Project Review: Setting The Standard For Solar Storage

The Crescent Dunes Solar Energy Project will provide renewable power without intermittency

One of the greatest issues with renewable energy generation is its intermittency. Utilities still need to provide people with power when the sun is not shining or the wind is not blowing.

Many times, fossil fuels such as natural gas are used to provide back-up power when renewable sources alone can not generate enough electricity to meet demand. The ability for solar and wind facilities to provide consistent power like conventional coal or nuclear power plants is critical to the widespread success of renewables.

The key to obtaining it is storage, but this is easier said than done. Many companies are working on such solutions, but one is already implementing its technology into a project that will be operational as soon as next year.

Renewable Resources Welcome In Nevada
Nevada’s great solar resource and renewable portfolio standard has attracted solar development in the state, including interest from Santa Monica, Calif.-based developer SolarReserve.

The local utility NV Energy took interest in the company’s project proposal, particularly because SolarReserve’s core concentrated solar power (CSP) technology has integrated energy storage, which provides the utility with reliable power when needed and solves the utility’s concerns with intermittency from its renewable generators.

Storage: The Holy Grail For Renewables
SolarReserve uses molten-salt technology first developed by Pratt & Whitney Rocketdyne, rocket science engineers for NASA. SolarReserve now holds the exclusive worldwide license to commercialize this technology.

Basically, heliostats focus the sun’s energy to the receiver, which sits atop a central tower. Liquid molten salt is pumped from the “cold” tank at 500 degrees Fahrenheit, up the tower to the receiver, where it collects the sun’s thermal energy. The molten salt is heated to 1,050 degrees Fahrenheit and pumped down the tower, where it is stored in the “hot” tank.

When needed, the thermal energy is released into a heat exchanger to create steam and power a standard steam turbine to generate electricity. In this way, the plant can operate just like a conventional power plant, providing 100% output at any given time — even when it’s not possible for other renewable energy generators to operate, such as in periods of cloud cover or at night. SolarReserve’s CEO Kevin Smith says this is the Holy Grail for the renewable industry.

“Let’s say the sun shines from 6 a.m. to 5 p.m.,” Smith says. “The utility’s peak requirements are really noon to 10 p.m. or 11 p.m. — so they want us to run firm baseload during those periods to solve their peak power requirements. We can actually run 24 hours a day if the utility wants us to, and that’s unusual in the renewable energy sector.”

The technology also uses hybrid cooling that keeps water use at a strict minimum, which is especially important in a desert ecosystem like Nevada. SolarReserve is using it to build the 110-MW Crescent Dunes project near Tonopah.

Crescent Dunes Challenges
Though the new technology was intriguing, it took time to convince lenders to finance the project. SolarReserve applied to the U.S. Department of Energy (DOE) Loan Guarantee Program, so the DOE had third parties perform due diligence on the technology, SolarReserve as a developer, NV Energy as a utility and more.

SolarReserve’s Senior Vice President of Development Tom Georgis says ACS Cobra, the project’s engineering, procurement and construction (EPC) firm out of Spain, reassured lenders with its willingness to guarantee the facility’s performance.

“That obviously makes any lender feel comfortable,” Georgis says. “They just want to make sure they get paid with interest.”

Critical components of the technology came from Pratt & Whitney Rocketdyne, which was at the time a part of United Technologies Corporation (UTC). UTC is a Fortune 30 company that built a pilot solar-tower plant with storage for the DOE to demonstrate its technology. This also reassured the DOE, which approved a $737 million loan. SolarReserve was relieved to be able to take advantage of the DOE’s program and also the 1603 Treasury Grant Program, which has since expired.

“There was urgency around the financing because of the uncertainty and imposed deadlines on the DOE loan program and the treasury grant,” Georgis says. “We were always in danger of funding getting cut or appropriations not coming through.”

The loan, along with $260 million of private equity from SolarReserve, ACS Cobra and Banco Santander (a global bank out of Spain), was enough to finance the $997 million project.

Prior to even financing the project, challenges arose in the early stages of development, specifically through the siting and permitting phase. With much of area being federal land or military testing ranges, it was a process to find a location acceptable to all parties.

“We were fortunate not to have environmental or cultural issues for the site,” Smith says. “But we spent a fair amount of time working closely with Nellis Air Force Base and the Bureau of Land Management.”

The Air Force was concerned the 650-foot-tall tower would obstruct flying zones, and that the plant would interfere with its radar. So Georgis says even though the project would encompass only 1,500 acres, he and his team studied more than 20,000 acres to find a site satisfactory to all parties.

To make the site assessment even more challenging, some of the military’s issues were classified.

“It was difficult because we didn’t know exactly what some of the issues were,” Georgis says. “We brought on a consultant to work with the Air Force’s scientific advisory board. The consultant had clearances to communicate the issues and advise us without disclosing anything. It was challenging dealing with an unknown.”

After adjusting the site a few times, finally a location was found that suited everyone. But Georgis wasn’t frustrated by the process. In fact, he viewed it as a great learning experience.

“No one had really built this kind of project on federal land — it was the first of its kind,” Georgis says. “But [Secretary of the Interior] Ken Salazar recognized the importance of this project for Nevada, which expedited the process. Overall, it went pretty smoothly.”

Currently Under Construction
The project began construction in September 2011.

“As far as solar projects in remote locations, it’s one of the easiest interconnects I’ve seen over the past five years,” Georgis says.

It should be generating consistent solar energy by December 2013. During a 25-year power purchase agreement, 100% of the electricity generated will be sold to NV Energy and used to power 75,000 homes during peak periods. It will generate 500,000 MWh annually, which is twice the amount of a similarly sized photovoltaic project.

The local residents of Nye County couldn’t be more thrilled by the economic development and job creation brought on by the Crescent Dunes solar project. During construction, the project will create 600 direct jobs on site, and over 4,300 direct, indirect and induced jobs across the supply chain, with a significant goal of hiring locally first. Once completed, the plant will employ about 50 full-time workers and generate tax revenue for the region. Georgis says he is grateful for the community’s support.

“The community and elected officials have been fantastic throughout,” he says. “Anytime there was an issue or challenge they could weigh in on, they’ve been more than happy to do so.”

The Beginning Of A Beautiful Thing
Though the Crescent Dunes Project isn’t yet finished, SolarReserve is already looking forward to taking its technology to other markets. Smith says it has contracted the 150-MW Southern California Rice Solar Energy Project with Pacific Gas & Electric, has late stage developments in other states across the United States and is also active in areas like South Africa, Peru and China.

“We’re also seeing tremendous interest internationally,” Smith says. “Utilities and governments want a consistent supply of power from renewable sources. The basis of renewable energy with storage that can provide consistent supply is really key.”

Georgis is also looking forward to the spread of SolarReserve’s molten-salt technology and cautions not to be deterred by the price.

“It certainly is more expensive than PV and wind,” he says. “But we don’t require natural gas-peaking facilities to come online when the sun goes down, or what will be costly transmission system upgrade requirements to support all the PV and wind that’s coming online. All of these costs need to be factored in. This is kind of the best of both worlds — a renewable-energy resource that operates like a conventional power plant. The key issue for solar thermal and other technologies is scale. We need to have more projects financed, into construction and operating. We need to exercise the supply chain, and that’s how we’re going to reduce our costs.” SPW

Listen to Tom Georgis speak on financing solar thermal projects Financing Solar Thermal

The technology used in the Crescent Dunes project comes from NASA. Find out more by listening to Crescent Dune’s NASA Technology

Learn more about SolarReseve in our Solar Speaks Podcast: A Discussion with Kevin Smith, CEO of SolarReserve