Affordable clean power

Like solar photovoltaic (PV) and wind energy, the cost of Concentrated Solar Power (CSP), which can generate electricity day and night in much the same way as coal and nuclear power stations, is declining.

The decrease is not on the scale that has enabled solar PV and wind to generate electricity at a price lower than Eskom’s new Medupi power station, but it is significant for a complex, capital-intensive technology.

The base tariff for CSP-generated electricity delivered to the national grid has been driven down by R0,28/kWh. CSP developers will have to match or better a new, capped base tariff of R1,37/kWh to stand a chance of making a successful bid to sell electricity to the grid under the next round of government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The capped tariff was R1,65/kWh in the previous two bidding rounds.

The reduced capped tariff applies to electricity delivered outside the five-hour peak period from 4.30pm to 9.30pm when the grid is under severe strain to supply consumers.

CSP developers will also sell electricity to the national grid at a lower price during peak periods when the capped tariff will be R3,70/kWh instead of R4,45/kWh in the previous bidding rounds.

The peak period tariff is higher because government regards electricity delivered during these hours as having significantly more value than power supplied when the grid is less constrained.

The new CSP peak period tariff of R3,70/kWh is marginally higher than the cost at which Eskom generates peak power from its diesel turbines, estimated at around R3/kWh, but significantly lower than the cost of about R6/kWh that Eskom has budgeted to pay for diesel-generated power from two independent peaking plants under construction.

The higher peak period tariff compensates CSP developers for the high cost of adding energy storage to their power plants. CSP plants work in the same way as coalfired and nuclear power stations, but use the sun as their fuel source.

CSP plants use mirrors or lenses to concentrate a large area of sunlight, creating high temperatures.