Can Desertec be revived by China

The Desterec Initiative was launched with much fanfare by Europe’s large industrial and energy companies in mid 2000s. It has an ambitious program to supply large parts of Europe’s energy from deserts in Africa. It was proposed that giant solar thermal power plants built in the deserts of North Africa would be transmitted to Europe, through DC high voltage transmission lines across the Mediterranean. This would greatly reduce Europe’s dependence on oil from the Middle East and gas from Russia. However, this initiative has been paralyzed after solar thermal technology fell greatly behind solar PV. Most solar thermal technology companies like Solar Millenium have gone bankrupt, while others are in a comatose state. Only 2 GW of solar thermal technology capacity is installed around the world, compared to more than 30 GW of solar PV capacity that will be installed in 2013 alone.

Read our analysis why The Desertec Inititative was doomed to Fail.

The massive investments needed to build the solar thermal power plants, the large requirements of water etc. are major hurdles in the expansion of CSP technology. Some of the major German players such as Siemens and Bosch have not only exited the Desertec Initiative, but also solar energy completely. Their operations were unable to compete with the Chinese giant solar manufacturers who have almost completely captured the solar equipment market.

It is perhaps appropriate that a Chinese entity may revive this dying initiative, given the dominant role of China in the solar industry today. Not only is China the biggest supplier of solar energy components, but will also be the world’s biggest market this year. China’s massive state grid monopoly has joined the initiative. This may revive the dying organization which saw an acrimonious split from the NGO that supported it. There are still huge hurdles in the form of capital, technology, politics that need to be overcome before Desertec can see the light of the day. There have been some solar thermal plants started in North Africa. But Desertec’s dream of supplying 20-30% of Europe’s power is far-far away. China’s state grid can play an important role in financing the state of the art DC transmission backbone from Africa to Europe. This will remove one big hurdle for solar plant developers.