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photo: Todd Woody

In The New York Times Green blog on Wednesday, I follow up on my print story about the impact of low-cost Chinese solar manufacturers on high-tech Silicon Valley startups:

In an article in Wednesday’s paper, I write about how high-tech Silicon Valley solar companies are retooling their strategies to compete with low-cost Chinese manufacturers.

Over the last two years, Chinese solar panel makers like Suntech and Yingli Green Energy have moved aggressively into the United States and now supply about 40 percent of the California market, according to Bloomberg New Energy Finance, a research firm.

China’s growing dominance of the global solar market has been on display in Los Angeles this week at the Solar Power International conference, one of the industry’s biggest annual get-togethers. In a vast exhibition hall, the booth of one Silicon Valley start-up, Solyndra, is surrounded by a sea of Chinese solar companies offering their wares.

As prices for conventional silicon-based solar panels plummet, pressure has increased on Silicon Valley start-ups like Solyndra that make a type of photovoltaic cell called copper indium gallium selenide, or CIGS. Though less efficient at converting sunlight into electricity, the promise of the technology was that it could be made cheaply – at least until the cost of conventional solar module prices fell 40 percent over the past year.

That led Solyndra to start production two months ahead of schedule at its new $733 million factory in Fremont, Calif., and to speed up development of its next-generation solar panel.

“It definitely puts more pressure on us to bring our costs down as quickly as possible by ramping up volume,” said Ben Bierman, Solyndra’s executive vice president for operations and engineering, as driverless carts shuttled stacks of photovoltaic parts to large orange robots at Fab 1, the company’s original factory.

Nathaniel Bullard, a solar analyst with Bloomberg New Energy Finance in San Francisco, said that success for high-tech Silicon Valley solar companies may depend on finding a big market niche they can dominate.

Solyndra, for instance, makes lightweight solar panels that snap together like Legos and can be installed on large commercial rooftops unable to support heavier conventional panels. On the roof of the company’s headquarters, Mr. Bierman recently gave me an advance look at its new solar panel, which is more powerful but requires far less labor to install.

“We really took a lot of the cost out and accelerated development in response to the Chinese,” Mr. Bierman said.

China presents different challenges for SunPower, which was founded in 1985 and is the granddaddy of Silicon Valley solar companies.

SunPower makes conventional solar panels but has also pursued a high-technology strategy and says it produces the world’s most efficient photovoltaic modules. (Architects and fashion-forward homeowners also favor the company’s sleek jet-black panels.)

In recent years SunPower has increasingly focused on building big photovoltaic power plants to supply electricity to utilities that put a premium on technological performance, reliability and a company’s ability to manage complex projects.

You can read the rest of the story here.

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photo: The White House

In The New York Times on Wednesday, I take a look at how the rapid rise of low-cost Chinese solar panel companies have forced Silicon Valley’s high-tech solar startups to retool for a global market they had not anticipated:

FREMONT, Calif. — A few years ago, Silicon Valley start-ups like Solyndra, Nanosolar and MiaSolé dreamed of transforming the economics of solar power by reinventing the technology used to make solar panels and deeply cutting the cost of production.

Founded by veterans of the Valley’s chip and hard-drive industries, these companies attracted billions of dollars in venture capital investment on the hope that their advanced “thin film” technology would make them the Intels and Apples of the global solar industry.

But as the companies finally begin mass production — Solyndra just flipped the switch on a $733 million factory here last month — they are finding that the economics of the industry have already been transformed — by the Chinese. Chinese manufacturers, heavily subsidized by their own government and relying on vast economies of scale, have helped send the price of conventional solar panels plunging and grabbed market share far more quickly than anyone anticipated.

As a result, the California companies, once so confident that they could outmaneuver the competition, are scrambling to retool their strategies and find niches in which they can thrive.

“The solar market has changed so much it’s almost enough to make you want to cry,” said Joseph Laia, chief executive of MiaSolé. “We have spent a lot more time and energy focusing on costs a year or two before we thought we had to.”

The challenges come despite extensive public and private support for the Silicon Valley companies. Solyndra, one of the biggest firms, has raised more than $1 billion from investors. The federal government provided a $535 million loan guarantee for the company’s new robot-run, 300,000-square-foot solar panel factory, known as Fab 2.

