AfDB and World Bank Workshop – CSP
Scale up program for Middle East and North
Africa Region
CSP in South Africa
Tunisia June 2012
Vikesh Rajpaul
Programme Manager – Concentrating Solar Power
Renewables Business Unit, Eskom
E-mail vikesh.rajpaul@eskom.co.za
Website www.eskom.co.za
Outline
Strategic Drivers
Why develop Concentrating Solar Power in
South Africa
Projects under development
Challenges in CSP project development
Opportunities from CSP project development
Lessons Learnt
•2
Strategic Drivers
South Africa 1994 - 2008 growth
64%
14%
Real GDP
•How do we
keep the
lights on and
move to a
cleaner
future?
Power capacity
(~5 000 MW)
•3
Strategic Drivers
South Africa’s renewable energy strategy driven by low-carbon
objectives and priorities outlined in:
•South Africa’s Long-Term Mitigation Scenarios (LTMS),
•Renewable Energy White Paper of 2003,
•National Energy Efficiency Strategy of 2009,
•Government’s National Climate Change Response green
paper of 2010,
•The New Growth Path Framework (2010),
• The Integrated Resources Plan (IRP) 2010.
•4
Strategic Drivers
Policy-Adjusted IRP (Capacity)
Total additional new capacity
(without committed) until 2030 in GW
25
15%
23%
6%
6%
9%
20
42%
Share
of total
new GW
17,8
15
8,4
Solar PV
1,0
CSP
8,4
Wind
9,6
10
6,3
5
2,6
2,4
Hydro
Gas CCGT
3,9
0
Coal
Energy
share
Nuclear
Peak OCGT
Renew-ables
in 2010
 = 260
TWh
90%
5%
5%
0%
< 0,1%
0%
in 2030
 = 454
TWh
65%
20%
5%
1%
< 0,1%
9%
Source IRP 2010
•5
Why develop Concentrating Solar
Power in South Africa
•6
Strategic Drivers - CSP with Storage
typical Summer day demand
38000
1000
36000
34000
800
32000
600
30000
400
28000
200
26000
0
24000
0:30
3:30
6:30
9:30
12:30
•DNI Wh / m2
typical Winter day DNI
15:30
18:30
21:30
typical Winter day demand
1200
38000
1000
36000
34000
800
32000
600
30000
400
28000
200
26000
0
24000
0:30
3:30
6:30
9:30
•Power available from
conversion technologies does
not align with the needs of the
system operator to meet
demand.
12:30
15:30
18:30
21:30
•7
•Demand MW
•DNI Wh / m2
1200
•Demand MW
typical Summer day DNI
Projects under development
•8
Eskom CSP plant
•
Central Receiver with Molten Salt as the heat transfer
and storage medium.
•
100 MWe with a capacity factor in excess of 60 %.
•
The plant will be dry cooled or hybrid cooled
designed to optimise water usage.
•
All auxiliary power will be sourced from the National
grid and backup will
be sourced from diesel
Solar 2
generators.
•
Life of plant will be a minimum of 25 years.
•
The plant will displace about 9m tons over its
lifetime.
•
It can provide electricity to 400 000 standard homes
per annum if 200kW per month is assumed.
•
1000 – 1500 jobs can be created during construction
and approx. 70 during operation
•9
Gemasolar
9
Eskom CSP plant status
•
EIA complete – ROD obtained – Revision in progress
•
Land Procured.
•
Funding
obtained
Development
Bank
from
World
(AfDB),
Bank,
Kredit
African
Anstalt
fur
Weideafbau (KfW), European Investment Bank (EIB),
French
Development
Agency
(AFD),
Clean
Technology Fund (CTF).
•
Five years of Solar data – site and satellite.
•
Water Supply – 300 ML / annum secured.
•
Owner’s Engineer appointed.
•
Construction
scheduled
to
start
in
2014
for
completion at the end of 2016.
