MUSTEC A Roadmap for Collaborative Concentrated Solar Power development in Europe

The decarbonisation of the electricity sector through the deployment of renewable energy technologies is a key element of the European climate change strategy and ambitious renewable energy targets have been set on the European level. The absence of mandatory targets on the national level emphasizes the relevance of collaborative approaches to reach the envisaged renewable energy share on the European level.

With rising shares of variable renewable energy, electricity system flexibility gains importance. Energy storage and dispatchable electricity generation technologies are particularly important to help balance the in-feed of variable renewable energy sources (RES). Concentrated Solar Power (CSP) with storage, as dispatchable renewable energy technology, could contribute to the deep decarbonisation of the European Energy system by providing sustainable and flexible electricity. With vast solar potentials in Southern European countries, CSP could thus be a suitable technology option for collaborative renewable energy projects among EU Member States.

However, even though RES cooperation mechanisms were introduced by the European Commission already in 2009 to allow the EU Member States to reach their binding 2020 renewable energy target shares with joint efforts and potentially at lower costs, they have hardly been used and never involved any CSP project. The EU H2020 project "Market Uptake of Solar Thermal Electricity through Cooperation – MUSTEC" (https://www.mustec.eu/) has analyzed the framework conditions for the collaborative development of CSP projects.

In the past few years, global CSP deployment has slowed down and shifted away from Europe. The European CSP industry is facing severe challenges and some of the previously dominant European companies are now 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. The levelized cost of electricity (LCOE) of CSP with an average value of 0.12 USD/kWh, has seen a clear downward trend in recent years but it needs to be reduced further to make CSP more competitive. Whereas the cost outlooks for CSP are bright, the market and policy outlooks are troublesome and support, to keep the industry alive and prevent the CSP sector from entering into a bust phase, is urgently needed.

Policymakers on the European and national levels could address the identified issues and enable CSP cooperation by creating favorable framework conditions and adopting specific instruments and design elements within the existing policy strategies. Besides continued and targeted R&D efforts to enhance the efficiency of CSP power generation, key elements to support this development comprise the creation of a favorable investment framework and the provision of financing tools that help to hedge the risks related to project implementation. Against this background, also a stable political framework and continuity in renewable energy policy on both national and European level are particularly crucial factors.

Equally important as the reduction of generation costs is the creation of a favorable market environment that allows for CSP to be deployed profitably and to leverage its strengths. First and foremost, this requires ambitious energy and climate policies that set the appropriate price signals and reflect the value of flexibility in the electricity system. In this context, CSP should be seen as a complementary technology to PV and wind energy as it can deliver firm and flexible power and contribute to balancing the electricity system.

The creation of technology-specific support, which takes into account the particular features of this technology and the provision of financing instruments that help to hedge the risks associated with the implementation of such large-scale projects are further core elements. Especially the design of the auctions for renewable energy support is crucial. If the auctions aim to encourage the uptake of CSP projects and CSP collaborative projects, they should prioritise the inclusion of two main design elements: they should be technology-specific and they should value the dispatchability feature of the technology. This dispatchability feature could be included by specifying a time-diverse generation profile, by offering higher remuneration at times of higher demand, or by requiring a minimum number of hours of storage as a pre-qualification.

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 pave the way for cooperative renewable energy development in the future and to hedge the additional risks and reduce the added complexity of developing renewable energy projects cooperatively. This implies the further development of an effective supportive regulatory framework on EU level and the targeted design and application of existing instruments under the recast RES Directive 2018/2001 as well as the efficient use of the available funds for cross-border RES projects under the Connecting Europe Facility (CEF) and the RES financing mechanism.

Another important aspect in this regard is the public awareness and acceptance of renewable energy cooperation projects. This is crucial to ensure the long-term sustainability of RES strategies and to avoid local resistance against potential projects in the future. The awareness of the benefits of RES cooperation among the Member States of the European Union is still at an early development stage and skepticism towards collaborative RES projects is common. Thus, to ensure broad public support and avoid opposition to future CSP cooperation projects, basic groundwork needs to be done to spread respective narratives and create awareness for the benefits of renewable energy cooperation projects among the general population as well as all other relevant stakeholder groups, such as NGOs or other relevant local and national stakeholders.

In summary, to address the identified key issues and barriers to collaborative CSP deployment in Europe, a detailed road map and action plan has been developed where three main fields of action that need to be addressed by policymakers on European and national level are distinguished:

• Political and regulatory framework: Definition of ambitious and technology-specific goals, provision of targeted support, and creation of a suitable market design that recognizes the value of CSP as a dispatchable renewable energy technology.
• Techno-economic framework: Enhancing the competitiveness of CSP by further reducing the LCOE, effectively hedging project implementation risks, and facilitating project financing
• Socio-political framework: Creating a broad public acceptance and awareness for the benefits of CSP and the importance of collaborative European approaches for renewable energy support and establishment of the respective political narratives.

The roadmap and more information about the project can be found at www.mustec.eu

More information:
MUSTEC Coordinator: Yolanda Lechón, yolanda.lechon@ciemat.es
Contact Person: Alexandra Papadopoulou, alexpapa@unipi.gr
LinkedIn Page: https://www.linkedin.com/company/mustec/
Twitter: #MUSTEC

MUSTEC has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 764626