Global Concentrated Solar Power Market to Grow at Robust 9.5% CAGR during 2020-2027, Rising Demand for Desalination Drives Growth

The global concentrated solar power market reached a valuation of $4.9 billion in 2019. The market is expected to witness robust growth, and register a notable 9.5% CAHR during the 2020-2027 period. Due to increasing concerns surrounding water scarcity, and lowering costs of Concentrated Solar Power (CSP), the market will open new opportunities for producers.

CSP systems are known for their mirror-based application to generated concentrated heat. However, conventionally, their application remained limited to power generation. However, according to the US Department of Energy, their application has moved to new areas like food processing, water desalination, chemical production, enhanced oil recovery, and mineral processing.

Furthermore, due to rising investments in CSP, the total capacity had reached 5,500 MW in 2018, to 354 MW in 2005. Conventionally, the production of CSP also remained concentrated in few countries like Spain, which accounted for half of the production in 2015. However, rising investments in United States, China, and India have shifted the production from Spain-based to becoming more global.

Additionally, advancements in technology like the use of thermal energy storage have enabled the production of 24/7 electricity generation, breaking down traditional barriers in CSP production.  This has also made CSP a dispatch-able form of energy, making it a more potent weapon to combat the climate crisis. The storage capacities and dispatch-able nature of today’s CSP make it a formidable force for mobile generators, and baseload plants. The prices for CSP electricity generation remained a concern in 2017, wherein record lowest prices down to $73 MWh in the DEWA project in Dubai. Today, China aims to install CSP power plants with total capacities of 5.3 GW, with estimated prices at 0.1 USD per kWh.

Desalination Promises Major Growth for the Global CSP Market

According to the International Water Association (IWA), the growing water scarcity has driven tremendous investments in water desalination in the last few years. The IWA estimates that over $10 billion investments over the course of the next five years, with 5.7 million cubic meters per day of new production capacity is likely to double the capacity by 2030. The seawater remains a challenging arena for meeting water scarcity concerns, as the salinity can range from 30,000 to 40,000 mg/l. On the other hand, the low salinity water like brackish water remains available in much lower quantities to meet the growing demand for clean water supply. Furthermore, this water is already being used in arid regions completely. Hence, in 2015, the number of desalination plants globally reached a total of 15,000, providing a capacity of 86.55 million m³/day. Furthermore, demand in regions like the Middle East remains extremely high with a projected increase of 7 to 9 percent per year. Water scarcity is also expected to hit countries in Asia, North America (the US), and Latin America the hardest in the near future. Furthermore, thanks to the co-generation of power production, and water, and low-cost fuel, the CSP technology dominates the desalination of water production. The growing demand for desalination, the rising promise of CSP technology, and lowering costs remain key drivers to growth in the CSP market.

Growing Demand for Energy Processing Remains a Major Application for Growth

As mentioned earlier, the Chinese government plans to build gigantic CSP power plants to make way for next-gen energy. According to official sources, the Chinese government aims to make CSP technology more competitive over other forms of dispatchable energy. According to the International Energy Agency, electricity generation increased by 34% in 2019. Moreover, despite the tremendous growth, the rise did not meet targeted expectations. The IEA estimates that CSP electricity generation can grow at 24% per year through 2030. In 2019, over 600 MW of CSP were added to global production. Moreover, Israel led the growth of CSP technology along with China, accounting for over 230 MW, and 200 MW respectively.

Israel and China both plan to increase their CSP capacities substantially, to cater to demands for rising desalination, and process steam generation. The Chinese government plans to use the high efficiency of CSP power plants to cater to clean energy goals set for process steam generation. According to the IEA, China’s total energy consumption stood at 6833.11 TWh in 2020. Moreover, the country’s energy supply remained comparatively lackluster with 2562.14 Mtoe energy productions and 3196.42 Mtoe.  Furthermore, China relies heavily on conventional energy sources like coal to drive high emissions resulting in 356% increase since 1990. The growing demand for energy in China, the rising investments in CSP, and the increased need for clean energy will drive robust growth for the global CSP market.

Rising Demand for CSP in Food Processing, and Chemical Processing to Drive Growth

The food processing industry is witnessing a growing demand for CSP in key regions like Europe, key markets like India, among others. The technology remains a promising horizon for entities like dairies, and breweries. These require the warming of large quantities of liquids, and CSP promises a cost-effective method to save on gas- and diesel-powered boilers. Companies like Inventive Power have convinced major players like Nestle, and Uniliver to deploy their systems since 2013. According to industry sources, it takes a little convincing to try out the systems, due to a lack of awareness. However, the system remains ideal for long-term industrial needs and promises major expansion. A feed pallet company PAISA, based in Mexico spent nearly $71,000 in 2015 on 80 solar power collectors. The investment has paid back within 2.7 years, as the company saves nearly 26,000 annually in energy bills for natural gas. One of the biggest challenges in the use of CSP technology is the maintenance of mirrors, which require regular cleaning. Moreover, connections to niche applications like pasteurization continue to evolve with automation, coding, and other technological advancements. The growing reliability of the CSP systems will promise more growth, with rising demand for CSP technology in emerging nations.

Based on the technology

• Solar Power Tower
• Linear Concentrating Systems
• Stirling Dish technology

Based on the operation type

• Stand-alone Systems
• With Storage

Based on the capacity

• Less than 50 MW
• 50 MW to 99 MW
• 100 MW and above

Based on the end-user

• Utilities
• EOR
• Others (Others include process heating, mining industry operations, desalination, and district heating)

Based on the region

• Asia Pacific
• Europe
• North America
• The Middle East & Europe
• South America