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MASEN, SENER, TSK Flagsol and World Bank in conversation - Moroccan CSP Industry

6 JUNE 2019

MASEN, SENER, TSK Flagsol and World Bank in conversation - Moroccan CSP Industry

Gain strategic insight on operational expertise, market outlook & opinion industry with influential players in Morocco’s CSP market.

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Q&A - Commercial and technical considerations for process heat applications

Solatom Miguel Frasquet CEO Solatom

Aalborg CSP Svante Bundgaard CEO Aalborg CSP

Industrial Solar Tobias Schwind CEO Industrial Solar

Protermo Solar / Solar Concentra Diego Crespo Lobbyist & Technological Platform Coordinator Protermo Solar / Solar Concentra

Rackam Jacques-Alexandre Fortin VP Rackam

Heliac Jakob Jensen CCO Heliac


Global installed CSP costs drop 26% in 2018; Credit Suisse enters CSP ownership in Spain

5 JUNE 2019

Global installed CSP costs drop 26% in 2018; Credit Suisse enters CSP ownership in Spain

Global CSP costs drop 26% in 2018, capacity factors rise

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The average levelized cost of energy (LCOE) of new CSP plants fell by 26% in $2018 to $185/MWh as developers implemented the latest technology and installation learnings, the International Renewable Energy Agency (IRENA), said in a new report.

Some 0.5 GW of new CSP plants were commissioned in 2018, predominantly in China, Morocco and South Africa. Installed costs ranged between $3,400/kW and $7,000/kW, depending on project location and storage duration, IRENA said.

Average CSP costs should fall further this year as a number of Chinese plants will come online at lower installed costs, IRENA said. Recent project tenders show that a "step change" in costs will occur in the next four years, placing costs consistently in the range of $60/MWh to $100/MWh, it said.

CSP developers are using design and installation learnings and economies of scale to lower CSP plant costs.

Last month, Morocco awarded the 800 MW CSP-PV Noor Midelt I project to an EDF-consortium at a record low price of $71/MWh. ACWA Power and partners are currently developing the 950 MW Noor Energy 1 CSP-PV project in Dubai at a price of $73/MWh.

Rising capacity factors are also helping to drive down CSP costs, IRENA noted.

The global weighted average capacity factor of CSP plants rose by six percentage points in 2018 to 45%, it said.

Average CSP capacity factors by technology, storage duration

Average CSP capacity factors by technology, storage duration

Source: IRENA's 'Renewable Power Generation Costs in 2018' report, May 2019.

Credit Suisse closes financing on 250 MW of CSP in Spain

Credit Suisse Energy Infrastructure Partners has completed the purchase of a 49% stake in 250 MW of Spanish CSP capacity from ContourGlobal, Credit Suisse announced May 22.

ContourGlobal, a UK-based power plant investment group, purchased the five 50 MW assets from Spain's Acciona last year. The plants are situated in south-west Spain and came online between 2009 and 2012.

Credit Suisse paid 134 million euros ($149.7 million) for the 49% stake, almost double the net investment made by ContourGlobal.

ContourGlobal will continue to manage, operate and maintain the assets.

The deal is the latest in a line of recent renewables acquisitions by Credit Suisse.

In October 2018, Credit Suisse acquired a 49% stake in ContourGlobal's 65 MW Italian PV portfolio and its 35 MW PV fleet in Slovakia. Credit Suisse will also hold an 80% stake in a new 470 MW wind farm planned in Sweden. Germany's E.ON will hold the remaining 20% equity.

Spain's minority Socialist government aims to double CSP capacity to 4.8 GW by 2025 and reach an installed capacity of 7.3 GW by 2030, according to a new 10-year energy plan set out by the government in February.

Since 2012, new CSP installations have slowed after the government introduced sales taxes and removed subsidies.

The government’s new plan, which will be reviewed by the European Commission (EC), would raise Spain's installed PV capacity from 8.4 GW in 2020 to 23.4 GW in 2025. Wind capacity would rise from 28.0 GW in 2020 to 40.3 GW in 2025.

Spain direct normal irradiance (DNI)

Spain direct normal irradiance (DNI)

Map source: Solargis

Noor Midelt winner optimizes CSP trough, storage to hit record price

5 JUNE 2019

Noor Midelt winner optimizes CSP trough, storage to hit record price

An EDF-led group has won the Noor Midelt I project in Morocco with an integrated parabolic trough CSP-PV design which uses multiple energy storage types in a new efficiency breakthrough, TSK, the project's EPC and technology supplier, told Reuters Events.

