The Spanish influence on the concentrated solar power (CSP) market is clear to see. Spanish names appear in all the consortiums of most of the international bids – and they win them, too. However, while the U.S. impact on the industry internationally has been less implicit, in the long run, it may have more far-reaching influence.
Spain has 2.3 GW of CSP capacity in operation, and many of the Spanish companies have acquired know-how in the process that is now being put into wide use in international markets. However, Spain's 50 MW cap in the size of the plant – along with a pre-assignment regulation that essentially obligated developers to define very specific details of CSP plants years in advance – resulted in little innovation in terms of technology and size.
This is not to say that there is no innovation through operational experience in Spain – quite the opposite, in fact. However, the innovation has been incremental and designed to optimize yield within the regulatory constraints.
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In the U.S., the story played out differently, and that might make all the difference in the future. There have never been any caps in the U.S. market, or a feed-in tariff to guarantee earnings for the financial backers of a project. This meant that developers had to get creative to gain the best value for money. This is why gigantic projects such as Ivanpah – three tower plants totaling 393 MW – and Solana – a parabolic trough plant totaling 280 MW and seven hours of thermal storage – came to life.
The leap in innovation in these U.S. plants is vast. Five years ago, the largest plants being built anywhere were 50 MW, with 75 MW being an outlier. Of course, the idea of larger plants was very much in the minds of engineers from a theoretical point of view. Many believed that economies of scale would reduce costs.
However, undertaking a project of such scale exponentially increased the difficulty of the project. Never mind technical considerations; the development and financing process is enough to put off even the shrewdest developer.
Fast-forward a few years, and you have a CSP market in the U.S. where just five key projects make up 797 MW of the total 1,368 MW in operation.
The number of plants in Spain is considerably higher. In Spain, there are 50 CSP projects – all of them in the ‘operations’ stage. Despite this, the capacity in MW is lower compared with the U.S. It is worth mentioning that while all the projects in Spain are operational, almost half the projects in the U.S. are still in the planning, development or construction phases. This can be directly attributed to the fact that the U.S. is gearing toward a trend of large-scale CSP plants.
To illustrate this point, I have used the CSP Today Global Tracker interactive map to filter the 50 MW plants in both countries. While in Spain we can find that 50 plants are 50 MW or below, in the U.S., there are only 11 in this range of capacity. However, if we increase the MW up to 100, the image changes, and the number of plants in the U.S. goes up to 16.
Most emerging markets have been influenced by the U.S. case. For example, Morocco's first bid for a CSP plant was Noor I – formerly known as Ouarzazate I – a 160 MW parabolic trough plant. The United Arab Emirates also decided to go for a 100 MW plant for Shams. Most CSP plants in South Africa are 100 MW, except for the 50 MW Khi Solar One tower plant and 50 MW Bokpoort parabolic trough plant. Chile has also has recently confirmed the 110 MW Cerro Dominador tower plant as the first to be developed in the country.
And this is only the beginning. Both SolarReserve and BrightSource Energy have initiated their efforts to see U.S.-sourced technology in the international marketplace, and as U.S. companies build more plants, they will take this growing experience with them.
It is not a mystery that tower technology is on the rise in nearly every market aside from China, where parabolic trough dominates. Tower is widely regarded as more efficient, although it also has its challenges. Building tall concrete towers is expensive, and orchestrating thousands of heliostats to turn the sun onto a receiver from hundreds of meters away is not a feat to be underestimated.
However, towers do present a great opportunity to dramatically increase operating temperatures compared with parabolic troughs. Moreover, storing the resulting thermal energy is also more economical.
Storage is yet another way in which the U.S. market has led the way. Although thermal storage has been built into a number of CSP plants in Spain as well, it was in California where the regulators mandated a total of 1.3 GW of storage by 2020, essentially adding a value to the capability of storing energy. Despite the fact that the grid infrastructure in both Europe and North America is struggling with renewable peak load energy production, the availability of back-up generation has made the issue less urgent in the former.
Furthermore, ‘storage fever’ in the U.S. has triggered a Silicon Valley race to find cheap ways to store energy. For example, Tesla Motors recently embarked on a battery factory in partnership with SolarCity to provide a new smart energy storage system that will help businesses and homes cut their energy bills.
Electrical storage could help PV and wind become more competitive technologies, but what about CSP? The reality right now is that thermal storage still has an edge over electrical storage. Electrical storage, particularly large-scale, is costly, and the durability needs to be improved. However, as the technology becomes better and cheaper, CSP with thermal storage will have to be ready to compete with increasingly cost-effective technologies that are able to dispatch energy when it is needed. Furthermore, integrated PV storage systems can be scaled up and down as needed, unlike CSP plants that need large scales to justify the cost of a power block.
On the other hand, the U.S. Department of Energy is exploring the possibility that small-scale CSP can be integrated into fossil-fueled power stations in a hybrid arrangement using an existing power block. Bigger isn't always better!
So the challenge has been made – and the window for the CSP industry to respond is short. While economies of scale will further reduce the cost of CSP, it is up to the players in the industry to find a way to keep pace with the growing importance and influence electrical storage will have on renewable energy in the future.
Beatriz Gonzalez is director of marketing and communications for London-based CSP Today. She can be reached by email at bea@csptoday.com.
