Dti solar park cob pillay 2010

CCI Clean Energy Program

Presentation to the Asian Development Bank

15 June, 2009

Introduction to Solar Park Concept and Technologies

Information Session – Pretoria

14 September, 2010

Introductions - The Clinton Climate Initiative

• “The Clinton Climate Initiative (CCI) works under the leadership of government partners, and in collaboration with private sector sponsors, to develop and implement large-scale projects that directly reduce greenhouse gas emissions and serve as replicable and scalable models for others to follow…”

• Three Focus Areas: Cities, Clean Energy, and Forestry

• Within Clean Energy:

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• Utility Scale Solar – India, Australia, U.S.A., Morocco and South Africa

• Carbon Capture and Sequestration

• Clean Energy Team includes people withy backgrounds in: • Project Finance, Private Equity, Strategy Consulting, Power Industry, Electrical

Engineering, Policy Development and Politics

• CCI is completely independent and has no financial ties to any particular company, technology, or project

CCI – Solar Park Concept

• A Solar Park is a concentrated zone of solar development, pre-permitted to include power plants developed by private investors

– Convoy Deployment

– Shared Infrastructure

– Streamlined permitting processes, regulatory approvals and boilerplate contracts

• Solar Parks can significantly reduce the cost of electricity from solar power due to

– (i) economies of scale;

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– (i) economies of scale;

– (ii) the use of less expensive domestically-manufactured components; and

– (iii) removal of regulatory hurdles

• Independent Engineering Analysis in Queensland, Australia:

– 50-60% infrastructure cost-savings scaling from 250 MW to 1,000 MW

– Results in 14-18% reduction in cost of electricity

• “Coordinated Purchasing” of Components may lead to further reductions

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CCI Solar Program – South Africa Project Status

• South Africa

– MOU Signed between DOE and CCI to initiate pre-feasibility study (November 2009)

– Pre-feasibility study completed (April 2010)

– DOE developing a Solar Park Authority and procurement strategy

– DTI consulting with local industry on capacity expansion and component procurement policies

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procurement policies

– National Treasury, DBSA, public pension funds and other financial stakeholders developing programmatic financing package for Solar Park IPPs

– Northern Cape Government, the Municipality of Upington, ESKOM and an engineering partner (Fluor) on siting analysis and infrastructure planning

– Investor Conference: September/October 2010

– Government likely to set an initial target for “Phase 1” of 1,000 MW by 2015 or 2016

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Solar Park Pre-Feasibility Study Conclusions (April 2010)

• Optimal sites for solar found in Northern Cape

– Strong solar radiation (DNI and GHI) on Government owned land

– Water availability (for CSP)

– Transmission capacity expansion planning underway

• Solar can help South Africa meet “baseload” and “peak” power capacity needs

• If developed in a “Solar Park” context and if incentives were designed to

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• If developed in a “Solar Park” context and if incentives were designed to reduce interest rates for projects, various solar technologies can be competitive with coal-fired power by 2013

• Once enough solar power is built, solar technologies can be competitive even at commercial financing rates

• Capacity can be brought online incrementally in short time frame (unlike nuclear or coal)

• Significant stimulus to local manufacturing and labor demand possible

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Solar Technology Summary

• Concentrated Solar Thermal Power (“CSP”) plants concentrate heat from the sun to power a traditional steam turbine or engine to generate electricity

– Parabolic Trough

– Central Receiver (Tower)

– Concentrated Linear Fresnel (CLFR)

– Parabolic Dish Engine

– Efficient thermal storage commercially proven; base-load generation demonstrated

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demonstrated

• Photovoltaic (“PV”) systems directly convert sunlight into direct current (DC) electricity

– mono- and multi-crystalline (silica) PV

– Thin-Film PV

• Concentrated Photovoltaic (“CPV”) systems use refractive lenses to concentrate sunlight onto a series of highly efficient PV cells

