The Role of Public Finance in CSP: Lessons Learned

The document argues that public finance is essential to close the 'viability gap' for CSP, as more than 98% of plants built by 2012 required such support. It highlights that while international financial institutions (IFIs) provide critical long-term debt and concessional finance, currency hedging costs often offset these benefits. The authors suggest that deploying 5-15GW of CSP could reduce electricity production costs by 14-44%, potentially making the technology competitive in Morocco and South Africa. Key recommendations include moving away from flat tariffs to remunerate the flexibility provided by thermal storage and transitioning from international to local private debt to ensure long-term sustainability.

• Public support is globally necessary for CSP to close the viability gap, with over 98% of all CSP plants constructed by 2012 requiring some form of public assistance.
• Coordinated deployment of 5-15GW of CSP by international finance institutions and national governments could lower electricity production costs by approximately 14-44%, potentially making CSP competitive in South Africa and Morocco.
• In India, the benefits of low-cost foreign public debt are largely negated by the high costs associated with hedging foreign currency risks.
• Different auction and tariff models yield varied results: Spain's high feed-in tariffs drove rapid deployment (2.3 GW in under five years) but were costly and lacked cost-reduction incentives, while India's reverse auctions led to overly low bids that resulted in financially weak projects and missed deployment targets.
• International public finance is most effective when targeted at countries with high political commitment but weak capital markets, or for early-stage technologies like power towers with high storage capacity that offer significant energy system benefits.
• To maximize the value of CSP, policymakers should transition from flat power tariffs to pricing that remunerates the flexible and stable power supply provided by thermal storage, which is more valuable as the penetration of fluctuating renewables increases.

APA

Stadelmann, M., Frisari, G., & Rosenberg, A. (2014). The Role of Public Finance in CSP: Lessons Learned. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/06/The-Role-of-Public-Finance-in-CSP-Lessons-Learned.pdf

Chicago

Stadelmann, Martin, Gianleo Frisari, and Anja Rosenberg. The Role of Public Finance in CSP: Lessons Learned. Climate Policy Initiative, 2014. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/06/The-Role-of-Public-Finance-in-CSP-Lessons-Learned.pdf.

Wikipedia

{{cite report |last1=Stadelmann |first1=Martin |last2=Frisari |first2=Gianleo |last3=Rosenberg |first3=Anja |title=The Role of Public Finance in CSP: Lessons Learned |publisher=Climate Policy Initiative |date=June 2014 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2014/06/The-Role-of-Public-Finance-in-CSP-Lessons-Learned.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stadelmann2014role, author = {Stadelmann, Martin and Frisari, Gianleo and Rosenberg, Anja}, title = {{The Role of Public Finance in CSP: Lessons Learned}}, institution = {Climate Policy Initiative}, year = {2014}, month = jun, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2014/06/The-Role-of-Public-Finance-in-CSP-Lessons-Learned.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }