Beyond Zero talks to Dr Fred Morse of Abengoa Solar and CSP division SEIA

Dr Fred Morse is a veteran of the solar industry.  He started out in solar assessing the viability of the resource for Nixon, helped save the industry when a report by the NRC at the time was trying to close down the US Department of Energy Solar programs and he now is pushing forward with Abengoa's Solana plant and the industry in general as head of the CSP division Solar Energy Industries Association.  Dr Morse speaks to Matthew Wright from his home in the USA - Originally Broadcast 100323

Beyond Zero talks to Dr Fred Morse head of the CSP division Solar Energy Industries Association

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Matthew Wright:  Welcome to another edition of the Beyond Zero show, broadcast around Australia on Community Radio from the studios of 3CR Melbourne. Beyond Zero is produced by the campaign centre Beyond Zero Emissions. And we’re a not for profit non-government organisation that works on reducing climate change and solutions to global warming. I’m Matthew and today Scott is having a break. 

So on today’s show we’ll be talking to Dr Fred Morse, and he’s the senior adviser for US Operations for Abengoa Solar Inc. Dr Morse first became involved in renewable energy issues in the late 1960s when he served as executive director of the White House Assessment of Solar Energy as a national energy resource(?). In his work at the US Department of Energy, he played a significant role in defining and managing major solar energy research and development programs. Dr Morse was the chairman of the Western Governors’ Association Solar Task Force, was a member of the New Mexico CSP Task Force and is the chairman of the CSP Division of the US Solar Energy Industries Association. Dr Morse is a graduate of Rensselaer Polytechnic Institute, received an MS in Nuclear Engineering from Massachusetts Institute of Technology and a PhD in Mechanical Engineering from Stanford. So, it’s with great pleasure that we have Dr Morse on the line from the US. Hello Dr Morse.

Fred Morse: Hello. It’s a pleasure to be with you.

Matthew Wright: Thank you. Thank you. Now, you’ve got a very long association with renewable energy. Now, we have spoken to some real old veterans, some people who started in wind power in the UK with the Central Energy Generation Board, but I think you’re possibly the longest, and I believe that you started back in the ‘60s. Can you tell us a bit about yourself and how you got interested in renewable energy or solar?

Fred Morse: Sure, I’d be happy to, but I’d like to point out an Australian with the same name - but Roger Morse from CSIRO - was actually somebody working in this field when I first started. So I think the pioneer award goes to an Australian.

I was teaching at the University of Maryland in the ‘60s when President Nixon, in 1969, asked if solar energy was relevant to the US. A very interesting question. I was asked to gather a group of people to write a report to answer his question, which I did, and that started my career in solar energy.

Matthew Wright: And what happened in those first years – in the ‘60s and ‘70s – what sort of solar programs were getting up?

Fred Morse: Well, what happened was President Carter, who believed in this technology, he in fact had a water heating system installed on the White House. He was even brave enough to heat the inauguration stand for his inauguration, which your listeners may want to know, takes place on usually [laughs] the coldest day of the year. And, although it didn’t provide an abundant amount of heat, it showed his commitment.

So the Carter years in the early ‘70s were very, very good for solar energy. The oil embargo, I think in ’73, stimulated a lot of interest by the Congress and many, many programs started. And as I said, we did come to Australia more than once to see the excellent work done by CSIRO.

Then President Reagan came along, with really not a great love for –  in those days it was called alternative energy – and pretty much the programs declined during those years. The policy supports were removed and a lot of the work that was started phased down. But what happened after that was the realisation that in addition to energy security, and in addition to just using a domestic resource, the environmental issues became clear – clearer – and people started to say why not use our domestic resource, which helps us with security, and it provides energy benefits. And what’s happened more recently is the jobs and the economic benefits. 

So, solar energy, while it started out as an energy resource issue, became an energy security issue, became an environmental issue, and now is an economic issue. And it really took all four of those to allow solar to become as relevant and as active as it is today.

Matthew Wright: Now, one big milestone was the building of the large Mojave Desert solar thermal trough plants, and can you tell us what conditions led to the company Luz building those during the Carter years?

