For centuries, Mediterranean countries have found countless ways to disagree -- over religion, ethnicity, colonialism and trade. But there are signs the region might yet unite in pursuit of a common goal: renewable energy.

European government and industry have been eyeing tracts of sun-drenched, vacant land in North Africa and the Middle East for some time. And now, officials and business executives are beginning to sweat out the details that could see renewable power sprouting in the desert.

Their vision is ambitious. By 2050, massive solar thermal plants, which concentrate the sun's energy using mirrors to heat steam-generating media, would sprawl across the Sahara and Middle East, feeding most of their power to their host nations. Leftover energy, meanwhile, would travel north on a new €45 billion grid to meet 15 percent of Europe's electricity needs.

The technology to build the plants exists and industry is ready, if certain political conditions are met, said Gerhard Knies, a German physicist who has become the leading advocate for the solar thermal plans, which are projected to cost hundreds of billions of euros.

"Europe should be ready to financially support clean power provided by North Africa," Knies said. Europe will need reliable, always-on electricity in the future from renewable sources, and North Africa needs investment -- a win-win for both, he said.

"This is exactly the moment for this kind of thing," said David Wheeler, a senior fellow at the nonprofit Center for Global Development in Washington. The United States is gearing up for gigawatts of investment in solar thermal in the Southwest, he noted, and the same is being seen in Rajasthan, India, and in China.

"An area the size of Austria could power the entire world," Wheeler said. "We have room to spare out there. It's simply not a limited resource."

But when it comes to the Mediterranean, the enthusiasm of optimists like Knies and Wheeler must face cold political reality.

The most prominent support for desert solar has come from the Union for the Mediterranean, a troubled alliance launched last year by the French president, Nicolas Sarkozy. Aimed at creating stronger economic ties in the region, the union announced as its premier project a Mediterranean solar plan that cribbed many ideas from Knies' proposals.

While Knies was elated for the support -- he had consulted with French officials in the winter beforehand -- he became troubled when the union came "to a grinding halt" after this winter's conflict in Gaza, which saw Israel invade the Gaza Strip in a campaign to halt rocket attacks from Hamas. The brief war resulted in up to 1,000 fatalities, mostly on the Palestinian side, and inflamed anti-Israeli sentiment across the region.

Seeking to keep momentum generated by the Union for the Mediterranean announcement, Knies approached Munich Re, a massive German insurance company that has been troubled by increased liability claims it has seen from natural disasters. Once the insurer signed on, German industry followed.

That collaboration led to the announcement last week of the Desertec Industrial Initiative, which made waves with the blue-chip names supporting it: Siemens, Deutsche Bank, ABB and others.

In its planning document, the initiative's companies make clear that if a suitable political framework exists, they are ready to invest in North Africa now.

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For any private money to flow into North Africa, certain political hurdles must be cleared, said Jens Hobohm, an energy consultant at the German firm Prognos.

"One of the obstacles obviously is that the political framework in the countries is not ready yet to adopt larger amounts of solar power," Hobohm said.

Desertec has called for a single, unified market across the region, allowing a consumer in Germany to purchase power from Algeria.

The Union for the Mediterranean remains the most likely actor to set up such a framework, Knies said, and while it does not yet have a permanent headquarters or director, the union has established working groups on how to create the regulations needed for the exchange of large flows of energy.



Over the past month, the union has gone through what amounts to a relaunch, with environmental meetings in Paris late last month and a summit in Milan this week. The Paris meetings really began movement on the solar project, said Marc Strauss, who coordinates the solar plan for France's Ministry of Ecology, Energy, Sustainable Development and the Sea.

"Now it's time to study the projects," Strauss said, adding that the plan had generated between 100 and 150 proposals.

All the Arab states attended the Paris meetings, and Egypt, in particular, has been a strong supporter. According to Egyptian officials, this is because for the first time, in a Mediterranean detente, Europeans are treating African and Middle Eastern countries as equal partners. This is best seen in the union's co-presidency, which Sarkozy and Egyptian President Hosni Mubarak share.

Also attending the Milan summit was Sweden's energy minister, Maud Olofsson. While it would at first seem odd for Sweden to attend the summit, it is an indication of the hybrid beast the Union for the Mediterranean has become.

