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SET-Plan - SOLAR THERMAL ELECTRICITY

EUROPEAN INDUSTRIAL INITIATIVE (STE-EII)

IMPLEMENTATION PLAN 2013-2015

12 December 2013

Approved by the SEII Team

European Solar Thermal Electricity Association

2 Solar Industrial Initiative for STE – Implementation plan 2013-2015

INDEX

INDEX ....................................................................................................................................... 2

GLOSSARY ................................................................................................................................ 4

INTRODUCTION ........................................................................................................................ 6

I – ACHIEVEMENTS IN R&D SINCE THE BEGINNING OF THE SET-PLAN (2007) ........................... 8

1. THE TECHNOLOGY ROADMAP FOR SOLAR THERMAL ELECTRICITY ....................................................... 8

OBJECTIVE 1: REDUCTION OF GENERATION, OPERATION AND MAINTAINANCE COSTS ...................................... 8

OBJECTIVE 2: IMPROVEMENT OF OPERATIONAL FLEXIBILITY AND ENERGY DISPATCHABILITY ............................. 9

OBJECTIVE 3: IMPROVEMENT OF THE ENVIRONMENTAL FOOTPRINT ........................................................... 10

OBJECTIVE 4: ADVANCED CONCEPTS AND DESIGNS .................................................................................. 10

COMMENTS ON ECONOMIC SUPPORT IN THE LAST PERIOD ........................................................................ 10

2. ANALYSIS OF RESOURCES .......................................................................................................... 11

INDUSTRY .......................................................................................................................................... 11

NATIONAL AND REGIONAL PROGRAMMES IN SPAIN ................................................................................. 11

NEIGHBOURHOOD INVESTMENT FACILITY (NIF) ...................................................................................... 12

EUROPEAN INVESTMENT BANK (EIB) .................................................................................................... 13

OTHER EUROPEAN UNION FUNDING SOURCES ....................................................................................... 14

II – PROSPECTS FOR EU INDUSTRY ......................................................................................... 17

1. IN THE EU ............................................................................................................................. 17

THE SITUATION IN SPAIN ..................................................................................................................... 17

THE SITUATION IN ITALY ...................................................................................................................... 18

THE SITUATION IN FRANCE................................................................................................................... 19

THE SITUATION IN OTHER EUROPEAN COUNTRIES .................................................................................... 19

2. OUTSIDE THE EU .................................................................................................................... 20

3. OTHER INITIATIVES .................................................................................................................. 21

III – THE STE EUROPEAN INDUSTRY INITIATIVE ...................................................................... 23

1. R&D PROJECTS ...................................................................................................................... 23

INCREASE EFFICIENCY AND REDUCE COSTS .............................................................................................. 23

INCREASE DISPATCHABILITY .................................................................................................................. 25

IMPROVE THE ENVIRONMENTAL PROFILE ................................................................................................ 26

LARGE TEST FACILITES FOR CONCEPT VIABILITY ........................................................................................ 26

2. INNOVATION IN FUTURE STE PLANTS IN SOUTHERN EUROPE........................................................... 28

3. INNOVATIONS IN FUTURE COMMERCIAL PROJECTS DEVELOPED BY EUROPEAN COMPANIES IN THIRD

COUNTRIES ............................................................................................................................... 31


3 Solar Industrial Initiative for STE – Implementation Plan 2013-2015

IV BUDGET SUMMARY ........................................................................................................... 35

V KEY PERFORMANCE INDICATORS ........................................................................................ 37

VI RELATIONS WITH OTHER INDUSTRIAL INITIATIVES ............................................................ 40

1. THE EUROPEAN ELECTRICITY GRID INITIATIVE (EEGI) ..................................................................... 40

2. THE STORAGE TECHNOLOGY ROADMAP ...................................................................................... 40

3. THE ROADMAP ON TURBOMACHINERY 2014-2020 ...................................................................... 40



GLOSSARY

AFD Agence Française de Développement

CAES Compressed Air Energy Storage

CAPEX Capital Expenditure

CCS Carbon Capture and Storage

CSP Concentrated Solar Power

DII Desertec Industrial Initiative

DNI Direct Normal Irradiation

EASE European Association for the Storage of Energy

EEGI European Electricity Grid Initiative

EERA European Energy Research Alliance

EIB European Investment Bank

EII European Industrial Initiative

ENP European Neighbourhood Policy

ERANET European Research Area Network

ESTELA European Solar Thermal Electricity Association

EU European Union

EUMENA Europe, Middle East, North Africa

HTF Heat Transfer Fluid

FiT Feed-in-Tariff

FP6 6th

Framework Programme

FP7 7th

Framework Programme

GW Gigawatt

HVDC High Voltage Direct Current

ISCC Integrated Solar Combined-Cycle

KfW Kreditanstalt für Wiederaufbau

KPI Key Performance Indicator

kWh Kilowatt per hour

LCOE Levelised Cost Of Electricity

MENA Middle East and North Africa

MoU Memorandum of Understanding

MSP Mediterranean Solar Plan



MW Megawatt

MWe Megawatt of electricity

NER300 New Entrant Reserve 300

NIF Neighbourhood Investment Facility

OPEX Operating Expenditure

PPA Power Purchase Agreement

R&D Research and Development

RES Renewable Energy Sources

SEII Solar European Industrial Initiative

SET-Plan Strategic Energy Technology Plan

SRA Strategic Research Agenda

STE Solar Thermal Electricity

TSO Transmission System Operator

UfM Union for the Mediterranean



INTRODUCTION

In this document, a new version of the Implementation Plan of the Solar Thermal Electricity European

Industrial Initiative (STE-EII) is presented. Information on solar thermal electricity plants development in

the last few years and updates on the achievements of the objectives described in the previous

implementation plan covering the period 2010-2012 are provided as well.

The former version of this document, covering the period 2010-2012, was mainly based on the current

supporting Feed-in-Tariff (FiT) framework in Spain which resulted in more than 2,000 MW installed

representing a 70% share of the total power installed at world level.

In this sense, innovation was classified according to the type of plants, such as plants already in

operation or plants with FiT approved but in construction or promotion phase. Additionally, new

projects with ambitious objectives related to a wide deployment of STE in the MENA region were also

considered.

The budget for this innovative effort was assessed to 7,000 M€. The STE industry was expecting at that

time new financial mechanisms which would have been established as a contribution of the SET-Plan in

terms of grants, soft loans and risk sharing.

Even though the projects planned in the MENA region began to be promoted more slowly than

predicted and that the SET-Plan did not provide any new support mechanism to the industry during this

period, European companies and research centres kept on contributing to STE technological

development, with incremental improvements, benefiting essentially on the ongoing programmes in

Spain to reach the 2,300 MW of STE installed capacity by 2013, together with smaller initiatives in other

countries.

Nevertheless, the situation has drastically changed in Spain since the beginning of 2012, when the

moratorium on supports to renewable electricity generation plants has been decreed. This moratorium

includes solar thermal electricity, cutting the short term expectations on a continuous STE development

in Europe, as Spain was supposed to be the main contributor of STE power according to the National

Renewable Energy Action Plans (NREAP).

