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SoftBank Group and Saudi Arabia plan to spend $200B building a solar power plant

170 points| doppp | 8 years ago |techcrunch.com | reply

94 comments

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[+] lewis500|8 years ago|reply
I always look for the surprising angles in a development of this kind: the knock-on effects. Given 200GW of capacity, in Saudi Arabia, on some days there will be endless electricity.

What I'm thinking is that this will lead to innovation in industrial processes that can productively use a lot of energy in a 4-8 hour window...something you can turn on in a big way and then turn off. Such a process effectively "stores" the energy in the product. The larger the electricity share of such a process, the closer the marginal cost gets to zero during sunny times.

Most modern industrial processes aren't like that: either they're not very power constrained (e.g., a toy factory) or they need the power to be on for a while (e.g., a steel mill). But then again it makes sense these are the types of processing we've perfected, since that's the kind of power we've hard so far in large quantities (coal, nuclear).

Does anyone know of products that can be made quickly by the application of raw energy? I don't know how desalination works, but (just as an example) if there were such a desalination process then Saudi Arabia could desalinate tremendous amounts of water and store it...or even export it to neighbors.

I am not so excited about the idea of a fundamentalist monarchy---one that is helping starve the poor Yemenis---getting even more power, but I am excited about the downstream innovations the fact of nearly-free electricity could potentially create. If SA invents such processes, then they could be copied in other places.

[+] Robotbeat|8 years ago|reply
To search for ideas of what would be a good candidate for soaking up excess electricity, look at capital cost per watt consumed:

For instance, if I have an efficient computer system that costs $100 for every watt consumed, it's not going to make sense to run it only during that 20% of the time there's excess electricity. The effective capital cost is then 5 times greater. I'd be better off investing in a battery and extra solar to allow it to run it 24/7.

But if, instead, I have something which has incredibly low capital costs, like 10 cents per Watt consumed, and which can tolerate being shutdown and restarted, then even though it might only be operating 20% of the time, the effective capital cost is still just 50 cents per Watt, even cheaper than a battery capital cost. So it makes economic sense to use that to soak up the extra electricity demand.

This is why the key for hydrogen electrolysis isn't so much efficiency but capital costs: a variable-renewables-heavy grid will have enormous amounts of excess electricity at times, but only for fairly brief periods. You can't economically "store" that electricity using hydrogen if your electrolysis capital costs are so high you need to run your electrolysis cell 24/7!

If you want to make the hydrogen economy a reality, FORGET about hydrogen cars. Focus on hydrogen electrolysis capital costs!!!

[+] Retric|8 years ago|reply
I suspect the best option is pumping sea water up the sides of a mountains in the south west for pumped storage. Except rather than then using it to run generators they use that same pressure to operate desalination plants 24/7.

Reverse osmosis uses (600–1200 psi) for seawater = 1400 to 2800 feet of elevation which is taller than what they have available, but sill very viable. Further, as reverse osmosis already needs to pump salt water to high pressure the only change is simply slightly larger pumps and a big pit plus some piping for massive amounts of energy storage.

[+] onetimemanytime|8 years ago|reply
Great point. They're not doing it to save the world or anything, they see dollar signs. As you said, they'll desalinate enormous amounts of water, and that is life.

While $200b is about $200b more than virtually all of us have, all the Crown Prince has to do is hold another Ritz Carlton party. This time they know he's serious so they'll pay in a few days.

[+] credit_guy|8 years ago|reply
Aluminum smelting.

Desalination is a good idea too, but instead of selling the water they could use it to grow forests and then sell carbon credits.

[+] Faark|8 years ago|reply
Crypto mining?

More seriously, it will boots/create R&D for actual energy storage. Storing it in products might be nice early one, but having application neutral (renewable) energy available whenever for whatever we want seems like an unavoidable trend.

[+] jlebrech|8 years ago|reply
on good days they could pump water into silos
[+] SSLy|8 years ago|reply
>Does anyone know of products that can be made quickly by the application of raw energy?

Chipsets?

[+] ggm|8 years ago|reply
I believe it won't be one organic unit of power at this scale. it will be sub-multiples, ganged up in ways which make it both more resilient, and more useful. It will almost certainly be distributed too, because thats how you make a power system resilient against local constraints. So, calling a 'power plant' instead of 'several discrete power plants' is probably headline-ese.

