On time and on budget, Saudi Arabia’s ACWA Power has just begun operation of its 50 MW Bokpoort CSP project in South Africa.
Nandu Bhula, Solafrica Bokpoort CEO for ACWA Power said that not only was Bokpoort on time and on budget, but it has begun operation with no ramp-up period. “We reached full load in December of 2015. Part of our PPA rules was that we had to be 100% before commercial operation, which began in February, 2016.”
Bokpoort features traditional parabolic trough technology, but it includes full-sized thermal energy storage for power after dark, with more than nine hours of thermal energy storage.
“We have 9.3 hours storage, which makes it possible to run as a continuous operator,” said Bhula. “We have already set a record of 6 days continuous operation and will likely increase this further. We either can run after dark at full load for nine hours or, as we have done, we can drop output to 60% at night and then manage to run through the night.”
Paddy Padmanathan, CEO of ACWA Power, told this writer some years ago that tower, not trough, is where he sees the future of CSP, but for its first CSP project, he decided that trough, with its longer history, would be “more bankable.”
For CSP to compete in the market, both cost and risk must be curbed — cutting cost requires innovation, while reducing risk favors known technology, like trough.
“My personal view is that tower will become probably the technology that develops in much more scale going forward rather than trough,” Padmanathan explained.
“But I don’t necessarily want to eliminate trough from the portfolio, because in our view there is a lot more advancement possible even in trough so you don’t want to write it off. The whole world of composites has yet to be fully explored or discovered. Right now its glass or aluminium but going forward I expect to see more composite materials. The point is there’s a lot of scope for improvement in all the technologies, so its early days to pin your hope on one or the other.”
Bokpoort is a relatively small CSP project at just 50 MW, because South Africa’s REIPPPP (Renewable Energy Independent Power Project Procurement Program) initially limited CSP to 50 MW in Round 1, then allowed up to 100, and now it wants 150 MW.
According to Eskom’s CSP program manager, Vikesh Rajpaul, nine or more hours of storage, like these two plants, are perfect for South Africa’s grid. South Africa’s evening peak is well-known, but there is also a peak in the early morning before sunrise.
CSP is cheaper than gas in South Africa
Between lengthy delays in building coal plants in South Africa, and a high price for gas, Rajpaul says Eskom needs CSP because of the thermal energy storage.
“Gas is completely out of the question, because it is very expensive,” Rajpaul told CleanTechnica. “It may become an option in the future, where we could import it. Although it could have problems here, just like in the US with fracking issues. But, as things stand, gas is more expensive here than any renewable, even CSP.”
(In the US, though gas prices are volatile, the cost is only $2 per mmbtu at this point, whereas in most countries that don’t utilize fracking, it costs about $10.)
Even though CSP is more expensive than PV or wind, Rajpaul said CSP is a cheaper option than gas for keeping the lights on in South Africa at night.
For its second CSP project, ACWA Power is partnering with US-based SolarReserve, which developed and permitted Redstone for the South African market, a 100 MW tower plant with 12 hours of storage for Round 3, due to break ground this summer.
Both SolarReserve and ACWA Power have also just bid into South Africa’s next round of CSP Round 4.5, with winners due to be announced soon. This time, REIPPPP encourages larger CSP plants up to 150 MW. Both are bidding 150 MW tower projects.
The $23 billion Saudi powerhouse ACWA Power is experienced in developing traditional thermal energy. Padmanathan, an engineer by background, was able to bid a very low PPA for Bokpoort for the time (2011). At 12 cents per kWh, it was 28% lower than competing bids.
With its long experience in traditional power plants in Saudi Arabia, ACWA Power was able to build Bokpoort at just $327 million, and complete it in just two years. The back end of a CSP project is identical to any steam-powered electric plant, as only the thermal storage system and the heliostat collector field are different.
“As a utility company – which is what we are – we invest in plants that are very large capital cost, and we recover our money over 20-30 years, so people need to understand that the tariff, whether high or low, is not a profit for immediately today,” Padmanathan said.
“We have consistently delivered these kinds of tariffs, for every bid that we have done from the time we were founded eight years ago. We have bid on fossil fuel plants, gas fired, oil fired, coal fired; every one of them; there’s plenty of public record that shows that we have typically delivered an average 20% tariff difference by adopting this approach.”
In order for prices of novel technologies to drop, projects must get built and PPAs paid out, even when better prices are now possible, because previous projects got built, which allowed prices to drop.
Padmanathan gave a great explanation of some of the issues faced by any new renewable tech in delivering and getting paid over a 20 year PPA, even as subsequent prices keep on getting lower.
“For us to recover all our investment we actually need every dollar to be paid back to us over the twenty years. The reality we need to deal with is that over the next decade (and renewables is the best example) as technology develops, it becomes more efficient, plant costs come down, tariffs bid for those new plants will come down,” he said.
“So the tariff those new plants will be seeking for CSP at that future time will be substantially lower. But those who don’t understand PPAs won’t recognize that a decade earlier we already spent the money on what was then the most competitive plant of the time.
They’ll say: ‘Hey, why are you still paying ACWA Power this crazy tariff with all this new capacity available at half the price?’ and even the most honorable government or off-taker can then only do the sensible thing and see if they can convince the seller to reduce the tariff.”
(Some of the recent fuss over Ivanpah missing its generation target is an example of this problem when you innovate new technology. Ivanpah did not miss substantially as the Wall Street Journal falsely claims; it actually missed its 2015 target by only 3%. )
South Africa has had a dangerously unstable coal-powered grid with blackouts.
Although now several rounds of PV are coming online quickly from the previous rounds of bidding, and soon it will be in a much stronger position for daytime, South Africa’s grid needs nighttime power.
Cheaper than battery storage at utility-scale, and fast-to-build, this thermal energy storage project can supply a peak load at night.
With its speedy two year build, and “top heavy” ratio of generous storage in a relatively modest plant, Bokpoort is perfectly aligned with South Africa’s needs to get clean power online fast, and to cover night time.
Bokpoort trough CSP project: Image Credit ACWA Power