Solar Thermal Power Generation: New Hotspot of Global New Energy

Source:Wasion group Author:admin Date:2012/6/29 12:38:54

Editor’s note: The competition between solar photovoltaic (PV) power generation and solar thermal power generation has long existed. From the perspective of comparative advantages, solar thermal power generation is more suitable for fundamental energy and the best candidate to replace thermal power as basic power load carrier. But solar PV power generation is a better complementary energy in cities, applied in distributed energy. Developed countries such as the United States, Spain and Germany have started taking solar thermal power generation as the major choice to alternate conventional energy in the future. As solar thermal power generation is very likely to be a much-sought investment area in renewable energy after wind power and solar PV power generation, it is promising to develop solar thermal commercial power stations in large scale in China. Currently, the main problem we face is how to avoid misunderstandings about the solar thermal industry.

Concentrating Solar Power (CSP) technologies are becoming a hotspot in solar power utilization. Although the gross installed capacity of solar thermal power generation that has been built and in operation across the globe is less than 2GW, developed countries led by the United States have been giving priority to solar thermal power generation in the utilization of solar power.

In March 2012, AbengoaSolar in Spain, BrightSourceEnergy in the US and other world-leading solar power companies founded Concentrating Solar Power Alliance, which is dedicated to energetically developing the energy supply system that integrates CSP technologies (hereinafter referred to as solar thermal power generation) and thermal power storage. Solar thermal power generation is a stable and reliable renewable energy and economically, it is ready for large-scale development and able to tackle energy supply crisis in the US and even the world, according to Tex Wilkins, Executive Director of the alliance.
AbengoaSolar is one of the main initiators of the desert solar power project in Africa, and BrightSourceEnergy is an emerging company in global power tower CSP and was granted a 1.4 billion-dollar loan guarantee from the US Department of Energy to build three solar power tower thermal power plants in Mojave Desert in the US.

Developed countries are active in the research and development of solar thermal power generation technology and their investment is increasing, too. According to rough estimates, the gross installed capacity of solar thermal power generation projects that have been built and under construction worldwide has exceeded 4GW, and that of projects to be constructed reaches even around 15GW.

Solar thermal power generation has developed rapidly.

The oil crisis in the 1970s stimulated countries around the world to develop new energy. The United States, for example, constructed large-scale trough solar thermal power stations in the desert in California, triggering a boom in the development of solar thermal power, which is the early stage of global solar thermal power generation industry. However, as the crisis ended, the desire to develop new energy diminished accordingly and market demands shrank as well, which affected large-scale application of solar thermal technologies to some extent.

Compared with solar PV industry, solar thermal power develops slower because solar PV is badly needed in space technology, particularly in aerospace. For example, spacecraft, artificial satellites and space stations all rely on PV power generation. In contrast, solar thermal power generation is usually applied and oriented at large-scale fundamental projects on the ground, and its market is yet to take shape, except the construction of some demonstration project in a few countries such as the US and Spain. Therefore, solar thermal power generation technology, though mature, has not seen large-scale industry development around the world.

Recently, Spain and Germany as well other countries adjusted their subsidies to new energy. In particular, Spain issued a decree abolishing the subsidy policy of renewable energy generation on January 27, 2012, and insiders in the industry were concerned whether this would be another disaster to the overall development of new energy.

However, US did not change its commitment to vigorously developing renewable energy. The latest released budget of the US Department of Energy for Fiscal Year 2013 is 27.2 billion dollars, growing by 3.2% over last year, of which 2.3 billion dollars is earmarked for energy efficiency research and development, automotive technology improvement and biofuel. In addition, the fund for clean energy research grew by nearly 30% than FY2012. The US government has been committed to supporting domestic CSP industry and some large projects are being carried out, among which the 400MW project of BrightSourceEnergy and the 250MW power plant of Abengoa have been granted loan support from the federal government.

Field Company Field Company
Model System Acciona
Solar Millennium
Solare XXI
Tower System Abengoa
Brightsource Energy
Stirling Energy Systems
Schlaich Bergermann und P.
Infinia Corporation
Brayton Energy
Linear Fresnel System Novatec
Trough System Cummi
Advanco Corporation
Turbines Mitsubishi
Stirling Engine Kockums
Stirling Energy Systems
Infinia Corporation
Molten Salt Friatec-Rheinhute
World Famous Companies in CSP
The latest statistics released by Bloomberg New Energy indicate that solar thermal power plants under construction and in operation in 2011 increased by 54% year on year. Now solar thermal power plants can be seen in the US, Spain, Germany, France, the United Arab Emirates, India, Egypt, Morocco, Algeria and Australia, among others.

