Biggest Solar Farm in Latin America to Replace Dirty Coal Plant

Originally published on ThinkProgress by Guest Contributor Ari Phillips

Photo Credit: austinhk / Foter.com / CC BY-NC-ND

Photo Credit: austinhk / Foter.com / CC BY-NC-ND

Last week President Obama and Canadian Prime Minister Stephen Harper visited Mexico for what’s traditionally called the “Three Amigos” meeting. In the daylong rendezvous, energy issues were slated to play a major role, with Obama and Harper jockeying for room when it comes to the impending decision on the controversial Keystone XL pipeline that would bring dirty crude oil down from Canada to refineries on the Gulf Coast.

However, Mexico also has some major energy changes in the pipeline, and after decades of state-run oil company PEMEX having sole purview over fossil fuel extraction, international investment and companies will now be let into the mix after recent constitutional reforms. This will increase oil flows from America’s southern neighbor into those same Gulf refineries as Keystone XL might. At the same time renewable energy has started to take off in Mexico, with construction of the biggest solar power plant in Latin America, Aura Solar I — a 30-megawatt solar farm in La Paz, Mexico — the latest signal.

If Mexican President Enrique Peña Nieto’s recent summit with North American leaders is an indication of the significance of the trio’s relationship, then his expected upcoming visit to the Aura I solar farm can be seen as a benchmark on the country’s path to a more renewable future. Mexico is poised to be Latin America’s solar hotbed according to Greentech Media, with the solar market’s installed base expected to quadruple from 60 megawatts to 240 megawatts by the end of this year. Mexico’s energy ministry has set a target for 35 percent of power generation to come from non-fossil fuel sources by 2024.

The current reform provides a real opportunity, particularly in the electricity reform, to increase investment in renewable energy generation in Mexico by opening up the sector and making other institutional changes, Christina McCain, Senior Manager for the Latin American Climate Initiative at the Environmental Defense Fund, told ClimateProgress in an email.

Some in Mexico have criticized that the energy reform is missing an opportunity to provide more direct incentives to renewable energy.

While the focus of the reform seems to have largely been on the major overhauls we hear most about, there is still opportunity to provide more direct incentives to renewables, as well as leverage existing laws designed to increase renewable sources in Mexico’s energy mix.

In La Paz, where pollution from a dirty thermoelectric plant creates noxious air impacting resident’s lifestyles and well-being, the solar plant is a welcomed clean development.

The $100 million project, which includes 132,000 solar panel-modules, is the first Mexican private enterprise of such a size to get a development bank loan and an agreement to sell its electricity to the grid.

According to the Thomson Reuters Foundation, the International Finance Corporation, a member of the World Bank, gave the project a $25 million credit line and also helped set up another $50 million in loans from the Mexican development bank Nacional Financiera (Nafin).

The idea is to see how this type of merchant-risk deal can be replicated down the road, not only in Mexico and Latin America, but around the world, Hector Olea, president and CEO of Gauss Energía, the construction contractor for the project, told the Thomson Reuters Foundation.

Merchant power plants are those that are financed by investors and sell power into competitive wholesale markets, as opposed to rate-based power plants that pay for themselves via long-term utility bills or Purchase Power Agreements (PPAs) in which a contract locks in certain fees over a period of time.

Merchant solar markets, where the price of electricity is indexed to spot energy markets in some fashion, are in an especially good position in Latin American.

According to Greentech Media, two numbers explain why the Aura Solar I project in Mexico is going ahead as a merchant solar project.

First, 7.5 kWh/m2/day is how much insolation that Baja California Sur receives.

This is about three times the average levels in Germany and 50 percent higher than southern California.

Higher insolation levels translate to higher output for the power plant — in this case, a capacity factor of about 31 percent.

Second, $230/MWh is the average price of electricity in 2013 at the La Paz node in Baja California Sur, where the Aura I project is connecting. During peak hours in peak months, rates can be as high as $380/MWh.

Given the insolation levels, that puts the back-of-the-envelope gross revenue from the plant between $13 million to $14 million in year one.

In countries like Germany, Japan, China, and the U.S., substantial subsidies have boosted solar growth, but in Mexico, merchant solar offers an opportunity for these projects to excel with less use of government coffers.

Solar is easy to dispatch, or to non-dispatch, because it has no fuel costs. Peak hours of sun coincide with peak hours of electricity use, aligning it well with the spot market. And the risk of rising fossil fuel prices due to demand or regulation means that solar is likely to get more economically appealing as time goes on.

Electricity in Mexico costs 25 percent more than the U.S. average, and annual electricity demand is expected to increase four percent over the next 15 years.

