US CSP: Will hybrids bridge the gap?
Given the recent squeeze on US funding will hybrid projects deliver a quick win for concentrated sol
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By David Craik
Earlier this year Areva Solar was selected by Tucson Electric Power as its partner for a CSP solar booster project in Arizona.
TEP’s Sundt generating station will use Areva’s Compact Linear Fresnel Reflector solar steam generators with the aim of producing up to 5MW of power during peak demand periods without added emissions. It is expected to be operational by early 2013.
According to TEP producing that level of power would replace burning 46 million cubic feet of natural gas or 3600 tons of coal. It would also help its plan to increase its solar generating capacity to over 200MW by the end of 2014 and meet or exceed Arizona’s Renewable Energy Standard.
It says that if successful it would look at creating solar booster projects at its other power plants.
The project builds on the US’s first ever solar hybrid project – FPL’s Martin Next Generation Solar Energy Centre in Florida. Directly connected to an existing combined-cycle natural gas power plant it was completed in 2010 and has an annual estimated generation of 155,000 MW-hours.
Gaining momentum
Areva, which has experience with solar booster projects such as the 44MW Kogan Creek project in Australia for a coal-fired power station, believes such projects are gaining momentum in the US. It sees such projects as “a way to leverage existing power infrastructure to provide needed energy with no new emissions.”
John Robbins, senior director of North American Sales adds: “CLFR boosters are the lowest cost solar solution on the market today. Developers and utilities will definitely be looking more towards hybrid configurations.”
Indeed it sees the potential for other similar projects in the Southwest of the States including Texas.
“These booster projects at fossil-fired power plants are ideal for this market because they generate maximum plant output during summer peak demand when power prices tend to spike,” Robbins adds.
Unsurprisingly cost is a key issue.
The US Department of Energy’s 1705 loans guarantee programme came to and end last September, and this may provide impetus for more developers to opt for a hybrid approach.
The 1705 programme has backed up billions of dollars worth of CSP projects, such as Brightsource Energy’s Ivanpah project and Abengoa’s Solana and Mojave Solar projects, providing much needed assurance to investors backing new technologies.
Cheaper, easier
According to one leading solar energy investment group, which preferred not to be named, CSP investors and developers will likely view hybrid projects as a safer, cheaper and easier alternative to standalone CSP plants, in the absence of loan guarantees.
In turn natural gas and coal operators could view solar booster projects as a way of evening out supply and meeting state renewable energy standards. Similarly, the EPA’s new US carbon emission caps could prompt more gas and coal operators to opt for solar booster technology as a means of emissions abatement.
However the investor group says that there remains a big question over whether the two sides of the energy coin, renewable and fossil, would even want to sit down and work out how to come together. Indeed it states that it has not been approached to fund any hybrid projects to date.
Would hybrid projects be viewed as less risky by investors? The group in question believes not, suggesting similar levels of due diligence would be carried out on operational risk issues and an owners track record in the CSP sector.
Investment, it suggests, would be easier to attain if the proposed project was a contracted power plant with a PPA. This could include a CSP plant with a natural gas unit in place to offer additional capacity and back-up supply.
However Areva does believe hybrid plants are viewed as less risky by investors.
“We’re already starting to see customers favour this approach,” Robbins says.” One of the main advantages of CSP booster projects is that we’re able to lower capital expenditure by utilizing the existing power block and transmission infrastructure. Because these projects are environmentally preferred, and by co-locating them on a utility’s property already permitted for power generation, we avoid the need for costly and time-consuming permitting issues.”
Gas prices
But to what extent will the shale gas revolution in the States, which has sent gas prices into a downward spiral, undermine the case for solar booster technology?
Our investor group says that coal operators, given the reduction in gas prices in the States, could look to gas as a replacement power rather than solar in the future.
But Areva is more confident. ”Low natural gas prices are becoming a key driver of any utility decision,” says Robbins. “But with gas prices so low, overall energy demand down and the growing challenges of renewable intermittency – such as cloud cover and seasonal changes – CSP becomes a very good solution – either hybridized with a new build or as a backup to an existing facility to serve as a peaker with dispatchability,”
There are factors that clearly work in favour of hybrid facilities in the States with cost, emission caps and renewable energy targets to the fore. CSP owners must do all they can to tempt natural gas and coal operators to make it the unlikeliest bedfellow and not PV in the cash-conscious days ahead.
To respond to this article, please write to: David Craik
Or write to the Editor:
Rikki Stancich: rstancich@csptoday.com