“The true engine of economic growth will always be companies like Solyndra,” President Obama said in May during an appearance at the then-unfinished factory.

But during the year that Solyndra’s plant was under construction, competition from the Chinese helped drive the price of solar modules down 40 percent. Solyndra rushed to start cranking out panels on Sept. 13, two months ahead of schedule, and it has increased marketing efforts to make the case to customers that Solyndra’s more expensive panels are cost-effective when installation charges are factored in.

“It definitely puts more pressure on us to bring our costs down as quickly as possible by ramping up volume,” said Ben Bierman, Solyndra’s executive vice president for operations and engineering, as driverless carts shuttled stacks of photovoltaic parts to large orange robots at Fab 1, the company’s original factory.

To be sure, Silicon Valley companies like Solyndra, Nanosolar and MiaSolé continue to receive hundreds of millions of dollars in customer orders and some plan to expand local manufacturing. But the rapid rise of low-cost Chinese manufacturers has made investors — who once envisioned the region’s future as Solar Valley — skittish about backing new capital-intensive start-ups.

“I don’t see another Solyndra being done,” said Anup Jacob, whose private equity firm, Virgin Green Fund, has invested significantly in Solyndra. “It’s very difficult today to show a business plan to investors and say, ‘I need hundreds of millions to a billion dollars to get to scale.’ ”

In the third quarter of 2010, venture capital investment in solar companies plummeted to $144 million from $451 million in the year-ago quarter, according to the Cleantech Group, a San Francisco research firm.

The paucity of capital and the sheer size of Chinese solar panel makers have proved particularly problematic for companies like Solyndra and MiaSolé, which make photovoltaic cells using a material called copper indium gallium selenide, or CIGS.

Unlike conventional solar cells, which are made from silicon wafers, CIGS cells can be deposited on glass or flexible materials, much as ink is printed on rolls of newspaper. Though the technology is less efficient at converting sunlight into electricity, the promise of “thin film” solar cells was that they could be made cheaply.

However, producing CIGS cells on a mass scale has turned out to be a formidable technological challenge, requiring the invention of specialized manufacturing equipment.

While Silicon Valley companies were working on the problem, silicon prices fell and Chinese companies like JA Solar, Suntech and Yingli Green Energy rapidly expanded production of conventional solar panels, supported by tens of billions of dollars in inexpensive credit from the Chinese government as well as other subsidies like cheap land.

Arno Harris, chief executive of Recurrent Energy, a San Francisco solar developer acquired by Sharp last month, said he chose to sign a supply deal with Yingli because the Chinese company offered low prices, quality products and financing.

“We realized that would enable us to bid competitive power prices from projects that could also be efficiently financed,” Mr. Harris said in an e-mail. “It may seem obvious to state it this simply, but declining prices are the key to driving the next era of demand for solar.”

Chinese solar panel makers now supply about 40 percent of the California market, the largest in the United States, and the bulk of the European market, according to Bloomberg New Energy Finance, a research and consulting firm.

“We grow every year with double revenue and almost double capacity,” said Fang Peng, the chief executive of JA Solar, in a telephone interview from the company’s Shanghai headquarters. “At end of the year, we will have 1.8 gigawatts of capacity and will have grown from 4,000 employees at the beginning of this year to more than 11,000.”

By comparison, Solyndra expects to have a total production capacity of 300 megawatts by the end of 2011.

The competition from the Chinese has prompted some Silicon Valley companies, like AQT Solar, to pursue new strategies to survive.

You can read the rest of the story here.

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I wrote this story for Grist, where it first appeared.

The president of the Maldives, Mohamed Nasheed (on right in above photo), didn’t just agree to have solar panels installed on the presidential mansion; he helped put them in. Nasheed scrambled up to the roof this week, screwdriver in hand, and joined the crew from California’s Sungevity, which installed the 11.5-kilowatt photovoltaic array.

(Don’t expect to see Barack Obama in a hard hat any time soon, even though his administration just gave the OK to the solarization of the White House.)

The Maldives, of course, is the poster country for global warming. The Indian Ocean archipelago rests, on average, fewer than five feet above sea level and the nation of some 305,000 people would be rendered uninhabitable by rising waters.

