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Public Support Schemes for the Deployment of Plants
Abstract
Several national and regional governments have implemented incentive programs to promote CSP deployment around the world. These public promotion schemes have been the main driver of CSP deployment. Although Spain and USA have been the main leaders, other countries have recently emerged and have a presence in the CSP market and still others can be expected to be so in the future. This section provides a discussion of the promotion policies which have been used to encourage the uptake of CSP from selected countries from around the world. These countries represent around 99% of total CSP capacity currently being deployed.
Despite South Africa’s international recognition in solar energy investments, the country is struggling to meet its growing energy needs. In recent years, national blackouts and load shedding have been a recurring experience in the country. The high cost of electrification and the overstrained national grid have left several rural communities without access to electricity. This study aims to explore the solar energy resources and performance of a 3.8 kWp stand-alone residential photovoltaic (PV) power system in one of the underutilised regions in South Africa. The study mainly uses ground measured solar radiation data to evaluate the solar resources of Alice and compare them with those in other parts of the world with mega solar PV projects. The components of solar radiation considered are global horizontal irradiance (GHI), direct normal irradiance (DNI), and diffuse horizontal irradiance (DHI). The average total daily GHI, DNI, and DHI of Alice were 4.98, 5.74, and 1.44 kWh/m². Clear sky conditions were found to occur on 233 days in the monitoring year, resulting in an average total daily GHI of 6.13 kWh/m², DNI of 6.73 kWh/m² and DHI of 0.17 kWh/m². The findings indicated that Alice possesses abundant solar resources for PV and concentrated solar power generation, and is comparable to other regions internationally.
The UAE is making notable progress in diversifying its economy through tourism, trade, and manufacturing. However, in the near term, oil, natural gas, and associated industries will continue to account for the majority of economic activity. Rising gas demand from power stations and industrial users such as petrochemical makers and steel manufacturers has turned the UAE into a net gas importer in the past decade, triggering multi-billion dollar investments into nuclear power and renewables. This paper looks into the patterns of energy production and consumption in the UAE in the context the changing nature of global energy markets. The paper will analyze current and proposed national energy initiatives, and assess their impacts on the future of the country. The research analyzed a wide range of statistics obtained from various sources to highlight the current situation and predicts some future scenarios. The study also adhered SWOT analyses of the energy scene in UAE and examined the impact of some external factors. The demand for electricity in the UAE, which is almost exclusively generated from natural gas-fired power plants, is set to rise at a rate of about 9 percent per annum through to 2020.
South Africa’s Renewable Energy Independent Power Producer (REIPP) procurement programme is hailed worldwide as a model for renewable energy procurement. Its success is far from experimental and haphazard and points directly to lessons acquired prior to, and during, the launch and running of the programme. This article explores the journey to the REIPP procurement programme and draws critical lessons from the process. It discusses the success of the REIPP procurement programme in developing the renewable energy sector in South Africa, drawing seven key lessons explain this success and exploring the remaining challenges. The article shows that, despite the need for further improvements and continual optimisation, the development of the REIPP procurement programme has been a positive illustration of successful policy and regulatory learning processes.
The utility-scale solar sector has led the overall U.S. solar market in terms of installed capacity since 2012. In 2017, the utility-scale sector accounted for nearly 60% of all new solar capacity, and is expected to maintain its market-leading position for at least another six years. Two-thirds of all states, representing all regions of the country, are now home to one or more utility-scale solar projects.
This report—the sixth in an ongoing annual series—provides in-depth data-driven analysis of the utility-scale solar project fleet in the United States. Drawing on empirical project-level data from a wide range of sources, this report analyzes technology trends, installed project prices, operating costs, capacity factors, power purchase agreement (“PPA”) prices, the levelized cost of solar energy (LCOE), and the market value of solar. Given its current preeminence in the market, utility-scale PV also dominates much of this report, though data from CPV and CSP projects are also presented where appropriate. Highlights from this year's edition include:
Installation and Technology Trends: The use of solar trackers dominated 2017 installations with nearly 80% of all new capacity. In a reflection of the ongoing geographic expansion of the market beyond California and the high-insolation Southwest, the median insolation level at newly built project sites declined again in 2017. While new fixed-tilt projects are now seen predominantly in less-sunny regions, tracking projects are increasingly pushing into these same regions. The median inverter loading ratio grew to 1.32 in 2017, allowing the inverters to operate closer to full capacity for a greater percentage of the day.
Installed Prices: Median installed PV project prices have steadily fallen by two-thirds since the 2007-2009 period, to 1.6/WDC) for projects completed in 2017. The lowest 20th percentile of projects within our 2017 sample were priced at or below 0.9/WAC. Overall price dispersion across the entire sample has decreased steadily every year since 2013; similarly, price variation across regions decreased in 2017.
