Speaker 1: Do you have those moments where you think makes so
Speaker 1: much sense? Why didn't I think of that? For me
Speaker 1: at least, this seems to happen all the time. But
Speaker 1: one particular occasion was back in when I came across
Speaker 1: a news story about a geothermal power plant that was
Speaker 1: just reopening. To set it up a bit of context,
Speaker 1: I look after the product for BANF, so how we
Speaker 1: deliver the research tools, news and data to our users
Speaker 1: across BNF dot com, the benof mobile app, and the
Speaker 1: Bloomberg terminal. But before I moved over to this side
Speaker 1: of things, I was a BANF analyst. This was back
Speaker 1: when BEANF really only covered renewables. So in renewables there's
Speaker 1: wind and solar and now batteries and the other stuff.
Speaker 1: I looked after the other stuff, mostly geothermal. So geothermal
Speaker 1: power generation isn't really realistically possible to do everywhere, but
Speaker 1: think about a place that has volcanoes or hot springs.
Speaker 1: It probably makes a lot of sense to do it there.
Speaker 1: In places it works. It's really a fantastic technology. Okay,
Speaker 1: So back to the Aha moment. The plan in question
Speaker 1: was the still Water plant out in the Desert, Nevada
Speaker 1: in the us look it up. It's owned by the
Speaker 1: Italian utility in L and they did something really clever.
Speaker 1: Now and it's a very very basic form. A geothermal
Speaker 1: power plant works by drawing hot water out of the
Speaker 1: earth through deep wells I think thousands of feet down.
Speaker 1: Think oil wells, but instead of oil and gas, they
Speaker 1: pull up hot water for brine. This water then flashes
Speaker 1: to steam to run a turbine, or it heats up
Speaker 1: another working fluid that vaporizes to run the turbine. What
Speaker 1: ann L did was they put trough shaped mirrors around
Speaker 1: the pipes carrying the hot water on its way to
Speaker 1: the power plant. And what this did with heat up
Speaker 1: the water even more thereby boosting power output by an
Speaker 1: extra two megawats from thirty three to thirty five megawats.
Speaker 1: Not a huge game, but it makes so much sense.
Speaker 1: Why wouldn't you do that? Why didn't I think of that?
Speaker 1: To be honest, maybe I did, and I forgot. I
Speaker 1: should go back and check my notes. I'm sure I
Speaker 1: thought it. Yeah, totally. Anyway, this method of using the
Speaker 1: sun to heat up stuff, well, it's another lesser known
Speaker 1: renewable solar thermal as we'll hear about in today's episode,
Speaker 1: it can take a few different shapes and where it's possible,
Speaker 1: it's really quite cool. Today we'll talk with BENEF head
Speaker 1: of solar Analysis, Jenny Chase, about our latest look at
Speaker 1: this subsector of the solar industry based on the solar
Speaker 1: thermal market Outlook t BENEF users can get this report
Speaker 1: on BENEF dot com, the BENEF mobile app, and BENEF
Speaker 1: go on the Bloomberg terminal. As always, BENEF does not
Speaker 1: provide investment or strategy advice, and you can hear a
Speaker 1: full disclaimer at the end of the show. Him Mark
Speaker 1: Taylor here with Dana Perkins, and you're listening to Switch
Speaker 1: on the BENF podcast. Hi Jenny, thanks for joining us today.
Speaker 1: Hi Danna. We are here today to talk about solar
Speaker 1: thermal and before we really get into the meat of
Speaker 1: the research, note, can you explain to us what solar
Speaker 1: thermal generation is and how it differs from other forms
Speaker 1: of solar energy like PV. So specifically, we're going to
Speaker 1: talk about solar thermal for electricity generation. Now, solar thermal
Speaker 1: for hate is a whole other field, and that's also
Speaker 1: quite useful because if you want to take a shower,
Speaker 1: if you want to feed something into an industrial process
Speaker 1: heat process. You can use solar thermal to increase the
Speaker 1: temperature and ben might It takes us much energy to
Speaker 1: increase to the temperature of water or another fluid from
Speaker 1: ten to twenty degrees celsius as it does to increase
Speaker 1: it from five hundred five and ten degrees celsius. So
Speaker 1: even using low, relatively low value, low level heat can help.
Speaker 1: But today we're going to talk about specifically when you
Speaker 1: concentrate solar thermal into a fluid, make it really hot
Speaker 1: and run a turbineal boiler and generate electricity from that. Generally,
Speaker 1: how do you do that? Well, there's two main surviving ways.
