Morocco expects price drop for hybrid CSP plant, widens

funding sources
May 16, 2018

Design innovations and a favorable development framework should see Morocco hit its lowest prices for

the hybrid PV-CSP Noor Midelt project and the country is joining global support schemes to diversify its

funding supply, an official at the Moroccan Agency for Sustainable Energy (Masen), said.

ACWA Power's Noor III CSP tower plant. Bidders for the hybrid Noor Midelt project are free to propose either tower

or parabolic trough designs for the CSP section.

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Morocco's renewables procurement process has been a key driver of CSP deployment in the Middle East and North

Africa (MENA). Morocco has set a target of 40% of installed capacity from renewable resources by 2020, rising to

52% by 2030, equivalent to 6 GW of new capacity.

Managed by Masen, the renewable program supported the construction of the 160 MW Noor I parabolic trough plant

with three hours storage, operational since 2015. The 200 MW Noor II parabolic trough plant and 150 MW Noor III

CSP tower plant, both with over seven hours storage, will also come online by the end of this year, in addition to the

170 MW Noor PVI project. Noor I, II and III and PV1 have all been developed by Saudi Arabia's ACWA Power and

partners.

Following ground-breaking stand-alone CSP projects, Morocco now looks set to help pioneer hybrid PV-CSP

development through its Noor Midelt project.

Morocco has launched a request for proposals for two hybrid solar plants at Noor Midelt, which will each have a

gross CSP capacity of between 150 MW and 190 MW and include storage capacity. The two plants will be built by

different developers and technology can be parabolic trough or tower while the exact PV capacity must be defined by

the bidder.

Five CSP consortia have prequalified for the Noor Midelt project, led by ACWA Power, France's EDF EN, Engie

(formerly GDF Suez), Germany's Innogy and Japan's JGC.

Morocco has kept in place a "plug and play" approach to plant procurement used for earlier CSP tenders where many

development and financial risks are assumed by Masen.

This framework allows developers to focus on optimizing project costs and should result in a lower tariff for Noor

Midelt than on previous projects, Meryem Lakhssassi, Sustainable Development Officer, Masen, told the MENA

New Energy 2018 conference in Dubai on April 24. Morocco’s CSP tariff prices have already dropped sharply,

from 1.62 for the Noor I project to 1.36 for Noor II, Lakhssassi noted.

"We hope [the tariff] will continue to decrease, that is the objective," she said.

Global auction results suggest that CSP could provide electricity at prices between $60/MWh and $100/MWh by

2020, the International Renewable Energy Agency (IRENA) said in a recent report. In September 2017, Dubai

awarded ACWA Power the 700 MW DEWA CSP project at a tariff price of $73/MWh, under a 35-year power

purchase agreement (PPA). China’s Shanghai Electric will deliver the plant in the group’s first major CSP
contract outside of China.
Supply gap

Morocco's support for CSP with storage comes from a combination of renewable energy priorities and a direct market

need for night time power.

"The main objective of the Moroccan energy strategy is to reach 52% of installed capacity from renewables...Given

the fact that the peak hour in Morocco is after sunset, the energy storage was inevitable," Lakhssassi said.

The dispatch capabilities of CSP with storage meets the nation’s requirements for load matching, construction lead

times, and grid reliability. The operation of the Noor I plant led to a "drastic improvement" on the quality of

electricity supply in the local region, Abdelkader Himdi, Director of Operations and Maintenance at

MASEN, toldthe CSP Seville 2017 conference in November.

The Noor Midelt project is to be developed through an independent power producer (IPP) scheme in which the

successful consortium designs, finances, builds and operates the plants and sells the electricity to Masen under a 25-

year PPA.

Under Morocco’s procurement framework, Masen assumes a range of responsibilities to reduce the risks for

developers.

Masen acts as offtaker, selling on the power to the Moroccan state, and provides lending resources and minority

shareholder equity to the projects. In addition, Masen manages risks associated with land acquisition and social issues

and carries out a range of studies to reduce development risk, including geotechnical, hydrological and environmental

impact studies.

