IFandP recently had the pleasure of interviewing Ralph Rayner, Sector Director for Energy and Environment at international consultancy BMT Group Ltd on the current state of marine renewable energy, and the stumbling blocks that will need to be removed if it is to reach its full potential.

IFandP: In terms of years, how far behind is wave and tidal power generation compared to solar and wind power?

RR: If nothing were to change in terms of resources and encouragement, I’d say it was a decade behind. But we’re now seeing significant efforts to catch up with other renewables. The UK will soon have two full scale test sites running and there are encouraging signs of an improving investment and development environment.  If this is sustained then the gap will start to close.

IFandP: Which companies and approaches do you feel offer the most potential?

RR: It’s very much an open field and with so many options it’s difficult to pick winners. Answering this question will come down to rigorous testing over long periods to determine reliability. The majority of issues revolve around the problem of operating in such a hostile environment. It’s not like the offshore wind industry, where a significant part of the maturation cycle has already taken place. There could even be some technical showstoppers. For example, there is the problem of connection to the shore from devices such as tidal stream turbines which are located at sites which by their very nature are in places were you wouldn’t choose to run a cable. For some sites this will be very technically challenging.

IFandP: How is the Pelamis system progressing?

RR: It’s going pretty well in terms of engineering and technology. There are some significant issues as it nears commercial scale, but it’s come a long way. It needs long-term deployments to resolve the issues associated with maintenance. It’s only one of the technologies that are a long way down the development path. There’s always a hurdle between prototypes and achieving commercial scale, commonly referred to as the ‘valley of death’ as its hard to break through to the point where you can start realising economies of scale. This is an area where investment support mechanisms are needed.

The planning issues associated with major energy infrastructure projects are well documented with the Sizewell ‘B’ public inquiry in the 1980s taking over three years and receiving over 16m words of evidence. With the issues of the past in mind and the pressing need for a step change in the UK’s construction of power generation plant, the UK Government created the Infrastructure Planning Commission (IPC) as part of the Planning Act 2008. The IPC is the independent body that decides applications for nationally significant infrastructure projects. IPC Commissioners make these decisions within the framework of National Policy Statements, also weighing the national benefit of proposals against the local impact. In practical terms, this means that as of 1^st March 2010, IPC took over responsibility from the Department of Energy and Climate Change (DECC) for the consenting process relating to all new offshore wind farm applications with a capacity greater than 100MWs.

Prior to a developer starting any physical work on any part of an OREI, consent must be given by the relevant body. For most Round Three wind farms this will be the IPC however smaller wind farms and most wave or tidal projects below the 100MW threshold will still be handled by DECC for the foreseeable future. Consent must be given for each phase of the project including any survey activity, construction, operation and finally decommissioning. Each phase is broken down further with consents required for all the offshore elements of a wind farm (the turbines, offshore transformers and export cable route); consent to cross the shoreline, (principally the export cable route) and consents for the onshore items (export cable route and the grid connection infrastructure including substations). There is also a requirement for consents to be granted for any developments at ports to create extra lay-down areas or docking facilities required during construction or for ongoing maintenance.

While consent to establish a meteorological mast to gather wind speed data, or to drill boreholes to confirm geotechnical conditions may be granted with the minimum of supporting documentation, consents for subsequent stages of the development require in-depth studies to demonstrate the suitability of the project and how it will impact on the environment and on stakeholders.

One of the major parts of the approval process is the environmental consent where developers have to produce a comprehensive environmental statement based on an environmental impact assessment. This includes three sub-sets, the first of which covers the physical and chemical environment which is things like sediment, noise, contamination, and electrometric fields.

Second is the biological environment which includes the seabed benthos, inter-tidal areas, land flora and fauna, fish & shellfish, birds and marine mammals. One of the issues with Round Three is that the development zones are further offshore so they are moving away from near-shore ecology to deep-water ecology which is closer to the environmental impact assessments that are carried out regularly by BMT for the offshore oil and gas industry.

The third sub-set is the human environment which consists of but is not limited to navigation, fisheries, aviation and cultural heritage. The development of wind farms around the UK’s coastline is already beginning to complicate the approvals process for future schemes. When consent for Round One wind farms was granted it was possible to view the navigation and environmental impacts for each scheme in isolation as they were small discrete projects. However with the advent of round two, wind farms were built in close proximity to other wind farms so the environmental impact of a new scheme had to be viewed in the context of the existing wind farms around it. Granting consent to one wind farm might jeopardise the ability the secure consent for another.

Cumulative and combination effects are beginning to dominate when Round Three and the planned offshore wind farms within Scottish territorial waters are added to the mix and this issue will become even more prevalent as further wind farms are planned and developed. The role of navigational assessment is also changing from a navigation risk focussed exercise to one which also addresses the effects on routing and access to ports. As part of its environmental and navigational assessment work for wind farms and tidal energy schemes in the UK and Pacific Rim, BMT has identified how wind farms can act as physical barriers to shipping and if longer ship routings are required to ensure safe navigation there will be knock on effects on shipping costs and access to ports.

Once a developer has produced the environmental statement, then whichever body is giving consent will use the statement in conjunction with the results of stakeholder consultation and other available information to make their decision.

A key issue in achieving consent is demonstrating that appropriate mitigations are in place for the impact of the development to be tolerable to the regulator and stakeholders. Despite its apparent vastness, the marine environment is full of people either making a living or enjoying the amenities provided by the sea, so the identification of all the issues and all the stakeholders is very important in satisfying the consenting authority. Stakeholders include statutory consultees such as the Maritime and Coastguard Agency, strategic stakeholders such as National Fisherman’s organisations and the Royal Yachting Association and community stakeholders such as Residents Associations. The developer’s aim is to secure a statement of no objection from all the statutory consultees and to satisfy all stakeholders. However satisfying all stakeholders fully will never be possible and full and open liaison, discussion and negotiation to identify solutions that are acceptable to all parties is very important. Bringing stakeholders onboard as early in the process as possible in order to minimise the risk of alienation and the disruption is key to achieving the desired outcome.

