04 May 2012

By Kari Williamson

The CSP sector has been marked by volatility since its revival in 2004, and the ups and downs are likely to continue through the remainder of the decade, as the price of 'rival' solar photovoltaic (PV) modules continues its dramatic decline.

Pike Research nevertheless believes that the worldwide annual revenue for CSP systems will increase dramatically, from US$2.1 billion in 2012 to US$5.1bn in 2013, before dropping again in 2014 and beginning a gradual recovery. By 2020, the cleantech market intelligence firm forecasts, revenue will reach US$4.8bn.

Under a more favourable forecast scenario, revenue could even surpass US$8.6bn in 2020.

“Solar PV is not only more attractively priced at the moment than CSP technology, but it also has an established track record that makes it more appealing to investors,” says Senior Analyst Peter Asmus.

“Yet, CSP may overcome these disadvantages by reducing costs as a result of larger scale and new technology models. The most promising opportunity in the near term is to link CSP with thermal energy storage, thereby increasing the value of clean electricity in a cost-effective way that solar PV cannot replicate.”

Hybrid potential

CSP providers have already begun devising hybrid power plants combining CSP with fossil fuel generation – integrated solar combined cycle (ISCC).

At the same time, utility-scale energy storage capabilities are enabling expanded electricity production by dispatching stored heat in the evening hours.

Overall growth in the CSP market depends, however, on a range of factors including project bankability/financing, policy issues, cost reductions in technology, cost competitiveness with solar PV, and expanded electricity transmission capacity.