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On May 21, Morocco awarded the Noor Midelt I CSP-PV project to a consortium led by France's EDF at a new record low price of 68 dirhams/MWh ($71/MWh).

The consortium, which includes the UAE's Masdar and Morocco's Green of Africa, will build an 800 MW facility with five hours of energy storage capacity, the Moroccan Agency for Sustainable Energy (Masen) said. Spain's TSK group will act as technology provider and engineering procurement contractor (EPC).

Noor Midelt I will consist of 200 MW of parabolic trough CSP capacity and will use a combination of thermal energy storage and battery storage technologies for greater efficiency, Oliver Baudson, Managing Director at TSK Flagsol, the specialist CSP subsidiary of TSK, told Reuters Events.

TSK Flagsol will supply its HelioTrough collector technology and design optimization favored 800 MW of total installed capacity, Baudson said.

The plant will be located 20 km north of the town of Midelt in central Morocco, on a site measuring direct normal irradiance (DNI) of around 2,360 kWh per square-meter per year. Construction will begin in Q4 2019 and the plant is due online by 2022, EDF said.

The tariff price sets a new low for CSP generation, coming in just below the $73/MWh tariff agreed for ACWA Power's 950 MW Noor Energy 1 CSP-PV project in Dubai.

Global levelized costs for solar, wind in 2010-2022

Global levelized costs for solar, wind in 2010-2022

Source: IRENA's 'Renewable power generation costs in 2018' report (May 2019).

The lower price for Noor Midelt I shows how design and installation innovations and Morocco's supportive development framework are continuing to drive down costs. The project will also receive significant financing support from multilateral groups and the tariff price is around half the tariff price awarded to ACWA Power's Noor III CSP tower plant which came online in December.

CSP developers are using economies of scale and design efficiencies from combining CSP and PV to lower the levelized cost of energy (LCOE).

Noor Midelt I will be a fully integrated single plant concept, unlike the Noor Energy 1 project in Dubai, where CSP tower, parabolic trough and PV technologies will be co-located.

Noor Midelt I has achieved a lower price than Noor Energy 1 despite a shorter power purchase agreement (PPA). The Noor Midelt I tariff is based on a 25-year PPA with Masen, EDF confirmed to Reuters Events. The Noor Energy 1 price is based on a 35-year PPA which helps spread costs across a longer generation profile.

Continuing design and installation innovations are lowering global CSP prices into new territory, the International Renewable Energy Agency (IRENA) said in a report published last month.

Recent project tenders show that a "step change" in costs will occur in the next four years, placing costs consistently in the range of $60/MWh to $100/MWh, it said.

Design innovations

CSP developers are increasingly turning to PV technology to increase plant efficiency and reduce costs. Developers of hybrid CSP-PV plants predict savings from shared installation and operational costs, as well as performance gains from coupled designs.

The Noor Midelt I project achieves a low tariff price by deploying each technology at its “sweet spot," Baudson said.

The design is based on “major generation of cheap PV during the daylight hours and major deployment of flexible and dispatchable CSP beyond such sunlight hours," he said.

Noor Midelt I will integrate different storage systems, including thermal energy storage and battery storage, into a single plant concept.

"CSP is by far the cheapest technology to operate from storage," Baudson noted. "So in this project with its particular requirements a commercially highly attractive blending of different energy sources and cost could be achieved."

The hybrid design will provide installation savings by reducing the size of the solar field compared with a stand-alone CSP project, Baudson added.

The PV field will be constructed in parallel to the CSP plant. Faster build times for PV could, depending on contractual requirements, provide earlier generation revenues for the project, he said.

Morocco push

The Noor Midelt I project forms part of Morocco's plan to supply 52% of power generation from renewable sources by 2030, equivalent to 6 GW of new capacity.

Morocco has already completed three CSP plants at its Noor Ouarzazate solar park for a combined capacity of 510 MW. All three CSP plants have storage capacity and were developed by a group led by ACWA Power.

The dispatch capabilities of CSP with storage fulfils Morocco's load requirements. Morocco has a direct need for night-time power, which will be served by the five hours of storage on the Noor Midelt I project.

Morocco's supportive development framework has already driven down costs for stand-alone CSP projects.

