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CSP at a crossroads

Dr Andy Skumanich

The first solar electric power plants are still proving their worth after three decades, so why aren't we seeing more CSP reach the development stage?

The first major concentrating solar power (CSP) plants were built in the Mojave Desert, U.S. in 1984 and have been producing over 330 MW since then. A well-publicised slump hit the industry in the nineties, but recently there has been a major upswing in installations, and an even bigger increase in project announcements.

However, announcements are one thing, what they are not is data: everything always takes longer than the optimistic announcements indicate, and Projects (and even Contracts), are often cancelled. There have been some recent notable examples of this.

One tale of woe is that of a 92 MW CSP facility that El Paso Electric Co. had planned for Santa Teresa in New Mexico. The project collapsed because of difficulties with securing financing.

The utility now plans to build a 20 MW PV facility instead.

So the immediate challenge for CSP is to avoid another bust by turning the GWs announced into actual GWh of electricity. In other words, prove the technology's bankability and capability.

The origins

The first CSP (parabolic trough) plant came online in 1985 as Solar Energy Generating System #1 (SEGS I) with a capacity of 13.8 MW. Eight other SEGS plants were subsequently built in the same region of the Mojave Desert, with the last one coming online in 1991.

The total output of the collective set of parabolic trough plants is 354 MW. According to Hank Price, one of the original engineers working on the project, this early work offered the chance not just for technology evaluation, but also the opportunity to study costs and possibilities for cost reduction. Indeed the cost of wholesale solar thermal electricity from the SEGS plants has halved from its initial cost of US$0.24kWh. Indeed, the original project has been generating electricity for three decades and has provided 14 TWh of energy.

But it wasn't until after SEGS III that the projects were finally able to attract investors – including multiple eastern U.S. utilities.

Boom and bust cycles

Although successful by most metrics, the original company which developed the project – Luz – had to declare bankruptcy. Oil prices fell and remained low through the 1990's – construction of new solar plants stalled. The regressive energy policy starting with the Reagan administration, along with the vagaries of property taxes, forced the company to close down. However, the investor groups continued to sell electricity to utilities.

It wasn't until the mid-noughties that new companies again began looking at innovative ways to generate large scale solar power, and a second cycle of CSP activity began in 2004. Luz Founder, Arnold Goldman, regrouped his old team, and founded BrightSource Energy. In addition, Silicon Valley venture capitalists gave some substantial funding to new comers such as Ausra and encouraged the renaissance in CSP.

What's happening now?

There are now almost 8 GW of CSP projects in the pipeline, compared with the 500 MW that will be installed by the end of 2010. This project pipeline sits in stark contrast to recent cancellations of CSP power plants. So why is so much of this planned capacity taking so long to develop? The CSP industry appears at a crucial turning point.

The “potential” of CSP is an oft-heard term, and it is true that there are some very attractive aspects of CSP – in principle. CSP has two key positive aspects: It can provide good energy dispatchability, and it has an ability for hybridisation. The two elements are interrelated. CSP can be configured to have thermal storage (at a price) and can provide up to 6 or even 8 hours of post-sun-down energy. And hybridisation allows the power plant to have both solar and standard energy for heating.

In principle, this capability would allow for 100% capacity – where the power plant is providing electricity over the full 24 hour cycle, turning the plant into a tunable base load resource – the Holy Grail for renewables.

Storing CSP power

Because of this, there is a significant amount of research going into CSP storage, and efforts are underway to find a low-cost and flexible solution. But in the near term at least, the market doesn't provide a value for this storage.

The ability of hybridisation is important too, because hybridisation improves the intermittency factor, the shaping of the electricity, and the capacity factor.

Again there are some limitations, however. If solar is paired with a carbon-based power source it can have two negative effects: Solar projects in the U.S. are limited to 2% natural gas in order to remain designated as “renewable” – and hence qualify for support (the SEGS I – IX projects are limited to 25%.) Secondly, in some instances the use of a coal-fired plant being running at less than full capacity (during times of high renewable generation) can become substantially less efficient, and actually contribute to higher air pollution.

