You are on page 1of 66

page 1

SOLAR POWER
ON DEMAND
Least Cost Opportunity
for Sun-rich Countries
page 3

Table of Contents
1. Executive Summary ....... page 4
2. DMS How it works
1 - The Linear Fresnel Collector ....... page 6
2 - The Thermal Energy Storage ....... page 7
3 - The Heat Exchanger ....... page 8
3. DMS Applications
1 - Solar Power Demand ....... page 10
2 - Seawater Desalination ....... page 12
3 - Enhanced Oil Recovery ....... page 13
4 - Energy Storage ....... page 14
4. Economical Sensitvity of DMS Applications
1 - Plant Scale ....... page 16
2 - Capacity Factor ....... page 17
3 - Project Internal Rate Return ....... page 18
4 - Solar Radiation ....... page 19
5 - Desalinated Water Price ....... page 20
5. Competitiveness
1 - DMS Compared with Conventional On-demand Power Plants ....... page 22
2 - DMS Multi-Tank as Grid-level Energy Storage ....... page 24
3 - DMS compared with Photovoltaic and Battery Storage ....... page 26
4 - DMS compared with Diesel Generator Power for Remote Supply ....... page 28
5 - DMS compared with Gas fired Steam Generation for EOR ....... page 30
6. Country Opportunities for DMS Applications
1 - China ....... page 32
2 - Oman ....... page 34
3 - Jordan ....... page 38
4 - Egypt ....... page 40
5 - Morocco ....... page 44
6 - Chile ....... page 50
7 - United States ....... page 54
7. Summary and Outlook ....... page 58
Abbreviations ....... page 60
Units ....... page 62
Appendix ....... page 62
References ....... page 64
page 4 1. Executive Summary

1. Executive Summary
FRENELL is a German technology company billion-dollar energy infrastructure projects DMS offers the potential for govern-
specializing in the manufacture and turnkey disrupting national energy plans and bud- ments to end electricity subsidies and
delivery of concentrated solar power (CSP) gets alike. remove the associated cost pressures
plants with integrated energy storage sys- from their budgets
tems. The firm works with global energy in- Is there a solution to such problems? Can DMS plants provide the opportunity
vestors and advisors to design and deliver we ease or end our reliance on volatile fossil for sun-rich countries to transition from
cost-competitive solar solutions enabling fuels as the primary source of base-load and fossil fuels to solar energy and there-
power utilities to transition from fossil fuel peak-demand electricity? And, if we can, by, for those countries with gas and oil
to solar energy in providing base load and how? What technology must we use? reserves of their own, to export these
peak power to consumers all day every day. or redirect them to export higher-value
FRENELLs engineers have been asking industrial production
This White Paper presents FRENELLs new themselves these very questions. They deve- Built primarily using coil steel and
Direct Molten Salt (DMS) technology as a loped DMS in response. It is a new techno- glass, more than 70% of DMS cons-
key enabler for this transition. It provides a logy using CSP to collect and store the suns truction inputs can usually be sourced
broad overview of DMS, its range of tech- energy to provide an affordable, stable, on- within each user country thereby buil-
nical and situational applications, and the demand supply of electricity. ding local industry and supporting the
related commercial economics. countrys balance of payments
This White Paper explains this together with
The Paper is written against a background the advantages of DMS such as: This White Paper will explain these and other
of industry concerns that dismiss CSP as advantages of the FRENELL DMS in detail.
way too costly to supply demand-matching DMS plants can deliver demand-dri- In doing so, it attempts to take the middle
electricity compared with conventional po- ven electricity for as little as 5 - 12 US/ ground by providing sufficient detail to satis-
wer plants. These concerns have resulted in kWh, already break-even with the price fy industry professionals while limiting that
continuing reliance on cheap but volatile of coal-fired power and economically detail to make it as easy as possible for tho-
renewable energy sources such as photo- competitive with gas-fired power se with a more general interest to appreciate
voltaic and wind power with conventional DMS CSP plants reach the lowest le- the technological advance DMS represents.
fossil-fuel based power plants to cover the velized electricity costs when designed
remaining supply gaps. Yet fossil fuels are for base-load power delivering their
not without their problems. nominal power capacity 24 hours a day
from spring to autumn.
New exploitation technologies in oil and All-up production costs drop by 80%
gas have stranded a number of large-scale once DMS power plants are fully de-
energy investments. Short-term hydrocarbon preciated, typically after 20 years with
supply and price volatilities have likewise a further 20 years remaining in the
raised the investment risk on future multi- plant life cycle
page 5
page 6 2. DMS How it works

2. DMS How it works


2.1 The Linear Fresnel Collector
The FRENELL DMS technology is at heart very receiver uses vacuum absorber tubes. In repair works have been successfully tested
simple. It collects, converts and stores the suns contrast to parabolic-trough collectors, [1]. Particular attention has been paid to the
energy as high-temperature heat to be converted molten salt heated to 550C is pumped unlikely but possible event of salt freezing
to steam when needed. The DMS system through FRENELLs receiver. inside the absorber tube if the circulation of
essentially consists of three main systems: molten salt was interrupted for more than
The molten salt collector system has been five hours and operators forgot to drain the
This is the first stage. Sunlight is concentrated thoroughly developed and tested over molten salt from the receiver. It has been
through FRENELLs proprietary Linear the last two years. The primary reflector demonstrated in more than 20 field tests
Fresnel collector where parallel rows of flat- technology has been successfully applied in that the frozen salt can be re-liquefied in
glass mirrors reflect direct solar radiation various commercial CSP projects since 2009. the absorber in less than ten hours without
onto a fixed-position receiver unit. Similar Critical operational aspects of DMS such as damaging any component.
to parabolic-trough systems, FRENELLs draining the molten salt from the receiver for

Absorber tube

Reflected sun rays

Primary reflector

Figure 1:
FRENELL collector
page 7

2.2 The Thermal Energy Storage


In the second stage, the molten salts Compared with a costly field-manufactured It also increases the system availability since
collecting the daytime energy yield are two-tank storage system, FRENELLs Multi- repair works at one of the units will not
stored within a proprietary Thermal Energy Tank system consists of an array of pre- require a shutdown of the entire CSP plant
Storage (TES) system. engineered and shop-manufactured tanks. as in the case of a two-tank system.

The Multi-Tank storage is an innovative The main advantage of the Multi-Tank is


evolution of the state-of-art two-tank its modularity allowing a tailored thermal
molten salt storage technology. The energy system simply by determining the
global installed capacity of molten salt amount of tanks needed to cover the
energy storage exceeds 11 GWhel with an requirements. This minimises the need for
additional 5 GWhel under construction and expensive, time consuming engineering
2 GWhel under development [2]. work.

Figure 2:
Comparison of 2 Tank with FRENELLs Multi-Tank storage
page 8 2. DMS How it works

2.3 The Heat Exchanger


In this third stage, the molten salt drives a FRENELL delivers DMS systems tailored Molten salt is a state-of-the-art energy
Salt/Water Heat Exchanger to convert the to the customers turnkey needs including storage medium already applied in
collected heat into steam. The total amount the complete tracking and power-control GWh scale.
of stored energy can be dispatched on a system. Fully-automated cleaning devices Molten salt as a heat transfer fluid has
day-ahead basis to match the customers for the primary reflectors and receiver been used in various reactors in the
steam demand curve. system, requiring very little water allow a chemical industry for more than 30
daily cleaning of the optical components years.
Those three primary components form maintaining an average cleanliness of Vacuum tube absorbers are the most
FRENELLs modular and scalable DMS more than 98% even in very dusty desert proven receiver systems in the CSP
system. Heres what it looks like visually. environments. industry having been in use for more
The conversion of heat from the molten salt than 25 years.
to steam through a single interface eases No single technical component of the
significantly the integration of DMS in FRENELLs DMS system is new. All have DMS reconfigures these proven components
various applications. been well tested and proven over time. in creating the most flexible, lowest cost,
lowest technical risk system covering the
The steam parameters of up to 550C FRENELLs primary reflector technology has whole range of steam applications.
(1,022F) and pressure levels of up to been successfully applied in commercial
200bar (2,900 Psi) cover the whole range of projects since 2009 with a total thermal
steam applications. capacity of more than 150 MW.

Figure 3:
FRENELLs DMS (Direct Molten Salt) technology

1. Solar Field
2. Thermal Energy Storage
3. Salt/Water Heat Exchanger
4. Cold Salt Pump
5. Hot Salt Pump
page 9
page 10 3. DMS Applications

3. DMS Applications
3.1 Solar Power on Demand
As a scalable source of low-cost, demand- replace their fossil fuel consumption. Multi-Tank thermal energy storage system.
matching solar technology, DMS opens the Figure 4 shows the main components of a As the solar irradiance declines in the late
door to multiple applications in countries and DMS CSP plant. afternoon, the turbine can continue to
regions across the worlds Sunbelt. It has a run at nominal load for up to 20 hours by
number of applications. These are the main The heat exchanger is designed to deliver dispatching the required thermal energy
ones. the nominal steam mass flow to meet from the storage system.
turbine needs while the solar field and the
In case new power plants are required, the Multi Tank can be tailored to the most cost Figure 5 illustrates the load curve of solar
DMS technology can be combined with efficient configuration. This configuration thermal energy collected during daytime
a state of the art, high efficiency steam is achieved by over sizing the solar field continuously increasing the level of heated
turbine power block. Because the solar field to provide 2-5 times more thermal energy salt mass in the storage system. While
uses available land very efficiently, DMS at peak times than the nominal capacity maintaining nominal turbine power load
can be installed adjacent to existing fossil of the steam turbine. The surplus daytime overnight, the level of heated salt decreases
fired power stations to reduce or completely solar energy is then stored in the integrated to its overnight minimum at sunrise.

Figure 4:
FRENELLs DMS technology with Power Generation application

1. Solar Field 6. Steam Turbine


2. Thermal Energy Storage 7. Air Cooled Condenser
3. Salt/Water Heat Exchanger 8. Feedwater Pump
4. Cold Salt Pump 9. Deaerator
5. Hot Salt Pump 10. Public Electricity Grid
page 11

PV (photovoltaic) and wind power have This is especially true for countries in North ramping to maximum load during evening
increasingly shown their capacity to and South Africa where PV and wind cannot and night time demand peak.
challenge fossil fuels as a primary energy match the daily power demand peaks in the
source. However, neither have the capability evening and at night. This enables DMS CSP plants to be the
to store the energy source nor the electricity first choice for base-load power generation
they produce, it becomes more and more In such cases, Figure 6 shows how DMS while also serving beside wind and PV
challenging to cover the remaining supply CSP plants can perfectly replace fossil back- as a complementary renewable energy
gaps. up power by throttling the turbine load to technology paving the way for a 100 %
a minimum during daytime hours before renewable electricity supply.

BASELOAD

Figure 5:
FRENELL DMS baseload power supply

0 am 6 am 12 am 6 pm 12 pm
DMS power supply Solar irradiance Storage level

DISPATCHABLE

Figure 6:
FRENELL DMS power on demand supply curve

0 am 6 am 12 am 6 pm 12 pm
DMS power supply PV power supply Typical demand of developing country
page 12 3. DMS Applications

3.2 Seawater Desalination


Many sun-drenched regions are also water Multi-effect Distillation (MED) requires applications aiming for a lowest possible
scarce. This drives many countries towards thermal energy at a temperature level below complexity.
seawater desalination. The base load 120C. This can be delivered either directly
electricity demand of reverse osmosis plants, from a DMS system or from the exhaust For mid to large scale MED desalination, the
representing the highest market share in steam of a DMS power plants turbine. cogeneration of electricity and desalinated
the seawater desalination market, can be water is likely to provide better economics.
covered by DMS CSP power. A stand-alone solar MED plant might be
the better choice in case of small-scale

Figure 7:
FRENELLs DMS with MED application

1. Solar Field 6. Steam Transformer 11. Effect #3


2. Thermal Energy Storage 7. Condensate Pump 12. Effect #n
3. Salt/Water Heat Exchanger 8. Thermo Vapor Compressor 13. Final Condenser
4. Cold Salt Pump 9. Effect #1
5. Hot Salt Pump 10. Effect #2

Figure 8:
FRENELLs DMS with CoGeneration application

1. Solar Field 7. Condensate Pump 13. Effect #1


2. Thermal Energy Storage 8. Feedwater Pump 14. Effect #2
3. Salt/Water Heat Exchanger 9. Deaerator 15. Effect #3
4. Cold Salt Pump 10. Public Electrcity Grid 16. Effect #n
5. Hot Salt Pump 11. Steam Transformer 17. Final Condenser
6. Steam Turbine 12. Thermo Vapor Compressor
page 13

3.3 Enhanced Oil Recovery


Thermal Enhanced Oil Recovery (EOR) is The process is energy intensive. It consumes The main advantage of FRENELLs DMS over
widely used to increase crude oil extraction about 20% of the energy contained in the other CSP applications in the EOR sector is
from matured oil fields. Major sun-belt total quantity of all the oil extracted to its ability to deliver of solar generated steam
regions like Oman, Kuwait, Egypt and generate the required steam for EOR alone. from storage on demand around the clock
California have long used the technology as FRENELLs DMS system can be applied here as per the oil field operator requirements.
part of their extraction approach. to replace up to 100% of the gas consumed In addition due to its higher temperature of
for EOR thereby lowering the carbon foot up to 550C DMS CSP in contrast to 300C
Currently, natural gas is used to produce print of todays oil production. The existing state of the art solar EOR technologies can
steam that is injected into a well to heat gas boilers can be maintained in idle mode be further used for power generation once
the heavy oil thereby enabling it to flow as a backup capacity for periods with oil fields are fully depleted, thus mitigating
more easily to the pump well by reducing its insufficient solar radiation to cover the the risk of stranded investments.
viscosity and surface tension. steam demand.

