BIG SOLAR POWER PLANT ACTION UNDER AZ SUN

2nd APS solar plant may surpass target set for green energy
Ryan Randozzo, May 22, 2009 (Arizona Republic)

SUMMARY
The 290-megawatt, $1.5 billion Starwood Solar I power plant, a solar power plant that will occupy 3 square miles of farmland 75 miles west of the Phoenix, AZ, city limits, will be built and run by Lockheed Martin Corp., financed and owned by Starwood Energy Group of Connecticut, and secured by a power purchase agreement (PPA) from Arizona Public Service Co. (APS).

Starwood Solar I – expected to be in operation by 2013 – will supply enough electricity to power ~72,500 homes while the sun shines and will have a storage capacity to drive turbines for 6 hours beyond sunset.

Though the project will not cost APS anything until it begins generating electricity, the PPA is estimated to be worth $100+ million a year and $4 billion over 30 years.

The solar power plant technology chosen by Lockeheed Martin and APS for Starwood Solar I is the parabolic trough mirror concept. It focuses sunlight reflected by the mirrors onto tubes of fluid. The heated fluid flows through the tubes to heat water-filled boilers to make steam that drives turbines that generate electricity.

The parabolic trough mirror technology to be used at Starwood Solar I. (click to enlarge)

During the day, the system will produce more heat than is needed to drive the turbine. The excess will be used to heat stored molten salts. Each day, as the sun’s potency fades, the healted salts will be circulated to the boiler to continue driving the turbine. It is estimated the hot molten salts can drive power generation an additional 6 hours.

Schematic of the molten salts storage concept. (click to enlarge)

The Arizona Corporation Commission (ACC), which regulates the state’s utilities, must approve the PPA. APS will ask ACC for an increase – it has not said how much – on the $3.17 per month it now adds to residential ratepayer bills for New Energy. The present cost of solar power plant-generated electricity is estimated to be 8% over that of electricity generated by natural gas. The utility’s justification for the price increase is that building solar capacity now will make future rates lower when there is a price on the emissions from fossil fuel sources.

APS sees no alternative to solar power plants and natural gas. It believes coal will be too expensive when there is a price on emissions and nuclear is just too expensive. The Chair of ACC believes nuclear is, at present, more expensive than solar energy.


COMMENTARY
The APS commitment to solar energy and solar power plant development in Arizona is altering the New Energy landscape there.

Starwood Solar I will be larger than the 250-megawatt Solana Generating Station announced last year for construction south of Phoenix in Gila Bend by multinational Spanish solar power plant developer Abengoa Solar Inc. and secured by a PPA with APS.

Schematic of Abengoa's Solana solar power plant.

With the 2 projects, APS will have twice the 4.5% New Energy installed capacity required by Arizona’s short-term (2014) Renewable Electricity Standard (RES) and be well on its way to meeting the 25% long-term (2025) requirement. The projects will secure APS its incremental RES requirements through 2019.

Meeting the terms of the state RES is a driving force behind the APS commitment to solar power plants. The only obstacle to meeting the 2014 RES requirement is the availability of financing. With the economic downturn, financial institutions that gobbled up projects like Solana before 2008 no longer have any need for the investment tax credits that were their main motivator for participation. As a result, the Abengoa project is still looking for financing and APS has moved back its operational date to 2011.

AZ has a solar crave-out in its RES - and APS will double it with its solar power plant plans. (click to enlarge)

Starwood Energy says that with its affiliated private-equity firm, plus DOE and stimulus fund monies, financing will not be an obstacle for Starwood Solar I.

The choice of Lockheed Martin to build and operate Starwood Solar I is based on the defense company’s engineering experience in satellite and missile programs. Solar technology is high on the Lockheed Martin agenda because it - along with a growing segment of the defense establishment - sees New Energy as a national-security issue, a way of developing domestic resources and moving away from dependence on fossil fuels at home and on the battlefield.

The parabolic trough mirror technology to be used at both Abengoa’s Solana installation and Starwood Solar I is the most established of the solar power plant technologies, having been first tried in California’s Mojave Desert in the late 1980s. There are several other prominent solar power plant technologies.

The solar power tower concept also heats liquid to boil water and drive a turbine but it uses a field of flat plate mirrors to concentrate the sun’s heat at one point instead of flowing the liquid through a field of parabolic mirrors. Like the parabolic mirror concept, the solar power tower concept allows for molten salt heat storage. Abengoa is developing solar power tower projects in Spain.

The solar power tower concept, another solar power plant technology compatible with storage. (click to enlarge)

Stirling Energy Systems (SES) has developed a unique generator that uses mirrors to focus the sun’s heat on a small hydrogen-powered engine. In trials, the SES device has demonstrated higher efficiencies than the other concepts. It remains unproven in real world circumstances but has won PPAs for 1,500+ megawatts from San Diego Gas and Electric and will soon get a big test in the California deserts outside San Diego.

Solar power plants have also been built using the familiar rooftop photovoltaic (PV) solar panels made from polysilicon or more advanced, thin-film materials. PV materials capture the light of the sun and transform it directly into electricity instead of using the sun’s heat to drive a turbine. They are a more tested and proven technology but not as appealing for solar power plants because the electricity they generate cannot be stored except in batteries. Battery storage is smaller in scale and more expensive than the molten salt heat storage concept being tested by APS.

A SunEdison PV solar power plant. (click to enlarge)

QUOTES
- Don Brandt, CEO, APS: "We've set our business plan in place, and solar is it…We view solar power and energy efficiency as our best alternatives now and in the best interest of our customers."
- Brad Nordholm, CEO, Starwood Energy: "The markets have been very thin but will be improving…For a project that has a strong (purchase agreement), strong sponsor and strong construction contracts, like we have, we believe the markets are open."
- Brandt, APS, on meeting the AZ RES: "We've got limited options between now and 2020…Coal is not viable because of the carbon costs and the expense, and I don't think anybody believes this country will build a new nuclear reactor before 2020."
- Kris Mayes, Chair, AZ Corporation Commission: "If we didn't build these renewable projects, rates would go up even more because we'd be reliant on coal-fired power generation, which is about to be taxed by Congress…I am a believer in investing in nuclear energy, but when you look at the cost, it is actually more expensive megawatt for megawatt compared with solar."
- Chris Myers, vice president of energy programs, Lockheed-Martin: "We view energy as a national-security issue…We are a global security company…We work on products that help protect the U.S., our friends and our allies. This (solar-power plant) still is part of the global security environment in my view."