Improving the Financial Performance of Concentrating Solar Thermal Power

Abstract

Commercial-scale implementation of concentrating solar thermal (CST) technologies for electricity generation has been increasing worldwide, but technology assessments produced by engineering consultancies typically indicate that electricity production using CST is more expensive than most other renewable energy technologies. A review of a selection of costing studies that have been prepared in recent years for Australian government and industry bodies suggests that electricity cost estimates for CST technologies are exaggerated by a combination of high capital cost estimates and the financial analysis methods used. The results of these assessments are often used in investment decision-making processes of industry and government bodies, so this may have a negative impact on further development of CST technologies. While it is apparent that revision of the methods used in these analyses could improve the apparent cost effectiveness of CST, it is also apparent that the competitiveness of CST technologies needs to be improved through cost reduction and generation improvement. One major driver for this is that some CST technologies have the capability to efficiently store energy in thermal form for electricity production on demand and this could have significant benefits to both specific users and to the general electricity network stability. As a stage in identifying potential targets for new research that will improve competitiveness of CST technologies, a sensitivity analysis was performed to examine the influence of a broad range of factors on the cost of electricity using combined performance modeling and financial analysis. This largely reconfirms the commonly held view that reduction of solar collector costs is a critical target, but also identifies the importance of improving the performance of the overall power generation cycle and general cost reduction throughout the plants.