Fred Morse: Well actually it was a – you know, policies make markets – and the Federal Government and the State of California had policies that allowed Luz to build these plants commercially. They were privately financed and they started in the mid-‘80s, and the last one was built in the early ‘90s. They sold their power to a big utility company in California. They were and they are highly successful. They are - their capacity is 354 megawatts. They have been working for on the average of 25 years. They work better today than their first day in operation because of the very good maintenance and upgrades that have been made, so they really have been a tremendous success.

Policies make markets and policies kill markets. In the early ‘90s the policy supports were removed for a variety of reasons. Luz as a company ceased to operate, but the plants that they built, all owned by private owners, continue to function today.

Matthew Wright: And, you did say those plants are working better today than they were when they were first installed, and I think that’s a really important point. Also, weren’t they for many years the biggest solar installation in the world?

Fred Morse: They were, and they are. And, you know, there are many, many flavours of solar energy. There’s solar water heating; there’s solar cooling; there’s photovoltaics. I’m talking about solar thermal electricity generation where you use, where you concentrate the sun’s energy to achieve high enough temperatures to generate high temperature, high pressure steam and you feed that into a steam turbine the same as you would from a fossil plant.

So that’s the technology. And the reason why it’s working better today is that we’ve been able to upgrade some of the key components based on the successful research that was done over the last decade or two.

Matthew Wright: And when did you yourself move from generally looking at policy and technical details for government into a focus on solar thermal?

Fred Morse: Ah, [laughs], it’s an interesting question. I was doing general policy work and around 2000 there was a study done by a very influential organisation in the United States that basically said solar thermal power really didn’t have a market and it didn’t have potential and it really didn’t deserve government R&D funds. The industry mobilised around that threat and I was hired to help rebut that, and that got me back into the solar thermal power field.

I was then hired by the Department of Energy to go around the south-west of the US, the only part of the country where this technology would work well because it needs high desert solar radiation - which you have a lot in your country as well – and I raised the awareness of governors and utilities and policy makers so that when the environmental issues emerged strong, the states took the lead. And it was California and Arizona and others where they passed laws that required a certain per cent of new generation to be green, and some even said a portion of that has to be solar. And that was the policy that opened up the market for this large scale concentrating solar power.

And the [indistinct 10:06] plants, the plants in the Mojave, 354 megawatts, we’re now in the US up to about 430 megawatts but we have another 8000 megawatts with signed contracts with utilities who say if you build it, we will buy the power for 20, 25 years. So there’s been some growth, but the real growth is still head of us.

Matthew Wright: And now, you mentioned a study from the National Resource Commission, I think it was, that said that solar wasn’t viable and, I guess, was advising to scale down the US Department of Energy solar research programs. Can you tell us about the response to that, and I think that NREL and Sandia National Laboratories commissioned a company called Sargent & Lundy to review their internal numbers, and how that went?

Fred Morse: Yeah. Well, the report, as I said, said three things. The report I think was deeply flawed, it was not well done. It said that the technology didn’t have a market; that there wasn’t an industry; and that research would not help bring the cost down. And so the Department of Energy hired Sargent & Lundy, which is a large engineering company, to do a due diligence study and answer the question: what is the cost potential reduction for CSP, concentrating solar power, for the trough design or the power tower design. 

And their study showed that both of these technologies had tremendous cost reduction potential – about 25 per cent of that coming from research and development, about 25 per cent coming from scaling up to a larger size, and about 50 per cent coming from just the learning that goes along with all new technologies. And that report was pivotal in stimulating another report by the same organisation that basically reversed the conclusions of the first report.

So the Department of Energy was never able to terminate that program –  Congress kept it alive. And now the Department of Energy is completely behind this technology – very supportive, funding a lot of research on innovative ways to store energy and reduce the cost.

Matthew Wright: In the ‘80s and ‘90s I guess with low oil prices, was it that the conditions weren’t right for solar thermal?

Fred Morse: Correct. Correct. Solar thermal, as I said, makes steam. I’m sure that your listeners know what you do in a nuclear power plant or in a coal power plant – you simply boil water and it makes steam. So, just as you can with a magnifying glass, burn a hole in a piece of paper, by concentrating the sun’s rays you can certainly generate steam and run a conventional power plant. So the problem in the ‘80s and ‘90s was that the price of conventional fuel, at that time coal and natural gas, was very low and a solar thermal power plant has no fuel cost, but it does have a high initial cost because you basically, once you build the plant, you have all the fuel for the 30 or 40 years of the design life.

