Optimal solar tower configuration and thermal storage management under alternative policy schemes

The transition toward high shares of variable renewable energy (VRE) is redefining power system operation and underscoring the critical role of flexible, dispatchable generation technologies. Concentrated Solar Power (CSP) with thermal energy storage (TES) can meet this need by decoupling solar energy collection from power generation. However, current policy frameworks often undervalue its contribution to grid stability. This study addresses these challenges by evaluating the performance of Solar Tower Power (STP) plants under four distinct policy frameworks (Feed-in Tariff (FIT), Feed-in Premium (FIP), Two-tier Tariff (2TT), and the proposed Two-tier Premium, 2TP). A deterministic 5-min dispatch model, coupled with a 30-year quasi-probabilistic assessment, quantifies long-term techno-economic performance through an optimized strike price framework that surpasses LCOE in reflecting market exposure. Simulations reveal a 9.2–9.5% reduction in annual electricity generation compared to idealized TES models. The 2TP policy delivers the best balance of profitability, flexibility and emission reduction, identifying the 100 MW–12 h STP configuration as optimal. Under FIP policy, capacity payments of approximately 33.5 k€/MW/year are required to maintain technology's costs. Sensitivity analysis shows that WACC, CAPEX, and market volatility are the dominant factors, with strike prices varying from –37% to +14% across scenarios. These findings support the implementation of hybrid remuneration schemes that reward dispatchability and system value. Enhancing CSP competitiveness while minimizing public expenditure requires tailored support mechanisms that align configuration design with evolving power system needs. • Realistic TES model shows 9.5% less output versus simplified storage models. • Strike price outperforms LCOE by reflecting flexibility and market volatility. • Proposed 2TP policy balances fixed pay with peak-hour performance rewards. • 100 MW CSP with 12 h TES under 2TP is the most cost-effective setup. • Capacity payments ensure CSP bankability under market-exposed policies.