CONCENTRATED SOLAR THERMAL POWER (CSP)

In 2023, the total installed capacity of concentrated solar thermal power (CSP) grew 400 megawatts (MW) to reach 6.7 GW. ¹ (See Figure 19.) CSP with thermal energy storage is increasingly valued as a variable renewable energy technology that can provide storage and night-time power in synergy with solar PV and wind energy. Although first-generation parabolic trough plants remain the most proven and reliable CSP technology, second-generation CSP plants using molten-salt towers are increasingly being deployed, primarily in China. ²

The global CSP market has shown signs of a renewed dynamic. In 2023, the Noor Energy 1 project, a 950 MW hybrid PV-CSP plant, was inaugurated during the United Nations Climate Change Conference (COP 28) in Dubai, United Arab Emirates. ³ Additionally, China initiated several new projects, expanding the pipeline of Chinese CSP plants to more than 1 GW under construction and 3 GW in development. ⁴ Spain and the United States continued to lead in cumulative CSP installed capacity in 2023, followed closely by the United Arab Emirates and China. ⁵ If current patterns hold, China is positioned to take the lead in both CSP deployment and supply chain capabilities by the end of the decade. ⁶

In 2023, the remaining 400 MW of a 600 MW parabolic trough field came online at the Noor Energy 1 project in the United Arab Emirates. ⁷ The plant is now the world's largest CSP facility, with 700 MW of CSP capacity (including a previously completed 100 MW central receiver tower). It showcases the synergistic deployment of CSP alongside large-scale solar PV installations to deliver solar power through the night. The project uses state-of-the-art US and European second-generation CSP technologies, including large-aperture parabolic troughs and the latest molten-salt towers (with more than 10 hours of thermal energy storage in hot and cold tanks). ⁸ Noor Energy 1 has a total power storage capacity of 5.9 gigawatt-hours (GWh), making it the largest thermal battery in the world. ⁹

In China, several key policies related to CSP were implemented at the national and provincial levels during 2023, helping to clarify technical prescriptions and the role of CSP as a peak-shaving resource. ¹⁰ The country's total installed CSP capacity remained at 588 MW, the same level as in 2020, as no new capacity was connected to the grid. ¹¹ The first plants of China's “CSP+” projects were expected in 2024 and include mostly 100 MW towers, as well as some troughs and Fresnel plants, co-located with solar PV and wind power capacity. ¹² A typical configuration is Cosin Solar's Jinta project, which finished Heliostat assembly at the end of 2023 and deploys a 100 MW molten-salt tower with eight hours of storage alongside 600 MW of solar PV. ¹³ China announced some 13 additional plants with a combined capacity of 1.35 GW, 5 of which will be located in the high altitudes of the Tibet Autonomous Region. ¹⁴

Italy was the only country in Europe with a CSP plant under construction as of 2023. The CSP 3 Bilancia project in Sicily is the country's third 4 MW Fresnel plant, with 16 hours of storage, and is slated for completion in 2024. ¹⁵ The plant is expected to contribute to Italy's goal of 873 MW of CSP capacity by 2030, as outlined in the updated National Energy and Climate Plan (NECP). ¹⁶

Spain had the largest installed CSP capacity globally, at 2.3 GW, and in 2023 CSP plants delivered around 5 TWh, or 2% of the country's electricity needs, to the grid. ¹⁷ However, no new activity occurred during the year, challenging Spain's efforts to deliver on its goal of 4.8 GW of CSP by 2025, set out in the 2020 NECP. ¹⁸ After the disappointing first-ever 220 MW CSP auction held in 2022, which did not award any projects, no additional or adapted auctions occurred in 2023. ¹⁹ Instead, Spain updated its NECP to shift its target year for the 4.8 GW of CSP capacity from 2025 to 2030. ²⁰

Elsewhere in the world, no new CSP plants broke ground in 2023. In South Africa, the Redstone project was expected to connect to the grid in 2024. ²¹ No further projects are in sight in the country, as CSP has been excluded from capacity expansions in South Africa's Integrated Resource Plan since 2019. ²²

In Morocco, the Noor Midelt project had not started construction as of 2023,, despite having been awarded a power purchase agreement (PPA). ²³ Several stakeholders view the technology as too expensive and error prone – pointing to the patchy record and high power generation cost of the country's Noor Ouarzazate project – and have recommended instead substituting CSP with solar PV and batteries. ²⁴

Several countries announced their intentions to tender new CSP plants. India was actively preparing a CSP tender for 2024, which would end a ten-year hiatus and build on the operational experience of several CSP plants completed during the country's National Solar Mission. ²⁵ Kuwait launched a request for proposals for 200 MW of CSP for the long-awaited Shagaya project, and Egypt has explored using CSP heat and power for desalination. ²⁶ Botswana was working on a 200 MW tender for CSP. ²⁷

CSP costs remain challenging to assess, in part because few successful tenders have occurred, and the new plants being built lack transparent information on cost and financing. Because of its size and its recent completion, Noor 1 is widely regarded as the current CSP cost reference, with a PPA of USD 7.3 cents per kilowatt-hour; however, the project's financing conditions and concessional financing make it likely that CSP is still more expensive elsewhere. ²⁸ In general, it is increasingly difficult to isolate the cost of electricity from CSP, given the trends towards dispatchable generation during only a few hours, and hybridisation with other generators. As with Noor 1, PPAs are usually awarded for all co-located technologies. Moreover, the investment cost for CSP may only be reported for the whole project: for example, China's hybrid CSP plants rarely report the CSP investment cost, although the known investment cost is much lower than in the demonstration plants completed during 2016-2020. ²⁹

FIGURE 19.Concentrated Solar Thermal Power (CSP) Installed Capacity, by Country, 2013-2023

The CSP industry has experienced growing differentiation between the Chinese and western supply chains. With few exceptions, China's new projects rely on Chinese intellectual property and supply chains, whereas projects outside of China (such as the Noor 1 project in Dubai and Redstone in South Africa) have relied on the know-how of companies from the early lead markets in the United States and Spain (namely BrightSource for the tower and Abengoa Solar for the parabolic troughs). ³⁰

Third-generation CSP has received growing attention. Novel CSP designs aim to decrease costs and improve on molten-salt towers by using novel heat transfer media and reaching higher temperatures, potentially above 1000°C. ³¹ In Australia, Vast Solar plans to reach financial close of the VS1 project at Port Augusta. The 30 MW / 288 MWh plant relies on third-generation CSP technology that uses sodium as the heat transfer fluid, and will deliver power for a solar methanol project and could be expanded by another 150 MW in the near future. ³²

In the United States, where no commercial-scale CSP plants were under construction as of 2023, the federal Sandia National Laboratories started building a 1 MW demo plant, the G3P3, that will demonstrate the use of falling particle receiver technology (a new solid high-temperature heat transfer medium) to replace molten salts. ³³ A 2 MW sister plant is to be located in Saudi Arabia. ³⁴