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DRAFT. Co-authors: Usama Said Khalid Klabi. Opportunities around the corner Assessing market development in the MENA region. David Williams, Senior Consultant, Strategy & Policy < david . williams @ gl-garradhassan.com >. MENA, a region with…. … fast growing demand for electricity

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opportunities around the corner assessing market development in the mena region

DRAFT

Co-authors:Usama Said

Khalid Klabi

Opportunities around the cornerAssessing market development in the MENA region

David Williams, Senior Consultant, Strategy & Policy < david.williams@gl-garradhassan.com >

mena a region with
MENA, a region with…
  • … fast growing demand for electricity
  • costly alternatives
  • strong resource
  • increasingly supportive policy
  • – all on our doorstep….

… too good to be true?

Contents:

  • The Ambition
  • The Drivers
  • The Barriers
  • The Opportunity

DRAFT

the ambition

IEA forecasts MENA region will see

7%

of power supplied by renewables in 2030

The Ambition
  • 2020 Plans add up to at least 13 GW
  • Equates to 1.8 GW /yr – more than current total installed
  • But will this be realised?
  • Syria
  • TBC
  • Lebanon
  • 10% RES
  • 1.2 GW
  • Iraq
  • TBC
  • Tunisia
  • 2.7GW by 2030
  • Jordan
  • 10% RES
  • 1.2 GW
  • U.A.E.
  • 7% RES-E (Abu Dhabi)
  • Algeria
  • 15% RES-E
  • 270MW + “exports”
  • Morocco
  • 42% RES-E
  • 2-2.2GW wind
  • Libya
  • TBC
  • Egypt
  • 20% RES-E
  • 7.2 GW
  • S.A.
  • 9 GW by 2032

DRAFT

1 demand for power

The Drivers

1. Demand for power

Population growth and improving economies give a forecasted

7%

CAGR in GDP growth to 2017

Creating a forecast of

7%

annual increase in power demand to 2020

Capacity Shortages

are noted across the region – particularly for peak demand

DRAFT

slide5

The Drivers

2. Energy Security

…not all are so resource-rich

The Have Nots…

Lebanon (+ 97%)

Jordan (+ 96%)

Morocco (+ 95%)

Tunisia (+16%)

Egypt (-21%)

Syria (-27%)

…often dependent on limited supply sources

…but must consider rising domestic demand and declining production - “don’t get high on your own supply!”

The Haves….

UAE (-184%)

S. A. (-218%)

Iraq (-233%)

Algeria (-273%)

Libya (-362%)

DRAFT

slide6

The Drivers

3. Costly alternatives

…oil remains widely used for power production in the region

- plants run from both Heavy Fuel Oil (at global oil prices costing upwards of $120/MWh) and middle distillates (upwards of $150/MWh)

DRAFT

slide7

The Drivers

Egypt map based on dedicated measurements identified 10 m/s + sites on Red Sea coast…

4. Strong Resource

… positive signs elsewhere but limited ground-based measurements available

Measurement initiatives underway with:

Saudi Arabia

Algeria

ESMAP

DRAFT

5 green agenda diversification export industrial policy

The Drivers

5. Green Agenda, diversification, export, industrial policy
  • “Develop inter-related national industries” K▪C▪Care, Saudi Arabia
  • “Tenders … give privilege to local components” NREA, Egypt
  • “Jordanian origin…20% increase on tariff”Electricity Regulatory Commission, Jordan

Create EU markets for desert power

Ensure transmission

DESERT-TECH

Create NA markets for desert power

Create ME markets for desert power

Facilitate desert power generation

DRAFT

1 overall capacity although growing quickly

The Barriers

1. Overall Capacity (although growing quickly)

2. Grid Infrastructure (but developments are planned)

  • GCC Interconnection Authority
  • Maghreb Countries Interconnection Project

DRAFT

3 market liberalisation single buyers and subsidies

The Barriers

3. Market Liberalisation – single buyers and subsidies
  • Quantity is controlled and planned by single state-owned buyers
  • Public build or “BOO” style competitive tenders on public land common (Egypt, Morocco, Jordan)
  • Subsidised electricity puts financial pressure on off-taker
  • Government guarantees required

4. Political Risk

  • Project often in remote areas
  • Only states on the Arabian Peninsular free of travel warnings
  • Has influence on cost of financing and contractor options

5. Institutional capacity

  • Issues noted in Egypt and Jordan

DRAFT