Increasing CSP competitiveness in South Africa

While South Africa makes evident steps towards increasing concentrated solar power (CSP) competitiveness, repetition of inflexible project parameters may hinder cost reduction in reality. Aalborg CSP encourages the market to design technical specifications for steam generation systems that enable value creation in technology enhancement as well as foster optimised technology development. With design parameters adequate to traditional power boiler requirements, Aalborg CSP is able to reduce CAPEX of steam systems by up to 35%.

With the Department of Energy’s targets to generate 1,200 MWe from CSP sources by 2030, South Africa shows promising ability to enable substantial price reduction as well as make CSP more competitive at a global level. So far seven CSP projects totaling 600 MWe capacities have been awarded under the REIPPPP programme’s first three rounds to supply the country’s increasing electricity demands in a sustainable way.Even though Round3 for CSP reflected a downward trend compared to Round 1 and Round 2 tariffs, other competing renewable technologies have shown a significant larger price reduction rate leaving room for CSP to improve competitive advantage.

To leverage South Africa’s massive potential for global technology enhancement, it is vital to avoid repetition of project structures from established markets that has the tendency to block value creation in project development. For key CSP components, such as steam generation systems, it is frequently seen that technical specifications are often standardized data sheets that have been repeatedly applied in bidding processes for many years and often contain design parameters inadequate to traditional power boiler requirements (Header and Coil type equipment based on ASME and EN standards). This can negatively impact technology enhancement in emerging markets like South Africa, as it carries the risk of over-engineering, increased material costs and hindered CSP competitiveness as a result.

Aalborg CSP stresses the importance of a paradigm shift in technical specifications for steam generation systems in order to foster optimised technology development, especially in markets with prosperous conditions for price reduction. “With technical specifications for steam generation systems,where steam output expectationsare prioritised over detailed technology parameters, we are able to reduce CAPEX by up to35%. This, together with operational benefits of our SGS3 steam generation system that also lower O&M costs,significantly improve slevelised cost of energy (LCOE) of the plant“, said Svante Bundgaard, CEO of Aalborg CSP.