Solar Technologies - CSP

Parabolic Trough Compact Linear Fresnel

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Parabolic Trough Compact Linear Fresnel

Central Receiver (Power Tower) Parabolic Dish w. Engine

State of CSP Market

Installed Capacity by Technology

Installed Capacity by Geography

92.7%

4.0%0.2%

0.7%

2.3%

Trough Tower Dish CLFR Hybrid

46.3%

50.7%

3.0%

USA Spain Other

• CSP Market Driven by subsidies (Spanish Feed-in Tariff), which are being scaled back

• 953 MW in operation today

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Capacity in Construction by Technology

Capacity in Construction by Geography

91.7%

0.9%

0.1%

7.3%

Trough Tower Dish Hybrid

3.9%

92.7%

3.4%

USA Spain Other

today

• ~1,935 MW in construction and over 15,000 MW reportedly in development

• Parabolic trough most utilized technology to date

CSP – Parabolic Trough

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• ~880 MW in operation (in use since the “SEGS” plants of the 1980s)

•Parabolic mirror focuses light on an “evacuated” tube that carries a heat transfer fluid (typically an oil)

• Max steam inlet temperature of about 370 C

•Storage capable

•Individual collector loop ~150 to 170 meters; single-axis tracking

CSP – Parabolic Trough

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Source: Worley Parsons

CSP – Trough (Example of Variation Within Tech)

LS – 3 Collector SENERTrough

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LS – 3 Collector SENERTrough

SGX – 1 Space FrameSources: NREL “Troughnet”; Sener

CSP - Parabolic Trough Layout

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Source: Worley Parsons

CSP – High-level Trough Schematic

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CSP – HTF Supply and Return

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CSP – Heat Exchanger

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CSP – Storage System Schematic

HOT SALT

COLD SALT

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HOT SALT

Source: Worley Parsons

CSP – Trough Plant with Storage in Construction

• 2 tank system for a 50

MW plant with 8 hours

storage

•Each built to contains 30,000 tons of Salt

• 39 meters in diameter

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• Over 1,000 MWth

heat capacity

• 9 CSP plants with thermal storage are in operation today (trough and tower), with up to 8 hours of storage capacity

• 16 more are in construction, including one tower with 12 hours of storage capacity (Gemasolar)

CSP - Tower

Receiver

Heliostats

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• 38 MW in operation today

• Higher temperature conditions than trough (up to 550 C)\

• May use molten salt as HTF, making “direct” storage possible

• Tower height varies but can be up to ~220 meters

• ~ 5,000 to 20,000 heliostats depending upon capacity and use of storage

CSP - Tower

• Vertical banks of tubes with top and bottom headers used to carry working fluid (can be molten salt or water)

• High temperature alloy required

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• Slight curve in heliostats optimal depending upon tower size

• ~2 to 200 m2 surface area per heliostat

•Dual-axis tracking

CSP – Tower with Molten Salt Loop

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CSP - CLFR

• 7 MW currently in operation

• Single-axis tracking, flat mirror facets focus heat onto single receiver

• Lower levels of solar

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• Lower levels of solar concentration than other CSP technologies, but lower CAPEX

• Oil or water as heat transfer fluid

• Inlet temperature ~260 C

CSP – Dish Engine

• ~2 MW currently in commercial

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• ~2 MW currently in commercial operation

• Individual “dish” capacity of 25 to 80 kW

• Flat mirror facets assembled into parabolic dish shape; dual-axis tracking

• Mirrors focus light onto a Stirling Engine to directly generate electricity (thermal storage not possible)

Solar Technologies – Photovoltaics (“PV”)

Silica (crystalline) Module Thin-Film Module

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Silica (crystalline) Plant Thin-Film Plant

Silica (crystalline) Module Thin-Film Module

State of PV Market – Capacity Grown and Geography

• New installed capacity in 2009 totaled over 6,000 MW

• Can be used for utility-scale or small, off-grid projects

• As PV directly produces electricity, large-scale storage not economic

• Module prices have dropped ~50% over the past two years

•Geographical distribution of projects driven by subsidies (German and Spanish Feed-in Tariffs), which have also seen recent reductions

