Concentrated Solar Power: Industry Outlook
Gp Capt PK Khanna, Senior Project Engineer, Center for Solar Energy Technologies (CSET), Indian Institute of Technology Jodhpur (IIT J)(Raj)`
Introduction •
Concentrating Solar Thermal Power (CSP) Technology has reached a high level of commercial maturity.
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Four basic approaches, trough concentrators, tower / heliostat systems, linear Fresnel concentrators and dish concentrators (in declining order of deployment and commercial maturity).
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Level of deployment has been growing at around 40% per year.
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Overall the use of solar generation technologies, including photovoltaic systems, is growing fast and becoming a significant part of the future energy mix.
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CSP approaches, although only a small part of the present total, have claimed an important place in the future mix, because they offer large scale and proven energy storage as an inherent part of
Why Concentrated Solar Power (CSP) ? PV technology
CSP technology
Solar irradiation is harnessed by exposing to sun.
Solar irradiation is harnessed by concentrating on single point or over the tube.
Thermal energy can be stored in form of chemical energy.
Can store thermal energy directly.
PV cells are flat to absorb irradiation.
CSP has mirrors to reflect irradiation.
Low efficiency.
Higher Efficiency .
Involves conversion of DC to AC.
Can be made direct AC generation.
Does not provide peak loads.
CSP provides peak, intermediate or base load capacities.
CSP Plants: Global
CSP Plants (NSM Ph 1) India
CSP Market •
Important to understand the market readiness of different CSP technologies, the investment opportunities which these technologies are likely to create and the overall market development scenario.
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Sub-technologies (sub-system)/components -- are an important market segment and also addresses the cost benefit and investment opportunities in solar power projects.
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Development of a variety of CSP technologies like concentrated solar PV (CPV) ,concentrated solar thermal (CST).
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Parabolic trough collectors, power towers or central receivers, compound linear fresnel reflectors, parabolic dishes (dish-sterling engine system) -- reached commercialization or near it.
CSP Market – Parabolic trough • Parabolic trough technology is currently the most proven CSP technology-developed and standardized. • Currently in operation, are between 14 and 80 MWe in size, and existing plants produce well over 500 MW of electrical capacity. • Central receiver technology is also well proven. Central receiver systems use a field of distributed mirrors i.e. heliostats which individually track the sun and focus the sunlight on the top of a tower. • Such systems can achieve up to 35% peak and 25% annual solar electric efficiency when coupled to a combined cycle power plant. Over 300 MW capacity CST power projects have been announced by various companies in the coming decade.
CSP Market – compact linear Fresnel • Compact linear fresnel reflector system is similar to the parabolic trough collector system - consists of an array of nearly-flat reflectors which concentrate solar radiation onto an elevated inverted linear receiver. • Water flows through the receiver and is converted into steam. • System is line-concentrating, similar to a parabolic trough, with the advantages of low cost for structural support and reflectors, fixed fluid joints, a receiver separated from the reflector system • long focal lengths that allow the use of flat mirrors, technology is seen as a potentially low-cost alternative to trough technology for the production of solar process heat.
CSP Technology: Cost •
The main factors influencing the CSP market in India is the government's commitment, its budgetary support, and more importantly, availability of funds (grant, debt, equity and low cost finance) from international agencies.
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Technology development and technology providers' outlook about Indian market including political and economic stability and bureaucratic hurdles, water, grid, and gas network development in areas of high potential, indigenization of technologies and lowering of costs of equipment and services are other crucial factors.
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Solar PTC-based solar thermal power plant was estimated to cost Rs 2,02,150/kW and power tower-based solar thermal power plant Rs 2,35,877/kW.
CSP: Global Market •
Concentrated solar thermal power (CSP) is an emerging market.
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Spain and the United States together represent 90% of the market.
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CSP technology showed especially strong growth in Spain and the United States since 2006. Installed capacities near 1 gigawatt (GW) and projects under development or construction exceed 15 GW worldwide.
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Investment costs range from USD 4.2 to 8.4 per watt, depending on the solar resource and the size of the storage.
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Energy costs are expected to decrease as more suppliers enter the market and as a result of R&D efforts and learning. In good sites, they could break the threshold of US cents 10 in fewer than ten years.
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The BLUE scenario of the IEA publication, Energy Technology Perspectives 2008, foresees that CSP will provide 5% of world electricity by 2050.
CSP Global Market: Outlook and Barrier •
The building of CSP plant creates 8 to 10 jobs per megawatt of equivalent electrical solar capacity in the construction and manufacturing of components.
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Areas suitable to CSP technologies are found between 15° to 40° parallels– and occasionally at higher latitude.
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The deployment of CSP plants is driven by feed-in tariffs in Spain, and Renewable Energy Portfolio Standards and a grant programme in the United States.
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Low costs of fossil fuels remain an important barrier on grid – even more so in countries where fossil fuels prices are kept below world prices by direct or indirect government subsidies.
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CSP Suitable areas are often semi-arid and water scarcity might be an issue, unless costlier dry cooling is used.
CSP: Global Water poverty
CSP Indian Market: Outlook •
Indian market for CSP technologies under three scenarios - solar mission scenario, optimistic scenario, conservative scenario.
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NSM scenario is the result of the government's policy following the JNNSM.
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Optimistic scenario is based on the efforts of governments and other initiatives to promote the technologies.
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Conservative scenario assumes -- development of CSP technology -- in a sluggish manner.
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Projected market development --- CSP market can reach about 15.2 GW by 2022
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Optimistic scenario where as under conservative scenario only about 5.7GW market is likely to be developed by 2022.
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GOI -- encourage CSP technologies -- depend on implementation of policies, impetus from the private sector.
