Concentrated Solar Power (CSP) sector argues for increase in South Africa allocation

The Concentrated Solar Power (CSP) industry is advocating that South Africa increase its CSP allocation to achieve economies of scale.

Paul Gauché, Sasol senior researcher and director, Solar Thermal Energy Research Group (STERG) at Stellenbosch University, supports the proposed increase. In an interview with CSP Today he outlined what he believes are the reasons behind the proposed base case increase. “South Africa’s integrated resource plan allocation is based on systems modelling where optimisation is done on the system based on prescribed constraints. The base case seems to account for a number of learnings in the last few years where amongst others, South Africa has realised the role CSP can play in resolving the evening peak.”

Two projects have been allocated in the third bidding round of South Africa’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme for this purpose, and a very favourable evening peak tariff ceiling was introduced.

“The base case also updates a number of assumptions on cost and risk. The assumptions on lead times and cost of nuclear as well as the cost vulnerability of coal and gas have caused those to drop, and CSP is likely the beneficiary of this situation due to the technology’s ability to be flexible,” Gauche says.

The draft IRP refers to there being a wide range of outcomes for CSP development under the different scenarios with a range of options clustering around 8,000 MW capacity in 2050. When asked what he thinks should happen going forward, Gauche comments, “We would like to know more about the scenario modelling and believe that improved assumptions on cost and behaviour of CSP are needed in the models. Our own analysis using detailed solar and weather data shows that both wind and PV have virtually no firm capacity even together.”

Gauché continues, “We have completed a study showing that 3.3 GW can be deployed now to drop the cost of electricity for the evening peak. If we implemented this, we could help drive the learning rate.”

Also advocating increased CSP allocation are the findings of an in-depth study, ‘Assessment of the localisation, industrialisation and job creation of CSP infrastructure projects in South Africa. The study was undertaken by enolcon and EY on behalf of the country’s department of trade and industry, the German Development Corporation and the Southern Africa Solar Thermal and Electricity Association (Sastela).

The advantages of an increase CSP capacity and the roll-out of further CSP plants in South Africa would include cost reduction potential; enhanced socio-economic benefits; development of local production.

Assessment of the localisation, industrialisation and job creation of CSP infrastructure projects in South Africa – a 2030 vision for CSP states, “Given the relatively early stage of CSP compared to other renewable energy technologies (such as PV or wind), CSP’s cost reduction potential remains significant. It is estimated that in the region of 28% to 40% of overall CSP investment costs could be reduced by 2030.”

The study adds that the level of cost reduction would be due largely to economies of scale as a result of increased plant capacities.

Sastela chairperson, Ayanda Nakedi, says, “South Africa’s electricity supply is getting more and more constrained and the unique storage benefit of CSP could assist with this. This offers the storage option South Africa needs.”

According to the study, “Developing a local CSP manufacturing capacity will require a stable policy framework and a significant CSP market size underpinning it. The current CSP MW allocation is considered as being too low to allow for the development of manufacturing plants to supply CSP components.”

Professor Wikus van Niekerk, director of the centre for renewable and sustainable energy studies at Stellenbosch University, who believes the CSP allocation in round three of only 200 MW was too small, says, “The only way to get the cost of CSP down in South Africa will be to significantly increase the CSP allocation in the REIPPP and thereby facilitate at least some convergence to only one or two CSP technology suppliers. We trust that an additional allocation will be forthcoming for round four. In future we need 10 to 20 CSP projects and an allocation of 1.0 GW or more.”