How have CSP costs managed to decrease so much?
- Aug 3, 2018 11:20 pm GMTAug 3, 2018 11:20 pm GMT
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ACWA Power’s Bokpoort CSP plant in South Africa. ACWA is building a similar storage-equipped plant in Dubai, with one of the lowest tariffs in the industry. Pic: ACWA Power.
New research has unpicked the record-breaking costs achieved by concentrated solar power (CSP) plants in Australia and Dubai… and concluded they could be replicated elsewhere.
Researchers Johan Lilliestam, of ETH Zürich, and Robert Pitz-Paal, of the German Aerospace Centre (Deutsches Zentrum für Luft- und Raumfahrt or DLR) found the Aurora and DEWA IV plants benefited from unusual upsides.
For the 150MW Aurora CSP plant in Australia, for example, developer SolarReserve was able to sign a 20-year power-purchase agreement (PPA) selling energy at just USD$60 per MWh thanks to a wrinkle in the contract.
The paperwork allows Aurora to sell energy outside its PPA, for instance in the early evening as increasing air conditioning loads and declining PV production cause power prices to spike.
In the Middle East, meanwhile, the 700MW Dubai Electricity and Water Authority (DEWA) IV plant, the largest CSP project in the world, came in at price equivalent to $73 per MWh thanks to an extraordinarily long PPA.
A contract set to last 35 years
The contract with offtaker DEWA is set to last 35 years, giving the plant’s consortium owners ACWA Power and Shanghai Power plenty of time to recoup their infrastructure investment.
Plus, said Lilliestam and Pitz-Paal in a paper being published in the September edition of Renewable Energy Focus, “we expect that it also has very low financing costs.”
Despite these unusual circumstances, the authors said: “Both projects can probably be replicated, either in places with an increasing PV fleet and strong ‘duck curve’ problems or in places with low policy risks and cheap capital.”
These places could include the US, Southern Europe or the Gulf region, they said. The finding is good news for energy storage, which is now seen as an essential addition to CSP.
Aurora and DEWA IV are both set to come with significant amounts of molten salt thermal energy storage (TES).
Eight hours of storage
The Australian plant, which will have 125MW of its 150MW capacity reserved for its PPA, will come with eight hours of storage, giving it a total capacity of 1.2GWh.
DEWA IV, meanwhile, is made up of a 100MW power tower with 15 hours of storage plus three 200MW parabolic trough plants with 10 hours each, adding up to 7.5GWh of TES capacity.
Tacking storage onto CSP used be considered costly, but these latest bid results prove that the opposite is true: TES can help plants capture revenue streams that allow them to be more competitive.
For example, said the authors: “The DEWA IV project has a 10% lower solar resource than the CSP stations built in the last five years or currently under construction.
“Hence, a particularly good solar resource is not the reason for the low cost—it achieves low costs despite the low DNI in Dubai.”
Pricing reductions in CSP
Previous research led by Lilliestam and published in Nature Energylast year suggested that current cost pressures and continuous industry development could lead to significant pricing reductions in CSP.
“If support policies and industrial structure are sustained, we see no near-term factors that would hinder further cost decreases,” said the researchers.
This prediction appears to have been amply confirmed with DEWA IV and Aurora. And now the ultra-low costs for these plants are helping revive flagging interest in CSP.
In Spain, for example, the industry body Protermosolar has put forward a plan to help the country achieve an 85% renewable energy system by 2030, using CSP with TES to provide energy overnight.
The proposal involves relying on PV to deliver up to around 15GW of generation capacity in daytime and an almost equal amount from TES in the evening, decreasing as energy demand falls in the small hours.
Debunking the backup myth
“The aim of the study was to debunk the myth that renewables would always need to have a significant amount of conventional backup,” said Protermosolar’s president, Dr Luis Crespo Rodríguez.
“Here in Spain, the myth says it is not viable to switch off nuclear plants in 2030 and also that we will need to maintain the entire fleet of combined-cycle [gas plants].”
Protermosolar claims its plan could help cut emissions compared to that proposed by a Spanish government expert commission, while keeping electricity prices at a similar level to today.
The industry body has sent its study to the Spanish government and is awaiting a response.
See more at Energy Storage Report.