Figure 9:
FRENELLs DMS with EOR application

1. Solar Field 7. Water Treatment Station


2. Thermal Energy Storage 8. Feedwater Pump
3. Salt/Water Heat Exchanger 9. Injection Well
4. Cold Salt Pump 10. Production Well
5. Hot Salt Pump
6. Oil-Water Seperator
page 14

3.4 Energy Storage


FRENELLs DMS Multi-Tank energy storage thermal power station to run excess grid converted back into electrical power by
can serve as a grid-level energy storage power into high temperature thermal energy generating steam to drive the existing steam
technology. When used for this, a multi-tank using electrical heaters. Stored in the Multi- turbine when needed.
system can be placed next to an existing Tank system, this thermal energy is then

Figure 10:
FRENELLs DMS Thermal energy storage for renewables

1. Wind farm/PV plant 7. Steam Turbine


2. Electrical Heating System 8. Air Cooled Condenser
3. Thermal Energy Storage 9. Deaerator
4. Cold Salt Pump 10. Feedwater Pump
5. Hot Salt Pump 11. Public Electricity Grid
6. Salt/Water Heat Exchanger
3. DMS Applications
page 15
page 16 4. Economical Sensitivity of DMS Applications

4. Economical Sensitivity
of DMS Applications
4.1 Plant Scale
Many factors influence the Levelized Cost O&M costs as per internal FRENELL to the modular nature of DMS technology,
of Electricity (LCoE1) of DMS CSP plants. calculation the cost of solar field and thermal energy
To understand their relevance, FRENELL storage is close to linear, watering down the
has carried out a series of sensitivity Solar field and storage hours is designed for overall economy of scale effects of DMS
assessments varying only one factor at a lowest LCoE at base case conditions. CSP plants.
time while keeping all others constant using
the following base-case conditions: The accepted commercial wisdom in As a result, the LCoE ranges from
electricity generation is that the larger the 13 US/kWh at a scale of 5 MW down to
Plant location Aswan, Egypt; solar size of your generating plant the greater 6,5 US/kWh at a scale of 100 MW.
radiation 2,917 kWh/ma DNI the economies of scale. This is true for
Plant size 50 MW conventional power plants mainly because At a plant scale larger than 100 MW, the
8% unleveraged project IRR; real, net specific turbine costs decrease and thermal cost increase of the solar field header pipe
of inflation to electric conversion efficiency increases by work starts to balance further power block
Total investment as per FRENELL scaling up the plant size. economies of scale. This explains why
turnkey EPC price calculation on there is no further LCoE reduction beyond
todays DMS cost and efficiency Basis The same principle applies for the power 100 MW DMS CSP plant capacity.
including development cost block of DMS CSP plants. However, due

LCoE and plant specific costs for various plant rated power

14

12

10
LCoE (US/kWh)

0
0 50 100 150 200 250 300 350 400

Plant rated power (MW)

Figure 11:
LCoE as a function of plant rated power

1
LCOE calculation method is shown in Appendix
page 17

4.2 Capacity Factor


The capacity factor reflects the annual energy The lowest LCoE can be reached with 12-
production relative to a plant that would run 18 hours energy storage delivering capacity
at nominal power 24 hours a day for all 365 factors of 60-80%. DMS CSP plants with
days of the year. such layouts would deliver nominal power
rates 24 hours a day from spring to autumn,
Following Figure 12 shows the influence of when power demand is highest in sunbelt
storage size on LCoE for plants with different countries.
capacity factors. Higher capacity factors
require the integration of more storage hours, Importantly, the graph reveals the sweet spot
not a simple increase in the solar field, which of DMS CSP as the preferred base-load
would have to defocus if not supported by power application.
the required storage capacity. This explains
the rapid increase in the respective LCoE
curves at specific storage hours beyond their
minimal turning.

25 Storage size:

0h
20
2h
LCoE (US/kWh)

15
6h
10
12 h

5 18 h

0 24 h
0 20 40 60 80 100
Capacity factor (%)

Figure 12:
LCoE as a function of capacity factor. Each line reflects a given storage capacity at different solar field
sizes, as necessary to achieve a specific capacity factor
page 18 4. Economical Sensitivity of DMS Applications

4.3 Project Internal Rate of Return


This section of the White Paper assesses LCoE would reduce more than 20% assuming FRENELL contributes to reducing the cost
the influence of project return expectations a moderate 4% unleveraged project IRR that of investor financing through the low-risk
or the cost of capital on LCoE. Profit return are likely to attract investments especially by nature of its proprietary technology. All
targets on equity investment and also bank state-owned utilities mandated to minimize components of FRENELLs solar field and
interest rates are driven by current market electricity prices rather than maximize energy storage technologies are based
opportunities reflecting also the perception investment returns. on standard components, which are fully
of related technology and country risks of a proven. A large-scale system is simply
specific investment. In well-selected cases, DMS CSP plants more of the same. FRENELLs DMS
could deliver even higher project IRRs than CSP technology also removes the classic
The underlying base case assumption of 8% 8% when power purchase prices are aligned dependencies on volatile fossil fuels, even
unleveraged project IRR should be attracting more closely with the prices of more costly on water for cooling. This makes DMS CSP
to private investors given the current all-time competing power generation technologies running costs very predictable.
low of interest rates. Figure 13 shows that such as diesel gensets.

40%

30%

20%
Relative LCoE value

10%

0%

-10%

-20%

-30% Figure 13:


LCoE as a function of project unleveraged IRR /
-40% financing cost (base case is 8%)
2 4 6 8 10 12 14

Unleveraged project IRR [%/year]


page 19

4.4 Solar Radiation


Since direct solar radiation is what fuels CSP is Direct Normal Irradiance (DNI). Figure 14 power generation is most likely at 1700
plants, the amount any country or region shows the DNI geographical distribution. kWh/ma. While the value of FRENELLs
receives is a key driver for the resulting Energy yield and LCoE are directly linked DMS CSP plants may decline below this,
cost of DMS CSP power generation. with a regions DNI. The following Figure 15 the related DMS multi-tank energy storage
The measure used to determine this for shows their almost linear relationship. The system continues to grow in value to regions
FRENELLs concentrating solar technology DNI low-end for commercially feasible solar with a lower DNI.

Figure 14:
World map of Direct Normal Irradiance (DNI) [3]

14

12

10
LCoE [US/kWh]

2
Figure 15:
LCoE variations with various weather data files 0
that are representative for suitable CSP sites 1.500 2.000 2.500 3.000 3.500
Annual DNI [kWh/(ma)]

Simulated results Trend line


page 20 4. Economical Sensitivity of DMS Applications

4.5 Desalinated Water Price


Seawater desalination is particularly Since the total amount of desalinated water and the region of the desalination facility
important for coastal regions in Sunbelt and electricity per year is a given, the annual [4]. This means a DMS-based cogeneration
zones where water shortages are a constant revenues necessary to deliver the 8% project plant would generate electricity at a price of
and ever increasing threat. FRENELLs DMS IRR depend on the sales prices (costs) per 8 10 US/kWh, assuming an unleveraged
plants offer a key solution for desalinizing sea unit of water and electricity. The higher the project IRR of 8%. The price of water and
and brackish water. Coupled with a Multi- unit price of water, the lower need be the electricity would need to increase for higher
Effect Desalination facility using thermal price of electricity and vice versa. returns on the investment. Alternatively,
exhaust from steam turbines to supply markets allowing an increase in one may
the distillation process, DMS plants can In countries like Egypt, cost of desalinated provide room to offset prices in the other.
become significant cogeneration facilities seawater is in the range of 0.9 1.2 US$/m
producing both water and electricity. depending on the currency exchange rate

2
1,8
Levelised cost of Water [US$/m]

1,6
1,4
1.2 US$/m
1,2
Water market price range
1
0,8
0.9 US$/m
0,6
0,4
0,2
0
5 7,5 10 12,5 15 17,5
Electricity price [US/kWh]

Figure 16:
LCoE as a function of price for water (LCOW)
page 21
page 22 5. Competitiveness

5. Competitiveness
5.1 DMS Compared with
Conventional On-demand Power Plants
Since volatile PV and wind technologies Some further aspects of DMS CSP plants are Since DMS CSP plants are running
are not reliably matching the given power worthy of mention: 100% on solar energy there is no added
demand curve in sunbelt countries, there is a fuel cost in the equation. About 90%
requirement for further power plant capacity the LCoE calculations for DMS CSP of the levelized costs are caused by the
capable of producing power to cover the plants shown above take into account depreciation of the initial investment
remaining supply gaps. This is only possible the use of air cooled condensers (ACC) costs. Plant operation and maintenance
for power plant technologies with a fuel to avoid consuming water to condense including frequent replacement of spares
stock such as fossil fuelled power plants and the turbines exhaust steam. ACC is and wear components account for 10 %
CSP plants with integrated thermal energy far more expensive than water cooled of the total. As a consequence, once the
storage. condensers and also decreases turbine initial investment is fully depreciated,
cycle efficiency. However, the significant typically after 20 years, the cost of DMS
Figure 17 provides a detailed comparison cost savings of FRENELLs solar field and CSP electricity will drop below 1 US/
of levelized costs of electricity (LCoE) across thermal storage solution compensate for kWh for the remaining 20 years of the
such dispatchable power generation plants. this while still leaving DMS CSP plants plants technical life time.
Coal fired power stations are well known one of the lowest cost on-demand
for delivering the lowest cost electricity while power solutions.
having the highest carbon footprint. They DMS CSP plants at a scale of only 100
are followed by gas-fired Combined Cycle MW are fully competitive with fossil
power stations. The levelized cost of DMS power stations that reach their cost
CSP power plants ranges between 5 and minimum at a scale of 500 MW or even
12 US/kWh and is therefore seriously cost greater. DMS CSP plants thereby enable
competitive with fossil power stations. The a more distributed power system where
cause of the LCoE bandwidth of DMS CSP the generating capacities are spread
plants is explained in more details in further over a region rather than concentrated
sections of this White Paper. in a single place. This helps to reduce the
power system spare capacity in cover
shut downs of a single power station
either due to overhaul or sabotage
events. It also reduces the investment
cost of electricity transmission grids.
page 23

14

12

10
Levelized cost of electricity ($ct/kWhel)

0
Oil-fired Power Plant [1] Gas-fired Power Plant [2] Coal-fired Power Plant [3] [4]

[1],[2],[3] FRENELL internal LCOE calculations based on the following external source: [4] FRENELL LCOE:
Fraunhofer ISE - STROMGESTEHUNGSKOSTEN ERNEUERBARE ENERGIEN STUDIE NOVEMBER 2013 medium scenario:
site DNI 2300 kWh/(ma),
12% Project IRRreal / 25 a,
[1] Assumed Brent oil price [2] Assumed gas price [3] Assumed coal price 100 MWel , included:
30 to 70 $/barrel 6 to 12 $/MMBTU 50 to 100 $/t EPC, O&M, PD, land
good scenario:
site DNI 3000 kWh/(ma),
4% Project IRRreal / 25 a,
100 MWel, included:
EPC, O&M, PD, land
Figure 17:
Price competitiveness of FRENELL DMS plants versus conventional dispatchable power generation
page 24 5. Competitiveness

