Future looks bright for CST power as decarbonisation focus shifts beyond 2030
Article originally published in PV Magazine
October 2023 may prove to be a turning point in Australia’s energy transition. For the first time, I heard broader public debate about the need to begin implementing decarbonisation activities and strategies that target post-2030 emission reduction targets.
This includes calls for more investment in long duration (10-plus hour) intraday renewable energy storage to progressively displace coal and gas usage at night. Proponents argue that the systematic deployment of long-duration storage could enable Australia to more readily achieve its emission reduction targets, move more quickly to a high renewable energy system (over 80%), and achieve this at a lower cost to energy users.
Understandably, much of the government and industry focus up to this point has been on achieving 2030 emission reduction targets, which typically fall between 30% to 50%. While decarbonisation is by no means easy, there are well proven technology pathways available to achieve these 2030 emission reduction targets. In simple terms, it’s deploying solar PV and wind at-scale as quickly as possible, backed up with several hours of battery storage to manage peaks and provide grid services. That’s where investment has focused to date, because it is the easiest, and least risk pathway to meet government and industry 2030 targets.
However, a question is increasingly being asked – is it the timeliest and most cost-effective pathway over the longer term to achieve net zero? There is a risk that our current 2030 focus could see us continue to rely on fossil fuels for a longer period of time and for a higher proportion of our energy needs, particularly for overnight electricity and hard-to-abate industries.
What is required is a whole-of-system approach that enables a more balanced portfolio of short- and longer-term decarbonisation initiatives.
A new report commissioned by the Australian Solar Thermal Research Institute (ASTRI) provides insights for policymakers and decisionmakers about the value of early investment in longer duration (10-plus hours), intraday energy storage technologies. The report clearly indicates that investment in such technologies can not only contribute to meeting our 2030 decarbonisation targets but can also make the net-zero pathway to 2050 easier and ensure capital is allocated efficiently, thereby minimising costs to society.
The Australian Concentrating Solar Thermal (CST) Value Proposition prepared by engineering firm Fichtner and assisted by consultancy ITP Renewables, assesses CST’s role and value across four Australian use cases: grid connected power; remote area power (mining); industrial process heat; and green fuels production. The report’s findings show that CST has a major role to play in cost-effectively decarbonising electricity, industry and fuels over the short- and long-term.
For those readers not familiar with CST, it is a renewable technology that uses mirrors to capture and concentrate the sun’s energy which is then stored as thermal energy (up to 1,000°C). The technology stores between 12 to 20 hours of thermal on a daily cycle, which can then be used to generate electricity, process heat, or both.
One of the key advantages of CST is that the electricity or heat that it generates is fully dispatchable – it can be used on demand at any time of day or night. CST is also a complementary technology to solar PV / wind with several hours of battery storage. While the sun is shining, PV generates daytime power while CST stores thermal energy. When the sun goes down, CST is then available to generate firm power for 12 to 15 hours overnight. When used in this manner, CST with solar PV delivers the best energy system outcome from a cost and emission abatement perspective. It is also the best combination to progressively replace dispatchable coal and gas-fired generation.
Grid connected power
The inherent value of CST systems in grid connected applications is their long intraday storage, which can be used to generate fully dispatchable electricity for 12 to 15 hours overnight. In essence, CST systems use their intraday storage to fill in the gaps when variable wind and solar PV generation cannot meet demand. CST can also provide similar grid services to that currently being provided by gas and coal power plants.
The report found that a realistic uptake trajectory beginning around 2025, while likely to require some initial policy intervention, would see steady CST growth that would leave Australia’s electricity system around $10 billion better off by 2050. This is largely due to the avoidance of unnecessary spending on other storage technologies (e.g. 4-plus hour-long duration battery storage systems). In essence, the report indicates that taking a long-term approach to energy system planning is going to be critical in optimising spending and achieving Australia’s emissions reductions targets out to 2020 and beyond.
The report assessed CST in the National Electricity Market (NEM) and Western Australia’s South West Interconnected System (SWIS). The NEM modelling indicates CST uptake of 5.6 GW by 2050, dispatching around 10% of total electricity. SWIS modelling suggests rapid CST uptake from 2030 onwards growing to 840 MW by 2050 and dispatching as much as 20% of total electricity.
Remote area power generation (mining)
Most of Australia’s major miners are racing to meet ambitious emissions reductions targets and are quickly realising they will be unable to achieve cost effective, 100% emissions free power with PV, wind and batteries alone.
However, CST offers reasons for optimism. The report found that combining CST with solar PV and (in some cases) wind, results in the lowest Levelised Cost of Energy (LCoE) for remote area power generation. Miners who are not considering CST as part of their future plans risk losing out with higher costs of production due to rising fossil fuel and carbon costs. This is in contrast to companies that invest early in CST, who gain access to low cost, emissions free power.
Industrial process heat
Manufacturers are also struggling with achieving decarbonisation targets. Where sufficient on-site land is available, and in areas with moderate to high solar radiation, the report finds that CST is the most cost effective technology pathways for the capture and storage of mid- to high-temperature process heat.
The report indicates that CST systems can help to reduce and ultimately eliminate manufacturers’ dependence on gas. The report found that based on current costs, and good solar radiation, CST is cost competitive for gas prices above $16.7/GJ ($60/MWh) and for renewable heat shares of up to 70 – 75%. Moving forward, the report indicates that by 2030, the cost of CST generated heat is expected to fall by up to 20%, resulting in a cost competitive solution for gas prices above $12.5/GJ ($45/MWh).
Green Fuels Production
Perhaps the most surprising and promising finding from the report was CST’s potential to produce least cost renewable fuels. This included green hydrogen (using Solid Oxide Electrolysis), ammonia and methanol. With respect to methanol, the report indicated that the use of CST could achieve a cost reduction of up to 40% compared with alternative renewable pathways.
The report found that CST’s ability to deliver a combined heat and power solution within the one technology has major production, and cost benefits. Specifically, it provides an optimal balance of renewable power for hydrogen production and 24/7 production stability, alongside renewable heat for improved fuel production synthesis.
The report noted that, with the shipping and aviation industries seeking to wean themselves off dirty fuels, CST provides a clean, and low-cost alternative. Given its climate and high levels of sunshine, Australia is the ideal place to deploy CST at-scale for green fuel production, with the potential to create a new export industry that can help replace the country’s dependence on coal and gas exports.
What next?
Now it’s over to policymakers and industry. The challenge ahead of us is clear, and the report shows the pivotal role CST can play in overcoming it. However, getting CST deployed requires a shift in thinking and policy that balances investment in short- and long-term outcomes, with a stronger focus beyond the immediate 2030 emission target horizon.
Dominic Zaal
Director, Australian Solar Thermal Research Institute
Energy Business Unit | CSIRO
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