CONCENTRATED SOLAR
POWER 2016Market Survey and Trends
New CSP Market Segments Assessment
Local Manufacturing Potential
LIFE NEEDS ENERGY
Sun energy creates: wind, waves,
biomass, oil, coal, hydro.
GravityNuclearSun
Geothermal
Biomass
Wind
Oil, Gas, Coal
Waves
Sun
hydro Reliable, Clean, Safe, Secure,
Affordable
CSP TECHNOLOGIES AVAILABLE
2017-Mar-07 [email protected] 4
• Conceptually similar, concentrate solar DNI and generate electricity via thermodynamic cycle
• Parabolic Dish-Stirling is ill-suited for TES, omitted from study
HYBRIDIZING CSP -100% RENEWABLE
ELECTRIC
HYBRIDIZATION
CSP+PV CSP+WIND
THERMAL
HYBRIDIZATION
CSP+BIOMASS CSP+GEOTHERMAL
2017-Mar-07 [email protected] 5
TES
PV
CSP
Steam Turbine
ELECTRICAL GENERATION
TES
CSP
Steam Turbine
ELECTRICAL GENERATION
Wind Turbine
Biomass Boiler
CSP
Steam Turbine
ELECTRICAL GENERATION
GEOTHERMAL
CSP Steam Turbine
ELECTRICAL GENERATION
HYBRIDIZING CSP-FOSSIL FUELS
LOW SOLAR
SHARE
Solar-aided power gen. (SAPG) Integrated Solar CC (ISCC)
HIGH SOLAR
SHARE
Decoupled Solar CC (DSCC) DSCC with PV
2017-Mar-07 [email protected] 6
Coal / Fuel / Boiler
CSP
Steam Turbine
ELECTRICAL GENERATION
Gas Turbine
HRSGCSP
Steam Turbine
ELECTRICAL GENERATION
Gas Turbine TES
CSP
Steam Turbine
ELECTRICAL GENERATION
Gas Turbine
TES
CSP
Steam Turbine
ELECTRICAL GENERATION
PV
INSTALLED CAPACITY
Trend in Technology choice
2017-Mar-07 [email protected] 7
PT79%
HY3%
CT12%
DS0%
LF6%
Technology choice, actual
PT HY CT DS LF
STATUS IN MENA COUNTRIES
• MENA CSP CTF Investment Plan has been a driving force in the region
• All MENA countries under study have signed the Paris Agreements, most have submitted INDCs
2017-Mar-07 [email protected] 8
CountryImplementation
PeriodGHG Target Type Greenhouse gas emission
Cost of implementation
Algeria 2021-2030Baseline scenario
target7-22% by 2030
Egypt 2015-2030 Not applicable USD 73 million
Jordan 2013-2020Baseline scenario
target1,5% by 2030 compared to BAU
Morocco --Baseline scenario
target32% by 2030 compared to BAU
Tunisia 2015-2030 Intensity Target7t CO2 per capita in 2010, target in 2030: 3,4t CO2per
capita. (48% reduction)USD 45 billion
Libya Not submittedSaudi Arabia 2021-2030 130 million tons of CO2eq avoided annually by 2030
Kuwait Actions onlyOman 2020-2030 Fixed Level Target GHG emissions growth by 2%UAE Not applicable
CSP TECHNOLOGY COMPARISON
2017-Mar-07 [email protected] 30
Technology PT LF DS CT
Typical size (MW) 10 – 280 1 – 125 1 10 – 135
Concentration Factor 70 – 80 25 – 100 600 – 4000 600 – 1200
Capacity Factor (%) 30 – 50 20 – 30 20 – 30 40 – 70
Operation Temperature (ºC) 293 – 393 140 – 275 250 – 700 290 – 565
Solar Electric perf. (%) 16 – 18 9 – 11 12 – 25 16 – 20
Installed worldwide (MW) 4,336 319 3 689
Use of land (MWh/(ha·year)) 600 – 1,000 600 – 1,000 400 – 800 400 – 800
Maturity Commercial Commercial Demo Commercial
Reflector Parabolic mirror Flat/curved mirror Paraboloid mirror Curved mirror
ReceiverAbsorber tube w/
vacuum coverAbsorber tube w/
concentratorStirling engine /
gas turbineExternal / Cavity
HTF Thermal oil Saturated steam AirMolten salt / Water-steam
TESMolten salts,
indirectSteam
accumulatorN/A
Molten salts, direct / steam accumulator
TES capacity 4 – 12 hours < 1 hour N/A 6 – 14 / < 1 hours
Hybridization capable Yes, existing Yes Unlikely Yes
CSP, PV OR HYBRID?
