In 2010, concentrating solar power (CSP) projects like Ivanpah were heralded as the future of utility-scale solar projects. Spain and the US led the world in the development of this technology. Since then, they have largely fallen to the wayside in the wake of inexpensive photovoltaics (PV) and presently survive in niche applications. The average CSP system costs 37% to 60% more than a comparable PV system. A new report from Lux Research predicts this will continue until CSP providers develop components that operate at high temperatures, integrate low-cost thermal energy storage (TES), reduce materials, and maintain system performance.
“CSP has fallen by the wayside of the solar industry after attracting huge amounts of government and investor money in 2010 and 2011. But the industry can still bring the technology back to the forefront for utility-scale, stand-alone power applications,” said Ed Cahill, Lux Research Associate and the lead author of the report titled, “Turning Up the Heat on Advanced Concentrating Solar Components.”
“Corporations need to invest in the development of advanced CSP components today, to bring CSP to a competitive level with PV before it falls too far behind.”
Power towers could already successfully compete with utility-scale multicrystalline silicon (mc-Si) if they could secure larger projects that integrate thermal energy storage Unfortunately this also triples the up-front capital expenditure, making it nearly impossible to secure project financing without significant government support.
BrightSource’s Ivanpah, SolarReserve’s Crescent Dunes, and Abengoa’s Solana received $3.7 billion in US federal loan guarantees, but this type of funding is no longer available.
Consequently, BrightSource’s Rio Mesa, Hidden Hills, and Palen projects have all been cancelled. Companies like BrightSource and Solar Reserves are too small to advance CSP to the next level without additional funding.
There are a number of large power companies — like GDF Suez, NRG, and E.On — that both have the resources and have demonstrated their appetite for large CSP projects. Nevertheless, the next few years look bleak for CSP. There are specialized markets in places like South Africa, Saudi Arabia, and Chile, but most of the world is choosing PV. By 2012, the global demand for PV had increased to 30.7 GW, while CSP only rose to only 1.18 GW.
However, by 2020, Lux Research says that a number of new technologies will make it possible for CSP to successfully compete with PV.
Sectors to Watch (from Lux’s press release):
Thermal energy storage (TES) are among the top targets for cost reduction. Today’s CSP system costs are 37% to 60% higher than mc-Si without TES – and 300% to 600% higher with 14 hours of TES. Storage is among the largest portions of the system cost stack, and will be a primary target for advanced system components.
Advanced power towers will win for large projects. Supercritical steam systems are the most likely to come to fruition by 2020. The next step for power towers will likely be toward Air Brayton and supercritical CO2 systems that can beat mc-Si’s LCOE by 31% and 33%, respectively.
Fresnel reflector systems are best for small projects. Linear Fresnel reflectors with molten salt heat transfer fluid can undercut mc-Si’s LCOE by 6% and have the most potential to dominate smaller CSP projects and alternative applications like integrated solar combined cycle (ISCC), industrial heat, enhanced oil recovery (EOR) and water purification applications.
(Graphic at top of page courtesy Lux Research, Inc)
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