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Archive for the ‘solar energy’ Category

In The New York Times on Friday, I write about how Suntech has become the first Chinese solar company to win a major U.S. power plant contract:

Suntech, the Chinese solar giant, has won a contract to supply photovoltaic panels for a 150-megawatt project in Arizona, marking China’s entry into a lucrative United States power-plant market dominated by American companies.

The project is the first phase of a planned 700-megawatt project called Mesquite Solar to be built about 40 miles west of Phoenix and operated by Sempra Generation, a subsidiary of Sempra Energy. A California utility, Pacific Gas & Electric, will purchase the electricity produced by the power plant’s first phase, called Mesquite Solar 1.

As photovoltaic panel prices have plummeted in recent years, utilities have increasingly turned to developers to build massive megawatt projects. American companies like First Solar of Tempe, Ariz., and Silicon Valley’s SunPower have captured the bulk of those contracts.

For instance, last month Southern California Edison signed contracts with SunPower to buy 711 megawatts of electricity from three large photovoltaic projects.

While Chinese companies like Suntech, Yingli Green Energy and Trina Solar have grabbed a significant percentage of the American residential solar market — supplying nearly 40 percent of panels in California — they had shied away from huge utility-scale projects.

Suntech has supplied solar panels for much smaller utility projects but expects large power plants like Mesquite Solar to account for a growing share of its United States revenues, according to Andrew Beebe, the company’s chief commercial officer.

“We think it is significant for us to win a project this large but I don’t know if it’s a China-U.S thing,” Mr. Beebe said in an interview. “We are a global company and we sell all over the world though the vast majority of our product is manufactured in China.”

Last year, Suntech opened its first American factory in Goodyear, Ariz., about 30 miles from the Mesquite site. Mr. Beebe said the factory, which is expected to have a capacity of 50 megawatts by the end of 2011, will supply less than 10 percent of the solar panels for Mesquite Solar 1.

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I wrote this story for Reuters, where it first appeared on November 30, 2010.

With NRG Energy’s announcement on Tuesday that it will invest $450 million investment in a California photovoltaic project, the New Jersey-based power provider has pledged a total of $750 million for big solar plants in the past two months.

A new report from GTM Research indicates why NRG sees such sunny prospects for the solar business. According to the researchers, utilities in the United States already have signed contracts for 5,400 megawatts’ worth of photovoltaic power plants that will be built by 2014 with another 10,100 megawatts in negotiation.

The U.S. utility-scale photovoltaic market is expected to grow from $1 billion in 2010 to $8 billion by 2015, the report said.

“The global PV industry is increasingly turning its attention toward the U.S. utility PV market as a driver of global demand over the next five years,” the report’s authors wrote. “Indeed, conditions appear right to support massive growth.”

That growth is being driven by a 50 percent fall in the price of photovoltaic modules since 2009 as well as state mandates that require utilities to obtain a certain percentage of their electricity from renewable sources.

The price of natural gas, though, will play a critical role in the competitiveness of solar power plants.

While solar farms can produce electricity at near-competitive rates with natural gas-fired power plants during peak demand in some states, the plunge in natural gas prices in recent years has put more pressure on photovoltaic developers to lower costs.

“From the perspective of the U.S. utility PV market, the importance of being within competitive range of a natural gas project is nearly as valuable as becoming cheaper, the report said. “In order for the U.S. utility market to take off, the key argument to be made by developers to utilities, and by utilities to their regulators, is that PV can deliver power at a competitive rate with other peaking facilities.”

No surprise that the largest solar market remains in California, where the state’s three big investor-owned utilities hold contracts for 78 percent of the nation’s 5,400 megawatt pipeline of projects.

But there is one dark cloud that threatens to rain on this photovoltaic parade: Project financing.

As part of the federal stimulus package, the government offered renewable energy developers the option of taking cash grants to cover 30 percent of a project’s costs in lieu of an existing investment tax credit. With the cash grant program expiring at year’s end, developers will have to turn to so-called tax equity investors who take the investment tax credit in exchange for cash to finance power plant construction.

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I wrote this story for Reuters, where it first appeared on November 30, 2010.

A subsidiary of NRG Energy on Tuesday said it will invest up to $450 million in a 250-megawatt photovoltaic power plant to be built by Silicon Valley’s SunPower on the central California coast.

The New Jersey-based power provider, which operates a fleet of fossil fuel and nuclear plants, has emerged as significant investor in solar projects.

