CSP Outlook 2012: Forging New Partnerships

CSP is enjoying broad government support in many regions and nations across the globe. In the United States, however, 2011 may be remembered for the ground the industry lost to low-cost photovoltaic (PV) technology. PV, long associated with rooftop generation, has moved fully into the large-scale development arena, and it has done so at a time when panel prices have hit record lows, thanks in part to technological gains, but mostly due to a glut of panels on the market.

Solar Millennium in October announced that it was shifting 2.25 gigawatts (GW) of its CSP developments in the Southwestern United States to PV. So, how does CSP position itself as the most viable large-scale solar solution when PV prices show no indication that they will go up? The industry could theoretically reap some unintended benefits of higher PV prices resulting from a trade complaint filed against Chinese crystalline silicon panel makers. Barring that, though, CSP still has some financing hurdles to overcome in the U.S.

Finding Support

In the U.S., incentives targeted to CSP projects have been tough to come by. That has pushed many of the biggest developers to other parts of the world, places like Spain, North Africa and Australia, where the CSP development incentives remain strongest.

To lure more projects to the United States, and to keep more developers from scaling back their current plans, Jayesh Goyal, vice president of sales for Areva, says the industry must work to encourage legislation that puts a premium on job creation. While large PV projects often rely on imported panels, CSP represents a much more intensive construction schedule that requires a larger share of local materials produced by a local workforce.

Where the Growth Is

Barring any major shift in federal policy, CSP may slowly move away from stand-alone generation and toward a hybrid model, which either adds solar thermal power to an existing fossil fuel plant, or integrates the two from the start. We've seen a growing marriage globally of hybrid plants utilizing CSP technology in tandem with natural gas or coal, offsetting the intermittency concerns associated with solar power while reducing the carbon emissions that plague fossil fuels. Now the question remains: Will the move toward integrated technologies be a short-term fix or a long-term solution?

Some certainly see the hybrid approach as a viable option that will continue to define the industry decades down the road. For eSolar President and CEO John Van Scoter, it represents more of a bridge. The CSP development company received a $40 million investment from GE, which recently introduced its Integrated Solar Combined Cycle (ISCC) power plant that uses solar generation during the day and natural gas at nighttime and during periods of cloud cover.

"[The hybrid approach] is going to continue," said Van Scoter. "It's analogous to the Prius. That's been a wonderful bridge from gasoline to purely electric vehicles. ISCC fits very nicely between traditional fossil fuels and the future of renewables."

The Technology

In October, the Department of Energy announced it would commit $60 million over three years specifically to improve CSP technologies. The money comes through the DOE's SunShot Initiative, which aims to reduce the cost of solar by 75 percent by the end of the decade. The SunShot CSP program is focusing on performance breakthroughs that will improve efficiency and temperature ranges, as well as new design approaches for collectors, receivers and power cycle equipment.

According to Goyal, the private sector is also finding new efficiencies in both construction and manufacturing as more large-scale projects come to completion.

"We're seeing many larger players coming into the CSP space, and we're seeing the benefits of lower costs that come when you have a supply chain in place from the parent company. Also, once you start building CSP plants, suppliers of components, such as glass, start making improvements in reflectivity and degradation. I think you'll see more and more of that across the supply chain as more plants get built."

As for the holy grail of storage, CSP's future success may very well rely on it. At eSolar, employees are working on a molten salt storage solution thanks to a DOE grant. The company completed Phase I in March and the project is currently in its second phase, with a goal of being ready for a full deployment of the technology by 2014.

When storage technologies do hit the market, Goyal says they will have to drive down the total cost of solar. Currently, storage is viewed as an extra expense, but Goyal says that ultimately its large-scale viability will be determined by its bottom line.

"With storage, it is important to ensure that it is coming in at a cost that makes sense. If you just say, 'I have storage, so I have a dispatchable solution,' but the Levelized Cost of Electricity (LCOE) goes up, no one is going to be interested in that solution. It has to be done in a way that actually brings the cost down. With storage, you're creating the ability to use the power block far more efficiently. Recent data I've seen suggest we can bring the LCOE down with storage."