CSP Indian Market: pitfalls •
Innovation is not just a way of life, it is also a concept that perfectly encapsulates what needs to happen to the CSP technology industry.
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India we need it to work, we need it to be cheap, and we need it to be local and innovative.
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It would be an understatement to suggest -- CSP industry is going through a hard time in India.
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National Solar Mission (NSM) had much promise when it took off.
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Time has exposed obvious flaws with no easy remedy: insufficient accurate DNI data, expensive financing leading to very difficult financial closure.
CSP Indian Market: pitfalls •
Unclear future of government subsidies, difficulty securing land and water, need local manufacturing.
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Tight profit margins, time limitations etc, inability to use gas at all in CSP.
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Developers in India underestimated the difficulty of developing CSP projects. From the first batch of 500MW, most are still at various stages.
CSP Indian Industry - Status •
Small Solar Power Generation Programme (RPSSGP) have been commissioned.
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Developers were to commission 500MW of CSP projects in NSM Ph1, till date only 2 plant are commissioned.
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CSP Today forecasts that besides a couple of singled-out projects, the rest will face delays.
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Time extensions “due to the availability of heat transfer fluids”.
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How long the MNRE anticipates the Phase I plants to finish completion ? The responsibility for implementation has also mostly been moved to the states, and the technological ratio CSP-PV goes down from 50:50 to about 30:70.
CSP Indian Industry - Status •
Above and beyond, the government has also worked in some [separate] hybrid programs to encourage investment in this particular technology.
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In a poll conducted during a recent CSP bidding for Phase II until 2014 was a ‘wise choice – [the industry] needs to learn the lessons from Phase I’.
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CSP experts expressed “in the present cost competitive market affordability are the key drivers and therefore cost cutting in CSP technology is a challenge in India. Low DNI, long gestation, variability in weather conditions.
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Outside the NSM the CSP projects under independent state portfolios are making strides. Gujarat, the first solar state to has a project called Gujarat Solar One in Kutch district of 25MW and 9 hrs of thermal storage by Cargo SOLAR CSP expected to live in the first quarter of 2014.
CSP Plants -- Status
CSP Industry: Recommendations •
DNI data in the country is improving day by day with weather stations by C-WET from the MNRE shedding light over a previously obscure issue.
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Price and technology adjustments can be made by developers to adapt to the real DNI conditions and respond accordingly.
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CSP has also seen over the past months many Indian manufacturers attempt to develop a local supply chain. Companies in the dozens are starting to specialize in tube receivers, frames, curved mirrors and other key components.
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NSM provides a strong cost reduction potential for developers, means a possible strong manufacturing base for key components to be exported, strengthening India´s balance of payments.
CSP Industry: Recommendations •
Above and beyond local manufacturing, Indian market is bringing large scale Fresnel technology into the international spotlight, through the Reliance plants that are using AREVA Solar’s technology for plants of a 125MW scale.
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Hybridization is by far, the biggest opportunity for CSP technologies in India, huge niche of opportunity exists.
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MNRE have clocked onto it. Last year they released a program to target demonstration CSP hybrid plants ranging in size from 20-50 MWs.
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Furthermore, the technology of the plant may specialize in CSP with hybrid cooling to reduce water consumption.
CSP Industry: Recommendations •
What the government needs to be realistic about is the time the projects take and to encourage serious developers that take calculated risks, rather than favoring those that have simply come in unrealistically cheap.
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Improving the financing options and making it cheaper will also help the industry along and secure projects, ensuring that the financial models can be sustainable over time.
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As complicated as the proposition for CSP is for the next few months, the industry will get through it and come out shining. There are plenty of opportunities still for the taking and many lessons have been learnt.
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It is time for all the stakeholders to get their act together and push forward innovation, resourcefulness characterized its millions of entrepreneurs creating some of the most dynamic global companies in the world. And this means that it is time for some Jugaad.
CSP Industry: Recommendations • MNRE should ensure that Phase 2 policies continue to encourage CSP technologies along with other solar technologies. • The government should enforce commissioning timelines for Phase 1 projects to avoid setting a precedent of leniency on delays • MNRE should ensure that Phase 2 guidelines strike a balance between encouraging new players to participate and attracting experienced developers. •
MNRE should assess opportunities for hybrid CSP base load plants with sustainably-produced biomass and other fuels.
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By providing incentives like tariff premiums, MNRE should encourage water-efficient technologies in CSP plants.
CSP Industry : R&D priorities •
Research and development efforts so far, most of them taking place within the IEA Solar PACES Implement
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Agreement, have been supported in particular by Germany, the European Commission and the US Department of Energy.
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Improvements can be expected on all components of CSP plants. One possible step improvement with troughs would be direct steam generation, increasing the overall efficiency.
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Phase-change materials and concrete offer novel options for storage.
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Towers have even greater room for improvements. Many innovative designs are currently proposed, with one or several towers sharing fields of heliostats, a great variety of central receiver designs, heat fluids and storage options.
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Towers with air receivers feeding the gas turbine of a combined cycle power plant could offer record solar-to electricity efficiency of around 35%.
CSP Industry : R&D priorities •
The production of solar fuels such as hydrogen and other energy carriers can take several roads, notably in conjunction with fossil fuels; it still requires significant R&D efforts.
CSP Industry Outlook: Conclusion •
CSP has significant cost reduction potential – immediately and with future innovative developments
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The debt markets will recover and offer improved lending conditions.
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CSP has strong growth potential in many countries – mainly those with high irradiation in the world‘s sun belt.
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As technologies and market participants develop, dynamics towards lower prices will increase in the industry.
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As specific costs decrease, new markets will be opened up.