Speaker 1: You can either use a parabolic trough and this is
Speaker 1: where I wish we had pictures rather than being on
Speaker 1: a podcast. You can either look at everyone. So yeah,
Speaker 1: a powerbolic trough is exactly what it sounds like. It's like,
Speaker 1: there are these troughs and they concentrate the sun falling
Speaker 1: on them into a pipe in the middle and they've
Speaker 1: got that means that they've got miles of piping which
Speaker 1: contains steam or it's nearly always steam under high pressure
Speaker 1: and high temperature. Or you can have a tower design
Speaker 1: where you have a big field of mirrors and they're
Speaker 1: all aligned perfectly to focus the heat onto one central boiler.
Speaker 1: One reminds me of a magnifying glass when I'm a kid,
Speaker 1: you know, just concentrating the sun down a piece of
Speaker 1: paper too, well, burn the paper. That's basically what you do.
Speaker 1: There's also final designs which are using flat mirrors to
Speaker 1: do the same thing, but they're quite a minority technology,
Speaker 1: so well, we'll probably not talk about those. Isn't this
Speaker 1: generally a minority technology? Yes, Solar thermal electricity generation we
Speaker 1: got really excited about it in two thousand and eight.
Speaker 1: We thought, wow, this is cheaper than potable tex, and
Speaker 1: it was, but that was mainly because le techs was
Speaker 1: really expensive back then. And then photobole takes got cheap
Speaker 1: and all we've stopped talking about solo them or so
Speaker 1: much so the clast declines didn't come down. But it
Speaker 1: also has to do with its only useful in very
Speaker 1: specific locations, and I think you reference very hot locations
Speaker 1: as being particularly useful for this technology. Why is that, Well,
Speaker 1: first of all, the cost has come down. I mean
Speaker 1: we were talking like four hundred and fifty euros and
Speaker 1: mega hour and two thousand and eight, and we thought
Speaker 1: that was cheap. I'm sorry, yeah, it wasn't cheap, but
Speaker 1: now we thought we thought it was kind of cheap
Speaker 1: because potobo tex was really expensive, and today some of
Speaker 1: the lowest bids are coming in around seventy or seventy
Speaker 1: three dollars and megaw our. I'm a bit skeptical about those,
Speaker 1: but even our calculations suggests that it's you can do
Speaker 1: solar them or for a hundred or somewhere between hundred
Speaker 1: and hundred and fifty degrees dollars for reference pvs AT.
Speaker 1: So this is expensive stuff and you can only do
Speaker 1: it somewhere that has a high amount of direct installation
Speaker 1: because it doesn't unlike potable tax it doesn't capture reflected
Speaker 1: or or the fuse slide, so it needs to be
Speaker 1: really sunny and the sunny needs to beat down directly
Speaker 1: and not a lot of dust in the atmosphere, which
Speaker 1: is a problem, and so it's quite specific locations. What
Speaker 1: it does offer, though, is storage if a couple of things.
Speaker 1: First of all, it supports the grid better than photoboll
Speaker 1: taps because there's a spinning thing. Grids like spinning things.
Speaker 1: It produces a that produced a c generation actual spinning metal.
Speaker 1: For everybody listening, it's frequency regulation, right, it's frequency that
Speaker 1: the proper term is frequency regulations. But basically it's just
Speaker 1: that you've got inertia if you have spinning metal, and
Speaker 1: that means that if the grid wobbles, the metal keeps
Speaker 1: spinning at the same much the same rate, and that
Speaker 1: makes the grid wobble less. So you talk about these
Speaker 1: really hot locations, so we we can't have too much sand.
Speaker 1: Sand is going to get in the way, but you
Speaker 1: do need a lot of heat. Where in the world
Speaker 1: of these projects being built right now, so they're being
Speaker 1: built a lot of them in Morocco. Part of the
Speaker 1: reason for that is that the Moroccan government are quite
Speaker 1: forward looking at about this, and they're thinking about how
Speaker 1: they're going to decarbonize and supply their country going forward.
