ABENGOA SOLAR Solar Power for a Sustainable World Dr. Fred Morse Senior Advisor, US Operations, Abengoa Solar and Chairman, CSP Division, SEIA Presented at the Energy & Climate Mini-Workshop Washington, DC 3 November 2008 Concentrating Solar Power (CSP) as an option to replace coal Dr. Fred Morse Senior Advisor, US Operations, Abengoa Solar and Chairman, CSP Division, SEIA Presented at the Energy & Climate Mini- Workshop Washington, DC 3 November 2008 Concentrating Solar Power (CSP) as an option to replace coal
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ABENGOA SOLARSolar Power for a Sustainable World
Dr. Fred MorseSenior Advisor, US Operations, Abengoa SolarandChairman, CSP Division, SEIA
Presented at the Energy & Climate Mini-WorkshopWashington, DC3 November 2008
Concentrating Solar Power (CSP) as an option to replace coal
Dr. Fred Morse
Senior Advisor, US Operations, Abengoa Solar
and
Chairman, CSP Division, SEIA
Presented at the Energy & Climate Mini-
Workshop
Washington, DC
3 November 2008
Concentrating Solar Power (CSP) as
an option to replace coal
2Solar Power for a Sustainable World
ABENGOA SOLAROutline
•
The resource –
where and how large•
The technology –
CSP
•
Why CSP and why now?•
CSP industry, capabilities and projects
•
Cost parameters and outlook•
DOE CSP base-load initiative
•
What’s in the way and conclusions
3Solar Power for a Sustainable World
ABENGOA SOLAR 150 MW SEGS Plant
4Solar Power for a Sustainable World
ABENGOA SOLAR
5Solar Power for a Sustainable World
ABENGOA SOLAR The Resource
•
Solar energy comes in two flavors – diffuse and direct (beam)
•
PV can use both components•
CSP can use only the direct because diffuse can not be effectively focused or concentrated
•
So where is the direct solar energy found?
6Solar Power for a Sustainable World
ABENGOA SOLAR Global Solar Radiation
7Solar Power for a Sustainable World
ABENGOA SOLAR China DNI Map
8Solar Power for a Sustainable World
ABENGOA SOLARSouthwest Solar Resources
Unfiltered Data
9Solar Power for a Sustainable World
ABENGOA SOLAR Filters to Identify Prime Locations for CSP Development
All Solar Resources
Locations Suitable forDevelopment
Start with direct normal solar resource estimates derived from 10 km satellite data.
Eliminate locations with less than 6.75 kWh/m2/day as these will have a higher cost of electricity. Most of Spain is lower.
Exclude environmentally sensitive lands, major urban areas, and water features.
Remove land areas with greater than 1% (and 3%) average land slope.
Eliminate areas with a minimum contiguous area of less than 1 square kilometers.
1.
2.
3.
4.
5.
10Solar Power for a Sustainable World
ABENGOA SOLARSouthwest Solar Resources
Transmission Overlay
11Solar Power for a Sustainable World
ABENGOA SOLAR Southwest Solar Resources > 6.0 kWh/m2/day
12Solar Power for a Sustainable World
ABENGOA SOLAR Southwest Solar Resources with Environmental and Land Use Exclusions
could generate more than 6X current U.S. electricity needs
•
Solar resource for 6,800 GW of versus current nation-wide capacity of approx. 1,000 GW
Significant Population Growth Centers –
15 of the 20 fastest-growing metro areas in the country are in close proximity to solar resource
–
By 2030, an estimated 41 million additional people will move to the Western United States (from 90 million in 2000 to 131 million people)
Environmental Benefits–
15-30 GW by 2030 (up to 37% of West’s power) offsets 15-40 coal plants
–
Compared with coal plants, CSP will save 33-66 million tons CO2
/yr
by 2030
Direct-Normal Solar Resource for the Southwest U.S.
Map and table courtesy of NREL
17Solar Power for a Sustainable World
ABENGOA SOLAR Optimal CSP Sites (from Supply Curves)
18Solar Power for a Sustainable World
ABENGOA SOLAR
•
Concentrating Solar Technologies can be used to “mine”
this resource.
•
Some of these technologies use curved mirrors to focus the sun’s rays and to make steam, others directly produce electricity.
•
This steam is used to produce electricity via conventional power equipment.
•
In multi-Megawatt plants, CSP provides the lowest cost solar electricity.
•
Can provide bulk and/or distributed generation.
How Do We Develop This Resource?
