The U.S. National Climate Assessment (NCA)

 

Patricia Malo de Molina.

Chief Communication Officer of Abengoa.

The third U.S. National Climate Assessment (NCA) was recently published. This document was put together by a team of more than 300 experts who were in turn guided by 60 members of the National Climate Assessment and Development Advisory Committee, forming the largest and most diverse team ever assembled to produce an assessment of the climate of the U.S.

The data contained in this report are, to say the very least, revealing. Revealing because they once again highlight the importance of several issues about which U.S. citizens are already aware, and revealing because they attribute all these phenomena to the activities of the country’s inhabitants. The report discusses the effects of climate change by geographic region in the United States and by economic and social sectors (agriculture, energy and health). In addition, as this document confirms, climate change stands as one of the biggest threats to human health and wellbeing: more extreme weather events, forest fires, poorer air quality and the spread of diseases carried by insects, food and water.

The NCA report predicts that climate change caused by human activity will continue and accelerate significantly if global greenhouse gas emissions continue to rise as they have done up to now. Climate change-related impacts are already very much in evidence across many sectors and are expected to have an increasingly disturbing effect in the 21st century.

The advisory committee, formed by staff from several universities (Florida, Louisiana, Alaska, Michigan and Washington), research institutes (Hawaii Institute of Marine Biology, Georgia Institute of Technology), NGOs (The Nature Conservancy) and companies (ConocoPhillips, WestLand Resources, Inc., Monsanto Company), base this document on a large volume of peer-reviewed scientific research, technical reports, as well as other publicly-available sources, scientific reports and publications, and information from the IPCC.

The report, which was reviewed by experts from the National Academy of Sciences, the 13 federal agencies in the U.S. Global Change Research Program and the Federal Committee on Environment, Natural Resources and Sustainability, is essentially divided into two parts: climate trends and the regional effects of climate change. With regard to climate trends, the NCA conducted an analysis of changes in weather patterns since the mid-20th century, as well as its effects on the population, the economy, natural resources and infrastructure. In the same way, it analyses the effects of climate change at a regional level with the distribution shown in the map below (drawn from the report).

This exhaustive analysis leads to the essential conclusion already mentioned above that the global warming of the past 50 years is due in large part to human activities. Indeed, average temperatures in the U.S. have increased 1.3 °F to 1.9 °F since 1895; and the majority of this increase has taken place since 1970.

In the same way, some extreme weather phenomena have increased in recent decades and the evidence is new and stronger. In the past 50 years, a large part of the United States has experienced an increase in prolonged periods of excessively high temperatures, torrential rain and, in some regions, the most severe droughts in recent years. Indeed, the ability of ecosystems to absorb the impacts of extreme events such as fires, floods and severe storms is being diminished by the effects of climate change.

In relation to water resources, the NCA highlights that the infrastructure is being damaged by rising sea levels, torrential rain and extreme heat; damage that will be exacerbated in the future over the short- and medium-term. The oceans are becoming warmer and more acidic, which affects ocean currents, their chemical properties and marine life. While water quality and the reliability of the water supply are being put at risk, affecting all ecosystems in a multitude of ways and also impacting on human activity, for instance agriculture, which is so heavily affected by changes in the climate.

Planning to adapt and mitigate climate change is more and more widespread and present in our activities; nevertheless, the efforts made thus far have proved insufficient in avoiding the social, environmental and economic consequences, which are increasingly negative.

Regional effects of Climate Change (as shown in a table from the document):

Ultimately, this document highlights California’s Global Warming Solutions Act as a positive measure. This Act aims to set a limit on greenhouse gas emissions and reduce them back to 1990 levels by 2020. The state program caps emissions using a system based on carbon credit trading and limits electricity generation from coal and oil.

The NCA report concludes by proposing some initiatives that could help to mitigate the effects and alleviate the damage caused by climate change. In this regard, it proposes focusing efforts on improved management of torrential rain, adaptation and mitigation in cities, the implementation of emissions cap-and-trade projects, such as the one developed in the north-eastern states; promoting renewable energy (wind, solar and geothermal) in the southeast and consolidation of the transformation of the electricity generation system undertaken by five of the six states in the southeast.

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“Thermal storage: challenges, development and evolution”

Cristina Prieto Ríos.

R & D Director of Abengoa’s Solar Business.

Today, carbon dioxide is responsible for more than 50% of greenhouse gas emissions and is the greatest contributing factor to climate change. This has led to growing uncertainty regarding energy supply for the coming decades and climate change has become a real threat.

Gas emissions in the EU exceeded 1990 levels by 2%, a figure that is expected to rise to 5% by 2030. Similarly, the EU’s dependency on imported energy will increase from 50% at present to 65% in 2030.

