30 October 2009 may turn out to be an important milestone for the transition of the global energy infrastructure from fossil fuels to renewable energy sources. Last Friday, DESERTEC Foundation and twelve European companies some of which are the giants of the European energy sector signed an agreement to form the DII GmbH. The companies are ABB, ABENGOA Solar, Cevital, Deutsche Bank, E.ON, HSH Nordbank, MAN Solar Millennium, Munich Re, M+W Zander, RWE, SCHOTT Solar and Siemens. The aim of the DII will be to implement the DESERTEC concept. Paul van Son was appointed as the CEO of the newsly-formed DII. The grand vision of the Desertec initiative is to provide by 2050 about 700 TWh/y of solar electricity from 20-40 different locations in the Middle East and North Africa to the main centres of demand in Europe. This electricity will be transmitted by HVDC transmission lines with a capacity of 2.5-5.0 GW each. By 2050, the European consumption is likely to increase to and stabilize at a value of about 4000 TWh/year. So the Desertec aim is to provide about 18% of this amount. The figure shows the concept of the supergrid that will connect the concentrating solar power plants in North Africa to Europe.

You may remember my blog entry on 17 July announcing these 12 companies signing an MOU to develop the Desertec Industrial Initiative – a EUR400bn (US$560bn) plan to build vast solar arrays in Africa and the Middle East and transmit the power to Europe. Only 0.25% of the required funding had been secured in July with a EUR1b grant from EU. There are no news of new funding yet but the formation of the DII last week suggests the twelve companies are serious in their pursuit. The news about Siemens buying Solel two weeks ago to expand its capabilities in solar thermal area gains more significance when considered in the context of Siemens being one of the twelve DII companies. Solel was set up in 1992 by former Luz International staff. Luz of course is the Israeli company credited as being the "inventor" of concentrating solar power by building 9 CSP plants in the California's Mojave desert in late '80s and '90s. These plants still operate today generating a total of 354 MW of electricity. Luz went bankrupt with deregulation and cessation of generous tax credits for renewable power. However, with the changing times, the LUZ II or Solel seemed to be doing well. According to the Power Engineering international, Solel posted revenues of $90m in 2009, doubling the $40m revenue it posted last year. Siemens is already the world leader in the solar thermal power plant steam turbine market with 80 per cent of market share, and hopes that with the acquisition of Solel they will be able to develop technology as the market grows. Siemens also acquired a 28 per cent stake in Archimedes Solar Energy in March 2009, an Italian based company which has developed technology for receiver tubes. Siemens' environmental portfolio posted revenue of nearly $19bn in 2008 and Siemens is currently projecting annual double-digit growth rates for concentrating solar thermal power (CSP) plants by 2020.

Are there lessons to learn and inspiration to draw for Australia? An Australian interior providing gigawatts of electricity from geothermal and solar thermal sources providing electricity for the coasts while enabling desalination of salty quifers to open new tracts of land in the interior for agricultural and other settlement purposes: a pipe dream? Maybe not. If it can be done in Europe across the Mediterranean sea as well as the country boundaries why not in a single stable political entity such as Australia.