Posted by: John Carey on February 21, 2008
The past year has brought a remarkable resurgence of an old idea — using mirrors to harness the heat of the sun to generate power. Such so-called concentrating solar power (CSP) plants are huge affairs, with acres and acres of mirrors and a hulking steam turbine. Pacific Gas & Electric and Florida Power & Light are among the utilities that have signed up to purchase hundreds of megawatts of solar thermal power from such plants. (http://www.businessweek.com/magazine/content/07_42/b4054053.htm?chan=search) And on Feb. 22, the newest completed plant, a 64 MW facility in the Nevada desert, is being dedicated in a ceremony that includes green advocate Ed Begley, Jr., Dr. Sally Ride, and Steve Wozniak.
Now comes the latest reminder that these big solar facilities may become more than a niche source of the nation’s electricity. On Feb. 21, Arizona Public Service announced plans for a 280 MW powerplant to be built 70 miles southwest of Phoenix. “This will be one of many solar plants,” predicts Don Brandt, president of Arizona Public Service. “We’ll look back on this as one of the turning points.”
Part of the impetus for APS’s plunge into solar power is a government mandate. Under Arizona’s renewable energy standard, the state’s regulated utilities must generate 15% of the electricity from renewable sources by 2025.
But to Brandt, the bigger reason is that “it happens to make good business sense.” Under the terms of the contract with Spanish renewable energy giant Abengoa, Brandt’s company will buy power from the facility at an average price of 14 cents per kilowatt-hour over the next 30 years. That’s 10-20% more than today’s price of electricity from a natural gas fired plant. But “when we calculate it out, we have to look at the risk,” Brandt explains. Natural gas prices will go up. In addition, mandatory limits on the emissions of carbon dioxide are coming. That will increase the cost of using fossil fuel. So locking in a price that’s only modestly higher than natural gas now looks smart. “The sun is not going to get any more expensive,” Brandt says. “This take the price risk off the table.”
The plant also differs from existing solar thermal plants because it can store energy. The planned three square miles of mirrors produce enough heat to not just run a steam turbine, but also to heat up storage tanks full of molten salt. Then, when the sun goes down, or when afternoon rainstorms hit, the stored heat enables electricity generation to continue. Six hours of storage means that APS can meet peak demand, which goes as late as 9 PM on hot nights, with solar power alone. “This is a home run for our customers,” says Brandt. It’s also another indication that new technologies can help solve energy and climate change problems.
BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.