For the parabolic trough plants at Noor Ouarzazate, prices fell from $189/MWh for the Noor I plant, commissioned in 2016, to $140/MWh for Noor II, online since early 2018.

Morocco is utilising a "plug and play" approach to plant procurement, where many development and financial risks are assumed by Masen.

Masen acts as offtaker, selling on the power to the Moroccan state, and provides lending resources and minority shareholder equity to the projects. In addition, Masen manages risks associated with land acquisition and social issues and carries out a range of studies to reduce development risk, including geotechnical, hydrological and environmental impact studies.

This process allows the bidders to "focus on proposing the best tariff per kilowatt-hour and the best technical configuration," Meryem Lakhssassi, Sustainable Development Officer at Masen, told the MENA New Energy 2018 conference in Dubai.

"All these elements are in favour of efficiency, in terms of timing and transaction," Lakhssassi said.

Financing costs for CSP plants typically represent around half of total project costs and the Noor plants have benefited from multilateral finance which have produced competitive terms on pricing and tenor.

The Noor Midelt I project is set to receive support from Germany's KfW, The European Investment Bank (EIB), the French Development Agency (AFD), the European Commission (EC), the World Bank, the Clean Technology Fund (CTF) and the African Development Bank (AfDB), Masen said.

This multilateral support will play a key role in minimizing costs.

For the Noor I project, for example, concessional financing reduced the LCOE by around a quarter, according to ACWA Power.

Texas growth could drive next wave of US CSP build

8 MAY 2019

Texas growth could drive next wave of US CSP build

Rising power demand and renewables in Texas could support several gigawatts of CSP capacity in the 2030s but gas and battery prices remain a key risk for developers, Caitlin Murphy, Senior Energy Policy Analyst at the National Renewable Energy Laboratory (NREL), told Reuters Events.

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Cost reductions pursued by CSP developers could reinvigorate demand for new projects in the U.S. and open up new markets in Texas and the Southeast, according to a recent paper by NREL.

Long-term power demand growth and rising PV and wind penetration will improve the business case for CSP plants with storage to provide power during the evening and night-time, the report said.

The U.S. currently around 2 GW of CSP capacity, three quarters of which is in California. Under an optimum cost scenario, the U.S. could potentially host as much as 158 GW of CSP by 2050, accounting for 10% of total generation capacity and 16% of delivered electricity, NREL said.

The study assumes the CSP industry remains on track to hit the Department of Energy (DOE) 2030 cost reduction targets set out under the Sunshot initiative. The DOE targets a cost of $50/MWh for CSP plants with 12 hours storage, down from an estimated $103/MWh in 2017. The 2030 target for peaker CSP plants is set at $100/MWh.

A key finding of the NREL study is that CSP could become cost competitive across the U.S. South and Southeast, expanding capacity beyond Southwest markets.

US installed CSP market share by state (MW)


Source: Reuters Events's Global CSP Tracker

NREL's study shows that Texas could see some of the first CSP build in the next wave of projects, along with sun-rich Southwest regions. In particular, the Texas Panhandle region in the north-west of the state boasts high-quality solar resources.

“Our analysis shows that new CSP capacity could be deployed in Texas beginning in the 2030s,” Murphy, lead author of the report, told Reuters Events.

“CSP deployment in Texas ranges from 1 GW under less favorable conditions to 10s of GW under highly favorable conditions,” she said.

Texas growth

NREL's study used the Regional Energy Deployment System (ReEDS) model which estimates the least-cost solution for the type and location of future generation and transmission capacity.

Based on the analysis, Texas could see similar CSP growth and cumulative capacity to California, despite lower solar resources.

Texas power demand is forecast to grow by 43% by 2050, the highest growth prediction in the U.S., according to assumptions used in the study.

Texas is also forecast to see sharp growth in PV and wind capacity, raising the need for dispatchable capacity.

Even with the lowest wind cost scenario used in the report, over 10 GW of CSP capacity could be installed in Texas, it said.

“This points to the potential synergies between these renewable sources, each of which can help satisfy the overall demand profile in Texas,” Murphy told Reuters Events.

               Forecast installed capacity in Texas under different cost scenarios

                                                              (Click image to enlarge)

Source: NREL report: The Potential Role of Concentrating Solar Power within the Context of DOE’s 2030 Solar Cost Targets (January 2019)

In addition, Texas interconnection links would allow operators to transport excess power to higher demand eastern U.S. markets.

