# Presentation: 029718

**November 13, 2003**

**Due-Diligence Study of Parabolic Trough****and Power Tower Technologies**

**Hank Price**

**Notes:**
Background
Trough Technology Assessment
S&L Due Diligence
Conclusions

## Why was study conducted? 

**National Research Council 2000 Review of EERE Programs – “[DOE] *****should limit of halt its R&D on power-tower and power-trough technologies because further refinements to these concepts will not further their deployment*****.”**
**EERE Strategic Program Review identified the need for further technical analysis of CSP R&D**

## Approach

**DOE initiated a review process whereby an independent engineering firm would conduct a detailed analysis of CSP which would be in turn reviewed by a second independent NRC panel.**
**Issues:**
**Earlier pier review of CSP tainted by industry association participation**
**Original NRC comments viewed as politically motivated.**
**	**

## Approach

**Conduct “Due-diligence-like” Analysis of CSP**
**CSP Market – central generation power**
**Power industry best suited to judge merit of the technology for the application**
**Real question: Can you finance a plant?**
**Two types of investment:**
**Debt & Equity**
**“****Due-diligence” conducted by debt to evaluate the risks**
**Hire independent engineer to conduct due-diligence**

## Sargent & Lundy

**Major Engineering Firm for Power Generation**
**Big in nuclear & fossil **
**Power engineering consulting services group**
**Conduct due-diligence on power projects**
**Independence?**
**S&L was the power plant engineering on last trough plants**
**However, no current involvement**

## S&L Work Scope

**Examination of trough and tower baseline technology assumptions (next plant)**
**Relied heavily on SunLab and industry data**
**Analysis of industry projections out to 2020**
**Evaluated scale-up, technology improvements, experience learning**
**Detailed review of cost and performance**
**Assessment of R&D risk**
**Assessment of the level of cost reductions likely to be achieved based on S&L experience.**
**Perform a financial analysis to determine Levelized Cost of Energy (LEC) **

## Methodology

**Detailed review of assumptions**
**Independent validation of cost and potential cost reductions and performance improvements where possible**
**Level of analysis consistent with due-diligence effort for major power project**
**Use conservative assumptions when not confident in expected changes**
**Not an independent bottoms up analysis of assumptions**

## SunLabParabolic Trough Technology Assessment

- SunLabParabolic Trough Technology Assessment

##  Parabolic Trough Technology Assessment 

**SunLab Technology Assessment**
**Solar Resource**
**Power Markets**
**Parabolic Trough Technology Baseline**
**Near-Term Plant**
**Avenues for Cost Reduction**
**Development Scenario**

## U.S. DNI Solar ResourceNew Perez DNI Data 

**Notes:**
CSP technologies require direct normal solar radiation or the beam component

The best resources are in the desert southwest

## NREL Siting Studies

- 1% of Land
- >7kWh/m2-day
- ~30 GWe

- Land with Slope <1%

## Power Markets for CSP

**Market Characteristics**
**Focus on US Southwest**
**Large-scale centralized generation**
**Wholesale power market**
**Competition**
**Fossil fuel costs**
**Electricity cost projections**
**Value of Solar Power**
**Ability to dispatch to meet peak load**

**Notes:**
The 2nd topic is Power Markets

## SW Coal Costs Platts Research and Consulting

**Air quality constraints limit development of new coal power plants**
**No growth in coal demand**
**Coal prices are reduced through mining productivity enhancements**

## SW Natural Gas ForecastPlatts Research and Consulting

**Strong demand growth for NG in electric power sector**
_**Near-term**_
**Low 2002 prices resulted in drilling cut backs**
_**Mid-term**_
**Higher exploration and production costs**
_**Long-term**_
**LNG caps NG prices**

## Conventional Technology Cost of Electricity (New Plants)

- Source: Platts Research & Consulting

- *At a 20% capacity factor.

|  | Service | Lowest Cost When Used | Corresponding Cost $/MWh |
| --- | --- | --- | --- |
| Pulverized Coal | Baseload | 60-100% | $41 to $28 |
| Combined Cycle | Intermediate | 20-60% | $75 to $41 |
| Combustion Turbine | Peaking | 0-20% | $75* |

**Notes:**
3 Primary Generation Technologies
If you were PUC for a state 
- based on current technology efficiencides & cost, and fuel costs shown
- this is how you would select which plant to build

Coal at 85% CF $31.4/MWh
NG at 85% CF $36/MWh

## California System Load Data from 1999 CalPX

- California System Load Data from 1999 CalPX

- Data Source: CalPX 1999

**Notes:**
Value of power is highest during the peak.
Both Summer & winter

Compare the winter peak price to summer price at same load.