(the solar furnace pictures I've seen in other places tend to have more than one unit of target, and storage, and production)

I believe over-capacity is common in these kinds of things, to ensure a lower sub-multiple of the book power is available so this power budget could be written to lossy storage, or be a huge oversupply to sell at profit on the spot market with loss on transmission but have reserve powers to meet local demands. Or for things like desalination or industries which need high energy inputs. An Aluminium smelter in Australia is looking to use PV to drive some of its costs down. Thats a huge 24/7 power burden, but the thermal mass in the pot-line behind smelting can act as a power buffer, so it may be a dual use proposal in some ways: make power which has loss risks, find uses which can buffer them, have hysteresis, then sell what you can beyond the committed reserves you can store.

Saudi is diversifying away from an oil economy so its possible this is a sign of that, seeking cost and revenue outcomes which decouple the state budget and revenue streams from oil price shocks.

[+] adventured|8 years ago|reply
> Saudi is diversifying away from an oil economy so its possible this is a sign of that, seeking cost and revenue outcomes which decouple the state budget and revenue streams from oil price shocks.

They ultimately have no choice but to get very aggressive, very soon, if they want their nation to survive.

Their population has doubled since 1990 and tripled since 1982. They're adding about 800k-900k new people per year, which is a lot on their base (about double the rate of Australia, which is growing solidly from high immigration).

It's going to be essentially impossible to maintain their standard of living - which is comparable to the Czech Republic, upper mid tier - if they don't come up with a replacement for domestic oil consumption. Long before oil starts to decline globally, the Saudis will be destroying themselves economically through domestic population demands on their energy exports (that has already become a problem, not yet critical though).

This and nuclear tech, are the two ideal ways for them to ensure a maximum amount of oil is available for export in the coming decades.

[+] mjrpes|8 years ago|reply
To put 200 gigawatts into perspective, the largest US nuclear power plant generates 4 gigawatts. The US total generating capacity in the summer is 1000 gigawatts.
[+] rgbrenner|8 years ago|reply
You cant compare nameplate capacity to actual energy production. You have to adjust the nameplate capacity by the capacity factor first.

It's almost certainly PV.. because the price -- $200B for 200GW -- matches perfectly the current price of a new utility scale PV plant ($1/Watt). Those plants have a capacity factor of 10-30%. It'll probably be close to the 30%. So that would reduce the 200GW to 60GW.

[+] venning|8 years ago|reply
"Son" is mentioned twice in the article with no reference to who that is. Masayoshi Son is the man standing on the left in the photo. According to Wikipedia [1] he is founder and CEO of SoftBank.

[1] https://en.wikipedia.org/wiki/Masayoshi_Son

[+] Cyph0n|8 years ago|reply
I knew about SoftBank but not its founder. He seems like the Japanese version of Buffett... I also somehow assumed that SoftBank was an older company.
[+] dav43|8 years ago|reply
Given the solar profile during the day, I’d suspect a large amount of desalination occurring at peak times. Saudi Arabia is worlds largest desalination user/generator.
[+] Brakenshire|8 years ago|reply
Would be interesting to know what percentage of desalination costs comes down to energy, and what percentage to fixed costs for building and then maintaining the equipment.
[+] raverbashing|8 years ago|reply
Sounds like a good variable load which is "kinda like" storage

Of course solar does not work at night, still, even if it's only peak time abatement it works

[+] mrb|8 years ago|reply
The average cost of a solar power plant is $1 per watt. So this budget would build a 200 GW plant. It would satisfy 10% of the world's demand of electricity. This is huge!

Edit: taking into account the capacity factor it would really only represent 3%; still impressive though.

[+] rgbrenner|8 years ago|reply
You didn't count in the capacity factor for solar.. which is only 10-30% (depending on the type of solar plant they build).

So best case, 200 GW will only produce 525 TWh annually. This is equivalent to a 66 GW nuclear plant (nuclear has a 90% capacity factor).

Out of 20000 TWh electricity produced globally, that's only 2.5%.

[+] venning|8 years ago|reply
> It would satisfy 10% of the world's demand of electricity.

That doesn't sound right. According to the (better) article from Bloomberg [1], "Saudi Arabia’s electricity generation capacity ... stood at 77 gigawatts in 2016", which that article points out is a third of this new project's.

I don't work in electrical production, but I don't think this capacity will work for 10% of the world. Wikipedia [2] agrees with your assessment of ~2300GW for worldwide average production; but I think the problem is how an average production number is calculated as compared with quoted output numbers for a given installation.

EDIT: Hmm, if Saudi Arabia produces ~3.3% of the world's electricity currently, then maybe this does represent enough for a substantial percentage of the world's population, assuming the production and capacity numbers are comparable. (Deriving 3.3% from 77GW of 2311GW, which I recognize come from different years.) Anyone who knows more about this care to weigh in?

[1] https://www.bloomberg.com/news/articles/2018-03-28/saudi-ara...

[2] https://en.wikipedia.org/wiki/Electricity_generation#Product...

