About: Dr.

Andy Skumanich is the ceo and

founder of SolarVision Consulting. He has previously
worked for Innovalight and Applied Materials’ Solar
Division.
Feature article

CSP at a
crossroads
The first solar electric power plants are
still proving their worth after three
decades, so why aren’t we seeing more
CSP reach the development stage?

T
HE FIRST major concentrating solar But it wasn’t until after SEGS III
that the projects were finally able to
power (CSP) plants were built in the
attract investors - including multiple
Mojave Desert, U.S. in 1984 and have eastern U.S. utilities.
been producing over 330 MW since then.
Boom and bust cycles
A well-publicised slump hit the industry Although successful by most
in the nineties, but recently there has metrics, the original company which
been a major upswing in installations, developed the project – Luz – had
to declare bankruptcy. Oil prices fell
and an even bigger increase in project announcements. and remained low through the 1990’s
– construction of new solar plants
However, before we break out The origins stalled. The regressive energy policy
the champagne, as another article The first CSP (parabolic trough) starting with the Reagan administra-
in this issue points out (see ‘Smoke plant came online in 1985 as Solar tion, along with the vagaries of prop-
and mirrors’, page 42), announce- Energy Generating System #1 (SEGS erty taxes, forced the company to close
ments are one thing, what they are I) with a capacity of 13.8 MW. Eight down. However, the investor groups
not is data: everything always takes other SEGS plants were subse- continued to sell electricity to utilities.
longer than the optimistic announce- quently built in the same region of It wasn’t until the mid-noughties
ments indicate, and Projects (and the Mojave Desert, with the last one that new companies again began
even Contracts), are often cancelled. coming online in 1991. looking at innovative ways to gener-
There have been some recent notable The total output of the collective ate large scale solar power, and a
examples of this. set of parabolic trough plants is 354 second cycle of CSP activity began in
One tale of woe is that of a 92 MW. According to Hank Price, one of 2004. Luz Founder, Arnold Goldman,
MW CSP facility that El Paso Elec- the original engineers working on the regrouped his old team, and founded
tric Co. had planned for Santa project, this early work offered BrightSource Energy. In addition,
Teresa in New Mexico. The project the chance not just for technology Silicon Valley venture capitalists gave
collapsed because of difficulties with evaluation, but also the opportunity some substantial funding to new com-
securing financing. to study costs and possibilities for ers such as Ausra and encouraged the
The utility now plans to build a 20 cost reduction. Indeed the cost of renaissance in CSP.
MW PV facility instead. wholesale solar thermal electricity
So the immediate challenge for from the SEGS plants has halved What’s happening now?
CSP is to avoid another bust by turn- from its initial cost of US$0.24kWh. There are now almost 8 GW of
ing the GWs announced into actual Indeed, the original project has CSP projects in the pipeline, com-
GWh of electricity. In other words, been generating electricity for three pared with the 500 MW that will
prove the technology’s bankability decades and has provided 14 TWh of be installed by the end of 2010. This
and capability. energy. project pipeline sits in stark contrast