## Solar Plant

- Solar Plant

- Source: Platts Research and Consulting

- Nevada Power

## Solar Plantwith Thermal Storage 

**With Thermal Energy Storage**

- Solar Plantwith Thermal Storage

- Source: Platts Research and Consulting

## Solar/Hybrid Plant 30 MW SEGS Plant Output

**On-Peak**

**Day of Year**

**Notes:**
CSP plants can be hybridized to dispatch energy
SCE peak noon to 6 summer week days Jun-Sep
In the middle of the summer
In Sept the sun is lower
Hybridization auguments solar output 

## Wholesale Value Analysis

- Natural Gas Price $3.87/MMBtu
- Mojave Desert Location

- Source: Platts Research and Consulting

| Case | Capacity
Factor
(%) | Average Price Received
($/MWh) |
| --- | --- | --- |
| Average Price | 100 | 41 |
| Trough Plant w/o TES, SM 1.0 |  |  |
| Trough Plant  with 4hrs TES |  |  |
| Hybrid Plant |  |  |
| Wind Plant 	Class 4
		Class 6 |  |  |

| 43
57 | 41
40 |
| --- | --- |

|  | 25 | 47 |
| --- | --- | --- |
|  | 34 | 53 |
|  | 50 | 56 |

**Notes:**
Analysis by Platts looking at the value of energy from a solar plant
Assuming competitive wholesale market pricing in the Southwest
Assuming a gas price of $3.87/MMBtu
The average price of power was $41/MMBtu
Then looked at the price for 3 solar plants
- Solar incrases the value (15%)
- storage doubled the benefit (29%)
- hybrid (37%)
We also looked at wind for one region in the Mojave Desert (Not characteristic of all sites) but value was close to the average for both class 4 and 6 sites.

## Market Conclusions

**Baseload Power – 3 to 4****¢/kWh**
**Intermediate Load – 3.5 to 5.5¢/kWh**
**Green Adder – 0.5 to 1.0¢/kWh********* **
**Value of CSP 4-6¢/kWh**

## Trough LEC Learning CurveHow low can it go?

- Data Source: 	Luz International Limited, 1990

- SEGS I-IX, 354 MWe of Trough Power Plants

**Notes:**
In the case of power technologies, using experience curve analysis for LEC is attractive because it integrates the capital cost, O&M costs, and plant performance into a single statistic.

This is advantageous since these three parameters are not independent. Reducing capital cost, for example, can have a negative impact on O&M costs and performance. 

This is the LEC for the SEGS plants based on the actual financed price and the Luz projected performance and O&M costs. The Progress ratio is lower (0.85) for the LEC because it also includes other factors such as performance and O&M costs.

According to this, the LEC would reach 6 cents after 10,000 MWe were installed.

LC is informative for looking at trends of historical behavior but can be dangerous to use for forecasting future behavior

## Parabolic Trough Case Study

**Can Troughs Compete?**** **
**Market value of power****	**** ****	****4-6****¢/kWh**
**Last SEGS plant cost  ****	****	****~12****¢/kWh**
** ****Ways to reduce cost**
**Technology R&D**
**Policy**
**Market deployment/competition**

## Integrated Performance Model 

## Baseline Assumptions

**Technology**
**Performance Data**
**Capital Cost**
**O&M Cost**
**Economic Assumptions**

## Technology BaselineSEGS VI Trough Plant

**30 MWe (~100 bar, 700F, 37.5% gross)**
**LS-2 Collectors (391 C)**
**Receiver – Luz cermet**
**Hybrid (NG boiler) **
**No thermal energy storage**

## Performance BaselineNREL Trough Performance Model

- Daily Modeled Vs. Actual Gross Solar MWhSEGS VI 1999 Data

**Notes:**
Excelergy able to accurately reproduce SEGS VI actual performance
If used appropriately, Excelergy should be able to give good performance estimates for future plant.

## Capital Cost Baseline

**Cost Assumptions**
**Started with Luz/Flabeg Cost Data **
**Roadmap (1998)**
**Solar Field Costs Updated from Flabeg Rpt. (1999)**
**Solar Field Costs Modified for LS-2 collector**
**Structure & mirrors same as LS-3**
**Increased HCEs, drives, interconnections (ball joints)**
**Thermal Storage Costs **
**Nexant Model (2000)**
**TES Development (2000-2002)**

## O&M Cost BaselineKJC Operating Company

*** Scale for solar field size based on 500,000m****2**

**Notes:**
Solar Field O&M 
KJCOC Input & O&M Cost Reduction Study
Spare Parts – 0.5% (3% for HCEs)
Power Block O&M
KJCOC Input 
Bechtel Solar Two Report 
Spare parts (0.4% of capital cost for system)

## Baseline Economic Assumptions

**DOE LCOE Methodology**
**2002 real dollars**
**IPP Project Financing**
**30 year cash flow model**
**Current financial incentives**
**Sargent & Lundy financial assumptions**

## Technology BaselineCost of Energy 

## Near-Term State-of-the-Art

**Current State-of-the-Art (Plant built today)**
**50 MWe (~100 bar, 700F, 37.5% gross)**
**LS-2+ Collectors (391 C)**
**Receiver – Solel UVAC2**
**Solar only or hybrid **
**Solar multiple 1.5**
**No thermal storage**

## State-of-the-Art50 MWe Parabolic Trough Plant

## Avenues for Cost Reduction

**Concentrator Design**
**Advanced Receiver Technology**
**Thermal Energy Storage**
**Plant Size**
**O&M**
**Design Optimization/Standardization**
**Power Park**
**Competition**
**Financial**

