Dr. Volker Ludwig, Intelligent Projects GmbH
We need an economic solution if CSP is to help make a real difference in tackling climate change. Concentrated solar power is possible – the technologies are available. Solar power stations are already converting solar energy into electricity. But worldwide governments and energy providers are ordering carbon-driven power stations or even new nuclear plants. Knowing about the potential of the sun in the Sahara desert and the possibility of powering Europe with electricity from North Africa, I am very disappointed, especially with the governments of some of the Arab countries that want to go for nuclear power instead of CSP. Looking into it further I have found out that the problem is not merely political, as I first assumed, but economic.
The CSP sector is in competition with traditional ways of energy production. But CSP companies are competing with each other instead of competing with the producers of fossil-based or nuclear stations. The really big players in the electricity market have not yet recognised that a CSP plant could replace a conventional power plant. They still believe CSP is not an economic way to produce electricity. Consequently CSP companies are not looking for money from customers but from banks, investors or governments. This strategy of capitalisation leads to secretiveness. The companies do not want to reveal economic data so that their competitors don’t win an advantage during their negotiations to get financing.
Once a CSP power station is completed, it produces electricity at almost no cost (only running costs, but no input of natural resources) while the coal power station will still need coal as an input, later with the risk of retrofitting carbon capture and storage capabilities, due to climate change. No one can really predict these costs of retrofitting, so they are just forgotten about for now.
I assume it is difficult for key personnel in CSP companies to change their market approach. These experts come from scientific institutions whose budgets are funded by taxpayers’ money. People who live successfully on public budgets have learned how to get such funds but they are not necessarily good entrepreneurs who can develop the right product for the market. As long as they get the next project, they are happy. So they are satisfied with projects that merely show their ability to set up CSP systems. This leads either to minor projects with low MW capacity, often as an addition to a traditional gas-fuelled power station, or they start to set up their own power stations with their own technology instead of selling their products. Both approaches are wrong in terms of promoting competition with traditional technologies.
No wonder there is so little demand from the real players. They don’t see CSP in competition with other power stations. If they order CSP technology they pay for it out of their marketing budgets. For them, CSP should show their customers that they care about climate change. But the figures tell another story. Every new conventional power station reduces the amount of possible investment in CSP technology, i.e. it means a long-term loss of market share.
I hope CSP companies manage to address the real market for their products very soon. Otherwise the large-scale introduction of the technology that is necessary both for the fight against climate change and the benefit of our economies, will be delayed.