Our View:
NY has now expressed its intent to join the U.S. Solar club. Egged on by the Governor’s rather ambitious 45-15 renewable energy program, the Long Island Power Authority and NYPA have moved ahead to propose two medium sized photovoltaic module solar plants of 50 MW and 100 MW at Long island and New York . NY follows early leaders like California and Arizona who have already moved forward with large Solar Projects powered by both CSP and PV Technologies. New York’s entry into the solar energy arena shows that U.S. is now gearing itself to seriously challenge the early leadership of EU members Spain, Germany and Portugal and will not limit its solar ambitions to the sun baked desert states of the south.
These are early days for solar energy. Years of back breaking development exercise saw rising costs of manufacture and hundreds of early entrants go bust. Unresponsive Financial Institutions, Banks and Governments, stifled the flow of easy credit and refinance to this fledgling industry causing many a development projects to stop half way. It was also haunted by wrangling and dispute on the technology path to be adopted for getting the best results at the lowest cost. The cheaper price of fossil fuel and intense global competition in almost all energy user industry segments added to woes of the solar power industry. Their cause was further damaged by a covert global campaign nurtured by the oil and coal producers pumping in millions of Dollars as lobbying, campaign and media contributions to show the world that renewable energy was not a feasible alternative for the worlds energy needs. All these helped delay the growth of this infant industry that took a record 40 years to grow from the drawing board to the commercial application stage. Small developments in the sun bathed European states of Spain, Germany and California in the US were taking place during this period, but nothing to evoke a worldwide interest
A 2004 ministerial ruling in Spain , the Royal decree 436, changed the course of events dramatically. Sensing the unique benefits that Solar energy can give to this sunshine state that must import all its oil, the Government against advice of the EU, World Bank and other financial advisors established a lifelong subsidy scheme for the early solar projects. It created two alternative payment schemes, both guaranteed over the 25 year life-cycle of thermal solar plants, and diminishing thereafter. The first is a fixed, guaranteed payment of 300% of the Average Reference Tariff (ART) for electricity. The second induces operators to compete on the national wholesale electricity market, where the generating company received 250 % of the ART plus a 10 % additional incentive.
Of the three main technologies that have moved ahead in the field of Solar energy are the CSP or the Concentrated Solar Power projects using the Tower Technology with hellostat reflectors at the ground level , the CSP using the Tower mounted giant parabolic troughs and the PV or the Photovoltaic Cell based Projects. Abengoa a Spanish manufacturer which produces all three versions moved ahead with the world’s first commercial project using both versions of the CSP Technology having a net proposed combined capacity of 300 MW.
The first of the CSP units was the hellostat version commissioned in March 2007 in Seville having an installed capacity of 11 MW and the other projects are in construction to ensure that the 300 MW solar farm is commissioned by 2013. Abengoa has also signed a contract with Arizona Public Service APS in the U.S. to put up a 280 MW CSP project with parabolic troughs and storage in Phoenix. Besides other Spanish players like turnkey contractor ACS Cobra and utility company Iberdola are not far behind with their solar projects as a result of which Spain should witness an installed capacity of 1000 MW before 2013 . Portugal, and Germany also were not far behind with the first solar farms with PV technology the 11 MW Serpa Project with 520,000 PV modules to provide electricity to around 8000 homes, commissioned in early 2007. They were followed by the 46 MW Moura photovoltaic power project in Portugal, and the 40 MW Waldpolenz Solar Park in Germany in quick succession.
Not to be outdone by the early European lead in the field of solar energy the California Energy Commission a world leader in energy efficiency and conservation , took giant strides towards solar based projects by announcing its intention to set up 3000 MW solar facility in the state by 2016 .The Pacific Gas & Electric Company the largest Utility Company in the state quickly moved in to sign two separate contracts of Photovoltaic Solar Projects with Optisolar and Sunpower Inc. In August 2008 PG&E entered into an agreement with Topaz Solar Farms LLC, a subsidiary of OptiSolar Inc., for 550 MW of thin-film PV solar power. The utility also signed a contract with High Plains Ranch II, LLC, a subsidiary of SunPower Corporation (Nasdaq: SPWR), for 250 MW of high-efficiency crystalline PV solar power projects. Though the cost of both projects was kept under wraps, it was understood that the Optisolar project based on mass production technologies would bring down solar energy costs substantially. The September Global financial meltdown however took its toll on the Optisolar, a Calfornia based start-up. As the credit crunch hit the markets the company failed to raise more than $ 200 million for the project. This was unfortunately less than a third of the first flush of funds required to set up the farm. Optisolar thus sold out its lucrative contracts to its competitor the bigger and well established First Solar a publicly held company that also specialised in thin film semiconductor technology and could make good use of its mass production techniques to cut costs.
First Solar, the biggest U.S. player in the Solar Energy with PV Technology claims to have brought down its cost of manufacture of its solar modules from a high $ 3 per watt in 2004 to just 98 cents per watt during the 1st Quarter of 2009 . This will undoubtedly have great impact on Solar power whose generation cost today is $ 6000 per MW against $ 2000 per MW of the coal based thermal plants. With more solar plants on the anvil, and competition and collaboration across Europe and U.S. beginning take shape, the prices of both manufacture of modules and installation of Solar plants are bound to drop sharply. European manufacturers have also tied up with Indian & Chinese companies to produce PV modules which will further lead to cost cutting. Besides demand from India and China can be huge as both these nations are short of energy required to meet their high 7% plus annual growth patterns. If this happens it will be the best thing for the solar power industry which can derive benefits from the economies of scale and become a true competitor that can match fossil fuel plants without Government subsidies or incentives .
In this blog from “ecology to economy” we deal with discussion of sustainable practices which we must adopt for the for various aspects of economy as well as climate change. We are focusing in this issue on the latest developments in the Solar energy industry and the real implications it will have on climate change and the international economy.
We could be wrong. Tell us if we are & why? We encourage diverse opinion even if it is from commercially interested groups opposed to our thinking
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