5.2 DMS Multi-Tank as Grid-level Energy Storage


Expansion of energy storage has been describing the ratio between the amount of are still expected to account for around 56 %
considered as one of the key measures to discharged electricity and electricity moved of future generation costs followed by AC/DC
facilitate the grid-integration of high amounts into the storage; and the lifetime of the storage converters as the next major cost.
of volatile renewable energy generation in system.
a power supply system. Hydro pump power FRENELLs thermal storage system costs 24
stations are generally the cheapest energy The table below compares Lazards view on 32 US$/kWh. This includes the cost for
storage system on a grid level. These, however, these key drivers for todays and future figures integration into an existing power station.
are not an option for sun-rich countries where of electro-chemical battery storage systems Taking into account the conversion losses of
water is scarce and its application is constrained with FRENELLs Multi-Tank storage when steam turbines, the comparable investment
by availability of land and environmental combined with an existing thermal power cost of discharged electricity from DMS
impact. To date electro-chemical batteries station. increases to 55 91 US$/kWh.
are discussed as a potential key storage
technology in the future. Battery technologies The cycle efficiency of a lithium-ion battery Add its much longer life span to the equation
have been improving driven in large measure storage system ranges from 75-85% taking and the far lower cost of FRENELLs Multi-
by a fast-growing industry developing battery into account the losses of AC/DC, reverse Tank system well and truly overtrumps
systems for electric cars. This has raised hopes conversion and battery storage losses. lithium-ion battery systems by far.
for an automotive-driven reduction in the cost
of electro-chemical batteries that may also be With the DMS Multi-Tank, close to 100% of Which brings us to the levelized cost of
economically viable for the electricity supply the charging electricity is converted to high electricity discharged from the two systems.
and distribution sector. temperature heat. The heat losses of a Multi- The comparison charted below assumes one
Tank system are about 1 Kelvin per day or only charge / discharge cycle per day at a cost of
In November 2015, Lazard published the 1%. The steam turbine efficiency of an existing 2 US/kWh for the electricity charged in the
most recent study of current and future costs power station typically ranges from 35% to respective storage systems.
for energy storage on transmission grid level 45%, dominating the overall cycle efficiency.
[5]. Three key parameters determine the cost While the cost of battery storage systems today It clearly shows that as a stand-alone product,
of electricity discharged from energy storage ranges from 500 750 US$/kWh, further FRENELLs Multi-Tank energy storage system
to transmission grid level: the investment improvements are expected to see this fall to discharges electricity at a cost of 8-10 US/kWh,
cost per kWh electricity; the cycle efficiency 300 US$/kWh. Regardless, lithium-ion batteries about 5 times cheaper than todays lithium-

BATTERY BATTERY FRENELL Table 1:


TODAY NEXT GEN. MULTI-TANK Comparison of todays and future battery
storage system and FRENELLs multitank storage
Storage efficiency regarding efficiency, costs and lifetime [5]
75-85 75 35-45
[%]
Storage costs
500-750 300 55-91
[US$/kWh]
Lifetime
5-15 5-15 25-30
[years]
page 25

ion systems and 2-3 times cheaper than high shares of intermittent renewable significant coal-fired generation
potential future cost of batteries. energies requiring back-up power capacity expected to retire soon
sources like energy storage and/or due to economic pressure from
What this all adds up to is that FRENELLs peaker plants to secure grid-reliability competition with renewable energies
Multi-Tank energy storage system is at all times and compliance with greenhouse-gas
particularly suited to markets like those in the failure of peak supply energy from reduction goals
the United States, United Kingdom, Australia renewable sources to match peak demand
and Chile that have one or more of the resulting in an offer/demand imbalance
following characteristics: leading to high electricity price variability

60

50
LCoE [US/kWh] (a)

40

30

20

10

0
Battery (b) Battery next gen. (c) (d)

Figure 18: (b) based on data from Lazards leve- (c) based on data from Lazards (d) based on FRENELL storage system,
LCoE comparison of Batteries and lized cost of energy analysis v8.0. 75% levelized cost of energy analysis v8.0. 35% to 45% charge-to-discharge
FRENELLs thermal energy storage to 85% charge-to-discharge efficiency, 75% charge-to-discharge efficiency, efficiency, 24 to 32 US$/kWhth (equi-
500 to 750 US$/kWhel installed specific 295 to 305 US$/kWhel installed specific valent to 55 to 91 US$/kWhel) installed
storage cost, 25 to 27.5 US$/kWh storage cost, 5 US$/kWhel installed specific storage cost including extra cost
(a) 60% debt financing at 8%/a and
installed specific storage O&M costs, 15 specific storage O&M costs, 15 year for system integration, 0.7 to 1 US$/
12%/a equity interest rate. 20 US$/
year lifetime. lifetime. kWhth installed specific storage O&M
MWhel electricity price for charging for
costs, 25 year lifetime.
all systems
page 26 5. Competitiveness

5.3 DMS compared with Photovoltaic


and Battery Storage
The admirable cost reduction PV has As the following pie charts show, the is added, tripling at capacity factors of more
achieved over recent years has also raised capital costs for these two technologies than 70%. This trend will not change even
hopes that PV combined with battery are markedly shaped by their respective if battery costs fall. Comparisons with other
systems might provide day and night solar energy storage systems. The DMS CSP power-on-demand technologies, as shown
power supply at competitive costs. It is an storage costs are less than 10% of the total in Chapter 5.2, demonstrate PV+battery will
important point worthy of exploration. investment whereas the battery costs for a not become a competitive base-load power
To this end, we can compare the performance PV system account for more than 50% of option.
of a 50 MW PV plant with lithium ion battery the total.
storage located in Aswan, Egypt with that of The opposite is the case with DMS CSP
a 50 MW DMS CSP plant, both designed This provides the basis for further comparing plants. While DMS CSP plants without
for a capacity factor of 80 %. To do this, we the LCoE curves of DMS CSP and storage start with a higher LCoE than PV
draw on a PV energy yield assessment using PV+battery over capacity factors as shown without battery, the DMS LCoE decreases
the public domain tool SAM from NREL, US in Figure 19. continually to its minimum of 6.5 US/kWh
Department of Energy; and make investment at a capacity factor of 60% on todays cost
cost assumptions for PV+battery based on The costs of PV are lowest around 6 US/kWh and 5.5 US/kWh at a capacity factor of
LAZARDS levelized cost of energy analysis without any battery storage. The LCoE of 70% assuming further cost reductions by
as shown in table 2 [6]. combined PV rises as more battery storage 2020.

25

20
25

15
[ US/kWh ]

20 PV + Battery (2016)

PV + Battery (2020 projection)


10
LCoE [ US/kWh LCoE

Frenell DMS (2016)


15
]

PV + Battery
Frenell (2016)projection)
DMS (2020
5 Lowest cost PV Lowest cost CSP PV + Battery (2020 projection)
10 design point design point
Frenell DMS (2016)

0 Frenell DMS (2020 projection)


5 0% 20%cost PV
Lowest 40% 60%
Lowest cost CSP 80% 100%
design point Capacity factordesign point
Figure 19:
LCoE as a function of capacity factor for the FRENELL DMS system and PV+Battery with potential cost projections 2020 at 8% project iRR.
0 The projections are based on 25% PV module price reduction, 300 $/kWh battery costs optimistic scenario
0% 20% 40% 60% 80% 100%

Capacity factor
page 27

Inverter BoP Power block


3% 1%
18%
Balance of
This means that when a DMS CSP, is designed

System
PV modules
22%
18%
for a capacity factor of 60% (15 hour storage), Balance of
it can reach similar LCoEs today as PV without System
10% Solar field
any storage. 57%

Further reductions in the cost of battery Thermal Energy


Batteries
Storage
technologies over time will not change this. 56%
15%
DMS CSP will continue to improve as the
Figure 20:
preferred solar power-on-demand technology
Investment cost breakdown for 50 MW with 80% capacity factor for DMS plant(left) and PV Plant (right)
over PV+battery.

An Excursion: Why Dollar per MW is Not System cost Value


the Right Measure to Compare PV with PV module specific costs 0.7 US$/W DC
DMS CSP 500 US$/kWh (today)
Battery storage specific costs
300 US$/kWh (next generation)
Dollar per MW installed PV capacity has become Inverters specific costs 0.1 US$/W DC
the high level indicator to compare various PV
Balance of plant specific cost 0.4 US$/W DC
technologies. This might work within the PV
sector but not as a point of comparison between Table 2:
Cost assumptions for PV+battery plant according to Lazards study and SAM software
PV and CSP with integrated energy storage.
35
The diagram in Figure 21, demonstrates the
MONTHLY GENERATED ELECTRICITY [GWH]

30
difference between a 50 MW PV plant without
battery and a 50 MW DMS plant designed for 25
a capacity factor of 80%. The 50 MW PV plant
20
would generate an annual yield of only 118
GWh compared with 350 GWh per year for the 15
50 MW DMS plant. Put in another way, DMS
10
plants of an equivalent capacity can supply
three times more energy yield than PV without 5
batteries; and they do so with only a 10%
0
increase in LCoE, as seen in Figure 21.
The graph also shows that the DMS plant can
deliver 50 MW electricity 24/7 from March to
October thereby matching 100% the most often 50 MW DMS CSP with thermal storage (80% capacity factor)
occurring power demand peaks after sun set. 50 MW PV without battery storage (27% capacity factor)

Figure 21:
Monthly Energy yields of FRENELL DMS(80 % Capacity factor) and PVs most
economic configuration
page 28 5. Competitiveness

5.4 DMS compared with Diesel Generator Power for


Remote Power Supply
Diesel power has been a favoured lacking their own oil resources to provide a costs of only 22 US per litre, the highly
technology for small-scale, off-grid power price-stable power supply. subsidized price of diesel in Egypt.
supply, in some cases even for dispatchable
grid power during periods of peak demand. FRENELLs DMS offers a clean, reliable, To provide a benchmark: The unsubsidized
Many countries, including those with high cost-competitive alternative. It already price of diesel based on a crude oil price of
solar resources, have in consequence come compares favourably at plant sizes as low 40 US$ per barrel would be approximately
to rely on diesel generators to supply a as 5 MW. From there up, the cost efficiencies 30 US per litre not taking account transport
major part of their base-load electricity. This grow along with the scale of the power plant costs of diesel to remote sites.
dependency exposes them to significant size. FRENELLs 20 MW DMS plant can, for
LCoE risk directly connected to volatile fuel instance, generate electricity for a lower
prices making it difficult for those countries price than a diesel generator assuming fuel

10,5 2,6 13,1 Capital Cost


DMS-FRENELL1

O&M Cost
8,6 1,6 10,3 Fuel Cost

7,4 1,2 8,6

0,7 1,7 6,5 8,8


Diesel Generators 2

0,7 1,7 11,6 14,0

0,7 1,7 16,2 18,5

0 2 4 6 8 10 12 14 16 18 20
Levelized Cost [US/kWh]

1 DMS-FRENELL calcluated at location with DNI 2,900 kWh/m.yr; 25 yrs lifetime and
9%/yr unleveraged IRR
2 Diesel generators calculated acc. to assumptions from 2015 Lazard Levelized Costs of
Energy Analysis 9.0
https://www.lazard.com/perspective/levelized-cost-of-energy-analysis-90/
Figure 22:
Comparison of levelized cost of electricity between diesel generators and FRENELL small-scale application[7]
page 29

The next two charts show this more clearly DMS ahead of diesel power in terms of cost Bear in mind here the direct relationship
than words alone can fully capture. The thereby making investments in DMS easier between the cost of diesel fuel and the cost
first shows the significant fall in costs as and less risky. of generating diesel power. This makes it
the size of a DMS plant increases and, easy to see where the cost of DMS power
correspondingly, the sharp rise in the cost of Now to the second chart. It follows below, sits in the scheme of things. As the list
diesel power generation as diesel prices rise. listing the diesel prices of 25 sun-rich shows, DMS has immediate commercial
The DMS plants avoid the cost volatility of countries, many heavily reliant on diesel relevance as a preferred power provider in
diesel power. Requiring no fuel other than power, with the most expensive diesel at 22 of the 25 countries listed from Egypt up.
the sun, their core cost is the initial capital. the top descending to the cheapest at the
Thereafter, their operating costs remain bottom.
negligible and predictably stable. This places

Cyprus 1,24
Mauritania 1,15
Mali 1
Madagascar 1
Chad 0,94
South Africa 0,84
Morocco 0,83
India 0,76
Namibia 0,64
Sudan 0,53
Jordan 0,51
Oman 0,43
UA Emirates 0,42
Kuwait 0,37
Egypt 0,21
Saudi Arabia 0,2
Algeria 0,18
Iran 0,1
0 0,2 0,4 0,6 0,8 1 1,2 1,4

