Schlumberger Energy Institute Solar | Page 3

SP capacity is not increasing fast enough C compared to expected development CSP installed capacity was just 2.8 GW at the end of 2012, even though the first commercial plant started operating in 1986 and despite a wave of construction in Spain during the mid-2000s and in the US and North Africa as part of EOR programs. Plans for several CSP projects have been cancelled because of the economic crisis or converted to solar photovoltaic, a technology that benefits from reductions in the Solar Photovoltaic module price. CSP capacity is nonetheless expected to reach almost 11 GW by 2017, with the US, India, China and Middle East & North Africa (MENA) countries overtaking Spain as market leaders. In the long run, the International Energy Agency (IEA) estimates that CSP would need to meet 8%-10% of global electricity demand by 2050 CSP is likely to benefit from large cost reductions CSP is a capital-intensive technology. Initial investment, dominated by solar field equipment and labor, ranges from 2,500 to 10,200 USD per kW - mainly depending on capacity factor and storage size and accounts on average for 84% of the electricity generation costs of CSP. Economies of scale, declines in component costs due to mass production and improvements in materials, higher process and technology efficiency are expected to result in a fall in the cost of electricity from CSP of up to 55% within the next two decades. Widespread deployment is now essential if the industry is to benefit from the learning curve and create a virtuous circle. 3 | slb.com 84% Electricity generation costs of CSP.