Operation and Maintenance (“O&M”) Costs: PV O&M costs were in the neighborhood of 8/MWh, in 2017. These numbers include only those costs incurred to directly operate and maintain the generating plant.
Capacity Factors: The cumulative net AC capacity factors of individual projects vary widely, from 14.3% to 35.2%, with a sample median of 26.3%. This project-level variation is based on a number of factors, including the strength of the solar resource at the project site, whether the array is mounted at a fixed tilt or on a tracking mechanism, the inverter loading ratio, degradation, and curtailment. Changes in at least the first three of these factors drove mean capacity factors higher from 2010-vintage to 2013-vintage projects, where they’ve remained fairly steady among more-recent project vintages as an ongoing increase in the prevalence of tracking has been offset by a build-out of lower resource sites.
PPA Prices and LCOE: Driven by lower installed project prices and improving capacity factors, levelized PPA prices for utility-scale PV have fallen dramatically over time, by 30/MWh per year on average from 2006 through 2012, with a smaller price decline of ~40/MWh levelized (in real 2017 dollars), with a few priced as aggressively as ~5/MWh, down from ~$15/MWh just a year ago for a similarly configured project. As PV plus battery storage becomes more cost-effective, a number of developers are regularly offering it as a viable upgrade to standalone PV.
At the end of 2017, there were at least 188.5 GW of utility-scale solar power capacity within the interconnection queues across the nation. The 2017 growth within these queues is widely distributed across all regions of the country, but is most pronounced in the up-and-coming Midwest region, which accounts for 27% of the 99.2 GW of new queue capacity. The widening geographic distribution is as clear of a sign as any that the utility-scale market is maturing and expanding outside of its traditional high-insolation comfort zones.
The cheap power purchase agreements (PPAs) for two recent concentrating solar power (CSP) projects in Australia (Aurora) and Dubai (DEWA IV) raise questions of how such low costs can be achieved, and whether this could mark the commercial breakthrough of this technology. Here, we investigate these projects with the information available, and seek reasons for the low PPAs. Both projects have low technology costs-which are prerequisites but insufficient as explanations for the low bids. For Aurora, a key explanation is its business model that allows it to sell power outside the PPA, during high-price times when the sun sets and the growing PV fleet goes offline, revealing the market value of CSP. For DEWA IV, a key factor is its extraordinarily long PPA duration, but we expect that it also has very low financing costs. We conclude that both projects can probably be replicated, either in places with an increasing PV fleet and strong ''duck curve'' problems (replicating Aurora) or in places with low policy risks and access to cheap capital (replicating DEWA IV); such places could include the US, Southern Europe, or the Gulf region.
The use of solar technologies should proliferate in Chile as half of the country has a solar irradiance (GHI) above 5 kWh/(m2d). Moreover, the Atacama Desert exhibits further advantageous conditions with 7 kWh/(m2d), clear skies and a large energy-consuming mining industry. Since 2012 the solar sector takes off, totalizing over 1600 MWe of solar power and about 100 MWt of solar heat installed by the end of 2016. However, only about 10% of the filed projects are operative; many barriers are slowing down the further development of solar technologies. While several barrier studies for solar technologies exist in the literature, they are often country-specific and there is no publication found regarding the Chilean solar sector. In the present paper, the barriers obstructing the way of Chile becoming a solar power country are found through interviews and then analyzed and classified into six groups (economic, market, system integration, technical, regulatory and information barriers). For these barriers, an overview of emerging mitigation options are provided and future solutions, including opportunities for research, are proposed.
China is the world leader in several areas of clean energy, but not in Concentrating Solar Power (CSP). Our analysis provides an interesting viewpoint to China's possible role in helping with the market breakthrough of CSP. We present a short overview of the state-of-the-art of CSP including the status in China. A blueprint for China's CSP development is elaborated based on China's 13th 5-year program, but also on China's previous success factors in PV and wind power. The results of this study suggest that China could play a more prominent global role in CSP, but this would require stronger efforts in several areas ranging from innovation to policies.
We proposed a case for a short term CSP peaking system of plants for South Africa in a previous study. A virtual hybrid system including planned Open Cycle Gas Turbines and a spatial-size optimized fleet of CSP plants suggests a number of benefits. A progressive rollout exceeding 3,000 MW of CSP in 15 years: mitigates cost of capital; incrementally reduces fuel dependency; leads to a local CSP learning rate; adds reserve margin; and leads to a lower system LCOE.
