As the global CSP industry expands, activities in so called 'emerging markets' such as North Africa, India, Brazil and the Middle East are gaining increasing importance.
So, what are CSP companies general experiences of the differences encountered in operating in emerging markets? What are the key challenges faced in undertaking CSP operations in these regions - and how best should they be overcome?
By Andrew Williams
One company with a growing level of experience in dealing with emerging markets is CSP 'technology provider' Solar Euromed, which currently markets turnkey solutions using its proprietary Direct Steam Generation (DSG) fresnel reflector technology in Mediterranean countries, South Asia, and the Middle East - providing solar field equipment and engineering services to a range of industrial clients, including public and private sector developers and engineering, procurement and construction (EPC) contractors.
According to Simon Benmarraze, Development Director at Solar Euromed, the company has recently secured a 'pipeline' of contracts, running to a total of 22 MW in North Africa, 15 MW in Cyprus, and 250 MW in Sudan via a number of power purchase agreements (PPA). The company is also 'well positioned' to capture a significant part of the 'numerous thriving programs' currently arising in sunny regions for electricity generation, desalination of seawater and steam-based CSP processes.
Benmarraze stresses that emerging markets are 'rapidly increasing' their energy consumption as they develop their economies - and while they still consume proportionally less energy than established markets do, their expansion is 'far more rapid.' He highlights the fact that production of the energy required to meet this increasing demand via fossil fuel-based sources will have adverse environmental effects and that the use of fossil fuels entails financial risks because 'commodities markets are volatile and resources are limited.'
"Without strong commitment towards renewable energies, emerging markets share of global carbon-dioxide emissions will sharply rise in the next decades," he argues.
In Benmarraze's view, the 'problematics' of implementing CSP projects in emerging markets are very different, partly because the local manufacturers, land owners and investors are 'not yet familiarized with CSP technology.'
"Urgent action is required for the large-scale deployment of renewable sources promoting local economic development and growth, creation of wealth and jobs, improved agricultural and transportation sectors," says Benmarraze.
Lack of Experience
This concern over the limited level of CSP technology expertise in emerging markets is echoed by Kelly Beninga, Chief Commercial Officer at SkyFuel, a 'pure play' provider of advanced parabolic trough technology, designed for life cycle 'economic optimum' based on the use of monolithic 'ReflecTech' mirror film panels in place of glass mirror facets.
As Beninga explains, SkyFuel has in place, or is negotiating, representation and supply agreements with key developers and EPC companies in a range of emerging markets, including Brazil. The company plans to supply parabolic trough solar fields to projects ranging in size from 1 MW to 250 MW, and in applications ranging from hybrid with natural gas, biomass, and geothermal to standalone with storage.
"From the perspective of an equipment supplier, the key difference and our biggest challenge in emerging markets compared to established ones is the lack of experienced players in designing and developing a solar power project," says Beninga.
"Potential customers look to us to provide expertise beyond our standard scope of services, and this becomes an extra expense in entering these markets, as well as creating a challenge for achieving quality and timely projects," he adds.
So, how best can CSP companies interested in expanding their activities in emerging markets overcome the perceived dearth of local CSP technology expertise? Benmarraze believes that there is now a pressing need to identify the 'correct solution' for clean and efficient production, transformation, delivery, and use of energy in each market. His view is that renewable technology such as theirs can 'meet with the rising energy needs of growing developing economies without expanding energy production to alarming climate impacting levels.'
"One of the key challenges of developing CSP projects in emerging markets is to identify the right local partners from the start," he stresses."They should have a complete knowledge of local regulations and politics on renewables, have contact with local actors, [such as] governments, operators and engineering, procurement and construction [companies], and have a correct understanding of technical aspects of CSP plants," he adds.
Meanwhile, Beninga points out the likelihood that these challenges will be 'naturally overcome' as the markets mature and the players gain experience. "This process can be greatly facilitated and enhanced by the cooperation of the local players with international agencies ready to assist with match-making, training, and capacity building," he says.
Looking ahead, such 'match-making' activities, combined with the growing sophistication of local companies, could well emerge as key factors influencing the success of CSP activities in emerging markets.
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