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Folie 1
Financing Concentrating Solar Power Plants:The CSP-Finance Project
Franz Trieb and Jürgen Kern
The World Bank, Washington D.C., January 25, 2012
Folie 2
CSP Investment
Folie 3
steam cycle power
1
solar field
1
2
22 3
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4
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solar fieldsolar fieldsolar field
storage11
storage storage storage
SM1 SM2 SM3 SM4
fuel
1500 €/kW
+ 2500 €/kW+ 2000 h/y
+ 2500 €/kW+ 2000 h/y
+ 2500 €/kW+ 2000 h/y
+ 2500 €/kW+ 2000 h/y
11500 €/kW8000 h/y
CSP Investment vs. CSP Performance
CSP is a power plant plus „fuel“ for 40 years operation
as a capital good at stable cost
Folie 4
1. Long-term investment (20-40 years) not only for the power plants but also for their „fuels“.
2. Unknown future savings compared to volatile and unpredictable conventional fuel prices.
3. Known long-term cost but unknown long-term revenues if electricity output has to be sold at spot markets.
4. Additional cost of early plants cannot be recovered under conventional market conditions and less if competitors are subsidized.
a solution to overcome these barriers is a long-term power purchase agreement (PPA) at a tariff that covers the life-cycle cost including a reasonable return of investment.
Investment Challenges for CSP
Folie 5
High capital cost of CSP is prohibitive for developing countries
1. limited national budgets cannot cope with high investments
2. low national credit ratings translate to high capital interest rates
3. high interest rates translate to a high capital cost
4. CSP can be introduced in a series of subsidized projects but markets will not develop
real CSP markets could be initiated in developing countries by increasing the ratings of CSP projects towards AAA standard
high quality, low interest rates, low capital cost
low required PPA tariffs, reduced load for consumers and governments
Folie 6
The role of CSP:High quality supply
Folie 7
The RE quality challenge:How to cover a defined load with RE?
0123456789
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1008 1032 1056 1080 1104 1128 1152 1176time (hour of year)
Pow
er (M
W)
CSP solar CSP fuel
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1008 1032 1056 1080 1104 1128 1152 1176time (hour of year)
Pow
er (M
W)
Wind Park Backup Plant
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1008 1032 1056 1080 1104 1128 1152 1176time (hour of year)
Pow
er (M
W)
PV Plant Backup plant
CSP
Wind
PV
10 MW CSP (incl. thermal storage & 10% gas)10 MW PV + 10 MW backup from grid (75% gas)10 MW Wind + 10 MW backup from grid (60% gas)
MENA Regional Water Outlook, Phase 1
maximum fuel efficiency in full loadmaximum amortisation in full load reduced fuel efficiency in part load
reduced amortisation in part load
Folie 8
Comparing Wind, PV and CSP
In most cost comparisons, PV and wind are assumed to have access to a cost-free, loss-free and unlimited storage device: the electricity grid. This seems wonderful, but is a rather expensive illusion!
In contrast to that, CSP has a real, limited storage with cost and losses. Therefore CSP will always loose when compared to PV and wind in a way that does not compare equal quality of supply.
There are 1 GW CSP, 40 GW PV and 200 GW wind power installed today. This means that the remaining potential for cost reduction of CSP is much higher than that for wind and PV, especially when storage and backup are included. This cost reduction potential must be tapped by decidedly developing CSP world wide (just like PV and wind has been developed in the past)
MENA Regional Water Outlook, Phase 2
Folie 9
How compares the cost of electricity from different sources with 2%/a fuel cost escalation?
Wind = wind park PV = PV plant
discount rate 7.5%/a, fuel cost escalation 2%/a
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2005 2010 2015 2020 2025
Year
LEC ($/kWh) Wind
PV
CSP
Coal
Gas
Oil
Folie 10
How compares the cost of electricity from different sources with 6%/a fuel cost escalation?
Wind = wind park PV = PV plant
discount rate 7.5%/a, fuel cost escalation 6%/a
0.00
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2005 2010 2015 2020 2025
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LEC ($/kWh) Wind
PV
CSP
Coal
Gas
Oil
the past decade suffered a 15%/a escalation!
Folie 11
How compares the cost of electricity for a guaranteed stable price contract for 40 years for firm 100 MW, 4000 h/a?
CSP = 100 MW CSP incl. thermal storage incl. 10% hybrid operation with gasWind = 200 MW wind park + pump storage + 10% backup from gas power plantPV = 250 MW PV plant + pump storage + 10% backup from gas power plant
discount rate 7.5%/a, fuel cost escalation 2%/a
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2005 2010 2015 2020 2025
Year
LEC ($/kWh) Wind
PV
CSP
Coal
Gas
Oil
fuel for 40 aas initialinvestment!
