GlassPoint has emerged from bankruptcy with ambitious plans to decarbonise heavy industry using solar steam, and is using BlackRock's investment to do so.
GlassPoint, a solar steam startup that went into liquidation in 2020, has new funding, a new business model and a huge new decarbonization project planned.
The company has just signed a memorandum of understanding with Saudi Arabian mining company Ma'aden to develop a 1.5GW solar thermal steam project at Ras al-Khair in Saudi Arabia as part of a vertically integrated aluminium production complex. If completed as planned, it will be one of the largest concentrated solar projects in the world. Of course, a memorandum of understanding doesn't have all the legal competitiveness, but the proposed deal could still mark the comeback of the once-bankrupt company and the reentry of the concentrating solar industry into the mainstream.
CSP had an investment boom in the early part of the last decade when Areva bought Ausra and BrightSource Energy almost succeeded. But in the end CSPS could not compete in the electricity market and were beaten by mass-produced, low-cost photovoltaic solar power.
GlassPoint will use CSP technology not to generate electricity, but to produce steam for industrial process heat. Parabolic solar trough reflectors will be used to focus sunlight on tubes containing water, creating high-pressure steam. The sink is encased in a greenhouse to protect the mirrors from the elements; An automated system cleans the greenhouse glass at night.
GlassPoint's shielded CSP system will use cheaper, thinner mirrors and less steel and aluminum, reducing the main cost drivers of traditional CSP projects.
GlassPoint
The new project in Saudi Arabia will produce high-temperature steam for refining bauxite ore into alumina, a key ingredient in aluminium production. Alumina is used in everything from cars to appliances to solar panels, so decarbonization of alumina production is an important part of removing fossil fuels from the industrial supply chain. As David Roberts pointed out recently, demand for aluminum in solar photovoltaic panels alone "will grow at the rate of ships or giant ships."
"This facility will be the largest industrial solar steam plant in the world and the first to be deployed in Saudi Arabia and in the aluminum supply chain." GlassPoint CEO and founder Rod MacGregor said in a press release.
The origins of enhanced oil recovery
GlassPoint has received more than $130 million in venture Capital over the past 10 years from Oman's sovereign wealth fund, Royal Dutch Shell and venture Capital firms RockPort Capital, Nth Power and Chrysalix Energy. The plan was to use concentrated solar arrays to produce gigawatt steam for enhanced oil recovery (EOR), replacing fossil gas.
Enhanced oil recovery (EOR) is used to extract oil from Wells that have been largely depleted by standard methods. The widely used method, known as thermal EOR, requires the use of large amounts of fossil gas to create steam, which in turn is used to force the last drop of oil from nearly dry Wells. But when used to generate steam, solar energy can reduce fossil gas consumption in oil fields by up to 80 percent -- the value driver behind GlassPoint's original business plan.
But those ambitious plans hit a snag in 2019, when GlassPoint couldn't secure enough funding to move forward with a major project, the 770-acre Belridge solar farm in Kern County, California. Despite desperate last-minute efforts to stay afloat, such as a series of bridge loans and a round of funding that didn't generate much interest, GlassPoint opted to go into liquidation in April 2020.
New opportunities! The new focus of a net-zero world
GlassPoint was revived this year with an undisclosed amount of funding from BlackRock, the world's largest asset manager.
"The business model is different, the market is different and the environment is very different. We are now in a world of zero." MacGregor said in an interview with Canary Media last week.
At GlassPoint's first project, "the company's business model was to sell solar projects and, at the end of the construction process, hand over the keys to the customer."
MacGregor explains the difference in the new model: "We own the assets and sell the Steam purchase agreement, just like the power purchase agreement, which provides us with recurring revenue over the long term. Such a deal would allow customers to agree to buy a certain amount of steam at a price per pound over 20 years.
"Industrial process heat was always our initial target because process heat for industrial steam is a huge market. Industry is the biggest user of energy: steel mills, aluminium refineries and carpet factories... Use more energy than your house or your car."
Less obvious, says MacGregor, is that three-quarters of the energy they use is in the form of heat, not electricity. There's a reason we call them 'smokestack industries' -- it's because they burn coal, oil, or natural gas for heat.
The CEO cites Ma'aden as an example. "They are making aluminium with huge energy inputs and we are helping them decarbonise. There are refineries all over the sunbelt [in the U.S.] -- huge industrial steam heating applications with temperatures, pressures and scales similar to what we've done before."
MacGregor says the business environment today is "really different than when GlassPoint was launched. I remember in 2010, we would go to an industrial user and say enthusiastically, 'We can help you decarbonize. 'They would look at us blankly and say,' Why are we doing this? 'Now, no one says that."
"We are not cheaper than burning coal. But we're the cheapest way to produce zero-carbon heat. This is a huge change in the environment. We've gone from 'decarbonization to' if you're cheaper than fuel, we can make a deal. 'We need to decarbonize. What's the cheapest way?"
GlassPoint has some new potential board Allies in this new world. "Big companies usually have a decarbonisation team. They have a net zero goal and a net zero commitment from the CEO or board. They have special advisers, regulatory pressures, customer demands - all around decarbonization. But there is no obvious or easy decarbonization option for industrial heating users." Mr MacGregor wants his firm to fill those gaps.
Ultimately, a restive GlassPoint is banking on emerging interest in decarbonization to reinvigorate its CSP technology and do so on a gigawatt scale.