Germany could pounce on green PIGS power for import …
Can the PIGS (Portugal, Greece, Italy and Spain) revive their economies through renewable energy projects? The Greek Prime Minister George Papandréou thinks so and predicts a shiny future for renewable energies. He is currently promoting investments from international companies into wind and solar power projects.
Greece has just announced a new €1.3 billion budget for the building of a PV solar plant capable of producing 450 MW. These billion-euro renewable projects occur more and more often with an “Oil & Gas” business model of exporting energy to the relevant markets.
This announcement was made only a few days after the Greek prime minister confirmed the intention of Germany to buy Greek sun power by importing electricity produced in Greece. The PIGS countries could indeed provide 1750 TWh/y of renewable electricity to Germany and Europe. This is 50 % of Europe electricity demand.
50 % of Europe electricity from green PIGS power
Germany is particularly interested into importing climate friendly electricity after its decision to progressively phase out nuclear power, which emits no or few climate gases. To import green electricity, Germany has already bet on eventually building an HVDC transmission grid to export solar power from the Sahara with the Desertec concept (see featured video on YouTube). However the Arab spring and the sovereign debt crisis could lead Germany to pounce on the PIGS’s green energy potential.
To answer to this challenge and revive its economy, Greece is already thinking about installing 20 000 hectares of solar power for a total budget of €20 billion. If this kind of initiative is pursued in the PIGS countries with all other renewable energy sources (wind, wave & tidal, biomass, geothermal, etc) it could economically provide 50 % of Europe electricity. This could generate 1.2 million jobs.
An Oil & Gas approach to Renewables
The PIGS countries could become central to the renewable energy strategy in Europe. Having an “Oil & Gas” business model of extracting renewable energy where it is cheap and abundant to export it to relevant markets where energy price is much higher may be counter-intuitive for the renewable power sector. However the Oil & Gas sector has a proven track record of managing multi-billion euros energy projects in countries where corruption, bureaucracy and sovereign debt are much more acute than in the PIGS countries.
PIGS Green Champions
One may wonder what will happen to the PIGS countries’ electricity mix and the development of local renewable technology champions? Well, when Standard Oil of California (now Chevron) went overseas to Saudi Arabia in the 1930s to secure and extract cheap oil, it did not imagine that half a century later it would have to compete with local Saudi Aramco, now the largest oil producer. Without having to go through the experience of nationalization of renewables, the PIGS countries could still follow an “Oil & Gas” scenario with the emergence of local renewable champions in the next decades. These local champions could then provide affordable renewable power to their economies and expand worldwide. Spain and Italy may already have theirs with companies like Iberdrola and Enel.