UNCLAS SECTION 01 OF 02 AMMAN 004450

SIPDIS

E.O. 12958: N/A
TAGS: ENRG TRGY SENV XF JO
SUBJECT: Solar Power for Electricity and Desalination is
Focus of Renewable Energy Conference


1. Summary: Over 170 people, including five ministers, from
the Middle East and Europe were in Amman for the May 9-11
Middle East and North Africa Renewable Energy Conference
(MENAREC-2). The focus of the meeting was using the Middle
East's abundant solar energy for use in desalination and
electricity production, including for export to Europe. End
summary.

S&T Council Patron Promotes Electricity Exports to Europe
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2. MENAREC-2 was a follow-up to the first MENAREC
conference in Sanaa, Yemen on April 21-22, 2004. MENAREC-2
was co-sponsored by Jordan's National Energy Research Center
and the Higher Council for Science and Technology, and was
funded by the German Environment Ministry. See the website
at www.nerc.gov.jo/menarec2. The Chairman of Jordan's
Higher Council for Science and Technology Prince Al-Hasan
Bin Talal presided at the opening session, and advocated
creating a regional commission for energy and water issues
analogous to the European Coal and Steel Community. He sees
Europe and the Middle East as natural partners in a supra-
regional energy network based on solar-generated electricity
being exported from the Middle East to Europe.

Steam from Solar to Drive Turbines, Desalination
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3. Participants at MENAREC-2 discussed developing
industrial-scale desalination and power plants using
Concentrated Thermal Solar Power (CSP). CSP systems gather
the sun's light with mirrors and use it to heat water to
create steam, as opposed to photovoltaic systems that
generate electricity directly from sunlight. The steam from
CSP systems can drive a turbine for power generation and
thermal desalination systems. These CSP systems would be
hybrids: CSP during the day and fossil energy-based at
night. Experts at the conference posited that desalination
and power systems based on CSP will be cheaper than oil and
gas-based systems in a few years and will be less vulnerable
to fluctuations in oil prices. The goal of MENAREC is to
bring prices for solar energy below those for fossil energy
within a decade. A solar desalination plant for Sanaa,
Yemen is being touted as a MENAREC pilot project.

Private Investor to Build Integrated Plant in Aqaba
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4. There is also a plan underway to build an integrated
five-megawatt power plant and a 30,000 cubic meter per day
desalination plant in Aqaba, Jordan. ESTHOff and ESTH
Specialist met MENAREC-2 conference organizer Ammar Al-Taher
from Jordan's National Energy Research Center (NERC) on May
22 for a follow-up discussion to the MENAREC-2 meeting and
to learn more about the Aqaba project. Al-Taher said there
are currently no companies capable of making integrated CSP
desalination and electricity production plants. For the
Aqaba project, he said that the buyer (a real estate
developer) will have to buy components of the system from
different vendors and do its own integration. (Note: This
proposed integrated system is different from a USAID solar
desalination pilot project that operates in the Aqaba
Industrial Zone. End note.)

Kyoto Protocol Will Spur Demand for "Green" Electricity
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5. Al-Taher said that national regulatory schemes have an
enormous impact on the economics of renewable energy, and
that the demand in Europe for "green" (non-fossil generated)
electricity sparked by the Kyoto Protocol will inevitably
increase demand for solar energy and make it economic. So-
called "feed-in" laws in Italy and Germany, which set aside
a percentage of electricity production for renewable
energies, will help to start that market, he said. Solar
costs will drop as the industry expands, creating economies
of scale, and as technology becomes cheaper and more
efficient, he added.

Energy Efficiency Projects Have High Rates of Return
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6. Al-Taher had just returned from an energy efficiency
conference in Saudi Arabia and said he saw evidence there of
increasing interest even among big oil producing states in
solar energy (which they also have in abundance) and in
energy efficiency. He sees solar as a market opportunity
and as a way of diversifying out of oil. He said
electricity demand is rising 15% per year in Saudi Arabia
and that it will take $10 billion of investment per year to
meet that demand. For that reason, he said, energy
efficiency projects will have a rate of return "higher than
drug companies." He pointed to building codes, energy-
efficient appliances and more efficient generation as ways
to conserve energy. He also noted that with huge energy
investments going into Iraq, now is the time to look at
energy efficiency, since this infrastructure will be
operating for the next 20-40 years.


7. Comment: There is a distinct line in the Middle East
between the oil "haves" and "have-nots." With sunny
climates and almost no oil production, several of the
countries participating in MENAREC-2 are natural candidates
for these combined power/desalination plants, which would
address both their fresh water concerns and their dependence
on oil from their Arab brothers.

HALE