Global Energy for the Mediterranean

Transcription

GEM
Global Energy
for the Mediterranean
Bi-annual publication nº 11 - November 2013
Building a Common Mediterranean Energy Vision
THE MOROCCAN ENERGie TRANSITION
ABDERRAHIM EL HAFIDI,
General Secretary by Interim, Ministry
of Energy and Mines of Morocco
TOWARDS A SUSTAINABLE EUROMEDITERRANEAN ELECTRICITY MARKET
FRANCESCO STARACE, CHAIRMAN RES4MED
AND ENEL GREEN POWER CEO
ENERGY FUELS MEDITERRANEAN
RENAISSANCE
LEONARDO BELLODI,
EXECUTIVE VICE PRESIDENT GOVERNMENT
AFFAIRS DEPARTMENT, ENI
MEP Turkey - Mediterranean Energy Perspectives Turkey
East Mediterranean Gas: an overview
Morocco-Spain interconnection
Optimal market design for a sustainable RES integration in
the electricity markets: a joint OME and Res4Med study
EU-GCC cooperation on energy: challenges and opportunities
Solar thermal in the Mediterranean region: a solar thermal action
plan for investment promotion
Editorial
04
04 I Chairman’s editorial
Bruno Lescoeur
05 I A MESSAGE FROM THE GENERAL DIRECTOR
Dr. Houda Ben Jannet Allal
Special Features
06 I
06
THE MOROCCAN ENERGY TRANSITION
Abderrahim El Hafidi, General Secretary by Interim, Ministry of Energy and Mines of Morocco
09 I
towards a Sustainable Euro-Mediterranean Electricity Market
Francesco Starace, Chairman Res4Med and Enel Green Power CEO
12 I
Energy fuels Mediterranean renaissance
Leonardo Bellodi, Executive Vice President Government Affairs Department, ENI
Analysis
14 I
MEP TURKEY – MEDITERRANEAN ENERGY PERSPECTIVES TURKEY
Lisa Guarrera and Julia Alcántara, OME
Global Energy for the Mediterranean (GEM)
Biannual Publication by Observatoire Méditerranéen de l’Energie
Publication Director: Dr. Houda Ben Jannet Allal
Ceyde comunicación gráfica, C/ Ciprés, 208; 40140, Valverde del Majano, Segovia
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Content
18 I
East Mediterranean Gas: An Overview
Sohbet Karbuz, OME
22 I
Morocco-Spain Interconnection:
A Model of Energy Cooperation between the Two Mediterranean Shores
Abdellatif Bardach, ONEE, Hassan Abaach and Matteo Urbani, OME
26 I
Optimal market design for a sustainable RES integration
in the electricity markets: a joint OME and Res4Med study
Davide Colzani, Enrico Malusardi, Marco Pasquadibisceglie, Giovanni Tagliabue, EDISON
30 I
EU-GCC cooperation on energy: Challenges and Opportunities
Emanuela Menichetti, OME
35 I
Solar Thermal in the Mediterranean Region:
A Solar Thermal Action Plan for Investment Promotion
Abdelghani El Gharras and Emanuela Menichetti, OME
OME life
40
How to reach OME
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GEM I Global Energy for the Mediterranean
EDITORIAL
Bruno Lescoeur
CHAIRMAN’S
EDITORIAL
Dear Readers,
It is a real pleasure for me to present this new issue of
GEM Magazine as Chairman of OME.
First of all, I would like to reiterate my special thanks
to our members for trusting me and appointing me
new OME Chairman. I would like also to congratulate
Eng. Raafat El Beltagy, our former Chairman, who led
the Association with lots of commitments despite the
difficulties and various challenges to face.
The changes which the energy sector has faced almost
everywhere in the last few years, the economic and
financial crisis still prevailing in the North, and the
sociopolitical changes occurring in the Southern
Mediterranean region, since 2011, have impacted OME
and give our Association more than ever its raison d’être.
OME aims at strengthening the co-operation in the
energy field between the companies and the countries in
the Mediterranean region, and this regional cooperation
is more than ever necessary as than ever as confirmed
by our last General Assemblies and events.
OME is the single regional voice of the energy industry
in the Mediterranean and will keep on conveying the
point of view of its members towards the authorities and
stakeholders, whenever necessary - as it started doing
in 1995 at the occasion of the Barcelona Process launch
and very recently at the energy ministerial meeting of
Union of the Mediterranean countries -.
Our prospective analysis and our scenarios are a
reference and constitute an important decision making
tool. We are also following closely the development of the
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energy sector in all fields and areas (energy efficiency,
hydrocarbons,
renewable
energy
development,
technological changes, market integration, energy
policies, institutional and regulatory aspects …) and our
studies and analyses in these various fields are as well
very useful insights for our members.
Concerning the future and priorities of my mandate,
I would like, first of all, to widen OME family to new
members and to welcome back important members who
have all their place within our organization. I am also
hoping to reinforce the presence of Southern countries
in our Association and will ensure that OME promotes
further not only North-South but also South-South cooperation.
Our activities in the three coming years will be based on
the following four pillars:
1. Energy efficiency as a pillar for a sustainable energy
system in the region;
2.Making the best use of all resources and technologies
at regional level;
3.Contributing to well-designed and stable public
policies;
4.Capacity building, exchange of information, best
practices and experiences.
In this context, we have agreed on a rich and ambitious
roadmap gathering the following objectives and related
activities:
• To reinforce our co-operation with our partners and
to extend it to new partners for projects of shared
interests and organization of common events;
A Message from
the General Director
• To improve communication.
We have also decided to widen our topics on new
subjects of interest and impact on energy in the
Mediterranean, such as water and the link water/
energy and energy/water in partnership with partners
like IME and Plan Bleu.
We are also committed to strengthen our co-operation
with all the associations and regional organizations
interested in energy in the region (Ipemed, Medelec,
Medener, Medgrid, MEDREG, RCREEE, Res4med,…).
In this context, and in order to facilitate dialogue and
coordination between these organizations, we are
planning to launch a “Mediterranean Sustainable
Energy Week” which would be held once every two
years and which would be the opportunity of major
gathering around a regional conference to take stock
of the progress in the energy field in the region and
also the challenges ahead, during the release of our
MEP (Mediterranean Energy Perspectives) flagship
publication.
I am also very pleased with the co-operation recently
launched with the EIB and which led to the organization
of a very important conference on energy efficiency in
the Mediterranean on December 10th. We intend to
continue reinforcing further this cooperation.
A similar initiative
consideration.
with
EBRD
is
also
under
We will definitely continue our partnership with the
Union for the Mediterranean (with which we have
signed a MoU) and with the European Commission in
particular. I am also concerned about climate change
issues and OME will be active at the next Conference of
Parties which will take place in 2015 in Paris.
Finally, I would like to thank OME staff for the
impressive work and particularly the General Director
Dr. Ben Jannet Allal for the new impulse she is giving
to our Association. I’m very glad and proud about the
efforts made to promote the Association which places
it in the high ranks with a unique role of voicing the
energy industry point of view. It is very important to
have the possibility of expressing companies’ opinion
in particular in this quite complex and challenging
period: recession in the North, strong dynamism in
some countries, and more uncertain situation in the
South and East and also several changes in the energy
sector at world level.
Dr. Houda Ben Jannet Allal
Dear Readers,
At a time where Union for the Mediterranean member
countries are giving new impetus to the energy partnership
in the region, the already important role of the Association in
enhancing and raising such cooperation through its regional
events, studies and training activities, is demonstrated
further through the Declaration to be submitted to the
Ministers as part of the Ministerial meeting of the UfM to be
held on 11 December, in Brussels.
We are particularly glad about the strengthening of our
cooperation with regional organizations interested and
dealing with energy in the Mediterranean and the successful
meeting held with them at OME premises in June 2013. A
constructive dialogue is being established between all of
us and OME will keep on promoting such initiative with the
purpose of building a common Mediterranean vision.
I’m also very eager to announce that we have been awarded
three new studies/contracts including a large EC project
OME coordinates (DNI Cast Project) which highlights the
acknowledged regional expertise of OME. I am also proud
to announce our new publication MEP Turkey that has
been made possible thanks to the valuable support from
our Turkish members -TEIAS, EUAS and Botas - and also
Turkish authorities and in particular the Ministry for Energy
and also to the commitment of OME team and guest experts
as well as OME Members to whom I would like to renew my
most sincere thanks.
I would like to warmly thank our guest authors who have
contributed to enrich this issue of GEM on topics of high
interest: energy transition, cooperation and partnership,
energy fuels Mediterranean renaissance, interconnection
which I hope you will enjoy reading.
All these topics are discussed more in details in this issue
where you will find an OME Life quite loaded and rich with
lot of events and for which I would like to express my special
thanks to our members for their continuous support, our
partners for their trust and OME team for their commitment.
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SPECIAL FEATURES
THE MOROCCAN
ENERGY TRANSITION
Abderrahim El Hafidi,
General Secretary by Interim - Ministry of Energy
and Mines of Morocco
The world is experiencing profound changes which
will impact the current production in order to ensure a
sustainable development in emerging and developing
countries which are currently present in the international
scene thanks to the strong growth of their economy as
well as the urgent need to carry out the transition to a
new sober and carbon-free energy system.
The energy transition is one of the priority aspects of
a global transition to renewed economic models. It is
considered as an ‘ardent obligation’ to face the growing
energy demand, fears of visibility on prices of fossil fuels,
geopolitical tensions related to access to fossil energy
resources and the environmental consequences of shale
gas exploitation.
At the worldwide level, this energy transition will face
major issues namely:
•emergence of developing countries with a strong
economy and energy demand growth,
•exacerbated pressure on fossil fuels which are in
progressive exhaustion and will remain at high prices,
•urgent need to limit greenhouse gas emissions andfight
global warming in addition to thepressing need for rapid
decarbonization of fossil energy products,
•sharp increase of development of renewable energy
and energy efficiency, implementation of a wide
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range of proven and new technologies, and of national
and regional strategies for securing the supply and
generalizing access to energy at reasonable,
•mobilization of the necessary energy investments
needs.
Based on these historical trends, Morocco is in accelerated
impulse to ensure its economic and social development
as part of sustainable development which reconciles
economic growth, social equity and conservation of the
environment.
Therefore, Morocco has experienced, during the past
ten years, high growth of its gross domestic product,
which despite the global economic crisis, remained at
acceptable levels.
Living standard of the population is improving with more
demands in terms of education, health, housing and
transport. This development resulted, in the last 5 years,
in a high energy demand growth, and in particular, the
electricity one.
Morocco, being confident about its human and economic
potential and its strong credibility vis-a-vis external
partners, started a new phase of development with the
achievement or launch of various projects, both at local,
regional and national levels. These concrete projects have
been designed as part of an energy transition developed
around clear objectives and rigorous and coordinated
action plans.
Due to their integrated design and scale, these projects
represent major breaks in key sectors of water
(mobilization of water resources and their rational
management), energy (development of renewable energy
and energy efficiency, Moroccan solar energy project of
2,000 MW), agriculture (green Morocco Plan to transform
the country into an agriculture and non-rural country),
tourism (Azur Plan for a developed tourism respectful
of natural landscapes and coastline), housing (citybuilding of a new generation in a friendly and healthy
living environment), industry (Emergence Plan for
modernization and development of the industrial fabric)
and infrastructure (extension of the motorway network,
new ports and airports, opening up of rural areas) and
the new logistics strategy. It is a true leap forward that
Morocco knows with the realization of these projects
that incorporate the requirements of sustainable
development based on good governance, development of
human resources, protection of the environment and the
sustainability of natural resources.
This unprecedented boom causes the growth of various
forms of energy needs to a steady annual average growth
rate of 5%. Thus, by 2020, the primary energy consumption
is expected at least to double, and to triple for electricity
compared with 2008 levels.
In this context, Morocco being confident about its human,
economic potential and its strong credibility to its
external partners, is pursuing, since 2009, an ambitious
policy of energy transition as part of a comprehensive
approach and that considers sustainable development as
an integrated concept in many human, social, economic,
technological and environmental dimensions.
In this perspective, the refoundation of the Moroccan
energy system aims at contributing in building a new
project in order to propel Morocco at the heart of
modernity and the new economy of knowledge and
intelligence which characterizes the historical orientation
of the 21st century.
Indeed, the roadmap of the Moroccan energy transition,
developed in accordance with the high Royal guidance,
is designed to meet the growing energy demand which
induces the economic and social growth that Morocco
is undergoing under the leadership of his Majesty King
Mohammed VI. The major objective of the roadmap is to
ensure security of supply and universal access to energy
at optimized prices, mobilization of national energy
resources mainly the significant potential in terms of
renewable energy in the country, promoting energy
efficiency and integration of Morocco into the regional
energy system with respect of environment preservation.
In order to achieve these goals, the energy transition
adopted by the Kingdom of Morocco aims at:
•implementing a diversified and optimized energy
mix, mainly for electricity, with clean, reliable and
competitive technology choices.
•developing at a large-scale of the significant national
resources in renewable energy, especially solar and
wind power, to cover a substantial part of the energy
needs, reduce energy dependency, reduce greenhouse
gas emissions and protect the environment.
•promoting energy efficiency, set as national priority and
as the quickest and cheapest in order to better use and
save energy while reducing our energy bills.
•mobilizing national fossil resources by intensifying oil
and gas explorations and the development of the huge
deposits of shale oil.
•The integration into the regional African and EuroMediterranean energy system in order to strengthen
energy security, lower supply costs, expand trade,
develop cooperation, technology transfers and solidarity.
•Applying means for the preservation of environment in
all energy activities.
Taking into account that fossil fuels remain still dominant
in the world in the next 30 years, Morocco is committed to
use them with responsibility by using clean technologies
and imposing standards of gaseous emissions in
industries which produce and consume such energy.
Coal will be used in basic electricity production by power
stations of high productivity by using the most modern
methods to reduce CO2 emissions and recycled particles.
Cleaner natural gas introduced in the Moroccan energy
system by in-kind royalty of the Maghreb-Europe Pipeline,
is supplying two combined-cycle power plants and its
development by imports of natural or liquefied forms is
planned as an alternative to coal and oil.
Whereas oil whose share in the energy balance will
decrease by about 60% to 43% by 2020, will be cleaner
especially in transport. Thus, since April 2009, only the
unleaded premium gasoline and diesel 50 ppm are being
sold on the market.
Exhaustible and polluting fossil energy are sources of
transition which will be raised gradually by clean and
inexhaustible renewable energies of which technology is
progressing quite rapidly to allow more extensive use at
affordable prices. Morocco has considerable assets to
achieve this transition.
The Moroccan wind power potential is estimated at 25 000
MW of which nearly 6000 MW are achievable by 2030 in
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identified land areas where the wind speed reaches an
average of 9 m/s of 40 meters from the ground.
In terms of solar potential, Morocco enjoys around 3000
hours of sunshine per year which is equivalent to more
than 6.5 KWh/m2/day of irradiation.
An extensive and integrated program of power generation
from solar and wind will speed up their development. For
this purpose, two large-scale projects were launched to
develop 4000 MW by 2020 on qualified sites.
Morocco is situated in a strategic position right at heart
of vital energy crossroads as a meeting point between the
Atlantic Ocean and the Mediterranean Sea which makes
Morocco becoming a global energy platform and playing
a central role in the increased electrical trade between
countries of the Mediterranean region. Thanks to
interconnections it developed and keep on strengthening
with Spain and Algeria, it constitutes a key point in the
“Mediterranean electrical loop” under construction.
Regional projects launched in renewable energy,
including solar and wind power, allow Morocco to play a
dynamic role in the Mediterranean Solar Plan and other
regional initiatives which aim at promoting synergy in the
development of these energy sources in the Med-Euro
region.
In addition to renewable energy development, energy
efficiency is a major priority in our Moroccan energy
transition, and considered as the least expensive way
to save energy, reduce our dependence on fossil fuels
and preserve the environment. The ambition of Morocco
is to save 12% in 2020 and 15% by 2030 of its energy
consumption.
In this perspective, energy efficiency action plans were
implemented in all key sectors, mainly transportation,
industry and building which are considered as the most
consumers of energy. These plans aim at:
•renovating industrial equipment, modernizing vehicle
fleet, installing more efficient household appliances,
using low consumption lamps;
•promoting cogeneration in industry, adopting Eco
architecture in building, extension use of solar water
heaters;
•developing and modernizing the public transportation,
better traffic management, building green cities;
•change of attitudes in relation to the use of energy
through raising awareness campaigns, education and
training.
In terms of legislative, regulatory and institutional
levels, the Moroccan energy transition is noted by the
implementation of reforms needed to speed up the
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development of renewable energy and energy efficiency.
This is how laws relative to the development of renewable
energies and enhancing energy efficiency were
promulgated.
Morocco is seeking through large-scale development
of renewable energy not only the exploitation of local
resources but also the appropriation of technology,
industrialization and the strengthening of research and
development and training in different fields related to
these energies to sustain their growth. Morocco aims
also at creating jobs, income and new jobs at the national
and regional levels.
Therefore, to promote the development of our industrial
base in solar and wind power fields, the contractors of
integrated programs of electricity generation projects
using solar and wind power will be required to get
its suppliers from the local industrial market for the
components it manufactures and to contribute to its
development in this area.
For the improvement of technologies and local knowhow in the renewable energy sector, Morocco took the
initiative to create the Institute of Solar and Renewable
Energies research - IRESEN – that is entrusted with a
mission to improve the ability to innovate, support and
extend the R&D structures and encourage as well their
synergy between industry and universities.
Skills necessary for the renewable energy sector and
energy efficiency, are crucial to our energy transition. Our
training needs by 2020 is 5300 for the engineers, 17900 for
the technicians, sales and marketing people and 23900
for the skilled workers.
Local development is identified also as a cornerstone
of the sustainable social and economic growth. The
development of renewable energy meets the requirements
of the era of advanced decentralization that Morocco has
set as a major project which is brought into relief by the
distribution of the solar and wind power projects in the
different regions.
The Moroccan political energy transition aimed to build a
sober energy system in carbon and to sustainably meet
the energy needs of present and future generations,
by doing this, Morocco adheres into a long term global
environmental view which aims at: the protection
and preservation of resources and ecosystems,
the improvement of citizen’s quality of life and the
implementation of operational plans around an adaptiverenewal economic model.
SPECIAL FEATURES
towards a Sustainable
Euro-Mediterranean
Electricity Market
Francesco Starace,
Chairman RES4MED and Enel Green Power CEO
In the Mediterranean basin, energy demand is rapidly
increasing, driven by a fast growing population. In the
Southern and Eastern shores of the Mediterranean, from
Morocco to Turkey, population will increase by 5-9% in
the next 20 years: electricity generation needs to match
this trend and renewables could play a critical role in this
framework. On the other hand, in Europe because of the
economic crisis and the introduction of energy efficiency
measures, energy demand has stabilized and in some
areas even reduced. Renewable Energy Solutions for
the Mediterranean (RES4MED), has carefully observed
this situation and is proposing a strategy to deal with
these energy challenges in the basin, together with other
leading initiatives committed to RE promotion.
RES4MED, an additional Initiative
for RE deployment
RES4MED is a non-profit association set up in 2012 by
CESI, Edison, Enel Green Power, Gestore Servizi Elettrici
(GSE), PwC and Politecnico di Milano. Asja Ambiente,
Fondazione Ugo Bordoni and Terna have joined as
partners, while Althesys, Aper, Assosolare and RSERicerca di Sistema Elettrico are affiliated members.
Università Bocconi and Politecnico di Torino have
honorary member status. RES4MED intends to be a
catalyst for the ongoing Mediterranean initiatives, while
involving key players from North Africa, the Middle
East and the Balkans. With its members’ expertise
and knowledge, RES4MED wants to present itself
as an additional reference point for Mediterranean
stakeholders committed to renewable energy promotion.
RES4MED’ strategy and actions, in partnership with other
MED initiatives, focus on three main issues.
Firstly, RES4MED looks carefully at Southern and Eastern
Mediterranean countries’ (SEMCs) energy needs. In this
framework, in addition to large scale RE power plants,
distributed generation and smart grids play an important
strategic role to serve a booming electricity demand.
