Dr Michael Geyer, Director for International Business Development, Abengoa Solar, on strategies for success in the highly competitive concentrated solar power market; the perfect policy mechanism to launch concentrated solar power into the mainstream energy mix; and China’s future role.
Interview by CSP Today’s founder Belén Gallego
Dr Michael Geyer, physicist, mechanical engineer and solar energy sector veteran, has been active in the concentrated solar power sector since 1981. A key player in concentrated solar power’s (CSP) renaissance, he worked intensively with the DLR (German Aerospace Agency), the Plataforma Solar de Almería and on the Andasol project, before joining Abengoa as Head of International markets in 2007.
Since Michael Geyer joined Abengoa, the company has powered ahead to become a global leader in solar energy deployment, with CSP and CPV firmly at the centre stage of their strategy. Currently Abengoa´s portfolio includes projects in USA, Mexico, Morroco, Algeria, South Africa, Spain and India.
CSP Today’s founder Belén Gallego speaks to Dr Michael Geyer to gain insight into how Abengoa has postioned itself as a pivotal player in the global concentrated solar power market.
CSP Today: Abengoa is very successful in the CSP industry worldwide. What sets your strategy apart from other companies’?
Michael Geyer: In order to be successful with a new technology, you must be able to control the various risks.
The key to success is that as a technology provider you always can offer the latest development. Secondly, that you have the capacity of constructing and guaranteeing what you are offering as a technology provider, and that you have learned to close finance in those plans.
I think the difficulty for many start-ups that have brilliant ideas and say 'we have new collectors and receivers for the system', is that they must then find somebody who believes on them and can put the money behind it so that the technology can be guaranteed. That is a very difficult step - to make other people or companies believe and put their money behind it.
The big advantage that we have in Abengoa is that we have the people who have the great ideas, but then we also have the people who construct them – these people have got references worldwide and can put guarantees behind.
That is probably the crucial advantage. Vertical integration is required if you work in a new technology, you must have a provider combined with a constructor. The lenders and investors shouldn´t have to take a risk on the performance of the plant.
CSP Today: We have seen a variety of policy mechanisms throughout the world for supporting CSP. What aspects of the different regulatory frameworks would you take to create the ideal policy mechanism that would foster both innovation and competition?
Michael Geyer: When you look at the different mechanisms that have been implemented in the different countries, and you look then which of those mechanisms boosted the biggest growth of renewable power projects and investments, then most probably you will find countries like Germany with their success in a short time to boost a huge industry from technology to developers. In Germany last year they implemented over 7 gigawatts of PV.
So from the fuel success statistics, it seems the feed in tariffs with progressive reductions is the most successful instrument to bring in competition quickly from scratch, and to introduce new technology. This is a very important mechanism, where every year the tariff is reduced so developers can plan accordingly and adapt.
You know that if you connect your plant, in 6 years the tariff is reduced by 'x' amount, so you need to drive down your costs to match that. It can reduce costs if it is widely made and has such a cost reduction element.
CSP Today: In your opinion what strategy should the CSP industry follow to succeed and strengthen specially regarding competition with PV?
Michael Geyer: PV showed the way in how to reduce the costs. Five to ten years ago, the entire power world said PV would never make it, would never reduce costs, or make a contribution. In reality, it showed the strengths of a dedicated industry to bring costs down and to introduce a new sustainable renewable solar generator into the power market.
The important thing is to understand what it has taken to get there: PV has received from the beginning double the premium and financial support per Kw/hour than CSP. There has been a lot of investment poured into it. As the amount of CSP installed grows, so will our competitiveness.
At the same time we will probably see in the PV market some form of consolidation. I think this is currently going on with big competitors in the market where demand has suddenly gone down and over-capacity has built up.
Knowing the great added value that CSP gives on top of other renewables, which is dispatchability, storage, hybridization and job creation, I think that we should just follow the example of the PV industry and continue doing what we do best. Five years ago, nobody would have said that by now we would have 2GW of plants installed.
So even though we are some years behind PV in our learning curve, we are progressing in terms of improving the technology, reducing the costs and learning how to operate the plants effectively. I am convinced that CSP with the advantages of dispatchability and hybridization will continue to grow.
CSP Today: What is your take on modularity vs. high efficiency?
Michael Geyer: I think the best would be combining both, make them modular and highly efficient. I like to compare the solar thermal plant to a computer: they have a turbine as their processor, and around it you plug in other standardized equipment (such as the receiver).
I think the more they are standardized, and the more plants you have in the pipeline, you will find them more modular and you will find more competition in equipment suppliers to bring down costs by quality competition.
CSP Today: How important will China be in the future CSP market?
Michael Geyer: China is always an important driver in the world market. Today they have roughly 800GW of installed capacity. Every year they install almost double the capacity of Spain’s current maximum energy demand. So any percentage of average, no matter how small, translates into alot of MW of CSP.
As I recall, they want to install some 2,000 MW of CSP in their next 5-year-plan, which for China, is neither big nor significant in their scales as it is less than what has been installed by next year in Spain.
However, China has a big disadvantage in CSP, and that is their solar resources. Even in the best areas, like the desert, their deserts are not like those of other countries in the South – their deserts are in the North at high latitudes which it's not the most appropriate climate for developing CSP.
This gives the countries in the Sun Belt a big chance to maintain their competitive advantage over China. The opportunity is still there for China is to become a hub of fabrication for CSP components in China, which will help us to reduce costs, but they are not destined to build in their country CSP plants with cost advantage like you can do in Southern Europe, South-Western USA, Australia or Africa.
CSP Today: I know you can´t tell me Abengoa´s favorite CSP technology, but what is Michael Geyer´s favorite CSP technology?
Micahel Geyer: Of course I can tell you Abengoa's favourite technology! Our favourite technology is the favourite of our clients. So whatever our clients want, we will offer and build.
Personally, it's difficult. When I started my career, I did my doctorate thesis on air-cooled towers, which would run a gas turbine. At that time as an engineer I thought that was the ultimate goal.
Afterwards I have been convinced that the highest temperature is not the most important factor in the process, but you can take huge advantage of 200 years’ experience in steam cycles and optimization.
I think today technology has advanced, we have better materials, we can design them better, we can construct them better. We have higher efficiency potential with the towers, so that long term, we will see that towers which now have 10% of the market share will increase.
In the end it will probably be a similar situation to that of the automotives diesel engines and the normal engine market. Ultimately, it depends on applications and the lender's appetite, and the means and the requirements for storage.
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