Additionally, the approval of projects with FiT in Spain was given in 2009 for projects designed in 2007

and planned to enter in operation until 2013. This unusual regulation framework did not facilitate the

progress along the cost learning curve as significant innovations could not be incorporated during this

period. Thus, only incremental innovations have been implemented in the commercial parabolic trough

plants with thermal oil, which was the selected concept in 95% of the cases as banks prefer proven

projects. Nevertheless, the first conceptually different plants, such as towers with molten salt receivers,

linear Fresnel reflectors with direct steam generation or parabolic troughs using molten salt as heat

transfer fluid, have been built.

For these reasons, the STE-EII needs a complete revision, which is the objective of this document.



The fundamental guidelines for the European Solar Thermal Electricity Implementation Plan are:

1. R&D projects in line with the priorities defined in the Strategic Research Agenda (SRA);

2. Innovations in future STE plants in southern Europe within the framework of green electricity

exchanges between Member States foreseen by the Directive 2009/28/EC on Renewable Energy

Sources. Other initiatives under purely national supporting frameworks will be considered as well;

3. Innovations in future commercial plants developed by European companies in third countries with

which the EU maintains cooperation agreements.

This document is based on these three points, with the confidence that the SET-Plan will be able to bring

new financial supporting tools and institutional endorsement to make it possible.

Puerto Errado 1 plant, Linear Fresnel Technology, Murcia, Spain (NOVATEC)



I – ACHIEVEMENTS IN R&D SINCE THE BEGINNING OF THE SET-

PLAN (2007)

1. The Technology Roadmap for Solar Thermal Electricity

The Technology Roadmap1 elaborated in 2009 dedicates a chapter on the EII for Solar Thermal

Electricity. This chapter defined the actions to be undertaken for each of the four objectives listed

below. An analysis of the achievements of these objectives is done here:

OBJECTIVE 1: REDUCTION OF GENERATION, OPERATION AND MAINTAINANCE

COSTS

Topics Achievements

1.1 Development and test of new components with

increased efficiency and reliability (high temperature

joints, new collector designs, improved absorber tubes,

new reflector solutions, improve pumps and valves,

improved the power block and instrumentation)

Incremental improvements in all these

identified elements have been achieved so

far.

1.2 Decrease the heat losses in the receiver New coatings and absorber designs have

been developed.

1.3 Reduction of optical losses by increased mirror

reflectivity and improved receiver absorption

Both mirror reflectivity and absortivity have

been slightly increased.

1.4 More efficient cycles and receivers:

– high efficiency air receivers

– high pressure, high efficiency steam receivers

Improvements on steam turbines have been

implemented. Molten salt receivers have

been developed and research in steam and

air receivers is going on.

1.5 Operation with heat transfer fluids at higher

temperatures

This has been achieved in STE tower plants

and in the Archimede molten salt parabolic

trough plant.

1.6 Development and testing of new, more economic

components i.e. high temperature joints, absorber

tubes, new reflector solutions and collector design,

pumps and power blocks, as well as heat transfer fluids

Important reductions on component costs

have been achieved as the result of new

designs and scale factors.

1 SEC(2009) 1295 of 7 October 2009, Commission Staff Working Document, accompanying document to

the Communication on ‘Investing in the Development of Low Carbon Technologies (SET-Plan)’ - A

Technology Roadmap.



1.7 Identification, development and assessment of

alternative heat transfer fluids with lower costs, low

environmental impact and a wide operation range

Research on substitution of thermal oil by

salt, steam or gas is going on. New

stoichiometries for molten salts are being

studied.

1.8 Optimize and improve the monitoring and

communication technologies for the control, operation

and maintenance of STE power plants, as well as

developing operation strategies and prediction tools to

better facilitate grid integration.

Companies did a great effort on forecasting

and improvement of control systems to

optimize the operation with good results.

OBJECTIVE 2: IMPROVEMENT OF OPERATIONAL FLEXIBILITY AND ENERGY

DISPATCHABILITY

Topics Achievements

2.1 New and improved concepts and materials for heat

energy storage and heat transfer systems will be

developed and tested (transfer fluids, filler materials,

change of phase systems, molten salts, ultra

capacitors, etc.) and implemented in large-scale

demonstration plants

The molten salt two-tank concept has

demonstrated total reliability. Other concepts

like single tank with integrated heat exchanger

or phase change concepts are in prototype

phase.

2.2 New process design and operating modes No significant achievements in this respect

2.3 Hybridisation of solar energy with other renewable

energy sources (mostly biomass)

One large commercial plant is already in

operation. The first 22 MW commercial plant

50% solar/50% biomass was connected to the

grid in the province of Lerida (Spain) in

December 2012 (see picture below).

2.4 Development of control systems for monitoring

the consumption curves

Great attention is being paid to reduction of

auxiliary consumptions.

Borges Termosolar plant, biomass unit, Lleida, Spain (ABANTIA)



OBJECTIVE 3: IMPROVEMENT OF THE ENVIRONMENTAL FOOTPRINT

Topics Achievements

3.1 New approaches to reduce water

consumption, e.g. through innovative use of an

organic Rankine cycle coupled with conventional

steam cycle

No new conceptual approaches to reduced water

consumption have been implemented. All efforts

are focused on alternative cooling systems.

3.2 Develop and demonstrate dry cooling systems Some commercial plants have already used dry

cooling systems.

3.3 Develop and demonstrate STE-specific

sustainable water desalination and purification

processes

The MATS project (desalination unit coupled with

a STE pilot plant) can be mentioned in this regard.

3.4 Integration of low-polluting materials The focus is on the substitution of the classic HTF

oil in parabolic trough plants. Molten salts, Direct

Steam Generation and compressed gasses can be

mentioned in this regard.

3.5 Better utilisation of available land through

new design strategies

Some advances have been achieved in the design

of more compact heliostat fields by disregarding

the staggered configuration in the rows close to

the tower.

OBJECTIVE 4: ADVANCED CONCEPTS AND DESIGNS

A longer term R&D programme aimed at supporting

the longer term STE industry development (beyond

2020) will focus on advanced concepts and systems,

as well as innovative approaches to the critical

major components

The Strategic Research Agenda (SRA) of ESTELA

is the first attempt to achieve this goal. The

contribution to the Horizon 2020 programme

will be highly appreciated.

COMMENTS ON ECONOMIC SUPPORT IN THE LAST PERIOD

Regarding investments in innovation, the previous version of the STE-SEII was elaborated relying on the

implementation of new financing mechanisms (grants, soft loans and risk sharing mechanisms) under

the umbrella of the SET-Plan.

As this has not been the case, it is not possible to compare with the investment figures of the previous

version of the STE-EII document.

The total investment for the construction of the 50 STE plants in Spain was close to 14,000 M€ in the

period 2009-2013. The financial effort for innovation during this period has been mainly provided by the

companies to perform incremental improvements on the 50 commercial plants constructed in Spain.

The total cost of this effort can be estimated to be 500 M€.



In addition, companies and research centres have jointly or independently carried out R&D projects

under the umbrella of Regional, National or European frameworks. A roughly estimation of this effort

would be 1,000 M€.

2. Analysis of resources

INDUSTRY

During the last three years, many efforts coming from private investors have led the STE sector in Spain

and Germany to take off and brought to the commercial playground the numerous plants currently

connected to the grid. These private resources triggered the expansion of the market and allowed the

setup of innovative plants, such as the advanced configuration of Gemasolar or PS10 for instance.

