CSP makes a grand entry into Kuwait
Kuwait recently started the bidding process for the 70 MW Shagaya Multi Technology Renewable Energy Power Park, which will include a 50 MW CSP plant with 10 hours thermal storage in addition to 10MW PV and 10MW wind.
Why was CSP chosen to generate the largest portion of energy, what qualities will KISR be looking for in applicants, and will local content be required?
Eight months after closing the qualification process for the Engineering, Procurement and Construction (EPC) of the 70 MW Shagaya Multi-Technology Renewable Energy Park, Kuwait Institute for Scientific Research (KISR) started the bidding competition for the prequalified groups announced on January 13, 2013. The process officially started after the Central Tendering Committee announced the readiness of the Request of Proposals (RfP) of the projects to be collected on June 9, 2013
Comprising 10 MW PV, 10 MW wind energy, and 50 MW CSP, the project once completed in the first half of 2016 will deliver up to 225,000 MWh to the electricity grid every year – enough to power around 5,000 Kuwaiti homes.
Out of 107 consortia who participated in the qualification process, 37 are now approved by KISR – eight of which are CSP consortia, according to Dr. Salem Alhajraf, executive director of KISR’s Energy and Building Research Center. The winning consortium will be required to design, build and operate the plants for six years, including two years as warranty period starting after the project’s commercial operation date.
A three-phased master plan
There is much more on Kuwait’s renewable energy agenda, however, given that the state-owned Shagaya project is the first of a three-phased master plan proposed by KISR. The second phase will expand the plant’s capacity by 930 MW to bring it up to 1,000 MW, and the third by another 1,000 MW to ultimately reach 2,000 MW by 2030. By then, the complex will generate more than 5,000,000 MWh of power every year, fulfilling the demands of nearly 100,000 households.
A 100-square-kilometre (38.6 square-mile) site in Shagaya – a desert area 100km (62 miles) west of Kuwait City, near the borders with Saudi Arabia and Iraq – has been designated for the complex. And while the first phase will be financed by the government, the second and third phases are expected to be offered to investors on a Build-Operate-Transfer basis for 25 years.
All power output from the project will be evacuated by KISR to the Ministry of Electricity and Water, Kuwait’s single electricity producer and distributor, which will jointly own the Shagaya Plants with KISR.
In every phase, KISR will be seeking an optimized mix of renewable technologies; particularly one that can serve the grid the best during the peak period between May and September. “KISR has a vision to develop an optimum renewable energy technology mix that can serve the grid at the peak load period”, Tilman Herzig, Head of Power Plants, Solar Thermal and Desalination at Fichtner, tells CSP Today.
Fichtner was appointed to work with KISR’s technical team in April 2012 to develop the 2,000 MW Shagaya RE Park master plan leading a consortium including Fraunhofer, CSP Services of DLR and Gnet.
The scope of work including development of the Master Plan optimized for power shaving, and producing associated promotional materials such as mock-up models and visualizations. Fichtner is also leading the implementation of a 12-month meteorological measurement campaign at five different locations in Kuwait, as well as putting the technical specifications and integrating the tender documents of the three projects consisting Phase One, which includes participation in tender evaluations and final contract negotiations.
CSP gets lion’s share
For the 50 MW CSP portion – the largest within phase one of the RE complex – parabolic trough technology will be employed with 10 hours of molten salt thermal energy storage, using the summer’s long daytime and short nights to operate as a base-load power in the peak period.
In addition, KISR requires the Shagaya CSP Plant to be capable of being fully dispatched in all specified load ranges up to 100% of the contracted power capacity, with a maximum power output during summer peak periods and a lower output during winter. The usage of a back-up fossil fuel will only be allowed for operational purposes (less than 1%), in the form of light fuel oil that would be transported to the site via road tankers.
In order to adapt to the desert’s harsh climatic conditions and to furnish the ground for more sustainable project concepts, Dr. Alhajraf highlighted that the principle of the project is designed based on the concept of limited water consumption for cleaning and for the steam-turbine closed cycle, where the cooling system will solely be dependent on dry air condensing to minimize raw water consumption.