If you had to buy 30 or 40 years of coal, along with your coal plant, the price might be quite a bit different. So CSP plants were really unable to compete against the low price of conventional fuel. But over the years those prices have increased, that is brown electricity prices have gone up, and CSP prices have come down. And now they’re close enough to where utilities are willing to buy the power from these plants, at a slightly higher price, but there are many, many benefits that come with it. It’s zero emissions; it’s hedge against future carbon policy; it’s a hedge against drought; it’s a hedge against natural gas price fluctuations; and it’s attractive enough to have sold the output of over 6000 megawatts of CSP [indistinct 14:57].

Matthew Wright: Our guest today is Dr Fred Morse, and he’s the senior adviser of US Operations for Abengoa Solar. And importantly, he’s the chairman of the CSP division of the US Solar Energy Industries Association. Now, we were just talking about that ability to get steam. Now, something that’s really come of age now is the addition of storage, and most of the major vendors are looking at using, initially at least, molten salt – so, industrial fertilizer. Can you tell us how that really changes the framing of the debate? The fact that these plants can do baseload and we can – I don’t know about the United States – but here often people who are fighting against, say, renewable energy - there aren’t that many of them, but they are out there – they often say: oh, there’s a fossil fuel plant backing it up. Or, they have all sorts of excuses to try and diminish the value in the public space of solar and wind, and things like that.

Fred Morse: Yes. Well I’m sure your listeners know that the sun comes up in the morning and it goes down at night. But they know that activities start before sunrise and continue well into the evening and into the night. So, solar energy, without the ability to store the energy in  a cost effective way, is limited to providing peaking(?) power, and you’re right – there’s got to be a, you know, power plant somewhere to handle clouds and rain and night time.

Solar thermal technology, CSP technology – because they’re thermal, because they use the sun to heat a fluid – you can store that fluid in a thermos bottle, or like a thermos bottle. And so the way it works is you make the solar field a little larger. Some of the solar field provides the energy that’s needed in the daytime, to make steam and run the steam generator – I mean the steam turbine. But some of that energy is stored, and the storage medium is a molten salt. It’s an industrial, as you’ve said, it’s like an industrial fertilizer. It’s a rather common material and it has a very high heat capacity and other properties. So you can imagine taking that energy that you collect in the daytime, that you don’t need, and storing that.

And when the sun goes down, you simply transfer that energy out, generate steam with it, and the steam turbine does not know at all that the sun went down. It doesn’t know that a cloud passed over the plant, and the people who count on running their air conditioner at night, on a hot summer day, or using electricity on a cold winter morning, that could all come from the sun. And it’s completely changed the value of solar thermal power in the minds of the utilities.

Matthew Wright: And initially in the United States there’s a lot of talk about using them for peaker(?) plants for the mid to late afternoon and evening peaks.

Fred Morse: I would say that thermal storage, the use of thermal storage, is still in its infancy in the US. There is a plant that my company, Abengoa Solar, is designing now for the Arizona public service market that will have six hours of thermal storage. Some of the utilities – either they’re on the coast and they don’t have that very high peak demand in the evening, or they have other resources in their system, hydro for example – they’re still looking at solar as a way to displace the peak load.

But as thermal storage becomes more and more widespread, then solar will become an intermediate resource. And once the economics makes sense – then/mean(?) technically you can run a solar thermal power plant, a CSP plant 24 hours(?). It’s been proven, it’s technically certainly feasible, but it may not make economic sense if you have much cheaper energy sources, baseload, nuclear or hydro, or a coal plant which generally would operate at a lower price.

So as the storage becomes more widespread, and adding more and more hours of storage makes economic sense, then I think you’ll start to see CSP as an option to baseload power.

Matthew Wright: Now, we were talking about the Sargent & Lundy report, and one of the findings in that is that after a considerable installation of troughs and towers, eventually towers potentially have a lower price point than troughs. Now, I’ve noticed that many companies, such as Solar Millennium and Sinair(?) and quite a BrightSource are moving towards towers, or have plans to go to towers. Do you think that there’ll be an eventual move to towers? And will that be in decades, or will there be a wave of troughs, and companies like Abengoa that have tower solutions will move quickly to towers?

