A meeting organized by Climate Policy Initiative in partnership with the Climate Investment Funds Administrative Unit
To read a CIF blog on the First CSP Dialogue click here
On the 22nd January 2014, Climate Policy Initiative (CPI) hosted the Second Concentrated Solar Power Dialogue in Abu Dhabi. This meeting was the second of three Concentrated Solar Power (CSP) Dialogues that will bring together major actors from the world of solar energy finance to enable a global sharing of experiences and to explore merging lessons in the attempt to scale up effective CSP finance. The dialogues assemble countries receiving support from the Climate Investment Funds (CIF) for CSP projects and host countries involved in other (‘non-CIF’) CSP projects, donor countries, project developers and financiers, multilateral development banks, representatives of the CIF Administrative Unit, and a few selected additional participants.
Welcome and Status of the Project
- Patricia Bliss-Guest, Program Manager, Administrative Unit, Climate Investment Funds
- Thomas C. Heller, Executive Director, Climate Policy Initiative
This session revisited the purpose and objectives of the CSP Dialogues, providing a brief summary of the First CSP Dialogue and introducing focal themes and questions to guide discussions. A tour de table introduced all participants and identified priority areas of interest of the group.
The Eskom Solar One 100 MW CSP Power Tower in South Africa
This session discussed the initial findings of a case study on the Eskom Solar One 100 MW CSP Tower Project in Upington, South Africa. The Eskom plant is an interesting case for studying the effectiveness of CSP financing for several reasons:
- It will be the largest CSP Tower project in South Africa when completed in 2018-2019, and will be developed by Eskom, the state-owned utility.
- The plant includes storage of 9-12 hours, therefore providing reliable power supply to the electricity grid; with the ability to replace coal based power.
- Eskom’s involvement could be crucial for the future development of CSP, because of its important role in the national power sector (owning 95% of the generation capacity). For this project, it is receiving public financing from several bilateral and multilateral development institutions, in addition to providing corporate balance sheet equity.
- The state-owned/publically-funded project offers a financing arrangement different to most other CSP plants. It presents lessons for the future scale-up or replication of financing large-scale CSP projects in regions that have vast potential but lack private investor appetite for more immature and more expensive, yet more suitable CSP technology.
Based on this concrete example, financiers and experts from the host country commented on the roles of the public sector and the private sector (e.g., national policies, financing structure, risk allocation). Chair: Patricia Bliss-Guest, Program Manager, Administrative Unit, Climate Investment Funds Overview Presentation:
- Rodney Boyd, Analyst, Climate Policy Initiative Presentation: Eskom Upington CSP Case Study – Preliminary Insights
Opening Comments:
- Penny Herbst, Corporate Renewables Specialist, Eskom
- Mafalda Duarte, Chief Climate Change Specialist and Climate Investment Funds Coordinator, African Development Bank
Roundtable Discussion
Financing CSP: The Respective Roles of the Public and Private Sector
This session focused on recent developments from the financing perspective, with insights from project developers, technology providers, and both public and private investors. Panelists shared experiences and explored how CSP projects are financed: what is the role of public and private finance for CSP in different markets and for different CSP technologies? In which cases are public players better suited to manage specific investment risks, and what is their exit strategy to avoid crowding out of private capital? Chair: Jonathan Walters, Director, Regional Partnerships and Programs, World Bank Overview Presentation:
- Gianleo Frisari, Analyst, Climate Policy Initiative Presentation: Financing CSP – The Role of the Public and Private Sector
Panelists:
- François Brice, Finance Manager, Shams Power
- Nandita Parshad, Director, Power and Energy Utilities, European Bank for Reconstruction and Development and Harry Boyd-Carpenter, Senior Banker, Power and Energy Utilities, European Bank for Reconstruction and Development Presentation: EBRD – Power and Energy Utilities
- Sachin Patel, Solar Developer and Aniruddha Patil, Team Leader Reliance Power Project, Asian Development Bank Presentation: 100 MW CSP Project, Rajasthan, India
- Dana Younger, Chief Renewable Energy Specialist, International Finance Corporation
Roundtable Discussion
The Role of Public Policy in Encouraging CSP
Based on a number of concrete examples, policymakers and experts from CSP host countries commented on the roles, reasoning, design and evolution of public policies to promote CSP. The discussion focued on the shaping of revenue support policies, such as reverse auctioning of subsidized power purchase agreements, and addressed the question of how to make these policies effective while minimizing costs to the public consumer and mitigating regulatory risks for private investors. The session also touched on the wider enabling environment for CSP investments, including tax incentives. Chair: Shaanti Kapila, Global Support Program Coordinator, Administrative Unit, Climate Investment Funds Framing Presentation:
- Martin Stadelmann, Senior Analyst, Climate Policy Initiative Presentation: Public Policies for Concentrated Solar Power
Panelists:
- Michael Geyer, Director of International Business Development Europe, Africa and Middle East, Abengoa Solar
- Tarun Kapoor, Joint Secretary, Ministry of New and Renewable Energy, India Presentation: Solar Thermal Power Development in India
- Paddy Padmanathan, CEO, ACWA Power Presentation: Morocco: Noor 1 CSP IPP – The Decisive Factor that Convinced this Private Sector Project Developer to Invest in this Project
- Iñaki Perez, CSP Technology Leader, Mott MacDonald Presentation: The Role of Public Policy in Encouraging CSP-Incentive programs for CSP – Lessons Learned
- Michael Taylor, Analyst, International Renewable Energy Agency (IRENA) Presentation: Concentrated Solar Power and the True Cost of Renewables
Roundtable Discussion
Stocktaking Session: What have we learned?
Moderation & wrap up: Barbara Buchner, Senior Director, Climate Policy Initiative The concluding session invited a broad discussion amongst participants to highlight our priorities going forward. Based on the previous sessions, the aim was to draw preliminary lessons and highlight key issues that require further attention to render CSP financing effective. Closing of the meeting by Thomas C. Heller, Executive Director, Climate Policy Initiative and Patricia Bliss-Guest, Program Manager, Administrative Unit, Climate Investment Funds