By John Addison (10/4/11)
Chevron Technology Ventures launched an enhanced oil recovery (EOR) demonstration project using solar energy to recover oil. The 29MW project uses BrightSource technology including 7,644 mirrors to focus the sun’s energy onto a solar boiler. The steam produced is injected into oil reservoirs to increase oil production. The project is the largest of its kind in the world.
Desmond King, president of Chevron Technology Ventures, states, “This technology has the potential to augment gas-powered steam generation and may provide an additional resource in areas of the world where natural gas is expensive or not readily available.”
One of America’s oldest oil fields, the Coalinga Field began operations in the 1890s. Because the heavy crude oil produced at the field does not flow readily, it is more difficult to extract than lighter grades of crude.
Chevron currently enhances oil production from the Coalinga Field by injecting steam to heat the crude, thereby reducing its viscosity and making it easier to produce. Burning natural gas currently generates this steam. The solar-to-steam project will supplement the gas-fired steam generators and help determine the commercial viability of using heat from the sun instead of natural gas to generate steam.
BrightSource Addresses $4.7 Billion EOR Market
The 29MW solar-to-steam demonstration project is made up of 3,822 mirror systems, or heliostats, each consisting of two 10- by 7-foot mirrors mounted to a 6-foot steel pole. There are 7,644 mirrors that track the sun and focus the sunlight on a 327-foot-tall solar tower. Using heat from the concentrated sunlight, the solar tower system produces steam that is distributed throughout the oil field and then injected underground for enhanced oil recovery. The solar demonstration generates about the same amount of steam as one gas-fired steam generator. The project covers 100 acres, with mirrors covering 65 acres and 35 acres devoted to support facilities.
Extracting heavy-oil reserves, like the ones found at Coalinga, is a global challenge. According to a recent report by SBI, conventional oil recovery methods are only able to extract about 10% – 30% of the potential oil from any given reservoir, leaving nearly 70% – 90% of the reservoir’s oil in the ground.
“The energy intensity associated with extracting heavy-oil is extremely high. This presents a significant challenge to containing emissions and to the supply of fuel – such as natural gas – for this process,” said Paul Markwell, Senior Director, Upstream Research with IHS CERA. “Many of the known heavy-oil reserves around the world have limited access to cost-effective fuel sources and are located in areas with high solar resources. This provides an ideal environment for the use of solar thermal technologies for enhanced oil recovery.”
According to BCC Research, the global market for EOR technologies was $4.7 billion in 2009 and is expected to grow at a 5-year compound annual growth rate of 28%, reaching $16.3 billion in 2014.
Utility Market Even Larger for Solar Thermal
California utilities are required to have a 33 percent renewable energy portfolio by 2020, up from 20 percent today. Major investments are being made in solar PV and solar thermal. BrightSource Energy also provides solar thermal power plant solution for utilities. Called SolarPLUS, the offering combines BrightSource’s high-efficiency LPT power tower solar thermal technology with a two-tank molten-salt storage that can be used to deliver during peak hours when electricity is most valuable.
A BrightSource 392MW LPT solar thermal system is currently being deployed at the Ivanpah Solar Electric Generating System (ISEGS) in California’s Mojave Desert. Ivanpah, which started construction in October 2010, is the first project that will deliver power to serve the company’s signed contracts with PG&E and Southern California Edison. The project – which counts NRG Solar, Google and BrightSource as equity investors – is currently the largest solar plant under construction in the world. Bechtel is constructing the project.
BrightSource Energy with its leading solar thermal technology has raised about $530 million from investors that include VantagePoint Capital Partners, Draper Fisher Jurvetson, Morgan Stanley, Black River, DBL Investors, Riverwood, Calstrs, Google.org, Statoil Hydro Venture, Alstom, BP Alternative Energy, and Chevron. Solar thermal projects of 2,600 megawatts have received $1.3 billion in federal loan guarantees. BrightSource has filed an S-1 for an IPO.
Alan Salzman, Managing Partner of VantagePoint Capital Partners, states, “In working closely with BrightSource Energy over the past several years, they have greatly impressed us with their deep understanding of the solar thermal industry and technological prowess. The company represents an extraordinary business opportunity and a catalyst for transformative change to the energy world as we know it. It’s exciting to be part of it.”
The solar-to-steam project will be managed by Chevron Technology Ventures (CTV), a division of Chevron U.S.A., which champions innovation, commercialization and integration of emerging technologies and related new business models within Chevron. CTV is pursuing this goal through business units involving biofuels, emerging energy and venture capital.
