. "Appendix D: A Summary of the Committee's Concerns About How the Sargent & Lundy Analysis Will Be Used." Letter Report: Critique of the Sargent and Lundy Assessment of Concentrating Solar Power Cost and Performance Forecasts. Washington, DC: The National Academies Press, 2002.
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quotes rather than budgetary estimates from evaluated and qualified vendors; permit requirements; access to power grids and transmission rights; and terms of power purchase agreements and elements of risk therein. Due diligence exercises at earlier phases of project formation usually would address most or all of these issues at lower levels of confidence, and the degree of confidence would be stated at each level of estimate and analysis. This is well settled practice in engineering and due diligence assessments.
Finding: Like all other new energy technologies, CSP faces tough competition from currently lower-cost fossil fuel alternatives, particularly natural gas. Because of low capital costs, high fuel conversion efficiencies, and most importantly, currently low fuel costs with minimal constraints on deliverability, natural gas combined-cycle plants represent the lowest cost option for adding new or replacing old capacity in a size range that overlaps CSP trough and tower technology.
Finding: Because CSP receives its energy from an indigenous renewable resource, its fuel-cycle-related costs are imbedded in the initial capital investment and hence fully insulated against international price instabilities and deliverability problems. Unfortunately, in today’s energy markets, this positive attribute alone does not provide a sufficient incentive to lead to investment in renewable alternatives.
Recommendation: In light of national objectives that include increased energy security, lowering dependence on imported oil and gas to become more energy independent, and lowering environmental impacts both locally and globally, DOE should conduct a technical and economic analysis of its entire portfolio of renewable energy conversion systems with a uniform set of performance and financial assumptions. This analysis could then be compared against alternative conventional systems that will be available in the time frame when renewable systems would be employed.
Recommendation: The committee recommends that a comparison of CSP with other renewable energy technology options be carried out that connects to regional issues—including resource grade and quality, capital and O&M costs, ease of siting and deployment, and energy demand—to national goals as articulated in the National Energy Plan  and DOE’s strategic planning. For example, the high-grade direct insolation resource of the arid Southwest represents a substantial renewable asset in a region with a growing demand for electric power. There are also considerable federal and state lands in the Southwest that are not suitable for agriculture or forestry that would make attractive sites for CSP plants.
Recommendation: Upon successfully completion of the intent of the previous two recommendations, and if the conclusion is positive for CSP plants, the committee recommends that DOE place greater emphasis on supporting U.S. industry by testing critical components for CSP deployment. This effort may include enhancing the current capacity of SunLab to conduct standardized tests to validate the performance and durability of reflectors, heliostats, receivers, storage, and absorber elements to ensure reliability for industrial developers. Furthermore, upgrading current CSP resource assessment capabilities to aid the siting of new generation plants will be needed to