Taking a cue from the EU, members of the Arab League have adopted renewable energy and energy efficiency plans and targets. But they lack incentives and a stable policy framework to drive growth. “There are local initiatives, but no process to underpin an energy transition”.
The Middle East and North Africa (MENA) have woken up to their renewables and energy efficiency potential, but are still looking for ways to realise it. At the 17th Eufores Inter-parliamentary Meeting on renewable energy and energy efficiency in Valletta, Malta, on 19-20 May (part I; part II will be held in Tallinn, Estonia at the end of September when the latter has taken over the rotating EU presidency from Malta), national and European policymakers, as well as energy industry representatives and other experts, met to debate energy and climate policies in the region.
Eufores is a cross-party network of Members of Parliaments from the European Parliament as well as from the EU28 national and regional Parliaments with the objective of promoting renewable energy and energy efficiency. In Valletta, for the first time ever, non-EU countries from the region took part in an Eufores meeting.
Even Greece is three times as energy efficient as a country like Egypt
Just like EU member states, members of the Arab League have prepared national energy efficiency action plans (NEEAPs) and national renewable energy action plans (NREAPs), noted Albrecht Kaupp, a senior energy analyst who has worked for the German development agency GIZ as an energy expert for the MENA region since 1987.
The Arab League has basically taken over the essence of the EU’s renewable and energy efficiency legislation from 2008-12, said Kaupp. Many MENA countries have ratified the Paris Climate Agreement and set significant energy efficiency and renewables goals. Some of these mirror the EU’s own goals, such as Tunisia’s 30% targets for 2030, or Jordan’s 20% energy efficiency goal for 2020.
Yet, energy efficiency and solar and wind, remain marginal contributors to the MENA energy mix as a whole: both stand at just a few percent. Although there has been a significant increase in renewables deployment, this has been “eaten up” by high demand growth (4-8% a year for electricity in the last decade). “As long as there is not more energy efficiency action, all our achievements on renewables will not really be visible,” said Kaupp.
Energy efficiency, he explained, should be the “first fuel” but remains “the most difficult to trade because you cannot meter it like electricity, weight it like coal or sell it by the barrel like oil”. Kaupp also noted that solar PV has emerged as the “clear winner” in the battle for renewables in the MENA region. Concentrated Solar Power (CSP) is on the retreat despite its dispatchability (too expensive) and wind remains niche (highly competitive and cost-effective in only a few countries).
MENA countries face some of the same and some different problems compared to EU member states. “The political objectives are there, but we need the tools to realise them,” said another energy and climate expert, Rafik Missaoui, who owns his own sustainability consultancy Alcor in Tunisia. According to Missaoui, there is plenty of potential – even Greece is three times as energy efficient as a country like Egypt – but also a lack of awareness, inadequate clean energy incentives, limited bank involvement and reluctant utilities, to name but a few handicaps. Renewables development is also hampered by subsidised fossil fuel prices.
“Now the project is bottom up. The big learning [from Desertec] was that it cannot be top-down”
Simone Mori, Head of European Affairs at Italian energy giant Enel, said he saw “specific, local investments here and there” but “no process” to underpin an energy transition. “The problem of finance for us is secondary,” he added. “If the regulatory framework is stable, the finance will follow.”
Missaoui suggested that countries need:
- energy transition laws with long-term goals for renewables and energy efficiency
- energy subsidy reforms
- an enabling framework to mobilise private finance
- independent energy regulators
- and a more regionally integrated market
Like in the EU, building and product standards can play a vital role in driving energy efficiency, added Kaupp, but are frequently not enforced. In contrast, smart grids and meters “can help” with energy efficiency but “we can do many things before tackling the last, most difficult 5% [energy saving]”, Missaoui said.
The EU can help, he suggested, by playing a coordinating role, but also, very concretely, by ensuring that EU funds cater to small, distributed generation projects and not only “big, easy targets such as a 100MW wind project”.
Certainly one EU official at the meeting, Paul Hodson, Head of Unit for Energy Efficiency at the Commission, said he saw real potential to work together on financing, benchmarking and product policy. Hodson emphasised that the case for energy transition extends well beyond climate change to jobs and growth.
Oil pice peak
Zohra Ettaik, Director for Renewables and Energy Efficiency at the Ministry of Energy, Mines, Water and the Environment in Morocco, said that after the US$140 a barrel oil price peak in 2008, Moroccan policy has been driven primarily by security of supply concerns.
Morocco is probaby furthest ahead in renewable energy development in the region. Ettaik said his country will be looking to export renewable power to Europe in future.
Paul van Son, Chairman for MENA and Turkey at Innogy (the clean energy split-off from RWE) and ex-CEO of Desertec, described the transformation of “Desertec 2008” into “Desert Energy 2017”. Today initiatives are aimed first and foremost to supply local power needs, exporting only what’s left, he said. “In 20-30 years, this region will be 100% renewable,” he predicted. “Now the project is bottom up. The big learning [from Desertec] was that it cannot be top-down.”
Turkey is already selling electricity to Iraq. Jordan hopes to do so too. Saudi Arabia wants to sell electricity to Africa, via Egypt, and maybe to Europe
André Merlin, CEO of Medgrid, a project dating back to the Desertec era that aimed to establish a high-voltage network around the Mediterranean (it was derailed by geopolitical developments such as the war in Syria) told the Valletta meeting that the grid work today is about creating North-South interconnectors between the EU and North Africa. This would allow for the two-way exchange of electricity between the two regions and enable them to benefit one another. They are complementary in many ways, Merlin said: for example, EU demand peaks in winter; North Africa’s in summer.
The Arab League has a plan to connect up all its members for gas and electricity “so whether connected with Europe or not, we will be connected with each other,” as one delegate said. Turkey is already selling electricity to Iraq. Jordan hopes to do so too. Saudi Arabia wants to sell electricity to Africa, via Egypt, and maybe to Europe.
From the EU’s perspective, energy is one of four development priorities. An external investment plan that is currently being scrutinised by MEPs and member states looks to provide an EU guarantee to clean energy investors in third countries. In terms of its own clean energy needs, Europe is held back by over-capacity in power generation. Italy was over-supplied for 11 months of last year, Mori said in Valletta, adding: “Many coal plants in Europe still earn money and will for quite a long time.”
The challenge for Europe today is not so much deploying more renewables as getting those already out there absorbed by the system, also by phasing out inflexible, older fossil fuel capacity. There may yet come a time when this experience too, will come in handy for the MENA region.