The CSP industry is scaling rapidly with 1.2 GW under construction as of April 2009 and another 13.9 GW announced globally through 2014, EER writes in its study Global Concentrated Solar Power Markets and Strategies 2009-2020.
Spain is the ‘epicentre’ of CSP development with 22 projects totalling 1037 MW under construction, all of which are projected to come online by the end of 2010.
The current Spanish Royal Decree, which calls for 500 MW of solar CSP by 2010, has been largely responsible for the increase in CSP development activity in Spain since 2008. However, a review of Spain’s feed-in tariff (FiT) scheme is underway and its outcome could have a significant impact upon 6 GW of projects in the pipeline.
The success of Spain’s longer-term CSP position will largely depend on the government’s willingness to continue fostering CSP development through feed-in tariffs, according to EER.
“If the 2009 global financial climate remains challenging, weaker projects in the CSP pipeline and some developers will be shaken out,” says EER Research Director Reese Tisdale. “However, the long-term trend toward CSP technology adoption remains strong, particularly with the Spanish government carrying forward near-term build-out.”
USA offers significant CSP opportunities
Despite having only 75 MW of CSP under construction, the USA continues to offer significant opportunity for CSP, with 8.5 GW in the pipeline and scheduled for installation by 2014.
“The US market has been held up considerably by the permitting process in California, the US Bureau of Land Management process, and more recently by the financial crisis,” says Tisdale. “Ultimately, the US market is considered to have the greatest upside for CSP potential given its solar resources, space availability, proximity to load, and growing pressure to mitigate carbon emissions.”
Attracted to promised lower costs, US utilities have turned to CSP – through both Power Purchase Agreements (PPAs) and direct ownership – to meet their Renewable Portfolio Standard mandates.
While parabolic trough represents more than 96% of all CSP projects currently under construction in Spain, the technology accounts for only 40% of the US CSP pipeline. Backed by sufficient government incentives, Spanish CSP developers have not been compelled to take on major technology risks, according to EER.
“The US market has a greater technology mix, as the highly cost-competitive marketplace encourages innovative technology development, such as central receiver, dish engine, and linear Fresnel,” says Tisdale. “The race is on to determine which CSP technology can deliver, particularly in the uncertain economic climate.”
Spain and the US will continue to lead CSP project development activity for the next decade due to a combination of resource and policy support, according to EER. The rest of southern Europe has yet to catch neighbouring Spain’s solar CSP fever, primarily due to a lack of government incentives. The EER's study notes that CSP activity is also gaining momentum in the Middle East, North Africa, and the Asia Pacific regions.