Advantages of Solar Thermal or CSP – Part II

It’s been about two years since I wrote my last post on this subject.

I have been involved in the industry since, and a lot has changed since then. Unfortunately not so much for CSP, but a lot more for the competition and the market.

In terms of competition – PV prices are continuing to fall aggressively. There are programs being proposed that aim to bring the cost of PV technology to $1/W in 5 years time-frame. Currently large scale systems are easily between $2.5-$3/Wac (USA). This is terrific for solar energy in general. But CSP technologies have not been able to keep this pace generally, and will not be able to compete on cost alone. Large CSP projects could be cost-effective, but the size comes with its own problems (which brings me to the next point…)

Market (at least in US) has evolved that utilities have become very comfortable with PV plants. The plants are small, come online faster and generally don’t have to deal with the regulatory uncertainty as large CSP plants.

BUT…there are still two strong advantages of CSP and the future would depend on how the industry is able to leverage these strengths. Ultimately, it’s about how CSP can reduce lifecycle cost of electricity generation.

1) Storage: As I mentioned in my previous post, Storage (specifically as heat storage) is a strong differentiator. In the last two years, the cost of storage has become cheaper. Many more plants with the molten salt storage configuration have come online in Spain. A recent 19MW project stores 15-hrs of electricity to give almost ‘baseload’ power on sunny days. There is no electricity storage that is close at this scale in the near term.

2) Dispatchability through Hybridization: CSP lends itself easily to being a part of a hybrid plant. Some options are: Solar-biomass, Solar-geothermal, Solar-coal, Solar-combined cycle, Solar-natural gas hybrid, etc. Essentially anywhere there is requirement for steam, solar thermal can provide it. Most of these combinations improve the economics of the second fuel source as well. These are not cookie-cutter projects, but could be a valuable way to leverage the strength of CSP and provide near base-load plants.

Another advantage stated for CSP is it’s ability to buffer cloud events (which affects PV more drastically) to reduce the variability in the electricity generation- but utilities in US don’t seem to be willing to pay for this. Many other countries are more mindful of the quality of generation and value this benefit. The argument that distributed PV reduces variability by it’s nature of being distributed and small, is strong as well.

Some of the recently announced projects in CSP in US and worldwide, leverage the above aspects and hopefully, should be able to demonstrate the value of this integratable technology. Either way, it’s going to be very interesting next 3-yrs for the industry.

Debunking the 10 Energy Myths

Great article and a quick read. Although its a bit US Centric.

Covers – biofuel, nuclear, solar, wind/smart grid, efficiency, etc

Debunking the 10 Energy Myths

Switching to Renewable Energy – Part IV

May 2010 has been a good month – graduation, partying and a new job. I started at Ar.eva Solar this week in the sales and business development group – helping sell solar thermal systems worldwide.This is the same team that was previously called Au. sra – but earlier this year was acquired by the French nuclear company, Ar.eva. The latter for last few years has been building up a portfolio of renewable energy technologies and this is their solar bet.

What it means is that the company, as a part of a big organization, is not going to be cash strapped but hopefully still maintain its nimbleness – at least for the next couple of years. I am excited about the opportunity and there are a lot of new things to learn. It’s going to be a good ride for sure. I will post more on solar/renewable energy as I learn more – but for now this is the last blog on the “switching to renewable energy” topic.

It’s great to be sitting in a meeting where “carbon footprint” is organically brought up as part of business . Good luck for all the other switchers out there.

Articles on PV O&M

This blog is becoming increasingly varied – but it’s still a pretty good reflection of my life in general. Baby, business and renewable energy/ solar are going to be ongoing themes for a long time nevertheless.

A couple of weeks back I started contracting for a hot bay area start-up making micro-inverters. They make a hardware that improves the overall efficiency of any solar photovoltaic (PV) system through better technology and monitoring. In trying to understand the system, I came across a series of articles by Bryan Banke of Solar Power Partners, on maintaining commercial scale PV which are excellent in depth and breath.

http://www.renewableenergyworld.com/rea/news/article/2009/10/solar-electric-facility-o-m-now-comes-the-hard-part
http://www.renewableenergyworld.com/rea/news/article/2009/10/solar-electric-facility-o-m-now-comes-the-hard-part-2
http://www.renewableenergyworld.com/rea/news/article/2010/02/solar-electric-facility-o-m-now-comes-the-hard-part-part-3

Switching to Renewable Energy – Part III

I am still looking for that elusive full-time gig in the renewable energy industry. I have been at it for last 7-weeks since we got back from India. Things are looking up – but it has been far from easy. In this post I wanted to share a couple of observations about the job market in cleantech for bizdev (post MBA, non-technical aspirants).

Demand and Supply of Job Seekers
Doing a general search for solar/renewable/cleantech jobs would get many open positions throughout the country. These are not as many as software (the industry I compared with) – but again the sector is not that big yet. So for the infancy of the sector – there seem to be decent number of jobs. It could be better more into 2010. The companies are just coming out of their stringent 2009 financial conditions and seem very cautious about hiring.