Unluckily, governmental measures went on and dealt a severe blow to the sector.

NATIONAL AND REGIONAL PROGRAMMES IN SPAIN2

NATIONAL:

The Renewable Energy Plan:

The Renewable Energy Plan (PER) 2011-2020 sets out a series of proposals aiming to boost the RES

sector in Spain. Among them are the establishment of supportive legal frameworks, the development of

energy infrastructures and actions for planning, promotion, information and training. From a

technological point of view, components manufacturing, improvement of storage systems and

hybridisation with other technologies allowing a reduction of costs and a secure penetration of the solar

thermal sector in the electric system are the main keys. The document imposes the objective of

reaching 2,521 MW of STE installed capacity in 2013 and 4,800 MW in 2020.

The National Plan for Scientific Research, Development and Technological Innovation 2013-2016:

This is a tool used by the Spanish system related to Science, Technology and Industry to comply with the

objectives and priorities of the Spanish R&D policy in the mid-term. It introduces the basic principles for

R&D actions - putting all R&D activities available to citizens, improving industrial competitiveness and

promoting R&D - as a basis for generating knowledge. In relation to energy, the objective is to develop a

sustainable system supplied with indigenous resources.

Call for Innovative Projects from the Ministry of Industry, Trade and Tourism:

In 2010, the Spanish Ministry published a call for innovative STE projects. The plants belonging to the

approved projects should begin to put electricity into the grid between January 2014 and July 2015.

2 Identificación de las principales líneas de investigación en el sector de la electricidad termosolar,

Plataforma Tecnológica de la Energía Solar Térmica de Concentración, Solar Concentra, 2012



Among the proposals for big scale plants, the 50 MW plant Alcázar, presented by Solar Reserve (United

States) and Preneal (Spain) has been approved. To date, no small installation has been retained.

REGIONAL:

In Andalusia, a programme for promoting industrial innovation and development has been launched.

This incentive is financed by the ‘Global Subvention Innovation-Technology-Industry’ of Andalusia 2007-

2013, co-financed by the European Regional Development Fund (ERDF) and incorporated in the ERDF

operative programme of Andalusia 2007-2013, ending on 31 December 2013.

NEIGHBOURHOOD INVESTMENT FACILITY (NIF)3

Officially launched in May 2008 and implemented by the Europe Aid Development and Cooperation

Directorate-General of the European Commission, the Neighbourhood Investment Facility (NIF) is an

innovative financial instrument of the European Neighbourhood Policy (ENP), whose primary objective is

to finance with a mix of grants and loans key infrastructure projects in the transport, energy, social and

environment sectors, as well as to support private sector development in the Neighbourhood Region.

The NIF is aimed at creating a ‘partnership’, pooling together grant resources from the EU Budget and

the EU Member States and using them to leverage loans from European Finance Institutions as well as

own contributions from the ENP partner countries. Accordingly, to receive a grant contribution from the

NIF, a project must be financed by an eligible European Finance Institution.

3 Taken from the Operational Annual Report 2011 on the Neighbourhood Investment Facility, European

Commission (http://ec.europa.eu/europeaid/where/neighbourhood/regional-

cooperation/irc/documents/annual_report_2011_nif_en.pdf)

Virtual aerial view for the Ouarzazate

Solar Complex, Morocco (ACWA

POWER)

Credits: MASEN



The first phase of the Ouarzazate Solar Plant in Morocco will benefit from this programme:

This project is the first phase of the Moroccan Solar Plan launched in November 2009 with the objective

to develop solar power generation and related local industry with a target capacity of a minimum of

2,000MW to be installed by 2020. This initial project concerns the development of a 500 MW solar

power complex (both STE and PV) located approximately 10 km Northeast of Ouarzazate. The NIF (grant

of 30 M€), together with loans from EIB (loan of 100 M€), AFD (loan of 100 M€) and KfW (loan of 115

M€), co-finances the initial investments aiming at building a STE plant with a production capacity

between 125 and 160 MW using parabolic trough technology. This is the largest energy project

(estimated total cost of about €630 million4) so far co-financed by the NIF in the Southern

Neighbourhood. It is fully in line with the NIF strategic objectives and falls within the Mediterranean

Solar Plan.

The tender of the project has been awarded to a Consortium led by the Saudi company ACWA Power

with a minor participation of the Spanish companies Aries and TSK. The Engineering Procurement

Construction (EPC) of the plant is carried out by ACCIONA, SENER and TSK, a consortium of Spanish

companies.

EUROPEAN INVESTMENT BANK (EIB)

The EIB provided loans for the following projects:

Before 2012: After 2012:

- Andasol I and II (2 x 50 MW), Spain: 230 M€ - Ouarzazate I (Parabolic Trough): Morocco: 100 M€5

- PS10 – PS20 (11 and 20 MW), Spain: 80 M€ - Khi Solar One Project (Central Receiver) , South Africa: 50 M€

- Solnova I and III (2 x 50 MW), Spain: 110 M€

- Gemasolar (17 MW), Spain: 90 M€

- Ashalim Solar Thermal Plant (Central Receiver), Israel: 150 M$ -

currently under appraisal

4 http://phys.org/news/2013-05-morocco-solar-mega-project-ouarzazate.html

5 See chapter ‘Neighbourhood Investment Facility (NIF)’

SOLUGAS central receiver in operation, Sevilla, Spain

(ABENGOA)



OTHER EUROPEAN UNION FUNDING SOURCES

NER300

The NER300 funding programme was adopted with Commission Decision C(2010)7499 for the financing

of commercial CCS and innovative renewable energy technologies demonstration projects, under the

scheme for greenhouse gas emission allowance trading established by the Directive 2003/87/EC.

The NER300 programme has selected four STE projects:

- HELIOS POWER (Parabolic Dishes), Cyprus

- MAXIMUS (Parabolic Dishes), Greece

- MINOS (Central Receiver), Greece

- PTC50-Alvarado (Central Receiver), Spain

However, most likely the Spanish project (50 MW hybrid tower plant, with molten salt and biomass

hybridisation) will not be constructed as the FiT system is not in place anymore. The other projects still

need to reach financial closings which might be not so easy under the current circumstances in these

countries.

R&D projects:

� Ongoing in FP7

- BIOSTIRLING-4SKA (A cost effective and efficient approach for a new generation of solar dish Stirling

plants based on storage and hybridisation)

- COMETHY (Compact Multifuel-Energy To Hydrogen converter)

- CSP2 (Concentrated solar power in particles)

- HITECO (New solar collector concept for high temperature operation in CSP applications)

- HYSOL (Innovative configuration for a fully renewable hybrid CSP plant)

- MACCSOL (The development and verification of a novel modular air cooled condenser for enhanced

concentrated solar power generation)

- OMSOP (Optimised Microturbine Solar Power system)

- OPTS (Optimisation of a thermal energy storage system with integrated steam generator)

- RESTRUCTURE (Redox materials based structured reactors/heat exchangers for thermo-chemical heat

storage systems in CSP plants)

- SOL2HY2 (Solar To Hydrogen Hybrid Cycles)

- STORRE (High temperature thermal energy storage by reversible thermochemical reaction)

- TCSPOWER (Thermochemical energy storage for CSP plants)



� Past projects in FP7

- E2PHEST2US (Enhanced energy production of heat and electricity by a combined solar thermionic-

thermoelectric unit system)