[+] jazoom|8 years ago|reply
But can it power Bitcoin?
[+] joshhart|8 years ago|reply
According to Wikipedia the worldwide consumption of electricity is about 21k Tera watt hours. That's 21,000,000 gw so it's .001% right? Also I think cost is now about a quarter per watt
[+] tryitnow|8 years ago|reply
This has boondoggle written all over it; however, I'm glad ridiculously rich people are willing to waste their money on it - it should be a great learning experience for the engineers and other workers involved.

It's a likely boondoggle because solar is still a changing technology, committing to build something now risks being locked into technologies that may be woefully out of date by 2030.

Just imagine if someone tried this 12 years ago - the plant would be coming online today probably with technology that is a lot less efficient than it could have been had they waited.

Nonetheless, I have to say I am inspired by Softbank's and the MBS's vision, good for them.

[+] Someone|8 years ago|reply
I don’t think this is a “all in from the get go” like investment, where, once you started, you either run through your original plan or abandon it completely. If solar cells become more efficient during construction, they will be able to switch to using them for new construction (they probably won’t even have a choice, as they won’t be able to buy the old ones anymore)

Also, at that scale, they will be replacing stuff continuously even before they are finished building it.

Google and Amazon aren’t running outdated computers in their ten year old data centers, either.

[+] sametmax|8 years ago|reply
On the other hand, you can wait like that for a very long time, and you have a problem to solve now.
[+] steve19|8 years ago|reply
I wonder if they will they be storing energy over night, or do they plan on using daytime generation to run energy intensive industrial plants such as aluminum smelters or fertiliser plants. Saudi is a major fertiliser manufacturer but fertiliser production consumes less than 2% of global energy production and this plant will produce far more power than that.
[+] Mvandenbergh|8 years ago|reply
Saudi residential and commercial electricity use is dominated by air conditioning loads. That means really good correlation between solar pv output and load curves.

You can also time-shift cooling, especially if you use central chillers which distribute cold brine to heat exchanges in builders. Parts of Dubai use a system like that.

[+] atupis|8 years ago|reply
If they are thinking about starting to producing syngas they definitely have infrastructure place already.
[+] Brakenshire|8 years ago|reply
Saudi Arabia is an interesting country in a world of very cheap solar energy. On the one hand the global shift in energy markets would undermine the basis of their prosperity and shift geopolitical power elsewhere. On the other hand, they have perfect conditions for solar generation themselves, very high levels of sunshine and huge amounts of land. Cheaper energy means reduced costs for all sorts of things which make living in such a hot place realistic or attractive. The land is also not far from the coast, and cheaper energy means more of that land could potentially be irrigated. You really wonder what would happen there if solar ends up undercutting oil many times over, it could be a collapse, or it could be a booming population living in high-tech cities, and the desert turned green.
[+] shubhamjain|8 years ago|reply
Is a megaproject like this a good idea considering that there could (possibly) be innovations in the sector? What if scientists find a way to reduce the panel size by 30% in the future?
[+] Pfhreak|8 years ago|reply
Should I buy a graphics card to play games now? What if Nvidia comes out with a better card in the future?

At some point you have to stop worrying about the future and recognize the benefits you can get today with the resources and technology you have avaliable to you.

[+] durkie|8 years ago|reply
one should consider saudi arabia's case in particular: they are one of the few places that derives a tremendous amount of their electricity generation from the direct burning of crude oil (almost 1 million barrels per day).

each barrel that they don't burn is one they can sell instead, and this is a situation that makes economic sense for them now, regardless of future tech improvements.

[+] greglindahl|8 years ago|reply
This megaproject is going to be installed gradually through 2030.
[+] jartelt|8 years ago|reply
Typically with solar panels you reduce the power output by 30% when you reduce the panel size by 30% ;)
[+] potlee|8 years ago|reply
You can still make this argument even after a breakthrough has just been made
[+] anovikov|8 years ago|reply
That thing alone is going to produce ~1.5% of all electricity in the world (assuming ~23% capacity factor which is what i expect in Saudi Arabia), even accounting for growth of electricity consumption by the time it is built out.

What are they going to do with all that electricity, especially given it is intermittent?

To me, the project sounds like a PR BS because it is too expensive and i can't see a use for it.

[+] TangoTrotFox|8 years ago|reply
You can create energy storage with excess energy. With energy of a large enough scale even electrolysis, as opposed to steam methane reforming, could be used to produce renewable clean energy in the form of hydrogen that could be used to create more stable power output.

