Energy in Botswana: concentrating solar power

Showing posts with label concentrating solar power. Show all posts

Saturday, January 30, 2016

Why is There so Little Solar Energy Generation in Botswana?

Dumelang*. In my recent series of posts, I have been taking a deep dive into solar power in Botswana. I have looked at the large solar resource available in this sun-drenched country, I have considered the potential for concentrating solar power, and, in my previous post, I looked at the technology of photovoltaics and the world-wide rollout of this technology. As I read about solar and travel around the world, I am amazed at the proliferation of this technology. It already generates 1% of the world’s electricity supply and the International Energy Agency has forecast that by 2050 this value will rise to 16%.

Country after country is climbing onto the solar PV bandwagon and, even in Africa, there is some progress, particularly in South Africa. As part of its Renewable Energy Independent Power Producers Programme (REIPPP), South Africa has implemented 1059 MW of PV solar projects, with an additional 1255 MW under construction or in development. This excludes numerous small-scale solar projects that businesses, homeowners, and farmers in South Africa have implemented.

Despite the large solar resource available in Botswana, Botswana has not yet joined the PV movement. In this post, I take a look at some of the reasons for this.

Large-scale application of solar in Botswana has been limited to a single project: a 1.3 MW solar farm near Phakalane, just north of Gaborone. This project was built and funded by the Japanese government in 2012 who contributed P84 million of the overall cost of ~P106 million (~USD $10 million). This project has delivered close to its planned output, but, unfortunately, recent theft of copper cables and solar panels at the facility has shut down production since December 2015.

Another grid-connected system includes the recently constructed, but not yet operational, 20 kW EU-funded University of Botswana research system installed in Mokolodi village, just south of Gaborone. Both of these systems will be discussed in detail in my next blog.

The only other large grid-connected system is a 34 kW system, owned by Scales Associates and located in Broadhurst, Gaborone near the Western Bypass. This system generates electricity for an office and workshop complex. It has a battery storage component and only uses the grid to supplement supply during shortfalls in produced solar power: it does not feed excess electricity back into the grid. There are, however, many small and large off-grid systems in Botswana that power homes, offices, businesses, and tourist lodges. Part of my research during my stay here in Botswana has been to visit and assess these smaller systems and to learn about issues associated with their operation.

Generally speaking, there are a limited number of PV systems in Botswana and the existence of only a single 1.3 MW utility-scale PV operation in a country with such a high degree of solar potential seemed, initially, to be astounding. Clearly, lack of solar irradiation is no excuse. In an earlier post, I pointed to the high levels of solar irradiation in this region and the potential to harvest it. Besides, there have been many articles in the press and literature extolling Botswana’s solar potential.

The limited number of solar facilities in Botswana was at first a puzzle for me, but, since my arrival, I have spoken to a good number of people with knowledge of solar energy regarding the lack of solar power production in Botswana. Most have had opinions on this matter and a variety of explanations has been provided. The explanations and my thoughts on each are shared below:

