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Market uptake of Solar Thermal Electricity through Cooperation

Periodic Reporting for period 2 - MUSTEC (Market uptake of Solar Thermal Electricity through Cooperation)

Reporting period: 2019-04-01 to 2021-03-31

Concentrating Solar Power (CSP), could play an important role in the future European power market, offering a number of potential benefits aligned with European energy policy aims. First, CSP can produce high-value, dispatchable power on demand to balance the intermittent sources and thus contribute to the energy transition. Second, trading CSP across borders would support the EU’s aim of cost-efficiently decarbonising the power system through cooperation between Member States. Trading CSP from Southern to Central and Northern Europe may thus both increase the stability of a high-renewables future power system and lower the total system costs. In this context, the overall goal of MUSTEC is to assess the existing barriers and opportunities for CSP to play a key role in the future European electricity system by supplying firm electricity from Southern to Northern European Countries, and to develop and propose concrete policy instruments to overcome the barriers for the realisation of specific types of CSP and intra-European CSP trade projects.
The project has identified relevant issues that may constitute an obstacle or a driver for the future supply of flexible electricity from CSP plants in Southern to Central and Northern European countries, suggesting points for policy interventions addressing both the barriers and drivers to the diffusion of the technology as well as the drivers and barriers for involvement in the cooperation mechanisms.
The work has shown that in the past few years, global CSP deployment has slowed down and shifted away from Europe. Currently, the European CSP industry is facing severe challenges and is struggling with competition from new, mainly Asian businesses. There is a concern that this trend could result in the disappearance of many European companies and, eventually, in the dissolution of innovation networks in the field of CSP. In recent years, the levelized cost of electricity of CSP has seen a clear downward trend but it still needs to be reduced further to make CSP more competitive.
Besides continued and targeted R&D efforts to enhance the efficiency of CSP power generation, as well as dedicated deployment support, key elements comprise the creation of a favorable investment framework and the provision of financing tools that help to hedge the risks related to project implementation. This requires ambitious energy and climate policies that set the appropriate price signals and reflect the value of flexibility in the electricity system. Also, a stable political framework and continuity in renewable energy policy on both national and European level are particularly crucial factors.
The regional cooperation needs to be pushed by the development of concrete regulatory solutions and related pilot projects and national and regional energy security strategies should recognize the value of RES cooperation in general and the opportunities of CSP in particular. Also, the development of cross-border transmission grid infrastructure is crucial.
Policy measures need to allow for targeted (i.e. technology-specific) support and RES support policies and in particular the design of RES auctions need to better value positive system impacts as storage and dispatchability of CSP. Additionally, to stimulate and facilitate the use of RES cooperation mechanisms among EU Member States, a clearer statement and a more targeted supportive framework on EU level are crucial to reduce the added complexity of developing renewable energy projects cooperatively. Policy measures under the EU’s ‘enabling framework’ could help to reduce CSP project costs. The auctions under ‘EU financing mechanism’ should be technology-specific and address CSP in particular. The funding of ‘cb-projects in RES’ through the ‘Connecting Europe Facility’ (CEF) should take requirements of CSP projects (e.g. regarding project lead times and investment volumes) into account.
A balanced policy mix should also include indirect measures for enhancing the communication of the benefits of RES cooperation and enhancing public acceptance. In this respect, the application of transparent procedures that enable local stakeholder participation and support the realization of potential local benefits is crucial to enhance local acceptance of CSP cooperation projects.
Results of MUSTEC project have widely disseminated in conferences, events, scientific publications and 2 videos.
Based on the above findings, MUSTEC has proposed specific policy interventions and have developed a detailed Roadmap and Action Plan.
The work in MUSTEC have addressed concerns for five broad stakeholder groups, including (1) policy makers on the European as well as the national levels, (2) various market participants, (3) the European/global CSP industry, (4) the scientific community and (5) civil society.
The work performed has served to advocate the CSP technology and to stimulate the discussion about this technology at the policy level. The idea of a possible CSP cooperation project has been promoted at the national and regional level. At the European level, a Technical Assistance service offered by the European Commission (https://www.hdcefenergy.eu/) to potential c-b RES projects for the new CEF funding line has been granted to the Spanish Ministry for Ecological Transition and Demographic Challenge to further develop the MUSTEC cooperation project idea.
The work in MUSTEC has also addressed concerns for various market participants and the European/global CSP industry as well. These actors have been regularly consulted along the project and their views and feedback on our project outcomes have been properly taken into account and incorporated in our recommendations to further amplify the impact of the project. Impacts on the scientific community have also been promoted by the publication on scientific journals and the participation in scientific conferences.
A detailed sustainability impact assessment of a potential cooperation project was performed. Results obtained showed that the implementation of a CSP power plant will create value added and employment that will be mostly retained in Europe and that the electricity generated would have a low carbon and water footprint. There are, however, some potential social risks in the CSP value chain that need to be minimized. In comparison with an equivalent system in terms of flexibility and dispatchability that uses photovoltaic panels and batteries, CSP performs better in all the sustainability indicators analysed.
The project also investigated the geopolitical and energy security implications of CSP. We showed that despite significant advantages in traditionally “hard” policy fields, both regarding geopolitics (e.g. reduced import dependency) and energy security (e.g. a source of renewable dispatchability), CSP is a non-issue in European energy and geo policy. CSP is seen as a niche technology and the cooperation mechanisms as niche institutional innovations. In addition, CSP can be an enabling technology for the overall energy transition: because CSP can balance wind power and PV, it can enable the secure continued deployment of these technologies – thus enabling continued decarbonisation and further jobs creation in technologies other than CSP itself. Hence, fast-tracking CSP cooperation would be a suitable EU response to the COVID-19 crisis, serving both EU geopolitical goals and the aims of the European Green Deal.
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