x Abu Dhabi, UAETuesday 23 January 2018

DII chief calls for GCC to invest in North Africa energy

GCC countries should invest more in North African renewables to ensure political stability, says the head of Desertec.

Paul van Son, the DII chief executive, hopes to promote cross-border power exports between North Africa and the GCC. Adam Berry/dapd
Paul van Son, the DII chief executive, hopes to promote cross-border power exports between North Africa and the GCC. Adam Berry/dapd

Arabian Gulf states must invest more in North African renewable energy to boost regional political stability, said the chief executive of the Desertec Industrial Initiative (DII).

The industry coalition, previously the advocate of an ambitious vision to install solar panels and wind turbines in the Sahara that would power the developed economies in Europe, is broadening its focus to the GCC in the hope that the rich oil states can help to develop their poorer neighbours.

Recently Desertec forged an alliance with Saudi Arabia by launching Desertec Power, an academic and government group addressing water and power needs in the kingdom.

Paul van Son, the DII chief executive, also hopes to promote cross-border power exports between North Africa, where places such as Egypt enjoy stronger winds, and the GCC, with its vast solar potential.

"If there is more wind in Egypt, they could export to Saudi Arabia; if there is more solar in Saudi Arabia they could export to Egypt so it levels out," he said during a visit to Dubai.

"The GCC governments could also invest in North Africa for their own long-term use, to have a good investment for their money but also to create a politically stable climate, and to create more jobs in North Africa in the longer term so there's more prosperity."

Security concerns and shaky economies worsened by the Arab Spring have pushed aside Desertec's original vision of meeting a fifth of Europe's power needs via undersea cables connecting Libya to Italy and Morocco to Spain.

Meanwhile the financial crisis in Europe and losses for solar panel producers have led to the pullouts of Desertec backers such as Bosch and Siemens, although it has also welcomed new joiners such as First Solar from the United States.

Helping to make up for the gap are Gulf companies such as Riyadh's Acwa Power, which is to build a US$1 billion (Dh3.67bn) solar plant in Morocco, and Abu Dhabi National Energy, also known as Taqa, which aims to participate in future bids.

Mr van Son said that Desertec's core goals of creating government support for renewables and opening projects to foreign bidders remained intact.

"In the very beginning Desertec was announced as something very, very special," said Mr van Son. "The only special thing is the focus on the Sahara where nobody lives … Our focus is on creating an open market environment."

Companies that have been successful in winning solar projects in the GCC have not been immune to global headwinds.

Last week Suntech, once the world's largest solar panel maker and the top provider of panels to the GCC, defaulted on a $541 million bond, leading its Chinese subsidiary into bankruptcy proceedings.