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ABENGOA SOLARSolar Power for a Sustainable World

Dr. Fred MorseSenior Advisor, US Operations, Abengoa SolarandChairman, CSP Division, SEIA

Presented at the Energy & Climate Mini-WorkshopWashington, DC3 November 2008

Concentrating Solar Power (CSP) as an option to replace coal

Dr. Fred Morse

Senior Advisor, US Operations, Abengoa Solar

and

Chairman, CSP Division, SEIA

Presented at the Energy & Climate Mini-

Workshop

Washington, DC

3 November 2008

Concentrating Solar Power (CSP) as

an option to replace coal

2Solar Power for a Sustainable World

ABENGOA SOLAROutline

•

The resource –

where and how large•

The technology –

CSP

•

Why CSP and why now?•

CSP industry, capabilities and projects

•

Cost parameters and outlook•

DOE CSP base-load initiative

•

What’s in the way and conclusions


ABENGOA SOLAR 150 MW SEGS Plant


ABENGOA SOLAR


ABENGOA SOLAR The Resource

•

Solar energy comes in two flavors – diffuse and direct (beam)

•

PV can use both components•

CSP can use only the direct because diffuse can not be effectively focused or concentrated

•

So where is the direct solar energy found?


ABENGOA SOLAR Global Solar Radiation


ABENGOA SOLAR China DNI Map


ABENGOA SOLARSouthwest Solar Resources

Unfiltered Data


ABENGOA SOLAR Filters to Identify Prime Locations for CSP Development

All Solar Resources

Locations Suitable forDevelopment

Start with direct normal solar resource estimates derived from 10 km satellite data.

Eliminate locations with less than 6.75 kWh/m2/day as these will have a higher cost of electricity. Most of Spain is lower.

Exclude environmentally sensitive lands, major urban areas, and water features.

Remove land areas with greater than 1% (and 3%) average land slope.

Eliminate areas with a minimum contiguous area of less than 1 square kilometers.

1.

2.

3.

4.

5.



Transmission Overlay


ABENGOA SOLAR Southwest Solar Resources > 6.0 kWh/m2/day


ABENGOA SOLAR Southwest Solar Resources with Environmental and Land Use Exclusions



Previous Plus Slope < 3%



Previous Plus Slope < 1%



Previous Plus Slope < 1% and Topography


ABENGOA SOLAR

State Land Area (mi²)

Capacity (GW)

Generation (GWh)

AZ 19,279 2,468 5,836,517CA 6,853 877 2,074,763CO 2,124 272 643,105NV 5,589 715 1,692,154NM 15,156 1,940 4,588,417TX 1,162 149 351,774UT 3,564 456 1,078,879

Total 53,727 6,877 16,265,611

Potential Solar Generation Capacity by State

Potential

and

Benefits

Untapped Electricity Generation Potential–

Solar energy in seven southwestern states –

AZ, CA, CO, NV, NM, TX and UT –

could generate more than 6X current U.S. electricity needs

•

Solar resource for 6,800 GW of versus current nation-wide capacity of approx. 1,000 GW

Significant Population Growth Centers –

15 of the 20 fastest-growing metro areas in the country are in close proximity to solar resource

–

By 2030, an estimated 41 million additional people will move to the Western United States (from 90 million in 2000 to 131 million people)

Environmental Benefits–

15-30 GW by 2030 (up to 37% of West’s power) offsets 15-40 coal plants

–

Compared with coal plants, CSP will save 33-66 million tons CO2

/yr

by 2030

Direct-Normal Solar Resource for the Southwest U.S.

Map and table courtesy of NREL


ABENGOA SOLAR Optimal CSP Sites (from Supply Curves)


ABENGOA SOLAR

•

Concentrating Solar Technologies can be used to “mine”

this resource.

•

Some of these technologies use curved mirrors to focus the sun’s rays and to make steam, others directly produce electricity.

