2009 has been full of contrasts for the CSP sector. A year industry players will never forget for the right and wrong reasons. On the one hand, the sector started off buoyantly and throughout the year, more CSP capacity (82 MW) was installed than in all previous years combined (72 MW). Puerto Errada 1, the first Fresnel dish plant in Spain, was opened, along with Abengoa’s PS20 plant, the largest solar tower plant in the world.
Spain now has 183 MW in operation and despite still being way behind the 500 MW of installed capacity in the US; Spain has an impressive 2,095 MW of CSP capacity under construction, compared to just 280 MW stateside. Consequently, Spain could soon be biting at the heels of the US to take over as global CSP leader.
Nevertheless, the sector has also watched helplessly as the Spanish government introduced two changes – one successful and one aborted – in legislation affecting CSP, which caused financing to dry up; paralysing activity and taking the sector to the brink of financial ruin. Despite positive signals from the sector that it is starting to recover, the long-term damage to the image of Spain’s CSP sector caused by these legislative uncertainties remains unknown.
In this exclusive interview, Carlos Muñoz, President of the Solar Thermal Electric Division of Spain’s Renewable Energy Producers Association (APPA), gives his views on where Spain’s CSP sector stands after this frenetic year of ups and downs, and talks about what is needed to regain investor confidence in the sector and drive growth in the future.
Interview date: December, 2009
Interviewer: Toby Price
Obviously, the first question is, where does the Spanish CSP sector stand now?
The sector has finally taken off after the initial uncertainty surrounding Royal Decree Law 6/2009 that effectively threw Royal Decree 661, which everyone understood and had internalised, out of the window. This was the result of a lack of communication with the sector, which has to be listened to prior to legislating. The positive work of the government can be devalued if this is not done.
In any event, after resolving the issue of communication, the balance is positive since a significant number of projects have been covered [by the feed-in tariff].
Furthermore, in light of the Government’s positive attitude towards our sector, we must develop a new legislative framework, which we must work on together, for the new period. All involved must put in everything they can to improve all technical and economic aspects to ensure we do not disappoint those who have believed in us and in our technology.
Under the best case scenario, Spain could have 20,000 MW of CSP capacity installed in 2020. What conditions are required in the sector to achieve this figure?
It is almost impossible to reach this target in 2020. The crucial thing is to rapidly develop a new Royal Decree clarifying the terms for the period 2013-2020, so that companies can focus on innovation and improve their projects in the knowledge that clear and stable legislation is in place.
Valeriano Ruiz [President of Protermosolar, the Spanish Solar Thermal Electric Industry Association] has said that solar thermal electric power, “is the most intelligent and efficient way of generating electricity in Spain and should therefore, contribute very significantly to the electricity system in the future; much more than all other renewables and, obviously, conventional fuels”. Do you believe CSP is destined to take over top slot from wind in the renewable energy league table in Spain?
In APPA, we have a wider view of renewable energies. All are important and necessary. We must first define the energy model we want for the European Union and Spain and then set out to achieve it. In this respect, all energies are important. As with other technologies, the technological development of wind power has been considerable. With CSP, we have the tools to achieve significant and rapid development. We have researchers, public organisations, and private companies working hard to innovate and improve and so we will see the results in the short term. It would be fantastic to become leader, but to achieve this we need to be humble and tenacious.
How important is thermal storage for the sector’s future?
It is critical to the evolution of our technology because heat storage offers the possibility of operating 24 hours a day and silencing the critics who only talk about instability and inefficiency in order to attack the renewable energies sector.
Which of the following innovations do you believe will have the greatest impact on CSP: direct steam generation, dry cooling or molten salt?
The three are fundamental. Direct steam generation will be commercially viable in the short term, while dry cooling and molten salts are already being used commercially. However, we must not stop here and should strive to make improvements in the three areas: solar field, power block and fluids.
A solar thermal electric plant can operate in parallel with a conventional thermal power plant. Do you believe the integration of these two types of plant is a good opportunity to increase the penetration of CSP in Spain?
I don’t think this scenario will be relevant in Spain; however, this doesn’t mean it wouldn’t be interesting to develop this type of plants to improve performance.
Do you consider hybridisation (both solar with gas and solar with biomass) to be positive for the sector?Very positive. I go back to my comments at the beginning. If we want to hybridise with biomass, we need to gather together all interested parties: the biomass and CSP sectors, the Spanish Institute for Energy Diversification and Saving (IDAE), the Ministry of Industry, and try to find common ground from which to move forward. Without a period of discussion and clarification, nobody will be prepared to take the leap.
Desertec: a controversial concept, but one that has helped boost interest in CSP around Europe. Are you in favour or against this initiative?
I am sceptical, although we should consider the positive aspects. I am concerned about the lack of specifics when there is talk about encouraging development on the other side of the Mediterranean, while all the energy will be generated to supply Europe. Equally, if a feed-in tariff is currently needed to develop the technology in Europe, it isn’t clear how or who will support this development [in Africa]. In short, there is still a lot to be resolved, including what interests lie behind the project. If APPA defends anything it is transparency, clarity, development and innovation.
In another recent interview, Valeriano Ruiz declared that “the point when the cost per kWh of these [CSP] technologies is equal to that of conventional technologies will be reached between 2015 and 2020. It will cost approximately the same to generate a kWh with these [CSP] technologies as it will to generate it with natural gas or coal between 2015 and 2020”. When do you think CSP will reach grid parity with fossil fuels and what factors will contribute to this goal being reached?
My lay approach to all aspects of life makes me sceptical about prophecies such as this, which I think are closer to religious beliefs. I consider that we, as a sector, should move towards grid parity by improving the technologies and reducing operating costs. The external factors are unpredictable. For example, who would have predicted the current financial situation five years ago? I insist. Our focus should be technological.
The recent European Renewable Energies Directive enables one Member State to contribute to meeting the targets of another Member State using renewable energy generated within its borders. What does this opportunity mean for Spanish CSP companies?
We are currently a technological benchmark in Europe and are therefore, well placed to export CSP technology, experts and components. If nurtured, this could indeed be crucial. It could constitute a key factor in reactivating the beleaguered Spanish economy. As I said before, we have the tools, we just need all of us – Government, industry, the Ministry of Innovation, etc. – to move forward as quickly as possible.
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