BERLIN: A $400 billion plan to provide Europe with solar power from the Sahara moved a step closer today with the formation of a 12-company consortium.

Desertec Industrial Initiative (DII) aims to provide 15 per cent of Europe’s electricity by 2050 or earlier using power lines stretching across the desert and Mediterranean Sea.

The German-led consortium was brought together by Munich Re, the world’s biggest reinsurer, and consists of some of the country’s biggest engineering and power companies, including Siemens, E.ON, ABB and Deutsche Bank. It now believes it can deliver solar power to Europe as early as 2015.

“We have now passed a real milestone as the company has been founded and there is definitely a profitable business there,” said Professor Peter Hoppe, Munich Re’s head of climate change.

“We see this as a big step towards solving the two main problems facing the world in the coming years — climate change and energy security.” The solar technology involved is known as concentrated solar power (CSP) which uses mirrors to concentrate the sun’s rays on a fluid container. The super-heated liquid then drives turbines to generate electricity. The advantage over solar photovoltaic panels is that if sufficient hot fluid is stored, the generators can run all night.

The technology is not new — there have been CSP plants running in the deserts of California and Nevada for two decades. But it is the scale of the Desertec initiative which is a first, along with plans to connect north Africa to Europe with new high-voltage direct-current cables which transport electricity over great distances with little loss.

Leading European energy industry expert Paul van Son, chief executive of DII, said the initiative was “pivotal” to the transition of the Middle East, north Africa and Europe to a sustainable energy supply.

“Now the time has come to turn this vision into reality,” he said. “That implies intensive co-operation with many parties and cultures to create a sound basis for feasible investments into renewable energy technologies and interconnected grids.” Desertec has gained broad support across Europe, with the newly elected German coalition government of Angela Merkel hoping the project could offset its dependence on Russian gas supplies.

North African governments are also said to be keen to further exploit their natural resources. Algeria and Libya are already big oil and gas suppliers to Europe.

Hoppe said Munich Re had been concerned about the potential impact of climate change on the insurance business since the early 1970s. Extreme weather events related to climate change are already a reality and have the potential to be uninsurable against within a few decades, pointing to a possible crisis.