Speaker 1: A bunch in the United atib emmates and the other
Speaker 1: thing about the Middle East and North Africa, which fits
Speaker 1: solar thermal quite well, is that they mostly have a
Speaker 1: very high peak of energy demand in the evening, and
Speaker 1: that's where solar thermal's real advantage comes in, because you
Speaker 1: can actually store energy from solar thermal. You just know
Speaker 1: something that gets really hot and stays hot, and then
Speaker 1: you can use it to to make steam to run
Speaker 1: the turbine after dark. So usually this medium is molten salt.
Speaker 1: Salt has a really high specific heat capacity, so it
Speaker 1: stores a lot of energy when you heat it up.
Speaker 1: So you make it five degrees centigrade, leave it there,
Speaker 1: and then when you need the power you use that
Speaker 1: to make steam and run the turbine. It's a mixture
Speaker 1: of sodium chlorate and other salts. It's quite a tough
Speaker 1: fat because this is I'm sure, and it's well insulated
Speaker 1: as well. You do not want this stuff to freeze.
Speaker 1: You especially don't want it to freeze in pipes because
Speaker 1: that's a right pain in the neck to get out.
Speaker 1: How many hours of storage are we talking about? Does
Speaker 1: this get me to the next morning or do I
Speaker 1: need to go make sure I go to bed before
Speaker 1: I run out of electricity. You can have as much
Speaker 1: moden sol as you like. You just make enough of
Speaker 1: a solar field to heat it up. So Sara Dominado,
Speaker 1: a plant that's being built in Chile, has seventeen point
Speaker 1: five hours of storage. It's basically a baseload plant. That's
Speaker 1: pretty cool. It's I've always thought of solar thermal, So
Speaker 1: for everybody listening, I used to I still look at
Speaker 1: a lot of the geo thermal market, right market, I
Speaker 1: don't know. And you could argue that geothermal is a
Speaker 1: lot like solar thermal and that it's kind of like
Speaker 1: a science project. You get a lot of oh, that's
Speaker 1: really cool moments, but you also get it peppered with like, okay,
Speaker 1: but this is only work in certain specific places. I
Speaker 1: was used to some of the geo thermal market by
Speaker 1: the old song nice work if you can get it,
Speaker 1: because it works in really specific places. I am going
Speaker 1: to argue though, that a lot of the conversations we
Speaker 1: have with analysts talk about the future of electricity and
Speaker 1: grid connection is a lot of different combinations of things
Speaker 1: and looking at things that are right for and I
Speaker 1: get that there's probably certain technologies that have more locations
Speaker 1: that they could go in, but it is, you know,
Speaker 1: just an increasingly diverse grid is what potentially we think
Speaker 1: the future holds. One of the things you point out
Speaker 1: in this research note was that solar thermal actually can
Speaker 1: really benefit from the presence of photovol takes at the
Speaker 1: same time. So what what is the benefit? Is it economic?
Speaker 1: It's not exactly that the solar firm will benefits. It's
Speaker 1: just that photobole tapes is cheaper than solar thermal. So
Speaker 1: if you average the costs over a bigger plan, you
Speaker 1: get a lower average cost of energy. But what you
Speaker 1: can do is solar firm has a lot of parasitic losses.
Speaker 1: You've got a pump fluid, you've got to get things
Speaker 1: started in the morning, you've got to tilt the mirrors,
Speaker 1: whether they're parabolic, trough or tower and heliostat, and you
Speaker 1: can actually use photobo tapes to run that since all
Speaker 1: those things are mainly running when it's light. And then
Speaker 1: you can use a solar thermal to store your heat
Speaker 1: in the tank, which means that when the sun goes
Speaker 1: down and you can start taking that heat out. So basically,
Speaker 1: if you hybridize solar thermal with PV, you could provide
Speaker 1: the daytime power for the grid but also for the
Speaker 1: parasitic losses, and then you run the solar thermal after dark. Well,
Speaker 1: technically you take out the stored energy from the solar
Speaker 1: thermal after dark and you run that turbine and that
Speaker 1: means you can have baseload power even cheaper than if
Speaker 1: the whole thing was solar thermal. She met in Morocco,
Speaker 1: You met in Chile. Are there other places that are
Speaker 1: looking at this? Couldn't pop up anywhere else? Well, Spain
Speaker 1: has done two point three gigawats and stopped. Spain's actually
Speaker 1: quite marginal for sunniness, quite marginly sunny enough for solar
Speaker 1: thermal for starters. And secondly, they had this big policy.
