Is concentrating solar power forecast to contribute to global energy storage over the next five years?
Analysis from Renewables 2018
In addition to PSH and battery storage, CSP can provide large-scale energy storage, but the way CSP thermal storage characteristics differ from those of PSH and stationary batteries prevents direct comparison. Nonetheless, most CSP plants deployed over the outlook period are expected to include thermal storage, though at a comparatively small scale with only almost 6 GW to be commissioned by 2023. Thermal storage capacity of CSP is projected to reach 34 GWh.
Of all CSP capacity to be commissioned over 2018-23, 33 projects (representing 85%) are expected to include storage, led by China (1.6 GW), Africa (Morocco and South Africa; 1 GW) and the Middle East (0.8 GW), while only seven projects without storage are anticipated: 365 MW in China and 170 MW in the Middle East. Accordingly, storage volume from CSP thermal storage grows from 13 GWh in 2017 to 34 GWh in 2023.
To take advantage of economies of scale, CSP projects are expected to become larger – over 100 MW on average. The Al Maktoum solar park 700‑MW CSP project in the United Arab Emirates is expected to be the largest globally once commissioned in 2023. The preference for smaller projects in the past resulted from Spain leading the market and 50 MW being the maximum size for FIT eligibility. Most additional projects will be towers (20 projects totalling 1.8 GW), followed by 15 parabolic trough projects (1.6 GW) and four using linear Fresnel technology (165 MW). The technology for another 380 MW is still to be determined by a tendering process.
Electricity from CSP is relatively expensive compared with that generated from solar PV and wind. However, recent announcements, including the USD 73/MWh for the United Arab Emirates’ 700‑MW CSP project, indicate significant cost reduction potential. This energy-only cost comparison does not take into account the ability of CSP to shift the time of generation and to provide ancillary services to power systems. Further cuts to technology costs will depend on the pace of deployment and experiential learning, but its high costs compared with other technologies, especially solar PV, remain a barrier. Access to financing for CSP projects is stifled by a combination of technology risks, country risks, large project size and development costs. Ongoing projects rely on generous FITs (China, Israel) and access to low-cost financing (the Middle East and Africa). However, research and development (R&D), technology learning and mass deployment promise significant cost reduction potential.
While this report projects limited CSP deployment until 2023, IEA long-term scenarios forecast a more pronounced role for CSP, with thermal storage after 2030, especially owing to the flexibility and energy security it can provide to power systems that incorporate high shares of VRE.