Interview by Rikki Stancich in Paris

By broadening its technology base, German solar thermal energy specialist Solar Millennium has shifted its solar strategy up a gear. Confirming a new trend in the CSP sector, the company, which developed Europe’s first parabolic trough power plants in Spain, now intends to capitilise on potential advantages of combining CSP with PV in utility-scale power generation projects.

CSP Today catches up with Solar Millennium Chief, Dr. Christoph Wolff, to get the details on Solar Millennium's forward strategy.

CSP Today: Solar Trust of America recently partnered with PV firm SolarHybrid. Is the strategy simply to diversify Solar Millennium/STA's portfolio, or is there scope for building hybrid CSP-CPV plants?

Dr. Wolff: The core idea of engagement in the PV market is to capture synergies, as a complimentary offer to stand-alone CSP plants. But Solar Millennium’s core brand and value proposition is CSP delivery.

CSP Today: What is the operational advantage of combining the two technologies? and what operational challenges does it present?

Dr. Wolff: There are a number of synergies and advantages in combining CSP and PV in terms of site topologies, energy demand characteristics and financial aspects. We are a solar specialist and offer a wealth of experience in identifying which technology is more appropriate for a given country, geography and off taker.

For parabolic through plants you need flat surfaces, but often sites are partly flat and partly hilly, so it is good to offer both technologies to make full use of an approved site. In terms of demand characteristics, CSP offers the possibility of dispatching energy almost 24/7 thanks to thermal storage, whereas PV has its strengths in peak delivery.

And with regards to financial models, there is a higher cycle time for PV, so you can build it faster which confers an advantage on the overall investment budget.

The challenge is now to find the right way to provide a complete, balanced offering to our customers’ demands.

CSP Today: Do you have any hybrid CSP-PV projects in the pipeline?

Dr Wolff: We are currently in discussions with several companies, and are looking at developing hybrid CSP-PV projects on both sides of the Atlantic.

CSP Today:  Solar Millennium intends to expand its technology portfolio to include central receiver, or solar power tower plants. Will Solar Millennium focus on molten salt, or air receiver technology?

Dr Wolff: Today the worldwide installed CSP capacity is 90% parabolic trough, and the majority of the immediate pipeline of projects still includes troughs. But in coming years, there will be a more even split between troughs and towers. In the past we had positioned ourselves as a ‘parabolic trough-only’ company, but we wanted to be ready for a situation where towers are competing on the basis of their higher temperature efficiency.

It still is a challenge to derive better economics from the higher thermodynamic potential of towers. My personal guess is that the two technologies will co-exist for a long time with varying market shares – just like Diesel and gasoline powered cars do.

Therefore before I joined in January the company already had established internally a R&D team that looked specifically at molten salt central receiver technology. We see a lot of synergies between molten salt central receiver and parabolic trough  especially when it comes to  molten salt thermal storage.

Now the  focus is on molten salt, but we are screening other technologies as well, such as compressed air. But troughs will always be around. They are the real ‘work horse’ technology; they are well established and work under all kinds of conditions. There is  still a lot of localization potential for troughs and we are working on further bringing  down the kw/h cost.

CSP Today:  Solar Millennium last year demonstrated its HelioTrough, a scaled up, lower cost version of its Skal-ET trough technology. In terms of component size, operating, and cost efficiency, are the component sizes in second-generation trough models considered to be optimal, or are they likely to get bigger?

Dr. Wolff: There is a tendency that specific components will continue to get bigger. In addition to that and in terms of achieving cost efficiency, industrial supply chains need to be set up to achieve the volumes required for industrial processes, for fabrication and robotic assembly.

The HelioTrough is the most advanced and most efficient collector  in the market, and we are proud that we can apply it in the Blythe project with a highly automated assembly system. But we always strive for  improving on the technology, so it’s more than likely that we will come out with a HelioTrough 2 in the near future.

CSP Today: Solar Millennium is now involved in its fifth solar thermal power project in Spain, (the Arenales project), following on from the Andasol 1- 3 and Ibersol projects. How promising is the Spanish market over the longer term, compared to the US and Asian markets?

Dr. Wolff: The Spanish market is still the largest CSP market in the world. The US market may take over in 2013-14, but the current pipeline of Spanish projects is still big, which is why Solar Millennium has a large brand office in Madrid ever since.

The next feed-in tariff announcement, due this summer, will determine what happens after 2013 in Spain. The cost reductions that CSP is now achieving indicate that the feed-in tariff  is likely to come down.

However given that there are a lot of plants with storage planned, CSP is increasingly viewed as a provider for base load power. Therefore a continuous CSP build out is expected both in Spain, as well as by Spanish CSP developers elsewhere.

There is also the very real potential for Spain to become a renewable energy exporter to the rest of Europe. Once transmission regulatory issues are settled by the European Commission, the transmission capacity will need to be increased between Spain and France in order to facilitate a flow of renewable energy form southern Europe to Central Europe.

In the US, we are looking at a leap-frog to a different size of plant – roughly 250MW – which will bring down the levelized cost of electricity.

Blythe 1 and 2 projects are scheduled for financial close at the end of summer. The US market is going to bring the industry in to a different volume situation. 2GW of capacity is in advanced permitting stages, e.g. our other Californian site near  Palen with 500 MW alone.

In other areas of the world, such as India, the general mood is that the first 470MW to be built under the JNNSM is just the beginning. Phase 2 is scheduled to begin at the end of the year. The expectation is that CSP will be delivered at a competitive price. India is bullish to develop very rapidly.

We can expect to see more activity in China, South Africa, and North Africa. There are signs that things are beginning to happen in Australia, and we have opened an office in South America.

It is inevitable that the countries in the sun-belt region will get on the bandwagon, one after another.

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Rikki Stancich: rstancich@csptoday.com