The ambitious, multibillion dollar solar power project Desertec has been abandoned by all but three of its shareholders and will now continue in an “adapted format” as a consultancy. The project was expected to provide up to 20 percent of Europe’s energy needs by 2050 by importing power from solar farms in North Africa and the Middle East. Despite estimates that more energy could be harvested from the desert sun in six hours than humanity could use in a year, the project’s backers have steadily withdrawn, citing high costs, a reluctance to invest in the region, and the fact that Europe seems to be doing a very good job of producing renewable energy at home, thank you very much.
On Tuesday, Desertec announced that after a recent meeting only three of its previously 19 shareholders remained with the company: Saudi Arabia’s ACWA Power IPO-ACWA.SE, Germany’s RWE and China’s State Grid. The company, “a market and project enabler that builds partnerships,” is to continue with the three shareholders in an “adapted format,” operating as “a service company in the Middle East and North Africa.” Desertec Chief Executive Paul van Son explained, “Costs were very high and some companies said we’re not that interested in the Middle East and North Africa.” Previous shareholders have included Siemens, Deutsche Bank, Bosch, E.ON, Bilfinger, Munich Re and Switzerland’s ABB.
The project was anticipated to cover an area of 6,500 square miles and deliver almost enough energy to power Germany for two years straight. However, the fraught political climate in the region, which shows no sign of abatement, combined with a budget of $506 billion have combined to turn backers off the project. Others, such as E.ON, departed stating they were going to use their resources to focus on their own projects in Europe.