The Takeover of the Concentrated Solar Power Market Across the Globe
The Concentrated Solar Power Market is expected to grow at a compound annual growth rate of 10.67% over the forecasted period to reach a market size of US$2.602 billion in 2027 from the US$1.280 billion in 2020. Concentrated solar power plants are systems that use mirrors to concentrate the energy of the sun and use it for the operation of the conventional steam turbines as well as engines that generate electricity. The thermal energy that is concentrated in a CSP plant is retainable and can be stored and used to generate electricity as per the requirement of the user, be it day or night.
This technology helps in the generation of electricity by focusing on sunlight. The energy of the sun which is concentrated is then converted into high-temperature heat, which is then processed through a conventional generator. A CSP plant comprises of two parts: the function of the first one is to collect the solar energy and convert it into heat, while the second converts that produced heat energy into electricity. Because of the use of the thermal storage functionality, these systems are able to supply solar power as and when required, helping to tackle the grid integration challenges regarding the variability of solar energy and enabling the heat produced through it to be stored until the time the electricity is needed. Apart from powering a turbine, CSP technology can also be used in the production of heat in a broad range of industrial applications like food processing, water desalination, enhanced, chemical production, oil recovery and mineral processing among others.
Rapidly growing global consumption of electricity to augment market growth
A key factor which is fuelling the demand for concentrated solar power is the constantly growing consumption of electricity across the globe. According to the United States Energy Information Administration (EIA), the electricity consumption worldwide has been increasing at a faster rate than the rate of rise of global population, which has led to an increase in the average amount of electricity consumed by each person, which can also be called, per capita electricity consumption. Most of the rise in electricity consumption can be attributed to the growing electricity consumption in developing economies outside the OECD (Organization for Economic Cooperation and Development), which use electricity various spaces like in buildings for lighting and operating appliances, for manufacturing goods in industrial processes, as well as in the transportation sector for powering rail and light-duty vehicles. This continuous inclination of per capita electricity consumption has reflected the rapid transition to more energy-intensive industries. This along with changes in demand of services, like, the growing use of air conditioners and other electric appliances add further to the already growing electricity consumption. Adding to this, even in the less developed non-OECD countries, the per capita electricity growth has grown to more than double in the time period between 2000 and 2017. Hence, all these factors have attributed to the increase in global consumption of electricity, which in turn is expected to give rise to the use of renewable, clean energies like solar energy, thus projecting a growth for the CSP market.
Government schemes and policies regarding green energy to drive market growth
In recent times, the governments of various countries have rolled out policies and programs to that will lead to rise in the installation of the CSP technology which is turn projected to bolster the growth of this market in the analysed period. For instance, the U.S. Department of Energy provides a great amount of funding through competitive awards to universities, industries, and laboratories with the common aim of making wide-scale dispatchable solar energy systems cost-effective without the need of any subsidy by 2020. MUSTEC (Market uptake of solar thermal electricity through cooperation), in view of EU 2030, has the goal of exploring and proposing viable solutions to overcome the obstacles that restrain the arrangement of CSP cooperation projects. All these initiatives and plans are thus predicted to contribute greatly towards setting up of more CSP technology leading to the growth of the market.
By geography, the CSP market has been divided into five regional markets: North America, South America, Europe, Middle East and Africa and Asia Pacific. The North American region accounted for a significant share of the global CSP market back in 2019. As of now, approximately 1,815 MW of CSP plants are operational in the United States. Even Europe holds a substantial share in the global CSP market, with investments booming up in Spain. Further, with fresh tariff legislation, the increasing need for storage and the proven performance of these plants, there has been a great amount of boost in the confidence of the investors in the Spanish CSP ownership. In February 2020, Mitsubishi Corporation entered the CSP market by making investments in four CSP plants in Spain, held by the Spanish solar power giant, Acciona with Mitsubishi Corporation having an ownership of 15 percent in its shares. The Asia Pacific region is expected to witness promising growth in the concentrated solar power market in the forecasted period due to the rise in the amount of investments in renewable energy sources. Countries like India and China have offered lucrative opportunities for the players in the CSP market owing to the rapid installation and implementation of solar energy in order to increase the share of renewable energy generation. Recently, a lot of attention has been diverted to the Middle East and North America region. CSP based energy has shown an increased popularity there because, unlike the solar photovoltaic generated energy, the former can very easily be used to store the generated thermal energy within massive molten salt tanks for a later usage, even at night.
The CSP market was saw a decline because of the outbreak of the coronavirus pandemic. The subsequent lockdowns that followed disrupted the supply chain due shutting down of production facilities which resulted in reduced production of CSP plants. Not just that, this had a negative effect on the demand of this technology as well due to the pause in the functioning of various industries and declining investments in new CSP projects.
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