Article

The Economics of Solar Thermal Electricity For Europe, North Africa, and the Middle East

SSRN Electronic Journal 01/2008; DOI: 10.2139/ssrn.1321842
Source: RePEc

ABSTRACT

A climate crisis is inevitable unless developing countries limit carbon emissions from the power sector in the near future. This will happen only if the costs of lowcarbon power production become competitive with fossil fuel power. We focus on a leading candidate for investment: solar thermal or concentrating solar power (CSP), a commercially available technology that uses direct sunlight and mirrors to boil water and drive conventional steam turbines. Solar thermal power production in North Africa and the Middle East could provide enough power to Europe to meet the needs of 35 million people by 2020. We compute the subsidies needed to bring CSP to financial parity with fossil-fuel alternatives. We conclude that large-scale deployment of CSP is attainable with subsidy levels that are modest, given the planetary stakes. By the end of the program, unsubsidized CSP projects are likely to be competitive with coal- and gasbased power production in Europe. The question is not whether CSP is feasible but whether programs using CSP technology will be operational in time to prevent catastrophic climate change. For such programs to spur the clean energy revolution, efforts to arrange financing should begin right away, with site acquisition and construction to follow within a year.

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    • "Based on this, IIASA and PIK researchers modeled the impact, or the cost increase, of the perceived investment risks using the MARGE generation cost estimator framework. With this model, Williges et al. (2010) showed that the total subsidy costs for driving CSP through the learning curve and making it competitive with coal could cost European tax payers subsidies in the order of magnitude of e20–40 billion over 20 years, a conclusion consistent with other results (Ummel and Wheeler 2008, Williges et al. 2010). Changing the internal rate of return, thus simulating a change in perceived risk level and consequently risk premium, "
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    • "Our analysis is the most comprehensive in the literature. Compared to previous policy scenarios analysis we use a solid energy-economy modelling framework (Trieb 2006; Patt et al. 2008; Ummel and Wheeler 2008; Jacobson and Delucchi 2010). With respect to Bauer et al. (2009) we make further considerations on the nature of the electricity trade between the Euro-MENA; we also introduce CSP powered SG also in the USA and in China. "
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    Preview · Article · Jun 2011 · SSRN Electronic Journal
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    • "Based on this, IIASA and PIK researchers modeled the impact, or the cost increase, of the perceived investment risks using the MARGE generation cost estimator framework. With this model, Williges et al. (2010) showed that the total subsidy costs for driving CSP through the learning curve and making it competitive with coal could cost European tax payers subsidies in the order of magnitude of e20–40 billion over 20 years, a conclusion consistent with other results (Ummel and Wheeler 2008, Williges et al. 2010). Changing the internal rate of return, thus simulating a change in perceived risk level and consequently risk premium, "
    [Show abstract] [Hide abstract]
    ABSTRACT: This article was submitted without an abstract, please refer to the full-text PDF file.
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