A definitive boost to renewable energy is therefore essential to achieve the objectives established by energy and climate policy and to ensure the future competitiveness of the various countries in the global energy market. A change in energy production, distribution and use must be achieved by 2050, with general energy consumption largely coming from renewable technologies. Clean energy technologies such as solar, wind, marine… are being presented as the main agents for achieving these objectives. Solar energy must therefore be one of the basic pillars to achieve these objectives.

Although CSP technology has enormous future potential, efforts must focus on reducing these timeframes, making it competitive within a few years compared to other technologies and more attractive for the mass-market. This technology therefore needs to be supported by a research programme to reduce costs, increase the efficiency in solar-electricity conversion and increase its distribution in order to improve performance and the efficiency of thermal storage.

The global electricity market is already beginning to phase out solar-thermal facilities without this manageability. However, putting aside this aspect, it is still not clear which technology will dominate in the coming years, meaning that thermal storage will face increasing challenges. These include:

  • The need to increase the manageability of the system, reducing peaks in power generation.
  • The need to increase generation capacity. The most important benefit of solar-thermal power is probably the increase in generation capacity. This means that the energy demand is rarely constant over time and that surplus generation from off-peak periods can be used to charge a storage system in order to increase generation capacity during peak periods. The result is greater use of plants, helping to generate energy in a more stable way.

  • A reduction in generation costs: energy demand in the commercial, industrial and residential sectors varies on a daily, weekly and seasonal basis. This demand can be combined with the help of storage systems that operate synergistically. This objective to reduce costs, combined with the potential of thermal storage, must focus on finding solutions for high-temperature solar-thermal plants, which will increase the efficiency of the cycles associated with these solar plants.

It is worth noting that the potential for storing thermal energy in order to supply electricity during periods with higher demand is one of the most important advantages of solar-thermal energy compared to photovoltaic. It is essential to increase the proportion of solar-thermal energy in the future in order to improve this functionality at the lowest possible cost.

Development and evolution of thermal storage for more competitive solar-thermal technology

Commercial thermal storage technology is currently divided between direct and indirect storage using molten salts and steam accumulators.

Direct storage is when the heat transfer fluid that exchanges its thermal energy with the fluid used for the turbine, is the same fluid that stores energy in the form of heat. The central receiver tower technology based on molten salts in plants such as Cerro Dominador, which Abengoa is constructing in the Atacama Desert, is a good example. In the case of indirect storage using molten salts, the heat transfer fluid is usually thermal oil that exchanges its heat with the molten salts. Examples of indirect storage plants using molten salts are Solana in Arizona (USA) or the Kaxu plant, currently under construction.

Molten salts technology currently works at temperatures of 400°C in the case of parabolic trough technology and 550°C in the case of tower technology.

In direct generation steam plants, the steam accumulators used in Abengoa Solar’s PS10 and PS20 plants allow saturated steam to be stored.

In the case of steam accumulators, working temperatures are around 250ºC for the PS10 and PS20 plants and 330ºC for the Khi Solar One plant that Abengoa Solar has almost finished constructing in South Africa.

However, in order to achieve the estimated cost reductions for the technology, the development and research being carried out by research centers and organizations, in addition to companies in the sector, needs to create new storage systems that can operate at higher temperatures. This target thermal storage cost is around €20-30/kWhth.

The dual-tank concept for molten salts has been proven and is reliable. However, due to the stability of salt, the maximum temperature is around 550°C. The search is therefore on to develop thermal storage capabilities using new materials and/or new concepts that provide technically and economically viable solutions at temperatures above 600°C.

In the short-term, these R&D lines are looking for new salts that can achieve operating temperatures of 600°C, as well as new thermal storage concepts that enable air receiver technology to be used at temperatures of around 800°C between now and 2015.

In the medium term, the aim is to increase this temperature in air receivers to above 1000°C by 2020.

But not all development work is focused on increasing operating temperatures. We are actively working on finding storage solutions with a higher energy density than the storage systems used to date, such as thermal storage using phase change materials (PCM). This technology focuses on direct steam generation in particular.

These systems try to use latent heat from the change in state of a material, from liquid to solid and vice versa. However, the technical challenges presented by these systems means that R&D work needs to be consistent in order to develop this technology to a commercial scale.

In the longer term, thermo-chemical storage is considered to be a viable option due to the high energy density values and its strong potential for reducing costs. However, the research into commercializing this technology must encompass thermodynamic cycles, receivers, storage systems and all the problems associated with chemical reactions.

The challenge this presents, or more accurately the challenge already being faced, is to increase the competitiveness of solar-thermal technology by lowering costs, including the part related to thermal storage, thereby reducing the uncertainty relating to the problem of energy supply in the coming decades.

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Technological Innovation: The Key to a More Sustainable World

Patricia Malo de Molina
Abengoa Chief Communication Officer.

Across the world, we’re entering a new era of innovation – one built on technological advancements made to mitigate our collective impact on the environment and reduce our energy costs.

