By John Addison (10/4/11)
Chevron Technology Ventures launched an enhanced oil recovery (EOR) demonstration project using solar energy to recover oil. The 29MW project uses BrightSource technology including 7,644 mirrors to focus the sun’s energy onto a solar boiler. The steam produced is injected into oil reservoirs to increase oil production. The project is the largest of its kind in the world.
Desmond King, president of Chevron Technology Ventures, states, “This technology has the potential to augment gas-powered steam generation and may provide an additional resource in areas of the world where natural gas is expensive or not readily available.”
One of America’s oldest oil fields, the Coalinga Field began operations in the 1890s. Because the heavy crude oil produced at the field does not flow readily, it is more difficult to extract than lighter grades of crude.
Chevron currently enhances oil production from the Coalinga Field by injecting steam to heat the crude, thereby reducing its viscosity and making it easier to produce. Burning natural gas currently generates this steam. The solar-to-steam project will supplement the gas-fired steam generators and help determine the commercial viability of using heat from the sun instead of natural gas to generate steam.
BrightSource Addresses $4.7 Billion EOR Market
The 29MW solar-to-steam demonstration project is made up of 3,822 mirror systems, or heliostats, each consisting of two 10- by 7-foot mirrors mounted to a 6-foot steel pole. There are 7,644 mirrors that track the sun and focus the sunlight on a 327-foot-tall solar tower. Using heat from the concentrated sunlight, the solar tower system produces steam that is distributed throughout the oil field and then injected underground for enhanced oil recovery. The solar demonstration generates about the same amount of steam as one gas-fired steam generator. The project covers 100 acres, with mirrors covering 65 acres and 35 acres devoted to support facilities.
Extracting heavy-oil reserves, like the ones found at Coalinga, is a global challenge. According to a recent report by SBI, conventional oil recovery methods are only able to extract about 10% – 30% of the potential oil from any given reservoir, leaving nearly 70% – 90% of the reservoir’s oil in the ground.
“The energy intensity associated with extracting heavy-oil is extremely high. This presents a significant challenge to containing emissions and to the supply of fuel – such as natural gas – for this process,” said Paul Markwell, Senior Director, Upstream Research with IHS CERA. “Many of the known heavy-oil reserves around the world have limited access to cost-effective fuel sources and are located in areas with high solar resources. This provides an ideal environment for the use of solar thermal technologies for enhanced oil recovery.”
According to BCC Research, the global market for EOR technologies was $4.7 billion in 2009 and is expected to grow at a 5-year compound annual growth rate of 28%, reaching $16.3 billion in 2014.
Utility Market Even Larger for Solar Thermal
California utilities are required to have a 33 percent renewable energy portfolio by 2020, up from 20 percent today. Major investments are being made in solar PV and solar thermal. BrightSource Energy also provides solar thermal power plant solution for utilities. Called SolarPLUS, the offering combines BrightSource’s high-efficiency LPT power tower solar thermal technology with a two-tank molten-salt storage that can be used to deliver during peak hours when electricity is most valuable.
A BrightSource 392MW LPT solar thermal system is currently being deployed at the Ivanpah Solar Electric Generating System (ISEGS) in California’s Mojave Desert. Ivanpah, which started construction in October 2010, is the first project that will deliver power to serve the company’s signed contracts with PG&E and Southern California Edison. The project – which counts NRG Solar, Google and BrightSource as equity investors – is currently the largest solar plant under construction in the world. Bechtel is constructing the project.
BrightSource Energy with its leading solar thermal technology has raised about $530 million from investors that include VantagePoint Capital Partners, Draper Fisher Jurvetson, Morgan Stanley, Black River, DBL Investors, Riverwood, Calstrs, Google.org, Statoil Hydro Venture, Alstom, BP Alternative Energy, and Chevron. Solar thermal projects of 2,600 megawatts have received $1.3 billion in federal loan guarantees. BrightSource has filed an S-1 for an IPO.
Alan Salzman, Managing Partner of VantagePoint Capital Partners, states, “In working closely with BrightSource Energy over the past several years, they have greatly impressed us with their deep understanding of the solar thermal industry and technological prowess. The company represents an extraordinary business opportunity and a catalyst for transformative change to the energy world as we know it. It’s exciting to be part of it.”
The solar-to-steam project will be managed by Chevron Technology Ventures (CTV), a division of Chevron U.S.A., which champions innovation, commercialization and integration of emerging technologies and related new business models within Chevron. CTV is pursuing this goal through business units involving biofuels, emerging energy and venture capital.
