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CSP Cost RoadmapCSP COST ROADMAPWe finally made it !
N. Benz, ESTELA General Assembly
July 15, 2010
27 companies organized in ESTELA awarded A.T.Kearney
for a Cost Roadmap Study
A.T. Kearney 10/02.2010/30376d 3
• Usage of parabolic dish and stirling engine which simplifies overall system concept (modularity)
• High net solar to electrical efficiency
• Suitable for both small stand-alone, decentralized off-grid power systems as well as large grid connected power systems
• Concentration of solar radiation on a point receiver at the top of a tower
• Enables operation at high temperature level and provides heat storage capabilities
• Usage of parabolic shaped mirrors to concentrate solar radiation on linear tube receiver
• Commercially proven technology with heat storage capacity
• Usage of flat mirror design, which is easier to produce
• Efficiently enables other industrial uses like steam processing
• Provides heat storage capabilities
Concentrated Solar Power (CSP) comprises four technolo-gies with different characteristics
CSP technologies – overview
1) Compared between the different CSP technologiesSource: ESTELA project team; A.T. Kearney analysis
Industry roadmap – report summary
Level of technological maturityComparably high1) / large scale systems in place
Comparably low1) / large scale deployment not yet proven
Dish StirlingSolar TowerParabolic Trough Linear Fresnel
A.T. Kearney 10/02.2010/30376d 4
Each technology has its own value proposition and therefore different deployment optima
Technology comparison
Industry roadmap – report summary
Parabolic Trough Solar Tower Dish Stirling Linear Fresnel
Value proposition
• Commercially proven and bankable technology
• Maturity level and operational experience
• Modularity
• Large number of EPC providers
• Commercially proven and bankable technology
• Efficiency
• High operating temperatures
• Modularity
• Efficiency
• Low water consumption
• Cost effective for steam generation
• High land-to-electricity ratio
• Usability of space below support structure due to linear design
Source: ESTELA project team; A.T. Kearney analysis
Application/ deployment focus
• Centralized grid access locations
• Locations with hybridization possibilities
• Centralized grid access locations
• Locations with hybridization possibilities
• Decentralized off-grid power systems
• Locations with water scarcity
• Centralized grid access locations
• Centralized grid access locations
• Locations with hybridization possibilities
• Industrial location with steam processing needs
A.T. Kearney 10/02.2010/30376d 5
CSP industry possesses the advantage of putting bets on several serious and forward moving technologies
Project/commercialization roadmap(projected start of commercial/large scale operation)
1) Technology not considered in cost modeling as it is expected to be substituted2) Technology not considered in cost modeling as viability needs to proven and commercial data not yet sufficiently availableSource: ESTELA project team; A.T. Kearney analysis
Technology 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Parabolic
Trough
Solar Tower
Dish Stirling
Linear Fresnel
Technology in commercial operation today – furtherprojects planned
In commercial operation today –technology expected to be substituted, no further projects planned1)
Synthetic aromatic fluid
Molten Salt
Molten Salt
Stirling engine
Saturated steam1)
Superheated steam
Superheated steam
Industry roadmap – report summary
Superheated steam2)
New technologies – Pressurized air, solar fuels, …2)
Technology in advanced stage of development but not yet in commercial operation, viability needs to be proven –commercial projects planned
Technology in early state of development, viability needs to be proven – commercial projects yet to be planned
Saturated steam
A.T. Kearney 10/02.2010/30376d 6
2010 2015 2020 2025
40
80
60
20
0
+65%
+21%
60
30
+15%
121
With the increasing commercialization of technologies, CSP industry is expected to face a steep capacity ramp-up
CSP capacity forecast(projected, installed capacity in GW, global)
xx% CAGR = compound annual growth rate of base case scenario
CSP industry will significantly build up capacity until 2015 with 12GW –validated with currently project pipeline
Base case scenario is expected to reach 30GW in 2020 and 60GW in 2025
Parabolic Trough as proven tech-nology will remain the dominant technology with a share of ≥50% in 2025
Solar Tower is expected to catch up and gain a share of ≥30%
Dish Stirling and Linear Fresnel are expected to have a cumulative share between 10-20%
Industry roadmap – report summary
Source: ESTELA project team; A.T. Kearney analysis
A.T. Kearney 10/02.2010/30376d 7
Current installed capacity and projects mainly located in the US and Spain – capacity in MENA will increase strongly
Industry roadmap – report summary
Focus countries with (high) CSP potential
Equator
Tropic of Cancer
Tropic of Capricorn
CSP capacity – installed capacity and project pipeline (in GW, until 2015)
Australia
Inst.
cap.
0.0
Pipe-
line
0.5
MENA
Pipe-
line
0.8
Inst.
cap.
