Modular CSP Systems. GHESA Ingeniería y Tecnología S.A. Enhanced Plant Engineering Nov, Seville, Spain. José Manuel Nieto

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1 GHESA Ingeniería y Tecnología S.A. Enhanced Plant Engineering Nov, Seville, Spain José Manuel Nieto jnj@ghesa.net

2 GHESA - Fields of Activity Utility scale power generation Engineering consulting services for CC power plants, Coal power plants and Nuclear power plants. Renewable power generation EPC construction of Cogeneration, Biomass and Themosolar power plants. Infrastructures Project Managers and Building Services Consultants for Airports, Hospitals, Military installations. Company Introduction

3 References - Summary FOSSIL FIRED POWER PLANTS. GHESA/EA has designed Coal Power Plants and Combined Cycle Power Plants totalling over MW NUCLEAR POWER PLANTS: GHESA/EA has been the main engineer of 6 Nuclear Power Plants in Spain, totalling MWe and has participated in the design of 26 new Nuclear Power Plants in 15 different countries COGENERATION: GHESA has performed the engineering and design, and in some cases the turnkey supply of 35 Cogeneration Power Plants, for a total installed power of 500 MWe, BIOMASS PLANTS: GHESA has performed the engineering and design, and in some cases the turnkey supply of Biomass Power Plants, for a total installed power of 200 MWe SOLAR POWER: GHESA has performed the engineering and design, of Solar Power Plants, for a total installed power of 200 MWe Company Introduction

4 Current CSP Trend is towards large Plants

5 This tends to limit CSP projects to Government backed initiatives Project Nom. Power Financial Support Amount 2013 Ivanpah 392 MW DOE Loan Guarantee $1,600M Solana 280 MW DOE Loan Guarantee $1,400M Crescent Dunes 110MW DOE Loan Guarantee $737M 2014 Genesis 250 MW DOE Loan Guarantee $852M Abengoa Mojave280 MW DOE Loan Guarantee $1,200M 2015 Ouarzazate 160 MW PPP / Concessional Loans $1,042M

6 Consequences HIGHER RISK Very high concentration on a single project for Sponsor, IPP and EPC Necessity of sovereign guarantees LIMITATIONS ON INDUSTRY DEVELOPMENT Very few projects per year High concentration of contractor base High concentration of supplier base Limited competition SLOW IMPROVEMENT Extremely long development cycle (5 years from decision to COD) Narrow market discourages technology enhancement Relatively high LCOE as compared to other technologies

7 A Modular Approach LOWER RISK Investment per project can be in the $20-$30M range, low risk Sovereign guarantees generally not required FAVORS INDUSTRY DEVELOPMENT Large number of projects Expansion of contractor base Expansion of supplier base Reasonable competition FAST IMPROVEMENT Short development cycle ( 1.5 years from go ahead to COD) Wide market promotes technology enhancement Predictable reduction of LCOE

8 A Sample: Ouarzazate Source: African Development Bank, Project Appraisal Report, 2012

9 Growing similarities =

10 How did we get here? Repetitive Thinking We have replaced a fossil boiler with a solar one but made limited technical advances in the process itself. High Efficiency CSP is a case to demonstrate that the optimum does not usually coincide with the best. Plants may be very efficient but Capital Recovery Costs outweighs its effect making their energy expensive. Big Size A scale factor is supposed to provide lower prices and dilute operation costs bringing LCOE down. In real life the big risk implied translates into higher financial costs that will offset any scale gains unless concessional financing is in place.

11 Back to Basics LCOE is defined as: LCOE = I t + M t + F t (1 + r) t E t (1 + r) t We can break the equation into its three main components: LCOE = I t (1 + r) t + E t (1 + r) t M t (1 + r) t + E t (1 + r) t F t (1 + r) t E t (1 + r) t Capital Recovery Cost O&M Cost Fuel Cost

12 Competitive Factors Low Capex A standardized approach with simpler components will require lower Investment. Low Risk The combination of low investment with off-the shelf components will be perceived as low risk and allow projects to be self financed or sourced from local banks at lower rates. Low Maintenance Automatic plants requiring almost no operation need to be designed. Simple Storage Dispatching ability will allow extra income from network support services and payments for capacity.

13 Sample Modular Solutions Low temperature solar field + storage + ORC Source: Sopogy (

14 Sample Modular Solutions Low temperature solar field + storage + ORC Advantages: Low investment Minimal operation cost Highly replicable Non toxic Heat Transfer Fluids Fields for improvement: Modularize construction, minimize on-site assembly Minimize civil works requirements Simple ceramic storage media Certify systems to guaranty output for a given site Full remote operation

15 Sample Modular Solutions High technology ceramic turbine towers with storage Wilson SolarPower Source: Wilson Solar Power (

16 Sample Modular Solutions High technology ceramic turbine towers with storage Wilson SolarPower Advantages: Low investment Minimal operation cost Highly replicable No special land requirements Remote operation Fields for improvement: Industrialize fabrication, minimize on-site assembly Minimize civil works requirements Certify systems to guaranty output for a given site and configuration

17 GHESA - Partnership GHESA has a long tradition of working in successful collaboration with partners as exemplified by the ongoing experience of Empresarios Agrupados where four otherwise competitors share common objectives. This straight forward and loyal approach has allowed the company to work seamlessly with major contractors. Because of the significant bandwidth of the services provided, from simple consultant to EPC contractor, partner or subcontractor, GHESA can be your partner of choice for a variety of projects. Company Introduction

18 Thank you.. GHESA Ingeniería y Tecnología S.A. CSP Today Seville t 2013