Sun's power proves elusive

Harnessing sunlight has so much promise, but has yet to deliver, writes Keith Orchison (published in The Weekend Australian, 28-29 June 2008)

Can solar do it this time?  During the last major oil crisis in the 1970s governments and investors saw major potential in producing electricity from the sun and from wind. Three decades later wind power has soared to reach 100,000 MW of global capacity, while the solar industry still lags in the "wannabe" category.

However "cleantech" investors see the current record oil prices and the collateral rise in global gas prices opening strong new opportunities for the solar industry. As Portuguese economics minister Manuel Pinho, a strong supporter of solar development, says: " The perception that renewable energy is expensive is changing every day as the oil price goes up."

The cost issue is critical for solar power as it is far more expensive than fossil-fuelled electricity. Swiss research centre CSEM estimates that, at best, current solar costs are five times higher than they need to be to achieve commercial viability in their own right without carbon penalties for conventional plant.

Nonetheless many investor advisers are confident that solar has a big future. Sebastian Waldburg, managing partner of Barcelona-based SI Capital, a private equity investment company specialising in renewable energy, told a London seminar this month that he expects 16,000 MW of concentrated solar power to be installed worldwide in the next six years. Existing CSP capacity is only 400 MW.

Concentrated solar power uses mirrors to focus the sun's heat on to water-filled tubes, turning the liquid to steam to drive power turbines.

Australia claims a leading role in the global development of CSP through the Solar Systems project in rural Victoria -- a $420 million plant supported by $129.5 million in subsidies from the Victorian Government and the Howard Government plus a $285 million investment by TRUenergy, the Australian subsidiary of Hong Kong-based China Light & Power.

Solar Systems managing director Dave Holland, who says the northern Victorian project is scheduled to be fully completed in 2013, predicts that its success will lead to more than $10 billion being spent on 5,000 MW of commercial CSP across Australia by 2030.

Solar Systems has been working on its concentrated sun power approach for 18 years, developing an concept initially designed by its technical director, John Lasich, while working on solar photovoltaic systems during the oil price crises of the 1970s.

TRUenergy managing director Richard McIndoe -- whose parent company CLP has operations in Hong Kong, China, India, Taiwan and Thailand -- says the Solar Systems project offers opportunities for sun power development across Asia at a time when many countries are looking to adopt renewable energy technologies to meet the need for large greenhouse gas emission reductions.
While concentrated solar power is seen as important because of its potential ability to contribute to mainstream electricity production, most of the current focus around the world is on distributed generation from photovoltaic systems on buildings.  PVs differ from CSPs in that they directly convert sunlight in to electricity but at a much weaker conversion rate.

Countries from Germany and Japan, which has led the world's in promoting solar PVs through substantial subsidies despite a less-than-sunny climate, to China to the United States, including Middle East nations and Australia, are supporting photovoltaic development.

US-based market research firm Clean Edge says the global consumption of solar power was worth $US20.7 billion last year and it predicts this will rise to $US74 billion in 2017.  This is a substantially higher current estimate than that offered by Deutsche Bank, which believes the current global PV market is worth $US15 billion -- but the bank sees supply rising at 40 percent a year.

America -- the world's fourth-largest solar power market after Germany, Japan and Spain -- brought 150 MW of solar capacity on line last year, 45 percent more than in 2006, to reach a total of 750 MW, still a tiny fraction of its overall generation plant. Analysts are predicting that, under the present subsidy arrangement, which the solar industry hopes to see boosted under either Obama or McCain as president, capacity will reach 2,550 MW by 2012.

The latest global high point for photovoltaics is the announcement by Masdar PV, an arm of the Abu Dhabi government-backed clean energy initiative that will see the world's first zero emissions city built in the Middle East in the next decade, that it will invest $US2 billion in manufacturing capacity for PVs. Masdar PV plans to spend $US600 million on factories in Germany and Abu Dhabi to produce 210 MW a year of initial supply and then to scale up production to 1,000 MW a year by 2014.  Dr Sultan al Jaber, Masdar CEO, claims the project as the biggest single investment in solar technology to date and a milestone in the small Arab state's plans to become a global "cleantech" hub.

Dr Winfried Hoffmann, president of the European Photovoltaic Industry Association, says the Masdar initiative is "a potential game-changer for the global solar market."

The worldwide PVs outlook is not entirely sunny: both Germany and Spain are on the brink of scaling back subsidies to the PVs industry and tight global supplies of silicon, the main element for solar panels, continues to constrain development. The price of polysilicon, also a key ingredient for the IT industry, has risen 900 percent in five years to reach $US400 a kilogram.

The solar industry hopes that new polysilicon factories will ease the supply situation after 2010 and an increasing number of energy companies are seeking to get round the problem by resorting to "thin film" technology, which employs glass or steel and very little silicon. The "thin film" technology is designed for easy work with other rooftop materials.
Overall, the broad view in the industry and among many analysts, is that, after a very long gestation period, solar power is about to cross energy supply's great divide between conventional and renewable resources to become a genuine player in the marketplace thanks to both crude oil prices and the move by governments around the developed world to place a price on carbon emissions.

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