•

This steam is used to produce electricity via conventional power equipment.

•

In multi-Megawatt plants, CSP provides the lowest cost solar electricity.

•

Can provide bulk and/or distributed generation.

How Do We Develop This Resource?


ABENGOA SOLAR Concentrating Solar Power

Parabolic Trough

Power Tower

Dish Engine Concentrating PV

Linear Fresnel


ABENGOA SOLAR Trough Technology

–

Trough collectors (single axis tracking)–

Heat-collection elements

–

Heat-transfer Oil (Therminol VP1)

–

Oil-to-water steam generator

–

Oil-to-salt thermal storage

–

Conventional steam-Rankine

cycle power block


ABENGOA SOLAR


ABENGOA SOLAR Power Tower Technology

–

Heliostats (two-axis tracking)

–

Air or molten-salt receiver

–

Air or molten-salt working fluid

–

Thermal storage

–

Conventional steam-

Rankine cycle power block, or combustion turbine

–

Several developers in the US and several in Spain

Focus on molten-salt plant


ABENGOA SOLAR Dish Stirling Technology

–

Dish (two-axis tracking)–

10 and 25 kW Stirling engines

–

Thermal receivers–

Distributed generation or bulk power

–

8 Different system configurations built and tested over the last 20 years

–

Significant utility interest


ABENGOA SOLAR Concentrating PV Technology

–

25-

35 kW CPV systems–

Two axis tracking structure

–

350 m2

concentrator

–

3M acrylic lens concentrator at 250X or parabolic dish with PV at focal point

–

Silicon solar cells–

Many companies are developing new designs and sound business plans


ABENGOA SOLAR Why CSP and Why Now?

•

Necessity –

the utilities’

other options (coal, nuclear or NG) have significant long term risks with cost implications

•

Uniqueness

of thermal energy storage•

Favorable but still unreliable policies,

such as the RPS and the ITC (both of which are essential) in the US and Feed-in tariffs elsewhere

•

Public opinion

favors solar


ABENGOA SOLAR Awareness of CSP

•

Utilities

–

Growing fast where good DNI and policies exist

•

Policy makers

–

Generally lagging as evidenced by inadequate or unreliable policies at all levels of government

•

Investors

–

Growing fast as evidenced by news articles and conferences but lagging wind and PV investments, held back by policy uncertainty and today’s financial market situation


ABENGOA SOLAR Attributes of CSP in the Eyes of Utilities

•

Utilities are familiar with steam

generation•

Suitability for utility scale

installations of

100MW or more•

Stable, known and decreasing costs and zero carbon emissions provide hedge

against NG

price volatility and carbon caps•

Other generation options have significant risks

•

Ability to provide firm dispatchable output which is of great value

to utilities


ABENGOA SOLAR TES

•

Thermal energy storage allows the electric energy to be shifted for use then it is needed more.

•

TES allows solar electricity to be generated to met utility peak demands or to allow solar to become a base-load power source

•

TES is the cheapest and most efficient form of storage for electric generation

•

However the current indirect two-tank is too expensive to meet long-term cost goals

•

A promising approach is to use molten salt in both the solar field and for storage, but it has risks that appears to be manageable


ABENGOA SOLAR

HTF-SaltHeat Exchanger

Flow Diagram


ABENGOA SOLAR

–

Averaged 80% on-

peak capacity factor from solar

–

Over 100% with fossil backup

–

Could approach 100% from solar with the addition of thermal energy storage.

SCE Summer On-PeakWeekdays: Jun - Sep

12 noon - 6 pm

0%

20%

40%

60%

80%

100%

120%

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

On-

Peak

Cap

acity

(%)

0

2

4

6

8

10

12

Inso

latio

n (k

Wh/

m^2

/day

)

Solar Contribution Boiler Contribution Direct Normal Radiation

Mount PinatuboVolcano

CA EnergyCrisis

CSP has Worked

in California


ABENGOA SOLAR

1 3 5 7 9 11 13 15 17 19 21 23

Hour of the Day

MW

Biomass, Geothermal

Solar

Wind

Summer Generation Profile Renewable Resource Fit

(from Barbara Lockwood, APS)

Solar w/storage

?


