Tunisia's $2 Billion CSP Export Project Waits on U.K. Contract Approval

Written by Richard Finlayson, Senior International Editor or Industrial Info Resources (Sugar Land, Texas)--Tunisia's TuNur project is being designed to transmit 2,000 megawatts (MW) of concentrated solar power (CSP) to the U.K. if Nur Energie (London, England) wins a contract for difference (CFD) from the British government. A CFD stipulates that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time. If the difference is negative, the buyer will pay to the seller.

Investors are seeking funding from the U.K. government for an ambitious plan that would power 2.5 million homes by 2018.

The company says that it already has spent $16 million on developing the site for the $2 billion-plus project. Three years of solar data has been gathered from the site, which the company says has been independently verified.

The Tunisian parliament has passed legislation to facilitate exports of the energy, and an agreement has been reached with the Italian network operator to connect a dedicated undersea cable to a substation near Rome.

In terms of risk, the company says it is working with some of the largest engineering firms in the world and that there is "nothing new" about moving energy to Europe from North Africa. Existing gas pipelines from Algeria have operated without a glitch through the turbulence that followed the Arab Spring.

Under new rules published by the U.K. Department for Energy and Climate Change (DECC), the government will allow developers of renewable energy projects that are not based in the U.K. to bid for contracts that guarantee subsidies to supply power.

The project will use sunlight focused on a central tower that allows the developers to store some of the energy generated so that supply is "dispatchable" and can be switched on or off on demand.

"In order to reduce costs for British consumers, any future non-U.K. would need to compete on cost effectiveness with projects in the U.K. before being allocated a CFD," DECC said.

The U.K.-based solar power industry views the project negatively, as it has been hurt by government cutbacks of an existing subsidy, the Renewables Obligation.

The German-initiated $640 billion Desertec project, which aimed to provide 15% of Europe's energy from North African-sourced renewables by 2050, has dwindled over a period of years, with major companies such a Siemens and Bosch withdrawing support. TuNur also withdrew support from the scheme.

For more information, see November 22, 2012, article - Clouds Gather over Desertec Solar Alliance.

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