There has to be people willing to finance solar projects that don’t have a guaranteed price for electricity, said Adam James, author of Greentech Media Research’s Latin America PV Playbook, about the potential for merchant solar growth in Latin America.

It’s taken a while for people in the finance community to be willing to invest in projects.

Mexico’s constitutional changes will usher in major reforms in the electricity sector by creating a wholesale power market allowing private companies to compete with the state-owned utility. James says the impact this will have on renewable is still unclear.

A lot of the reform will boil down to implementation, he said.

If retail rates are no longer subsidized, then solar might become even more competitive because a larger part of the customer base will have to pay higher rates for electricity.

The competitive wholesale market will at least open up for opportunity for solar developers to enter the electricity market.

In April 2012, Mexico’s former president Felipe Calderon passed the General Law on Climate Change, which calls for a 30 percent reduction of greenhouse gas emissions by 2020 and a 50 percent reduction by 2050.

McCain sees both challenges and promise in Mexico’s efforts to balance the economic potential of its fossil fuel reserves with its climate goals and established leadership in the area, having also hosted the 2010 COP 16 United Nations climate change conference in Cancun, Mexico.

As the world aspires to transition toward low-carbon economies that are no longer dependent on the fossil fuel reserves so keenly eyed in Mexico, there is significantly under-appreciated opportunity, McCain said.

Mexico can reduce the environmental impact of old, dirty sources of energy, while taking the long view and building a sustainable future economy.

This article, The Biggest Solar Farm In Latin America Will Replace An Old Coal Plant, is syndicated from Clean Technica and is posted here with permission.

Canada’s Largest Solar PV Power Plant To Be Powered By ABB

by Zachary Shahan

ABB_LasVegasSolar
Canada to install another 100MW Solar PV Power Plant in the province of Ontario. Image Credit: ABB

Canada is going to get a new 100MW solar power plant. The Grand Renewable Energy Park will be in Ontario, which is Canada’s most populous province and home to the city of Toronto (which is getting a lot of attention for other reasons right now). This Ontario solar PV power plant will add to existing PV capacity in the province, notably, the Sarnia Photovoltaic Power Plant which is a 97MW solar installation and at the time of its completion (Sept 2010) was the largest solar PV power plant in the world.

ABB will be supplying Canadian Solar Solutions — the engineering, procurement and construction (EPC) contractor for the plant — with about $80 million of balance of system (BOS) technologies “comprising a broad range of power and automation products, including ABB’s flagship automation platform for conventional power generation and renewable applications, Symphony™ Plus.” In addition, ABB will be in charge of engineering, electrical installation, commissioning, and performance testing of the plant.

This is a big project — one of the biggest solar power plants in the world. However, interestingly, this power plant is part of a much, much, bigger renewable energy project. It’s part of a behemoth $5 billion investment by Samsung Renewable Energy in solar and wind energy projects with a total power capacity of 1,369 MW (1.369 GW)!

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This article, Canada’s Largest Solar PV Power Plant To Be Powered By ABB, is syndicated from Clean Technica and is posted here with permission.

About the Author

Zachary Shahan is the director of CleanTechnica, the most popular cleantech-focused website in the world, and Planetsave, a world-leading green and science news site. He has been covering green news of various sorts since 2008, and he has been especially focused on solar energy, electric vehicles, and wind energy for the past four years or so. Aside from his work on CleanTechnica and Planetsave, he’s the Network Manager for their parent organization – Important Media – and he’s the Owner/Founder of Solar Love, EV Obsession, and Bikocity. To connect with Zach on some of your favorite social networks, go to ZacharyShahan.com and click on the relevant buttons.

Air Force Pilots New Solar Power Storage System

by Tina Casey

AESM Hawaii -- US Air Force
Proposed AESM rooftop photovoltaic solar system courtesy of US Air Force.

In yet another demonstration of the US military’s transition to renewable energy, the Air Force Research Laboratory is eyeballing a computer center in Hawaii to demonstrate an advanced system for collecting, storing and using solar power. The aim is to show that solar power can contribute to a seamless energy management system for a sensitive, high-demand facility. If the pilot project is successful, it could be implemented at other Department of Defense facilities worldwide and make its way into the civilian sector as well.

The Air Force Advanced Energy Storage and Management System

The brains behind the new Advanced Energy Storage and Management System (AESM) is the Air Force Research Laboratory’s Advanced Power Technology Office. If that name rings a bell, the office is also the driver behind another forward-looking renewable energy project we covered earlier this month, which involves using on site wind turbines to avoid rough-weather fuel drops at a remote monitoring station in Alaska.

The proposed AESM will be installed at the Air Force’s Maui High Performance Computing Center, which is managed by the University of Hawaii (note: as of September 2013, UH was still the manager and has been disputing recent assignment of the contract to an out-of-state company).