The consenting process may appear over-complicated but as with any procedurally based exercise, understanding what is required at each stage and delivering to that requirement is the route to success. By partnering with a team which has the right expertise and experience in breadth and depth to support the developer through this stage will ensure that a complex requirement does not become unnecessarily onerous.

In Andhra Pradesh in south central India, more than 80 per cent of hospital admissions are the result of water-borne illnesses. There’s nothing particularly special about Andhra Pradesh. More than a billion people in the world today lack access to clean drinking water and there are more people in the world’s hospitals today suffering from water-borne diseases than any other ailment.

As glaciers shrink, droughts increase, and salt-water intrusion spreads, the world’s current fresh water shortage is set to worsen. The Stockholm Environment Institute says that, using only a moderate projection for climate change, 63 per cent of the global population will live in countries of significant water stress by 2025.

But treating water is a power-intensive and hence expensive business. It’s also one that can only become more costly as the price of fossil-fuelled electricity in social, political, environmental and economic terms becomes apparent.

The world needs to find ways of cleaning, desalinating and distributing water to its citizens. And it is an area for which the use of renewable energy seems particularly apt. There is, after all, an inherent contradiction in building more carbon-emitting conventional power generation specifically to counter an issue that is dramatically worsened by climate change.

On a more practical level, the lack of clean water is often correlated with an absence of or degradation of existing electricity infrastructure. If new power generation plant is to be built, or a serious refit programme is to be undertaken, then there is an opportunity to incorporate significant levels of renewable generation into the mix.

However, to talk of renewable generation as a single entity is misleading. Wind and solar power – the most likely candidates for water treatment in non-coastal areas – are very different beasts.  Even within the category of solar power there are a myriad technologies. And each one has distinct properties that affect where and how it can best be deployed.

Naturally, the prevailing weather conditions will be the major factor. There is no point in erecting wind turbines in an area where the wind is but an occasional occurrence. The reality is that the areas where availability of clean water is currently the most pressing issue, and the countries where it is most likely to become one, are best suited to solar power.

Circadian Solar is working hard to realise the potential of concentrating photovoltaics

In particular, concentrated photovoltaics (CPV), may prove to be the likeliest candidate for water treatment. Like other solar technologies, CPV converts the power of the sunlight into usable energy. But the advanced design of its solar cells delivers far higher energy yields than standard photovoltaics. CPV units also have an optics system, that magnifies the power of the sun even further, and a sun-tracker unit so that the cells follow the path of the sun and are able to ‘harvest’ a larger fraction of the sun’s rays.

The result is a system that is incredibly efficient and capable of delivering far greater levels of power from a single unit than other forms of solar electricity generation. The net result is a system that has the potential to be much more cost-effective.

The high levels of efficiency of CPV also makes it suitable for micro-generation.  In the developed world, micro-generation is often seen as a well-intentioned whimsy on the part of wealthy but committed environmentalists. But in the developing world, where significant proportions of the population live in off grid rural areas or in over-crowded, unplanned urban sprawl, micro-generation has immediate and obvious benefits. Like micro-finance before it, thinking small can help solve big problems.

For example, a basic micro-desalination unit – the size of an average washing machine – requires 800 Watts of electricity to produce 1000 litres a day. That’s enough for a family’s daily needs. A single CPV unit could power four of five of these machines – thus providing a cost-efficient, space-efficient and energy-efficient power source.

In another example, an individual hospital might need 100-200kW to power its own water treatment facility. In the right climate that can prove to be a more robust and more reliable source of essential clean water than an inadequate water or even electricity grid.

But there are other considerations when it comes to choosing energy sources, not least of which is support and maintenance. Systems designed for a long lifecycle and minimal maintenance are ideal. The more moving parts, the more complex its underlying engineering and the more maintenance it is likely to require. That may make it inappropriate for certain countries that could otherwise benefit. But, if you can fix a car you can fix a CPV system. So for places like India – where most small towns and many villages have a mechanic enjoying a lively trade in the repair and refurbishment of Ambassador cars and auto-rickshaws – it could be the argument that seals the deal.

The deployment of renewable energy in general and CPV in particular can also support nascent tourist industries by powering the water treatment required by hotels, swimming pools and even golf courses. The water consumed by these enterprises has long been an area of concern in many areas, particularly where resources are already limited. There is a greater awareness that providing luxuries should not have an unacceptable social and environmental cost, and balancing the need to attract tourist dollars to boost the local economy and ensuring the population has its basic needs met has not always been successful. But using renewable micro-generation to power water treatment can assist in this area.

But perhaps the biggest advantage of linking technologies like CPV to very specific functions such as water treatment and desalination plant is that they make perfect demonstration projects in which the benefits of renewables can be immediately seen. In an industry that needs to boost its profile, demonstrate effectiveness and encourage greater investment, this is exactly the kind of venture that developers like. It creates something of a virtuous circle where greater investment leads to greater penetration, which in turn leads to lower costs which encourages further deployment.

There is no one easy answer to the world’s water problems. And certainly CPV does not provide the complete solution. But it does tick a lot of immediate boxes, and could play a significant role in ensuring that clean, healthy water doesn’t become the preserve of the wealthy few. But more than that, it opens the door to a whole host of other renewable energy alternatives.

Out of all the various different forms of renewable energy, bioenergy has the largest future potential as it has the capacity to provide a significant contribution to all sectors of the energy market (heating, cooling, power, transport and basic chemicals). As a result, biomass is expected to contribute to over half of the renewable energy targets of the EU by 2020.

However at present the penetration of biomass into commercial activities is happening slowly as a result of the current low levels of investment in biomass technologies coupled with the relatively high cost of biomass, in comparison to fossil fuels. The potential for job creation in the whole bioenergy sector has yet to be analysed specifically, but the production of about 100t of bioenergy requires (and justifies) the creation of one permanent job. Biomass’s versatility should allow it to eventually replace coal in the EU’s power sector of the EU which is highly polluting. In addition, 100 TOE of modern bioenergy can save around 300t of CO₂. Europe’s own biomass resource potential varies according to studies concluded by the EU funded BEE project but there it is clear that the EU has a large potential to develop pellets from waste and forest residues.

