Many articles have been written recently about the imminent demise of concentrated solar power (CSP). Because of the glut of low cost solar photovoltaics (PV), it is very fashionable to jump on this bandwagon. But, before we call CSP ‘down for the count’ it might be good to hear from both sides.
Cost is the prime reason for the predicted end of CSP. Here is what the analysts and financial community are saying:
Foley & Lardner LLP is a law firm dealing with energy mergers and acquisitions, buying, selling and developing energy assets, including renewable energy assets for solar and wind projects. Jason Allen, Co-Chair, says he has seen a very big push in the crystalline PV market for investors as the prices dropped dramatically:
“The biggest factor is the price of crystalline panels coming down and the number of panel manufacturers coming from overseas: China, Korea, Japan. This has allowed PV to become much more competitive against other technologies.
“I know that in the USA some projects that were scheduled to be CSP have changed to PV type solar farms. Price is one of the big impacts. It makes it harder to justify the CSP price to build and install a utility-scale project. It makes it harder to bid for PPAs [power purchase agreements] and negotiate bi-lateral PPAs. A PV developer can offer a much lower price and usually a much shorter time frame,” he says.
“In the overall market right now, investors are investing in PV. It is relatively fast to put up and can be sized to different projects. It is an easy sell to banks and financial investors. With CSP, you have to find a PPA and convince the utilities in the different states that somehow you are going to be providing a better product than a PV farm can. It can be a hard sell.
“Still, I disagree that it is a dead industry – it simply needs massive projects. This is an industry for large, substantial companies with good names and backgrounds. Without government guarantees, big projects using CSP require companies that have big balance sheets,” Allen adds.
Market analyst, Andrew Skumanich, Founder & CEO of SolarVision of Silicon Valley, CA, USA, agrees with Allen. He says the real essence is the cost: “CSP had some advantages and was marginally acceptable in certain cost areas, but the market doesn't care anymore. The market is going to turn to the technology that is the cheapest.
“Of course, there are other aspects to CSP that are positive, but they are not enough. CSP had a window of opportunity, but it is rapidly closing. This was that it could be done at a large scale, and with that scale it could have lower electricity cost and the added option for storage which would address intermittency. But the problem is that the storage is still too expensive and it's not fast enough to allow for it to address intermittency in a cost effective way. Plus, there are now battery solutions being developed that may soon put PV on the low-cost side of CSP. The PV battery combination compared to the CSP molten salt and other forms of CSP storage may be changing the storage paradigm,” he adds.
Skumanich notes that utility companies are very familiar with steam generation and have a comfort level with any technology involving steam. “How much that plays a roll in this is hard to say, but it is part of what has allowed CSP to move forward. Solar in the panel-mode is a different beast, but utilities are slowly starting to understand it and get comfortable with it. That's an added reason why the window for CSP utilities is starting to close. The cost of its advantages is not dropping fast enough, while solar panel costs are dropping like a rock – and the utility companies are becoming familiar with PV and CPV.”
“My prediction is that CSP plants that were built in the deserts in the 1980s and the few built in from our decade will keep chugging along, but they won't be building any new utility-scale plants. CSP is still in the game, but it is at a ‘make it or break it’ point. It's going to take some unbelievable technology breakthrough to tip the scale in the favour of CSP,” he concludes.
Paula Mints, Director, Energy at Navigant Consultanting in Palo Alto, CA, backs the above. When asked about the comparative strengths and weaknesses of CSP, PV and CPV in the utility-scale market, she says: “Right now, c-Si [crystalline silicon] is extremely inexpensive and other technologies are having difficulty competing. In a nutshell, this is the current situation.
“Solar technologies take considerable time to develop and the driver to larger or smaller markets is incentives. Currently, incentives are decreasing and prices for crystalline technologies are extremely low. The upfront capital cost [of CSP] trumps the operations and maintenance (O&M); and there is the water issue, which is a problem for CSP. To survive, CSP has to be able to compete with flat-plate, tracking solar and CPV – that is, its costs need to come down.”
Support and investment
Despite some of the bad press, governments and multi-national companies are investing to bring about higher efficiency and lower-cost CSP technologies. Why would they back a technology that analysts claim is gasping its last breath? This is their rebuttal:
AREVA, which provides low-carbon energy solutions including a fully integrated nuclear and renewable energies offering, says its Renewable Energies Business Group is at the heart of its industrial strategy. One of its segments, AREVA Solar of Mountain View, CA, specialises in concentrated solar thermal power.
“With an expected annual growth rate of 20% in the next decade, the CSP market is a very appealing opportunity for AREVA to capture a significant market share,” according to Jayesh Goyal, Global VP of Sales.
Goyal says that the general perception that CSP cannot compete with PV is based on a comparison of purchase price alone, and does not recognise the special value that CSP brings. “If the goal is only the cheapest solar panel, without worrying about storage or any of the other benefits, then certainly PV has an edge,” he says.
“While that may be true for some utility installations in the USA, it doesn't mean that CSP does not still have a huge global market. There are many countries that recognise the value of CSP and are willing to create programmes to promote it as a long-term solar energy base for a country.
“Another area is ‘booster’ applications for hybrid utility plants and industrial process steam applications. CSP technology provides very low cost steam for existing power plants and industrial processes. In those markets, PV obviously does not compete at all. And it is a very big market for CSP,” Goyal adds.
AREVA's compact linear Fresnel reflector (CLFR) technology is just one of the technologies in the CSP family, and it is relatively new. Most plants were built using parabolic trough technology. “We took the parabolic trough concept and saw we could reduce the cost by using the Fresnel concept where you split the parabola into thin strips of flat glass. With the lower cost of the flat glass combined with other improvements in the system, you get the same effect but at a much lower cost.
“We also made enhancements to achieve steam conditions that were higher and better,” Goyal adds. “It is a direct steam based system. We are able to achieve superheated steam that's higher pressure and temperature than what you can get from a parabolic trough system. But it still uses very common components which hold down the cost. And it uses less land while increasing efficiency.
“A standard CSP plant typically needs 5 to 6 acres per MW. Our technology uses about 3.5 acres per MW for a stand alone plant, and only 2 acres per megawatt for a process steam application. Another benefit CLFR technology brings is using dry cooling extensively, which reduces the water consumption of a normal water cooled system by 90%,” Goyal explains.
“We're building a 44 MWe solar booster project for CS Energy's 750 MWe coal-fired power station in Queensland, Australia. The largest solar/coal-fired power augmentation project in the world, the Kogan Creek Solar Boost will increase power output with solar-generated steam, avoiding approximately 35,600 metric tonnes of CO2 per year. The project is under construction and will be online in 2013,” Goyal says.
In the USA, Tucson Electric Power (TEP) is partnering with AREVA Solar on a CSP addition to TEP's H. Wilson Sundt Generating Station in Tucson, AZ. Construction of the Sundt Solar Boost is scheduled to begin in the spring of 2012, and the project is expected to be operational by early 2013.
“It is a sad reality though, that many CSP developers are having difficulty financing their projects. It pays to have a partner like AREVA who is financially strong. The combination of a very lean design and strong position are leading to our success in the CSP market. We keep it simple, reliable and backed by very strong guarantees,” Goyal adds.
About the author:
Joyce Laird has an extensive background writing about the electronics industry; semiconductor development, R&D, wafer/foundry/IP and device integration into high density circuit designs.