Clearly, these issues are much intertwined. The good news for now is that the US Department of Energy (DoE) is ramping up its CSP research, development, and deployment efforts, leveraging both industry partners and the national laboratories. DoE's goals include increasing the use of CSP in the U.S., making CSP competitive in the intermediate power market by 2015, and developing advanced technologies that will reduce systems and storage costs, enabling CSP to be competitive in the base load power arena by 2020. In addition, there are numerous support programs at the National Renewable Energy Laboratory (NREL) for storage projects.

Luz/BrightSource shines again

More good news is that BrightSource has broken ground on another project in the desert at Ivanpah, 40 miles south west of Las Vegas, NE. The facility, scheduled to come online in 2012, will have a capacity of almost 400 MW, making it the world's largest CSP plant currently under construction. The project is a combined effort between BrightSource and none other than Bechtel (the largest engineering company in the U.S., which built the Hoover Dam in 1933). A key element to this project's success was securing a US$1 billion Loan Guarantee from DoE.

Rather than wait for NRG to get funding, El Paso Electric switched to solar PV to meet the State’s renewable energy mandates.

One of the encouraging aspects to this project is that it was able to balance various competing requirements from both an engineering, environmental impact, and advanced design perspective. Because of legitimate concerns about environmental disruption, the engineers designed a system which minimised impact by almost eliminating the need for extensive land grading and concrete foot pads. By placing individual mirrors on poles directly into the ground, the system allows vegetation to co-exist within the project and avoids impacting sensitive habitats. Also, to conserve scarce desert water, the tower uses air-cooling, which compared with conventional water-cooling results in 90% less water usage, although with some loss in overall efficiency. The water that is used is part of a closed loop system within the boiler segment.

In this regards, the Ivanpah project is a good template for CSP developments as it includes multiple stakeholders such as the developers, utilities, and environmental groups.

Cost and bankability

Despite the upsurge in the CSP pipeline, there are some warning signs that CSP still has the potential to hit another bust cycle.

SEGS: CSP success story

The SEGS plants (pictured) range in capacity from 13.8MW to 80 MW, and they were constructed to meet Southern California Edison Company's periods of peak power demand. The plants operate for 80% of the summer mid-peak hours, and 66% of the winter mid-peak hours. A natural gas backup system supplements the solar capacity and contributes up to 25% of the plants' annual output.

Learning from the early SIGS plants has been extensive. During the 1990's the SEGS's technical team worked with the Department of Energy's (DoE) Sandia National Lab to develop cost-reduction strategies for O&M planning optimisation; subsystem automation; mechanical and reliability improvements; and overall performance improvements – in fact many of the cost reduction strategies that can now be applied to other CSP technologies and the industry in general. The combined efforts developed capabilities for reducing O&M costs by a third. O&M is a substantial part of CSP running costs, unlike fixed panel solar photovoltaics (PV), where the O&M costs are a small fraction.

In addition, the plants were able to perform to exceptional standards and achieved a record output for single-day generation of over 2 GWh, and established a world record solar thermal-to-electric efficiency of 18%. The SEGS 1-9 configuration is a true success story in the annals of CSP.

The issues are a perfect storm of three elements: The primary one is the ‘bad luck’ of the global economic squeeze, which has made access to capital very restricted.

The second element is the increasing drop in the prices of solar PV and the ever-expanding track record for large-scale PV installations.

The third element is that CSP projects are typically large-scale, and require major amounts of not just money; but time for building; and regulatory review. Although there is the ‘economies of scale’ positive benefit for larger builds, there are other costs and barriers which increase with size. Permitting is more complex, labour rates can go up, and the need for grid upgrade or transmission can be substantial.

