Full environmental life cycle cost analysis of concentrating solar power technology: Contribution of externalities to overall energy costs

Hybridizing CSP with natural gas allows higher overall power outputs due to extended operating hours. However, this strategy involves higher internal costs, resulting in a significant reduction in the revenues (per unit of power generated) and in the net present value of the project. Thus, the existing regulatory system in Spain makes CSP hybridization with natural gas economically unattractive. In addition, the use of natural gas in CSP installations results in a rapid increase in environmental damage as evidenced by higher external costs. For instance, external unit costs of CSP with 30% natural gas were up to 8.6 times higher than in solar-only operation, due primarily to increased greenhouse gas emissions. When the analysis is extended to consider financing through bank loan under common market conditions, the same project shows economic viability for percentages of natural gas hybridization up to 14%. However, solar-only operation remains as the best option.