“For the Maldives, climate change is a real challenge,” said Nasheed on a conference call Wednesday. “It’s not a problem in the future, it’s a problem we face every day.”

“We have 16 islands that have serious erosion problems,” he added. “We’ve had to relocate people from one island to another. We also have severe saltwater contamination. We have a serious food security issue.”

Sungevity and Bill McKibben’s 350.org were behind the campaign to put solar on the U.S. White House. The Maldives rooftop installation is part of this Sunday’s 10/10/10 “Global Work Party,” another McKibben initiative to get people to take action against climate change.

Nasheed, 43, has shown himself adept at focusing media attention on the impact of global warming on the world’s low-lying island nations — last October, he and his cabinet donned scuba gear to hold an underwater meeting.

But putting solar panels on the presidential home is not so much a PR stunt as part of the nation’s aggressive efforts to wean itself from the imported oil it relies on to generate electricity.

In January, Nasheed pledged to the United Nations that the Maldives would go carbon neutral by 2020. Making good on his pledge won’t turn back the rising tide, but Nasheed said the Maldives can show other island nations that it is possible to replace fossil fuels with renewable energy. “If it can work here in the Maldives it can work anywhere with 300,000 people,” he said. “We’re going to see a very big technology shift. There’s going to be another industrial revolution. If you’re not clever enough to embrace the future, you cannot be a world leader.”

According to an official in the president’s office, the Maldives total electricity demand is 200 megawatts.

A Finnish company, WinWind, has proposed building a 25-megawatt wind farm on the Maldives’ Gaaf Alif atoll, while Indian wind turbine maker Suzlon is investigating the feasibility of constructing a 15-megawatt wind farm on the Addu atoll. Japan has provided financial assistance for a project to install a megawatt’s worth of rooftop arrays on schools and government buildings in Male, the country’s capital.

International donors, meanwhile, have promised $30 million for renewable projects. Scotland and the Maldives have signed an agreement to investigate the potential for developing wave and tidal power in the archipelago, according to the president’s office.

To provide electricity when there’s no wind or sun, the Maldives is considering biomass power plants that would run on coconut husks. Outlying islands, however, would probably have to continue burning oil until the price of batteries used to store renewable energy became affordable.

LG, the Korean company, donated the panels for the presidential solar array and the inverters were contributed by the German company Kaco. Sungevity used satellite images and its proprietary software to size and design the solar system at its Oakland, Calif., headquarters, then flew a crew to the Maldives to install it.

“We’re averting about 200 tons of C02 from the system and there’s a 27 percent return on investment,” said Danny Kennedy, Sungevity’s co-founder and a former Greenpeace activist, who traveled to the Maldives for the installation. “President Nasheed is demonstrating this is a wise and affordable investment.”

Or as Nasheed put it, “For us, it is an issue of life or death. We have been living in the middle of the Indian Ocean and have a written history that goes back 1,000 years. We cannot relocate.”

“We have to take direct action,” he continued. “As the president, it’s difficult for me to talk like this. This has to involve a fair amount of direct action on the streets.”

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photo: Todd Woody

I wrote this story for Grist, where it first appeared.

Interior Secretary Ken Salazar on Tuesday gave the green light to the first two big solar power plants to be built on federal land in the California desert, promising more approvals of solar projects in the coming weeks.

The granting of leases to Tessera Solar’s massive 709-megawatt Imperial Valley Solar Project and to a smaller 45-megawatt photovoltaic farm to be built by Chevron come four years after the solar land rush began in the Mojave Desert.

With nearly 200 applications filed on hundreds of thousands of acres of Bureau of Land Management (BLM) property, the federal government soon became overwhelmed trying to weed out viable projects from speculators. Environmentalists, meanwhile, grew alarmed at the potential impact of such huge industrial projects on a plethora of imperiled wildlife, as well as on water supplies and desert vistas.

The Obama administration beefed up BLM staff devoted to solar projects and began collaborating with California agencies to streamline the approval process.

“Today’s projects are proof that we can cut red tape without cutting corners,” Salazar said Tuesday during a press conference.

The looming expiration of federal tax incentives for large renewable energy projects also lit a fire under state and federal regulators to license power plants so that developers could begin construction by the end of the year.

