It’s been about two years since I wrote my last post on this subject.
I have been involved in the industry since, and a lot has changed since then. Unfortunately not so much for CSP, but a lot more for the competition and the market.
In terms of competition – PV prices are continuing to fall aggressively. There are programs being proposed that aim to bring the cost of PV technology to $1/W in 5 years time-frame. Currently large scale systems are easily between $2.5-$3/Wac (USA). This is terrific for solar energy in general. But CSP technologies have not been able to keep this pace generally, and will not be able to compete on cost alone. Large CSP projects could be cost-effective, but the size comes with its own problems (which brings me to the next point…)
Market (at least in US) has evolved that utilities have become very comfortable with PV plants. The plants are small, come online faster and generally don’t have to deal with the regulatory uncertainty as large CSP plants.
BUT…there are still two strong advantages of CSP and the future would depend on how the industry is able to leverage these strengths. Ultimately, it’s about how CSP can reduce lifecycle cost of electricity generation.
1) Storage: As I mentioned in my previous post, Storage (specifically as heat storage) is a strong differentiator. In the last two years, the cost of storage has become cheaper. Many more plants with the molten salt storage configuration have come online in Spain. A recent 19MW project stores 15-hrs of electricity to give almost ‘baseload’ power on sunny days. There is no electricity storage that is close at this scale in the near term.
2) Dispatchability through Hybridization: CSP lends itself easily to being a part of a hybrid plant. Some options are: Solar-biomass, Solar-geothermal, Solar-coal, Solar-combined cycle, Solar-natural gas hybrid, etc. Essentially anywhere there is requirement for steam, solar thermal can provide it. Most of these combinations improve the economics of the second fuel source as well. These are not cookie-cutter projects, but could be a valuable way to leverage the strength of CSP and provide near base-load plants.
Another advantage stated for CSP is it’s ability to buffer cloud events (which affects PV more drastically) to reduce the variability in the electricity generation- but utilities in US don’t seem to be willing to pay for this. Many other countries are more mindful of the quality of generation and value this benefit. The argument that distributed PV reduces variability by it’s nature of being distributed and small, is strong as well.
Some of the recently announced projects in CSP in US and worldwide, leverage the above aspects and hopefully, should be able to demonstrate the value of this integratable technology. Either way, it’s going to be very interesting next 3-yrs for the industry.