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re: "What, precisely, is wrong with this picture?"

It's delusional.

The scenario is predicated entirely by the assumption that the only value of power generation to Algerians, for example, is the market value of surplus capacity, stock, and distribution ("Who are they going to sell it to? The Americas? Russia?"); and energy export is a prerequisite of "economic integration" signified by some amount of EUR reserves accumulated entirely as revenue share of exclusive marketing to EU customers.

That's your inner, patronizing imperialist speaking obliquely about the intractable problem of increasing energy consumption in Europe. This golem cannot conceive of an African nation obtaining project financing to acquire a discrete productive means and extinguish debt. It cannot conceive of any competitive supplier of plant and equipment other than the tools in its chest. Precious hates BRIC brac.

Do you know much wind capacity is actually installed in Algeria? Could you estimate much more renewable energy will Algeria require to (1) replace fossil fuel marked-to-OPEC (2) service its public and private sector population over 80 years or so? This last goal is the most important measure of civilization, by the way, beside industrial capabilities and excess manufacturing capacity, exemplified by Algeria's partners in "economic integration."

Some information is in the Desertec prospectus, for example,

In 2050, we envisage that the EU-NA power system will have a total electricity consumption of at least 5000 TWh/a, with approximately 25% of this demand in [ALL OF] North Africa and the remainer in Europe. In total, only 60% (3000 TWh/a) of the system-wide electricity supply is produced in Europe, whereas 40% (2000 TWh/a) is produced in [ALL OF] North Africa.


Diversity is the key to economic and political evolution.
by Cat on Tue Aug 24th, 2010 at 02:37:38 PM EST
[ Parent ]
I'm not quite clear on what you think is wrong with a 75/25 split in electricity usage between the present EU and North Africa. North Africa has pretty precisely 25 % of the population of the combined EU+NA system. So, ceteris paribus, we should expect it to have 25 % of the electricity usage. Maybe differences in demographics would tilt the population ratio to 70/30 in 2050, but that's still close enough for corporate work.

The fact that North Africa will have a greater share of electricity production relative to population in an EU+NA system than the EU is not so different from the fact that Italy, France and Spain have a larger share of EU wine production relative to population than Finland, Sweden and Norway. I'm sure that Finland could make fine wine, if they threw sufficient resources at the problem. But that would hardly be the smartest or the most elegant way to provide Europe with wine...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Aug 24th, 2010 at 03:22:34 PM EST
[ Parent ]
"project finance"?

Project finance is exactly what Jake described, and you actually could not get project finance in Algeria for a big investment project like he describes but based on local demand, because project financiers want to see high probability cash flows to be in a position to lend, and for some reason (European oppression, probably, they don't trust the locals to pay them back, and require export contracts backed by creditable parties to provide these.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Tue Aug 24th, 2010 at 06:08:11 PM EST
[ Parent ]
That and the fact that they usually demand €-denominated loans, which means that the project had damn well better have a €-denominated cash flow sufficient to retire those loans on schedule. Otherwise, you're setting yourself up for a currency crisis and the accompanying IMF euthanasia of your economy and political sovereignty structural adjustment program.

Unless, of course, one thinks that it's a brilliant idea to deliver developing countries into the waiting arms of an economic hit man.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Aug 24th, 2010 at 06:15:30 PM EST
[ Parent ]

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