ABENGOA SOLAR Dispatching Solar Power

Generation from solar plant with storage can be shifted to match the utility system load profile

Solar Plant With Storage vs. Utility System LoadJanuary

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour EndingU

tilit

y Lo

ad

, T

rou

gh

Pla

nt

Ou

tpu

t

0

100

200

300

400

500

600

700

800

So

lar

Re

sou

rce

(W

/m2

)

Relative Value of Generation Trough Plant w/6hrs TES Solar Radiation

Solar Plant With Storage vs. Utility System LoadJuly

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour Ending

Uti

lity

Loa

d,

Tro

ug

h

Pla

nt

Ou

tpu

t

0

100

200

300

400

500

600

700

800

900

So

lar

Re

sou

rce

(W

/m2

)

Relative Value of Generation Trough Plant w/6hrs TES Solar Radiation

WinterSummer

-

Demand- Solar

-

Generation

Key:


ABENGOA SOLAR Thermal Energy Storage

•

Based on Solar Two molten-salt power tower experience

•

Indirect 2-tank molten-salt design for

parabolic trough plants

•

Uses oil to salt heat exchangers

to transfer energy to and from storage


ABENGOA SOLAR Thermal Energy Storage

•

AC Cobra –

Andasol

1 plant in Spain will be the first to use

the indirect 2-tank molten-salt thermal energy storage.

•

Plant should be operational before the end of the year.


ABENGOA SOLAR Wet Vs. Dry Cooling Technology

Wet Cooling

Dry Cooling


ABENGOA SOLAR Wet Vs. Dry Cooling Technology

Wet Cooling

•

Uses 3.5 m3

water per MW

•

~90%

for cooling

•

The rest for the steam cycle and washing

Dry Cooling

•

Reduces plant water consumption by ~90%

•

Increases plant capital cost ~5%

•

Reduces annual net output >5%

•

Significant reduction during hot periods

•

Increases cost of electricity ~10%


ABENGOA SOLAR Hybrid Cooling Technology

•

A “hybrid”

mix of wet and dry

cooling

•

A number of approaches are possible

•

Commercially available option

•

Includes both dry and wet cooling towers

•

Relative size of wet and dry cooling towers determines water use


ABENGOA SOLAR Additional Utility Attributes

•

Large, multi-national corporations are now involved in every part of chain–

Project and Technology Developers

–

Utilities and Independent Power Producers–

Engineering and Construction Companies

•

Quality counterparties reduce overall CSP project risk –

Large balance sheets

–

Power and construction expertise–

Strategic technology deployment


ABENGOA SOLAR Attributes of CSP in the Eyes of Policy Makers

•

Very large domestic resource potential

•

Carbon free

electricity•

Potential for cost

reduction

•

Economic benefits

will result from its development

•

Increased public awareness

and support of the benefits of clean energy


ABENGOA SOLAR Attributes of CSP in the Eyes of Investors

•

Scalable•

With a good Power Purchase Agreement, the return on investment can be adequate to encourage main-stream

equity and

favorable debt financing terms.•

Once debt is paid, operates with no fuel –

has potential of becoming a “clean cash cow”.


ABENGOA SOLAR The CSP Industry

•

Technologies –

trough, tower, dish engine, linear Fresnel, and CPV, each of which have variations making the industry very robust

•

Over 400 MW in commercial operation, about 4,800 MW under contract in the US and about 3,500 MW under development in the rest of the world

•

Continued market growth is predicted.


