Many in the cleantech industry 5 years ago (myself included) believed that concentrating solar thermal electric (CSTE) technologies represented the only way to get to competitive solar electricity pricing in the near term.
Very smart people saw the same opportunity in 2008:
“With the current plants, those in construction, those under consideration, and the pace of development, it is clear that some tens of gigawatts (GW) of cumulative production over the next decade – possibly as much as 50 GW – of concentrated solar power (CSP) capacity will be installed by 2020.”
By the end of 2013, only roughly 3 GW of CSTE will be installed worldwide, and only 1-2 GW is expected to be added annually through 2018. Meanwhile, in 2018, more than 60 GW of solar PV will be installed in that year alone, according to Navigant Research’s recently released Solar PV Market Forecast report.
Drying Up in the Desert
Visions of mega-projects in the Mojave Desert, which at one point reached 24 GW on U.S. Federal Bureau of Land Management property alone, have seemingly evaporated. Plans for similarly ambitious installations throughout North Africa and the Middle East have progressed slowly. The first phase of a targeted 500 MW CSP plant is expected to come online in 2014 in Morocco.
To be sure, some impressive projects have moved forward in the United States, including a 377 MW project being built in partnership with Brightsource, NRG, and Google in the Mojave Desert that will be the largest solar thermal facility in the world when completed at the end of the year. However, the industry is clearly not reaching its full potential. There are a number of reasons for this.
The economic crisis crippled project financing in leading markets such as Spain and the United States, and environmental concerns over transmission lines and water usage have cast a shadow over promising projects in the U.S. Southwest. Political turmoil has delayed project planning in the Middle East. Natural gas prices have fallen precipitously in the United States (although, they’ve rebounded somewhat in the last year), while, at the same time, the rapid price decline of solar PV modules has enabled both utility-scale and distributed solar projects to come online more quickly and affordable than anticipated.
Focus on Value
This has forced many CSTE developers to focus on the key value that the technology brings to the table, namely hybrid and storage applications. Utilities, including Florida Power & Light and Tuscon Electric Power, have experimented with integrating solar thermal technology into existing (or co-located with) natural gas-fired plants. In 2011, GE announced a hybrid natural gas solar thermal plant in Turkey with target for completion in 2015. But the market for these applications has not taken off as expected either.
The benefits of storage are more appealing since the use of molten salt and other thermal storage technologies enables greater flexibility in dispatching power to the grid. A recent NREL study found that the value of CSTE with storage is $32/megawatt-hour (MWh) to $40/MWh higher than the value of a solar PV plant.
Brightsource expects the global market for CSP to be approximately 30 GW by 2020, with growth from the Americas, China, Middle East, North Africa, and South Africa. That’s highly optimistic. Even though the two are not mutually exclusive, CSTE is expected to remain only a fraction of the solar PV market for the foreseeable future.
Tags: Concentrating Solar Power, Distributed Generation, Energy Storage, Smart Energy Program, Solar Power
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