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Why Does Europe Import Pineapples, But Not Solar Energy?

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Jul 02, 2015 / 0 Comments
   

By: Jonathan Walters* and Silvia Pariente-David*

 

Let’s imagine a strange conversation, between Mr. Protection and Ms. Solar.  So we can try and understand why Europe imports no solar energy from sunny places, but all of its pineapples.

 

Ms. Solar: “I don’t understand.  North Africa is thirty percent sunnier than Southern Europe, and a whole lot sunnier than Northern Europe, but Europe produces by itself all of its consumption of solar energy, and imports none.”

 

Mr. Protection:  “Well, Europe doesn’t want to depend on others for its energy.  That makes it too insecure.”
 

Ms. Solar: “But Europe imports massive amounts of energy – from Russia, from the Gulf, from multiple sources, including large amounts of natural gas from North Africa.”

 

Mr. Protection: “OK, but solar energy is expensive, so why would Europe want to import it?”
 

Ms. Solar: “I’m sorry, but it’s hard to know where to start answering that question!   Firstly, the costs of all types of solar energy – photovoltaic and solar thermal are falling fast.  In some places already, solar energy is the cheapest option.  Secondly, Europe is rightly consuming large amounts of solar energy to help reduce global warming and other environmental impacts from fossil fuels or nuclear energy.  So why not buy it from where it is cheapest?”
 

Mr. Protection: “But aren’t there still large subsidies in Europe for solar energy?”
 

Ms. Solar: “There have been large subsidies in the past, and there still are significant subsidies in some places.  But the real point is that if you are going to subsidize solar energy, you should at least get the most solar energy possible for each euro of subsidy. That means importing some of it from sunny North Africa!  If on the other hand, Europe subsidizes only its own production, the imports from sunnier places can’t compete.  That’s what’s happening now.”
 

Mr. Protection: “But won’t it cost a lot to transport solar energy from North Africa?  Won’t it take a long time to start up?  Won’t we have to build a lot of new transmission lines in Europe?”

 

Ms. Solar: “No, it adds only a cent or two to the cost, which is more than offset by the solar energy itself costing less.  There are existing transmission lines from North Africa to Europe, so it can start very quickly, and building extra ones doesn’t need to take long if the demand is there.  If imports build up to a huge level (which could take many years) Europe would indeed need a stronger transmission network, but it needs that anyway.  In all cases, the cost of transmission is not a major factor.”

 

Mr. Protection: “If we buy solar energy from North Africa won’t jobs move from Europe to North Africa?  How could we do that?”

 

Ms. Solar: “Yes, solar energy jobs would probably be shared more between Europe and North Africa as a result of imports – supply chains will develop across the Mediterranean.  But that’s a good thing – don’t we all need more integration, and more jobs for the many unemployed young people in North Africa?  Maybe that’s what “energy security” should really be about.”
 

Mr. Protection: “But shouldn’t we leave that energy in North Africa?  Don’t they need it there?
 

Ms. Solar: “Do we say people in the tropics should eat all their pineapples, and not earn revenue from selling them to Europe?  Should Ghanaians eat all the chocolate themselves? Why is energy different?  In any case, if exporting solar energy is profitable for North Africa, they can use the profits to finance other investments – whether in improving the energy supply or in other sectors.  Nothing is taken away from North Africa – the sun is very large and keeps shining!”

 

Mr. Protection: “So why hasn’t the import of solar energy started happening?”
 

Ms. Solar: “You would have to ask the Europeans, Mr. Protection!  But think how great it would be, particularly with Europe hosting this year’s climate change negotiations (CoP21), if Europe opened its markets to North Africa’s solar energy.  And then we could celebrate together at CoP22 next year in Marrakech!  Let the sunshine in!” 

 

Jonathan Walters

Jonathan Walters is an independent economist specializing in the integration of the Arab and Mediterranean world, with a strong interest in renewable energy and in trade. He is a former World Bank Director of Regional Programs in MENA, and has worked on the region for more than a decade. Mr. Walters initiated the $6 billion scale up of solar power in MENA, led by the World Bank, and financed under PPP arrangements. The most successful example to date is the 500MW Moroccan Noor-Ouarzazate Solar Complex. He is a Senior Visiting Fellow of the Oxford Institute of Energy Studies and a Senior Associate of E3G (the climate change think tank).

 
Dr. Silvia Pariente-David

Silvia Pariente-David is a Senior Advisor on energy at the Center for Mediterranean Integration (CMI). She helped create the CMI Forum on Energy and Climate Change. She has 40 years of experience in managerial positions in financing, advisory and consulting activities in the fields of energy project evaluation, energy market analysis, regional energy market integration and climate policy assessment. Throughout her career, she has thrived to promote regional energy market integration, be it the EU Single Market, the Common Maghreb energy market or the nascent Euro-Mediterranean energy market.

 

While a Senior Energy Specialist at the World Bank, Dr Pariente-David was one of the leaders of the MENA CSP scale-up program, funded by a $750 million grant from the Clean Technology Fund, and the Task Team Leader for the first project under that program, the Noor-Ouarzazate plant in Morocco. Previously, she was leading a consulting team advising major energy companies on their renewable energy strategy, conducting power plant valuation studies and assessing natural gas market value. She also directed DRI/McGraw-Hill (now IHS) World Energy Service, providing clients with oil, natural gas and electricity price forecasts.

 


She holds a PhD in Operations Research from MIT and an Eng. Deg. in Applied Mathematics and Computer Science from ENSIMAG at Institut Polytechnique de Grenoble.

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