52 January/February 2011 | Renewable Energy Focus


to recent cancellations of CSP power
plants. So why is so much of this
planned capacity taking so long to
develop? The CSP industry appears at
a crucial turning point.
The “potential” of CSP is an oft-
heard term, and it is true that there
are some very attractive aspects of
CSP – in principle. CSP has two key
positive aspects: It can provide good
energy dispatchability, and it has an
ability for hybridisation. The two ele-
ments are interrelated. CSP can be
configured to have thermal storage
(at a price) and can provide up to 6 or
even 8 hours of post-sun-down energy.
And hybridisation allows the power
plant to have both solar and standard
energy for heating.
In principle, this capability would
allow for 100% capacity – where the
power plant is providing electricity
over the full 24 hour cycle, turning the
plant into a tunable base load resource
- the Holy Grail for renewables.
Storing CSP power
Because of this, there is a signifi-
cant amount of research going into
CSP storage, and efforts are underway
to find a low-cost and flexible solu-
tion. But in the near term at least,
the market doesn’t provide a value for
this storage.
The ability of hybridisation is
important too, because hybridisation
improves the intermittency factor,
the shaping of the electricity, and the
capacity factor.
Again there are some limitations,
however. If solar is paired with a
carbon-based power source it can have
two negative effects: Solar projects
in the U.S. are limited to 2% natural
gas in order to remain designated as
“renewable” - and hence qualify for
support (the SEGS I - IX projects are
limited to 25%.) Secondly, in some
instances the use of a coal-fired plant
being running at less than full capac-
ity (during times of high renewable
generation) can become substantially
less efficient, and actually contribute to
higher air pollution.
Clearly, these issues are much
intertwined. The good news for now
is that the US Department of Energy
(DoE) is ramping up its CSP research,
development, and deployment efforts,
leveraging both industry partners and
the national laboratories. DoE’s goals
include increasing the use of CSP in
the U.S., making CSP competitive in
the intermediate power market by
2015, and developing advanced tech-
nologies that will reduce systems and
storage costs, enabling CSP to be
competitive in the base load power
arena by 2020. In addition, there are
numerous support programs at the
National Renewable Energy Labora-
tory (NREL) for storage projects.
Luz/BrightSource shines again
More good news is that Bright-
Source has broken ground on another
project in the desert at Ivanpah, 40
miles south west of Las Vegas, NE.
The facility, scheduled to come online
in 2012, will have a capacity of almost
400 MW, making it the world’s largest
CSP plant currently under construc-
tion. The project is a combined effort
between BrightSource and none other
than Bechtel (the largest engineering
company in the U.S., which built the
Hoover Dam in 1933). A key element
to this project’s success was securing
a US$1 billion Loan Guarantee from
DoE.
One of the encouraging aspects
to this project is that it was able to
Rather than wait for NRG to get
funding, El Paso Electric switched
to solar PV to meet the State’s
renewable energy mandates.
Feature article
Silver bullet for
CSP? Sopogy
micro-CSP installa-
tion in Hawaii
balance various competing require-
ments from both an engineering, envi-
ronmental impact, and advanced design
perspective. Because of legitimate con-
cerns about environmental disruption,
the engineers designed a system which
minimised impact by almost eliminat-
ing the need for extensive land grading
and concrete foot pads. By placing indi-
vidual mirrors on poles directly into the
ground, the system allows vegetation to
co-exist within the project and avoids
impacting sensitive habitats. Also, to
conserve scarce desert water, the tower
uses air-cooling, which compared with
conventional water-cooling results in
90% less water usage, although with
some loss in overall efficiency. The
water that is used is part of a closed
loop system within the boiler segment.
In this regards, the Ivanpah
project is a good template for CSP
developments as it includes multiple
stakeholders such as the developers,
utilities, and environmental groups.
Cost and bankability
Despite the upsurge in the CSP
pipeline, there are some warning signs
that CSP still has the potential to hit
another bust cycle.
The issues are a perfect storm of
three elements: The primary one is
January/February 2011 | Renewable Energy Focus 53
 Feature article
SEGS: CSP success story
The SEGS plants (pictured)
range in capacity from 13.8MW to
80 MW, and they were constructed
to meet Southern California Edison
Company’s periods of peak power
demand. The plants operate for 80%
of the summer mid-peak hours,
and 66% of the winter mid-peak
hours. A natural gas backup system
supplements the solar capacity and
contributes up to 25% of the plants’
annual output.
Learning from the early SIGS
plants has been extensive. During
the 1990’s the SEGS’s technical
team worked with the Depart-
ment of Energy’s (DoE) Sandia
National Lab to develop cost-
reduction strategies for O&M
planning optimisation; subsystem
automation; mechanical and reli-
ability improvements; and overall
the ‘bad luck’ of the global economic
squeeze, which has made access to
capital very restricted.
The second element is the increas-
ing drop in the prices of solar PV and
the ever-expanding track record for
large-scale PV installations.
The third element is that CSP
projects are typically large-scale, and
require major amounts of not just
money; but time for building; and
regulatory review. Although there is
the ‘economies of scale’ positive ben-
efit for larger builds, there are other
costs and barriers which increase
with size. Permitting is more complex,
labour rates can go up, and the need
for grid upgrade or transmission can
be substantial.
54 January/February 2011 | Renewable Energy Focus