Acknowledging that Concentrated Solar Power (CSP) stands out among other renewable technologies for technical features such as dispatchability - through storage and hybridization - and its potential for higher macroeconomic impact on the local economy, national and regional governments have set up incentive programs to promote the development of large scale solar thermal plants in recent years. These support mechanisms have largely contributed to the rapid growth of the global market since 2007. While Spain and USA remain leaders, representing most of the current ∼2.5 GW in operation, other countries have emerged within a short time as very ambitious players.
As a relatively high-cost gap technology, concentrating solar power (CSP) still needs to be supported if it is to contribute significantly to the energy transition. Within this context, auctions have emerged worldwide as a relevant instrument for the promotion of renewable energy in general, given their alleged advantages in terms of cost-effectiveness and lower support costs, and they could also be used to support CSP. In turn, it is well known that the success of any auction depends on the choice of its design elements. The aim of this paper is to identify the most appropriate design elements to promote CSP through auctions. An empirical analysis of CSP auctions in five countries is carried out in order to draw some lessons on the pros and cons of different design elements which should be considered specifically in auctions for CSP deployment. Our results show that, depending on the policy goals of the government, some design elements may make more sense than others. If effectiveness in deployment is the main goal, then valuation of dispatchability, strict prequalification requirements, site specific auctions, coordination between the auction and administrative procedures, long enough lead times and construction times are particularly recommendable. If minimization of support costs is the government's priority then price-only auctions, low prequalification requirements, absence of local content requirements, on-site auctions, long deadlines, long PPA duration, provision of resource measurements and multiple rounds would be preferable. Finally, if local economic development is a main goal, then local content rules may make sense, as long as there is a minimum manufacturing capacity in the country. Trade-offs between policy goals are unavoidable when choosing design elements in CSP auctions and should be taken into account and, if possible, mitigated.
Sub‐Saharan Africa desperately needs more electricity. Recent years have seen private investment in renewable energy projects breaking through in the region, primarily driven by well‐designed and implemented auction programs. We review three renewable energy auction programs in the region to improve our understanding of the auction design and implementation elements that have enabled this important transition: the South African Renewable Energy Independent Power Producers Procurement Program (REIPPPP); the GET FiT solar facility in Uganda; and the first round of the Scaling Solar program in Zambia. Our analysis shows that a well‐designed and implemented program that adequately deals with risks for both the procuring authorities and investors is able to deliver good investment and price outcomes in sub‐Saharan Africa.
This article is categorized under:
• Photovoltaics > Climate and Environment
• Energy Policy and Planning > Climate and Environment
• Photovoltaics > Economics and Policy
• Energy Policy and Planning > Economics and Policy
This study aims to assess the technical and economic potential of concentrating solar power (CSP) generation in India. The potential of CSP systems is estimated on the basis of a detailed solar radiation and land resource assessment in 591 districts across the country. The land suitability, favorable solar resource conditions and wind power density over the vicinity have been considered key parameters for potential estimation. On the basis of a district-wise solar and land resource assessment, the technical potential of CSP systems is estimated over 1500 GW at an annual direct normal irradiance (DNI) over 1800 kWh/m² and wind power density (WPD) ≥150 W/m² after taking into accounts the viability of different CSP technologies and land suitability criteria. The economic potential of CSP is estimated at 571 GW at an annual DNI over 2000 kWh/m² and WPD≥150 W/m² in India. The technical evaluation of CSP technologies over the potential locations have been carried through System Advisor Model (SAM) Software using the Typical Meteorological Year data of Meteonorm 7.0 weather database. In near future, it is anticipated that locations with DNI values ≥1600–1800 kWh/m² could also become economically feasible with the development of new technologies, advancement of materials, efficient and cost-effective thermal energy storage, economy of scale, manufacturing capability along with the enhanced policy measures, etc. In the long-term, it is possible to exploit over 2700 GW solar power through CSP in India with an annual DNI ≥1600 kWh/m² and WPD≥150 W/m². The findings of this study can be used for identification of niche areas for CSP projects in India.
Concentrating solar power (CSP) offers the value proposition of being a baseload and dispatchable renewable energy technology. CSP significantly lags behind solar photovoltaic (PV) and wind power by cumulative capacity and cost for a number of reasons including the complicated nature of the technology and the traditional inability of the technology to be economically viable at smaller scales. The scaling limitation itself has prevented the technology from learning faster due to limited market share, which has inhibited the learning rate and continued to make CSP project financing difficult due to finance quantum risks.
