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COVID19 and EU’s Green Deal: Has the Time Come for Mediterranean Clean Energy?

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May 06, 2020 / 0 Comments
Tags: Energy / 2020

Photo: Nice Tourisme

 

It has long been understood that the Southern Mediterranean has extremely abundant cheap solar energy resources and plentiful desert land to build it on. With those resources it could supply much of Europe’s green energy demand more cheaply than if Europe relies only on itself.

Until now, Europe has failed to take that prospect very seriously. Yes, there was a Mediterranean Solar Plan (MSP) a few years ago, but it got lost in politics and produced more Powerpoints than actual power plants. Yes, there was a Desertec Industry Initiative (Dii) of some mainly European companies, but when Europe went into financial crisis in the last decade, they became too short-termist and protectionist to be interested in importing cheap energy from the Southern Mediterranean. 

 

What were the results? Only a handful of solar power plants, little income generation or employment creation, nothing much to prevent economic decline and political instability in the Southern Mediterranean, even though the region has such a massive comparative advantage in solar energy. Nothing much to create a magnet and offer alternatives to those who ended up taking the risk to escape in leaky boats across the Mediterranean. With well-known political consequences in Europe.

 

What has changed now? Why would any new initiative not just follow the sorry history of the MSP and Dii? There are actually quite a few factors that have improved the chances of success.

One big one is the EU’s Green Deal. It is designed to move Europe through a quantum leap away from fossil fuels to cheap green energy – both renewable electricity and renewable gas, such as green hydrogen (produced through electrolysis of water using renewable electricity). It needs to do that as cheaply as possible so as to generate as much economic growth and technological progress as possible.

 

There’s another reason now why it needs to be as cheap as possible: Europe and the Southern/Eastern Mediterranean risk falling into a deep and prolonged economic depression to rival the 1930s without massive stimulus packages. These packages will be much more effective if energy is cheap and if economic and employment growth happen both sides of the Mediterranean. In fact, COVID-19 recovery across the Mediterranean could be said to depend on the availability of cheap clean energy coming from the Southern Mediterranean.

 

There are also some less “big picture” reasons why such an initiative could succeed now where it didn’t before. Over the last few years, renewable energy and energy storage have got much cheaper, so renewables can often compete with natural gas or coal. And subsidies to renewable energy in Europe, where they are even still needed, are usually subject to auction mechanisms which minimize those subsidies – that makes it politically easier to procure the renewable-based electricity from imports, because nobody really wants to hand over large subsidies to another country. The technologies of renewable gas are now also developing fast, which gives more flexibility in how to export renewables and expands the consumer base. And perhaps above all, Europe experienced the consequences of becoming very inward-looking after the previous crisis and might not want to go that way again.

 

Let’s see. It’s really up to Europe to seize the opportunity. There is little doubt that the Southern and Eastern Mediterranean would grab that opportunity if offered. The grim alternative doesn’t really bear thinking about.

 

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.

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).

 

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