1. business and industrial
2. energy
3. renewable energy
4. solar energy

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AUTHOR
CSP Today Markets Report 2014
Plan your business strategy for CSP investment with in-depth analysis of global CSP market conditions.
Special focus on South Africa, Saudi Arabia, Morocco, USA, India, Chile, China and the UAE.
Disclaimer
Authors
The information and opinions in this report were prepared by CSP Today (FC Business
Jennifer Muirhead
Intelligence Ltd) and its partners. FC Business Intelligence Ltd has no obligation to tell you
Research Manager and Editor
when opinions or information in this report change. CSP Today (FC Business Intelligence
Alan Brent
Ltd) makes every effort to use reliable, comprehensive information, but we make no
Professor and Associate Director
of the Centre for Renewable
and Sustainable Energy Studies
(CRSES), Stellenbosch University
representation that it is accurate or complete. In no event shall CSP Today (FC Business
Intelligence Ltd) and its partners be liable for any damages, losses, expenses, loss of data,
loss of opportunity, or profit caused by the use of the material or contents of this report.
No part of this document may be distributed, resold, copied or adapted without
CSP Today’s prior written permission.
FC Business Intelligence Ltd ® 2013
Cayetano Hernández
China Country Manager of Sun to
Market Solutions
Heba Hashem
Freelance Journalist
Marco Poliafico
MEng GradEI
Energy Consultant and Analyst
Groupe Reaction Inc
Groupe Réaction
Independent Engineering and
Renewable Energy Consultancy
www.csptoday.com
CSP Today Markets Report 2014
| 2
About csp today
About CSP Today
CSP Today is the reference point for CSP professionals and a cornerstone for communications within
the industry. We have been a leading provider in this global market for the past 6 years. We provide
the industry with focused news, events, online up-to-the minute data, analysis, reports, updates and
information for the Concentrated Solar Thermal Power industry. CSP Today’s mission is to be the hub
of the CSP community enabling dialogue throughout the industry ad driving CSP forwards and to
provide its clients with the most accurate and timely project and plant intelligence, based on the
highest quality research.
CSP Today experts are on the phone everyday collecting and verifying global industry data and
information direct from EPCs, developers, suppliers, utilities and government bodies for you to have
at your fingertips.
www.csptoday.com
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WELCOME
Welcome
The global CSP industry has experienced a significant shift over the past few years.
Despite the setbacks of the latest legislative developments in Spain, more and more markets are
emerging on a global level providing new opportunities for CSP market growth and development.
CSP stakeholders are now redefining their business strategies to identify new areas of investment.
The CSP Today Markets Report 2014 aims to provide you with the information you need to make a
qualified assessment of both established (USA) and emerging (South Africa, Saudi Arabia, Morocco,
India, Chile, China and the UAE) market opportunities.
By drawing on local expertise and experience in the eight major markets, CSP Today provides
unique insight into each market both in the immediate term and in the long-term outlook.
The Markets Digest at the end of this report provides a succinct overview of nineteen markets that
are not as prevalent as the eight major markets, but still worth keeping tabs on for existing and
increasing CSP activity.
I hope you find the insight provided by this report helpful.
Do not hesitate to get in touch if you have any questions.
With very best wishes,
Jennifer Muirhead
Research Manager and Editor | CSP Today
www.csptoday.com | +44 (0) 207 3757 166 | http://uk.linkedin.com/in/jmuirhead
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THOUGHT LEADERSHIP
Thought leadership –
CSP Today’s Business Intelligence Portfolio:
CSP Today Global Tracker
Access current CSP market, policy, and project and supplier data at your
fingertips.
CSP plants at every single stage across the globe – Announced, planning,
development, construction, commissioned and in operation
In-depth CSP plant data – Access all the plants’ details including technology
choice, technical specification, stakeholders, suppliers, incentives and finance
Country-by-country policy - Understand each CSP market with data on market
size, policies and incentives, energy market structure and up-to-date information on EPCs and developers operating in the market
Global CSP supplier list – The most comprehensive component supplier list serving every part of a CSP plant from
heliostats to pumps and valves
CSP Today Quarterly Update
The CSP Today Quarterly Update serves as a companion to the Global Tracker, highlighting major
trends in the industry and collating information making it easily available for you to read at a glance.
The Quarterly Update provides detailed analysis of the biggest developments in the global
CSP market on a quarterly basis, providing readers with country-by-country breakdowns of key
government players, game changing events and changes to project pipelines.
CSP Today Technology Reports:
Parabolic Trough Report 2014: Cost, Performance and Thermal Storage and Tower Report 2014:
Cost, Performance and Thermal Storage
Critical Market Specific Cost Data: Receive the most up-to-date, industry validated cost data breakdowns from CAPEX to OPEX in defined optimal Parabolic Trough and Tower plants across 8 markets
(Chile, India, Morocco, Saudi Arabia, South Africa, UAE, Spain and US).
Realistic LCOE Models: Determine the LCOE of Parabolic Trough and Tower technology by market,
benchmark emerging CSP markets against the traditional key markets and identify the longitudinal
trend with market specific LCOE forecasts.
Energy Yield and Performance Output Data & Analysis: Identify and benchmark the market specific
energy yield and performance characteristics, including solar field thermal output, online parasitics,
net energy, total operating hours, solar-to-electricity efficiency and water consumption.
The Evolution of Thermal Storage (TES): Use the global project pipelines to understand how and to
what extent TES is being increasingly incorporated into Parabolic Trough and Tower plants, and gain
insight into the latest R&D initatives in TES tipped to reduce cost and optimize performance.
Market Share: Strategize your investment in and gauge your profit from Parabolic Trough or Tower the most widely deployed CSP technology - by understanding the long-term market share, growth
and viability of this technology, including market-by-market pipelines and key comparisons with
other CSP technologies.
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ACKNOWLEDGEMENTS
Acknowledgements
CSP Today would like to provide their thanks to the following people who have shared their expertise and insight
to make this Markets Report a success. It should be noted that many others have contributed to the quality of this
report, but due to confidentiality cannot be listed below.
Arnold Leitner | President, Arnold Leitner & Partners LLC (ALNP)
Geetanjali Patil Choori | CEO, Energy Guru®
Gianleo Frisari | Analyst, Climate Policy Initiative
Gopal Somani | CSP expert and former Technical Director of RRECL
Manoj Divakaran | Managing Director - Empereal-KGDS Renewable Energy Pvt. Ltd
Marc Norman | Project Finance Lawyer, Chadbourne & Parke | Director of Marketing & Communications, Middle
East Solar Industry Association
Rodrigo Escobar | Profesor Asociado Escuela de Ingeniería, Pontificia Universidad Católica de Chile
Philip Moss | Managing Partner, Mana Ventures
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CONTENTS
Contents
About CSP Today
3
Welcome4
Thought Leadership CSP Today’s Business Intelligence Portfolio
5
Acknowledgements6
Table of Contents
7
List of Figures and Tables
14
Status Definitions
20
Methodology21
Executive Summary
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1: Current status of the CSP Industry
By Heba Hashem
Introduction
Chapter Summary 1.1. CSP Industry in Review
1.1.1. The Collapse of the Spanish CSP Market
1.1.2. First Large-Scale Projects Come On-Line: USA and UAE
1.1.3. Saudi Arabia Launches White Paper
1.1.4. Chilean Government Releases Details for CSP Tender Process
1.1.5. Delays in South African and Indian Bidding Rounds
1.1.6. Morocco Launches RFQ for Phase Two of Ouarzazate
1.1.7. Kuwait Makes its Presence Felt
1.1.8. China CSP Progress and FiT
1.2. CSP Industry Outlook
References
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Chapter 2: CSP Forecast and Markets Scorecard
By Groupe Reaction
Chapter Summary
2.1. Market Scorecard
2.2. CSP Today Global Markets Forecast
2.3. Survey Results
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Chapter 3: South Africa
By Alan Brent
Chapter Summary
Country Overview
3.1. Electricity Market
3.1.1. Electricity Consumption
3.1.2. Electricity Demand
3.1.3. Grid Transmission
3.1.4. Market Structure Diagram
3.2. CSP Market
3.2.1. CSP-Specific Policy
3.2.2. CSP Project Profiles
3.2.3. Local Content Requirements
3.3. Local CSP Ecosystem
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CONTENTS
3.3.1. Key Government Agencies
3.3.2. Permitting Agencies
3.3.3. Local Consultants and R&D bodies
3.3.4. Financing Organizations
3.3.5. Developers and EPC Firms
3.4. Local Component Supply
3.4.1. Pipes
3.4.2. Pumps
3.4.3. Tracking Devices
3.4.4. Receivers
3.4.5. Power Blocks
3.4.6. Heat Exchangers
3.4.7. Raw Material Availability
3.4.7.1. Glass
3.4.7.2. Steel
3.4.7.3. Molten Salt
3.5. Alternative CSP Markets
3.6. Markets Forecast
Conclusion
References
Acronyms
Chapter 4: Kingdom of Saudi Arabia
By Marco Poliafico
Chapter Summary
Country Overview
4.1. Electricity Market
4.1.1. Electricity Consumption
4.1.2. Grid Transmission
4.1.3. Electricity Demand
4.1.4. Market Structure Diagram
4.2. CSP Market
4.2.1. Local Content Requirements
4.2.2. Solar Resource Forecasting
4.2.3. CSP Project Profiles and Time Frames
4.3.1. Local CSP Ecosystem
4.3.1. Key Government Agencies
4.3.2. Independent Water and Power Producers (IWPP)
4.3.3. Permitting Agencies
4.3.4. Local Consultants and R&D bodies
4.3.5. Financing Organizations
4.3.6. Utilities and Transmission Grid Operators
4.3.7. Developers and EPC and Engineering Companies
4.4.1. Supply of Local Components
4.4.2. Raw Material Availability
4.5. Alternative CSP Markets
4.5.1. Desalination
4.5.2. Enhanced Oil Recovery
4.6. Market Forecast
Conclusion
References
Acronyms
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CONTENTS
Chapter 5: Morocco
By Marco Poliafico, Peer reviewed by Gianleo Frisari
Chapter Summary
Country Overview
5.1. Electricity Market
5.1.1. Electricity Consumption
5.1.2. Electricity Demand
5.1.3. Grid Transmission
5.1.4. Market Structure Diagram
5.2. CSP Market
5.2.1. CSP-Specific Policy
5.2.2. CSP Project Profiles
5.2.3. Noor CSP: Next Program
5.2.4. Future Developments
5.2.5. Local Content Requirements
5.3. Local CSP Ecosystem
5.3.1. Key Government Agencies
5.3.2. Utilities and Independent Power Producers
5.3.3. Permitting Agencies and Feasibility Study Providers
5.3.4. Local Consultants and R&D Bodies
5.3.5. Financing Organizations
5.3.6. Developers and EPC Firms
5.4.1. Local Component Supply
5.4.2. Raw Material Availability
5.5. Alternative CSP Markets
5.6. Market Forecast
Conclusion
References
Acronyms
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Chapter 6: U.S.A.
By Marco Poliafico, Peer Reviewed Arnold Leitner
Chapter Summary
Country Overview
6.1. Electricity Market
6.1.1. Federal and State Regulators
6.1.2. Buying and Selling Electricity
6.1.3. Electricity Consumption
6.1.4. Grid Transmission
6.1.5. Electricity Demand and Consumption
6.1.6. Market Structure Diagram
6.2. CSP Market
6.2.1. Loan Guarantees
6.2.2. Federal Policy Incentives
6.2.3. State-level Incentives
6.2.4. Renewable Portfolio Standards
6.2.5. Solar Energy Zones
6.2.6. Research and Development
6.2.7. Local Content Requirements
6.2.8. CSP Project Profiles
6.2.9. Challenges Facing the Development of CSP in the USA
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CONTENTS
6.2.9.1. Shale Gas
6.2.9.2. High Cost
6.2.9.3. Need for Policy Review
6.3. Local CSP Ecosystem
6.3.1. Key Government Agencies
6.3.2. Utilities and Independent Power Producers
6.3.3. Permitting Agencies
6.3.4. Local Consultants and R&D Bodies
6.3.5. Financing Organizations
6.3.6. Developers and EPC Firms
6.4.1. Local Component Supply
6.4.2. Raw Material Availability
6.5. Alternative CSP Markets
6.5.1. Hybridization
6.5.2. Enhanced Oil Recovery
6.6. Market Forecast
Conclusion
References
Acronyms
Chapter 7: India
By Marco Poliafico, Peer reviewed by Geetanjali Patil Choori
Chapter Summary
Country Overview
7.1. Electricity Market
7.1.1. Electricity Consumption
7.1.2. Electricity Demand
7.1.3. Grid Transmission
7.1.4. Market Structure Diagram
7.2. CSP Market
7.2.1. The Jawaharlal Nehru National Solar Mission
7.2.2. Delays and Extensions
7.2.3. Hybrid Program
7.2.4. Renewable Purchase Obligations and Renewable Energy Certificates
7.2.5. Current CSP Projects
7.2.6. Local Content Requirements
7.3. Local CSP Ecosystem
7.3.1. Indian CSP ecosystem
7.3.2. Manufacturing Capability and Local Supplies
7.3.3. Steep Learning Curve
7.3.4. Key Government Agencies
7.3.5. Independent Water and Power Producers and Utilities
7.3.6. Permitting Agencies and Feasibility Study Providers
7.3.7. Local Consultants and R&D Bodies
7.3.8. Financing Organizations
7.3.9. Developers and EPC firms
7.4.1. Supply of Local Components
7.4.2. Raw Material Availability
7.5. Alternative CSP Markets
7.5.1. Process Steam Applications of Concentrating Solar Thermal
7.5.2. UNDP- GEF project
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CONTENTS
7.5.3. Biomass Solar Thermal Hybrid Projects
7.5.4. Desalination
7.6. Market Forecast
Conclusion
References
Acronyms
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Chapter 8: Chile
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By Marco Poliafico
Chapter Summary
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Country Overview
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8.1. Electricity Market
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8.1.1. Electricity Consumption
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8.1.2. Electricity Demand
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8.1.3. Grid Transmission
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8.1.4. Market Structure Diagram
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8.2. CSP Market
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8.2.1. National Energy Strategy: 2012-2030
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8.2.2. CSP Suitability: Highest DNI in the World
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8.2.3. Energy Demand Profile
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8.2.4. First CSP Tender
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8.2.5. Local Content Requirements
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8.2.6. CSP Project Profiles243
8.3. Local CSP Ecosystem
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8.3.1. Key Government Agencies
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8.3.2. Utilities and Independent Power Producers
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8.3.3. Permitting Agencies and Feasibility Study Providers
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8.3.4. Local Consultants and R&D Bodies
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8.3.5. Financing Organizations
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8.3.6. Developers and EPC Firms
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8.4. Local Component Supply
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8.5. Alternative CSP Markets
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8.5.1. Case Study: Minera El Tesoro, Chile
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8.6. Market Forecast
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Conclusion
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References
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Acronyms
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Chapter 9: China
By Cayetano Hernandez
Chapter Summary
Country Overview
9.1. Electricity Market
9.1.1. Electricity Consumption
9.1.2. Electricity Demand
9.1.3. Grid Transmission
9.1.4. Market Structure Diagram
9.2. CSP Market
9.2.1. CSP-Specific Policy
9.2.2. CSP Project Profiles
9.2.3. Local Content Requirements
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CONTENTS
9.2.3.1. Investing
9.2.3.2. Equipment
9.3. Local CSP Ecosystem
9.3.1. Key Government Agencies
9.3.2. Permitting Agencies
9.3.3. Financing Organizations
9.3.4. Transmission Grid Operators
9.3.5. Developers, EPC Firms and Utilities
9.4. Local Component Supply
9.4.1. Steam Generators
9.4.2. Turbines
9.4.3. Pumps
9.4.4. Valves
9.4.5. Receiver Tubes
9.4.6. Heat Transfer Fluid (HTF)
9.4.7. Collector Frames
9.4.8. Raw Material Availability
9.4.8.1. Steel
9.4.8.2. Glass
9.4.8.3. Concrete
9.4.8.4. Molten Salt
9.5. Alternative CSP Markets
9.5.1. Coal - ISCC
9.5.2. Desalination
9.5.3. Enhanced Oil Recovery
9.6. Market Forecast
Conclusion
References
Acronyms
Chapter 10: United Arab Emirates
By Marco Poliafico
Chapter Summary
Country Overview
10.1. Electricity Market
10.1.1. Electricity Consumption and Demand
10.1.2. Grid Transmission
10.1.3. Market Structure Diagram
10.2. CSP Market
10.2.1. Masdar
10.2.2. CSP Project Profiles
10.2.3. Local Content Requirements
10.3. Local CSP Ecosystem
10.3.1. Key Government Agencies
10.3.2. Independent Water and Power Producers
10.3.3. Local Utilities and Transmission Grid Operators
10.3.4. Permitting Agencies
10.3.5. Local Consultants and R&D Bodies
10.3.6. Financial Organizations
10.3.7. Developers, EPCs and Engineering companies
10.4.1. Supply of Local Components
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CONTENTS
10.4.2. Raw Material Availability
10.5. Alternative CSP Markets
10.5.1. Desalination
10.5.2. Enhanced Oil Recovery
10.6. Market Forecast
Conclusion
References
Acronyms
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Chapter 11: Rest of the World - CSP Today Markets Digest (19 Countries)
Contents
List of Tables
11.1 Algeria
11.2 Australia
11.3 Brazil
11.4 Egypt
11.5 Greece
11.6 Israel
11.7 Italy
11.8 Jordan
11.9 Kenya
11.10 Kuwait
11.12 Mexico
11.13 Namibia
11.14 Oman
11.15 Portugal
11.16 Qatar
11.17 Spain
11.18 Thailand
11.19 Tunisia
11.20 Turkey
Acronyms
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Appendix A: Markets Scorecard Methodology
Appendix B: Forecast Methodology
Appendix C: Alternative Applications for CSP
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Figures & tables
List of Tables and Figures
Chapter 1: Current status of the CSP Industry
List of Figures
Figure 1(1): Spain CSP Market Growth 2013
Figure 2(1): USA CSP Market Growth 2013
Figure 3(1): UAE CSP Market Growth 2013
Figure 4(1): Chile CSP Market Growth 2013
Figure 5(1): South Africa CSP Market Growth 2013
Figure 6(1): India CSP Market Growth 2013
Figure 7(1): Morocco CSP Market Growth 2013
Figure 8(1): Kuwait CSP Market Growth 2013
Figure 9(1): China CSP Market Growth 2013
Figure 10(1): Parabolic Trough Technology - Project Pipelines 2013 (excludes projects in operation)
Figure 11(1): Fresnel Technology - Project Pipelines 2013 (excludes projects in operation)
Figure 12(1): Dish Technology - Project Pipelines 2013 (excludes projects in operation)
Figure 13(1): Tower Technology - Project Pipelines 2013 (excludes projects in operation)
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List of Tables
Table 1(1): Spain’s Popular Party Government - Major Legislative Changes Affecting CSP (2012-2013)
Table 2(1): UAE’s First CSP Project
Table 3(1): Large-scale CSP Projects Underway in the USA
Table 4(1): Chile’s Tender Process
Table 5(1): Moroccan Solar Plan: Key Dates
Table 6(1): Shagaya Project Phase One - Key Specifications
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Chapter 2: CSP Markets Scorecard and Forecast
List of Figures
Figure 1(2): CSP Market Capacity Forecast Until 2024
Figure 2(2): LCOE Forecast Until 2024
Figure 3(2): Optimistic Country-Wise Global CSP Capacity Until 2024 (MW)
Figure 4(2): Conservative Country-Wise Global CSP Capacity Until 2024 (MW)
Figure 5(2): Pessimistic Country-Wise Global CSP Capacity Until 2024 (MW)
Figure 6(2): Cumulative CSP Plant Capacity by 2018
Figure 7(2): Cumulative CSP Plant Capacity by 2023
Figure 8(2): Most promising CSP markets Until 2018
Figure 9(2): Most promising CSP markets Until 2023
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List of Tables
Table 1(2): CSP Market Scorecard as of 2013
Table 2(2): Market Forecast Summary
Table 3(2): CSP Market Forecast Comparison 2012-2013
Table 4(2): Limiting and Enabling Factors for CSP Market Growth
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Chapter 3: South Africa
List of Figures
Figure 1(3): Direct Normal Irradiation in South Africa, Lesotho and Swaziland
Figure 2(3): Transmission Development Plan 2011 – 2020
Figure 3(3): Demand Forecast Comparisons
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Figures & tables
Figure 4(3): Linkages Between Various Plans to Address the Integration
of Distributed Electricity Generation from IPPs
Figure 5(3): Maximum Allocations in Round 3 of the REIPPPP
Figure 6(3): First Stage Qualification Criteria for Selection in the Second Stage
Figure 7(3): Barriers to Entry of CSP in the South African Market
Figure 8(3): Short-term Priority Actions to Address CSP Challenges
Figure 9(3): Illustration of the Current and Projected Market Structures
Figure 10(3): Typical Project Structure in the South African Context
Figure 11(3): Consumption Mix in South Africa (Energy)
Figure 12(3): Consumption Mix in South Africa (Electricity)
Figure 13(3): Consumption Mix in Industrial Sector (Energy)
Figure 14(3): Consumption Mix in Industrial Sector (Electricity)
Figure 15(3): Displacement of Fossil Fuel (left) and Solar Boosting (right)
Figure 16(3): Installed CSP Capacity in South Africa Until 2024 (MW)
Figure 17(3): CSP Cumulative Energy Production in South Africa Until 2024 (TWh)
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List of Tables
Table 1(3): Drivers and Barriers
Table 2(3): CSP Projects in South Africa
Table 3(3): Key Government Agencies in South Africa
Table 4(3): Permitting Agencies in South Africa
Table 5(3): Local Consultants and R&D Bodies
Table 6(3): Financing Organizations Operating in South Africa
Table 7(3): Developers and EPCs With Interests in the South African Market
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Chapter 4: Kingdom of Saudi Arabia
List of Figures
Figure 1(4): Direct Normal Irradiation in Saudi Arabia
Figure 2(4): The GCC Grid Interconnection Project
Figure 3(4): Electricity Demand in Saudi Arabia by Sector
Figure 4(4): Saudi Arabia’s Oil Balance on a Business-as-Usual Trajectory
Figure 5(4): Current Indications for CSP and PV Allocations in Saudi Arabia
Figure 6(4): Installed CSP Capacity in Saudi Arabia Until 2024 (MW)
Figure 7(4): CSP Cumulative Energy Production in Saudi Arabia Until 2024 (TWh)
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List of Tables
Table 1(4): Drivers and Barriers
Table 2(4): Competitive Procurement Process Requirements
Table 3(4): Local Content Requirements Outlined for the Introductory Round of the CPP
Table 4(4): Ministries and Government Agencies in Saudi Arabia
Table 5(4): Utility Companies in Saudi Arabia
Table 6(4): Permitting and Environmental Assessment Agencies Operative in Saudi Arabia
Table 7(4): Consultants and R&D Bodies Operative in Saudi Arabia
Table 8(4): Main Funding Institutions and Banks Operative in Saudi Arabia
Table 9(4): Utility Companies in Saudi Arabia
Table 10(4): Developers, EPCs and Engineering Companies Operating in Saudi Arabia
Table 11(4): Locally Available CSP Components Available Locally in Saudi Arabia
Table 12(4): CSP Raw Material Suppliers in Saudi Arabia
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Figures & tables
Chapter 5: Morocco
List of Figures
Figure 1(5): Direct Normal Irradiation in Morocco
Figure 2(5): Key Stakeholders in the Noor I CSP Project
Figure 3(5): Installed CSP Capacity in Morocco Until 2024 (MW)
Figure 4(5): CSP Cumulative Energy Production in Morocco until 2024 (TWh)
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List of Tables
Table 1(5): CSP Drivers and Barriers in Morocco
Table 2(5): Morocco CSP Projects
Table 3(5): Ministries and Government Agencies in Morocco
Table 4(5): Major Utilities and Independent Water and Power Producers in Morocco
Table 5(5): Permitting Agencies and Environmental Assessment Agencies in Morocco
Table 6(5): Consultants and R&D Bodies in Morocco
Table 7(5): Main Funding Institutions and Banks in Morocco
Table 8(5): Developers and EPC Firms in Morocco
Table 9(5): CSP Components and Suppliers Available Locally in Morocco
Table 10(5): Raw material available locally in Morocco and suppliers
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Chapter 6: U.S.A.
List of Figures
Figure 1(6): Direct Normal Irradiation in the United States
Figure 2(6): California Summer Daily Demand Curve
Figure 3(6): Parabolic Trough and Tower CSP Pipelines in the United States
Figure 4(6): BrightSource Coalinga CSP Plant For EOR
Figure 5(6): Installed CSP capacity in the USA until 2024 (MW)
Figure 6(6): CSP Cumulative Energy Production in the USA until 2024 (TWh)
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List of Tables
Table 1(6): Drivers and Barriers in the United States
Table 2(6): Overview of the Power Markets in the United States
Table 3(6): Main Fiscal Incentives Available in the U.S. for CSP Technology
Table 4(6): List of CSP Projects in the USA (those highlighted in yellow have secured a PPA)
Table 5(6): Key Government Agencies in the United States
Table 6(6): Utilities and IPPs Operative in the United States
Table 7(6): Permitting and Environmental Assessment Agencies in the United States
Table 8(6): Consultants and R&D bodies in the United States
Table 9(6): Main Funding Institutions and Banks Operative in the United States
Table 10(6): Developers and EPC Firms Operative in the United States
Table 11(6): Components and Suppliers Available in the United States
Table 12(6): Raw Material Suppliers in the USA
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Chapter 7: India
List of Figures
Figure 1(7): Direct Normal Irradiation in India
Figure 2(7): Installed CSP Capacity in India Until 2024 (MW)
Figure 3(7): CSP Cumulative Energy Production in India until 2024 (TWh)
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List of Tables
Table 1(7): Drivers and Barriers in India
Table 2(7): Growth of Renewable Energy Share in India’s Electricity Mix
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Figures & tables
Table 3(7): Selection Criteria for the Tender Process of CSP projects in India
Table 4(7): India NSM – Achievements and Lessons Learnt from JNNSM Phase 1
Table 5(7): CSP Hybrid Pilot Program - Project Configuration
Table 6(7): India Solar Program Tariffs
Table 7(7): India Solar Thermal Cost – Benchmark
Table 8(7): India Solar Thermal Tariffs – Benchmark
Table 9(7): Current CSP Projects in India
Table 10(7): Indian CSP Ecosystem
Table 11(7): Ministries and Government Agencies in India
Table 12(7): Independent Water and Power Producers and Utilities in India
Table 13(7): Permitting Agencies and Environmental Assessment Agencies in India
Table 14(7): Consultants and R&D Bodies in India
Table 15(7): Main Funding Institutions and Banks Operative in India
Table 16(7): Developers and EPC Firms Operative in India
Table 17(7): Components Available Locally in India
Table 18(7): Raw Material Availability and Suppliers
Table 19(7): The World’s First Linear Fresnel Desalination Plant
Table 20(7): LFR Desalination Plant Specifications
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Chapter 8: Chile
List of Figures
Figure 1(8): Direct Normal Irradiation in Chile
Figure 2(8): Load Profile of the SIC System on 10 June 2013
Figure 3(8): Installed CSP Capacity in Chile Until 2024 (MW)
Figure 4(8): Cumulative CSP Energy Production in Chile to 2024 (TWh)
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List of Tables
Table 1(8): Chile CSP Development: Drivers and Barriers
Table 2(8): Transmission Power Systems of Chile
Table 3(8): Criteria of the Tender Process for CSP Plants in Chile (February 2013)
Table 4(8): CSP Projects in Chile
Table 5(8): Ministries and Government Agencies in Chile
Table 6(8): Utilities and Independent Power Producers in Chile
Table 7(8): Permitting Agencies and Environmental Assessment Agencies Operative in Chile
Table 8(8): Consultants and R&D Bodies Operative in Chile
Table 9(8): Main Funding Institutions and Banks Operative in Chile
Table 10(8): Developers, EPCs and Engineering Companies Operative in Chile
Table 11(8): Techno-Economic Data of Mineral El Tesoro CSP Plant
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Chapter 9: China
List of Figures
Figure 1(9): Direct Normal Irradiation in China (DNI Map)
Figure 2(9): Electricity Production in China by Source of Generation
Figure 3(9): Installed Capacity Distribution in China
Figure 4(9): China’s Current Power Network
Figure 5(9): Map of Wind Feed-In-Tariff
Figure 6(9): Flow Diagram of Approval Stages in China
Figure 7(9): Power Grid Companies in China
Figure 8(9): Non-metallic Mineral Resources in China
Figure 9(9): Map of Coal Resources in China
Figure 10(9): DNI Resources in China
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Figures & tables
Figure 11(9): Desalination Capacity in Coastal Cities (m3/day) in China (2010)
Figure 12(9): China’s Oil Production and Consumption 1990-2013
Figure 13(9): Location of China’s Major Oil Fields
Figure 14(9): Locations of Known CSP Projects in China
Figure 15(9): Installed CSP Capacity in China Until 2024 (MW)
Figure 16(9): Cumulative Energy Production in China Until 2024 (TWh)
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List of Tables
Table 1(9): Drivers and Barriers
Table 2(9): Erdos Solar Plant Parameters (First CSP FiT)
Table 3(9): List of CSP Projects in China
Table 4(9): Foreign Investment Categories
Table 5(9): Key Government Agencies in China
Table 6(9): Permitting Agencies in China
Table 7(9): Financing Organizations in China
Table 8(9): Renewable Energy Projects Co-financed by Development Banks
Table 9(9): Transmission Grid Operators in China
Table 10(9): Electric utilities in China
Table 11(9): Main Steam Generator Manufacturers in China
Table 12(9): Turbine Manufacturers in China
Table 13(9): Pump Manufacturers in China
Table 14(9): Valve Manufacturers in China by Industry
Table 15(9): Receiver Manufacturers in China
Table 16(9): Heat Transfer Fluid Providers in China
Table 17(9): Collector Frame Manufacturers in China
Table 18(9): China Steel Exports and Imports (2012)
Table 19(9): Main Steel Companies in China by Production (2012)
Table 20(9): Top 10 Chinese Glass Manufacturers (2012-2013)
Table 21(9): CSP Mirror Manufacturers in China
Table 22(9): Concrete Producers in China by Production
Table 23(9): Molten Salt Producers in China
Table 24(9): China’s Oil Production, Consumption, and Import (2011)
Table 25(9): EOR Projects Implemented in China
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Chapter 10: United Arab Emirates
List of Figures
Figure 1(10): Direct Normal Irradiation in the UAE
Figure 2(10): Masdar’s Integrated Business Units
Figure 3(10): Location of North East Bab Field, UAE
Figure 4(10): DNI Conditions in the UAE
Figure 5(10): Installed CSP Capacity in the UAE 2006-2024 (MW)
Figure 6(10): CSP Cumulative Energy Production in UAE Until 2024 (TWh)
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List of Tables
Table 1(10): Drivers and Barriers
Table 2(10): UAE CSP Project Portfolio, 2013
Table 3(10): Shams 1 Project Overview
Table 4(10): Shams 1 Project Details
Table 5(10): Ministries and Government Agencies in the UAE
Table 6(10): Independent Water and Power Producers in the UAE
Table 7(10): Utility Companies in the UAE
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Figures & tables
Table 8(10): Permitting Agencies and Environmental Assessment Agencies in the UAE
Table 9(10): Consultants and R&D Bodies Operative in the UAE
Table 10(10): Main Financing Institutions and Banks in the UAE
Table 11(10): Developers, EPCs and Engineering Companies Operative in the UAE
Table 12(10): CSP Components Available Locally in the UAE
Table 13(10): CSP Raw Material Suppliers Available in the UAE
Chapter 11: Rest of the World - CSP Today Markets Digest (19 Countries)
List of Tables
Table 1(11):Current CSP Projects in Algeria
Table 2(11): Current CSP Projects in Australia
Table 3(11): Current CSP Projects in Brazil
Table 4(11): Current CSP Projects in Egypt
Table 5(11): Current CSP Projects in Greece
Table 6(11): Current CSP Projects in Israel
Table 7(11): Current CSP Projects in Italy
Table 8(11): Current CSP Projects in Jordan Table 9(11): Current CSP Projects in Kenya
Table 10(11): Current CSP Projects in Kuwait
Table 11(11): Current CSP Projects in Mexico
Table 12(11): Current CSP Projects in Oman
Table 13(11): Current CSP Projects in Portugal
Table 14(11): Current CSP Projects in Qatar
Table 15(11): Current CSP Projects in Spain
Table 16(11): Current CSP Projects in Thailand
Table 17(11): Current CSP Projects in Tunisia
Table 18(11): Current CSP Projects in Turkey
Appendix A: Markets Scorecard Methodology
List of Figures
Figure 1(A): CSP Market Indicators and Influential Factors
List of Tables
Table 1(A): Survey Based Indicator Weights
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Appendix B: Forecast Methodology
List of Figures
Figure 1(B): Forecast Influential Parameters
Figure 2(B): Technology Diffusion Lifecycle
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List of Tables
Table 1(B): Influencing Factors and Weights for CSP Development
Table 2(B): High Impact Decision Points
Table 3(B): Factor Ranking System
Table 4(B): Optimistic Deployment of Plant in Construction and Development
Table 5(B): Conservative Deployment of Plant in Construction and Development
Table 6(B): Pessimistic Deployment of Plant in Construction and Development
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Appendix C: Alternative Applications for CSP
List of Figures
Figure 1(C): Technical Concepts for Integrating CSP into Desalination Plants
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List of Tables
Table 1 (C): Desalination Technologies
Table 2 (C): Key Parameters of Desalination Technologies
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Status Definitions
Status Definitions
Announced:
A project is announced when it has appeared in the press but there is no other evidence of progress made towards
the construction and operation of the project.
Construction:
Once a project has obtained a Notice to Proceed, it could be considered as “Under Construction”. In essence,
any construction activity would indicate the project is being built. Some indicators of early activity include: land
grading, hiring construction or specialized contractors and building access roads. Anything beyond this point would
definitely show the project is being built.
The final stages of construction include building the connection to the grid, installation of electric tracing and
inclusion of molten salts.
Planning:
A project is under planning when feasibility or pre-feasibility studies are being carried out. This includes land siting
studies, Solar Resource Assessment and pre-feasibility.
Commissioning:
Once a plant is built there is a period of time reserved for testing and calibrating equipment. This is known as
commissioning.
Development:
This means that there is evidence that the developer is actively trying to find the capital, permits and contractors to
build the project. A project is under development when it has one or more of the following: environmental impact
permit, land having been purchased, water permit, an EPC on-board, financing obtained or procurement having
started.
Operation:
This indicates when the project has started feeding electricity into the grid or is providing thermal energy.
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Methodology
Methodology
CSP Today’s Markets Report 2014 responds to the
most critical needs of the CSP industry, representing
six months of research (primary and secondary) and
culminating in 385 pages of high-quality data and
analysis, including 90 figures and 150 tables.
Identifying Industry Needs:
Based on 25+ research calls with industry executives
and survey responses from 300 + CSP players, CSP
Today uncovered:
Methodological Approach:
Project pipelines: Making use of the CSP Today Global
Tracker, all project data is is industry validated and
taken from August 2013, providing detailed information
of projects announced, planned, in development,
construction and operation.
Local CSP ecosystem: Building upon the knowledge
of local authors and peer reviewers, each market has
either been written or reviewed by on-the-ground
players active in the local CSP market.
The markets most attractive to developers, EPCS,
suppliers and financing bodies
Information gaps and needs within those markets
Results:
Eight major markets stood out: South Africa, Saudi
Arabia, Morocco, USA, India, Chile, China and the United
Arab Emirates. Within these markets, respondents
wanted to know:
CSP project pipelines
Who the main players are in each market, how
much support there is from the government for
future deployment, who the main financing firms
are active in that market and how robust the local
supply chain is in each market
The potential for alternative CSP applications within
these markets
A long-term outlook of what can be expected from
these markets within the next five to ten years
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Markets forecast: Key influencing factors were
identified and weighted to analyse their impact on the
future growth of the market until 2024.
For a detailed explanation of the markets forecast see
Appendix B.
Expert Analysis: This report has been researched and
written by a team of highly-qualified and impartial
industry experts ensuring that only the highest quality,
most relevant and digestible analysis is published.
All information is accurate as from August 2013.
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Methodology
CSP Today Market Enabling
Factors and Forecast Strategy
direct Factor
Indirect Factor
decision Points
Market Expansion
Environmental Measures
International Agreements
Global
Global
Technology Maturity
Global Energy Demand
Global Economic Stability
Unconventional Fossil
Fuel Reserves
PV Price
Ease of Financing
Market Saturation
National CSP Targets
Local Energy Demand
Permitting
Incentives
Grid Coverage
Water Availability
DNI
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Community/Local Specific
Community/Local Specific
Conventional Power Cost
Political Stability
Population/Economic
Growth
High Cost of Energy
Presence of Supporting
Industries and Local
Expertise
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executive summary
Executive Summary:
Chapter 1: Current status of the CSP Industry
The past few years have witnessed momentous developments in the global CSP industry; from the collapse
of the Spanish CSP market, to the termination of the
U.S. Department of Energy’s loan-guarantee program.
Unexpected delays were also encountered in the South
African and Indian CSP bidding rounds.
This chapter also ranks markets according to which
offers the best opportunities for investors under today’s
industry scenarios. Comprehensive research was
undertaken, based on a detailed methodology, in order
to generate a country-specific scorecard that ranks
countries according to the existing CSP activity in each
of them.
On the positive side, the UAE’s first, 100-MW CSP plant
came online in March, while the United States will see five
plants totaling around 1.3 GW being commissioned over
the next year. February 2013 in particular was an eventful
month, with the launch of a CSP tender process in Saudi
Arabia and Chile. Kuwait and Morocco also released
Requests for Proposals; the former for Phase One of the
Shagaya Multi-Technology Renewable Energy Park, and
the latter for Phase Two of Ouarzazate. Finally, China is
targeting a CSP capacity of 1 GW by 2015 and 3 GW by
2020, and is revising feed-in-tariffs for CSP.
The ranking takes into account various CSP-related
parameters, including technical and economic factors,
with an aim of showing the current attractiveness of
different countries for CSP deployment.
As outlined in this introductory chapter, the volume
of operating capacity worldwide – around 2.8 GW – is
set to dramatically increase with the connection of
more than 670 MW to the grid in the USA and with the
substantial pipeline of CSP projects under construction.
Chapter 2: Markets Forecast and Scorecard
This chapter provides detailed analysis of the projected
growth of CSP markets, including optimistic, conservative and pessimistic forecasts for cumulative installed
CSP capacity by market until 2024.
Using available data from industry experts and the
consolidation of complementary technology-diffusion
models, future pitfalls and opportunities in each market,
the future capacity of CSP technology expected in the
ten years up to 2024 was identified, both on a global
and on a country-by-country basis (country forecasts
are included in the relevant country chapters) .
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Chapter 3: South Africa
South Africa was ranked number one in the CSP Today
2013 Markets Scorecard. With a potential CSP capacity
of 262 GW to 311 GW in the short and medium term,
according to the University of Stellenbosch’s Center for
Renewable and Sustainable Energy, and with DNI levels
exceeding 2,900kWh/m2 per year, the South African
CSP market promises a significant contribution to the
country’s coal-dominated energy mix.
The growth of the South African CSP industry will be
further supported by the increase of tariff by 14.6% to
19% per year over the next five years, from April 2013 to
March 2018. The time-of-day tariff introduced this year
will also help promote CSP with storage for generating
energy during peak hours. In addition, the commitment
shown by the government toward CSP, the strong
manufacturing industry and land availability are all
encouraging factors for the development of CSP.
Despite the country’s small target of 1,200 MW of CSP
by 2030, with the national Integrated Resource Plan
(IRP) due to undergo some changes, it is very likely
that CSP will gain a larger foothold in the local energy
market. At the time of writing this report, South Africa
had three CSP projects under construction, totaling 200
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executive summary
MW: two under development (200 MW) and three in
planning (250 MW), according to the CSP Today Global
Tracker.
One of the biggest barriers for CSP development
in South Africa is the uncertainty regarding future
megawatt allocations, given that several changes have
repeatedly occurred in the government’s IRP. Whilst the
first window placed a local content stipulation of 21%
on CSP projects, this was raised to 35% in the second
window for no-storage CSP and 25% for CSP with
storage. For the third window, this has been raised to
45% for no-storage CSP and 40% for CSP with storage.
The third bid window announced in May 2013 introduced a new time-of-day tariff. Under the country’s
Renewable Energy Independent Power Producer
Procurement Program (REIPPPP), tariffs have been
capped for each technology, and according to the
Request for Proposal, CSP has a base tariff of R 1.65/kWh.
A bidder supplying energy during the peak time will get
270% of the base tariff whilst there is no payment for
supplying energy beyond the peak time at night.
Although there is no specific policy driving solar applications in South Africa, there is potential for CSP usage in
agricultural and industrial sectors. In addition, the existence
of a substantial, well-established construction industry can
provide the civil works required for a CSP plant.
Chapter 4: Saudi Arabia
Based on the CSP Today 2013 Markets Scorecard, Saudi
Arabia is ranked as the second most-promising CSP
market for future development, only after South Africa.
With a CSP target of 25 GW by 2032, the kingdom will
need to deploy at least 1.35 GW of CSP capacity per year
to meet its objective.
Saudi Arabia has the highest per-capita oil consumption
in the world, and in 2011, less than 1% of the energy
generated was sourced from renewable technologies.
In 2010, the King Abdullah City of Atomic and
Renewable Energy (K.A.CARE) was established to lead
the development of the kingdom’s renewable energy
strategy. In May 2012, Saudi Arabia announced a
national energy target of 25 GW installed CSP capacity
by 2032, becoming one of the most ambitious players
in the CSP arena, and in February 2013, the Competitive
Procurement Process (CPP) was launched by K.A.CARE.
Although there is no CSP-specific framework or
renewable energy legislation currently in place, it is
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expected that a decision will be made following the
second procurement round, which is likely to take place
in early 2015 – with feedback that the initial timeframe
outlined by K.A.CARE has been delayed. The first round
of the CPP has allocated 900 MW to CSP, and the second
round 1.2 GW. However, these figures may be revised as
the program progresses.
Saudi Arabia’s ambitious renewable energy program
represents an attractive opportunity for international
CSP players and is likely to have a positive effect on
the industry in general. The target set by the kingdom
potentially opens the doors for scaling up the
production of components and identifying solutions
along the whole value chain.
The particular context in which projects will be
developed features very challenging environmental
factors like dust and temperature that will require
ad-hoc solutions to optimize the technical performance
of many components. On the other hand, the lack of
a stable regulatory framework represents a serious risk
factor for developers.
CSP can provide a good source of energy for seawater
desalination in Saudi Arabia, considering the intensive
energy consumption of the process. The kingdom has
already announced it would be investing US$ 11 billion
in desalination over the next eight years, which will
include building solar-powered stations. In addition,
enhanced oil recovery represents another promising
application for CSP in Saudi Arabia, considering the
forecasted increase in global oil and gas consumption.
Chapter 5: Morocco
According the CSP Today 2013 Markets Scorecard,
Morocco is ranked as the third most promising CSP
market, with an optimistic forecast of 5,275 MW of
installed CSP capacity by 2024, and a pessimistic
forecast of 845 MW by 2024.
Morocco is one of the world’s most energy-deprived
countries and depends on external sources for nearly
97.5% of its energy needs. As the largest energy
importer in North Africa, the country suffers great
economic pressure due to the volatility of fuel prices.
However, Morocco also has one of the best solar
resources in North Africa, and thanks to its strategic
geographic position, it aims to become the heart of the
Mediterranean interconnection between the Maghreb
region and Europe, acting as the a regional crossroads
for power exchange.
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executive summary
Morocco’s national energy strategy was launched in
2009 alongside the Moroccan Solar Plan. Furthermore,
the government has made visible efforts in recent
years to improve the regulatory framework, and has set
an ambitious target of 2 GW of solar power by 2020.
Although no specific policy regarding local content
requirements has been introduced at the time of
writing this report, the Noor I project used a stringent
local content requirement of 30% in its bidding process.
Local CSP projects like Noor I are already triggering the
development of domestic manufacturing expertise and
of training and R&D activities. For example, Moroccan
stakeholders and policy makers have expressed a clear
interest in developing research and training activities
through collaboration with European institutions.
Despite the financial challenges typically associated
with CSP projects, Morocco’s renewable energy initiative
received strong financial backing by international
bodies, such as the Clean Technology Fund, which is
managed by the African Development Bank and the
World Bank. Amongst the alternative CSP markets,
seawater desalination is a very promising application for
CSP technology in Morocco. At the time of writing this
report, Morocco had one operational CSP plant with
an installed capacity of 20 MW; one under construction
(160 MW); two under planning (100 MW and 200 MW);
and one announced (20 MW), according to the CSP
Today Global Tracker. Chapter 6: United States of America
With an average DNI of 2,700 kWh/m2 per year in the
CSP-friendly states of the country, and with the daily
peaks in the south-western states, the United States
has a potential CSP capacity varying between 14 GW
to 33 GW. While there is currently no announced future
capacity for the country, there are 1,323 MW under
construction, in addition to the 571 MW already in
operation. A large volume of capacity is also under
planning - around 1,865 MW - while 600 MW is under
development.
A global pioneer in CSP development, the U.S. is one of
the world’s largest consumers of electricity and energy,
with one of the most developed power markets.
Various incentives have been put in place for CSP
development, including but not limited to Renewable
Portfolio Standards Research and Development
Numerous projects have also been carried out by worldleading U.S. research organizations like the National
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Renewable Energy Laboratory and the U.S. Department
of Energy within the ambitious SunShot Initiative that
aims to achieve grid parity for CSP-generated electricity
by 2020. This equates to a levelized cost of energy of
approximately US$ 0.06/kWh, which in turn requires
costs to be cut by around 75%.
According to industry experts, the outlook for CSP under
the current U.S. market conditions is not as promising as
it was a few years ago, although the potential remains
tremendous, particularly in south-western states. High
costs and increasing exploitation of shale gas are
amongst the main threatening factors to the deployment
of CSP, followed by lengthy permitting processes.
The United States has a comprehensive supply chain
for CSP components and sub-components. As a
consequence, all the main parts are easily available in the
market. Beyond the electricity market, hybridization is one
of the most promising CSP applications for the United
States, while another interesting field of deployment is
the use of CSP in enhanced oil recovery operations.
Chapter 7: India
According to the 2013 CSP Today Markets forecast,
India is ranked as the fifth most promising CSP market
globally. With an average DNI of 2,100 kWh/m2 per year,
and a sustained ecosystem promoting the development
of utility-scale solar projects, the Indian CSP industry is
poised for growth in the short and medium term.
As the fourth largest consumer of energy in the world,
India consumes an estimated 794 TWh of electricity
annually, and by 2020, the country is expected to require
2,000 TWh of electricity per year. In response to the rising
domestic demand for electricity, in 2010, the Government
of India launched the National Solar Mission (NSM) to
deploy 20 GW of grid-connected solar power, with the
aim of reducing the cost of solar power in the country.
As of August 2013, a CSP capacity of 50 MW had been
realized under the NSM Phase 1, and 430 MW remains in
the phase 1 pipeline. Phase 2, which is expected to begin
in 2014, targets a CSP capacity of 1,080 MW, representing
30% of the overall target solar capacity.
A new CSP hybrid program will be incorporated into
Phase 2 to support the construction of four CSP hybrid
plants. In addition, the Renewable Purchase Obligations
mechanism will be employed to support the implementation of solar projects. Besides the NSM, other
states, such as Gujarat and Rajasthan, also have their
own guidelines and incentives.
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executive summary
At the time of publishing this report, India had
56.5 MW of operational CSP plants; five CSP plants
under construction totaling 254 MW; three under
development totaling 210 MW; four under planning
156 MW; and five announced 155 MW, according to
the CSP Today Global Tracker. The domestic content
requirement is a critical aspect in India’s NSM. In Phase 1,
this constituted 30% of required components excluding
land, although some developers are targeting up to
50% local content to be price competitive.
The local CSP ecosystem in India is characterized by a
growing market with tremendous opportunities for both
grid-connected and off-grid projects. For this reason,
hybridization of the current fossil fuel-based capacity
represents one of the most promising applications for
India’s CSP industry. To facilitate a greater understanding
of India’s CSP ecosystem, a comprehensive list of
government bodies, permitting agencies and utilities,
as well as local feasibility study providers, EPC firms, and
financing organizations, is outlined in this chapter.
While there are materials and sub components that are
easily available on the Indian market, such as steel, glass,
and concrete, other components are less easy to find,
or are even rare, such as molten salts. When it comes
to the alternative applications market, process steam
applications, hybrid biomass CSP, and desalination are
the areas with the largest potential for CSP in India.
The Ministry of New and Renewable Energy in India is
already implementing a project promoting CSP-based
process heat applications and another for the hybridization of CSP and biomass.
Among the main drivers for CSP deployment in India
are the energy generation targets established by the
government, the growing manufacturing sector, and
the environmental impact of fossil fuel electricity
generation, while low feed-in-tariffs, unreliable DNI data,
and the complexity of land acquisitions, are considered
to be some of the fundamental challenges hindering
the development of the local CSP market.
Chapter 8: Chile
Recently moving into the CSP spotlight owing to its
excellent DNI that ranges from 2,445 kWh/m2 to 3,832
kWh/m2 per year, Chile benefits from a clearness
index which justifies the country’s growing interest in
CSP generation. With a potential of up to 2,636 GW of
CSP, the country’s wheels are in motion to exploit CSP
technologies, and a parabolic trough plant of 14 MW
is already in operation. In addition, there are currently
www.csptoday.com
1,080 MW in planning and a further 5 MW that has been
announced. Chile is ranked as the sixth most promising
CSP market.
Chile is the second-least energy self-sufficient country
in the Latin American and Caribbean (LAC) region and
experiences the second highest electricity prices within
the same area.
The country is now considering more seriously the
shift toward indigenous energy sources, given the
abundance of wind and hydro resources, particularly
in the south, while in the north region, Atacama Desert
has one of the world’s highest levels of solar irradiation.
The current largest user of energy in Chile and the
engine of the economy is the mining sector, as well as
the industrial (together accounting for 36%), followed by
the transport sector (35%). Chile’s economy is expected
to continue growing at a rate of 4% to 5% over the next
fifteen years. A particular aspect of importance in the
energy market is the transmission grid, which is spread
unevenly throughout the country, due in particular to
the challenges related to its physical geography.
The current energy policy in Chile is based on the “National
Energy Strategy: 2012-2030: Energy for the Future”
announced in 2012. Through this strategy, the government
reaffirmed its commitment to achieve a 10% target of
generation from renewable technologies by 2024.
For the time being, there is no Feed-In-Tariff scheme
or specific policy for the deployment of solar energy.
However, CSP is considered the most appropriate
technology to exploit the extraordinary amount of
solar resources. Given the high electricity prices, Chile
could even become the first solar power market to be
independent of subsidies or tax benefits, and to reach
grid parity based on local costs.
Chapter 9: China
The CSP Today 2013 Markets Scorecard has ranked
China as the seventh most-promising CSP market. With
a population of more than 1.3 billion, far exceeding all
other emerging CSP market demographics, China faces
rapid energy demand growth. To meet future demand,
China will need to have added over 1,300 GW to its grid
between 2005 and 2030. China has an optimistic target
of reaching 3,000 MW of CSP power by the end of the
decade. The aim of this is to address China’s desire to
refocus its energy portfolio on more environmentallyfriendly technologies.
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executive summary
With DNIs ranging from 1,800 to 2,500 kWh/m2 per year,
China may not be a country benefiting from the best
solar resource, but considering its population and the
availability of land for CSP projects, the country could
potentially have 5,821 to 8,105 GW of CSP capacity.
development, materials and components including
mirrors, receivers, support structures, control systems,
molten salt/heat storage, heat transfer fluids, steam
generators, power blocks, pumps and system
integration.
Despite holding great promise for future CSP
deployment, China’s CSP industry is challenged by
numerous barriers to its development in the short
to mid-term, including the lower cost of Chinese PV
energy, the difficulty of transmitting electricity from
western to the eastern areas, and the long periods of
water scarcity, heavy brown clouding and sandstorms.
Chapter 10: The United Arab Emirates
The United Arab Emirates (UAE) enjoys one of the
highest levels of income per capita in the world,
and unlike other countries in the Middle East and
North Africa, this market is shaped through privately
structured, government-supported organizations and is
open to the entry of new developers. The UAE is ranked
as the eighth most promising CSP market.
China’s total installed power capacity at the end of 2011
reached 1,060 GW, where coal was the dominant source
of electricity.
China is currently implementing its 12th Five Year Plan
(2011-2015) on Renewable Energy Development, and
has targeted an installed capacity for solar thermal
electricity power plants of 1 GW by 2015 and 3 GW
by 2020. At present, CSP Feed-in-Tariffs (FiT) are under
study in China. The bidding process of the first project
resulted with three companies submitting a FiT of 2.25,
0.98 and 0.94 RMB/kWh. China Datang was awarded the
contract with the lowest price at 0.94 RMB/kWh.
Around 350 MW are now under development, largely in
the provinces of Qinghai, Gansu, Tibet, Inner Mongolia
and Ningxia, where parabolic trough and 50 MW are the
main characteristics - following the Spanish example.
Regarding finance, the Asian Development Bank and
the World Bank are participating in three CSP projects.
China is the largest producer of coal, gold, and some of the
rarest minerals in the world. It is also the largest consumer
of other mining products, especially thermal coal, with
around 49% of total global consumption, and iron ore,
accounting for around 58% of total global consumption.
Seawater desalination is quickly developing in China,
where in its 12th Five-Year Plan, the government
announced a target of 2.2-2.6 million m3/day of online
seawater-converted capacity by 2015. Several Enhanced
Oil Recovery (EOR) pilot projects have also been
implemented in China, and in the coming years, two
projects are going to be constructed in the Dagang and
Daqing Oil Basins.
An entire Chinese supply chain CSP industry is
in the process of being created, covering project
www.csptoday.com
The UAE announced investments of more than US$
102.3 billion in renewable energy projects to be
developed by 2020 and has the economic potential to
develop more than 20 GW of solar power generation by
2030. The two largest emirates by area, Abu Dhabi and
Dubai, set an overall generation target from renewables
of 7% by 2020 and 5% by 2030 respectively. The UAE
flagship project is the multi-billion dollar investment
for the development of Masdar, the sustainable city
launched in 2006. Amongst other projects, Masdar
Institute announced a pilot program for developing and
testing solar desalination technologies in 2013.
At present, the UAE does not have a tailored policy
framework and lacks a specific incentive scheme for
renewable energy projects. However, there are discussions around the possible introduction of a feed-in-tariff
program. No specific local content requirements have
been announced for CSP projects, but an important
business requirement is that 51% of any new company
must be owned by UAE nationals – with the exception
of free zone companies that can be 100% owned by
foreign investors. Furthermore, lower-than-expected
DNI conditions and the potentially damaging impact
of dust on CSP operations could be a strong deterrent
against the market.
Considering the level of water scarcity in the UAE,
CSP technology would be ideal for solar desalination
applications, as up to 90% of the freshwater in the entire
Gulf region is supplied through desalinated seawater.
Not only could solar thermal power provide the
electricity for the process, but waste heat could also be
usable for thermal desalination. Another potential area
for the deployment of CSP technology is the provision
of heating and cooling for buildings and industrial
applications. In addition, enhanced oil recovery (EOR)
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executive summary
represents a promising avenue for CSP developments
due to the existing EOR activities being undertaken in
this market.
Chapter 11: Markets Digest
The Markets Digest provides a comprehensive overview
of the remaining CSP markets, providing insight into
CSP project profiles and pipelines as well as CSP-specific
policies and incentives. These markets are:
Algeria
Australia
Brazil
Egypt
Greece
Israel
Italy
Jordan
Kenya
Kuwait
Mexico
Namibia
Oman
Portugal
Qatar
Spain
Thailand
Tunisia
Turkey
www.csptoday.com
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Current status of the CSP Industry
1
Current status of the CSP Industry
Heba Hashem
Contents
List of Figures
List of Tables
Introduction
1.1. CSP Industry in Review
1.1.1. The collapse of the Spanish CSP market
1.1.2. First large-scale projects come on-line: USA and UAE
1.1.3. Saudi Arabia launches White Paper
1.1.4. Chilean Government releases details for CSP tender process
1.1.5. Delays in South African and Indian bidding rounds
1.1.6. Morocco launches RFQ for Phase Two of Ouarzazate
1.1.7. Kuwait Makes its Presence Felt
1.1.8. China CSP progress and FiT
1.2. CSP Industry Outlook
References
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List of Figures
Figure 1(1): Spain CSP Market Growth 2013
Figure 2(1): USA CSP Market Growth 2013
Figure 3(1): UAE CSP Market Growth 2013
Figure 4(1): Chile CSP Market Growth 2013
Figure 5(1): South Africa CSP Market Growth 2013
Figure 6(1): India CSP Market Growth 2013
Figure 7(1): Morocco CSP Market Growth 2013
Figure 8(1): Kuwait CSP Market Growth 2013
Figure 9(1): China CSP Market Growth 2013
Figure 10(1): Parabolic Trough Technology - Project Pipelines 2013 (excludes projects in operation)
Figure 11(1): Fresnel Technology - Project Pipelines 2013 (excludes projects in operation)
Figure 12(1): Dish Technology - Project Pipelines 2013 (excludes projects in operation)
Figure 13(1): Tower Technology - Project Pipelines 2013 (excludes projects in operation)
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List of Tables
Table 1(1): Spain’s Popular Party Government - Major Legislative Changes Affecting CSP (2012-2013)
Table 2(1): UAE’s First CSP Project
Table 3(1): Large-scale CSP Projects Underway in the USA
Table 4(1): Chile’s Tender Process
Table 5(1): Moroccan Solar Plan: Key Dates
Table 6(1): Shagaya Project Phase One - Key Specifications
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www.csptoday.com
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Current status of the CSP Industry
Chapter Summary
The past few years have witnessed momentous developments in the global CSP industry; from the collapse
of the Spanish CSP market, to the termination of the
U.S. Department of Energy’s loan-guarantee program.
Unexpected delays were also encountered in the South
African and Indian CSP bidding rounds.
On the positive side, the UAE’s first, 100-MW CSP plant
came online in March, while the United States will see
five plants totaling around 1.3 GW being commissioned
over the next year. February 2013 in particular was an
eventful month, with the launch of the CSP tender
process in each of Saudi Arabia and Chile. Kuwait and
Morocco also released Requests for Proposals; the
former for Phase One of the Shagaya Multi-Technology
Renewable Energy Park, and the latter for Phase Two of
Ouarzazate. Finally, China is targeting a CSP capacity of 1
GW by 2015 and 3 GW by 2020, and is revising feed-intariffs for CSP.
As outlined in this introductory chapter, the volume of
operating capacity worldwide – around 2.8 GW – is set
to dramatically increase with the connection of more
than 1,000 MW to the grid in the USA and with the
substantial pipeline of CSP projects under construction.
Introduction
The CSP world market continues to grow, despite recent
difficulties in traditional markets. While a number of
projects are approaching completion in mature markets
such as Spain and the USA, new projects are being
tendered in emerging CSP markets, as governments
and funding institutions recognize the economic
advantages of local CSP development.
According to the CSP Today Global Tracker, there are 17
GW of CSP at various stages of development worldwide.
Most interesting is the amount of operating capacity,
which is almost 2.8 GW, partly due to recent plant
connections in Spain. This volume is set to increase
dramatically with the connection of more than 1,000
MW to the grid in the USA when Ivanpah, Solana,
Mojave, Crescent Dune and Genesis Solar stations come
online.
1.1. CSP Industry in Review
1.1.1. The collapse of the Spanish CSP market
Spain maintained its leadership in the CSP industry in
2012, during which it added 802.5 MW of CSP capacity
to reach a total of 1,953.9 MW. Today, the country has
over 2,000 MW of CSP in operation, and another 250
www.csptoday.com
MW is scheduled to come online before the end of
2013. This would bring the country’s total installed CSP
capacity to 2,300 MW.
Spain was the first European country to introduce a
Feed-in Tariff (FIT) system for CSP, in 2002, and in 2007,
FIT regulations were refined, improving remuneration
options for CSP plants. However, in January 2012,
FITs were cancelled for new applications, and would
not be awarded to CSP plants beyond the 2,355 MW
approved in 2009 to become operational by 2014.
Instead, renewable energy firms would receive a fixed
investment supplement to ensure economic viability of
their plants.
The latest development in terms of the FIT came in
July 2013. FITs are to be removed and replaced with a
new scheme of investment supplements. Under the
new law, both renewables and cogeneration plants
will receive payment for their investment, instead of
the former FIT. This has been established at a 7.5% rate,
before tax. However, this rate will not be applied to
the CAPEX of the plant, but rather to what the Spanish
Government deems a ‘reasonable cost’ for a CSP plant.
Struggling to contain a €25 billion gap between
electricity costs and revenues amid a severe financial
crises, the Spanish Government went further and
imposed significant taxes on renewable energy
production. As a result of these legislative changes, the
CSP industry is incurring nearly 37% revenue losses, and
a large number of developers are working with financial
institutions in an attempt to restructure debts.
Leading CSP developers in Spain, such as Abengoa
and Acciona, have taken legal action against the
government and are implementing workforce
reduction. And, while Acciona announced it would
cut investments in the local energy sector by 50%,
Abengoa, Spain’s largest CSP developer, said it would
not make new investments in Spain.
The majority of Spanish CSP plant owners are expected
to default on the bank loans they used to build the
plants in the first place, and the projects may need to
be refinanced many times over to save some yield out
of them, potentially triggering a flurry of ownership
changes.
For projects where funding is subject to a material
adverse change clause, which could include most of
those recently completed, the banks may demand their
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Current status of the CSP Industry
money back, or they could choose to seize the project
assets. Another possibility is that the banks could
demand plant owners increase their capital to help
cover the debt. In this case, however, owners will have
to find partners willing to invest into what has become
an unprofitable venture under the current legislation.
In addition to the latest legislative changes, the Spanish
CSP market has a number of other barriers against
future growth. Firstly, electricity generation capacity is
more than double the peak demand (Red Electrica De
España, 2012). Secondly, there has been a 5% decline
in electricity demand since 2007 (Red Electrica De
España, 2012). Thirdly, Spain is fairly isolated with few
interconnections with other markets and a similar
situation of oversupply is happening in other European
markets making the export of electricity unlikely (The
Economist, 2013).
Despite the troubles in Spain’s CSP industry, 2013 began
well, with a number of plants coming on line. However,
given the unstable regulatory framework, Spanish
CSP firms are now turning to overseas CSP markets.
Abengoa is currently building two CSP plants in South
Africa, as it continues work on its projects in Spain,
Mexico and USA, while Acciona has secured business
with Morocco’s Noor I project as an EPC member of the
Acwa Power-led consortium.
Table 1(1): Spain’s Popular Party Government - Major Legislative Changes Affecting CSP (2012-2013)
Regulation
Changes
Royal Decree Law 1/2012, of 27 January
Financial incentives suspended for new electricity production installations using co-generation, renewable energy sources and waste.
Act 15/2012, of 27 December
7% tax applied on the income of all electricity generators.
Reduction of 12-15% in the FIT proportional to the natural gas a plant
consumes.
Royal Decree Law 29/2012, of 28 December
Measure taken to withdraw rights to premiums if the deadlines to start
operations are not met.
Royal Decree Law 2/2013, of 1 February
The End of the Feed in Tariff
Elimination of the “market price plus premium” option, which allowed
plants to sell electricity and receive the price that the market set plus a
reference premium, which was fixed in 2012 at 28.1894 cents per Euro
for kWh.
Stipulates that, as of January 2013, CSP plants can only apply the FIT
method, which will automatically be applied to all plants previously
applying the “market price plus premium”. During 2013, the FIT will
remain fixed at 29.8957 Euro cents per kWh.
CSP plants will not be rewarded for selling at peak demand times and
will instead receive the same amount regardless of the time they sell the
energy.
FIT will no longer be updated according to the Consumer Price Index,
but with a new index known as the “core inflation index” that will exclude
more volatile elements in its rate calculations, such as energy products.
The latest legislation has seen the FIT (which was meant to last for 25
years) removed and replaced with a supplementary investment of 7.5%
for the next six years.
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
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Current status of the CSP Industry
1.1.2. First large-scale projects come on-line: USA
and UAE
The year 2013 saw the UAE’s first CSP project come
online. Shams 1 was launched in the capital city Abu
Dhabi in March 2013, and at 100 MW, it became the
world’s largest CSP plant.
Meanwhile, the United States, which currently has an
installed CSP capacity of 571 MW, will see five new
plants totaling around 1.3 GW being commissioned
over the next 12 months.
Table 2(1): UAE’s First CSP Project
Title
Shams 1
MWe Capacity
100
Developers
Masdar, Total, Abengoa Solar
Owners
Masdar (60%); Abengoa Solar (20%); Total (20%)
EPC Contractor
Abener –Teyma
Generation
Offtaker
ADWEC
Technology
Parabolic trough; natural gas or diesel as fossil backup; dry cooling
Financing
US$ 600m loan funded by BNP Paribas; Natixi; Societe Generale; Mitsui; Sumitomo Mitsui
Banking Corporation; Bank of Tokyo-Mitsubishi; National bank of Abu Dhabi; KfW; Union
National Bank; and West LB.
Completion
date
March 2013
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
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Current status of the CSP Industry
Table 3(1): Large-scale CSP Projects Underway in the USA
Title
MW
Developer
Mojave
Solar
280
Owner
EPC
Contractor
Generation Technology
Offtaker
Financing
Completion
date
Mojave Solar, Mojave Solar,
LLC; Abengoa LLC
Solar, Inc.
Abener
– Teyma
Pacific Gas & Parabolic
Electric
trough; two
140-MWe
turbines; wet
cooling
US$ 1.2bn
DOE-loan
guarantee
Q1 2014
Solana
280
Generating
Station
Abengoa
Solar
Abengoa
Solar
Arizona
Public
Service
392
Ivanpah
Solar
Electric
Generating
System
BrightSource NRG Energy;
Energy
BrightSource
Energy;
Google
Bechtel
Pacific Gas
Engineering & Electric;
Southern
California
Edison
Power tower;
dry cooling;
natural gas as
fossil backup
Q4 2013
US$ 1.375bn
DOE-loan; $168m
from Google;
$300m from NRG
Energy (towards
project cost of
$2.2bn)
Genesis
Solar
Energy
Project
250
Genesis Solar, Genesis Solar,
LLC; NextEra LLC
Energy
Resources,
LLC
Pacific Gas
& Electric
(PG&E)
Parabolic
trough; Two
125-MWe
turbines.
steam rankine
for output,
and dry
cooling
US$ 935m
in project
bonds from
Credit Suisse,
facilitated by an
80% DOE-loan
guarantee
Q1 2014
Crescent
Dunes
Solar
Energy
Project
110
Solar
Reserve’s
Tonopah
Solar Energy,
LLC
NV Energy
Power
tower; six
hour- molten
salt thermal
energy
storage
US$ 737m DOE
loan; private
financing from
Solar Reserve,
ACS Cobra and
Santander
Q1 2014
Abengoa
Solar
SolarReserve’s ACS Cobra
Tonopah Solar
Energy, LLC
US$ 1.45bn
Parabolic
DOE-loan
trough; two
guarantee
140-MWe
turbines; wet
cooling; six
hour- molten
salt thermal
energy
storage
Q4 2013
Source: CSP Today Global Tracker, August 2013
The above-outlined projects benefitted from the
now-on-hold U.S. Department of Energy’s (DOE)
loan-guarantee program, receiving a total of US$ 4,235
million in loan guarantees. Future projects, however, will
no longer benefit from this support mechanism, since
the program was terminated in late 2012.
www.csptoday.com
The U.S. CSP sector is now obliged to raise project
finance from other sources, such as federal level
Investment Tax Credits – a 30% tax credit system that
has been extended through December 21, 2016. Other
initiatives are also pushing the growth of CSP, such as
the SunShot program.
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Current status of the CSP Industry
SunShot – a DOE target for CSP technologies to achieve
cost parity with other forms of energy by 2020 – calls
for at least a 75% reduction in costs in order to achieve
a levelized cost of electricity of US$ 0.06/kWh electric or
less, without subsidy. The program has played a major
role in the growth of CSP, investing more than US$ 130
million since October 2011 in new funding initiatives for
the development and demonstration of CSP technologies, including four initiatives introduced in 2013: CSP
HIBRED, SolarMat, PREDICTS and CSP: ELEMENTS.
The United States’ five underway projects, along with
the UAE’s commissioned CSP plant, are expected
to prove the reliability and dispatchability of CSP,
increasing the confidence of utilities, financiers, grid
operators and regulators in the technology.
1.1.3. Saudi Arabia launches White Paper
Saudi Arabia launched the Competitive Procurement
Process (CPP) for its renewable energy program in
February 2013. Announced by King Abdullah City for
Atomic and Renewable Energy (K.A.CARE), the CPP invited
developer feedback on the White Paper by April 5, 2013.
A period of six months has been given for proposals
in the introductory round, although in subsequent
procurements, a shorter period will be allotted.
K.A.CARE will initially establish the framework for
the CPP, identifying targets, capacities and eligible
technologies for each round. Following that, a standalone government entity, named as the Sustainable
Energy Procurement Company (SEPC), will take over the
responsibility of administering the procurement and
executing the Power Purchase Agreements (PPAs).
The initial time frame which was proposed by K.A.CARE
in the draft White Paper has been delayed. The Request
for Proposals (RFP) for the introductory round, which
will see 800 MW split between CSP, PV and wind, was
initially expected to be released mid-2013. It is now
expected that the RFP will not be released until 2014,
although there is a chance that a draft version of the
RFP will be released for public comment before the end
of 2013.
The introductory round of the CPP will comprise
of five to seven projects of varying technologies at
pre-packaged sites, which will be offered to bidders at
locations that can be easily connected to the grid. After
this 9-12 month process, culminating in the selection
of the introductory round winners, the first full-scale
procurement round will commence.
www.csptoday.com
The first bidding phase will target 900 MW of CSP, and
the second 1,200 MW. For any project to be eligible, a
minimum capacity of 5 MW per round will be required,
although smaller projects that aggregate up to 5 MW or
more will be eligible to participate, provided they have
a single, common metering point.
As for financial parameters, K.A.CARE requires
participants to have one of the following: an
investment-grade credit rating, a net worth with a
minimum of US$107,000 per MW of the total contract
capacity at the end of the last two fiscal years, or a net
revenue of no less than US$ 53,000 per MW of the total
contract capacity at the end of the last fiscal years.
Externally financed projects, on the other hand, will be
evaluated based on the strength of commitment and
past experience in financing projects.
To satisfy experience requirements, developers must
have constructed at least one renewable energy
facility similar to the one being proposed, with Saudi
experience earning additional points. An ability to
achieve commercial operation within two years from
executing the PPA is another prerequisite, although
for pre-packaged sites, the deadline for commercial
operation will be 18 months.
In terms of CSP-specific requirements, at least one
month’s worth of radiation data using terrestrial
measurements or three months of satellite-based
radiation data will have to be shown to meet the
resource-assessment criteria.
Alternatively, CSP developers may rely upon data from
a tower site with similar meteorological conditions, but
they must confirm so in writing by a qualified meteorologist. This would not be required if the developer
were utilizing one of the pre-packaged sites.
Additionally, during the introductory round, CSP plants
should provide a minimum of four hours of storage, and
this may increase in subsequent rounds. CSP proposals
with higher storage capacity will be favored over other
proposals that are priced equivalently, while developers
integrating local content provisions into proposals will
also be given preference during evaluation.
Competition in Saudi Arabia’s upcoming bids is
expected to be intense, given that the program has
generated tremendous interest from CSP companies
worldwide since its announcement in 2011.
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1.1.4. Chilean Government releases details for CSP
tender process
Chile enjoys one of the highest solar radiation levels
in the world, especially in the Atacama Desert, where
radiation potential is as high as 3,400 kWh/m² annually.
The good DNI conditions are focused in the North
of the country, whilst DNI conditions in the South of
the country are considerably lower. Spanning 4,000
square kilometers, the Atacama Desert is home to
Chile’s world-leading copper industry, which together
with other mining activities absorbs roughly 80% of
the nation’s energy. Chilean mining companies are
becoming increasingly eager to capitalize on CSP’s
potential for cheap power to fulfill the industry’s 24/7
power demands.
CSP activity has already started in Chile. Spanish CSP giant
Abengoa recently commissioned a 14 MW CSP plant for
the Mineral El Tesoro mine, currently the largest in South
America, while the National Copper Corporation of Chile
will implement a thermal solar plant for the purpose of
copper separation, a project that has been awarded to
Chile’s Energia Llaima SpA and Denmark’s Sunmark A/S.
Chile’s power sector is heavily dominated by coalpowered electricity, and as mining demand grows, the
sector’s energy consumption is projected to rise by at
least 5% per year over the next decade. In an effort to
reduce Chile’s dependence on imported fossil fuels, the
National Energy Strategy 2012-2030 was launched in
March 2012 with the aim of producing 10% of electricity
from renewable sources by 2024.
In February 2013, the Chilean Economic Development
Agency (CORFO) launched the first international CSP
tender process. Companies, joint ventures, and consortia
were invited to submit project proposals that would
be bankable under commercial banks’ criteria. Chile’s
Ministry of Energy operating through CORFO will
provide a subsidy of up to US$ 20 million to the selected
project, with a limit of a 50% of project total cost. It will
also optionally facilitate access to land for the plant.
Table 4(1): Chile’s Tender Process
Tender Specification
Description
Financing
The government negotiated a consortium of financing sources that exceeds
US$ 350 million in soft loans, including:
A subsidy of US$ 18.6 million from the European Union.
US$ 66 million in loans and up to 25% of the total project costs from the
Inter-American Development Bank.
Loans worth US$ 132.7 million from the German Development Bank (KfW),
channeled through CORFO and local banks.
Project Size
Any scale above a minimum of 10 MWe.
Grid Connection
Projects will be connected to either SIC or SING (Centre and Great North grid
respectively).
CSP Technology
Proposed plants can be of any CSP technology.
Thermal Energy Storage
The plant must have a minimum of 3 hours storage at 85% load. In the case of
a tie with all other metrics being equal, the committee will choose the plant
with the largest amount of storage.
Back-up Fuel
Back-up fuel is not allowed, other than to maintain thermal fluids and/or
molten salts at the right temperature to avoid freezing. Amount of back-up
fuel cannot exceed 6% of the annual electricity generated by the plant.
DNI
Each project must include a year’s worth of meteorological data.
www.csptoday.com
CSP Today Markets Report 2014
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Current status of the CSP Industry
Deadline for submission of
proposals
August 22, 2013 (note: the deadline is said to have been extended by to
October 22, 2013, due to requests from applicants claiming to face difficulties
regarding the permits for installing electricity lines to evacuate the energy
produced by the plant.
Electricity Sale
Developers must demonstrate they have arranged either a PPA or MoU for
the purchase of electricity. They could also sell in the SPOT market although
financing could be complicated in this case.
Source: CSP Today Global Tracker, August 2013
1.1.5. Delays in South African and Indian bidding
rounds
South Africa’s Integrated Resource Plan (IRP) 2010-2030
envisages the generation of an additional 56,500 MW by
2030, compared with current capacity of about 38,000
MW, most of which is produced by Eskom coal-fuelled
power stations. Of the new capacity, 21,534 MW, or 38%,
is planned to be generated through renewable energy,
with 1,200 MW allocated to CSP (SASTELA, 2012).
Consequently, the Renewable Energy Independent
Power Producer Procurement Programme (REIPPPP) was
established as a competitive bid scheme to kick-start
the process of reaching the IRP 2010 targets. Eskom
will be the buyer of the power produced by signing
the PPA, acting through its Single Buyer Office (SBO),
and the Government will provide guarantee for the PPA
payment obligations through the National Treasury.
However, South Africa’s renewable energy program has
been characterized by numerous delays, which first
began when the financial closure for Window 1 projects
was postponed multiple times: from June 2012 to the
end of September, then again to the end of October,
and finally to November.
Financial closure for Window 2 was also postponed from
December 2012 to March 2013, while the submission
date for Window 3, originally scheduled for October
2012, was pushed twice and ultimately occurred on
19 August 2013, where 200 MW was made available to
bidders. An additional 200 MW has been made available
for March 2014 to allow for developers who missed the
August 2013 deadline due to submit their proposals.
The reason for this is that the criteria for projects
bidding in Window 3 changed dramatically with the
introduction of a new Time of Day (TOD) tariff.
The rationale behind the first financial closure delay was
described as a way of allowing the government time
to finalize a support framework for Eskom. As for the
postponement of the third bid submission date, it was
www.csptoday.com
meant to give the country’s Department of Energy time
to reconsider aspects of the Request for Proposals and
integrate lessons learnt in the first and second bidding
rounds into the third round.
Minimum local content requirements for CSP projects
also underwent changes, rising from 21% in the first
window, to 35% in the second window for no-storage
CSP, and 25% for CSP with storage. For the third
window, this has been raised to 45% for no-storage CSP
and 40% for CSP with storage. Similarly, the site of the
country’s first solar park – the 3 GW Northern Cape solar
corridor – was moved from Upington to Prieska.
The series of changes in stipulations and deadline dates
may have created a degree of uncertainty among the
global CSP community, although experts said that in
a new CSP market, delays were expected. Indeed, a
number of CSP projects are currently underway in the
country, including the 50 MW Khi Solar One, the 100
MW Kaxu Solar One under construction by Abengoa,
and the 50 MW Bokopoort project under development
by ACWA Solafrica.
Like South Africa, India’s National Solar Mission also
encountered delays. Firstly, phase two bidding round for
CSP projects was postponed from 2013 to 2014-2015,
with the objective of incorporating sufficient learnings
from phase one into phase two.
This was followed by four of five CSP projects missing
their scheduled commissioning date of May 10, 2013,
prompting the government to extend the deadline
to March 10, 2014, allowing developers 10 additional
months.
The decision was well-received by stakeholders
and solar communities worldwide, as local officials
confirmed that they witnessed seriousness and
commitment to deliver by the developers. The delays in
executing India’s CSP projects was blamed on various
factors, including the short construction timelines, the
CSP Today Markets Report 2014
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Current status of the CSP Industry
involvement of multiple lenders, the lack of essential
components such as heat transfer fluid, and the large
gap between predicted and actual annual DNI. Of the
seven projects, one has already been commissioned.
Godawari Green Energy’s 50 MW CSP plant was
connected to the grid in June 2013.
1.1.6. Morocco launches RFQ for Phase Two of
Ouarzazate
The Moroccan Solar Plan (MSP) was launched in 2009
to achieve 2 GW of installed solar energy capacity by
2020, which would supply around 14% of the country’s
electricity demand. This capacity will be deployed in
five sites across the country: 500 MW in Laayoune; 100
MW in Boujdour; 500 MW in Tarfaya; 400 MW in Ain Beni
Mathar; and 500 MW in Ouarzazate.
MASEN is responsible for managing the procurement of
the projects through tendering and financing activities,
and acts as a single buyer of the electricity produced by
CSP plants through Power Purchase Agreements (PPAs).
MASEN’s selected procedure is an international public
competitive bidding process where the bidder offers a
lower tariff that meets certain technical specifications
on a Build, Own, Operate, and Transfer basis for 25 years.
1.1.7. Kuwait Makes its presence felt
As an oil-producing country, Kuwait will highly benefit
from investing in alternative energy to diversify its
resources, where the saved oil and gas could be shifted
from up-steam consumption to more profitable downstream industries. Driven by this reality, Kuwait now
aims to generate 15% of its electricity from renewable
energy resources by 2030.
In June 2013, Kuwait Institute for Scientific Research
(KISR) announced the release of the Request for
Proposals (RFP) of Phase One of the Shagaya MultiTechnology Renewable Energy Park. The 70 MW project
will comprise 50 MW CSP, 10 MW PV, and 10 MW
wind energy, and will be completed in the first half of
2016. The main specifications of the CSP portion are
highlighted in Table 6(1)
Table 5(1): Moroccan Solar Plan: Key Dates
May 2010
472 MW Ain Beni Mathar ISCC plant with 20 MW of CSP commissioned.
September 2012
First phase of Ouarzazate (Noor I) awarded to Saudi Arabia’s ACWA for a value
of US$ 820 million. ACWA, which will build and operate the 160 MW solar plant,
submitted a 28.8% lower tariff than that of the second bidder, according to a
research carried out by CSP Today.
January 2013
MASEN launched a Request for Qualification process to select developers of
Ouarzazate Phase Two, consisting of 300 MW. The bid includes two projects: a 200
MW parabolic trough plant (Noor II) and a 100 MW central tower plant (Noor III).
Both projects need to be equipped with storage, and MASEN will provide the land
and buy the electricity through a 25-year long PPA. In May 2013, the two projects
jointly received $218m from the Clean Technology Fund.
August 2013
MASEN announces seven shortlisted pre-qualified bidders for Noor II and Noor III
projects. The RFP launch is expected to take place in the fourth quarter of 2013.
2016
400 MW to be commissioned in Ain Beni Mathar.
2017
500 MW to be commissioned in Foum Al Ouad.
2018
500 MW to be commissioned in Boujdour.
2019
100 MW to be commissioned in Sebkha Tah.
2020
MASEN’s target year for achieving 2 GW of solar power.
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
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Current status of the CSP Industry
Table 6(1): Shagaya Project Phase One - Key Specifications
Thermal Energy Storage (TES)
10 hours of molten salt TES.
Must be capable of being fully dispatched in all specified load ranges up to
100% of the contracted power capacity.
Back-up fossil fuel
Usage of back-up fossil fuel will only be allowed for operational purposes
(less than 1%) in the form of light fuel oil.
Dry cooling
The project must be designed based on the concept of limited water
consumption for cleaning and for the steam-turbine closed cycle.
Land
KISR will provide the ready site for the selected contractor.
Meteorological data
KISR will provide information on solar and wind resources, a soil and
ground investigation, and a topographic survey data.
Source: CSP Today Global Tracker, August 2013
Out of 107 consortia who participated in the qualification process, 37 were approved by KISR, eight of
which were CSP consortia. The winning consortium will
be required to design, build and operate the plants for
six years, including two years as warranty period starting
after the project’s commercial operation date.
The Shagaya project is the first of a three-phased master
plan proposed by KISR. The second phase will expand
the plant’s capacity by 930 MW to bring it up to 1,000
MW, and the third by another 1,000 MW to ultimately
reach a capacity of 2,000 MW by 2030. All power output
from the Shagaya project will be evacuated by KISR to
the Ministry of Electricity and Water – Kuwait’s single
electricity producer and distributor, and which will
jointly own the plants with KISR.
Another project being developed in Kuwait is the Abdaliya
Solar Plant, a 280 MW ISCC plant integrating a 60 MW
parabolic trough collector with a gas turbine. In 2012,
proposals were called for and technical assistance was
assigned by the Partnership Technical Bureau (PTB) and
Ministry of Electricity and Water (MEW) - the joint developers of the project. The ISCC project is being set up as a
Special Purpose Vehicle which will design, build, finance,
operate and maintain the power generation facility for
a fixed duration of time. The SPV will also sign an Energy
Conversion and Purchase Power Agreement with the MEW.
According to PTB, expressions of interest, requests
for qualifications and the tender to build the facility
– estimated to cost US$ 720 million – are all planned
to be issued in 2013. In addition, Chevron is said to
be exploring the use of solar energy in enhanced oil
recovery in its Saudi Arabia oilfield that borders Kuwait.
www.csptoday.com
1.1.8. China CSP progress and FiT
China is currently implementing its 12th Five Year Plan
(2011-2015) for Renewable Energy, and has targeted an
installed capacity for solar thermal power of 1 GW by 2015,
and 3 GW by 2020. The country has 3.5 MW of operational
CSP plants, and 2,400 MW of CSP have been announced,
in planning are under development, or being constructed.
China’s bidding process for the first CSP project resulted
in three companies submitting a Feed-in Tariff (FIT) of
2.25, 0.98, and 0.94 RMB/kWh, and China Datang was
awarded with the lowest price at 0.94 RMB/kWh. The
project, for which bidding was opened in January 2011,
will see the construction of a 50 MW parabolic trough
CSP plant in Erdos, Inner Mongolia by 2014. However,
since this FIT is too low to develop a project at the
moment, the Chinese Government is revising the FIT
based on the cost of the projects, which could lead to
higher incentive values.
1.2. CSP Industry Outlook
According to the results of the CSP Today Markets
Survey July 2013, whose participants included CSP
component suppliers, developers, consultants,
government bodies, and EPC firms, CSP companies
are currently generating most of their revenue from
the USA and Spain. In the next 10 years, however, CSP
revenue is mainly expected to be drawn from, South
Africa, Saudi Arabia, UAE, China, India and the USA,
according to the survey responses.
Below is a breakdown of CSP projects under development, construction, or planning across eight markets:
Spain, USA, UAE, Chile, South Africa, Morocco, Kuwait,
and China.
CSP Today Markets Report 2014
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Current status of the CSP Industry
Figure 1(1): Spain CSP Market Growth 2013
Figure 3 (1): UAE CSP Market Growth, 2013*
2,500
 Operation
 Construction
 Development
2,055
900
 Planning
 Operation
800
800
2,000
700
600
1,500
500
400
1,000
*The question mark
indicates that the initial
amount allocated to
CSP may be revised.
Initially CSP Today was
told that 800 MW of
the 1 GW Mohammed
Bin Rashid Al Maktoum
Solar Park would be
allocated to CSP. It has
since emerged that
this amount is under
revision.
300
200
500
100
250
100
50
0
0
Q3 2013
Q3 2013
Source: CSP Today Global Tracker, August 2013
Source: CSP Today Global Tracker, August 2013
Figure 2(1): USA CSP Market Growth 2013
2,000
1,865




1,800
1,600
1,400
Planning
Development
Construction
Operation
1,323
1,200
1,000
800
600
600
571.16
400
200
0
Q3 2013
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
CSP Today Markets Report 2014
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Current status of the CSP Industry
Figure 4 (1): Chile CSP Market Growth, 2013
Figure 6 (1): India CSP Market Growth, 2013
1,200
300
 Operation
 Planning
 Announced
1,080
1,100
254
1,000
250





Announced
Planning
Development
Construction
Operation
900
210
800
200
700
155
600
156
150
500
400
100
300
56.6
200
50
100
14
5
0
0
Q3 2013
Q3 2013
Source: CSP Today Global Tracker, August 2013
Source: CSP Today Global Tracker, August 2013
Figure 5 (1): South Africa CSP Market Growth, 2013 *
Figure 7 (1): Morocco CSP Market Growth, 2013
300
350




250
Announced
Planning
Development
Construction
250
200
200




300
300
Announced
Planning
Construction
Operation
*This graph does not
reflect the announced
5 GW solar park as the
divide between CSP
and PV has not been
decided.
250
200
200
150
160
150
120
100
100
50
50
20
0
0
Q3 2013
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
20
Q3 2013
Source: CSP Today Global Tracker, August 2013
CSP Today Markets Report 2014
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Current status of the CSP Industry
Figure 8 (1): Kuwait CSP Market Growth, 2013
62
Figure 9 (1): China CSP Market Growth 2013
1,800
 Planning
 Development
60
1,700
60
1,600
58
1,400
56
1,200
54
1,000
52
800





Announced
Planning
Development
Construction
Operation
50
50
600
48
400
352.5
286
46
200
60
44
Q3 2013
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
3.68
0
Q3 2013
Source: CSP Today Global Tracker, August 2013
CSP Today Markets Report 2014
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Current status of the CSP Industry
Figure 10 (1): Parabolic Trough Technology - Project Pipelines 2013 (excludes projects in operation)
3,000
 Parabolic Trough Announced
 Parabolic Trough Planning
2,500
 Parabolic Trough Development
 Parabolic Trough Construction
2,000
1,500
1,000
500
0
South
Tunisia
Africa
Algeria
Argentina
Brazil
Chile
China
Egypt
India
Israel
Italy
0
0
50
0
1,700
0
35
0
0
0
0
0
100
0
0
210
0
0
694
284
30
38
0
0
60
0
200
100
150
325
 Parabolic Trough Development
0
20
0
0
0
100
200
290
30
50
0
0
0
0
100
 Parabolic Trough Construction
0
0
0
0
60
0
129
0
0
0
12
160
150
0
815
 Parabolic Trough Announced
 Parabolic Trough Planning
Kuwait Mexico Morocco
USA
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
CSP Today Markets Report 2014
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Current status of the CSP Industry
Figure 11 (1): Fresnel Technology - Project Pipelines 2013 (excludes projects in operation)
300

250
Fresnel Planning

Fresnel Development

Fresnel Construction
200
150
100
50
0
Australia
Chile
China
France
India
South Africa
USA

Fresnel Planning
30
5
0
0
145
150
0

Fresnel Development
0
0
100
12
0
0
0

Fresnel Construction
44
0
0
0
125
0
5
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
CSP Today Markets Report 2014
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Current status of the CSP Industry
Figure 12(1): Dish Technology - Project Pipelines 2013 (excludes projects in operation)
160
140

Dish Announced

Dish Planning

Dish Development

Dish Construction
120
100
80
60
40
20
0
Australia
China
Cyprus
Greece
India
Israel
South Africa

Dish Announced
0
130
0
0
0
0
20

Dish Planning
0
0
0
0
0
0
0

Dish Development
43.5
0
50
75
10
12.5
0

Dish Construction
0
13.2
0
0
0
0
0
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
CSP Today Markets Report 2014
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Current status of the CSP Industry
Figure 13 (1): Tower Technology - Project Pipelines 2013 (excludes projects in operation)
3,000
2,500

Tower Announced

Tower Planning

Tower Development

Tower Construction
2,000
1,500
1,000
500
0
Algeria
Chile
China
Egypt
Greece
Israel
Morocco
South
Africa
Spain
Tunisia
Turkey
USA
0
0
0
0
0
0
0
0
0
2,000
0
0
307
400
0
250
0
0
100
0
0
0
0
1,540

