The rise of solar power

Renewable energy projects continue to provide a major source of business for the energy supply chain with the latest EIC Monitor quarterly report (April – June 2010) showing 123 new active and future renewables projects worldwide totaling US$ 68.4 billion.

Solar power is a key sector on an upward trend although like many other sectors of the industry its burgeoning growth rate is not without threat. 

In Europe, Spain is home to the largest number of large-scale solar projects thanks to abundant sunshine and the Spanish government’s commitment to achieving a target of 12% of primary energy from renewables by 2010 and an installed solar generating capacity of 3000 MW. At the close of 2009, total solar power in Spain was 3 GW. 

The Spanish government recently announced plans to slash incentives for new solar photovoltaic (PV) installations by up to 45% in a move that could potentially harm the development of the country’s booming solar industry.

The highest value solar project in Spain at present, is the US$ 1billion Valle 1 and Valle 2 Solar Projects, which will see the development of two adjacent 50 MW concentrated solar power plants (CSP) in San José del Valle in Cadiz. Operator, Torresol Energy, has secured a US$ 760 million loan for the project. Foster Wheeler has been awarded a contract to design, supply and provide site advisory services for two sets of solar steam generators, as well as low pressure and high pressure feedwater heaters.

Another major project is the Andasol 3 Solar Power Project, which is due for completion in mid 2011. The 50 MW solar power plant will comprise of 210,000 parabolic mirrors that will capture and concentrate the sun’s rays. The heat generated will be transferred to a heat transfer fluid and through heat exchanging devices; the thermal energy will be transferred to a water/steam circuit with the steam driving a turbine.

Spain can also lay claim to Europe’s first commercially operating power plant based near Seville, which is driven only by solar power. The 11 MW plant is designed to produce 23 GWh of electricity a year, enough to supply a population of 10,000.

In the Americas, solar energy is increasing at a record pace. According to the Solar Energy Industries Association, the United States solar power market grew 37% in 2009 from the previous year, with 481 MW of new solar generation installed, up from 351 MW installed in 2008. It is worth noting that some analysts believe that the rapid growth of natural gas extracted from shale has the potential to significantly undermine the growth of the solar power industry in America.

High profile locations in the United States include solar thermal plants in the Mojave desert and the Palen Solar Power Project in California, which will see the development of two 250 MW concentrated solar power (CSP) parabolic trough plants in an area covering 21 km². The California Public Utilities Commission has already approved a power purchase agreement (PPA) between Southern California Edison and Solar Millennium for the project.

In Asia, China is leading the way. In June 2010, China’s National Development and Reform Commission announced that it is to develop 13 solar power projects in the western region. The projects are part of the country’s aim to boost the share of non-fossil fuel in its primary energy consumption to 15% by 2020. According to Zhang Guobao, head of the National Energy Administration, China aims to have an installed capacity of 20 GW of solar units and 100 GW of wind power by 2020.

North Africa is also proving to be a destination for solar plants with a number of projects proposed for Sudan and Egypt. There is also the €400 billion DESERTEC project with the goal of making use of solar energy in deserts. The consortium, DII GmbH, is focusing on concentrating solar power systems in the Sahara Desert.

Egypt’s first solar plant at El-Koraymat, south of Cairo, is also expected to be completed later in 2010 and all eyes are now on the construction of 100 MW solar power plant at Kom Ombo, near the Aswan High Dam hydro-electric plant, which will only use photovoltaic power. The US$ 700 million solar plant will be financed by a number of international institutions, including the African Development Fund and the World Bank and forms part of the Egyptian government’s pledge to generate 20% of its power from renewable sources by 2020.

With solar power continuing to grow in importance in the global energy mix, plenty of opportunities are apparent for energy supply chain companies today and in the future.

Author: Mike Major, CEO of the EIC

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