• On production cost alone, PV is, today, significantly cheaper than CSP; it is also more modular and easy to design, construct, maintain and operate• System costs not reflected in LCOE
• When dispatchability is required, TES is cheaper to install and to run, which gives CSP a competitive edge. If combined with cost reduction, utility scale makes more sense with CSP
• Hybridizing CSP with fuels can ease the path, reducing emissions while providing track record to CSP, and time to amortize plants in operation
2017-Mar-07 [email protected] 31
2017-Mar-07 [email protected] 32
Note: Values in USD/MWh (2016). WACC = 8%, 25 year technical life for solar (PV-CSP)
0
20
40
60
80
100
120
140
160
180
200
LCOE Range for Different Technologies
A NOTE ON SYSTEM COSTS
• Price of electricity value for the customers: as much as they need, where and when it is needed
• LCOE production cost, regardless where or when
• From LCOE to price integration costs: transmission lines (where) and backup (when)• Low capacity factor increases the unit cost of lines
• Also ancillary services not provided by PV, wind
• High RE mix integration costs can trump LCOE
• CSP integration costs are as low as conventional, especially if hybridized
2017-Mar-07 [email protected] 33
A NOTE ON SYSTEM COSTS (2)
• MENA countries have a firm generation portfolio, penetration of PV/wind is possible but it has a limit
• A country/system level analysis is required to ensure grid stability
• Robust scenarios should be developed for medium/long term demand (economic & population growth) and generation (emission targets, system costs, impact of RE in wholesale market)
2017-Mar-07 [email protected] 34
UNCERTAINTY IN PROJECTIONS
• Half a decade ago, expectations for CSP deployment were much higher than the current situation: most long-term forecasts and country plans have not been fulfilled
• Scenarios must be cross-checked with cost projections
2017-Mar-07 [email protected] 36
0
5
10
15
20
25
30
35
40
45
2015 2018 2021 2024 2027 2030
Insta
lled C
apacity
, G
WBAU-reference STE-GO2016 GP-IEA
ID-optim ID-reference RD-reference
RD-pessimScenarios:
BAU: business as usualID: increased deploymentRD: reduced deploymentSTE-GO: Solar Thermal
Electricity Global Outlook 2016GP-IEA: Greenpeace-IEA
BUSINESS AS USUAL SCENARIO
2017-Mar-07 [email protected] 37
Scenarios:BAU: business as usualSTE-GO: Solar Thermal
Electricity Global Outlook 2016GP-IEA: Greenpeace-IEA
Scenario considering plants identified in the pipeline worldwide, up to 2025
• Operating
• Under Construction
• Under Development
• Under Planning
• Announced
Constant growth after 2025
± 20% region for optimistic-pessimistic expectations
SCENARIO IN MENA
• Under BAU assumptions, deployment is moderate
• If exporting energy to Europe is realized (DESERTEC or similar) it can be a total game-changer
2017-Mar-07 [email protected] 38
0
1
2
3
4
5
6
7
8
9
10
2016 2020 2025 2030
Insta
lled C
apacity
, G
W
Algeria Egypt Jordan
Kuwait Libya Morocco
Saudi Arabia Tunisia UAE
EXPORT MENA countries MENA pessimistic
MENA optimistic
IMPACT ON LCOE
Tower Parabolic Trough
2017-Mar-07 [email protected] 42
55%
15%
30%
Investment cost O&M cost
Financial cost
59%
13%
28%
Investment cost O&M cost
Financial cost
ELEMENTS IMPACTING COST
• Installed cost• Hard costs: hardware (machinery, structures, etc.)
• Soft costs: services (engineering, design, installation, etc.) and project development (studies, permitting, etc.)
