Why is an Oil Company Leading California’s Biggest Solar Power Project?

The quest for sustainable energy, especially solar energy, has been one fraught with difficulty, with one of the main obstacles being the power of the oil and gas juggernaut.

This is why the news that Aera Energy, owned jointly by ExxonMobil and Shell, would be partnering with GlassPoint Solar to create the largest solar energy project in California came as such a surprise to the world when plans were announced on the 29th of November 2017.

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The site of this ambitious project is located in Belridge oilfield, one of the largest in the country, which is just west of Bakersfield. It will be the first of its kind in the world – a project that will begin to use solar power instead of other sources of energy to provide energy to oilfields. The project is set to take up 770 acres and will rise to build an 850 MW solar thermal facility to power the oilfield and a 26.5 MW photovoltaic facility to provide electricity to the location.

The project’s purpose is simple: to generate steam that can be used to assist in the oil extraction process when it is injected into the ground. Heavy oil is created through this process, as the steam heats oil in reservoirs so it can be pumped up to surface level. Belridge’s oil production is at 76,000 barrels a day today. By using thermal energy from the sun instead of traditional gas, this project will do wonders for the environment.

The aim is to be able to create a whopping 12 million barrels of steam annually, which will serve as a replacement for the 4.9 billion cubit feet of natural gas that would have been needed to create the same amount of steam. This will save an estimated over 376,000 metric tons in carbon emissions – roughly as many as 80,000 cars would produce annually.

But was has led a traditional energy corporation like Aera Energy to make the leap into assisting in the production of renewable, sustainable energy? There are a multitude of reasons beyond the simple desire to help better the environment.

The biggest factor that could have led to this decision is the cost-effectiveness of renewable energy. With solar power, large investments are necessary, but following that, you receive more than your money’s worth back as fuel production is essentially free aside from any necessary maintenance costs. As mentioned, without solar power, 4.9 billion cubic feet of natural gas would be needed to produce 12 million barrels of steam per year – and the price of that is $3 per cubic feet, which adds up to $15 million savings annually. In terms of carbon credits, the estimated savings are about $5 million annually.

On top of all that, participating on solar and renewable energy projects could be good for any company in the long run – especially in California, where the costs of running a business can be high enough to demand a better performance and social acceptance.

The project is even more doable due to California’s extension of its cap-and-trade system on carbon dioxide emissions, which now goes on till 2030. Without this extension providing legislative support as well as regulatory stability, funding the project, which is ahead of its time and may not become economically profitable as a whole for a few more decades, may not have been possible.

Aera Energy won’t be working with an inexperienced company, either. Glasspoint has built glass houses for Berry Petroleum and has worked to make similar solar powered generators for steam with Petroleum Development Oman that involved a $600 million contract, in the Middle East where natural gases aren’t quite as evenly distributed. It has also made the top 100 list by Global Cleantech that features up and coming, innovative and promising companies in solar power.

Is this sort of partnership set to be a new global trend? Perhaps. A total of five other similar plants have been built around the planet using similar technology, though with some differences, of which three have had GlassPoint’s involvement. Meanwhile, in Norway, Statoil – one of the biggest oil corporations in the country – is working on a similar project in Brazil, and oil giant Shell is working on exploring the possibilities for one in Australia. Statoil has also been making strides in wind energy.

Many environmental groups feel that this project is step in the right direction, though some enthusiasts may feel more ambiguous about its goals. GlassPoint’s Senior Vice President, Sanjeev Jumar, stated during the project’s press release that his company’s partnership with Aera Energy indicates how energy is working hand-in-hand globally, demonstrating how both renewable and non-renewable energy companies can converge. Aera Energy is estimated to wind up spending around $250 million on the mutually beneficial project, and it’s estimated that the Belridge Solar project will begin functioning by the year 2020, when it will start to produce the highest energy output of any power plant of its kind in California.

Rinkesh

Rinkesh is passionate about clean and green energy. He is running this site since 2009 and writes on various environmental and renewable energy related topics. He lives a green lifestyle and is often looking for ways to improve the environment around him.