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LARGE SCALE SOLAR SUPPLEMENT - MAY 2011
The Middle East and North
Africa region (MENA) could be
ripe for developing its massive
potential in concentrating solar
power (CSP), nds a recent
study for the World Bank by the
Fraunhofer Institute for Systems
and Innovation Research (ISI) and
the Fraunhofer Institute for Solar
Energy Systems (ISE).
Solar thermal electricity
generation is on a clearly positive
trend, with new CSP installations
having doubled since 2007,
nds ‘MENA Assessment of
Local Manufacturing Potential for
Concentrated Solar Power (CSP)
Projects,’ a study conducted in co-
operation with Ernst & Young.
By mid-2010, over 800 MW
of CSP plants were in operation.
Although the market is dominated
by the US and Spain, a boom
fuelled by national incentives is
now seeing projects appear in
Australia and in Asia and MENA.
The latter offers the greatest
global application potential,
found the study. In addition,
European plant manufacturers
and technology providers are
keen and ready to get involved in
the region. But the report found
that success and acceptance of
solar power plant construction in
the ve countries it examined –
Egypt, Algeria, Jordan, Morocco
and Tunisia – depend heavily on
the integration and participation
of local industry.
The background to the
study is the World Bank’s Clean
Technology Fund (CTF), which
is supporting the development
of solar thermal power plants in
MENA countries. An investment
programme is intended to help
nance new power plants in
the region and develop a local
CSP industry as well as attract
additional investment.
The study results indicate that
the local value added for CSP
plants in the MENA region could
average 60%. Christoph Kost,
head of the study at Fraunhofer
ISE, estimates that the effect from
local value added in the region
could total US$14.3 billion if
sustainable, long-term demand is
created, and that 60,000 to 80,000
jobs could be created in the MENA
region by 2025.
CSP’s potential for the region
Countries stand to prot from
developing production and
infrastructure if they exploit
regional advantages and dismantle
market barriers. But in the short
and medium term CSP projects
in MENA will require a portfolio
of support schemes, including
climate nance and concessional
loans, revenues from solar
electricity exports to Europe, and
national incentives such as long-
term power purchase agreements,
feed-in tariffs, or tax rebates.
In the longer term, generation
costs need to fall dramatically.
Investment costs, and therefore
manufacturing costs for main
components and systems, need
to be reduced through technical
innovation, economies of scale,
and the experience curve effect.
But MENA has technical and
industrial capabilities that are likely
to form a good basis for CSP-
related activities, found the study.
Local manufacturing of CSP
in MENA countries could also
benet from a massive scale-up
of concessional climate nancing
envisaged under the United
Nations Framework Convention
on Climate Change (UNFCCC).
In addition, CSP is central to the
high-level political agreement
between MENA and the EU
to make solar energy trade a
fundamental pillar of economic
integration between the regions.
CSP located in the MENA region
could be key to realising the EU’s
GHG emissions reduction and
energy security objectives.
A strategy for growth
National strategies for industrial
development and energy policy
should involve: clear targets for the
market diffusion of CSP; substantial
R&D efforts; the creation of strategy
funds for industrial development of
CSP industry sectors; and stronger
regional integration of policies.
More technology parks/clusters
and regional innovation platforms
are also needed, especially to
help small and medium-sized
rms overcome barriers and gain
access to the latest technological
advances, the report says.
Business models should build
on the comparative advantages
of some industrial sectors in
MENA countries and also involve
international co-operation
agreements, such as joint ventures
and licensing. A crucial rst step
will be investment in new highly
automated production of mounting
structures and white glass as well
as in adapting techniques for
coating and bending mirrors.
Market actors will need both
access to information and certainty
about the market’s development.
Feasibility studies on production
line upgrades could be key to
this. A regional trade association
might be essential. Starting local
manufacturing will also involve
comprehensive education and
training programmes. Finally,
universities should be encouraged
to teach CSP-technology courses,
particularly for engineers and other
technical graduates, the document
concludes.
MENA TIPPED
FOR CSP BOOM
MENA OFFERS THE
GREATEST GLOBAL
APPLICATION POTENTIAL
REGIONAL MARKETS
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RENEWABLE
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WORLD