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Action plan for high-priority renewable energy initiatives in Southern and Eastern Mediterranean area

Final Report Summary - REMAP (Action plan for high-priority renewable energy initiatives in Southern and Eastern Mediterranean area)

The REMAP project aimed to provide better knowledge on the wind and solar resources available in the Mediterranean region and opportunities to invest in wind and 'concentrating solar power' (CSP) projects particularly in Algeria, Tunisia, Jordan and Turkey. Thanks to a close cooperation with national stakeholders, it brought information about the priorities given by these different countries to the implementation of CSP and wind power projects. The project developed adapted financing schemes for the implementation of the projects.

The energy sector in the Mediterranean region is confronted with three major challenges: allow access to energy for all, ensure the supply in a rational and efficient way to face a fast growing energy demand and limit the impacts on the environment, especially by mastering the greenhouse gas emissions associated with generation and use of energy. The Mediterranean region is strongly concerned with global warming. Mediterranean countries have an interest to prepare together for their long term future. It is a challenge as the obstacles to a better quality of life of an increasing population are numerous: energy and water scarcity, environment deterioration, etc.

Gathering all competences and wealth will allow reaching a better path for sustainable development. The Mediterranean economies rely mainly on gas, oil and nuclear for their energy supply. By 2020, the share of gas is expected to further increase, while the share of oil should shrink. Although growing, renewable energy sources are expected to contribute marginally under the reference scenario. It is expected that in 2020 the Mediterranean region will be importing over 30 % of its oil needs and 27 % of its natural gas needs. Considering the burdens this will involve both on the economies and the environment, promoting energy efficiency and developing renewable energy is clearly a high priority and a win-win strategy for all countries.

The objectives of the project were to work with key stakeholders in order to achieve the following:
- state of the art and synthesis of the renewable atlas in the SEMCs;
- identification and prioritisation of potential demonstration sites for wind and CSP in the SEMCs;
- commitments by major stakeholders towards wind and energy CSP integration in the SEMCs;
- proposal for adapted financing schemes for the identified priority demonstration projects;
- elaboration of an action plan for a few well identified initiatives able to be implemented;
- dissemination of the results of the project to a wide audience in Europe and in the Mediterranean region.

The establishment of long-term power purchase agreements for CSP-electricity has the following advantages for the Southern and Eastern Mediterranean region:
- Tariffs (PPA) for newly installed capacity can be adjusted year by year taking into account advancements of CSP industry, inflation rates, general cost escalation related to energy etc. To optimise the benefits for the region and to minimise the country's necessary investments for the market introduction of this new domestic energy source.
- Southern and Eastern Mediterranean governments or utilities can individually control the total capacity related to each tariff level and adjust the capacity to be installed year by year according to the needs of each country, thus optimising the total cost of market introduction and maximising the cost savings achieved by the CSP plants.
- The Southern and Eastern Mediterranean countries can tap a new, very large and sustainable source of energy that is domestic to the region with relatively low public investment.
- This new source can support economic development of the Southern and Eastern Mediterranean region and may also become a potential export product in terms of solar electricity (and later eventually solar hydrogen) for Europe.

CSP has the potential to create a real win-win situation between foreign investors (industrial and / or financial) and the Southern and Eastern Mediterranean countries if lessons are learned from the support schemes in e.g. Europe:
- Introduction of the technology can be made cheaper by offering project investors a better visibility on project cash flows over a longer time period (countries adopting feed-in tariffs have obtained lower electricity production costs than the system of certificates).
- The possibility to sell electricity in neighbouring countries adds flexibility and lowers the risk for a project.
- Transparency for all project aspects (permits, legal advice, fiscal treatment etc) reduces perceived risk ('guichet unique').
- Commitment said and shown by all levels of policymaking will credit to the beliefs for long term stability of the positive investment environment.

Necessary conditions for successful CSP implementation in the South and East Mediterranean are 'reliable resource assessments of direct normal irradiance' and 'reliable economic conditions'.

Wind power technology is mature and is in that sense well known to national stakeholders and widely accepted as a reliable alternative to conventional electricity generation technologies. But since wind is a variable energy source, and it is rather difficult to predict its variation, care has to be taken when integrating large wind farms in existing electric power grids in order to avoid grid failures. Also, it was observed that grids are generally weak in target regions, which could hinder development of wind power if the grid is not improved. And in case of small remote grids, electricity storage solutions could also be considered, even though such technologies remain expensive at the time of writing. In conclusion, if no particular conditions are set regarding large-scale integration of wind power in countries with a low penetration of such technology, wind power development could be hindered by issues with grid management, grid instability and even grid failure. The legal and institutional framework is not always adequate in some countries. Barriers for investors include high capital costs, technical risks, financial risks, and competing fuels whose full costs are not accounted for (subsidies, environmental externalities etc), as well as uncertain policies, inadequate legal frameworks, lack of infrastructure, and lack of regional power sharing agreements and networks. Given the uncertainties of future business, the supply industries have operated on the basis of serving one-off customers instead of setting up complete R&D, large-scale manufacturing, and operations and maintenance programs. The result is very high cost, underexploited economies of scale, and limited investment in R&D leading to technology development and innovation.

More information about the project results and knowledge can be found at its website, at: http://www.remap-ec.eu.

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