Why Middle Eastern petro-states are the new solar-energy hotspots

March 18, 2013
Obsession
Energy Shocks
March 18, 2013

The world’s largest solar thermal power plant went online yesterday—in Abu Dhabi.

The inauguration of the 100-megawatt Shams 1 power station by Abu Dhabi renewable energy company Masdar underscores the emergence of Middle East petro-kingdoms as the new hot market for solar energy as European markets constrict and developers in the US face hurdles to building massive projects in fragile desert environments.

Masdar chief executive Sultan Ahmed Al Jaber called Shams 1 “a major breakthrough for renewable energy in the Middle East,” noting that the company now generates nearly 10% of the world’s solar thermal electricity. Shams 1 will power about 20,000 homes in the emirate.

For OPEC states, renewable energy is a long-term strategy to preserve their most precious resource. The more solar electricity sun-soaked, oil-rich nations like the United Arab Emirates can produce to power their domestic economies, the more petroleum they conserve to export.

Saudi Arabia, for instance, announced late last year that it’s seeking $100 billion in investment to build enough solar energy capacity to supply a third of the nation’s electricity demand. And petroleum-poor Israel is looking to solar to lessen its dependence on Middle East Oil. In November, it awarded a contract to California developer BrightSource Energy and Alstom, the French energy giant, to build a 121-megawatt solar thermal power plant.

The $600 million Shams 1 project is also a boost for the solar thermal industry, which has faced growing competition from photovoltaic power developers as the price of solar panels has plunged in recent years.

Unlike photovoltaic power plants, which put on the ground thousands of solar panels like those found on residential rooftops, solar thermal—also called concentrating solar power (CSP)—uses mirrors to heat a boiler full of liquid to generate steam, which drives an electricity-generating turbine. While technologically more complicated than photovoltaic power plants, solar thermal stations can operate for longer periods and are less prone to losing power from passing clouds, because it takes time for the liquid in the boiler to cool.

The 2.5-square-kilometer (0.96 square mile) Shams 1 deploys long rows of curved mirrors called parabolic troughs to focus sun on overhead pipes filled with synthetic oil. Shams 1 is unlikely to keep its world title for long, though. Later this year BrightSource Energy’s 370-megawatt Ivanpah solar thermal power plant is set to come online in the California desert, as is a 280-megawatt solar trough project in Arizona built by Abengoa of Spain.

The joint venture that built Shams 1 is also an indicator of the changing economics of large solar thermal projects, which often require billions of dollars to construct. Masdar created a partnership with erstwhile competitors Total, the French energy conglomerate that owns a majority stake in US photovoltaic developer SunPower, and Abengoa.

Such alliances among competitors are becoming increasingly common. On Friday, BrightSource and Abengoa announced they had formed a partnership to build a 500-megawatt solar thermal power plant in California using BrightSource’s technology.

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