Concentrated solar power (CSP) has better prospects than wind when it comes to renewable energy investment, according to a leading investor in the sector. CSP involves using mirrors to focus the heat from the sun onto water-filled tubes, turning the water into steam that drives turbines. The technology is easily combined with a gas or biomass-fired plant to provide electricity day and night. So far, CSP is only responsible for around 400MW of electricity generating capacity worldwide, but this is rising fast.
Concentrated solar power (CSP) has better prospects than wind when it comes to renewable energy investment, according to a leading investor in the sector.
CSP involves using mirrors to focus the heat from the sun onto water-filled tubes, turning the water into steam that drives turbines. The technology is easily combined with a gas or biomass-fired plant to provide electricity day and night. So far, CSP is only responsible for around 400MW of electricity generating capacity worldwide, but this is rising fast.
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“There is still a lot of capacity to be installed,†said Sebastian Waldburg, managing partner at SI Capital, a Barcelona-based private equity investment company specialising in renewable energy. He estimated the combined average growth rate of CSP capacity over the last five years at around 250% and said 16,000MW could be installed by 2015.
“The CSP opportunity is probably the biggest opportunity out there. Over the next 20 years, the opportunities in CSP will be more attractive than in wind power,†he said.
Investment in the sector can be “quite lucrativeâ€, he noted. The firm's R&S I renewable energy fund was an early investor in Enerstar Solar Thermal Project, which is building a 50MW CSP plant in Spain at a cost of around €250 million ($386 million). The project recently attracted additional investors, who valued the project highly. “We generated an equity multiple of 30 within 18 monthsâ€, Waldburg said at a seminar in London on Tuesday, organised by communications consultancy Carbon International.
The growth of CSP in Spain is supported by a guaranteed tariff of €0.27 per kWh and Italy has recently announced a similar level of support, Waldburg said. Other countries and regions that are suited to the technology include Greece, the southern US states, North Africa and the Middle East.
However, the sector is not without its problems. Waldburg said there was a “tight market†for expertise and equipment for CSP plants, and costs are fairly high right now – but coming down rapidly.
Location is also critical, more so than for other types of renewable energy, he said. A CSP site needs to be very flat, have good solar resources, have access to water for cooling and cleaning the mirrors, and be within reach of the electricity grid.
