Evaluating the economic viability of concentrated solar power systems as renewable energy source

Abstract

Access to electricity is one of the key drivers of economic activity, and sustaining a reliable electricity supply is essential for South Africa to grow its economy, reduce the unemployment rate, and alleviate poverty. Since 2007, the country has grappled with electricity shortages, resulting in continuous power cuts in the form of load shedding. This predicament is mainly attributed to an aging power generation fleet, with much of the infrastructure reaching the end of its operational lifespan. The aging fleet's reliance on coal, a non-renewable fossil fuel, contributes to excessive emissions of greenhouse gases (GHG) into the atmosphere. These emissions cause environmental challenges such as global warming, manifesting in increased temperatures, intensified storm events, and rising sea levels. To address the electricity challenges without harming the environment, South Africa is transitioning from fossil fuel power generation technologies to Renewable Energy Technologies (RET) such as Concentrated Solar Power (CSP) technology. The research question driving this study was whether CSP could be economically viable as a renewable energy (RE) source in South Africa. Thus, the primary objective was to evaluate the economic viability of CSP as an RE source using a cost-benefit analysis. The study further applied a PESTLE analysis and a SWOT analysis to evaluate the economic viability of CSP as an RE source. The research followed a qualitative methodology. Data were collected through semi-structured interviews with eight participants who were selected using purposive sampling. The sampling was performed based on the individuals' knowledge of CSP plants from a strategic and operational point of view. The sample comprised two CEOs, two CFOs, two plant managers and two operations managers from two CSP plants in the Northern Cape Province, South Africa. The findings from the literature review and empirical study indicate that CSP systems equipped with thermal energy storage (TES) not only generate electricity during sunlight hours, but can continue to generate electricity after sunset. This capability stems from TES's ability to store energy or heat acquired during the day, allowing the technology to use the stored heat after sunset for sustained electricity generating. The ability to generate electricity after sunset enables CSP technology to provide baseload power to the grid as requested by grid operators. In contrast, other RETs, such as wind and photovoltaic (PV), can only generate electricity when there is adequate wind and sunlight respectively, leading to grid instability. The results from the cost-benefit analysis, the PESTLE analysis and the SWOT analysis showed that, for the South African context, CSP technology is indeed economically viable as an RE source. The study recommends that the South African government maintain its support for CSP technology and consider increasing the allocated electricity generation capacity by CSP beyond the 600 MWh currently designated in the Integrated Resource Plan. It is advised that the country's infrastructure be upgraded to accommodate further CSP developments in the Northern Cape. These recommendations are based on the fact that the Northern Cape has some of the world's highest levels of direct normal irradiance, which is crucial for the optimal functioning of CSP technologies.