green power desertec

Where a Kilowatt Hour of Green Electricity Costs Only Two Cents

Oil and natural gas have made North Africa and the Gulf states rich. Now the region wants to become a supplier of renewable energy; the Ukraine war is accelerating the trend. Exclusive satellite images show the massive expansion of wind power and solar installations in the region.

“Economy from above” is a collaboration between WirtschaftsWoche and LiveEO. This is a translation of the original article written in German by Thomas Kuhn. Access the original article here.

The plan first seemed visionary, then megalomaniacal. A good ten years ago, German and European energy and industrial groups and major banks launched their Desertec Industrial Initiative with the aim of tapping the almost inexhaustible quantities of green electricity from the Middle East and North Africa for the energy transition. Ex-Siemens boss Peter Löscher even spoke of the “Apollo project of the 21st century. Half a trillion euros were to have flowed into the project by 2050, making it the largest global project in the energy sector. Until the plans fell through and the dreams of most of those involved were shattered. In 2014, most withdrew from the project. The Desertec vision seemed to have failed.

Seemed. Because today, the ideas from back then are more relevant than ever, as exclusive satellite images from LiveEO show. In countries like Egypt, Oman and the United Arab Emirates, state and private power plant operators are spending billions of dollars on new power plants and sustainable power generation.

Since 2019, for example, the company Lekela Power has invested around 325 million U.S. dollars, the equivalent of a good 300 million euros, in the construction of the West Bakr Wind Farm, a 252-megawatt wind power plant located around 230 kilometers southeast of Cairo directly on the Gulf of Suez.

west bakr wind power projectwest bakr wind power project
West Bakr Wind Power Project, Ras Gharib, Al-Bahr al-ahmar, Egypt
31.01.2020 (left picture): Only a few already leveled circular areas (left side of the picture) indicate the later construction sites for the wind turbines.
14.02.2022 (right picture): A new access road to the wind farm branches off from the highway at the Gulf of Suez (top right). The rows of wind turbines extend into the desert like long, narrow fingers.
Images: LiveEO/Sentinel

The satellite photos show how the long rows of the total of 96 wind turbines extend into the country like gigantic fingers from the coast. The first of the wind turbines supplied by turbine manufacturer Siemens Gamesa was installed at the end of 2020, and commercial operation began in November 2021. The project was officially inaugurated at the beginning of March this year. The wind farm is expected to supply around 1000 gigawatt hours of electricity per year. Enough to supply two medium-sized copper smelters or more than 350,000 households with energy.

The reason for the radical change of course, which gives new momentum to the supposedly already written-off Desertec plans, is the increasingly urgent climate change and the need for many Western countries – above all Germany – to free themselves from dependence on Russian gas.

It is clear that the transformation of the power supply in industrialized countries to renewable energy sources and the development of a climate-neutral economy can only be achieved if North Africa and the Gulf region supply the necessary energy. “Ten years ago, Desertec was seen primarily as a means of supplying electricity to Europe,” says Paul van Son, once head of the Desertec Industrial Initiative and now president of its spin-off think tank, DII Desert Energy. “Today, however, the issue takes on more weight than ever in the context of climate change and the hydrogen economy.” The immense quantities of sustainably produced hydrogen or methane, without which the sustainable transformation of Europe’s industry will not succeed, will have to be generated largely with wind and solar power from North Africa and the Middle East.

Green Power Plants for Europe

Locations of solar and wind entrepreneurs in the desert

green power plants for europe
Source: Own research Graphic: Patrick Zeh

Fear of Upheavals Like After the Lehman Bankruptcy

The successful transformation of the energy industry will be at least as vital for the buyers of sustainably generated energy as it is for their suppliers. The countries in the region, whose prosperity has been largely based on the sale of oil and gas, urgently need a new business model: If the fossil energy world is increasingly transformed into a hydrogen economy, the region could be threatened with economic and political upheavals comparable to the financial crisis after the Lehman bankruptcy, warns van Son.

This has also long been clear to the political leaders in the region. They are racing to expand green energies. The Roland Berger consulting firm has already calculated that the region could generate up to 200 billion euros in potential sales by the end of 2021 if the desert were to be greened in this way. It would also create around one million new jobs.

Also officially inaugurated in early 2022 and with an installed capacity of 500 megawatts twice as powerful as West Bakr is the Ibri II solar park, located around 100 kilometers as the crow flies west of Oman’s capital Muscat. The project, with an investment volume of a good 400 million dollars, had been built by the Saudi Arabian energy and water supplier Acwa Power and the Kuwaiti project developer Alternative Energy Projects since the fall of 2020 and was already technically commissioned last November.