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State of PV Market – Decreasing Prices

• PV price decreases driven by growing expansion of silicon processing capacity (now in over-supply) and growing thin-film manufacturing capacity

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Silica, ingots and wafers, cells, modules

Solar Grade Silicon, $/kg

PV –Solar Cell Schematic

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PV – Fixed-tilt and Tracking

• Lower efficiency technologies (thin-film = 10-13% efficiency) typically do fixed-tilt

• Higher efficiency (silica = 14-20% efficiency) utilize single-axis tracking

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Fixed-Tilt Horizontal Axis Vertical Axis

Solar Technologies – CPV; State of Market

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CPV Module and Tracker CPV Module Erection

• Highly efficient solar cells with refractive lenses form series of modules that are mounted on a dual-axis tracker•0

• Individual module capacity on the order of a few hundred kW

• A novel technology with roughly 15 MW of installed capacity

Solar Technologies – CPV

• CPV modules use “multi-junction” solar cells to capture a broader range of light radiation

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• Refractive lenses to concentrate radiation onto the cells

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Summary of Technology Components

CSP Si PV Thin-Film PV CPV

Raw Silicon Semi-Cond. Material - CdTe, CIGS Gallium Arsenide

Ingots and Wafers Glass Multi-Junc. Cells

Encapsulants (e.g. EVA) Frames Glass

Backsheets (e.g. TPT) Modules Lenses

Ribbon (tin, copper) Modules Modules

Silicon Sealants

Glass

Cells

Frames

Modules

Mirrors Steel /Alum. Steel /Alum. Steel /Alum.

Up-stream

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Mirrors Steel /Alum. Steel /Alum. Steel /Alum.

Tubes/Receivers Inverters Inverters Inverters

Heat Transfer Fluids Tracking Sys. Tracking Sys. Tracking Sys.

Steel - load bearing; mirror frame Cabling Cabling Cabling

Concrete Transformers Transformers Transformers

Cabling

Pumps and Valves

Fabricated Piping

Controls and Sensors

Steam Turbine/Generator Set

Heat Exchangers

Pumps and Valves

Fabricated Piping

Transformers

Storage Medium (salts)

Heat Storage Tanks

Solar Field

Power Block

Indicative Component Requirements for Solar Parks – Steel

• A100 MW CSP Plant can require anywhere between 9,000 and 26,000 tons of steel

– The wide variance is meant to account for CSP plants with and without thermal storage.

– Typically mild carbon, hot-rolled and flat-plate steel

– Common specifications include ASTM A992, ASTM A36, S 275 JR, S 355 JR, H-340, ASTM A 16 Gr. 75

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CSP Steel Tonnes

MW Min Max Average

100 9,000 26,000 17,500

500 45,000 130,000 87,500

1000 90,000 260,000 175,000

3000 270,000 780,000 525,000

5000 450,000 1,300,000 875,000

Indicative Component Requirements for Solar Parks – Glass

• A100 MW CSP Plant can require between about 445,000 and 1.2 million square meters of glass for its mirrors

• Range again attributable to thermal storage

• Parabolic trough plants require curved mirrors between 2 and 3 square meters apiece, while other technologies require flat mirrors between 1 and 7 square meters apiece

• Number of mirrors per heliostat or mirror-line varies widely by technology

• The glass is usually 3-4 mm thick and must be low-iron tempered glass with 92-93% reflectivity

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93% reflectivity

• Some technologies are experimenting with reflective films rather than glass

Parabolic Volume (m2) Tower (Flat) Volume (m

2)

