Concentrating Solar Power Industry Meeting

FY 2008 Program Planning

DOE Solar Energy Technologies Program Frank (Tex) Wilkins Email: [email protected] Tel: 202-586-1684

September 24, 2007 Long Beach, CA.

Agenda

z

Projects CSP Initiative Budget FY08 Planning DOE’s TEAM Project

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Lab Facilities – Tom Mancini

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Resource Assessment – Mark Mehos

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BLM & Land Availability – Doug Dahle & Bruce Schaffer

z z z z

1-MW Arizona Trough Plant (Acciona) – near Tucson, AZ

64 MWe Solargenix Solar Plant (Acciona) Boulder City, NV

AndaSol-1&2 (Seneer, Solar Millennium) Andalucia, Spain

AndaSol-1&2 50 MW Trough Projects w/Storage

PS10 (Abengoa Solar) Power Tower, Sevilla, Spain

PS10

Plant became operational Fall 2006, and dedicated March 2007. Construction started on PS20.

50 MW Trough Project (Abengoa Solar)

Compact Linear Fresnel Reflector Mann concept under test at PSA in Spain

6-Dish/Stirling Prototypes (SES) – Sandia Lab, Albuquerque prep for 1 MW project in CA

U.S. Projects Under Development CSP Projects in Operation or Planned Since 2005

U.S. projects: enabled by 30% investment tax credit and State renewable portfolio standards State

RPS Requirement

Arizona

15% by 2025

California

20% by 2010

Colorado

20% by 2020

Nevada

20% by 2015, 5% Solar

New Mexico

20% by 2015

Texas

5,880MW (~4.2%) by 2015

Utility/State

Capacity (MW)

Technology -Status

Arizona Public Service (APS)

1

Trough – completed and in operation 2006 (Acciona)

Nevada Power

64

Trough – completed and in operation June 2007 (Acciona)

Southern Cal Edison

500-850

Dish – signed power purchase agreement (SES)

San Diego Gas & Electric

300-900

Dish – signed power purchase agreement (SES)

Pacific Gas & Electric

550

Trough – signed power purchase agreement (Solel)

Pacific Gas & Electric

500

Tower – MOU signed (Bright Source)

SW Utility joint venture (APS)

Est. 250

TBD – multiple expressions of interest submitted

New Mexico Utility Joint Venture (PNM)

50-500

TBD – initial stages

CSP Initiative Making CSP an Intermediate and Baseload Power Solution From this:

To this:

Initiative goals: • intermediate power at 5-7 cents/kWh by 2015 • baseload power at competitive prices by 2020 including systems with 12 hrs storage

Why a CSP Initiative? The solar resource in the southwest is huge and inexhaustable with potentially enough energy to provide clean power for the entire country

State AZ CA CO NV NM TX UT Total

Land Area (mi2) 19,279 6,853 2,124 5,589 15,156 1,162 3,564 53,727

Solar Capacity (MW) 2,467,663 877,204 271,903 715,438 1,939,970 148,729 456,147 6,877,055

Solar Generation Capacity GWh 5,836,517 2,074,763 643,105 1,692,154 4,588,417 351,774 1,078,879 16,265,611

The table represents land that has no primary use today, excludes land with slope greater than 1%, and does not count sensitive lands. It also filters out solar energy resource less than 6.75 kWh/m2/day (blue and green on the map)

Current total generation in the U.S. is 1,000 GW with generation approximately 3,800,000 GWh. Both Arizona and New Mexico have the solar potential to provide that power.

Why a CSP Initiative? Analysis has shown that CSP cost can be significantly reduced 0.18

0.12

Current Technology Cost $.16/kwh (nominal) $.11/kwh (real)

0.16

0.11 0.10 0.09

0.12

0.08 0.07

0.10

0.06 0.08 0.06 Assumes: 0.04 0.02

- 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

2015 Goal $.10/kwh (nominal) $.07/kwh (real)

0.05 0.04 0.03 0.02 0.01

0.00

0.00 0

1000

R e a l L C O E (2 0 0 5 $ / k w h )

N o m in a l L C O E ($ / k w h )

0.14

Cost reductions will result from: • Mass production due to the building of projects • Increasing plant size to 150 to 250 MW • R&D improving performance, reducing weight, better materials and controls

2000

3000

4000

Source: WGA Solar Task Force Summary Report

Cumulative New Capacity by 2015 (MW)

This analysis does not include a 30% investment tax credit, which industry feels is essential for the projects presently being planned.