19Solar Power for a Sustainable World
ABENGOA SOLAR Concentrating Solar Power
Parabolic Trough
Power Tower
Dish Engine Concentrating PV
Linear Fresnel
20Solar Power for a Sustainable World
ABENGOA SOLAR Trough Technology
–
Trough collectors (single axis tracking)–
Heat-collection elements
–
Heat-transfer Oil (Therminol VP1)
–
Oil-to-water steam generator
–
Oil-to-salt thermal storage
–
Conventional steam-Rankine
cycle power block
21Solar Power for a Sustainable World
ABENGOA SOLAR
22Solar Power for a Sustainable World
ABENGOA SOLAR Power Tower Technology
–
Heliostats (two-axis tracking)
–
Air or molten-salt receiver
–
Air or molten-salt working fluid
–
Thermal storage
–
Conventional steam-
Rankine cycle power block, or combustion turbine
–
Several developers in the US and several in Spain
Focus on molten-salt plant
23Solar Power for a Sustainable World
ABENGOA SOLAR Dish Stirling Technology
–
Dish (two-axis tracking)–
10 and 25 kW Stirling engines
–
Thermal receivers–
Distributed generation or bulk power
–
8 Different system configurations built and tested over the last 20 years
–
Significant utility interest
24Solar Power for a Sustainable World
ABENGOA SOLAR Concentrating PV Technology
–
25-
35 kW CPV systems–
Two axis tracking structure
–
350 m2
concentrator
–
3M acrylic lens concentrator at 250X or parabolic dish with PV at focal point
–
Silicon solar cells–
Many companies are developing new designs and sound business plans
25Solar Power for a Sustainable World
ABENGOA SOLAR Why CSP and Why Now?
•
Necessity –
the utilities’
other options (coal, nuclear or NG) have significant long term risks with cost implications
•
Uniqueness
of thermal energy storage•
Favorable but still unreliable policies,
such as the RPS and the ITC (both of which are essential) in the US and Feed-in tariffs elsewhere
•
Public opinion
favors solar
26Solar Power for a Sustainable World
ABENGOA SOLAR Awareness of CSP
•
Utilities
–
Growing fast where good DNI and policies exist
•
Policy makers
–
Generally lagging as evidenced by inadequate or unreliable policies at all levels of government
•
Investors
–
Growing fast as evidenced by news articles and conferences but lagging wind and PV investments, held back by policy uncertainty and today’s financial market situation
27Solar Power for a Sustainable World
ABENGOA SOLAR Attributes of CSP in the Eyes of Utilities
•
Utilities are familiar with steam
generation•
Suitability for utility scale
installations of
100MW or more•
Stable, known and decreasing costs and zero carbon emissions provide hedge
against NG
price volatility and carbon caps•
Other generation options have significant risks
•
Ability to provide firm dispatchable output which is of great value
to utilities
28Solar Power for a Sustainable World
ABENGOA SOLAR TES
•
Thermal energy storage allows the electric energy to be shifted for use then it is needed more.
•
TES allows solar electricity to be generated to met utility peak demands or to allow solar to become a base-load power source
•
TES is the cheapest and most efficient form of storage for electric generation
•
However the current indirect two-tank is too expensive to meet long-term cost goals
•
A promising approach is to use molten salt in both the solar field and for storage, but it has risks that appears to be manageable
29Solar Power for a Sustainable World
ABENGOA SOLAR
HTF-SaltHeat Exchanger
Flow Diagram
30Solar Power for a Sustainable World
ABENGOA SOLAR
–
Averaged 80% on-
peak capacity factor from solar
–
Over 100% with fossil backup
–
Could approach 100% from solar with the addition of thermal energy storage.
