Economic implications of thermal energy storage for concentrated solar thermal power

Abstract

Solar energy is an attractive renewable energy source because the sun's energy is plentiful and carbon-free. However, solar energy is intermittent and not suitable for base load electricity generation without an energy backup system. Concentrated solar power (CSP) is unique among other renewable energy options because it can approach base load generation with molten salt thermal energy storage (TES). This paper describes the development of an engineering economic model that directly compares the performance, cost, and profit of a 110-MW parabolic trough CSP plant operating with a TES system, natural gas-fired backup system, and no backup system. Model results are presented for 0–12 h backup capacities with and without current U.S. subsidies. TES increased the annual capacity factor from around 30% with no backup to up to 55% with 12 h of storage when the solar field area was selected to provide the lowest levelized cost of energy (LCOE). Using TES instead of a natural gas-fired heat transfer fluid heater (NG) increased total plant capital costs but decreased annual operation and maintenance costs. These three effects led to an increase in the LCOE for PT plants with TES and NG backup compared with no backup. LCOE increased with increasing backup capacity for plants with TES and NG backup. For small backup capacities (1–4 h), plants with TES had slightly lower LCOE values than plants with NG backup. For larger backup capacities (5–12 h), plants with TES had slightly higher LCOE values than plants with NG backup. At these costs, current U.S. federal tax incentives were not sufficient to make PT profitable in a market with variable electricity pricing. Current U.S. incentives combined with a fixed electricity price of $200/MWh made PT plants with larger backup capacities more profitable than PT plants with no backup or with smaller backup capacities. In the absence of incentives, a carbon price of $100–$160/tonne CO2eq would be required for these PT plants to compete with new coal-fired power plants in the U.S. If the long-term goal is to increase renewable base load electricity generation, additional incentives are needed to encourage new CSP plants to use thermal energy storage in the U.S.