Speaker 1: They built a bunch of fifty megawatch plants that were
Speaker 1: all mostly kind of the same. They're parabolic trough that
Speaker 1: that fleet is working quite well, though it took it
Speaker 1: a long time to ramp up. But we used to
Speaker 1: think powabolic trough technology wasn't really improving, but it actually is.
Speaker 1: It's a good question. But tracking better. I think that
Speaker 1: it's little things like that because these plants were all
Speaker 1: built by but their capacity factor actually increased up to
Speaker 1: so obviously without totally we hoilding these plants, these companies
Speaker 1: are learning better how to operate them and they haven't
Speaker 1: been like any big molten salt leaks lately lately. That
Speaker 1: a thing, it's a thing. What happens when there's a
Speaker 1: molten salt leak, you get molten salt everywhere. It's not pretty. No,
Speaker 1: I mean that sounds like a bummer, But in reality,
Speaker 1: what does that do to the plant? Is it a
Speaker 1: big clean up? They have to shut everything down for
Speaker 1: a really long time. Is it hazardous. It's not that hazards,
Speaker 1: just salt, but it's hugely disruptive to the plant. You
Speaker 1: have to clean it up. I'm pretty sure that there
Speaker 1: are rules about leaving loads and loads of salts lying around,
Speaker 1: And of course you have to then get a new
Speaker 1: containment vessel and another bunch of molten salt, and salt
Speaker 1: is not super expensive, but it's not cheap either. You
Speaker 1: have to get a specialized one that meets your property.
Speaker 1: The mixture is actually quite important, so you want to
Speaker 1: have a mixture that you understand the properties of, and
Speaker 1: of course if it leaked out, you probably want to
Speaker 1: get a better thing to hold it in. This time,
Speaker 1: molten salt as a form of storage, I think sort
Speaker 1: of makes these projects unique because a lot of the
Speaker 1: time people are talking about lithium ion batteries these days.
Speaker 1: So my question is, are lithium ion batteries do they
Speaker 1: have a role to play in the solar thermal space.
Speaker 1: I think they have a big role in replacing it probably.
Speaker 1: I think photobotapes and batteries are probably going to ultimately
Speaker 1: beat so a thermal with molten salt storage to provide
Speaker 1: baseload or day long duration power molten salt. At the moment,
Speaker 1: it is slightly cheaper I think for the long durations
Speaker 1: over eight hours of storage, but it's not coming down
Speaker 1: the plants that exist. They run, and actually some of
Speaker 1: the power trough plants run quite well, but they have
Speaker 1: they have problems. I think we're probably going to end
Speaker 1: up using lithium ion more. The other thing with molt salt, interestingly,
Speaker 1: is that you don't need to use it with solar thermal.
Speaker 1: You can just heat it with whatever electricity you've got.
Speaker 1: I did some back of the envelope calculations for this
Speaker 1: report about heating it with wind and then using it
Speaker 1: to provide district heating. Now, the problem with that is
Speaker 1: that you only cycle it probably once a year or so,
Speaker 1: and that means that the capex of putting this big
Speaker 1: molten salt plant underground is quite high if you're only
Speaker 1: gonna if you're gonna heat it up in summer and
Speaker 1: then discharge it in winter. But if you've got wind,
Speaker 1: a lot of wind in the winter, maybe you can
Speaker 1: consider something like that. How much would it matter to
Speaker 1: lose your spinning reserve? This doesn't keep going. I'm not
Speaker 1: a grid expert, but grid experts don't seem super concerned.
Speaker 1: I think that a lot of them are suggesting that
Speaker 1: if you have batteries that are being that are paid
Speaker 1: to provide frequency response so that they do respond on
Speaker 1: a very short time frame to the grid fluctuating, you
Speaker 1: probably don't need spinning reserve, or not as much as
Speaker 1: we have. We're spending a lot of time talking about
Speaker 1: molten salt rather than solar thermal. But there locations where
Speaker 1: molten salt is particularly well adept, and not because you
Speaker 1: do reference putting it with wind or other sources of technology.