Saudi Arabia and all nations that rely on oil exports certainly have to be seeing the future a bit differently than the rest of the world, and so you have to take this into account when considering their plans. It's probably not particularly controversial to say that oil won't be nearly as valuable in 50 years. But when your GDP is being sustained by oil, that means you're living on borrowed time - and when it comes to completely reshaping your national economy and international role, 50 years suddenly is not such a long time.

[+] Maarten88|8 years ago|reply
They can build more aluminium smelters there, that takes lots of energy and brings diversification. They already have some of that (using oil/gas).
[+] cinquemb|8 years ago|reply
Any one have any related sources on the kind of tech involved? Will this be PV? CSP? Some combination of both?
[+] blackrock|8 years ago|reply
Are solar thermal generators no longer competitive against photo voltaic solar panels?
[+] IndrekR|8 years ago|reply
the project will create 100,000 jobs

50 persons/MW or 20kW/person sound a bit high at that scale. Even considering the sandstorms in the region.

[+] jakebaker|8 years ago|reply
It's almost certainly a "job-year" [1] which is an economic construct representing the equivalent of one person being employed for one year. For example, a 6 month construction project with 2 guys still equals one job year.

Most PR-style announcements like this seems to simplify job-years to jobs.

There is also direct employment (# of people hired for the project itself, e.g. construction) vs indirect employment (# of people hired in supply chain) vs induced employment (# of people hired by associate economic impact, e.g. construction worker spends money earned on project in local community and supports retail) [2], all of which may be consolidated for a PR style announcement.

[1] http://prospect.org/article/what-heck-job-year [2] https://msu.edu/user/stynes/mirec/concepts.htm

[+] netrus|8 years ago|reply
In the end, half of everything you pay for anything is labor. 100B / 100,000 jobs = 1M / job. Sounds about right to me! Remember that they will need to manufacture the panels, transport the panels, prepare the sites, build the structures, maintain the system, build power lines, maintain power lines, sell the power ... that's a lot of jobs that have to be done!
[+] mozumder|8 years ago|reply
Is something on that scale possible here in the US?
[+] jartelt|8 years ago|reply
You could certainly fit that much solar in places in Arizona, Nevada, and New Mexico. I think the bigger issue would be getting the capital and permissions needed to build high voltage transmission lines to take that much power to where it is really needed throughout the country.
[+] sduclos|8 years ago|reply
What will emerge from that ground when not cooked every day by 200GW? Maybe one could grow stuff
[+] igravious|8 years ago|reply
Very very little by way of information here. I suppose that given it's a memorandum of understanding (MOU) they're basically saying, "we'd like this to happen please".

I think the scale of the project implies that this is going to be the power source for Neom† ( http://www.discoverneom.com/ ), the new sci-fi city the Suadis are planning to build in the north-west of their country bordering Jordan and with Egypt across the water. See here‡ for an in-depth critique of that project. (Side note: is it just me or has Bloomberg's journalism gotten insanely impressive of late?)

From the official blurb, “As the sun rises over NEOM, it will glint against vast fields of solar panels paired with wind turbines and light up enormous stretches of energy grids storing power for generations.” I guess we could call this MOU, “Neom-Solar”, part of the energy solution for powering Neom and beyond.

One has to remember that the Saudi's sovereign wealth fund has something like $2T, that's T for trillion, so a joint $200B joint punt is well within their reach. And especially if they intend to diversify away from fossil fuels for power-gen and desalination.

I guess we should applaud them because if the effects of climate change are potentially as bad as scientists claim they are the world needs a number of mega-projects like this to push the carbon needle firmly in the other direction.

Note as well that since that Bloomberg article was written in October 2017 a number of the restrictions mentioned in the article as compared to Dubai have been lifted–notably women can drive from the summer onwards and do not have to wear an abaya in public so long as their dress is "decent and respectful"§. Perhaps more reforms are coming down the pipe? It's often been rumoured that the Saudi royalty and other wealthy individuals lead much more liberal lifestyles abroad (and even at home some say) than the laws of their own country would lead one to believe.

I believe it is true that historically the Saudi royalty built their strength by allying themselves with the fundamentalist Wahabi clerical sect. Perhaps the Kingdom realises that they may have to partly sabotage that relationship in order to make their country more attractive to outside investment and in order to compete with their more liberal next door neighbours. And perhaps it is the subjects themselves in the kingdom who are agitating for some reforms. Anyway, it'd be nice in the future not to have to listen to jibes about how draconian the kingdom is on the religious front whenever some article about their progress in other areas is published.

† discussion five months ago here: https://news.ycombinator.com/item?id=15543404

https://www.bloomberg.com/graphics/2017-neom-saudi-mega-city...

§ http://m.gulfnews.com/news/gulf/saudi-arabia/abaya-what-wome...