Parabolic Trough Solar Power for Competitive U.S. Markets

Nine parabolic trough power plants located in the California Mojave Desert represent the only commercial development of large-scale solar power plants to date. Although all nine plants continue to operate today, no new solar power plants have been completed since 1990. Over the last several years, the parabolic trough industry has focused much of its efforts on international market opportunities. Although the power market in developing countries appears to offer a number of opportunities for parabolic trough technologies due to high growth and the availability of special financial incentives for renewables, these markets are also plagued with many difficulties for developers. In recent years, there has been some renewed interest in the U.S. domestic power market as a result of an emerging green market and green pricing incentives. Unfortunately, many of these market opportunities and incentives focus on smaller, more modular technologies (such as photovoltaics or wind power), and as a result they tend to exclude or are of minimum long-term benefit to large-scale concentrating solar power technologies. This paper looks at what is necessary for large-scale parabolic trough solar power plants to compete with state-of-the-art fossil power technology in a competitive U.S. power market. INTRODUCTION Between 1984 and 1990, Luz International Limited developed, built, and sold nine parabolic trough solar power plants in the California Mojave Desert. These plants, called Solar Electric Generating Stations and referred to as SEGS I– IX, range in size from 14 MWe to 80 MWe and make up a total of 354 MWe of installed generating capacity. Each of these plants was developed as an independent power producer (IPP) project, financed with non-recourse debt, and sold to investor groups. In total, over $1.2 billion was raised to finance these projects. The projects were initially driven by the availability of state and federal investment tax credits. Later, special power purchase contracts available in California played a key role. The SEGS projects are qualifying facilities (QFs) as defined by the 1978 Federal Public Utility Regulatory Policies Act (PURPA) legislation, which enabled the creation of small nonutility renewable and co-generation power plants. PURPA required local utilities to purchase power from QFs. In 1991, Luz declared bankruptcy while in the process of building its tenth plant as a result of delays in the extension of the California solar property tax exemption and the inability to obtain construction financing. Although many factors contributed to the eventual failure of Luz, the primary cause was decreasing energy prices coinciding with the phasing out of state and federal investment tax credits (Lotker, 1991). However, Luz achieved significant reductions in the cost of power from parabolic trough solar power plants, reducing the cost from a reported 24¢/kWh at SEGS I to about 8¢/kWh at SEGS IX. It is important to note that all of the nine SEGS plants completed continue to operate today. SEGS I is currently in its 14th year of operation. In total, the plants have accumulated 98 plant-years of operation. From an operational perspective, the SEGS plants have been very successful. The plants have demonstrated the industrial nature of the Luz parabolic trough collector technology and the ability to dispatch and achieve high on-peak availability for Southern California Edison (SCE), the local power utility. During the ten-year period from 1988 to 1997, the five 30-MWe SEGS plants located at Kramer Junction in California averaged 105% of rated capacity during the fourmonth summer on-peak period between 12 noon and 6 p.m. on weekdays (Cable, 1998). During this period, not one of the plants averaged below 100% of its 30-MWe rated capacity for even one month during the summer on-peak period. The SEGS plants are hybrid fossil/solar plants, so when insufficient sunlight is available, the turbine can be operated up to full load