Here comes the high-cost sun

SOLAR energy is non-polluting but the burning question is how to produce it cost effectively.

Sydney Theatre Company solar

MARRYING the twin concerns of the federal government's carbon pricing challenge and Japan's Fukushima nuclear emergency, Julia Gillard yesterday took a picture opportunity at a solar power research facility at the Australian National University.

The Prime Minister's message was that pricing carbon was about creating the right incentive to drive the clean energy future that would be good for the environment and good for Australian jobs.

It was a message she wanted to be heard yesterday, given the federal government's climate change adviser Ross Garnaut will launch his updated paper on low emissions technology tomorrow. He will look at advances in solar and other technologies in Australia and globally.

But at a post tour press conference Gillard was not asked once about solar power. Attention was focused instead on the government's delayed tax summit, the bombing of Libya, the Christmas Island asylum-seeker quagmire and the failure of indigenous policy in the Northern Territory.

Given the looming carbon tax, renewed concerns about the safety of nuclear power and Australia's longstanding role as a key player in solar research and development, there is a lot to be said about efforts to harness the power of the sun.

As Gillard's visit to ANU highlights, Australia remains at the forefront of global research of photovoltaic panels, which convert sunlight directly into electricity, and large-scale concentrated solar thermal plants that offer the promise of stable supplies of electricity, even at night.

While neither technology can yet compete with fossil fuels such as coal and gas for reliability or for price, the solar development and technology curve is moving quickly.

According to Mark Twidell, executive director of the Australian Solar Institute, solar PV remains the faster growth curve locally and globally.

This year there will be about 20 gigawatt hours of solar PV installed globally and it is a good bet that Australian research will be included in most of the panels.

The global market for photovoltaic panels is about $100 billion a year with the costs falling dramatically in response to the economies of scale from boosted production capacity at low-cost centres such as China.

During the past year, prices have fallen by 20 per cent to 30 per cent as the manufacturing industry expanded by 50 per cent.

Experience during the past 30 years shows that costs can be expected to fall by 20 per cent for every doubling of industry production. Increased production scale also has resulted in a structural change in the supply chain, with the solar industry no longer forced to buy scraps from the semiconductor industry for its silicon.

"We have seen adjustments in silicon manufacturing so they are dedicating supply to the solar industry, which is resulting in much greater cost stability and price reduction," Twidell says.

The solar industry says improved efficiencies will continue to drive down the cost of solar panels to the point where the cost of electricity production at the household will be comparable with the retail price of electricity.

"Electricity is getting close to 40c a kW/h in the afternoon and that is about what could justify a business model for household solar panels," Twidell says.

In Australia, falling prices have driven an explosion in public demand for rooftop solar panels, which has forced state and federal governments to prematurely reduce public subsidies.

But even with the growth, solar power is still responsible for only a tiny fraction of Australia's total electricity market. And even at a large solar scale of 50 megawatts or bigger of electricity an hour, photovoltaics still cost twice as much as wind and four or five times as much as coal or gas.

(In comparison big coal-fired plants pump out more than 700mW.)

"Wind sets the market in the context of Australia and the renewable energy target," Twidell says. "You are able to finance wind projects at the $100 to $120 per mW/h level but solar PV at scale still requires double that."

Solar photovoltaic does have its advantages, however, not least of which is the fact it generates electricity during the day when electricity prices are higher.

Like wind, solar photovoltaic plants will produce only 20 per cent to 30 per cent of their peak capacity but, Twidell says, from an investor's perspective it is easier to forecast how much electricity a solar power plant will generate.

Rather than compete, Twidell says, solar complements wind, which is often better at night when solar PVs are not producing.

However neither wind nor solar PV can deliver the round-the-clock reliability that can replace the baseload electricity delivered by coal and gas.

This is why the new frontier for solar is in the area of concentrated solar thermal, where mirrors are used to focus the power of the sun.

The attraction of solar thermal is its ability to store heat and supply "firm capacity"(guaranteed to be there on demand) to the electricity market as opposed to intermittent capacity from solar PV or wind.

"By having firm capacity you don't need to have the complexity of another gas generating plant sitting behind you in order to secure supply," Twidell says.

But solar thermal is a less developed industry globally than solar PV, supplying less than 1GW of electricity a year compared with about 20GW from solar PV worldwide.

However, there is a lot of research under way, with the emphasis changing from what are known as line focus systems to point focus systems, or solar towers.

Line focus systems include trough technologies, which have been working in the US at a commercial utility scale level since the late 1970s.

The trough systems comprise a long, mirror-lined trough that concentrates the heat of the sun on to a liquid that is used to drive a steam turbine.