ABENGOA SOLARCSP Business Estimated Activity in

the US (July 2008)


ABENGOA SOLARCSP Activity Outside the US

(July 2008)

* Natural gas/hybrid project; capacity shown is CSP portion only


ABENGOA SOLAR Nevada 64 MW

Nevada Solar One –

Acciona

Solar Power –

64 MW –

Boulder City,NV

ABENGOA SOLARSolar Power for a Sustainable World


ABENGOA SOLAR PS-10


ABENGOA SOLAR Power Plant Illustration

Solana Generating Station

•

“Solar Field”

will cover 3 square miles and contain 2,700 trough collectors

•

Collectors are 25 feet wide, 492 feet long, and over 10 feet in height

•

Plant footprint is large, but profile is low (3 story building)


ABENGOA SOLAR Solana

•

280 MW Gross output via 2x140 MW steam turbines

•

Six hours full load thermal energy storage

•

Near Gila Bend, Arizona•

30 year PPA with APS


ABENGOA SOLAR


ABENGOA SOLAR ISCC

•

First integrated solar combined cycle to be built in Algeria

•

150 MW plus 20 MW CSP•

Second to be built in Morocco

•

450 MW plus 20 MW CSP


ABENGOA SOLAR The Cost of CSP

•

There are many costs and they are must be carefully defined –

capital cost, energy cost as

nominal, real, constant dollars, first year, levelized and average

•

Cost is not a wish or a hope -

it depends on many variables, all of which must be known (the EPC contractor and the investors must know what it is)

•

Costs change and that risk must be managed•

The market will find the cost and the value of CSP

•

Will illustrate the impact of financial parameters, plant size, market size and incentives on the cost of energy from CSP plants


ABENGOA SOLAR Financial Analysis Results

50 MW SW Trough Current Policies

Rate of ReturnConstraint

DSCRConstraint

Debt Share

Debt Term

PPA Price(cents/kWh)

Utility Purchase

Private-Commercial Debt

Minimum

Private-Taxable Bond


ABENGOA SOLAR Financial Analysis Results

Private-Taxable BondUtility Purchase70:30 Debt-to-Equity

Private-Commercial DebtPublic-Private Partnership65:35 Debt-to-Equity

Private-Dev Bank DebtPrivate-Tax Exempt Bond75:25 Debt-to-Equity

PPA Price (cents/kWh)

Mod

ified

Inte

rnal

Rat

e of

Ret

urn

(MIR

R)


ABENGOA SOLARCSP Cost Reduction Prediction

Easy to use but could be misleading –

WGA Report

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

0 1000 2000 3000 4000

Cumulative New Capacity by 2015 (MW)

Nom

inal

LC

OE

($/k

wh)

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.10

0.11

0.12

Rea

l LC

OE

(200

5$/k

wh)

Assumes:- Trough Technology w ith 6 hours of TES- IPP Financing; 30-year PPA- California Property Tax exemption- Includes scale-up, R&D, learning effects- Barstow , California site


ABENGOA SOLAR Plant Size

139%

115%100% 90%

0%

20%

40%

60%

80%

100%

120%

140%

160%

25 MWe 50 MWe 100 MWe 250 MweParabolic Trough Plant, 6-hours Thermal Energy Storage, IPP Financing, 10% ITC

2006 Nexant Study: Optimum Size ~250MWe For Current Technology

Effect of Plant Size


ABENGOA SOLAR

Effect of Deployment

100%93%

87% 81%

0%

20%

40%

60%

80%

100%

120%

Current 1000MW 2000MW 4000MWBased on Experience from Existing Plants (354MWs in California)

Market Size


ABENGOA SOLAR Incentives

100%

85%92%

75%

96%

0%

20%

40%

60%

80%

100%

120%

Base: 10%ITC, 5-yrMACRS

30% ITC, 5-yrMACRS

Base + PropTax Exclusion

Base + SalesTax Exclusion

All

Effect of Incentives (IPP Financing)


ABENGOA SOLAR CSP Costs Today and Tomorrow

•

In the SW US, with best conditions, LCOE is in the mid-

high teens in ¢/kWh for firm dispatchable power and could drop to the low-mid teens with existing incentives, assuming commodity prices do not rise further and financial markets do not get weaker.