All this means there is a very significant question about bankability, which has become a common buzz word on the solar arena. This is a legitimate concern as investors don't want to take on risk for less-than-fully proven technologies. When you couple that uncertainty with the large investments needed for CSP, the result is major hesitation. The case of El Paso Electric illustrates perfectly this developing storm on the open desert planes.

David Knox of NRG Energy Inc, which El Paso Electric contracted to develop the CSP plant, explains the situation in simple terms. NRG sought a Loan Guarantee from DoE to build the facility, but its request was rejected. Rather than wait for NRG to get funding, El Paso Electric switched to solar PV to meet the state's renewable energy mandates.

“We can get banks to finance a solar PV project now, but they're not yet ready to finance a solar thermal project,” Knox says. “That's why we need to rely on Loan Guarantees to do it, but we won't get that in the time frame that El Paso Electric needs it.” Jason Marks of the New Mexico PUC says “the problem is not just timing – it's an endemic situation facing the CSP industry”.

In addition, there have been other recent cancellations of projects where the utilities switched from CSP to solar PV – citing costs. The learning curve of PV is much steeper and advanced than that of CSP, and storage complicates things further.

This situation becomes a reinforcing cycle: Cheaper PV leads to more installations, which in turn leads to increasingly cheaper PV. This is the essence of the solar market, getting the cost down and moving along the learning curve as quickly as possible. Great for PV. Not so great for CSP. And Levelised Cost of Electricity (LCOE), which is often used to promote CSP, is becoming lower for PV and is projected to continue on this trajectory.

Small is beautiful

Despite the challenges, there are some developing trends which could provide a path to viability: Getting bigger by going smaller.

There are emerging market opportunities in developing countries with a poor or non-existent grid and power infrastructure. In these countries, such as India, the need for local power is great, but the regional demand is only on the scale of a few MW's.

This application is a relatively hidden market but could be on a par with the nominal ‘grid-connected’ market. In some regards, this market is similar to the cell phone mode, where the landline infrastructure is not in place, but local service can be provided by towers. The demand here is great, and there is a need for viable energy which provides both immediate needs – as well as some storage.

It would be ironic if the iconic origins of terrestrial solar power, the SEGS plants, remain just an image of a CSP boom-bust cycle in the Mojave Desert…


The ability of CSP to provide both hybrid power (as well as storage) gives it an edge for the time being. However, there is a big caveat, which is the necessity for micro-CSP. Typical CSP installations need to be large-scale to amortise the balance of plant (BOP), and O&M costs. Therefore minimum sizes tend to be in the multiple 10s of MWs, much too large for micro-grid requirements.

However, two companies are addressing this requirement: One is Aora, and the other is Sopogy. They are both striving to provide sub-MW CSP solutions. Sopogy is based in the U.S., has been around since 2002, and already has a 2MW project operating in Hawaii – with new micro-grid contracts underway. Aora is based in Israel, and is targeting a 100kW demonstration unit in Spain by mid-2011.

CSP has gone through some boom and bust cycles in its 30-year history. It is poised to make a comeback but there are some significant clouds gathering on the horizon. For CSP there is the urgent need to prove its future capability (i.e. its potential) now. The CSP providers need to achieve significant momentum. In an unfortunate storm of market conditions, CSP is getting squeezed between tighter capital and the plummeting costs of PV.

It would be ironic if the iconic origins of terrestrial solar power, the SEGS plants, remain just an image of a CSP boom-bust cycle in the Mojave Desert, still cranking away on a tumble weed-blown plane, but left behind because of market forces and the dynamics of technology.

Of course one answer to averting a bust-cycle is simple: Deliver on some of the projects currently in the pipeline. There are some leaders in the CSP segment who recognise the urgency and are pushing for a re-focusing of energy into execution and co-operation. Stephen Mullinnex of US Renewables Group, which is backing the CSP installer SolarReserve would say that his competition (e.g. BrightSource) is not really the competition – because the more CSP installed, the better for everyone in the industry.