By John Addison (4/8/11)
Solar power continues to grow by over 30 percent annually. Solar panels cost 100 times less than in the 1970s. Solar is clean, often generated at or near where electricity is needed, and not at the mercy of fluctuating coal or uranium prices.
The timing for solar energy growth is excellent. Voters have lost their appetite for spending billions to try to make coal clean while carrying the burdens of health damage. Similarly, most voters do not want to pour billions into loan guarantees for expensive nuclear power in the wake of the disaster in Japan.
In this decade, installed solar will drop to half its current cost. Such cost reductions will take more than lower costs of silicon panels and thin-film. Process and policy are now key areas for cost reduction. I recently attended the 3rd Annual Solar Leadership Summit hosted by SolarTech. With progress in these areas, solar costs will drop in half:
- Manufacturing scale
- Balance of System
- Right Size
- Right Place
- Improve Interconnect
- Markets not Monopolies
- Hybrid Systems
Ten solar manufacturers in China produce over one gigawatt of solar panels. High manufacturing volumes, lower labor costs, and favorable government policy have helped lower costs. Morningstar estimates that China has a 20 to 30 percent manufacturing cost advantage and that Trina is producing crystalline silicon cells for 78 cents per watt.
China may be winning the c-Si cost battle, but First Solar uses thin-film innovation to lower cost. First Solar is increasing manufacturing capacity from 1.5 to 2.3GW per year, including manufacturing in low cost countries such as Vietnam. Last year it improved its CdTe module efficiency from 11.1 to 11.6 percent to deliver 75 cents per watt cost. GE announced 12.8 percent efficiency with its CdTe panels. In 2013 it will have a new 400 MW plant online. Honda is betting on CIGS thin film. Venture capitalists are betting on exciting emerging companies as the efficiency and cost battle intensifies.
Balance of System
Dr. Alex Levran, President of the RE Division of Power-One, asked the industry to measure system efficiency in harvesting energy, rather than just evaluate inverters efficiency with specific solar modules. He identified areas for cost savings including eliminating the grounding of inverters. This is not done in Europe and it lowers inverter efficiency. Europe uses 1,500-volt systems. In the U.S., 600 volts is common. Modular inverters are need for quick repair. He feels that a 10-cent/watt goal is feasible in 2 to 3 years with the right component costs.
Experienced conference participants agreed that a major variability in annual electricity generated from a solar project is how well it is installed. Square feet can be used optimally or poorly. The slope of panels needs to be ideal. The quality of wire and installation affect longevity and output. SolarTech is working with industry groups and community colleges to insure a growing pool of skilled labor.
The highest U.S. growth will be in the middle market of 100 kW to 20 MW at locations near load centers. Urban commercial roofs, industrial yards, and parking structures are good examples. The price per watt benefits from economy of scale, flabor costs, shared balance of system. Installed solar is cheaper by the megawatt than kilowatt. These segments appeal to electric utilities that face RPS requirements in 30 states. Commercial distributed solar is often well matched with the location of electricity demand, minimizing transmission and distribution investment. For example, transit operators including LA Metro, New Jersey Transit, and MARTA are among the dozens of agencies heavily investing in solar in the 100kW to MW category. Public Transportation Renewable Energy Report
My wife and I recently rode our bicycles to a 5 MW solar installation in the middle of San Francisco. The panels are mounted at ground level on the cement cover of a local water reservoir. Labor and construction costs are lower on the ground than on old roofs that may need to be upgraded to support the weight and maintenance of solar. Near ground, such as erecting steel grids to cover parking structures, can also be more cost effective than roof-mounted systems.
A public utility can make it easy, difficult, or impossible to connect to their system. Follow the money. Some solar makes them money; some costs them. Some projects provide RPS credit; some do not.
Markets not Monopolies
I once shared lunch with a public transit manager who wanted to cover a transit line with megawatts of solar power and a water wholesaler who wanted to buy the power. It was a win-win and the numbers worked, except that they were legally required to put the local public utility in the middle. The utility wanted to build a new natural gas power plant. Somehow, the solar numbers no longer worked. Laws need to be changed, so that micro grids and markets can work without utility monopoly power.
Installation of solar power is complicated by having 21,500 local codes to deal with beyond the National Electric Code. Permitting can take weeks. Inspection outcomes and reworks are variable costs due to lack of one national code. Promising is DOE’s Solar America Board of Codes and Standards (Solar ABCs).
