Aug. 11 (Bloomberg) -- Solar Millennium AG, the German maker of solar-energy systems, is holding talks with U.S. operators of coal-fired power plants to sell them equipment for reducing fuel use, management board member Henner Gladen said.
The potential buyers, based in the southwest, would install its concentrated solar devices next to their power stations, he said in an interview. Gladen declined to estimate the size of deals or name companies in the talks.
“They are making their calculations on the price of coal for the next few years and deciding if it will be cheaper to invest in a solar field,” said Gladen, who’s also chief technology officer. The company’s 484-megawatt solar project approved in July by the state of California may cost $3 billion to build, according to a Bloomberg New Energy Finance estimate.
Solar Millennium develops and produces parabolic collectors that concentrate sunlight using arrays of mirrors to make steam and turn electric turbines. The U.S. southwest has some of the world’s highest solar radiation levels, and about nine concentrated solar stations have operated there since the 1980s.
The Erlangen-based company joins other renewable energy developers including France’s Areva SA that are targeting the market for solar-assisted coal plants. Areva, the world’s biggest builder of atomic reactors, is looking at South Africa and India, both of which are big coal consumers, to sell its concentrated solar systems, Anil Srivastava, who heads the French company’s renewable-energy division, said on June 10.
Solar-thermal plants are more competitive with power from conventional electricity in the sunniest parts of the world, such as the Sahara desert in Africa and the U.S. southwest, the International Energy Agency said in May.
Global installed capacity of solar thermal could reach 30 gigawatts by 2020, from about a gigawatt now, according to a study by consultant A.T. Kearney Inc. The U.S. has the most number of projects planned.
Solar Millennium, with a market value of 276 million euros ($356 million), rose 0.3 percent to 22.07 euros at 3:09 p.m. today in Germany as the Bloomberg Global Leaders Solar Index of 38 solar stocks fell 1 percent. That reduced the company’s lost this year to 38 percent. The index has lost 21 percent.
A lack of financing is holding back faster expansion of concentrated solar, Gladen said. Investment in solar arrays would be 30 percent to 40 percent cheaper if banks and lenders extended the duration of loans to 30 or 40 years, instead of the customary 20 years, and developers benefitted from higher production and efficiency improvements, he estimated.
The current generation cost for concentrated solar power in the U.S. is about 15 cents to 17 cents per kilowatt-hour. That compares with about 4 cents to 5 cents for coal-generated electricity for a kilowatt-hour, which typically can power a washing machine for 60 minutes.
“There’s lots of room for new financial tools, but banks are overcautious at the moment,” said Gladen.
Power from solar-thermal equipment may provide about 10 percent of the world’s electric needs by 2050 given support from governments, the IEA has said. By 2020, it will be able to compete on price with power from more polluting fossil fuels at times of peak usage during the day, the energy adviser said.
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