In the EU, the amount of present utilization of conventional pellets is around 9Mta (produced in over 500 production plants).However the market expansion of the refined biomass (AgroPellets, pellets, Torrefied Pellets) is expected to be considerably high.

The amount of biomass utilization for heating in EU should increase from 50 MTOE/y to 150 MTOE/y, perhaps most from Agro Pellet obtained from all types of agro-forestry residues. For bioelectricity production a massive contribution could derive from a generalised co-firing (biomass + coal) programme based on the utilization of “Agropellets” and or “Torrefied Pellets”.

The adoption of 20 per cent of co-firing level in the EU (technically possible now) will require about 200Mta of agropellets with a bioelectricity production of about 350 TWh, equivalent to the production of 50 nuclear power plants (50GWe)

Co-firing of refined biomass, especially torrefied biomass in old new future coal power generation plant is very attractive from the technical operation point of view because:
• Supplementary investment costs are very limited (~100 €/KWe);
• torrefied biomass is very similar to coal;
• the environmental benefits are considerable; the substitution of 1 ton of coal with refined biomass reduces reduces net CO₂ emissions by three tonnes.

Of course the main constraints are of an economic nature (biomass cannot currently compete with coal in the absence of incentives designed to reflect its lower environmental impact) and the lack of the infrastructure required for the large scale supply of biomass.

Biomass by its very nature is a dispersed and diluted renewable energy feedstock. Refining can considerably improve its energy characteristics, but the large volumes that must be transported to the biorefinery can create local issues.

In the very long term (2050) the contribution of bioenergy contribution to the European economy could become highly significant, making up an high percentage of the total EU primary energy mix: 400 MTOE/y most of this contribution perhaps for bioelectricity production & biofuels (~300 MTOE/y) with total accumulated bioenergy investments approaching €400-500bn. At this point, the impact on CO₂ emissions would be considerable (~ 1bntpa) and the number of new indirect jobs created by the emergent biomass industry could reach around 4m for the EU as a whole. Realising this huge potential will require wide-reaching and challenging industrial, financial, policy support measures and programmes.

EU solid biomass production and consumption in 2008 (metric tonnes)

An International trade in solid biofuels will be equally needed and this will require additional infrastructure in harbors. On the positive side, torrefied biomass pellets could use the already existing coal transportation infrastructure, as their handling characteristics are very similar to those of mineral coal.

However, large-scale utilisation of biomass could have a heavy impact on both industrial and rural development, possibly requiring the re-design of agricultural areas where a careful balance will need to be struck between food agriculture and biomass production.

If these challenges can be resolved, biomass production/recovery and in particular refined biomass production (AgroPellets), could become a new “basic reference commodity” for all energy sector and markets. Unfortunately, the absence of adequate and diversified commercial technologies needed and the lack of education/training programmes and incentives for farmers / cooperatives still represent a considerable obstacle for the fast expansion of this new means of managing and gaining value from our natural resources.

While the first technological solutions had been identified and demonstrated (with significant effort on part of EUBIA), much more R&D is required, before the biomass sector comes into its own.

AgroPellets which can be obtained from the direct processing of all types of humid biomasses (organic vegetable material) or mixtures, are very similar to the conventional pellets utilized for heating and present about the same physical and heating value but have higher ash and micro elements (K, Na, Cl) content. This can be overcome by blending or mixing different types of biomass together, thereby keeping the levels of undesirable micro elements within the maximum level required for different future markets.

European Biomass Industry Association

EUBIA, the European Biomass Industry Association, was established in 1996 as an international non profit association in Brussels, Belgium. It groups together market leaders, technology providers, and knowledge centres, all of them active in the field of biomass.

Our main objective is to support the European biomass industries at all levels, promoting the use of biomass as an energy source, developing innovative bioenergy concepts and fostering international co-operation within the bioenergy field.

This and other relevant topics will be extensively covered during the 5th Bioenergy Industry Forum (BIF), one of the side events taking place at the 18th European Biomass Conference and Exhibition that will be held in Lyon, 3rd to 7th May 2010.

Current situation

The global financial crisis impacted only modestly on the Indonesian economy and GDP continued to grow, although at a much slower pace. Election-related spending and its dependence on domestic consumption have helped to support the economy and this year, GDP is expected to rebound with growth at 4.75 per cent, improving to five per cent next year and to 5.5 per cent in 2012. By 2014, the IMF forecast GDP expansion at around 6.3 per cent, significantly above pre-crisis levels.

The country’s desire for economic development and its burgeoning population is expected to drive an increasing demand for primary energy with electricity consumption forecast to grow at around eight per cent annually in the run-up to 2020. To meet these requirements, Indonesia will need to expand its power generation, transmission and distribution assets. Currently, around 65 per cent of the Indonesian population have access to electricity. The government hopes to link up 90 per cent to its power grid by 2020. Since mid-2008, the authorities have been preparing a second phase of 10,000MW installed power capacity development to bring the archipelago closer to its target.

However, the issue is not only one of assets. Indonesia will need to secure an adequate fuel supply to produce this extra power. The country’s energy mix relies significantly on oil, particularly diesel, but its declining oil reserves and today’s high diesel prices are prompting the government to expand its energy portfolio to other primary sources of energy such as coal and natural gas. Moreover, increasing environmental concerns have also led to a greater interest in the use of renewable energy sources, including geothermal energy.

Vast geothermal potential

And it is this last source of energy that holds much promise and finds particular favour with the government. Geothermal power generation is an attractive option for Indonesia for several reasons.

First, greater use of geothermal power would allow Indonesia to capitalise on an indigenous, distributed resource and helps to further diversify its energy mix, a fact not lost in an era where energy security is an important consideration. Indonesia’s geothermal resources are widely distributed and can be generally highly productive with high-entalphy resources.