Diesel cost [US$/liter]

Figure 23:
Overview of diesel fuel prices in various sun rich countries with the point of FRENELL competitiveness highlighted [8]
page 30 5. Competitiveness

5.5 DMS compared with Gas fired


Steam Generation for EOR
With oil production of matured oil fields When using DMS technology for EOR costs other environmental burdens to reduce CO2
requiring an increasing quantity of steam for ranging between 13-24 US$/ton of steam emissions.
EOR operations, solar steam generation is can be achieved, depending on project IRR
worthy of consideration as a cheaper option and solar radiation. Considering the before Solar EOR also offers the further advantage
than the current use of gas. mentioned translation method this would of diversifying industry in oil producing
correspond to equivalent fuel costs of gas countries and, last but not least, creates
Costs for solar generated steam can be between 3-8 US$/MMBTU. Comparing DMS CSP assets that will remain in place
directly converted into equivalent fuel costs this with historical gas prices as shown in for further electricity generation as the oil
for natural gas. For this a standard gas Figure 24, this strongly indicates that using fields are fully depleted.
boiler efficiency of 85% has been assumed. DMS CSP instead of gas is the preferring
The energy amount of the generated steam investment option in most oil fields using
gives a direct relation to the energy unit thermal EOR. The balance will likely tip
MMBTU which is commonly used for natural further in favour of solar EOR when markets
gas prices. penalize fossil fuels with carbon credits and

18
Cost equivalent of
16 solar generated
steam by using
14
FRENELL DMS
12 technology for EOR
[US$/MMBTU]

Japan cif (LNG)


10

8 Germany (AGIP)

6
UK (Heren NBP Index)
4
US Henry Hub
2

0 Canada (Alberta)
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Figure 24:
Historical natural gas prices compared to cost equivalent of solar generated steam
page 31
page 32 6. Country Opportunities for DMS Applications

6. Country Opportunities
for DMS Applications
6.1 China
China has been a global leader in economic creates long distances between power producers progress is likely to increase in speed over time.
growth for many years. Gross domestic product and consumers. A more widely distributed range
and the energy sector are closely linked. Total of small- to medium- power plants such as the The 13th Five-year National Development Plan
produced electricity is 5,500 TWh generated by FRENELL DMS would further help. drafted by the National Energy Administration
an estimated installed capacity of 1,260 GW, the (NEA) for the National Development and Reform
largest installed generation capacity in any single Chinas energy mix is currently dominated by Commission (NDRC) sets a goal to support low-
country. Despite the strong growth in electricity coal power stations [11]. These gobble up almost carbon energy solutions and proposes installation
demand, production exceeds consumption and is half of all coal consumed in the world [10]. The of a CSP capacity of more than 10 GW by 2020.
likely to continue delivering China a positive net resulting domestic power production in China The draft also proposes a feed-in-tariff (FiT) of 1
balance for its electricity market [9] with capacity increased more than 300% between 2000 and RMB (0.15 US) per kWhel [13] and suggests
expected to nearly double by 2040 [10]. 2013. the regions of Qinghai, Shanxi, Gansu and Inner
Mongolia as possible sites for locating the CSP
Various state-owned corporations and private In 2014, China was already leading the world in plants. A first CSP project with a binding FiT of
companies emerging from the State Power the money it was investing and the total capacity 1.2 RMB (0.18 US) per kWhel was approved by
Corporation manage the generation, distribution it was building in renewable power. As a result, the NDRC in 2014 for the 50 MW Delingha CSP
and consumption of Chinese electricity. To the country has increased its non-fossil energy plant operated by SUPCON [14].
increase the efficiency of power generation output from 9.4% of primary energy consumed
nationwide, the central government plans to in 2010 to 12% in 2015 [12]. The ambitious Many national research programs have been
interconnect the regional grids with ultra-high- minimum target for 2030 is set to 20% and carried out to promote CSP supply growth.
voltage transmission lines to create a single reliable predications suggest China will easily The research includes the techno-economic
national grid [11]. This should help address achieve this target. In other words, the shift to analysis of various CSP technologies to define
the challenge of Chinas geographical size that renewable energy is well underway and the FiT adjustments, a proven approach in Chinese

16

Range of
14
LCoE Combined Cycle

12
Range of
10 LCoE Coal
LCoE [US/kWh]

8 LCoE FRENELL CSP DMS


plant
6

4 Feed-in Tarif

0
Figure 25:
5 6 7 8 9 10 11 12
LCoE as a function of project IRR for a FRENELL
Unleveraged Project IRR [%/yr] 100 MW reference CSP plant
page 33

FiT programs for other renewable energy sources CSP capacity of 10 GW, more than double the electricity market but also well into the future.
such as wind and PV. current worldwide installed CSP capacity. The Figure 25 shows the levelized cost of electricity
Plan supports investments in CSP plants through such a DMS CSP plant can achieve at different
To date, 14 CSP projects with a total capacity of an assured FiT providing a solid foundation for project IRRs. At moderate IRRs of 5%, FRENELLs
1,170 MW have been short listed [15] to build a the introduction of FRENELLs DMS system to DMS technology appears to be cost competitive
capacity of 1 GW in the envisaged pilot phase. the Chinese market. DMS is perfectly suited with coal, providing Chinas with a significant
The forecast budget for these is around RMB 30 to support Chinese legislators in reaching their strategic option for its long-term energy planning.
billion (US$4.7 billion). ambitious goal in generating a clean, economic
source of renewable energy. The economics of scale are unmistakeable in
Among these, 400 MW are based on parabolic China. It is a large and growing market with
trough, 470 MW on power tower and 300 MW A techno-economic analysis by FRENELL for significant potential to further extend the
on Fresnel collector technology. a standard 100 MW DMS CSP power plant renewable energy portfolio by using DMS CSP to
The outlook for investing in the Chinese CSP with 14 hour storage and a capacity factor lower Chinas carbon footprint and dependency
market is highly positive. The 13th Five-year of 44% demonstrates its keen commercial on fossil fuel imports.
National Development Plan provides for a total competitiveness not only in Chinas current

Solar Nuclear
0,2% 2,3%
Natural gas,
Wind bio-mass
2,6% 3,8%

Hydro
16,8%

Coal
74,3%

Figure 26:
Electricity production in China by source (2013)

Technology Capacity

Linear Fresnel 300 MW

Parabolic Trough 400 MW

Power Tower 470 MW

Total 1,170 MW

Table 3: Figure 27:


Chinas projected CSP plants for the pilot phase [15] DNI map of China
page 34 6. Country Opportunities for DMS Applications

6.2 Oman
Oman is blessed with plenty of gas and oil The natural gas is produced domestically by ambitious aim of economic diversification, the
resources, also abundant solar radiation. an established exploration and extraction countrys industrial sector has grown heavily
industry. Oman exports more than a third during the past decade, consuming over the
Oil production and exports play a major role of the gas from its production as shown in same period more LNG than new gas-field
in financing Omans national budget. The Figure 29. The main sales are of liquefied developments can provide. As a consequence,
use of natural gas for thermal-enhanced natural gas (LNG) to Japan and South Korea the quantity of LNG exports slightly decreased
oil recovery since 2007 has helped to turn as major trading partners. Figure 31 also between 2010 and 2012.
around declining oil production. shows increasing domestic consumption of
Omans LNG. According to the governments

1200

1000
Thousand barrels per day

800
Production
600
Consumption
400

200

0
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Figure 28:
Oman petroleum and other liquids production, consumption and net exports [16]

1200
1200

1000
1000
Gas Usage [BCF/yr]
Gas Usage [BCF/yr]

800800 Others
Others
Industry
Industry
600600
Electricity
Electricity
Oil sector
Oil sector
400400
Exports
Exports

200200

0 0
2000
2000 2001
2001 2002
2002 2003
2003 2004
2004 2005
2005 2006
2006 2007
2007 2008
2008 2009
2009 2010
2010 2011
2011 2012
2012

Figure 29:
Usage of explored gas in Oman in different fields
page 35

Oman has successfully introduced its first Since the currently applied CSP technologies Two scenarios have been calculated. While
solar projects to substitute gas for steam do not have energy storage, their contribution the optimistic DMS case assumes a
generation in the EOR sector in order to to domestic gas consumption is limited to solar resource of 2,500 kWh/(ma) and an
reduce domestic gas consumption and daytime operation. DMS CSP offers the unleveraged internal rate of return of 4%
increase gas export volumes. The National potential to triple the contribution. (IRR), the conservative DMS case relies on
Centre of Statistics and Information notes more conservative assumptions such as DNI
that Omans oilfields currently account for Figure 31 illustrates the economic benefits of of 2,000 kWh/(ma) and 10% project IRR.
more than 20% of the countrys total gas DMS CSP in Omans EOR business. The derived levelized costs of energy from
consumption [17]. the techno-economic evaluation of the two

Figure 30:
DNI map of Oman
page 36 6. Country Opportunities for DMS Applications

scenarios can be transformed into fuel costs by 18


the use of a conventional boiler characteristic. 15,6
16

14 11,5
Furthermore, cost assumptions for selling prices 12,7
LCoE [US/kWh]

of natural gas have been made considering 12 11,0


9,3
two scenarios with high and low prices for LNG 10
sales revenues. 8,0 8,4
8
6,0
The resulting analysis shows that FRENELLs 6

DMS technology already offers a cost- 4


effective solution for EOR applications in DMS CSP at 8% project IRR
2
Oman. Given that more than 15% of the DMS CSP at 4% project IRR
natural gas consumed is used for oil fields [18], 0
0 20 40 60 80 100 120
the FRENELL DMS offers significant potential
Nominal Capacity [MW]
for generating additional profits by increasing
sales of natural gas to the LNG market. Figure 31:
Levelized costs of electricity (LCoE) for FRENELL power only application in Oman
DMS CSP could be also extended from EOR to
the power-generation sector to further reduce
domestic gas consumption. The scenarios are
Natural gas prices/ Cost equivalent of solar generated steam

based on conservative assumptions for a solar


16
resource of 2,000 kW/(ma) and vary in power 39
block size (10, 20, 50 and 100 MW) with
Levelized Cost of Steam [US$/ton]

14
35 High LNG
comparative internal rates of return (4% and price scenario
12
8% project IRR). The design of the solar field 31

has been optimized with a thermal storage of 27


10

15 full load hours to fully cover Omans day


[US$/MMBTU]

23 FRENELL DMS conservative scenario


8
and night power demand, especially in high
summer. The results of the case study are 19 6

summarized in the graph below Figure 31. Low LNG


Low LNG 4
15
price scenario
The small-scale application, including a power FRENELL DMS optimistic scenario
11 2
block size of 10 MW, provides levelized costs
of electricity of around 12 US/kWh assuming 7
Figure 32: 0
4% project IRR. Due to economies of scale, Costs of steam for FRENELL EOR application compared to saved fuel costs of natural gas by LNG sales
costs for a 100 MW power block can be
halved to 6 US/kWh by implying similar rates
of return.
page 37
page 38 6. Country Opportunities for DMS Applications

6.3 Jordan
Jordan is perfectly placed in the worlds In 2014, imported diesel and Heavy Fuel The Renewable Energy and Efficiency Law
Sunbelt to take full advantage of CSP solar Oil (HFO) provided 92% of Jordans power (REEL) of April 2012 secured the basis for
technology to power its future. Sunlight generation introducing vulnerabilities that investments in the renewable energy sector.
showers the country as a daily resource with include several disruptions from sabotage It has two powerful elements:
a DNI up to 2900 kWh/(ma). This provides to gas supplies imported via the Egyptian 1. A direct proposal regime allowing
a tremendous opportunity to end Jordans Arab gas pipeline. High import costs and private companies to negotiate renewable
almost complete reliance on costly fossil government subsidies impact adversely projects directly with the Ministry of Energy
fuel imports by switching on the nations on the countrys balance of payments and and Mineral Resources (MEMR)
economic lights using CSP power plants. seriously drag on the national budget. 2. A requirement for the National Electric
This switch offers the opportunity to end the Power Company (NEPCO) and regional
nations dependency on fuel imports. Consequently, the Jordanian Government distribution companies to purchase
plans to invest US$15 billion in renewable electricity generated by renewable energy
The total energy consumed in Jordan has and nuclear energy to boost domestic energy projects and pay for their grid connection
been dominated by a strong and continuous sources and begin stepping back from
growth in energy consumption averaging 7% reliance on fuel imports. The national energy These create a highly supportive environment
per year from 1998 to 2014. Jordan needs strategy includes plans to add CSP, PV and for operators to make significant investments
more electrical power. Installed generation hybrid renewable systems of 300600 MW in renewable generation projects of which
capacity is expected to grow from 4.3 GW in to its supply mix by 2020 [21]. FRENELLs DMS CSP systems are likely to be
2015 to 6.8 GW by 2020. [20] considered a standout contender.