Besides meeting this demand, renewables deployment
in the Southern and Eastern Mediterranean countries
will have multiple positive impacts in terms of energy
security and industrialization. Clearly, renewables
represent an instrument to create new jobs for the local
workforce in SEMCs, and therefore improve internal
political and social stability. As the Arab Spring has
showed, unemployment creates frustration and anger
against local governments, threatening social order. This
is why renewables could contribute to job creation in this
area. In fact, as an OECD study shows, renewable energy
plants have higher labor intensity per unit of installed
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capacity than fossil fuel plants. The benefits thus created
will affect both skilled and unskilled workers: the
components design and production would create jobs
for the first category, whereas power plant operation
and maintenance phases would be more suitable for the
second ones. These activities will require the progressive
transfer of technologies and competences from investors
and international companies to local stakeholders; in
the long run, the value chain will be expanded and new
competences could be created thanks to vocational
training programs.
In terms of energy security, renewables could positively
impactfossil-fuel importing and exporting countries.
For importers, (such as Morocco, Jordan and Lebanon)
RE deployment will reduce fossil-fuel dependency,
thus improving national balance of payments. These
countries could, therefore, save huge amounts of
money on their electricity bills and free up resources
for other internal scopes. For exporting countries, such
as Algeria, Libya and Saudi Arabia, electricity produced
from renewables means less oil and gas has to be
consumed domestically, leaving them for more profitable
export. Since in these countries electricity is heavily
subsidized by national budgets, investing in renewables
would then reduce the burden on national coffers.
In terms of social and economic development,
renewables will have positive impacts in SEMCs. Since
small-size plants could satisfy the electricity needs
of the remotest and most disadvantaged areas far
from the grid, energy access will be improved with
positive impacts for local economic development. Women
conditions could benefit from renewables as well, since
most of their time is employed at home heating houses
and cooking. A reliable electricity access would reduce
the time young people need to spend at home, time that
could be instead spent at school.
ELECTRICAL MARKET INTEGRATION
IN SEMCS: WORKING TOGETHER
The second aspect RES4MED focuses on is electrical
market integration in SEMCs. Still much is ahead of
us in this respect, especially if we think about lacking
infrastructure in the region. National and regional
grids need to be strengthened electricity markets
need to be integrated by defining, transport tariffs,
connection, financing rules and national operators’
rules. This electrical market integration in the region is
a pre-condition to the North-South connection, between
European Countries and the Southern area of the basin.
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The third main area RES4MED is working on is Renewable
Energy MED (MED RE) initiatives’ coordination.
RES4MED’s mission is to play a role as a “network
of networks” in order to strengthen collaboration
and co-operation among the ongoing industrial and
institutional Initiatives, such as Dii, Medgrid, OME, MEDTSO and Medreg. An initial contribution is represented
in RES4MED’s Knowledge Management System (KMS),
a virtual platform where key analysis and findings
developed by the Mediterranean region’s actors are
collected and structured. This innovative instrument
allows for research sharing between Mediterranean
initiatives, while creating synergies within a privileged
network. KMS is open to contributions from institutions,
investors, researchers, and any other stakeholder willing
to share RES4MED’s mission and goals. Besides the
KMS, RES4MED has organized, a major conference within
SOLAREXPO in Milan last May, to discuss the basin’s
electricity needs with the most important RE actors in
the Mediterranean. Furthermore, RES4MED has been the
promoter of a joint paper representing the RE industry
point of view on the Mediterranean Master Plan to be
delivered in the occasion of the EU Mediterranean Energy
Ministerial Meeting of December, 11 in Brussels.
THE INDUSTRIAL INITIATIVES’
PRIORITIES
After 3 years of consultations, the Union for the
Mediterranean is about to present the Mediterranean
Solar Plan’s Master Plan to the EU Mediterranean Energy
Ministerial Meeting to get the official endorsement.
This document provides a regional strategic framework
and a policy roadmap for coordination and cooperation
to deploy renewables in the Mediterranean, covering
policy and regulation, financial support tools, market
integration, transmission infrastructures and industrial
development. The MED RE Initiatives have provided inputs
throughout the drafting process. RES4MED now believes
the most critical phase comes with the implementation
of the MED Solar Plan. This is why we took the initiative
to highlight the RE industry’s priorities within this
document and outline them on a joint paper, written by
RES4MED, Dii, and MEDGRID, supported by OME. In
drafting this document, RES4MED considered the energy
context in the Mediterranean, where the Northern and
Southern shores countries face two opposite situations.
Southern and Eastern Mediterranean Countries (SEMC)
need to cover their increasing energy demand and
improve energy security. Many countries are undergoing
a phase of political transition and their rapidly rising
electricity demand requires immediate solutions, since
an electricity crisis would further complicate the
situation. The issue for the SEMC countries is to attract
investments in order to have the necessary power facilities
built in time. A credible plan for progressive market
liberalization (transparent and non-discriminatory thirdparty-access to the grids, freedom to invest in power
generation, liberalization of client segments, creation
of liquid platforms quoting forward prices) is crucial to
attract foreign capital needed to keep pace with rising
demand.
EU Member States, on the other hand, face the need to
reorganize their energy markets. The economic and
financial crisis is the most pressing challenge today: the
economic downturn and energy efficiency measures have
stopped the traditional power demand increase while
massive RES penetration (mainly wind and PV) will allow
EU countries to reach their 2020 RES target just with
their domestic generation. The decarbonization of the EU
electric system is likely to continue as aging generation
assets will be retired and replaced by renewable
power plants and distributed generation. For a while,
overcapacity, sluggish demand and increasing need to
integrate renewable sources into the power system will
raise the need for a new electricity market design.
While keeping these two different sets of objectives in
mind, RES4MED and the other initiatives have formulated
the industry’s “must-haves” in the Mediterranean for the
deployment and integration of RES in the region. We have
grouped our priorities in four main categories, policy and
regulation, business models and financing, infrastructure
development and socio-economic impacts of and knowhow build up.
For the policy and regulation aspects, we believe
that the creation of a business-friendly environment
is the pre-requisite for RE deployment. In order to
start a steady transition to renewables in Southern and
Eastern Mediterranean Countries, certain aspects of
regulation are indispensable for any developer/investor,
so that building and operating RES power plants and
the associated grid infrastructure become a standard
business. As for the business models, off-takers entities
should be allowed by regulators, and no particular
preset business model should necessarily be applied
throughout different legal and regulatory structures
across the region. We are convinced that PPA schemes
are the appropriate instruments for large-scale projects
in SEMCs.
The role of distributed generation solutions deserves
greater attention in SEMCs, as grid/market parity
conditions are already achievable in several specific
instances, like PV rooftops, res-hybrid village power,
bio energy plants using urban waste and agricultural
residues, smart cities. The legal, institutional and
regulatory framework should be adjusted accordingly.
As for infrastructure, political and institutional
stakeholders should dedicate a greater attention to
regional grid planning and interoperability; in particular,
intra SEMC interconnections should be strenghtened
and cross border power transactions fostered to follow
market drivers as well as for balancing reasons. Even
without (yet) a liberalised energy marketplace or fully
fledged power exchanges, market drivers are intrinsically
present in form of surplus/deficit balances, diversified
day/weekly demand patterns, different internal prices.
North-South interconnection projects shall follow
in due course, as a further system integration, and
some projects will be anticipated if tied to specific
business cases like merchant lines or export-oriented
integrated generation-transport-off takings projects.
Identifying and implementing viable business cases for
1-2 interconnectors between North Africa and Europe
is a priority . Independently of the initial business case,
capacity allocation rules must be designed so that the
interconnector can be used flexibly over its lifetime, e.g.
by allowing financial long-term transmission rights.
The socio-economic impacts of this RE deployment will
be significant for these countries, in terms of job creation
and know-how build-up. This requires private sector’s
involvement along the whole value chain to generate
positive employment: a market for renewables as well as
investment in local manufacturing are equally necessary.
These priorities will be outlined in Brussels: Dii, Medgrid
RES4MED, supported by OME have carefully drafted
this document to promote a joint effort of the public and
private sector.
These must-haves can all be implemented in the shortterm, if politically supported and no significant amounts of
public funds are not required. These industrial initiatives
will continue to provide inputs and constructive opinions
in order to develop a sustainable euro-mediterranean
electricity market, in cooperation with other institutional
actors, such as the Union for the Mediterranean, Med
Solar Plan, MEDTSO and MEDREG. Since its creation,
RES4MED has strongly supported the idea of creating
a stable dialogue among all the Mediterranean actors
committed to RE promotion to exchange ideas. This joint
paper is just the first step in this broader picture.
11
Energy fuels
Mediterranean
renaissance
Leonardo Bellodi,
Executive Vice President Government Affairs Department, ENI
At a first glance the Mediterranean today is the
quintessence of geopolitical and economic distress. On
its Southern shore, what many have long called “the
Arab Spring” seems to potentially turn into a cold winter.
Security is still precarious, economy is shrinking and
people are still rallying in the streets. The relatively
tranquil scenarios of countries in North Africa which
have supplied Europe with significant proportions of their
oil and natural gas have been subverted and destabilized
by the upheavals of the past couple of years.
As for Southern Europe, it is the area of the Old Continent
most affected by the recent industrial recession
which has plummeted, among others, energy demand.
Europe has indeed experienced the most severe gas
demand contraction of the past 30 years. In addition, gas
has been also facing increased competition with other
energy sources in Europe, including coal.
Beyond the Mediterranean, the global energy context
has also deeply changed. In first place, discovery and
exploitation of unconventional gas in the United States
have drastically decreased its gas import need, freeing
up significant gas volumes for the rest of the world.
Consequently, LNG supplies originally planned to be
delivered to the North American market have been
redirected and LNG tankers sailed to Europe.
A side effect of this process is the creation of three
“energy price islands” with remarkable gas price
differentials: gas is currently priced in the US at about
$3.5/mmBtu, in the Far East at $15.5/mmBtu, and
12
in Europe between $10/mmBtu (spot) and $12/mmBtu
(long-term oil indexed contracts).1 Another paradox is
disclosed by the difference between oil and gas prices.
In the US the shale gas revolution led to a “decoupling”
of oil and natural gas prices. Indeed, gas is sold at a fifth
of the WTI price.
Subverting the status quo, particularly but not only in
the gas market, the shale revolution poses a serious
threat to European economies and it risks to destabilize
Europe’s traditional gas suppliers including Algeria
and Libya. The shale revolution is indeed creating a
competitive advantage for energy-intensive companies
in the US which can rip the benefits of operating
at much lower energy costs and more competitive
feedstock than their European counterparts. In other
words, Europe is today suffering from a competition issue
vis-à-vis the US.
These dynamics have dramatically affected the relationship
between Europe and Southern Mediterranean countries:
in order to stop losses and to decrease the distance with
US spot prices, European energy companies are
renegotiating long-term contracts reducing both the
quantity and price of gas. As a consequence, diminished
funds are flowing into the public purses of exporting
countries at a time when internal demand is growing.
North African governments face a seemingly inevitable
squeeze of lower export revenues and increasing
commitments to subsidies at a time when they need to
jump-start their economies by investing in necessary
infrastructure.
How could Europe reply to the dramatic consequences
of the American shale revolution? One option could be
the development of shale gas in Europe. However, the
current political opposition and the related technological,
environmental and regulatory constraints, make this
one a medium long-term solution. The first and most
handy strategy is instead strengthening the partnerships
with traditional suppliers, namely reviewing the existing
cooperation in light of the new economic and energy
context.
Russia, for example, being endowed with massive oil and
gas resources is a key supplier of low-cost energy for
Europe and it is expected to remain so. It needs reliable
importing markets but also know-how and technologies
which can both be provided by Europe. The strong energy
interdependence between Russia and Europe should be
seen today as an asset to cope with a changing energy
market.
But Europe could also not do without North Africa. It
cannot for economic reasons, since its commercial
ties have historically made a large part of its growth:
for example, trade between Italy and the Med area were
reported to be around 57 billion Euros in 2011,2 that is
four time higher than ten years before. But the strategic
bond between Europe and North Africa is especially
related to Europe’s energy supply dependence on the
region: 35% for natural gas and 22% for oil, which
represents respectively around 85% and 50% of the
South exporting volumes.3
it is endowed, from hydrocarbons to renewables, and
favor the optimization of energy consumption as well
as inter-trade in the region. Technology would help
North African countries to develop a more sustainable
economic future, one with large opportunities for their
young workforce.
In turn, optimizing energy sources in North Africa could
indirectly benefit the Old Continent: the former, by
increasing the share of renewables in the energy mix and
ameliorating energy efficiency standards, could reduce
gas consumption making volumes available for being
exported to Europe. A joint effort in this direction is a
win-win solution for the two sides of the Mediterranean.
As such, a renewed energy partnership in the region
should be encouraged and pursued.
Energy could be at the heart of a new Mediterranean
renaissance, even in a critical political and economic
context. Although at the moment we see instability and
economic distress on both its shores, there are many
opportunities for the future. The region will continue to
be a key crossroads for economic growth and energy
security.
In perspective, the Mediterranean is a highly promising
and relevant basin. According to EIA estimates, the
potential for unconventional sources in North Africa is
huge: shale gas reserves could amount up to 20 trillion
cubic meters only in Algeria. Also in the conventional
segment the Mediterranean does not stand still: the
Levantine Basin is one of the most promising discoveries
of the region.
These resources need to be exploited in first place
to satisfy the increasing energy needs of the region.
Energy demand is expected to increase by 3.8% annually
between 2009 and 2030 4 due to demographic and
economic growth. Whereas blackouts remain a critical
issue both for households and industry in the region.
On the basis of its experience, Europe can provide
North African countries with technology transfer and
innovation. In particular, it could help the Mediterranean
to develop the full range of energy potential of which
Figures referred to September 2013.
1
SRM, 2001, Economic Relations Between Italy and the Mediterranean, Annual Report
2012.
2
MEDener, 2008, Energy Efficiency in the Southern and Eastern Mediterranean Countries:
Overview of good policies and good practices, p. 3.
3
Conservative Scenario - OME, 2011, Mediterranean Energy Perspectives, p. 294.
4
13
ANALYSIS
Lisa Guarrera and Julia Alcántara – OME
MEP TURKEY – MEDITERRANEAN ENERGY
PERSPECTIVES TURKEY
This article is an excerpt of MEP TURKEY, which is the
second in a series of in-depth country studies from
OME’s Mediterranean Energy Perspectives (MEP) series.
This in-depth study provides insights into Turkey’s
energy profile from the early 1960s to the current
situation and the outlook to 2030. MEP-Turkey presents
detailed analysis and data on the supply and demand
balance for the major components of the energy sector
with particular emphasis sectorial analysis, alternative
energies and sustainable development. It is based on
OME’s proprietary Mediterranean Energy Econometric
Model for Turkey developed for this publication.
It draws upon the extensive expertise of the OME and
a joint team of Turkish experts, energy companies
operating in the country and independent consultants.
The outlook to 2030 presents two OME
scenarios: the Conservative Scenario
and the Proactive Scenario. The
Conservative Scenario considers past
trends, policies in force and on-going
projects, but takes a cautious approach
regarding the implementation of policy
measures and planned projects. The
Proactive Scenario assumes effective
achievements to radically improve
import dependence, energy efficiency
and a more diversified energy supply mix
including more renewable energy.
14
TURKEY TODAY
A number of distinctive features characterize Turkey’s
energy sector. First, its strong energy demand which has
more than doubled in the past 20 years. Turkish Energy
Demand stands at 112 Mtoe in 2011.
Second, the energy mix is still heavily based on fossilfuels —over 70% in 2012. Turkey is dependent on fossil
fuel imports (imports exceed exports). Currently Turkey
imports 80 Mtoe of fossil fuels, equivalent to a 90% fossil
fuel import dependence ratio
Third, Turkey has copious domestic resources. Turkey
has sizeable lignite and hydropower resources. Turkey is
also richly endowed with renewable energy opportunities
with vast solar and wind potential.
Also its geography situation makes it
a key transit route. It has the potential
to play an important role in the future
development of regional natural gas
and electricity markets in the EuroMediterranean region.
Currently Turkey represents 15%
of total Mediterranean population
and 8% of its GDP. Turkish energy
demand accounts for 11% of total
Mediterranean energy demand.
ECONOMIC DEVELOPMENT
AND POPULATION WILL DRIVE
DEMAND HIGHER
TOTAL PRIMARY ENERGY DEMAND OF TURKEY
Mtoe
250
The key drivers of energy demand in the outlook are robust
economic growth at about 4.1% per year on average and
an increase of around 1% per year in population.
-19%
200
150
100
Energy demand increased from 18 Mtoe in 1970 to 112
Mtoe in 2011, an average growth of 4.5% per year. In the
Conservative Scenario, primary energy demand would
double in 2030, a 3.9% average annual rate. This path
is clearly unsustainable as it would lead to an increase
in energy intensity and in CO2 emissions as well as an
increase in fossil fuel imports.
50
0
1990
1995
2000
2005
2010
Conservative Scenario
2015
2020
2025
2030
Proactive Scenario
Source: OME database
In the Proactive Scenario, assuming most of the
Energy Strategy Paper1 measures and targets have
been implemented in a timely manner, primary energy
demand would be 19% lower. Nearly 45 Mtoe could be
saved in 2030.
FOSSIL FUEL MIX:
THE STRATEGIC CHOICE OF COAL
Unlike other South Mediterranean fossil fuel producers,
Turkey is not richly endowed with oil and gas
reserves: Turkey is a main coal producer in the region.
Turkey produces both hard coal and lignite. Although its
hard-coal resources are small, Turkey is richly endowed
when it comes to lignite. However, domestic production
only covers around half of total domestic consumption.
Turkey consumes all the lignite it produces but imports
around 90% of its total hard-coal needs.
Coal production is expected to more than double between
2012 and 2030. The majority of this increase will come
from lignite.
As a result, coal has always been one of the most
important primary energy sources in Turkey’s energy
mix. It is used primarily for power generation, steel
manufacturing, and cement production.
The share of coal in Turkey’s total primary energy supply
(TPES) was 30% in 1960. In 2012, coal’s share in TPES
was the same as it was in 1960, at 30%.
For strategic reasons, the Turkish government’s
Supreme Planning Council targeted all known coal
resources to be valorized for electricity generation
purposes by 2023 in order to reduce the share of natural
gas in electricity production.2 This means that coal
use in electricity generation will not only remain the
most important element in the coal industry, but it will
continue to play a key role in Turkey’s energy market as
well.
CURBING ELECTRICITY DEMAND
AND BOOSTING RENEWABLE ENERGY
Electricity demand is posed to increase significantly
in the period to 2030 —more than 140% increase. To
accommodate this increase around 70 GW will need to
be installed.
Electricity demand growth could be considerably
curtailed with gains in energy efficiency in the coming
years. In the Proactive Scenario the requirements would
be nearly 30% less than in the Conservative Scenario.
The electricity mix would also be very different. The
most significant change is a substantial increase in
the contribution of renewable energy sources to power
generation. By 2030, renewable energy sources could
account for more than half of the total installed power
capacity in Turkey. The greatest potentials will come
from wind and solar technologies.
15
CAPPING FOSSIL FUEL IMPORT
DEPENDENCE
INSTALLED ELECTRICITY CAPAPCITY IN TURKEY
GW
Fossil fuels are set to remain the corner stone of energy
demand in both scenarios and account for more than 85%
of primary energy demand in 2030 in the Conservative
Scenario —corresponding to a doubling of fossil fuel
imports. Regardless of the scenario, nearly all oil and
gas demand will need to be imported.
120
90
60
30
Import dependence can be improved by favoring the
domestically produced fuels, namely coal and renewable
energy sources, and by curbing demand, notably
electricity demand. With more efficient end-use sectors
—thus less demand, coal and gas demand would be
lower in the Proactive Scenario than in the Conservative.
0
2011
CS-2030
Renewables
Hydro
Oil
Coal
Nuclear
PS-2030
Natural Gas
The Proactive Scenario also assumes a strong push for
the use of domestic energy sources, particularly the
renewable energy sources in electricity generation, and
for domestically produced lignite in fuel power plants
(thus reducing the imported coal and gas from the
mix), as well as energy efficiency measure. As a result,
demand for coal is expected to be almost 20% less by
2030 compared to the Conservative Scenario. Majority
of this discrepancy is due to less coal use in power
generation under the Proactive Scenario. As such, gas
use in power generation would also drop significantly.
As a result, import dependence could drop from more
than 85% in the Conservative to 76% in 2030 in the
Proactive Scenario. Reliance on domestically produced
energies would alleviate the energy import bill.
However, even in an energy efficient future, fossil fuel
imports would increase by over 35% to 2030.
