Solar energy emerges as a genuine alternative

• Last Updated: January 21. 2009 9:09PM UAE / January 21. 2009 5:09PM GMT

Karel van de Graaf, the director of corporate communications at E Concern, is optimistic about the growth of solar energy. Sammy Dallal / The National

Solar power is growing much faster than official institutions and the public think, experts in the alternative energy field say.

Long dismissed as a peripheral contributor to the world’s energy matrix, technologies harnessing the sun’s energy are now benefitting from billions of dollars of investment, which has rapidly increased their efficiency and cut their costs.

“There is a quiet solar revolution going on. It doesn’t come out of the blue, it comes from years of people working on it,” Karel van de Graaf, the director of corporate communications for the Dutch renewables firm, E Concern, told the World Future Energy Summit in the capital. “It isn’t that spectacular. Other industries have shown the same progress ratio.”

Estimates by the International Energy Agency (IEA) suggest photovoltaic solar energy capacity will not reach an annual growth rate of 10 gigawatts until 2020, but Mr van de Graaf expects this increase to be achieved this year, more than a decade ahead of the official estimate.

The rapid advance of solar technologies coincides with a US$15 billion (Dh55.1bn) investment plan by Masdar, Abu Dhabi’s green energy initiative, and a new policy requiring renewable energy to make up at least 7 per cent of power generating capacity in the UAE by 2020.

The IEA’s estimates for total photovoltaic capacity in 2006, 2015 and 2020 work out to growth of about 3gw per year to 2015, rising to a rate of 10gw annually by 2020, said Kees van der Leun, another senior E Concern executive.

But Mr van der Leun said the forecast failed to take account of accelerating progress. “I keep reminding people, this is not 30 per cent, it’s 40, 45 per cent growth,” he said. “The attractiveness of solar is growing dramatically this year.”

E Concern’s optimism was echoed by executives from other firms, which brought their latest solar technologies to the summit to convince investors to provide the capital for ramping up to industrial-scale production levels.

The price of photovoltaic solar panels, which convert sunlight directly into electricity, is kept high by two main factors: the cost of raw materials and the relatively small scale of production capacity.

The cost of raw materials should fall this year, but the industry will continue facing difficulty in increasing production to the levels needed by the world economy, said Michael Liebreich, the chairman and chief executive of New Energy Finance, which serves as a research group and clearing house for data on the economics of clean energy.

Raw material costs would fall as the price of silicon decreased and more companies switched to producing panels from thin-film materials, he said.

“It’s still more expensive than fossil fuel, but it’s been kept artificially high for the last three years by shortage,” he said of the silicon price. “The era of 30 to 40 US cents per kilowatt-hour, that’s over, and new projects will be able to produce power at 20 cents per kilowatt-hour.”

Roberto de Diego, the European president of SolFocus, a US company developing concentrated solar photovoltaics, said the cost of producing power from his panels would drop by about half, to parity with conventional electricity, within the next three years.

“There are two main factors,” he said. “One is the automated and robotic manufacturing we are implementing this year. The second is the production of cells which will improve in efficiency by two percentage points per year for the next three years.”

His company expects to increase production of the panels, which use mirrors to multiply the power of the sun 500 times, by tenfold to 100 megawatts by the end of this year. Mr Liebreich said many other companies were struggling to achieve such economies of scale. “In the shorter term, we are actually pretty sceptical about some of the approaches, because it’s just so hard to get to scales we need,” he said. “Scale-up of this stuff is not trivial.”

But executives were right to be optimistic about the industry’s expansion as a whole, he added. “I suspect that E Concern is more right than the IEA. The IEA is historically extremely conservative... probably with good reason. It’s enormously under-rated by the wider population the extent to which we can actually get ourselves off fossil fuel.”

In part out of disappointment with what they see as the IEA’s inattention to renewables, 40 countries, including the UAE, are scheduled to meet in Bonn, Germany, on Monday to create an international organisation that will offer greater information on renewable energy and help member states co-ordinate policies.

The organisation, The International Agency for Renewable Energies, is due to begin operations this year and, the Government hopes, will establish its headquarters in Masdar City, the zero-carbon city at the edge of the capital.



cstanton@thenational.ae