Renewables Review: Concentrated Solar Thermal Electricity Generation
Concentrated solar thermal electricity generation, often known as concentrated solar power (CSP), is one of the most visually striking renewable energy technologies. Instead of converting sunlight directly into electricity like photovoltaic panels, CSP uses mirrors to capture and focus sunlight into heat. That heat is then used to create steam, spin a turbine and produce electricity in a way that looks remarkably similar to a traditional power station—just fuelled entirely by the sun.
What sets CSP apart from most other renewables is its natural ability to store energy. Because it produces heat first, CSP can hold that thermal energy for hours in molten salt tanks and release it later, providing steady, dispatchable electricity even after sunset. In a world where renewable energy must increasingly meet round-the-clock demand, this ability to deliver evening power is one of CSP’s greatest attractions.
At the same time, CSP is more complex and capital intensive than solar PV, and its industry has experienced ups and downs as global markets shift. In this review, we explore the benefits of CSP, the challenges it faces, how the technology has played out in Australia, and how it continues to evolve on the world stage.
Key Benefits of Concentrated Solar Thermal Electricity Generation
Integrated Thermal Energy Storage
One of CSP’s biggest strengths is the ability to store heat and use it later to produce electricity. Most modern plants use molten salt tanks capable of holding energy for many hours. This allows CSP to continue generating well after the sun goes down, making it a valuable source of firm renewable power that can help cover evening demand peaks.
This thermal storage gives CSP an advantage that standard solar PV lacks. Instead of relying solely on external batteries, the capacity to shift energy is built directly into the system.
Familiar Power Station Technology
Beneath its field of mirrors, a CSP plant functions much like a conventional thermal power station. It uses high temperature heat, boiling water, steam turbines and generators—systems that the power industry has used for more than a century.
This similarity can simplify integration with the grid, and in some regions CSP plants have even reused skills or infrastructure from older fossil-fuel sites. For engineers and operators, CSP feels more like an evolution of an existing system than something entirely new.
High Temperature Capability
CSP produces heat at extremely high temperatures—far higher than standard solar thermal systems for hot water. This unlocks the potential for industrial uses beyond electricity alone.
Industries such as mining, minerals processing, chemical production and desalination require high-grade heat. CSP can provide both electricity and thermal energy, making it a strong candidate for decarbonising industrial processes in regions with strong sunlight.
Strong Performance in Sunny, Clear-Sky Regions
CSP thrives in areas with intense, direct sunlight—particularly desert and semi-arid zones. When skies are consistently clear, CSP can deliver predictable, high-output performance. When combined with its integrated storage, this predictability translates into improved grid stability.
In these optimal environments, CSP can offset the limitations of solar PV by providing renewable energy long after PV output drops.
Challenges and Limitations of Concentrated Solar Thermal
High Capital Costs
CSP is expensive to build. The mirror field, tower or trough system, molten salt storage tanks, heat exchangers, turbines and cooling systems together create a much higher upfront cost than solar PV or wind. Although CSP offers firm power, financiers often view it as riskier and more complex.
These costs can make projects difficult to fund unless long-term contracts or strong government policy support is in place.
Strong Competition From Solar PV and Batteries
Solar PV has experienced dramatic price reductions over the past decade. Combined with cheaper lithium-ion batteries, PV has quickly become the default choice for new renewable generation in many markets. This shift has made it harder for CSP to compete on cost alone, even though CSP offers features PV cannot replicate without additional systems.
Many planned CSP projects worldwide have been redesigned as PV-battery hybrids simply because they are cheaper to build.
Land, Siting and Water Requirements
CSP requires large amounts of flat land with minimal shading. It also performs best in regions with very high levels of direct normal irradiance—sunlight that comes in a straight line without cloud diffusion. This limits CSP’s ideal locations to desert or semi-arid regions.
Traditional steam cycles often require significant water for cooling, which can be challenging in hot, dry environments. Some plants use dry cooling to reduce water consumption, but this lowers efficiency and increases costs.
Industry Maturity and Supply Chain Limitations
While CSP has been repeatedly proven, it is still a smaller and less standardised industry than solar PV. That means fewer suppliers, less competitive bidding and more customised engineering for each project. These factors can inflate costs and increase risk.
Some early CSP plants experienced cost overruns or performance issues, shaping investor perceptions and making it harder for newer, more refined CSP designs to attract financing.
Concentrated Solar Thermal in Australia
Australia has some of the best solar resources in the world, which has always made it a natural candidate for CSP. However, while the potential is strong, the commercial reality has been more complex.
The most well-known Australian CSP proposal was the Aurora Solar Thermal Plant planned for Port Augusta in South Australia. The design featured a central tower surrounded by thousands of mirrors and around eight hours of molten salt thermal storage. The goal was to supply dispatchable renewable energy into the evening peak, replacing some of the capacity lost when the region’s coal plants closed.
Despite strong initial support and significant public interest, the project was ultimately unable to secure the full financial backing needed for construction. It remains one of the clearest examples of CSP’s promise and its economic challenges in a market dominated by cheaper PV and battery systems.
Another Australian effort came from a company developing modular CSP systems capable of providing both electricity and high-temperature industrial heat. Although several promising pilot systems were built, the company faced financial difficulties before reaching full-scale commercial deployment.
Research interest in CSP remains active within Australia. Universities continue to explore high-temperature materials, improved heat-transfer fluids and hybrid renewable systems that combine CSP with other technologies. Australia’s strong sunlight and industrial heat demand mean CSP still has long-term potential—particularly for energy-intensive industries located in remote or sunny regions.
Global Perspective and Notable Projects
Worldwide, the total installed CSP capacity remains modest compared with solar PV, but the technology has seen successful deployment in several countries. Spain was one of the earliest leaders, constructing a fleet of parabolic trough and tower-based plants equipped with molten salt storage. These plants helped demonstrate that CSP could reliably shift solar energy into evening hours.
Morocco became home to one of the world’s largest CSP complexes, a multi-stage development combining troughs and towers with thermal storage. Its design allows the plant to operate well after dark, giving Morocco a stable renewable energy source and reducing dependence on imported fuels.
Other regions with notable CSP deployments include the United States, South Africa, Chile and China. These countries have used CSP to support grid stability, power mining operations, and provide clean electricity in areas with high solar resources and growing energy demand.
China in particular has invested heavily in new CSP projects, building multiple large-scale plants using both tower and trough technologies. These installations help diversify the country’s renewable mix and complement the vast amounts of PV and wind already deployed.
Looking Ahead: The Future of Concentrated Solar Thermal
The future of CSP is likely to be more specialised rather than widespread. Instead of competing directly with ultra-cheap solar PV and batteries for general electricity generation, CSP is increasingly viewed as a technology well suited for specific high-value roles.
These roles include providing long-duration thermal storage, supplying heat for industrial processes, and supporting hybrid renewable systems that require both electricity and dispatchable heat. In regions with intense sunlight and strong evening power demand, CSP may still offer unique advantages.
CSP technology continues to evolve, with ongoing research into higher-temperature storage, new heat-transfer materials, supercritical CO₂ turbines and more compact plant designs. These advancements may improve efficiency and reduce costs over time, opening new opportunities for deployment.
Despite its challenges, concentrated solar thermal remains one of the most compelling renewable technologies—capable of turning the sun’s heat into clean electricity and industrial power long after daylight ends. In the broader renewable energy landscape, it serves as both a reminder of the sun’s enormous potential and a signpost toward future solar technologies yet to come.
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