Tuesday, May 13, 2008

 

   By Natalie Obiko Pearson 

   Of DOW JONES NEWSWIRES 

 

ALGIERS, Algeria (Dow Jones)--An Algerian state-controlled power company is erecting a forest of billboard-sized mirrors in the middle of the desert in the country's first large-scale attempt to harvest solar energy from the Sahara and potentially transmit it to consumers thousands of miles away in Europe.

Algeria wants to lay high voltage power lines to connect its electricity grid directly to Spain and Italy: a critical step to sending electricity across vast distances to new markets. Doing so would position the North African country - already a key natural gas supplier in Europe - to snap up an even larger share of the European energy market, which is moving to boost the role of renewable sources in its energy mix.

"There's no question we want to do it: we have the space for it, we have the (solar) radiation," Algeria's Oil Minister Chakib Khelil said in a recent interview in the Algerian capital.

So far the Algerian government is having trouble winning commitments to sell its solar-powered electricity to European utilities at a premium to cover costs because governments are reluctant to pay more to Algieria suppliers when they are paying subsidies to promote their own renewable energy industries.

But the European Commission aims for a 20% increase in energy from renewable sources by 2020 as part of a climate and energy package seeking approval from the European Parliament and member states. And experts like Luis Crespo, secretary-general of Protermo Solar, a solar energy industry group in Spain, say that the European Union will have to import renewable power to reach those goals.

Crespo says the continent will have to look elsewhere if it's to meet those proposed targets because installing sprawling solar and wind farms in Europe on the scale necessary would be hampered by a lack of appropriate space.

"We're talking about all of Europe getting 20% of its primary energy from renewable sources in 2020 - for that, it's certain that Europe will have to count on the importation of clean energy from Africa," Crespo says.

The technology to generate that proportion of renewable solar energy is already at work in Algeria and elsewhere.

Morocco, Egypt and Algeria are all building hybrid solar-gas plants based on technologies introduced 20 years ago in the U.S. demonstrating that solar energy could be concentrated on an industrial scale via large fields of mirrors to power utilities. Progress in the field, however, came to a virtual halt as an era of cheap oil eroded the incentive to develop alternative energy sources.

The hybrid plants will still depend largely on natural gas: the solar portion serves to increase efficiency by boosting output with fewer emissions during daylight hours. Solar will account for the largest share of overall output in the Algerian plant providing up to 34 megawatts or nearly a quarter of the 150-megawatt plant's production during peak sunlight hours.

"It's a beginning. The entrance of solar into such a (technologically) conservative environment - it's a first step," says Franz Trieb from Germany's Institute of Technical Thermodynamics, who has done feasibility studies of producing solar power for export to Europe from North Africa and the Middle East, as well as for large desalination projects in the region.

Algeria's $315 million project - 66% owned by Spain's Abengoa and 34% by an Algerian government-controlled consortium, NEAL - will see giant rows of mirrors stretching across an area the size of 33 football fields. The parabolic mirrors concentrate the sun's rays on fluid-filled tubes - much the way a magnifying glass can be used to burn paper - which then produces steam to power conventional turbines.

Solar will only account for 5% of total yearly output at the 150 megawatt plant, which comes on line in 2010, though that is enough to qualify it as a "renewable" source by current industry standards, the developers say. They also say the project's purpose is to lay the groundwork for a far more advanced solar power industry in the future.

"We're looking at this as a pilot project to start getting involved in solar but eventually we aim to become among the leaders. We don't want to miss the train," says Badis Derradji, executive director of NEAL, who points out that Algeria has been an energy pioneer before when it launched the world's first liquid natural gas shipments.

Algeria aims to source 10% of its energy needs from renewables by 2030. Derradji says that will mean more advanced projects ahead that will be 100% solar-run and capable of storing energy in order to supply power around-the-clock even during the night, just like projects underway in Spain and the United States at the forefront of large-scale solar power generation.

"The answer is completely unqualified - it's possible to export solar electricity to Europe. The technology is already in use," says Crespo.

Algeria and its fellow members of the Organization of Petroleum Exporting Countries have often complained about the threat posed by alternative energies to oil producers and their future revenues.

The developments come, however, as OPEC members - many of whom have vast, largely unpopulated desert spaces that are home to some of the sunniest spots on Earth - appear to be taking notice of solar's potential.

Finding alternative energies to meet soaring domestic energy consumption at home could prove crucial to OPEC members' ability to maintain oil and gas for exports in the future: OPEC figures show that domestic fuel consumption within the group has been doubling at more than twice the rate of exports since 2000.

Saudi Arabia, the world's largest oil exporter, is plowing millions of dollars into research to determine how solar energy should be harnessed as it seeks to meet growing power demand and to limit carbon emissions.

Algeria estimates that its solar potential could reach a whopping 169,000 terawatt hours a year, or 48 times Europe's total forecasted electricity demand in 2020 of 3,500 terawatt hours a year.

Shokri Ghanem, the head of Libya's oil policy, goes so far as to say: "We have an abundant supply of sun I think one day we will be exporting solar energy instead of oil. We would love to, but right now, it's the economics."

Countries like Germany and Spain have implemented feed-in tariffs - a system of long-term financial incentives requiring utilities to buy electricity from renewable sources at a premium in order to promote the adoption of renewable energies.

Algeria sees an opportunity there, but Khelil says that so far European countries have said they are unwilling to pay the premium for solar energy from Algeria that they would pay to providers in their own countries.

"That's the problem. I said, 'Would you give me the 30% (premium) you give to renewable energy? They said no, it's only applicable to Europeans," Khelil said.

That has slowed down plans to directly link up Algeria with Europe's electricity grid: 2000 megawatt power cables were supposed to be laid simultaneously along with two new natural gas pipelines connecting Algeria to Spain and Sardinia. Construction began last month on the Algeria-Spain pipeline, but so far no power cables are being placed.

Khelil says Algeria is ready to revisit its plans, including joint ventures with European companies for solar energy exports, as soon as European governments offer the right conditions.

Industry experts say the cables will get installed regardless of whether they carry renewable or non-renewable energy because they simply make sense.

High-voltage cables interconnect and stabilize electricity grids and also allow electricity to be sent more efficiently across long distances by minimizing the amount lost in transmission, which occurs along older lines. Such cables already exist in Europe, Africa and elsewhere.

Trieb says oil-producing country or not, pursuing solar energy is a no-brainer for countries in North Africa and the Middle East because solar energy costs are estimated to fall to the equivalent of $25 a barrel or less by 2020.

"Oil will never come back to that level," he says. The biggest hurdle solar faces is that "people think it's too good to be true."

-By Natalie Obiko Pearson, Dow Jones Newswires; +44 (0)20 7842 9450; natalie.pearson@dowjones.com

(END) Dow Jones Newswires

13-05-08 1315GMT