IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v335y2023ics0306261923001186.html
   My bibliography  Save this article

Market profitability of CSP-biomass hybrid power plants: Towards a firm supply of renewable energy

Author

Listed:
  • Gutiérrez-Alvarez, R.
  • Guerra, K.
  • Haro, P.

Abstract

CSP-biomass hybrid power plants are promising options for displacing electricity from flexible fossil systems and increasing the share of dispatchable renewable energy in power grids. However, they are investment-intensive technologies whose competitiveness in electricity markets is still uncertain. This paper explores for the first time the profitability of CSP-biomass hybrid systems, assuming their participation as price-taking technologies in the Iberian day-ahead electricity market. For this purpose, a new economic evaluation metric called the Profitability Factor is proposed to extend the scope of the levelized cost of electricity (LCOE) by including the variability of market electricity prices. Besides, a stochastic approach integrating uncertainty related to investment costs, electricity prices and biomass costs through Monte-Carlo sampling methods has been applied. Results show that CSP-biomass schemes have up to 33% probability of being profitable in the electricity market before considering external financial support. High biomass share (approx. 76%) leads to a profitability increase of up to 0.11 USD/kWh (median value) compared to an equivalent CSP stand-alone plant. In addition, best-performing hybrid configurations would require a maximum add-in tariff between 0.040 and 0.071 USD/kWh (95% probability) to achieve grid parity. The resulting external financial support is significantly lower than those set through Power Purchase Agreements for the first generation CSP stand-alone plants (still in operation). Thus, CSP-biomass hybrid plants could provide flexibility and other services to power grids, which, if valued in the electricity market, would further increase the technology's competitiveness.

