Energy utopia and reality collide

The Sahara and Middle East have sunshine for most of the year, making them ideal for solar plants to augment Europe's energy supplies. But it would need intricate international co-ordination and that is where things turn tricky.

The solar thermal power plant in Alvarado, eastern Spain, owned by Spain's Acciona Energia, will be dwarfed by the huge Desertec project.

Desertec, a plan to help power Europe with sunlight, starts with a simple idea: put solar energy plants around the Sahara and Middle East.

The rest is complicated. Two weeks ago, the EU energy commissioner Gunther Oettinger met North African officials in Algiers to discuss integrating electricity markets. Mr Oettinger told Reuters electricity could start flowing to Europe within five years. But analysts say mustering governments and investors on both sides of the Mediterranean into large-scale co-operation presents a significant challenge for Desertec's supporters.

And key infrastructure such as solar and wind-energy plants, undersea cables and integrated power grids remains to be built. "The brilliance of Desertec has been the PR drive," says Jon Marks, the editor of African Energy magazine. "Major corporations have promoted it and governments have said they love it. But the substance to date has been extremely limited." Desertec appeared to take a baby step forward last month as the EU secured pledges of energy reforms from Morocco, Algeria and Tunisia to integrate with the European market. The three countries are former French colonies that retain strong economic and cultural ties to Europe.

"Whether the commitment we saw [last month] will be translated into projects remains to be seen," said Wolfram Lacher, a North Africa analyst at the London security and business assessment company Control Risks. There is no lack of commitment at the Desertec Foundation, a German non-profit organisation that has been the driving force behind the initiative. "From the beginning it was a vision of how to provide clean energy for the whole world without using fossil energy," said Tobias Morell, a spokesman for the foundation. "In the EU-MENA region, it has become a concrete project."

Last July, the foundation launched the Desertec Industrial Initiative (DII), a consortium of mainly German companies backing the project. The group includes big hitters such as Siemens, Deutsche Bank and RWE. It was incorporated last October in Germany and has since attracted more companies from Europe and North Africa. The DII aims to supply 15 per cent of Europe's energy needs by 2050 using renewable sources in the MENA region.

That appeals to European governments eager to reduce carbon emissions and diversify away from reliance on Russian gas, analysts say. While Desertec is meant as a primarily private-sector initiative with expected costs of about ?400 billion (Dh1.84bn), the EU has said it might contribute public funding after the DII presented a detailed business plan in 2012. Less certain, however, is whether the southern shore of the Mediterranean shares Europe's enthusiasm for Desertec.

"The Tunisian and Moroccan governments have shown themselves very interested," Mr Lacher says. "The Algerian government has been more reserved and from Libya we haven't heard anything." Tunisia has scant oil resources and Morocco has none, making renewable energies an attractive way for both countries to meet domestic demand, he says. "And if [renewables are] developed on a large scale, as proposed with Desertec, they're also a potential new source of export revenue," says Mr Lacher.

Last November, Morocco launched a US$9bn (Dh33.05bn) solar project to produce 2,000 megawatts, or 38 per cent of its installed power generation, by 2020. On Monday last week, King Mohammed VI inaugurated a wind-farm project to increase the output of wind-generated electricity to 2,000mw, also by 2020. But much of the Sahara belongs to Algeria and Libya, hydrocarbons giants with little pressing need to develop alternative energy sources.

While Algeria's Cevital company is a member of the DII and hopes to build an $8bn solar plant to export energy to Europe, the government has recently tightened rules on foreign investment and expressed worry about outside exploitation of the country's resources. Libya's leader Muammer Qadafi has often emphasised the country's role in Africa and kept it out of Euro-Mediterranean projects such as the Union for the Mediterranean.

Desertec may also risk becoming snagged on hostility between Morocco and Algeria over Western Sahara, a former Spanish colony largely annexed by Morocco in 1975 and contested by the Algerian-backed Polisario Front independence movement. While the countries trade in energy, their testy relations and land border closed since 1994 by Algeria are widely blamed for the failure of a planned North African trading bloc to get off the ground.

The immediate task for Desertec's backers is to get all potential players on the same page. "We see the main challenge in the political framework," says Mr Morell. "There are many partners that must agree on infrastructure projects, prices, taxes - everything needed to build an international energy network." [e-mail]