CSP technology has been developing rapidly. The European Commission estimates that the CSP installed capacity in the EU will reach 30GW by 2020 and that its power output will be 85TW.h. The CSP R& D projects currently funded by EU’s Seventh Framework Programme (FP7) mainly focus on: construction of large-scale power generation demonstration projects applying different CSP technologies, optimization comparisons and studies of economic feasibility and adaptability; operability enhancement and cost reduction, and promotion of R&D of cheap alternative materials and research of energy storage technology; R&D of hybrid solar technologies and research of hydrogen production with CSP technologies; construction of large-scale CSP infrastructure; regulated design and standardized R&D of 250MW solar thermal power plants.

This year, NurEnergie of the United Kingdom and the Desertec Foundation in Germany jointly announced that they were planning to build a 2GW CSP Project in Tunisia. The construction starts in 2014 and it is planned the project will be able to supply power to Italy through submarine cables since 2016.
Australia plans to achieve 100% renewable energy supply within 10 years and its base load energy will also be provided by renewable energy, according to Zero Carbon Australia 2020: Stationary Energy Plan it published. The plan estimates that large-scale CSP system equipped with molten salt storage can reliably provide 24-hour power supply and that 60% of Australia’s power supply will come from CSP generation.

A promising future for the industrialization of China’s solar thermal power generation

China’s research on solar thermal power generation technology started in 1979. After over 30 years’ development, China has made considerable progress in the design of heat absorbing materials, thermoelectric conversion materials, energy storage materials, light concentration devices, groove vacuum tubes, heat absorber and trough concentrator system.

The National Solar Thermal Energy Alliance under the Ministry of Science and Technology was established in 2009, whose members include Institute of Electrical Engineering, Chinese Academy of Sciences, companies such as Huadian Group and Himin Solar, universities and research institutes. The Alliance plans to construct 1GW solar thermal power plants during the 12th Five-Year period (2011-2015). The Institute of Electrical Engineering, Chinese Academy of Sciences officially joined Solar Power and Chemical Energy Systems of International Energy Agency as a contracting party on behalf of China on March 1, 2011.

The bidding for the 50MW solar thermal power generation project in Inner Mongolia opened on January 20, 2011 and Datang Renewable Power became the bid winner at a low price of 0.9399 Yuan/KWH. This is the first concession bidding project for solar thermal power generation in China and an important step in the commercial operation of China’s solar thermal power generation. The project required over 60% equipment localization and set an example for the application of solar thermal power generation in China. However, the bidding price makes it difficult to make profit and the industry development still lacks motivation, so it is hard to promote large-scale development of solar thermal power generation industry.

Numerous companies have entered the field of solar thermal power generation in recent two years, including not only centrally-administered state-owned companies but also private sector. According to rough estimates, the capacity of solar thermal power generation projects under construction and in planning in China has reached 5.33331GW. The Ministry of Science and Technology plans to build 10-100MW solar thermal power generation demonstration stations by 2015 and100-1000MW commercial power stations in deserts by 2020; and starts bulk solar thermal power generation construction after 2020.
The new energy development overseas usually starts with technological R&D and demonstration projects funded by concerning government agencies, and then gets policy support and fiscal subsidy so as to propel the development of the whole industry. Yet new energy development in China starts with original equipment manufacturer after there are market demands, followed by introduction of equipment and finally competition with low price, an inertial cycle for many of China’s industries and the root cause of China’s lack in innovation.

Starting Date Planned Finishing Date Location Scale Technical Route Company
Construction started on July 1, 2010   Yanqing, Beijing 1MW Tower Institute of Electrical Engineering, Chinese Academy of Sciences, Himin Solar and Huadian Group
June2009   Mouding County, Yunnan 10MW PV and solar thermal hybrid Yunnan Yintong Bamboo Charcoal Co., Ltd. and Yunnan Solar Power Research Institute
Bidding opened on January 22, 2009 30-month construction period Ordos 50MW   Datang Group
July 18, 2010   Dezhou 25MW Linear Fresnel Himin Solar, Institute of Electrical Engineering, Chinese Academy of Sciences, and Huadian Group
September 2010   Ruanling, Hunan 50MW Trough China Aviation Industry General Aircraft Co., Ltd.
December 28, 2010 October 2011 Jiayuguan, Gansu 10MW Trough Datang Group and Tianwei Group
Contract signed in December 2009   Golmud, Qinghai 1GW Tower Lion International Investment Ltd. (Australia) and Huadian Group
Agreement signed in January 2010 The following 10 years Yulin, Shaanxi 2GW (initially 92MW) Tower Shandong Penglai Electric Power Equipment Manufacturing Co., Ltd. and eSolar
    Aba, Sichuan 100MW Tower and trough hybrid Tianwei Group
CSP Projects in Planning and under Construction in China 

