Green Wombat

The northeast United States is not usually considered a hot spot for large-scale solar power projects like the ones being developed in California and the southwest. But yesterday Pennsylvania announced it will get the largest photovoltaic solar power plant east of the Mississippi. The 3-megawatt power station will be financed and built by Germany solar company Conergy’s Epuron and SunTechnics subsidiaries. Epuron inked a 20-year power purchase agreement with utility Exelon (EXC), which operates the nation’s largest fleet of nuclear plants. The 17,000-panel PV plant will be built in Bucks County, outside Philadelphia. The size of the plant is small in contrast to some of the 500-megawatt solar thermal stations being developed for California utilities PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) – or even PV plants like the 15-megawatt facility being built by PowerLight (SPWR) in Nevada. But the Pennsylvania project indicates that the market for Big Solar is not limited to the sunbelt. it’s also a sign that Conergy, one of the world’s biggest solar companies, is serious about its recent move into the U.S.

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photos: Applied Materials
It’s been almost a year since Applied Materials – the Silicon Valley company that is the world’s biggest manufacturer of the machines that make computer chips and flat-screen video displays – announced it was jumping into the booming solar energy business. It was a natural fit – most solar technology is silicon based and the Applied (AMAT) machines that churn out video displays can, with a few modifications, produce thin-film solar panels. And tools used to make the chips in your laptop can be reconfigured to make wafers for solar cells. Applied’s move into the solar market promises to lower the cost of solar electricity. How? By standardizing and improving the solar manufacturing process, much as the company did for the semiconductor industry, allowing companies like Intel (INTC) and Advanced Micro Devices (AMD) to produce ever-cheaper chips that made laptops and mobile phones mass commodities.

So Green Wombat recently headed down the 101 to pay a visit to Charlie Gay, a solar industry veteran who runs Applied’s Solar Business Group, for a Year One update and to take a look at the company’s big metal. An avuncular exec, Gay began his solar career more than three decades ago at Boeing subsidiary Spectrolab. He subsequently joined Arco Solar and worked at its various incarnations and later served as director of the U.S. government’s National Renewable Energy Laboratory. He recently chaired solar-cell maker SunPower’s (SPWR) advisory board.

“Things are growing very rapidly, both for the solar industry as well as for Applied,” says Gay at the company’s Santa Clara campus. In the first quarter of the year the company forecast its solar business would sign $200 million in contracts in 2007. By the second quarter, it raised that estimate to $400 million, and last week during the third quarter earnings call, CEO Mike Splinter upped the ante to more than $600 million.

The reason for the optimism is Applied’s growing thin-film solar business. So far this year it has signed contracts to build thin-film production lines for half a dozen solar companies in Europe and India. Unlike traditional solar panels, thin-film manufacturing involves depositing photovoltaic materials on large and slender pieces of glass or flexible material. Though not as efficient at converting photons into electrons as standard solar cells, the promise of thin-film is that will be cheaper to produce. (Unlike thin-film solar startups like Nanosolar, which are developing  next-generation technology based on copper indium gallium diselenide, or CIGS, Applied’s clients use an older amorphous silicon-based process.) "What we’ve done is lay out production lines for thin-film solar," says Gay. "One advantage we bring is integrating the tools with the production process in a solar factory." The aim is to cut the cost per watt of solar electricity by designing smooth-running and efficient factories.

Over at another Applied building I don a lab coat, booties and safety glasses – not quite the full-on bunny suit – and Teresa Trowbridge, an Applied senior manager in the solar group, takes me on a tour of the massive clean room where Applied builds its equally massive flat-panel manufacturing machines (photo above).  Sheets of glass as large as 7 by 8 feet (2.2 by 2.5 meters) are fed into the AKT Gen 8.5 and layers of semiconductors and circuitry are applied.  Once the machines are tweaked to handle thicker thin-film glass and a couple of other mechanical changes are made, they can use the same process to produce solar panels. 

CIGS thin-film would seem to threaten Applied’s silicon-based thin-film market. But Gay says CIGS thin-film processes still use layers of amorphous silicon – layers that can be deposited by Applied machines. "It grows our market," he says of efforts by startups like Nanosolar and Miasole. Applied also makes tools that can be used in the production of crystalline silicon wafers for traditional solar panels. The company has not yet done any big wafer deals but Gay hinted that some may be in offing. "There’s a real renaissance of solar," he says.

