Renewables 'rising on MENA agenda'

Despite multiple barriers ranging from regulatory issues to a economy dominated by the needs of the oil and gas industry, the Middle East and Northern Africa (MENA) is increasingly striving for renewables and solar power, in particular to lessen its dependence on fossil fuel generation, speakers at a panel on MENA PV markets at the Intersolar conference in Munich stressed. 

"The MENA region is quite challenging for renewable energy in general. There is a great potential for solar and wind, but the energy structure is not easy for renewables or PV to enter," said Anita Richter, a project leader at Germany's society for international cooperation, or GIZ.

Widespread fossil fuel subsidies are in the way of the development of renewables as much as regulatory barriers in the region, she added.

"But during the last years, we have seen renewables and solar energy climbing up the political agenda. Governments seek alternatives to a purely fossil dominated energy sector."

The main driver for ambitious renewables targets being adopted across the region is a rapidly rising energy demand.

Fuel importing countries such as Morocco, Tunisia or Jordan need to reduce their dependence on fossil imports to enhance energy security.

Fuel exporters such as the Gulf states, Libya and Algeria also strive for an increase in renewables as a rapidly rising domestic demand is eating up an ever greater share of their fossil production, leading to a value destruction in local economies, she explained.

As MENA countries need a new business model, several of them are changing policies in order to stimulate local RE production.

Jordan is the "most dynamic market at the moment, confronted with a high rise of electricity production cost of around €0.18 per kilowatt hour," Richter said. "Everything you do with PV will reduce average costs."

The fossil-fuel importing country has recently introduced a net-metering scheme for PV, Richter said.

Jordan, which now has an overall power generation capacity of 2.8GW, has a 2020 PV target of 300MW, according to Amer Barghouth, policy analyst at the Regional Centre for Renewable Energy and Energy Efficiency, or RCREEE, in Cairo.

The desert country was cut off most gas imports in the wake of the political upheavals in Egypt, which before made up 100% of its fuel for power generation, and now has to import much more expensive and polluting heavy fuel and diesel, Barghouth explained.

But even fossil exporters increasingly see the value in renewables.

Gas-rich Algeria, for example, has 330MW of PV under construction by SKTM, a renewables unit of state-owned gas company Sonagaz.

The country also is one of the first in the MENA region to have introduced a feed-in tariff that ranges from €0.119 to €0.148 per kWh for projects under 5MW during the first five years.

Another very interesting market is represented by Egypt's numerous off-grid diesel generators at hotels and resorts that now produce power at a very high cost of around €0.3 per kWh.

"Those are very low hanging fruit" that can be replaced by PV, Barghouth said.

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