- MED-CSD (Combined solar power and desalination plants: technico-economic potential in

Mediterranean partner countries)

� Past projects in FP6

- DISTOR (Energy Storage for Direct Steam Solar Power Plants)

- ECOSTAR (European Concentrated Solar Thermal Road-Mapping)

- EURODISH (Reducing the cost of dish Stirling systems)

- HYDROSOL II (Solar Hydrogen via Water-Splitting in Advanced Monolithic Reactors for Future Solar

Power Plants)

- SOLFACE (High Flux SOLar FACilities for Europe)

- SOLHYCARB (Hydrogen from solar thermal energy: high temperature solar chemical reactor for co-

production of hydrogen and carbon black from natural gas cracking)

- SOLHYCO (Solar-Hybrid Power and Cogeneration Plants)

- SOLREF (Solar Steam Reforming of Methane Rich Gas for Synthesis Gas Production)

Demonstration projects:

� Ongoing in FP7

- ARCHETYPE SW550 (Demonstration of innovating parabolic solar trough using an alternative heat

transfer fluid producing electricity and fresh water: ARChimede Hot Energy TYPology Enhanced Water

Solar 550)

- MATS (Combined production of heat and power from solar source, in a modular, multipurpose facility

to deploy in Egypt)

- SOLUGAS (Solar-hybrid power system with direct solar heating of a gas turbine pressurized air)

� Past projects

Andasol

PS10

Solar Tres

Additional projects:

- SOLAR-ERA.NET: this is an FP7 tool to step up the coordination between national and/or regional

research programmes. The first call has been initiated; priority topics are in line with the SEII objectives,

covering both STE and photovoltaic technologies.

- The Integrated Research Programme (IRP): this is an FP7 tool that brings together programmes of a

critical mass of research performers from different countries to advance the longer term research

agenda of the SET-Plan. The IRP allows performers of research programmes to develop synergies and

complementary capabilities and to increase the potential for innovation. STAGE-STE is a STE-related IRP

due to start on 1 February 2014. ESTELA is a partner of the project.



- The ‘Solar Facilities for the European Research Area’ (SFERA) is a project of the European Commission

within the frame of the FP7. It aims to boost scientific collaboration among the leading European

research institutions in solar concentrating systems, financing networking activities, allowing any STE

player (including industry) to benefit from R&D infrastructures through yearly access. Summer trainings

on technical topics are also organized every year. The second round ‘SFERA II’ begins in January 2014

and will last 4 years.

- The European Strategy Forum on Research Infrastructure (ESFRI): this is a strategic instrument to

develop the scientific integration of Europe and to strengthen its international outreach. The EU-

SOLARIS project (the European Research Infrastructure for Concentrated Solar Power) began its running

phase in the end of 2012 and will last 4 years. ESTELA is a partner of the project and is responsible for

the part related to the industry.

- RES4LESS (Cost-efficient and sustainable deployment of renewable energy sources towards the EU 20%

target by 2020, and beyond) and BETTER (Bringing Europe and Third countries closer together through

renewable Energies) started in 2011 and 2012 respectively under the European Union’s Intelligent

Energy Europe Programme and are sponsored by the Executive Agency for Competitiveness and

Innovation (EACI). They aim to develop a Roadmap to a cost effective deployment of RES in the period

up to 2020 and 2030 by making use of cross-border cooperation mechanisms, as described in the

Renewable Energy Directive.

Gemasolar plant: Central Receiver Technology, Sevilla, Spain (TORRESOL)



II – PROSPECTS FOR EU INDUSTRY

1. In the EU

In Europe, compulsory RES targets have been established in 2010 through the National Renewable

Energy Action Plans (NREAPs) for 2020. The plans include the use of STE for the sunniest European

countries. The initial total amount of STE installed capacity was estimated at 7,000 MW, but the current

economic situation and the indicative trends have prompted some countries to revise their estimates.

An indicative description of the targets is shown in the map below.

Nevertheless, implementing “statistical transfers” among Member States as these are considered in the

RES directive would allow for achieving higher figures.

Map of planned STE capacity in European countries by 2020

THE SITUATION IN SPAIN

The Spanish market is the leader in Europe: today, 45 plants are connected to the grid and 5 more will

be completed in 2013. Especially, half of them have installed a storage system. The projects have been

approved in 2009 with the FiT applicable at that moment, although their construction and operation

were scheduled by the Spanish Ministry over a four-year period. This is the reason why STE plants in

Spain could not experience any learning curve, keeping the retribution prices for the 50 Spanish plants

stable since 2009 (around 30 c€/kWh). Those costs still correspond to old projects with components

purchased many years ago, with low relative irradiation and with a plant size much smaller than the

ideal size. It is, thus, not possible to consider this cost as representative of the real cost of solar thermal

electricity for new projects, be they in Spain or elsewhere.

The Spanish government has recently established a set of retroactive measures implying 1/3 reduction

of incomes, making it difficult for the plants to reimburse their debts to the banks. These legal measures

have been preventing the possibility to dedicate resources to innovation and to the internationalisation



of STE Spanish companies. Because of this, the leading position held by European companies in the

sector until now may be lost in a very short period of time.

Those actions from the Spanish government have been put into question by the EU but with no practical

effect. The claims from the EU brought to the Permanent Court of Arbitration will last a few more years

before getting to conclusions. Not only will this lead to putting the STE sector at risk in Spain, but this

will also give a bad reference that could contaminate other European countries and cause a huge

prejudice in the accomplishment of the objectives of the Renewable Energy Directive.

THE SITUATION IN ITALY

In Sicily, an innovative project (Archimede plant) was built. This is a parabolic trough plant, which uses

molten salts as heat transfer fluid to generate steam subsequently injected in an existing combined

cycle power station. The plant has a molten salts thermal storage of eight hours and the equivalent

power of this facility is 5 MWe.

Additionally, the Italian government revised the old FiT regulation and replaced it with a more attractive

one, with incentives available up to a maximum of 2.5 million m2 of reflective surface. This Decree dated

July 2012 sets the FiT value between 27 and 32 c€/kWh for large plants (> 2,500 m2 aperture) and

between 30 and 36 c€/kWh for smaller plants (< 2,500 m2 aperture). This support will be reduced by 5%

in 2015 and by another 5% of the last value in 2016. Some conditions are imposed on the heat transfer

fluid and on the thermal storage size. This new incentive allows the hope for the development of a

sufficient number of projects in the coming years in order to reach approximately 200 MW of installed

capacity.

Archimede plant: Parabolic Trough Technology, Sicily, Italy (ENEL)



THE SITUATION IN FRANCE

In France, there is no FiT system for STE. The projects are processed through invitation to tenders. At the

moment, two plants have been approved and are on their way for construction:

- Alba Nova 1 is a 12 MW STE plant promoted by the company ‘Solar Euromed’. This plant is situated in

Corsica Island and relies on the linear Fresnel reflectors technology, combining direct steam generation

and thermal storage. ‘Akuo Energy’, an independent renewable energy developer, and the French

Deposit and Consignment Office are partners and bring a financial support to the project. A guaranteed

tariff for its solar energy production has been awarded for 20 years.

