csp desertec Photo: paul-langrock.de Sun & Wind Energy 5/2010

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Clyde Beasley
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1 csp Between a vision and It s not Desertec yet: construction site of the CSP plant Andasol 2 in southern Spain and wind turbines. Although Spain is quite a good site, throughout huge areas of northern Africa climatic conditions for CSP plants and wind farms are even better. Photo: paul-langrock.de 124

pragmatism They were still being praised by the media last year, but meanwhile the large desert electricity projects seem to have lost momentum.

2 pragmatism They were still being praised by the media last year, but meanwhile the large desert electricity projects seem to have lost momentum. The two main initiatives, Desertec and the solar plan by the Union for the Mediterranean, are now facing their most daunting common task: they must win over the North African countries and draw up a workable framework for exporting solar electricity. 125

CSP The founding of the desert electricity consortium Desertec Industrial Initiative (DII) in the summer of 2009 triggered what is probably the biggest PR success ever in the history of renewable

3 CSP The founding of the desert electricity consortium Desertec Industrial Initiative (DII) in the summer of 2009 triggered what is probably the biggest PR success ever in the history of renewable energy. Solar electricity from the Sahara this subject was prominently discussed in the European media for several weeks. Until then the idea to supply large parts of Europe with solar power from the south had only really been discussed by scientists and sev eral visionaries. The media-effective entry by wellknown companies in the energy and financial sectors seemed to have finally brought it into the realm of possibility. Especially the participation of large electricity companies was seen by many observers as being a guarantee that the desert electricity project really had a chance of becoming a reality someday. High expectations then for the newly founded company, which officially started its work at the end of October How do things currently look for the initiative and what steps have so far been taken to implement the dream of desert electricity? After the media frenzy had settled down somewhat, it seemed to slowly dawn on those involved just what a mammoth project they had agreed to. The project can indeed be said to be extremely ambitious; because of its complexity and the high costs it has already been compared to the Apollo Program to the moon. DII Spokesperson Alexander Mohanty thus tries to dampen down advance expectations: Desertec is not even a project yet, merely an idea initially. The company currently has a planning horizon of three years. During this period it is primarily the non-technical conditions for the export of renewable electricity which are to be clarified, for example the legal framework which will be required for European energy suppliers to be able to be active in North African electricity markets at all. Additionally, contact to the North African decisionmakers and the industries based there must be set up and strengthened. This no longer sounds like the great development as announced last year more like a softly-softly step-by-step strategy. Mixed reactions in North Africa A cautious approach to this subject is probably the better way, though. Initial communication with the countries to the south on this matter did not exactly go splendidly, explains an insider, referring to the mixed reactions of North African countries towards the Desertec media coup last year. For example, in Algeria, where interference from outside the country is generally met with a snuffy response, the Energy Minister Chakib Khelil complained about the brash announcements by the western industrial initiative, who had neglected to bring the state decision-makers on board in advance. Tunisia and Morocco too, who officially greeted the solar initiative and are now also actively supporting it (see box texts on pages 128/129), privately expressed great surprise at the behaviour. There were indeed misunderstandings with several North African countries, admitted Boukhalfa Yaici from the Algerian industrial company and Desertec member Cevital. The consortium should have known that energy matters are always a very sensitive subject south of the Mediterranean, as the energy economy is almost always controlled by state authorities. It is now the task of Desertec Head Paul van Son and the newly appointed strategic advisor, former German Environment Minister and UNEP Executive Director, Klaus Töpfer, to communicate with these players in a new and more diplomatic manner. Friction within the Desertec consortium A further point is the inclusion of new industrial companies from the south. The industrial initiative, which is already being ridiculed as the Club of Germans, desperately needs to acquire an international image in order to remain credible. Desertec has thus now barred further German companies from joining instead, energy companies from the Mediterranean region are being more intensively enlisted. Recently, the Spanish grid operators REE and Enel Green Power, a subsidiary of the Italian energy supplier Enel, have joined the consortium. Also new on board are the French glass specialist Saint-Gobain, as well as Nareva, an industrial holding from Morocco. Expanding the Desertec circle with southern partners is definitely the right move, but it doesn t necessarily make the consortium s work easier. Desertec is already suffering from massive problems while trying to bring together the interests of all its members. Due to differing positions on aims and procedures, there have already been protracted discussions amongst the consortium partners at their meetings. Things could really move ahead a lot more swiftly, complains a representative of a Desertec member, who bemoans that some of the companies in the initiative are only interested in the project having a positive effect in the media, and are not really actively working on the project itself. Union for the Mediterranean: now almost unidentifiable Huge deserts: in Egypt alone there are 1 million m 2 that are suitable for CSP plants. Photo: Pitopia/Thomas Wolpensinger The second large solar electricity initiative, the solar plan of the Union for the Mediterranean, is also suffering from friction between its members. As opposed to Desertec, the solar plan isn t being sup 126