Project cost assumptions in Texas are also slightly lower than those in western markets, including labour wage and productivity, land costs and site analysis costs, the report noted.

While Texas fundamentals indicate significant CSP potential, future trends in U.S. gas prices and global battery costs will impact deployment.

Dispatch rivals

Natural gas prices will be a key driver of CSP competitiveness across the US, since gas-fired plants boast similar dispatchable power credentials.

“Even if DOE’s cost targets are achieved, the extent to which CSP could become cost-competitive in Texas is still highly sensitive to future natural gas prices,” Murphy noted.

Scenarios which include sustained low gas prices of around $3.5 per MMBtu through 2050 point to limited CSP deployment in Texas, the study warned.

Low natural gas prices could restrict CSP potential to under 2 GW and restrict the geographical spread east to the Texas Panhandle, it said.

                         Forecast US natural gas production, price

                                                           (Click image to enlarge)

Source: Energy Information Administration's Annual Energy Outlook 2019

Similarly, reductions in PV-battery costs could drastically impact CSP market potential. If battery costs follow the lowest cost scenario, this could delay the first CSP deployment in Texas until the late 2040s, based on cost projections, the study said.

Cost breakthroughs

Global CSP tariff prices have fallen much faster than many expected and the DOE's CSP cost target of $50/MWh could be met far earlier than 2030.

ACWA Power and partners are currently building the 950 MW Noor Energy 1 CSP-PV project in Dubai at a record-low tariff price of $73/MWh.

ACWA Power used an optimized combination of technology, economies of scale and an innovative 35-year power purchase agreement (PPA) to cut costs.

While prices vary between markets, many CSP experts predict new record prices could soon be revealed and the cost of combined CSP-PV plants will fall below $50/MWh.

In addition, U.S. and European researchers are developing higher-temperature CSP plant designs to increase the efficiency of converting heat to electricity and further reduce costs.

In the U.S., three research teams are developing designs which heat transfer fluids (HTFs) to over 700 degrees Celsius (C). The teams are competing for $25 million of DOE funding to build an integrated demonstrator and commercial exports could begin in the 2020s.

Even if CSP costs fall faster than the DOE targets, new projects are not likely to come online in the U.S. before the late 2020s.

“It takes a while to permit/build a new CSP plant, and there is a more-limited need for new capacity overall before 2030,” Murphy said.

By Kerry Chamberlain 

US researchers achieve world's highest temperature sCO2 turbine

17 APRIL 2019

US researchers achieve world's highest temperature sCO2 turbine

The world's highest-temperature supercritical carbon dioxide (sCO2) turbine boosts the prospect of greater CSP plant efficiency.

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The new high-temperature supercritical carbon dioxide turbine could achieve 50% thermal efficiency in CSP plants. (Image credit: SWRI)

Engineers at General Electric and the Southwest Research Institute (SWRI) have designed, built and tested the world's highest-temperature supercritical carbon dioxide (sCO2) turbine, boosting the prospect of greater CSP plant efficiency, SWRI said in a statement April 8.

The 10 MW turbine is the "size of a desk" and has yielded the highest power density for an industrial turbine, SWRI said.

“Most conventional CSP systems operate at a thermal efficiency of 35 to 40%. The newly designed turbine with the sCO2 power cycle can approach a 50% efficiency,” Jeffrey Moore, principal investigator for the project, said.

The turbine can withstand the tough operating conditions of CSP plants and is scalable to as much as 450 MW, SWRI said.

“This will not only improve [CSP] plant efficiency but also improve the efficiency of fossil and nuclear power plants, as well as lower the cost of waste heat recovery and energy storage,” it said.

The researchers will incorporate a variation of the turbine into the Supercritical Transformational Electric Power (STEP) 10 MW demonstration plant, a sCO2 pilot plant currently under construction at SwRI’s headquarters in San Antonio. The $119 million STEP program aims to demonstrate a fully-integrated sCO2 power plant can generate power at higher efficiency and lower cost and produce less carbon emissions, than conventional plants.

Reuters Events

Carnot Batteries - Facilitating the transition from fossil to renewable generation

8 APRIL 2019

Carnot Batteries - Facilitating the transition from fossil to renewable generation

Storing renewable energy as thermal batteries within retiring coal power plants will require expertise from the CSP industry.