By the middle of this century, the global population is expected to reach 9 billion people. This population boom will drive a greater demand for resources like water and fossil fuels, and will increase levels of municipal and industrial waste. The burgeoning global population will also pose serious environmental challenges, such as adaptation to a rapidly changing climate, the exhaustion of natural resources, and the contamination of the biosphere.

For these reasons, we’re living in an age where technological innovation has never been more integral to and focused on developing a more a sustainable world.

In the bioenergy, solar, and desalination industries, innovators across the planet are developing technologies that drive down the costs of energy and lessen our impact on natural resources.

Just a few years ago, a team of university biofuel researchers invented the world’s first environmental photobioreactor, which can simulate natural environments where algae can be grown and tested. Using the photobioreactor, scientists can develop and test strains of algae that yield biofuel. Once a successful strain of algae is created, it can be harvested on a large scale. This new process for cultivating new strains of algae and bringing them to market as a source of biofuel is not only more cost effective, but also presents a commercially viable alternative to conventional fossil fuels.

For its part, Abengoa invested $5.9 million to research and develop new technologies in 2013. As an example, we’re constructing a power plant in Hugoton, Kansas that efficiently converts farm waste into cellulosic ethanol. The plant is nearing completion and will produce 25 million gallons of biofuel each year.

Crucial technological innovations are being developed in the solar industry as well. The U.S. Navy, for example, is currently exploring ways to deploy solar panels in space. The panels would absorb solar energy around the clock – a feat impossible for terrestrial solar panels – and could transfer that solar energy via radio waves to power military installations, ships at sea, and troops in the field. Abengoa has also worked to improve renewable energy storage by pioneering a molten salt energy storage system for Solana, the largest parabolic trough plant in the world. This new storage system allows Solana to deliver solar power to Arizona homes all day – and all night.

In addition, the renewable energy industry is constantly innovating to tackle the scarcity of water resources and bolster desalination technologies. In this effort, Abengoa has developed methods to reduce the amount of energy consumed by reverse osmosis, minimize the environmental impact of brine, and create wholly new desalination technologies, including those that improve the operating conditions of filtration membranes, which are essential to high levels of purity and quality in treated water. Since 2005, similar efforts by companies in Israel have allowed the water-scarce country to obtain 40 percent of its water supply from desalination in just under a decade. The country is in the midst of creating a water surplus and is experiencing a resource transformation.

Innovations like the ones developed in the solar, desalination, and biofuels industries will play a crucial role in this century and beyond. As the world’s population grows and places more stress on our resources, we know that investment in technological innovation is a proven way forward to a more sustainable world.

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Thirsty Energy


Izaskun Artucha,
Head of Strategic Development Department of Abengoa.

Every year the heads of Abengoa’s main businesses spend a day with the Board of Directors in order to provide them with an update on performance and strategy. It is always helpful to provide an outsiders’ view that supports what we already know in Abengoa, that energy and water sectors are key for economic development and will provide significant growth and opportunities in the mid and long term. During this years’s session in March, we talked about “Thirsty Energy”

What is Thirsty Energy?

Thirsty Energy is a World Bank’s initiative launched in 2013, dedicated to promote and support countries’ efforts to address challenges in energy and water management proactively.

It is very clear that the energy and water sectors are dependent on each other:

- Significant amounts of water are required for energy generation purposes: cooling of thermal plants, fuel extracting and processing etc.

- Energy is needed along the water value chain: production, processing and transport.

This interdependence becomes even clearer if we support it with some figures. According to the United Nations (UN), 80 % of the water used for industry purposes goes to thermal power plants, and estimates by the International Energy Agency (IEA) indicate that in 2010, 15 % of total water withdrawals were used for energy production.

The logical consequence seems to be that the challenges faced by energy sector will have an impact on the water sector and vice versa.

The Challenge

In 2012, out of the total population of 7 billion globally:

- 36 % of the population have unreliable or no access to electricity,

- 40 % live in areas of high water stress and,

- 11 % lack access to potable water.

Global population growth expected for the next 20 years will only make this challenge greater. By 2035, According to the IEA, energy consumption is expected to grow by 35% and as a consequence, water consumption – that is, water extracted and not returned to its source – in the energy sector will increase by 85% putting even more pressure on finite water resources.

What is the impact for the energy sector?

The main impact that water scarcity could have on energy companies is the risk of having to reduce production or even shut down plants. However, while a global water crisis could take place in the future, the energy challenge is a reality today for many energy companies.

According to a water report by the Carbon Disclosure Project (CDP), 82 % of energy companies and 73 % of power utility companies identify water as a substantial risk to their business operations. Moreover, 59 % of energy companies and 67 % of power utilities have already experienced water-related business impacts in the past 5 years. Despite these very real concerns, current energy planning and production is often made without taking into account existing and future water constraints. This is already causing utilities to cut down production or halt expansion plans, but some of the less developed regions are suffering blackouts and power rationing. The absence of integrated planning between these two sectors is socio-economically unsustainable.

What can be done?