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Wells Fargo said today it has invested in Nevada Solar One, a $266 million, 64-megawatt solar power plant. The solar trough power station outside of Las Vegas was built by Spain’s Acciona Energy and will supply carbon-free electricity to two utilities. Northern Trust (NTRS) and JPMorgan Capital (JPM) joined Wells Fargo (WFC) in taking equity stakes in Nevada Solar One. The willingness of such heavy hitters to finance Big Solar is an encouraging sign for developers of other utility-scale solar power plants. While companies like Stirling Energy Systems and BrightSource Energy have scored deals with California utilities Southern California Edison (EIX), San Diego Gas & Electric (SRE) and PG&E (PCG) for massive solar power plants, obtaining financing to build the projects remains a big hurdle, particularly for technologies that have yet to be commercialized.  That isn’t the case with Nevada Solar One. The plant’s solar trough design is a tried-and-true solar technology, which no doubt took some of the risk out of the banks’ risk assessments. In a solar trough plant sun-tracking parabolic mirrors heat tubes of synthetic oil to create steam and drive an electricity-generating turbine.  Nine solar trough power plants built in the 1980s continue to operate in California’s Mojave Desert.

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photo: Blipem
How big is the opportunity to provide solar energy to the U.S. government? Consider that the federal General Services Administration alone controls more than 1,800 buildings containing 347 million square feet. Today the GSA announced it has taken a step to go green, signing a $6.9 million contract with solar systems provider SunEdison to build a 1-megawatt solar park on six acres next to the massive Denver Federal Center in Colorado. The photovoltaic arrays will meet about 10 percent of the one-square-mile complex’s peak electricity demand. It’s also a good deal for local utility Xcel Energy (XEL), which is under the gun to generate 20 percent of its electricity in Colorado from renewable sources by 2020.

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Green Wombat had lunch Friday with EnviroMission’s Roger Davey and Kim Forte, who flew into San Francisco from Melbourne, Australia, to promote their solar tower project. (Green Wombat chronicled the company’s six-year quest to build the solar tower in "Tower of Power," which appeared in the August 2006 issue of Business 2.0 magazine.) Of the various Big Solar technologies out there, the solar tower is one of the most out there: A tower between 1,600 and 3,000 feet is surrounded by a glass canopy a mile or two wide, which heats the air underneath.  Hot air rises and the tower operates as a vacuum. As the air is sucked into the tower, it produces wind to power an array of turbine generators clustered around the structure. The turbines in turn generate electricity. EnviroMission had purchased 24,000 acres of land on the edge of the outback in south east Australia to build the tower but got knocked back last October when it lost a bid for $57 million in government funding to cross-town rival Solar Systems. Since then, EnviroMission CEO Davey has focused on the U.S. market, studying potential sites in Texas, New Mexico and Arizona. In April, the company put in a bid to El Paso Electric (EE) in response to the utility’s request for proposals to supply 300 megawatts of renewable electricity. Davey says the company also has had contact with Arizona’s largest utility, Arizona Public Service (PNW), and California utilities like PG&E (PCG) and Southern California Edison (EIX). "Right now, the best market in the world for large-scale solar is the United States," says Davey. He says EnviroMission is currently reconfiguring the tower’s optimal size, having downsized it to qualify for the Australian government funding. But the first solar tower may well be built in China. EnviroMission’s joint venture with a Chinese development and construction company is close to receiving approval to build a kilometer-high solar tower outside Shanghai, Davey told Green Wombat. "I just got an email from China last night. Things are moving forward."

One of EnviroMission’s more interesting strategies is to work with Native American tribes. The company currently is conducting a site assessment of land owned by the Fort Mojave tribe that spans Arizona, California and Nevada. As the New York Times reported Friday, some Native American tribes in the Southwest are being riven by plans to build heavily polluting coal-fired plants on their land to take advantage of the rich mineral deposits.  Clean technologies like the solar tower might provide a green alternative.