Private-Dev Bank DebtPrivate-Tax Exempt Bond75:25 Debt-to-Equity
PPA Price (cents/kWh)
Mod
ified
Inte
rnal
Rat
e of
Ret
urn
(MIR
R)
55Solar Power for a Sustainable World
ABENGOA SOLARCSP Cost Reduction Prediction
Easy to use but could be misleading –
WGA Report
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
0.18
0 1000 2000 3000 4000
Cumulative New Capacity by 2015 (MW)
Nom
inal
LC
OE
($/k
wh)
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
0.11
0.12
Rea
l LC
OE
(200
5$/k
wh)
Assumes:- Trough Technology w ith 6 hours of TES- IPP Financing; 30-year PPA- California Property Tax exemption- Includes scale-up, R&D, learning effects- Barstow , California site
2006 Nexant Study: Optimum Size ~250MWe For Current Technology
Effect of Plant Size
57Solar Power for a Sustainable World
ABENGOA SOLAR
Effect of Deployment
100%93%
87% 81%
0%
20%
40%
60%
80%
100%
120%
Current 1000MW 2000MW 4000MWBased on Experience from Existing Plants (354MWs in California)
Market Size
58Solar Power for a Sustainable World
ABENGOA SOLAR Incentives
100%
85%92%
75%
96%
0%
20%
40%
60%
80%
100%
120%
Base: 10%ITC, 5-yrMACRS
30% ITC, 5-yrMACRS
Base + PropTax Exclusion
Base + SalesTax Exclusion
All
Effect of Incentives (IPP Financing)
59Solar Power for a Sustainable World
ABENGOA SOLAR CSP Costs Today and Tomorrow
•
In the SW US, with best conditions, LCOE is in the mid-
high teens in ¢/kWh for firm dispatchable power and could drop to the low-mid teens with existing incentives, assuming commodity prices do not rise further and financial markets do not get weaker.
•
Current cost gap is 2 -
5 ¢/kWh
•
Several independent and credible studies project 8 ¢/kWh (nominal) after 4GW installed, removing the cost gap and becoming competitive with natural gas
60Solar Power for a Sustainable World
ABENGOA SOLARRPS, incentives and policies can close the cost gap between fossil and CSP-derived energy
(from Kate Maracas, Abengoa Solar)
Cost Gap will Close
Ener
gy C
ost
t
Current Cost Gap Commodity Prices,
Financial Markets, Equipment, etc.
Policies and Incentives
Carbon, Fuel Risk
CSP energy cost
Fossil energy cost
61Solar Power for a Sustainable World
ABENGOA SOLAR A Narrowing Cost Gap
(From Barbara Lockwood, APS)
Carbon PolicyFuel Risk
CSP
Large Scale ProjectsGlobal UptakeStrong DevelopersIncentives
Traditional Resources
Equipment and Labor CostsIncreasing Fuel PricesEnvironmental
62Solar Power for a Sustainable World
ABENGOA SOLAR CSP Initiative -
Making CSP a Baseload
Power Solution for the U.S.
DOE Initiative Goals:* Intermediate power at competitive prices by 2015 * Baseload power at competitive prices by 2020 w/60-75% capacity factors
63Solar Power for a Sustainable World
ABENGOA SOLAR Cost and Capacity vs. year
0
5
10
15
20
25
3020
07
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Year
Inst
alle
d C
PS (G
W)
0
3
6
9
12
15
18
Leve
lized
Cos
t (Ce
nts/
kWh)
Base Case
CSP Inititaitve
Case
Levelized Cost
64Solar Power for a Sustainable World
ABENGOA SOLARCSP Attributes, Design & Needed
Improvements
CSP System Attributes:• Dispatchable power with thermal storage• Basic materials: concrete, steel, glass• Standard utility power block/turbine• Quickly constructed (1.5 to 2 years)
• Optimal size: 100 –
250 MW
Improvements Needed to Achieve the 2015 goal:•
Thermal storage R&D –
supporting an operating temperature of 500C (up from today’s 390C)
•
Trough collector and receiver –
increase optical accuracy necessary for producing heat transfer fluid at 500C and improve receiver coating to enable operation at 500C
Improvements Needed to Achieve the 2020 goal:•
Advanced technology -
higher operating temperature (e.g. power tower or dish) or simpler design (e.g. Fresnel concentrator)
Expand U.S. supplier base through manufacturing initiative, optical testing to optimize receiver & concentrator designs
Develop next-
generation system capable of 450°C operation integrated with molten-salt storage.
Develop advanced collectors, receivers, selective coatings, and working fluids designed to operate at 550°C.
Advanced Systems
Evaluate new concepts (e.g. CLFR, distributed power tower), test components, dish technology designed for mass production
Select best options, support prototype designs, identify key technology improvement opportunities.
Integrate high temperature CSP systems with advanced gas turbine/CC technology, reduce system cost through R&D and manufacturing initiative.
Thermal Storage
Develop thermocline
thermal storage, evaluate two-tank molten salt system, develop new storage medium and heat transfer fluids
Adapt storage system to advanced technology design, address cost, performance, operation and O&M issues
Develop advanced thermal storage up to 550°C for troughs and up to 1200°C for advanced CSP/CC technologies.
