Desertec consortium dissolves, morphs into service company

While most of the shareholders of the Desertec Industrial Initiative (Dii) have withdrawn from the group, a smaller version of the company is set to continue, albeit in a more modest role than the once ambitious consortium envisioned.

Desertec launched in 2009 with the aim of generating and transmitting solar and wind energy from North Africa and the Middle East to Europe as of 2020 and providing up to 15% of Europe’s power by 2050 at a cost of some €400 billion ($507 billion). Yet political instability in the region and conflicting goals among initial Desertec partners hampered the initiative’s development.

According to German newspaper Sueddeutsche Zeitung, Dii’s 17 shareholders, including leading players such as ABB, Abengoa Solar, Enel Green Power, First Solar and SMA, have decided to end the consortium in its current form, with most shareholders withdrawing completely from the enterprise. Dii’s Munich office is also set to close this year.

However, at a meeting in Rome on Monday to discuss the future of the company, Dii’s remaining three shareholders — ACWA Power from Saudi Arabia, Germany’s RWE and the State Grid Corporation of China (SGCC) — decided to continue Dii as a service provider and consulting firm focused on the MENA region.

Falling back on its successful awareness building, networking and market analyses, the new Dii will now focus on providing services primarily to its shareholders, facilitating and supporting concrete project activities in the Middle East and North Africa as a service company.

"When Dii started five years ago, renewable energy played only a minor role in the Middle East and North Africa," said outgoing Dii CEO Paul van Son. "This is completely different today. Around 70 projects have now been implemented or are under construction. During these five years Dii has helped by conducting fundamental studies, developing country specific strategies. This phase is now complete and we are adapting to new requirements."

Dii said development of renewable energy is progressing in the region. From Morocco to the Arabian Peninsula, the expansion of renewable energy has been gaining momentum and it is slowly becoming a driver for positive economic development in the region, the company added. Dii has focused most of its recent activities on Morocco, Saudi Arabia, Egypt and Turkey.

35 GW of renewable energy projects by 2020

Dii points out that the region’s renewable energy project volume has grown from about 70 MW in 2000 to 3 GW in 2014. For 2020, Dii expects 35 GW. For the entire region, Dii has identified a volume of 800 GW at suitable locations close to demand centers with access to infrastructure.

The company adds that "regional electricity demand will quadruple in the next few decades until 2050 by strong population growth and economic development up to over 2,300 terawatt hours."

Indeed, the lofty vision of generating renewable energy in the Middle East and North Africa for consumption in Europe appears to have been replaced by the more modest plan of producing green power in the region for the region.