Why a CSP Initiative? Large CSP operating systems have proven to be reliable over 17 years Solar Energy Generating Systems (SEGS) nine plants providing 354 MW capacity in California

•

Commissioned 1986-1988

•

Performance has increased with time

These trough plants are the largest solar plants in the world and the next generation CSP plants will be significantly larger.

Why a CSP Initiative? Storage enables a utility to put solar power onto the grid when it is needed, not only when the sun is shining Hourly Load

Storage provides decoupling of energy collection from generation higher value because power production can match utility needs lower costs because storage is cheaper than incremental turbine costs

Solar Resource

Generation w/ Storage 0

6

12

18

24

Why a CSP Initiative? Benefits are E3 Case A: Cumulative Capacity Additions from 2015

• Energy - Potential for 34 GW

Other Renew

250

Hydro

GW

200

CSP

150

Nuclear

100

CT/DG

50 0 2015

Combined Cycle Coal 2020

2025

2030

Case A - Cumulative New Generation from 2015 900 800 700 600 500 400 300 200 100 0

Distr PV Other Renew Hydro CSP

20 16 20 17 20 18 20 19 20 20 20 21 20 22 20 23 20 24 20 25 20 26 20 27 20 28 20 29 20 30

Case A: NEMS analysis assuming CSP initiative, 30% ITC extended thru 2016, CSP capacity factor of 72%, carbon value of $5/ton ramping up to $30/ton by 2015, 30 yr financing, and no State RPS

Distrib PV

300

Generation (billion kWh)

(230 billion kWh) of indigenous energy by 2030 • Environment - Carbon-free energy supply (every GW saves 2 million metric tons CO2 per year relative to a natural gas power plant) • Economics - Economic boost to the southwestern states (each 0.5 GW creates 7,000 direct and indirect jobs jobs and results in $2.2B of economic activity)

Year

CSP Initiative Activities (2008-2020) Market Transformation Activities: Support State and utility deployment efforts Work with BLM, State and local governments to mitigate land and permitting barriers Provide resource assessment to industry and utilities Provide analyses supporting CSP access to transmission

R&D Activities: Market

Intermediate Power

Baseload Power

Both Markets (Storage)

FY2008-FY2012

FY2013-FY2016

FY2017-FY2020

Establish/expand U.S. supplier base, optical testing to optimize receiver & concentrator designs, dish engine development, dish technology designed for mass production

Complete next-generation systems: trough capable of: 550°C operation with integrated storage, reliable dish operation. Trough and dish systems meet intermediate goal

Develop advanced collectors, receivers, selective coatings, working fluids, engines to solidify market.

Evaluate new concepts (e.g. CLFR, distributed power tower), test components, system analysis

Down-select best options, support prototype designs, identify key technology improvement opportunities.

Integrate CSP systems with storage and advanced turbine technology, reduce system cost through R&D and manufacturing initiative.

Develop thermocline thermal storage, evaluate new trough storage systems, develop new storage medium and heat transfer fluids

Adapt storage system to advanced technology design, address cost, performance, operation and O&M issues

Complete development of storage concepts for advanced technologies.

CSP Initiative Budget (preliminary)

70

Budget (Million $)

60 50 Market Trans., Facilities 40

Storage

30

Baseload Power Intermediate Power

20 10 0 1

2

3

4

5

6

7

8

9

10 11 12

Year after Implementation

Concentrating Solar Power Budget

40

Budget (Million $)

35 30 25 20 15 10 5 0 FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY08

Senate House

Final appropriation TBD

Concentrating Solar Power Budget

40

Budget (Million $)

35 30 25 20 15 10 5 0 FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY08

Senate House

Final appropriation TBD

Concentrating Solar Power Budget

40

Budget (Million $)

