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CSP Storage: South Africa

In association with: CSP Today South Africa 2014

8-9 April, Cape Town

CSP Storage: South Africa provides insight into the current and future prospects of storage technology, as well as assessing the dispatchability potential for the South African market. In addition, it contains exclusive extracts from the CSP Today business intelligence reports. The guide has been published in conjunction with the exciting launch of CSP Today South Africa 2014, taking place on 8-9 April in Cape Town. The must attend event for CSP developers and EPC groups who are looking to identify the opportunities and reduce CSP costs in South Africa.

For more details on CSP Today South Africa 2014 please visit: www.csptoday.com/southafrica CSP Storage: South Africa BUSINESS INTELLIGENCE

CONTENTS

CSP with Storage: Benefi ts and Challenges in South Africa

Introduction: South Africa’s Energy Mix ...... 3 A Brief History of CSP in South Africa .....3 Introduction: Thermal Energy Storage ...... 4 Overview Thermal Energy Storage in South Africa ....4 CSP Storage Technologies With South Africa providing one of the most exciting CSP markets in the world, industry Introduction: Thermal Energy Storage focus has now turned towards understanding technologies ...... 7 the intricacies of the country’s energy mix. Molten Salt ...... 7 One of the key features of CSP technology is Phase Change Materials (PCM) ...... 7 the potential to utilize storage and provide a Concrete ...... 7 truly dispatchable renewable energy supply. Solid TES materials cont...... 8 With energy stability and supply a critical Saturated Steam ...... 8 issue for South Africa, the opportunity exists for CSP to play a leading role. Thermochemical storage ...... 9 Graphite ...... 9 This is why CSP Today have created this guide, that outlines the drivers for storage in Ammonia and hydrogen ...... 9 South Africa, as well as the drivers for this Compressed air energy storage ...... 10 technology in South Africa. XXX

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CSP with Thermal Energy Storage (TES): Benefi ts and Challenges in South Africa

Introduction: South Africa’s Energy Mix Yet renewable energy in its totality has certain restrictions – the key issue being its intermittency, as South Africa’s energy supply is currently characterized it is guided by the times that the sun is shining and by insecurity and extreme uncertainty. There is simply the wind is blowing. It is right here that Concentrated insuffi cient power supply to meet demand. In winter Solar Power (CSP) stands out from the crowd. It is CSP months the national grid gets dangerously close to which offers the unique characteristic, Thermal Energy the brink of shutdown, a situation which continually Storage (TES), which overcomes intermittency. The threatens to destabilize commerce and industry, and ability to store energy enables CSP power stations to compromise foreign investment. supply electricity even when there is no sun. CSP can Government, authorities and the media constantly therefore supply electricity during the evening peak remind the country’s people about the ever prevailing time, when demand is highest. In doing so it avoids the and distinct prospect of a recurrence of rolling power intermittency problems encountered by PV and wind, blackouts, with which the country was beset in the and many renewable energy industry players advocate later months of 2007. South Africa’s State-owned utility, CSP as an integral part of the energy mix in South Africa for years to come. Eskom, is faced with ever increasing challenges, which could make the threat of blackouts a reality again. A Brief History of CSP in South Africa Just as crucial as reliable energy supply is the need In March 2011 South Africa’s Department of Energy for South Africa to comply with worldwide legislation (DOE) fi nalised details of the Integrated Resource Plan to reduce its global carbon footprint, move away from (IRP), a 20-year blueprint that showed the government’s Eskom’s coal-fi red plants and contribute to the global commitment to energy from renewable sources. effort to tackle climate change. The IRP indicated that renewable energy will make up a substantial 42% of all new electricity generation Renewable energy meets a broad array of needs, (totalling 17,800MW) from 2010-2030, and gave strong not just much needed reliable, consistent electricity backing to Wind, Solar Photovoltaic’s (PV) and CSP supply, but also a way to possibly bring down the within this new energy mix. recent increases in power tariffs in South Africa going forward. The rising costs of energy are demonstrated Under the IRP the DOE committed to produce by Eskom’s request for a 16% per annum tariff 8400MW from solar PV, 8400MW from wind and increase for fi ve years. This request was rejected 1000MW from CSP through the Renewable Energy by the National Energy Regulator of South Africa Independent Power Producer Programme (REIPPP). (NERSA), which granted an 8% average increase per In August 2011 the fi rst request for proposals for annum over this period. renewable projects was opened by the government

