What the Dubai tender means for CSP

SolarReserve's Crescent Dunes CSP plant in the US has a 1.1GWh storage capability, about equal to all the world's utility-scale batteries combined. Pic: SolarReserve.

SolarReserve’s Crescent Dunes CSP plant in the US has a 1.1GWh storage capability, about equal to all the world’s utility-scale batteries combined. Pic: SolarReserve.

By Jason Deign

Concentrated solar power (CSP), a renewable technology seemingly on the wane, could be back in vogue following a record low tender bid announced Monday.

The Dubai Electricity and Water Authority (DEWA) confirmed the lowest bid for a 200MW CSP plant in the Mohammed bin Rashid Al Maktoum Solar Park would provide electricity at just USD$94.50 per MWh.

The rate compares to a strike price of GBP£92.50 ($119.23) per MWh for the UK’s proposed Hinkley Point C nuclear plant and a Lazard levelised cost of energy (LCOE) estimate of $60 to $143 per MWh for US coal generation.

It is still a way off the record low of $29.10 per MWh achieved by solar PV in a Chilean energy tender in August last year, or PV’s $29.90 per MWh for a previous phase of the Mohammed bin Rashid Al Maktoum project.

However, PV remains an intermittent energy source, whereas the bid for the DEWA project, one of four that will be reviewed over the next month, includes 15 hours of storage a day. 

The biggest CSP project in the world

“DEWA is working to build the biggest CSP project in the world based on the Independent Power Producer model,” said the Authority in a press note.

“The 200MW CSP plant will be operational by April 2021, with other CSP projects eventually generating a total of 1,000MW by 2030.”

DEWA did not reveal which consortium had supplied the record bid, which United Arab Emirates daily The National said was almost 40% less than the previous lowest-ever cost for CSP.

But the paper confirmed the four consortia taking part in the tender were Acwa Power with Shanghai Electric, Masdar with EDF and Abengoa, Power China with Engie and SolarReserve, and Suncan with Al Fanar.

The remaining bids in the tender ranged between $105.80 and $173.50 per MWh, The National said. 

Significantly below the lower limit for CSP LCOE

This means at least two bids in the tender came in significantly below the $119-per-MWh lower limit for CSP LCOE predicted by Lazard last December.

And “Dubai doesn’t even have the best solar conditions for CSP,” said Jonathan Walters, a former World Bank director who now sits on the advisory board of project development firm Nur Energie.

Dubai is “too humid” for optimum CSP performance, he said, hinting that even lower prices could be achieved elsewhere.

A year ago, the International Renewable Energy Agency (IRENA) calculated that CSP technologies could achieve cost reductions of between 37% and 43% between 2015 and 2025.

These figures are for plants with storage, which, IRENA said, have “higher investment costs, but … allow higher capacity factors, dispatchability and typically lower LCOEs (particularly for molten salt solar towers).” 

A technology that has languished

It remains to be seen which bidder will win the latest Mohammed bin Rashid Al Maktoum Solar Park award, but the prospect of sub-$100-per-MWh CSP could potentially revive the fortunes of a technology that has languished of late.

In the last decade, the advent of ultra-low-priced PV has made it hard for the German, Spanish and US companies that developed the current generation of CSP technologies to stay afloat.

Meanwhile, though, Chinese and Middle Eastern firms have been quietly acquiring CSP knowhow.

It is notable that of the companies involved in the Dubai bid, three are Chinese, two are Saudi Arabian and one other is from Abu Dhabi. Spain and the US have one company each in the running, France has two and Germany none.

If the Chinese have cracked low-cost CSP with storage, then that could open the door for North African mega-projects that were on the drawing board a decade ago but vanished from sight as interest in the technology dwindled.

Massive solar farms to export energy

The most famous of these was Desertec, which at one point garnered significant industrial support for the establishment of massive solar farms to export energy to Europe.

More recently, Nur Energie has proposed a similar concept to export North African CSP to European markets as far away as the UK.

Some experts have suggested that wind, rather than CSP, would be a better candidate for North African exports to Europe. Indeed, a too-narrow focus on CSP may have been one of the reasons why Desertec failed to fly.

However, for wind power’s variability to be overcome it would be necessary to have a very large integrated grid.

This would need to cover several hundreds of kilometres to overcome variations of up to half a day, or several thousands of kilometres of deal with seasonal fluctuations.   

The sun can be relied upon

CSP plants with storage can already deal with up to half a day of variability. And in North Africa they might not need to deal with much more, since the sun can be relied upon to appear every day… and is not usually hidden.

At Ouarzazate in Morocco, home to another major CSP project, there is a minimum of around 200 hours of sunshine a month.

Tapping into that for round-the-clock power might never be as cheap as resorting to wind, but if there is no political will for a pan-European supergrid then CSP might one day be an alternative worth considering.

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