Tower Announced

Tower Planning

Tower Development
0
0
10
0
50
121
0
200
50
0
50
500

Tower Construction
0
0
50
0
0
0
0
50
0
0
0
502
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
CSP Today Markets Report 2014
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Current status of the CSP Industry
References
The Economist, 2013. How to lose half a trillion euros. Available through: http://www.economist.com/news/
briefing/21587782-europes-electricity-providers-face-existential-threat-how-lose-half-trillion-euros?frsc=dg|b
[Accessed October 2013].
Red Electrica De España, 2012. The Spanish Electricity System in 2012. Available through: http://www.ree.es/ingles/
sistema_electrico/pdf/infosis/Electricity_system2012_TheSpanishElectricitySystem.pdf [Accessed October 2013].
Red Electrica De España, 2012. The Spanish Electricity System Summary. Available through: http://www.ree.es/
ingles/sistema_electrico/pdf/infosis/sintesis_REE_2012_eng.pdf [Accessed October 2013].
Southern Africa Solar Thermal and Electricity Association, 2012. CSP in South Africa. Available through:
<http://www.sastela.org/csp-in-south-africa.html> [Accessed 03 August 2013]
www.csptoday.com
CSP Today Markets Report 2014
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Scorecard and Forecast
2
CSP Markets Scorecard and Forecast
By Groupe Reaction
Contents
List of Figures
47
List of Tables
47
Chapter Summary
48
2.1. Market Scorecard
48
2.2. CSP Today Global Markets Forecast
50
2.3. Survey Results
54
List of Figures
Figure 1(2): CSP Market Capacity Forecast Until 2024
51
Figure 2(2): LCOE Forecast Until 2024
52
Figure 3(2): Optimistic Country-Wise Global CSP Capacity Until 2024 (MW)
53
Figure 4(2): Conservative Country-Wise Global CSP Capacity Until 2024 (MW)
53
Figure 5(2): Pessimistic Country-Wise Global CSP Capacity Until 2024 (MW)
54
Figure 6(2): Cumulative CSP Plant Capacity by 2018
55
Figure 7(2): Cumulative CSP Plant Capacity by 2023
55
Figure 8(2): Most promising CSP markets Until 2018
56
Figure 9(2): Most promising CSP markets Until 2023
56
List of Tables
Table 1(2): CSP Market Scorecard as of 2013
49
Table 2(2): Market Forecast Summary
50
Table 3(2): CSP Market Forecast Comparison 2012-2013
52
Table 4(2): Limiting and Enabling Factors for CSP Market Growth
57
www.csptoday.com
CSP Today Markets Report 2014
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Scorecard and Forecast
Chapter Summary
This chapter provides detailed analysis of the projected
growth of CSP markets, including optimistic, conservative and pessimistic forecasts for cumulative installed
CSP capacity by market until 2024.
Using available data from industry experts and the
consolidation of complementary technology-diffusion
models, future pitfalls and opportunities in each market,
the future capacity of CSP technology expected in the
10 years up to 2024 was identified, both on a global and
on a country-by-country basis (country forecasts are
included in the relevant country chapters) .
This chapter also ranks markets according to which
offers the best opportunities for investors under today’s
industry scenarios. Comprehensive research was
undertaken, based on a detailed methodology, in order
to generate a country-specific scorecard that ranks
countries according to the existing CSP activity in each
of them.
The ranking takes into account various CSP-related
parameters, including technical and economic factors,
with an aim of showing the current attractiveness of
different countries for CSP deployment.
2.1. Market Scorecard
Comprehensive research was undertaken, according
to a detailed methodology in order to generate
a country-specific scorecard that ranks countries
according to the existing CSP activity in each of them.
The objective of this scorecard is to identify the markets
where CSP offers the best opportunities for investors
under today’s industry scenario. The ranking takes into
account different CSP-related parameters, including
technical and economic factors, and aims to show the
current attractiveness of different countries for CSP
deployment. This scorecard does not account for future
developments, which could change these markets’
attractiveness to CSP industry players.
A survey was utilized to identify the key driving
parameters of the industry, in order to determine the
metrics reflecting the current state of the individual
markets, with respect to these factors. With updated
data pertaining to the various market growth indicators,
this year’s scorecard shows an industry and a market
that is in perpetual state of change, evolution and
adaptation. In other words, new markets are strengthening their position in the future of CSP, by committing
www.csptoday.com
to very ambitious initiatives that will result, by the end
of the decade, and by 2030, in a new scale of capacity
worldwide.
Table 1(2) shows the results of the scorecard model for
2013, where the top three countries that offer great
attractiveness for CSP development were found to be
South Africa, Saudi Arabia and Morocco. Of those three
countries, South Africa and Morocco currently have the
most intense CSP activity, with several hundreds of MWs
in ongoing tendering processes and more expected to
come soon.
Even though Saudi Arabia does not have any CSP plants
in operation or under construction, it is ranked as the
second best CSP market. A combination of large 2032
CSP targets, ambitious goals to use solar desalination
and the need to displace domestic oil consumption
with alternative energy sources have all helped
promote Saudi Arabia’s ranking. The current ecosystem
promotes CSP development and activity in the country
and provides sufficient grounds for investors to consider
this country despite the current absence of CSP plants.
In the first rounds of the tendering processes, several
hundred MWs are expected to be awarded. It should
also be noted that the final score for these three
countries is quite similar, and therefore, a multitude of
opportunities exists across all of the markets considered.
The USA appears in fourth position, following the top
three countries mentioned above. With the largest MW
capacity under construction and several large plants
under development, the USA is remains a strong CSP
market. Despite the expected halt in CSP deployment
after projects currently under construction are finished
(through 2014), development activity in the USA is
showing positive signals that this market will remain
amongst the leading future CSP markets.
After the USA, the scorecard ranking shows three
promising countries that have been the subject of
much debate and discussion in the industry over the
last two years: India, Chile and China. For these three
countries, there is huge CSP potential. However, reality
shows that their ambitious deployment plans are being
delayed and that CSP industry players do not see these
markets as ready for a boost of CSP activity. In the case
of India, the continuous delays and hard times that
most projects have faced, in terms of financing and
execution, raised doubts over the future CSP tender
processes, and only one of the awarded plants has been
commissioned so far.
CSP Today Markets Report 2014
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Scorecard and Forecast
Of the remaining countries, Spain appears at the
lowest position due to the absolute lack of political
support and the latest retroactive measures passed
on by the government that not only discourage any
sign of CSP development activity, but have also put
currently operating plants at real financial risk. Indeed,
the FiT moratorium adopted almost two years ago has
dramatically affected the Spanish CSP sector and the
possibility of attracting investors has consequently been
reduced considerably.
A final observation with respect of the forecast model
and this year’s scorecard is that all of the markets
considered in the forecast are ranked within the top
eight CSP markets.
Table 1(2): CSP Market Scorecard as of 2013
Maximum points for each parameter
Permitting
Industry
Readiness
Political
and
Economic
Indicators
Energy
Sector
9
National
CSP
Targets
8
Ease of
Financing
6
Renewable
Energy
Support
4
Technical
Market
Potential
17
Score (%)
20
Country
25
Ranking
11
1
South
Africa
77.6
9.6
25.0
15.0
12.2
3.1
4.3
2.0
6.4
2
Saudi
Arabia
77.3
10.3
20.8
11.7
17.0
3.4
5.1
4.8
4.2
3
Morocco
75.6
9.2
25.0
13.5
13.4
3.0
3.3
2.2
6.0
4
USA
72.0
11.0
14.6
17.6
6.4
2.3
6.0
7.8
6.3
5
India
70.1
4.0
22.9
13.0
12.7
1.8
5.0
3.1
7.7
6
Chile
69.7
9.6
18.8
16.7
5.3
3.5
4.7
5.6
5.6
7
China
65.3
5.2
14.6
12.5
13.5
1.5
4.8
4.2
9.0
8
UAE
58.9
2.0
10.4
20.0
7.8
4.0
5.0
7.1
2.6
9
Australia
52.5
5.5
8.3
15.5
2.7
3.8
5.5
8.0
3.2
10
Israel
47.9
3.0
10.4
16.7
2.3
0.0
5.2
5.0
5.3
11
Egypt
42.5
5.2
8.3
10.3
6.9
1.1
3.0
1.3
6.3
12
Tunisia
41.9
2.2
8.3
9.1
11.8
1.5
0.6
2.7
5.7
13
Algeria
34.0
5.6
10.4
6.9
5.0
0.3
1.5
0.2
4.0
14
Jordan
33.3
3.7
4.2
9.1
3.1
1.2
2.1
3.1
6.9
15
Spain
33.2
3.5
2.1
9.4
0.0
3.2
5.6
4.3
5.2
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CSP Today Markets Report 2014
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Scorecard and Forecast
Please see Appendix A for a detailed description of the
parameters that were used in to capture the different
factors influencing the attractiveness of each market for
CSP project development.
2.2. CSP Today Global Markets Forecast
Using available data from industry experts and the
consolidation of complementary technology-diffusion
models, future pitfalls and opportunities in each market,
the future capacity of CSP technology expected in the
10 years (by 2024) was identified, both on a global and
on a country-by-country basis. Each country forecast is
attached to the chapter relating to that country.
CSP Today, to which a total of 243 experts contributed,
was used to calibrate the influence of the parameters
considered and compare the forecast results with the
capacity expected by the surveyed pool within the time
horizon considered. Several emerging and established
markets were analyzed for this market forecast, and
the findings respective to each of them follow in this
section. With an average year-over-year new added
capacity of 42% from 2008 to 2013, and forecasted
to grow by seven, four and two and a half times the
current installed capacity over the next decadeconservative and pessimistic scenarios considered, the industry
is poised for tremendous growth across the world, as
demonstrated in Table 2(2).
The global CSP forecast is outlined below.
CSP plants (of all types) in operation, under
construction, announced, as well as those under development or planning (as of Q2 2013) were considered in
the model as the initial capacity. A survey carried out by
The capacity forecast, at both a national and global
level, was analyzed under optimistic, conservative and
pessimistic outlooks to provide a range of future capacities. The cumulative installed capacity, as predicted by
the three devised scenarios, is shown in Figure 1(2).
Table 2(2): Market Forecast Summary
Cumulative Capacity by 2024 (MW)
Markets
Current
Optimistic
Conservative
Pessimistic
Spain*
2,080
2,300
2,300
2,300
USA
571
8,772
5,127
3,047
UAE
100
1,217
522
210
India
55.5
3,666
1,390
697
Rest of the World
53.3
1,068
463
260
Rest of MENA
27
1,028
397
180
Morocco
20
5,275
1,987
845
Chile
14
1,916
797
348
China
3.5
3,614
1,390
634
Saudi Arabia
0
6,283
3,350
2,001
South Africa
0
5,248
2,219
930
*Spain’s capacity has been capped at 2,300 MW. See section 1.1.1.
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Scorecard and Forecast
An interesting takeaway from this year’s forecast, as
compared with last year’s, is the narrower band of
expected capacity, resultant in part from the fact
that the capacity to be installed up to 2017 is subject
to a lower uncertainty, and also due to the fact that
some major markets are seeing a hiatus which slows
down future capacity to be installed within the next
decade. In the USA, this is because of the economic
conjuncture; in Spain, because of the FIT moratorium;
in Saudi Arabia as well as Morocco and South Africa,
because of deployment delays, and in India because of
problems faced during the first round of CSP projects
currently under construction. Because of these factors,
even though some countries, such as China, have
tremendous potential, the high uncertainty in the
market has forced a revision of forecasts which resulted
in the optimistic scenario being relatively further away
than the conservative outlook, and its pessimistic
counterpart, as shown in Table 2(2).
This year’s IEA Medium-Term Renewable Energy Market
Report (2013) reveals a similar outlook to 2018, with
a forecasted 12 GW of capacity worldwide for CSP,
very similar to the optimistic outlook estimated in this
forecast. Due to the current market conditions in Spain
which have brought the industry to a halt (see section
1.1.1. ), CSP Today is of the opinion that future growth
of the Spanish market is unlikely. For this reason growth
in the market has been capped at a maximum of 2,300
MW, which is the sum of the current project pipeline.
Figure 1(2): CSP Market Capacity Forecast Until 2024
50000
IEA 2013 Forecast
45000
Optimistic
40000
40,386
Conservative
Pessimistic
35000
31,635
30000
25000
19,938
20000
16,876
15000
12,373
10,263
11,451
10000
5000
0
2014
www.csptoday.com
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
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Scorecard and Forecast
Table 3(2): CSP Market Forecast Comparison 2012-2013
2012
Report
2013
Report
2013
vs. 2012
52,616 MW
24,974 MW
-53%
Conservative 24,498 MW
up to 2022
14,389 MW
-37%
9,282 MW
-23%
Optimistic
up to 2022
Pessimistic
up to 2022
12,509 MW
For the market-specific energy production forecast,
a capacity factor of 0.3 is assumed until 2008, and a
capacity factor of 0.7 is assumed afterwards, under the
assumption than thermal storage is implemented in the
majority of the projects constructed. The LCOE resulting
from the forecasted CSP cumulative capacity is shown
in Figure 2(2).
While only a fixed number of countries have been
considered for both the forecast and the scorecard,
additional countries are expected to pursue CSP
technologies as good track records are demonstrated
throughout an increasing number of developed and
developing countries. In this year’s IEA Medium-Term
Renewable Energy Market Report, the increase in CSP
popularity is depicted in both OECD and non-OECD
countries, with a total contingent of countries pushing
towards 20 by 2018.
This year’s forecast reveals a tightening outlook
between the optimistic and pessimistic scenarios, with
a prospective capacity by 2024 of 11 GW to 40 GW,
distributed amongst new markets for which a forecast
is difficult to perform. Many countries are also exploring
CSP in their renewable energy initiatives in the future,
and may contribute further to supporting the global
deployment of CSP technologies:
Figure 2(2): LCOE Forecast Until 2024
0.25
Pessimistic LCOE (UL)
Conservative LCOE (UL)
Optimistic LCOE (UL)
Pessimistic LCOE (LL)
Conservative LCOE (LL)
Optimistic LCOE (LL)
0.20
LCOE (€/kWh)
Upper
0.15
0.103
0.095
0.087
0.10
Lower
limits
0.05
0.041
0.037
0.032
0.00
2012
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2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
CSP Today Markets Report 2014
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Scorecard and Forecast
Americas
Rwanda
Tanzania
Brazil
Mexico
Argentina
Uruguay
Western Asia
Kuwait
Qatar
Oman
Africa
Ethiopia
Kenya
Malawi
Mozambique
Namibia
Asia-Pacific
Peru
Thailand
Figure 3(2): Optimistic Country-Wise Global CSP Capacity Until 2024 (MW)
10,000
9,000
USA
8,000
7,000
Saudi Arabia
6,000
Morocco
South Africa
5,000
4,000
India
China
3,000
Spain
Chile
UAE
Rest of World
Rest of MENA
2,000
1,000
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
*Spain’s capacity has been capped at 2,300 MW. See section 1.1.1.
Figure 4(2): Conservative Country-Wise Global CSP Capacity Until 2024 (MW)
6000
USA
Installed Capacity (MW)
5000
4000
Saudi Arabia
3000
Spain
South Africa
Morocco
2000
India
China
1000
Chile
UAE
Rest of World
Rest of MENA
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
*Spain’s capacity has been capped at 2,300 MW. See section 1.1.1.
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CSP Today Markets Report 2014
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Scorecard and Forecast
Figure 5(2): Pessimistic Country-Wise Global CSP Capacity Until 2024 (MW)
4000
3500
USA
3000
2500
Spain
2000
1500
Saudi Arabia
South Africa
Morocco
India
China
Chile
UAE
Rest of World
Rest of MENA
1000
500
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
*Spain’s capacity has been capped at 2,300 MW. See section 1.1.1.
2.3. Survey Results
This year’s CSP Market Survey received responses
from 243 experts, from various sectors of the industry,
including EPCs, technology providers, suppliers, NGOs,
authorities and financiers. An extensive set of data was
compiled, providing insightful information on both the
development of the forecast and the scorecard models.
Regarding future installed capacity, the survey demonstrated that the majority of industry experts anticipate
6 to 10 GW of CSP power plants to be in operation by
2018. With respect of the results of the forecast shown
in this report, this is in line with the pessimistic and
conservative scenarios with an estimated 6.8 GW and
8.6 GW respectively, meaning the results of the forecast
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are concordant with industry expert estimations. In
the longer term, the next decade reveals a scattered
opinion in the surveyed pool of experts; with evenly
shared opinion from 6 to 20 GW, a feeling which again
lies within the pessimistic and conservative scenarios
presented in this report, with a forecasted 10.7 GW and
18.2 GW respectively by 2023.
Therefore, the industry expert opinion for future CSP
installed capacity for the next 5 and 10 years is mostly
in line with the conservative to pessimistic range
estimated by the forecast presented in this report,
which is a good measure of the accuracy of the forecast
results.
CSP Today Markets Report 2014
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Scorecard and Forecast
Figure 6(2): Cumulative CSP Plant Capacity by 2018
> 50 GW - 2%
31 to 50 GW - 3%
2.8 GW - 2%
21 to 30 GW - 5%
3 to 5 GW - 24%
16 to 20 GW - 11%
11 to 15 GW - 11%
6 to 10 GW - 42%
Figure 7(2): Cumulative CSP Plant Capacity by 2023
2.8 GW - 0%
3 to 5 GW - 6%
> 50 GW - 18%
6 to 10 GW - 20%
31 to 50 GW - 8%
21 to 30 GW - 12%
11 to 15 GW - 19%
16 to 20 GW - 17%
As for the distribution of this future capacity, the survey
questioned experts on the three most promising
markets in the world over the next 5 and 10 years. For
the next 5 years, the survey reveals a strong agreement
that the CSP hotspots will be Saudi Arabia, USA,
China, India, Morocco, South Africa and Spain. This is
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in accordance with the scorecard, which features all
these countries but Spain in the top 7. The reason Spain
has not been included is because the latest legislative
developments have for all intents and purposes led to
the Spanish CSP market being brought to a halt.
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Scorecard and Forecast
Figure 8(2): Most promising CSP markets Until 2018
70
 Highest Installed Capacity
 Second Installed Capacity
 Third Installed Capacity
60
Survey Responses
50
40
30
20
10
Tunisia
Turkey
UAE
Tunisia
Turkey
UAE
USA
Thailand
Spain
South Africa
Saudi Arabia
Qatar
Portugal
Oman
Namibia
Morocco
Mexico
Kuwait
Kenya
Jordan
Thailand
On the longer term - that is, in the next decade to
2023 - a similar outlook is revealed, with a slightly higher
distribution of expert opinions. Indeed, countries such
Italy
Israel
India
Greece
Germany
France
Egypt
China
Chile
Brazil
Australia
Argentina
Algeria
0
as Australia and Chile are seen to gain further share
in the market, while China and India are thought to
become more prominent actors of the industry.
Figure 9(2): Most promising CSP markets Until 2023
60
 Highest Installed Capacity
 Second Installed Capacity
 Third Installed Capacity
50
Survey Responses
40
30
20
10
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CSP Today Markets Report 2014
USA
Spain
South Africa
Saudi Arabia
Qatar
Portugal
Oman
Namibia
Morocco
Mexico
Kuwait
Kenya
Jordan
Italy
Israel
India
Greece
Germany
France
Egypt
China
Chile
Brazil
Australia
Argentina
Algeria
0
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Scorecard and Forecast
The rest of the survey results were primarily used in
aligning the weights given to the most influential
limiting and enabling CSP capacity growth factors.
These weighted factors were then used, over the
forecast time horizon, to scale or abate the power of a
given market’s exponential growth, on both a local and
global basis.
Table 4(2): Limiting and Enabling Factors for CSP Market Growth
Limiting Factors
Enabling Factors
Political and economic instability
High solar resources (DNI)
Lack of definitive CSP incentive structure
Government support
Water scarcity
Increasing energy demand
Difficulty in financing
Ease of financing
Competition with PV
National CSP targets
Complexity of administrative permits procedures
Ease of permitting
Poor grid infrastructure
Local supply of components and materials
Competition with fossil fuels
Stable political and economic environment
Lack of local know-how
High dependence on energy imports
High cost of technology
Low labor cost
Good grid availability
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CSP Today Markets Report 2014
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South Africa
3
South Africa
By Alan Brent
Contents
List of Figures
58
List of Tables
58
Chapter Summary
60
Country Overview
60
3.1. Electricity Market
62
3.1.1. Electricity Consumption
62
3.1.2. Electricity Demand
62
3.1.3. Grid Transmission
62
3.1.4. Market Structure Diagram
85
3.2. CSP Market
65
3.2.1. CSP-Specific Policy
65
3.2.2. CSP Project Profiles
68
3.2.3. Local Content Requirements
68
3.3. Local CSP Ecosystem
68
3.3.1. Key Government Agencies
72
3.3.2. Permitting Agencies
72
3.3.3. Local Consultants and R&D bodies
74
3.3.4. Financing Organizations
74
3.3.5. Developers and EPC Firms
75
3.4. Local Component Supply
76
3.4.1. Pipes
77
3.4.2. Pumps
77
3.4.3. Tracking Devices
78
3.4.4. Receivers
78
3.4.5. Power Blocks
78
3.4.6. Heat Exchangers
78
3.4.7. Raw Material Availability
78
3.4.7.1. Glass
78
3.4.7.2. Steel
78
3.4.7.3. Molten Salt
79
3.5. Alternative CSP Markets
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79
CSP Today Markets Report 2014
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South Africa
3.6. Markets Forecast
82
Conclusion
84
References
85
Acronyms
86
List of Figures
Figure 1(3): Direct Normal Irradiation in South Africa, Lesotho and Swaziland
61
Figure 2(3): Transmission Development Plan 2011 – 2020
63
Figure 3(3): Demand Forecast Comparisons
64
Figure 4(3): Linkages between various plans to address the
integration of distributed electricity generation from IPPs
66
Figure 5(3): Maximum Allocations in Round 3 of the REIPPPP
66
Figure 6(3): First Stage Qualification Criteria for Selection in the Second Stage
67
Figure 7(3): Barriers to Entry of CSP in the South African Market
70
Figure 8(3): Short-term Priority Actions to Address CSP Challenges
71
Figure 9(3): Illustration of the Current and Projected Market Structures
73
Figure 10(3): Typical Project Structure in the South African Context
75
Figure 11(3): Consumption Mix in South Africa (Energy)
79
Figure 12(3): Consumption Mix in South Africa (Electricity)
80
Figure 13(3): Consumption Mix in Industrial Sector (Energy)
80
Figure 14(3): Consumption Mix in Industrial Sector (Electricity)
81
Figure 15(3): Displacement of Fossil Fuel (left) and Solar Boosting (right)
82
Figure 16(3): Installed CSP Capacity in South Africa Until 2024 (MW)
83
Figure 17(3): CSP Cumulative Energy Production in South Africa Until 2024 (TWh)
83
List of Tables
Table 1(3): Drivers and Barriers
62
Table 2(3): CSP Projects in South Africa
69
Table 3(3): Key Government Agencies in South Africa
72
Table 4(3): Permitting Agencies in South Africa
74
Table 5(3): Local Consultants and R&D Bodies
74
Table 6(3): Financing Organizations Operating in South Africa
75
Table 7(3): Developers and EPCs With Interests in the South African Market
76
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CSP Today Markets Report 2014
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South Africa
Chapter Summary
South Africa was ranked number one in the CSP Today
2013 Markets Scorecard. With a potential CSP capacity
of 262 GW to 311 GW in the short and medium term,
according to the University of Stellenbosch’s Centre for
Renewable and Sustainable Energy, and with DNI levels
exceeding 2,900kWh/m2 per year, the South African
CSP market promises a significant contribution to the
country’s coal-dominated energy mix.
The growth of the South African CSP industry will be
further supported by the increase of tariff by 14.6% to
19% per year over the next five years, from April 2013 to
March 2018. The time-of-day tariff introduced this year
will also help promote CSP with storage for generating
energy during peak hours. In addition, the commitment
shown by the government toward CSP, the strong
manufacturing industry and land availability are all
encouraging factors for the development of CSP.
Despite the country’s small target of 1,200 MW of CSP
by 2030, with the national Integrated Resource Plan (IRP)
due to undergo some changes, it is very likely that CSP
will gain a larger foothold in the local energy market. At
the time of writing this report, South Africa had three
CSP projects under construction, totaling 200 MW: two
under development (200 MW) and three in planning
(250 MW), according to the CSP Today Global Tracker.
One of the biggest barriers for CSP development
in South Africa is the uncertainty regarding future
megawatt allocations, given that several changes have
repeatedly occurred in the government’s IRP. Whilst the
first window placed a local content stipulation of 21%
on CSP projects, this was raised to 35% in the second
window for no-storage CSP and 25% for CSP with
storage. For the third window, this has been raised to
45% for no-storage CSP and 40% for CSP with storage.
The third bid window announced in May 2013 introduced a new time-of-day tariff. Under the country’s
Renewable Energy Independent Power Producer
Procurement Program (REIPPPP), tariffs have been
capped for each technology, and according to the
Request for Proposal, CSP has a base tariff of R 1.65/kWh.
A bidder supplying energy during the peak time will get
270% of the base tariff whilst there is no payment for
supplying energy beyond the peak time at night.
Country Overview
South Africa
Solar Resource (average annual sum of DNI): 2,800 kWh/m2/year
Size: 1,220,813 km²
Population (2012): 51.19 million
GDP per capita (2012): US$ 7,507
Installed power capacity: 44,145 GW
Annual electricity consumption: 241.9 TWh
Expected annual electricity demand in 2020: 300 TWh/y (2011)
Electricity Mix by Installed Capacity (2012)
Coal 85.5%
Natural Gas 5.5%
Nuclear 4.3%
Hydro & Pumped Storage 4.7%
Combustible, Renewables and Waste <0.01
Known Energy Resources
Coal, Nuclear, Gas, Biomass, Solar, Wind, Hydro, Ocean
Potential Markets for Industrial CSP Applications
Utility-Scale Electricity Generation (> 50 MW)
Industrial and Commercial Electricity Generation (> 2 MW)
Process Heat (< 500ºC)
Small-Scale Process Heat Applications such as absorption chillers and desalination (< 250ºC)
Industrial Thermochemistry and Fuels (> 750ºC)
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South Africa
Although there is no specific policy driving solar applications in South Africa, there is potential for CSP usage
in agricultural and industrial sectors. In addition, the
existence of a substantial, well-established construction
industry can provide the civil works required for a CSP
plant.
Figure 1(3): Direct Normal Irradiation in South Africa, Lesotho and Swaziland
Source: SolarGIS © 2013 GeoModel Solar s.r.o.
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South Africa
Table 1(3): Drivers and Barriers
Drivers
Excellent solar resource (up to 2900 kWh/m2/annum)
Land availability
Low slopes (1% in places with high DNI)
Large automotive industry
Electricity export capability
Specific commitment from government towards CSP in
the IRP
Good CSP + TES match to demand curve
High dependency on fossil fuels
Large hybridization potential
Planned increase in consumers’ electricity tariff will drive
the mining industry to look for other options such as
solar energy
Huge appetite from lending institutions to finance
renewable energy projects in South Africa
Increasing commitment from the national government,
and its financing institutions, to support CSP development; specifically along the new ‘solar corridor’.
Changes in the bidding pricing structure of the REIPPPP
mark an attempt to favor CSP with large storage. CSP is
seen as cost-competitive with current peaking power
stations, specifically open-cycle gas turbine plants.
Local content possibility of CSP projects are perceived
to be good, and the government target – of 60% – is
deemed possible in the context of the country’s strong
manufacturing capacity.
Other applications of CSP technologies are actively been
investigated, especially ones that can boost coal-fired
power stations, desalination, and thermochemistry.
3.1 Electricity Market
South Africa’s electricity supply industry is dominated
by the state-owned utility Eskom (Eskom, 2013), which
generates about 95% of the country’s electricity,
mainly using coal-fired power plants. Eskom has a total
generation capacity of approximately 44,145 MW, of
which 85.5% comprises coal-fired facilities. Just over
4% of the country’s generating capacity is supplied by
the Koeberg Nuclear Power Station. South Africa also
exports electricity to neighboring countries through the
Southern African Power Pool (SAPP, 2013). The domestic
energy sector is critical to the economy, as the country
relies heavily on its large-scale, energy-intensive mining
industry – what is termed the mineral-energy complex.
South Africa only has small deposits of conventional oil
and natural gas and uses its large coal deposits for most
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Barriers
Water scarcity
Grid connectivity and insufficient capacity
Lengthy permitting process
Strict qualification criteria for REIPPPP
Fossil fuel lobby and competition
CSP high capital cost cannot compete with cheap coal
costs
Monopoly of Eskom
Cap of only 1,200 MW of CSP by 2030 as per the IRP
Natural gas discoveries off the east coast of Africa
of its energy needs. As a result, carbon emission and
intensity levels are relatively high; per capita, among the
highest in the world.
The South African electricity sector falls under the
auspices of the National Energy Regulator of South
Africa (NERSA), which replaced the National Electricity
Regulator in 2005. Eskom is responsible for the transmission and generation of almost all of South Africa’s
electricity. NERSA is promoting private sector participation by encouraging investments from Independent
Power Producers (IPPs), who already account for a small
share of the country’s electricity generation, as well
as by promoting off-grid technologies to meet rural
energy needs.
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South Africa
3.1.1. Electricity Consumption
Statistics reported by South Africa in April 2012 reveal
that the country’s electricity consumption grew
year-on-year by 1.8% in February (2011-2012), while
output rose by 0.5%. The increases were reported in
seven of the nine provinces, with the largest percentage
growth recorded in the Eastern Cape Province (11.2%),
followed by the Northern Cape (8.3%) and Limpopo
(5.4%) provinces.
3.1.2. Electricity Demand
The daily electricity demand in South Africa has a
morning and a more pronounced evening peak
(between 18:00 and 21:00), both in summer and winter.
This characteristic makes CSP with storage a very
attractive technology for generating electricity on a
large scale to supply to the national grid.
To meet generation targets and as a demand-side
measure, electricity rates have increased significantly
– 170% over the last five years – for all sectors, causing
concern among the more energy-intensive industries
as well as low-income households. Eskom applied to
NERSA for a further increase of 16% in the beginning
of 2013, with a further 48% over the next five years, in
order to finance its ZAR 340 billion capacity expansion
program. In the end, and after much stakeholder
consultation, NERSA granted an 8% increase in the tariff,
which, according to Eskom, will place real constraints
on its ability to undertake construction projects of its
own. However, there is much speculation as to whether
large-scale, base-load builds are indeed necessary,
as the economy has slowed down to a GDP growth
of around 2%, which opens the market for a greater
diversity of electricity generating facilities.
3.1.3. Grid Transmission
The South African power grid is not well developed
to accommodate distributed power generation, and
instead relies on centralized power generation at
coalfields. Eskom is therefore revising its Strategic Grid
Plan (SGP) and associated Transmission Development
Plan (TDP) to embrace the transformation of the
electricity market, and especially to accommodate
independent power producers.
Of particular importance for CSP is the strengthening
of the northwest section of the grid, as well as the
northern part to increase the evacuation capacity from
1 GW to 5 GW in the medium term, in what has been
now termed the Solar Corridor (Eskom, 2011).
Figure 2(3): Transmission Development Plan 2011 – 2020
Source: Eskom, 2011
www.csptoday.com
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Figure 3(3): Demand Forecast Comparisons
Demand Forecasts (Comparisons)
70,000
2009 TDP Based on Eskom
Position Forecast
65,000
2010 TDP Eskom Assumed
Forecast (reduced
due to impact of
Economic downturn
60,000
6.0
2010 IRP Range of
Demand Forecasts
5.5
5.0
4.5
55,000
4.0
50,000
3.5
45,000
3.0
40,000
–
–
2.5
35,000
2.0
30,000
1.5
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2010 IRP High Demand (MW)
39,216
40,629
42,027
43,839
45,255
47,124
48,479
51,090
53,276
55,573
57,649
2010 IRP Low Demand (MW)
38,587
39,319
40,002
42,040
41,669
42,666
43,157
44,710
45,815
46,952
47,848
4.0
4.7
3.8
2.6
3.0
3.1
4.5
2.9
3.5
2.3
 2010 TDP Growth (%)
 2009 TDP Demand (MW)
41,333
43,007
44,862
46,427
48,055
51,015
53,344
55,534
57,685
60,155
62,471
 2010 TDP Demand (MW)
38,893
40,447
42,357
43,974
45,134
46,439
47,957
50,123
51,571
53,356
54,600
 2010 IRP Moderate Demand (MW)
38,885
39,956
40,995
42,416
43,436
44,865
45,786
47,870
49,516
51,233
52,719
Source: Source: Eskom, 2011.
www.csptoday.com
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3.1.4. Market Structure Diagram
Electricity
IPP (CSP project)
Generation
license
NERSA
PPA
Regulates
national
tariffs
Electricity
Single buyer office
(ESKOM)
Money
Consumers
Source: CSP Today Markets Report, 2012-2013
3.2. CSP Market
3.2.1. CSP-Specific Policy
The Single Buyer Office (SBO), housed within the System
Market Operator Division of the national utility Eskom,
was established in 2007. The SBO is currently preparing
itself to execute the mandate of the Independent
Power Producer (IPP) procurement process envisaged
in the new generation regulations. Currently, the SBO
consists of a core team, with support from Eskom staff
providing the necessary expertise and complemented
by advisors as required. The SBO deals with all IPP
programs, including historical, formal and unsolicited.
Regional import IPP programs are also being considered
within the scope of inter-governmental memoranda of
understanding. Moreover, the national function of the
SBO is expected to be transferred to the Independent
System and Market Operator (ISMO), and the bill is now
under discussion with various stakeholders.
www.csptoday.com
The following programs fall within the accountability of
the SBO:
Renewable Energy Independent Power Producer
Procurement Programme (REIPPPP), which requires up
to 3,725 MW of renewable energy capacity as specified
in the Integrated Source Plan (IRP) 2010.
Medium-Term Power Purchase Programme, with power
purchase agreements for approximately 400 MW of
cogeneration and generation capacity, which have
been approved and concluded.
Municipality electricity generation and short-term
contracts for security of supply.
Small Renewable IPP Programme, which the DoE has
initiated by releasing a request for information (RFI)
in order to test market appetite for small projects and
assess the readiness of onshore wind, solar PV, biomass,
biogas, or landfill gas projects within the 1 to 5 MW
capacity band.
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The utility-scale CSP market segment is regulated
by the IRP and the REIPPPP; these in turn inform the
national Transmission Development Plan (TDP) and
the Strategic Grid Plan (SGP). This means that the
uptake of utility-scale CSP will be prescribed by the
national government through bid window allocations
in accordance with the capacity of the national grid to
uptake power generation from CSP over time.
Figure 4(3): Linkages Between Various Plans to Address the Integration of Distributed Electricity Generation from IPPs
IRP – Integrated Resource Plan
TDP – Transmission Development Plan
SGP – Strategic Grid Plan
Source: Eskom, 2011
Figure 5(3): Maximum Allocations in Round 3 of the REIPPPP
Landfill gas - 25 MW
Small hydro - 120.7 MW
Biogas - 12.5 MW
Biomas - 60 MW
CSP - 200 MW
Onshore wind - 653.6 MW
Solar PV - 401.3 MW
Source: CSP Today Quarterly Update, June 2013
www.csptoday.com
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The announcement of the third bid window of the
REIPPPP in May 2013 introduced a new time-of-day
tariff. Under the REIPPPP, tariffs have been capped for
each technology. According to the Request for Proposal
(RFP), CSP has a base tariff of R 1.65/kWh. If a bidder
bids a lower tariff, that tariff will be regarded as the
new base tariff for that particular bidder. However, the
tariff must not exceed the RFP base tariff. The bid will
be non-compliant and automatically rejected during
the qualification phase if the price cap is exceeded or if
the bid does not meet the gate-keeping qualification
criteria stipulated in the RFP document issued within
the REIPPPP. The base tariff only applies during the day
and a higher tariff will be applied for supplying energy
during the peak time –in the evening or morning.
According to the RFP, a bidder supplying energy during
the peak time will get 240% of the base tariff, whilst
there is no payment for supplying energy at night. This
means that the likely allocation for CSP will be ZAR 1.65/
kWh during standard times – from 05h00 until 17h00
and from 21h00 to 22h00 – and ZAR 3.96/kWh during
peak times – from 17h00 to 21h00 – and ZAR 0/kWh for
all other times.
peak times. It should be noted that CSP has a potential
to provide energy during the peak time, but incentives
are critical to promote such behavior.
Under the previous windows of the REIPPPP, bidders for
CSP projects had to offer a tariff below the ZAR 2.85/
kWh cap, with actual average tariffs offered at ZAR 2.69/
kWh for Round 1, and ZAR 2.51/kWh for Round 2.
The selection of projects by the government is
pursued using two main criteria, namely price (70%)
and economic development (30%); besides all the
other qualification criteria that form part of a first stage
screening (see Figure 6(3)). The location of projects with
respect to resource potential and site-specific attributes
directly impacts the price; however, as shown by Bid
Window 1 and Bid Window 2, having a site with the
best resource profile does not imply that the project will
receive approval. Financing structures and bankability
of projects have significant impact on projects price
levels, which means that projects with the best resource
profile might be outranked by projects with a better
financing structures, but a lower energy-generation
potential.
The intention for this provision of the RFP is to
encourage CSP with storage to generate energy during
Figure 6(3): First Stage Qualification Criteria for Selection in the Second Stage
• Project participants: equity participants,
Structure of the Project
Legal Criteria and
Evaluation
Land Acquisition and
Land Use Criteria and
Evaluation
Environmental
Consent Criteria and
Evaluation
lenders, contractors, equipment suppliers,
black enterprises and local community
members
• Fully developed shareholders agreement,
acceptance of project agreements (i.e.
PPA, Implementation Agreement, Direct
Agreement etc), Statements by Members,
Key subcontracts
• Title deeds, notarial leases, land use
consents including consents for
connection works
• Environmental consents namely a positive
Record of Decision from the Department
of Environmental Affairs
Financial Criteria and
Evaluation
Technical Criteria and
Evaluation
Economic
development Criteria
and Evaluation
Submission of bid
Guarantee
• Price (full indexation and partial
indexation), financial standing of project
sponsors, robustness and deliverability of
funding proposal, robustness of financial
models
• Wind max 140MW, PV 75 MW, CSP 100MW.
Proven technology, energy resource
availability, generation forecast, project
schedule, cost and timing of grid connection,
deliverability of project, water consumption
• 40% SA entity participation: Job
creation, local content, black ownership
including local communities, preferential
procurement, enterprise development,
socio-economic development
• Bid submission: R100,000 per MW,
Preferred Bidder status: R200,000 per MW,
Development fee: 1% of total project cost
Source: Standard Bank, 2013
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All of the above means that the distribution of
utility-scale renewable energy projects throughout
the country cannot be predicted on an annual basis
with any great certainty. In other words, if the IRP2010
schedule is strictly followed, it is unknown how many
of the various technologies’ installed capacities will be
allocated on an annual basis. The potential for developing local capabilities that require significant capital
investments, however, is highly dependent on the
investors’ expectations from the future development
of the market and more specifically on the size of the
market and market certainty. It will also depend on
whether the government is providing assurance of
sustainable procurement of certain installed capacities
on an annual basis.
3.2.2. CSP Project Profiles
At the time of writing this report, South Africa had three
CSP projects under construction, totaling 200 MW: two
under development (200 MW), and three in planning
(250 MW), according to the CSP Today Global Tracker.
Table 2(3) showcases all CSP projects in South Africa at
various stages of development.
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Table 2(3): CSP Projects in South Africa*
Title
MWe
Technology
Status
State/Region
Developer/s
Storage
Capacity
(hours)
South Africa 5
GW Solar Park
(Phase i)
5,000
TBA (will
include PV
and CSP)
Announced
Northern Cape
Province
Central Energy Fund
Illangalethu
100
Parabolic
Trough
Announced
Northern Cape
Province
Emvelo
TBC
Ennex Dish
Stirling
20
Dish
Announced
Northern Cape
Province
Ennex
Kumba CSP
100
Parabolic
Trough
Planning
Northern Cape
Province
Anglo-American/
Kumba
TBC
Metsimatala
Solar Farm
50
Fresnel
Planning
Northern Cape
Province
Afri-Devo
TBC
!Xun Khwe
Solar Farm
100
Fresnel
Planning
Northern Cape
Province
Afri-Devo / Ample
Solar
TBC
Eskom
100
Tower
Development
Upington
Eskom
Yes (hours
TBC)
Humansrus
CSP Project
100
Tower
Development
Upington
SolarReserve
3
Khi Solar One
50
Tower
Construction
Upington
Abengoa/ Industrial
Development
Corporation
2
KaXu Solar One 100
Parabolic
Trough
Construction
Bokpoort
Abengoa/Industrial
Development
Corporation
3
Bokpoort
Parabolic
Trough
Construction
Northern Cape
Province
ACWA/ Solafrica
9
50
*Projects qualified under the REIPPPP are highlighted in yellow
Source: CSP Today Global Tracker, August 2013
The three non-Eskom CSP projects that are in
construction are required to be fully operational
(certificate of delivery) before the end of 2018, although
commissioning of the first 150 MW is expected in 2017.
The storage capacities range from 2 hours (Khi) and 3
hours (KaXu) to 9 hours (Bokpoort).
www.csptoday.com
3.2.3. Local Content Requirements
Whilst the first window placed a local content stipulation of 21% on CSP projects, this was raised to 35% in
the second window for no-storage CSP, and 25% for CSP
with storage. For the third window, this has been raised
to 45% and 40%, respectively. In terms of local content,
or economic development requirements, the most
important barriers to entry as determined from various
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stakeholders are the following:
Uncertainty of rollout in MW capacity allocated to CSP
– with changes in the IRP due.
The market size for CSP is too small.
Inability to compete with the experience of international manufacturers.
Raw material costs are too high.
Figure 7(3): Barriers to Entry of CSP in the South African Market
Uncertainty CSP (18)
SADC market size (17)
SA market size (17)
R&D support (16)
Skilled labour (17)
No capital access (17)
Lack of CSP info. (16)
Int. relationships (17)
Int. experience (17)
Labour (15)
Raw material (16)
 Not important  Minor importance  Quite important  Important  Very important
Source: Ernst & Young, enolcon, 2013
www.csptoday.com
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The short-term priority actions needed to address these
challenges are outlined below.
Figure 8(3): Short-term Priority Actions to Address CSP Challenges
Stakeholder
Area
Key implementation initiative
Priority
doE Eskom
National
Treasury
 RCIPP
procurement
programme
 Review of MW allocation for CSP with storage in the context
of affordability of peak power and job creation potential and
considering its value proposition
 Consider a two tier tariff with a premium being paid for energy at
peak time
1
doE dTI
National
Treasury
 RCIPP
procurement
programme
 Review of impact on tariff price of increasing local content
requirements and assess associated long term socio-economic
benefits
1
dTI
IdC
 CSP
framework
 Confirm CSP component focus areas (e.g. mounting structures,
piping, flat mirrors)
2
National
Treasury
doE
dST
 R&D
 Review feasibility of a long term R&D funding profile and dedicated
R&D funding for the CSP component focus areas
SANEdI
 R&D
 Establish R&D specific industry platform to identify and achieve
common goals between industry and research institutes
2
SASTELA
 Marketing
 Focus international outreach and promotion, including
international cooperation structures
2
Industry
dHET
SETA
 Education
and training
 Establish CSP specific practical training programmes for workers
currently trained in coal fired power plants (e.g. welders from Kusile
and Medupi)
2
2
Source: Ernst & Young, enolcon, 2013
www.csptoday.com
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3.3. Local CSP Ecosystem
3.3.1. Key Government Agencies
Table 3(3): Key Government Agencies in South Africa
Name
Roles and Responsibilities
Department of Energy (DoE)
Formulates national policies and related legislation
National Energy Regulator of South Africa (NERSA)
Regulates and enforces laws pertaining to the energy
sector
Department of Public Enterprises (DPE)
Responsible for state-owned assets, including the
national utility, Eskom
Department of Finance
Formulates fiscal policy and allocations to state-funded
developments
National Treasury
Management of state funds
Department of Trade and Industry (DTI)
Develops local industries, and control imports and
exports
Other national departments, such as Transport, Land
Affairs, Mineral Resources, etc.
Develops appropriate infrastructure for economic
development, allocation of land, etc.
Presidential Infrastructure Coordinating Commission
Formulation and implementation of the 17 Strategic
Integrated Projects, especially SIPs 8, 9 and 10 in terms
of green energy and electricity transmission and
distribution for all
Eskom
Electric power transmission and distribution at a
national level
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Figure 9(3): Illustration of the Current and Projected Market Structures
ESKOM HOLDINGS SOC LTD
PRODUCTION
TRANSMISSION
RETAIL
KSACS
Wires
Gn1...
DX
Gn2...
Imports
MUNICS
System Operator
National Control
Wholesaler
IPP’s
Single Buyer
RE-IPP
ESKOM
Generation
ESKOM TX
Transmission
‘wires’
ESKOM DX
Distribution
DX
Gn1...
Gn2...
Imports
ISMO-TX
agreement
ISMO SOC
System Operator
KSACS
National Control
Wholesaler
MUNICS
IPP’s
Single Buyer
RE-IPP
Wholesale tariff
Source: SAPVIA, 2013
www.csptoday.com
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3.3.2. Permitting Agencies
Table 4(3): Permitting Agencies in South Africa
Name
Role
Department of Environmental Affairs (DEA)
Strategic Environmental Assessments, authorization of
EIAs, determination of water allocations
Provincial Governments
Approvals of economic developments, especially
infrastructure and land rezoning
District and local municipalities
Approvals of economic developments, especially
infrastructure and land rezoning, and distribution of the
electricity
3.3.3. Local Consultants and R&D bodies
Table 5(3): Local Consultants and R&D Bodies
Name
Role
Sastela
Industry lobby group
GeoSun
Solar resource measurements
South African National Energy Development Institute
(SANEDI)
Coordination and cooperation of CSP R&D
Technology Innovation Agency (TIA)
Commercialization of CSP R&D/Technology
Council for Scientific and Industrial Research (CSIR)
Contract R&D
Universities, such as Stellenbosch University, through
the Centre for Renewable and Sustainable Energy
Studies (CRSES) and the Solar Thermal Energy Research
Group (STERG)
Contract R&D, pre-feasibility studies and skills
development
South African Renewable Energy Technology Centre
(SARETEC)
Skill development
EPC companies and project developers such as Emvelo,
Kathu Solar Consortium and Solafrica Thermal Energy
Plant construction, commissioning and operation
Consultants, such as Ernst & Young, enolcon, aurecon,
and others
Feasibility studies
www.csptoday.com
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3.3.4. Financing Organizations
Table 6(3): Financing Organizations Operating in South Africa
Name
Role
Previous Renewable Energy
Projects
Industrial Development Corporation
(IDC)
State-owned funding agency
All current CSP projects
Development Bank of Southern Africa
(DBSA)
State-owned funding agency
All current CSP projects
Private banks, such as Investec and Rand
Merchant Bank
Provides debt-funding for projects
Bokpoort, KaXu
The typical project structures, within the South African
financial governance framework, are summarized
below, as well as the typical project headline terms.
Local banks have also introduced the issuing of debt
capital market bonds as a means to finance utility-scale
projects.
Figure 10(3): Typical Project Structure in the South African Context
Key Sponsor
30-60%
Secondary
Sponsor
BEE Entity
12-40%
0-25%
Community
Trust
2.5-5%
Investment
Holdco
Offtaker
Lenders
Shoreholder
Agreement
Eskom
ProjectCo
NERSA
EPC Contractor
Subcontracts
Regulation
O&M Contractor
Insurance
Subcontract
Turbine/Panel
suppliers
Construction
Companies
Turbine Supplier
lease
Agreement
Source: Standard Bank, 2013
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BEE refers to a Black Economic Empowerment entity,
which manifests in a black-owned investment entity.
For example, for the Bokpoort CSP IPP, the Lereko Group
was instrumental in raising the necessary funding.
Lereko raises the necessary capital from a network of
black-owned enterprises. In the case of Bokpoort, the
community trust is in the form of Solafrica Community
Investment Company, which manages the shareholding
of the community that inhabits the land around the
developed project.
3.3.5. Developers and EPC Firms
There is a substantial, well-established construction
industry in South Africa, which is able to provide the
civil works required for a CSP plant. The similarities in
construction between power projects being built in
South Africa – Medupi and Kusile – and CSP projects
provide the evidence for this. Major local construction
companies include Murray & Roberts, Group 5, Aveng
Group, Basil Read, Crowie and WBHO. Often, the
construction companies have local partners or subcontractors which they use if unable to provide the entire
service themselves. Several construction companies
view CSP as a good business opportunity and often as
more valuable compared with alternative renewable
energy technologies. This is because CSP provides
a larger amount of civil works due to the significant
amount of concrete and steel structures required for a
CSP plant, compared with an onshore wind or solar PV
plant.
Table 7(3): Developers and EPCs With Interests in the South African Market
Previous Renewable Energy Projects in
South Africa
Company
Roles and Responsibilities
Abengoa Solar
Subsidiary of Abengoa. The
company designs, finances,
constructs, and operates solar
power stations.
Khi (100 MW) and Kaxu (50 MW) CSP projects
ACWA
ACWA Power is a Saudi Arabiabased developer. Owner and
operator of independent water
& power projects structured on a
concession or utility outsourcing
contract model.
Bokpoort CSP (50 MW)
Afri-Devo
Afri-Devo Pty (Ltd) is a fully blackowned construction and property
development company based in
Kimberley, Northern Cape.
!Xun Khwe Solar Farm and Metsimatala Solar
Farm
Areva
Solar power technology developer
focusing on Linear Fresnel
!Xun Khwe Solar Farm and Metsimatala Solar
Farm
BrightSource
American company that designs,
builds, finances and operates
utility-scale solar power plants.
Crowie Concessions
South African construction and
development company
Bokpoort (50 MW)
www.csptoday.com
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Emvelo
Independent solar power company. Illangalethu CSP project (100 MW)
Develops, owns, operates and
maintains utility scale concentrating solar thermal power plants Ennex
Technology developer focusing on
Dish Stirling
Ennex Dish Stirling project (20 MW)
Industrial Development
Corporation
Government-owned institution
that promotes economic growth
and industrial development in
South Africa
Khi (100 MW) and Kaxu (50 MW) CSP projects
Kumba Iron Ore
South Africa’s largest iron ore
mining company. Operator and
developer of Kumba Solar Park.
Kumba Solar Park (100 MW)
Ripasso
Technology developer focusing on
dish Stirling
30 kW Stirling dish modules in Upington
Solafrica Thermal Energy
South African energy development
company and independent power
producer; Co-developer of the
Bokpoort CSP project
Bokpoort (50 MW)
SolarReserve
Developer, EPC, owner of solar
projects
Humansrus CSP project (100 MW)
Source: CSP Today Global Tracker, August 2013
3.4. Local Component Supply
An overview of CSP components available locally in
South Africa is provided below. The current potential
capabilities and capacities for supplying the CSP
industry have been considered in terms of:
Piping industry
Construction industry
Pump suppliers
Tracking device suppliers
Heat exchange suppliers
Molten salt suppliers
Receiver suppliers
Power block component suppliers
Glass
Steel
Molten salt
3.4.1. Pipes
Piping in South Africa is mainly supplied to the mining,
logistics, petrochemical, building and construction,
engineering, manufacturing, energy and power, water
and automotive industries.
The piping in CSP plants consists of both low and high
pressure pipes. The high performance alloy material
required for the high pressure pumps can be supplied
by only three companies globally. The type of piping
required for CSP projects will depend on the design of
the plant and could be:
Spiral welded pipes – used for example on parabolic
troughs; or
Seamless pipes.
A number of local companies focus only on spiral pipes,
for example, for use in the transportation of water. The
specifications for these pipes are different to that of CSP.
These companies typically secure large infrastructure
www.csptoday.com
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contracts which tie up capacity and the products are
charged at a premium as heavier tubing and additional
processes are required post welding. There is currently
a high demand for these products; therefore, there is
less incentive to supply the CSP market, which requires
bespoke piping products. The thin-walled piping
(center pipe/torque tube) required in parabolic troughs
is an unusual product in the South African market and
requires special engineering to meet the high tolerances required in CSP designs.
3.4.2. Pumps
Large pumps are mainly used across the petrochemical,
gas and mine industries. Feed water pumps are not
currently produced in South Africa due, in part, to the
importance of reliability of the pumps, which adds
complexity. The feed water pumps for the currently
constructed coal-fired power stations – Medupi and
Kusile – are imported. In CSP, specialized pumps that are
capable of pumping high temperature and corrosive
fluids are necessary, which, in turn, are fabricated with
highly specialized materials. Thus, in summary, no capacity
currently exists, and it is unlikely to be established in
future, due to the technical complexity of the pumps.
3.4.3. Tracking Devices
Tracking devices allow the mirrors to track the sun.
Reutech is a South African defense company that
supplies tracking devices to other industries. The
trackers were developed in Australia and are now
produced locally by Reutech, which has built up its
expertise in tracking devices through the supply of
trackers to the mining industry, where accuracy is
essential. Reutech has won a contract to supply CSP
trackers for the first bidding round. These trackers were
qualified by an independent engineering firm.
3.4.4. Receivers
There is currently no local capability for the production
of receivers, as it is a high proprietary technology. The
receiver would thus have to be imported and the local
content would include logistics and installation.
3.4.5. Power Blocks
There are similarities between the power block components of the Medupi and Kusile power plants and the
power block components in a CSP plant. Alstrom, in
conjunction with Actom and Hitachi, are providing
the power block turbines and boilers for the Medupi
and Kusile power stations. A 50% local content of the
turbine island – turbine, generator and housing – was
achieved, and the same is possible for CSP projects.
www.csptoday.com
Hitachi Power Africa is currently building twelve steam
generators for Eskom using the design and specifications provided by Hitachi Power Europe. Siemens no
longer provides turnkey EPC services, but still supplies
components to the CSP industry. The majority of
components would thus have to be imported.
3.4.6. Heat Exchangers
Heat exchangers are currently sourced internationally.
The localization of heat exchangers can be achieved
through logistics, installation, insulation and after-sales
support.
3.4.7. Raw Material Availability
3.4.7.1. Glass
Local glass companies produce glass for the building
and automotive industries. Demand for locally
produced glass has reduced due to an economic
slowdown, which has affected these industries, and
prompted an increase in the volume of competitively
priced imported glass. This has resulted in significant
local spare capacity for the production of low-iron glass
and mirrors. Nevertheless, it is a challenge for local
companies to supply low-iron glass at a competitive
price, particularly with the volatility in the exchange
rate. The high iron content of raw materials found in
South Africa requires additional iron extraction costs,
which international players may not be subject to. A
further reason for the high price of supply in South
Africa is the lack of demand in the local market,
resulting in the inability to benefit from economies of
scale. Specifically, there is no local capability to bend
glass and silver bent glass to the specifications required
for parabolic troughs due to a lack of local demand.
PFG is the only local company with the ability to
produce low-iron float glass and silver flat mirrors for
the power tower and linear Fresnel applications on
a commercial scale. It has some experience in the
successful manufacture of low-iron glass for the PV and
solar water heater industries.
3.4.7.2. Steel
Steel is produced locally by Arcelor-Mittal and Evraz
Highveld Steel, and these players sell 80% to 90% of
steel produced to the local market. The demand for
steel in South Africa is expected to track the current
economic trend of a slow but modest recovery. The
current lack of demand has resulted in overcapacity
in the industry. EPC contractors typically source the
majority of their steel requirements from local steel
merchants fabricated to the required specifications.
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3.4.7.3 Molten Salt
For molten salt, the only local aspect is providing the
logical solution for delivery of the salt to sites. The
logistics are complex as it requires 400 tons daily of salt
delivery.
better solar resource than Europe and the industries
described exist in South Africa, the penetration of solar
process heat technologies into these industries in South
Africa can be expected to be comparable or better with
suitable support-initiatives.
3.5. Alternative CSP Markets Food, wine and beverage, paper, textile and automotive
industries all exist in South Africa. They can be targeted
for solar process heat in the same way as Europe.
Unfortunately, though, these sectors form a much
smaller fraction of energy demand in South Africa than
in Europe. Figures 11(3), 12(3), 13(3) and 14(3) show
that the industrial sector comprises 41% of energy
use, compared with the 30% of European energy use.
Within the industrial sector, however, mining, iron
and steel, non-ferrous metals and non-metal minerals
together consume 59% of energy and 66% of electricity.
Although policy has not driven solar resource applications in agricultural and industrial sectors, these sectors
have seen the benefits of applying the resource. For
example, in space heating for factories; steam generation for production processes; drying applications; and
desalination.
Vannoni et al. (2008) have concluded that solar thermal
could provide the industrial sector with 3% to 4% of its
heat demand in Europe. Given that South Africa has a
Figure 11(3): Consumption Mix in South Africa (Energy)
Total Energy
Non-specific (Other) - 3.55%
Residential - 18.58%
Industry Sector - 41.34%
Commerce and Public Services - 7.35%
Agriculture - 2.67%
Transport Sector - 26.51%
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Figure 12(3): Consumption Mix in South Africa (Electricity)
Electricty
Non-specific (Other) - 12.26%
Residential - 17.24%
Industry Sector - 52.70%
Commerce and Public Services - 12.64%
Agriculture - 2.57%
Transport Sector - 2.59%
Figure 13(3): Consumption Mix in Industrial Sector (Energy)
Total Energy in Industrial Sector
Non-Ferrous Metals - 6.05%
Chemical and Petrochemical - 12.79%
Non-Metallic Minerals - 6.75%
Machinery - 0.21%
Transport Equipment - 0.03%
Mining and Quarrying - 18.46%
Food and Tobacco - 0.34%
Paper Pulp and Print - 0.78%
Wood and Wood Products - 0.10%
Construction - 1.49%
Iron and Steel - 27.56%
Textile and Leather - 0.17%
Non-specific (Industry) - 25.28%
Source: Department of Minerals and Energy, 2006
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Figure 14(3): Consumption Mix in Industrial Sector (Electricity)
Electricty
Non-Ferrous Metals - 16.49%
Non-Metallic Minerals - 2.30%
Transport Equipment - 0.08%
Machinery - 0.04%
Mining and Quarrying - 27.88%
Chemical and Petrochemical - 8.92%
Food and Tobacco - 0.67%
Paper Pulp and Print - 1.55%
Iron and Steel - 18.88%
Wood and Wood Products - 0.26%
Construction - 0.05%
Textile and Leather - 0.46%
Non-specific (Industry) - 22.42%
Source: Department of Minerals and Energy, 2006
Here, the greatest contribution that could be made
by solar industrial process heat would probably be
provided by parabolic troughs - firstly, by driving double
effect absorption chillers for mining ventilation, and
secondly, by providing process steam in the chemical
and petrochemical industries, as well as other industries. Air conditioning of commercial buildings may
require single-effect absorption chillers with stationary
collectors, as the roof may not be ideal for parabolic
troughs. A small linear Fresnel would be ideal, however,
driving a double effect absorption chiller. The use of
solar collectors to drive large-scale thermal desalination
plants, such as multi-effect desalination or multi-stage
flash, would provide a solution to both mine acid
drainage and fresh water at mines.
A growing interest has also been shown towards the
steam augmentation of conventional fossil fuel fired
thermal power stations, and other industrial coal boilers.
Solar steam augmentation can be used to increase a
conventional plant’s electricity production or it can be
used to reduce the amount of fossil fuel required (see
Figure 15(3)). Either way would lead to the reduction in
the carbon footprint of the cumulative production of
electricity.
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Figure 15(3): Displacement of Fossil Fuel (left) and Solar Boosting (right)
Source: Rojas et al., 2011
Solar steam augmentation is supported by two
economic benefits. As the power block and infrastructure of conventional power stations are already in
place, the capital costs are drastically reduced. This, and
the accompanying reduced risk, lead to lower barriers
for capital acquisition. Therefore, steam augmentation
plants can reach economic feasibility earlier than standalone CSP systems (Turchi et al., 2011). It is worth noting
that the manufacture and installation of collectors for
solar industrial process heat is an industry in its own
right; one that meets government imperatives of
labor-intensive employment, climate change mitigation
and energy security.
3.6. Market Forecast
With a potential CSP capacity of 262 GW to 311 GW in
the short and medium term, according to the University
of Stellenbosch’s Center for Renewable and Sustainable
Energy, and with DNI levels exceeding 2,900kWh/m2/
year (average 2,800 kWh/km2/year), the South African
CSP market promises a great contribution to the
country’s coal-dominated energy mix. The growth of
the domestic CSP industry will be further supported
by the increase of tariff by 14.6% to 19% per year over
the next five years, from April 2013 to March 2018.
The time-of-day tariff introduced this year will also
help promote CSP with storage, for generating energy
during peak hours.
energy is principally produced from conventional power,
mostly oil (19%), and coal (67%), of which the country
has large deposits (EIA, 2013). In light of the relatively
high emissions per capita of the country, the following
new CSP capacity has been, or will be, allocated:
200 MW in Window 3 of the REIPPP
100 MW to Eskom Tower (tender to be released by end
of 2013)
A target of 1,200 MW of CSP is expected by 2030
The pessimistic scenario shown below highlights this
situation, where in the case of no major changes in
the CSP-related conjuncture, reaching the target of
1,200 MW of CSP will not occur prior to 2030. Under
more favorable conditions, however, the local factors
associated with this market suggest that the capacity
could easily exceed targets, be it supported by policy
makers or new allocations.
With South Africa’s 5 GW Solar Park in focus, and its
1000 MW of solar power capacity expected by 2018
(shared between PV and CSP), the optimistic scenario
presented below may very well be realized. The scenario
is relatively close to Ernst & Young’s Enolcon cumulative
installed capacity outlook to 2025, which reveals a
possible 6 GW of capacity, relatively close to the 5.2 GW
predicted by 2024 (if the optimistic scenario is extrapolated to 2025).
Energy is a critical aspect of South Africa’s industry,
and consequently to the economy. Unfortunately, this
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Figure 16(3): Installed CSP Capacity in South Africa Until 2024 (MW)
6,000
5,248
Optimistic
5,000
Conservative
Pessimistic
4,000
3,000
2,215
2,000
930
1,000
0
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Figure 17(3): CSP Cumulative Energy Production in South Africa Until 2024 (TWh)
140
122.7
Optimistic
120
Conservative
Pessimistic
100
80
65.6
60
40
34.2
20
0
2006
2008
www.csptoday.com
2010
2012
2014
2016
2018
2020
2022
2024
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Conclusion
South Africa is regarded as one of the most promising
CSP markets. Although the country’s CSP target of 1,200
MW by 2030 is not as grand as targets in markets such
as Morocco and Saudi Arabia, the growing number
of projects currently in construction, excellent solar
resources, urgent need for new energy sources and
strong supportive local industry all promote favorable
development conditions for CSP. The primary barriers
which need to be addressed when entering this
market is the uncertainty of the rollout in MW capacity
allocated to CSP – with changes in the IRP due and the
relatively small market size of CSP. However, with the
IRP due to undergo some changes, there is a chance
that CSP will gain a larger foothold in the South African
energy market.
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References
CSP Today, 2013. CSP Today Quarterly Update: June 2013 Edition. Available through: <http://social.csptoday.com/
tracker/quarterly-updates> [Accessed 27 July 2013].
Ernst & Young, 2013. Assessment of the localisation, industrialisation and job creation potential of CSP infrastructure
projects in South Africa. Prepared for SASTELA, GIZ and the DTI. Pretoria, South Africa.
Eskom, 2013. Company Information. Available through: <http://www.eskom.co.za/c/article/223/company-information/> [Accessed 24 July 2013].
Eskom, 2011. Transmission Grid. Transmission Development Plan 2011-2020 & Generation Connection Capacity
Assessment. Available through: <http://www.eskom.co.za/content/2011_20TDP1.pdf> [Accessed 27 July 2013].
South African Photovoltaic Industry Association, 2013. Policy of Solar PV in South Africa. Renewable Energy Policy
Module. Stellenbosch University.
South African Power Pool, 2013. Vision and Objectives. Available through: <http://www.sapp.co.zw/>. [Accessed 24
July 2013].
Standard Bank, 2013. South Africa Renewable Energy. IPP Procurement Programme Renewable Energy Policy
Module. Stellenbosch University.
Turchi, C., Burkhardt, J., Heath, G., 2010. Life Cycle Assessment of a Parabolic Trough Concentrating Solar Power Plant
and the Impacts of Key Design Alternatives. Environmental Science & Technology. Available through: <http://pubs.
acs.org/doi/abs/10.1021/es1033266>. [Accessed 24 July 2013].
Vannoni, C., Battisti, R., and Drigo, S., 2008. Potential for Solar Heat in Industrial Processes. Booklet IEA SHC Task 33 and
SolarPACES. CIEMAT, Madrid, Spain.
www.csptoday.com
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Acronyms
ACRONYM
DEFINITION
CSIR
Council for Scientific and Industrial Research
CRSES
Centre for Renewable and Sustainable Energy Studies
DBSA
Development Bank of Southern Africa
DEA
Department of Environmental Affairs
DPE
Department of Public Enterprises
DTI
Department of Trade and Industry
ISMO
Independent System and Market Operator
NERSA
National Energy Regulator of South Africa
REIPPPP
Renewable Energy Independent Power Producer Procurement Programme
RFI
Request for Information
SANEDI
South Africa National Energy Development Institute
SARETEC
South African Renewable Energy Technology Centre
SAPP
South African Power Pool
SAPVIA
South African Photovoltaic Industry Association
SBO
Single Buyer Office
SGP
Strategic Grid Plan
STERG
Solar Thermal Energy Research Group
TDP
Transmission Development Plan
TIA
Technology Innovation Agency
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4
Kingdom of Saudi Arabia
By Marco Poliafico
Contents
List of Figures
87
List of Tables
87
Chapter Summary
89
Country Overview
89
4.1. Electricity Market
91
4.1.1. Electricity Consumption
91
4.1.2. Grid Transmission
92
4.1.3. Electricity Demand
93
4.1.4. Market Structure Diagram
95
4.2. CSP Market
95
4.2.1. Local Content Requirements
100
4.2.2. Solar Resource Forecasting
101
4.2.3. CSP Project Profiles and Time Frames
101
4.3.1. Local CSP Ecosystem
102
4.3.1. Key Government Agencies
103
4.3.2. Independent Water and Power Producers (IWPP)
104
4.3.3. Permitting Agencies
105
4.3.4. Local Consultants and R&D bodies
106
4.3.5. Financing Organizations
107
4.3.6. Utilities and Transmission Grid Operators
108
4.3.7. Developers and EPC and Engineering Companies
109
4.4.1. Supply of Local Components
114
4.4.2. Raw Material Availability
113
4.5. Alternative CSP Markets
114
4.5.1. Desalination
114
4.5.2. Enhanced Oil Recovery
115
4.6. Market Forecast
115
Conclusion
117
References
118
Acronyms
121
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List of Figures
Figure 1(4): Direct Normal Irradiation in Saudi Arabia
90
Figure 2(4): The GCC Grid Interconnection Project
93
Figure 3(4): Electricity Demand in Saudi Arabia by Sector
94
Figure 4(4): Saudi Arabia’s Oil Balance on a Business-as-Usual Trajectory
96
Figure 5(4): Current Indications for CSP and PV Allocations in Saudi Arabia
98
Figure 6(4): Installed CSP Capacity in Saudi Arabia Until 2024 (MW)
116
Figure 7(4): CSP Cumulative Energy Production in Saudi Arabia Until 2024 (TWh)
117
List of Tables
Table 1(4): Drivers and Barriers
90
Table 2(4): Competitive Procurement Process Requirements
99
Table 3(4): Local Content Requirements Outlined for the Introductory Round of the CPP
100
Table 4(4): Ministries and Government Agencies in Saudi Arabia
103
Table 5(4): Utility Companies in Saudi Arabia
104
Table 6(4): Permitting and Environmental Assessment Agencies Operative in Saudi Arabia
106
Table 7(4): Consultants and R&D Bodies Operative in Saudi Arabia
106
Table 8(4): Main Funding Institutions and Banks Operative in Saudi Arabia
107
Table 9(4): Utility Companies in Saudi Arabia
108
Table 10(4): Developers, EPCs and Engineering Companies Operating in Saudi Arabia
109
Table 11(4): Locally Available CSP Components Available Locally in Saudi Arabia
111
Table 12(4): CSP Raw Material Suppliers in Saudi Arabia
114
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Chapter Summary
Based on the CSP Today 2013 Markets Scorecard, Saudi
Arabia is ranked as the second most-promising CSP
market for future development, only after South Africa.
With a CSP target of 25 GW by 2032, the kingdom will
need to deploy at least 1.35 GW of CSP capacity per year
to meet its objective.
Saudi Arabia has the highest per-capita oil consumption
in the world, and in 2011, less than 1% of the energy
generated was sourced from renewable technologies.
In 2010, the King Abdullah City of Atomic and
Renewable Energy (K.A.CARE) was established to lead
the development of the kingdom’s renewable energy
strategy. In May 2012, Saudi Arabia announced a
national energy target of 25 GW installed CSP capacity
by 2032, becoming one of the most ambitious players
in the CSP arena, and in February 2013, the Competitive
Procurement Process (CPP) was launched by K.A.CARE.
Although there is no CSP-specific framework or renewable
energy legislation currently in place, it is expected that a
decision will be made following the second procurement
round, which is likely to take place in early 2015 – with
feedback that the initial timeframe outlined by K.A.CARE
has been delayed. The first round of the CPP has allocated
900 MW to CSP, and the second round 1.2 GW. However,
these figures may be revised as the program progresses.
Saudi Arabia’s ambitious renewable energy program
represents an attractive opportunity for international
CSP players and is likely to have a positive effect on
the industry in general. The target set by the kingdom
potentially opens the doors for scaling up the
production of components and identifying solutions
along the whole value chain.The particular context
in which projects will be developed features very
challenging environmental factors like dust and temperature that will require ad-hoc solutions to optimize the
technical performance of many components. On the
other hand, the lack of a stable regulatory framework
represents a serious risk factor for developers.CSP
can provide a good source of energy for seawater
desalination in Saudi Arabia, considering the intensive
energy consumption of the process. The kingdom has
already announced it would be investing US$ 11 billion
in desalination over the next eight years, which will
include building solar-powered stations. In addition,
enhanced oil recovery represents another promising
application for CSP in Saudi Arabia, considering the
forecasted increase in global oil and gas consumption.
Country Overview
Saudi Arabia
Solar Resource (average annual sum of DNI):
2,400 kWh/m²/year
Size:2,149,690 km²
Population (2012): 28.29 million
GDP per capita (2012): US$ 20,777
Installed power capacity: 51.2 GW
Annual electricity consumption: 231 TWh
Expected annual electricity demand in 2020:
383 TWh
Electricity Mix by Installed Capacity (2012)
Oil 65%
Natural Gas 35%
Known Energy Resources
Oil, Gas, Solar, Nuclear
Potential Markets for Industrial CSP Applications
Desalination, Enhanced Oil Recovery
Cooling Load for Air-Conditioning
Process Heat
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Figure 1(4): Direct Normal Irradiation in Saudi Arabia
Source: SolarGIS © 2013 GeoModel Solar s.r.o.
Table 1(4): Drivers and Barriers
Drivers
Barriers
Urgent need to displace fossil fuels burnt for domestic
consumption with alternative energy sources to
save indigenous oil and natural gas for higher value
applications and export
Lack of knowledge of solar energy and renewable
energy in general among most people (misperceptions)
“Hunger” for industrialization and development of local
manufacturing expertise
Lack of policy framework (although it is being set up)
and incentives
High DNI levels
Water scarcity
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Academic research efforts such as the Developer
Environmental conditions: sand and very high temperResearch Advisory Council (DRAC) and the King
atures might negatively impact plant performance and
Abdullah University of Science and Technology (KAUST) O&M costs
Diversification of the energy mix and reduction in the
reliance on fossil fuels
Shortage of specialized skills and technical know-how
in the operation of CSP plants
High potential for seawater desalination: KACST
launched an initiative which aims to make all desalination plants run on solar power by 2019, and the
National Water Company plans to spend US$ 11 billion
on new desalination plants over the next eight years.
Subsidized fuel and electricity prices make CSP plants
less competitive from a financial point of view
Clear funding arrangements are required to achieve the
Strong potential for hybrid fossil-CSP, given the
significant solar resources, the large national gas and oil ambitious target set by K.A.CARE’s White Paper
electricity generation base that exists, and the fossil fuel
reserves
The need for additional installed power capacities due
to soaring power consumption, forecasted to grow at
an annual rate of 8% over the next few years.
4.1 Electricity Market
The electricity market in Saudi Arabia is dominated by
the vertically integrated Saudi Electricity Company (SEC)
set up in 1998 with the Saudi government as a major
stakeholder. The SEC owns most of the generation
capacity as well as transmission and distribution
infrastructures.
Another government entity is the Electricity and
Co-Generation Regulatory Agency (ECRA), acting as the
market regulatory body. Plans for deregulation began
in 2007 when SEC opened the market to Independent
Power Producers (IPP). There are long-term unbundling
plans in place to further deregulate the market by
separating the three main functions (generation, transmission and distribution) and allowing the operation of
private competitors. Within the overall plan, ECRA will
continue working with the relevant government bodies
to promote the participation of IPPs and Independent
Water and Power Producers (IWPPs).
It was only recently that a generation capacity was
provided by private producers who serve isolated
loads or sell directly to the SEC. Furthermore, several
large consumers produce captive generation on their
own. As part of deregulation plans, the generation
sector is likely to be moved under the control of four
different companies, all started as spin-offs of the
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Decision makers’ sensitivity: CSP industry development
could be perceived as a threat to the role of oil and gas
SEC. It is envisaged that the most common business
model implemented for privatization of the generation
segment is the BOO (Build-Own-Operate) one, which
is regulated by 20-year contracts currently awarded by
SEC.
Saudi Arabia’s energy use is almost entirely from fossil
fuels. In 2011, less than 1% of the energy generated was
sourced from renewable technologies whilst 65% came
from oil and 27% from natural gas. Saudi Arabia’s oil and
gas industry is dominated by the government-owned
Saudi Aramco, which is the world’s largest oil company,
both in terms of oil reserves and production.
4.1.1. Electricity Consumption
The power generation capacity in Saudi Arabia has
risen by approximately 7% on average in the last
ten years. However, consumption rates grew at a
higher pace (approximately 8%) and this is one of the
most important drivers for the development of new,
renewable generation capacity. The current annual rate
of electricity consumption is 231 TWh. Saudi Arabia has
the highest per capita oil consumption in the world approximately five times greater than the analogous
figure in the USA and ten times that of Japan.
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4.1.2. Grid Transmission
The transmission network of Saudi Arabia suffers from
above-average transmission losses (approximately
11%), and for this reason, various investments have
been put in place since 2000 to improve it alongside
the distribution network. The overall plan envisages the
development of an interconnected regional transmission system with the other five Gulf Cooperation
Council (GCC) countries (UAE, Bahrain, Oman, Qatar
and Kuwait). Commissioned by the Gulf Cooperation
Council Interconnection Authority (GCCIA), the GCC
Interconnection Grid project was agreed at the end of
2001. The first phase, which was the largest of all three
phases, entailed the development of the North Grid
across Kuwait, Saudi Arabia, Bahrain and Qatar and
was completed in 2009. The second phase involved
the internal connection among the southern systems
(United Arab Emirates and Oman) and was completed
in 2011. Meanwhile, the third phase of the project
entails the interconnection of the GCC north and
south grids and is still under development. With the
completion of the third phase, the interconnection of
the six Gulf States would be accomplished.During the
first two years of operation, the GCC interconnection
contributed significantly to the continuity of power flow
to the power systems of the member states. Between
July 2009 and the end of 2010, there were about 250
incidents of sudden loss of generation units connected
to the networks in various member states, but because
of the GCC interconnection, the systems managed to
avoid supply interruptions (Ebrahim, 2012).Numerous
benefits are anticipated with the achievement of a
common GCC electricity market, such as increased
energy security and reliability, greater renewable energy
penetration, reduced cost of supply for consumers, and
promotion of regional integration and trade.Equally
important is that the GCC Interconnection Grid will
allow private investors to develop larger projects with
access to a wider market, including not only the GCC,
but also other pools, such as the EJILST (Egypt, Jordan,
Iraq, Lebanon, Syria, and Turkey) and the UCTE (Europe).
The availability of a common market will thus provide
opportunity for the establishment of power plants close
to resources, giving freedom for IPPs and IWPPs to select
strategic locations in a much larger market.
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Figure 2(4): The GCC Grid Interconnection Project
KUWAIT
ALZOUR 400 KV
SAUDI ARABIA
SEGERB
1200 MW
310 km
AL FADHILL 400 KV
HVDC
BACK-TO-BACK
600 MW
112 km
BAHRAIN
1200 MW
90 km
JASRA 400 KV
GHUNAN 400 KV
290 km
750 MW
100 km
QATAR
DOHA SOUTH
SUPER 400 KV
SALWA 400 KV
150 km
900 MW
400 MW
SHUWAIHAT
400KV
EMIRATES
NATIONAL GRID
UAE
AL
OUHAH
220 KV
52 km
OMAN
OMAN NORTHERN
GRID
AL WASSET
220 KV
Source: The GCC Interconnection Authority (GCCIA)
A number of concrete steps have been taken to
improve Saudi Arabia’s transmission network. Most
recently, in November 2012, ABB won an award to
expand the kingdom’s power grid. The contract, worth
around US$ 170 million, will see a number of projects
executed for SEC. The aim of this project is to alleviate
the increased demand for electricity in and round the
central pilgrimage area of Makkah. In addition, ABB
will build four other transmission and distribution GIS
(gas-insulated switchgear substations) in the western
and southern regions of the country. This project is
scheduled for completion by 2014.
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4.1.3. Electricity Demand
Electricity demand is increasing rapidly due to the
combined effect of population growth and growing
electricity consumption per capita. The former entails
not only a higher direct consumption of energy, but
also increased demand for desalinated water, which is a
very intensive energy process. The latter is determined
more by the highly subsidized retail price for electricity
rather than by an effective rate of industrialization.
The average trend of electricity consumption from
1990 onward has been 6.2% per year, but this rate has
increased to 8% in the last decade: the population
growth rate between 2000 and 2003 was over 3%.
However it decreased to approximately 1.52% in 2012.
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Finally, the water demand growth is approximately 7%
per year.
Government policy in relation to subsidies recently
started changing, and the final cost to consumers has
risen. However, environmental costs associated with
conventional generation technologies are not internalized within the energy tariff and, generally speaking,
consumers have little incentive to save energy.
Retail prices are essential in forming a comprehensive
overview of the electricity sector because residential
load still represents approximately 82% of overall
demand (Figure 3(4)). It is estimated that approximately
85% of residential consumption is associated with
cooling load. This aspect is further confirmed by a large
seasonal variation in electricity consumption which
peaks during the hot summer season.
Figure 3(4): Electricity Demand in Saudi Arabia by Sector
Electricty Demand by Sector
Government buildings - 3%
Other (agriculture, construction) - 2%
Commercial - 13%
Residential - 82%
Source: Alamoud, 2010
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A large portion of Saudi Arabia’s electricity consumption
goes to air-conditioning. According to a simulation
study for solar adsorption air-conditioning in Saudi
Arabia released in 2013, the annual consumption of
electricity per capita in Saudi Arabia is 7,700 kWh,
compared with an average world consumption of 2,500
kWh per capita. Air conditioning accounts for nearly
52% of this consumption, which means that over 4,000
kWh (per person per year) is consumed by the cooling
load.
4.2 CSP Market
The Saudi energy economy is dominated by oil.
According to a Citigroup report published in September
2012, the increasing internal energy demand, combined
with a growing population could represent a threat
to the long-term capability of the kingdom to export
oil, which currently provides over 80% of economic
resources. Such forecasts have been the main driver for
a major policy shift towards renewable energy generation sources.
The latest forecast, as reported in “Energy Efficiency
Initiatives for Saudi Arabia on Supply and Demand
Sides”, carried out by the Energy Research Institute,
indicates that power demand in the kingdom will grow
between 8% and 9% on an annual basis for the next ten
years.
4.1.4. Market Structure Diagram
Electricity and
Cogeneration Regulatory
Authority (ECRA)
Independent Water and
Power Producer (IWPP)
Independent Power
Producer (IPP)
Saudi Electricity Company (SEC)
(Directly or through its wholly or partially owned subsidaries)
Generation
Transmission
Distribution
Customers
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Figure 4(4): Saudi Arabia’s Oil Balance on a Business-as-Usual Trajectory
Source: Chatham House, 2010
Figure 5(4), obtained from a 2010 Chatham House
report, has been quoted in numerous publications
relating to the forecasted dire straits faced by the Saudi
Government if they do not find an alternative source
of energy for domestic consumption. Admittedly, the
above graph was published in 2010, before the shale
gas boom and the potential implications this may have
had on international oil and gas prices and exports in
markets such as the USA.
Saudi Arabia does not import any natural gas or oil
and therefore relies entirely on internal production
for consumption. According to the EIA (2013), Saudi
Arabia’s subsidization of natural gas is the greatest
in the Persian Gulf. It goes without saying that the
potential earnings from exporting oil and natural gas
far outweigh any earnings from local consumption.For
example, Saudi Arabia accounted for 16% of the USA’s
crude oil imports in the first ten months of 2012. The
average US-landed costs per barrel of Saudi Arabian
Light Crude Oil in 2010 were US$ 79.67. In 2012, this
value increased to an average of US$ 108.80 (EIA 2013).
In essence, there are two major drivers behind the Saudi
Government’s decision to diversify its energy supply.
The first is financial. Saudi Arabia stands to profit greatly
from exporting oil to countries in the Middle East and
USA. The second is meeting the demand of increased
domestic consumption. Chatham House’s forecast
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that consumption will outweigh production after 2040
implies that the country will ultimately have to import
energy resources. With this in mind, it is not surprising
that the announcement by Saudi Arabia that 50% of
energy production is to come from renewable sources
by 2020 has spurred major initiatives in the global
renewables sector.
In Saudi Aramco’s 2012 annual review, Shaping
Tomorrow, the company reconfirmed commitment to
a renewable energy future stating, “We are exploring
renewable and alternative energies, including wind and
solar, which will help create even more opportunities
for the company and the kingdom”. A representative
from Saudi Aramco told CSP Today that the major goal
for Aramco is to employ renewables within its premises
as much as possible, using the power generated by
renewables in upstream and downstream oil and
gas production, and for internal power consumption.
Aramco has already implemented a number of smallscale solar initiatives.
Furthermore, the Arriyadh Development Authority,
which is building the Riyadh Metro, has mandated
20% of the metro’s electricity demand come from
solar energy – although the technology to be adopted
has not been announced yet. Since the overall power
demand of the railway project will be 468 MW, 20% will
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equate to as much as 94 MW. The six-line Riyadh Metro
system is a US$ 22 billion project on which construction
is set to commence next year, to be completed by 2019.
However, the big excitement for the CSP industry
rests primarily in the hands of the King Abdullah City
of Atomic and Renewable Energy (K.A.CARE). In 2010,
K.A.CARE was established to lead the development
of the new renewable energy strategy, and in May
2012, Saudi Arabia announced its new national energy
target of 25 GW installed capacity from CSP by 2032,
becoming the most ambitious player in the CSP arena.
This value is part of an overall target of installing 54.1
GW of renewable energy capacity, comprising 25
GW of CSP, 16 GW of PV, and 13 GW of wind energy,
geothermal and waste-to-energy power plants.
300 MW), recent feedback from industry leaders has
suggested that PV may gain a larger portion in the
introductory round than CSP. The first round of the CPP
includes 900 MW of CSP installed capacity alongside
1.1 GW of PV, 650 MW of wind technology and a
further 200 MW from other applications (geothermal
and waste-to- energy). The second phase will include
the development of a further 1.2 GW of CSP, as well as
1.3 GW of PV, 1.05 GW of wind power and a residual
250 MW of other renewable energy generation
technologies.
The white paper announcing a Competitive
Procurement Process (CPP) was launched in February
2013. The plan is to develop a variety of projects
through Independent Power Producers (IPPs) with
20-year Power Purchase Agreements (PPAs). This
involves establishing a central procurement agency that
could be ECRA, along with the potential introduction
of purchase obligations to ensure that all energy
generated by renewable sources is effectively used.
For the time being, there is no CSP-specific policy,
framework or any other renewable energy legislation
in place but it is expected that a decision will be made
following the second full-scale procurement round,
which is scheduled to take place in late 2014 or early
2015. The mechanism proposed by ECRA is to set up
the value of the FIT for the first three years according
to the lowest bid – similar to the process used in South
Africa and India.
The introductory round of the plan started after the
white paper was issued and should be completed within
twelve months. It will consist of a few projects (five to
seven) utilizing different technologies, to be developed
in already-identified sites. Following rounds would
start only when the previous ones are completed, but
it is envisaged that each procurement stage will last
between six and ten months (with the exception of the
introductory phase which will be longer).
It is expected that the introductory round will only
cover an overall installed capacity of up to 500-800
MW to be shared between CSP, PV and onshore wind.
Although it was initially suggested that there would be
a fifty-fifty split between CSP and PV (each receiving
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Figure 5(4): Current Indications for CSP and PV Allocations in Saudi Arabia
1,400
1,300
 CSP
 PV
1,200
1,200
1,200
1,000
900
800
*It should be noted
that the 300 MW
estimation for
CSP and PV in the
Introductory Round
is based on the
estimate that 600
MW is allocated to
solar and that it is
split equally.
600
400
300
300
200
0
Introductory Round
First Round
Second Round
Source: Saudi Sustainable Energy Symposium
Saudi Arabia is going against international trends by
favoring CSP over PV. Whether the end goal of 25 GW
of CSP will remain the same throughout the various
rounds remains to be seen. As illustrated by Figure 5(4),
PV is already dominating the first and second rounds.
That said, there is no doubt that many international
companies within the CSP industry have a strong
interest in playing a role within this very ambitious
www.csptoday.com
plan. How successful the program will be ultimately
depends on the availability of funding. At the moment,
one of the strongest elements of risk from an investor’s
perspective is the lack of regulation. This could bring
both complications and uncertainty.
The CPP includes specific requirements and constraints,
as outlined in Table 2(4).
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Table 2(4): Competitive Procurement Process Requirements
Requirement Type
Requirement
Parameter
Minimum Size
5 MW
Smaller projects will qualify only if they have a single common
metering point and their joint capacity is higher than 5 MW
Minimum Storage
4 Hours
Applicable to the introductory round. This may be increased in the
following rounds based on K.A. CARE evaluations
Investment in
Training
1% of gross revenue Sum payable to a Sustainable Energy Trading Fund (SETF) which in
turn will be used to provide training for locals
Research and
Development
1% of gross revenue Sum payable to be invested through the Developer Research
Advisory Council (DRAC), an agency set up by K.A.CARE
Job Localization
Plan
To be defined in the At the commercial operation date plus two years, a developer will
relevant RFP/PPA
be required to issue a compliance report to SEPC (the off-taker),
stating total number of employees, total number of Saudi employees,
total wages paid, and total wages paid to Saudis. Developers will be
benchmarked, by technology class, on this basis. If a developer does
not meet the statutory minimum threshold, it will be disqualified
from bidding on competitive procurements in the subsequent
year. Developers in the bottom 20% of job localization within their
technology class will have to pay a fine. Developers in the top five
percent of job localization in their technology class in any one year
will be awarded a bonus
Notes
Source: CSP Today Global Tracker, August 2013
In preparation for the new CSP capacities that will
need to be integrated into the electricity distribution
network, K.A.CARE is currently carrying out an
engineering and technical study on renewable energy
impact on the power grid. Fortunately, the nature of
CSP electricity generation makes it easy to connect
to the grid, since CSP can be considered a base-load
source of energy being similar to a conventional
power plant with a standard power block.Moreover,
the load profile of Saudi Arabia indicates there are two
peaks, one in the daytime and one in the evening.
Therefore, economically and technologically, CSP,
with four hours of storage, as mandated by K.A.CARE
for the introductory procurement round, will be the
optimal choice to meet both the daytime and evening
peak demands.“ The requirements for integrating new
solar plants with existing distribution networks should
not be any different from those for interconnecting
larger fossil-fuelled generators to the transmission
system, except that renewables are often variable
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and geographically dispersed,” explains Dr. Mahmoud
Zayan, specialist in Saudi Aramco’s Consulting Services
Department, in the company’s quarterly Journal of
Technology.The Grid Impact Study involves active
participation of various key stakeholders, such as
the Saudi Electricity Company, National Grid Saudi
Arabia, Ministry of Water and Electricity, Electricity and
Co-Generation Regulatory Authority, and others. The
study is crucial to understanding the main technical
requirements and dealing with the challenges of
integrating renewable energy sources into the grid.
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4.2.1. Local Content Requirements
Table 3(4): Local Content Requirements Outlined for the Introductory Round of the CPP
Cost Category
Equipment or Service
Local Content Factor
Engineering
Service
50%
Legal
Service
50%
Other Professional Services
Service
50%
Construction Labor and Management – Saudi
Service
50%
Construction Labor and Management - Other
Service
0%
Collector
Equipment
50%
Mirrors
Equipment
50%
Absorber
Equipment
50%
Molten Salts
Equipment
100%
Steam Turbine and Generator
Equipment
100%
Storage Tank
Equipment
100%
Balance of Plant
Equipment
25%
Engineering
Service
50%
Legal
Service
50%
Other Professional Services
Service
50%
Construction Labor and Management – Saudi
Service
50%
Construction Labor and Management – Other
Service
0%
Heliostat
Equipment
50%
Mirrors
Equipment
50%
Receiver
Equipment
100%
Molten Salts
Equipment
100%
Steam Turbine and Generator
Equipment
100%
Storage Tank
Equipment
100%
Balance of Plant
Equipment
25%
Parabolic Trough
Power Tower
Source: K.A.CARE, 2013
According to the CPP white paper, local content will
be evaluated based on the amount of money spent on
goods and services and will be reviewed by a certification body to be established by K.A.CARE. The values
reported in the table above might well be increased in
subsequent procurement rounds.
www.csptoday.com
The high local content demands reflect the country’s
ambition to develop a strong local manufacturing
industry supporting the entire CSP value chain. In line
with this expectation, it is likely that Saudi Arabia is
prioritizing CSP technology over PV because it cannot
compete with the manufacturing know-how already
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developed in other countries, such as China.
From a developer’s perspective, they will need to ensure
that they achieve the right balance of experience
and know-how whilst still complying with the strict
requirements imposed by the CPP in order to be
successful. It is envisaged that partnerships with local
companies could be the best strategy to pursue.
Certainly, the requirements listed above demonstrate
the need to secure some resources exclusively from
within the kingdom and developers will need to give
due consideration to this constraint. The obligation to
provide training might also become a critical factor in
guaranteeing an appropriate level of know-how and the
employment of local workers.
As such, the development of CSP in Saudi Arabia will
initially be characterized by a strong trend of domestic
and foreign partnerships until the local skills base and
expertise level has been built up. K.A.CARE has already
been working closely with the U.S. National Renewable
Energy Laboratory (NREL) for training and expertise on
Renewable Resource Monitoring and Mapping (RRMM)
program, which involves establishing accurate meteorological data for CSP project developers and financiers.
4.2.2. Solar Resource Forecasting
In April 2013, nine Saudi engineers spent nine days
at the NREL, studying and discussing theoretical and
practical topics, ranging from waste-to-energy to solar
resource forecasting. NREL and its partner Battelle are
supporting the installation of the renewable resource
monitoring stations – helping officials decide where
to put the large stations and where to distribute
the smaller ones – while training local engineers on
operating these instruments.As part of the RRMM
program, K.A.CARE has started collecting solar radiation
data at several sites throughout the kingdom, with an
aim of establishing 75 monitoring locations by the last
quarter of 2013. “The new monitoring stations monitor
Global Horizontal Irradiance (GHI), and Direct Normal
Irradiance (DNI), plus meteorological and other parameters at the more complex stations,” states K.A.CARE’s
summary on the RRMM. Among other parameters that
will be measured are Diffuse Horizontal Irradiance (DHI),
Aerosol Optical Depth and dust deposition.
At present, preliminary measurements are available
for the GHI, DNI, and DHI, although K.A.CARE notes
that “initial data sets may have limited value for some
applications until a greater period of record is compiled”.
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Once complete, all collected solar resource data will be
disseminated through an online, interactive Renewable
Resource Atlas (www.rratlas.gov.sa) from late 2013. The
Atlas will include radiation, solar spectrum, temperature,
dust levels, humid and wind speeds, as they pertain
to energy project development. The Atlas will enable
users to easily compare resource characteristics for
various locations, and data from it can be mapped or
graphed, and in some cases downloaded for import
into other programs that support plant siting and
pre-feasibility studies. This data will assist developers in
evaluating proposed project sites in the kingdom, and
will also benefit universities, research institutes, project
developers, project financers, and semi-governmental
organizations.Ultimately, the RRMM will create a reliable
pool of data that represents the climatological and
geographical diversity of the kingdom.
Priority locations for the stations will be areas with the
highest level of solar resources; places with complex
terrain or strong resource gradient; and areas near the
electric grid and load centers. And while data from
the stations will be available as daily total irradiance
in the form of line graphs, the satellite-based model
data – benchmarked against historical data from the
kingdom – will be available as monthly and annual
average values.Once the entire network is installed,
the solar monitoring network data will be integrated
with the satellite-based models, possibly in 2014. The
satellite-based estimates in particular will integrate
cloud, dust deposition, and solar spectral data.
Although instrumentation will vary depending on the
processing algorithms and models used, all measurements will include full metadata to provide users with
vital information for an informed analysis.
4.2.3. CSP Project Profiles and Time Frames
In 2011, German company Solar Tower Systems GmbH
started the construction of a 300 kW solar tower
demonstration plant for a high-temperature solar
gas turbine in Riyadh Techno Valley on the campus
of King Saud University. In 2013, King Saud University
also launched a Point Focus Fresnel collector, which
was reported as being able to raise heat transfer fluid
temperature above 500˚C.
On the SEC website, two Independent Power Producer
(IPP) projects are listed: Dhuba 1 and Dhuba 2. The 550
MW Dhuba 1 is expected to include a CSP component,
believed to be about 20 to 30 MW in capacity. The
technology choice is yet to be confirmed, but the
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expected commercial operation date of the project,
which has been under study for at least two years, is
2016. Dhuba 2 is expected to reach completion in 2017.
An industry insider told CSP Today that several
imminent projects are likely to come from the SEC
and Saudi Aramco, which has a dedicated renewable
energy team under its power system department, whilst
K.A.CARE leads the country’s large-scale, national solar
initiative towards the government’s targets.
4.3. Local CSP Ecosystem
There is no doubt that the ambitious program launched
by Saudi Arabia represents an extremely interesting
opportunity for any international industrial player and
will likely have a positive effect on the CSP industry
in general. The target set by the kingdom potentially
opens the doors for scaling up the production of
components and identifying solutions along the value
chain.
According to Philip Moss, managing Partner at Mana
Ventures, an international clean energy investment firm
headquartered in Masdar City but operative in the Saudi
market as well, one of the biggest challenges for any
renewable energy player approaching the Saudi local
market is the lack of a cohesive and comprehensive
framework that can support the development of
renewable energy projects. For new market entrants,
this requires a great amount of commitment for the
identification of suitable partners and engagement at
government level.A further concern is the potential
competition of the CSP industry with PV technology,
due to the lower CAPEX and relatively shorter lead-up
time needed for PV installations. According to Moss, the
MENA region in general is now being seen as a significant market by distressed PV manufacturers. However,
an artificially deflated environment for PV in the region
could be created, as PV companies are looking to ship
volume. Ultimately, this would make it even harder for
CSP to compete against low-cost PV.
That said, Saudi Arabia offers a very particular context
in which the projects will be developed. From one side,
