15 July 2009

Major companies talk solar power investment

In terms of solar power, why not just build a solar farm in the desert? Plenty of sun, and with the exception of some critter life, it has a low population issue. That should help alleviate some of the energy issue, right? Well, it is not that easy.

That may soon change, as Munich Re, the world’s largest reinsurance company, has invited 20 large companies (including Siemens, Germany’s engineering giant; power suppliers RWE and E.ON; and Deutsche Bank, Germany’s biggest) to join it in forming a consortium called Desertec.

If that plans works out, the consortium could eventually build a legion of solar power stations in Africa and Arabia, and connect them to Europe.

These power stations would be “solar thermal,” rather than the better known sort relying on photovoltaic solar cells.

That would mean instead of converting the sun’s rays directly into electricity using expensive semiconductor-grade silicon, they will use cheap metal mirrors to focus those rays either onto boilers that make steam to drive turbines, or onto containers of special low-melting-point salts that will store heat overnight, so it is available to drive turbines during the hours of darkness.

Munich Re’s interest in the matter is to reduce the effects of global warming. Munich Re hopes by introducing solar power on a large scale it will help slow weather-related natural catastrophes down a bit.

Large-scale investment would also provide economies of scale and stimulate innovation, thus reducing the cost of solar electricity. Currently, solar power is more expensive than the cost effective coal-generated electricity, but industry experts feel solar-thermal is closer to getting at a better price point than than photovoltaics.

If the plan does come together, it would involve spending $560 billion (€400 billion) at today’s prices, over the next 40 years, building enough solar power stations to satisfy 15% of European demand in 2050—together with most of North Africa’s and Arabia’s—and about 20 trans-Mediterranean HVDC cables which, unlike conventional AC power lines, can transmit power over long distances and through water without significant losses.

For related information, go to www.isa.org/productivity.