November 5, 2010
On October 27th 2010 the Moroccan King has inaugurated a 2 500 ha solar complex in Ourzarzate, in the south of Morocco. In the first stage, a solar-thermal plant with a capacity of 0.5 GW will be built. By 2020 the complex will reach a capacity of 2 GW, bigger than anything being planned for the time being. The bidding process for the first stage is under way, with 19 companies participating and the results to be proclaimed in the first half of 2011.
As the only major North-African country without any gas or oil deposits, Morocco constitutes the van-guard in the race for a sustainable energy system. To that end, it has introduced the necessary institutional and legislative framework, inter alia by establishing an agency for solar energy (MASEM), and started implementing a long-term energy strategy targeting energy efficiency, wind and solar power. It has secured a sizeable tranche from the $ 5.6 billion, which the World Bank “Clean Technology Fund” will make available for financing solar power generation in the Mediterranean.
The Moroccan developments have to be seen in the context of four complementary initiatives that have been taken since 2008 for promoting solar and wind energy in the Mediterranean.
• The Mediterranean Solar Plan adopted by the Union for the Mediterranean, which calls for the construction of 20 GW solar power capacity, of which 5 GW for export to Europe, by 2020.
• The DESERTEC initiative launched in Munich in July 2009, by a group of 12 major European companies specialised in finance, energy generation and construction of power plants and transmission networks.
• The Green Tech initiative launched in July 2010 by the French government and a group of 15 European industrial and energy companies, as the French pendant to DESERTEC.
• The Mediterranean climate change initiative (MCCI), proclaimed by the Greek government and 20 Mediterranean countries including seven EU members, 22nd October 2010, with the dual objective of influencing regional and global climate policy and promoting renewal energy projects in the participating countries.
These are positive developments.
The governments around the Mediterranean have understood the serious risks of climate change for their future development and seem prepared to take the necessary action to minimise the impact of climate change on their citizens without waiting for global solutions. They also realise that the Mediterranean constitutes a major hub for renewable energy with positive technological consequences for their economies. Libya, Algeria, Syria and Egypt have joined these initiatives, implicitly recognising the prospect of their gas and oil reserves being depleted in the next few decades.
For the first time, European and MENA countries, governments and the private sector are sitting together in one boat and define a clean energy path until the middle of the century. This is by itself something like a revolution.
The obstacles to overcome are substantial.
The single biggest obstacle is the substantial cost differential between conventional and solar/wind energy. Presently renewable energy is roughly three times more expensive than from gas or coal (10-15 cents versus 3-6 cents per kWh), with wind still having an edge over solar.
DESERTIC estimate that solar power will reach a break-even point with conventional sources between 2020 and 2030, as the result of two converging forces: cost reduction for solar due to technological improvements and large-scale manufacturing and rising costs for fuel and environment.
Presently, it is therefore not attractive for private investors to build solar – or wind – power plants in Morocco, Tunisia, Egypt, Turkey or Spain. Governments will have to create the necessary incentives for utilities to invest in solar or wind energy projects.
Basically they have to raise the price of fossil energy and make electricity generated from coal or gas much more expensive.
The EU is in the process of doing so by obliging its power companies to cut their C02 emissions and generate 30 percent of their electricity from renewable sources by 2020. European utilities will therefore have the option of importing solar electricity from Morocco or Tunisia to comply with EU climate obligations. But solar power from the Sahara will have to compete with wind power from the North Sea, which North European utilities still prefer.
According to TRANSGREEN the share of electricity generated in Europe from nuclear and renewable sources is expected to rise from 45 percent in 2010 to 66 percent as early as 2020. The European side will therefore do fine, even if North Africa will not yet benefit much from the ongoing transition in the North.
Governments in North Africa are only in the beginning of formulating a long-term policy for the development of renewable energy. They shy away from making electricity more expensive, being afraid of social unrest; and for budgetary reasons they cannot afford subsidising the use of renewable energies.
But somehow they will have to come to terms with the short term socio-political constraints and the long-term economic and ecological necessities.
The easiest way to do would be by obliging utilities to generate rising shares of their electricity production from renewable sources. They should follow the EU and fix mandatory targets, say 30 percent of electricity generation from solar or wind sources, to be reached by 2020-25. This would have an immediate impact on investment decisions, while allowing for a progressive rise of electricity rates.
Transmission of solar power to Europe will take at least another 10 years before starting at a significant scale. In the long-term, solar power will become more important than wind power for supplying Europe with green electricity, the solar potential being 3-4 times bigger than that of wind and more than 5 times than that of Europe’s hydropower.
Europe’s long-term energy security will depend on two crucial factors: reliable supply agreements with North African countries and a network of high voltage direct current (HVDC) transmission lines connecting wind parks in the North/Baltic Seas and solar power plants in North Africa.
In geopolitical terms, North Africa will therefore remain as important as ever for Europe; and the Union for the Mediterranean should reflect that mutual interdependence.
In technical terms, the EU should start launching informal talks with North African countries on long-term power supply agreements. Morocco might be in the vanguard, as it is already connected to Spain by an undersea cable and as its solar power generation capacity may temporarily exceed its domestic demand.
In parallel, the EU should start the complex planning process for the long-distance HVDC grid, parts of which might have to be installed underground for reasons of public opposition.
In conclusion, Europe finds itself relatively well positioned for its path towards a non-fossil energy system. But unlike the USA or Australia it will never be able to reach renewable energy autarky. It will always depend on the good cooperation with its southern neighbours for the solar part of its future energy supply. More than ever it should cultivate close political, economic and cultural relations with its southern neighbours.
Brussels 31.10.10 Eberhard RheinAuthor : Eberhard Rhein