London (Platts)--9Dec2011/841 am EST/1341 GMT

Algeria's national power and gas utility Sonelgaz on Friday signed a memorandum of understanding to cooperate with the European Desertec consortium that plans to harness solar energy and other renewables in the deserts of North Africa and the Middle East.

The MoU was signed by Sonelgaz chief executive Noureddine Boutarfa, Desertec Industrial Initiative CEO Paul Van Son, EU energy commissioner Gunther Oettinger, and Algerian energy and mining minister Youcef Youfsi at a ceremony in Brussels that was broadcast on the Internet.

"The development of renewable energy is a key strategy for Algeria. If the right conditions are met we are convinced that we can export 10 GW of solar power to Europe a year," said Boutarfa.

And Youfsi added that while solar was the most obvious renewable source for Algeria, the country was also developing other renewables.

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"With wind energy we have projects ready to start in the south and we have potential for geothermal where we are looking to get started in a very promising region in the east of the country," the minister said.

"I am convinced that with these joint efforts [with European partners] we can overcome the technological, economic and regulatory challenges that need to be addressed to develop these new sources of energy," Youfsi said.

Oettinger said the plan to harness renewable energy in North Africa would be included in the EC's forthcoming communication on renewable energy which is expected in the second quarter of 2012.

Desertec, whose shareholders include engineering groups ABB, Siemens, Deutsche Bank, and German utility E.ON aims to supply 15% of EU electricity from North African and Middle East renewables by 2050.

On November 24, Desertec executives signed a memorandum of understanding with Mediterranean grid project Medgrid. The French-led Medgrid consortium aims to import up to 5 GW of renewable electricity from North Africa into the European market through undersea cables by 2020.

"Sonelgaz and DII will join forces to develop this together with grid reinforcements for the improvement of the energy mix in Algeria and in Europe all-together...The potential exports that Mr Boutarfa mentions are a very effective way to supplement the renewable sources in Europe," said Van Son.

--Paul Whitehead, paul_whitehead@platts.com

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