Engineering and Construction for Sustainability Solar Concentration Workshop World Bank November 5th, 2008

Engineering and Construction for Sustainability Solar Concentration Workshop World Bank November 5th, 2008

Table of Contents 1. Abener General Presentation 2. Solar Thermal Technology. 3. Market - Development Opportunities. 4. Technology Comparison. 5. Abener Major Solar Projects 6. Solar Market Challenges.

Mission and Vision Mission Provide integrated and innovative solutions in the field of energy through promotion, financing search, engineering, construction and operation of new power and industrial plants and the optimization of the existing ones, all within a frame of contribution to sustainable development. Vision Abener intends to reinforce, in the next 5 years, its leadership in the global market for turnkey construction of power and industrial plants with particular emphasis in the areas of biofuel and thermo-solar to consolidate and develop the reached positions in Spain and Latin America, and to expand its presence in other growing markets (European Union, Eastern Europe, Mediterranean Basin and USA). All the activities will be developed with a clear customer-focusing through efficient management of projects and continuous improvement of processes within a frame of common corporative values, identity and culture which encourage the enthusiasm to innovate and search for business opportunities.

Business Areas Solar Thermosolar Power Plants with Tower Technology, CSP and ISCC Biofuels Bioethanol Plant, Biodiesel and ETBE Generation Repowering, Open and Combined Cycles, Engine Power Plants, Cogeneration and Biomass-to-Energy

Magnitudes Solar 751 MW Tower Technology CSP ISCC 31 MW 100 MW 620 MW Bioethanol 3.165.000 m 3 /año Biofuels 1.690 ktep Biodiesel ETBE 200.000 t/año 34.028 t/año Repowering 870 MW Open/Combined Cycles 2.923 MW 3.566 MW Engines 82 MW Generation Cogeneration Biomass 589 MW 54 MW *ktep: thousands of petroleum equivalent tons

Sales Evolution 800 700 698 600 500 400 300 CAGR: 145,3% 353 200 168 100 35 56 84 Business Areas Evolution 0 2001 2002 2005 2006 2007 2008 Solar Biofuels Generation CAGR: Compound Annual Growth Rate 2001 2002 2003 2004 2005 2006 2007 2008

Workforce Workforce growth 1200 1000 1098 800 781 600 538 748 400 317 200 0 131 88 252 2001 2002 2005 2006 2007 2008 Graduated Non- Graduated Abener Energía Abener México Abencs Abencs India Abener EPG

Addresses 6688 6688

Table of Contents 1. Abener General Presentation 2. Solar Thermal Technology. 3. Market - Development Opportunities. 4. Technology Comparison. 5. Abener Major Solar Projects 6. Solar Market Challenges.

Solar Thermal Technology -Definitions Operation It is based on the concept of concentrating solar radiation to produce hot steam or air, which can be subsequently used in conventional power generation plants. Most systems use a concentrating mirror due to its high reflecting power. Main components Concentrator: Different optical elements, suchas mirrors, concentrate the solar radiation onto a point or a line where the receiver is located. Receiver: The receiver absorbs the concentrated solar radiation, and a heat-transporting flux transfers the energy. Receiver Heat-transporting fluid Steam Evaporator Heat Electricity Evaporator: In the evaporator, the heat-transporting flux exchanges its energy for water producing steam. Turbine: The steam drives the turbine producing electricity in a conventional cycle. Concentrators Water

Solar Thermal Technology Types (I) Tower Technology Main components: Heliostat field, tower-mounted receiver, and steam storage system. Operation: The heliostats are programmed to automatically track the sun, according to a solar calendar, and concentrate the radiation onto the receiver. The receiver generates high-temperature saturated steam, which in turn is used to drive a turbine and produce electricity. The storage system guarantees electrical supply, even on cloudy days. CSP Main components: parabolic trough collectors and thermodynamic cycle. Operation: The sun rays are concentrated into a heat absorbing tube, located in the central section of the collectors, through which a heattransporting fluid is pumped. This substance is cold when it enters the tube and is extracted at more than 400 ºC, ready to produce superheated steam. The heat in the steam is transformed into electrical power using a conventional steam turbine.

Solar Thermal Technology Types (II) Dish/Engine Main components: Receiver and Concentrator. Operation: An array of parabolic dish-shaped mirrors to focus solar energy onto a receiver located at the focal point of the dish. Fluid in the receiver is heated to 750 ºC and used to generate electricity in a small engine attached to the receiver. ISCC (Integrated Solar and Combined Cycle) Main components: combined cycle (gas turbine, waste heat recovery boiler, steam turbine, cooling system) and CPC solar field. Operation: The gas-steam combined cycle is a combination of two thermodynamic cycles in a waste heat recovery boiler. The CPC field transfers the thermal energy, generated via a heat-transporting fluid, to the central system, where the energy is converted into electricity.

Table of Contents 1. Abener General Presentation 2. Solar Thermal Technology. 3. Market - Development Opportunities. 4. Technology Comparison. 5. Abener Major Solar Projects 6. Solar Market Challenges.

Development Opportunities (I) "Sow" today to grow internationally over the next 10 years.