This process allows the bidders to "focus on proposing the best tariff per kilowatt-hour and the best technical

configuration," Lakhssassi said.

"All these elements are in favour of efficiency, in terms of timing and transaction," she said.

                Other CSP tenders planned in Middle East in 2018

                                                         (Click image to enlarge)

Source: Middle East Solar Industry Association (MESIA) – Solar Outlook Report 2018.
World finance

The Noor plants have benefited from multilateral finance which have produced competitive terms on pricing and

tenor. According to ACWA Power, concessional financing reduced the levelized cost of energy for the Noor I project

by around a quarter, for example.

For Noor I, II and III, Masen obtained long-term funds at a low price from international financial institutions

including the World Bank’s Clean Technology Fund (CTF). Concessionary loans are being provided by the World

Bank, German development bank KfW, African Development Bank (AfDB), European Investment Bank, French

development agency AfDB, and these are on-lent by Masen to the developers.

The financial contracts in place for the Noor projects are lender-friendly and more demanding for the sponsors,

Thierry Tardy, executive director for acquisitions and project finance at ACWA Power, told New Energy
Update in 2016.

The financing terms include a demanding package of representations, warranties and covenants, he said.

The AfDB and the World Bank have already agreed to support Noor Midelt and the programme will receive a $25

million loan from the Climate Investment Funds’ Clean Technology Fund (CIF CTF).

In addition, Masen is continuing to "diversify its financing sources," Lakhssassi told the conference in Dubai.

The Moroccan authorities are currently progressing through the accreditation process for the Green Climate Fund

(GDF) while other potential sources include participation in the global Clean Development Mechanism or Gold

Standard, she said.

Site advantages

The Midelt developers also benefit from a range of site characteristics that will help lower the tariff price.

Direct Normal Irradiance (DNI) at the site is approximately 2,360 kWh per square-meter per year and the site consists

of a large flat land area of approximately 4,000 hectares. In addition, the plants will gain grid connections and access

to water supply from a dam located around 15 km from the site.

The Moroccan authorities launched the request for proposals (RfP) phase for the Noor Midelt project in July 2017

and developers will soon move forward to final bids and financial terms. Following an initial technical offer, all the

shortlisted bidders enter into a Q&A session with Masen after which initial technical bids can be amended before

financial offers are submitted.

"We are expecting to sign and close the project by the end of the year, or early 2019," Lakhssassi said.

New Energy Update

Abengoa Dubai contract valued at $650mn; US to inject $72mn

into high-temperature designs
May 16, 2018

Our pick of the latest solar thermal news you need to know
Abengoa's 100 MW Xina Solar One plant in South Africa. (Image credit: Abengoa)

Related Articles

o China-backed $4bn CSP project set for financial close by August

o Morocco expects price drop for hybrid CSP plant, widens funding sources

o China-backed $4bn CSP project set for financial close by August

o China, UAE lead new wave of CSP cost cuts as storage demand grows

Abengoa’s Dubai supply contract valued at around $650 million

Abengoa's contract to supply three 200 MW parabolic trough plants to the 700 MW DEWA CSP project in Dubai is

valued at approximately $650 million, the Spanish company said in a statement May 9.

Last month, Saudi Arabia’s ACWA Power signed an Engineering, Procurement, and Construction (EPC) contract

with Shanghai Electric, a major Chinese power company, to install the DEWA CSP project.

The dual-technology DEWA CSP project, awarded by the Dubai Electricity and Water Authority (DEWA) in

September 2017, sets a new industry record for size and cost-efficiency.

The project will require 14.2 Billion AED ($3.9 billion) in investment and will consist of three 200 MW parabolic

trough systems and a 100 MW central tower plant. The project was awarded at a tariff price of $73/MWh and

includes up to 15 hours of energy storage capacity.