0.0
Spain
Pipe-
line
2.5
Inst.
cap.
0.3
US
Pipe-
line
8.0
Inst.
cap.
0.4
RoW
Pipe-
line
0.5
Inst.
cap.
0.1
Source: Interviews with industry experts; A.T. Kearney analysis; NREL
Current capacities and planned pro-jects mainly locatedin US and Spain1)
MENA expected to ramp up in mid term
DNI levels ≥2,000 are prerequisite for the deployment of CSP
A.T. Kearney 10/02.2010/30376d 8
50-65%
70-95%
45-60%
First major cost reductions are expected in 2013 – tariffs1)
are expected to decrease by 40-55%-points until 2025
Industry roadmap – report summary
Expected tariff1) development 2012 – 2025(in % compared to reference plants 2012, excl. impact of DNI)
CSP cost reduction
• Main drivers for reduction
Deployment of new technologies
Economies of scale
Efficiency improvements
Cost reductions
• Effects vary across the different technologies and between dispatchable and non-dispatchable plants
1) Tariff = minimum required tariffSource: ESTELA project team; A.T. Kearney analysis
40%
50%
60%
70%
80%
90%
100%
2025202020152012
-40-55%
-35-50%
(Conservative)outlook
Validated/ proven improvement measures
Main drivers for tariff reduction
Economiesof scale
• Economies of scale• Implementation of
major technological improvements
Cost & efficiencyimprovements
-5-30%
A.T. Kearney 10/02.2010/30376d 9
1) Tariff = minimum required tariff; 2) Referring to 2010-2013 according to planned commercialization date of each technology (reference plants)Source: A.T. Kearney analysis
Tariff1) reduction will be driven by cost and efficiency improvements as well as economies of scale
Industry roadmap – report summary
Projected tariff1) development – by measure / over time(tariff1), in %)
100%
45-60%
LCOE2025
21-33%
-points
10-15%-
points
Economiesof scale
18-22%-
points
1st large scale plants2)
EfficiencyCost
-40-55%-points
Cost & efficiency improvements
28-37%-points
Plant scaling currently not applicable in Spain with current regulation
Cost and efficiency improvement cannot be strictly separated as both are interdependent in most cases – cost improvements refer to component, plant engineering and O&M cost reductions
Economies of scale and cost & efficiency partially overlap
A.T. Kearney 10/02.2010/30376d 10
Highest potentials of technological improvements are expected in the thermal generation and storage system
Industry roadmap – report summary
Functio-nalities
Technol-ogy
Solar collection system
Thermal generation system
Storage systemElectrical
generation system
Parabolic Trough
• Mirror size and accuracy
• Optimized support structure design
• Receiver characteristics
• Alternative working fluid
• Higher operating temperature
• Alternative storage reservoir designs and storage medium compositions
• Turbine efficiency
SolarTower
• Field configuration and heliostat size optimization
• Optimized tracking system costs
• Alternative working fluid
• Higher operating temperature
• Improved cycle technology
• Alternative storage reservoir designs and storage medium compositions
• Turbine efficiency
DishStirling
• Optimized support structure design
• Optimized mirror sizes for various solar resources
• Storage development• Engine efficiency and
capacity
LinearFresnel
• Automatic mirror assembly
• Optimized mirrors
• Receiver characteristics
• Higher operating temperature
• Storage development • Turbine efficiency
Source: ESTELA project team; CENER; A.T. Kearney analysis
High
Initiative improvement potential:
Medium Low
Overview on main technological/efficiency improvement measures
A.T. Kearney 10/02.2010/30376d 11
Major reduction potential is seen in engineering and planning cost, thermal generation and storage system cost
Industry roadmap – report summary
Overview on main cost reduction measures1)
(excluding economies of scale, reduction until 2025 – in %)
Functio-nalities
Tech-nology
Engineering / planning
Solar collection
system
Thermal generation
system
Storage system
Electrical generation
systemO&M cost
Parabolic Trough 32-36% 14-18% 26-30% 25-29% 8-12% 18-22%
SolarTower 41-45% 13-17% 18-22% 20-24% 5-9% 15-19%
DishStirling 27-31% 25-29% n.a.