Suggested Citation

  • Gutiérrez-Alvarez, R. & Guerra, K. & Haro, P., 2023. "Market profitability of CSP-biomass hybrid power plants: Towards a firm supply of renewable energy," Applied Energy, Elsevier, vol. 335(C).
    • Handle: RePEc:eee:appene:v:335:y:2023:i:c:s0306261923001186
    DOI: 10.1016/j.apenergy.2023.120754
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261923001186
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2023.120754?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Simsek, Yeliz & Mata-Torres, Carlos & Guzmán, Amador M. & Cardemil, Jose M. & Escobar, Rodrigo, 2018. "Sensitivity and effectiveness analysis of incentives for concentrated solar power projects in Chile," Renewable Energy, Elsevier, vol. 129(PA), pages 214-224.
    2. Saidur, R. & Abdelaziz, E.A. & Demirbas, A. & Hossain, M.S. & Mekhilef, S., 2011. "A review on biomass as a fuel for boilers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(5), pages 2262-2289, June.
    3. Khan, Jibran & Arsalan, Mudassar H., 2016. "Solar power technologies for sustainable electricity generation – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 414-425.
    4. Amadei, C.A. & Allesina, G. & Tartarini, P. & Yuting, Wu, 2013. "Simulation of GEMASOLAR-based solar tower plants for the Chinese energy market: Influence of plant downsizing and location change," Renewable Energy, Elsevier, vol. 55(C), pages 366-373.
    5. Fichter, Tobias & Soria, Rafael & Szklo, Alexandre & Schaeffer, Roberto & Lucena, Andre F.P., 2017. "Assessing the potential role of concentrated solar power (CSP) for the northeast power system of Brazil using a detailed power system model," Energy, Elsevier, vol. 121(C), pages 695-715.
    6. Pantaleo, Antonio M. & Camporeale, Sergio M. & Sorrentino, Arianna & Miliozzi, Adio & Shah, Nilay & Markides, Christos N., 2020. "Hybrid solar-biomass combined Brayton/organic Rankine-cycle plants integrated with thermal storage: Techno-economic feasibility in selected Mediterranean areas," Renewable Energy, Elsevier, vol. 147(P3), pages 2913-2931.
    7. Karimi, M. & Mokhlis, H. & Naidu, K. & Uddin, S. & Bakar, A.H.A., 2016. "Photovoltaic penetration issues and impacts in distribution network – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 594-605.
    8. Ueckerdt, Falko & Hirth, Lion & Luderer, Gunnar & Edenhofer, Ottmar, 2013. "System LCOE: What are the costs of variable renewables?," Energy, Elsevier, vol. 63(C), pages 61-75.
    9. Powell, Kody M. & Rashid, Khalid & Ellingwood, Kevin & Tuttle, Jake & Iverson, Brian D., 2017. "Hybrid concentrated solar thermal power systems: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 215-237.
    10. del Río, Pablo & Peñasco, Cristina & Mir-Artigues, Pere, 2018. "An overview of drivers and barriers to concentrated solar power in the European Union," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1019-1029.
    11. Wagner, Sharon J. & Rubin, Edward S., 2014. "Economic implications of thermal energy storage for concentrated solar thermal power," Renewable Energy, Elsevier, vol. 61(C), pages 81-95.
    12. Boukelia, T.E. & Arslan, O. & Mecibah, M.S., 2017. "Potential assessment of a parabolic trough solar thermal power plant considering hourly analysis: ANN-based approach," Renewable Energy, Elsevier, vol. 105(C), pages 324-333.
    13. Haro, P. & Ollero, P. & Villanueva Perales, A.L. & Gómez-Barea, A., 2013. "Thermochemical biorefinery based on dimethyl ether as intermediate: Technoeconomic assessment," Applied Energy, Elsevier, vol. 102(C), pages 950-961.
    14. Hirbodi, Kamran & Enjavi-Arsanjani, Mahboubeh & Yaghoubi, Mahmood, 2020. "Techno-economic assessment and environmental impact of concentrating solar power plants in Iran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 120(C).
    15. Gutiérrez, R.E. & Haro, P. & Gómez-Barea, A., 2021. "Techno-economic and operational assessment of concentrated solar power plants with a dual supporting system," Applied Energy, Elsevier, vol. 302(C).
    16. Arnold, Uwe & Yildiz, Özgür, 2015. "Economic risk analysis of decentralized renewable energy infrastructures – A Monte Carlo Simulation approach," Renewable Energy, Elsevier, vol. 77(C), pages 227-239.
    17. Aly, Ahmed & Bernardos, Ana & Fernandez-Peruchena, Carlos M. & Jensen, Steen Solvang & Pedersen, Anders Branth, 2019. "Is Concentrated Solar Power (CSP) a feasible option for Sub-Saharan Africa?: Investigating the techno-economic feasibility of CSP in Tanzania," Renewable Energy, Elsevier, vol. 135(C), pages 1224-1240.
