Rhein on Energy and Climate

Exploiting the immense solar energy potential of the Sahara for supplying all countries around the Mediterranean and Europe with clean energy has been a vision since the technical development of large-scale solar power generation in the mid-1980s.

In 2007 the Club of Rome has presented the DESERTIC Concept, the realisation of which would combine the huge potentials of wind power in north-west Europe and solar power in the Sahara by a super-grid connection.

As a first concrete step towards what will become the biggest ever energy venture in Europe and North Africa, 20 major European companies have decided to tackle the challenge and form a consortium to be launched 13th July, at the initiative of the “Münchener Rückversicherung”

The technology for generating solar thermal power has existed for 25 years. Since the mid-1980s solar thermal power plants with a total capacity of 400 MW have operated successfully in California.

More recently, several new plants with a capacity of 160 MW are being built in Spain, Morocco and Algeria, and the interest in solar thermal power plants has risen world-wide with projects of more than 5000 MW being in more or less advanced stages of planning.

Together with photovoltaic and wind, solar thermal electricity generation will become one of the three dominant renewable energy technologies of the 21st century.

Europe needs to be a world leader in each of them. The three technologies are complementary; Europe will have to rely on all the three for covering its rising demand for electricity in the coming decades.

None of them is presently fully competitive with electricity from fossil sources, due to the fact that market prices of fossil electricity do not fully reflect their external costs, resulting from climate change and environmental damage. But due to rising prices of fossil energies and fast technological progress of solar and wind power the cost differentials are diminishing. By 2020 the generation of solar and wind electricity in optimal locations should not be more expensive than electricity from coal or gas, especially if the Copenhagen climate deal imposes severe C02 emission caps.

Solar thermal technology is best suited for large-scale electricity generation in regions with intensive sunshine throughout the year: for Europe the Mediterranean and the Sahara desert offer ideal conditions. There is more than plenty of sunshine and empty space. A tiny area of less than 35 000 km2 would suffice to supply Europe and North Africa with electricity

Like any new technology solar thermal power generation poses technical, economic and political problems.

Technically, one still needs to find optimal answers to the storage problem. Electricity cannot be stored; during the night the generators have to be driven by steam from molten salt, which involves an extra cost.

More serious might be the availability of sufficient solar heat during the winter months, when the thermal impact of solar radiation is less than during the summer. One should therefore expect less electricity being generated during the winter months when it is most needed.

A third technical problem is the risk of sand storms, which may temporarily disturb power generation and even damage the mirrors when exposed to heavy sand storms. One answer might be to deploy mobile protections in advance of impending sand storms.

The single biggest problem is the transmission of electricity over distances of 2000-3000 km. High-voltage direct current will help reduce transmission losses to no more than 3 percent per 1000 km. Assuming an average distance of 3000 km from the optimal production sites to the consumer centres, this would add some 10 percent to generation costs, to which to add the amortisation and interest cost on the investment in the grid.

Economically, the only real issue is competitiveness. Currently, generating one kWh of solar thermal electricity costs around € 0.1/kWh, compared to fossil-generated electricity € 0.05- 0.1/kWh. Both European and US sources expect generating costs for solar thermal power to decline to around € 0.05/kWh by around 2020. Assuming a further rise of fossil energy prices it should be therefore be possible to profitably generate solar thermal electricity in North Africa for supplying demand in urban coastal areas around the Mediterranean no later than 2020.

Politically, the newly created “Union for the Mediterranean” puts the joint development of renewable energies among its top priorities.

The EU and its North African partner countries should therefore, without further delay, establish the regulatory basis necessary for the development of solar energy in view of offering a reliable and long-term framework for potential investors from both sides of the Mediterranean:

· Which North African countries are willing to become long-term suppliers of electricity to Europe?

· Which countries are willing to authorise joint-ventures between EU and Arab energy companies?

· Will the high voltage grid be separated from the generation of electricity; who will own and run it? A consortium of governments or companies?

Hopefully the European consortium will announce on the date of its formal launching July 13th that it is prepared to massively invest in solar thermal power in the Mediterranean. It needs to signal to public opinion that there is a serious alternative to fossil power.

In the first stage, the consortium should focus on the North African market and build several 100-200 MW power plants, say in Algeria, Egypt, Morocco, Turkey and Saudi Arabia, in partnership with local energy companies. To be fully competitive these should operate on heat from solar and gas, in line with the path Algeria and Morocco have gone in the last few years.

As a precondition and incentive, the governments concerned should agree to drop whatever subsidies on fossil fuels still exist within the next five years.

It is unlikely for Europe to be supplied with significant volumes of solar electricity from North Africa before 2020. This requires long and detailed preparations of technical, financial, administrative and legal nature. Nothing would be worse than to rush ahead half-prepared.

Indeed, very long lead times are necessary to put in place the new technologies required for transforming our conventional energy supply, whether the transition to non-fossil power generation or the conversion of automobiles from combustion to electric engines.

In that perspective, we should congratulate the Munich insurance company for taking a serious long-term business initiative for solar thermal power generation.

Brussels 22.06.09 Eberhard Rhein

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