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photo: toastforbrekkie
Bank of America is getting into the solar power business in a deal with Chevron to install five megawatts of solar arrays at schools in San Jose, California. Chevron Energy Solutions (CVX) will build and operate the solar systems while BofA (BAC) will finance and own the arrays and sell the green energy back to the San Jose Unified School District at "significantly" below-market rates. Bank of America is just the latest financial giant seeking a piece of the growing solar financing business. Wall Street powerhouse Morgan Stanley (MS) is financing solar arrays to be installed at Wal-Mart stores by SunPower (SPWR) while other players include GE Energy Financial Services (GE) and MMA Renewable Ventures (MMA). It’s an attractive market, particularly in California. The San Jose project, for instance, will qualify for $4.2 million in state incentives from the California Solar Initiative as well as federal investment tax credits. The school district expects to cut demand for utility-supplied electricity by 25 percent, saving $25 million over the life of the arrays. The project also includes a program to improve the energy efficiency of the school district’s buildings.

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photo: green wombat
California utility PG&E today will announce an agreement to buy 553 megawatts of electricity from a solar power plant to be built by Israeli company Solel in the Mojave Desert. That’s enough energy to light about 400,000 homes. It’s the largest deal of its kind, just edging out Southern California Edison’s (EIX) 2005 agreement to purchase 500 megawatts of solar electricity from a power plant to be built by Stirling Energy Systems in the Mojave. Solel’s 6,000-acre Mojave Solar Park is set to begin operating in 2011. The Solel station will be located near nine existing solar power plants built in the 1980s by Israeli company Luz (photo above) that continue to supply 354 megawatts of green energy to Southern California. It’s an appropriate locale. When Luz went bankrupt in the early ’90s after solar energy tax breaks evaporated and  natural gas prices fell, Solel picked up the company’s parabolic trough technology. (Luz, meanwhile, has been revived as BrightSource Energy, which is negotiating  a 500-megawatt deal with PG&E.) Solel will use a more advanced version of the solar trough for its Mojave project, which will contain 1.2 million mirrors and 317 miles of vacuum tubing. Just this week the company announced that it had upgraded the old Luz plants – most of which are now operated by FPL Energy (FPL) – with 30,000 new solar receivers.

Solar trough power plants use parabolic mirrors to track the sun and heat tubes of liquid to produce steam that drives electricity-generating turbines. The efficiency of solar troughs is quite a bit lower than other utility-scale technologies under development, but it’s tried and true and that’s what apparently attracted PG&E (PCG), which emphasized it was "commercially-proven." The San Francisco-based utility has been hedging its bets, signing deals with companies developing a variety of solar technologies. BrightSource Energy, for instance, will deploy fields of mirrors to focus the sun’s rays on a tower containing a water-filled boiler to create steam to drive a turbine. PG&E has also signed a deal with San Francisco solar startup GreenVolts to build a two-megawatt "plug-in" power plant that will use concentrating photovoltaic technology to produce electricity near urban areas.

PG&E’s deal with Solel is another sign that California has become a proving ground for Big Solar technologies. Stirling Energy Systems uses a giant solar dish to concentrate the sun’s rays on a Stirling heat engine. As hydrogen inside the engine expands it drives pistons that generate electricity. The Stirling dish is far more efficient than the solar trough but it has never been deployed on a large scale. Stirling Energy’s deals with Southern California Edison and San Diego Gas & Electric (SRE) have options to produce up to 1.75 gigawatts of solar electricity. Add in the Solel 25-year contract and – assuming PG&E reaches a final deal with BrightSource Energy – California potentially could have nearly three gigawatts of utility-scale solar power online within the next five or six years.

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photos: green wombat
A solar power plant that would supply green energy to hundreds of thousands of Southern Californian homes has come under attack – from environmentalists. Stirling Energy Systems has a contract to provide up to 900 megawatts of renewable energy to San Diego Gas & Electric from a 36,000 solar dish array to be built in the Imperial Valley desert. The first phase, a 300-megawatt, 12,000 dish array is to be completed by 2010. The rub: SDG&E (SRE) needs to build a $1.3 billion, 150-mile transmission line through a state park and other environmentally sensitive lands to get the renewable energy to its customers. Green groups are fighting the proposed Sunrise Powerlink, and in public hearings under way in San Diego they have cast the Stirling project as a technological Trojan horse being used by the utility to justify an environmentally damaging big power grab that could ultimately be used to deliver fossil-fueled electricity.

