Phoenix Company Wants to Make Electricity from New Mexico Sunshine
By Rosalie Rayburn, Albuquerque Journal, N.M. -- April 29
Phoenix-based Stirling Energy Systems says it can find the financing to erect fields of 38-foot-tall mirror-covered dishes for a huge, commercial, solar generating station in New Mexico.
Slawson was in Albuquerque recently to attend the North American Energy
Summit organized by the Western Governors' Association.
Gov. Bill Richardson, during that gathering, said he wants New Mexico to
become the Saudi Arabia of clean energy and announced the creation of a state
Clean Energy Development Council and a solar task force and a proposal for a
clean-energy tax credit.
Richardson has pledged to use $3"million in capital outlay funds he
controls as seed money to attract solar investment from public and private
investors, with a goal of attracting $20 million to build one or more solar
energy plants in the state.
Stirling is the first company that has come forward with a plan to build a
solar generating plant on this scale, said Chris Wentz, director of the Energy
Conservation and Management Division of the state's Energy Minerals and Natural
Resources Department.
Slawson said Stirling wants to build a 12,000-dish solar farm in New Mexico
that could generate up to 300 megawatts of electricity, or enough for about
300,000 households.
"We can bring project financing together to finance a solar power plant
in New Mexico," Slawson said. He estimated the cost of building such a
plant at about $320 million. The deal hinges on a commitment from a utility to
buy the solar farm's output.
"What we're lacking is the power purchasing agreement," Slawson
said.
Up to now, the power industry has been skeptical of solar generation because
of its high capital costs, said Slawson.
But Slawson's solar facility estimate is in line with estimated capital costs
for nuclear- and coal-fueled power plants.
The Washington, D.C.-based Nuclear Energy Institute estimates the capital
cost of a new nuclear plant or a coal plant with pollution control equipment at
between $1million to $1.2 million per megawatt. Capital costs for a new natural
gas-fueled plant are between $600,000 and $700,000 per megawatt, according to
the institute. Unlike nuclear and coal plants, natural gas plants are highly
sensitive to fuel prices, the institute cautioned.
Slawson said utilities should look at solar energy as a resource to supply
power at peak demand times and to sell power into the wholesale market, he said.
Solar generation produces its most power on summer afternoons when demand --
and wholesale prices -- peak in the hot Southwest. Utilities also could recoup
capital costs by selling solar power into the wholesale market at peak prices,
Slawson said.
Stirling Energy Systems has refined technology developed in the 1980s by
McDonnell Douglas, Kockums AB of Sweden and the U.S. Department of Energy. A
concave dish of mirror panels focuses the sun's heat onto a cylinder filled with
hydrogen gas. Heat causes the gas to expand, driving a piston engine that
generates power. A motor adjusts the position of the dish throughout the day to
follow the sun. A parabolic dish 38 feet in diameter can generate 25 kilowatts
of electricity.
Slawson estimated the proposed Stirling solar farm could generate power for
just under 8 cents per kilowatt-hour, including a federal tax credit of about
1.8 cents per kilowatt-hour that is expected to be included with the energy bill
that is now stalled in Congress.
A study by the National Energy Renewable Laboratory in Golden, Colo., which
researches renewable energy, predicts the cost of thermal solar power, without
the tax credit, could drop to 4.3 cents per kilowatt-hour by 2015.
Costs for other kinds of renewable energy have dropped, too. Estimates from
the Washington, D.C.-based American Wind Energy Association, which monitors wind
power development, show the cost of producing electricity from wind is now about
5 cents per kilowatt-hour, or about one-fifth what it was in the mid-1980s.
The association estimates electricity from coal plants costs between 4.8
cents and 5.5 cents per kilowatt-hour.
Natural gas, which became the low-cost, clean-burning fuel of choice for most
of the nation's new power plants during the 1990s, has nearly doubled in price
since 1999.
When the market price of gas was around $3 per million British thermal units,
a new gas plant could generate power for between 3 and 4 cents per
kilowatt-hour. That cost has jumped to between 5 and 6 cents per kilowatt-hour
at today's gas prices of around $5 per mmBtu, said Steve Piper, spokesman for
Platts, an energy research company based in Boulder, Colo.
Stirling has recently opened an office at Sandia National Laboratories in
Albuquerque and plans to employ five full-time engineers to pursue a solar
project here.
Scientists at Sandia labs have been involved in solar power research for 30
years, funded in part by grants from the Department of Energy.
Stirling plans to work with the governor's task force and utilities to secure
a site and power lines for the proposed solar farm, Slawson said.
He added that he hopes to take advantage of the tax credit Richardson plans
to propose for manufacturers who produce components used for renewable energy
projects.
"The parts that make up the dishes are similar to car technology. We
plan to explore what components we can buy here," Slawson said.
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