not yet
applicable37-41%2) 15-19%
LinearFresnel 35-39% 21-25% 23-27%
not yet
applicable3-7% 15-19%
1) No major cost reductions for project development cost expected, construction cost are expected to increase with increasing labor cost2) Dish Stirling excluded from cross technology overview as Stirling engine is not comparable to turbine technology and cooling systems differ significantlySource: ESTELA project team; A.T. Kearney analysis
27-45% 13-29% 18-30% 20-29% 3-12%2) 15-22%
Project CAPEX
A.T. Kearney 10/02.2010/30376d 12
Engineering and planning, power block and project development cost are expected to drive economies of scale
Industry roadmap – report summary
Economies of scale(reduction of CAPEX/GWh annual output – in %)1)
x1
100%
x10x5x4x3x2
9-22%2)9-26%8-23%6-17%
21-24%2)
Main levers for eco-nomies of scale
• Engineering/planning cost
• Power block
• Project development cost
Multiple of reference plant output
1) Plant scaling refers to plant sizes from 50-500MW; 15MW Linear Fresnel plant has been excluded from overview2) Solar Tower only scaled up from 50-200MW, Linear Fresnel from 15-250MW1)
Source: ESTELA project team; A.T. Kearney analysis
A.T. Kearney 10/02.2010/30376d 13
60
65
70
75
80
85
90
95
100
105
110
2,000 2,2002,100 3,0002,9002,8002,7002,6002,5002,4002,300
Electricity cost of CSP decrease significantly with increasing irradiation level (-4.5% per 100kWh/m²a)
Tariff/LCOE development over DNI level(in % compared to reference plant location Spain)
Tariff decrease about -4.5%-points with an increase of DNI by 100kWh/m²a due to increasing plant output
At DNI of 2,500 kWh/m²a tariff range between 81-83% compared to reference plant location in Spain (DNI 2,084 kWh/m²a), e.g. in Saudi Arabia
At DNI of 2,700 kWh/m²a tariff ranges between 74-75% compared to reference plant location, e.g. in Algeria
Source: A.T. Kearney analysis
Industry roadmap – report summary
• Portugal
• United Arab
Emirates
• Italy
• Greece
• Southern
Turkey
• Spain • Tunisia
• Arizona/US
• Saudi Arabia
• Morocco
• Nevada/US
• Australia • California/US
• Algeria
• South Africa
DNI in
kWh/m²a
Reference plant location –
DNI 2,084 kWh/m²a (100%)
-33-35%
-18-19%
-24-25%
-4.5% per 100 kWh/m²a
• Chile
A.T. Kearney 10/02.2010/30376d 14
500
1.2-1.3
4,000
2.4-2.5
3,000
1.8-1.9
2,0001,000
2.0
1.5
0.0
0.6-0.7
5.0
4.0
3.5
2.5
3.0
1.0
0.5
4.5
6.0
5.5
0.3-0.4
Transmission cost from MENA countries with higher DNI levels to EU countries do not outweigh LCOE advantages
HVDC transmission cost1)
(in €/MWh)
1) Includes cost of transmission losses –Note: transmission cost for HVAC not considered; cost efficient HVDC connection considered as prerequisite for large scale deployment CSP in MENA region; Source: A.T. Kearney analysis; Industry analysis
e.g. Egypt –
Spain
e.g. Morocco
– Spain
e.g. Algeria -
Spain
e.g. Southern
Algeria – Spain500 km
Distance MENA–Central Europe – 3,000-3,500 km
Industry roadmap – report summary
Distance
in km
Cost advantage of CSP production in MENA countries due to higher DNI levels
HVDC trans-mission cost
0.5–3.5
1.1–4.1
1.7–4.7
2.3–5-3
2.6–5.6
r=3,000km
r =
500km
r=1,000km
r=2,000km
Tropic of cancer
A.T. Kearney 10/02.2010/30376d 15
Dispatchable CSP technologies will compete against conventional energy sources (CCGT and hard coal)
Cost comparison of dispatchable CSP against conventional (Spain, LCOE, in €c/kWh)
Industry roadmap – report summary
Hard coal
Dispatchable CSP technologies are expected to compete against CCGT and hard coal as peak to mid load provider
On the long run, CSP cansubstitute CCGT as peak to mid load provider
Further hybridization can support cost competitive dispatchability
Introduction of additional CO2-penalties would further drive competiveness of CSP
CSP – dispatchableCCGT
Assumptions: DNI 2,084 kWh/m²a; inflation included (CPI -0.5%); storage 5-20hrsPlant sizes increase according to projected ramp-up; CCGT – 25 years, Hard coal 40 years plant runtimeSource: ESTELA project team; A.T. Kearney analysis; EPIA
Assumptions: Constant CO2-emissions cost of €38/t from 2015 onwards
0
5
10
15
20
25
30
2010 2015 2020 2025
Includes cost and efficiency improve-ments and economies of scale
13-1612-15
12-14
Gas price
€22/MWh >€40/MWh >€55/MWh >€60/MWh
2012
A.T. Kearney 10/02.2010/30376d 16
Within RES portfolio, CSP technologies compete against non-dispatchable wind and PV as peak load provider
Cost comparison of non-dispatchable RES (medium irradiation)(Spain, LCOE, in €c/kWh)