- Another 9 MW plant also based on the Fresnel technology with a thermal storage will be built in Llo

(Pyrénées-Orientales) and operated by the company ‘CNIM’ for a period of 20 years. This solar power

plant, on a twenty-hectare site, is the industrial scale roll-out of a pilot plant that has been operating

continuously for the last two years known as the e-Care pre-industrial demonstrator. The French

Deposit and Consignment Office is a partner in this project.

THE SITUATION IN OTHER EUROPEAN COUNTRIES

Globally, the economic crisis has a large negative impact. In Cyprus, the FiT value for STE is 26 c€/kWh;

in Greece, it is 26,5 c€/kWh without thermal storage and 28,5 c€/kWh with more than 2 hours thermal

storage. Portugal is reviewing its support system and is planning small pilot facilities.



2. Outside the EU

THE UNITED STATES

The first commercial plants in the Mojave Desert, the SEGS plants, with 350 MW are in continuous

operation since middle 80’s. These plants played a very important role in convincing the financial

institutions on the reliability of STE technology making possible the deployment in Spain. In addition,

there are some more recent plants, such as the 60 MW Nevada Solar 1 and the ISCC in Florida with a

solar field of 75 MWe equivalent.

Five STE projects are currently under construction in the southwest of the United States. After

completion, they will have a capacity of over 1,300 MW, a significant increase over the approximately

500 MW now operating.

Some other projects (for a total installed capacity close to 1,000 MW) have been announced as well,

including the corresponding PPA contracts with some utilities.

Nevada Solar One: Parabolic Trough Technology, United States (ACCIONA)

Crescent Dunes Solar Energy: Solar Tower Technology, United States (SOLARRESERVE, COBRA)



EMERGING COUNTRIES

Other countries are emerging and taking initiatives to develop STE through the implementation of

national plans:

- Morocco implemented its 2 GW Solar Plan, with a first plant awarded and the others being under

preparation;

- Saudi Arabia aims at 25 GW by 2032. The first 900 MW tender is expected along 2013;

- Algeria intends to generate 40% of its energy from renewable sources by 2030;

- In Jordan the first STE projects have been qualified, although the FiT needs to be fine-tuned to

eventually build the projects;

- Qatar targets 2 GW of solar installations by 2020, including a 60% share of STE;

- South Africa aims at installing 200 MW of solar power by 2015 and 1.2 GW by 2030;

- Chile uses STE for extraction and production processes in copper mines; a plant to supply base load

to the mining industry in the North of Chile has been tendered with a grant from the Chilean

Government;

- India, through its National Solar Mission, aims to fulfil 8 GW of solar power by 2020;

- China has already 200 MW in its current pipeline and aims at 3 GW by 2020 in the framework of its

12th Five Year Plan;

- Australia initiated the first phase of its Solar Flagship Programme, targeting 250 MW of solar power

connected to the grid by 2015.

3. Other initiatives

THE MEDITERRANEAN SOLAR PLAN

The Mediterranean Solar Plan (MSP) is a flagship of the Union for the Mediterranean (UfM) initiative. It

has two goals: developing 20 GW of new renewable energy production capacities and achieving

significant energy savings around the Mediterranean by 2020, thus addressing both supply and demand.

The MSP is supported by the European Commission, who launched the technical assistance project

‘Paving the Way for the Mediterranean Solar Plan’ in 2010. Many actors are involved in this process:

MoUs were signed by the Desertec Industry Initiative and Medgrid in 2011 and by the Mediterranean

Transmission System Operators (TSO) in 2012 to foster the integration of a regional electricity market in

the long term.

A MSP Master Plan draft is currently being debated by a Joint Committee of National Experts, after

many discussions between all stakeholders (Member States, European Commission, League of Arab

States, Financial institutions, Industry, Regional and Sub-regional Platforms, etc.). The Master Plan deals

with the following key issues: developing enabling policy and regulatory frameworks; strengthening

financial support tools; upgrading transmission infrastructure systems; supporting industrial

development and job creation; enhancing capacity development and know-how transfer.

The first phase of the Ouarzazate Solar Power Plant, supported by the Neighbourhood Investment

Facility (NIF) is in line with the MSP.

In 2011, ESTELA expressed its views within the 1st

session of the MSP Technical Working Group on

Financial Issues, led by the UfM, suggesting solutions to overcome the financial gap for STE.



Nevertheless - as explained in the following sections - it is more likely that the new projects in the MENA

region will be mainly developed under the umbrella of national programs with the support of

multilateral development banks. These projects will primarily aim to supply the increasing needs of

dispatchable electricity for domestic consumption. Therefore the MSP should be revisited to reinforce

its instrumental role in this evolving scenario.



III – THE STE EUROPEAN INDUSTRY INITIATIVE

On 2 May 2013, the European Commission published the Communication on Energy Technologies and

Innovation6. This Communication underlines the importance of the SET-Plan and its Industrial Initiatives

to “reduce costs rapidly and speed up the introduction of new technologies into the market”. The

innovation strategy is put forward, bridging the gap between research through the support of the

European Energy Research Alliance (EERA) and market through the European Industrial Initiatives (EII).

The Communication states that large scale efforts in innovation should be made through regulation and

financing, and should create an investment climate conducive to more innovation investment. ESTELA’s

research strategy7 is on track with those statements, as demonstrated in the three following action

points:

1. R&D Projects8

INCREASE EFFICIENCY AND REDUCE COSTS

The different targets to reach the objective ‘Improve efficiency and reduce costs’ are listed below for

each technology. However, cross-cutting issues exist between the different technologies and need to be

taken into consideration. Specific issues concerned with small-medium plants (installed capacity < 10

MW) shall also be considered. Cost reduction in terms of civil works, and durability of components

should be addressed. The transversal research topics to be investigated are:

6 Communication on Energy Technologies and Innovation COM(2013) 253 final, Brussels, 2.5.2013

7 Strategic Research Agenda 2020-2025 for Solar Thermal Electricity, ESTELA, December 2012

8 This chapter is extracted from the Strategic Research Agenda on Solar Thermal Electricity 2020-2025,

ESTELA, December 2012



Research topics for each typical technology plant are listed below



INCREASE DISPATCHABILITY

Dispatchability is one of the characteristics making STE a favoured option among other renewable

resources. Therefore, “Improving dispatchability” is an essential objective for STE development.

Although many plants are already built with a storage system, more efforts are needed to be done.

� Integration systems:

The integration of solar heat in large steam plants can be achieved through the water preheating line

or through the boiler steam/water circuit. In the first case, an appropriate boiler design is required to

deal with temperature differences. If the integration is done with the boiler, an improvement of its

design and control system is needed.

The integration of solar heat with gas turbine or combined cycle plants is also an option. With a gas

turbine, the temperature of the air can be increased in high temperature solar collectors, leading to high

conversion efficiencies. The ability to handle transient phases requires an improvement of the design of

the control system.

The integration of solar heat with biomass, more appropriate for small sized facilities, is a good

combination for an all-renewable fuelled plant. Although the combustion of biomass is not easy, it is

possible to use organic fluid thermodynamic cycles (ORC), which simplify operation while increasing the

overall efficiency.

� Hybrid systems:

Integration with bio-conventional fuels in large plants avoids the logistic problems of the biomass.

Integration in a plant with a well balance relation between sun and the alternative fuel to achieve

flexible firm generation can be a solution to provide firmness in the system.

