Policy Brief #07 December 2009. This briefing identifies the opportunities, risks, and challenges associated with efforts to expand solar energy capacity in North Africa to the point where it can make a significant contribution toward achieving emissions reductions targets. It is based on collaborative research between IIASA and PIK, the Postdam Institute for Climate Impact Research.
- Recent policies in Europe and the United States have led to a surge of development in concentrating solar power (CSP), with generating capacity due to expand by a factor of ten over the next five years. CSP with thermal storage is one of the few renewable supply options that can provide base-load and dispatchable power. The economic potential of CSP from desert regions is larger than current global energy demand; this means that CSP could replace a large fraction of current thermal power generation from fossil fuels.
- There have been several recent government and private sector initiatives to couple the expansion of CSP capacity in North Africa with the development of high-voltage direct current (HVDC) transmission lines to Europe. The European Renewable Energy Directive (2009/28/EC) would allow such imported electricity to contribute to member states’ 2020 emissions reductions targets, but there is no specific policy in place to establish the financial and regulatory framework for any such development.
- This study addresses the opportunities and risks associated with European — North African cooperation on CSP development, as well as the challenges that a policy framework must overcome.
- Opportunities CSP development in North Africa offers not only an affordable option to help European countries achieve 2020 renewable energy targets without sacrificing system reliability, but also the possibility of establishing a lower-cost alternative to conventional power generation that could help achieve global 2050 emissions reduction targets.
- Risks CSP development in North Africa is unlikely to increase Europe’s energy import dependency or impose new risks of large-scale system blackouts in the event of hostile state or terrorist activities. It may, however, be blocked by potentially prohibitive financial risks for project developers associated with the business and investment climate in North Africa.
- Challenges To stimulate the development of CSP and transmission capacity, policies must address the barriers to siting international transmission lines in Europe, the financial requirements of project and supply chain developers, and the needs of North African countries to provide increased energy access and sustainable job growth to their citizens.