Solar thermal energy opens up a trillion-dollar business opportunity, but cost and technology remain challenges

On May 24, Zhou Lixin, chief representative of Solar Millennium in Beijing, told reporters that since the bid for the 50MW solar thermal power generation project in Ordos was opened at the beginning of the year, domestic companies have begun to pay more attention to this field. "Not only the five major power generation groups, but even the four small power generation groups are contacting us."

On June 1, the National Development and Reform Commission's "Guidelines for Industrial Structure Adjustment (2011 Edition)" will be officially implemented. Among the newly added new energy categories in the encouragement category of the guidance catalogue, solar thermal power generation is placed in the first place.

"The key now is that the country has not issued any support policies for this area. At the same time, technical routes, industrial chains, costs, energy storage methods, etc. also need to be resolved." Huang Xiang, chief scientist of the 973 solar thermal power generation project and vice president of the China Electricity Association, analyzed that China's solar thermal power generation may still need about three or four rounds of concession bidding to survey the on-grid electricity price of solar thermal power, and finally introduce a fixed benchmark electricity price. "So the explosion point of solar thermal power generation may be five or even ten years later."

Huang Xiang also predicted to reporters that if my country reaches 30,000 square kilometers of solar thermal power generation development by 2020, it will be able to solve 30%-35% of the country's total electricity consumption, and the market size of solar thermal power generation will reach 22.5-30 trillion yuan.

Admission valve opened

On January 20, the bidding for the Ordos 50MW solar thermal power generation project, the first solar thermal power station concession project in China, was opened. With only three bidders participating in the competition, Datang New Energy finally won the bid with a low price of 0.9399 yuan per kilowatt-hour.

"This price is very low. The price abroad is generally above 2 yuan per kilowatt-hour, and the lowest is above 1.5 yuan per kilowatt-hour," said Zhou Lixin.

As the earliest promoter of the project, Sun Millennium, after a detailed investigation, concluded in a report that the total investment in the Inner Mongolia CSP project is about 1.6 billion yuan, and it can generate more than 120 million kWh of electricity per year. The industry expects that the on-grid electricity price after the bidding may be between 1.8 yuan and 1.9 yuan per kWh.

After missing the opportunity in the photovoltaic industry, solar thermal power generation has become a new blue ocean for some companies.

According to the reporter, companies including Huangming Solar Energy, Linorite, Zhonghai Yang, Longyuan Electric Power, and Xiangdian Co., Ltd. have increased their investment in the field of solar thermal power generation. Zhonghai Yang, for example, has invested in a solar concentrating thermal power generation reflector project in Chengdu, with a total investment of 500 million yuan in the first phase of the project.

"The market for solar thermal power generation is developing rapidly abroad. For example, the installed capacity reached 700,000 kilowatts in 2009 and directly increased to about 900,000 kilowatts in 2010." Wang Jie, director of the promotion department of medium and high temperature solar energy industry of Huangming Solar Energy, told reporters that the company is now also closely following the 1,000-megawatt solar thermal power generation project in Golmud, Qinghai. "South Africa and India have also found us with projects," and they require system integration of the entire power station, so Huangming has formed a consortium with domestic companies.

In 2007, the National Development and Reform Commission made a specific plan in its "Medium- and Long-Term Plan for Renewable Energy", which stated that China would build a total solar thermal power generation capacity of 50,000 kilowatts by 2010 and reach 200,000 kilowatts by 2020.

A person close to the National Development and Reform Commission previously revealed to the media that before 2012, 1,000 to 2,000 megawatts of solar thermal projects will be launched in the country.

Technical and cost challenges

Photovoltaic power generation refers to the use of solar cell technology to convert light energy into electrical energy, while solar thermal power generation refers to the technology of concentrating solar energy, providing steam through a heat exchange device, and then driving a steam turbine to generate electricity.

An executive of a solar thermal enterprise who requested anonymity said that unlike the highly integrated photovoltaic industry in China, which includes polysilicon, silicon wafers, batteries and modules, the domestic solar thermal power generation industry is still in a "small-scale" state with small scale and immature technology routes due to an imperfect industrial chain. "At the same time, there are also disputes over the technology route."

According to different heat collection methods, there are four types of solar thermal power generation technology routes: trough, tower, dish and Fresnel focusing, among which trough power generation is the most widely used. In 2009, trough solar thermal power generation in operation around the world accounted for 88% of all solar thermal power generation devices and 97.5% of projects under construction.

The aforementioned executive believes that dish-type power generation was previously in an experimental state, but has now entered the commercial operation stage in the United States, and occupies a smaller area, and only requires 1.4 liters of water per kilowatt-hour of electricity, which is far less than the 3785.4 liters of water required for trough and tower-type power generation. "Maybe it will have a better future."

As for the most mature trough solar thermal power generation system, it is mainly composed of heat collecting tubes, heat collecting lenses, steam turbines and brackets. Unlike the photovoltaic power generation industry, which has basically achieved localization, the above-mentioned supporting parts industry chain for solar thermal power generation has not yet been established, and its core component, the heat collecting tube, is still monopolized by two companies, Schott and Siemens of Germany.

"We have become the third company in the world to successfully develop heat collector tubes after Schott and Siemens." Wang Jie revealed that the heat collector tubes used in the project won in Ordos this time were produced by Huangming. But he admitted that "it is still in the pilot stage, and the 70MW production line will not reach full production until the second half of the year."

Another important aspect is the cost. Spain, which has the largest scale of solar thermal power generation in the world, still maintains a price of 3.3 yuan per kilowatt-hour. Even if the factor of localization can reduce costs is taken into account, the price of solar thermal power generation in China will still remain at around 2 yuan.

According to the forecast of Huangming Solar Energy, the on-grid electricity price of China's solar thermal power generation will reach 1.4 yuan/kWh-1.6 yuan/kWh in 2015 and 0.6 yuan/kWh-0.8 yuan/kWh in 2020.