The global insolation map has three notable patches of dark red: one in western Australia; another in southwest US; and perhaps the largest stretching from Algeria across North Africa all the way to the Arabian Gulf. It is in these regions where the most sun hits the ground, creating the greatest potential for solar energy. The large swathe in the MENA region is of particular interest these days. It runs through countries that are fast-growing and in need of additional sources of energy and new exports.
The virtually untapped solar energy is also not far from Europe, a continent that has a huge demand for alternative energy and a relative lack of sunshine. Governments and industry have recognised the opportunity and are pushing to turn the unexploited solar resources in the MENA deserts into real energy that can be transported regionally and northward.
The story being pitched is sensible, believable and quite compelling. The Sahara Desert gets about 3500 hours of sunshine a year, as much or more than the best areas for solar energy in the US. In theory, just 0.3% of North Africa’s desert could supply all the electricity needs of both MENA and the EU – six hours of sun hitting the world’s deserts could power the entire world for an entire year. Importantly, the land in question is for the most part uninhabited, making the argument for locating solar projects there just that much more interesting. The clean energy could be created without disrupting lives or crowding out crops. 100% RENEWABLE: The context is important. The EU has set an ambitious goal of supplying all its energy from renewable sources by 2050, by which time it is also hoping to reduce its carbon emissions by at least 80%. To help it achieve those targets, connections to the desert assets of North Africa are being considered and actively pursued. The Desertec Foundation, an organisation working to develop solar power in North Africa that can be transmitted to the EU grid, believes that 15% of Europe’s energy needs can be supplied by desert-based installations by 2050.
The governments of EU countries accept the need to cross the Mediterranean, and official policy is being written to support international trading. The EU’s Renewable Energy Directive calls for 20% renewable energy within the union by 2020 and permits member states to import energy from non-EU countries to meet their respective quotas.
The MENA region is conducive to the building of solar capacity in the desert. In the 20th century, it was the fastest-growing part of the world: the population of MENA in 2000 was 3.7 times what it was just 50 years earlier, data from the World Bank show. While the fertility rate has fallen (from 6.9 births per woman in 1960 to 2.7 in 2010), it has been more than balanced by an increase in longevity (with average life expectancy at birth rising from 46.4 years in 1960 to 72.4 in 2010). This has left countries such as Egypt with some serious challenges, including overcrowding, a high rate of youth unemployment and a lack of resources (only 2.9% of the country’s land is arable).
Trend Toward Sustainability
Since the 2010 Arab Spring, the trend toward renewables has only strengthened. Before the uprisings, about 10 separate nuclear programmes were in the works in Arab states. They were being pursued in part to address demographic pressures, in particular to power largescale desalination plants to ensure access to safe and clean water. After the uprisings, a number of new nuclear projects in the region came to a halt. The lack of strong governments and in some cases the rise of representative government made it difficult to pursue potentially controversial programmes. Investors also backed off, seeing the new governments as untested. Importantly, priorities have changed. There is a growing sense in the region that countries need to develop in a more balanced way and in a way that brings prosperity to the greatest numbers.
Across the MENA region, solar infrastructure is being established in the desert. Morocco, a country highly dependent on imported oil, has embarked on a $9bn plan to build five alternative energy power stations by 2020. A total of 2 GW of capacity is to be installed. The country already has a 20-MW concentrating solar power (CSP) plant at Aïn Beni Mathar, and work on the first 160-MW phase of a 500-MW solar plant in the Ouarzazate region is expected to be completed by 2015.
Algeria has said it will spend $60bn to develop alternative energy capabilities, and is aiming for 650 MW of renewable power by 2015 and 22 GW by 2030 – 12 GW for domestic use and 10 GW for export. In 2010 hydrocarbons accounted for 60% of budgeted revenues, 36% of its GDP and 96% of its export earnings. Algeria has had a CSP plant operational at Hassi R’mel since 2011, and national power and gas utility Sonelgaz has signed a memorandum of understanding (MoU) with the Desertec Industrial Initiative, a project headed up by the Desertec Foundation. Meanwhile, Compagnie de l’Engineering de l’Electricité et du Gaz, a Sonelgaz subsidiary, has started taking bids for the development of new solar energy plants.
Egypt’s 150-MW Kuraymat solar power plant has been operational since June 2011. The 13-ha facility is part of the country’s push to get 20% of its energy from renewables by 2020. Egypt is also developing a 100-MW solar plant at Kom Ombo, which should be completed by 2017. The country is particularly sunny, with solar radiation standing at more than 8 KWh per square metre per day during the summer months, and with about 300 sunny days a year.
These projects are expected to be brought together via a regional grid that will extend across North Africa through to the Middle East and from there across the Mediterranean to Europe. The idea is to have an interconnected and unified power network that will allow electricity to be transported within and between Europe and MENA. Already, links exist. For example, there are connections between Morocco and Spain, Morocco and Algeria, Algeria and Tunisia, Libya and Egypt, and Tunisia and Libya. Many of these have been around for several years – Morocco and Spain were connected in 1997. In fact, even now all of North Africa is on a grid linked to the EU.
Official efforts have been behind the realisation of the grid. The idea of the Mediterranean Electric Ring (MedRing) has been on the EU agenda since 2001. The concept has since been modified to include other and more advanced links and it has also received additional support from a number of companies and associations. Medgrid, a Paris-based industrial consortium, was founded in 2010 to promote the building of the Mediterranean grid. Its members include French firm Alstom and Germany’s Siemens. Shareholders in the Desertec Industrial Initiative have included European giants such as Deutsche Bank, Siemens and UniCredit, while 3M, HSBC, IBM, Audi and BASF are among its associate members. In 2011 an MoU was signed by Medgrid and Desertec Industrial Initiative to work to make the desert solar vision a reality.