� Storage:

Depending on the HTF (Heat Transfer Fluid), different designs can be set up:

If the HTF is thermal oil and the capacity of the thermal storage system small, a single storage tank with

good temperature stratification instead of a two tank configuration can greatly simplify storage. A single

tank can also be optimised by a solid separation between the heat exchanger and the storage material.

If the HTF is molten salts, no exchanger is needed between the solar field and the storage circuit. New

salt mixtures with lower freezing point and which avoid corrosion problems are the research and

development goals for this topic. Molten Salts must be qualified to be compatible with the Solar field

components (e.g. receiver tubes). Optimized operation strategies including anti-freezing measures and

emergency draining concepts etc. must be developed and validated on system level.

If the HTF is steam, no exchanger is needed before the power block. Solid/liquid phase change materials

applied for saturated steam are to be investigated.

If the HTF is gas, very high temperature applications are feasible. The challenges are how to design

effective heat transfer systems and to find suitable storage materials.

In general, improved strategies for charging and discharging thermal heat are necessary to

maximise storage capacity. Concepts for thermo-chemical energy storage systems are also to be

investigated.



� Improve forecasting:

Many solutions can be envisioned, such as elaborating a very short term forecast for variable sky

conditions, developing electricity forecasting systems to regulate and manage electricity production,

improving ground based DNI measurements, using meteorological satellite results, and improving

numerical weather prediction models for DNI forecasting, analysing its inter-annual variability and the

time and space correlation between solar and wind energy sources.

IMPROVE THE ENVIRONMENTAL PROFILE

Heat transfer fluids are of concern because of their potential impact on the environment: the pollution

from synthetic oil is one of the most common concerns. The environmental and economic parameters of

different fluids have been studied.

Heat transfer fluids versus technical, environmental and economic characteristics

Desalination is a very interesting application of solar thermal energy. Despite the drawbacks related to

the requirements for finding a site, desalination presents significant technical and economic advantages.

There are several technical solutions, such as multi-effect distillation, reverse osmosis, humidification-

dehumidification process and membrane distillation. The desalination system can also be the cooler

part of the conventional power block. Thus, the optimisation of the integrated or combined cooling

process needs to be considered as a research topic.

Reduction of water consumption (for the cooling system mainly, and also for mirror washing) should be

addressed.

LARGE TEST FACILITES FOR CONCEPT VIABILITY

In addition to the R&D lines mentioned above, support for the construction and operation of large test

facilities for high-efficiency STE systems should be considered. The definition of the most useful facilities

should be done in collaboration with EU-SOLARIS, because this project has a specific activity to identify

the new test facilities required by the STE sector.

Just as an example, we could refer to molten salt technology which can only be validated at system level

(e.g. operation concepts, protection against freezing, emergency draining). The introduction of molten



salt technology directly into a first-of-its-kind parabolic trough commercial plant is hampered by the

present difficult financing conditions (investors and banks are rather risk averse). A system-scale proof is

required to reduce the risk factors for the financing of this technology.

Budget

The estimated budget and public support for the period 2013 – 2015 are given below9:

Investments Grants

Increase efficiency and reduce costs 100 M€ 60 M€

Increase dispatchability 80 M€ 40 M€

Improve environmental profile 20 M€ 10 M€

Large test facilities for concept viability 50 M€ 10 M€

TOTAL 250 M€ 120 M€

A significant part of these projects corresponds to component development, prototypes or small scale

demonstration projects. For these activities, grants will be the preferable type of support.

The support to these specific lines would be under the framework of the ‘Horizon 2020’ programme.

9 The definition of ‘Investment’ and ‘Grants’ can be found in the chapter “Budget Summary”.



2. Innovation in Future STE Plants in Southern Europe

The Communication of the European Commission on Energy Technologies and Innovation states that the

potential of solar energy should be further exploited in cooperation with the Mediterranean Partner

Countries.

The excellent seasonal complementarity of wind resources in the North Sea and solar resources in the

South of Europe could draw a scenario in which the entire EU could be supplied at a large extent by

these two energy sources at competitive prices in the future:

A combination of off-shore wind, mainly along the coasts of the UK, The Netherlands, Germany and

Denmark, together with photovoltaic and STE plants in Portugal, Spain, Italy and Greece, would be the

foundation of the solution for providing zero-emission carbon-free electricity generation in the EU by

2050. This concept would be complemented with biomass and hydraulic energy, with a bigger

proportion in Northern countries but also in Central Europe.

This has been foreseen in the European Directive on Renewable Energy Resources, i.e. in Article 6

“Statistical Transfers”, in article 7 “Joint Projects” and in article 11 “Joint Support Schemes”.

To achieve those goals, the strengthening of interconnections between countries and the creation of

long-distance high-capacity routes that constitute the Supergrid are essential requirements. They would

guarantee electric stability all over Europe and ensure costs reduction by the incorporation of

renewable energy for generating electricity. The technology of HVDC submarine cables could allow a

faster installation of major transport lines, avoiding lengthy administrative processes for deploying land

lines.

In addition, the national management of the TSOs and the current schemes of the electric market, which

allocate the current transmission capacity on spot basis, need to be changed. A capacity reserve for

electricity exports from STE plants is absolutely necessary in order to take the decision to build the joint

projects. If a STE plant was to be built in Spain to transfer its production to Germany, it would be

necessary to secure the transmission capacity for the whole duration period of the PPA.



The strategic vision of the STE-EII has to be included in the SET-Plan that should support the first STE

projects of this ambitious scheme and give the institutional support to accelerate the construction of the

Supergrid, facilitating long-term capacity reserves of STE plants in the south of Europe exporting their

production to central and northern European countries.

Projects of this type would be a good example of the recommended integrated approach on the Horizon

2020 programme. They will include not only the two countries where the electricity is generated and

consumed but the other countries in between allowing for a proper transmission. The number and type

of agents will cover the whole value chain from innovation suppliers, plant constructors and promoters

to TSOs and offtakers. The institutional support at country and European levels along with the European

Network of Transmission System Operators for Electricity will be an essential part of the project as well.

Once the first project is launched, the barriers are removed and the viability is demonstrated, the

replication effect will follow automatically.

In this action line, projects would primarily aim to achieve the following objectives:

- Increase efficiency and reduce costs

- Increase dispatchability

The preferred support mechanisms would be in this case soft loans and risk sharing.

ESTELA is ready to work with the European Commission so that a first project of this kind could be

launched before the end of 2014.

After 2014, at least one project per year could be launched. It should incorporate innovations in terms

of increased efficiency, cost reduction and increased dispatchability. The projects would have an

optimum commercial size in the range from 150 to 200 MW.

Increasing the grid network for solar thermal electricity



Budget

The estimated budget and public support for the period 2013 – 2015 is given below10

:

Investments Soft Loans Risk Sharing Grant

Increase efficiency and reduce costs 600 M€ 200 M€ 150 M€ 25 M€

Increase dispatchability 600 M€ 200 M€ 150 M€ 25 M€

TOTAL 1,200 M€ 400 M€ 300 M€ 50 M€

Each project would likely include innovation in both topics; therefore the budget can be better

understood by considering the “Total” row.

Due to the time still required to implement this action line, ESTELA does not expect that the projects

could be constructed before 2015. Therefore the expected investments and supports have to be

considered as “committed” rather than “materialized” within the time frame of this Implementation

Plan.

