MENA solar energy offers international trade and job opportunities for the region

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09 August 2010
A joint study by A.T. KearneyA.T. Kearney and the European Solar Thermal Electricity Association, ESTELA, finds that solar energy cooperation between MENA and EU offers a green energy option reducing electricity costs with 25 percent.- Solar thermal electricity (STE) is now entering the commercial ramp-up phase and will soon be viable as a cost-competitive renewable energy source with a relevant positioning in the utilities portfolio. The joint A. T. Kearney and ESTELA study indicates that within the next 10 years STE will be able to run with a profitable business model - challenging conventional and other renewable energy sources without any subsidies.

By 2015, when most of the STE ramp-up phase improvements currently underway are expected to be implemented in new plants, energy production can be expected to be boosted by more than 10 percent and plant CAPEX reduced by 20 percent. Furthermore, economies of scale resulting from increases in plant size will additionally contribute to reducing plant CAPEX per produced energy unit. The cost competitiveness of STE is expected to lead to a boom in STE on a global basis and represents a unique opportunity for the Middle East.

Louis Besland, partner of A.T. KearneyA.T. Kearney Middle East explained, "The potential is tremendous. High solar radiation in the MENA region contributes significantly to the cost advantage of STE. Given the increased electricity needs of the Middle East region, STE can definitely play a key role in the future energy mix and offers a unique opportunity for regional governments and utility companies."

Unlike Photovoltaic energy, which directly converts captured solar radiation intro electricity, STE technology is based on the principle that concentration of solar radiation - by using mirrors in a receiver developed for that purpose - enables heating of fluids at high temperature, around 350-550 degrees with current technologies. The thermal energy can then be used to generate electricity through a proper cycle process and electrical generator system. STE stores heat, produced whilst the sun is shining to produce electricity when it is really needed enabling more efficient dispatch of electricity production, currently only available by conventional sources of electricity.

Despite entering a commercial ramp-up phase, STE technology is still in a development stage, displaying high potential for technical improvements. These improvements will allow increased power efficiency, reducing solar field costs and reducing internal resources.

"The global STE industry's innovation efforts from the past decades are now yielding fruit. What we see today is a proven and ever more attractive industry that is right on track to soon, seriously challenge conventional and other renewable energy sources. Being one of the best suited regions globally for STE, MENA has yet to realize the full potential of this new technology, representing only 6 per cent of global planned STE capacity," commented Christian von Tschirschky, principal with A.T. KearneyA.T. Kearney Middle East

Figure: Global existing and planned STE capacity through 2015

In countries where STE is deployed it is an important contributor to domestic economic development and provides a green energy source for electricity demands as well as creation of jobs. On average, project development, engineering, technology and construction of a 100 MW STE plant creates around 600 direct man/year full-time jobs. If the targeted installed STE capacity of 100 gigawats by 2025 is reached it involves the potential creation of 100,000 to 130,000 new jobs globally.

"Solar thermal electricity is at the top of utilities', governments' and decision-makers' agendas on a global basis and the MENA region is no different. In a best case scenario and with the proper support, the MENA region could become the leading solar energy provider globally," noted Mr. von Tschirschky.

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About A.T. Kearney
A.T. KearneyA.T. Kearney (www.atkearney.com) is a global management consulting firm that uses strategic insight, tailored solutions and a collaborative working style to help clients achieve sustainable results. Since 1926, we have been trusted advisors on CEO-agenda issues to the world's leading corporations across all major industries. A.T. KearneyA.T. Kearney's offices are located in major business centers in 37 countries. From our fast growing Middle East offices in Abu Dhabi, Bahrain, Dubai and Riyadh, A.T. KearneyA.T. Kearney actively contributes to the operational excellence and profitable growth of the private sector industries and services in the region as well as the agility of governments. For more information, visit www.atkearney.ae.

About ESTELA
The European Solar Thermal Electricity Association was created in 2007. Today it represents the main actors in the sector with 60 members, among them the Spanish association Protermosolar and its 100 members. ESTELA promotes innovative technologies and industry in the field of STE, supports its members' efforts in disseminating and raising awareness of STE advantages and benefits, and cooperates with EU, national and regional authorities in paving the way to a sustainable energy future. ESTELA has contributed with its proposals for the Mediterranean Solar Plan and the European Solar Industry Initiative. The political implications of STE development further highlight the relevance of this technology for energy policy. STE can significantly contribute to the security of energy supply and to the achievement of energy and environmental targets such as the European Union 20-20-20 goal (20 percent lower CO2 emissions and 20 percent renewable energies in the energy mix by 2020).

For more information please contact:
Sonja Ohly
Momentum Creative Communications
Tel: +971 50 6506480
Email: sonja@momentum.cc

© Press Release 2010