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Prior to the NRC report in 2002, the last CSP plant to be built was an 80 MW trough plant built in the Mojave Desert in California in 1991. It was the ninth trough plant in a group called the Solar Energy Generating System (SEGS), which has a total capacity of 354 MW and continues to operate today. The expiration of Federal solar tax credits in 1990 along with a drop in the cost of electricity production partly due to deregulation rendered any further trough projects uneconomical in California during the subsequent 15 years. 23 The 2000 NRC review found that a major hurdle facing CSP technologies was that they must be relatively large to be competitive, and that large installations are expensive. Parabolic troughs have demonstrated performance and reliability over 20 years of operation in California,24 and the technical feasibility of power tower systems was proven during the mid-1990’s with the 10 MW Solar Two project.25 Both technologies, however, require scales approaching those of fossil-fueled power plants to achieve cost competitiveness with conventional means of electricity generation. Just as for new generation fossil and nuclear plants, such large first-of-a-kind CSP plants are expensive. This led the NRC to conclude “unless there is a significant market intervention by the Federal and/or State governments, an economically feasible project in the United States will not be possible.”26 In addition, it would take several projects to bring the cost down to competitive levels. During a period of restructuring in the utility sector in the 1990s and into the new millennium, there was little incentive for taking a risk on expensive new technologies. A 100 MW CSP plant, for example, could cost $300 million. Further, deregulated utilities had few resources to invest in new technologies. The CSP industry was faced with the conundrum that its technology was too expensive to be deployed even though deployment could have led to lower cost for future CSP installations. This is the same challenge faced by many other innovative power plant technologies as they enter the competitive, commodity-based energy market. CSP Budget $16 The NRC further concluded that “the $14 likelihood of major breakthroughs that will affect cost and performance is small and/or not commensurate with $12 $10 the potential payoff.”27 The report $8 thus indicated that there was little industry support for CSP, that it was $4 too costly to be deployed, and that further R&D would not significantly lower the cost. $6 $2 $0 Although some in the CSP industry strongly objected to the NRC findings,28 in the wake of the NRC report the decision was made by DOE to request phasing out of all CSP activities. DOE’s budget requests for CSP from fiscal year (FY) 2002 through FY 2004 reflected this decision. As shown in Figure 2, the CSP request dropped from $15 million 3 FY01 FY02 FY03 FY04 Fiscal Year FY05 FY06 Figure 2. CSP Budgets Request Appropr. Millions of DollarsPDF Image | 2007 Concentrating Solar Power USA DOE
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