The costs of installation are high. This excuse was compelling many years ago, but prices have come down—exponentially. Solar systems now cost a fraction of their prices ten years ago and costs continue to decrease; however, they are still not cheap. As noted in a previous post, costs for large-scale solar PV operations are of the order of $ 4400/kW. Coal-fired power plants have lower installed costs (especially if pollution control equipment is not included)—of the order of $ 1300 to $ 2300/kW. But this is only part of the story. A correct comparison should consider not only capital costs, but also long-term operating costs. Operating costs for solar plants are a small fraction of those of coal plants: compare the cost of sunshine with that of mined coal. If we quantify the higher long-term operating costs of burning coal, as well as its deleterious impacts, such as greenhouse emissions, general pollution, and health impacts, solar becomes an attractive proposition.
Lack of regulation supporting independent renewable energy production. This is a valid excuse. Botswana has taken steps forward in implementing legislation for independent power production. In 2007, the Electricity Supply Act was amended to permit Independent Power Producers (IPPs); however, legislation is just the first step. The next—and more important—step is setting up a regulatory body and framework for IPPs and considering renewable energy feed-in tariffs (REFIT). Many of the regulations are still in the discussion or proposal stage and are, as yet, not codified. This creates uncertainty for investors and discourages investment in the power sector. One of the concepts I drill into my students who enroll in Franklin Pierce University’s MBA in Energy and Sustainability Studies is that successful energy project implementation requires three components: it requires the correct technology; it needs financing; and, very importantly, it requires well-established, supportive, and consistent regulation. These days, there are many technological solutions to produce renewable energy and many firms willing to make investments, but they will only do so when the correct laws and regulations are in place. One just has to view the success of renewable energy legislation in other countries to see the benefits. The South African Renewable Energy-Independent Power Producer Programme (REIPPP) is again a case in point: since the legislation enabling this program was passed and firm regulations were established, regulatory uncertainty was no longer an issue and private investors have lined up to make large investments in grid-scale renewable energy projects. The results have been impressive: awards for over 3000 MW of renewable energy generation, involving $ 10 billion of investment, have been made. Now it is unlikely that Botswana, with its lower population (2 million compared with 55 million in South Africa) and commensurately lower energy consumption, will ever see this level of investment, but some investment in the renewable sector is desirable. To promote IPPs and/or renewable energy production, the government will need to move forward on setting up a regulatory body and framework. This will then create the regulatory confidence that will draw in investment.
The low and subsidized cost of electricity in Botswana. The cost of energy in Botswana is a big issue. Generally speaking, the cost of electricity in Botswana is low compared with that of other countries in the world. At this time, the average resident in Botswana, using more than 200 kWh/month, is paying 88.28 thebe (1/100 of a pula (P), the currency of Botswana) per kWh, which is equivalent to US$ 0.0762/kWh (@ P11.59/US$). Compare this with the average costs of electricity in the US at $ 0.1273/kWh and Germany at $ 0.3140 $/kWh. Electricity in Botswana is heavily subsidized. The chart below compares Botswana Power Corporation’s (BPC) average selling prices and costs for electricity over time: it can be seen that the purchase price of electricity in Botswana is consistently lower than the costs. It is also notable that the difference over the past few years has escalated, which is one of the main reasons that BPC has been running with an operating deficit. This low subsidized cost of electricity makes it difficult for ordinary folks in Botswana to consider renewable energy. The low price of grid-provided electricity and the high installation costs for solar, especially when combined with battery storage, makes payback periods very long—it is simply easier and cheaper to use electricity from the grid. Under these circumstances, it takes dedicated, far-thinking, altruistic individuals concerned about the fate of the planet to make the investments in solar against the headwind of low electricity prices.

Source: BPC
Renewable energy is expensive. The cheap price of retail electricity in Botswana further complicates matters because REIPPs may initially require higher feed-in tariffs than the present retail rate of 88.28 thebe/kWh to run a profitable renewable-energy enterprise. Again, lessons can be drawn from the South African REIPPP. At the start of this program, bid prices in the auction were high, but then, over the succeeding annual bid windows, prices fell as investors gained confidence and experience in the South African renewable energy market. When the program started in 2011, the average bid for renewable energy was R 3.29/kWh (US$ 0.198/kW @ R16.61/$). This has decreased every year and fell to R 0.79/kWh ($ 0.047/kW) in the most recent bid window – a remarkable 76% reduction over four years. This is below the R 1.14/kWh that the average homeowner (using <600 kWh/month) is paying the national electricity supplier, Eskom (see the figure below). The program is a fine example of the results that a well-crafted, consistent, and predictable program can deliver. If large-scale renewable energy/solar is introduced to Botswana, it is very likely that the average tariff required by the developers for the first projects will be higher than the retail price for electricity. In a way, this will become a subsidy for renewable power and is similar to the subsidies presently supporting coal-fired electricity generation in Botswana. Yet, drawing from the South African experience, there is the possibility that, over time, as more projects become implemented, the bid prices for renewable tariffs will decrease, although because Botswana does not have the same degree of needed capacity, such decreases will most likely be smaller.