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allocating 200MW to CSP in this initial stage, leaving economically and technically attractive. 800MW available for future rounds. The integration of TES is not only driven by the By December 2011 the Department of Energy had reduction of LCOE and technology improvements, received 53 bids across all the different technologies, but also by emerging solar policies: Governments awarding 28 projects to independent power producers around the world have realized the relevance of CSP made up of 632MW of PV, 150MW of CSP and with TES as a potential ingredient to their future 634MW of Wind. electrical energy portfolio. With fl uctuating capacity, inherent to most renewable energy technologies, The two CSP tenders were awarded to Abengoa, addressing grid stability will become capital. In addition a leading Spanish multinational renewable energy to the allocation of capacity for the development of developer, that included the 50MW Khi Solar One plant CSP plants, many governments have also included and the 100 MW KaXu Solar One plant. mandatory use of TES for this reason. The bidding for window II of the REIPPP closed on Thermal Energy Storage in South Africa 5 March 2012 with a total of 79 bids received. The To encourage CSP with storage to generate energy total capacity of bids amounted to 3,255MW, far during peak time, the South African Department of exceeding the cap that was set at 1,275MW across Energy (DoE) recently introduced an incentive in the all technologies. The CSP allocation for window II was form of a Time of Day (TOD) tariff. a maximum of 50MW (the capacity remaining from the 200MW assigned to CSP in the initial request for A base tariff applies during the day and a higher tariff proposals). will be applied for supplying energy during peak time. According to the initial proposal, a bidder supplying On 21 May 2012 this 50MW was allocated to a energy during the peak time between 17h00 and consortium led by ACWA Power International, the Saudi 21h00 would get 240% of the base tariff, while there is Water and Power giant, and the South African energy no payment for supplying energy at night. Recently the company Solafrica to develop the Bokpoort CSP Power peak period was extended from 16h30 to 21h30 and Plant. the tariff increased to 270% of the base tariff. In September 2012 the DOE announced delays What has the reaction been from industry players to to Round III of the REIPPP due to the diffi culty in the new TOD tariff? advancing Round I and II projects to fi nancial close. The deadline for window I projects was initially scheduled California-based global solar power developer, for 20 June 2012, but was pushed back to October SolarReserve, provider of utility scale CSP with that year. Window II also faced delays, achieving the thermal energy storage (TES), sees the TOD tariff in fi nancial close milestone on 9 May 2013, over 5 months a very positive light. In a recent interview with CSP later than the initial 13 December deadline.

200 MW was allocated to CSP for the third window of the REIPPPP. Originally scheduled to take place on 7 May 2013, Round III of the REIPPPP closed on 19 August, and the industry will learn who the preferred bidders are on 29 October. Introduction: Thermal Energy Storage (TES) The incorporation of energy storage into CSP plants gives solar thermal technologies a unique advantage over other renewable energy technologies and in particular over solar PV at a time when the latter is able to deliver highly-attractive LCOE values. Thermal energy storage is nowadays essential to CSP plants to produce price-competitive energy through dispatchability.

Although, the initial investment costs are increased when implementing a TES system, the overall LCOE of the plant is reduced, making the CSP plant more

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Today, Stephen Mullennix, Solar Reserve’s Senior Vice Professor Wikus van Niekerk, Director of the Centre President of Asset Management, emphasized that for Renewable and Sustainable Energy Studies at “Utility scale energy storage is critical for South Africa Stellenbosch University, comments. “I think this in order to maintain stability in the grid, and to match incentive is exactly what the CSP projects in South energy supply with energy demand”. Africa need in order to demonstrate the real value of the electricity that CSP can generate. Mullennix went on to explain that “the TOD tariff recognizes the intrinsic value of storage for shifting “The TOD tariff for CSP is a signifi cant breakthrough generation in order to meet demand. SolarReserve that acknowledges the contribution of thermal energy believes that South Africa will capture more signifi cant storage. This will now allow CSP to not only compete value by offering a TOD tariff, than by procuring with the existing open cycle gas turbine (OCGT) intermittent energy”. peaking plants but will also augment the PV plants in the evening hours.” “The tariff enables a CSP plant with utility scale storage to be built instead of both an intermittent renewable Interestingly, as a result of the new tariff, some supply, as well as a backup fossil supply. This derives prospective bidders without storage who were greater value for all parties from the signifi cant capital planning to submit for Window 3 of the REIPPP investment needed to bring the plant online. In addition program were forced to withdraw their bids. it brings economic stability to the operating period for “The new TOD tariff does not make fi nancial sense all parties compared to the volatile fuel pricing markets for a CSP project without storage, and will force all such as coal.” future CSP plants to have storage,” says Riaan Meyer, CEO of GeoSUN Africa, a spin-off of the Centre for Marc Immerman, a Director of Solafrica, who recently Renewable and Sustainable Energy Studies (CRSES) at commenced construction at its 50MW Bokpoort Stellenbosch University. project in the Northern Cape, says: “The TOD tariff structure should result in a more sustainable “I support the new TOD tariff since it will promote procurement for CSP in South Africa given the morning CSP with storage, but it was released only in early and evening peak electrical demand in South Africa. May this year, three and a half months before the bid As CSP is the only renewable technology able to submission of 19 August. This meant that CSP projects store energy, this inherent value is now effectively without storage planning to submit withdrew their bids. recognized by the South African Department of The developers I spoke to will resubmit in a next bid Energy.” window projects with storage,” Meyer continues.