A CLEANER ENERGY FUTURE
The bulk of energy-related emissions are from fuel
combustion.
TURKEY FOSSIL FUEL PRODUCTION AND DEMAND
2011
Ktoe
Conservative Scenario-2030
Proactive Scenario-2030
250
Natural Gas
Oil
200
Coal
150
100
50
0
Production
16
Energy Demand
Production
Energy Demand
Production
Energy Demand
TURKEY CO2 EMISSIONS
Mt of CO2
600
Proactive Scenario
Conservative Scenario
400
200
0
1990
1995
2000
2005
2010
2015
2020
2025
2030
CO2 emissions have been multiplied by 10 since the midsixties and have doubled since 1990. Amongst fossil
fuels, coal has always been the main emitter of CO2
emissions. In the last few years CO2 emissions from gas
have over taken CO2 emissions from oil.
policies and measures as well as sizeable investments,
especially in the private sector.
For more details on how to purchase MEP-Turkey please
contact us at [email protected]
Electricity generation is the largest green-house gas
emitter being responsible for nearly 60% of total CO2
emissions. The industry is the second largest emitter
accounting for one fifth of total emissions followed
closely by the residential sector.
The outlook for energy-related carbon dioxide (CO2)
emissions in both scenarios show an upward trend
from current levels. CO2 emissions would double in the
Conservative Scenario while, they would be 25% less in
the Proactive Scenario in 2030 than in the Conservative
Scenario.
CONCLUSION
Turkey’s future stimulated by sustained economic
growth and strong population increase looks bright.
The energy needed to fuel this growth will depend
greatly on the paths chosen. To achieve ambitious
energy efficiency levels and implement as much
renewable energy sources as foreseen in the Proactive
Scenario will require unwavering political will, strong
Energy efficiency Strategy Paper, February 2012, General Directorate of Renewables
Energy, Turkey.
1
“Electrical Energy Market and Supply Security Strategy Document” adopted in May 2009.
2
17
ANALYSIS
Sohbet Karbuz - OME
East Mediterranean Gas:
An Overview
introduction
Large gas discoveries since January 2009 and the
prospect of substantial hydrocarbons resources waiting
to be tapped beneath the eastern Mediterranean waters
have sparked major international interest. If developed
in a timely and successful way, current and future
discoveries may significantly change the energy picture
not only in the East Mediterranean but also in the wider
Mediterranean region.
Developing these resources, however, will require
overcoming numerous major challenges and obstacles
with geo-political implications. Rising conflicts over
the unresolved demarcation of maritime borders are
arguably amongst the most sensitive ones. Therefore,
being perhaps the only common denominator, energy
will increasingly become a main component of the
geo-political struggle in the East Mediterranean and
its surroundings. This article discusses the recent
exploration activity, the possibilities of gas exports, the
options for export infrastructure, and gives an overview
of their potential impact on the conflict-laden geopolitical landscape of the region.
A promising hydrocarbons province
is emerging
East Mediterranean holds, without question, large
hydrocarbon resources even though the countries
in the region, excluding Egypt, have been quite slow in
discovering them. A handful of modest gas discoveries
in 1999 and 2000 in offshore Israel and Gaza accelerated
18
exploration efforts and promoted the acquisition of
geophysical data throughout the region.
It was three large scale discoveries in the region
since 2009 (Tamar and Leviathan fields in 2009 and
2010 offshore Israel; Aphrodite in 2011 off the coast of
southern Cyprus) that have opened up a new deepwater
province and hence the so-called gas bonanza.
When some other recently discovered but smaller sized
fields are added to the above mentioned fields, total
discovered natural gas resources in the Levant Basin at
present amount to 1140 billion cubic meters (bcm).1 And
yet, the region remains one of the world’s most underexplored or unexplored areas and has good prospects
for additional gas, and perhaps oil, reserves. A recent
United States Geological Survey (USGS) assessment
confirms this.
In March 2010, the USGS released an assessment
concerning the technically recoverable undiscovered
oil and gas resource potential of the Levant Basin
Province which covers mainly offshore territories
including the Gaza Strip, Israel, Lebanon, Syria and
Cyprus. The study estimated a potential of 1.7 billion
barrels of oil and 3.45 tcm of natural gas in the area.
The above mentioned discoveries, the USGS assessmentas
well as the eye-opening resource potential estimates by
Cypriot and Lebaneese officials, have not only significantly
augmented hopes for large natural gas potential in the
East Mediterranean but also made it a fast rising favorite
for international oil and gas companies. Israel, Cyprus
and recently Lebanon have become major targets.
Turkey has in the past drilled a dozen of wells in the
Mediterranean waters but no commercial quantity of
hydrocarbons was discovered. However, Turkey has
recently increased exploration activity in terms of
seismic acquisition. In addition, a farm-in and Joint
Operating Agreement between Shell and Turkish
Petroleum (TPAO) was signed in 2011 for three offshore
blocks in the Mediterranean Sea south of the coastal
city of Antalya.
Syria has been keen to attract foreign companies for
offshore hydrocarbon exploration activities in order to
offset its declining oil output and reduce gas imports.
The country announced an offshore exploration licensing
round for three blocks in March 2011 with a closing date
of December 2011. However, the round is on hold due to
the ongoing crisis in the country.
Lebanon launched its first licensing round for offshore
gas exploration in May 2012 but the deadline for
submitting the bids was already extended twice2 because
the parliament could not ratify two decrees, which are
related to the Delineation of the Offshore Blocks and
the model Exploration and Production Agreement. 3
Most probably these decrees will have to wait until a
new government is formed. This means that contract
awards, originally planned in the first quarter of 2014
will be postponed.
Israel never lost hope of finding hydrocarbon reserves
even after over 60 years of fruitless searching and cost
in the hundreds of millions of dollars for drilling over
520 wells onshore and offshore. 4 This insistence gave its
fruits only in the past few years with the discovery of two
large gas fields,5 which were classified as the world’s
largest deepwater gas discoveries between 2001 and
2010. Further discoveries, albeit smaller in size have
followed suit. These discoveries meant the start of a
new era in Israel’s energy security.
Until the Tamar field started producing in March 2013,
domestic gas production has come from the modest
Mari-B reservoir, the northern part of the Noa field and
the satellite reservoir adjacent to the Mari -B reservoir
(i.e. Pinnacles).6 After the Leviathan field comes on
stream natural gas production will increase sharply
in Israel and surpass domestic demand. This means
that Israel will have the potential to become a net gas
exporter. According to OME estimates, the country
would have the potential to export as much as 10 bcm
per year by the end next decade. The problem is that
Israel does not have any export infrastructure. This is
why numerous possible pipeline and LNG options are
investigated.
An LNG facility either in Cyprus (given that Leviathan
is located halfway between Israel and Cyprus), or on
A NEW GAS PROVINCE IS EMERGING
850 bcm gas
660 Mb oil?
Cyprus officials: Geophysical
data indicates the presence
of 1.7 tcm of gas in 13 blocks
USGS (Mar 2010):
presence of 1.7 tcm of technically
recoverable undiscovered gas
potential in the Levant basin.
Source: OME
Israel’s coast, or in Jordan’s special economic zone at
Aqaba, ora floating LNG, or currently underutilized LNG
plants in Egypt, are among the LNG options.
A pipeline to Turkey either directly or indirectly (via
southern Cyprus, northern Cyprus and then to Turkey)
and (if needed) from there onwards to Europe, or another
pipeline to Greece via southern Cyprus, or connection to
the Arab Gas Pipeline are among the pipeline options.
Israeli officials have underlined in many occasions that
they prefer multiple gas export possibilities.But today
there are more important uncertainties than the export
infrastructure and export markets. Those are related
to the critical issue of whether Israel should export gas
and if yes, how much. In this regard, recommendations
of an inter-ministerial committee was first challenged
by the government and then by the High Court of Justice.
Thus, all export options await a final decision by the
Israeli government. This decision will indeed influence
the development of the giant Leviathan gas field,7 as well
as other discoveries in the area, perhaps including the
nearby Aphrodite field in Cyprus.
In Cyprus, the first licensing round was held in 2007.
One block, Block 12, was awarded. The first discovery
(Aphrodite field) came in December 2011. In May 2012,
Cyprus completed its 2nd exploration and production
bidding round for 12 offshore blocks. While the
discussions about the country’s debt issue was heating
up the authorities awarded 5 blocks to French, Italian and
Korean companies in the early 2013.8 Drilling in these
19
OVERLAPPING EXPLORATION BLOCKS AND DISPUTED AREAS
carry on costly exploration and field development
endeavors if they see the ability to commercialize their
discoveries with a favorable rate of return. Much will
depend on the gas price the companies will be getting by
selling the gas to domestic market, availability of export
option and transport means, stability in the countries’
regulatory, fiscal and gas policy as well as political
atmosphere. Eventually, any country in the region will
be hard pressed to attract companies for upstream
business without the export option and an effective
policy scheme.
Concluding remarks
Source: OME
blocks is expected to reveal the existence of additional
natural gas deposits and perhaps oil. Production from
the Aphrodite field is expected commence at the end of
this decade. The main idea is to export the surplus gas,
since domestic market need is very small. According
to OME estimates Cyprus can potentially export about
5 bcm per year starting in the early next decade. Although
there exists several options for exports, currently
the focus is building a 5 Mt/yr LNG plant located at
Vassilikos in Cyprus.
Energy may play a dominant role in the future of the
countries of the East Mediterranean and beyond.
Whether it will be a driver for stability, prosperity and
long term energy security,or one that fuel regional and
international conflict is yet to be seen.
What the future holds is hard to predict but if not
managed carefully and with wisdom currently pursued
myopic policies and distrust will further complicate
finding the common ground needed to turn this
notoriously complex region into a positively booming
one. What needed to help avoid turning controversies
into a possible cooperation is a balanced but pragmatic
approach through a constructive and frank dialogue.
Pressing challenges with
geo-political implications
Hydrocarbons resources in East Mediterranean
offers big opportunities in terms of energy security
and economic prosperity. However, it also presents
enormous technical, administrative, security, financial,
legal,political and environmental challenges.Arguably
the disputes over the ownership of resources and the
demarcation of maritime borders is the most pressing
challenge.9
Hydrocarbons resources also have the potential to
fuel new conflicts, exacerbate existing ones and add
anxieties. Cooperation is imperative because lack of it
will slow the pace of the exploitation and transport of
these resources.
As of October 2013, total gas resources discovered amount to 968 bcm Israel, 140 bcm in
the Republic of Cyprus, and 30 bcm in the Gaza Strip.
1
The new deadline (as of early October 2013) is January 10, 2014.
2
Out of the ten blocks of the Lebanese offshore, only Blocks 1, 4, 5, 6 and 9 are open for
bidding within the 1st Licensing Round, with the possibility of opening additional blocks for
bidding after the Cabinet ratifies these decrees.However, the probability is extremely low
until the new government is formed.
3
All wells drilled through 1999 either encountered oil/gas in non-commercially viable
quantities or came up dry.
4
Tamar in 2009; Leviathan in 2010.
5
Since the end of 2011, there has been a significant decrease in the production capacity at
the Mari B reservoir. The decrease was moderated after the start of gas production from
Noa and Pinnacles in June 2012.
6
Australian Woodside earlier had agreed to buy a 9.66% Leviathan interest but finalization
of the definitive agreement awaits export rule approvals.
7
Discoveries make sense if they are converted into
production capacity. The question whether these
reserves could find their way to the domestic and
international markets in a timely manner necessitates
the development of discovered fields. Companies will
20
January 2013, block 2, 3 and 9 were awarded to Eni (80%)-Kogas (20%) consortium. In
February 2013, two further blocks (10 and 11) were awarded to Total.
8
Between Lebanon and Israel as well as between the Republic of Cyprus, Turkey and
Turkish Republic of Northern Cyrus (TRNC), even though the core issue is the Cyprus
problem. In 2011 Turkey and TRNCagreements on continental shelf and offshore oil and
gas exploration.
9
MEDITERRANEAN ENERGY
PERSPECTIVES
TURKEY
A highly comprehensive and up-to-date analysis of energy in Turkey.
Order at: [email protected]
21
ANALYSIS
Abdellatif Bardach - ONEE1, Hassan Abaach and Matteo Urbani - OME
Morocco-Spain Interconnection:
A Model of Energy Cooperation between the Two
Mediterranean Shores
Pending the realization of the tunnel linking Africa to
Europe, the electricity systems operators of Morocco
(ONEE) and Spain (REE), decided to build a bridge of
energy solidarity by interconnecting the grids of the two
shores through the construction of two submarine cables:
the first one was realized in 1997, and its reinforcement,
implying the construction of a second cable, was in 2006.
In this article, benefits related to the construction of
interconnections are presented, with a focus on the only
Mediterranean cross-border transmission infrastructure
linking Morocco to Spain, its implementation process and
its importance in terms of regional cooperation policy.
Interconnections:
a common need shared by
national electricity systems
Cross-border interconnections between national
electricity systems have existed for a long time in
numerous regions of the world. Technical and economic
advantages related to these infrastructures are reflected
in a general benefit for the community, in terms of service
quality and electricity costs reduction, security of supply
and renewables deployment.
Regarding technical benefits, it is important to underline
the fact that interconnections contribute to provide
a guarantee of mutual aid and operational solidarity
(electrons do not recognize borders between countries)
in case of unpredictable emergencies. In this respect,
interconnections allow compensating a network
Office National de l’Electricité et de l’Eau Potable (Morocco)
1
22
breakdown by resorting to generation capacity abroad,
and thus improving service quality and system adequacy
by ensuring the continuity of supply. More than that,
interconnections also guarantee the frequency stability
in a synchronously interconnected system (as it is the
case for the Maghrebian grid which is interconnected to
Europe at the same frequency), providing a rapid service
recovery in case of major accidents affecting one of
the interconnected systems, as generation is lost, thus
improving the degree of system security.
MOROCCO-SPAIN
• Commissioning in 1997
• Reinforcement in 2006
• Exchange capacity: 1400 MW
• Trade capacity: 900 MW
• ONEE: fourth operator in
the Spanish electricity market
As far as the economic advantages are concerned,
interconnections contribute to facilitate the sharing of
generation capacities in a larger area, thus expanding
trade opportunities, and enabling a better coverage of the
production and load variation during the day. In this sense,
particularly in the Mediterranean area, the cross-border
sharing of generation capacity, based on the exploitation
of complementarities between countries in terms of
electricity demand, both hourly and seasonally, allows
reducing the amount of the investments that otherwise
would be required, permitting to optimize the utilization
rate of the already existent power plants, and opening the
way for a more fruitful cooperation between South and
North of the Mediterranean.
Furthermore, it is important to stress how interconnections
allow making economies in terms of scale benefits for
generation units, entailing the reduction of national
rotating reserves, and thus fostering investments in bigger
power plants, with substantial gains on generation costs,
as well as relevant improvements of units’ performance.
As afore mentioned, among the improvements that
interconnections make possible there is also the
possibility to enlarge the energy sources and supply
routes diversification, for the benefit of the national energy
security, permitting also an easier integration of variable
electricity into the system, that represent a crucial aspect
for the deployment of renewables, especially in Southern
and Eastern Mediterranean Countries (SEMCs) where the
RE potential is extraordinary.
Morocco-Spain Electricity
Interconnection
Today, the only operational electricity interconnection
between South and North Mediterranean is the one
between Morocco and Spain. This infrastructure
constitutes a sound basis of the cooperation policy
between Europe and SEMCs (South and Eastern
Mediterranean Countries), and is endorsed by the
European Union that supported and is still supporting
its reinforcement. In this regard, according to the policy
makers, this interconnection represent a vector of regional
solidarity, and the foundation for the construction of a
regional electricity market, which is expected to improve
cooperation in the Mediterranean area, and to contribute
to the social welfare.
First interconnection Morocco-Spain
The first cross-border electricity network linking
Ferdioua (Morocco) to Tarifa (Spain) has been operating
since august 1997. It is a 26 km submarine cable laid
660 meters deep with a capacity of 700 MW, which had
required an investment of 164.6 millions of Euros, equally
financed by ONEE and REE.
The studies for the implementation of the project lasted
7 years, and were related to the technical investigation of
the seabed in order to select the best route, the evaluation
of the environmental impact, and the economic analysis
regarding trade strategies and the most appropriate
financial scheme.
23
which concerned both studies and the construction of
three power, and two telecom cables, consisting of 48
optical fibers.
Submarine cable
Oil duct
Conductive bore
Insulating material
Lead sheath
Screen core
Insulating screen
Mattress
Shrink tape bronze
Polyethylene sheath
Copper tape anti-tarets
Mattress
Armor plates made of
hard copper
Mattress
Polypropylene
ropes and bitumen
Second interconnection Morocco-Spain
The need to reinforce and improve the integration of
electricity systems between Maghreb and Europe, drove
to invest in a second interconnection, operative since
June 2006, that received a strong political approval
and a noticeable industrial endorsement from the two
directly involved countries: Morocco and Spain. Today this
interconnection represents a fundamental regional asset,
which has contributed to drastically improve the crossborder transmission operations between the South and
the North of the Mediterranean, in a more coordinated
way.
As the Moroccan Minister of Energy and Mines declared,
“the second cable linking Morocco and Spain represented
a structural step towards the creation of a regional
electricity market”. Sharing the same positive opinion,
the General Director of ONEE, according to whom, “this
second interconnection will progressively contribute
to reduce the electricity prices and more generally,
the entire national energy bill, through a substantial
improvement of the diversification of energy sources and
routes of supply, entailing concrete benefits in terms of
energy security, industrial competiveness, and economic
growth”. In this respect, the CEO of REE also expressed
a very positive judgment of the project, considered as
“the most important opportunity for the region to move
towards a more concrete cooperation in the electricity
sector”.
This second project, considered as of common interest
from governments of Morocco and Spain, was laid next to
the first one, at a distance of 500 meters, and allowed for
a capacity increase from 700 MW to 1400 MW, implying
a considerable improvement of the Maghrebian systems
stability.
Regarding investment costs, ONEE and REE co-financed
the project that amounted to 117.2 millions of Euros,
corresponding to about 1.244 billion of Dirhams, and
24
Concurrently with the construction of this second cable,
ONEE realized a considerable reinforcement of the
interconnections with Algeria, within the framework of
a broader 0.3 billion of Euros project regarding a 400
kV Euro-Maghrebian electricity “highway”, expected
to intensify exchanges between the Iberian Peninsula
and the COMELEC area (Morocco-Algeria-Tunisia). The
development of these cross-border projects makes
Morocco a crucial energy crossroads in the Mediterranean,
especially with regards to the progressive integration of
electricity markets in the region.
A long-standing partnership:
some considerations
ONEE has a status of external agent vis-à-vis the Iberian
power market since 1998. This title gives ONEE the right
to make sale and purchase of electricity transactions in
this market, both directly with Spanish producers and
within the spot market.
Power exchanges follow essentially the North-South
direction, and they have been representing in recent
years about 18% of the national electricity consumption
in Morocco. What is emerging is a substantial gain for the
economies of both countries, showing how the cooperation
between the two Mediterranean shores in exploiting such
important energy complementarities is beneficial.
Transfer of know-how about electricity markets
regulation
The exploitation and operation of interconnected
electricity systems requires a permanent monitoring, and
a well equipped and organized staff, constantly updated
on cross-border market functioning rules.
Since the construction of the first cable, a very fruitful
and continuous training of the dispatching staff and of
managers has been implemented with very positive
results, in terms of network exploitation, cross-border
exchanges operations, and regulatory issues.
The extension of the synchronous mode to the East: the
Euro-Mediterranean loop and the 400 kV backbone SpainMorocco/Algeria/Tunisia
Recently, countries of Maghreb (Morocco, Algeria
and Tunisia) have realized very important projects to
reinforce and improve their internal national electricity
systems and the 400 kV cross-border networks. These
infrastructures strengthen the already existent 225 kV
interconnections, and aim at promoting the development
of the historical cooperation existing between the three
countries, by improving the security of national grids, and
supporting more regular cross-border power exchanges.
In this regard, a 400 kV electricity backbone (double
circuit), commonly called “the electricity highway”, has
been implemented from the Morocco-Spain border until
the one between Algeria and Tunisia, linking the entire
Maghreb area.
This project is part of the broader idea of closing the
Mediterranean electricity ring, and also to sustain the
progressive creation of a regional market, showing the
fundamental role of the electricity sector within the EuroMediterranean partnership. In this context, the electricity
market reforms in each country should integrate the
regional dimension of future energy perspectives, this
process being expected to foster investments, especially
in renewable generation capacity.