Source: SA DOE
Solar energy is highly variable: it only produces electricity during the day and what Botswana needs is more consistent base-load production of electricity. I cannot argue with the point that Botswana needs a larger amount of reliable base-load electricity generation, especially considering that the writing of this post was interrupted several times by the lack of electricity due to load shedding. However, even though solar energy is variable, the production of electricity from PV systems will lessen the amount of coal that needs to be burned during the day time. Reduced coal burning has a positive impact on the planet and environment, it extends the lifetime of the coal resources, and it provides some diversification for electricity generation, which, in turn, reduces the vulnerability of energy supply.
There is a lack of knowledge about solar systems and lack of trained personnel in Botswana. I have found this to be only partly true. There are a limited number of Botswana-based solar firms and trained personnel at the moment, but this is due to the limited amount of business available in the country. I have met several competent and well-trained engineers and technicians in the PV field in Botswana and I am confident the knowledge and expertise base will grow as the business grows – as it has in all other countries where solar energy has been promoted.
Concern about the impact of grid-connected PV systems on the main electrical grid. The connection of multiple small generators onto an electrical grid does add complexity to its operation, but the experience of other countries can easily and quickly be drawn upon. Major utilities in Europe, Asia, and the US now accommodate large-scale and highly variable renewable energy production from thousands of individual systems that each feed small amounts of electricity into their electrical grid, as well as from grid-scale PV operations. This is a technical problem that has been solved and Botswana can draw from a well-established knowledge base.
Renewable electricity from PV is highly subsidized in developed countries. This is a valid point. We are seeing residential and grid-scale solar installations rolling out across parts of the US and Europe, but this is not because solar irradiation levels are high in these regions. In fact, they are often far lower than Botswana. For example, in my home state of Massachusetts, where there is a major growth in the solar industry, the average solar insolation value is 3.9 peak sun hours compared with 5.6 in Botswana. Similarly, in Germany, solar irradiation levels are a lot lower: 2.52 in Hamburg and 2.98 in Munich. The reason for the solar bonanza in those countries is that there are tax credits for installation, high FIT levels, and/or generous renewable energy credits to be earned. For example, in Germany FITs in 2015 were € 0.1288/kWh (US$ 0.14/kWh). (This is down from 2004 when they were as high as € 0.54/kWh (US$ 0.67/kWh).) In Massachusetts, excess electricity generated by homeowners can be sold back to the grid for $ 0.1837/kWh through net metering and also earn the homeowner ~$ 0.30/kWh in renewable energy credits.
At this time, there are better alternatives for Botswana than renewable energy. Botswana is a developing country and, as such, there are perhaps better alternatives to installation of expensive, long-payback renewable-energy projects. A reading of the most recent annual report for Botswana’s electrical utility, BPC, indicates that their focus is on base-load energy supply, transmission grid reliability, service delivery, financial turnaround, and rural electrification. Renewable energy is not even addressed. Moreover, discussions that I have had with various BPC personnel also suggest a very different viewpoint: when they view the P100 million Phakalane solar PV project, they see a good and interesting project producing enough electricity for 200 to 300 homes, or enough for one village; however, they then emphasize the fact that this same sum of money could be used to bring the grid to approximately 30 villages and impact a lot more people. Ultimately, this is a very important choice to make in a country with limited resources: impacting the lives of many in the short term by extending the grid and burning more coal or that of a few for the long term by installing solar. This is a complex matter, but it is very relevant to the situation in developing countries across the world. It is easy for those of us in the developed world to promote renewable energy, but we have the resources, incomes, the developed economies, and the completely electrified countries to make these choices. Sometimes what works in a developed country is a poor fit for a developing country.

It has taken me some time in Botswana to understand the complexities involved in the consideration and installation of solar projects. Sunshine is a magnificent energy resource for the country and it is clear that small off-grid systems with battery storage in remote areas and a long way from the grid are great alternatives to diesel generators. However, when it comes to large-scale grid-connected systems, the situation is a lot more complicated than I first appreciated and requires a nuanced understanding of the factors at play in the country. One has to balance the short-term needs of development and electrification against the long-term benefits of renewable energy production. One has to understand that renewable energy is not free energy – even though prices are falling: the initial costs are still high and the reason we are seeing large-scale solar PV roll outs in other countries is because energy costs are high and renewable energy is heavily subsidized. Furthermore, one has to deal with the variability of a solar resource and balance that against the need for reliable base-load generation, even though that is achieved by burning coal.

Overall, as these matters often are, it is a complex situation involving a great number of tradeoffs, but this is not to say that solar and renewable energy do not require regulatory and financial support. They do – and there are clearly actions that can be taken to promote solar, such as implementing FIT regulations, establishing subsidies, and training workers skilled in the solar energy business.

It has taken time to come to grips with the complexities of renewable energy in this part of the world. My understanding has evolved and my opinions regarding solar in Botswana are now a lot more educated. Clearly, there is still much to learn and I would be interested to hear your thoughts about this issue. Feel free to drop a comment in the box below or, if you prefer, drop me a note at my email address.

In the meantime, remember to turn off the lights when you leave the room.