Development Opportunities (II) Cost Reduction Increase in energy efficiency Cent /KWh 40 35 30 25 20 15 10 5 0 2007 2010 2015 2020 Time Solar Thermal Photovoltaic Fossil Fuels

Storage Development Opportunities (III) Campo de colectores Parabolic cilindroparabólicos Through Collectors Field The most widespread technology is storage in salts. Operation: Two salt tanks are used to store the heat. -During the loading cycle, the salts exchange heat with the fluid from the solar field, which is stored in the hot tank. -During the unloading cycle, the system simply reverses the previous operation, heating the heat-transporting fluid, which will produce steam to drive the turbine, ultimately generating electricity. Heat-transporting Fluido caloportante fluid Tanque de sales frio Cold tank Turbina Steam de turbine vapor Vapor Steam Evaporador Evaporator Condensador Condensator Tanque de sales caliente Hot tank Desaireador Deaerator Sistemade Cooling refrigeración system Hybridisation The most widespread technology is ISCC ISCC = Combined Cycle + Solar Field Operation: The heat produced by the solar field is used as an aid to generate steam by combined cycle. Thus, part of the fuel is replaced by solar resources.

Typical Business Model Partner A Partner N Commercial Banks Others Loans (Project Finance) Financial Agreements Grants, subsidies, tax credits Return on Equity Equity SPV (Project Company) Turn-key Long term EPC Contract O&M Contract EPC Contractor O&M Contractor Power Purchase Agreement Long term rates Power Company

Table of Contents 1. Abener General Presentation 2. Solar Thermal Technology. 3. Market - Development Opportunities. 4. Technology Comparison. 5. Abener Major Solar Projects 6. Solar Market Challenges.

Technology Comparison Characteristics of Solar Thermal Systems Parabolic Trough Tower Dish Size 30-300 MW 10-50 MW 5-25 kw Operating Temperature 390 ªC 565 ºC 750 ªC Peak Efficiency 20% 23% 29% Net Annual Efficiency 11-16% 7-20% 12-25% Commercial Status Available Commercially/Prototype Prototype Costs USD/m2 630-275 475-200 3.100-320 USD/W 4.0-2.7 4.4-2.5 12.6-1.3 centsusd/kwh 40-12 44-15 - All values are estimatives and indicate changes over a 20 year period.

Table of Contents 1. Abener General Presentation 2. Solar Thermal Technology. 3. Market - Development Opportunities. 4. Technology Comparison. 5. Abener Major Solar Projects 6. Solar Market Challenges.

Major Projects (I) Project Country Business Model Technology Customer Elect. Purchaser PS20 Solar Thermal Power Plant Spain IPP (BOO) Tower Abengoa Solar Red Eléctrica de España Main Data Power 20 MW Collector Area 149.760 m2 Storage Yes (Steam) Date of Operation 2008 Investment 95 Meur Auxiliary fuel Gas HTF n.a.

Major Projects (II) Project Solnova 1 Country Business Model Technology Customer Elect. Purchaser Spain IPP (BOO) Parabolic Trough Collectors Abengoa Solar Red Eléctrica de España Main Data Power 50 MW Collector Area 293.400 m2 Storage No Date of Operation 2009 Investment 275 Meur Auxiliary fuel n.a. HTF Therminol VP-1

Major Projects (III) Project Country Business Model Technology Customer Elect. Purchaser Ain Beni Mathar Morocco EPC + O&M (5 years) ISCC (Parabolic Trough) Office National de l'elctricite (ONE) ONE Main Data Power 450 MW (CC 450 + Solar 20) Collector Area 183.120 m2 Storage No Date of Operation 2010 Investment Auxiliary fuel Gas HTF Therminol VP-1

Major Projects (IV) Project Country Business Model Technology Customer Elect. Purchaser Solana USA (Arizona) IPP (BOO) Parabolic Trough Abengoa Solar APS Main Data Power 280 MW (2 x 140) Collector Area 2.197.440 m2 Storage Yes (molten salt) Date of Operation 2012 Investment approx. 2.000 MUSD Auxiliary fuel n.a HTF Therminol VP-1

Major Projects (V) Project Country Business Model Technology Customer Elect. Purchaser Hassi R'Mel Algeria IPP (BOO) ISCC (Parabolic Trough) SPP1 (Abengoa Solar, Neal, Abener) Sonatrach Main Data Power 170 MW (CC 150 + Solar 20) Collector Area 183.120 m2 Storage No Date of Operation 2010 Investment 316 MEur Auxiliary fuel Gas HTF Therminol VP-1

Table of Contents 1. Abener General Presentation 2. Solar Thermal Technology. 3. Market - Development Opportunities. 4. Technology Comparison. 5. Abener Major Solar Projects 6. Solar Market Challenges.

Challenges (I) Market Generation cost from conventional sources has been rising; solar generation will become more economically attractive (experience and penalty of CO2 emissions). Sector is still in its infancy; in the future it will represent about 3- total generation capacity. Impact of growing emerging markets (China, India). 6% of the Manufacturers Technology improvement must drive their cost down (more significant in PV). Improvement of efficiency (more significant in thermal). Impact of commodities cost (iron, glass, fluid, molten- salt, ).

Challenges (II) Utilities Undertake large long- term investment (directly, partnerships, ). Concentrated solar power is the most attractive for utilities (centralized generation). Regulators They can accelerate the move to cost parity. Subsidies shall play a prominent role to build confidence of investors and attract capital (tax credits, above- market rates, ). Clarify objectives: increase security, lower emissions, job creation, Reward production, not capacity; incentives to reduce costs. Phase out subsidies carefully: adjustment of incentives over time and phase them out when parity is reached.