Solar Energy Perspectives - IEA

Solar Energy Perspectives: Solar electricity
now comprises 19 shareholders (ABB, Abengoa Solar, Cevital, the Desertec Foundation,
the Deutsche Bank, Enel Greenpower, E.ON, HSH Nordbank, Man Solar Millenium,
Munich Re, M+W Group, Nareva Holding, Red Electrica, RWE, Saint-Gobain, Schott
Solar, Siemens, Terna, UniCredit). DII aims to establish a framework for investments to
supply the Middle East, North Africa and Europe with solar and wind power. The longterm
goal is to satisfy a substantial part of the energy needs of the Middle East and North
Africa (MENA), and meet 15% of Europe’s electricity demand by 2050.
MENA’s abundant sunlight will lead to lower production costs, compensating for
additional transmission costs and electricity losses. The costs of production of firm and
dispachable electricity in North Africa, currently assessed at USD 210/MWh and
expected to be less than USD 150/MWh by 2020, plus its transport to the south of
Europe, assessed at USD 20/MWh to USD 40/MWh, would make it an attractive way to
comply with the current and future renewable obligations of European Union countries.
The consortium Medgrid focuses on establishing the necessary HVDC transport lines.
From a MENA perspective, exporting electricity to Europe and providing the local
population and economy with clean electricity do not conflict given the almost
unlimited potential for solar electricity in the region. Indeed, exports to Europe may
help secure the financing of CSP plants on the south shore of the Mediterranean Sea,
which would generate electricity for both local and remote needs. The primary
condition for the necessary investments is European countries offering to sign longterm
power purchase agreements.
Concerns have been voiced about possible energy security risks for importing
countries. Large exports, however, would require (by 2050) twenty to twenty-five
5-GW HVDC lines following various pathways. If some were out of order for
technical reasons, or as a result of civil unrest or a terrorist attack, others would still
operate – and, if the grid within importing and exporting countries allows, possibly
compensate. In any case, utilities usually operate with significant generating capacity
reserves, which could be brought on line in case of supply disruptions, albeit at some
cost. The loss of revenue for supply countries would be unrecoverable, as electricity
cannot be stored, unlike fossil fuels. Thus, exporting countries, even more than
importing ones, would be motivated to safeguard against supply disruptions.
Economics of solar electricity
The PV industry has witnessed significant cost reductions in only the last three years. CSP
plants, which have been developed only since 2006, have a longer lead time, and in the
United States in particular have been facing administrative barriers. A rapid deployment with
innovative designs and the emergence of new stakeholders in additional countries is now
expected to unlock cost reductions.
Solar photovoltaics
PV costs have been reduced by 20% for each doubling of the cumulative installed capacity. The
cost reductions are thought to result from manufacturing improvement and deployment as much
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