performance improvements - in
fact many of the cost reduction
strategies that can now be applied
to other CSP technologies and the
industry in general. The com-
bined efforts developed capabili-
ties for reducing O&M costs by a
third. O&M is a substantial part
of CSP running costs, unlike fixed
panel solar photovoltaics (PV),
where the O&M costs are a small
fraction.
In addition, the plants were able
to perform to exceptional stan-
dards and achieved a record output
for single-day generation of over
2 GWh, and established a world
record solar thermal-to-electric
efficiency of 18%. The SEGS 1-9
configuration is a true success story
in the annals of CSP (image courtesy
of Warren Gretz – DoE/NREL).
All this means there is a very
significant question about bank-
ability, which has become a common
buzz word on the solar arena. This
is a legitimate concern as investors
don’t want to take on risk for less-
than-fully proven technologies. When
you couple that uncertainty with the
large investments needed for CSP, the
result is major hesitation. The case of
El Paso Electric illustrates perfectly
this developing storm on the open
desert planes.
David Knox of NRG Energy Inc,
which El Paso Electric contracted
to develop the CSP plant, explains
the situation in simple terms. NRG
sought a Loan Guarantee from DoE to
build the facility, but its request was
rejected. Rather than wait for NRG to
get funding, El Paso Electric switched
to solar PV to meet the state’s renew-
able energy mandates.
“We can get banks to finance a
solar PV project now, but they’re not
yet ready to finance a solar thermal
project,” Knox says. “That’s why we
need to rely on Loan Guarantees to do
it, but we won’t get that in the time
frame that El Paso Electric needs it.”
Jason Marks of the New Mexico PUC
says “the problem is not just timing
– it’s an endemic situation facing the
CSP industry”.
In addition, there have been other
recent cancellations of projects where
the utilities switched from CSP to
solar PV - citing costs. The learn-
ing curve of PV is much steeper and
advanced than that of CSP, and stor-
age complicates things further.
This situation becomes a reinforc-
ing cycle: Cheaper PV leads to more
installations, which in turn leads to
increasingly cheaper PV. This is the
essence of the solar market, getting
the cost down and moving along the
learning curve as quickly as pos-
sible. Great for PV. Not so great for
CSP. And Levelised Cost of Electricity
(LCOE), which is often used to pro-
mote CSP, is becoming lower for PV
and is projected to continue on this
trajectory.
Small is beautiful
Despite the challenges, there are
some developing trends which could
provide a path to viability: Getting
bigger by going smaller.
There are emerging market oppor-
tunities in developing countries with
a poor or non-existent grid and power
infrastructure. In these countries,
such as India, the need for local power
is great, but the regional demand is
only on the scale of a few MW’s.
This application is a relatively hid-
den market but could be on a par with
the nominal ‘grid-connected’ market.
In some regards, this market is similar
to the cell phone mode, where the
landline infrastructure is not in place,
but local service can be provided by
towers. The demand here is great, and
there is a need for viable energy which
provides both immediate needs - as
well as some storage.
 It would be ironic if the iconic
origins of terrestrial solar
power, the SEGS plants,
remain just an image of a
CSP boom-bust cycle in the
Mojave Desert…
Conclusion
The ability of CSP to provide both hybrid power (as well
as storage) gives it an edge for the time being. However,
there is a big caveat, which is the necessity for micro-CSP.
Typical CSP installations need to be large-scale to amortise
the balance of plant (BOP), and O&M costs. Therefore mini-
mum sizes tend to be in the multiple 10s of MWs, much too
large for micro-grid requirements.
However, two companies are addressing this requirement:
One is Aora, and the other is Sopogy. They are both striving
to provide sub-MW CSP solutions. Sopogy is based in the
U.S., has been around since 2002, and already has a 2MW
project operating in Hawaii - with new micro-grid contracts
underway. Aora is based in Israel, and is targeting a 100kW
demonstration unit in Spain by mid-2011.
CSP has gone through some boom and bust cycles in its
30-year history. It is poised to make a comeback but there
are some significant clouds gathering on the horizon. For
CSP there is the urgent need to prove its future capability
(i.e. its potential) now. The CSP providers need to achieve
significant momentum. In an unfortunate storm of market
conditions, CSP is getting squeezed between tighter capital
and the plummeting costs of PV.
It would be ironic if the iconic origins of terrestrial solar
power, the SEGS plants, remain just an image of a CSP
boom-bust cycle in the Mojave Desert, still cranking away
on a tumble weed-blown plane, but left behind because of
market forces and the dynamics of technology.
Of course one answer to averting a bust-cycle is simple:
Deliver on some of the projects currently in the pipeline.
There are some leaders in the CSP segment who recognise
the urgency and are pushing for a re-focusing of energy
into execution and co-operation. Stephen Mullinnex of US
Renewables group, which is backing the CSP installer Solar-
Reserve would say that his competition (e.g. BrightSource) is
not really the competition – because the more CSP installed,
the better for everyone in the industry.
As he puts it: “It’s now more about MWh than about
‘bragga-watts’.” In other words, there is a need to act swiftly
to execute projects in the pipeline rather than bringing more
volume to the pipeline, because time may well catch up with
the industry.
First published in the November/December issue of Renewable
Energy Focus U.S. magazine. See http://www.renewableenergyfo-
cususa.com for more details.
e: askumanich@solarvisionco.com

January/February 2011 | Renewable Energy Focus 55