the technical performance of many components will be
challenged by local environmental factors such as the
dust and climate of the desert that can expose plant
components to temperature up to 54°C. These aspects
could require ad-hoc solutions that will guarantee
suitable performance of the plants. Thus, whilst the
CPP White Paper calls for experienced CSP developers,
it is clear that CSP initiatives will need to be specifically
tailored to the unique Saudi conditions. On the other
side, the dominant role of oil and gas might become a
hurdle for the development of new solar technologies
that could be seen as a threatening factor to the
conventional industry.
The undefined nature of the current regulation –
partially revised by the Competitive Procurement
Process – in Saudi Arabia would encourage any industry
player aiming to achieve a meaningful role within the
local value chain to adopt a cautious and considered
approach, maximizing the use of due-diligence tools in
order to mitigate any potential risk.
Meanwhile, establishing alliances with the local
industry will likely be imperative, as the proposed local
content requirements outlined within the CPP make
identification of local partners essential for international
players.
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4.3.1. Key Government Agencies
Table 4 provides an overview of the key government
agencies and authorities within Saudi Arabia that will
directly or indirectly be involved with CSP projects.
Table 4(4): Ministries and Government Agencies in Saudi Arabia
Previous renewable energy
programs (if applicable)
Name
Roles and Responsibilities
Council of Saudi Chambers
of Commerce and Industry
Promotes the interests of the 22 regional Saudi Chambers, acting as a voice for them on a
national and international level. Monitors and
solves issues affecting private sector. Develops
foreign investment through trade missions.
Electricity and Cogeneration
Regulatory Authority (ECRA)
Regulates electricity and water desalination
industries. Plays an indirect role by issuing
generation and grid connection licenses in
addition to managing grid code matters.
ECRA is assisting in KSA’s
transition to nuclear & renewable
energy over the next ten years.
It is currently determining its
responsibilities as a regulator of
renewable projects.
King Abdulaziz City for
Science and Technology
(KACST)
Produces energy-related technologies and
national databases of renewable energy
resources. Presents solutions to reduce energy
waste in all sectors. Studies the environmental
impact of different energy sources. Serves as
the Saudi Arabian national science agency
and as its national laboratory.
Locally, KASCT has been involved
with PV tunnel lighting, PV
grid connected systems, Sadus
desalination plant, and solar
dryers. Internationally, KASCT
is involved with the Saudi-US
Solar Programme-SOLERAS; and
the Saudi-German joint R&D
program, Solar Dishes HYSOLAR.
KACST launched the Solar Water
Desalination initiative which aims
to have all desalination plants
in the kingdom run on solar by
2019.
King Abdullah City for
Atomic and Renewable
Energy (K.A.CARE)
Defining, facilitating, implementing and
regulating the national atomic and renewable
energy program.
Launched a competitive procurement process for a targeted 25
MW of CSP and 16 GW of PV by
2032.
Ministry of Commerce and
Industry (MCI)
Enhances industry and trade sectors’ capacities. Develops and implements policies
and mechanisms to diversify productivity.
Regulates internal markets and develops
external commercial relations. Studies
requests of foreign companies, and assists
in registrations, office set-ups and business
incorporation.
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Riyadh Chamber of
Commerce and Industry
(RCCI)
Liaises between the public and private sectors. Collects and disseminates business information. Identifies investments areas inside and
outside the kingdom. Develops the material
and labor resources of Riyadh.
Saudi Arabian General
Manages the investment environment in
Investment Authority (SAGIA) Saudi Arabia. Issues trade licenses for foreign
companies. Monitors and benchmarks the
country’s attractiveness to investors. Provides
business support to investors.
Saudi Aramco
Piloting a number of solar
projects. Completed a 500kW
solar farm on Farasan Island in
the Red Sea, in collaboration with
SEC and Solar Frontier. Set up
the Solar Technology Park at its
site, which hosts more than 30
technology vendors. Deployed
a 10 MW solar canopy project
in Dharan. Developing a 1 MW
CPV project in the northwestern
Tabuk region.
A national oil and natural gas company
owned by the Saudi Government.
4.3.2. Independent Water and Power Producers
(IWPP)
Table 5(4) shows a list of IPPs and IWPPs operating in
Saudi Arabia.
Table 5(4): Utility Companies in Saudi Arabia
Name
Notes
Air Liquide Arabia Ltd.
A partnership between Air Liquide M.E. (55%), TAQA (25%) and Al-Rushaid Petroleum
Investment Co. (20%). The parent company of Air Liquide Middle East is Air Liquide S.A.,
a French global leader in industrial gases founded in 1902.
Al-Jomaih Energy &
Water Company
Founded in 1936, Aljomaih Holding Company, an industrial conglomerate, operates
in manufacturing, power generation, beverages, real estate, investment, automotive
services, and heavy plant equipment industries primarily in Saudi Arabia.
Al-Jubail Gas Plant
Company Ltd.
Manufactures, supplies and distributes a wide variety of industrial, medical, specialty
gas products and bulk gases.
Dhuruma Electricity
Company (DEC)
A project company set up to build the PP11 IPP Combined Cycle Gas Turbine plant
close to Dhuruma, Saudi Arabia.
Hajr Project Company
Owner of the Qurayyah IPP, a greenfield project that is being developed on a BOO
basis, located on the eastern coast of Saudi Arabia with a net generation capacity
of 3,927 MW. The production capacity will make it once completed the largest IPP
combined cycle gas-fired power plant in the world.
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International Barges
Company for
Desalinated Water
(Bowarege)
Owner of the Barge IWP, the world’s first barges mounted, self-contained desalination
plants with onboard power generators and staff accommodation. Both barges are
fitted with 25,000m3/day capacity reverse osmosis desalination plants.
Marafiq
Supplies water and power to Jubail Industrial City and partially to the Eastern province
cities. Owned by Jubail Water & Electricity Co., Marafiq is the largest power and water
desalination facility in the world. With natural gas as a fuel, it utilizes Combined Cycle
Power Plant technology with Multi-Effect Distillation.
National Industrial Gases GAS is 70% owned by the Saudi Basic Industries Corporation (SABIC) and 30% by
Company (GAS)
a number of Saudi private sectors operating in the field of industrial gases. GAS
is responsible for producing, distributing and marketing industrial gases to SABIC
affiliates and other private companies and operates in three locations: GAS Jubail, Gulf
Guard Jubail and GAS Yanbu.
Natural Gas Distribution
Co. Ltd. (NGDC)
Private Saudi company distributing natural gas to the industries located in second
Industrial City Riyadh.
Rabigh Arabian Water
& Electricity Company
(RAWEC)
Owner of the first IPP in Saudi Arabia. The project is being developed as a new power
plant with a net capacity of approximately 1,204 MW at Reference Site Conditions and
associated facilities in Rabigh. Power will be sold to Saudi Electricity Corporation under
a 20-year PPA.
Rabigh Electricity
Company (RABEC)
Owner of the Rabigh Independent Water Steam Power Producer (IWSPP), which
provides water, power and steam to Petro Rabigh Co. The plant utilizes Heavy Fuel Oil
to generate electricity, and Reverse Osmosis for desalination.
Shuaibah Water &
Electricity Company
(SWEC)
Owner of the Shuaibah IWPP facility with ACWA Power being its major shareholder.
Arabian Heavy Crude Oil is used to produce steam for power generation and desalinated water production using Multi-Stage Flash technology.
Shuaibah Expansion
Project Company
(SEPCO)
Controls Shuaibah independent Water Producer. The expansion comprises a desalination plant utilizing Reverse Osmosis to augment water supply in parts of the kingdom’s
western region.
Shuqaiq Water &
Electricity Company
(SqWEC)
Owns and operates Shuqaiq IWPP, the second phase of Shuqaiq complex, which
produces water and power for Assir region and the city of Jizan. The project included
the construction and commissioning of three 340 MW oil fired power units combined
with Reverse Osmosis desalination and potabilization facilities.
Water & Electricity Co.
(WEC)
A limited liability company responsible for the sale and purchase of water and
electricity and all ancillary activities. WEC is the counterparty under the Power & Water
Purchase Agreement, buys the project’s water and electricity, and sells them on to
SWCC and SEC, respectively.
4.3.3. Permitting Agencies
A particular aspect of importance related to one of the
permitting agencies – Sustainable Energy Procurement
Company (see Table 6(4)) – is the Power Purchase
Agreements (PPAs). According to the white paper, these
will be subject to the Saudi common law. As a matter
of fact, many international players may not be familiar
www.csptoday.com
with it being based on Islamic law (conversely from
the governing law of the PPAs used for conventional
IPPs, which is based on English law). The single buyer
of the electricity produced by CSP plants will be the
SEPC, which again is not very known by international
stakeholders because it has yet to be established.
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Table 6(4): Permitting and Environmental Assessment Agencies Operative in Saudi Arabia
Previous renewable energy
programs (if applicable)
Name
Roles and Responsibilities
Sustainable Energy
Procurement Company
(SEPC)
To be established.
SEPC will administer procurement, execution
and management of power purchase agreements. It will coordinate with SEC on permitting
and licensing, local content, grid connection,
prepackaged sites, tendering projects, and
renewable resources.
Sustainable Energy Service
Centre (SESC)
SESC will provide support to developers
throughout the renewable procurement
program, including on local content issues.
To be established.
Presidency of Meteorology
and Environment (PME)
Established the Environmental Protection
Standards. Carries out auditing and environmental impact assessment for industrial and
development projects, including solar power
plants. Developing a national strategy for
environmental awareness that will support
environmental legislation in the country.
Any company looking to do
business in the Saudi environmental market must obtain a
license from PME.
4.3.4. Local Consultants and R&D bodies
Local consultancy services may hold even greater
importance due to the lack of a CSP-specific policy or
framework and due to the need to activate the right
communication channels with potential stakeholders
of a CSP plant, including local authorities. Table 7(4)
provides an overview of the relevant consultancies and
research bodies operating in Saudi Arabia.
Table 7(4): Consultants and R&D Bodies Operative in Saudi Arabia
Name
Roles and Responsibilities
Previous CSP Projects
Centre of Excellence in
Renewable Energy (at King
Fahd University of Petroleum
& Minerals)
Conducts R&D that links local and international
research, education, business and government
resources for technology transfer and advancement of renewable energy in Saudi Arabia. Set up
under UNESCO and ISESCO.
Currently pursuing three R&D
programs in Solar Cell, Solar
Cooling & Heating, and PV
module/system reliability.
Developer Research Advisory Part of SESC. Focuses on R&D in the kingdom,
Council (DRAC)
making recommendations on how to contribute
to its intellectual capital. DRAC will sponsor an
annual Sustainable Energy Research Conference
and run a prize competition.
To be established.
Developer Trainer Advisory
Council
To be established.
www.csptoday.com
Focuses on training programs. Ensures that
developers’ programs are adequate.
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King Abdullah University
of Science & Technology
(KAUST)
KAUST’s Solar Engineering Research Centre
conducts R&D in renewable energy science and
engineering, and transfers outcome to industry
members to contribute to the progress of
technology advancement.
Houses a 2 MW solar park
generating 3.3 MWh of
energy annually, and the
Solar Engineering Research
Centre.
Saudi Arabia Solar Industry
Association (SASIA)
Provides solar professionals with the opportunity
to meet through workshops, conferences and
lectures. Publishes research reports on solar
policies, standards and product certifications.
Assists international solar
companies that are establishing or contemplating the
establishment of representative offices in Saudi Arabia.
4.3.5. Financing Organizations
Funding is, generally speaking, a relevant issue for
capital-intensive projects like CSP plants. As CSP is still
regarded by many as being a more expensive and
high-risk energy source than its competitors, it requires
government support to make it competitive under
current market conditions.
Table 8(4): Main Funding Institutions and Banks Operative in Saudi Arabia
Previous Renewable Energy
Projects
Name
Roles and Responsibilities
Sanabil Al-Saudia
Sovereign investment fund owned by Saudi
Arabian Investment Company.
Saudi Industrial
Development Fund
(SIDF)
Potential financer of renewable
SIDF plays a pivotal role in executing programs
devised for the industrialization of Saudi Arabia, by energy projects.
providing short-term loans to investors, as well as
technical, administrative, financial and marketing
advice.
Sustainable Energy
Research Fund (SERF)
A fund that will receive 1% of gross revenues from
developers, to be allocated to research applications that have potential for commercialization.
Administered by SESC.
To be established.
Sustainable Energy
Training Fund (SETF)
A fund that will receive 1% of gross revenues
from developers, to be allocated to a sustainable
energy training program. Administered by SESC.
To be established.
www.csptoday.com
Acquired 13% of ACWA Power
International – a company that
invests in power and water in
the kingdom and regionally,
including solar energy. May
become a strategic investor for
power production.
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4.3.6. Utilities and Transmission Grid Operators
The state-owned Saudi Electricity Company (SEC)
currently controls Saudi Arabia’s generation, transmission and distribution network, and the National
Water Company (NWC) similarly manages the
majority of the country’s water sector. However, the
government has established a regulator – Electricity
and Co-Generation Regulatory Agency – and new
licensing rules that will pave the way for reform and
open up the sector to private investors. This will help
attract investment and promote innovation.The reform
process, which involves unbundling the SEC and
privatizing the major components of the kingdom’s
electricity and water sectors, should be completed by
2014. Until then, government-owned utility companies
will continue to have the upper hand within the energy
sector.
Table 9(4) shows an overview of the key utility
companies in Saudi Arabia.Table 9(4): Utility Companies
in Saudi Arabia
Table 9(4): Utility Companies in Saudi Arabia
Previous renewable energy
programs (if applicable)
Name
Roles and Responsibilities
National Grid Company
(NGC)
Wholly owned by the Saudi Electricity Company.
Responsible for all operation and maintenance
activities of the transmission grid within the
Kingdom.
National Water Company
(NWC)
Provides water and wastewater services, such as
bulk water supply, and preservation of natural
water resources. Manages the country’s water
sector except in Al Madina.
NWC initiated two sewage treatment plants with combined heat
& power generation. The first, on
Al Kharj Road, produces 2.2 to 2.5
MW of renewable energy, and
the second is Jeddah Airport 2.
Saudi Electricity
Company (SEC)
Responsible for generating, transmitting and
distributing electricity throughout the kingdom
either directly, or through its wholly or partially
owned subsidiaries.
Dhuba 1 550 MW IPP, which
will be the first Saudi ISCC, is
expected to be tendered in 2013
and will have a solar thermal
component of up to 20 MW.
Completion is set for 2017.
Saline Water Conversion
Corporation (SWCC)
The second largest electric power producer in the
kingdom. Responsible for desalinating seawater.
Currently establishing three
solar-powered desalination
plants.
www.csptoday.com
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4.3.7. Developers and EPC and Engineering
Companies
The scope for localizing manufacturing and EPC work
largely depends on the existing local capacity and
availability of materials. As a matter of fact, this is one
of the primary challenges related to the local Saudi
CSP market. Whilst local job creation is one of the key
aspects promoted by the overall policy program, it
is unlikely that the required skills and experience are
readily available locally; at least, not in the short term.
Therefore, it is expected that investors and developers
will need to factor in the cost of sourcing foreign skills
and ultimately, training.Companies will be much more
competitive if they team up with entities within Saudi
Arabia. According to Marc Norman, a project finance
lawyer at Chadbourne, and Parke Power, a Director of
Marketing and Communications at the Emirates Solar
Industries Association, there is currently a great deal
of activity among international renewable energy
players trying to find local partners, because this will be
the key to success. The white paper sets a high bar in
terms of combining local knowledge with international
experience and financial strength to the point that
is very hard for any single company to match all the
requirements, except for ACWA Power.There are several
EPC and engineering companies based in Saudi Arabia,
as well as companies with strong presence in the
region. Table 10(4) provides an overview of them.
Table 10(4): Developers, EPCs and Engineering Companies Operating in Saudi Arabia
Name
Roles and Responsibilities
Previous Renewable Energy Projects
ACWA Power
Saudi Arabia-based developer, owner and
operator of independent water and power
projects structured on a concession or utility-outsourcing contract model.
Developed the 160 MWe Noor 1 CSP
IPP in Morocco, and has about 300 MW
renewable energy projects in the pipeline.
Currently bidding for Mecca’s first solar
power plant.
Al-Fanar
Construction
Company
Manufacturing and construction company
involved in manufacturing electrical construction products, civil engineering construction,
and allied engineering services.
Bechtel
Corporation
One of the largest construction, engineering
and project management companies in the
U.S. with two offices in Saudi Arabia. Managed
the Jubail project in the Eastern Province of the
Kingdom since it began operations there in the
mid-1970s.
Performing project management, EPC,
and startup services for the 400 MW
Ivanpah CSP facility in southeastern
California. Built the 143 MW Catalina
Solar thin film project on behalf of EDF
Renewable Energy. Provided engineering,
procurement and construction management services for Solar Two 10 MW
CSP plant in California’s Mojave Desert.
Potential CSP developer in KSA.
Byrne Looby
Partners
International consulting engineering company
working for asset owners, developers, contractors, and government agencies. Provides
assistance for civil engineering projects
including water, infrastructure, marine, building,
and energy projects. Operates in the kingdom
through an office in Jeddah.
Designed the solar panel frames and
foundations for a range of solar farms on
agricultural land throughout the UK, with
capacities ranging from 5 MW to 20 MW.
Performed operations assessments of
possible foundation and framing solutions
to determine the most economical
solution. Potential CSP developer in KSA.
www.csptoday.com
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EGPHIL Solar
Solutions
Solar solutions provider active in Saudi Arabia
and Egypt, serving industrial and commercial
establishments, as well as residences.
Gratton Arabia Ltd.
Energy management and electrical safety
company offering engineering, analysis, design,
installation, field services, manufacturing and
supply services. Gratton Arabia is a joint venture
between Gratton Infrared Services Inc., AMAD
Technical Consultation & Laboratories, and
Droobtech Consultation.
Millennium Energy Jordan-based turnkey solar solutions provider
Industries
with an office in Riyadh.
Engineered and implemented a 25 MW
thermal solar district heating plant in
Riyadh, which is the world’s largest solar
heating system.
National Solar
Systems Ltd.
Built a 2 MW solar PV system on top of
KAUST building, which was completed in
2010. Implemented the grid-connected
864kW solar facility in the Red Sea island
of Farasan. Potential CSP developer in KSA.
Saudi company with a full in-house capability
to engineer, supply, install and support various
types of solar systems, from small off-grid
systems to large utility-scale grid-connected
installations. Provides feasibility studies,
engineering & design services, material
supply, installation services, and operations &
maintenance.
Saudi company specialized in the turnkey
Saudi Services for
Electro-Mechanical execution of large construction projects and
Works
development of electricity power plants.
Subsidiary of Al-Rashid Group.
Potential CSP developer in KSA.
Solar Arabia Ltd.
Potential CSP developer in KSA.
Riyadh-based turnkey solar solutions provider,
involved in development, design, engineering,
system sizing, supply, installation, testing, and
commissioning of projects. Originally formed
in 1989 as a joint venture with BP Solar Ltd,
but today is an independent business, equally
owned by two private enterprises from the Gulf
region: Ahmed Hamad Algosaibi & Bros. and
Olayan Financing Company – the Middle East
arm of The Olayan Group.
Total - Saudi Arabia A French multinational integrated oil and gas
company with growing focus on alternative
energy projects. In 2008, Total and Saudi
Aramco created the Saudi Aramco Total
Refining and Petrochemical Company (SATORP)
joint venture to build and operate a refinery in
Jubail. In 2009, Total began building its biggest
refinery in partnership with Saudi Aramco.
www.csptoday.com
Owns 20% in the UAE’s Shams 1 CSP Plant,
as part of a joint venture that constructed,
developed, designed, and will operate and
maintain the power plant. Potential CSP
developer in KSA.
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Tractebel
Engineering
Tractebel’s Renewable division provides turnkey
solutions, from pre-design to commissioning,
including renewable resources assessment,
permitting, engineering studies, procurement, to the follow-up of construction and
management.
Leading a consortium with Astrom
Technical Advisors and PD Naidoo
& Associates Ltd., to perform the
Engineering and Project Management for
ESKOM’s 100 MWe CSP demonstration
plant in Upington, South Africa (20122014). Potential CSP developer in KSA.
Wasath Al-Madar
Contracting
Establishment
Saudi contractor operating in construction,
commissioning, operations, maintenance
and shutdown, and turnaround of industrial
sectors, such as solar, oil & gas, petrochemicals,
hydrocarbons, power, water desalination and
other industrial infrastructures and production
sectors.
Potential CSP developer in KSA.
WorleyParsons
Large Australian provider of project delivery
and consulting services to the energy sectors
and complex process industries. Provides
engineering services and project management
consultancy through its seven offices in KSA.
Provided engineering support to the 400
MW Ivanpah CSP project in California
during the Evaluate and Define phases.
Potential CSP developer in KSA.
4.4.1. Local Component Supply
As a general observation, the collector assembly is
usually the easiest component to localize because it can
be manufactured on site through a temporary facility.
Similarly, civil works necessary for the construction of
a plant can be carried out by a local company. Saudi
Arabia is not a highly industrialized country; however,
the country has already developed a very strong oil and
gas industry. This means that many international players
are already operative in the area and provide a wide
selection of components, particularly those related to
the power block and mechanical services. Table 11(4)
offers an overview of CSP components available locally
in Saudi Arabia.
Table 11(4): Locally Available CSP Components Available Locally in Saudi Arabia
Component
Name of Supplier(s)
Website
Turbines
Alstom Power - Saudi Arabia
www.alstom.com
General Electric - Saudi Arabia
www.ge.com/sa/index.html
MAN Diesel & Turbo - Saudi Arabia
www.mandieselturbo.com
Mitsubishi Heavy Industries
Compressor Corporation - Saudi
Arabia
www.mhi-global.com
Siemens Saudi Arabia
www.siemens.com/answers/sa/en/
WorleyParsons Saudi Arabia
www.worleyparsons.com
www.csptoday.com
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Steam
Generators
Pumps
Valves
Alstom Power - Saudi Arabia
www.alstom.com
Doosan - Saudi Arabia
www.doosan.com/en/main.do
Foster Wheeler Arabia Ltd. - Saudi
Arabia
www.fwc.com/contact/ec.cfm#SaudiArabia
Alfa Laval - Saudi Arabia
www.alfalaval.com
Al Hayat Solar Energy
www.alhayatsolar.com
KSB Pumps Arabia
www.abunayyangroup.com
Mitsubishi Heavy Industries
Compressor Corporation - Saudi
Arabia
www.mhi-global.com
Saudi Gulf Hydraulics Company Ltd.
www.saudigulfhydraulics.com/products.php
Saudi Pump Factory
www.saudi-pump.com/references.html
Alfa Laval - Saudi Arabia
www.alfalaval.com
Dresser Al-Rushaid Valve &
Instrument Co. Ltd (DARVICO)
www.darvico.com
HAQ Trading Establishment
http://haq.com.sa/product1.php
John Crane (supplied through Dome www.johncrane.com
Trading & Contracting, Saudi Arabia).
Heat
Exchangers
MAC Valves (supplied through
Technical Industrial Automation)
www.macvalves.com
Pan Gulf Valves
www.pangulfvalves.com
Saudi Gulf Hydraulics Company Ltd.
www.saudigulfhydraulics.com/products.php
Saudi Pump Factory
www.saudi-pump.com/references.html
Sufaian Mahmood Sayed
Establishment
Can be found through this link: www.indianembassy.org.
sa/Content.aspx?ID=699
Alfa Laval - Saudi Arabia
www.alfalaval.com
GEA Saudi Arabia LLC
www.gea-heatexchangers.com
Sondex Saudi Arabia
www.gulfsondex.com
Tranter (available through their
Saudi Arabia Representative Zameel
Group Holding Company)
www.tranter.com
www.csptoday.com
www.tia-automation.com
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Receiver
Tubes / Solar
Collectors
Commercial suppliers currently
unavailable in Saudi Arabia. But the
King Saud University has developed,
engineered & constructed a new
concentrating collector - Point
Focus Fresnel Collector - in March
2013, which has been endorsed
by DESERTEC Foundation and may
eventually be commercialized.
http://arabianindustry.com/utilities/news/2013/mar/12/
king-saud-uni-develops-new-solar-collectors-4238026/#.
UZmGmZGDTIU
Heat Transfer
Fluid
Alfa Laval - Saudi Arabia
www.alfalaval.com
Dow Chemical Company - Saudi
Arabia
www.dow.com/middleeast/locations/saudiarabia/
contact.htm
Air-Cooled
Condenser/
Wet Cooling
Tower/Indirect
cooling
systems
GEA Saudi Arabia LLC
www.gea-heatexchangers.com/
Tracking
System
Currently unavailable in Saudi
Arabia.
4.4.2. Raw Material Availability
The need for three different sub-parts (solar field, power
block, heat transfer and storage - although the storage
is not strictly necessary) entails a certain complexity
both in terms of the number of components and in
terms of their integration.
Amongst the raw materials employed at the
construction stage, the solar field will make large use of
steel (mounting frames) and glass (solar collectors). The
storage system will need molten salts, whilst concrete
will be necessary for all the wide range of civil works.
While there are materials and sub-components that are
easily available, like steel and concrete, others are less
easy to find on the local market (such as glass) or even
rare (such as molten salts). Table 12(4) lists some of the
suppliers available in Saudi Arabia for each of the raw
materials considered.
www.csptoday.com
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Table 12(4): CSP Raw Material Suppliers in Saudi Arabia
Material
Supplier
Steel
Yanbu Steel
Saudi Iron & Steel Company
Solb Steel
Rajhi Steel
Jeddah National Steel Factory
Taybah Gulf Steel Factory
Glass
Saudi Arabian Glass Company
Obeikan Glass Company
Saudi Guardian International Float Glass Company (Gulf Guard)
Molten Salt
BASF Construction Chemicals
Concrete
Jubail Concrete Products
Mastour Ready Mix
Saudi Concrete Products (SACEP)
AlRashid-Abetong
Nagadi Preformed Concrete Factory.
4.5. Alternative CSP Markets
4.5.1. Desalination
As previously stated, one of the most promising fields
of application for CSP technology in Saudi Arabia other
than electricity generation is seawater desalination.
Saudi Arabia’s geography is dominated by the Arabian
Desert, with many valleys but no permanent rivers or
lakes and very little rainfall, thus water is scarce and
extremely valuable.To obtain water, the kingdom has
relied on underground reservoirs for more than 40 years
to the point that now these are being quickly depleted.
The processes currently used for desalination being
the second major source of water are Multi-stage Flash
Distillation and Reverse Osmosis.
The National Water Company plans to spend US$ 66.4
billion over the next eight years on water and wastewater projects, of which US$ 11 billion will be spent
on more desalination plants over the next eight years.
Earlier this year, the Minister of Water and Electricity
Abdullah Al-Hussayen announced that US$ 105 million
of water and sanitation works have been approved
across the kingdom (Almashabi, 2013).
www.csptoday.com
Saudi Arabia, currently burns approximately 1.5 million
barrels of crude oil per day for desalination. The Saline
Water Conversion Corporation (SWCC) of Saudi Arabia
currently operates 30 desalination stations that produce
3.5 million m³ of potable water daily, providing more
than 70% of the water used in cities and a sizeable
portion of industrial needs.
SWCC has already carried out a number of demonstration projects, and currently operates two solar
powered desalination plants in Al Khafji and Jubail
(AMEInfo, 2012). Furthermore, in 2010, KACST, in
collaboration with the US multi-national company
IBM, launched a national research program on solar
desalination.
As a whole, the kingdom is the world’s largest producer
of desalinated water, owns 30% of the world’s desalination capacity and produces at least 17% of the total
world output. The desalinated water is heavily subsidized by the government and possibly for this reason
the per capita water consumption is 94% higher than
the global average, according to a report produced
by SWCC. According to the company’s Annual Report
of Operation and Maintenance 2010, various types of
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fuel are currently used for the purpose of desalination
in Saudi Arabia: natural gas (over 55%), heavy fuel oil
(approximately 25%), crude oil and diesel (approximately 10% each).
The production costs of this energy-intensive process
that every year provides over 1 million m³ of water to
the country are relatively high. Taking into account the
fact that fuel prices are subsidized, it is easy to identify a
rationale for change. Analyzing these two key factors, it
becomes clear that the employment of CSP technology
is very promising for the Saudi market.
The ambitious Competitive Procurement Process
launched in 2013 includes the construction of a 30
MW solar-powered desalination plant at Al-Khafji,
near the border with Kuwait, using concentrated solar
photovoltaic (CPV) technology developed by IBM and
Saudi scientists. This plant will be able to provide 30,000
m3/day of desalinated water during the introductory
procurement round, and will become the world’s
largest of its kind upon completion. A similar objective
is set up for the following rounds to encourage a wide
application of solar desalination within the Kingdom.
Between 2013 and 2015, a second solar-powered desalination plant with a production capacity of 300,000m³
per day will be built, and from 2016 to 2018, several
more will be constructed across the kingdom. King
Abdulaziz City for Science and Technology launched an
initiative to gradually make all desalination plants in the
country run on solar power by 2019.
Some concerns have been raised regarding the
cost-effectiveness of CSP for desalination in Saudi
Arabia, particularly as the Saudi coasts are both highly
saline and have a high aerosol load in addition to
humidity and dust – all of which have an impact on
increasing operation and maintenance costs. This leads
credence to the argument that it will be challenging to
make CSP technology cost-effective for the desalination
market because of the factors mentioned above. In
fact, their joint effect is a reduction of the DNI due to
significant forward scattering (deflection by diffraction).
A representative from Saudi Aramco told CSP Today
that the low temperature required by the desalination
process (in the range of 80 to 120 ºC) would be a further
issue because CSP systems are designed to work at a
temperature range between 300 and 550˚C. This is the
reason the representative sees as a more suitable option
the use of waste heat from the CSP plant to feed the
desalination loop.
www.csptoday.com
4. 5.2. Enhanced Oil Recovery
The potential for utilizing CSP to produce steam for
enhanced oil recovery (EOR) in Saudi Arabia stems
from the country’s desire to save domestic natural gas
for higher value applications, and from the need to
extract the large volumes of non-recovered oil in ageing
oilfields. Using CSP for thermal EOR can reduce the
gas consumption of EOR projects by up to 80%, while
boosting oil production and reducing carbon dioxide
emissions (GlassPoint, 2013).
In an attempt to produce the steam needed to pump
heavy crude from Chevron Technology Ventures’ Saudi
Arabia oilfield, the company launched a demonstration
project in 2011 to determine the feasibility of using solar
power for oil production. A final investment decision
is expected this year, with the aim of producing as
much as 600,000 barrels per day of heavy oil from 2017.
US-based Chevron has operated four oilfields in the
onshore Partitioned Zone (PZ) that lies between Saudi
Arabia and Kuwait since 1949, and has 50% operational
interest in the kingdom’s petroleum resources. The
company’s EOR project would use solar power in
conjunction with burning natural gas for the steam
flood development at the Wafra field in the neutral PZ,
which Kuwait and Saudi Arabia share. While Kuwait
manages its part, Chevron operates Saudi Arabia’s
interest. Every barrel of oil would require about five
barrels of steam, according to Yasser Dib, regional vice
president of BrightSource Energy – the solar technology
company that supplied Chevron’s CSP plant in southern
California.Although Saudi Arabia has the world’s fifth
largest natural gas reserves, its natural gas production
remains limited (EIA, 2013). Therefore, the potential for
reducing the amount of natural gas burned for thermal
EOR, and utilizing it in higher-value applications, such as
electricity generation, desalination, industrial development or even export as LNG, will remain appealing.
These advantages may eventually encourage Saudi
Arabia to copy the successful model of its neighboring
country Oman, where GlassPoint constructed a 7
MW enclosed trough CSP-EOR system for Petroleum
Development Oman. The system has been in regular
operation since May 2013, and recently passed its first
performance acceptance test, exceeding contracted
steam output by 10% (GlassPoint, 2013).
4.6. Market Forecast
According to the 2013 Markets Scorecard, Saudi Arabia
is ranked as the second most promising CSP market
for future development only after South Africa.While
Saudi Arabia does not have CSP capacity installed today,
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Saudi Arabia
the country has set ambitious targets for 2032. With
a potential of 125,000 TWh/y of solar power (14,269
GW) owing to its average DNI of 2,400 kWh/m2/year,
it is worth mentioning that once the projects come
to fruition, the country’s CSP market will be one of
considerable size. That being said, in order to meet its
target, Saudi Arabia will need to deploy on average over
1.4 GW of CSP capacity per year starting in 2014, a feat
which it has yet to demonstrate it is committed to by
announcing the rollout of its first plants.
Since the forecast model utilized throughout this
exercise is based on a capacity-history within a market,
the forecasting of Saudi Arabia’s future capacity was not
performed. That being said, while the 25 GW K.A. CARE
initiative is set in motion, and until the Dhuba ISCC
project is confirmed, along with other initiatives such
as by SEC and Saudi Aramco, it is fair to say that CSP is
gaining momentum within the country and fulfillment
should be expected by the end of the decade.This
situation is represented in Figure 7(4), which shows
that Saudi Arabia will require, on an average basis, the
deployment of at least 1.35 GW of capacity per year
to meet its 2032 target of 25 GW, assuming that the
first round deploys 900 MW of CSP and the second
round deploys the 1,200 MW. The situation depicted
below therefore shows the urgency of execution that
will result in an increasing rate of deployment as time
elapses, in order to meet the 25 GW by 2032.
Figure 6(4): Installed CSP Capacity in Saudi Arabia Until 2024 (MW)
7,000
6,283
Optimistic
6,000
Conservative
Pessimistic
5,000
4,000
3,350
3,000
2,001
2,000
1,000
0
2006
2008
www.csptoday.com
2010
2012
2014
2016
2018
2020
2022
2024
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Figure 7(4): CSP Cumulative Energy Production in Saudi Arabia Until 2024 (TWh)
160
148.9
Optimistic
140
Conservative
Pessimistic
120
100
80
65.8
60
36.6
40
20
0
2006
2008
2010
2012
2014
The model used for Saudi Arabia is based on a pure
exponential function, set to meet the 2032 target
according to different escalating constants.
Conclusion
KSA only recently opened the generation segment of
its energy and water markets to private producers. In
2011, less than 1% of the energy generated was sourced
from renewable technologies whilst 65% was derived
from oil and 27% from natural gas. At the moment, the
country seems to be going against international trends
by favoring CSP over PV. Whether the overall goal of 25
GW of CSP will remain the same throughout the various
rounds of the procurement process remains to be seen.
That target is part of an overall 54.1 GW generation
capacity target that includes 16 GW of PV, and 13 GW
of wind energy, geothermal and waste-to-energy
power plants. It is a fact, though, that in a country
where power demand is forecasted to grow between
8% and 9% on an annual basis for the next ten years,
and where the internal energy demand is soaring, the
potential revenue from greater oil exports calls for the
development of new renewable energy capacities.
There is no doubt that many international companies
from the CSP industry have a strong interest in playing
a role within this very ambitious plan. The first demonstration projects were launched in 2011 by the German
company Solar Tower Systems Gmbh, who started the
construction of a 300 kW solar tower demonstration
plant, and in 2013 by the King Saud University, who
www.csptoday.com
2016
2018
2020
2022
2024
launched a Point Focus Fresnel collector. As a result of
these government-driven initiatives, the local market
is currently gaining momentum and it is expected that
the procurement process will prompt the development
of a domestic supply chain through the collaboration
with many international players.
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References
Alamoud, A. M., 2010. Potential Solar Application and Research Activities in Saudi Arabia. Technical presentation.
Professor of microelectronics and solar energy, King Saud University (KSU). Riyadh, Saudi Arabia.
Almashabi, D., 2013. Saudis OK $105 million of water, desalination and sewer work. Bloomberg. Available through:
<www.bloomberg.com/news/2013-08-20/saudis-ok-105-million-of-water-desalination-sewer-work.html>
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Journal%20of%20Technology/Spring2013/Article_13.pdf>. [Accessed 10 September 2013].
(VV.AA: Various Authors)
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Acronyms
ACRONYM
DEFINITION
BOO
Build-Own-Operate
CPP
Competitive Procurement Process
DEC
Dhuruma Electricity Company
DRAC
Developer Research Advisory Council
DNI
Direct Normal Irradiance
ECRA
Electricity and Co-Generation Regulatory Agency
EIA
Energy Information Administration
GCC
Gulf Cooperation Council
GCCIA
Gulf Cooperation Council Interconnection Authority
GIS
Gas Insulated Switchgear
IPP
Independent Power Producer
ISESCO
Islamic Educational, Scientific and Cultural Organization
IWPP
Independent Water and Power Producer
K.A.CARE
King Abdullah City of Atomic and Renewable Energy
KACST
King Abdulaziz City for Science and Technology
KAUST
King Abdullah University of Science and Technology
KSA
Kingdom of Saudi Arabia
MCI
Ministry of Commerce and Industry
NGC
National Grid Company
NGDC
Natural Gas Distribution Company
NREL
National Renewable Energy Laboratory
NWC
National Water Company
PME
Presidency of Meteorology and Environment
PPA
Power Purchase Agreement
RABEC
Rabigh Electricity Company
RAWEC
Rabigh Arabian Water and Electricity Company
RFP
Request for Proposal
RCI
Riyadh Chamber of Commerce and Industry
RRMM
Renewable Resource Monitoring and Mapping
SAGIA
Saudi Arabian General Investment Authority
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SASIA
Saudi Arabia Solar Industries Association
SEC
Saudi Electricity Company
SEPCO
Shuaibah Expansion Project Company
SEPC
Sustainable Energy Procurement Company
SERF
Sustainable Energy Research Fund
SETF
Sustainable Energy Training Fund
SESC
Sustainable Energy Service Centre
SIDF
Saudi Industrial Development Fund
SQWEC
Shuqaiq Water and Electricity Company
SWEC
Shuaibah Water and Electricity Company
SWCC
Saline Water Conversion Corporation
WEC
Water and Electricity Company
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Morocco
5
Morocco
By Marco Poliafico
Peer reviewed by Gianleo Frisari
Contents
List of Figures
123
List of Tables
123
Chapter Summary
125
Country Overview
125
5.1. Electricity Market
127
5.1.1. Electricity Consumption
128
5.1.2. Electricity Demand
128
5.1.3. Grid Transmission
129
5.1.4. Market Structure Diagram
129
5.2. CSP Market
130
5.2.1. CSP-Specific Policy
130
5.2.2. CSP Project Profiles
131
5.2.3. Noor CSP: Next Program
133
5.2.4. Future Developments
134
5.2.5. Local Content Requirements
134
5.3. Local CSP Ecosystem
134
5.3.1. Key Government Agencies
135
5.3.2. Utilities and Independent Power Producers
136
5.3.3. Permitting Agencies and Feasibility Study Providers
137
5.3.4. Local Consultants and R&D Bodies
139
5.3.5. Financing Organizations
140
5.3.6. Developers and EPC Firms
143
5.4.1. Local Component Supply
146
5.4.2. Raw Material Availability
147
5.5. Alternative CSP Markets
148
5.6. Market Forecast
148
Conclusion
149
References
150
Acronyms
152
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List of Figures
Figure 1(5): Direct Normal Irradiation in Morocco
126
Figure 2(5): Key Stakeholders in the Noor I CSP Project
132
Figure 3(5): Installed CSP Capacity in Morocco Until 2024 (MW)
149
Figure 4(5): CSP Cumulative Energy Production in Morocco until 2024 (TWh)
149
List of Tables
Table 1(5): CSP Drivers and Barriers in Morocco
127
Table 2(5): Morocco CSP Projects
131
Table 3(5): Ministries and Government Agencies in Morocco
135
Table 4(5): Major Utilities and Independent Water and Power Producers in Morocco
136
Table 5(5): Permitting Agencies and Environmental Assessment Agencies in Morocco
138
Table 6(5): Consultants and R&D Bodies in Morocco
139
Table 7(5): Main Funding Institutions and Banks in Morocco
141
Table 8(5): Developers and EPC Firms in Morocco
144
Table 9(5): CSP Components and Suppliers Available Locally in Morocco
146
Table 10(5): Raw material available locally in Morocco and suppliers
147
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Chapter Summary
According the CSP Today 2013 Markets Scorecard,
Morocco is ranked as the third most promising CSP
market, with an optimistic forecast of 5,275 MW of
installed CSP capacity by 2024, and a pessimistic
forecast of 845 MW by 2024.
Morocco is one of the world’s most energy-deprived
countries and depends on external sources for nearly
97.5% of its energy needs. As the largest energy
importer in North Africa, the country suffers great
economic pressure due to the volatility of fuel prices.
However, Morocco also has one of the best solar
resources in North Africa, and thanks to its strategic
geographic position, it aims to become the heart of the
Mediterranean interconnection between the Maghreb
region and Europe, acting as the a regional crossroads
for power exchange.
Morocco’s national energy strategy was launched in
2009 alongside the Moroccan Solar Plan. Furthermore,
the government has made visible efforts in recent
years to improve the regulatory framework, and has set
an ambitious target of 2 GW of solar power by 2020.
Although no specific policy regarding local content
requirements has been introduced at the time of
writing this report, the Noor I project used a stringent
local content requirement of 30% in its bidding process.
Local CSP projects like Noor I are already triggering the
development of domestic manufacturing expertise and
of training and R&D activities. For example, Moroccan
stakeholders and policy makers have expressed a clear
interest in developing research and training activities
through collaboration with European institutions.
Despite the financial challenges typically associated
with CSP projects, Morocco’s renewable energy initiative
received strong financial backing by international
bodies, such as the Clean Technology Fund, which is
managed by the African Development Bank and the
World Bank. Amongst the alternative CSP markets,
seawater desalination is a very promising application for
CSP technology in Morocco. At the time of writing this
report, Morocco had one operational CSP plant with
an installed capacity of 20 MW; one under construction
(160 MW); two under planning (100 MW and 200 MW);
and one announced (20 MW), according to the CSP
Today Global Tracker. Country Overview
Morocco
Solar Resource (average annual sum of DNI):
2,500 kWh/m²/year
Size: 710,850 km²
Population (2012): 32.59 million
GDP per capita (2012): US$ 2,925
Installed power capacity: 6.3 GW
Annual electricity consumption: 31 TWh
Expected annual electricity demand in 2020:
52 TWh
Electricity Mix by Installed Capacity (2012)
Coal 34%
Oil 25%
Natural gas 11%
Electricity Imports 15%
Hydro 11%
Other renewables 4%
Known Energy Resources
Coal, Natural Gas (98% imported), Hydro, Wind, Solar
Potential Markets for Industrial CSP Applications
Desalination
Cooling Load
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Figure 1(5): Direct Normal Irradiation in Morocco
Source: SolarGIS © 2013 GeoModel Solar s.r.o.
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Table 1(5): CSP Drivers and Barriers in Morocco
Drivers
Barriers
Strong policy oriented toward the development of
renewable energy
Geopolitical factors increase the perceived risk for investors
Existing industries for metal structures, through which
electric and electronic equipment can support the value
chain
The institutional, fiscal and legal framework needs to be
improved. in particular with relation to tailored feed-in-tariff
schemes to make investment more attractive
Low labor cost
The necessary infrastructures are not fully developed
Excellent solar resources
Lack of skilled work-force and limited know-how in CSP
technology
Land availability
Technical weakness of the transmission grid to support the
implementation of renewable power plants
Growing electricity demand
Water scarcity
Funding support from international institutions
Lack of strong manufacturing supply chain and local CSP
industry, although this is progressively developing
Potential for exporting electricity to Europe
Good potential for hybridization
5.1. Electricity Market
Morocco is one of the world’s most energy deprived
countries and depends on external sources for up to
97.5% of its energy needs, according to the African
Development Bank (2012). This aspect places the
country under great economic pressure due to the
volatility of fuel prices. It is the largest energy importer
in North Africa and, according to the Moroccan Ministry
of Energy and Mining, the total installed capacity of
renewable energy not including hydropower was
approximately 300 MW in 2011. However, according to
the information provided by the Renewable Energy and
Energy Efficiency Partnership (REEEP) policy database
and the web site www.reegle.info, the country has more
than 15% of the world reserves of oil shale. Currently,
the exploitation of these deposits has not been undertaken due to technical and economic unfeasibility.
Looking at the generation side of the energy market,
electricity supply is strongly dominated by conventional
electricity generation whilst hydro power is highly
variable from year to year, although its installed capacity
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only increased by 2.4% in the last ten years. Since 2002,
imports have gained major importance to effectively
cover the country’s demand peaking at a total of 18.9%
of electricity generation in 2009.
The Ministry of Energy, Mining, Water and Environment
(MEMEE) is in charge of the functionality of the market,
ensuring energy security and implementing overall
strategy. Two subsidiaries of the MEMEE with relevant
roles within the energy market are the Directorate for
Electricity and Renewable Energies (DEER) and the
Moroccan Center for Renewable Energy Development
(CDER). Both of them are active in the dissemination
of knowledge regarding, and development of, the
renewable energy sector.
An industrial lobby specifically active in solar energy
is “L’Association Marocaine des Industries Solaires et
Eoliennes” (AMISOLE), or The Association of Solar and Wind
Power Enterprises, which acts as an umbrella organization
representing the interests of companies and individuals
with professional involvement in renewable energies.
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Morocco does not have an agency for the regulation of
the electricity market yet. The government is planning
legislation for the establishment of an independent
regulatory body for the energy sector, but the electricity
market is still largely unregulated. There is limited
regulation applied to the low-voltage residential market,
primarily overseen by the DEER. The same agency is
responsible for the demand-side management activities, promotion of energy efficiency and monitoring
development programs in the electricity sector. The
tariff rates are fixed by the government directly.
The main player in the energy market of Morocco is the
Office National d’Electricite (ONE) founded as a legally
and financially autonomous public entity in 1963,
working closely with the MEMEE. The private sector
can access the generation and distribution segments
through PPAs signed with ONE (also due to the absence
of any other regulatory body). Although the market has
been open to private players since 1994, the pace of
this process picked up since 2008, when it became clear
that growing energy demand was a threat to the long
term security and reliability of electricity supply.
Today, Morocco is one of the most deregulated markets
in the whole of the Middle East and North Africa (MENA)
region and is planning to move towards an electricity
market which should be divided into an open segment
and a regulated one. Customers will be able to access
one of the two segments according to a specific set of
technical criteria which are yet to be identified.
Other than ONE (approximately 35%), the generation
sector is nowadays populated by independent
producers (approximately 50% of the installed capacity)
and auto-producers (less than 1%), although imports
have a relevant role in the overall energy mix (varying
around 15%). The national company has coal, hydro and
fuel oil within its power plants and controls the market,
while independent suppliers (mainly JLEC, Théolia
and EET) have extended their activity towards gas and
renewable energy generation technologies. Private
businesses can build power plants with a capacity of up
to 50 MW. However, if the capacity installed is larger, the
project is subject to an open tendering process and all
of the power produced needs to be sold to ONE.
ONE operates as the single buyer for any electricity
produced by the private sector. Auto producers =
typically generate their own needs, and access to the
grid is not guaranteed by the Transmission System
Operator (TSO) unless renewable energy technologies
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are employed (in which case access must be granted).
The TSO charges a transportation fee for any electricity
sent to the grid. However, if the electricity comes from
renewable energy, it is rewarded with a 20% premium
on top of the normal high-voltage grid price paid
by the TSO through an incentive package under the
EnergiePro Scheme.
Research and scientific capacity in the renewable
energy sector remains low, and policies still need to
be developed further. Legal and economic issues
need to be addressed more thoroughly, for instance,
planning and permitting procedures, incentives and
support schemes, technology assessments and grid
infrastructure planning.
5.1.1. Electricity Consumption
Electricity consumption in Morocco has considerably
grown over the last few years, imposing challenges
on the country’s energy sector. The growth trend has
been irregular: between 2007 and 2010, electricity
consumption increased by 3.7% to 5.8% per year
according to an academic research carried out in
collaboration with a local university and the Germanybased Fraunhofer Institute for Wind Energy and Energy
System Technology (IWES), while between 2003 and
2006, it was more moderate, increasing by 6.6% to
11.5%). In 2011, consumption grew by more than 8.4%
in terms of overall power and 11% in terms of electricity
exclusively). Domestic energy consumption between
2001 and 2011 increased at an average rate of 6.1%.
5.1.2. Electricity Demand
The Ministry of Energy, Mining, Water and Environment
(MEMEE) expects energy demand to grow by 6.9%
and 8.7% per year in the next decade. This trend is
expected as a result of economic growth alongside
the expanding electrification to areas without power.
Furthermore, the development of large infrastructural
projects and improvement of the standard of life are
contributing to the demand on electricity. Therefore,
there is a clear need for huge investments in order to
meet future demand.
The daily electricity demand curve in Morocco does not
change significantly throughout the year, with the usual
late-evening peak caused mainly by lighting loads.
Such an electricity demand curve offers great potential
to CSP technology equipped with storage to enable
generation at peak hours immediately after the sunset.
Later in the evening, demand drops to 60% of the peak
values. To match this load curve, the storage capacity of
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CSP plants should not be higher than four to five hours.
This was one of the requirements in the bidding process
for the first CSP plant in Ouarzazate, where a three-hour
storage capacity was selected by MASEN.
5.1.3. Grid Transmission
Morocco’s transmission grid is owned by the state
utility ONE. It covers the entire country (with 96% of
the population reached by electricity) and is connected
to the Algerian and Spanish grids. The capacity of the
connection between Algeria and Morocco is 1.2 GW.
Although losses in the network account for less than
5%, ONE aims to strengthen and extend the grid since
according to the utility, there is insufficient grid capacity
for renewables in the south.
The distribution of electricity to the final consumers is
the responsibility of ONE for most of the country, as well
as seven local municipal authorities and four private
companies using ONE’s grid. In 1996, ONE launched a
national electrification program named Programme
pour l’Electrification Rurale Global (PERG), and the rate
of rural electrification reached 97.4 % by the end of
2011.
The transmission sector works as a state-controlled
monopoly market. ONE is the TSO and owns the
entire transmission network. The grid is not fully able
to integrate renewable power and requires further
investment to guarantee stability over short periods of
low voltage. On top of the 20,000 km of high-voltage
lines across the country, the grid includes the interconnections with Algeria and Spain, which have a capacity
of 1.2 GW and 1.4 GW respectively.
The distribution can also be delegated to private
companies or communal organizations. There are
currently eleven distributing entities other than ONE
who cover approximately 55% of the market and also
serve all of the country’s rural areas. The distributing
companies are seven municipal authorities (Marrakech,
Fès, Meknes, Tétouan, Safi, El Jadida-Azemmour and
Larache-Ksar El Kébir) and four private companies
operating in Casablanca, Rabat-Salé, Tanger and Kénitr
5.1.4. Market Structure Diagram
Regulators
Generation
None
ONE
Independent
Producers
Transmission
Distribution
AutoProducers
Imports
ONE
ONE
7 Municipal
Authorities
4 Private
Licensees
Customers
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5.2. CSP Market
Morocco has almost no fossil fuel production capacity
and as such heavily depends on imports to satisfy its
energy needs. On the other hand, the country enjoys
one of the best solar resources in the North of Africa.
Due to increasing electricity demand and growing
population, there is an urgent need to augment
installed capacity to address energy security issues. For
this reason, the Moroccan authorities have developed
a proactive energy policy backed by the development
of a data system, which includes demand surveys and
performance indicators.
Morocco has one of the best solar resources in
North Africa and launched the Moroccan Solar Plan
(MSP) in 2009 with an overall target of 2 GW solar
energy installed capacity by 2020. This, according to
government projections, will supply approximately 14%
of the country’s electricity demand. Including other
renewable energy sources like wind energy, the overall
target is 42% of electricity generation capacity by 2020.
The policy framework also includes other targets related
to energy efficiency in buildings, industry and transportation. The final aspiration is to become a net energy
exporter to Europe.
This ambitious plan takes into consideration the idea
that Morocco could become an exporter of electricity
to Europe. It is in a very strategic position from a
geographic point of view and can become the heart
of the Mediterranean interconnection between the
Maghreb region and Europe. A transmission capacity of
1.4 GW already exists between Morocco and Spain.
However, this objective is not realistic - at least, not in
the short term. The Ouarzazate project, for instance,
will supply electricity at approximately 0.15 €/kWh in
Phase One, now called Noor 1. This is more expensive
than some renewable energy projects in Spain that are
able to sell electricity at between 0.05 and 0.06 €/kWh
(in particular, wind power projects). Furthermore, Spain
already has an over-supply of electricity, meaning it is
unlikely to import from Morocco. There is potential that
Morocco could export electricity to Germany and the
United Kingdom, but this would involve the development of costly transmission networks.
The strong competition on the cost front poses some
doubts as to whether or not Morocco will be able to
attract the necessary investment to develop the overall
plan. Generally speaking, one of the issues for funding
solar energy is how competitive it would be against
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other sources of energy. For this reason, the Ministry
of Energy is still looking with interest at conventional
power generation technologies and has granted the
construction of a coal-fired plant which should go
online by 2017. This could jeopardize the economic
feasibility of other renewable energy projects.
5.2.1. CSP-Specific Policy
The Renewable Law 13-09, approved in 2010, aims to
promote the implementation of renewable energy
generation technologies and opens the market to the
private sector. The National Agency for Renewable
Energy and Energy Efficiency Development (ADEREE)
is in charge of implementing Morocco’s national plan
for renewable energy and energy efficiency. Other
policy stakeholders are the Société d’Investissements
Énergétiques (SIE), a Moroccan investment fund created
for developing and promoting renewable energy and
energy efficiency, and the Energy Development Fund
(FDE), created to support the national energy strategy
and strengthen Morocco’s energy independence. The
FDE was granted USD 1 billion by the Kingdom of Saudi
Arabia, the United Arab Emirates and the Hassan II Fund
for Economic and Social Development.
The national policy strategy was launched in 2009 and
entails an overall investment in the order of USD 13
billion. It focuses on security of supply, diversification
of national energy sources, accessibility of energy,
lowering the cost of energy, energy efficiency and
environment and safety. The Moroccan Solar Plan (MSP)
was announced by the government in the same year
and entails an investment of USD 9 billion to achieve
2 GW of solar energy installed capacity by 2020 in five
sites across the country. The five locations identified are
Laayoune (Sahara - 500 MW), Boujdour (Western Sahara
- 100 MW), Tarfaya (south of Agadir - 500 MW), Ain Beni
Mathar (center - 400 MW) and Ouarzazate (500 MW).
The entire project is expected to be completed in 2019.
The plan aims to produce 42% of power needs from
renewable energy sources, including hydro and wind
energy (14% each). This plan has been partially delayed
by the global economic recession.
In recent years, the government has made relevant
efforts to improve the regulatory framework and
promote the development of the renewable energy
sector in the country. In January 2009, Morocco was
one of 75 founding members of IRENA, the International
Renewable Energy Agency. In 2011, a memorandum of
understanding in relation to the development of solar
energy projects was signed between the DESERTEC
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Industrial Initiative (Dii) and the Moroccan Agency for
Solar Energy (MASEN). The former acts as feasibility
advisor while the latter is a joint-stock publicly funded
public-private venture set up in 2010 to act as a project
developer. Stakeholders of MASEN include the Hassan
II Fund For Economic and Social Development, Energy
Investments Company and the Office National de
l’Electricité (ONE).
MASEN is responsible for the whole MSP and works
in cooperation with ONE and the Moroccan Ministry
of Energy, Mines, Water and Environment (MEMEE).
It manages the procurement of the projects through
the tendering and financing activities. MASEN will also
act as single buyer of the electricity produced by CSP
plants through PPA agreements. The tariffs of the PPAs
awarded to renewable energy projects vary according
to the time of generation. Although different hours
are used throughout the year; production of electricity
between 5pm and midnight will receive a peak tariff
15% higher than the off-peak tariff. The electricity
produced will be sold to ONE at a price closer to the
current Moroccan grid price and hence much lower
than the one set in the PPA. This difference is paid by
MASEN itself though the financial support received
by the various national or international sponsors. The
electricity produced is then distributed by ONE.
The tender procedure selected by MASEN is an international public competitive bidding process where the
bidder offers a lower tariff, which must fulfill certain
technical specifications set by MASEN. A Build, Own,
Operate and Transfer (BOOT) scheme for 25 years is
used for renewable power plants. In relation to financial
schemes, there is no Feed in Tariff scheme approved so far.
5.2.2. CSP Project Profiles
At the time of writing this report, Morocco had one
operational CSP plant with an installed capacity of 20
MW; one under construction (160 MW); two under
planning (100 MW and 200 MW); and one announced
(20 MW), according to the CSP Today Global Tracker.
Table 1 showcases all CSP projects in Morocco at various
stages of development.
Table 2(5): Morocco CSP Projects
Storage
Capacity
Title
Country MWe
Technology
Status
State/Region Developer
Noor 2
Morocco 100
Tower
Planning
Souss Massa
Draa
MASEN
TBC
Ain-BeniMathar
ISCC
Morocco 20
Parabolic
Trough
Operation
Oujda,
Oriental
Abener
-
Noor 3
Morocco 200
Parabolic
Trough
Planning
Souss Massa
Draa
MASEN
TBC
Noor I
Morocco 160
Parabolic
Trough
Construction
Sousse Massa
Draa
Acciona/ACWA/
Aries/Sener/TSK
3
TBC
Announced
Tan-Tan
TBC
Tan Tan
CSP Desal
20
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
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Morocco
The Ain Beni Mathar ISCC plant was commissioned in
2010 and has an installed capacity of 472 MW, including
20 MW of CSP
Meanwhile, the Noor I project was awarded to the
Saudi International Company for Water and Power
(ACWA) in September 2012 by MASEN, for a value of
USD 850 million. Under the contract, ACWA will build
and operate the 160 MW solar plant and will supply
electricity at USD $0.19 /kWh. According to research
carried out by CSP Today, the tariff submitted by ACWA
was 28.8% lower than that of the second bidder. ACWA
recently awarded an EPC contract to a consortium
formed by the Spanish TSK Electrónica y Electricidad,
Acciona Infraestructuras, Acciona Ingeniería and Sener
Ingeniería y Sistemas. The operation and maintenance
will be undertaken by a consortium led by NOMAC, a
subsidiary of ACWA.
Construction on Noor I started in May 2013 and
commercial operation of the plant is expected to
start in the second half of 2015. The first phase of the
project received funds of €345 million from European
bodies, including the European Investment Bank
(€100 million as a loan), the European Union NIF (€30
million grant) and the French Development Agency
(€100 million loan). Through the KfW Development
Bank, the German environment ministry provided
€15 million in grant while the German Ministry for
Cooperation (BMZ) provided a loan of €100 million.
KfW will continue to support the overall development
of CSP plants in Morocco with a further €650 million in
the coming years. Financial support was also provided
by the African Development Bank and the World Bank
(€168 million and €140.25 million respectively through
a disbursement of funds from the Clean Technology
Fund), and MASEN (€265.28 million) amounting to a
total of €1,042.32 million.
Figure 2(5): Key Stakeholders in the Noor I CSP Project
Government of Morocco
Stakeholder
description and role
Financing role
Moroccan
State
• Shareholder in MASEN
Subsidizes difference between
two PPAs present in the project
through the State Budget
Ministry of
Interior
• Manages special community fund
N/A
MASEN
• Moroccan Agency for Solar Energy
• Limited liability company (LLC) with the Moroccan State,
ONE, Fonds Hassan II and the Société d’Investissements
Energétique (SIE) as equal shareholders
• Responsible for managing bidding process and selection of
private consortium
• Monitor SPC
• Ownership of the CSP plant upon commissioning
• Semi-annual financial reports, independent annual audit and
progress reporting to donors (financial statements, physical
progress and procurement)
• Support R&D, training and technical innovation
• Implementation of the FESMP1
• Finance and manage the
Associated Facilities (for water
supply, grid connections and
land)
• 25 percent equity stake in SPC
• Onward lends IFI debt and
manages reporting to IFIs
ONEE
• Office National de l’Eau et de l’Electricité incorporating Office
National de l’Electricité and Office National de l’Eau Potable
• Construction of the transmission lines and water supply
infrastructures
• Power dispatch, transmission and distribution
• Environmental Managment Plan for transmission lines and
water supply
• Shareholder in MASEN
Required to purchase all power
generated by the plant from
MASEN
vate
www.csptoday.com
Private
• Project implementation including design, construction andCSP Today Markets Report 2014 | 132
performance optimization of the plant
75 percent equity stake in the
• Preparation and implementation of project specific ESIA and
Private
ONEE
• Office National de l’Eau et de l’Electricité incorporating Office
National de l’Electricité and Office National de l’Eau Potable
• Construction of the transmission lines and water supply
infrastructures
• Power dispatch, transmission and distribution
• Environmental Managment Plan for transmission lines and
water supply
• Shareholder in MASEN
Required to purchase all power
generated by the plant from
MASEN
Private
Consortium
• Project implementation including design, construction and
performance optimization of the plant
• Preparation and implementation of project specific ESIA and
ESMP2, financial reporting
• Project Implementing Entity
75 percent equity stake in the
SPC
• African Development Bank
• Channel CTF financing
• Provide additional
concessional financing
towards construction
• World Bank Group and International Bank for Reconstruction
and Development
• Support to MASEN and Government of Morocco to initiate
the project
• Channel CTF financing
• Provide additional
concessional financing to
support Government’s PPA
subsidy
• European Investment Bank
• Coordinates European donors
Concessional finance provider
• L’Agence Française de Développement, German
Development Bank and German Development Cooperation
Co-lenders linked to EC NIF
grant
• German Ministry of Environment, European Commission
Neighbourhood Investment Facility
Grant providers
AfDB
International donors
manages reporting to IFIs
Morocco
Govern
progress reporting to donors (financial statements, physical
progress and procurement)
• Support R&D, training and technical innovation
• Implementation of the FESMP1
WBG/IBRD
EIB
AFD, KfW/BMZ
BMU, EC NIF
Source: San Giorgio Group Case Study: Ouarzazate I CSP Update
The San Giorgio Group, as part of the Climate Policy
Initiative (CPI), have provided a detailed analysis of the
Ourazazate 1 CSP project (now known as Noor I). Key
findings from their research indicate that the project
will be approximately 25% cheaper than initial forecasts,
making it one of the least expensive large-scale CSP plants.
NOOR II (200 MW Parabolic Trough):
5.2.3. Noor CSP: Next Program
3. International Power SA (Dubai branch of GDF Suez)
and Abu Dhabi Future Energy Company PJSC/MASDAR.
In January 2013, MASEN launched a Request for
Qualification (RfQ) process to select the developers
of the second phase of Ouarzazate plant, consisting
of 300 MW. The bid includes two projects, a 100 MW
central tower technology plant (Noor III) and 200 MW
parabolic trough plant (Noor II). Both projects need
to be equipped with storage. MASEN will provide the
land as well as buy the electricity generated through
a 25-year long Power Purchase Agreement (PPA).
Furthermore, MASEN intends to take between 20% and
30% ownership of the project company. The call for RfQ
expired in March 2013 and included a strong recommendation (but not a requirement) for local production
of equipment and components. In May of the same
year, the two projects jointly received USD 218 million
from the Clean Technology Fund (CTF). On 1 August
2013, MASEN announced the shortlisted pre-qualified
bidders for the Noor II and Noor III projects.
www.csptoday.com
1. Abengoa SA and Abengoa Solar;
2. International Company for Water and Power Projects
(ACWA Power) and Sener Grupo De Ingeniería SA; and
NOOR III (100 MW Tower):
1. Abengoa SA and Abengoa Solar;
2. EDF SA, EDF Energies Nouvelles SA, Brightsource
Energy Inc, Brookstone Partners Morocco SA, Alstom
Power System SA and Mitsui & Co Ltd;
3. International Company for Water and Power Projects
(ACWA Power) and Sener Ingeniería y Sistemas; and
4. International Power SA (Dubai branch of GDF Suez),
Solar Reserve LLC and Abu Dhabi Future Energy
Company PJSC/MASDAR.
The RFP launch is expected to take place in the fourth
quarter of 2013.
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Morocco
5.2.4. Future Developments
With an ambitious target of 2 GW of solar power
by 2020, MASEN has seven years left to allocate
the remaining 1.5 GW. In addition to the 500 MW
Ouarzazate complex, MASEN has identified a number of
additional sites for future solar deployment, including:
Ain Beni Mathar: 400 MW to be commissioned in 2016
Foum Al Ouad: 500 MW to be commissioned in 2017
Boujdour: 500 MW to be commissioned in 2018
Sebkha Tah: 100 MW to be commissioned in 2019
According to the World Bank (2011), Ain Beni Mathar
has received a USD $ 43.2 million grant from the Global
Environment Facility, as well as credits from the African
Development Bank, Instituto de Credito Official (Spain)
and equity from the Moroccan state-owned utility
Office National de l’Electricité (ONE).
practical example of this commitment is the creation
of MASEN, which provides a positive environment that
attracts the attention of international CSP players and
financing institutions. As a result, the country represents
one of the most promising solar markets.
From a technological point of view, local stakeholders
indicate that the Fresnel option might give an
additional advantage by providing shadow on the
ground, hence enabling the practice of agricultural
activities in association with the development of energy
facilities. However, a critical aspect to consider is the
electricity daily demand trend which has a peak after
the sunset and therefore envisages the implementation
of storage capacity as part of the optimal technology
solution.
5.2.5. Local Content Requirements
At the time of writing this report, there was no specific
policy regarding local content requirements in Morocco.
However, the Ouarzazate I project included a stringent
local content requirement of 30% in its bidding process.
5.3. Local CSP Ecosystem
The Moroccan market is strongly driven by the overarching goal of developing a vibrant renewable energy
sector to increase energy security and meet growing
domestic energy needs whilst reducing dependence
on energy imports. Local policy makers are committed
to exploiting the strong solar resources available and
take advantage of the strategic position within the
Mediterranean Sea that could allow the country to
export electricity to Europe. This aspect would secure
financial backing from European institutions and
would tighten economic and geopolitical links with
those countries. At the same time, the development of
large-scale renewable energy projects would act as an
initiator of local manufacturing expertise which in turn
could help Morocco gain a central role in the development of the CSP industry in the entire MENA region.
Policy makers have also become aware of how critical
the development of the right regulatory and industrial
conditions can be. While on the one hand they
recognize the importance of gaining momentum to
secure an advantage against other countries, they also
stress the importance to take time to properly set the
ground for a strong and clear roadmap. For the same
reason, they are making a genuine effort to coordinate
and create synergies with all potential stakeholders. A
www.csptoday.com
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Morocco
5.3.1. Key Government Agencies
Table 3(5): Ministries and Government Agencies in Morocco
Name
Roles and Responsibilities
Previous Renewable Energy
Programs
Agency for the Development ADEREE is a Moroccan institution that facilitates
of Renewable Energy and
and implements renewable energy strategies,
Energy Efficiency (ADEREE)
policies and incentive programs. It evaluates
the cartography of resources in renewable
energy and proposals of solar & wind energy
development zones, and proposes areas to be
allocated for the construction of renewable
facilities. Formerly known as Renewable Energy
Centre (CDER).
Ministry of Energy, Mines,
Water and Environment
(MEMEE)
MEMEE is responsible for the development of
Morocco’s national energy policy. It develops
conditions that ensure energy security and
access to energy, for both the rural and urban
populations.
Ministry of Industry, Trade
and New Technologies
(MCINET)
MCINET, together with the Ministry of Energy,
Mines, Water and Environment (MEMEE) are
jointly developing a national program consisting
of incentives and specialized training aimed
at attracting local & foreign investment to the
renewable sector.
Ministry of Interior
The Ministry of Interior is the custodian of
public collective land in Morocco and is in
charge of commercial, private and public land
acquisitions.
O.N.E. purchased and financed
land for the ISCC Ain Beni Matar
power plant from the Ministry of
Interior, and two land parcels for
the gas pipelines were acquired
in the same manner.
Moroccan Agency for Solar
Energy LLC (MASEN)
Established in 2009 with the Government, O.N.E.,
Fonds Hassan II, and Société d’Investissements
Energétique as equal shareholders, MASEN is
entrusted by the Government to develop at
least 2,000 MW of grid-connected solar power
by 2020. This includes conducting technical,
economic & financial studies, supporting
research & fund-raising, seeking involvement of
local industry for solar projects and establishing
associated infrastructure.
MASEN entered into a cooperation project for the Ouarzazate
CSP plant with the ACWA
power-led consortium. The
agency oversees Morocco’s CSP
projects.
www.csptoday.com
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Morocco
5.3.2. Utilities and Independent Power Producers
Table 4(5): Major Utilities and Independent Water and Power Producers in Morocco
Name
Roles and Responsibilities
Previous Renewable Energy
Programs
Abu Dhabi National Energy
TAQA is an independent power producer and
Company (TAQA) North Africa majority owner of the facilities that provide
98% of Abu Dhabi’s water and electricity
requirements. TAQA’s Energy Solutions division is
dedicated to alternative and technology-driven
initiatives for long-term energy production.
TAQA owns, operates and maintains the Jorf
Lasfar power plant in Morocco, which is a
coal-fired plant comprising two 330 MW generation units and two 348 MW generation units
located on the Atlantic Coast. Jorf Lasfar Electric
Co. is an independent power producer that has
a long-term purchase agreement with O.N.E.
In the UAE, TAQA is implementing
a pilot project to use solar energy
for air-conditioning systems using
concentrated solar panels called
Chromasun Micro-Concentrators.
Amendis
Amendis provides water, wastewater and
electricity services in Tangiers and Tetouan and
is a concession holder in both cities. Amendis is
a subsidiary of the French multi-national group
Veolia Environnement.
Energie Electrique de
Tahaddart / Electric Power of
Tahaddart (EET)
EET is an independent power producer that
owns and operates the Tahaddart CCGT Power
Plant, a 384 MW combined cycle plant in
Tahaddart, 30 km south of Tangiers. The project
has a long-term purchase agreement with O.N.E.
GDF SUEZ Energy Meta
French independent power producer offering
business development, construction, and
operations & maintenance services. Investing in
the Middle East and Africa since 1994.
www.csptoday.com
GDF Suez will build & operate Tarfaya,
Africa’s largest wind farm, in southern
Morocco with an output of 300 MW.
The utility is investing USD $122
million in the project, which is due to
enter service at the end of 2014. It also
has solar power plants in Northern
Spain and is developing a solar farm in
Thailand with Glow Energy. In North
America, GDF SUEZ has 20 MW of solar
projects under construction.
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Morocco
Lyonnaise des Eaux de
Casablanca SA (Lydec)
Morocco-based company engaged in distribution of water and electricity, wastewater
collection and storm water and public lightning
for five million people. Lydec is the concession
holder in Casablanca, and is owned by SUEZ
Environnement (51%), the Moroccan insurance company RMA Watanya (15%) and the
Moroccan investment company FIPAR-Holding
(19.75%).
Office National de l’Electricite State-owned company that purchases about
(O.N.E.)
95% of the power generated in Morocco
through PPAs, and all the imports from Spain
and Algeria. Responsible for guaranteeing
generation, transmission and distribution of
electricity. It also has the exclusivity to plan the
means of generation and launch tenders for
units with power greater than 10 MW. Since
1994, O.N.E. has been allowed to sign contracts
with private generators. A new renewable
energy law was also set up recently to allow,
under certain conditions, direct sales of
electricity generated from renewable energy to
large customers or to exports without necessarily transiting through O.N.E.
Generation offtaker for the 160 MWe
Noor 1 CSP Plant (Ouarzazate Phase 1)
and responsible for the construction of
the transmission infrastructure of the
project. Owner and generation offtaker
for the ISCC Ain Beni Matar power
plant. Prepares environmental and
social assessments for its facilities.
Office National de l’Eau
Potable (ONEP)
A public organization in charge of drinking
water supply planning on a national scale; water
distribution on behalf of the communes; and
technical assistance in terms of water quality
monitoring.
Responsible for the construction of
the water supply infrastructure for
Ouarzazate CSP Project, and for the
preparation of environmental and
social assessments for its facilities.
Redal
Provides water, wastewater and electricity
services in Rabat and is the concession holder
in the capital city. A subsidiary of the French
multi-national Veolia Environnement.
5.3.3. Permitting Agencies and Feasibility Study
Providers
The authorization process entails two different steps.
Initially, a developer receives a temporary permit for
the construction of the renewable energy facility.
Only at the second stage will a final permit for the
operation of the plant be granted. Furthermore, this
final authorization is subject to starting the generation
of electricity within one year from the date it is released.
According to the current regulatory regime, the permit
is also withdrawn if generation is suspended for more
than two years in a row. Specific technical and financial
criteria are considered in order to grant the permit for
construction of a power plant.
www.csptoday.com
A critical aspect to take into account at the planning
stage is the set of environmental impacts with particular
regard to water scarcity. Although a World Bank report
identified the impact of the first Ouarzazate plant as
“minor to moderate”, there is concern that the overall
impact might significantly grow when other plants are
built. Table 5 displays a list of permitting and environmental assessment agencies operating in Morocco.
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Morocco
Table 5(5): Permitting Agencies and Environmental Assessment Agencies in Morocco
Name
Roles and Responsibilities
Centre Marocain de
Production Propre /
Moroccan Cleaner
Production Center
(CMPP)
CMPP provides technical assistance to the
Moroccan industry to implement environmental technologies & management systems
to improve their economical & environmental
performance. The Centre is part of the UNIDO/
UNEP National Cleaner Production Centers
- financed by the Swiss State Secretariat for
Economic Affairs.
Comité National
des Etudes d’Impact
Environnementales /
National Environmental
Impact Assessment
Committee (CNEIE)
CNEIE was formed to support the development of Environmental Impact Assessment
legislation and regulations. The Committee
provides advice to the Environmental Authority
on the approval / refusal of proposals.
Department of
Environment (DE) Ministry of Energy,
Mines, Water and
Environment
The DE of the State Secretariat for Water and
Environment (SEEE) within the Ministry of
Energy’s (MEMEE) Department of Energy is
responsible for coordinating environmental
management.
Directorate for
Electricity and
Renewable Energies
(DEER) - Ministry of
Energy, Mines, Water
and Environment
DEER is a subsidiary of the Ministry of Energy,
Mines, Water & Environment (MEMEE), and
has divisions for electrical equipment & rural
electrification; distribution & electric markets;
renewable energies; and nuclear safety. Funds
for DEER’s operations are allocated directly
from the national budget.
L’Institut de Recherche
en Energies Solarie et
en Energies Nouvelles
(IRESEN) or Institute for
Research in Solar and
Renewable Energy
IRESEN conducts research projects, and funds
R&D capacities in the field of renewable
energy.
On June 3, 2013, IRESEN launched a
request for proposals to fund R&D projects
in solar thermal energy applications and
technologies, with a maximum financial
contribution to each co-funded R&D project
of USD$593,000. (http://www.iresen.org/
download/Call_for_proposals_InnoTherm_
III_2013.pdf ). IRESEN signed a cooperation
agreement in Oct 2011 with the German
Aerospace Center (DLR) that will regulate all
future activities between the two bodies in
the field of CSP. The cooperation covers joint
research activities such as the organization
of workshops, joint publications, exchange of
personnel and scientists.
www.csptoday.com
Previous Renewable Energy Programs
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Morocco
Moroccan Association
of Solar Industries and
Windmills (AMISOLA)
AMISOLA promotes the interests of industries
and professionals working in Morocco’s solar
and wind energy industries.
5.3.4. Local Consultants and R&D Bodies
Locally based projects like Ouarzazate are triggering
the creation of local manufacturing expertise and
the development of training and R&D activities from
local business entities. For instance, the German
Aerospace Center (DLR) is planning to set a new
solar power research and test center in Morocco on
behalf of MASEN. The project is partially funded by the
German Government and its long-term objective is the
development of a competitive solar power industry
in the country through the construction of pilot and
demonstration-scale plants for the evaluation of solar
technologies. Local stakeholders and policy makers
have already expressed a clear interest in developing
research and training activities through collaboration
with European institutions because they want to raise
their industrial profile and move towards a leading
position for solar technologies within the whole region.
Table 6(5): Consultants and R&D Bodies in Morocco
Name
Roles and Responsibilities
Previous CSP Projects
Citibank
Citibank is the consumer banking arm of U.S.
financial services conglomerate Citigroup. Citi’s
operations cover investment banking, capital
markets, equity sales & distribution businesses,
transactions services, equity research, and
global Islamic banking serving the MENA
region.
Citibank is the financial advisor for
MASEN on the development of
Ouarzazate Phase One project.
CNIM Group - Babcock
Wanson Maroc
CNIM Group designs and produces turnkey
industrial solutions. It provides consulting and
expertise through technical assistance, training,
troubleshooting, and operational analyses
on the maintenance and rehabilitation of
thermal power facilities and waste-to-energy
conversion.
CNIM Group is the developer, owner
and operator of the 1 MWe eCare CSP
demonstration project in Morocco.
Deloitte Morocco
Deloitte is a global U.S. based professional
services firm providing audit, tax, consulting,
enterprise risk and financial advisory services.
Deloitte Morocco is the fiscal advisor
for MASEN on the development of
Ouarzazate Phase One project.
Gide Loyrette Nouel
The firm is the legal advisor for MASEN
Gide Loyrette Nouel is a business law firm,
established in Casablanca, Morocco since 2003. on the development of Ouarzazate
Phase One project.
It provides legal services covering all areas
of Moroccan and international finance and
commercial law. It also serves international
institutions, government agencies, banks,
foreign investors and major Moroccan industrial
groups.
www.csptoday.com
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Morocco
McKinsey & Company
– Morocco
McKinsey & Company is a U.S.-based global
management consultancy firm advising
businesses, governments and institutions. It
focuses on solving issues of concern to senior
managements.
Norton Rose Fulbright
Norton Rose Fulbright is an international
UK-based law firm with 3,800 lawyers. It is active
in North Africa for more than ten years, acting
for domestic and international clients on a range
of corporate and banking transactions. The firm
has particular expertise in energy, including
renewables, infrastructure, mining and minerals,
real estate and telecoms. It has established an
office in Casablanca, Morocco in 2011.
Norton Rose Fulbright is the legal
advisor for MASEN on the development of Ouarzazate Phase One
project.
Regional Center for
Renewable Energy and
Efficiency (RCREEE)
Morocco is one of RCREEE’s 13
RCREEE is an independent nonprofit regional
organization that aims to increase the adoption member states
of renewable energy practices in the Arab
region, by providing accurate and transparent
information through strong partnerships with
regional governments and global organizations.
The Center offers technical assistance and
research analysis.
Valyans Consulting
Valyans is a privately held management
consultancy based in Morocco advising banks,
insurance companies, government, and
developers on strategies, organization, and
technology. It is involved with the transformation plans of the Moroccan Government in the
areas of trade & industry, education, tourism,
and agriculture.
Alatec
Alatec is a consultancy that has been designated by the Moroccan Agency for Solar Energy
as its independent technical advisor for the
development of the Solar Thermoelectric Power
plant in Ouarzazate
5.3.5. Financing Organizations
Funding capital intensive projects can be an issue
anywhere. This can be even more relevant in a macroregion where the recent Arab Spring increased the
overall perceived geopolitical risk. On the other hand,
the lack of track record for the CSP technology makes
local investors more cautious and the recent global
recession is a further element that can pose a challenge
to sourcing suitable funds.
That said, the renewable energy initiative launched
www.csptoday.com
Valyans Consulting assisted MASEN
with setting up a Project Management
Office to plan, manage and monitor
the implementation of the solar
program and the Ouarzazate Phase
One project.
in Morocco had good financial backing provided by
international bodies like the Clean Technology Fund
(CTF) and managed through the African Development
Bank (AfDB) and World Bank. Such solid backing is
instrumental in reducing risks and encouraging other
private and public investors to contribute further
economic support. The interest demonstrated by
investors for recent tenders launched by MASEN
confirms the progress made by Morocco in providing
a viable economic and social environment for the
development of renewable energy.
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Morocco
A further interesting element of the local CSP system
is the plan of the European Bank for Reconstruction
and Development (EBRD) to develop a form of marketbased financing mechanism for renewable energy
projects. This potential tool would increase the range
of financial tools already available and operative in the
country. Amongst them are the Energy Investment
Company for renewable energy (SIE) created by the law
40-08 and equipped with a capital of MAD 1 million
and the Energy Development Fund (FDE) established in
2010 with a capital of USD 1 billion.
However, it is also fair to remember that there is
no policy providing financial guarantees to private
investors, or any fiscal or tax incentives – the only
exception being tax deductions for solar water heating
appliances. Nonetheless, both local and international
stakeholders are optimistic, and according to an analyst
of the International Energy Agency, the second phase of
the solar program will be relatively smooth because of
the solidity of the financial backing offered by international institutions.
Table 7(5): Main Funding Institutions and Banks in Morocco
Name
Roles and Responsibilities
Previous Renewable Energy
Projects
African Development Bank
(AfDB)
AfDB’s energy portfolio currently stands at
about USD $2 billion. The development bank
provides two lending windows: the first is
a public window, with mostly concessional
funds available to governments. The second is
a private window, offering debt and equity on
commercial terms. The World Bank Group and
AfDB are in the process of applying to the Clean
Technology Fund Trust Fund Committee USD
$750 million of concessional funds for the MENA
CSP scale-up.
AfDB is providing a total of USD$390
million to O.N.E. for the Ain Beni Matar
ISCC power plant, covering two thirds
of the project’s financing needs.
Over the first half of 2012, the bank
approved USD $800 million in loans to
spur private investments in Morocco’s
renewable energy sector. Cooperation
between AfDB and Morocco in the
energy sector dates back more than 40
years.
French Development Agency AFD is a financial institution and the main imple- AFD is financing USD $123 million
towards the first phase of Ouarzazate
(AFD)
menting agency for France’s official assistance
to developing countries and overseas territories. solar complex.
The Agency finances projects and studies
through grants, loans, guarantee funds and debt
reduction-development contracts to its partners
in developing countries.
Energy Investments
Company (EIC)
www.csptoday.com
EIC was established in 2010 with a capital of
USD $117.564 million endorsed by the state
(71%) and the Hassan II Fund for Economic and
Social Development (29%). It is one of the equal
shareholders in MASEN. Specializes in equity
investments in numerous sectors, including
telecoms, transportation, energy, water, and
ports. The Fund seeks either majority or minority
positions through equity, quasi-equity and
convertible debt instruments.
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European Investment Bank
(EIB) Morocco
EIB is the European Union’s nonprofit long-term EIB is financing USD $123 million
lending institution. The bank offers finance in
towards the development of Ouarzazate
the form of loans, guarantees, microfinance, and Solar Complex Phase One.
equity investment.
IFC - Infrastructure and
IFC is a provider of debt, equity and quasi equity Natural Resource Group (IFC) investments for infrastructure projects (power,
water, transport) within the MENA region.
IBRD is financing USD $200 million
towards the development of Ouarzazate
Solar Complex Phase One.
International Bank for
Reconstruction and
Development (IBRD)
IBRD is an international Washington-based
financial institution that offers loans to
middle-income developing countries. It is one
of five member institutions that make up the
World Bank Group
KfW Entwicklungsbank
KfW is financing USD $123 million
KfW is a German government-owned develtowards the development of Ouarzazate
opment bank, with an office in Morocco. It
provides loans at lower rates than banks. Since Solar Complex Phase One.
KfW’s cooperation with Morocco began in 1961,
it has invested € 400 million in the water and
sewage sector alone.
Moroccan Agency for Solar
Energy LLC (MASEN)
Established in 2009 with the Government, O.N.E.,
Fonds Hassan II, and Société d’Investissements
Energétique as equal shareholders, MASEN is
entrusted by the Government to develop at
least 2,000 MW of grid-connected solar power
by 2020. This includes conducting technical,
economic & financial studies, supporting
research & fund-raising, seeking involvement of
local industry for solar projects and establishing
associated infrastructure.
MASEN, along with public & private
partners, is financing $379 million
towards the development of Ouarzazate
Solar Complex Phase One. It is also the
borrower of all financing for this project.
Moroccan Infrastructure Fund MIF is an infrastructure-dedicated private equity (MIF)
fund set up in 2006, with USD $105 million in
capital commitments from Moroccan, European
and Kuwaiti investors. Invests in companies
operating in the communications, energy,
renewable energy and industrial sectors within
Morocco.
Société d’Investissements
Energétiques (SIE)
www.csptoday.com
SIE is a state-owned investment company
and equal shareholder (25%) in MASEN. It is
responsible for supporting the government
in achieving renewable energy targets, and
provides equity to financially viable energy
projects in Morocco.
SIE is supporting O.N.E. in the completion of the National Integrated Wind
Power Project and participating in the
share capital of project companies. It
financed the creation of a Renewable
Energy Fund dedicated to Morocco’s
private and public renewable energy
industry with approximately USD $237
million in equity.
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Société Générale Marocaine
des Banques (SGMB)
Société Générale is a French multinational
banking and financial services company
headquartered in Paris. Its affiliate SGMB offers a
range of products, including traditional banking,
investment finance, and green finance – the
latter which funds wind farms, solar and
hydraulic energy production facilities, waste
recovery and other renewable energy projects.
SGMB financed the construction and
operation of Germany’s Global Tech 1,
the largest financed offshore wind farm
project, which includes 80 wind energy
converters with a total capacity of 400
MW. In 2012, the group’s green finance
portfolio amounted to nearly €1 billion.
Sustainable Energy Fund for
Africa (SEFA)
SEFA, a fund that is financially supported by
Denmark, aims to support the implementation
of AfDB’s strategy to provide grants and equity
to small-scale renewable energy projects. SEFA’s
committed funds are approximately USD $58
million.
SEFA approved a grant of USD $1
million in 2013 to finalize pre-investment activities and feasibility studies
for a hybrid renewable energy project
(hydro/wind/solar) in Madagascar. It
also approved a grant of USD $825,000
in 2012 to finance the concept phase
of the Green Tech Financial Facility – a
vehicle for investments in private-sector
driven green technology projects.
5.3.6. Developers and EPC Firms
As part of an international effort, the Energy Sector
Management Assistance Program (ESMAP - a trust
fund administered by the World Bank) carried out a
study on the potential of the rising CSP industry for
manufacturing and associated value creation and job
opportunities in the MENA region, including Morocco.
The results of this study were presented in a workshop
in Morocco in 2011 demonstrating the high potential
for economic development arising from CSP-related
projects. As a matter of fact, the creation of local jobs
alongside the development of local entrepreneurship is
one of the core strategic objectives in Morocco as it is
in other MENA countries. In line with the study quoted
above, a report published by the DESERTEC Industrial
Initiative (DII - “Economic Impacts of Desert Power”)
shows that heavy investment in the renewable energy
sector can create 35,000 job years of employment
in CSP alongside 23,000 job-years for PV for every €1
billion invested.
A particular issue which has been pointed out by local
stakeholders is that due to the competitive nature
of the bidding process, developers are currently
unable to secure a long-term pipeline of projects
and as a consequence cannot guarantee long-term
supply contracts to manufacturers. This aspect might
somewhat undermine the potential for the local growth
of the CSP value chain.
www.csptoday.com
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Table 8(5): Developers and EPC Firms in Morocco
Previous Renewable Energy
Projects
Name
Roles and Responsibilities
Abengoa Solar
Subsidiary of Abengoa. The company designs,
finances, constructs, and operates solar power
stations.
Abengoa Solar is the operator of the
450 MW Ain Beni Matar ISCC power
plant. Abengoa’s subsidiary Abener is
the developer and EPC contractor of
the project.
Acciona
Acciona is a Spanish renewable energy operator
focusing on CSP, PV, wind, hydraulic and biomass
energy. It provides engineering & construction,
project development, O&M, and energy sales, and
has proprietary technology in the design, construction, and O&M of CSP plants.
Acciona is building and commissioning
the 160 MW Ouarzazate CSP project
in Morocco, and in Spain, it owns and
built/building six CSP plants: four in
Spain and two in the United States.
ACWA Power
ACWA Power is a Saudi Arabia-based developer,
owner and operator of independent water &
power projects structured on a concession or utility
outsourcing contract model.
ACWA Power is developing the 160
MWe Noor 1 CSP Plant (Ouarzazate
Phase 1).
Al Terrya
Al Terrya is a French turn-key solutions provider
that develops, finances, builds and runs renewable
energy power plants, including biomass, solar and
wind power. It operates in Morocco through its
office in Rabat.
Alstom
Alstom is a French developer and construction
company that provides systems and support to the
world’s infrastructure markets in the fields of power
generation and transport. It is also a manufacturer
and supplier of turbines. Alstom Morocco has nine
facilities across the country.
Alstom has a long-term contract to
operate and maintain the 470 MW Ain
Beni Mata ISCC power plant.
Cegelec Maroc
Cegelec is a French electrical contractor providing
electrical engineering services to large state
electricity, oil, mining, and water enterprises.
Cegelec Morocco is a subsidiary of Cegelec, which is
part of the Vinci Energies Group.
Cegelec Maroc’s consortium was
one of the 19 pre-qualified bidders
competing for the development of the
Ouarzazate CSP IPP Phase One, which
resulted in MASEN’s selection of the
ACWA Power-led consortium. Cegelec
designed and built an 8 MWe solar PV
plant in Miradoux, France.
Ciments du Maroc
Ciments du Maroc, a subsidiary of Italy’s Italcementi Ciments du Maroc is the owner,
Group, is one of the largest cement producers and operator and generation offtaker of the
suppliers of ready mixed concrete and aggregates in 3 MWe Ait Baha CSP Plant in Agadir.
Morocco with its subsidiary Betomar.
www.csptoday.com
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CNIM Group Babcock Wanson
Maroc
CNIM Group is a provider of turnkey industrial
solutions and consulting and expertise, including
maintenance and rehabilitation of thermal power
plant boilers; industrial boilers for power production,
and waste-to-energy conversion.
CNIM Group – Babcock Wanson Maroc
is the developer, owner and operator
of the 1 MWe eCare CSP demonstration project in Morocco.
Enel Green Power
Enel Green Power is a renewable energy group
that is part of the Italian utility company Enel.
The company operates a thermal power plant in
Morocco through Endesa, the largest electric utility
company in Spain. Endesa operates in Morocco
through the 32% stake it holds in Energie Electrique
de Tahaddart, owner of the 384 MW combined cycle
plant in Tahaddart.
Enel Green Power’s consortium was
one of the four bidding finalists
competing in the tender for the
Ouarzazate CSP IPP Phase One, which
resulted in MASEN’s selection of the
ACWA Power-led consortium.
Idom
Idom is a Spanish company providing engineering,
consulting and architecture services.
Idom provided basic detail engineering
to Abengoa for the 450 MW Ain Beni
Matar ISCC power plant in 2009.
Inabensa Maroc
Inabensa Maroc carried out the
Inabensa Maroc is a subsidiary of Spain’s Abengoa
with an office in Casablanca, Morocco. It specializes complete insulation of Ain Beni Matar
ISCC power plant in Morocco.
in electrical assemblies, mechanical facilities &
instrumentation, building of transmission lines,
railway electrification, thermal & acoustic protection,
concessions of services and manufacturing of
capital goods.
Nareva Holding
Nareya Holding is a Moroccan developer involved in
two sectors: power generation (renewable and fossil
sources) and water cycle management projects
such as desalination, irrigation, and distribution.
It has established partnerships with international
players to develop large ventures in Morocco.
Nareya’s partners include International Power GDF
Suez, TAQA, Enel Green Power, Amiantit, and Eesti
Energie. The group has an investment level evaluated at USD $400 million.
Nareya Holding is developing a
number of power projects in Morocco,
including Tarfaya 300 MW wind farm
project, Safi 1320 MW coal fired
power plant, 100 MW Akhfennir wind
farm extension, 850 MW wind power
project, among others.
Nur Energie
Nur Energie is a UK-based project developer with
a portfolio of nearly 2,270 MW of projects under
development using CSP towers, PV, BIPV, and CPV. It
selects and secures accessible, high-solar radiation
sites; establishes joint ventures with local partners;
assembles local teams with expertise; and works
with technology partners to identify the optimum
technology for the site and offtake agreement. The
company also structures critical aspects of project
finance, EPC and power offtake contracts.
Nur Energie is working with an
industrial partner that has a high
energy consumption, to provide hedge
on fluctuating/increasing energy prices
and the security of energy supply. It
has been operating two meteorological and DNI measurement stations
on two of the industrial partners’ sites
since summer 2012.
www.csptoday.com
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Local Component Supply
The majority of components for the first CSP projects
developed in the country, namely Ouarzazate and Ain
Ben Mathar, are being imported. Not only is there no
local content requirement up to now, but local suppliers
might also not be able to meet the tight deadlines of
the projects. However, the local manufacturing industry
is going through a relevant learning curve and the
increasing demand for CSP components and systems is
expected to act as the main driver for the development
of local expertise. For example, the Ouarzazate project
used local production mainly for metal structures and
other elements at the lower end of the value chain,
in which suppliers are using the know-how already
developed for other industrial sectors such as airlines
production. ACWA Power managers claim that although
not compulsory, they are achieving approximately
42% local content in their first project in Morocco. This
strategy is enabling them to reduce costs and lower
the final tariff at which they bid. As a general overview,
the expectation is that in the near future, a wider
percentage of components and work will be available
through local suppliers.
Table 9(5): CSP Components and Suppliers Available Locally in Morocco
Component
Name of Supplier(s)
Website
Turbines
Inabensa Maroc
www.inabensa.com
MAN Diesel & Turbo - Morocco (supplied through www.mandieselturbo.com
Gepod Agency)
Mitsubishi - Maintenance Partners Morocco SARL www.mhi-global.com
Siemens - Morocco
www.siemens.com/answers/ma/en
Steam Generators
ABB S.A.
www.abb.com
Pumps
Alfa Laval - Morocco
www.alfalaval.com
