Tuesday, August 23, 2011

Shock technology shift at huge California solar plant | SmartPlanet

Shock technology shift at huge California solar plant | SmartPlanet

It had planned to use solar thermal –also known as concentrated solar power (CSP) - at Blythe, using parabolic mirrors (pictured above) to focus the sun’s rays on the heating fluid. But it disclosed last week that its U.S. subsidiary, Solar Trust of America, will instead use solar PV panels for the first 500MW that it builds.

“At the moment, the U.S. market is clearly focused on peak load supply,” Solar Millennium CEO Christoph Wolff said in a press release. “Due to the drastic drop in PV prices, we agreed with the Californian utility to convert the power purchase agreements to PV. The simultaneous sudden price increases for raw materials and construction would have reduced our return on equity and risk provisioning for our construction share in the Blythe CSP project to marginal values.”

Wolff said that the company remains generally committed to solar thermal. “Our long-term strategy remains unchanged,” he said. “We see solid demand for CSP in the world’s growth markets such as Africa, the Middle East, India and China. This is also true for Southern Europe where we have just achieved financial close on our fourth CSP plant in Spain.”

He explained that CSP suits areas of the world that want solar power for base load electricity, in contrast to what he said is the peak load emphasis in the U.S.

“According to our understanding, the market differentiates between base load solar-thermal electricity generation or concentrated solar power on the one hand and photovoltaics for peak load demand on the other,” he said.

“Whereas the electricity from solar-thermal power plants was more economic only less than two years ago, this relation has changed completely due to the sharp drop in PV module prices, particularly from Asia. Due to its suitability for base load supply, many regions still attach great value to CSP in their energy mix, thus supporting the Solar Millennium Group’s growth opportunities.”

Last month, Bloomberg New Energy Finance reported that investments in CSP led a resurgence in global renewables investing, including at a California CSP plant separate from Solar Millennium’s. The German company’s switch to PV might suggest that such CSP investing in California could be under threat as PV prices come down.

The fall in PV prices is probably a factor in the 166% growth in U.S. PV installations forecasted last week by IHS iSuppli for 2011. IHS and Ernst & Young have separately predicted that prices will plummet to $1.00 per watts- by 2012 in the case of IHS, and 2013 for E&Y.

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