According to a new study from Emerging Energy Research (EER), concentrated solar power (CSP) is the fastest growing utility-scale renewable energy alternative after wind power, with up to $20 billion expected to be invested in CSP over the next five years.
‘With natural gas prices tripling and current volatility expected to continue, CSP is well-positioned to compete against other electricity generation technologies in the near-to-medium term,’ says Reese Tisdale, EER's senior analyst.
‘In countries such as the U.S. and Spain with higher solar resources, land availability and sufficient government support to kick-start the industry, utility-scale solar CSP technology has the potential to become an integral part of the generation mix,’ Tisdale adds.
Spain and the U.S. are currently the two epicenters for the global CSP industry, EER notes. CSP installations in these two countries are expected to surpass a combined 7,500 MW by 2020, according to the study. Spain's favorable feed-in tariffs provide the most stable regulatory environment in the short term, creating a slow but steady growth path for CSP alongside its history of wind power development.
Outside Spain and the U.S., Italy, France, Portugal and Greece are on the cusp of breaking through with CSP developments, as well as parts of the Middle East and North Africa. The southern European countries are looking at improved regulatory incentives to drive 3,200 MW of capacity installation by 2020, EER says.
‘2007 has been a pivotal year for CSP development, as developers Acciona Solar Power and Abengoa Solar have inaugurated 65 MW of parabolic trough and 11 MW of central receiver technologies, respectively,’ says Tisdale.
With a 17-year history of proven parabolic trough technology and almost 6 GW in the announced project pipeline over the next five years, all indications are that CSP is moving to the forefront of renewable energy technologies, EER remarks.
However, although proven operation has made trough technology the most credible of the leading CSP technologies, its head start will soon begin to diminish as central receiver and other technologies are realized at a commercial scale, according to EER's study. By 2010, the market will have a solid view of the potential offered by central receiver, dish engine and linear fresnel technologies.
‘Abengoa has made a major step by installing its 11 MW central receiver project, PS10, outside of Seville,’ Tisdale says. ‘This project currently represents the first legitimate challenge to parabolic trough technology.’
The CSP industry has only just begun its resurgence, and there has been a proliferation of new entrants up and down the value chain – from technology innovators looking to change the economics of CSP to investors and IPPs looking to gain first-mover advantages by tying up sites.
At one end of the project development spectrum is a leading group of independent technology promoters – including Solel, Solar Millennium, Abengoa Solar, Ausra, BrightSource Energy, SkyFuel and Stirling Energy Systems – which are looking to leverage their specialized technology capabilities to gain a competitive advantage, EER says. On the opposite end of the development value chain are those IPPs and utilities that have already built or acquired GW portfolios of renewable power generation assets and are now investing in CSP.
‘It is no surprise that the largest owners of wind power plant globally are also emerging as significant players in CSP,’ says Tisdale. These players, led by Iberdrola, FPL Energy, Acciona and EDP are looking to add CSP projects to their mounting wind portfolios as a means to diversity other utility scale technologies. FPL Energy, notes Tisdale, is currently the leading IPP investor in CSP, with its ownership of seven solar plants in California built in the late 1980s.
‘As the solar CSP industry evolves, we can expect significant movement in both directions along the project value chain,’ says Tisdale. Technology promoters will fill out project execution capabilities, and utilities and IPPs will build upstream project pipelines and technology capabilities.
EER's global CSP market study, ‘Global Concentrated Solar Power Markets and Strategies, 2007-2020,’ analyzes global CSP resources, market drivers, technology and cost trends, and provides competitive analyses of project developers and CSP power plant supply. For more information, visit www.emerging-energy.com.