Concentrated Solar Power (CSP) may trace its roots to when Leonardo da Vinci first conceived a parabolic mirror concentrator to heat water, but the technology’s future may be brighter than ever. According to a Pike Research study, the market as a whole will more than double from $2.1 billion in 2012 to $4.8 billion in 2020.
Like many other forms of renewable electricity generation, CSP projects have been slowed by austerity measures across the world. But Pike researchers say the current CSP surge, which began in earnest around 2004, is merely paused at the moment, and global capacity will double by 2013.
Several policies have fueled the current market, including California’s renewable portfolio standard and several European feed-in-tariff systems. 2008’s global economic crisis didn’t immediately impact the CSP market because multiple projects were already underway, notably 14 utility-scale plants that brought 667 new megawatts (MW) online in Spain between 2008-2010.
However, as austerity measures kicked in the pipeline began to close and Spain, once the global leader in CSP technology, currently has zero projects under construction. The same trend is seen in the United States, where stimulus funding helped fund five CSP projects. These projects represent 1.5 gigawatts (GW) currently under construction, although nearly 6.9GW have been awarded.
As in Spain, though, when government funding and incentives dried up, so did new project starts. 745MW of projects have been cancelled or delayed, and 3.4GW of projects are uncertain to move forward.
Beyond austerity measures, Pike also sees the plummeting price of solar photovoltaic (PV) modules as a serious threat to the technology. PV modules have dropped beyond 50 percent from their 2008 peak, and PV is more attractive to investors due to its established track record. To wit, 1.2GW worth of CSP projects in the U.S. have been replaced with PV.
But, CSP may overcome austerity measures and PV competition by reducing project costs through three avenues: increasing project scale, hybridization with fossil fuel plants through Integrated Solar Combined Cycle (ISCC), and utility-scale energy storage.
“The most promising opportunity in the near term is to link CSP with thermal energy storage, thereby increasing the value of clean electricity in a cost-effective way that solar PV cannot replicate,” said Peter Asmus, Pike Research senior analyst.
Industry growth is likely to be concentrated in areas like Europe and northern Africa, according to Asmus. “There are clearer market signals to develop large amounts of bulk renewables due to carbon mandates and corresponding investments in bulk power transmission to serve EU markets.”