So far, the energy sector has been identified as a big business opportunity and has gotten most attention from industry, politicians and investors. However, as awareness of the strategic importance of the water industry is spread, it is bound to take a very relevant role in the economic development of the regions.

Así, Thirsty Energy ha propuesto una serie de iniciativas como posibles soluciones para el reto energía-agua que pueden agruparse atendiendo a tres grandes temas:

- Integrate energy and water planning.

- Reduce water dependency.

- Enhance efficiency of energy production processes.

Abengoa has developed businesses and capabilities that are key to the solutions proposed by the Thirsty Energy initiative:

These are only a few examples of the opportunities that lie ahead for Abengoa, not only for the water sector but also in all of our other main businesses, and the ways that Abengoa can contribute to address the energy-water challenge that can have a decisive impact in the economic development of years and decades to come.

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New potential markets for the water development sector – desalination and reuse

Arancha Mencía
Vicepresident Business Development at Abengoa Water



New potential markets for the water development sector – desalination and reuse

There has been an undeniable increase in the demand for new water sources over the last few years, thanks to various factors, such as population growth (mainly in emerging countries); an increase in per capita consumption resulting in higher demand for food and consequently water for agriculture and industry; and lastly, a decrease in available resources. This decrease is the result of over-exploitation, contamination of traditional resources, or caused directly by the impact of climate change, which is leading to prolonged periods of drought followed by flooding, which prevents the use of traditional water resources.

Source: Global Water Market 2014, Global Water Intelligence

All of these factors, combined with new technologies, have led to incredible growth and development in two new potential sectors in the water market – desalination and reuse.

The desalination market has been one of the leading markets in the water sector for over a decade. To a certain extent, growth in this sector has come at the expense of growth in water reuse.

However, progress in new technologies such as ultrafiltration, reverse osmosis and ultraviolet radiation means that today the end client can have absolute confidence in the levels of quality and safety obtained in water reuse processes, in order to directly or indirectly reach the standards required for drinking water.

Main potential markets in these segments:


Source: Global Water Market 2014, Global Water Intelligence

Middle East case study

The Middle East has been the main driver of desalination projects in the world since the 1970s, due to the lack of other water resources in the region. However, in recent years the trend in this market has shifted from a predominant use of thermal technology in sea water desalination, to the use of reverse osmosis technology, which is much less energy-intensive and consumes less fossil fuels, which could prove more profitable if these can be traded rather than being wasted on thermal desalination processes.

Middle Eastern countries are following this approach to saving energy and reducing oil dependency, and are leading research and development projects into the possibility of combining renewable energy use with sea water desalination for industrial uses and/or drinking water. For the moment, solar power is the leading solution in the region, although encouraging results are being obtained with wind power in desalination plants in other parts of the world.

Projects such as those at Masdar in the Arab Emirates, or Kacare in Saudi Arabia, have further developed the market in this sector and large-scale construction of these types of plants is expected to begin in the next two or three years.

All these markets have also been accompanied by new financing schemes that enable projects to be undertaken that would not otherwise be feasible. This trend, which began in the Middle East, has extended to every region where there is demand for new water resources. Private investment projects under IWP (Independent Water Projects), IWPP (Independent Water and Power Projects), BOT (Build, Own and Transfer) or PPP (Public Private Partnership) schemes have managed to obtain financing –which was unavailable in the public sector– from international and multilateral investor companies that are experts in these types of projects in other areas of the infrastructure sector (mainly energy).

In short, there is no doubt that the water market is growing due to the increase in demand and a decrease in the availability of traditional resources. That is why technologies that offer new sources of drinking water (mainly desalination and reuse) have become more competitive, thanks to technological development, new financing methods and improvements in water safety and quality, in a growing global market.

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Exploring new frontiers








Ken Salazar.
Partner at the law firm Wilmer Cutler Pickering Hale and Dorr LLP and a member of Abengoa’s International Advisory Board.






Nestled in the historic city of Seville, Spain, Abengoa is rooted in the exploration world that led Seville to be the gateway from Europe to the Americas. Over 400 years ago, Seville became the main connection between Europe and the New World. Today, Abengoa is the connection between the old world and the emerging technologies that are defining the future of our planet.

For centuries, nations have chased the power of the sun wondering how electricity could be produced to power communities across the globe, while humanity has struggled to secure clean reliable water supplies, especially in times of drought.

Since the beginning of the environmental movement, international communities throughout the world have struggled with how to deal with the massive amount of waste generated by human activity and deposited in landfills around the world.

Now, Abengoa is giving solutions to these important defining challenges.

An example of this are the solar projects that the company is developing in different areas of the planet, which are making the skeptics to become core defenders of this kind of solar initiatives at commercial scale. Today Abenoga’s commercial scale solar plants are already delivering electricity to the grid in the United States, Abu Dhabi, Algeria and Spain. In addition, Abengoa is building new solar plants in Chile, United States and South Africa.

