Promising Future of Solar Power

Promising Future of Solar Power

By Knowledge Sourcing Intelligence Thought Articles

The Global Concentrated Solar Power (CSP) market is expected to grow at a compound annual growth rate of 10.67% over the analysed period to reach a market size of US$2.602 billion in 2027 from the US$1.280 billion in 2020. The prime reason driving the growth of the market is due to deployment support, policy framework conditions, and proven technology. Countries are racing to meet their zero-GHG-emissions targets while increasing the share of renewable energy sources in total electricity generation. For example, Spain's national integrated energy and climate plan sets a target of 120 GW of installed renewable energy capacity, primarily solar and wind, by 2030. (NECP 2021-30). Furthermore, another major factor driving the demand for concentrated solar power is the world's rapidly increasing electricity consumption. According to the US Energy Information Administration (EIA), global electricity consumption continues to rise faster than global population, resulting in an increase in the average amount of electricity consumed per person, or per capita electricity consumption. However, the role of political, regulatory, financial, and administrative barriers, as well as lengthy and uncertain approval processes and other general investment risks, can stymie market growth.

Government Assistance to Enable the Adoption of Renewable Technologies

Solar, wind, hydroelectric, tidal, and wave energy are all examples of renewable energy sources. Multiple governments are incentivizing renewable energy generation through tax credits, grants, and loan programmes, encouraging investors and project developers to shift toward renewable power generation. Such beneficial initiatives have also aided the commercialization of these technologies.

Government policies and programmes to increase the installation of concentrated solar power will continue to support the growth of this market over the next five years. The United States Department of Energy (DOE) provides funding to industry, universities, and national laboratories through competitive awards with the common goal of making large-scale dispatchable solar energy systems cost-competitive without any subsidies by 2020. Furthermore, governments are researching technological advancements for a brighter future. For example, the US Department of Energy's National Renewable Energy Laboratory started developing Next-gen concentrated solar power in February 2022. The next-generation CSP programme aims for an energy cost of $0.05/kWh. The Department of Energy has identified opportunities in three material pathways: storing heat in sand-like particles, liquids like molten salt, and gases, such as Brayton Energy's technology.

The Power Tower Market Will Have a Significant Share

The global concentrated solar power (CSP) market is divided into four categories: parabolic trough (PT), solar tower (ST), solar dish (SD), and fresnel reflector (FR). The solar power towers segment accounts for a sizable portion of the global concentrated solar power (CSP) market. A large field of flat sun-tracking mirrors is used in solar power towers. Heliostats are mirrors that reflect and concentrate sunlight onto a receiver at the top of a tower. Solar power tower market growth in Asia Pacific, the Middle East, and Africa will be supported by rising demand for continuous electricity generation and increased government support for renewable technologies in key countries such as China, India, Morocco, Saudi Arabia and the UAE. During the forecast period, the segment of parabolic troughs is expected to grow at a reasonable rate.

The Ivanpah Solar Electric Generating System is the United States' largest concentrated solar thermal plant. The plant, located in California's Mojave Desert, can generate 392 megawatts of electricity by using 173,500 heliostats, each with two mirrors that focus sunlight onto three solar power towers.

Political Barriers in Underdeveloped Countries May Constrain the Market Growth

Politicians and governments are considering the growing economic benefits of the renewable energy industry. Some countries lack the political will or financial resources to invest in such technology. For example, there are significant political and economic barriers to CSP deployment in Sub-Saharan Africa, such as a lack of strong political will, technology costs, fossil fuel contribution, a lack of private investors, vandalism and insecurity, and land requirements. Nigeria is suffering the most due to such factors.

Although recent developments can alter the current situation as the Redstone Concentrated Solar Power project will generate 480,000MW of clean energy per year. The contract was signed in 2018 and construction will begin in May 2021. The R11.6 billion ($162.457 million) Redstone project near Postmasburg in the Northern Cape is South Africa's largest renewable energy investment to date.

The North American Market Will Grow Significantly During the Forecasted Period

The global concentrated solar power (CSP) market has been divided into five major regional markets based on geography: North America, South America, Europe, the Middle East and Africa (MEA), and Asia Pacific (APAC).

In 2019, North America accounted for a sizable portion of the global concentrated solar power market. In the United States, approximately 1,815 MW of CSP plants are currently operational. Europe also has a significant presence in the global concentrated solar power (CSP) market, with Spain leading the way. Furthermore, new tariff legislation, increasing demand for storage, and proven plant performance have increased investor confidence in Spanish Concentrated Solar Power ownership. Mitsubishi Corporation entered the concentrated solar power (CSP) market in February 2020 with investments in four CSP power plants in Spain held by Acciona, a Spanish solar power giant, with Mitsubishi Corporation owning 15% of its shares. Because of rising investments in renewable energy sources, the Asia-Pacific (APAC) regional concentrated solar power market is expected to grow at a significant compound annual growth rate between 2020 and 2025. Rapid solar energy installation to increase the share of renewable energy generation in countries such as India and China provide lucrative opportunities for CSP market players. Concentrated solar power (CSP) is of particular interest in the Middle East and North America (MENA) region because, unlike solar photovoltaic (PV), it can easily store thermal energy in massive tanks of molten salt for use at any time of day or night.

Covid Insights

The coronavirus pandemic had a negative impact on the CSP market National lockdowns have had a negative impact on demand, causing turbulence in global economic growth and resulting in lower business spending and investments in new projects. This pandemic had a significant impact on solar installation, with subsequent lockdown and declining business spending leading to the postponement of several solar projects. On the supply side, global supply chain disruption, as well as lower productivity across manufacturing facilities as a result of mandatory social distancing measures, have reduced the production of concentrated solar power systems.