SOLAR POWER PLANTS VS. DISTRIBUTED GENERATION

Politics may make future of solar energy "small"
Peter Henderson (w/Braden Reddall, Nichola Groom, Christoph Steitz and Lisa Shumaker) July 9, 2009 (Reuters)

SUMMARY
Transmission is urgently needed, transmission isn’t happening. Deal with it.

One way to deal with it is distributed generation. Rooftop solar systems are one of the most common types of distributed generation. A system on the roof needs no new transmission system, it plugs into existing wires and it sends power into the grid during the hottest part of the afternoon, just when demand is peaking.

Some argue the answer to global climate change, at least in the near future, is not big wind installations and solar power plants but aggressively improved Energy Efficiency and massively ramped up distributed generation.

Much of the money to build solar energy in the short term is going to come from utilities. The question being asked everywhere in the solar energy world right now is whether the utilities will be investing in solar power plant builders like BrightSource Energy, Sterling Energy Systems, Ausra and Abengoa Solar or whether they will be investing in solar panel makers like SunPower Corp, Suntech Holding and First Solar.

California's distributed rooftop generation is moving ahead fast. (click to enlarge)

California is, as usual, at the cutting edge of the controversy. One obvious reason: California has the sun. A less obvious reason: California’s Renewable Electricity Standard comes due in less than 18 months.

By the end of 2010, California’s utilities must be getting, or at least have contracts in place to get, 20% of their power from New Energy sources. Early investments in residential rooftop systems gave way to big buys into solar power plants when it became clear homeowners weren’t buying rooftop systems fast enough to meet the RES deadline.

The environmental and regulatory hurdles required to get circumscribed chunks of the desert approved for solar power plants were daunting but the builders were managing to deal with them when a much more troublesome obstacle emerged.

Getting solar energy-generated electricity from those circumscribed desert acres to populous demand centers necessitates lines running from transmission switching stations to the generation locations. In many cases, it also necessitates new lines from the substations to the population centers. Those new lines traverse everything multivarious California contains from innocent suburban neighborhoods to nefarious private properties to desolate wastelands to the habitat of rare birds, lizards and worms. Getting permissions and approvals to cross all that has become a nightmarish maze from which few of the needed transmission proposals has emerged.

Even this year, with all its financial difficulties. (click to enlarge)

Utilities now have another better idea: "Clean" coal. No, just kidding. The idea is to lease rooftops big and small, distributed throughout the populous cities and languishing under the same sun as the deserts, and construct their own systems in partnership with the rooftop owners and solar system installers.

The California Public Utilities Commission (CPUC) recently completed 33% Renewables Portfolio Standard Implementation Analysis…, a study on how the state can realize its next RES which – if policymakers have their way – will require utilities to get 33% of their power from New Energy sources by 2020.

Given the regulatory obstructions and political roadblocks to the needed transmission, a massive build out of distributed generation has a lot of appeal. With a global fall-off in the price of silicon, panel prices are dropping and may sooner or later be cost-competitive, though they are at present more expensive than solar power plants even with the cost of transmission added to the power plant price. Rooftop installations, on the other hand, create more jobs than building solar power plants and can be put into service much more rapidly.

Utilities are driving the growth. (click to enlarge)

The photovoltaic (PV) panels in distributed rooftop installations capture the sun’s light and turn it into electricity. Solar power plants capture the sun’s heat and use it to boil water to drive a turbine that generates electricity.

The one very special and unique advantage solar power plants offer over distributed generation is the potential for large-scale storage capacity. Rooftop systems generate when the sun is shining and, unless there is a costly battery system available, are of no service when the sun is down or blocked. The newest power plant installations are proving the concept of using molten salts to hold the heat they capture. Theoretically, enough extra heat can be captured and stored to keep the water boiling and the turbine generating throughout the night.

The question of solar power plants versus distributed PV generation is much more than a California controversy. Congress may before the end of the year institute a national RES and every state with sun will have to decide which kind of solar energy is best in its circumstances. If a state chooses the less costly solar power plant option with its promise of storage, that state must remember one thing: Although the energy bill provides some incentives for new transmission, it does not eliminate the challenges of regulatory and environmental obstacles to needed transmission.

Germany’s world-leading installed solar capacity could be an example of how effective distributed generation is. With a landmark feed-in tariff as the incentive driving uptake, 90% of Germany’s installed capacity is rooftop solar distributed generation.

Solar power plant technolgy is ready. (click to enlarge)

COMMENTARY
It is challenging to get past environmental regulations governing the building of big wind installations and solar power plants but it is much much more challenging to get past environmental regulations governing new transmission infrastructure.

Transmission to us interruptus, case in point: Sunrise Powerlink. San Diego Gas & Electric (SDG&E) has been planning a major Sterling Energy System solar power plant for years. The power purchase agreement (PPA) for 1300 megawatts was finalized in 2007. The power was to be delivered from the central California deserts to the San Diego Bay area by Sunrise Powerlink, a new transmission branch specifically designated for the solar installation. None of the otherworldly Stirling generators have been installed. The technology is ready but the transmission system remained, until a few months ago, suspended in the regulatory approvals process. Now that the Bureau of Land Management (BLM) of the Department of the Interior (DOI) and the CPUC have approved, the obtaining of rights of way can proceed and, eventually, the lines can be built.

Budiling transmission can be problematic. (click to enlarge)

Distributed generation, case in point: Edison International's Southern California Edison (SCE) got approval from the CPUC a few months ago for what will be 500 megawatts of distributed rooftop systems. Installation of a pilot project, using First Solar thin film panels, has already begun. SCE will eventually put something like 4 square miles of panels on 300 big rooftops across California. At current rates of progress, SCE may complete its ambitious plans before the transmission needed for California’s many solar power plants every carry an electron.

33%, case in point: 33% Renewables Portfolio Standard Implementation Analysis…, by the CPUC, shows California cannot get 33% of its power from New Energy sources in 2020 (or anytime) without a lot of new transmission AND a lot of distributed generation.

Ausra's unique technology and other solar power plant technologies offer the promise of solar energy storage and 24/7 generation (click to enlarge)

QUOTES
- Bob Fishman, CEO, Ausra: "You'd be amazed at the number of people who come out against solar projects…'Not-in-my-backyard' rejection of solar projects rivals opposition to fossil fuel plants…Nobody wants to give up electricity, but nobody wants to see it get made…"
- Judith Ikle, program manager for procurement of renewables and climate mitigation, CPUC: "We really may be in a paradigm shift…"
- Jaclyn Marks, utilities commission analyst and author of the CPUC 33% report: "Distributed generation has a lot of potential. A lot of potential. But the price has to come down, there are potential issues of grid integration that we need to better understand,"
- Gil Alexander, spokesman, SCE: "It's more power where it's needed more rapidly…"
- Jim Rogers, CEO, Duke Energy: "They're not really serious about the transmission…Nobody's really said the emperor's has no clothes on, but you're getting the worst of both…"