• O&M cost• Fixed costs: permanent staff, insurance, land rental
• Variable costs: auxiliary staff, spare parts, consumables
• Capacity factor
• Risk concentrated on investment (as opposed to conventional, risk concentrated on operation)
2017-Mar-07 [email protected] 43
COST MODELLING
• Bottom-up model considering:• Learning by doing
• Learning by researching
𝐶𝑦𝑒𝑎𝑟𝑖 = 𝐶0
𝑖 ·𝑃𝑦𝑒𝑎𝑟𝑖
𝑃0𝑖
log2 𝑃𝑅𝑖
· 𝐾𝑆 −𝑏𝑖
• Economy of scale
𝐶𝑠𝑖𝑧𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑝𝑜𝑤𝑒𝑟 𝑝𝑙𝑎𝑛𝑡𝑖 = 𝐶0
𝑖 ·𝑃𝑠𝑖𝑧𝑒𝑖
𝑃0𝑖
𝑁
• Validation of parameters (𝑃𝑅𝑖, 𝑏𝑖, 𝑁) is carried out with historical data of whole plant costs
2017-Mar-07 [email protected] 47
COST MODELLING
• Validation results show good correlation (r>90%) average is well represented
• High dispersion (RMSD≈40%), large plant-to-plant variation
• Average relative error ≈8%)
2017-Mar-07 [email protected] 48
COST MODELLING
• Each component cost 𝐶𝑖 correlates with one metric 𝑃𝑖
• Nominal power sets the cost for:• Power block
• BoP
• EPC cost
• Owner’s cost
2017-Mar-07 [email protected] 49
Reco
mercializatio
n
COST MODELLING
• Each component cost 𝐶𝑖 correlates with one metric 𝑃𝑖
• Storage capacity sets the cost for:• Storage system
Values were corrected for the different operation temperature in CT and PT
2017-Mar-07 [email protected] 50
COST MODELLING
• Each component cost 𝐶𝑖 correlates with one metric 𝑃𝑖
• Peak power sets the cost for:• Erection and civil
• HTF fluid/system
• Mirror
• Structure/tracker
• Receiver
2017-Mar-07 [email protected] 51
COST REDUCTION POTENTIAL TO 2025
Tower Parabolic
2017-Mar-07 [email protected] 53
0%
5%
10%
15%
20%
25%
Stru
ctu
re &
…
Rec
eive
r_To
wer
EPC
co
st_T
ow
er
Sto
rage
sys
tem
Ow
ner
's…
Mir
ror
Erec
tio
n a
nd
civ
il
Bo
P
Po
wer
blo
ck
0%2%4%6%8%
10%12%14%
Stru
ctu
re &
…
Sto
rage
sys
tem
HTF
sys
tem
Re
ceiv
er_
PT
EPC
co
st_P
T
Mir
ror
Ow
ner
's c
ost
_PT
HFT
flu
id
Erec
tio
n a
nd
civ
il
Bo
P
Po
wer
blo
ck
Both Hard and Soft costs have a significant potential impact
Uncertainty in projections is significant; values are provided to illustrate expected trends only, discretion is advised
LCOE FORECASTED EVOLUTIONTower Parabolic
2017-Mar-07 [email protected] 55
0
50
100
150
200
250
300
USD
/MW
h
0
50
100
150
200
250
300
USD
/MW
h
0
50
100
150
200
250
300
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
USD
/MW
h
PT - FORECASTED LCOE EVOLUTION 2016-2025
Upper uncertainty limit LCOE PT Spain (Moron) LCOE PT USA (Dagget)
LCOE PT Tunisia (Akarit) LCOE PT KSA (Duba 1) LCOE PT Algeria (Hassi R'mel)
LCOE PT Egypt (Kuraymat) LCOE PT Morocco (Ouarzazate) LCOE PT Libya (Tazirbu)
LCOE PT Jordan (WECSP) Lower uncertainty limit
Uncertainty in projections is significant; values are provided to illustrate expected trends only, discretion is advised
TECHNICAL CHALLENGES
Cost reduction
• New HTF and cycles
• Structures and trackers
• Reflectors
• Receiver
• TES
Soft cost reduction is not in typical R&D programs
Other approaches
• New applications
• Dispatchability /firmness value
• Synergies
• Scale limits
• Use of water
• Hybridization
2017-Mar-07 [email protected] 57
EVOLUTION OF R&D INVESTMENT –PUBLIC
2017-Mar-07 [email protected] 58
0
250
500
750
1000
1250
1500
1750
2000
0
25
50
75
100
125
150
175
200
225
2000 2002 2004 2006 2008 2010 2012 2014An
nu
al In
vest
men
t (M
illio
n U
SD/y
ear)
CHINA+INDIA MENA COUNTRIESAUSTRALIA USAEU R&D PROGRAMS EUROPEAN COUNTRIESAGGREGATED PUBLIC R&D INVESTMENT
Aggregate
d In
vestmen
t (Millio
n U
SD)
EVOLUTION OF R&D INVESTMENT –PRIVATE & AGGREGATED
2017-Mar-07 [email protected] 59
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
0
50
100
150
200
250
300
350
400
450
500
550
2000 2002 2004 2006 2008 2010 2012 2014
An
nu
al In
vest
men
t (M
illio
n U
SD/y
ear)
TOTAL PUBLIC R&D TOTAL CORPORATE R&D AGGREGATED R&D INVESTMENT
Aggregate
d In
vestmen
t (Millio
n U
SD)
INNOVATION AND COST REDUCTION
Some key aspects are not included in “typical” R&D
• Soft costs in development and EPC
• Risk reduction / cost of capital
• O&M costs
• New business models
2017-Mar-07 [email protected] 60
CSP STATUS
• Half a decade ago, expectations for CSP deployment were higher than the current situation: most long-term forecasts and country plans have not been fulfilled.
