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Financing concentrating solar power in the Middle East and North Africa--Subsidy or investment?

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  • Trieb, Franz
  • Müller-Steinhagen, Hans
  • Kern, Jürgen

Abstract

The paper presents a strategy for the market introduction of concentrating solar power (CSP) plants in the Middle East and North Africa (MENA) that will not require considerable subsidization and will not constitute a significant burden for electricity consumers in the region. In the first section, the paper explains the need of MENA countries for sustainable supply of electricity and calculates the cost of electricity for a model case country. In the second part, the cost development of concentrating solar power plants is calculated on the basis of expectations for the expansion of CSP on a global level. After that, the challenges for the market introduction of CSP in MENA are explained. Finally, we present a strategy for the market introduction of CSP in MENA, removing the main barriers for financing and starting market introduction in the peak load and the medium load segment of power supply. The paper explains why long-term power purchase agreements (PPA) for CSP should be calculated on the basis of avoided costs, starting in the peak load segment. Such PPA are not yet available, the paper aims to convince policy makers to introduce them.

Suggested Citation

  • Trieb, Franz & Müller-Steinhagen, Hans & Kern, Jürgen, 2011. "Financing concentrating solar power in the Middle East and North Africa--Subsidy or investment?," Energy Policy, Elsevier, vol. 39(1), pages 307-317, January.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:1:p:307-317
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    References listed on IDEAS

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    1. DeAnna Green, 2009. "Addressing concentrated poverty in America," Communities and Banking, Federal Reserve Bank of Boston, issue Win, pages 24-27.
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    Cited by:

    1. Bosetti, Valentina & Catenacci, Michela & Fiorese, Giulia & Verdolini, Elena, 2012. "The future prospect of PV and CSP solar technologies: An expert elicitation survey," Energy Policy, Elsevier, vol. 49(C), pages 308-317.
    2. Pietzcker, Robert Carl & Stetter, Daniel & Manger, Susanne & Luderer, Gunnar, 2014. "Using the sun to decarbonize the power sector: The economic potential of photovoltaics and concentrating solar power," Applied Energy, Elsevier, vol. 135(C), pages 704-720.
    3. Boubaker, K., 2012. "A review on renewable energy conceptual perspectives in North Africa using a polynomial optimization scheme," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(6), pages 4298-4302.
    4. Soria, Rafael & Portugal-Pereira, Joana & Szklo, Alexandre & Milani, Rodrigo & Schaeffer, Roberto, 2015. "Hybrid concentrated solar power (CSP)–biomass plants in a semiarid region: A strategy for CSP deployment in Brazil," Energy Policy, Elsevier, vol. 86(C), pages 57-72.
    5. Peters, Michael & Schmidt, Tobias S. & Wiederkehr, David & Schneider, Malte, 2011. "Shedding light on solar technologies'A techno-economic assessment and its policy implications," Energy Policy, Elsevier, vol. 39(10), pages 6422-6439, October.
    6. Boubaker, K., 2012. "Renewable energy in upper North Africa: Present versus 2025-horizon perspectives optimization using a Data Envelopment Analysis (DEA) framework," Renewable Energy, Elsevier, vol. 43(C), pages 364-369.
    7. Martín, Helena & de la Hoz, Jordi & Velasco, Guillermo & Castilla, Miguel & García de Vicuña, José Luís, 2015. "Promotion of concentrating solar thermal power (CSP) in Spain: Performance analysis of the period 1998–2013," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1052-1068.
    8. Najafi, G. & Ghobadian, B. & Mamat, R. & Yusaf, T. & Azmi, W.H., 2015. "Solar energy in Iran: Current state and outlook," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 931-942.
    9. Lunz, Benedikt & Stöcker, Philipp & Eckstein, Sascha & Nebel, Arjuna & Samadi, Sascha & Erlach, Berit & Fischedick, Manfred & Elsner, Peter & Sauer, Dirk Uwe, 2016. "Scenario-based comparative assessment of potential future electricity systems – A new methodological approach using Germany in 2050 as an example," Applied Energy, Elsevier, vol. 171(C), pages 555-580.
    10. Dowling, Alexander W. & Zheng, Tian & Zavala, Victor M., 2017. "Economic assessment of concentrated solar power technologies: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 1019-1032.
    11. Mahia, Ramon & de Arce, Rafael & Medina, Eva, 2014. "Assessing the future of a CSP industry in Morocco," Energy Policy, Elsevier, vol. 69(C), pages 586-597.
    12. Kost, Christoph & Engelken, Maximilian & Schlegl, Thomas, 2012. "Value generation of future CSP projects in North Africa," Energy Policy, Elsevier, vol. 46(C), pages 88-99.
    13. Frisari, Gianleo & Stadelmann, Martin, 2015. "De-risking concentrated solar power in emerging markets: The role of policies and international finance institutions," Energy Policy, Elsevier, vol. 82(C), pages 12-22.
    14. Trieb, Franz & Schillings, Christoph & Pregger, Thomas & O'Sullivan, Marlene, 2012. "Solar electricity imports from the Middle East and North Africa to Europe," Energy Policy, Elsevier, vol. 42(C), pages 341-353.
    15. repec:eee:rensus:v:82:y:2018:i:p3:p:3430-3440 is not listed on IDEAS
    16. Shouman, Enas R. & Khattab, N.M., 2015. "Future economic of concentrating solar power (CSP) for electricity generation in Egypt," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1119-1127.
    17. van den Broek, Machteld & Berghout, Niels & Rubin, Edward S., 2015. "The potential of renewables versus natural gas with CO2 capture and storage for power generation under CO2 constraints," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 1296-1322.
    18. repec:eee:renene:v:123:y:2018:i:c:p:135-149 is not listed on IDEAS
    19. Usaola, Julio, 2012. "Participation of CSP plants in the reserve markets: A new challenge for regulators," Energy Policy, Elsevier, vol. 49(C), pages 562-571.

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