Even though the molten salt in new solar thermal power generation remains hot, buoyed recently by growth in Spain and elsewhere, the market for the technology may be slowing down. Earlier this month, German-based Schott said it would suspend production on one of its two production lines in New Mexico. At the same time, it said it would cut 30 positions at the manufacturing plant. But there are some signs that the market may pick up just as quickly.
Unlike photovoltaics, many solar thermal projects need to be mammoth-scale to truly take advantage of their full potential to generate power. Ultimately, solar thermal power plants use steam turbines, just like coal and nuclear power plants, to generate electricity. While one solar thermal plant can generate hundreds of megawatts of power and provide power for a small city, such plants need mammoth size funding to get operational. Getting that financing, even though the technology is proved and the long-term payback is virtually guaranteed, can be daunting, which is a prime factor in the slowdown of the market.
Schott, which manufactures solar thermal equipment at the New Mexico facility, attributed the labor force reduction and closure of the production line to “slow growth of the North American market and the slowdown in the Spanish market.” Spain was leading internationally in terms of solar thermal development, but its recent economic downfall, and reluctance of private financiers to make large investments in United States based solar thermal projects, have led to the market’s stagnation.
Uncle Sam has provided a lifeline for some projects, including a $1.4 billion guarantee for the Ivanpah project in California and a $1.5 billion guarantee for Abengoa’s Solana project in Arizona, earth2tech reported. But it can’t foot the bill for all solar thermal projects. NRG Energy, for instance, had to toss plans to build a 92 MW solar thermal because it couldn’t wait for a loan guarantee and still meet deadlines. Instead it will build a 66 MW photovoltaic plant.
The plant is still new; Schott only completed it last year. And earth2tech reported that most of the receivers manufactured at the New Mexico plant were being shipped. On the other hand, the California Energy Commission gave final approval to a 250 MW solar thermal project on Aug. 25, and has given preliminary approval to 2.1 GWs (2,100 MWs) of solar thermal projects. So maybe the Schott layoff will be short-lived.