FACTBOX: CSP and photovoltaic solar power

(Reuters) - Desertec, a 400 billion euro plan to power Europe with sunlight from the Sahara, is the world’s most ambitious solar power project and would be a major example of concentrated solar power (CSP) technology.

CSP, which uses mirrors rather than solar cells to generate electricity, has been used in California since the 1980s. Solar Photovoltaic (PV) systems, which have been developed particularly in Germany, are more established and faster growing.

Following are some key facts about the two systems:

* Grid-connected solar photovoltaic (PV) is the fastest growing power generation technology, with a 70 percent increase in existing capacity in 2008.

* At end-2008 there was 13 GW of generating capacity in PV systems connected to grids, compared with just 0.5 GW for CSP overall worldwide.

* Efficiency gains and improving technology have encouraged companies such as Spain’s Abengoa Solar to push CSP as a credible rival to solar PV.

* According to the German Aerospace Center, CSP is likely to become competitive with world market prices of most fossil fuels by 2015. Until then, utilities are likely to need feed-in tariffs offering them a guaranteed price above market rates.

* New CSP projects are under contract in Arizona, California, Florida, Nevada, and New Mexico in the United States and under development in Abu Dhabi, Algeria, Egypt, Israel, Italy, Portugal, Spain, and Morocco. A growing number of these future CSP plants will include thermal storage to allow operation into the evening hours.

* The cost of CSP-generated electricity at 12 U.S. cents per kilowatt hour will halve by 2015 to a level similar to gas and coal power today, excluding carbon penalties on those hydrocarbon fuels, according to the Web site of Desertec’s Australian affiliate, Desertec-Australia.

* CSP’s backers predict it will become the cheapest power source for energy-hungry desalination plants that remove the salt from sea water for drinking and growing crops.

* These companies are part of the Desertec Industrial Initiative:

-- Swiss engineering group ABB, a specialist in high-voltage, direct-current transmission grids

-- German engineering conglomerate Siemens

-- Spanish engineering firm Abengoa, whose solar power arm is building CSP installations in Spain, Morocco and Algeria

-- Algerian food group Cevital

-- Deutsche Bank, Germany’s biggest bank

-- German utility E.ON

-- German utility RWE

-- German state-owned bank HSH Nordbank

-- MAN Solar Millennium, a joint venture of MAN Ferrostaal (an affiliate of German engineering equipment maker MAN) and Solar Millennium, which makes CSP equipment including parabolic troughs that concentrate the sun’s rays.

-- German reinsurance company Munich Re

-- M&W Zander, a German maker of industrial installations

-- German solar panel maker Schott Solar

Reporting by Tom Pfeiffer and Sara Ledwith; Sources: Desertec, Renewable Energy Policy Network for the 21st Century