Desertec chooses Morocco to host showpiece project

The Desertec Industrial Initiative (DII) has selected Morocco as the location for the first of three large "reference projects" it intends to reveal by 2012.

London: DII spokesman Alexander Mohanty confirms that the project will be developed independently of the Moroccan government's plan to build 2GW of concentrating solar power (CSP) capacity by 2020.

"We've been in close negotiations in recent weeks with Masen [the Moroccan Agency for Solar Energy] and our Moroccan stakeholder Nareva Holding," he tells Recharge . "We've come to the decision that Morocco is the ideal location for our test project."

Nareva Holding is owned by ONA Group, an industrial conglomerate in effect controlled by the Moroccan royal family. It joined DII in March this year.

DII's Moroccan project will incorporate several renewable technologies, including CSPand probably some wind turbines. It will generate electricity for domestic consumption as well as for export to Europe.

Mohanty refuses to comment on previous statements made by DII chief executive Paul von Son suggesting that the first project will be in the range of 500MW to 1GW. "What we know is that all of these projects need to be pretty big, so we can really start to tap into economies of scale, and help bring the cost of renewables down sharply over the next few years," Mohanty says.

DII has given itself a three-year planning horizon, and by the end of 2012 it will announce "two or three" reference projects to pursue over the medium term. It is known to be in negotiations with the governments of Tunisia, Algeria and Egypt.

The consortium includes a variety of European industrial and financial firms that stand to gain from a massive uptake of solar energy in North Africa, including E.ON, Siemens, Abengoa, Schott, Flagsol and ABB.

Mohanty declines to comment on where the Moroccan project will be located or how much it will cost. "At this stage, we're really just talking about project origination. We're years from discussions on financial closure."

The DII board is still mulling over various public, private and hybrid ownership structures. "We're considering all the options, but have not made any [investment] decisions with our shareholders," he says.

To sweeten its chances of landing a Desertec project, the Moroccan government announced last year that it will add a third 700MW subsea power cable linking it to the Spanish grid by 2012. Morocco - the only North African country with no indigenous oil resources - is a net importer of electricity from Europe, but plans to become an exporter of green electricity over the next decade.

In January, Masen began taking construction bids for the first of five planned CSP plants it intends to have on line by 2020. The five plants are expected to cost a combined $9bn.

The government claims it received nearly 200 applications of interest for the first 500MW plant, which will be built over 33sq km near the southern town of Ouarzazate.

The bidding process is moving into a stricter pre-qualification stage, with final tenders to be submitted by November. The winner, which will sign a 20-year power-purchase agreement with the government, will be named by the end of the year.

Early last month, Morocco announced plans to spend $3.5bn on 2GW of wind capacity, as part of a target to source 42% of its energy from renewables by 2020.