But like many grand projects, the MENA-EU alternative power grid is having its share of challenges. While solar technology has been around for years and is becoming increasingly efficient, it is still very expensive. In a study done by the US Energy Information Administration, solar power facilities cost about four times more per KWh produced than a conventional oil-gas combined-cycle plant.
Despite tremendous improvements, solar panels still do not produce that much power. Photovoltaic cells convert sunlight into energy at about 10-20% efficiency and generate electricity costing about $0. 18-0.30 per KWh. The theoretical maximum efficiency of current technology is 31%.
The very nature of solar energy makes it problematic. Unlike a conventional power source, the output cannot be adjusted depending on demand, so the utility has to have oil or gas generators at the ready should production fall too low. Excess energy also needs to be stored. Batteries are inefficient, expensive and usually toxic. Other solutions, such as hydrostorage in the desert, might be clean, but they also tend to be expensive, hard to adjust and often unworkable in certain environments.
Grids & Lines
The biggest challenge for the MENAEU solar vision is transmission. While a grid does exist in North Africa, it is rudimentary. The Morocco-Algeria-Tunisia connections are relatively good, and that grid has a solid connection with Spain and the EU. But the Tunisia-Libya section of the grid was as of June 2012 not operational. And while Libya and Egypt are technically connected, the link is highly limited. A 2005 attempt to synchronise the grids was not successful and the transmission capacity is currently about a third of what it should be. Going in the other direction towards Europe, there is no interconnection between Syria and Turkey and limited transmission options between Syria and Egypt via Jordan.
Crossing the Mediterranean is also proving to be a something of a challenge. While high-voltage direct current is a relatively straightforward, robust and mature technology, the distances and depths involved are such that most routes across are either too expensive or beyond current cable technology. The Mediterranean has a complex morphology and turns out to be a bottleneck in the plan. To solve this problem, one EU report suggests simply focusing on the classic straights of Gibraltar crossing, which is shorter and not very deep. But that would mean upgrading most of the power grids and interconnections in North Africa, which is both technically challenging, not to mention politically sensitive.
Countries in the Gulf region are gearing up too, with Saudi Arabia and the UAE having made major strides in solar energy development. In early 2012 Dubai launched the Mohammed bin Rashid Al Maktoum Solar Park, a long-term project set to raise solar energy production, working up to 1 GW by 2030. In Abu Dhabi, Masdar Power, a developer and operator of renewable power projects, launched the $700m, 100-MW Shams 1 project in mid-March 2013 to provide power for thousands of homes in the UAE. There are plans for a second 100-MW plant.
In Ras Al Khaimah, Swiss-UAE joint venture company CSEM is experimenting with the idea of solar islands – rotating structures off the emirate’s coast that are covered in solar panels, the heat from which creates steam in an underwater tank, which is then pumped to a turbine to produce or directly used for district cooling on shore. For now, the focus in RAK is directed at smaller solar projects that could potentially power a housing development or a remote village rather than large-scale energy generation.
The challenges in the West are somewhat different, with economic difficulties leading to a significant drop in subsidies, tax credits and preferential tariff rates for solar-generated power. In the current economic climate, the developed world simply cannot afford to support the industry like it once did. This raises a lot of questions about the future of the technology. Incentives are needed, it is often said, so the industry can achieve the critical mass to make it competitive with conventional power generation. Without government assistance, it will not get off the ground, the argument goes. The decline in official support also further clouds the future of MENA solar farms. While there is a lot of policy inertia, the grand project is going to require considerable state funds.
The growth of solar started relatively late in much of the developing world and has come in fits and starts, but it is very possible that activity will pick up and that the ambitious targets will be met. Just as countries are beginning to focus more on promoting renewables, the photovoltaic market has crashed as a result of manufacturing overcapacity in China. The price per watt for photovoltaic modules fell from about $2.75 in 2009 to $1.00 at the beginning of 2012, and recent spot price reports put average module prices at about $0.62 per watt. Prices are so cheap now that people are starting to talk about grid parity – the point at which a given alternative energy is as cheap as energy from conventional sources – especially where electricity costs are high.
There are uncertainties, however. The overcapacity may be temporary; the world’s largest solar panel maker, China-based Suntech, has been pushed to the brink of bankruptcy, while more than 20 solar manufacturers in the US and EU and 50 small Chinese manufacturers have folded. The glut may indeed pass, and a cost-reflective price for solar cells may again assert itself. Local factors may also stand in the way of rapid growth in the industry. Integrating solar into the grid is a complex matter that may not be fully appreciated by all the countries involved. It requires more than just buying panels and plugging them in.
A Bright Future
While the development of solar faces many challenges, one fact remains: the sun is and will be the best source of safe and sustainable energy for the foreseeable future. However, politics, corruption, technology, costs and perceptions may slow the expansion of the solar power industry, and not all the vast fields of panels and mirrors planned between now and 2020 will become a reality. Nevertheless, progress will occur and capacity will be built, especially as fossil fuels begin to dwindle and as more of the world goes from poorer to richer. Demand for electricity will rise, the price of conventional fuels will increase and the cost of panels will continue to drop, and in the not too distant future the whole question of whether solar is worth it will fade into the background. The arguments and doubts will appear less important once the numbers work.
In the meantime, development will likely be patchy but positive. Some areas will pursue the technology simply because they have enough sunshine already to make it worth their while. Others will spend money on solar as an extension of industrial policy, developing the industry as much for the exports it creates as the power it generates. Still others will make the commitment for environmental or geopolitical reasons, not the least of which is the desire for energy independence. Together, all the various efforts will add up to something significant, investable and material.