For instance, since Aug. 25, the California Energy Commission has licensed six solar thermal power plants that would cover some 39 square miles of desert land and generate 2,829 megawatts. That’s nearly six times as much solar capacity as was installed in the United States last year.

“I am excited to join Secretary Salazar today in announcing the first solar projects to ever get permits on federal land, both of which will be located in the Golden State,”  California Gov. Arnold Schwarzenegger said in a statement. “Today’s announcement only further cements California’s national leadership in renewable energy development.”

Some environmental groups initially raised concerns about the Imperial Valley project, which will place 19,000, 38-foot by 40-foot Stirling solar dishes on 6,400 acres of desert land near the Mexican border east of San Diego. Of particular concern was the project’s impact on the flat-tailed horn lizard and the Peninsular bighorn sheep. A Native American tribe, meanwhile, objected to the power plant’s presence on their ancestral lands.

But Johanna Wald, a senior attorney at the Natural Resources Defense Council in San Francisco, said the developer’s willingness to shrink the project to mitigate degradation of wildlife habitat and to minimize its water consumption won over her group and other environmentalists.

“The company sat down with NRDC and our conservation partners and agreed to a number of important measures that were above and beyond the requirements that were imposed by the state and federal regulators,” Wald said in an interview.

Nevertheless, the Sierra Club, the Center for Biological Diversity, and Native Americans have continued to object to the Imperial Valley solar farm.

Wald singled out the much smaller Chevron project as one where developers’ selection of a site near transmission lines and away from protected wildlife paid off in the unanimous support from major environmental groups.

“Chevron,” she said, “is a project we all would agree was smart from the start.”

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photo: Todd Woody

I wrote this story for Grist, where it first appeared.

While efforts to pass federal climate change legislation have stalled and a fight rages in California to overturn its global warming law at the ballot box, Golden State regulators have been licensing massive desert solar power plant projects at a breakneck pace in recent weeks.

On Wednesday, for instance, the California Energy Commissioned approved two solar projects that would generate nearly 1,000 megawatts of electricity, the 250-megawatt Genesis Solar Energy Project and the 709-megawatt Imperial Valley Solar Project.

Since Aug. 25, the energy commission has licensed six solar thermal power plants that would cover some 39 square miles of desert land and generate 2,829 megawatts. That’s nearly six times as much solar capacity that was installed in the United States last year, mostly from rooftop solar panels.

“Consider how important it is that California move aggressively toward renewables and how important these pioneering projects are,” said Jeffrey Byron, a member of the California Energy Commission, said at a hearing Wednesday.

Regulators and developers are racing to put shovels to ground before the end of the year when federal incentives for large renewable energy projects expire, which could threaten the financial viability of some of the solar projects.

The Genesis project, to be built by Florida-based energy giant NextEra Energy Resources (formerly called FPL), will build long rows of parabolic troughs in the Riverside County desert that will focus sun on liquid-filled tubes suspended over the mirrors to create steam that will drive an electricity-generating turbine. It’s an older solar technology that was first deployed in the 1980s in California.

Tessera Solar’s  Imperial Valley project, on the other hand, will be the first big test of Stirling dish technology. Resembling a giant mirrored satellite receiver, the 38-foot-high, 40-foot-wide, solar dish focuses the sun’s rays on a Stirling engine, heating hydrogen gas to drive pistons that generate 25-kilowatts of electricity. Some 29,000 of Tessera’s Suncatchers will be installed on more 6,400 acres of desert land near the Mexican border about 100 miles east of San Diego.

Meanwhile, California Gov. Arnold Schwarzenegger this week signed into law what is thought to be the nation’s first energy storage legislation. The bill, AB 2514 could result in regulations requiring the state’s utilities to store a certain percentage of electricity generated in energy storage systems such as batteries, compressed air or flywheels.

Energy storage is considered crucial for the mass deployment of solar power plants, wind farms and other sources of intermittent renewable energy, as well to build out the smart grid.

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photo: GE

I wrote this story for Grist, where it first appeared.

General Electric on Wednesday gave a jump-start to Better Place, the Silicon Valley startup developing an electric car infrastructure in several countries.

