Powering Up with PV: An Interview with Martin Healy

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In October 2012, the Iraqi government announced plans for 400 MW of solar in Iraq at a cost of $1.6 billion, inviting a range of international companies to submit studies. One justification for this, aside from the obviously high solar irradiance that Iraq receives, was that the power plants would not require fuel, which would gradually offset the initial investment cost from the government.

This plan never gained momentum, but Iraq is now re-visiting this unexploited potential. Iraq’s 2018 Reconstruction and Development Framework envisioned over 400 MW over seven installations and while there are still obstacles to achieving this target (touched upon here) circumstances are much more favourable due to the rapid cost reduction in solar power since 2012.  

We asked energy expert and 2018 Iraq Energy Forum speaker Martin Healy to discuss some of the challenges and opportunities facing solar power in Iraq, with a particular emphasis on its range of applications across the region and how these might be applied in Iraq. 

IEI: When we talk about solar power as a solution for countries with high solar irradiation, high energy intensity due to AC demand and growing per capita income, it’s often simply discussed as “solar energy.” But that encapsulates an array of options for a country like Iraq and every arid country faces different choices when it comes to maximizing solar’s potential, ranging from combined cycle plants to concentrated solar power and using solar for enhanced oil recovery. Can you explain more?

MH: Yes, you’re exactly right. Iraq gets an enormous amount of sunlight, with high solar irradiation – or power per unit area received from the sun – and over 3,000 hours of bright sunshine per year.  Solar power should be considered one of Iraq’s greatest national resources and harnessed to the greatest degree possible.

As you note, however, not all solar energy is created equal.  Most people are familiar with solar photovoltaics (PV), which usually comes in the form of panels that include the PV cells and associated equipment that convert sunlight directly into electricity.  There are a few different types of PV, and costs are dropping radically as the technology gets much more efficient and manufacturing uses fewer materials and becomes more automated.  The problem with PV, however, is that you only get power when the sun is out.  So, you either need some type of battery to store the power for later use or build enough capacity into your grid to cover the periods of solar intermittency.

Another type of solar power is concentrating solar thermal.  This technology uses mirrors to focus the sun’s light on a working fluid, which creates steam that can be used directly as heat or to drive a turbine to produce electricity.  There are a few ingenious ways to do this, from sky-high solar “power towers” that concentrate light from thousands of mirrors on a collector tower to smaller solar troughs that focus light on a heating tube.  While not as cost competitive as PV in generating power, solar thermal comes with a unique ability to use and store energy in the form of heated fluids.  So, each form of solar power has its own unique advantages.

I particularly like the idea of solar power for Iraq because of its synergistic use with the oil and gas industry.  Studies have shown that nearly 10% of extracted oil is ultimately consumed in the process of oil production, transportation, and refining.  The oil should be conserved and monetized to the greatest extent possible.  Solar PV plants could help electrify most of the equipment at the wellpad through a microgrid, as well as powering part of the transport and compression along pipelines.

You mentioned enhanced oil recovery (EOR), or the process of reinjecting pressure into an oil well to increase flow.  U.S. company Glasspoint Solar is building a huge 1 GW EOR solar thermal facility in Oman, where aging oil wells need constant repressuring.  It’s basically a huge greenhouse, which protects the mirrors used to create the steam for the well.  The Glasspoint facility will produce about 6,000 tons of solar steam each day for thermal EOR operations when complete.  This will avoid the use of gas to create the steam.

Using natural gas with solar is even more complementary.  Gas plants can be started and stopped relatively quickly, and ramped up and down to efficiently match power demand, which works well to complement solar when there is no sun.  Solar thermal plants in particular can be integrated with combined cycle plants.  Both technologies essentially create steam to drive a turbine, and integrated gas/solar plants use a super-sized turbine to create more power.  Iraq flares an inordinate amount of natural gas and, if and when that gas is captured and used for domestic power, solar/gas hybrid plants should be built to provide the most efficient supply of power. 

IEI: In a recent report, Frost and Sullivan suggested Iraq may be able to install 5GW of solar by 2028. They calculated this might cost $50 billion (a figure which also includes 1 GW of wind power.) On an annual basis, that is more capital expenditure than Iraq currently injects into electricity development. What are the challenges for a country like Iraq, with high energy subsidies and a lagging legal framework for energy investment? Is solar any different to other sources of energy in this regard?

MH: I’ve seen the Frost and Sullivan report, and just to be clear the $50 billion investment figure is for all energy sources, from capacity expansion to desperately needed upgrades to transmission lines and substations. It’s a lot of money, but to properly build a modern network and get power to the people you have to address the impact of years of war on the grid. Iraq’s technical line loss is estimated at around 50 percent, so you essentially have to produce about two kilowatts of power to get a kilowatt of power through the lines to the end user.  Another 20 percent or so is lost to poor revenue collection.  Not very good economics.

The outlay for solar would be lower, but still substantial.  The model I believe Iraq is likely to use for a pure-play solar deployment is a feed-in-tariff with a power purchase agreement.  This offers a guaranteed rate per kilowatt hour for delivered power, with the companies responsible for building the facility per agreed upon project specifications.  So, the upfront costs for the facility would be borne by the company, not the government.  Iraq would meter the incoming power and pay a per kilowatt hour price to the developer over the term of the contract, typically fifteen to twenty years.  The key of course is to find the right rate per kilowatt hour to attract the best companies to do the job over the life of the contract while still providing affordable electricity.  A solar auction could help to find the right price point that works in Iraq’s unique situation.

