China-backed $4bn CSP project set for financial close by

August
May 2, 2018

Developer ACWA Power has now signed key PPA and EPC agreements for the 700 MW plant in Dubai

while Chinese partner Shanghai Electric has started optimization activities along the supply chain, project

partners told the MENA New Energy 2018 conference.

Shanghai Electric will leverage its supply chain capabilities to install the 700 MW plant in Dubai. The plant will use

parabolic trough and tower technology. (Image credit: DEWA.)

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Last month, Saudi Arabia’s ACWA Power signed an Engineering, Procurement, and Construction (EPC) contract

with Shanghai Electric, a major Chinese power company, to install its 700 MW DEWA CSP project in Dubai.

The 700 MW dual-technology CSP project, awarded by the Dubai Electricity and Water Authority (DEWA) in

September 2017, sets a new industry record for size and cost-efficiency.

The project will require 14.2 Billion AED ($3.9 billion) in investment and will consist of three 200 MW parabolic

trough systems and a 100 MW central tower plant. The project was awarded at a tariff price of $73/MWh and

includes up to 15 hours of energy storage capacity.

Spain’s Abengoa and U.S. developer BrightSource are the respective technology providers for the parabolic trough

and central tower plants, bringing decades of CSP industry experience to the project.

Project documents, including the power purchase agreement (PPA) with DEWA and EPC contracts, have now been

signed and talks with financial lenders are at a "very advanced stage," Meriem Bellizim, ACWA Power’s project

manager for the DEWA 700 MW CSP project, told the conference on May 24.

Industrial and Commercial Bank of China (ICBC) is mandated lead arranger for a $1.5 billion senior loan. ICBC,

Bank of China and Agricultural Bank of China will together provide almost 80% of senior debt.

Financial partners-- which involve local, and international investors including Chinese groups-- are currently working

through conditions precedent, Bellizim said.

"Financial close will be around the end of July, maybe the beginning of August," she said.

China installs

A key driver of the low tariff is a 35-year PPA provided by DEWA, much longer than the typical 20 to 25 years

offered for CSP projects to date, which spreads the initial investment across a longer period and reduces the

annual cost of capital.

Economies of scale and purchasing power will also play a major role. The construction of three 200 MW parabolic

trough systems will allow manufacturers to introduce economies of series.

Shanghai Electric's experience as a plant supplier as well as an EPC contractor will allow it to drive for efficiencies in

the supply chain, Bellizim said.

Shanghai Electric is one of China's top five power generators. Owned by China Power Investment Corporation,

Shanghai Electric has a total installed capacity of 107 GW, including 5 GW of solar power and 10 GW of wind. The

company is active in 35 countries.

In 2014, Shanghai Electric and BrightSource formed a joint venture (JV) for the construction of utility-scale CSP

plants in China. The JV combined BrightSource's solar tower technology and installation experience with Shanghai

Electric's EPC and supply experience.

The JV between Shanghai Electric and BrightSource includes the construction of a 135 MW tower with molten salt

storage at the Huanghe Qinghai Delingha project in Qinghai province, selected under China's 1.35 GW CSP

Commercial Demonstration Pilot Program. The partners plan to build multiple 135 MW towers at the site.

The JV has helped improve the efficiency of the central tower design and supply chain and has reduced costs,

Wang Deyuan, Associate Managing Director - Integrity Energy Solution Business Unit at Shanghai Electric, told the

conference.

Shanghai Electric has worked with BrightSource to optimize the installation of central tower solar fields, including

mirrors, molten salt receivers, and control systems, and these learnings can be applied to the Dubai project, Deyuan

said.

"The combination between BrightSource and Shanghai Electric could benefit the integrated solution- especially for

the solar field," he said.

Work underway

ACWA Power has issued a limited notice to proceed (LNTP), allowing Shanghai Electric to move forward with

supply optimization ahead of a full NTP later this year.

Early preparations for installation will help reduce project risk, Deyuan said.

"All kinds of experience and lessons learned will be helpful for us to understand the challenges," he said.

For the parabolic troughs plant, Shanghai Electric is collaborating with Abengoa to find innovative solutions to best

integrate the solar field and power block, Deyuan said.

Maximizing overall plant performance is a priority for Shanghai Electric, he said.

"We will mix best practice from the past experience...And continue to optimize the solutions. We found there are a

lot of spaces to be improved.”

Shanghai Electric will look to optimize all aspects of the supply chain, including raw materials costs, Deyuan said.
"We have a huge demand of quantity for the materials and equipment...We would like to have open discussions...for

collaboration with participators for this project, to find the best solutions," he said.

Supply chain gains for the DEWA project should help support global CSP growth and the buildout of a “very strong

supply chain” in the Middle East, Deyuan said. Other projects up for tender in the Middle East and North Africa

(MENA) region include Morocco's 800 MW Midelt project hybrid PV-CSP project, for which contracts are expected

to be allocated in 2018.

                                    MENA CSP pipeline in 2018

                                                        (Click image to enlarge)

Source: Middle East Solar Industry Association's (MESIA) 'Solar Outlook Report 2018.'

Lessons learned will also encourage the further development of the Chinese CSP market, Deyuan said.

China’s Demonstration Pilot CSP program will support the growth of a domestic CSP industry, and installation and

technology experience gained from abroad will allow China to diversify its technology base, he said.

"This will give us more chances to achieve technology improvements," Deyuan said.

Falling costs

Michael Geyer, Vice President Business Development at Abengoa, said lower CSP costs are possible in the coming

years.

Increasing efficiency of heat transfer fluids, improvements in receivers and collectors, and automation of

manufacturing and operations and maintenance activities should all drive down costs, Geyer said.

