CHARACTERISTICS OF REGIONAL INITIATIVES FOR RENEWABLE ENERGY

Transcription

1 Cairo Climate Talks- El-Sawy Wheel- Cairo 2012 CHARACTERISTICS OF REGIONAL INITIATIVES FOR RENEWABLE ENERGY By Prof. Hafez El-Salmawy Egyptian Electric Utility and Consumer Protection Regulatory Agency

2 REGIONAL INITIATIVES SUPPORTING SOLAR ENERGY/RENEWABLE ENERGY Solar energy can benefit from the recently adopted European directive (2009/28/EC), which enables European countries to build renewable plants in a third country, providing that electricity will be physically exported to Europe. Two regional Initiatives are presently available which are; the Mediterranean Solar Plan (MSP) and Desertec. The general theme of the two initiatives as well as the European directive is building renewable energy plants (mainly Solar) in the south Mediterranean countries (or MENA region in Desertec) and export part of their produced energy to Europe.

3 Renewable Energy Resources in EU- MENA Biomass (1) (Typical Yield in GWh el /km²/y) Geothermal Energy (1) Wind Energy (30) جهاز تنظيم مرفق الكهرباء وحماية المستهلك Hydropower (30) Solar Energy (250)

4 Motivation for Regional Initiative High Regional Potential Fighting against climate change Political conversation on both Mediterranean shores Energy Security Socio-Economical Impact

5 Framework Commercial Backing Characteristics of Regional Initiatives MSP Dii Art. 9 of the 3 rd EU Energy Package Governmental UFM Under Development Private Sector Initiative Internal European Policy 400 Bil. Bilateral Agreement Regional Scope Euro/Med. Euro/MENA EU Neighboring Countries Scope of Implementation Territory of Consumption Technology Orientation RE/EE.RE/ Water Disal RE Partially SMC and Partially NMC Partially SMC and Partially NMC NMC Flexible CSP Flexible Target 20/20/20 Not Defined Not Defined

6 Challenges to the Regional Initiatives Political and Regulatory Framework Fund and Support Scheme Physical Infrastructure Technology transfer and capacity building Stimulation of Initiative externalities (i.e industrial, social development, etc.)

7 CHALLENGES TO THE ADOPTED CONCEPT Time needed to develop the required infrastructure as well as mobilizing necessary investments. Quick evolution of the power demand in south Mediterranean over the period necessary for the development of necessary infrastructure, which will rely principally on conventional sources. Economical constraint regarding operating these transmission lines on renewable energy solely without considering mixing with conventional energies or expensive storage techniques. Substantial changes needed in the European markets which include, limited number of injection points, new congestion management protocols, market integration, opening the internal electricity market to south Mediterranean counties

8 Source; Arab Union of Electricity Total Added Capacity = 199,620 MW

9 EXISTING AND FUTURE INTERCONNECTIONS This project is co-financed by the European Union 9

10 TRADE RENEWABLE ENERGY OF All regional initiatives such as Dii and MSP as well as Article 9 of the third European Energy Regulations Package have adopted the concept of Direct Trade of Renewable Energy (DTRE). DTRE relies on establishing a super Euro-Med Interconnection grid to enable electrical energy generated from renewable sources to be transmitted to Europe In the TRANS-CSP. Study conducted by DLR three technical options of transferring solar electricity from MENA to Europe have been explored including: via hydrogen conventional alternating current (AC) grid High voltage direct current (HVDC) infrastructure.

11 INDIRECT TRADE OF RENEWABLE ENERGY Too expedite renewable energy development, curbing higher reliance on conventional sources in south Mediterranean as well as enable additional scheme for RE trade, three indirect RE trade schemes are proposed, these include: Swapping with Natural Gas (i.e. green natural gas), In this scheme: SMC exports to Europe, an equivalent quantity of NG necessary to generate the same quantity of electricity corresponds to RE (considering high Efficiency CC plant), which consumed in the south. Unbundling the origin of energy from physical energy through the use of Tradable Guarantee of Origin Certificates Physical trading of goods, (e.g. exporting RE content in commodities)

12 JUSTIFICATION FOR EGYPT TO JOIN THE REGIONAL INITIATIVE. Egypt is a rich country with Renewable Energy. Egypt is heading towards a shortage of its oil and gas supplies. Aggressive demand increase due to increase in population, urbanization and economical development. Largest power system in the south Mediterranean which enable exchanging substantial quantity of energy. High potential for local supplies. Good track record for international investment. Key player in Euro-Med Policies

13 CHALLENGES FOR EGYPT. Direct interconnect to Europe will take time. Assure a high credit capacity for the RE sources as well as develop its large storage projects (pumping and storage). Further improvement to its investment and regulatory frameworks are needed. Capacity building is needed. Adopt new project guarantee mechanisms as well as risk mitigation mechanisms. Develop the local demand for RE energy to get the benefit of economy of scale as well as to stimulate local manufacturing

14 Innova&ve Financial Tools EXISTING MITIGATION TOOLS Criteria MIGA IDA PRG Include a policy risks coverage for change in regulations that may impacts project s profitability Include a legal risks coverage for abrogation, repudiation, and/or impairment of contract, including forced renegotiation of contract terms Include a legal risks coverage for expropriation risks OPIC (ECA) Unistrat Coface (ECA) Include a country risks coverage for war and civil disturbance; or other politically motivated violence Include a financial risks coverage for currency inconvertibility/ non-transferability Cover the project for at least 15 years (and possibly up to 20 years) Not specified Do not have conditions over the nationality of the investor

15 THANK YOU FOR YOUR ATTENTION