Speaker 1: And I'm just wondering if there are physical barriers. Well,
Speaker 1: it's a big tank of really hot stuff, so you probably,
Speaker 1: I mean, you need quite a lot of space, you know,
Speaker 1: quite a lot of insulation. You probably don't want to
Speaker 1: have it right next to somebody's house because if it
Speaker 1: does leak out, there's going to be a wave of
Speaker 1: really really hot stuff, and I think you want a
Speaker 1: bit of a barrier. It is terrifying a volcano. I
Speaker 1: don't think there's a location big location barrier. You just
Speaker 1: probably don't want it in your house. Okay, so this
Speaker 1: is definitely a utility grade solution. And but I mean,
Speaker 1: so solar thermal, so we're talking about large projects. Is
Speaker 1: it hard to find locations for these projects that are
Speaker 1: actually physically close enough to the consumers that makes it
Speaker 1: so that the losses are minimal enough so the economic
Speaker 1: their economically viable projects. I don't think so. I mean,
Speaker 1: there's a lot of dessert in the world, so in fact,
Speaker 1: for solar thermal location is not a massive problem. The
Speaker 1: problem is that no one really wants to pay over
Speaker 1: seventy for power. How do they deal with all of
Speaker 1: the sand and the dirt that does get in the
Speaker 1: way of the functioning of the plant? They clean them
Speaker 1: so it's just a out of water. Um, it's usually water.
Speaker 1: It can also be done dry cleaning. That dry dry
Speaker 1: cleaning with with just soft brushes or cloths can actually
Speaker 1: make more sense in very dusty environments because it's not
Speaker 1: the sun that so much the problem, it's actually the
Speaker 1: fine dust that clings to the panels, and particularly in
Speaker 1: the Middle East, some of that dust if you put
Speaker 1: water on it, it kind of turns into cement, so
Speaker 1: you want to dry clean. So this isn't real bad
Speaker 1: to doing this breshing. This is people mostly at the moment,
Speaker 1: it's people, but it could be robots. I think we'll
Speaker 1: have to have a mirror pressure appreciation day. That sounds
Speaker 1: like a really intense job. I think it's it's not
Speaker 1: a great job. You can you can do it at night,
Speaker 1: of course, so at least, in fact, you prefer to
Speaker 1: do it at night because so at least you're not
Speaker 1: necessarily exposed to the desert sun all day. These plants
Speaker 1: also need to be cooled at certain points, and there's
Speaker 1: wet cooling and dry cooling. What are the benefits of those.
Speaker 1: So basically, whenever you've got a turbine, it's running on
Speaker 1: heat differentials, so you need to dump the heat somehow.
Speaker 1: Wet cooling you use water to dump the heat into
Speaker 1: and some of that evaporates and and a lot of
Speaker 1: the energy that you're a lot of the temperature that
Speaker 1: you're trying to lose a lot of the heat heat
Speaker 1: that you're trying to lose is through evaporation, and that
Speaker 1: does use a fair amount of water. Dry cooling is
Speaker 1: when you just basically expose it to the air and
Speaker 1: let the air cool it down, which is less effective,
Speaker 1: but it doesn't use so much water. In a place
Speaker 1: where it looks like these locations are locations it don't
Speaker 1: have a lot of spare water to go around. Do
Speaker 1: you see that is a potential limitation in the high
Speaker 1: ambient temperature, Yes, it is definitely, definitely a limitation. Yes.
Speaker 1: I think nearly all the plants being built at the
Speaker 1: moment of dry cooling, so they use less than the
Speaker 1: wet cool plants. How often do you write about solar
Speaker 1: therpal as a topic, roughly once every two years. It's
Speaker 1: a quite a slow moving market. There's about six point
Speaker 1: nine gig of what's installed. We're expecting about eight point
Speaker 1: six gig of what's to be installed by twenty three,
Speaker 1: and that's compared with the current photoble type capacity of
Speaker 1: five hundred gigawatts six handred by the end of this year.
Speaker 1: Still a thermal it is rumbling on, and although what
Speaker 1: we haven't talked about much is tower plants under performing.
Speaker 1: In fact, the power what trough plants are doing fairly
Speaker 1: well and becoming quite a mature technology, with plenty of
Speaker 1: proof that they were so. We will keep an eye
Speaker 1: on this sector, but in general I am expecting it
Speaker 1: to lose out to fotial tapes and Pastoriason Jenny, thanks
Speaker 1: for joining us. Thank you, Mark. Bloomberginny F is a
Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This
Speaker 1: recording does not constitute, nor it should it be construed
Speaker 1: as investment advice, investment recommendations, or a recommendation as to
Speaker 1: an investment or other strategy. Bloomberginn ea F should not
Speaker 1: be considered as information sufficient upon which to base an
Speaker 1: investment decision. Neither Bloomberg Finance LP nor any of its
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