DESERT SUN TURNS EUROPE ON

Desertec to develop investment plans by 2012: DII
Christoph Steitz and Jens Hack (w/Rupert Winchester and Jon Loades-Carter), July 13, 2009 (Reuters)
and
Desert Sun: Europe’s Huge Solar Ambitions in the Sahara
Keith Johnson, July 13, 2009 (Wall Street Journal)
and
Siemens, Munich Re Plan ‘Visionary’ Sahara Project
Jeremy van Loon, July 13, 2009 (Bloombwerg News)

SUMMARY
A Memorandum of Understanding (MOU) to establish the Desertec Industrial Initiative (DII), a breathtakingly ambitious undertaking to build New Energy in Europe (EU), the Middle East and North Africa (MENA) and link it via a massive high voltage transmission system from the North and Baltic Seas to the Mahgreb and the Levant, has been completed.

The MOU involves a consortium of 9 German companies and 3 non-German companies, including some of the wealthiest and most influential financial institutions in the EU. It calls fro the mapping of investment plans by 2012 for a project that could supply 15% or more of EU power by 2050.

Participating companies: Siemens AG, Munich Re, E.ON AG, RWE, Deutsche Bank AG, HSH Nordbank, MAN Solar Millennium, M+W Zander and Schott Solar (German); Spain’s Abengoa SA. Algeria's Cevital, and ABB of Zurich.

MOU signatories, smilling, thinking about the money this project will earn and the good it will do. (click to enlarge)

Munich Re board member Torsten Jeworrek is the executive driving the new initiative. His explanation is that Munich Re, as a multinational insurance institution, stands to suffer huge losses if the worst impacts of global climate change become a reality. It is a far smarter undertaking for Munich Re and companies like it to invest a few hundred billion euros now than to ignore the impending disasters and wind up on the hook for hundreds of trillions to their insurees in a few decades

One of the principles of the MOU is the eventual expansion of the project to an “open and international” group of participants.

The objectives enumerated in the MOU included, first and foremost, the many business opportunities that come from New Energy and new transmission including jobs, revenues and energy sales. Beyond the business opportunities, the consortium is looking to promote economic, environmental and social objectives including (1) energy security in EU/MENA countries, (2) private investment for MENA generating local growth and development, (3) safeguarding the MENA water supply by decreasing energies that use excessive water and doing seawater desalination with abundant New Energies, (4) supplying GhG-free energy as a contribution to EU, MENA and German climate change goals.

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The MOU calls for the drafting of a financial plan over the next 3 years that will generate more return than the project’s estimated ~$555 billion cost and create millions of jobs both in the EU and the MENA regions.

The formal announcement of the completion of the MOU set forth objectives and principles but contained few concrete facts beyond those established in previous papers from the Desertec Foundation, a worldwide network of governmental and non-governmental agencies, private enterprises and think-tanks that emerged around the original proposal.

The Desertec Concept Redpaper describes the idea that has been around since it was proposed in 2003 by the Trans-Mediterranean Renewable Energy Cooperation (TREC), a network of scientists and politicians, at the legendary and influential Club of Rome. The Club of Rome and the German Economy Ministry will be involved in the Munich Re initiative.

According to Jeworrek, the earliest projects will include a 2-gigawatt solar power plant in Tunisia and a high voltage direct current (HVDC) transmission connection to Italy. After it gets regulatory approval, it will likely take 5 years.

From CNN via YouTube

COMMENTARY
Spread across an enormous region from Turkey to Gibraltar, DII would be the biggest New Energy undertaking anywhere, ever.

Is it plausible? Yes. A European Commission Institute for Energy calculation found 0.3% of the sunlight falling on the MENA nations could power all of Europe.

DII requires no new technologies, just a massive investment commitment to solar power plant development in the Mahgreb (the coastal Mediterranean deserts of Northern Africa and the Sahara) and the arid sun-drenched circum-Suez lands of the MENA, north and east to the Caucasus. In those regions, the insolation (solar radiation per square meter) is so good it would take a serious effort to make solar power plants fail.