Better Place plans to deploy a network of urban charging posts and swapping stations where drivers can exchange depleted company-owned batteries for fresh ones when they need to make trips that exceed their car’s range. GE has agreed to help finance up to 10,000 of those batteries in Better Place’s first two markets: Denmark and Israel. That’s no small matter, given that Better Place faces huge capital outlays for battery purchases.

The global conglomerate will also make its WattStation, a sleek electric car charging post that it unveiled in July in San Francisco, compatible with Better Place’s network.

In addition, GE and Better Place will collaborate on an effort to persuade companies to electrify their vehicle fleets and plug into the electric car charging networks that Better Place plans to build in the San Francisco Bay Area; Ontario, Canada; Australia; and Europe.

It’s not the first time GE has dabbled in the nascent electric car industry. In 2008, the company invested $4 million in Think, the Norwegian electric carmaker.

In yet another deal involving a multinational conglomerate and a California startup, Sharp late Tuesday said it had acquired Recurrent Energy, a San Francisco-based solar developer, for $305 million in cash.

While most people may associate Sharp with televisions and other consumer electronics, the Japanese company is also one of the world’s biggest solar panel makers. Recurrent builds small-scale photovoltaic power plants. It has signed contracts for projects that would generate 330 megawatts, and has another nearly another 1,700 megawatts’ worth of deals in development.

During a conference call on Wednesday, Recurrent’s chief executive, Arno Harris, said Recurrent would retain its name and become a division of Sharp and that he and his team would remain in place.

While the buyout is another sign of the consolidating solar industry, it also indicates that big solar panel makers like Sharp feel pressure from the fast rise of low-cost Chinese manufacturers to diversify their business.

Acquiring Recurrent gives Sharp another source of revenue but it won’t necessarily provide a market for Sharp’s own solar panels. In a telling provision of the acquisition, Harris said Recurrent won’t be compelled to buy Sharp solar panels and can keep its current suppliers. Those include Yingli Green Energy, a Chinese company that captured a third of the California market last year thanks in large part to a big deal with Recurrent.

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photo: California Energy Commission

In Friday’s New York Times, I wrote about California regulators’ licensing of a 1,000-megawatt solar thermal power plant, which would be the world’s largest solar energy complex:

California regulators have licensed what is for the moment the world’s largest solar thermal power plant, a 1,000-megawatt complex called the Blythe Solar Power Project to be built in the Mojave Desert.

By contrast, a total of 481 megawatts of new solar capacity was installed in the United States last year, mostly from thousands of rooftop solar arrays, according to the Solar Energy Industries Association, a trade group.

“Given the challenge of climate change at this time, it is very important to reduce fossil fuel use by moving forward with the largest solar project in California,” Robert Weisenmiller, a member of the California Energy Commission, said at a hearing Wednesday in Sacramento after a unanimous vote to approve the Blythe project.

“We’re taking a major step toward reducing the threat of future climate change impacts on the state, and at the same time the other real challenge for the state is the economy,” he added, referring to 604 construction jobs and 221 permanent jobs that the Blythe project would create in an area of California where the unemployment rate was 15 percent this summer.

After years of environmental reviews, the California Energy Commission has in the past three weeks licensed solar thermal farms that would generate 1,500 megawatts of electricity when completed.

A commission spokeswoman said the commissioners anticipated making licensing decisions by the end of 2010 on additional solar projects that would produce another 2,829 megawatts. At peak output, those solar farms would generate the equivalent electricity produced by several large nuclear power plants.

Developers are racing to start construction before federal tax incentives for big renewable energy projects expire at year’s end.

If all the projects are built, they would create 8,000 construction jobs and 1,000 permanent jobs, according to the energy commission.

At peak operation, the Blythe solar complex would supply enough electricity for 800,000 homes. The multibillion-dollar project will be built in four 250-megawatt phases.

It is notable for being the first big solar project to be licensed that would be built on federal land. The United States Bureau of Land Management is expected to decide by the end of October whether to approve the Blythe complex.

The project will be constructed by Solar Millennium, a German developer, and will cover 9.3 square miles in Riverside County in Southern California with long rows of parabolic troughs. The solar reflectors focus the sun on liquid-filled tubes suspended over the mirrors to create steam that drives an electricity-generating turbine housed in a central power block.

You can read the rest of the story here.

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