The Vision of a Globally Interconnected Renewable Energy System

By Alejandro Litovsky and Anette Bickmeyer

Over the next two decades, renewable electricity is expected to grow faster in power-hungry emerging markets where production and consumption of goods and services quickly gathers pace. Connecting renewable energy systems across national borders (first on a sub-regional scale, then moving on to continental and global scales) has had a difficult start. Here we argue that a globally interconnected renewable energy system can revitalize public-private cooperation at scale.

Thinking Across Time Zones 

Using 20 years of daily solar insolation data from NASA with 252 selected locations around the world, Wolf Grossmann, a Professor at the Wegener Center for Climate and Global Change at the University of Graz in Austria and his colleagues created a model that calculated the efficiencies of linking solar energy sites around the world. They found something remarkable: That connecting the generation and trade of solar energy hubs across different time zones and across the two hemispheres (offsetting day/night cycles and summer/winter conditions) largely solved the problems of solar energy intermittency and the need for storage. Such a global interconnection would provide a permanent harvesting of sunlight in a global energy system at very low costs.

Grossmann and his colleagues have modelled an optimal global configuration involving 60 solar energy production hubs across continents – from Brazil’s Caatinga region in the impoverished northeast to the Mongolian steppes. It is easy to imagine how this blueprint could constitute a new development paradigm in these regions, creating skilled jobs, green industrialization, and raising access to electricity as well as living standards.

A key factor of performance of these configurations is their geographic span over time zones and hemispheres. For example, the China-Mongolia configuration can produce solar electricity across four time zones. Their calculations show how significant gains are made in the reliability of solar power generation when an Australian configuration is connected to the China-Mongolia model, given that the southern hemisphere location helps offset the lower-performing winter in the northern hemisphere.

A Commodity View of Electricity is Obsolete

A shift is taking place that is best illustrated by the gloomy fate of the Desertec Industrial Initiative (Dii). This is a pioneering European-led consortium formed in 2009 to produce and export solar energy from the Sahara Desert to Europe.

The exit of most shareholders, including companies such as ABB, Siemens, E.ON and Deutsche Bank, showed a view of solar energy as a North African commodity export to Europe losing pace and withering. However, the three shareholders that remained, Acwa Power of Saudi Arabia, the State Grid Corporation of China, and RWE as the only European utility, also tell a story of positioning global interests in a business that is quickly reconfiguring.

Dii’s legacy so far includes projects with a stronger domestic focus in countries like Morocco, but also a clear lesson learned by companies that industrial-scale solar power will in the future have to put local people, green growth and development at the heart of country strategies.

In North Africa, where countries combine acute levels of youth unemployment, water stress to be worsened by climate change impacts, and dependency on diesel oil, future large solar projects will need to find ways of fostering youth ‘solar entrepreneurship,’ reducing the water dependency of certain solar power technologies and contributing to more vibrant and sustainable societies. Regional grid interconnections for excess electricity will improve the economics for investments that are focused on domestic energy consumption.

The Infrastructure Investors of the 21stCentury

It is inevitable that China’s regional infrastructure investments embrace renewable energy. China’s State Grid Corporation has remained engaged in Dii, while the Chinese government has ambitious goals for installing solar capacity at home. A likely next step for China will be to include this concept in its ‘Silk Road’ strategy.

This is China’s vision for infrastructure investment corridors backed by the Asian Infrastructure Investment Bank (AIIB). The proposed terrestrial route connects China to markets in Europe via Central Asia and Turkey. Its maritime version connects China with the Mediterranean via South Asia, ports in Tanzania, and involving Saudi Arabia and the Persian Gulf.

Combined, these routes provide the geographic and market scope for a robust economics of solar-energy interconnections – what China could brand a ‘Silk Grid’. The AIIB is the quintessential underwriter, not only to provide China with solar electricity from around the globe, but also to provide Chinese solar energy technology to a captive market. This would keep within the ancient ‘silk road’ trading route, which was not a highway, but rather a network of trading towns and cities, moving goods and connecting economies along a path of shared prosperity.

Achieving the Global Goal on Energy

By 2030, governments just agreed at the United Nations to global sustainable development goal on energy: to ensure universal access to modern energy services, increase the share of renewables and expand energy infrastructure in developing countries.

The availability of global capital that is moving to divest from fossil fuels make it the right moment for a conversation about the next phase of renewable energy, which goes beyond today’s trend of de-centralization towards a more connected, and finally globally inter-connected, scale. The rapidly evolving economics of PV and the wave to increase local PV capacity will first result in distributed electricity solutions, which then produce excess electricity that can be finally sold with a profit across borders as the electricity system becomes more and more interconnected. The principle of interconnectivity is the key to the societies of the 21st century, and like with the Internet, the global energy system will also follow that path.

Future solar energy hubs like China, Turkey, Saudi Arabia, Abu Dhabi, India, Brazil or Morocco will embrace the idea of an infrastructure and trade agreements that allows them to sell excess power from solar and other renewables to neighbouring countries and beyond.

A well-informed strategic dialogue is needed to forge new agreements between the governments of those countries where the sun shines the most, and the infrastructure companies and power utilities that are ready to back decentralized power generation models.

We have only 15 years to achieve an ambitious global goal of increasing affordable and clean energy. At last, the case is clear for a renewable energy transition that increases energy security, while creating an interconnected system that promotes sustainable development across country borders.

Lead image: Puzzle pieces. Credit: Shutterstock.

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