It seems there is an increased supply of candidates who want to enter the sector. There are many very qualified people who are either genuinely interested, interested due to bleak prospects in other industries or are unemployed. In the last few months, I have spoken to numerous friends/acquaintances, who are unexpectedly interested in the sector. For the companies looking for candidates – there is a huge pool of candidates for any bizdev position. So the competition is quite fierce – and you also have to compete with free (people willing to do unpaid project work). It also means that it’s taking longer to hear back from them and to complete the interview process.

Fit
I shared some ideas on this earlier in this blog post. Fit is a big deal one for anyone making the switch. Here is a more specific example. If you are wanting to work for a solar installation or a renewable energy project development company (quantitatively there are seem more companies in the deployment area) – the skills that are needed are construction management, financial analysis and sales. Only for larger, more established companies are marketing, channel development, product or process improvement skills needed. That’s a pretty narrow scope of skills really.

Location, Location, Location
I have been looking in and around Bay Area. It might help to be geographically flexible. But there are only few hot spots for renewable energy activity in US – Bay Area certainly is the leader. So if you are not located in the vicinity – make a couple of trips to increase your network. Knowing companies in the Bay Area would be more bang-for-buck eventually for making the shift.

Switching to Renewable Energy – Part II

I went to a Haas Energy Club (BERC) event yesterday. I suddenly realized that I am on the other side of the table now – instead of talking to people “in the industry”, I belong to it and was supposed to impart wisdom to students who are still trying to make a switch to renewable energy

In one of those chats, I was questioned about the profiles that would be a good fit in renewable energy. This is important to know since most of us do not come from a power engineering or a semiconductor background to make an “obvious fit”. Knowing your transferable skills is key to be able to tailor your resume and highlight projects that reflect those skills, so it makes sense to a recruiter in renewable energy. Four such profiles are:

Sales: If you have done sales, you can always sell something else. Most sales people know this – so I will not belabor the point. It’s easier though if you have done B2B sales since many non-residential sales are a multi-week/month sales process and knowing how to navigate through the sales cycle and the organization is key skill.

Technical Application: I seem to be getting pushed into this direction because of my technical background. I don’t remember when I had to last use laws of thermodynamics in a professional setting. Interestingly, I remember more than I ever thought from those classes in undergrad that I never paid any attention in. I am sure that is the case with many ex-engineers. Understanding the technology helps in competitive analysis, market analysis and even speaking to prospects. These are typically bucketed in “biz dev” but instead of talking in pure $ or cost-benefit, if you can tailor your experience to demonstrate that you can understand and apply new technology – that would be useful.

Financial Modeling: All renewable energy needs money and most companies selling technology have none. So money needs to come from outside – venture capitalists, private equity, banks, government, etc. All these institutions need to see models highlighting the assumptions that the renewable energy company is making to claim the “low-cost energy source” that they make. So if you can highlight any excel or deal structuring skills – that would be useful. The two companies that I have worked in have separate departments for the financial modeling for cost/benefits of the technology.

Regulatory/Policy/Government: I am clubbing these together – and I am sure there is a lot of difference in each of these, but the idea is that in renewable energy the macroeconomic context matters – unlike software or other non-regulated industries. So if you have had an opportunity to work with government officials, any policy issues within external organizations, telecommunication which is semi-regulated or perhaps a regulated industry in another country – then those skills can be useful in renewable energy.

Power of Local Knowledge and Solutions

Here’s an interesting story on human ingenuity and perseverance. Finding local resources to power your lives, is something that appeals a lot to me about renewable power resources. There’s something about being self-sufficient for basic needs, that is very powerful and motivating.

http://www.time.com/time/world/article/0,8599,1717149,00.html

Advantages – Concentrated Solar Thermal (CSP)

I attended the CSP Today conference last week in San Francisco. A well attended event with many industry gurus sharing their views about the state of CSP in US.

It seems to me that there are three main advantages that are often touted for CSP (over Photovoltaic let’s say…) – Storage, cost and predictability of output. Besides predictability, the other two seem to be subjective.

Storage
This is the only solar technology that allows for storage naturally. Since the solar radiation is indirectly converted to electricity, there is an opportunity to store the collected heat in molten salts, before converting the heat to electricity.

The cost of setting up the molten salt system is exorbitant. The financial viability of the storage option depends on the incentives. In Spain, the power companies are incentivized based on the total energy output (MWh) into the grid. So they try to maximize the energy produced and having storage allows for higher energy / capacity factors – thus more revenue. Also the feed-in-tariff is enough to justify the extension of the salt system.

In US the companies are incentivized for the installed capacity (MW) through the investment tax credits. The credit is independent of the total energy production. So in US, the additional investment in the storage technology is not financially viable currently. The scarcity of projects demonstrating the molten salt technology also leads to more risk, leading to financing hurdles. The whole industry is waiting to see Solana (280MW, 6 hours of storage) project in Arizona get financed and built to lead the pack.

