MEDGRID, As in South North Energy Transmission
How is Medgrid embedded in the Union’s Mediterranean Solar Plan (MSP)?
First of all, the idea of interconnections between Europe and SEMCs is quite an old one. At first, a ring around the Mediterranean was supposed to synchronously connect all the grids in the area. More recently, a new interest has arisen due to the development of renewable energy, mainly solar and wind. In order to help SEMCs to invest in this technology, the EU through Article 9 of the Renewables Directive (1) is ready to buy part of the electricity produced there at a higher price. Medgrid is a central piece in the framework of the MSP, which foresees generating 20 GW of electricity by 2020 and exporting 25% of it to Europe. Such a quantity is beyond the capacity of a ring: we need to have direct submarine connections as well.
The idea of Medgrid is to define the ways such a plan could be realized by 2020–25. We have five working groups, focusing on different aspects: technology, economy, financing, regulation change and strategic opportunities. The objective is to have a master plan ready for 2014.
We need to emphasise that it is a co-development project for an exchange in both directions, not a decision from the North to the South. Europe’s interest is to help these countries to develop, even more after the Arab Spring, and one important subject is energy and electricity. Medgrid can be an instrument in these efforts.
How does the Commission support the studies?
The interconnections with SEMCs are included in the strategic review of 2008: it is one of the four main projects, so the Commission is really aware of what we do. But for the moment we did not ask for any subsidies; we could perhaps consider that in the future. We have also an agreement with the European Commission to cooperate with an ongoing EU study on a similar subject, which involves many Medgrid stakeholders. Two Directorates-General support our actions: DG Energy and DG Development. The cooperation goes smoothly, as I used to work as a special advisor of the former Energy Commissioner Andris Piebalgs in 2008–2009. The Joint Research Centre with Director-General Dominique Ristori is also really supportive of our actions.
What is Medgrid’s relation to Desertec, the German-led solar project in the region?
The first difference between the two is that Desertec is looking ahead to 2050. Our deadline is shorter: 2020-25. The second: Desertec’s main focus is generation, while we focus on transmission. The work done in transmission by Medgrid could be included in the work of Desertec to see how to connect generation to the European grid. At the same time, we are very interested to know about Desertec’s projects. It is crucial to be able to define the necessary size of the connections. We are complementary with Desertec, we are not in competition. In fact, on 24 November we are going to sign a ‘Memorandum of Understanding’ in the presence of Mr Oettinger, just before the Council meeting of energy ministers. I should add that Mr Paul van Son, CEO of the Desertec Industrial Initiative, is a close friend of mine. We were working together in the CIGRE. He was at the time the secretary of a study committee which I was chairing.
Still, Desertec identifies transmission as one of its work areas.
Our studies will be of great help to them in this work. I should say that in Medgrid, we have the best experts in Europe because of our connection to CIGRE. Colleagues in Desertec know that they should consult us on what the best choices are in the field of transmission. I should add another fact: we are building an interconnection which will operate in both directions. We could export from the South renewable energy to Europe and at the same time we could bring conventional energy to the SEMCs. The interest is great for these countries because the prices of electricity are higher and the peak demand, used for air-conditioning, is in the summer, while European demand peaks in winter. This creates a complementary structure of the two power systems. The profitability of the investment will come from the export of renewable energy to Europe, but also from the export from Europe to the South. The present situation between Spain and Morocco, where there is already an interconnection, shows this trend. Of course, we have to build interconnections in Europe as well!
What are the main challenges ahead of the construction?
The main challenge will be to find the money at good conditions. If we consider an HVDC (2) submarine connection between, for instance, Italy and Tunisia, the cost of a link of 1,000 MW will be close to €1 billion. One possibility for finance is an investment from the two transmission system operators. The second, as allowed by the Renewables Directive, is to set up national plans: in this case, we have to change national legislation. We are ready to do that. The new government in Tunisia is open to cooperation as well.
We are also in partnership with ONE (3) in Morocco, with Egypt, Jordan, Syria and most recently, STEG (4), the Tunisian electricity company. We want to extend these programmes to Algeria, where we have contact with Sonelgaz, and to Libya, as soon as the country is in a good situation.
The country playing a key role here is Turkey, which is in the process of operating a synchronized connection between its power grid and the European one. Turkey has an ambition to become an energy hub between Europe and SEMCs, and beyond, towards Iraq, Iran and maybe the Gulf states. We have good contacts in Turkey: RTE (5)signed an agreement with TEIAS (6)under my leadership as CEO.
What is the estimated cost of the whole investment?
If you consider that in 2020-25 we would like to import 5 GW from the South, it will be around €5 billion. The master plan will give a more accurate figure: final decisions will be taken based on them in 2014-2015.
When do you expect renewable energy prices to be competitive with electricity generated from fossil sources?
It depends on the type of energy. Regarding wind, conditions in the SEMCs are very favourable: along the Atlantic coast, generation time duration is around 4,000 hours a year, double the European figure. Here, wind energy is already competitive with gas. The important question is the more expensive solar system. Using thermal concentration technology, the price level is at least €200 per MWh, compared to wind which is €90 in Europe, €60 in the South. There is strong competition worldwide. We know that the Chinese have invested a lot in photovoltaic cells, and it appears that the price of these cells decreases a lot, about 20% a year. Certainly, for the future, we should consider using them more extensively. In Europe, concentrating on photovoltaic technology is very promising and it is developed by one of our partners, Soitec.
What are the chances of completing the integrated electricity and gas market of the EU by the 2014 deadline?
I have been involved in this question since the beginning, and I think the most important point is to develop the power grid interconnections, work which is already belated in Europe. Even more connections are needed to integrate renewable energy into the system, and to have a security of supply to avoid the large faults - brownouts - we had in November 2006. Short of them, energy policy goals cannot be reached. The problem is not to find the money, because interconnections are not so expensive, rather to get permission. Local governments have a strong position in building new overhead lines: replacing them with underground ones will cost ten times more. We have to upgrade the European power network and at the same time extend the interconnections beyond the EU, particularly in the East towards Russia and in the South to the Mediterranean.
(1) Directive 2009/28/EC on the promotion of the use of energy from renewable sources
(2) High-Voltage Direct Current
(3) National Office of Electricity
(4) Société Tunisienne de l’Electricité et du Gaz
(5) Electricity Transport Network in France
(6) Turkish Electricity Transmission Corporation
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