•

Current cost gap is 2 -

5 ¢/kWh

•

Several independent and credible studies project 8 ¢/kWh (nominal) after 4GW installed, removing the cost gap and becoming competitive with natural gas


ABENGOA SOLARRPS, incentives and policies can close the cost gap between fossil and CSP-derived energy

(from Kate Maracas, Abengoa Solar)

Cost Gap will Close

Ener

gy C

ost

t

Current Cost Gap Commodity Prices,

Financial Markets, Equipment, etc.

Policies and Incentives

Carbon, Fuel Risk

CSP energy cost

Fossil energy cost


ABENGOA SOLAR A Narrowing Cost Gap

(From Barbara Lockwood, APS)

Carbon PolicyFuel Risk

CSP

Large Scale ProjectsGlobal UptakeStrong DevelopersIncentives

Traditional Resources

Equipment and Labor CostsIncreasing Fuel PricesEnvironmental


ABENGOA SOLAR CSP Initiative -

Making CSP a Baseload

Power Solution for the U.S.

DOE Initiative Goals:* Intermediate power at competitive prices by 2015 * Baseload power at competitive prices by 2020 w/60-75% capacity factors


ABENGOA SOLAR Cost and Capacity vs. year

0

5

10

15

20

25

3020

07

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Year

Inst

alle

d C

PS (G

W)

0

3

6

9

12

15

18

Leve

lized

Cos

t (Ce

nts/

kWh)

Base Case

CSP Inititaitve

Case

Levelized Cost


ABENGOA SOLARCSP Attributes, Design & Needed

Improvements

CSP System Attributes:• Dispatchable power with thermal storage• Basic materials: concrete, steel, glass• Standard utility power block/turbine• Quickly constructed (1.5 to 2 years)

• Optimal size: 100 –

250 MW

Improvements Needed to Achieve the 2015 goal:•

Thermal storage R&D –

supporting an operating temperature of 500C (up from today’s 390C)

•

Trough collector and receiver –

increase optical accuracy necessary for producing heat transfer fluid at 500C and improve receiver coating to enable operation at 500C

Improvements Needed to Achieve the 2020 goal:•

Advanced technology -

higher operating temperature (e.g. power tower or dish) or simpler design (e.g. Fresnel concentrator)

•

Thermal storage –

for operating temperatures of 650C or higher


ABENGOA SOLAR CSP R&D Activities

Technology FY2009-FY2012 FY2013-FY2016 FY2017-FY2020

Trough Systems

Expand U.S. supplier base through manufacturing initiative, optical testing to optimize receiver & concentrator designs

Develop next-

generation system capable of 450°C operation integrated with molten-salt storage.

Develop advanced collectors, receivers, selective coatings, and working fluids designed to operate at 550°C.

Advanced Systems

Evaluate new concepts (e.g. CLFR, distributed power tower), test components, dish technology designed for mass production

Select best options, support prototype designs, identify key technology improvement opportunities.

Integrate high temperature CSP systems with advanced gas turbine/CC technology, reduce system cost through R&D and manufacturing initiative.

Thermal Storage

Develop thermocline

thermal storage, evaluate two-tank molten salt system, develop new storage medium and heat transfer fluids

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

Develop advanced thermal storage up to 550°C for troughs and up to 1200°C for advanced CSP/CC technologies.

* Recommendations from industry meeting March 2007


ABENGOA SOLAR

0.05

0.06

0.07

0.08

0.09

0.10

0.11

0.12

0.13

0.14

25% 35% 45% 55% 65% 75%

Annual Capacity Factor

Real

Lev

eliz

ed C

ost o

f Ene

rgy

(200

6 $/

kWh)

Baseline 2:Tank Indirect Baseline Plus Advanced Solar Tech

Molten-salt Thermocline @ 500C Scale-up to 200 MWePower Park 4x200 Power Park w/ 3X Learning


ABENGOA SOLAR

0.05

0.06

0.07

0.08

0.09

0.10

0.11

0.12

0.13

0.14

0.15

25% 35% 45% 55% 65% 75% 85%

Annual Capacity Factor

Real

Lev

eliz

ed C

ost o

f Ene

rgy

(200

6 $/

kWh)

Baseline 2:Tank Indirect Molten-salt Thermocline @ 500CPower Park 4x200 Power Park w/ 3X LearningConventional Gas Combined Cycle Pulverized CoalSequestered Gas Combined Cycle Sequestered Coal IGCCNew Nuclear Power


ABENGOA SOLARCSP Competitive with

Base Load

•

Previous slide shows that the switch to molten salt would allow trough power to compete directly with low carbon power.

•

Scale up to larger power parks and learning could allow troughs to compete directly with conventional base load in the future


ABENGOA SOLAR Future for CSP

•

Cost and efficiency losses require further R&D•

An R&D path has been identified such that future CSP with low-cost storage could be as competitive for base load power (high CF) as conventional pulverized coal fired plants.

•

Given the escalation in fuel costs, this 2007 scenario could be even more likely today

•

Assuming carbon constraints (cap and trade, sequestration, etc.) CSP would be even more competitive


ABENGOA SOLAR Ability to Scale Up

•

Key components are generally available -

steel, glass, concrete, copper, molten salt and turbines

•

Major companies –

6 trough + 4 tower•

Assume each builds 2 GW by 2015 for 20 GW total

•

Assume 5-10GW per year thereafter to reach 95- 170 GW by 2030 (DOE projects 15-20 GW)

•

This will need capital at about $5B/GW, 10 square miles/GW hence several national CSP zones with new transmission


ABENGOA SOLAR What’s in the Way?

•

Policies –

Congress finally extended the ITC but there is no

“I”

there now

•

Cost

–

“Relatively”

high cost of electricity but gap is

closing fast•

Transmission

–

Inadequate or not available, slow and costly

to build and the queue system is broken in many locations•

Land

–

Need access to good sites and each ownership type

has its own challenges•

Permitting -

Slow and costly

•

Environmental

–

Growing concern in some places over

access to the desert regions needed for CSP


ABENGOA SOLAR Other Needed Policies

•

“Good”

carbon policies•

Feed-in Tariffs at state level deserve consideration

•

Land access policies •

Transmission policies

•

Exclusion of property and sales taxes


ABENGOA SOLAR Forecast

•

Carbon

limits

are coming –

will partially or totally close the cost gap•

CSP can scale up

fast

without critical bottleneck materials (we hope) making it a good response option

• Price for CSP power is in commercial range and costs will come down

with increased capacity and will fall below natural gas in the next few years

•

Many technologies options

add certainty

to cost reduction projections •

US and EU R&D programs

will continue to grow in size and value•

Economic development and environmental benefits

will drive political support

•

The CSP market

in the SW US can grow to 20 GW by 2015 and between 95 and 170 GW by 2030 and a comparable rate in the rest of the world.


ABENGOA SOLAR Conclusions

•

CSP is a Unique Renewable Technology–

Large resource in many countries–

Ability to store energy to fit utility need–

Near-term potential for cost competitiveness –

Mid-term potential for base-load via TES•

The Market is Rapidly Developing–

Utilities interest in CSP is growing in many countries–

Large credible, financially stable developers –

Real (financeable, buildable and reliable) projects are being offered•

Policy Decisions will Maintain Momentum–

Long term ITC extension –

Supporting policies


ABENGOA SOLAR Contact Information

Fred MorseSenior Advisor, US Operations, Abengoa SolarandChairman, CSP Division, SEIA

236 Massachusetts Avenue, NW, Suite 605Washington, DC 20002Tel: [email protected]

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