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Watch the webinar here:

Credits to ATA Insights

US researchers achieve world's highest temperature sCO2 turbine

3 APRIL 2019

CSP mini tower developer predicts costs below $50/MWh

Modular CSP tower plant’s with sodium transfer fluid will be competitive with coal and gas plants at scale. Australian developer Vast Solar could build its first commercial plant by 2022.

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Australia's Vast Solar is making the leap from a 1.1 MW pilot CSP plant to a commercial 50 MW project. (Image: Vast Solar pilot plant in New South Wales.)

Vast Solar recently announced plans to build a 50 MW CSP-PV plant in New South Wales, Australia, which includes 30 MW of CSP capacity and 10 hours of molten salt energy storage capacity.

The A$240 million Reference Plant project represents the first large-scale deployment of Vast Solar's innovative CSP plant design, which features multiple small towers and uses liquid sodium as heat transfer fluid (HTF).

Vast Solar has already built a 1.1 MWe pilot plant in Jemalong, New South Wales consisting of five modules and including three hours of storage capacity. Operational for over a year and fully commissioned in June 2018, the A$24 million pilot plant has undergone extensive testing and Vast Solar predicts major cost savings on larger projects.

The Vast Solar CSP design uses a distributed sodium loop throughout the solar array to achieve higher HTF temperatures and higher power cycle temperatures than conventional central tower designs, Wood told Reuters Events.

Liquid sodium efficiencies, modular build savings and a distributed control system will lower the levelized cost of electricity (LCOE) of larger-scale plants to below US$50/MWh in locations with high direct normal irradiance (DNI) levels, Wood said.

Large-scale plants will be "cheaper than coal and gas-fired plants and other renewable energy storage technologies" and could open up new opportunities in areas with lower solar irradiance levels, he said.

Global CSP cost, auction price trends

Global CSP cost, auction price trends

Source: International Renewable Energy Agency (IRENA), January 2018.

Finance push

Vast Solar is currently seeking A$75 million of financing, including $50 million of equity investment for the 50 MW Reference Plant project and $25 million to fund the business for the next three years.

Securing funding and construction efficiency will be the two main challenges for the project, Wood said.

"We are aiming for financial close by the end of this calendar year and expect a two-year construction duration," he said.

As a first of a kind (FOAK) plant, the project is expected to gain concessional support from Australian Federal and State Governments, Wood said.

The pilot plant in Jemalong received A$9.9 million in funding from the Australian Renewable Energy Agency (ARENA).

"Significant knowledge has been gained from this [pilot] project, especially with regards to constructing and testing a first-of-a-kind facility in a regional location, as well as proprietary knowledge around control systems and the use of sodium as a heat transfer fluid in a solar thermal plant," an ARENA spokesperson told Reuters Events.

Vast Solar has also applied to access the federal government's new Underwriting New Generation Investments (UNGI) program for the Reference Plant, although the nature of this support is yet to be determined and this is not a prerequisite for the project.

The developer has included PV in the project in order to increase daytime output capacity and match regional demand profiles. The PV capacity will also provide faster returns on investment due to shorter construction cycles.

"We expect to consider installation of PV alongside CSP in most situations, but it is not mandatory," Wood said.

Australia quarterly power futures by region

Australia quarterly power futures by region

Source: Australian Energy Regulator

A smooth financing and construction process could see Vast Solar overtake SolarReserve to install Australia's first large-scale CSP plant.

U.S. CSP tower developer SolarReserve is currently developing the 150 MW Aurora CSP plant in South Australia and the project has slipped behind initial schedules.

In 2017, the Government of South Australia awarded U.S. developer SolarReserve a 20-year power offtake agreement at a maximum price of A$78/MWh.

Construction is yet to begin and SolarReserve may add PV to the project to improve economics, the company said last year.

Mini towers

The Vast Solar CSP design distributes a sodium loop system throughout the solar array, separating liquid sodium energy collection from molten salt storage.

While the liquid sodium loop raises the cost of piping, valves, pumps and heat exchangers, these are outweighed by the benefits, Wood said.

Costs are offset by “reductions in cost, size and complexity in the solar array, tower, receiver and salt storage systems” as well as improved performance and reduced operational risk, he said.

Compared to central tower designs, modular solar arrays deliver 17% more energy to the receiver for each square metre of mirror, Wood said.

This saves capex costs and "17% less mirrors mean 17% less cleaning - a significant opex saving," he said.