Total Electrical Energy Consumption in Jordan [GWh]


Growth Rate per year of Total Electrical Energy Consumption
Average annual growth rate 1998-2014
16.000 16%
Energy Consumption Jordan [GWh]

14.000 14%
Growth Rate [%]

12.000 12%
10.000 10%
8.000 8%
6.000 6%
4.000 4%
2.000 2%
0 0%
1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Figure 33: Figure 34:


DNI map of Jordan Total consumption and annual growth rate of electricity in Jordan (1998-2014) [19]
page 39

Jordans State-owned NEPCO is responsible selling price of Jordans subsidized electricity in the National Energy Strategy and translates
for purchasing all grid-connected power. tariffs can contribute to the nations public into a growth in generation capacity of 600
NEPCOs average energy purchasing price budget and economy by ending the need for MW per year. It speaks to the growing peak-
was 137 JOD/MWh (193 US$/MWh) in 2014 any and all government subsidies. capacity demands increasingly placed on
at an average crude oil price of 90 US$/bbl Jordans electricity grid.
[22], while its subsidized average power sales While low oil prices since 2014 have eased
price was 127 US$/MWh. As a consequence, cost pressures on Jordan, the pressures Given these developments and FRENELLs
NEPCO had a deficit of US$1.7 billion in 2014. remain nonetheless. FRENELLs DMS CSP global leadership in CSP capture and storage,
This is 4.6% of Jordans GDP, a tremendous plants of 20 MWel or larger still compete it is not unreasonable to assume the Jordanian
drain on the countrys economy. with hydrocarbon power generation even Government could assign to FRENELL at
assuming a pessimistic scenario for long- least 10% of the renewable capacity it is
FRENELLs DMS systems sail past these term oil prices of 30 US$/bbl over the next committed to adding. This translates to 60
commercial benchmarks with ease. The DMS 25 years. MWel per year of power plant capacity.
base-load power plants are commercially To facilitate market entry, FRENELL is already
competitive even on a small scale of only 10 Jordans Energy Minister announced in working with the Jordanian Government and
MWel for classic IPP models. Costs come down mid 2014 that his Government expects to a Jordanian project developer to develop a 10
further with larger DMS plants offering even commission about 1,800 MW of solar and MWel power plant.
greater economies of scale. In all cases, the wind power capacity by 2018. This is far more
DMS power purchase price that is below the than the renewable growth strategy laid out

250
67
Coal Average cost of grid power
48GWh Other 200
Natural gas
1296 GWh 67 GWh
LCoE [US/kWh]

150 NEPCO's average power selling


price 2014 (subsidized)

100
12% project IRR
6% project IRR
50
3% project IRR

0
Heavy fuel oil Diesel 0 20 40 60 80 100
7690 GWh 9168 GWh
Nominal Capacity [MW]

Figure 35: Figure 36:


Electrical energy production by type of fuel in Jordan (2014) FRENELLs electricity costs over plant size for different DMS CSP project IRRs in Jordan
page 40 6. Country Opportunities for DMS Applications

6.4 Egypt
Egypts energy mix is skewed toward gas. It accounts for 46 % of the power Plan (RE Plan) setting a target for renewable
hydrocarbons with 88% of total installed generation based on the Egyptian Electrical energy to account for 20% of electricity
electricity capacity dependent on fossil Transmission Company (EETC) annual generation by 2020. This also includes a
fuels. The share of wind and solar power report. A lack of new gas field developments feed in tariff for 2 GW of photovoltaic plants.
represents only 3% of the total capacity as and increasing consumption of natural gas The Figure 40 plots Egypts power demand
of 2014, see Figure 38. has led Egypt to switch from being a net curve for a summer day when total power
exporter to become a net importer of natural demand reaches its maximum. The power
Egypt anticipates an electricity demand gas. [24] demand curve is steadily increasing from
growth of 6% per year to cover population 7 am before showing a strong peak from 6
growth and economic development [23]. In order to compensate the negative impact to 9 pm, afterwards decreasing towards the
If production capacity is to keep pace with on Egypts foreign trade balance, the early morning low point.
rising demand, it too will need to grow at Government of Egypt (GoE) has therefore
6% per year by 2022 and probably beyond. started initiatives to develop further gas An interpretation of the graph indicates that
Egypts primary energy source is natural fields and also adopted a Renewable Energy PV can help save the gas consumption of

Figure 37:
DNI map of Egypt
page 41

power stations during the day. This, however, Solar radiation levels in Egypt are very Since new gas power stations can only be
does not reduce the need for additional predictable. This provides a high level of realized when new gas supplies become
power capacity to cover the steadily certainty for electricity costs from DMS CSP available, it appears reasonable to pick
increasing peak power demand after sunset. plants. 6 US$/MMBTU for domestic gas over the
While wind velocities vary both day and next 25 years as a base case for gas CC
night, the contribution of wind power Assessing the electricity cost of natural-gas-fired power generation cost.
for matching demand peak will remain Combined Cycle plants is not so easy as applicable
stochastic. gas prices in Egypt, accounting for about 80% of Since DMS CSP would allow Egypt to reduce
total costs of gas based power generation, vary expensive LNG imports, a 10 US$/MMBTU
This explains why Egypts current energy plan from 3 US$/MMBTU for operational onshore gas could be seen as a reasonable gas price to
proposes Gigawatts of new power plants be fields to 4 - 6 US$/MMBTU for developing new determine the avoided cost of gas Combined
built to supply electricity on demand. Such gas fields. The prices reach into two-digit values Cycle power generation.
plants include gas-fired Combined Cycle for imported LNG.
plants and even coal fired power stations. The resulting cost of electricity would
DMS CSP plants also supply on demand In order to deal with price variety, Figure 41 below then be 7 US/kWh for the base case and
power. But which of these would be the shows the cost of electricity from gas Combined 10 US/kWh from an avoided cost viewpoint.
lowest cost option for Egypt? Cycle plants resulting for various gas prices. The grey band in Figure 42 below represents

75
Wind Solar
Hydro 2% 1%
Natural gas production and consumption

70
9%
65

60
[BCF/yr]

55

Consumption
50
Production

45
Thermal
(Oil & Gas) 40
88% 2013 2014e 2015f 2016f 2017f 2018f 2019f

Figure 38: Figure 39:


Egypt Energy Mix (2014) Natural gas production and consumption for Egypt (in billion m)
page 42 6. Country Opportunities for DMS Applications

the cost of conventional gas-fired base-load The high end of the rendered DMS CSP Matching the base case of gas Combined
power ranging between the gas base and electricity cost is 12 US/kWh at a scale of 10 Cycle power plant costs would provide room
high price. It also shows the LCoE curves MW assuming a total return on investment for a 12 % unleveraged project return, more
for CSP DMS plants at various sizes and of 12 % per year. DMS CSP electricity costs than high enough to attract independent
project return targets. can also get down to 4 US/kWh at a scale power producers.
of 100 MW when targeting only a 6% return
on investment per year.

25,000

20,000
Capacity MW

15,000

10,000
Base Load Peak Load

5,000

0
0 am 6 am 12 am 6 pm 12 pm
Egypt Load 2010 Egypt Load 2012
PV DMS Base Load Complementary ring Gas Turbine

Figure 40:
Egypt Load demand, Peak hours during night time

15
13,5 14
12,5 13
Levelized Cost of Electricity

Cost of Fuel [US$/MMBTU]

11,5 12
11
10,5
10
9,5 9
[US/kWh]

Imported Fuel Prices 8


8,5
7
7,5
6
6,5 5
5,5 Local Fuel Prices 4
4,5 3
2
3,5 1
2,5 0

Figure 41:
Local and imported gas prices and corresponding cost of electricity (considering all installed
generation technologies)
page 43

However things progress, the following While using the abundant solar source of A DMS CSP can also help Egypt utilize the
points make it clear that FRENELLs DMS Egypt instead of gas, power generation benefits of the Red Sea coastline. This offers
CSP plants can add significant value to costs will become more reliable. the worlds the highest direct solar radiation
Egypt: The mitigated consumption of gas for levels with abundant free space and water
power generation will improve Egypts access. Constructed as a combined power
Every Megawatt of installed DMS foreign trade balance. and desalination plant beside the Red Sea
CSP plant capacity will contribute to The use of air-cooled condensers will a deliver 50 MW base-load power plant
covering the continuously growing not further distress Egypts water could also provide 50,000 cubic meters of
power demand peak making additional supply constraints. desalinated water every day. Since Egypt
peak power obsolete. Since FRENELL will manufacture key currently depends on the Nile for nearly all
Electricity costs for DMS CSP base- components of solar field and thermal its drinking and agricultural water, DMS
load power are highly competitive with energy storage in Egypt, the market CSP MED plants offer an attractive second
fossil power plants, dropping to ~1 introduction of FRENELL would help option to address Egypts water needs.
US/kWh after full depreciation of the to create new employments in an
solar plant. emerging and sustainable sector.

12
DMS CSP at 12% project IRR
10

8 DMS CSP at 10% project IRR


LCoE [US/kWh]

6 DMS CSP at 8% project IRR

4
DMS CSP at 6% project IRR
2

Gas Combined Cycle Power Plants


0
10 20 30 40 50 60 70 80 90 100
Nominal Capacity [MW]

Figure 42:
FRENELL LCoE with different financing schemes Current cost level of DMS CSP has been assumed for the range of 10-50 MW / future DMS CSP cost
savings have been considered for 100 MW) (Unleveraged Project rate of returns) compared to gas combined power cycle costs. Reference site for DMS
CSP plant is Hurghada (2,950 kWh/ ma DNI); Storage and solar field designed for LCoE minimum (>14 h storage / capacity factors approx. 70%)
page 44 6. Country Opportunities for DMS Applications

6.5 Morocco
As a consequence of Moroccos growing generated using imported fossil fuels. In order to reduce carbon emissions and the
economy and population, the country has Figure 44 shows the accumulated power strong dependency on fossil-fuel imports,
faced a continuous growth of electricity demand curve of the days with highest Morocco has established a National Energy
demand in the recent years, which is electricity consumption in the year 2013 and Strategy aiming to increase the share of
expected to continue on short and midterm. 2014. Demand is lowest from midnight to 8 renewable energy to 42% by 2020 and even
The total installed power plant capacity is am. It climbs higher from noon to 8 pm and to 52% by 2030 while at the same time
expected to more than double from 6,400 peaks significantly from 8 pm to midnight. reducing dependency on energy imports
MW in 2011 to 14,000 MW in 2020. In 2014, coal-fired power stations and bringing the annual subsidies in the
dominated Moroccos total power supply electricity sector down to US$440 million.
Due to the lack of domestic fossil energy followed by gas-fired combined-cycle plants
resources more than 80% of the consumed and diesel generators. Wind and hydro had
electricity has to be either imported or a share of about 11%.

Figure 43:
DNI map of Morocco
page 45

To achieve these targets, Morocco has MSEP is coordinated by the Moroccan These developments have set the framework
established a regulatory framework with the Agency for Solar Energy (MASEN) for private investments in renewable energy
following elements: through big tender processes. systems such as wind, photovoltaic and CSP.
Liberalization of the electricity market Production facilities with a capacity of 400
Regulated tariffs for end customers has resulted in access to the national MW are already installed or in construction
are being progressively raised to reach grid being opened to independent on the Ouarzazate site.
production costs in order to reduce the producers of High and Medium Voltage.
annual electricity subsidies. A new regulatory authority, National The dominant share of coal, natural gas
The Moroccan Solar Energy Plan Authority for the Regulation of and diesel power generation in Morocco is
(MSEP) implemented in 2010 is aiming Electricity (ANRE), was created in 2015 reflected in the specific power generation
for 2000 MW of concentrated solar to fix the rules and clarify the roles of costs of the respective plants.
power to be installed by 2020. public actors in the market.

