Desertec Plan for European Solar Power Unlikely to Materialize

(MoneyWatch)  Desertec, a European project that wants to spend $550 billion to build a series solar plants in northern Africa, can claim to be progressing. Five new companies joined the project's partnership over the past week: most significantly, the American thin-film solar maker First Solar, but also Enel, Red Electrica and Nareva, which are all in the energy business, and Saint Gobain, a construction company.

The project is a big idea, intended to eventually supply up to 20 percent of Europe's energy needs. Giant solar farms in the African desert would collect energy during the day and, potentially, store it in molten salt reservoirs overnight; reams of cable would transmit the power across the Mediterranean. But how likely is Desertec to actually happen?

Perhaps not very. Last week, before Desertec's new partnerships were announced, a prominent cleantech analyst at New Energy Finance spoke out against Desertec. "I can almost guarantee that Desertec as it's currently described will not happen," said Michael Liebreich, who is CEO of the Bloomberg-owned research firm.

Liebrich points out that Europe is already dependent on outside sources for much of its energy; adding north Africa to the mix would only add another vulnerability. The power transmission lines, in particular, could easily be attacked.

Another doubter is Lars Josefsson, the head of German energy giant Vattenfall. Last year, I wrote about Josefsson's criticisms of Desertec's cost and potential security issues, and the influential CEO has not changed his mind since. When it comes to an Josefsson, an opinion is more than an opinion; his company has the ear of the German government, which is in turn a disproportionately powerful member of the EU.

And before long, human rights activists may also be getting involved. Afrol, an African news source, reports that Desertec may be considering Western Sahara for part of the project. That's not just a region, it's a nation whose sovereignty has long been disputed by Morroco, which would have to fight Western Sahara's independent-minded inhabitants for any proceeds from Desertec. Planning to build in the region is probably a bad idea, no matter how sunny it gets.

There is one clear reason that companies like First Solar may want to add their name to Desertec's roll, though. In the unlikely event that it goes ahead, they'll have an advantage. But in the more realistic scenario of the project fizzling out, they still get the advantage of great PR, not to mention closer relations with government planners. Even wishful thinking can have real benefits.