Spain's CSP: Powering toward conventional power price parity?

CSP Today talks to Dr Luis Crespo, secretary general of Spanish solar industry association, Protermosolar, about Spain's potential to be powered by CSP, and the trajectory of its feed-in tariff.

Interview by Rikki Stancich

CSP Today: Protermosolar recently announced that 100% of Spain's energy requirement could be meet by CSP, requiring less than 1% of Spain's territory. Realistically how much land is available for development that has transmission access?

Dr Luis Crespo: There has been a study, which has yet to be published, which reveals that Spain’s land potential for CSP is enormous. After discounting the cities, the mountains, the environmental protected areas, and so on, the real potential is 50-90 times the consumption depending on the CSP technology considered.  The cost of transmission build out and grid connection remains an issue, but ultimately there is no problem when it comes to availability of flat land.

CSP Today: By 2014, Spain will have 2.5GW of installed CSP capacity. How much of the country's total energy demand would this meet?

Dr Luis Crespo: Around 3% of the electricity consumed.

CSP Today: How much of Spain’s energy demand could potentially be met by CSP?

Dr Luis Crespo: Spain’s peak consumption is around 45,000MW, and transmission figures published recently by Spain’s TSO Red Electrica, indicated that in response to demand there are access points available, today, for more than 15GW in Spain for CSP projects.

I’m not advocating that 100% of Spain’s power requirement be met by CSP; only that it could. But to do so would demand a huge amount of work and additional investment to build out the required transmission. Of course, that investment opportunity could be leveraged to harness Spain’s renewable energy export potential.

But in reality, Spain’s energy demand will likely be met by a mix of renewable energy sources.

CSP Today: How much longer will Spanish CSP projects require support from feed-in tariffs?

Dr Luis Crespo: The next FIT will certainly be lower. We had began discussing the issue of FITs with the government, however Spain’s elections take place in November, so until then no new regulations will be set.

The current FIT covers all current projects assigned in May 2009, which has delayed construction of these projects. As such, Spain cannot be presented as a reference for feed-in tariffs; the feed-in tariff is so high because the projects were already developed according to the laws at that time.

From 2014, the first step will be to lower the feed-in tariff from its level in 2013. The industry expects the FIT to be lowered to zero by 2020, but we hope there will be a bonus for the quality of dispatchable electricity and the grid stability provided by CSP. We believe that volume will be developed very quickly.

CSP Today:  Players in emerging markets in particular have raised the issue that Spain’s CSP FIT is holding the CSP market back from becoming more price competitive, given that it is too high. Would you agree? 

Dr Luis Crespo: One has to understand the history; with a law that allowed projects to be built at 20c/kWh, a lot of developers flocked to develop CSP projects. To restrict the number of projects being developed the government introduced a rule that allowed only mature projects (those that had already acquired the solar components, secured land, grid access, had carried out the environmental impact assessment and had bank guarantees in place) to be eligible for that FIT. During assignment in 2009, only 2500 MW was eligible.

The government also did not want the projects to feed into the grid too early, so they only allowed for 500MW/year. Now, as a result, the FIT for the remaining projects is artificially high.

CSP Today: How many Spanish projects under construction and in the pipeline include a thermal storage facility?

Dr Luis Crespo: 62% are projects with storage; 38% are without.

CSP Today: Future facilities will more than likely include storage; how will this affect feed-in tariffs going forward?

Dr Luis Crespo: It is actually more expensive to have projects without storage, than with. If you look at it another way, it would be more expensive over the long run to have projects without storage that can produce less electricity a year, compared to projects with storage that produce more per year.

CSP Today: You mentioned that in lieu of a FIT, Protermosolar would like to see some sort of bonus or additional incentive for CSP. Can you please elaborate on the type of incentive you had in mind?

Dr Luis Crespo: We wouldn’t be asking for specific incentives, but rather we would expect that CSP would be eligible for the terms and conditions applied to conventional energy generators that supply firm energy. In other words, CSP producers should be able to go to market and ask for value-added dispatchability and grid stability.

CSP Today: The US CSP sector has taken a knock recently, with several major projects opting for PV in place of CSP, on the grounds of market conditions. How long will it be before CSP can compete on cost?

Dr Luis Crespo: People frequently compare the cost of PV, CSP and wind. But with PV and wind, a back-up source of energy is required. When people weigh up the costs, they need to take this into consideration; in other words, they need to compare the cost of CSP with thermal storage, with the cost of PV or wind, plus the cost of back-up power generation to smooth intermittency.

When you present the costs in this way, PV is actually more expensive. Furthermore, renewable technologies that require back up are not carbon-free; whereas CSP with thermal storage is.

To respond to this article, please write to the Editor:

Rikki Stancich: rstancich@csptoday.com

 

Related Event:

5th Concentrated Solar Thermal Power Summit, 29-30 November, Sevilla (Spain)

CSP is Evolving - Increase competitiveness and exploit new opportunities to develop a profitable & commercially successful business

 

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