EASAC Report: Strong outlook for CSP in Europe and MENA
Strategic invetments need to be made now to secure the future role of solar thermal energy in Europe and MENA's energy mix, according to the European Academies Science Advisory Council's latest report.
By Andrew Williams
A new report from the European Academies Science Advisory Council (EASAC), due to be launched in Brussels Monday 7th November, confirms that CSP is on course to become competitive with fossil fuel-based electricity sometime between 2020 and 2030 in ‘sun-rich’ countries.
Through the integration of thermal storage and fossil fuel hybridisation, EASAC argues that CSP can offer the same grid-services as conventional power plants and help to enable the introduction of high proportions of other ‘fluctuating’ renewable energy technologies.
The report also concludes that CSP plants generally have low environmental impacts and contribute towards a high share of local value creation.
“This local benefit is more pronounced than for other renewable technologies ... and supports economic development ... creating local jobs, wealth and expertise – making it particularly suitable for the MENA region,” says Prof. Robert Pitz-Paal, Chairman of the EASAC Working Group on Concentrating Solar Power.
The study highlights a clear trend towards systems operating at higher temperatures and efficiencies becoming an important driver for cost-reduction. Due to ongoing competition with PV, systems that include storage or efficient hybridisation schemes are likely to become more important - but their value depends on the specific market.
Over 10-15 years, an overall cost-reduction potential of 40% -60% has been identified - half of which is anticipated to result from technology innovation and another half via mass-production and scaling effects.
The report argues that R&D should be funded at EU and national levels to complement commercially funded research and, amongst other things, should ensure that new technologies can progress to commercial application rapidly.
“It is essential to coordinate the different R&D and demonstration efforts with a market incentivisation that favours cost reduction by innovation over cost reduction by mass production of state of the art technology options,” argues Pitz-Paal.
The report recognises that the CSP market, like most other forms of energy, is dependent on incentives. As such, the subsidy amount will hinge on how quickly costs decline as installed capacity increases. It is therefore important that incentive schemes ensure that cost-data is made available so that future energy strategies and incentive schemes can be adjusted as appropriate.
From a European perspective, the report argues that CSP development in the MENA region should be welcomed. Firstly, CSP is an attractive and easily integrated option to limit the increased CO2 emissions anticipated as the region develops economically. Secondly, local suppliers can undertake many of the activities needed to design, build and operate CSP plants, bringing regional development and employment benefits.
Given the rapidly increasing demand for electricity in MENA countries, much of the electricity generated by CSP plants in the region, at least in the short-term may, and should, be expected to be locally-used rather than exported to Europe - avoiding the construction of fossil-fired capacity in the region.
“Looking towards 2050, if investments in CSP capacity in the MENA region are sufficient, there is potential for major exports of electricity to Europe that would also lower dependence on imports of fossil fuels,” says Pitz-Paal.
Finance and Investment
The study recommends that CSP subsidy schemes reflect price signals from other electricity markets so that CSP investors can make appropriate decisions on storage. In other words, revenues should reflect the supply and demand situation in specific grid systems – unlike today, where most renewable incentives follow a flat revenue model and priority is given to renewables. Financing schemes will also be needed to enable CSP developments in the short to medium-term.
“Without financial commitments in the order of billions of Euros from Europe, renewable energy technologies, including CSP, are unlikely to develop quickly in the MENA region,” says Pitz-Paal.
Other recommendations include a call for a transformation process that addresses the technical, political and socio-economic factors necessary to achieve integration of EU and MENA energy systems and strengthens the implementation of renewable options in the MENA region.
Transmission capacity, including HDVC links, should also be installed in Europe and the MENA region to enable system integration of CSP electricity. Finally, capacity-building initiatives should be put in place to support sustainable growth of necessary technological skills. Such initiatives may include developing international networks of universities and industrial companies, and programmes for technology transfer from research to industry.
The overall conclusion of the report is that CSP is poised to play a key role in European and MENA energy markets. However, if its potential is to be fully realised, a prolonged and co-ordinated effort on several fronts is needed, now.
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