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Global Futures Report 2013 - Concentrating Solar Thermal Power (CSP)

57 about such numbers. In the long term, costs for solar PV are pro- jected in several scenarios to fall below 10 cents/kWh.29 In particular, IEA ETP (2012) shows costs in 2030 at roughly 7–11 cents/kWh for utility-scale projects and 8–14 cents/kWh for roof- top installations. Greenpeace (2012) shows costs of 5–10 cents/ kWh by 2030–2040, depending on the region.30 (However, experts also pointed out that many published projections of future costs are too high for low-latitude countries because of the improved solar resource.) Grid parity also accounts for “balance-of-system” costs, including mountings, wiring, and power inverters. Balance-of-system costs have historically represented about half of total costs, but have also been falling in tandem with PV panel costs. In recent years, more attention has focused on the cost reductions possible in balance- of-systems, including new mounting materials, cheaper electronics, and stand-alone DC systems that do not require inverters.31 As cost-reduction in PV modules slows down, “the balance of sys- tem is where the biggest cost reductions will occur—from $2.50/ watt today to perhaps $1.30/watt by 2030—as solid-state invert- ers decline in cost and mounting hardware is eliminated,” said one expert. Another said: “we will see continued cost reductions, not just the solar PV panels themselves, but also the costs of integrated installations, as component and system costs drop.”32 Historical factors contributing to solar PV cost reduction have included wafer fabrication (thinner wafers and lower material costs), cheaper forms of atomic-layer deposition, process automa- tion, economies of scale in manufacturing, and higher cell efficien- cies. In the future, solar PV cost reductions could come from several directions, although there was some disagreement about which would prove the most important.33 “The way to cheaper PV is through higher efficiency of cells,” asserted several solar PV experts. In contrast, one expert asserted that, “it’s easier to reduce the manufactured cost per square meter than to improve efficiency.” Yet another believed, “it is impossible to say where the technology will go!” Many firms are now conducting research on new materials, but one expert cautioned against any quick revolution, given that development cycles can take 5–10 years before commercial products are seen. “Silicon is going to be really tough to beat,” the expert added.34 Beyond manufacturing cost reductions of existing crystal-silicon and thin-film technologies, experts cited the following directions for further cost reductions: (1) higher cell efficiencies, with crystal silicon reaching 20–24% and thin-film reaching 15% by 2020, fol- lowed by a whole range of PV products with efficiencies in the range of 5–40% beyond 2030; (2) greater use of thin-film, with market shares possibly reaching 30–40% by 2020–2030, up from 20% in 2010; (3) dye, polymer, and organic PV as cheaper, lower-efficiency alternatives beyond 2020, mostly useful for consumer applications; (4) use of more “earth abundant” materials in fabricating solar PV, beyond 2020; (5) new and cheaper foundation materials such as graphite to reduce the need for steel mountings; and (6) cheaper balance-of-system components, integrated with power systems and demand-side equipment control.35 Concentrating Solar Thermal Power (CSP) Many experts believed that solar thermal power markets would become much stronger by 2020. One expert offered a very opti- mistic prognosis: “We could see 50–70 GW of CSP worldwide by 2020, which could include 5 GW in Spain, 5 GW in the rest of Europe (especially Turkey), 20 GW in the U.S., 30 GW in the Middle East/ North Africa (especially Morocco), 5 GW in India, and possibly 5 GW in China.” Another was even more optimistic: “The global CSP mar- ket could reach 25–50 GW/year by 2020 if some major companies enter the market, and even 50–100 GW/year is not unreasonable.” Greenpeace (2012) shows over 2,000 GW of CSP by 2050.36 CSP power costs are cited as 19–29 cents/kWh by REN21 (2012). There are many divergent claims over the current “real” costs of CSP in today’s markets, by industry, experts, and regulators, which hin- ders understanding of how far CSP costs have to fall before becom- ing competitive. Other industry estimates in 2011–2012 showed current costs as low as 10 cents/kWh for new projects. Cost ranges given by scenarios are 7–11 cents/kWh by 2030 (IEA ETP, 2012), 11–23 cents/kWh by 2035 (IEA, WEO 2010), and 6–10 cents/kWh in the long term (Greenpeace, 2012).37 The IEA WEO (2010) offered the following prognosis of solar CSP economics: “Further technology improvements and cost reductions are important, especially in the mirrors/reflectors, which account for around 20–40% of the overall capital costs, depending on the plant design. Power tower technologies are considered to have signifi- cant potential in this respect, with potential cost reductions for the heliostat on the order of a factor of two to three. Even more funda- mental to the economics of CSP is increasing its availability, through the integration of storage (e.g., molten salt). While this significantly increases the upfront investment costs … it can be more than offset by the value of the increased hours of operation per day.”38 CSP technology faces decades of evolution and offers many possible areas of cost reduction, according to experts. Most were optimistic that CSP will have a prominent place in energy systems of the future, and that development trends of the previous five years are only the beginning of a strong decade through 2020. One expert gave this long-term prognosis: “CSP development will probably remain policy dependent through 2025 or 2030, depending on natural gas prices. After that, it will enter a competitive period with steep learning curves, and by 2050 will be installed at rapid rates reminiscent of natural gas turbines in the 1980s and 1990s. These time frames could be accelerated if natural gas prices rise steeply or become more volatile, such that fuel price risk becomes a major factor.”39 06

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