In the shift toward low carbon, renewable sources of energy, concentrated solar power (CSP) holds vast potential due to its ability to provide reliable, utility-scale power even when the sun is not shining. However, high technology costs and a limited number of CSP demonstration projects deter investors, especially in higher-risk emerging markets.
The CIF is a leader in driving global investments in CSP. To better understand the impact of the CIF in CSP development, the CIF partnered with the Climate Policy Initiative (CPI) to undertake in-depth analytical work leading to recommendations on how public financing from the CIF and other international financing institutions can be used most effectively to scale up CSP deployment and reduce its cost. This included:
A series of stakeholder dialogues
- A webinar
- Case studies of CSP development in India, South Africa, and Spain (as well as Morocco)
- Comparative analysis of various financing and policy models being used around the world
- Research showed that closing the viability gap is possible. If international financing institutions and committed national governments joined forces to deploy 5 to 15 GW of CSP, it could reduce its electricity production costs by around 14 to 44 percent and make CSP competitive in countries like Morocco and South Africa.
Recommendations for closing the CSP vialbility gap:
● Design policy to ensure that the cost of support falls to reflect decreasing costs over time
● Ensure that support can be sustained over time, to avoid boom and bust cycles
● Align public and private actors’ financial interests to reduce the perception of policy risk and the cost of renewable energy support
● Remunerate flexible power supply from CSP to reflect its benefit to the energy system
● Consider adjusting loan requirements according to the technology maturity
● Harmonize loan and regulatory requirements among lenders
● Reduce foreign exchange hedging costs of loans by international financing institutions to developers
CSP Dialogue Series:
The “CSP Dialogues” brought together major actors in financing solar energy for a global sharing of experiences and exploration of emerging lessons to scale up effective CSP finance. Participants included countries receiving support from the CIF for CSP projects, countries involved in other (non-CIF) CSP projects, donor countries, project developers and financiers, and multilateral development banks.
Second CIF/CPI Concentrated Solar Power Dialogue
Abu Dhabi, January 22, 2014
Third CIF/CPI Concentrated Solar Power Dialogue
Washington, D.C., May 8, 2014