30 July 2012
Solar thermal power, also called concentrated solar power (CSP), can make a sizeable impact on the world’s renewable energy industry if governments across the globe can maintain supporting policies, says a new report by alternative energy analysts GBI Research.
The latest report cites government attitudes to CSP as a key determinant to the future success of this relatively young market. Currently, the CSP market is characterized by the high cost of power generation and the challenges of achieving economies of scale. However, government provisions can push forward technological advances and boost installations, which will in turn lower the expense of both project investment and power generation.
At present, the CSP industries in the US and Spain are benefiting from Feed-In Tariffs (FiT), a system that offers a financial incentive to producers in the form of premium tariffs, per kWh, over a fixed period of time. The regulatory framework in the US has also established mandates for utility companies to purchase electricity from renewable sources for domestic consumption. Similarly, the Spanish government has tax rebates for renewable energy investments, and as a result these two countries hold the greatest share of the global solar thermal power market.
GBI Research additionally highlights the emerging economies China, India and the United Arab Emirates as drivers of the CSP market. These nations are recognising the importance of solar energy as a means of achieving energy security and stability, particularly at a time when fossil fuel reserves are depleting and becoming more costly with additional measures to reduce carbon emissions. Many of these countries are also attempting to reduce carbon emissions and are looking to renewables as an alternative.
Solar thermal power projects in the pipeline mean the global CSP market is expected to grow from a 2011 installed capacity total of 1,546MW to 47,462.9MW in 2020, climbing at a Compound Annual Interest Rate (CAGR) of 44%.