Secondly, it would reduce dependence on oil and other fossil fuels as well as curtail some of the disadvantages of these fuels such as their role in generating greenhouse gas emissions. Consequently, the development of geothermal energy would enable Indonesia to meet its emission targets and preserve its environment.

From a national viewpoint, geothermal power plants are capable of delivering a baseload capacity in excess of 90 per cent with a continuous, reliable output; a far cry from the intermittency issues encountered by other forms of renewable energy such as wind and solar power.

In addition, this much-needed power could be delivered relatively cheaply in terms of operating costs. Although initial investment is comparatively higher than fossil fuel plants, long-term operating costs are quite low, not requiring fossil fuels and their associated cost and waste issues. A 10MW combined cycle geothermal power plant requires around EUR1.2m annually to meet operational expenditure, according to E.Terras AG. This results in a total production cost of EUR¢4-10/kWh.

Indonesia appears ideally placed to benefit from the world’s geothermal activity, having the world’s largest geothermal power development potential. According to the Energy and Mineral Resources Ministry, this is estimated at around 28,100MW, considerably ahead of the USA, China and The Philippines. With a 30-year operational timeframe, its geothermal capability, if fully developed, could equate around 12bnboe, more than double its current oil reserves.

Offshore wind power capacity only accounts for around one per cent of total wind power capacity globally. Nevertheless, its small share in the global wind park is set to change. Despite its higher costs – around 50 per cent higher than with equivalent onshore developments – offshore wind energy is gaining significant ground. With expected benefits of higher wind speeds leading to higher total electricity production (up to 4000 full load hours rather than 2000-2500 full load hours) and lower visual impact of the larger turbines, offshore units offer attractive advantages over their onshore counterparts. As a result, several countries are developing ambitious offshore wind programmes, significantly altering the balance between land-based and maritime developments.

Europe’s progress to date

At the forefront of these latest developments is Europe, which retains its status as world leader and pioneer in this segment of the wind power market. While wind power only represented 2.3 per cent of total EU installed capacity, Europe’s share in the global offshore wind power capacity amounts to 99 per cent as the continent has 20 projects in operation.

Figure 1: Europe’s offshore wind power installations, 2000A-2010F

The trend becomes also visible when one examines the rise of offshore wind power in the past few years. By the end of 2008, 1473MW of wind turbines were located offshore in the region, an increase of around 30 per cent on the previous year. In 2009, eight new wind farms, comprising 199 turbines and a combined power generating capacity of 577MW, were connected to the grid, a significant 54 per cent advance when compared with the 373MW installed in 2008. This accelerating growth can also be seen in Figure 1 which shows the sector’s take-off since 2005.

Revival of Danish expertise

Wind power pioneer Denmark is leading the way, according to Danish Wind Industry Association figures. The country installed numerous offshore wind turbines, representing a capacity of 237MW (against 97MW in land-based capacity) in 2009. To date, it has 662MW capacity installed in 11 wind parks from Frederikshaven in the north to Nysted in the south of the country. In September last year, it brought the 91-turbine Horns Rev 2 wind farm off the Jutland west coast online, providing power for 200,000 households. At 209MW Horns Rev 2 is the largest offshore wind farm in the world and Danish Prime Minister Lars Lokke Rasmussen has described it as “an important step in our energy policy” of the energy self-sufficient country. The DKK3.5bn (US$640m) investment overtakes the 166MW Nysted site, also owned by DONG Energy, as the world’s no. 1 wind park.

IFandP: eSolar’s expertise has dramatically driven down the costs of concentrating solar power. Would it be possible to get some figures on this? In addition, what scope or potential is there for further cost reductions?

Rogan: eSolar leverages proprietary sun-tracking software and smaller, mass-manufactured components to drive down overall costs and shorten construction times. We are continually evaluating new ways to reduce costs and increase system efficiencies. By achieving higher temperatures, incorporating energy storage, and expanding our already diverse network of global suppliers, eSolar can compete more effectively with fossil fuels.

Because of our involvement with customers and partners in several countries, we currently do not discuss pricing or energy pricing as it might affect their business opportunities.

IFandP: Out of China and the US, which do you believe represents the
largest potential market for CSP? How would you compare the two in terms
of their regulatory environment?

Rogan: Both Chinese and US markets will play crucial roles in the market acceptance of CSP. The Southwest US has some of the best solar resources in the world, but many projects are tied up in exhaustive regulatory and financing processes. China, on the other hand, with high manufacturing capacities and powerful government support is able to execute much quicker.

eSolar made the conscious decision to select local, strategic partners in order to achieve its goal of bringing cost-effective solar online faster. By working with local partners deeply attuned to a region’s regulatory framework, eSolar can better navigate the hurdles to power plant deployment.

IFandP: What issues do you foresee with your new collaboration in China?
Is intellectual property a concern?

Rogan: We seek to work with partners that will protect eSolar’s licensed intellectual property.

IFandP: What technological advances have been made in the past year in
terms of CSP?

Rogan: This past year was a breakthrough year for solar “power tower” technology. While parabolic troughs have historically dominated CSP generation, this past year introduced two new commercial-scale power tower plants–two of only three operating worldwide, further validating a new generation of solar thermal technology.

One of those facilities was eSolar’s Sierra SunTower, which came online in the summer of 2009. Constructed in less than a year, the Sierra SunTower is the only operating power tower in North America, and delivers 5MW of electricity to the grid in Southern California.

IFandP: What developments do you see on the horizon and how much scope
do you see for improvement in this field?

Rogan: The next stage for CSP development is in storage technology; many research programs and companies around the world are exploring different technologies and their ability to provide reliable power at night and in less than ideal weather conditions. This can be done in the form of thermal storage via molten salt or by deploying hybrid plants. eSolar’s first plant in China will be a hybrid solar and biomass plant to provide energy around the clock.

Another goal is the development of durable low-cost materials that will enable heliostats to withstand difficult weather conditions. Towards this end, eSolar has already designed a prefabricated flat mirror with a low profile that minimizes wind resistance.