Trough systems are very reliable, well proven and can attract bank financing.

But it has proved difficult to get the cost of electricity production below 30c a kilowatt hour, compared with 5c a kilowatt hour for coal-fired power, because of high related costs such as land and steel.

To really drive solar thermal technology down the cost curve it is necessary to increase the temperatures that can be generated from the mirrors.

The goal is to increase temperatures from about 300C, which the solar trough technology can achieve, to the super-critical temperatures achieved by modern thermal coal power stations.

To get there, research is shifting from the trough system to banks of mirrors, or heliostats, focused towards a solar collector at the top of a tower.

ANU is developing a system using a big mirror dish.

Both methods are capable of producing much higher levels of concentration of sunlight to get higher temperatures.

Australia's CSIRO is completing construction of a solar tower research project at its Newcastle renewable energy facility.

The CSIRO project is focused on a medium-scale solar tower project suited to our electricity demand and financing profile.

Unlike most solar thermal plants, the CSIRO project is based on a Brayton cycle air turbine, which does not run on water, rather than the more traditional Rankine cycle turbine, which is driven by steam.

CSIRO's Brayton cycle power generation technology works in exactly the same way as an aircraft jet engine but, instead of using kerosene to heat the air and expand it through turbine blades, mirrors are used to concentrate the sun's rays to heat air and expand it through the turbine to produce electricity.

According to James McGregor, energy systems manager for CSIRO Energy Technology, the aim is to get the cost of electricity produced from the tower down to 10c a kilowatt hour, which would make it competitive with existing electricity supplies. The starting point is expected to be 20c to 30c a kilowatt hour for a pre-commercial scale 1mW plant.

The new solar field will start operation and testing this month, with an official launch mid-year.

A big attraction of the CSIRO plant is that it does not require water, which makes it ideally suited for use in Australia's remote mining areas that have the world's best solar resources but not much water.

"A lot of solar thermal technologies use water to generate steam, but a lot of the best solar resource is in the desert and, guess what, the desert doesn't have a lot of water," McGregor says.

"To really develop technologies that reduce the requirement for water is going to be critical."

Even at a higher cost the technology will prove attractive for mining companies in the northwest that at present are forced to rely on expensive electricity from diesel generators.

Wes Stein, renewable energy manager for CSIRO Energy Technology, says take-up by mining companies in remote locations would help prove the technology so it could be financed and developed on a larger scale.

"Australia has never had the capacity to put $1 billion down on some new technology that has big risk," he says.

"We can access $50m to $100m in risk capital but the steam turbine systems being developed elsewhere all have to be 100mW or bigger, which need a hell of a lot of money."

The solar tower using a Brayton cycle turbine can be built on a scale of 1mW/h, 5mW/h or 10mW/h. To scale up to 100mW/h is a matter of building consecutive solar towers.

"That sort of flexibility for Australia is essential because there are only so many places in Australia where you can build a 100mW solar power plant that has land, transmission, roads, sun, gas backup and in particular the transmission capacity," Stein says.

The CSIRO is also pioneering other solar technologies.

"What we are doing is developing the mirror technology as best we can to be low cost and high precision because if we get this right we can do lots of different things: we can do air turbine, we can do steam generation, we can do storage, we can do liquid fuel," Stein says.

Solar researchers in Australia are looking at the Desert Tech concept, which proposes selling solar electricity from North Africa to Europe. But Stein says Australia does not have the luxury of being able to send across the Mediterranean, going from the North African sun to the European green energy market, where electricity prices are 20 times higher. Instead, Australian researchers have been developing a way to concentrate solar energy to turn gas into a liquid form and boost its energy content.

"The thing we want to do is make solar liquid fuels," Stein says. "If we can get the sun into liquid fuels we can transport that around easily. That would be the best way to transport Australian sun to Japan."

Stein says the technology starts to become effective at about $100 a barrel oil price.

Twidell says solar thermal technology is following a predictable development path.

"One of the big challenges for solar markets generally is to find applications where they become economic first because that develops scale and gives financiers confidence that the technology works," Twidell says.

"It is almost a progression towards the central grid."

In photovoltaics, that pathway started with individual households and in solar thermal it is likely to be in off-grid areas such as remote mining towns.

Twidell says solar will not replace existing coal and gas power plants but will make an increasing contribution to the energy mix.

"Any system needs a diverse range of inputs and outputs to be sustainable, and the energy system is no different," he says.

Certainly solar thermal has a role to play and the potential to be a part of a bigger picture.

Says Twidell: "We are starting to see a lot of activity happening now and over the course of this decade we will start to see the next wave of solar technologies being demonstrated at a scale that will give the finance sector the confidence it needs to roll it out beyond that."