Moreover, this project would encourage the development
of renewable energies in the region, where their potential
is extremely important and, if well exploited, is expected
to improve the socio-economic conditions, especially
for countries that do not have hydrocarbon resources.
Indeed, a more interconnected system is better for the
integration of variable electricity and for a more efficient
exploitation of RE power plants, offering a larger and more
articulated demand, and so increasing the generation
capacity activity. In this regard, the development of
interconnections could improve the CO2 emissions level
by fostering the renewables deployment, and reducing as
a result the dependency on imported fuels, which should
contribute to smooth hydrocarbons prices.
Conclusion
The interconnection extension
between Morocco and the WAPP
(West Africa Power Pool): the
most important economic issues.
The interconnection between Spain and Morocco is
considered by these two countries as a strategic asset
of common interest. This cross-border infrastructure
represents a cornerstone of the cooperation policy
between Europe and South Mediterranean, and it has
been strongly endorsed by the European Union.
The grid extension through the interconnection of
different electricity systems concern also the project to
expand networks from Morocco to the WAPP, on the basis
of the significant complementarities in terms of electricity
consumption that exist between the North Africa and
Sub-Saharan region. The idea is expected to go ahead
with the construction of a double direction cross-border
link, taking into account the tremendous growth of power
demand in the WAPP, about 6% per year, and the mutual
aid instances that hence could be satisfied, in order to
reduce the increasing load shedding trend.
At the regional level, this infrastructure is associated
to the reinforcement of the national electricity systems
of Morocco, Algeria and Tunisia, and to the construction
of the 400 kV cross-border cables between these three
countries. It constitutes an essential platform to improve
bilateral and multilateral cooperation in the region, and
particularly to facilitate the progressive implementation
of more integrated electricity markets in the area. This
objective is part of the wider target of a more strong
economic and energy integration in the Mediterranean
region.
The history of electricity exchanges: (1998-2012)
6.000.000
Imports IME in (MWh)
Export IME in (MWh)
5.000.000
4.000.000
3.000.000
2.000.000
1.000.000
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: OME
25
ANALYSIS
Davide Colzani1, Enrico Malusardi2, Marco Pasquadibisceglie1, Giovanni Tagliabue1
Optimal market design for a sustainable
RES integration in the electricity markets:
a joint OME and Res4Med study
In the last 5 years, policies favoured renewable energy
sources (RES) development in a number of European
Countries, driving a dramatic change in the power
generation mix. More recently, doubts about technical
and economical sustainability of an electricity market
characterized by an high share of RES in the generation
mix are emerging.
On the one hand, the subsidy-driven huge investments
in RES have led to optimizations in both technology
and supply chain. On-shore wind and PV, for example,
experienced a significant reduction of generation costs
and are expected to play an increasing role in the future
electricity generation mix.
On the other hand, the growth in RES is generating effects
that seem not to have been fully considered at the time of
setting targets and designing incentives methodologies.
Additionally, the approach has been often of the “topdown” type, mainly focused on achieving certain RES
volumes defined on the basis of considerations which did
not take into account the needs and characteristics of the
electrical systems in which the RES were to operate.
Overcompensation in some countries, also caused by
late (or even no) adjustment of the incentive levels to the
technology and supply chain improvements, has favoured
an unexpected and uncontrolled development that
negatively impacts the electricity systems:
•RES subsidy burden is rapidly growing in electricity
customers’ bills (often with social iniquities between
RES producers and not).
Edison SpA
1
Senior Consultant to Edison SpA
2
26
•Energy-only market functioning is distorted by RES
plants, exacerbating the “missing money problem”.
Economic viability of mid-merit and peak power plants
is then at risk and long-term system adequacy is being
compromised.
•Most of additional RES plants (mainly wind and PV) are
non-programmable and the need of system reserves
and back-up capacity is growing in order to maintain
system security in the short-term and to grant system
adequacy in the middle and long-term.
•RES plants have so far marginally contributed to
system stability (i.e. frequency control, voltage stability,
reactive power, short circuit current), compromising
system security in period characterized by an high RES
share in total generation.
•Additional investments are required on both the
transmission grid (to remove congestion caused
by a resource driven rather than demand driven
development) and the distribution grid (to manage
supply other than demand).
Drawing the conclusion that RES should be discouraged
would however be equally incorrect. In perspective, in the
next years RES are expected to have a growing strategic
importance in the Mediterranean region, both in EU
countries, where they would help reducing the dependency
on imported energy, and in emerging countries, where
they could participate to satisfying a growing energy
demand due to demographic and economic growth and
—where the host country has reserves of fossil fuels—
could make such reserves available for export thus
supporting economic growth.
However, the opportunity of granting a proper development
of RES production without compromising RES public
acceptability and downsizing their potential role in future
electricity generation mix, calls for a convincing solution
to the previously highlighted negative effects on energy
market and system operation.
We believe that a careful design of the market would
ensure a viable integration of RES generation in a way
compatible with the key criteria of the electrical system:
sustainability, affordability, availability and reliability.
A sustainable RES integration in the electricity market
will be the main challenge of the policymakers in
the next years: first of all they have to decide either
radically update current electricity market design or to
accept a coming back to more and more centralized and
regulated practices as RES generation increase. Possible
consequences of following the second path are already
today clearly evident in many European countries, such
as system reserves in Germany or essential power plants
in Italy or RES centralized dispatch by state-owned
stakeholders.
Assuming that a market-based approach will remain
the policymaker favourite choice, in the next part of the
article some critical issues related to market design
characteristics will be addressed. In particular, market
design characteristics that efficiently remunerate
RES, operate the electricity system guaranteeing an
appropriate level of system adequacy and security and
develop both the transmission and distribution grid will
be identified.
RES remuneration
Current energy market configuration is not suitable to
support RES investments.
RES generation cost is dominated by fixed costs (capital
intensive investments). Consequently bankability of RES
projects, regardless the competitiveness with traditional
resources, is critical if backed only by revenues from day
ahead market (unless expected prices are high enough to
remunerate uncertainty). Long-term (>10 years) energy
markets would be necessary, but consumers are not
willing to sign long-term contracts.
In the past, different support schemes (feed-in tariff,
feed-in premium, green certificates) were adopted by
EU Member States to promote RES development, but
as a matter of fact they proved to be not so efficient
(overcompensation,
uncontrolled
development,
segregation of RES from market dynamics, etc.).
Waiting for long-term energy contracts, alternative
measures based on market mechanisms could be
developed to support a sustainable RES growth
coherently with Mediterranean States’ target. In
particular the preferable solution should:
•stimulate competition and technology development to
reduce construction costs;
•limit uncontrollable uncertainty to moderate financing
costs;
•avoid uncontrollable development;
•make RES plants sensitive to market signals in order
to provide some flexibility to the system and to avoid
negative prices (otherwise, as RES production gains
importance in the generation mix, the solely alternative
should be an out of market centralize dispatch
approach);
•impose standards on system services provision.
For the sake of example, defining a fixed remuneration
of the RES power plants through any competitive
procedures —e.g. a competitive tender process for power
purchase agreement for the electricity generated—
would stimulate competition in the construction
phase, reducing financing costs and managing RES
development according to effective system needs and
grid development.
When power plants sell their generation in a competitive
market place, participation of RES to the market could
be stimulated allocating the remuneration defined by
the tender on a quota of the total annual generation. As a
result the remaining quota of production, lacking of fixed
remuneration, can be used by RES suppliers to provide
system flexibility.
System operation with
an appropriate level of
adequacy and security
To guarantee demand/supply equilibrium both in the
short and in the long-term (that is from seconds to years
timeframe), system planner should pursue:
•System adequacy: i.e. the ability of the electrical system
to cover peak load including an adequate reserve
margin.
•System security: i.e. the capability to operate the
electrical system in the real time complying with grid,
plant and load constraints. On a daily basis power
plants (both generation and storage ones) contribute to
security providing system reserves and contributing to
power system stability procedures.
Currently system adequacy has to be guaranteed by
investment in programmable capacity paid by revenues
on energy-only markets.
Experience shows that energy-only market prices are
distorted by zero or almost-zero variable cost power
plants such as RES. RES production is having detrimental
27
effects on thermal power plants economic sustainability
reducing their yearly utilization and profitability (due to
depressed and sometimes negative prices and increased
volatility). Furthermore, thermal power plants are facing
the necessity of more and more flexible operation driven
by the increase of intermittent RES capacity that also
affects their economics:
Wind
PV
Voltage ride-through
YES
YES
Wider range of acceptable
frequency
YES
YES
•increasing maintenance costs, due to a huge number of
start-ups and shut-downs;
Inertial response
YES
-
•increasing operating personnel costs, since more
duties are requested to personnel in shift;
Frequency control
YES
YES
•reducing electric efficiency, due to increasing operating
hours at partial load;
Voltage control
YES
YES
•need of investments on the existing plants to improve
their flexibility.
Power curtailment
YES
YES
Upward ramping
management
YES
YES
—
—
Non programmable RES are thus posing a problem
of missing money for existing assets, putting system
adequacy at risk: power plants operators experience
a dramatic reduction of economic margins that poses
serious concerns about fixed and capital costs coverage,
jeopardising their continuity of operation. Many plant
owners have already decided to mothball or definitely
close some plants.
To overcome the failure of energy-only markets in pricing
adequacy, new market products are necessary: capacity
market mechanisms are currently under discussion
in a number of European Countries. Though so far
these mechanisms have been adopted to target specific
investments in new generating units, they are nowadays
necessary to secure revenue stream for traditional power
plants so to avoid them exiting the system.
In addition, RES development is affecting also system
security. RES are operated as passive units and, if nonprogrammable, they increase the need and the value of
system reserves.
28
Downward ramping
management
•a capacity market to grant system adequacy:
programmable plants are remunerated via specific
auctions or financial instruments; capacity market will
have a regional dimension: nonetheless all the TSOs
shall coordinate to evaluate the adequacy of the overall
system;
•a forward market, based on both physical and financial
products: both energy and interconnection capacity are
traded;
•a day-ahead market, all the forward positions are
cleared in this market, along with all the spot bids;
•an intraday market, based either on continuous trading
or on regional auctions: it allows operators to adjust
their positions with a quite short gate closure.
•a balancing market, aimed to deal with imbalances,
with presence of cross border products.
First of all, RES power plants should become responsible
to provide flexibility and system services compatibly with
their technological capability.
•an ancillary services market, where TSO can purchase
in advance necessary resources, provided by both
programmable and non-programmable units.
Moreover, both spot and forward market products should
be developed to fairly value system reserves.
Grid development
It is evident how in an high-RES environment the focus
moves from energy to capacity products (for example
capacity markets and forward markets for system
reserves). Energy-only markets are expected to become
mainly a dispatch instrument rather than the prime source
to remunerate fixed and capital costs. In this context
short-term products (intraday and hourly product) will
increase their importance.
Currently grid is designed to bring energy from
transmission network to distribution network and
its development is defined top-down by TSOs (even if
the use of a cost-benefit analysis is promoted by EU to
evaluate proposed investments, very often there are no
clear market signals that support economic evaluation
of different business options and make all involved
shareholders fell responsible for grid development).
As a consequence, the future electricity market could be
articulated as follows:
In a high-RES environment, grid should be reinforced and
code updated in order to:
•manage and integrate into the market distributed
generation (smart grid);
The proposed study
•evacuate excess of production, being RES power plant
localization driven by resource availability rather than
electricity consumptions;
RES4MED, a non-profit organisation committed to the
development of renewable energies in the Mediterranean
region, and OME are developing a study on the “Optimal
market design for a sustainable RES integration in the
electricity markets”. The study is proposed to run an
in-depth analysis of the challenges to deal with in order
to develop RES with market-based instruments. The
alternative would be a gradual increase of centralize and
out-of-market practices together with the growth of RES
share in the generation mix.
•integrate different electricity systems in order to share
system adequacy and security resources and to average
non-programmable RES volatility.
RES are normally connected to LV, MV or HV (about 150 kV)
grids, close to final users, but their production diagrams
normally do not match the demand ones. Moreover, RES
plants are mainly located looking at the availability of
the primary source: many different units might thus be
installed in a small region, arising congestion problems,
especially if the local network is weak.
Presently the most important and frequent constraints
due to RES production are in the HV systems, up to
now used as passive grids. The distributed generation,
becoming more and more important, cannot be any
more disregarded in the design of the security systems
(new protection devices, asynchronous synchronization,
scheduled production changes —reduction in case of grid
emergencies, etc.).
HHV systems (220-400 kV) must have an important
flexibility not only to reduce time by time transfer to
distribution grids (HV system about 150 kV), but also to
receive and dispatch in a useful way RES energy in excess
moved to higher voltages. The key point is the design
of the interconnected grid (transport lines capacity,
redundancies, etc.).
The purpose of the study is to elaborate on the main
goals and criticalities of a regional market design, in
light of the development of renewable energy sources for
electricity generation in the Mediterranean region. The
ultimate objective is to address all the relevant market
design characteristics in order to draw attention to the
best suited features that should be implemented by
policy makers in order to support the development and
integration of RES in the region.
The study will analyse the options currently available
for defining the possible market design in a regional
perspective. The main axis of analysis can be listed and
structured as follows:
1. RES remuneration, to assess whether incentives or
new market design for RES development are to be
deemed as necessary and, if so, the more suitable
mechanism and the appropriate time horizon for their
implementation.
Reinforcement of all the grid parts, by building new
infrastructures and improving the grid meshing is the key
point for the next future. This is not an easy process: TSOs
have often to face the NIMBY syndrome that prolongs the
authorization process, delaying the realization of the
required infrastructures.
2.System operation with an adequate level of adequacy
and security, focusing on market design features that
allow:
Market design shall be drawn to support grid development
through clear economic signals about network weakness.
As a consequence alternative solutions (RES curtailment,
energy storage, DSM, isolated generation) could be put in
competition with grid development.
•storage and demand side management (DSM) to
participate to the market.
For example, dispatching costs that arise from congestion
solution are currently socialized among all the end users.
Charging end users with zonal/nodal dispatching fees
could make final consumers feel responsible for both
grid development (limiting NIMBY effects) and alternative
solutions and stimulate competition and efficiency in
an environment that is commonly considered a natural
monopoly.
•economic viability of thermoelectric plants in their
changed role as supplier of capacity;
•RES plants to supply flexibility and system services;
3.Grid development, with special attention to market
design features that allow:
•a more active network to integrate distributed
generation, diffuse storage and DSM;
•the emergence of clearer market signals to stimulate
competition of a commonly defined natural monopoly
with solution alternative to grid development (DSM,
storage);
•a wider network integration driven by balancing
needs.
29
ANALYSIS
Emanuela Menichetti - OME
EU-GCC cooperation on energy:
Challenges and Opportunities1
A short overview of EU-GCC
relations
The Cooperation Council for the Arab States of the Gulf
(also known as the Gulf Cooperation Council, or GCC) is a
regional political and economic union created in May 1981
to promote stability and economic cooperation among its
members. The Union consists of the six Arab States of the
Gulf, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia
and the United Arab Emirates (UAE). Since its establishment
the GCC entered into close relations with the EU; on 22 July
1985, the Council of Ministers of the then EEC expressed
its deep-seated interest in developing economic and
political links with the GCC, and decided in principle on a
meeting between the Community and the Gulf States. More
recently, at the occasion of the 20th session of the Joint
Council held in Luxembourg on 14 June 2010, officials of the
EU and the GCC states endorsed the EU-GCC Joint Action
Programme over the period 2010-2013. The Joint Action
Programme has the aim of strengthening cooperation in
areas of strategic mutual interest. It specifically includes
energy, electricity and water, and nuclear safety among the
main topics for cooperation between the EU and the GCC.
In particular, energy remains central to relations between
the GCC and the EU. In fact, fossil fuels remain the most
traded product between the two regions. This is mainly due
to the proximity of the regions and the complementarity of
their energy production and consumption patterns, which
create favourable exchange conditions between the EU
and the GCC. Regarding energy, the programme foresees:
i) exchanging views, information and experience on oil and
gas market developments, energy policies, and policies,
frameworks, best practices and techniques in the upstream,
midstream and downstream fields; ii) cooperation in the
The present article summarizes the main findings of a Technical Report carried out
by OME (Abdulaziz Al Shalabi, Nicolas Cottret, Emanuela Menichetti, 2013) within the
framework of the SHARAKA project. The full report can be downloaded from: http://www.
sharaka.eu.
1
30
field of energy equipment, machinery and spare parts
manufacturing, especially those used in the oil and gas
industries; iii) cooperation on clean and renewable energy
technologies, on energy efficiency policy and measures,
and on solar energy technologies and policy frameworks. In
the field of electricity and water, the programme envisages:
i) technical cooperation in all stages of electricity and
water production (generation, transport, energy transfer
distribution and service providers), including technology
transfer; ii) benefit to the GCC from the EU’s experience in
power interconnection, load management, the regulatory
framework and the creation and development of regional
markets for the trade in, and exchange of, electricity; iii)
exchange of best practices in research, development and
technology regarding the integrated management and
sustainable development of water in order to achieve
water security in the GCC states, and of best practices
and techniques in the efficient use of power and water
consumption. Finally, in the field of nuclear safety, the
programme foresees: i) cooperation in the field of atomic
energy as well as nuclear safety and security; ii) exchange
of information and experience in matters such as the
legal framework for protection against radiation, nuclear
security and safety, radioactive waste, warranties and
appropriate systems and surveillance. Particular attention
is paid to the issue of energy diversification through the
development of alternative energy technologies, as well
as the development of energy infrastructure. Indeed, since
the beginning of the cooperation, the Joint Councils and
Joint Cooperation Committee meetings have stressed the
need for policy support for the promotion of renewable
and energy efficiency options in the GCC countries. The
follow-up to the Joint Action Programme has, however, not
been complete. At the 22nd session of the Joint Council and
Ministerial Meeting held in Luxembourg on 25 June 2012,
delegates evaluated progress achieved so far, and agreed
to prepare a joint work programme for the next period
(2013-2016) and to identify priorities and objectives. Several
EU-GCC expert meetings’ conclusions have underlined
the importance of enhancing cooperation in energy, with
particular focus on energy efficiency and conservation,
clean energy, climate change, and technology transfer.
The rapid socio-economic growth experienced by the
GCC countries has led in fact to a high level of demand for
energy, thus making the GCC countries large consumers of
fossil fuels. The rising local energy demand is stimulated
by several factors, including the population increase,
higher urbanization rates, the industrialization of the
economies, changes in transportation modes, and water
scarcity, which has forced the GCC countries to develop
energy-intensive water desalination processes.
There are several possibilities for enhanced cooperation
between EU and GCC countries in the energy field. The
present article identifies key areas of potential cooperation,
which would lead to exploiting synergies and win-win
opportunities for both parties.
Main energy trends in GCC
countries
The GCC countries show some common characteristics
and are among the world’s leading oil and gas producing
and exporting countries. They are also prominent members
of the Organization of the Petroleum Exporting Countries
(OPEC).
Past and current trends in energy within GCC countries
have been driven by their large hydrocarbon endowments.
Indeed, GCC countries hold approximately one third of the
world’s proven crude oil reserves, with more than half held
by Saudi Arabia, and around one fifth of the global proven
natural gas reserves, around 60% in Qatar.
Given these extraordinary resources, over the past
couple of decades the GCC countries have developed their
economies relying almost exclusively on hydrocarbons
and thus are highly dependent on the revenues coming
from the hydrocarbons sector. In all the GCC countries
the total government revenue is depending for about 80%
on hydrocarbons activities and the hydrocarbon exports
account for more than 50% of the total exports of goods
and services.
In 2011, GCC countries’ energy production represented
9% of the world energy production (more than 1,200 Mtoe)
while EU-27’s energy production represented around 6%
(or over 800 Mtoe) (IEA, 2013). While the GCC’s energy
production increased from 1990 to 2009, at the opposite
EU-27’s tends to decrease, making of energy supply
security a main concern.
The breakdown of the mix of energy production is widely
different from EU-27 to GCC. EU-27 energy production mix
is quite diversified with half of production based on fossil
fuels, 29% based on nuclear and 19% based on renewable
energy sources (including hydro). The energy production
mix of GCC relies exclusively on fossil fuels with almost
80% of the production based on oil and the remaining based
on gas. Among the GCC countries, Qatar, Bahrain and in a
less extent Oman are the countries with the highest share
of gas in their production mix.