The Structural Funds through the “Research and Innovation Strategies for Smart Specialization (RIS3)”

would be an ideal mechanism to support this first of its kind integrated project involving many type of

actors from several European countries.

10 The definition of ‘Investment’, ‘Soft loans’ and ‘Risk sharing’ can be found in the chapter “Budget

Summary”.



3. Innovations in Future Commercial Projects Developed by European

Companies in Third Countries

STE plants will experience a rapid expansion in the countries located in the Sun Belt, not only for their

differentiated technical characteristics with respect to other variable renewable technologies

(dispatchability thanks to storage and hybridisation; and contribution to the stability of the network

thanks to a great inertial factor), but also for the significant contribution to the economy of those

countries. STE plants will provide a strong macroeconomic impact due to the high local content, which

has been proven since the first plant was built.

Moreover, if contractual formulas with sufficient guarantees are established, many foreign investors will

be attracted, resulting in a boost of the economy in these countries.

In countries with a good irradiation, it is possible to set up big STE plants with little or no public support.

Typical PPAs will be in the range of 15-16 c€/kWh for 25 years, as demonstrated in the position paper11

published by ESTELA in October 2012. These figures are close to competitiveness and allow filling in the

gap with reduced premium levels. In any case, the macroeconomic impact analysis will demonstrate to

policy makers that supporting the deployment of STE plants is a good business for the economy of their

countries.

Export of green electricity to Europe from MENA countries under Article 9 of the RES Directive offers to

these countries a great opportunity for industrial development but it has still some issues to be solved.

11 The Essential Role of Solar Thermal Electricity, a real opportunity for Europe – Position Paper, ESTELA,

Brussels, October 2012

Workers in action



Nevertheless, if these countries build STE plants for the domestic market, the presence of the European

technology is assured for the coming years.

For these reasons it is suggested to support innovation in the bids that European companies will submit

under the tendering processes. This could provide added value to the European proposals, although the

applicable formula should be thoroughly studied by the legal services.

The STE market is now emerging in countries like United States, Saudi Arabia, South Africa, Morocco,

India, Chile, United Arab Emirates, etc. The support mechanisms depend basically on the domestic

policies and the projects are awarded under competitive tendering or direct negotiation basis. Access to

soft loan lines or risk sharing lines for the projects to be constructed in those countries could play an

important role to win the projects.

In addition support to specific technologies to be applied in projects outside Europe could also provide

important advantages. This can be implemented in the form of grants to demonstration projects, either

at small scale or integrating new developments in existing STE commercial plants.

Not only would the innovations for increasing efficiency or for reducing cost be eligible, but also

environmental aspects, such as water consumption reduction. Integration of desalinated water and

electricity production could be also promoted for the first time in the world with the support of the SET-

Plan.

ESTELA has been advocating for a long time for the constitution of a company that would act as off-taker

for the electricity generated in the MENA region that would be exported to Europe. This company could

be constituted by public agencies promoting renewable energy in the different countries, for instance,

Germany, France, Italy, Spain, Morocco, Algeria, etc. It would be open to include any other country that

would support the initiative, as a producer, receiver or transferor. This company could also count on

financial guarantees from the EIB.

This off-taker company would be the first to identify the gaps to comply with the 2020 objectives in the

EU countries and would subsequently compete for the construction of a plant in a defined country

(Morocco with its current capacity for commercial exchanges of 600 MW would be suitable for the first

projects), signing a PPA for 20-25 years with the winning company.

This formula would give a solid legal security to companies investing in the new plant.

Market plans for this off-taker company, for which administration aspects would not significantly

increase the price of electricity in Europe, result to be attractive and with no excessive risks.

The operating procedure would be:

� Identify needs of supply , i .e gaps towards achieving the respective RES targets in European

countries;

� Activate the fulfillment of all administrative requirements;

� Reach price agreements in each of the EU electricity systems and/or distribution companies;

� Establish the necessary agreements with European TSOs on transport and certification;

� Reach promotional agreements with MENA countries;



� Tender the plants on PPA basis;

� Sell the electricity by packages to the different customers and pay the PPA to the owner of the

plant.

The SET-Plan might contribute to make this happen with institutional support.

The projects competing at national level (e.g. Morocco, Saudi Arabia, Jordan, etc.) could receive the

support of the SET-Plan as of now.

Nevertheless, projects targeted to export electricity to Europe using the established statement of Article

9 of the RES Directive would probably have some more years before all the necessary formalities are

settled.

The STE-EII estimates that, at least two innovative projects per year could be launched.

Each plant would have an optimal commercial size, between 150 and 200 MW while for combined

electricity and water the electrical power would be in the range from 30 – 50 MW.

Aside from electricity generation and transfer, another important aspect is the setup of European

standards in terms of quality, environmental and social issues, in order to implement projects

sustainable in time and consistent with European principles. A good expertise of this new market in

third countries can increase the chances of the European industry to benefit from the market growth in

those regions and see effective R&D efforts.

Capacity building and R&D infrastructures in the third countries should be supported.

Solana power plant, United States (ABENGOA)



Budget:

The estimated budget and public support for the period 2013 – 2015 is given below12

:

Investments Soft Loans Risk Sharing Grants

Increase efficiency and

reduce costs

1,200 M€ 400 M€ 200 M€ 25 M€

Increase

dispatchability

500 M€ 200 M€ 100 M€ 25 M€

Improve

environmental profile

200 M€ 50 M€ 40 M€ 25 M€

TOTAL 1,900 M€ 650 M€ 340 M€ 75 M€

Due to the time still required to implement this action line, ESTELA does not expect that these projects

can be achieved before 2015. Therefore the expected investments and supports have to be considered

as “committed” rather than “materialized” within the time frame of this Implementation Plan.

Each project would likely include innovation in all three topics; therefore the budget can be better

understood by considering the “Total” row.

12 The definition of ‘Investment’, ‘Soft loans’ and ‘Risk sharing’ can be found in the chapter “Budget

Summary”.



IV BUDGET SUMMARY

Investments Soft loans Grants Risk Sharing

R&D projects Increase efficiency

and reduce costs

100 M€

60 M€

Increase

dispatchability

80 M€

40 M€

Improve

environmental

profile

20 M€

10 M€

Large test facilities

for concept

viability

50 M€

10 M€

Total 250 M€ 120 M€

Innovation in future

STE Plants in

Southern Europe

Increase efficiency

and reduce costs

600 M€ 200 M€ 25 M€

150 M€

Increase

dispatchability

600 M€ 200 M€ 25 M€

150 M€

Total 1,200 M€ 400 M€ 50 M€ 300 M€

Innovation in future

commercial projects

developed by

European

companies in third

countries

Increase efficiency

and reduce costs

1,200 M€ 400 M€ 25 M€

200 M€

Increase

dispatchability

500 M€ 200 M€ 25 M€

100 M€

Improve

environmental

profile

200 M€ 50 M€ 25 M€

40 M€

Total 1,900 M€ 650 M€ 75 M€ 340 M€

Total estimated budget of the STE-EII for

the period 2013-2015 3,350 M€ 1,050 M€ 245 M€ 640 M€

The resources in the table above should come from:

• Investments: Companies, own budget of technology centres

• Grants: EU Horizon 2020 programme, Member States and Regional governments, NER 300

• Soft Loans: EIB or commercial banks with new support mechanisms under Horizon 2020

• Risk Sharing: EIB or commercial banks with new mechanisms under Horizon 2020



The Structural Funds through the “Research and Innovation Strategies for Smart Specialization (RIS3)”

could also contribute with grants, soft loans and risk sharing. Expressions of interest have been received

from the Spanish regions of Extremadura and Andalucía.

