Progressive Investor Sample Article
Green IPO Resurgence; Desertec Gains Traction; Sector, Geographic Rebalancing Act; Solar Stock Picks; Green Portfolio Update
Issue 88: February 2012
Remarkable Desertec Project Gains Traction
by Rona Fried, Ph.D., Contributing Editor
Over the past few months, we've seen dramatic progress in the Desertec Industrial Initiative project, the "impractical, pie-in-the-sky" concept which few thought would actually take shape. The far-reaching, visionary plan calls for turning much of the Sahara desert into solar fields. Besides providing local clean energy, it would supply a solid 15% of Europe's energy via transmission cables built under the Mediterranean Sea.
But it's actually coming to fruition! Desertec now has 56 partners in 15 countries and key projects, including the transmission infrastructure, are coming into place.
In November, Morocco got the go-ahead for a 500 megawatt (MW) concentrating solar power (CSP). CSP plants produce electric power by converting the sun's energy into high-temperature heat using various mirror configurations, unlike solar photovoltaic (PV) which transforms the sun's rays directly into electricity. The World Bank will provide $297 million in loans to help finance the first phase of construction.
The Ouarzazate CSP plant will be the first in Morocco's $9 billion solar program. Five other plants are planned between 2015 and 2020 for a total capacity of 2000 MW. The plants will, of course, mitigate the country's greenhouse gas emissions, while generating home grown energy for the first time. Morocco imports almost all its energy, mostly oil and coal.
In 2009, the World Bank's Clean Technology Fund approved a $750 million investment plan for CSP in the Middle East and North Africa region. It plans to raise an additional $4.85 billion for projects in Algeria, Egypt, Jordan, Morocco and Tunisia. The goal of the fund is to develop 900 MW of CSP in the region by 2020.
In late January, Algeria signed on to an unbelievable 22 gigawatts (GW) of renewable energy, to be installed by 2030. Algerian energy company Sonelgaz signed the agreement with Desertec. 10 GW of that energy will be exported to Europe.
And Tunisia just joined the Desertec project with an agreement to build 2 GW of CSP. The mammoth TuNur solar thermal plant, which will also have energy storage capacity to produce solar electricity at night, will be six times larger than any CSP plant built yet. It will supply energy to about 750,000 homes in Europe.
Mediterranean solar developer Nur Energie will build the plant. It will manufacture the 825,000 heliostats in Tunisia, creating about 20,000 jobs and spurring investment in solar skills development to maintain the plants long-term.
Nur Energie has already signed an agreement to deliver the energy to a grid operator in Italy via ultra-efficient direct current transmission cables, which only lose about 3% of the electricity they carry per 1,000 kilometers.
Desertec and STEG Energies Renouvelables (STEG ER) also signed a Memorandum of Understanding (MOU) to conduct pre-feasibility studies for large-scale solar and wind projects in Tunisia, including their integration into local grids and export of power to Europe.
The grid development project, Medgrid, plans to develop transmission cables under the Mediterranean Sea to export about 5 GW of energy to Europe as early as 2020.
CSP plants are notorious for water consumption, however, which is needed to keep the heliostats clean. That's especially true in the Saharan desert where blowing sand leaves layers of dust. Siemens is designing new solar panels that repel dust and resist sand build-up in a partnership with the Masdar Institute of Technology in Abu Dhabi.
Founding members of Desertec, which was formed in 2009, include: ABB, Abengoa Solar, Cevital, Deutsche Bank, EON, HSH Nordbank, Muenchener Rueca, M+W Zander, RWE, Schott Solar and Siemens.
Rona Fried, Ph.D. is CEO of SustainableBusiness.com, which published Progressive Investor for eight years before merging with The Green Investor in November 2010.