Tsamayang Sentle**

Mike Mooiman

mooimanm@franklinpierce.edu

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(*Greetings in Setswana)

(**Go well or Goodbye in Setswana)

Tuesday, January 12, 2016

Concentrating Solar Power in Botswana

Dumelang*. In my previous post, I discussed the potential for harnessing the energy from the sun in Botswana. I also pointed out the various ways of harnessing this potential:

Solar thermal uses the heat of the sun to warm up water so that it can be used for showers and other hot-water applications, such as washing;
Concentrating solar power, where the energy of sunlight is focused by mirrors onto a focal point: the focused sunlight heats a fluid, which generates steam, which then turns a turbine to generate electricity;
Photovoltaic (PV) generation of electricity by the use of solar panels.

In this post, I focus on concentrating solar power (CSP). This option has been under consideration for several years in Botswana and may see implementation in the future.

Let’s begin by taking a closer look at the technology. There are two main types of CSP units: point-focus and line-focus units. Point-focus CSPs comprise an array of mirrors that reflect and focus the light of the sun onto a single point – normally a central tower. The mirrors, known as heliostats, track the sun’s path and the concentrated sunlight is used to heat a heat-transfer fluid, normally an organic liquid that can withstand very high temperatures (max. 400^oC) or a salt mixture that melts at low temperatures. This heated fluid, which can reach temperatures of 250 – 550^oC, is then used to boil water, thereby generating steam that is used to rotate a turbine and generator to produce electricity.

A variant of the point-focus system involves a satellite dish-shaped mirror that focuses the energy of the sun onto a single point. This allows the operation of a Stirling engine, a special type of engine that uses heated air to generate electricity. Photos of these two point-focus systems are shown below.

Source: seia.org

Source: Wikipedia

In a line-focus system, sunlight is focused onto a pipe running down the focal line of a parabolic trough. In this approach, the focusing of sunlight and heating of the fluid is done locally within the trough, as opposed to a central tower. During the day, the troughs pivo to track the sun across the sky and all that is required is that the heated fluid be pumped through the pipes to a central steam boiler and generator unit. Some 80% of installed CSP systems are parabolic-trough systems because these lend themselves to offsite modular construction of the mirror and receiver components and because it is a more mature technology. The troughs can be arranged in series and/or parallel configurations, which creates versatility by allowing a range of heat-transfer fluid temperatures and energy outputs tailored for different steam boiler and generation units. The components of a parabolic-trough system are shown in the figures below.

Source: US DOE

Source: cspworld.org

One of the most important advantages of CSP systems is that thermal energy can be stored by holding the hot thermal fluid in a tank. This provides a thermal reservoir that can be tapped to continue generating steam and electricity after the sun has set. CSP plants can be designed for up to 12 hours of thermal storage; storage for four to six hours of operation after sunset is normally considered sufficient. This represents a major improvement over utility-scale PV operations, which do not have a storage component. Typical output profiles of PV vs. CSP electricity production are shown below. The extended window of electricity production, especially during the high-demand evening hours, makes CSP systems more like traditional fossil-fuel systems and less like many of the other renewable energy systems (such as wind and PV) that are highly variable in output. Energy storage is a major benefit, but thermal storage adds considerable costs to the construction and operation of a CSP unit.

Source: CSP Alliance.org

Most modern CSP systems have the following key components:

A solar field, which is the array of mirrors, heliostats, or parabolic troughs;
A receiver that absorbs the focused sunlight and heats up a heat-transfer fluid: this is the central tower (also called a power tower) for point-focus systems or a specially configured pipe with a coating designed for energy absorption for parabolic-trough systems;
A heat-storage system, which is series of tanks or containers to hold the warm heat-transfer fluid;
A power plant, which includes a steam boiler, turbine, and generator to convert the thermal energy into electrical energy;
A steam-cooling system to condense the steam back into water to allow for its reuse.

CSP systems are often compared with PVs in terms of technical complexity, energy output, capital cost, and the cost of electricity produced. It is clear that CSP systems are far more complicated operations than utility-scale PV systems. Like PV systems, they have large solar fields to harvest the sunlight, but they also require several additional expensive operations to transfer, store, and convert the captured thermal energy into electricity. CSP systems are therefore more expensive to install and operate. PV panels produce electricity directly and so capital and operating costs are lower. Generally speaking, kWh for kWh, PV is cheaper than CSP and prices for PV systems continue to fall.

