cci large-scale solar power development in prc

8/6/2019 CCI Large-Scale Solar Power Development in PRC

1/16

Large-Scale Solar Power Development in China

June 9, 2011

,


2/16

Introduction Clinton Climate Initiative

CCI works under the leadership of government partners, and in collaboration with private sectorstakeholders, to develop and implement pilot projects that directly reduce greenhouse gasemissions and serve as replicable and scalable models for others to follow

CCIs three focus areas are:

Cities energy efficiency, waste management, street lighting, transportation

Clean energy solar, carbon capture and sequestration

Forestry reforestation and avoided deforestation

CCI staff includes people with backgrounds in finance, consulting, industry, engineering and public

CCI acts as an independent advisor and facilitator and has no financial ties to or interests in anycompany or project it is involved with

Three topics for todays presentation:

Introduction to CCI and CSP

CONFIDENTIAL DRAFT FOR DISCUSSION

Solar Park concept and forecast reductions in CSP costs

CCI previous experience with large-scale CSP

2


3/16

Where We Work

New Focus on China

Malaysia

CONFIDENTIAL DRAFT FOR DISCUSSION3


4/16

Comparison of PV and CSP

PV CSP

Key

Crystalline (Mono and Poly)

Thin Film (CdTe, CIGS)

Parabolic Trough

Tower

Compact Linear Fresnel Reflector (CLFR)

Mature technology with track record ofoperating projects

Si nificantl reduced costs in last 3 ears

Energy storage

Hybridization with fossil fuel fired plants (base-loadower ca acit a ments load smoothin

More adaptable to conditions (hot, hazyweather; weak light; dust)

Economies of scale through solar park model

Crystalline and thin film technologies matureand unlikely to experience dramatic cost

Early stages of commercialization More limited deployment to date: 1GW

Issues

reduction/technological advancements

Low conversion efficiency (c. 15-20%)

Highly fragmented industry

Commodity price/availability exposure(polysillicon , Indium)

installed vs c. 35GW PV installed

Pipeline of 12GW installed by 2015

However, first utility-scale CSP plant deployed~30 years ago; still operating

Other Key

Optimum scale reached at ~30MW based onmaximum inverter size

Utility-scale projects limited (~20% of total);expected to be the dominant driver of growth

Installations less modular than PV; significant benefitsfrom economies of scale through Solar Park model

Leading sources of demand: USA, Spain

Increasing demands from developing countries,


,Japan, USA; driven by government incentives

Increasing demands from developing

countries (e.g India, PRC. etc)

4


5/16

Global CSP Installation

There is an aggressive pipeline of CSP projects, led by Spain and the US

Global Installed CSP Capacity Through 2015, GW(1)

United States

8.00.5

2.5 12.3

Spain Global Total

0.4

Installed Pipeline

Installed Pipeline

0.00.8 1.0

MENA

Installed Pipeline Installed Pipeline

Rest of World Australia

0.0.

Installed Pipeline

0.0 0.5

Installed Pipeline


1. AT Kearney.

5


6/16

Advantages of Developing CSP in PRC

Leading development of technology

Capitalize on experience building a world-leading PV manufacturing industry

demand Skilled-job creation and economic development

ay a ro e n mee ng s gn can g o a eman grow an c pa e n near- erm

Diversity of energy supply

Strong solar resource (DNI radiation required for CSP) in western region

Builds clean energy supply capacity

Dispatchability



7/16

Suggested Business Model: Solar Parks

A Solar Park is a concentrated zone of solar development that includes multiple gigawatts of solarenergy generation capacity, pre-permitted for electricity generation and component manufacturing

Main objectives to facilitate private sector investment, reduce required government subsidies,and potentially optimize financing

Individual solar plants (CSP, CPV and PV), optimally-sized to achieve economies and efficiencies of

scale, can be constructed in a clustered fashion and on a predictable timeline, sharing commontransmission, water supply and other site infrastructure

One or more blocks of land are designated as a concentrated zone for solar development

Minimizes the environmental and social impacts of development

Provides targeted economic development and employment opportunities and growth for specific

locales or regions Manufacturers of com onents ma find it attractive to build ca acit to manufacture locall with

large-scale demand and a supportive environment

Solar Park can also serve as a technology hub

Common CSP InfrastructureGeneration Generation

CSP 1 CSP 3Water

Balance of

Land


Common Transmission

Plant


8/16

Potential for LCOE Reduction Today

Using todays technology, LCOE can be reduced at least 30% through advantages toCSP such as the Solar Park model, hybridization and storage

Other key drivers of LCOE reduction, such as optimized financing, reduced permitting,

case-by-case, but should also be considered

INDICATIVE COST REDUCTION THROUGH CSP(1)

80%

100%

4-6% Reduction

Additional 20-25%Reduction(2)

Additional +20%Reduction(3)

E

20%

40%

LC

0%


1. All calculations are based on CCI experience in other regions and may vary for China.

2. Based on infrastructure cost of 15-20% of total capex. Length of transmission line a significant driver of cost saving.3. Range across various financing scenarios.