## Slide 35

## Concentrator SizeImpact on Cost of Energy

## Trough Receiver TechnologyImpact on the Cost of Energy

- Near-Term Receiver
- Technology Assumption

- Field Tested

- Near-Term 50 MWe Trough Plant

## Thermal Storage Technology Impact on Cost of Energy

- Near-Term 50 MWe Trough Plant

- _Enabling Technologies_
-  Salt HTF
-  Thermocline Storage

## Plant SizeImpact on Cost of Energy

- Near-Term 50 MWe Trough Plant

- _Enabling Technologies_
-  Ball Joints
-  Salt HTF

## Cost of Capital Impact on Cost of Energy

- Near-Term 50 MWe Trough Plant

## Development ScenarioParabolic Trough Technology

|  | SEGS VI 1989 | Near-Term | Mid-Term | Long-Term |
| --- | --- | --- | --- | --- |
| Plant Size: MWe
Solar Multiple | 30
1.2 | 50
1.5 | 100
2.5 | 400
2.5 |
| Collector
Receiver | LS-2 
Luz | LS-2
UVAC2 | LS-3+
Adv | Adv 
Adv |
| HTF | VP-1
390 C | VP-1
390 C | Salt
450 C | Salt
500 C |
| TES | NA | NA | 12 hrs
TC Dir | 12 hrs
TC Dir |
| Capacity Factor | 22% | 30% | 56% | 56% |
| Solar to Electric  | 10.6% | 13.4% | 16.2% | 17.2% |
| Cost Reduction |  |  | 5% | 20% |
| Capital Cost $/kWe | 2954 | 2865 | 3416 | 2225 |
| O&M Cost $/kWh | 0.0462 | 0.0233 | 0.0103 | 0.0057 |

## Sargent & LundyDue-Diligence Review

- Sargent & LundyDue-Diligence Review

## Power Cycle Cost

**Figure 4-3A — Scale-Up Cost Reductions: Power Block ($/kW)**
** **

**SunLab**

**S&L**

## Capital Cost Comparison

## S&L Summary Findings 

**Trough Capital Cost Comparison**

## S&L Summary Findings (cont.) 

**Trough O&M  Cost Comparison**

## S&L Summary Findings (cont.) 

**Trough  Levelized Energy Cost**

## Where does the cost reduction come from?

**Breakdown of LEC Cost Reduction****(Scale-up, R&D, Volume Production) **

## Where does the cost reduction come from?

**Breakdown of Baseline System**

**Cost Reductions**

## S&L Summary Findings (cont.) 

**Power Tower Levelized Energy Cost**

## Conclusions (1)

**... ****it is S&L’s opinion that CSP technology is a proven technology for energy production**
**There is a potential market for CSP technology**
**Significant cost reductions are achievable assuming reasonable deployment of CSP technologies occurs**

## Conclusions (2)

**Currently CSP electricity is more expensive than conventional fossil-fueled technology. **
**Early deployments will require incentives**
**Significant cost reductions will be required to reach market acceptance **
**There was no analysis of the incentives required to reach market acceptance**
**S&L focused on the potential of cost reductions with the assumption that incentives will occur to support deployment through market expansion.**

## Conclusions (3)

**S&L found the “SunLab” methodology and analysis to be credible. **
**The SunLab projections are considered a “best-case analysis”**
**The two sets of estimates, by SunLab and S&L, provide a band within which the costs can be expected to fall. **

## Comparison of Trough and Tower

## Discussion

**This study is not really a forecast of future technology cost, but a plausible scenario**
**The markets will dictate the technology**
**Other factors will decide if plants are really built**
**Not appropriate to directly compare tower & trough results from study**
**Analysis was not fully consistent between technologies**
**Technologies at different states of development**
**Lower cost tower electricity is not necessarily higher value that trough electricity **
**Need to consider value of power as well as cost**

## Parting Thoughtsto Analysts

**Need to look at technologies objectively: **
**Need to focus on the real market or application requirements**
**For power technologies we should consider the benefits (impacts) of our technologies from the perspective of the Utility.**

## Parting Thoughtsto Analysts

**Do we overstate the value of distributed power?**
**Net metering is really a subsidy born by other consumers.**
**Internal generation is one thing, but modifying the distribution system to allow bi-directional flow is another.**
**Do consumers really want the added complexity?**
**The effort to balance the grid is not insignificant, how is balancing 100 grids easier**

## Parting Thoughtsto Analysts

**Does wind power really deserve a capacity credit?**

***California Renewables Portfolio Standard***
***Renewable Generation Integration Cost Analysis***

## SEGS III-VII On-Peak Performance 

**On-Peak Capacity Factor**
**SEGS III-VII (1989-2003)**

**Source: KJC Operating Company**

## Where to find the report!

- http://www.nrel.gov/solar/parabolic_trough.html

**Assessment of Parabolic Trough and Power Tower Solar Technology Cost and Performance Forecasts**
- Can be found at: