Capturing billions of dollars in investments, renewable energy is poised to dominate the future of the global energy market
The depletion of fossil fuels coupled with an increased environmental concern regarding global warming and sustainable development, has raised awareness among governments, policy makers and people for the need to develop alternative types of energy.
Investments in renewable energy have been steadily rising since 2005 according to the 2011 REN21 Renewables Global Status Report (GSR): "Changes in renewable energy markets, investments, industries and policies have been so rapid in recent years that perceptions of the status of renewable energy can lag years behind the reality."
The GSR is an annual publication issued by REN21 -- an organization promoting policies to accelerate the global transition to renewable energy. REN21 works to encourage and document progress with regards to countries' commitments to renewable energy.
According to the report, global investments in renewable energy reached $211 billion (LE 1.27 trillion) in 2011, up 32% on $160 billion (LE 966.4 billion) invested in 2009, and that is not including an estimated $15 billion (LE 90.6 billion) invested in solar hot water collectors.
Out of an estimated 194 gigawatts (GW) of new electric capacity installed worldwide in 2010, renewable energy accounted for 50% of that figure and supplied almost 20% of the global electricity supply. During the period from 2005 to 2010 global capacity of different types of renewable energy grew with rates of 15-50% with wind power grabbing the lion's share followed by hydropower and photovoltaics.
The report says that, "Several countries met higher shares of their electricity demand with wind power in 2010, including Denmark -- 22%; Portugal -- 21%; Spain -- 15.4% and Ireland -- 10.1%."
In 2010, the US' energy production from renewable energy grew by 5.6% to account for 10.9% of total energy production. Meanwhile China added 29 GW of grid-connected renewable energy recording a 12% increase compared to 2009.
By 2011 there were a total of 119 countries that have set policy targets for renewable energy capacity up from 55 countries in 2005. Developing countries account for more than half of all countries with renewable policy targets with over 20 countries in the Middle East and North Africa (MENA) and sub-Saharan Africa.
RENEWABLE ENERGY IN EGYPT
Spearheading the development of renewable energy in Egypt is the New and Renewable Energy Authority (NREA) which is a department of the Ministry of Electricity and Energy. In February 2008 the country's Supreme Council of Energy (SCE) approved a national strategy to supply 20% of Egypt's energy needs from renewable sources by the year 2020.
In 2008, total electricity production from renewable energy accounted for 12% of total supply with over 87% coming from hydropower (2.8 GW) and the remainder from wind power (425 MW). In 2010, total installed wind capacity reached 550 MW bringing the total of installed renewable energy capacities to 3.35 GW.
In order to achieve its target, the government needs to install additional renewable energy capacities of 7.65 GW to reach a total of 11 GW or 20% of total energy production by the year 2020. According to the NREA, the targeted renewable energy mix is to generate 12% from wind energy and 8% from solar, hydro and other renewable sources; meaning that an additional 6.65 GW of wind capacities bringing the total to 7.2 GW, as well as one MW of solar and other renewable sources.
Total investment is estimated to reach $16 billion (LE 96.64 billion) with one-third expected to be made by the NREA and two-thirds by the private sector as per the authority's stated projections. In 2009 the SCE approved a set of policies that aim to encourage private sector investment in renewable energies.
The policies are to be applied in two phases with the first being the introduction of a competitive bids approach through issuing renewable energy supply tenders. The government is to guarantee reduced financial risk through long-term Power Purchase Agreements for periods ranging from 20 to 25 years; as well as applying a feed-in tariff approach for renewable energy producers to increase their competitiveness.
According to the NREA's annual report, as of 2011 there were six planned wind energy projects with a total capacity of 3.19 GW out of which 1.82 GW are to be implemented by the NREA and expected to be operational by 2014.
THE KURAYMAT SOLAR ISLAND
In mid 2011 the country began generating electricity from its first concentrated solar power (CSP) facility with a total capacity of 20 MW. Located around 100 kilometers south of Cairo in Kuraymat, the facility is a hybrid of CSP/combined cycle power plant. The power plant's total capacity is 140 MW and is the first of its kind in the MENA region.
"We are a combined cycle power plant with an 80 MW gas powered turbine and a 70 MW steam powered turbine," says Mohamed El Geneidy, operations general manager of the facility. "This combined cycle facility has a solar component that works to increase the yield of the steam turbine."
