Energy Efficiency and Renewable Resources in the Arab Region Ibrahim Abdel Gelil Arabian Gulf University 9/8/20151 UNDP Regional Consultation Meeting 6-7

Ibrahim Abdel GelilArabian Gulf University

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UNDP Regional Consultation Meeting

6-7 October 2010

Arabian Gulf University

UNDP Regional consultation meeting

6-7 October, 2010


Socio-economic Contexts Energy Situation Market Drivers for RE in the Arab

Region Positive Signs from the Region Policy Framework Institutions Major Barriers for Market Development Policy Recommendations Opportunities for Arab-Arab cooperation

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6-7 October, 2010


High demographic growth (1-3%) High economic development Urbanization (51% on average) Economically diverse region:

◦ oil-rich economies (Algeria, Egypt, and Syria)◦ oil-scarce (Jordan, Lebanon, Morocco, Palestine,

and Tunisia) Two major influencing factors for the past

few decades: ◦ price of oil◦ state controlled economies (especially in

managing the energy sector)

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High unemployment ratesHigh illiteracy ratesInadequate funding for scientific research

Weak ability to attract foreign direct investments

Weak regional economic integration,

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Energy resources unequally available Concerns about oil supply in oil importing

countries (volatility of oil prices) High energy and electricity demand

growth Access to electricity in rural areas Renewable Energy resources are abundant

but not yet significantly developed Environmental concerns due to heavy

reliance on fossil fuels.

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Drivers of energy demand:◦ Population growth◦ Rapid urbanization, and ◦ Economic growth

Energy demand is likely to expand by 70% in the next 20 years relying 87% on fossil fuels (study by IEA).

This is unsustainable scenario due to:◦ Increase dependence on depleted resources◦ Raise energy burden at the expense of economic

growth and development◦ Amplify the environmental impacts, in particular in

urban areas.

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Disparities across the region Per capita CO2 and carbon intensity

◦ High in the GCC◦ Low in the rest of the region

Average energy intensity (TPES per GDP) is higher than the world average

Average carbon intensity is higher than the world average

Oil and gas represent more than 90 % of the total primary energy supply

High rate of electrification (~ 100% in Lebanon, Kuwait)

Parts of the rural population still lack access to electricity, and use biomass to meet their energy needs (Yemen, Sudan).

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Arabian Gulf University 04/19/238


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Securing energy supply for the oil importing countries

Securing access to modern energy services for rural population

Energy Diversification Reducing GHG emissions, and Creating enabling environment to

attract investment in the energy sector.

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contributing to energy supply security, reducing dependency on fossil fuels, Mitigating local environmental problems, and reducing GHG emissions

offering good opportunities for CDM finance

efficiency gains and cost reduction of the renewable technologies

vast potential of solar radiation

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Arabian Gulf University04/19/23 11

(www.dlr.de/tt/med-csp)

Direct normal irradiance (kWh/m2/y): 2000-2800


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Arabian Gulf University 04/19/2312

(www.dlr.de/tt/med-csp)


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Country Total capacity (MW)

Solar Capacity (MW)

Algeria 155 to be increased to

500

25

400 75

400 75

400 75

Egypt 127 31

Morocco 400 30

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Clear political commitments towards more sustainable energy sector as clearly reflected in many Declarations and policy documents.

Energy sector reform started gradually and took different shapes

Regional energy integration projects are planned or underway.

Several CSP projects in North Africa

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Commercialization of wind energy and introduction of CNG as a transport fuel in Egypt

Widespread use of solar heating in Palestine, Tunisia, Morocco.

Widespread dissemination of CFL in Egypt, Lebanon, Tunisia

Energy programs at King Abdullah University for Science and Technology in Saudi Arabia

MASDAR, the first zero-carbon city in Abu Dhabi

Introduction of economic incentives in Algeria, Jordan, and Lebanon

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Sub regional electricity grid interconnections are at different stages of implementation:◦ Interconnection of Egypt, Jordan, Syria,

Lebanon, and Turkey◦ Interconnection of Arab Maghreb countries

(including a connection with Europe) Cross-boarders natural gas projects:

◦ Arab Gas pipeline between Egypt, Jordan, Syria and Lebanon (with future prospect to Cyprus, turkey and Europe);

◦ Natural gas projects between North African countries, and between them and Europe.

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Restructuring activities of the energy sector are vital for:◦ improving sectors’ efficiency◦ encouraging private sector participation◦ attracting foreign direct investments (FDI),

and◦ promoting independent power producers of

solar thermal and other renewable energy technologies.

Sector reform has started in some countries and has taken different formats

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Historically, prices has been heavily subsidized in the region.

Prices are more heavily subsidized in resource-rich countries such as in the GCC, Egypt, Algeria, and Syria.

In net importers of fossil fuels (Lebanon, Jordan, Morocco, and Palestine) price distortions are less.