Cost
The common understanding is CSP is cheaper than PV due to the use of off-the-shelf, commodity components like mirrors, turbine, etc. It also was known to have higher efficiencies in solar to electricity conversion (~15%).

Due to the global oversupply in PV panels and reduced demand due to the financial crisis, the prices of the panels have drastically reduced. On the efficiency front, the PV at 15-20% efficiency is typical now, further adding the cost parity. The result is that PV is now at parity or close to parity with CSP. One western region utility claimed that they pay 0.16 c/Kwh for CSP and 0.14 c/Kwh for PV. This difference was attributed to the timing of the PPAs, generally the difference is not significant anymore.

Predictability
The ability to provide “firm power” is a clear advantage of CSP at this time. Due to the output being provided by a steam turbine (and not directly from the field) and a ~2 hour built-in buffer in the trough technology, small variations in the in insolation do not affect the turbine output – like a passing cloud. PV on the other hand can have a very sporadic output profile. The firmness of power is highly valued by the utilities. No other solar technology existing has this benefit. This benefit is unique and is valuable, and I believe would be discussed more in months to come.

3 Tips for Switching to Clean Energy

I wanted to share a few things that helped me in my search to switch to clean energy. Broadly, I’ll consider them three twists to well-known strategies.

1) Long-term focused networking: I attended events, conferences and talks pretty regularly in the last couple of years. These days I am running into the same people on multiple occasions. This is likely to happen in any city – since the sector is in its toddler stage and the number of people involved from an area is finite. Somehow “networking” gives the perception of maximizing the number of contacts and cards exchanged per event. This did not work for me, since in a 45-min “networking session”, I could often only muster up 4-5 conversations. And if at the end, I had 5 new cards that meant, 5 more follow-ups with bleak prospects. So I started speaking to the same old-faces that I was seeing and might have already met in the past. Meeting them over and over again, and getting an update from them – firstly, made them better contacts (even friends) over time. Secondly, the information exchange was free flowing. So if they were able to work-up an opportunity, they would be willing to share it with you more readily.

2) Volunteering: can’t say enough good things about this strategy. It prepares you in so many ways – expertise, networking, feeling good about devoting your time, credibility…..and perhaps many more. These days there are numerous opportunities to volunteer for clean-tech related events. I would also suggest to not optimize too much on the perfect event, technology or location- just go out and spend some hours volunteering for any clean-tech opportunity you get. If you are in the Bay Area, you could check out non-profit solar installation orgs or business plan competitions or numerous conferences and symposiums. A short starter list:
a) Grid Alternatives
b) Clean Tech Open Business Plan Competition
c) Berkeley Stanford Speaker Series or other Univ. of California clubs like BERC. Thee university events do not restrict volunteers to a university affiliation very strictly.

3) Building your knowledge: Nothing speaks better than true knowledge that prospective employers hear in an interview. I have had the opportunity to work on many projects while at Haas, to build knowledge (even if theoretical) on many clean-tech business aspects – solar PV, solar-chemical storage technology, natural ingredient supply chain, energy regulations as well as business plans, pricing, licensing and others. In my recent interviews I mostly talked as much about these projects in the last 2 years as my professional life before that.
As a student there are many structured ways to build this knowledge, but even if you are outside (non-student) – helping a student team with their business plan, reading, blogging, etc would be equally good. If you can take a course in this field, that would give you immense credibility boost and perhaps some good contacts. Many solar PV companies themselves are providing training sessions or webinars, which would be good to subscribe to. I mentioned attending conferences already. Subscribe to energy related groups and mailing lists in your area or even outside.

Another thing I have noticed is that clean-tech companies and start-ups are seeking part-time people (due to budget constraints, lack of perfectly fit/inexperienced candidates). Try to get a 5-10 hour part-time gig (even if you have to work for free) and help out a clean energy company and get something on your resume (and again get contacts)

Obviously, there are thousands of paths to this destination. So feel free to comment with what might have worked for you. I feel there is good job demand in the clean-tech sector (although fewer for business development people than on-site green-collared jobs) but there is also a good supply of potential employees (unemployment at 10%)— so anything that you can do to become a better “fit” in this environment will pay good dividends. Good luck.

Switching to Clean Energy

Starting next week, I’ll be interning with a company exploring concentrated solar thermal technology. To say that I am excited would be a massive understatement….but I’ll say anyway “I AM EXCITED!!!”

I have been wanting to get into clean energy or more like environmental businesses since let’s say since I graduated from IITB. But the desire just got more intense in the last couple of years. This was one of the reasons to attend Haas…and it seems to have paid off. I attended a great conference earlier this week and it turned out to be more engineering than I have seen in a while. But I felt at home finally.

Here’s to doing something that you love, make a difference and hopefully get rich in the process.