In October 2019, a Reuters article questioned whether Chile’s Cerro Dominador solar tower and facility served as a “cautionary tale for bold renewable energy vows”. The $1.3bn project – a combined photovoltaic (PV) and concentrated solar power (CSP) facility situated in the Atacama Desert – has been beset with financial difficulty since it was first mooted in 2013. As a result, construction has been painfully slow, with the 100 MW PV component only becoming operational in early 2018.
Those delays have been compounded by technological developments and a more competitive market. Since 2013 the cost of solar panels has fallen drastically, largely thanks to Chinese made products, leading a Corporación de Fomento de la Producción (Corfo) representative to tell Reuters: “Today it makes no economic sense to generate with CSP during the day, because that’s what photovoltaics are for and they are much cheaper.” Corfo is a government-owned development bank supporting the project.
Israel is contending with a similar issue. Situated in the Negev Desert, Ashalim power station comprises three sites each using different solar technologies, with a fourth planned. It includes a $1.13bn CSP tower and plant. Since contracts were awarded in 2008, the costs of producing electricity through CSP and PV have changed dramatically. PV production has become much less costly, whilst thermal solar power such as CSP has risen sharply, making it unsuitable for large scale power leaving Israel with a costly burden for years to come.
Despite the experience of Israel and Chile, utility-scale solar projects do have a future and are economically viable says Institute for Energy Economics and Financial Analysis Dennis Wamsted: “In my opinion, large scale solar power is completely viable in almost any country today.”
An analyst with more than 30 years in the field, Wamstead says both the US and Australia have their own examples of Cerro Dominador, but these are the result of the technologies used, not an indication that solar power is financially unfeasible.
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By GlobalData“They (CSP) have some issues and it may be that’s not the solar answer going forward,” he says, “but solar, in the broader sense, is certainly an economic alternative for electricity generation today.” In fact, contrary to what some might say, he believes the financing of such large scale projects is no different than any other significant power infrastructure project today.
Solar power will be a mix of large and small
He accepts, however, large scale projects face significant challenges of a different kind. By their very nature they are often a considerable distance from populated areas – such as in deserts. These types of locations allow for the construction of huge facilities utilising the uninterrupted power of the sun. Transporting the electricity generated is less straightforward. “In some ways that’s the ‘catch 22’; you have the resource but there’s no way to get it to market, particularly in developing countries.”
Wamsted likens the solar scenario to that of wind farms in the US. “When you have a really large project, you may have the space and the natural resource but you also then have to have the transmission to get the resource into the cities and towns.” States in the Midwest, where the wind is in abundance, are ideal for farms but demand for what they produce is often many miles away. “You have to, even in a country like the US, build additional transmission lines to move that power. That is definitely an issue.”
It’s a challenge for many African nations where access to grid power is limited. Utilising renewable energies such as solar, the African Development Bank (AfDB) has embarked on an initiative it hopes will change that. Called ‘Desert to Power’, the programme aims to bring electricity to Senegal, Nigeria, Mauritania, Mali, Burkina Faso, Niger, Chad, Sudan, Ethiopia, Djibouti and Eritrea, collectively the Sahel region.
Smaller scale will succeed without relying on mass infrastructure
By 2025 it’s hoped PV solar power will produce 10 GW, supporting the businesses and communities of at least 60 million people. Jointly financed by AfDB and the European Union, projects include establishing critical cross-border network connections as well as developing off-grid solar energy, cutting the need for large scale transmission. Off-grid is an area Wamsted believes is already showing huge potential: “In a lot of countries it isn’t necessarily going to be large scale renewable solar or wind, it’s going to be smaller scale stuff that is actually going to get in first because it doesn’t need the huge bump up in infrastructure.”
According to him, there is already a growing number of companies developing smaller facilities, especially in Africa, not connected to the grid. “They’re bringing solar to these areas, allowing people to have lights and power through these smaller facilities which are quicker and cheaper to build.”
So called rooftop PV panels are also bringing substantial benefits, he adds, likening advances to those in telecommunications over the last few decades. He says before mobile communication capabilities were what they are today, very few people in large parts of Africa had access to a phone. Now they do, without the need to build the telephone line infrastructure which exists across Europe and the US, for example. “They skipped over that whole bit of infrastructure and there’s a possibility that could happen with small scale renewables.”
Solar power has a sunny future
It’s clear that solar has an important role to play in powering the world of tomorrow. Reduced raw material costs, a better understanding of how to utilise PV and the increased appetite for sustainable energy are all driving this. However, challenges remain, most notably storage. It is here CSP showed most promise, allowing power to be generated when the sun is shining, whilst using the power they have stored for when it isn’t.
There is good news though, Wamsted says; battery technologies are advancing, prices are falling rapidly and market players are increasingly willing to invest. “In a lot of ways, the battery storage industry is in the same place the solar industry was a few years ago. Around 15 years ago nobody thought about it, 10 years ago people started to, and over the last 10 years solar has become this economic choice. Battery storage is going through the same development right now in my opinion,” he says.
Is the Chilean scenario a “cautionary tale”? Likely not, rather it serves to underline the potential pitfalls of a rapidly advancing sector when combined with a project hindered by delay. It also emphasizes that, when embarking on ambitious projects, a strong understanding of the sector and a dash of foresight, mixed with a bit of good luck are the ultimate ingredients for success.
“Solar power is already an economic alternative. I think we’re almost past that point where we need to be talking about what’s needed now to make it a viable option,” Wamsted concludes.