Governments are striving to phase out subsidies while alleviating its social impacts.◦ In 2007, Egypt announced a new plan to phase out

energy subsidies for industry.◦ Jordan eliminated fuel subsidy in 2004 over four years. ◦ Morocco phased out subsidies and is generating net

tax revenues of about 24 %.◦ Gasoline is not subsidized in the UAE

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Algeria is the only country in the region that has a feed-in-tariff.

Except in Algeria, there are no specific laws for promoting renewable energy technologies in the region.

Tax, fiscal measures and other incentives are adopted in some countries.

Laws to promote RE are being prepared in Egypt, Morocco, Jordan, and Lebanon.

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Existing national institutions mandated with renewable energy development are:◦ CDER (Algeria), NREA (Egypt), CDER (Morocco),

ANME (Tunis) and NERC (Jordan). Regional cooperation projects supported

by the EU are:◦ Mediterranean Association of the National

Agencies for Energy Conservation (MEDENER)◦ Mediterranean Renewable Energy Center

(MEDREC) in Tunisa for North African Countries. Regional UN and other bilateral and

multilateral organizations promoting renewable energy in the region include UNESCWA, UNEP, UNDP, GEF, EU, GTZ, USAID, and others

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Source: REN 21, 2010


6-7 October, 2010


The region has sufficient local manufacturing capacities to produce solar water heaters..

Local manufacturers are lacking national schemes for standardization, testing and certification.

Few number of industry associations to promote local industries

High potential of expanding local manufacturing of solar thermal technologies in some countries (Egypt, Tunisia)

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Third Party Financing◦ ESCO and RESCO undertake fully the project financing,

design development and operation.◦ Investment is reimbursed by payments related to the

performance of the technology installed.◦ The concept of Energy service company (ESCO) has been

implemented in Egypt and Tunisia. ◦ The RESCO concept has not been applied yet in the region

Build-Operate-Transfer (BOT)◦ BOT has taken different shapes and it is implemented in

financing some projects in Algeria, Egypt, Tunisia, and Morocco

Venture Capital◦ This financial mechanism has been rarely used in the

region.◦ MASDAR new initiatives

Clean Development Mechanism

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CDM offers opportunities to promote sustainable development through investment and clean technology transfer.

Worldwide there are a growing number of financing options for CDM projects.◦ World bank Carbon Funds◦ Government Carbon funds (e.g. Italian, Spanish,)◦ Private carbon funds (e.g. EU carbon fund, KfW

carbon fund) Only Egypt, Morocco, Qatar, Syria, UAE, and

Tunisia have registered projects in the CDM since its inception in 2005

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Source: CDM projects database, 2010


6-7 October, 2010


Policy Barriers◦ Lack of / or weak political will both at the

government and private sector levels.◦ Lack of national targets and / or strategies

for promoting renewable energy resources.◦ Lack of / or weak legal and institutional

framework.◦ Slow and incomplete liberalization process

of the energy and electricity markets.◦ Weak or Lack of domestic R&D programs

and low government expenditures in R&D.

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Market Barriers◦ Week capacity of information flow.◦ Low level of consumer awareness.◦ Difficulties to change consumers behaviors and

attitudes ◦ Lack of national standards, testing and certification

schemes.◦ Weak capacity of local assembly / manufacturing

distribution, installation and maintenance.◦ Lack of training programs for renewable energy

professionals.◦ Low level of awareness of local financing sector.◦ Lack of innovative financing schemes.◦ Social implications of the energy subsidies.

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Benefit from international experience such as “cities for climate protection campaign” of the I.C.L.E.I

Create a platform for Arab-Arab cooperation in this field

Test and demonstrate a range of policies and measures to build climate change resilience in the Arab cities

Disseminate lessons learned, successes and failures Resilient city action plan would include activities

such as:◦ Research and education ◦ Disaster management policies and measures◦ Promotion of “green building”◦ Public Education

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Economic Barriers◦ Heavy subsidies provided by governments

for oil, gas, and electricity.◦ High custom duties on renewable energy

technologies.◦ High initial costs of solar thermal

technologies.◦ Lack of internalizing external costs to

societies due to heavy reliance on fossil fuels.

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6-7 October, 2010


Ibrahim Abdel [email protected]


6-7 October, 2010


Remove key barriers Establish national targets for EE and RE

Integrate energy efficiency into energy, economic, and environmental planning

Strengthen legislative and institutional framework

Improve overall investment climate Develop proper financing schemes.

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Harness the potential for carbon finance in the region

Provide financial incentives Attract private sector investments Develop standards, testing, and

certification schemes Facilitate technology transfer Develop Institutional Capacity Develop capacity of research and

development Raise public awareness

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Regulatory and Institutional reform (Algeria, Tunisia)

Energy price Reform (Jordan, Morocco, UAE)

Energy Audits (Algeria, Tunisia) Economic incentives (Algeria, Tunisia,

Morocco) Energy efficiency codes and standards

(Egypt, Tunisia) Public awareness (Morocco, Lebanon)

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Documents

Energy Efficiency and Renewable Resources in the Arab Region Ibrahim Abdel Gelil Arabian Gulf University 9/8/20151 UNDP Regional Consultation Meeting 6-7