During the next few years, the biggest growth in the solar energy market will happen in the form of utility-scale projects, mostly driven by state renewable portfolio mandates. But financing such...
Technologies are scaling up quickly to meet industry needs.
Like other California electric utilities, San Francisco-based Pacific Gas & Electric (PG&E) has been scrambling to meet the state’s renewable portfolio standard (RPS), which requires suppliers to obtain at least 20 percent of their power from renewable energy sources by 2010.
Though the RPS includes a variety of technologies, renewables developers are choosing utility-scale solar power more than any other resource, says Hal La Flash, PG&E’s director of emerging clean technologies.
“We solicit offers for renewable energy every year,” he says. “This year (the response) was 80 percent solar. Part of that is because the best wind and geothermal sites are already under contract. But solar, especially photovoltaic technology, lends itself to a modular approach and you can develop more projects on a smaller scale.”
Without question, solar power is hot these days. PG&E alone has contracted for more than 1,500 MW of photovoltaics (PV), including 250 MW it will own and operate, and nearly 3,800 MW of thermal solar power capacity. Other utilities, including Florida Power & Light and Southern California Edison (SCE), are following suit. And that, in turn, is driving R&D investments designed to improve solar plant output, reduce equipment costs, and challenge the argument that solar power will cause headaches for fine-tuned utility operations.
“Solar power is really booming globally. In Spain they announced 2.5 GW of photovoltaic projects in 2008 alone, which is a staggering number,” says Larry Stoddard, manager of renewable energy at Black and Veatch. “The United States is lagging behind a bit. Right now we have 6,700 MW in solar-thermal PPAs [power purchase agreements] and roughly 2,400 MW in PV PPAs.”
If the trend continues, these numbers might be just the beginning of a huge boom in solar construction. Connection applications for a staggering 31,000 MW of thermal and 14,000 MW of PV have been submitted to the Southwest Power Pool Interconnection, and right-of-way applications for 100,000 MW of solar thermal and 46,000 MW of PV have been submitted to the U.S. Bureau of Land Management.
“Nowhere near that amount of capacity is ever going to be built, but the sheer number of applications demonstrates the feeding frenzy that exists in the United States right now,” Stoddard says.
Indeed, frenzy is the word.
“There are now 34 states with RPS and electric utilities are scrambling to meet their requirements,” says Scott G. Smith, U.S. national clean tech leader with Deloitte & Touche. “Utilities are under a lot of pressure to get renewables contracted, even if they won’t have the actual capacity until later.”
A report released in September by UBS Wealth Management predicts growth in the global market for thermal, or concentrated solar power (CSP), will reach almost 20 GW over the next decade. All the major CSP technologies, from parabolic trough and parabolic dish, to power tower and compact linear Fresnel reflector (CLFR) designs, are about to be demonstrated on a utility scale