Assumptions: DNI 2,084 kWh/m²a; inflation included (CPI -0.5%); Plant sizes increase according to projected ramp-up;PV cost development based on Paradigm Shift scenario; wind 20 years, PV 25 years plant runtimeSource: ESTELA project team; A.T. Kearney analysis; EPIA
Industry roadmap – report summary
PV industrial system
CSP – non-dispatchable
Wind offshore Wind onshore
Non-dispatchable CSP technologies (w/o storage) will compete against non-dispatchable RES as peak load provider
PV is expected to be the favorite non-dispatchable RES to serve peak demand in regions of medium irradiation, e.g. Spain, due to cost advantages
CSP is not expected to be competitive against wind
0
5
10
15
20
25
30
2010 2015 2020 20252012
14-17
7-11
10-14
Includes cost and efficiency impro-vements and economies of scale
A.T. Kearney 10/02.2010/30376d 17
60
65
70
75
80
85
90
95
100
105
110
3,0002,9002,8002,7002,6002,5002,4002,3002,2002,1002,000
In areas of high irradiation CSP is expected to be competitive as non-dispatchable RES against PV
PV and CSP LCOE development over DNI level (LCOE in % compared to reference plant location Spain)
High outside temperaturelevels limit the efficient deployment of PV in areas of high irradiation due to degradation and efficiency
CSP efficiency increaseswith higher DNI levels
CSP systems access more solar radiation than PV in higher DNI markets, as they track the sun on either a single or dual axis
CSP is expected to be the more cost efficient deployment alternative, also for non-dispatchable solar power, in areas of high irradiation with high temperatures, e.g. US Southwest, North Africa
Source: ESTELA project team; A.T. Kearney analysis
Industry roadmap – report summary
• Portugal
• United Arab
Emirates
• Italy
• Greece
• Southern
Turkey
• Spain • Tunisia
• Arizona/US
• Saudi Arabia
• Morocco
• Nevada/US
• Australia • California/US
• Algeria
• South Africa
DNI in
kWh/m²a
• Chile
CSP PV in % compared to CSP 2010
Increasing degradation
limits efficiency of PV
PV in % compared to CSP in 2015
2015
2010
A.T. Kearney 10/02.2010/30376d 18
Wind offshore Wind onshore
LCOE for wind including storage are expected to range at a comparative cost level as dispatchable CSP technologies
LCOE wind including storage cost1)
(in €c/kWh)
1) Storage cost (pump, pressurized air, hydrogen) range between €c5-20/kWh in 2010 and are expected to range between €c3-10/kWh in 2025Source: EPIA Set for 2020; VDE; A.T. Kearney analysis
Industry roadmap – report summary
CSP – dispatchable Wind offshore – incl. storage CSP – dispatchable Wind onshore – incl. storage
0
5
10
15
20
25
30
2025202020152010
14-29
10-16
0
5
10
15
20
25
30
2025202020152010
12-27
9-18
11-22
8-15
10-20
12-23
2012 2012
Includes cost and efficiency improvements and economies of scale
Includes cost and efficiency improvements and economies of scale
A.T. Kearney 10/02.2010/30376d 19
As storage cost for PV are considerably higher, CSP will not compete but complement solar power portfolio
Industry roadmap – report summary
LCOE PV including battery storage cost(Spain, in €c/kWh)
Assumptions: Comparable battery storage capacity, 5-20hrsSource: EPIA Set for 2020; VDE; A.T. Kearney analysis
CSP – dispatchable PV- industrial system, incl. storage
High storage cost drive LCOE for dispatchable PV electricity
Dispatchable PV systems are not expected to be competitive against more cost efficient dispatchable CSP plants
PV and CSP will not compete but rather complement each other in the RES portfolio of areas with high irradiation levels (US, MENA) to serve peak and mid load demand
PV will serve daytime peak demands
0
10
20
30
40
50
60
70
80
2025202020152010
40-70
15-30
20-40
25-55
2012
Includes cost and efficiency improvements and economies of scale
A.T. Kearney 10/02.2010/30376d 20
Summary
With the ATK-cost road map we have a well founded study, based on experience in developing and
constructing CSP plants and cost development of components.
Main competitor for CSP within Renewable Energies is PV
CSP has to significantly reduce cost in all functionalities: Planning, Engineering,
solar field components, construction. There is no single big lever.
This process has to gain more speed. Cooperation between various players has
to be established and fostered
The key value propostion of CSP is storage. Non dispatchable CSP is barely able to compete
with PV and Wind.
The main competitors within CSP are Parabolic Trough and Solar Tower. Even though the technologies are
complementary in some cases, the race will be thrilling!
Thanks to all the participants of the study for their contributions and for their patience
and thanks to A.T.Kearney for their great job.