For a company that develops, owns and operates CSP plants, Acciona Solar Power says the current CSP technology has a much longer life than was perhaps understood.

By CSP Today staff writer

Acciona Solar Power believes that Nevada Solar One represents a major renewable-energy success story of the past two decades.

The company recognised the potential for CSP generation in the Southwestern US and built the 400-acre, 64MW Nevada Solar One plant to demonstrate that this technology could perform on a commercial scale.

Nevada Solar One went online in June 2007, creating over 800 construction jobs during building and approximately 30 permanent operation jobs. All of the power generated is purchased by Nevada Power Company and Sierra Pacific Resources under long-term power purchase agreements (PPAs).

Work on this solar thermal power plant, which started supplying power to the Nevada Power grid almost two years ago, plus construction on four more 50MW plants in Spain, has only strengthened the belief of Acciona Solar Power.

“With all of the activity in Spain, and new developments in the US, we have now the opportunity to add innovations that will reduce cost and improve performance. This opportunity is a direct result of the lessons learned in Nevada ,” said Gilbert Cohen, Senior Advisor for ACCIONA S.A. and CEO, Eliasol Energy.

In an interview with CSP Today, Cohen spoke about progress in this technology, the regulatory environment in the US and other issues. Excerpts:

Can you reflect upon the economic challenges associated with growth in the use of energy from CSP? If policymakers conclude that alternative technologies should be more widely deployed, what options exist to lower the costs, enhance the competitiveness and increase the demand for such technologies?

We are the only developer to complete a large scale CSP project within the last 20 years. We have now been running that plant for over 20 months with better than planned output. Meanwhile, we have started construction on four more 50MW plants in Spain, the first of which will be commissioned over the summer.

This work, and the work done in the Mojave 20 years ago, convinces us of a couple of things.

First, that our current CSP technology i.e. parabolic trough, has a much longer life than perhaps was understood. As lenders come to realise this, they may be willing to offer longer term financing which will decrease the annual carrying cost of the equipment and/or reward it for its residual value.

Second, while there are 20 years of CSP work in the Mojave, until Acciona’s Nevada Solar One, there has not been an opportunity to offer any large scale innovations. So, on the learning curve, we had nine dots 20 years ago, and then just one dot in recent times. With all the activity in Spain, and new developments in the US, we will have the opportunity to add innovations that will reduce cost and improve performance. As a separate matter, CSP offers an excellent long-term hedge against fossil fuel prices for the off-taker and provides a certain independence against foreign oil.

Last year, there was a call for the Department of Energy (DOE) to facilitate the process for coordinating programmes to streamline project siting and permitting and also for working with utilities to ensure that projects with PPAs and/or utility support get expedited handling by permitting authorities. What do you think has been done to accelerate large-scale solar deployment?

The American Recovery and Reinvestment Act of 2009 provides for DOE loan guarantees and upfront payments of the investment tax credits associated with Solar Electric Generation projects. The DOE and Department of Treasury are in the process of writing the regulations envisioned by the Act. We are closely following these provisions, as are other solar power developers.

We expect the provisions to affect the financeability of projects, though it is still unclear what the ultimate impact will be as financial institutions re-establish their positions given these new rules. There are also several bills pending in Congress that could streamline the process of siting projects on Federal lands, as well as streamline the transmission siting process.

Companies like Abengoa, Acciona and Solar Millennium have traditionally financed projects with commercial debt. How do you expect prospects for capital flows into CSP going forward in the US?

Traditionally, the tax equity investor has been a consortium of investors with a significant tax liability, and the debt investor has to be comfortable with the risk associated with their portion of the financing. The pending DOE loan guarantee and the refundable grant programme proposed create opportunities for non-traditional investors to come into the picture. As more investors and lenders come in, it should drive the cost of capital back down to pre-crisis levels. Driving down project financing costs translates into a material savings to our customers.

RPS, incentives and policies can close the cost gap between fossil and CSP-derived energy. How do you assess the situation in the US?

There is an interest in establishing a national Renewable Portfolio Standard. The Western states like Nevada and California’s legislatures are considering increasing their existing RPS. We believe their wisdom will prove out in the long term. However, due to the diversity of natural ressources and the different needs across the nation, a national fee-in-tarriffs policy could be more benefitial for the immediate massive deployment of renewable technologies.

Price stability and predictability are important incentives by way of an RPS. We know our fuel price (the sun) will be the same 10 years from now, whereas the price of fossil fuel and the environmental costs of emissions continue to be volatile and unpredictable. Federal and State public policy makers are taking these factors into account in several different forums and formats. For example, some states are already going further than an RPS and looking at feed-in-tariffs. The expansion of large scale solar, like ours, will drive down output costs during peak demand and will stabilise long term electric price certainty as part of an asset portfolio.

In the past, it has been highlighted that CSP industry lacks a transmission policy. How do you assess the development of transmission systems from the CSP industry’s perspective?

This issue applies to all large scale renewable projects. The issue is not only availability of transmission, it is also siting (jurisdictional issues). There are initiatives in Congress and at the Western States Legislatures to establish transmission authorities and further define the jurisdictional responsibilities of the Federal Government and the State governments. Also, the timing of interconnecting our projects to the grid is a significant factor. We are working with public policymakers to take these issues into account. However, today they are a significant and practical challenge.

Power of CSP

It is estimated that an energy project utilising concentrating solar power technology deployed over an area of approximately 100 square miles in the Southwest US could produce enough power for the entire US annually.

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Contact: Sara Lloyd-Jones by email sara@csptoday.com