Visiting a solar energy plant on a rainy day does not set the best of scenes to talk about the potential of this alternative source of energy. The scarcity of the main component necessary to produce it, silicon, and the fact that other renewables are more competitive are additional turn-offs.

Rainy days, however, are the exception in countries like Spain, and enthusiasm about technology developments and expansion plans at the Madrid plant of BP Solar compensate for such shortcomings.

BP Solar is part of the alternative energy unit of energy producer BP. BP Alternative Energy was launched in November 2005 and combines all of BP’s interests in zero-carbon and low-carbon power generation, which include solar, wind, hydrogen power projects and gas-fired power generation.

At its European headquarters in Tres Cantos, on the outskirts of Madrid, BP Solar is working on a development project that will expand the plant’s annual cell capacity from 55 megawatts (MW) to about 300MW – quite a big step in the Spanish market, which has great potential but is not as developed as, for example, the German market with its 700MW installed only last year.

Buoyant market

Encouraged by the buoyancy of the solar market, Grupo Santander, Spain’s top bank, has offered investors the chance to buy stakes in solar energy plants: up to 258 plants producing up to 25MW, to be built by BP Solar by the end of the year. The total investment is anticipated to be €160m.

Investments aside, engineers’ work at the Tres Cantos site must feel energised also by the unique surroundings of the plant. The company is located near the Ribera del Manzanares park, on a site that was taken over from semiconductor manufacturer Agere Systems, formerly part of Lucent, in 2001.

Bertrand Boulin, vice-president for supply and manufacturing at BP Solar, is proud of the location and of the respect that BP Solar is showing for the environment. “Our recycled waters nourish the natural lake near the facilities,” says Mr Boulin. “The local authorities randomly come to check the quality of the water. We have also replaced some of the trees around the plant with trees that need a smaller amount of water and that complement the rest of the green area around us.”

The company is not only growing in Europe, it is also expanding its cell manufacturing capacity in India, where it has a joint venture with the energy arm of Tata Group in Bangalore. The joint venture provides solar energy to the Indian market – where currently there is no feed-in tariff (the price per unit of electricity that a supplier has to pay for renewable electricity from private generators; governments regulate the tariff) – and plans to expand its capacity to 300MW by 2010.

BP Solar is also keen to utilise India’s high-skilled labour force and promotes regular sites visits, where engineers from different plants around the world exchange knowledge. The Indian project required Tata BP Solar not only to work on the solar panels production, but also to introduce an appropriate user fee and ensure ongoing maintenance to support the long-term sustainability of the project. The joint venture has also established a regional office in Leh, in the Ladakh region – home to part of the Himalaya mountain complex – which is probably the highest solar service centre in the world, 3350 metres above sea level.

Ambitious strategy

“The strategy of BP Solar overall has been very ambitious in the past two years, and it’s even more ambitious now,” says Mr Boulin. “The Alternative Energy unit was created two years ago for these reasons: the link between climate change and carbon emissions is more and more evident; there is concern about energy supply security; and the technology in this field is maturing very quickly.”

Technology is indeed a hot topic in this field. Currently, the power that BP Solar generates through solar energy is 60% of the sunlight captured through the panels. It plans to increase this percentage to 90%, which will also help to provide an answer to the silicon shortage.

“We are investing heavily at the heart of the process: the conversion of the cells,” says Mr Boulin. “We need to make it efficient, to reduce the cost and to invest in technology and we need economy of scale to maximise it. We have the space, the people and a supporting community – that’s why [our European headquarters] are in Tres Cantos.”

Silicon solution

To find a solution to the silicon shortage, BP Solar has also gone to Germany, where it is supporting research on solar silicon by the Institute for Crystal Growth (ICG) in Berlin. The ICG is working on innovative approaches to reduce the consumption of silicon per watt produced by a solar module. The Tres Cantos plant can also count on partnerships with local universities (Comillas and Politecnica) to develop its technology, and on BP Solar’s partnership with the University of Berkeley in California to study how bioscience can be used to increase energy production and reduce the impact of energy consumption on the environment.

Spain offers an interesting market for solar energy and renewables in general. In 2006, the solar energy market more than doubled (with a total installed capacity of 110MW-120MW – BP Solar owns more than 40% of the total) and it is expected that growth will continue apace this year and next. The Spanish government is one of the most pro-renewables governments in Europe and has created a framework that supports solar energy, planning to increase the installed modules to 400MW by 2010. Benefiting from this framework, BP Solar can sell energy into the national grid at 575% of the cost of production; it entered into a 25-year contract with the Spanish government by which utilities providers are obliged to buy electricity from it. With such appealing feed-in tariffs and the hours of sunlight in the country, investment in solar energy in Spain is extremely attractive.

Paradoxically, investing in Spain is even more attractive than investing in Germany, according to BP Solar, because German government support is lower and demand is driven by ecological reasons.

Competitive aim

Of course, any corporation in any sector would welcome government support, but no healthy market should wish for its long-term presence. BP Solar, like other renewables producers and experts, is conscious of this and its final goal is to make solar energy competitive, indicating 2012 as the target year for when subsidies will no longer be needed to operate in the market.

Another criticism of solar energy and other renewable energy sources, and a drawback for which no significant developments are expected, is the limited contribution they make

as alternatives to fossil fuel-based energy. Mr Boulin is open about this and, although not suggesting that solar or any other renewable energy source will be able to replace oil, he quite rightly points out the unique merits of these sources. Solar power is flexible and can provide energy to remote locations, and to regions that are not suitable for hydro or wind power, where demand is low and therefore grid connections would not be commercially viable. Although limited in scope, such solutions seem worth the continued investment.