No concentrated solar thermal power bubble in Spain

The Spanish Association of Concentrating Solar Thermal Power Industry (Protermosolar) hopes that the new government continue to support solar development.

Protermosolar President, Valeriano Ruiz, regrets that the solar industry suffers "fierce criticism" from conventional energy producers when their activity contributes eleven times more than it receives in premiums and is "a good deal for the state."

During the presentation of a report from Deloitte on the concentrated solar thermal impact in the Spanish economy, the business association president said that solar power, "despite taking three or four years of operation, being asked what other not been asked for two hundred years."

"This is unacceptable. Let us breathe. We are getting fierce criticism in my view deeply rooted in selfishness, when we are a sector of hundred companies with strong technological development and internationalization. Are we going to fault it because those who are hoarding for fifty years the electrical system of our country feel attacked? "asked Ruiz.

Protermosolar Secretary General, Luis Crespo, said this contribution to GDP compared with that of mining and other sectors such as footwear. The weight of the solar thermal was equivalent in 2010 to 0.16% of national wealth, when two years ago accounted for just 0.07%.

Crespo explained that, regardless of the macroeconomic impact, the solar thermal sector receives a premium over the price of light which then compensates by producing cheaper electricity that the ‘pool’. "We got through the electric tolls, but generating cost savings," he said, before it is unfortunate that in this second area where there are suspicions that other industry players are "manipulating" the auction.

The country, he said, has a "unique historical opportunity" with the CSP can not miss, because there is "a global market of billions of euros" and the Spanish engineering and construction are currently the best placed in the international market.

In Spain, 2011-2020 Renewable Energy Plan figure at 4,800 megawatts (MW) of concentrated solar power installed at the end of the period, compared to about 1,000 MW today. Ruiz explained that the current legislation runs out in 2013 and that the sector should begin to negotiate next year the new rule to regulate the development projects from 2014. "We are in a time of impasse and we worry to know what will happen," he said.

Protermosolar President felt that the future government would be "very irresponsible" if it not allows the future development of this technology. "I feel good that the Government should control and that no bubbles," he added.

The study ‘macro-economic impact of solar thermoelectric sector in Spain’, conducted by Deloitte shows that the wealth created by solar thermal power plants, the income to Social Security and Treasury and the economic savings for CO2 and stopped issuing energy imports blossomed production premiums received.

Thus, if there was still any doubt, the ‘black legend’ powered by vested interests on the alleged negative effect of premiums for this renewable energy in the economy. In addition to the thermal premiums accounted for 3% of total premiums received by renewables in 2010, because the thermal energy has begun to receive premiums for generation nearly ten years later than other technologies such as wind energy, photovoltaic, biomass and small hydro.

While some are trying to confuse public opinion with half-truths about the impact of premiums to renewable electricity tariff deficit, without informing the time, as the price renewables reduces the pool, no doubt the CSP is the most efficient in terms of contribution to employment and the national economy in relation to the premiums received.

According to consulting firm Deloitte, "if put into the balance the positive impacts resulting from the activities of the sector, be it contribution to GDP of 1650 million euros, generating 23,844 jobs, contributions by way of Security contributions Social, 270 million euros, taxes on profits of companies, 66 million euros, income tax, 71 million euros, save in respect of allowances, 5 million euros, replacement of fossil fuel imports, 24 million euros, and positioning of Spanish companies in the international market can be seen that policies to support this technology through premiums for generation, which in 2010 accounted for 185 million euros, have been a bet-efficient economic and technological our country."

To these figures must be added the cost of unemployment means the state has been saved to pay the 23,844 persons who had not been without occupation of solar thermal power plants have been built and which would have amounted to 176 million euros only 2010, an amount equal to the total premiums received. In other words, for every euro in premiums to the CSP, the Government has saved another in unemployment benefits.

The total number of persons employed by the sector amounted to 23,844 in concentrating solar power in 2010, especially in economically depressed areas (Andalusia, Extremadura, Castilla-La Mancha) and a beneficial impact in areas hard hit by the crisis, such as construction, metal and industrial installations. Deloitte’s conclusion is that, if they meet the objectives set out in the National Renewable Energy Plan (PER), solar thermal sector employment maintained this level throughout the decade and would hold about 20,000 jobs a year in 2020. Also, keep the necessary support to achieve the objectives set penetration in the draft PER, the contribution to GDP would grow from 1650.4 million in 2010 to 3516.8 million in 2020.

Innovation opportunities of different thermoelectric solar energy technologies are very important, because even though it is an existing technology from the 80 it was not until 2006 when take-off has occurred, mainly in Spain and the United States. In this regard, Deloitte points out that it is essential to establish economic incentives to facilitate the R & D + i, to ensure the progress of technology and prevent future projects are a repetition of existing power plants. The research effort in solar sector represents 2.67% of its contribution to GDP, a figure twice the national average and even higher than the standard rates in countries like Germany and the United States.

