Easy solar energy: Is the writing on the wall for fossil fuel?
Roger Harrison
JEDDAH: Investment in green technology has gone far beyond earth closets and recycled brown paper bags, admirable first steps though they were. When a major global industrial player commits to it to the extent that the corporate giant Siemens AG has, that alone is a convincing argument that the world is looking for cleaner ways of producing energy other than burning fossil fuels. Moreover, it is a very strong indication that the alternative power generation market is also commercially viable.
Siemens has formed a team with Munich Re, the German insurer, Deutsche Bank, utilities RWE and Eon to form a company to explore the technical and geopolitical challenges of building hectares of solar mirrors in the deserts of North Africa and the Middle East to prove concentrating solar power technology (CSP) on a large scale: the Desertec Project. The project is out to prove both the economic viability of solar power and the political and PR benefits that go with it.
A working paper published in December 2008 by the Center for Global Development concluded that the economics of green power from CSP made commercial sense.
In an exclusive interview with Arab News, Siemens’ AG CEO Peter Loescher amplified Siemens involvement in the Desertec project by saying the initiative was designed to provide a sustainable supply of electricity to North Africa, the Middle East and Europe on the basis of renewable energies.
“The participating countries will profit from the production of energy. The export of green power will not only be an outstanding image factor; it will also strengthen local expertise and employment in the area considerably,” said Loescher.
The technologies needed to realize the Desertec concept have already been developed and some of them have been in use for decades. Low-loss high-voltage direct current transmission lines up to 3 GW capacity have been deployed over long distances by Siemens for many years. In July 2007 the company won a bid to build a 5 GW HVDC System in China.
Referring specifically to the potential for Saudi Arabia, Loescher said the country had very large areas suitable for wind or solar power due to its geographical position — investments which would pay off very quickly.
“Implementing an energy mix with a significant share of renewables would allow Saudi Arabia to even longer retain the country’s own oil reserves for the future,” he said.
Many innovative projects are already under way in Saudi Arabia, such as the harmonization and modernization of the power grid that will allow for a highly reliable and energy-efficient power supply.
“Our business in Saudi Arabia strongly supports the pulse of the local life and economy — both water as well as oil and gas,” said the CEO.
One of the latest examples is the construction of Shuaibah desalination plant with an output of 880,000 cubic meters of water per day and 900 megawatts of power for Makkah, Jeddah and Madinah. As EPC contractor for desalination plants Siemens had the know-how to extract the process steam for the desalination plant at the right point in order to maintain the efficiency of both plants at the highest level possible.
“We have a long history in the Kingdom, more than 75 years, during this time for example, we have been awarded (the contracts) to supply efficient automation and control systems for more than 600 oil and gas wells and for pipelines,” said Loescher.
Loescher takes a practical view of the Desertec project.
“It will not solve all global energy problems at one shot: We’ll still need a reasonable energy mix, which of course includes fossil power,” he said.
The Desertec Initiative aims to supply 15 to 20 percent of Europe’s energy needs by 2050. Desertec electricity might be produced both in solar thermal power plants in the desert regions and in wind farms on the coasts or offshore.
“The question of cost efficiency depends on various factors, including geographical conditions, if for example either photovoltaics or solar thermal power plants would be the best choice for the customer. Siemens can provide both the entire solar thermal power block or large-scale turnkey photovoltaic power plants,” said Loescher.
He added that if built in favorable conditions, even onshore wind farms could be profitable nowadays.
“The world’s first project of its kind which produces energy at competitive prices and does not require any additional funding is an onshore wind farm built by Siemens in a mountain area in New Zealand,” he said.
Responding to the observation that locating Europe’s source of energy in a country outside the region was a potential security risk, Loescher was optimistic.
“Siemens has been doing business in the countries of Northern Africa and the Arabian Peninsula for decades,” he said. “We’re an established part of society and everyday life in all these countries. Our experience with the people and governments of the region has been consistently good. We’re glad to be here and proud of being able to contribute to the development of the region.”
Loescher emphasized that it was not his goal to persuade the customers to change their energy strategy but to offer appropriate solutions for all kinds of energy supply and local energy strategy no matter whether it embraced solar, wind or fossil sources. He noted that the company was the only provider of products and solutions that covered the entire energy conversion chain — from the extraction and transportation of oil and gas to the generation, transmission and distribution of electricity. Over the last 20 years, the costs for one Megawatt wind power onshore have dropped from 3 million euros to 1 million euros. “This is certainly not the end,” said Loescher. The same is true for solar energy. The aim of parity between the generation costs of solar electricity and consumer price, the so-called grid parity, is no longer far away. So investing in renewables becomes more and more efficient.
Green energy from renewable resources is not purely for developed countries. Conversely, the argument that the West polluted during its development and therefore no restrictions on using traditional fossil fuels should be put on developing countries might seem to have some mileage.
The reality is somewhat different. In recent months, governments throughout the world have announced large stimulus programs. “We anticipate orders of approximately 15 billion euros from these stimulus programs, over the next three years. Of the anticipated orders for Siemens of approximately 40 percent will go to ‘green’ infrastructure investment projects,” commented Loescher. He gave as examples the US, which wanted to generate 25 percent of its electrical power from renewables; China, which had incorporated environmental protection in its five-year plan; Germany that wanted to generate 20 percent of its overall energy supply from renewables by 2020. “Almost every day governments around the world announce new and eager plans for clean energy supply. Both economic and environmental goals can be pursued simultaneously and also during the (global economic) crisis,” he opined.
Loescher gave a concrete example of a small change making a big difference.
Siemens has converted traffic lights from conventional light bulbs to new LED-technology. If all the traffic lights in Germany were converted to LED technology, this would result in energy savings of 1.4 billion kilowatt hours per year. This, in turn, would result in savings of approximately 170 million euros per year. “In times of tight public budgets, this is a particularly attractive approach, demonstrating how economic and environmental goals can be pursued simultaneously during the crisis,” said Loescher.
Looking to the future, Loescher thought that environmental technology would become the leading industry of the 21st century.
“We already have the largest portfolio of green technologies in the world,” said Loescher. “At Siemens, green, energy-efficient solutions are already generating a quarter of our total revenue. And this is increasing every day.”
In spite of the current economic crisis, the company aimed to increase its revenue from 19 billion euros in 2007 to 25 billion euros in 2011.
“To be at the forefront of technology we spent about 1 billion euros for green research and development in 2008 and hold 14,000 green patents,” Loescher said. “Currently some 100,000 of our employees are working full or part time on our green portfolio and we see a continuing shift from Blue to Green collar workers in our work force.”
Despite the crisis, the company created some 1,600 green jobs worldwide in the first six months of 2009. “So Siemens is green and becomes greener every day,” said Loescher.
Fossil fuels will certainly continue to be part of the global fuel mix for some time, but with the serious pursuit of greener and renewable sources of energy it is only a matter of time before they become a minority rather than a majority source.
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