The U.S. Department of Energy’s Solar Energy Technologies Program has released a Funding Opportunity Announcement (FOA) for companies to develop storage solutions, manufacturing approaches, and new system concepts for large-scale concentrating solar power (CSP) plants. The collaborative public-private partnerships aims to reduce the nominal levelized cost of energy (LCOE) of CSP power plants from 13-17 ¢/kWh in 2007 to a target of 7-10¢/kWh by 2015 and 5-7¢/kWh by 2020. DOE estimates that satisfaction of these cost targets could lead to installation of 16,000 to 35,000 MW of new generating capacity by 2030. This would result in a savings of 36-80 million tons of CO2 emitted to the atmosphere each year relative to coal plants of similar capacity.
The FOA anticipates three phases of effort: concept feasibility, prototype development, and field validation with a “go/no-go” decision at the end of each phase. DOE is providing $5M toward the FOA in FY07 with an additional $5M planned for FY08. These funds will be sufficient to cover all of Phase 1, and will allow several successful projects to begin Phase 2 activities.
DOE has found that Nevada, New Mexico, California, Arizona, Utah and Texas have enough combined potential project sites to provide up to 6800 MW of generating capacity – roughly equivalent to seven times the country’s current electricity generating capacity. CSP technology is the least expensive solar technology for providing large quantities of electrical power, and with sufficient storage, it can deliver baseload power.
Worldwide, CSP is currently being developed for utility-scale, central power generation markets in the U.S., Spain, North Africa, and Israel. Spain is the most active in CSP development. Four tower and three trough plants, totaling 180MW are currently under construction/development, and three of the plants are slated to have between six and sixteen hours of thermal storage. Interest continues to rise, and the national electric utilities planning on developing as many as one dozen 50MW trough plants.In the U.S., nine CSP power plants totaling 354 MW have been operating reliably in California for over 16 years, and CSP seems poised to grow significantly in the state. Each of the three major California utilities (Southern California Edison, San Diego Gas and Electric, and Pacific Gas and Electric) have signed power purchase agreements for a CSP project or have indicated an intent of doing so. In August 2005, Southern California Edison (SCE) signed a power purchase agreement for 500 MW of CSP dish-engine systems on a 4,500 acre site near Victorville, CA, with an option to expand the project to 850 MW. In September 2005, San Diego Gas & Electric (SDG&E) signed a power purchase agreement for a 300 MW dish-engine project in California’s Imperial Valley, with an option of expanding the project to 900 MW. In August 2006, the Pacific Gas and Electric Company initiated plans with Luz II, LLC, to purchase at least 500 MW of solar energy beginning in the spring of 2010.
The state of Nevada has put in place tax credits enabling construction of a 64 MW CSP project near Las Vegas which will be dedicated this summer. Nevada Power will purchase the power from the plant. A 1 MW CSP system, completed in 2006, is operating in Arizona for Arizona Public Service. In addition, several other utilities, under the leadership of Arizona Public Service, are investigating the potential of forming a consortium that would buy power from a 250 MW CSP plant built in Arizona.
This funding opportunity appears to be about five years later than it should have been, since there has been considerable commercial activity during this time. By the time these projects are complete, PV solar may well be beating their price goals. Whether these projects will speed up technology development or not is questionable, but any way we can get solar more competitive is good. CSP does have the advantage of not using any materials that are likely to be in short supply, unlike PV solar which is likely to have continuing supply problems with materials used to make the cells, as material suppliers continue to struggle to keep up with demand. This scenario is likely to happen even to thin film suppliers when their production volumes reach several gigawatts per year, maybe a relatively happy problem that will occur with sucess.