Lorentz (available through GenieSol, Morocco)
www.lorentz.de (www.geniesol.com)
Luxus Technologies
www.luxus-technologies.e-monsite.com
Maroc Sealing
www.marocsealing.com
Mitsubishi - Maintenance Partners Morocco SARL www.mhi-global.com
Valves
Tracking Systems
Heat Exchangers
www.csptoday.com
SolarKraft, Casablanca
http://ma105146736.en.gongchang.com/
Alfa Laval - Morocco
www.alfalaval.com
AVK Maghreb
www.avkvalves.com
John Crane (supplied through Maroc Sealing)
www.johncrane.com ; www.marocsealing.com
MAC Valves (supplied through RENOVPACK Sarl,
Morocco)
www.macvalves.com
Mafoder
www.mafoder.com
Geniesol SARL
www.geniesol.com
ITRI Environment
www.solairemaroc.com
Alfa Laval - Morocco
www.alfalaval.com
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Receiver Tubes /
Solar Collectors
Atlas Solaire
www.atlassolaire.com
SCHOTT France SAS (Tunisia)
www.schott.com
SolarKraft, Casablanca
http://ma105146736.en.gongchang.com/
Alfa Laval - Morocco
www.alfalaval.com
Dow Chemical Company – Egypt
www.dow.com
Air-Cooled
Condenser
Alfa Laval – Morocco
www.alfalaval.com
CSP Mirrors
Saint Gobain
http://www.saint-gobain.es/
Heat Transfer Fluid
5.4.2. Raw Material Availability
While there are materials and sub components that are
readily available, like steel and concrete, there are other
that are rare (e.g. glass and molten salts). Table 9 lists
some of the suppliers available in Morocco for each of
the raw materials used in CSP projects.
Table 10(5): Raw material available locally in Morocco and suppliers
Material
Supplier
Steel
Delattre Levivier Maroc
Maghreb Steel
Sonasid
Univers Acier
InterAcier
Ynna Holding
Maghreb Steel
Glass
Cevital (Algeria)
Molten Salt
BASF Construction Chemicals
Concrete
Lafarge Morocco
Ciments du Maroc
Jalmat Morocco
Holcim Maroc
Cérame Afrique Industries
Cior
Asmar
Siedex Béton
Becomar
Actis Maroc
www.csptoday.com
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5.5. Alternative CSP Markets
A very promising application for CSP technology
in Morocco is water desalination, as the country is
negatively affected by the environmental effects
associated with reduced rain and extension of forest
areas. The utilization of waste heat from the main
CSP process could also be exploited to produce fresh
drinking water.
At the beginning of 2013, an international competitive
tender for a feasibility study for the development
of water desalination using renewable energy was
launched with the financial support of the German
development bank KfW.
5.6. Market Forecast
Water availability is decreasing due to a combination
of population growth and economic development, as
well as a reduced amount of precipitation. In 2000, the
average availability of water was approximately 1,000
m3 per person per year but the forecast is that it will be
less than 500 m3 per person per year by 2020. Faced
with water scarcity, Morocco is seriously considering
desalination projects. The Office National de l’Eau
Potable (ONEP) is currently developing a desalination
program which will be completed in 2020.
Blessed with a DNI of 2,500 kWh/m2/year, with peaking
locations of 2,800 kWh/m2/year, Morocco has little to
no fossil-fuel production capacity and could therefore
strongly benefit from strengthening its energy portfolio
with renewables such as CSP. Since the Moroccan
Solar Plan was set into motion in 2009, with a target
of deploying 2,000 MW by 2020 – 20 MW currently in
operation; 160 MW under construction; 300 MW in
planning – the operating capacity by the end of the
decade could create a strong basis for a thriving CSP
industry that could lend its expertise to the surrounding
countries of the MENA region.
This application represents a huge opportunity for
CSP technology as the government is also looking at
desalination as a means of providing water for irrigation.
According to the Ministry of Agriculture, the current
water deficit is estimated at approximately 58 million
m3. A tender for a large plant in Agadir (100,000m3/day)
has already been launched by ONEP using a 25 year
Build-Operate-Transfer (BOT) model.
Combining Morocco’s plants that are in operation
and under construction, a total of 180 MW of CSP will
soon be delivering power to the country, besides an
additional 300 MW that has been announced through
the MASEN Noor CSP Next Program and should become
online within the next 3 years. To meet its 2,000 MW
target by the end of the decade, MASEN has identified
four future sites for solar deployment:
Based on data provided by waterworld.com (2013), the
desalination capacity in Morocco will increase from
83,000 m3/day in 2010 up to 989,000 m3/day in 2016.
An important contribution to the desalination capacity
will arrive from the plan of the Moroccan government
to develop a large plant in the region of Chtouka. The
water produced by the 111,000 m3/day plant would be
used for irrigation purposes.
A possibility to implement CSP technology for
desalination would be beneficial as the process is
very energy intensive. Overall data provided by the
International Renewable Energy Agency (IRENA)
indicate that seawater desalination via Multi Stage Flash
(MSF) consumes approximately 80.6 kWh of heat plus
approximately 2.5 to 3.5 kWh of electricity per m3 of
water treated. Reverse Osmosis (RO) requires electricity
only in the order of approximately 3.5 to 5.0 kWh per
m3 of water treated. In terms of costs, according to
the Ministry of Agriculture and Fisheries, the cost of
desalination in Morocco is currently around USD $0.941.30 per m3 of water.
www.csptoday.com
Ain Beni Mathar – 400 MW by 2016
Foum Al Ouad – 500 MW by 2017
Boujdour – 500 MW by 2018
Sebkha Tah – 100 MW by 2019
The identification of these sites, and their allocated
future capacity are positive signs showing the
commitment of Morocco to solar energy. Morocco’s set
targets and their consequent impact on the country’s
CSP market are shown below, where the medium-term
outlook is strongly influenced by Morocco’s
commitment to meeting its target by the end of the
decade. The experience to be gained in these projects,
along with the local conjuncture upon the culmination
of these initiatives, will dictate how the growing trend
of the CSP sector will evolve. In Figure 3(5), MASEN’s
plans are seen to slightly supersede the optimistic
forecast, which only considers plants in operation,
under construction and under development.
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Figure 3(5): Installed CSP Capacity in Morocco Until 2024 (MW)
6,000
5,275
Morocco MASEN Plan
Optimistic
5,000
Conservative
Pessimistic
4,000
3,000
1,987
2,000
1,680
845
1,000
0
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Figure 4(5): CSP Cumulative Energy Production in Morocco until 2024 (TWh)
140
131.1
Optimistic
120
Conservative
Pessimistic
100
80
58.3
60
40
30.3
20
0
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Conclusion
Morocco has developed a current installed capacity of
20 MW. However, a further 480 MW are in the pipeline
(projects announced or already under development or
construction). Although the country has only recently
turned its focus to solar energy, strong efforts have
been made to prepare the ground for an important
deployment phase in the medium and long term. Policy
www.csptoday.com
makers in the North African country have become
aware of how critical the establishment of the right
regulatory and industrial conditions can be for CSP
growth. For these reasons, Morocco is regarded as a
very promising market for future CSP development.
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Acronyms
ACRONYM
DEFINTION
ADEREE
National Agency for Renewable Energy and Energy Efficiency Development
AFD
Development Agency of France
AfDB
African Development Bank
AMISOLE
Association of Solar and Wind Power Enterprises
BOOT
Build, Own, Operate, Transfer
BOT
Build, Operate, Transfer
BMZ
German Ministry for Cooperation
CDER
Moroccan Centre for Renewable Energy Development
CMPP
Moroccan Cleaner Production Centre
CNEIE
National Environmental Impact Assessment Committee
CPI
Climate Policy Initiative
CTF
Clean Technology Fund
DE
Department of Environment
DEER
Directorate for Electricity and Renewable Energies
DII
Desertec Industrial Initiative
DLR
German Aerospace Center
DNI
Direct Normal Irradiance
EBRD
European Bank for Reconstruction and Development
EET
Energie Electrique de Tahaddart
EIB
European Investment Bank
EIC
Energy Investments Company
ESMAP
Energy Sector Management Assistance Program
FDE
Energy Development Fund
LYDEC
Lyonnaise des Eaux de Casablanca
IBRD
International Bank for Reconstruction and Development
IEA
International Energy Agency
IFC
Infrastructure and Natural Resource Group
IRENA
International Renewable Energy Agency
IRESEN
Institute for Research in Solar and Renewable Energy
ISCC
Integrated Solar Combined Cycle
www.csptoday.com
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IWES
Fraunhofer Institute for Wind Energy and Energy Systems
MASEN
Moroccan Agency for Solar Energy
MCINET
Ministry of Industry, Trade and New Technologies
MEMEE
Ministry of Energy, Mining, Water and Environment
MENA
Middle East and North Africa
MIF
Moroccan Infratructure Fund
MSF
Multi Stage Flash
MSP
Moroccan Solar Plan
ONE
Office National d’Electricite
ONEP
Office National de l’Eau Potable
PERG
Programme pour l’Electrification Rurale Global
PPA
Power Purchase Agreement
RCREEE
Regional Center for Renewable Energy and Efficiency
REEEP
Renewable Energy and Energy Efficiency Partnership
RfQ
Request for Qualification
RO
Reverse Osmosis
SEFA
Sustainable Energy Fund for Africa
SGMB
Societe Generale Marocaine des Banques
SIE
Societe d’Investissements Energetiques
TAQA
Abu Dhabi National Energy Company
TSO
Transmission System Operator
UAE
United Arab Emirates
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6
U.S.A.
By Marco Poliafico
Peer reviewed by Arnold Leitner
Content
List of Figures
154
List of Tables
154
Chapter Summary
156
Country Overview
156
6.1. Electricity Market
158
6.1.1. Federal and State Regulators
158
6.1.2. Buying and Selling Electricity
158
6.1.3. Electricity Consumption
160
6.1.4. Grid Transmission
161
6.1.5. Electricity Demand and Consumption
161
6.1.6. Market Structure Diagram
162
6.2. CSP Market
163
6.2.1. Loan Guarantees
163
6.2.2. Federal Policy Incentives
163
6.2.3. State-level Incentives
164
6.2.4. Renewable Portfolio Standards
164
6.2.5. Solar Energy Zones
165
6.2.6. Research and Development
165
6.2.7. Local Content Requirements
166
6.2.8. CSP Project Profiles
166
6.2.9. Challenges facing the development of CSP in the USA
170
6.2.9.1 Shale Gas
170
6.2.9.2 High Cost
170
6.2.9.3 Need for Policy Review
170
6.3. Local CSP Ecosystem
171
6.3.1. Key Government Agencies
172
6.3.2. Utilities and Independent Power Producers
173
6.3.3. Permitting Agencies
174
6.3.4. Local Consultants and R&D Bodies
175
6.3.5. Financing Organizations
176
6.3.6. Developers and EPC Firms
177
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6.4.1. Local Component Supply
178
6.4.2. Raw Material Availability
179
6.5. Alternative CSP Markets
180
6.5.1. Hybridization
180
6.5.2. Enhanced Oil Recovery
180
6.6. Market Forecast
182
Conclusion
183
References
184
Acronyms
186
List of Figures
Figure 1(6): Direct Normal Irradiation in the United States
157
Figure 2(6): California Summer Daily Demand Curve
161
Figure 3(6): Parabolic Trough and Tower CSP Pipelines in the United States
171
Figure 4(6): BrightSource Coalinga CSP Plant For EOR
181
Figure 5(6): Installed CSP capacity in the USA until 2024 (MW)
183
Figure 6(6): CSP Cumulative Energy Production in the USA until 2024 (TWh)
183
List of Tables
Table 1(6): Drivers and Barriers
157
Table 2(6): Overview of the Power Markets in the United States
159
Table 3(6): Main fiscal incentives available in the U.S. for CSP technology
163
Table 4(6): List of CSP Projects in the USA (those highlighted in yellow have secured a PPA)
166
Table 5(6): Key Government Agencies in the United States
172
Table 6(6): Utilities and IPPs Operative in the United States
173
Table 7(6): Permitting and Environmental Assessment Agencies in the United States
174
Table 8(6): Consultants and R&D bodies in the United States
176
Table 9(6): Main Funding Institutions and Banks Operative in the United States
176
Table 10(6): Developers and EPC Firms Operative in the United States
177
Table 11(6): Components and Suppliers Available in the United States
178
Table 12(6): Raw Material Suppliers in the USA
180
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Chapter Summary
With an average DNI of 2,700 kWh/m2 per year in the
CSP-friendly states of the country, and with the daily
peaks in the south-western states, the United States has
a potential CSP capacity varying between 14 GW to 33
GW.
A global pioneer in CSP development, the U.S. is one of
the world’s largest consumers of electricity and energy,
with one of the most developed power markets.
Various incentives have been put in place for CSP
development, including but not limited to Renewable
Portfolio Standards Research and Development
Numerous projects have also been carried out by worldleading U.S. research organizations like the National
Renewable Energy Laboratory and the U.S. Department
of Energy within the ambitious SunShot Initiative that
aims to achieve grid parity for CSP-generated electricity
by 2020. This equates to a levelized cost of energy of
approximately US$ 0.06/kWh, which in turn requires
costs to be cut by around 75%.
According to industry experts, the outlook for CSP
under the current U.S. market conditions is not as
promising as it was a few years ago, although the
potential remains tremendous, particularly in southwestern states. High costs and increasing exploitation of
shale gas are amongst the main threatening factors to
the deployment of CSP, followed by lengthy permitting
processes.
The United States has a comprehensive supply chain
for CSP components and sub-components. As a
consequence, all the main parts are easily available in
the market. Beyond the electricity market, hybridization
is one of the most promising CSP applications for
the United States, while another interesting field of
deployment is the use of CSP in enhanced oil recovery
operations.
Country Overview
United States
Solar resource (average annual sum of DNI): 2,700 kWh/m²/year
Size:
9,826,675 km²
Population (2012): 315.1 million
GDP per capita (2012): US$ 49,965
Installed power capacity: 1,168 GW
Annual electricity consumption: 3,687 TWh
Expected annual electricity demand in 2020:
4,700 TWh
Electricity Mix by Installed Capacity (2012)
Coal/Lignite 47.57%
Natural/Industrial Gases 20.44%
Petroleum Products 1.30%
Nuclear 19.1%
Hydro 6.77%
Renewables 3.42% (Geothermal 0.4%, Solar PV 0.04%, Solar CSP 0.02%, Wind 1.35%, Wood 0.92%, Biogas 0.02%,
Waste to Energy 0.67%)
Other/Imports 1.4%
Known Energy Resources
Coal, Gas, Petroleum, Biomass, Solar, Wind, Geothermal, Hydro
Potential Markets for Industrial CSP Applications
Hybridization
Enhanced Oil Recovery
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Figure 1(6): Direct Normal Irradiation in the United States
Source: Source: SolarGIS © 2013 GeoModel Solar
Table 1(6): Drivers and Barriers
Drivers
Barriers
Excellent DNI levels across several states
Lack of CSP-specific policy framework (currently under
development)
Overarching policy goals and Renewable Portfolio
Standards
Water scarcity and other environmental related conditions, such as dust, that could affect the performance
and cost of CSP projects
First-class R&D capability in CSP technology
High capital costs
Good availability of local manufacturing industry to feed Lengthy and costly permitting process
the whole supply chain
Availability of all raw materials needed by the supply
chain
Difficulties in accessing transmission grid in potentially
good locations
Large pipeline of announced projects
Decreasing price of natural gas due to shale gas boom
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Land availability
DOE Loan Guarantee Program terminated
Proximity between energy demand hubs (large cities)
and potential location for CSP plants
Plummeting prices of PV technology
Industrial initiatives like SunShot
6.1. Electricity Market
The electricity sector in the U.S. has evolved from a
monopolistic industry where vertically integrated
companies were dominating the market into a
deregulated system where a multitude of stakeholders
operate along the value chain. There are various public
institutions regulating the sector and over 3,000
utility companies. Less than one third are involved in
the generation segment whereas many of them are
engaged in the distribution sector. The large majority
of those companies (approximately 66%) is publicly
owned, whilst others are cooperatives or privately
owned firms.
6.1.1. Federal and State Regulators
The main regulatory bodies are the Department of
Energy, in charge of general policy, the Environmental
Protection Agency, leading environmental policy, and
the Federal Trade Commission, dealing with consumer
protection policy. Each state is responsible for the
regulation of the distribution sector whereas the Federal
Energy Regulatory Commission (FERC) is responsible for
the regulation of the inter-state transmission sector.
The only sector that is not owned by individual
companies is transmission. A number of Independent
System Operators (ISOs) or Regional Transmission
Organizations (RTOs) operate as non-profit entities
and must provide access to all potential generating
companies. These ISOs or RTOs are usually jointly owned
by a number of utilities operating in the same region
and are associated with the North American Electric
Reliability Corporation (NERC).
Nowadays, there are still some regulated states in which
utilities are vertically integrated and prepare integrated
resource plans to serve their load. In these states,
supply and distribution rates are set through economic
regulation. Conversely, in restructured states, generation
is deregulated and supply rates are set by markets.
However, distribution services are still fully regulated
and distribution rates are set again through economic
regulation. As an overall picture, the U.S. electric
industry comprises more than 3,100 public, private, and
cooperative utilities, over 1,000 independent power
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generators, three regional synchronized power grids,
eight electric reliability councils, about 150 control-area
operators, and thousands of other stakeholders
operating as engineering, economic, environmental,
and land-use regulatory authorities.
Several aspects of the electricity market are federally
regulated, whereas others are state-regulated. Further
elements such as environmental impacts may be
regulated locally. Generally speaking, the Constitution
allows federal bodies to regulate private economic
activities only where interstate commerce is involved.
The Federal Energy Regulatory Commission (FERC) is a
federal independent agency that provides regulation
at the national level, and is responsible for overseeing
the wholesale electricity markets and interstate
transmission services. However, there are many areas
outside of FERC’s jurisdictional responsibility that are
dealt with by the State Public Utility Commissions, such
as the regulation of retail electricity rates to consumers,
distribution services and approval of the construction
of generation facilities. Furthermore, some activities
are regulated by the Environmental Protection Agency
(EPA), federal land agencies (such as the Bureau of Land
Management), or other federal bodies.
6.1.2. Buying and Selling Electricity
On the generation side, utilities may produce all
the electricity they sell, but they can also purchase
some of their supply on the wholesale market from
other utilities, federal power agencies, independent
power producers (IPPs), or from a market based on
membership of a regional transmission reliability
organization. Part of the generation is provided by
utilities (individual or consortia) although some capacity
is owned by federal agencies and an increasing number
of independent suppliers.
Licensing of nuclear and hydropower plants is
federally administered by the FERC, while licensing
of other generation technologies is managed at
the state and local levels. Federal Power Marketing
Agencies (PMAs) were set up to market electricity
produced by federal dams. Some of them also built
their own thermal power plants. Examples of PMAs
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are the Bonneville Power Administration, the SouthEastern Power Administration, the South-Western
Power Administration, and the Western Area Power
Administration. In principle, the PMAs only sell power
on the wholesale market; however, some of them also
operate large transmission grids. The federal power
marketing agencies as well as local municipal utilities
are exempt from general regulation by FERC. IPPs are
also referred to as Non-Utility Generators (NUGs) and
own their generation facilities without getting involved
in the distribution services. That said, they can also sell
electricity to final consumers through brokers. NUGs
can enter into long-term agreements or offer power on
a short-term basis to the wholesale market.
The distribution companies selling electricity to final
consumers can be a not-for-profit municipal utility,
an electric co-operative (both of them indicated
as Consumer-Owned Utilities, or COUs), a private
commercial company owned by shareholders
(Investor-Owned Utility, or IOU) or a power marketer.
The distribution market is also populated by some
federally-owned authorities who buy, sell, and distribute
power. The IOUs serve approximately 75% of the
whole population and are subject to state regulations.
Most of them are large companies (in financial terms)
and operate both on the electricity and the natural
gas markets. The COUs serve approximately 25% of
the population, including both cities and many large
rural areas. Only some of them deal with natural gas.
The city-owned entities are known as “munis” and are
governed by the local city council or another elected
commission. The public utility districts are utility-only
government agencies and are governed by a board
elected by voters within the service territory. The
Cooperatives are private non-profit entities governed
by a board elected by the customers of the utility
and operate mostly in rural areas. Many of them were
formed in the years following the Great Depression, to
extend electric service to remote areas that IOUs were
unwilling to serve.
Table 2(6): Overview of the Power Markets in the United States
10 Power Markets
(ISO/RTO)
8 Reliability Region(s) (NERC) joint through
the 3 Interconnections
States Covered (all or part of)
Western Interconnection
California ISO (CAISO)
Western Electric Coordinating Council (WECC)
California
Southwest
Western Electric Coordinating Council (WECC)
Arizona, New Mexico, Colorado and parts of
Nevada, Wyoming and South Dakota
Northwest
Western Electric Coordinating Council (WECC)
Washington, Oregon, Idaho, Utah, Nevada,
Montana, Wyoming and part of California
Texas Interconnection
Texas (ERCOT) (RTO)
Electric Reliability Council of Texas (ERCOT)
Most of Texas
Eastern Interconnection
Midwest ISO (MISO)
Midwest Reliability Organization (MRO), the
South Eastern Electric Reliability Council (SERC)
and the Reliability First Corporation (RFC)
North Dakota, South Dakota, Nebraska,
Minnesota, Iowa, Wisconsin, Illinois, Indiana,
Michigan and parts of Montana, Missouri,
Kentucky, and Ohio
New England ISO
(ISO-NE)
Northeast Power Coordinating Council (NPCC)
Connecticut, Maine, Massachusetts, New
Hampshire, Rhode Island and Vermont
New York ISO (NYISO)
Northeast Power Coordinating Council (NPCC)
New York
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PJM (RTO)
Reliability First Corporation (RFC) and SERC
Reliability Corporation (SERC)
District of Columbia, Maryland, New Jersey,
Ohio, Pennsylvania, Virginia and West Virginia.
Parts of Indiana, Illinois, Kentucky, Michigan,
North Carolina and Tennessee.
Southeast
Florida Reliability Coordinating Council (FRCC)
and SERC Reliability Corporation (SERC)
Florida, Arkansas, Louisiana, Mississippi,
Alabama, Georgia, Tennessee, North Carolina,
South Carolina and parts of Missouri,
Kentucky and Texas
Southwest Power Pool
(SPP)
Southwest Power Pool (SPP)
Kansas, Oklahoma, most of Nebraska, and
parts of New Mexico, Texas, Louisiana,
Missouri, Mississippi and Arkansas
6.1.3. Electricity Consumption
The United States is one of the world’s largest energy
consumers, as well as a leader in the CSP industry
sector. U.S. companies produce a wide variety of fuels
ranging from oil and natural gas to nuclear and hydro
power. Renewable energy technologies are very well
developed, and a large number of companies are
involved in virtually all subsectors, including wind, solar,
geothermal, biomass and biofuels. According to data
provided by the Energy Information Administration
(EIA), in 2011 approximately 39% of the total new power
capacity installed used a renewable technology. The
relative weight of the renewable generation within
the energy mix is bound to increase significantly and
indeed the Bloomberg New Energy Finance (BNEF)
forecasts an overall 27% provided by the whole set of
renewable technologies by 2030. This would mean over
343 GW of installed capacity and over 420% increase
from the similar total amount of 2010. Currently, the
United States is the largest solar industry in the world.
energy generation peaks during the middle of the
day, so would support peak demand. Furthermore, the
possibility of implementing thermal storage technology
could serve the sustained high demand during evening
hours.
The oil, gas, coal and nuclear sectors are all very
important within the national energy mix and are
industrially very advanced. From one side, the U.S.
is developing technical know-how and expertise
in the exploitation of shale gas, whilst on the other
side, the largest estimated reserve of coal globally
is available, and makes the country a net exporter.
In terms of nuclear power, the United States has the
largest installed capacity in the world (World Nuclear
Association, 2013) and a very strong supply chain.
A specific aspect that makes the CSP technology highly
suitable for the US market is the daily trend of electricity
demand. In the south-western states, a double folded
peak is experienced during the day (due to cooling
and industrial load), and then during the first hours
of the evening (household and lighting load). Solar
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Figure 2(6): California Summer Daily Demand Curve
Source: National Renewable Energy Laboratory, March 2010, NREL/FS-6A2-45653
According to the 2012 Annual Energy Outlook, the
generation capacity between 2010 and 2015 is
expected to increase by 1%. Behind this overall number,
solar forecast projection is 242%.
6.1.4. Grid Transmission
The U.S. grid is formed by a network of over 300,000
km of HV transmission lines connected to some 18,000
power plants. The transmission grid is formed by
high-voltage networks linked to three synchronous
interconnections (also referred to as interconnects).
These are designed to transfer electricity amongst
different regional areas. The three networks are the
Eastern Interconnected System, covering the eastern
two-thirds of the United States and including adjacent
Canadian provinces, the Western Interconnected
System, consisting primarily of the Southwest and areas
from the Rocky Mountains to the Pacific Coast (again
including some Canadian provinces), and the Texas
Interconnected System, mainly covering Texas.
In 2006, the North American Electric Reliability
Corporation (NERC) was established, with the mission
to ensure that the grid in the United States be reliable,
adequate, and secure. With the mandate of overseeing
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regional operations, eight NERC planning areas have
been set. NERC has adopted specific reliability standards
that are legal requirements under FERC authority. Within
the NERC regions, a variety of entities are operative. The
most important players are the Regional Transmission
Organizations (RTOs) and the Independent System
Operators (ISOs), besides some individual utility control
bodies. The ISOs and the RTOs (similar among them)
are Transmission System Operators (TSOs) that need to
meet FERC requirements and manage planning, operational, balancing and dispatch transmission services.
They are voluntary and non-profit companies. Their aim
is to promote competition in the wholesale electricity
market. Overall, there are currently ten organizations
acting as an ISO or RTO, covering any geographical area
of the United States with the exception of small grid
areas served by individual utilities.
6.1.5. Electricity Demand and Consumption
The U.S. consumes approximately 20% of the total
electricity generated in the world. According to EIA
data, the per-capita energy consumption in the country
has been almost constant over the last 40 years, and
this might be related to the economic evolution that
entailed the relocation of many manufacturing activities
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and the associated shift in energy consumption
required to produce those goods. The overall electricity
demand increased by a total of 8% between 2000 and
2010, and the gap between production and generation
has been covered through imports. According to the
Annual Energy Outlook 2013, the growth of electricity
demand between now and 2040 will remain slow at an
average level of 0.9% per year.
Market Structure Diagram
Federal Level
State Level
Private Sector
Regulators
FERC
Public Utility
Commissions
Generation
PMAs
Utility
Companies
IPPs
Transmission
PMAs
RTOs/ISOs
8 NERC
Areas
Distribution
Federal
Agencies
COUs
IOUs
Customers
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6.2. CSP Market
CSP technology is well known and developed in the
U.S., as the first modern plants were built in California in
the 1980s.
At the time of publication, there was 572 MW in
operation, with a further 1.3 GW in construction. Some
of the world’s largest CSP projects are expected to
connect to the grid before the end of the year (2013).
These include the three Ivanpah Towers (which have
a cumulative capacity of 377 MW). Of all the CSP
markets listed on the CSP Today Global Tracker, the U.S.
has the largest pipeline of specific CSP projects under
construction, development and planning.
The overall policy framework is somewhat complicated
because it includes both federal and state-level initiatives. These are mainly divided into two categories,
namely financial incentives and green power purchasing
goals. The first group includes all the grants, loans and
tax incentives adopted at federal or state level.
6.2.1. Loan Guarantees
Since 2011, the DOE has awarded approximately US$
4.235 billion in loan guarantees to five CSP projects,
accounting for 1.3 GW of capacity (Mojave, Solana,
Ivanpah, Crescent Dunes and Genesis). Now that the
loan guarantee program has expired, securing finance
for the development of CSP projects will be more
difficult, necessitating tax equity investors. The loan
guarantee offered an incentive for the early-stage
development of the projects, as opposed to a Feed-inTariff scheme that is instead tailored for the operational
part of the plant’s lifetime; for this reason, the two
mechanisms could even be applied, at least in theory,
simultaneously. By offering a lump sum for the development of a project, a loan guarantee would minimize
the investment risk and therefore help in overcoming
investor concerns. Furthermore, a loan guarantee would
be awarded to a single project and in so doing, policy
makers could target their intervention geographically
or based on a specific type of project. At the same time,
though, as it happened in the US, only few projects
might be able to access this benefit.
6.2.2. Federal Policy Incentives
The main federal policy initiatives are shown in Table 3.
A more detailed description is included below:
Table 3(6): Main Fiscal Incentives Available in the U.S. for CSP Technology
Incentive
Description
The Modified Accelerated Cost-Recovery System
(MACRS)
Deductions on property taxes
The Business Energy Investment Tax Credits (ITC)
Reduction in the overall tax liability
US Department of Treasury Renewable Energy Grants
Grant scheme
US Department of Agriculture (USDA) High Energy Cost
Grant Program
Grant scheme
Federal Manufacturing Tax Credit Scheme
Tax credit awarded to manufacturers building CSP
components
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Modified Accelerated Cost-Recovery System (MACRS):
under this scheme that works through depreciation
deductions, a business can depreciate its assets in a
shorter time. For instance, a CSP project is included
in the five-year property and this entails savings on
property taxes.
Business Energy Investment Tax Credits (ITC): this
scheme has been extended until December 2016
and allows for a reduction in the overall tax liability
for individuals or businesses that make investments in
solar energy generation technology. It helps mitigate
high upfront costs for renewable energy projects. The
scheme was also extended to small firms without
tax liability because they were not yet profitable. The
credit is equal to 30% of expenditure, and if the federal
tax credit exceeds the tax liability, the excess may be
carried forward to the succeeding tax year until 2016.
The American Recovery and Reinvestment Act of 2009
(H.R. 1) allows taxpayers eligible for ITC to take this credit
or to receive a grant from the US Treasury Department
instead of taking the business ITC for new installations.
US Department of Treasury Renewable Energy Grants:
this scheme was launched in 2009 through the
American Recovery and Reinvestment Act,s and is
administered by the US Department of Treasury. The
grant is equal to 30% of the basis of the property for
solar energy and may be taken in lieu of the federal
business energy ITC.
US Department of Agriculture (USDA) High Energy
Cost Grant Program: this scheme is active since the
year 2000 and funds projects aimed at improving the
energy generation, transmission or distribution in rural
communities with grants up to US$ 5 million. Eligibility
is limited to projects that have energy costs of at
least 275% above the national average. Although the
scheme is not currently active, it is expected that new
funding opportunities will be available.
Another fiscal benefit is represented by the 30%
tax credit awarded to manufacturers building CSP
components under the federal manufacturing tax
credit scheme. However, the funds available under this
scheme are limited, so not all companies managed to
access it. In February 2013, the Tax Credits for Clean
Energy Manufacturing were awarded US$ 150 million
by the DOE. This money was made available from the
Advanced Energy Manufacturing Tax Credit scheme
that entailed a 30% investment tax credit and was
awarded to 183 projects for a total investment of US$
2.3 billion. The US$ 150 million was not utilized in its
original destination and was therefore made available
within the Clean Energy Manufacturing scheme.
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6.2.3. State-Level Incentives
Other than at federal level, each state can offer specific
financing incentives for CSP project development. Many
states have already set their own policies including
renewable energy portfolio standards, production tax
credits, and net metering provisions. However, some
of these measures are temporary or not fully beneficial
and their instability ended up not attracting mainstream
investors.
An ITC state level scheme is already present in Arizona,
Florida, and New Mexico, but not yet in California or
Nevada. Both of them have a property tax exemption
scheme which is not applied in the other mentioned
states (with the exception of Arizona). It is also worth
mentioning that the state of Nevada has a state Loan
scheme and a Sales Tax Exemption scheme. The latter is
also used in the states of Arizona and New Mexico.
The Green Power Purchasing Goals have been
introduced by the Federal Energy Policy Act of 2005,
and require at least 7.5% of the electricity consumed
by federal buildings to be generated by renewable
technologies. Those federal facilities that produce
renewable energy used on-site or produced on federal
land are entitled to double the amount of renewable
energy credits.
6.2.4. Renewable Portfolio Standards
The Renewable Portfolio Standards (RPS) set the
implementation targets for renewable energy in the
electricity mix of various states. They require utilities to
generate a certain amount of electricity from renewable
energy sources or acquire equivalent Renewable Energy
Certificates (RECs). RPSs create a trading regime through
which utilities missing their targets in their overall
supply portfolio can buy green sourced electricity
from other suppliers or utilities. So far, 29 states have
adopted RPSs, and a further eight states have a similar
scheme (Renewable Portfolio Goal - RPG). It is important
to mention that, in general, RPSs do not set specific
targets for each generation technology, but an overall
target for renewable sourced electricity. Out of the 29
states embracing this scheme, only 14 have specified
solar energy generation targets. Out of these 14 states,
only Nevada and New Mexico include specific CSP
generation targets in their RPS (1.5% by 2025 and 4% by
2020 respectively). The combination of 30% federal tax
credits, specific state tax credits, property tax exemption
and RPS policies has provided significant leverage for
CSP development in the South-western states of the
United States, facilitating solar energy market growth.
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6.2.5. Solar Energy Zones
Other initiatives aim to simplify the permitting phase
or promote R&D activities related to a CSP project. For
instance, the Solar Energy Zones program in the southwestern states identified 285,000 acres of public land
where a fast-track environmental approval procedure
is applied. The program has succeeded in attracting 27
projects since 2008 (between PV and CSP).
6.2.6. Research and Development
The National Solar Thermal Test Facility is an R&D
partnership set up amongst various national research
laboratories and promotes collaboration with the
private sector to undertake industrial oriented research
programs to generate innovation.
The SunShot target for CSP technology is to achieve
cost parity with other forms of energy on the grid by
2020. This equates to a levelized cost of energy (LCOE)
of approximately US$ 0.06/kWh, which in turn requires
costs to be cut by around 75%.
The SunShot Vision Study has been funded by the DOE
and is based on models developed by the National
Renewable Energy Laboratory (NREL). It provides
an in-depth assessment of the potential for solar
technologies and explores low-cost future scenarios
alongside the initiatives put in place to achieve those
cost targets. Potential roadmaps, barriers, technical
and market aspects are investigated for both PV and
CSP technologies. The study indicates that up to 14%
of the electricity demand in 2030 could be satisfied by
solar energy if the level of cost reductions envisaged by
the initiative were achieved. At the same time almost
300,000 jobs could be created.
The SunShot Initiative is currently generating investment
of up to US$ 55 million over a three-year window in
21 different projects carried out by the private sector,
universities and research laboratories. The overarching
objective is the development of the next generation
of CSP technologies featuring lower costs and higher
performance. The initiative considers all the technologies (Stirling, parabolic trough, solar tower and Fresnel)
and looks both at short-term and long-term research.
The four new funding initiatives recently launched
within the SunShot Initiative are CSP-HIBRED, SolarMat,
PREDICTS, and CSP: ELEMENTS.
CSP-HIBRED received total funding of US$ 20 million
from the DOE and focuses on the development of the
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hybridization concept to integrate CSP technology with
existing conventional power plants.
SolarMat stands for Solar Manufacturing Technology,
and supports the development of innovative and
commercially viable manufacturing technologies.
The “Physics of Reliability: Evaluating Design Insights for
Component Technologies in Solar” (PREDICTS) program
was launched in February 2013, and was funded with
a total budget of US$ 5 million from the DOE for both
CSP and PV technologies. Its goal is the development of
better predictive models for improving the reliability of
systems, components and sub-systems to, in turn, feed
the know-how generated into the design stage of such
components. This program has the ultimate objective
to reduce the risk associated with solar energy systems
and therefore increase the bankability of projects.
The fourth initiative (Concentrating Solar Power:
Efficiently Leveraging Equilibrium Mechanisms for
Engineering New Thermochemical Storage - CSP:
ELEMENTS) supports the development of thermochemical energy storage (TCES) systems that can
operate at higher temperatures (≥650°C) while
providing an overall cost reduction. It was launched
in April 2013, and received a total budget of US$ 20
million from the DOE for the duration of approximately
8-24 months.
Another project funded through the SunShot Initiative
is the “Advanced Collectors”, which focuses on the
development of new solar collector elements. The
R&D effort will be directed at advanced reflective films,
optically accurate reflector panels, low-cost space
frames, adaptive optics and accurate tracking systems.
The program will also design and build a heliostat
suitable for an ultra-high concentrating power tower
system to be developed at the National Solar Thermal
Test Facility at Sandia National Laboratories.
Meanwhile, an R&D project is currently being carried
out by the Jet Propulsion Laboratory (JPL) to support
the development of a lightweight solar thermal
collector structure with the aim of lowering structural
costs and simplifying the installation process. At
the same time, another project is looking at the
development of an innovative receiver for parabolic
trough systems to improve their performance as well
as the reliability of the components. This would in turn
positively affect the operation and maintenance (O&M)
cost of the solar field.
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Last, but not least, Arizona State University (ASU) is
taking part in three new solar energy projects funded
by the Australian and U.S. governments. The investment
for these projects includes US$ 68 million for two,
eight-year research programs and US$ 15.5 million
for 11 collaborative projects. These projects will be
developed in collaboration with the Australian Solar
Thermal Research Initiative (ASTRI) that is supported by
the Australian Renewable Energy Agency (ARENA).
In conclusion, R&D activities focus on all of the four
CSP technologies (parabolic trough, central tower,
linear Fresnel, and dish engines). That said, industry
stakeholders recently argued about the existing
obstacles to take research from the laboratory to full
scale commercialization. Although the incentives of the
recent years prompted an impressive acceleration in
the deployment of the technology, the current research
on new materials, heat transfer fluids, thermal energy
storage and coatings will need further capital to enable
smooth progression of promising technologies from
laboratory-scale prototype systems to pilot plants and
demonstration units.
6.2.7. Local Content Requirements
At the time of writing this report, there were no local
content requirements in the U.S.. This is not likely to
change in the future, given the current development of
the local supply chain.
6.2.8. CSP Project Profiles
At the time of publishing this report, the United States
had 16 operational CSP plants with a total installed
capacity of 571.16 MW: eleven under construction
(totaling 1,323.5 MW), six under development (600 MW),
and seven under planning (1,525 MW), according to
CSP Today Global Tracker. Table 4(6) showcases all CSP
projects in the U.S. at various stages of development.
Table 4(6): List of CSP Projects in the U.S. (those highlighted in yellow have secured a PPA)
Title
MWe
Technology Status
State/
Region
Developer
Storage
Capacity
Palen 1
250
Tower
Planning
California
BrightSource Energy
Palen 2
250
Tower
Planning
California
BrightSource Energy
Quartzsite Solar
Energy Project
100
Tower
Planning
Arizona
SolarReserve
Siberia 1&2
400
Tower
Planning
San
Bernardino
County,
California
BrightSource Energy
Sonoran West
SEGS
540
Tower
Planning
Riverside
Country,
California
BrightSource Energy
Hyder Valley Phase 200
1
Parabolic
Trough
Planning
Arizona
Pacific Solar Investments
Hyder Valley Phase 125
2
Parabolic
Trough
Planning
Arizona
Pacific Solar Investments
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Crossroads Solar
Energy Project
150
Tower
Development
Arizona
SolarReserve
8
Rice Solar Energy
Project (RSEP)
150
Tower
Development
California
SolarReserve
8
Chevron Hawaii
CSP Process Steam
To Be
Confirmed
Development
Hawaii
Chevron
Saguache Solar
Energy Project
200
Tower
Development
Colorado
SolarReserve
15
Palmdale Hybrid
Gas-solar Project
50
Parabolic
Trough
Development
California
City of Palmdale
Victorville 2
Hybrid Power
Project
50
Parabolic
Trough
Development
California
Inland Energy Inc.
Crescent Dunes
110
Tower
Construction
Nevada
Cobra/Santander/
SolarReserve
11
Ivanpah
Solar Electric
Generating
Station I
126
Tower
Construction
California
BrightSource Energy/
Google/NRG
Ivanpah
Solar Electric
Generating
Station II
133
Tower
Construction
California
BrightSource Energy/
Google/NRG
Ivanpah
Solar Electric
Generating
Station III
133
Tower
Construction
California
BrightSource Energy/
Google/NRG
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Genesis Solar 1
125
Parabolic
Trough
Construction
California
NextEra Energy Resources Genesis Solar 2
125
Parabolic
Trough
Construction
California
NextEra Energy Resources Keahole Solar
Power
5
Parabolic
Trough
Construction
Hawaii, Oahu Sopogy
Mojave Solar
Project
280
Parabolic
Trough
Construction
California
Abengoa
Solana*
280
Parabolic
Trough
Construction
Arizona
Abengoa
6
Sundt Solar Boost
5
Fresnel
Construction
Arizona
TEP/Areva Power
Tooele Army
Depot
1.5
Dish
Construction
Utah
Infinia Corporation
BrightSource
Coalinga
29
Tower
Operation
Rotem
Industrial
Park
BrightSource Energy
SierraSunTower
5
Tower
Operation
California
eSolar
Holaniku at
Keyhole Point
2
Parabolic
Trough
Operation
Hawaii
Sopogy
2
Martin Next
Generation Solar
Energy Center
75
Parabolic
Trough
Operation
Florida
Florida Power & Light
Nevada Solar One 64
Parabolic
Trough
Operation
Nevada
Acciona
0.5
Saguaro Power
Plant
1.16
Parabolic
Trough
Operation
Arizona
Arizona Public Service
Company
SEGS I
14
Parabolic
Trough
Operation
Dagget,
California
Luz International
SEGS II
33
Parabolic
Trough
Operation
Dagget,
California
Luz International
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SEGS III
33
Parabolic
Trough
Operation
Kramer
Junction,
California
Luz International
SEGS IV
33
Parabolic
Trough
Operation
Kramer
Junction,
California
Luz International
SEGS V
33
Parabolic
Trough
Operation
Kramer
Junction,
California
Luz International
SEGS VI
33
Parabolic
Trough
Operation
Kramer
Junction,
California
Luz International
SEGS VII
33
Parabolic
Trough
Operation
Kramer
Junction,
California
Luz International
SEGS VIII
89
Parabolic
Trough
Operation
Harper
Dry Lake,
California
Luz International
SEGS IX
89
Parabolic
Trough
Operation
Harper
Dry Lake,
California
Luz International
Kimberlina
5
Fresnel
Operation
California
Areva Power/ Clark Group
Hidden Hills 1
250
Tower
On hold
California
BrightSource Energy
Hidden Hills 2
250
Tower
On hold
California
BrightSource Energy
Rio Mesa
500
Tower
On hold
California
BrightSource Energy
Fort Irwin
500
Parabolic
Trough
On hold
California
Acciona/Clark Group
Kingman
200
Parabolic
Trough
On hold
Arizona
Albiasa Solar
Westside Solar
Project
10
Parabolic
Trough
On hold
Hawaii
Pacific Light & Power
Cameo
Coal-Fired Hybrid
Demonstration
Project
2
Parabolic
Trough
Decommissioned
Colarado
Xcel Energy
* In October 2013 this project moved into operation
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
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The deployment of utility-scale CSP technology in
the U.S. started at the end of the 1980s, when the first
SEGS plant was developed in California. Since then,
the local market has been one of the most attractive
in the world. For this reason, several CSP companies, in
particular those from Spain, opened local offices in the
country. Unfortunately, in recent years, the market has
been affected by external competitive factors including
the decreasing price of PV technology and low natural
gas prices. That said, there is currently approximately
570 MW of CSP installed capacity and a further 1.3 GW is
expected to start production between the end of 2013
and the first half of 2014. This will result in an increase of
over 120%.
For some projects, it is currently difficult to predict
the exact scheduling as there are still some economic
and permitting issues to be resolved, which could
make overall project development phase longer than
foreseen.
From a technical point of view, storage is increasingly
becoming part of the requirements for new CSP plants.
Thermal energy storage (TES) can offer significant
benefits over other renewable generation technologies,
including PV, as highlighted in a report published by
the National Renewable Energy Laboratory (NREL)
in 2012. Crescent Dunes is the first commercial scale
central tower CSP plant in the United States that will
use molten salt as a primary heat transfer fluid for both
heat capture and energy storage. It will have a capacity
of up to ten hours of thermal energy storage, which will
provide operational stability for the electricity grid.
Other potential projects are also under discussion. For
instance, a report released by the US Army in May 2013
includes the on-site production of energy as part of
their sustainability strategy. Within this strategy, two
potential sites have been identified for the development of CSP plants for an envisaged total installed
capacity of approximately 50 MW. The sites are Fort Bliss
and Fort Carson. The DOE announced support for these
two CSP projects with a fund of US$ 20 million through
the SunShot Initiative for the development of Thermal
Energy Storage (TES) systems.
6.2.9. Challenges facing the development of CSP
in the USA
According to industry experts, the outlook for CSP
under the current US market conditions is not as
promising as it was a few years ago, although the
potential remains tremendous, particularly in the
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south-western states. In that part of the country, there
are ideal conditions in terms of excellent solar resources
alongside the availability of extensive flat terrain in
desert areas and a low level of aerosols (as opposed
to the MENA countries). Furthermore, close to these
locations there are cities with high energy demand. A
potential issue to take into account is water scarcity.
Dry-cooling systems might be employed but this would
reduce the energy output while increasing the capital
costs of the plants.
6.2.9.1. Shale Gas
A relevant risk factor for the successful deployment
of the CSP technology in the U.S. is the decreasing
price of gas due to the exploitation of shale gas. In
fact, the booming exploitation of shale gas resources
is currently sustaining low natural gas prices. On the
other hand, the relevant reduction price experienced by
PV technology has been another barrier to the further
development of CSP projects.
6.2.9.2. High Cost
The main obstacle to the large deployment of CSP
technology is the high cost, which makes it uncompetitive with other generation fuels. Research leaders and
managers at the National Renewable Energy Laboratory
(NREL) agree that the challenge for the industry is to
continue to reduce the costs of the systems in the short
term. Interviewed by CSP Today in March 2013, Chuck
Kutscher, a principal engineer and group manager at
NREL, considered the objective of the SunShot program
(a levelized cost of electricity generated from CSP plants
no higher than 6 cents/kWh, without any subsidies, by
the year 2020) challenging to meet, at least with evolutionary changes, namely by developing and improving
further the current technologies. Conversely, Kutscher
believes that revolutionary and disruptive changes
to the existing processes could help in achieving the
long-term goal proposed by the initiative.
6.2.9. 3. Need for Policy Review
Other action that needs to be taken to encourage
the continued development of CSP plants is a review
of federal and state level policies. For example, at the
moment the general perception shared by industry
players is that the policy as it stands does not recognize
the added value provided by Thermal Energy Storage.
Further reviews will be needed to promote the
development of new projects while simplifying the
overarching legal framework.
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6.3. Local CSP Ecosystem
The U.S. has always played a leading role in the development of CSP technology. As a matter of fact, the
modern age of concentrated solar power can be traced
back to the 354 MW Solar Energy Generating Systems
(SEGS) projects developed in the Mojave Desert, which
are now the oldest operating plants in the world.
However, despite the promising potential of some US
states, after this first milestone which occurred some 30
years ago, the market has evolved considerably slowly
and most roadmaps announced have not been fully
pursued. The expectation linked to several large CSP
plants prompted important CSP companies, notably
from Spain, to open regional offices in the USA in an
attempt to secure a share of this very promising market.
This is particularly seen in the partnership between
BrightSource Energy and Spain-based Abengoa in the
development of the 500 MW Palen project. While the
U.S. is currently one of the most attractive CSP markets
overall, there are signs indicating that future development will be challenging.
Parabolic trough technology dominates the CSP
project profile in terms of projects under construction
or in operation. However, developers are looking with
growing interest at central tower technology because
of its higher efficiency and lower LCOE and for molten
salt towers inherent energy storage capabilities (this is
discussed in detail in the CSP Today Solar Tower Report
2014: Cost, Performance and Thermal Energy Storage).
Various states are now involved in the development of
CSP plants including California, Arizona, Nevada and
Hawaii which has spurred strong construction activity.
The main industrial players on the local market so far
have been Abengoa, BrightSource, NextEra Energy and
SolarReserve.
Figure 3(6): Parabolic Trough and Tower CSP Pipelines in the United States
1,540
1,600
 Parabolic Trough
 Tower
1,400
1,200
MW Capacity
1,000
815
800
600
400
500
502
532
325
200
100
34
0
Planning
Development
Construction
Operation
Source: CSP Today Global Tracker, August 2013
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As mentioned earlier, in addition to the operational
572 MW, 1.3 GW of CSP capacity is expected to start
commercial production between the end of 2013 and
the first half of 2014. This will increase the country’s
total capacity by over 120%, making the United States
a world leader in operational experience for CSP
technology. According to Tex Wilkins, Executive Director
of the CSP Alliance, the five projects which are about
to be commissioned should give more confidence to
the financial community and make it easier for future
projects to be financed.
Furthermore, there is a long pipeline of projects of over
3.6 GW installed capacity pending approval. However,
it is expected that some few if any of the submitted
projects will not go ahead due to legal or financing
obstaclesbecause there is no market for the power as
utilities have either fully subscribe renewable energy
portfolios (RPS) or chose much lower cost photovoltaic
projects to meet their RPS needs. Also, several of them
may be abandoned for difficulties related to the lengthy
and costly permitting process. Based on public administration data from the California Energy Commission, the
Bureau of Land Management and information regarding
PPA with electric utilities, only five projects have
received positive Environmental Impact Reports (EIRs)
and other permits out of all the projects currently at
planning stage. As a whole, many industry players hope
that the benefits provided by the continuous learning
curve will further support the long-term growth of the
local market.
6.3.1. Key Government Agencies
The following table shows a list of the ministries
and government agencies in United States, with
involvement in the U.S. CSP market.
Table 5(6): Key Government Agencies in the United States
Previous renewable energy
programs (if applicable)
Name
Roles and Responsibilities
Department of Energy
(DOE)
Supports energy R&D with government
scientists and industry partnerships
Loan Program Office
(LPO) of DOE
Guarantees private loans for energy (for renew- Abengoa: Mojave Solar Project,
ables only when Democrats hold majority/
Solana, NextEra: Genesis, SolarReserve:
supermajority in House and Senate: currently no Crescent Dunes Tonopah,
renewable funding)
Sunshot Initiative, R&D industry
partnerships with 3M, Reflectech,
Skyfuel, Acciona Solar, Solar
Millennium, Halotechnics, Schott,
BrightSource, Abengoa, Alcoa, eSolar,
Solar Millennium
Department of Defense Must acquire 25% renewable electricity by 2025 Fort Irwin
(DOD)
to meet Executive Order
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6.3.2. Utilities and Independent Power Producers
The following table shows a list of independent water
and power producers and utilities operating in the
United States.
Table 6(6): Utilities and IPPs Operative in the United States
Name
Roles and Responsibilities
Pacific Gas & Electric
Company (PG&E)
Contracts for renewable power to meet
California RPS 33% by 2020, 40% by 2030
Previous renewable energy
programs (if applicable)
NextEra Genesis Solar Project, Solar
Reserve Rice Solar Project, Abengoa
Mojave Solar Project, BrightSource
Ivanpah I and III, BrightSource Coyote
Springs 1 and 2
San Diego Gas & Electricity Contracts for renewable power to meet
(SDG&E)
California RPS 33% by 2020, 40% by 2030
Mount Signal Solar
Southern California Edison Contracts for renewable power to meet
(SCE)
California RPS 33% by 2020, 40% by 2030
SEGS* I-IX, Ivanpah II, BrightSource
Hidden Hills and Rio Mesa (withdrawn)
Solar Millenium (now BrightSource/
Abengoa Palen Solar Electric Generating
System), Sonoran West, eSolar Sierra
Suntower*
NV Energy
Contracts for renewable power to meet
Nevada RPS 25% by 2025 with 5% solar
carve out by 2015
Acciona Solar Power: Nevada Solar One,
SolarReserve: Crescent Dunes Tonopah
Arizona Public Service
Contracts for renewable power to meet
Arizona RPS 15% by 2025
Abengoa: Solana Generating Station,
Solargenix: Saguaro Power Plant*
Florida Power & Light /
No renewable requirement but previous
NextEra Energy Resources Feed-in-Tariff
Martin Next Generation Solar (Hybrid)*
Hawaii Electric Light
Company (HELCO)
Hawaiian Electric: Kalaeloa Solar One,
Sopogy: Holaniku at Keahole Point
Contracts for renewable power to meet
Hawaii RPS 25% by 2020, 40% by 2030
* Operating
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6.3.3. Permitting Agencies
There are still many regulatory obstacles for CSP developers in the U.S., and one of these is the permitting
process, which can take a couple of years; it continues
to be one of the weaknesses of the local market.
Developers must obtain regulatory permit for siting,
grid connection, power production, and environmental
performance. This can add millions of dollars in legal
fees, unexpected delays, and short-term financing costs
that can affect the overall budget.
For instance, the construction of new transmission lines,
which often involves overlapping jurisdictions (federal,
state, local) creates a major regulatory uncertainty
for project developers. In June 2010, the Department
of the Interior’s Bureau of Land Management (BLM)
issued the rental schedule for solar energy right-of-way
authorizations on public lands, which consists of a
guidance package on grid connection issues for solar
energy projects. This initiative helped developers during
the planning stage of a project. The BLM is proactively
committed in improving the situation for transmission
planning and permitting; however, the procedure
would need to be simplified to better support CSP
projects.
Environmental Protection Agency, the Department of
the Interior, the Department of Energy, and the Federal
Energy Regulatory Commission, amongst others. In
some locations, there might also be a need for permits
released by local authorities.
On the other hand, state and federal taxes disproportionately affect capital-intensive investments such as
CSP projects, compared to expense-intensive conventional coal or gas-fired generation. As highlighted in
the report ‘Fulfilling the Promise of Concentrating Solar
Power’ (Pool and Coggin, 2013), U.S. tax policy heavily
favors fossil-fuel companies. A notable analysis delivered
by the National Renewable Energy Laboratory (NREL)
states that if a conventional fossil power plant had to
purchase all the fuel upfront, and if this was treated as a
capital investment from a tax point of view, the cost of
power would be more than doubled. The accelerated
depreciation implemented under the Energy Policy Act
(2005) helped mitigate this issue, but not enough to
completely eliminate the problem.
The following table shows a list of permitting and
environmental assessment agencies operating in the
United States.
A variety of bodies are involved in the permitting
process and developers must obtain approval from the
Table 7(6): Permitting and Environmental Assessment Agencies in the United States
Name
Roles and Responsibilities
Previous Involvement in CSP
Projects
Federal Level
Bureau of Land
Management (BLM)
Approves energy projects on or related
transmission crossing public lands
SolarReserve Crescent Dunes,
SolarReserve Quartzsite, Iberdrola/Pacific
Solar Investments Hyder Valley Solar
Fish and Wildlife Service
(FWS)
Prevents impacts to wildlife habitats and
endangered species on public lands
BrightSource: Ivanpah, Hidden Hills**,
Rio Mesa,** SolarReserve: Crescent
Dunes Tonopah, Rice Solar, Abengoa:
Mojave Solar Project, Solana,
Prevents impacts to wildlife habitats and
endangered species in California
BrightSource: Ivanpah, Hidden Hills**,
Rio Mesa**, Abengoa: Mojave Solar,
Abengoa/BrightSource: Palen
State Level
California Department of
Fish and Wildlife (CDFW)
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California Energy
Commission (CEC)
Approves California thermal power plants
Victorville Hybrid, NextEra Beacon Solar
Energy Project, Abengoa Mojave Solar
Project, BrightSource Ivanpah NextEra
Genesis Solar, now BrightSource/
Abengoa Palen Solar Power Project (500
MW trough - to be revised) SolarReserve
Rice Solar (150 MW tower), Palmdale
Hybrid (50 MW trough)
California Public Utility
Commission (CPUC)
Regulates electric utilities, approves pricing
of power purchase contracts
Victorville Hybrid, NextEra Beacon Solar
Energy Project, Abengoa Mojave Solar
Project, BrightSource Ivanpah NextEra
Genesis Solar, now BrightSource/
Abengoa Palen Solar Power Project (500
MW trough - to be revised) SolarReserve
Rice Solar (150 MW tower), Palmdale
Hybrid (50 MW trough)
Nevada Public Utilities
Commission
Regulates electric utilities, approves pricing
of power purchase contracts
Acciona Solar Power: Nevada Solar One*
Arizona Corporation
Commission (ACC)
Regulates electric utilities, approves pricing
of power purchase contracts
Abengoa: Solana Generating Station,
Arizona Public Service: Saguaro Power
Plant, SolarReserve: Crossroads
Public Utilities
Commission of Colorado
(PUC)
Regulates electric utilities, approves pricing
of power purchase contracts
Colorado Integrated Solar Project Hybrid
Florida Public Service
Commission (PSC)
Regulates electric utilities, approves pricing
of power purchase contracts
Martin Next Generation Hybrid
* Operating ** Withdrawn
6.3.4. Local Consultants and R&D Bodies
The U.S. has a strong industry and R&D capacity, and
it can definitely benefit from increasing demand, both
internally and worldwide. The deployment of CSP
technology could provide an opportunity to develop
significant intellectual property export companies. The
SunShot target for CSP technology is to achieve cost
parity with other forms of energy on the grid by 2020.
This approximately equates to a levelized cost of energy
(LCOE) of US$ 0.06 /kWh, which in turn requires costs to
be cut by approximately 75% (see section 6.2.6. on the
SunShot Initiative under Research and Development).
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Table 8(6): Consultants and R&D bodies in the United States
Name
Roles and Responsibilities
Previous CSP Projects
National Renewable
Energy Laboratories
(NREL)
R&D, component technology analysis, partnership with CSP industry, licenses new technologies developed
R&D into high temperature HTF,
Supercritical CO2, nanoscale phase
changing TES, advanced receivers
and reflectors, next generation
collectors,
Pacific Northwest
National Laboratories
(PNNL)
R&D, technology analysis, partnership with CSP
industry, licenses new technologies developed
R&D into thermochemical storage,
integration into fossil plants hybridization, new approaches in the design
of collectors, receivers, and power
cycle equipment
Sandia National
Laboratory (SNL)
R&D, technology analysis, partnership with CSP
industry, licenses new technologies developed
R&D for tower technology licensed to
RocketDyne, ongoing R&D with Pratt
& Whitney into heliostats
6.3.5. Financing Organizations
Now that the loan guarantee program has expired,
securing finance for the development of CSP projects
will be more difficult, necessitating tax equity
investors. Amongst the new incentives, the Clean
Energy Manufacturing Initiative was launched by the
DOE in April 2013, with the aim to boost the local
manufacturing of components for solar energy plants,
including CSP. It provides US$ 15 million funding for
local companies.
All in all, the U.S. is facing market and regulatory
challenges, and it remains unclear whether the CSP
sector will continue to attract sufficient levels of
investment to fulfill its potential. Experts suggest that
the increasing use of natural gas in the U.S. will slow
growth in the clean energy sector, as utilities aim to
contain electricity prices. As a direct consequence, there
are concerns over the potential financial difficulties for
CSP projects in terms of securing suitable PPA contracts.
Table 9(6): Main Funding Institutions and Banks Operative in the United States
Name
Roles and Responsibilities
Previous Renewable Energy
Investments
NRG Solar, Google
Venture Capital
BrightSource: Ivanpah
Alstom, VantagePoint Capital Partners,
CalSTRS, Draper Fisher Jurvetson, BP
Ventures, Goldman Sachs, Chevron
Technology Ventures
Venture Capital
BrightSource: Coalinga 29 MW
EOR
U.S. Renewables Group, Citi Alternative
Investments, Sustainable Development
Investments, Good Energies, and Credit
Suisse
Banking, Venture Capital
SolarReserve
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Abengoa SA
Energy Investment, Owner
Operator
Abengoa: Colorado Integrated
Solar Project, Solana
Mitsui, Southern California Gas Company,
3M, Kolohala Ventures, Enerdigm Ventures
Banking, Venture Capital
Sopogy
GE, MetCap
Investment
eSolar
Clark Energy Group (Clark Realty Capital)
Financing, EPC for government
contracts
Acciona: Fort Irwin
Excel Energy
Co-Developer, Owner Operator
Abengoa: Colorado Integrated
Solar Project
City of Palmdale
Owner Operator
Inland Energy: Hybrid Gas CSP at
Palmdale
Source: CSP Today Global Tracker, August 2013
6.3.6. Developers and EPC Firms
Table 10(6): Developers and EPC Firms Operative in the United States
Name
Roles and Responsibilities
Previous Renewable Energy
Projects
Acciona Solar Power
Developer
Nevada Solar One*, Fort Irwin
Abengoa
Developer, EPC
Solana Generating Station, Mojave
Solar Project, Palen with BrightSource
BrightSource
Developer, EPC (for Coalinga)
Ivanpah I, II, III, Coalinga (EOR)*
SolarReserve
Developer, EPC, Owner, O&M
Rice Solar Project, Crescent Dunes
(Tonopah), Crossroads Solar, Saguache
Solar
Bechtel Corporation
Partnership, head of EPC
EPC for BrightSource: Ivanpah I, II, III
Lauren Engineering
EPC
EPC for Acciona Solar Power: Nevada
Solar One
United Technologies Corp EPC
Pratt Whitney Power Systems
SolarReserve: Rice Solar
Arizona Public Service
Developer, Owner
Solargenix: Saguaro Power Plant
AREVA Solar
R&D, EPC
R&D with Sandia National Laboratory
Pacific Solar Investments
(Iberdrola)
Developer, EPC
Hyder Valley Solar
Cogentrix
Developer, Owner
SEGS* I and II
eSolar
EPC, Developer
Sierra Suntower*
Glasspoint Solar
Developer, EPC
Berry Petroleum: EOR
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NextEra Energy
Developer, EPC, O&M
SEGS* III-IV, Genesis Solar Energy
Project
Solargenix Energy (Acciona
Group)
Developer, EPC
Saguaro Power Plant
Florida Power & Light
Company / NextEra Energy
Resources
Utility, Developer
Martin Next Generation Solar*
Ausra
Developer
Kimberlina Linear Fresnel
Sopogy
Developer of micro CSP
MicroCSP cooling at Sempra, Fort Bliss
Inland Energy
Developer, EPC firm
Hybrid Gas CSP at Palmdale
MMR Power Solutions
Developer, EPC firm
Mount Signal Solar
*Operating (in Italics) before source
Source: CSP Today Global Tracker, August 2013
6.4.1. Local Component Supply
The United States has a comprehensive supply chain
for components and sub-components needed for CSP
plants. As a consequence, all the main parts are easily
available on the market, including steel, glass, molten
salts and concrete. The following table lists some of the
main U.S. suppliers of CSP components.
Table 11(6): Components and Suppliers Available in the United States
Component
Name of Supplier(s)
Turbines, Steam
Ormat
Generators, Tubes,
GE
Pumps and Valves
Tracking Systems
www.csptoday.com
Website
www.ormat.com
www.ge-energy.com/products_and_services/products/steam_
turbines/concentrated_solar_power_steam_turbines.jsp
AREVA Solar
www.areva.com/EN/solar-220/areva-solar.html
Flowserve
www.flowserve.com
CCI
www.ccivalve.com/industries-and-solutions/renewables.
aspx?sc_lang=en
Pentair
www.pentair.com/industries/power/index.html
Souriau
www.souriau.com/index.php?id=intro
Babcock Power/Struthers
Wells
www.babcockpower.com/products/heat-exchangers/
tei-struthers-wells
Parker-Hannefin
www.parker.com
ConeDrive
www.conedrive.com/97/
Solarflect
www.solaflect.com
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Mirrors and
Troughs
Receiver Tubes
Solar Collector
Assemblies (SCE)
and Frames
Heat Collector
Elements (HCE)
and Insulation
Flaberg
www.flabeg.com
Rioglass
http://www.rioglassolar.com/v_portal/apartados/apartado.
asp?te=3
Parker-Hannefin
www.parker.com/literature/Praedifa%20Division/PDF%20files/
Solarthermie_ODE5518-GB.pdf
Ausra (AREVA Solar)
www.areva.com/EN/solar-220/areva-solar.html
Solarflect
www.solaflect.com/
Guardian
www.guardian.com/guardianglass/glassproducts/
EcoGuardSolarEnergyGlass/index.htm
SkyFuel
www.skyfuel.com/
3M
http://solutions.3m.com/wps/portal/3M/en_US/Renewable/Energy/
Applications/CSP/
Gossamer
www.gossamersf.com
Ausra (AREVA Solar)
www.areva.com/EN/solar-220/areva-solar.html
Schott
www.schott.com/csp/english/schottsolar-ptr-70-premium-receivers.
html?so=newzealand&lang=english
Gossamer
www.gossamersf.com
Gestamp Renewables
www.gestampren.com
Acciona Solar Power (SGX-2)
www.acciona-energia.com/activity_areas/csp/services.aspx
Sener, SenerTrough
www.torresolenergy.com/TORRESOL/generica_adicional.
html?id=cw4cb47d3a0451d&swlang=en
Schott/Solel
www.schott.com/csp/english/index.html?so=usa&lang=english
Microtherm
www.microthermgroup.com/high/EXEN/site/concentrated-solar-power.aspx
Heat Transfer Fluid Radco Industries
and Flow Meters
Solutia
www.radcoind.com
www.therminol.com/pages/
Halotechnics
www.halotechnics.com/products/
Dow Chemical
www.dow.com/heattrans/csp/index.htm
Flexim (flow metering)
www.flexim.com/en
6.4.2. Raw Material Supply
The below table lists some of the key suppliers available
in the U.S. for the main raw materials used in CSP
projects.
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Table 12(6): Raw Material Suppliers in the USA
Material
Supplier
Steel
List of potential suppliers at: www.thomasnet.com/products/pipe-stainless-steel-58581604-1.html
Glass
List of potential suppliers at: www.thomasnet.com/products/glass-34661207-1.html
Molten Salt
List of potential suppliers at: www.thomasnet.com/products/potassium-nitrate-62342605-1.html
Concrete
List of potential suppliers at: www.thomasnet.com/products/admixtures-cement-concrete-475202-1.html
6.5. Alternative CSP Markets
The latest plants developed in the U.S. incorporate
thermal energy storage units, which will enhance the
capacity to serve base-load electricity demand. At the
same time, there is a significant amount of research
carried out by institutes like the NREL and the Electric
Power Research Institute (EPRI) on the potential use of
CSP technology for other niche markets. The two most
promising applications are described below.
6.5.1. Hybridization
Hybridization is one of the most promising CSP
applications. The reason why there is an increasing
interest in hybrid applications is because of the reduced
investments needed to integrate a solar plant into an
existing power facility. Furthermore, there is a greater
capacity to follow the energy demand profile because
of the existing conventional fuel plant replacing the
need of any back-up fuel part. Therefore, whilst there
is a reduced financial and technical risk, hybrid applications can be a suitable method of demonstrating
the full potential of CSP technology and work as a
bridging opportunity toward the mass development of
standalone solar power plants.
A recent NREL report concluded that there were
between 11 and 21 GW of U.S. fossil plants available for
CSP hybridization. Some companies are already moving
ahead to develop hybrid CSP units to retrofit existing
conventional power plants. The Martin Next Generation
Solar Energy Center is a parabolic trough CSP plant
integrated with a carbon-fired power station with a
power output of 75 MW located in Florida. It occupies
202 hectares and its cost was approximately US$ 476
million.
The Department of Energy at the Pacific Northwest
National Laboratory (PNNL) is conducting research to
improve the performance of CSP plants integrated in
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conventional gas power plants. Another project recently
funded by the US Department of Energy (DOE), with
US$ 149,900 (through the Small Business Innovation
Research (SBIR) program), is a study on the feasibility
for retrofitting a CSP plant to the existing geothermal
facility currently installed at the Oregon Institute of
Technology (OIT). The solar field would be employed to
increase the temperature of the geothermal fluid sent
to the power block, in this case an Organic Rankine
Cycle (ORC) engine connected with a 280 kW generator.
The final aim is the improvement of the overall
efficiency and output of the plant and the overall
demonstration of the proof of concept of a geothermal
solar hybrid system.
6.5.2. Enhanced Oil Recovery
A notable field of CSP deployment is Enhanced
Oil Recovery (EOR). The main benefit of using CSP
technology in this application is represented by
economic savings, whether in terms of increasing the
oil production, or saving fuel. EOR, also referred to as
tertiary recovery, is commonly used in mature fields,
where secondary techniques such as water flooding no
longer produce economically viable quantities of oil.
The most popular method currently employed in the
industry is gas and steam injection, better known as
thermal recovery. Solar power technology can therefore
contribute to the production of steam, replacing (at
least partially) the need of conventional fuels.
According to a report by GDP Capital, the conventional
steam generators employed for thermal EOR are
nowadays more expensive than parabolic trough
technology. This is particularly true when looking at the
lifetime costs resulting from the high operating costs
of current technology using expensive fossil fuels. The
report mentions a current price of US$ 4-4.5 per million
British Thermal Units (BTU) processed when using
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natural gas, compared with US$ 3-4 if CSP technology
is employed. This competitive advantage is forecast to
increase as the cost of fossil fuels rises, with the use of
natural gas for EOR is projected to move toward US$
5.25 per million BTU extracted in the next decade.
According to an analysis carried out by Visiongain, the
global EOR market worldwide reached a production
of approximately 3 million barrels per day in 2013. The
market is expected to increase substantially over the
next ten years and the U.S. is likely to play an important
role within it. An analysis of the EOR market for the
Current Status:
Operation
Country:
U.S.
Land Area (acres):
100
Gross Capacity:
29 MW
Developers:
BrightSource Energy
Technology:
Tower
U.S. and European markets forecasts that revenues will
increase from approximately US$ 410 million in 2012 to
approximately US$ 1,775 million in 2019.
In February 2011, Glasspoint, a California-based firm,
launched the first commercial application of CSP used
for thermal EOR. Similarly, BrightSource developed
the 29 MWth Coalinga CSP project for EOR which was
connected to the grid in 2011.
Figure 4(6): BrightSource Coalinga CSP Plant For EOR
Status
Current Status
Operation
Construction date - actual starting date
01/01/2009
Actual Commercial Operation Date (COD)
10/01/2011
Technology
Gross Capacity
29.00
MWe or MWth
MWth
Technology
Tower
Application
Enhanced Oil Recovery
Back-up fuel
None
Heat Transfer Fluid (HTF)
Water
Cooling
Dry
Country
U.S.
State/Region
Coalinga, California
Latitude
36.175
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Longitude
-120.386
Land Area (acres)
100
Companies Involved
Developers
BrightSource Energy
Developers (Ownership Notes)
Chevron (100%)
Suppliers
O&M Contractors
BrightSource Energy, Chevron
Source: CSP Today Global Tracker, August 2013
6.6. Market Forecast
In the history of CSP, the United States has played a
pivotal role in launching the technology and bringing
it to a maturity threshold that has resulted in more
than 17 countries deploying and considering CSP as a
renewable solution for their future energy needs. From
the SEGS plant to today’s 572 MW operating capacity,
remarkable progress has been achieved, and a track
record was established for parabolic trough in particular
- a technology that still dominates in today’s CSP sector.
That being said, current market juncture in the U.S. is
dragging the country’s CSP outlook down, despite its
tremendously high potential for this vast region.
such as enhanced oil recovery, mining, desalination or
others, which could on a year-to-year basis result in a
deployment rate between the conservative and pessimistic scenario. Optimistically, the rationale behind this
forecast is that the situation will change, and that not
only projects in planning and development will come
to fruition, but new projects will also be announced and
deployed over the next decade.
While there is currently no announced future capacity
for the U.S., there are over 1,300 MW under construction,
in addition to the 571 MW already in operation. A
large contingent of capacity is also currently under
planning - around 1,865 MW - while 600 MW is under
development.
With an average DNI of 2,700 kWh/m2/year in the
CSP-friendly states of the country, the U.S. has a
potential CSP capacity varying between 14 GW to
33 GW. However, several factors are limiting the
deployment of future capacities: mainly the competition from PV, cheap natural gas, and a healthy grid
with access to power import. With the doubling of
gas prices in the last year alone, CSP’s dispatchable
advantage could bring it back in the spotlight, if this
trend persists.
Considering the current U.S. CSP-specific market
juncture, the forecast below is fairly optimistic, in
the sense that it assumes a continuing interest from
developers, and low enough CSP LCOE to compete
on a niche level, perhaps through new applications
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Figure 5(6): Installed CSP capacity in the USA until 2024 (MW)
10,000
Optimistic
9,000
8,772
Conservative
8,000
Pessimistic
7,000
6,000
5,127
5,000
4,000
3,047
3,000
2,000
1,000
0
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Figure 6(6): CSP Cumulative Energy Production in the USA until 2024 (TWh)
350
323.6
Optimistic
300
Conservative
Pessimistic
251.6
250
201.6
200
150
100
50
0
2006
2008
2010
2012
2014
Conclusion
The United States has gained a forefront position within
the global CSP market. Currently, there is approximately
580 MW of CSP installed capacity in the country and a
further 1.3 GW is expected to start production between
the end of 2013 and the first half of 2014, which will
result in an increase of over 120%. Although, in the last
few years, the deployment of solar thermal power in the
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2016
2018
2020
2022
2024
U.S. has been somewhat slowed down by competing
market factors, there is still tremendous potential for
CSP growth in the country, which has also been shown
by the large amount of research and development
projects carried out. The SunShot Initiative is currently
acting as the main incubator of many activities, and the
program is expected to bring tangible benefits to the
entire CSP value chain in the short and medium term.
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References
Gereffi, G. and Dubay, K., 2008. Concentrating Solar Power: Clean Energy for the Electric Grid. Center on
Globalization. Governance and Competitiveness.
Gruenspecht, H., 2012. The Future Electricity Fuels Mix: Key Drivers. Technical presentation at the Electric Power
Conference & Exhibition. Maryland, USA.
Itten, R., Frischknecht, R. and Stucki, M., 2013. Life Cycle Inventories of Electricity Mixes and Grid. Paul Scherrer
Institut. ESU-services Ltd. Switzerland.
Mancini, T., 2011. The Status of CSP Development. Sandia National Laboratories.
McLaren, J. and Vimmerstedt, L., 2010. Solar Power and the Electric Grid, Energy Analysis Fact Sheet FS-6A2-45653.
National Renewable Energy Laboratory. Available through: < http://www.nrel.gov/analysis/pdfs/45653.pdf>.
Nazarian, D., 2012. Introduction to U.S. Electricity Markets. Presentation at the NARUC/CAMPUT Bilateral Roundtable.
Maryland Public Service Commission
Pitchumani, R., 2013. SunShot Concentrating Solar Power Program Update. Presentation at the Program Review
Meeting. Phoenix, AZ, USA. Available through: < http://www1.eere.energy.gov/solar/sunshot/pdfs/csp_review_
meeting_042313_pitchumani.pdf>.
Pool, S. and Coggin, J., 2013. Fulfilling the Promise of Concentrating Solar Power. Center for American Progress.
Washington, USA. Available through: < http://www.americanprogress.org/issues/green/report/2013/06/10/65887/
fulfilling-the-promise-of-concentrating-solar-power/>.
VV.AA and Marquez, C., 2012. CSP Market Report 2012-13. FC Business Intelligence. Available through: <http://www.
csptoday.com/csp-markets-report/>.
VV.AA and Muirhead, J., 2013. CSP Today Quarterly Update. FC Business Intelligence.
VV.AA, 2013. CSP Today Global Tracker Database. FC Business Intelligence. Available through: <http://social.csptoday.
com/tracker/projects>.
VV.AA, 2013. CSP Today Guide to CSP’s Role in the US Energy Mix. FC Business
Intelligence. Available through: <http://social.csptoday.com/technology/
csps-role-us-energy-mix-%E2%80%93-new-guide-released-csp-today>.
VV.AA, 2011. Electricity Regulation in the US: A Guide. The Regulatory Assistance Project. Vermont, USA.
VV.AA, 2013. FC Business Intelligence information and data. Available through: <www.csptoday.com>.
VV.AA 2011. Integrating Renewable Energy Resources Within the Oil Industry - Concentrated Solar Power and
Enhanced Oil Recovery. GDP Capital
VV.AA, 2013. Information and data. Available through: <www.tradingeconomics.com>.
VV.AA, 2013. Information and data. Available through: <www.indexmundi.com>.
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VV.AA, 2013. Information and data. Available through: <www.populationdata.net>.
VV.AA, 2013. Information and data. Available through: <www.reegle.info>.
VV.AA, 2013. Information and data. Available on www.data.un.org.
VV.AA, 2013. Information and data. Available through: <www.csp-world.com>.
VV.AA, 2013. Information and data. Available through: <www.eia.gov>.
VV.AA, 2013. Information and data. Available through: <www.selectusa.commerce.gov>.
VV.AA, 2013. Information and data. Available through: <www.ferc.gov>.
VV.AA, 2013. Information and data. Available through: <www.fellonmccord.com>.
VV.AA, 2013. Information and data. Available through: <www.renewableenergyfocus.com>.
VV.AA, 2013. Information and data. Available through: <www1.eere.energy.gov>.
VV.AA, 2013. Information and data. Available through: <www.renewableenergyworld.com>.
VV.AA, 2013. Information and data. Available through: <www.nrel.gov>.
VV.AA, 2013. Information and data. Available through: <www.en.cspplaza.com>.
VV.AA, 2013. Information and data. Available through: <www.companiesandmarkets.com>.
World Nuclear Association, 2013. Country Profile: Nuclear Power in the USA. Available through: <http://www.
world-nuclear.org/info/Country-Profiles/Countries-T-Z/USA--Nuclear-Power/#.Uj14j5GoWP8>.
(VV.AA: Various Authors)
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Acronyms
ACRONYM
DEFINITION
ACC
Arizona Corporation Commission
ARENA
Australian Renewable Energy Agency
ASTRI
Australian Solar Thermal Research Initiative
ASU
Arizona State University
BLM
Bureau of Land Management
BNEF
Bloomberg New Energy Finance
BTU
British Thermal Units
CDFW
California Department of Fish and Wildlife
CEC
California Energy Commission
COU
Consumer-Owned Utility
CPUC
California Public Utility Commission
DOD
Department of Defense
DOE
Department of Energy
DNI
Direct Normal Irradiance
EIA
Energy Information Administration
EIR
Environmental Impact Report
EOR
Enhanced Oil Recovery
ERCOT
Electric Reliability Council of Texas
EPA
Environmental Protection Agency
EPRI
Electric Power Research Institute
FERC
Federal Energy Regulatory Commission
FRCC
Florida Reliability Coordinating Council
FWS
Fish and Wildlife Service
HELCO
Hawaii Electric Light Company
IOU
Investor-Owned Utility
IPP
Independent Power Producer
ISO
Independent System Operator
ITC
Investment Tax Credits
IWPP
Independent Water and Power Producer
JPL
Jet Propulsion Laboratory
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LCOE
Levelized Cost of Electricity
LPO
Loan Program Office
MACRS
Modified Accelerated Cost-Recovery System
MENA
Middle East and North Africa
MRO
Midwest Reliability Organization
NERC
North American Electric Reliability Corporation
NPCC
Northeast Power Coordinating Council
NREL
National Renewable Energy Laboratory
NUG
Non-Utility Generator
OIT
Oregon Institute of Technology
ORC
Organic Rankine Cycle
PG&E
Pacific Gas & Electric Company
PMA
Power Marketing Agency
PNNL
Pacific Northwest National Laboratories
PPA
Power Purchase Agreement
PSC
Public Service Commission
PUC
Public Utilities Commission
REC
Renewable Energy Certificate
RFC
Reliability First Corporation
RPG
Renewable Portfolio Goal
RPS
Renewable Portfolio Standards
RTO
Regional Transmission Organization
SCE
Southern California Edison
SEGS
Solar Energy Generating Systems
SERC
SERC Reliability Corporation
SERF
South Eastern Electric Reliability Council
SNL
Sandia National Laboratory
SPP
Southwest Power Pool
TES
Thermal Energy Storage
USDA
United States Department of Agriculture
WECC
Western Electric Coordinating Council
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7
India
By Marco Poliafico
Peer reviewed by Geetanjali Patil Choori
Contents
List of Figures
188
List of Tables
188
Chapter Summary
190
Country Overview
190
7.1. Electricity Market
192
7.1.1. Electricity consumption
192
7.1.2. Electricity demand
193
7.1.3. Grid transmission
194
7.1.4. Market Structure Diagram
194
7.2. CSP Market
195
7.2.1. The Jawaharlal Nehru National Solar Mission
195
7.2.2. Delays and extensions
196
7.2.3. Hybrid Program
197
7.2.4. Renewable Purchase Obligations and Renewable Energy Certificates
198
7.2.5. Current CSP Projects
199
7.2.6. Local content requirements
201
7.3. Local CSP Ecosystem
202
7.3.1. Indian CSP ecosystem
202
7.3.2. Manufacturing Capability and Local Supplies
202
7.3.3. Steep learning curve
203
7.3.4. Key Government Agencies
203
7.3.5. Independent Water and Power Producers and Utilities
205
7.3.6. Permitting Agencies and Feasibility Study Providers
206
7.3.7. Local Consultants and R&D Bodies
208
7.3.8. Financing Organizations
209
7.3.9. Developers and EPC firms
212
7.4.1. Supply of Local Components
215
7.4.2. Raw Material Availability
219
7.5. Alternative CSP Markets
220
7.5.1. Process steam applications of concentrating solar thermal
220
7.5.2. UNDP- GEF project
221
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7.5.3. Biomass solar thermal hybrid projects
221
7.5.4. Desalination
221
7.6. Market Forecast
223
Conclusion
225
References
226
Acronyms
228
List of Figures
Figure 1(7): Direct Normal Irradiation in India
191
Figure 2(7): Installed CSP Capacity in India Until 2024 (MW)
224
Figure 3(7): CSP Cumulative Energy Production in India until 2024 (TWh)
225
List of Tables
Table 1(7): Drivers and Barriers in India
192
Table 2(7): Growth of Renewable Energy Share in India’s Electricity Mix
193
Table 3(7): Selection Criteria for the Tender Process of CSP projects in India
195
Table 4(7): India NSM – Achievements and Lessons Learnt from JNNSM Phase 1
197
Table 5(7): CSP Hybrid Pilot Program - Project Configuration
197
Table 6(7): India Solar Program Tariffs
198
Table 7(7): India Solar Thermal Cost – Benchmark
199
Table 8(7): India Solar Thermal Tariffs – Benchmark
199
Table 9(7): Current CSP Projects in India
199
Table 10(7): Indian CSP Ecosystem
202
Table 11(7): Ministries and Government Agencies in India
203
Table 12(7): Independent Water and Power Producers and Utilities in India
206
Table 13(7): Permitting Agencies and Environmental Assessment Agencies in India
207
Table 14(7): Consultants and R&D Bodies in India
208
Table 15(7): Main Funding Institutions and Banks Operative in India
210
Table 16(7): Developers and EPC Firms Operative in India
213
Table 17(7): Components Available Locally in India
215
Table 18(7): Raw Material Availability and Suppliers
220
Table 19(7): The World’s First Linear Fresnel Desalination Plant
221
Table 20(7): LFR Desalination Plant Specifications
222
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Chapter Summary
According to the 2013 CSP Today Markets forecast,
India is ranked as the fifth most promising CSP market
globally. With an average DNI of 2,100 kWh/m2 per year,
and a sustained ecosystem promoting the development
of utility-scale solar projects, the Indian CSP industry is
poised for growth in the short and medium term.
As the fourth largest consumer of energy in the world,
India consumes an estimated 794 TWh of electricity
annually, and by 2020, the country is expected to require
2,000 TWh of electricity per year. In response to the rising
domestic demand for electricity, in 2010, the Government
of India launched the National Solar Mission (NSM) to
deploy 20 GW of grid-connected solar power, with the
aim of reducing the cost of solar power in the country.
As of August 2013, a CSP capacity of 50 MW had been
realized under the NSM Phase 1, and 420 MW remains in
the phase 1 pipeline. Phase 2, which is expected to begin
in 2014, targets a CSP capacity of 1,080 MW, representing
30% of the overall target solar capacity.
A new CSP hybrid program will be incorporated into
Phase 2 to support the construction of four CSP hybrid
plants. In addition, the Renewable Purchase Obligations
mechanism will be employed to support the implementation of solar projects. Besides the NSM, other
states, such as Gujarat and Rajasthan, also have their
own guidelines and incentives.
At the time of publishing this report, India had
56 MW of operational CSP plants; five CSP plants
under construction totaling 254 MW; three under
development totaling 210 MW; four under planning
totalling 156 MW; and five announced totalling 155
MW, according to the CSP Today Global Tracker. The
domestic content requirement is a critical aspect in
India’s NSM. In Phase 1, this constituted 30% of required
components excluding land, although some developers
are targeting up to 50% local content to be price
competitive.
The local CSP ecosystem in India is characterized by
a growing market with tremendous opportunities for
both grid-connected and off-grid projects. For this
reason, hybridization of the current fossil fuel-based
capacity represents one of the most promising applications for India’s CSP industry. To facilitate a greater
understanding of India’s CSP ecosystem, a comprehensive list of government bodies, permitting agencies
Country Overview
India
Solar Resource (average annual sum of DNI): 2,100 kWh/m²/year
Size:
3,287,263 km²
Population (2012):1.237 billion
GDP per capita (2012): US$ 1,489
Installed power capacity: 223 GW
Annual electricity consumption: 794 TWh
Expected annual electricity demand in 2020:
2,000 TWh
Electricity Mix by Installed Capacity (2012)
Coal/petrol 56.4%
Hydro 19.3%
Renewables 12.2%
Natural gas 9.1%
Nuclear 2.4%
Oil 0.6%
Known Energy Resources
Coal, Wind, Natural Gas, Biomass, Solar
Potential Markets for Industrial CSP Applications
Mining, Desalination
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and utilities, as well as local feasibility study providers,
EPC firms, and financing organizations, is outlined in this
chapter.
While there are materials and sub components that are
easily available on the Indian market, such as steel, glass,
and concrete, other components are less easy to find,
or are even rare, such as molten salts. When it comes
to the alternative applications market, process steam
applications, hybrid biomass CSP, and desalination are
the areas with the largest potential for CSP in India.
The Ministry of New and Renewable Energy in India is
already implementing a project promoting CSP-based
process heat applications and another for the hybridization of CSP and biomass.
Among the main drivers for CSP deployment in India
are the energy generation targets established by the
government, the growing manufacturing sector, and
the environmental impact of fossil fuel electricity
generation, while low feed-in-tariffs, unreliable DNI data,
and the complexity of land acquisitions, are considered
to be some of the fundamental challenges hindering
the development of the local CSP market.
Figure 1(7): Direct Normal Irradiation in India
Source: SolarGIS © 2013 GeoModel Solar
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Table 1(7): Drivers and Barriers in India
Drivers
Barriers
Energy generation target set up by JNNSM
Capital costs / level of investment required for CSP
projects
Off-grid and industrial generation tends to be
powered by expensive fossil fuels, promoting the
cost-competitiveness of CSP
Financing for the projects has been difficult
Tailored policy for solar energy projects developed Limited track record and lack of indigenous know-how
at State level
Increasing electricity demand (doubled between
1990 and 2011)
Environmental concern over water requirements
Environmental impact of the fossil-fuel dominated Adequacy and stability of policy and regulatory
framework
power sector
Growing manufacturing sector
Low FITs
Open Access System for private power generation Availability and reliability of DNI data due to the lack of
adequate energy data and high levels of aerosol in the
atmosphere
Difficult for international EPC firms to be competitive
due to low profit margins limiting the profit margin.
Weakness of the transmission grid
Obtaining approvals and complexity of land acquisition
7.1. Electricity Market
India is one of the most important power markets in
the world. Globally, it is the fourth largest consumer
of energy and fifth in terms of installed capacity (in
addition to the 223 GW quoted in the box above, there
is approximately 35 GW of captive generation). Its
economy is largely dependent on fossil fuels.
The electricity market in India is characterized by
joint regulatory activities carried out by the central
government and individual states. This can make
the overall situation quite complicated at times. The
regulatory reform developed between the late nineties
and the beginning of the new decade established the
Central Electricity Regulatory Commissions (CERCs) and
the State Electricity Regulatory Commissions (SERCs).
Nowadays, the three segments of the market (generation, transmission and distribution) are separated,
although many companies still operate in more than
one sector.
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The generation is managed by three different players.
Some plants are owned and managed by the central
government and related bodies (approximately 31.5%
of the overall installed capacity). Among these is the
National Thermal Power Company (NTPC), a domestic
state-owned company, as well as NHPC and NPCIL.
Approximately 46% of the installed capacity is owned
by states or state-level corporations like State Energy
Boards (SEBs), Government Securities (GSEC) and others.
Finally, private developers in the form of IPPs control
approximately 22.5% of the installed capacity in the
country.
7.1.1. Electricity Consumption
The average annual domestic electricity consumption
per capita in India is very low. In rural areas, fewer
than 100 kWh (per person per year) is used, whereas
in urban areas this value rises to approximately 300
kWh. These numbers are well below the world average
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of 2600 kWh and a minor fraction when compared
to the consumption in Europe (6200 kWh). The
overall consumption (including industry and all other
economic sectors) is approximately 780 kWh per person
per year. Unfortunately, discrepant estimates regarding
consumption levels exist due to the lack of quality and
availability of robust data.
India accounts for more than 20% of the world’s
population and nearly 300 million people do not have
access to the electricity grid. A large number of people
living in rural communities use traditional fuels, ranging
from fuel-wood to agricultural waste and biomass for
heating and cooking needs. Not only does the lack of
access extend to over 33% of the rural population, but
also to approximately 6% of the citizens of urban centers.
India is currently one of the world’s fastest growing
energy markets. There is an ambitious plan for the
development of renewable technologies due to the
limited amount of fossil fuel reserves. In fact, the share
of renewables in India’s generation mix has grown from
a mere 2% in 2003-2004, to 6% in 2006-2007, to reach
12% in 2013.
Table 2(7): Growth of Renewable Energy Share in India’s
Electricity Mix
Renewable Energy
Share
Year
2%
2003 - 2004
6%
2006 - 2007
12%
2012 - 2013
Source: AF-Mercados EMI, 2013
The country has already developed a strong wind
energy market and looks at nuclear as another potential
technology to further deploy in the next decades.
However, more investment is needed in all three major
segments of the market (generation, transmission and
distribution) to guarantee access to the whole population
and improve the quality and reliability of the electricity
delivered. Some investment is already being made, but
they are far from being enough to meet demand. The
International Energy Agency estimates the amount of
investment needed to secure electricity access to the
entire population is in the order of about USD 135 billion.
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India also has serious environmental problems related
to the electricity generation sector; therefore, the choice
of clean fuels would have a positive impact on the
mitigation of these issues. There has already been an
encouraging level of penetration of renewable energy
technologies; in particular, wind energy.
Generation capacity is mainly owned by the states
(approximately 45%) and by the central government
(approximately 30%), with a remaining portion
managed by private investors (approximately 25%).
7.1.2. Electricity Demand
The electricity demand in India is growing fast due to
a mix of factors, including the relevant growth of the
manufacturing sector, the dramatically rising domestic
demand, and new villages being connected to the grid.
As a result of increasing demand, it is expected that the
installed capacity needed by 2017 will be in the order of
300 GW. This would be even higher if plant availability,
spinning reserve and losses were taken into account
(DIREC, 2010).
Primary energy consumption more than doubled
between 1990 and 2011, according to a report
produced by the US Energy Information Administration.
The electricity consumption increased at an average
rate of approximately 7% between 1970 and 2011, but
this rate almost doubled to around 13% in the last two
years.
The final consumers of electricity are mainly the
industrial sector (approximately 42%) and the domestic
sector (approximately 28%), whereas the agriculture
and commercial sectors use 20% and 10% of the overall
demand respectively. Residential consumption is
expected to grow dramatically in the next 20 years due
to improved living conditions, a rising population and
the connection of new rural areas.
Energy demand in India is growing at an average
annual rate of 8%. The cause is two-fold with both the
population and economy growing. Another important
aspect characterizing the demand is the strong trend
toward urbanization.
The gap between demand and the available supply is
one of the most serious issues in the Indian electricity
market. The country suffers a major shortage of generation capacity, especially in the North Eastern, Western,
and Southern regions, where major regional imbalances
are experienced. The power deficit during peak load in
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2010 was beyond 10% of the overall demand. At the
same time, supply of electricity is generally intermittent
and unreliable, causing rolling black outs affecting both
agricultural and industrial activities.
7.1.3. Grid Transmission
The transmission network is developed according to
five regions covering the whole country. Although each
region is connected to the adjacent ones, there is not
enough high-voltage connection capacity to make
sure that surplus of supply can be delivered to other
locations throughout the country. This contributes
to the issue of balancing demand and supply. In
recent years, there has not been good distribution of
investment between generation and transmission. As
a result, a number of new generation hubs have not
been useful on the market because of transmission
bottlenecks. This is, for instance, what happened to the
wind power generation in Tamil Nadu.
Another issue for the transmission sector is the losses
that, in some regions, exceed 35%: much higher that
the world average, which is lower than 15%. These
losses are caused by both technical and non-technical
factors, mostly represented by illegal tapping of lines
and electric meter faults. The government set an
objective to reduce this to approximately 17% by 2017
and to around 14% by 2022.
The transmission network was formerly divided into
five regional grids that were not interconnected. Now,
the Power Grid Corporation of India Ltd. (PGCIL) is
responsible for inter-state transmission and development of the national grid, owning about 40% of the
whole network. PGCIL acts as the Central Transmission
Utility (CTU). Different State Transmission Utilities
(STUs) are responsible for developing the transmission
infrastructure within the states, and in some cases the
private sector is also involved at this level.
The distribution is almost entirely owned by SEBs.
7.1.4. Market Structure Diagram
Central
Government
State
Regulators
CERC
SERC
Generation
CGS, MPP...
NTPC, NHPC,
NPCIL...
IPPs
Transmission
PGCIL (CTU)
STU
Private
Licensee
DISCOMs
Private
Licensee
Distribution
Private Sector
Customers
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7.2. CSP Market
Among the various renewable energy resources, the
potential of solar energy is the highest in India, equivalent to about 6,000 million GWh of energy per year (De,
2013). In comparison, the level of electricity generation
in 2008-2009 from all renewable resources was 0.7
GWh (De, 2013). Indian states that have the maximum
insolation are Rajasthan and Gujarat. In addition, the
states of Tamil Nadu, Andhra Pradesh, Madhya Pradesh,
Maharashtra and Chattisgarh also enjoy good insolation
levels. Most of these states are in regions with unmet
electricity demand.
The Ministry of New and Renewable Energy (MNRE) of
India is in charge of planning and promoting the development of renewable energy generation technologies.
The power market is regulated by the Central Electricity
Regulatory Commission (CERC) and the State Electricity
Regulation Commissions (SERCs).
7.2.1. The Jawaharlal Nehru National Solar Mission
The government has set an ambitious program for the
implementation of solar energy technologies (PV and
CSP) with the Jawaharlal Nehru National Solar Mission
(JNNSM or NSM). The objective is to establish leadership
in solar energy by creating appropriate policy conditions for the implementation of solar technologies
across the country. The program is also intended to
boost the local manufacturing capacity for the PV
industry over the next decade.
The overarching goal is the development of 20 GW
capacity (between PV and CSP), to be installed in
three different phases: the first was supposed to be
completed by 2013 but has been delayed to 2014, the
second phase should start from the end of the first
phase until 2017 and the third phase should take place
from 2017 to 2022. Within the policy framework, the
agency in charge for the procurement through Power
Purchase Agreements (PPAs) with the developers and
the overall implementation of Phase 1 is the National
Thermal Power Corporation’s VidyutVyapar Nigam Ltd
(NVVN).
The electricity market operates through very peculiar
arrangements. NVVN establishes a “tripartite” agreement
to buy the electricity from the Independent Power
Producers (IPPs) and sell it to the Discoms (see market
structure diagram). The PPA signed with IPPs is 25 years
long and a Power Sale Agreement (PSA) is similarly
signed with the Discoms. This is the current mechanism
set up within the JNNSM guidelines.
Phase 1 was launched in 2010 and anticipated the
implementation of 500 MW each for PV and CSP
technology. The bid process was held in November
2010, and 77 CSP proposals totaling 1,815 MW were
received by NVVN. At the end of the selection process,
seven CSP proposals had been selected for an overall
capacity of 470 MW.
A very competitive reverse auction system was set
to agree the final tariffs. The threshold established by
CERC was of INR 15.31/kWh. The lowest bid was INR
10.49/kWh (offered by Lanco). Many industry insiders
expressed concern on the effect that such a low level
of tariff could have on the capacity to fulfill the NSM
targets. The guidelines regarding the selection criteria
for CSP projects are summarized in the table below.