Vast Solar's towers are smaller than conventional designs and use a lightweight steel lattice structure. The towers are assembled on the ground, then tilted into position.

The modular tower and array layout can be constructed in parallel, at the same time as power block or storage construction, reducing total construction time to between 18 and 24 months, Wood said.

The lower height of the towers means they can be accessed via elevated work platforms, simplifying operations and maintenance (O&M) activities.

Modular manufacturing

Vast Solar’s modular design also maximizes off-site prefabrication, cutting on-site construction schedules and risks.

The technology is designed to leverage auto industry techniques and robotic assembly lines, Wood said.

"The heliostat drives, facets, towers, receivers, pipe and valve assemblies and sub-assemblies elsewhere on the plant have been carefully designed to maximize modularity and minimize site works," he said.

Vast solar is "currently finalizing discussions with key suppliers," Wood said.

Several of the major components will be manufactured outside Australia, in countries such as China, U.S. and Czech Republic, he said.

Receiver savings

The Vast Solar plant is operated through a distributed receiver system, which uses the HTF flow as the primary control mechanism, rather than solar flux.

The system allows higher HTF and storage temperatures, increasing efficiency, while also raising energy capture during cloudy weather.

"The mixing effect of distributed receivers significantly reduces temperature variation and ensures that plant-wide transients do not result in a single cold front arriving at the heat exchanger," Wood said.

In dusty or lower DNI environments, the compact solar arrays retain their efficiency better than larger dimension projects, making them competitive in tougher climates such as Middle East and North Africa (MENA), Wood said.

“We simply add more modules to increase thermal output from the plant, negating the effect of increased attenuation or lesser solar resource,” he said.

In lower DNI locations, large-scale plants could achieve an LCOE of US$60-$65/MWh,” Wood said.

“Vast Solar’s technology will make CSP commercially viable in locations that challenge other CSP technologies,” he said.

Reuters Events

US researchers achieve world's highest temperature sCO2 turbine

27 FEB 2019

CSP power-heat costs could drop 50% on stable policy support

Industrial power and heat developers are adapting designs to minimize construction costs and shorten payback periods and greater financing support could see costs fall by a half, industry experts told Reuters Events.

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CSP developers are targeting power and heat customers in heavy industries, like the chemicals sector. (Image credit: Georgeclerk)

Falling technology costs and growing carbon reduction objectives have spurred industrial companies to turn towards renewable energy solutions.

A number of CSP developers are specialising in combined CSP-CSH (concentrated solar heat) plant configurations to tap the growing demand for industrial heat applications.

Industrial heat makes up two-thirds of industrial energy demand and is responsible for most of the sectors' CO2 emissions, as it is mostly produced from fossil fuel combustion.

Industrial segments which can be served by CSP-centred heating systems include chemicals, plastics, food and beverage, machinery, mining, paper manufacturing, textiles and metal surface treatment.

CSP costs have fallen dramatically in recent years, and further innovation gains are set to open up new markets for the technology.

Combined CSP-CSH plants require more bespoke configurations, reducing the potential for economies of scale and series.

To maximize the competitiveness of these plants, developers will require policy support for dual heat and power applications to ensure a pipeline of projects in the coming years, Svante Bundgaard, CEO of Aalborg, a specialist developer of CSP and CSH plants, told Reuters Events.

Supportive policy and financing schemes will allow CSP-CSH developers to increase volumes and reduce costs, as has already been seen in standalone CSP markets in South Africa, Morocco and UAE, Bundgaard said.

“A stable policy framework could give the basis for more than 50% cost reductions over a five to six-year basis,” he said.

Bespoke projects

Low-and-medium-temperature heat (below 400 degrees C) will account for three-quarters of the total growth in industrial heat demand by 2040, equivalent to over 16.5 trillion MWth hours, according to the International Energy Agency (IEA).

Global industrial heat demand by temperature level

Global industrial heat demand by temperature level

Current CSP designs often operate at temperatures below 400 degrees C, making them highly suitable to supply low to medium temperature heating services.

In 2016, Aalborg commissioned a 36 MW CSP tower plant and integrated energy system serving a Sundrop Farms tomato growing estate in the South Australian desert.

The plant incorporates a CSP tower system to provide electricity, heating and desalination services to 200,000 square meters of state-of-the-art greenhouses. Freshwater is provided from the desalination of seawater transported 5 km from the Spencer Gulf coast.

