Support schemes in the South and East Mediterranean countries

Transcription

1 Fiscal Reforms for Low Carbon Growth in the Mediterranean Support schemes in the South and East Mediterranean countries Dr. Emanuela Menichetti Director, Electricity and Renewable Energy Villa Valmer, Marseille, 19 October 2018

2 Geographical coverage Eleven countries of the South and East Mediterranean (SEMCs) SOUTH WEST Algeria Egypt Libya Morocco Tunisia SOUTH EAST Israel Jordan Lebanon Palestine Syria Turkey 2

3 RE capacity evolution in the SEMCs RE technologies have been progressing at a c.a.a.g.r. of 10% over the last ten years Cumulative RE capacity in 2017 was more than double the amount of 2008 SEMCs host 2% of total RE capacity worldwide Source: OME 3

4 Zoom on selected RE technologies Source: OME 4

5 Net electricity capacity additions by type Source: OME Natural gas is still dominating the electricity mix in terms of cumulative capacity However, net additions of hydro and non-hydro RETs were higher than natural gas in 2017 vs (5 GW vs. 4 GW) RETs capacity grew by more than 24 GW since 2010, a net addition of 3 GW per year 5

6 RET geographical distribution in the SEMCs Market still concentrated in few countries Turkey accounting for almost 80% of total capacity in the SEMCS Source: OME 6

7 RETs capacity by GDP and population GDP and per capita indicators show a less concentrated distribution We start seeing the results of policies in place, e.g.: Morocco, Lebanon Source: OME 7

8 SEMCs slowly getting attractive In 2017, RE investments in the SEMCs were 2% of the total, about 20 times lower than China s, 5 times less than in Europe but larger than the investment size in Brazil Egypt and Turkey attracted the largest investment flow in 2017, but things are moving ahead in several countries (e.g.: Jordan, Lebanon, Israel, Morocco) SEMCs: ~7 USD bn (2017) Source: UN Environment, Bloomberg New Energy Finance, and OME 8

9 Competitive long-term prices for RETs SEMCs among the lowest bids for solar PV and wind Average awarded contract prices, USD/MWh Canada 29 UK 77 Denmark 53 The Netherlands 68 Germany Mexico Brazil Peru Onshore wind Offshore wind Solar PV Sources: OECD/IEA, 2018 Morocco 30 Senegal 29 Zambia 69 SA Turkey 73 UAE 24 Saudi Arabia 24 Jordan 25 Egypt 30 China 55 India

10 Established RE targets in the SEMCs Almost GW of non-hydro capacity required to meet the announced targets, 8 times more than current (2016) levels 10

11 Sustainable energy & climate measures Country Energy efficiency Renewable Energy CO 2 mitigation Algeria Egypt Israel -9% of energy consumption -8% of energy consumption -17% of electricity consumption (vs. BAU) 27% of electricity generation 42% of electricity capacity (2035) 17% of electricity generation Jordan - 11% of the energy mix (2025) Lebanon Morocco Palestine Tunisia -3% in electricity demand vs. BAU (up to - 10% conditional target) -15% of energy consumption -5% in electricity demand by 2020 (-384 GWh/yr) -30% of energy demand vs. BAU (2010) 15% of electricity and heat (up to 20% conditional) 50% of electricity capacity (2025) 33% of electricity from solar PV 30% of electricity generation Turkey - 26 GW + full hydro potential (~36 GW) Min of -7% (up to - 22% if intern. financing) -23% compared to BAU Min of -1.5% (up to - 14% if intern. financing) Min of -15% compared to BAU (up to -30% conditional) Min. of -13% compared to BAU (up to -32%) -12.8% compared to BAU (up to -24.%) Min of -13% compared to BAU (up to -28%) -21% compared to BAU Source: UNFCCC Nationally Determined Contributions to the 2030 horizon No quantification for Egypt in its NDC; data gathered from the Integrated Sustainable Energy Strategy to 2035 No NDCs for Libya, Syria 11

12 Policy Support Schemes in SEMCs Algeria Egypt Israel Jordan Lebanon Libya Morocco Palestine Syria Tunisia Turkey Renewable energy targets Regulatory schemes Feed-in tariff/premium Quota obligatio n Net metering/ billing Tendering Fiscal incentives and public financing Reductions in sales, energy CO2, VAT or other taxes Public investment, loans, grants, capital subsidies or rebates Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 12

