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16/09/2014

Concentrated Solar Power: overview and perspectives

The solar energy transmitted on earth exceeds about 11 000 times the worldwide energy demand, evaluated at 12.5 billion Toe in 2012. Even if photovoltaic is the leader as regards as the solar electricity generation, other solutions still exist.
Especially adapted to highly sunny regions, the Concentrated Solar Power technology (CSP) offers numerous perspectives for the coming years.
What are the features of the CSP and its specificities compared to the photovoltaic? Who are the market stakeholders? What about the main challenges and perspectives for the developing technology?

 

CSP technology is ideal in arid area

The concentrated solar power is based on one easy principle: reflectors (mirrors or lenses) redirect and concentrate the direct sunrays on a captor to heat a transfer fluid into a tube. The CSP technology then needs a conversion organ to turn the produced heat into mechanical and finally electrical energy.

Actually, the CSP technology is divided into four categories; depending on the collector and concentration methods.

The most mature is the "parabolic trough", which represents more than 95% of the operational plants. The "solar power tower" technology also increased since the past few years; 20% of the project under construction and 52% of the planned projects consist of solar power tower. The concentrating "Linear Fresnel reflector" and the "Dish Stirling" are still under development.

The CSP technology is viable within the highly sunny regions with a clear sky. The high potential regions - DNI above 2500 kWh/m²/year - are Northern Africa, Southern Africa, northwestern United States, Chile, Peru and Mexico. In Europe, southern Spain and Italy, Cyprus, Greece and Portugal have the highest potential with a DNI between 2000 and 2250 kWh/m²/year.

Figure 1 : Four categories of CSP technology

Source: Feuille de route thermodynamique, ADEME

Increase technical performance is the main challenge of the CSP industry

The development of the CSP sector depends on its ability to meet electricity demand outside sunshine periods. Thermal storage could solve this issue; it offers the possibility to shift the electricity production, guaranteeing a capacity despite the solar variations. The electricity produced is thus better valued on peak and semi-base hours which does not necessarily match with the ranges of irradiation.

Electricity transmission over long distances is another challenge for the CSP exploitation. Large countries such as the United States, India, Brazil and China should invest in High Voltage Direct Current (HVDC) lines for connecting production sites to consumption sites. In China, HVDC lines of 975 km are used to connect the Three Gorges Dam in Guangdong Province.

Furthermore, cross-border electricity transmission lines would open export markets for producer countries and increase the security of supply for importing countries. This approach has been particularly promoted with the Mediterranean Solar Plan and Desertec Industry Initiative.

Finally, it is important to know that the processes of cooling and condensing are highly water consuming. The water need is about 3000L/MWh for a trough parabolic and Fresnel CSP. This volume is very high compared to the 2000 and 800 L/MWh required for the exploitation of respectively coal and gas turbines. This water problem is even more critical that CSP plants are deployed in arid or semi-arid areas. To date, only the technique of dry cooling reduces significantly water needs. In return, the dry cooling induces a decrease of 7% of the electricity production and a 10% increase in its cost.

A growth dynamic is launch despite low investments

Over the period 2007-2012, the installed capacity annual growth rate was estimated at 44%. If this growth rate is maintained, the 2.8 GW of CSP installed capacity in 2012 remains low compared to the 100 GW of installed capacity for photovoltaic at the same time.

Figure 2 : CSP capacity - (*) Compound Annual Growth Rate

Sources: Base SolarPaces, base BNEF, Protermosol ans IEA, SBC Energy Institue

Spain and the United States respectively have 69% and 28% of the total installed capacity in 2012. In the coming years, stopping the mechanism of purchase prices practiced in Spain will certainly put the USA with their additional 2.8 GW installed in 2017. At the same time, new actors such as China, MENA and South Africa will strengthen the CSP market, increasing the global capacity to 11 GW by 2017.

The increase in installed capacity is mainly due to the increase in investment, which reached $ 11 billion in 2011. However, this amount remains below the $ 125 billion spent for photovoltaic during the same year. In this sense, we can say that investment in CSP is still in its infancy. This situation can be explained by an original high investment per thermo-solar watt. This investment has a direct impact on the cost of electricity production (LCOE) which more than 80% returns only to the CAPEX.

Figure 3 : Andasol plant, Spain (50 MW, storage of 7.5h)

Sources: IEA Technology roadmap - CSP and IRENA, Renewable energy technologies

The CSP is thus not yet competitive. If developments in Spain and the United States as well as those expected in the MENA region give hope for a strengthening of the sector, it is possible in the short term only through incentive mechanisms such as tariffs or tax credits granted to project developers. Spain is a good example since the producer has the choice between two mechanisms: either the repurchase of its electricity at 270 €/MWh, or receive a premium of 250 €/MWh which is added to market price within the limit of 340 €/MWh.

A great potential in the future and industrial opportunities to seize

The IEA forecast scenario anticipates a strong development of CSP technology. Also according to the IEA, the installed capacity will exceed 100 GW by 2020. Almost all of the electricity generated is recovered on the peak and semi-base hours. The main challenge for the industry is to increase their annual capacity from 1 GW to 20 GW within the next 10 years. By 2030, long-distance networks will be deployed and CSP will become competitive electricity assets based on fossil source. For 2030, the total installed capacity forecast is estimated at more than 300 GW. By 2050, it even exceeds 1000 GW, or 11.3% of the total electricity production. North America will be the largest producer, followed by Africa, India and the Middle East.

The expected development of CSP technology should be accompanied by interesting industrial opportunities. To date, the value chain is dominated by American, German and Spanish companies. However, we can say that at this stage there is no monopoly. From there, the investment opportunities are many and new entrants - including French actors - will have to quickly take position. Among the market entry strategies, there is the buyout (ie Areva bought Ausra), or the establishment of a group to meet a project (ie Veolia and Solar Reserve), or the creation of a pure player (ie Abengoa).

Figure 4: Main actors within the CSP sector

Source: Bloomberg New Energy Finance

CSP is a relatively new market tipped to grow significantly in the coming years. Its development goes hand in hand with major industrial opportunities and the need to have people with advanced technological skills. For these new profiles, there is still much to be done given that today, few companies can meet the technical requirements of CSP plants. In addition, some devices (such as turbines) are not specifically made for the solar market. This is a real opportunity for countries that want to anticipate and enact an employment dynamics in phase with the energy world of tomorrow.

Sia Partners


Ton of oil equivalent - The data comes from the BP Statistical Review Of World Energy - June 2013

By comparison, the photovoltaic technology directly converts solar radiation into electricity.

Source: IEA SolarPaces database, March 2013

Direct Normal Irradiance: a measure of the Solar Irradiance striking a surface held normal to line of sight to the sun (kWh/m²/year). Unlike photovoltaic, CSP does not exploit the diffuse radiation.

Beyond 500 km, the DC lines are more profitable than AC lines.

For example, the dry cooling of the Ain Beni Mathar plant in Morocco has reduced water consumption by 5.4 million m³ to 850,000 m³ per year, a saving of 80%.

Source: Bloomberg New Energy Finance

For a Dish Stirling plant, investment varies between 4 and 8$/W while it varies between 1 and 3.5 $/W for a photovoltaic plant.

International Energy Agency

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