9/16

Forecast Reduction in LCOE of CSP

CSP is expected to undergo similar reductions in LCOE as PV experiencedin the last few years

100%

,

10-20% Reduction

60%

80%

EEconomies of Scaleand De lo ment of

25-40% Reduction

35-45% Reduction

40%

LC New Technology Economies of Scale

and TechImprovements

Cost andEfficiency

Improvements

0%

20%



10/16

CCI Experience India

CCI, in partnership with The Energy and Resources Institute (TERI), submitted aprefeasibility study on the deployment of utility-scale solar power to the Government ofIndia in 2009. CCI and TERI subsequently entered into MoUs with the States ofGu arat and Ra asthan in Se tember 2009 and Januar 2010, res ectivel , to anal zethe feasibility of planning and developing Solar Parks in each state

CCI and TERI introduced the concept of Solar Parks to Rajasthan and Gujarat; bothStates are in the process of implementing such Solar Parks for the deployment ofarge-sca e genera on pro ec s as we as manu ac ur ng an researc andevelopment

Partnered with the ADB to begin knowledge transfer on solar to Indian public sector

Developed financing framework in collaboration with the ADB that could help to bringsignificant capital at more attractive terms to India

, ,to examine the potential for a debt capital markets product



11/16

CCI Experience Australia, Morocco and South Africa

Australia

CCI is advising the Federal Government on its AUS$1.5 billion Solar Flagships program and how

the program can be used to create a viable solar generation sector. CCI also undertook a

Feasibilit Stud with the Queensland Government, which confirmed that a Solar Park could assist

economic viability of projects through shared infrastructure costs and streamlined approvals

processes

Morocco

CCI is working with the Moroccan Agency for Solar Energy (MASEN) to prepare a roadmap for the

export of solar power to Europe. CCI is also assisting MASEN with the preparation of a financing

framework for its 500 MW Ouarzazate project, which aims to be operational by 2015

South Africa

CCI partnered with the South African Department of Energy to prepare a pre-feasibility study for the

development of a Solar Park in the Northern Cape Province. The study concluded that solar power

can be deployed in the Northern Cape in large quantities over the next decade at costs thatbecome competitive with new coal-fired power

The South African Cabinet approved the undertaking of a full-scale feasibility analysis, which is


, ,

October 2010, to introduce the project to relevant stakeholders

It is expected that the South African government will launch a Solar Park towards the end of 2011

11


12/16


13/16

Things to Consider in Planning Commercial Deployment of CSP

Solar Resource Assessment (Mitigating uncertainty)

Definition and Design of Contracts (e.g. EPC, O&M and PPA)

Public Private Partnership (PPP) BOT / BOOT / BOO/ BTO Models

Im act on Financial Return and LCOE

Funding Options

Risk Assessment



14/16

Things to Consider in Planning Commercial Deployment of CSP

Project Bankability



15/16


16/16

Key Technical Drivers for Optimal Development

Description Advantages Deliverability

-

CSP plants utilize steam turbines,

much like traditional fossil fuelpower stations

Type 1: Use fossil fuel asalternative heat source 10-15%

hazy/cloudy conditions that impact

CSP more than PV Possible base-load due to

reliability

Partiall offsets cost of stora e

at several sites

SEGS plants in Spain(Type 1)

Three commercial Type 2lants Australia, Ital ,

y r zat on fossil fuel)

Type 2: Solar-heated fluids boostfossil fuel plant output (IntegratedSolar Combined Cycle )

Capital cost savings throughshared infrastructure, largerturbines

Can be added to existing plants Preserves fossil fuels during

Iran)

periods of strong sun

Heat from CSP can be stored inmolten salts or other solutions,offering several hours of energy

Potential for 24 hour power

Load-smoothing

Capacity payments

Storage demonstrated onseveral trough plants(Andasol 1)

Storage Currently, projects being built with

up to 12 hours of storage

Large-scale tower plantsbeing developed with +14hours of storage

Expected near-termimprovements ino eratin fluids will


increase storage potential

16

cci large-scale solar power development in prc

Documents