CSP capex costs fall by almost half as developers shift towards China and Middle East

The cost of building new CSP plants has fallen significantly as developers have moved towards China and the Middle East and embraced tower technology with storage, New Energy Update has found.

New Energy Update’s latest analysis of 16 CSP projects with investment decisions since 2016 shows that capital expenditures (capex) were between $3,910/kW and $6,355/kW. Energy storage capacities range from six to 16 hours. In comparison, the capex of plants installed from 2013 to 2015 ranged from $6,050/kW to 12,600/kW, for plants with four to eight hours’ storage, according to a study by the International Renewable Energy Agency’s (IRENA). Capex for plants with more than eight hours’ storage was between $7,300/kW and 11,300/kW, IRENA said, while costs for plants without storage were generally lower.

The list of 16 projects agreed since 2016 include 12 in China with 50-100 MW capacity each, and four non-Chinese projects with between 150 MW and 700 MW capacity. It includes a mix of tower, parabolic trough, and linear fresnel technologies. 

The U.S. National Renewable Energies Laboratory (NREL) has forecast a mid-range capex of around $5,000/kW by 2050, and a low-range estimate of around $3,000/kW.

Although levelized cost of energy (LCOE) is generally considered the best indicator of a project’s financial viability, capex is also important. CSP plants are more expensive and time-consuming to build than wind or solar PV, making it tough for them to attract investments. As a group of academics concluded in a recent paper on CSP costs in the South African Journal of Engineering, private financial institutions are less likely to support developing technologies because the investment is higher risk.

Capex of CSP projects confirmed since 2016