IN-DEPTH: Location, location, location

Jun 25, 2009

CSP siting requirements are quite different from wind energy, and a lot more specific

By CSP Today staff writer

Being an active renewable energy developer, enXco intends to partner with utilities to meet their obligations under the United States’ aggressive Renewable Portfolio Standard (RPS).

enXco, an EDF Energies Nouvelles Company, has had a reasonably successful run for its wind energy-related business in the US this year.

But the situation seems to be quite different as far as the CSP sector is concerned.

enXco is in advanced discussions with leading CSP technology providers, and is actively exploring the potential of a number of private and federal land sites for the development of solar energy plants.

Small not so beautiful

The company says one of the significant hurdles for CSP projects is siting a plant.

enXco has found that private lands in appropriate solar regimes with adequate water resources that avoid sensitive habitat are very often carved into relatively small parcels and owned by unrelated people.

“For wind development, we can piece together a patchwork of land and often make it work even though it's challenging. For CSP where one requires a contiguous area of over 1,000 acres, this is often impossible,” said Dai Owen, project manager, enXco.

CSP solar power plants require large tracts of land with favourable solar resources. For example, according to the US Department of Energy’s National Renewable Energy Laboratory (NREL), a 250MW plant with six hours of storage would require nearly three square miles of land.

Several initiatives have been taken to sort out the issue. For instance, last year the Bureau of Land Management (BLM), which manages much of the public land being considered for solar development, started its Programmatic Environmental Impact Statement study (PEIS) for solar installations on its land. While this two-year study is expected to expedite application processing in the future, it is not expected to be finalised until 2010.

The list of pending applications for solar development on BLM lands has now grown to more than 200 projects. Companies like enXco unsurprisingly find the overall process rather slow.

“BLM land offers a single owner, but as we are finding out, the development timeline there is rather slow and complicated,” Owen said.

In an interview with CSP Today, Frank Wilkins, solar thermal R&D team leader, US Department of Energy, said, “We are co-leads with BLM on the Solar Programmatic Environmental Impact Statement (PEIS), which when completed in 2010 will identify BLM-managed land suitable for utility-scale solar projects.”

This effort is also expected to lead to a streamlined process by which developers gain access to land. The Department of Energy is also working to improve the quality of solar resource data available to the industry. So companies will be better able to predict the performance of their plant.

Dealing with nasty surprises

Earlier this year, Mark Tholke, the director of the Southwest region for enXco, reportedly said: “...as a developer we can handle the costs. What we cannot handle is the surprise.”

Owen agrees and says there are many potential surprises in renewable energy development that must be carefully weighed and mitigated where possible.

For example, one significant uncertainty is the level of environmental mitigation that will be required for CSP plants on BLM land.

Various public agencies are still weighing in on this issue and there is no clear roadmap at this time, said Owen.

The solar PEIS may provide guidance, but in the meantime there is no certainty about those costs and requirements.

Cost of permits

It has been highlighted that the cost of getting permits in California is “more expensive” than any other state.

This has a much bigger impact on the development risk and expense that a project must bear during the pre-construction period, and not very much on the ultimate price of electricity. In this context, if policy makers conclude that alternative technologies should be more widely deployed, it is vital to assess what options exist to lower the costs, enhance competitiveness, and increase the demand for such technologies.

However, Owen believes that the CSP industry must focus on getting steel in the ground soon to prove the various technologies and demonstrate that the industry is ready to shoulder some of the world’s renewable energy needs.

“As an industry we must also be careful about promises that are made. It hurts everyone when a lofty claim goes unrealised,” he said.

Invaluable experience

enXco describes experience and technological maturity as two critical factors when it comes to the diligence phase and minimising the gestation period.

The company has significant experience in the operation and maintenance of renewable energy facilities and understands the challenges of long-term plant ownership.

“This is something that we believe some of our competitors and especially new entrants to the field are underestimating,” said Owen.

It is one thing to build a facility. It is quite another to ensure that it operates for 20 years under the lifetime of the PPA and for the price-point that has been guaranteed.

“We believe this will be a significant challenge to be overcome, especially by new CSP technologies,” concluded Owen.

Vast survey unfolding

Under the PEIS, potential sites will be examined in California, Arizona, New Mexico, Nevada, Colorado and Utah. According to NREL, in addition to identifying the best sites for solar projects on the 119 million acres of BLM-managed land, this effort will explore the need for new transmission to access these sites. The PEIS will also allow for modifications in the BLM solar application process. These modifications will reduce the time required for project developers to navigate the permitting process for large utility-scale solar projects.

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