In October, NRG agreed to invest $300 million in BrightSource Energy’s 370-megawatt Ivanpah solar thermal power plant now under construction in the Mojave Desert in Southern California. The company has also struck a partnership with eSolar, a Pasadena, Calif., startup, to build solar power plants in the desert Southwest. And NRG owns a 20-megawatt photovoltaic farm in Blythe, Calif., and has other solar projects under development in Arizona, California and New Mexico.

In the deal with SunPower, NRG Solar will take ownership of the California Valley Solar Ranch in San Luis Obispo County and responsibility for financing the project. SunPower said on Tuesday that it is seeking a federal loan guarantee to build the solar farm and has received a draft term sheet from the United States Department of Energy.

SunPower, a solar power plant developer and one of the U.S.’ largest manufacturers of photovoltaic modules, will build and operate the San Luis Obispo project. The company, based in San Jose, Calif., has a 25-year contract to sell the electricity generated by California Valley Solar Ranch to utility PG&E. Construction is set to begin next year and when the project is completed in 2013 it will produce enough electricity to power about 100,000 homes, according to the company.

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photo: Todd Woody

I wrote this story for Reuters, where it first appeared:

China’s increasing domination of a rapidly expanding solar module industry is revealed in a report that shows that Chinese companies are expected to account for nearly 72 percent of new photovoltaic manufacturing capacity this year.

For instance, China’s LDK Solar will add the most new capacity in 2010 with 1,420 megawatts coming online, according to iSuppli, an El Segundo, Calif., technology research firm.

Norway’s REC took second place with 1,090 megawatts of manufacturing capacity expected to be added by year’s end.

But Chinese companies held seven of the top 10 positions on iSuppli’s list, representing 6,445 megawatts of manufacturing capacity.

Suntech Power Holdings will add 1,025 megawatts while JA Solar will expand manufacturing by 1,000 megawatts. Yingli Green Energy will add 800 megawatts of capacity by the end of the year while Trina Solar Energy will install an additional 700 megawatts.

“I go to Shanghai every six weeks and the scale of the operations is just jaw dropping, absolutely jaw dropping,” Conrad Burke, chief executive of Innovalight, a Silicon Valley solar company, said in a recent interview.

Innovalight itself abandoned plans to manufacture its own photovoltaic panels in late 2008 and now licenses a patented “silicon ink” to JA Solar and Yingli that boosts the efficiency of their solar modules.

“There’s nothing in California that even comes close to the scale in China,” said Burke.

In fact, earlier this month, Solyndra, a Silicon Valley startup that makes thin-film solar panels, announced it would shutter an existing factory in Fremont, Calif., and delay plans to expand a new manufacturing plant built with a $535 million federal loan guarantee. The company cited competition from low-cost Chinese manufacturers as a major factor in its move to scale back production.

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photo: Tessera Solar

I wrote this story for Reuters, where it first appeared:

The California Energy Commission has temporarily withdrawn approval of a controversial solar power plant by NTR’s Tessera Solar after opponents protested that the 663.5-megawatt Calico project had been improperly licensed.

California aims to get a third of its electricity from renewable energy by 2020 and the $2 billion plant is an important step toward that goal.

An attorney for California Unions for Reliable Energy had argued in a November 11 letter that the energy commission, which licenses large-scale solar thermal power plants, had not filed required written findings about Calico environmental consequences when it approved the project on October 28.

The order was issued late on Friday and the commission will take up the decision again on December 1, but the Sierra Club told Reuters on Monday that the environmental group may mount a legal challenge to Calico due to its impact on the imperiled desert tortoise, fringe-toed lizard and other wildlife.

“We are considering litigation,” Gloria D. Smith, a senior staff attorney with the Sierra Club in San Francisco, said in an email.

California Unions for Reliable Energy also is contemplating a legal challenge to the Calico decision on environmental grounds, said Marc D. Joseph, an attorney for the group.

Calico is one of seven huge solar thermal power plants that the energy commission has licensed over the past three months so developers can begin construction by the end of the year to qualify for a federal cash grant that covers 30 percent of a project’s cost.

Tessera has signed a contract to supply electricity generated by Calico to utility Edison International’s Southern California Edison, which is counting on the project to help it meet its renewable energy targets.

On Friday, Karen Douglas, the energy commission’s chairman, issued an order withdrawing the date approval would go into effect for Calico.

Douglas wrote that the decision did not mean that the commission agreed with the California Unions for Reliable Energy that the commission’s action had been improper.

Sean Gallagher, Tessera’s vice president of market strategy and regulatory affairs, described the issue as a procedural one that the commission could easily correct.

“There were some clerical errors in the way the documents were issued,” he said. “They are not going to address the substance of the decision.”