CSP has limited but successful lifecycle experience due to the SEGS I–IX plants commissioned between 1985 and 1990 in California. More recently, the technology benefited from competitive tariffs before the adoption of PV and learning rates undermined its growth. PV (as with wind) now offers some of the lowest electricity generating rates of any technology. While this is valuable, the marginal value of intermittent renewables is roughly inversely proportional to their share of the electricity system as their capacity credit diminishes with each addition to capacity, all other things equal. CSP with storage has the ability to flexibly deliver electricity and to do so 24 h a day in the right conditions. CSP plants with up to 15 h of full-load storage have now been commissioned and are demonstrating initial evidence that they can deliver to expectation. Despite the proposed value of CSP, it is not penetrating the market as expected. The value of electricity has simply not been valued for instance in the U.S. market to date, which has valued renewable targets above capacity needs. Sunny developing countries have been identified as potential growth markets due to capacity constraints and the avoided cost of electricity. Most recently, China has embarked on the greatest capacity growth of CSP in the decision to commission around 5 GW of CSP within the next 5 years with 1.35 GW assigned to be online by the end of 2018. Even with this evolution, CSP will still significantly lag other renewables.
This review covers the system value and progress of CSP. An overall description of CSP and its value is followed by a broad review of CSP experience and research. A review of CSP in energy systems analysis is then provided to expose and quantify the marginal value of CSP. It is argued that improved quantification and accuracy in terms of energy systems analysis is an important step for CSP growth. The findings from the review show that CSP has potential to be the backbone of future electricity systems, but it needs to demonstrate value and acceptance to a broader audience than might be expected to achieve this.
This paper debates the main reasons why Chinese and Brazilian energy policies have not focused on Concentrating Solar Power (CSP) deployment until now. Like most emerging economies, China and Brazil have registered large increases in energy demand, as well as considerable growth of energy-related greenhouse gas (GHG) emissions. On the other hand, both countries have played an important role on the expansion of renewable energy infrastructure and – considering that large portions of their territories present high levels of “Direct Normal Irradiation” (DNI) – CSP technologies might have figured as an important strategy for the mitigation of atmosphere pollution and global warming. Since large scale deployment of CSP technologies still implies high “Levelized Costs Of Electricity” (LCOE) that could affect the competitiveness of national industry in global markets, we argue that a comprehensive answer for this question must place national energy policies in the context of a “world-system” analysis. CSP has not benefited from the international demand that has boosted wind turbines and photovoltaic cells with their subsequent price reductions. Furthermore, we will discuss the “elective affinities” between thermal solar investments and the development of those regions that present the lowest performances in the Chinese and Brazilian socioeconomic realities.
Concentrated solar power (CSP) is a promising technology for low-carbon energy systems, as combined with thermal storage it can store solar energy as heat, and deliver power more flexibly and when most needed by the grid. However, its high cost prevents its rapid deployment and affects its affordability in emerging economies. International financial institutions (IFIs) have emerged as key players to enable CSP in emerging economies, especially when cooperating with national policymakers. Through the analysis of two CSP plants in India and Morocco where IFIs provided the lion's share of finance, this paper aims to assess the effectiveness of their support and estimate the impact of IFIs financing on electricity production costs and mobilization of private investments. The two case studies show that public financial institutions can play a leading role in reducing the cost of CSP support on public budgets by providing concessional loans in countries where public and/or private finance would be too expensive, or extending maturities where commercial investors are present but poorly suited for project finance. Finally, we show that, combined with competitive tariff setting mechanism (tenders and auctions), public financial support can also be a cost-effective tool to engage private investors in CSP.
The global demand for energy is growing and conventional energy sources like coal and petroleum are depleting, and renewable resources will play a crucial role in the future. The development of clean and sustainable energy technology is imperative to avert the impending climatic crisis. A worthy investment option is concentrating solar power (CSP) technology which has the capacity to provide for about 7% of the total electricity needs projected for the world by 2030 and 25% by 2050 (considering a high-energy-saving, high-energy-efficiency scenario) [1]. In the present study, the various concentrators available have been explored. Countries all over the world have recognized the potential for CSP and numerous plants are being planned and constructed with incentives offered by the governments. In India, the states of Rajasthan and Gujarat have the potential for widespread application of CSP technology to harness the solar resource. The launch of The Jawaharlal Nehru National Solar Mission (JNNSM) in 2008 by the Indian Government and its initiatives, complemented by state solar policy passed by the states of Rajasthan and Gujarat, will go a long way in the establishment of CSP to supply a segment of India's upcoming energy needs.
Given the relative socioeconomic and environmental benefits linked to the deployment of electricity from renewable energy sources (RES-E), its public promotion has been a priority on the agendas of governments in virtually all European countries. The Spanish government has not been an exception in this regard. Public support at the national level has been based on a feed-in tariff (FIT) scheme, which has had its pros and cons in the encouragement of effective and cost-effective deployment of RES-E. Based on different information sources and empirical data, this paper provides an integrated assessment of the system in the period of influence of the Royal Decree 2818/1998 (i.e., between 1999 and 2003), according to different criteria. The strong and weak points of the system are assessed. The paper suggests that some of its elements should be redesigned.
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