Governments around the world encourage the private sector to participate in renewable energy schemes. Because the projects are often not economical to build and operate, governments have to offer incentives to investors by setting targets for the amount of wind or solar energy their country uses, and offer tariffs that ensure developers are paid above market rates for the power they supply.
But in the case of the Desertec initiative, which aims to provide 15 per cent of Europe’s power demand by 2050 from renewable energy projects in the Middle East and North Africa, the private sector is leading the way. Desertec is led by a group scientists, politicians and renewable energy experts and is approaching governments to support its projects. The political challenge Desertec faces is significant.
European concerns over energy security, heightened by Russia’s decision last winter to cut gas supplies to the Ukraine, may prevent EU countries from considering, say, Algeria as a reliable, long-term provider of electricity. But the EU has set itself the target of sourcing 20 per cent of its electricity from renewables by 2020 and this needs to come from somewhere.
North African governments have yet to confirm whether they will host Desertec plants. To bring them on board, Desertec must demonstrate that the plants will benefit the economies of the countries where they are built, as well as the investors themselves.
While most of the power generated from the projects will be -destined for Europe, some will supply local markets, and that will help convince North African governments of their merit.
Desertec’s backers say the scheme will create jobs and boost local economies. Some go so far as to claim it could even reduce the number of economic migrants to Europe. Governments on both continents will need to collaborate to define a regulatory and legislative framework for the scheme. If Desertec can overcome these hurdles, it will set a precedent for international energy co-operation.