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PP RUEHAG RUEHAST RUEHBC RUEHDE RUEHDF RUEHDH RUEHHM RUEHIK RUEHKUK
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DE RUEHMZ #0162/01 1830751
ZNR UUUUU ZZH
P 020751Z JUL 09
FM AMCONSUL MUNICH
TO RUEHC/SECSTATE WASHDC PRIORITY 4831
RUEKJCS/SECDEF WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEHZG/NATO EU COLLECTIVE
RUCNMEU/EU INTEREST COLLECTIVE
RUCNFRG/FRG COLLECTIVE
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHEE/ARAB LEAGUE COLLECTIVE

UNCLAS SECTION 01 OF 02 MUNICH 000162 
 
STATE FOR OES/ENV 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG PREL SENV EU GM XF
 
SUBJECT:  Northern African Solar Energy: A Silver Bullet Against the 
CO2 Werewolf? 
 
SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 
 
¶1.  (U) SUMMARY:  Major European investors led by Germany are in the 
preliminary stages of developing "Desertec," a 400 billion euro 
renewable energy project with the potential to supply 15 percent of 
Europe's power needs by 2050.  The group electrified renewable 
energy proponents with the announcement of a formal consortium 
aiming to tap solar energy resources in the deserts of Middle 
Eastern and Northern African (MENA) countries and transmit it as 
electricity to Europe.  Fresh water production and job creation 
would be part of the project, which could make it attractive to 
possible hosts of its infrastructure.  END SUMMARY 
 
Desertec - Solar Energy and Fresh Water 
for Europe and Africa 
--------------------------------------- 
 
¶2.  (SBU)  On June 15, 2009 the world's largest reinsurance firm, 
Munich Re, announced a consortium of around 20 large German 
companies which aims to build concentrating solar thermal power 
(CSP) plants in MENA deserts and transfer the electricity to Europe 
over high-voltage direct current (HVDC) cables.  Although the 
transmission distance would result in some power losses, the vast 
solar resources in the MENA region make the project economically 
feasible in the long-term. Although no official list of participants 
has been published, it is known that the group includes a member of 
the Arab League and a variety of Spanish and Italian interests. 
Siemens, Deutsche Bank, and the German energy firms REW and E.ON are 
involved, and the Social Democratic Party of Germany (SPD) has made 
the plan central to its new energy strategy.  The consortium will 
meet on July 13 in Munich discuss its next steps. 
 
Technical and Geopolitical Challenges Remain 
-------------------------------------------- 
 
¶3.  (SBU) The projected investment of 400 billion euro through 2050 
includes 50 billion for the construction of an advanced power 
transmission grid and 350 billion to build the system of CSP plants. 
 Desertec uses existing technologies which have been successfully 
implemented in Spain and the United States and will increase its 
efficiency by utilizing solar collectors that superheat salt, 
allowing the system to store heat and generate power around the 
clock.  Desertec faces tremendous financial, political and security 
challenges in the historically unstable MENA region.  Ernst Rauch, 
head of the Munich Re Corporate Climate Center, admitted in a 
meeting with Munich Pol/Econ that while Munich Re was "overwhelmed 
with the positive, almost religious, reactions" to Desertec, "no one 
will invest in a grid this size if the entire project is not seen as 
feasible."   Rauch hoped that a "win-win" arrangement with the 
countries hosting Desertec would act as a regional stabilizer 
because they, too, would benefit from the power, jobs and 
desalinated water produced by the CSP plants. 
 
Desertec Gives Killjoys Plenty to be Skeptical About 
--------------------------------------------- -------- 
 
¶4.  (SBU) Despite the hoopla surrounding Desertec, the project is 
not devoid of criticism, even from some supporters.  For example, 
Wulf Bernotat, chairman of the board of energy giant E.ON, cautioned 
an energy seminar at Munich's ifo Institute on June 29 that Desertec 
would, for example, encounter enormous problems in Europe getting 
permits and financial and political support for an entirely new 
transmission network.  Members of the energy industry that are not 
poised to reap the project's benefits have tried to dampen 
enthusiasm, such as Lars Josefsson, Vattenfall CEO and Climate 
Advisor to Chancellor Merkel, who publically criticized the project 
as being "unrealistic" due to its cost.  He has noted Desertec's 
vulnerability to terrorist attack.  (COMMENT: Vattenfall is heavily 
invested in the European coal industry and is lobbying for "clean 
coal" with CCS technology as its solution to global warming.  END 
COMMENT) Much of the German solar power industry voiced concern that 
the project would eliminate funding for smaller, more "realistic" 
domestic projects. 
 
Comment 
------- 
 
¶5.  (SBU) Current assessments of Desertec's feasibility range from 
hopeful public enthusiasm to pessimism about the enormous political 
and financial challenges. The consortium seems to be counting on 
 
MUNICH 00000162  002 OF 002 
 
 
public support as the catalyst needed to mitigate the skepticism. 
 
¶6.  (U) Consulate General Munich coordinated this report with 
Embassy Berlin. 
NELSON