6
Electricity demand [GW]

5,5
5
4,5
4
3,5
27. Aug 14
3
09. Jul 13
2,5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour of the day

Figure 44:
Electricity demand profile Morocco (days with maximal power demand for 2013 and 2014)
page 46 6. Country Opportunities for DMS Applications

Coal is well known to be Moroccos cheapest tendering CSP projects including thermal and MASEN formulates another PPA with
fossil power source with an average cost energy storage to substitute for gas- and ONEE and then electricity is sold to the end
of 8 US/kWh [25] whereas Diesel power diesel-based mid- and peak-load power consumer by the regulated prices; which is
generation has the highest specific cost of supply. The three tender rounds so far have subsidized at 2 levels, shown in Figure 48.
more than 20 US/kWh. This results in the resulted in power purchase prices of 14.3 -
average cost of fossil-fuel-based power 18.7 US/kWh. Meanwhile, the latest tender round for 850
generation being around 12 US/kWh. MW of wind projects has achieved a new
Since these price levels remain above the low for the cost of wind energy, securing
How will the implementation of Moroccos average cost of power generation, the average bids of just 30 US$/MWh. While
renewable energy target affect the overall resulting cost gap is being closed with wind is a fairly constant source of energy
cost of power generation? government subsidies. Power Purchase in Morocco, however, it remains a volatile
agreements (PPA) are formulated between source that cannot be relied upon to entirely
The MASEN program so far has focused on the producer of electricity and MASEN match the demand profile.

Renewables
Power
11%
importations
18%
11%
14%
11% 28% 14%
Fuel + Gasoil 28%
7%
2011 48% 2020
48%
2011 2020 27%
27%
41% 41%
Natural
Coal 31%
Coal gas Solar
Solar 31%
17% Other fossil fuels Coal
Other fossil fuels Coal
Other fossil fuels
Coal Renewables
47% Other fossil fuels
Other renewables
Renewables Other renewables

Figure 45: Figure 46:


Moroccan energy mix (2014) Moroccan energy mix in 2011 and national energy strategy for 2020

ANRE (2015) MASEN (2010) ONEE


National Autority for the Regulation of the Moroccan Agency for Solar Energy National
National Office
Office for
for Electricity
Electricity and
and potable
potable Water
Water
Electricity market
Coordinates the Moroccan Solar Energy Plan Electricity
Electricity producer
producer
Regulates the Market, Responsible for the development of a National Solar Energy Purchases
Purchases electricity
electricity from
from private
private producers
producers and
and foreign
foreign
Set Prices to Access National Grid (VHV HV MV) Business Expertise countries through
countries through PPA
PPA (Power
(Power Purchase
Purchase Agreements)
Agreements)
Regulates comercial relations between ONEE and Nationa Chooses EPCs and supervises the work Ensures transmission and distribution
Ensures transmission and distribution
Grid users Will sell the produced power to ONE at a fixed price

Figure 47:
Moroccan Regulatory Environment
page 47

Photovoltaic is expected to arrive at a low FRENELL DMS CSP plants are able to On a larger scale of 100 MW, DMS plants
cost level of around 5 US/kWh. However, address Moroccos need for an affordable will deliver electricity price levels of 6.4
photovoltaic without battery storage cannot and reliable renewable power supply. Even on 8.5 US/kWh. Lower even than coal, this
contribute at all to meeting Moroccos a scale of 50 MW, a DMS plant with 14-hour makes DMS todays lowest cost option for
demand peak during evening and night energy storage delivers electricity prices of Morocco and the best of all replacements
hours. 9.3 12.2 US/kWh, already below todays for the countrys conventional power supply.
average cost of fossil power generation. This
As a result, the requirements for a would mitigate the need for subsidies to fund FRENELLs DMS plant provides the
dispatchable mid-load power supply will the cost-gap as applied at NOOR 1-3. technology required to advance Moroccos
increase proportionally to the expanding FRENELLs large and adaptive energy storage progress toward its 2 GW CSP target by
wind and photovoltaic share. systems would also reliably mitigate the use 2020 and to do so at price levels below
of expensive diesel generators covering the the average cost of conventional power
late-night demand peaks. generation. The larger DMS plants will

SUBSIDIES SUBSIDIES

PRODUCER PPA 1 MASEN PPA 2 ONEE REGULATED PRICE CONSUMER

PPA1 > PPA2 > REGULATED PRICES

Figure 48:
Power purchase agreement process in Morocco: Ouarzazate (500 MW) / Ain Ben Mathar (400 MW) / Boujdour (100 MW) / Tarfaya (500 MW) / Laayoune (500 MW)

OUAR ZAZATE Size Technology Storage Capacity MASEN PPA 1 TOTAL INVEST Progress

NOOR 1 160 MW Parabolic trough 3 hours 191 US$/M Whel 1,144 mio. US$ in production

NOOR 2 200 MW Parabolic trough 7 hours 142 US$/M Whel 1,870 mio. start up 2017

NOOR 3 150 MW Power Tower 8 hours 152 US$/M Whel start up 2017

Table 4:
Key facts of CSP project NOOR, Ouarzazate, Morocco
page 48 6. Country Opportunities for DMS Applications

even deliver power purchase prices below most cost-effective way currently available. firms and employment will likewise grow
the actual cost of coal-fired power stations. DMS CSP plants are consequently positioned from manufacturing the DMS solar field
perfectly to support PV and wind energy as a thermal energy storage components locally.
Midterm, FRENELLs DMS energy storage complementary renewable base as well as a The government budget and foreign trade
systems likewise provide Morocco with a mid-load energy source. balance will also benefit as subsidies are
serious opportunity to take full advantage of reduced along with energy imports in a win-
low-cost investments in PV and wind power. They also pave the way for Morocco to win outcome for everyone involved including
With these sources expected to over supply the make a 100% shift to renewable power end-consumers and the environment.
non-base/non-peak Moroccan energy market supply at substantially lower costs than
in the midterm, storing excess PV and wind todays conventional power generation.
energy is likely to become a priority in the not- The cost advantages of DMS over coal-
too-distant future. The DMS storage systems fired power stations alone make it a sound
provide the perfect technology to do this in the investment for commercial operators. Local

20

18
17,1
16
14,1
14
13,2 12,2
LcoE / Benchmark [US/kWh]

12
10,8
10 9,3
8,5
8
6,4
6
NOOR II power purchase price
4
cost of coal fired power generation
2 DMS plant LCOE at 12% project IRR
DMS plant LCOE at 8% project IRR
0
10 20 30 40 50 60 70 80 90 100

Nominal capacity [MW]

Figure 49:
FRENELL DMS performances for Morocco
page 49
page 50 6. Country Opportunities for DMS Applications

6.6 Chile
Northern Chile is well placed to take dams in the south although with increasing
advantage of FRENELLs DMS solar supply shortages due to longer periods of
technology. It is a sun-blessed country with dry weather. Together with Hydro power,
the Worlds highest solar resource of up to expensive imported fuels liquefied natural
over 3500 kWh/(ma) (DNI). gas (LNG), coal and diesel make up the bulk
of the remaining generation supply.
Chile is leading Latin America in
competitiveness, income per capita, In view of the challenges presented by
globalization, economic freedom and low hydros increasing unreliability and the high
perceptions of corruption all healthy costs and vulnerabilities associated with
signs for a prosperous economy with high imported fuels, Chile has taken significant
attractiveness for international investments. steps to expand its renewable portfolio
Six regional electricity grids (currently not beyond hydro. It has done this by setting a
interconnected) supply electricity to grid- Renewable Portfolio Standard (RPS) for non-
connected customers. Chiles North is hydro renewables. Starting at 5% in 2010,
covered by the SING and SIC grids. These the standard has been gradually raising. The
account for over 99% of Chiles capacity. 2025 standard is currently 20%, which could
rise as awareness and the competiveness of
Chiles copper mining industry drives a wind and solar technologies grow. Giving
constantly growing demand for base-load teeth to its RPS standards, the government
electricity. Chile has been installing 600 has introduced significant penalties for
MW/a of power-plant capacity over the operators who fail to achieve the RPS
past 15 years rising to 1000 MW per year targets 30 US$/MWh for the first violation
over the past five years. The strong capacity and 45 US$/MWh for the second.
growth is expected to continue as new
copper mines will require more energy per Chiles liberalized power market has been
unit of exploited metal. regulated for the past three decades. Once
a year, the National Energy Commission
Chile has four major fuel sources for its (CNE) tenders electric energy through long-
electrical generation. Hydro is the largest, term (20 years) supply agreements sub-
supplying a third of the total supply from structured in time-of-day energy blocks.

Figure 50:
Map of Chiles available solar energy (Direct
Normal Irradiance) shows its peaks in Chiles
North [3]
page 51

Nominal power has to be delivered within Block B (8:00-17:59): 7.9 US/kWh (550 GWh) daytime hours when the grids capacity has
each time block. As a consequence, weather- Block C (18:00-22:59): 9.7 US/kWh (280 GWh) reached its limits and, hence, cannot accept
dependent power production from PV and the entire available PV power. This has
wind plants needs to be filled up through Beyond the regulated tender for long- placed several planned and already realized
power trading. term PPAs, power can be traded bilaterally PV investments in severe trouble.
between IPPs and other market participants,
In the last tender round (2015), 100% of the such as electricity traders, utilities and off- At an annual direct normal irradiation of
energy was contracted to producers of wind takers. 3,350 kWh/m - which is extremely high
and solar power even though there was no in the global context but only average
specific prescription for renewable energies, Beyond such long-term power purchase for Chiles North - a 100 MWel FRENELL
a solid indication of the competitiveness of contracts, a spot market organises the DMS power plant produces electricity at a
renewables. The threshold PPA electricity short notice power trade. Recent capacity levelized cost as low as 5.2 US/kWh. With
prices for the three time blocks were: additions of PV plants in Chiles sunny North capacity factors of 8285%, the FRENELL
has led to the phenomenon that spot market DMS plants offer the cheapest source of
Block A (23:00-7:59): 9.7 US/kWh (370 GWh) prices regularly drop to 0 US/kWh during base-load power to Northern Chile. They

Peak Demand SIC Grid (Central&Northern Chile) [MW]

Peak Demand SING (Chile's Northern grid) [MW]

Annual Capacity Additions (SIC+SING) [MW/a] Solar


Wind 545 MW
Coal
8.000 2.000 Hydro 905 MW 3.554 MW
Annual Capacity Addition [MW/a]

6.452 MW
Peak Demand [MW]

6.000 1.500

4.000 1.000

2.000 500

Natural gas
0 0 3.216 MW
1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Biomass Diesel
462 MW 3.461 MW
Other fossil
942 MW

Peak Demand SIC Grid (Central&Northern Chile) [MW]

Peak Demand SING (Chile's Northern grid) [MW]

Annual Capacity Additions (SIC+SING) [MW/a]

8.000 2.000
Figure 51: Figure 52:
apacity Addition [MW/a]

Growth of Chiles peak demand and annual plant capacity additions [26] Power generation capacity in Chiles main grids (SIC and SING) [26]
eak Demand [MW]

6.000 1.500

4.000 1.000
page 52 6. Country Opportunities for DMS Applications

are particularly well suited to supply Chiles FRENELLs multi-tank energy storage is other CSP technologies
mining industry. also increasingly important to northern both PV and wind alternatives because
Chile, particularly so with copper mines DMS supplies power on demand
Here is a simple comparison. Take a modest- demanding base-load power and day-time thereby removing the PV and wind
sized FRENELL DMS generating 30 MWel PV output falling out of favour. power trading risk
with a capacity factor of 82%. This can With its cost-efficient DMS solar and LNG-powered Combined Cycle plants.
generate electricity more cheaply than the storage technologies, FRENELL can
latest PPA price (11 US/kWh) awarded to contribute to Chiles transition from fossil to
a much larger (640 MWel) Combined Cycle renewable energies. DMS provides power
power plant fired with natural gas with a on demand at highly competitive prices that
capacity factor of 68%. [27] are cheaper than

12

10

8
LCoE [US/kWhe]

30 40 50 60 70 80 90 100

Nominal electrical Power [MW]


DMS CSP at IRR 12%/year

DMS CSP at IRR 8%/year

PPA electricity price of 640 MW Combined Cycle

Figure 53:
Levelized cost of electricity of FRENELL DMS plants in Northern Chile
page 53
page 54 6. Country Opportunities for DMS Applications

