Solar Thermal Power Plants - Market and Economics
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00:00
Computer animationLecture/ConferenceDiagram
Transcript: English(auto-generated)
00:11
Finally, we have now arrived at the last chapter of this series of videos. In this chapter we will look into some more market related aspects.
00:22
We will first review the past a little bit, then we will look at current trends, and finally we will focus on the most important economic indicator, the levelized cost of electricity. Let's start with looking into the past. As mentioned earlier, the early days of concentrating solar technology go back a long, long way.
00:47
The first systems were developed over 100 years ago. However, these developments came to a sudden end with the oil boom. Therefore, it is not very surprising that oil was also the reason why solar energy was rediscovered again.
01:05
This happened in light of the oil crisis in the 1970s. Oil became short and expensive and the search for alternatives began. In this course, research on concentrating technology was also revived. It was during this time that the European Test Center for Solar Technologies was established in Almeria in Spain,
01:26
founded by the International Energy Agency, IEA. Then, in the 1980s, the first commercial plants were built in California. I have already reported on this in detail in the chapter on parabolic troughs.
01:43
In the mid-nineties, it got quieter again around this technology, since sufficient fossil fuels, especially natural gas, were available again. Russia, for example, entered excessively in the natural gas market in the 1990s.
02:00
Then, in the early 2000s, environmental awareness began to rise and renewable energies were massively promoted and expanded, including concentrating technologies. The first plants with molten salt storage were then built in Spain. In the year 2011, it came then again to a small break,
02:23
since photovoltaics took a massive development at that time and the costs for PV had dropped dramatically. Whereas photovoltaics had been significantly more expensive than solar thermal power plants up to that point, now for the first time PV was offered at lower prices than solar thermal.
02:43
This led to another small collapse in the volume for new plants. Since then, mainly only plants with storage have been built, for example the largest plant to date with storage, which was built in Arizona, USA. Twelve huge salt tanks were erected here,
03:01
allowing 225 megawatt turbines to operate at full load for additional six hours. In 2017, another milestone was reached. For the first time, prices below 10 cents per kilowatt hours were achieved in several tenders.
03:23
After looking into the past, let us now turn to the market forecast. In 2014, the International Energy Agency for the first time prepared scenarios for a global energy supply with high shares of renewable energies. Scenarios with 27, 65 and 79% renewable energy share were developed.
03:47
While in the first scenario only a small amount of solar thermal electricity, referred to here as SDE, is used, for the third scenario, for the high-rent scenario, the share of SDE needs to be massively developed.
04:04
The amount of new capacity would have to be increased by a factor of 50, 5-0, compared to today. Thus, a lot of new solar thermal power plants would have to be built. How the expansion should be distributed among the middle countries is shown in the following graph.
04:25
We see here that the Middle East and Africa, countries rich in sun, play an important role, but also China and the US. According to this chart, Europe is not the preferred location, but even here, many new plants would have to be built.
04:45
Of course, there is always the question of what this will eventually cost. On the electricity market, costs are usually expressed in terms of the levelized cost of electricity, LCOE, which describes how much the generated kilowatt hour of electricity will cost.
05:04
This figure makes it easy to compare the costs of different technologies. When determining the LCOE, all costs over the life cycle are considered. This includes the investment costs and the operating costs and maintenance costs.
05:20
For fossil fuel power plants, fuel costs play a major role in operating costs. For renewable energy plants, of course, no fuel costs occur. The lifetime of such a plant is also included in the calculation, as well as the amount of electricity generated every year.
05:41
Here you find the equation to calculate the LCOE. Since the investment costs only occur once, but the other costs annually, the investment costs are weighted with the so-called Capital Recovery Factor, CRF. When calculating the CRF, the real debt recovery rate
06:03
and the assumed economic lifetime in particular play a role. Possible insurance costs are also taken into account. In the study mentioned above, the IRA made a forecast of the development of the LCOE for solar thermal power plants.
06:21
They started from the actual value at that time, which was around US$168 per MW, which corresponds to 16.8 cents per kWh. It was predicted that by 2020, the cost would fall to US$230 per MW.
06:42
In fact, however, the $100 mark was already cracked in the year 2018. The cheapest offer that year was just US$70 per MW. The value the IRA predicted only for the year 2035.
07:01
What was predicted to happen 20 years after the study was issued was already reached 3 years later. Thus, we can see what a great development the technology has taken. In the final slide, the cost development of solar thermal is shown in comparison to PV and wind.
07:22
We can see here the rapid drop of costs. However, solar thermal is still more expensive than PV and wind. But here comes a very important point. It must be clearly emphasized that this comparison is not necessarily fair. In the case of solar thermal power plants, the storage is already included in these cost numbers.
07:46
So here you get a predictable electricity production, and this is not the case with PV and wind. If a storage system were included also here, costs for PV and wind would be significantly higher.
08:02
This brings us to the end of this short chapter, and I would like to summarize the most important points once again. Solar thermal power plants are a long proven technology that is widely used in the world's sun belt. With costs of 7 to 80 cents per kilowatt hour, the costs are higher than for photovoltaics and wind.
08:23
However, this already includes storage costs, which is not the case for PV and wind. With an increasing share of volatile renewable energies in the power grid, solar thermal energy, which is easier to schedule, is therefore considered to offer great potential in the future.
08:43
And this is why we will continue to see some more of these impressive plants to be built in the future. Thank you for watching these videos on solar thermal power generation, and I hope you have learned a lot about this technology.