Desertec solar hopes cloud over as support starts to waver

It has been one step forward, two steps back this year for the project.

It has been one step forward, two steps back this year for the Desertec solar project, which aims to source 15 per cent of Europe's electricity supply from the MENA region's deserts by 2050. A significant piece of good news for the ambitious ?400 billion (Dh1.87 trillion) scheme came in April, when one of its members, Germany's Solar Millennium, said its 150 megawatt Kuraymat project in Egypt was nearing completion and could serve as a template for other north African solar farms.

Then came the bad news with Algeria's decision last month not to participate in the Desertec Industrial Initiative, which was formally launched last year by a group of 12 European companies, mostly from Germany. On Monday, Paul van Son, the director of the group, said he was now also concerned about declining German government support for the project. "We were surprised that after the project received strong support at the beginning, it wasn't even mentioned in [Germany's] energy concept draft," he told Dow Jones on the sidelines of a renewable energy conference in Frankfurt. Mr van Son said the Desertec partners needed subsidies, possibly through feed-in tariffs, to guarantee electricity prices that would cover the generation and transmission costs.

To push the project forward, Desertec was wooing potential investors from the Middle East and north Africa, he said. "We are in intensive talks with companies in the MENA region, which we are trying to win as new shareholders," Mr van Son told Reuters, without naming any candidates. In March, the US company First Solar joined Desertec as its first member from outside Europe. Earlier that month, Mr van Son had said five companies from Morocco, Tunisia, Spain, France and Italy had agreed to join the consortium. But no confirmatory announcements have followed.

The group's other existing partners include Munich Re, Deutsche Bank, RWE, E.ON, HSH Nordbank and Siemens from Germany, the Swiss ABB, Italy's Enel, Spain's Red Electrica and the French group Saint-Gobain. Mr van Son also said on Monday that a planned Moroccan pilot project still lacked investors. "We're in the very early stages, the letter-writing stage," he told Bloomberg. In July, Desertec announced its plan for the small Moroccan solar facility as a way to test the feasibility of a large-scale concentrating solar-power project with a proposed capacity of up to 1,000mw. That would be 10 times the capacity of the US$600 million (Dh2.2bn) Shams-1 solar plant that Masdar, the Abu Dhabi Government's advanced energy company, is building in the emirate's southern desert.

Concentrating solar power, on which Desertec's attention is focused, uses arrays of parabolic mirrors to concentrate sunlight on to boilers, which produce steam to drive turbines. Critics of Desertec have said the project costs too much, would be vulnerable to sabotage in politically unstable parts of north Africa, would strain the MENA region's limited water resources, and could undermine renewable energy development in Europe.

Sceptics have also said it would be difficult to guarantee that electricity exported to Europe was sourced from solar energy rather than the growing number of coal, oil and gas-fired power plants being built in MENA countries to supply the region's expanding domestic energy needs. [e-mail]