    18. Parrado, C. & Marzo, A. & Fuentealba, E. & Fernández, A.G., 2016. "2050 LCOE improvement using new molten salts for thermal energy storage in CSP plants," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 505-514.
    19. Poghosyan, V. & Hassan, Mohamed I., 2015. "Techno-economic assessment of substituting natural gas based heater with thermal energy storage system in parabolic trough concentrated solar power plant," Renewable Energy, Elsevier, vol. 75(C), pages 152-164.
    20. Peterseim, Juergen H. & White, Stuart & Tadros, Amir & Hellwig, Udo, 2013. "Concentrated solar power hybrid plants, which technologies are best suited for hybridisation?," Renewable Energy, Elsevier, vol. 57(C), pages 520-532.
    21. Guerra, K. & Haro, P. & Gutiérrez, R.E. & Gómez-Barea, A., 2022. "Facing the high share of variable renewable energy in the power system: Flexibility and stability requirements," Applied Energy, Elsevier, vol. 310(C).
    22. Kost, Christoph & Flath, Christoph M. & Möst, Dominik, 2013. "Concentrating solar power plant investment and operation decisions under different price and support mechanisms," Energy Policy, Elsevier, vol. 61(C), pages 238-248.
    23. Peterseim, Juergen H. & White, Stuart & Tadros, Amir & Hellwig, Udo, 2014. "Concentrating solar power hybrid plants – Enabling cost effective synergies," Renewable Energy, Elsevier, vol. 67(C), pages 178-185.
    24. Malagueta, Diego & Szklo, Alexandre & Borba, Bruno Soares Moreira Cesar & Soria, Rafael & Aragão, Raymundo & Schaeffer, Roberto & Dutra, Ricardo, 2013. "Assessing incentive policies for integrating centralized solar power generation in the Brazilian electric power system," Energy Policy, Elsevier, vol. 59(C), pages 198-212.
    25. Asadullah, Mohammad, 2014. "Barriers of commercial power generation using biomass gasification gas: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 201-215.
    26. Falconett, Irina & Nagasaka, Ken, 2010. "Comparative analysis of support mechanisms for renewable energy technologies using probability distributions," Renewable Energy, Elsevier, vol. 35(6), pages 1135-1144.
    27. Pantaleo, Antonio M. & Camporeale, Sergio M. & Miliozzi, Adio & Russo, Valeria & Shah, Nilay & Markides, Christos N., 2017. "Novel hybrid CSP-biomass CHP for flexible generation: Thermo-economic analysis and profitability assessment," Applied Energy, Elsevier, vol. 204(C), pages 994-1006.
    28. Islam, Md Tasbirul & Huda, Nazmul & Abdullah, A.B. & Saidur, R., 2018. "A comprehensive review of state-of-the-art concentrating solar power (CSP) technologies: Current status and research trends," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 987-1018.
    29. Munoz, L.A. Hurtado & Huijben, J.C.C.M. & Verhees, B. & Verbong, G.P.J., 2014. "The power of grid parity: A discursive approach," Technological Forecasting and Social Change, Elsevier, vol. 87(C), pages 179-190.
    30. Vossos, Vagelis & Gerber, Daniel & Bennani, Youness & Brown, Richard & Marnay, Chris, 2018. "Techno-economic analysis of DC power distribution in commercial buildings," Applied Energy, Elsevier, vol. 230(C), pages 663-678.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xi, Yufei & Zhang, Zhengfa & Zhang, Jiansheng, 2024. "Multi-objective optimization strategy for regional multi-energy systems integrated with medium-high temperature solar thermal technology," Energy, Elsevier, vol. 300(C).
    2. Ouyang, Tiancheng & Pan, Mingming & Huang, Youbin & Tan, Xianlin & Qin, Peijia, 2023. "Thermodynamic design and power prediction of a solar power tower integrated system using neural networks," Energy, Elsevier, vol. 278(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gutiérrez, R.E. & Haro, P. & Gómez-Barea, A., 2021. "Techno-economic and operational assessment of concentrated solar power plants with a dual supporting system," Applied Energy, Elsevier, vol. 302(C).
    2. Gutiérrez, R.E. & Guerra, K. & Haro, P., 2022. "Exploring the techno-economic feasibility of new bioeconomy concepts: Solar-assisted thermochemical biorefineries," Applied Energy, Elsevier, vol. 322(C).