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Solar power plants use the heat of the sun instead of its light. The 2 primary competing design concepts, one using curved mirrors and one using flat mirrors, are already going into operation in deserts the world over.

The curved mirror technology was proven productive in California’s Mojave Desert in the 1980s but could not get traction in the 1990s because natural gas fell to prices so low it was impossible for utility-scale solar plants to compete economically. In the curved mirror solar power system, a working liquid flows through pipes that run in the focal point of a field of parabolic mirrors. Heated to 700 degrees Fahrenheit or more, the liquid flows to a boiler where the heat creates steam that drives a turbine.

A solar power tower and a field of flat mirrors that focus the sun’s heat on a point atop the central tower is the second primary solar power plant technology. The mirrors again heat a working liquid in pipes, this time at the top of the tower, and the heated liquid again flows to a boiler to create steam to drive a generator.

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The DII plan is not far enough along to have specified a chosen technology.

DII will also require a massive investment commitment to high voltage direct current transmission (HVDC). Older, alternating current (AC) transmission has traditionally been considered too inefficient to carry such massive amounts of electricity but newer 765 kV (and higher) HVDC lines are considered up to the task. Plans exist for expansion of sub-Mediterranean natural gas and oil pipelines and tranmission planners have already begun anticipating the laying of conduit for electric lines alongside them.

Concentrating Solar Power for the Mediterranean Region
and Trans-Mediterranean Interconnection for Concentrating Solar Power are definitive studies on the concept from the German Aerospace Center and affiliated research institutions. They pretty thoroughly documented the feasibility of the undertaking.

Hans Müller-Steinhagen, who works at the German Aerospace Center and knows the research, affirms the reports’ conclusions that the project could be sending electricity to Europe before 2025 and be supplying 20% or more of Europe’s power by mid-century.

Solar energy pioneer Hermann Scheer, a German parliamentary member and President of Eurosolar, the European Association for Renewable Energy, opposes and dismisses the plan. Harkening back to the vision of solar energy on every rooftop and the dream of distributed generation, he objects to the highly centralized, corporate control of the electricity that would come from DII. He also foresees all the problems that come with ambitious, multinational concepts such as cost overruns, logistical delays, missed deadlines and international disputes. In addition, Scheer says DII faces challenges from the harsh desert elements, like sandstorms.

If Dr. Scheer is the most prominent and important opponent of the massive, centralized power generation plan, he is hardly the only one. Many, like Scheer, are dubious of the size and scope of the undertaking. Others believe the cost will be too great.

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Keith Johnson, first string energy blogger at the Wall Street Journal (WSJ), is justifiably skeptical. In describing his impression of the MOU, he used a line written by comic filmmaker Woody Allen, calling it “…a promise to try to turn a notion into an idea.”

On the other hand, Bloomberg News headlined the plan outlined by the MOU as “visionary.”

Johnson is right that obtaining financing from European governments to further the project will not be easy as long as the impacts of the financial crisis keep Europe’s economy in the doldrums and compromise EU efforts to build a New Energy economy and turn greenhouse gas emissions (GhGs) around.

Initial funding for the project, 1 billion euros ($1.4 billion), is nevertheless expected to come from the European Union. Further funding remains uncertain. Proponents contend the project will eventually sell itself, when those involved see it could end up costing less than 1,000 euros per European citizen and transform the economies of 3 continents.

On the other hand, settling the diplomatic and legal matters between MENA and EU governments may be a more ambitious undertaking than finding financing and building the project.

Participants in the MOU are aware of the benefits, risks and challenges. They acknowledge the long-term scope of the undertaking.