• There is not only one reason for this: • the quick cost reduction of PV made it a more attractive
alternative (so some efforts were moved from CSP to PV);
• several other initiatives were halted, hoping that a PV-like cost reduction would bring CSP’s LCOE closer to grid parity;
• when the cost reduction was not as quick as expected , the sector risked entering a vicious circle as a slower deployment further slowed cost reduction.
2017-Mar-07 [email protected] 62
CSP’S FUTURE
• The future development of CSP is linked to its ability to provide value to the electric system in comparison with other alternatives.
• CSP’s strengths, beyond possible cost break throughs, are: • cheap storage,
• demand management capabilities,
• ancillary services, etc.
2017-Mar-07 [email protected] 63
CSP’S FUTURE
• There is potential for cost reduction in both hard and soft costs, but some chapters (civil works, power block, BoP, EPC cost and Owner’s cost) have barely improved despite its significant impact
• Soft costs are not a typical target in R&D programs
• Other approaches beyond cost reduction (synergies, alternative applications) can improve CSP’s competitiveness
• Monetizing CSP energy’s desirable properties would help it compete in equal terms with PV, wind
2017-Mar-07 [email protected] 64
CSP’S FUTURE
• Hybridization can be a key to the future of CSP:• Hybridizing CSP with fuels can ease the path, reducing
emissions while providing track record to CSP, and time to amortize plants in operation
• CSP integration costs are as low as conventional, especially if hybridized
• Risk is concentrated on investment in CSP, and on operation in conventional; hybrids can have a better balance between both, diluting them
2017-Mar-07 [email protected] 65
CSP IN MENA COUNTRIES
• The experience in MENA countries has followed the same technology implementation pattern: first CSP power plants used PT technology in the Solar Field (ISCCs, Shams), but are already considering the development of solar tower projects.
• MENA Countries can profit from the availability of CTF funds to minimize financing costs, reducing the final energy prices. Risk allocation will be crucial as well as reducing the uncertainty in countries accessing concessional financing.
2017-Mar-07 [email protected] 66
CSP IN MENA COUNTRIES
• CSP can be the backbone of a highly renewable energy system in the MENA countries, providing advantages when compared with intermittent renewable energies with chemical back-up or conventional back-up capacity
• MENA Countries may gain relevance in CSP industry through the development of concepts as DESERTEC, contributing to support the future development of CSP
• High electricity interconnection and the option of a transnational market opens possibilities for developers and off takers, adding flexibility and increasing competition
2017-Mar-07 [email protected] 67
CSP IN MENA COUNTRIES
• MENA countries can benefit from the lessons learned during the development of CSP technology and become relevant players of the industry.
• CSP deployment on the selected MENA countries can become a reality if several key conditions are fulfilled: • uncertainty (perceived risks in the region ) is reduced,
• realistic targets are set up to supply local market, and
• an appropriate frame is defined to provide energy to Europe
2017-Mar-07 [email protected] 68
CONTENTS
Technology – Process Integration CSPCSP vs Business as Usual (BAU). TodayFuture TrendsCSP DeploymentInvestment required and cost savingsEmission Savings (COP21)
Solar Field (SF)
ThermalEnergy
Storage (TES)
Heat Transfer Fluid (HTF) System Power Block (PB)
HOT
COLD
PROCESS INTEGRATION CSP
Depending on the application, TES or hybrid configurations may be needed, due to economicand security of supply reasons.
PROCESS INTEGRATION CSP
Depending on the application, TES or hybrid configurations may be needed, due to economicand security of supply reasons.
Solar Field (SF)
ThermalEnergy
Storage (TES)
Heat Transfer Fluid (HTF) System
HOT
COLD
Oil Production
Oil Refineries
Chemicals Manufacturing
Water Heating
Agriculture
Mining
PROCESS INTEGRATION CSP -REQUIREMENTS
• Minimum thermal power: 10 MWth
• Land availability
• Technical feasibility
• Stable energy demand
• Project lifetime: 15-20 years
• High investment
• Consumer commitment
NATURAL GAS AND OIL HISTORY PRICES:
Data obtained as a mean value of Fuel Prices included in “BP Statistical Review of World Energy June 2016”. Available on-line at:http://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2016/bp-statistical-review-of-world-energy-2016-full-report.pdf
0.0
0.5
1.0
1.5
2.0
2.5
Dimensionless evolution of fuel costs (Ref 2015 prices)
Natural Gas Oil
OIL CONSUMPTION IN OIL PRODUCTION
- Source: US International Revenue Service & California Energy Commission.