    3. Merchán, R.P. & Santos, M.J. & Medina, A. & Calvo Hernández, A., 2022. "High temperature central tower plants for concentrated solar power: 2021 overview," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    4. Middelhoff, Ella & Madden, Ben & Ximenes, Fabiano & Carney, Catherine & Florin, Nick, 2022. "Assessing electricity generation potential and identifying possible locations for siting hybrid concentrated solar biomass (HCSB) plants in New South Wales (NSW), Australia," Applied Energy, Elsevier, vol. 305(C).
    5. McPherson, Madeleine & Mehos, Mark & Denholm, Paul, 2020. "Leveraging concentrating solar power plant dispatchability: A review of the impacts of global market structures and policy," Energy Policy, Elsevier, vol. 139(C).
    6. Keyif, Enes & Hornung, Michael & Zhu, Wanshan, 2020. "Optimal configurations and operations of concentrating solar power plants under new market trends," Applied Energy, Elsevier, vol. 270(C).
    7. Hoz, Jordi de la & Martín, Helena & Montalà, Montserrat & Matas, José & Guzman, Ramon, 2018. "Assessing the 2014 retroactive regulatory framework applied to the concentrating solar power systems in Spain," Applied Energy, Elsevier, vol. 212(C), pages 1377-1399.
    8. Ji, Junping & Tang, Hua & Jin, Peng, 2019. "Economic potential to develop concentrating solar power in China: A provincial assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 114(C), pages 1-1.
    9. Soria, Rafael & Portugal-Pereira, Joana & Szklo, Alexandre & Milani, Rodrigo & Schaeffer, Roberto, 2015. "Hybrid concentrated solar power (CSP)–biomass plants in a semiarid region: A strategy for CSP deployment in Brazil," Energy Policy, Elsevier, vol. 86(C), pages 57-72.
    10. Pantaleo, Antonio M. & Camporeale, Sergio M. & Sorrentino, Arianna & Miliozzi, Adio & Shah, Nilay & Markides, Christos N., 2020. "Hybrid solar-biomass combined Brayton/organic Rankine-cycle plants integrated with thermal storage: Techno-economic feasibility in selected Mediterranean areas," Renewable Energy, Elsevier, vol. 147(P3), pages 2913-2931.
    11. Tazi, Nacef & Safaei, Fatemeh & Hnaien, Faicel, 2022. "Assessment of the levelized cost of energy using a stochastic model," Energy, Elsevier, vol. 238(PB).
    12. Arias, I. & Cardemil, J. & Zarza, E. & Valenzuela, L. & Escobar, R., 2022. "Latest developments, assessments and research trends for next generation of concentrated solar power plants using liquid heat transfer fluids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    13. Islam, Md Tasbirul & Huda, Nazmul & Abdullah, A.B. & Saidur, R., 2018. "A comprehensive review of state-of-the-art concentrating solar power (CSP) technologies: Current status and research trends," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 987-1018.
    14. Elmorsy, Louay & Morosuk, Tatiana & Tsatsaronis, George, 2022. "Comparative exergoeconomic evaluation of integrated solar combined-cycle (ISCC) configurations," Renewable Energy, Elsevier, vol. 185(C), pages 680-691.
    15. Georgios E. Arnaoutakis & Georgia Kefala & Eirini Dakanali & Dimitris Al. Katsaprakakis, 2022. "Combined Operation of Wind-Pumped Hydro Storage Plant with a Concentrating Solar Power Plant for Insular Systems: A Case Study for the Island of Rhodes," Energies, MDPI, vol. 15(18), pages 1-23, September.
    16. Xiaoru Zhuang & Xinhai Xu & Wenrui Liu & Wenfu Xu, 2019. "LCOE Analysis of Tower Concentrating Solar Power Plants Using Different Molten-Salts for Thermal Energy Storage in China," Energies, MDPI, vol. 12(7), pages 1-17, April.
    17. Petrollese, Mario & Cocco, Daniele, 2020. "Techno-economic assessment of hybrid CSP-biogas power plants," Renewable Energy, Elsevier, vol. 155(C), pages 420-431.
    18. Soria, Rafael & Lucena, André F.P. & Tomaschek, Jan & Fichter, Tobias & Haasz, Thomas & Szklo, Alexandre & Schaeffer, Roberto & Rochedo, Pedro & Fahl, Ulrich & Kern, Jürgen, 2016. "Modelling concentrated solar power (CSP) in the Brazilian energy system: A soft-linked model coupling approach," Energy, Elsevier, vol. 116(P1), pages 265-280.
    19. Palacios, A. & Barreneche, C. & Navarro, M.E. & Ding, Y., 2020. "Thermal energy storage technologies for concentrated solar power – A review from a materials perspective," Renewable Energy, Elsevier, vol. 156(C), pages 1244-1265.
    20. Mahmoudimehr, Javad & Sebghati, Parvin, 2019. "A novel multi-objective Dynamic Programming optimization method: Performance management of a solar thermal power plant as a case study," Energy, Elsevier, vol. 168(C), pages 796-814.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:335:y:2023:i:c:s0306261923001186. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.