The "Desertec" Mirage: Get Real!
by Ghanem M. Nuseibeh
Co-founder, Partner and Director, Cornerstone Global Associates Ltd
19th May 2010
We were asked to comment on the report “100 percent renewable energy electricity: a road map to 2050 for Europe and North Africa”, published by PricewaterhouseCoopers, in association with the Potsdam Institute for Climate Impact Research (PIK). The Desertec project is identified as one of the building blocks for the report’s vision. The report addresses the main challenges facing the authors' highly ambitious 2050 vision. But it also over-simplifies some of the challenges whilst over-complicating others. And in so doing, the authors weaken their case.
The report calls for the creation of an integrated European-North African power grid with 100% of electricity generated from renewable resources. It acknowledges the challenges this vision faces technologically, economically and politically.
The technological challenges are two-fold:
- Generation technologies (wind, solar, nuclear, etc)
- Enabling technologies (storage, grid)
Given the political and investment incentives, the technological challenges will eventually be overcome.
So far, so good. But one of the failings of the report is that the authors’ treat the EU and North Africa as one block. North African states have had decades of highly complex geo-political relationships, often interrupted by unexpected external events. Almost fifty years of disunity amongst those states will not easily see them rally around an essentially European idea. Even if such an EU-North African power union appears achievable to some, at various stages and in various locations, it will remain highly vulnerable to a multitude of risks that are too deeply rooted in the Arab-European relationship to be overcome by such a Utopian scheme.
The project cannot succeed if it is a European initiative. Our discussions with North African officials, both in the public and private sectors, and our extensive experience in the region, all indicate that for such a scheme and projects to have any chance of success, it has to be purely a North African-led initiative. Prof Abdelaziz Bennouna is quoted in the report as talking of the “import of solar power” from North Africa to Europe. It is far too late to try to entice the North African states by offering development through clean energy. What makes such offers even less attractive, are competitors from Asia and America, who are viewed by the Arab World with less suspicion than the Europeans.
We were commissioned by the British government late last year to look at how Desertec can benefit UK industry and also how the UK can help move this stalling project forward. Desertec, although identified in the report as a “current development on the ground”, is an example of how difficult it would be to realize such schemes. For Desertec and similar schemes to see the light of day, a collaborative and holistic approach needs to be taken to put a realistic and pragmatic strategy in place, focused on the long-term transformation. This is why, for example, British input is an essential ingredient to make the project work. Desertec is perceivedas a German-led project and the longer it takes to make it happen, the more will it be seen as a lip-service by the Desertec members to fulfil their CSR obligations. Most importantly, however, is that this should be a North African-led, focused and centred project that looks at Europe as potential clients.
Equally important,the authors should acknowledge that their vision, by being Utopian, risks undermining the whole move towards renewable energy and emissions targets. Professor Ernie Moniz of MIT said at a meeting I attended and hosted by Masdar Institute in Abu Dhabi in May 2010, that in his opinion Copenhagen was a success, as it put the right pieces on the table. This step of identifying the stakeholders should guide the development of the strategic vision, rather than have the vision driven by operational or tactical imperatives. The steps taken by the Abu Dhabi government through Masdar are highly commendable as they not only put ideas on the table, but actually implement them and actively seek partnership with countries around the world.
The report quotes, Lucian Hudson, Cornerstone’s MD saying that the project “requires unprecedented alignment of interest” and that “collaboration between the public and private sectors in the various European and North African states at various levels will be essential to mitigate potential risks”. Tapping the synergies between public, private and non-profit sectors and strengthening those relationships is a prerequisite to creating the conditions in which a strategy can take root and be developed to achieve the desired transformation.
Cornerstone Global Associates, a high-end strategy and management consultancy, can help formulate and implement strategies and broker effective relationships that ensure stakeholder engagement and create optimal value. For further information, please email contact@cstoneglobal.com or contact Ghanem Nuseibeh at gn@cstoneglobal.com