Masdar Visit: Update on the Shams 1 CSP Project

While attending the World Future Energy Summit in Abu Dhabi, I was able to get several updates on the 100 MW "Shams 1" Parabolic Trough plant that is under construction in the UAE.

The plant is the largest solar plant under development in the region, and will likely be the largest in the world once completed in 2012 (although the 392 MW Ivanpah will likely eclipse it shortly thereafter).  The recently released GTM Research report CSP 2011 contains detailed project specs for every one of the 195 CSP projects in operation or under development globally.  Some of the key specs for Shams 1 from the report follow at the end of this article.

While there were some hiccups in the early days of the project, since the triple handshake of Abengoa/Total/Masdar in the photo above in July 2010, things seem to be back on track and progressing smoothly.  A quick re-cap of the timeline:

May 2009: Project put on hold, when DNI estimate was reduced by 12.5%

July 2010: Construction started

July 2012: Expected commissioning

There are several differences between Shams 1 and the typical CSP plant.

1) For Shams 1, 18% of the electricity will be generated by natural gas. 

2) Another difference versus Spanish plants is the absense of thermal storage.  This is likely due to a "Green Payment" form ADWEC (the local utility) for the electricity that is lower than the €0.27 euros/kWh offered in Spain.  So while in Spain, storage will be included so long as it can generate extra kWhs for a cost less than €0.27, here in Abu Dhabi, the agreed electricity payment is likely lower -- thereby making storage uneconomical.

3) In the UAE, dust reduces solar insolation by about 30% (it rarely reaches the standard testing condition of 1000 W/m^2), so the DNI is only 1,934 kWh/m^2/yr.  Surprisingly, that compares unfavorably versus locations in Spain where the DNI varies from 2,000-2,300 kWh/m^2/yr, and looks considerably worse than the best location in the U.S. Southwest (DNI of 2,800 kWh/m^2/yr).  This is somewhat unexpected, as the latitude for the UAE is about 24 degrees north, versus 37 degrees north for southern Spain, and 35 degrees north for the Mojave Desert. Clearly, the duststorms and haze have a siignificant impact.

Nevertheless, according to Frank Wouters, the head of Masdar Power, the LCOE for Shams 1 is lower than a comparable plant built in Spain (with potential savings from lower labor and land costs).

The Head of Engineering for Masdar Power, Dr. Olaf Goebel, also mentioned that the tariff (green payment) is based on 13% return on equity, which seems to gel with the required returns cited on p. 16 of the Mintz Levin Project Finance Greenpaper (produced in collaboration with GTM Research).