Suntrough is a solar thermal plant builder and developer that believes smaller might be better.
Contrast that with BrightSource Energy, the VC-funded concentrating solar power (CSP) firm that just registered for an IPO. BrightSource is doing things on an enormous scale -- hundreds and thousands of megawatts, billions of dollars, tens of thousands of acres and mirrors -- and dealing with big political and environmental forces that are both supporting and opposing the development effort.
Suntrough Energy is taking a different route.
The CEO of Suntrough, Asif Ansari, knows a bit about solar and solar thermal. Ansari was founder and former CEO of eSolar -- one of the players in solar thermal energy. According to Ansari, "Solar thermal is not about technology; it's about financial execution.
Suntrough is providing turnkey power plants based on trough technology at a relatively small five- to ten-megawatt scale. The plants are meant to be deployed as a hybrid, working in tandem with a biomass plant and producing baseload power with initial applications in India, Africa, and the Middle East.
As Greentech Media's solar researchers have reported, CSP is coming in at a high price -- higher than PV.
According to the CEO, "The story is levelized cost of electricity (LCOE), not just price per watt." One of the cost drivers, said Ansari, is the amount of high-priced labor required to install CSP. The Suntrough CSP design is containerized, the bulk of the power plant is assembled in a factory and delivered in cargo-containers to the site, while the solar field itself is assembled by low-cost local labor. Ansari says that the customer cost for a 10 megawatt CSP plant in India is under $3.00 per watt with this approach. Ansari cited the cheapest PV installations as coming in around $3.50 per watt. Brett Prior, Senior Solar Analyst at GTM Research calculates the Brightsource power tower in the $5.00 to $6.00 per watt range. (EIRs for tortoises and Bechtel as EPC don't come cheap.) The EPC is the real expensive part of the program and Suntrough's method looks to reduce that cost.
Another price factor is the "one-off" nature of larger CSP projects. Every plant is custom-designed and unique. By “standardizing” the power plant design much of the non-recurring engineering design costs are eliminated. Additionally, building an assembly line of identical packaged power plants assembled into containers can replace expensive field labor with lower cost factory labor. It also reduces the field installation time and shortens project delivery times. Standardization of major equipment specifications like the turbines, generators, pumps, and switchgear potentially allow Suntrough to leverage long term supply contracts and yield economies of scale benefits that can contribute to lowering installed capital cost.
Ansari sees savings in solar field costs as critical to achieving better solar economics. Up to half the cost of a CSP power plant is the solar field -- the most expensive portion of which is the parabolic trough steel frame material, fabrication and installation costs. Suntrough is focused on developing markets where the labor costs are lower and "those markets want smaller systems." The total installed costs of parabolic trough solar fields can be as high as $275 to $350 per square meter, but costs can be brought down through local fabrication.
"The key problem we're trying to address is the ability to deliver an economical, renewable and sustainable solution for baseload power in the developing world. There is a growing gap between power generation and demand in these countries. Many of these countries lack conventional fossil fuels for power generation and transmission grids for power distribution, and often both. They also lack the ability to finance mega-power projects," said Ansari.
He continued,"A 10 megawatt CSP-biomass hybrid power plant can deliver a baseload power solution that is economical, sustainable and financeable. It can be used for grid-augmentation or for powering remote communities. Another advantage of CSP over PV in these markets is that grids cannot take too much PV, while CSP has a more gentle transient repsonse with spinning and thermal inertia."
"Developing nations don't have a lot of spinning reserve -- you can't put a lot of unstable generation [like PV] on those grids."
The best hybrid energy combination, according to the CEO, is CSP combined with biomass -- with solar as a hedge against biomass feedstock supply and price. This combination delivers baseload power with greater than 95 percent availability. The 20 percent to 25 percent availability of pure CSP or PV "won't fly" in developing countries that need to expand baseload power generation with a limited budget and limited fuel options -- that's why "hybrid biomass / CSP makes sense."
Suntrough has already signed on to five projects and is looking at closing deals in India, China, South Africa, Northern Africa, and the Mideast. One Mideast customer is looking for power, water desalination and process steam from the same 10 megawatt CSP hybrid plant.
Feed-in tariffs through India's National Solar Mission "at roughly $0.26 to $0.34 per kilowatt-hour are exciting" but to focus on these high tariffs alone "is kind of like cheating", because they are not sustainable. Ansari adds, "To build a business model on the availability of such incentives is irresponsible. High tariff incentives bring about a culture of complacency, which tends to curb both cost and technology innovation in the industry. Notably the Spanish feed-in-tariffs, although noble, probably did more damage to the CSP industry than good because as a result of these incentives prices in fact went up, rather than down."
Suntrough's initial funding comes from current management and angels. The firm is in the process of raising a round B of up to $20 million from outside investors.
Firms like Abengoa and Solar Reserve are on the big side of CSP while Sopogy is also working on small CSP. SkyFuel works on lower-cost mirrors.
Renewables have to compete with diesel and coal. CSP has to track the price of photovoltaics. Suntrough might have figured out how to get that done.