US embassy cable - 05AMMAN4450

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 
--------------------------------------------- --- 
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 
--------------------------------------------- ------ 
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 
--------------------------------------------- ---------- 
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 
--------------------------------------------- ------- 
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