Twelve companies, including German energy giants RWE and E.ON, launched the Desertec Industrial Initiative (DII) on 13 July to find financing for the project, which will bring solar thermal power from North Africa to Europe via a high-voltage cable.
A planning commission will be established by the end of October, with a view to drafting viable financing plans for the €400 billion project in the following three years. The EU would initially provide €1 billion for the project, Germany's Deputy Foreign Minister Guenter Gloser told reporters, according to Reuters.
The Desertec concept was elaborated by the Club of Rome's Trans-Mediterranean Renewable Energy Cooperation (TREC) network. The plan has created a political buzz in Germany, but also found allies with European Commission President José Manuel Barroso and French President Nicholas Sarkozy.
The consortium envisages that 15% of Europe's electricity needs will eventually be provided by electricity generated in the African desert using concentrating solar power (CSP) technology. CSP involves erecting hundreds of giant mirrors which focus sun rays on a receiver containing a liquid like oil, in turn producing steam to drive a turbine.
The idea behind the Desertec project is to enhance Europe's energy security, while contributing to the EU's climate goals by reducing CO2 emissions. Solar power is one of the greatest untapped sources of power, as it is both abundant and carbon-free. Scientists say that covering 3% of the surface of the Sahara with solar power plants would generate enough energy to meet the needs of the entire world.
According to studies by the German Aerospace Center (DLR), solar thermal power plants could produce more than half of Europe, the Middle East and North Africa's electricity needs within 40 years. Supporters of the scheme believe it could deliver energy to Europe within the next decade.
High price tag
But power companies, although keen to join the initiative, point to the long-term horizons for a project of this scale. Moreover, critics argue that as technology develops, generating solar power by directly installing panels on the rooftops of European homes will become cheaper and more efficient, begging the question as to whether imported, centrally-produced solar electricity is the cheapest option.
Indeed, the price of solar thermal electricity remains one of the key barriers to large-scale production, as it is still several times more expensive than fossil fuel. However, solar prices continue to fall as a result of technology improvements and growing volumes, while fossil fuels are expected to become significantly more expensive.
The EU's climate policy will to some extent boost the demand for solar, as the new Renewables Directive sets national targets for the share of renewables to reach an overall 20% in the EU's energy mix by 2020. This means that as much as 34% of electricity would have to be supplied by renewables.
Desertec has been slated as modern-day eco-colonialism, whereby Europeans outsource their energy needs to poor African countries, leaving little else but pollution behind.
The project's backers, however, have a response ready to combat the claims. They cite the creation of local jobs and export earnings as well as inexpensive electricity and the use of extra energy to desalinate sea water.
Nevertheless, the fact that the electric transmission lines cross numerous international borders in politically unstable countries has led some to argue against energy security. Pessimists claim that Europe would face the same dilemma of energy dependence on third countries with imported solar power as it does with oil.