10
Analysis of MW allocation and remaining MW
Technology
MW allocation
in accordance
with the
Determination
MW capacity
allocated in
the First Bid
Submission
Phase
MW capacity
allocated in
the Second
Bid
Submission
Phase
MW capacity
for allocation
in future Bid
Submission
Phases
Onshore wind
1 850.0 MW
634.0 MW
562.5 MW
653.5 MW
Solar photovoltaic
1 450.0 MW
631.5 MW
417.1 MW
401.1 MW
Concentrating
solar power
200.0 MW
150.0 MW
50.0 MW
0.0 MW
Small hydro (≤ 10MW)
75.0 MW
0.0 MW
14.3 MW
60.7 MW
Landfill gas
25.0 MW
0.0 MW
0.0 MW
25.0 MW
Biomass
12.5 MW
0.0 MW
0.0 MW
12.5 MW
Biogas
12.5 MW
0.0 MW
0.0 MW
12.5 MW
3 625.0 MW
1 415.5 MW
1 043.9 MW
1 165.6 MW
Total
Source : Dept of Energy
Preferred Bidders Salient Terms CSP
Bid Window 2 Bid Window 1
Price: Fully Indexed (Ave Rand per
MWh)
R 2 512
R 2 686
MW allocation
50 MW
150 MW
Total Project Cost (R’million)
R 4 483
R 11 365
Local Content Value (R’million)
R 1 638
R 2 391
36.5%
21.7%
Job Creation : Construction (People)
662
1 165
Job Creation : Operations (People)
50
70
Local Content %
Source : DoE
•13
Challenges in CSP project development
•14
Challenge – Current Cost of CSP in relation to PV
Challenge - Worldwide PV market more
than sextupled since 2007
•16
•Source : Boston Consulting Group
Challenge – difficulty in obtaining finance for
technically most suitable technology
EPRI April 2012 Technical update
report for IRP of South Africa confirm
Central Receiver plant has lower
capital costs and lower LCOE when
compared to Parabolic Trough plants
Site location – Upington
Assumed same financing structure for both
technologies.
Costs are reported in January 2012 South
African Rand.
•17
Challenge – Level of Maturity of Central Receiver
/ Power Tower
•Molten Salt
•Proven in demonstration projects,
and recently completed.
construction of first commercial
plant (Gemasolar) – 19.9 MWe.
•
Under Construction – Solar Reserve
– Tonopah – 565 MW thermal with
storage. Planned completion 2015.
•Gemasolar built by Torresol
•Direct Steam Generator
• PS 10 (2007) and PS 20 (2009) –
saturated steam.
• Siera Sun 5 MW – 2009 -saturated
•
Under Construction – Ivanpah – 1-3
with 1 x 123 MWe/ 2 x 133 MWe
planned to be in operation by 2013
– superheated steam.
•18
•PS-20 built by Abengoa
•(Source: RENAC, 2010)
CSP Challenges - Summary
CSP Tower technology is in early stages
of development life cycle.
Lacks long term commercial and technical
operating experience.
Achieving balance between cost, risk and
affordability is a challenge.
Cost of technology is a barrier to entry.
Difficulty in financing
projects without
concessional financing
Often compared to
Wind and PV but should
be compared to gas in
South Africa
Local industry involvement non-negotiable.
Skills constraints for
first projects.
Local Currency funding limited and foreign
exchange risk a challenge.
Increased cost of capital
•19
Opportunities from CSP project development
•20
Opportunity – Potential for reduction in cost of
CSP
•Impact of the quality of the solar
resource (DNI) on the relative LEC
•Barrier to entry: Current cost of CSP.
•European Academies Science
Advisory Council - Nov 2011 predicts grid price parity with Fossil
between 2020 and 2030 in Europe,
and sooner in places with higher DNI.
•Source : EA SAC 2011
•Eskom anticipates CSP cost
reduction through:
• Capacity expansion,
• Research and Development,
• Localisation.
•21
•EA SAC projected LEC reduction
with CSP Growth
1
6
Economic growth engine
2
Job creation and skills
development
3
Positive Impact on local
communities
4
Positive Environmental footprint
5
Catalyst for change in South Africa
Summary of opportunities for CSP in South Africa
Enabler of S.A. Development
through electricity for all initiative
Source: Eskom, BCG analysis
22
Lessons Learnt
• Government support is imperative in embarking on Sustainable projects.
• Effective diversification not possible without concessional funding.
• Benefits to Local industry must be demonstrated to harness support:
– Job creation
– Poverty alleviation
• Thorough Environmental Impact Assessment with no fatal flaws is key to obtaining local
support.
• Site selection - Should be close to established infrastructure like:
– Water supply, National roads, Transmission connection, Airport etc.
• Since local expertise is limited, consultants may be required initially but with emphasis
on training and development.
• In procuring the plant, emphasis should be placed on local supply, T&D, and technology
transfer.
•23
THANK YOU
Vikesh Rajpaul
Programme Manager – Concentrating Solar Power
Renewables Business Unit
Eskom
Tel (ZA) +27 11 516 7414 | Fax +27 086 667 6958 | Mobile +27 73 799 9893
Eskom Holdings SOC Limited (Reg No: 2002/015527/06)
E-mail vikesh.rajpaul@eskom.co.za
Website www.eskom.co.za
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