Table 3(7): Selection Criteria for the Tender Process of CSP projects in India
Criteria for Shortlisting
Criteria Evaluation
Capacity
Between 5 MW and 100 MW because there is the requirement to connect the plant
to the TRANSCO at 33 kV and above
Request for Selection (RfS)
Developers need to submit their expression of interest within 30 days starting from
when the Request for Selection (RfS) is issued by NVVN
Processing Fee
The non-refundable processing fee to be submitted with the expression of interest
by each developer is Rs 1 Lakh, i.e. approximately USD 2,129
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Number of Applications by a Each group cannot submit a request for selection for more than 100 MW. This can
Company
be represented by a single plant or by multiple plants with overall capacity within
the threshold
Qualification Criteria for Shortlisting
Financial Criteria - Net Worth This parameter would be calculated from the unconsolidated audited annual
accounts of the last four years (prior to submission) and should be at least equal to
Rs 3 crore, i.e. approximately USD 639,000 per MW of the project proposed up to 20
MW. For each MW beyond the 20 MW, a further value of Rs 2 crore (approximately
USD 426,000) should be demonstrated
Technical Criteria
Only new plant & machinery can be used. Any CSP technology can be used (or any
combination of them). The developer has to be a design and engineering company
with a track record of at least a 1 MW plant or an EPC with a track record of at least
100 MW already installed (these are not the only criteria available). The developer
must include in the project appropriate monitoring equipment (solar irradiance,
ambient air temperature, wind speed, electricity generated) and commit to submit
regular reports to the relevant ministry
Connectivity to the Grid
The plant should be designed for connection with the State Transmission Utility
(STU) at 33kV or above and the connecting point should be at the substation (as
opposed to the distribution substation). The STU would have the responsibility
for construction of the transmission line between the plant and the substation.
The developer needs to submit a letter specifying the location of the project and
confirming the technical feasibility of the connectivity to TRANSCO
Water Availability
The developer should submit the request for water services to the relevant
local authority or state and include evidence of agreed arrangement within the
application
Land Availability
The developer is required to gain ownership or lease hold rights for at least 30 years
for 100% of the land required for the project at the time of filing the application to
NVVN (2 Hectares/MW).
Source: JNNSM -Guidelines for Selection of New Grid Connected Solar Power Projects, produced by Mercom Capital Group, 2011
7.2.2.Delays and Extensions
Of the seven projects selected under the Phase 1 of the
solar mission, only one was expected to meet the May
2013 deadline: namely, the 50 MW Godawari project,
which was ultimately connected to the grid on 5 June
2013. For this reason, the government first postponed
phase 2 and then extended the completion deadline
for phase 1 to March 2014 (10 additional months).
According to a draft paper released by the MNRE, this
was to allow for the lessons learnt during phase 1 to
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be better digested and incorporated into the new
bidding round. The change does not cover the 30
MW CSP projects under the Migration Scheme, which
had already signed PPAs with different policies. This
change avoided millions of dollars in penalties, so it has
been well received by the developers. Alongside the
extension to Phase 1, the government is also reviewing
the guidelines for the JNNSM as a tailored committee is
studying possible amendments aimed to bring about
greater clarity.
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Table 4(7): India NSM – Achievements and Lessons Learnt from JNNSM Phase 1
Feed-in-tariff changed over to competitive bidding
Competitive bids discovered real CSP cost and levelized cost of electricity (LCOE)
Involvement of multi-lateral financial institutions
High localization achieved, 40-60%
Growth of local suppliers – EPC turn-key providers are now available in India
Technical expertise and senior construction manpower multiplied, which will help in Phase 2.
Movement of Chinese suppliers of mirrors, receiver tubes, heat transfer fluid, structures and salt into India, which is
expected to bring more cost benefits to Phase 2
Unreliable DNI data spurred the MNRE to set up solar radiation measurement stations at various regions, which is
increasing investors’ confidence for funding projects in India
Insufficient completion time resulted in delays and missing deadlines
Source: Somani, 2013
Phase 2 of the JNNSM is expected to start in 2014. The
target capacity for the year 2015 has now been set at
1080 MW CSP and 2520 MW PV technology. Therefore
CSP represents 30% of the overall installed capacity.
The projects will be selected through a similar reverse
bidding process.
7.2.3.Hybrid Program
A new program to support the development of CSP
hybrid plants has also been announced by MNRE.
The government will support the construction of four
hybrid pilot plants of 20 to 50 MW, depending on
land availability and commitment of the hosting state
government. The first will implement hybrid cooling,
with the objective of reducing water consumption; the
second will work with steam temperature above 500
Cº; the third will be equipped with 10 or more hours
of molten salts storage to achieve round the clock
operation; and the fourth will employ 30% natural gas
as a backup fuel, and is likely to be in the form of an
ISCC.
The Request for Proposal is expected to be out in
August 2013, and the development will be under NSM
Phase 2 and supported by the VGF concept (Somani,
2013).
Table 5(7): CSP Hybrid Pilot Program - Project Configuration
Air-cooling system to reduce water consumption
Gas backup up to 20%
Gas backup is meant to support HTF heating and auxiliary firing to raise steam temperature up to 500C°
Thermal storage of minimum 2 to 3 hours
CUF will be prescribed based on concept, technology and DNI
Developer will have the choice for an alternative technology and land
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PV solar energy could be allowed for auxiliary power
Access to transmission will be guaranteed
Source: Somani, 2013
The plants will be located in four different states
(Rajasthan, Gujarat, Tamil Nadu and Andhra Pradesh).
The government will facilitate the provision of land,
water, grid connection, geo-technical and environmental studies and PPA licenses. The developers will
be selected through a competitive bidding process
under the guidelines of the MNRE and the Renewal
Fuel Standard Program. Until recently, ISCC technology
was not formally recognized under the NSM, and thus
related projects could not technically be taken up under
the framework. However, with the introduction of the
new solar-thermal hybrid program that comes under
the MNRE’s energy strategy for 2011-2017, which will
involve interaction with the Ministry of Petroleum and
Natural Gas, the picture is about to change.
7.2.4. Renewable Purchase Obligations and
Renewable Energy Certificates
The mechanism of the Renewable Purchase Obligations
(RPOs) will be employed to support the implementation
of solar energy projects. Each utility must include a
portion of energy generated from solar plants in their
electricity mix, and can meet this obligation either by
purchasing the required quantity of solar electricity
directly from producers or by buying solar Renewable
Energy Certificates (RECs). The RPO is currently set at an
average of 0.25% of total electricity generation.
Renewable Energy Certificates (RECs) are issued to any
generating entity selling renewable electricity to the
grid at the Average Pooled Purchase Cost (APPC) of the
relevant distribution utility or to third-party consumers
at a mutually-agreed price. The current REC tariff for
solar projects is currently between INR 9.3/kWh (floor
price) and INR 13.4/kWh (ceiling price).
Besides the NSM, some Indian state governments
have their own guidelines and incentives for the
development of solar energy projects. For instance, the
Gujarat State Solar Energy Policy was published in 2009
and is valid until 2014. This framework is the only one
in India with fixed FIT and works on a first-come-firstserved basis. The tariff is set at INR 14/kWh for the first
12 years, and INR 7/kWh for the following 13 years. The
Rajasthan Solar Energy Policy was published in 2011.
The Karnataka Solar Policy was announced in 2011, and
the maximum size allowed for CSP plants is 10 MW. The
policy does not have any local content requirement.
During the first phase, only 2 CSP projects (10 MW
each) were submitted out of maximum 30 MW, and
the remaining 10 MW were assigned to PV projects.
This policy follows a reverse bidding system with a cap
tariff of INR 11.3/kWh. Another state government with a
specific policy is Tamil Nadu which aims to install 1 GW
of solar power by 2017. An overview of tariff information
is provided in the table below.
Table 6(7): India Solar Program Tariffs
Solar Program
Allocation MW
Tariff (INR/kWh)
PPA Period
National Solar Mission
20,000
15.31
25 years
Rajasthan Solar Program
12,000
1.95
25 years
Gujarat Solar Energy
Policy
935
14.0
From years 1 to 12
7.0
From years 13 to 25
Maharashtra
15.24
25 years
Jharkhand
13.12
25 years
Madhya Pradesh
11.26
25 years
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Karnataka
350
25 years
11.35
Source: AF-Mercados EMI, 2013
The introduction of competitive bidding for solar power
procurement has significantly brought down tariffs over
the last three years, and is helping states fulfill their solar
Renewable Purchase Obligation targets at reasonable
costs.
Table 7(7): India Solar Thermal Cost – Benchmark
Rs Cr/MW
2010-11
2011-12
2012-13
2013-14
Solar Thermal
14.2
15
13
12
Source: AF-Mercados EMI, 2013
Table 8(7): India Solar Thermal Tariffs – Benchmark
Rs/Kwh
2010-11
2011-12
2012-13
2013-14
Solar Thermal
15.31
15.04
12.46
11.9
Source: AF-Mercados EMI, 2013
7.2.5. Current CSP Projects
Table 9(7): Current CSP Projects in India
Bid RS/
kWh
Storage
Financiers
12.20
No
Bank of Baroda
Name
Developer
MW
capacity
Current status
Technology
Godawari Green
Energy
Hira Group
50
Operation
Parabolic
Trough
Indian Institute of
Technology CSP
Project
Abengoa
3
Operation
Parabolic
Trough
Acme Rajasthan
Solar Power 1
ACME Group
2.5
Operation
Solar Tower
15.31
no
LFR Solar Thermal
Desalination plant
Empereal-KGDS
1.06
Operation
Linear Fresnel
n/a
0.5 hours
www.csptoday.com
no
Department
of Science and
Technology,
(DST) Govt. of
India
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IIT /SEC plant
Empereal-KGDS
-
Operation
Linear Fresnel
n/a
no
Ministry of
New and
Renewable
Energy,
(MNRE) Govt.
of India
Abhijeet (Corporate Abhijeet
Ispat Alloys)
50
Construction
Parabolic
Trough
12.24
no
BOI and IOB
Reliance Areva
CSP 1
Reliance Power
125
Construction
Linear Fresnel
11.97
no
ADB, US Ex-Im,
Megha
Megha
Engineering
Limited
50
Construction
Parabolic
Trough
11.31
no
IDBI
MNRE R&D Project
Ministry of New
and Renewable
Energy
1
Construction
Parabolic
Trough
n/a
no
Ministry of
New and
Renewable
Energy
Gujarat Solar One
Cargo Power and 25
Infrastructure
Construction
Parabolic
Trough
9 hours
70% from
Banks
Bap Project / Dalmia Dalmia Cements 10
Solar Power
Development
Dish
15.31
no
Diwakar Solar
FMO
Lanco Solar
100
Development
Parabolic
Trough
10.49
4 hours
Axis
KVK Energy Ventures Lanco Solar
100
Development
Parabolic
Trough
11.20
4 hours
ICICI
Rajasthan Solar One Entegra
10
Planning
Parabolic
Trough
8 hours
Reliance Areva
CSP 2
125
Planning
Linear Fresnel
No
Aurum Renewables Aurum
20
Planning
Linear Fresnel
Mathania ISCC
TBC
35
Announced
Parabolic
trough
Gujarat CSP Pilot
plant
TBC
35
Announced
TBC
5.83
(targeted)
No
Andhra Pradesh
Pilot CSP Plant
TBC
20
Announced
TBC
5.83
(targeted)
No
Rajasthan CSP Pilot
Project
TBC
40
Announced
TBC
5.83
(targeted)
No
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Reliance Power
12.19
No
No
GEF USD 49
million Debt
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Tamil Nadu CSP Pilot TBC
Project
25
Announced
TBC
5.83
(targeted)
No
Acme Rajasthan
Solar Power 2
ACME Group
10
On hold
Solar Tower
15.31
no
Indian Institute of
Technology – CSP
Project
Empereal-KGDS
1
Planning
Linear Fresnel
Yes
Source: CSP Today Global Tracker, August 2013
7.2.6. Local Content Requirements
The domestic content requirement is a critical aspect
of Indian projects. For all of the CSP plants awarded in
Phase 1, the domestic content requirement was 30%,
excluding land, but including any other component or
installation. Some developers, however, are targeting up
to 50% local content in order to be price competitive. In
general, different companies are approaching the local
content requirement differently.
Many local industry stakeholders are very interested in
developing local manufacturing skills and promoting
know-how transfer. Furthermore, they aspire to become
the serving industry for the development of CSP
technology in the MENA region. Indian engineering
companies have good experience in supplying power
block components for traditional power plants.
Looking at other components, the local supply chain
is not sufficiently developed at present and investors
need to import components for both the solar field and
thermal storage system.
As a matter of fact, the projects in Phase 1 have suffered
delays in equipment supply, probably due to the high
requirement for local components that could not
meet the delivery times. A domestic local content
requirement has not been confirmed yet for Phase 2.
The Ministry of New and Renewable Energy and the
Fraunhofer Institute for Solar Energy Systems ISE signed
a Memorandum of Understanding promoting the
development of research, demonstration and pilot
projects employing PV, CSP and hydrogen technology.
Furthermore, many projects between the ISE and
India have already been planned in detail or are in the
development phase.
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7.3. Local CSP Ecosystem
7.3.1. Indian CSP ecosystem
Table 10(7): Indian CSP Ecosystem
developers
EPCs
Financiers
Policies
Abhijeet
Jyoti
Engineering
BOI
National Solar
Mission
Lanco
ACME
IOB
Lanco
Infratech
Bank of Baroda
MEIL
Aurum
Axis
Lauren CCL
Reliance
Godawari
Empereal-KGDS
US Ex-Im
Reliance
FMO
Gujarat
REC
Turbine Makers
Other State
Policies
HTF
CSP-Biomass
Hybrid
IDBI
Shriram EPC
ICICI
Off-grid CST
Structures Steel
Empereal-KGDS
The CSP local system in India is characterized by a
growing market with tremendous opportunities
both for grid-connected and off-grid projects. Fossil
fuel plants are struggling to keep up with increasing
demand and are a source of environmental concern. For
this reason, hybridization of the current fossil-fuel-based
installed capacity is one of the most promising applications for the CSP industry in the country. Overall, India
is becoming one of the most attractive CSP markets in
the world. That said, the local environment has a variety
of strengths and weaknesses that need to be taken into
account when developing a project.
7.3.2. Manufacturing Capability and Local
Supplies
One of the key aspects within the whole value chain is
manufacturing capability. Generally speaking, India has
well trained workers and engineers and the low cost of
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Glass
Manufacturers
ADB
Corporate Ispat
Cargo Solar
Global
Manufacturers
the workforce is without doubt one of the most relevant
aspects to consider within the value chain. However,
it is also true that the country lacks the specific skills
required for the production of many components and
parts of a utility-scale CSP plant. This aspect is strictly
interconnected with the domestic content requirement
proposed by the JNNSM and the reverse bidding
mechanism. From one side, developers need to reduce
the costs by maximizing the uptake of local resources
to make the project financially viable. From the other
side, components and adequate skilled personnel are
not always available to sufficiently guarantee quality
during the construction stage. This is a major concern
for developers because it might undermine the
optimal performance of the energy plants. For instance,
some Phase 1 projects have been delayed because
components like the Heat Transfer Fluid (HTF) were not
available.
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and well-trained workers will definitely pave the way
for more manufacturing industries to improve their
expertise and reduce costs, which in turn will support
the growth of installed capacity.
On the positive side, local manufacturing capabilities
are improving steadily, which provides a promising
picture for the future development of the solar
program. Various components of the power block are
already available locally because they are similar to
the parts employed in conventional thermal power
plants. Furthermore, steel parts, control systems and
civil construction-related skills are already locally
available. Other elements such as hydraulic drivers, HTF
and adapted turbines are becoming more available as
experience and know-how are gained by local suppliers.
Thermosol Glass is setting up Asia’s first fully automated
glass processing plant in Gujarat to produce high
quality parabolic mirrors used in CSP projects across the
globe.
Moreover, the projects developed in India are becoming
a showcase for Fresnel technology as some plants
under construction are much larger than the previous
commercial ones developed in Spain. Likewise, hybridization is considered the biggest opportunity for CSP
technology in the country. It is expected that specific
environmental conditions will prompt the development
of a tailored technical solution. The possibility to use
CSP for distributed off-grid and alternative use is
another sizeable opportunity given the quantity of
people that are not connected to the grid. Off-grid
solutions could replace expensive diesel generation,
as well as provide heat and cooling load and process
steam for industries.
7.3.3. Steep Learning Curve
India considers Phase 1 as the right opportunity to
gear up and face a steep learning curve which will
allow the country to become a regional manufacturing
hub for the whole of the CSP industry, at least in the
plans of the policy makers. Progress is constantly being
made along the value chain and strong competition
from local developers is leaving almost no room for
international developers. The huge potential for CSP
technology alongside the availability of low-cost
7.3.4. Key Government Agencies
At the planning stage, an investor or developer will
need to work with government agencies to gain the
necessary permitting requirements. Table 11(7) provides
an overview of the main government bodies active in
India that might be relevant to a CSP energy project.
Table 11(7): Ministries and Government Agencies in India
Name
Roles and Responsibilities
Bureau of Energy
Efficiency - Ministry of
Power
This department within the
Ministry of Power establishes
systems and procedures to
measure, monitor and verify
energy efficiency results.
Creates policies and develops
strategies on self-regulation
and market principles to
achieve energy efficiency.
Certifies energy managers and
performs energy audits.
www.csptoday.com
Previous renewable energy programs (if applicable)
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Central Electricity
Authority (CEA)
CEA describes the standards
on the construction of
electrical plants, electric lines
and connectivity to the grid,
installation and operation
of meters, and safety and
grid standards. Facilitates
exchange of power within the
country from surplus to deficit
regions, and with neighboring
countries for mutual benefits.
Advises the central and state
governments, licensees or
generating companies on
matters which enable them
to operate, maintain, and
improve the electricity system
under their ownership/
control.
A study carried out by the CEA in 2009-10 to evaluate the
potential for dry cooling as an alternative to reduce water
consumption by power plants found that dry cooling
can cause an increase in base tariff by 8 to 9 percent.
The committee, constituted of members drawn from
BHEL, NTPC, MAHAGENCO, and other stakeholders found
that dry cooling reduces plant output by 7 percent,
and causes an increase in power consumption by 0.2
percent to 0.3 percent as a percentage of gross power
production.
Central Electricity
Regulating
Commission (CERC)
CERC is the key regulator of
the power sector in India.
Under Regulation 61, CERC has set the normative capital
cost for solar thermal power projects as 1,200 Lakh/MW
for the FY 2013–14.
Government of
Rajasthan
Issued the Rajasthan Solar
Energy Policy in 2011, with
the objectives of developing
solar power plants to meet
the renewable purchase
obligation, promoting off-grid
applications of solar energy
and developing solar parks.
Approved the solar projects of 11 private developers for
setting up 66 MW capacity CSP and PV systems. After
the announcement of the National Solar Mission (NSM),
the Government of Rajasthan permitted these proposals
to be migrated to the NSM. The seven PV plants, each
5 MW, are already commissioned under the migration
scheme of NSM, while the CSP plants of 30 MW are under
implementation.
India Meteorological
Department (IMD)
IMD provides current and
forecast meteorological
information and statistics for
optimum operation of weather-sensitive activities. Detects
and locates earthquakes
and evaluates seismicity in
different parts of the country
for development projects.
IMD has 45 radiation observatories recording various
radiation parameters. At all these stations, measurement
of global solar radiation is being carried out, while at
selected stations, other parameters like diffuse, direct, net,
net-terrestrial and reflected radiation, and atmospheric
turbidity are also measured. Observations made at
the national network of radiation stations are used in
assessing solar energy potential across the country.
Ministry of New &
Renewable Energy
(MNRE)
The MNRE is responsible
for formulating and implementing policies, establishing
new and renewable energy
development program, and
intensifying R&D in the sector.
As of 31 March 2013, the MNRE had installed and
grid-connected 1.68 GW of solar PV, 1.9 GW of wind
power, 3.6 GW of hydropower, and 1.26 GW of biomass
power.
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National CDM
Authority – Ministry of
Environment & Forests
(NCDMA)
A single window clearance
for Clean Development
Mechanism (CDM) projects in
India. Receives CDM project
proposals and upon acceptance, issues a Host Country
Approval.
Approved hundreds of renewable energy projects
throughout India. The full list can be viewed through the
following link: http://www.cdmindia.gov.in/approved_
projects.php?n=1
Solar Energy
Corporation of India
(SECI)
SECI is a newly formed publicsector company, established
by the MNRE to administrate
the provision of the Viability
Gap Funding.
SECI plans to call for bids for four pilot CSP projects,
requiring an investment of about Rs 2,555 crore. The
projects have been sanctioned by VGF of Rs 1,020 crore
and the bidders who seek the least funding will bag the
projects. SECI will offer these projects for international
competitive bidding in 2014.
Tamil Nadu Energy
Development Agency
(TEDA)
TEDA is leading Tamil Nadu reach its objective of
TEDA is a state governgenerating 40% of India’s solar energy by 2015.
ment-owned agency that
promotes renewable energy
sources in Tamil Nadu and the
nodal agency for renewable
energy in the state.
7.3.5. Independent Water and Power Producers
and Utilities
The development phase of a project will require contact
and commercial agreements with utility companies.
These can provide the necessary permits to connect to
the electricity and water grid (if available). Table 12(7)
provides an overview of the most important utility
companies and IPPs in India.
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Table 12(7): Independent Water and Power Producers and Utilities in India
Name
Previous renewable energy programs
(if applicable)
Roles and Responsibilities
Central
Permission for the Implementation of Metering CTU makes interstate transmission
arrangements of solar energy generated
Transmission Utility Code, Protection System can be obtained
through solar power plants.
(CTU)
from the host Distribution Utility, the State
Transmission Utility (STU), or the Central
Transmission Utility (CTU), also known as Power
Grid Corporation of India. The STUs are in charge
of issuing condition subsequent approvals for
grid connections.
Gujarat Urja Vikas
Nigam Ltd
Generation offtaker for Gujarat Solar One
Wholly owned subsidiary of Gujarat Electricity
CSP plant.
Board. Created as a part of its efforts towards
the restructuring of the power sector, with the
aim of improving efficiency in management and
delivery of services to consumers.
National Thermal
Power Corporation
(NTPC) Vidyut
Vyapar Nigam Ltd.
(NVVN)
NVVN is the generation offtaker for the CSP
A wholly owned subsidiary of NTPC Ltd. NVVN
is designated by the government as the Nodal plants being built under the National Solar
Agency for Phase I of Jawaharlal Nehru National Mission.
Solar Mission, for the purchase of power from
solar Projects connected to grid at 33 KV and
above, and for sale of such power bundled
with the power sourced from NTPC Coal Power
Stations to distribution utilities under Phase I
(2010-2013) of JNNSM. Any technical or price
proposal must be sent to NVVN for a project
allotment under the JNNSM scheme.
Jaipur Vidyut Vitran Distributes and supplies electricity in the 12
Nigam Ltd.
districts of Rajasthan.
Generation offtaker for the 10 MW Bap CSP
Plant.
Rajasthan Vidyut
Prasaran Nigut
(RVPN)
Solar power project developers in
Rajasthan need to sign a transmission
agreement with RVPN. In the case of other
states, it would be the respective State
Transmission Utility.
RVPN is Rajasthan’s state transmission utility.
Tamil Nadu Water
TWAD was established by the Government of
and Drainage Board Tamil Nadu to ensure the supply of water and
(TWAD)
sewerage facilities to the state Tamil Nadu,
except Chennai Metropolitan area.
7.3.6. Permitting Agencies and Feasibility Study
Providers
This stage of project development can be one of
the weakest parts of the process. As a matter of fact,
there can be problems both with land acquisition
and with obtaining the necessary permits. The former
www.csptoday.com
TWAD is the utility offtaker for the
Ramanathapuram CSP Desalination Plant
in Tamil Nadu (Water Purchase Agreement
signed between TWAD and developer of
the plant, KD Design Services).
is also affected by difficulties in water availability
and the fact that land itself is a scarce commodity.
The latter mainly depends on complex bureaucratic
organization. The power sector needs to comply with
the state and federal regulations. There are too many
bodies (between the state and the federal ones) that
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are involved in the decision-making process. This
situation makes it almost impossible to develop a sound
and effective policy. The regulatory situation of the
electricity market is also complicated by the common
energy wastage, bribes and cheating. As a result, the
permitting phase can be quite time- consuming.
Another relevant difficulty at the planning stage is the
availability and reliability of DNI data. India does not
have enough ground-measured solar data and indeed
the government also tendered for 50 new monitoring
stations to be built all over the country to overcome
this issue. The quality of data available through satellite
is not fully reliable because of the amount of aerosol
present in the atmosphere, including dust, sand and
other solid particles reducing the DNI. It is fair to say
that the situation in this regard is constantly improving
and more accurate forecasts will help build the business
case for the lenders who are not fully confident with
respect of CSP technology. Table 13(7) lists the key
permitting and environmental assessment agencies
operating in India
Table 13(7): Permitting Agencies and Environmental Assessment Agencies in India
Name
Roles and Responsibilities
Centre for Wind Energy
C-WET is implementing the Solar Radiation Resource
Technology – Ministry of New Assessment (SRRA) station project across the nation to
& Renewable Energy (C-WET) assess and quantify the solar radiation availability and
weather parameters with a view to develop a Solar Atlas.
Ministry of Environment &
Forests (MOEF)
Previous renewable energy programs
(if applicable)
C-WET, Chennai completed the first phase
of the project by installing a network of
51 SRRAs stations using high resolution
instruments.
MOEF issues environmental and forest clearance/
permission if a proposed project area involves any forest.
Pollution Control Board (PCB) Approval or clearances for CSP projects need to be
attained during project construction from the PCB.
Solar Energy Centre (SEC)
– Ministry of New and
Renewable Energy (MNRE)
SEC provides facilities for technology evaluation &
validation, solar resource assessment, testing & standardization, monitoring & data analysis, and training.
SEC has developed national standards
and established testing protocol for solar
thermal devices and research facilities.
Reviving a 50 Kwe CSP Plant by indigenizing some critical components like Heat
Collection Elements. The plant is being used
as R&D and educational facility.
Rajasthan Renewable Energy
Corporation Ltd.
A State Nodal Agency that promotes and develops
non-conventional energy sources in Rajasthan. Facilitate
allotment of revenue land, power evacuation approval,
execution of PPAs and coordination with MNRE and
State Agencies, including State Transmission Utility and
Discoms.
Implemented the electrification program
for remote unpowered villages where
grid-connection was either not feasible
or not cost-effective, and that were not
covered under Rajiv Gandhi Grameen
Vidyutikaran Yojana.
Rajasthan State Pollution
Control
Conducts site visits to ensure proposed sites do
not involve wet land, agricultural land, ecologically
sensitive locations or areas with large populations.
Clears availability of adequate water for solar plants.
Provides science-based policy options for environmental
compliance.
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7.3.7. Local Consultants and R&D Bodies
India still represents somewhat unfamiliar territory for
international CSP developers. This increases the importance of collaborating with local partners with business
intelligence capabilities and knowledge of the local
environment. Table 14(7) shows a list of consultants and
R&D centers operative in India.
Table 14(7): Consultants and R&D Bodies in India
Name
Roles and Responsibilities
Previous CSP Projects
Clique Consultants Pvt.
Ltd.
Engineering consultants working across all major
industries.
Council on Energy,
An independent, nonprofit policy research institution that
Environment and Water works to promote dialogue and common understanding
on energy, environment, and water issues in India and
elsewhere through research, partnerships with public and
private institutions, and outreach to the wider public.
Assessing India’s 22 GW solar mission,
including progress of Phase 1 of the NSM.
Jointly published “CSP: Heating up India’s
Solar Thermal Market under the NSM” with
the Natural Resources Defense Council.
Energy Guru
Worked on Cargo Solar’s Gujarat Solar One
Energy Guru provides feasibility studies, expert advice on
technology, and government incentives, turn-key solutions, and Dalmia Solar.
financing to renewable energy projects such as utility-scale
Solar PV, Solar CSP, Small Wind, Large-Wind, Geothermal,
Biogas and Biomass Power Plants. Energy Guru promoting
hybrid CSP for biomass and coal based power plants. Energy
Guru also works in Direct Steam Generation technology for
process steam and cooling applications.
Indian Institute of
Technology Bombay
(IITB)
IIT Bombay offers intellectual property available as patents,
patent applications, and know-how based on its R&D efforts
for licensing to interested parties in various areas, including
solar energy. IITB the second in the chain of IITs, is a technical
university set up in 1958. IITs are a group of autonomous
public engineering and management institutes comprised
of 16 institutes throughout India. They receive comparatively
higher grants than other engineering colleges in the
country.
Contracted KG Design Services Renewable
Energy to build a Linear Fresnel CSP Plant
in Gwalpahari, South of Delhi, to produce 2
MWth dry saturated steam. This will be part
of generating and uploading 1 MWe to the
grid at the solar energy center of the MNRE.
Natural Resources
Defense Council
(NRDC)
An international nonprofit environmental organization with
more than 1.3 million members and online activists.
Jointly published “CSP: Heating up India’s
Solar Thermal Market under the NSM” with
the Council on Energy, Environment and
Water.
Procon Engineers
Consultants on design, detailed engineering, project
management, construction and operation & maintenance
of power plants offering feasibility reports, procurement
assistance, project management and energy audit services.
www.csptoday.com
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Saurya
Solar energy consultancy and training firm offering
engineering solutions such as detailed annual insolation
data on the site; distance to grid connection points and
allowed max power to be fed in the grid; soil reports and
studies of local environmental conditions, irradiation, and
temperature profile; surveys of areas surrounding the site
for shading effects and industry influences; availability
of electricity for installation work and water for later
maintenance.
Worked with Lanco Solar, National Thermal
Power Corporation, Bharat Heavy Electricals
Ltd., amongst many others.
Sponsors research, demonstration and pilot projects in
Solar Energy
Association of Gujarat renewable energy. Provides technical and financial assis-
Implementing Gujarat Solar Power Policy
2009, which will remain in operation up to 31
tance to projects advancing renewable energy development March 2014. Solar Power Generators (SPG) of
a max 500 MW, installed and commissioned
in Gujarat. Undertakes, on its own, or in collaboration
during this period will become eligible for
with other agencies, renewable energy R&D programs.
the incentives declared under this policy, for
Establishing an Energy Resources Centre that will collect
25 years from the date of commissioning or
energy-related information. Manages policies & tenders.
for the lifespan of the SPG, whichever comes
earlier.
Solar Energy Society
of India (SESI)
Indian Section of the International Solar Energy Society.
Publishes the biannual SESI Journal. Organizes workshops
and the annual International Congress on Renewable
Energy. Provides information on a variety of topical issues to
the renewable energy community.
Empereal-KGDS
Empereal-KGDS is recognized as an In-House R&D Centre
by the Department of Scientific and Industrial Research
(Government of India). Empereal-KGDS is actively involved
in developing standalone solar thermal power plants,
solar-biomass hybrid power plants for non-stop operation,
solar desalination for providing potable water in arid rural
and coastal areas and solar process steam systems.
Built a solar thermal research center in
Coimbatore, Tamil Nadu, to test and develop
Linear Fresnel systems and MED desalination
systems. Setup Linear Fresnel test system
capable of generating saturated and superheated steam. Contracted by Indian Institute
of Technology Bombay to build a Linear
Fresnel CSP Plant at The Solar Energy Centre,
Gwalpahari in South of Delhi, to produce dry
saturated steam for power generation.
Developed the Ramanathapuram
Desalination Plant in Tamil Nadu, an
indigenous CSP method using Linear
Fresnel Reflector to produce steam for
seawater desalination by Multi-Effect
Distillation.
Implementing a direct superheating
Linear Fresnel solar thermal system with
secondary concentrator, for IITM.
7.3.8. Financing Organizations
Capital investment is a critical aspect for CSP projects
in India. However, the non-transparent regulatory
framework does not attract investors. Many stakeholders expressed concerns for the reverse bidding
mechanism which entailed the reduction of FITs
www.csptoday.com
awarded in Phase 1 because they can jeopardize the
financial feasibility of the projects. A study from the
World Bank concluded that such a low level of FITs
would mean the projects were not economically viable.
As a matter of fact, low FITs might discourage lenders
because they could find the returns unattractive.
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Furthermore, the PPAs under the JNNSM scheme are
subject to the receipt of revenues from the Discoms
and this basically passes on the risk to the investors of a
project. Policy-wise, it is not clear yet what will happen
after the completion of Phase 1, therefore there remains
uncertainty over the stability of future payments.
On the other hand, support for projects comes from
state-based FITs as well as from the opportunity to use
the Clean Development Mechanism as a market tool.
Furthermore, the Open Access System is another driver
that enables large power consumers to establish a private
power generation source for their needs. With this system,
any power producer can sell electricity to any user across
the country by bearing the cost of transmission and
distribution losses or other costs of delivery.
An important lesson learnt by the government during
the first phase of the JNNSM was to not over-commit
itself financially. The two support mechanisms
considered for the second phase are the Generation
Based Incentive (GBI) and Viability Gap Funding (VGF),
although according to a report issued by India Solar
Compass, the former was a less likely option. Moreover,
solar prices are falling rapidly, and the government
wants to avoid over-committing itself to give support
beyond the need of the industry.
Thus, the most likely alternative seems to be the VGF
scheme, which has already been employed by the
government for Public Private Partnership infrastructure
projects like roads, airports, railways, ports, and large
conventional power plants, but not yet for solar
power projects. Unlike the GBI, the VGF is a one-off or
short-term capital assistance that bears a part of the
high capital investment required in setting up a CSP
project. This could take various forms, including credit
enhancements, supplementary grant funding, loans,
and interest subsidy. For solar projects, the support
would be provided through the National Clean Energy
Fund, while the newly incorporated Solar Energy
Corporation of India (SECI) would be appointed to
oversee the process and carry out disbursements.
Within the VGF mechanism, the two options currently
investigated are the incentives per unit of electricity
sold (Rs/kWh), or a percentage of CAPEX (Rs/MW).
According to local stakeholders interviewed by CSP
Today, the target tariff could be in the order of 5.50 6Rs./unit considered. However, the VGF scheme may
increase the risk as developers could have different
off-takers and banks would need to perform credit due
diligence for each of them.
Table 15(7): Main Funding Institutions and Banks Operative in India
Previous Renewable Energy Projects (if
applicable)
Name
Roles and Responsibilities
Asian Development Bank
(ADB)
ADB is a regional development bank established to facili- ADB financed USD 103 million towards the
development of Reliance Power’s 100 MW
tate economic development of Asian countries. ADB has
provided 69 loans in the energy sector worth a total of $10 CSP CLFR Plant.
million, accounting for 34.5% of the bank’s total provided
loans. Headquartered in Philippines, with worldwide
representative offices.
Axis Bank
Axis Bank is the third largest private sector bank in India,
offering financial services to large and mid-corporates,
SMEs, agriculture and retail businesses.
Bank of Baroda
Bank of Baroda is an Indian state-owned bank providing
Bank of Baroda is financing the Godawari
CSP Plant in Rajasthan.
financial services in retail and investment banking and
asset management. It is designated by the government as
a profit-making public sector undertaking.
www.csptoday.com
Axis Bank is financing the 100 MW Diwakar
CSP Plant in Rajasthan.
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Bank of India
Bank of India is a state-owned commercial bank headquar- Bank of India has provided finance towards
tered in Mumbai. It is India’s 4th largest public sector bank, the 50 MW Corporate
after the State Bank of India, Punjab National Bank, and
Ispat Alloys CSP Plant.
Bank of Baroda.
Canara Bank
Canara Bank is an Indian public sector bank headquartered in Bangalore, Karnataka with overseas branches.
Established in 1906, it is one of the oldest banks in the
country. It provides investment, commercial, retail, private
and consumer banking, and asset management. Sponsors
three regional rural banks: Shreyas Gramin Bank, South
Malabar Gramin Bank, and Pragathi Gramin Bank. Canara
bank is a state-level lead bank in Kerala.
Canara Bank provided finance towards
SunBorne Energy Services India’s INR
1,400 million for the 15 MW PV plant in
Karmaria, Gujarat. It also partnered with
the UN Environment Programme on a solar
loan program, which was a four-year USD
7.6 million effort, launched in April 2003
with the aim of accelerating the financing
market for solar home systems in Southern
India.
Department of Science and Formulates science and technology related policies.
Technology, Government
Promotes high-end basic R&D through its research instiof India
tutions or laboratories for the development of indigenous
technologies. Undertakes or financially sponsors scientific
and technological surveys, research, design and development, where necessary.
Financed the Ramanathapuram Linear
Fresnel Reflector CSP Desalination Plant
developed by KG Design Services in Tamil
Nadu.
Dutch Development Bank - Provides short and long-term finance, as well as high-risk,
also known as Netherlands innovative financing structures such as mezzanine and
equity.
Development Finance
Company (FMO)
The Dutch Development Bank provided
USD 80 million in finance to Reliance
Power’s 100 MW CSP CLFR Plant.
Export-Import (Exim) Bank
of India
Exim Bank of India was launched by the Government
of India to finance and facilitate India’s foreign trade.
It provides investment, commercial, retail and private
banking, asset management, and mortgages. The Bank
supports all stages of the business cycle, from import of
technology and export product development to export
production and marketing, pre-shipment and post-shipment, and overseas investment.
Exim Bank of India provided finance
towards SunBorne Energy Services India’s
INR 1,400 million for the 15 MW PV plant in
Karmaria, Gujarat.
Industrial Credit and
Investment Corporation of
India (ICICI)
ICICI is a private sector development bank set up to assist
in the creation, expansion and modernization of the
private industrial sector in India. Provides long-term and
medium-term loans in rupees and foreign currencies.
Underwrites new issues of shares and debentures.
Guarantees loans raised by private concerns from other
sources.
ICICI is financing the 100 MW KVK Energy
Ventures CSP Plant in Rajasthan.
Industrial Development
Bank of India (IDBI)
IDBI is a full-service Mumbai-headquartered commercial
bank with majority government shareholding. Provides
financial solutions to businesses in retail, corporate,
agriculture and SMEs.
IDBI is financing the 50 MW Megha CSP
Plant in Andhra Pradesh.
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Indian Overseas Bank (IOB)
IOB is a major bank based in Chennai, with over 2,650
IOB is providing finance towards the 50
domestic branches and 14 overseas branches as of 31 May, MW Corporate Ispat Alloys CSP Plant.
2013.
Indian Renewable Energy
Development Agency Ltd.
(IREDA)
IREDA was stablished to promote, develop and extend
financial assistance to renewable energy and energy
efficiency /conservation projects
At least 60 % of IREDA IV-LoC (an interest-subsidized loan of EUR 200 million
from the German Government) amount
has been allocated for renewable energies,
including CSP.
State Bank of India (SBI)
SBI is a government-owned bank headquartered in
Mumbai, and India’s largest by assets, with USD 501
billion as of December 2012. It provides a range of
banking products through its local and overseas network
of branches, including products aimed at non-resident
Indians.
SBI financed solar PV projects in Tamil Nadu
in 2011.
State Bank of Patiala (SBP)
SBP is an associate bank of the State Bank of India,
founded in 1917. It is a public sector bank performing the
normal functions of a commercial bank as well as some
functions similar to that of a central bank for the princely
state of Patalia. SBP was the first bank in India to go on
CORE 100%.
Provided finance towards SunBorne Energy
Services India’s INR 1,400 million for the 15
MW PV plant in Karmaria, Gujarat.
State Bank of Travancore
(SBT)
SBT is a public bank and the premier bank of Kerala, where Provided finance towards SunBorne Energy
it has 676 branches. The bank is a subsidiary of State Bank Services India’s INR 1,400 million for the 15
Group and provides investment, commercial, retail, private MW PV plant in Karmaria, Gujarat.
and consumer banking, and asset management.
7.3.9. Developers and EPC Firms
Some of challenges presented by the local Indian
environment include project management and project
execution. There is also limited know-how due to the
lack of a positive climate towards foreign investment.
On top of this, the government has not invested
enough in infrastructure, although the situation is
slowly improving. In particular, in some remote areas,
the inadequate level of infrastructure can make the
planning and construction process more challenging
and time-consuming. According to some local industry
players, Phase 1 projects have been delayed due to the
unavailability of site infrastructure.
www.csptoday.com
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Table 16(7): Developers and EPC Firms Operative in India
Previous Renewable Energy
Projects (if applicable)
Name
Roles and Responsibilities
Abengoa Solar India
Subsidiary of Spain-based Abengoa. Designs, finances,
constructs, and operates solar power stations.
Signed an agreement with Bharat Heavy
Electricals in January 2011 to jointly
undertake CSP projects in India.
Acciona – India
Acciona is a Spanish renewable energy operator focusing
on CSP, PV, wind, hydraulic and biomass energy. Provides
engineering and construction, project development,
O&M, and energy sales. The company has proprietary
technology in the design, construction, operation and
maintenance of CSP plants.
Acciona Energy owns and built/is
building six CSP plants: four in Spain and
two in the United States.
ACME Group
ACME Group develops, constructs, and operates MW-scale Developer and owner of the 2.5 MW
CSP and PV power projects. It is the only Indian company ACME Solar Tower in Rajasthan, operational since April 2011.
with an exclusive master license for developing utility-scale solar thermal projects in India. ACME’s first CSP
plant, a 2.5 MW solar tower, has been commissioned in
Bikaner, Rajasthan and will be scaled up to 10 MW.
AREVA India Pvt. Ltd.
Designs, manufactures and installs solar steam generators
for global power generation and industrial steam needs.
Provides turnkey solutions using its Compact Linear
Fresnel Reflector technology.
Aurum Renewable Energy Subsidiary of Aurum Ventures - a Mumbai-based
investment company active in automotive components,
Pvt. Ltd.
EPC contractor for Dhursar CSP Plant in
Rajasthan.
Developer and owner of the 20 MW
Aurum Fresnel CSP Plant in Gujarat.
telecom, real estate and renewables.
Bharat Heavy Electricals
Ltd. (BHEL)
Engaged in the design, engineering, manufacturing,
Signed an agreement with Abengoa in
construction, testing, commissioning and servicing of core January 2011 to jointly undertake CSP
sectors such as power, transmission, industry, renewable
projects in India.
energy, oil and gas, and defense.
Cargo Solar Power - Cargo Develops, executes and manages CSP projects.
Power & Infrastructure Ltd.
Owner and developer of Gujarat Solar
One CSP Plant in Gujarat.
Corporate Ispat Alloys Abhijeet Group
Subsidiary of Abhijeet Group. Engages in construction of
power plants, and owns coal mines.
Owner and developer of the 50 MW
Abhijeet CSP Plant in Rajasthan.
Dalmia Solar Power
Subsidiary of Dalmia Bharat Group. Develops thermal and
solar power generating projects.
Developing a 10 MWe CSP Plant in
Rajasthan.
Entegra Ltd.
Developer of renewable energy projects primarily in India
Developing the 10 MW Rajasthan Solar
One CSP Plant, which is scalable up to
200 MW.
Godawari Green Energy
Ltd.
Subsidiary of HIRA Group India. Constructs and operates
renewable energy projects.
Owner and developer of the 50 MW
Godawari CSP Plant in Rajasthan.
www.csptoday.com
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Idom Engineering (New
Delhi Office)
Global engineering services firm based in Spain, operating Providing basic and detail engineering
in industry and energy, infrastructure, architecture, and
for the 50 MW Megha CSP Plant in
consulting.
Andhra Pradesh. Idom is designing an
8-hour thermal energy storage system
based on molten salts.
Indure Pvt. Ltd.
Manufacturing and contracting arm of Design Indure
Group. EPC Contractor for power plants and material
handling systems, thermal and PV solar power plants, in
India and abroad.
Empereal-KGDS
See Table 14(7) under Section 7.3.7 “Local
Developer of stand-alone solar thermal power plants,
Consultants and R&D Bodies”.
solar-biomass hybrid power plants for round-the-clock
operation, solar desalination for providing potable water in
arid, rural and coastal areas, solar process steam systems,
and combinations of the above.
KVK Energy Ventures Ltd.
Develops natural gas, LSHS, coal and coal rejects, biomass, Owner and developer of the 100 MW KVK
solar and wind power plants.
Energy Ventures CSP Plant in Rajasthan.
Lanco Solar
Subsidiary of Lanco Infratech. Solar power project
developer, providing turnkey EPC solutions.
Lauren CCL Engineers Pvt. Provides engineering, procurement, management and
construction services for thermal solar power facilities in
Ltd.
EPC contractor for the 20 MW Aurum
Renewable Energy Fresnel CSP Plant in
Gujarat.
Owner and developer of the 100 MW
Diwakar CSP Plant in Rajasthan and the
100 MW KVK Energy Ventures CSP Plant
in Rajasthan.
EPC contractor for the 25 MW Gujarat
Solar One CSP Plant in Gujarat.
India.
Lauren Jyoti Private Ltd.
EPC Contractor for the 50 MW Godawari
Provides engineering, procurement and construction
services for renewable and conventional power facilities in CSP Plant in Rajasthan.
India. Headquartered in Mumbai, it is a 50:50 joint venture
of Lauren Engineers & Constructors Inc., USA and Jyoti
Structures Ltd, India.
Megha Engineering and
Infrastructure Ltd. (MEIL)
MEIL is an engineering and infrastructure company
specializing in power, irrigation, drinking water, railway
and ports, media, hydrocarbon, sewage, buildings, and
industrial infrastructure.
Owner and developer of the 50 MW
Megha CSP Plant in Andhra Pradesh.
Rajasthan Sun Technique
Energy
Subsidiary of Reliance Power. Developer of large-scale
solar power projects.
Developer of the 100 MW Dhursar CSP
Plant in Rajasthan.
Reliance Power
Develops, constructs and operates power projects in India Owner of the 100 MW Dhursar CSP Plant
and internationally, with a portfolio of over 35,000 MW
in Rajasthan.
of power generation capacity in operation and under
development.
Shriram EPC Ltd. (SEPC)
EPC contractor and turnkey solutions provider for CSP
plants, wind farms, thermal and biomass power plants.
www.csptoday.com
Design, engineering, procurement,
supply, erection, testing and commissioning for Corporate Ispat Alloys’ 50 MW
CSP Plant in Rajasthan.
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SunBorne Energy Services Subsidiary of SunBorne Energy Holdings, LLC. Involved
in the development and finance of solar power projects,
India Pvt. Ltd.
EPC, O&M, and minority asset ownership. Backed by four
large investors: General Catalyst Partners, Khosla Ventures,
Wadhawan Holdings, and an unnamed solar module
manufacturer.
Technit Engineering &
Construction
Entered into a memorandum of
understanding with Suryachakra Power
Corporation and Citadel Research &
Solutions to work together on a 5 MW
CSP plant in Andhra Pradesh.
Provides engineering, procurement, construction, opera- EPC Contractor for the 10 MW
tion and management services for large-scale projects
Rajasthan Solar One CSP Plant.
worldwide operating in: oil & gas, energy, industrial plants,
oil refineries and petrochemical plants, mining, and
infrastructure & architecture civil Works.
Source: CSP Today Global Tracker, August 2013
7.4.1. Supply of Local Components
Table 17(7): Components Available Locally in India
Component
Name of Supplier(s)
Website
Turbines
Arani Power Systems
www.aranipower.com
Belliss India
www.bellissindia.com
Bharat Heavy Electricals Ltd.
(BHEL)
www.bhel.com/product_services/product.php?categoryid=62&link=Power
GE Energy India
www.ge-energy.com/solutions/regions/india.jsp
Hitachi Ltd.
www.hitachi.co.in/products/business/energy/steam_turbine
IB Turbo Pvt. Ltd.
www.ibturbo.com
Kessels Steam Turbines
www.kessels.in
Max Watt
www.maxwatt.net
Mitsubishi Heavy Industries
- India
www.mhiindia.com
Siemens Ltd.
www.energy.siemens.com/hq/en/renewable-energy/solar-power
TD Power Systems Ltd.
www.tdps.co.in/product_steam_solar_app.html
Triveni Engineering &
Industries
www.trivenigroup.com/turbines/salient-features.html
Turbo Energy Ltd. (TEL)
www.turboenergy.co.in
Turbotech
www.turbotechindia.com
VVK Turbo
www.vvkturbo.com
www.csptoday.com
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Steam Generators Anu Solar Power Pvt. Ltd.
www.anusolar.in/Solar-Power-Generators.html
Arani Power Systems
www.aranipower.com
Bharat Heavy Electricals Ltd.
(BHEL)
www.bhel.com/product_services/product.php?categoryid=62&link=Power
GB Engineering Enterprises
Pvt. Ltd
www.gbengineering.in
Hitachi Ltd.
www.hitachi.co.in/products/business/energy/index.html
Sondex Heat Exchangers India www.indiamart.com/sondex-heatexchangers/profile.html
Pvt.Ltd.
Pumps
TD Power Systems Ltd.
www.tdps.co.in/product_steam_solar_app.html
Thermax
www.thermaxindia.com/Large-Industrial-Boilers/Solar-Thermal/Solar-SteamGenerators.aspx
Adhithana Engineering
Corporation LLP
www.adhithana.com
Alfa Laval – India
www.alfalaval.com
Bharat Heavy Electricals Ltd.
(BHEL)
www.bhel.com/product_services/product.php?categoryid=62&link=Power
Hitachi Ltd.
www.hitachi.co.in/products/business/energy/index.html
Lorentz
www.lorentz.de
Sondex Heat Exchangers India www.indiamart.com/sondex-heatexchangers/profile.html
Pvt.Ltd.
Sedop
www.csptoday.com
www.sedopsolar.com/accessories.html
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Valves
Aalborg (available through
Advance Tech)
www.advancetech.in/ourbusiness/details/889/378/industrial-&-manufacturing/
our-partners/aalborg-instruments-&-controls-inc
Adhithana Engineering
Corporation LLP
www.adhithana.com
Alfa Laval – India
www.alfalaval.com
Bharat Heavy Electricals Ltd.
(BHEL)
www.bhel.com/product_services/product.php?categoryid=62&link=Power
Bharat Solar Energy
www.bharatsolarenergy.com/3-/content.html
BOMAFA Special Valve
Solutions Pvt. Ltd.
www.bomafa-india.com/en/
HP Valves & Fittings India Pvt.
Ltd.
www.hpvalvesindia.com
John Crane Sealing Systems
India Pvt Ltd
www.johncrane.co.uk
MAC Valves (supplied through www.macvalves.com
Compete Tools Pvt, Mumbai; www.competetool.co.in
Ardee Hi-Tech Pvt. Ltd, Andhra
www.ardeegroup.com
Pradesh; and A.C. Automation,
Delhi).
Sedop
www.sedopsolar.com/accessories.html
Steam Turbine Engineering
India Pvt. Ltd.
www.steipl.com/index.html
Thermax
www.thermaxindia.com/Solar.aspx
Valtorc International (supplied www.valtorc.com
through Ardee Hi-Tech Pvt.
www.ardeegroup.com
Ltd, Andhra Pradesh)
Tracking Systems
www.csptoday.com
Headway Solar
www.headwaysolar.com/solar-axis-tracker-solutions.html
Lorentz
www.lorentz.de
Meca Solar
http://www.mecasolar.com/_bin/seguidor_2_eje.php
Samrat Solar
www.samratsolar.com
SunPower India
www.sunpowercorp.co.in/products/solar-trackers
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Heat Exchangers
Alfa Laval – India
www.alfalaval.com
Arani Power Systems
www.aranipower.com
GB Engineering Enterprises
Pvt. Ltd
www.gbengineering.in
HRS Process Systems Limited
www.hrsasia.co.in
Parkaire Engineering Co. Ltd.
www.parkaire.net
Patels Airtemp
www.patelairtemp.com
Sondex Heat Exchangers India www.indiamart.com/sondex-heatexchangers/profile.html
Pvt.Ltd.
TEMA India Ltd.
www.temaindia.com
Universal Heat Exchangers Ltd www.uniheat.com
Receiver Tubes /
Solar Collectors
Anu Solar Power Pvt. Ltd.
www.anusolar.in/Solar-Power-Generators.html
Airier Natura
www.airier.com/product.html
Clique Solar
www.cliquesolar.com/index.aspx
Kenergy
www.kenergy.co.in
Empereal-KGDS
www.empereal.com
KVK Energy Ventures Ltd.
www.csptoday.com
Maharishi Solar
www.maharishisolar.com
Megawatt Solutions Pvt. Ltd.
www.megawattsolutions.in
Photon Energy Systems Ltd.
www.photonsolar.in/html/pvs-thermal.html
SCHOTT Glass India Pvt. Ltd.
www.schott.com/solar/english/index.html?so=uk&lang=english
SharperSun
www.sharpersun.com
Siemens Ltd.
www.energy.siemens.com/hq/en/renewable-energy/solar-power/
Taloyormade Solar Solutions
Pvt. Ltd.
www.tss-india.com/
Thermax
www.thermaxindia.com/Solar.aspx
Ultra Conserve Pvt. Ltd.
www.conserve.co.in/index.php
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Heat Transfer Fluid Alfa Laval – India
www.alfalaval.com
Dowtherm by Dow Chemical
Company (available in India
through Thermic Fluids Pvt.
Ltd.and Chimanlal Maganlal
& Co.)
www.thermicfluids.com
LANXESS India Private Ltd.
www.basic.lanxess.com/bac/en/products/diphyl
Solutia - Eastman
www.eastman.com
www.solutia.com
Therminol
Air-Cooled
Condenser
CSP Mirrors
www.therminol.com
AM Clean Air Engineering Pvt. www.hvacequipments.co.in
Ltd.
Parkaire Engineering Co. Ltd.
www.parkaire.net/water_%20air_cooled_condensers.htm
Patels Airtemp
www.patelairtemp.com
Flabeg Solar India Pvt. Ltd
http://www.flabeg.com/
Thermosol Glass
http://www.thermosolglass.com/
SCHOTT Glass India Pvt. Ltd
http://www.schott.com/india/english/index.html
7.4.2. Raw Material Availability
While there are materials and components easily
available like steel, glass and concrete, there are others
that are less easy to find such as molten salts. Table 18(7)
lists the main suppliers available in India for each of the
raw materials used in CSP projects.
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Table 18(7): Raw Material Availability and Suppliers
Material
Supplier
Steel
HIRA Steel Ltd
Indian Steel Works Ltd
Indian Steel Corporation Ltd
Jindal Steel Power Ltd
Welspun Steel Ltd
ThyssenKrupp Electrical Steel India Pvt. Ltd
Essar Steel
Monn Steel India Ltd
Tata Steel
Glass
Saint Gobain
Emmvee Toughened Glass Pvt
AIS Glass Solutions Ltd
Triveni Glass Ltd
JK International
Asahi India
Modiguard
Sezal Glass
HNG Float Glass Ltd
Gold Plus Glass Industry Ltd
Molten Salt
Triveni Chemicals
Concrete
RDC Concrete Pvt. Ltd
JBA Concrete Solutions
Concrete India Pvt. Ltd
UltraTech Concrete
New Concrete India Pvt. Ltd
Lafarge
ACC
Larsen & Toubro
Madras Cements
Grasim
7.5. Alternative CSP Markets
India has a high potential for the employment of CSP
technology particularly for the production of industrial
heat and process steam. Such applications would fit in
well with the expanding trends of the manufacturing
industry in these years. Another area for potential application in some parts of the country would be water
desalination. Finally, there is a huge potential for the
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hybridization of the existing fossil fuel power stations.
7.5.1. Process Steam Applications of
Concentrating Solar Thermal
Concentrated solar systems have been found to be
quite suitable for cooking food for hundreds and
thousands of people in community kitchens, especially
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at religious places and institutional and industrial
canteens. The world’s largest system functions at Shirdi,
for cooking food for 20,000 people a day. The systems
have also found applications for heat, laundry and
food processing in industries. These include systems
at Gajraj Drycleaners, Ahmed Nagar, Maharashtra; ITC,
Maurya, Delhi and Tapi Food Industries, Valsad, Gujarat.
The systems are mainly being installed at places where
steam generated through conventional boilers is
already being used for cooking application. Installed
in hybrid mode, these systems could save a significant
amount of fuel oil at such places.
These systems, along with vapor absorption machines,
have been demonstrated for air conditioning as well.
The systems have been installed at places where power
cuts are high and electricity is expensive: 100 TR air
conditioning plant at Muni Seva Ashram, Vadodara; 92
TR at TVS, Suzuki factory near Chennai; 212 TR at Civil
Hospital, Thane near Mumbai; 30 TR plant at Magnetic
Mareli, Gurgaon; and 100 TR for process cooling at
Mahindra Vehical Manufacturers Ltd, Chakan, Pune
etc. These are just a few examples. A total of about 80
steam-generating systems have been installed so far
in the country, with a cumulative dish area of 25,000
square meters.
7.5.2. UNDP-GEF Project
To boost the use of concentrating solar technologies,
the Ministry of New and Renewable Energy has also
been implementing a new UNDP-GEF supported
project on “Market Development & Promotion of
Solar Concentrator-based Process Heat Applications
in India”, since April 2012. The objective of the project
is to promote and commercialize concentrating solar
technologies for industrial process heat applications
in India and to facilitate the installation of 45,000 m2
of installed solar collector area by March 2017 through
30 demonstration and 60 replication projects. Direct
emission reduction from these projects during its 5
years period will be 39,200 tons of CO2.
7.5.3. Biomass solar thermal hybrid projects
The Ministry of New and Renewable Energy, under the
Government of India, is implementing a MNRE - UNDP/
GEF assisted project on “Removal of Barriers to Biomass
Power Generation in India.” The aim of the project is to
accelerate the adoption of environmentally sustainable
biomass power technologies by removing identified
barriers, thereby laying the foundation for large-scale
commercialization of biomass power through increased
access to financing.
As part of this project, the Ministry is contemplating
the support of the Detailed Project Report and Bid
Document for establishment of commercial-scale
projects based on hybrid biomass CSP technology for
generation of grid connected power. The capacity of
such power plants may be in the range of 2 to 10 MW
depending upon the technology deployed, location,
economic viability, and other factors. The aim of
providing such technical assistance is to help project
developers achieve faster development of commercially
viable projects, and to create new investment opportunities in the country.
7.5.4. Desalination
India has a great potential for desalination, with a 7,000
km long coastline and severe water scarcity problems.
India is home to the world’s first Linear Fresnel
desalination plant. The plant, which was developed by
Empereal-KGDS, went into commissioning in October
2012 and into commercial operation in February 2013.
The details of this plant are provided below:
Table 19(7): The World’s First Linear Fresnel Desalination Plant
Current Status: Operation
Country:
India
Gross Capacity:
1.06 MW
Developers:
Empereal-KGDS
Technology:
Linear Fresnel
EPC:
Empereal-KGDS
Source: CSP Today Global Tracker, August 2013
www.csptoday.com
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Table 20(7): LFR Desalination Plant Specifications
Status
Current Status
Operation
Status Notes
MED-TVC testing completed
EPC Date Granted
01/09/2010
Notice to Proceed (NTP)
01/09/2010
Construction date - actual starting date
01/03/2012
Expected Commercial Operation Date (COD)
01/09/2012
Actual Commercial Operation Date (COD)
12/02/2013
Technology
Gross Capacity
1.06
MWe or MWth
MWth
Technology
Linear Fresnel
Application
Demonstration
Back-up fuel
Biomass fuel (Juliflora)
Back-up fuel percentage
50%
Heat Transfer Fluid (HTF)
Water
Net Annual Production - Expected (GWh)
6 GWh thermal
Solar Field Inlet Temperature (oC)
40
Solar Field Outlet Temperature (oC)
218
Storage (Hours)
0.50
Storage temperature (Celsius)
211.00
Country
India
State/Region
Ramanathapuram, Tamil Nadu
Latitude
9.15
Longitude
78.45
Solar Field Aperture Area (sq m)
1,404
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Companies Involved
Developers
Empereal-KGDS
Coimbatore
Developers (Ownership Notes)
Department of Science and Technology (DST) owned
plant developed by M/S Empereal-KGDS, in collaboration with National Institute of Ocean Technology,
Chennai
EPC
Empereal-KGDS
Utilities
Utility (Off-taker) 1
Tamil Nadu Water And Drainage Board (TWAD)
PPA Notes
Water Purchase Agreement signed between TWAD
board and developer
Investment & Finance
Financing
Financing provided by Department of Science and
Technology, Govt. of India
Suppliers
O&M Contractors
Empereal-KGDS
O&M Contract Length
3 years
Mirror Supplier FR 1
Saint Gobain
Additional
Additional Info
This is a desalination plant. The capacity of the Linear
Fresnel solar field is 560 kW (thermal). Since it is a hybrid
system, the biomass boiler output is also at 500 kW
(thermal).
Storage Medium: Steam accumulator
Additional: The steam produced by solar energy is
used for desalinating the sea water by a Multi-Effect
Distillation system that produces 6,000 liters/hour of
ultra-pure desalinated water. The total dissolved solid
in the desalinated water is less than 2 parts per million
(ppm).
Source: CSP Today Global Tracker, August 2013
7.6. Market Forecast
Amongst the countries that constitute today’s
worldwide CSP market, India certainly seems an
ambitious player, with the Jawaharlal Nehru National
Solar Mission (JNNSM) targeting up to 20 GW of
grid-connected solar power by 2020. With 56 MW of
www.csptoday.com
capacity already installed, 254 MW in construction
today, and 210 MW in development, the Indian market
is one to watch in the next decade as the country works
towards its targeted capacity. Despite India’s large CSP
potential, progress in the first round of tenders has
been disappointing, and raises concerns regarding the
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deployment timing of future plants.
With an average DNI of 2,100 kWh/m2/year, and a
sustained ecosystem promoting the development
of utility-scale solar projects, the Indian CSP industry
is poised for growth in the short and medium
term. Indeed, according to the Ministry of New and
Renewable Energy’s (MNRE) JNNSM Phase 2, the target
capacity matrix for 2014-2015 is 1,080 MW for CSP
and 2,520 MW for PV. The forecast shown below only
considers 2014 and 2015 projects that are already under
construction or development as a capacity ceiling, due
to the inherently long lead time: 36 to 48 months from
development to operation.
As such, India’s CSP targets promise a good future for
the domestic CSP industry, but execution of this matrix
will be challenging within the two remaining years, as
per the three scenarios that predict lower capacities
by 2015. The potential of the country is, however,
well-demonstrated in later years of the forecast, as
execution tends to lag on prediction, and therefore
even under the optimistic scenario, the CSP capacity
reached by 2022-2023 will remain relatively low at 2.0
to 2.7 GW, comparatively far behind the target of 10 GW
by 2022. Delays in deployment, as is the current case
in India, explain why, once again, the conservative and
pessimistic scenarios are relatively closer to each other
than to the optimistic outlook. In the conservative and
pessimistic scenarios, the momentum of deployment
is significantly slower, assuming the current target was
not reached by 2024. But with the addition of new
programs supporting hybrid power plants and other
applications, the forecast could be outperformed by
reality under the right market conjuncture.
Figure 2(7): Installed CSP Capacity in India Until 2024 (MW)
4,000
3,666
Optimistic
3,500
Conservative
Pessimistic
3,000
2,500
2,000
1,390
1,500
1,000
697
500
0
2006
2008
www.csptoday.com
2010
2012
2014
2016
2018
2020
2022
2024
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Figure 3(7): CSP Cumulative Energy Production in India until 2024 (TWh)
100
91.1
Optimistic
90
Conservative
80
Pessimistic
70
60
48.8
50
40
32.7
30
20
10
0
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Conclusion
India’s CSP industry has undergone a year of development and intensive learning. While four out of five
CSP projects under Phase 1 of the National Solar missed
their commissioning deadlines, this provided valuable
lessons to be incorporated into Phase 2. Such lessons
include reconsidering the completion time given to
developers, and providing more reliable DNI data.
Phase 1 also saw a number of achievements, such as
huge cost reductions in capital expenditure, increased
localization of components and services, and the
implementation of a competitive bidding process for
solar power procurement that has significantly brought
down CSP tariffs in India.
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VV. AA., 2013. Information and data available through: <www.re-database.com>.
VV. AA., 2013. Information and data available through: <www.csp-world.com>.
VV. AA., 2013. Information and data available through: <www.iitk.ac.in>.
VV. AA., 2013. Information and data available through: <www.renewableenergyworld.com>.
VV. AA., 2013. Information and data available through: <www.indianpowermarket.com>.
VV. AA., 2013. Information and data available through: <www.cpil.co.in>.
(VV.AA: Various Authors)
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Acronyms
ACRONYM
DEFINITION
ADB
Asian Development Bank
APPC
Average Pooled Purchase Cost
BHEL
Bharat Heavy Electricals Ltd.
CEA
Central Electricity Authority
CERC
Central Electricity Regulatory Commission
CTU
Central Transmission Utility
C-WET
Centre for Wind Energy Technology
DNI
Direct Normal Irradiance
FIT
Feed-in-Tariffs
FMO
Dutch Development Bank
GBI
Generation Based Incentive
GSEC
Government Securities
ICICI
Industrial Credit and Investment Corporation of India
IDBI
Industrial Development Bank of India
IITB
Indian Institute of Technology Bombay
IMD
India Meteorological Department
INR
Indian Rupee
IOB
Indian Overseas Bank
IPP
Independent Power Producer
IREDA
Indian Renewable Energy Development Agency Ltd.
ISCC
Integrated Solar Combined Cycle
JNNSM
Jawaharlal Nehru National Solar Mission
MEIL
Megha Engineering and Infrastructure Ltd.
MENA
Middle East and North Africa
MNRE
Ministry of New and Renewable Energy
MOEF
Ministry of Environment and Forests
NCDMA
National Clean Development Mechanism Authority
NRDC
Natural Resources Defense Council
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India
NSM
National Solar Mission
NTPC
National Thermal Power Company
NVVN
Vidyut Vyapar Nigam Ltd
PSA
Power Sale Agreement
REC
Renewable Energy Certificate
RfS
Request for Selection
RPO
Renewable Purchase Obligation
RVPN
Rajasthan Vidyut Prasaran Nigut
SBI
State Bank of India
SBP
State Bank of Patiala
SBT
State Bank of Travancore
SEB
State Energy Board
SECI
Solar Energy Corporation of India
SESI
Solar Energy Society of India
SERC
State Electricity Regulatory Commission
STU
State Transmission Utility
TEDA
Tamil Nadu Energy Development Agency
TWAD
Tamil Nadu Water and Drainage Board
VGF
Viability Gap Funding
UNDP – GEF
United Nations Development Program – Global Environmental Facility
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8
Chile
By Marco Poliafico
Contents
List of Figures
230
List of Tables
230
Chapter Summary
232
Country Overview
232
8.1. Electricity Market
234
8.1.1. Electricity Consumption
236
8.1.2. Electricity Demand
236
8.1.3. Grid Transmission
236
8.1.4. Market Structure Diagram
238
8.2. CSP Market
239
8.2.1. National Energy Strategy: 2012-2030
239
8.2.2. CSP Suitability: Highest DNI in the World
240
8.2.3. Energy Demand Profile
240
8.2.4. First CSP Tender
241
8.2.5. Local Content Requirements
242
8.2.6. CSP Project Profiles
243
8.3. Local CSP Ecosystem
244
8.3.1. Key Government Agencies
245
8.3.2. Utilities and Independent Power Producers
246
8.3.3. Permitting Agencies and Feasibility Study Providers
246
8.3.4. Local Consultants and R&D Bodies
246
8.3.5. Financing Organizations
248
8.3.6. Developers and EPC Firms
249
8.4. Local Component Supply
250
8.5. Alternative CSP Markets
250
8.5.1. Case Study: Minera El Tesoro, Chile
8.6. Market Forecast
251
252
Conclusion
253
References
254
Acronyms
256
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List of Figures
Figure 1(8): Direct Normal Irradiation in Chile
233
Figure 2(8): Load Profile of the SIC System on 10 June 2013
241
Figure 3(8): Installed CSP Capacity in Chile Until 2024 (MW)
252
Figure 4(8): Cumulative CSP Energy Production in Chile to 2024 (TWh)
253
List of Tables
Table 1(8): Chile CSP Development: Drivers and Barriers
234
Table 2(8): Transmission Power Systems of Chile
237
Table 3(8): Criteria of the Tender Process for CSP Plants in Chile (February 2013)
241
Table 4(8): CSP Projects in Chile
243
Table 5(8): Ministries and Government Agencies in Chile
246
Table 6(8): Utilities and Independent Power Producers in Chile
246
Table 7(8): Permitting Agencies and Environmental Assessment Agencies Operative in Chile
246
Table 8(8): Consultants and R&D Bodies Operative in Chile
247
Table 9(8): Main Funding Institutions and Banks Operative in Chile
249
Table 10(8): Developers, EPCs and Engineering Companies Operative in Chile
249
Table 11(8): Techno-Economic Data of Mineral El Tesoro CSP Plant
251
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Chapter Summary
Recently moving into the CSP spotlight owing to its
excellent DNI that ranges from 2,445 kWh/m2 to 3,832
kWh/m2 per year, Chile benefits from a transparency
index which justifies the country’s growing interest in
CSP generation. With a potential of up to 2,636 GW of
CSP, the country’s wheels are in motion to exploit CSP
technologies, and a parabolic trough plant of 14 MW
is already in operation. In addition, there is currently
1,080 MW in planning. Chile is ranked as the sixth most
promising CSP market.
Chile is the second-least energy self-sufficient country
in the Latin American and Caribbean (LAC) region and
experiences the second highest electricity prices within
the same area.
The country is now considering more seriously the
shift toward indigenous energy sources, given the
abundance of wind and hydro resources, particularly in
the south, while in the north region, the Atacama Desert
has one of the world’s highest levels of solar irradiation.
The current largest user of energy in Chile and the
engine of the economy is the mining sector, as well as
the industrial (together accounting for 36%), followed
by the transport sector (35%). Chile’s economy is
expected to continue growing at a rate of 4% to 5%
over the next 15 years. A particular aspect of importance in the energy market is the transmission grid,
which is spread unevenly throughout the country, due
in particular to the challenges related to its physical
geography.
The current energy policy in Chile is based on the
“National Energy Strategy: 2012-2030: Energy for the
Future” announced in 2012. Through this strategy, the
government reaffirmed its commitment to achieve a
10% target of generation from renewable technologies
by 2024.
For the time being, there is no Feed-In-Tariff scheme
or specific policy for the deployment of solar energy.
However, CSP is considered the most appropriate
technology to exploit the extraordinary amount of
solar resources. Given the high electricity prices, Chile
could even become the first solar power market to be
independent of subsidies or tax benefits, and to reach
grid parity based on local costs.
Country Overview
Chile
Solar Resource (average annual sum of DNI): 3,300 kWh/m²/year (in the north)
Size:756,096 km²
Population (2012):17.4 million
GDP per capita (2012): US$ 15,363
Installed power capacity: 17.61 GW
Annual electricity consumption: 60.1 TWh
Expected annual electricity demand in 2020:
100 TWh
Electricity Mix (2012)
Coal/Petroleum 35%
Natural Gas 25%
Diesel, Oil 3%
Large Hydro 34%
Renewables 3% (small hydro 1%, wind 1%, biomass 1%)
Known Energy Resources
Coal, Oil, Natural Gas, Hydro, Wind, Biomass, Solar
Potential Markets for Industrial CSP Applications
Mining
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Figure 1(8): Direct Normal Irradiation in Chile
Source: SolarGIS © 2013 GeoModel Solar s.r.o.
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Table 1(8): Chile CSP Development: Drivers and Barriers
Drivers
Barriers
Extraordinary solar resources
No specific regulatory framework is available for CSP - the
current one still presents barriers for the penetration of
renewable energies
Need to diversify the energy mix to increase the energy
security
Limited grid capacity and lack of adequate transmission
lines, as the best locations are not always close enough to
existing grid facilities
High dependence on fuel imports and the volatility of their Water scarcity
international cost
Growing energy demand, due to population and economic Lack of track record and associated know-how related to
trends
CSP technology
High electricity prices
Finance sector does not have experience in funding CSP
projects whilst high capital investments are required
Growing mining sector and associated energy demand
Missing interconnection of the four power systems
Renewable Portfolio Standards
Difficulties in signing long-term contracts
Chile is one of the few producers of salts employed in
Thermal Energy Storage systems
Lack of adequate financial support - these projects are still
considered high risk
Opportunity for hybrid plants integrated with already
existing thermal power plants
Poor coordination among institutions involved in the
energy sector
Environmental concern due to the high GHG emissions
and social acceptance of green sources
Lack of good R&D projects and statistical data on resource
availability (this barrier is being addressed by the recent
initiatives described in this chapter)
Access to electricity for remote regions
Conflicts of interest between the public and private sectors
The need to increase competitiveness by increasing the
number of players in the electricity market
Difficulties for new entrants due to the high concentration
of the market amongst few stakeholders
Lack of strong political commitment despite the ambitious
announcements
8.1. Electricity Market
The ruling Chilean government under President
Sebastian Piñera has set the objective of annual GDP
growth rates of 6% until Chile reaches the status of
a developed country with a GDP per capita of US$
22,000 in the year 2018. Large hydropower schemes
have historically provided most of the generation
capacity; approximately 35% of the installed capacity of
Chile is represented by hydroelectric plants. However,
the situation has been quite unreliable due to heavy
droughts (particularly in 1998-1999 and 2007-2008)
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which seriously impacted the energy sector. Due
to these issues, Chile initially shifted its energy mix
towards natural gas imported from Argentina. However,
Argentina was forced to deal with its own domestic
shortages due the massive crisis in 2004 and as a consequence, it unilaterally stopped natural gas exports. At
that point, Chile’s energy mix shifted toward diesel, with
huge implications in terms of cost and environmental
impact. At the same time, Chile invested in the development of the coal industry.
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As a whole, Chile’s power generation levels have
declined over the last 20 years, but consumption
increased by 4 times during the same period. The
above-described mix of natural events such as
droughts, increasing energy demand and high price
of diesel, as well as other imported fuels, had a serious
impact on the energy market. In 2005 the country was
already importing more than 70% of its energy supply.
In 2011, a blackout kept more than 10 million people
(approximately 58% of the population) without
electricity for several hours, demonstrating the need
for further installed capacity. Nowadays, Chile is heavily
dependent on energy imports, mostly supplied by
other South American countries (mainly Ecuador, Brazil,
Colombia and Argentina). The country still imports
approximately 70% of its primary energy supply due to
the extremely limited availability of domestic energy
resources. As a consequence, it is the second least
energy self-sufficient country in the Latin American and
Caribbean (LAC) region, preceded only by Panama. The
import of oil, gas and coal represents more than 23%
of the total value of Chilean imports. The local power
market is also characterized by clear environmental
concerns as the power grid has the highest Greenhouse
Gas (GHG) emission of all the major Latin American
electricity grids.
Last but not least, Chile experiences the second-highest
electricity prices, after only Uruguay. The Chilean power
market is based on the concept of marginal cost – the
last unit of electricity dispatched determines the
price – while using diesel for the peak load (after hydro
and coal) causes the price to rocket. According to data
provided by the Organization for Economic Cooperation
and Development (OECD), electricity prices increased
by 400% between 1998 and 2011, reaching a level of
US$ 256.4/MWh, which is much higher than the average
price in the OECD countries (US$ 159.4/MWh). Chile is
also looking at importing shale-gas from the United
States, starting from 2016.
The issues around energy security and environmental
concerns increased distrust towards imports and
volatility towards international fuel prices. The favorable
view of renewable energy was reinforced by the
repeated energy crises faced by the country and for this
reason Chile is now considering more seriously the shift
toward indigenous energy sources. Non-Conventional
Renewable Energy (NCRE) is defined by Chilean law as
renewable energy generation excluding hydropower
projects over 40 MW and the source of around 3% of
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total energy production (mostly represented by microhydro facilities). However, there is abundant availability
of wind and hydro resources, particularly in the south,
while the north region (Atacama Desert) has one of the
world’s highest levels of solar irradiation. The potential
of geothermal energy is high throughout the whole
territory.
All in all, the potential for generating renewable energy
is very high, and there is a dire need to increase the
reliability and security of the national energy industry.
Furthermore, the growing economy and associated
increasing energy demand make the business case for
investing in renewable energy capacities. Although the
potential for CSP plants has not been clearly determined
on a large scale, according to the 2013 forecast carried
out by CSP Today, it is expected that approximately 2 GW
CSP could be produced by 2024 in the most optimistic
scenario, and 348 MW based on the pessimistic forecast.
The Chilean power market is completely privatized, and
the current framework, in which the three segments
(generation, transmission and distribution) operate in
a completely independent manner, was established
by the Electricity Act of 1982. This system attracts
investment from international players and leaves to the
state a minimal regulatory role. The national electricity
industry involves 70 companies. Out of these, 40%
operate in the generation segment, 7% in transmission
and 53% in the distribution sector.
Despite its liberalization, the electricity market is
practically controlled by a small number of companies.
For instance, the generation sector in the central market
(SIC - see below) is dominated by three players (Endesa,
Tractevel (Colbun) and AES Gener) owning together
approximately 90% of the total installed capacity. The
SING market has six dominant players owning over
99% of the installed capacity (E-CL, Electroandina,
Gasatacama, Celta, Norgener and AES Gener). A
similar situation exists in the distribution sector, where
few companies dominate the market, namely CGE
Distribución S.A., Chilectra S.A., Chilquinta Energía S.A.,
and Inversiones Eléctricas del Sur S.A.(Grupo SAESA).
The power sector in Chile is organized as a pool market
structure, which entails the coordination of all of the
physical and financial operations through a central
system. The short-term price of electricity (spot price)
is determined through ad-hoc modeled calculations
carried out by the Market Operators (MO) of the two
main grids, and the transactions from producers to
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distributors occur within the wholesale market. This is
privately operated and therefore in theory completely
open, although it is controlled by a few generating
companies (as explained above), which in practice
operate in a virtual monopoly regime because of the
high cost of building the transmission network.
The role of the MO and of the System Operator (SO) is
vested by independent entities – the Economic Load
Dispatching Centers (Centro de Despacho de Carga,
CDEC - owned by a group of generating companies)
who coordinate all the transactions in the market. The
CDECs are supervised by the SEC and amongst their
other responsibilities is to monitor the safety and the
smooth operations of the grid system.
Generators sell the electricity to distribution companies
within the wholesale market through public tenders
at a fixed price determined by the CDECs, and via long
term Power Purchase Agreements (PPAs) - usually 15
years long. However, they can also negotiate financial
contracts directly with free clients (see definition below)
or access the spot market to sell additional production
outside of the PPA system. They also pay transmission
fees, which can provide a 10% margin to transmission
companies. Operators of this sector are classified
according to the size of their systems. The large systems
have an installed capacity higher than 200 MW, whereas
small systems have a maximum capacity of 1.5 MW.
Some large mining companies or other heavy users of
electricity have their own captive generation, mainly
developed to avoid the high operational costs of diesel
generators (if renewable technologies are employed)
and the cost of building transmission lines.
8.1.1. Electricity Consumption
The current largest user of energy is the mining sector
and industry in general (approximately 36%), followed
by the transport sector (35%) and buildings (both
commercial and residential - approximately 29%). This
distribution of energy consumption per final user is
expected to be even more pronounced in 2030 when
the final energy demand is projected to be distributed
between the industrial sector (41%) and the transport
sector (40%), followed by the residential (16%) and
commercial (3%) sectors. Therefore, it is expected that
industry and transport will consume more than 80% of
the overall demand. In line with these data, the energy
demand for the industrial sector alone is projected
to grow at a rate of 4.2% per year, whereas the same
parameter for the transport sector is expected to be
4.9% per year. Lower growth rates are projected for the
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residential and commercial sectors (respectively 2.3%
and 3.6% per year).
The industrial sector, including the mining industry,
consumed 68% of the total electricity generation in
2011. In the northern region, this rises to between 80%
and 90%. This figure is expected to grow 5% annually
in the coming years. Under current trends, the growing
energy demand will be satisfied by coal-fired power
generation and, increasingly, by diesel. As for oil and
natural gas, Chile imports most of the coal utilized in
electricity generation. Nuclear is not yet part of the
energy mix; however, it is an option considered for the
medium and long term.
8.1.2. Electricity Demand
Chile’s economy is expected to keep growing at a rate
of between 4% and 5% for the next 15 years. At the
same time, the population is currently increasing at an
average rate of 0.8% per year. The increasing energy
demand is caused by both of the aforementioned
factors, but in particular by the expansion of the industrial sector. The energy demand is expected to increase
on average by 4% per year from now until 2025 and
electricity demand is projected to increase between
5.5% and 6.5% in the same period. These high rates are
also caused by the relatively high energy intensity, in
terms of electricity indicating a low energy efficiency
of the local economy (0.42, compared with the average
OECD value of 0.27). Translated in terms of electricity
demand, this means that increasing the GDP by 1 unit
requires approximately a 1.5 unit increase of electricity
supplied. All of the data compiled show that further
generation capacity is needed to satisfy the growing
demand. According to Chile’s National Energy Strategy,
an additional 8 GW of installed capacity is needed by
2020 to meet energy requirements.
A particular aspect of the mining industry’s electricity
demand is the almost flat profile due to continuous
business operations. This element suggests the suitability of CSP technology with Thermal Energy Storage
(TES) to guarantee electricity production around the
clock for mining operations.
8.1.3. Grid Transmission
The transmission grid is spread unevenly throughout
Chile, due in particular to the challenges related to its
physical geography. The transmission and distribution
grids serve almost all of the urban population and
approximately 95% of the rural population.
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The country has suffered, in the past, from a lack
of tailored policy and incentives to support the
development of a suitable transmission grid able
to accommodate renewable energy capacity. This
is expected to change as the government plans to
expand the role of renewables within the energy mix
over the next decade to increase energy security and
resilience from imports.
The transmission sector is divided into four
separate power systems providing electricity to
different geographic locations. The Large Northern
Interconnected System, or Sistema Interconectado del
Norte Grande (SING), is the larger one and supplies the
north of the country, from Arica in the north to the
town of Coloso in the south. Its generation capacity is
provided 100% by thermal power plants and is mainly
absorbed by the mining industry, representing 90%
of the total demand (all free customers). The Central
Interconnected System, or Sistema Interconectado
Central (SIC), covers the central part of the country,
from the end of the northern system down to the island
of Chiloe, in the southern region, for a total length of
approximately 2,100 km, including the capital city of
Santiago. The generation capacity here is represented
by hydropower for 45%-65%, and the remaining
portion by thermal power plants, with some residual
percentage provided by wind. The Aysen Electric
System corresponds to five medium systems located
in the southern region (Palena, Hornopirén, Carrera,
Cochamó and Aysen). Finally, the Magellan Electric
System covers four subsystems (Punta Arenas, Puerto
Natales, Porvenir and Puerto Williams). It is located in
the southernmost part of Chile and supplies the cities of
the same names. Additional information is provided in
the Table 2(8).
Table 2(8): Transmission Power Systems of Chile
SING
SIC
Aysen
Magellanes
Extended Name
Northern
Interconnected
System
Central Interconnected
System
Aysen Electric
System
Magellan Electric
System
Portion of the national
generation capacity
28%
71%
0.4%
0.6%
Population served
6%
92%
< 1%
< 1%
Free clients
90%
35%
0%
0%
Regulated clients
10%
65%
100%
100%
Regions served
Arica/Parinacota,
Tarapacá and
Antofagasta
Atacama, Coquimbo,
Valparaíso, Región
Metropolitana (Santiago),
Libertador General Bernardo
O’Higgins, Maule, Bio Bío,
Araucanía, Los Ríos and Los
Lagos
Aysen
Magellanes
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As a whole, these transmission systems serve over 97%
of the population, but are not currently connected.
However, there are plans for connecting the two major
systems (SIC and SING) in the future, as part of the new
Energy Strategy. The development of the four different
transmission systems has been conditioned by both
geographical and commercial factors. Transmission
companies need to allow access to new entrants who
wanted to invest in this segment.
All of the distribution companies operate under a
utility monopoly concession, released for an indefinite
period, and obtained from the government for a
specific geographic area. Their rates are regulated if
the final consumers are regulated customers, since the
retail sector is operated as a public service. Two groups
of consumers are identified in the Chilean market,
namely regulated customers and free customers.
Regulated customers are all domestic users and any
other consumer with a connected capacity of less than
2 MW, although it is possible to be included in the free
customer category when power demand is higher
than 500 kW. Free customers are usually large industries
(e.g. mines) or commercial activities with demand
capacity higher than 2 MW who are not subject to price
regulation and are therefore able to negotiate prices
directly with the power generation companies (there is
no need for the intermediation of trading or distribution
companies).
8.1.4. Market Structure Diagram
Private Sector
Generation
28 Companies
Regulatory
Transmission
Distribution
5 Companies
37 Companies
Customers
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Ministry, CNE, SEC
CONAMA
Free Customers
(unregulated)
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8.2. CSP Market
Today, the energy sector is managed by the Energy
Ministry through its regulatory body the National
Energy Commission, or Comisión Nacional de Energía
(CNE), although the Ministry of Economy plays an active
and important role as well. In 2010, the US Department
of Energy (DOE) and the National Renewable Energy
Center (NREL) supported the development of Chile’s
Renewable Energy Centre (CER), which was created to
work under the guidelines of the Ministry of Energy and
ensure the optimal development of NCRE within the
energy mix. In the same year, the renewable generation
target was increased to an ambitious 20% by 2020.
However, this was soon abandoned on economic and
fiscal grounds.
The energy policy in Chile is based on a few milestone
laws that support the development of private sector
energy investment. The right of access to transmission
and distribution networks for small generators was
regulated by law 19.940 in 2004. This also introduced
full exemption from transmission fees for plants under
9 MW, and partial exemption for plants between 9 and
20 MW. This subject was further amended, alongside
other aspects of long-term contracts for generators,
by law 20.018 in the same year. In 2008 (amended in
2010), parliament approved law 20.257 establishing
the Renewable Portfolio Standards (RPS), thereby
creating the obligation for generators with over 200
MW of installed capacity to implement at least 5%
of electricity produced by NCRE sources within their
energy mix. According to the regulatory framework, this
threshold is bound to increase 0.5% per year starting
from 2014 becoming 10% by 2024. Companies which
fail to comply with this will be fined a penalty of US$
30 per MWh exceeding the minimum threshold, which
increases to US$ 45per MWh for repeat offences. In
2010, the Ministry of Energy and the Ministry of the
Environment were established with the aim of coordinating the energy market and related policies.
8.2.1. National Energy Strategy: 2012-2030
The “National Energy Strategy: 2012-2030: Energy for
the Future”, including the new policy, was announced
in 2012. This new master plan document highlighted
six fundamental objectives including (only relevant
ones are quoted here): to increasingly incorporate
non-conventional renewable energy sources into the
Chilean electricity matrix; to strengthen the design
and solidity and boost the development of the
transmission system; to address the different challenges
presented by the market and electricity distribution;
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and, to promote sustained progress by developing
international inter-connections. Through the National
Energy Strategy, the government reaffirmed its
commitment to generate 10% from renewable
energy resources by 2024 and to introduce support
mechanisms for the development of new renewable
energy projects. These included a tender mechanism
to encourage the development of NCRE sources, and
specific incentives, such soft loans, tax incentives and
subsidies from the government to mitigate the risk
for projects and achieve grid parity. For example, the
introduction of a guaranteed 12 year-long PPA scheme
for renewable energy projects is under consideration.
In addition, a Geographic Information System (GIS)
with data on resource potential and project portfolio is
being considered, to evaluate the economic potential
for NCRE projects and enable decision-making by
NCRE investors. The GIS would integrate and display
geographic information regarding energy demand,
energy resources, available government land, environmental protection zones, amongst others.
In terms of increasing the implementation of NCREs
within the energy mix, the National Strategy aims to
increase the deployment of hydropower to between
45% and 48% of the overall energy mix. The plan also
indicates that nuclear energy is being considered
among the different options. However, there is a strong
opposition from environmental leaders regarding the
environmental risks that are considered avoidable
given the high potential for renewable energy sources.
Looking at the development of the transmission
system, an investigation is being carried out to assess
the potential interconnection of the two largest grids
of the country: the Central Interconnected System
(SIC) and the Large North Interconnected System
(SING). This would increase the security and reliability
of the overall network, and would better enable the
deployment of renewable energy sources. Alongside
this initiative, there is also discussion regarding the
opportunity to create “utility corridors” – namely, areas
that the state could expropriate, under appropriate
commercial agreements with the owners, to extend
transmission connections if these are considered
strategic for the development of the electricity grid. In
relation to the distribution segment, the strategy plans
to create Independent Operation Centers (IOCs) for
each electricity system that would replace the existing
Economic Load Dispatch Centers and work at regional
level as autonomous legal entities (although under the
supervision of the CNE). These new bodies will have
the responsibility of planning for transmission systems;
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Chile
contributing to the security and sufficiency of the
system in the long term. Additionally, the regulation
overseeing the connection of small generators should
be reviewed, with the aim of facilitating the integration
of NCRE projects into the power system. Another pillar
of the Energy Strategy is the development of international connections. These are considered important due
to the unsatisfactory integration experiences that the
country has had in the past, such as when importing
gas from Argentina. A regional interconnected system
would improve the reliability of the grid and therefore
the security of supply, enabling a higher diversification
of the energy mix whilst potentially reducing costs.
Chile aims to consolidate physical links with Argentina
and explore any opportunities to connect with
neighboring countries, namely Peru and Bolivia.
Figure 2(8) is an example of the daily load profile for
the SIC system, showing the demand for energy in
the country. The example refers to a random day (10th
June 2013). Despite the fact that the SIC system serves
many urban centers and therefore does not feature a
constant energy demand, the absence of strong peaks
is noticeable. The difference between the minimum
demand and the maximum demand during the day is
approximately 28%. The graph is sourced from
www.cdec-sic.cl.
8.2.2. CSP Suitability: Highest DNI in the World
Chile’s solar irradiation levels are amongst the highest
in the world. This has been investigated and confirmed
by a number of scientific studies carried out by national
and international bodies, including the UN Economic
Commission for Latin America and the Caribbean
(ECLAC) and the Global Energy Research Institute. In
the northern region particularly, the climate of the
600-mile-long Atacama Desert has ideal conditions.
With its 0.6 mm rainfall per year, it is one of the driest
places on the planet and can receive approximately
2,445 kWh/m2/year to 3,832 kWh/m2/year. These values
are reached thanks to a combination of altitude, clear
skies and the low influence of atmospheric aerosols. On
the other hand, increasing demand for energy and the
good match between CSP generation (when implementing TES) and the typical flat profile of industrial
consumers, alongside the social and environmental
benefits, make CSP technology an ideal fit for this
country. Furthermore, given high electricity prices,
Chile could even become the first solar power market
independent of subsidies or tax benefits for solar
energy, reaching grid parity based on local costs. For all
these reasons, CSP has been included as the top priority
within the CTF investment plan.
8.2.3. Energy Demand Profile
For the time being, Chile does not have a Feed In Tariff
(FIT) or any other specific policy for the deployment
of solar energy. However, CSP is considered the most
appropriate technology to exploit the extraordinary
availability of resources whilst satisfying the country’s
energy demand. The fact that CSP is dispachable and
can be used even after daylight hours makes it particularly suitable for Chile, where demand remains high in
the morning and evening.
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Figure 2(8): Load Profile of the SIC System on 10 June 2013
Source: CDEC-SIC
8.2.4. First CSP Tender
The first tender for CSP plants was published in February
2013. The Ministry of Energy, through the Corporación
de Fomento de la Producción de Chile (CORFO), or the
Chilean Economic Development Agency, provided
a subsidy of up to US$ 20 million, besides facilitating
land access. Furthermore, the government negotiated
a consortium of financing sources for a total amount
of more than US$ 350 million in soft loans, with a
below-market interest rate. Part of these funds was
offered by the European Union (subsidy of up to US$
18.6 million), the Inter-American Development Bank
(IDB - loans for at least US$ 66 million) and the German
Development Bank (KfW - loans for US$ 135.2 million).
The deadline submission for project proposals was
delayed two months from August 2013 to October
2013. Some of the requirements for developers are
summarized in Table 4(8).
Table 3(8): Criteria of the Tender Process for CSP Plants in Chile (February 2013)
Parameter
Criteria
Size
Minimum 10 MW
Grid System
Either of the two major networks (SIC or SING)
Technology
Any (parabolic trough, central tower, dish stirling, Fresnel)
Storage
Minimum 3 hours at 85% load
Back-up fuel
Not allowed, other than to maintain thermal fluids and/or molten salts at the right temperature
to avoid freezing. The amount of back-up fuel cannot be higher than 6% of the annual electricity
generated by the plant
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Land
The developer can either propose a location or use the land which the government has made
available for this project (Maria Elena)
Water
The developer has to declare the amount that will be required for O&M of the plant
Track record
The developer must present detailed information of a track record in CSP (either direct or indirect
experience through a subcontracted company). Such experience needs to refer to a plant of a
minimum of 10 MW
PPA
Developers must demonstrate that they have arranged either a PPA or a MoU for the purchase of
electricity. MoU needs to be resolved into a PPA within 12 months from the outcome of the tender
process. The developer could also sell in the spot market although financing could be complicated
in this case
Other data
The submission must include a year’s worth of meteorological data, including solar radiation data
and other parameters at the location of the plant
In conclusion, the main objectives of the Chilean energy
policy are the promotion of energy-competitive prices,
the achievement of energy supply security and the
development of sustainable energy generation technologies. Despite the recent introduction of new regulatory
reforms and incentives to facilitate the development
of the renewable energy sector, there are still some
barriers hindering the energy market from achieving
the stated objectives. Recent projections indicate that
unless a stronger initiative is taken, following the current
trend, only 8.5% of electricity would be generated from
renewable technologies by 2030. This prediction casts
some shadows over the national target of 20/20 (20%
by 2020), and calls for further substantial action to
reinforce the ambitious announcements.
8.2.5. Local Content Requirements
Chile does not have any local content requirements at
present. According to an industry insider working within
Chile, the country has an extremely liberal economy.
However, there are no local content requirements
aimed at building up the local CSP supply chain and
most industrial products are currently imported from
abroad.
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8.2.6. CSP Project Profiles
Table 4(8): CSP Projects in Chile
Storage
Capacity
(hours)
Title
MWe
Technology
Status
State/Region
Developer/s
Maria Elena 1
100
Tower
Planning
Antofagasta
Aprovechamientos Energeticos S.A./
Ibereolica Solar
13.5
Maria Elena 2
100
Tower
Planning
Antofagasta
Aprovechamientos Energeticos S.A./
Ibereolica Solar
13.5
Maria Elena 3
100
Tower
Planning
Antofagasta
Aprovechamientos Energeticos S.A./
Ibereolica Solar
13.5
Maria Elena 4
100
Tower
Planning
Antofagasta
Aprovechamientos Energeticos S.A./
Ibereolica Solar
13.5
Minera el
Tesoro
14
Parabolic
Trough
Operation
Atacama Desert
Abengoa
Pedro de
Valdivia 1
(PhaseI)
90
Parabolic
Trough
Planning
Antofagasta
Ibereolica Solar
10.5
Pedro de
Valdivia 2
(Phase I)
90
Parabolic
Trough
Planning
Antofagasta
Ibereolica Solar
10.5
Pedro de
Valdivia 3
(Phase II)
90
Parabolic
Trough
Planning
Antofagasta
Ibereolica Solar
10.5
Pedro de
Valdivia 4
(Phase II)
90
Parabolic
Trough
Planning
Antofagasta
Ibereolica Solar
10.5
Enerstar María 160
Elena ISCC
Parabolic
Trough
Planning
María Elena
Enerstar
6
Enerstar Sierra 160
Gorda ISCC
Parabolic
Trough
Planning
TBC
Enerstar
6
Mejillones
Fresnel
Announced
Antofagasta
GDF Suez/ Solar Power Group
5
Source: CSP Today Global Tracker, August 2013
The 14 MW Minera el Tesoro was the first CSP project
in the entire South American continent and is located
in the Atacama desert. The parabolic trough plant