13 Selected case studies from the South&East Mediterranean region: Egypt Lebanon Morocco Tunisia

14 Algeria

15 RE Policy Framework in Algeria National RE Plan issued in 2011 and revised in 2015 Main law for RE promotion is law No of August 14th of 2004, setting a feed-in tariff scheme An Executive Decree No of 18 June 2013 laying down the conditions for granting premiums for the costs of diversification of electricity production was adopted by the Government and published in Official Gazette No. 33 of 26 June 2013 A dedicated fund National Fund for Renewable Energy and Cogeneration - has been created for financing RE projects. The fund is financed by a 1% of total oil royalties. The Ministerial Orders of 2 February 2014 have fixed PPAs for production of electricity from PV and wind plants with guaranteed tariffs for 20 years. Other projects of other technologies will be financed after 2021 from 50% to 90% based on the technology by the fund. Institutional framework: Ministry of Energy and Mining is the main institution responsible for energy issues. SKTM Company of Electricity and Renewable Energy, subsidiary of Sonelgaz - is the executing company. The Algerian Electricity and Gas Regulation Commission (CREG) is responsible for defining prices. Other institutions are: the Renewable Energy Development Centre (CDER), New Energy Algeria (NEAL), Institute for Renewable Energy and Energy Efficiency (IAER) and the Agency for the Promotion of the Rationalization of the Use of Energy (APRUE). 15

16 Algerian Renewable Energy Development Program 2011 (MW) Solar thermal (CSP) Photovoltaic (PV) Wind Total (MW) (2011 up-dated) Total: MW

17 Egypt

18 RE Policy Framework in Egypt RE Targets: 20% RE of the electricity generation in 2022 & 42% RE in 2035 (Integrated Sustainable Energy Strategy, 2015) Source: Egyptian Holding Electricity company Main laws & regulations: Law No. 203 of 2014 on the production of electricity from renewable energy sources, electricity law of 2015, Cabinet Decree No of 2014 on Feed-in Tariff (1 st round), Prime Ministerial Decree No of 2016 on Feed-in Tariff (2 nd round), and Prime Ministerial Decree No. 37/4/15/14 of 2015 on allocating land for RE projects Main support schemes: - A) competitive bidding - B) Merchant scheme - C) Feed-in Tariff 18

19 RE Deployment under the different schemes ~6 GW under development Competitive auctions (BOO scheme), managed by EETC Gov t projects, (EPC scheme), managed by NREA FIT Wind Solar Wind Solar Wind Solar Win d 250 MW in Gulf of Suez under construction About 1250 MW in Gulf of Suez in pipeline. 250 MW in West Nile in pipeline. 200 MW PV in Kom Ombo under contracting. 200 MW PV in West Nile in pipeline. 600 MW PV in West Nile in pipeline. 100 MW CSP in West Nile in pipeline About 1000 MW Wind Energy About 50 MW Solar Energy NO wind energy project has been comple ted. About 1500 MW Solar PV projects in Benban under construc tion Net metering n/a Solar Regulatio ns establishe d for Solar PV projects less than 20 MW Other RE measures include: Net metering for solar PV projects less than 20 MW; land allocation and permits (7650 Km2 of land), long-term PPA, governmental guarantees, reduced custom duties (2% only) and conduct of environmental impact assessment studies and others. 19

20 Lebanon

21 RE Policy Framework in Lebanon Main laws & regulations: The government policy paper of 2010, and mainly the National Renewable Energy Action Plan (NREAP) of RE Targets: 200 MW wind, 250 MW solar PV, 50 MW solar CSP, MW hydro, GWh of bio-energy and 1.3 MW geothermal (by 2020). RE Targets in Lebanon, 2020 Geothermal Solar CSP Wind Solar PV Hydro RE Installed Capacity (MW) in 2017 RE Target (MW) by 2020 Main RE support mechanisms: Financing mechanism through the National Energy Efficiency and Renewable Energy Action (NEEREA). Other RE measures include: Net metering, LEEREFF (Fund by EIB and AFD). 21