Saudi Arabia is the biggest producer of oil within the area
with more than 450 Mtoe, followed by the United Arab
Emirates (around 130 Mtoe) and Kuwait (120 Mtoe). As for
the energy production coming from gas Qatar is leading
the production with 80 Mtoe, followed by Saudi Arabia (61
Mtoe) and the United Arab Emirates (40 Mtoe).
Most of the energy produced is exported with roughly
300 Mtoe consumed locally. While GCC countries’ energy
production systems are largely dominated by oil (except
for Qatar), GCC countries’ energy consumption is more
shared between oil and gas, mainly due to the use of gas
for electricity and heat purposes.
Per capita energy consumption in the GCC is among the
highest in the world, Qataris being the highest consumers
with an average exceeding 16 toe/cap, more than eight
times the global average. GCC economies are among the
most energy intensive, all of them (except Oman) having
energy intensity twice higher than the global one.
Soaring energy consumption in the GCC is accentuated
by pricing policy for energy, which is heavily subsidized
and therefore leads to wasteful behaviors. While energy
subsidies are aimed at ensuring access for all residents
of the GCC, the economic consequences are massive.
According to the IMF (2013), energy subsidies result in
distorted resource allocation by encouraging excessive
energy consumption, artificially promoting capitalintensive industries, reducing incentives for investment in
renewable energy, and accelerating the depletion of natural
resources. The GCC governments are aware of the burden
on the state budget that results from energy subsidies,
and some countries (e.g. Oman, Saudi Arabia and UAE)
are already reviewing their energy tariffs. However, the
current political climate in the region tends to challenge
such initiatives. One of the reasons is that subsidies are
seen as a mechanism to distribute the benefits of the
endowment in natural resources to the population.
Electricity and water demand play a dominant role, mainly
driven by air-conditioning in buildings and potable water
(desalinated water). Electricity demand is increasing
particularly fast, having grown at an average annual rate
of 6.6% over the period from 1999 to 2009 (IEA, 2011).
This appears to be the case with water demand as well.
Being among the most water-scarce and arid regions in
the world, water desalination is commonly used to meet
national water demand. Energy-intensive desalination
technologies remain the most feasible alternative to
increase or meet domestic supply requirements. This
implies massive investment in power generation and
seawater desalination capacities.
The GCC countries are looking at several technologies,
including nuclear power and renewable energy, to be able
to supply part of the extra capacity needed. In addition, in
recent years, the GCC countries have implemented the
GCC interconnection grid, which would allow savings in
the construction of new power plants, and provide standby
backup capacity.
The GCC countries have not yet undertaken concrete
measures to promote energy efficiency and water
31
conservation. A study of energy policies in the GCC
countries (Reiche, 2010) shows that the GCC countries
have recently adopted a more proactive approach towards
environmental sustainability, but despite some relevant
initiatives, no consistent or coordinated strategies or
policies have been established up to now.
The current trend across the GCC countries is to reform
the power sector by enabling IPPs (Independent Power
Producers) and IWPPs (Independent Water and Power
Producers) to compete at the stage of generation.
Furthermore, several GCC countries are attempting to
unbundle the generation, transmission and distribution
segments in order to facilitate and encourage private
investment.
As market reform progresses and a competitive market
is established, the electricity interconnection between
the GCC countries will start playing an important role
going beyond emergency support. The existence of the
GCC interconnection will provide opportunities for the
establishment of power and desalination plants close to
resources, thus giving the freedom to IPPs and IWPPs to
select strategic locations which will allow them to operate
in a larger market with reduced risks. In the long-term,
it is also envisioned that the GCC grid system could be
expanded to trade energy with other regions having
interconnections. Several studies have been performed in
this respect (e.g.: within the Electrical Interconnection of
Three Continents project).
Diversification of the fuel mix for electricity generation
is essential to reduce the over-reliance on hydrocarbon
resources. Most GCC countries are exploring RE options,
while others are also looking at developing nuclear energy.
In December 2006, the six GCC Member States announced
that the Council was commissioning a study on the peaceful
use of nuclear energy. In 2007, the GCC countries agreed to
cooperate with the IAEA on a feasibility study for a regional
nuclear power and desalination programme. In addition,
all countries are signatories to the Non-Proliferation
Treaty, and the UAE ratified a Safeguards Agreement
with the IAEA in 2003. Beside the regional programme,
each country has looked at the nuclear option with more
or less interest. In 2010, a Saudi Royal decree established
the King Abdullah City for Atomic and Renewable Energy
(K.A.CARE) to contribute to sustainable development in
Saudi industries related to renewable and atomic energy.
In May 2012, K.A.CARE foresaw 17 GW of nuclear capacity to
be installed by 2032 in the Kingdom, and a National Atomic
Regulatory Authority has been set up. Furthermore, the
UAE is pursuing a target of producing 25% of its electricity
from nuclear energy by 2020. The Fukushima Daiichi
nuclear incident sparked fears among GCC citizens, and
the pursuit of the nuclear option has been slowed in some
countries in the region, as for example Kuwait. The UAE
however is still continuing with its nuclear programme.
On the other hand, renewable energy technologies are
offering promising opportunities in the GCC countries,
particularly solar energy technologies. The GCC countries
lie in the so-called sunbelt, and are one of the regions in
the world with the best solar energy potential, with global
horizontal irradiance (GHI) values ranging from 1,900
kWh/m²/y to 2,160 kWh/m²/y, and direct normal irradiance
32
(DNI) varying from 2,000 kWh/m²/y to 2,500 kWh/m²/y.
Several studies have investigated the potential of different
renewable energy technologies in the GCC, and in a wider
context the MENA region, to supply a significant share of
European energy needs through interconnected systems.
The MED-CSP study carried out by the German Aerospace
Centre (DLR) (Trieb et al. 2005), the study by the IEA of
the long-term potential of renewable energy technologies
(Müller, Marmion and Beerepoot 2011) and the study by the
European Photovoltaic Industry Association (EPIA 2011),
among others, have reported on the favourable potential
and conditions for solar technologies in the GCC region.
Despite the above, the current level of development of
renewable energies in the GCC is below expectations. The
GCC countries still lack specific frameworks for RE, but
that does not imply that the region is inactive in the field.
In fact, all GCC countries have established RE targets
and promote renewable energies through resource
assessment, pilot demonstration plants and feasibility
studies.
In 2011, Kuwait announced its aim to produce 10% of its
electricity from renewable sources by 2030, but it has not
yet established the required legislative and regulatory
frameworks to reach this target. In Oman, the Public
Authority for Electricity and Water (PAEW) is taking steps
to implement solar and wind projects where the grid is
not available. A regulation adopted in 2013 requires the
inclusion of a component of renewable energy technology
(solar or wind) in each new power project in rural areas.
Furthermore, large-scale solar projects with a capacity of
50 to 200 MW are planned for the coming years. In Qatar,
the National Energy Strategy 2011-2016 states that RE
technologies should help to save gas and reduce carbon
emissions. In 2013, an Amiri declaration set a 2% target
for electricity generation by solar energy by 2020. Several
projects have been announced to achieve this target.
In 2009, the Electricity and Cogeneration Regulatory
Authority (ECRA) of Saudi Arabia produced a National
Renewable Energy Plan. The K.A.CARE programme which
oversees renewable energy development in the Kingdom
has suggested 54 GW of power generation capacity from
renewable energy by 2032. In the United Arab Emirates,
Dubai set a target of producing 5% of its electricity from
solar energy by 2030, while Abu Dhabi announced that 7%
of its total energy would come from RE technologies by
2020, but no specific regulatory framework has been put
in place. The UAE is active in the RE field, most particularly
through the Masdar initiative. Masdar has announced plans
to develop the Sir Bani Yas wind farm with a target capacity
of 25 MW, the Shams 1 CSP plant with a capacity of 100
MW, and the Noor 1 PV plant with a planned capacity of 100
MW. Masdar will continue to help the UAE to find new ways
to diversify its energy mix.
Identified areas of
cooperation
The GCC countries show good potential for cooperation
and partnership with the EU over a vast and diversified
range of energy issues. To date, energy flows between the
EU and the GCC have been very much focused on fossil
fuels, mainly oil and gas. Saudi Arabia remains the biggest
GCC exporter of crude oil to Europe (over 12% of its export
have Europe as destination), with 890 thousand barrels per
day transferred in 2011 alone. According to BP (2012), 42%
of Qatar’s total Liquefied Natural Gas (LNG) exports go to
Europe, representing 43 billion cubic metres.
companies in the field, and the availability of capital in the
GCC countries for profitable RE investments.
There are clear opportunities to improve cooperation
between the two regions, as well as scope for possible
projects of common interest, in the natural gas sector,
bearing in mind the possibility of linking the natural gas
markets of the two regions, which would require the
development of adequate infrastructure. Indeed, the EU
is expected increasingly to rely on gas to cover its energy
needs. Diversifying the sources of the supply of gas is of
paramount importance in order to ensure energy security.
The development of solar is also being encouraged by
several ongoing initiatives in the Euro-Mediterranean
and the EU-MENA regions, such as the Desertec concept
and the Mediterranean Solar Plan. However, in addition
to solving market integration and system interconnection
issues, the implementation of such ambitious projects
needs to take into account and overcome a series of
technical aspects, mostly related to the intermittent
nature of the resource and the harsh climate conditions,
which reduce the efficiency of systems. Also, the current
energy pricing policy represents a relevant barrier to the
development of business models for renewables.
In the electricity sector, EU-GCC cooperation is quite
advanced as a result of regular exchanges and meetings at
the technical level organized by producers, transmission
system operators, distributors and their associations. This
could of course be enhanced by complementing the activities
that the EU is already carrying out with many neighbouring
countries in the framework of its external energy policy.
For instance, within the Mediterranean region and in the
framework of Euro-Mediterranean cooperation, MEDREG
(Mediterranean Regulators for Electricity and Gas) offers
relevant examples, best practices and lessons to be
learnt for fostering market integration and infrastructure
investment.
As far as electricity interconnection is concerned, the
completion of the GCC regional power grid opens new
perspectives for the establishment of a wider electricity
market. The EU has a long experience in the establishment
of a common electricity market, and there is clear room
for cooperation between the EU and the GCC in terms
of knowledge transfer in this field. Joint activities and
meetings between the European Network of Transmission
System Operators for Electricity (ENTSO-E) and the Gulf
Cooperation Council Interconnection Authority (GCCIA) are
already taking place. In addition, through the Pan-Arab
interconnection study, common research could be carried
out in order to examine the benefits and challenges of the
interconnection of multiple regional power grids.
Prospects for cooperation could also be explored in the
field of nuclear energy. While most of the GCC countries
have confirmed their commitment to developing nuclear
power over the medium-term, the implementation of
nuclear technology remains challenging. Several EU
Member States have longstanding experience of nuclear
power. EU-GCC cooperation could build on best practices
to enable the transfer of this knowledge from EU to GCC
countries.
Renewable energy technologies offer perhaps one of the
greatest opportunities for enhanced cooperation between
the EU and the GCC, given the high potential for RE in the
region, the prominent role of the EU in the development of
renewables at the global level, the substantial industrial
capacity and degree of innovativeness displayed by EU
Within RE technologies, solar is one key option, given
the abundance of the resource, which means that the
development of both PV and CSP technologies is a concrete
opportunity.
In addition, the GCC countries could benefit from the
experience of the EU in the development of policy and
regulatory frameworks for renewables. An impact
assessment of incentive mechanisms and of the main
technical and non-technical barriers which need to be
addressed when designing RE policies would certainly
be of benefit to the GCC countries in order to allow them
to learn from previous experience and to avoid repeating
the same mistakes. The advanced EU institutional and
regulatory framework could also be of benefit to the GCC
in the field of energy efficiency. The GCC countries would
benefit from cooperation with the EU in several ways, such
as: i) institutionally, by taking advantage of the experience
accumulated in the EU in the preparation of several
directives on energy efficiency (covering for example
ecodesign and energy labelling, and energy building
codes), as well as in the preparation of the National Energy
Efficiency Action Plans (NEEAPs); ii) as regards demandside management, through the development of models
for energy service companies (ESCos) and market-based
mechanisms to support energy efficiency.
In addition, the establishment of national agencies for
energy efficiency would represent a significant step
towards the implementation and monitoring of concrete
energy savings measures in the GCC countries. This could
be further developed by complementing the activities that
the EU is already carrying out in the Mediterranean region,
such as in the context of the Mediterranean Association
of National Agencies of Energy Conservation (MEDENER).
Last but not least, capacity building is of the utmost
importance both for RE and energy efficiency. Cooperation
in this regard can only be beneficial to all parties.
Conclusions
Having a third of the world’s oil reserves, the GCC
countries have paid little attention to their domestic
energy consumption. However, the rising cost of electricity
production and the relative shortage in gas production are
changing the governments’ strategies.
33
The GCC countries are indeed facing important energy
challenges, and only recently have their governments
acknowledged this aspect. However, no common approach
is in place to deal with energy and water security issues. In
fact, effort fragmentation is common at country level, with
most GCC countries splitting the work between research
institutes, government agencies and the private sector.
The EU can represent a relevant example to be looked at
to establish a more harmonized and coordinated energy
policy framework, both at country and regional levels.
The GCC governments recognize the importance of
diversifying local energy supplies, and are moving towards
market reform and a sustainable energy mix. However,
current energy subsidies represent an important barrier to
the creation of a more level playing field, thus discouraging
investments, particularly in the energy efficiency and
renewable energy fields. Whereas the gradual removal
or shift of energy subsidies is definitively a priority to be
discussed and implemented in the medium-term, there
are already some top-down initiatives with low political
cost (such as building codes) that can be more feasible in
the short term.
The GCC countries are actively working on expanding
existing production capacities in order to meet current
and future electricity and water demands. Finding secure
nonfossil fuel alternatives, developing a regional energy
market and creating conditions which stimulate energy
saving are essential. Delaying investment in this field
could undermine the sustainability and security of supply.
In addition, a clearly-defined strategy is key to achieving
sustainable and secure electric and water supplies. Yet it
is evident that most GCC countries need to intensify their
efforts and define clear strategies for achieving these
targets.
Plans to develop nuclear energy met with public concern
in at least one GCC country following the Fukushima
accident. However, nuclear energy may still be a viable
alternative for some GCC countries. Additionally, nuclear
energy could contribute to the GCC interconnection to the
benefit of countries where nuclear energy is not feasible.
With the exception of Dubai, nuclear energy plans are not
being moved forward at the moment. The contribution
of nuclear energy to the future GCC energy mix must be
addressed openly and objectively.
Renewable energy technologies and energy efficiency
offer some of the greatest opportunities for enhanced
cooperation between the EU and the GCC. The prominent
role of the EU in the development of RE at the global level
and the substantial industrial capacity and degree of
innovativeness displayed by EU companies, together with
the availability of capital in the GCC countries, represent
a profitable RE investment opportunity which could
contribute to energy security for both sides. Furthermore,
the EU has long experience of dealing with energy market
reform and establishing transparency and accessibility.
This has contributed to the security of energy supply by
allowing electricity companies to grow beyond national
borders.
34
The EU is already carrying out activities with many
countries neighboring the GCC in the framework of its
external energy policy. The EU-Mediterranean partnership
provides a good example of how EU-GCC cooperation
and partnership could be developed. The incorporation
of energy efficiency, clean technologies and safe and
sustainable low-carbon energy in EU-GCC cooperation
and partnership plans will emphasize the global role of the
EU in a low-carbon energy future.
Bibliography
EPIA (2011), Unlocking the Sunbelt potential of Photovoltaics, 3 edn,
Brussels, European Photovoltaics Industry Association, March, http://
www.epia.org/index.php?eID=tx_nawsecuredl&u=0&file=/uploads/
tx_epiapublications/Sunbelt_Epia_MARCH2011_FINAL.pdf.
IEA (2013), IEA Statistics
http://www.iea.org/statistics.
by
Country,
Paris,
OECD/IEA,
IEA (2011), Annual Database Statistics,
http://data.iea.org/ieastore/statslisting.asp.
Paris,
OECD/IEA,
IMF (2013), Energy Subsidy Reform: Lessons and Implications,
Washington, IMF, 28 January, http://www.imf.org/external/np/pp/
eng/2013/012813.pdf.
Müller, Simon, Marmion, Ada, and Beerepoot, Milou (2011), Renewable
Energy: Markets and Prospects by Regions, November, Paris, OECD/
IEA,
http://www.iea.org/publications/freepublications/publication/
name,20555,en.html.
Reiche, Danyel (2010), “Energy Policies of Gulf Cooperation
Council (GCC) countries. Possibilities and limitations of ecological
modernization in rentier states”, Energy Policy, Vol. 38, No. 5 (May),
p. 2395-2403, http://wupperinst.org/en/publications/details/wi/a/s/
ad/1089.
Trieb, Franz, et al. (2005), MED-CSP: Concentrating Solar Power
for the Mediterranean Region, Study for the German Ministry of
Environment, Nature Conservation and Nuclear Safety, Stuttgart, DLR
Institute of Technical Thermodynamics, 16 April, http://www.dlr.de/tt/
desktopdefault.aspx/tabid-3789.
About SHARAKA
Sharaka is a two-year project started in January 2012
and implemented by a consortium led by Istituto Affari
Internazionali (IAI, Italy). The project, co-funded by
the European Commission, explores ways to promote
relations between the EU and the Gulf Cooperation
Council (GCC), through the implementation of policyoriented research, outreach, training and dissemination
activities. The overall project aim is to strengthen
understanding and cooperation between the EU and
the GCC, with particular attention to the strategic areas
identified in the Joint Action Programme of 2010, such as
trade and finance, energy, maritime security, media and
higher education.
OME is leading the work package on EU-GCC cooperation
on energy, environment and climate change.
The final conference of SHARAKA took place in Muscat
(Oman) on 11-12 November 2013.
For more information visit www.sharaka.eu.
ANALYSIS
Abdelghani El Gharras and Emanuela Menichetti - OME
Solar Thermal
in the Mediterranean Region:
A Solar Thermal Action Plan for Investment Promotion
This article is based on the “Action Plan for Investment
Promotion”1 that was developed by OME under the
framework of the Global Environment Facility’s funded
programme titled “Global Solar Water Heating (GSWH)
Market Transformation and Strengthening Initiative”.
Introduction
Resource availability, technological maturity and, economic
feasibility are some of the prerequisites for a large scale
deployment of renewable energy, in general, and solar
thermal technologies, in particular. The Mediterranean
region is endowed with significant, yet largely untapped
solar resources. Most South and East Mediterranean
Countries (SEMCs)2 lie in the so-called Sunbelt, with
global horizontal irradiance (GHI) values ranging from
1,600 kWh/m²/y in coastal areas to 2,600 kWh/m²/y in the
desert, and direct normal irradiance (DNI) values varying
from 1,800 kWh/m²/y to more than 2,800 kWh/m²/y. Solar
water heating (SWH) systems are already commercially
viable and, in some cases, already cost competitive. In
particular, domestic solar water heating applications are
the most well known and widespread. The cost of a SWH
system could differ around the world by a factor of 10 (from
USD 250/kWth to USD 2,400/kWth) based on system type,
size, application, market conditions, and costs of labor.3
Nevertheless, several barriers such as relatively high
up-front investment cost, competition with subsidized
fossil fuels-based technologies, mistrust vis-à-vis the
technology and lack of policy support mechanisms
constitute real challenges for the large scale penetration
in SEMCs. Overcoming such barriers would more likely
result in a wide penetration of solar thermal applications,
thereby reducing electricity and fossil fuels consumption,
and ultimately energy savings and costs savings for both
governments and end-users. A number of critical factors
are, therefore, necessary for such wide scale deployment.
Economics
Cost competitiveness is a determining factor for a wide
scale market penetration of solar thermal technologies.
Several solar thermal applications are already costeffective while others are still more expensive compared
to fossil-fuel based systems. In perspectives, the cost of
generated heat from solar thermal systems is expected
to witness significant decreases, thereby making
solar thermal technologies far more competitive than
conventional-based heat. Table 1 shows the range of
prices for solar based heat versus other systems using
natural gas and electricity for 2007 and 2030 for end users
in central and southern Europe.
