Despite the recent controversy between the DESERTEC Foundation and Dii, Dii Managing Director Paul van Son remains upbeat in an interview with SETIS.

Dii Managing Director

Has the withdrawal of the DESERTEC Foundation from Dii resulted in a revision of the Desert Power project’s time frame, and when can solar power from the MENA region be realistically expected to be supplied into the European grid?

The DESERTEC Foundation is an NGO, which wishes to act neutrally. The Foundation gave its share back to Dii. Dii respects that decision. This development will have no impact on Dii’s goals, strategy or activities, as these have never be determined by the Foundation. We will continue to work with all engaged NGOs towards the creation of a market for desert power in Europe, North Africa and the Middle East.

How important has the Union for the Mediterranean been in creating the necessary regulatory and organizational environment for the Desert Power project to be implemented?

The Union for the Mediterranean is currently preparing the Master Plan of the Mediterranean Solar Plan to be adopted by the Energy Ministers of Europe and MENA at the UfM Ministerial Meeting in December 2013.

The Master Plan analyses the necessary steps to facilitate the deployment of an additional 20 GW of renewable energy capacities by 2020. It thus serves as a basis for developing further the regulatory framework for renewable energies in the EU and the Southern Mediterranean.

Dii’s strategy report “Desert Power: Getting Started” represents the industry perspective on the MSP Master Plan and complements it with actionable recommendations regarding grid expansion, renewables cooperation between the EU and the MENA region (EUMENA) and financing of renewables.

Solar energy is expected to play a significant role in meeting the EU’s renewable energy targets. How much of a contribution will the Dii Desert Power project make to this common effort?

First of all our analyses show that wind energy, also from the deserts, will constitute the main renewable energy source in Europe, North Arica and the Middle East in the coming decades. Renewable energy generated in the desert will of course primarily serve the region itself as fossil fuels should be replaced by renewable energy locally. The MENA countries that have no fossil fuel resources can save the money that they currently have to spend on the global market. Oil and gas producing countries will use their petro revenues to invest in renewable energy, thus increasing their oil and gas export revenues. Over time, and in particular from 2020 onwards, more and more desert electrical power is expected to be offered competitively to the European market. Dii has calculated that by 2030, 120TWh of electricity could be exchanged between Europe and MENA. This is three times the volume imported annually by Italy, Europe’s largest energy importer. According to our prognosis, desert power can supply 10-20% of the European Energy mix by 2050.

What are the main challenges facing the project, and what actions are required to deal with these challenges?

The main challenge is to develop an open and transparent interconnected market environment in EUMENA in which the conditions for renewables are fair. The extension of (intercontinental) transmission capacity is a real challenge due to different regulatory hurdles. To guarantee the free cross-border trade of electricity and establish an economically viable business case which is attractive to investors in the medium term, politicians and governments of the respective countries have got to work towards a reliable framework. Dii has presented the relevant restraints and outlined potential solutions in its latest report “Getting Started”.

Is the current level of R&D in the sector sufficient for the project to be implemented on a technical level, or is further work required? What are the main technical difficulties to be overcome?

During the last few years most wind, solar and transmission technologies have shown considerable learning curves in terms of cost and efficiency. Already today solar and wind power plants at many sites in the MENA region can generate power on a competitive basis compared to simple oil- and gas-fired power plants. Dii would welcome additional R&D work to further improve real market integration and competitiveness of the plants in the MENA region. This includes advanced system designs for solar thermal power plants and reliability of solar and wind technologies under harsh MENA desert conditions. Dii is convinced that the drive of the industry to deliver competitive technology to a fair market will eventually lead to sustained success. However this implies that subsidies for fossil and nuclear based generation, for example, shall be terminated. Existing renewable power plants in the MENA region demonstrate that technological challenges are not a real obstacle for desert power. First and foremost investors need political investment security in a healthy market environment.

Is the legal, economic, regulatory and institutional framework for the project already in place, or is further work required in this area?

In the last four years we have observed considerable progress in MENA countries in the area of strategy and conditions for renewable energy. Prominent examples are the 110 billion dollar investment plan of the Saudi Government and ambitious solar and wind plans in Algeria, Tunisia and Morocco. Dii has identified the most important short-term steps for supplying the entire EUMENA region with renewable energies which would lay the foundation for a supergrid throughout EUMENA, comprising production facilities in the best locations that can deliver power where it is needed.

Is the desire for renewables in the European Union matched by political will in the MENA region to implement the project?

MENA countries have adopted renewable energy targets for 2020 totalling approx. 50 GW. This is ambitious, but it is the wish of the region itself! There are plenty of suitable locations, and in fact there is a potential for more than 800 GW of wind and solar installations across an area of 40 000 square kilometres.

Many countries in North Africa and the Middle East find themselves in a phase of political transition which is currently dominating their daily lives. The total population is growing dramatically; meanwhile, the demand for power in these countries is rising at an annual rate of 5 - 9 %. This is a problem that requires rapid solutions, since an energy deficit would only further complicate the situation unnecessarily. Renewables will offer effective solutions to the pressing economic problems. This has long been recognised by the nations in question, who are already taking action to this end. A good example is the desert power project, Ouarzazate I, where a solar thermal power plant is being constructed as part of Morocco’s solar energy plan. Morocco chose to pursue this path with Dii as a partner, who provided the Moroccan Agency for Solar Energy (MASEN) with solid support. Similarly the 2000 MW wind plans of Morocco are advancing very well.

Model calculations by Dii also reveal that complete reliance on renewable energies will be less costly to the entire EUMENA region if countries work together instead of switching to renewable energy sources individually. The sooner countries start working together and the more countries that do so, the more stable and more affordable the transition to sustainable energy supplies will become. Analysis has also shown that the exchange of substantial quantities of power between countries is also economically advantageous.

Furthermore Desert Power has the potential not only to create local jobs in the MENA region and support economic growth, but also to stabilise the Eurozone. Closer cooperation with MENA can therefore be beneficial, especially to nations in Southern Europe.