There are certainly other more creative ways of financing a solar roll-out.  I mentioned that Iraq flares a lot of natural gas.  There is currently a gas-to-power plan proposed by the World Bank that seeks to capture that flared gas and allocate it for use in reconverted gas-fired plants using newly installed combined cycle gas turbines.  That network will cost billions, but the plan calls for an internationally benchmarked price for the gas that should attract enough private sector investment to build-out the network.  Maybe Iraq could use that opportunity to design a network that includes gas/solar hybrid plants.  Then you could increase the amount of power generated while deploying solar at scale for the first time, all through private financing.

IEI: In the absence of large scale solar power plants, Iraq has increasingly turned to rooftop solar and smaller applications of the technology, off-grid/ SAPS. This is not a new development– SEPCO solar street lights were used in Fallujah in 2007 and later, lit up markets in Baghdad. Do you see adoption of small scale solar as making a dent in Iraq’s growing supply deficit, in the absence of large projects? At first glance, some street lights or lighting for IDP camps may not seem like much, but when we consider new innovations–eg. Solar power for pumps and fans and even ATMs, could this be significant?

MH: I strongly believe the future includes rooftop solar.  One day soon, I’m convinced that any rooftop that is not paired with photovoltaics will be considered an underutilized asset.  The costs are dropping that fast, and innovation is turning everything from a shingle to a window into a solar power system.  Combine that trend with mobile phone payments and blockchain billing, and very soon you’ll have integrated neighborhoods running their own virtual power plants.  

IEI: One of the big challenges in Iraq has been improving transmission and distribution, with priority areas being larger towns and cities that can see high summer peak demand and subsequent instability when power cannot be supplied. By contrast, more remote communities are more expensive to supply, but the associated governance issue of low power supply, combined with the issue of rural-urban divide, adds a different dimension to instability risk. What is the advantage here of solar mini grids?

MH: Distributed solar is a very promising idea given Iraq’s challenges.

Right now diesel generators handle most of the off-grid areas, and they are used to power neighborhoods during frequent outages.  Diesel is an expensive fuel, and it costs quite a bit to purchase and transport the fuel to the generators.  The problem is that this fuel is highly subsidized, so the operators of the generators don’t feel the full economic cost.  It’s hard to introduce another power source when existing diesel is so cheap for the operators.

This could change by eliminating, or reducing, the subsidies.  Only when you have a real cost to the service can you introduce alternatives, like solar/diesel hybrid units.  These units have been introduced in many off-grids areas throughout the world and offer the reliability of diesel with low cost power from solar.

IEI: The cost of solar has fallen dramatically in recent years, it’s tempting to be incredibly optimistic about the future. How good can things get, or are there still big barriers ahead? For one thing, dust still seems to be a real challenge in some settings (although there are a growing number of innovations to combat this.)

MH: I’m bullish on solar in the future, mainly because of the plummeting cost and Iraq’s solar potential.  The levelized cost of energy (LCOE), which measures the full life cycle recovery cost of a solar installation from start to finish, has dropped more than 70 percent over the last decade for solar PV and is poised to drop more.  The game changer of course will be battery and other types of storage, which countries like the United States are already deploying at scale. Once you find a solution to the sun only shining half the day, it will be hard to justify not using solar power.

One area where I believe solar will face challenges is in land use.  PV solar farms need a lot of space, and it’s just not a long term option to cover a large amount of arable or otherwise productive land.  We’re seeing more communities in the United States and elsewhere pushing back against large solar farms, and that trend is likely to continue.  That’s when distributed solar will really take off, when the cost of land use for solar really starts to rise.

Another potential challenge is the sourcing of critical minerals necessary for solar, wind, and storage applications.  A 2017 World Bank report noted that the demand for certain battery storage minerals would need to increase by over 1,000 percent to meet the 2 degree global warming scenario recommended by the 2015 Paris Agreement.  However, about half the world’s supply of cobalt, an important battery mineral, comes out of just one country that faces governance challenges and conflict mineral issues.  How will that country handle the increased demand?  We may end up seeing the rise of cobalt-free batteries to get around dealing with the supply uncertainty, but then we’ll still face challenges with lithium, rare earth elements, and other minerals.   We need a stronger push worldwide to promote better extractive practices and help these countries to deal with future demand, not run away from them.

Dust and particulate matter is indeed a problem, and the cost of frequent cleanings can be prohibitive.  But I see scientific innovation coming to the rescue here as well.  Electrostatic fields, for example, are being considered to charge dust particles to sweep them out of the way, and advanced coatings may make cleaning panels more efficient.

The views expressed in this interview are those of the authors and do not necessarily reflect the official policy or position of any other agency, organization, employer or company.

IMAGE CREDIT: WORLD FINANCE

Guest Contributor

Martin Healy works at the intersection of renewable energy and U.S. foreign policy. A member of the U.S. Foreign Service, he focuses on Iraq domestic power issues and serves as the U.S. alternate representative to the International Renewable Energy Agency.

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