Folie 12
Comparing Fuels, Wind, PV and CSP
Lesson learned:
Compare systems with equal technical quality of supply including production, storage and backup!
Compare systems with equal economic quality ofsupply including long-term price stability!
MENA Regional Water Outlook, Phase 2
Folie 13
The Role of Wind, PV and CSP in Emerging RE Markets
PV and Wind do not deliver firm capacity, but can produce a lot of electricity at a relatively low cost.
Strong, well developed power markets in industrial countries can integrate large amounts of PV and wind power, as the existing capacity can balance fluctuations.
Growing power markets in developing countries need addition of firm capacity, preferably by CSP, biomass or hydropower.
Folie 14
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Summer Week
Winter Week
The role of variable and flexible renewable power sources in a 90% renewable electricity scenerio for the year 2050 for Germany.
Installed Capacities:
Photovoltaics: 55 GWWind Onshore: 40 GWWind Offshore: 30 GWDESERTEC: 16 GWImport Norway 4 GWGeothermal: 4 GWBiomass: 9 GWBiomass Waste: 4 GWHydropower: 6 GWNatural Gas: 63 GW
Case study Germany 2050
var.RE
flex.RE
flex.Fuel
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100000 Hydrogen StoragePump StorageGas TurbinesPhotovoltaicWind OffshoreWind OnshoreDESERTECNorway ImportGeothermalBiomassBiomass/WasteHydropowerCombined CycleCoal SteamNuclearLigniteElectric Load
Summer Week
Winter Week
German Case Study, DLR 2011
Folie 15
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Load
in M
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Hydro Industrial Units Combined-Cycle / natural gasGas Turbine / natural gas Steam Turbine / HFO CSP / peak-mediumPV Gas Turbines / LFO Import
Case study Jordan 2015: role of CSP and PV
Pipelinefrom Egypt
Jordan Case Study, DLR 2012
Folie 16
Case study Jordan 2030: role of CSP and PV
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Hydro Industrial Units Combined-Cycle / natural gasCSP / base-medium CSP / peak - medium PVGas Turbine / natural gas / LFO Import
Pipelinefrom Egypt
Jordan Case Study, DLR 2012
Folie 17
Niche markets for CSP
Folie 18
B
Break Even with differentload segments
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Cost of CSP at DNI2400 kWh/m²/a
Average Costwithout CSP
Peak Load Cost
B1
Base Load Cost
B3
Medium Load CostB2
Journal of Energy Policy 39 (2011) 307 - 317
Elec
tric
ity C
ost (
$ 201
0/k
Wh)
Folie 19
When to start?
Folie 20
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ost (
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Case 1Case 2Case 3No RE
When will it be reasonable to start investing in RE?
1. as soon as the RE learning curve can be initiated?2. when fuel prices exceed the base line renewable energy cost?3. when fuel prices reach the initial renewable energy cost?
1 32all technologies have a learning curve,but there is a big difference:fuel costs will return up from base lineRE costs will stay down at base line
base line
Folie 21
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Time steps (units)
Ren
ewab
le E
nerg
y Sh
are
(rel
ativ
e un
its)
Case 1Case 2Case 3
When will it be reasonable to start investing in RE?
1 32
1. as soon as the RE learning curve can be initiated?2. when fuel prices exceed the base line renewable energy cost?3. when fuel prices reach the initial renewable energy cost?
Folie 22
When will it be reasonable to start investing in RE?
1. as soon as the RE learning curve can be initiated!2. when fuel prices exceed the base line renewable energy cost?3. when fuel prices reach the initial renewable energy cost?
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Time steps (units)
Tota
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Case 3Case 2Case 1Case 0No RE
= ∑ (specific electricity cost x electricity share)
1 32
Folie 23
How to start?
Folie 24
Setting an appropriate policy framework
recognize the need for large RE investment(RE investment replaces fuel consumption for decades!)
reduce capital cost by increasing RE project ratings towards AAA(re-insured PPA, guaranteed renewable electricity tariff)
recompense the quality of flexible & renewable power (re-insured PPA, guaranteed renewable firm-capacity tariff)
provide transparent, long-term stable regulatory and policy framework to trigger real RE markets
start immediately!
Folie 25
If we always ask for least-cost solutions,we may end up with a least-cost planet.
www.dlr.de/tt/aqua-csp
Thank You