employs a Thermal Energy Storage system integrated
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into a copper mine and supplies heat to the Minera
El Tesoro production processes. The thermal energy
generated by the solar field (1,280 collector modules)
provides approximately 55% of the global CSP
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consumption of the industrial activity enabling the
reduction of annual emissions by about 10,000 t of CO2.
The total investment required by this first project was in
the order of US$ 12-14 million.
The 360 MW Pedro de Valdiva project has obtained the
mandatory environmental permits and should require
a total investment of approximately US$ 2.6 billion.
The same company – Ibereolica – is developing the
400 MW Maria Elena project, which will employ central
tower technology and molten salts for both the thermal
storage and Heat Transfer Fluid (HTF). The biggest
challenge for these projects is to secure financing. It
is only once PPAs have been secured and financing
achieved that there is likely to be a definite timeframe
for these projects.
Another Spanish company, Enerstar, announced plans
for investing approximately US$ 700 million in Chile’s
renewable energy sector. Currently, it is carrying out an
investigation for a business case related to a 240 MW
Integrated Solar Combined Cycle (ISCC). Another hybrid
project under planning is the 5 MW Mejillone, which
should supply superheated steam to the coal plant
owned by the same developer in the same location.
The number of projects in the pipeline is expected to
grow as soon as various companies show interest in
the local market. Amongst them there are important
international developers like SolarReserve, Abengoa
and GDF Suez. Besides the CSP projects under
construction or under development, there has been an
announcement regarding the creation of the Atacama
Solar Platform. This initiative was established by a
consortium including the Fundación Chile, the state
mining company Codelco and several government
agencies. The overall plan is to develop solar zones
including both manufacturing activities and solar
energy facilities.
8.3. Local CSP Ecosystem
The Chilean CSP market is still very much at a nascent
stage and therefore its local CSP ecosystem, particularly
in the area of the supply chain, is not as expansive as
that of the other markets analyzed in this report.
The scenario for CSP technology in Latin America,
and in particular in Chile, is extremely favorable. The
excellent solar radiation levels, increasing demand for
energy, high energy prices and necessity to diversify the
energy mix are all important factors which, alongside
the environmental concerns for the carbon footprint of
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the current energy portfolio, make CSP very competitive
and attractive.
The huge potential for CSP technology in Chile has
also been highlighted by the Renewable Energy
Country Attractiveness Index (RECAI) published by
Ernst & Young (2013). The report says that CSP will drive
growth in Chile in the long term, because of its great
suitability to the demand profile and the current issues
in the country’s power sector. It is therefore crucial for
developers approaching the local market to focus on
the motivating factors, such as the high energy costs
and increasing energy demand, and the possibility of
supporting the growth of the mining sector and other
industries.
The cost of the energy produced will likely become a
crucial factor that will determine the success of CSP
technology in the local market. Current on-the-spot
market prices range between EUR 70 and EUR 80 per
MWh. Also, considering the high amount of imported
energy, Chile is very vulnerable to changes in its supply
chain and fluctuating energy costs. The current market
situation offers a great potential for international
developers because renewable energy projects will likely
be able to compete with conventional fuel projects
without incentives. This is mainly due to the particular
situation in which Chile imports fuels and the consequent pricing policy currently applied to the market. In
support of this, a study carried out by Bloomberg New
Energy Finance on the comparative costs of various
electricity generation technologies in the Chilean power
sector shows that electricity from renewable sources is
already competitive on the energy market. The northern
region has been identified as the best location for CSP
applications for a variety of reasons, including the strong
solar resources, the extension of land and the proximity
to energy demand hubs (primarily related to mines)
that are currently supplied by costly diesel generators or
coal-fired plants. Furthermore, the difficulty in developing the transmission network in remote areas where
high energy demand loads are located makes the overall
scenario somewhat favorable to a sustainable solution
that can provide local generation without the need for
transmission, using solar resources and transforming
them into dispatchable electricity or heat.
Another important element to take into account is that
the energy demand profile of each region is different.
For instance, the central part of the country is the most
populated and the bulk of its demand is associated with
the residential and commercial loads. On the contrary,
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the northern region hosts the predominant part of the
industries, such as mines, that operate continuously,
with a reasonably flat load profile. Whereas the central
region is characterized by the presence of hydropower
facilities, although their production has been very
volatile in the last years, the northern region is mostly
occupied by the desert and is affected by water scarcity.
Technology-wise, for the time being it seems that the
parabolic trough technology has the greatest potential;
not only because it has the highest market share and
therefore track record, but also because it is capable
of accommodating thermal energy storage. Other
technologies, like the Fresnel, will also have their place
when they are able to integrate TES, which is considered
essential to Chile.
A potential difficulty in the local market is the barrier
to new entry for private developers in the generation
segment, as approximately 90% of the current
capacity is controlled by three large companies or
their subsidiaries. This particular situation is made
more complicated by the potential conflict of interest
between the public and the private sector due to
the links and the repeated movements of high level
managers between the two. All of these elements give
more political influence and power to the large private
groups, and are an obstacle to a transparent decisionmaking process in the public sector.
The overall decision-making process within the energy
sector involves different entities, amongst which there
are the environmental commission and other ministries, such as those for transport, housing, economy,
agriculture and mining. Looking at the political
framework, although it is important to acknowledge
the country’s commitment to overcoming various
obstacles, it is fair to highlight the general tendency in
making announcements that are not always followed
up with substantial actions. From this point of view,
the cumbersome bureaucracy and lack of political will
to pursue objectives in a tangible way is hindering
progress and this ends up creating mistrust, or at least
caution, by casting a shadow over policy ambitions and
targets set by the government.
capacity to produce the expected development. On
the political front, the shift of five different ministers
of energy between 2010, when the Ministry of Energy
was established, and 2012, indicates a level of instability
that might not encourage the pursuit of the necessary
initiatives. All in all, CSP technology represents an
opportunity for Chile to position itself at the forefront of
this technology whilst resolving its historical problems
of energy dependence; CSP therefore has an enormous
potential which is still largely untapped.
8.3.1. Key Government Agencies
Amongst the main regulatory bodies of Chile’s electricity
market are the Ministry of Energy, the National Energy
Commission (CNE), The Superintendency of Electricity
and Fuels (SEC) and the National Environmental
Commission (CONAMA). The Ministry of Energy passed
many of the responsibilities to the CNE, but is in charge
of the development of the long-term strategies and
policies. Furthermore, the Ministry of Energy is part
of the Executive Committee of the CONAMA which
seeks to promote better coordination with the entity in
charge of the environmental policy and regulations. The
CNE covers most of the regulatory functions, including
tariff regulation, policy making, grid management and
overall system development strategy planning. This
body is characterized by the involvement of ministers
and the private sector is able to exert a good amount
of political influence. This situation has often cast some
shadows on the sector’s real independence. The SEC has
monitoring responsibilities for the fulfillment of the legal
and technical requirements and operates through the
Ministry of Energy.
From a regulatory point of view, although the liberalization of the energy market has always been celebrated
as a role model in the power economic sector, it seems
that the introduced reforms are not enough to promote
the adequate deployment of renewable sources.
Although these are a top priority on the agenda of
the government, the overall framework still lacks the
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Table 5(8): Ministries and Government Agencies in Chile
Name
Roles and responsibilities
La Comisión Nacional de Energía / National
Energy Commission (CNE)
Performs regulatory functions, including tariff regulation, policy
making, grid management and overall system development
strategy planning.
Ministerio del Medio Ambiente / National
Environmental Commission (CONMA)
Government bureau responsible for environmental policy, as well
as the protection and conservation of natural resources.
Superintendencia de Electricidad y
Combustibles / The Superintendency of
Electricity and Fuels (SEC)
Monitors legal and technical requirements in electricity production.
Ministerio de Energía / Ministry of Energy
Government bureau responsible for the policies in the energy
sector.
Centro de Energías Renovables / Renewable
Energy Center (CER) at CORFO
Government agency responsible for ensuring the optimal participation of Renewable and Non-Conventional Energy (ERNC) in Chile’s
energy matrix.
Agencia Chilena de Eficiencia Energética /
Chilean Energy Efficiency Agency (AChEE)
Foundation whose mission is to promote, strengthen and consolidate the efficient use of energy.
8.3.2. Utilities and Independent Power Producers:
An Overview
Table 6(8): Utilities and Independent Power Producers in Chile
Name
Roles and Responsibilities
Centro de Despacho Económico de Carga (SIC y SING) /
Economic Load Dispatching Centres
Coordinate the operation of the interconnected
electrical installations operating in the SIC and SING.
Table 7(8): Permitting Agencies and Environmental Assessment Agencies Operative in Chile
Name
Roles and Responsibilities
Servicio de Evaluación
Ambiental
Manages the “System of Environmental Impact Assessment” (SEIA), used for the environmental assessment of projects adjusted to the provisions of the current rules.
Source: CSP Today
8.3.3. Permitting Agencies and Feasibility Study
Providers: An Overview
Various entities are involved in the permitting phase
of a project, including the environmental commission
and relevant local municipalities. From a technical point
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view, CSP with thermal storage would be the most
suitable solution for the northern region.
8.3.4. Local Consultants and R&D Bodies
Chile is also investing in research and development
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(R&D) activities related to a variety of aspects, including
the use of solar energy in the mining sector, the
integration of solar energy into the power grid, the
development of solar energy generation in urban and
rural communities, solar energy storage, solar water
treatment and the economic, social and regulatory
aspects of solar energy development. There is an
ongoing effort to team up with international research
centers and develop valuable know-how through
multi-disciplinary research within the solar energy
sector. For example, a new research center called
SERC-Chile is being created through a collaboration by
various national universities, including the University
of Chile, the University of Tarapacá, the University of
Antofagasta, the Technical University Federico Santa
María, Adolfo Ibáñez University and the University of
Concepción y Fundación Chile. Various international
organizations have set up collaborative opportunities
with local partners, including the government. In June
2011, the Inter-American Development Bank (IDB)
started the ATACAMATEC technical cooperation activity,
which focuses on several studies connected with solar
and marine power in the country.
Even earlier, since 2006, the Ministry of Energy began
teaming up with GIZ on different fields related to the
solar energy industry, including the development of
an online wind and solar explorer coordinated by the
Geophysics Department of the University of Chile.
In addition, the Ministry of Energy and CORFO are
preparing an international tender to launch a solar
power research center in Chile. Last but not least,
the “Promotion and Development of Local Solar
Technologies in Chile” project, funded by the Global
Environment Facility (GEF) and launched in 2012,
focuses on technology-transfer activities, including CSP,
to promote the development of a national solar energy
market. One aspect to consider is the difficulty to rely
on local meteorological reports. On one hand is the
challenge of land extension and logistical difficulties in
maintaining a sound network of data collection stations.
On the other hand, because of Chile’s complicated
geography, the environment and climate largely
differ throughout the various parts of the country.
However, an important effort has been forthcoming
in this direction, as a government-launched project
has managed to produce more detailed and reliable
information through the use of satellite estimations
mathematically combined with measurements of land
values. Finally, the assessment of more than half of the
country’s territory (from Arica to Port Montt) has already
been completed.
Table 7(8): Consultants and R&D bodies operative in Chile
Name
Roles and Responsibilities
DICTUC S. A.
Engineering consultant in solar energy.
Fundación Chile
Engineering consultant in solar energy.
TerraSolar
Engineering consultant in solar energy.
Atacama Solar Platform.
The Atacama Solar Platform Initiative was established by a consortium comprised
of Fundación Chile, State mining company Codelco and several government
agencies. The plan is to develop solar zones over the next few years that will
include both the manufacture of solar panels and construction of solar power
plants.
Asociación Chilena de Energías
Renovables Alternativas
(ACERA)
Association of companies related to the development of renewable energy
projects.
Asociación Chilena de Energía
Solar (ACESOL)
Trade association of companies engaged in the development of solar energy
projects.
Source: CSP Today
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8.3.5. Financing Organizations
The most common barrier to the development of CSP
projects in Chile is the high cost of initial investment.
The main difficulty in this regard is the fact that this
technology does not have enough track record and
therefore is seen as an unknown foray. Other issues
linked to the financial dimensions of CSP projects are
the difficulty in negotiating long-term PPA contracts,
which tend to have low and therefore unattractive
prices, and the lack of tailored incentive schemes,
such as feed-in-tariffs). To give a better overview
of the financial scenario, the doubts regarding the
long-term profitability and the unpredictability of
renewable electricity prices on the spot market need
to be considered as well. That said, given that demand
is currently growing at a faster pace than installed
capacity, private developers expect no sudden drops in
electricity prices, which is seen as a competitive benefit
for renewable energy generation.
Looking at the current economic scenario, mining
companies are the best target for long-term energy
supply contracts. Furthermore, the existence of established industrial facilities, with their ancillary services
and road infrastructure already in place, would provide
access to sites of interest and secure potential savings
at construction stage. On top of these advantages, CSP
projects in Chile can qualify to be included in the Clean
Development Mechanism (CDM) and generate extra
profits through carbon credit trading.
interest. A positive exception is represented by the
Chilean Government’s Corporacion de Fomento de la
Produccion (CORFO), which acts as a key incubator for
the renewable energy sector and has already invested
over US$ 12 million to support various projects.
Moreover, a good capital market and a business-friendly
culture has prompted the interest of several international funding bodies that are now active in Chile,
including the European Investment Bank, the InterAmerican Development Bank and the World Bank.
According to Bloomberg New Energy Finance (BNEF)
a total amount of US$ 4.5 billion has been invested
in Chile’s renewable energy sector in the last 5 years,
until 2013. The Clean Technology Fund announced
a soft credit with the value of US$ 66.12 million in
September 2012. This amount will be added to a further
government grant of US$ 20 million government grant
to build a CSP project with Thermal Energy Storage,
which is currently being tendered, the outcome
of which will be revealed later in 2013. The Banco
Interamericano de Desarrollo (BID) has an important
role within the ongoing bidding process. It backed
the government to help obtain funds from the Clean
Technology Fund (CTF) and supported the design of
the procurement documents. The BID will also offer
financial support to the final winners. In fact, the receipt
of a loan from the BID’s private sector department
has been included as one of the requirements for the
developers of the winning project.
There are some elements to take into account that
could help the financial performance of a CSP project.
For instance, some of the buyers are willing to pay more
for clean energy due to corporate social responsibility
considerations. Furthermore, the social opposition to
large-scale conventional power plants is increasing the
relative attractiveness of other technologies, including
solar. However, in the short term CSP technology still
faces considerable cost and risk barriers, and therefore
might require public support, for instance in the form
of subsidies. Not having a track record in the country,
there are no verified technology-performance data for
local conditions, which increases the perceived financial
risk. Furthermore, if the lack of financial support makes
the projects unprofitable, this in turn would not attract
private investors.
Generally speaking, local banks have not been very
engaged in renewable energy projects so far, and it is
common opinion that successful agreement on a PPA
scheme would be a strategic key to attracting their
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Table 9(8): Main Funding Institutions and Banks Operative in Chile
Name
Roles and Responsibilities
Corporación de Fomento de la
Producción (CORFO)
Agency in charge to implement the government policies in entrepreneurship
and innovation fields. Provides funding mechanisms for energy projects,
among others.
Comisión Nacional de
Investigación Científica y
Tecnológica (CONICYT)
Advisory body in matters of scientific development. Provides funding
mechanisms for energy projects, among others.
8.3.6. Developers and EPC Firms
The Chilean market, as with all of the markets discussed
in this report, needs to be understood before investing
in large generation energy projects. An accurate
knowledge of the local area and stakeholders, including
the local community, will be essential for the successful
development of a project. The employment of local
services and products wherever possible would also
enhance this process.
Table 10(8): Developers, EPCs and Engineering Companies Operative in Chile
Name
Roles and Responsibilities
Previous Renewable Energy Projects
Abengoa Solar Inc.
International company dedicated to
developing energy projects.
Solar plant Minera el Tesoro, providing process
heat.
Abengoa Chile
Chilean branch of an international
company dedicated to developing energy
projects.
Solar plant Minera el Tesoro, providing process
heat.
GDF Suez
A French multinational electric utility
company operating in the fields of
electricity generation and distribution,
natural gas, and renewable energy.
Back in 2010, GDF SUEZ and Solar Power Group
agreed to jointly develop a 5 MW CSP plant
with linear Fresnel
International company dedicated to
developing energy projects.
Primary focus on wind, but currently has two
operational CSP plants in Spain of 50 MW each.
Ibereolica
www.csptoday.com
Technology, which will supply superheated
steam to the Mejillones 150 MW coal-fired plant
north of Chile.
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8.4 Local Component and Raw Material
Supply
Chile is already equipped with good capabilities in
various parts of the CSP supply chain. However, despite
the existence of a local capacity to produce some CSP
components in the central part of the country, it is very
expensive to transport them to the northern region
where CSP plants would be located. This makes the
situation somewhat complicated, and for this reason
some foreign suppliers are considering the opportunity
to locate their production units directly in the northern
part of Chile. Furthermore, the Energy Strategy itself
highlights how the country encourages and facilitates
the entry of new foreign players into the local value
chain. Indeed, many analysts believe that if a strong
CSP local market were to develop, there would be
opportunities for foreigner suppliers and industrial
players along the entire value chain. An important
factor worth mentioning is the position of Chile as
the largest exporter of thermal storage salts (sodium
and potassium nitrate), already supporting many CSP
projects worldwide.
8.5. Alternative CSP Markets
The mining sector is the engine of the Chilean
economy. Today, the country is the most prominent
producer of copper in the world, accounting for 35% of
global production, as well as being one of the largest
producers of silver and gold. This industrial sector
is a huge consumer of energy (both in the form of
electricity and heat, with a proportion of 75% and 25%
respectively). The production of metals in Chile currently
uses approximately 33% of all electricity generation
(11% in terms of energy, including heat). The largest part
of this demand comes from the northern region and
currently relies on diesel as an energy carrier, despite
the fact that the best solar resources are available in
the same area. In addition, the sector is continuously
growing and as a consequence, its demand for energy
is expected to rise further. At the current rate, it is
foreseen that by 2020, the electricity consumption of
Chile’s mining industry will increase by 97%.
The mining sector, as the most representative but not
the only industrial sector developed in Chile, suffers
strongly from the lack of reliability in energy supply
and from high energy prices. While there is a critical
need for power for all of this sector’s operations, many
of the facilities are located in remote areas where
utility (electricity, gas, water) grids are not available
and this results in further expenses for the transport of
necessary resources to the sites. Alongside these issues,
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there is an increasing pressure for environmentally
sustainable processes and practices as the traditional
sources, including gas, diesel and coal, are facing
increasing mistrust from the local population and
environmentalists.
All the needs identified within Chile’s mining industry
make an incredible business case for CSP technology.
There is an opportunity to reduce energy costs by
drastically removing the high operational costs of
sourcing and transporting fossil fuels. At the same time,
there is a potential for localizing the generation in the
same areas where there is high demand and where
main transmission lines are challenged by the country’s
geography. Furthermore, solar thermal power can offer
a reliable and sustainable source for both heat and
electricity. In fact, the waste heat could be employed
for a variety of applications, including the production
of hot sanitary water, heating leach dumps or being
recovered to be used as process heat. Last but not
least, conversely from PV and wind, CSP can implement
thermal energy storage systems that can guarantee
dispatchable, round-the-clock power supply to match
the flat energy demand profile of these industries (the
demand profile in the SING system is very flat, with a
variation factor of only 7.7%).
Thermal energy storage is indeed one of the most
important technical features to implement. The typical
load factor of the mining industry would require at
least 4 hours of storage. However, as a result of the
requirements and the risk typically perceived by clients,
it is likely that storage of up to 12 hours might be
considered. The huge potential for the employment of
CSP in Chile’s mining sector is further enhanced by the
amount of land available.
Other than electricity, CSP can generate steam to supply
process heat used in various parts of the production
chain. Other applications that can be developed are
solar thermal desalination and solar refrigeration.
Furthermore, given that so far a wide range of thermal
power plants has been developed for such applications,
CSP could be also employed in hybrid mode, to
augment the current capacity already available. This
opportunity is currently being explored by developers.
One of the potential problems that should be taken into
account at the development stage is the likelihood of
negative effects arising from the process operations on
a CSP plant. For instance, the effect of dust and sand
produced during various activities carried out on site,
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or due to storms or other local climatic events. Similar
considerations should be made for the potential effect
of gases, such as Nitrogen Oxide (NOx) and Sulfur Oxide
(SOx), or blasts occurring as part of the mining process.
Another aspect to be investigated is the potential
conflict in the use of land, as the same location of a
plant could be exploited for agricultural purposes, or
more likely for expansion of the same mining activities.
As a matter of fact, the development of these activities
is quite dynamic, so there might be some difficulty in
occupying a portion of land for a long period of time.
That said, CSP technology has a huge potential for
the mining sector and some developers have already
started exploiting it to support the needs of this
sector for continuous expansion within the country.
An important aspect to keep in mind is the need to
pursue development costs comparable with the costs
currently faced by mines in order to make a CSP project
financially feasible.
8.5.1. Case Study: Minera El Tesoro, Chile
The mining companies in Chile are the largest energy
consumers in the country for both extraction and
production processes. With its strong mining industry,
Chile is expected to attract in the next decade some
US$100 billion in mining investment. As a result of
the sector’s growth, it is expected that by 2020, the
electricity consumption of Chile’s mining industry will
increase by up to 97%, providing enough incentive for
CSP developers to position themselves strategically to
supplement or complement the energy supply chain of
current and future mining operations. CSP activities are
already underway in the country.
The Spanish company Abengoa recently commissioned
a 10 MW solar thermal plant for Minera El Tesoro, which
is the first CSP plant integrated into a mining process
worldwide. Minera El Tesoro, located in Chile’s Atacama
Desert, is currently the largest CSP plant in South
America. The plant comprises 1,280 PT-1 solar thermal
collector modules which supply process heat for the
copper electro-extraction process in mining production.
The plant is expected to substitute more than 55% of
the diesel fuel currently used in the process, and incorporates thermal energy storage. In the past, Minera el
Tesoro was using diesel to provide the heat requirement
for the SXEW process. Diesel heaters were also used to
provide thermal energy to other minor services such as
cathodes washing and reagent heating.
Table 11(8): Techno-Economic Data of Mineral El Tesoro CSP Plant
Location
Sierra Gorda, Antofagasta
Mining company
Antofagasta Minerals
Facility
Minera El Tesoro
EPC
Abengoa
Estimated investment
US$ 14 million
Plant capacity
10 MW thermal
Annual energy yield (thermal)
24,845 MWh/year
Surface area
6-7 Ha
CSP technology
Parabolic Trough (PT)
PT collector type
PT-1
Number of PT collectors
1,280
Water heating temperature
150 °C
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Mining process application
Solvent extraction – Electrowinning
Diesel consumption saving:
55%
Operational costs savings
Approximately US$ 2 million
CO2 emission reduction
8,000 - 10,000 tons per year (4%)
Number of storage tanks
3
Storage tanks volume
100 m3
Source: CSP Today Global Tracker, August 2013
parabolic trough plant of 14 MW is already in operation.
See Appendix C for the intricacies of integrating CSP
with the mining process.
8.6. Market Forecast
Recently moving into the CSP spotlight owing to its
excellent DNI that ranges from 2,445 kWh/m2/year
to 3,832 kWh/m2/year (3,300 kWh/m2/year average),
Chile benefits from a clearness index which justifies
the country’s growing interest in CSP generation. With
a potential of up to 2,636 GW of CSP, the country’s
wheels are in motion to exploit CSP technologies, and a
There are currently 360 MW of CSP under development,
and 405 in planning in Chile. Apart from that, the 13 GW
of renewable energy targeted, and the expected 40%
increase in energy demand by the end of the decade,
both as electricity and heat, in conjunction with the CSP
potential of the country constitute the core requirements necessary for the industry to lift off, most likely
within the next 2-3 years.
Figure 3(8): Installed CSP Capacity in Chile Until 2024 (MW)
2,500
Optimistic
Conservative
2,000
1,915
Pessimistic
1,500
1,000
797
500
348
0
2006
2008
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2010
2012
2014
2016
2018
2020
2022
2024
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Figure 4(8): Cumulative CSP Energy Production in Chile to 2024 (TWh)
50
47.0
Optimistic
45
Conservative
40
Pessimistic
35
30
25.1
25
20
15
13.1
10
5
0
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Conclusion
The scenario for CSP technology in Latin America, and
in particular Chile, is extremely favorable. The northern
region, where the Atacama Desert is located, has ideal
conditions for CSP, being one of the driest places on
the planet with one of the highest solar radiation levels
in the world. The superior solar radiation, increasing
demand for energy, high energy prices and the need to
diversify the energy mix are all important factors which,
alongside environmental concerns for the carbon
footprint of the current energy portfolio, make CSP very
competitive and attractive.
Chile’s energy market also offers a great potential
for international CSP developers because renewable
energy projects are likely to be able to compete with
conventional fuel projects without incentives. The first
tender for CSP plants was released in February 2013
and financially supported by The Ministry of Energy
with a subsidy of up to US$ 20 million. Furthermore,
the government negotiated a consortium of financing
sources for a total amount of over US$ 350 million in soft
loans. Minera el Tesoro was the first CSP project in the
South American continent, but the number of projects
in the pipeline is expected to grow soon as various
companies are showing interest in the local market.
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References
Behnke, R., Estévez, G., and Arias, I., 2009. Las Energías Renovables No Convencionales en el Mercado Eléctrico
Chileno. Comisión Nacional de Energía - GTZ. Available through: <www.giz.de/de/downloads/sp-ERNC-mercado-electrico-chileno.pdf> [Accessed 20 September 2013].
Canales, G., 2012. Chile: Development & Opportunities of the Renewable Energy Market. Presentation by Centro de
Energia Renovables. Available through: <www.kallman.com/presentations/Chile-Development-and- OpportunitiesRenewable-Energy-Market.pdf> [Accessed 20 September 2013].
Correa, P. M., 2013. CSP - A Feasible Solution for Mining Activities in the Atacama Desert- Technical Presentation.
Suntrace Chile.
Dettoni, J., Stankova, Y., and Salutz, A., 2012. Chile’s Power Challenge: Reliable Energy Supplies. Power Mag Global
Business Reports. Available through: <www.powermag.com/chiles-power-challenge-reliable-energy-supplies>
[Accessed 20 September 2013].
Muñoz, R. H., 2012. Tarifas Eléctricas y Legalidad. Internal Presentation.
Von Hatzfeldt, S., 2013. The Rise of Latin America: Renewable Energy in Chile: Barriers and the Role of Public Policy.
Journal of International Affairs. Vol. 66, No. 2. Columbia University, USA. Available through: <http://jia.sipa.columbia.
edu/renewable-energy-chile> [Accessed 20 September 2013].
VV.AA., and Marquez, C., 2012. CSP Market Report 2012-13. FC Business Intelligence, Groupe Reaction Inc., Research
Manager. CSP Today.
VV.AA., and Muirhead, J., 2013. CSP Today Quarterly Update: June Edition.
VV. AA., 2011. The Chilean Energy Market. Report. Embassy of Switzerland in Chile.
VV. AA., 2011. Renewable Energy in Chile - Factsheet. Centro de Energias Renovables, Renewable Energy Center.
VV. AA., 2012. Chile CTF-IDB Concentrated Solar Power Project. Public information document of the Inter-American
Development Bank.
VV. AA., 2012. National Energy Strategy 2012-2030. Ministry of Energy, Chile Government.
VV. AA., 2013. CSP Today Industrial Applications Guide: Mining. CSP Today.
VV. AA., 2013. CSP Today guide: Chile. CSP Today.
VV.AA, 2013. Global Tracker Database. CSP Today.
VV. AA., 2013. Business intelligence information and data. Available through: <www.csptoday.com>.
VV. AA., 2013. Information and data. Available through: <www.tradingeconomics.com>.
VV. AA., 2013. Information and data. Available through: <www.indexmundi.com>.
VV. AA., 2013. Information and data. Available through: <www.populationdata.net>.
VV. AA., 2013. Information and data. Available through: <www.reegle.info>.
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Chile
VV. AA., 2013. Information and data. Available through: <http://data.un.org>.
VV. AA., 2013. Information and data. Available through: <www.csp-world.com>.
VV. AA., 2013. Information and data. Available through: <www.eia.gov>.
VV. AA., 2013. Information and data. Available through: <http://jia.sipa.columbia.edu>.
VV. AA., 2013. Information and data. Available through: <http://cer.gob.cl>.
VV. AA., 2013. Information and data. Available through: <www.abengoasolar.com>.
VV. AA., 2013. Information and data. Available through: <www.evwind.es>.
VV. AA., 2013. Information and data. Available through: <http://cigrasp.pik-potsdam.de>.
Woodhouse, S., 2011. Renewable Energy Potential of Chile. Global Energy Network Institute. Available through:
<www.geni.org/globalenergy/research/renewable-energy-potential-of-chile/Chile%202020%20Report%20
II%20PBM%20final.pdf> [Accessed 20 September 2013].
Wu, Y., 2012. Electricity Market Integration: Global Trends and Implications for the EAS Region. ERIA Research
Project Report. University of Western Australia. Available through: <http://webcache.googleusercontent.com/
search?q=cache:5fzvee2GZYEJ:www.uwa.edu.au/__data/assets/rtf_file/0004/1895332/11-20-Gas-Market-Integration-Global-Trends-and-Implications-for-the-EAS-Region.rtf+&cd=2&hl=en&ct=clnk&gl=ae> [Accessed 20
September 2013].
(VV.AA: Various Authors)
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Acronyms
ACRONYM
DEFINITION
AChEE
Agencia Chilena de Eficiencia Energética (Chilean Energy Efficiency Agency)
ACERA
Asociación Chilena de Energías Renovables Alternativas
BID
Banco Interamericano de Desarrollo
CDEC
Centro de Despacho Económico de Carga (Economic Load Dispatching Centres)
CDM
Clean Development Mechanism
CNE
Comisión Nacional de Energía (National Energy Commission)
CONAMA
National Environmental Commission
CONICYT
Comisión Nacional de Investigación Científica y Tecnológica
CORFO
Corporación de Fomento de la Producción de Chile
CTF
Clean Technology Fund
ECLAC
Economic Commission for Latin America and the Caribbean
GEF
Global Environment Facility
GIS
Geographic Information System
IDB
Inter-American Development Bank
IOC
Independent Operation Centre
LAC
Latin American and Caribbean
NCRE
Non-Conventional Renewable Energy
OECD
Organization for Economic Cooperation and Development
RECAI
Renewable Energy Country Attractiveness Index
SEC
Superintendency of Electricity and Fuels
SIC
Sistema Interconectado Central (Central Interconnected System)
SING
Large Northern Interconnected System (Northern Interconnected System)
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9
China
By Cayetano Hernandez
Contents
List of Figures257
List of Tables
257
Chapter Summary
260
Country Overview
260
9.1 Electricity Market
262
9.1.1 Electricity Consumption
263
9.1.2 Electricity Demand
264
9.1.3 Grid Transmission
264
9.2 CSP Market
266
9.2.1 CSP-Specific Policy
266
9.2.2 CSP Project Profiles
266
9.2.3 Local Content Requirements
269
9.2.3.1 Investing
272
9.2.3.2 Equipment
272
9.3 Local CSP Ecosystem
273
9.3.1 Key Government Agencies
274
9.3.2 Permitting Agencies
274
9.3.3 Financing Organizations
275
9.3.4 Transmission Grid Operators
275
9.3.5 Developers, EPC Firms and Utilities
277
9.4 Local Component Supply
277
9.4.1 Steam Generators
279
9.4.2 Turbines
279
9.4.3 Pumps
280
9.4.4 Valves
280
9.4.5 Receiver Tubes
281
9.4.6 Heat Transfer Fluid (HTF)
282
9.4.7 Collector Frames
283
9.4.8 Raw Material Availability
283
9.4.8.1 Steel
284
9.4.8.2 Glass
284
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9.4.8.3 Concrete
286
9.4.8.4 Molten Salt
287
9.5 Alternative CSP Markets
288
9.5.1 Coal - ISCC
288
9.5.2 Desalination
290
9.5.3 Enhanced Oil Recovery
291
9.6 Market Forecast
294
Conclusion
296
References
297
Acronyms
297
List of Figures
Figure 1(9): Direct Normal Irradiation in China (DNI Map)
261
Figure 2(9): Electricity Production in China by Source of Generation
263
Figure 3(9): Installed Capacity Distribution in China
264
Figure 4(9): China’s Current Power Network
265
Figure 5(9): Map of Wind Feed-In-Tariff
267
Figure 6(9): Flow Diagram of Approval Stages in China
275
Figure 7(9): Power Grid Companies in China
277
Figure 8(9): Non-metallic Mineral Resources in China
287
Figure 9(9): Map of Coal Resources in China
289
Figure 10(9): DNI Resources in China
289
Figure 11(9): Desalination Capacity in Coastal Cities (m3/day) in China (2010)
291
Figure 12(9): China’s Oil Production and Consumption 1990-2013
292
Figure 13(9): Location of China’s Major Oil Fields
293
Figure 14(9): Locations of Known CSP Projects in China
293
Figure 15(9): Installed CSP Capacity in China Until 2024 (MW)
295
Figure 16(9): Cumulative Energy Production in China Until 2024 (TWh)
295
List of Tables
Table 1(9): Drivers and Barriers
262
Table 2(9): Erdos Solar Plant Parameters (First CSP FiT)
268
Table 3(9): List of CSP Projects in China
269
Table 4(9): Foreign Investment Categories
272
Table 5(9): Key Government Agencies in China
274
Table 6(9): Permitting Agencies in China
275
Table 7(9): Financing Organizations in China
276
Table 8(9): Renewable Energy Projects Co-financed by Development Banks
276
Table 9(9): Transmission Grid Operators in China
277
Table 10(9): Electric utilities in China
278
Table 11(9): Main Steam Generator Manufacturers in China
279
Table 12(9): Turbine Manufacturers in China
280
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Table 13(9): Pump Manufacturers in China
281
Table 14(9): Valve Manufacturers in China by Industry
281
Table 15(9): Receiver Manufacturers in China
282
Table 16(9): Heat Transfer Fluid Providers in China
283
Table 17(9): Collector Frame Manufacturers in China
284
Table 18(9): China Steel Exports and Imports (2012)
284
Table 19(9): Main Steel Companies in China by Production (2012)
285
Table 20(9): Top 10 Chinese Glass Manufacturers (2012-2013)
286
Table 21(9): CSP Mirror Manufacturers in China
286
Table 22(9): Concrete Producers in China by Production
287
Table 23(9): Molten Salt Producers in China
288
Table 24(9): China’s Oil Production, Consumption, and Import (2011)
291
Table 25(9): EOR Projects Implemented in China
294
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Chapter Summary
The CSP Today 2013 Markets Scorecard has ranked
China as the seventh most-promising CSP market. With
a population of more than 1.3 billion, far exceeding all
other emerging CSP market demographics, China faces
rapid energy demand growth. To meet future demand,
China will need to have added over 1,300 GW to its grid
between 2005 and 2030. China has an optimistic target
of reaching 3,000 MW of CSP power by the end of the
decade. The aim of this is to address China’s desire to
refocus its energy portfolio on more environmentally-friendly technologies.
to mid-term, including the lower cost of Chinese PV
energy, the difficulty of transmitting electricity from
western to the eastern areas, and the long periods of
water scarcity, heavy brown clouding and sandstorms.
China’s total installed power capacity at the end of 2011
reached 1,060 GW, where coal was the dominant source
of electricity.
With DNIs ranging from 1,800 to 2,500 kWh/m2 per year,
China may not be a country benefiting from the best
solar resource, but considering its population and the
availability of land for CSP projects, the country could
potentially have 5,821 to 8,105 GW of CSP capacity.
China is currently implementing its 12th Five Year Plan
(2011-2015) on Renewable Energy Development, and
has targeted an installed capacity for solar thermal
electricity power plants of 1 GW by 2015 and 3 GW
by 2020. At present, CSP Feed-in-Tariffs (FiT) are under
study in China. The bidding process of the first project
resulted with three companies submitting a FiT of 2.25,
0.98 and 0.94 RMB/kWh. China Datang was awarded the
contract with the lowest price at 0.94 RMB/kWh.
Despite holding great promise for future CSP
deployment, China’s CSP industry is challenged by
numerous barriers to its development in the short
Around 350 MW are now under development, largely in
the provinces of Qinghai, Gansu, Tibet, Inner Mongolia
and Ningxia, where parabolic trough and 50 MW are the
Country Overview
China
Solar Resource (average annual sum of DNI): 1,900~2,000 kWh/m²/year
Size:9,596,960 km²
Population (2012): 1.351 billion
GDP per capita (2012):
US$ 6,091
Installed power capacity: 997 GW
Annual electricity consumption:
5,150 TWh
Expected annual electricity demand in 2020: 6,697 TWh
Electricity Mix by Installed Capacity (2010)
Coal 67%
Natural Gas 4%
Petroleum 2%
Nuclear 1%
Hydro 21%
Wind5%
Bioenergy 1%
Geothermal 0%
Solar PV 0%
CSP 0%
Potential Markets for Industrial CSP Applications
Process Heat Hybrid Plants: Coal Plants, Biomass Plants, and Geothermal Plants
Electricity Hybrid Plants: Coal Plants, Biomass Plants, and Geothermal Plants
Desalination
Mining
Waste Plants
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main characteristics - following the Spanish example.
Regarding finance, the Asian Development Bank and
the World Bank are participating in three CSP projects.
China is the largest producer of coal, gold, and some
of the rarest minerals in the world. It is also the largest
consumer of other mining products, especially thermal
coal, with around 49% of total global consumption,
and iron ore, accounting for around 58% of total global
consumption.
Seawater desalination is quickly developing in China,
where in its 12th Five-Year Plan, the government
announced a target of 2.2-2.6 million m3/day of online
seawater-converted capacity by 2015. Several Enhanced
Oil Recovery (EOR) pilot projects have also been
implemented in China, and in the coming years, two
projects are going to be constructed in the Dagang and
Daqing Oil Basins.
An entire Chinese supply chain CSP industry is in the
process of being created, covering project development, materials and components including mirrors,
receivers, support structures, control systems, molten
salt/heat storage, heat transfer fluids, steam generators,
power blocks, pumps and system integration.
Figure 1(9): Direct Normal Irradiation in China (DNI Map)
Source: SolarGIS © 2013 GeoModel Solar s.r.o.
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Table 1(9): Drivers and Barriers
Drivers
Barriers
CSP Technology can be a pivotal energy generation source in
The lower cost of national Chinese photovoltaic (PV) energy
China, adding energy stability to the country, given its population makes PV more competitive in price
of 1.3 billion and electricity demand of about 5,200 TWh in 2012
NDRC has set a solar power target of 1 GW by 2015 and 3 GW by
2020. Large pipeline of announced projects
Difficulty of transmitting electricity generation from the western
areas to the eastern areas
Taking advantage of the economies of scale in China could lead
to cheaper equipment costs and a lower LCOE
New investments are needed for the construction of high voltage
grid lines (HVAC-DC)
Development of hybrid plants, such as Integrated Solar Combined Very low temperatures of -30ºC are easily reached during winter
Cycle plants with gas or coal can reduce the release of carbon
nights. This makes it a challenge to keep oil fluid during nights
emissions
with no production
Opportunity to develop Central Receiver Technology
Long periods of water scarcity, heavy brown clouding and
sandstorms
Huge land availability, especially in the Western part of the
country where the solar resource is located
Complexity of administrative and permits procedures
Consumption per capita is expected to increase exponentially
and therefore a diversified mix of energy is needed
Lack of a clear and definitive Feed-in-Tariff for solar thermal
electricity
9.1. Electricity Market
Up until 1994, the electricity supply was managed at a
provincial level by electric power governmental bureaus.
In 1997, the Ministry of Electric Power was transformed
into the State Power Company of China (SPC). The SPC
was dismantled in 2002, and since then, ownership
of transmission and generation assets has been
separated. Utilities are now managed by eleven smaller
corporations outside of the government administration
structure. The smaller companies include two electric
power grid operators, five electric power generation
companies (Big 5) and four relevant business companies.
In terms of resources, China has abundant energy.
The country has the world’s third-largest coal reserves,
mainly in the north and southwest, and massive hydroelectric resources in the southwest regions.
In April 1996, the Electric Power Law was implemented,
in order to promote the development of the electric
power industry, protect the legal rights of investors,
managers and consumers, and regulate generation,
distribution and consumption.
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Figure 2(9): Electricity Production in China by Source of Generation
Source: Energy Information Administration
9.1.1. Electricity Consumption
China has become the world’s second-largest electricity
consumer after the United States, with the industrial
sector in China accounting for the majority of electricity
consumption.
The electric power industry in China has witnessed
continuous growth. At the end of 2000, the total
installed power was only 315 GW, and by the end of
2010, total installed capacity reached 997 GW, where
coal and hydro together represented almost 90% of the
total installed capacity. The total installed capacity at the
end of 2011 reached 1,060 GW with similar values.
At present, coal is the dominant source of electricity
supply, representing roughly 80% of the supply and a
just under 70% of the installed capacity (see Figure 3(9)).
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Figure 3(9): Installed Capacity Distribution in China
Marine - 0%
Solar csp - 0%
Solar pv - 0%
Geothermal - 0%
Bioenergy - 1%
Hydro - 21%
Nuclear - 1%
Coal - 67%
Wind - 5%
Source: International Energy Agency, 2013
9.1.2. Electricity Demand
China is a zero importer-exporter country in terms of
electricity, which means that generation comes entirely
from the domestic market. Generation has increased
at an average ratio of around 10% since 2005 as
consumption per capita is constantly increasing.
The price of electricity in China is regulated by the
government, with different caps depending on the
province and final user. The lower electricity prices
encourage wasteful use of cheap electricity and
therefore producers are struggling to generate enough
power, which results in regional power shortages when
generation drops in a region. Interconnections between
regional grids are weak, and long-distance transmission
capacity is small, which means that power cannot be
routed in from other regions where there is surplus
capacity.
China’s power transmission system remains underdeveloped. There is no national grid and the lack of a
unified national grid system reduces the efficiency of
power generation nationwide and increases the risk of
localized shortages.
The evolution of the grid in China shows an isolation
of the western provinces Xinjiang and Tibet and a grid
mainly comprising 220kV, 330kV and 500kV lines:
Reforms to the pricing system are needed, such as
competition among generators and separation of
thermal tariffs into capacity and dispatch components,
differential peak and off-peak pricing, among others,
but none of them have been adopted.
9.1.3. Grid Transmission
The State Grid Corporation of China (SGCC), which is the
biggest grid operator in the country, supplies power to
around 90% of China and serves over 1 billion people. In
2011, SGCC’s total length of transmission lines was more
than 655,000 kilometers, where its substation capacity
was 2.39 billion kilovolt-amps (kVA).
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Figure 4(9): China’s Current Power Network
Source: State Grid Corporation of China
For long distance interregional transmission, three
major ultra-high voltage UHVAC (1,000 kV) and three
UHVDC (800 kV) transmission lines will run from Inner
Mongolia to the south, and from Sichuan and Xinjiang
to the east, which will unify the North, East, and Central
grids into one operating unit. It will also enable the
country to connect the enormous renewable potential
- mainly hydro, wind and solar from western China - to
meet booming demand from the eastern coastal
provinces. The main problem in China is the voltage
drop when power is sent over very long distances from
east to west of the country.
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9.1.4. Market structure diagram: China’s power sector
GENERATION ASSETS
China Huaneng Power Group Corp.
Power Plant Assets of State
Power Corp.
(including Huaneng)
China Datang (Group) Corp.
State
Power
Corp. of
China
China Huadian Corp.
China Guodian (Group) Corp.
Power Grid Assets of State Power Corp.
China Power Investment Corp.
TRANSMISSION & DISTRIBUTION ASSETS
Power Grid
Assets of
State Power
Corp.
Yunnan, Guizhou &
Guangxi Power Grid
Guangdong Power Grid
State
Grid
Corp. of
China
North China Grid Corp.
(Shandong included)
Northeast China
Power Grid Corp.
East China Grid Corp.
(Fujianincluded)
China
Southern
Power Grid
Co. Ltd.
Hainan Power Grid
CentralChina Grid Corp.
(Sichuan & Chongqing included)
Northwest China
Power Grid Corp.
Source: International Energy Agency, 2013
9.2. CSP Market
9.2.1. CSP-Specific Policy
Government incentives are deployed by the National
Development and Reform Commission (NDRC), the
country’s economic planning agency, which every 5
years reviews energy-related strategies. Currently, China
is undergoing the 12th five-year plan (2011-2015) on
Renewable Energy Development, and has targeted an
www.csptoday.com
installed capacity for solar thermal electricity power
plants of 1 GW for 2015 and 3 GW for 2020.
China has set a fixed Feed-in Tariff (FIT) for their new
renewable energy plants. This financing mechanism
started in 2009 for wind projects and applies for 20-25
years, in a move that will help project operators obtain
profits.
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The NDRC will make adjustments to the FIT going
forward from time to time, based on factors such as
investment cost changes and technology developments. Before the launch of the FIT, the NDRC had been
implementing a concession rights auction regime in
granting development rights for large solar projects in
China. The auction winners were usually those offering
the lowest grid power prices, often large state-owned
enterprise power providers. Besides FITs at the national
level, some of the provinces have decided to promote
solar energy, primarily photovoltaics, using local funds
from provincial budgets.
The FiT for each renewable energy project represents
a significant premium over the average rate of 0.4
RMB/kWh paid to coal-fired electricity generators.
Understanding how the FiT has evolved in more
mature markets in China, such as wind and PV, could
help determine whether the same tendency can be
expected for CSP.
Four categories were established by the NDRC for
onshore wind projects, which, based on the region, will
be able to apply for the tariffs. Areas with better wind
resources will have lower feed-in tariffs, while those with
lower outputs will be able to access more generous tariffs.
Figure 5(9): Map of Wind Feed-In-Tariff
 I. 0.51 RMB/kwh
 II. 0.54 RMB/kwh
 III. 0.58 RMB/kwh
 IV. 0.61 RMB/kwh
Source: National Development and Reform Commission
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After wind, the next technology following the same
pattern was photovoltaics, which in June 2011 was
allocated a unified FIT of 1 RMB per kWh. In 2012, a
similar provincial FiT was approved, depending on the
location of the project.
The CSP FiT is currently under study in China. The first
project’s bidding process resulted in three companies
submitting a FIT of 2.25, 0.98 and 0.94 RMB/kWh. China
Datang was successful, with the lowest price at 0.94
RMB/kWh.
The bidding for the first parabolic trough design project
in China was opened in January 2011 to construct the
50 MW parabolic trough plant located in Erdos, Inner
Mongolia.
Some of the requirements for the bidding were:
Although it was called a FiT, it was more of a tendering
process or a mix of both, where the Government, after
the bidding process, chose the lowest priced bid on a
project-by-project basis.
Since this FiT is currently too low to develop a project,
the Chinese Government is revising the FiT based on
the cost of the projects, which could lead to higher
values. However, there is no clear date for when this
will happen, and the CSP industry in China remains in
waiting.
Table 2(9): Erdos Solar Plant Parameters (First CSP FiT)
Parameter
Value
Construction period (months)
30
Concession operation period with fixed FIT price (years)
25
Fixed Price FIT
<PV price
Proportion of natural gas
<10%
Storage
Yes, with molten salt
Source: CSP Today Global Tracker, August 2013
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9.2.2. CSP Project Profiles
Table 3(9): List of CSP Projects in China
MW
Capacity
Technology
Status
State/ Region
Developer
Storage
Capacity
BEIJING DAHAN 1 MW
PILOT PROJECT
1
Power Tower
Operation
BEIJING
IEECAS
-
HAINAN NANSHAN
SANYA 1 MW PILOT
1
Dish
Operation
HAINAN
ECUBE ENERGY
-
HAINAN SANYA 1.5 MW 1.5
PILOT
Fresnel
Operation
HAINAN
HUANENG
-
XINJIANG TURPAN 180
kW PILOT PROJECT
0.18
Parabolic Trough Operation
XINJIANG
CHINA GUODIAN GROUP BY GUODIAN QINGSONG
TURPAN NEW ENERGY
CO. LTD.
ORION INNER
MONGOLIA 10 MW
10
Dish
Construction
INNER
MONGOLIA
HELIOFOCUS
-
SUPCON DELINGHA
10-50 MW
50
Multi-Tower
Construction
QINGHAI
ZHEJIANG SUPCON
SOLAR TECHNOLOGY
2.5
GANSU JINTA
50
Parabolic Trough Development
GANSU
CHINA HUADIAN
ENGINEERING CO.
1
INNER MONGOLIA
ERDOS
50
Parabolic Trough Development
INNER
MONGOLIA
CHINA DATANG CORP.
RENEWABLE POWER
03-May
NINGXIA ISCC
PROJECT
92.5
Parabolic Trough Development
(ISCC)
NINGXIA
HANAS NEW ENERGY
GROUP
-
QINGHAI DELINGHA
50
Parabolic Trough Development
QINGHAI
CHINA GUANGDONG
NUCLEAR SOLAR
ENERGY DEVELOPMENT
CORP.
7
Title
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QINGHAI DELINGHA
10
Tower
Development
QINGHAI
CHINA GUANGDONG
NUCLEAR SOLAR
ENERGY DEVELOPMENT
CORP.
GOLMUD
50
Fresnel
Development
QINGHAI
CHINA HUANENG CLEAN 6
ENERGY RESEARCH
INSTITUTE
SHANNAN
50
Fresnel
Development
TIBET
CHINA HUANENG CLEAN 5.5
ENERGY RESEARCH
INSTITUTE
QINGHAI
GOLMUDPROJECT
10 – 1,000 Parabolic Trough Planning
QINGHAI
CHINA POWER
INVESTMENT CORP.
-
GANSU JIUQUAN
10
Parabolic Trough Planning
GANSU
CHINA DATANG
CORPORATION AND
TIANWEI NEW ENERGY
-
GANSU JIUQUAN
50
Parabolic Trough Planning
GANSU
CHINA GUANDONG
NUCLEAR POWER GRUP
(GDN)
-
GANSU WUWEI
50 – 200
Parabolic Trough Planning
GANSU
CHINA GUANDONG
NUCLEAR POWER GRUP
(GDN)
-
GANSU
1.5
Parabolic Trough Planning
GANSU
BAODING TIANWEI
GROUP AND CHINA
DATANG
-
GANSU
100
Parabolic Trough Planning
GANSU
SETC TIANJIN COMPANY
-
GUANDONG
1
Parabolic Trough Planning
GUANDONG
CAMDA NEW ENERGY
-
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CHABEI PROJECT
64
Parabolic Trough Planning
HEBEI
BEIJING GUOTOUJUNAN INVESTMENT
MANAGEMENT CO.
INNER MONGOLIA
ERDOS
30
Parabolic Trough Announced
INNER
MONGOLIA
BEIJING CONTROL
TECHNOLOGY
DEVELOPMENT
-
INNER MONGOLIA
550
Parabolic Trough Announced
INNER
MONGOLIA
BEIJING KANGTUO
HOLDING
-
JIANGSU NANJING
0.1
Parabolic Trough Announced
JIANGSU
NANJING
ZHONGCAITIANCHENG
NEW ENERGY COMPANY
NINGXIA
100
Parabolic Trough Announced
NINGXIA
BEIJING CONTROL
TECHNOLOGY
DEVELOPMENT
-
QINGHAI GOLMUD
50 - 100
Parabolic Trough Announced
QINGHAI
GD ENERGY
-
QINGHAI GOLMUD
50
Parabolic Trough Announced
QINGHAI
CHINA HUADIAN
ENGINEERGING CO. LTD
-
QINGHAI
50 - 1,000 Parabolic Trough Announced
QINGHAI
LION INTERNATIONAL
INVESTMENT
-
SHAANXI
50 - 2,000
Parabolic Trough Announced
SHAANXI
SHANDONG PENGLAI
AND ESOLAR
-
SICHUAN ABAZHOU
100
Parabolic Trough Announced
SICHUAN
BAODING TIANWEI
GROUP (TIANWEI NEW
ENERGY)
-
TIBET LHASA
50
Parabolic Trough Announced
TIBET
CHINA HUANENG TIBET
COMPANY
-
TIBET
6 - 130
Dish
TIBET
TIANJING CAIXI SOLAR
CO. AND SETC CO.
-
XINJIANG
1.5 - 200
Parabolic Trough Announced
XINJIANG
CHINA HUANENG
GROUP
-
www.csptoday.com
Announced
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XINJIANGPROJECTS
337
Parabolic Trough Announced
XINJIANG
CHINA GUODIAN GROUP BY GUODIAN QINGSONG
TURPAN NEW ENERGY
CO. LTD
XINJIANG
12 - 300
Parabolic Trough Announced
XINJIANG
XINJIANG QUINGSONG BUILDING MATERIALS
AND CHEMICALS GROUP
CO. LTD AND GUODIAN
XINJIANG COMPANY
Not Known
100
Not Known
Announced
Not Known
AVIC XIAN AERO ENGINE GROUP LTD.
Not Known
50
Not Known
Announced
Not Known
CHINA HUADIAN
CORPORATION
-
Not Known
100
Not Known
Announced
Not Known
GUANGDONG KANGDA
-
Not Known
100
Not Known
Announced
Not Known
SHANGHAI GONGDIAN
ENERGY TECHNOLOGY
CO. LTD
-
Source: CSP Today Global Tracker, August 2013
9.3. Local Content Requirements
9.3.1. Investing
In China, there are different categories of projects for
foreign investors (encouraged, permitted, restricted
or prohibited) and they are subject to different
government approval requirements.
Investing in a project categorized as “encouraged” for
foreign investment may have some implications, such
as the provincial government having greater authority
over the project and certain tax benefits being available.
Projects under the “restricted” category are not out of
reach for foreign investors, but these projects may be
subject to higher restrictions.
The table 4(9) summarizes these requirements:
Table 4(9): Foreign Investment Categories
Foreign Investment Categories
Total Investment
(million US$)
Verification and Approval Authority
1
Encourage or Permitted
>=500
State Council (National Level)
Restricted
>=100
Encourage or Permitted
>=300
Restricted
>=50
2
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NDRC and MOFCOM
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3
Encourage or Permitted
<=300
Restricted
<50
Local Administrations of NDRC (DRC) and
MOFCOM
Source: European Solar Thermal Electricity Association
The approval of provincial or equivalent authorities is
generally enough for projects in the “encouraged” and
“permitted” categories if total investment is less than
US$ 300 million.
For ‘restricted’ category projects, provincial approval
is enough only if the total investment is less than US$
50 million. Projects in the “permitted” or “restricted”
category exceeding these amounts must be approved
by the Ministry of Commerce (MOFCOM) and the
National Development and Reform Commission
(NDRC). Provincial authorities may often delegate their
approval authority to municipal or other lower-level
government authorities. However, provincial authority
to approve a “restricted” category project may not be
delegated.
State Council approval is required for projects in the
“restricted” category if total investment exceeds US$
100 million, but is generally required for projects in the
“encouraged” category or “permitted” category only if
total investment exceeds US$ 500 million
The effect of these categorizations is to make clear the
approval requirements and encourage those projects
that are seen as high-priority projects for Chinese
development. Renewable energy projects can benefit
from these categories.
The category of “encouraged” projects includes the
following project types:
a. Construction and operation of power stations using
technology for clean burning of coal;
b. Construction and operation of thermo-electric
cogeneration power stations;
c. Construction and operation of hydroelectric power
stations; and
d. Construction and operation of power stations using
new sources of energy (including solar energy, wind
energy, magnetic energy, geothermal energy, tidal
energy, biomass energy).
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9.3.2. Equipment
Regarding equipment, although there is no specific
local equipment policy for CSP, an entire Chinese supply
chain CSP industry is being created, as shown in section
9.4, from project development, to materials and components (mirrors, receivers, support structure, control
system, molten salt/heat storage, HTF, steam generator,
power blocks, pumps and system integration).
The localization progress within other renewable
industries in China also represents a considerable
potential for the solar industry. China’s strength is its
huge manufacturing capacity and competitively priced
local equipment, so unless there is an important need
for foreign technology equipment, it will be difficult for
foreign companies to enter the domestic market.
The development of the wind industry in China
provides significant insights into the scope and development of local CSP equipment suppliers. During the
9th Five-Year Plan (ending in 2000), it was mandatory
that wind turbine equipment purchased for wind
projects contained at least 40% locally-made components. In 2003, the NDRC launched a program that
included local content requirements of 50%, increasing
to 70% in 2004, where it remains today.
Consequently, these local content requirements
made international foreign firms interested in selling
wind turbines in China to develop a manufacturing
strategy that involved either establishing local
manufacturing facilities or setting up assembly facilities
for Chinese-made components. This was achieved by
developing Joint Ventures (JV) with local partners or
Wholly Foreign Owned Enterprises (WFOE or WOFE),
which are limited liability companies entirely owned
by foreign investors. The main concern of foreign
companies in China is the protection of intellectual
property rights and maintaining long-term mutual
benefit relations with local companies.
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9.4. Local CSP Ecosystem
9.4.1. Key Government Agencies
Table 5(9): Key Government Agencies in China
Ministries and
Government Agencies
Roles and Responsibilities
National Development
and Reform Commission
(NDRC)
The National Development and Reform Commission (NDRC) is one of the most important organizations
in China and is a macroeconomic management ministry under the Chinese State Council, which
has broad administrative and planning control over the Chinese economy. Within the wide range of
functions of the NDRC is responsibility for energy planning and pricing.
National Energy
Administration (NEA)
In 2008, the National Energy Administration (NEA) was founded under the NDRC. However, in January
2010, the State Council decided to set up a National Energy Commission (NEC). The commission is
responsible for drafting national energy development plan, reviewing energy security and major energy
issues and coordinating domestic energy development and international cooperation.
The National Energy Bureau (NEB) operates under the supervision of the NDRC and is responsible for
developing plans, policy framework and administering all energies in China, including coal, oil, gas,
nuclear, new energies and renewable energies.
China National Renewable
Energy Centre (CNREC)
Reporting to the NEA, the China National Renewable Energy Centre is a new agency created to assist in
renewable energy policy research and industrial management and coordination. The agency researches
renewable energy development strategies, planning, policy and regulation, coordinates and implements industrial standardization, and manages international and regional cooperation.
Ministry of Finance (MOF)
The Ministry of Finance is in charge of economic and public finance policies, administration of public
finance and external debt, revenue and tax legislation reforms, Central People’s Government expenditure, government revenue distribution, economic development expenditure, social security expenditure, domestic government debts, fiscal and tax policies, and fiscal research and education.
Ministry of Science and
Technology (MoST)
The Ministry of Science and Technology draws up science and technology (S&T) development plans
and policies, drafts related laws and regulations, and implements the National Basic Research Program,
National High-Tech R&D Program and S&T Enabling Program.
The Ministry also compiles and implements plans on national laboratories, national S&T programs, and
research conditions. Furthermore, it issues policies to encourage the synergy of enterprise, university
and research institute.
MoST is responsible for budgeting, final accounting, and supervising of S&T funds. It proposes, with
relevant departments, major policies and measures on the rational allocation of S&T resources. Through
bilateral and multilateral channels, it draws up policies on S&T cooperation and exchange, guiding
relevant departments and local governments in international interaction.
Ministry of Environmental
Protection (MEP)
The Ministry of Environmental Protection develops and implements national policies, and plans, as
well as administrative rules and regulations for environmental protection. Among its responsibilities is
the development of environmental protection standards, pollution prevention in key regions and river
basins, and the achievement of national emission reduction targets.
In addition, the MEP supervises nuclear and radiation safety and takes part in emergency response
to nuclear accidents. Lastly, it carries out environmental science and technology work, organizes key
scientific research projects and technological demonstrations in the field of environmental protection.
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9.4.2. Permitting Agencies
A simplified model of project approval in China is
shown in figure 6(9):
Table 6(9): Permitting Agencies in China
Permitting Agencies
Roles and Responsibilities
National Development and
Reform Commission
The NDRC is the agency in charge of permitting at the national level, but every
region in the country has its own local provincial government for the initial steps
of the approval.
Development and Reform
Commission
The agents in local and provincial governments are the DRC agencies, which are
the development and reform bureaus (the subordinate bodies of the NDRC at
local or provincial level) that finally enacts Government decisions at a national
level.
Figure 6(9): Flow Diagram of Approval Stages in China
APPROVAL STAGES OF PROJECTS IN CHINA
LOCAL
City
DRC
County
DRC
PROVINCIAL
(Region)
Prefecture
DRC
Province
DRC
STATE COUNCIL
(Government)
Country
NDRC
Source: European Solar Thermal Electricity Association
The starting point for a permitting process in China
begins at a local level in the target city, and then
the county, and finally prefecture level, to finish
local approval. Following that, the permit will need
provincial approval until it gets definitive approval from
the Central Government. Another option is to start at
country level, where they will suggest a county for the
initiation of a project.
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9.4.3. Financing Organizations
The financial system has been regulated since 1984.
The People´s Bank of China acts as a central bank,
conducting macro control and supervision over the
nation´s banking system.
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Table 7(9): Financing Organizations in China
State-Owned Commercial Banks (SOCBs)
Joint Stock Commercial Banks (JSCBs)
Industrial and Commercial Bank of China (ICBC)
CITIC Industrial Bank
Industrial Bank
Agricultural Bank of China (ABC)
Huaxia Bank
China Minsheng Banking
Co.
Bank of China (BOC)
Guangdong Development
Bank
Evergrowing Bank
China Construction Bank (CCB)
Shenzen Development Bank
China Zheshang Bank
Bank of Communications (BOCOM)
China Merchants Bank
China Bohai Bank
Shanghai Pudong
Development Bank
Regarding renewable energy, and particularly CSP,
the Domestic and International Development Banks
are very active in China; three of which are the most
important in the financing of renewable energy
projects. Regarding CSP, the development banks which
are currently studying several projects are detailed
below:
Table 8(9): Renewable Energy Projects Co-financed by Development Banks
Domestic and International
Development Banks
Previous Renewable energy projects (if applicable)
China Development Bank
Projects in wind and PV energy
Asian Development Bank
Qinghai Delingha 50 MW parabolic trough with 1 hour storage
Gansu Jinta 50 MW parabolic trough with 7 hours storage
World Bank
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Inner Mongolia Erdos 50 MW parabolic trough with 3-5 hours storage
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Figure 7(9): Power Grid Companies in China
Northeast Power
Grid Company
Northwest Power Grid Company
North China Power
Grid Company
East China Power
Grid Company
Tibet (managed by
National Power Grid
Company)
Central China Power
Grid Company
Southern Power Grid Company
Source: State Grid Corporation of China
9.4.4. Transmission Grid Operators
Table 9(9): Transmission Grid Operators in China
Transmission Grid Operators
Roles and Responsibilities
State Grid Corporation of China (SGCC) The State Grid Corporation of China (SGCC) is the largest state-owned
electric power transmission and distribution company in China,
controlling 80% of China´s transmission and distribution network,
making it the world’s largest electric utility. SGCC provides sustainable
electric power to the Northwest, Northeast, North, Central and East Grids.
China Southern Power Grid Company
(CSG)
China Southern Power Grid Company provides sustainable electric
power to the South Grid (Guangdong, Guangxi, Yunnan, Guizhou and
Hainan) provinces and regions.
China’s grid is divided into six grids: Northwest,
Northeast, North, Central, East and South. There are
two companies controlling the grid: the SGCC, which
controls the first five grids, and the CSG, which controls
the southern grid.
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9.4.5. Developers, EPC Firms and Utilities
In China, utilities also act as developers and EPC
contractors, since they are not just utilities but also
major holdings groups.
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As seen in table 3(9), the market is still under development. However, the Chinese CSP development
market is dominated by the so-called Big 5 utility
players and China Guandong Nuclear:
a.
b.
c.
d.
e.
China Guodian
China Huaneng
China Power Investment
China Datang
China Huadian
These five companies are all State Owned Enterprises
(SOE) directly administered by SASAC, which is responsible for managing SOEs, including the appointment of
top executives and approving any mergers or sales of
stock or assets, as well as drafting laws related to SOEs.
Their listed subsidiaries function as Independent
Power Producers (IPPs). Each of these Big 5 accounts
for around 10% of national installed capacity, and their
subsidiaries an extra 4% to 5%.
Additionally:
Two other SOEs are also IPP subsidiaries: the Shenhua
Group, which is the largest coal mine operator,
through their subsidiary of the China Shenhua Energy
Company, and China Resources Group, through their
company, China Resources Power Holdings Company
Limited.
Two specialized hydropower companies independent
of the five groups operate the country’s largest
hydropower plants: the Three Gorges Group Company
and the Ertan Hydropower Company.
There are two specialized nuclear companies: the
China Guangdong Nuclear Power Company and the
China National Nuclear Corporation.
Finally, a portion of China’s generation assets consists
of secondary companies and off-grid power plants
owned by industrial enterprises, or sub-provincial
governments
Table 10(9): Electric utilities in China
Big 5
Utilities
Other IPP
Nuclear
Hydro
Secondary companies:
China Guodian
Corporation
China Shenhua
Energy Company
China
Guangdong
Nuclear Power
Group
Three Gorges
Group Company
Shenzhen
Energy Co., Ltd.
Guangzhou
Development
Industry
Naitou
Securities Co., Ltd.
Sichuan MinJiang Sichuan
Hydropower
Leshan Electric
Power
China Power
Investment
Corporation
China Resources
Group
China National
Nuclear
Corporation
The Ertan
Hydropower
Company
Guangdong
Yuedian
Group Co., Ltd.
Chongqing Jiulong
Electric Power
Panjiang Coal and
Electric Power
Group
Yunnan Wenshan Fujian
Electric Power
MingDong
Electric Power
Anhui Province
Energy
Group Co., Ltd.
Chongqing Fuling
Electric Power
Industrial Co., Ltd.
Hunan Huayin
Electric Power
Guangxi Guidong Guizhou
Electric Power
Qianyuan
Power
Sichuan Xichang
Electric Power
Datang group
.
Huaneng group
Shenergy
Hebei Jiantou
Energy
Company Shanghai
Investment Co.,
Ltd.
Shanxi Top Energy
Huadian group
Guangdong
Baolihua New
Energy Stock
Inner Mongolia
Sichuan Mingxing
Mengdian Huaneng Electric Power
Thermal Power
Shenergy Group,
Shanghai.
Shandong
Sichuan Chuantou
Luneng Taishan Energy Stock
Cable
www.csptoday.com
SDIC Huajing Power Sichuan Guangan
Holdings
Aaa Public
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In addition to the Big 5 companies, China Guangdong
Nuclear is quite active in the development of CSP
plants.
9.5. Local Component Supply
This section focuses on the evaluation of the most
important manufacturers and suppliers along the value
chain for the deployment of CSP Technology. Future
developments by these suppliers could drive the
technology to significant price reductions, and therefore
also in the LCOE. However, the industry is waiting until
domestic policy is clarified by central government on
behalf of the NDRC.
Since China has vast thermal knowledge and
experience, the majority of CSP-related components are
already available. The biggest challenge lies in the solar
field. Key components analyzed in this study are:
9.5.1. Steam Generators
Some of the main steam generator manufacturers in
China that could operate in CSP Projects are:
Table 11(9): Main Steam Generator Manufacturers in
China
Nº
Company
1
Livo Equipment Company
2
Jiangsu Taihu Boiler Company
3
Dongfang Boiler Company
4
Xinde Tangshan Boiler group
5
Taihu Boiler Co., Ltd.
6
Changsha Boiler Co., Ltd.
7
Shanghai Boiler Works, Ltd.
Source: European Solar Thermal Electricity Association
Livo Equipment Company has worked in several
projects in the international market related to new
energy power equipment, especially in CSP steam
generators, environmental equipment, nuclear
power equipment and complete sets of engineering
equipment, as well as design, manufacturing and
technology services. The company focuses its activity
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on steam generators and all kinds of heat exchangers
and boilers. Since 2007, Livo has provided over 50 steam
generators, superheaters, economizers, reheaters and
heat exchangers for salt and heat transfer fluid. This
equipment has been installed in projects across Spain,
Turkey, India and China, such as PS10/20, Hilo, Solnova,
Godawari, Cargo and CNPEC testing project.
Jiangsu Taihu Boiler Company has worked as a
component supplier for the 1 MW Dahan Power Plant in
Badaling, Beijing, providing boiler and thermal storage
devices.
Dongfang Boiler Company signed an HTF system
equipment procurement contract with Tianwei
(Chengdu) Solar Thermal Power Development
Company), for Datang Tianwei (a mining area in Gansu
Province, JiaYuGuan), a solar thermal test 1.5 MW
demonstration project. Dongfang Boiler CSP generation
equipment and other products have been included in
the strategic new products in Sichuan Province.
Xinde Boiler Company won the auxiliary boiler purchase
of CGNPC Delingha CSP demonstration project. On
March 2013, in the purchase of auxiliary boiler in
new-build 1500 kW steam turbine generator system
for CGNPC Delingha (phase I) CSP demo project, Xinde
Tangshan Boiler Group quoted RMB 1,572,000 to be
recommended for the winning candidate units.
Taihu Boiler Company is another steam generator
provider, with activities in the manufacturing and
R&D of different kinds of boilers. The company has
participated in the Beijing Yanqing 1 MW tower plant in
Badaling.
Changsha Boiler Company works in the development,
production, installation, and other engineering
services of boilers, pressure vessels, and environmental
protection equipment; as a steam generator provider,
the company has worked on the Qinghai, Delingha
50 MW Tower project.
Shanghai Boiler Works has collaborations with Alstom
and Foster Wheeler and is a branch of the equipment
manufacture division of Shanghai Electric Group, which
is currently working on the Qinghai, Golmud plant.
As for international companies, Aalborg is promoting
their business in China, with the design and delivery
of steam generators for CSP plants in the utility field,
CSP module systems for industrial projects and gas and
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oil-fired steam boilers, as well as engineering services.
9.5.2. Turbines
At present, the main domestic turbine manufacturers
related to the CSP industry are Harbin Turbine,
Dongfang Electric Group Steam, and Hangzhou Steam
Turbine, in addition to other companies working in CSP
turbine research and development.
The main power block manufacturers in China that are
targeting the CSP industry are:
Table 12(9): Turbine Manufacturers in China
Nº
Company
1
Dongfang Electric Group
2
Shanghai Electric Group
3
Harbin Turbine Co., Ltd.
4
Hangzhou Steam Turbine
5
Nanjing Steam Turbine Co., Ltd.
6
Xian Aero-Engine PLC
and passed the 50 MW Chinese standard review in
June 2012, with completely independent intellectual
property rights: the first at domestic level. It has also
reached the international advanced level. At present,
Harbin Steam Turbine has been working on analysis and
further optimization of the steam turbine in order to
make it more adaptable for CSP plants.
In the international market, Harbin Turbine Company is
currently designing Argentina’s Salta 20 MW Parabolic
Trough project.
Hangzhou Steam Turbine Company has supplied
components for the Dahan Tower project in Beijing,
providing the turbine for the 1 MW Power Tower in
Badaling. The equipment will also be part of SUPCON
Delingha, Qinghai (phase I) 10 MW project.
Xian Aero-Engine is a manufacturing and R&D base for
large- and medium-sized military and civilian aircraft
engines, and has developed a gas-turbine production
base. They are developing turbines for 100 MW projects.
International CSP-turbine providers such as Siemens,
MAN Diesel & Turbo and Alstom are also promoting
their businesses in China, since they already have a local
presence.
Source: European Solar Thermal Electricity Association
Dongfang Electric is a power-generation equipment
company involved in R&D, design, manufacture, and
power plant project EPC. Currently, they are working on
the HTF system equipment procurement contract for
the 1.5 MW project in Gansu.
Shanghai Electric Group is as a supplier for the entire
chain of equipment for EPC projects, and provides a
comprehensive service for modern equipment. They
have already created a CSP division and the company is
currently working in the design, manufacture, and O&M
of the Qinghai, Golmud 100 MW Plant. For equipment
manufacturing, the company has a joint venture with
Siemens.
Harbin Turbine Company, a subsidiary of Harbin Electric
Corporation, is a large-scale state-owned enterprise
in China that designs and manufactures large-sized
turbines, nuclear turbines, industrial steam turbines,
marine steam turbines and gas turbines.
9.5.3. Pumps
These products are commonly used in other industries
in China, so there is no major difference for CSP
applications.
Big companies are already established in the domestic
market, such as Danfoss, VELAN and KSB. International
CSP pump providers such as Alfa Laval Group, Sulzer
Pumps and FRIATEC AG are also involved in commercial
activities in China.
In addition, Sulzer (Dalian) Pumps & Compressors
Ltd. - a joint venture between Swiss Sulzer Technology
Company and Dalian Danai Pumps Ltd. - specializes
in the manufacture of various industrial pumps with
power generation between them.
Other important pump manufacturers in China include:
Harbin Steam Turbine’s factory has actively undertaken
research and development for special CSP turbines,
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Table 13(9): Pump Manufacturers in China
Nº Company
1
Shanghai Liancheng (Group) Co., Ltd.
2
Sanlian Pump Company
3
Ningbo JT Machinery Co., Ltd.
4
Shanghai Suoto Pump Industrial Co., Ltd.
5
Pacific Pump Group Co., Ltd.
6
Taizhou Yangchun Electric Motor Co., Ltd.
7
Zhejiang Kaicheng Pump Valve Co., Ltd.
8
Shanghai Pacific Pump Manufacture (Group) Co.,
Ltd.
9
Shanghai Aoli Pump Manufacture Co., Ltd.
10
Taizhou Yuanle Pump Co., Ltd.
Valves
Regarding the valves industry in China, many companies
provide a range of products for the CSP industry, as
shown in the table 14(9):
Table 14(9): Valve Manufacturers in China by Industry
Metallurgy
Nuclear Power
Air Conditioning
Petrochemical
Jiangsu Shentong Valve
Co., Ltd.
Jiangsu Shentong Valve
Co.
Zhejiang Sanhua Co., Ltd.
Neway Valve (Suzhou)
Co., Ltd
Shijiazhuang No.1 Valve
Company Ltd
Dalian DV Valve Co., Ltd
Zhejiang Dunan Artificial
Liangjing Group Valve
Environmental Equipment Co., Co., Ltd
Ltd
Shijiazhuang Sanhuan
Valve Co
Wujiang Dongwu
Machine Co., Ltd.
www.csptoday.com
Lanzhou High Pressure
Valve Co., Ltd
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In the metallurgy valve field, Jiangsu Shentong Valve
Co., Ltd., Shijiazhuang No.1 Valve Company Ltd., and
Shijiazhuang Sanhuan Valve Co., Ltd. are the major
manufacturers in China.
For nuclear power valves, the Chinese nuclear-power
valve market is predominantly occupied by foreign
manufacturers, such as KSB and VELAN. Competitive
domestic players include Jiangsu Shentong Valve Co.,
Ltd., Dalian DV Valve Co., Ltd. and Wujiang Dongwu
Machine Co., Ltd.
CNNC SUFA Technology Industry Co., Ltd. mainly
produces nuclear power valves, nuclear chemistry
valves and other special valves.
In the air conditioning valve field, Zhejiang Sanhua
Co., Ltd. and Zhejiang Dun’an Artificial Environmental
Equipment Co., Ltd. dominate approximately 70% of
the global market.
The petrochemical industry is the largest valve
consumer in China. The home-made general valves can
basically meet the needs of petrochemical production,
but some special valves would still depend on imports.
The major players in this field are Neway Valve (Suzhou)
Co., Ltd., Liangjing Group Valve Co., Ltd. and Lanzhou
High Pressure Valve Co., Ltd.
9.5.5. Receiver Tubes
Internationally, receiver tubes companies Schott Solar
and Siemens dominate the heat collector elements
(HCE) market for parabolic trough technology.
However, China is currently developing a sizeable
CSP industry, especially in receivers - one of the most
important elements of the solar field. In table 15(9), we
can see a summary of the main receiver manufacturers:
Table 15(9): Receiver Manufacturers in China
Nº Company
1
IEECAS in collaboration with Himin Solar Co., Ltd
2
SUNDA – Beijing Sunda Solar Energy Technology Co., Ltd. in collaboration with
Beijing Solar Energy Research Institute –( BSERI)
3
Huayuan New Energy
4
Linuo Solar Thermal Group Co., Ltd.
5
Sunrain New Energy
6
Huiyin Group
7
Lanzhou Dacheng Technology Co., Ltd.
8
Beijing Tianruixing Solar Thermal Technology Co. Ltd
9
Shenzhen Weizhen Solar Energy Products Co. Ltd
10
Royal Tech. Solar Co. Ltd
11
Hubei Guizu Noble Vacuum Science and Technology Co. Ltd
12
BaySolar CSP Co. Ltd.
Source: European Solar Thermal Electricity Association
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Commercially, companies such as Himin, Huiyin, Beijing
TRX, Lanzhou Dacheng Technology and Royal Tech are
all very active in domestic and international markets.
Solutia have local cooperation activities in order to
commercialize their product with Royal Tech’s receivers.
Table 16(9): Heat Transfer Fluid Providers in China
Himin Solar is located in solar valley in Dezhou city,
Shandong Province in China where they are also
developing a 2.5 MW Fresnel plant. Their headquarters
covers an area of 2 million square meters. Himin
works as a local and international supplier of CSP core
components, absorber tubes, Fresnel receivers and
parabolic trough receivers.
Sunda is working in China as Receiver R&D and
Manufacturer with some parabolic trough pilot projects
in Hebei, Langfang, 200 kW, Beijing 12 m trough, and
Hunan Yuanling 200 kW PT. Also it has developed a pilot
project in Korea Gwangju.
Huayuan New Energy has worked as Receiver R&D and
Manufacturer in Xinjiang province, Turpan city for a 180
kW pilot project that was planned to be enlarged.
Huiyin Group currently owns and operates a 10,000
square meter site specifically for HCE production in
Wendeng, Weihai, in China, Shandong province. Huiyin
has successfully concluded tests on its new HCE in
Spain at Plataforma Solar de Almeria (PSA) and has
obtained ISO 14000 and ISO 9001 certificates from TUV.
Lanzhou Dacheng Technology has constructed a
research and development base in Gansu province
where it has developed a Receiver R&D and
Manufacturer 200 kW parabolic trough and Linear
Fresnel projects and is providing some tubes in the
Delingha, Qinghai project.
Royal Tech Solar Co., which works in the manufacture
and R&D of receivers, has designed, produced and built
a 100-meter trough loop in Jiangsu province, and a
600-meter test loop in Inner Mongolia, using VP-1 as
heat transfer fluid in temperature cycle testing.
Nº
Company
1
HUB Chemical Limited Co., Ltd.
2
Shanghai Long Star Chemical Co., Ltd
3
Shenzhen Enesoon Technology Co., Ltd
Regarding the domestic market, new players have
emerged, such as HUB Chemical Limited, a manufacturer of fine chemicals, heat transfer fluids and industrial
lubricants. They offer products for the CSP industry, such
as biphenyl, diphenyl oxide (DPO) and heat transfer fluid
of many kinds, including hydrogenated terphenyl and
another for 400°C parabolic trough systems. HUB also
provides a wide range of industrial lubrication solutions
including hydraulic fluids, metal working fluids, vacuum
pump fluids, air compressor oil and many other types.
Shanghai Long Star Chemical Co., Ltd is a professional
supplier of HTF and hot oil furnace cleaning agent. In
the trough CSP power generation and in the current
application of oil, such as biphenyl HTF, the company
can provide SCHULTZ S740 products.
Shenzhen Enesoon technology has got licenses in
Shexian, Hebei province for the production base of core
material and HTF, for solar-thermal power generation,
such as hydrogenated terphenyl and biphenyl.
9.5.7. Collector frames
In the field of collector frames, Himin Solar Co., as well
as other receiver suppliers, can provide the frames/
structures for the absorber tube. They have provided
the trough collector structure in some of the Beijing
pilot projects in Badaling.
Baysolar, a company that has PV developments in
Europe and the US, has acquired financing from a
Chinese investment company in Sichuan for the
construction of a CSP evacuated tube factory in
Mianyang.
9.5.6. Heat Transfer Fluid (HTF)
The main international HTF providers, Solutia and
Dow Chemical Company, with offices in Suzhou and
Shanghai respectively, both have a presence in China.
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Table 17(9): Collector Frame Manufacturers in China
Nº
Company
1
Beijing Jingcheng Cailong Steel Structure
Co., Ltd.
2
Jiangsu Henglida Machine Co., Ltd.
3
Himin Solar Co., Ltd
4
Baotou Hydraulic Mechanical Plant
Beijing Jingcheng Cailong Steel Structure mainly
engages in steel structure technology development,
production, and installation. Within the CSP industry,
they have worked in support structure manufacture and
installation for the Beijing parabolic trough Badaling
project and in Guangdong at the Guangzhou Sun
Yat-sen Institute for a pilot project.
Jiangsu Henglida specializes in producing hydraulic
series complete equipment sets. The main products
are the Hydraulic push rod series, hydraulic tool series,
electromagnetic valve series, oil cylinder series, etc.
Baotou Hydraulic specializes in hydraulic machine
design and manufacture. Their main products are the
hydraulic cylinder, lubrication and pneumatic systems,
and a dedicated set of non-standard equipment.
9.5.8. Raw Material Availability
CSP plant construction requires commodity type
materials. The main raw materials needed for CSP to be
analyzed in this study are:
Steel
Glass
Concrete
Molten salt
9.5.8.1. Steel
Within the CSP Industry, steel is mainly used for the
parabolic trough collector in the solar collector element
support structure, but also in the support structure
of the mirrors in the tower technology. Some other
applications include piping, valves, pumps, and tanks.
Key raw materials needed in steelmaking are iron ore
and coal, although other elements such as limestone
and recycled steel are used. As mentioned previously in
this report, there is an adequate supply of coal and iron
in the northern part of the country.
In terms of crude steel production, China advanced
from representing 20% of the market share in 2002 to
becoming the major market in the world, with 46% in
2012, producing 1,547 million tons. China also emerged
as global leader for steel exports and ranked sixth for
imports in 2012. The domestic steel price is in the range
of 3,000 Yuan (US$ 480) to 3,500 Yuan per ton.
Table 18(9): China Steel Exports and Imports (2012)
Country steel exports
2012
Mt
Country steel imports
2012
Mt
China
54.8
US
31.5
EU
47.1
EU
29.5
Japan
41.5
Germany
22.9
South Korea
30.2
South Korea
20.4
Russia
26.7
Thailand
15.2
Germany
26
China
14.2
Ukraine
24.1
Italy
13.9
Turkey
18.7
France
13.2
Italy
18.3
Indonesia
12.2
France
14.6
Turkey
11.5
Source: World Steel Association
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The main companies that produce steel are shown in
table 19(9). They are ordered by production amount
in million tons. Chinese companies are highlighted in
yellow:
Table 19(9): Main Steel Companies in China by Production (2012).*
World
Ranking
World Producing
Companies
Production (Mt)
Chinese
Ranking
China Producing
Companies
1
Arcelor Mittal
93.6
1
Hebei steel group
2
Nippon Steel
47.9
2
Bao steel Group
3
Hebei Group
42.8
3
Wuhan steel Group
4
Baosteel Group
42.7
4
Jiangsu Shagang Group
5
POSCO
39.9
5
Shougang Group
6
Wuhan Group
36.4
6
Anshan iron and steel
group
7
Jiangsu Shagang group
32.3
7
Xinxing Cathay
International
8
Shougang Group
31.4
8
Taiyuan steel
9
JFE
30.4
9
Shandong steel
10
Ansteel Group
30.2
10
Tianjin Pipe
* Chinese companies are highlighted in yellow
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9.5.8.2. Glass
With the rapid development of China’s economy, the
glass industry is also growing. China is a major producer
of glass, and the output of flat glass has ranked first
worldwide for 20 consecutive years, accounting for over
50% of the global market.
By the end of 2011, there were 3,344 glass and glass
product manufacturing enterprises in China. The total
asset of the industry was CNY 510.59 billion. The main
companies involved in the manufacturing of glass
products in the country are:
Table 20(9): Top 10 Chinese Glass Manufacturers
(2012-2013)
mirrors for all the technologies available in CSP. Their
production line covers power trough mirror, power
tower mirror, Fresnel and power dish mirror.
Currently, Taiwan Glass’ tower mirror has passed the
DLR agency inspection certification, and trough mirror
inspection work is still in progress. In terms of positive
market response, most of the heliostat in Supcon
Delingha project (phase one) will be produced by
Taiwan Glass.
Table 21(9): CSP Mirror Manufacturers in China
Nº
Company
1
Shandong Jinjing Technology Co., Ltd.
(Glass)
Nº Company
1
Jiangsu Farun Group Co., Ltd.
2
Lanzhou Blue Sky Float Co., Ltd.(Glass)
2
Taiwan Glass Group
3
Zhejiang Daming Glass Co., Ltd.
3
China Glass Holdings Limited
4
Rayspower New Energy Co., Ltd.
4
CSG Holding Co., Ltd.
5
Taiwan Glass Group
5
Zhejiang Glass Company Limited
6
Beijing TeraSolar Photothermal
Technologies Co. Ltd
6
Xinyi Glass Holdings Limited
7
7
Jinjing Science & Technology Stock Co., Ltd.
8
Fuyao Glass Group Industries Co., Ltd.
Dalian Great Ocean New Energy
Development Co. Ltd (involved in dish
Stirling)
9
Hebei Shahe Anquan Industry Limited Company
10
Zhuzhou Kibing Group Co., Ltd.
Internationally, the main share of global glass market is
still monopolized by major players such as:
Asahi Glass and Nippon Sheet Glass, Japan
Saint-Gobain, France
Guardian, United States
Rioglass, Spain
The above companies are all participating in the
Chinese CSP industry through their local presence.
Within the domestic CSP industry, Zhejiang Daming
Glass is the major mirror manufacturer and won the
public bidding of CGNPC Delingha test project for
Fresnel CSP reflector, as the only domestic supplier in
this project.
Source: European Solar Thermal Electricity Association
Other companies, such as Lihu Glass Group in Shanxi,
Sinogold New Energy Technology in Beijing, Hebei
Yiyang in Hebei, and some glass manufacturers have
started to invest in CSP mirror production.
8.5.8.3. Concrete
Concrete is an easily available construction material in
China. Construction minerals, such as sand, gravel, clay
and natural stone, are widely available in the country and
are extracted in very large quantities. The price varies
between 300-400 Yuan per m3 depending on the quality.
Some of the most important concrete producers in
China are:
Daming Glass New Energy provides flat and curved
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Table 22(9): Concrete Producers in China by Production
Nº Company
1
China Resources Cement
2
Shanghai Jiangong Construction Material
3
Jidong Concrete
4
China Construction Concrete
5
Jinyu Group
6
Shanghai Jiangong
7
Western Construction Group
8
Jiangsu Weiye
9
Shanghai City Construction
10
Jiangsu Minghe
8.5.8.4. Molten Salt
Figure 8(9): Non-metallic Mineral Resources in China
Source: China Geological Survey (CGS, under the Ministry of Land and Resources)
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The common molten salt in CSP is used as an eutectic
mixture of 60% NaNO3 and 40% KNO3. The price of
molten salt is around 6,000 Yuan per ton. The top three
raw material producing countries/regions of selected
industrial salts are the European Union zone with
around 22%, USA with 20% and China accounting for
around 18 %- totaling 60% of the global production. As
we can see in the map below, the availability of molten
salt is abundant in China, especially in the western and
northern parts of the country.
Major international molten salt players such as the
Norwegian Yara and the Chilean SQM are already in the
Chinese market, SQM with joint venture in Sichuan SQM
Migao Fertilizer Co. Ltd. Other Chinese companies that
would also be able to provide molten salt are:
Table 23(9): Molten Salt Producers in China
Nº Company
1
Tianjin Yuanlong Chemical Industry Co., Ltd.
2
Wentong Group Tianjin Xinyuan Global Trading
Co., Ltd.
3
Xiaxian Yunli Chemicals Co., Ltd.
4
Tianjin Xinyuan Global Trading Ltd.
5
Shenyang Xin Guang Chemical Factory
6
Zouping Changshan Zefeng Fertilizer Co., Ltd.
7
Su Jia Trading Co., Ltd. Zhengzhou
billion tons by 2015, with the goal of controlling
production growth.
China, typically a net coal exporter, became a net coal
importer in 2009 for the first time in over two decades.
Indonesia and Australia are the largest coal exporters
to China, accounting for over 50% of the market share
of imports in 2011. Despite abundant domestic coal,
several factors are contributing to the rise in imports,
including the higher cost of domestic coal, bottlenecks
in transporting domestic coal to power plants, coking
coal resource restraints, and environmental and safety
concerns.
Currently, there is a coal-CSP hybrid project approved,
using parabolic trough technology for the solar plant.
This hybrid plant is going to be developed by Hanas
New Energy Group, with construction Partners such as
North China power engineering and Siemens.
The location of the project is in the province of Ningxia
in Wuzhong city prefecture, Yanchi County in the town
of Gaoshawo. It will be the first coal hybrid demonstration project in Asia, and will see a total investment
of RMB 2,250 million. The plant’s power capacity will be
92.5 MWe, of which 40 MW will be CSP, but the project
is on hold at the moment since the FiT has not been
confirmed yet by the Government.
9.6. Alternative CSP Markets
9.6.1. Coal - ISCC
In 2011, China consumed around 4 billion tons of
coal, representing about half of the world’s total
consumption. More than half of China’s coal is used
for power and heat generation; therefore, coal
consumption generally reflects electricity demand
and industrial growth. Industries such as steel and
construction accounted for 30% of coal use in 2011.
In terms of energy consumption, the 12th Five-Year
Plan (FYP) is expected to provide 11% of the country’s
total energy consumption through non-fossil fuel
energy by 2015, and 15% by 2020, up from 8.3% in
2009, which indicates that the government wants
to reduce fossil fuel energy consumption. As regards
coal, the country’s 12th FYP calls for a production
ceiling of 4.4 billion tons and capacity ceiling of 4.6
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Figure 9(9): Map of Coal Resources in China
 0 – 1,000 Mt
 1,000 – 10,000 Mt
 10,000 – 50,000 Mt
 50,000 – 100,000 Mt
 100,000 – 250,000 Mt
Heilongjiang
Jilin
Liaoning
Ningxia Shaanxi
Hubei
Yunnan
Guangxi
ng
do
ng
a
Gu
n
Hunan
Shanghai
Fuji
a
Guizhou
Jiang
xi
Sichuan
su
Anhui
Henan
ng
Jia
Qinghai
Tibet
ng
do
an
Sh
Zhejiang
Gansu
Inner Mongolia
Hebei
Xinjiang
Hainan
Source: Barlow Jonker Pty Lt, 2003
Figure 10(9): DNI Resources in China
Source: SolarGIS © 2013 GeoModel Solar s.r.o.
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The DNI conditions in the Northern region where coal
deposits are most abundant are not very high. However,
for ISCC plants, like the one being developed by the
Hanas New Energy Group, DNI does not need to be
that substantial. A DNI of ≥2,000kWh/m2/year is usually
needed for standalone CSP plants to be financially
viable. However, with ISCC cost reduction benefits, such
as joint use of equipment, can bring regions with a DNI
of ≥1,700kWh/m2/year (and natural gas resources) into
consideration.
9.6.2. Desalination
The desalination industry is developing quickly in China;
some of the reasons for this momentum are:
that China has the world’s largest development
potential for desalination.
The first batch of regions and companies has been
selected to carry out seawater desalination pilot
projects by the NDRC. The list include the cities of
Shenzhen and Zhoushan, Luxixiang Island in Zhejiang
province, Binhai New Area in Tianjin, Bohai New Area
in Hebei, and several industrial parks and companies.
Among the listed companies that may benefit from
the policy to reach this goal are: the South Huitong
Co., Beijing OriginWater Technology Co., Ltd., Zhejiang
Hailiang Co., Ltd. and Jiangsu Asia-Pacific Light Alloy
Technology Co., Ltd.
The lack of water resources: China is one of the
countries suffering a shortage of water, especially in
the north and northwest regions, coastal cities, and
islands in the north.
The heavy and chemical industries are well-developed
in the coastal region, and the demand for industrial
water is huge.
The price of water and the cost for desalination
are getting closer due to technological challenges,
resulting in an increased urban tap water price.
Although China started its desalination research and
development fifty years ago, it only started to install
desalination systems in 2003, and now has around 40
institutions involved in desalination and more than 600
companies manufacturing related equipment.
In terms of policy, the country announced in its 12th
Five-Year Plan for desalination a target of 2.2 to 2.6
million m3/day of online sea water converted capacity
by 2015, compared with 660,000 cubic meters in 2011.
More than half of the freshwater channeled to isles and
more than 15% of water delivered to coastal factories
will come from the sea by 2015, according to the plan.
The Ministry of Science and Technology and the
National Development and Reform Commission
published the water desalination plan with an
obligatory target stating that 70% to 75% of major
equipment should be made in China. The goal behind
this target is to build the country’s desalination industry,
now mostly in the hands of foreign companies,
which is similar to what previously happened with
the wind industry. Industry analysts estimate that the
development plan will require an investment of around
21 billion Yuan, or US$ 3.35 billion (1 US$ = 6.26 Yuan).
Within the international industry, it is generally believed
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Figure 11(9): Desalination Capacity in Coastal Cities (m3/day) in China (2010)
Dalian:
9,600
Tainjin
227,000
Tsingtao:
46,000
Zhejiang:
95,100
Others:
134,900
Source: Frost and Sullivan, 2011
The first solar-thermal power generation and desalination scientific research base in China has been built
in Lingao, Hainan. The project, constructed by Hainan
Tianneng, uses trough concentrated system, steam
generating system and desalination system to make
demonstration and experimental research. Through the
solar energy water and electricity combined generation
system and energy storage technology, the project aims
to improve the quality of CSP generation output.
Table 24(9): China’s Oil Production, Consumption, and
Import (2011)
9.6.3. Enhanced Oil Recovery
Although there have been no direct CSP-EOR projects
or research in China, it is a field worth discussing as
China is the world’s second-largest consumer and net
importer of oil after the United States. Approximately
19% of China’s energy consumption comes from oil,
with 70% coming from coal (EIA, 2012). According to
the Energy Information Administration (2012), as of
January 2012, China held 20.4 billion barrels of proven
oil reserves - the largest amount in the Asia-Pacific
region.
Source: EIA, 2012
Oil
Million barrels per day in 2011
Production
4.3
Consumption
9.8
Import
5.5
Although China is now the world’s fifth largest oil
producer, the country has been a net oil importer
since 1993. In 2011, more than 50% of China’s crude oil
imports came from the Middle East, mainly Saudi Arabia
and Iran, but also other countries such as Angola and
Russia.
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Figure 12(9): China’s Oil Production and Consumption 1990-2013
Source: EIA, 2012
The Chinese oil market is dominated by four major
national oil companies:
China National Petroleum Corporation (CNPC)
China Petroleum and Chemical Corporation (Sinopec)
China National Offshore Oil Corporation (CNOOC)
China National Chemicals Import and Export Corporation (Sinochem)
The 12th Five-Year Plan explicitly aims to reduce carbon
dioxide emissions and the NDRC has a target reduction
value of 17% by 2015 that varies geographically,
according to province. Enhanced oil recovery (EOR) is
expected to help in achieving this reduction.
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Figure 13(9): Location of China’s Major Oil Fields
Source: EIA, 2012
Figure 14(9): Locations of Known CSP Projects in China
Source: CSP Today Global Tracker, August 2013
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Looking at the current locations of CSP plants in figure
14(9) above, there are CSP plants already underway in
the Jiangsu and Shenghi regions which are home to
some of the largest fields in the country.
EOR in China, it is not beyond possibility that it may be
considered in the future.
Several EOR pilot projects have been implemented in
China, as shown in table 25(9):
Although there are no concrete plans to use CSP for
Table 25(9): EOR Projects Implemented in China
Basin
Year of EOR under operation
Technique
Liaohe
1998
Steam/ Gas Injection
Zhongyuan
2002
Gas Injection
Daqing
2006
Gas Injection
Jilin
2006
Gas Injection
Shengli
2007
Gas Injection
Dagang
2007
Chemical/Gas Injection
Bohai
2009
Gas Injection
Songliao
2009
Gas Injection
Junggar
2009
Gas Injection
In the coming years two EOR projects are going to be
constructed in China:
Dagang Basin: The GreenGen project, located in
Tianjin, will be China’s first commercial-scale Integrated
Gasification Combined Cycle (IGCC) power plant. It will
combine Carbon Capture and Storage (CCS) with EOR
operations. The project has been allocated a budget of
US$ 1 billion and will be developed by seven Chinese
state-owned companies and the US coal magnate
Peabody Energy.
Daqing Basin: The governments of Japan and China
are implementing a project to inject CO2 emitted from
a thermal power plant in China into an oilfield. The
project will be implemented at the Harbin Thermal
Power Plant in Heilongjiang Province. The captured
CO2 will then be transported via a pipeline nearly 100
kilometers to the Daqing Oilfield to be injected and
stored. The project is estimated to cost between US$
216 million and US$ 324 million. Once constructed, it
will be the first case of injecting CO2 from a thermal
power plant into an oilfield in China.
9.7. Market Forecast
With a population of more than 1.3 billion, far exceeding
