PBN Sopogy Plans Power Project for NELHA

Solar, OTEC power plants planned to energize NELHA

Pacific Business News (Honolulu) - September 21, 2007

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Ron Baird takes his charge seriously.

Driving behind a speeding tour bus making its way through the Natural Energy Laboratory of Hawaii Authority, he tosses over a scrap of paper and says: “Write down that license plate number.”

In his office, the chief executive officer of the lab sits in a chair beside a plaque with gold lettering proclaiming: It CAN be done.

But two years after his appointment, despite increased water and lease rates, the lab is still struggling to meet expectations that it cover the rising costs of its own operations, projected this year at $5.2 million.

And that isn’t the only problem: “There is no energy at the energy lab,” Baird said.

Two new solar projects are coming online, with Sopogy Inc. in the permitting phase of developing a one-megawatt plant on the site and the Hawaii County Economic Opportunity Council installing a model solar-powered home running off 2.3 kilowatts. That project went live last week.

The state also is in the process of issuing two requests for proposals, one for a solar project that would generate five megawatts of power, and another for a one-megawatt ocean thermal energy conversion plant.

“The whole point is to put some energy back,” Baird said. “We should have been a leader in energy. As long as I’m here, we will be.”

The solar project would cost between $25 million and $30 million to build, Baird said, while the ocean thermal plant would cost between $15 million and $20 million.

Those projects — and most other new initiatives wanting to come into the near-capacity facility — would require upgrades to the infrastructure at the lab, the roads and pipes that would make the developments possible.

The state plans to spend $1.3 million on improvements, including $312,000 for the construction of groundwater monitoring wells that could aid an incoming ocean thermal energy conversion plant.

The decision to put in new alternative energy sources comes as the state asks the Public Utilities Commission to allow it to move renewable power generated at one state facility to another over utility lines, a process known as intragovernmental wheeling, without incurring retail costs.

It could allow power suppliers at the lab to produce energy and sell it closer to cost, rather than retail price, to state-run facilities at the lab, as well as the nearby Kona International Airport. Combined, the two facilities use about six megawatts of power, Baird said.

That would help the lab meet its bottom line and lower the cost of water for its aquaculture tenants, who at the beginning of September saw an almost 20 percent jump in the price of water pumped from the ocean. Energy accounts for about 70 percent of the cost of that water.

“For the future of aquaculture at this site, it’s imperative that we cap our costs as much as possible,” Baird said. The intragovernmental wheeling plan could help do that.

About half of the 40 tenants at the lab work in aquaculture, lured to the site by seawater pumped from the ocean to the buildings that populate the facility.

On Sept. 1, its tenants began paying increased rates for the water, despite government subsidies of up to $365,000 to offset the cost of electricity needed to pump water from the ocean.

Baird sent a letter to aquaculture tenants, preparing them for the price increase. The new rate is an equation rather than a set number, 20.6 cents per 1,000 gallons with a surcharge for energy and a credit based on the level of water usage.

Those costs, combined with agricultural leases at $500 an acre, have some tenants contemplating leaving the lab, Baird said. “As their leases come up for renewal, that’s a decision they are going to have to make.”

The proposed power projects are not without challenges, namely getting power produced out of the lab and onto the utility’s lines.

When Sopogy first looked to install its solar project at the facility in 2004, it found that existing utility lines could not carry the amount of power it produced from the park to the main substation.

Sopogy moved to a lab location near the road connecting the facility to the airport and Kona, where utility infrastructure with higher capacity could take the power it produced. The company is in the process of negotiating a power purchase agreement with Hawaii Electric Light Co. Inc.

cwoolard@bizjournals.com | 955-8039


New York Times Sopogy

Hawaiian firm shrinks solar thermal power

It’s not as common as solar photovoltaic panels, but Hawaiian start-up Sopogy thinks small-scale solar thermal makes sense.
By Martin LaMonica
Staff Writer, CNET News.com
Published: September 14, 2007, 4:00 AM PDT

Hawaiian firm shrinks solar thermal power

Perhaps it’s not surprising that balmy Hawaii is home to a company that’s pushing the envelope of solar thermal technology.

Start-up Sopogy, based in Honolulu, has taken the basic design of large solar thermal power plants and shrunk it down so it can fit on a building’s roof.

What’s new:

Start-up Sopogy this fall will begin testing a solar thermal system that can generate electricity on-site, rather than in giant power plants.

Bottom line:

Solar thermal technology, or concentrating solar power, is getting more interest because it appears to be one of the more cost-effective renewable energies but it has not been commercially proven yet for distributed generation.

Demo models of its electricity-generating solar collectors–essentially metal half-pipes with a reflective coating–are now being tested with a Fortune 500 company and a few utility customers, according to company president and CEO Darren Kimura.

To expand, this fall the venture-funded company intends to raise an additional $9 million, which it hopes to secure by the end of the year, he said.

Concentrating solar power, or CSP, uses reflective troughs or dishes to concentrate sunlight to heat a liquid that flows through a pipe above the troughs. That heated liquid, which can be oil or water, is converted into steam to turn an electric turbine.