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CSP Storage Technologies

CSP Storage: South Africa was created by CSP Today using its latest business intelligence reports: the Parabolic Trough Report 2014: Cost, Performance and Thermal Storage and the Solar Tower Report 2014: Cost, Performance and Thermal Storage. This fi rst section contains extracts from these technology reports to explain the potential for CSP integration with storage.

The thermal storage capability of a CSP plant is one of  Heat exchangers where the molten salts exchange the main features facilitating the integration of CSP into thermal energy with the Heat Transfer Fluid (HTF). This the grid. The objective of TES is as follows: feature is not required if the HTF is also molten salt  Pumps to move the molten salt between the cold  Provide dispatchable energy, extending the and hot tank(s) operating hours beyond sunset when no solar radiation is available During the charge mode of the TES, some hot HTF mass  Avoid fl uctuations associated with the intermittent fl ow leaving the solar fi eld is sent to the TES where it solar resource heats up the circulating molten salts from the cold tank(s)  Reduce dumped energy making the plant more to the hot tank(s). As a consequence, the cold molten salt effi cient is heated up to 380-390°C and is stored in the hot tank(s) for later use. During the discharge mode of the TES, the The current TES technology employed in commercial operating principle is reversed and the molten salts stored operating plants consists of one or more pairs of tanks in the hot tank(s) are sent to the cold tank(s), passing where molten salts are stored at two temperature through the heat exchangers where they release thermal levels, providing a temperature differential that is used energy to heat up the HTF. (See Figure 1 for an overview to generate steam. The molten salts have a melting of an oil HTF parabolic trough plant with TES). point in the range of 230-240°C, and TES in a parabolic trough plant consists of the following components: Commonly in modern solar power tower plants molten salt is used as the heat transfer medium (HTF), and it is  Cold tank(s) where molten salts are stored at a also used for TES. In this system molten salt, at 290°C, temperature range of 290-300°C is pumped out of a “cold” storage tank to the external  Hot tank(s) where molten salts are stored at a receiver on top of a tower where it is heated to 565°C temperature range of 380-390°C and delivered to a “hot” storage tank. The hot salt is then

Figure 1: Oil HTF Parabolic Trough Schematic

-390°C -375°C 380°C

Steam turbine

Thermal Solar fi eld Heat Steam energy exchanger generator storage

290°C Condenser

Source: Parabolic Trough Report 2014: Cost, Performance and Thermal Storage

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Figure 2: Molten Salt HTF Parabolic Trough Schematic

