First Solar: Solar pioneers
First Solar believes its PV solutions could be right for the region.
There have been a few casualties in the solar industry in recent years, but one company that’s still going strong is First Solar. Founded in 1999, it claims to be the world’s leading PV solutions company, with the ability to manufacture panels, execute projects and broker financing for solar plants.
First Solar has designed and constructed more than 1.5GW of PV power plants, including plants of 500MW in size; it has a contract pipeline of around 3GW; and has helped arrange project financing of around US $9 billion. Now, the US company hopes to provide its solutions to the myriad of solar projects planned and underway in the Middle East.
Helping to spearhead the company’s drive into the Middle East are Ahmed Nada, the company’s VP of business development for the MENA region, and Matt Merfert, EPC project director, Middle East and Africa.
Nada joined First Solar in January 2013, bringing two decades of experience in the energy and power sectors, including 14 years with GE. Merfert joined First Solar in 2009 and has now managed more than 20 utility-scale solar PV projects.
The company has already registered its first breakthrough, having been selected as the EPC contactor for phase one of Dubai’s Mohammed bin Rashid Solar Park. If the 13MW implementation is a success and GCC governments go ahead with their announced plans, First Solar hopes to be doing a lot more in the region in the future.
“We feel we are extremely strongly positioned on the basis of this pilot plant execution to perform more projects in the future…larger plants and to install them faster,” says Merfert. “We can provide any energy solution in the PV space: project finance, project development, EPC services, OEM services… everything from the module to the plant. We feel very well positioned.”
With his broad experience in the region, Nada is well aware of the factors that would facilitate solar adoption. He is very confident that there is an understanding of those factors and a willingness to address them. “Of course, there is legislation that needs to be adjusted,” he says, referring to the need to create the necessary legal frameworks for IPPs. “Some programmes will engage the private sector, so legislation needs to be changed to accommodate independent power producers.”
Morocco, for example, has issued a law allowing private owners of solar plants to sell energy to consumers. Abu Dhabi already has IWPP models in place to allow private sector partners to own stakes in utility projects. DEWA, which has a utilities monopoly, has recently stated that legislation already allows public-private partnerships in power generation projects.
Another factor that would need to be addressed, in some countries, is grid stability. “It is the ability to manage the power coming in at different times of the day, from different locations and being able to dispatch that correctly such that the grid remains balanced,” explains Nada.
In principal, there are many reasons to like solar. Sun is plentiful, free and doesn’t produce carbon dioxide. Set against that are the up-front costs of developing solar plants and, in the Middle East, the fact that oil comes out of the ground so easily.
Nada says that while there may be little direct cost in burning oil to generate power, there is a significant opportunity cost. “When you burn oil, the direct cost is not very much, but you could be gaining so much more by selling that on the open market,” he says.
So, rather than taking oil out of the ground and burning it in a utility plant, regional governments can now sell it for $100 a barrel or use it to make products like plastics. What, however, about the cost of building plants and producing each megawatt hour of power?
“The economics of solar today, if you exclude subsidies, are becoming extremely competitive,” argues Merfert. “We are coming close to parity with the grid.”
The true costs of power generation also need to be understood, he says. So don’t just look at the initial construction and activation costs, but consider the cost of running the plant over 25 years.
“You have no fuel costs for the entire lifetime of the plant,” Merfert continues. “Your traditional equation of capex [initial capital expenditure on the plant] + opex [ongoing operating expenditure] + fuel reduces to capex + opex.
“In a typical PV facility, opex is extremely low. We have no combustion, we have no rotating machinery, we have no large centralised turbines, or high temperature or high velocity rotating parts, which means that the maintenance is also very low. Fuel is free and opex is far reduced, so the main investment is the capex, which is why project finance and the other variables of how to pay greatly impact the cost of electricity coming out of that plant.”
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First Solar’s focus is squarely on PV and it believes that its cadmium telluride solutions are ideally suited to the Middle East. Its solar panels have been subjected to various high heat, dust, humidity and sand abrasion tests. According to Merfert, the company’s products will also generate about 10% more energy than competitors’ solutions.
“The series 3 black module [the company’s latest panel] passes all the tests beyond the minimum requirements,” says Merfert. “I think we’re one of the first to go above and beyond the requirements that are specific for the harsh Middle Eastern desert.”
“Our plant includes very advanced plant level controllers. This allows large PV plants to be integrated into grids reliably.”
Further making its products suitable for the region, Merfert says, are their ability to perform in both clear and hazy conditions, unlike CSP, which benefits from direct sunlight. Tests going on at phase one of Mohammed bin Rashid Solar Park indicate that conditions are often hazy in the region. “We can harvest both direct beam and scattered light, so that makes our technology a very good fit for the region,” Merfert explains.
Going forward, First Solar believes that PV will increasingly be the technology of choice, even for utility-scale plants. “We do not have data to comment on the ultimate efficiency of CSP compared to PV, but the cost of PV has reduced significantly since big decisions were made on CSP some years ago,” says Nada. “Anyone wanting to look today at new solar programmes cannot ignore the significant cost changes that have happened in PV and the significant efficiency changes in PV.”
Back to First Solar’s first project in the Middle East, phase one of the Mohammed bin Rashid Solar Park, work is underway and, according to DEWA, on track. Merfert and Nada are keen to stress First Solar’s commitment to having as much local input as possible into the project.
The company says around 50% of the value of the plant was procured locally, including transformers, conductors and steel racking. Two local sub-contractors are also being used for the installation of the works. DEWA engineers and operators are being trained to understand the workings of the plant. Internships are also planned and a memorandum of understanding was signed to send DEWA engineers on courses to achieve the Solar Energy Engineering and Commercialisation Certification (SEEC).
“Rather than being an international company that imports all the technology and all the knowledge, we’re placing a strong emphasis on localisation,” says Merfert. “That includes not only the manufacturing of the goods, but also the knowledge based portion of the plant.”
For the Middle East, and First Solar too, it’s still too early to tell how solar energy will fare in the Middle East. Should utilities go ahead with their plans, however, the company will hope to be one of their suppliers of choice.
First Solar’s big projects
Desert Sunlight Solar Farm: 550MW(AC); Desert Center, California
Topaz Solar Farm: 550MW(AC); San Luis Obispo, California
Stateline Solar Farm: 300MW(AC); San Bernadino County, California
Agua Caliente Solar Project: 290MW(AC); Yuma County, Arizona
AV Solar Ranch One: 230MW(AC); Los Angeles County, California