On stand-alone CSP utility-scale projects, the industry is going forward on a market model that is based on “economies of scale.” .” For example, a 200 megawatt CSP plant should be more economical than a 75 megawatt CSP plant per megawatt-hour produced. This sounds feasible on the basis of unit quantities. “Scaling up” a CSP solar field results in a proportional increase in unit quantities. However, the unit quantities in the power island stay relatively the same – only the components get larger. Thus, the increase in the cost of the power island is disproportionately lower than the increase cost of the solar field when “scaling up.” Also, the greater order quantities are assumed to result in better unit pricing. Theoretically, this approach should result in a lower cost per megawatt-hour for the 200 megawatt plant.

The problems with the “economies of scale” model are the following:

• The risk of a “technology-equal” 200 megawatt plant as compared to a 75 megawatt plant goes beyond the limits of many conventional funding sources. The capital expenditure can be upwards of $1.5B.
• The development and construction lead-time of 200 megawatt CSP plant is usually much longer than the small project. And even with the smaller 75 megawatt plant, the lead-time can be several years.
• For a project funding institution, the 200 megawatt plant becomes daunting because large sums of money are tied up at lower interest rates over protracted periods of time in a volatile economy.
• The result is that the larger CSP plants must rely on very generous government grants and loan guarantees to go forward. These extraordinary and requisite financial measures require considerable lobbying time and effort to obtain. Because government loan guarantees are dependent on favorable government policy for support, politics can short circuit business plans of developers who aspire to construct large scale solar power plants.

As such, the “economies of scale” model does not necessarily reduce the project cost or improve viability. Furthermore, it is not a sustainable model for ongoing deployment of CSP plants. It effectively institutionalizes older CSP technology. And, it limits the number of companies that can participate in the market.

Please contact Gossamer Solar for more information on the sustainable pathway to CSP project funding.