Interview with Siemens CEO on the Desertec Project 'On the Brink of a New Era in Energy'

The biggest solar energy project in the world is about to get off the drawing board. And leading German firm, Siemens, is just one of around a dozen organizations getting behind Desertec. SPIEGEL asked Siemens CEO Peter Löscher about his company's role in the project.

Top companies lined up on Monday to get behind the world's most ambitious solar energy project. They signed a memorandum of understanding in Munich to set up the Desertec Industrial Initiative which involves what is being called a "solar technology belt" across the Middle East and North Africa, with a huge undersea "super grid" then delivering the power back to Europe.

The aim of the €400 billion ($560 billion) project is to provide carbon-free energy that could supply up to 20 percent of European energy needs by 2050.

At first the Desertec project, which arose out of a feasibility study commissioned by the German Ministry of the Environment, looked as though it might not get much further than the drawing board because of its hefty price tag. But a consortium of some of Europe's heaviest financial hitters has come together to raise the required funds. Among others both governmental and non-governmental, this includes Deutsche Bank, energy giants RWE and E.ON, major insurer Munich Re and electro-engineering leader Siemens.

The meeting formally established the Desertec group, which should be followed by firm plans for the project within two to three years time and then actual energy production for Europe within a decade. SPIEGEL spoke to Siemens Chief Executive Peter Löscher about his firm's involvement with what would be the biggest green energy project in the world.

SPIEGEL: This Monday, the representatives of around a dozen businesses will meet in Munich to facilitate what is possibly the most ambitious industrial project they have ever undertaken. What sort of role will Siemens be playing?

Löscher: We will be covering the whole chain of energy conversion, from efficient and environmentally friendly power generation via transport and distribution right up to end uses of electric power. Desertec is not just about solar and wind energy, it is also about energy superhighways for the low-loss transmission of power over thousands of kilometers and the management of such complex systems.

SPIEGEL: Some experts have said they think it's not economical to transport solar power to Europe through huge distribution grids under the Mediterranean Sea.

Löscher: Energy superhighways can be both technologically efficient and economical. A few years ago we connected Tasmania with the Australian continent. And from 2011 there will be a 250-kilometer undersea cable supplying Majorca with electricity from the Spanish mainland. For us, this kind of thing is now part of our core business.

SPIEGEL: Critics have complained that the governments of the many African nations where the project is being developed have not been consulted.

Löscher: Such oases of energy are a huge opportunity for Africa -- and for every other region with enough sunshine hours. When capital, competence and resources from several different countries come together, it is advantageous for all those taking part. Besides, representatives from Arab states and from Africa are substantially involved.

SPIEGEL: Your own company made solar cells until 2002, after which you sold that part of the business. A big mistake?

Löscher: At that time Siemens was pulling out of the cyclic semi-conductor business -- that is, mainly silicon chips and microchips for computers as well as solar cells. We stayed in the field of photovoltaics (the field of converting solar energy into electricity). In the future we will be bigger players in the area of solar power again.

SPIEGEL: Yet in the field of alternative energy, 90 percent of what Siemens produces is actually wind power…

Löscher: This business has developed incredibly over the last few years. We now want to become a leader in solar power too.

SPIEGEL: Your arch-rival in the US, General Electric, has also discovered solar energy as an area of future growth. Will you be competing or co-operating?

Löscher: Competition and strong players in the market are always good for progress and innovation. Siemens connected America and Europe via telephone cables under the Atlantic as early as 1874, before other companies existed. That mammoth project was considered as ambitious as Desertec is today.

SPIEGEL: In addition to solar power, you want to push nuclear power as well -- even though the recent problems at the Krümmel nuclear plant have fuelled doubts about the safety of this technology.

Löscher: The fact is that the world needs a broad mix of energy sources. We are standing on the brink of a new era in energy production. Electricity that is clean and produced in an environmentally friendly is a major way of tackling climate change. And that involves the whole spectrum of energy sources and innovative technologies.

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