Parameters affecting CSPoncentrated Solar Power and PV solar projects-ACWA Power

Head-quartered in Saudi Arabia, ACWA Power is a world leading power and water developer, and renewable energy has been a crucial part of its strategy. In solar power domain, ACWA is well-known for developing PV projects like Shuaa Energy 1 in UAE and Noor PV, and CSP projects including NOOR 1&2&3 in Morocco and Bokpoort & Redstone in South Africa.

Table: Solar CSP Projects by ACWA Power

For the bidding on Dubai 200 MW CSP tower project earlier this month, ACWA consortium submitted the price of USD 9.45 cents/kWh, creating the world-record low price for electricity generated from this technology.

As one of the global top solar CSP and PV project developers, ACWA Power is open to share experience and expertise on CSP project development. Below is the share on the topic about parameters affecting CSP and PV projects:

Relevant free Report: Challenges on Financing Solar CSP vs PV Projects.

1. Country policy, economy, regulation and IPP scheme

• Political and economic stability is key to the attraction for developers, lenders and all stakeholders and will drive higher competitiveness from PV and CSP stakeholders.
• Countries with well-developed regulations, laws and stable tax regime will be more appealing to lenders and investors
• Strong public and private partnership PPP or PPA schemes are giving stable and predictable project economics with strong and sustainable cash flows, which is even more important to CSP than PV – Mainly because CSP more capital intensive and less proven.

2. Contractual-Power Purchase Agreement (PPA) terms

• Strong PPAs provide visibility on long term cash flows and predictable revenues from electricity generation.

3. Climatic conditions and available land

• Local solar irradiation is key for solar projects for both PV and CSP technologies and will impact on tariff for implementation of a sustainable and viable Project.
• Dust alone and moreover when associated with humidity could be detrimental to solar energy production.
• High temperature or high wind conditions could affect the electricity generation.
• Large area is key to implement CSP and PV plants (less of a problem in Dubai and Morocco than in Europe.

4. Technical design

• Optimal size of solar field : To achieve the best tariff taking into account capital expenditure and operational expenditure
• Cleaning: Equipment type, number of trucks, frequency to optimize O&M costs
• Flexibility of generation: CSP using thermal storage can fit the peak needs.

5. Technology risks

• CSP technology especially tower technology is less proven to lenders. Driving the project contractual and financial schemes is the key risk.
• PV technology is better known to lenders even for utility scales projects. High competition has driven PV tariff at very low level.

6. Financing risks and impacts

• Macroeconomic situation and sovereign rating – political stability, economic situation of the country.
• Technology risk and expected asset life – key drivers dictating the length of the potential debt tenor, the debt pricing and other financing conditions.
• Off-taker strength – Mitigations of risks related with monthly payments and payment of termination amount from the off-taker.

Moreover, during the upcoming CSP Focus MENA 2017 conference on Sept.13-14 in Dubai, Andrea Lovato, Executive Director-Head of Renewable Development, together with Senior Executive from Financing Department from ACWA Power will join the discussions on financing and local content for CSP projects.

SAVE USD 400 by registering before June 15 this THURSDAY. Click to register or get the event brochure.