1 ERC

Max Edkins

Climate Strategies Side Event • Bonn • 5 June 2009

Large-scale rollout of Concentrating

Solar Power in South Africa

Energy Research Centre University of Cape Town

2 ERC

South Africa’s domestic policy initiative:

large-scale rollout of CSP

• Context: South Africa‟s LTMS

50% Electricity by 2050

• What might a large-scale CSP rollout look like?

• CSP global deployment to date

• Quantifying South Africa‟s CSP rollout

• International support

• Drivers of CSP rollout

• Barriers to CSP rollout

• Intermediate indicators

3 ERC

South Africa’s LTMS

Peak

Decline

Plateau

Source: ERC 2007

4 ERC

LTMS renewables extended electricity projection

0

20

40

60

80

100

120

140

160

180

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

GW

in

sta

lle

d c

ap

aci

ty

Existing coal Mothballed coal Super critical coal FBCIGCC OCGT liquid fuels OCGT nat gas CCGTPWR nuclear PBMR Hydro Landfil l gasSolar trough Solar tower Solar PV WindBiomass Pumped storage

50% from CSP {

Source: ERC 2007

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Large-scale CSP rollout in the media

Source: Lukey 2009

6 ERC

Large-scale CSP rollout in the media

Source: Lukey 2009

7 ERC

Large-scale CSP rollout in the media

Source: Lukey 2009

8 ERC

Large-scale CSP rollout in the media

Source: Lukey 2009

9 ERC

Large-scale CSP rollout in the media

Source: Lukey 2009

10 ERC

Large-scale CSP rollout in the media

Source: Lukey 2009

11 ERC

Large-scale CSP rollout in the media

Source: Lukey 2009

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The four main CSP technologies

Parabolic Trough – Linear Fresnel – Dish Sterling Systems – Solar TowerSource: renac 2009

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Commercial Deployment globally

Source: Fluri 2009

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CSP components

Source: renac 2009

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Quantifying - what is large-scale CSP rollout?

LTMS 27% renewable energy target by 2050

- new build

Source: ERC 2008

16 ERC

Quantifying - what is large-scale CSP rollout?

LTMS 50% renewable energy target by 2050

- new build

Source: ERC 2008

17 ERC

Quantifying - CSP Costs

Source: renac 2009

= 2.4B ZAR/64 MW

= 3.75B ZAR/100 MW

= 3.9B ZAR/50 MW

= 7.8B ZAR/100 MW= 0.6B ZAR/11 MW

= 5.1B ZAR/100 MW

18 ERC

Therefore

For 27% target: at least ZAR 40 - 80 Billion per year

(3.6 - 7.3 Billion Euro)

For 50% target: ZAR 40 - 120 Billion per year till 2030

(3.6 - 10.1 Billion Euro)

& ZAR 80 - 240 Billion per year thereafter

(7.3 - 21.8 Billion Euro)

Assuming no tech learning

19 ERC

With technology learning

Cost estimates of CSP from literature (expressed in 2008 ZAR at and exchange rate of

ZAR 8 to the US $) and projected avarage electricity price in South Africa

0,00

50,00

100,00

150,00

200,00

250,00

300,00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Year

Co

st (

ZA

Rc/k

Wh

)

Sargent and Lundy, 2003

Solar Task Force, 2006

DLR, 2005

World Bank & GEF, 2006

CleanEdge & Co-op America

Foundation, 2008

Prometheus Institute &

Greentech Media, 2008

Eskom, 2008

Projected average electricity

price (high end)

Past average electricity price

Projected average electricity

price (low end)

Source: Edkins 2008

20 ERC

• Financial support most valuable (76% of survey respondents):

Venture capital for CSP start ups

Feasibility study

Research support

Grid expansion

South Africa specific R&D

• Also technical support:

South African demonstration plants

Storage technology

Industry supply base

• And policy & institutional capacity building support:

Refine REFIT

Managerial support to REPA under Single Buyer Office

DME regulation dispute

International Support

21 ERC

Drivers for CSP rollout

22 ERC

Drivers for CSP rollout

23 ERC

Drivers for CSP rollout

3.3 to 5.4 times the total electricity requirement forecast for South

Africa for the year 2025

Source: Fluri, 2009

24 ERC

Financial Driver

Renewable Energy Feed In Tariff (REFIT) in South Africa

For CSP = ZAR 2.10/kWh

(0.19 Euro/kWh)

Since March 26th 2009

Overall positively received:

70% of stakeholders surveyed thought it was “very” and

“overwhelmingly” sufficient.

25 ERC

Stakeholders on barriers to CSP rollout

45 Participants

Government, CSP

Developers, Industry, NGOs

& Research Institutes

3 discussion focus groups:

Technology, Infrastructure

& Industry support

26 ERC

Barrier highlights

• Technology

“Seeing is believing”

Need to import technology

Storage requirement in REFIT

Backup fuel

• Infrastructure

Major grid expansion - Transmission Planning Study required - funding question

Water (300 000m3/year) - dry cooling will have to be used

27 ERC

More barriers

• Industry Development – great potential

Investment risk

Wrong branding by Eskom: „test plant” should

become a “solar industry development program”

CSP components - need planning framework for

Industrial Development Zone

• Legal and Regulatory

REFIT vs DME bidding process – potential conflict

Process for PPA exists, but PPA not seen yet

EIA may pose to be an issue – especially water use

Eskom monopoly and lack of transparency

28 ERC

Intermediate IndicatorsIntermediate

progress indicator

Not at all Not

successful

Somewhat Successful Very

Successful

GHG mitigated

Electricity produced

from CSP Plants

(kWh)

CSP Plant licenses

issued

CSP Plants under

construction

Committed finance to

CSP developments

% of CSP in national

planning process

Amount of land and

water rights

committed to CSP

development

% of CSP developers

engaged in South

Africa

% of CSP developers

with offices in South

Africa

29 ERC

Conclusion

• Large-scale CSP rollout is perceived possible

• South Africa has a number of drivers for the action

including the recent REFIT

• Certain barriers need to be overcome

• Financial support seems to be the favoured international

support action, though technology and institutional

capacity building actions were also noted

• The best intermediate progress indicator is thought to

be the “amount of electricity produced from CSP plants”,

measured in kWh quarterly to annually

30 ERC

Thank you!