financing concentrating solar power plants: the csp-finance … · 2013. 12. 12. · break even...

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

2

3

3

4

3

4

4

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

10

1008 1032 1056 1080 1104 1128 1152 1176time (hour of year)

Pow

er (M

W)

CSP solar CSP fuel

0123456789

10

1008 1032 1056 1080 1104 1128 1152 1176time (hour of year)

Pow

er (M

W)

Wind Park Backup Plant

0123456789

10

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)


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

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

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


0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

2005 2010 2015 2020 2025

Year

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


0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

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!


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

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

3.12 4.12 5.12 6.12 7.12 8.12 9.12 10.12

Date

Pow

er /

Load

(MW

)

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000 Hydrogen StoragePump StorageGas TurbinesPhotovoltaicWind OffshoreWind OnshoreDESERTECNorway ImportGeothermalBiomassBiomass/WasteHydropowerCombined CycleCoal SteamNuclearLigniteElectric Load

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

26.7 27.7 28.7 29.7 30.7 31.7 1.8 2.8

Date

Pow

er /

Load

(MW

)

0

10000

20000

30000

40000

50000

60000

70000

80000

90000


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

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

3.12 4.12 5.12 6.12 7.12 8.12 9.12 10.12

Date

Pow

er /

Load

(MW

)

0

10000

20000

30000

40000

50000

60000

70000

80000

90000


0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

26.7 27.7 28.7 29.7 30.7 31.7 1.8 2.8

Date

Pow

er /

Load

(MW

)

0

10000

20000

30000

40000

50000

60000

70000

80000

90000


Summer Week

Winter Week

German Case Study, DLR 2011

Folie 15

0

500

1000

1500

2000

2500

3000

01.07 02.07 03.07 04.07 05.07 06.07 07.07

Date

Load

in M

W

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

0

1000

2000

3000

4000

5000

6000

7000

01.07 02.07 03.07 04.07 05.07 06.07 07.07

Date

Load

in M

W

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

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

2010 2020 2030 2040 2050Year

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

0

20

40

60

80

100

120

0 5 10 15 20 25 30 35 40

Time steps (units)

Spec

ific

Elec

tric

ity c

ost (

rela

tive

units

)

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

0

20

40

60

80

100

120

0 5 10 15 20 25 30 35 40

Time steps (units)

Ren

ewab

le E

nerg

y Sh

are

(rel

ativ

e un

its)

Case 1Case 2Case 3


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


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?

0

50

100

150

200

250

0 5 10 15 20 25 30 35 40

Time steps (units)

Tota

l Pro

duct

ion

Cos

t (ab

solu

te u

nits

)

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

financing concentrating solar power plants: the csp-finance … · 2013. 12. 12. · break even...

Documents