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WSJ's Johnson points out that the corporate participants, builders of New Energy installations and transmission systems, have much to gain. Skepticism is not justified solely by the discovery of self-interest in the project. The DII MOU stressed business opportunities ahead of all other project benefits. Practical minded people contend a good solution always works like that. Does that make it greenwashing? If it is, it’s the most ambitious greenwashing ever conceived.

European environmentalists, usually the first to scream about greenwashing, are enthusiastic. Size and scope are not untenable given that Europe must get that much electricity from somewhere. The cost will be burdensome but expenses must be borne if a shift to New Energy is to be accomplished and – given the urgency created by global climate change – there must be such a shift.

Munich Re’s Jeworrek says the project will be paying for itself before it is 2 decades along.

A curious objection to DII heard in the semi-private circles of cyberspace has to do with what sound much like fears and prejudices lingering from stereotypes of North African and Middle Eastern peoples created during the 1970s oil crises and severely exacerbated by the heinous actions of the breakaway violent Muslim extremists of the last 2 decades.

Would building such a system make Europe vulnerable to cuts in electricity that mimick the oil embargoes of the 70s? Would it make Europe more subject to terrorist attacks that will leave its population in the dark?

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First, a history lesson: Those oil embargoes, incomplete and short-circuited as they were, almost ruined OPEC and OPEC knows it. Such disruptions are extremely unlikely to recur. The most power OPEC now has is some price leverage. Though some Middle Eastern zealots mistakenly thought otherwise, price leverage and not geopolitical gamesmanship was and is the only reason there is an OPEC.

Europe has more to worry about in the way of an energy supply curtailment from its excessive dependence on Russian natural gas. It has already experienced natural gas supply disruptions at least as problematic as the 70s oil supply disruptions.

DII is a hedge agains the power of the Russian Bear. And Russian natural gas is a hedge against the power of (and terrorist threats to) DII.

And DII is far more than a building up of dependence on MENA solar energy. It is an addition of solar energy to the European SuperGrid that will link the EU’s gargantuan wind assets, its significant ocean energy and geothermal assets, its biomass capacity and its access to MENA sun together in a huge trans-continental web of New Energy abundance.

Should one source of supply be interrupted, it will merely necessitate a shift to other sources via the heightened capacity of an intelligent SuperGrid to manage and manipulate generation while the interrupted supply source is restored.

Footnote: The first report to the Club of Rome, in 1972, was the controversial The Limits to Growth, one of the earliest modern predictions that global demographics and global resources were unevenly matched.

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QUOTES
- Torsten Jeworrek, board member, Munich Re and a driving force behind the formation of the consortium: “We are pursuing a visionary plan…If it is successful, we will make a major contribution to combating climate change…After three years we want to present a detailed investment plan which is feasible…I have heard many times over the past days that there are concerns about political issues in connection with Desertec in Northern Africa, but we have a lot of geographical leeway regarding the location of the project…"
- Herve Touati, managing director, E.ON climate and renewables unit: “[E.ON] is convinced that the future belongs to solar technology in the long term…”
- Fritz Vahrenholt, Innogy renewable-power unit head, RWE: “It’s a fantasy to think that we’ll be shipping electricity from the Sahara to Germany…We need details…”
Gerhard Knies spokesman, the Desertec Foundation: “Saving the world is the future’s biggest ethical challange, and at the same time it will be the biggest business opportunity…”

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- From the MOU, quoted by the Wall Street Journal: “Among the [Desertec Industrial Initiative’s] main goals are the drafting of concrete business plans and associated financing concepts, and the initiating of industrial preparations for building a large number of networked solar thermal power plants distributed throughout the MENA region […] All of the DII’s activities will be aimed at developing viable investment plans within three years of its establishment.”
- Unnamed equities analyst: "So far, this is nothing more than political lobbying in my view…In the short- to mid-term, this will have no impact on the photovoltaic sector…But in the long-term, this could be a major breakthrough for the industry. Solar thermal plants have the necessary size for bigger utilities to join so it sounds plausible…"