The use of prefabricated flat mirrors, helps keep costs to a minimum

IFandP: When do you expect CSP to reach grid parity in countries blessed
with an abundance of sunlight, with conventional thermal generation?

Rogan: Reaching grid parity is largely dependent on regional policy mechanisms and the pricing of traditional fossil fuels. In markets with strong renewable mandates and public and private investment schemes, eSolar expects to reach grid parity within the next decade.

IFandP: How harmful was the financial crisis of 2008, in terms of investment in Solar R&D?

Rogan: The recession revealed the need for smart investments. Relative to other industries, investor interest in solar companies maintained momentum throughout the financial crisis as cost-effective clean technologies emerged as a key component of the US’s economic recovery. eSolar raised a $130M round of funding from Idealab, Oak Investment Partners, and Google.org announced in April 2008.

The recession had a bigger impact on demonstration and project finance. A number of solar companies have received millions in R&D funding, but are unable to prove their emerging technologies at scale. The limited access to the large amounts of capital, typically supplied via bank loans, to finance plant construction is one of the main barriers hindering wide-scale solar development.

IFandP: What could be done by governments to encourage more investment
in both CSP projects and solar R&D?

Rogan: Permitting, project finance, and transmission concerns are the biggest hurdles facing CSP and renewable industries in general. A renewable energy mandate paired with major infrastructure projects linking solar hot spots with high demand centers is needed to minimize investor risk and secure long-term markets.

IFandP: Are you seeing improvements in these areas currently or are they at the back of policymaker’s priorities?

Rogan: Many countries have begun to understand the need for quickly deployed clean energy solutions and are developing renewable programs. The next steps are to encourage long-term investment and implementation, an area where the U.S. has lost ground to China and Europe.

IFandP: How crucial are large scale projects such as Masdar City, in terms of bringing costs down?

Rogan: More performance and durability data are needed throughout the industry to further validate and expand on current technologies. With each new commercial-scale facility brought online, the industry is able to learn new ways of reaching higher efficiencies while reducing material costs. Investors are more likely to support industries with a solid amount of proof points, enabling further large-scale development and ongoing R&D.

IFandP: Do you see long-distance transmission projects such as the DESERTEC initiative as crucial to the widespread adoption of CSP?

Rogan: Absolutely–DESERTEC is a prime example of the kind of cross-border collaboration and long-term market validation needed to support emerging technologies such as CSP. In many countries, access to peak solar resources does not match with an area’s energy demand; implementing a sustainable supply network and long-distance transmission projects is necessary to drive CSP development at a global-scale.

Robert Rogan oversees commercial business in the Americas, as well as global corporate communications and marketing activities at eSolar. Most recently, Mr. Rogan was the founder and VP of Business Development at Bionic Harvest, a technology start-up focused on bringing vibration energy harvesting technology to market. Mr. Rogan has several years of business development and consulting experience. Mr. Rogan obtained his MS and PhD in Materials Science at the California Institute of Technology, and he holds a BS, Scholar of the College, from Boston College.

For more information regarding eSolar’s activities, visit www.esolar.com

China and Polysilicon – over the top?

Polysilicon is one of the major components of Photovoltaic (PV) solar modules and as a result, changes in its price and availability have major implications for the competitiveness of solar power when compared to more conventional forms of power generation. Analysts from China Merchants Securities and Changjiang Securities have warned that Chinese polysilicon producers will be hit hard by a combination of rising overcapacity and the resulting downward pressure on prices. A-list producers have all upgraded their forecasts for shipments in 2010, while their gross profit factor has dropped to 15 per cent. In addition, more capacity is in the pipeline. An executive from Jiangsu Zhongneng Polysilicon industry has told Sinocast that the top seven Chinese polysilicon makers are all pushing ahead with plans to boost their capacity, to the tune of a combined 60,000tpa. However, manufacturers are increasingly looking towards consolidation in response to the current situation. As of December 2008, the spot price for polysilicon was at US$55/kg, a far cry from the US$475/kg commanded back in April 2008. In addition, it’s worth bearing in mind that the market is oversupplied with a current Chinese polysilicon manufacturing capacity of 20,000tpa and current projects under construction could see this rise to 100,000tpa.

While this may be painful for polysilicon makers, it is clearly good news for manufacturers of PV modules and for the solar industry as a whole, particularly in light of the pressing need to reduce costs to the point where solar becomes competitive with conventional forms of power generation. Given the above in conjuction with China’s 40 per cent share of the global photovoltaic panel market and the fact that 97 per cent of the solar modules it produces are exported, the situation does suggest that it might be hard for foreign companies to compete in terms of price.

Fortunately, the Chinese government has noticed the potential oversupply situation in both the PV and polysilicon industries and therefore is ramping up its targets for domestic PV capacity by 5-10 fold. It is currently looking to install an impressive 20GW of solar power by 2020 (equivalent to more than double the world’s current solar power capacity) and while CSP projects will contribute a large portion of the projects that will undoubtably form to meet this demand, it still means a dramatically larger future market for photovoltaics. From the wider perspective of the industry, this is extremely good news as it will prevent other producers from being squeezed out of the global market. Even so, the situation is causing some alarm, with some commentators accusing the industry of “reckless investments and production expansions.”

Chinese producers might find themselves in competition from their Indian counterparts, given that India has recently passed the 1GWpa mark in terms of PV module manufacturing capacity, according to Frost & Sullivan and like China, has the advantage of low labour costs. However, the Indian PV module industry is dependent on imports of polysilicon, suggesting that it might be better off concentrating on thin-film technology to limit the comparative advantage of Chinese producers in this regard.

Over in Japan, manufacturers are also in the process of expanding capacity. Mistsubishi Electric completed a solar panel factory in February 2010 and is now expecting to produce 600MW of PV cells by the financial year March 2012, up from 200MW. Meanwhile Showa Shell’s solar subsidiary has announced that it intends to become the world’s biggest producer of thin-film PV panels, with the eventual aim of growing the business to the point where it rival’s Showa’s US$33.6bn oil-refining and downstream fuel operations in scale. In addition Sharp, is expecting to open a new plant this year, which will boost its thin-film capacity to over 1GW. Fortunately, for other producers, the decision by the Japanese government last year to reinstitute subsidies to households that install solar panels, should help to boost the domestic market.

