ANALYSIS I CSP
in California, is derailed due to transmission constraints. In addition, the Calico Solar Project, which was originally planned to be an 850MW CSP farm, was downsized to a 750MW solar PV plant and a 100MW CSP plant by K Road power who owns the project in January 2011. Therefore, utility companies play an important role for CSP producers, as they provide grid infrastructure and purchase electricity produced at a premium rate.
The US and Spain are Key Countries The global CSP market is highly concentrated, with the US and Spain dominating the market. Strong government support through financial incentives has driven market growth in these nations. Spain is global leader for CSP technology through use of the country’s abundant sunlight resources.
Spain entered the CSP market in 2007 with establishment of the PS10 solar tower, which has a capacity of 11MW. Until 2010, cumulative installed capacity in Spain reached
582.4MW and Spain became the highest CSP installed country in the world.
The US is the second largest CSP market in the world and represented over 44% of global total installed capacity in 2010. The first CSP plant, SEGS 1, came into operation in 1985 with an installed capacity of 14MW in the Mojave Desert, California. This was an ideal location for CSP power generation as it had the highest solar installation potential in the country.
Globally, there are less than 10 companies which develop CSP plants. In 2010, Abengoa Solar of Spain installed 37.8% of total global annual installations. This was
In 2010, global CSP investments primarily came from Spain and the US. Of total investments in
2010, 59.2% were made in Spain and 28.8% in the US. Spain also recorded the highest number of installations in 2010
followed by Acciona Energia of Spain and Florida Power & Light Company. ACS Cobra Group and SAMCA Group followed with 11.0% and 11.0%, respectively, in 2010.
Financial Support Provides Strength for CSP Investment
The high cost of installation results in elevated power generation costs, and this is a challenge for investment in renewable sources such as CSP. However, financial incentives such as fixed premium payments for power generated from solar thermal energy will encourage industry investments. Furthermore, the US and Spanish governments are encouraging investors through the offer of loans and grants to establish a plant.
In 2010, global CSP investments primarily came from Spain and the US. Of total investments in 2010, 59.2% were made in Spain and 28.8% in the US. Spain also recorded the highest number of installations in 2010. Annual CSP capacity additions reached 350MW in 2010 due to the introduction of the FIT scheme.
Government Support Plays a Crucial Role A key determinant for CSP market trends is government policies, as the market is relatively young. Presently, the CSP market is characterized by the high cost of power generation and the challenges of achieving economies of scale.
However, government support through FIT is driving investment in the market. Additionally, regulations which require utility companies to purchase a certain portion of electricity from renewable sources, particularly solar sources, encourage private entities to enter the CSP market.
Government support is a critical determining factor for the future of the CSP market due to a number of limiting factors. These factors include: grid infrastructure, high capital costs, the availability of land and environmental issues.
© 2011 Angel Business Communications. Permission required
Issue X 2011 I
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