November 5, 2012 / 12:50 PM / 7 years ago

China's State Grid interested in joining Desertec

MUNICH, Nov 5 (Reuters) - Chinese power company State Grid Corp (SGCC) is interested in joining the Desertec project aimed at expanding the use of renewable energy in Europe and North Africa, a spokesman for Desertec said on Monday.

The Financial Times Deutschland newspaper reported earlier that SGCC was interested in joining the project, without giving its sources.

Desertec, a consortium set up in 2009, envisages Europe importing up to a fifth of its electricity from solar and wind parks in North Africa and the Middle East by 2050.

Spread over 6,500 square miles - more than half the size of Belgium - the project’s planned delivery of 1,064 terawatt hours (TWh) would be almost enough energy to power the whole of Germany for two years.

With a projected budget of 400 billion euros ($514 billion), the plan has been dismissed as too expensive, too risky and too big. The upheaval of the Arab Spring - the revolutionary wave of popular protests and uprisings that began first in Tunisia in late 2010 - has added to the doubts.

Business leaders say the economics are not compelling yet, but some say technological advances and judicious use of EU money could change that.

Among others, shareholders of the so-called Desertec Industrial Initiative (DII) include German reinsurer Munich RE , utilities E.ON and RWE as well as Deutsche Bank.

German industrial conglomerate Siemens announced last month it was pulling the plug on its loss-making solar business as part of a drive to improve profitability.

Under its plans to quit solar, Siemens - which is still described as a shareholder on DII’s website - is exiting the Desertec project.

$1 = 0.7785 euros Reporting by Jens Hack; Writing by Christoph Steitz; Editing by Mark Potter

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