-550°C 535°C 550°C

Steam turbine

Thermal Solar fi eld Auxiliary Steam energy Heater generator storage

290°C Condenser

Source: Parabolic Trough Report 2014: Cost, Performance and Thermal Storage extracted for the generation of 552°C/ 126bar steam in are considered more practical for industrial applications. the steam generator. This principle of using the molten salt as both the HTF and TES is also being demonstrated To decrease the cost of molten salt TES systems, the in new parabolic trough plants, such as Enel’s Archimede energy storage density of the fl uid must either be plant in Sicily. These higher operating temperatures are increased, or the storage temperature must be raised. favourable for increased thermal conversion effi ciency, For the former to be achieved, new multi-component and ultimately mean that more watt-hours are stored per formulations can be devised, or additives used. unit of fl uid. (See Figure 2 for an overview of a molten salt Additives can also prevent solid freeze from occurring, HTF parabolic trough plant with TES). and ensure the solid-state salt remains as slush. An Overview: Thermal Energy Storage Phase Change Materials (PCM) technologies PCM, where a material stores and releases energy when changing between its solid, liquid or gaseous Although a wide range of energy storage solutions states, holds much promise. Current efforts to utilize have been proposed, only molten salts and synthetic phase change materials are geared to using tried-and- oils are seeing serious commercial use. However, tested sodium and potassium nitrate eutectics and current R&D efforts have led to a number of leveraging the latent heat required to melt the solid salt developments in energy storage, mainly spurred combination. on by the possibilities of plants operating at higher temperatures. (See Figure 3 on the next page for an The world’s largest PCM pilot is in Carboneras, in the overview of Thermal Energy Storage technologies). Almeria region of Spain and is intended to show whether PCM could become a viable alternative to molten Molten Salt salt as a thermal storage medium for CSP, although As of today, molten salt has been the only technology commercialization is likely to be several years away. implemented for extended utility-scale parabolic trough and solar tower TES using a eutectic mixture of 60% One challenge to address in PCM was the insulating sodium nitrate and 40% potassium nitrate. properties of the solid salt in the heat exchanger pipes. Researchers say they were able to get around Very few single-component salts exist which have this problem by adding fi ns to the exchange tube, melting point within the 300 to 500°C range, such increasing the heat transfer surface area. as sodium and potassium nitrates. While single- component salts are more practical from an industrial Concrete perspective, the scarcity of such salts limits their The German Aerospace Center (DLR) is exploring the application, and therefore, multi-component systems performance, durability and cost of using solid, thermal

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Figure 3: Possible CSP Thermal Energy Storage Technologies

Thermal Energy Storage

Sensible Latent Thermochemical

Molten salt two tank Salts Metal oxide

Concrete thermocline Metal alloys Ammonia decomposition

Packed bed thermocline Sulfur cycles

Sand-shifting two tank

Source: Parabolic Trough Report 2014: Cost, Performance and Thermal Storage energy storage media (high-temperature concrete or)  Cheap in parabolic trough power plants using standard heat  Applicable to Trough and Tower transfer media that passes through pipes located within  Heat up to 650°C the solid storage material. As previously stated, solid  Scalable media provide considerable saving potential, but also One challenge is that the casing containing the solid have issues which include maintaining good contact TES is relatively sophisticated as stones, for example, between the concrete and piping, and lower to the undergo thermal expansion, so very rigid walls are heat transfer rates into and out of the solid medium. required. This means the walls themselves will be At the Almeria Solar Platform in Southern Spain, good thermal conductors, which could not only mean Ciemat and DLR performed initial testing to leakage of heat outside the system but would corrupt demonstrate that both castable ceramics and high- the heat stratifi cation of the thermal storage unit. To temperature concrete are suitable as solid media for counter this, a thin layer of high-resistance concrete sensible heat storage systems. That said, the high- on the inside of the casing, surrounded by a more temperature concrete would be preferable for its lower porous concrete for insulation of the system, then a costs, higher material strength, and easier handling as microporous insulator layer, a foam glass layer and well as longevity. fi nally a concrete outer structure are required.

The modularity of concrete also constitutes a strong Saturated Steam incentive towards this material, also allowing for For storage, Direct Steam Generation (DSG) poses a perhaps better integration with the solar fi eld and limitation, as opposed to molten salts and oil HTFs, power cycle since a combination of sensible heat storage for preheating and superheating, as well as latent heat Solid TES materials storage for evaporation, has to be used. This could, Other solid materials have been proposed and utilized however, be achieved using PCMs, or two independent for TES, including rocks, pebbles, slag, sand and storage media. For sensible heat, the same storage manufactured ceramic spheres. However, different media can be used as for other HTFs, but for latent minerals have varying thermal properties, so care must heat, for example, sodium nitrate could be used, as be taken in their selection. proposed by DLR.