Photovoltaic developments

California’s Nanosolar has been busy. It has recently opened an automated 640MWpa manufacturing facility for its solar panels, which use a copper, indium, gallium and selenium (CIGS) based semiconductor. The company claims to have solved some of the problems that have plagued non-silicon based cells in the past. Its solar panels has an efficiency of around 11 per cent, less than the 16.4 per cent boasted by conventional photovoltaics. However, according to Martin Roscheisen, Nanosolar’s CEO, that’s still enough to be competitive, due to modifications to boost performance, such as using large aluminium foil sheets to collect electrons from each panel and lower installation costs. Using US Department of Energy methods, he believes that power plants using Nanosolar panels could generate electricity at US¢5-6/kWh, close to that for coal-fired power plants and substantially less than the US¢18-22/kWh recorded for conventional PV solar power. Japanese solar companies are also focusing their efforts on CIGS-based cells, a natural tactic, given the competitive advantage their Chinese counterparts hold in terms of polysilicon supply.

Companies are increasingly turning to nanotechnology to drive further improvements in efficiency and cost reductions. Both nano flakes and “quantum dots” promise to trap and convert more solar energy than conventional silicon-based cells, but it is yet to be seen if they can amount to anything outside of the lab. The “nano flake” concept hinges on the discovery of a nano-scale indium arsinide crystalline structure composed of by the University of Copenhagen’s Martin Aagesen, which is capable of absorbing all incoming light. Mr Aagesen has since set up a company called “SunFlake” to commercialise his discovery. There is also the rise of novel manufacturing methods such as inkjet printing, which should help bring costs down, as should the use of dye laden plates or films of water to concentrate sunlight onto panels.

There is also the possibility that manufacturers will start to investigate materials such as iron sulphide (also known as fool’s gold), which have previously escaped scrutiny due to their low efficiency at converting solar radiation to electricity. However, the cost-savings from using such abundant materials could be substantial enough to challenge the current generation of silicon-based PV cells.

According to a recent presentation by Dr Mark Pinto, chief technology officer and general manager of Applied Materials’ Energy and Environmental Solutions Group (EES), there is still plenty of scope for innovation and improvements in conventional silicon PV manufacturing. He explained that today’s factories typically run at 1500 wafers per hour at an efficiency of 16 per cent, with as much as two per cent line breakage. In contrast, he predicts that by 2012, as a result of improvements in equipment and a move towards a fully automated process, output will more than double to 3000 wafers per hour at greater than 20 per efficiency with a 50 per cent reduction in the rate of breakages.

CSP: gaining momentum

Concentrating Solar Power (CSP) is starting to really make its presence felt. According to a report released in May 2009, compiled by Greenpeace, the European Solar Thermal Electricity Association (ESTELA) and IEA SolarPACES, total investment in the sector was expected to exceed US$2.58bn in 2009, and could rise to US$26.8bn by 2015. The report also indicated the fact that the technology has the potential to meet up to seven per cent of the world’s projected demand for electricity in 2030, increasing to an eyebrow-raising 25 per cent by 2050. The report also indicated that although CSP plants were generating just 430MW of the world’s electricity by the end of 2008, at the time it was written, there was another 1000MW of projects scheduled to come online by 2011. In addition, the report indicated that there were 7GW of CSP projects on the drawing board in the US, with another 10GW being planned for Spain, which could be commissioned by 2017.

At the moment, one of the largest projects currently under construction is Torresol Energy’s three CSP plants, which together represent 117MW of capacity and a total investment of US$1.4bn. All three are expected to be commissioned in 2011. Two are 50MW parabolic trough systems, while the third project is a smaller 17MW central tower receiver project. Torresol is a joint venture between Spanish engineering firm SENER (60 per cent) and Masdar (40 per cent), Abu Dhabi’s flagship cleantech investment firm. Masdar is also in the process of developing the SHAMS 1 100MW CSP plant in Abu Dhabi, with construction scheduled to begin in the first half of this year and completion timetabled for 2012. eSolar has also formed a partnership with power plant developer Ferrostaal AG to build CSP plants in markets such as Spain, South Africa and the UAE. Under the new arrangement, eSolar will provide its solar field and receiver technology, while Germany’s Ferrostal and Abu Dhabi’s International Petroleum Investment Co, will provide the power turbines and act as the general contractor.

eSolar’s repeating unit approach helps drive down installation costs

In terms of technical developments, much of the driving force in recent years has been from California-based eSolar, which has successfully developed a “cost-effective utility-scale CSP power plant that is based on mass-manufactured components and designed for rapid construction, uniform modularity and unlimited scalability.” Key innovations include the shift towards the manufacture of preconstructed units which can be installed easily with unskilled labour, the use of small individual mirrors to bring costs down and the use of a repeating structure that eliminates the need for precision surveying and individual alignment of mirrors. In fact, every mirror in the field can be controlled in real-time to maximise solar energy collection and direct it to the central receiver. More whimsically, such the level of control that a field can be adjusted to instantly display corporate logos that can be viewed from the air. eSolar’s system is delivered in units of 46MW, each with sixteen modules of thermal receivers and dual north-south heliostat fields.

Such is the precision of eSolar’s system, that mirror fields can display corporate images in real-time

eSolar signed an agreement in February 2009 to build a 500MW CSP plant for Californian power utility NRG Energy, which is expected to be up and running as early as 2011. More recently, the CSP developer signed a deal to license its tracking technology and know-how to China in order to both assist and profit from its goal.

