Navigant Research Blog

BrightSource Bucks CSP Trends

Peter Asmus — December 20, 2011

The declining costs of solar photovoltaics (PV), and the surprising shift of the Solar Millennium 500-megawatt (MW) concentrated solar power (CSP) project in Blythe, California to a utility-scale solar PV project, prompted many analysts to declare that CSP was dead. An estimated 70% decline in solar PV prices, and an easier permitting regime due to solar PV’s modularity, has contributed to the impression that CSP had missed its window of opportunity, and would be left behind.

However, it turns out that the CSP value proposition is being bolstered by some recent contract activity by BrightSource Energy, a firm whose unique “Power Tower” CSP technology and long line of investors and partners (including BP, Chevron, Google, Alstom and Bechtel) position it as the leading CSP player in the U.S. The company has one of the largest pipelines of utility-scale solar technology projects, and it recently announced a deal with Southern California Edison (SCE) to integrate thermal energy storage into existing power purchase agreements that will increase revenues from power sales by as much as three times due to the better match with peak power needs. A recent study by the National Renewable Energy Laboratory (NREL) found that when combined with thermal storage – currently the most cost-effective storage approach available – CSP offers a higher per kilowatt-hour (~1.6 cents) value over solar PV due to its capacity and reliability benefits. And while CSP and solar PV are typically viewed as adversaries, NREL also bolsters the argument that they can be complementary, with CSP helping to enable larger penetrations of solar PV into power grids.

The BrightSource CSP system uses a field of software-controlled mirrors called heliostats to reflect the sun’s energy to a boiler that sits on top of a “Power Tower” to create high temperature, high pressure steam. The steam is then used to turn a highly efficient steam turbine to produce electricity. When storage is added, the steam is directed to a heat exchanger, where molten salts are further heated to a higher temperature, thus efficiently storing the heat energy for future use. Later, when the energy in storage is needed, the heat stored in the molten salts is used to generate steam to run the turbine.

Under the original power purchase agreements with SCE, BrightSource was to provide approximately four million megawatt-hours of electricity annually across seven CSP facilities. Due to higher efficiencies and capacity factors associated with thermal energy storage, the new set of agreements will provide approximately the same amount of energy annually but with one less 200 MW power plant in the mix, reducing the land impacts of delivering this energy and avoiding transactional costs that ultimately impact California’s ratepayers.

The new set of contracts, pending approval by the California Public Utilities Commission, now consist of two BrightSource CSP plants scheduled to deliver electricity in 2015 and another three power plants with energy storage scheduled to deliver electricity in 2016 and 2017. In addition, BrightSource and its partners – NRG Energy, Google and Bechtel – are currently constructing a 126 MW facility for SCE at the Ivanpah solar project in southeast California.

As the recent Pike Research report, Concentrated Solar Power, notes, the CSP industry has hit a few bumps in the road, but BrightSource is clearly a firm whose projects are bucking industry trends in terms of cancellations and switch-overs to solar PV.

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