Table 1. Cost of heat (in USD-cent/kWh), 2007-2030
2007
Solar thermal
2030
Central Europe
Southern Europe
Central Europe
Southern Europe
9.1 - 20.8
6.5 - 15.6
3.9 - 7.8
2.6 - 5.2
Natural gas
11.1 - 37.7
22.1 - 75.4
Electricity
9.1 - 42.9
18.2 - 85.8
* Costs of solar heat include all taxes, installation and maintenance. Exchange rate used (1€ =1.30USD)
Source: OME based on European Solar Thermal Technology Platform (ESTTP)
35
Table 2. Average costs of a SWH system in the SEMCs
Algeria
820
n/a
Egypt
700
Thermosyphon – 150 lit/day
Israel
n/a
n/a
Jordan
930
Flat plate-locally manufactured + hot water tank + cold water tank + stands for tanks
Lebanon
Libya
1,300
n/a
FP collectors of 3.6 m2 + 200 liters tanks
n/a
Morocco
1,060
Palestine
500
Thermosyphon
Syria
n/a
n/a
Tunisia
890
Thermosyphon system (2 m2 surface & 200 L capacity)
Turkey
920
Open-loop, pressureless thermosyphon (180 lit hot water, 70 lit feeding tank)
2 m2 with 160 to 200 liters tank
In perspectives, the cost of heat would be far below than
other substitutes, including natural gas and electricity. By
2030, the range of solar thermal is expected to be between
2.6 and 5.2 USD-cent/kWh in the Southern Europe while
natural gas and electricity are expected to have ranges
of 22-75 and 18-86 USD-cent/kWh, respectively. The
variations observed between central Europe and Southern
Europe are attributed to different climatic conditions, and
in particular to solar irradiation. Thus, given the potential
of cost reductions in the future, it is more likely that
people opt for SWH system applications compared to other
conventional fuels-based systems.
SWH system costs
Factors affecting the cost of heat from a SWH system
include life-span, solar irradiance and energy tariffs. The
total investment cost of a SWH system is split into costs of
collector, tank, installation and other services. In general,
the collector and tank account for the largest share of the
total investment cost, with minor operating costs. Contrary
to thermosyphon system working on natural circulation,
the pumped system usually requires additional features
such as controllers, valves, pumps, etc., thereby raising its
total investment cost.
The cost of a SWH system is quite different across the
South and East Mediterranean countries. The average cost
of a system ranges from $ 500 USD in Palestine to $ 1300
in Lebanon based on the system configuration. In terms
of the investment cost (in $/kWth), it ranges from $ 516 in
Lebanon to $ 635 in Tunisia and $ 757 in Morocco, far below
than what is marked in some regions of the world. Table 2
gives a summary of the average cost of a SWH system in
the Mediterranean.
36
In terms of cost by component,4 the collector and tank
account for the largest share of total investment cost. It
accounts for more than 75% in Morocco, Lebanon, and
Tunisia. In Turkey, however, both installation and the main
equipments (collector and tank) account for 45% of total
investment cost each. In comparison in Italy, for example,
installation accounts for 25%, tank for 20% and solar
collectors for 40% of total cost. The high cost of installation
of countries like Turkey could be attributed to the relatively
high cost of labor. Contrary to other conventional energy
sources, renewable energy technologies have low
operation and maintenance (O&M) costs.
Market trends
Among the SEMCs, solar thermal is widespread in Israel,
where the use of solar energy for water heating dates
back to 1970s. Tunisia has established a comprehensive
programme to promote the use of solar energy in the
residential, tourism and industrial sectors. A solar thermal
market also exists in Turkey, Egypt, Jordan, Lebanon,
Morocco and Syria.
The installed solar thermal capacity in the SEMCs reached
around 18.5 GWth in 2010, representing more than 9%
of world solar thermal installed capacity. Turkey alone
accounts for the largest share with 67% (18 million square
meters) of installed capacity in the SEMCs, followed by
Israel and then by the Palestine (Figure 1 - left). Together,
these three countries account for around 88% of the solar
thermal capacity in operation in the Mediterranean region.
In terms of per capita solar thermal installed capacity,
Israel has the highest ratio with 397 KWth/1,000 inhabitants,
followed by Palestine (260), Turkey (172), Jordan (121) and
Lebanon (52) (Figure 1 - right).
Figure 1. Solar thermal installed capacity in SEMCs (left); Per capita installed capacity in the SEMCs (right)
Solar thermal capacity in operation
in Non-EU Mediterranean countries, 2010
Solar thermal capacity per capita in operation
in Non-EU Mediterranean countries, 2010
MWth
MWth
100 000
400
10 000
300
1 000
200
100
100
10
*2011 **2008 ***2007
Targets
Several SEMCs have provided policy support and
incentives to SWHs. Nevertheless, some of these support
mechanisms in some countries are projects’ oriented and
thus have limited time frame. National governments have
set ambitious targets for renewable. In terms of solar
thermal heating/cooling targets, several countries have
set such targets, namely Jordan, Lebanon, Morocco, Syria
and Tunisia. These targets are, however, indicative and
non-binding.
Despite the policy incentives, the programmes, and targets
in place in some countries, the concept of such solar
strategy has been developed, identifying some critical
factors for a large scale penetration of solar thermal
technologies in the region.
Developing a solar action plan
The suggested solar thermal strategy is built around the
three main elements: i) addressing and overcoming the
main barriers; ii) highlighting the benefits of SWH; and
iii) enhancing public support through strengthening the
regulatory framework, standardization and certification,
awareness raising, strengthening R&D capacities and
strengthening regional cooperation, to overcome such
barriers and thus contribute to a market up-take of SWH
systems in the region.
As far as the first step concerning overcoming the barriers
is concerned, several technical and non-technical barriers
exist against the market uptake of solar water heating
systems, thereby necessitating a number of critical factors
and policy actions for a wide scale deployment. In addition to
the high investment cost compared to traditional systems, a
specific barrier which is particularly relevant in the SEMCs
is represented by the subsidies given to fossil fuels, which
prevent the creation of a level playing field for renewable
Libya
Algeria
Other Non-EU North
Egypt
Morocco*
Syria**
Albania
Tunisia*
Lebanon*
Turkey*
Jordan*
Palestine***
Israel
Libya
Algeria
Other Non-EU North
Syria**
Albania
Lebanon*
Morocco*
Tunisia*
Egypt
Jordan*
Palestine***
Israel
0
Turkey*
1
*2011 **2008 ***2007
energy technologies. Another obstacle is represented by
a certain mistrust vis-à-vis new technologies. Also, the
lack of synergies among agencies promoting SWH in the
region might have a negative impact on the solar thermal
market growth. Therefore, stronger coordination at the
institutional and regulatory level would be beneficial.
Furthermore, there is lack of reliable data and statistics
on the development of SWH applications. The issue of lack
of documented return on experience was raised also on
the occasion of the regional workshop organized by OME
in Beirut in April 2012.5 Another shortcoming which was
raised during the regional workshop in Beirut is the issue
of space availability for solar thermal systems on the roofs
as in several countries roof surfaces are occupied by other
equipments as water tanks, satellite dishes, etc.
Regarding the benefits, savings of energy (less consumption
of finite fossil fuels) and cost (shorter pay-back period,
thereby making SWH systems free afterwards), reductions
of polluting emissions (avoids GHG emissions) and job
creation are some of the benefits of renewable energy
in general and of SWH systems in particular. Thus, a
wide scale deployment of solar water heating systems
is very important in saving costs for both end users and
governments subsidizing electricity or other fuels.
Finally, enhancing public policy support is necessary
for overcoming these barriers and thus promoting the
wide scale deployment of SWH systems. This could be
done through putting in place a comprehensive strategy
for promoting solar thermal technologies in the region.
Based on this rationale, the following concept has been
developed, which looks at addressing the main factors,
regulatory and support mechanisms (targets, solar
obligation, financial incentives, etc.); standardization &
certification; awareness raising, education and training;
promoting technological improvements through RD&D
programmes; and enhancing regional cooperation.
37
mandated on real estate developers and individual homes,
where possible, for new buildings.
Regulatory and Policy framework
A stable regulatory framework that provides for policy
targets by sector and support mechanisms based on
system application, including new emerging applications,
is key in the SWH market uptake.
• Renewable Heat Targets:
Setting up binding, measurable, achievable and enforceable
progressive targets is a significant step towards a large
scale penetration of SWH systems. Progress monitoring
could play an important role in achieving those targets.
However, targets need to reflect the market potential given
technical and economic considerations. Specific targets
by sectors are of paramount importance as well, thereby
necessitating particular evaluation of the potential of each
sector while taking into account technical challenges
related to building integration, storage, etc. Putting in
place, for example, higher targets for public buildings like
schools, hospitals, etc., could promote the adoption of
such SWH systems.
• Policy Support Scheme:
Stable legislative and regulatory frameworks providing
for policy support mechanisms and incentives are key in
the wide scale deployment of SWHs. Predictability and
transparency are very important elements in such policy
support schemes as they give a clear signal to market
operators/investors about the government’s objectives
and targets.
Solar regulations and mandatory obligations, in particular,
could be an interesting policy support mechanism to
be widely applied in the region. This scheme could be
Figure 2. Strategy for solar thermal promotion
Regulatory
and policy
framework
Training,
education and
awareness
raising
Standardization
and
Certification
Solar
thermal
strategy
Regional
Cooperation
38
RD&D
programmes
Technological
improvements
To overcome the high up-front investment costs, innovative
financial incentives should be also created. This could be
achieved through gradually de-subsidizing fossil fuels
and shifting these subsidies to renewable energy in
general and to solar technologies, in particular. For best
practice of financial incentives,6 they should be part of a
comprehensive approach, designed for several years under
stable conditions, avoid early announcement of improved
financial conditions, making sure the availability of funds
while considering introducing “Polluter Pays Principle”
in case of lack of such funds, easy and lean procedures,
standardized product requirements and certification
procedures across the region, tailored quality criteria on
the installation of each country, and sufficient amount to
provide a real incentive.
Access to finance for SWH systems could also play a role
in the market uptake. Engaging banks in providing loans
as has been done in Tunisia and Lebanon is an important
element in reducing the burden on state budget and thus
avoiding “stop” and “go” problems that might be due to
unsustainable government subsidized programmes.
Training, Education and Awareness Raising
Awareness raising is a key element in bridging the
knowledge gap about a certain technology in society
and, thus, overcoming the social acceptance barrier visà-vis solar thermal technologies. As was highlighted in
the regional workshop on solar thermal held in Beirut,
low awareness was one of the main issues explaining the
lower penetration rate of solar water heating systems in
the region. That said, policy makers, public agencies in
particular responsible for the promotion of renewable
energy and energy efficiency, need to fill up this knowledge
gap to promote a wide scale deployment of SWH systems.
Several tools could be used in this regard, including spots
on radios, TV, newspapers, and on their own websites.
The GSWH awareness raising guide provides steps before
initiating an awareness raising campaign: 1) using data and
market surveys, 2) building on and learning from previous
campaigns and marketing activities, 3) ensuring that supply
could meet demand, 4) assuring quality and performance
of supplied products, 5) evaluating market conditions
(SWH market, renovation and construction sectors, prices
of fossil fuels), 6) having a positive and favourable policy
and regulatory framework.7
In terms of education and training, well prepared
professionals, including architects, planners and
installers would be key in promoting a wider penetration
of solar thermal application systems. Technical and
vocational education, for example, is of paramount
importance in preparing highly qualified technicians. Thus,
tailored programs on solar thermal technologies should
be designed and integrated in training programs related
to renewables.
Standardization and Certification
Standardization and certification of products is another
added value in the region, especially its role in intraregional trade. Most of the SEMC countries have set
up a certification scheme or a national standard for
solar thermal collectors and systems. However, these
mechanisms are not mandatory and are not accompanied
by third-party verification. Therefore, imposing mandatory
certification schemes is necessary to prove that these
technologies are reliable, thus giving a positive signal to
stakeholders. Certification and accreditation could also
be required for installers. In this respect, it is worthwhile
highlighting the “SHAMCI”8 initiative. Adopting the scheme
by the Arab Ministerial Council of Electricity is more likely
to overcome market barriers, enhance the quality of
products, and thus promote more trade.
RD&D
Programmes
Improvements
and
Technological
Energy Centre (MEDREC) to promote more regional
cooperation in this regard. Regional cooperation could
also be strengthened through financial instruments like
the Mediterranean Investment Facility (MIF).10
In addition to the SHAMCI initiative for standardization
and certification, other aspects of regional cooperation
could be through joint R&D programs and building a
regional database for knowledge sharing. Establishing
joint research and development (R&D) programs among
key research institutions in the region, form one hand, and
between south countries and European research centres on
the other hand, could be effective in fostering more regional
know-how transfer and regional cooperation. Given the
lack of reliable data and statistics on the development of
SWH applications as well as the lack of documented return
on experience in the region,11 developing a database for
knowledge sharing is very important in this regard.
Conclusion
Technological improvements are key in a wide scale
deployment of SWH systems. Technological developments
have been done on several components to increase
thermal efficiency, which would therefore contribute to
the decreasing cost of heat from solar thermal systems.
Research needs identified by the RHC-Platform regarding
solar thermal are:9
The objective of the action plan was to identify the
enabling environment for boosting and investing in solar
water heating in the South and South East Mediterranean
Countries (SEMCs) by showing the status of solar thermal
technologies, their potential benefits and prerequisites for
an uptake of this market.
•Solar collectors: i) improvement of cost and
performance of low temperature collectors; and ii)
create a mass market in process heat collectors with
working temperatures up to 250˚C.
It highlights some of the critical factors that are prerequisites
for a wide scale deployment, including regulatory and
policy framework, technological improvements and cost
reduction, and social acceptance. These success factors
should be well tailored to each country’s priority needs.
The action plan further provides for priority actions that
need to be taken in order to overcome such barriers,
including regulatory and policy support schemes (targets,
financial incentives, etc.), standardization and certification,
awareness raising and promoting regional cooperation.
•Compact, high density heat storage and refrigeration.
•Multi-functional building elements like fully integrated
façade and roof collectors.
•System designs for industrial applications.
The IEA has also developed several renewable energy
technology roadmaps, including solar thermal for heating
and cooling, by outlining actions needed, milestone
timeline (2012-2030) and stakeholders involved (research
institutes, SHC and cooling industry, universities, etc.).
These roadmaps draw specific recommendations for
each component, including flat-plate and evacuated tube
collectors, concentrating solar for heat applications, solar
heat for cooling, thermal storage and hybrid applications
and advanced technologies.
Regional Cooperation
Creating a regional platform for dialogue, experience
sharing, and collaborative programs could also contribute
to a wide scale deployment of SWH systems in the region.
A plat-form that brings together industry associations is
to be considered. Setting such association would require
strong commitment from stakeholders, especially in
terms of financing. Such cooperation could be at several
levels, including the institutional and regulatory levels.
In this context, it is worthwhile highlighting the creation
of the Regional Centre for Renewable Energy and Energy
Efficiency (RCREEE) and the Mediterranean Renewable
1 The initiative is executed jointly by the United Nations Development Programme (UNDP)
and the United Nations Environment Programme (UNEP). The objective is to create the
enabling conditions for the SWH systems market uptake at the global level, in general,
and in the Mediterranean region, in particular. This article mainly focuses on the solar
thermal strategy. For more detailed information on other aspects, please refer to the
report.
2 SEMCs are Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine, Syria,
Tunisia and Turkey.
3 International Energy Agency (IEA) (2012a), “Technology Roadmap - Solar Heating and
Cooling”, OECD/IEA, Paris, 2012.
4 Country factsheets, (2012) Regional workshop for the Transformation and Strengthening
of the Solar Water Heating Market in the Mediterranean, Beirut, April 2012.
5 Observatoire Méditerranéen de l’Energie (OME), (2012) Regional workshop report, May
2012 (available at: http:www.solarthermalworld.org).
6 Solar Thermal Action Plan for Europe, ESTIF, September 2007.
7 ESTIF (2012), Guide for Awareness-Raising Campaigns, Global Solar Water Heating
Transformation and Strengthening Initiative, ESTIF/UNEP/GEF, 2012, p. 2.
8 The “SHAMCI” initiative has been launched by the League of Arab States, the Arab
Industrial Development and Mining Organization (AIDMO) and the Regional Centre for
Renewable Energies and Energy Efficiency (RCREEE) to establish a regional certification
scheme for solar water heaters.
9 Common Vision for the Renewable Heating and Cooling sector in Europe, European
Technology Platform on Renewable Heating and Cooling, RHC, European Technology
Platform, 2011.
10 It is an initiative promoted by the Italian Ministry for Environment, Land and Sea (IMELS)
in partnership with UNEP to develop a sustainable market system in the Mediterranean
and Balkan regions. The IMELS has provided a financial contribution amounting to USD 10
million to increase available financing for RE and EE systems in Morocco, Egypt, Tunisia,
Macedonia and Montenegro (Moretta, 2012).
11 Observatoire Méditerranéen de l’Energie (OME), (2012) Regional workshop report, May
2012 (available at: http:www.solarthermalworld.org).
39
OME LIFE
Meetings with members
OME General Assembly in Cairo:
Bruno Lescoeur Chairman of OME, Tahar
Laribi, Vice-Chairman and Raafat El Beltagy
Honorary Chairman
Tharwa Petroleum Company, EGAS and EGPC hosted last
OME General Assembly in Tharwa headquarters in Cairo
on 15 May. In this occasion, Bruno Lescoeur, EDF vicepresident and Edison’s CEO, was appointed Chairman. Mr.
OME General Assembly meeting, 16 May 2013, Cairo.
40
Lescoeur succeeds thus to Eng. Raafat El Beltagy who
was appointed Honorary Chairman of OME. Tahar Laribi,
STEG’s CEO, was appointed Vice-Chairman. The General
Assembly also ratified the proposal of EXCO concerning
OME Technical Committees compositions.
In his speech, Eng. El Beltagy ensured that the excellent
relation with OME and its members goes beyond his
chairmanship. He added: “Energy is a keyword now
because it is the matter of upmost interest to societies
and authorities; … I will always be glad to extend
cooperation through authorities in different energy fields,
emphasizing that energy is the key link for countries
and regions. OME is an excellent tool to highlight the role
of the energy industry because it is the pioneer and
one of the most recognized entities in the Mediterranean
and because it has a professional permanent and
professional staff”.
Mr. Lescoeur expressed his honour and full gratitude to
all OME members for appointing him new OME Chairman
and that he very much relies on each member to keep on
supporting the excellent work done by OME. He added:
“I am glad to see the efforts to promote the Association
to continue to play its unique role of being the voice
of the energy industry in the region. It is important to
have the possibility to express companies’ opinion in
particular in this period of strange shape: recession
in the North, strong dynamism in some countries such
as Turkey and Morocco, and more complex situation
in the South and East and also several changes in the
energy sector at world level but also in the region”. He
concluded, “I am proud to chair OME and confident that
the Association can have an impact not only on member
companies, but also their customers, employees and all
stakeholders around them”.
The new OME Vice-Chairman, Mr. Laribi thanked the
members for their trust towards STEG and expressed his
commitment to reinforce further the very good relation
already tied between OME and STEG. He concluded: “The
driving role of energy in economic, social and cultural
development of a country is no longer to be proved. It
is clear of this role in the Mediterranean area that OME
acts with member companies in order to face the energy
challenges the region is confronting. I believe this is the
moment and place to express to OME all our gratitude for
the vital role the Association is playing in our region and
sector”.
OME Executive Committee meeting, 15 May
2013, Cairo
Tharwa Petroleum Company, EGAS and EGPC hosted
OME Executive Committee (EXCO) in Cairo on 15 May. The
meeting was chaired by Eng. El Beltagy, OME Chairman
and discussed the roadmap proposed by the General
Director including the Ministerial meeting and Business
Summit to take place in December 2013 in Brussels.
EXCO also agreed on the new governance issues to be
proposed to the General Assembly as for the Chairman,
Vice-Chairman, Executive Committee and Technical
Committees for a 3-years mandate.
OME Executive Committee meeting, 15 May 2013, Cairo.
41
Other meetings and
events
OME General Director meets HE Eng. Sherif
Ismail, Chairman of GANOPE, 7 April 2013,
Cairo
On 7 April 2013, General Director Dr. Ben Jannet Allal met
with HE Eng. Sherif Ismail, Chairman of GANOPE who is
presently Minister of Petroleum.
The meeting was the occasion to update HE Eng. Sherif
Ismail about OME latest news and exchange about future
plans and topics of interest to Egypt, in particular the
side event to be organized at General Assembly of May.