all other emerging CSP market demographics, China
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faces rapid energy demand growth, as the largest
electricity consumer in the world. With its growing
energy demand, China’s grid is becoming increasingly
strained, and the motivation to use cheap conventional
power is high. To meet future demand, China will need
to add over 1,300 GW to its grid between 2005 and
2030. By the end of the decade, 3,000 MW of CSP power
is expected to be deployed to address China’s desire
to refocus its energy portfolio on more environmentally-friendly technologies. As a result, wind power has
now passed the generation rates of coal and nuclear.
With DNIs ranging from 1,800 to 2,500 kWh/m2/year,
China may not be a country benefiting from the best
solar resource, but considering its population and the
available land for CSP projects (900,000 km2 out of
9,710,000 km2; approximately 10% of land area), the
country could potentially have 5,821 to 8,105 GW of CSP
capacity.
While only 3.7 MW of CSP capacity is currently
in operation in China, the industry is active and
projects are in the works. Indeed, with 60 MW under
construction, 1,700 MW announced, 286.5 MW in
planning, and another 352.5 MW under development,
interest from investors in future CSP deployment
reinforces the country’s commitment towards the 3,000
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MW envisaged by the end of the decade. In addition
to its CSP-specific target, China also expects to have 50
GW of renewable energy delivering power to its grid
by 2020, providing a favorable conjuncture for new
technologies such as CSP. The outlook for China and
its CSP market is certainly promising, with anticipated
capacity forecasted between the targeted 3 GW, up
to 10 GW. Once again, the optimistic scenario is well
aligned with the realizable deployment set forth by the
current announcement, but could very well not be fully
realized if execution is delayed and market momentum
declines. With China’s industrial expertise, however,
its contribution to the reduction of CSP technology
costs could positively affect the bankability of CSP, and
promote deployment globally.
Figure 15(9): Installed CSP Capacity in China Until 2024 (MW)
4,000
3,614
Optimistic
3,500
Conservative
Pessimistic
3,000
2,500
2,000
1,390
1,500
1,000
634
500
0
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Figure 16(9): Cumulative Energy Production in China Until 2024 (TWh)
350
Optimistic
300
Conservative
272
Pessimistic
250
227.2
200.6
200
150
100
50
0
2006
2008
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2010
2012
2014
2016
2018
2020
2022
2024
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Conclusion
China aims to have 1 GW of installed CSP capacity by
2015 and 3 GW by 2020; the target of 1 GW of CSP by
2015 seems over-optimistic considering the current
number of projects under operation and construction.
Although it is more than likely that the 1 GW target
will not be reached by 2015, China is still a promising
market, something which is reflected by the entry
of international players such as BrightSource and
SolarReserve to name a few.
However, there are numerous barriers facing the
development of CSP in China. The low cost of PV, in
addition to the lack of a definitive Feed-in-Tariff for CSP
and the need to upgrade grid infrastructure between
East and West, are major obstacles that need to be
addressed before CSP can realistically gain a foothold
in the market. For this reason, China is ranked as the
seventh most promising market of the eight markets
covered in this report.
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References
Barlow Jonker Pty Lt, now under Wood Mackenzie, Market Research Report, 2003. Available through: <http://www.
woodmacresearch.com/cgi-bin/wmprod/portal/corp/corpPressDetail.jsp?oid=834107>
China Geological Survey, 2013. Available through: <http://en.cgs.gov.cn/> [Accessed August 2013].
CSP Today Global Tracker, 2013. Available through: <http://social.csptoday.com/tracker/projects> [Accessed August
2013].
European Solar Thermal Electricity Association, 2013. Available through <http://www.estelasolar.eu> [Accessed
August 2013].
Frost and Sullivan, Market Research Report, 2011. Available through: <http://www.frost.com/prod/servlet/
frost-home.pag>
National Development and Reform Commission, 2013. Available through: <http://en.ndrc.gov.cn> [Accessed August
2013].
State Grid Corporation of China, 2013. Available through: <http://www.sgcc.com.cn/ywlm/socialresponsiility>
[Accessed August 2013].
U.S. Energy Information Administration, 2012. China. Analysis: Background. Available through: <http://www.eia.gov/
countries/cab.cfm?fips=CH> [Accessed 27 July 2013].
World Steel Association, 2013. Available through: <http://www.worldsteel.org/> [Accessed August 2013].
Acronyms
ACRONYM
DEFINITION
ABC
Agricultural Bank of China
BoC
Bank of China
BOCOM
Bank of Communications
BSERI
Beijing Solar Energy Research Institute
CCB
China Construction Bank
CCS
Carbon Capture and Storage
CNREC
China National Renewable Energy Centre
CGS
China Geological Survey
CNOOC
China National Offshore Oil Corporation
CNPC
China National Petroleum Corporation
CSGC
China Southern Grid Company
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China
DPO
Diphenyl oxide
EIA
Energy Information Administration
EOR
Enhanced Oil Recovery
ESTELA
European Solar Thermal Electricity Association
FIT
Feed in Tariff
HTF
Heat Transfer Fluid
ICBC
Industrial and Commercial Bank of China
IEA
International Energy Agency
IGCC
Integrated Gasification Combined Cycle
IPP
Independent Power Producer
ISCC
Integrated Solar Combined Cycle
JSCB
Joint Stock Commercial Bank
LCOE
Levelized Cost of Electricity
MEP
Ministry of Environmental Protection
MoF
Ministry of Finance
MoST
Ministry of Science and Technology
NDRC
National Development and Reform Commission
NEA
National Energy Administration
NEC
National Energy Commission
PSA
Plataforma Solar de Almeria
SGCC
State Grid Corporation of China
SOCB
State-Owned Commercial Bank
SOE
State Owned Enterprise
SPC
State Power Company of China
WFOE
Wholly Foreign Owned Enterprise
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10
United Arab Emirates
By Marco Poliafico
Contents
List of Figures
299
List of Tables
299
Chapter Summary
301
Country Overview
301
10.1. Electricity Market
303
10.1.1. Electricity Consumption and Demand
304
10.1.2. Grid Transmission
305
10.1.3. Market Structure Diagram
306
10.2. CSP Market
306
10.2.1. Masdar
307
10.2.2. CSP Project Profiles
308
10.2.3. Local Content Requirements
311
10.3. Local CSP Ecosystem
311
10.3.1. Key Government Agencies
312
10.3.2. Independent Water and Power Producers
313
10.3.3. Local Utilities and Transmission Grid Operators
315
10.3.4. Permitting Agencies
316
10.3.5. Local Consultants and R&D Bodies
317
10.3.6. Financial Organizations
318
10.3.7. Developers, EPCs and Engineering companies
319
10.4.1.
322
Supply of Local Components
10.4.2. Raw Material Availability
10.5. Alternative CSP Markets
324
324
10.5.1. Desalination
324
10.5.2. Enhanced Oil Recovery
325
10.6. Market Forecast
326
Conclusion
327
References
328
Acronyms
329
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List of Figures
Figure 1(10): Direct Normal Irradiation in the UAE
302
Figure 2(10): Masdar’s Integrated Business Units
308
Figure 3(10): Location of North East Bab Field, UAE
325
Figure 4(10): DNI Conditions in the UAE
325
Figure 5(10): Installed CSP Capacity in the UAE 2006-2024 (MW)
327
Figure 6(10): CSP Cumulative Energy Production in UAE Until 2024 (TWh)
327
List of Tables
Table 1(10): Drivers and Barriers
303
Table 2(10): UAE CSP Project Portfolio, 2013
309
Table 3(10): Shams 1 Project Overview
309
Table 4(10): Shams 1 Project Details
309
Table 5(10): Ministries and Government Agencies in the UAE
312
Table 6(10): Independent Water and Power Producers in the UAE
314
Table 7(10): Utility Companies in the UAE
315
Table 8(10): Permitting Agencies and Environmental Assessment Agencies in the UAE
316
Table 9(10): Consultants and R&D Bodies Operative in the UAE
318
Table 10(10): Main Financing Institutions and Banks in the UAE
319
Table 11(10): Developers, EPCs and Engineering Companies Operative in the UAE
320
Table 12(10): CSP Components Available Locally in the UAE
322
Table 13(10): CSP Raw Material Suppliers Available in the UAE
324
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Chapter Summary
The United Arab Emirates (UAE) enjoys one of the
highest levels of income per capita in the world,
and unlike other countries in the Middle East and
North Africa, this market is shaped through privately
structured, government-supported organizations and is
open to the entry of new developers. The UAE is ranked
as the eighth most promising CSP market.
The UAE announced investments of more than US$
102.3 billion in renewable energy projects to be
developed by 2020 and has the economic potential to
develop more than 20 GW of solar power generation by
2030. The two largest emirates by area, Abu Dhabi and
Dubai, set an overall generation target from renewables
of 7% by 2020 and 5% by 2030 respectively. The UAE
flagship project is the multi-billion dollar investment
for the development of Masdar, the sustainable city
launched in 2006. Amongst other projects, Masdar
Institute announced a pilot program for developing and
testing solar desalination technologies in 2013.
At present, the UAE does not have a tailored policy
framework and lacks a specific incentive scheme
for renewable energy projects. However, there are
discussions around the possible introduction of
a feed-in-tariff program. No specific local content
requirements have been announced for CSP projects,
but an important business requirement is that 51% of
any new company must be owned by UAE nationals
– with the exception of free zone companies that can
be 100% owned by foreign investors. Furthermore,
lower-than-expected DNI conditions and the potentially
damaging impact of dust on CSP operations could be a
strong deterrent against the market.
Considering the level of water scarcity in the UAE,
CSP technology would be ideal for solar desalination
applications, as up to 90% of the freshwater in the entire
Gulf region is supplied through desalinated seawater.
Not only could solar thermal power provide the
electricity for the process, but waste heat could also be
usable for thermal desalination. Another potential area
for the deployment of CSP technology is the provision
of heating and cooling for buildings and industrial
applications. In addition, enhanced oil recovery (EOR)
represents a promising avenue for CSP developments
due to the existing EOR activities being undertaken in
this market.
Country Overview
United Arab Emirates
Solar Resource (average annual sum of DNI): 2,000 kWh/m²/year
Size:83,600 km²
Population (2012): 8.45 million
GDP per capita (2012): US$ 45,731
Installed power capacity: 30 GW
Annual electricity consumption: 87 TWh
Expected annual electricity demand in 2020:
180 TWh
Electricity mix by installed capacity (2012)
Natural Gas 90%
Oil 10%
Renewables < 1%
Known energy resources
Natural Gas, Oil, Nuclear, Solar Energy
Potential Markets for Industrial CSP Applications
Desalination
Cooling Load for HVAC Systems
Enhanced Oil Recovery
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Figure 1(10): Direct Normal Irradiation in the UAE
Source: SolarGIS © 2013 GeoModel Solar s.r.o
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Table 1(10): Drivers and Barriers
Drivers
Barriers
Increasing electricity demand
Dust and haze affect DNI conditions
Good solar resources
Soft and corrosive soil in parts of the country, such as
Dubai, which may require special heavy steel structures
Displacing oil and gas used for domestic electricity
generation with renewable resources, and freeing up
hydrocarbons for higher value applications and export.
Lack of tailored policy with financing mechanisms and
transparent regulatory framework
Commitment to energy diversification and carbon
footprint reduction
Suitable land is rare and expensive
On-the-ground learning experience from Shams 1
could help in identifying and combating risk for future
CSP developments
Higher price over PV technology and higher consumption of water
Using electricity and waste heat from CSP in future
desalination plants
Difficulty in accessing finance because solar energy is
still perceived as a high-risk investment
Lack of locally skilled human resources and knowledge
base
Electricity Market
The United Arab Emirates (UAE) is a federation of
seven emirates (Abu Dhabi, Ajman, Dubai, Fujairah, Ras
al-Khaimah, Sharjah and Umm al-Quwain) together
enjoying one of the highest levels of income per capita
in the world. Abu Dhabi, the capital city, is the largest –
occupying 85% of the area – and is the richest in terms
of oil resources. Dubai is the second-largest emirate by
area. Together, Dubai and Abu Dhabi form the core of
the country’s economy.
The energy market approach pursued by the UAE
has been different from many other MENA countries,
consisting of privately structured organizations (such
as TAQA and MASDAR) that are supported by the
government. These organizations act as private entities
developing market partnerships with international
stakeholders. To date, only Dubai and Abu Dhabi have
created regulatory bodies for the electricity sector.
The electricity market of the UAE has a complex
structure due to the many stakeholders operating
within it. Starting from the independent regulator, the
Regulation and Supervision Bureau releases licenses
to all companies operating in the country and works
with the Federal Electricity and Water Authority (FEWA),
an independent government body, to oversee the
entire sector. Similarly, the Federal Authority for Nuclear
Regulation (FANR) is the independent government
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body in charge for overseeing the development of the
nuclear sector.
Market bodies in the energy sector operate at an
emirate level. The main two are the Abu Dhabi Water
and Electricity Authority (ADWEA) and the Dubai Water
and Electricity Authority (DEWA). Dubai also has another
government agency, the DSCE (Dubai Supreme Council
of Energy), responsible for all initiatives relating to
the energy sector including generation, transmission
and distribution of electricity for public consumption.
Equivalent market operators in the other emirates are
the Sharjah Electricity and Water Company (SEWA) in
Sharjah, and the Federal Electricity and Water Authority
(FEWA) in the northern Emirates.
These bodies are independent public authorities
wholly owned by the government and are also able to
run research and development projects. An example
of this is the National Water and Energy Research
Center, a subsidiary of ADWEA, which is responsible
for the overall policy of the electricity sector, including
privatization matters, in the emirate of Abu Dhabi.
The generation as well as the desalination capacity is
predominantly provided by Independent Water and
Power Producers (IWPPs) in Abu Dhabi. These projects
are awarded on a Build, Own and Operate (BOO)
business model through long-term Power and Water
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Purchase Agreements (PWPA), typically 20 years. Their
ownership is split between ADWEA (60%) and the
international investor (40%).
In other cases, the authority fully owns the installed
capacity of the emirate in which it operates. For example,
DEWA is an integrated supplier owning and operating
the transmission, distribution and generation – all the
segments of Dubai’s electricity market. This emirate only
recently passed legislation allowing the private sector
to participate in electricity generation, and is shaping its
market on the model adopted by Abu Dhabi.
Energy produced has to be sold to single buyers who in
turn become the sole procurers and sellers of water and
electricity in their emirate. In the case of Abu Dhabi, this
applies to Abu Dhabi Water and Electricity Company
(ADWEC), whereas in the other emirates, the single
buyers are the same – DEWA, SEWA and FEWA. All of
these companies charge the distribution companies
with Bulk Supply Tariffs (BST).
The Abu Dhabi Transmission and Dispatch Company
(TRANSCO) is the government-owned transmission
operator in the emirate of Abu Dhabi. It is a subsidiary
of ADWEA and currently owns excess capacity in
preparation for the future demand growth. Recently,
TRANSCO also become involved in the planning,
development and operation of electricity transmission
networks in the northern emirates.
The other transmission operators are represented by
the same authorities operating in the emirates (DEWA,
SEWA and FEWAL). All of the networks are physically
connected to form the Emirates National Grid (ENG), a
country-wide project launched in 2000 and completed
in 2008. The ENG is owned by different relevant
partners, i.e. ADWEA (40%), DEWA (30%), FEWAL (20%)
and SEWA (10%). The ENG is in turn connected to the
regional GCC grid. The transmission and distribution
network is constantly expanding, particularly around
Dubai, where new developments are continuously built.
The last part of the electricity supply chain is represented by the distribution. DEWA, SEWA and FEWAL
own and manage the distribution networks at municipality level. In Abu Dhabi two companies are operative:
Al Ain Distribution Company (AADC) and Abu Dhabi
Distribution Company (ADDC).
Private investment in conventional power generation
and commercial agreements in the form of PPAs have
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already been employed in both emirates. Respectively,
four and six IPPs are operative in Abu Dhabi and Dubai.
Although the UAE economy has traditionally been
dominated by the oil and gas sector, over the last
decade there has been a strong commitment to
diversify energy resources and now only 60% of the
overall GDP is associated with that sector. Diversification
of economic resources is in fact an integral part of the
Abu Dhabi Government’s 2030 Vision and the wider
UAE Vision 2021; a roadmap for transforming the
emirate into a sustainable and diversified, high valueadded knowledge economy.
As a consequence of these government-led initiatives,
the energy mix is slowly moving away from fossil
fuels. Amongst the main drivers for the change in
energy policy are the risk of exposure to fuel price
changes and the loss of revenue associated with the
internal consumption of fuels that could be otherwise
exported.
Electricity generation in Abu Dhabi is provided by
Abu Dhabi Water & Electricity Company (ADWEC),
which at the same time exports the surplus to the
Northern Emirates. The UAE is also looking at nuclear
power, and the first of four plants should be built by
the Emirates Nuclear Energy Corporation (ENEC) by
2017. An estimated investment of approximately US$20
billion will provide the country with these four nuclear
power facilities by 2020. Totaling an installed capacity
of 5.6 GW, these plants are expected to produce nearly
quarter of the nation’s electricity needs (ENEC, 2011)
10.1.1. Electricity Consumption and Demand
According to a report released by the Kuwait Financial
Centre, power generation capacity in the UAE has
grown at an average rate of 12% per year during the
last five years. Conversely, the growth rate for power
consumption in the same period was approximately
8%. The fact that the installed capacity is growing
at a higher rate than consumption clearly paves the
way for the country to become a net exporter when
the regional GCC power grid becomes operative. This
project, known as the GCC Interconnection Grid, was
agreed at the end of 2001 and commissioned by the
GCC Interconnection Authority (GCCIA).
Energy demand in the UAE grew by approximately 5.2%
in 2011 and on average 9% per year in the last 6 years,
with a peak of almost 23% in 2008. This trend is driven
by both economic and demographic growth. Energy
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demand usually peaks during hot summer days when
the maximum cooling load is needed.
Overall, the consumption in UAE is expected to grow at
a rate of approximately 8.5% per year in the next 5 years
and the bulk of this trend will come from Abu Dhabi,
where demand will grow by 11% per year in the same
time frame. However, ADWEC estimates that electricity
exports to the Northern Emirates will increase by 142%
by 2020. Conversely, Dubai’s consumption growth rate
will be lower (approximately 3.5% per year in the next
decade and 2.5% in the following one).
In the longer term, power consumption is estimated to
increase by more than 100% by 2020. A report produced
by DEWA confirms that the installed capacity increased
by 7% in 2012 alone. In terms of the energy mix, the
use of natural gas is much higher than in other MENA
countries. In fact, the consumption of this resource has
increased to the point that UAE currently imports gas
from Qatar through the Dolphin gas pipeline.
10.1.2. Grid Transmission
Approximately 92% of the UAE population is connected
to the Emirates National Grid (ENG); however, some
industrial plants have not been able to secure sufficient
supply and for this reason had to develop captive
power generation.
In 2012, the efficiency of the electricity transmission grid
improved by approximately 6.9%, and there is a strong
commitment to improve the overall performance of
the system whilst expanding the transmission and
distribution networks. For instance, a report published
by DEWA indicated that in 2012, a 7% increase in the
capacity and efficiency of its electricity transmission
networks was achieved. As a whole, DEWA succeeded
in reducing the percentage of line losses in its electrical
network to 3.49% in 2011 from a level of 6.28% ten years
prior to that.
Various upgrading projects at substations have been
carried out by Alstom, such as the Jebel Ali 400kV GIS
substation and Bukadra & Jafza 400kV GIS substation for
DEWA; Dhaid 220kV GIS substation for ENG; Tawyeen
11kV GIS substation for TRANSCO; Mussafah 400kV
GIS substation and Al Khazna 220 kV in Abu Dhabi for
ADWEA, to mention a few. Other industrial players
active in the region within these types of projects are
ABB and AREVA. The Transmission and Distribution
(T&D) division of AREVA recently won an order worth
approximately US$ 266million for eleven high voltage
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Gas-insulated (GIS) Substations from DEWA. This
commitment to expand the transmission and distribution networks was also reinforced by Saeed Al Tayer,
managing director and chief executive officer at DEWA,
during a recent interview.
In terms of the GCC Interconnection Grid, the project
will be conducted in three phases. The first phase,
which was the largest of all three phases, entailed the
development of the North Grid across Kuwait, Saudi
Arabia, Bahrain and Qatar and was completed in 2009.
The second phase involved the internal connection
among the southern systems (United Arab Emirates
and Oman) and was completed in 2011. Meanwhile, the
third phase of the project will see the interconnection
of the GCC North Grid with the GCC South Grid and
is still under development. With the completion of
the third phase, the entire interconnection would be
accomplished.
During the first two years of operation, the GCC
Interconnection Grid contributed significantly to the
continuity of power flow to the power systems of
the member states. Between July 2009 and the end
of 2010, there were about 250 incidents of sudden
loss of generation units connected to the networks
in various member states, but because of the GCC
interconnection, the systems managed to avoid supply
interruptions (Ebrahim, 2012).
Numerous benefits are anticipated with the
achievement of a common GCC electricity market,
such as increased energy security and reliability,
greater renewable energy penetration, reduced cost
of supply for consumers, and promotion of regional
integration and trade. Equally important is that the
GCC Interconnection Grid will allow private investors to
develop larger projects with access to a wider market,
including not only the GCC, but also other pools, such
as the EJILST (Egypt, Jordan, Iraq, Lebanon, Syria, and
Turkey) and the UCTE (Europe). The availability of a
common market will thus provide opportunity for the
establishment of power plants close to resources, giving
freedom for IPPs and IWPPs to select strategic locations
in a much larger market.
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10.1.3. Market Structure Diagram
Regulation and Supervision Bureau (RSB) +
Federal Electricity and Water Authority (FEWA)
Abu Dhabi
Authority/
Operator
Dubai
ADWEA
Northern
Emirates
Sharjah
DEWA
SEWA
FEWAL
IWPPs
Single Buyer
ADWEC
DEWA
SEWA
FEWAL
Transmission
TRANSCO
DEWA
SEWA
FEWAL
Emeriates National Grid
Distribution
ADDC, AADC
DEWA
SEWA
FEWAL
Customers
10.2. CSP-Specific Policy
The UAE has one of the highest carbon footprints in
the world due to a variety of factors, including the
development of energy-intensive industries, such as
aluminum smelting, and the subsidized price of energy.
The country has a strong commitment to lower carbon
emissions (30% by 2030) through an overall strategy
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that also aims to reduce dependence on fossil fuels. The
steps taken so far are encouraging and have made the
UAE one of the most dynamic markets for renewable
energy technologies in the MENA region. However, the
country has not set any mandatory renewable energy
targets as such.
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The UAE announced investments of more than US$
102.3 billion in renewable energy projects to be
developed by 2020. Both Dubai and Abu Dhabi aim to
achieve targets of between 5% and 7% generation from
renewable resources by 2030.
As is the case in Saudi Arabia, one of the major
drivers for the UAE to produce renewable energy is
to cut down on its domestic consumption of oil and
natural gas. According to the US Energy Information
Administration (EIA), the UAE has the seventh-largest
reserves of crude oil and natural gas in the world.
However, due to increasing levels of domestic
consumption, the UAE is now a net importer of natural
gas. With expectations that the UAE is unlikely to
uncover any more major oil reserves, the country is
increasingly recognizing the importance of renewables
and nuclear technology.
In a press release provided by the Masdar Institute’s Dr.
Steve Griffiths, executive director of Institute Initiatives
and a professor of the Practice in Chemical Engineering,
the UAE has the economic potential to develop more
than 20 GW of solar power generation by 2030. In his
opinion, the UAE could require more than 120 GW
of new installed capacity by 2017 to meet demand,
and appropriate polices need to be implemented to
stimulate the deployment of renewable energy generation technologies. The maximum benefits, according
to local industry experts, would be derived through a
mix of PV and CSP technologies.
In 2012, the Mohammad Bin Rashid Al Maktoum 1
GW Solar Park was launched in Dubai, and is targeting
completion by 2030. This project, requiring an overall
investment of about US$ 3.3 billion, will be developed
by the Dubai Supreme Council of Energy and managed
and operated by DEWA. It is expected that the
project will include 200 MW of PV and 800 MW of CSP
technology. This split, however, has not been officially
announced and is therefore subject to change. The site
selected for this development is a 48 km2 area in the
vicinity of Seih Al Dahal.
Dubai also set up the Dubai Carbon Centre of
Excellence (DCCE) to encourage the development of
strategies for the reduction of carbon emissions and
dependence on fossil fuels. Moreover, as part of the
overall sustainability strategy, the emirate launched
a green building code in 2009, whereas at a federal
level the National Energy Efficiency and Conservation
Programme was launched in 2011.
10.2.1. Masdar
The UAE flagship project is possibly the multi-billion
dollar investment Masdar City, the sustainable
community that will house some 50,000 people when
fully developed. The Masdar initiative is a commercially
driven project launched in 2006 with a commitment
of US$ 15 billion by the Abu Dhabi Government. As a
wholly-owned subsidiary of the state-owned Mubadala
Development Company, Masdar acts as a catalyst for
the economic diversification of the emirate.
The Abu Dhabi Future Energy Company (ADFEC) was
established to oversee the emirate’s initiatives in the
renewable energy sector and achieve an overall generation target of 7% from renewables by 2020. ADFEC
launched the Masdar City project alongside a wide
range of other projects, including a 50 MW PV solar farm
outside of Abu Dhabi; the 100 MW Shams CSP plant
(60% owned by ADFEC) in Madinat Zayed; the 850 kW
Sir Bani Yas Island wind energy project; and the 500 MW
integrated hydrogen and desalination plant and CCS
project which will be the world’s largest hydrogen plant
by 2015. Further plans include 100 MW wind energy
installations to be located close to the Saudi border.
Masdar operates through four integrated units,
including Masdar City.
The Dubai integrated Energy Strategy 2030 was
developed by SEC in 2010. According to this strategy,
Dubai will generate 5% of its energy consumption from
renewables by 2030. In the same time frame, the energy
mix of the emirate will integrate 12% from nuclear
power, 12% from clean coal and 71% from natural gas.
Masdar Clean Energy makes direct investments to
develop and operate a global portfolio of renewable
energy generation projects, including CSP, solar PV and
offshore wind energy. An overview is showcased in
Figure 2(10).
www.csptoday.com
Masdar Institute of Science and Technology (MIST), an
independent R&D institute developed in collaboration
with the Massachusetts Institute of Technology (MIT), is
instrumental to all the technological developments that
will be initiated in the UAE.
Masdar Venture Capital operates via Masdar Clean
Technology Fund (MCTF) and DB Masdar Clean Tech
Fund (DBMCTF), and provides capital to grow a portfolio
of companies.
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Figure 2(10): Masdar’s Integrated Business Units
Masdar Clean
Energy
Masdar City
MASDAR
Masdar Capital
Masdar Institute
of Science and
Technology
In addition, E.ON Masdar Integrated Carbon, a joint
venture between E.ON and Masdar, focuses on reducing
carbon emissions through carbon capture and storage
(CCS), energy efficiency and waste-to-energy projects.
Masdar City acts as a cluster of local companies
operating within an urban area aiming to become
one of the most sustainable cities in the world. Not
only does it host the head office of the International
Renewable Energy Agency (IRENA), but it also carries
out research and development, testing and market
development of clean technologies.
As a free zone, Masdar City offers 100% foreign
ownership with no restrictions on capital movements,
profits or quotas strong IP protection framework and
zero-percent import tariffs. Various facilities are available
for companies, from workstation space in fully equipped
offices for very small businesses to vast offices.
Masdar has already signed up German electronics and
engineering company Siemens, US-based General
Electric, Japan’s Mitsubishi, and South Korea’s SK Group,
and expects to bring in more of the 100-plus companies
already registered with the Masdar Free Zone.
In 2013, Masdar Institute plans to launch a pilot
program for developing and testing solar desalination
technologies. The program will be directed by Masdar
Institute in collaboration with other stakeholders, such
as the Abu Dhabi Water and Electricity Authority, the
emirate’s Environment Agency and the Abu Dhabi
Sewerage Services Company.
www.csptoday.com
Currently, the UAE does not have a tailored policy
framework and lacks a specific incentive scheme for
renewable energy projects. However, there are discussions around the possible introduction of feed-in-tariffs.
10.2.2. CSP Project Profiles
Abu Dhabi’s Shams 1 is currently the largest operational
CSP plant in the world. It extends over an area of
approximately 2.5 km2 and consists of 768 parabolic
trough collectors distributed on 192 rows of loops.
Its construction began in the second half of 2010
and required an investment of around US$ 610.85
million from the 3 partners (Total, 20%, Abengoa, 20%
and Masdar 60%). Shams 1 experienced a number of
difficulties in its founding years, particularly in terms of
dust and lower-than-expected DNI levels.
In the UAE, dust reduces insolation by about 30%, so
the average DNI is only 1,934kWh/m2 per year. Unlike
a typical CSP plant, Shams 1 produces about 18% of
electricity with natural gas. Combining hybridization
and backup, it utilizes two separate burners to help
regulate production and guarantee capacity – especially
in peak and mid-peak periods. As such, Shams 1 project
is making use of natural gas backup in place of storage.
The 1 GW Mohammed Bin Rashid Al Maktoum Solar
Park was initially expected to have an 800 MW capacity
and is located in the emirate of Dubai. However, no
concrete steps towards the development of CSP
projects in Solar Park had been taken at the time of
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publication and CSP Today has since been informed
that this figure is not official and therefore may be
subject to change. It is likely that once the solar
technologies have more of a track record in the region,
the government will make a definite decision on the
allocation towards CSP.
Table 2(10): UAE CSP Project Portfolio, 2013
Title
MWe
Technology
Status
Shams 1
100
Parabolic
Trough
Operation
1 GW Mohammed Bin Rashid Al Maktoum Solar Park
TBC
CSP portion TBC Planning
Table 3(10): Shams 1 Project Overview
Current Status:
Operation
Country:
UAE
Land Area (acres):
741
Gross Capacity (MWe):
100.00
Developers:
Abengoa
Masdar
Total
Technology:
Parabolic Trough
EPC:
Abener
Teyma
Source: CSP Today
Table 4(10): Shams 1 Project Details
Status
Current Status
Operation
Announced (date of first appearance in the press)
01/12/2006
EPC Date Granted
01/05/2010
Construction date - actual starting date
01/07/2010
Actual Commercial Operation Date (COD)
17/03/2013
Technology
Gross Capacity
100.00
MWe or MWth
MWe
Technology
Parabolic Trough
Application
Solar Electricity
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Back-up fuel
Dual: Natural Gas or Diesel
Back-up fuel percentage
18%
Heat Transfer Fluid (HTF)
Synthetic Oil
Net Annual Production - Expected (GWh)
210
Solar Field Inlet Temperature ( C)
302
Solar Field Outlet Temperature (oC)
393
Cooling
Dry
Country
UAE
State/Region
Madinat Zayed
Latitude
23.57
Longitude
53.71917
Solar Field Aperture Area (sq. m)
627,840
Land Area (acres)
741
o
Companies Involved
Developers
Abengoa
Masdar
Total
Developers (Ownership Notes)
Shams Power Company is owned by Masdar (60%),
Abengoa (20%) and Total (20%)
EPC
Abener
Teyma
Utilities
Utility (Off-taker) 1
ADWEC
Utility 1 PPA Currency
UNITED ARAB EMIRATES - DIRHAM
Utility 1 PPA Date
01/01/2010
Incentives
Incentive 1
PPA/Tariff period 25yrs
Investment & Finance
CAPEX (millions)
600
CAPEX Currency
US$
www.csptoday.com
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Financing
BNP Paribas, KfW, Mizuho, National Bank of Abu Dhabi,
Natixis, Sumitomo Mitsui Banking Corporation, The
Bank of Toyko-Mitsubishi, Union National Bank and
WestLB. US$ 600 million Debt Financing. Masdar (60%)
together with Total Abengoa Solar Emirates Investment
Company (40%) formed a Special Purpose Vehicle (SPV)
called Shams Power Company. The SPV holds the equity
of the project (20%), while the remaining share (80%) is
bank financed.
Suppliers
O&M Contractors
Abener O&M, SINI
Heat transfer fluid supplier (HTF)
SOLUTIA
Heat transfer fluid model (HTF)
SOLUTIA THERMINOL
Turbine supplier
MAN
Steam Generator Supplier
Foster Wheeler
Mirror supplier PT 1
Flabeg
Mirror model PT 1
Flabeg RP- 3
Receiver tubes supplier PT 1
Schott
Receiver tubes model PT 1
Schott PTR 70 receiver
Solar collector frame supplier PT
Abengoa Solar
Solar collector frame model PT
Abengoa Solar ASTRO
Suppliers – Information
Suppliers (Air cooled condenser): GEA Power Cooling
Safety valves supplied by Leser.
Additional Info
This project achieved financial close in March 2011.
Power is exported at 220 kV. This project has made use
of 258,048 parabolic trough mirrors, 192 solar collector
assembly loops with eight solar collector assemblies
per loop, 768 solar collector assembly units and 27,648
absorber pipes.
Source: CSP Today Global Tracker, August 2013
10.2.3. Local Content Requirements
At the time of writing this report, there were no specific
local content requirements for CSP power plant projects
and there no suggestions that such measures would be
introduced in the near future. However, an important
business requirement is that 51% of any new company
is owned by UAE nationals, according to the UAE’s
Commercial Companies Law 1984 - “the Companies Law”.
will be pursued in the power sector by 2015, both in
renewable and non-renewable technologies. There is
also a good business case for renewable energy projects
because of the revenue gained from fossil fuels exports.
Furthermore, the development of CSP technology
offers the opportunity to build up a local industry in the
country with consequent positive effects in terms of job
creation and retained know-how.
10.3. Local CSP Ecosystem
In an interview with CSP Today, general manager of
Shams Power Company, Yousif Ahmed Al-Ali, shared his
point of view indicating that there is already a sizable
CSP ecosystem in the UAE, stemming largely from
The UAE is one of the most attractive power markets
in the MENA region for international investors. It is
expected that more than US$ 100 billion of investments
www.csptoday.com
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the construction of the Shams 1 CSP plant. Although
Masdar opted for parabolic trough technology for
Shams 1, as long as CSP technologies can prove their
operational viability and bankability, be it parabolic
trough, solar tower, linear Fresnel or dish Stirling, the
UAE market will be open for them. “Given the UAE’s
available land and abundant solar potential, there is
room for other CSP technologies in the region, as long
as they are proven, scalable and bankable. CSP offers
base-load generation capacity and the potential for
large-scale energy storage, which both help stabilize
the grid,” Al-Ali highlights.
Philip Moss, managing Partner at Mana Ventures,
an international clean energy investment firm
headquartered at Masdar City, argues that the lack
of a comprehensive framework able to support the
development of renewable power projects is one of
the major challenges for any renewable energy player
approaching the local CSP market. Being a very new
market, it requires a good amount of commitment
for the identification the right partners and the most
appropriate way to gain engagement at government
level. From his point of view he sees the UAE market as
very similar to the Saudi one. However, he recognizes
that the UAE has already begun working on the
development of renewable energy projects, so the
government has worked through the issues to a greater
degree than they have in Saudi Arabia to date.
On the other hand, Moss highlights the potential
competition of the CSP industry with PV technology, due
to PV’s lower CAPEX and shorter lead-time needed for
development. This aspect could in turn create another
critical issue for CSP projects: in comparison, they appear
less bankable than PV plants and therefore may need
some financial support. In Moss’s view, hybrid plants
combining natural gas and CSP technology are the most
likely way forward in the UAE in the medium term.
10. 3.1. Key Government Agencies
UAE government entities play a major role in the
conventional and renewable energy markets, as large
national corporations as well as utilities in the sector
are mostly government owned or backed, such as Abu
Dhabi National Oil Company, Masdar, DEWA, and Dubai
Supreme Council.
Understanding the functions and responsibilities of
these government bodies is therefore essential for
successful operation within the UAE market. Table 5(10)
outlines the UAE ministries and government agencies
that are directly or indirectly involved in the country’s
renewable energy market.
Table 5(10): Ministries and Government Agencies in the UAE
Previous renewable energy programs (if
applicable)
Name
Roles and Responsibilities
Dubai Supreme Council of
Energy (DSCE)
Oversees planning of Dubai’s energy sector.
Organizes the rights and duties of energy
service providers. Manages pricing to influence
Initiated and funding the 1 GW Mohammed Bin
community consumption behavior. Identifies and
Rashid Al Maktoum Solar Park.
drives policies and regulations. Aims to diversify
fuel mix by adding solar, nuclear and other
renewables.
Executive Affairs Authority Abu Dhabi
A government agency that provides strategic
policy advice to the Chairman of Abu Dhabi
Executive Council, His Highness Sheikh
Mohamed bin Zayed Al Nahyan, Crown Prince
of Abu Dhabi, across all portfolios of the
government.
www.csptoday.com
The Executive Authority is divided into five
advisory units. One of them is the Economic and
Energy Affairs, which established the Interagency
Working Group on Energy. This group is tasked
with formulating a comprehensive energy
strategy in the areas of power generation and
water supply.
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Fully-owned subsidiary of Mubadala
Development Company. Seeks to position Abu
Dhabi as a global hub for research and development activities in the new energy sector and
to achieve economic diversification.
Owns 60% in Shams 1 CSP Plant. Plans to build
desalination plants operated by renewable
energy at commercial scale in Abu Dhabi.
Launched the 3.5-year long pilot program to test
and develop advanced desalination technologies
using renewable energy, on which construction
is projected to begin by 2016.
Ministry of Energy (MoE)
Coordinates and represents petroleum,
electricity, minerals and water affairs.
The MoE is currently working on creating a
strategy for an integrated energy policy that
includes renewables, nuclear, and hydrocarbons,
with the aim of diversifying the country’s energy
mix.
Ministry of Environment and
Water (MoEW)
Works on the integrated management of the
environmental ecosystem and natural resources
to realize a green economy. Offers all forms of
support to custom departments in the country
to help them perform their duties.
The MoEW, in cooperation with Zayed
International Prize for the Environment, launched
a US$ 272,250 Emirates Appreciation Prize for
the Environment, to stimulate environmentally
conscious initiatives in the country.
Ministry of Foreign Affairs
(MoFA) - Directorate of
Energy & Climate Change
(DECC)
The DECC within the MoFA liaises with IRENA,
represents the UAE in international negotiations,
and supports the national climate change
strategy.
DECC is facilitating the UAE’s engagement in
IRENA’s work program. For instance, in linking
IRENA to the Clean Energy Ministerial initiative
on solar and wind energy mapping, in which the
UAE has an active role.
Mubadala Development
Company
Advancing the development, commercialization
and deployment of renewable energy on a
national and global level. Provides a test bed
for the world to develop commercially viable
energy technologies. Building Masdar City, the
zero-carbon, zero-waste city being built in Abu
Dhabi.
Established Masdar City, Madar PV, and Shams1.
Outside of the UAE, Mubadala’s renewable assets
include Torresol Energy in Spain and the London
Array – one of the biggest offshore wind power
plants in the UK.
Municipality of Abu Dhabi
Responsible for developing the environment and
infrastructure in the emirate of Abu Dhabi.
Implemented a solar PV project in its head office
producing electricity at a rate of 100 kW/hour.
Sponsored a national initiative to deploy solarpowered recycling containers.
Masdar
10.3.2. Independent Water and Power Producers
Table 6(10) provides an overview of the independent
power and water producers operating in the UAE.
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Table 6(10): Independent Water and Power Producers in the UAE
Name
Roles and Responsibilities
Previous renewable energy programs (if
applicable)
Abu Dhabi National Energy
Company (TAQA)
Independent power producer and majority
owner of the facilities that provide 98% of Abu
Dhabi’s water and electricity requirements.
TAQA’s Energy Solutions division is dedicated to
alternative and technology-driven energy initiatives for long-term efficient energy production
and generation.
TAQA is currently implementing a pilot project
in Abu Dhabi to use solar energy for air-conditioning systems using concentrated solar panels
called Chromasun Micro-Concentrators. Joined
Abu Dhabi Sustainability Group in 2012.
Arabian Power Company
(APC)
APC was established to purchase and rehabilitate
Abu Dhabi’s Umm Al Nar Power and Desalination
Plant and build additional electricity and water
production capacity. APC is a special purpose
vehicle established by ADWEA, International
Power PLC, Tokyo Electric Power Company, and
Mitsui & Co. Ltd.
Emirates CMS Power
Company (ECPC)
ECPC was established to build, own and operate
the Al Taweelah A2 combined cycle power and
desalination plant in the emirate of Abu Dhabi.
ECPC’s Taweelah A2 Plant includes three heat
recovery steam generators. The low-pressure
steam generation is achieved by recovering
waste heat using heat re-claimers.
Emirates SembCorp Water &
Power Company (ESWPC)
Established Fujairah F1 IWPP plant located at
Qidfa near the emirate Fujairah, on the Gulf of
Oman coast.
Fujairah Asia Power
Company
Established F2 plant as a new IWPP at Qidfa, near
the emirate of Fujairah, on the Gulf of Oman
coast (adjacent to ADWEA Fujairah F1 plant).
Gulf Total Tractebel Power
Company (GTTPC)
GTTPC was established to purchase and rehabilitate the Taweelah A1 Plant in the emirate of Abu
Dhabi, from the capacity of 221.25 MW / 28.4
MGD to its ultimate capacity of 1350 MW / 84
MGD on a build, own and operate basis.
Established the Shuweihat 1 IWPP plant located
Shuweihat CMS International
at Jebel Dhana, near Shuweihat, 250 Km west of
Power Company (SCIPCO)
the city of Abu Dhabi.
TAPCO was established to purchase and rehabilitate the Taweelah B Plant in the Emirate of Abu
Dhabi.
Taweelah Asia Power
Company (TAPCO)
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Utico
A private build-own-operate company for
desalination, specializing in power, potable water,
waste water, chilled water, and steam solutions.
Handles utilities’ development from concept to
design, finance to EPC & operations & maintenance, transmission and distribution to billing
& collection. Utico is a subsidiary of Ghantoot
Group Of companies, a privately owned US$ 2bn
conglomerate.
10.3.3. Local Utilities and Transmission Grid
Operators
Table 7(10): Utility Companies in the UAE
Previous renewable energy programs (if
applicable)
Name
Roles and Responsibilities
Abu Dhabi Transmission
and Dispatch Company
(TRANSCO)
Transmission Grid Operator - subsidiary of Abu
Dhabi Water and Electricity Authority (ADWEA).
Completed the 220kV modification works at
Madinat Zayed, in Abu Dhabi’s Western region,
to facilitate integration of Masdar CSP Shams-1
Solar Plant into the main bulk transmission grid.
Installed a number of solar panels on the roof of
its building.
Abu Dhabi Water and
Electricity Authority (ADWEA)
Produces, transmits and distributes electricity
and water within the emirate of Abu Dhabi. Also
supplies customers in other emirates, through
the construction of ADWEA-owned power
plants, and via export of spare power to other
utility authorities (e.g. DEWA, SEWA, and FEWA)
over the Emirates National Grid.
ADWEA, in collaboration with Masdar, installed
PV panels on the roofs of 11 government and
private building in the emirate of Abu Dhabi.
Dubai Electricity and Water
Authority (DEWA)
Supplies electricity and water to consumers in
the emirate of Dubai.
Currently managing and executing the 1 GW
Mohammed Bin Rashid Al Maktoum Solar Park.
Federal Electricity and Water
Authority (FEWA)
Generates and distributes electricity in the
northern emirates of Ajman, Ras Al Khaimah,
Fujeirah and Umm Al Quwain. Owns & operates
six power plants and three desalination plants
Ras Al Khaimah Electricity
and Water Authority
A newly established government entity that will regulate ownership, management, operation &
maintenance of electricity generation & water
desalination plants, water rights, distribution &
transport network, electricity transmission, and
dispatch network of the electricity & water sector
in the emirate of Ras Al Khaimah.
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Sharjah Electricity and Water
Authority (SEWA)
Supplies electricity, water and natural gas to
consumers in the emirate of Sharjah. Plans and
implements expansions and future projects
to develop electricity, water and natural gas
services.
10.3.4. Permitting Agencies
The permitting phase can be an issue because
renewable energy projects do not follow the same
approval process as other utilities. Furthermore, each
emirate has its own regulatory requirements. Generally,
the key bodies involved in the permitting process
include the municipality, the road and transport
authority, the water and electricity agency, the
environmental department and the master planning
department. Unfortunately, the permitting process can
not only vary from location to location, but also from
one master planning department to another. Table
8(10) outlines a list of permitting and environmental
assessment agencies operating in the UAE.
Table 8(10): Permitting Agencies and Environmental Assessment Agencies in the UAE
Previous renewable energy programs (if
applicable)
Name
Roles and Responsibilities
Department of Municipal
Affairs (DMA)
Contributes to the work of the Executive Council
in planning and managing the infrastructure
& assets; enabling the private sector to play a
role in delivery of municipal services; ensuring
optimization of Abu Dhabi’s resources; and
fostering a transparent regulatory environment
that enhances the emirate’s investment climate.
DMA, in collaboration with the emirate’s
municipalities and International Code Council,
established the Abu Dhabi International Building
Code, which aims to improve the construction
standards of buildings across the emirate.
Dubai Central Laboratory
(DCL)
Provides product conformity assessments.
Perform tests, studies, standards development
and measurement control.
Solar heating systems installed in Dubai must
obtain a certification from Dubai Central
Laboratory, and should come equipped with a
backup system. DCL issued specific rules for the
certification of solar collectors (http://www.dcl.
ae/NR/rdonlyres/5F47C243-9DF0-461D-AA1427CE8FDF3036/0/RDDP212178ICSolarCollectors.
pdf ).
Department of Economic
Development - Dubai (DED)
Organizes and regulates trade and industry
within the emirate of Dubai. To practice business
activity, a company should be registered and
licensed at the DED. This includes renewable
energy companies.
Dubai Municipality (DM)
Plans, designs, builds and manages Dubai’s
municipal infrastructure, facilities and services.
DM is implementing a large-scale solar energy
systems project aimed at saving electricity
consumption. Solar water heaters have already
been installed in residential villas, labor accommodations, hotel buildings, public facilities, and
educational institutions. DM has made solar
water heaters mandatory for all new buildings in
Dubai from March 2012.
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Emirates Authority for
Standardization & Metrology
(ESMA)
Tested and certified Solitaire Solar’s central solar
The sole standardization body in UAE.
water heating systems.
Formulates and issues national standards of the
UAE and adopts international standards. Grants
the Emirates Quality Mark for national products.
Monitors the application of standards adopted,
and provides advice to commercial/industrial
sectors around the constraints of conformity and
quality.
Environment Agency – Abu
Dhabi (EAD)
Develops regulatory controls to protect
the environment. Provides advice to the
Government of Abu Dhabi on environmental
policies & implements awareness initiatives.
Evaluates and registers environmental consultancy offices in Abu Dhabi.
Issues environmental permits or No Objection
Certificates to industrial/ commercial facilities
and development projects prior to commencement of site activities. Carries out necessary
environmental studies to process the permit.
National Center of
Meteorology & Seismology
(NCMS)
Provides meteorological services and seismic
engineering to all sectors in the country,
including synoptic and mesoscale metrology,
atmospheric dynamics, atmospheric chemistry,
precipitation processes and storms.
Assisted with the UAE University-Faculty of
Engineering’s research ‘Modelling Global Solar
Radiation in UAE using Artificial Neural Networks’,
which included weather data on global radiation, temperature, sun hour, wind speed and
humidity.
Regulation and Supervision
Bureau (RSB)
Licenses activities to those who undertake a
‘Regulated Activity’ in the water, wastewater and
electricity sectors, which includes generation,
transmission, distribution, and sale of electricity
and water. Protect the interests of consumers as
to the terms and conditions and price of supply.
10.3.5. Local Consultants and R&D Bodies
One of the weaknesses of the UAE is the lack of a strong
tradition for energy data collection and availability.
However, more robust data sets have been collected in
the last five years, particularly in Abu Dhabi and Dubai.
Alongside this, the cost of renewable energy projects
is coming down because of improved know-how in
resource assessment. For example, a resource-mapping
project has been carried out by Masdar Institute. An
important milestone for the development of R&D
capabilities will be the new 1 GW solar park located
in Dubai. The park will host a research center and
a renewable energy academy to spur continued
innovation.
Table 9(10) shows a list of local consultants and R&D
centers operative in the UAE.
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Table 9(10): Consultants and R&D Bodies Operative in the UAE
Name
Roles and Responsibilities
Previous CSP Projects
Abu Dhabi Sustainability
Group (ADSG)
ADSG is a public-private partnership providing
services to its members from the governmental
and private sectors, to help them take action
to improve sustainability management and
reporting practices.
For 5 years, the ADSG’s events and activities have
provided a platform for debating sustainability
issues and best practices.
Alpin Limited
Masdar City-based clean-tech engineering
consultancy providing master-planning
services, energy modeling and analysis, energy
audits, measurement and verification, daylight
modeling, and renewable energy strategies.
Emirates Solar Industry
Association (ESIA)
A non-profit, non-governmental organization
that promotes solar power in the UAE and MENA
region. Organizes networking opportunities
for solar professionals, produces reports on the
latest technologies and standards, and creates
partnerships and cooperation between the
public and private sectors.
Provides assistance to international companies
looking to establish a presence in the region.
ESIA’s membership doubled to 100 companies
from 2012 to 2013.
International Renewable
Energy Agency (IRENA)
Conducts renewable readiness assessments
to provide policy guidance and facilitates the
sharing of case studies and best practices.
Serves as a repository of policy, technology,
resource and financial knowledge on renewable
energy.
IRENA, along with Masdar, released the UAE
Solar Atlas, freely available online since early
2013 and can be accessed by government
organizations or private enterprises for assessing
the technical feasibility of any proposed
renewable energy project.
Manaar Energy Consulting &
Project Management
Provides investment and strategy advice, market Manaar’s Head of Consulting Robin Mills
operations and analysis, and data analysis and
authored the Sunrise in the Desert study on the
management.
dramatic advance of solar power in the Middle
East, in collaboration with the Emirates Solar
Industry Association. Mills won the ESIA’s Solar
Awards 2012 for Media Personality of the Year.
Masdar Institute for Science
and Technology
Masdar Institute for Science and Technology
is an independent graduate-level university
that focuses on advanced and sustainable
technologies.
10.3.6. Financial Organizations
Perhaps the biggest challenge for CSP in the UAE is the
lack of development track record (with only the Shams 1
project in operation), as well as the risk associated with
CSP investments. It is very hard to make CSP projects
competitive with conventional power plants because
of the subsidized prices for energy from hydrocarbons.
The commercial benchmark is the cost of electricity
generation from natural gas, but there is no doubt that
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Masdar Institute is a subsidiary of Masdar, which
has 60% ownership of the Shams 1 CSP plant in
Abu Dhabi.
its LCOE is lower. At the same time, the fact remains
that subsidizing and burning oil and gas for domestic
consumption instead of exporting it causes the country
significant lost revenue. The fact that the UAE is already
a net importer of natural gas shows the growing threat
of decreasing energy independence. The UAE needs to
find a balance between the risk of CSP and the need the
need for an alternative energy source. For this reason,
it is strategically important that the UAE establishes
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a tailored roadmap that gives long-term stability and
security on returns on investment for Independent
Power Producers and investors. This could take the form
of a power purchase agreement or feed-in-tariff. The
main financing institutions and banks involved with
the UAE’s renewable energy sector are outlined in Table
10(10).
Table 10(10): Main Financing Institutions and Banks in the UAE
Name
Roles and Responsibilities
Previous Renewable Energy Projects
Dubai Supreme Council of
Energy (DSCE)
The DSCE’s Dubai Integrated Energy Strategy
2030 focuses on an integrated approach to
design standards, public infrastructure, finance,
management and maintenance.
Initiated and funding the 1 GW Mohammed Bin
Rashid Al Maktoum Solar Park in Dubai. Studying
several funding options for the project, like
developing a clean energy fund, and plans to
encourage private partnership.
National Bank of Abu Dhabi
(NBAD)
Abu Dhabi-based financial institution operating
since 1968. Offers a range of banking services
including retail, investment and Islamic banking
services.
Contributed to the funding of Shams 1 (100
MW) CSP Plant.
Union National Bank (UNB)
Abu Dhabi-based financial institution established as a Public Joint Stock Company in 1982.
Offers a range of banking services including
retail, investment and Islamic banking services.
It is the only bank that is jointly owned by Abu
Dhabi and Dubai.
Contributed to the funding of Shams 1 (100
MW) CSP Plant.
10.3.7. Developers, EPCs and Engineering
Companies
A particular issue that developers and EPC contractors
will need to solve is the adaptability of CSP plants to
the local environment. The desert and local climate
can be characterized by high concentrations of dust in
the lower layers of the atmosphere, which can in turn
reduce the direct solar irradiance to levels below 2,000
kWh/m2 per year. Another specific issue is the soft and
corrosive nature of the soil in various locations of the
emirates, such as Dubai. This aspect might require some
special preparation of the mounting frames and for all
the civil works on the ground. In terms of development
of the value chain, general manager of Shams Power
Company, Yousif Al-Ali, advises that this could be the
right time to start looking into local partners as this
would pay dividends within a long-term strategy
necessary to operate successfully in the country.
Table 11(10) shows a list of developers and EPC firms
operating in the UAE.
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Table 11(10): Developers, EPCs and Engineering Companies Operative in the UAE
Name
Roles and Responsibilities
Previous Renewable Energy Projects (if
applicable)
Abengoa Solar
Subsidiary of Abengoa. Designs, finances,
constructs and operates solar power stations.
Developed Shams 1 (100 MW) CSP Plant in Abu
Dhabi as the EPC contractor.
Acciona - UAE
In Spain, Acciona Energy owns and built/
Spanish renewable energy operator focusing
on CSP, PV, wind, hydraulic and biomass energy. building six CSP plants: four in Spain and two in
the United States.
Provides engineering and construction, project
development, O&M, and energy sales. Acciona
has proprietary technology in the design,
construction, operation and maintenance of CSP
plants.
Ansaldo Thomassen Gulf L.L.C.
Italian supplier, installer and full-cycle, integrated Potential CSP developer in the UAE.
operator of power generation plants, with
capabilities to build turnkey renewable and
nuclear energy power plants on green field sites
using its own technologies and independent
design, production, construction, commissioning and service resources.
Bechtel Corporation
One of the largest construction, engineering
and project management companies in the
U.S. with an office in Abu Dhabi. Involved in
local projects such as Khalifa Port, Kizad, and
King Fahd Industrial Port. In May 2013, Bechtel
announced it would be establishing a global
center of engineering excellence in the UAE,
initially focused on rail and marine engineering
projects.
Performing project management, EPC, and
startup services for the 400 MW Ivanpah CSP
facility in southeastern California. Provided
engineering, procurement & construction
management services for the Solar Two 10 MW
CSP plant in California’s Mojave Desert during
the late 1990s.
Byrne Looby Partners
International consulting engineering company
working for asset owners and developers,
contractors, and government agencies.
Provides assistance for civil engineering projects
including water, infrastructure, marine, and
energy projects. Operates in the UAE through an
office in Abu Dhabi.
Designed the solar panel frames and foundations for a range of solar farms on agricultural
land throughout the UK, ranging from 5 MW
to 20 MW. Performed operations assessments
of possible foundation and framing solutions
to determine the most economical solution.
Potential CSP developer in the UAE.
Cheqpoints
Carries out turnkey basis MEP works such as
supply & installation of ducting, piping, fittings,
valves, insulation and cladding associated with
solar collectors and cooling towers.
Installed a thermal solar system for Grand Hyatt
Dubai.
Millennium Energy Industries
Turnkey solar solutions provider based in Jordan
with An office in Abu Dhabi.
Installed a solar system for Masdar’s university
project. The system will supply mixed-use
building of solar hot water system using 400m²
of collector area.
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Mubadala Development
Company
An investment and development company
supporting the diversification of the UAE by
investing in key social infrastructure in Abu
Dhabi and worldwide. Owner of Masdar.
Majority developer and owner (60%) of Shams 1
100 MW CSP Plant in Abu Dhabi.
Mulk Enpar Renewable Energy
Provides total solutions to off-grid and
on-grid CSP systems, including site selection,
engineering design, manufacturing, fabrication,
installation and commissioning. Developed its
own, patented CLFR system and solar collector
mirror.
Owns a 200 MW manufacturing facility in
Sharjah, producing all components of Mulk
Enpar Renewable Energy Parabolic Troughs,
with an initial capacity of 200 MW per annum upgradable to 500 MW.
Global Energy
Carries out turnkey energy recovery, solar water
heating and cooling, and steam generation
projects.
Potential CSP developer in the UAE.
Tractebel Engineering
Tractebel’s Renewable division provides turnkey
solutions, from pre-design to commissioning,
including renewable resources assessment,
permitting, engineering studies, procurement, to follow-up of the construction and
management.
With regional offices in Abu Dhabi and Dubai,
Tractebel was contracted for the execution,
engineering, construction, procurement and
management of the Shams 1 CSP Plant.
Total – UAE
A French multinational integrated oil & gas
company with growing focus on alternative
energy projects. Total has had operations in the
UAE since 1939.
Owns 20% in Shams 1 CSP Plant, as part of
a joint venture that constructed, developed,
designed, and will operate and maintain the
power plant.
WorleyParsons
Large Australian provider of project delivery and
consulting services to the resources & energy
sectors and complex process industries. Provides
engineering services and project management
consultancy through two offices in the UAE
(Abu Dhabi & Dubai).
Provided engineering support to the 400 MW
Ivanpah CSP project in California during the
Evaluate and Define phases. Potential CSP
developer in the UAE.
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10. 4.1. Local Component Supply
Table 12(10): CSP Components Available Locally in the UAE
Component
Name of Supplier(s)
Website
Turbines
Alstom Power (7 UAE offices)
www.alstom.com
Ansaldo Thomassen Gulf L.L.C.
www.ansaldoenergia.it
General Electric Solar UAE
www.ge.com/ae
MAN Diesel & Turbo Middle East
www.mandieselturbo.com
Mitsubishi Heavy Industries UAE
http://ae.mhi.co.jp/
Siemens UAE
www.siemens.ae
WorleyParsons (Abu Dhabi & Dubai)
www.worleyparsons.com
Doosan (Abu Dhabi & Dubai)
www.doosan.com
Foster Wheeler International
www.fwc.com
Alfa Laval – UAE
www.alfalaval.com
Apex Power Concepts
www.apexpowerconcepts.com
Ecosmart International
www.ecosmart-intl.com
Microsol International
www.microsolinternational.com
Mitsubishi Heavy Industries UAE
http://ae.mhi.co.jp/
Mitsubishi Heavy Industries UAE
http://ae.mhi.co.jp/
Steam Generators
Pumps
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Valves
Alfa Laval - UAE
www.alfalaval.com
Apollo Industrial Products
www.apollouae.com
Bin Ghalib Energy Enterprises
www.mbee.ae
Emirates Green Electrical and Mechanical Trading www.emiratesgreen.com
Eniprom
www.eniprom.com
Enviro Trading Company
www.etegroup.com
Global Energy
www.globalenergygrp.com/products.php
MAC Valves (supplied through International
Technical Supplies & Services LLC, UAE)
www.macvalves.com
John Crane MEA Regional Office
www.johncrane.com
Midland Trading
www.midland-uae.com/check_valves.html
Technoflow
www.technoflowllc.com
Tracking Systems
Mulk Enpar Renewable Energy
www.mulkre.com
Heat Exchangers
Alfa Laval - UAE
www.alfalaval.com
GEA Ecoflex Middle East FZE
http://www.gea-phe.com/uae/themes/
company/profile/
Gulf Sondex
www.gulfsondex.ae
HRS Funke Heat Exchangers FZCO
www.hrshe.ae
Oilfields Supply Centre Ltd.
www.oscdubai.com
Safario
www.safario.com
Tranter (available through their UAE
Representative Cheqpoints)
www.tranter.com
Mulk Enpar Renewable Energy
www.mulkre.com
Schott Solar (Jebel Ali FZ)
www.schott.com
Alfa Laval - UAE
www.alfalaval.com
Dow Chemical IMEA
www.dow.com/middleeast/locations/
Receiver Tubes / Solar
Collectors
Heat Transfer Fluid
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Air-Cooled Condenser
GEA Ecoflex Middle East FZE
www.gea-phe.com/uae/themes/company/
profile/
SPIG (available through their UAE Representative www.spig-int.com
Cheqpoints)
CSP Mirrors
Mulk Enpar Renewable Energy
10.4.2. Raw Material Availability
While there are materials and sub components that are
easily available in the UAE, like steel, glass and concrete,
there are other that are rare, such as molten salts. Table
13(10) shows some of the main suppliers available in
the UAE for each of the CSP raw materials considered.
Table 13(10): CSP Raw Material Suppliers Available in the
UAE
Material
Supplier
Steel
Taybah Steel FZE
Hadeed Steel Industries
Al Nimr Steel Trading
Star Steel; Emirates Steel
Standard Steel Fabrication
Techno Steel
Mabani Steel
Glass
Gulf Glass Industries
Emirates Glass LLC
RAK Ghani Glass LLC
Intraco UAE Ltd.
Spectrum Glass LLC
Bosco Group
Danway Industries
Quality Aluminium & Glass Co.
Molten Salt
Unavailable
Concrete
Unimix UAE
National Readymix Concrete Company
Grey Matters
Transgulf Readymix Concrete Co.
10.5. Alternative CSP Markets
10.5.1. Desalination
Considering the level of water scarcity, CSP technology
www.csptoday.com
http://www.mulkre.com/
would be ideal for solar desalination applications.
Another area of strong interest for the potential
deployment of CSP technology is the provision of
heating and cooling for buildings and industrial
applications.
The solar powered water desalination sector is on the
priority list for the UAE as it is for all GCC countries,
because being an energy intensive process it would
save hydrocarbon resources that can be exported.
Furthermore, solar desalination is considered the only
sustainable option that could mitigate the environmental impacts associated with this process.
The potential desalination market for CSP technology is
huge, as nearly 90% of the freshwater in the whole Gulf
region is supplied through desalinated seawater. Not
only can solar thermal power provide the electricity for
the process, but the waste heat can be used for thermal
desalination.
The Abu Dhabi-based Masdar is starting a pilot
project this year (2013) with the aim of building a
full-scale renewably powered desalination plant by
2020. This option is also being pursued with the aim
of improving water security. In an interview with CSP
Today, Mohammad Abdelqader El Ramahi, Head of
Asset Management, Technical and Services at Masdar
highlighted the significant interest received from
leading industrial players. At the time of the interview
(April 2013), the bidding process was still going ahead.
The overall project entails two phases, the first being
focused on the further development of a more cost-efficient and environmentally sound desalination process
whereas the second aims to integrate the process with
renewable energy generation technologies. Therefore,
opportunities may exist for CSP developers when
Masdar starts the bidding process for the second phase,
expected to commence in 2016.
In a presentation given in October 2012, at the Fulbright
Academy’s Seventh Annual Conference, Dr. Hassan E.
S. Fath, professor at the Masdar Institute of Science and
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Technology, endorsed the potential of solar thermal
desalination. He explained that the use of solar-driven
desalination with integrated Multi-Stage Flash or
Multiple-Effect Distillation (MSF/MED) technology could
lead to a 30% reduction in the cost of water production.
Dr. Fath also pointed out how, in his opinion, thermal
desalination (MSF/MED) will continue to be the leading
process due to the specific biochemical conditions of
water (the famous “four Hs” of the Gulf water – namely
high temperature, high salinity, high turbidity and high
marine life). At the moment, desalination provides
approximately 75% of the fresh water produced in GCC
countries.
Another potential application for CSP technology is
energy production for cooling loads; namely for air-conditioning systems. Abu Dhabi Water and Electricity
Authority is already showing interest in this field, and an
international company has installed a demonstration
plant of its commercial solar-powered air-conditioning
technology in a building previously served by electric
chillers. The system employs small-scale roof-mounted
systems and makes use of the heat accumulated in
the Heat Transfer Fluid (HTF) to feed the boiler of the
building in a double-effect absorption chiller, which
Figure 3(10): Location of North East Bab Field, UAE
is connected to the air-conditioning system. The
availability of solar energy matches very well with the
peak demand of air-conditioning in buildings; this
application could therefore replace a substantial portion
of the electricity demand in high-temperature countries
like UAE.
10.5.2. Enhanced Oil Recovery
The Abu Dhabi Company for Onshore Oil Operations
(ADCO) initiated an Enhanced Oil Recovery (EOR)
project in November 2009 to test the injection of CO2
into the North-East Bab Field: a complex carbonate
reservoir. Masdar is supplying up to 60 tons of CO2 per
day that are injected into a series of pilot wells. ADCO’s
main objectives for utilizing CO2 EOR are to significantly
increase reserves, sustain long-term production, and
maximize ultimate recovery.
When comparing the location of the Bab Field with the
level of DNI conditions (see figures 3(10) and 4(10)) the
level of the DNI is in the range of 1,750 to 1,900 kWh/
m₂, whereas the range in the Asab and Shah fields is
considerably higher. (See Appendix C for more details
on the technical requirements for EOR).
Figure 4(10): DNI Conditions in the UAE
Source: Energy Information Administration
Source: SolarGIS © 2013 GeoModel Solar s.r.o)
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10.6. Market Forecast
The United Arab Emirates is now operating 100 MW
of Parabolic Trough and has roughly 800 MW of
CSP capacity in planning, depending on the official
announcement to be made by the Dubai Supreme
Council of Energy (DSCE) regarding Mohammed Bin
Rashid Al Maktoum Solar Park. The country considers
renewable energy a critical asset to its future energy
portfolio as it currently holds the highest carbon
footprint per capita in the world, and regarding solar
power, it possesses a moderately favorable DNI of
2,000 kWh/m2/year. Its solar potential is not to be
underestimated, considering it could meet up to 50%
of the country’s energy demand by 2050, according
to the Institute of Solar Research (DLR), in order to
preserve its conventional oil and gas resources. In the
medium-term, the UAE will require drastic measures
and policies to address the 100% increase in power
consumption expected by 2020.
As per Figure 5(10), the outlook on the UAE’s future
CSP capacity is promising, within the same range of
magnitude as the projects currently under development. However, with an average development time
of up to 24 months, it is expected that the CSP industry
kickoff will be slow and precarious leading to 2015,
before a resurge in market growth is expected again.
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Figure 5 (10): Installed CSP capacity in the UAE 2006-2024 (MW)
1,400
1,217
Optimistic
1,200
Conservative
Pessimistic
1,000
800
600
521
400
210
200
0
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2020
2022
2024
Figure 6(10): CSP Cumulative Energy Production in UAE Until 2024 (TWh)
40
Optimistic
35
Conservative
Pessimistic
30
25
20
15
10
5
0
2006
2008
2010
2012
2014
Conclusion
The UAE has one of the highest carbon footprints in the
world due to a variety of factors, but the country has a
strong commitment to reducing carbon emissions (30%
by 2030). Shams 1 is currently the largest plant in the
world and arguably the flagship for CSP in the MENA
region. Further development of CSP technology in the
UAE will can enable the build-up of a local industry
in the country with consequent positive effects in
terms of jobs created and retained know-how, which
is considered one of the most important aspects of
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2016
2018
the economic policy. However, for the time being
CSP suffers the competition with PV technology,
due to the lower CAPEX of solar PV and the relatively
shorter lead-time needed for its development. The
new 1 GW solar park in Dubai and the Masdar City
project represent important potential avenues for R&D
capabilities, upon which to build up future innovation
and industrial development of CSP technology in the
whole region. Thus, whilst the UAE has many positives, it
is likely that it will take time for this market to emerge as
a strong contender in the global CSP market.
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References
Afridi, M. and Baryalay, H., 2012. United Arab Emirates, Afridi & Angell.
Emirates Nuclear Energy Corporation, 2011. Powering the future of the UAE through safe, clean and efficient nuclear
energy. ENEC Official Website. Available through: <http://www.enec.gov.ae/> [Accessed 13 September 2013].
Schoppmeyer, U., 2012. Project Finance for Solar Energy. Presentation at the Solar energy in the Near and Middle
East. Numov Conference, Erfurt.
VV.AA, and Muirhead, J., 2013. CSP Today Quarterly Update. CSP Today.
VV.AA, and Marquez, C., 2012. CSP Market Report 2012-2013. FC Business Intelligence, Groupe Reaction Inc. CSP
Today.
VV.AA, 2013. Business intelligence information and data. Available through: <www.csptoday.com>.
VV.AA, 2013. Global Tracker Database. CSP Today. Available through: < http://social.csptoday.com/tracker/projects>.
VV.AA, 2013. Information and data. Available through: <www.csp-world.com>.
VV.AA 2013. Information and data. Available through: < http://data.un.org>.
VV.AA, 2013. Information and data. Available through: <www.indexmundi.com>.
VV.AA, 2013. Information and data. Available through: <www.populationdata.net>.
VV.AA, 2013. Information and data. Available through: <www.reegle.info>.
VV.AA, 2013. Information and data. Available through: <http://m.gulfnews.com>.
VV.AA, 2013. Information and data. Available through: <www.gizmag.com>.
VV.AA, 2013. Information and data. Available through: <www.solardaily.com>.
VV.AA, 2013. Information and data. Available through: <www.adwec.ae>.
VV.AA, 2013. Information and data. Available through: <www.alstom.com>.
VV.AA, 2013. Information and data. Available through: <www.abb.co.uk>.
VV.AA, 2013. Information and data. Available through: <www.areva.com>.
VV.AA, 2013. Information and data. Available through: <www.greenprophet.com>.
VV.AA, 2013. Information and data. Available through: <www.solardesalinationforum.com>.
VV.AA, 2013. Information and data. Available through: <www.tradingeconomics.com>.
VV.AA, 2012. Renewable Energy Country Attractiveness Indices. Ernst & Young.
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CSP Today Markets Report 2014
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UAE
VV.AA, 2012. Switch on the Lights - Unlocking the UAE’s Solar Potential - United Arab Emirates Solar Survey 2012,
Annual Survey Report. Emirates Solar Industry Association, PricewaterhouseCoopers.
VV.AA, 2012. UAE Energy Outlook - Factors for Global Renewable Energy Roadmaps. Technical presentation at a
conference in Valletta, Malta. Ministry of Foreign Affairs and Directorate of Energy and Climate Change.
VV.AA: Various Authors
Acronyms
ACRONYM
DEFINITION
AADC
Al Ain Distribution Company
ADCO
Abu Dhabi Company for Onshore Oil
ADDC
Abu Dhabi Distribution Company
ADFEC
Abu Dhabi Future Energy Company
ADSG
Abu Dhabi Sustainability Group
ADWEA
Abu Dhabi Water and Electricity Authority
ADWEC
Abu Dhabi Water and Electricity Company
APC
Arabian Power Company
BST
Bulk Supply Tariffs
CCS
Carbon Capture and Storage
DCCE
Dubai Carbon Centre of Excellence
DCL
Dubai Central Laboratory
DECC
Directorate of Energy & Climate Change
DED
Department of Economic Development - Dubai
DEWA
Dubai Electricity and Water Authority
DMA
Department of Municipal Affairs
DSCE
Dubai Supreme Council of Energy
EAD
Environment Agency – Abu Dhabi
ECPC
Emirates CMS Power Company
EIA
Energy Information Administration
ENEC
Emirates Nuclear Energy Corporation
ENG
Emirates National Grid
EOR
Enhanced Oil Recovery
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ESIA
Emirates Solar Industries Association
ESMA
Emirates Authority for Standardisation & Meteorology
ESWPC
Emirates SembCorp Water & Power Company
GTTPC
Gulf Total Tractebel Power Company
FANR
Federal Authority for Nuclear Regulation
FEWA
Federal Electricity and Water Authority
IRENA
International Renewable Energy Agency
MCTF
Masdar Clean Technology Fund
MED
Multiple Effect Distillation
MENA
Middle East and North Africa
MIT
Massachusetts Institute of Technology
MOE
Ministry of Energy
MOEW
Ministry of Environment and Water
MSF
Multi-Stage Flash
NBAD
National Bank of Abu Dhabi
NCMS
National Centre of Meteorology & Seismology
RSB
Regulation and Supervision Bureau
SCIPCO
Shuweihat CMS International Power Company
SEWA
Sharjah Electricity and Water Company
TAPCO
Taweelah Asia Power Company
TAQA
Abu Dhabi National Energy Company
TRANSCO
Transmission and Dispatch Company
UNB
Union National Bank
www.csptoday.com
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Rest of the World
11
Rest of the World
CSP Today Markets Digest (19 Countries)
Contents
List of Tables
331
11.1 Algeria
333
11.2 Australia
335
11.3 Brazil
337
11.4 Egypt
339
11.5 Greece
341
11.6 Israel
343
11.7 Italy
344
11.8 Jordan
346
11.9 Kenya
347
11.10 Kuwait
348
11.12 Mexico
349
11.13 Namibia
350
11.14 Oman
351
11.15 Portugal
352
11.16 Qatar
353
11.17 Spain
354
11.18 Thailand
358
11.19 Tunisia
359
11.20 Turkey
361
Acronyms
363
List of Tables
Table 1(11):Current CSP Projects in Algeria
333
Table 2(11): Current CSP Projects in Australia
335
Table 3(11): Current CSP Projects in Brazil
337
Table 4(11): Current CSP Projects in Egypt
339
Table 5(11): Current CSP Projects in Greece
341
Table 6(11): Current CSP Projects in Israel
343
Table 7(11): Current CSP Projects in Italy
345
Table 8(11): Current CSP Projects in Jordan 346
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Rest of the World
Table 9(11): Current CSP Projects in Kenya
347
Table 10(11): Current CSP Projects in Kuwait
348
Table 11(11): Current CSP Projects in Mexico
349
Table 12(11): Current CSP Projects in Oman
351
Table 13(11): Current CSP Projects in Portugal
352
Table 14(11): Current CSP Projects in Qatar
353
Table 15(11): Current CSP Projects in Spain
354
Table 16(11): Current CSP Projects in Thailand
358
Table 17(11): Current CSP Projects in Tunisia
359
Table 18(11): Current CSP Projects in Turkey
361
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Rest of the World
11.1. Algeria
Algeria – Country Overview
DNI:2, 500 kWh/m²/year
Size:2.38 million km²
Population (2012):38.48 million
GDP per capita (2012):
US$ 3,187
Installed power capacity:
8.1 GW
Annual electricity consumption:
35 TWh
Expected annual electricity demand in 2020:
75-80 TWh
Table 1(11): Current CSP Projects in Algeria
Title
MWe
Technology
Status
State/
Region
Developer
Storage
Capacity
(hours)
Beni Abbes
150
Tower
Planning
Benni Abbes
SPE
TBC
DLR- Algeria
CSP Project
7
Tower
Planning
Boughezoul
BMU/DLR/MESRS
TBC
El Oued
150
Tower
Planning
El Oued
SPE
TBC
Hassi-R’mel
25
Parabolic
Trough
Operation
Hassi-R’mel
Abener/ Abengoa/ Cofides/
New Energy Algeria
Hassi-R’mel II
70
Parabolic
Trough
Planning
Hassi-R’mel
New Energy Algeria
TBC
Meghaïer
70
Parabolic
Trough
Planning
El M’Ghair
New Energy Algeria
TBC
Naâma
70
Parabolic
Trough
Planning
Naama
New Energy Algeria
TBC
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Regulatory frameworks to support renewable energy
in Algeria were first introduced in 2004, when the
country’s first renewable energy law was enacted: a
law on the promotion of renewable energies in the
context of sustainable development. This law provides a
general framework for the national program to promote
and develop renewable energy and provide related
incentives.
In addition to the renewable energy laws present in
Algeria, a decree on energy mix diversification was also
enacted by the Algerian government. The objective
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of the decree is to create incentives in the form of
Feed-in-Tariffs.
This decree envisages the following bonuses, which
are paid on top of the market electricity price. For solar
electricity entirely produced by solar irradiation (e.g.
PV or solar-only CSP plants), the bonus is 300%. For
solar thermal electricity with gas co-firing, the bonus
schedule is as follows:
180 % for a solar contribution of 20 to 25 %
160 % for a solar contribution of 15 to 20 %
140 % for a solar contribution of 10 to 15 %
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100 % for a solar contribution of 5 to 10 %
0 % for a solar contribution of 0 to 5 %
In 2011, the Algerian Ministry of Energy and Mines
launched an energy efficiency and renewable energy
program with a budget of US$ 120 billion. The target
is to install 22 GW of new power capacity from renewables between 2012 and 2030.
In the course of this program, approximately 60 solar
PV and CSP plants are expected to come online. Wind
farms, as well as hybrid power plants, are also planned
to take part in this mass renewable energy rollout
by 2020. Between 2012 and 2030, of the total 12 GW
intended to meet domestic electricity demand, 2,000
MW are to be produced from wind power, 2,800 MW
from PV and 7,200 MW from other forms of solar energy,
such as CSP.
The deployment of CSP is expected to have three
phases. The first, taking place between 2011 and
2013, aims to construct two solar power plants with
a capacity of 150 MW each. These are in addition to
the Hassi R’Mel ISCC hybrid power plant project. The
second phase, between 2016 and 2021, will involve the
construction of four CSP plants with a total capacity
of approximately 1,200 MW. Finally, the third phase,
between 2021 and 2030, will entail the installation of
500 MW annually until 2023, and 600 MW annually until
2030.
In June 2012, the state-owned electricity and natural
gas utility Sonelgaz outlined its CSP strategy, identifying
a number of suitable sites, including Beni Abbes,
Naama, Bechar M’Ghaier El Golea, Laghouat, Ouargla, El
Oued and Adrar, which will have a total of 500 MW by
2020. The first of these CSP projects, which is expected
to move into operation by 2015, is the 150 MW El
Oued project, and the second is the 150 MW Beni
Abbes project scheduled to come online in 2016.
www.csptoday.com
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11.2. Australia
Australia – Country Overview
DNI:2,400 kWh/m2/year
Size:7.7 million km²
Population (2012):22.7 million
GDP per capita (2012):
US$ 44,234
Installed power capacity:
68.4 GW
Annual electricity consumption:
243.9 TWh
Expected annual electricity demand in 2020:
275 TWh
Table 2(11): Current CSP Projects in Australia
MW
capacity
Technology
Current
status
State/
Region
Developer/
Promoter
Lake
Cargelligo
3
Tower
Operation
New South
Wales
Lloyd Energy
Systems
Liddell
1
Fresnel
Operation
New South
Wales
AREVA
Liddell Phase
2
3
Fresnel
Operation
New South
Wales
Macquarie
Generation
Novatec Solar 9.3
Liddell Solar
Expansion
Fresnel
Operation
New South
Wales
Macquarie
Generation/
Novatec
Kogan Creek
Solar Boost
44
Fresnel
Construction
Queensland
CS Energy/
Areva
Solar Oasis
43.5
Dish
Development
Whyalla
Solar Oasis
Pty Ltd
Collinsville
Hybrid
Project
30
Fresnel
Planning
Queensland
Australian
Renewable
Energy
Agency
(ARENA)
Title
Storage
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Australia has an enormous potential for CSP
deployment due to the extraordinary solar and land
resources that are available. There is growing interest
in exploring the potential for hybridization due to the
high number of existing coal-fired power plants. The
Australian Renewable Energy Target (RET) objective has
been in place since 2007 and aims to meet 20% of the
country’s electricity demand through the development
of renewable energy generation sources by 2020. The
RET is split into two parts: a Large-scale Renewable
Energy Target (LRET) and a Small-scale Renewable
Energy Scheme (SRES). CSP projects fall under the LRET,
www.csptoday.com
which plans to produce 41,000 GWh/year of renewable
energy by 2020. To achieve this target, the government
has introduced a Renewable Energy Certificate (REC)
scheme to enable commodity trading of renewable
energy generation. The objective of the REC scheme
is to create a financial incentive for investment in
renewable energy sources through the creation and
sale of certificates that can be traded for cash, the value
of which fluctuates according to market conditions.
Apart from the REC scheme, in December 2009, the
Government of Australia launched the Solar Flagships
program: a specific regulatory framework for solar
energy development that aims to support large-scale,
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grid-connected solar power projects and accelerate the
local commercialization of solar power technologies.
In 2012, the 250 MW Solar Dawn Kogan Creek Project,
which was part of the Solar Flagships initiative, was
withdrawn as it was unable to meet the extended June
2012 financial deadline.
In addition the 43.5 Solar Oasis project lost its
government funding of AUD 60 million for failing to
meet scheduling deadlines. However, developers have
indicated that they will be continuing to promote the
development of the project even without funding from
government.
In December 2012, the Commonwealth Scientific and
Industrial Research Organisation (CSIRO), together
with the Australian Solar Thermal Research Initiative
(ASTRI), announced an AU$ 87 million, eight-year long
international collaboration with organizations including
six local Australian Universities and the USA-based NREL,
Sandia National Laboratories and Arizona University,
aimed at transforming Australia into a global leader in
CSP technology. The goal of the program is to lower
solar thermal power costs to 12 c/kWh by 2020. To
achieve this, the initiative is striving to reduce CAPEX,
improve the capacity factor of CSP plants, improve
efficiency and lower the operational and maintenance
costs.
www.csptoday.com
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11.3. Brazil
Brazil – Country Overview
DNI:1,900 kWh/m2/year
Size:8.5 million km²
Population (2012):196 million
GDP per capita (2012):
US$ 12,594
Installed power capacity:
106.2 GW
Annual electricity consumption:
407.2 TWh
Expected annual electricity demand in 2020:
651.5 TWh
Table 3(11): Current CSP Projects in Brazil
Title
MWe
Current status
Technology
State/Region
Developer
Coremas
50
Announced
Parabolic
Trough
Coremas
Brax Energy/
SkyFuel
Helioterm
1
Development
Parabolic
Trough
Petrolina
CEPEL
Storage
Capacity
(hours)
Yes
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Brazil is a potentially interesting market for the
deployment of the CSP because of the country’s good
insulation resources, particularly in the Northeast of
the country, and due to the rapidly growing energy
demand. However, the large share of the hydropower
sector makes CSP generation technology still uneconomic in comparison. Other policy and commercial
aspects of the energy market need to be put in place to
encourage the solar thermal electric industry.
Brazil is committed to reducing its CO2 emissions by
between 36% and 39% by 2020. A National Energy
Plan has been published by the Empresa de Pesquisa
Energética (EPE), the energy planning unit of the
Brazilian Ministry of Mines and Energy. Brazil does not
have a specific policy or incentive scheme dedicated to
CSP technology. The only feed-In type policy scheme
for supporting renewable energy generation technologies is PROINFA (Incentive Program for Alternative
Sources of Electric Energy), which was introduced in
2002. The Brazilian government supports a ‘Contracting
Free Market’ or ACL (Ambiente de Contratação Livre)
whereby contractors can independently and bilaterally
produce and sell electricity, paying transmission fees to
use the existing energy infrastructure. Here, conditions,
www.csptoday.com
prices and quantities are negotiated between the
power generators, importers, traders and consumers
(for example in energy-intensive industries such as the
automobile industry). The ACL is open for any consumer
with a connection above 3 MWe.
The ACR, or Regulated Contract Environment (Ambiente
de Contratação Regulada), on the other hand, encompasses all electricity distribution concessionaires on
the National Interconnected System that produce
more than 500 GWh/year. Distributors producing more
than 500 GWh/year are required to partake in auctions
regulated by the Brazilian Electricity Regulatory Agency
(ANEEL), prepared by EPE, and held at the Electric
Energy Commercialization Chamber (CCEE), with the
goal of ensuring the lowest possible energy price
for consumers. Distributors under ACR can, however,
purchase energy from alternative energy plants. The
Brazilian Government defines the energy sources
allowed at a certain auction, as well as the general
upper price limit per MWh – then the allowed sources
can compete amongst each other. Ultimately, ACL gives
the opportunity for new sources of energy to operate
and sell electricity independently, as long as they
adhere to the general sector regulations.
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In June 2013, Eletrosul, a subsidiary of Brazil’s major
utility company Eletrobras, operating in the Southern
states of Brazil, released plans to conduct a feasibility
study for large-scale CSP activity in the Rio Grande do
Sul and Mato Grosso do Sul regions. The first step in
this direction is the announcement of a tender for the
installation of four solar radiation measurement stations.
Eletrobras’ research unit CEPEL is working under an
MCTI/MME project to build a 1 MWth parabolic trough
loop in Petrolina.
In July 2013, energy research company EPE opened
an auction for A-3 renewable energy projects. For
the first time, CSP and PV have been included in the
auction. No set caps have been set for CSP or PV, and
there is no absolute guarantee that any solar projects
will receive approval. The results are dependent
upon the case provided by bidders, including solar
resource studies, site identification and feasibility
www.csptoday.com
studies. However, allowing solar projects to partake
in the auction is a step in the right direction and
potentially paves the way forward for future auctions.
Bidders in the auction will be selected according to
a reverse bidding system, where the lowest tariff will
be successful. Under the A-3 framework developers
will have three years from the date of the auction to
complete the project.
On 9 September 2013, it emerged that applications for
290 MW of CSP had been registered, compared to 2.73
GW of PV. The majority of these projects were registered
in the state of Bahia (240 MW of CSP), whilst 50 MW of
CSP were registered in Paraíba.
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11.4. Egypt
Egypt – Country Overview
DNI:2,300 kWh/m2/year
Size:1 million km²
Population (2012):80.72 million
GDP per capita (2012):
US$ 6,539
Installed power capacity:
23.4 GW
Annual electricity consumption:
143.5 TWh
Expected annual electricity demand in 2020:
171 TWh
Table 4(11): Current CSP Projects in Egypt
Storage
Capacity
(hours)
Title
MWe
Technology
Status
State/Region
Developer
Kom Ombo
100
Parabolic
Trough
Development
Aswan
New and
Renewable Energy
Authority
4
Kuraymat ISCC 20
Parabolic
Trough
Operation
Kuraymat
New and
Renewable Energy
Authority
N/A
Marsa Alam
30
Parabolic
Trough
Planning
Red Sea
Canal Distribution
Company/
Governorate of Red
Sea
8
Taqa CSP
Project
250
Tower
Planning
Egypt
TAQA
TBC
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
At present, there is no specific regulatory framework
in Egypt to promote renewable energy. Nevertheless,
the Egyptian government has adopted a number of
measures in order to enhance wind and solar energy
deployment. The Supreme Council of Energy in Egypt
announced a strategy for renewable energy in 2008
stating that the contribution of renewable energies
should make up 20% of total electricity generation
by 2020. Wind technology was slated to have a share
of 12% of the renewable energy portfolio, while the
contributions of other renewable energy technologies
(such as hydro and solar energy) were not specified,
despite their significant penetration levels.
development plans with solar energy targets of 100
MW of CSP and 20 MW of PV. The current regulatory
framework in Egypt for private investments in
large-scale renewable energy is achieved through a
competitive bidding system on state-owned land.
However, the Egyptian government has proposed
a new law to govern the electricity sector. This law,
currently being discussed, constitutes the most recent
legal initiative taken by the government to encourage
renewable energy deployment and privately owned
electricity generation. Through the embodiment of this
electricity draft law, the government is clearly indicating
its vision for renewable energy and for the potential of
national CSP industrial developments.
In the five-year energy plan from 2012 to 2017, the
Supreme Council for Energy of Egypt presented
Recently, the Egyptian Ministry of Electricity and Energy
(MOEE) announced that, given the country’s huge solar
www.csptoday.com
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energy sources, the electricity sector has started setting
up Egypt’s first solar energy power plan. The plan aims
at generating 3,500 MW of solar energy by 2027. In
2012, the Egyptian Academy of Scientific Research and
Technology (ASRT) announced the launch of a pilot CSP
project to test a generation process with simultaneous
desalination of water. This demonstration project, titled
Multi-Purpose Applications by Thermodynamic Solar MATS, received US$ 28 million from the European Union
and will involve European universities and companies.
The facility will be located close to Alexandria on the
north coast of the country, and will include a research
station where Egyptian researchers will be trained. The
final aim is to build a relative low-cost, high-efficiency
solution alongside the capability to export this
technology to other African countries.
www.csptoday.com
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11.5. Greece
Greece – Country Overview
DNI:1,519 kWh/m2/year
Size:131,940 km²
Population (2012):11.3 million
GDP per capita (2012):
US$ 26,427
Installed power capacity:
14.3 GW
Annual electricity consumption:
54.7 TWh
Expected annual electricity demand in 2020:
59.2 TWh
Table 5(11): Current CSP Projects in Greece
Title
MWe
Technology
Current Status
State/ Region Developer
Storage
Capacity
(hours)
M.I.N.O.S. CSP
50
Tower
Development
Crete
Motor Oil
Hellas
TBC
Maximus
75
Dish
Development
Florina
Maximus
N/A
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Greece is potentially a good market for CSP development,
both because of the high solar resources and for its
strategic position in the Mediterranean. Also, the presence
of a large number of small islands would lend itself to the
development of hybrid technology to increase the resilience of the whole system. However, the country needs
to improve its attractiveness for a sound deployment of
renewable energies by reducing risks associated with the
administrative and financial environments.
The Greek energy sector has been growing over the last
10 years, characterized by high energy consumption,
low fuel efficiency, low labor and capital productivity, as
well as an expensive energy mix. The high dependence
on oil-derived fuels is one of the main drivers for
introducing higher shares of renewable energy.
However, the growth of the energy sector is somewhat
constrained by the limited activity of Greek players in
international projects, as well as within the domestic
value chain. Greece’s energy policy covers a wide
spectrum of objectives, including the improvement of
energy efficiency.
Optimization of the energy mix alongside the exploration of the potential for new generation technologies
like CSP has been recommended in recent country
reports as an important objective of national policy. The
new National Action Plan for Renewable Energy Sources
(2010-2020) is an ambitious plan aiming to reform the
www.csptoday.com
county’s energy sector to produce 20% of the country’s
primary energy from renewables by 2020 (of which 40%
should be in the electricity sector, 20% for heat and 10%
for transport).
In the electricity sector, a major role is envisaged
for wind and solar PV, besides the existing large
hydropower sources. The increasing contribution
of renewables will also be provided through other
technologies, like biomass, geothermal and concentrated solar power. Amongst the objectives of the new
law (3,851), the following are included:
Accelerate the permitting procedure of larger projects
Simplify the licensing of smaller projects
Improve the attractiveness of feed-in-tariffs for all
renewable technologies
Deal with the “Not in my Backyard” (NIMBY)
phenomenon at several levels
Establish an office that can coordinate all the administrative and regulatory aspects of renewable energy
projects (a one-stop-shop)
CSP is not currently operational in Greece; however,
several projects are in the pipeline, for a total installed
capacity of 379.7 MW. A major developer following
these projects is UK-headquartered Nur-Energie. New
CSP developments in Greece are eligible for a feed-intariff between 264.85 and 284.85 €/MWh – depending
on the supply of energy guaranteed.
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In January 2013, the developer Maximus was awarded
€44.6 M to develop a large-scale Stirling dish power
plant with a total installed capacity of 75.3 MWe, located
in the north-west of Greece in the region of Florina. The
plant features 25,160 Stirling dish units, each with a 3
kW-rated power output, and consists of 37 small power
plants of modular design, built on different land plots,
all of which will be connected to the grid via a single
connection point.
www.csptoday.com
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11.6 Israel
Israel – Country Overview
DNI:2,500 kWh/m2/year
Size:20,770 km²
Population (2012):7.6 million
GDP per capita (2012):
US$ 31,296
Installed power capacity:
12 GW
Annual electricity consumption:
46.4 TWh
Expected annual electricity demand in 2020:
80 TWh
Table 6(11): Current CSP Projects in Israel
Storage
Capacity
(hours)
Title
MWe Technology
Status
State/Region
Developer
Ashalim Plot A
110
Parabolic
Trough
Development
Ashalim, Negev
Abengoa/ Shikun
& Binui
4
Shneur
120
Parabolic
Trough
Development
Kibbutz Ze’elim,
Negev
Shikun & Binui
TBC
Two Sigma CSP
60
Parabolic
Trough
Development
Kibutz Mashabel Kugler/ Two
Sadeh
Stigma
TBC
Ashalim Plot B
121
Tower
Development
Ashalim, Negev
Alstom/
BrightSource
Energy
TBC
BrightSource
SEDC
6
Tower
Operation
Rotem Industrial BrightSource
Park
Energy
N/A
HF Cartwheel
12
Dish
Development
Rotem Industrial HelioFocus
Zone
0.5
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
In 2009, the Israeli government established a target to
meet 10% of Israel’s electricity needs using renewable
energy by 2020, opening up a market of 4 GW; most
of which will likely be provided by solar energy. The
renewable energy industry is currently pushing for this
target to be increased to 20%, in line with the European
Union. The Public Utility Authority for Electricity is the
Israeli regulatory body responsible for implementing
governmental policies and licensing electricity generation. Since 2008, it has issued different regulations to
enable the private sector to generate electricity. The
FIT scheme for small and medium-sized PV installations
does not include FITs for large-scale CSP and PV
projects. Negotiations surrounding the regulatory
framework to support CSP technologies are ongoing
www.csptoday.com
and involve the following objectives:
A favorable FIT for CSP projects that would attract
investors. According to what some industry experts have
told CSP Today, the government is aiming to set tariffs
at approximately EUR 0.16/kWh, while the industry is
pushing for higher tariffs of around EUR 0.23/kWh
Improvement of tax benefits for solar developers
Building of new transmission lines that connect the
south of Israel, where the solar potential is higher
than the large urban areas located in the center of the
country
Facilitation of permitting with the Israel Land Administration - the government authority responsible for
managing public land.
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A Build-Operate-Transfer (BOT) structure is expected
to be adopted for the development of CSP plants, and
indeed this is the case of the contract assigned in June
2013 with Negev Energy to build the 10 MW Ashlim
plant. The BOT structure covers the planning stage,
financing, construction and operation of the plants for
a period of 25 to 30 years, upon which the plant will be
handed over to the government.
www.csptoday.com
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11.7. Italy
Italy – Country Overview
DNI:1,500 kWh/m2/year
Size:301,230 km²
Population (2012):60.92 million
GDP per capita (2012):
US$ 36,116
Installed power capacity:
101.2 GW
Annual electricity consumption:
290 TWh
Expected annual electricity demand in 2020:
342.9 TWh
Table 7(11): Current CSP Projects in Italy
Title
MWe
Technology
Current status
State/ Region Developer
Storage
Capacity
(hours)
Archimede
5
Parabolic
Trough
Operation
Catania, Sicily
8
Archetype
SW550
30
Parabolic
Trough
Development
Prioro Gargallo, ENEL
Sicily
ENEL
TBC
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Italy has a promising landscape for CSP development
due to high solar resources in the south part of the
country and the high-quality industrial and R&D
activities already in place. Italy is focusing more on the
development of mini-CSP technology. However, the
limited land availability and the competition for its use
with other sectors, like agriculture and tourism, are
limiting factors.
Interest has been steadily growing in Italy’s renewable
energy sector, and in the last few years, the country
has come one of the booming markets for PV energy
development. However, there are still legislative and
policy constraints, making it unlikely that Italy will
achieve its 2020 renewable generation targets. The CSP
sector is promoted by an industrial lobby ANEST that
has been active since 2009. The only CSP plant currently
operating in Italy is an integrated gas 5 MW parabolic
trough, based in the far southern region. However, other
projects of up to 30 MW are planned. Several industrial
component producers are already active in the sector
and support international projects in collaboration
with international EPC firms and developers. Thanks
to high-quality R&D activity, Italy has been promoting
the technical development of CSP, particularly through
research activities led by the national agency for energy
and environment ENEA, amongst other bodies.
www.csptoday.com
One aspect of special interest is the geographical
position that gives Italy a potentially strategic role in
the development of the large Mediterranean project
DESERTEC and the Trans-Med Super Grid. The policy
regulation introduced in the market in 2012 improves
incentives for the CSP sector by increasing feed in tariffs
for all the plants that come into operation before the
end of 2015. For plants employing CSP technology for at
least 85% of their overall generation, the rate is between
14% and 28%, which is higher when compared with
the previous legislation. In December 2012, Italy’s Enel
Green Power (EGP) released plans to build two CSP
plants. The first will be a 30 MW parabolic-trough plant
in Sicily, whereas the second involves building a 25 MW
CSP plant linked to a water desalination project in a
Mediterranean country other than Italy, and not yet
identified.
In 2013, Italy’s Archimede Solar Energy and Japan’s
Chiyoda successfully commissioned their new parabolic
trough test loop with molten salt as heat transfer
fluid (HTF) and thermal energy storage (TES) system.
This facility, located in the central part of the country,
comprises a 600-meter long parabolic trough loop and
a two-tanks-direct molten salt storage system with up
to five hours of TES. The configuration is not used in
commercial plants, but only in a demonstration plant in
Sicily (Archimede ISCC).
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11.8. Jordan
Jordan – Country Overview
DNI:2,500 kWh/m2/year
Size:92,300 km²
Population (2012):6.5 million
GDP per capita (2012):