Based on a rendering of the project, it appears that AESM will include roof mounted solar panels over part of the facility’s parking lot, forming a solar carport. The system is also capable of integrating wind power as well as grid-supplied power and power from on site generators.

In addition to their use in solar power generation, solar carports provide a sustainability twofer by helping to reduce wear and tear on vehicles that would otherwise be parked in the open, and by helping to reduce the amount of fuel used to cool the interior.

The project is currently in the technology selection phase. Once everything is installed and the go button is pushed, the demonstration period is expected to last up to two years.

More Renewable Energy For Hawaii

Of all the 50 states, Hawaii is the most vulnerable when it comes to fossil fuel dependency and it is also the site of key Department of Defense facilities, notably Pearl Harbor, so the state’s transition to locally harvested fuels is a vital national defense issue as well as a boost for consumers and businesses beset by high fossil fuel costs. In that context it’s little wonder that Hawaii was chosen as the shakedown site for the new AESM system.

AESM also dovetails with another solar project the computer center is pursuing, the Maui Solar Initiative. This will consist of a proposed 1.5-megawatt, 13-acre solar farm located nearby. Aside from reducing fossil fuel dependency in Hawaii, the project is expected to save big bucks for the Air Force, which according to hpcwire.com currently foots the center’s annual electricity bill of more than $3 million.

As for the Department of Defense, AESM is just one among a flood of military-backed renewable and advanced energy projects in Hawaii. The Navy alone just pumped $30 million into a statewide clean tech initiative called the Energy Excelerator.

Among the military’s many other projects on Hawaii are a grid-connected wave power demonstration, a fuel cell vehicle fleet initiative in partnership with GM, and even a full scale rainwater harvesting system to help address Hawaii’s shrinking prospects for rainfall in the future.

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This article, Air Force Pilots New Solar Power Storage System, is syndicated from Clean Technica and is posted here with permission.

About the Author

Tina Casey Tina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. You can also follow her on Twitter @TinaMCasey and Google+.

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Thin-Film Solar Power To Be Sold For Less Than Coal Power

by Nicholas Brown

Macho Springs Solar Park in New Mexico
First Solar installs of some of its CdTe panels atMacho Springs Solar Park in New Mexico. Photo Credit: boutmuet via Flickr

Update: Some sentences and links have been added to this post to provide better context and comparison.

Update #2: I’ve published two articles on energy subsidies in response to comments on this post regarding that matter. They are: “Energy Subsidies — Clean Energy Subsidies vs. Fossil Subsidies” and “Oil Subsidies & Natural Gas Subsidies — Subsidies For The Big Boys.”

According to a Power Purchase Agreement (PPA) between El Paso Electric Company and First Solar, electricity will be sold from First Solar’s thin-film solar panels to El Paso Electric Company for 5.8 cents per kWh (a good 4-8 cents cheaper than new coal, which is in the 10-14 cents per kWh range).

The name of the power plant is Macho Springs Solar Park. It is located in New Mexico, and it has an electricity generation capacity of 50 MW.

An interesting thing about this is that the average residential retail cost of electricity in the United States is 11.4 cents per kWh, which is twice as much as the price at which this power plant will be producing electricity. Also, the typical price of thin-film solar power is 16.3 cents per kWh, which is 2.8 times more.

Clearly, even compared to the wholesale price of electricity from the cheapest energy options, this is quite competitive.

First Solar may have a very bright future. CleanTechnica director Zachary Shahan recently had the opportunity to interview the CTO of the company while attending the World Future Energy Summit, International Renewable Energy Conference, and other Abu Dhabi Sustainability Week events. He has a post coming soon on the potential for thin-film solar to take the lead again in the solar panel market, as well as more on First Solar’s development plans. Stay tuned.

If you’re inclined to bring up subsidies, it should be noted that a Harvard Medical School study found that coal costs us an additional 9-27 cents per kWh in health costs. In a perfect world (economically), that would be added onto the LCOE of coal mentioned at the top (the 10-14 cents per kWh figure). That would bring the LCOE to 19-41 cents per kWh. Additionally, coal has received subsidies for about a century that dwarf anything solar has received.

As far as the plant above, the power purchase agreement should be signed by June.

Follow me on Twitter: @Kompulsa

Source: PV Magazine

This is part of an experimental “Sunday quickies” series in which we quickly cover stories we didn’t have time for during the previous week.

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This article, Thin-Film Solar Power To Be Sold For Less Than Coal Power, is syndicated from Clean Technica and is posted here with permission.

About the Author

Nicholas Brown has a keen interest in physics-intensive topics such as electricity generation, refrigeration and air conditioning technology, energy storage, geography, and much more. My website is: Kompulsa.