The Desertec Industry Initiative (Dii), an ambitious private-sector collaboration to produce15 percent of Europe’s energy needs from solar power plants in North Africa and the Middle East by 2050, continues to attract big-name investors even as sceptics question its prospects for success.

The Dii was launched in July 2009 as a limited liability company created to realize a vision conceived in 2003 by the Club of Rome’s Trans-Mediterranean Renewable Energy Cooperation [sic] and nurtured by the Desertec Foundation.

In that vision, the deserts of Africa and Arabia are not vast expanses of barren land but, in the words of Dii’s CEO Paul van Son, “landing places for energy from our big remote nuclear fusion reactor, the sun." According to Desertec, the world’s deserts receive enough energy every six hours to fuel mankind for an entire year.

Dii began with 12 founding members or shareholders. It is now up to 17 with more are on the way. German companies dominate, but its make-up now includes Swiss, Spanish, Algerian, Moroccan, Italian and French firms. There is also an associate partner category with 25 members currently.

Each shareholder agrees to make an annual contribution of €150,000 for a three-year period to give Dii time to come up with an investment strategy – a far cry from the €400 billion some news reports said Desertec planned to invest. Dii spokesperson Alexander Mohanty says the €400 billion was an independent estimate of what it would cost to accomplish similar goals.

The company insists, and outside experts agree, that technology is not an obstacle – it already exists. Desertec favors the use of concentrating solar power (CSP), a method that uses giant mirrors to focus the sun’s rays on a central collecting point, enabling solar heat to be stored cheaply and efficiently. And an undersea cable already permits electrical power to flow between Spain and Morocco, though much more capacity would be needed.

“As far as I’m concerned, the only issue is political. The technology is there,” says Ken Zweibel, director of the George Washington University Solar Institute in Washington, DC.

The more difficult task, says Mohanty, is to develop a market, favorable regulatory environment and political harmonization that support investment, not only from Dii shareholders but from others. That means determining how much energy can be generated, how much will be needed to satisfy local demand, how much will be available for export, and an appropriate pricing structure. A European subsidy may also be needed to make up for the higher cost of solar power.

Reaction from potential host countries has been mixed, in spite of the prospects for employment and investment the Dii holds out. Algeria has already indicated it will not participate, even though one of its biggest companies, Cevital, is a shareholder. Morocco has indicated it will allow Desertec to establish a reference project in the country to test market demand. However, the project still needs investors. Tunisia also appears supportive.

Sceptics remain. Jon Marks, editorial director of African Energy newsletter, points out that no European grid currently exists to distribute the power that would be generated by the Desertec initiative; Transgreen, a French consortium formed to lay a network of undersea electrical cables connecting Europe and North Africa, is still in its infancy. Nor does Europe have fully liberalized markets for electricity, Marks adds.

Other experts predict payday will be a long time coming. But if and when it does, Desertec shareholders hope for a bonanza.

IN FOCUS

In addition to the Desertec Foundation, Dii’s 12 founding members included some of Germany’s biggest financial institutions, such as Deutsche Bank, HSH Nordbank, and the insurer Munich Re, two of Germany’s largest utilities E.On and RWE, as well as leading German engineering and construction firms with interests in renewable energy, including Siemens, M&W Group, SCHOTT Solar, and MAN Solar Millennium. Other founders included the Swiss company, ABB, a leader in power and automation technologies, Spain’s ABENGOA Solar, which constructs and operates solar energy plants, and Algeria’s biggest conglomerate, Cevital.

Dii has since added five more big names to its shareholder list: Morocco’s Nareva Holding, Spain’s RED Electrica de España, Italy’s Enel Green Power, Germany’s Flagsol, and France’s Saint-Gobain Solar. More investors are on the way, one from Italy and another from Tunisia, according to Dii spokesman Alexander Mohanty. Talks are also under way with firms in Turkey and Egypt.