IN DEPTH: Desertec's second wind

The slow-motion dismantling of the visionary 100GW Desertec solar mega-development looked to have stunted the Middle East and North Africa (Mena) region’s industrial renewables build-out just as it was gathering pace.

The $550bn Sahara-spanning concentrating solar power (CSP) project was launched in 2009 with the aim of delivering 15% of Europe’s energy supply by mid-century, but it fell apart as German consortium members dropped out one by one.

However, the sands are shifting for the region and the “revalidated” 37-member group now spearheading the scheme, Munich-based DII (Desertec Industrial Initiative), which is positioning itself with a far grander ambition. It aims to shepherd the construction of more than 37GW of wind and solar in 15 Mena countries this decade that should spur the development of hundreds of gigawatts to come.

“We are more about the area itself [than any one major development] now,” says chief executive Paul van Son. “We see that a very large number of projects, after many years of preparation and waiting for this market, are going to happen.”

According to DII’s figures, Mena’s renewables capacity, which has experienced a 30% compound annual growth rate since 2000, is on track to double to more than 8GW by the end of next year. Wind alone is expected to add 20GW by 2020.

“On the political level, five years ago there was little awareness and not much support for renewable energy, to the extent that some Mena countries said: ‘We don’t need it. We have oil and gas’. Only Morocco, Algeria and a few others were systematically making plans for renewables,” van Son stresses.

“Now there is not a single one that does not have renewables in their national energy strategy. There are positive signals everywhere. This is all about to take off.” He points to Morocco, “currently far ahead of the others”; Egypt, where renewables have become “priority number one”; and Saudi Arabia, with its $110bn plan for 50GW of renewables.

Mena needs new energy. Electricity demand is climbing at 6-8% a year, driven by growing populations with an ever-greater appetite for appliances such as air-conditioners and desalination units.

And the fossil-fuel-generated electricity used by Mena countries isn’t keeping pace with that demand. Not in oil-rich Saudia Arabia, where the net export of crude to generate electricity in 2010 exceeded four terawatt hours (TWh), nor in hydrocarbon-poor Morocco, which imported 73TWh that year.

Saudia Arabia is unrolling plans to install more than 40GW of solar by 2030; Morocco wants to see 42% of its power flowing from renewables ten years earlier. Jordan, long dependent on the on-off flow of Egyptian gas, inked 12 power-purchase agreements with renewables developers adding up to 200MW this year.

“Wind is in a dominant position at the moment, driven by [per MWh] price and attractive wind conditions in countries like Morocco and Egypt, but we are going to see more and more solar coming on, mainly CSP, as in Algeria. And now the third [technology] is PV, which is getting an increasingly prominent place in Mena because of simplicity, modularity and price,” says van Son.

This energy transition is not solely about installing turbines and panels. Technical and commercial hurdles are being overcome, but in the longer term regulatory conditions need to be retailored for the renewables market after decades of oil-centrism.

“Even countries like Egypt, Tunisia, Morocco that are importing fossil fuels are subsidising it for their own domestic consumption — it is utterly unsustainable,” says van Son. “We see a pan-Arabic movement of developing projects and financing projects, and we see ourselves having a hand in helping [these organisations] in accelerating development of these projects.”

Time is marching on. The region’s population is forecast to swell by up to 45% by 2050, with power demand exceeding eight petawatt hours for its projected 1.2 billion citizens. So it is in the interest of all concerned to move away from volatile fossil-fuel markets towards a sustainable system.

For Mena, renewables represent affordable, stable electricity supply to boost domestic economic growth, exports worth up to €63bn annually, and the creation of up to one million job-years by 2050.

But beyond that lies a much larger prize. For Europe to meet its mid-century CO2 reduction targets, 20% of electricity could be sourced from Mena at a cut-price €30 ($41) per MWh more cheaply than today, re-energising DII’s original mission of heading up a Mena-based energy revolution.