ANDASOL SOLAR THERMAL POWER PROJECT

The project will be the first large-scale commercial thermal solar power plant to be developed in Europe. It will incorporate state-of-the-art technology with a sizeable European content. The overall project proposed to the Bank concerns a new concentrating solar thermal power (CSP) generation plant with a capacity of 50 MWe, to be developed in a wide valley north of the Sierra Nevada, some 60 km south-east of Granada. The project will benefit from Spanish legislation that provides a fixed tariff for solar thermal power generation equivalent to 3 times the reference tariff in Spain, guaranteed for 25 years, which secures the financial viability of the project.

It is expected that the project itself brings an improvement of solar thermal power plant technology already under development in the US, incorporating innovative elements to raise energy conversion and operating efficiency and to reduce costs somewhat (a medium term objective is to achieve a far more substantial reduction in costs, however). The economic benefits of the project would mostly be linked to the project’s contribution to the deployment and industrialisation of this technology, which is expected to reduce the costs of future applications. The project benefits from support from EU research funds and is in line with the EU energy policy to promote the use of indigenous renewable energy.

The project falls under Annex II of EU Directive 97/11/EC on Environmental Impact Assessment (EIA), and in this case the Spanish authorities have required an EIA to be carried out. The EIA procedure under way includes hydrological and archaeological investigations and presentation of an environmental monitoring programme. The outcome of the EIA procedure, including the possible impact on any sites of nature conservation importance and details of the mitigating measures to be applied have been reviewed by the Bank during appraisal to verify that the project complies with EU policy and legislation in the field of the environment.

The plant will be built under a turn-key engineering, procurement and construction (EPC) contract. The central power block (steam turbine and generator) will be procured on a competitive basis using international enquiry procedures; however, much of the rest of the plant, including the parabolic trough solar thermal collectors and heat storage facilities, will be constructed from highly specialised components and supply contracts will be negotiated with qualified suppliers.

Solar energy.