Large, utility-scale solar-powered generation developments as outlined for California will grow in national interest and eventually may lessen the need for natural gas-fired peaking and medium size traditional electric generation plants, according to a senior executive with Solel Solar Systems, a globally operating solar thermal project developer/operator. And the trend could take hold in less than the next 10 years.
David Saul, Solel's COO, told NGI last Wednesday that the large third generation of solar installations will be competitively priced with natural gas-fired electric generating units. Over the last decade, Solel has made several advancements in UVAC, its patented technology for solar thermal receivers, and has contracts close to $100 million for repowering existing installations, such as the 354 MW of concentrated solar power (CSP) that FPL Energy operates currently in the Southern California desert region.
"We're looking to be competitively priced with natural gas, and we're not that far away," Saul said. "We're only talking about a few years. The direction that we're going is that our costs are going down for everything [materials, glass and steel; manufacturing; installations; and operations] and meanwhile the longer-term cost of natural gas is going up."
From a technology standpoint, Saul considers Solel's CSP system the only one that has been proven to be commercially feasible by virtue of the 20-year-plus operations of the FPL installation in California. The three other thermal solar technologies, including the one employing Stirling Engines, have not been commercially proven as yet, he said.
"Our costs are coming down," Saul said. "We see ourselves competitive with natural gas; it is just a question of time, and we're not talking about a lot of time. I think with what is happening in the wholesale gas markets, it is a pretty good assumption that gas prices will go up. So, in the long run, I think we're a very good bet. It is just a question of how many years it takes us to get there, but our costs are going down."
Why does the industry need the 30% tax incentive through 2016, then?
"We are competitive [with gas] with the 30% incentive, and as we build a couple of generation plants, we will be cutting our costs more, and after that we won't need the 30%," Saul said.
"Eventually, we have the ability to replace the use of natural gas for peaking and intermediate peaking plants," Saul said. "We have the potential to put in large amounts, thousands of megawatts, and by doing so we will displace the use of gas, not just in the Southwest region, but through mass displacement, all over the country."
Saul's strategy is to put the 554 MW Mojave Solar Park in place by 2011 in California near the now-closed Mohave coal-fired generation plant in Laughlin, NV, and that will spur the development of subsequent large-scale solar developments in California and other states. "There is certainly a recognition that solar needs to play a large part in the retail energy mix in California," he said.
The market in California alone for large-scale solar runs into the thousands of megawatts, according to Saul.
"For the next couple of years, we will start to see the second phase in the building of solar plants finally break through," he said.
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