“The solar industry is at a critical turning point, where the technology is here, yet the overhead process costs keep prices high and force customers to navigate through a complicated process,” said Doug Payne, executive director of SolarTech. “There is no reason that it should take three months for a customer to adopt solar, when it takes half that time to remodel your kitchen and only a few days to get a new water heater. The Solar Challenge aims to make solar adoption easier and faster for customers, while simultaneously creating the local jobs and economic growth that follow. “
Solar financing needs to be as easy as getting a mortgage loan. Instead, many solar projects fail to get financed. Lenders need more certainty in the annual output expected from projects for 20 years. Standard spreadsheets and models would help. More certainty about government policy or an established carbon market would greatly help. Major players that could aggregate many projects would add diversity, certainty and simplify rating and securitizing large portfolios. In Europe, feed-in tarrifs have greatly simplified financing.
Concentrated photovoltaics, in the lab, have demonstrated 41 percent efficiency; roughly double the c-Si being installed. Now what is needed is low cost manufacturing of CPV, 20-plus year reliability, and effectiveness over a range of light-source angles. Also, in the pipeline are gigawatts of concentrating solar-thermal utility scale plants. The big challenge for these plants is years of site approval and high-voltage lines to load centers.
Mark Platshon, Vantage Point Venture Partners is optimistic that installed solar will reach $2 per watt. The magic dollar per watt would require PV to be reduced to 30 cents per watt. Hybrid systems could lower the total cost taking advantage of common infrastructure and interconnect with hybrid systems such as solar and natural gas, roof PV and BIPV, and solar on existing light and power poles. Victor Abate, GE’s VP of Renewable Energy Business, stated the GE has sold 60 megawatts of its thin-film solar to NextEra, an existing GE wind customer. Abate said, “We are an energy company and expect to supply full solutions.” He suggested that if ten percent of GE’s wind farms added hybrid solar, the new 400MW GE factory would be sold out for six years.
Solar power often delivers when electricity is most needed, such as hot summer days when air conditioning is blasting. Storage of off-peak solar for peak use would add to solar energy’s value. One approach is concentrating solar thermal with molten salt storage. For PV, utilities are piloting a variety of promising grid storage, some as large as 150MW using compressed air, advanced batteries, and even flywheels. In the next decade, major storage could come from electric vehicle to grid.
Thin-film solar grew 102 percent annually from 2006 to 2010, as costs fell. By 2009, thin-film reached 23 percent of total solar market share. By 2013, it should reach 30 percent. Over 160 companies currently compete in the thin-film space, with First Solar being the billion-dollar giant who is the cost leader with large-scale electric utility projects.
Step price drops have been great for customers, but brutal for the 160 competing manufacturers. Investors now debate – Is thin-film more hype than hope, or will reaching grid-parity pricing cause breakthrough success for the leaders. GTM Research dives into the complex issues of cost curves, investor risk, and market demand, to forecast the future for the industry.
Amorphous Silicon (a-SI) is forecasted to dominate with 5.8 GW over CdTE and CIGS with 2.4 each by 2012. An intense competitive battle is forming between the United States, Asia, and Europe. U.S. will grow all three thin-film technologies. A-Si will be the predominant production from China and Taiwan, but they will heavily fund R&D in CIGS which has already improved to 12 percent efficiency. Module costs are forecasted to reach 80 cents per watt in 2012 for multiple technologies.
Long-term only a few operationally-efficient manufacturing giants will enjoy large market share and reasonably margins. Other players will need to be adept in focusing on value-added applications, specific market segments, and system integration.
As of 2010, only two thin film companies have produced in excess of 100 MW annually. The cost structure of most amorphous silicon, considering its low efficiency, is barely competitive with crystalline silicon, and CIGS producers have encountered technical issues in manufacturing that have forced most of them to delay commercial production, a situation which has persisted since 2007. To make matters more difficult, capital constraints led banks and developers to shy away from thin film in favor of more mature and abundant crystalline silicon modules for projects in 2009. Yet thin film will continue with high growth and market share gains. There will be winners, consolidation, and bankruptcies.
GTM’s 200-page report peels away the layers of hype and speculation that have traditionally shrouded thin-film PV to provide a comprehensive, granular, and objective assessment of thin-film. Packed with data points, color, and analysis, Thin Film 2010 assesses thin film’s impact on the global PV market by analyzing all relevant factors that influence demand for thin film, and how these factors interact when determining technology selection in PV markets. To download report summary or purchase the GTM Report. This Comprehensive Report Includes:
- Manufacturing processes
- Technology/operational characteristics (efficiency, substrates, temperature coefficient, area footprint, weight, spectral response, kWh/kW performance)
- Module costs, prices, gross margins, and balance-of-system costs
- Feasibility by market application
- Capacity and production estimates
- Market share and market sizing estimates
- Comprehensive summarization and analysis of 2009 events and developments
- Detailed profiles of the top 65 global thin film companies in the market