Concentrating solar power for less than USD 0.07 per kWh: finally the breakthrough?

Lilliestam J, Pitz-Paal R (2018)

Publication Type: Journal article

Publication year: 2018

Journal

Renewable Energy Focus Elsevier BV

Book Volume: 26

Pages Range: 17-21

DOI: 10.1016/j.ref.2018.06.002

Abstract

The cheap power purchase agreements (PPAs) for two recent concentrating solar power (CSP) projects in Australia (Aurora) and Dubai (DEWA IV) raise questions of how such low costs can be achieved, and whether this could mark the commercial breakthrough of this technology. Here, we investigate these projects with the information available, and seek reasons for the low PPAs. Both projects have low technology costs – which are prerequisites but insufficient as explanations for the low bids. For Aurora, a key explanation is its business model that allows it to sell power outside the PPA, during high-price times when the sun sets and the growing PV fleet goes offline, revealing the market value of CSP. For DEWA IV, a key factor is its extraordinarily long PPA duration, but we expect that it also has very low financing costs. We conclude that both projects can probably be replicated, either in places with an increasing PV fleet and strong “duck curve” problems (replicating Aurora) or in places with low policy risks and access to cheap capital (replicating DEWA IV); such places could include the US, Southern Europe, or the Gulf region.

Authors with CRIS profile

Johan Lilliestam

Additional Organisation(s)

Lehrstuhl für Sustainability Transition Policy

Involved external institutions

Eidgenössische Technische Hochschule Zürich (ETHZ) / Swiss Federal Institute of Technology in Zurich CH Switzerland (CH) Deutsches Zentrum für Luft- und Raumfahrt e.V. (DLR) / German Aerospace Center DE Germany (DE)

How to cite

APA:

Lilliestam, J., & Pitz-Paal, R. (2018). Concentrating solar power for less than USD 0.07 per kWh: finally the breakthrough? Renewable Energy Focus, 26, 17-21. https://doi.org/10.1016/j.ref.2018.06.002

MLA:

Lilliestam, Johan, and Robert Pitz-Paal. "Concentrating solar power for less than USD 0.07 per kWh: finally the breakthrough?" Renewable Energy Focus 26 (2018): 17-21.

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