Until the last few years, the United States had only very limited commercial scale solar energy production. Today, Abengoa hosts some of the largest commercial solar plants in the world in the deserts of California and Arizona. In particular, Arizona’s sola plant, with 280 megawatt, features state of the art thermal storage technology and provides enough electricity to meet the demand of 70,000 Arizona homes, even when the solar resource is not there. This innovative technology is a major step forward, as the solar plant continues to provide electricity even after the sun goes down.

In the same way Abengoa is leading the solar energy revolution, the company is also trying to address the water needs of communities faced with seemingly insurmountable challenges in supplying water to their citizens. Abengoa’s I+D center within the water laboratories in Seville has developed pioneering technologies, providing water solutions through the use of water desalination plants as well as creating alternative water supply solutions for communities.

I have often said that water is the lifeblood of nations and communities. Because of historic droughts now underway in the Southwestern United States, communities are struggling to address water shortages and to plan for their future water supply. In the Rio Grande River shared by Colorado, New Mexico, Texas and Mexico, the ongoing drought has created problems that threaten to devastate municipal, industrial, and agricultural water supplies.

The same is true for the Colorado River, which is shared by Wyoming, Colorado, Utah, New Mexico, Arizona, Nevada, California and Mexico. The Colorado River is experiencing an historic dry period which is creating shortages for municipal and agricultural users throughout the Basin. In California, Governor Jerry Brown has already declared a state of emergency because of the lack of water.

In the view of scientists and water managing organizations, these droughts are caused by climate change. In addition, the growing population of the Southwest and the increased demand for water has put many communities in a crisis mode.

The United States is not alone in facing droughts. Droughts are also occurring in Latin America, Africa, Asia and many other places around the world. Abengoa’s water technology and projects are helping to provide water solutions to many of these communities. The company has built water projects around the globe, including water projects in China, Ghana, Algeria and Mexico.

As part of its pioneering efforts, Abengoa is also poised to address the challenges created by our landfills across the world. Starting in its facility in Salamanca, Spain, the company has developed the technology to convert solid urban waste into energy. As the earth’s population is expected to grow beyond 7 billion people, the amount of trash created will exponentially grow. Abengoa’s deployment of its solid urban waste energy technology will help addressing the waste problem the world faces and, at the same time, will help developing new alternatives for reliable energy supplies.

As Abengoa explores the energy frontiers, it is also leading the way in advanced cellulosic biofuels. Abengoa’s projects are already creating bioethanol and biodiesel. In the United States, its advanced cellulosic plant located in Houghton, Kansas, will soon convert straw and other biofuel material into biofuels.

In conclusion, the world is confronting major challenges from climate change and population growth. Abengoa’s proven technologies will help the world deal with these changes. Today the world confronts major challenges from climate change and population growth. Abengoa’s proven technologies will help humanity address the challenges that come with this reality.

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CSP Has a Bright Future with Thermal Energy Storage

Patricia Malo de Molina.

Abengoa Chief Communication Officer.

The past year has been a landmark year for the concentrated solar power (CSP) industry, seeing the completion of several major projects, including Abengoa’s Solana Generating Station in Gila Bend, Arizona. Yet questions persist as to whether CSP is a viable, cost-effective form of renewable energy for the future. Concerns focus on the environmental impact that large-scale CSP plants can have on desert ecosystems, levels of water consumption, and how they can remain relevant in the face of significantly lower cost photo voltaic (PV) and natural gas plants. However, CSP solves the greatest challenge that renewables have faced: intermittency. Specifically, CSP has a solid future in the U.S. energy market as a result of its energy storage capabilities.

Since renewable energy first entered the market, one of its greatest criticisms has been its intermittent nature; thus, the sources of renewables are unreliable. Sometimes clouds cover the sun, the wind doesn’t blow, or waves don’t crash. Given the unpredictability, costs would go up and traditional energy sources would still need to step in when renewable sources were unavailable. CSP with thermal energy storage circumvents these challenges. Compared to other renewable energies, it has the capacity to store energy efficiently that can later be dispatched, allowing a plant to continue to operate when it is cloudy or after the sun has set.  Dispatchability allows for electricity generation at peak demand times, such as early evening when consumers return home from work, for example.

CSP will be a critical component of meeting the world’s energy needs while balancing the effects of climate change. According to the U.S. Energy Information Administration, by 2040 there will be a global demand for 820 quadrillion Btu, a 30-year increase of 56 %. Simultaneously, during that same period, total U.S. energy-related CO2 emissions in 2040 will equal 5,599 million metric tons. Thus, there will be a continued need for energy sources that are reliable and have the ability to grow while lowering CO2 emissions. CSP meets these needs perfectly, providing sustainable energy at commercial scale levels to meet energy demands at any time.

To meet these challenges, U.S. states and territories are starting to mandate that renewable energy have storage.  In 2013, California set a requirement for the purchase of 1,325 megawatts of energy storage by 2020. Puerto Rico has also mandated that all new renewable energy include storage, and New York is looking at similar storage requirements. CSP with storage is a technology that local governments can look to in meeting the requirements for energy storage.