35 30 25 20 15 10 5 0 FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY08

Senate House

Final appropriation TBD

Strategy for CSP Development The increased budget enables a change in Program strategy from support to industry and utilities in developing projects solely for the intermediate power market to include technology appropriate for the baseload power market. New CSP Strategy: • Establish industry partnerships which are critical to the commercialization of CSP technologies • Complete development of trough and dish technologies likely to meet the intermediate power market goal • Develop thermal storage which is key to achieving the baseload power market goal • Evaluate the several industrial concepts that offer the potential for low cost baseload power (e.g. power tower, linear Fresnel reflector) • Develop the concepts deemed to have the best chance of achieving the baseload goal • Upgrade and/or expand facilities at Sandia and NREL as necessary to achieve goals CSP Strategy: lower cost +

storage

baseload

carbon reduction

Industry/utility Market Development Recommendations

Recommendation Extend 30% investment tax credit Loan guarantee (“must be at pace of industry”) BLM pre-approve land for solar, streamline process Address access to transmission Enhance resource assessment and analysis RPS for DOE/labs Showcase small power park Increase public awareness Assist in establishing codes & stds for components

Status Included in House Energy Bill* DOE has implemented program* Working with BLM - a major FY08 CSP activity for a solar programmatic EIS Working with DOE, may begin WGA task Expanded CSP effort in FY08 Being implemented (TEAM)* none Support to WGA, states, utilities May include in FY08 activities

* Not due to Solar Program

Industry/utility R&D Recommendations

Recommendation Reduce risk, increase performance of storage Develop lower cost components Add suppliers Improve reliability Improve optical materials Validate component performance Improve industry/lab collaboration

Subsequent Action Topic of FOA*, continued lab R&D Topic of FOA Topic of FOA Continued lab R&D, FOA Continued lab R&D, FOA NREL and Sandia task to support industry FY08 program will have larger amount of contracts, DOE hire

* FOA – funding opportunity announcement

Implementing Strategy through Industry Partnerships Establishing partnerships/ R&D FY08 Activities :

•

A CSP funding opportunity announcement (FOA) was released by the Golden Field Office during FY2007 using funds provided by the continuing resolution. It requested proposals for the following: (1)

(2)

(3)

• •

Trough component manufacturing R&D; lower the cost of major components of a trough system establish U.S. manufacturing capability in order to achieve the 2015 intermediate power goal Thermal storage R&D; develop low cost, high temperature storage that enables CSP to reach the 2020 baseload goal. Advanced CSP concepts. identify new approaches to components and systems that could dramatically lower the cost of CSP power in order to achieve the baseload goal.

Proposals will be evaluated and contracts initiated in early 2008 Phase 1 of the proposals (concept feasibility) will be completed in 2008 Additional solicitations may be developed in FY08 as needed to get industry and university partnerships.

Preliminary FY 2008 Activities Intermediate Power Mkt Trough Systems R&D (collectors, power cycles, system integration) Dish-engine System R&D (collectors, engine reliability) Baseload Power Mkt (proposal feasibility studies and their evaluation) Thermal Storage (system analysis, component development) Technology Acceptance/Outreach (State, utility coordination, resource assessment) Thermochemical Hydrogen R&D - earmark (includes heliostat R&D) Facilities at Sandia and NREL, Lab Mgm’t (some of this funding will support above activities) Total

$10M

$5M $5M $2M $4M $3M $29M*

* Budget based on the lower of the House and Senate appropriation budget Final determination of activities will not be made until after a budget has been appropriated and the FOA proposals evaluated.

Funding Distribution General philosophy: Approximately 60-65% of CSP funding will be for industry and university contracts. The remaining will be for industry support at Sandia and NREL, with roughly an even split between the labs. FY2008 Possible Distribution: Industry/universities Sandia/NREL Total

$18M 11 $29M*

* Budget based on the lower of the House and Senate appropriation budget Final funding distribution will not be made until after a budget has been appropriated and the FOA proposals evaluated.

DOE Walking the Talk TEAM: Renewable Energy Goals Executable renewable energy agreements by end of FY 2008 for on-site renewable energy to meet and exceed goal of 7.5% (presently