22 What is NEEREA? NEEREA is the National Energy Efficiency and Renewable Energy Action A national financing mechanism initiated by the Central Bank of Lebanon in collaboration with the Ministry of Energy and Water, the Ministry of Finance, UNDP, the EU, and the LCEC. It was officially launched with the issuance of Circular No. 236 by the Central Bank of Lebanon on 25 November Provides subsidized loans for any type of EE and/or RE projects to private sector entities (individuals, SME s, or corporate bodies). Covers loans by any Lebanese commercial bank with 0.6% interest rate and a repayment period of up to 14 years, in addition to a grant amount released after the project is implemented. Source: LCEC,

23 Architecture of NEEREA MEW sets the strategic guidance and priority in energy efficiency and renewable energy As the national financing institution, BDL sets the framework of operation and offers benefits to banks MoF defines the subsidies on interest rates for the different sectors of the economy EU has offered BDL a grant of 12 Million Euros to encourage SME s in applying for NEEREA UNDP partnered with BDL to offer technical support, training, marketing, and awareness raising activities Source: LCEC, 2018 LCEC is the technical consultant to BDL, reviewing loan applications, and setting quality control criteria 23

24 Investments Under NEEREA 2018: Approved Loans: 889 ( ) Projects 511 million USD ( m) 56 Pipeline Projects: 50 million USD 24 Source: LCEC, 2018

25 NEEREA Indicators - Statistics Distribution of Investments Under NEEREA Loans Amount per Category 667 PV projects: Total capacity of 32.5 MWp Green building loans: A total of 252 million USD RE: Renewable Energy Projects, EE: Energy Efficiency Projects, R3E: Renewable Energy and Energy Efficiency Projects, GB: Green Certified Buildings Projects Source: LCEC,

26 Morocco

27 RE Policy Framework in Morocco An energy strategy was enacted in 2009, a law on renewable energy 13-09, amended in 2016 RE targets: 42% of electric installed capacity by 2020 and 52% by 2030 An evolving institutional framework; the establishment of the Moroccan Agency for Sustainable Energy (formerly known as the Moroccan Agency for Solar Energy), the establishment of an energy investment company (SIE), and the recent establishment of an independent electricity regulator (ANRE) Main support scheme (Tendering): Rationale: i) search for the cheapest KWh through competition and the involvement of the private sector, ii) reduce the burden on state energy budget, and iii) embed local requirements to benefit from socio-economic externalities Other RE measures include: Net metering (EnergiPro for self-production at HV), indirect subsidies through state-owned companies/agencies (ONEE & MASEN), land allocation for wind and solar integrated programmes, etc Key success factors: an enabling regulatory framework with renewable energy targets, a consolidated institutional framework, attractive financing conditions through the involvement of several international financial institutions and development banks (reducing risk and financing cost). 28

28 RE Deployment by Technology in Morocco Solar CSP NOOR I: Technology - CSP trough; Capacity MW; Storage - 3 hours (operational since 2016) Considered as a show-case of the CSP technology with storage in Morocco to gain experience and draw lessons for future developments of similar projects in Morocco and in the whole region. A public-private partnership, bringing together public institutions, private investors and the finance community, including international financial institutions and development banks. This was key in risk allocation among stakeholders. Local industrial integration requirements: around 30%-35% - civil engineering, metal frames and mounting structures, etc. NOOR II: Technology - CSP trough; Capacity MW; Storage - >7 hours & NOOR III: Technology - CSP Tower; Capacity MW; Storage - >7 hours. More experience is gained, including ready workforce and economies of scale, especially benefiting from the already existing infrastructure developed during the first phase. Further fall of cost, but still has not reached grid parity (Between 130 & 140 $/MWh). Status: testing phase and expected to be commissioned by end of this year 2018 Solar PV Wind Perspectives: NOOR Midelt hydrid CSP/PV (evaluation of the bids on going), NOOR Tata, etc. NOOR IV: Technology PV with tracking system; Capacity - 70 MW; (Price around $40/MWh); Status: Operational (October 2018). Perspectives: NOOR PV2 Taza (150 MW): under development The 850 MW auction was launched by ONEE (Office National de l Electrcite et de l Eau Potable). Projects covered under this tender: (Midelt MW, Tanger MW, Jbel Ladid MW, Tiskrad MW, Boujdour 100 MW). Awarded in March 2017, price competitiveness and local content (attributed an important weight in scoring) were key in awarding the tender to the winning consortium. 29