US$ 5,899
Installed power capacity:
2.7 GW
Annual electricity consumption:
16.5 TWh
Expected annual electricity demand in 2020:
28 TWh
Table 8(11): Current CSP Projects in Jordan *
Title
MWe
Technology
Current
status
State/Region
Developer
Storage
Capacity
(hours)
Mitsubishi
Corporation
Jordan
50
TBC
Announced
Ma’an
Mitsubishi
TBC
Abengoa
Jordan
25
TBC
Announced
Ma’an
Abengoa
TBC
*Only one of the
projects will be
successful. Shortlisted
developers have until
early 2014 to submit
their final proposals.
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
In February 2010, the “Renewable Energy & Energy
Efficiency Law” was passed in Jordan and included
the introduction of a fixed tariff and tendering system
intended to stimulate investments in renewable energy.
The Ministry of Energy and Mineral Resources (MEMR)
has set as a 10% renewable energy target by 2020. The
government has proposed a plan to locally produce
90% of its energy by 2020 and is seeking Build-OperateTransfer (BOT) projects for the development of up to
600 MW of solar power capacity by 2020.
The country is also contemplating the creation of a
government-sponsored fund to support the development of renewable energy projects and to evaluate
the resource potential to identify promising opportunities for future deployments. One of these potential
projects is the Sahara Forest Project (SFP) similar to the
one launched in Qatar. Jordan, where desert comprises
75-80% of the land area, designated 20 hectares for a
test and demonstration center and 200 hectares for
development and expansion. Following an agreement
signed with Aqaba Special Economic Zone Authority in
2011, the SFP agreed to conduct three comprehensive
studies, which will be financed and supported by
Norwegian authorities.
In April 2012, MEMR announced 34 expressions of interest
for renewable energy electricity generation projects,
www.csptoday.com
which were qualified to sign memoranda of understanding with the Ministry to proceed to submit direct
proposals for their projects. This led to five CSP projects
being selected, and the latest results have shortlisted two
CSP projects, one of which will establish the project in the
Ma’an development area should their final proposal be
accepted. Shortlisted developers have until early 2014 to
submit their final proposals and technology selections.
Jordan has also joined forces with Algeria, Egypt,
Morocco and Tunisia in the MENA CSP scale-up
initiative. The initiative will be implemented under the
Clean Technology Fund (CTF) and aims to generate
1 GW of energy; about 15% of the projected global
CSP output. This initiative would entail approximately
US$ 4.8 billion of public and private investment in
CSP and the development of CSP-related transmission
infrastructure in the whole region for domestic supply
and exports. In January 2013, Jordan secured US$ 50
million from the CTF. The fund will be implemented by
the African Development Bank and aims to develop
up to 100 MW of solar energy projects, including CPV,
through a strategic collaboration with the Abu Dhabibased Masdar. The Electricity Regulatory Commission
(ERC) has also announced a FiT scheme for solar energy
generation projects. The rate for PV is approximately
US$ 0.17/kWh, whereas the rate for CSP-sourced
electricity is US$ 0.19/kWh.
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11.9. Kenya
Kenya – Country Overview
DNI:1,229 kWh/m2/year
Size:582,650 km²
Population (2012):43.18 million
GDP per capita (2012):
US$ 808
Installed power capacity:
1.7 GW
Annual electricity consumption:
5.8 TWh
Expected annual electricity demand in 2020:
22.3 TWh
Table 9(11): Current CSP Projects in Kenya
Title
MWe
Technology
Current
Status
State/ Region Developer
Storage
Capacity
(hours)
KenGen CSP
Plant
20
TBC
Announced
TBC
TBC
KenGen
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Kenya can be a potentially ideal market place for CSP
when looking at its solar resources and energy demand.
Along with five other countries, Kenya is now involved
in the Scaling-up Renewable Energy Program (SREP)
led by the World Bank, which could provide support
for policy development and funding opportunities.
However, there are still serious bottlenecks for the
development of large utility-scale plants. Only a
small percentage of the population has access to the
transmission grid to date, and there is inadequate local
know-how for the development and the maintenance
of CSP energy facilities.
Renewable energy targets in Kenya were initially set
up at the first National Energy Conference in 2008,
but were missed, largely due to the lack of available
capital funding. Indeed, according to the government,
financial support to renewable energy projects is one
of the biggest challenges for their development in
Kenya. The first feed-in-tariff scheme was launched in
2008, and solar energy was included only two years
later. The level of feed-in-tariff varies from a minimum
of US$ 0.08/kWh for biogas, small hydro and biomass
up to US$ 0.15/kWh for solar technologies. In 2010,
the government established a package of Solar Water
Heating Regulations to try and encourage the development of this technology. Other than the feed-in-tariff
scheme, in 2011, Kenya introduced SREP, which
eliminated (from the previous value of 16%) the import
duty on renewable equipment and accessories. This
www.csptoday.com
international program is jointly managed by the African
Development Bank and World Bank.
Generally speaking, the country lacks a suitable
framework for the promotion of renewable energy
investments. The average yearly increase in renewables
is about 4.5%. Although there is strong potential for
the development of CSP, particularly in the northern
part of Kenya, high costs and lack of know-how are
two important bottlenecks preventing its take-up. In
a report produced by the government, PV technology
(CSP is not even mentioned) is estimated to cost more
than double the large hydro (US$ 35/kWh vs. US$ 14.1/
kWh) and more than three times of almost all the other
technologies (small hydro US$ 12/kWh, wind US$ 8.8/
kWh, biogas and biomass US$ 8/kWh and geothermal
US$ 7/kWh). Off-grid and tailored applications like
telecommunications, cathodic protection of pipelines,
lighting and water pumping, are considered more
interesting instead. Another reason why the policy
for solar energy has been unsuccessful so far lies in
the considerable potential the country has for other
renewable technologies, especially micro and small
hydro, which are believed to be huge. Likewise for wind
and geothermal - their potential is largely untapped.
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Rest of the World
11.10 Kuwait
Kuwait – Country Overview
DNI:1,848 kWh/m2/year
Size:17,820 km²
Population (2012):3.25 million
GDP per capita (2012):
US$ 62,664
Installed power capacity:
12.7 GW
Annual electricity consumption:
46.6 TWh
Expected annual electricity demand in 2020:
65.2 TWh
Table 10(11): Current CSP Projects in Kuwait
Title
MWe
Technology
Current Status
State/ Region Developer
Storage
Capacity
(hours)
Shagaya
Renewable
Energy
Complex
Project
50
Parabolic
Trough
Development
Al Abdaliyah
KISR
10
Al Abdaliyah
Solar Plant
(ISCC)
60
Parabolic
Trough
Planning
Safat
Ministry of
Electricity and
Water
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Kuwait is a net exporter of oil, and like all members
of the OPEC organization, its economy is almost
exclusively dependent on hydrocarbons. However, the
need for diversification alongside the availability of
solar resources can make CSP technology interesting
in the medium term. Kuwait only recently showed
an interest in renewable energy. The United Nations
Development Programme (UNDP) in 2003 guided the
government-funded Kuwait Sustainable Environmental
Management Program which aimed, amongst other
things, to raise awareness of and education on
renewable energy sources, and the Kuwait Institute for
Scientific Research (KISR) started assessing the country’s
potential in 2004.
Kuwait does not have an independent market regulator,
nor a public electricity authority. Various political factors
have placed the development of the electric sector at
a standstill. However, ambitious plans for the upgrade
of the electric grid and doubling generation capacity
have been recently announced. These plans should also
entail the involvement of the private sector (the last of
the Gulf countries to do so), a movement which has
indeed encountered political resistance.
Recently, KISR announced the country’s interest in
harnessing renewable energy sources. The main applications of interest are electricity generation and seawater
desalination. CSP and PV are both included in the targeted
technologies, alongside wind energy and solar cooling. In
the long term, Kuwait plans to employ nuclear technology
as well. That said, there is currently no tailored energy
policy or incentives for renewable energy generation.
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Rest of the World
11.12 Mexico
Mexico – Country Overview
DNI:1,135 kWh/m2/year
Size:1.97 million km²
Population (2012):112.3 million
GDP per capita (2012):
US$ 10,064
Installed power capacity:
59.3 GW
Annual electricity consumption:
201 TWh
Expected annual electricity demand in 2020:
217 TWh
Table 11(11): Current CSP Projects in Mexico
Title
MWe
Technology
Agua Prieta II
14
Parabolic
Trough
Current
Status
State/ Region Developer
Storage
Capacity
(hours)
Construction
Sonora
n/a
Abengoa
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Amongst the emerging CSP markets, Mexico is
definitely one of the most promising. Its excellent solar
resources, alongside well-paced industrial development,
provide valuable strengths for the country. Likewise,
the rapidly growing internal demand and the need to
rearrange the current energy mix call for an increased
focus on renewable energy generation. Local Mexican
suppliers are already involved in the supply chain of
US-based CSP plants.
The Mexican energy policy is based on a law for
renewable energy development passed in 2008 and
on the National Strategy for Energy Transition and
Sustainable Energy Use developed by SENER (as a
follow-on from that same law). The two pillars of the
national strategy are energy efficiency and renewable
generation. At the same time a more detailed 15-year
energy plan has been issued by the Federal Commission
of Electricity (CFE). Solar energy has received more
attention in recent years, and studies estimate that
up to 50 times the current electricity generation can
be provided by exploiting the enormous potential for
solar energy. International institutions like the World
Bank, Inter-American Development Bank and Global
Environment Facility (GFE) have expressed their interest
in supporting the development of renewable energy
generation projects in Mexico, whereas nationally, the
interests of the solar industry are represented by the
solar energy association ANES. CSP technology has
a strong potential and the CFE are considering it as
www.csptoday.com
part of their plans for energy development. Initially, in
2002, there was a plan for the construction of the first
Integrated Solar Combined Cycle (ISCC) plant with a
25 MW parabolic trough installed capacity. However,
this project was abandoned due to a lack of interest
from potential investors and re-established in 2005.
The overall objective is a cumulative 1,390 MW capacity
installed by 2020.
In the last quarter of 2012, Abengoa won an order
to build a CSP plant for the state-owned Mexican
Federal Electricity Commission, using solar-gas hybrid
technology (ISCC). The 12 MW parabolic-trough solar
field will be integrated with a 465 MW combined-cycle
gas turbine plant during a later construction phase.
The concentrating solar power installation is receiving
funding from the UNDP’s GEF.
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Rest of the World
11.12 Namibia
Namibia – Country Overview
DNI:2,190 kWh/m2/year
Size:825,418 km²
Population (2012):2.25 million
GDP per capita (2012):
US$ 5,293
Installed power capacity:
0.4 GW
Annual electricity consumption:
3.5 TWh
Expected annual electricity demand in 2020:
5.65 TWh
CSP Specific Policies and Incentives
Namibia has extraordinary solar resources. It is
estimated that the country could produce 70% of
the current world electricity generation if all the
areas suitable for CSP plants were utilized. The DNI
available is the second highest in the world after that
of Chile. However, Namibia is still an emerging country;
therefore, any development of the technology will
be hindered by a variety of regulatory, economic
and technical barriers. Last but not least, the grid
network itself only reaches approximately 41.8% of the
population, and this rate drops to 25% in rural areas.
The Ministry of Mines and Energy (MME) in Namibia
is responsible for the development of energy policy.
This is still based on the White Paper of Energy Policy
(WPE) produced in 1998. In 2006, the Renewable Energy
and Energy Efficiency Institute (REEEI) was created,
to become the national information resource center.
Despite various limitations like the availability of human
and financial resources and low level of economic
independence, the REEEI coordinated projects like
the Renewable Energy and Energy Efficiency Capacity
Building Program (REEECAP) and the Namibian
Renewable Energy Program (NAMREP). Between 2007
and 2010, the NAMREP aimed to promote financial,
economic, political and public awareness of solar
energy. At the same time, the REEECAP was introduced
to support the energy efficiency policy formulated by
the WPE.
In 2008, the Renewable Energy Industry Association of
Namibia (REIAN) was founded to group and represent
small and medium enterprises supplying and installing
relevant technologies. In relation to CSP, in 2012, the
REEEI coordinated a project, partly funded by the MME,
to produce a pre-feasibility study for the development
of CSP technology in Namibia. Unfortunately, several
key issues, including a lack of R&D capabilities and work
skills to support the development of this technology,
as well as the distributed generation in general, mean
www.csptoday.com
that so far no plants have been actually built. Amongst
the other barriers, renewable generation technologies
have to face the interest of the government in a
nuclear program: this technology has been supported
by significant investment from foreign companies.
Furthermore, a recent strategic plan for 2012/2017
released by the MME focused on the development of
nuclear technology, whilst renewable generation was
not discussed at all.
The MME is currently reviewing the WPE and a new
document on energy policy should be published by
2013. Activities are now underway to develop an energy
regulatory framework to support grid-connected
projects in Namibia. Finally, a National Integrated
Resource Plan (NIRP) is being produced with the
financial support of the World Bank.
At the beginning of 2013, the project “Concentrating
Solar Power Technology Transfer for Electricity
Generation in Namibia” (CSP TT NAM) was endorsed
by the Global Environment Facility. The project aims
to increase Namibia’s renewable energy share by
developing the necessary framework and conditions for
the successful deployment of CSP technology. One of
the key goals is the construction of the first CSP plant
by 2015. The project is supported by the United Nations
Development Program (UNDP), the Government of
Namibia, the Ministry of Mines and Energy, and the
Renewable Energy and Energy Efficiency Institute. It
will be funded with approximately US$ 2.5 million from
different sources, such as the Development Bank of
Southern Africa, Clinton Climate Initiative and national
institutions.
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Rest of the World
11.13. Oman
Oman – Country Overview
DNI:2,000 kWh/m2/year
Size:312,460 km²
Population (2012):3.31 million
GDP per capita (2012):
US$ 25,221
Installed power capacity:
4.26 GW
Annual electricity consumption:
15.52 TWh
Expected annual electricity demand in 2020:
31 TWh
Table 12(11): Current CSP Projects in Oman
Title
Petroleum Development
Oman CSP EOR Project
MWe
7
Current
Status
Operation
CSP Specific Policies and Incentives
Oman could become a pioneer in CSP deployment if
it chooses to do so. Abundant solar resources and land
availability are matched by the need for diversification
and the potential economic return associated with
exported oil and gas. However, the predominant role
of oil and gas in the energy market alongside a lack
of know-how and the absence of a tailored energy
policy has created a challenging overall picture for CSP
technology to date.
Oman is increasingly showing interest in renewable
energy generation technologies. Ministerial and
technical committees have been established and two
main priorities have been identified: the investigation of
renewable energy potential in Oman through feasibility
studies, and the review of the market structure and
overall regulatory framework.
Technology
Parabolic
Trough
Developer
GlassPoint
Storage Capacity
(hours)
n/a
Utility-scale solar energy plants have significant
potential in this GCC country and could be instrumental
in reducing the consumption of internal oil and gas
resources, which in turn could be exported to further
boost the economy. In this energy scenario, there is
high interest in the development of CSP technology.
The utilization of renewable energy generation technologies would be very suitable for electricity generation
in Oman, as well as for water desalination, particularly
in remote areas that are difficult to connect to the main
system. A large project is currently awaiting approval
from Oman’s Public Authority on Electricity and Water.
The main areas of focus are currently solar and wind
technologies, whilst a limited potential is associated
with all other applications. Pilot PV technology projects
have commenced in recent years and the Authority for
Electricity Regulation (AER) has commissioned feasibility
studies to investigate the potential of CSP technology.
Furthermore, several private companies have signed
a Memorandum of Understanding (MoU) and other
commercial agreements to develop solar energy
projects. Other than the policy initiatives already
quoted, Oman does not have any tailored fiscal
incentive system such as feed in tariffs, but the overall
energy policy is currently under review.
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Rest of the World
11.14 Portugal
Portugal – Country Overview
DNI:1,717 kWh/m2/year
Size:91,985 km²
Population (2012):10.53 million
GDP per capita (2012):
US$ 22,316
Installed power capacity:
18.92 GW
Annual electricity consumption:
51.19 TWh
Expected annual electricity demand in 2020:
52 TWh
Table 13(11): Current CSP Projects in Portugal
Title
MWe
Current
Status
Island
Renewable
8
Planning
Technology
Developer
Parabolic
Trough
Island Renewable
Ltd
Storage Capacity
(hours)
TBC
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Portugal represents a potentially very interesting market
for CSP development. The country enjoys high levels
of solar irradiation and strong government support
for the development of renewable energy generation
technologies, further confirmed by a target raised in
2011. The relevant role of renewable energy within the
energy mix could benefit from an increased penetration
level of CSP technology because of its capability to
store energy. Other than temporary financial problems
undermining the opportunity for developing large
projects, the low capacity of the grid seems to be the
major bottleneck. Portugal has set a very ambitious and
supportive policy for the development of renewable
energy and, indeed, massive progression has been
witnessed over the last ten years.
a net exporter. This is the reason why the new National
Energy Strategy set more ambitious targets.
There are very promising resources in Portugal, both in
terms of wind and solar. The country hosts the world’s
largest PV plant - yet solar energy is still far behind
wind development. The policy includes a feed-in-tariff
scheme, tailored tendering and concession procedures,
investment subsidies (PRIME-Programme) and tax
reductions. The latest FITs were issued between 2005
and 2007, when CSP technology was included. Subsidy
payments and tax incentives have been mainly used
for smaller-scale applications whilst FITs and tendering
schemes favored larger-scale renewable applications.
CSP projects up to 10 MW can claim FITS between €
0.263 /kWh to € 0.273.
The energy policy launched in 2001 was based on the 4
Es (Energy Efficiency and Endogenous Energies). It was
initially focused on replacing oil and coal with natural
gas and liberalizing the energy market; it then moved
on to renewable energy generation technologies. A
wide range have been targeted by the government
since 2007, including wave energy, waste-to-energy,
biogas, hydro, PV and wind energy technologies. The
installed capacity more than tripled between 2004 and
2009 and Portugal is now amongst the top-ranked in
Europe for energy generation from renewables. This
result is particularly due to the massive development
of wind generation. According to the International
Energy Agency, Portugal recently achieved the status of
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Rest of the World
11.15 Qatar
Qatar – Country Overview
DNI:2,266 kWh/m2/year
Size:11,571 km²
Population (2012):2.05 million
GDP per capita (2012):
US$ 92,501
Installed power capacity:
4.893 GW
Annual electricity consumption:
23.04 TWh
Expected annual electricity demand in 2020:
72.2 TWh
Table 14(11): Current CSP Projects in Qatar
Title
MWe
Technology
Current
status
State/ Region Developer
Storage
Capacity
(hours)
Sahara Forest
Project: Qatar
Parabolic
Trough
Operation
Doha
Qafco
N/A
QEERI
DohaSOL Solar
Desalination
Project
Parabolic
Trough
Planning
TBC
Qatar
Environment
& Energy
Research
Institute
TBC
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Qatar can potentially become an active CSP market, as
the rate at which its electricity demand is increasing is
one of the highest in the world and solar resources are
abundant. However, the predominant role of oil and gas
in the energy market alongside technical and policy-related barriers create a challenging overall picture for
CSP penetration.
Qatar is the second-smallest oil producer in the
Organization of the Petroleum Exporting Countries
(OPEC). Its policy so far has been highly focused on oil
production and exportation, a situation which seems
unlikely to change, at least in the short term. To date,
the country does not have any dedicated legal or
regulatory frameworks for the deployment of renewable
energy technologies. As a consequence of the various
generation shortfalls, the government is starting to
invest in the refurbishment of the power system,
encouraging foreign investment and implementation of
Independent Power Projects (IPPs).
components for the PV industry, mainly polysilicon. The
plan for 1,800 MW to be completed by 2014 is aimed at
satisfying approximately 80% of the overall water desalination demand. Other than solar energy, the country
has also started deploying biomass energy in a plant
with an installed capacity of 40 MW. Qatar already has
a CSP project in operation as part of the larger Sahara
Forest Project (SFP). Working in collaboration with Yara
and Qafco, the SFP encompasses a number of different
research and development activities including saltwater
greenhouses, evaporative hedges, PV, salt production,
halophytes and algae production.
The International Renewable Energy Agency (IRENA)
recently signed a Memorandum of understanding
with Qatar to promote the development of renewable
resources. The country has a sizeable production of
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Rest of the World
11.16 Spain
Spain – Country Overview
DNI:2,100 kWh/m2/year
Size:505.99 million km²
Population (2012):47.27 million
GDP per capita (2012):
US$ 30,626
Installed power capacity:
106.3 GW
Annual electricity consumption:
270.4 TWh
Expected annual electricity demand in 2020:
394.8 TWh
Table 15(11): Current CSP Projects in Spain
Developer
Storage
Capacity
(hours)
Ciudad
Real
SolarReserve
TBC
Construction
Sevilla
STEAG
7
Parabolic
Trough
Construction
Caceres
Cobra
7.5
50
Parabolic
Trough
Construction
Alicante
FCC
Solaben 6*
50
Parabolic
Trough
Construction
Caceres
Abengoa/ ITOCHU
Corporation
Solaben I*
50
Parabolic
Trough
Construction
Caceres
Abengoa/ ITOCHU
Corporation
Termosol 1
50
Parabolic
Trough
Operation
Badajoz
NextEra Energy
Resources
9
Termosol 2
50
Parabolic
Trough
Operation
Badajoz
Florida Power &
Light/ NextEra Energy
Resources
9
Andasol 1
50
Parabolic
Trough
Operation
Granada
ANTIN/ Cobra/ RREEF
Infrastructure
7.5
Andasol 2
50
Parabolic
Trough
Operation
Granada
Cobra
7.5
Title
MWe
Technology
Current Status
Alcázar
50
Tower
Development
Arenales PS
50
Parabolic
Trough
Casablanca
50
Enerstar
Villena
www.csptoday.com
State/
Region
4
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Rest of the World
Andasol 3
50
Parabolic
Trough
Operation
Granada
Ferrostaal/
RheinEnergie/ RWE
Innogy/ Solanda/
Stadtwerke Munchen
7.5
ASTE - 1A
50
Parabolic
Trough
Operation
Ciudad
Real
Aries/Eiser/Elecnor
8
ASTE - 1B
50
Parabolic
Trough
Operation
Ciudad
Real
Aries/Eiser/Elecnor
8
Astexol-2
50
Parabolic
Trough
Operation
Badajoz
Aries/Eiser/Elecnor
7.5
Borges
22.5
Parabolic
Trough
Operation
Lldida
Abantla/Comsa-Ente
Consol
Orellana
50
Parabolic
Trough
Operation
Badajoz
Acciona
Extresol 1
50
Parabolic
Trough
Operation
Badajoz
Cobra
7.5
Extresol 2
50
Parabolic
Trough
Operation
Badajoz
Cobra
7.5
Extresol 3
50
Parabolic
Trough
Operation
Badajoz
Cobra
7.5
Gemasolar
20
Tower
Operation
Sevilla
Masdar/ Sener / Torresol 15
Energy
HelioEnergy 1
50
Parabolic
Trough
Operation
Sevilla
Abengoa
HelioEnergy 2
50
Parabolic
Trough
Operation
Sevilla
Abengoa
Helios 1
50
Parabolic
Trough
Operation
Ciudad
Real
Abengoa/Caja
Castilla La Mancha
Corporacion/Fundo
de Capital de Risco
Energias RenovaveisCaixa Capital/
HYPERION/Hypesol
Energy Holding
Helios 2
50
Parabolic
Trough
Operation
Ciudad
Real
Abengo/Caja Castilla La
Mancha Corporacion/
Fundo de Capital
de Risco Energias
Renovaveis-Caixa
Capital/HYPERION/
Hypesol Energy
Holding
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Rest of the World
La Africana
50
Parabolic
Trough
Operation
Cordoba
Grupo Magtel/Grupo
Ortiz/ TSK
7.5
La Dehesa
50
Parabolic
Trough
Operation
Badajoz
SAMCA Renovables
7.5
La Florida
50
Parabolic
Trough
Operation
Badajoz
SAMCA Renovables
7.5
La Risca
50
Parabolic
Trough
Operation
Badajoz
Acciona/Mitsubishi
Lebrija 1
50
Parabolic
Trough
Operation
Sevilla
Siemens/Valoriza
Majadas
50
Parabolic
Trough
Operation
Caceres
Acciona/Mitsubishi
Manchasol 1
50
Parabolic
Trough
Operation
Ciudad
Real
Cobra
7.5
Manchasol 2
50
Parabolic
Trough
Operation
Ciudad
Real
Cobra
7.5
Morón
50
Parabolic
Trough
Operation
Sevilla
Ibereolica Solar
Olivenza I
50
Parabolic
Trough
Operation
Badajoz
Ibereolica Solar
Palma del
Rio I
50
Parabolic
Trough
Operation
Cordoba
Acciona/Mitsubishi
Palma del
Rio II
50
Parabolic
Trough
Operation
Cordoba
Acciona/Mitsubishi
PS10
11
Tower
Operation
Sevilla
Abengoa
1
1
PS20
20
Tower
Operation
Sevilla
Puertollano
Ibersol
50
Parabolic
Trough
Operation
Ciudad
Real
Iberdrola Renovables
Solaben II
50
Parabolic
Trough
Operation
Caceres
Abengoa/ ITOCHU
Corporation
Solaben III
50
Parabolic
Trough
Operation
Caceres
Abengoa/ ITOCHU
Corporation
Solacor 1
50
Parabolic
Trough
Operation
Cordoba
Abengoa / JGC
Corporation
Solacor 2
50
Parabolic
Trough
Operation
Cordoba
Abengoa / JGC
Corporation
Solnova 1
50
Parabolic
Trough
Operation
Sevilla
Abengoa
Solnova 3
50
Parabolic
Trough
Operation
Sevilla
Abengoa
Solnova 4
50
Parabolic
Trough
Operation
Sevilla
Abengoa
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Rest of the World
Soluz Guzman 50
Parabolic
Trough
Operation
Cordoba
Abantia/FCC/Mitsui
Valle 1
50
Parabolic
Trough
Operation
Cadiz
Masdar/ Sener
7.5
Valle 2
50
Parabolic
Trough
Operation
Cadiz
Masdar/ Sener
7.5
* In October 2013 this project moved into operation
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
As a result of the moratorium passed in January 2012
(abolition of the Royal Decree), no government incentives currently exist to support CSP in Spain. According
to Protermosolar, the moratorium may be a temporary
measure while a new policy framework is defined. If the
moratorium reveals itself to be a permanent measure,
and the government does not announce an alternative
scheme for supporting CSP projects, the industry in
Spain will most likely stagnate.
The Proposed Law of Fiscal Measures for Energy
Sustainability (or Proyecto de Ley de Medidas Fiscales
para la Sostenibilidad Energética), distributed in
September 2012, aims to raise €3 billion a year, and
proposes a uniform 6% tax on all forms of energy generation. Additionally, the windfall profits that Spain’s big
five electrical companies have been enjoying until now
from fully amortized nuclear and hydro plants will be
curtailed with the introduction of taxes on radioactive
waste and a 22% levy on the use of water for electricity
production.
be updated according to the standard Consumer
Price Index (CPI), but with an index that will exclude
“elements outside the electric system” (such as staple
foodstuffs). Secondly, whilst CSP plants could previously
choose to operate under two different options, either at
fixed-tariff or receive the ‘market price plus a premium’,
from now on only the fixed tariff will be allowed.
In July 2013, Spain reduced profits for renewable
energy projects. Feed-in-Tariffs are now to be removed
and replaced with a new scheme of investment
supplements. Under the new law, both renewables and
cogeneration plants will receive a payment for their
investment, instead of the former FIT. This has been
established at a 7.5% rate before tax. However, this
rate will not be applied to the CAPEX of the plant, but
rather to what the Spanish Government deems as a
‘reasonable cost’ for the CSP plant.
Clean technologies were encouraged by the application
of a ‘green cent’ tax on carbon-based fuels, ranging from
€0.028 per cubic meter of natural gas to €14.97 per ton
of coal. However, the regulation proposal includes a
clause that states: “Electrical energy produced from the
use of fossil fuels in a generation installation that uses
as its primary source a renewable energy will not be
subject to an economic bonus.” This has raised concern
that the proposed legislation could hit the generation
profits that Spanish CSP plants make while they are
using gas as a backup fuel, and which have been
factored into every operator’s business plans.
In February 2013, Spain’s Council of Ministers approved
the new Royal Decree Law aimed at reducing the tariff
deficit. Two changes will be applied to the economic
regime under which the CSP sector is regulated
in Spain. Firstly, the Feed-in-Tariff will no longer
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Rest of the World
11.17 Thailand
Thailand – Country Overview
DNI:1,005 kWh/m2/year
Size:513,120 km²
Population (2012):66.79 million
GDP per capita (2012):
US$ 4,972
Installed power capacity:
47.3 GW
Annual electricity consumption:
135.2 TWh
Expected annual electricity demand in 2020:
222.6 TWh
Table 16(11): Current CSP Projects in Thailand
Title
MWe
Current
status
Kanchanaburi
5
Operation
Technology
Developer
Storage
Parabolic
Trough
Thai Solar Energy no
Co
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Thailand is gradually becoming an interesting market
for the deployment of CSP technology. Good solar
insulation alongside a strategic opportunity to match
CSP generation with biomass technology, given the
latter’s large availability, signal to hybrid small-scale
as the most promising solution for this Asian country.
However, a more consistent regulatory frame and
investments to guarantee grid capacity would be
necessary to fully exploit the high solar potential of this
region.
Thailand’s policy on electric power is regulated by the
Energy Regulatory Commission (ERC). This country
was one of the first to implement in Asia an incentive
scheme (FiTs) program in 2007. It is called “adder”
because it adds additional payment to renewable
energy generators on top of the normal prices received
by producers when selling electricity to power utilities.
A particular aspect of Thailand’s policy is that it has five
different long-term energy plans prepared by separate
government departments, and each of them focuses
on specific technologies or sources. As a consequence,
there is no integrated energy plan, mainly due to lack
of coordination amongst these various institutional
bodies. The two plans relevant to renewable energy
technologies are the long-term Power Development
Plan (PDP 2010-2030) and the 15-Year Renewable
Energy Development Plan (REDP 2009-2022) which
unfortunately set two different targets for the development of renewable energy generation.
www.csptoday.com
Last but not least, Thailand does not have a renewable
energy law backing up these policy plans. According
to the REDP, the target for solar power generation
installed by 2022 is 500 MW out of a total of 5,607.5 MW,
although it is necessary to consider the predominant
role of biomass (3,700 MW installed by the same year).
The lack of a robust and unified vision for the energy
sector causes discontinuous support to energy policy,
and this in turn has created a level of uncertainty for
potential investors. The feed-in-tariff for CSP technology
is currently 0.27 €/kWh and applies for 10 years only.
The possibility to negotiate international funding
with institutional bodies like the Asian Development
Bank or the World Bank is a further element aiming to
encourage investments. Although Thailand has only
two CSP plants at present, there are at least another 14
in the pipeline and European developers have already
expressed interest in this country.
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11.18 Tunisia
Tunisia – Country Overview
DNI:2,100 kWh/m2/year
Size:163,610 km²
Population (2012):10.78 million
GDP per capita (2012):
US$ 9,477
Installed power capacity:
4.3 GW
Annual electricity consumption:
14.6 TWh
Expected annual electricity demand in 2020:
22.8 TWh
Table 17(11): Current CSP Projects in Tunisia
Storage
Capacity
(hours)
Title
MWe
Technology
Status
State/Region
Developer
TuNur
2,000
Tower
Announced
Southern
Region
Nur Energie/ Top
Oilfied Services
Akarit
50
Parabolic
Trough
Planning
Gabes
STEG
4
Elmed CSP
Project
100
Parabolic
Trough
Planning
Tunisia
STEG
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
In 2008, Tunisia’s National Agency for Energy
Conservation released the Renewable Energy and
Energy Efficiency Plan, which targets 10% penetration
from renewable energy sources by 2011. Afterwards,
a law on energy conservation was amended in
February 2009 to allow independent production of
electricity from renewable energy. This law enables
large electricity consumers to produce electricity from
renewable sources to support their own consumption,
as well as to sell their electricity surplus to the grid.
The Tunisian Company of Electricity and Gas (Société
Tunisienne de l’Electricité et du Gaz, STEG) is therefore
committed to buying this electricity at domestic market
prices. However, no specific incentives are available to
promote large-scale production.
Aside from the law on energy conservation, there
are tax incentives in place for energy efficiency and
renewable energy projects:
Reduction of customs duties to the minimum rate of
10% (from 18%) and exemption from VAT for imported
equipment used for energy efficiency and renewable
energy
www.csptoday.com
Reduction of customs duties and exemption from VAT
for imported raw materials
Exemption from VAT for locally-manufactured raw
materials
Another existing policy is Law 2004-72, which promotes
the responsible use of energy. It defines the sensible
use of energy as a national priority, and identifies it as
the most important element of an effective policy for
sustainable development. The law promulgates the
following objectives: energy saving, renewable energy
promotion, and substitution of conventional energy
with renewable and sustainable alternatives.
Another active program in Tunisia that will
contribute to supporting renewable energy is the
Mediterranean Solar Plan (MSP), part of the Union
for the Mediterranean (UfM) project. The idea of the
UfM is to set out a policy framework for renewable
energy and energy efficiency to mitigate climate
change in the coming years. The MSP is expected to go
through a deployment phase from 2012 to 2020 and
to be financed by the World Bank and the European
Development Bank, with the ultimate goal of setting up
an effective green electricity import-export framework
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Rest of the World
under the Trans-European Networks initiative.
Furthermore, in 2009, the government launched the
Tunisian Solar Plan (TSP), which encompasses 40
projects. Most of the projects are solar (including three
CSP) and wind energy related, with the purpose of
saving around 660 metric tons of oil a year, representing
approximately 22% of the country’s total energy
production by 2016.
Tunisia has also joined forces with Algeria, Egypt, Jordan
and Morocco in the MENA CSP scale-up initiative.
The initiative will be implemented under the Clean
Technology Fund (CTF) and aims to:
Generate about 1 GW of energy, totaling about 15% of
the projected global CSP output
Secure more than US$ 4.8 billion of public and private
investment in CSP
Develop CSP-related transmission infrastructure in the
Maghreb and Mashreq regions for domestic supply
and exports.
Finally, in 2012, Tunisia received backing from the Clean
Technology Fund of US$ 20 million to improve its CSP
transmission infrastructure.
www.csptoday.com
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Rest of the World
11.19 Turkey
Turkey – Country Overview
DNI1,980 kWh/m2/year
Size783,562 km²
Population (2012)73.6 million
GDP per capita (2012)
US$ 10,498
Installed power capacity
44.8 GW
Annual electricity consumption154.8 TWh
Expected annual electricity demand in 2020
250 TWh
Table 18(11): Current CSP Projects in Turkey
Title
MWe
Technology
Current Status
Dervish CSP
Plant
50
Tower
Development
Greenway CSP
Tower
5
Tower
Operation
State/
Region
Karaman
Mersin
Developer
Storage
Capacity
(hours)
eSolar/ GE/
MetCapeSolar
TBC
Greenway
N/A
Source: CSP Today Global Tracker, August 2013
CSP Specific Policies and Incentives
Turkey is increasingly becoming a promising market
for CSP. The policy targets set by the government and
fast growing energy demand alongside the very good
availability of insulation are all elements encouraging
the development of solar energy generation projects.
However, the ability to access comparably cheap gas
resources and other technical and market barriers make
solar thermal electricity still far from competitive.
The Turkish energy policy has been in place for almost
two decades. The first financial model to support
renewable generation was developed in 1984, when
the BOT (Build, Operate, and Transfer) system was issued.
This model was then replaced by the BOO (Build, Own,
and Operate) model, before being removed in 2000.
In 2001, the Electricity Market Law introduced a new
incentive framework. This was followed by a law on the
utilization of renewables in electricity generation, first
issued in 2005 then amended in 2007 and 2011. A New
Energy Strategy Plan has been prepared by the Ministry
of Energy and Natural Resources (MENR) in 2010, setting
short-term targets for 2014, and long term objectives.
It establishes that energy efficiency, increasing the use
of renewables and integrating nuclear energy into the
energy mix are the main targets for 2023. As a matter of
fact, the strategic plan is not legally binding, however it
is expected that future legislation will incorporate this.
www.csptoday.com
Solar energy is recognized as an important component
of Turkey’s future energy mix and can provide 5.5% of
the fuel consumption by 2030. To achieve this objective,
Turkey initiated “The Private Sector Renewable Energy
and Energy Efficiency Project”, sponsored by the World
Bank through a new US$ 5.2 billion multilateral Clean
Technology Fund. The Renewable Energy Networks
(RENET) is another project between Turkish and
European Universities, carried out to address the R&D
weakness in the sector.
The Energy Market Regulatory Authority (EMRA)
has produced guidelines for solar energy project
developers, indicating the requirements for granting
a license. Amongst others, the land should not be a
first-class farming field, and no more than 2 hectares per
MW installed should be occupied. Resource assessment
should be carried out for at least 6 months and
applications would be only be approved in areas where
the global horizontal radiation is higher than 1,620
kWh/m2 per year. Although not specific to solar thermal
electricity, these guidelines give an indication of the
current relevant policy.
CSP has been listed as an important research area in the
‘Summary of National Mid & Long-Term Science and
Energy Technology Development Plan’ (2006–2020)
by the MENR. A US$ 1.2 million R&D project has also
been funded in collaboration with the Scientific and
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Rest of the World
Technological Research Council of Turkey (TUBITAK)
to address the two main barriers in the development
of CSP in Turkey, namely technology and costs.
Furthermore, feasibility research for a 10 MW central
tower plant was carried out by the electricity generation
company EUAS. The current financial incentive for CSP
technology is calculated as the sum of a base tariff (US$
0.13/kWh) plus a domestic manufacturing addition,
which is assigned when some components are provided
locally. The additions are structured in the following
way:
Vacuum tubes
US$ 0.24/
kWh
Reflecting Surface Panels
US$ 0.06/kWh
Solar Tracking systems
US$ 0.06/kWh
Heat energy storage systems
US$ 0.13/kWh
Tower and steam production system US$ 0.24/kWh
Stirling Engine
US$ 0.13/kWh
Integration of solar panels and
mechanical systems
US$ 0.06/kWh
Therefore, the maximum contribution for localizing the
supply chain is US$ 0.92/kWh and the overall threshold
for the feed-in-tariff is US$ 0.23/kWh.
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Rest of the World
Acronyms
ACRONYM
DEFINITION
AER
Authority for Electricity Regulation, Oman
ANEEL
Brazilian Electricity Regulatory Agency
ARENA
Australian Renewable Energy Agency
ASRT
Academy of Scientific Research and Technology
ASTRI
Australian Solar Thermal Research Initiative
BOO
Build, Own, and Operate
BOT
Build, Operate, and Transfer
CCEE
Electric Energy Commercialization Chamber, Brazil
CFE
Federal Commission of Electricity
CPI
Consumer Price Index
CSIRO
Commonwealth Scientific and Industrial Research Organisation
CTF
Clean Technology Fund
EGP
Enel Green Power
EMRA
Energy Market Regulatory Authority, Turkey
ERC
Energy Regulatory Commission, Thailand
GFE
Global Environment Facility
IRENA
International Renewable Energy Agency
KISR
Kuwait Institute for Scientific Research
LRET
Large-scale Renewable Energy Target
MATS
Multi-Purpose Applications by Thermodynamic Solar
MEMR
Ministry of Energy and Mineral Resources, Jordan
MENR
Ministry of Energy and Natural Resources, Turkey
MOEE
Ministry of Electricity and Energy, Egypt
MME
Ministry of Mines and Energy, Namibia
MSP
Mediterranean Solar Plan
NAMREP
Namibian Renewable Energy Program
NIRP
National Integrated Resource Plan, Namibia
OPEC
Organization of the Petroleum Exporting Countries
PDP
Power Development Plan
REC
Renewable Energy Certificate
REDP
Renewable Energy Development Plan
REEECAP
Renewable Energy and Energy Efficiency Capacity Building Program
REEEI
Renewable Energy and Energy Efficiency Institute
REIAN
Renewable Energy Industry Association of Namibia
RENET
Renewable Energy Network
RET
Renewable Energy Target
SFP
Sahara Forest Project
www.csptoday.com
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Rest of the World
SREC
Small-scale Renewable Energy Scheme
SREP
Scaling-up Renewable Energy Program
STEG
Société Tunisienne de l’Electricité et du Gaz
TSP
Tunisian Solar Plan
TUBITAK
Scientific and Technological Research Council of Turkey
UfM
Union for the Mediterranean
UNDO
United Nations Development Programme
www.csptoday.com
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Appendix A
Appendix A: Scorecard Methodology
The status of the CSP industry and its potential
varies greatly from one location to another. Indeed,
even well-established markets, while possessing
great expertise in the field of CSP, are not immune
to economic and political downturns. As such, it is
important to layout the current conditions the industry
is facing globally and locally.
The objective of this market scorecard is thus to rank
the countries according to the current potential
that they offer for the commercial development and
deployment of viable CSP technology.
In the current study, typical factors for all renewable
energy converters and CSP specific ones are integrated
in order to obtain a valid picture for each local market
and its attractiveness to CSP investors.
Figure 1(A): CSP Market Indicators and Influential
Factors(A) summarizes the components assumed to
have major effects on the development of a CSP market.
The implication of each component is briefly described
below.
In this section, several factors similar to the ones introduced in the market forecast were considered. Most of
the input to the model is based on statistical data, which
is processed and converted into a normalized index.
These points for each indicator are summed to get a
final score for each country. Whenever there are several
factors affecting an indicator, arithmetic averaging is
used to merge the factors into one indicator.
The country-specific score, prior to weighting, was
quantified, and compared against the maximum and
minimum values of the set. For example, calculation of
a country’s score for its DNI resources can be represented as:
Each factor’s score contributed to its corresponding
indicator and then summed to obtain the final score.
CSP Market Indicators
A country’s CSP market attractiveness and its potential
for development are influenced by several factors. Some
of these factors are common to all types of renewable
energy technologies and are related to a country’s
political and economic stability, its financial situation,
and needs of its energy sector. However, there are some
factors which are specific to the CSP market and which
determine its commercial readiness.
www.csptoday.com
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Appendix A
Figure 1(A): CSP Market Indicators and Influential Factors
CSP Market Indicators
– DNI
– CSP Potential
– Announced CSP
Capacity
Permitting
– Reguatory Policies
– Fiscal Incentives
Industry
Readiness
– Inustrial Competence
– CSP Related Industries
Ease of
Financing
Political &
Economic
Stability
– Global Competitiveness
– Political Instability
– Corruption Perception
National CSP
Targets
Energy
Sector
– Net Imported Electricity
– Oil/Gas Insecurity
– Electricity Consumption
Growth
Technical
Market
Potential
Renewable
Energy
Support
Technical Market Potential
This indicator investigates the domestic resource quality
for CSP technology. It takes into account time-independent factors like solar irradiation (DNI) and CSP
potential, as well as market-dependent factors, such as
announced CSP capacity in the country in question.
Renewable Energy Support
This indicator aims to measure the presence of the
different financing instruments or incentives to support,
encourage and enable expansion of a CSP-specific or
renewable energy market. Availability of each incentive
is scored as 1, while the lack thereof is scored as 0. These
incentives are grouped as given below:
Regulatory Policies score include the quota obligation,
net metering and tradable renewable energy certificates.
The data covered here include legislative measures and
laws that shape the policies of the countries in favor of
expanding renewables. The only factor which is specific
for installed technology is the feed-in-tariff (FIT). FIT
is also analyzed in the current category; however, it is
www.csptoday.com
assigned four times more weight compared with other
governmental incentive factors.
Fiscal Incentives are mainly capital subsidies,
investment or production tax credits, reduction in taxes
and energy production payments.
Public Financing mechanisms in this section are public
investments loans, grants and public competitive
bidding.
Ease of financing
This indicator is mainly a composite approach between
subjective and objective ratings. It is based both on the
general local financing index annually published by the
World Bank and also subjective ratings on the ease of
loan access and financing through local equity market.
Country rankings given in this index are converted
into scores using the same normalization procedure
described above. Subjective scores take into account
survey results, interviews and the authors’ knowledge
and experience.
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Appendix A
National CSP Targets
This indicator converts the announced CSP target to the
required addition of capacity per year. The larger this
annual capacity increase is, the larger the CSP market for
new players.
Energy Sector Indicators
The energy sector index represents the local prospective
benefits of CSP considering the local electricity market.
It analyzes the net electricity imports, local oil insecurity,
gas security, and electricity demand increase.
The more the country’s market is in need for electricity
and energy, the more renewable energy projects bear
a chance at competing against domestic conventional
energy production. Oil and gas insecurity values are
calculated through the analysis of domestic proven oil
and gas reserves and their consumption rate.
Industry Readiness
This criterion was evaluated by considering the presence
of local expertise that could support the insurgence of
CSP at a technical level. Such expertise can originate
from boiler makers, piping, steel producers and so on.
While mirrors, metal support structure, pylons and
general assembling or civil works could be performed by
local labor; the share of local work contribution is limited
by complexity and expertise availability.
Industry readiness is composed of both local industrial
abilities and availabilities of CSP-specific manufacturing
facilities.
Typical industrial indicators are local supplier quantity,
local supplier quality, production process sophistication,
availability of the latest technologies and availability of
scientists and engineers. These factors are indicative of
the local industrial background.
CSP-specific indicators investigate the availability of glass
manufacturing, bending and coating facilities, electronic
and cabling industries, local steel production and piping
capacity. These capabilities are the basic requirements
for the local development of a CSP industry.
Political and Economic Stability
The political and economic climate of the country
shapes the whole business environment in a country
and thus affects the investment activities in all sectors
including CSP.
www.csptoday.com
Three existing indices that quantitatively measure these
effects are global competitiveness, political instability
and corruption perception. Performance of each
country is published annually by companies and organizations. For this study, the Global Competitiveness
Report published by the World Economic Forum is
referred to.
Permitting
Although the main approach in the model was to
develop an objective ranking system for the countries
of interest, for scoring, the permitting process an expert
opinion-based quantification was used, based on the
survey results, interviews and self-experience.
Relative Weight of the Indicators
At the starting point of this analysis, the relevance of
these factors was determined by conducting a survey,
with responses from 630 renewable energy experts, of
whom 259 are experts in the CSP industry. All indicators
are aggregated using the weightings derived from the
mentioned survey and presented in Table 1(A): Survey
Based Indicator Weights(A).
Table 1(A): Survey Based Indicator Weights
Parameter
Weight
Renewable Energy Support
25%
Ease of Financing
20%
National CSP Targets
17%
Technical Market Potential
11%
Energy Sector
9%
Political and Economic Indicators
8%
Industry Readiness
6%
Permitting
4%
Limitations
Even though the current methodology takes into
account the major factors for CSP market development,
there are many other indicators that could affect the
ranking presented in this report. Some of the important
indicators that are not included in this analysis are land
and labor costs, grid connectivity and subsidies on the
fossil fuel and energy taxation.
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Appendix A
In addition, scores only represent the current market
situation, which is prone to modifications in the short
or long term. For example, current high scores and
the industry-leading position of the U.S. will change
remarkably in the near future, considering the quickly
changing market forces towards the use of natural gas
for electricity generation.
Definitions:
Technical Market Potential
The technical potential of a country for CSP development is an important metric to consider when
comparing different markets. This potential is not only
defined by the available solar resource, but also by other
factors such as water availability, environmental restrictions, lands slopes and grid connection – all critical to
quantifying the true potential for CSP deployment.
While an exact estimate of the true potential of a market
is difficult to obtain, and the data found in different
papers and studies are sometimes difficult to compare,
the combination of the estimated CSP potential (in
terms of installed capacity and energy generation), the
solar resource (DNI), the capacity announced as well as
capacity in development, together form representative
metrics of the commercial potential of CSP technologies. Therefore, these factors were combined in order
to quantify the technical potential of each market. In
addition, various recognized data sources such the
DLR’s DNI Atlas, along with the CSP Today Global Tracker,
were used as input. As a result, countries such as USA,
Saudi Arabia, Chile, Morocco and South Africa stood out
in the technical market potential ranking.
Fiscal Incentives
Capital, Subsidy, Grant or Rebate
Investment or Production Tax Credit
Reduction in Sales, Energy, CO2, VAT or other Taxes
Energy Production Payment
Public Financing
Public Investment, Loans or Grants
Public Competitive Bidding
Ease of Financing
Under today’s global economic situation, getting a CSP
project financed has shown to be critical and challenging
as well as complex, depending on the particular local
conditions of the market considered. In order to define
a metric that reflects the ease of financing for a CSP
project, several macro-economic and financial factors
were combined. The DoingBusiness.Org website, in
conjunction with the World Economic Forum’s “The
Global Competitiveness Report 2012-2013” report, were
used as main sources, together with expert opinion based
on real projects for quantifying the ease of financing at
a country-wise level across a multitude of factors, which
together formed the ease of financing metric.
Doing Business
Getting credit
Protecting Investors
World Economic Forum
Access to Financing
Restrictive Labor Regulations
Tax Rates
Inflation
Renewable Energy Support
National CSP Targets
Renewable energy support is one of the most decisive
factors for investing in CSP technologies since emerging
CSP markets are still at the early stages of the learning
curve, where they need some type of support to push
and boost its development. Several parameters are
essential in forming a country-specific Renewable
Energy Support metric, from regulatory policies, to fiscal
incentives, to public financing. The REN21 Renewables
2013 Global Status Report was used as a main source
combined with expert opinion, providing a direct score
for each of the underlying parameters considered.
In order for a country to be attractive to CSP investors,
it is important to have real and solid CSP targets that
support a country’s decision to create a midterm
industry, which encourages the establishment of a
local CSP industry. CSP players are more interested
in investing in such markets, where they can find
a continued pipeline of projects that compensate
investment and development costs, rather than in
places with just a couple of potential projects and no
further activity expected.
Regulatory Policies
Feed-In Tariff
Electric Utility Quota
Net Metering
Tradable Renewable Energy Declaration (RED)
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As a metric for quantifying a country’s decision to boost
CSP development, the national CSP targets announced
by the different governments were assessed. To do
so, the announced installed capacities were used in
combination with metrics to quantify the real chances
of meeting those goals.
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Appendix A
Permitting
Although the permitting and bureaucratic process is
usually not one of the main factors that are evaluated
when comparing different countries, in some markets,
the complex, lengthy and costly permitting process
required by local authorities can be an important
hurdle that can discourage CSP investors. This is even
more important for foreign companies that need to
spend quite a lot of time in understanding the local
regulations and eventually require the support of a local
partner. Contrary to this, an easy permitting process
makes it easier to enter a new market, which at the
end favors CSP activity. The DoingBusiness.Org website,
together with expert opinion, was used to quantify the
permitting process ranking of the countries considered.
Industry Readiness
The level of development of a country’s industrial
network is an important factor in evaluating the real
potential of a new CSP market. Although under the
current globalized economy, importing components
and services from all over the world does not represent
a major issue, the availability of local industry and
engineering services can be a good way to reduce
costs and make CSP projects more competitive. Besides
which, high levels of localization are usually required by
the governments. The World Economic Forum’s “Global
Competitiveness Report 2012-2013” report was used
as a source for quantifying Industrial Indicators and
CSP-specific Indicators across the considered scorecard
countries. For Tunisia, the Industrial Indicators this year
were not compiled in the World Economic Forum’s 2013
report owing to the country’s current and therefore,
the minimum scores across the competing countries
were used to minimize the overall ranking penalty.
Forum’s 2013 report owing to the country’s current
conjuncture and therefore the minimum scores across
the competing countries were used to minimize the
overall ranking penalty.
To assess the political environment, the Viewswire.eiu.
com Social Unrest (political instability) index score was
used, and to assess corruption levels, the Transparency
International’s Corruption Perceptions Index 2012 was
used.
Energy Sector
A strong energy sector is crucial to enable and promote
CSP development. Countries with high electricity
consumption growth require new installed capacity
to be added to the national grid, and in some of
them, CSP can be a good energy source that can offer
dispatchable energy. Countries with high dependence
on fossil fuel imports for their electricity generation mix
might be looking at new energy sources, such as CSP,
which can reduce their energy insecurity and their risk
of price volatility. To estimate the country-wise score
of the energy sector for the considered countries, the
following energy metrics were aggregated from The
World Bank’s indicators:
Net Imported Oil
Oil Insecurity
Gas Insecurity
Electricity Consumption Growth
Political and Economic Indicators
A positive political and economic environment is a
critical factor when investing in a new CSP market. For
example, due to the revolutions that some of the MENA
countries have witnessed over the last two years, the
development of CSP projects was negatively affected
and in some cases even canceled. To quantity the
political and economic atmosphere, several metrics
such as the Global Competitiveness Index, Political
Instability and Corruption Perception Index were used
to estimate the political and economic metric. The
World Economic Forum’s “Global Competitiveness
Report 2012-2013” report was used as a source for
quantifying the global competitiveness index across
the considered scorecard countries. For Tunisia, these
factors were not compiled in the World Economic
www.csptoday.com
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Appendix B
Appendix B: Forecast Methodology
This section presents the methodology used for the
development of the market forecast. The methodology
can be divided into the following main tasks:
Data Collection
This refers to the gathering and organization of
information to create the backbone of the forecast.
Expert Opinion
Based on the survey conducted, the forecast’s most
influential parameters were identified. Due to the
current infancy of the CSP industry, historical data
are limited to few countries and modeling becomes
a difficult exercise. Several assumptions are therefore
required to carry on with the study. In order to have a
basis for the model, the opinions of CSP experts were
obtained and analyzed through an extensive survey of
243 CSP experts.
Modeling
Using the collected and processed data, a simplified
representation of this complex system was conceived
using a technology diffusion model based on the
well-known logistic curve.
Scenarios
Since the historical data related to CSP are too limited
and the future bears high uncertainties, a set of
scenarios investigating a range of possibilities has
been analyzed under a set of established assumptions,
including optimistic, conservative and pessimistic.
Further information on these scenarios is provided in
this appendix.
The ultimate objective of this exercise was to develop
a comprehensive model that would allow five and
ten-year market forecasts to be performed using clear
assumptions and defendable methodologies. It is
important to remember that the elaboration of a market
forecast, especially in a fast-changing environment like
the renewable energy industry, is a challenging task that
requires not only time, but also research. Indeed, the last
few years have seen a number of prestigious companies
and agencies continuing to perform a plethora of studies
in this regard with poor prediction success. The current
model is not complex, yet it takes into account the main
factors affecting the development of the CSP market.
Data Collection
First, the historical and recent developments of the CSP
industry were investigated and analyzed to determine
the main barriers and drivers affecting its growth; the
main influencing factors are identified in figure 1(B).
The effect of each factor for the regions of interest was
compiled through extensive background research.
The parameters presented in table 1(B) are used to
quantify and weigh the elements expected to influence
the CSP industry. Direct factors are considered to be
more predictable in their influence on the market, while
indirect factors are thought to be subject to considerable
uncertainty and are thus extremely difficult to foresee,
perhaps having a more subtle effect on the industry.
Results and Discussion
A number of CSP projects in the construction
stage, development or planning pipeline, as well as
announced national targets, were used to calibrate the
forecast model.
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Appendix B
Figure 1(B): Forecast Influential Parameters
CSP Today Market Enabling
Factors and Forecast Strategy
direct Factor
Indirect Factor
decision Points
Market Expansion
Environmental Measures
International Agreements
Global
Global
Technology Maturity
Global Energy Demand
Global Economic Stability
Unconventional Fossil
Fuel Reserves
PV Price
Ease of Financing
Market Saturation
National CSP Targets
Local Energy Demand
Permitting
Incentives
Grid Coverage
Water Availability
DNI
Community/Local Specific
Community/Local Specific
Conventional Power Cost
Political Stability
Population/Economic
Growth
High Cost of Energy
Presence of Supporting
Industries and Local
Expertise
Data Collection and Expert Opinion
Although influencing factors are straightforward to
define, quantifying such factors and converting them
into predictors can be a difficult task. In order to define
the importance of each factor, a survey was conducted
through an online platform. Expert interviews were also
conducted to gain informed opinions on the topic. After
these analyses, a relative percentage was given, and
weight factors were assigned to the factors and inserted
into the model.
Other than the influencing factors, two decision points
were also defined in the model. These are extremely
critical factors that can completely block the take-off
of an industry, or boost it by providing an additional
driving force to CSP deployment. For this reason, PV
prices and the extraction rate of unconventional fossil
fuels were analyzed separately. An 80% overall impact
weight was assigned to the influencing factors and 20%
to the decision points.
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Table 1(B): Influencing Factors and Weights for CSP Development
Maximum value: 5
(Based on the survey)
Influencing factors (Impact weight 80%)
Relative weight
of each factor (%)
4.2
4.9
Market expansion
4.4
5.2
Environmental measures & climate change
3.2
3.8
Conventional power cost
2.9
3.5
International agreements
3.0
3.5
Ease of financing
3.7
4.3
Market saturation
2.0
2.4
National CSP targets
3.5
4.1
Energy demand
3.5
4.1
Permitting
3.1
3.6
Incentives
3.9
4.6
Grid coverage
2.9
3.4
Water availability
2.5
3.0
DNI
4.1
4.9
Global energy demand
3.5
4.1
Global economic stability
3.8
4.5
Political stability
3.8
4.5
Economic growth and stability
3.8
4.5
High cost of technology
3.1
3.7
Presence of supporting industries and local expertise
2.9
3.4
Indirect Local
Indirect
Global
Direct Local
Direct Global
Technology maturity
Technical Growth Drivers
Technology Maturity
For each of the drivers listed above, a weight representing their importance was used to scale the global or
country-wise score achieved. The weighting associated
with the technical growth drivers was from negative 10
to positive 10; a positive value denoting an enabling
factor and a negative value denoting an abating effect.
The development of the global CSP market is highly
dependent upon technology cost reductions. Increased
efficiencies and matured technology are among the
most important global drivers enabling investment in
and reduction of the operating costs of CSP plants. The
state of the technology and prospective improvements
can set the rules for competing with other renewables
and eventually with conventional power generators.
The concept of technology diffusion and maturity
(lifecycle) is demonstrated in 2(B):
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Appendix B
Figure 2(B): Technology Diffusion Lifecycle
100
75
Market Share %
50
25
Innovators
2.5%
Early
Adopters
13.5%
Early
Majority
34%
Late Majority
34%
Grid Coverage
As CSP is a high-capacity centralized power generation
technology, it requires transmission infrastructure to
reach the site of demand. It is also advisable that this
infrastructure be expanded to neighboring regions,
allowing exports and regional trade. Grid extension in the
MENA region is an example of how beneficial this factor
may be. Two such examples are the interconnection
between Tunisia and Italy and the GCC grid, both of
which constitute significant local CSP-enabling factors.
Water Availability
Because CSP technology can require considerable
amounts of fresh water if the most cost effective
wet-cooling is utilized, the availability of fresh water
in the country can have a direct influence on the
feasibility of a project since dry-cooling is typically more
expansive and less efficient.
DNI
A fundamental technical driver for reducing the cost of
CSP is the availability of direct normal irradiance (DNI)
received on a given area. Considering this inherent
characteristic of CSP, the industry will first consider
projects in the highest DNI regions around the globe.
Another technical limitation may be access to gas
networks for backup in some locations, and fresh
water. This latter factor is especially relevant as a large
numbers of CSP plants are deployed in dry regions, if
not deserts, where DNI values are highest.
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Laggards
16%
0
As CSP capacity is ramped up, it is expected that the
most favorable sites will be used first and therefore, the
positive influence of this factor will be reduced over
time.
Presence of Supporting Industries and
Local Expertise
Industrial experts argue that along with the improved
technical state of the technology, further reductions in
the costs for CSP electricity in developing countries are
achievable through local manufacture of components
and use of local service providers and labor force.
These factors are therefore positive enablers for CSP
deployment.
Market Growth Drivers
The market growth drivers were determined in the
same fashion as explained for the technical growth
drivers (assigning a score from -10 to +10).
Market Expansion
Current growth rates of the CSP market are not
governed by production capacity. In fact, steep cost
reductions will be driven by market opportunities,
which require further expansion of today’s market and
the creation of new opportunities on a global scale,
contributing positively to the reduction in CSP prices.
Market Saturation
Technology diffusion not only depends on the
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Appendix B
maturity of the technology, but also on market pull.
When a technology is adopted on a large scale, local
markets may become saturated and reduce further
development opportunities. Since the relevant CSP
markets remain at a fairly early stage of development
and the forecast horizon is fairly short, a low weight
was assigned to this factor based on the CSP Today
Market Survey results. An example of a saturated market
would be Spain, as it features an exceeding amount of
operating capacity and requires no more new installed
capacity to meet demand.
National CSP Targets
While many countries have committed to national
renewable energy targets, not all have established
CSP-specific targets. This factor remains reflective of a
given government’s inclination to invest in alternative
energy technology such as CSP, and is therefore a
critical indicator of market growth. As governments
become more conscious and progressive in their energy
strategies, an increasing share of renewable energy is
expected to be targeted and contribute positively to
the development of CSP.
Energy Demand
Another factor affecting market development is the
cumulative and local energy demand change and its
distribution around the globe. For example, considering
India’s electricity demand, which is expected to double
by 2022, it is evident that careful planning for the
country’s future energy mix is crucial for sustainable
development, long-term profitability and energy
independence. Rapidly increasing energy demand is
therefore an incentive for a nation to invest and pursue
renewable energy technologies such as CSP.
Permitting
In both relatively established markets – Spain and
the USA – and emerging ones, such as India, South
Africa and Morocco, a common challenge for new CSP
plants is obtaining permits. The wheels of bureaucracy
generally grind very slowly; in some cases, doubling
project lead-times. In California for example, environmental studies on state or federal land can take up to 24
months.
Environmental Measures and Climate
Change
Energy policies can be directly derived from environmentally-related initiatives. An example of such a
coupling is the Kyoto Protocol and its influence on 2020
renewable energy targets. Further efforts to decarbonize national energy mixes will sustain the desire to
pursue renewable alternatives such as CSP, making the
influence of this factor significant.
International Agreements
The specific needs of developing countries play a
crucial role in the effective development of the global
CSP market. For example, while CSP in the MENA
region is primarily being developed for export, other
players (such as India and the USA) are ramping up
CSP capacity to cover their own energy requirements.
Considering the already-high marginal cost of electricity
in several potential importing countries (mainly in
Europe), electricity exports are expected to be a catalyst
to the continuous growth and development of CSP,
especially for North African countries. This model takes
into account the positive influence that international
energy trading agreements between countries can have
on renewable energy roll-outs.
Global Economic Stability
In a society where some of the most traded commodities are energy related, the coupling between energy
and economic development is significant. Since
renewable energy projects require by nature large initial
investments, aversion to investing due to excessive
fluctuations in the economy caused by inflation or the
imminence of a recession, for example, can detrimentally affect the growth of technology such as CSP, when
investors remain insecure and in most cases unwilling
to invest in large-scale projects.
Political Stability
Political stability refers to the level of threat posed to
government, society and business by social protests.
This factor encompasses economic distress and
underlies the vulnerability of a country. Political stability
therefore enables the establishment of strong shortand long-term comprehensive energy policies.
Socio-Political Growth Drivers
Economic Growth
Socio-political growth drivers were determined in the
same fashion as technical growth drivers (assigning
a score from -10 to +10). The subtle influence of
socio-political elements should not be neglected as it
has proven to be extremely significant in the past.
As mentioned previously, the economic and energy
agenda of a country are often interrelated. A country
with escalating demographics and a rapidly growing
economy will have an urgent need to ramp up
its energy supply. Countries demonstrating rapid
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Appendix B
economic expansion will thus exhibit a stronger pull
towards the deployment of renewable energy technologies, such as CSP.
technologies such as CSP. This factor therefore has an
increasing and positive influence on the deployment of
CSP plants.
Cost Growth Drivers
High Impact Decision Points
The cost growth drivers were determined in the same
fashion as explained for the technical growth drivers
(assigning a score from -10 to +10).
Since some external factors can have a stronger
influence on CSP markets, a second decisional
instrument was created in the forecast model, featuring
the threat of PV competition and the increasing amount
of non-conventional resources, which in the USA have
already revealed their effect on CSP projects.
Conventional Power Cost
For all renewable energy technologies, achieving
grid parity constitutes the ultimate objective. When
incentives are disregarded, the gap between the
levelized cost of electricity of renewable energy
technologies such as CSP, and the price of conventional
power, is increased when fuel prices drop. Alternatively,
a reduction in conventional fossil fuel reserves will
ultimately lead to higher energy prices and promote the
decarbonization of the energy mix, hence promoting
the development of technologies, such as CSP. This is a
particularly sensitive factor, as, on a year-to-year basis,
energy commodity prices such as oil and gas tend to
fluctuate drastically, as was the case with gas in the USA
in Q2-2013, compared with Q2-2012.
Ease of Financing
Renewable energy technologies are intrinsically more
challenging to finance than conventional power plants,
due to their high capital costs. The limited maturity of a
technology such as CSP also increases investment risk,
which can induce reluctance from investors to embark
on a project. With increasing maturity, decreasing cost
and proper support through regulatory frameworks,
financing blockages are expected to attenuate.
Incentives
Incentives have been paramount in the development
of renewable energy. While this was fully justified in the
stages of technological infancy, the successful roll-out
of CSP technology and its ability to be utilized commercially will lead to such policy support being revised and
reduced. CSP will therefore have to further boost its
competitiveness, and in turn, the positive influence of
incentives is expected to diminish over the next decade.
Escalating Cost of Energy
While energy prices vary over time, in place as well as
in commodity, depending on a long list of factors, a
general trend is that dependence on conventional fuel,
along with growing economies and demographics,
will sustain the price volatility of energy commodities,
driving the desire to pursue alternative energy
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PV Competition
Until the PV price peak in mid-2008, the CSP industry
reported sustained growth. However, with the Asian
manufacturing players entering the PV market, PV prices
have steadily decreased by 40% each year. The peak
price of USD 4/Wp in 2008 has since dropped four fold.
The ease of PV financing, thanks to its well-established
track record, has also contributed to displacing the
growth of CSP.
Without discarding the distinct advantages of both
technologies, at the current market size of CSP there is
no mystery as to why PV prices have a big influence on
the development of CSP. Two years ago, this competition became visible in the USA, with CSP projects
totaling more than 1 GW being replaced by PV.
Still, considering the expected decrease in costs and
CSP’s unique utility-level storage capabilities and
hybridization possibilities with fossil fuel power plants,
as well as the potential new applications for this
technology in emerging markets, CSP may prove to be
more profitable than PV, moving forward.
Weights of 10.1/15 and 9.9/15 were assigned to this
factor, based on the research team’s opinion for the
optimistic, conservative and pessimistic scenarios,
respectively.
Non-Conventional Resources
In contrast to the peak oil argument, some argue that
liquid fuels production will be sufficient to meet global
demand well into the 21st century, as rising prices
stimulate new discoveries, enhanced recovery and the
development of non-conventional resources such as oil
sands and shale gas.
For example, recent discoveries of huge shale gas
reserves in the USA are changing the rules of play. After
2014, the USA’s ambitious renewable energy policies are
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Appendix B
expected to be watered down through an adjustment
of the current regulations and promotion of natural gas
in the electricity sector.
There are significant proven and unproven non-conventional fossil fuel prospects all around the world.
However, apart from the USA, their global production
is assumed to be almost negligible over the next five
years, taking into account the lack of experience, long
lead times, and environmental concerns related to
extraction methods.
The effect of the possible exploitation of such resources
is included in the model as a major source of negative
impact on the development of the CSP market.
Weights of 10.1/20 and 9.9/20 were assigned to
this factor, based on the research team’s opinion for
the optimistic, conservative and pessimistic cases,
respectively.
The influence factors and high decision points
presented in table 2(B) and table 3(B) were respectively
allocated 80% and 20% of the total decision score prior
to weighted scaling.
Table 2(B): High Impact Decision Points
Decision Points (Impact Weight: 20%)
Global
Unconventional Fossil
Resources
(shale gas, oil sands, etc.)
PV Price
Once the selected factors were retained for consideration in the forecasting model (as indicated in the
previous section), the next step was to determine the
influence of these factors on the development of CSP.
Both direct and indirect factors at global and local
levels could have both types of influence –positive
and negative – on the development of CSP, as shown
in Table 3(B): Factor Ranking System. Once aggregated
with the score of other factors, the rate of technology
diffusion was either scaled or reduced as per the
general forecasted market condition.
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Table 3(B): Factor Ranking System
Levels of Influence
Ranking
Strong Growth Enabler
10
Growth Enabler
5
Neutral
0
Growth Attenuator
-5
Strong Growth Attenuator
-10
To quantify the influences of the retained factors,
extensive research was performed to gather reliable
information and determine the effect of these factors
on the individual markets.
The main information sources used in this report were
as follows:
Internationally-recognized publications (IEA Solar
Energy Perspectives, World Bank, IEA CSP Road Map,
Greenpeace, US EAI, etc.)
Journals and papers
Conference presentations
Market development reports from companies and
agencies
Reports and policies regarding FITs from various state
and central governments
Survey results
Modeling
Once the retained factors were identified and the data
compiled, a forecast model was developed. This forecast
is based on learning curves and on a simple logistic
S-curve technology diffusion model.
Combined component costs are found to diminish over
time, mainly due to learning by doing and economies
of scale, as well as the introduction of new technical
solutions. The wind industry is a common example
of this, where a standard drivetrain configuration has
not yet been reached despite global installed capacity
exceeding 240 GW. While a CSP plant’s power block
may not profit from large cost reductions in the future,
the solar field certainly still offers cost saving potential.
The learning curve describes the past evolution of
system costs as a function of global cumulative installed
capacity, and is usually extrapolated to predict future
cost variations. The learning rate (LR%) represents the
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Appendix B
percent reduction in prices with every doubling of
installed capacity.
Optimistic Inclination
Influencing Factors
Theoretically, the cost of each component (C) at time
t is related to the cost at time zero, the ratio of global
installed capacity (P) and a technological progress rate
(PR) as follows:
This scenario assumes the adoption of ambitious
policies for, and major participation by, the international
community in CSP development. It is based on a set of
optimistic but nonetheless achievable economic and
technological assumptions.
C t = C0 ( Pt ) log(PR)/log(2) where PR = 100 – LR%
Where A simple technology diffusion model is used in
the forecast to predict the time evolution of installed
capacity globally and at a regional level. Technologies
do not grow continuously over their lifetime; there
are always some limiting conditions, such as material
availability or energy resources. The capacity growth
and doubling time for each technology also depend on
the diffusion or market penetration of the technology.
This variation in installed capacity is modeled using a
logistic function by Winkler, as follows:
Ct =
ert
( 1/C0) – ( 1/M ) + ( ert/M )
Where t is measured in years, r is the annual growth
rate and M is the maximum capacity when there is no
remarkable increase in installed capacity.
In this forecast, the above formula is used to project
future capacity growth based on the growth rate
calculated through influence factors. The retained
influence factors were used as amplifiers/attenuators of
market trends and compared to the maximum national
CSP potential. Our forecast is based on a technology
diffusion model which requires the input of a maximum
capacity towards the end of its lifecycle.
In this scenario, CSP projects are developed in larger
size, and presently unavailable technologies are
developed to the point at which they become fully
commercial. The market embraces the continuation
of support mechanisms and removal of resource-consuming administrative barriers. The current technology
diffusion model fits an S-curve for the market development of CSP technology.
In the optimistic outlook, the capacity under
construction and development is deployed as per table
4(B) until 2017:
Table 4(B): Optimistic Deployment of Plant in
Construction and Development
YoY Fulfillment (%)
Optimistic
Construction 2014
60.00%
Construction 2015
35.00%
Construction 2016
5.00%
Development 2016
40.00%
Development 2017
30.00%
Scenarios
Decision Factors
The scenarios introduced in this forecast are meant to
help investors and decision makers adapt their plans
in this rapidly changing environment. As mentioned
before, however, there are limits to knowledge that lead
to uncertainties. As such, not addressing all possibilities
can result in overly rigid prescriptions for future actions.
Recognition of these uncertainties in this model has led
to the development of three different scenarios for this
forecast: Optimistic, Conservative and Pessimistic.
For the optimistic scenario, the current hindering effects
of low PV prices and rising extraction rates of unconventional shale gas do not accentuate in the coming
years. The model considers that the current downtick in
PV prices does not reflect a well-balanced market, but
rather an uneven demand/supply relationship which
will result in slightly increasing and then balancing
prices in the near term. It also assumes that fair competition from PV can be tolerated by a globally expanding
CSP market.
From the retained factors considered for the model, a
range of time-varying influence is considered to yield
an optimistic/pessimistic range, based on the variability
of published data.
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Although gas companies are posting higher shale
gas reserves and extraction rates in the USA, there is a
considerable doubt and criticism about the announced
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Appendix B
numbers. If the environmental risks related to their
extraction are also factored in, it is assumed that in the
timeline of this forecast, global exploitation of these
resources may slow down, but will not dominate the
renewable energy market.
Conservative Inclination
Influencing Factors
The conservative scenario is the most probable one,
assuming that the current political and economic
climate prevails together with the encouraging
incentives for renewable energy, even though they tend
to be revised regularly. As the developing countries are
far from maturity, the global growth rate is assumed
to remain positive for the time horizon of this forecast.
Although the technology development is uncertain
for the considered time period, this scenario considers
regular improvements in the CSP systems without any
major breakthrough.
In the conservative outlook, the capacity under
construction and development is deployed as per table
5(B) until 2017:
Table 5(B): Conservative Deployment of Plant in
Construction and Development
YoY Fulfillment (%)
Conservative
Construction 2014
60.00%
Construction 2015
25.00%
Construction 2016
10.00%
Development 2016
30.00%
Development 2017
20.00%
Pessimistic Inclination
Influencing Factors
The pessimistic scenario assumes a major weakening
of existing support mechanisms and a lack of political
support for CSP in the future. In other words, incentives
vanish and renewable energy targets do not suffice
in further supporting the CSP industry. Furthermore,
this scenario maintains a prolonged global economic
slowdown. According to this scenario, the market does
not develop as per its potential, resulting in a delay in
the expected technological and economic improvements for commercial take-off.
In the pessimistic outlook, the capacity under
construction and development is deployed as per table
6(B) until 2017:
Table 6(B): Pessimistic Deployment of Plant in
Construction and Development
YoY Fulfillment (%)
Pessimistic
Construction 2014
60.00%
Construction 2015
15.00%
Construction 2016
10.00%
Development 2016
20.00%
Development 2017
10.00%
Decision Factors
Large discoveries of new unconventional fuel are also
integrated as a hindering factor in this scenario, as
well as an increasing competitiveness from PV in the
renewable energy sector.
Decision Factors
Results and Discussion
According to this scenario, high competition from
PV will continue due to further price drops. Thanks
to its inherent advantages, however, CSP will be able
to survive and stay in the game, with modest cost
reductions resulting from technological improvements
and global market expansion.
The model estimates installed capacity from both a
global and local perspective, while technical learning
and technology diffusion are based on a global
experience. This is further supported by the fact that
historical data are only available for certain pioneering
countries. However, the global model is limited in its
scope and requires adaptation of the inclination factors
to account for local influences.
In some local markets, the discovery and economical
extraction of unconventional fossil resources will limit
the CSP deployment rate, but at a global level, CSP
technology will achieve increasing capacities.
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On the other hand, there are great uncertainties in local
forecasts, considering the lack of deployment history
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Appendix B
in many countries and presently unpredictable market
conditions. That said, integration of the many local
factors present in the model increases the reliability of
the forecast, along with the three scenarios considered.
The forecast results are also compared with the
announced national targets, and related assumptions
are reviewed in cases where the optimistic forecast
predicted lower capacities.
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appendix c
Appendix C: Alternative
Applications for CSP
Mining
In order to understand how CSP technologies can
integrate into the mining industry, it is important to
visualize how the mining industry operates. The mining
process can be divided into three broad stages, each
involving several operations:
The first stage is extraction, which includes activities
such as blasting, drilling, digging, ventilation and
dewatering in order to loosen and remove material
from the mine. Large amounts of electricity is used
for this stage for powering equipment such as cranes,
pumps, heaters, furnaces, etc. (if electricity grid is not
available, a CSP plant with thermal energy storage can
provide this demand).
The second stage is materials handling, which involves
the transportation of ore and waste away from the mine
to the mill or disposal area.
The third stage that includes beneficiation and
processing is completed at the processing plant. This
stage recovers the valuable portion of the mined
material and produces the final marketable product.
Beneficiation operations primarily consist of crushing,
grinding, and separations, while processing operations
comprise of smelting and/or refining. During this stage,
a high amount of thermal energy is required, which can
be provided by CSP.
Therefore, based on the specific type of energy
requirements of each stage, CSP can be a good source
of energy largely in stages 1 (mainly in the form of
electricity) and 3 (mainly in the form of heat)
Heat integration into mining processes:
high and low temperatures
CSP technologies can provide large amounts of energy
at different ranges of temperatures as high as 550-600°C
depending on the CSP technology employed. There
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are various technologies for harnessing solar energy,
so depending on the required temperature, one must
choose the appropriate technology for each application. This feature allows CSP technologies to adapt to
the needs of different industrial processes. For example,
the technology of a flat plate solar collector generally
can reach “low” temperatures of up to 100°C. This is
higher than the temperatures needed in some mining
and industrial processes such as tempered electrolyte
(~47°C), washing and cathode detaching (~75°C) and
heap leaching (~35°C) among others. On the other
hand, CSP technologies can provide high temperatures
for other mining processes such as heavy fuel oil
pre-heating (needed in melting processes) and copper
electro-winning process.
CSP as a replacement of fossil fuels in the
mining industry
CSP can be used as a pre-heater of heavy oil fuels
required in boilers and furnaces for energy-intensive
mining processes. Normally these heavy-oil fuels are of
very low quality and need to be pre-heated to facilitate
their transportation within the mining facilities.
Also, the integration of a CSP plant can replace the use
of conventional energy sources to heat solutions in
different mining processes: The replacement share will
depend on the particular mining process, site-specific
irradiation conditions, and space availability for the
installation of the solar field.
For example, the process of copper electro-winning
is very energy intensive, requiring the electrolyte to
be heated to a temperature of around 50°C. Indeed,
this temperate can be easily achieved by flat plate
collectors, but higher temperatures of up to 150°C are
needed in order to store the heat in water tanks (around
95°C) for extended operation hours of the mine (after
sun hours), and here CSP technology comes into play.
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appendix c
Currently, most mining companies use diesel heaters
for these processes. In replacing diesel heaters with CSP,
mining companies will be significantly reducing their
operational costs (including the elimination of several
diesel transportation trucks to the mining-site). For
example, the CSP plant at Minera El Tesoro (Antofogasta
Minerals -Abengoa) is expected to substitute more than
50% of the diesel fuel currently used in the solution
heating process for the copper electro-extraction
process in the mining production (Abengoa, 2013).
In summary, the use of CSP technologies with storage
can be a reliable, dispatchable and cost effective alternative to supply the constant energy demand required
in the mining industry, offsetting the use of expensive
conventional fossil fuels that is most cases have to be
transported over long distances making them even less
competitive. If there is enough solar resource available
on site, as it is the case in most of the mining hotspots
today, CSP can be used to provide both electricity
(mainly required during the extraction and material
handling stages) and/or heat (mainly during the
processing stage), increasing energy security, reducing
the impact of fossil fuel price volatility and eventually
reducing the energy bill for the mine operator.
Enhanced Oil Recovery
Early in the lifecycle of an oil well, pressure in reservoirs will usually naturally push oil out and promote
extraction. As the well is depleted, extraction rates are
reduced and so too the profitability. By the time the
well reaches the end of its economically viable life, up
to two thirds of a reservoir’s oil can remain trapped and
therefore un-extracted. With increasing oil viscosity,
the fraction of untouched oil can be much higher.
Advanced oil recovery technologies can help extraction
companies boost oil field production and extend their
lifecycle.
As an oil field ages, the decline in pressure and oil
production require the injection of steam, chemicals
or gas into the well. Injecting steam heats the oil in
the reservoir, decreasing its viscosity and facilitating
flow and extraction back to the surface, increasing
productivity. Such a technique is known as enhanced
oil recovery (EOR). Enhanced oil recovery is also referred
to as improved oil recovery or tertiary oil recovery.
Enhanced oil recovery is commonly used in mature
fields where secondary techniques such as water
flooding no longer produce economically viable
quantities of oil. Using EOR, 30 to 60% or more of the
reservoir’s original oil can be extracted.
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There are three major categories of EOR that have been
found to be commercially successful to varying degrees:
Thermal recovery, which involves the addition of heat
from steam to lower the viscosity, or thin, the heavy
viscous oil, and improve its ability to flow through the
reservoir.
Gas injection, which uses gases such as natural gas,
nitrogen, or carbon dioxide for expanding and pushing
additional oil towards the production wellbore or other
gases that dissolve in the oil and decrease viscosity to
improve flow rates.
Chemical injection, which can involve the use of
long-chained molecules (polymers) to increase the
effectiveness of water flooding, or the use of detergent-like surfactants to help lower the surface tension
that often prevents oil droplets from moving through
a reservoir.
Amongst the three types of EOR techniques, it is
possible to integrate CSP only for thermal or steam
recovery. CSP cannot be used or integrated easily in gas
injection and chemical EOR.
Temperatures Required for Thermal EOR
Each field requires steam to be injected at a specific
temperature for the process. Differences in reservoir
depths set the pressure for the steam, and each
particular oil field therefore has its own temperature
requirements. The temperature levels are usually around
350°C. Superheated steam can be readily achieved
using CSP technologies. CSP technologies like parabolic
trough (PT), linear Fresnel (LF) and solar tower or central
receivers (CR) can provide steam in a wide range of
temperatures from 300°C up to 550°C. Each CSP plant
has a generator that produces steam, which is fed to
the steam turbine to generate power. In case of CSP for
EOR, the steam produced can be directly injected in the
oil field; depending on the temperature required, the
temperature can be adjusted.
Water Requirement for Producing Steam
Since most of the CSP plants for EOR will be located
in desert or arid regions, the availability of water for
producing steam could be problematic. However, EOR
applications do not require high purity water – in fact,
EOR applications typically produce heavily polluted
water. After treatment, however, it can be re-used,
converted back into steam and re-injected into the field.
Hence, water is not a major issue for integration of CSP
in steam EOR process.
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appendix c
Constant Supply of Solar Steam?
Desalination
Because of the seasonal variation of solar energy, a CSP
based steam EOR may not be able to feed steam to the
oil field on a constant basis. However, a recent study has
proven that for the same cumulative amount of steam
injected (during the same period), the oil recovery from
solar generated steam injection and that from constant
rate steam injection are essentially the same, both for
fractured reservoirs and for non-fractured reservoirs
(Van Heel, 2010).
There are different desalination technologies being
deployed worldwide that have achieved commercial
status with proven track records. These technologies
produce fresh water by two different processes evaporation and separation through membranes, using
as the driving force thermal energy and mechanical
power (electrical power) respectively. Three technologies are primarily utilized for seawater desalination:
multi effect distillation (MED), reverse osmosis (RO) and
multi stage flash (MSF). The dominant technology is RO,
accounting for 60% of the global capacity, followed by
MSF with 27% and MED with 8%. Although these three
technologies are mature and capable of producing
large amounts of fresh water, the selection of the most
suited desalination technology from a technical point
of view will be based on the water production capacity,
the energy consumption (both thermal and electric)
and the seawater quality. With a current worldwide
seawater desalination capacity of 65 million m3/d, the
desalination industry consumes around 75 TWh of
electricity annually (which represents around 0.4% of
the global electricity consumption). This is the equivalent to the electricity that would be generated by 500
Parabolic Trough plants with 50 MW and seven hours of
storage, like those deployed in Spain, and representing
a cumulative investment in excess of 120,000 million
Euros. The global desalination capacity is expected to
rapidly grow, with a forecasted electricity consumption
of 122 TWh by 2030 in the MENA region alone. This
will more than double current consumption and result
in the need to add large amounts of new electricity
generation capacity - in the range of thousands of MW
(equivalent to more than 500 Parabolic Trough plants).
Such figures highlight the conundrum facing the
region, and the promising opportunities open to CSP
technologies to displace fossil fuels in this industry.
Since solar EOR systems can easily be integrated with
existing gas-fired steam generation systems, hybrid
configurations could be used to supply 24 hours a day
steam production, all year long, under varying solar
weather conditions. Oilfields in areas lacking natural gas
can especially benefit from CSP, creating and injecting
steam for EOR purposes without the capital investment
of a gas infrastructure. This will particularly appeal to
regions where natural gas is unavailable or is in limited
supply, such as parts of the Gulf Cooperation Council
(GCC) (CSP Today, 2013)
Costs
To produce oil from wells after primary and secondary
recovery, more energy and expenses are required than
the equivalent energy and expenses recovered; upon
this, retirement of the well ensues. EOR methods are
extremely costly and the decision to push forward
with EOR largely depends on the economic context
(petroleum prices). This will in turn dictate if an oil
company will decide to freeze production or proceed
with EOR. EOR expenses during tertiary exploitation
depend on the method used, as well as the heat source.
With large uncertainty in global gas prices, EOR using
conventional sources is becoming increasingly costlier,
which in turn increases the cost of oil recovery.
The major benefit of EOR using CSP lies in the low running
costs. Steam represents as much as 60% of the production
cost for heavily oil extraction. Solar EOR could supply up
to 80% of a field’s annual steam requirements. In addition
to being cost competitive with gas, solar EOR provides an
edge against long-term gas price escalation. Solar EOR
can generate steam at an average cost from $1.75 to $3.00
per MMBTU [21]. Overall costs of CSP technology; more
specifically, the cost of parabolic trough plants, have been
proven to be lower than for conventional steam generation used in thermal EOR today. Although the capital cost
of CSP technology may be higher, the overall operating
costs are much lower than from conventional fuels, and as
a result, CSP could viably provide the necessary heat.
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appendix c
Table 1(C): Desalination technologies
Process
Evaporation
Membrane
Thermal
Multi Stage Flash (MSF)
Vacuum Membrane Distillation (VMD)
Multi effect Distillation (MED)
Solar Stills
Multi effect Humidification (MEH)
Mechanical
Mechanical Vapor Compression
(MVC)
Electro Dialysis (ED)
Reverse Osmosis (RO)
Table 2(C): Key parameters of desalination technologies
Technology
Electricity
Concentrate
Consumption
Temperature (°C)
(kWh/m3)
Thermal Consumption
(MJ/m3)
Typical Production
(m3
/day)
MED
60 to 75
1.5 to 2.5
150 to 200
100,000
RO
<45
3.5 to 5.0
200,000
MSF
90 to 120
2.5 to 3.5
250 to 300
90,000
The integration of CSP technologies with desalination
processes offers particular benefits if it is combined
with thermal energy storage. This can be achieved
using three different design solutions which combine
electricity and thermal energy generation via either
thermal or membrane separation processes:
Use CSP technologies to generate electricity as a
conventional CSP power plant to supply the electricity
consumption of the desalination process. This is
suitable for the RO process.
Use CSP technologies to generate steam to supply
the thermal energy consumption of the desalination
process. This is suitable for a MED/MSF process.
Use CSP technologies to generate both electricity
and thermal energy (combined heat and power
generation) to supply both the thermal and electricity
consumption of the desalination process. This is
suitable for a MED/MSF process.
In the case of a thermally driven process, the advantages of the MED technology over MSF lay in the lower
thermal and electricity consumption, lower investment
cost and the capability to be operated at variable load
(which matches with the intermittent nature of solar
energy without storage). For these reasons, MED is more
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suitable for integration with large-scale CSP desalination
projects. Although the integration of CSP technologies
into a desalination plant offers great advantages, there
are some challenges that must be taken into account.
In order to be cost effective, CSP plants must be located
in the vicinity of the desalination facility, i.e. close to the
coast with the associated consequences:
Problems with materials due to a high saline
atmosphere and potential sand erosion. This might
lead to higher O&M costs.
Performance problems due to a reduced DNI (potentially more cloudy conditions), high aerosol load, high
humidity and sand suspension.
For RO facilities, the CSP plant could be located inland,
although long transmission lines may be required
unless power generation and consumption are
decoupled; therefore using the CSP plant as a conventional solar plant to inject electricity into the grid. In the
case of MED/MSF, this is not possible as transporting
steam over long distance is not a viable option.
The low temperature required for MED/MSF technology
is way below the temperature levels achieved with
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appendix c
the current large-scale CSP technologies. New designs
will therefore need to be investigated and further
developed for thermally driven concepts such as
combined heat and power.
It should be noted that the cost of CSP for desalination
has decreased over the years and resides currently
between US$ 1.6 - US$ 2.1/m3 (the lower end using RO
and the higher end using MED), and it is expected to
keep decreasing to US $0.9/m3 by 2050.
Figure 1(C): Technical Concepts for Integrating CSP into Desalination Plants
Source: Trieb, 2007
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appendix c
References:
CSP Today, 2013. Desalination and Enhanced Oil Recovery. CSP Today Industrial Applications Guide. Available
through: <http://social.csptoday.com/markets/csp-and-mining-integration-potential-analysed-new-guide>.
Trieb, F. 2007. Concentrating Solar Power for Seawater Desalination. DLR. Available through: <http://www.dlr.de/tt/
Portaldata/41/Resources/dokumente/institut/system/projects/aqua-csp/AQUA-CSP-Full-Report-Final.pdf>.
Van Heel, A. 2010. The Impact of Daily and Seasonal Cycles in Solar-Generated Steam-On-Oil Recovery. Available
through: <http://www.onepetro.org/mslib/servlet/onepetropreview?id=SPE-129225-MS>.
VV.AA, 2013. Information and data. Available through: <http://www.abengoasolar.com/web/en/nuestras_plantas/
plantas_para_terceros/chile/index.html>.
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