Ian McEwan recently wrote in a British national newspaper, “an alien landing on our planet and noticing how it was bathed in light would be amazed to learn that we believe ourselves to have an energy problem [or] that we ever should have thought of overheating or poisoning ourselves by burning fossil fuels or generating plutonium.” For many, the case for solar energy is really that simple — every other living thing on this planet relies on the endless rain of photons to satisfy its energy needs in one way or another; it is time that humans looked toward the sun as well.  

Solar power technology is reaching maturity and the cost of manufacture of the hardware required to generate energy from the sun is diminishing. Meanwhile, the stability of the sun as an energy source in certain parts of the world, notably deserts, has led to the development of grand projects that could allow rapid strides to be made toward the satisfaction of global renewable energy targets.  

Though without a desert inside its own borders, the European Union has identified the southern Mediterranean shores of North Africa, the Northern Sahara and the Middle East as potential areas for large-scale investment in solar power to feed into the European grid. The European Commission’s Institute for Energy has calculated that it would require only 0.3 percent of the Saharan and Middle Eastern deserts to be covered with solar facilities to meet all of Europe’s energy needs. Efficiency improvements in solar technology could make that figure even smaller by 2020.  

The first concrete proposal designed to harness this incredible power source is the Mediterranean Solar Plan (MSP). MSP is the flagship project of the Union pour la Méditerranée (UPM), an organization of 43 states — from the EU, North Africa and the Middle East — launched on July 13, 2008, by the French Republic under the French presidency of the European Union. The goal of the MSP is the development of new energy production capacities using renewable energy, in particular solar technology, on the south side of the Mediterranean to satisfy local demand and to export a large part of the production to the EU. The concrete target of the MSP is the construction, by 2020, of 20 GW of new electricity capacity using low-carbon technology.  

The MSP has three discrete phases. By the end of 2009 the preparation phase, including mobilization of stakeholders and identification of sustainable technologies compatible with the goals of MSP, will have been completed. The second phase will allow, within the framework of an action plan, the first series of small pilot projects to be built. These projects will develop photovoltaic, concentrated solar power and wind plants in order to sample and trial the broadest range of sources. Through the development of these pilot projects, the participants in the MSP will be able to define and test financial mechanisms, legal frameworks (local licenses, authorizations and tariffs) and establish a viable importexport framework between North Africa and the EU. We will finally see the large-scale realization of new capacity with the implementation phase beginning in 2011, ramping up toward and possibly beyond the 20 GW target by 2020.  

The European Commission has removed legal barriers so that North African countries can export power to the EU, but there remains a major practical challenge to the realization of the MSP from a European perspective. The EU is currently ill-equipped to transmit the new power capacity to the urban and industrial regions of intensive energy consumption in the center and north of the EU, which need it most. To counteract this problem, the EU has drawn up a blueprint for the construction of a new backbone of high-voltage direct current (HVDC) transmission lines, which carry electricity long distances without losing as much power as EU standard alternating current lines.  

The full cost of building such a “supergrid” in Europe is projected to be as much as €450 billion ($560 billion). However, the cost is only the beginning of the problems for the supergrid’s planners, as a labyrinth of competing and contrasting legislation on siting new power cables awaits those attempting to bring such a plan to fruition across the diverse planning systems of the EU.

Nevertheless, almost €9 billion ($11.2 billion) of investment has already been allocated for new networks between 2007 and 2009 in Germany, the linchpin of the supergrid. To encourage further funds, the German regulator will allow higher returns on equity capital invested in electricity and gas networks from 2009. A bill to streamline the planning and licensing process for HVDC cables has recently had its first reading in the Bundestag, the German parliament, and could be approved next year. If these incentives prove to be sufficient to allow the construction of the North Sea-Bavaria HVDC line, a major wind source will have been integrated into the supergrid and the precedent for incorporating the MSP will have been set. It remains to be seen whether a German general election in September 2009 will stunt Germany’s progress in this area. The same political issues surround the MSP since the project is being championed by the French, who relinquish the presidency of the EU in December 2008.  

Recession and the instability of potential funding parties have also been suggested as potential stumbling blocks for the European supergrid and MSP. However, advocates of the two projects maintain that the EU should prepare for the end of the recession when rising energy demand will meet sluggish supply and the potential for the MSP to fill the gap at a competitive price should be exploited. Even without an upturn, the German Energy Agency has warned of a “power gap” from 2012 and a supply shortfall of the equivalent of 15 power stations by 2020 — the same year as the MSP is expected to be supplying 20 GW to the EU network. Calls are therefore being made for insurance companies and pension funds that have lost money in the financial crisis to look closely at investing in the supergrid and MSP since the potential for steady long-term gains should suit institutional investors if they can model around the risks.  

In conclusion, the MSP faces the challenges of insufficient transmission capacity, a shortage of financing and political unpredictability. Critics also suggest that trading a reliance on Saudi oil for reliance on Libyan sun does not necessarily translate into an improvement in the European energy security position. However, provided a stable power export agreement can be maintained through the UPM, the enormous potential capacity of the MSP in concert with the EU supergrid should be enough to make these projects fundamental parts of the EU’s CO2 reduction strategy to 2020 and beyond.