about the reaction to wind farms especially in the northeast. Thus, the only way for this to become more widespread is for more efficiency in the systems in use. However, I am not trying to be negative about this development, I think it is a great start, and California deserves a lot of credit for making a commitment to this shift.

[Daniel Molon]

This article exemplifies the creativity of companies in the pursuit of achieving goals set by the government. State regulations that would require 1/3 of California’s utilities to come from renewable energy sources helped contribute to companies, like BrightSource Energy, to build such large solar plants. BrightSource Energy’s plans to build the Ivanpah plant will power 200 thousand homes and prevent 17 million tons of carbon emissions in its lifetime. This ambitious project could be the start of large scale renewable energy plant building that could eventually eliminate carbon emissions from home utilities. This would greatly reduce the total amount of carbon emissions, as space heating and electricity for home use are significant portions of the use of energy and cause of carbon emissions. If more states had initiatives, like California’s 1/3 of utilities coming from renewable energy sources by 2030, then this sort of development in the wide use of renewable energy would be more prevalent throughout the country.