Twelve companies, including Siemens, Munich Re and Deutsche Bank, yesterday signed a Memorandum of Understanding (MoU) in Munich to develop business plans and financing concepts for building networked solar thermal plants in North Africa and the Middle East.
The companies agree to establish by the end of October a company, called Desertec Industrial Initiative (DII), of which they will all become shareholders. DII will then analyse the technical, economic, political, social and ecological framework of generating solar (and wind) power in the Saharan desert, and piping electricity to consumers in Europe. By 2050, the companies involved hope to produce sufficient power in the region to meet 15% of Europe’s electricity demand as well as a substantial portion of the power needs of the Maghreb region.
“We are pursuing a visionary plan,” Munich Re board member Torsten Jeworrek said in a statement. “If it is successful, we will make a major contribution to combating climate change. The ecological and economic potential is huge.”
The DII consortium includes the Swiss ABB, the world’s largest builder of electricity grids. Besides legal and political issues, the transmission of power from the Sahara across the Mediterranean Sea to European population centres is considered a main hurdle to the project.
The Desertec project, a brainchild of the so-named foundation and the Club of Rome, made news last month when plans had leaked that German companies intended to invest up to €400 billion in a 100 gigawatt solar utility in Northern Africa.
Signatories of yesterday’s MoU did not confirm these figures.
Finance experts are not convinced that the project will attract sufficient private and public investment. “So far, this is nothing more than political lobbying in my view,” Reuters quotes an equity analyst as saying.
Posted by Quirin Schiermeier
Image: Torsten Jeworrek (Munich Re Group)