MW Min Max Average MW Min Max Average

100 445,100 1,188,000 816,550 100 490,600 1,870,600 1,180,600

500 4,450,900 11,880,300 8,165,600 500 4,905,900 18,705,900 11,805,900

1000 8,901,800 23,760,700 16,331,250 1000 9,811,800 37,411,800 23,611,800

3000 13,352,700 35,641,000 24,496,850 3000 14,717,700 56,117,600 35,417,650

5000 22,255,000 59,400,000 40,827,500 5000 24,530,000 93,530,000 59,030,000

Indicative Component Requirements – PV Manufacturing Inputs

• The table below offers indicative figures of materials requirements for a module assembly unit

• The levels shown represent general averages based on multiple data points

• International suppliers often suggest an annual yield (or demand) of ~30 MW/year is required to justify investment in local module assembly

• Economies of scale for up-stream cell manufacturing are achieved at much

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Capacity Glass (tons) Alum (tons) Encapsulant (m2) Backsheets (m2) Ribbon (units) Sealant (tons)

30 1,710 48 427,500 213,750 1,900 29

100 5,700 158 1,425,000 712,500 6,333 95

500 28,500 792 7,125,000 3,562,500 31,667 475

1000 57,000 1,583 14,250,000 7,125,000 63,333 950

2500 142,500 3,958 35,625,000 17,812,500 158,333 2,375

5000 285,000 7,917 71,250,000 35,625,000 316,667 4,750

• Economies of scale for up-stream cell manufacturing are achieved at much larger yields (perhaps 1 GW/year)

Job Creation Potential

• While figures vary based on technology mix and pace of build, CCI’s base case assumes an average of ~12,000 construction jobs could be created over 8 years during construction of a 5,000 MW Park

• 3,000 ongoing O&M jobs upon completion of 5,000 MW

• These estimates do not include indirect jobs that would be created in the manufacturing and services sector as a result of the project

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Job Creation Potential

Annual Construction Jobs Created 2012 2013 2014 2015 2016 2017 2018 2019 2020 Average

PV/CPV Capacity Added by EOY (MW) 200 200 200 200 200 200 200 200 200

CSP Capacity Added by EOY (MW) - 400 400 400 400 400 400 400 400

PV/CPV Construction Jobs 1,776 1,776 1,776 1,776 1,776 1,776 1,776 1,776 1,776 1,776

CSP Construction Jobs 5,012 10,024 10,024 10,024 10,024 10,024 10,024 10,024 5,012 8,910

Park Transmission Jobs 430 430 430 430 430 430 430 430 143 398

Park Infrastructure Jobs 550 - - - - - - - - 61

Regional Transmission Upgrade Jobs 1,122 689 1,411 2,006 1,376 1,376 1,108 1,108 - 1,133

Total Average Direct Jobs 12,278

O&M Jobs Created 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Cumulative

PV/CPV O&M Jobs - New - 146 146 146 146 146 146 146 146 146

• Construction labor force could be re-employed by other Solar Parks upon completion of the first

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PV/CPV O&M Jobs - New - 146 146 146 146 146 146 146 146 146

CSP O&M Jobs - New - - 212 212 212 212 212 212 212 212

PV/CPV O&M Jobs - Cumulative - 146 292 438 584 730 876 1,022 1,168 1,314 1,314

CSP O&M - Cumulative - - 212 424 636 848 1,060 1,272 1,484 1,696 1,696

Total O&M Jobs Created 3,010

*Scenario above based on solar company estimates for plants built in the U.S. and E.U., adjusted for local labor productivity (2.10 : 1.00 versus U.S. Reference); infrastructure related job estimates based on CCI modeling of inputs from ESKOM and Trans-Africa Projects.

Next Steps

• DOE and DTI would like to initiate a dialog with local industry in a dialog about the potential opportunities presented by the establishment of a Solar Park in the Northern Cape

• DOE and DTI hope to learn how local industry might respond to the demand for products and services

• DOE and DTI would like to invite local industry representatives to

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attend an upcoming conference introducing the Solar Park to international developers, investors and policymakers

• This conference could include some forum designed to promote networking and discussion between international developers, component manufacturers, EPCs and local industry

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