As he puts it: “It's now more about MWh than about ‘bragga-watts'.” In other words, there is a need to act swiftly to execute projects in the pipeline rather than bringing more volume to the pipeline, because time may well catch up with the industry.

First published in the November/December issue of Renewable Energy Focus U.S. magazine. See for more details.


Dr. Andy Skumanich is the ceo and founder of SolarVision Consulting. He has previously worked for Innovalight and Applied Materials' Solar Division.

Renewable Energy Focus, Volume 12, Issue 1, January-February 2011, Pages 52-55

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SolarWriter said

22 July 2011
sunrise1945 says:
for example, in India, there are several instances of R & D being undertaken at smaller scale and some of them have developed genuine systems in the solar concentration fields as well as in storage fields which are the most critical components of CSP

Do you have any links to publications or sites that talk about these CSP systems in India? In theory, CSP seems to be a great match for India's rural needs, but I would like to know more about how it actually works out in practice.

sunrise1945 said

08 July 2011
The issues mentioned by the author due to which the CSP has been passing through boom and bust cycles are self created and manmade issues. There are solutions avaialble to all the problems causing delays in the developement of CSP as cheaper alternative to PV. for example, in India, there are several instances of R & D being undertaken at smaller scale and some of them have developed genuine systems in the solar concentration fields as well as in storage fields which are the most critical components of CSP. One has to struggle to find finance for such cheaper technology alternatives mainly due to the fact that those in power just don't believe these small R & D entities. They remain hypnotized by the huge publicity that CSP technology developed by a chosen few is expensive even though their technology is new and not yet proven. Most of these chosen few technology developers are taken over by large multinational companies who dictate the prices, being in monopoly.
It is possible to develop technology which is cheaper and can even compete with the conventional energy developement over the period of time.
It requires bold decisions and faith in the small technology developers on the part of concerned governments and other stakeholders like power developers and finance providers, mainly the former. Initiative has to be taken by the governments and bankers will follow.
Such policy is the need of the hour and can work wonders for not only the CSP technology but for other sources of Renewable Energy like Energy from Oceans, Geothermal etc.

Anumakonda said

26 June 2011

Concentrating Solar Power (CSP) comprises three system architectures: line focus (parabolic trough and linear Fresnel), point focus central receiver (power towers), and point focus, distributed receiver (dish Stirling). In all of these technologies, solar energy is collected, converted to thermal energy, and used to drive heat engine generators.

Concentrating Solar Power (CSP) systems use lenses or mirrors and tracking systems to focus a large area of sunlight into a small beam. The concentrated heat is then used as a heat source for a conventional power plant. A wide range of concentrating technologies exists; the most developed are the parabolic trough ,the concentrating linear fresnel reflector, the Stirling dish and the solar power tower. Various techniques are used to track the Sun and focus light. In all of these systems a working fluid is heated by the concentrated sunlight, and is then used for power generation or energy storage

World's largest photovoltaic power stations (50 MW or larger) PV power station Country DC peak power
(MWp )Sarnia Photovoltaic Power Plant Canada 97 Constructed 2009-2010 Montalto di Castro Photovoltaic Power Station Italy 84.2 Constructed 2009-2010 Finsterwalde Solar Park Germany 80.7 Phase I completed 2009, phase II and III 2010 Rovigo Photovoltaic Power Plant Italy 70 Completed November 2010 Olmedilla Photovoltaic Park Spain 60 Completed September 2008 Strasskirchen Solar Park Germany 54 Lieberose Photovoltaic Park Germany 53 Completed in 2009 Puertollano Photovoltaic Park Spain 50 231,653 crystalline silicon modules, Suntech and Solaria, opened 2008.

CSP is the future energy option to supplement conventional power.

Dr.A.Jagadeesh Nellore(AP),India
Wind Energy Expert

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