“With regard to water availability for the Shagaya CSP Plant which will have a dry-cooling system, it is envisaged that raw water will be trucked from desalination plants to the site via road tankers”, notes Herzig.
He adds that KISR, Fichtner and CSP Services are currently carrying out a measurement campaign at different sites in Kuwait including the Shagaya Site. “For this purpose, meteorological stations and wind masts equipped with state-of-the-art standard sensors and devices have been installed”.
The 12-months measurement campaign started in September 2012 and upon completion, all relevant information will be available to assess the solar and wind conditions at these sites. As a result of the resource assessment, long-term reference data will be elaborated, reducing the risk associated with the resource and thus with the plant performance.
A large part of the project will be facilitated by KISR; not only will it provide the ready site for the selected contractor, but it will also provide information on solar and wind resources, a soil and ground investigation, and topographic survey data.
Based on this information, and taking into account site conditions of ambient air temperature, relative humidity, dust storms and sand accumulation, the applicants will design the Shagaya CSP Plant as they deem appropriate.
Nevertheless, preferences will be given to applicants that can demonstrate strong and successful previous experience in executing similar projects – particularly ones that have included solar thermal energy storage and dry cooling systems. High reliability and availability of power supply combined with the least cost solution for the power capacity and electrical energy sent to the grid will also be among the key assessment criteria.
“KISR is endeavouring to achieve a low electricity generation price based on a mature, bankable CSP technology and is thus looking for reputable CSP market participants with a record of CSP plants in successful operation,” notes Herzig.
Being a demonstration project, the Shagaya RE Park should enable Kuwait to assess the performance of different renewable technologies under its climatic conditions, and to determine deficiencies or limitations and conduct technical and economic feasibility analysis. At the same time, it will allow Kuwaiti engineers to develop hands-on experience, contributing to the local human capacity development.
As the Shagaya CSP Plant will demonstrate the capability of CSP in terms of reliable power generation while serving for KISR’s research and development purposes, it will be of highest interest that the CSP plant to be built reflects high-quality standards and provides proven technologies, systems and equipment.
Therefore, it is essential that the bidder has corresponding experiences in the engineering, procurement, construction, commissioning, operation and maintaining of such a plant type with such a size.
“The same requirement is valid with regards to the O&M capabilities of the bidder, as the O&M of the CSP plant with TES is quite sophisticated. Apart from experience-related requirements, the bidder must demonstrate financial strength since, as typical for CSP projects with such a volume, high financial risks need to be carried by the involved parties,” explains Herzig.
Local content required?
Compared to other countries, where local content requirements have been set for CSP projects, such as in South Africa and India, for the Shagaya CSP Plant no explicit conditions have been defined to date.
However, according to Herzig, the RfP includes requirements in relation to certain levels of employment of Kuwaiti personnel during the construction and operation of the Shagaya CSP Plant, as well as training of Kuwaiti personnel.
“Particular attention will be paid to staff training programs and know-how transfer. Although requirements regarding local content were not included in the RfP, it is expected that any local content statements will be positively assessed”.
Now that the bidding round has opened, prequalified applicants have been invited for the pre-bid meetings with KISR team and its technical, financial and legal advisors. This will be followed by an invitation to visit and inspect the Shagaya Project site and the surrounding area.
As an oil producing country, Kuwait will highly benefit from investing in alternative energies to diversify energy resources and reduce the domestic consumption. The saved oil and gas could be shifted from up-stream consumption to more down-stream industries – such as petrochemicals, polymers and pharmaceuticals – where there is better utilization of hydrocarbons with a potential of much higher economic value and higher return.
Driven by this reality, as well as the desire to reduce carbon footprint and diversify energy sources for future needs, the GCC member now aims to produce 15% of its electricity, or 2,000 MW, from renewables by 2030, when the entire Shagaya Master Plan will be realized.
Shagaya 2000 MW multi technology renewable energy park