29 Tunisia

30 RE Regulatory Framework in Tunisia Main laws & regulations: Law No on electricity production from RE sources (May 2015), Decree No on the realization of projects and sale of RE electricity (August 2016), and Orders on technical specifications and contracts (February 2017). RE Targets: increasing the share of RE in electricity generation to 30% in 2030, whereas it stood at only 3% in To achieve this target, Tunisian Solar Plan (TSP) aims to achieve an installed RE capacity of 3,815 MW in An evolving institutional framework including the Ministry in charge of energy (Ministry of Industry and SMEs), National Energy Conservation Agency (ANME) and the Tunisian Electricity and Gas Company (STEG). Main support schemes : Tendering: search for the cheapest kwh through competition and the involvement of the private sector. Applied for Authorizations (RE projects <=30 MW) and Concessions (RE projects >30 MW) regimes. Net metering for self-generation at HV/MV and LV. Other RE support measures include: Subsidies through state-owned funds : Energy Transition Fund (FTE): for self-generation RE projects. Tunisian Investment Fund (FTI): targeting the authorizations & concessions regimes projects. 31

31 RE Policy Framework in Tunisia THREE REGIMES Self generation Industries & Services allowed to produce electricity for their own needs and sell the excess to STEG. Access to electricity network in case the R.E generation site is different from the consumption site. Authorizations For less then : 30 MW Wind, 10 MW PV, 15 MW Biomass, 5 MW other sources. Concessions For higher capacities, either to satisfy the needs of the local market or for exportation. RE deployment under different regimes: Calls for projects Authorizations: 1 st round / May 2017 : 70 MW Wind and 70 MW PV Authorizations: 2 nd round / May 2018 : 130 MW Wind and 70 MW PV Concessions: May 2018 : 500 MW Wind and 500 MW PV 32

32 RE deployment in Tunisia RE deployment under different regimes : Updated program for

33 Conclusions SEMCs represent a minor share of RE capacity at global level Their energy mix is still largely dominated by fossil fuels Although not dramatically, the rate of penetration of RE in the power sector has been increasing in the past few years, thanks to dedicated support measures and Energy Transition/Climate policies associated with an evolving regulatory framework Record low levels of electricity price observed in some countries for wind and solar PV The reported case studies show deep commitment and awareness of decision makers and stakeholders Best practices at international levels applied to design the regulatory regimes 34

34 We acknowledge the contribution of OME members and partners of the Energy Transition Committee, and particularly: 32 bis boulevard Haussmann Paris - France - CDER, Algeria - EETC and NREA, Egypt - LCEC, Lebanon - ONEE, Morocco - STEG, Tunisia

35 National Renewable Energy Program ( ) MW for local electricity needs, 27% of national electricity share. Solar Thermal Biomasse Cogeneration Geothermal 2000 Wind Solar PV Source: Energy Ministry Source: Ministère de l Energie et des Mines

36 Hybrid CSP-gas: 150 MW; 25 MW solar NEAL

37 Creation in 2013 of SKTM, a branch from SONELGAZ Shariket Kahraba wa Taket Moutadjadida for implementing the program of renewable energy in Algeria

38 Pilot Plants of 1.1 MW in the region of Ghardaïa to test in situ the following four technologies: Monocristalline silicon (452 kwc) Polycristalline silicon (452 kwc) Thin film CdTe (100 kwc) Amorphous a-si (100 kwc) In service since July 2014.

39 Wind farm of 10.2 MW at Kabertenne (Adrar): Number of wind turbine: 12. The capacity of each: 850KW In service since July 2014

40 Deployment of 343 MW solar PV in High plateaus and in the South Mois Site to connect to RIN Site to connect PIAT Site to connect to RIS Capacity (%) December 2014 January 2015 February 2015 Marsh 2015 April 2015 Souk Ahras-Laghouat -Naâma Djelfa Kaberten-In Salah- Timimoune Adrar-Zaouiat Kounta- Reggane Djanet 75 MW 22 % - 36 MW 32 % Ouargla-Elbayadh - Tamanrasset 66 MW 51 % Sétif-Batna-Tigharghar- M-Sila-Saida BBA-Mila-Sidi Belabbes Adrar-Aouelef Tindouf 119 MW 85% MW 100% Total 265 MW 53 MW 25 MW 343 MW 100% RIN: Réseau interconnecté (interconnected grid) PIAT: Pôle In Salah-Adrar-Timimoune RIS: Réseaux Isolés du Sud (isolated grid of the south)