Out of the shadows

Melbourne Australia, 16 August 2008 - AS it gears up to build Australia's first large-scale solar thermal power plant, WorleyParsons has bypassed a pioneer of the technology. Olga Galacho reports.
Years ago, Australia's own pioneer of solar thermal utilities, David Mills, could not attract local finance on his terms for the renewable energy power stations he wanted to build.So he upped stumps and established his company Ausra in California, where it has been embraced by venture capitalists and signed on to produce electricity for at least one US utility.

Since the Federal Government flagged it would introduce a mandatory renewable energy target, Ausra has returned to sniff out business opportunities Down Under.

But in an ironic twist, the first large-scale solar thermal power plant that is likely to be built here will not be one designed by Prof Mills.

His vision for affordable electricity from solar energy will initially remain in the shadow of another similar but established technology to be imported by WorleyParsons some time in 2011.

The engineering giant which initiates all manner of energy infrastructure all over the world has been studying the prospects for solar electricity in a number of states and expects to make a decision before the end of the year.

A consortium of fossil-fuel-based companies including BHP-Billiton, Rio Tinto, Fortescue Metals, Woodside Petroleum and Wesfarmers, have joined WorleyParsons in the feasibility study, but they are unlikely to partner up in a venture to build the infrastructure, according to WorleyParsons renewable energy expert Peter Meurs.

WorleyParsons said this week it planned to build up to 34 plants by 2020 using parabolic troughs like the ones in solar power stations already operated by a variety of companies in Spain, Germany, the Middle East and the US.

Sunshine hitting the concave mirrored surface of a parabolic trough is reflected onto a pipe, heating the fluid within. This is pumped along and converted into steam to drive a turbine which produces electricity.

Ausra's power stations will be based on fresnel technology and a more basic design that will yield significant cost savings.

Mr Meurs said WorleyParsons was excited by Ausra's technology and would consider it once the expatriate company has its US plant up and running successfully.

"We are taking a very conservative view of which technology we will use for the first plant, but we are open to using fresnel or solar towers or even photovoltaics for subsequent ones as soon as those are well proven, like parabolic troughs are,'' he said.

The company is also keeping an eye on emerging technologies that will reduce solar energy costs even further and could bring them into line with power from coal, such as replacing expensive glass mirrors with specially coated pressed steel.

About 10 existing parabolic trough plants have already been built by WorleyParsons around the world, and another 10 are on its drawing boards.

The first plant scheduled for Australia is likely to be located in the Pilbara and with a capacity of 250 megawatts will be one of the largest in the world.

Deserts are the best locations for solar stations and Australia is acknowledged to have the best solar resource of any country.

Mr Meurs told BusinessDaily the estimated cost of $1 billion per plant was a rubbery figure that he hoped economies of scale would reduce by at least 20 per cent once the roll-out got under way seriously.

The proposed power stations will match peak load outputs rather than be true base load generators, although an innovative molten salt storage facility could allow them to continue making electricity after sunset.

While parabolic troughs have been around for decades, Climate Positive solar energy expert Matthew Wright says Ausra's fresnel model has superior economic advantages.

"Shareholders of WorleyParsons and the other listed companies in the team ought to be asking why Ausra's product, which is likely to be 25 per cent cheaper than parabolic trough plants, has been overlooked again.

The company argues that in a bid to improve their chances of attracting capital for such a novel project, it has chosen to pay a premium for a model its bankers will perceive as less risky because its already viable.

Mr Wright dismisses the argument saying that a high level of risk is attached to most activities these same miners undertake.

"A solar power plant isn't going to blow up in an explosion in the way some mining assets do,'' he said.

A more serious risk to earnings the likes of BHP Billiton and Woodside Petroleum should be worrying about is their carbon exposure once emission trading begins, he said.

OTHER critics of WorleyParsons' choice of technology note that extending finance for carbon-friendly infrastructure hardly compares to the sloppy lending and borrowing some of these same bankers can be prone to in a sub-prime moment.

"There are always going to be knockers and detractors who say there are better technologies available than the one we have chosen,'' Mr Meurs said.

"I say, get them going, get them to a stage where they are proven in the field. That would be wonderful and something we would be interested in looking at.''

While Ausra has yet to fire up a large utility scale power station, its demonstration plants indicate that its model has many structural features that give it an operating edge over their competitors.

The flatter structure of a fresnel solar energy collector barely casts a shadow compared to the troughs with their high sides.

It means that Ausra's solar farms do not require as much land because the collectors can be placed closer together than troughs which need to be widely spaced in order that they don't block each other's sunlight out.

Mr Wright has also calculated that an Ausra plant equivalent in capacity to the one planned by WorleyParsons would require 3.6 square kilometres of land, compared to the latter's requirement of 6 square kilometres.

"Extrapolating from the power station Ausra is about to start building, it would cost about $250 million less to build a fresnel solar park the same size as WorleyParsons is planning,'' he said.

That is a considerable saving that shareholders should ask the company's bean counters to "please explain''.

And with the economies of scale that will flow from the plan to build more than 30 solar thermal plants around the nation, the savings could feasibly compound to many billions of dollars.

Original Source: Olga Galacho, Herald Sun