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Climate Action 2012-2013


ENERGY AND POWER Table 1. Concentrating solar power technology overview Source: adapted from Fichtner, 2010, and IRENA, 2012. Parabolic trough Solar power tower Linear Fresnel Stirling engine dish Typical capacity (MW) 10-300 10-200 10-200 0.01-0.025 Maturity of technology Commercially proven Pilot commercial projects Pilot projects Demonstration projects Operating temperature (ºC) Solar-to-electricity efficiency (%, annualised) 350-550 250-565 390 550-750 11-16 7-20 13 12-25 Storage Indirect two-tank molten salt at 380ºC or direct two-tank molten salt at 550ºC Direct two-tank molten salt at 550ºC Short-term pressurised steam storage Under development Water requirement (cu metres/MWh) 3 (wet cooling); 0.3 (dry cooling) 2-3 (wet cooling); 0.25 (dry cooling) 3 (wet cooling); 0.2 (dry cooling) 0.05-0.1 (mirror washing) Traditional generation technologies benefit from lower upfront costs, but are then subject to ongoing fuel costs and fuel price variability. Given historic price volatility for natural gas and the possibility of carbon reduction policies, this could be a substantial and costly risk. Over their 30-40 year lifespans, CSP facilities are a good hedge against that risk. Compared to traditional fossil fuel power plants, CSP facilities require high upfront costs. The power generation portion of a CSP facility amounts to a small fraction of the total cost; the majority of the initial investment is for the solar collectors which harness the sun’s energy. In a solar power tower project, the heliostats alone account for 30 to 50 per cent of the project’s capital costs. After the initial capital investment, the fuel for CSP is free and, crucially, does not emit greenhouse gases or other harmful emissions. In fact, the carbon embodied in the manufacturing and installation is paid back after about a year of operation. CSP versus solar PV While solar PV and CSP do not directly compete for resources – CSP requires direct sunlight, while solar PV can generate electricity under diffuse light, albeit less efficiently – their ideal locations do substantially overlap. More importantly, energy planners tend to see solar PV and CSP as interchangeable. Both renewable technologies harness the sun’s energy to produce electricity and neither emits greenhouse gases nor has any fuel costs, and thus they often end up competing on a price basis. With the recent precipitous drop of PV panel prices, the capital costs of solar PV are lower than those of CSP. However, this discounts one of the most attractive elements of CSP: the potential for straightforward integration of costeffective thermal storage. CSP’s thermal energy can be stored in molten salt tanks either through the addition of a separate thermal loop or by using molten salt directly as the transfer fluid – as evidenced by the Spanish Andasol and Gemasolar generating facilities, respectively. Seven parabolic trough and solar power tower generating facilities (currently operating or under construction) have 6-7.5 hours of thermal storage, and some have up to 15 hours. The addition of thermal storage to CSP removes any concern about variable generation – which is an issue for wind and solar PV – and facilitates the predictable generation of electricity that can be dispatched on demand. Because of the predictable nature of CSP with thermal storage, generating facilities can be relied upon as baseload power at night or during periods of low solar radiation. The dispatchable nature of thermal storage capacity also allows CSP facilities 68

ENERGY AND POWER to have access to additional revenue streams by ensuring electric grid reliability and power quality, and by reducing grid integration costs. While the addition of such storage increases costs, the benefits outweigh the costs. ADVANTAGES AND DISADVANTAGES OF LARGE SCALE INSTALLATIONS CSP is most economically viable in large installations. This can be viewed as both a positive and a negative. As a negative, the potential for distributed CSP is less than for distributed solar PV, which can be installed easily on businesses and residences. Moreover, the best CSP locations are often in remote areas away from transmission and with low water availability. Unfortunately, unlike wind and solar PV power, CSP requires water for cooling in the electricity generation process, although ‘dry cool’ methods to reduce water usage are available. Parabolic troughs and solar power towers require substantial amounts of land, generally with flat topography. The 280 MW Solana generating facility in Arizona is situated on 7.75 square kilometres of desert, less than a wind project of similar capacity, but far larger than an equivalent fossil fuel power plant. It is important to note that this calculation would change substantially if the land requirement for fossil fuel extraction were included. On the positive side, large CSP installations allow for economies of scale in production and installation, leading to price reductions. In addition, electricity system operators are accustomed to dealing with large installations, which can help lead to widespread acceptance. For a power plant operator, the downstream CSP system resembles a traditional steam-powered generating facility, which is the primary worldwide generation technology. This allows for configurations such as Integrated Solar Combined Cycle (ISCC) generating facilities where concentrating solar facilities produce a portion of the power, with natural gas providing the remainder, as is the case in projects in Morocco and Algeria. CSP’s major components are made of readily available, plentiful materials such as glass, steel, iron, copper, concrete, aluminium, synthetic oil and plastic; no rare earth metals are required. The CSP supply chain is well adapted to locally-sourced manufacturing, and many CSP components could be manufactured in developing countries as local markets arise. A Deloitte study of the Spanish CSP market found that from 2008 to 2010 the project investment that stayed within the country increased from 58 per cent to over 70 per cent. EFFECTIVE PUBLIC POLICIES The CSP industry has recently undergone some restructuring, and it is possible that in the long-run certain CSP technologies will be more successful than others. However, given the right policy incentives, CSP is poised to supply reliable, renewable electricity to both developed and developing countries for years to come. In the major CSP markets of Spain and the USA, two different financing mechanisms have been used to incentivise market penetration. In Spain, long-term, fixed-rate feed-in tariffs provide a low-risk guarantee. The USA, meanwhile, uses tax incentives and low-interest federal loans coupled with state renewable portfolio standards to support market penetration. As developing countries consider policies to encourage CSP deployment, the World Bank recommends feed-in tariffs as a straightforward mechanism, which provides a predictable, guaranteed return for investors and has proven successful at spurring growth. Carol Werner has served as the executive director of the Environmental and Energy Study Institute (EESI) since 1998. With more than 30 years of public policy experience on energy and environmental issues, Ms Werner has been responsible for 20-30 Congressional briefings annually on science, technology and policy issues, and has been a frequent speaker at conferences and workshops on energy and environmental issues. Blaise Sheridan is EESI’s Policy Associate in the Energy and Climate programme, where his work focuses on renewable energy and climate change. Previously, Blaise was an Energy Policy Fellow for US Senator Chris Coons (D-DE). The Environmental and Energy Study Institute (EESI) is a non-profit organisation advancing innovative policy solutions to set us on a cleaner, more secure and sustainable energy path. Our three-pronged approach for effecting change is based on policy-maker education, coalition building, and policy development. EESI was founded by a bipartisan Congressional caucus in 1984, and its strong relationships with Congress helps EESI serve as a trusted source of credible, non-partisan information on energy and environmental solutions. EESI is an independent not-for-profit organisation, supported through contributions and grants. 69