Europe's African Solar Project Moves Forward

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Researched by Industrial Info Resources (Sugar Land, Texas)--Plans to harness the solar power of the Saharan desert took a decisive step forward this week when 12 of Europe's largest blue chip companies signed up to participate in the world's most ambitious solar energy project. The Desertec project, unveiled last month, aims to build massive solar thermal power plants across the North African desert and then transport the electricity to Europe, where it will eventually supply up to15% of the total power demand. About 80% of the power produced will be used by the countries in which the solar farms are located. For additional information, see related news item from June 19, 2009 - European Companies Plan $550 Billion Solar Project in Sahara Desert.

The overall project will cost a staggering 400 billion euros ($550 billion) and will cover 6,000 square kilometres, divided into 2,500 square kilometres for power plants, with the remaining 3,500 square kilometres allocated for the distribution grid. Around 350 billion euros will be used to build the solar plants, with the remaining 50 billion euros to be spent on installing the transmission lines. The European Union has pledged 1 billion euros in support.

The group making up the Desertec Industrial Initiative (DII) includes a mix of finance, investment and power companies such as Munich Re Group (Munich, Germany), RWE AG (OTC:RWEOY) (Essen, Germany), Siemens AG (NYSE:SI) (Munich), E.ON AG (OTC:EONGY) (Dusseldorf, Germany), and Deutsche Bank (Frankfurt am Main, Germany). The DII group will become a limited liability company under German law at the end of October and will invite other partners to join.

Dr. Hervé Touati, Managing Director of E.ON Climate & Renewables said, "E.ON is convinced that the future belongs to solar technology in the long term. We share the Desertec vision of exploiting the sun's energy on a grand scale to supply power to Europe and the African countries. We are supporting the initiative with a view to making this great idea possible."

Prince Hassan bin Talal of Jordan added, "The partnerships that will be formed across the regions as a result of the Desertec project will open a new chapter in relations between the people of the European Union, West Asia and North Africa."

The project has divided energy and investment experts. Detractors claim that solar technology is too expensive and that the cost of creating such a massive solar facility and the cabling needed to transfer power to Europe would be better spent on other renewable energy technologies. They also claim relying on so much power from North Africa would undermine the security of European energy. Others have hailed the plan as visionary, arguing that solar power technology is falling in cost and that the long-term benefits are immense.

"Beyond the major impact of Desertec itself, the project is set to spur a new wave of other solar power plants and projects," commented Henning Wicht, Senior Director and Principal Analyst for Photovoltaics at market researcher iSuppli. "Desertec represents a number of milestones in the history of the solar business. For one, it marks the first time that private companies will invest in a long-term renewable-energy endeavour of such vast size. Furthermore, leading companies have never undertaken such major risks to invest in a relatively new technology amid an uncertain political environment and missing infrastructure. Finally, insurance companies traditionally have been risk-averse investors. The participation of Munich Re provides priceless value and credibility for future renewable-energy projects."

IIR's Renewable Energy Database provides extensive coverage on the Wind Energy, Geothermal, Hydroelectric, Landfill Gas-to-Energy and Utility-Scale Solar power plants throughout North America, and now expanding coverage across the world.

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