Abengoa’s Solana, which commenced full operations at the end of 2013, shows that this technology is viable, cost effective and ready to meet consumer demands.  At 280 megawatts and with six hours of thermal energy storage, Solana is the largest CSP plant in the world utilizing parabolic trough technology. It can satisfy peak demand in the region in the late summer evenings and night time hours.

Solana operates using mirrored parabolic trough collectors. The structures track the movement of the sun, concentrating the solar radiation onto a receptor tube that contains a heat transfer fluid that absorbs the heat, reaching high temperatures. The thermal energy in this fluid then converts water into steam, which drives a turbine to generate electricity. With thermal energy storage, Solana is able to supply clean energy to around 70,000 homes, preventing the emission of nearly half a million tons of CO2 every year.

Thermal storage is the breakthrough the solar industry has long awaited. With it, plants can deliver energy hours after the sun has set, when the moon is up or on a cloudy and rainy day. This type of technology is a unique differentiator, giving CSP an advantage among other renewable energy technologies that don’t have storage capabilities by providing consumers renewable, pollution free, and affordable energy when they need it.

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Sustainable Desalination

Arturo Buenaventura

Strategy and Corporate Development Manager of Abengoa Water

The Earth naturally desalinates seawater. Solar power causes the water in the oceans to evaporate, creating clouds that release their water in the form of rain, some of which falls on the Earth’s crust, feeding the rivers, lakes and groundwater reserves that one way or another eventually return to the sea.

The Earth is known as the blue planet. The total volume of water including rivers, lakes, groundwater, oceans and the polar caps is 1,386 million km3, equivalent to a sphere of water with a diameter of 1,385 km. To put this into perspective, if the Earth was the size of a basketball, all of the planet’s water would fit in a ping-pong ball. Moreover, all this water follows this natural cycle on Earth – it is the only water that we have and it has been used over and over again since the beginning of time.

Only 3% of the Earth’s water is fresh water –and only 0.3% of this is available in rivers and 0.6% in groundwater– the rest is held in the polar caps. Consequently, the majority is not easily accessible, or is sea water.

Furthermore, we are faced with the problem that neither the drinking water that we have nor the earth’s population are uniformly distributed. Although the population tends to be concentrated in areas with good access to drinking water, this access is increasingly difficult to guarantee, since towns and cities are increasing in size with more people.

Water is an essential element for life and is considered to be a basic right for every person on the planet. However, around one third of the population lives in areas that suffer from water stress (imbalance between water supply and demand), ranging between moderate and high, and around 20% of the world’s population does not have a secure source of drinking water. We therefore need to help the Earth’s natural water cycle, generating additional drinking water resources in regions where they are scarce.

Desalination is a solution to these problems in regions that have access to seawater or sources of salt water. That is why Abengoa has spent many years investing to develop reverse osmosis desalination technology, due to its lower energy consumption compared to other available desalination technologies. Abengoa’s desalination plants therefore use the latest technological advances and we have developed innovative tools that enable us to optimize their design and sustainability. These improvements include the use of latest-generation pressure exchangers, minimizing the use of chemical compounds, decreasing the volume of discharged brine and improving the conversion rate, as well as the use of latest-generation reverse osmosis membranes, high efficiency pumps, ultrafiltration membranes for pre-treatment and proprietary technology to re-mineralize the desalinated water, among others.

Furthermore, at Abengoa we continue to invest in developing technological advances that enable water to be desalinated more efficiently, at lower cost and more sustainability. For example, Abengoa currently has desalination solutions based on renewable energy, which enable alternative water resources to be generated, minimizing their carbon footprint.

This week we are celebrating World Water Day themed around water and energy, which is an opportunity for us to reaffirm our commitment to continued investment while continuing to offer sustainable solutions to water problems around the world.

Photograph: Jack Cook, Woods Hole Oceanographic Institution

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Report from the Chairman

Felipe Benjumea Llorente
Executive Chairman of Abengoa

Last year, 2013, was better than expected, offering glimpses of growth possibilities that will help to put the financial crisis behind us. However, climate change continues to lie at the heart of the problems facing mankind. The UN’s Intergovernmental Panel on Climate Change is warning that the planet’s average temperature is increasing while glaciers melt, sea levels rise and CO2 emissions grow, all of which are attributed to humankind with 95 % certainty. The Stern Report states that thereis still no trend in emissions reductions, meaning that global warmingg will continue and that, by 2100, hundreds of millions of people would have abandoned their homes.

According to the World Energy Outlook for 2013, the decision facing the world requires greater emphasis on energy efficiency. Our sector will play a fundamental role in whether climate change targets are achieved or not. The current trend is taking us towards a 3.5 ºC long-term rise in the planet’s temperature. To avoid this we have to accelerate the rate of renewable energy growth, currently around 2.5 % per annum.

Our company has viable solutions to these challenges. Knowledge creation and a commitment to technology form the basis of our competitive advantage in the energy and environment sectors, enabling Abengoa to become a scientific and technological leader in our business areas and a privileged place for training professionals in R&D and innovation.
Abengoa Research (AR), the research institute launched in 2011, is making highly significant progress in producing and storing solar power at competitive prices, transforming municipal solid waste into bioethanol (W2B), promoting energy vectors such as hydrogen or second-generation bioethanol, the desalination and reuse of industrial water and water from other sources, and developments related to enzymes and biomass.

Abengoa has also increased the number of technology patents it holds to 261 and is acknowledged as the leading Spanish company in the international patent applications ranking. These achievements are the result of the work carried out by the company’s team of 781 researchers, as well as investment in R&D and innovation projects totaling € 426 M during the year.
We are implementing the scheduled investments in our strategic plan, arranging financing for the corresponding projects and working with partners that can make our investments sustainable.
Abengoa’s projects map has expanded this year to include countries such as Israel, Sri Lanka, Ukraine and Angola, while we have consolidated our leadership position in countries like Brazil, USA, South
Africa, Chile, Mexico, Peru and Uruguay.

Abengoa’s global presence enables us to make the most of our opportunities for growth. This year revenues have grown by 17 % to € 7,356 M compared to 2012, and this growth is also reflected in our results, with an 44 % increase in EBITDA to € 1,365 M.

At the financial level, this year we have successfully completed our listing on the NASDAQ stock exchange in the USA through a capital increase of € 517.5 M, we have raised € 1,280 M from five bond issuances and made divestments totaling € 804 M, all of which have enabled us to cover the company’s financing requirements for 2014, reduce our dependency on the banking market following the partial repayment of the syndicated loan, and to extend the maturity profile of our debt.

Corporate net debt at the end of 2013 was 2.2 times corporate EBITDA, totaling € 2,124 M. We ended the year with a cash position of € 3,878 M, which will allow us to meet our investment and debt commitments scheduled for 2014.

We believe that Abengoa will continue to grow in 2014, strengthening its financial structure and consolidating a sustainable asset rotation program.

Engineering and construction
Revenues have grown by 27 % to € 4,808 M, bringing the backlog at the end of the year to € 6,796 M. In the USA we have commissioned the world’s largest solar-thermal plant, Solana, in Arizona, which uses a pioneering system that provides six hours of energy storage for when there is no sun. Work also continues on construction of the solar-thermal plant in California, which has the same capacity. Furthermore, the US power company Portland General Electric (PGE) has selected Abengoa to develop a 440 MW combined cycle plant.

We have also been selected to construct the largest combined cycle plant in Poland, transmission lines in Europe, Latin America, Africa and Australia, and new desalination plants in the Middle East and North Africa.

Concession-type infrastructures
We have generated more than 5,700 GWh of power in solar, hybrid and cogeneration plants during 2013, as well as commissioned three new plants in Abu Dhabi (Shams 1), USA (Solana) and Spain (the Extremadura Platform) with a total installed capacity of 480 MW. We have also produced 102.1 ML of desalinated water.

The total capacity (installed and under construction) of our power plants in the USA, Abu Dhabi, South Africa, Algeria, Israel, Mexico, Brazil, Uruguay, Spain, India and the Netherlands is 2,912 MW. At present, we are also constructing new desalination plants in Algeria and Ghana, and electricity transmission lines in Brazil, Peru and Chile.

Industrial production
The construction in Hugoton, Kansas (USA), of the first industrial plant to produce second-generation ethanol using Abengoa’s proprietary technology and the development of the first Waste to Biofuels pilot plant in Salamanca (Spain) are two examples of our research and innovation work from recent years becoming a reality.

Growth and diversification
The growth model is based on simultaneously managing businesses with different profiles and characteristics. The cash flows from our traditional activities are reinvested in growing our emerging businesses. Rotating our investments is part of our business model and we have numerous options for the future that will evolve through to maturity. Abengoa Hydrogen and Abengoa Energy Crops are two such possibilities, in addition to other technological opportunities that Abengoa Research and the business groups are obtaining from their research.

The company’s international activities account for 84 % of total revenues, including our businesses in USA with 28 %, Latin America that represent 29 %, Asia 4 %, Europa 12 % and Africa 11 %.

Human capital, employment and safety
At Abengoa we know that the future depends on the creativity of the present, which in turn relies on the training and performance of the people that are part of the company. We are well aware of this fact and place special emphasis on our employees’ professional development and training. In 2013 we carried out more than 1.8 M hours of training, many in collaboration with some of the world’ most prestigious universities.

It is also important to highlight the constant preoccupation in our corporate culture for the safety of our teams and operations around the world, which is managed through a strict system of quality and occupational health and safety at every level of the organization.

