NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

In October 2019, a Reuters article questioned whether Chile’s Cerro Dominador solar tower and facility served as a “cautionary tale for bold renewable energy vows”. The $1.3bn project – a combined photovoltaic (PV) and concentrated solar power (CSP) facility situated in the Atacama Desert – has been beset with financial difficulty since it was first mooted in 2013. As a result, construction has been painfully slow, with the 100 MW PV component only becoming operational in early 2018.

Those delays have been compounded by technological developments and a more competitive market. Since 2013 the cost of solar panels has fallen drastically, largely thanks to Chinese made products, leading a Corporación de Fomento de la Producción (Corfo) representative to tell Reuters: “Today it makes no economic sense to generate with CSP during the day, because that’s what photovoltaics are for and they are much cheaper.” Corfo is a government-owned development bank supporting the project.

Israel is contending with a similar issue. Situated in the Negev Desert, Ashalim power station comprises three sites each using different solar technologies, with a fourth planned. It includes a $1.13bn CSP tower and plant. Since contracts were awarded in 2008, the costs of producing electricity through CSP and PV have changed dramatically. PV production has become much less costly, whilst thermal solar power such as CSP has risen sharply, making it unsuitable for large scale power leaving Israel with a costly burden for years to come.