ported by private sector players, but by the Union for the Mediterranean, a partnership between EU states and countries bordering the southern Mediterranean.

levels. This can be an advantage when it comes to getting government bodies on board, such as North African and Near Eastern ministries, but is always a problem when there are political crises.

Still, at least at the working level, activities have been underway more strongly again for some time now, explains Ralf Christmann from the German Federal Environment Ministry, although he

Whether it will ever gather speed is called into question by a current study on the desert electricity plan by the German Institute for International and Security Affairs in Berlin.

each other at an international level. There is a distinct possibility that the Union for the Mediterranean, and thus also the solar plan, may get stuck in the sand.

The author of the study, Isabelle Werenfels, clearly emphasizes the advantages of a private economic initiative such as Desertec, as long as it selects the right partners from the North African

Werenfels says that these future partners are from the economic elite in the target countries, especially the ruling, powerful family busi nesses which are starting to be increasingly

4 ported by private sector players, but by the Union for the Mediterranean, a partnership between EU states and countries bordering the southern Mediterranean. Within the Union for the Mediterranean, founded two years ago with pomp and ceremony and instigated by the French President Nicolas Sarkozy, everything takes place at the highest diplomatic levels. This can be an advantage when it comes to getting government bodies on board, such as North African and Near Eastern ministries, but is always a problem when there are political crises. The Gaza war in January 2009 was such an occasion, when the Arabian countries stalled the Mediterranean process as a protest against Israel. This event has seriously affected the solar plan. Still, at least at the working level, activities have been underway more strongly again for some time now, explains Ralf Christmann from the German Federal Environment Ministry, although he admits that the solar plan is not yet moving at the pace one would like to see. Whether it will ever gather speed is called into question by a current study on the desert electricity plan by the German Institute for International and Security Affairs in Berlin. In the study the German think tank describes the solar plan of the Union for the Mediterranean as dysfunctional and as a perfect example of how bureaucratic institutions and players can hinder each other at an international level. There is a distinct possibility that the Union for the Mediterranean, and thus also the solar plan, may get stuck in the sand. Arabian oligarchs as a driving force? The author of the study, Isabelle Werenfels, clearly emphasizes the advantages of a private economic initiative such as Desertec, as long as it selects the right partners from the North African countries. Werenfels says that these future partners are from the economic elite in the target countries, especially the ruling, powerful family busi nesses which are starting to be increasingly interested in doing business with renewable energy. Examples of such companies are the above-mentioned Desertec member Cevital and the new member Nareva, which is owned by the Moroccan royal family. The billionstrong Egyptian Orascom Group, also a family business, is similarly touted as a potential Desertec member. The western companies need partners of this calibre, says Werenfels, for such companies think in the long term and have the necessary contacts to be able to wield influence locally if things get tough. But will a consortium of European industrial compa The former United Nations Environmental Programme (UNEP) Executive Director Klaus Töpfer is the new strategic advisor for Desertec. Photo: picture-alliance/dpa 127

