We recently reported on the proposed Palen Solar Electric Generating System and its potential to be the last concentratedsolarpower (CSP) project to ever be approved and built in the U.S.
In September, the California Energy Commission approved the Palen Solar Power Project, after scaling down the concentrated solar project from two 750-foot, 250-megawatt towers to one tower on a smaller piece of real estate. Then we reported that the project was not to be built -- Palen Solar Holdings had formally withdrew its petition, according to KCET's website.
The situation has changed again, with Abengoa agreeing to a deal "under which Abengoa will acquire BrightSource Energy's interest in the Palen Solar Energy Generating Station (PSEGS) project," according to a release. Financial terms were not disclosed
The sole developer will now be Abengoa, which will use a molten salt thermal energy storage system in the design. Abengoa will have to submit its new plans to the CEC.
The Palen project has a history:
- In 2009, the 500-megawatt CSP facility was planned based on solar parabolic trough technology
- In 2012, the project was transferred from bankrupt Solar Millennium to BrightSource Energy
- BrightSource formed a joint venture with Abengoa Solar to develop the site using BrightSource’s solar power tower technology instead of trough technology, albeit without thermal storage capability. Spain’s Abengoa Solar has already built 743 megawatts of operating CSP tower and trough projects.
Permitting, which is always challenging in California, might have been a bit easier because Palen is in a Department of the Interior Solar Energy Zone in Riverside County, near California's Joshua Tree National Monument.
The shadow of Ivanpah
On the subject of CSP power towers, earlier this week we published Pete Danko's article on the output of the Ivanpah Solar Electric Generating System in California's Mojave Desert. He reports:
The Mojave Desert plant, built with the aid of a $1.6 billion federal loan guarantee, kicked off commercial operation at the tail end of December 2013, and for the eight-month period from January through August, its three units generated 254,263 megawatt-hours of electricity, according to U.S. Energy Information Administration data. That’s roughly one-quarter of the annual 1 million-plus megawatt-hours that had been anticipated.
Output did pick up in the typically sunny months of May, June, July and August, as one might expect, with 189,156 megawatt-hours generated in that four-month period. But even that higher production rate would translate to annual electricity output of less than 600,000 megawatt-hours, at least 40 percent below target.
Another sign of the plant’s early operating woes: In March, the owners sought permission to use 60 percent more natural gas in auxiliary boilers than was allowed under the plant’s certification, a request that was approved in August.
Danko reports that a Platts article "broke new ground when it highlighted Federal Energy Regulatory Commission reports on second-quarter electricity sales from Ivanpah’s three units (from Units 1 and 3 to PG&E, and from Unit 2 to Southern California Edison; they can be seen here, here and here). The sales totaled 133,807 megawatt-hours, and at an average price of $167.85 per megawatt-hour, that generated $22.46 million in revenue."
"That relatively small output, combined with the project’s $2 billion price tag, could no doubt hurt all three Ivanpah owners. But BrightSource, despite having the smallest stake -- 20 percent, according to Platts, compared to NRG’s 50 percent and Google’s 30 percent -- might suffer the most as it tries to sell its technology in a market where cheap and bankable solar PV appears to be winning the day," wrote Danko.
Wildlife and environmental concerns
The CEC's preliminary decision acknowledged that the Palen project will cause "significant unmitigated impacts to biological, cultural, and visual resources," but suggests that the benefits outweigh those environmental issues. CEC staff have reported that Palen will pose a greater risk to bird life than BrightSource's Ivanpah project.
The Desert Sun's Sammy Roth reports, "Palen's approval is sure to anger environmental and Native American groups, which have vigorously opposed the project," adding, "Seth Shteir, California desert senior field representative for the National Parks Conservation Association, said in an email that Palen's approval 'is as dangerous as it is disheartening for wildlife, scenic vistas and our responsible renewable energy future.' He said that the project will be located directly underneath the Pacific Flyway, a migratory bird pathway a few miles from Joshua Tree National Park, and that it will kill eagles, raptors and songbirds. Shteir added, 'The Palen project would also mar Joshua Tree National Park's pristine undeveloped vistas and cause light pollution that would harm the park's clear, dark night skies.'"
CSP in the U.S.
The U.S. installed 517 megawatts of CSP in Q1 2014, more than the 410 megawatts installed in all of 2013, according to GTM Research.
Recently completed CSP projects include Abengoa’s 280-megawatt Solana parabolic trough project in Arizona with six hours of storage, NextEra’s 250-megawatt Genesis solar project, and BrightSource Energy's 370-megawatt Ivanpah solar power tower in California’s Mojave Desert. GTM Research says "the next notable project slated for completion is SolarReserve’s 110-megawatt Crescent Dunes plant, which entered the commissioning phase in February 2014." Crescent Dunes is a solar power tower outside Tonopah, Nevada, with ten hours of molten salt storage and a PPA from NV Energy.
Can CSP compete with PV?
As GTM Research reports, "Declines in PV module costs have undercut trough technology and put it at a significant cost disadvantage. Since the beginning of 2013, CSP projects totaling 1 gigawatt have been suspended, and an additional 305 megawatts have been delayed."
Firms such as Areva, Siemens, Sopogy and Infinia have exited the CSP business. Abengoa still maintains that declining capital costs and improved efficiency levels will make CSP competitive with combined-cycle gas turbines on cost, efficiency and utility by 2020.
Other CSP firms include eSolar, which has attempted a pivot to enhanced oil recovery (see GlassPoint), along with BrightSource.
GTM Research solar analyst Cory Honeyman said in an earlier email, "The outlook for CSP remains uncertain, given the technology's limited cost reductions and the early-stage permitting challenges seen over the past few years. Meanwhile, utility-scale PV projects have pushed the boundaries of competitive pricing for solar, with contracts signed between $50 per megawatt-hour and $70 per megawatt-hour."
Recent proposed bid prices for CSP projects are more than three times the price of photovoltaics.
Honeyman adds, "With the federal ITC scheduled to drop off at the end of 2016, CSP faces the added challenge of landing new contracts in California with start dates several years down the line. Taking all of that into consideration, the outlook for CSP will depend on on commercializing innovations that reduce hardware costs and yield ancillary benefits, including CSP paired with storage."