By Jason Deign

The Desertec Industrial Initiative (Dii) has hit back against concerns over its future following the defection of shareholder E.ON and associated partner Bilfinger in April. Their departures follow the loss of two other high-profile German names, Bosch and Siemens, last year.

“In Germany there were a lot of articles about ‘the German exodus’, but I think this is absolutely nonsense,” says Klaus Schmidtke, head of communications at Dii.

“If we look at Siemens or Bosch, these companies decided to cancel their solar business so it made no sense for them to be involved.”

The latest exits have come as the Dii makes a transition from being a temporary to a permanent association, with a greater focus on creating renewable energy development opportunities in the Middle East and North Africa (MENA).

At the same time, Schmidtke says the organisation has suffered from a perception of being mainly devoted to fostering MENA projects for member companies.

“This is not right because Dii never had to realise projects,” he says. “What we always said is we would have a role as an enabler.”

Nevertheless, the lack of a clear MENA project pipeline and greater opportunities for power project development closer to home appear to be factors behind the latest walkouts.

Speaking of E.ON’s decision, Markus Nitschke of the utility’s political affairs and corporate communications department says: “We supported the designing of the this strategy with much effort from beginning.

“The reason for our withdrawal is that we are focusing on our own projects now. Currently we are focusing on on- and offshore wind projects as well as on solar power. There is one CSP project in Spain we participated [in]. This remained the only one. No others were planned.”

Drawing attention

However, while Dii appears to be holding less attraction for some German companies, it is still drawing attention among international players wishing to break into MENA.

Schmidtke says the initiative’s remaining founders have vowed to stay on board as the organisation moves forward, and more than 10 companies are in talks about handing over €125,000 or €75,000 a year for shareholder or associate partner rights.

Nor is it correct to speak about a German exodus, he says. “If you look at the companies we have in our network, 30% or 40% are from Germany,” he points out.

“At the beginning there was a clear majority of German companies, but Desertec of course is very international, so Germany is not the most important thing inside of Dii.”

Schmidtke is also keen to dispel misconceptions over the cost of the project.

Reuters last month reported that: “Critics such as the head of the German Energy Agency have said the Desertec project, with an expected budget of €400 billion, is too expensive to be practical, among other objections.”

This figure does not come from Dii, Schmidtke says, but from a German Aerospace Center (DLR) report from 2005. “This figure was very much misleading from the beginning,” he points out. “We do not have €400 billion, really.”

What does appear to be the case is that Dii is downgrading the importance of Desertec’s original grand plan to ship power from MENA to Europe.

Acrimonious split

This was one of the issues that led to the acrimonious split between Dii and the Desertec Foundation last year and appears to have been a sticking point for Initiative members seeking a quick return on their membership feeds.

Nitschke of E.ON, for example, says: “Regarding Desertec, there was an interest to import green energy in combination with supplying the regions in Africa. The situation has changed completely in the meantime. Often there is much more renewable energy offered than needed.”

Schmidtke adds: “The topic of export of energy to Europe was very much over-estimated. It’s a priority to produce electricity for the local demand in North Africa and the Middle East because the demand is rising.

“Europe could benefit from this in the future but this is not necessary for the development of renewable energy in MENA.”

For now, Dii is keen to promote its efforts to help grow renewable energy markets in MENA.

The Initiative claims 40% of current MENA projects involve Dii members and is particularly eager to highlight its efforts in countries such as Algeria, where Schmidtke says the organisation was instrumental in helping develop a national renewable energy strategy.

The proof of this, he says, is that the first two multi-megawatt solar photovoltaic plants in the country have been sited at locations proposed by Dii. In that event, developers from outside the Dii won both projects. “For me, it’s a sign of transparency,” comments Schmidtke.

“I think Dii has a high reputation in countries like Algeria and Morocco. In our role it’s easy to talk to these countries because we have no direct commercial interest, but we can offer a lot of expertise.”

To respond to this article, please write to the author, Jason Deign.