Benefi ts: There is also another type of heat storage, called  Locally available Ruths storage, which works as a steam accumulator  Reduce transport and purchase costs. using pressurized liquid water. Hot steam enters the

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system and is then compressed, converting the steam the point where the storage material is a signifi cant into superheated liquid water. However, research has expense for operators. Graphite, on the other hand, is shown that this has a limited application for CSP as it is comparatively plentiful and cheap. expensive. Benefi ts: Thermochemical storage  High energy density Thermochemical TES is a promising new type of TES,  High level of thermal inertia which permits more compact storage through greater  Good relationship between heat input and output energy storage densities.  Ease of working and shaping  Relatively low cost and high availability Thermochemical storage is based on a reversible chemical reaction, which is energy demanding in one Weaknesses: direction and energy yielding in the reverse direction.  It glows and oxidizes above 450°C. This can be overcome by encasing the material in an oxygen- Benefi ts: free environment  Very high energy densities achievable  It’s too heavy, limiting scalability, particularly with  Mitigates losses power towers  Extend dispatchability towards base-load power  Large amounts of piping needed generation Ammonia and hydrogen Unlike sensible and latent approaches to energy These alternative fuels are carbon-free and can be storage, thermochemical systems can retain their produced from any energy source. CSP can produce stored energy for almost unlimited time periods. If hydrogen and ammonia and then use the fi nal product thermochemical energy storage can be proven at as a fuel either to generate electricity, or act as a a reasonable scale within the few next years then replacement for gasoline or diesel to power vehicles. commercial deployment might be possible sometime after 2020. For hydrogen, the heat generated by CSP could be used with a solid oxide electrolyzer cell to split water at Graphite temperatures up to 900°C with a higher effi ciency than Graphite can be heated to thousands of degrees, which conventional steam (alkaline) electrolysis at near-room could greatly increase the effi ciency of CSP compared temperature. to the 560-570ºC of molten salts. Furthermore, only a few suppliers can offer molten salt of the quality Ammonia, meanwhile, has been used periodically required by the industry, which has increased costs to as a fuel for the last 60 years and it can be used in

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current vehicle engines and fuel or gas power plants caverns. This places geographical constraints on the with only minor modifi cations. Unlike hydrogen, it can method. More fl exible approaches include those be distributed using existing gas and oil pipelines. It proposed by SustainX Energy Storage Solutions and also has an energy density two to four times that of LightSail Energy, which would store the compressed hydrogen. air in tanks, making it less location-dependent than existing geological systems. LightSail uses a fi ne water Compressed air energy storage spray to capture the heat of compression, which is Compressed air energy storage (CAES) has many then used in the expansion phase of the process. The potential applications for energy storage beyond CSP, company claims that the roundtrip thermal effi ciency and is not a form of TES. Essentially, power is used to is 90%, scalable up to 100 kW. LightSail has attracted compress air, which is later released to drive a turbine. funding from backers such as Bill Gates and Peter Theil. Compression heats the air, while decompression cools it, so heat exchangers and possibly heaters The SustainX system, meanwhile, compresses and may be required to ensure temperatures stay within expands the gas within hydraulic cylinders, which an acceptable range, which of course has a negative allows the controlled transfer of heat with the ambient impact on the thermal effi ciency of the process. surroundings during compression and expansion. The company has demonstrated thermal effi ciencies In the only two operating commercially-viable, greater than 90% for both compression and expansion. largescale CAES facilities, this adiabatic process is According to the company, a US DoE-funded used to hold pressurized air in large underground demonstration project is currently underway.

Published in August 2013, CSP Today’s latest business intelligence reports – the Parabolic Trough Report 2014: Cost, Performance and Thermal Storage and the Solar Tower Report 2014: Cost, Performance and Thermal Storage – respond to the most critical needs of CSP stakeholders, representing 5 months of research and culminating in high-quality data and analysis. At the core of these publications – which follow a mirrored structure for comparative purposes – is the desire to fi rstly determine the true cost attributes and performance outputs associated with each technology across 8 global markets based upon the latest industry validated and localised cost data, and secondly, use these techno-economic and inter-market benchmarking results to identify where the greatest cost reduction and performance optimization gains can both be made and are required.

For more information on these publications and to view our complete Business Intelligence Portfolio please visit www.csptoday.com/research

We hope that this guide to CSP storage potential for South Africa proved useful. With the market in South Africa gaining momentum, a pipeline of CSP projects is emerging - creating opportunities for companies to build a business in the region. The guide was created in conjunction with the launch of CSP Today South Africa 2014, taking place next April in Cape Town. The event will show you how to reduce CSP costs and risk through international experience and investor insight to prove your competitiveness.

For more information please visit: www.csptoday.com/southafrica

or contact Brandon Paramo: +44 20 7422 4302

[email protected]

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