There are also some technologies on the horizon that could conceivably change the entire way in which energy from the sun is converted to electricity. For example, in early 2008, details came to light that a former NASA scientist, Lonnie Johnson, had invented a small engine capable of converting heat to electricity at 60 per cent efficiency with no moving parts. Called the Johnson Thermoelectric Energy Conversion System (JTEC), it uses a temperature difference to generate a pressure that forces ions to move through a thin film, by means of the Ericcson cycle. If this technology is capable of being put into commercial use, then it will have important implications for the solar industry as well as potentially giving gas turbines a run for their money, particularly in terms of CSP. There is also the potential for it to give CHP plant operators greater flexibility over their electricity/heat output ratio.

There is also the fact that the Desertec concept, which envisages the formation of a supergrid, connecting the whole of Europe and North Africa and the creation of massive CSP plants in the Sahara desert, which would export electricity to Europe, has gained significant momentum, with the creation of the Desertec Foundation.  The foundation’s TRANS-CSP report, has calculated that the cost of such a supergrid would amount to €45bn, but as this cost would be spread across 10 years and 30 or more countries, this would cost each country involved in the scheme just €150m per year. Encouragingly, a wide range of actions towards this goal are expected to take place in the short term, such as the formation of “1 GW Kick-off-Programmes to demonstrate feasibility of CSP projects in interested MENA countries.”

The issue of supply

The emergence of wind energy as a key contender in the world’s renewable energy mix has been given a considerable boost in recent years. It is successfully tackling its bug bears of intermittency whilst expanding its installed capacity. Indeed, according to the Swedish Academy for Sciences the problem of uneven wind conditions is far from unsurmountable. Building wind farms that cover a larger area, in favourable locations (especially offshore) with more constant wind strength and the storage of energy are all offered as possible solutions. It is hardly surprising then that worldwide generation capacity from wind sources has dramatically improved since the turn of the century.

According to the World Wind Energy Association (WWEA), worldwide wind generation capacity reached 121,188MW in 2008, a 29 per cent YoY increase on the previous year and has more than doubled since 2005 when capacity stood at 59,024MW. During the past year, around 27,261MW of new capacity was installed. This represents a 42 per cent expansion in the market for new wind turbines, up from 19,776MW the previous year. Ten years ago, the market for new wind turbines had a size of 2187MW.

YoY figures reveal a sustained and accelerating growth in the market as market expansion increased from 23.8 percentage points in 2005 via 25.6 and 26.6 percentage points in 2006 and 2007, respectively, to the 2008 increase of 29 per cent. However, the latest leap in average growth rate is due mainly to the fact that the two largest markets, the USA and China, showed growth rates far above the world average – 50 and 107 per cent, respectively. In addition, Bulgaria expanded its wind park by 177 per cent (from a low base) and above average growth was also recorded in Australia (82.8 per cent), Poland (71.0 per cent), Turkey (61.2 per cent) and Ireland (54.6 per cent). As a result, all wind turbines installed by the end of the year were generating 260TWh annually, the equivalent of over 1.5 per cent of global electricity demand.

Recently-released figures indicate that around the world 37,000MW of new wind farms were built last year, representing a 36 per cent increase on the previous year’s expansion rate. “The continued rapid growth of wind power, despite the financial crisis and economic downturn, is testament to the inherent attractiveness of the technology, which is clean, reliable and quick to install,” said Steve Sawyer, the Brussels-based Global Wind Energy Council’s secretary-general.

Increasing geographic diversification

Demand also became more geographically diversified as 80 per cent of the market for new wind turbines was accounted for by eight leading markets rather than the five in 2007 (see Table 1).

Altogether, 76 countries are using wind energy on a commercial basis. This includes two 2008 newcomers, Pakistan and Mongolia, which both installed larger grid-connected wind turbines for the first time.

European strength

European wind power was given a significant boost in January 2008 when the European Commission tabled a proposal to generate 20 per cent of the area’s energy using renewable sources by 2020 – a package endorsed by the European Council at the end of the year in its Renewable Energy Directive. To meet this target, over a third of European power demand will have to be supplied by renewables with wind power envisaged by the European Commission to deliver 12 per cent. The directive has been welcomed by the European Wind Energy Association. Its CEO, Christian Kjaer responded to the agreement: “For the first time, each Member State has a legally binding renewables target for 2020 along with an interim trajectory to follow. The grid and administrative barriers whose shadows loom long over wind energy developers will finally be tackled. Member States will be able to work together to meet their targets under stable market conditions, which will give investments in the wind energy sector a boost.”

The statistics relating to market size illustrate the point. In 2008, Europe still proved the largest market with a total installed capacity share of 54.6 per cent, far ahead of North America and Asia, which accounted for 22.7 per cent and 20.2 per cent respectively. (The remainder is divided by Australia Pacific – 1.5 per cent, Latin America – 0.6 per cent and Africa – 0.5 per cent.) In absolute terms, this translates to a total installed capacity in Europe of 64,719MW at the end of 2008.

Moreover, running counter to expectations, 2009 proved a positive year for the European wind industry. The latest statistics published by the EWEA reveal that last year was another bumper year for the sector. Of all new electricity generating capacity installed, wind power takes firmly the top spot with a 39 per cent share, well ahead of gas (26 per cent) and solar photovoltaics (16 per cent) and it does so for the second year running. Across the EU, 10,163MW of wind power capacity was installed during the year, a 23 per cent YoY increase, taking the total up to 74,767MW. Investment reached EUR13bn, including EUR1.5bn in offshore projects. With sites for land-based wind farms at a premium, Europe is looking increasingly at its offshore wind resources for further development as IFandP will explain in a forthcoming piece.

On a country-by-country basis, Germany and Spain are vying for the top spot with varying success. In 2008, Germany came “top of the class”, installing 1665MW of new capacity, with Spain a close second at 1558MW. However, positions switched last year when the Iberian country brought 2459MW online, compared with Germany’s 1917MW. Italy has maintained a comfortable third place, increasing its capacity by 1010MW and 1114MW in 2008 and 2009 respectively. Elsewhere, France is just ahead of the UK with new turbines to the tune of 1088MW. Nevertheless, the expansion of the UK market during 2009 is telling. While in 2008, around 569MW of capacity was added, the country brought an extra 1077MW online last year, expanding its wind park to 4051MW. Moreover, the government announced the introduction of a feed-in tariff for community-based renewable energy projects although its 5MW cap is to limit market growth to moderate rates.

