CSP Potential for Europa until 2030

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1 CSP Potential for Europa until 2030 European Solar Thermal Electricity Association Dr. Nikolaus Benz Dr. Ing. Luis Crespo Energy Forum DESERTEC April 2008 Hannover Messe

2 What s ESTELA? A European Association built on the basis of the former European Solar Thermal Power Industry Association, «ESTIA» Constituted in June 2007 Created to support the emerging European industry for the construction of solar thermoelectric power plants in Europe and abroad, mainly in the Mediterranean region (MENA) Involves all main actors in Europe Is based in Brussels in EREC house

3 Industry Members of ESTELA

4 CSP Technologies Provide sustainable, clean and reliable Power from 10 kw to 200 MW Parabolic Trough: - Size: MW - proven utility scale technology - commercial operation since preferred technology for new plants in USA/Spain/MENA Solar Tower: - Size: MW - Demo plants built in 80 s - First commercial 10 MW plant in operation in Spain - New 20 MW almost completed - Larger projects announced in USA Linear Fresnel Linear Fresnel: - Size MW - in development Dish Stirling: - Size 25 Dish kw Stirling: (modular) - few installations - Size kw operating (modular) - applications - few installations competing operating with PV - applications competing with PV

5 Current and Future Markets Source: Solar Millennium AG, Erlangen excellent good suitable not suitable

6 Renewable Energy goals in Europe DRAFT DIRECTIVE 2008 Renewable Energy 2020: 20% of final energy 34% of electricity (2005: 15%; 2020: 1200 TWh) Sweden Latvia Finland Austria Portugal Estonia Romania Denmark Slovenia Lithuania France Bulgaria Spain Poland Greece Slovak Republic Czech Republic Germany Italy Hungary Ireland Cyprus Netherlands Belgium United Kingdom Luxembourg Malta Target 2020 Actual % 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Share of energy from renewable sources in final consumption

7 Roadmap for CSP Plants (installed Power) Potential of CSP in Europe: installed capacity and annual energy production GW installed Spain Portugal Italy Greece Cyprus+Malta 30 GW / 85 TWh 60 GW / 170 TWh TWh/a GW / 11 TWh

8 Spain: feed-in law is the driver Today: 10 Plants in Construction (470 MW) About 60 projects currently under development

9 Some Ideas to make this happen (i) Remove Technical Barriers to Increase Competitiveness Remove Capacity Limits Allow for full flexibility in Hybridization with other Renewables and Conventional Power Systems to maximize Efficiency and Dispatchability Expand the European Grid to harvest the renewable power resource and distribute it to where it is needed

10 Some Ideas to make this happen (ii) Ensure stable and bankable Financing Instruments Longterm and stable Feed-In-Tariffs have proven as the most efficient instrument for sustainable renewable market penetration Ensure that the Kyoto instruments such as CDM and JI are applicable to CSP and mechanisms are bankable and sufficient. Establish loan guarantee programs via existing windows at multilateral banks, Use of existing mechanisms (national, global environmental and development programs)

11 Some Ideas to make this happen (iii) Open Transnational Renewable Energy Market Inside and Outside EU Let renewable electricity cross Intra-European borders (Schengen for Green Electrons) Let renewable electricity enter the European Union from outside Establish bankable transnational renewable transfer tariffs for such interchange

12 Europe Electricity demand can be covered in MENA Electricity import from Northern Africa is viable option 0.4% of Sahara area covers Europs electricity demand (world: 2%) HVDC technology provides efficient transmission (~10% losses) world EU25

13 MENA First Projects in a Promising Future Market ISCCS Plants in Morocco, Egypt and Algeria with small solar share Morocco and Egypt funded by GEF Project in Abu Dhabi in development 150 MW ISCCS at Hassi R Mel 244 MW ISCCS at Ain Beni Mathar 146 MW ISCCS at Kuraymat 100 MW in Abu Dhabi

14 Shake Hands with Northern Africa Tap Africa s unlimited solar resource Share the technology, know-how and employment Build up an industrial and human resource base for the implementation of CSP Develop economic relationships and create an investment framework by supporting electricity market liberalization in North Africa Such CSP employment opportunities will offer alternatives to emigration

15 Roadmap for CSP Plants (Cost reduction) What brings the cost down? 45 Innovation in systems and components Improving production technology Increasing the overall efficiency Enlarging the number of operation hours Bigger power blocks Reducing the O & M costs Sale Price (ct/kwh) PV, Spain 2100 kwh/m² DNI (Spain) 3%/a cost reduction Range between 2% and 5% cost reduction per year Wind, Spain 2600 kwh/m² DNI (MENA) 3%/a cost reduction Learning curve in construction Economies of scale Year

16 Grant the Future for the Next Generation Next generation technologies will significantly drive down costs Pre-commercial demonstration plants allow next generation technologies to enter the market Demonstration plants need loan guarantees from the EU to cover the technology innovation risk

17 The Role of the EU Push technology, pull demand, push generation Market development and penetration: Install demand pull instruments, promote feed-in-laws as most powerful instrument to push generation Open the European transmission grid for solar power from North Africa and secure this power import by implementing demand pull instruments Technology: R&D-funding for material, component and system development (e.g. coatings, storage, direct steam/molten salt systems, beam down,...) Fund demonstration plants to push new technologies

18 Technical and economical success of the first projects Stable green pricing or subsidies to bridge the initial gap in LECs (e.g. feed-in tariffs) Successful cost reduction Strong R&D to leverage the potential of technical improvement New markets and market opportunities (Power from North Africa to Europe) Strong CSP industry Key Success Factors to make this vision comes true

19 European Solar Thermal Electricity Association