Audit
In line with our commitment to transparency and diligence, we have subjected our internal control system to an independent valuation process, in accordance with PCAOB auditing principles. The Annual Report therefore includes five independently verified reports on the following areas: financial statements, SOX (Sarbanes Oxley) internal control system, Corporate Social Responsibility Report, Corporate Governance Report and the design and application of the company’s risk management system in accordance with the specifications of the ISO 31000 standard.

Corporate social responsibility and sustainable development

Penny Mathews

In a future defined by innovation and the challenges associated with sustainable development, Abengoa is committed to responsible management to reduce the negative impacts of its activities, contribute to developing the communities where we are present and building trusted partnerships with stakeholders. As a result of this commitment, in 2008 Abengoa designed a strategic corporate social responsibility plan and in 2013 we invested more than €9.1 M in social action through the Focus-Abengoa Foundation.

 

During 2013 we have intensified our partnerships with suppliers to reduce their impact and improve operations across the whole value chain.

Once again we have used the Corporate Social Responsibility Report, prepared in accordance with the principles of the Global Reporting Initiative (GRI) and the AA1000 sustainability assurance standard, to report on our social, environmental and financial performance during 2013, as well as the objectives, challenges and areas for improvements for the coming years.

We offer and use the Corporate Social Responsibility e-mail address (rsc@abengoa.com), our website (www.abengoa.com), our Twitter and Linkedin profiles and our corporate blog (blog.abengoa.com) for this purpose.

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Designing tomorrow’s materials

Francisco Montero Chacón (Researcher at Abengoa Research) and Manuel Doblaré Castellano (General Manager of Abengoa Research).

It was the Nobel laureate Richard P. Feynman’s address “There’s plenty of room at the bottom!” that inspired, already in 1959, a generation of researchers to develop what is today known as nanotechnology. Why cannot –he remarked in his probably most famous quote– we write the entire 24 volumes of the Encyclopedia Britannica on the head of a pin? Feynman’s speech was as stunning as challenging. In fact, he did not only present the idea of directly arranging atoms but, what is more valuable, also introduced the potential framework to do so. It has taken us almost half a century to know that this initially “science fiction” idea is indeed possible and, although we are not there yet, we are undoubtedly much closer.

The difficulty is how to manipulate such tiny things as atoms and also how to control the effect of such manipulation into the macroscopic properties of the material. It has been sufficiently proved that scientists are now able to work both at the smaller (i.e. the atomic level) and larger scales (i.e. the continuum level) of observation. The new challenge is working on the bridge between these two sides of the same world, in other words, linking the atoms to the structures. One of the main issues is how to drive the information across that bridge. For instance, the step from the atomic level, in which the activation energy of materials is defined, to the macroscopic level of many thermochemical processes, covers around ten orders of magnitude in the length and time scales. Thus, the information flow has to be carefully chosen in order to obtain representative results.

Nature is multiscale itself. If we look at the human scale –Feynman illustrated his speech with that example– all of the information of a human being is stored in a small fraction of a cell in the form of DNA molecules of approximately 50 atoms per bit of information. On the other way around, humans are small individuals in our planet which is a fraction of the solar system which is, once more, a spot in the Universe. This astonishing fact is very well described in the book “Powers of Ten”.

The idea is then the following: such as the human being has been able to drive important changes to its environment or as the cells do so in a human being; we could manipulate material structures at different scales in order to obtain specific desired properties. For instance, we could manipulate the pore size of microporous materials in order to capture CO2, functionalize and activate the surface of a membrane for improving water filtration devices, or create a new kind of structured materials for storage of thermal energy in concentrated solar power plants. This can be also applied to manufacturing processes, controlling important process variables (e.g. power consumption, emissions) while remaining environmentally friendly.

Multiscale modeling of materials: from atoms to structures.

Some of the aforementioned examples are not just illustrative, but some of the applications that are currently being carried out in Abengoa through the Virtual Materials Design Platform project. The main goal of this project is to provide a state-of-the-art virtual laboratory in which new innovative materials with targeted properties could be tested by our scientists. Such an approach has important advantages with respect to traditional approaches in terms of reducing the number of (expensive) experimental tests, reducing the developing costs and, most important, improving the creation of value.

This is now possible from the advances developed in the last decades in the field of computational materials science. In fact, nowadays it is possible to study matter from the most fundamental electronic scale up to real scale systems, with the aim of tailoring and optimizing the materials properties to the particular application in hands. The way scientists link these scales is the so-called multiscale approach that not only comprises bridging different length and time scales, but also the multidisciplinary interfacing of several scientific communities.

This is essential since this challenge cannot be faced by single experts but by actual multidisciplinary teams of Physicists, Chemists, Biologists and Engineers that will allow the design of multipurpose optimized materials. These will be the teams that will develop tomorrow’s materials with properties that, although unthinkable only some years ago (self-healing, environmental adaptivity, auto-assembly and reorganization) are not too far from our capabilities.

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