CPV I GRID OPTIONS
and one that can only be solved with further technical developments, further deployments on both small and large scales, increase in the scale of manufacturing to bring costs down, and increased willingness from developers and users to give more consideration to CPV. For instance, many governments have committed to increasing the level of renewable energy in their energy mix, but achieving that will be difficult without supporting policies. Where there are supportive policies, it is much easier for investors to back renewable energy projects and thereby increase the usage of renewables for that country. This creates a virtuous circle of policymaker, investor and supplier where there is a win-win-win scenario for all.
For policymakers it is easy to assume that feed-in-tariffs alone will provide the incentive to the energy sector and investors to pursue large scale renewable projects. In fact feed-in-tariffs have quite a narrow impact - supporting renewable projects simply at the point of deployment. This in turn has a knock on to risk averse investors who see the opportunity to invest in companies, technologies and products that are furthest along in their development and therefore best-placed to take advantage of the tariffs in the short term.
Instead, early stage support is critical in enabling renewables companies to prove their ‘bankability’ to investors further down the line to support greater manufacturing and wider deployments. There are several options of what this early stage support could look like in practice - with schemes such as ‘investment matching’ put forward. What is clear though is that it is required if the renewables industry is to expand, and if
governments are serious about growing the renewables mix of their energy supplies.
This, clearly, is a long term process. It is a process that we at Circadian Solar fully expect to progress however, and within a few years when economies of scale have been achieved we have no doubt that CPV will be competing on price with grid electricity, with carbon-free electricity. So if on-grid CPV remains a long term goal, what of the short term?
Off grid - the market opportunity In the near term off grid deployments present the biggest opportunity for CPV. Apart from anything else much of the Sunbelt is rural, remote and does not have access to grid electricity. For example, according to a recent World Energy Outlook report, electricity access in sub Saharan Africa is only 26%, the lowest worldwide. This statistic is even worse for the rural areas, where the poorest communities tend to live, and where the estimate is as low as 8%. In these areas there is great reliance on diesel generators to produce electrical power, for schools, hospitals, irrigation, mines, water works and so on.
For those that do have access to grid electricity, issues with grid stability and reliability, as well as power supply rationing are well known. So, even though an increasing number of electrification programmes are aiming to provide access to electricity for a larger proportion of the Sunbelt’s populations, off-grid generation will continue to be essential for a very large proportion of domestic, commercial and industrial users for many years to come.
Issue IX 2011 I
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