Dii: Enabling Solar and Wind Markets in MENA and Socio-economic Development 1st DISEM Workshop

Julian Blohmke Dii GmbH

Tunis, 03.09.2012

© Dii GmbH 2 September 2012

Disclaimer

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© Dii GmbH September 2012 3

21 Shareholders 35 Associated Partners

Dii: 56 partners from 16 countries

Source: Dii

© Dii GmbH 4 September 2012

Develop a Rollout Plan

until 2050

Create a favourable regulatory

environment

‘What has to be done to cover, in partnership with the MENA-region, a substantial part of

the local and European demand with electricity from sun and wind?’

Dii is guided by its mission statement and three key objectives

Dii mission

Enable concrete reference

projects

Dii objectives

Source: Dii

© Dii GmbH 5 September 2012

Dii acts as „market enabler“ on different levels

EUMENA (system) strategy

Country strategies

Enable Reference Projects

Develop RE Projects

Construct RE plants

Operate RE plants

Market players

Market players

Market players

© Dii GmbH 6 September 2012

Why we do economic impact assessment: Green growth and MENA policy challenges

…create jobs and raise income

Respond to domestic pressure within

society

Restore confidence of economic actors

…manage impact of fluctuating fuel and

food prices

Social cohesion

Macroeconomic stability

Economy-wide challenges in MENA

Renewable energies could help…

© Dii GmbH 7 September 2012

Approach towards assessing economic benefits from renewables deployment in EUMENA

Computable general equilibrium model and multiplier analysis:

1) Economic activity per sector/ country 2) Labor market impact

Dii Localization Assessment and Economic Impact Assessment

Localization of value added/ industry activity has impact on economic

activity at country level

Build-up scenarios determine investment over time until 2050

for CSP, PV, Wind, Grid technology

Technology Build-up Dii Localization Assessment

Dii Economic Impact Assessment

1

2

© Dii GmbH 8 September 2012

Renewable energy industry capacity is spread across the MENA region…

(15| 2)

(5| 1)

(0 | 1)

(8 | 1)

(10| 2) (12 | 5)

Geographical distribution of renewable energy technology manufacturing companies correlates with renewable energy project activities in MENA

Note: (current production, announced to produce near term) Source: Dii assessment

Companies which manufacture components of CSP, PV, Wind technologies (observed as of today)

© Dii GmbH 9 September 2012

…while component manufacturing capacities in MENA correlate with manufacturing complexity

Dependency between complexity of manufacturing process and local production capacity in MENA

med

ium

low

hig

h

current

near term

CSP technology

potential

Polysilicon

Wafer

med

ium

low

hig

h

current

near term

potential

Receiver

Mirror Solar glass

MPPT/ Inverter

Cable

Module assembly

Mounting structure

Mounting structure

Pipes/ heat exchanger

Aluminum components

Turbine

Generator

Molten salt

Definition: current = production today, near term = production planned, potential = company with potential know-how (or in the future). Source: Dii assessment

PV technology Wind technology

med

ium

low

hig

h

current

near term

potential

Blades

Tower

Gearbox/ bearings

Nacelle assembly

Generator

Capacity

Complexity

Complexity

Complexity

Capacity

Capacity

© Dii GmbH 10 September 2012

Dii: A Sustainable Power System for EUMENA –feasibility of integrated EUMENA system is proven

© Dii GmbH 11 September 2012

BACKUP

© Dii GmbH September 2012 12

Dii is open to all field-proven technologies

Transmission Lines Wind PV

Thin-film

CSP

On-shore turbines

AC (short & medium distances)

Mono/Poly-Crystalline Parabolic trough

Solar power tower

Fresnel

Hybrid (CSP + Gas)

Concentrated

HVDC (long distances)

Source: Dii; The Science Museum; phault (Flickr)

Off-shore turbines

© Dii GmbH 13 September 2012

Dii has signed cooperation agreements to assist in kick-starting projects in MENA countries

MoU with MASEN, Moroccan Solar Agency

May 2011

MoU with Sonelgaz, Algerian energy supplier

December 2011

Focus of the partnership

Joint study for a Reference Project up to 1000 MW,

exchange of technical expertise and support in

the advancement of renewable energies in

Algeria to promote industrial cooperation, and

the creation of jobs

MoU with STEG ER, subsidiary of Tunisian

utility for electricity and gas July 2011

Focus of the partnership

Pre-feasibility study for a Reference Project for

generating 1000MW from RE in Tunisia. Main topics of

the study: RE potential in Tunisia, also as transit hub, possible Export, regulatory

framework

Focus of the partnership

Development of a Reference Project with 500

MW solar capacity (400 MW CSP, 100 MW PV)

planned, to demonstrate, among others, the

feasibility of the export of solar

electricity to Europe

Source: Dii

© Dii GmbH 14 September 2012

Dii´s methodology to assess RE potentials in MENA countries

Grid

Finance

RE project business case proposals Markets

Regulation Solar and wind resources

RE techno- logies

Solar (GHI,

DNI) resource for PV and CSP

Wind speeds Available

suitable land

Performance

estimates Current and

future system costs for PV Wind CSP

Grid study Congestions Cost impact

on RE projects

Cost of inter-connectors to Europe

Transit Business Cases

Local market

regulations and prices

Export market regulations and prices

Use of a

project finance cash flow model

Commercial and concessional financing conditions

Application of

technology and country know-how to a number of specific business cases incl. site proposals

Estimates on subsidies needed

Socio- economic effects

Impact of RE

projects on labor markets, fossil fuel dependence, CO2 emissions, water use

Source: Dii

© Dii GmbH 15 September 2012

Reference Projects – Dii role defined as "enabler"

Main tasks

Prepare political ground for reference projects

Identify gaps in regulatory framework for desert power generation, transmission and off-take in EU

Identify the generation cost and technology mix for renewable desert power generation (required incentives as residue)

Evaluate generation site (measurement campaign, etc.) and transmission conditions and ear-mark/secure generation mix through agreement with responsible local tendering organization

Lobby for required regulatory framework in EU and MENA

Identify willing off-takers, proposes off-take arrangements and negotiates and bundles interests

Promote Dii idea

Identify project

business oppor-tunities

Market desert power

Establish regula-

tory frame-work

Identify suitable

sites

Contract PPA

Calculate business

case Tender

Build (EPC)

Operate Transfer

Secure land & get

permits

Achieve financial closure

Value chain reference projects

Dii’s role

Source: Dii

Analyze regula-

tory frame-work

Create credibility

for offtake &

spon-soring