This spring semester, I had the honor to serve as team leader for an Eller MBA Field Project. Eller MBA utilizes field projects to provide first-year MBA students and graduate students from other disciplines consulting experience that utilizes and builds upon the skills and knowledge acquired from the core MBA courses. My Eller MBA Project Team consisted of myself and 3 other Eller MBA students assigned to lead the staff at AzRISE in one of their current organizational projects.
AzRISE is a global institute at The University of Arizona built on partnerships that span academia and industry with the goal of driving innovative solar energy solutions, grounded in sound research, economic and public policy that transform the lives of individuals and communities.
AzRISE’s Field Project for Eller MBA was to have our team create an economic optimization model that AzRISE could use to communicate to their partners the value of generating and storing solar power that could be used by the residents of Arizona and would serve as an example of a viable commercial solar solution that could be replicated throughout the country.
With increased energy cost, Americans have become familiar with our increasing reliance on foreign oil. Solar energy has been identified as one of our country’s natural resources that could be utilized in our effort to reduce our country’s energy dependence and at the same time help to preserve fossil fuels. It is only fitting that the great state of Arizona with its abundant supply of solar energy play a key role in leading our country in finding innovative solar energy solutions. One of the solutions proposed is to combine solar energy harvesting with a Compressed Air Energy Storage (CAES) system.
The CAES method, which has existed for over 30 years, is the process of converting energy into compressed air to be stored in a cavity such as a metal tank or underground cavern such as a salt mine. This stored energy can then been released later during periods when the power source is not as readily available. In our project, solar energy is the power source and the CAES system could be utilized to help electric utilities extend the power of the sun to late afternoon and evening when demand for electricity peaks but solar power is almost nonexistent.
Over the past 20 weeks, our Eller MBA Field Project team has gathered information from existing solar research, industry experts and electric utility providers to create an economic model that could be used in evaluating the proposed Solar/CAES system. The findings from our research will be used to help interested parties understand how best to harness the power of the sun while being financially mindful of the economic returns from their effort to meet the electric demands of our citizens. The economic model our Eller MBA team has created is the first economic model to calculate the economic value of a Solar/CAES system for over a 20 year period. Our economic model includes the components for producing solar power, the components of a CAES system and the value that a Solar/CAES system could present to investors.
The information provided by our economic model will help investors from the private sector, government agencies, electric utilities, solar manufacturers and researchers identify the barriers that currently delay Solar/CAES systems from being utilized commercially. By identifying and then leading the effort to remove those barriers, AzRISE will help society in our efforts to harness the enormous opportunity that exists in solar power.
If you or your organization have a business project and want to inquire if The University of Arizona Eller MBA could help, visit http://ellermba.arizona.edu or contact Eller MBA at (520) 621-4008. If you would like to become involved in the future of solar power or learn more about the economic model created by our team, visit http://www.azrise.org for more information.
Note: I wrote this post for The University of Arizona Eller College of Management’s Blog. Click here to view the original post published Friday, April 24, 2009.