A typical combined cycle power plant works by first firing up a mixture of natural gas and air in combustion chambers which produces 600 degrees Celsius fumes that are used to power the gas turbine. The heat from the fumes is then used to heat water in a boiler to produce steam which then powers a steam turbine.
"The way the solar component works is by using the sun's energy to heat a type of fluid called Thermanol which then goes to a heat exchanger with water in it to produce steam. The steam produced from the solar component is then added to the steam produced from the combined cycle to increase the MW yield of the steam turbine," explains El Geneidy.
The project was undertaken by a combination of local and international contractors, namely the Spanish contractor Iberdrola, who was responsible for the combined cycle section of the plant. Orascom Construction Industries (OCI) and the German-based Flagsol constructed the solar component of the plant.
Total investment cost stood at $340 million (LE 2.05 billion) in which the NREA financed $100 million (LE 604.12 million) and the remaining $240 million (LE 1.45 billion) was sourced from international financial institutions. The Japanese International Cooperation Agency extended a $190 million (LE 1.15 billion) soft loan in addition to a $50 million (LE 302 million) grant from the Global Environment Facility of the World Bank.
"The power block which houses the combine cycle has been handed fully to the NREA and is currently in the warranty period. The solar component on the other hand is under a two-year Build, Operate, Transfer agreement with OCI and Flagsol," says El Geneidy.
The aim of the project is to contribute to the transfer of the know-how to the NREA in order to undertake larger CSP projects in the future; one of which is a planned 100 MW facility in Kom Ombo, Aswan.
"The technology used here is all foreign and was procured from the German Flagsol. It's a parabolic trough of high-quality mirrors that works to focus the sun's radiation onto a special pipe that has the Thermanol in it," he says.
"The pipe that houses the Thermanol is a stainless steel pipe that is encased in another glass pipe. The space between the two pipes is sucked out of air to create a vacuum which ensures that the heat doesn't escape," El Geneidy says.
The solar island is divided into a number of zones with rows of parabolic trough mirrors. The rows form loops of mirrors which are all connected to a hydraulic piston that rotates them with the rotation of the sun; the idea is to keep the pipes in the mirrors' focus throughout the day.
"Before the heated fluid can be used to produce steam it must reach a temperature of 393 degrees Celsius. The fluid is first circulated in the loops until it reaches the desired temperature before it goes to the heat exchanger," El Geneidy explains.
"There are heat, motion and radiation sensors that are all hooked up to a control room to constantly monitor the system. The engineer only sets the desired temperature and then the computer decides which loops to operate. The loop that reaches the 393 degrees Celsius mark is defocused from the sun to maintain the temperature."
Typically, the system is only functional during the day and when the sky is clear. Clouds or fog will decrease the amount of radiation reaching the mirrors causing their efficiency to drop significantly. "Whenever a cloud covers the sun you can see the thermal MW produced drop right away," El Geneidy says.
Other CSP plants have the ability to function 24 hours a day by storing the produced heat to be used at night.
"At the planned Kom Ombo facility in Aswan, a portion of the heated fluid will be used to dissolve a certain type of salt mixture that stores heat. At night the heat from the salt mixture can be used to continue boiling the water and produce the required steam. This project will be a stand-alone CSP that generates 100 MW," says El Geneidy.
He explains that currently the major barrier for this technology's expansion in the energy market is its cost. Conventional steam and gas powered power plants have a cost per KW of approximately LE 0.10 whereas the CSP cost per KW could reach up to LE 0.45.
A JUST DESERTEC
The Desertec Foundation was established on January 20, 2009 by a group of politicians, scientists and economist with the main purpose of promoting the Desertec concept. The concept was developed a few years earlier in 2005 when the German government in cooperation with other Mediterranean and North African countries commissioned the MED-CSP study to project the future energy needs of the region in the year 2050.
"This study reached some parameters the first of which is that the population of the Middle East and North Africa MENA region is expected to increase by 300 million to reach 700 million by 2050," says Mohamed El Hamamsy, a business consultant for the Desertec Foundation in Egypt.
"These people will need to be fed and economic development to be accelerated so that they can lead humane lives; consequently the energy required to achieve this will triple to reach 4,000 terawatt hours (TWh) per year, which is the second parameter of the study," he says.
