Tom Georgis, SolarReserve’s Senior Vice President of development, on the different elements of good renewable policy in California, Australia and South Africa.
Interview by Susan Kraemer
Solar Reserve licensed its day-into-night CSP technology from RocketDyne (the engineers for NASA) who in the 90s had demonstrated that molten salts work as both transfer fluid and storage medium. The company currently has 25 projects underway, globally.
Under construction is its 110 MW Nevada CSP tower project, which on completion will supply Las Vegas with power (in a noon to midnight contract), to become the largest in the world to use this technology. Permitting and financing is on track to break ground on their even larger 150 MW Rice Solar project in California this year.
Tom Georgis speaks to CSP Today about Australia’s newly created Australian Renewable Energy Agency (ARENA) and its $10 billion Clean Energy Finance Corporation (CEFC) to fund renewables; a tough policy in South Africa that weeds out all but the most professional firms; and how Time of Use Pricing in the California market with its 33 percent Renewable Portfolio Standard (RPS) helps those like SolarReserve, who are able to supply clean electrons for evening peak hours.
Tom Georgis specializes in the Asia Pacific region, and was recently in Australia following the implementation of its first ever landmark climate legislation, providing the first ever incentives for clean energy for the coal-dependent nation.
CSP Today: How will Australian PM Julia Gillard's new climate policy work?
Tom Georgis: ARENA will have a grant program for renewables. We think the CEFC and ARENA are a great step in the right direction towards a firming up of those policies which will allow us to open offices in Australia and spend time down there identifying strategic partners that we can collaborate with in Australia. We can start identifying sites where we would be wanting to build these projects, going through the permitting and approval process.
There is also a huge resource industry down there; a lot of mining in remote locations, so a technology like ours would be preferable to trucking in diesel, or trying to develop natural gas pipelines.
CSP Today: Does the federal grant program exclude foreign entities or require all domestic manufacturing?
Tom Georgis: I haven't seen anything to that effect. It's a pretty open market.
We hope to build multiple projects in Australia. They realize that certain components may have to be manufactured offshore. A lot of the components and materials are always going to be locally sourced.
If you talk about steel and concrete and glass and wiring, a lot of that is locally sourced. All the construction, operation; those are all local hires we don't bring in from overseas.
CSP Today: Are you comfortable that the policy is stable through future elections?
Tom Georgis: My answer is no. I mean there are certain programs that will get funded, like the Clean Energy Finance Corporation will get funded - but those allocations or appropriations obviously are subject to government approval. I was actually down there when they were having the political issues within her party, so it was kind of interesting to observe that.
But what we certainly hope we're going to see in Australia is very similar to what we see in South Africa and what we have here in the United States which is a set of policies that are clearly defined and there is certainty around them, that will allow us to invest in Australia.
CSP Today: Yes, South Africa’s policy is also new.
Tom Georgis: South Africa has done a fantastic job in how they’ve structured their renewable energy policy; and how they are approaching who can participate with respect to project viability.
Certainly it’s a coal-based economy right now, and that’s always been a challenge for developing a renewable energy from a price point. But they realized that they needed to diversify, that there are consequences from a health, pollution, and environmental standpoint from burning so much coal. Like other countries like Australia and China that are heavily dependent on coal, they have implemented new policies and programs to diversify.
Before you can even bid into the process in South Africa, you really need to have a fully vetted project.
The land secured, permits and approvals, transmission solutions, equity sponsors, EPC contractors - all of that has to be fully baked in order to even participate in the process. We think that is a great model; it is what we really need as a developer.
Of course, our investors need certainty around the policy. Every country is different. Here in California, we’ve got the renewable portfolio standard (RPS), and obviously that is a key driver for developers and investors.
CSP Today: California’s Investor Owned Utilities (IOUs) must meet a renewable energy mandate, but simultaneously cover an afternoon-evening peak. Do they incentivize production of renewable energy - when its needed?
Tom Georgis: There is ‘Time of Day’ pricing in California put forth by the IOUs, so if you are delivering power in the morning – like if you are a PV facility, or direct steam, you actually get penalized a little bit – you get a multiple like point seventy five of your contract price.
But if you are delivering during afternoon/evening peak periods; you get a one point five, one point seven, or even a two point something multiple of your contract price, so your incentive is to deliver megawatt hours during that period.
We can operate when it’s cloudy; we can operate at night. We can deliver very valuable electrons during the peak periods. We can obviously take advantage of Time of Day pricing by delivering the megawatt hours when they need it most.
We don't require augmentation from natural gas power plants and so late afternoon when PV is dropping off, and direct steam and trough are dropping off - in the evening hours, you're going to have to fire up natural gas facilities to augment and supplement those intermittent resources, whereas with Solar Reserve technology we don't require any supplemental from fossil fuels, either within the facility or from other generation assets.
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