The competition between the two technical routes in solar power generation, solar PV and solar thermal power generation, has long existed. In fact, either PV or solar thermal power generation has its own advantages, suitable environment and restrictions, and there is no absolute superior and inferior. From the perspective of comparative advantages, solar thermal power generation is more suitable for fundamental energy while the biggest advantage of solar thermal power generation lies in friendly grid integration, scale effects and clean production, so solar thermal is the best candidate to replace thermal power as basic power load carrier. But the biggest strength of PV power generation is its flexibility, high efficiency, low requirements for sunshine, small occupation and capacity of module deployment, so it is more suitable to be a complementary energy in cities and applied in distributed energy.

More than 300,000 square kilometers of China’s over 1.3 million square kilometers desert and Gobi areas is suitable for solar thermal power generation, and the power output of a CSP project covering 80,000 square kilometers Gobi area is equal to that of China for the whole 2008, according to the measurement and analysis of Institute of Electrical Engineering, Chinese Academy of Sciences. In addition, CSP complements with existing coal, natural gas and small-scale hydro power generation and can increase energy utilization efficiency through waste heat utilization.

The development of solar thermal power generation in China, though in early stage, does not start from scratch because many of its components come from traditional industries, China has accumulated experience in thermal power plants and the basis of the industry is better than that of solar PV industry. China is still behind other countries in solar thermal power generation technology, although having mastered it, and is yet to achieve industrialization. In particular, it needs to import equipment for some key components. For example, Glasstech, a US company, monopolizes cylinder-shaped and bending-radius equipment, external compression equipment and deep bending equipment used for making condensers. Except a few small power stations for demonstration and trial, China lacks experience in operating large-scale commercial power station system.

The feasibility of transmitting solar power from Africa to Europe is yet to prove although Desertec Industrial Initiative is supported in Germany.
The threshold of solar thermal industry is relatively high to businesses, especially known for high initial investment costs. About 90% of CSP costs are spent in initial investment, the capacity of power unit is large, economical installment in power stations is large-scale, and the investment recovery period is long, so it requires more of risk resistance capacity.

Currently, the Chinese government is seeking alternative new energy. From this perspective, solar thermal power generation is possibly the most promising new energy. Policies play a critical role in further development of solar thermal industry. Solar thermal power generation was ranked in the first place in the category of new energies that are encouraged for development in the Catalogue for the Guidance of Industrial Structure Adjustment released by the National Development and Reform Commission (NDRC) in May 2011. Government’s attention to solar thermal power generation in terms of policies has increased significantly. However, related substantial details are yet to be carried out, particularly in supportive policies such as power purchase and subsidies, to eliminate uncertainties over CSP development; otherwise, domestic enterprises in supply chain will follow the same old road to ruin by catering for foreign markets.

Project 2015 2020
Conservative Estimates    
Cumulative Installed Capacity (MW) 1,000 3,000
Power Output (TWH/Year) 2.706 9.078
Investment Costs (10,000 Yuan/KW) 25,000 18,000
Location Rate 60% 80%
Capacity of Primary Supply Market in China (100 million Yuan) 15 billion Yuan 43.2 billion Yuan
Objective Estimates    
Cumulative Installed Capacity (MW) 3,000 9,000
Power Output (TWH/Year) 9.93 32.283
Investment Costs (10,000 Yuan/KW) 20,000 13,000
Location Rate 80% 90%
Capacity of Primary Supply Market in China (100 million Yuan) 48 billion Yuan 105.3 billion Yuan
Optimistic Estimates    
Cumulative Installed Capacity (MW) 5,000 15,000
Power Output (TWH/Year) 19.715 63.135
Investment Costs (10,000 Yuan/KW) 15,000 8,000
Location Rate 90% 95%
Capacity of Primary Supply Market in China (100 million Yuan) 67.5 billion Yuan 114 billion Yuan
 Three Estimates of China’s CSP Markets
 Economic Analysis: Location and Scale Effects