5 CSP Desert electricity projects what are the North African countries doing? Morocco The kingdom is so far the only African country to have an electricity connection to the European continent, and this could potentially already be used for exporting wind power and solar electricity. A renewable energy act, which is due to be passed soon, also looks to be quite progressive. And at the end of last year Morocco surprisingly announced a billion-strong CSP investment programme covering 2,000 MW, which is to be installed by The solar electricity generated is to primarily meet local electricity demand. Unfortunately, similar announcements made by Morocco on solar projects in the past have often got stuck in the sand, such as a 500 MW photovoltaics programme announced in 2007, which was mothballed just a short time later. This time the chances of implementation are better, says Driss Zejli from the Moroccan research institute CNRST, as a large proportion of the approved funds come directly from the King s budget which in Morocco is evidently a guarantee for the success of such large projects. Algeria The first official reactions by the North African oil and natural gas giant to the Desertec announcements were reserved. They would only be willing to participate in the solar electricity projects if there was genuine technology transfer, said Energy Minister Chakib Khelil in a press release. Algeria has already been building a solar power plant in the south of the country since 2008 self-financed and with the participation of Algerian industrial companies. The largest country in North Africa in terms of land area is relatively positively minded towards renewable energy in other ways, too. A renewable energy act has already been in force since 2004, and an Algerian company is on board the Desertec project, namely Cevital. Algeria should thus be kept an eye on: if the current government moves away from its policy of watching from the wings, the financially strong country could soon become a powerful player in the field of solar electricity. Graphic: Eilers Media nies and a few oligarchs from North Africa be enough to decisively move forward the implementation of the desert electricity projects? Without a political vehicle as provided for example by the Union for the Mediterranean this remains hard to envisage. If solar electricity exports become reality someday, then a cross-border legal framework will have to be created so that markets can be set up for the transcontinental exchange of renewable electricity. Internationally valid tariff mechanisms will additionally have to be defined. A first step in this direction was already taken in the EU directive on renewable energy from the year 2009, according to which the EU states may import green electricity from non-eu states and count this towards their renewable energy targets. Countries such as Luxemburg and Belgium, which are very unlikely to be able to meet their quota targets on their own, have already shown an interest in desert electricity. Whether the instrument of EU directives will really work still remains to be seen, however. Most of those involved have meanwhile realised anyway that real movement towards the desert vi 128

6 Libya Libya is not only a tough area for foreign diplomats, but also for renewable energy. Blessed with oil and gas reserves, the country can afford to provide subsidised electricity at a price of 2 -ct/ kwh i.e. generally bad conditions for renewable electricity in Gaddafi s country. And the chances for solar electricity exportation projects don t look good either: Libya is not taking part in the solar plan by the Union for the Mediterranean and there is no sign of there soon being a Libyan partner for Desertec. According to Abdelkarim Mgeg from the State Authority of Privatization and Investment, there are several larger wind and solar power projects planned for the next few years, however, and financed from government coffers. In discussion are wind farms with a total of around 1,000 MW and a 300 MW solar power plant to be built near the southern Libyan city of Sebha. It remains to be seen to what extent these plans are implemented. Tunisia Tunisia is considered to be a supporter of desert electricity plans and last year set up its own Tunisian solar plan in the style of the solar plan by the Union for the Mediterranean, and even promotes it on a special internet site. Large parts of the programme are just a reformulation of existing targets, though, says Tunisian energy expert Rafik Missaoui. Tunisia has been pursuing an energy efficiency strategy since 2004, which forms the guideline for national energy policy. Thus, only two smallish CSP projects are new in the Tunisian solar plan. One of these, a plant with 75 MW of power, is at least planned to generate electricity for exports: to Italy. For some time now an Italian- Tunisian consortium has been planning a highvoltage DC transmission line to Sicily. Originally, however, the line was only intended to transmit cheap electricity from Tunisian gas-fired power plants to Sicily. Now, though, at least some of the power capacity is to be reserved for solar power. sions created on the drawing board can only be achieved by engaging in a drawn-out political process. Pragmatists amongst them are now advocating putting back the idea of physical electricity exports in order to make way for smaller projects which can be implemented almost right away. Such an approach is being taken by the World Bank, for example. Last year it announced a US$ 5.5 billion CSP support programme for five North African and Near Eastern countries. The programme covers a total of 12 projects with a total power of 900 MW, which are to be imple Egypt Egypt, which shares the presidency of the Union for the Mediterranean with France, is in the active circle of supporters of the Mediterranean solar plan. As opposed to Morocco and Tunisia, however, the country cannot offer direct electricity connections to Europe. According to Bouthayna Rashed from the Egyptian renewable energy authority NREA, there have been preliminary studies for a future undersea high-voltage cable to Crete and the Greek mainland. Egypt is planning a renewable energy share of 20 % by 2020 for its own electricity demand. A large part of this is already being covered by the large hydroelectric plants on the Nile, however, which currently generate 12 % of the country s energy demand. It looks as if Egypt is putting the priority on wind power for the remainder, and it has several excellent sites for this on the Red Sea. There are already 360 MW installed there, and by 2012, 1,000 MW should have been reached. Solar power appears to have a bad hand against the cheap wind power in the country, although a 20 MW solar parabolic trough array is currently under construction at Kuraymat, south of Cairo. So far, only a further 100 MW of CSP power plants are being planned in Egypt up to