4 Oil Barrel1 Oil Barrel
THERMAL APPLICATIONS:CSP LCOE VS BAU LCOE (2017-2030)
Fuel cost uncertainty ranges defined according to the Mean Cost Variance of the fuel during the 2000-2015 period, defined as:
𝑉𝑎𝑟 ത𝑋 =1
𝑛·𝑆𝑋ത𝑋
CSP cost uncertainty defined as Max CSP LCOE value +20% and Min CSP LCOE value – 20%LCOE cost for auxiliary fuels only considers fuel costs (96% of total costs)
0
10
20
30
40
50
60
70
80
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
LCO
E (U
SD/M
Wh
_th
)
Uncertainty range MEAN LCOE CSPLower uncertainty limit CSP LCOE Upper uncertainty limit CSP LCOENATURAL GAS MAX NATURAL GAS MEANNATURAL GAS MIN FUELOIL MAXFUELOIL MEAN FUELOIL MIN
FUEL-OIL
CSP
NATURAL GAS
CONSUMPTION VS TEMPERATURE AND
LCOE GAP (MENA COUNTRIES)
Water Heating (Natural Gas); 86
Water Tratment and Conditioning; 5
Agriculture; 11
Biogas Production; 6
Natural Gas Transport Grid; 4
Mining; 6
Drying; 12
Solar Heating and cooling; 10
Solar Ice; 4
Oil Extraction (EOR); 316
Oil Refining; 102
Chemicals Manufacturing
(Natural Gas); 22
Solar Cooking ; 4
Desalination MED; 12
Water Heating (Fuel); 43
Chemicals Manufacturing (Fuel); 2
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
35
40
0 100 200 300 400 500 600
Diffe
ren
ce
be
twe
en
BA
U a
nd
CS
P L
CO
E in
20
16
(U
SD
/MW
h-t
h)
Temperature (ºC)
PREVIOUS EXPERIENCES
- CSP Ready Technologies are the ones that present a possitive LCOE value compared to BAU with significant market potential- CSP Potential Technologies are the ones that present a possitive LCOE value compared to BAU or have a significant market potential.
Application Country Project Installed Capacity
Agriculture AustraliaPort Augusta
Greenhouse39 MW_th
Oil Extraction
(EOR)USA Coalinga 29 MW_th
Oil Extraction
(EOR)Oman PDO Pilot 7 MW_th
Oil Extraction
(EOR)Oman Miraah 1 GW_th
Mining Chile El Tesoro 10 MW_th
CLASSIFICATION OF CSP THERMAL
APPLICATIONS
• Classification of CSP thermal applications:
CSP Ready CSP Potential
- Oil Extraction- Mining- Agriculture
(Greenhouses)- Fuel-oil substitution
- Oil Refining- Water Heating (Large)- Chemicals
Manufacturing(Saturated Steam)
- CSP Ready Technologies present cost-competitive values (LCOE) compared to BAU and previous experiences- CSP Potential Technologies present cost-competitive values (LCOE) compared to BAU or significant market potential.
INVESTMENT AND POWER INSTALLED PER YEAR
(2017-2030)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
0.0
1.0
2.0
3.0
4.0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
An
nu
al In
vest
men
t (B
illio
n U
SD/y
ear)
Ther
mal
Po
wer
Inst
alle
d (G
W_t
h/y
ear)
Solar Ice AgricultureMining (MW_th/year) Chemicals Manufacturing (MW_th/year)Water Heating (MW_th/year) Oil Refining (MW_th/year)Oil Extraction (MW_th/year) ANNUAL INVESTMENT (Billion USD/year)
EMISSION SAVINGS (2017-2030)
Only 2017-2030 period is reflected. 2030-2050 period present constant emmission savings as 2030, and decreasing during the last 13 years due to the end of the lifetime of the CSP plants.
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Aggre
gate
d E
mis
sio
n S
avin
gs (
Mill
Tonnes C
O2)
Annual
Em
issio
n S
avin
gs (
Mill
Tonnes C
O2/y
ear)
Oil Extraction (Annual) Oil Refining (Annual)
Water Heating (Annual) Mining (Annual)
Chemicals Manufacturing (Annual) Solar Ice (Annual)
Agriculture (Annual) Aggregated Emission Savings (Total)