The company plans to deploy 26,540 solar dishes called Suncatchers at Calico. Resembling giant mirrored satellite receivers, each Suncatcher is 40 feet high and 38 feet wide and generates electricity by focusing the sun on a Stirling engine to heat hydrogen gas. As the gas expands, it drives pistons to generate electricity.

The commission approved Calico only after Tessera agreed to reduce its footprint nearly in half to 4,613 acres in Southern California’s Mojave Desert. The revised configuration would reduce the impact on the desert tortoise by 79 percent, the commission said.

But in an October 20 letter to the commission, Smith argued that even a downsized project would prove devastating to protected wildlife.

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photo: Amonix

I wrote this story for Reuters, where it first appeared:

As solar panel prices have plummeted over the past year, photovoltaic power plants have become a more attractive option for utilities under pressure to meet renewable energy targets.

Case in point: Late last week utility Southern California Edison announced it had signed contracts for 239.5 megawatts of electricity to be generated by 20 small-scale photovoltaic farms.

“Photovoltaics are definitely more cost competitive than they were just a couple of years ago,” said Mike Marelli, director of contracts for renewable and alternative power at Southern California Edison. “We’re seeing just a wild response to our solicitations for projects.”

The utility has inked deals in past years for huge solar thermal power plants that can generate 500 megawatts or more. But those projects — which focus large arrays of mirrors on liquid-filled boilers to generate steam that drives electricity-generating turbines –  need vast stretches of desert land.  Transmission lines must often be built or upgraded to carry the power to coastal cities.

The photovoltaic farms, ranging in size from five megawatts to 20 megawatts, are designed to be built near existing transmission lines or substations and plugged into the grid. And in California, for instance, photovoltaic power plants do not undergo the extensive environmental review required of big solar thermal projects, meaning they can be built much more quickly.

In the power purchase agreements reached last week, Southern California Edison also for the first time placed bets on a technology known as concentrating photovoltaics – -CPV — signing contracts for 28.5 megawatts of electricity to be generated by four projects using technology supplied by Amonix,  a Seal Beach, Calif., company.

Resembling supersized solar panels, each Amonix CPV power generator is 77 feet by 50 feet and produces 72 kilowatts of electricity by using plastic lenses to focus the sun on tiny but highly efficient solar cells.

The panels are more efficient than conventional photovoltaic modules but high production costs, technological challenges and other hurdles had kept CPV on the sidelines with just a few small installations operating around the world.

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photo: Todd Woody

I made my debut on Reuters on Thursday with a scoop on one of China’s biggest solar companies forming a joint venture with California’s SolarReserve to build photovoltaic power plants in the United States:

A subsidiary of China’s GCL-Poly Energy Holdings Ltd has formed a joint venture with SolarReserve, a California developer, to build photovoltaic power plants in the United States.

The deal, to be announced Thursday, marks a major bid by a Chinese solar company to enter a market dominated by European and U.S. firms. Last week, GCL obtained a commitment from Wells Fargo to provide $100 million in financing for its solar projects.

GCL is China’s largest manufacturer of polysilicon and wafers used to make photovoltaic modules. The company also builds conventional power plants in China along with wind and solar projects. The state-owned China Investment Corporation owns a 20 percent stake in GCL.

“We value the U.S. market as one of the most important markets for us and we wanted to get into the development side of the game,” Yumin Liu, president of GCL Solar Energy Inc, the company’s San Francisco-based subsidiary, said in an interview.

“To support the continued growth of the company we have to have a portfolio for years to come. The only way to do it economically is to secure a pipeline of projects.”

GCL will acquire a 50 percent share of SolarReserve’s 1,100-megawatt project pipeline in photovoltaics for an undisclosed price.

SolarReserve, based in Santa Monica, California, has focused on developing large solar thermal power plants using molten-salt technology licensed from United Technologies Corporation. This type of plant is not part of the joint venture.

Kevin Smith, SolarReserve’s chief executive, said the startup last year began to acquire control of 40 sites throughout the desert Southwest that would be suitable for smaller-scale photovoltaic-power projects. The company hired Macquarie Capital to search for a partner to share development costs.

“The U.S. market is a hugely competitive market on pricing, given the current policy structures and limited federal government support for renewable energy,” Smith said. “Partnering with a low-cost Chinese company gives us insight on how to maintain competitiveness in these markets and we will learn a trick or two.”

He said that SolarReserve will handle land acquisition, permitting and negotiating power purchase agreements with utilities while GCL will oversee procurement of solar panels and construction. Work on 400 megawatts’ worth of projects should begin in 2011.

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