Analysis of US Concentrated Solar Power market

CSP Today catches up with Bloomberg New Energy Finance's solar associate, Nathanial Bullard, to discuss issues currently affecting the US CSP sector.

CSP Today: To what extent is the clean energy manufacturing tax credit likely

to benefit the US CSP sector, in terms of increasing components
availability (and subsequently driving down the cost of components)?

Nathanial Bullard: The manufacturing tax credit, (which so far is only ‘conditional' - no money has actually gone out the door), has already come the way of several components manufacturers, such as Saint-Gobain and Flabeg, so it is already proving useful to the sector.
The manufacturing tax credits could help manufacturers bridge the way to building the bigger systems that are required in the US (unlike the smaller systems in Spain, due to the 50 MW cap).
So yes, it is likely to benefit US players seeking to build larger plants that require larger components.
Will it attract new manufacturers? Any new manufacturer needs to have a very deep balance sheet in order to be considered ‘bankable' by the project finance community.
The results of some of the recent research that we carried out indicated that the investor appetite for new entrants is not very big, because there is already so much capital in play and, from the lenders perspective, there may not be any additional return on investment in new or unproven equipment.

CSP Today: Are US CSP developers being penalised by the imposition of stringent environmental requirements, compared to conventional power generators? Are conventional generators likely to face similar restrictions soon and if so, to what extent would this level the playing field in terms of energy prices?

Nathanial Bullard: Let's face it, without the renewable portfolio standards, utilities would only be building gas. That said, I'd be surprised if any new conventional power plants were built with wet-cooling in the US' south-west.
There is much more legwork in the permitting regime for solar thermal than there is for gas. The California Energy Commission's permission process is based on that for gas and coal plants, so it offers some precedent for environmental and siting concerns.
However, a CSP plant has a much, much greater physical footprint, making the burden of site assessment much greater and more time-consuming.
And the federal government is still drafting its ‘environmental impact assessment' for CSP, so there is not yet a standardized approach for calculating the environmental impact of solar thermal.
It is in this sense that solar thermal developers are at a first-mover ‘disadvantage'; the challenge is that they have to deal with the permitting challenge on top of the huge challenge of developing a new resource. They have to establish a whole new set of processes to create that new resource.
Gas developers, on the other hand, have steadily developed gas plant processes to comply with permitting over decades, rather than having to do it all in one go.

CSP Today: A number of significant deals have been announced in recent months
including that of Brightsource's DoE loan guarantee and eSolar's deals with Penglai and Ferrostaal. To what extent is solar tower technology gaining ground on parabolic troughs in terms of being a 'proven' technology?

Nathanial Bullard: It really depends on what constitutes ‘proven'. If it is based on the willingness to pursue technologies, then probably: ‘yes'. Theoretically, power towers have the highest heat and highest efficiency system, with the highest capacity factor.
Power tower developers have been playing an intelligent game by incorporating performance testing as well as gaining performance guarantees from their development and technology partners, and utilities appear to be buying into this.
But in terms of MW online, you now have PS10 (11MW) and PS20 (20MW) in Andalusia, then Brightsource's SEDC test plant in Israel (4-6MW), and eSolar's Sierra Tower (5MW) and then Torresol's gemasolar plant in Spain (17MW).
When you compare that to the installed capacity of parabolic troughs, the trough technology portfolio is larger.

CSP Today: Members of the US air force recently voiced concerns that CSP projects in areas such as Lincoln County (which is included in the BLMs designated acreage for its programmatic EIS) could pose problems due to several factors, including glare from the solar field; the potential for sonic boom to fracture the mirrors; and potential flight path interference due to the presence of solar towers. Has the US Air Force previously voiced concerns relating to CSP technology and is opposition from the US Air Force likely to present a hurdle for other proposed CSP projects?

Nathanial Bullard: I think it was during Solar Reserve's application that this concern was initially raised.
It could potentially become a real issue, given that there is not much room for negotiation when it comes to dealing with official departments such as the US Air Force.
The tower height issue is a simple flight rule issue - there may be willingness on behalf of the Air Force to accept a tower that is 200 meters tall. I believe that there were visibility issues with the parabolic troughs in the Fort Irwin project that is being built by Acciona.
These issues may ultimately limit the potential field of available sites - certainly, it could limit the sites that are of immediate attraction.
The other problem here is that, not only are desert areas test-flight zones; they also tend to be public lands.
But at the end of the day, a good developer will find a way to get projects developed.

CSP Today: Is it likely that international standards will emerge for CSP components in the near future? What are the challenges relating to creating CSP industry standards and how do developers stand to gain from the introduction of standards?

Nathanial Bullard: Standards would certainly strengthen the ability for developers to sell the plants on. I imagine they would be welcome for certain aspects, such as the power block and potentially, mirrors.
But, as is the case in the PV sector, there may be certain components that are exempt - certain types of equipment are perceived by the industry as being bankable because of their sponsor, not because of a standard.
And some smaller and potentially site-specific components, such as mounting poles, might not end up with standards.
Challenges in creating a standard would arise form regional disparities. In the US, for example, developers would be using a 250MW power block as opposed to a 50MW power block in Spain.
At present, a strong sponsor tends to be the industry standard - a manufacturer with a proven track record.
Industry standards might lower the barrier to entry in this respect, but at the end of the day, while developers may welcome competition as a means of driving down costs, the financial community tends to be less supportive of new entrants and would probably insist on using the larger, commercially proven manufacturer.

Nathanial Bullard will be presenting at the 4th concentrated solar power summit US, June 23-25, san Francisco. For more information on how to attend, please visit the following website:

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