The meeting was very positive and Eng. Ismail suggested
several topics highlighting the need to be innovative and
to exchange about new topics to pave the future. Among
the topics of interest, energy transition and exchange on
best practices including energy efficiency —which is one
of the topics of most interest to Egypt— were retained.
The meeting was the occasion to update Eng. Desouki and
Eng. Habib about OME latest news and exchange about its
future plans and topics of interest to EEHC. Among topics
of high interest, Eng. Desouki and Eng. Habib highlighted
the conditions of large scale development of renewables,
exchange on best practices, the importance of energy
efficiency and training activities.
OME General Director meets EBRD, 7 May
2013, London
On 7 may 2013, General Director Dr. Ben Jannet Allal
met with Mr. Ricardo Puliti, Managing Director, Head of
Energy and Natural Resources at EBRD and his team. The
meeting was the occasion to exchange information about
OME and EBRD activities in the Mediterranean region.
There was a clear willingness from both sides to establish
cooperation. This will be translated in a Memorandum of
Understanding (MoU) to be signed and joint activities to be
launched within this MoU.
OME General Director meets HE Minister
Eng. Ahmed Mostafa Emam, Ministry of
Electricity & Energy, 8 April 2013, Cairo
RES4MED and OME sign a Memorandum of
Understanding, May 2013, in Milan
On 8 April 2013, General Director Dr. Ben Jannet Allal met
with HE Minister Eng. Ahmed Mostafa Emam, Ministry of
Electricity & Energy and his team. Eng. Mohamed Mousa
Omran, First Under Secretary of State for Research,
Planning and Authorities follow-up and Eng Gaber
Desouki Moustafa, Chairman of EEHC also attended the
meeting.
RES4MED and OME agreed to strengthen their
cooperation and join efforts for activities of common
interest. For this purpose they signed a MoU on 9 May
2013, in Milan, during the RES4MED Conference on
Delivering Renewable solutions within the Mediterranean
electricity market. The MoU was signed by Francesco
Starace on behalf of RES4MED and Bruno Lescoeur on
behalf of OME.
The meeting was the occasion to present to HE Minister
Eng. Ahmed Mostafa Emam OME and its latest news and
exchange about topics of interest to Egypt, including the
side event to be organized by OME at its General Assembly
in Cairo. Among topics of high interest, Minister Emam
highlighted renewable energy integration and energy
efficiency. He also appreciated the training activities OME
is performing and accepted to attend the OME side event
in Cairo.
OME organized a regional workshop for
the transformation and strengthening
of the solar water heating in the
Mediterranean, 20-21 March 2013, Tirana,
Albania
OME General Director meets Eng. Gaber
Desouki, Chairman of the Egyptian
Electricity Holding Company, 8 April 2013,
Cairo
On 8 April 2013, General Director Dr. Ben Jannet Allal
met with Eng. Gaber Desouki, Chairman of the Egyptian
42
Electricity Holding Company. Eng. Mohamed Helmy
Habib, Executive Director for Planning, Power Projects
also attended the meeting.
This event is part of the “Global Solar Water Heating
Market Transformation and Strengthening Initiative,”
financed by the Global Environment Facility (GEF) and
co-financed by the International Copper Association
(ICA) with the United Nations Environment Programme
(UNEP) and the United Nations Development Programme
(UNDP) as the co-executing agencies. The main goal of
the Initiative is to create the conditions for a solar water
heating market uptake at global level, by building on the
most successful examples in developed and developing
OME LIFE
countries, and taking into account the potential and the
necessary prerequisite for deployment.
CEOs from Egyptian and Euro-Mediterranean countries
also took part in this event.
The event, coordinated by OME in cooperation with UNEP
- Division of Technology, Industry and Economics (UNEPDTIE) and UNDP Office in Albania and, took place on 20-21
March, in Tirana, and was organized under the auspices of
the Ministry of Economy, Trade and Energy of the Republic
of Albania.
The event tackled several topics: regional energy
prospects and challenges, hydrocarbons in the
energy mix, perspectives of unconventional gas
in the Mediterranean and growing importance of
East Mediterranean region, renewable energies,
institutional and regulatory framework of the electricity
sector and energy conservation and energy diversification.
The presentations and the lively discussion confirmed
the challenges and opportunities ahead to fuel the
Mediterranean economies in a sustainable way. All
energies are important and regional cooperation is more
than ever needed. In this context, OME has an important
role to play in strengthening the regional cooperation
between companies and countries and also voicing the
industry point of view to the benefit of the sustainable
development of all. The proceedings are available on the
OME website and on request.
More than 40 experts from twelve different countries
around the Mediterranean participated in the workshop.
The workshop gathered both public and private sector
stakeholders; ministries, public agencies and private
companies. The goal of the event was to create a platform
for knowledge sharing and collaboration to transform
and scale up the solar thermal heating market for both
public and private sectors. The first day was dedicated
to the workshop while the second day had two parallel
sessions (B2B meetings & policy makers Working Group
discussions).
OME high level side event: “Energy
conservation and energy diversification:
Towards the energy transition in the
Mediterranean Region”, 15 May 2013, Cairo
The event, hosted by Tharwa Petroleum Company and
sponsored by EGAS, EGPC and OME under the leadership
of Eng. Raafat El Beltagy, gathered more than 60 delegates
and was opened by Eng. Mohamed Mousa Omran, First
Under Secretary of State for Research, Planning and
Authorities follow-up, representing H.E Ahmed Mostafa
Emam, Egyptian Minister of Electricity and Energy
and Eng. Tarek Elbartkawy, First Undersecretary Agreements and Exploration Ministry of Petroleum. Many
Release of OME and MEDGRID joint
publication “Towards an Interconnected
Mediterranean Grid: Institutional
Framework and Regulatory Perspectives”,
28 May 2013, EDF headquarters in Paris
The event, very successful, gathered more than 60
delegates from energy companies, international
organizations and sectorial institutions. It was opened by
André Merlin, President of MEDGRID, and Assaad Saab,
representing Bruno Lescoeur, President of OME, with the
participation of the Tunisian Secretary of State of Energy
and Mines, Nidhal Ouerfelli, who warmly congratulated
OME and MEDGRID (for the study carried out for more
details on the publication, please see publication section
below).
The Mediterranean regional
organizations and initiatives gather
around a Brainstorming meeting called
by OME and entitled: towards a common
position on the MSP and the Euro-Med
energy community and beyond, 24 June 2013,
Nanterre
Side event “Energy conservation and energy diversification”, 15 May
2013, Cairo.
OME organized and hosted a “brainstorming meeting”
bringing together several major stakeholders of the
Mediterranean energy landscape, namely Dii, IPEMED,
MEDELEC, MEDENER, MEDGRID, MEDREG and RES4MED
(MEDREC, MEDTSO and RCREEE were excused), in order
to discuss the opportunity of joining forces and possibly
preparing “common positions” (Declarations) on two
43
important topics —the Mediterranean Solar Plan (MSP)
Master Plan and the Euro-Med Energy Community—
that will be discussed during the Ministerial Meeting
which will be held in Brussels on December 11th , 2013.
Mr. Janez Kopac, Director of the Energy Community
Secretariat, also participated in the event and shared
with participants, the history, achievements and lessons
learnt from the Energy Community.
The meeting was very fruitful and all participants welcome
the initiative of joining forces, including those who could
not attend the first meeting.
Participants agreed that two separate “common position”
papers will be prepared: one on the MSP and another
one on the Euro-Med Energy Community. Two core
drafting groups were set up for each Declaration project
(Res4Med, DII, Medgrid & OME for the MSP and OME &
Medgrid for The Community); all other partners being
invited to contribute with every kind of input considered
relevant in order to attain a common position within a
shared vision.
As for the main messages regarding the Tunisian
strategy, there are clear signals from the Authorities to
give priorities to energy efficiency and renewable energy.
A new institutional framework for renewable energy is
ready and pending approval. It is based on a feed-in tariff
mechanism. The plan is to set targets for each year (MW
to be installed and technology) and projects would be
awarded on a first come first served basis (the first which
fulfils the eligibility criteria). STEG will remain the single
buyer.
As for hydrocarbons and shale gas, efforts would be
devoted in order to attract investors and develop national
resources with respect to environment constraints.
The issue of subsidies has also been raised by all speakers.
Efforts would need to be made in order to allocate the
subsidies to those who really need it.
Participants agree that OME will inform the UfM/EC about
the work progress and a meeting of the Presidents of
our Associations may be organized on December 10th to
officially release the “common position papers”.
Capacity building, scientific research, technology transfer,
awareness among others are also of high importance to
the Tunisian Government along with regional cooperation
with neighboring countries and the Euro-Mediterranean
region, in particular. OME has with no doubt a role to play.
OME took part in the high level launch of
the national debate on energy in Tunisia,
27 June 2013, Tunis
Mr. Claude Mandil and OME General Director Houda Ben
Jannet Allal had then a meeting with Mr. Mehdi Jomaâ,
Tunisian Minister for Industry and Dr. Nidhal Ouerfelli,
Secretary of State in charge with Energy and Mines.
The Tunisian government launched their first national
debate on Energy as part of a very high level event “which
energy future for Tunisia”. The event was inaugurated
by President Mohamed Moncef Marzouki and the head
of government, Ali Laârayedh with the participation of
several members of the Tunisian government, several
ambassadors, CEOs of the energy sector companies,
politicians, international organizations, experts, and
representatives of the civil society. The event was
organized by the Tunisian Ministry of Industry with support
of Société Tunisienne de l’Electricité de du Gaz (STEG),
Entreprise Tunisienne d’Activités Pétrolières (ETAP) and
the Tunisian Agency for Energy Conservation (ANME).
OME Chairman, Bruno Lescoeur, and former Executive
Director of the International Energy Agency, Claude
Mandil, were invited to contribute to the event respectively
on the Mediterranean and International energy contexts.
OME was also present through Tahar Laribi, Vice
Chairman and CEO of STEG; Mohamed Akrout, CEO of
ETAP; and Houda Ben Jannet Allal, General Director of
OME. The messages of OME were presented by Claude
Mandil on behalf of Bruno Lescoeur with particular
44
emphasis on the importance of the regional cooperation
and the role of OME.
The day after, OME General Director Houda Ben Jannet
Allal participated to the workshop organized by STEG
in cooperation with Medgrid on the perspectives of
development of electricity exchanges in the Mediterranean
region. The event was chaired by Mr. Tahar Laribi CEO of
STEG and Vice-Chairman of OME.
High level event, 27 June 2013, Tunis.
OME LIFE
OME and IME meet to discuss a possible
collaboration in the field of Energy and
Water, 11 July 2013, Nanterre
OME hosted a meeting with IME (Institut Méditerranéen
de l’Eau), bringing together from IME: Hachmi Kennou
(Executive Director) and Malika Roussel (In charge
of Project Management), from EDF: Marie-Isabelle
Fernández (Responsible for Water coordination) and
from OME: Houda Jannet-Allal (General Director), Lisa
Guarrera (Monitoring and Modeling Director) and Hassan
Abaach (Electricity Director). The purpose of the meeting
was to discuss the opportunity of cooperation between
OME and IME.
The meeting was very constructive and the conclusion
was clear about the opportunity to work together and
exchange expertise on the topic of Energy and Water.
More concretely, OME and IME could collaborate in three
ways:
• Firstly, by exchanging information and expertise, on
energy from OME, and on water from IME.
• Secondly, in collaborating in OME trainings such as
ENERMED and UMET, where IME could provide an
insight on the topic of water in relation to energy.
• Lastly, by joining forces to look for common studies
and projects (identifying projects, looking for financing,
drawing the analysis, organizing conferences). Some
priority topics have already been identified.
OME and IME agreed to sign a Memorandum of
Understanding (MoU).
OME coordinated two Workshops
under the SHARAKA project framework,
27 October in Doha and 30 October 2013
in Kuwait
These outreach and dissemination events focused on
the current state future perspectives of EU-GCC
Cooperation on Energy – Challenges and Opportunities,
which took place at the Student Center, Hamad bin
Khalifa, Education City, Doha. The second workshop
was held at the Kuwait Environment Public Authority
headquarters, Shuwaikh Industrial Area, Fourth Ring
Road, on October 30 th , 2013. This half-day workshop
sought to bring together experts from industry, research,
academia, public officials, business as well as students
and civil society actors to discuss the current state of
cooperation between the EU and GCC on energy issues,
with a specific focus on Kuwait.
The main findings and recommendations of the Technical
Report on EU-GCC cooperation on energy, prepared
by OME within the framework of the SHARAKA project,
were presented and discussed with key Kuwaiti
stakeholders.
OME organized the Stakeholder
Consultation Workshop – North Africa
under the BETTER Project, 28 October 2013,
Rabat, Morocco
On 28 October 2013. It was organized within the
framework of the EC project “Bringing Europe and Third
Countries Closer together through Renewable Energies”
(BETTER). This one-day successful workshop addressed
and discussed the following topics:
• Preliminary results of BETTER project and, in
particular, of the North African Case Study.
• An overview of the current and expected contribution
of the RES-E in Morocco, Algeria, Tunisia, Libya and
Egypt.
• Joint discussion about the required framework,
opportunities and barriers associated to the
implementation of Article 9 in the North African
region.
OME participated to the 2nd Ad hoc Senior
Officials Meeting on Energy, 5 November,
Barcelona, Spain
Following the invitation of the Secretariat of the UfM
on behalf of the co-presidencies of the Union for the
Mediterranean, OME participated to the second Ad hoc
Senior Officials Meeting on Energy held on 5 November
2013, at the Palau de Pedralbes, in Barcelona,. The
meeting gathered more than 50 delegates representing
the co-presidencies of the UfM, the UfM Secretariat,
representatives of the UfM member states and
representatives of the Mediterranean regional
organizations (non-state stakeholders). OME delegation
was composed by Assaad Saab representing Chairman
Bruno Lescoeur and General Director Houda Ben Jannet
Allal.
The meeting discussed the final version of the
Mediterranean Solar Plan, the draft Ministerial
Declaration in view of the UfM Ministerial Meeting on
Energy that will take place in Brussels on 11 December,
the ministerial meeting agenda and the EIB-OME-UfM
Conference on 10 December in Brussels.
45
EIB - OME - UfM Conference on
“Energy efficiency in the Mediterranean”,
10 December 1013, Brussels
The European Investment Bank, in collaboration with
OME and the Union for the Mediterranean, is organizing
the next FEMIP Conference with a focus on energy
efficiency and which will be held in Brussels on Tuesday
10 December 2013.
Energy demand in the Southern and Eastern
Mediterranean region is being driven by both economic
and population growth. Implementing energy efficiency
measures can help reduce the burden of rising energy
demand, bringing increased economic competitiveness
and local employment opportunities, both of which are
essential for the region.
This high-level event will therefore focus on ways to
ensure the successful implementation of investments in
energy efficiency, including the:
• transition towards energy efficiency in industry;
• role of public
partnerships;
authorities
and
public-private
• financing of technologies and programmes to promote
a wider uptake of energy efficiency initiatives.
More information available at: www.eib.org/femip/
conference and www.ome.org
Projects and Studies
The Global Solar Water Heating Market
Transformation and Strengthening
Initiative – phase III
The project is financed by UNEP through GEF
Funds which started in November 2012 and will
be completed on December 2013. OME acts as the
regional coordinator of the knowledge management
component of the project in the Mediterranean region.
The overall goal of the project is to accelerate global
commercialization and sustainable transformation of
the solar water heating market. The aim of this third
phase is to complement and extend the activities
carried out during the previous phases. As a first
step, a workshop and B2B meetings were organized
in Tirana, Albania, on 20-21 March, which gathered
more than 40 experts from Mediterranean and Balkan
countries. During the coming months, OME will update
46
the Market Assessment report by expanding it to the
Balkan countries.
Flagship - Forward Looking Analysis of
Grand Societal Challenges and Innovative
Policies
OME is taking part in the European Commission’s
FLAGSHIP Project. This three year project, started
in January 2013, has multi-objectives. These are i)
Understanding and assessing the state of the art of
forward looking methodologies in relation to Grand
Societal Challenges (GSC) and developing tools and
modelling frameworks beyond state of the art; ii)
Applying an enhanced set of forward looking methods
and tools to support EU policies, by analysing reference
and alternative scenarios of long-term demographic,
legal, economic, social and political evolutions of Europe,
in a world context, and assessing potential progress in
technological and social innovation; iii) Driving change,
producing a set of EU-relevant policy recommendations
on the potential of the EU for transition and change.
OME participates in three work packages within the
project: 1) formulating the environmental trends and
challenges within the current appraisal of Grand Societal
Challenges, 2) quantitative analysis of the environmental
dimension of GSC, 3) helping the dissemination and
stakeholders involvement activities. In June 2013,
OME submitted a report entitled “Energy and Climate
Change” for OME’s first task in the project. OME also
participated to the Fifth Annual European Seminar on the
Future of the European Union as well as the FLAGSHIP
Workshop: Forward Looking Analysis of Grand Societal
and Governance Challenges in Ventotene, on 14-15 June
2013.
DNICast – Direct Normal Irradiance
Nowcasting methods for optimized
operation of concentrating solar
technologies
DNICast Project is a new EC collaborative project. The
consortium is composed of 12 partners: Fundacion
CENER-CIEMAT (CENER) (ES), University of Patras
(UNIPATRAS)
(GR),
Genossenschaft
Meteotest
(Meteotest) (CH), Association pour la recherche et le
développement des méthodes et processus industriels
(Armines) (FR), Rheinisches Institut für Umweltforschung
an der Universität zu Köln E.V. (RIUUK) (DE), Sveriges
Meteorologiska och Hydrologiska Institut (SMHI) (SE),
Deutsches Zentrum für Luft- und Raumfahrt e.V. (DLR)
(DE), Leibniz Institut für Troposphärensforschung
(TROPOS) (DE), Centro de Investigaciones Energéticas,
OME LIFE
Tecnológicas y Medioambientales (CIEMAT) (ES),
Eidgenoessisches
Departement
Des
Innern
(METEOSWISS) (CH), The Cyprus Institute Limited (CYI)
(CY) and OME. The objectives are to establish a portfolio
of innovative methods for the nowcast of DNI and to
combine these methods, to validate the nowcasts and
assess the influence of improvement in DNI nowcasting
on nowcasting of Concentrating Solar Technologies
(CST) and Concentrating Photovoltaics (CPV) plant output,
involve the potential users of nowcasting methods, and
assure proper dissemination and exploitation of project
activities and results. The project officially started on
15 October 2013 for a 48 month duration. The kick-off
meeting took place in Brussels at the EU on October
22nd, 2013.
SolarMedAtlas, phase 2
The project is funded by the German Federal Ministry
for the Environment, Nature Conservation and Nuclear
Safety. The consortium is led by DLR (German Aerospace
Center), and composed of Armines / Mines-ParisTech,
Transvalor, Joint Research Center of the European
Commission, GeoModel Solar, UNEP, RCREEE and OME.
The main objectives of the project are to improve the
resource data base, improve access to data and improve
the knowledge data base for solar energy policy making
and investments. The project develops a web portal for
the help of policy planners and investors in the region.
The kick-off meeting for the second phase is expected to
take place on 2 and 3 December in Stuttgart, Germany.
Technical committee’s
activities
OME Strategy Committee, 5 July 2013,
Casablanca & 24 October 2013, Nanterre
Strategy Committee met twice during the last six months.
Hosted by ONEE, the first meeting took place at Hotel
Kenzi Tower in Casablanca on 5 July and the last meeting
of the Committee took place at OME premises in Nanterre
on 24 October and was followed by a dinner hosted by
EDF. A side event was organized at each meeting with
participation of a guest speaker.
Mr. Abderrahim El Hafidi, General Director, Ministry of
Energy & Mines (Morocco) participated to the Casablanca
meeting, and kindly shared with OME members the
Moroccan energy strategy and point of view on priority
OME Strategy Committee, 5 July 2013, Casablanca.
aspects for a better cooperation. The Moroccan energy
Strategy has been defined in two steps:
1. Priority action Plan: urgent actions have been
undertaken in order to develop new generation
capacities and promote demand side management
(DSM) actions for peak saving purposes.
2.Strategy horizon 2020: targeting 2 GW solar, 2 GW
wind programme. Hydro is also being promoted with
natural gas in order to address the variability nature of
renewables.