In testimony on behalf of the Center for Biological Diversity, a former executive with one-time Stirling Energy rival SAIC portrayed the Phoenix company’s Stirling dish as a costly and unreliable technology that would be hard-pressed to deliver on the SDG&E contract.  A Stirling dish concentrates the sun’s rays on a heat engine. As hydrogen inside the engine expands it drives pistons that generate electricity. Stirling Energy currently operates a six-dish prototype power station at Sandia National Laboratories outside Albuquerque.

"The commercial viability of the Stirling system is unproven at this time," testified Barry Butler, veteran solar power scientist, in an affidavit. "My opinion is that dish/Stirling technology holds much promise. By 2020, the technology could be a significant player on a commercial scale in the concentrated solar power category. However, there is no possible way that dish/Stirling solar can move from high cost prototype models with substantive reliability concerns to large-scale production of high reliability low-cost commercial models by 2008 and full operation of a 12,000 dish, 300 MW array by the end of 2010."  Butler based his testimony on SAIC’s experience with Stirling dish technology in 2002 when SAIC and Stirling Energy operated test dishes in Nevada. "Both SAIC and SES conducted maintenance on a nearly continuous basis to keep the units available for electricity production," Butler wrote in his affidavit.

Stirling Energy CEO Bruce Osborn, however, dismissed SAIC’s history with its Stirling dish technology, which it eventually abandoned, as irrelevant to his company. "It doesn’t seem realistic, or even reasonable, to compare SAIC’s problems and experiences to SES’ measured superior performance over extended periods," Osborn wrote in an email to Green Wombat. "Although the two systems are both called "Dish-Stirling Systems," they are in fact quite different in terms of the fundamental design approaches."

(more…)

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photo: green wombat
A coalition of western
utilities is studying the feasibility of constructing a solar power
plant in New Mexico that could generate up to 500 megawatts of green
electricity. The project is being managed by the Electric Power
Research Institute, a Palo Alto-based non-profit, and is being
supported by New Mexico utility PNM (PNM), Southern California Edison
(EIX), San Diego Gas & Electric (SRE), Xcel Energy (XEL) and
Tri-State Generation and Transmission. El Paso Electric (EE) may also
join the effort. The EPRI-led group will complete a study by the end of
2007 of various solar thermal technologies – which use the sun’s heat
to produce electricity – and then decide whether to proceed with the
design, permitting and construction of a solar power station.
Representatives from the National Renewable Energy Laboratory and
Sandia National Laboratory Will participate as well as consultants from
energy company Nexant and engineering firm Black & Veatch. A few
large-scale solar thermal power station projects are already underway.
Southern California Edison and San Diego Gas & Electric have deals
with Stirling Energy Systems
to generate up to 1.75 gigawatts of electricity from its Stirling dish
system. Northern California utility PG&E (PCG), meanwhile, is
negotiating with BrightSource Energy to provide 500 megawatts from solar power tower stations.

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photo: greenwombat
A coalition of western utilities is studying the feasibility of constructing a solar power plant in New Mexico that could generate up to 500 megawatts of green electricity. The project is being managed by the Electric Power Research Institute, a Palo Alto-based non-profit, and is being supported by New Mexico utility PNM (PNM), Southern California Edison (EIX), San Diego Gas & Electric (SRE), Xcel Energy (XEL) and Tri-State Generation and Transmission. El Paso Electric (EE) may also join the effort. The EPRI-led group will complete a study by the end of 2007 of various solar thermal technologies – which use the sun’s heat to produce electricity – and then decide whether to proceed with the design, permitting and construction of a solar power station. Representatives from the National Renewable Energy Laboratory and Sandia National Laboratory Will participate as well as consultants from energy company Nexant and engineering firm Black & Veatch. A few large-scale solar thermal power station projects are already underway. Southern California Edison and San Diego Gas & Electric have deals with Stirling Energy Systems to generate up to 1.75 gigawatts of electricity from its Stirling dish system. Northern California utility PG&E, meanwhile, is negotiating with BrightSource Energy to provide 500 megawatts from solar power tower stations.

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