Fred Morse: Well, in many ways, that will be controlled a lot by the banks who will have to finance these projects and will always ask questions about performance and risk and, you know, ‘how do I know?’ Troughs right now - because of the plants in the Mojave and a lot of new ones in Spain - troughs are generally considered commercial by banks, and they’re willing to lend money to plants that are using that technology.

Abengoa Solar has built the world’s first two commercial power tower plants in Spain, and there are quite a few companies that are signing our purchase agreements for power towers. And the attractiveness of the power tower is that it operates at a higher temperature, which means the conversion to electricity is more efficient, and it certainly has the potential for lower costs, which the Sargent & Lundy report showed as well.

I think – well right now – the US market is almost 50 per cent trough and 35 per cent tower and the rest is [indistinct 21:58]. And that’s on the signed power(?) purchase agreements. So I think the market is, you know, sort of hedging its bets. I think that troughs will continue in the market. A tower is a tower: a tower is highly visible. You have questions about air space, you have questions about visual impact, and while I think there are many, many places where a power tower could be cited, it’s a different situation than a trough which has a rather low profile.

Troughs will get to higher temperatures, and I think it’ll be very interesting – it’ll be an interesting horse race to see how that plays out. I definitely think you’ll see more towers in the future, but I don’t think you’ll see a loss of the trough technology in the markets, certainly not for a very long time.

Matthew Wright: Now in Spain there’s been a huge rush to solar, in fact, there’s about $A20 billion, so I guess about a similar amount US, maybe $US15-18 billion, worth of plants that are set to be constructed over the next few years. Is the US sort of losing ground to countries like Spain? And why is it that they’ve managed to really get going and have trough plants under construction all over the place? And they’ve got thermal storage so many of them are running 24 hours in summer. And the United States has a lot in planning but nothing has broken ground.

Fred Morse: Yep. What did I say earlier? Policies make markets. Spain had a very effective policy called the feed-in tariff. It was used for wind, it was used for photovoltaics and it’s used for concentrating solar power. And as a result of that very favourable policy – and we don’t have time to talk about what makes it so favourable – but, trust me, it is very effective. It allowed the Spanish companies, primarily, and some other companies to start to build trough plants(?), some with storage, you’re right.

I think the US has a much larger market potential, and I think the US will very quickly catch up to Spain, and will surpass Spain in the installed capacity. But certainly their very good policy allowed them to start a lot quicker. I mean, we started with the six(?) plants in the Mojave and then policies went away and we stopped, and they came back with this very effective policy and you see what happens.

Matthew Wright: Now there’s something like ten to twenty plants that could break ground this year, and I think there’s some federal stimulus money. The first amount that’s been announced, I think $1.8b for BrightSource. Can you tell us – we’ve got just a couple of minutes now – can you just tell us a bit about who’s likely, or how many plants are likely to break ground, and how many more announcements around federal loan guarantees and the like will there be by the end of the year?

Fred Morse: Well, the Bright Source announcement was certainly cheered by the CSP industry. They are the first of the CSP plants to get a loan guarantee. The loan guarantee gives them access to long term, low interest money, which is important to finance these plants.

There are many more developers who are working through the loan guarantee process. It’s very difficult for me to guess how many will get through that. But once you have a loan guarantee in your hand, you still have to finance the rest you need – that’s only for debt. You have equity; you have to permit the site; you have to get your transmission connection secure; then you have to build a plant and start operating.

So the loan guarantee is a very important step along the way, but it’s not the only one and it’s very difficult for me to guess. Personally I hope that you’ll see quite a few projects starting construction this year, and I think that’s very possible, but the numbers are very hard to guess.

Matthew Wright: Great. Thank you very much Dr Morse for joining us and sharing your knowledge with our listeners today.

Fred Morse: It’s been a pleasure. Thank you for inviting me.

Matthew Wright: Thank you.

Fred Morse: Goodbye.

Matthew Wright: And that was Dr Fred Morse, and he’s a senior advisor of US operations for Abengoa Solar – and they’re the company that has those beautiful looking solar power plants. If you do a search on the internet for PS10 or PS20, PS10, you’ll be able to have a look at photos of those.

He’s also, importantly, the chairman of the Concentrating Solar Panel Division of the US Solar Energy Industries Association. And if you’d like to hear that interview again it’ll be podcast at the 3cr.org.au website and the Beyond Zero Emissions website.