  • Oman Ibri II Solar Park
  • Oman Ibri II Solar Park Construction Roads
  • Oman Ibri II Solar Park Preparatory Works
  • Oman Ibri II Solar Park 2021 Foundations
  • Oman Ibri II Solar Park 2021 Plant Area
  • Oman Ibri II Solar Park Plant Open Area
  • Oman Ibri II Solar Park 2021 Plant Test Operations
  • Oman Ibri II Solar Park Plant Regular Operations

Images: LiveEO/Sentinel

The heart of the plant is an approximately 13 square kilometer solar park consisting of around 1.5 million solar panels, which extends around two kilometers west of the technical operating buildings in the desert. This makes the solar field somewhat larger than the Eder reservoir in northern Hesse. Over the course of a year, Ibri II is expected to supply around 1600 gigawatt hours of electricity from solar power and save 340,000 tons of CO2 emissions compared with conventional power plants.

By 2025, Oman aims to cover at least ten percent of its electricity needs from renewable sources and increase the share to up to 40 percent by 2040. Contracts for the next major solar project, the Manah 1 and 2 solar power plants, are to be awarded before the end of 2022 and, with a combined capacity of one gigawatt, are to come on stream by the fourth quarter of 2024 at the latest. This would be equivalent to just under a quarter of the output of Germany’s largest coal-fired power plant currently in Grevenbroich-Neurath on the Lower Rhine, with around 4.2 gigawatts of installed gross capacity.

The Largest Solar Energy Project in the World

The huge Mohammed bin Rashid Al Maktoum Solar Park is expected to significantly exceed this performance. The park has been under construction near Dubai since 2013. By 2030, the plant, the fifth phase of which is currently under construction, is to achieve a total output of five gigawatts. This makes the solar park currently the largest solar energy project in the world.

The plant is part of plans to switch at least three-quarters of Dubai’s power generation to renewable sources by 2050. In 2020, seven percent of Dubai’s electricity generation came from wind and solar power; currently it is a good eleven percent.

  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Solar Park Construction Phase
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park
  • United Arab Emirates Mohammed bin Rashid Al Maktoum Solar Park

Images: LiveEO/Sentinel

The Mohammed bin Rashid Al Maktoum Solar Park is remarkable not only for its size. It is also unusual for the combination of generation technologies used there, which have been installed on the huge construction site in several construction stages from west to east over the past few years. While the majority of solar power plants in North Africa and the Gulf region now rely solely on photovoltaics, the fourth, 700-megawatt project phase in Dubai is based mainly on solar thermal energy. Solar heat is used to heat molten salt and drive turbines via generators.

The concentrator for sunlight, onto which the heat from the light is focused, is located at the top of a solar tower that, at a good 262 meters high, is currently the tallest in the world. Because the heat can be stored temporarily, Module 4 of the plant can continue to supply electricity for hours into the night. This advantage compensates for the significantly higher generation costs of solar thermal energy.

This is because electricity from solar thermal power in Dubai, at around 7.3 cents per kilowatt hour, is almost three times as expensive as photovoltaic electricity from the latest, fifth construction phase of the plant (2.5 cents per kilowatt hour). Nevertheless, solar thermal power from Dubai is also at about the same price level as German coal-fired power plants. Their costs per kilowatt hour are between 6.3 and 9.9 cents; lignite-based electricity costs between 4.6 and just under eight cents in Germany.

One Kilowatt Hour of Green Electricity Under Two Cents

Meanwhile, the cost of solar power continues to fall. The solar thermal power plant in Dubai, for example, already produces electricity around 25 percent cheaper than the Noor solar thermal plant in Ouarzazate, Morocco, which is currently considered one of the largest of its kind. Thanks to immense leaps in output, photovoltaic power can even be produced for less than two cents per kilowatt hour under the most favorable circumstances in the region, according to calculations by DII Desert Energy. Wind power costs only two to three cents.

This means that the initially somewhat higher initial costs for CO2-free power generation are no longer too significant. In total, the solar park near Dubai has a planned investment volume of the equivalent of around 13.6 billion dollars. Operator RWE has invested a good 2.6 billion euros in the expansion of the lignite-fired power plant in Grevenbroich-Neurath by two power plant units, each with an output of 1.1 gigawatts. The technology for the solar park in Dubai is thus twice as expensive to build as that for the German lignite-fired power plant.

However, each kilowatt hour of solar energy subsequently costs just under a third of the coal-fired power generated in the Rhineland. And coal will become more and more expensive in the future due to the foreseeable increase in costs for its CO2 emissions of around 32 million tons per year. The solar park in Dubai, on the other hand, is expected to save more than 6.5 million tons of CO2 emissions per year compared to fossil-fuel power plants.

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