CSP technology holds three advantages over PV technology: it delivers higher quality power, it experiences fewer intermittency issues and it has the potential to use integrated storage.
The concentrating solar power (CSP) industry in North America has experienced setbacks in recent months, including a number of large CSP projects facing lawsuits or being replaced by solar photovoltaic (PV) projects. A new report from IDC Energy Insights, Business Strategy: Make-It-or-Break-It Time for Concentrating Solar Power (Document #EI227491), evaluates the challenges faced by the industry andreveals why it is too early to give up on CSP.
“This means completing projects that are currently in the pipeline on time and on budget, while pursuing markets where they can extract a premium for the grid-friendly power CSP provides.”
Large CSP plants have been facing challenges due to the difficulty of siting them without disturbing environmentally or culturally sensitive lands, and the difficulty of financing projects that incorporate unproven technologies. At the same time, CSP plants face serious competition from PV, as PV plants continue to drop in price, are relatively quick to permit and build, and investors are comfortable financing them.
Despite these challenges, CSP technology holds three advantages over PV technology that make it attractive for solar projects: it delivers higher quality power, it experiences fewer intermittency issues (and can go so far as to provide baseload power if storage is incorporated), and it has the potential to use integrated storage to align its output with peak demand periods.
"Over the next few years, it will be critical for the CSP industry to demonstrate technical viability and cost effectiveness, to gain the confidence of investors and expand its foothold in the market," said Jay Holman, research manager for IDC Energy Insights’ Renewable Energy Strategies research advisory service. "This means completing projects that are currently in the pipeline on time and on budget, while pursuing markets where they can extract a premium for the grid-friendly power CSP provides."
While large CSP projects enable high efficiencies and low costs, smaller projects are easier to site, permit, and finance. In the report, Best Practices: Finding the Sweet Spot for Micro CSP – The Holaniku at Keahole Point Case Study (Document #EI227275), IDC Energy Insights provides an in-depth analysis of an innovative micro CSP project that uses technology optimized for projects in the 2-50 Megawatt size range. The approach, which incorporates two hours of thermal energy storage, attempts to bring the benefits of CSP to smaller, more manageable, and more financeable locations.
This IDC Energy Insights report provides an in-depth look at the micro concentrating solar power (CSP) plant Holaniku at Keahole Point, located in Kailua-Kona on the Big Island of Hawaii. The pilot plant produces 2MW of thermal energy that can be used to generate up to 500kW of electricity through an organic rankine cycle (ORC) power block, and the site includes up to two hours of thermal energy storage.
The plant was designed by Hawaii-based Sopogy Inc., as were the solar collectors used in the plant. Development of the plant was carried out by Keahole Solar Power LLC (KSP), a Sopogy spinoff. KSP has a 10-year power purchase agreement (PPA) for the output of the plant with the Hawaiian Electric Light Company (HELCO). This report identifies the objectives, the major drivers behind the company’s decision to undertake this project, a description of the implemented solution, the business value and the major lessons learned.
According to Jay Holman, lead analyst for IDC Energy Insights’ Renewable Energy Strategies program, "The HKP project was an important test of the feasibility of the micro CSP approach in general, and Sopogy’s approach in particular … only time will tell if the company will be able to compete in a world of rapidly falling costs for PV plants."
In some states, utilities are mandated under Renewable Portfolio Standards (RPS) to generate a certain percentage of their power using renewable energy methods, such as wind and solar power, and, as such, are motivated to contract with or build new renewable energy plants, including those run by CSP. CSP systems use lenses or mirrors to concentrate large areas of sunlight, which convert to heat to drive a steam turbine connected to an electrical power generator, producing renewable electrical power.
