By Heba Hashem

It’s been nine months since Desertec Foundation withdrew from Desertec Industrial Initiative (Dii), a separation said to have no effect on either sides’ goals or strategies.

Now comprising more than 50 shareholders and partners, including CSP manufacturers and developers, Dii is still focused on its mission – to enable a market for desert power in Europe, the Middle East and North Africa (EUMENA).

How realistic?

The vision may seem overly ambitious, but looking at the latest developments in Morocco, where the region’s biggest CSP plant is being built and where two more have been announced, this grand plan indeed starts to look feasible.

Even before Morocco, Integrated Solar Combined-Cycle plants were built in Egypt and Algeria, followed by Shams 1 CSP plant in the UAE. In fact, the NREL’s Renewable Energy Data Book 2012 placed Algeria, Egypt and Morocco in the top six countries with installed CSP, alongside Spain, the United States and Australia.

One of the fundamental drivers of Dii’s movement is that demand as well as supply are complimentary between MENA and Europe. For instance, while load is higher in winter than in summer in Europe, the opposite is the case in the MENA, where most extreme weather conditions prevail during the summer.

The foremost goal, however, is to supply the MENA region, as Dii CEO Paul Van Son highlights.

“Our overall vision is that the MENA region can ultimately be supplied 100% with renewable energy. As market conditions and infrastructure develop, surplus renewables can also be delivered to remote countries in the integrated grid all over EUMENA.

“One may ultimately expect renewable power delivery to Europe as soon as the region is in a position to produce electricity at much lower costs than Europe”.

How much of Europe’s power needs can be met with this surplus energy will depend on supply, demand and infrastructure conditions in the coming decades.

However, economic modelling by renowned research institutes, such as Fraunhofer Institute, demonstrates that the best synergies may be achieved at a level of net export from MENA to EU by 2050 of about 20% of EU demand.

By importing up to 20% of its electricity from the MENA deserts, Europe could save as much as €33 billion annually in 2050, while the MENA region could benefit from an export industry worth up to €63 billion per year, according to Dii estimates.

Tight cooperation is the key

Dii’s partners are critical to the execution of its mission and thus, cover the entire renewable energy value chain. They include several government organizations in the MENA, such as the Moroccan Agency for Solar Agency, Algeria’s national utility Sonelgaz, and the Egyptian New and Renewable Energy Authority.

In Europe, Dii’s shareholders include Spain’s national grid operator RED Electrica, Italy’s Enel Green Power, and the UK’s E.ON.

“We support local governments and industries in the development and implementation of renewable energy strategies. Tight cooperation is the only effective way to make progress in this complex and challenging environment,” Van Son told CSP Today.

“We remain of course politically neutral”, he says, adding that Dii is not active in Western Sahara, Mali or Syria.

The expanding industrial network is equally important, as it brings its financial support and know-how into Dii’s mission. According to Karim Asali, Director of Reference Projects at Dii, the initiative’s partners are involved in seven CSP plants in the region totalling 438 MW.

Amongst them are ACWA Power, AGC Solar, Abengoa, Flabeg Schott, TSK Flagsol and German reinsurer Munich RE – one of the companies delivering insurance and risk management services to ACWA’s Noor 1 CSP plant.

Using CSP

In all of Dii’s studies and market strategies, the potential of CSP, alongside PV and wind energy, has been analysed, and CSP’s energy storage capability was highlighted as a prominent asset.

“CSP is one of the considered technologies for producing industrial heat and electricity, but also for desalination in MENA countries," notes Van Son, who currently chairs Energy4All Foundation, a non-profit organization promoting decentralized energy in Africa.

"We see first promising results like Shams-1 in the UAE. Three partners of Dii – Abengoa, Flabeg and Schott – played a decisive role in the realization of that project.”

Due to the high solar yield in the MENA, the region would be able to provide Europe with the power it needs during the summer, following the daily demand curve with the help of CSP storage.

But given the limited water availability in the region, for each individual CSP project, technical, financial, environmental and social aspects need to be carefully considered.

“In those areas where water is scarce, most likely air cooling will be applied as long as this would still allow a feasible business case. Coastal areas are not always favourable for CSP due to more salty air or cloudy conditions,” says Van Son.

Versatile components

When it comes to localization of power plant components, Dii’s strategic framework, Desert Power 2050, ranks component versatility for each renewable technology.

Because versatile components are part of multiple renewable energy power plant types, they tend to be simpler to produce, providing ample opportunities for their production and localization.

In CSP plants, such versatile components include electronics and control systems, cables, pipes and heat exchangers, mirrors, and solar collector assemblies, including mounting structures.

“To maximize the benefits of their economies, MENA countries should focus first on components with high versatility and low complexity. This will allow them to increase local value creation before moving to the more complex parts”, the study states.

On the other hand, receivers are anticipated to be localized in the mid-term, while turbines and CSP generators in the long term.

“A few CSP components are unlikely to be manufactured locally in the short and medium term. For example, due to the power block’s high level of complexity, related components will continue to be sourced internationally to some extent in the next 10-20 years unless the market becomes very attractive”.

Limiting factors

The sheer scale and magnitude of Dii’s strategy naturally presents a number of challenges. In terms of grid infrastructure, for example, in the MENA this is driven by demand increase, while in Europe it is mainly driven by renewable energy build-up.

As for the power sector structure, MENA countries have a predominantly single-buyer model while Europe’s sector is based on an open market. And while unsustainable fossil fuel subsidies can be found in the MENA, high yet decreasing renewable energy subsidies can be found in Europe.

“One main obstacle is the prominent existence of fossil subsidies in the area. According to the IEA, about half of the world’s annual subsidies for fossil fuel – of 400 billion EUR per year – are observed in MENA,” Van Son points out. He stresses that the lack of open and transparent market conditions is also a tough constraint as it may scare off investors and project developers.

Power exchange anticipated by 2030

If indeed the dream becomes a reality, and an integrated EUMENA power system gets established, the resulting benefits for both regions would be enormous.

“Our projections are that by 2030, significant amounts of electricity will be exchanged between North and South,” says Van Son.

To grasp the enormity of such a development; by that time the amount of electricity exchange between EU and MENA could equate to the amount that is exchanged today between Germany and its neighbouring countries – close to 100 TWh.

"We work towards the opening of all relevant regional markets in MENA and connection between them and to Europe. This will eventually lead multilateral power exchange and physical power transactions throughout EUMENA, similar to what we see in the European power market today.

"In addition we foresee a market of tradable green certificates, which will enable the sales of 'Desert Power' as a green product throughout EUMENA."

Could this signal the beginning of an end to the MENA’s reoccurring summer blackouts and Europe’s continued vulnerability to a natural gas crisis? Only time will tell.

To respond to this article, please write to the author Heba Hashem.