Dusseldorf Green power plants with a total output of 100 gigawatts: If it were up to Paul van Son, President of the organization Dii Desert Energy, then North Africa and the Middle East should become the center of green energy: “That’s the future,” says the Dutch manager. For comparison: According to the Federal Statistical Office, the installed photovoltaic capacity in Germany was 54 gigawatts in 2020.
But whose future should that be? That of a Europe that is desperately looking for alternatives to Russian gas, and that of a region from Morocco to Saudi Arabia (Middle East, Northern Africa, or Mena for short) that has so far hardly played a role in the energy transition in this country.
The Dii (Desertec Industrial Initiative) is committed to this future – with moderate success so far. Behind her are also some German companies such as Thyssen-Krupp, Daimler Truck and Siemens. They hope that new energy hubs on the Mediterranean will meet the industry’s need for green energy.
The discussion about the desert power projects gained momentum as a result of the UN climate conference in Egypt. Africa’s largest solar power plant is located in the country on the Nile. Investments in the billions are to follow their example in the next few years: in power plants, hydrogen production and pipelines.
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In Germany, developments are being closely monitored. Katherina Reiche, CEO of long-distance network operator Westenergie and chair of the National Hydrogen Council, met with representatives of the local energy industry and senior management of Dii Desert Energy in Sharm el-Sheikh, where the UN climate conference COP27 is taking place.
“In the Mena region, hydrogen can be produced for around one dollar per kilogram,” says Reiche. The USA will soon be ready; almost 370 billion dollars are to be invested there over the next decade. “We have to react to this and promote our investments,” Reiche demands.
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The production costs for green hydrogen are still up to five euros per kilogram. The gray variant – produced with electricity from gas or coal – is significantly cheaper, but also more harmful to the climate: green hydrogen is not yet a cost-effective alternative to natural gas.
But even with cheap electricity and hydrogen from the desert: will the projects in North Africa and the Middle East become a core element of the energy transition? How should the energy get to Europe? And what do the producing countries get out of it?
Danger of new dependencies?
The Saudi Arabian group ACWA Power operates some of the largest solar projects in the world. The Ouarzazate power plant in the deserts of Morocco is the flagship project: Here the sun shines all year round on mirrors with a total area of almost 2000 hectares.
The light is bundled, the heat is converted into electricity – and at a price of just a few cents per kilowatt hour. For the time being, Morocco will cover its own electricity needs from here, writes the German Reconstruction Loan Corporation (KfW), which claims to have approved loans of more than 800 million euros to those responsible for the project. “In the long term, there is the option of also supplying cheap green electricity to Europe,” writes the bank.
The “Xlink” project, a cooperation between Morocco and Great Britain, which envisages a high-voltage line from the desert to the northern European islands, also shows how interesting these projects are for Europe. So far, not much has happened around the 18 billion euro project. In perspective, Morocco could cover around eight percent of Britain’s electricity consumption.
The ACWA Group is also busy in its home region. There is a collaboration with the Neom project in Saudi Arabia. Up to 600 tons of green hydrogen could be produced daily in the desert planned city. The first exports should take place from 2026.
Pipelines are “the cheapest way”
One of the largest gas producers is Algeria. There is a pipeline network to Europe from the North African country via Spain and Italy. According to Westenergie boss Reiche, some of the lines could be converted to transport hydrogen: “That’s the cheapest way,” she says.
For a long time there was a lack of political will to implement the desert projects. Now that the war in Ukraine has started, politicians are traveling to the Middle East to promote energy cooperation. Is Germany’s supply of desert power now only a matter of time?
“Technically, the plans are not a problem,” says Stephan Bosch, an expert in energy geography at the University of Augsburg. Nevertheless, the energy researcher advises against a one-sided approach: “The desert projects could definitely cover many times our needs. At the moment, however, we are dependent on strong domestic expansion.”
The energy researcher demands: “Both centralized projects such as those in the Mena region and decentralized projects must be funded.” Among the latter, Bosch counts local citizen energy companies, in which consumers come together and invest in local green energy generation.
More than 60 projects in the Mena region
But what will this mean for the producing countries? “Egypt will be able to generate more revenue from hydrogen than from gas,” says Cornelius Matthes, CEO of Dii Desert Energy. The Dii network had to change its strategy – Africa’s electricity for Europe – over the years, also because of accusations of neo-colonialism. In the meantime, the main aim is to strengthen the local infrastructure with a new strategy. More than 60 projects are planned for this, says Matthes.
What is an investment opportunity for the Arab and North African countries is fueling hopes for a green energy transition in Germany. Technologically, nothing stands in the way of electricity from the desert. Politically, however, the projects are a tightrope walk.
For example, ACWA boss Paddy Padmanathan praises the “stable political conditions” in the Mena region. However, recent trips by German government officials to the region have met with criticism: they are tying up with autocrats to get rid of Russian energy.
Energy researcher Bosch says: “There is always a risk that a state will become dependent. Ultimately, it’s about diversifying the supply in order to keep the risk as low as possible.”
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