Massive Solar PV Deal
Sorry for the lack of postings/comments in the past few days. I have been traveling, and just arrived back in the U.S. I have lots of things to catch up on (family time, among the most important) and I have to prepare my presentations for the ASPO conference (I will be presenting on “Biofuels” and on “Tracking Public Data” such as EIA and IEA numbers). I also have a staff meeting the first week of September. My posting frequency in the next 30 days or so is likely to drop down to 1 or 2 a week, and then should go back to normal following ASPO which begins September 21st.
In the meantime, there was a major energy story yesterday that is worth noting, and it generated some numbers for crunching. Pacific Gas & Electric in California has signed an 800 megawatt solar deal with OptiSolar and SunPower. CNET has some of the details:
SAN FRANCISCO–Pacific Gas & Electric has inked deals with OptiSolar and SunPower to establish 800 megawatts of solar farms in California, which could become the world’s largest set of grid-tied photovoltaic installations.
The new plants would provide 1.65 billion kilowatt hours each year, enough to serve nearly 250,000 homes, according to Jack Keenan, CEO and senior vice president of PG&E.
“This commitment not only moves us forward in meeting our renewable goal, it’s also a significant step forward in the renewable energy sector,” he said. “Utility-scale deployment of PV (photovoltaic) technology may well become cost competitive with other forms of renewable energy generation, such as solar thermal and wind.”
The supply breaks down as follows:
OptiSolar’s 550 megawatts are set to come online fully in 2013, and SunPower’s 250 megawatts should be running by 2012, both in central San Luis Obispo County. Unlike these photovoltaic projects, most large-scale solar farms feature solar thermal systems.
I found a story in the Milwaukee Business Journal that mentioned some of the area requirements:
The 550-megawatt Topaz Solar Farm to be built by OptiSolar, a venture-backed firm based in Hayward, will utilize OptiSolar’s relatively low-cost thin-film photovoltaic panels manufactured in Hayward and Sacramento. The project, which will cover about 9 square miles with solar panels, will be the largest solar PV project in the world, and is reported to cost $1 billion. It is expected to begin power delivery in 2011 and be fully operational in 2013.
How does that area requirement compare with the area I came up with in A Solar Thought Experiment for providing electricity for the entire U.S.? 550 megawatts over 9 square miles is equivalent to 62 megawatts per square mile. My calculations were that it would take 2531 square miles (a square of about 50 miles by 50 miles) to provide 882,125 megawatts (349 megawatts per square mile). If we scale that down to 9 square miles, we would come up with (882,125 megawatts/2531 square miles) * 9 square miles = 3,100 megawatts (versus their reported 550 megawatts). I would then suspect that they are taking the infrastructure, etc. into account, as my calculation was purely surface area of the panels.
However, I did a second calculation in Running the U.S. on Solar Power in which I did consider the total land requirements of a solar thermal plant. Apples and oranges, I know, but I want to know how they stack up against each other. For the Optisolar plant, we find 550 megawatts on 9 square miles. A square mile contains 640 acres, thus we have 0.89 megawatts per acre. In my previous calculation on solar thermal, I found (based on an actual plant capacity and land requirements) that they expected to get 0.147 megawatts per acre.
That suggests one of three things to me. First, it could mean that the supporting infrastructure for a solar thermal plant has a much greater requirement than a solar PV plant. Second, it could mean that I am looking at just PV surface area versus total infrastructure requirements for solar thermal, but that doesn’t seem to mesh with my prior calculation (unless they are usually very low efficiency panels in the PG&E projects). Or, it could be that since I am only looking at peak output, I am not actually getting a total picture since solar thermal has the potential for energy storage, and thus generating power far past peak output. In other words, solar PV has a pretty sharp peak, and solar PV has a much broader peak for the generation of electricity. There is a 4th option – that I have an error somewhere. But I know if I throw this out there, someone will sniff it out.
Maybe some of our knowledgeable solar experts can weigh in?
Finally, the inevitable question always seems to be whether you can invest in the companies involved. According to this article, Optisolar has been raising capital through private investors. SunPower, however, trades on the NASDAQ as SPWR. The PE is currently at 142, so if you are risk averse you are probably going to pass. The other company mentioned in the article, Pacific Gas and Electric, trades on the NYSE as PCG and a more conservative PE of 14.8.