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European CSP, Solar Water Heating Face Difficulties

Europe’s concentrated solar power (CSP) plants have a total installed capacity of 1957.7 MWe as of end 2012, finds the latest edition of EurObserv’ER’s annual Solar Thermal and Concentrated Solar Power Barometer, while 3.4 million m2 of solar thermal collectors were installed in the EU over the year, for an installed base of 29.6 GWth.

But, warns the report, both markets are facing difficulties, and analysts such as the International Energy Agency have downgraded their sector forecasts.The IEA currently predicts 1.5 GW of global annual growth to 2017, for a global total of 8 GW in 2015 and 11 GW in 2017 – as opposed to the agency's previous (2010) forecast of 148 GW in 2020.

After CSP’s banner year in 2012, when 17 new plants totalling 802.5 MW of capacity came online, the number of projects now under construction is significantly smaller, EurObserv’ER said. And, the report continued, Europe’s solar thermal market is “hardly more encouraging,” falling 5.5 percent between 2011 and 2012. The main reasons for this downturn according to the report are pressure from the PV sector and Spain’s moratorium on new renewable power plants, coupled with its drastic subsidy cut for new projects and 7 percent tax on energy generation. 

CSP

Spain, the world’s number one market for CSP as well as solar water heating, added 802.5 MW in 2012 for a total capacity of 1953.9 MW and generated 5138 GWh over the course of the year, according to trade body Protermosolar. Of these 42 plants, 37 were parabolic trough plants, three were power tower plants and two use linear Fresnel collectors. Capacity additions included a number of significant projects such as Termosolar’s 22.5 MW Borges CSP facility, coupled to a biomass generator and running 24/7, and Novotec’s 30 MW Puerto Errado 2, currently the largest Fresnel plant in operation.

Despite the country's woes, 2013 began well for Spain, with two 50 MW plants from NextEra Energy, Termosol 1 and 2, coming online, bringing the nation past the 2 GW mark with 2053.9 MW of total installed capacity. Six more parabolic trough plants are currently under construction, as well as three new plants using parabolic dish technology. But given the dead stop in the Spanish market after February’s energy reform, CSP developers are now turning to other countries for new projects. Protermosolar reported that jobs in the sector dropped from 28,885 in 2011 to 17,862 in 2012. Spain’s largest developer Abengoa was a 20 percent owner of Abu Dhabi’s 100 MW Shams 1, and is building a 150 MW plant in South Africa, 280 MW in the U.S. and a 470 MW hybrid solar-gas plant in Mexico.

EurObserv’ER predicts that Italy will be the second country to develop a full-blown CSP sector given its highly attractive feed-in tariff, applicable from December 2012. Licensing applications for over 200 MW in Italian projects have been filed by companies such as Enel Green Power and Energogreen, said the report, most of which will use parabolic trough technology with molten salt as the heat transfer fluid.

The report finds France's CSP sector getting going slowly, with construction on the first industrial-sized demonstration facility – Solar Euromed’s 12 MW Alba Nova 1 in Corsica – still on hold. A July 2012 tender also resulted in CNIM’s 9 MW project at Llo in the Pyrenees Orientales, which EurObserv’ER estimates will be commissioned in 2015. Areva Solar is the only French company active on the international market and claims 300 MW of operational or under-construction CSP projects.  

Slowing growth is taking its toll on the industry, the report found, pointing to an initial restructuring phase. Citing lowered growth forecasts for the global market, Siemens bowed out of both the CSP and PV markets in October 2012, three years after buying Israel’s Solel Solar Systems Ltd and after only 300 MW of completed projects. German parabolic trough receiver manufacturer Schott also restructured its CSP business, closing its 400 MW US plant; the company said the move was designed to improve its chances of winning major contracts in the Middle East.

Most European nations that had set solar thermal targets in their National Renewable Energy Action Plans are “drifting further and further away” from meeting them, according to the report. Spain had set a target of 3048 MW by 2015, but will struggle to reach 2386 MW (if its last projects in the pipeline are commissioned), said EurObserv’ER. France’s 2015 target is 203 MW, but it is predicted to install 21 MW at most. Portugal, Greece and Cyprus have also set targets, but sector takeoff in these countries is on hold with nothing planned before 2015. Only Italy seems set to launch its sector, says EurObserv'ER, with the first projects set to be commissioned in 2015.

Solar Water Heating

The solar water heating market contracted for the fourth consecutive year in 2012, according to the report, ending up at 3,395,420 m² (of which 97 percent were glazed collectors), a 5 percent drop from 2011. Over these four years, EU market sales were found to have fallen by 1.2 million m². EurObserv’ER suggested that PV and heat pumps have put pressure on the sector, especially in Germany where PV dominates in the domestic market.

Germany, the only country to install more than 1 million m2 per year, had a slight market pickup in 2011 which faded in 2012, said the report. Other findings showed that in the high-potential area of Spain, Italy and Portugal, the ongoing recession plus a construction sector crash is stifling development; in Austria increased incentives have failed to stem the decline, and in the UK there has been a notable market contraction.

However, said EurObserv’ER, the French market held steady thanks to development of the multi-occupancy sector, and Greece, Poland, Hungary and Denmark are coming up due to an increase in gas and heating oil prices. Markets in the Benelux countries are also emerging, but not quickly or strongly enough to reverse Europe’s overall downward trend, the report found.

Lead image: parabolic trough collectors positioned on the Solúcar platform in Sanlúcar la Mayor, Seville, Spain. Courtesy Abengoa.

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