CEO’s mega-plant dream raises eyebrows. Can it raise cash?

Source: Christa Marshall, E&E News reporter • Posted: Monday, November 7, 2016

SolarReserve CEO Kevin Smith has bold plans for building a solar power plant that’s more than triple the size of any other on the planet.

Without that massive plant, he says, California won’t meet its renewable targets.

“If people are skeptical about our project, then they ought to be skeptical California will get anywhere close to 50 percent renewables,” Smith said in an interview.

Smith’s company has proposed building a 2-gigawatt solar thermal plant in Nevada that would weigh as much as the Hoover Dam and be 10 times the size of the massive Crescent Dunes solar project. Launched last year in Tonopah, Nev., Crescent Dunes is the world’s first concentrating solar power (CSP) facility with tied thermal energy storage that operates day and night (Greenwire, March 29).

As it was proposed last month, “Sandstone Energy 10X” would essentially be 10 solar thermal plants in one with round-the-clock storage, covering more than 15,000 acres. Each of its 10 towers would provide more power than Crescent Dunes and use molten salt storage technology with new features such as wireless capability.

The plan calls for sending Sandstone’s power to California to satisfy its plan for 50 percent renewable power by 2030.

The Golden State target can’t be reached with wind and traditional solar panels alone, Smith said.

“You can only jam so much cheap [photovoltaics] before it starts affecting the grid,” he said. One factor is the existing “duck curve” challenge, where solar power is abundant at times of lower demand in the state and not available at peak times after dark, when natural gas must be tapped.

Traditional renewables tied to batteries won’t reach the goals, either, according to Smith.

“Batteries are very expensive, much more expensive than our storage by orders of magnitude,” he said. “Batteries are not well-suited for bulk storage.”

Among other challenges, they have more degradation issues and replacement costs, he said. They also could pose an environmental waste problem for a plant of this size, because of a need for disposal within a decade or so.

Smith said he is going public now because “we didn’t want the California markets to get too far down the road so they think their only option is batteries.”

Each tower at the envisioned project would have 10 hours of energy storage capability through a more advanced version of the company’s technology, already operational at Crescent Dunes.

The $5 billion Sandstone facility envisions concentrating sunlight on the towers through mirrors to heat molten salt stored in tanks. The stored heat could later be tapped to power a turbine, similar to a baseload fossil fuel plant.

But the plant is far from a sure thing.

The company doesn’t yet have financing, a selected construction site, full permits or a power purchasing agreement (PPA), but Smith said that is to be expected so early in the process.

SolarReserve is not expecting to begin construction for at least two more years, although it is planning to announce a specific site for the project in Nye County, Nev., in the next six months. The company assessed more than 12 potential locations in several states. The project most likely would be on public land, although that is not certain.

“Nevada has a more cooperative regulatory environment from a permitting standpoint,” Smith said. The plant will generate thousands of jobs in Nevada and tap U.S.-made materials, he said.

SolarReserve might also consider loan guarantees from the Department of Energy, although private financing is a likely option, he said.

“We certainly have interested parties,” including possible investors from a CSP project in South Africa that’s about to reach financial closing, Smith said.

Because of the economies of scale associated with Sandstone, it will be cheaper than a renewables-with-batteries option on a per-kilowatt basis, he said.

No slam dunk

But some analysts are skeptical that Sandstone Energy 10X will ever get built, considering the current lack of financing or PPA.

“That is not a project. That is a hope,” said Jenny Chase, an analyst at Bloomberg New Energy Finance.

Belén Gallego, a solar thermal expert at ATA Renewables, noted that a lack of transmission lines could be a challenge, in addition to uncertainty about finding a customer for the produced energy. By statute, out-of-state energy does not qualify to meet California’s renewable portfolio standard requirements unless the first point of delivery is under the California grid operator. “There are many milestones to hit to turn [this] into a reality,” Gallego said.

A SolarReserve spokesperson said “we do expect to connect into” the California Independent System Operator, or CAISO.

The National Renewable Energy Laboratory conducted a study earlier this year analyzing a 50 percent reduction in California’s CO2 levels, which would translate into a 55 percent renewable scenario by 2030.

Greg Brinkman, an NREL energy analysis engineer and co-author of the study, said that if California can build more flexibility in its grid by interchanging more power with neighboring regions and making its gas fleet more efficient, it might be able to reach the 50 percent target without adding a lot of storage.

The state is discussing options with neighboring states for more regional cooperation, although it’s not a done deal, according to Brinkman. If those plans don’t come to fruition, then other options — like storage and possibly solar thermal power — become more of a need, he said.

Even in that case, it’s still not a “slam dunk” that you would need a massive solar thermal plant in Nevada to meet demand, he said.

Matt Roberts, executive director of the Energy Storage Association, said the project shouldn’t be seen as a “one versus the other” with batteries, which often have a very different use than molten salt technology. You can’t put a massive CSP plant in downtown Los Angeles, for example, but you can use battery power. As one option for California, CSP with storage is “fantastic,” he said.

In the United States, the technology is not as competitive as it once was, though, because of lower prices for PV and shale gas, as well as a lack of available loan guarantees, Gallego said.

There’s almost 5 GW of CSP operating globally, but most growth is occurring outside the United States in countries like Chile, said Gallego. In addition to its project in South Africa, SolarReserve recently signed an agreement with China’s Shenhua Energy.

There also have been mishaps at U.S. CSP plants, such as a fire this year at the Ivanpah Solar Power Facility because of misaligned mirrors.

At Crescent Dunes, hundreds of birds died from flying into the plant (Greenwire, Aug. 31).

But Smith said the company has a “200-page lessons-learned manual” from Crescent Dunes.

For one, the company is looking at 40 percent cost savings in comparison to Crescent Dunes on its heliostat fields, which concentrate solar through specialized mirrors. It’s considering using wireless technology with the mirrors, as well as PV to help maneuver them. At Crescent Dunes, the heliostats are hard-wired.

For Smith, it’s much easier to go from “one to 10” with Sandstone than it was to go from “zero to one” with Crescent Dunes. It’s also important to remember that the Sandstone facility would meet about 3 percent of California’s power.

“While it’s a big project,” he said, “it’s not really that big when you consider the size of the California market.”