EL SEGUNDO, USA: In what iSuppli Corp. believes could mark the beginning of the end of the use of fossil fuel and nuclear technologies for electrical generation, the world’s largest re-insurance company has announced an unprecedented effort to invest billions of euros in solar power plants in North Africa.
The Desertec project, sponsored by Germany’s Munich Re, plans to invest 400 billion euros to build solar power plants in the North African Sunbelt, located in the Sahara Desert region.
The effort will utilize Concentrating Solar Thermal Power (CSP) plants to generate electricity and will establish an upgraded electrical grid in the Mediterranean countries. The project will be built during the next 10 years.
Munich Re, Siemens, Deutsche Bank and RWE are partnering in the project, and more than 15 other companies are being invited to join the consortium.
“Beyond the major impact of Desertec itself, the project is set to spur a new wave of other solar power plants and projects, iSuppli predicts, marking a historic shift from traditional electrical-generation techniques to solar power,” said Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli.
“Desertec represents a number of milestones in the history of the solar business. For one, it marks the first time that private companies will invest in a long-term renewable-energy endeavor of such vast size.
Furthermore, leading companies have never undertaken such major risks to invest in a relatively new technology amid an uncertain political environment and missing infrastructure.
“Finally, insurance companies traditionally have been risk-averse investors. The participation of Munich Re provides priceless value and credibility for future renewable-energy projects,” Wicht said.
“Because of these factors, Desertec is likely to be followed by other initiatives. iSuppli expects China will move quickly on similar projects because of its eagerness not to miss out on the future of the renewable energy business.”
The private companies funding Desertec expect an attractive margin by producing and selling electricity from the desert. The Wuppertal Institut of Energy concluded in a study sponsored by Greenpeace that by 2050, the CSP industry will generate about 2,000 billion euros in revenue and will create 600,000 new jobs worldwide.
This means that the CSP industry will be able to offer as many jobs as the German automotive industry does today.
A large portion of the equipment for the North African power plants will be delivered by the German solar industry.
Leading suppliers for the Desertec project will include:
· Flabeg and Schott Solar, which supply CSP systems.
· Siemens, which offers steam generation turbines.
· MAN Ferrostaal and Solar Millennium, which are experienced project developers for concentrated solar power systems.
Aside from this milestone for CSP plants, iSuppli believes that Photovoltaic (PV) and concentrated PV systems will complement the technology mix of Desertec. PV is well suited for situations in which no water can be found to generate steam to run the solar thermal power plants.
The next date to watch for the Desertec project is mid-July—when the industrial partners meet again to formerly announce the consortium. iSuppli will be reporting this development from Munich.
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