Though the union was originally designed by Sarkozy as a "Club Med" limited to countries around the sea, many European countries, especially Germany, objected to what could become an eventual E.U. competitor. Conceding to these concerns, the union was launched with all E.U. countries as members. Sweden holds the rotating presidency of the European Union, hence its presence at Milan.

In fact, according to analysts, nuclear-powered France does not have nearly as much to gain in the energy sector from solar development in North Africa. Far more important to Sarkozy are the climate benefits and the influence a successful union could give his country.

Perhaps because the French have acted as facilitators, a virtue of the union's solar plan is that it makes clear that renewable energy will be developed in the south primarily for domestic purposes and only partly for European exports, said Houda Allal, the strategic director of OME, an umbrella organization for Mediterranean energy companies.

"This is a prerequisite," Allal said. The Mediterranean solar plan "is very clear on that. Desertec has improved itself in that area, but they're not convincing yet."

Hobohm added, "This is not a good solution if we send German or whatever companies down there and they do it all alone. We need joint ventures between European and Arabic-speaking countries."

Such large-scale investment could be a huge boon to structurally weak countries in North Africa and could also give countries like Algeria an economic path after their hydrocarbon resources flag.

At its rosiest, the solar projects might even bridge gaps among the non-E.U. countries of the region, Hobohm said. About two decades ago, Morocco, Algeria, Tunisia and Libya pledged to create an economic union, yet trade between them remains the lowest of any region in the world.

By stimulating energy trade, the Union for the Mediterranean hopes to bring about deeper dialogue. There is a model for this: The European Union evolved from a treaty in 1950 that created a common market for coal.

Funding vehicles

Solar thermal plants are already being built in Morocco, Egypt and Algeria. The problem is, Allal said, "they are taking too much time to come into force."

That highlights the remaining question for these solar dreams: money.

"We will need some kind of fixed tariff for the electricity that will be produced in Northern Africa," Hobohm said. Solar thermal plants remain expensive, costing 20 to 25 cents a kilowatt-hour of electricity produced, while gas or coal costs 4 to 5 cents.

Costs for solar thermal could eventually come down to about 10 cents a kilowatt-hour as the technology scales up, said the Center for Global Development's Wheeler, who has written an influential paper on the topic.

If carbon prices were as high as officials hoped they would be when the European Union established its carbon cap-and-trade system, solar thermal would likely already be viable. However, while the price of carbon remains low, additional stimulus will be needed, said Knies, the German physicist.

If the solar plants were built purely for domestic purposes, it would be difficult for countries like Egypt to establish feed-in tariffs, which would guarantee higher pricing rates for solar projects. Germany was able to justify the tariffs by routing the money to industry; no similar technology giants exist in Africa or the Middle East.

Hobohm would like to see a E.U.-wide feed-in tariff established that would guarantee African and Middle Eastern energy companies set rates for their electricity exports. At the least, countries with existing programs like Germany and Spain should open up their systems to importers, Knies said. Spain, so close to Morocco, is an obvious candidate.

It would be a "kind of a global justice" for Europeans to support these renewable projects, Knies said, since it was European reliance on fossil fuels that both brought the region great prosperity and exacerbated climate change.

In return, the European-spurred renewable projects could "set off a whole round of industrialization in North Africa," Wheeler said.

First in this industrialization line could be Morocco, which has an existing, if weak, electrical connection with Spain; its neighbors have no route into the European grid. Morocco's government has announced a $1 billion fund to support renewable energy and hopes to pass a law in September to create a framework for renewable cooperation.

Other funding vehicles are also being set up. Egypt's finance minister, Rachid Mohamed Rachid, has proposed an InfraMed Fund, which would be privately funded and managed, his officials say. The fund would separate financing for energy projects from the budgets of member countries, granting more year-to-year stability.

The World Bank has shown interest in North African solar thermal projects, according to Wheeler, and it is now considering whether to support a 1-gigawatt project with its clean technology fund. Such a project could cost up to $8 billion, with a possible $750 million in World Bank support. The bank is scheduled to look at the proposal in October.

The benefits of such technical assistance should not be underestimated, Hobohm said.

"Cooperation brings along an interest on both sides to stabilize the relationship," Hobohm said. "This would be a good symbol to the Islamic world. ... This is a common project. Let us do some clean business here."



Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500