PG&E orders photovoltaic plant

By Richard Waters in San Francisco
Published: August 14 2008 22:21

PG&E, a California power company, has placed an order for what are believed to be the world’s two biggest photovoltaic solar farms, giving a strong endorsement to a technology that few power generators have yet considered to be ready for utility-scale use.
Between them the two farms, due to come on-stream in 2010 and 2011, are planned to generate 800 megawatts at peak capacity, or more than the 750 MW of the entire photovoltaic grid capacity in the US at the end of last year.

The largest of the plants will cover nine square miles of farmland and produce 550 MW of power at its peak, making it “an order of magnitude” bigger than anything else built or in planning around the world, according to OptiSolar, the company that has been contracted to build the farm.
Photovoltaic systems, which use solar cells to turn sunlight directly into electricity, have been considered too inefficient for utility use, though advances in new materials have steadily brought down the cost per watt of power generated.
Most of the big utility solar projects have instead used concentrated solar thermal technology, which relies on large mirrors to focus the sun’s light to heat water.
The fact that power can only be generated during hours of peak daylight, making it hard to match production with demand, has also reduced its attractiveness as a source of power for electricity grids.
PG&E has already contracted for 1,700 MW of solar thermal generating capacity, while Southern California Edison recently announced an unusual plan to build 250 MW of photovoltaic capacity on its customers’ roofs. The rapid expansion of solar capacity in California reflects a state mandate for local utilities to produce 20 per cent of their energy from renewable sources by 2010.
OptiSolar and Sun Power, which is to build a separate 250 MW plant, said they were prevented by confidentiality agreements from discussing the economics of the plants, and in particular the all-important cost-per-watt of the power produced. However, the companies claimed the contracts were evidence of a leap forward in the efficiency of their technology.
“This is the first time that photovoltaic solar is becoming cost-competitive with other renewables,” a spokesman for OptiSolar said.
PG&E said the projects were dependent on the extension of the US federal tax credit for renewable energy.
Legislation to extend the existing credits, which expire at the end of this year, has so far stalled on Capitol Hill. The solar farms also need local environmental clearance.
Copyright The Financial Times Limited 2008