According to the study, the development of this technology in the coming years will depend on the results they produce these advances, but also the economic signals they receive the promoters of these facilities, so it is "fundamental" that the next remuneration framework, defined for plants to be built starting in 2014, encourage the necessary investments to meet power objectives set out in the draft PER 2011-2020.

Deloitte noted that Spain is a leader in the installation of concentrating solar thermal power plants and has companies capable of supplying goods and services virtually the entire value chain. "This is particularly relevant underlines the consultant, taking into consideration the growth prospects of this technology worldwide in the short and medium term. In this sense, he adds, Spanish developers and builders are already playing an important role both as exporters of technology and through direct investment, this role could be lost if not continue the effort in ensuring our country’s competitive advantage which is being at the technological forefront. " There is already a direct international presence of Spanish companies in major markets, either by thermal power plants to be built either by having installed sales offices in USA, India, North Africa, Mexico, Chile, Italy, Middle East, South Africa and Australia, among others.

The cost of new plants to be designed today would be significantly lower than those registered in the Register of pre-allocation and the future is expected to drop even more pronounced as we advance on the learning curve and research on new types of plants, materials, equipment and processes. Spain, says Deloitte study, can play a major role in this regard, since it has infrastructure for R + D + i-edge and highly-qualified.

Solar thermal energy for their particular characteristics, has a number of advantages over other renewable technologies, the most important being the ability to manage the generation of demand according to the System Operator (Electrical) with its ability to storage and hybridization. This feature is essential to future scenarios of electricity generation CO2 emission free. Solar thermal power plants operational in late 2010 prevented the emission of 1.23617 million tons of greenhouse gases and help Spain meet its international commitments by the Kyoto Protocol.

For countries like Spain, with an 80% of energy dependence on external sources (Spain has no gas, no oil, and almost not uranium), this type of renewable energy plants avoided import of around 140 000 tons oil equivalent (toe) in 2010. The results for a “typical” 50-MW parabolic-trough plant with 7.5 hours storage capacity, the most widespread type in Spain, are as follows:

• A total GDP contribution during construction of 192.1 million € in 30 months (76.8 million €/year).

• A total GDP contribution during operation of 44.3 million €/year

• A total of 2214 equivalent jobs per year during contracting and construction, including contracting, construction and assembly, as well as manufacture of components and equipment, supply of services and indirect employment.

• A total of 47 employees during operation.In economic terms, the R&D&I effort for 2010 was 48.2 million €, which represents 2.9 % of the total contribution to the GDP.

In relative terms with respect to its contribution to the GDP, about double the average contribution to R&D&I recorded for the whole Spanish economy, and is above the average in countries like Germany or the United States.

If the support necessary to reach the penetration targets set in the draft 2011-2020 PER (Plan for Renewable Energy in Spain) is maintained, the contribution to the GDP could be as high as 3 516.8 million Euros in 2020, and CSP plants will avoid about 3.1 million tons of CO2 in 2015 and over 5.3 million tons of CO2 in 2020. Although Concentrated Solar Power (CSP) may seem as something new, it is really a proven technology, since the first commercial plants began operating in California in the mid-eighties, although the market was paralyzed due to the fall in fossil fuel prices and the cancellation of public incentives.While the other technologies for electricity generation from renewable resources began to receive support at the end of the nineties, a framework making commercial power plant construction possible was not established until 2004 in Spain, and also in the US, although based on different models. The first plants to go into operation were the PS10 in Spain at the beginning of 2007, and a short time later, the Nevada Solar One in the US. This solar thermal renaissance in Spain and the US came in response to the need to meet renewable energy penetration targets and reduce energy dependence, and was also influenced by the fact that these two countries had made the strongest R&D&I efforts (PSA and Sandia). In this sense, the establishment of a series of incentives, such as the premium feed-in tariffs for renewables in the first case and the requirement to use renewables in the second, along with the existence of the resource in both countries, awoke an interest in CSP.

The position of leadership achieved by the Spanish industry has been the result of the combination of three factors:

• Continuous support of research and technological development since the end of the seventies as described in detail in the book published by Protermosolar, “Solar Thermal Energy. History of a research success.”

• The regulatory framework implanted in 2004 and consolidated in 2007, with which CSP began to receive premiums for generation in our country almost ten years after other technologies such as wind, photovoltaic, biomass and mini-hydraulic.

• The response capability of Spanish companies which well-prepared human resources and a commitment had made with investments financed mostly without public subsidies, by “Project Finance” in commercial terms.

On the other hand, the use of a renewable resource so abundant in Spain as the sun is at the same time savings for our country to replace fossil fuel imports and mitigation of risk arising from this situation, while improving the development of a domestic industry. Deloitte notes that in 2010 the solar thermal energy production in Spain has avoided import about 140,000 tonnes of oil equivalent (toe) and plants already in operation at the end of that year replaced about 500,000 toe.

By José Santamarta,