The new EU member states also seized the opportunity to meet their wind power potential. Estonia nearly doubled its capacity to 142MW and a similar trend could be noted in Lithuania, which increased its capacity from 54MW to 91MW. Other former Eastern bloc countries with sizeable additions include Hungary (+74MW to 201MW), Poland (+181MW to 725MW) and Bulgaria (+57MW to 177MW).

While pioneer country Denmark fell back to eighth place from the no.4 spot it held five years ago, it remains a leading wind energy player with around 20 per cent of its electricity supply delivered by wind power.

The advance of wind power comes amidst growing concerns relating to Europe’s energy security. The region currently imports about 54 per cent of its energy and projections see this figure climbing to 70 per cent by 2030. Not only is this share increasing but a significant part of imports originates in some of the most unstable regions in the world, including the Middle East and Russia. Wind power offers an attractive antidote, enabling Europe to become more self-reliant in energy supply and, thanks to its fossil fuel-free operation, subject it less to the vagaries of international oil and gas prices. EWEA states that in 2008, wind power avoided fuel costs of EUR5.4bn in addition to CO₂ cost savings of EUR2.4bn.

IFandP: What is the potential of biomass? What sort of percentage of the world’s energy needs could it represent?

Mr Nyström: It’s a political question. Technically the potential is tremendously high. Right now it represents about 11 per of the global energy demand. Most of this is in the form of very inefficient cooking and heating. Right now we have recently published a position paper based on a scientific report from the Swedish University of Agriculture Sciences.

There it says that we have the potential to sustainably develop bioenergy utilisation to the point where it meets all of the global energy demand, based on the IEA’s reports. And as we’ve heard from the CEO of the IEA, if we double energy demand by 2050, then we can’t meet the goal of limiting global warming to 2°C, so we must increase energy efficiency by 57 per cent compared to today’s level, at which point, total energy use is back to what we have today. At which point, there’s no problem meeting all of it with biomass.

It’s a political question because you have to create a framework, which allows people to convert to biomass from fossil fuels. Of course it will cost money, but if we don’t do that it costs more money. To take an example, one of our board members comes from Zambia and she has explained that the country has 13.5mha of very good land for agriculture. Today only 14 per cent is actually used, because there is no demand for the farmers’ products, so they grow only for their own needs. They can’t sell their products. If you create the demand for bioenergy, then you must create a system of infrastructure so you can transport the bioenergy down to the coast and out globally. Of course you can utilise this system to export food, not only internationally but also within the country from one area to another. And of course with such a system the people of Zambia would grow a little richer than they are today. In Zambia today, you have 65 per cent of the population earning less than US$2/day and 50 per cent less than US$1/day. That is what they earn in money. Of course they grow their own food., which is not included in these figures, but they are still very poor.

Energy supplies create energy creates wealth, more food and medical products. For example, if you grow the moringa tree, you can obtain in addition to energy, porridge from the leaves, medical products and the flowers raise the possibility of producing honey from bees. So demand for energy creates all the other products. In Zambia, there is enough rain to support agriculture, but in other parts of the world, irrigation systems are needed and energy from biomass could pay for these, allowing more food to be produced. I think that increased use of biomass could help to feed the world and produce a flow of money from the energy sector to the peasants and farmers in developing countries.

IFandP: When you talk about a transport infrastructure, what do you envisage? As most biomass isn’t that energy dense, are you talking about a distributed system where you have plants that perform pyrolysis and produce a syngas from biomass that then gets transported further afield?

Mr Nyström: Many developing countries have very poor infrastructure. They have no railways and in some cases, they have no ports. They have poor roads and of course, if you take Zambia for example, they have no oil and they can’t afford to import oil. They could grow jatropha, which is inedible. You can make some medical products from this nut against psoriasis, for example. But more importantly, these nuts are very oil rich so you use them to produce biodiesel. This means that you could supply Zambia with domestic biodiesel but it could also help generate the money needed to improve the country’s infrastructure.

Currently, investors are hesitant about investing in such countries due to political instability. I think a good solution would be one in which a basket for investment is set up which offers potential investors a rate of return a couple of per cent lower, than would otherwise be the case and this difference would act as a hedge against one or two failures. You could set it up, with the assumption that 10-15 per cent of such projects would fail as a result of political instability and other factors, such as poor management for example. So this sort of scheme could be used to raise the money needed for biomass projects and as many investment companies, such as pension funds would like to be seen as green investors, even private money could be used for this purpose.

IFandP: Do you see such projects tapping into traditional carbon trading schemes?

Mr Nyström: No, I don’t see that, but I don’t necessarily reject such an approach. Of course we can use the cap-and-trade system as well. We could also use these funds that the Copenhagen summit talked about creating. However, we don’t yet know who is putting money in these funds. The intention is that industrialised countries will pay. I think there will be different kinds of funds, but of course we can use many different strategies to find money for infrastructure investment. But what I talked about was a method to guarantee money for otherwise hesitant investors.

IFandP: What are your thoughts on the issue of water supply? Obviously increasing the use of biomass is going to be quite intensive in terms of water. Isn’t that going to be an issue in Africa?

Mr Nyström: The third report we will be releasing in a couple of months deals looks at the issue of sustainable biomass, which includes the subject of a sustainable water supply. I feel that biomass projects are not sustainable if they are threatening the water supply for other purposes so we have to have a mechanism, which says that unsustainable biomass projects are not considered acceptable. The flip side is of course that projects looking to be identified as sustainable must fulfill criteria relating to water use. They must also prove that they don’t adversely impact on rainforests, biodiversity, food supply, feed supply and so on.

Of course this mandates the setting up of a system to regulate the sector, but its not as if we would be starting from scratch as there are some sustainable forestry systems already in place, so we could take advantage of their experience or design a joint control system with them. I think that we yet to technically solved the problem, but it’s not a big issue.