6.7 United States


With a high annual Direct Normal Irradiance Presently, PV generation is one of the fastest hours to meet evening peak demand. This
(DNI) of up to 3,000 kWh/m, the southwestern growing areas of renewable energy in the condition is most likely to occur on spring
states of the United States California, US with 20 GW annual addition of PV days with mild temperatures and high
Arizona, Nevada and New Mexico are well capacity projected by 2020 [28]. Especially solar irradiation. Meanwhile, PV and wind
suited for Concentrated Solar Power. for California, the growth of variable PV- are already causing over-generation and
generation will produce a duck-shaped curve curtailment problems today that are likely to
Southwest US is a wholesale electricity of net load (system load after subtracting further increase over coming years [30].
market. Utilities typically own the generation, wind and PV) [29]. This is anticipated to
transmission and distribution systems that result in surplus power plant capacity in FRENELL DMS plants can play a vital role
serve electricity consumers. Independent idle mode during peak PV output with here. They offer the ideal complement to PV
System Operators (ISOs) operate the grid the corresponding need for fast-ramping generation, as shown in Figure 55. During
transmission system independently of and power generation as PV output drops in the day, a FRENELL DMS plant can run at
foster competition for electricity generation the evening. Estimates indicate a ramping reduced or minimum load while charging
among wholesale market participants. capacity of 13 GW will be needed over three its integrated storage system. When PV

Figure 54:
DNI map of United States
page 55

generation diminishes in the evening, it can Californias policy framework include: Government policy aside, the straight
then ramp up power generation to full load to commercial advantages of FRENELLs DMS
meet the evening peak thereby shifting output Renewable Portfolio Standards to procure are compelling by themselves. Compared
to periods that are also peak price. The ramp- up to 50% of electricity from renewables with 2015 electricity cost estimates by the
up rate is constrained only by steam turbine by 2050 California Energy Commission (CEC) [31], the
capacity, not by the DMS CSP system having A mandate to add 1.3 GW of energy FRENELL DMS is the cheapest dispatchable
the solar energy yield charged in the multi-tank storage by 2020 energy technology at sun-rich locations in
system ready to be dispatched. A Federal Solar Investment Tax Credit of southwestern US, as shown in Figure 56.
30% till 2019 Even at a relatively small-scale, a FRENELL
The US has a supportive regulatory environment the development of grid policies to DMS plant of 30 MWel capacity already
for renewable energy. California in particular assist the integration of a high share of delivers cheaper electricity than other CSP
has a policy framework that supports the renewables ultimately favouring CSP technologies at larger scale and is comfortably
adoption of Concentrated Solar Power with with storage to offset non-demand- cost competitive with far larger Combined
integrated energy storage. Key elements of driven growth of PV generation Cycle power plants fired by natural gas.

100%

80%

60%

40%

20%

0%
0 am 6 am 12 am 6 pm 12 pm
DNI Duck Curve - Net Load in California DMS power supply

Figure 55:
Typical load profile predicted for California with high share of PV generation for a spring day
page 56 6. Country Opportunities for DMS Applications

FRENELL also has a clear competitive The Multi-Tank storage technology is Additional storage resource capacity will
advantage in another area of critical particularly suited to the US market for the be needed for US grid reliability with a
strategic importance to the US power following reasons: high share of renewable energy, which
industry cost-effective energy storage. is why annual US storage capacity is
By combining FRENELLs thermal energy The US Energy Information Administration projected to grow more than 1 GW each
storage technology with an existing steam (EIA) expects 40 GW of coal-fired year by 2020.
power cycle, excess power from the grid generating capacity will be retired by
can be stored and dispatched flexibly and 2025 [32] due to low prices for natural Therefore, FRENELLs DMS Multi-
cheaply. The storage is charged during times gas, competition from renewables and Tank storage technology is able to add
of low or even negative electricity prices, compliance with emission standards. The significant value to the US electricity grid
i.e. when wind and PV are already being steam power cycles of these plants can by providing cheap energy storage. At
curtailed from power supply to the grid. be retrofitted with FRENELLs Multi-Tank the most fundamental commercial level,
storage and participate in the market as it is significantly cheaper than the most
flexible backup power resources. ambitious cost goals optimistically set for
future battery technologies.

capacity factor Figure 56:


PPA Crescent Dunes Levelized cost of electricity for FRENELL DMS,
58% 13,5
Tower 110 MW [a] Combined Cycle and other CSP technologies in
Southwest USA
CEC: Parabolic trough
59% 12,7
250 MW [b]

CEC: Tower 100 MW [c] 57% 11,4

CEC: Natural Gas


Combined Cycle 56% 11,6
550 MW [d]

30 MW [e] 43% 10,7

100 MW [e] 52% 8,3

0 2 4 6 8 10 12 14 16
LCoE [US/kWh]

[a] PPA of Crescent Dunes tower project in Tonopah, NV, 110 MW with 10 h storage; subsidized with Investment Tax Credit and Loanguarantee
[b] 250 MW parabolic trough plant with 6 h storage; 7% WACC; cost assumptions from California Energy Comission (CEC) study
[c] 100 MW tower plant with 11 h storage; 7% WACC; cost assumptions from CEC study
[d] 550 MW CC plant with taxes; 6.2% WACC; $4.5/MMBTU fuel price and 4.1% annual fuel price escalation; cost assumptions from CEC study
[e] FRENELL plants with 16 h storage; 7% WACC; costs for grid connection, project development, licensing and financing from CEC study
page 57
page 58 7. Summary and Outlook

7. Summary and Outlook


Solar power is coming of age. It has at last Commercially, it has made good sense give them their day as a complete energy
moved from being a peripheral add-on to any to start with the lowest cost options and package. Just not yet. Battery costs still
grid-level power investments to become a stick with them until they reach the point remain too high to be applied as energy
mainstream choice worthy of the most serious of market saturation, which they are storage on transmission grid level, although
consideration. 2015 marked the first year close to doing, in some regions such as lithium-ion batteries could provide a return
when more money was invested in renewable the southwest of the United States. The in retail markets where high electricity prices
energy than conventional fossil-fuelled commercial downside of such investments are charged to end-consumers.
electrical power, a transformative trend likely since it also leads to a significant increase in
to continue and probably accelerate. the cost of of dispatchable power required In consequence, the search for cost-effective
to cover the remaining supply gaps. grid level energy storage has become and
The early introduction of photovoltaic and remains central to planning the future
wind power opened the door to and set This in no way diminishes the importance energy needs of the world. It is here that
the pace for the increasing adoption of and of PV and wind power. They continue to FRENELLs DMS CSP technology with
ultimate full transition to renewable power be highly relevant. They also continue energy storage comes to the fore. It offers
generation. PV and wind have become the to demand a commercially competitive the technological leap the industry has
cheapest sources of electricity while also energy storage response to take full and been looking and waiting for. DMS solar
paving the way to reduce the worlds carbon best advantage of their contributions. power plants provide the lowest-cost option
footprint of power generation. Developments in battery storage may yet for base- to mid-load power that balances
page 59

supply gaps between volatile renewable The FRENELL DMS is adaptive to an burdens they carry in subsidising the high
sources and the power demand curve. No investors commercial needs and priorities. costs of conventional power generation.
one should underestimate the importance It is designed to meet the full requirements
of this. of any small to medium commercial power FRENELL is a global pioneer in solar power
provider. It is dispersive so can be widely engineering. It is committed to delivering
DMS is a significant breakthrough as distributed to meet varying regional needs. renewable energy solutions giving the
renewable energy can now deliver the entire It is flexible as either a free-standing facility highest value to investors for the lowest
spectrum of power requirements more or combined with others as a co-generator. cost. While the preferred energy mix in
cheaply than fossil fuels in regions where Above all, it is highly cost competitive with any region will depend on a multitude of
rich loads of solar energy soak the earth. In conventional power generation. factors, its DMS makes solar the standout
doing so, it provides the tool for leaping over choice for investors looking to optimise their
fossil power generation to make a transition These should be reasons enough for any renewable energy investment portfolio.
to 100% renewable power supply. Whats investor to give FRENELLs DMS serious
more, the DMS energy storage technology consideration when examining options for
even provides countries beyond the sunbelt any new or extending any existing power
with todays lowest-cost option for grid- facilities. Governments of sun rich emerging
level energy storage and re-transmission. countries also have much to gain as DMS
provides escape from the heavy financial
page 60 Abbreviations

Abbreviations
ACC Air cooled condenser

ANRE National Authority for the Regulation of Electricity


(Morocco)
BOO Build-Own-Operate Ownership of a project remains usually with the project com-pany, which
gets the benefits of any residual value of the pro-ject.
BOT Build-Operate-Transfer Form of project financing, wherein a private entity receives a concession
from the private or public sector to finance, de-sign, construct, and operate a
facility stated in the concession contract
CC Combined cycle A CC power plant uses both a gas and a steam turbine together to produce
up to 50 percent more electricity from the same fuel than a traditional
simple-cycle plant. The waste heat from the gas turbine is routed to the
nearby steam turbine, which gener-ates extra power.
CEC California Energy Commission

CHP Combined Heat and Power Power station which generates electricity and process heat at the same time

CNE Comisin Nacional de Energa National Energy Commission of Chile

CO2 Carbon dioxide Gaseous emission produced by burning fossil fuels

CoGen Cogeneration of power and desalinated water see CHP

CSP Concentrated Solar Power Generation of solar power by using mirrors or lenses to concen-trate a large
area of sunlight onto a small area
DMS Direct Molten Salt. Registered Trade Mark by FRENELL. Describing a CSP technolo-gy using
molten salts as heat transfer fluid inside the solar field as well as storage
medium.
DNI Direct Normal Irradiance The amount of solar radiation received per unit area by a sur-face that is
always held perpendicular (or normal) to the rays that come in a straight line
from the direction of the sun at its current position in the sky
DoE Department of Energy, USA

EETC Egyptian Electrical Transmission Company

EIA U.S. Energy Information Admin-istration

EOR Enhanced Oil Recovery Thermal process for increasing the amount of crude oil that can be extracted
from an oil field
EPC Engineering, Procurement and Construction Project development with the goal to deliver technical systems turnkey to a
Services customer
EY Ernst&Young Multinational professional services firm headquartered in London, United
Kingdom
FIT Feed-In-Tariff Policy mechanism designed to accelerate investment in renewable energy
technologies
GDP Gross Domestic Product Monetary measure of the value of all final goods and services produced in a
period (quarterly or yearly)
GoE Government of Egypt

HFO Heavy fuel oil Fraction obtained from petroleum distillation, either as a dis-tillate or a
residue
HV High Voltage

IPP Independent Power Producer Entity, which is not a public utility, but which owns facilities to generate
electric power for sale to utilities and end users
IRR Internal Rate of Return Method of calculating rate of return which makes the net pre-sent value of
all cash flows (both positive and negative) from a particular investment equal
to zero
LCoE Levelized Cost of Electricity generation Economic assessment of the average total cost to build and operate a power-
generating asset over its lifetime divided by the total energy output of the
asset over that lifetime
page 61

LCoS Levelized Cost of Steam Economic assessment of the average total cost to build and operate a steam-
generating asset over its lifetime divided by the total steam output of the
asset over that lifetime
LCoT Levelized Cost of Thermal ener-gy generation Economic assessment of the average total cost to build and operate a
thermal energy generating asset over its lifetime di-vided by the total thermal
output of the asset over that lifetime
LCoW Levelized Cost of desalinated Water generation Economic assessment of the average total cost to build and operate a desa-
lination plant over its lifetime divided by the total water output of the asset
over that lifetime
LFR Linear Fresnel CSP collector technology which uses long segments of mirrors to focus sun-
light onto a fixed absorber tube located at a com-mon focal line
LNG Liquefied Natural Gas

MASEN Moroccan Agency for Solar En-ergy

MED Multiple-effect Distillation Distillation process used for sea water desalination

MEMR Ministry of Energy and Mineral Resources (Jordan)

MSEP Moroccan Solar Energy Plan

MV Middle voltage

NDRC National Development and Re-form Commission


(China)
NEA National energy Administration (China)

NEPCO National Electric Power Compa-ny (Jordan)

NOOR Solar power plant in Ouarzazate, Morocco Three-stage project with total power output 2.000 MW in 2020

NREA New and Renewable Energy Authority (Egypt)

NREL National Renewable Energy Laboratory (USA)

O&M Operation and Maintenance

ONEE National Office for Electricity and potable Water


(Morocco)
PBT Parabolic Trough CSP collector technology which uses long segments of bended mirrors to
focus sunlight onto a tracked absorber tube
PPA Power Purchase Agreement Contract for the purchase of electrical energy

