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A new STE initiative in Europe

Thanks to the Spanish STE program, the EU is a global leader in STE technology, profiting from a broad base of diverse companies and sectors.

A domestic STE market of at least 250 MW per year is needed to maintain this leadership. Such market development is in line with the IEA estimate that Europe should install 15 GW of STE by 2030.

An EU-level approach to STE as a Technology of Common Interest is required to support reliable off-take options for STE projects. This approach should combine strategic investments in energy security with support for renewable energy, as well as cohesion and research funding. In particular, innovative commercial projects need support including access to affordable long-term financing.

In addition, STE needs a remuneration mechanism that rewards its system benefits, and long-term transmission rights (15-25 years) to make cross-border projects bankable.

Concrete EU initiatives are required to increase low north-south grid capacities, particularly projects from the Iberian Peninsula, southern Italy and Greece, e.g. using submarine cables.

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MOVING TOWARDS AN EFFICIENT SHARE BETWEEN FLEXIBLE AND NON FLEXIBLE GENERATION VIA A STE DEPLOYMENT PROGRAMME IN EUROPE

Moving to a more efficient share between flexible and non-flexible renewable electricity generation (similar to a Portfolio Standards approach) with a clear EC endorsement and practical support towards Member States for a new STE deployment program in Europe.

Motivation:

  • The STE industry considers – in line with TSOs position – that leaving the completion of the 2020 and 2030 objectives to a purely market- driven process will lead to a further increase of non-flexible RES in Europe (essentially wind, PV);
  • At the horizon 2030 and beyond, a more balanced share between flexible and non-flexible RES will be vital to ensure the reliability in a decarbonized European power system due to the lack of flexible power generation as a whole;
  • Expensive backup capacity from conventional power plants can be avoided if flexible RES is properly and adequately implemented from now on  fossil back up capacities should be considered as part of the costs of non-flexible RES;
  • The support to this program should be the product of a well-coordinated (by EC) combination of supporting sources: Directives, strategic energy security investments, cohesion funds, development and cooperation (outside EU);
  • This is reflected in the late 2014 publication of IEA Technology Roadmap – Solar Thermal Electricity that foresees for Europe 4% of the whole installed capacity by 2050. Such a figure (4%) would mean that 1 GW/year capacity in STE would need to be installed in Europe between 2015 and 2030.
FIRST-OF-ITS-KIND INNOVATIVE STE PROJECT

The re-launch of the STE domestic market in Europe should start with a “first-of its kind” STE plant.

Motivation:

This project – since built on latest innovations – would trigger several effects:

  • It leads to a substantial “push” on the cost reduction curve for STE;
  • It is a first showcase for cross-border trading of renewable electricity in the South and off-takers in the North in Europe and with the EU Neighbourhood;
  • It demonstrates the mutual benefits for participating Member States (be it as participants in the trading or as technology providers);
  • It demonstrates the validity and viability of the Cooperation Mechanisms already provided by the RES Directive 2009;
  • It corresponds to the objectives of H2020 (that was confirmed as potential financial support as well as potential co-funding source but also the INNOVFIN programme[1]. In this context, ESTELA reported about already started discussions with Commissioner Moedas and the DG R&I (RES Unit Paul Verhoef) in cooperation with the Spanish national and regional authorities;
  • It helps re-establishing investors’ confidence in Europe for STE projects.

[1] http://www.eib.org/products/blending/innovfin/

GENERATION FLEXIBILITY ASSESSMENT

Promotion of an adjustment of the market design towards a differentiated support to renewables along the following criteria:

Motivation:

  • Technology-neutral, market-based assessment of the flexibility of generation (PV+battery, STE+thermal storage, hydropower storage, etc.) aiming at revealing the true costs of the different solutions especially including the necessary additional investments in conventional generation to backup a further increase of intermittent renewables in the system in the next years;
  • Maturity (already achieved market penetration) of various RES technologies taking as a basis significant commercial/operational references;
  • Full cost-benefits assessment including the benefits to Europe economy at large (growth, technology leadership, jobs).
SUPPORT TO EUROPEAN STE INDUSTRY ON WORLD MARKETS

Especially towards European financial institutions, the EC should actively backup the development of new financing mechanisms impacting the competitiveness of European industries engaged on such markets in competition to non-EU entities.

Motivation:

  • Until 2050, STE is expected to become the main power generation source in MENA and South Africa;
  • The European STE industry is present in all these markets in a strong competition with non-EU entities;
  • The advantage of European industry lays in its innovation strength that can only be kept and further increased if there is a domestic market for STE;
  • Ahead of COP 21 2015 in Paris, the support to the deployment of STE worldwide is a significant and cost-efficient contribution to the global combat against climate change.

Finally ESTELA invited the Cabinet to participate in the ESTELA Workshop on 24 September, which was a priori accepted by the EC participants.