A current study of electricity production costs by the International Renewable Energy Agency (IRENA) revealed that CSP dropped more steeply in price last year than any other renewable tech.
It declined 26 percent year on year, double the rate observed in onshore wind and PV, and has dropped 46 percent since 2010.
IRENA stated the fast drop in CSP costs last year”should be treated with caution” due to the restricted number of jobs going ahead in 2018. At the exact same time, however, CSP deployment is set to rise in China this season, building a rebound in average global costs unlikely.
Rather, IRENA forecasts average CSP prices will continue to descend through to 2020, hitting $60 and $100 per megawatt-hour, or about the exact same level as offshore end.
Between 2018 and 2021, stated the bureau,”CSP will undergo a real step change in prices,” falling 61 percent within the span or 27 percent year on year.
Once again, IRENA advocated caution with the prediction since it was based on data from only five crops due to come online between 2020 and 2021. But industry insiders are convinced the technology can become significantly more competitive.
“I believe CSP still has quite a ways to go in price reductions,” stated Jonathan Walters, a former World Bank director now employed as an independent financial advisor on renewable energy. “It is still about global scale.”
Scale was a sticking point for CSP so far. Though CSP’s global installed capacity has grown more than four occasions since 2010, it still only added up to 5.5 gigawatts at the end of 2018. That is the exact same as where PV was at in 2005, based on IRENA figures.
CSP was slow to grow from the last decade mainly because PV raced ahead of it on cost, but also due to the economics of plant growth.
This has tended to limit the appeal of CSP to markets that are both quite sunny rather than fearful of digging deep to fund infrastructure projects.
More recently, attention has shifted to the Middle East and North Africa (MENA), in which CSP is of interest for its regional content possible and because, unlike PV, it can readily store thermal energy, within enormous tanks of molten salt, to be used after sundown.
MENA is where most recent cost reductions have come from. In July 2017, by way of instance, a Dubai Electricity and Water Authority tender attracted a record-low CSP bid of $94.50 each megawatt-hour.
And this year, developer ACWA Power of Saudi Arabia was reported to be targeting a price of close to $50 a megawatt-hour at another Dubai job, the 950-megawatt Noor Energy 1 hybrid CSP and PV plant.
These price reductions have come about in part thanks to the appearance of Chinese players in the CSP supply chain. Chinese interests have partnered in Middle Eastern projects, for instance with Deutsche investment vehicle Silk Road Fund participating in Noor Energy 1.
This activity seems partly aimed at gathering experience that may be put to use in China’s rapidly growing domestic CSP market.
The U.S. National Renewable Energy Laboratory lists more than 1.6 gigawatts of Chinese CSP ability spread across 25 plants in operation or in various stages of development.
But China’s capacity to push prices down is unlikely to benefit the American CSP industry, which gave up searching on home turf several years back.
Even though the Department of Energy has been support CSP, landmark energy tower jobs such as Ivanpah have been slammed for killing creatures and American plants have suffered from performance issues.
From 2017, a lack of national projects had headed U.S. developer eSolar to close and forced its bigger rivals BrightSource and SolarReserve to pursue opportunities in the Chinese market. Neither of the companies’ sites have posted any announcements in the last year.