* Recommendations from industry meeting March 2007
66Solar Power for a Sustainable World
ABENGOA SOLAR
0.05
0.06
0.07
0.08
0.09
0.10
0.11
0.12
0.13
0.14
25% 35% 45% 55% 65% 75%
Annual Capacity Factor
Real
Lev
eliz
ed C
ost o
f Ene
rgy
(200
6 $/
kWh)
Baseline 2:Tank Indirect Baseline Plus Advanced Solar Tech
Molten-salt Thermocline @ 500C Scale-up to 200 MWePower Park 4x200 Power Park w/ 3X Learning
67Solar Power for a Sustainable World
ABENGOA SOLAR
0.05
0.06
0.07
0.08
0.09
0.10
0.11
0.12
0.13
0.14
0.15
25% 35% 45% 55% 65% 75% 85%
Annual Capacity Factor
Real
Lev
eliz
ed C
ost o
f Ene
rgy
(200
6 $/
kWh)
Baseline 2:Tank Indirect Molten-salt Thermocline @ 500CPower Park 4x200 Power Park w/ 3X LearningConventional Gas Combined Cycle Pulverized CoalSequestered Gas Combined Cycle Sequestered Coal IGCCNew Nuclear Power
68Solar Power for a Sustainable World
ABENGOA SOLARCSP Competitive with
Base Load
•
Previous slide shows that the switch to molten salt would allow trough power to compete directly with low carbon power.
•
Scale up to larger power parks and learning could allow troughs to compete directly with conventional base load in the future
69Solar Power for a Sustainable World
ABENGOA SOLAR Future for CSP
•
Cost and efficiency losses require further R&D•
An R&D path has been identified such that future CSP with low-cost storage could be as competitive for base load power (high CF) as conventional pulverized coal fired plants.
•
Given the escalation in fuel costs, this 2007 scenario could be even more likely today
•
Assuming carbon constraints (cap and trade, sequestration, etc.) CSP would be even more competitive
70Solar Power for a Sustainable World
ABENGOA SOLAR Ability to Scale Up
•
Key components are generally available -
steel, glass, concrete, copper, molten salt and turbines
•
Major companies –
6 trough + 4 tower•
Assume each builds 2 GW by 2015 for 20 GW total
•
Assume 5-10GW per year thereafter to reach 95- 170 GW by 2030 (DOE projects 15-20 GW)
•
This will need capital at about $5B/GW, 10 square miles/GW hence several national CSP zones with new transmission
71Solar Power for a Sustainable World
ABENGOA SOLAR What’s in the Way?
•
Policies –
Congress finally extended the ITC but there is no
“I”
there now
•
Cost
–
“Relatively”
high cost of electricity but gap is
closing fast•
Transmission
–
Inadequate or not available, slow and costly
to build and the queue system is broken in many locations•
Land
–
Need access to good sites and each ownership type
has its own challenges•
Permitting -
Slow and costly
•
Environmental
–
Growing concern in some places over
access to the desert regions needed for CSP
72Solar Power for a Sustainable World
ABENGOA SOLAR Other Needed Policies
•
“Good”
carbon policies•
Feed-in Tariffs at state level deserve consideration
•
Land access policies •
Transmission policies
•
Exclusion of property and sales taxes
73Solar Power for a Sustainable World
ABENGOA SOLAR Forecast
•
Carbon
limits
are coming –
will partially or totally close the cost gap•
CSP can scale up
fast
without critical bottleneck materials (we hope) making it a good response option
• Price for CSP power is in commercial range and costs will come down
with increased capacity and will fall below natural gas in the next few years
•
Many technologies options
add certainty
to cost reduction projections •
US and EU R&D programs
will continue to grow in size and value•
Economic development and environmental benefits
will drive political support
•
The CSP market
in the SW US can grow to 20 GW by 2015 and between 95 and 170 GW by 2030 and a comparable rate in the rest of the world.
74Solar Power for a Sustainable World
ABENGOA SOLAR Conclusions
•
CSP is a Unique Renewable Technology–
Large resource in many countries–
Ability to store energy to fit utility need–
Near-term potential for cost competitiveness –
Mid-term potential for base-load via TES•
The Market is Rapidly Developing–
Utilities interest in CSP is growing in many countries–
Large credible, financially stable developers –
Real (financeable, buildable and reliable) projects are being offered•
Policy Decisions will Maintain Momentum–
Long term ITC extension –
Supporting policies
75Solar Power for a Sustainable World
ABENGOA SOLAR Contact Information
Fred MorseSenior Advisor, US Operations, Abengoa SolarandChairman, CSP Division, SEIA
236 Massachusetts Avenue, NW, Suite 605Washington, DC 20002Tel: [email protected]