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CSP Projects' Financing And Testing Process Optimization Prior To The FAC-Targeting on Lower LCOE

Report from CSPPLAZA

Updated: 4-Aug-2015

Miroslav Dolejsi, the Deputy General Manager of German-based CSP engineering consulting firm SolEngCo GmbH, also a senior expert of the CSP industry recently gives ideas about financing and testing process optimization of CSP projects to CSPPLAZA.

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photo: Miroslav gives presentation on CPC 2015

Mr. Miroslav:

Currently, CSP Business is focused on cost reduction and making the levelized cost of electricity (LCOE) more competitive than that of conventional technologies like PV or Wind Power.

Weighted average LCOE of CSP varied by region from a low of USD 0.20/kWh in Asia to a high of USD 0.25/kWh in Europe. However, though costs fall further, projects are built with LCOEs of USD 0.17/kWh, which is still high.

Financial models show that the LCOE depends primarily on capital costs while capital costs preliminary depend on local solar resource. All experts across CSP business dealing with capital costs reduction are mainly discussing an optimization of plant size, new materials and automation leading to price declining the prices from manufacturing industry, training O&M staff in existing facilities, advances in R&D, a more competitive supply chain as well as improvements in the performance of the solar field, solar-to-electric efficiency and thermal energy storage systems.

But it is very rare to hear about financing conditions and their impact on the overall costs of a CSP plant , which is consequently on LCOE.

It should be a task for developers to look for better equity or debt financing conditions. In case of debt financing, the project company gets a loan and promises to repay the loan over the time (20 to 25 years) with interest. Here, it is necessary to consider that CSP plants have different ration between capital cost and O&M costs. Compared with conventional technologies, CSP plants need very high capital costs and very low operational costs. Therefore any reduction of capital costs has influence on such a long term capital expenditures , which is finally on LCOE.

Banks still consider CSP technologies as not quite conventional technologies,  therefore the interests of the credits are relatively higher.

One of the reasons is the performance testing process of CSP projects. The testing prior to the Provisional Acceptance Certificate (PAC), in the banks’ point of ` view, is quite similar to conventional technologies. However, the testing up to the Final Acceptance Certificate (FAC) is quite different from testing of other power plants. This testing includes a Yearly Performance Testing (YPT), which must be successfully finished within 36 months.

An YPT is necessary to prove CSP Plants on power generation performance, particularly depending on accuracy of the SCAs during one solar year.

When the first commercial CSP project with TES was planned (Andasol 1) many technical risks were considered. For example if the aperture area of the solar field cannot harvest the design solar energy, spare loops were foreseen. That results to a time needed for an assembly and erection of these spare loops and starting YPT again. Also learning curve for operating personnel was taken into account manly in optimizing the operation with three sources of energy; from solar field, from TES and from fossil fuel. When consideration of all the technical and operational risks was finished, a total period of 36 Months was established.

After commissioning of approximately 100 CSP projects we learned that the challenges are not in the risks we had considered before the first plants were build but with unaccepted impropriate design of well proven equipment like pumps, heat exchangers, etc. or O&M problems with ball joints, broken receivers and mirrors etc.

EPC and O&M contractors as well as manufactures have learned these lessons and they have improved their engineering and designs.

Now we are asking the question: do we still need a total period of 36 Months for fulfilling the YPT?

Well established companies in CSP business had learnt already during the design, implementation and operation, therefore it should be a time to optimize the project risks.

Even Andasol Projects did not need entire period for this YPTs and they were finished earlier. If developers, reading this article, would be interested in this topic, we would be very pleased to provide any consultancy services, because the optimization of the total period of testing prior to the FAC will be different for CSP with TES and without TES, CSP with boosters and for ISCC Projects and also other factors have to be taken into account e.g. the country in which such a plant will be implemented.

Note:For more details, please contact Mr. Miroslav Dolejsi, Deputy General Manager of SolEngCo by Email:  dolejsi@solengco.com

 

About lily Zhao

Hello, I'm Summer Yang, a senior jourmalist with CSPPLAZA. Nice to meet you dear guy...

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