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Financing concentrating solar power in the Middle East and North Africa--Subsidy or investment?

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  • Trieb, Franz
  • Müller-Steinhagen, Hans
  • Kern, Jürgen

Abstract

The paper presents a strategy for the market introduction of concentrating solar power (CSP) plants in the Middle East and North Africa (MENA) that will not require considerable subsidization and will not constitute a significant burden for electricity consumers in the region. In the first section, the paper explains the need of MENA countries for sustainable supply of electricity and calculates the cost of electricity for a model case country. In the second part, the cost development of concentrating solar power plants is calculated on the basis of expectations for the expansion of CSP on a global level. After that, the challenges for the market introduction of CSP in MENA are explained. Finally, we present a strategy for the market introduction of CSP in MENA, removing the main barriers for financing and starting market introduction in the peak load and the medium load segment of power supply. The paper explains why long-term power purchase agreements (PPA) for CSP should be calculated on the basis of avoided costs, starting in the peak load segment. Such PPA are not yet available, the paper aims to convince policy makers to introduce them.

Suggested Citation

  • Trieb, Franz & Müller-Steinhagen, Hans & Kern, Jürgen, 2011. "Financing concentrating solar power in the Middle East and North Africa--Subsidy or investment?," Energy Policy, Elsevier, vol. 39(1), pages 307-317, January.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:1:p:307-317
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    References listed on IDEAS

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    1. DeAnna Green, 2009. "Addressing concentrated poverty in America," Communities and Banking, Federal Reserve Bank of Boston, issue Win, pages 24-27.
    2. Andris Piebalgs, 2006. "Green paper: A European strategy for sustainable, competitive and secure energy," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(02), pages 8-20, July.
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