Opportunities around the cornerAssessing market development in the MENA region
David Williams, Senior Consultant, Strategy & Policy < [email protected] >
Co-authors: Usama Said Khalid Klabi
DRAFT
MENA, a region with…
Contents:
• … fast growing demand for electricity • costly alternatives • strong resource • increasingly supportive policy
– all on our doorstep….… too good to be true?
1. The Ambition2. The Drivers3. The Barriers4. The Opportunity
DRAFT
The Ambition
Morocco• 42% RES-E• 2-2.2GW
wind
Algeria• 15% RES-
E• 270MW +
“exports”
•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?
Egypt• 20% RES-
E• 7.2 GW
Lebanon• 10%
RES• 1.2 GW
S.A.• 9 GW
by 2032
U.A.E.• 7%
RES-E (Abu Dhabi)
Jordan• 10%
RES• 1.2 GW
Iraq• TBC
Syria• TBCTunisia
• 2.7GW by 2030
Libya• TBC
IEA forecasts MENA region will see
7%of power supplied by renewables in 2030
DRAFT
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
The Drivers
DRAFT
2005
2006
2007
2008
2009
2010
-400
-300
-200
-100
0
100
Net I
mpo
rts as
% o
f Ene
rgy U
se
2005
2006
2007
2008
2009
2010
-400
-300
-200
-100
0
100
Net I
mpo
rts as
% o
f Ene
rgy U
se2. Energy Security
The Have Nots…
Lebanon (+ 97%)Jordan (+ 96%)Morocco (+ 95%)
Tunisia (+16%)Egypt (-21%)Syria (-27%)
The Haves….
UAE (-184%)S. A. (-218%)Iraq (-233%)Algeria (-273%)Libya (-362%)
…not all are so resource-rich
…often dependent on limited supply sources
…but must consider rising domestic demand and declining production - “don’t get high on your own supply!”
The Drivers
DRAFT
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)
The Drivers
0 10 20 30 40 50 60 70 80 90 100
% of oil in electricity generation
Lebanon
Iraq
Libya
Saudi Arabia
Syria
Egypt
Morocco
Jordan
Tunisia
Algeria
UAE 2
2
9
11
20
21
50
55
59
93
94
Chart of Oil in Electricity Generation ClassificationDominantHighNotableLowVery Low
About Tableau maps: www.tableausoftware.com/mapdata
2%
2%
11%
9%
20%
21%
50%
59%55%
93%94%
Map of Oil in Electricity Generation
DRAFT
Ma p show s th e m ean w ind speed in [ m/ s ] at a height of 50 m a.g .l.over the actual la nd surface. R esu lts w er e obtained w ith the KAM Mm esoscale m ode l, with a g r id reso lution of 7.5 km . Te rra in featureslike hills and esca rpm ents m ay enh ance the w ind s peed locally.
Political boundarie s e tc. f rom Wo rld Da ta B ank I I .Co astlines and lake s from W or ld Vector Sho re line.Co m piled and plo tted a t R isø N ational Laboratory,as part of th e "W ind Atlas for Egypt" project.0 50 100 150 200 250
0 100 200 300 400 500 600 700 800 900 1000 1100 1200
Easting [ km]
2400
2500
2600
2700
2800
2900
3000
3100
3200
3300
3400
3500
3600
North
ing
[km
]
NW M7
Hurghada WETC
Abu Simbel
El -Mathany
El- Gala laAlexandria
Nuweiba
Nabq
Katamaya
Zafarana
Saint Paul
Ras Ghareb
Gulf o f El- Zayt
Kharga
Dakhla Sout h
Shark El-Ouinat
El A rish Port Said
El-Suez
Abu Darag
Hurghada AP
Kosseir N
Kosseir S
Sidi Barrani
Ras El-H ekma
Ras Sedr
NW
Farafra
Asswan
Lake Nasser
Toshka lakes
Red Sea
Medi terranean Sea
22°N
23°N
24°N
25°N
26°N
27°N
28°N
29°N
30°N
31°N
32°N
25° E 26°E 27°E 28°E 29° E 30°E 31°E 32° E 33°E 34° E 35°E 36°E 37°E
0 .0 4 .0 4 .5 5 .0 5 .5 6 .0 6 .5 7 .0 7 .5 8 .0 8 .5 9 .0 9 .5 10. 0
4. Strong Resource
The Drivers Egypt map based on dedicated measurements identified 10 m/s + sites on
Red Sea coast…
… positive signs elsewhere but limited ground-based measurements available
AlgeriaSaudi Arabia
ESMAP
Measurement initiatives underway with:
DRAFT
5. Green Agenda, diversification, export, industrial policyThe Drivers
S.A.UAE
9 other
MENA countrie
s
German
y0
5
10
15
20
25
30
35
Tonn
es C
O2 /
Capi
ta
“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
Facilitate desert power generation
Create NA markets for desert power
Create ME markets for desert power
DESERT-TECH
DRAFT
1. Overall Capacity (although growing quickly)
The Barriers
≈2. Grid Infrastructure (but developments are planned)
• GCC Interconnection Authority
• Maghreb Countries Interconnection Project
DRAFT
3. Market Liberalisation – single buyers and subsidies
The Barriers
4. Political Risk
• 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
• 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
Role for European players
Site Development•Restricted but
opportunities exist•Major international
utilities interested in Egypt
•More niche players in Jordan
Turbine Supply•Clear opportunity•Local content desired but
markets too small for domestic WTG supplier
•Preference for European turbines but Chinese competition is possible
O&M•Under turbine supply
during warranty•Public-owned sites
looking to take on themselves after warranty
•Could see domestic competition
The Opportunity
DRAFT