The near- to mid-term outlook for concentrating solar power: mostly cloudy, chance of sun

ABSTRACT

The history of concentrating solar power (CSP) is characterized by a boom-bust pattern caused by policy support changes. Following the 2014–2016 bust phase, the combination of Chinese support and several low-cost projects triggered a new boom phase. We investigate the near- to mid-term cost, industry, market and policy outlook for the global CSP sector and show that CSP costs have decreased strongly and approach cost-competitiveness with new conventional generation. Industry has been strengthened through the entry of numerous new companies. However, the project pipeline is thin: no project broke ground in 2019 and only four projects are under construction in 2020. The only remaining large support scheme, in China, has been canceled. Without additional support soon creating a new market, the value chain may collapse and recent cost and technological advances may be undone. If policy support is renewed, however, the global CSP sector is prepared for a bright future.

KEYWORDS:

• Concentrating solar power
• technological learning
• value chain analysis
• energy policy
• industry development

Notes

¹ The FIT was canceled in 2012, but the last supported projects, under construction in 2012, were completed in 2013.

² The PPA for Noor Energy 1 is lower than our estimated LCOE – 0.073 USD/kWh – because the PPA is paid for 35 years whereas we use a uniform 25 years lifetime for all LCOE estimates; it most likely has very preferential financing conditions, making its financing costs lower than the uniform 5% cost of capital we assume for all projects (Lilliestam and Pitz-Paal 2018). It also appears that the PPA has been changed to now also include a PV component.

Additional information

Funding

JL, RT, and LO have received funding from the European Union’s Horizon 2020 research and innovation program [grant agreement 764626, MUSTEC project] for their work with this paper.