The economic analysis of renewable energy should take into consideration not only absolute cost but also relative cost to conventional energy. Factors affecting absolute cost include construction cost, operation and maintenance cost, government subsidy, capital cost and service life, among others, while relative cost includes fossil energy price rises and drastic fluctuation risks, carbon cost, and the like.
It is difficult to make economic analysis for CSP technology, especially cost accounting, because CSP technology is known for numerous technical routes, lots of system links, complex structure, and many parameters, and its industrialization is immature. In terms of the analysis of solar thermal power generation equipment, the proportion of heliostat field is the largest, whether in trough or tower power generation, so it is the main target to reduce costs. Factors affecting costs also include:

Intensity of Solar Radiation.

As the intensity of solar radiation varies from place to place, the power output under same investment conditions varies as well. Power output increases as the intensity of solar radiation becomes higher.

Scale Effects.
The larger the generating units are, the higher the efficiency is. For generating units with same capacity, the higher the initial parameter is, the more efficient the generating units are. When system efficiency increases by 2%, the initial investment cost per kilowatt will fall 1%. For tower power plants, when the system efficiency grows to 25% from 15%, the investment cost of heliostat field will drop 40% and total costs will fall 20%. When the installed capacity increases from 50MW to 100MW, unit investment cost will fall 12%; when the capacity grow to 200MW, the unit investment cost will decline by 20%.

Operation and Maintenance Costs.

Although the construction cost is high, the energy cost needed for operating a CSP power station is low, so its long-term benefits are considerable. Operation and maintenance costs include costs of power station operation, fuel, cooling water and heliostat field maintenance, among others. Infrastructure investment accounts for 10% of the costs of conventional fossil energy power stations while their operation and maintenance costs account for 90%, but the structure of CSP power station costs is the opposite. A typical 50MW trough CSP power station needs about 30 operating staff and 10 people in heliostat field maintenance and its operation cost is about 1.3-3 cents/KWH.

Heat Storage Devices.

The LCOE (leveled cost of energy) of trough CSP with energy storage devices will be 28% lower than those without energy storage devices. The cost of molten salt energy storage system is 30-50 dollars/KW. If the storage cost declines to 15-20 dollars/KW or less, CSP with larger heat storage devices will become a fundamental load technology.

Government Subsidies.

Policies related to cost mainly include feed-in tariff, loan guarantee, fiscal subsidy, tax preferences, reduction of import tariff and accelerated depreciation, among others.

Financing Environment.

Since its initial investment is considerable and investment recovery period is very long, solar thermal power generation needs external financing support, so the availability, convenience and capital cost of financing are one of the crucial factors determining LCOE. All CSP power station developers or suppliers in the US, for example, can get financing in advance but will not get non-recourse loans until they succeed in operation while all CSP projects in Spain can get non-recourse loans during their construction.

Advices for Policies Supporting Solar Thermal Industry

At present, China’s solar thermal power generation is still in early stage. Compared with the US and Spain, it lacks experience in long-term operation of independent key technologies and equipment for large-scale solar thermal demonstration power stations.

Before 2011, over 95% of the solar thermal power station installations were in the US and Spain. The price of solar thermal power fell from 4 Yuan/KWH in the beginning to less than 2.1 Yuan/KWH now. The current price can truly reflect the cost and operation needs of present solar thermal power stations.

The development of solar thermal power generation industry in China still needs certain policy environment, industry environment, technology R&D system improvement and support from concerning authorities at various levels. Meanwhile, it is advised that the government should help and guide small and medium enterprises in establishing an integrated system to form a complete clean energy industry chain from materials to manufacturing, system integration and finally application so that the proportion of solar thermal power generation and other new energy in energy utilization will increase.

It is estimated that solar thermal power generation will boom in China within five years, but as the industry is yet to take shape, it is unrealistic to rely on business circles alone and the government needs to issue detailed rules and regulations and support the industry.

All-China Federation of Industry and Commerce hopes NDRC can enact key supportive electricity price policies for the first batch of large-scale solar thermal power stations as soon as possible. Taking all factors into consideration, the price of power from solar thermal generation should be between 1.6-1.7 Yuan/KWH and it is estimated that the price will drop to 0.8-1.0 Yuan/KWH after 4 to 5 years and stabilize within 20 years. (By Yao Zhihao, a staff in Institute of Electrical Engineering, Chinese Academy of Sciences, China’s first PHD in solar thermal power station overall design and system integration)