10. January 2017
Handbook for yield calculations drawn up

When and how is in­vest­ing in a so­lar pow­er plant worth it?

So­lar pow­er plant Khi So­lar One in South Africa
Image 1/2, Credit: wikimedia.

Solar power plant Khi Solar One in South Africa

The Khi So­lar One so­lar pow­er plant can sup­ply 50 MegaWatt of pow­er in­to South Africa's elec­tric­i­ty grid. A hand­book made by DLR will en­able in­vestors in the fu­ture to make de­ci­sions on a sound ba­sis.
In­di­vid­u­al steps in the project de­vel­op­ment pro­cess of so­lar pow­er plants
Image 2/2, Credit: DLR (CC-BY 3.0).

Individual steps in the project development process of solar power plants

The guide breaks down the three pro­cess phas­es of de­vel­op­ing so­lar pow­er plants.

  • Scientists from DLR have, together with partners, compiled a guide to calculate the yield from a solar power plant before operations have started.
  • The project financing of solar power plants should be easier with the guide and their competitiveness consequently given a boost.

Scientists from the German Aerospace Center (Deutsches Zentrum für Luft- und Raumfahrt; DLR), together with partners, have compiled a guide to calculate the yield from a solar power plant. For the first time, the guideline offers comprehensive and standardised calculation bases within the solar thermal industry that meet the high requirements of project financing. The financing of solar power plants should be easier with the 170-page manual and their construction consequently given a boost. The guideline can now be downloaded from the So­larPACES site.

Easier market entry

Solar power plants or solar thermal power plants concentrate the Sun's radiation with mirrors and thus generate temperatures of up to 1100 degrees Celsius depending on the technology. Power is generated using this thermal energy by a conventional power plant process. Solar power plants have the advantage that they can supply electricity to the grid for several hours by means of an integrated heat storage unit even during periods of no Sun. This is why they are of great importance in an energy system with a high proportion of fluctuating renewable energy. Compared to a photovoltaic plant, however, the construction of a solar power plant is much more complex and therefore involves different categories of risk for investors. Thus, the decision for or against the financing of a solar thermal power plant requires precise knowledge of the solar resources, the technology, the expected power output and the financial return. In comparison with other renewable technologies such as wind energy or photovoltaics, very different system designs and additional component storage and hybridisation have to be taken into account in solar thermal power plants. The handbook offers new but also experienced market participants a systematic orientation to facilitate the broad market penetration of these power plants as well as to encourage competition. The DLR In­sti­tute of So­lar Re­search has developed the guide together with Fraun­hofer ISE, Fichtner GmbH & Co. KG, Sun­trace GmbH, IA Tech GmbH, the consulting company DNV GL and the Hamm-Lipp­stadt Uni­ver­si­ty of Ap­plied Sci­ences.

Transparency in the calculation bases

"So far, there have only been reports about the yield from individual power plants. We have now developed a comprehensive guide that also takes the interplay of the various factors into account," says Tobias Hirsch, who headed the project at the DLR Institute of Solar Research. For example, the handbook provides not only the calculation basis for the receiver of a system, but also the interplay of the entire system, from the receiver to the heat transfer medium, through to the storage and the gas turbine. The handbook is based on the knowledge of experts from various disciplines: "We have discussed our calculation bases intensively at specialist conferences such as SolarPACES with experts from science and industry from the engineering side. On the aspects of the financial decision-makers in close cooperation, we worked with the project partners active in this area," says Hirsch.

Improving credit conditions

Boris Westphal from the solar consulting company Suntrace is convinced that investors and banks can use the handbook to better assess the risks. "The procedures presented enable a clear reduction in the uncertainties regarding power generation revenues through scientific standardisation specifications." A precise assessment of the energy yield and thus of future revenues is the essential decision-making base for the financial sector as to whether and under which conditions capital is made available. The handbook introduces standardised procedures with the aim of reducing the usual risk premiums and thus reducing capital costs. "Lower equity return requirements (investor minimum yields, so-called 'hurdle rates') and more favourable debt financing conditions can make a decisive contribution to the profitability and competitiveness of solar thermal projects," says Westphal.

  • Dorothee Bürkle
    Ger­man Aerospace Cen­ter (DLR)
    Me­dia Re­la­tions, En­er­gy and Trans­port Re­search
    Telephone: +49 2203 601-3492
    Fax: +49 2203 601-3249

  • Dr.-Ing. Tobias Hirsch
    Ger­man Aerospace Cen­ter (DLR)

    DLR In­sti­tute of So­lar Re­search
    Telephone: +49 711 6862-428
    Fax: +49 711 6862-747
    Linder Höhe
    51147 Köln

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