Concentrating Solar Power Delivering on Earth’s Solar Potential Gus Schellekens PwC Sustainability and Climate Change Team
“What if you could provide the world with an endless supply of virtually carbon-free electricity; ensure a constant source of drinkable water to the world's most vulnerable areas; avert some of the world's future humanitarian crises; and save billions of dollars in the process? Concentrating Solar Power (CSP) proponents say there is no "could" about it -- it's more a case of "can."” CNN, 12 November 2007 PricewaterhouseCoopers LLP
Concentrating Solar Power In the News in the past few weeks…
Australia plans to build the world's largest solar power station with an output of 1,000 megawatts in a A$1.4bn project. China launches green power revolution to catch up on west. The plan is to hit 20% renewables target by 2020 with $30bn to be invested in lowcarbon projects. Solar technology to play a key role in this. Germany plans a $555bn Africa solar project. India to invest $22bn in bid to become world solar leader. US: Two solar projects awarded to BrightSource Energy totalling 2.6GW.
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22 June 2009 Slide 2
Concentrating Solar Power What’s driving this?
•
Realisation that our global supply of energy is under pressure like never before… 1. Population growth may result in demand increases of 50% by 2050 2. Stringent GHG emission targets will restrict fossil fuel options 3. Price volatility and security of supply concerns are increasing Populations and the electorate are also beginning to pay more attention to where their energy and electricity comes from – and exerting influence on their governments.
•
Governments are being forced to review and revise their energy policies, infrastructure and sources of energy. Renewable sources will be required to play a larger role in future. We have the opportunity to ensure that Solar esp CSP has a large part.
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22 June 2009 Slide 3
Concentrating Solar Power The opportunity
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Concentrating Solar Power The economic landscape
Attracting investors is difficult… •
Many investors are keen to become / remain involved, but getting them to invest at the moment is difficult.
•
We need to recognise there are different financing interests: - Financing relating to securitisation of receivables under commercial contracts with Governments or large utility companies - Financing directly in infrastructure - Other financing opportunities e.g. supply chain
•
There are also different time frames – short term and longer term arrangements depending on the organisations involved.
•
Market structure and costs of production play a large part in investor interest…
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Concentrating Solar Power The economic landscape
Trough Tower? Other?
Source: World Bank
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Industry standard is a 20% reduction in costs as capacity doubles (manufacturing, technology innovation)
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Concentrating Solar Power The economic landscape
What does it cost? - A 100MW CSP plant with storage will cost approx €400 million - Lifespan of approx 40 years Where does the money go? - 80% on up front capital costs (construction and debt financing) - 20% on annual operating costs (equiv to approx 3€c/kWh) What goes into the construction of a 100MW CSP plant - 4 km2 of land - 25 000 tons of steel - 12 000 tons of glass - 30 000 tons of storage medium - 20 000 m³ of concrete
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Concentrating Solar Power The economic landscape
Our ability to attract CSP investors still depends on a number of factors… • • • • • • • •
How do we address the potential risks to investment? What is the rate of inflation? What is the role of utilities and Governments? How do we structure the finance arrangements? What is the size and composition of the investment opportunity? Managing the interplay with Political, Social, and Technology aspects. How do we avoid a “bubble” scenario in the investment markets? Etc, etc.
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Concentrating Solar Power How do we ensure success?
Opportunity Develop common approaches across countries
Political
Social
• Lack of leadership / will
• Geopolitical concerns
• Legislative /
• Development
commercial arrangements
opportunity • International
• Lobbying
integration
Adaptation
Mitigation Develop principles, standardised tools to support investment
Work closely with local governments
Economic
Technology
• Investment costs
• Which technology?
• Certainty / incentives
• Can it be scaled up to
for investors • Lack of a developed
commercial levels? • Maintenance and
market structure
operating requirements
Raise confidence in the technology Build larger plants (>200MW)
• Timescales
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Risk
22 June 2009 Slide 9
Concentrating Solar Power Developing a Roadmap for success
Initial focus should be on those generic areas required for all large scale renewables, and then specific areas needed to support CSP deployment. CUEN 3rd Annual Energy Conference PricewaterhouseCoopers LLP
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Concentrating Solar Power Developing a Roadmap for success
6.0 – 6.9 5.0 – 5.9 4.0 – 4.9 3.0 – 3.9
0
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Concentrating Solar Power Delivering the Roadmap for success
Now • Coordinating our respective
activities (working as one) and having an “open source” plan that has wider support • Having regard for other areas
e.g. other renewables, enablers needed for success (Super Grid), Social, Technology etc. • Developing the necessary
research, evidence and information to support discussions with business and government
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Future • Developing the necessary tools “to
make this easy” e.g. standardised and pre-approved financing models for CSP projects, policy and regulation recommendations etc. • Engaging at every opportunity with
business, government, NGO’s etc, raising awareness and having a clear message to present at e.g. the UN General Assembly, COP 15 in Copenhagen etc.
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Concentrating Solar Power Delivering on Earth’s Solar Potential
Having a clear integrated Plan / Roadmap for how we should approach the large scale deployment of Solar and CSP will significantly increase the likelihood of its realisation in the coming years around the world. Let’s work together to develop this.
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Thank you. pwc.com/climateready
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