Blue sky thinking?

Utilities Middle East assesses the pros and cons behind the landmark Desertec initiative.

The month of July saw the signing of what could turn out to be a game-changing document for the renewable energy industry. Led by Germany, around a dozen companies launched the Desertec Industrial Initiative (DII), which aims to harness the solar power focused on the Sahara desert to supply around 15% of Europe’s electricity needs.

This is no small affair, especially with estimates as to the cost of such a vast project until 2050 weighing in at around the US $557 billion mark. Compare this to the highest estimated figures as to the cost of the International Space Station, at $143 billion (according to the European Space Agency) and it immediately becomes clear why so many eyebrows are being raised worldwide.

“The partnerships that will be formed across the regions as a result of the Desertec project will open a new chapter in relations between the people of the European Union, West Asia and North Africa,” announced Jordan’s HRH Prince Hassan bin Talal, a key supporter of the initiative.

The plan involves the construction of a huge network of solar thermal power plants, which will pump electricity via HVDC cables under the Mediterranean to Europe. Given the size of the grandiose vision, it should be remembered that plans are in the earliest stages, with a three-year study outlining how DII will work now in the offing.

Along with the bumper cost of the project, some suitably high-profile names have added their weight to the idea, with both German Chancellor Angela Merkel and EU Commission President Jose Manuel Barroso strongly praising the plan. On the commercial side, some of the largest power generation firms in the world have also signed up to the concept, including ABB, E.ON, Schott Solar and Siemens.

“ABB has developed High Voltage Direct Current transmission technology to connect power grids and utilise renewable energies. Climate protection needs innovative technologies,” said Dr Joachim Schneider, a member of ABB’s board of management.

Already, however, it’s also clear that there are a number of obstacles – and not just from the technology perspective - that the DII consortium will have to overcome if the vision is to become reality. From the geopolitical perspective, the project relies on the goodwill of a large number of MENA countries that will have to work in tandem.

“While it might represent a new generation of thinking about the grand changes to Europe’s energy usage that are necessary to safeguard future economic growth possibilities, its main weakness might be that it might struggle to work in the Middle Eastern and North African setting of strong state control, large subsidies, and spiralling domestic demand,” said Samuel Ciszuk, IHS Global Insight’s MENA energy analyst.

A further criticism has been the rapidly rising power requirements of countries in the Middle East region, which are struggling to maintain capacity for their own populations, let alone the ability to transport excess electricity to Europe.

“The project is attractive to many in Europe as a means to shift dependence away from volatile oil and gas prices, and countries such as Russia and those in the Gulf,” highlighted a recent report from UK consultancy Business Monitor International (BMI).

Desertec seems like a plan that has benefits for all the stakeholders, and it just might herald a sustainable new dawn for energy supply. While the criticisms are many, however, the DII members should be applauded for their efforts in bringing the project to fruition. With a $250 million budget already in place as research grinds into action, it will be fascinating to see how plans for this project develop in the next three years.

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