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Storage will make CSP plants financeable in South Africa, says MD

CSP plants with more storage capacity will give generators greater flexibility and help reduce risk to increase project bankability, says Vantage GreenX MD

CSP plant
Vantage GreenX said it can become an incentive for CSP producers in South Africa to build plants with more storage

Storage systems for concentrated solar power (CSP) plants will make projects in South Africa more financeable, an industry MD has said. CSP plants with more storage capacity will give power generators greater flexibility and help reduce risk. This will increase bankability of CSP plant projects in South Africa, the MD of African asset management firm, Vantage GreenX, has said.

The Vantage GreenX managing director, Alastair Campbell, has said it can become an incentive to CSP producers in South Africa to build plants that have at least six hours of storage. CSP plants with more storage have greater capacity to determine when operators want power produced, which in turn gives generators greater flexibility and influence over how much revenue it can earn.

“All of these factors have contributed to a reduction in the risks for CSP, which in turn will make these deals more bankable,” Campbell said.

Campbell said CSP has been positively affected by the decision of the South African Department of Energy (DoE) to increase tariffs for producing power during the peaking hours of the day. This means CSP developers will get paid 2.7 times the agreed tariff rate.

“The tariff uplift in peak hours is forcing CSP developers to structure their deals more like peaking projects than mid merit projects which, when compared against the cost of generating power from gas, or distillate peaking alternatives in South Africa, starts to make a lot more economic sense,” Campbell said.

“Over its lifetime, CSP with storage is probably the cheapest peaking alternative in this country, which in turn will make these projects eminently more financeable,” he added.

Alastair Campbell’s opinions on CSP storage were reported in the latest quarterly update from publication CSP Today. Vantage GreenX will be will be joined at the event, CSP Today South Africa 2014, which takes place in Cape Town from 8 April to 9 April 2014.

CSP has become a steady focus of development in South Africa over the last year. Spanish solar construction company Abengoa completed the tower for South Africa’s first CSP plant in September 2013.