The third parameter is the available water resources. Currently the MENA region consumes some 300 billion cubic meters (bcm) of water per year; this is projected to reach 500 bcm per year by 2050. The sustainable amount that can be sourced from underground aquifers is in the vicinity of 250 bcm, while the Nile provides 170 bcm. "In order to fulfill our water needs in the MENA region by 2050 we are going to need the equivalent of two additional Niles," Hamamsy says.
The fourth and final parameter was the environment and climate change. Cooperating countries must find ways to address these challenges while aiming to reduce carbon emissions by 30% by 2050.
THE CONCEPT
The Desertec concept is built on the fact that the MENA region is going to face problems in the future and must start working on a comprehensive approach to solve these problems today. Clean energy sources need to be developed in order to support the anticipated population growth and provide a decent standard of living.
"What Desertec advocates is that there is no one source of energy that will solve all of our problems. Instead there must be a combination of different types of energy sources like wind, bio-fuels, geothermal and solar as each one has its characteristics that are suitable for certain locations and at certain times," says Hamamsy.
He explains that we must look to these sources of energy to meet the projected demand of 4,000 TWh per year. Each source such as biofuels, geothermal and wind energy has a potential to generate anywhere between 400 to 450 TWh per year. Energy coming from the sun, which can be harvested in two different ways, has a huge potential.
"Photovoltaic and Concentrated Solar Power CSP are the methods by which you can harvest the energy from the sun. The former has a potential to generate 200 TWh while the latter can generate up to 630,000 TWh; remember that we only need 4,000 TWh," says Hamamsy.
"The amount of solar energy that falls on the Sun Belt from Morocco to Iran in every square meter is equivalent to one barrel of oil per year. The sun falling on Egypt's one million square kilometers translates to an enormous amount of oil barrels," he continues.
CSP concentrates the sun's heat onto pipes containing fluid. This fluid then heats up water which produces steam to power a turbine which produces electricity. The steam is then cooled to recycle the water by passing through salt containers. These salts absorb the heat and they naturally store it for up to 10 hours allowing the heat to be used at night to boil the water and produce the steam. The process can also be used to produce fresh water by cooling the steam using saltwater from the sea.
"When cooling the steam we can use salt water from the sea to bring down the temperature. This difference is used to desalinate the salt water which can contribute to solving the anticipated water shortages," Hamamsy says.
Furthermore, excess energy generated from the MENA region can be exported to countries in southern Europe and then connected to Europe's interconnected power grid. Cables could run on land from North Africa to Turkey or via the Strait of Gibraltar. They can also run underwater to Italy, Greece and other parts of southern Europe.
"The technology needed to transfer electricity for long distance is relatively new. Normally all electricity transmissions are in AC, but it has been recently discovered that using DC in distances over 3,000 kilometers is much more efficient where losses can hover around 10-15%," Hamamsy says.
WHAT NEXT?
The problems facing this concept are mainly in regards to cost. The cost of producing a kilowatt hour from CSP is much higher than that of fossil fuels. Furthermore the fact that electricity in the region is usually subsidized makes it harder to convince the private sector to venture into the industry.
"Nobody will buy CSP electricity except if it's the same price of the subsidized electricity that already exists; typically this discourages investments," says Hamamsy. "This problem however will be solved with time as the cost of fossil fuels start to rise due to scarcity. It is expected that some time between 2020 or 2025 the cost of CSP and fossil fuel generated electricity will be very close," he adds.
There are some minor steps being taken and the project is being experimented with in some areas. For example there is a CSP plant in Morocco with cables running a relatively short distance into Europe. In Egypt, there is the Kuraymat facility which is a combined cycle power plant housing a CSP unit that generates around 20 MW of power.
"They built this facility to learn from it, and there are currently plans to build another one in Kom Ombo that will generate 100 MW of power," says Hamamsy.
He stresses Egypt shouldn't just wait until the technology becomes feasible. On the contrary he advocates that Egypt has to take action by developing the technology and manufacturing the equipment needed locally.
"A country like Egypt should own the technology; we have to do research and own patents and rights so that we don't buy it from abroad. This is a serious matter that will affect our water and energy security, we can't just be an observer," he says.
The entity responsible for renewable energy in Egypt is the Ministry of Electricity's New and Renewable Energy Authority. According to Hamamsy, the authority is very well aware of the potential of CSP and they understand the challenges that face them however, "They are working within the limits of the state," as he puts it.
© Business Today Egypt 2012