"There is still lots of room for improvement for automating the O&M," he noted.

A CSP plant of capacity 100 MW-150 MW might typically have around 50 to 70 operational staff, and this number

could be significantly reduced with automation, Geyer said.

"There is much less automation in these plants than we have in....combined cycle [gas] or coal plants," he said.

"The important condition here is that there is a continuous pipeline of projects...DEWA is an important step, China

will be important step," Geyer said.

New Energy Update

ACWA, Shanghai Electric sign EPC agreement for Dubai CSP

project; U.S. DOE announces $24mn in CSP R&D funding
Apr 30, 2018

Our pick of the latest solar thermal news you need to know
The 700 MW Dubai DEWA project will feature 600 MW parabolic trough and 100 MW of tower capacity. (Image

credit: FroukjeBrouwer)

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ACWA, Shanghai Electric sign Dubai EPC agreement

ACWA Power and the Dubai Electricity and Water Authority (DEWA) have signed an agreement with Shanghai

Electric Generation Group (SEGC) that will see SEGC conduct engineering, procurement and construction at the 700

MW CSP project in Dubai.

The 700 MW CSP project is the fourth phase of the Mohamed bin Rashid Solar Park and will be the largest CSP

plant in the world upon completion. The agreement was signed in Shanghai in the presence of representatives from

the Chinese government, the embassies of the United Arab Emirates and Saudi Arabia (where ACWA is

headquartered), and officials from DEWA, ACWA Power, the Silk Road Fund, Industrial and Commercial Bank of

China (ICBC), Bank of China, Agricultural Bank of China and China Minsheng Bank.

ICBC has been mandated as the lead arranger of a $1.5 billion senior loan, ACWA said in a press release. The Dubai

project is a flagship project for ICBC in supporting the three major Chinese power equipment suppliers, namely

Shanghai Electric, Dongfang Electric and Harbin Electric, to ‘go abroad’ and break through the sophisticated and

established power market, it said. ICBC, Bank of China and Agricultural Bank of China will together provide almost

80% of senior debt.

The Dubai project will come at a total capital investment of 14.2 Billion AED ($ 3.87 Billion). The project, which

comes with a record low tariff of just USD 7.3 cents per kilowatt hour (kW/h), will feature a combination of a 100

MW tower and three 200 MW parabolic troughs, which will collect heat and store it in molten salt to supply

electricity on demand during the day and through the night. The CSP tower will be the world largest, at 260m.

The fourth phase of the Mohammed Bin Rashid Solar Park is set to save 2.4 million tons of CO2 and half a million

tons of natural gas per year, eliminating the need to use foreign currency to import this gas by substituting it with

clean and renewable energy, according to ACWA.

U.S. Secretary of Energy announces $24 million in CSP R&D funding

U.S. Secretary of Energy Rick Perry has announced up to $105.5 million in funding for solar energy research and

development, including a substantial portion for CSP research.

Under the plan, the Department of Energy’s Solar Energy Technologies Office will invest $24 million in 21

concentrating solar power projects. These projects will pursue innovative CSP concepts and technology solutions that
enable the solar industry to reach DOE’s 2030 levelized cost of electricity (LCOE) targets for CSP, including $0.05

per kilowatt-hour for systems with greater than 12 hours of onsite storage.

Research in CSP will focus on advancing elements found in CSP subsystems, including collectors and thermal

transport systems for advanced power cycles, while pursuing new methods for introducing innovation to CSP

research.

The DOE will invest $46 million in 14 projects that deal with advanced solar-integration technologies such as: solar

plus storage, power electronics, and PV-integrated sensor technologies. It will invest a further $8.5 million on

improving and expanding the solar industry through workforce initiatives, and $27 million on photovoltaics research

and development.

“American ingenuity is the engine of our energy economy,” said Secretary Perry. “Investing in all of our abundant

energy sources, including solar technologies, will help to drive down costs and ensure that the nation leads the world

in energy production and innovation.”

Brazil gets first heliostat field

The installation of Brazil’s first heliostat field at the University of Sao Paulo (USP) in Pirassununga was set for

completion in April, the Global Solar Thermal Energy Council has reported.

The demonstration plant is part of SMILE, short for Solar-Hybrid Microturbine Systems for Cogeneration in Agro-

Industrial Electricity and Heat Production. Once completed, the heliostats will focus sunlight onto a receiver

connected to an Organic Rankine Cycle (ORC) system. The heat transfer fluid will be ambient air. The ORC turbine

‘waste’, hot water at 90 degrees Celcius, will be directed to a nearby abattoir.

SMILE aims to construct two industrial solar process heat systems powered by solar energy and biofuel. The second

installation will be at a farm in Caiçara do Rio do Vento, in the northeastern state of Rio Grande do Norte; it will

produce steam directly in the receiver and channel it to a steam engine and a dairy.

The USP plant’s thermal receiver will have 380 kW capacity and Caiçara will have 350 kW of capacity. The former

will have a biodiesel burner installed behind the receiver to even out temperature fluctuations due to varying solar

irradiation and achieve a consistent inlet temperature at the ORC turbine. The latter will use waste wood to provide a

stable flow of steam.

SMILE is being funded by manufacturing businesses, the German Federal Ministry for the Environment, and the

Brazilian Development Bank. During the first stage of the USP demonstration project in spring 2017, local

manufacturers built and delivered prototypes of heliostat mounting systems. These prototypes were examined and

improvements made before USP commissioned Sao Paulo-based supplier Hydrocom to deliver the design for 73

heliostats of 9 m² size each.

New Energy Update