Abengoa and U.S. developer BrightSource are the respective technology providers for the parabolic trough and

central tower plants, bringing decades of CSP industry experience to the project.

Abengoa will provide the parabolic trough technology and will be the key subcontractor of the solar field on a lump

sum turnkey basis, the company said in its statement. The solar field for the three parabolic trough plants spans

approximately 28 square kilometres, it said.

Project documents for the 700 MW plant, including the power purchase agreement (PPA) with DEWA and EPC

contracts, have been signed and talks with financial lenders are at a "very advanced stage," Meriem Bellizim, ACWA

Power’s project manager for the DEWA 700 MW CSP project, told the MENA New Energy 2018 conference on

April 24.
Industrial and Commercial Bank of China (ICBC) is mandated lead arranger for a $1.5 billion senior loan. ICBC,

Bank of China and Agricultural Bank of China will together provide almost 80% of senior debt.

Financial partners-- which involve local, and international investors including Chinese groups-- are currently working

through conditions precedent, Bellizim said.

"Financial close will be around the end of July, maybe the beginning of August," she said.

Dubai to tender 300 MW CSP plant by Q1 2019

The Dubai Electricity and Water Authority (DEWA) will launch a tender for a further 300 MW of CSP capacity with

storage before the first quarter of 2019, Saeed Al Tayer, chief executive of DEWA, said May 1.

According to The National newspaper, the 300 MW project will be located at the Mohammed bin Rashid Al

Maktoum Solar Park, raising the total CSP capacity at the park to 1 GW. Including PV, DEWA plans to build 5 GW

of solar capacity at the park by 2030.

DEWA plans to spend around Dh81 billion ($22.3 billion) over the next five years to develop its energy

infrastructure, Al Tayer reportedly said. Around half of this amount would be spent on independent power producer

(IPP) projects, he said.

Abengoa wins contracts to supply two Chinese CSP plants

Spain’s Abengoa is to provide technology and engineering resources to the 50 MW LuNeng Haixi CSP tower plant

project in Qinghai, China and the 50 MW Royal Tech Yumen parabolic trough plant in Gansu province, the company

announced May 3.

The LuNeng Haixi plant is being developed by the Luneng Group, a wholly-owned subsidiary of the State Grid

Corporation of China. Abengoa will also provide technical support during construction, the company said in a

statement. No construction date was provided.

For the Royal Tech Yumen project, Abengoa will supply its E2 collector technology, as well as engineering

development and technical support.

"This project will be developed for SRT (Shuangliang Royal Tech CSP Technology Co., Ltd), a company dedicated

to investigating and promoting solar thermal concentration technologies," Abengoa said.

The Royal Tech Yumen forms part of China's CSP Commercial Demonstration Pilot Program which will see 20 CSP

projects built for a total capacity of 1.35 GW. 

US to provide $72 million to high-temperature CSP testing

The U.S. Department of Energy (DOE) is to provide $72 million to research into advanced high temperature CSP

plants with storage, the DOE announced May 15.

The Generation 3 CSP research program aims to achieve temperatures of at least 700 degrees Celsius, compared with

the highest commercially available temperatures of 565 degrees C, the DOE said in a statement.

"If successful, these projects will lower the cost of a CSP system by approximately $0.02 per kilowatt-hour

($20/MWh), which is 40 percent of the way to the office’s 2030 cost goals of $0.05 per kilowatt-hour (kWh) for

baseload CSP plants," the department said in a statement.

The research projects will develop integrated assemblies and test components and systems in a wide range of

operational conditions.

Over the next two years, three competing research teams will complete a detailed design for a test facility and a single

awardee will be chosen to construct the proposed facility. The DOE will provide an additional $25 million to build

the test facility, it said.

“These projects will help facilitate the next wave of new technologies and continue the effort to maintain American

leadership in this space,” Daniel Simmons, Principal Deputy Assistant Secretary for the Office of Energy Efficiency

and Renewable Energy, said.

New Energy Update