Why Likana’s 24-Hour Solar Bid under $34/MWh Lost in Chile

The combination of tower CSP and PV proposed by Cerro Dominador would be a gigantic project, larger than the tower and trough CSP projects in Morocco and Dubai by ACWA Power IMAGE @ ACWA Power

At the annual SolarPACES conference (held virtually in the second year), Cerro Dominador CEO Fernando Gonzalez answered questions from the International Network of Concentrated Solar Energy Researchers and Developers (CSP) about the exact events of the recent Chilean energy auctions with the Record low bid for CSP below $ 34 / MWh.

How Cerro Dominador offered a record low price

“There are several factors; We have amazing solar resources in Chile so we have a high capacity factor in our facilities and we designed the CSP to have the lower LCOE, ”explained Gonzales.

“We also ran a competitive process to select our EPC contractor. We haven’t selected which one yet – but we have received very competitive offers that we have baked into our offer. And all of the suggestions we received were more or less in the same range, which gives us confidence that this will be achieved. “

Gonzalez announced that the Likana site will consist of three CSP towers of 200 MW each for 600 MW – versus the original 450 MW CSP design with three towers from SolarReserve and over 12 hours of heat storage, giving 7,200 MWh of 100. % solar energy is provided per night.

They have a separate location nearby, Pampa Union, where they can also build 600 MW PV to generate inexpensive PV during the day.

“This combination of CSP plus PV enables us to provide a very competitive solar energy profile to deliver electricity 24 hours a day,” he explained.

“But we will probably build the project in phases. The two projects, the CSP and the PV, will be built when we have the contracts. For this auction we planned the first tower with approx. 200 MW CSP plus 200 MW PV. “

Fernando Gonzales to speak at the SolarPACES conference (back online in 2021)

This solar combination would follow the design of their existing 210 MW Cerro Dominador solar project, which is now operational in the Atacama Desert, which also combines CSP and PV solar fields side by side (110 MW and 100 MW, respectively). It also contains a small battery storage unit for additional flexibility and at the same time generates inexpensive night-time power for longer periods from 17.5 hours of thermal energy storage as part of the CSP system.

Auction design bug

Chile has a goal of ending fossil fuel use, and this 24-hour tranche offer would provide fixed and deliverable 100% renewable full solar generation day and night at record low costs.

However, due to the way that Chilean auctions are designed, this innovative plan has not caught on, as the auction design there does not place emphasis on flexibility or storage from renewable energies.

“The market in Chile works differently than in other parts of the world,” explained Gonzalez. And even if you don’t have any energy, you can buy it on the market to fulfill your contract. “

Because of this, PV developers could actually win a 24-hour contract for nightly electricity supply, even though they are not actually providing nighttime generation, simply by buying electricity after dark. Or they could claim their offering includes battery storage but only state capacity in megawatts, not megawatt hours, and obscure the reality that this may only provide an hour of discharge.

Therefore, even at this record price, the auction was unable to incorporate reliable, proven, long-term CSP storage, although many researchers have shown that this is the key to fully decarbonizing Chilean electricity. Without night storage for renewable energies, the Chilean energy system will continue to rely on more expensive gas or diesel for base load stability.

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