Concentrating solar power (CSP) technologies that use mirrors instead of photovoltaic (PV) panels are challenging to finance. CSP is a newer technology that is just starting to bring down costs through economies of scale and improved efficiencies.
But there is a compelling rationale for concentrating technologies. PV doesn’t entirely answer the needs of the transmission system, while CSP with thermal energy storage (TES) can.
“Dispatchable CSP can discharge from storage to serve high-price peak loads that occur outside the daylight hours, including the late afternoon and early evening," according to BrightSource Director of Economic and Pricing Analysis Dr. Udi Helman. The value of this extra peak power makes CSP more competitive “by several dollars per megawatt-hour.”
PV cannot be dialed up or down, whereas by channeling more or less CSP output to storage, it can be ramped. Once in storage, it can also be released in varying amounts. This is the kind of flexibility conventional generators have which allows utilities, by altering the level of their output, to accommodate the forecast uncertainty and variability of non-dispatchable renewable generation. This provides grid operators with ramping reserves and regulation services.
CSP plants with TES have the flexibility of conventional thermal plants, according to Helman, and “offer higher ramp rates and ranges than large thermal plants.” This could not only replace some conventional generation but could “provide a more flexible generation mix” that would “result in greater use of non-dispatchable solar PV and wind.”
Finally, Helman noted, “TES allows shifting of the solar resource to periods of reduced solar output,” and it does so, he said, “with relatively high efficiency.”
In doing these things, Helman explained, it saves money. Peak generation has higher value. Furthermore, according to Helman, “as more renewables are added, it will change energy market prices.” First, PV will displace “older, more expensive gas plants.” Then, “right after the daylight hours, as other plants -- primarily gas -- are ramped up to compensate for the rapid ramp-down of inflexible solar production,” he explained, citing simulations by the California Independent System Operator Corporation (CAISO) that show that stored CSP generation can be dispatched.
“The costs of these reserves are currently estimated to be in the range of $4 to $8 per megawatt-hour in California by 2020 or at high penetrations in other systems,” according to Helman, especially where “gas peakers or other types of storage to support integration” are built.
The implication: A balance between PV and CSP will make it possible to use more PV -- and to use more sun.
“Some percentage of solar production could be curtailed more frequently as additional non-dispatchable wind and solar generation is added to the grid,” Helman explained, citing an NREL study. “As [non-dispatchable] PV production increases, this becomes more probable. Dispatchable CSP can be stored rather than produced, and hence allows for integration of more total solar than if only non-dispatchable solar generation is interconnected.”
According to NREL calculations, Helman noted, if a future gas price of $4.50 per MMBTU is assumed, a relative fuel savings benefit of CSP with TES over PV is about 0.5 cents per kilowatt-hour.
Depending on the size and storage capacity of the CSP/TES system, the total value is 0.7 cents to 2.0 cents per kilowatt-hour. “NREL’s studies show,” Helman explained, “that at some point, the incremental value of increasing the solar field and adding storage begins to diminish,” because “overnight energy prices are low, so selling more energy at lower prices will not increase the CSP value.”
The total value of CSP with TES has been estimated by NREL modeling and simulations. At 10 percent to 15 percent solar, with gas prices in the range of $4.50 to $9.00 per MMBTU, the estimated value of CSP with storage is an additional 1.6 cents to 4.0 cents per kilowatt-hour.
The NREL research, according to Dr. Helman, breaks those values into four categories: 1) The energy shifting value is ~0.5 cents to 1.0 cents per kilowatt-hour; 2) The increased capacity factor value is ~0.7 cents to 2.0 cents per kilowatt-hour; 3) if PV is 6 cents per kilowatt-hour, the value of reduction in curtailment is estimated at ~0.3 cents per kilowatt-hour; and 4) the reserve and integration value is 0.1 cents to 0.7 cents per kilowatt-hour.
A real-world approximation of the total value of CSP with TES is that the original PPAs with SCE set BrightSource’s seven solar power plants’ obligation at approximately four million megawatt-hours of electricity per year. With the addition of TES at three plants, new agreements set the same level of production, but with one fewer plant.
“From a policy standpoint, a simplistic approach to choosing a generation technology might be based simply on picking the option with the lowest overall levelized cost of electricity (LCOE),” NREL researchers observed, but “deployment based simply on lowest LCOE ignores the relative benefits of each technology to the grid, how their value to the grid changes as a function of penetration, and how they may actually work together to increase overall usefulness of the solar resource.”
Read the first three parts of Herman Trabish's series: