Feasibility Study of Five Solar Thermal Power Plants in Arequipa, Peru, and Their Comparison with Seto Targets
Authors:   Escuela de Ingeniería Mecánica, Facultad de Ingeniería, Universidad Continental. Av. Los Incas s/n, Arequipa, Perú, Yapu Maldonado Harry Aarón 
Published: January 2025

Knowing the Levelized Cost of Energy (LCOE) allows for evaluating the profitability of different energy generation technologies, identifying the options with the lowest costs, and, in turn, promoting the transition to more sustainable energy sources for governments and private companies. Therefore, it is essential to analyze the competitiveness of a concentrated solar power (CSP) plant in La Joya, Arequipa, Peru, in comparison with the local electricity provider (SEAL) tariff and the LCOE target set for 2030 by the U.S. Department of Energy's Solar Energy Technologies Office (SETO). This study focuses on assessing the feasibility of five CSP plant configurations with different capacities (19.9 MWe,50 MWe, 100 MWe, 150 MWe, and 200 MWe) in Arequipa by calculating the LCOE with varying durations of thermal energy storage (TES) from 0 to 18 hours. Additionally, the LCOE of the Gemasolar plant (19.9 MWe) in Seville, Spain, is analyzed and projected in Arequipa using economies of scale. The projected LCOEs of the CSP plants are compared with SETO’s target (5 ¢/kWh) and SEAL’s tariff (20 ¢/kWh). Finally, the LCOE is broken down into its main components to identify the most significant costs. The methodology was developed in three stages: (1) collection of technical, economic, and geographical parameters of Gemasolar along with climate and radiation data from Arequipa; (2) simulations in the System Advisor Model (SAM) software to optimize CSP plant design, considering the number and arrangement of heliostats, as well as the dimensions of the tower and receiver; and (3) processing of results in Excel to calculate the LCOE for each CSP configuration and the generation of contour maps in MATLAB to compare LCOE, TES, design power, and relative percentages against SETO targets, SEAL tariffs, and the Gemasolar plant. A total of 152 simulations were conducted in SAM to optimize the design. The results show that the LCOE of the analyzed CSP plants is between 120% and 260% above the SETO target, with values ranging from 11 to 18 ¢/kWh. However, the projected CSP LCOE is between 10% and 61% lower than SEAL’s rate, with values between 12.2 and 18 ¢/kWh. The four main components account for 78.6% of the total LCOE, with thermal storage being the most significant (37.5%), followed by heliostats (21.89%), the receiver (11.54%), and the power block (8.23%). The average annual LCOE reduction for CSP technology is approximately 1.69%. In conclusion, none of the projected CSP configurations achieve the SETO target, and even with a reduction in the main components, the LCOE would remain between 86.28% and 226.28% above this target. Thermal storage is the component with the greatest cost reduction potential, potentially lowering the LCOE by 20%. Nevertheless, all the projected CSP configurations are attractive for public or private investment, as they offer electricity at a lower cost than the local SEAL provider. Although Peru has photovoltaic plants that harness solar radiation, the LCOE of the analyzed CSPs is 219.2% higher. However, CSPs offer a significant advantage in terms of capacity factors, reaching up to 65% compared to 33% for photovoltaic plants.