Power Market Opening for Renewable EnergyCase of Maghreb Countries

3rd MEDREG-IMME SeminarReform and Opening of Maghreb Electricity Markets

Session III : Mitigating the dominant position of energy incumbents

11-12 September 2013

Rim Boukhchina, Maged Mahmoud

Technical expert

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Who We Are

Our Mission

RCREEE is an independent regional think tank organization created in 2008, owned by its Member

States and hosted by Egypt

A Significant Share of Renewable Resources and a Highly-Efficient Energy Consumption in the Arab Region

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Our Work Areas

Research and Analysis

• Data collection and analysis

• Reports, indexes, and performance indicators

• Maintaining a regional database

• Monitoring and assessment

• Specific studies• Publishing and

dissemination• Research and

development grants

Capacity Development

• Pricing and tariffs• Projects planning and

management• Products and services

certification and standardization

• New technology orientation

• Energy service providers regulations and certification

• Statistics, research, and data analysis

Technical Assistance

• Certification and standardization schemes and guidelines

• Policies and regulations design

• Implementation planning

• Compliance guidelines• Projects tendering

processes design and guidelines

• Research and development grants

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Liberalised Electricity Markets

INDICATORS

Political Commitment

Market design

Regulation and institutional framework

Electricity prices

Grid access

Interconnection…..

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RE Maghreb countries profiles

Increased efforts to integrate renewable electricity into their power markets.

Defined future shares of green electricity in their national generation mixes

Algeria

MoroccoTunisia

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Fossil Fuel

subsidies

IPP

Institutional Support

Grid Access

Supporting

Policies

Finance and

Investment

RE Maghreb countries profiles

RE Market Evaluation

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RE Maghreb Market Evaluation

Algeria

• Existing of RE fund• No financial guarantee

to private investors to ensure payment under PPA

• No customs duty or internal tax benefits

Morocco

• Investment incentives• No financial guarantee

to private under PPA• No customs duty or

internal tax benefits

Tunisia

• Tax benefit for RE Equipment

• Available financial incentives for small scale RE projects

• No financial guarantee to private under PPA

Finance and Investment

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RE Maghreb Market Evaluation

Algeria

• Public competitive bidding for large-scale private RE projects.

• Law ensure energy purchase

• Feed-in Tariffs ???• No net-metering

policy for small-scale RE projects.

Morocco

• Public competitive bidding for large-scale private RE projects.

• No obligation to conclude long-term PPA with private producers.

• No feed-in Tariffs.• No net-metering

policy for small-scale RE projects.

Tunisia

• Net-metering policy for small-scale grid.

• No long-term PPA for private.

• No feed-in Tariffs.• No public competitive

bidding for large scale project.

Supporting policies

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RE Maghreb Market Evaluation

Algeria

• Priority access to RE is granted by Decree

• RE grid code is under preparation.

• No detailed grid map for RE sites

Morocco

• RE grid code is under preparation.

• No detailed grid map for RE sites.

• No priority access• RE is not authorized to

access for LV and MV

Tunisia

• Existing of Technical specifications related to RE connecting

• RE grid code is under preparation

• No detailed grid map for designated RE sites

• No priority access to RE

Grid access

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RE Maghreb Market Evaluation

Algeria

• Institutions to support and achieve RE targets exist

• RE research and development institute exist

• Detailed solar Atlas• No detailed wind Atlas• No land allocated for

large scale RE projects

Morocco

• Institutions to support and achieve RE targets

• RE research and development institute

• Detailed wind and solar Atlas

• land allocated for large scale RE project by project

Tunisia

• Existing of institutions supporting RE Deployment

• RE research and development institute

• Detailed wind Atlas• No land allocated for

large scale RE projects• No detailed Solar Atlas

published

Institutional support

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RE Maghreb Market Evaluation

Algeria

• Private generation of electricity from conventionnel and RE.

• Self-production of power from RE

• No specific condition for electricity surplus sale : Decree under preparation

Morocco

• Private electricity generation from conventionnel and RE.

• Self RE production• No guarantee for excess

power purchase

Tunisia

• Private Conventional electricity generation through concessions

• self-consumption with the possibility of feeding surplus electricity to the grid

• No IPPs producing RE exist

IPP

State Utilities acting as (quasi-) monopolists in terms of electricity transmission and distribution(vertically integrated utilities)

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RE Maghreb Market Evaluation

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RE Maghreb Market Evaluation

Electricity rates and taxes are often related in non-transparent ways in most Arab Countries due to The importance of Hydrocarbon potential in some Arab States,

Transparent Price signal in Morocco, Fairly significant subsidy in Algeria, Electricity still subsidies in Tunisia

Electricity Prices in Maghreb Countries

US$/kWh

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Electricity Maghreb Market Evaluation

Working on a Common Internal Electricity Market, and as a long-term goal, a gradual integration and regulatory harmonization with neighboring countries

Grid interconnections

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RE Maghreb Market Evaluation

STRENGTHS

Huge future market

Strong government involvement

Existence of basic regulatory framework related to private production

Grid Access

Algeria

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RE Maghreb Market Evaluation

STRENGTHS

Important future market

Strong Government Involvement

Existence of LS private production

Land allocation

Morocco

Transparence price signal

Structured RE Sector

Interconnection with Spain

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RE Maghreb Market Evaluation

STRENGTHS

Important RE potential

Incentives for small size projects

Net metering

Feed-in tariffs

Tunisia

Fiscal support Small size market

Strategic situation and proximity to Italy

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Focus on national market Governments, Utilities, Regulators and System Operators

must collaborate to establish rules and electricity market design and to create a competitive market through implementing specific regulatory framework and detailed legislation and support its further development.

Setting up an independent regulator.

Electricity infrastructure reinforcement

Tariff reform. Establishment of an attractive market for the private sector

with clear and concrete periodic RE targets.

Regional market : Grid Interconnection, Export, Electricity trade…..

Conclusion

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Relevant RCREEE interventions

Challenges

• Lack of a comprehensive, consolidated, and accurate data on the Arab region’s RE and EE readiness and capabilities.

Interventions

• Identify standard dimensions and a consistent methodology to rank and benchmark the Arab region’s market capabilities and conditions in RE and EE.

• Collect and analyze data annually from reliable international and local resources.• Publish and disseminate annual reports and briefs through multiple printed and digital channels.

Results

• Provide the first accurate and comprehensive data source for RE and EE research and policy design.

Arab Future Energy Index (AFEX)

Thank you Rim BOUKHCHINA & Maged MAHMOUDSenior Expert

Regional Center for Renewable Energy and Energy Efficiency (RCREEE)

Building of the Hydro Power Plants Execution Authority, 7th floor, Ministry of Electricity and Energy , Melsa District – Ardh El Golf Nasr City - Cairo, Egypt

rim.boukhchina@rcreee,orgmaged,mamoud@rcreee.org

www.rcreee.org