President Obama announced recently that US Department of Energy (DOE) has offered a conditional commitment for a $1.45 billion loan guarantee to Abengoa Solar, Inc. The loan will support the construction and start-up of Solana, a 250 megawatt peak (MWp) concentrating solar power (CSP) plant in Arizona. (1)
Great! A large scale solar plant in Arizona means money in the pockets of US equipment makers, engineers and workers. And generally speaking, a boost to the local economy. But wait, not so fast. The $1.45 billion (yes, with a B) goes to a Spanish company. Yes, Abengoa Solar is one of the largest solar companies in Spain. (2)
Now, why would the US Government loan money to a Spanish company, instead of supporting US equipment makers and engineering companies? Is the US lacking in CSP know-how, or manufacturing capabilities? Are we so incompetent or incapable technologically that we cannot design and install CSP power plants? Not even close! The CSP technology was developed in the US, and funded by US DOE, over 30 years ago. And we have so many CSP plants successfully operating for decades, and others coming on line as we speak.
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354 MW of SEGS plants continue to operate successfully on the California power grid. Annual output of the plants has increased by 35% as plant operations have improved during the past 10 years, and operation and maintenance costs have correspondingly dropped 40%. These plants have demonstrated the ability of US companies to design, install and operate CSP power plants to meet utility requirements.
A recently permitted and presently under constructions CSP power plant is NextEra’s Beacon Solar Project, 250 MWp on 2,012 acres of former farmland (alfalfa), using Parabolic Trough technology, just like Solana. Cost is approx. $1.0 billion, which works out to $4.00/W of AC power produced.
Note the $1.0 billion cost of a 250MWp Beacon Solar power plant, vs. $1.45 billion for the same 250MWp of the Spanish built Solana power plant. $4.0/W for the US plant, vs. $6.0/W for the Spanish one? So Solana is 1/3 more expensive, no matter how you look at it. And the Spaniards will take the difference home, while we here will get minimum wage jobs and lots of Spanish high tech labor and equipment made in Spain exported to Arizona.
The US CSP industry includes 21 companies who design, sell, own, and/or operate energy systems and power plants based on CSP technology. CSP companies include energy utilities, independent power producers or project developers, equipment manufacturers, specialized development firms, and consultants. While some firms only offer CSP products, many offer related energy products and services.
Four of these are Fortune 500 companies—several times bigger, more versatile and more capable than Abengoa Solar. And many times more experienced as well.
Current US, CSP related, companies include:
Duke Solar Energy, LLC
Nexant (a Bechtel Technology and Consulting Company)
The Boeing Company
KJC Operating Company
Florida Power & Light Energy Operating Services, Inc. (FP&L)
Salt River Project
Arizona Public Service Corporation
Spencer Management Associates
Stirling Energy Systems
Science Applications International Corporation
Concentrating Technologies, LLC
United Innovations Inc.
Industrial Solar Technologies
Kearney & Associates
Morse Associates, Inc.
Nagle Pumps, Inc.
In addition, Sandia National Laboratories and the National Renewable Energy Laboratory (working together as SunuLab)—and fully funded by US DOE with millions of dollars in tax payers’ money–provide technical expertise and research and development support to the Department of Energy’s CSP program and the US CSP industry.
So, the US DOE has a well funded CSP program, which is intended to support US companies? But yet, they are happy to give a $1,450 million loan to a Spanish company? How do they justify that anomaly? And especially during these very difficult times the US economy is going through.
In summary, with the implementation of the $1.45 billion Solana power plant, Arizona gets 1600-1700 construction jobs, or max. of $8.5 million in construction job salaries for two years, or approx. 1.1% of the total cost of the project. We also get 85 permanent jobs at the price of $17.1 million paid to the Spaniards for each job created. What a deal. And everybody, including our President, is so very happy, while the US CSP manufacturers and engineering companies are kept out of the solar energy market.