It is important to stress that new funding mechanisms should be implemented by the SET-Plan.



V KEY PERFORMANCE INDICATORS

The deployment of STE plants is now starting at a wide level. Typical projects will be in the 100 MW

range and the most important parameter is the level of the PPA needed to make the project happen.

The LCOE estimate that was applied as over-arching KPI in the previous implementation plan is no

longer used in this sector (although it would still be possible to calculate it). The only real reference for

the projects which are being launched every year is today the level of the PPA. The differences between

the LCOE and the PPA are due to the fact that the PPA is not calculated for the whole life span of the

plant but for a shorter period (20 to 25 years usually). The PPA includes the promoter’s profit but no

remaining value of the installation, which will constitute the basis for the country’s economy of the most

profitable end phase of the operational life of the plant.

The PPA (or FiT in specific countries) is the value that will be accepted by the promoter and which de

facto triggers the building of the plants. This value is usually publicly known and should therefore be

tracked/monitored to see the cost reduction in this technology.

The PPA depends on many factors, some of them related to the technology (DNI and plant size) and

other factors related to financial conditions (duration, escalation factors, public support such as grants,

concessional loans, guaranty coverage, etc.). ESTELA has attempted to prepare a model where all the

specific differences will be taken into account in order to compare the real cases at world level and to

track the cost reduction in the future.

The standard reference project has been defined as: 150 MW, 4 hours storage plant, with fixed 25 year

PPA (no escalation) and without any kind of public support (no grants, no soft loans, etc.). The CAPEX for

this typical plant is currently in the range of 550 million €.

Given the current CAPEX, the estimated OPEX - where there are still some differences among the plants

- and the efficiency, the resulting PPA will mainly depend on the solar resource on site (DNI).



The result of this analysis13

along with the estimations of the Industry on cost reduction is the following:

PPA14

in c€/kWh 2013 2015 2020

DNI 2050 (kWh/m2/year) 19 16 12

DNI 2600 (kWh/m2/year) 16 13 10

The reference parameters for a typical STE plant are:

STE Reference System for 2010 Update for 2013

DNI 2050 kWh/m²/year

Plant capacity 150 MW, 4 hours Storage

Capital investment cost 5,000 €/kW 3,800 €/kW

O&M costs (in percentage of

investment costs)

2%

Capacity factor 37%

PPA duration 25 years

Baseline for PPA in 2010 21 c€/kWh 19 c€/kWh

13 The Essential Role of Solar Thermal Electricity, a real opportunity for Europe – Position Paper, ESTELA,

Brussels, October 2012

14 The PPA is the first key performance indicator, referred as KPI-1 in the table on next page



A breakdown of KPIs can be seen below:

Description Metric BASELINE TARGETS

2010 2015 2020/2025

Overarching KPI KPI-1 PPA See values on previous page

1. Increase efficiency and

reduce costs

KPI-2 Increased solar-to-electricity conversion efficiency

15% Trough

8.5% Fresnel

17% Dish

12.5% Tower

(relative to baseline)

+5% Trough

+15% Fresnel

+15% Dish

+50% Tower15

(relative to baseline)

+20% Trough

+30% Fresnel

+30% Dish

+65% Tower

KPI-3 Increase HTF Temperature 400°C Trough

280°C Fresnel

650°C Dish

250°C Tower

560°C Tower

420°C Fresnel

>500°C Trough

500°C Fresnel

>900°C Dish

>900°C Tower

KPI-4 Reduce cost of installed

products and O&M for state-

of-the-art commercial plants

2% of CAPEX -10% -20%

KPI-5 Reduce power block costs

(Rankine cycle)

1,300 €/kWp

Trough with thermal oil

1,300 €/kWp Molten

Salt as HTF

1,000 €/kWp

Hybrid plant

1,200 €/kWp Advanced

HTF

800 €/kWp

Advanced hybrid plant

KPI-6 Reduce collector costs 250 €/m2


250 €/m2

Molten Salt or

Hybrid plant

200 €/m2


KPI-7 Reduce the specific cost of the HTF system

330 €/kWth


295 €/kWth Molten Salt

as HTF

165 €/kWth

Hybrid plant

120 €/kWth Advanced

HTF

100 €/kWth


2. Improve dispatchability

[Figures concerning

storage are based only on

molten salt technology].

KPI-8 Investment cost of storage 35,000 €/MWhth 20,000 €/MWhth 15,000 €/MWhth

KPI-9 Increase efficiency of storage

94% 96%

3. Improve the

environmental profile

KPI-10 Substantial reduction of water

consumption with only minor

loss of performance relative to

current water cooling system

3.5 liters/kWh < 1 liter/kWh

15 After Gemasolar breakthrough



VI RELATIONS WITH OTHER INDUSTRIAL INITIATIVES

1. The European Electricity Grid Initiative (EEGI)

The specific relation to the grid initiative stems from the fact that STE power plants with thermal energy

storage are able to deliver a reliable contribution to ancillary services (essentially voltage control and

reactive power). To that extent, STE power plants should and will be able to comply with the ENTSO-E

Network Code for Requirements for Grid Connection.

The objective of a coordination with the EEGI should be to determine whether the development of CSP

technologies further strengthens the use of energy storage to increase dispatchability, and enable them

to operate much like “standard thermal power plants”. A joint study with the EEGI would involve

planning and operation simulations to set development specifications for grid integration of STE plants.

The questions at stake are more specifically as follows:

1. Can STE power plants meet the demand at any time, day and night, and supply electricity at peak

hours according to planned schedule?

2. Do STE plants have the capability to offer primary, secondary and tertiary reserves?

This study may then specify one large scale experiment to validate the energy and network value. The

need for such a demonstration, its expected benefits and its costs need to be evaluated jointly by the

EEGI and the SEII.

STE plants with thermal energy storage could well be hybridized into combined solar plants with PV

plants where PV would deliver power during sun hours while STE plants would take over power

generation independently of the day time, responding thus to TSO operating needs.

2. The Storage Technology Roadmap

Thermal storage is of utmost importance to develop and expand STE. ESTELA contributed to the working

group in charge of drafting the ‘European Energy Storage Technology Development Roadmap towards

2030’ developed by EASE and EERA.

3. The Roadmap on Turbomachinery 2014-2020

EUTurbines released a ‘Roadmap on Turbomachinery, enabling new energy technologies under Horizon

2020’. The document includes a 4-page chapter dedicated to STE, gathering R&D efforts needed in

terms of costs and new concepts. Synergies can be found with the research topics listed in the ESTELA

Strategic Research Agenda.

European Solar Thermal Electricity Association – ESTELA a.s.b.l.

Renewable Energy House

Rue d'Arlon 63-67

B-1040 Brussels

Belgium

T: +32 (0)2 400 10 90

F: +32 (0)2 400 10 91

E: estela(at)estelasolar.eu

I: www.estelasolar.eu

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