CSP with storage plants also allow industrial clients to operate 24 hours a day.

Aalborg collaborated with Norwegian thermal battery developer EnergyNest to develop parabolic trough and solar tower systems which can provide dispatchable, predictable power day and night. The system incorporates EnergyNest’s Heatcrete modular direct-steam storage system, an alternative to molten salt systems which offers competitive costs and scalability, according to the developer.

Payback barriers

A key challenge for CSP-CSH developers is reducing the payback period for initial investment.

Capex costs depend on scope and location. To take one example, Aalborg's 16.6 MWth Bronderslev Forsyning combined heat and power (CHP) plant in Denmark cost around $50 million. The plant combined solar and biomass with an organic rankine cycle turbine to supply the district energy network.

Payback periods for CSP-CSH plants are often longer than 3-5 years which often presents a barrier for industrial investment thresholds. Thus far, this has limited the market development to industrial operators with specific site demands or particularly high fossil fuel costs, such as remote industrial sites.

“Payback periods are unfortunately still the major investment criteria,” Christian Zahler, Managing Director at Industrial Solar, a German solar thermal systems developer targeting remote industrial sites and regions with high fuel costs, said.

“When we started almost 10 year back the expectation was max. 2 years, preferably below 1 year. Today our customers are open to accept longer periods from 4-7 years,” Zahler said.

“If clients were to focus on the IRRs instead of payback periods, we would definitely have more projects…But companies typically think within a 5 years’ timeframe,” he said.

Project finance models used for other power technology types, such as Build-Operate-Transfer, Build-Operate-Own or operational leasing of assets, can support project development, Bundgaard said.

CSP technology has already been proven in many utility-scale and industrial applications and offers a lifetime of over 25 years, he noted.

For wider deployment, cost reductions are required to improve the competitiveness against fossil fuel fired and PV-based systems.

In the stand-alone CSP sector, many developers have used economies of scale and series to drive down costs.

CSP-CSH applications are small and more bespoke and therefore offer less scope for standardisation of manufacturing. Developers must improve their designs and focus on reducing installation costs to lower the levelized cost of energy, Bundgaard said.

“Given the lower size of solar fields, costs cannot be reduced based on scale and volume,” he said

Aalborg and its suppliers are working on several key areas to reduce the cost of industrial scale applications.

The developer has developed its design to minimize work onsite, simplifying assembly and mounting and requiring no overhead cranes or onsite assembly factories, Bundgaard said.

Aalborg is also focusing on "engineering value add," aiming to remove redundancies and optimize interfaces between parts to reduce costs, he said.

Smaller openings

Targeting smaller customers with high fuel costs could allow greater standardisation, Miguel Frasquet, CEO of Solatom, a CSH start-up, told Reuters Events.

Solatom has developed a 14.5 kW plug-and-play linear Fresnel CSH design and is targeting Spanish food and beverage customers, such as meat processing plants and cheese factories.

By the end of Q3 2018, the company had sold two projects to industries and had five further projects in the pipeline.

“Our design is plug and play, depending on the size needed more pre-calibrated modules are connected together,” Frasquet said.

Many of Spain's industrial companies can access gas at subsidized prices but customers cut off from the gas network rely on far more expensive diesel and fuel oil.

Solatom has identified 7.1 GW of heating demand from small and medium-sized Spanish enterprises with high heating costs, Frasquet said.

Payback period for these customers could be "between three and seven years," he said.

Higher temperatures

Ongoing advancements in CSP technology could also unlock opportunities in the high temperature heating markets (over 400 degrees C).

Until now, CSP plants have typically used oil or molten salt as heat transfer fluid, limiting temperatures to below 550 degrees C. Higher temperature plants could increase the efficiency of power and high temperature heat solutions.

In the U.S., Brayton Energy, the National Renewable Energy Laboratory (NREL) and Sandia Laboratories are developing CSP plant designs which can heat transfer fluids to over 700 degrees C under a $25-million Department of Energy (DOE) grant.

Researchers predict these plants could be commercially available by around 2025-2030, unlocking fresh market applications for high temperature heat.

Access to high temperature customers would double the potential market for CSP-CSH applications, to some 33 trillion MWth, IEA figures show.

Kerry Chamberlain

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If you are interested in CSP Madrid 2020 please contact us on the below details:

Rhys Watt

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Project Director
Reuters Events
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