Moreover, CSP systems face the following additional challenges:

Water is needed to generate steam for the power plant and cooling systems are needed to condense the steam back into water for reuse. Because CSP systems are often located in desert or semi-arid areas, cooling systems involving water cannot be used and so forced-air cooling systems are required. These use large electrically driven fans, which consume a great deal of energy and therefore reduce the net electrical output.
Because of their location in arid environments, dust is a big problem for CSP systems. It coats the mirrors and reduces effectiveness of the system. In some areas, mirrors are cleaned – with water – every day.
Direct sunlight is required: cloud cover will shut down the operation of a CSP system. In contrast, PV systems can still produce electricity (although reduced amounts) on cloudy days from the diffuse sunlight.
Like other renewable energy systems, connection to the existing power grid is an important technical and cost factor. The choice of location is critical to avoid large expenses associated with building long transmission lines.

Notwithstanding these challenges, there are several CSPs, either proposed or under construction, in the Southern African region. Most notably, South Africa has instituted the Renewable Energy-Independent Power Producer Programme (REIPPP) and, since 2011, there have been four opportunities for companies to bid for wind, solar PV, and CSP projects as Independent Power Producers (IPPs). An impressive amount of interest has been shown and, so far, awards for over 3000 MW of renewable energy generation, involving $10 billion of investment, have been made. Even though the bulk of the awards have been for wind and PV, this program has been particularly positive for CSP projects. The first CSP project, a 100 MW parabolic trough system, the KaXu operation in Pofadder in the Northern Cape, operated by Abengoa Solar, came online last year. There is an additional 250 MW of CSP projects under construction—a 100 MW parabolic trough and a 150 MW power tower—and a further 250 MW under development. The REIPP program has been so successful that the bid price of electricity from CSP operations decreased by ~50% over the first three bid windows.

A CSP project has also been proposed for Namibia and a feasibility study was recently completed. In Botswana, the implementation of CSP has been under consideration and study for a number of years. The review process has gone through the following steps:

In 2009, a pre- feasibility study that assessed the potential of a 200 MW parabolic-trough installation was completed. Five locations considered, including Selebi Phikwe, Maun, Letlhakane, Serowe, and Jwaneng.
In 2013, a feasibility study for a 100 MW power tower system was completed. The Jwaneng site was recommended and the installation of solar radiation monitoring installations at Jwaneng and Letlhankane was suggested.
A Request for Expression of Interest (EOI) to construct, maintain, and ultimately decommission a scalable solar plant near either Jwaneng, the copper mines in the North West Region, or other areas in Botswana was issued on June 7, 2015. The EOI required interested parties to include proposals for IPP license agreements, power purchase agreements, and the location of specific sites. Although closing of these bids was due on August 19, 2015, the outcomes have not yet been made public.

This recent EOI request is rather open-ended, not specific regarding the capacity of the proposed operation, and is open to both CSP and PV options. Earlier government comments suggest that there is interest in 50 MW of generating capacity in the North West Region near the Discovery Metals Boseto and proposed Khoemacau copper mines and 50 MW near Jwaneng (a diamond-mining area). Interestingly, the previous feasibility study advocating a 100 MW CSP option at Jwaneng was not published nor shared as part of the tender process. If I was bidding, I would have wanted to see that report. Owing to lack of information, many companies would have had to individually prepare their own assessments from the ground up and probably needed to spend a considerable amount of time on site in Botswana. It is likely that this complicated the process and raised the cost of bid preparation. Perhaps there are good reasons for not sharing the earlier report, but they are not obvious. Nevertheless, based on recent reports, a great deal of interest has been shown in this process and 118 EOIs have been received.

Due to the high cost of CSP systems, I anticipate that most of the received bids will be for straightforward PV plants without storage. Even so, I believe CSP is an attractive renewable energy option for Botswana and the inclusion of a thermal-storage component would also enable the generation of electricity until about midnight each evening. On reflection, the South African REIPPP has much to recommend it: it has specific windows for bidding and mandates for specific technologies, such as PV, CSP, and wind. This approach provides opportunities for different IPPs, it promotes renewable energy diversification (cheapest is not always better), and it has resulted in significant decreases in the costs of electricity from renewable sources in just a few years.

Costs of electricity from CSP operations are presently a limiting factor, but indications are that these will decrease. The US Department of Energy has projected that the cost of electricity from CSP operations with storage will continue to drop and has forecast a 3.5-fold decrease in electricity cost by the end of this decade (see the figure below).

Source: US DOE

I am certainly looking forward to more information on the Botswanan EOI and it will be interesting to review the nature of the proposals that were received. Given the open-ended nature of the request, ranking the proposals will be challenging, but I am hopeful that that the Botswana government will act on some of the proposals and that that we will see the installation of large grid-scale PV, and even some CSP projects, in the near future. In the meantime, remember to turn off the lights when you leave the room.