The role of storage in cutting CSP costs

Historically storage has been seen as a useful asset for CSP, but one that increased costs. Now it is being touted as a major route to cost-competitiveness.

Figure 10.1. LCOE ranges by renewable power generation technology, 2014 and 2025. Image courtesy of IRENA.

By Jason Deign

The Renewable Power Generation Costs in 2014 report from the International Renewable Energy Agency (IRENA) has a diagram that is a must-see for CSP fans. It shows the levelised cost of energy (LCOE) for CSP last year and what it might be in 2025. The contrast is startling.

While in 2014 the LCOE ranges for parabolic trough and power tower technologies remained way above most other renewable generation sources, bar offshore wind, biomass gasification and some grid-scale PV, by 2025 they look set to plummet.

IRENA’s analysis shows CSP LCOE ranges dropping proportionally more than those for almost any other renewable generation source, breaking through to the range of today’s fossil fuel electricity costs.

But what is perhaps most striking is that the CSP technologies leading this cost reduction will be the ones with storage.

While storage-less parabolic trough plants, the dominant plant design today, will drop to an LCOE of between roughly USD$0.15 an $0.2 per kilowatt-hour (kWh), “by 2025 solar towers [with storage] could be producing electricity for between $0.11 and $0.16/kWh,” IRENA said.

This would make power-tower CSP competitive with fossil fuel generation and with a number of other renewable energy sources, including offshore wind, grid-scale PV, hydropower and most forms of biomass.

Storage would also help reduce the LCOE for parabolic trough plants, although to a lesser extent. Nevertheless, the predictions are notable because until relatively recently storage was generally seen as something that would add to plant costs and potentially drive up LCOE.

Capacity factors

What has changed is an understanding of how the extra capital expenditure (cap-ex) and operational expenses (op-ex) needed for storage can translate into improved capacity factors that reduce LCOE over the lifespan of a plant.

“CSP plants with storage are more costly in terms of investment than a plant without storage,” confirmed Rafael Guédez, solar thermal power R&D engineer at the KTH Royal Institute of Technology. “It’s obvious, because you need more equipment and instrumentation.”

“However, in terms of LCOE a plant with storage is less costly because when the combination of the solar multiple and the storage is optimal the additional energy you generate is such that it more than compensates for the additional cap-ex and op-ex.”

The effect is particularly marked with power towers because it is easier to integrate and operate molten salt storage with the plants. With parabolic trough designs there are challenges whether molten salt is used directly as a heat transfer fluid (HTF) or alongside traditional oil-based HTFs.

“If you had to add salt to an existing trough plant with oil, you need oil-to-salt heat exchangers, salt tanks, salt pumps, instrumentation, installation,” said Bill Gould, chief technology officer at SolarReserve, a power tower developer.

“So it’s a very big delta if you add salt to a CSP plant with two fluids.”

When using salt as the HTF, he continued: “It takes a kilometre of trough per megawatt of electronic output, so if you have a 50MW plant you have 50 kilometres of piping, and it’s all horizontal. How do you drain it?

“And then you have all the swivel joints and flex hoses; the thing about salt is it tends to leak through the tiniest crevice, so you have a leak potential for all that horizontal piping.”

Tower plant

In contrast, he said: “In a tower plant you have 200 metres up, 200 metres down, probably 200 more metres to the heat exchangers and back. You have a total of about 600 metres and almost all of it is vertical, so it drains automatically.”

Nevertheless it is clear storage can be an asset to just about any CSP plant. And it is likely the beneficial impact of storage on LCOE could still be underestimated.

“It is important to remember that the calculations for the LCOE of CSP assume that all electricity generated has the same value,” said IRENA in its 2014 power generation costs report.

“However, this is not the case, so plants with higher storage levels are likely to provide more flexibility to capture the increased value of peak prices.”

As an example, IRENA notes that CSP with thermal energy storage has been estimated to provide between 26% and 41% more value when added to a model of the Colorado and Wyoming electricity system than a “flat block” of power generation.

All this sounds like good new for CSP. But the IRENA forecasts come with an important caveat.

“The reduction in LCOE for CSP will depend to a large extent on success in improving the current investment climate and longer-term commitments to policy support measures that can underpin deployment and learning investments,” said the Agency.

Right now, though, designing renewable energy contracts that value thermal storage is still a challenge. Now the industry is aware of how much storage is worth, the job is to convince the rest of the world.