Mr. El Hafidi also highlighted the complexity of convincing
to develop technologies which are not yet competitive
as compared to largely used technologies is not an easy
task. In order to overcome this important barrier, it
is important to develop integrated projects. In addition,
important efforts are being devoted to improve the
regulation so as to attract investments. A regulation
authority totally independent will be created by the end of
2013 / early 2014. So far the law 13.09 allows the private
sector to produce electricity (MV). As for low voltage,
PV grid parity is almost reached. An updated energy
efficiency programme is also being defined based on the
results obtained since 2009. Furthermore, natural gas
should also play an important part in the energy mix to
complement renewables and facilitate their integration.
A gas pipeline is linking Morocco to Algeria and a contract
has been signed with Sonatrach regarding natural gas
supply. In addition, a GNL terminal will be built in order to
diversify the gas supply (5 bcm as a first step).
Moreover, Mr. El Hafidi also highlighted that regional
integration is a major component of the Moroccan
Strategy. He added he is convinced that energy is not only
a national concern, but should be treated as a regional
one regardless of frontiers: network integration and the
creation of a regional energy market would bring benefits
to the whole countries in the region.
47
with the North Mediterranean region and Europe. She is
also convinced that a political shared vision for the euromed regional cooperation is needed, in addition to the
Mediterranean of projects as suggested by the French
President François Hollande.
For Mrs. Levallois the euro-med regional cooperation
needs to be built on the basis of a real partnership and
not any more on a commercial relationship basis.
OME Strategy Committee, 5 July 2013, Casablanca.
Mrs. Agnès Levallois, Editorial adviser, Editor-in-chief
IPEMED News, journalist and consultant specialist in
the Arab world participated to the meeting held in Paris,
and kindly shared with OME members her point of view
on the Euro-Mediterranean relations. Mrs. Levallois
reminded the challenging context the region is facing
both in the North and in the South with the prevailing
economic and financial crisis and the political transition
in the South. While the medium and long term vision is
difficult to apprehend, Mrs. Levallois insisted on the need
to keep close contacts, to be proactive and to be patient
as the transition will need time before the situation gets
stabilized.
She also stressed the need for regional cooperation and
dialogue which is missing. In this context, the SouthSouth cooperation is a prerequisite for effective dialogue
OME Electricity Committee, 19 September 2013, Tunis.
48
In addition to the side events, the Casablanca meeting was
the occasion for members to review and discuss OME latest
news: outcome of the General Assembly and side event
held in Cairo 15-16 May, ongoing activities, the Ministerial
meeting and the Mediterranean Business Summit (OME/
EIB Conference), The OME Declaration to the Ministerial
meeting: feedback from technical committees and
general discussion, OME work programme and priority
topics for the strategy Committee for 2013-2015, point of
view of Members.
The Paris meeting was mainly dedicated to reviewing and
finalizing OME Declaration for the Ministerial meeting.
The final draft will be submitted to EXCO for approval.
OME Hydrocarbons Committee, 23 July 2013,
Nanterre
Hydrocarbons Committee Meeting was held on 23 July 2013
at OME premises in Nanterre. Participants from Member
companies discussed progress made with regards to the
work programme of the Committee and plans for the
three years to come. Two new reports prepared by the
Hydrocarbons Division on Europe’s future natural gas
import requirements and Europe’s gas supply sources
and routes were presented. Recent and future natural
gas developments in the East Mediterranean region as
well as an on-going study on future gas supply costs to
Europe were also discussed among participants. Guest
speaker Tim Gould from the International Energy Agency
gave a presentation on “the IEA outlook for the World oil
market”.
OME Electricity Committee, 29 May,
Nanterre &19 September 2013, Tunis
The Electricity Committee took place on the 29 May at
OME office, in Nanterre (Paris), and a second Committee
meeting was organized in Tunis on 19 September 2013.
The first meeting held in Nanterre updated participants
about the OME latest news regarding the outcomes
of the General Assembly held in Cairo on May 16th,
and topics treated during the side-event conference
organized on May 15th on “Energy conservation and
energy diversification: Towards the energy transition
in the Mediterranean Region”. During the meeting the
importance of the partnerships that OME established
with MEDGRID, RES4MED and the UfM has been also
underlined, stressing the relevance of promoting a
regional cooperation between all the stakeholders of the
Mediterranean area, and drawing attention to the role that
the Electricity Committee should play in this perspective.
Then, the meeting focused on projects carried out by
the Electricity Division, as the publication of the OMEMEDGRID book on the regulatory perspectives for a more
interconnected Mediterranean grid, and on the ongoing
studies as MEP Turkey, MEP 2014, and the forthcoming
Discussion Paper on the impact of regulation on crossborder transmission investments.
The second Electricity Committee meeting, kindly hosted
by STEG, was preceded by an opening session with the
participation of the Tunisian Secretary of State in charge
of Energy and Mines, Mr. Nidhal Ouerfelli and the VicePresident of OME, as well as CEO of STEG, Mr. Tahar
Laribi. The president of the Electricity Committee, Mr.
Andrea Testi from EDISON, and the Director General of
OME, Mrs. Houda Allal, moderated the session.
Secretary of State Mr. Ouerfelli presented the state of
the art of the Tunisian energy policy as well as the main
challenges for the future, highlighting how urgent is the
improvement of the national energy security, both by
investing in cross-border transmission infrastructures,
in particular electricity interconnections, and by
increasing the diversification of energy sources as well
as the level of energy efficiency, in order to reduce
the country’s energy vulnerability. In this regard, Mr.
Ouerfelli announced that Tunisia plans to reach 30% of
electricity production from renewables by 2030, within a
wider strategy aimed at promoting private investments in
generation, strengthening the grid to allow the integration
of variable electricity into the system, and progressively
phasing out from subsidies, starting from energy
intensive and polluting industries. Moreover, concerning
cross-border investments, both the reinforcement of
existing interconnections (Algeria and Libya), and the
construction of new ones (Libya and Italy) are planned
for implementation in the early future. The Secretary
of State renewed the support of Tunisia to OME, which
represents for more than twenty years a reference point
for the promotion of regional cooperation and dialog in
the energy field.
OME Renewable Energy Committee, 16-17
April 2013, Istanbul & 30 September 2013,
Paris
The last RE Committee took place in Paris on 30
September 2013. It was organised at the Conference
and Exhibition Center in Villepinte, at the occasion of
the 28th EU PVSEC conference, held from 30 September
through 4 October. The agenda included: i) an update of
the projects carried out by the RE division, ii) a revision
of the programme of work over the next three years, iii)
a discussion on the Declaration to be presented by OME
at the occasion of the UfM energy ministerial meeting
that will take place in Brussels on December 11th , 2013,
iv) next OME events, conferences and planning of next
meeting. The Committee meeting saw the participation
of about 20 participants. Within the framework of the
partnership with the organisers of the PVSEC conference,
all OME delegates were offered free passes to attend the
entire conference programme.
The previous RE Committee meeting was held in Istanbul
on 16-17 April 2013, kindly hosted by TEIAS. Besides
the internal meeting for OME members, a workshop on
“RE prospects in Turkey” was organized. The workshop
was articulated in different sessions: i) Long-term
objectives and vision for renewables in Turkey, ii)
Models and Scenarios, iii) Industry, market and business
perspectives. The workshop brought together Turkish
representatives from government, industry, business
as well as international experts from intergovernmental
organizations, academia and research centers.
49
Training
OME at the ENEL Foundation training
course, 20 May 2013, Venice
OME Director of Modelling and Monitoring Division,
Lisa Guarrera, gave two lectures at the Training
Course for public officers and energy experts from the
Mediterranean Region organized by ENEL Foundation
and IEA in collaboration with RES4MED and MEDTSO.
The training was held at Venice International University
on the San Servolo Island from May 20th to May 24th 2013.
The objective of the training was to provide a 4 day
training course on New Challenges for Energy System in
the Mediterranean Region.
OME provided the opening lectures to set the picture and
future challenges of the region. The two lectures focused
on the Mediterranean situation (past and present) and on
the Mediterranean Energy Perspectives Scenarios.
OME ENERMED: Energy Statistics
and Balances, 1-2 July 2013, Paris
OME Hydrocarbons Division led the 5th session of the
OME Enermed training programme. Through the 2-day
workshop, the objective was to get junior staff of OME
Member companies and partners familiarized with the
definitions and procedures most commonly used to
collect and process energy data. It was highlighted the
ENERMED training Workshop, 3 July 2013, Nanterre.
50
importance for energy analysts/statisticians to be in a
position to grasp the quality of energy data and understand
the definitions used, in order to assess energy challenges
and opportunities.
Guest speaker, Taejin Park, statistician at the Energy
Data Centre of the International Energy agency (IEA) also
contributed to the sessions and stimulated the group of
Delegates participating in the meeting. His presentation
on the current work carried out by the IEA on the
implementation of a data collection system on energy
efficiency indicators was very appreciated by participants.
Participants welcomed the initiative and highlighted the
usefulness of the information received and encouraged
repeating this kind of encounters.
All materials (presentations, agenda) of the 5th ENERMED
session are available for Members on the OME website
and upon request.
OME ENERMED: Market Regulation in
the Mediterranean Area and Renewable
Energy Integration into the Electricity
Systems: Challenges and Solutions,
with contributions of MEDELEC/STEG,
MEDGRID and MEDREG, RTE and Université
Montpellier, 3-4 July 2013, Paris
The objectives of the 6th Enermed session were to get
junior staff of OME Member companies and partners
OME LIFE
familiarized with latest developments and future
perspectives of investment needs and market regulation
in the Mediterranean; support mechanisms and mitigation
measures for renewable energy integration; and get
acquainted with the evolutionary process for integrating
the Mediterranean electricity networks from a technical,
regulatory and political perspectives.
This two-day training session was led jointly by OME’s
Electricity Division staff and other internationally
renowned experts and partners: Prof. Jacques Percebois
(University of Montpellier), Mrs. Afef Chellouf (MEDELEC/
STEG), Mr. Benjamin Gallèpe (MEDREG), Mr. Patrick
Sandrin (MEDGRID), Mr. Jean-Yves Leost (RTE). Through
the 2-day workshop, they highlighted the current
situation and perspectives of the electricity market
in the Mediterranean; the regulatory context of the
electricity sector in terms of grid access and renewable
integration issues, in particular challenges and solutions
for system operators; mitigation measures for wind
power integration in the MEDELEC countries; and the
institutional framework and regulatory perspectives
for an interconnected Mediterranean grid; as well as
the importance and role of MEDREG and the regional
regulatory perspectives to foster a regional electricity
integration in the Mediterranean.
The evaluation of the Workshop made by delegates was
very positive; they highlighted the usefulness of the
information received and encouraged repeating this kind
of encounters. They, in particular, appreciated the high
level of experts and the quality and relevance of the topics
treated.
All materials (presentations, agenda) of the 6th ENERMED
session are available for Members on the OME website
and upon request.
The publication, oriented towards open and transparent
cooperation in the field of electricity, makes twelve
recommendations for a progressive reform process,
along three main axes:
• Introducing a pre-market design for electricity in South
and East Mediterranean Countries (SEMC).
• Fostering development of new interconnectors through
more favorable regulations.
• Supporting cross-Mediterranean trading of electricity
from renewable sources.
Progress in these directions will be achieved by working
at different levels. At the regulatory level, national
regulators should define new rules for third party access
to the grid and to interconnections, in a harmonized
way, with support of MEDREG. At the technical level,
Transmission System Operators (TSOs) should cooperate
to allow for integration of national grids and electricity
markets, in the framework of MED-TSO. Above all,
political consensus and impetus are necessary, brought
by the UfM.
As many other institutions, OME and MEDGRID are ready
to play a role in the implementation of the recommended
measures. MEDGRID and OME are particularly functional
for transfer of know-how and for catalyzing fundamental
interests of private stakeholders, from industry and
financing institutions operating in the Mediterranean
area.
The publication can be ordered at www.ome.org
Publications
“Towards an Interconnected
Mediterranean Grid: Institutional
Framework and Regulatory
Perspectives”, Joint OME - MEDGRID
Publication, May 2013
This is the first OME-MEDGRID joint publication and
the objective is to provide an up-to-date study to foster
power exchanges and develop interconnections in the
Mediterranean region.
51
Europe’s Future Natural Gas Import
Requirements by Country, May 2013
Communication
OME investigated the natural gas import needs for each
country in Europe to 2030 under two main different
scenarios —gone green and gas naturally. The study
looks at domestic production and demand developments
in each country in order to determine the net import
needs. In the gone green scenario, main assumptions are
an aggressive push for renewable energy development
as well as drastic measures to improve energy efficiency
in Europe, particularly in the EU member states. In this
scenario natural gas is seen as a polluting fuel whereas
in the gas naturally scenario, OME assumed it would be
the fuel of choice and an ideal back-up fuel for renewable
energy sources. The geographic coverage of the study is
rather larger than the ones reported by other institutions
as it includes EU-27, former Yugoslavian non-EU
countries, Albania, Iceland, Switzerland and Turkey.
• Houda Ben Jannet Allal, “Energy Prospects in the
Mediterranean Region”, Regional meeting of the
MENA-OECD Task Force on Energy and Infrastructure
in co-operation with the EU Delegation to Egypt and
the Confederation of the Euro Arab Chambers of
Commerce, Cairo, 8 April 2013.
•Houda Ben Jannet Allal, participation to the panel on
“how to give impetus to large scale euro-med energy
projects: needs, possibilities and challenges” EuroMediterranean rendez-vous on Energy, UE-UfM:
a common sustainable energy future”, under the
patronage of Martin Schulz, President of the European
Parliament and President of the Parliamentary
Assembly of the UfM, organised by MEDGRID, European
Parliament, Brussels, 11 April 2013.
Quantitative Assessment of Europe’s
Future Gas Import Sources and Routes,
July 2013
• Sohbet Karbuz, “Changing Prospects for Natural
Gas in the East Mediterranean”, presentation at the
TUROGE - Turkish International Oil & Gas Conference
& Showcase, Ankara, 10-11 April 2013.
The objective of this report was to assess how much
• Sohbet Karbuz, “Eastern Mediterranean natural gas
current situation & long term prospects”, presentation
at the Lebanon Oil & Gas Summit, Beirut, 23-23 April
2013.
gas could be imported into Europe to 2030 by country of
origin and route. Keeping in mind that long term implies
uncertainty, OME tried to provide quantitative estimates
for the export potential of each existing and potential
supplier country and how much of that potential could
eventually come to Europe and EU-27, both by pipeline and
via LNG under alternative scenarios. Obviously, not all the
possibilities presented in the report will be realised as it
requires political and industrial decisions to be taken (in
due time) to transform export potential into exports.
•Hassan Abaach, Meeting of the Executive Members
of the Energy Group of the PAM Panel on Trade and
Investments in the Mediterranean, Rabat, 5 May 2013.
•Houda Ben Jannet Allal, “OME in Brief: Achievements,
lessons learned & activities”, RES4MED Conference
on Delivering Renewable solutions within the
Mediterranean electricity market, Milan, 9 May 2013.
•Houda Ben Jannet Allal, “Energy Prospects in the
Mediterranean Region”, OME, Thrarwa and EGAS
Side Event on Energy conservation and energy
diversification: towards the energy transition in the
Mediterranean Region, Cairo, 15 May 2013.
•Houda Ben Jannet Allal, “Vers une Communauté EuroMéditerranéenne de l’Energie”, Les petits déjeuner de
52
OME LIFE
la Méditerranée, organised by IPEMED in cooperation
with OME, Paris, 28 May 2013.
•Houda Ben Jannet Allal, “Energy Prospects in the
Mediterranean Region: The transition is a must”,
EDISON WEC Conference on Energy transition in
Europe: different pathways, same destination?, Rome,
29 May 2013.
•Houda Ben Jannet Allal, “Energy prospects in the
Mediterranean region”, High level meeting of the PAM
Panel on Trade and Investment in the Mediterranean,
Harnessing Trade for Growth in the Mediterranean,
joint PAM/UNECE/UNCTAD Conference, Geneva, 30-31
May 2013.
• Sohbet Karbuz, “Natural Gas in the Southern & Eastern
Mediterranean: Prospects to 2030,” presentation at
10th Maghreb, Mediterranean, MidEast Upstream
Conference, Paris, 4 June 2013.
•Houda Ben Jannet Allal, “À quand un ‘âge d’or du gaz‘
pour la zone Euro-Méditerranée?”, Conference on
4ème Rencontres Énergies & Stratégies -- Regards &
perspectives, organized by Eurogroup Consulting, in
cooperation with MEDGRID, IGU and the CGEMP Paris,
18 June 2013.
• Matteo Urbani, “Regional Governance for Electricity
Integration in the Mediterranean: Which Institutional
Framework?”, Loyola de Palacio Workshop “The
‘Schengenization’ of EU Energy Policy, the Case of
Euro-Mediterranean Renewables Exchange”, Florence,
27 June 2013.
• Matteo Urbani, “Mediterranean Natural Gas
Perspectives and the Role of Power Generation”,
9th Gas Centre Task Force on Supply, Infrastructure
and Market” organised by EDISON and UNECE GAS
CENTRE, Rome, 8-9 July 2013.
• Matteo Urbani, “The added value of RE generation in
the reorganization of the electricity markets in the
Maghreb countries”, 3rd MEDREG-IMME Seminar:
Reform and Opening of Maghreb Electricity Markets
organised by MEDREG with the cooperation of STEG,
Tunis, 8-9 11-12 September 2013.
•Houda Ben Jannet Allal, “Energy today and tomorrow:
Current challenges and a 2030 vision for the
Mediterranean”, MEDENER / ANME Conference on:
The Mediterranean Region, towards energy transition:
issues, means and outllook,Tunis, 18 September 2013.
• Emanuela Menichetti, “Stakeholder consultation:
Update on activities conducted”, meeting of the EC
project BETTER, Athens, 19 September 2013.
• Emanuela Menichetti, “Stakeholder engagement:
Approach and lessons learnt”, BETTER stakeholder
meeting, Athens, 20 September 2013.
•Houda Ben Jannet Allal, “Renewable Energy
Perspectives in the Mediterranean countries - the
Mediterranean Solar Plan”, Workshop Les énergies
renouvelables au service de l’humanité : les défis
actuels et les perspectives en 2030 et 2050, organised
by ADEME, CNRS and UNESCO, Paris, 3 October 2013.
• Sohbet Karbuz, “Effects from Eastern Med and Caspian
Exploration: The Attractive Neighbours’Influence”,
presentation at the Black Sea Oil & Gas Exploration
and Development Forum, Istanbul, 15 October 2013.
• Emanuela Menichetti, “The EU-GCC Cooperation on
Energy: Challenges and Opportunities”, SHARAKA
outreach and dissemination event, Doha, 27 October
2013.
• Emanuela Menichetti, “The EU-GCC Cooperation on
Energy: Challenges and Opportunities”, SHARAKA
outreach and dissemination event, Kuwait City, 30
October 2013.
•Houda Ben Jannet Allal, “What challenges are
regulators facing in a changing environment? - View
from the outside”, MEDREG - CEER Roundtable,
Grasse, 19 November 2013.
•Houda Ben Jannet Allal, participation to the panel on
“Which role is attributed to Renewable energies in the
national strategies of Germany, France and the MENA
countries and which complementary elements do they
contain?“, Franco-German cooperation in the context
of the transitions of the international energy system
organised by MEDGRID and DII in cooperation with
Notre Europe Jacques Delors Institute, Genshagen
Fundation and the Stiftung Wissenschaft und Politik,
Paris, 12 November 2013.
53
HOW TO
REACH OME
Access by Train / RER
Address
•OME Office is just one station away from La Defense
105, rue des trois Fontanot
Immeuble Axe Etoile (2nd Floor)
•From Charles de Gaulle or Orly airport, take RER B
92000 Nanterre - France
•Connect by taking RER A (direction Cergy-Poissy
Tel: + 33 (0) 170 169 120
Fax: + 33 (0) 170 169 119
E-mail: [email protected]
54
and about 7 minutes from Paris Charles de Gaulle-Etoile
> stop at Châtelet station
or St-Germain en-Laye)
> stop at Nanterre-Prefecture station
•Take Esplanade Charles de Gaulle exit, passing by Mercure hotel, keep walking straight, cross the road and go straight ahead till you reach 105, rue des trois Fontanot (about 2 minutes walk)
OME MEMBERSHIP

Global Energy for the Mediterranean

Transcription

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