German blue chip firms throw weight behind north African solar project

Siemens, Deutsche Bank, RWE and E.on ready to invest in ambitious plan to power Europe with clean electricity from Africa

Kate Connolly in Berlin
guardian.co.uk, Tuesday 16 June 2009 18.16 BST

Twenty blue chip German companies are pooling their resources with the aim of harnessing solar power in the deserts of north Africa and transporting the clean electricity to Europe.
The businesses, which include some of the biggest names in European energy, finance and manufacturing, will form a consortium next month. If successful, the highly ambitious plan could see Europe fuelled by solar energy within a decade.
The consortium behind what would be the biggest ever solar energy initiative will first raise awareness and interest among other investors for the project, known as Desertec, which is estimated to cost around €400bn (£338bn).
Torsten Jeworrek, board member of Munich Re, the German reinsurer which is leading the project, said: "We want to found an initiative which over the next two to three years will put concrete measures on the table."
Like other reinsurers, Munich Re has said it is expecting to face mounting claims in the coming years for damage caused by climate change.
The companies – including Siemens, Deutsche Bank, and the energy companies RWE and E.on – will meet on July 13 in Munich to draw up an agreement. German government ministries as well as the Club of Rome, a Zurich-based NGO of leading scientists, managers and politicians which advocates sustainable development, are also expected to be present.
It is seen as particularly significant that the companies aim to start the expensive initiative in the midst of a financial crisis. But although none of the companies is keen to go into detail yet about their involvement, they stress that the project is a chance for them to drive forward the fight against climate change and in doing so to position themselves at the top of the green technology industry. Germany, despite its relative lack of sun, has become a leader in solar energy.
The energy potential in the deserts south of the Mediterranean is enormous.
According to the European Commission's Institute for Energy, if just 0.3% of the light falling on the Sahara and Middle Eastern deserts was captured, it could provide all of Europe's energy needs.
The Desertec project aims to build solar power plants in several locations in north Africa. Jeworrek said the "most important criteria" was that the locations were "situated in politically stable lands". Morocco, as well as Libya and Algeria have been cited as potential sites, where land is also cheap.
The technique called "concentrating solar power" or CSP, uses banks of mirrors to focus the sun's rays in a central column filled with water. The rays heat the water, vaporising the it into a steam which is then used to drive turbines which generate carbon-free electricity.
The energy would then be fed via high-voltage direct current (DC) transmission lines over thousands of miles to Europe - traditional AC lines are far too inefficient.
Hans Muller-Steinhagen of Germany's Aerospace Centre, said it was technically possible, albeit expensive, to transport the energy over thousands of miles. He said solar energy from the desert is already being harvested but only in isolated plants. CSP plants are operational in the American west, including in California and Nevada, while independent plants are currently being set up in Spain, Morocco, Algeria and the United Arab Emirates. But the projects have suffered from investors' nervousness due of the vast expense of the required grid infrastructure, as well as the cheapness of fossil fuels.
German representatives of environmental groups yesterday widely welcomed the news that big businesses were prepared to give the project a backbone for the first time.
"Businesses have finally recognised that renewable energies belong to the future, and in times of economic crisis this also sends out an important signal for economic growth," said Andree Bohling of Greenpeace.
WWF Germany's climate expert Regine Gunther said while the initiative was a "step in the right direction", it was important to ensure that Africa benefited from the project. "They want to and indeed must profit from this solution as much as us," she said. Previous suggestions have included allowing host countries to retain a proportion of the electricity for free, in return for providing sites for the solar farms.
The €400bn investment would be enough to cover 15% of Europe's electricity requirements, according to Jeworrek. He added "in technical terms this project can be realised" but stressed in order for it to be sustainable it would have to finance itself in the long-run and be competitive within 10 to 15 years.
But German MP Hermann Scheer, president of Eurosolar, the European Association for Renewable Energy, called the Desertec project "highly problematic".
He said costs would be vastly higher and deadlines would be missed due to logistical problems such as sand storms and dealing with many different countries. "I would urge the investors to stay clear of it," he told The Guardian.
Scheer was also critical of the fact that the project would "duplicate the current system" whereby energy distribution is concentrated in the hands of a few multinational companies. "We should be looking instead at decentralising the system, and looking closer to home for our energy supplies, such as solar panels on homes or harnessing wind energy on the coasts, or inland," he said.