PT Power Tower CSP technology which produces solar heat by focusing sun light with multiple
heliostats at an absorber located at top of a cen-tral tower
PV Photovoltaic Technology of converting solar energy into direct current elec-tricity using
semiconducting materials that exhibit the photovol-taic effect
RPS Renewable Portfolio Standard Regulation that requires the increased production of energy from renewable
energy sources
SAM System Advisor Model Performance and financial model designed by NREL to facilitate decision
making for people involved in the renewable energy industry
SF Solar Field

SIC Sistema Interconectado Central Chile's central region's grid, which accounts for 68.5% of national generati-
on and serves 93% of Chile's population
SING Sistema Interconectado del Norte Grande Northern grid of Chile, which accounts for about 19% of national generation

TES Thermal Energy Storage

WACC Weighted Average Cost of Capi-tal the rate that a company is expected to pay on average to all its security
holders to finance its assets
page 62

Units
a Year
bbl Barrel 1 BBL (U.S.) = 0,158 987 3 m
d Day
GW Gigawatt 1 Billion Watt (109 W)
GWh Gigawatt-hour 1 Billion Watt hours (109Wh)
h Hour
JOD Jordan dinar
km Kilometer
kWh Kilowatt-hour 1 Thousand Watt hours (10 Wh)
kWhel Kilowatt-hour electric 1 Thousand Watt hours (10 Wh) of electric energy
m Square meter
m Cubic meter
MMB-TU Million British Thermal Units 1 MMBTU 293,071 kWh
MW Megawatt 1 Million Watt (106 W)
MWel Megawatt electric 1 Million Watt (106 W) of electric energy
MWhel Megawatt-hour electric 1 Million Watt hours (106 Wh) of electric energy
MWth Megawatt thermal 1 Million Watt (106 W) of thermal energy
RMB Chinese Yuan
TWh Terawatt-hour 1 Trillion Watt hours (1012 Wh)
USD US Dollar
yr Year

Appendix
Levelized cost of electricity (LCoE)
By definition, the levelized cost of electricity (LCoE) is the price of electricity (p) resulting in a NPV of 0, thus:

In the same way, by definition, the project internal rate of return (IRR) ist the value (d) resulting in a NPV of 0.

The net present value (NPV) is defined as the difference between the total life cycle revenues and the total life cycle cost of a project. For a power generation
project with an initial investment I at year 0, annual constant O&M costs O, annual constant energy yield E and annual constant electricity selling price p all
between year 1 and n the net present value is:

With:

NPV the net present value in


E the energy yield in MWhel
p the electricity selling price in /MWhel
0 the annual O&M costs in /a
the actualization factor

The following assumptions have been made for calculating LCoE values presented in this White Paper:
Total investment in year 0
Annual energy yield and O&M costs constant over the time period (similar to assuming no increase in O&M over time and no performance degradation)
Annual energy yield and O&M costs accounted from year 1 to n (similar to assuming a 1 year construction time)
Units/Appendix
page 63
page 64 References

References
[1] Morin G, Karl M, Mertins M, Selig M, Molten salt as a heat transfer fluid in a linear Fresnel collector - commercial application backed by
demonstration. International Conference on Concentrating Solar Power and Chemical Energy Systems, SolarPACES 2014, Beijing, China.
[2] DOE Global Energy Storage Database, http://www.energystorageexchange.org/projects, date of last website visit April 19th, 2016.

[3] SolarGIS, Free Download of Solar Radiation Maps, http://solargis.info/doc/free-solar-radiation-maps-DNI, date of last website visit April
19th, 2016.
[4] Detrie M, Desalinated water could help quench a thirsty Egypt. Available online: http://www.egyptindependent.com/news/desalinated-
water-could-help-quench-thirsty-egypt, date of last website visit: 10 March 2016..
[5] Lazard, Levelized Cost of Storage Analysis Version 1.0, November 2015, available online: https://www.lazard.com/media/2391/lazards-
levelized-cost-of-storage-analysis-10.pdf, date of last website visit: 20th March 2016..
[6] Lazard, Levelized Cost of Energy Analysis Version 8.0, September 2014, available online: https://www.lazard.com/media/1777/levelized_
cost_of_energy_-_version_80.pdf, date of last website visit: 20th March 2016..
[7] 2015 Lazard Levelized Costs of Energy Analysis 9.0, https://www.lazard.com/perspective/levelized-cost-of-energy-analysis-90/, date of last
website visit April 27th, 2016.
[8] GlobalPetroPrices.com, http://www.globalpetrolprices.com/diesel_prices/, date of last website visit April 25th, 2016.

[9] Electricity production, consumption, imports and exports - by country, Macro Economy Meter (MecoMeter) online: http://mecometer.com/
topic/electricity-production-consumption-imports-and-exports, date of last visit: 20th April 2016.
[10] China country analysis, U.S. Energy Information Administration (eia), online: https://www.eia.gov/beta/international/analysis.cfm?iso=CHN ;
date of last visit: 20th April 2016.
[11] Electricty sector in China, Wikipedia, online: https://en.wikipedia.org/wiki/Electricity_sector_in_China#cite_note-12, date of last visit: 20th
April 2016.
[12] Expert Blog March 13 2016 by Alvin Lin How China's 13th Five Year Plan Climate and Energy Targets Accelerate its Transition to Clean
Energy, Natural Resources Defense Council 2016 (NRDC), online: https://www.nrdc.org/experts/alvin-lin/how-chinas-13th-fi.
[13] Article December 29 2015 by crystal Guo China will target CSP Capacity of 10GW in the 13th Five-year Plan (2016-2020), CSP Plaza,
online: http://en.cspplaza.com/china-will-target-csp-capacity-of-10gw-in-the-13th-plan-of-five-year-national-development-20.
[14] Solar Thermal Electricity Global Outlook 2016, Greenpeace International, European Solar Thermal Electricity Association (Estela), online
http://www.greenpeace.org/international/Global/international/publications/climate/2016/Solar-Thermal-Electricity-Globa.
[15] Article Who will win China 1GW CSP pilot projects?, online http://www.szwgroup.com/csp/EB/11.10, date of last visit: 20th April 2016.

[16] U.S. Energy Information Administration (EIA), Oman petroleum and other liquids production, consumption and net exports, 1996-2015.

[17] Ernst & Young LLP (EY) study Solar enhanced oil recovery, online: http://www.ey.com/Publication/vwLUAssets/EY-Solar-enhanced-oil-
recovery-in-Oman-January-2014/$FILE/EY-Solar-enhanced-oil-recovery-in-Oman-January-2014.pdf; date of last visit: 21st April.
[18] Sultana of Roman Renewables Readiness Assessment, International Renewable Energy Agency (IRENA) Nov. 2014, online: http://www.
irena.org/DocumentDownloads/Publications/IRENA_RRA_Oman_2014_LR.pdf; date of last visit: 25th April 2016.
[19] The Hashemite Kingdom of Jordan, NEPCO, http://www.nepco.com.jo/store/docs/web/2003_en.pdf, date of last website visit April 27th,
2016.
[20] Developing renewable energy projects A guide to achieving success in the Middle East (by Eversheds and PWC), Jan. 2016, www.evers-
heds.com/energy and www.pwc.com/me, date of last visit 20th April 2016.
[21] Solar GCC Alliance, available online: http://www.solargcc.com/jordan-solar/, date of last website visit: 15th March 2016..

[22] Annual Report NEPCO 2014, http://www.nepco.com.jo/store/docs/web/2014_en.pdf, date of last visit 20th April 2016.

[23] Minister of Electricity & Renewable Energy Dr. Mohamed Shaker El-Markabi, Addressing Egypts Electricity Vision", http://www.moee.gov.
eg/english_new/Presentations/EEDC.pdf, 13th-15th March 2015.
[24] CHECKMATE: ENI SHAKES UP THE MEDITERRANEAN STATUS QUO, http://www.egyptoil-gas.com/publications/checkmate-eni-shakes-up-
the-mediterranean-status-quo/, October 2015.
[25] New low for wind energy costs: Morocco tender averages $US30/MWh, http://reneweconomy.com.au/2016/new-low-for-wind-energy-
costs-morocco-tender-averages-us30mwh-81108, date of last visit 20th April 2016.
[26] National Energy Commission, http://www.cne.cl/en/estadisticas/electricidad/, date of last visit: 4th April 2016.

[27] BioBioGeneras El Campesino 640 MW Combined Cycle plant won bid to sell 3,800 GWh/year under a PPA at 111 $/MWh; Source: http://
www.bnamericas.com/news/electricpower/chile-power-auction-best-news-in-10-years?, date of last website visit 15th April 2016.
[28] IMPACTS OF SOLAR INVESTMENT TAX CREDIT EXTENSION, Solar Energy Industries Association, online: http://www.seia.org/research-
resources/impacts-solar-investment-tax-credit-extension, date of last visit: 19th April 2016.
[29] Overgeneration from Solar Energy in California: A Field Guide to the Duck Chart, National Renewable Energy Laboratory, November 2015,
online: www.nrel.gov/docs/fy16osti/65023.pdf, date of last visit: 19th April 2016.
page 65

[30] Beyond 33% Renewables: Grid Integration Policy for a Low-Carbon Future, A CPUC Staff White Paper, 11/25/2015, online: http://www.
cpuc.ca.gov/uploadedFiles/CPUC_Website/Content/Utilities_and_Industries/Energy/Reports_and_White_Papers/Beyond33PercentRene-
wab.
[31] California Energy Commission, final staff report, ESTIMATED COST OF NEW RENEWABLE AND FOSSIL GENERATION IN CALIFORNIA,
March 2015, available at: http://www.energy.ca.gov/2014publications/CEC-200-2014-003/CEC-200-2014-003-SF.pdf (date of last website
visit.
[32] Energy Information Administration: Annual Energy Outlook 2015, April 2015, available online: http://www.eia.gov/forecasts/aeo/
pdf/0383%282015%29.pdf, date of last website visit: 26th March 2016.
[33] BP toolsEnergy charting tool, http://tools.bp.com/energy-charting-tool.aspx#/ep/natural_gas_prices/unit2/$-mBtu/view/line/, date of last
website visit April 27th, 2016.
[34] Article January 19 2016 by Joshua S. Hill, China Electricity Demand Slows, Coal Consumption Drops, Hits Australia Hard, Clean Technica,
online: http://cleantechnica.com/2016/01/19/china-electricity-demand-slows-coal-consumption-drops-hits-australia-hard;.
[35] Article November 11, 2015 by Zachary Davies Boren Chinas coal bubble: 155 coal-fired power plants in the pipeline despite overcapaci-
ty, Energy Desk Greenpeace, online: http://energydesk.greenpeace.org/2015/11/11/chinas-coal-bubble-155-new-overcapacity/.
[36] Projected Costs of Generating Electricty, International Energy Agency (iea), Nuclear Energy Agency, 2015 Edition, online: https://www.iea.
org/Textbase/npsum/ElecCost2015SUM.pdf, date of last visit: 20th April 2016.
[37] Renewables 2015 Global Status Report, Renewable Energy Policy Network for the 21st Century (REN21), online: http://www.ren21.net/
wp-content/uploads/2015/07/REN12-GSR2015_Onlinebook_low1.pdf, date of last visit: 20th April 2016.
[38] FRAUNHOFER INSTITUT FOR SOLAR ENERGY SYSTEMS ISE, Levelized cost of electricity study, https://www.ise.fraunhofer.de/en/publica-
tions/veroeffentlichungen-pdf-dateien-en/studien-und-konzeptpapiere/study-levelized-cost-of-electricity-renewable-energies.pdf, Nov 2013.
[39] Oman country analysis, U.S. Energy Information Administration (eia), online: http://www.eia.gov/beta/international/analysis.cfm?iso=OMN;
date of last visit: 21st April 2016.
[40] Article from Oct. 29 2014, Oman Enhances Power Delivery, Transmission & Distribution World, online: http://tdworld.com/smart-grid/
oman-enhances-power-delivery; date of last visit: 21st April 2016.
[41] Business in Oman, Oman information Center, online: http://www.omaninfo.com/oman/business.asp; date of last visit: 25th April 2016.
page 66

Whitepaper Version 1.0, Copyright FRENELL GmbH 2016; unless otherwise indicated,
this publication may be used freely, shared or reprinted, so long as FRENELL is
acknowledged as the source.

Source of photos: Tubo Sol PE2 S.L., Spain

Design and Layout by Raumkontakt www.raumkontakt.de

Company Details:
Frenell GmbH | Luisenstrae 52a | 76137 Karlsruhe | Germany
info@frenell.de | +49 721 451947-0
www.frenell.de
Court of Register: Mannheim, Germany | HRB 724509

Feedback related to the whitepaper: whitepaper@frenell.de