Current government renewable energy policy in Spain has made the country the epicentre of a new growth phase in the concentrated solar power (CSP) market, according to a new market study.

But the report indicates that Spain’s position in the global market will depend on the government’s willingness to continue fostering development through feed-in tariffs, and that it may eventually have to compete with the USA to hold on to its lead.

The research, by US advisory firm Emerging Energy Research (EER), says that the CSP industry is scaling rapidly with 1.2 GW under construction as of April 2009 and another 13.9 GW announced globally through 2014. Installed capacity around the world could reach 25 GW, says EER.

“If the 2009 global financial climate remains challenging, weaker projects in the CSP pipeline and some developers will be shaken out,” says EER Research Director Reese Tisdale. “However, the long-term trend toward CSP technology adoption remains strong, particularly with the Spanish government carrying forward near-term build-out.”

Spain is currently leading the way due to the current Spanish Royal Decree, which calls for 500 MW of solar CSP by 2010, and the country’s feed-in tariff for renewable energy. These policies have encouraged Spanish CSP developers such as Abengoa solar and Sener to take on major technology risks.

The rest of southern Europe has yet to catch neighbouring Spain’s solar CSP fever, primarily due to a lack of government incentives, says EER. However, Spain’s leadership could be hit if a review of the feed-in tariff system leads to a change in policy.

Spain currently has 22 CSP projects with a total capacity of 1037 MW under construction and a further 5000 MW in the pipeline, says EER. This compares to just 75 MW of CSP under construction in the USA, but this market has great potential with 8.5 GW in the pipeline and scheduled for installation by 2014.

“The US market has been held up considerably by the permitting process in California, the US Bureau of Land Management process, and more recently by the financial crisis,” says Tisdale. “Ultimately, the US market is considered to have the greatest upside for CSP potential given its solar resources, space availability, proximity to load, and growing pressure to mitigate carbon emissions.”

Parabolic trough technology represents more than 96 per cent of all CSP projects under construction in Spain, but just 40 per cent of pipeline projects in the USA.

“The US market has a greater technology mix, as the highly cost-competitive marketplace encourages innovative technology development, such as central receiver, dish engine, and linear Fresnel,” according to Tisdale. “The race is on to determine which CSP technology can deliver, particularly in the uncertain economic climate.”

Other regions where CSP activity is gaining momentum include the Middle East, North Africa and parts of Asia-Pacific.