CSP If one looks at this picture of the founding of Desertec Industrial Initiative back in summer 2009, it becomes clear why Desertec is ridiculed as the Club of Germans : Front row from left: Udo

7 CSP If one looks at this picture of the founding of Desertec Industrial Initiative back in summer 2009, it becomes clear why Desertec is ridiculed as the Club of Germans : Front row from left: Udo Ungeheuer (Schott), René Umlauft (Siemens), Torsten Jeworrek (Münchner Rück), Gerhard Knies (Desertec Foundation) Hervé Touati (E.ON Climate and Renewables). Back row from left: Frank-Detlef Drake (RWE), Wolfgang Knothe (MAN Solar Millennium), Caio Koch-Weser (Deutsche Bank), Jürgen H. Lange (HSH Nordbank), Jürgen Wild (M+W Group). Photo: dpa mented from 2012 onwards. Only one of the projects, in Tunisia, envisages a limited opportunity for exporting solar electricity to Europe all the other plants are to concentrate on helping to meet each country s own demand. Farewell to physical electricity exports? In fact, given the very rapidly growing electricity demand south of the Mediterranean, it is increasingly questionable whether the idea of electricity transportation is the only way to stimulate the expansion of renewable energy in these countries. Experts are already considering whether solar power plants and wind farms in North Africa can be financed without exports via high-voltage transmission lines. One possibility, for example, would be green certificates, which European countries could buy from North Africa and then put towards their renewables quota targets within the framework of the abovementioned EU directive although the electricity would not actually be imported to Europe via transmission lines at all. The gas-producing country Algeria has a similar proposal: instead of exporting solar electricity via costly high voltage lines, the country could deliver the equivalent energy volume to Europe in the form of natural gas (at a higher price) via existing pipelines. This green -labelled volume of natural gas would then enable conven tional gas-fired power plants in Europe to generate renewable electricity. Whether such proposals can actually be implemented remains to be seen. At least they show that beyond the Desertec paradigm of a transcontinental electricity network, there are many alternative ideas and approaches also worth looking at. Seen in this context, Desertec, as well as the solar plan by the Union for the Mediterranean, merely look like one piece of the puzzle in a much larger overall picture: namely an energypolitical reformation of the Euro-Mediterranean area on the basis of renewable energy. In the long run, pinning one s hopes just on (Euro-centric) diplomacy or industrial initiatives will certainly result in falling short of the mark. In the future the task will primarily be to expand the scope of partnership between Europe and its southern neighbours. Joint projects in the fields of research and university education, for example the intercultural master programme Renewable Energy and Energy Efficiency for the MENA Region of the universities of Cairo and Kassel are pointing in the right direction here (see interview with the advisory board members on page 44). In the medium term these could help to expand the currently very small field of players from the south and anchor the subject more strongly in society in North Africa and the Near East. After all, the large desert electricity projects will require home support and a great deal of stamina. Bernhard Brand 130

12 companies plan establishment of a Desertec Industrial Initiative

Press release Munich, 13 July 2009 12 companies plan establishment of a Desertec Industrial Initiative Munich 12 companies today signed a Memorandum of Understanding in Munich to establish a DESERTEC Industrial