On Monday, start-up Ausra announced that it has received $40 million in venture funding to finance product development and construction of a large-scale 175-megawatt solar thermal power plant in California.

That’s one of many projects, such as Nevada Solar One, now being pursued in desert areas around the world. The customers are utilities, which need to boost the amount of renewable energy they generate to meet government regulations.

But Sopogy’s thinking small. Each individual collector produces 500 watts. That’s roughly what a house consumes, but strung together in an array on the ground or on a roof, these panels could supply a chunk of a commercial building’s needs, for example.

In a project in Hawaii, the company will be connecting several of its MicroCSP units together to generate one megawatt, according to Kimura. That plant, now in the permitting phase, is expected to go online in January of next year and be completed by late summer.

Photos: Concentrating on solar power in Hawaii Last month Sopogy signed on Avista Utilities, based in Spokane, Wash., to test the system in northern Idaho scheduled to be operating by next summer.

Coal or natural gas-fired power plants can generate tens or hundreds of megawatts. But utilities are looking at different options for power generation during peak times, such as the middle of a hot day, when the demand–and price–of electricity is highest.

“On balance, CSP has a huge advantage in most cases over say, wind, because it produces power when people need it the most,” said Alex Klein, an analyst at Emerging Energy Research. “CSP projects are effectively competitive at higher prices because they are generating electricity at peak times.”

Solar systems–both thermal and photovoltaic–also have the advantage of being modular, so as they are scaled up, the price per kilowatt tends to go down, Klein added.

Corporations such as Wal-Mart, which is installing solar systems in Hawaii and California, invest in renewable energy to lock in to a fixed electricity rate over several years, while spiffing up their “green” credentials.

Industry experts foresee wider adoption of solar thermal power plants in desert areas because, with government incentives, they approach the cost of power generation from fossil fuels.

The U.S. National Renewable Energy Laboratories estimates that solar thermal technology can supply hundreds of gigawatts of electricity, or more than 10 percent of demand.

Ausra CEO Peter Le Lievre earlier this week said that about 8,500 square miles could supply all of its electricity needs of the United States.

By contrast, Sopogy’s approach is to generate electricity on-site and in a wide range of environments, not just deserts. Apart from providing ample heat, coming from Hawaii gives the company an excellent test ground, Kimura said.

“Hawaii has a harsh environment. There are earthquakes, storms; there is salt water in the air (which can damage mirrors). Since it’s designed to work in Hawaii, it’ll work virtually anywhere in the world,” he said.

The company is using nanomaterials to coat the reflective troughs to make them more durable, he added.

Commercial customers can use the steam for purposes other than generating electricity, such as heating or cooling through absorption air conditioners.

The cost factor
An important piece of data still needed on Sopogy’s demonstration systems is cost per kilowatt in different areas and at different times of the year.

Right now, its system can produce electricity at somewhere between 12 and 16 cents per kilowatt-hour. That’s higher than fossil fuel sources of power, but Kimura expects the price to go down if products can be manufactured on a larger scale.

Emerging Energy Research’s Klein said that 16 cents per kilowatt-hour for a small-size CSP system would be compelling, although he’s doubtful it can be done now.

At that price, Sopogy’s MicroCSP system would be competitive with solar photovoltaic (PV) panels that convert sunlight into electricity, or concentrating solar photovoltaic technology, where lenses focus light on solar cells to boost output.

“It’s an interesting model because it does present a competitor for solar PV. But it depends whether they can demonstrate that they can compete on cost and ease of installation,” he said.

Another important consideration is the ongoing maintenance costs, noted Reese Tisdale, a senior analyst at Emerging Energy Research. Because there are few moving parts, solar PV installations tend to have a simpler maintenance.

Tisdale said Sopogy appears to have a unique approach in the solar thermal world. But other energy companies have shrunk down large-scale power generation technologies to a smaller scale. For example, Infinia is making a relatively small solar Stirling engine.

“It’s another alternative. I definitely think it’s worth exploring,” Tisdale said.


VENTURE CAPITAL AND DEBT DEALS FAVOUR SOLAR AND METHANE FIRMS
Clean energy firms go into the final four months of the year uncertain about the effect of this summer’s financial turbulence on the attitude of investors towards their sector. The signs from the last week were that venture capitalists, at least, have retained a strong appetite for renewable energy investments, with the solar sector the one most in vogue.
In the last few days, photovoltaic cell developer Plextronics banked USD 20.6m of Series B financing from venture capitalists, and started to plan how to spend the money on research and the expansion of its manufacturing operations.
Solexant, another PV cell maker, although one that uses nanostructures rather than printed organic polymers as in the case of Plextronics, said it had raised USD 4.3m in Series A funding from Californian venture capital firms.
Finally, Solarcentury, a UK based installer of solar systems, caught USD 27m worth of pre- IPO funding from blue chip funds including Zouk Ventures and Good Energies.
A fourth solar firm, Sopogy, which develops solar thermal electricity generation systems, is clearly confident that investors will continue to back its sector. It announced last week that it wanted to raise USD 9m in Series B funding during the autumn.
Sopogy says it aims to build projects in the USD 10m to USD 30m range, based on its parabolic trough solar technology.